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TABLE OF CONTENTS V. RIGHTS AND OBLIGATIONS OF
SPOUSES ............................................... 40
PERSONS AND FAMILY A. LIVE TOGETHER ................................................ 40
B. FAMILY DOMICILE ............................................. 40
RELATIONS C. SUPPORT ........................................................... 40
D. MANAGEMENT OF FAMILY LIFE ...................... 40
I. EFFECT AND APPLICATION OF LAWS ... 2 E. EFFECT OF NEGLECT OF DUTY ........................ 40
A. WHEN LAWS TAKE EFFECT ................................ 2 F. EXERCISE OF PROFESSION .............................. 40
B. IGNORANCE OF THE LAW .................................. 2 G. USE OF SURNAME ............................................. 41
C. RETROACTIVITY OF LAWS .................................. 2
D. MANDATORY OR PROHIBITORY LAWS ............ 2 VI. PROPERTY RELATIONS OF SPOUSES 41
E. WAIVER OF RIGHTS ............................................. 3 A. MARRIAGE SETTLEMENTS ................................ 41
F. REPEAL OF LAWS ................................................ 3 B. DONATIONS BY REASON OF MARRIAGE ........ 42
G. JUDICIAL DECISIONS .......................................... 3
H. DUTY TO RENDER JUDGMENT .......................... 3 VII. FAMILY RELATIONS ......................... 57
I. PRESUMPTION AND APPLICABILITY OF A. WHAT CONSTITUTES THE FAMILY HOME? ..... 57
CUSTOM ................................................................... 4 B. WHO MAY CONSTITUTE THE FAMILY HOME? 58
J. LEGAL PERIODS ................................................... 4 C. WHEN IS IT DEEMED CONSTITUTED? ............. 58
K. APPLICABILITY OF PENAL LAWS ....................... 4 D. BENEFICIARIES ................................................. 58
L. BINDING EFFECT ................................................. 4 E. WHEN TERMINATED ......................................... 58
L. 1. ARTICLE 15 EMBODIES THE NATIONALITY F. WHEN IT MAY BE SOLD ..................................... 59
PRINCIPLE. [DACASIN V. DACASIN (2010)]................ 5 G. RIGHTS OF CREDITORS .................................... 59
L. 2. ARTICLES 15, 16 AND 17 ARE RULES OF
CONFLICT OF LAWS. ................................................... 5 VIII. PATERNITY AND FILIATION ............ 60
A. LEGITIMATE CHILDREN .................................... 60
II. PERSONS AND PERSONALITY ............. 6 B. PROOF OF FILIATION ........................................ 62
A. CONCEPT OF PERSON AND PERSONALITY ...... 6 C. ILLEGITIMATE CHILDREN ................................. 63
B. COMMENCEMENT AND TERMINATION OF D. LEGITIMATED CHILDREN ................................. 64
PERSONALITY .......................................................... 6
C. DEATH ...................................................................7 IX. ADOPTION ........................................ 66
D. JURIDICAL PERSONS ...........................................7 A. WHO CAN ADOPT.............................................. 66
E. RESTRICTIONS ON CIVIL CAPACITY .................. 8 B. WHO CAN BE ADOPTED (SEC. 8) ..................... 67
E. 1. PRESUMPTION OF CAPACITY.............................. 8 C. PRE-ADOPTION PROCEDURES ....................... 67
E. 2. RESTRICTIONS ON CAPACITY TO ACT ............... 8 D. ADOPTION PROCEDURES................................ 69
F. DOMICILE AND RESIDENCE OF PERSON ......... 12 E. WHO MAY NOT ADOPT/ BE ADOPTED ............ 70
F. RIGHTS OF AN ADOPTED CHILD ...................... 70
III. FAMILY CODE .................................... 14 G. RESCISSION OF ADOPTION .............................. 71
A. EFFECT AND RETROACTIVITY ........................... 14 H. RECTIFICATION OF SIMULATED BIRTH .......... 71
B. REPEAL AND AMENDMENT .............................. 14 I. RA 8043 – THE LAW ON INTER-COUNTRY
IV. MARRIAGE AND PERSONAL ADOPTION (JUNE 7, 1995)...................................... 71
I.1. WHO CAN ADOPT ................................................. 72
RELATIONSHIP BETWEEN SPOUSES ...... 14 I.2. WHO CAN BE ADOPTED ...................................... 72
A. CONCEPT OF MARRIAGE................................... 14
B. AGREEMENTS PRIOR TO MARRIAGE ............... 14 X. SUPPORT ............................................ 73
C. REQUISITES ........................................................ 15 A. WHAT IT COMPRISES .........................................73
C.1. KINDS OF REQUISITES AND EFFECTS OF NON- B. WHO ARE OBLIGED ............................................73
COMPLIANCE .............................................................. 15 C. SUPPORT PENDING LITIGATION ON THE
D. LAW GOVERNING VALIDITY OF MARRIAGES STATUS OF MARRIAGE ......................................... 75
ABROAD .................................................................. 19 D. AMOUNT ............................................................ 75
D.1 GENERAL RULE IN CONTRACTS.......................... 19 E. WHEN DEMANDABLE [ART. 203]..................... 75
D.2 MARRIAGES CELEBRATED ABROAD.................. 19 F. OPTIONS ............................................................ 75
D. 3 FOREIGN DIVORCES ........................................... 19
G. ATTACHMENT ................................................... 75
E. COMMON-LAW MARRIAGES ............................ 20
F. VOID AND VOIDABLE MARRIAGES .................. 20 XI. PARENTAL AUTHORITY AND CUSTODY
F. 1. VOID MARRIAGES................................................ 21
F.2. VOIDABLE OR ANNULLABLE MARRIAGE ..........27
OF CHILDREN ........................................ 75
G. THE LAW ON SEPARATION OF THE SPOUSES 32 XII. EMANCIPATION ................................ 77
G.1 SEPARATION IN FACT ......................................... 32
G.2 ABSOLUTE DIVORCE........................................... 32 XII. SUMMARY JUDICIAL PROCEEDINGS
H. LEGAL SEPARATION ......................................... 33
UNDER FC .............................................. 78

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A. PROCEDURAL RULES PROVIDED FOR IN THIS D. LIMITATIONS ON OWNERSHIP .......................102
TITLE SHALL APPLY TO [ART. 238]: ..................... 78 D.1. GENERAL LIMITATIONS: ....................................102
B. SEPARATION IN FACT ....................................... 78 D.2. SPECIFIC LIMITATIONS: ....................................103
C. INCIDENTS INVOLVING PARENTAL AUTHORITY
................................................................................ 79
IV. ACCESSION ...................................... 105
A. CLASSIFICATION OF ACCESSION ...................105
XIII. CARE AND EDUCATION OF CHILDREN A.1. WITH RESPECT TO IMMOVABLES .................... 105
A.2. WITH RESPECT TO MOVABLE PROPERTY ........113
.............................................................. 80
V. QUIETING OF TITLE ............................115
XIV. SURNAMES ..................................... 81 A. IN GENERAL.......................................................115
A. SURNAMES OF CHILDREN ................................ 81 B. PURPOSE ...........................................................115
B. WIFE AFTER AND DURING MARRIAGE ............ 81 C. NATURE: QUASI IN REM ...................................115
C. CONFUSION AND CHANGE OF NAMES ............ 81 D. JUSTIFICATIONS TO BRING AN ACTION TO
XV. RULES GOVERNING PERSONS WHO QUIET TITLE ...........................................................115
E. THE ACTION TO QUIET TITLE DOES NOT APPLY:
ARE ABSENT.......................................... 82 ................................................................................115
A. PROVISIONAL MEASURES IN CASE OF
F. REQUIREMENTS ................................................115
ABSENCE [ARTS. 381-383] .................................... 82 F.1. REQUISITES OF AN ACTION TO QUIET TITLE ... 115
B. DECLARATION OF ABSENCE [ARTS. 384-389] F.2. REQUISITES OF AN ACTION TO PREVENT A
................................................................................ 83 CLOUD: ...................................................................... 116
C. ADMINISTRATION OF THE PROPERTY OF THE G. QUIETING OF TITLE V. REMOVAL OF CLOUD .116
ABSENTEE [ARTS. 387-389] ................................. 83 H. PRESCRIPTION ..................................................116
D. PRESUMPTION OF DEATH [ARTS. 390-392] .. 84
VI. CO-OWNERSHIP ............................... 117
XVI. FUNERALS...................................... 85 A. REQUISITES ....................................................... 117
B. WHAT GOVERNS CO-OWNERSHIP .................. 117
XVII. ENTRIES IN THE CIVIL REGISTER... 86 C. CHARACTERISTICS OF CO-OWNERSHIP ........ 117
A. CIVIL CODE......................................................... 86 D. SOURCES OF CO-OWNERSHIP ........................118
B. RA 9048 AS AMENDED BY RA 10172 ............... 87 D.1. LAW ..................................................................... 119
C. RULE 108, RULES OF COURT ........................... 89 D.2. CONTRACT ......................................................... 119
D.3. INTESTATE SUCCESSION..................................120
D.4. TESTAMENTARY DISPOSITION OR DONATION
INTER VIVOS ..............................................................120
PROPERTY D.5. BY FORTUITOUS EVENT OR BY CHANCE ........120
D.6. BY OCCUPANCY.................................................120
I. CHARACTERISTICS ............................. 92 E. RIGHTS OF CO-OWNERS .................................120
E.1. RIGHT TO SHARE IN THE BENEFITS AS WELL AS
II. CLASSIFICATION................................ 92 THE CHARGES [NCC 485] .........................................120
A. HIDDEN TREASURE .......................................... 92 E.2. RIGHT TO USE THE THING OWNED IN COMMON
B. BASED ON MOBILITY [IMMOVABLE OR [NCC 486] ..................................................................120
MOVABLE] .............................................................. 92 E.3. RIGHT TO BRING AN ORDER IN EJECTMENT
B.1. REAL OR IMMOVABLE PROPERTY..................... 92 [NCC 487] ...................................................................120
B.2. PERSONAL OR MOVABLE .................................. 95 E.4. RIGHT TO COMPEL OTHER CO-OWNERS TO
B.3. IMPORTANCE AND SIGNIFICANCE OF CONTRIBUTE TO THE EXPENSES OF PRESERVATION
CLASSIFICATION UNDER THE NCC .......................... 96 AND TO THE TAXES [NCC 488] ................................120
C. BASED ON OWNERSHIP/ RIGHTS-HOLDER ... 97 E.5. RIGHT TO REPAIR [NCC 489] .............................121
C.1. PUBLIC DOMINION...............................................97 E.6. RIGHT TO OPPOSE ALTERATIONS ....................121
C.2. PRIVATE OWNERSHIP........................................ 98 E.7. RIGHT TO FULL OWNERSHIP OF HIS PART AND
D. BASED ON CONSUMABILITY............................ 99 OF THE FRUITS AND BENEFITS PERTAINING
D.2. NON-CONSUMABLE .......................................... 99 THERETO [NCC 493] ..................................................121
E. BASED ON SUSCEPTIBILITY TO SUBSTITUTION E.8. RIGHT TO PARTITION .........................................121
E.9. RIGHT TO REDEMPTION [NCC 1619] ..................121
................................................................................ 99 E. 10. RIGHT TO PROTEST AGAINST ACTS OF
E.1. FUNGIBLES .......................................................... 99
MAJORITY WHICH ARE PREJUDICIAL TO MINORITY
E.2. NON-FUNGIBLES ................................................ 99 [NCC 492(3)] ...............................................................121
III. OWNERSHIP ..................................... 99 F. IMPLICATIONS OF CO-OWNER’S RIGHT OVER
A. DEFINITION AND CONCEPT ............................. 99 HIS IDEAL SHARE ................................................. 122
B. TYPES OF OWNERSHIP ..................................... 99 G. RULES ............................................................... 122
G.1. ON RENUNCIATION OF SHARE (DIFFERENT
C. RIGHT IN GENERAL ........................................... 99
FROM RENUNCIATION OF CO-OWNERSHIP) ......... 122
C.1. RIGHTS INCLUDED IN OWNERSHIP [NCC 428] 99
G.2. REPAIRS FOR PRESERVATION ........................ 122
C.2. BUNDLE OF RIGHTS ........................................... 99
G.3. EMBELLISHMENTS OR IMPROVEMENTS ........ 122
C.3. PROTECTING PROPERTY ................................. 100
C.4. REMEDIES ...........................................................101 H. TERMINATION OR EXTINGUISHMENT ........... 123

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H.1. TOTAL DESTRUCTION OF THING OR LOSS OF K.2. ASSIGNMENT, EITHER GRATUITOUS OR
THE PROPERTY CO-OWNED .................................... 123 ONEROUS .................................................................. 134
H.2. MERGER OF ALL INTERESTS IN ONE PERSON K.3. POSSESSION BY ANOTHER .............................. 134
................................................................................... 123 L. RULES FOR LOSS OF MOVABLES ................... 134
H.3. ACQUISITIVE PRESCRIPTION ........................... 123 M. KINDS OF ANIMALS......................................... 135
H.4. PARTITION OR DIVISION .................................. 123 M.1. WILD OR FERAL ................................................. 135
H.5. SALE OF PROPERTY CO-OWNED .................... 123 M.2. TAMED ............................................................... 135
H.6. TERMINATION OF PERIOD AGREED UPON BY M.3. DOMESTIC ......................................................... 135
THE CO-OWNERS ..................................................... 123
H.7. EXPROPRIATION; AND ..................................... 123 VIII. USUFRUCT ..................................... 135
H.8. JUDICIAL OR EXTRAJUDUCIAL PARTITON ..... 123 A. OBJECTS OF USUFRUCT ................................. 136
A.1. INDEPENDENT RIGHTS...................................... 136
VII. POSSESSION .................................. 124 A.2. THINGS ............................................................... 136
A. CONCEPT OF POSSESSION ............................. 124 B. CHARACTERISTICS .......................................... 136
B. ESSENTIAL REQUISITES OF POSSESSION ..... 124 B.1. NATURAL CHARACTERISTICS ........................... 136
C. DEGREES OF POSSESSION ............................. 125 C. CLASSIFICATION .............................................. 136
D. CLASSES OF POSSESSION .............................. 125 C.1. BY ORIGIN ........................................................... 136
D.1. POSSESSION FOR ONESELF, OR POSSESSION C.2. BY PERSON ENJOYING THE RIGHT OF
EXERCISED IN ONE’S OWN NAME AND POSSESSION USUFRUCT ................................................................ 137
IN THE NAME OF ANOTHER [NCC 524]................... 125 C.3. BY OBJECT OF USUFRUCT ................................ 137
D.2. POSSESSION IN THE CONCEPT OF AN OWNER, C.4. BY THE EXTENT OF THE USUFRUCT ................ 137
AND POSSESSION IN THE CONCEPT OF A HOLDER D. RIGHTS AND OBLIGATIONS OF
WITH THE OWNERSHIP BELONGING TO ANOTHER USUFRUCTUARY .................................................. 138
[NCC 525] .................................................................. 125 D.1. RIGHTS AS TO THE THING AND ITS FRUITS .... 138
D.3. POSSESSION IN GOOD FAITH AND POSSESSION D.2. RIGHTS AS TO THE LEGAL RIGHT OF USUFRUCT
IN BAD FAITH [NCC 526] .......................................... 126 ITSELF ........................................................................ 141
E. ACQUISITION OF POSSESSION ....................... 127 D.3. OBLIGATIONS AT THE BEGINNING OF THE
E.1. WAYS OF ACQUIRING POSSESSION [NCC 531] 127 USUFRUCT OR BEFORE EXERCISING THE
E.2. BY WHOM MAY POSSESSION BE ACQUIRED USUFRUCT ................................................................ 141
[NCC 532]................................................................... 127 D.4. OBLIGATIONS DURING THE USUFRUCT .........142
F. WHAT DO NOT AFFECT POSSESSION [NCC 537] D.5. AT THE TIME OF THE TERMINATION OF THE
............................................................................... 128 USUFRUCT ................................................................ 143
F.1. ACTS MERELY TOLERATED ............................... 128 E. SPECIAL CASES OF USUFRUCT ...................... 144
F.2. ACTS EXECUTED CLANDESTINELY AND E.1. USUFRUCT OVER A PENSION OR A PERIODICAL
WITHOUT THE KNOWLEDGE OF THE POSSESSOR INCOME [NCC 570] ....................................................144
[NCC 1108].................................................................. 128 E.2. USUFRUCT OF PROPERTY OWNED IN COMMON
F.3. ACTS OF VIOLENCE AS LONG AS THE [NCC 582]...................................................................144
POSSESSOR OBJECTS THERETO [NCC 536]........... 128 E.3. USUFRUCT CONSTITUTED ON A FLOCK OR
G. EFFECTS OF POSSESSION .............................. 128 HERD OF LIVESTOCK [NCC 591] ...............................144
G.1. RIGHTS OF A POSSESSOR IN GOOD FAITH ..... 128 E.4. USUFRUCT OVER FRUIT BEARING TREES AND
G.2. OBLIGATIONS OF A POSSESSOR IN GOOD FAITH SHRUBS AND WOODLANDS [NCC 575-577] ...........144
................................................................................... 129 E.5. USUFRUCT ON A RIGHT OF ACTION TO
G.3. RIGHTS OF A POSSESSOR IN BAD FAITH........ 129 RECOVER PROPERTY [NCC 578] .............................144
G.4. OBLIGATIONS OF A POSSESSOR IN BAD FAITH E.6. USUFRUCT ON MORTGAGED PROPERTY [NCC
................................................................................... 129 600]............................................................................145
G.5. RIGHT TO BE PROTECTED IN HIS .................... 129 E.7. USUFRUCT OVER AN ENTIRE PATRIMONY [NCC
H. REIMBURSEMENT FOR EXPENSES – 598] ............................................................................145
POSSESSOR IN GOOD/BAD FAITH [NCC 546-552] E.8. USUFRUCT OVER DETERIORABLE PROPERTY
...............................................................................130 ....................................................................................145
H.1. NECESSARY EXPENSES .................................... 130 E.9. USUFRUCT OVER CONSUMABLE PROPERTY
H.2. USEFUL EXPENSES ........................................... 130 [NCC 574] ...................................................................145
H.3. EXPENSES FOR LUXURY .................................. 130 F. RIGHTS OF THE OWNER .................................. 145
I. LOSS OR UNLAWFUL DEPRIVATION OF A F.1. AT THE BEGINNING OF THE USUFRUCT...........145
MOVABLE PROPERTY .......................................... 132 F.2. DURING THE USUFRUCT...................................145
I.1. POSSESSION OF MOVABLE ACQUIRED IN GOOD G. EXTINGUISHMENT/ TERMINATION [NCC 603]
FAITH (IN CONCEPT OF OWNER) IS EQUIVALENT TO ............................................................................... 146
TITLE [NCC 559] ........................................................ 132 G.1. DEATH OF USUFRUCTUARY .............................146
I.2. PERIOD TO RECOVER [NCC 1140, 1132, 1133]..... 132 G.2. EXPIRATION OF PERIOD OR FULFILLMENT OF
I.3. FINDER OF LOST MOVABLE [NCC 719-720] ...... 132 RESOLUTORY CONDITION IMPOSED ON USUFRUCT
J. EFFECTS OF POSSESSION IN THE CONCEPT OF BY PERSON CONSTITUTING USUFRUCT ................146
AN OWNER ............................................................ 132 G.3. MERGER OF RIGHTS OF USUFRUCT AND NAKED
OWNERSHIP IN ONE PERSON .................................146
K. LOSS/TERMINATION OF POSSESSION [NCC G.4. RENUNCIATION OF USUFRUCT ....................... 147
555] ........................................................................ 134 G.5. EXTINCTION OR LOSS OF PROPERTY [NCC 608]
K.1. ABANDONMENT................................................. 134 .................................................................................... 147

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G.6. TERMINATION OF THE RIGHT OF PERSON X. NUISANCE ........................................ 164
CONSTITUTING THE USUFRUCT ............................. 147 A. NUISANCE V. TRESPASS ................................. 164
G.7. PRESCRIPTION .................................................. 147
B. NUISANCE V. NEGLIGENCE ............................. 164
H. CONDITIONS NOT AFFECTING USUFRUCT ...148
H.1. EXPRORPIATION OF THING IN USUFRUCT [NCC
C. CLASSES ........................................................... 164
609]............................................................................ 148 C.1. ACCORDING TO NATURE...................................164
C.2. ACCORDING TO SCOPE OF INJURIOUS EFFECTS
H.2. BAD USE OF THING IN USUFRUCT [NCC 610]. 148
....................................................................................165
IX. EASEMENT ...................................... 148 D. DOCTRINE OF ATTRACTIVE NUISANCE ......... 165
A. CHARACTERISTICS ..........................................148 E. LIABILITY IN CASE OF NUISANCE ................... 165
A.1. ESSENTIAL FEATURES: ..................................... 148 E.1. WHO ARE LIABLE................................................165
B. GENERAL RULES ............................................. 150 E.2. LIABILITY OF CREATOR OF NUISANCE ............165
E.3. LIABILITY OF TRANSFEREES.............................166
C. CLASSIFICATION ............................................. 150
E.4. NATURE OF LIABILITY .......................................166
C.1. AS TO RECIPIENT OF BENEFITS ........................ 150
E.5. RIGHT TO RECOVER DAMAGES ........................166
C.2. AS TO ITS EXERCISE [NCC 615]......................... 150
C.3. AS INDICATION OF ITS EXISTENCE [NCC 615] . 150 F. REGULATION OF NUISANCES ......................... 166
C.4. BY THE OBJECT OR OBLIGATION IMPOSED [NCC F.1. PUBLIC NUISANCE .............................................166
616].............................................................................. 151 F.2. PRIVATE NUISANCE........................................... 167
C.5. AS TO CAUSE OR ORIGIN [NCC 619] ................. 151
XI. MODES OF ACQUIRING OWNERSHIP
D. RELEVANCE OF CLASSIFICATIONS ................ 151
D.1. DETERMINES WHAT EASEMENTS CAN BE AND OTHER REAL RIGHTS.................... 168
ACQUIRED BY PRESCRIPTION.................................. 151 A. OCCUPATION ................................................... 168
D.2. DETERMINES WHAT EASEMENTS CAN BE A.1. REQUISITES ........................................................168
ACQUIRED BY TITLE .................................................. 151 A.2. KINDS .................................................................169
D.3. DETERMINES HOW TO COMPUTE THE A.3. SPECIAL RULES [NCC 716] ................................169
PRESCRIPTIVE PERIOD [NCC 621] ............................ 151 B. DONATION ........................................................ 170
D.4. DETERMINES HOW EASEMENT IS LOST BY B.1. OTHER INSTANCES CONSIDERED AS DONATION
PRESCRIPTION [NCC 631 (2)] ................................... 152 .................................................................................... 170
E. CREATION ......................................................... 152 B.2. NATURE .............................................................. 170
E.1. BY TITLE OR BY SOMETHING EQUIVALENT TO A B.3. REQUISITES........................................................ 170
TITLE .......................................................................... 152 B.4. WHAT MAY BE DONATED ................................. 170
E.2. BY LAW (LEGAL EASEMENTS) .......................... 152 B.5. WHAT MAY NOT BE DONATED ......................... 170
E.3. BY WILL OF THE OWNERS (VOLUNTARY C. KINDS OF DONATIONS .................................... 170
EASEMENTS) ............................................................. 152 C.1. AS TO ITS TAKING EFFECT ................................. 170
E.4. BY PRESCRIPTION ............................................. 153 C.2. AS TO CAUSE OR CONSIDERATION ................. 172
F. RIGHTS AND OBLIGATIONS OF OWNERS OF D. FORMALITIES REQUIRED ................................ 172
DOMINANT AND SERVIENT ESTATES ................ 153 D.1. HOW MADE AND ACCEPTED............................. 172
F.1. RIGHTS OF DOMINANT ESTATE OWNER ......... 153 D.2. PERFECTION ...................................................... 173
F.2. OBLIGATIONS OF DOMINANT ESTATE OWNER D.3. QUALIFICATIONS OF DONORS AND DONEES 173
................................................................................... 153 E. EFFECTS OF DONATION / LIMITATIONS ........ 174
F.3. RIGHTS OF THE SERVIENT ESTATE OWNER ... 154 E.1. IN GENERAL ........................................................ 174
F.4. OBLIGATIONS OF SERVIENT ESTATE OWNER 154 E.2. SPECIAL PROVISIONS ....................................... 175
G. EXTINGUISHMENT OF EASEMENTS ...............154 F. VOID DONATIONS [NCC 739-740, 1027] ......... 176
G.1. MERGER ............................................................. 154 F.1. THOSE MADE BETWEEN PERSONS WHO WERE
G.2. BY A NON-USER FOR 10 YEARS ....................... 155 GUILTY OF ADULTERY OR CONCUBINAGE AT THE
G.3. BY IMPOSSIBILITY OF USE ................................ 155 TIME OF THE DONATION .......................................... 176
G.4. EXPIRATION OF THE TERM OR FULFILLMENT OF F.2. THOSE MADE BETWEEN PERSONS FOUND
RESOLUTORY CONDITION ....................................... 155 GUILTY OF THE SAME CRIMINAL OFFENSE, IN
G.5. RENUNCIATION OF THE OWNER OF THE CONSIDERATION THEREOF ..................................... 176
DOMINANT ESTATE .................................................. 155 F.3. THOSE MADE TO A PUBLIC OFFICER OR HIS
G.6. OTHER CAUSES NOT MENTIONED IN NCC 631 WIFE, DESCENDANTS AND ASCENDANTS, BY
................................................................................... 155 REASON OF HIS OFFICE ........................................... 176
H. VOLUNTARY EASEMENTS ...............................156 F.4. THOSE MADE TO PERSONS INCAPACITATED TO
I. LEGAL EASEMENTS ...........................................156 SUCCEED BY WILL. [NCC 1027] ................................ 176
I.1. LAW GOVERNING LEGAL EASEMENTS .............. 156 G. REVOCATION V. REDUCTION.......................... 176
J. KINDS OF PRIVATE LEGAL EASEMENTS .........156 G.1. GROUNDS FOR REDUCTION ............................. 176
J.1. THOSE ESTABLISHED FOR THE USE OF WATERS G.2. REVOCATION ..................................................... 177
OR RELATING TO WATERS ...................................... 156 H. TRADITION ........................................................181
J.2. RIGHT OF WAY.................................................... 157 H.1. REQUISITES ........................................................ 181
J.3. PARTY WALL ....................................................... 159 H.2. PURPOSE ........................................................... 181
J.4. EASEMENT OF LIGHT AND VIEW ....................... 161 H.3. KINDS ................................................................. 181
J.5. DRAINAGE OF BUILDINGS ................................ 163
J.6. INTERMEDIATE DISTANCES .............................. 163 XII. PRESCRIPTION ............................... 182
J.7. LATERAL AND SUBJACENT SUPPORT.............. 163 A. RATIONALE ....................................................... 182
B. KINDS OF PRESCRIPTION ............................... 182
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B.1. ACQUISITIVE PRESCRIPTION ............................ 182 E.1. ACTION FOR SPECIFIC PERFORMANCE (IN
B.2. PRESCRIPTION WHERE POSSESSION IN GOOD OBLIGATION TO GIVE SPECIFIC THING) ................. 203
FAITH CONVERTED INTO POSSESSION IN BAD E.2. ACTION FOR SUBSTITUTED PERFORMANCE (IN
FAITH: ........................................................................ 182 OBLIGATION TO GIVE GENERIC THING AND
B.3. AS A MODE OF ACQUISITION, PRESCRIPTION OBLIGATION TO DO) ................................................ 203
REQUIRES EXISTENCE OF FOLLOWING: ................ 182 E.3. RESCISSION (RESOLUTION IN RECIPROCAL
B.4. EXTINCTIVE PRESCRIPTION ............................. 182 OBLIGATIONS).......................................................... 203
C. NO PRESCRIPTION APPLICABLE .................... 183 E.4. DAMAGES, IN ANY EVENT................................204
C.1. BY OFFENDER .................................................... 183 E.5. SUBSIDIARY REMEDIES OF CREDITORS ........ 205
C.2. REGISTERED LANDS ......................................... 183
C.3. RIGHTS NOT EXTINGUISHED BY PRESCRIPTION III. KINDS OF CIVIL OBLIGATIONS ........ 207
[NCC 1143] .................................................................. 183 A. PURE OBLIGATIONS ....................................... 207
C.4. ACTION TO QUIET TITLE IF PLAINTIFF IS IN B. CONDITIONAL OBLIGATIONS ........................ 207
POSSESSION ............................................................. 183 B.1. KINDS OF CONDITIONS .................................... 207
C.5. VOID CONTRACTS ............................................. 183 B.2. DOCTRINE OF CONSTRUCTIVE FULFILLMENT OF
C.6. ACTION TO DEMAND PARTITION .................... 183 SUSPENSIVE CONDITIONS......................................208
C.7. PROPERTY OF PUBLIC DOMINION ................... 183 B.3. PRINCIPLE OF RETROACTIVITY IN SUSPENSIVE
C.8. PRESCRIPTION DISTINGUISHED FROM LACHES CONDITIONS ............................................................208
................................................................................... 183 B.4. EFFECTS OF THE HAPPENING OF SUSPENSIVE
D. PRESCRIPTION OR LIMITATION OF ACTIONS CONDITIONS ............................................................208
...............................................................................184 C. OBLIGATIONS WITH A PERIOD OR TERM ....... 211
D.1. TO RECOVER MOVABLE PROPERTIES ............. 184 D. ALTERNATIVE OR FACULTATIVE OBLIGATIONS
D.2. TO RECOVER IMMOVABLES ............................. 184 ............................................................................... 213
D.3. OTHER ACTIONS ............................................... 184 E. DIVISIBLE AND INDIVISIBLE OBLIGATIONS ... 215
F. OBLIGATIONS WITH A PENAL CLAUSE .......... 216
XIII. LEASE ............................................ 186
A. GENERAL CONCEPT OF LEASE .......................186 IV. JOINT AND SOLIDARY OBLIGATIONS
A.1. CHARACTERISTICS OF EVERY LEASE ....... 186
A.2. KINDS OF LEASE (ART. 1642) .................... 186
............................................................. 218
B. LEASE OF THINGS ............................................186 A. JOINT OBLIGATIONS ........................................ 218
B.1. GENERAL CONCEPT........................................... 186 A.1 JOINT DIVISIBLE OBLIGATION ............................218
B.2. RIGHTS AND OBLIGATIONS ............................. 187 A.2 JOINT INDIVISIBLE OBLIGATIONS .....................218
B.3. REMEDIES .......................................................... 189 B. SOLIDARY OBLIGATIONS ................................ 219
B.4. LEASE OF RURAL AND URBAN LANDS ........... 189
C. TERMINATION .................................................. 191
V. EXTINGUISHMENT OF OBLIGATIONS
............................................................ 224
A. PAYMENT OR PERFORMANCE ...................... 224
A.1 APPLICATION OF PAYMENTS ............................ 227
OBLIGATIONS A.2. DATION IN PAYMENT ....................................... 227
A.3. PAYMENT BY CESSION..................................... 227
I. OBLIGATIONS .................................... 193 A.4. TENDER OF PAYMENT AND CONSIGNATION 228
A. DEFINITION ....................................................... 193 B. LOSS OF THE THING DUE OR IMPOSSIBILITY
A.1. ELEMENTS OF AN OBLIGATION ........................ 193 OR DIFFICULTY OF PERFORMANCE .................. 229
A.2. DIFFERENT KINDS OF PRESTATIONS ............. 193 C. CONDONATION ................................................ 231
B. CLASSIFICATION OF OBLIGATIONS ................ 193 D. CONFUSION OR MERGER OF RIGHTS .......... 232
E. COMPENSATION ............................................. 232
II. NATURE AND EFFECT OF OBLIGATIONS F. NOVATION ....................................................... 235
............................................................. 196
A. OBLIGATION “TO GIVE” ...................................196
A.1. TYPE OF THINGS: ............................................... 196
A.2. RIGHTS AND DUTIES OF PARTIES: .................. 196 CONTRACTS
B. OBLIGATION “TO DO” OR “NOT TO DO” ........196
B.1. RIGHTS AND DUTIES OF PARTIES: ................... 196 I. GENERAL PROVISIONS ..................... 240
C. BREACH............................................................. 197 A. PRINCIPAL CHARACTERISTICS OF CONTRACTS
C.1. COMPLETE FAILURE TO PERFORM .................. 197 (MARCO) ............................................................... 240
C.2. DEFAULT, DELAY, OR MORA ............................ 197 A. 1. MUTUALITY .......................................................240
C.3. FRAUD (DOLO) IN THE PERFORMANCE OF THE A.2. AUTONOMY (ALSO FREEDOM TO CONTRACT)
OBLIGATION .............................................................. 199 ...................................................................................240
C.4. NEGLIGENCE (CULPA) IN THE PERFORMANCE A.3. RELATIVITY........................................................ 242
OF THE OBLIGATION ............................................... 200 A.4. CONSENSUAL ................................................... 243
C.5. CONTRAVENTION OF THE TENOR OF THE A.5. OBLIGATORY FORCE ........................................ 243
OBLIGATION ............................................................. 202 B. ELEMENTS OF CONTRACTS ........................... 243
D. LEGAL EXCUSE FOR BREACH: ....................... 202 C. CLASSIFICATION OF CONTRACTS ................. 243
E. REMEDIES AVAILABLE IN CASE OF BREACH 203 D. STAGES OF A CONTRACT............................... 244
D.1. CONSENT ........................................................... 244
viii
D.2. OBJECT OF CONTRACTS................................... 251
D.3. CAUSE OF CONTRACTS ................................... 252 SALES
III. FORM OF CONTRACTS .................... 254 I. NATURE AND FORM OF CONTRACT . 283
A. KINDS OF FORMALITIES REQUIRED BY LAW254 A.DEFINITION OF SALES ..................................... 283
A.1. FOR THE VALIDITY OF CONTRACTS (AD ESENTIA B. ESSENTIAL REQUISITES OF A CONTRACT OF
/ AD SOLIMNITATEM/ SOLEMN CONTRACTS) ...... 254 SALE ..................................................................... 283
A.2. FOR THE PURPOSE OF PROVING THE B.1. ESSENTIAL ELEMENTS OF A VALID CONTRACT
EXISTENCE OF THE CONTRACT.............................. 255 OF SALE .................................................................... 283
A.3. FOR THE EFFECTIVITY OF THE CONTRACT B.2. NON-ESSENTIAL ELEMENTS OF A CONTRACT
AGAINST THIRD PERSONS ..................................... 255 OF SALE .................................................................... 287
C. FORM OF CONTRACT OF SALE ...................... 287
IV. REFORMATION OF INSTRUMENTS .. 257 D. STAGES OF CONTRACT OF SALE .................. 287
A. CASES WHERE REFORMATION IS PROPER .. 258 E. OBLIGATIONS CREATED ................................. 287
A.1. MISTAKE ............................................................ 258 E.1 NATURE OF OBLIGATIONS CREATED PER
A.2. FRAUD............................................................... 258 DEFINITION IN ART.1458 ......................................... 287
A.3. INEQUITABLE CONDUCT ................................. 258 F. CHARACTERISTICS OF A CONTRACT OF SALE
A.4. ACCIDENT ......................................................... 258
.............................................................................. 287
A.5. SEVERE PACTO DE RETRO / RELATIVE
F.1. SALE IS TITLE AND NOT MODE ........................ 288
SIMULATION ............................................................ 258
B. WHO MAY ASK FOR REFORMATION [ART. 1368] G. SALE DISTINGUISHED FROM OTHER
.............................................................................. 258 CONTRACTS ......................................................... 288
G.1. DONATION ......................................................... 288
C. CASES WHERE REFORMATION IS NOT PROPER G.2. BARTER ............................................................. 288
.............................................................................. 259 G.3. CONTRACT FOR A PIECE OF WORK ................ 288
G.4. DACION EN PAGO ............................................ 288
V. INTERPRETATION OF CONTRACT ... 259 G.5. CONTRACT TO SELL ......................................... 289
A. PRIMACY OF INTENTION ................................ 260 G.6. AGENCY TO SELL.............................................. 289
B. RULES ON DOUBTS [ART. 1378] ...................... 261 G.7. LEASE ................................................................ 289
C. FROM RULE 123, RULES OF COURT .............. 261 H. KINDS OF CONTRACT OF SALE ..................... 289
VI. DEFECTIVE CONTRACTS ..................262 II. CAPACITY TO BUY OR SELL .............. 290
A. RESCISSIBLE CONTRACTS ............................ 262 A. KINDS OF INCAPACITY ................................... 290
A.1. RESCISSION....................................................... 262 A.1. ABSOLUTE INCAPACITY....................................290
A.2. CHARACTERISTICS OF RESCISSIBLE A.2. RELATIVE INCAPACITY: MARRIED PERSONS.290
CONTRACTS: ............................................................ 263 A.3. SPECIAL DISQUALIFICATIONS.........................290
A.3. DISTINGUISHED FROM B. EFFECTS OF INCAPACITY ................................ 291
RESCISSION/RESOLUTION UNDER ART. 1191 ....... 263 B.1. ABSOLUTE INCAPACITY..................................... 291
A.4. REQUISITES OF A VALID RESCISSION [ART. 1381- B.2. RELATIVE INCAPACITY ...................................... 291
1383, 1385, 1389] ...................................................... 263 B.3. SPECIFIC INCAPACITY/ SPECIAL
B. VOIDABLE CONTRACTS ................................. 266 DISQUALIFICATIONS ................................................ 291
B.2. CHARACTERISTICS OF VOIDABLE CONTRACTS:
.................................................................................. 267 III. EFFECTS OF THE CONTRACT WHEN
B.3. RATIFICATION................................................... 268 THE THING SOLD HAS BEEN LOST ....... 292
C. UNENFORCEABLE CONTRACTS .................... 269 A. RES PERIT DOMINO ........................................ 292
C.1. CHARACTERISTICS: .......................................... 269
B. PRIOR TO PERFECTION OF CONTRACT ........ 292
C.2. KINDS OF UNENFORCEABLE CONTRACTS .... 269
D. VOID OR INEXISTENT CONTRACTS ................ 271 C. AT TIME OF PERFECTION ............................... 292
D. AFTER PERFECTION BUT BEFORE DELIVERY
VII. NATURAL OBLIGATIONS ................ 274 .............................................................................. 292
D.1.LOSS.................................................................... 292
VIII. ESTOPPEL ..................................... 277 D.2. DETERIORATION .............................................. 292
A. DEFINITION .......................................................277 E. AFTER DELIVERY ............................................. 292
B. KINDS OF ESTOPPEL .......................................277
C. LACHES ............................................................ 278 IV. OBLIGATIONS OF THE VENDOR ...... 293
A. OBLIGATIONS OF THE VENDOR IN GENERAL
IX. TRUSTS ........................................... 278 .............................................................................. 293
A. GOVERNING RULES ........................................ 279 B. WHEN SELLER IS NOT THE OWNER .............. 293
B. PARTIES [ART. 1440] ....................................... 279 C. SALE BY PERSON HAVING A VOIDABLE TITLE
C. KINDS OF TRUST ............................................. 279 .............................................................................. 293
C.1. EXPRESS TRUST ............................................... 279 D. MANNER OF TRANSFER ................................ 293
C.2. IMPLIED TRUST ................................................ 280 E. CONCEPT OF DELIVERY .................................. 293
C.3. CONSTRUCTIVE TRUST.................................... 280 E.1. REQUISITES ....................................................... 293
E.2. WHAT TO DELIVER............................................ 294
E.3. WHERE TO DELIVER ......................................... 294
E.4. WHEN TO DELIVER ........................................... 294
ix
F. WHEN DELIVERY DOES NOT TRANSFER TITLE B.8. RIGHT TO REDEEM VS OPTION TO PURCHASE
.............................................................................. 294 ....................................................................................310
G. KINDS OF DELIVERY ....................................... 295 C. EQUITABLE MORTGAGE ................................... 311
G.1.ACTUAL DELIVERY............................................. 295 C.1. PRESUMPTION THAT A CONTRACT IS AN
G.2. CONSTRUCTIVE DELIVERY .............................. 295 EQUITABLE MORTGAGE ............................................311
H. DOUBLE SALES ............................................... 296 C.2. REQUISITES FOR PRESUMPTION OF AN
I. PROPERTY REGISTRATION DECREE .............. 297 EQUITABLE MORTGAGE ............................................311
C.3. RATIONALE BEHIND PROVISION ON EQUITABLE
I.1 REQUISITES FOR REGISTRATION OF DEED OF
MORTGAGE ................................................................311
SALE IN GOOD FAITH .............................................. 297
C.4. REMEDIES OF APPARENT VENDOR .................311
J. RISK OF LOSS (SEE EFFECTS OF CONTRACTS C.5. PERIOD OF REDEMPTION ..................................311
WHERE THE THING IS LOST) .............................. 297 C.6. EXERCISE OF THE RIGHT TO REDEEM ............. 312
K. WARRANTIES .................................................. 297 C.7. HOW REDEMPTION IS EXERCISED ................... 312
K.1 EXPRESS WARRANTIES .................................... 298 D. LEGAL REDEMPTION ....................................... 312
K.2 IMPLIED WARRANTIES ..................................... 298 D.1. DEFINITION......................................................... 312
K.3. EFFECTS OF WARRANTIES .............................. 300 D.2. MANNER ............................................................ 312
K.4. EFFECTS OF WAIVERS ..................................... 300 D.3. PERIOD TO REDEEM ......................................... 313
K.5. BUYER’S OPTIONS IN CASE OF BREACH OF D.4. INSTANCES OF LEGAL REDEMPTION .............. 313
WARRANTY .............................................................. 300
K.6. WARRANTY IN SALE OF CONSUMER GOODS 301 VIII. ASSIGNMENT OF CREDITS............. 315
A. DEFINITION ....................................................... 315
V. OBLIGATIONS OF THE VENDEE........ 302 B. NATURE ............................................................ 315
A. OBLIGATION TO ACCEPT DELIVERY .............. 302
A.1 WHAT IS ACCEPTANCE ...................................... 302
C. PERFECTION ..................................................... 315
A.2 BUYER’S RIGHT TO EXAMINE ........................... 302 D. ASSIGNMENT DISTINGUISHED FROM OTHER
A.3 DELIVERY OF GOODS IN INSTALLMENT ......... 303 TERMS ................................................................... 315
B. OBLIGATION TO PAY THE PRICE.................... 303 E. BINDING EFFECT .............................................. 316
B.1 OBLIGATION TO PAY INTEREST ........................ 303 F. CONSENT NOT NECESSARY ............................ 316
B.2 RIGHT OF VENDEE TO SUSPEND PAYMENT OF G. EFFECT OF PAYMENT BY DEBTOR AFTER
PRICE ........................................................................ 303 ASSIGNMENT OF CREDIT .................................... 316
B.3 PAYMENT IN INSTALLMENTS ........................... 303 H. EXTENT OF ASSIGNMENT OF CREDIT............ 316
C. OBLIGATION TO BEAR THE EXPENSES FOR THE I. WARRANTIES OF THE ASSIGNOR OF CREDIT 316
EXECUTION AND REGISTRATION OF THE SALE I.1. BREACH OF WARRANTIES .................................. 316
AND PUTTING THE GOODS IN A DELIVERABLE I.2 LIABILITIES OF THE ASSIGNOR OF CREDIT ....... 316
STATE, IF SO STIPULATED .................................. 303 I.3 DURATION OF ASSIGNOR’S LIABILITY WHERE
DEBTOR’S SOLVENCY GUARANTEED ..................... 317
VI. BREACH OF CONTRACT OF SALE .... 304 J. SALE OF SUCCESSIONAL OR HEREDITARY
A. GENERAL REMEDIES ...................................... 304 RIGHTS .................................................................. 317
B. REMEDIES OF THE SELLER ............................ 304 K. SALE OF WHOLE OF CERTAIN RIGHTS, RENTS,
B.1. SALE OF MOVABLES ......................................... 304 OR PRODUCTS ..................................................... 317
C. RECTO LAW: SALE OF MOVABLES ON L. LIABILITY OF VENDOR OF INHERITANCE FOR
INSTALLMENT – ARTS. 1484-1486 ..................... 306 FRUITS RECEIVED ................................................ 317
C.1. WHEN APPLICABLE........................................... 306 M. LIABILITY OF VENDEE FOR DEBTS AND
C.2. ALTERNATIVE AND EXCLUSIVE REMEDIES ... 306 CHARGES ON ESTATE .......................................... 317
D. SALE OF IMMOVABLES ................................... 306 N. LEGAL REDEMPTION IN SALE OF CREDIT OR
D.1. RESCISSION FOR ANTICIPATORY BREACH .... 306
OTHER INCORPOREAL RIGHT IN LITIGATION ... 318
D.2. SPECIFIC PERFORMANCE + DAMAGES OR
N.1 REQUISITES FOR THE EXERCISE BY THE DEBTOR
RESCISSION + DAMAGES ........................................ 307
OF THE RIGHT OF LEGAL REDEMPTION: ................ 318
E. PD 957, SECTIONS 23 AND 24 ........................ 307 N.2 PURPOSE OF GRANT OF RIGHT TO DEBTOR .. 318
F. MACEDA LAW (RA 6552): SALE OF N.3 EXCEPTIONS TO THE DEBTOR’S RIGHT OF
IMMOVABLES ON INSTALLMENT ....................... 307 LEGAL REDEMPTION ................................................ 318
G. REMEDIES OF THE BUYER ............................. 308 O. TRANSFER OF OWNERSHIP ........................... 318
G.1. SALE OF MOVABLES ......................................... 308 OBLIGATIONS OF THE VENDOR .............................. 318
G.2. SALE OF IMMOVABLES .................................... 308
IX. DOCUMENTS OF TITLE .................... 319
VII. EXTINGUISHMENT OF SALE .......... 309 A. DEFINITION ....................................................... 319
A. CAUSES ............................................................ 309 B. PURPOSE OF DOCUMENTS OF TITLE ............ 319
B. CONVENTIONAL REDEMPTION ..................... 309 C. NEGOTIABLE DOCUMENTS OF TITLE ............. 319
B.1. DEFINITION........................................................ 309 D. NON-NEGOTIABLE DOCUMENTS OF TITLE ... 319
B.2. PERIOD .............................................................. 309
E. WARRANTIES OF SELLER OF DOCUMENTS OF
B.3. BY WHOM EXERCISED ...................................... 310
B.4. FROM WHOM TO REDEEM ............................... 310 TITLE ...................................................................... 319
B.5. HOW EXERCISED ............................................... 310 F. RULES ON LEVY/GARNISHMENT OF GOODS320
B.6. EFFECT OF REDEMPTION ................................. 310
B.7. EFFECT OF NON-REDEMPTION........................ 310 X. REMEDIES OF AN UNPAID SELLER .. 320
x
A. DEFINITION OF UNPAID SELLER ................... 320 I. POWER OF ATTORNEY HELD BY CORPORATION
B. JUDICIAL REMEDIES OF UNPAID SELLER ..... 320 IN CASE OF VOLUNTARY DISSOLUTION OF
C. ALTERNATIVE REMEDIES OF THE UNPAID CONDOMINIUM CORPORATION [SECTION 15] . 329
SELLER UNDER RECTO LAW ............................... 321 J. SALE, EXCHANGE, LEASE, OR DISPOSITION BY
CORPORATION OF THE COMMON AREAS
XI. PERFORMANCE OF CONTRACT ....... 322 [SECTION 16] ........................................................ 329
A. DELIVERY OF THING SOLD ............................. 322 K. STOCKHOLDER/MEMBER DEMANDING
B. PAYMENT OF PRICE ........................................ 323 PAYMENT FOR SHARES OR INTEREST AKA
XII. THE LAW ON SALE OF SUBDIVISION APPRAISAL RIGHT [SECTION 17] ........................ 329
L. REQUIREMENT FOR REGISTRATION OF
AND CONDOMINIUM (PD 957) ..............324 CONVEYANCE WITH THE REGISTER OF DEEDS
A. DEFINITIONS ................................................... 324 [SECTION 18] ........................................................ 329
B.REQUIREMENTS FOR OWNERS AND M. REALTY TAX ON CONDOMINIUMS [SECTION
DEVELOPERS ....................................................... 324 25] ......................................................................... 329
B.1. REGISTRATION OF PROJECTS [SECTION 4, PD
957] ........................................................................... 324
B.2. REGISTRATION OF OWNER [SECTION 4, PD 957]
.................................................................................. 324
B.3. LICENSE TO SELL [SECTION 5, PD 957] .......... 325
SUCCESSION
C. REQUIREMENT FOR DEALERS, BROKERS, AND I. GENERAL PROVISIONS ...................... 331
SALESMEN (DBS) ................................................. 325 A. DEFINITION ....................................................... 331
C.1. REGISTRATION .................................................. 325
B. OBJECT OF SUCCESSION AND TRANSMISSION
D. CHARACTERISTICS OF SALE OF A
............................................................................... 331
CONDOMINIUM OR SUBDIVISION UNIT AND
C. SUBJECTS OF SUCCESSION ........................... 332
SIMILAR CONTRACTS ......................................... 326
D.1. REGISTRATION OF SALE, ETC [SECTION 17, PD II. TESTAMENTARY SUCCESSION ......... 333
957] ........................................................................... 326
A. WILLS ............................................................... 333
D.2. MORTGAGES ON UNIT OR LOT BY OWNER OR
A.1. IN GENERAL ....................................................... 333
DEVELOPER [SECTION 18, PD 957] ........................ 326
A.2. TESTAMENTARY CAPACITY AND INTENT ...... 334
D.3. ADVERTISEMENTS BY THE OWNER OR
A.3. FORM ................................................................. 335
DEVELOPER [SECTION 19, PD 957] ........................ 326
A.4. CODICILS ........................................................... 339
D.4. NON-FORFEITURE OF PAYMENTS (SECTION 23,
A.5. INCORPORATION BY REFERENCE .................. 340
PD 957) ..................................................................... 326
A.6. REVOCATION .................................................... 340
D.5. FAILURE TO PAY INSTALLMENTS [SECTION 24,
A.7. REPUBLICATION AND REVIVAL ........................ 341
PD 957] ..................................................................... 326
A.8. ALLOWANCE AND DISALLOWANCE OF WILLS
D.6. ISSUANCE OF TITLE [SECTION 25, PD 957] ... 326
.................................................................................... 341
D.7. REALTY TAX [SECTION 26, PD 957] .................327
D.8. NO OTHER CHARGES [SECTION 27, PD 957] ..327 B. INSTITUTION OF HEIR..................................... 342
C. SUBSTITUTION OF HEIRS ............................... 344
XIII. THE CONDOMINIUM ACT (RA 4726) D. TESTAMENTARY DISPOSITIONS WITH A
............................................................. 327 CONDITION, A TERM, AND A MODE .................. 346
A. DEFINITION OF A CONDOMINIUM [SECTION 2] E. LEGITIME .......................................................... 347
.............................................................................. 327 F. DISINHERITANCE ............................................. 351
A.1. OTHER DEFINITIONS [SECTION 3] ....................327 F.1. DISINHERITANCE OF CHILDREN AND
B. TRANSFERS OR CONVEYANCES OF A UNIT OR DESCENDANTS ........................................................ 352
F.2. DISINHERITANCE OF PARENTS AND
AN APARTMENT, OFFICE OR STORE, OR OTHER
ASCENDANTS........................................................... 352
SPACE THEREIN [SECTION 5, RA 4726] ............. 327 F.3. DISINHERITANCE OF A SPOUSE ...................... 352
C. RIGHTS OF A CONDOMINIUM UNIT OWNER G. LEGACIES AND DEVISES ................................ 354
(ASIDE FROM RIGHTS ARISING FROM
OWNERSHIP) [SECTION 6] .................................. 328 III. LEGAL OR INTESTATE SUCCESSION 358
D. PARTITION BY SALE [SECTION 8] .................. 328 A. GENERAL PROVISIONS .................................. 358
E. DECLARATION OF RESTRICTIONS BY OWNER A.1. RELATIONSHIP .................................................. 359
OF PROJECT - PRECONDITION TO CONVEYANCE B. ORDER OF INTESTATE SUCCESSION ............ 362
[SECTION 9].......................................................... 328
F. ASSESSMENT IN ACCORDANCE WITH IV. PROVISIONS COMMON TO TESTATE
DECLARATION OF RESTRICTIONS [SECTION 20] AND INTESTATE SUCCESSION ............. 365
.............................................................................. 328 A. RIGHT OF ACCRETION .................................... 365
G. HOW LIEN ENFORCED AFTER NON-PAYMENT B. CAPACITY TO SUCCEED BY WILL OR INTESTACY
OF ASSESSED FEES [SECTION 20] ..................... 329 .............................................................................. 366
H. INVOLUNTARY DISSOLUTION OF THE C. ACCEPTANCE AND REPUDIATION OF THE
CONDOMINIUM CORPORATION [SECTION 12] . 329 INHERITANCE ...................................................... 367
D. COLLATION...................................................... 369

xi
E. PARTITION AND DISTRIBUTION OF ESTATE 370 B.3. IF THE CONTRACT INVOLVES THINGS
E.1. IN GENERAL ....................................................... 370 BELONGING TO THE PRINCIPAL ............................. 394
E.2. EFFECTS OF PARTITION....................................372
E.3. RESCISSION AND NULLIFICATION OF V. RIGHTS AND OBLIGATIONS OF THIRD
PARTITION ................................................................372 PERSONS ............................................. 395
A. RIGHTS OF THIRD PERSONS ......................... 395
A.1. REQUIRE THE PRESENTATION OF
AUTHORITY/INSTRUCTIONS .................................. 395
AGENCY A.2. RELY ON REPRESENTATIONS BY THE
PRINCIPAL ................................................................ 395
I. DEFINITION OF AGENCY .................... 376 B. OBLIGATIONS OF THIRD PERSONS .............. 395
A. AS A TYPE OF CONTRACT .............................. 376
A.1. ELEMENTS (STATUTORY): .................................376 VI. MODES OF EXTINGUISHMENT ........ 396
A.2. ELEMENTS (JURISPRUDENTIAL) .....................376 A. IN GENERAL..................................................... 396
A.3. BEING A CONTRACT, IT MUST ALSO COMPLY B. REVOCATION ................................................... 396
WITH ART. 1318..........................................................376 B.1. IN GENERAL ....................................................... 396
B. AS A LEGAL RELATIONSHIP ........................... 376 B.2. WHEN REVOCATION IS NOT BINDING ON THIRD
C. EFFECTS OF AGENCY ...................................... 376 PERSONS .................................................................. 396
B.3. APPOINTMENT OF NEW AGENT ...................... 397
II. KINDS OF AGENCY ............................ 377 B.4. DIRECT MANAGEMENT BY THE PRINCIPAL ... 397
A. IN GENERAL ......................................................377 B.5. SPECIAL AUTHORITY REVOKES THE GENERAL
B. AS TO MANNER OF CREATION ...................... 378 AUTHORITY WHERE A SPECIAL MATTER IS
B.1 EXPRESS AGENCY.............................................. 378 INVOLVED ................................................................. 397
B.2 IMPLIED AGENCY .............................................. 378 B.6. WHEN AGENCY CANNOT BE REVOKED .......... 397
C. AS TO EXTENT OF BUSINESS COVERED ....... 379 C. WITHDRAWAL BY THE AGENT ....................... 397
D. AS TO AUTHORITY CONFERRED ................... 379 D. DEATH, CIVIL INTERDICTION, INSANITY OR
D.1 COUCHED IN GENERAL TERMS .........................379 INSOLVENCY ........................................................ 397
D.2 COUCHED IN SPECIFIC TERMS .........................379 D.1. IN GENERAL....................................................... 398
E. SPECIAL KINDS OF AGENCY ............................ 381 D.2. EXCEPTIONS ..................................................... 398
E.1 AGENCY BY ESTOPPEL ....................................... 381 D.3. DEATH OF AGENT............................................. 398
E.2 AGENCY WITH UNDISCLOSED PRINCIPAL ...... 382 E. DISSOLUTION / ACCOMPLISHMENT /
E.3 AGENCY BY OPERATION OF LAW ................ 382 EXPIRATION ......................................................... 398
E.4 IRREVOCABLE AGENCY ................................ 382
F. KINDS OF AGENTS .......................................... 383
F.1 AS TO NATURE AND EXTENT OF AUTHORITY . 383
PARTNERSHIP
III. RIGHTS AND OBLIGATIONS OF THE
AGENT ................................................. 384 I. CONTRACT OF PARTNERSHIP .......... 400
A. RIGHTS OF AGENTS ........................................ 384 A. ELEMENTS: ..................................................... 400
A.1. COMPENSATION ............................................... 384 B. ESSENTIAL FEATURES .................................. 400
A.2. LEND MONEY TO / BORROW MONEY FROM THE B.1. LAWFUL PURPOSE ........................................... 400
AGENCY .................................................................... 384 B.2. COMMON BENEFIT .......................................... 400
A.3. APPOINT A SUBSTITUTE.................................. 384 B.3. JURIDICAL PERSONALITY ................................ 401
A.4. RETAIN IN PLEDGE THE OBJECTS OF AGENCY C. PARTIES ............................................................401
.................................................................................. 385 D. OBJECT .............................................................401
B. OBLIGATIONS OF AGENTS ............................. 386 D.1. OBJECT OF UNIVERSAL PARTNERSHIP .......... 401
B.1. IN GENERAL....................................................... 386 D.2. OBJECT OF PARTICULAR PARTNERSHIP .......402
B.2 FACTOR OR COMMISSION AGENT................... 389 D.3. EFFECT OF UNLAWFUL OBJECT......................402
C. LIABILITY OF AGENTS ..................................... 390 E. FORM ................................................................ 402
C.1. WHEN SOLIDARY .............................................. 390 F. DURATION ....................................................... 402
C.2. WHEN PERSONAL ............................................ 390 F.1. COMMENCEMENT .............................................402
F.2. TERM..................................................................402
IV. RIGHTS AND OBLIGATIONS OF THE F.3. EXTENSION........................................................402
PRINCIPAL............................................392 G.RULES TO DETERMINE EXISTENCE ............... 402
A. OBLIGATIONS .................................................. 392 H. KINDS OF PARTNERSHIPS ............................. 403
A.1. COMPLY WITH THE OBLIGATIONS CONTRACTED H.1. AS TO THE LEGALITY OF ITS EXISTENCE: ....... 403
BY THE AGENT ......................................................... 392 H.2. AS TO ITS OBJECT: ........................................... 403
A.2. ADVANCE OR REIMBURSE SUMS NECESSARY H.3. AS TO ITS DURATION: ...................................... 403
.................................................................................. 392 H.4. AS TO THE LIABILITY OF THE PARTNERS: ..... 403
A.3. INDEMNIFY THE AGENT FOR INJURY ............. 393 H.5. AS TO ITS PUBLICITY: ....................................... 403
A.4. COMPENSATE THE AGENT .............................. 393 H.6. AS TO ITS PURPOSE:........................................ 403
B. LIABILITY OF THE PRINCIPAL ......................... 393 I. KINDS OF PARTNERS ....................................... 404
B.1. IN GENERAL....................................................... 393 J. PARTNERSHIP, DISTINGUISHED FROM OTHER
B.2. BE SOLIDARILY LIABLE .................................... 393 CONTRACTS ......................................................... 405
xii
II. RIGHTS AND OBLIGATIONS OF THE G.5. DOCTRINE OF MARSHALING OF ASSETS ...... 422
G.6. DISTRIBUTION OF PROPERTY OF INSOLVENT
PARTNERSHIP ..................................... 407 PARTNER .................................................................. 422
A. RIGHT TO CONTRIBUTION ............................. 407 H. RIGHTS OF CREDITORS OF DISSOLVED
B. RIGHT TO APPLY PAYMENT RECEIVED TO PARTNERSHIP ..................................................... 423
PARTNERSHIP CREDIT .......................................408 H.1. AS CREDITORS OF THE NEW PARTNERSHIP . 423
C. RIGHT TO RETURN OF CREDIT RECEIVED ....408 H.2. LIABILITY OF A NEW PARTNER ....................... 423
D. RIGHT TO INDEMNITY FOR DAMAGES..........408 H.3. PRIORITY OF CREDITORS OF DISSOLVED
PARTNERSHIP .......................................................... 423
III. RIGHTS AND OBLIGATIONS OF I. RIGHTS OF A RETIRED PARTNER OR A
PARTNERS INTER SE ........................... 409 REPRESENTATIVE OF DECEASED PARTNER .... 423
A. RIGHT TO ASSOCIATE ANOTHER IN SHARE .409 J. RIGHT TO AN ACCOUNT .................................. 424
B. RIGHT TO INSPECT PARTNERSHIP BOOKS ..409
C. RIGHT TO FORMAL ACCOUNT .......................409 VI. LIMITED PARTNERSHIP .................. 424
D. PROPERTY RIGHTS OF PARTNERS ............... 410 B. CHARACTERISTICS ......................................... 424
E. RIGHT TO PARTICIPATE IN MANAGEMENT ... 411 C. GENERAL AND LIMITED PARTNERS
F. RIGHT TO PROFITS AND OBLIGATIONS FOR DISTINGUISHED................................................... 425
LOSSES .................................................................. 412 D. GENERAL AND LIMITED PARTNERSHIP
G. OBLIGATION TO RENDER INFORMATION ..... 413 DISTINGUISHED................................................... 425
H. OBLIGATION TO ACCOUNT AND ACT AS E. FORMATION ..................................................... 425
TRUSTEE ............................................................... 413 E.1. GENERAL REQUIREMENTS .............................. 425
E.2. PURPOSE OF FILING......................................... 426
IV. OBLIGATIONS OF THE E.3. FIRM NAME ....................................................... 426
E.4. FALSE STATEMENT IN THE CERTIFICATE ....... 426
PARTNERSHIP/PARTNERS TO THIRD E.5. GENERAL AND LIMITED PARTNER AT THE SAME
PERSONS.............................................. 413 TIME .......................................................................... 426
A. OBLIGATION TO OPERATE UNDER A FIRM F. MANAGEMENT ................................................ 427
NAME ..................................................................... 413 G. OBLIGATIONS OF A LIMITED PARTNER ........ 427
G.1. OBLIGATIONS RELATED TO CONTRIBUTION . 427
V. DISSOLUTION AND WINDING UP...... 417 G.2. LIABILITY TO PARTNERSHIP CREDITORS ...... 428
A. CONCEPTS ........................................................ 417 G.3. LIABILITY TO SEPARATE CREDITORS ............. 428
B. CAUSES OF DISSOLUTION .............................. 417 H. RIGHTS OF A LIMITED PARTNER ................... 428
B.1. WITHOUT VIOLATION OF THE AGREEMENT .... 417 H.1. IN GENERAL....................................................... 428
B.2. IN CONTRAVENTION OF THE AGREEMENT .... 418 H.2. RIGHT TO TRANSACT BUSINESS WITH THE
B.3. BY OPERATION OF LAW.................................... 418 PARTNERSHIP .......................................................... 428
B.4. BY DECREE OF COURT...................................... 418 H.3. RIGHT TO SHARE IN PROFITS ......................... 429
B.5. OTHER CAUSES ................................................. 418 H.4. RIGHT TO RETURN OF CONTRIBUTION ......... 429
C. EFFECTS OF DISSOLUTION .............................419 H.5. PREFERENCE OF LIMITED PARTNERS ........... 429
C.1. ON AUTHORITY OF THE PARTNERS ................. 419 H.6. RIGHT TO ASSIGN INTEREST .......................... 429
C.1.A. WITH RESPECT TO PARTNERS ...................... 419 H.7. RIGHT TO ASK FOR DISSOLUTION .................. 430
C.1.B. WITH RESPECT TO THIRD PERSONS ............ 419 I. DISSOLUTION ................................................... 430
C.2. ON LIABILITY FOR TRANSACTIONS AFTER J. SETTLEMENT OF ACCOUNTS.......................... 430
DISSOLUTION ........................................................... 419 J.1. ORDER OF PAYMENT......................................... 430
C.3. ON LIABILITY FOR CONTRACTS AFTER J.2. SHARE IN THE PARTNERSHIP ASSETS............. 431
DISSOLUTION BY SPECIFIC CAUSES ...................... 420 K. AMENDMENT OR CANCELLATION OF
C.4. ON EXISTING LIABILITY OF PARTNERS ... 420 CERTIFICATE ......................................................... 431
D. WINDING UP PARTNERS ................................ 420 K.1. CANCELLATION OF CERTIFICATE ..................... 431
D.1. WHO MAY WIND UP .......................................... 420 K.2. AMENDMENT OF CERTIFICATE ........................ 431
D.2. MANNER OF WINDING UP............................... 420 K.3. REQUIREMENTS FOR AMENDMENT OR
E. RIGHTS OF PARTNERS IN CASE OF CANCELLATION......................................................... 431
DISSOLUTION ....................................................... 421
E.1. DISSOLUTION WITHOUT VIOLATION OF THE
AGREEMENT ............................................................. 421
E.2. DISSOLUTION IN CONTRAVENTION OF THE CREDIT TRANSACTIONS
AGREEMENT ............................................................. 421
F. RIGHTS OF PARTNERS IN CASE OF RESCISSION I. LOAN ................................................ 433
............................................................................... 421 A. COMMODATUM ............................................... 433
G. SETTLING OF ACCOUNTS BETWEEN A.1. KINDS OF COMMODATUM ............................... 433
PARTNERS ........................................................... 422 A.2. PARTIES ............................................................ 434
G.1. COMPOSITION OF PARTNERSHIP ASSETS ..... 422 A.3. USE BY THE BAILEE .......................................... 434
G.2. AMOUNT OF CONTRIBUTION FOR LIABILITIES A.4. OBLIGATIONS OF THE BAILEE......................... 434
.................................................................................. 422 A.5. OBLIGATIONS OF THE BAILOR ........................ 434
G.3. ENFORCEMENT OF CONTRIBUTION .............. 422 A.6. LIABILITY FOR DETERIORATION ..................... 435
G.4. ORDER OF APPLICATION OF ASSETS ............ 422 A.7. LIABILITY FOR LOSS ......................................... 435

xiii
A.8. RIGHT OF RETENTION ..................................... 435 I.1. ELEMENTS: .......................................................... 452
A.9. EXTINGUISHMENT ........................................... 435 I.2. EFFECT ON PLEDGE........................................... 452
B. MUTUUM .......................................................... 435 J. EQUITABLE MORTGAGE .................................. 452
B.1. OBLIGATIONS OF THE BORROWER................. 435 J.1. ESSENTIAL REQUISITES .................................... 452
B.2. INTEREST AND SUSPENSION OF USURY LAW
.................................................................................. 436 V. CHATTEL MORTGAGE ...................... 452
B.3. REQUISITES FOR INTEREST TO BE CHARGEABLE A. FORM OF CHATTEL MORTGAGE ................... 452
.................................................................................. 436 A.1. RECORDING REQUIRED ................................... 452
B.4. ELEMENTS OF USURY ......................................437 A.2. CONTENTS OF AN AFFIDAVIT OF GOOD FAITH
................................................................................... 452
II. DEPOSIT ........................................... 437 B. OBLIGATIONS SECURED ................................ 453
A. VOLUNTARY DEPOSIT .................................... 437 C. OBJECTS OF CHATTEL MORTGAGE ............... 453
A.1. EXTINGUISHMENT ............................................ 438 C.1. REASONABLE DESCRIPTION RULE ................. 453
A.2. OBLIGATIONS OF A DEPOSITARY ................... 438 C.2. AFTER ACQUIRED PROPERTIES...................... 453
A.3. AUTHORITY OF DEPOSITARY .......................... 438 D. MORTGAGOR’S RIGHT TO ALIENATE THE
A.4. OBLIGATIONS OF A DEPOSITOR..................... 439 COLLATERAL ....................................................... 453
A.5. AUTHORITY OF DEPOSITOR............................ 439
A.6. RIGHT OF RETENTION ..................................... 439
E. FORECLOSURE ................................................ 453
E.1. EQUITY IN REDEMPTION .................................. 453
B. NECESSARY DEPOSIT ..................................... 439 E.2. NO RIGHT OF REDEMPTION ............................ 453
B.1. KINDS OF NECESSARY DEPOSIT ..................... 439
E.3. RIGHT TO POSSESSION.................................... 453
B.2. DEPOSIT BY TRAVELERS IN HOTELS AND INNS
E.4. RIGHT TO SURPLUS OR DEFICIENCY .............. 453
.................................................................................. 439
B.3. EXTENT OF LIABILITY UNDER ART.1998 ........ 439 VI. REAL MORTGAGE ........................... 454
B.4. WHEN HOTEL-KEEPER LIABLE ....................... 440
A. OBJECTS OF REAL MORTGAGE ..................... 454
B.5. WHEN HOTEL-KEEPER NOT LIABLE ............... 440
B.6. HOTEL-KEEPER’S RIGHT TO RETENTION ...... 440 B. OBLIGATIONS SECURED ................................ 454
C. JUDICIAL DEPOSIT OR SEQUESTRATION .....440 C. CHARACTERISTICS ......................................... 454
C.1. NATURE AND PURPOSE................................... 440 C.1. CHARACTERISTICS OF THE COLLATERAL ...... 454
C.2. DEPOSITARY OF SEQUESTERED PROPERTY. 440 C.2. CHARACTERISTICS OF THE MORTGAGE ........ 454
C.3. APPLICABLE LAW ............................................. 440 D. KINDS ............................................................... 455
E. PRINCIPLE OF INDIVISIBILITY OF
III. GUARANTY AND SURETYSHIP......... 441 PLEDGE/MORTGAGE .......................................... 455
A. NATURE AND EXTENT OF GUARANTY ...........441 F. RECORDING REQUIRED ................................. 456
B. NATURE AND EXTENT OF SURETYSHIP ....... 444 G. FORECLOSURE OF MORTGAGE .................... 456
C. EFFECT OF GUARANTY ................................... 444 G.1. JUDICIAL FORECLOSURE ................................. 456
C.1. EFFECTS OF GUARANTY BETWEEN THE G.2. EXTRAJUDICIAL FORECLOSURE ..................... 457
GUARANTOR AND THE CREDITOR ........................ 444 G.3. NATURE OF POWER OF FORECLOSURE BY
C.2. EFFECTS OF GUARANTY BETWEEN THE DEBTOR EXTRAJUDICIAL SALE .............................................. 458
AND THE GUARANTOR ........................................... 446 G.4. RIGHT TO SURPLUS OR DEFICIENCY ............. 458
C.3. EFFECTS OF GUARANTY AS BETWEEN CO- G.5. EFFECT OF INADEQUACY OF PRICE IN
GUARANTORS ......................................................... 447 FORECLOSURE SALE ............................................... 458
D. EXTINGUISHMENT OF GUARANTY ................ 448 H. WAIVER OF SECURITY BY CREDITOR............ 458
E. LEGAL AND JUDICIAL BONDS ........................ 448 I. REDEMPTION .................................................... 459
I.1. KINDS................................................................... 459
IV. PLEDGE .......................................... 449
A. CHARACTERISTICS ......................................... 449 VII. ANTICHRESIS................................. 460
B. KINDS ............................................................... 449 A. CHARACTERISTICS ......................................... 460
B.1. LEGAL PLEDGE / PLEDGE BY OPERATION OF B. FORMAL REQUISITES ..................................... 460
LAW [ARTS. 2121-2122] ............................................ 449 C. OBJECT OF THE CONTRACT ........................... 460
C. ESSENTIAL REQUISITES ................................. 449 D. AS DISTINGUISHED FROM OTHER CONTRACTS
C.1. PROVISIONS COMMON TO PLEDGE AND .............................................................................. 460
MORTGAGE [ART. 2085] ......................................... 449 E. OBLIGATIONS OF ANTICHRETIC CREDITOR . 460
C.2. PROVISIONS APPLICABLE ONLY TO PLEDGE 450 F. REMEDIES OF CREDITOR IN CASE OF NON-
D. REQUISITES FOR PERFECTION .....................450 PAYMENT OF DEBT .............................................. 461
E. OBLIGATIONS OF PLEDGEE ...........................450
F. RIGHTS OF PLEDGOR ......................................450 VIII. QUASI-CONTRACTS ....................... 461
G. FORECLOSURE.................................................451 A. NEGOTIORUM GESTIO (UNAUTHORIZED
G.1. REQUIREMENTS IN SALE OF THE THING MANAGEMENT) .................................................... 461
PLEDGED BY A CREDITOR, IF CREDIT IS NOT PAID A.1. OBLIGATIONS OF A GESTOR .............................461
ON TIME ..................................................................... 451 A.2. OBLIGATIONS OF THE OWNER OF THE
G.2. EFFECTS OF THE SALE OF THE THING PLEDGED PROPERTY OR BUSINESS ....................................... 462
................................................................................... 451 A.3. EFFECT OF RATIFICATION ............................... 462
H. PLEDGE AS DISTINGUISHED FROM CHATTEL A.4. EXTINGUISHMENT OF MANAGEMENT ........... 462
MORTGAGE [ARTS. 2140, 1484] ..........................451 B. SOLUTIO INDEBITI (UNDUE PAYMENT) ........ 462
I. PACTUM COMMISSORIUM .............................. 452 B.1. WHEN DEBT NOT YET DUE ............................... 463
xiv
B.2. RESPONSIBILITY OF TWO OR MORE PAYEES 463 A.2. REGISTRATION OF DEALINGS LESS THAN
B.3. WHEN MONEY OR THING DELIVERED IS OWNED OWNERSHIP [SEC. 54, PD 1529] ............................. 489
BY THIRD PERSON................................................... 463 A.3. REGISTRATION OF DEEDS OF SALE AND
B.4. LIABILITY OF PAYEE ......................................... 463 TRANSFERS..............................................................490
B.5. EXEMPTION FROM THE OBLIGATION TO A.4. REGISTRATION OF MORTGAGES AND LEASES
RESTORE THE PAYMENT UNDULY MADE ............. 463 [SEC. 60, PD 1529] ....................................................490
B.6. PRESUMPTION OF PAYMENT BY MISTAKE, A.5. REGISTRATION OF POWERS OF ATTORNEYS490
DEFENSE .................................................................. 463 A.6. REGISTRATION OF TRUSTS .............................490
C. OTHER QUASI-CONTRACTS ........................... 463 B. INVOLUNTARY DEALINGS ............................... 491
B.1. REGISTRATION OF ATTACHMENT ....................491
IX. CONCURRENCE AND PREFERENCE OF B.2. REGISTRATION OF ADVERSE CLAIM .............. 492
CREDITS .............................................. 465 B.3. REGISTRATION OF EXECUTION AND TAX
A. WHEN RULES ON PREFERENCE APPLICABLE DELINQUENCY SALES ............................................. 492
B.4. REGISTRATION OF NOTICE LIS PENDENS ..... 493
.............................................................................. 465
B. CLASSIFICATION OF CREDITS........................ 465 VI. CADASTRAL REGISTRATION .......... 494
B.1. SPECIAL PREFERRED CREDITS ON SPECIFIC A. PROCEDURE IN CADASTRAL REGISTRATION:
MOVABLE PROPERTY.............................................. 466
B.2. SPECIAL PREFERRED CREDITS ON SPECIFIC
SEC. 35 AND 36, PD 1529 .................................... 495
IMMOVABLE PROPERTY AND REAL RIGHTS......... 467 VII. JUDICIAL CONFIRMATION OF
B.3. ORDINARY PREFERRED CREDITS .................. 467
B.4. COMMON CREDITS .......................................... 468 IMPERFECT TITLE ................................ 496
C. ORDER OF PREFERENCE OF CREDITS .......... 468 A. FILING OF THE APPLICATION: ....................... 497
D. EXEMPT PROPERTY ........................................ 468 B. PROCEDURE IN JUDICIAL CONFIRMATION: . 497
C. EVIDENCE NECESSARY TO SUBSTANTIATE
I. TORRENS SYSTEM ............................. 471 APPLICATION: ...................................................... 498
A. GENERAL PRINCIPLES ..................................... 471
DEED .......................................................................... 471 VIII. REMEDIES .................................... 498
A.1. LAND REGISTRATION ........................................ 471 A. ANNULMENT OF JUDGMENT [SEE RULE 47,
A.2. CLASSIFICATION OF LANDS: [ART. XII, SEC. 3 OF ROC] ..................................................................... 498
THE 1987 CONSTITUTION]....................................... 472 B. PETITION TO REOPEN OR REVIEW DECREE OF
B. TORRENS SYSTEM .......................................... 473 REGISTRATION – SEC. 32, PD 1529 .................... 499
C. ADMINISTRATION OF THE TORRENS SYSTEM C. ACTION FOR RECONVEYANCE: ..................... 499
.............................................................................. 474 D. QUIETING OF TITLE – REMEDY FOR THE
D. CERTIFICATE OF TITLE ................................... 474 REMOVAL OF ANY CLOUD OF DOUBT OR
E. EFFECT OF REGISTRATION UNDER THE UNCERTAINTY WITH RESPECT TO REAL
TORRENS SYSTEM .............................................. 474 PROPERTY ...........................................................500
E.1. EFFECT OF NON-REGISTRATION ..................... 475 E. CANCELLATION OF TITLE ...............................500
E.2. DEALINGS IN LAND BEFORE ISSUANCE OF
F. ACTION FOR DAMAGES ..................................500
DECREE .................................................................... 475
E.3. LACHES, WHEN APPLICABLE .......................... 476 G. ACTION FOR COMPENSATION FROM THE
ASSURANCE FUND .............................................500
II. THE REGALIAN DOCTRINE ...............476 H. REVERSION .....................................................500
A. EFFECTS ........................................................... 477
B. CONCEPT OF NATIVE TITLE, TIME IMMEMORIAL IX. PETITIONS AND MOTIONS AFTER
POSSESSION ........................................................ 477 ORIGINAL REGISTRATION .................... 501
B.1. CERTIFICATE OF ANCESTRAL DOMAIN TITLE 478
B.2. ANCESTRAL DOMAINS .................................... 478 X. DEALINGS WITH UNREGISTERED
LANDS ................................................. 502
III. CITIZENSHIP REQUIREMENT ...........479
A. INDIVIDUALS ................................................... 479 XI. NON-REGISTRABLE PROPERTIES .. 503
A.1. THE KRIVENKO DOCTRINE ............................... 479 A. CIVIL CODE PROVISIONS DEALING WITH NON-
B. CORPORATIONS..............................................480 REGISTRABLE PROPERTIES ............................... 503
B. SPECIFIC KINDS OF NON-REGISTRABLE
IV. ORIGINAL REGISTRATION .............. 480 PROPERTIES OR LANDS ..................................... 504
A. KINDS OF ORIGINAL REGISTRATION: ...........480
B. WHO MAY APPLY:.............................................481
C. PROCEDURE IN ORDINARY LAND
REGISTRATION .................................................... 482 TORTS
D. EVIDENCE NECESSARY .................................. 486
I. PRELIMINARY CONSIDERATIONS ..... 507
V. SUBSEQUENT REGISTRATION ..........487 A. DEFINITION OF TORT...................................... 507
A. VOLUNTARY DEALINGS ................................. 489 A.1. ACCORDING TO MANNER OF COMMISSION .. 507
A.1. REGISTRATION OF VOLUNTARY INSTRUMENTS A.2. ACCORDING TO SCOPE.................................... 507
IN GENERAL ............................................................. 489 B. DEFINITION OF QUASI-DELICT ...................... 507
xv
C. CULPA AQUILIANA DISTINGUISHED FROM A.6. HEAD OF A FAMILY FOR THINGS THROWN OR
CRIME ................................................................... 507 FALLING .................................................................... 537
D. CULPA AQUILIANA DISTINGUISHED FROM A.7. PRODUCTS LIABILITY ....................................... 537
CULPA CONTRACTUAL; PRESENCE OF A.8. NUISANCE .........................................................540
CONTRACTUAL RELATIONS ...............................508
D.1. AS TO SOURCE .................................................. 508
D.2. AS TO BURDEN OF PROOF ............................. 508
D.3. AS TO APPLICABILITY OF THE DOCTRINE OF DAMAGES
PROXIMATE CAUSE ................................................. 508
D.4. AS TO THE DEFENSE OF AN EMPLOYER FOR I. DAMAGES ......................................... 547
THE NEGLIGENCE OF AN EMPLOYEE..................... 508 A. DEFINITION ...................................................... 547
B. WHEN ALLOWED ............................................. 547
II. QUASI-DELICT ................................. 509 C. TYPES OF DAMAGES ....................................... 547
A. NEGLIGENCE ...................................................509
A.1. DEFAULT STANDARD OF CARE: GOOD FATHER II. ACTUAL & COMPENSATORY DAMAGES
OF A FAMILY............................................................. 509 ............................................................ 548
A.2. STANDARD OF CARE NEEDED IN SPECIFIC A. REQUISITES ..................................................... 548
CIRCUMSTANCES .................................................... 509 B. WHEN IS A PERSON ENTITLED? .................... 548
A.3. PRESUMPTIONS OF NEGLIGENCE .................... 511
A.4. PERSONS LIABLE .............................................. 513
C. EXTENT OR SCOPE OF ACTUAL DAMAGES .. 549
C.1 IN CONTRACTS AND QUASI-CONTRACTS ....... 549
B. CAUSE ...............................................................518 C.2 IN CRIMES AND QUASI-DELICTS ......................550
C. DEFENSES ........................................................ 520 C.3 IN RAPE CASES .................................................. 552
C.1. DUE DILIGENCE TO PREVENT THE DAMAGE D. ATTORNEY’S FEES AND EXPENSES OF
UNDER ARTICLE 2180 ............................................. 520
C.2. ACTS OF PUBLIC OFFICERS .............................. 521
LITIGATION........................................................... 552
C.3. AUTHORITY OF LAW ......................................... 521 E. INTEREST ......................................................... 553
C.4. DAMNUM ABSQUE INJURIA ............................. 521
C.5. PLAINTIFF’S NEGLIGENCE IS THE PROXIMATE
III. MORAL DAMAGES .......................... 555
CAUSE........................................................................ 521 A. WHEN AWARDED ............................................ 555
C.6. CONTRIBUTORY NEGLIGENCE OF THE A.3 REQUISITES FOR AWARDING MORAL DAMAGES
PLAINTIFF .................................................................. 521 ................................................................................... 556
C.7. FORTUITOUS EVENT ........................................ 522 A.4 GENERAL PRINCIPLES OF RECOVERY ............ 556
C.8. PLAINTIFF’S ASSUMPTION OF RISK / VOLENTI B. WHEN RECOVERABLE .................................... 557
NON FIT INJURIA ..................................................... 522 B.1 IN CRIMINAL OFFENSE RESULTING IN PHYSICAL
C.9. PRESCRIPTION ................................................. 523 INJURIES ................................................................... 557
C.10. WAIVER ............................................................ 523 B.2 IN QUASI-DELICTS CAUSING PHYSICAL INJURIES
C.11. EMERGENCY RULE OR SUDDEN PERIL ................................................................................... 558
DOCTRINE ................................................................ 523 B.3 IN SEDUCTION, ABDUCTION, RAPE AND OTHER
LASCIVIOUS ACTS .................................................... 558
III. INTENTIONAL TORTS ..................... 524 B.4 IN ILLEGAL OR ARBITRARY DETENTION OR
A. HUMAN RELATIONS TORTS ........................... 524 ARREST ..................................................................... 558
A.1. ABUSE OF RIGHT .............................................. 524 B.5 IN CASE OF MALICIOUS PROSECUTION .......... 558
A.2. ACTS CONTRARY TO LAW ............................... 525 B.6 IN ACTS REFERRED TO IN ARTS. 21, 26, 27, 28,
A.3. ACTS CONTRARY TO MORALS ........................ 525 29, 32, 34 &35, NCC.................................................. 558
A.4. UNJUST ENRICHMENT..................................... 526 B.7 VIOLATION OF HUMAN DIGNITY ...................... 559
A.5. VIOLATION OF HUMAN DIGNITY..................... 527 B.8 REFUSAL OR NEGLECT OF DUTY ..................... 559
A.6 DERELICTION OF DUTY .................................... 530 B.9 VIOLATION OF CIVIL AND POLITICAL RIGHTS.560
A.7. UNFAIR COMPETITION...................................... 531 B.10 IN WILLFUL INJURY TO PROPERTY .................561
B. INDEPENDENT CIVIL ACTIONS ....................... 531 B.11 IN BREACH OF CONTRACT IN BAD FAITH........561
B.1. VIOLATION OF CIVIL AND POLITICAL RIGHTS . 531 C. WHO MAY RECOVER MORAL DAMAGES ....... 561
B.2. DEFAMATION, FRAUD, PHYSICAL INJURIES.. 532 C.1 RELATIVES OF INJURED PERSONS....................561
B.3. NEGLECT OF DUTY ........................................... 534 C.2 JURIDICAL PERSONS .........................................561
B.4. CATCH-ALL INDEPENDENT CIVIL ACTION ..... 534 D. FACTORS CONSIDERED IN DETERMINING
AMOUNT .............................................................. 562
IV. LIABILITY ATTACHED TO SPECIFIC
PERSONS..............................................535 IV. NOMINAL DAMAGES ...................... 562
A. STRICT LIABILITY ............................................. 535 A. REQUISITES AND CHARACTERISTICS ........... 562
A.1. POSSESSOR OR USER OF ANIMALS ............... 535 B. WHEN AWARDED ............................................ 562
A.2. PROVINCES, CITIES, AND MUNICIPALITIES ... 535 C. NATURE AND DETERMINATION OF AMOUNT
A.3. PROPRIETOR OF BUILDING OR STRUCTURE 535 .............................................................................. 563
A.4. ENGINEER OR ARCHITECT OF COLLAPSED
BUILDING ................................................................. 536 V. TEMPERATE DAMAGES ................... 564
A.5. OWNERS OF ENTERPRISES OR OTHER A. REQUISITES ..................................................... 564
EMPLOYERS ............................................................. 536 B. FACTORS IN DETERMINING AMOUNT .......... 564

xvi
B.1 WHERE THERE ARE RECEIPTS PROVIDED A.2. TYPES OF JUDICIAL JURISDICTION ................. 575
AMOUNTING TO LESS THAN P25,000 ................... 564 A.3. WAYS OF DEALING WITH A CONFLICTS
B.2 WHERE NO RECEIPTS WERE PROVIDED......... 565 PROBLEM ................................................................. 576
B. CHOICE OF LAW .............................................. 576
VI. LIQUIDATED DAMAGES .................. 565 B.1. APPROACHES TO CHOICE OF LAW .................. 576
A. REQUISITES AND CHARACTERISTICS ........... 565 C. THE PROBLEM OF CHARACTERIZATION .......577
B. RULES GOVERNING BREACH OF CONTRACT C.1 CHARACTERIZATION AND THE SINGLE-ASPECT
.............................................................................. 565 METHOD ................................................................... 577
C.2 DEPECAGE ......................................................... 578
VII. EXEMPLARY OR CORRECTIVE D. THE PROBLEM OF RENVOI ............................ 579
DAMAGES ............................................ 566 D.1. DEFINITION........................................................ 579
A. WHEN RECOVERABLE .................................... 566 D.2. VARIOUS WAYS OF DEALING WITH THE
A.1 IN CRIMINAL OFFENSES; NCC ART. 2230 ........ 566 PROBLEM OF RENVOI ............................................. 579
A.2 IN CONTRACTS AND QUASI-CONTRACTS; NCC E. NOTICE AND PROOF OF FOREIGN LAW ........ 579
ART. 2232 ................................................................. 567 E.1. EXTENT OF JUDICIAL NOTICE ........................... 579
REQUISITES.............................................................. 567 E.2. PROOF OF FOREIGN LAW ................................ 579
B. REQUISITES TO RECOVER EXEMPLARY E.3. EXCEPTIONS TO THE APPLICATION OF FOREIGN
DAMAGES AND LIQUIDATED DAMAGES AGREED LAW ...........................................................................580
UPON .................................................................... 567 III. PERSONAL LAW.............................. 580
C. DAMAGES IN CASE OF DEATH ....................... 568 A. NATIONALITY .................................................. 580
C.1 IN DEATH CAUSED BY BREACH OF CONDUCT BY A.1. IMPORTANCE OF A PERSONAL LAW...............580
A COMMON CRIME .................................................. 568 A.2. DETERMINATION OF NATIONALITY ................580
A.3. PROBLEMS IN APPLYING NATIONALITY
VIII. GRADUATION OF DAMAGES ........ 569 PRINCIPLE ................................................................ 582
A. RULES .............................................................. 569 B. DOMICILE ......................................................... 583
A.1 IN CRIMES ........................................................... 569
B.1. DEFINITION ........................................................ 583
A.2 IN QUASI-DELICTS ............................................ 569
B.2. GENERAL RULES ON DOMICILE ...................... 583
B. CONTRIBUTORY NEGLIGENCE ...................... 569 B.3. KINDS OF DOMICILE ......................................... 583
B.1 PLAINTIFF’S NEGLIGENCE................................. 569
C. PRINCIPLES ON PERSONAL STATUS AND
B.2 IN CONTRACTS, QUASI-CONTRACTS AND
QUASI-DELICTS ....................................................... 570 CAPACITY ............................................................. 584
C.1. DEFINITION ........................................................ 584
C. GROUNDS FOR MITIGATION OF DAMAGES . 570
C.2. LEGISLATIVE JURISDICTION DISTINGUISHED
C.1 FOR CONTRACTS: .............................................. 570
FROM JUDICIAL JURISDICTION .............................. 584
C.2 FOR QUASI-CONTRACTS: ................................. 570
C.3. BEGINNING AND END OF PERSONALITY ....... 584
C.3 FOR QUASI-DELICTS: ........................................ 570
C.4. ABSENCE ........................................................... 584
C.4 RULE WHEN CONTRACTING PARTIES ARE IN
C.5. NAME ................................................................. 585
PARI DELICTO .......................................................... 570
C.6. AGE OF MAJORITY ............................................ 585
C.5 LIQUIDATED DAMAGES ..................................... 571
C.7. CAPACITY........................................................... 585
C.6 COMPROMISE ..................................................... 571

IX. MISCELLANEOUS RULES ................. 571 IV. CHOICE OF LAW PROBLEMS ........... 585
A. CHOICE-OF-LAW IN FAMILY RELATIONS...... 585
A. DAMAGES THAT CANNOT CO-EXIST .............. 571
A.1. MARRIAGE ......................................................... 585
A.1 NOMINAL WITH OTHER DAMAGES ................... 571
A.2. DIVORCE AND SEPARATION ........................... 587
A.2 ACTUAL AND LIQUIDATED ................................ 571
A.3. ANNULMENT AND DECLARATION OF NULLITY
B. DAMAGES THAT MUST CO-EXIST ................... 571 ................................................................................... 587
B.1 EXEMPLARY WITH MORAL, TEMPERATE, A.4. PARENTAL RELATIONS.................................... 587
LIQUIDATED OR COMPENSATORY ......................... 571 A.5. ADOPTION ........................................................588
C. DAMAGES THAT MUST STAND ALONE ......... 572 B. CHOICE OF LAW IN PROPERTY ...................... 588
C.1 NOMINAL DAMAGES ......................................... 572 B.1. THE CONTROLLING LAW ..................................588
B.2. CAPACITY TO TRANSFER OR ACQUIRE
PROPERTY ................................................................ 589
B.3. EXTRINSIC AND INTRINSIC VALIDITY OF
PRIVATE INTERNATIONAL LAW CONVEYANCES ........................................................ 589
B.4. EXCEPTION TO LEX SITUS RULE ..................... 589
I. INTRODUCTION .................................574 B.5. SITUS OF CERTAIN PROPERTIES .................... 589
A. BASIS ................................................................ 574 C. CHOICE OF LAW IN CONTRACTS ................... 589
B. DEFINITION ...................................................... 574 C.1. EXTRINSIC VALIDITY OF CONTRACTS ............. 589
C. SCOPE .............................................................. 574 C.2. INTRINSIC VALIDITY OF CONTRACTS ............. 589
D. SOURCES ......................................................... 574 C.3. CAPACITY TO ENTER INTO CONTRACTS ........590
C.4. CHOICE OF LAW ISSUES IN CONFLICTS
II. JURISDICTION AND CHOICE OF LAW 575 CONTRACTS CASES .................................................590
A. JURISDICTION ................................................. 575 C.5. ADHESION CONTRACTS ..................................590
A.1. BASIS OF EXERCISE OF JUDICIAL JURISDICTION C.6. LIMITATIONS TO CHOICE OF LAW...................590
.................................................................................. 575

xvii
D. CHOICE OF LAW IN WILLS, SUCCESSION AND F.1. CORPORATIONS ................................................ 592
ADMINISTRATION OF ESTATES .........................590 F.2. PARTNERSHIPS ................................................ 594
D.1. EXTRINSIC VALIDITY OF WILLS........................ 590
D.2. INTRINSIC VALIDITY OF WILLS ....................... 590 V. FOREIGN JUDGMENTS ..................... 595
D.3. INTERPRETATION OF WILLS ............................ 591 A. RECOGNITION AND ENFORCEMENT OF
D.4. REVOCATION ..................................................... 591 FOREIGN JUDGMENTS ........................................ 595
D.5. PROBATE ........................................................... 591 A.1. DISTINCTION BETWEEN RECOGNITION AND
D.6. ADMINISTRATION OF ESTATES ....................... 591 ENFORCEMENT ........................................................ 595
E. CHOICE OF LAW IN TORTS AND CRIMES .......591 A.2. BASES OF RECOGNITION AND ENFORCEMENT
E.1. LEX LOCI DELICTI COMMISSI FOR TORTS ........ 591 OF FOREIGN JUDGMENTS....................................... 595
E.2. MODERN THEORIES ON FOREIGN TORT A.3. POLICIES UNDERLYING RECOGNITION AND
LIABILITY ................................................................... 591 ENFORCEMENT ........................................................ 596
E.3. FOREIGN TORT CLAIMS .................................... 591 A.4. REQUISITES FOR RECOGNITION OR
E.4. DISTINGUISHING BETWEEN TORTS AND CRIMES ENFORCEMENT ........................................................ 596
................................................................................... 591 A.5. PROCEDURE FOR ENFORCEMENT ................. 596
E.5. LEX LOCI DELICTI FOR CRIMES ....................... 592
F. CHOICE OF LAW AFFECTING CORPORATIONS VI. SUMMARY OF CONFLICTS OF LAW
AND OTHER JURIDICAL ENTITIES ...................... 592 RULES.................................................. 597

xviii
CIVIL LAW
PERSONS AND
FAMILY RELATIONS
UP LAW BOC PERSONS AND FAMILY RELATIONS CIVL LAW

These may excuse a party from the legal


I. Effect and consequences of his conduct; but not
Application of Laws ignorance of law:
(1) In specific instances provided by law,
mistake as to difficult legal questions has
A. WHEN LAWS TAKE EFFECT been given the same effect as a mistake
of fact. (Tolentino)
Art. 2. Laws shall take effect after fifteen
days following the completion of their (2) The laws referred to by this article are
publication either in the Official Gazette, or in those of the Philippines. There is no
a newspaper of general circulation in the conclusive presumption of knowledge of
Philippines, unless it is otherwise foreign laws. (Tolentino)
provided. (As amended by E.O. 200)
General Rules: C. RETROACTIVITY OF LAWS
The clause "unless it is otherwise provided" Art. 4. Laws shall have no retroactive effect,
refers to the date of effectivity and not to the unless the contrary is provided.
requirement of publication itself, which
cannot, in any event, be omitted. [Tanada vs General Rule: All statutes are to be construed
Tuvera (1986)] as having only prospective operation.
Publication is indispensable in every case, but Exceptions
the legislature may in its discretion provide (1) When the law itself expressly provides
that the usual fifteen-day period shall be
shortened or extended. [Tanada vs Tuvera Exceptions to Exception:
(1986)] (a) Ex post facto law
When, on the other hand, the administrative (b) Impairment of contract
rule goes beyond merely providing for the
means that can facilitate or render least (2) In case of remedial statutes
cumbersome the implementation of the law (3) In case of curative statutes
but substantially increases the burden of
those governed, it behooves the agency to (4) In case of laws interpreting others
accord at least to those directly affected a (5) In case of laws creating new rights [Bona
chance to be heard, and thereafter to be duly v. Briones (1918)]
informed, before that new issuance is given
the force and effect of law. [Commissioner vs. (6) Penal Laws favorable to the accused
Hypermix (2012)]
Exception: D. MANDATORY OR PROHIBITORY
Interpretative regulations and those internal LAWS
in nature. [Tanada vs Tuvera (1986)] Art. 5. Acts executed against the provisions of
mandatory or prohibitory laws shall be void,
except when the law itself authorizes their
B. IGNORANCE OF THE LAW validity.
Art. 3. Ignorance of the law excuses no one Art. 17, par. 3 Prohibitive laws concerning
from compliance therewith. persons, their acts or property, and those
Conclusive Presumption: That everyone which have for their object public order,
knows the law, even if they have no actual public policy and good customs shall not be
knowledge of the law. rendered ineffective by laws or judgments
promulgated, or by determinations or
Mistake of Fact & Difficult Questions of Law: conventions agreed upon in a foreign country.

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E. WAIVER OF RIGHTS Two Kinds of Repeal (Tolentino)


Art. 6. Rights may be waived, unless the (1) Express or Declared – contained in a
waiver is contrary to law, public order, public special provision of a subsequent law;
policy, morals, or good customs, or names the law repealed
prejudicial to a third person with a right (2) Implied or Tacit – takes place when the
recognized by law. provisions of the subsequent law are
Waiver – voluntary and intentional incompatible or inconsistent with those of
relinquishment or abandonment of a known an earlier law.
legal right or privilege. It has been ruled that The fundament is that the legislature should
a waiver to be valid and effective must be be presumed to have known the existing laws
couched in clear and unequivocal terms on the subject and not have enacted
which leave no doubt as to the intention of a conflicting statutes. Hence, all doubts must
party to give up a right or benefit which be resolved against any implied repeal, and
legally pertains to him [RB Michael Press v all efforts should be exerted in order to
Galit (2008)]. The waiver should be made in a harmonize and give effect to all laws on the
positive manner [Dona Adela v. Tidcorp subject. [Republic vs. Marcopper Mining
(2015)] (2000)]
Exceptions:
(1) If the waiver is contrary to law, public G. JUDICIAL DECISIONS
order, public policy, morals or good
customs Art. 8. Judicial decisions applying or
interpreting the laws or the Constitution shall
(2) If the waiver prejudices a third person
form a part of the legal system of the
(3) If the alleged rights do not yet exist Philippines.
(4) If the right is a natural right Jurisprudence cannot be considered as an
independent source of law; it cannot create
Art. 2035. No compromise upon the following
law. (1 Camus 38 as cited in Tolentino)
questions shall be valid:
The doctrine of Stare Decisis gives stability to
(1) The civil status of persons;
the courts and fills the gaps of the law to
(2) The validity of a marriage or a legal adapt to changing times. 5
separation;
The interpretation or construction placed by
(3) Any ground for legal separation; the courts establishes the contemporaneous
(4) Future support; legislative intent of the law. The latter as so
interpreted and construed would thus
(5) The jurisdiction of courts; constitute a part of that law as of the date the
(6) Future legitime. statute is enacted. It is only when a prior
ruling of this Court finds itself later overruled,
and a different view is adopted, that the new
doctrine may have to be applied prospectively
F. REPEAL OF LAWS
in favor of parties who have relied on the old
Art. 7. Laws are repealed only by subsequent doctrine and have acted in good faith in
ones, and their violation or non-observance accordance therewith. [Pesca v Pesca (2001)]
shall not be excused by disuse, or custom or
practice to the contrary.
When the courts declared a law to be H. DUTY TO RENDER JUDGMENT
inconsistent with the Constitution, the former Art. 9. No judge or court shall decline to
shall be void and the latter shall govern. render judgment by reason of the silence,
Administrative or executive acts, orders and obscurity or insufficiency of the laws.
regulations shall be valid only when they are Talks about the principle of equity which is
not contrary to the laws or the Constitution. justice with mercy.
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Exception: If the period arises from a contractual


relationship, the act will still be due on that
This article does not apply to criminal
Legal Holiday/Sunday
prosecutions because where there is no law
punishing an act, the case must be dismissed. There obviously exists a manifest
(Tolentino) incompatibility in the manner of computing
legal periods between the Civil Code and the
Revised Administrative Code of 1987. Since
I. PRESUMPTION AND APPLICABILITY the Administrative Code is the more recent
OF CUSTOM law, it governs the computation of legal
period [CIR vs Primetown (2007)]
Art. 10. In case of doubt in the interpretation
or application of laws, it is presumed that the
lawmaking body intended right and justice to K. APPLICABILITY OF PENAL LAWS
prevail.
Art. 14. Penal laws and those of public
Art. 11. Customs which are contrary to law, security and safety shall be obligatory upon
public order or public policy shall not be all who live or sojourn in the Philippine
countenanced. territory, subject to the principles of public
Art. 12. A custom must be proved as a fact, international law and to treaty stipulations.
according to the rules of evidence.
Also called principle of territoriality.
Ignorance is positive proof that said custom Exemptions under International Law (Theory
does not exist. of Extraterritoriality):
(1) When the offense is committed by a
J. LEGAL PERIODS foreign sovereign while in Philippine
territory
Art. 13. When the laws speak of years,
months, days or nights, it shall be understood (2) When the offense is committed by
that years are of three hundred sixty-five days diplomatic representatives
each; months, of thirty days; days, of twenty- (3) When the offense is committed in a
four hours; and nights from sunset to sunrise. public or armed vessel of a foreign
If months are designated by their name, they country.
shall be computed by the number of days
which they respectively have.
L. BINDING EFFECT
In computing a period, the first day shall be
excluded, and the last day included. Art. 15. Laws relating to family rights and
duties, or to the status, condition and legal
Revised Administrative Code Section 31. Legal capacity of persons are binding upon citizens
Periods. - "Year" shall be understood to be of the Philippines, even though living abroad.
twelve calendar months; "month" of thirty
days, unless it refers to a specific calendar Art. 16. Real property as well as personal
month in which case it shall be computed property is subject to the law of the country
according to the number of days the specific where it is stipulated.
month contains; "day," to a day of twenty- However, intestate and testamentary
four hours; and "night," from sunset to successions, both with respect to the order of
sunrise. succession and to the amount of successional
Policy on Last Day being a Legal rights and to the intrinsic validity of
Holiday/Sunday testamentary provisions, shall be regulated
by the national law of the person whose
If the period arises by statute or orders by the succession is under consideration, whatever
government, the last day will automatically may be the nature of the property and
be considered the next working day regardless of the country wherein said
property may be found.

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Art. 17. The forms and solemnities of (2) Lex loci celebracionis - Marriage governed
contracts, wills, and other public instruments by laws in the country
shall be governed by the laws of the country
(3) Lex contractus - Forms and solemnities of
in which they are executed.
contracts governed by laws of the land where
When the acts referred to are executed before they are executed
the diplomatic or consular officials of the
When performed in front of a Filipino
Republic of the Philippines in a foreign
diplomatic or consular office, Filipino
country, the solemnities established by
solemnities will be used.
Philippine laws shall be observed in their
execution.
Prohibitive laws concerning persons, their
acts or property, and those which have, for
their object, public order, public policy and
good customs shall not be rendered
ineffective by laws or judgments
promulgated, or by determinations or
conventions agreed upon in a foreign country.

L. 1. ARTICLE 15 EMBODIES THE


NATIONALITY PRINCIPLE. [DACASIN V.
DACASIN (2010)]
“It is true that owing to the nationality
principle embodied in Article 15 of the Civil
Code, only Philippine nationals are covered
by the policy against absolute divorces, the
same being considered contrary to our
concept of public policy and morality.
However, aliens may obtain divorces abroad,
which may be recognized in the Philippines,
provided they are valid according to their
national law.” [Dacasin v. Dacasin (2010)]
Art. 16, par. 2 is bolstered by Art. 1039 of the
Civil Code, which further provides that
capacity to succeed is governed by the law of
the nation of the decedent. [Ancheta v.
Guersey-Dalaygon (2006)]

L. 2. ARTICLES 15, 16 AND 17 ARE RULES


OF CONFLICT OF LAWS.
(1) Lex rei sitae - Personal and real property
are governed where the land (situs) is.
However, intestate and testate succession are
governed by nationality principle and cannot
be made to follow Philippine rule
When a foreign law is involved it must be
alleged and proved or it will be assumed to
be same as ours (Doctirine of Processual
Presumption)

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II. Persons and B. COMMENCEMENT


TERMINATION OF PERSONALITY
AND

Personality Art. 40. Birth determines personality; but the


A. CONCEPT OF PERSON AND conceived child shall be considered born for
PERSONALITY all purposes favorable to it, provided that it
be born later with the conditions specified in
Persons - Any being, physical, moral, real, the following article.
juridical and legal susceptible of rights and
obligations or being the subject of legal Art. 41. For civil purposes, the fetus is
relations. considered born if it is alive at the time it is
completely delivered from the mother’s
Juridical Capacity Capacity to Act
womb. However, if the fetus had an intra-
uterine life of less than seven months, it is
Fitness of man to be the Power to do acts not deemed born if it dies within twenty-four
subject of legal with legal effect hours after its complete delivery from the
relations maternal womb.

Passive Active
Birth – complete removal of the fetus from
the mother’s womb; before birth, a fetus is
Aptitude for the Holding Aptitude for the merely part of the mother’s internal organs. It
and Enjoyment of rights Exercise of rights is enough that the child lives even for an
instant.
Inherent in natural Must be acquired
persons Proof that the fetus was alive upon
separation is complete respiration as a test or
sign of independent life
Lost upon death Lost through
death and other It is presumed that the child was alive and it
causes is the contradicting party who has the burden
of proof.
Can exist without Must exist with
Intra-Uterine Life When Considered Born
capacity to act juridical capacity
7 months or more If alive upon delivery
Cannot be limited or May be restricted
restricted or limited
Less than 7 If alive after completion
months of 24 hours from
delivery
Art. 37. Juridical capacity, which is the fitness
to be the subject of legal relations, is inherent
in every natural person and is lost only Personality of Conceived Child
through death. Capacity to act, which is the (1) Limited - only for purposes favorable to it.
power to do acts with legal effect, is acquired
and may be lost. (2) Conditional - it depends upon the child
being born alive later
N.B.: Juridical capacity can exist even without
capacity to act; the existence of the latter A conceived child can acquire rights while
implies that of the former. Full civil capacity still in the mother’s womb. It can inherit by
is the existence of both capacity to act and will or by intestacy.
juridical capacity. Period of Conception - the first 120 days of the
Capacity and incapacity depends on the law, 300 days preceding the birth of the child.
therefore it cannot be modified by [Tolentino]
agreements. It is a matter of public interest. An aborted fetus never acquired legal
(Tolentino) rights/civil personality because it was not
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alive at the time of delivery from the mother’s Art. 43 Rule 131, Sec. 3 (jj)
womb. No damages can be claimed in behalf
of the unborn child since an action for
Only use the presumptions when there are
pecuniary damages on account of personal
no facts to get inferences from
injury or death pertains primarily to the one
injured. [Geluz vs CA (1961)]
Only use for Cannot be used for
“This is not to say that the parents [of an succession succession purposes
aborted fetus] are not entitled to collect any purposes
damages at all. But such damages must be
those inflicted directly upon them as In any Only during death in
distinguished from the injury or violation of circumstance calamities, wreck,
the rights of the [aborted fetus]” e.g. moral battle or conflagration
damages for their loss and the
disappointment of their parental
expectations (Art. 2217, Civil Code). [Geluz v.
CA (1961)] Presumption of Survivorship in the Rules of
Court (Rule 131, sec. 3, (jj.)

C. DEATH Age Presumed Survivor


Art. 42. Civil personality is extinguished by
death. The effect of death upon the rights Both under 15 Older
and obligations of the deceased is
determined by law, by contract and by will. Both above 60 Younger
Art. 43. If there is a doubt, as between two or
more persons who are called to succeed each One under 15, the One under 15
other, as to which of them died first, whoever other above 60
alleges the death of one prior to the other,
shall prove the same; in the absence of proof, Both over 15 and Male
it is presumed that they died at the same under 60; different
time and there shall be no transmission of sexes
rights from one to the other.
Both over 15 and Older
Criminal liability ends with death BUT civil under 60; same sex
liability may be charged against the estate
[People v. Tirol, (1981)].
One under 15 or over One between 15
Note: Article 43 provides a statutory 60, the other between and 60
presumption when there is doubt on the those ages
order of death between persons who are
called to succeed each other (only).
The statutory presumption of Article 43 was D. JURIDICAL PERSONS
not applied due to the presence of a credible
eyewitness as to who died first [Joaquin v. Art. 44. The following are juridical persons:
Navarro,(1953)]. (1) The State and its political subdivisions;
Even mere inference, when drawn from (2) Other corporations, institutions and
established facts and weighed by common entities for public interest or purpose, created
experience, may prevail over the presumption by law; their personality begins as soon as
of Art. 43. [Joaquin v. Navarro (1953)] they have been constituted according to law;
(3) Corporations, partnerships and
Compare Art. 43 with Rule 131, Sec. 3 (jj), associations for private interest or purpose to
presumption of Survivorship. which the law grants a juridical personality,

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separate and distinct from that of each capacity to act, and do not exempt the
shareholder, partner or member. incapacitated person from certain
obligations, as when the latter arise from his
Art. 45.Juridical persons mentioned in Nos. 1
acts or from property relations, such as
and 2 of the preceding article are governed by
easements.
the laws creating or recognizing them.
Art. 39. The following circumstances, among
Private corporations are regulated by laws of
others, modify or limit capacity to act: age,
general application on the subject.
insanity, imbecility, the state of being a deaf-
Partnerships and associations for private mute, penalty, prodigality, family relations,
interest or purpose are governed by the alienage, absence, insolvency and
provisions of this Code concerning trusteeship. The consequences of these
partnerships. circumstances are governed in this Code,
other codes, the Rules of Court, and in special
Art. 46. Juridical persons may acquire and
laws.
possess property of all kinds, as well as incur
obligations and bring civil or criminal actions, Capacity to act is not limited on account of
in conformity with the laws and regulations of religious belief or political opinion.
their organization.
A married woman, twenty-one years of age or
Art. 47. Upon the dissolution of corporations, over, is qualified for all acts of civil life, except
institutions and other entities for public in cases specified by law.
interest or purpose mentioned in No. 2 of
article 44, their property and other assets General rule: Incapacitated persons are not
shall be disposed of in pursuance of law or exempt from certain obligations arising from
the charter creating them. If nothing has his acts or property relations.
been specified on this point, the property and (i) Minority
other assets shall be applied to similar
RA 6809 (1989): An act lowering the age of
purposes for the benefit of the region,
majority from twenty-one to eighteen years.
province, city or municipality which during
the existence of the institution derived the
principal benefits from the same.
Effects on Contracts
Concept of Juridical Persons is that an
(1) They cannot give consent to a contract
abstract being is formed for the realization of
(Art. 1327 (1))
a collective purpose that the law granted with
capacity for rights and obligations. It requires (2) A contract where one of the parties is a
recognition of the State and is independent of minor is voidable(Art. 1390(1))
the members (Tolentino). (3) A contract is unenforceable when both of
the parties are minors (incapable of
giving consent) (Art. 1403(3))
E. RESTRICTIONS ON CIVIL CAPACITY
(4) Minority cannot be asserted by the other
E. 1. PRESUMPTION OF CAPACITY party in an action for annulment (Art.
Art. 37. Juridical capacity, which is the fitness 1397)
to be the subject of legal relations, is inherent (5) Not obliged to make restitution except
in every natural person and is lost only insofar as he has been benefited (Art.
through death. Capacity to act, which is the 1399)
power to do acts with legal effect, is acquired
and may be lost. (6) Minor has no right to demand the
thing/price voluntarily returned by him
(Art. 1426)
E. 2. RESTRICTIONS ON CAPACITY TO ACT (7) Minor has no right to recover voluntarily
Art. 38. Minority, insanity or imbecility, the paid sum or delivered thing, if consumed
state of being a deaf-mute, prodigality and in good faith (Art. 1427)
civil interdiction are mere restrictions on
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(8) Must pay reasonable amount for (2) Contracts entered into during lucid
necessaries delivered to him (Art. 1489) intervals are valid (Art. 1328) Burden of
proof lies with party asserting the
contract was entered into by the insane
Estoppel works against minors who during a lucid interval.
misrepresent their ages in a contract and are
(3) Restitution of benefits (Art. 1399)
compelled to comply with its terms. [Mercado
vs Espiritu(1917)] (4) Voidable if one of the parties is insane
(Art. 1390)
When a minor made no active
misrepresentation as to his minority and such (5) Unenforceable if both of the parties are
minority is known to the other party, the insane (Art. 1403 (3))
contract may be annulled by the minor upon
attaining the age of majority. [Bambalan vs
Maramba (1928)] Effect on Crimes
Minors are obliged to make restitution insofar (1) General rule: EXEMPTED from criminal
as they have been benefited (Art. 1399). liability
[Braganza vs Villa Abrille (1959]
(2) Exception: Acted during lucid interval (Art.
1328).
Effects on Marriage
(1) May not yet contract marriage (Art. 5, FC). Effect on Marriage
(2) Marriages, where one of the parties is May be annulled if either party was of
below 18, even with the consent of unsound mind unless the such party after
parents/guardians, are void (Art. 35, FC). coming to reason, freely cohabited with the
other (Art. 45(2), FC)
Effect on Crimes (R.A. 9344)
Action for annulment of marriage must be
(1) General rule: EXEMPTED from criminal
filed by the sane spouse who had no
liability
knowledge of the other’s insanity, or by any
(2) Exception: Acted with discernment, and relative/guardian of the insane before the
the minor is between 15 and 18 years of death of either party; or by the insane spouse
age. during a lucid interval or after regaining
sanity (Art. 47(2), FC)
In the absence of proof that the defendant
(ii) Insanity
had lost his reason or became demented a
Insanity includes many forms of mental few moments prior to or during the
disease, either inherited or acquired. A perpetration of the crime, it is presumed that
person may not be insane but only mentally he was in a normal condition of mind. It is
deficient (idiocy, imbecility, feeble- improper to conclude that he acted
mindedness). unconsciously, in order to relieve him from
It is presumed that a person who enters into a responsibility on the ground of exceptional
mental condition, unless his insanity and
contract is of sound mind. The burden of
absence of will are proven. [USA vs Vaguilar
proof of insanity rests upon him who alleges
(1914)]
insanity. [Engle v. Doe (1925)] (see Exception
below) Capacity to act must be supposed to attach to
a person who has not previously been
declared incapable, and such capacity is
Effect on Contracts presumed to continue so long as the contrary
(1) Incapacity to give consent to a contract be not proved, that is, that at the moment of
(Art. 1327(2)) his acting he was incapable, crazy, insane, or
out his mind [Standard Oil vs Arenas (1911)]

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(iii) Deaf-Mutism (4) Sentence of one’s spouse to a penalty


which carries with it civil interdiction is
(1) Cannot give consent to a contract if
sufficient cause for judicial separation of
he/she also does not know how to write
property (Art. 135 (1), FC)
(Art. 1327(2), CC)
(5) The administration of exclusive property
(2) Can make a valid WILL, provided: he must
of either spouse may be transferred by
personally read the will. The contents of
the court to the other spouse when one of
the same have either been read
them is sentenced to civil interdiction (Art.
personally by him or otherwise
142 (3), FC)
communicated to him by 2 persons (Art.
807, CC) (vi) Family relations
(3) Cannot be a witness to the execution of a (1) Justifying circumstance if acted in
will (Art. 820, CC) defense of person/rights of spouse,
ascendants, descendants,
(4) Voidable if one of the parties is deaf-mute
brothers/sisters, and other relatives up to
and does not know how to write (Art.
the 4th civil degree (Art. 11(2), RPC)
1390, CC)
(2) Mitigating circumstance if acted in the
(5) Unenforceable if both of the parties are
immediate vindication of a grave
deaf-mutes and do not know how to write
offense/felony committed against his
(Art. 1403(3), CC)
spouse, ascendants or relatives of the
same civil degree (Art. 13(5), RPC)
(iv) Prodigality (3) Incestuous and void marriages:
Incompetent includes prodigals (Rules of (a) Between ascendants and
Court Rule 92, Sec 2) descendants of any degree;
Note: It is not the circumstance of prodigality, (b) Between brothers and sisters,
but the fact of being under guardianship that whether full or half-blood. (Art. 37,
restricts capacity to act. FC)
Prodigality may be inferred but must show a (4) Donations/grants of gratuitous
morbid state of mind and a disposition to advantage between spouses during the
spend, waste, and lessen the estate to such marriage shall be VOID, except moderate
an extent as is likely to expose the family to gifts during family occasions (Art. 87, FC)
want of support, or to deprive the forced heirs
(5) Prescription does not run between
of their undisposable part of the estate.
spouses, parent and child, guardian and
[Martinez v. Martinez (1902)]
ward (Art. 1109)
(6) Descendants cannot be compelled to
(v) Civil interdiction testify in a criminal case, against his
parents and grandparents
(1) It is an accessory penalty imposed upon
persons who are sentenced to a principal (a) UNLESS: crime was against the
penalty not lower than reclusion descendant OR by one parent against
temporal (Art. 41, RPC). the other (Art. 215, FC)
(2) Offender is deprived of rights of parental (7) Spouses cannot sell property to each
authority, or guardianship, of marital other, EXCEPT:
authority, of the right to manage his
(a) Absolute separation is agreed upon in
property and of the right to dispose of
the marriage settlements
such by any act inter vivos (Art. 34, RPC)
(b) Judicial separation of property (Art.
(3) For the validity of marriage settlements,
1490)
the participation of the guardian shall be
indispensable(Art. 123, FC) (8) A suit between family members cannot
prosper without any showing that earnest
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effort towards a compromise have been 1. A person on board a vessel lost during a
made but have failed (Art. 151, FC) sea voyage, or an aeroplane which is missing,
who has not been heard of for four years since
(a) EXCEPT: questions on civil status of
the loss of the vessel or aeroplane;
persons, validity of a marriage or a
legal separation, any ground for legal 2. A person in the armed forces who has
separation, future support, taken part in war, and has been missing for
jurisdiction of courts, future legitime four years;
(Art. 2035).
3. A person who has been in danger of death
(vii) Alienage under other circumstances and his existence
has not been known for four years.
Dual citizenship is different from dual
allegiance. The former arises when, as a Art. 41.A marriage contracted by any person
result of the concurrent application of the during subsistence of a previous marriage
different laws of two or more states, a person shall be null and void, unless before the
is simultaneously considered a national by celebration of the subsequent marriage, the
the said states. Dual allegiance, on the other prior spouse had been absent for four
hand, refers to the situation in which a person consecutive years and the spouse present has
simultaneously owes, by some positive act, a well-founded belief that the absent spouse
loyalty to two or more states. While dual was already dead. In case of disappearance
citizenship is involuntary, dual allegiance is where there is danger of death under the
the result of an individual’s volition. For circumstances set forth in the provisions of
candidates with dual citizenship, it should Article 391 of the Civil Code, an absence of
suffice if, upon the filing of their certificates of only two years shall be sufficient.
candidacy, they elect Philippine citizenship to
For the purpose of contracting the
terminate their status as persons with dual
subsequent marriage under the preceding
citizenship considering that their condition is
paragraph the spouse present must institute
the unavoidable consequence of conflicting
a summary proceeding as provided in this
laws of different states. [Cordora vs COMELEC
Code for the declaration of presumptive
(2009)]
death of the absentee, without prejudice to
Aliens cannot own or operate public utilities. the effect of reappearance of the absent
Corporations should be at least 40% Filipino spouse.
and their managing or executive officials
Art. 42. The subsequent marriage referred to
should be Filipinos. Furthermore, alien
in the preceding Article shall be
Corporations cannot operate for more than
automatically terminated by the recording of
50 years. (Art. 12 Sec. 11, 1987 Constitution)
the affidavit of reappearance of the absent
spouse, unless there is a judgment annulling
the previous marriage or declaring it void ab
(viii) Absence
initio.
Art. 390. After an absence of seven years, it
A sworn statement of the fact and
being unknown whether or not the absentee
circumstances of reappearance shall be
still lives, he shall be presumed dead for all
recorded in the civil registry of the residence
purposes, except for those of succession.
of the parties to the subsequent marriage at
The absentee shall not be presumed dead for the instance of any interested person, with
the purpose of opening his succession till due notice to the spouses of the subsequent
after an absence of ten years. If he marriage and without prejudice to the fact of
disappeared after the age of seventy-five reappearance being judicially determined in
years, an absence of five years shall be case such fact is disputed.
sufficient in order that his succession may be
opened.
(ix) Insolvency and Trusteeship
Art. 391. The following shall be presumed
dead for all purposes, including the division of Art. 1381. The following contracts are
the estate among the heirs:
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rescissible: lawyers, with respect to the property and


rights which may be the object of any
(1) Those which are entered into by guardians
litigation in which they may take part by
whenever the wards whom they represent
virtue of their profession.
suffer lesion by more than one-fourth of the
value of the things which are the object (6) Any others specially disqualified by law
thereof;
(x) Gender
(2) Those agreed upon in representation of
absentees, if the latter suffer the lesion Art. 403. Notwithstanding the provisions of
stated in the preceding number; the preceding article, a daughter above
(3) Those undertaken in fraud of creditors twenty-one but below twenty-three years of
when the latter cannot in any other manner age cannot leave the parental home without
collect the claims due them; the consent of the father or mother in whose
company she lives, except to become a wife,
(4) Those which refer to things under or when she exercises a profession or calling,
litigation if they have been entered into by the or when the father or mother has contracted
defendant without the knowledge and a subsequent marriage.
approval of the litigants or of competent
judicial authority; Note: Expressly repealed by Art. 254, FC
(5) All other contracts specially declared by
law to be subject to rescission.
(xi) Physical Incapacity/ Disease
Art. 45. A marriage may be annulled for any
Art. 1491. The following persons cannot of the following causes, existing at the time of
acquire by purchase, even at a public or the marriage:
judicial auction, either in person or through
the mediation of another: (5) That either party was physically incapable
of consummating the marriage with the
(1) The guardian, the property of the person or other, and such incapacity continues and
persons who may be under his guardianship; appears to be incurable; or
(2) Agents, the property whose (6) That either party was afflicted with a
administration or sale may have been sexually-transmissible disease found to be
entrusted to them, unless the consent of the serious and appears to be incurable.
principal has been given;
(3) Executors and administrators, the
property of the estate under administration; Art. 46. Any of the following circumstances
shall constitute fraud referred to in Number 3
(4) Public officers and employees, the of the preceding Article:
property of the State or of any subdivision
thereof, or of any government-owned or (3) Concealment of sexually transmissible
controlled corporation, or institution, the disease, regardless of its nature, existing at
administration of which has been intrusted to the time of the marriage.
them; this provision shall apply to judges and
government experts who, in any manner
whatsoever, take part in the sale; Art. 820. Any person of sound mind and of
the age of eighteen years or more, and not
(5) Justices, judges, prosecuting attorneys, blind, deaf or dumb, and able to read and
clerks of superior and inferior courts, and write, may be a witness to the execution of a
other officers and employees connected with will mentioned in Article 805 of this Code.
the administration of justice, the property and
rights in litigation or levied upon an execution
before the court within whose jurisdiction or F. DOMICILE AND RESIDENCE OF
territory they exercise their respective PERSON
functions; this prohibition includes the act of
acquiring by assignment and shall apply to For Natural Persons:
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The place of their habitual residence (Art. 50) is a clear proof of abandonment,
domicile of origin subsists
[Romualdez-Marcos vs. Comelec
For Juridical Persons: (1995)]
The place where their legal representation is Foundlings cannot be considered stateless
established, or where they exercise their and citizenship is not required for domicile
primary functions, unless there is a law or [Poe-llamanzares vs COMELEC (2016)]
other provision that fixes the domicile (Art.
A house is not necessary to establish domicile
51)
[Jalosjos vs COMELEC (2012)]

Domicile vs. Residence


While domicile is permanent (there is intent
to remain), residence is temporary and may
be changed anytime (there is no necessary
intent to remain).

Requisites of Domicile [Poe Llamanzares v.


COMELEC (2016)]
(1) Residence or bodily appearance in a new
locality
(2) Intention to remain there permanently
(animus manendi)
(3) An intention to abandon the old domicile
(animus non revertendi)
There must be animus manendi coupled with
animus non revertendi. One must have actual
change of domicile and a bona fide intention
to establish a new residence.

Kinds of Domicile
(1) Domicile of Origin
(a) Domicile of parents of a person at the
time he was born.
(1) Domicile of Choice
(a) Domicile chosen by a person,
changing his domicile of origin.
(b) Domicile where he intends to remain
(animus revertendi).
(c) A 3rd requisite is necessary –
intention not to return to one’s
domicile as his permanent place.
(1) Domicile by Operation of Law (i.e., Article
69, domicile of minor)
(a) A married woman does not lose her
domicile to her husband. Unless there
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III. Family Code IV. Marriage And


A. EFFECT AND RETROACTIVITY Personal Relationship
Art. 255. This Code shall have retroactive Between Spouses
effect insofar as it does not prejudice or
impair vested or acquired rights in A. CONCEPT OF MARRIAGE
accordance with the Civil Code or other laws.
Art. 1, FC. Marriage is a special contract of
permanent union between a man and a
The Family Code took effect on August 3, woman entered into in accordance with law
1988. for the establishment of conjugal and family
B. REPEAL AND AMENDMENT life. It is the foundation of the family and an
inviolable social institution whose nature,
Art. 254. If any provision of this Code is held consequences, and incidents are governed by
invalid, all the other provisions not affected law and not subject to stipulation, except
thereby shall remain valid. that marriage settlements may fix the
property relations during the marriage within
the limits provided by this Code.
1987 Constitution Article XV, Section 2.
Marriage, as an inviolable social institution,
is the foundation of the family and shall be
protected by the State.

Marriage is an institution, in the maintenance


of which in its purity the public is deeply
interested. It is a relation for life and the
parties cannot terminate it at any shorter
period by virtue of any contract they may
make .The reciprocal rights arising from this
relation, so long as it continues, are such as
the law determines from time to time, and
none other. [Goitia vs Campos Rueda (1916)]
B. AGREEMENTS PRIOR TO MARRIAGE
Extrajudicial dissolution of the conjugal
partnership without judicial approval is void.
[Espinosa vs Omana (2011)]
Mere breach of promise to marry is not an
actionable wrong. But to formally set a
wedding and go through all the above-
described preparation and publicity, only to
walk out of it when the matrimony is about to
be solemnized, is quite different. This is
palpably and unjustifiably contrary to good
customs for which defendant must be held
answerable in damages in accordance with
Article 21 aforesaid. [Wassmer vs Velez (1964)]
Article 21 may be applied in a breach of
promise to marry where the woman is a
victim of moral seduction. [Baksh vs CA
(1993)]

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The essential feature is seduction, that in law instead makes the party responsible for such
is more than mere sexual intercourse, or a irregularity civilly, criminally or
breach of a promise of marriage; it connotes administratively liable. (Art. 4, FC)
essentially the idea of deceit, enticement,
(i) Essential Requisites
superior power or abuse of confidence on the
part of the seducer to which the woman has (1) Gender
yielded. [Tanjanco v. CA (1966) quoting US v
N.B.: The best source for citing the
Buenventura]
requirement of male/female is still statutory,
Maintaining intimate sexual relations with as provided explicitly in the Family Code.
another for a whole year is incompatible with
Changing of sex in one’s birth certificate on
the idea of seduction. [Tanjanco v. CA (1966)]
the basis of sex reassignment shall be
C. REQUISITES denied; otherwise, it would result in
confusion and would allow marriage between
C.1. KINDS OF REQUISITES AND EFFECTS persons of the same sex which is in defiance
OF NON-COMPLIANCE of the law, as marriage is a union between a
man and a woman.[Silverio v. Republic
Essential Requisites Formal Requisites (Art.
(2007)]
(Art. 2) 3)
But when the change in sex happens
Legal Capacity of Authority of naturally, as when the person has Congenital
the contracting solemnizing officer Adrenal Hyperplasia (CAH) or is “biologically
parties, who must or naturally intersex,” the determining factor
be a male and a in their gender classification would be what
female they, having reached the age of majority, with
good reason thinks is their sex. Change in
Consent (of the A valid marriage name and sex as registered is here allowed.
parties) freely given license [Republic v. Cagandahan (2008)]
in the presence of a (2) Age
(subject to exceptions)
solemnizing officer.
Legal Capacity (Art. 5)

Marriage Ceremony Male or female 18 years old and above, not


under any of the impediments mentioned in
Art. 37 (incestuous marriages) & Art. 38
Exceptions for a valid marriage license: (marriages against public policy) may
(1) Marriages in articulo mortis or when one contract marriage.
or both parties are at the point of death, Limited Emancipation: If you are between 18
(2) Marriage in isolated places with no to 21 years old, parental consent is needed to
available means of transportation, marry but prior marriage emancipates you. If
no parental consent is obtained, it makes the
(1) Marriage among Muslims or other ethnic marriage voidable (Art. 45, FC). The party
cultural communities, who may file for annulment is the party who
Marriages of those who have lived together contracted marriage without parental
as husband and wife without any legal consent or the parent/guardian of the party
impediment for at least 5 years aged 18-21 (Art. 47, FC).
Effect of absence of ESSENTIAL requisites (3) Consent freely given
Consent here refers to the consent of the
Absence Defect or Irregularity contracting parties; not of the
parent/guardian in those cases where such
Effect VOID VOIDABLE consent is required (when either party is
between 18 to 21 years of age).
Note: An irregularity in a FORMAL requisite Absence:
will not affect the validity of the marriage and
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A marriage entered into by a person whose (c) Presence of at least two witnesses of
real intent is to avoid prosecution for rape is legal age. (Art. 3)
void for total lack of consent. The accused did
(d) The declaration shall be contained in the
not intend to be married. He merely used
Marriage Certificate. (Art. 6)
such marriage to escape criminal liability.
[People v. Santiago, (1927)] (e) Marriage certificate shall be signed by the
contracting parties and their witnesses
Defect:
and attested by the solemnizing officer.
Art. 45, FC. A marriage may be annulled for (Art. 6)
any of the following causes existing at the N.B.: In a marriage in articulo mortis, when
time of the marriage: xxx (3) that the consent one or both parties are unable to sign the
of either party was obtained by fraud, unless marriage certificate, it shall be sufficient for
such party afterwards, with full knowledge of one of the witnesses to write the name of said
the facts constituting the fraud, freely party, which shall be attested by the
cohabited with the other as husband and solemnizing officer. (Art. 6, par. 2)
wife.
Places where marriage shall be publicly
solemnized:
Fraud here refers to matters which relate to
the marital relation: (a) Chambers of the judge or in open court
(a) Non-disclosure of previous conviction by (b) Church, chapel, or temple
final judgment of a crime involving moral (c) Office of the consul-general, consul, or
turpitude; vice-consul (Art. 8)
(b) Concealment of pregnancy by another Exceptions:
man;
(a) Marriages performed in articulo mortis or
(c) Concealment of a sexually transmitted in remote places. (Art. 29)
disease;
(b) Where both parties request in writing that
(d) Concealment of drug addiction, marriage be solemnized at a place
alcoholism, lesbianism, or homosexuality designated by them.
(Art. 46, FC)
N.B.: Non-compliance with this requirement
(ii) Formal Requisites does not invalidate the marriage (premise:
(1) Ceremony more witnesses = more people can notify
officer of impediments to marriage).
Marriage Ceremony
(2) Authority of the Solemnizing Officer
No prescribed form or religious rite for the
solemnization of marriage is required. (Art. 6) Who may solemnize marriage:
The couple's written agreement where they Normal Circumstances
declare themselves as husband and wife,
signed by them before a judge and two (1) Incumbent member of the Judiciary,
capable witnesses, even though it was within his jurisdiction. (Art. 7)
independently made by them, still counts as
a valid ceremony. [Martinez v. Tan, (1909)]
(2) Priest, Rabbi, Imam or Minister of any
Minimum requirements prescribed by law: Church or Religious Sect. Must be:
(a) Appearance of contracting parties (a) Duly authorized by his church or
personally before the solemnizing officer religious sect
(Art. 3)
(b) Registered with the civil registrar
(b) Personal declaration that they take each general
other as husband and wife. (Art. 3)
(c) Acting within the limits of the written
authority granted to him by his

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church or religious sect. that gives the solemnizing officer the


authority to solemnize a marriage. [Aranes v
(d) At least one of the contracting Occiano (2002)].
parties belongs to the solemnizing
officer’s church or religious sect. (Art. (3) License required
7) GENERAL RULE: License required, which is
issued by local registrar of city or municipality
(3) Municipal and City Mayors (LGC sec. 444- where either contracting party habitually
455) resides (Art. 9). Each contracting party should
file separately. (Art. 11)
RA 10354, Sec 15 – Certificate of Compliance –
Articulo Mortis No marriage license shall be issued by the
Local Civil Registrar unless the applicants
present a Certificate of Compliance issued for
(1) Ship Captain or Airplane Chief may
free by the local Family Planning Office
solemnize a marriage in articulo mortis
certifying that they had duly received
between passengers or crew members
adequate instructions and information on
(Art. 7, 31)
responsible parenthood, family planning,
breastfeeding, and infant nutrition.
(1) A Military commander of a unit may
solemnize marriages in articulo mortis Where Valid: License valid in any part of the
between persons w/in the zone of Philippines
military operation. (Art. 7, 32) Period of Validity: It will be valid for 120 days
from date of issue, automatically cancelled at
Marriages Abroad the expiration of such period.
Marriages celebrated without a marriage
(1) Consul-general, consul or vice-consul license before the effectivity of the Family
may solemnize marriages between Code are void ab initio as marriage license
Filipino citizens abroad. (Art. 7, 10) was an essential requisite in the Civil Code.
[Kho v. Republic (2016)]
A marriage can be held outside the judge’s
License obtained by false affidavit [of having
chambers or courtroom only in the following
lived together as husband and wife for 5
instances:
years] will not be considered a defect but
(1) at the point of death total absence of license, rendering their
marriage void ab initio. [De Castro v. Assidao-
(2) remote places in accordance with Art. 29
De Castro (2008)]
(3) upon request of both parties in writing in a
(a) Special Situations
sworn statement to this effect. [Navarro v.
Domagtoy (1996)] (i) Anyone between 18-21 years old who
has not yet been emancipated must
But where a judge solemnizes a marriage
present the written consent that was
outside his jurisdiction, there is a resultant
given by his or her parent or
irregularity in the formal requisite laid down
guardian. (Art. 14)
in Article 3, which while it may not affect the
validity of the marriage, may subject the (ii) Anyone between 21-25 must ask for
officiating official to administrative liability. advice from his or her parents or
[Navarro v. Domagtoy (1996); Aranes v. guardians. If the advice wasn’t
Occiano (2002)] obtained, the marriage license will
only be released 3 months after the
A marriage which preceded the issuance of
publication of the application. (Art.
the marriage license is void and the
15)
subsequent issuance of such license cannot
render valid the marriage. Except in cases
provided by law, it is the marriage license
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(b) Foreign National (c) The fact of absence of legal impediment


between the parties must be present at
When either or both parties are foreign
the time of marriage;
nationals: Certificate of legal capacity to
contract marriage, issued by a diplomatic or (d) The parties must execute an affidavit
consular official, shall be submitted before a stating that they have lived together for
marriage license can be obtained (Art. 21) at least five years [and are without legal
impediment to marry each other]; and
Stateless persons or refugees from other
countries: Affidavit stating circumstances (e) The solemnizing officer must execute a
showing capacity to contract marriage, sworn statement that he had ascertained
instead of certificate of legal capacity (Art. 21) the qualifications of the parties and that
he had found no legal impediment to
(c) Exceptions
their marriage. [Borja-Manzano vs. Judge
(i) Marriage in articulo mortis (Art. 27) Sanchez (2001)]
1. The marriage may be solemnized (4) Marriage license
without the necessity of a
Absence and irregularity of marriage license
marriage license.
and contract
2. It remains valid even if ailing party
There is a presumption of regularity of official
survives.
acts, and the issuance of the Civil Registrar of
(ii) Between passengers or crew members a Certificate of Due Search and Inability to
in a ship or airplane (Art. 31) Find the application for a marriage license
certifies its inexistence, rendering the
(iii) Persons within a military zone (Art. 32)
marriage void. [Republic v. CA and Castro
(iv) Marriage in remote and inaccessible (1994)]
places (Art. 28)
Before a marriage can be solemnized, a valid
(v) Marriages by Muslims and Ethnic marriage license must be presented first,
cultural minorities provided they are otherwise, it is void. [Moreno v. Bernabe
solemnized in accordance with their (1995)]
customs, rites or practices. (Art. 33)
Non-existence of a marriage contract will not
(vi) Marriage by parties who have overthrow the presumption of a valid
cohabited for at least 5 years without marriage where all the requisites for its
any legal impediment to marry each validity have been complied with. [People v.
other. (Art. 34, Ninal vs. Badayog Borromeo (1984)]
(2000))
(5) Marriage Certificate
Note: A false affidavit of having lived
Where parties declare that they take each
together for 5 years as husband and wife
other as husband and wife; contains the ff:
cannot be considered as a mere
irregularity in the formal requisites of (a) Full name, sex, age of party
marriage but a complete absence,
(b) Citizenship, religion, habitual residence
rendering their marriage void ab initio.
[De Castro v. Assidao-De Castro (2008)] (c) Date and precise time of celebration of
marriage
Requisites for the 5-year cohabitation to be
valid for the exemption from acquiring a (d) That marriage license was properly
marriage license issued (except in marriages of exceptional
character)
(a) The man and woman must have been
living together as husband and wife for at (e) That parental consent was secured, when
least five years before the marriage; required
(b) The parties must have no legal (f) That requirement as to parental advice
impediment to marry each other; was complied with, when required

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(g) That parties have entered into marriage Lex Nationalii – Laws Lex loci
settlements, if any (Art. 22) relating to family celebrationis-if valid
N.B.: Not an essential or formal requisite rights and duties, or to where celebrated,
without which the marriage will be the status, condition, then valid
void[Madridejo v. de Leon (1930)] and legal capacity of everywhere; forms
persons are binding of contracting
Best evidence that a marriage does exist. upon Phil citizens marriage are to be
[Tenebro v. CA (2004)] even though living regulated by the law
D. LAW GOVERNING VALIDITY OF abroad (Art. 15) where it is
MARRIAGES ABROAD celebrated. (Art. 26)
D.1 GENERAL RULE IN CONTRACTS Foreign marriages Foreign marriages
As to form: Governed by the laws of the void under Phil law may be void under
country in which they were executed (NCC Art. due to lack of an Phil law due to
17) essential requisite, absence of a formal
even if valid under requisite under
As to substantive requirements: Laws relating foreign laws, will not foreign laws.
to family rights and duties, or to the status, be recognized.
condition and legal capacity of persons,
prohibitive laws regarding the person, his or
her property, those which have for their object Proof of Foreign Marriage in order that it may
public order, public policy and good customs be upheld:
bind all Filipinos regardless of location. (NCC (1) Provisions of the foreign law
Art. 15, 17)
(2) Celebration of the marriage in
accordance with said provisions
D.2 MARRIAGES CELEBRATED ABROAD D. 3 FOREIGN DIVORCES
General Rule: Marriages solemnized abroad (1) Those obtained by Filipino citizens are
in accordance with the laws in force in that void under Philippine law.
country shall be valid in the Philippines. (Art
26, par.1) (2) If the foreign spouse obtains a valid
divorce decree abroad capacitating
Exceptions: him/her to remarry, the Filipino spouse
(1) Marriage between persons below 18 years shall have capacity to remarry under
old (Art. 35(1)) Philippine law. (Art. 26, par.2)
(2) Bigamous or polygamous marriage (Art. Marriages dissolved by foreign judgment
35(4)) Aliens may obtain divorces abroad, which
(3) Mistake in identity (Art. 35 (5)) may be recognized in the Philippines,
provided they are valid according to their
(4) Marriages void under Article 53 (Art. 35 national law. The marriage tie when thus
(6)) severed as to one party, ceases to bind
(5) Psychological incapacity (Art. 36) either. [Van Dorn vs Romillo (1985)]
(6) Incestuous marriages (Art. 37) A marriage between two Filipinos cannot be
dissolved even by a divorce obtained abroad,
(7) Marriage void for reasons of public policy because of Articles 15 and 17 of the Civil Code.
(Art. 38) [Garcia vs Recio (2001)]
Essential requisites Formal requisites In mixed marriages involving a Filipino and a
foreigner, Article 26 of the Family Code
Inherent in the parties, Requirements allows the former to contract a subsequent
carried everywhere independent of the marriage in case the divorce is (1) validly
parties obtained abroad by the alien spouse and (2)
is of the type that legally dissolves the
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marriage and capacitates him or her to owned in common, without the consent of the
remarry. [Garcia vs Recio (2001)] other, until after the termination of their
A divorce obtained abroad by a couple, who cohabitation.
are both aliens, may be recognized in the When only one of the parties to a void
Philippines, provided it is consistent with marriage is in good faith, the share of the
their respective national laws. [Garcia vs party in bad faith in the co-ownership shall be
Recio (2001)] forfeited in favor of their common children. In
The citizenship of the spouses at the time of case of default of or waiver by any or all of the
the divorce determines their capacity to common children or their descendants, each
obtain a valid divorce. [Quita v. Dandan vacant share shall belong to the respective
(1998)] surviving descendants. In the absence of
descendants, such share shall belong to the
Courts will only determine (1) whether the innocent party. In all cases, the forfeiture
foreign judgment is inconsistent with an shall take place upon termination of the
overriding public policy in the Philippines; cohabitation.
and (2) whether any alleging party is able to
prove an extrinsic ground to repel the foreign Art. 148. In cases of cohabitation not falling
judgment, i.e. want of jurisdiction, want of under the preceding Article, only the
notice to the party, collusion, fraud, or clear properties acquired by both of the parties
through their actual joint contribution of
mistake of law or fact. If there is neither
inconsistency with public policy nor adequate money, property, or industry shall be owned
proof to repel the judgment, Philippine courts by them in common in proportion to their
should, by default, recognize the foreign respective contributions. In the absence of
proof to the contrary, their contributions and
judgment as part of the comity of nations.
[Fujiki vs Marinay (2013)] corresponding shares are presumed to be
equal. The same rule and presumption shall
apply to joint deposits of money and
evidences of credit.
E. COMMON-LAW MARRIAGES
If one of the parties is validly married to
Art. 147. When a man and a woman who are
another, his or her share in the co-ownership
capacitated to marry each other, live
shall accrue to the absolute community or
exclusively with each other as husband and
conjugal partnership existing in such valid
wife without the benefit of marriage or under
marriage. If the party who acted in bad faith
a void marriage, their wages and salaries
is not validly married to another, his or her
shall be owned by them in equal shares and
shall be forfeited in the manner provided in
the property acquired by both of them
the last paragraph of the preceding Article.
through their work or industry shall be
governed by the rules on co-ownership. The foregoing rules on forfeiture shall
likewise apply even if both parties are in bad
In the absence of proof to the contrary,
faith.
properties acquired while they lived together
shall be presumed to have been obtained by
Though there is no technical marital
their joint efforts, work or industry, and shall
partnership between person living maritally
be owned by them in equal shares. For
without being lawfully married, nevertheless
purposes of this Article, a party who did not
there is between them an informal civil
participate in the acquisition by the other
partnership which would entitle the parties to
party of any property shall be deemed to have
an equal interest in property acquired by their
contributed jointly in the acquisition thereof if
joint efforts [Lesaca vs Lesaca (1952)]
the former's efforts consisted in the care and
maintenance of the family and of the
household.
F. VOID AND VOIDABLE MARRIAGES
Neither party can encumber or dispose by
Presumption of Marriage
acts inter vivos of his or her share in the
property acquired during cohabitation and

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(1) Presumption in favor of a valid marriage Executive Order 227)


(Art 220, CC)
(2) The presumption that a man and a (i) Absence of Requisites
woman deporting themselves as husband Art. 4(1): The absence of any essential or
and wife have entered into a lawful formal requisites shall render the marriage
contract of marriage is satisfactory if void ab initio, except as stated in Article 35
uncontradicted. (Sec. 3 (aa), Rule 131, (a).
ROC)
Art. 5: Any male or female of the age of
(3) In marriages of exceptional character, the eighteen years or upwards not under any of
existence of the marriage is presumed, the impediments mentioned in Articles 37
even in the total absence of a marriage and 38, may contract marriage.
license. (Vda. De Jacob v CA (1999))
(4) If a marriage certificate is missing, and all (ii) Void from the Beginning (Art. 35)
means have not yet been exhausted to (a) Marriage where any party is below
find it, then the marriage is presumed to eighteen years of age even with the
exist (Sevilla v. Cardenas (2006)) consent of parents or guardians
Absence of a marriage certificate is not proof (b) Marriage solemnized by any person
of absence of marriage. To prove the fact of not legally authorized to perform
marriage, the following would constitute marriages unless such marriages
competent evidence: (1) the testimony of were contracted with either or both
witnesses to matrimony; (2) documentary parties believing in good faith that
photos or videos of the wedding; (3) the the solemnizing officer had legal
couple’s public cohabitation; and (4) birth authority to do so.
and baptismal certificates of children born
during the union. [Trinidad v CA (1998)] Note: One’s belief in good faith that
the solemnizing officer has the
required authority is a mistake of fact,
F. 1. VOID MARRIAGES and not of law.

Types of Void Marriages (c) Marriage solemnized without a valid


marriage license, except in marriages
(1) Absence of any formal/essential under exceptional circumstances
requisites
(d) Bigamous or polygamous marriages
(2) Bigamous and polygamous marriages not falling under Article 41 (Art. 41:
(3) Subsequent marriage, upon subsequent marriage by present
reappearance of spouse spouse who obtained a declaration of
presumptive death for absent spouse
(4) Bad faith of both spouses prior to the subsequent marriage)
(5) Psychologically Incapacitated spouse (e) There is a mistake as to the identity of
(6) Void subsequent marriages the other contracting party

(7) Incestuous Marriages (f) Subsequent marriages that are void


under Article 53 (Non-compliance
(8) Non-compliance with recording with Art. 52)
requirement after declaration of nullity
To be considered void on the ground of
Art. 39. The action or defense for the absence of a marriage license, the law
declaration of absolute nullity shall not requires that the absence of such marriage
prescribe. However, in case of marriage license must be apparent on the marriage
celebrated before the effectivity of this Code contract, or at the very least, supported by a
and falling under Article 36, such action or certification from the local civil registrar that
defense shall prescribe in ten years after this no such marriage license was issued to the
Code shall taken effect. (As amended by parties. [Alcantara v. Alcantara (2007)]

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(iii) Bigamous and Polygamous Marriages reappearance of the absent


spouse).
(a) Article 40 (No Judicial Declaration Of
Nullity) (b) Subsequent marriage due to
extraordinary absence where:
A person entered into a subsequent
marriage without first getting a (i) Absent spouse had been missing for 2
judicial declaration of nullity of the consecutive years;
first void marriage
(ii) There is danger of death under the
(b) Article 41 (Presumptive Death) circumstances set forth in Art. 391 CC
Failure of the spouse present to attendant to the disappearance;
obtain a judicial declaration of 1. Onboard vessel lost at sea
presumptive death before entering a voyage, airplane,
subsequent marriage
2. Armed forces in war, or
(c) Article 44 (Bad Faith of both spouses)
3. Danger of death under other
Both spouses entering a subsequent circumstances, existence not
marriage after presumptive death, known
who acted in bad faith
(iii) The spouse present had a well-
It is now settled that the fact that the founded belief that the missing person
first marriage is void from the is dead; and
beginning is not a defense in a
bigamy charge. As with a voidable (iv) Judicial declaration of presumptive
marriage, there must be a judicial death was secured (no prejudice to the
declaration of the nullity of a effect of the reappearance of the
marriage before contracting the absent spouse).
second marriage. [Mercado vs Tan Institution of a summary proceeding is not
(2000)] sufficient. There must also be a summary
The accused may still be charged judgment. (Balane)
with the crime of bigamy, even if Only the spouse present can file or institute a
there is a subsequent declaration of summary proceeding for the declaration of
the nullity of the second marriage, so presumptive death of the absentee.
long as the first marriage was still [Bienvenido v. CA (1994)]
subsisting when the second marriage
was celebrated. [Capili vs People While an action for declaration of death or
(2013)] absence under Rule 72, Section 1(m),
expressly falls under the category of special
(iv) Subsequent Marriage When One Spouse Is proceedings, a petition for declaration of
Absent presumptive death under Article 41 of the
Requirements for Subsequent Marriage to be Family Code is a summary proceeding, as
Valid When Prior Spouse is Absent (Art. 41): provided for by Article 238 of the same Code.
[Republic vs Granada (2012)]
(a) Subsequent marriage due to ordinary
absence where: The belief of the present spouse must be the
result of proper and honest to goodness
(i) Absent spouse had been absent inquiries and efforts to ascertain the
for 4 consecutive years; whereabouts of the absent spouse and
(ii) The spouse present had a well- whether the absent spouse is still alive or is
founded belief that absent already dead. This is drawn from
spouse is dead; and circumstances before and after the
disappearance and the nature and extent of
(iii) Judicial declaration of inquiries made. [Republic vs Granada (2012)]
presumptive death was secured
(no prejudice to the effect of the
Effect of Reappearance of Absent Spouse
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General Rule: The subsequent marriage As to effect Subsequent Upon


remains valid. on marriage is reappearance,
Exception: It is automatically terminated by subsequen automatically judicial
the recording of the affidavit of reappearance t marriage terminated by proceeding is
of the absent spouse at the instance of any the recording of necessary to
interested person, with due notice to the an affidavit of declare
spouses of the subsequent marriage. (Art. 42) reappearance marriage null
of the absent and void
Note: It is the recording of the affidavit of spouse
reappearance that automatically terminates
the subsequent marriage. Hence, if absentee
spouse reappears without recording affidavit As to Well founded Generally
of reappearance, then there is no legal effect. ground belief that the believed to be
Meanwhile, absentee spouse cannot remarry. absent spouse dead
(Tolentino) is dead

Exception to Exception: If there is a judgment


Related Provisions
annulling the previous marriage or declaring
it void ab initio. (Art. 42) Art. 390, Civil Code. After an absence of 7
Good Faith: Period of absence for years, it being unknown whether or not the
presumptive death is MANDATORY thus absentee still lives, he shall be presumed
cannot be shortened by good faith and if be dead for all purposes, except for those of
done so will be void. This period is counted succession.
from when the party last heard from his/her The absentee shall not be presumed dead for
absentee spouse. [Jones v. Horiguela (1937)] the purpose of opening his succession till
Difference between Absence in the Civil Code after an absence of 10 years. If he
and Family Code disappeared after the age of 75 years, an
absence of 5 years shall be sufficient in order
Family Code Civil Code (Art. that his succession may be opened.
(Art. 41) 390) Art. 391, Civil Code. The following shall be
presumed dead for all purposes, including
As to 4 years under Absent for at the division of the estate among the heirs:
period normal least 7 years;
1. 1. A person on board a vessel lost during a
circumstances;
sea voyage, or an aeroplane which is missing,
2 years under who has not been heard of for four years since
4 years under
extraordinary the loss of the vessel or aeroplane;
extraordinary
circumstances 2. 2. A person in the armed forces who has
circumstances
taken part in war, and has been missing for
As to In order to Declaration of four years;
remarriage remarry, presumptive 3. A person who has been in danger of death
summary death is not under other circumstances and his existence
proceeding is necessary has not been known for four years.
necessary
N.B.: Although 7 years is required for the
As to who Can be The spouses presumption of death of an absentee in the
can instituted by themselves CC, the FC makes an exception for the
institute the spouse purpose of remarriage by limiting such
the action present, any requirement to 4 years.
interested
(v) Bad Faith of Both Spouses
party, and the
subsequent
spouse

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Art. 44. If both spouses of the subsequent (h) The trial court must order the prosecuting
marriage acted in bad faith, said marriage attorney or fiscal and the Solicitor
shall be void ab initio and all donations by General to appear as counsel for the
reason of marriage and testamentary state. No decision shall be handed down
dispositions made by one in favor of the other unless the Solicitor General issues a
are revoked by operation of law. certification. [Republic v Molina (1997)]
Refusal of husband to have sex was
(vi) Psychological Incapacity interpreted as psychological incapacity. “A
Contracted by any party who, at the time of man who can but won’t is psychologically
the celebration, was psychologically incapacitated” [Tsoi v. CA (1997)]
incapacitated to comply with the essential Psychological incapacity maybe established
marital obligations of marriage, even if such by the totality of the evidence presented.
incapacity becomes manifest only after its Personal medical examination could be
solemnization. (Art. 36) dispensed with. [Marcos v. Marcos (2000)]
There are 3 characteristics for determining There is no requirement that the respondent
psychological incapacity: gravity, antecedent, be medically examined first. [Republic v. San
and incurability. [Santos v. Bedia-Santos Jose (2007)]
(1995)]
“Pathological liar” considered as
Molina Doctrine in Psychological Incapacity psychological incapacity, Molina guidelines
(a) The burden of proof to show the nullity of met. [Antonio v. Reyes (2006)] Note: This case
the marriage belongs to the plaintiff. This also gave weight to the fact that the Church
is to be investigated by the OSG for annulled the marriage.
collusion. In the task of ascertaining the presence of
(b) The root cause of the psychological psychological incapacity as a ground for the
incapacity must be: (a) medically or nullity of marriage, the courts, which are
clinically identified, (b) alleged in the concededly not endowed with expertise in the
complaint, (c) sufficiently proven by the field of psychology, must of necessity rely on
experts, (d) clearly explained in the the opinions of experts in order to inform
decision. themselves on the matter, and thus enable
themselves to arrive at an intelligent and
(c) The incapacity must be proven to be
judicious judgment. [Kalaw v. Fernandez
existing at “the time of the celebration” of
(2015)]
the marriage.
The stringent requirements set forth by
(d) Such incapacity must also be shown to be
Molina should be relaxed and applied case-
medically or clinically permanent or
to-case. To require the allegation of the root
incurable.
cause of psychological incapacity by an
(e) Such illness must be grave enough to accredited psychologist may prove too
bring about the disability of the party to expensive for the parties. But where the
assume the essential obligations of parties had full opportunity to present expert
marriage. opinions, such will be weighed by the Court in
its decision. [Ting v. Ting (2009)]
(f) The essential marital obligations must be
those embraced by Articles 68 up to 71 of (vii) Incestuous Marriages
the Family Code as regards the husband
Article 37 (Incestuous):
and wife as well as Articles 220, 221, and
225 of the same Code in regard to (a) Between ascendants and descendants of
parents and their children. any degree, legitimate or illegitimate
(g) Interpretations given by the National (b) Between brothers and sisters, whether full
Appellate Matrimonial Tribunal of the or half blood, legitimate or illegitimate
Catholic Church in the Philippines, while (viii) Against Public Policy
not controlling/decisive, should be given
great respect by our courts. Article 38 (Against Public Policy):
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(a) Between collateral blood relatives, Previous marriage declared void ab initio or
legitimate or illegitimate, up to the fourth annulled
civil degree.
The word “solely” in Art. 40 referred to
(b) Between step-parents and step-children. validating subsequent marriages but NOT to
limiting the purposes for which a judicial
N.B.: Stepbrothers and stepsisters can
declaration of nullity can be invoked.
marry because marriages between them
[Domingo v. CA (1993)] N.B.: Separation of
are not among those enumerated in
property is also a valid purpose for filing for a
Article 38.
judicial declaration of nullity.
(c) Between parents-in-law and children-in-
Under the CC, no judicial decaration for
law.
nullity of previous marriage was required to
(d) Between adopting parent and adopted contract a subsequent marriage. [People v.
child. Mendoza (1954)]
(e) Between the surviving spouse of the It is the law effective at the time of the
adopting parent and the adopted child. second/subsequent marriage which controls
(i.e. Civil Code or FC). Thus:
(f) Between the surviving spouse of the
adopted child and the adopter. (1) Even if the judge’s first marriage
contracted in 1965 was voidfor not having a
(g) Between an adopted child and a
marriage license, the requirement for a
legitimate child of the adopter.
judicial declaration of nullity in Art. 40 still
(h) Between adopted children of the same applies because his subsequent marriage was
adopter. contracted in 1991. [Atienza v. Brillantes,
(i) Between parties where one, with the (1995)]
intention to marry the other, killed that (2) Where both marriages were contracted
other person's spouse, or his or her own prior to the effectivity of the FC, the
spouse. requirement of Art. 40 does not apply to the
Relationships outside of Art. 37 and 38 which second marriage where a right is already
are not impediments to marriage: brother-in- vested and on which the FC cannot have
law with sister-in-law, stepbrother with retroactive effect. [Apiag v. Cantero, (1997)]
stepsister, guardian with ward, adopted with Article 43 and 44 (Effects of Termination of
illegitimate child of the adopter, adopted son Bigamous Marriage under Art. 42)
of the husband with adopted daughter of the
Art. 43:
wife, parties who have been convicted of
adultery (1) Children of subsequent marriage –
conceived prior to its termination
(ix) Non-compliance with Recording
considered legitimate; custody and
Requirement after Declaration of Nullity
support decided by court in a proper
Article 53 (Non-Recording): proceeding.
Subsequent marriage of spouses, where the (2) Property Regime – dissolved and
requirements of recording under Art. 52 have liquidated (party in bad faith shall forfeit
not have been complied with, shall be null his/her share in favor of the common
and void. children or if there are none, children of
the guilty spouse by a previous marriage,
Art. 52. The judgment of annulment or of
and in case there are none, to the
absolute nullity of the marriage, the partition
innocent spouse).
and distribution of the properties of the
spouses and the delivery of the children's (3) Donation propter nuptias – remains valid,
presumptive legitimes shall be recorded in (but if the donee contracted marriage in
the appropriate civil registry and registries of bad faith, donations are revoked by
property; otherwise, the same shall not affect operation of law)
third persons.

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(4) Insurance benefits – innocent spouse may Art. 52. The judgment of annulment or of
revoke designation of guilty party as absolute nullity of the marriage the partition
beneficiary, even if such designation is and distribution of the properties of the
stipulated as irrevocable. spouses and the delivery of the children's
(5) Succession Rights – Party in bad faith presumptive legitimes shall be recorded in
shall be disqualified to inherit from the the appropriate civil registry and registries of
innocent spouse, whether testate or property; otherwise the same shall not affect
intestate. third persons.
Article 44 (Donations):
(1) The previous marriage should be
If both spouses of the subsequent marriage judicially declared void or annulled (final
acted in bad faith, all donations by reason of judgment) [Terre v. Terre (1992), Atienza v.
marriage and testamentary dispositions Brillantes (1995)]; Wiegel v. Sempio-Dy
made by one party in favor of the other are (1986)]
revoked by operation of law.
(2) Must comply with the requirements of
Who may file the petition for nullity of void Art. 52.
marriages?
Safeguard against collusion and No
General Rule: Only the husband or wife may confession of judgment
file the petition. (AM No. 02-11-10 SC, Sec. 2a)
Art. 48 (2):In the cases referred to in the
Specifically, A.M. No. 02-11-10-SC extends preceding paragraph, no judgment shall be
only to marriages covered by the Family Code, based upon a stipulation of facts or
which took effect on August 3, 1988, but, confession of judgment.
being a procedural rule that is prospective in
application, is confined only to proceedings Stipulation of Facts: An admission by both
commenced after March 15, 2003. [Ablaza v. parties after agreeing to the existence of any
Republic (2010)] of the grounds or facts that would constitute
a void/voidable marriage
Exceptions:
Confession of judgment: The admission by
(1) Nullity of marriage cases commenced one party admitting his/her fault to cause the
before effectivity of A.M. No. 02-11-10-SC invalidity of the marriage.
(2) Marriages celebrated during the Although the admission of guilt of the wife
effectivity of the Civil Code. [Carlos v. constitutes a confession of judgment, the
Sandoval (2008)] husband was also able to present other
However, the absence of a provision in the evidence to support the allegation. Hence,
Civil Code cannot be construed as a license there was no collusion. [Ocampo v.
for any person to institute a nullity of Florenciano (1960)]
marriage case. Such person must appear to Participation of the OSG
be the party who stands to be benefited or
injured by the judgment in the suit, or the The obvious intent of the AM 02-11-10-SC was
party entitled to the avails of the suit. [Carlos to require the OSG to appear as counsel for
vs Sandoval (2008)] the State in the capacity of a defensor vinculi
(i.e., defender of the marital bond) to oppose
Procedure in attacking a void marriage petitions for, and to appeal judgments in
General Rule: Void Marriages may be favor of declarations of nullity of marriage
attacked collaterally or directly. under Article 36 of the Family Code, thereby
ensuring that only the meritorious cases for
Exception: A person in a void marriage must the declaration of nullity of marriages based
first file for a declaration of nullity in order to on psychological incapacity-those sufficiently
subsequently marry evidenced by gravity, incurability and juridical
Requisites for valid remarriage: antecedence-would succeed. [Mendoza vs
Republic (2012)]

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No Motion to Dismiss Tender years presumption: Children below 7


years age will be in the custody of the mother.
AM 02-11-10-SC Sec.7 prohibits the filing of a
motion to dismiss in actions for annulment of Presumptive legitimes, computed as of the
marriage. [Aurelio vs Aurelio (2011)] date of the final judgment, shall be delivered
in cash, property or sound securities:
Effect of pendency of action for declaration of
nullity: (1) Unless the parties, by mutual agreement
judicially approved, had already provided
(1) The court shall provide for the support of
for such (Art. 51(1))
the spouses,
(2) The children/guardian/trustee of
(2) The custody and support of the common
property may ask for the enforcement of
children, giving paramount consideration
the judgment (Art. 51(2))
to their moral and material welfare, their
choice of parent with whom they wish to (3) The delivery of the presumptive legitimes
remain. shall not prejudice the ultimate
successional rights, but the value of the
(3) The court shall also provide for visitation
properties already received shall be
rights of other parent. (Art. 49)
considered as advances on their legitime
Effect of res judicata (Art. 51(3))
Suffice it to state that parties are bound not Generally, children born or conceived within
only as regards every matter offered and void marriages are illegitimate.
received to sustain or defeat their claims or
Exceptions:
demand but as to any other admissible
matter which might have been offered for (1) Children conceived or born before the
that purpose and of all other matters that judgment under Article 36 has become
could have been adjudged in that case. final and executory (Art. 54)
[Mallion vs Alcantara (2006)]
(2) Children conceived or born of subsequent
Effect of final judgment declaring nullity marriages under Article 53 (Art. 54)
The effects provided for by paragraphs (2), (3), F.2. VOIDABLE OR ANNULLABLE
(4) and (5) of Article 43 and by Article 44 MARRIAGE
shall also apply in the proper cases to
Article 14: In case either or both of the
marriages which are declared void ab initio or
contracting parties, not having been
annulled by final judgment under Articles 40
emancipated by a previous marriage, are
and 45 (Art. 50(1)).
between the ages of eighteen and twenty-
Final judgment in such cases shall provide one, In addition to the requirements of the
for: preceding articles:
(1) Liquidation, partition, and distribution of (1) Exhibit to the local civil registrar the
the properties of the spouses consent to their marriage of their father,
mother, surviving parent or guardian, or
(2) Custody and support of the common
persons having legal charge of them, in
children
the order mentioned
(3) Delivery of their presumptive legitimes
(2) Manifested in writing by the interested
UNLESS: such matters had been adjudicated party, who personally appears before the
in previous judicial proceedings (Art. 50(2)) proper local civil registrar, or
All creditors of the spouses/property regime (3) In the form of an affidavit made in the
shall be notified of the proceedings for presence of two witnesses and attested
liquidation (Art. 50(2 and 3)) before any official authorized by law to
In the partition, the conjugal dwelling and lot administer oaths
shall be adjudicated to the spouse with whom (4) The personal manifestation shall be
majority of the common children remain (Art. recorded in both applications for
102 and 129, Art. 50(4)) marriage license, and the affidavit, if one
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is executed instead, shall be attached to (i) 18 ≤ x < 21 without parental consent


said applications.
(ii) Ratified by party 18 or above but
(i) Grounds for Annulment below 21 upon free cohabitation upon
reaching 21.
Article 4 states that “xxx A defect in any of
the essential requisites shall render the In defending the requirement of parental
marriage voidable as provided in Article 45.” consent, the Court held that the State has
power to make adjustments in the
Article 45. A marriage may be annulled for constitutional rights of minors based on
any of the following causes, existing at the the following grounds: 1) the peculiar
time of the marriage: vulnerability of children, 2) to protect
(1) That the party in whose behalf it is sought minors from immature decision making
to have the marriage annulled was eighteen and prevent unstable marriages, 3) on
years of age or over but below twenty-one, the presumption that parents act in the
and the marriage was solemnized without best interests of their children in child
the consent of the parents, guardian or rearing. (Moe v. Dinkins, (US Case, 1981))
person having substitute parental authority (b) Insanity
over the party, in that order, unless after
attaining the age of twenty-one, such party (i) Mental incapacity or insanity is a vice
freely cohabited with the other and both of consent;
lived together as husband and wife; (ii) Can be ratified by cohabitation after
(2) That either party was of unsound mind, insanity is cured or during a lucid
unless such party after coming to reason, interval
freely cohabited with the other as husband (iii) Mere mental weakness is not a
and wife; ground for annulment, but if found
(3) That the consent of either party was grave enough, it may amount to
obtained by fraud, unless such party psychological incapacity.
afterwards, with full knowledge of the facts (iv) Intoxication, somnambulism where
constituting the fraud, freely cohabited with one had no mental capacity to give
the other as husband and wife; consent is equivalent to insanity
(4) That the consent of either party was (v) Must exist at the time of the
obtained by force, intimidation or undue celebration of the marriage. Insanity
influence, unless the same having that occurs after the celebration of
disappeared or ceased, such party thereafter marriage does not constitute a cause
freely cohabited with the other as husband for nullity [Katipunan v. Tenorio
and wife; (1937)]
(5) That either party was physically incapable (vi) Law presumes SANITY, burden of
of consummating the marriage with the proof on party alleging insanity
other, and such incapacity continues and
appears to be incurable; or (c) Fraud
(6) That either party was afflicted with a (i) Only those enumerated in Art. 46:
sexually-transmissible disease found to be 1. Non-disclosure of previous
serious and appears to be incurable. conviction by final judgment of a
crime involving moral turpitude
Action to Annul: Action in rem, concerns
2. Concealment by wife at the time
status of parties; res is relation between
of marriage, that she was
parties or marriage tie; jurisdiction depends
pregnant by another man
on nationality or domicile not the place of
celebration. 3. Concealment of STD regardless
of nature existing at time of
(a) Lack of parental consent
marriage

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4. Concealment of drug addiction, (v) May be ratified upon free


habitual alcoholism, cohabitation after knowledge of
homosexuality, lesbianism fraud.
existing at time of marriage
Art. 45 (6) STD Art. 46 (3) STD
5. Note: Recovery or rehabilitation
from STD, drug addiction, and
habitual alcoholism will NOT bar Ground for The concealing of the
action for annulment; the defect annulment STD is a ground for
is not the disease, but the fraud annulment
which vitiated consent.
Does not have to Must be concealed
6. Note: It is the concealment of be concealed
homosexuality, and not
homosexuality per se, that
Must be serious Need not be serious
vitiates the consent of the
and incurable nor incurable
innocent party. [Almelor v. RTC,
(2008)]
The STD itself is It is the concealment
(ii) No other misrepresentation or deceit the ground for that gives rise to the
of character, health, rank, fortune or annulment annulment
chastity shall constitute fraud.
(d) Force, intimidation, undue influence
(iii) Conviction of Crime: requisites are
(i) Force must be one as to prevent party
1. Moral turpitude
from acting as a free agent; will
2. Conviction destroyed by fear/compulsion
(iv) Concealment of Pregnancy (ii) Intimidation must be one as to
compel the party by a
1. Fraud against very essence of
reasonable/well-grounded fear of an
marriage; importance of
imminent and grave evil upon his
procreation of children; an
person/properties
assault to the integrity of the
union by introducing ALIEN (iii) Degree of intimidation: age, sex,
BLOOD condition of person borne in mind
2. If husband knew of pregnancy, (iv) Threat or intimidation as not to act as
the marriage cannot be annulled free agent;
on the ground of concealment
(v) May be ratified upon cohabitation
3. The woman was 7 months after force, intimidation, or undue
pregnant at the time she met influence has ceased or disappeared.
petitioner. He cannot claim that
(e) Impotency
the pregnancy was concealed
from him and that he was (i) Must exist at time of marriage, and
defrauded into marrying her. be continuous and incurable. If
[Buccat v. Buccat (1941)] incapacity can be remedied or is
removable by operation, not
4. But where the wife concealed the
annullable [Sarao v Guevarra (1940)]
fact that she was 4 months
pregnant during the time of the (ii) Physical condition - sexual
marriage and was “naturally intercourse with a person of the
plump,” Delizo could hardly be opposite sex is impossible, not mere
expected to know, by mere sterility
looking, whether or not she was
pregnant at the time of the (iii) Only the potent spouse can file the
marriage. [Aquino v. Delizo, action for annulment and he/she
(1960)] must not have been aware of the

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other’s impotency at the time of ordered confined in jail until she does
marriage (Sempio-Diy) so
1. If he/she was aware, it is implied (f) Sexually-transmissible disease serious
that he/she renounced and incurable
copulation by consenting to the
(i) Should exist at the time of the
marriage. (Tolentino)
marriage
(iv) When both spouses are impotent,
(ii) Should be found serious
marriage cannot be annulled because
neither spouse is aggrieved. (Sempio- (iii) Should appear to be incurable
Diy) (iv) Reason: danger to the health of
1. An impotent plaintiff could not spouse & offspring/s
have expected copulation with (v) Same as incurable impotency
the other spouse. (Tolentino)
(vi) Not subject to ratification: cannot be
(v) Potency is presumed; party who ratified or convalidated by
alleges impotency has burden of cohabitation:
proof [Jimenez v Canizares (1960)]
1. Affliction of STD is unknown to
(vi) REFUSAL of wife to be examined the other spouse (Balane)
DOES NOT PRESUME impotency
[Jimenez v Canizares (1960)] N.B.: If 2. The other spouse must also be
she continues to refuse the physical free from a similar STD. (Balane)
exam, she can be held in contempt &
Who may file, Prescription, Ratification

Ground Who can file Prescription Ratification


(Art. 45) (Art. 47) (Art. 47) (Art. 45)

Lack of Party 18 or above but Within 5 years after Free cohabitation after
parental below 21 attaining 21. attaining age of 21.
consent
Parent or guardian who Before party below 21
did not give consent reaches 21.

Insanity Sane spouse with no Any time before the death Free cohabitation of insane
knowledge of the other’s of either party party after insane party
insanity comes to reason

Legal guardian of insane


party

Insane party During lucid interval or


after regaining sanity, and
before death

Fraud Injured party (defrauded Within 5 years after Free cohabitation after
party) discovery of fraud having full knowledge of
fraud

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Force, Injured party Within 5 years after Free cohabitation after the
intimidation, disappearance of force, force or intimidation or
undue undue influence, or undue influence has
influence intimidation ceased or disappeared

Impotence Potent spouse Within 5 years after Cannot be ratified but


marriage action prescribes

STD Healthy party Within 5 years after Cannot be ratified but


marriage action prescribes

Marriages Not Subject to Ratification: cross-examined the plaintiff does not suffice to
comply with the mandatory requirement. [Corpuz
(1) One spouse is incurably impotent
v. Ochoterena, (2004)]
(2) One spouse has an incurable STD
Effects of Pending Decree of Annulment
Reason: Public policy and health. Although the
The Court shall provide for the support of spouses
action of to annul these marriages can prescribe
and support and custody of common children (Art.
(5 years).
49, FC). In determining which parent should have
Presence of Prosecutor custody of them, their moral and material welfare
shall be given paramount consideration. (Art. 49,
Art. 48. To prevent collusion between the parties,
FC) [Luna and Luna v. IAC (1985)]
fabrication or suppression of evidence, the
prosecuting attorney or fiscal shall appear on Effects of Decree of Annulment
behalf of the State.
(Same as Decree of Nullity)
In a legal separation or annulment case, the The effects provided for by paragraphs (2), (3), (4)
prosecuting attorney must first rule out collusion and (5) of Article 43 and by Article 44 shall also
as a condition sine qua non for further apply in the proper cases to marriages which are
proceedings. A certification by the prosecutor declared void ab initio or annulled by final
that he was present during the hearing and even judgment under Articles 40 and 45 (Art. 50(1)).

Comparative Table on Void and Voidable Marriages

Void Voidable

Nature No validity from the time of performance Valid until annulled

Susceptibility of Cannot be ratified Can be ratified


Ratification

Property Relation Only co-ownership; No ACP or CPG despite ACP or any other property regime
having entered into a marriage settlement in accordance with the marriage
settlement`

Status of Children Illegitimate under Art. 165 (with Art 36 and Art Children are legitimate if
53 as exceptions under Art. 54) conceived or born prior to the
decree

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Void Voidable

How Impugned (a) May be attacked directly or collaterally, but (a) Cannot be attacked
for the purpose of remarriage, a judicial collaterally
declaration of nullity is required
(b) Can be impugned even after death of the
(b) Cannot be impugned after the
parties
death of one of the parties

Who may A proper interested person (depending on the A party to the marriage
challenge validity dates of marriage and of filing of proceeding)

Susceptible to Does not prescribe Prescribes


Prescription

G. THE LAW ON SEPARATION OF THE shall, upon proper petition in a summary


SPOUSES proceeding, be given judicial authority to
administer or encumber any specific separate
G.1 SEPARATION IN FACT property of the other spouse and use the
Art. 239. When a husband and wife are fruits or proceeds thereof to satisfy the
separated in fact, or one has abandoned the latter’s share.
other and one of them seeks judicial Neither does separation in fact affect CPG
authorization for a transaction where the (Art. 127, FC), subject to the same exceptions.
consent of the other spouse is required by law
but such consent is withheld or cannot be Agreement to Separate
obtained, a verified petition may be filed in A notary public should not facilitate the
court alleging the foregoing facts. disintegration of a marriage and the family by
The petition shall attach the proposed deed, encouraging the separation of the spouses
if any, embodying the transaction, and, if and extrajudicially dissolving the conjugal
none, shall describe in detail the said partnership. [Espinosa vs Omana (2011)]
transaction and state the reason why the G.2 ABSOLUTE DIVORCE
required consent thereto cannot be secured.
In any case, the final deed duly executed by Article 26, par. 2 Where a marriage between a
the parties shall be submitted to and Filipino citizen and a foreigner is validly
approved by the court. celebrated and a divorce is thereafter validly
obtained abroad by the alien spouse
Art. 100. The separation in fact between capacitating him or her to remarry, the
husband and wife shall not affect the regime Filipino spouse shall have capacity to remarry
of absolute community except that: under Philippine law. (As amended by
(1) The spouse who leaves the conjugal home Executive Order 227)
or refuses to live therein, without just cause, If both parties are Muslims, there is a
shall not have the right to be supported; presumption that the Muslim Code or Muslim
(2) When the consent of one spouse to any law is complied with. If together with it or in
transaction of the other is required by law, addition to it, the marriage is likewise
judicial authorization shall be obtained in a solemnized in accordance with the Civil Code
summary proceeding; of the Philippines, whichever comes first is
the validating rite and the second rite is the
(3) In the absence of sufficient community merely ceremonial one. But, in this case, as
property, the separate property of both long as both parties are Muslims, this Muslim
spouses shall be solidarily liable for the Code will apply. [Zamoranos vs People (2011)]
support of the family. The spouse present

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One of the effects of irrevocable talaq, as well (a) Abandonment is not mere physical
as other kinds of divorce, refers to severance estrangement but also financial and
of matrimonial bond, entitling one to moral desertion. There must be an
remarry. [Zamoranos vs People (2011)] absolute cessation of marital
relations, duties, and rights with the
H. LEGAL SEPARATION intention of perpetual separation.
Note: The grounds for legal separation are [Dela Cruz. v. Dela Cruz (1968)]
exclusive. (Article 55) The death of one party in a legal separation
These must be filed within 5 years after case abates the action. This is because the
occurrence of cause (Article 57): death of either spouse automatically
dissolves the marriage. An action for legal
(1) Repeated physical violence or grossly
separation is also purely personal between
abusive conduct directed against the
the spouses. [Lapuz Sy v. Eufemio (1972)]
petitioner, a common child, or a child of
the petitioner; Acts of Violence according to RA 9262(as
grounds for legal separation under Art 55(1))
(2) Physical violence or moral pressure to
compel the petitioner to change religious (1) Causing physical harm to the woman or
or political affiliation; her child;
(3) Attempt of respondent to corrupt or (2) Threatening to cause the woman or her
induce the petitioner, a common child, or child physical harm;
a child of the petitioner, to engage in (3) Attempting to cause the woman or her
prostitution, or connivance in such child physical harm;
corruption or inducement;
(4) Placing the woman or her child in fear of
(4) Final judgment sentencing the imminent physical harm;
respondent to imprisonment of more
than six years, even if pardoned; (5) Attempting to compel or compelling the
woman or her child to engage in conduct
(5) Drug addiction or habitual alcoholism ; which the woman or her child has the
(6) Lesbianism or homosexuality of the right to desist from or desist from
respondent; conduct which the woman or her child
has the right to engage in, or attempting
(7) Contracting by the respondent of a
to restrict or restricting the woman's or
subsequent bigamous marriage, whether
her child's freedom of movement or
in the Philippines or abroad;
conduct by force or threat of force,
(8) Sexual infidelity or perversion; physical or other harm or threat of
physical or other harm, or intimidation
(a) Adultery is not a continuing crime; it
directed against the woman or child. This
is consummated at every moment of
shall include, but not limited to, the
carnal knowledge. Thus, every sexual
following acts committed with the
act is a ground for legal separation.
purpose or effect of controlling or
[People v. Zapata and Bondoc (1951)]
restricting the woman's or her child's
(b) A civil action for legal separation movement or conduct:
based on concubinage may proceed
(a) Threatening to deprive or actually
ahead of, or simultaneously with, a
depriving the woman or her child of
criminal action for concubinage;
custody to her/his family;
conviction is not a perquisite
[Gandionco v. Penaranda (1987)] (b) Depriving or threatening to deprive
the woman or her children of financial
(9) Attempt by the respondent against the
support legally due her or her family,
life of the petitioner; or
or deliberately providing the woman's
(10) Abandonment of petitioner by children insufficient financial support;
respondent without justifiable cause for
more than one year.
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(c) Depriving or threatening to deprive Grounds for denying legal separation (Article
the woman or her child of a legal 56):
right;
(1) Condonation by aggrieved party – after
(d) Preventing the woman in engaging in the commission of the offense; may be
any legitimate profession, express or implied.
occupation, business or activity or
 That plaintiff-husband and his wife
controlling the victim's own money or
agreed to go to the house of his cousin
properties, or solely controlling the
and there slept together as husband and
conjugal or common money, or
wife for two nights – all these facts have
properties;
no other meaning than that reconciliation
(6) Inflicting or threatening to inflict physical between them was effected and there
harm on oneself for the purpose of was condonation of the wife by the
controlling her actions or decisions; husband. This reconciliation occurred
almost 10 months after he came to know
(7) Causing or attempting to cause the
of her infidelity. [Bugayong v. Ginez
woman or her child to engage in any
(1957)]
sexual activity which does not constitute
rape, by force or threat of force, physical (2) Consent by aggrieved party to the
harm, or through intimidation directed commission of the offense – before the
against the woman or her child or her/his commission of the offense; may be
immediate family; express (e.g. written agreement, [Matubis
v. Praxedes (1960)] or implied
(8) Engaging in purposeful, knowing, or
reckless conduct, personally or through (3) Connivance between parties in the
another, that alarms or causes commission of the offense
substantial emotional or psychological
(4) Mutual guilt or Recrimination between
distress to the woman or her child. This
spouses in the commission of any ground
shall include, but not be limited to, the
for legal separation
following acts:
(5) Collusion between parties to obtain
(a) Stalking or following the woman or
decree of legal separation
her child in public or private places;
(6) Prescription of action for legal separation
(b) Peering in the window or lingering
(Art. 57: 5 years from occurrence of the
outside the residence of the woman
cause of action)
or her child;
(7) Reconciliation of parties during pendency
(c) Entering or remaining in the dwelling
of action (Art. 66 par.1)
or on the property of the woman or
her child against her/his will; (8) Death of either party during pendency of
action (Lapuz-Sy vs. Eufemio)
(d) Destroying the property and personal
belongings or inflicting harm to When to file/try actions
animals or pets of the woman or her
An action for legal separation shall be filed
child; and
within five years from the time of the
(e) Engaging in any form of harassment occurrence of the cause. (Art. 57)
or violence;
Cooling-off and Reconcilation Effects
(9) Causing mental or emotional anguish,
Action cannot be tried before six months have
public ridicule or humiliation to the
elapsed from the filing of the petition (Art.
woman or her child, including, but not
58).
limited to, repeated verbal and emotional
abuse, and denial of financial support or Actions cannot be tried unless the court has
custody of minor children of access to the attempted to reconcile the spouses, and
woman's child/children. determined that despite such efforts,
reconciliation is highly improbable (Art. 59)
Defenses
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N.B.: This is without prejudice to judicial The Court shall provide for: (Art. 62, cf. Art.
determination of custody of children, 49. FC)
alimony, and support pendente lite.
▪ Support of spouses
Courts can still resolve other issues, pending
the waiting period or cooling off period. In ▪ Custody of children: The court shall give
resolving other issues, courts should try not custody of children to one of them, if
to touch, as much as possible, on the main there is no written agreement between
issue (i.e. adultery if that is the ground used). the spouses.
However, Court must still receive evidence if
just to settle incidental issues of support and ▪ Visitation rights of the other spouse
custody. [Araneta vs. Concepcion, (1956)] Effects of Decree of Legal Separation
N.B.: This provision of the Family Code (1) The spouses can live separately (Art. 63)
dictating a mandatory 6-month cooling-off but the marriage bonds are not severed.
period does not apply in cases where
violence, as used in RA 9262 (Anti-Violence (2) The ACP or CPG shall be dissolved and
Against Women and their Children), is liquidated, and the share of the guilty
alleged. The case should be heard as soon as spouse shall be forfeited in favor the
possible by the court. common children, previous children, or
innocent spouse, in that order (Art. 63. cf.
Confession of Judgment Art. 43, par. 2).
No decree of legal separation shall be based (3) Custody of the minor children shall be
upon a stipulation of facts or a confession of awarded to the innocent spouse (Art. 63,
judgment (Art. 60, par. 1. FC). cf. Art 213)
N.B.: Art. 60 par. 1 applies only if the (4) Guilty spouse shall be disqualified from
judgment was based solely on the stipulation Inheriting from innocent spouse by
of facts or solely on the confession of
intestate succession. The provisions in
judgment. Thus, if other grounds were used,
favor of the guilty party in the will of the
Art. 60 par. 1 is not applicable. (Balane) innocent spouse shall also be revoked by
The prohibition on confession of judgment operation of law. (Art. 63)
does not mean that the Court will not grant (5) Donations in favor of the guilty spouse
petition if one party admits to being guilty of may be revoked (Art. 64) but this action
the charges of adultery. The point of this prescribes after 5 years from the decree
provision is that the Court should still admit of legal separation.
evidence, not decide just based on an
admission of guilt. Because what is (6) Innocent spouse may also revoke
prohibited is handing down a decree of legal designation of guilty spouse as
separation based solely on a confession of beneficiary in an Insurance policy, even if
judgment. [Ocampo v Florenciano (1960)] such stipulations are irrevocable. (Art. 64.
FC, cf. PD 612, sec. 11)
Effects of Filing Petition
(7) Obligation for mutual support ceases, but
(1) The spouses are entitled to live the court may order the guilty spouse to
separately, but the marital bond is not support the innocent spouse. (Art. 198)
severed. (Art. 61 (1))
(8) The wife shall continue to use the
(2) Administration of community or conjugal surname of the husband even after the
property – If there is no written decree for legal separation. [Laperal v.
agreement between the parties, the court
Republic (1992)]
shall designate one of them or a third
person to administer the ACP or CPG.
(Art. 61, par. 2)
Effects of Pendency Reconciliation

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Should the spouses reconcile, they should file (6) The right to testamentary succession
a corresponding joint manifestation under depends on the will of the innocent
oath of such reconciliation, duly signed by spouse
them and filed with the court in the same
proceeding for legal separation. (Art. 65)
Effects of Reconciliation
(1) Proceedings for legal separation shall be
terminated at whatever stage. (Art. 66)
(2) If there is a final decree of legal
separation, it shall be set aside. (Art. 66)
(3) The separation of property and forfeiture
of share of guilty spouse shall subsist,
unless the spouses agree to revive their
former property regime or to institute
another property regime.(Art. 66 cf. Art.
67)
(4) Joint custody of children is restored.
(5) The right to intestate succession by guilty
spouse from innocent spouse is restored.

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Annex to Void and Voidable Marriages and Legal Separation

Void Marriages Voidable Marriages Legal Separation

Grounds (1) One is a minor (1) Lack of parental (1) Repeated Physical
consent Violence
(2) No authority to
marry (2) Insanity (2) Pressure to compel
to change
(3) No valid marriage (3) Fraud
religious/political
license
(4) Force, Intimidation affiliations
(4) Bigamous and
(5) Undue Influence (3) Corruption /
polygamous
Inducement to
marriages (6) Impotence
engage in
(5) Mistake of identity (7) Serious and prostitution
Incurable STD
(6) Void subsequent (4) Final judgment with
marriage sentence of more
than 6 yrs.
(7) Psychological
incapacity (5) Drug Addiction /
Habitual Alcoholism
(8) Incestuous
Marriages (6) Homosexuality /
Lesbianism
(9) Marriages against
public policy (7) Bigamous marriage
(8) Sexual Infidelity or
perversion
(9) Attempts against the
life of petitioner
(10) Abandonment
without just cause
for more than 1 year

Defenses (1) Condonation


(2) Consent
NONE (3) Connivance
(4) Collusion
(5) Mutually Guilty
(6) Prescription

Prescription No prescription (1) Lack of Parental Within 5 years from the


Consent: occurrence of the cause

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Void Marriages Voidable Marriages Legal Separation

Who can file According to A.M. No. Spouses – 5 years after Only the spouses (cannot
02-11-10-SC): turning 21 survive the death of the
plaintiff)
(a) Before March 18, Parents – before the
2003 (petition for spouse turns 21
nullity or celebration of
(2) Insanity
marriage) – any party
Insane spouse – during
(b) On and after March
lucid intervals
18, 2003 (petition for
nullity or celebration of Sane spouse/guardian –
marriage) – only the lifetime
spouses
(3) Fraud – 5 years after
the discovery of the
fraud
(4) Force, Intimidation,
Undue Influence – 5
years after cessation
(5) Impotence or STD – 5
years from marriage

Effects of Pendency In the absence of adequate provisions in a written (1) Live separately
agreement:
(2) Designate either of
(1) Support of spouses them or a third person as
administrator of property
(2) Support and custody of children
(3) Support of spouses
(3) Visitation Rights
(4) Support and custody
of Children
(5) Visitation rights

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Void Marriages Voidable Marriages Legal Separation

Effects of Decree (1) Children – (1) Children – considered (1) May live separately but
considered illegitimate legitimate conceived marriage bonds not
except for those and/or born prior to the severed
annulled under Art 36 termination of the
(2) ACP/CPG will be
and Art 53 marriage
dissolved and liquidated
(2) No ACP/CPG, or (2) ACP/CPG will be – offending spouse will
marriage settlement dissolved and liquidated have no right to the net
void because there was – the spouse in bad faith profits
no marriage – property will forfeit his share to
(3) Custody of minor
relations governed by his children or spouse
children – Innocent
co-ownership (same as (as the case may be) by
Spouse
common-law spouses) operation of law
(4) Disqualified to inherit
(3) Donations valid (3) Donations valid
from each other – will
unless in bad faith, unless in bad faith,
revoked by operation of
revoked by law revoked by law
law
(4) Revocation of (4) Revocation of
(5) Revocation of
designation as designation as
designation as
beneficiary beneficiary
beneficiary if done within
(5) Disqualified to (5) Disqualified to 5 years from decree of LS
inherit by inherit by
(6) Donations inter vivos
testate/intestate testate/intestate
are revoked if done within
5 years from decree of LS

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V. Rights and C. SUPPORT


The spouses are jointly responsible for the
Obligations of Spouses support of the family. The expenses for such
support and other conjugal properties shall
N.B.: These rights and duties are not subject
be paid:
to stipulation between the spouses and
though they may voluntarily agree to any (1) From the conjugal property;
change in their personal relations, this (2) If none, income or the fruits of
agreement will be void and have no legal their separate properties;
effect.
(3) If none, from their separate
A. LIVE TOGETHER properties, wherein they shall be
The right to live together refers to the right of liable in proportion to their properties
consortium which is “not susceptible of (Art. 70)
precise or complete definition but, broadly In the case of a separation de facto, if it is
speaking, companionship, love, affection, proved that the husband and wife were still
comfort, mutual services, sexual intercourse— living together at the time of his death, it
all belonging to the marriage state—taken would be safe to presume that she was
together make up what we refer to as dependent on the husband for support,
consortium. unless it is shown that she is capable of
GENERAL RULE: It is their obligation to do so providing for herself. [SSS v. Aguas (2006)]
(cohabitation). It is also their obligation to D. MANAGEMENT OF FAMILY LIFE
observe mutual love, respect and fidelity and
render mutual help and support. (Art. 68) This is the right and duty of both spouses.
The expenses for such management shall be
EXEMPTION: One spouse living abroad paid in accordance with the provisions of
or there are valid and compelling Article 70 (Art. 71).
reasons (Art. 69 (2)) – at the discretion
of the court. E. EFFECT OF NEGLECT OF DUTY
EXEMPTION TO EXEMPTION: In case the other spouse neglects his or her
Incompatibility with the solidarity of the duties or commits acts which tend to bring
family (Art. 69 (2)) danger, dishonor or injury to the family, the
aggrieved party may apply to the court for
Goitia v. Campos Rueda (1916): If the wife
relief. (Art. 72)
abandons the family domicile (vs obligation
of cohabitation) with justifiable causei.e. Injury contemplated is physical, moral,
being forced to perform lewd sexual acts, the emotional or psychological, not financial.
husband’s obligation to support her is not
terminated. The law will not permit the F. EXERCISE OF PROFESSION
husband to terminate the obligation to Either spouse may exercise any legitimate
support his wife by his own wrongful acts in profession, without need for consent of the
driving the wife to seek protection in her other (Art. 73, FC).
parents’ home.
o The other spouse may only object on
Arroyo v. Vasquez de Arroyo (1921): A court valid, serious, and moral grounds.
cannot compel a married woman to go back
o In case of disagreement, the Court
to her husband, but the court may decree
shall decide whether:
that support be terminated.
B. FAMILY DOMICILE ▪ The objection is proper, and
The husband and wife shall fix the family ▪ Benefit has accrued to the family
domicile. (Art. 69) before OR after the objection.If
In case of disagreement, the court shall BEFORE, enforce resulting
decide. (Art. 69 (1)) obligation against the separate

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property of the spouse who has


not obtained consent. (Art. 73) VI. Property Relations
G. USE OF SURNAME of Spouses
Art 370, CC. A married woman may use: A. MARRIAGE SETTLEMENTS
1) Her maiden first name and surname According to Art. 74, Property relations
and add her husband’s surname, or between husband and wife are governed:
2) Her maiden first name and her (1) By marriage settlements executed before
husband’s surname or the marriage
3) Her husband’s full name, but (2) By the provisions of this Code
prefixing a word indicating that she (3) By the local custom
is his wife, such as Mrs.
Requisites for Validity
Art 373, CC. A widow may use the deceased
husband’s surname as though he were still Art. 75. The future spouses may, in the
living, in accordance with Article 370. marriage settlements, agree upon the regime
of absolute community, conjugal partnership
Art 376, CC. No person can change his name of gains, complete separation of property, or
or surname without judicial authority any other regime. In the absence of marriage
Art 377, CC. Usurpation of a name and settlement, or when the regime agreed upon
surname may be the subject of an action for is void, the system of absolute community of
damages and other relief. property as established in this Code shall
govern.
Art 378, CC. The unauthorized or unlawful
use of another person’s surname gives a N.B.: Marriage settlements are considered
right of action to the latter. accessory to the marriage, therefore as per
Art. 81, stipulations in consideration of future
N.B.: From the foregoing provisions, it can be marriage and donations will be void if the
gleaned that a woman is not mandated by marriage does not take place.
law to adopt her husband’s name after
Art. 103(3) & 130(3). Should the surviving
marriage. Article 370 is merely directory,
spouse contract a subsequent marriage
since it provides that a woman may choose
without compliance with the foregoing
any of the options provided.
requirements, a mandatory regime of
Although marriage is one of the events complete separation of property shall govern
required to be recorded in the civil register, a the property relations of the subsequent
woman does not register her married name. marriage.
Neither does a married woman file a petition
for change of name in order to use her Marriage Settlement Rules
husband’s surname.
When modifications can be made

General rule: Before marriage is celebrated


[Art. 76]

Art. 63(2): Property regime is dissolved and


liquidated

Arts. 66 and 67: Reconciliation in case of


legal separation

Art. 128: When abandoned spouse petitions


the court for judicial separation of property

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Art. 135: Sufficient cause for judicial should infringe the legitime of a forced heir.
separation of property [Mateo v. Lagua (1969)]
Requisites of donations propter nuptias
Art. 136: Voluntary dissolution of ACP or CPG 1. Made before the celebration of marriage
by the spouses
2. Made in consideration of marriage
Requirements of marriage settlements and 3. In favor of one or both of the future
any modification thereof [Art. 77] spouses
4. Donor must be one of the betrothed or any
Made in writing
third person
Signed by the parties Donations excluded

• Ordinary wedding gifts given after the


Executed before the marriage celebration
celebration of the marriage
Not to prejudice third persons unless • Donations in favor of future spouses made
registered in the local civil registry where the before marriage but not in consideration
marriage is recorded and in registries of thereof
property
• Donations made in favor of persons other
If executed by a person below 21 years, valid than the spouses even if founded on the
only when persons required to give consent intended marriage
to the marriage (father, mother, or guardian, Who may donate
respectively) are made parties to the
agreement [Art. 78] • Spouses to each other

If executed by a person upon whom civil • Parents of one or both spouses


interdiction has been pronounced or who is
• Third persons to either or both spouses
subject to any other disability, valid only
when his guardian appointed by a RULES FOR DONATIONS BEFORE
competent court is made party to the MARRIAGE
agreement [Art. 79]
General rule: Future spouses who agree upon
B. DONATIONS BY REASON OF a regime other than ACP cannot donate to
each other more than 1/5 of their present
MARRIAGE property (excess shall be considered void).
In donations propter nuptias, the marriage is [Art. 84]
really a consideration, but not in the sense of
giving birth to the obligation. There can be a
valid donation even if the marriage never took Donations of property subject to
place, but the absence of marriage is a encumbrances
ground for the revocation of the donation.
1. Are considered valid.
[Solis v. Barroso (1928)]
2. In case of foreclosure:
The donation must be in a public document
and not merely privately stipulated. [Solis v. a. if property value < obligation, donee
Barroso (1928)] shall not be liable for the deficiency
Donations propter nuptias are without b. if property value > obligation, donee
onerous consideration, marriage being shall be entitled to the excess (Art.
merely the occasion or motive for the 85)
donation, not its cause. Being liberalities, GROUNDS FOR REVOCATION OF DONATION
they remain subject to reduction for PROPTER NUPTIAS [Art. 86]
inofficiousness upon the donor’s death, if they
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1. If the marriage is not celebrated or Exception: Moderate gifts on the occasion of


judicially declared void ab initio, EXCEPT any family rejoicing.
donations made in marriage settlements.
Harding v. Commercial Union (1918): The
2. When the marriage takes place without the prohibition on donations can only be assailed
consent of the parents or guardians, as by persons who bear such relation to the
required by law. parties or the property itself, that their rights
are being interfered with. Here, the insurance
3. When the marriage is annulled, and the
company of the donated car cannot assail the
donee acted in bad faith.
validity of the donation. In addition, the codal
4. Upon legal separation, if the donee is the exception of “moderate gifts” depends on the
guilty spouse. income class of the spouses and a car could
be considered a “moderate gift” that does not
5. If there is a resolutory condition, and it is
infringe the prohibition of donation between
not complied with.
spouses.
6. When donee has committed an act of
Nazareno v. Birog (1947): A spouse cannot
ingratitude: [Art. 765, CC]
donate to persons which the other spouse
a. An offense against person or property may inherit from as it constitutes an indirect
of donor, or his wife or children under donation.
parental authority.
RULES FOR DONATIONS BETWEEN
b. An imputation to the donor of any COMMON-LAW SPOUSES
criminal offense, or any act involving
Matabuena v Cervantes (1971): The donation
moral turpitude, even if proven, unless
between common-law spouses falls within
the crime is committed against the
the provision prohibiting donations between
donee, his wife or children under his
spouses during marriage.
authority.
Sumbod v. CA (1999): In order to fall under
c. Refusing to support the donor, if
the prohibition, it must be proved that they
he/she is legally required to do so.
were living in a common-law relationship at
Effects of judicial declaration of nullity the time of the donation.
Donations by reason of marriage shall remain Distinguished from Ordinary Donations
valid EXCEPT that if the donee contracted
marriage in bad faith, such donations made Donations propter Ordinary donations
to said donee are revoked by operation of law. nuptias
[Art. 43 (3)]Thus, even if spouse in good faith
condones the donee, the donation propter Does not require Express acceptance
nuptias is still forfeited. express acceptance necessary
Effects provided for by Art. 43(2), (3), (4), and
(5) and by Art. 44 shall also apply to May include future Cannot include future
marriages that are declared void ab initio or property property
annulled by final judgment under Article 40
(Judicial declaration of nullity) and 45 If present property is No limit to donation of
(Voidable marriages). [Art. 50] donated and property present property
regime is not provided legitimes are
RULES FOR DONATIONS DURING
absolute community, not impaired
MARRIAGE
limited to 1/5 (Art.
General rule: Spouses cannot donate to each 84)
other, directly or indirectly; donations made
by spouses to each other during the marriage Grounds for Grounds for revocation
are void. [Art. 87] revocation - in Art. 86 – civil code provisions
These donations refer to donations inter vivos
(Tolentino)

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ABSOLUTE COMMUNITY OF PROPERTY AND the extent of the amount sufficient to cover
CONJUGAL PARTNERSHIP OF GAINS the amount of their credits.
Art. 80. In absence of a contrary stipulation in Art. 90. The provisions on co-ownership shall
a marriage settlement, the property relations apply to the absolute community of property
of the spouses shall be governed by between the spouses in all matters not
Philippine laws, regardless of the place of the provided for in this Chapter.
celebration of the marriage and their
N.B.: The creditors of the spouse who made
residence.
such waiver may petition the court to rescind
N.B.:By the Nationality Rule [Art. 15], the rule the waiver to the extent of the amount
that Absolute Community Property (ACP) is sufficient to cover the amount of their credits.
the default mode of property relations absent
ABSOLUTE COMMUNITY OF PROPERTY
any marriage settlement applies to all
Filipinos, regardless of the place of the The community property consists of all the
marriage and their residence. property owned by the spouses at the time of
the celebration of the marriage and those
EXCEPTIONS (Art. 80)
either one or both of them acquired during
• Where both spouses are aliens the marriage. There is a presumption in law
that properties acquired during the marriage
• With respect to the extrinsic validity of belong to the community, unless it is proved
contracts affecting property not situated in that it is one of those excluded therefrom.
the Philippines and executed in the CONJUGAL PARTNERSHIP OF GAINS
country where the property is located
This property regime was formerly the default
• With respect to the extrinsic validity of regime under the Civil Code. In this regime,
contracts entered into in the Philippines but the spouses retain ownership of their
affecting property situated in a foreign separate property. However, the spouses also
country whose laws require different place in common fund the proceeds, products,
formalities for its extrinsic validity fruits and income of their separate property
and those acquired by either or both spouses
Art. 81. Everything stipulated in the
through their efforts or by chance.
settlements or contracts referred to in the
preceding articles in consideration of a future The presumption applies that all properties
marriage, including donations between the acquired during the marriage belong to the
prospective spouses maded therein, shall be CPG. There are 3 distinct patrimonies in this
rendered void if the marriage does not take system, the husband’s capital property, the
place. However, stipulations that do not wife’s paraphernal property and the conjugal
depend upon the celebration of marriage property.
shall be valid.
e.g. recognition of paternity of illegitimate SEPARATION OF PROPERTY
child
Each spouse has complete control and
ownership of his or her own properties which
Art. 89. No waiver of rights, shares and will include “all earnings from his or her
effects of the absolute community of property profession, business or industry and all fruits,
during the marriage can be made except in natural, industrial or civil, due or received
case of judicial separation of property. during the marriage form his or her separate
property.” Expenses of the family shall be
When the waiver takes place upon a judicial shouldered by the spouses in proportion to
separation of property, or after the marriage their income, or, in case of insufficiency or
has been dissolved or annulled, the same default thereof, to the current market value of
shall appear in a public instrument and shall their separate properties.
be recorded as provided in Article 77. The
creditors of the spouse who made such waiver
may petition the court to rescind the waiver to
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COMPARISON OF ACP and CPG

ABSOLUTE COMMUNITY OF CONJUGAL PARTNERSHIP OF GAINS


PROPERTY

When it At the precise moment of the Default property regime for marriages
commences celebration of the marriage [Art. celebrated before the Family Code took effect
88] (August 3, 1988)

For marriages after the Family Code, if agreed


to by the parties through a marriage
settlement.

What it consists of All the property owned by the Proceeds, products, fruits, and income of their
spouses at the time of the separate properties
celebration of the marriage or
acquired thereafter [Art. 91] Everything acquired by them during marriage
through their own efforts

Under the ACP, spouses cannot Everything acquired by them by chance.


exclude specific properties from
the regime unless done in
settlement.

Winnings from gambling shall Specific properties (Art. 117)


accrue to the community property
1. Acquired by onerous title during the
but obligations from gambling
marriage at the expense of the common fund;
shall not. [Art. 95]
2. Acquired through the labor, industry, work,
or profession of either or both spouses
Property acquired during is
3. Fruits from common property and net fruits
presumed to have been obtained
of the exclusive property of each spouse
through joint efforts of parties,
even though one did not actually 4. Share of either spouse in hidden treasure,
participate in the acquisition. This whether as finder or owner of property where
is true for a party whose efforts treasure was found
consisted in the care and
5. Acquired through occupation such as
maintenance of the family
fishing or hunting
household. Such is regarded as
contributions to the acquisition of 6. Livestock existing at dissolution of
common property by one who has partnership in excess of what is brought by
no salary, income, work or either spouse to the marriage
industry. [Ocampo v. Ocampo 7. Acquired by chance, such as winnings from
(2015)] 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)]

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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]

If a winning ticket is bought by conjugal


funds, the prize is conjugal (otherwise, the
prize is exclusive property of the spouse who
owns the ticket)

Improvement on exclusive property: if original


value < new value (where new value = value of
land + value of improvements + net change in
value), then land becomes conjugal property,
subject to the reimbursement of the value of
the property of the owner-spouse at the
dissolution of the CPG

Property belonging to one spouse converted


into another kind totally different in nature
from its original form during marriage
becomes conjugal in the absence of proof that
the expenses of the conversion were
exclusively for the account of the original
owner-spouse, subject to reimbursement of
the value of the original property from the
conjugal partnership

What remains Properties acquired before the Property brought into the marriage by each
exclusive property marriage, for those with spouse as his/her own
legitimate descendants with a
former marriage (to protect rights
of children by a former marriage)

Properties acquired during the Property acquired by either spouse during the
marriage by a gratuitous title, i.e. marriage by gratuitous title
donation, inheritance by testate
and intestate succession,
including the fruits of such
properties
Except: When expressly provided
by the donor or testator that the
property shall form part of the
ACP

Properties for personal use Property acquired by right of redemption, by


barter, or by exchange with property
Except: Jewelry (partakes of the
belonging to either spouse

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nature of an investment) Plata v. Yatco: Plata purchased property when


she was single. When married, she and her
husband Bergosa co-signed a mortgage on
the property. Upon foreclosure, Bergosa was
sued for illegal detainer. A writ of execution
on the property was carried out but Plata
refused to leave the premises. SC ruled that
Plata cannot be held in contempt. Property is
not conjugal. Her husband signing as co-
mortgagor does not convert it to CPG. She
could ignore execution because the decision
was for her husband alone.

Property purchased with exclusive money of


either spouse

Property purchased by installment, paid


partly with conjugal funds and partly with
exclusive funds, if full ownership was vested
before the marriage [Art. 118]

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)]

Presumption All properties acquired during the All property acquired during the marriage,
marriage form part of the ACP, whether made, contracted, or registered in
unless it be proven that they are the name of one spouse, are presumed
excluded. [Art. 93] conjugal unless the contrary is prove. [Art 116]

Charges and Arts. 94 Arts. 121-123


Obligations
1. Support of the following: 1. Support of the following:
a. Spouses; a. Spouses;
b. Common children; b. Common children;
c. Legitimate children of previous c. Legitimate children of previous marriage;
marriage;
d. Illegitimate children – follow the provisions
d. Illegitimate children – follow on Support; Partnership assets liable in case
the provisions on Support; ACP responsibilities under Art. 121 have been
liable in case of absence or covered and there is absence or insufficiency
insufficiency of the exclusive of the exclusive property of the debtor-spouse
property of the debtor-spouse but but the payment shall be considered as
the payment shall be considered advance to the share of the debtor-spouse.
as advance to the share of the
debtor-spouse.
2. Expenses to enable either spouse to
commence/complete a
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2. Expenses to enable either professional/vocational course or activity for


spouse to commence/ complete a self-improvement;
professional/vocational course or
activity for self-improvement;
3. Value donated or promised by both spouses
in favor of common legitimate children for the
3. Value donated or promised by exclusive purpose of commencing/
both spouses in favor of common completing a professional/ vocational course
legitimate children for the or activity for self-improvement
exclusive purpose of
commencing/ completing a
professional/ vocational course or
activity for self-improvement

If community property is If conjugal partnership property is insufficient,


insufficient, the spouses are the spouses are solidarily liable for the unpaid
solidarily liable for the unpaid balance from their separate properties except
balance from their separate for:
properties except for:
1. Debts contracted by either spouse before
1. Debts contracted by either marriage which have not redounded to the
spouse before marriage which benefit of the family;
have not redounded to the benefit
2. Support of illegitimate children; and
of the family;
3. Liabilities incurred by either spouse arising
2. Support of illegitimate
from crime or quasi-delict.
children; and
Gambling losses of any kind (i.e. legal or
3. Liabilities incurred by either
illegal) shall be borne by the losing spouse’s
spouse arising from crime or
separate property [Art. 123]
quasi-delict.
Gambling losses of any kind (i.e.
legal or illegal) shall be borne by DBP v. Adil (1988):
the losing spouse’s separate
Loan contracts signed by both spouses are
property [Art. 95]
conjugal, and they are jointly liable for
payment, even if only one spouse signs a
subsequent promissory note.

Ayala Investment v. Ching (1998):


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
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partnership by allowing it to be given


gratuitously as in cases of donation of
conjugal partnership property, which is
prohibited.

Ownership, The administration and The administration and enjoyment of the CPG
administration, enjoyment of the community shall belong to both spouses jointly. In case of
enjoyment, and property shall belong to both disagreement, the husband’s decision shall
disposition spouses jointly. In case of prevail, subject to recourse to the court by the
disagreement, the husband’s wife for proper remedy, within 5 years from
decision shall prevail, subject to the date of contract (Art. 124)
recourse to the court by the wife
for a proper remedy, within 5
years from the date of contract De Ansaldo v. Sheriff of Manila (1937): Spouses
(Art. 96) are not co-owners of CPG during the marriage
and cannot alienate the supposed ½ interest
of each in the said properties. The interest of
the spouses in the CPG is only inchoate or a
mere expectancy and does not ripen into title
until it appears after the dissolution and
liquidation of the partnership that there are
net assets.

Either spouse may, through a will, Art. 124, par. 2: Disposition or encumbrance of
dispose of his or her interest in conjugal property requires the following:
the community property. [Art. 97] Authority of the court or written consent of the
However, the will should refer other spouse. The absence of such will render
only to his or her share in the such encumbrance void.
community property.

Donation of one spouse without Consent or approval by both spouses, or


the consent of the other is not authority given by the court in lieu of the
allowed. [Art. 98] consent of the other spouse.
Exceptions:
Moderate donations to charity
due to family rejoicing or distress

Moderate gifts by each spouse to


the other due to family rejoicing
Moderation depends on the
family’s socio-economic status.

ACP allows donations in excess of


one-fifth of present property of
future spouses because the
donation would form part of the
community property once the
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marriage is celebrated. [Art. 84]

Jader-Manalo v. Camaisa (2002): Mere awareness of a transaction is NOT consent.

Homeowner’s Savings & Loan Bank v. Dallo (2005):


In the absence of (court) authority or written consent of the other spouse, any
disposition or encumbrance of the conjugal property shall be void.

Cheeseman v. IAC (1991):


If however, one of the spouses is an alien, the Filipino spouse may encumber or
dispose of the property w/o the consent of the former. The property is presumed
to be owned exclusively by the Filipino spouse.

Dissolution of the Terminates upon [Art. 99]: Terminates upon [Art. 126; cf. Art. 99]:
regime
1. Death of either spouse – 1. Death
follow rules in Art. 103
2. Legal separation
2. Legal separation – follow
3. Annulment or judicial declaration of
rules in Arts. 63 and 64
nullity
3. Annulment or judicial
Judicial separation of property
declaration of nullity – follow
rules in Arts. 50 and 52
Judicial separation of property
during marriage – follow rules in
Arts. 134 to 138

Rules on de facto Rules on de facto separation [Art. Rules on de facto separation [Art. 127]
separation 100]
De facto separation does not affect the CPG,
De facto separation does not except that:
affect the ACP, except that:
Spouse who leaves the conjugal home
Spouse who leaves the conjugal without just cause shall not be entitled to
home without just cause shall not support; however, he/she is still required to
be entitled to support; however, support the other spouse and the family
he/she is still required to support
2. If consent is necessary for transaction but is
the other spouse and the family
withheld or otherwise unobtainable,
If consent is necessary for authorization may be obtained from the court
transaction but is withheld or
3. Support for family will be taken from the
otherwise unobtainable,
partnership property.
authorization may be obtained
from the court 4. If partnership property is insufficient,
spouses shall be solidarily liable
Support for family will be taken
from the ACP
If ACP is insufficient, spouses

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shall be solidarily liable

Effect of de facto If it is necessary to administer or 5. If it is necessary to administer or encumber


separation encumber separate property of separate property of spouse who left, spouse
spouse who left, spouse present present may ask for judicial authority to do
may ask for judicial authority to this
do this
6. If partnership property is not enough and
If ACP is not enough and one one spouse has no separate property, spouse
spouse has no separate property, who has property is liable for support,
spouse who has property is liable according to provisions on support.
for support, according to
provisions on support.

Charges and Abandonment [Art. 101] Abandonment [Art. 128]


Obligations
Present/aggrieved spouse may Present/aggrieved spouse may petition the
petition the court for: court for:
1. Receivership 1. Receivership
2. Judicial separation of 2. Judicial separation of property
property
3. Authority to be the sole administrator of the
3. Authority to be the sole partnership property, subject to precautionary
administrator of the absolute conditions that the court may impose
community, subject to
precautionary conditions that
the court may impose A spouse is deemed to have abandoned the
other when he or she has left the conjugal
dwelling without any intention of returning.
A spouse is deemed to have
abandoned the other when he or
she has left the conjugal dwelling Spouse is prima facie considered to have
without any intention of abandoned the other spouse and the family if
returning. he or she has:
1. Left for a period of 3 months
Spouse is prima facie considered 2. Failed to inform the other spouse of his or
to have abandoned the other her whereabouts for a period of 3 months
spouse and the family if he or she
Rules on has: Partosa-Jo v. CA (1992):
Abandonment 1. Left for a period of 3 months
Physical separation of the spouses, coupled
2. Failed to inform the other with the husband’s refusal to give support to
spouse of his or her the wife, sufficed to constitute abandonment
whereabouts for a period of 3 as a ground for an action for the judicial
months separation of their conjugal property.

Liquidation of Procedure [Art. 102] Procedure [Art. 129]


assets and
(b) Inventory of assets of ACP 1. Prepare an inventory of all properties
liabilities
and of spouses, with market
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values 2. Amounts advanced by CPG in payment of


personal debts and obligations shall be
(c) Obligations are paid with
credited to the CPG
community property, and
separate obligations not 3. Reimburse each spouse for the use of
charged to ACP paid by his/her exclusive funds in the acquisition
respective assets of spouses of property or for the value of his or her
exclusive property, the ownership of which
If obligations exceed the assets of
has been vested by law in the conjugal
the ACP, nothing is divided.
partnership
Creditors can go after the
separate properties of the 4. Debts and obligations of CPG shall be
spouses, which are solidarily paid out of the conjugal assets, otherwise
liable for the deficiency both spouses are solidarily liable with
their exclusive property
• Delivery of whatever remains
in their exclusive property 5. Remains of the exclusive properties shall
be delivered to respective owner-spouses.
• Balance, or net remainder is
divided equally between the 6. Indemnify loss/deterioration of movables
spouses, irrespective of how belonging to either spouse, even due to
much each brought into the fortuitous event, used for the benefit of
community the family
• If personal obligations of a 7. Net remainder of CPG shall constitute the
spouse exceed his/her profits which shall be divided equally
separate property, creditor between husband and wife except when:
can go after the share of the • A different proportion or division was
spouse on the net remainder agreed upon in the marriage
of the ACP, without prejudice settlements
to the provisions of law on
forfeitures and delivery of • There has been a voluntary waiver or
presumptive legitimes forfeiture of such share as provided in
the FC
• After covering all community
obligations and obligations 8. Presumptive legitimes are delivered to
of spouses, balance of common children
separate properties shall be 9. Conjugal dwelling goes to:
delivered to respective
spouses or their heirs, and • Spouse with whom majority of
they will also divide into two common children choose to remain
equal shares whatever is left (below 7 y.o. = deemed to have
of the community assets, chosen the mother based on the
without prejudice to the tender years presumption)
provisions of law on • Whoever the court chooses in case of
forfeitures and delivery of lack of majority
presumptive legitimes

Rules in case of termination of marriage by death of one of the spouses [Art. 104]:
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
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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]:
Determine the capital, fruits, and income of each community upon such proof as
may be considered according to the rules of evidence.
In case of doubt as to which community the existing properties belong, they shall
be divided between two communities in proportion to the capital and duration of
each.

Separation of Property of the Spouses and Administration of Common Property by One Spouse During the
Marriage

Art. 134. 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.

Sufficient Causes and Grounds for Return to Previous Regime

Sufficient Causes for Judicial Separation of Grounds for Return to Previous Regime
Property (Art. 135)
(Art. 141)

(1) Spouse of petitioner has been sentenced to a (1) Termination of the civil interdiction
penalty which carries with it the penalty of 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 latter (4) When the spouse who left the conjugal home
or failed to comply with his or her obligations to without legal separation resumes common life with
the family the other

(5) The spouse granted the power of (5) When the court, being satisfied that the spouse
administration in the marriage settlements has granted the power of administration in will not again
abused that power abuse that power, authorizes the resumption of said
administration

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(6) At the time of the petition, the spouses have (6) Reconciliation and resumption of common life of
been separated in fact for at least 1 year and the spouses who had been separated in fact for at
reconciliation is highly improbable. 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.

SEPARATION OF PROPERTY

Agreed upon in the marriage settlements by the spouses

Mandatory under Arts. 103 & 130 (subsequent marriages contracted by a


surviving spouse without judicial settlement of previous property regime)
When it applies
Judicial separation of property (Voluntary or just cause)

Default property regime when there is reconciliation between spouses after


judicial separation of property

Present or future property or both

Each spouse’s earnings from his or her own profession, business, or industry

What it consists of Natural, industrial or civil fruits of spouse’s separate properties

May be total or partial


If partial, property not considered separate is presumed to pertain to the ACP

Family expenses: Both spouses are liable in proportion to their income; if


insufficient, based on the current value of their separate properties
Liabilities
Creditors for family expenses: Spouses solidarily liable

Spouses may own, dispose, possess, and administer separate estates without the
consent of the other

Administration of exclusive properties may be transferred between spouses when:


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

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

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In Re: voluntary dissolution of CPG of Sps. 2nd marriages were not informed; the
Bernas (1965): separation of property may prejudice the
rights and shares of the children.

A voluntary separation of properties is not


perfected by mere consent but upon the Maquilan v. Maquilan (2007):
decree of the court approving the same. The
A compromise agreement with judicial
petition for voluntary separation of property
recognition is valid, pending petition for
was denied because the children of the 1st and
declaration of nullity of marriage.
PROPERTY REGIME OF UNIONS WITHOUT MARRIAGE, Arts. 147-148

Art. 147 Art. 148

Man and woman living together as Man and woman living together as
husband and wife, with capacity to husband and wife, NOT capacitated to
marry (Art.5, without any legal marry
impediment)
a. Under 18 years old
-at least 18 years old
b. Adulterous relationship
-not violative of Art. 37 (incestuous
c. Bigamous/polygamous marriage
Applicability void marriage)
d. Incestuous marriages under Art. 37
-not violative of Art. 38 (void marriage
by reason of public policy) e. Void marriages by reason of public policy
under Art. 38
-not bigamous

Other void marriages due to absence


of formal requisite

Salaries and Owned in equal shares Separately owned by parties


wages

Properties Remains exclusive, provided there is Remains exclusive


acquired through proof
exclusive funds

Properties Governed by rules on co-ownership Owned in common in proportion to


acquired by both respective contribution
through work
and industry

Owned in equal shares since it is


presumed to have been acquired
through joint efforts
No presumption of joint acquisition. When
Properties there is evidence of joint acquisition but
acquired while none as to the extent of actual
If one party did not participate in
living together contribution, there is a presumption of
acquisition, presumed to have
equal sharing.
contributed jointly, if the former’s
effort consisted in the care and
maintenance of family and household

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Art. 147 Art. 148

N.B. Neither party can encumber or


dispose by acts inter vivos his share in
co-owned property without the
consent of the other party until
cohabitation is terminated.

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

Difference between Articles 147 and 148 Villanueva v. CA (2004):


Art. 147 applies “to unions of parties who are Transfer of certificate and tax declarations
legally capacitated and not barred by any are not sufficient proof of joint contribution.
impediment to contract marriage, but whose
marriage is nonetheless void for other
reasons, like the absence of a marriage
license.”
Article 148 refers to “the property regime of
bigamous marriages, adulterous
relationships, relationships in a state of
concubinage, relationships where both man
and woman are married to other persons,
multiple alliances of the same married man.”
[Nicdao Cariño v. Yee Cariño (2001)].

Yaptinchay v. Torres (1969):


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

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VII. Family Relations The case will be dismissed if it is
shown that no such efforts were
THE FAMILY AS AN INSTITUTION made.
Exceptions
Art. 149. The family being the foundation of
the nation is a basic social institution which o The general rule shall not apply to
public policy cherishes and protects. cases which may not be the subject of
Consequently, family relations are governed compromise.
by law and no custom practice or agreement o The following cannot be subject of
destructive of the family shall be recognized compromise: (Art 2035)
or given effect.
1. Civil status of persons,
2. Validity of marriage or a legal
Art. 150. Family relations include those: separation,
(1) Between husband and wife 3. Any ground for legal separation,
(2) Between parents and children 4. Future support (as it is presumed
(3) Among other ascendants and to be needed for the survival of
descendants the one receiving support),
(4) Among brothers and sisters, full or half 5. Jurisdiction of courts,
blood. 6. Future legitime
General Rules THE FAMILY HOME
 The family is an institution that is A. WHAT CONSTITUTES THE FAMILY
governed by law HOME?
 The internal aspect of the family is sacred General Rules
and inaccessible to law because law must
o The family home is the dwelling
respect the freedom of action of man.
house where family resides and the
EFFECTS OF FAMILY RELATIONSHIP ON land on which it is sustained (Art. 152)
LEGAL DISPUTES
o The family home must be part of the
Art. 151. No suit between members of the properties of the absolute community
same family shall prosper unless it should or the conjugal partnership, or of the
appear form the verified complaint or petition exclusive properties of either spouse
that earnest efforts toward a compromise with the other’s consent. It may also
have been made but that the same have be constituted by an unmarried head
failed. If it is shown that no such efforts were of a family in his or her own property.
in fact made the case must be dismissed. (Art. 156)
o The actual value of the family home
General Rules shall not exceed, at the time of its
 Suit between members of the same constitution, the amount of
family shall prosper only if it shall P300,000 in urban areas, and
appear in a verified complaint or P200,000 in rural areas, or such
petition that: amounts as may hereafter be fixed by
law (Art. 157)
o Earnest efforts towards a
compromise have been made; o For the purposes of availing of the
benefits of a family home as provided
o Such efforts have failed; and for in this Chapter, a person may
o Such earnest efforts and the constitute, or be the beneficiary of,
fact of failure must be only one home. (Art. 161)
alleged.
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B. WHO MAY CONSTITUTE THE FAMILY Art. 154. The beneficiaries of a family home
HOME? are:
General Rules 1. The husband and wife, or an unmarried
o The family home may be constituted person who is the head of a family; and
jointly by the husband and wife or an 2. Their parents, ascendants,
unmarried head of the family (Art. descendants brothers, and sisters
152) (legitimate/illegitimate), who are living
o A person may constitute and be the in the family home and who depend on
beneficiary of only one family home the head of the family for support
(Art. 161)
General Rule
C. WHEN IS IT DEEMED CONSTITUTED? o Requisites to be a beneficiary:
General Rules
o The relationship is within those
o The family home is deemed enumerated in Art. 150
constituted on a house and lot form
o They live in the family home
the time it is occupied as a family
residence. o They are dependent for legal
support on the head of the family
o The family home is exempt from the
following from the time of its o Requirements for the sale, alienation,
constitution and so long as any of its donation, assignment, or
beneficiaries actually resides therein encumbrance of the family home (Art.
(Art. 153): 158)
(1) Execution o The written consent of the
person constituting it,
(2) Forced sale
o That of the spouse of the
(3) Attachment
person constituting it, and
Exceptions in the exemption of the family
o That of majority of the
home from execution (Art. 155)
beneficiaries of legal age
(1) Nonpayment of taxes.
Patricio vs. Dario (2006): The law explicitly
(2) Debts incurred prior to the constitution of provides that occupancy of the family home
the family home. either by the owner thereof or by “any of its
beneficiaries” must be actual. That which is
(3) Debts secured by mortgages on the
“actual” is something real, or actually
premises before or after such
existing, as opposed to something merely
constitution.
possible, or to something which is
(4) Debts due to laborers, mechanics, presumptive or constructive. Actual
architects, builders, materialmen and occupancy, however, need not be by the
others who have rendered service or owner of the house specifically. Rather, the
furnished material for the construction of property may be occupied by the
the building. “beneficiaries” enumerated in Article 154 of
the Family Code, which may include the in-
D. BENEFICIARIES laws where the family home is constituted
jointly by the husband and wife. But the law
definitely excludes maids and overseers. They
are not the beneficiaries contemplated by the
Code.
E. WHEN TERMINATED

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Art. 159. The family home shall continue Exception: When waived, as when the obligor
despite the death of one or both of the voluntarily executes a dead of mortgage over
spouses or of the unmarried head of the family his family home (Sec. 13, Rules of Court)
for a period of ten years or for as long as there
is a minor beneficiary and the heirs cannot
partition the same unless the court finds G. RIGHTS OF CREDITORS
compelling reasons therefor. The rule shall
apply regardless of whoever owns the property
or constituted the family home. Art. 157. The actual value of the family
home shall not exceed at the time of its
General Rule constitution the amount of three hundred
o Article 159 imposes the proscription thousand pesos in urban areas and two
against the immediate partition of hundred thousand pesos in rural areas or
the family home regardless of its such amounts as may hereafter be fixed by
ownership. This signifies that even if law.
the family home has passed by
General Rules
succession to the co-ownership of the
heirs, or has been willed to any one of o In any event, if the value of the
them, this fact alone cannot currency changes after the adoption
transform the family home into an of this Code, the value most favorable
ordinary property, much less dispel for the constitution of a family home
the protection cast upon it by the law. shall be the basis of evaluation.
The rights of the individual co-owner
o Urban areas include chartered cities
or owner of the family home cannot
and municipalities
subjugate the rights granted under
Article 159 to the beneficiaries of the o All others are deemed to be rural
family home. [Arriola v. Arriola areas
(2008)]
o To warrant the execution of sale of
F. WHEN IT MAY BE SOLD the family home under Art 160, the
following facts need to be
Art. 158. The family home may be sold established: (1) there was an increase
alienated, donated, assigned, or in actual value (2) the increase
encumbered by the owner or owners thereof resulted from voluntary
with the written consent of the person improvements (3) the increase in
constituting the same the latter’s spouse actual value exceeded the maximum
and a majority of the beneficiaries of legal limit allowed by Art 157 [Eulogio vs.
age. In case of conflict the court shall Bell (2015)]
decide.
Procedure to avail of right under Art. 160
Art. 159. The family home shall continue
1. The creditor must file a motion in the
despite the death of one or both spouses or
court proceeding where he obtained a
of the unmarried head of the family for a
favorable decision for a writ of execution
period of 10 years or as long as there is a
against the family home.
minor beneficiary, and the heirs cannot
partition the same unless the court finds 2. There will be a hearing on the motion
compelling reasons therefor. This rule shall where the creditor must prove that the
apply regardless of whoever owns the actual value of the family home exceeds
property or constituted the family home. the maximum amount fixed by the FC
either at the time of its constitution or as
General Rule: As a rule, the family home is a result of improvements introduced
exempt from execution, forced sale or thereafter.
attachment.

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3. If the creditor proves that the actual value


exceeds the maximum amount the court VIII. Paternity and
will order its sale in execution.
Filiation
4. If the family home is sold for more than
the value allowed, the proceeds shall be Art. 163. The filiation of children may be by
applied as follows: nature or by adoption. Natural filiation may
be legitimate or illegitimate.
a. First, the obligation enumerated in
Article 157 must be paid Kinds of Filiation [Arts. 163, 164, 165]:
b. Then the judgment in favor of the (1) Natural
creditor will be paid, plus all the costs  Legitimate
of execution
 Illegitimate
c. The excess, if any, shall be delivered
to the judgment debtor (2) Legal Fiction (Adoption)
General Rules A. LEGITIMATE CHILDREN
o The proof that the house is the family Art. 164. Children conceived or born during
home must be alleged against the marriage of the parents are legitimate.
creditors; Applied the rule in Art. 160,
Children conceived as a result of artificial
FC. [Versola v. Mandolaria (2006)]
insemination of the wife with the sperm of the
husband or that of a donor or both are
likewise legitimate children of the husband
and his wife, provided, that both of them
authorized or ratified such insemination in a
written instrument executed and signed by
them before the birth of the child. The
instrument shall be recorded in the civil
registry together with the birth certificate of
the child.
1. Natural/Biological
Liyao v. Liyao (2002): A child conceived or
born during a valid marriage is presumed to
belong to that marriage, regardless of the
existence of extramarital relationships.
2. Artificial Insemination
Requisites to be considered legitimate:
(a) Artificial insemination made on wife
(b) Sperm comes from any of the
following:
 Husband
 Third Person Donor
 Husband and third person
donor
(c) In case of donor sperm, husband and
wife must authorize/ratify
insemination in a written instrument

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 Executed & signed by Jao v. CA (1987): Blood-type matching is an


husband and wife before the acceptable means of impugning legitimacy,
birth of the child. covered by Art. 166(2), under "biological or
other scientific reasons." But this is only
 Recorded in the civil registry conclusive of the fact of non-paternity.
together with the birth
certificate of the child. Benitez-Badua v. CA (1994): Only the man (and
his heirs in certain situations) can impugn the
Dual consent is required whether the semen legitimacy of the child
used comes from the husband or a third
person donor (Tolentino) Legitimacy with regard to the mother:
De Castro v. Assidao-De Castro, (2008): (1) Child considered legitimate although
Common children born before the annulment [Art. 167]:
are legitimate, and therefore entitled to (a) Mother may have declared against its
support from each of the spouses. legitimacy
Impugning Legitimacy (b) Mother may have been sentenced as
Grounds for impugning legitimacy of a child an adulteress (also applies to wife
are [Art. 166]: who was raped)
(1) Physical impossibility for the husband to (2) If the marriage is terminated and the
have sexual intercourse with his wife mother contracted another marriage
within the first 120 days of the 300 days within 300 days after the termination of
which immediately preceded the child's the former marriage, the following rules
birth due to: shall govern in the absence of proof to
the contrary [Art 168]:
a. Physical incapacity of the husband to
have sexual intercourse with his wife (a) If born before 180 days after the
solemnization of the subsequent
b. Husband and wife were living marriage – child is considered
separately as to make sexual conceived during the former
intercourse impossible marriage, provided it be born within
c. Serious illness of the husband 300 days after termination of the
absolutely preventing sexual former marriage
intercourse (b) If born after 180 days following the
(2) Other biological or scientific reasons, celebration of the subsequent
except Artificial Insemination marriage – child is considered
conceived during such marriage, even
(3) And in case of Artificial Insemination, the if it be born within 300 days after the
written consent of either parent was termination of the former marriage
vitiated through fraud, violence, mistake,
intimidation, or undue influence Note: The legitimacy or illegitimacy of a child
born after 300 days following the termination
Macadangdang v. CA (1980): Mere proximate of the marriage – burden of proof upon
separation between the spouses is not whoever alleges the status. [Art. 169]
sufficient physical separation to constitute as
ground for impugning legitimacy. If nobody asserts the legitimacy or
illegitimacy of the child described in Art. 169,
Andal v. Macaraig (1951): Serious illness of the the child should be considered illegitimate
husband which absolutely prevented him unless legitimacy is proved. Legitimacy
from having sexual intercourse with his wife, cannot be presumed here since the birth was
like if the husband was already in comatose beyond the 300-day period of gestation.
or in a vegetative state, or sick with syphilis in While it goes against the policy of law to lean
the tertiary stage so that copulation was not in favor of legitimacy, this interpretation is
possible. But tuberculosis, even in its most better than the anomalous situation created
crucial stage, does not preclude copulation by Art. 169, which is a child without a status.
between the sick husband and his wife. (Tolentino)
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Art. 172. The filiation of legitimate children is


Action for Impugning Legitimacy [Arts. 170 established by any of the following:
and 171] (1) The record of birth appearing in the civil
register or a final judgment; or
May be brought within 1, 2, or 3 years from (2) An admission of legitimate filiation in a
the knowledge of the birth, or the knowledge public document or a private handwritten
of registration of birth. instrument and signed by the parent
(1) Within 1 year - if husband or any heirs concerned.
reside in the same city or municipality In the absence of the foregoing evidence, the
where the child was born or his birth was legitimate filiation shall be proved by:
recorded. (1) The open and continuous possession of the
status of a legitimate child; or
(2) Within 2 years - if the husband or all heirs
(2) Any other means allowed by the Rules of
live in the Philippines but do not reside in
Court and special laws.
the same city or municipality where the
child's birth took place or was recorded Legitimate children may establish their
filiation by any of the following [Art. 172]:
(3) Within 3 years - if the husband or all heirs
live outside the Philippines when the (1) Primary Evidence
child's birth took place or was recorded in
the Philippines  Their record of birth appearing in the
civil registry.
If the birth of the child has been concealed or
was unknown to the husband, the above  An admission of his filiation by his
periods shall be counted: parent in a public document or a
private handwritten instrument and
(1) From the discovery or knowledge of the signed by said parent
birth of the child, or
(2) Secondary Evidence
(2) From the discovery or knowledge of its
registration, whichever is earlier.  Proof of open and continuous
possession of status as legitimate
GENERAL RULE: Only the husband can child
impugn the legitimacy of a child. If he does
not bring an action within the prescribed  Any other means stated by the rules
periods, he cannot file such action anymore of court or special laws
thereafter, and this is also true with his heirs. Note: Only in the absence of primary evidence
EXCEPTION: That the heirs of the husband can secondary evidence be admitted
may file the action or continue the same Action for Claiming Filiation (Legitimate
within the periods prescribed in Art. 170 [Art. Children) [Art. 173]:
171]:
(a) The child can bring the action during his
(a) If the husband died before the expiration or her lifetime
of the period fixed for bringing his action
(b) If the child dies during minority or in a
(b) If he should die after the filing of the state of insanity, such action shall be
complaint without having desisted transmitted to his heirs, who shall have a
therefrom period of five years within which to
(c) If the child was born after the death of the institute the action.
husband. (c) The action commenced by the child shall
Sayson v. CA (1992): Legitimacy can only be survive notwithstanding the death of
attacked directly. either or both of the parties
B. PROOF OF FILIATION Rights of Legitimate Children [Art. 174]:
(a) To bear the Surnames of the father and
the mother, in conformity with the
provisions of the Civil Code on surnames
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(b) To receive support from their parents, Eceta v. Eceta (2004): Signature of the father
their ascendants, and in proper cases, on the birth certificate is considered as an
their brothers and sisters, in conformity acknowledgement of paternity and mere
with the provisions of the Code on presentation of a duly authenticated copy of
Support such certificate will successfully establish
filiation.
(c) To be entitled to the legitimate and other
Successional rights granted to them by Baluyut v. Baluyut (1990): Unsigned birth
the Civil Code certificates are not evidence of recognized
filiation.
C. ILLEGITIMATE CHILDREN
De Jesus v. Estate of Decedent Juan Gamboa
Art. 165. Children conceived and born outside Dizon (2001): The due recognition of an
a valid marriage are illegitimate, unless illegitimate child in a record of birth, a will, a
otherwise provided in this Code. statement before a court of record, or in any
Who are illegitimate children authentic writing, is in itself a consummated
act of acknowledgement of the child, and no
GENERAL RULE: Those conceived and born further court action is required.
outside of a valid marriage. [Art. 165]
SECONDARY EVIDENCE
EXCEPTIONS:
Jison v. CA (1998): Rule 130, Sec. 40 is limited
(1) Children of marriages void under Art. 36 to objects commonly known as family
(psychological incapacity); and possessions reflective of a family's reputation
(2) Under Art. 53 (subsequent marriages or tradition regarding pedigree like
which did not comply with Art. 52). inscriptions on tombstones, monuments, or
(Sempio-Dy) coffin plates.
Art. 175. Illegitimate children may establish Heirs of Rodolfo Bañas v. Heirs of Bibiano
their illegitimate filiation in the same way and Bañas (1985): "Su padre [Your father]" ending
on the same evidence as legitimate children. in a letter is only proof of paternal solicitude
and not of actual paternity. Signature on a
The action must be brought within the same report card under the entry of
period specified in Article 173, except when "Parent/Guardian" is likewise inconclusive of
the action is based on the second paragraph open admission.
of Article 172, in which case the action may be
brought during the lifetime of the alleged Gono-Javier vs. Court of Appeals (1994): Mere
parent. possession of status as an illegitimate child
does not make an illegitimate child
GENERAL RULE: Illegitimate children may recognized but is only a ground for bringing
establish their illegitimate filiation in the an action to compel judicial recognition by
same way and on the same evidence (primary the assumed parent.
or secondary) as legitimate children.
Perla v. Baring and Perla (2012): To prove open
Action for Claiming Filiation [Art. 175]: and continuous possession of the status of an
(a) For actions based on primary evidence, illegitimate child, there must be evidence of
the same periods stated in Art. 173 apply. the manifestation of the permanent intention
of the supposed father to consider the child
(b) For actions based on secondary evidence, as his, by continuous and clear
the action may only be brought during manifestations of parental affection and care,
the lifetime of the alleged parent. which cannot be attributed to pure charity.
PRIMARY EVIDENCE Meanwhile, the lack of participation of the
Mendoza v. Melia (1966): Baptismal supposed father in the preparation of a
certificates are given probative value only for baptismal certificate renders this document
births before 1930. Birth certificates must be incompetent to prove paternity. Baptismal
signed by the parents and sworn for it to be certificates are per se inadmissible in
admitted as evidence. evidence as proof of filiation and they cannot

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be admitted indirectly as circumstantial (b) However, may use the surname of father
evidence to prove the same if
De Jesus v. Syquia (1933): By "open and  Their filiation has been expressly
continuous possession of the status of a recognized by the father through the
legitimate child" is meant the enjoyment by record of birth appearing in the civil
the child of the position and privileges usually register; or
attached to the status of a legitimate child,
like bearing the paternal surname, treatment  There is an admission in a public
by the parents and family of the child as document or private handwritten
legitimate, constant attendance to the child's instrument made by the father.
support and education, and giving the child  Provided, the father has the right to
the reputation of being a child of his parents. institute an action before the regular
OTHER EVIDENCE courts to prove non-filiation during
his lifetime [RA 9255]
Agustin v. CA (2005): DNA evidence can be
used as proof of paternity. Grande v. Antonio (2014): The use of the word
“may” in Art. 176 readily shows that
Estate of Rogelio Ong v. Diaz (2007): DNA an acknowledged illegitimate child is under
evidence can still be used even after the no compulsion to use the surname of his
death of the parent. illegitimate father. The word “may” is
Lim v. CA (1975): Marriage certificates cannot permissive and operates to confer
be used as proof of filiation. discretion upon the illegitimate children.
Gotardo v. Buling (2012): There are four (c) Shall be entitled to Support in conformity
significant procedural aspects of a traditional with the Family Code
paternity action that parties have to face: (d) Legitime shall consist of one-half of the
a prima facie case, affirmative defenses, legitime of a legitimate child.
presumption of legitimacy, and physical
resemblance between the putative father and D. LEGITIMATED CHILDREN
the child. A prima facie case exists if a woman Art. 177. Children conceived and born outside
declares — supported by corroborative proof of wedlock of parents who, at the time of
— that she had sexual relations with the conception of the former, were not
putative father; at this point, the burden of disqualified by any impediment to marry each
evidence shifts to the putative father. Further, other, or were so disqualified only because
the two affirmative defenses available to the either or both of them were below eighteen
putative father are: (1) incapability of sexual (18) years of age, may be legitimated. (as
relations with the mother due to either amended by RA9858)
physical absence or impotency, or (2) that the
mother had sexual relations with other men GENERAL RULE: "Legitimated" children are
at the time of conception. illegitimate children who because of the
subsequent marriage of their parents are, by
Art. 176. Illegitimate children shall use the legal fiction, considered legitimate.
surname and shall be under the parental
authority of their mother, and shall be To be capable of legitimation:
entitled to support in conformity with this (1) The child must have been conceived and
Code. The legitime of each illegitimate child born outside of wedlock; and
shall consist of one-half of the legitime of a
legitimate child. Except for this modification, (2) The parents, at the time of the child's
all other provisions in the Civil conception, were not disqualified by any
Code governing successional rights shall impediment to marry each other, or
remain in force. disqualified only because either or both of
them were below 18 years old. (Art. 177 as
Rights of Illegitimate Children: amended by RA 9858)
(a) Use the Surname and be under the Procedure and Effects:
parental authority of the mother
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(a) Legitimation shall take place by a


subsequent valid marriage between
the parents. The annulment of a
voidable marriage shall not affect the
legitimation. [Art. 178]
(b) Effects of legitimation shall retroact
to the time of the child’s birth [Art.
180]
(c) Legitimation of children who died
before the celebration of the
marriage shall benefit their
descendants [Art. 181]
Grounds for impugning legitimation:
(1) The subsequent marriage of the child's
parents is void.
(2) The child allegedly legitimated is not
natural.
(3) The child is not really the child of the
alleged parents. (Sempio-Dy)
Rights:
The same as those of legitimate children [Art.
179]
Impugning legitimation [Art. 182]
(1) May be made only by those who are
prejudiced in their rights
(2) Within five years from the time their
cause of action accrues

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It requires a proceeding in rem, and may only


IX. Adoption be proven by a judicial decree issued by a
Adoption is a juridical act, which creates court of competent jurisdiction, not by open
between two persons a relationship similar to and continuous cohabitation.
that which results from legitimate paternity
and filiation.

LEGITIMATION ADOPTION

The law merely makes legal what exists The law creates by fiction a relation
Legal effect
by nature which did not in fact exist

Persons affected Natural children Strangers (generally)

Procedure Extrajudicial acts of parents Always by judicial decree

Both parents
Except when:
 One spouse seeks to adopt the
legitimate child of the other
Who should apply Both parents  One spouse seeks to adopt his own
illegitimate child, provided that the
other spouse has signified their
consent thereto
 Spouses are legally separated from
each other

Same status and rights with that of a Creates a relationship only between the
Effect on parent- legitimate child not only in relation to the child and the adopting parents [Sayson
child relationship legitimizing parents but also to other v. CA (1992)]
relatives

RA 8552 – Domestic Adoption Law (February biological parent of the adoptee or is


25, 1998) the spouse of the adoptee’s parent
A. WHO CAN ADOPT (f) In a position to support and care for
his/her children in keeping with the
A. Filipino Citizens (Sec. 7a) means of the family
(a) Of legal age (g) Has undergone pre-adoption services
(b) With full civil capacity and legal rights B. Aliens (Sec. 7b)
(c) Of good moral character and has not Same for Filipinos provided further that:
been convicted of any crime involving
moral turpitude (1) His/her country has diplomatic
relations with the Philippines
(d) Emotionally and psychologically
capable of caring for children (2) Has been living in the Philippines for
3 continuous years prior to the filing
(e) At least sixteen (16) years older than of application and maintains such
adoptee, except when adopter is residence until the decree is entered
(provided that absences not
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exceeding 60 days per 1 year for (e) A child whose previous adoption has
professional, business, or emergency been rescinded
reasons are allowed)
(f) A child whose biological or adoptive
(3) Has been certified by his/her parent(s) has died, provided that no
diplomatic or consular office or any proceedings shall be initiated within 6
appropriate government agency that months from the time of death of said
he/she has the legal capacity to parent(s)
adopt in his/her country
(4) His/her government allows the
Exceptions to the Requirement of a
adoptee to enter his/her country as
Certification that the Child is Available for
his/her adoptee and reside there
Adoption (Sec. 4):
permanently as an adopted child
(5) Has submitted all the necessary  Adoption of an illegitimate child by
clearances and such certifications as his/her biological parent;
may be required  Adoption of a child by his/her
**Requirements in 3, 4 and 5 may be stepparent;
waived under the following circumstances:  Adoption by a relative within the 4th
(a) Adopter is a former Filipino Citizen civil degree by consanguinity or
who seeks to adopt a relative within affinity
the 4th degree of consanguinity or Persons whose written consent is necessary
affinity for adoption (Sec. 9)
(b) Adopter seeks to adopt the legitimate (1) The prospective adoptee if 10 years or
or illegitimate child of his/her Filipino older
spouse
(2) The prospective adoptee’s biological
(c) Adopter is married to a Filipino parents, legal guardian or the
Citizen and seeks to adopt jointly with government instrumentality or
his/her spouse a relative within the institution that has custody of the
4th degree of consanguinity or affinity child
of the Filipino spouse
(3) The prospective adopters’ legitimate
C. Guardians and adopted children who are 10
With respect to their wards, after the years or older
termination of the guardianship and (4) The prospective adopters’ illegitimate
clearance of his/her accountabilities. children, if any, who are 10 years or
B. WHO CAN BE ADOPTED (SEC. 8) older and living with them

(a) Minor who has been administratively (5) The spouse, if any, of the person
or judicially declared available for adopting or to be adopted.
adoption Note: A decree of adoption shall be effective
(b) Legitimate child of one spouse by as of the date the original petition was filed. It
another also applies in case the petitioner dies before
the issuance of the decree of adoption to
(c) Illegitimate child by a qualified protect the interest of the adoptee.
adopter to improve the child’s status
to that of legitimacy C. PRE-ADOPTION PROCEDURES
(d) A person of legal age if, prior to the
adoption, said person has been 1. Voluntary Commitment of biological
consistently considered and treated parent(s) wanting to put their child up for
by the adopter(s) as his/her child adoption
since minority

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Counseling on their options other than adoption - Written certification that a


local/national radio/TV case was
aired on 3 different occasions
- Publication in 1 newspaper of
Explaining to them the implications of losing their
general circulation
parental authority over the child
- Police report / barangay
certification of due diligence
- Returned registered mail to last
Continuing services shall be provided after
known address of parents
relinquishment to cope with feelings of loss, etc. and
other services for the reintegration to the community (c) Birth certificate, if available
of the biological parent(s) (d) Recent photo and photo upon
abandonment of child

Biological parent(s) who decide to keep the child


shall be provided with adequate services and
assistance to fulfill their parental responsibilities

Biological parent(s) who decide to put the child for


adoption shall sign the Deed of Voluntary
Commitment (DVC), which shall be rescissible
within 3 months from signing of the same

2. Involuntary Commitment of abandoned or


neglected child

Filing of a petition at Regional DSWD in the form of


an affidavit and with the required supporting
documents

Posting of the petition, then recommendation by the


Regional Director of the DSWD (5 days each)

Issuance of certification by DSWD Secretary


declaring the child legally available for adoption
within 3 months following involuntary commitment

3. Required supporting documents for a


petition for the declaration of involuntary
commitment:
(a) Social Case Study Report by DSWD /
LGU / institution charged with child’s
custody
(b) Proof of efforts to locate the child’s
parents/known relatives
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D. ADOPTION PROCEDURES

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Note: Art. 190 (as amended). Legal or intestate


succession to the estate of the adopted
 DSWD must certify the child as shall be governed by the following rules:
legally available for adoption as a
prerequisite for adoption proceeding. (1) Legitimate and illegitimate
(R.A. 9253) children, descendants and the
surviving spouse of the adoptee shall
 After the decree of adoption, the inherit in accordance with the
court may also issue a travel ordinary rules of legal/intestate
authority, if needed. succession
The case study report by the DSWD/LGU is (2) When the surviving spouse OR
indispensable. Without it, the adoption illegitimate children AND adopters
decree shall be void. [DSWD v. Judge Belen concur, they shall inherit on a 50-50
(1997)] basis
E. WHO MAY NOT ADOPT/ BE (3) When the surviving spouse AND
ADOPTED illegitimate children AND adopters
Art. 184 (as amended by RA 8552) concur, they shall inherit on a 1/3-
/1/3-1/3 basis
The following may not adopt:
(4) When only adopters survive, they
(1) The guardian, with respect to the shall inherit 100% of the estate
ward, prior to the approval of the final
accounts rendered upon the (5) When only collateral blood
termination of the guardianship relatives survive, ordinary rules of
legal or intestate succession shall
(2) Any person convicted of a crime of apply
moral turpitude
(d) Name [CC, Art. 365.]
F. RIGHTS OF AN ADOPTED CHILD
An adopted child shall bear the surname
(a) Parental Authority [Sec. 16] of the adopter
Except in cases where the biological RA 8552 allows the change of first name
parent is the adopter’s spouse, all legal to be instituted in the same proceeding as
ties between biological parent and the adoption: “the decree of adoption
adoptee shall be severed, and the same shall state the name by which the child is
shall then be vested on the adopters. to be known.”
(b) Legitimacy [Sec. 17] The law is silent as to what middle name
The adoptee shall be considered the the adoptee may use but the SC has held
legitimate son/daughter of the adopters that an adoptee is entitled to all the rights
for all intents and purposes, and as such provided by law to a legitimate child,
is entitled to all rights and obligations including the right to bear the surname of
provided by law to legitimate children her father and mother. [In re: Adoption of
born to them without discrimination of Stephanie Nathy Astorga Garcia (2005)]
any kind. (e) Nationality
(c) Succession [Sec. 18] Adoption does not confer citizenship: Sec.
In legal and intestate succession, the 3, Art. 4 of the Constitution: Philippine
adopter and the adoptee shall have citizenship may be lost/acquired [only] in
reciprocal rights of succession without the manner provided by law.
distinction from legitimate filiation. The right to confer citizenship belongs to
However, if the adoptee and his/her the State (political) and cannot be granted
biological parents had left a will, the law by a citizen through adoption. Adoption
on testamentary succession shall govern. creates a relationship between the
adopter and adoptee, not between the
State and the adoptee.
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(3) Court shall order the Civil Registrar to


cancel the amended certificate of birth of
G. RESCISSION OF ADOPTION the adoptee and restore his/her original
Adoptee may file action for rescission, with birth certificate
the assistance of DSWD if he/she is a minor (4) Succession rights shall revert to its status
or over 18 but incapacitated, based on the ff prior to adoption, but only as of the date
grounds (Sec. 19): of judgment of judicial rescission
(1) Repeated physical and verbal (5) Vested rights prior to judicial rescission
maltreatment by adopters despite having shall be respected
undergone counseling
Note: Rescission contemplates a situation
(2) Attempt on life of adoptee where the adoption decree remains valid until
(3) Sexual assault or violence its termination
(4) Abandonment or failure to comply with H. RECTIFICATION OF SIMULATED
parental obligations BIRTH
Note: Adoption, being in the best interest of Simulation of birth is the tampering of LCR
the child, shall not be subject to rescission by records to make it appear that a certain child
the adopter. However, the adopter may was born to a person who is not his/her
disinherit the child based on causes biological parent, causing said child to lose
enumerated in CC, Art. 919: his/her true identity/status.
(1) Conviction of an attempt on the life of the Sec. 21-b (RA 8552) Any person who shall
adopter cause the fictitious registration of the birth of
(2) Having accused, without grounds, the a child under the name(s) of a person(s) who
adopter of a crime punishable by is not his/her biological parent(s) shall be
imprisonment for more than 6 years guilty of simulation of birth, and shall be
punished by prision mayor in its medium
(3) Conviction of adultery/concubinage with period and a fine not exceeding P50,000.00.
the adopter’s spouse
Sec. 22 (RA 8552) A person who has, prior to
(4) Having caused the adopter to make or the effectivity of RA 8552, simulated the birth
change a will by force, intimidation or of a child shall not be punished for such act,
undue influence PROVIDED:
(5) Refusal without just cause to support the - The simulation was for the child’s best
adopter interest
(6) Maltreatment of the adopter by - Child has been treated consistently as
word/deed his own
(7) Living a dishonorable/disgraceful life - Petition filed within 5 years of RA
(8) Conviction of a crime which carries with it 8552’s effectivity (2003)
the penalty of civil interdiction Three-in-one Procedure
Effects of Rescission [Sec. 20]: - Correction of entries in birth certificate
(1) Parental authority of the adoptee's - Deed of Voluntary Commitment or
biological parents, if known, OR the legal Declaration of abandonment
custody of the DSWD shall be restored IF
the adoptee is still a minor or - Adoption decree
incapacitated I. RA 8043 – THE LAW ON INTER-
(2) Reciprocal rights and obligations of the COUNTRY ADOPTION (JUNE 7, 1995)
adopters and the adoptee shall be
INTER-COUNTRY ADOPTION refers to the
extinguished
socio-legal process of adopting a Filipino
child by a foreigner or a Filipino citizen
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permanently residing abroad where the I.2. WHO CAN BE ADOPTED


petition is filed, the supervised trial custody is
(a) Only a legally-free child may be the
undertaken, and the decree of adoption is
subject of inter-country adoption.
issued outside the Philippines
(b) A legally-free child is one who has been
I.1. WHO CAN ADOPT
voluntarily or involuntarily committed to
Any foreign national or a Filipino citizen the DSWD of the Philippines, in
permanently residing abroad who has the accordance with the Child and Youth
qualifications and none of the Welfare Code.
disqualifications under the Act may file an
(c) No child shall be matched to a foreign
application if he/she:
adoptive family unless it is satisfactorily
(a) Is at least 27 years of age and at least 16 shown that the child cannot be adopted
years older than the child to be adopted, locally (last resort).
at the time of application unless the
(d) In order that such child may be
adopter is the parent by nature of the
considered for placement, the following
child to be adopted or the spouse of such
documents must be submitted to the
parent
Board:
(b) If married, his/her spouse must jointly file
for the adoption  Child study

(c) Has the capacity to act and assume all  Birth Certificate / Foundling
rights and responsibilities of parental Certificate
authority under his national laws, and has  Deed of Voluntary Commitment/
undergone the appropriate counseling Decree of Abandonment/ Death
from an accredited counselor in his/her Certificate of parents
country
 Medical Evaluation / History
(d) Has not been convicted of a crime
involving moral turpitude  Psychological Evaluation, as
necessary
(e) Is eligible to adopt under his/her national
law  Recent photo of the child
(f) Is in a position to provide the proper care Where the petition for adoption was granted
and support and to give the necessary after the child had shot and killed a girl, the
moral values and example to all his Supreme Court did not consider the
children, including the child to be retroactive effect given to the decree of
adopted adoption so as to impose a liability upon
adopting parents at a time when adopting
(g) Agrees to uphold the basic rights of the
parents had no actual or physically custody
child as embodied under Philippine laws,
over the child. Retroactive effect may perhaps
the U.N. Convention on the Rights of the
be given to the granting of the petition for
Child, and to abide by the rules and
adoption where such is essential to permit
regulations issued to implement the
the accrual of some benefit or advantage in
provisions of this Act
favor of the adopted child. In the instant case,
(h) Comes from a country with whom the however, to hold that parental authority had
Philippines has diplomatic relations and been retroactively lodged in the adopting
whose government maintains a similarly parents so as to burden them with liability for
authorized and accredited agency and a tortuous act that they could not have
that adoption is allowed under his/her foreseen and which they could not have
national laws prevented would be unfair and
(i) Possesses all the qualifications and none unconscionable. [Tamargo v. CA (1992)]
of the disqualifications provided in Adoption is a juridical act, proceeding in rem.
applicable Philippine laws. Because it is artificial, the statutory
requirements in order to prove it must be
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strictly carried out. Petition must be


announced in publications and only those X. Support
proclaimed by the court are valid. Adoption is A. WHAT IT COMPRISES
never presumed. [Lazatin v. Campos (1979)]
Consists of everything indispensable for
Validity of facts behind a final adoption sustenance, dwelling, clothing, medical
decree cannot be collaterally attacked attendance, education and transportation, in
without impinging on that court’s jurisdiction. keeping with the financial capacity of the
[Santos v. Aranzanso (1966)] family. [Art. 194]
Participation of the appropriate government
 Education includes a person’s schooling
instrumentality in performing the necessary
or training for some profession, trade or
studies and precautions is important and is
vocation, the right to which shall
indispensable to assure the child’s welfare.
subsist beyond the age of majority. (Art.
[DSWD v. Belen (1997)]
194)
Consent for adoption must be written and
notarized. [Landingin v. Republic (2006)]  Transportation includes expenses in
going to and from school, or to and
Adopted children do not have a right to from place of work. (Art. 194)
represent their adopters in successional
interests. Although an adopted child is B. WHO ARE OBLIGED
deemed to be a legitimate child and have the  To support each other:
same rights as the latter, these rights do not
include the right of representation (because o Spouses;
the adopted child has no right to inherit from o Legitimate ascendants and
the grandparent). The relationship created by descendants;
the adoption is between only the adopting
parents and the adopted child. It does not o Parents and their children (legitimate
extend to the blood relatives of either party. and illegitimate) and the children of
[Sayson v. CA (1992)] the latter (legitimate and
illegitimate);
o Legitimate brothers and sisters,
whether of full or half-blood; [Art.
195]
o Illegitimate brothers and sisters,
whether of full or half-blood, except
when the need for support of one (of
age) is due to a cause imputable to
his/her fault or negligence. [Art. 196]
Note: Both legitimate and illegitimate
children are entitled to support. The only
difference is the source of support, which for
illegitimate children is the parent’s separate
properties. Where the illegitimate parent is
legally married to another person, their CPG
or ACP cannot answer for support for the
illegitimate child of one of them unless the
parent has no adequate separate property, in
which case support will be taken from the
CPG or ACP subject to reimbursement (Arts.
122, 197, FC).
 Order of support:
o If there are multiple obligors
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▪ Spouse share upon liquidation of such regime. [Art.


197]
▪ Descendants, nearest in degree Even if the parents-in-law were the ones who
called for the physician’s services for the
▪ Ascendants, nearest in degree
childbirth of their daughter-in-law, it is the
▪ Brothers and Sisters [Art. 199] woman’s husband who is bound to pay the
fees due to the physician. (Pelayo v. Lauron
The order of liability among ascendants and (1909))
descendants would be: (1) legitimate children
and descendants, (2) legitimate parents and The amount of support is variable and, for
ascendants, (3) illegitimate children and their this reason, no final judgment on the amount
descendants. (Tolentino) of support is made as the amount shall be in
proportion to the resources or means of the
When two or more are obliged to give giver and the necessities of the recipient.
support, the payment shall be divided (Gotardo v. Buling (2012))
between them in proportion to their
resources.  Stranger gives support
Also, in case of urgent need and by special When, without the knowledge of the person
circumstances, judge may order only one obliged to give support, it is given by a
obligor to furnish support without prejudice stranger, the stranger has the right to claim
to reimbursement from other obligors of the the same from the person obliged, unless it
share due from them. [Art. 200] appears that he gave it without intention of
being reimbursed. [Art. 206]
 If there are multiple recipients and only
one obligor, and the latter has no  Person obliged refuses or fails to give
sufficient means to satisfy all claims: support
o Observe order in Article 199 as to When the person obliged to give support
whose claim shall be satisfied first; unjustly refuses or fails to give support when
urgently needed, any third person may
o But if the concurrent obligees are the furnish support to the needy individual, with
spouse and a child subject to parental right of reimbursement from the person
authority, the child shall be preferred. obliged to give support. This particularly
The above preference given to a child under applies when the father or mother of a minor
parental authority over the spouse should child unjustly refuses to support or fails to
prevail only if the person obliged to support give support to the child when urgently
pays it out of his separate property. So if the needed. [Art. 207]
support comes from ACP or CPG, the above  Contractual support or that given by will
rule of preference for the child does not
apply. (Tolentino) The excess in amount beyond that
required for legal support shall be subject
Properties answerable for support to levy on attachment or execution. [Art.
CPG or ACP shall answer for the support of 208]
the spouse, their common children, and the Reason: The amount of support agreed
legitimate children of either spouse (Arts. 94 upon in the contract or given in the will
and 121, FC) can be more than what the recipient
For legitimate ascendants; [all other] needs (Sempio-Diy).
descendants, whether legitimate or Furthermore, contractual support shall
illegitimate; and brothers and sisters, be subject to adjustment whenever
whether legitimately or illegitimately related: modification is necessary due to changes
from the separate property of the obligor. If in circumstances manifestly beyond the
no separate property, the ACP/CPG (if contemplation of the parties. [Art. 208]
financially capable) shall advance the
support, to be deducted from the obligor’s

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C. SUPPORT PENDING LITIGATION ON


THE STATUS OF MARRIAGE
XI. Parental Authority
Pending legal separation or annulment, and and Custody of
for declaration of nullity, support pendente
lite for spouses and children will come from Children
the ACP/CPG. After final judgment granting Parental authority is the mass of rights and
the petition, mutual support obligation obligations which parents have in relation to
between spouses ceases. (But in legal the person and property of their children until
separation, court may order guilty spouse to their emancipation, and even after this under
give support to innocent spouse.) [Art. 198] certain circumstances (Manresa).
Note: In Art. 100, de facto separation does not Parental authority includes [Art. 209]:
affect the ACP and the CPG, except that the
spouse who leaves the conjugal home (1) The caring for and rearing of children
without just cause shall not be entitled to for civic consciousness and efficiency;
support. (2) The development of the moral,
D. AMOUNT mental and physical character and
well-being of said children
The amount of support is in proportion to the
means of the provider and the needs of the Parental authority and responsibility may not
receiver, and can be reduced or increased if be renounced or transferred except in the
such circumstances change. [Arts. 201, 202] cases authorized by law. [Art. 210]

E. WHEN DEMANDABLE [ART. 203] CASES WHEN PARENTAL AUTHORITY AND


RESPONSIBILITY MAY BE TRANSFERRED
 The obligation to give support shall be OR RENOUNCED:
demandable from the time the person
• Adoption;
who has a right to receive the same needs
it for maintenance, but it shall not be paid • Guardianship; or
except from the date of judicial or extra-
• Commitment of the child in an entity or
judicial demand.
institution engaged in child care or in a
 Support pendente lite may be claimed in children’s home
accordance with the Rules of Court. RULES AS TO THE EXERCISE OF PARENTAL
 Payment shall be made within the first 5 AUTHORITY:
days of each corresponding month. When • Jointly exercised by the father and mother
the recipient dies, his heirs shall not be over their common children, but in case of
obliged to return what he has received in disagreement, the father's decision shall
advance. prevail, unless there is a judicial order to the
F. OPTIONS contrary [Art. 211]

 Payment of the amount; or • Exercised by the mother if the child is


illegitimate [Art.176]
 Receiving and maintaining the recipient
• Children under parental authority shall
in the home of the provider, unless there
always observe respect and reverence
is a legal or moral obstacle for doing so.
towards their parents and are obliged to
G. ATTACHMENT obey them [Art. 211]
The right to receive support as well as any CHARACTERISTICS OF PARENTAL
money or property obtained as such support AUTHORITY:
shall not be levied upon on attachment or (1) Natural right and duty of parents [Art.
execution. [Art. 205] 209, FC]
This is to protect that which the law gives to
the recipient against want and misery.
(Tolentino)
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(2) Cannot be renounced, transferred or account all relevant


waived, except in cases authorized by considerations, especially the
law [Art 210, FC] choice of the child over seven
years of age, unless the
(3) Jointly exercised by the father and the
grandparent chosen is unfit
mother [Art. 211, FC]
Descendant’s Privilege of Refusal to Testify
(4) Purely personal and cannot be
[Art. 215]: No descendant shall be compelled,
exercised through agents
in a criminal case, to testify against his
(5) Temporary parents and grandparents.
PARENTAL PREFERENCE RULE: Exception: When such testimony is
indispensable in (1) a crime against the
The natural parents, who are of good
descendant, or (2) a crime by one parent
character and who can reasonably provide for
against the other.
the child, are ordinarily entitled to custody as
against all persons. [Santos v CA (1995)]
WHO EXERCISES AUTHORITY IN CASES OF Tender Years Presumption:
DEATH, ABSENCE, UNSUITABILITY,
NO child under 7 years of age shall be
REMARRIAGE, OR SEPARATION OF
separated from the mother, unless the court
PARENTS:
finds compelling reasons to order otherwise.
(1) In case one parent is absent or already [Art. 213 par 2; Art. 363, NCC; Gamboa v. CA
dead, the present or surviving parent (2007)]
[Art. 212]
Examples of compelling reasons for custody to
Remarriage of the surviving parent shall not be granted to the father:
affect his/her parental authority over the
(1) When the mother is insane;
children, unless the court appoints another
person to be the guardian of the children or (2) With a communicable disease that might
their property [Art. 212] endanger the life or health of the child;
(2) In case of a void/annulled marriage, (3) Is maltreating the child; or
and there is no agreement between
(4) Has another child by another man who
spouses, the parent designated by
lives with her. [Cervantes v. Fajardo
the court [Art. 43 par. 1; Art. 49]
(1989)]
(3) Innocent spouse gets custody of minor
Note: Alleged lesbianism [Gualberto v.
children in legal separation [Art. 63
Gualberto (2005)], prostitution or infidelity to
par. 3]
husband does not necessarily make a mother
(4) The court shall take into account all unfit as parent. It must be shown that such
relevant considerations, especially lesbianism, prostitution or infidelity adversely
the choice of the child over seven affect the child.
years of age, unless the parent
PERSONS EXERCISING SUBSTITUTE
chosen is unfit [Art. 213 par. 1]
PARENTAL AUTHORITY IN DEFAULT OF
(5) Substitute parental authority [Art. PARENTS OR JUDICIALLY APPOINTED
214] GUARDIAN (IN THIS ORDER):
(a) In case of death, absence or • The surviving grandparent [Art. 214, FC]
unsuitability of the parents,
• Oldest brother or sister, over 21 years old,
substitute parental authority
unless unfit or unqualified.
shall be exercised by the
surviving grandparent • Child’s actual custodian, over 21 years old,
unless unfit or unqualified.
(b) When several grandparents
survive, the one designated Note: The same order applies to the
by the court shall exercise appointment of judicial guardian over the
parental authority, taking into property of the child
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XII. Emancipation
SUBSTITUTE PARENTAL AUTHORITY OVER
DISADVANTAGED CHILDREN [Art. 217] Art. 234. Emancipation takes place by the
attainment of majority. Unless otherwise
Entrusted in summary judicial proceedings to: provided, majority commences at the age of
(1) Heads of children’s homes eighteen years.
(2) Orphanages Art. 236. Emancipation shall terminate
parental authority over the person and
(3) Similar institutions duly accredited by the property of the child who shall then be
proper government agency (such as the qualified and responsible for all acts of civil
DSWD) life, save the exceptions established by
Who are disadvantaged children: existing laws in special cases.
(1) Foundlings – one who is deserted or Contracting marriage shall require parental
abandoned as an infant or a child, with consent until the age of twenty-one.
parents, guardian, or relatives being Nothing in this Code shall be construed to
unknown or one who is committed in an derogate from the duty or responsibility of
orphanage or charitable or similar parents and guardians for children and wards
institution with unknown facts of birth below twenty-one years of age mentioned in
and parentage the second and third paragraphs of Article
(2) Abandoned – one who has no proper 2180 of the Civil Code.
parental care or guardianship, or whose Persons between ages twenty-one and
parents or guardians have deserted him twenty-four, shall be obliged to ask their
for a period of at least six continuous parents or guardian for advice upon the
months intended marriage.
(3) Neglected – one whose basic needs have
 No advice or unfavorable advice: marriage
been deliberately unattended or
license shall not be issued till after three
inadequately attended
months following the completion of the
(4) Abused – one who is taken advantage of, publication of the application therefor
exploited and maltreated
 Sworn statement by the contracting
(5) Others similarly situated parties that advice has been sought,
PERSONS EXERCISING SPECIAL PARENTAL together with written advice if any or
AUTHORITY [Art. 218] refusal to give advice: attached to the
application for the marriage license [Art.
(1) School, its administrators and teachers; 15, FC]
or
RA 6809:
(2) The individual, entity or institution
engaged in child care By virtue of this law, emancipation can no
longer take place by virtue of the minor’s
Note: Exercised over minor child while under marriage or by the concession of the parents
their supervision, instruction or custody. to a minor in a recorded public instrument.

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show cause why the petition should not


XII. Summary Judicial be granted, on or before the date set in
Proceedings Under FC said notice for the initial conference.
(2) The notice shall be accompanied by a
A. PROCEDURAL RULES PROVIDED copy of the petition and shall be served at
FOR IN THIS TITLE SHALL APPLY TO the last known address of the spouse
[ART. 238]: concerned. [Art. 242]
(1) Separation in fact between husband and Procedure:
wife
(1) A preliminary conference shall be
(2) Abandonment by one of the other conducted by the judge personally
(3) Incidents involving parental authority without the parties being assisted by
counsel.
B. SEPARATION IN FACT
(2) After the initial conference, if the court
A verified petition alleging the following facts deems it useful, the parties may be
is required when [Art. 239]: assisted by counsel at the succeeding
conferences and hearings. [Art. 243]
 A husband and wife are separated in fact;
or, (3) If the petition is not resolved at the initial
conference, said petition shall be
 One has abandoned the other decided in a summary hearing. Basis of
Situation: Where one of them seeks judicial summary hearing (at the sound
authorization for a transaction where the discretion of the court):
consent of the other spouse is required by law • Affidavits
but such consent is withheld or cannot be
obtained • Documentary evidence
The petition shall: • Oral testimonies at the court’s sound
discretion. If testimony is needed, the
(1) Attach the proposed deed, if any, court shall specify the witnesses to be
embodying the transaction, if none, shall heard and the subject-matter of their
describe in detail the said transaction and testimonies, directing the parties to
state the reason why the required consent present said witnesses. [Art. 246(a)]
thereto cannot be secured.
When appearance of spouses required:
(2) The final deed duly executed by the
parties shall be submitted to and 1. In case of non-appearance of the spouse
approved by the court. (Art. 239) whose consent is sought, the court shall
inquire into the reasons for his failure to
Separate Claim for Damages: Claims for appear, and shall require such
damages by either spouse, except costs of the appearance, if possible. [Art. 244]
proceedings, may be litigated only in a
separate action. [Art. 240] 2. If, despite all efforts, the attendance of the
non-consenting spouse is not secured, the
Jurisdiction: Jurisdiction over the petition court may proceed ex parte and render
shall, upon proof of notice to the other judgment as the facts and circumstances
spouse, be exercised by the proper court may warrant. In any case, the judge shall
authorized to hear family cases, if one exists, endeavor to protect the interests of the
or in the regional trial court or its equivalent non-appearing spouse. [Art. 245]
sitting in the place where either of the
spouses resides. [Art. 241] Nature of judgment: The judgment of the
court shall be immediately final and
Notification to other spouse: executory. [Art 247]
(1) Upon the filing of the petition, the court Rules applicable for administering or
shall notify the other spouse, whose encumbering separate property of spouse: The
consent to the transaction is required, of petition for judicial authority to administer or
said petition, ordering said spouse to
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encumber specific separate property of the spouse is incapacitated or unable to


abandoning spouse and to use the fruits or participate in the administration;
proceeds thereof for the support of the family administration of partnership property
shall also be governed by these rules. [Art. in a disagreement and the wife takes
248] recourse within five years, [Art. 124]
C. INCIDENTS INVOLVING PARENTAL When wife and husband are de facto
AUTHORITY separated and the CPG is insufficient, the
spouse present shall, upon a petition, be
Procedure given judicial authority to administer or
(1) Such petitions shall be verified and filed encumber any specific property of the other
in the proper court of the place where spouse and use the fruits and proceeds
the child resides. [Art. 250] thereof to satisfy the latter’s share. [Art. 127]
(2) Upon the filing of the petition, the court
shall notify the parents or, in their
absence or incapacity, the individuals,
entities or institutions exercising
parental authority over the child. [Art.
251]
Note:
• Petitions filed under Articles 223, 225 and
235 of this Code involving parental
authority shall be verified. [Art. 249]
• The rules in Chapter 2 hereof shall also
govern summary proceedings under this
Chapter insofar as they are applicable
[Art. 253]
• The foregoing rules in Chapter 2
(Separation in Fact) and (Incidents
Involving Parental Authority) hereof shall
likewise govern summary proceedings
filed
 Declaration of presumptive death [Art.
41]
 Delivery of presumptive legitime [Art.
51]
 Fixing of family domicile [Art. 69]
 Disagreements regarding one spouse’s
profession, occupation, business, or
activity [Art. 73]
 Disposition or encumbrance of
common property in ACP where one
spouse is incapacitated or unable to
participate in the administration;
administration of absolute community
in a disagreement and the wife takes
recourse within five years [Art. 96]
 Disposition or encumbrance of
common property in CPG where one
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The Council for the Protection of Children


XIII. Care and shall look after the welfare of children in the
Education of Children municipality.
Functions:
Every child:
(1) Foster the education of every child in the
(1) Is entitled to parental care; municipality
(2) Shall receive at least elementary (2) Encourage the cultivation of the duties of
education; parents
(3) Shall be given moral and civic training by (3) Protect and assist abandoned or
the parents or guardian; mistreated children, and orphans
(4) Has a right to live in an atmosphere (4) Take steps to prevent juvenile
conducive to his physical, moral and delinquency
intellectual development. [Art. 356, NCC]
(5) Adopt measures for the health of
Duties of the child: children
(1) Obey and honor his parents or guardian; (6) Promote the opening and maintenance
(2) Respect his grandparents, old relatives, of playgrounds
and persons holding substitute parental (7) Coordinate the activities of organizations
authority; devoted to the welfare of children, and
(3) Exert his utmost for his education and secure their cooperation. [Art. 360, NCC]
training; (8) Juvenile courts will be established, as far
(4) Cooperate with the family in all matters as practicable, in every chartered city or
that make for the good of the same. [Art. large municipality.[Art. 361, NCC]
357, NCC] Whenever a child is found delinquent by any
Every parent and every person holding court, the father, mother, or guardian may in
substitute parental authority shall see to it a proper case be judicially admonished. [Art.
that the rights of the child are respected and 362, NCC]
his duties complied with, and shall
particularly, by precept and example, imbue
the child with high-mindedness, love of
country, veneration for the national heroes,
fidelity to democracy as a way of life, and
attachment to the ideal of permanent world
peace. [Art. 358, NCC]
The government promotes the full growth of
the faculties of every child.
The government will establish, whenever
possible:
(1) Schools in every barrio, municipality and
city where optional religious instruction
shall be taught as part of the curriculum
at the option of the parent or guardian;
(2) Puericulture and similar centers;
(3) Councils for the Protection of Children;
(4) Juvenile courts. [Art. 359, NCC]

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surname employed before the legal


XIV. Surnames separation. [Art. 372]
A. SURNAMES OF CHILDREN (4) A widow may use the deceased husband's
(1) Legitimate and legitimated children shall surname as though he were still living, in
principally use the surname of the father. accordance with Article 370. [Art 373]
[Art. 364] C. CONFUSION AND CHANGE OF
(2) An adopted child shall bear the surname NAMES
of the adopter. [Art. 365] In case of identity of names and surnames,
(3) A natural child acknowledged by both the younger person shall be obliged to use
parents shall principally use the surname such additional name or surname as will
of the father. If recognized by only one of avoid confusion. [Art. 374]
the parents, a natural child shall employ In case of identity of names and surnames
the surname of the recognizing parent. between ascendants and descendants, the
[Art 366] word "Junior" can be used only by a son.
(4) Natural children by legal fiction shall Grandsons and other direct male
principally employ the surname of the descendants shall either [Art. 375]:
father [Art. 367] (1) Add a middle name or the mother's
(5) Illegitimate children referred to in Article surname, or
287 shall bear the surname of the (2) Add the Roman Numerals II, III, and so
mother. [Art 368] on.
(6) Children conceived before the decree Usurpation of a name and surname may be
annulling a voidable marriage shall the subject of an action for damages and
principally use the surname of the father. other relief. [Art. 377]
[Art. 369]
The unauthorized or unlawful use of another
B. WIFE AFTER AND DURING person's surname gives a right of action to
MARRIAGE the latter [Art. 378]
(1) A married woman may use [Art. 370]: The employment of pen names or stage
(a) Her maiden first name and surname names is permitted, provided it is done in
and add her husband's surname, or good faith and there is no injury to third
persons. Pen names and stage names cannot
(b) Her maiden first name and her be usurped. [Art. 379]
husband's surname or
Except as provided in the preceding article,
(c) Her husband's full name, but no person shall use different names and
prefixing a word indicating that she is surnames. [Art 380]
his wife, such as "Mrs."
Illegitmate Children shall use the surname
(2) In case of annulment of marriage, and the and shall be under the parental authority of
wife is the guilty party, she shall resume their mother. However, they may use the
her maiden name and surname. If she is surname of their father if their filiation has
the innocent spouse, she may resume her been expressly recognized by their father
maiden name and surname. However, she through:
may choose to continue employing her
former husband's surname, unless [Art. (a) record of birth in civil register
371]: (b) admission in public document
(a) The court decrees otherwise, or (c) admission in private handwritten
(b) She or the former husband is document
married again to another person.
(3) When legal separation has been granted,
the wife shall continue using her name and
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XV. Rules Governing Article 41. A marriage contracted by any


person during subsistence of a previous
Persons who are marriage shall be null and void, unless
before the celebration of the subsequent
Absent marriage, the prior spouse had been absent
for four consecutive years and the spouse
A. PROVISIONAL MEASURES IN CASE present has a well founded belief that the
OF ABSENCE [ARTS. 381-383] absent spouse was already dead. In case of
disappearance where there is danger of
Art. 43. If there is a doubt as between two or death under the circumstances set forth in
more persons who are called to succeed the provisions of Article 391 of the Civil
each other as to which of them died first Code, an absence of only two years shall be
whoever alleges the death of one prior to sufficient.
the other shall prove the same; in the
absence of proof it is presumed that they General rule: Marriage contracted by any
died at the same time and there shall be no person during the subsistence of a previous
transmission of rights from one to the other. marriage is void.
Note: Article 43 provides a statutory Exceptions: The following subsequent
presumption when there is doubt on the marriage of the present spouse is valid:
order of death between persons who are (1) Subsequent marriage due to ordinary
called to succeed each other (only). absence where:
Presumption in the Rules of Court (Rule 131, (a) The prior spouse had been absent for
sec. 3, (jj.) (Presumption of survivorship) 4 consecutive years;
Age Presumed Survivor (b) The spouse present had a well-
founded belief that absent spouse is
Both under 15 Older dead; and
(c) Judicial declaration of presumptive
Both above 60 Younger death was secured (no prejudice to
the effect of the reappearance of the
One under 15, the One under 15 absent spouse).
other above 60
(2) Subsequent marriage due to
extraordinary absence where:
Both over 15 and Male
under 60; different (a) The prior spouse had been missing
sexes for 2 consecutive years;
(b) There is danger of death attendant to
Both over 15 and Older the disappearance [Art. 391, Civil
under 60; same sex Code];
(c) The spouse present had a well-
One under 15 or over One between 15 and founded belief that the missing
60, the other 60 person is dead; and
between those ages
(d) Judicial declaration of presumptive
Note: Applicable only to two or more persons death was secured (no prejudice to
who perish in the same calamity, and it is not the effect of the reappearance of the
shown who died first, and there are no absent spouse).
particular circumstances from which it can be
Exception to the Exception:
inferred.

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Art. 381. When a person disappears from his Art. 384. Two years having elapsed without
domicile, his whereabouts being unknown, any news about the absentee or since the
and without leaving an agent to administer receipt of the last news, and five years in
his property, the judge, at the instance of an case the absentee has left a person in
interested party, a relative, or a friend, may charge of the administration of his property,
appoint a person to represent him in all that his absence may be declared.
may be necessary.
This same rule shall be observed when
Art. 385. The following may ask for the
under similar circumstances the power
declaration of absence:
conferred by the absentee has expired.
1. The spouse present;
2. The heirs instituted in a will, who may
Art. 382. The appointment referred to in the
present an authentic copy of the same;
preceding article having been made, the
judge shall take the necessary measures to 3. The relatives who may succeed by the
safeguard the rights and interests of the law of intestacy;
absentee and shall specify the powers,
4. Those who may have over the property of
obligations and remuneration of his
the absentee some right subordinated to
representative, regulating them, according
the condition of his death.
to the circumstances, by the rules
concerning guardians.
Art. 386. The judicial declaration of absence
shall not take effect until six months after
Art. 383. In the appointment of a
its publication in a newspaper of general
representative, the spouse present shall be
circulation.
preferred when there is no legal separation.
If the absentee left no spouse, or if the When may absence be declared?
spouse present is a minor, any competent • Two years without any news about the
person may be appointed by the court. absentee
Requisites: The judge may appoint a person to • Five years if the absentee left a person in
represent absentee when: charge of administration of his property
(1) Person disappears from his domicile • Declaration takes effect only after six
months after publication in a newspaper
(2) His whereabouts are unknown
of general circulation
(3) No agent to administer his property
Who may ask for a declaration of absence?
(4) An interested party, a relative, or a
(1) Spouse present
friend files the action
(2) Heirs instituted in a will, who may
Who may be appointed as representative?
present an authentic copy of the
(1) Spouse present shall be preferred same;
when there is no legal separation (3) Relatives who may succeed by the
(2) If no spouse or spouse is law of intestacy;
incapacitated, any competent person
(4) Those who may have some right over
B. DECLARATION OF ABSENCE [ARTS. the property of the absentee,
384-389] subordinated to the condition of his
death.
C. ADMINISTRATION OF THE
PROPERTY OF THE ABSENTEE [ARTS.
387-389]

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Art. 387. An administrator of the absentee's D. PRESUMPTION OF DEATH [ARTS.


property shall be appointed in accordance 390-392]
with Article 383.
Art. 390. After an absence of 7 years, it
being unknown whether or not the absentee
Art. 388. The wife who is appointed as an still lives, he shall be presumed dead for all
administratrix of the husband's property purposes, except for those of succession.
cannot alienate or encumber the husband's The absentee shall not be presumed dead
property, or that of the conjugal for the purpose of opening his succession till
partnership, without judicial authority. after an absence of 10 years. If he
disappeared after the age of 75 years, an
absence of 5 years shall be sufficient in
Art. 389. The administration shall cease in order that his succession may be opened.
any of the following cases:
Art. 391. The following shall be presumed
1. When the absentee appears personally dead for all purposes, including the division
or by means of an agent; of the estate among the heirs:
2. When the death of the absentee is 1. A person on board a vessel lost during a
proved and his testate or intestate heirs sea voyage, or an aeroplane which is
appear; missing, who has not been heard of for four
3. When a third person appears, showing years since the loss of the vessel or
by a proper document that he has aeroplane;
acquired the absentee's property by 2. A person in the armed forces who has
purchase or other title. taken part in war, and has been missing for
In these cases the administrator shall cease four years;
in the performance of his office, and the 3. A person who has been in danger of
property shall be at the disposal of those death under other circumstances and his
who may have a right thereto. existence has not been known for four years.
Who may administer the property? General rule: A person shall be presumed
• Spouse present shall be preferred when dead for all purposes after absence for a
there is no legal separation period of 7 years.
• If no spouse or spouse is incapacitated, Exception: Succession
any competent person • In succession, 10 years is required for
When will the administration of property presumption of death.
cease? • If absentee disappeared after age of 75, 5
Administrator shall cease in performance of years shall be sufficient.
his office, and property shall be disposed in Extraordinary Absence
favor of those who have a right thereto when
Only 4 years is required for presumption to
(1) Absentee appears personally or by arise if:
means of an agent
(1) A person on board a vessel lost during a
(2) Testate or intestate heirs appear, upon sea voyage, or an aeroplane which is
proof of death of absentee missing, who has not been heard of for
(3) Third person appears, with a proper four years since the loss of the vessel or
document showing he has acquired aeroplane;
absentee’s property by purchase or (2) A person in the armed forces who has
other title taken part in war, and has been missing
for four years;

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(3) A person who has been in danger of


death under other circumstances and XVI. Funerals
his existence has not been known for The duty and the right to make arrangements
four years. for the funeral of a relative shall be in
Note: accordance with the order established for
support, under Article 294 [Art. 305]:
• Although 7 years is required for the
presumption of death of an absentee in (1) Spouse
the Civil Code, Art. 41 of the Family Code (2) Descendants in the nearest degree. In
makes an exception for the purpose of case of descendants of the same
remarriage by limiting such requirement degree, the oldest shall be preferred.
to 4 years.
(3) The ascendants in the nearest degree.
• Art. 41 also limits the required 4 years in In case of ascendants, the paternal
Art. 391 for absence under exceptional shall have a better right
circumstances to only 2 years.
(4) The brothers and sisters, the oldest
Art. 392. If the absentee appears or without shall be preferred.
appearing his existence is proved he shall (5) Municipal authorities – if there are no
recover his property in the condition in which it persons who are bound to support or if
may be found and the price of any property that such persons are without means
may have been alienated or the property
acquired therewith; but he cannot claim either Nature of funeral: Every funeral shall be in
fruits or rents. keeping with the social position of the
deceased. [Art. 306]
The funeral shall be:
(1) In accordance with the expressed
wishes of the deceased.
(2) In the absence of such expression, his
religious beliefs or affiliation shall
determine the funeral rites.
(3) In case of doubt, the form of the funeral
shall be decided upon by the person
obliged to make arrangements for the
same, after consulting the other
members of the family [Art. 307]
Note: No human remains shall be retained,
interred, disposed of or exhumed without the
consent of the persons mentioned in articles
294 and 305.
Damages: Any person who shows disrespect
to the dead, or wrongfully interferes with a
funeral shall be liable to the family of the
deceased for damages, material and moral
[Art. 309]

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Funeral Expenses: The construction of a


tombstone or mausoleum shall be deemed a XVII. Entries in the Civil
part of the funeral expenses, and shall be
chargeable to the conjugal partnership
Register
property, if the deceased is one of the A. CIVIL CODE
spouses [Art. 310].
Art. 407. Acts, events and judicial decrees
Guidelines in making funeral arrangements concerning the civil status of persons shall be
(1) The persons who are preferred in the recorded in the civil register.
right to make funeral arrangements may
waive the right expressly or impliedly in
which case the right and duty Art. 408. The following shall be entered in the
immediately descend to the person next civil register:
in the order. 1. Births;
(2) It must be in keeping with the social 2. marriages;
position of the deceased.
3. deaths;
(3) Law shall prevail over the will of the
persons who have the right to control 4. legal separations;
the burial of deceased – exhumation, 5. annulments of marriage;
evidential purpose, disposition of corpse
by deceased, mutilation of corpses and 6. judgments declaring marriages void
autopsies. from the beginning;

(4) Corpses which are to be buried at public 7. legitimations;


expenses may also be used for scientific 8. adoptions;
purposes under certain conditions.
9. acknowledgments of natural children;
(5) Expressed wishes of the deceased is
given priority provided that it is not 10. naturalization;
contrary to law and must not violate the 11. loss, or
legal and reglementary provisions
concerning funerals and disposition of 12. recovery of citizenship;
the remains (time, manner, place or 13. civil interdiction;
ceremony)
14. judicial determination of filiation;
(6) In the absence of expressed wishes, his
religious beliefs or affiliation shall 15. voluntary emancipation of a minor; and
determine the funeral rights. 16. changes of name.
(7) In case of doubt, the persons in Art. 199
shall decide.
Art. 409. In cases of legal separation,
(8) Any person who disrespects the dead or adoption, naturalization and other judicial
interferes with the funeral shall be liable orders mentioned in the preceding article, it
for material and moral damages. shall be the duty of the clerk of the court
which issued the decree to ascertain whether
the same has been registered, and if this has
not been done, to send a copy of said decree
to the civil registry of the city or municipality
where the court is functioning.

Art. 410. The books making up the civil


register and all documents relating thereto
shall be considered public documents and
shall be prima facie evidence of the facts
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therein contained. only at maturity that the gender of such


persons become fixed.

Art. 411. Every civil registrar shall be civilly  In the case of Jennifer Cagandahan, who
responsible for any unauthorized alteration suffered from Congenital Adrenal
made in any civil register, to any person Hyperplasia and had two sex organs and
suffering damage thereby. However, the civil whose female sex organs did not
registrar may exempt himself from such develop normally, the Court granted her
liability if he proves that he has taken every petition to change her registered sex
reasonable precaution to prevent the from female. [Republic v Cagandahan
unlawful alteration. (2008)].

Art. 413. All other matters pertaining to the Note:


registration of civil status shall be governed • Clerical or typographical error refers to a
by special laws. mistake committed in the performance of
clerical work in writing, copying,
B. RA 9048 AS AMENDED BY RA 10172 transcribing or typing an entry in the civil
- An act authorizing the city or municipal civil register that is harmless and innocuous
registrar or the consul general to correct a (i.e. misspelled name, misspelled place of
clerical or typographical error in an entry birth, mistake in the entry of day and
and/or change of first name or nickname in month in the date of birth or the sex of the
the civil register without need of a judicial person or the like, which is visible to the
order, amending for this purpose articles 376 eyes or obvious to the understanding, and
and 412 of the civil code of the philippines can be corrected or changed only by
reference to other existing record or
General rule: No entry in a civil register shall
records)
be changed or corrected without a judicial
order • Before the amendment by RA 10172, no
correction must involve the change of sex,
Exceptions: (1) Clerical or typographical errors
nationality, age or status of the petitioner.
or (2) Intersex persons
After the amendment, change of sex can
Clerical or typographical errors now be subjected to correction without
judicial order under the rules of this Act.
 Change of: first name or nickname, day
and month in the date of birth, or sex of • Civil Register refers to the various registry
a person books and related certificates and
documents kept in the archives of the local
 This exception applies where it is civil registry offices, Philippine Consulates
patently clear that there was a clerical or and of the Office of the Civil Registrar
typographical error or mistake in the General.
entry, which can be corrected or
changed by the concerned city or Sec. 3. Who May File the Petition and Where.
municipal civil registrar or consul – Any person having direct and personal
general in accordance with the interest in the correction of a clerical or
provisions of this Act and its typographical error in an entry and/or change
implementing rules and regulations of first name or nickname in the civil register
may file, in person, a verified petition with the
Intersex persons local civil registry office of the city or
 Sexual development of intersex municipality where the record being sought
persons—those whose sex to be corrected or changed is kept.
chromosomes, genitalia, and/or In case the petitioner has already migrated to
secondary sex characteristics are another place in the country and it would not
determined to be neither exclusively be practical for such party, in terms of
male nor female, makes gender transportation expenses, time and effort to
classification at birth inconclusive. It is appear in person before the local civil
registrar keeping the documents to be
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corrected or changed, the petition may be dishonor or extremely difficult to write or


filed, in person, with the local civil registrar of pronounce.
the place where the interested party is
(2) The new first name or nickname has been
presently residing or domiciled. The two (2)
habitually and continuously used by the
local civil registrars concerned will then
petitioner and he has been publicly known
communicate to facilitate the processing of
by that first name or nickname in the
the petition.
community: or
Citizens of the Philippines who are presently
(3) The change will avoid confusion.
residing or domiciled in foreign countries may
file their petition, in person, with the nearest Sec. 5. Form and Contents of the Petition. –
Philippine Consulates. The petition for correction of a clerical or
typographical error, or for change of first
The petitions filed with the city or municipal
name or nickname, as the case may be, shall
civil registrar or the consul general shall be
be in the form of an affidavit, subscribed and
processed in accordance with this Act and its
sworn to before any person authorized by the
implementing rules and regulations.
law to administer oaths. The affidavit shall
All petitions for the clerical or typographical set forth facts necessary to establish the
errors and/or change of first names or merits of the petition and shall show
nicknames may be availed of only once. affirmatively that the petitioner is competent
to testify to the matters stated. The petitioner
Grounds
shall state the particular erroneous entry or
Who may file the petition and where? entries, which are sought to be corrected
and/or the change sought to be made.
(1) Any person having direct personal interest
in the correction of a clerical or The petition shall be supported with the
typographical error in an entry and/or following documents:
change of first name or nickname in the
(1) A certified true machine copy of the
civil register
certificate or of the page of the registry
(2) Verified petition with the local civil registry book containing the entry or entries
office of the city or municipality sought to be corrected or changed.
(a) where the record being sought to be (2) At least two (2) public or private
corrected or changed is kept documents showing the correct entry or
entries upon which the correction or
(b) where the interested party is
change shall be based; and
presently residing or domiciled, if it will be
impractical to submit in the place where (3) Other documents which the petitioner or
record is kept (i.e. when party has the city or municipal civil registrar or the
migrated to another place in the country) consul general may consider relevant and
necessary for the approval of the petition.
(c) nearest Philippine Consulates, if the
petitioner is presently residing or No petition for correction of erroneous entry
domiciled in foreign countries concerning the date of birth or the sex of a
person shall be entertained except if the
Note: All petitions for the clerical or
petition is accompanied by earliest school
typographical errors and/or change of first
record or earliest school documents such as,
names or nicknames may be availed of only
but not limited to, medical records, baptismal
once.
certificate and other documents issued by
Sec. 4. Grounds for Change of First Name or religious authorities; nor shall any entry
Nickname. – The petition for change of first involving change of gender corrected except
name or nickname may be allowed in any of if the petition is accompanied by a
the following cases: certification issued by an accredited
(1) The petitioner finds the first name or government physician attesting to the fact
nickname to be ridiculous, tainted with that the petitioner has not undergone sex
change or sex transplant. The petition for
change of first name or nickname, or for
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correction of erroneous entry concerning the Sec. 4. Notice and publication. - Upon the
day and month in the date of birth or the sex filing of the petition, the court shall, by an
of a person, as the case may be, shall be order, fix the time and place for the hearing of
published at least once a week for two (2) the same, and cause reasonable notice
consecutive weeks in a newspaper of general thereof to be given to the persons named in
circulation. the petition. The court shall also cause the
order to be published once a week for three
Furthermore, the petitioner shall submit a
(3) consecutive weeks in a newspaper of
certification from the appropriate law
general circulation in the province.
enforcement agencies that he has no pending
case or no criminal record. Sec. 5. Opposition. - The civil registrar and
any person having or claiming any interest
The petition and its supporting papers shall
under the entry whose cancellation or
be filed in three (3) copies to be distributed as
correction is sought may, within fifteen (15)
follows: first copy to the concerned city or
days from notice of the petition, or from the
municipal civil registrar, or the consul
last date of publication of such notice, file his
general; second copy to the Office of the Civil
opposition thereto.
Registrar General; and third copy to the
petitioner Sec. 6. Expediting proceedings. - The court in
which the proceeding is brought may make
C. RULE 108, RULES OF COURT orders expediting the proceedings, and may
- Cancellation or correction of entries in the also grant preliminary injunction for the
civil registry preservation of the rights of the parties
pending such proceedings.
Sec. 1. Who may file petition. - Any person
interested in any act, event, order or decree Sec. 7. Order. - After hearing, the court may
concerning the civil status of persons which either dismiss the petition or issue an order
has been recorded in the civil register, may granting the cancellation or correction prayed
file a verified petition for the cancellation or for. In either case, a certified copy of the
correction of any entry relating thereto, with judgment shall be served upon the civil
the Court of First Instance of the province registrar concerned who shall annotate the
where the corresponding civil registry is same in his record.
located. Who may file petition? - Any person interested
Sec. 2. Entries subject to cancellation or in any act, event, order or decree concerning
correction. - Upon good and valid grounds, the civil status of persons which has been
the following entries in the civil register may recorded in the civil register
be cancelled or corrected: (a) births; (b) Where filed? - Verified petition for
marriages; (c) deaths; (d) legal separations; cancellation or correction of entry in the civil
(e) judgments of annulments of marriage; (f) registry may be filed with the Regional Trial
judgments declaring marriages void from the Court of the province where the
beginning; (g) legitimations; (h) adoptions; (i) corresponding civil registry is located
acknowledgments of natural children; (j)
naturalization (k) election, loss or recovery of Entries subject to Cancellation/ Correction
citizenship (l) civil interdiction; (m) judicial • Births
determination of filiation; (n) voluntary
emancipation of a minor; and (o) changes of • Marriages
name. • Deaths
Sec. 3. Parties. - When cancellation or • Legal separations
correction of an entry in the civil register is
sought, the civil registrar and all persons who • Judgments of annulments of marriage
have or claim any interest which would be • Judgments declaring marriages void from
affected thereby shall be made parties to the the beginning
proceeding.
• Legitimations

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• Adoptions• Acknowledgments of natural


children
• Naturalization
• Election, loss or recovery of citizenship
• Civil interdiction
• Judicial determination of filiation
• Voluntary emancipation of a minor
• Changes of names
Note: In the case of one who, due to being
biologically intersex, was registered at birth
as female but later showed more matured
male genitalia and himself identified as male,
the Court granted the petition to change their
registered sex from female to male. [Republic
v Cagandahan (2008)].

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CIVIL LAW
PROPERTY

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Property – All things which are, or may be, the


object of appropriation. [NCC 414] II. Classification
I. Characteristics A. HIDDEN TREASURE
(1) Utility – capacity to satisfy human wants
Any hidden and unknown deposit of money,
(2) Substantivity and Individuality – the thing jewelry or other precious objects, the lawful
must have a separate and autonomous ownership of which does not appear. [NCC
existence 439]
(3) Susceptibility of being appropriated – General Rule: Hidden treasure belongs to the
capable of being obtained even if not yet owner of the land, building, or other property
actually appropriated; what cannot be on which it is found [NCC 438]
appropriated (subject to human control)
because of physical impossibility Exceptions:
(distance, depth, or immensity) cannot be Finder of hidden treasure is entitled to one-
considered ‘things’ (e.g. stars, moon, half (1/2) if:
ocean)
(1) Finding is by chance;
(2) Finder is not co-owner of the property
where it is found;
(3) Finder is not trespasser;
(4) Finder is not an agent of landowner;
(5) Finder is not owner of the land, building,
or other property
Note:
If the finder is a trespasser, he shall not be
entitled to any share of the treasure
If the things found may be of interest to
science or the arts, the State has a right to
acquire them at their just price, which shall
be divided in conformity with the rule stated.
(NCC 438)
For purposes of hidden treasure, a
usufructuary is considered a stranger to
property; naked owner gets owner’s share
(NCC 566).

B. BASED ON MOBILITY [IMMOVABLE


OR MOVABLE]

B.1. REAL OR IMMOVABLE PROPERTY


CATEGORIES OF IMMOVABLES [NCC 415]
(a) By nature
(i) Land, buildings, roads and
constructions of all kinds adhered to
the soil [NCC 415, par. 1];

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(ii) Mines, quarries, and slag dumps, Immovables by Nature: cannot be moved
while the matter thereof forms part of from place to place; their intrinsic qualities
the bed, and waters either running or have no utility except in a fixed place. [pars. 1
stagnant [par. 8]; & 8]
(b) By incorporation (1) LAND, BUILDINGS, ROADS AND
CONSTRUCTIONS OF ALL KINDS
(i) Trees, plants, and growing fruits,
ADHERED TO THE SOIL
while they are attached to the land or
form an integral part of an Building - their adherence to the land
immovable [par. 2]; must be permanent and substantial, not
merely superimposed
(ii) Everything attached to an immovable
in a fixed manner, in such a way that Buildings have been considered as
it cannot be separated therefrom immovables by nature, despite:
without breaking the material or
(a) Agreement by the parties e.g. they
deterioration of the object [par. 3];
constitute a separate mortgage on
(iii) Fertilizer actually used on a piece of the building and the land [Punzalan
land [par. 7]; v. Lacsamana (1983)]
(c) By destination (b) Separate Ownership i.e. a building on
rented land is still considered an
(i) Statues, reliefs, paintings or other
immovable. [Tolentino]
objects for use or ornamentation,
placed in buildings or on lands by the (c) No matter who built it
owner of the immovable in such a
Where Building Is Treated As Personal
manner that it reveals the intention to
Property: Doctrine of Estoppel
attach them permanently to the
tenements [par. 4]; “although there is no specific statement
referring to the subject house as personal
(ii) Machinery, receptacles, instruments
property, yet by ceding, selling or transferring
or implements intended by the owner
a property by way of chattel mortgage could
of the tenement for an industry or
only have meant to convey the house as
works which may be carried on in a
chattel, or at least, intended to treat the
building or on a piece of land, and
same as such, so that they should not now be
which tend directly to meet the needs
allowed to make an inconsistent stand by
of the said industry or works [par. 5];
claiming otherwise.” [Tumalad v. Vicencio,
(iii) Animal houses, pigeon-houses, (1971)]
beehives, fish ponds or breeding
places of similar nature, in case their
owner has placed them or preserves (2) MINES, QUARRIES, AND SLAG DUMPS,
them with the intention to have them WHILE THE MATTER THEREOF FORMS
permanently attached to the land, PART OF THE BED, AND WATERS
and forming a permanent part of it; EITHER RUNNING OR STAGNANT
the animals in these places are
Minerals are those still deposited in the
included [par. 6];
soil;
(iv) Docks and structures which, though
When minerals have been extracted, they
floating, are intended by their nature
become chattel.
and object to remain at a fixed place
on a river, lake, or coast [par. 9]; Slag Dump: dirt and soil taken from a
mine and piled upon the surface of the
(d) By analogy
ground. Minerals can be found inside the
(i) Contracts for public works, and dump.
servitudes and other real rights over
Waters: those still attached to or running
immovable property [par. 10];
thru the soil or the ground.

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Immovables by Destination: essentially


movables but by the purpose for which they
Immovables by Incorporation: essentially
have been placed in an immovable, partake
movables but are attached to an immovable
of the nature of an immovable [Par. 4, 5, 6 &
in such a way as to be an integral part [Par. 2,
9]
3, & 7]
(6) STATUES, RELIEFS, PAINTINGS OR
(3) TREES, PLANTS, AND GROWING
OTHER OBJECTS FOR USE OR
FRUITS, WHILE THEY ARE ATTACHED
ORNAMENTATION, PLACED IN
TO THE LAND OR FORM AN INTEGRAL
BUILDINGS OR ON LANDS BY THE
PART OF AN IMMOVABLE
OWNER OF THE IMMOVABLE IN SUCH A
Trees and plants: only immovables when MANNER THAT IT REVEALS THE
they are attached to the land or form an INTENTION TO ATTACH THEM
integral part of an immovable PERMANENTLY TO THE TENEMENTS
When trees and plants have been cut or Requisites:
uprooted, they become movables.
(a) Placed by the owner or by the tenant
By special treatment of Act 1508 (Chattel (as agent);
Mortgage Law), growing crops may be
(b) With intention of attaching them
subject of a Chattel Mortgage.
permanently even if adherence will not
For the purpose of attachment: growing involve breakage or injury.
crops are to be attached in the same
(c) Where the improvement or ornaments
manner as realty. (Rule 59, Sec. 7)
placed by the lessee are not to pass to
General Rule: Growing crops are considered the owner at the expiration of the
real property lease, they remain movables for chattel
mortgage purposes. [Davao Sawmill v.
Exception: the moment they are detached or
Castillo (1935)]
uprooted from the land, they become
personal property
(7) MACHINERY, RECEPTACLES,
INSTRUMENTS OR IMPLEMENTS
(4) EVERYTHING ATTACHED TO AN
IMMOVABLE IN A FIXED MANNER, IN INTENDED BY THE OWNER OF THE
TENEMENT FOR AN INDUSTRY OR
SUCH A WAY THAT IT CANNOT BE
WORKS WHICH MAY BE CARRIED ON IN
SEPARATED THEREFROM WITHOUT
A BUILDING OR ON A PIECE OF LAND,
BREAKING THE MATERIAL OR
AND WHICH TEND DIRECTLY TO MEET
DETERIORATION OF THE OBJECT
THE NEEDS OF THE SAID INDUSTRY OR
Res vinta in Roman Law WORKS
“Attachment in a fixed manner”: breakage Immovability depends upon ownership of
or injury in case of separation will be both movable and tenement, being
substantial e.g. wells, sewers, aqueducts destined for use in the industry or works
and railways which can be carried on in the tenement,
Whether attached by the owner himself or e.g. sewing machines owned by the owner
some other person of a garment factory;
The moment they are separated, (from the
immovable or from the industry or work in
(5) FERTILIZER ACTUALLY USED ON A which they are utilized) they recover their
PIECE OF LAND condition as movables.
Actually used (it has been spread over the Requisites:
land)
(a) Must be machinery, receptacles,
instruments, or implements

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(b) Placed by the owner or the tenant (as A floating house tied to a shore and used
agent); as a residence is considered real property,
considering that the waters on which it
(c) The machine, receptacle, instrument,
floats are considered immovables.
implement must also be essential to
the business (tend directly to meet But if the floating house makes it a point
the needs of industry or work) in order to journey from place to place, it assumes
to be considered realty. [Mindanao the category of a vessel, and is considered
Bus Co. v City Assessor (1962)] a movable.

Note: Immovables by Analogy:


Machinery which is movable in its nature only (10) CONTRACTS FOR PUBLIC WORKS,
becomes immobilized when placed in a plant SERVITUDES, OTHER REAL RIGHTS
by the owner of the property or plant, but not OVER IMMOVABLE PROPERTY E.G.
when so placed by a tenant, a usufructuary, USUFRUCT AND LEASE OF REAL
or any person having only a temporary right, PROPERTY FOR A PERIOD OF 1 YEAR
unless such person acted as the agent of the AND REGISTERED
owner. [Davao Sawmill v. Castillo, (1935)]
Notes:
Parties may, by agreement, treat as personal
Parties may by agreement treat buildings as
property that which by nature would be real,
movables, effective only as to them, but void
as long as no third parties would be
if rights of third persons are involved. It is
prejudiced. That characterization is effective
based, partly, upon the principle of estoppel.
between the parties. [Makati Leasing v.
[Evangelista vs. Alto Surety(1958)]
Wearever (1983)]
For purposes of taxation, improvements on
land are commonly taxed as realty, even
(8) ANIMAL HOUSES, PIGEON-HOUSES, though for some purposes, they might be
BEEHIVES, FISH PONDS OR BREEDING considered as personalty. [Manila Electric v.
PLACES OF SIMILAR NATURE, IN CASE Central Bank (1962)]
THEIR OWNER HAS PLACED THEM OR
B.2. PERSONAL OR MOVABLE
PRESERVES THEM WITH THE
INTENTION TO HAVE THEM Categories of Movables [NCC 416-417]:
PERMANENTLY ATTACHED TO THE
(1) By exclusion
LAND, AND FORMING A PERMANENT
PART OF IT; THE ANIMALS IN THESE (a) Everything not included in Article 415;
PLACES ARE INCLUDED (b) Parties cannot by agreement treat as
Requisites: immovable that which is legally
movable;
(a) Placed by the owner or the tenant (as
agent); (2) By description
(b) With the intention of permanent (a) Ability to change location – whether
attachment; it can be carried from place to place;
(c) Forming a permanent part of the (b) Without substantial injury to the
immovable. immovable to which it is attached.
(9) DOCKS AND STRUCTURES WHICH, (c) Unless expressly included in Art. 415
THOUGH FLOATING, ARE INTENDED BY (Test by Exclusion is Superior)
THEIR NATURE AND OBJECT TO (3) By special provision of law
REMAIN AT A FIXED PLACE ON A RIVER,
LAKE, OR COAST (a) Growing crops under the Chattel
Mortgage Law
Need not be placed by owner of land
(b) Intellectual property – considered
personal property; it consists in the
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pecuniary benefit which the owner (a) Possession of real property -


can get by the reproduction or recovered through accion
manufacture of his work. reivindicatoria, accion publiciana,
forcible entry and unlawful detainer
(4) By forces of nature
(accion interdictal).
e.g. electricity, gas, heat, oxygen
(b) Possession of movable property -
Note: recovered through replevin.
Gas is a valuable article of merchandise, (5) Venue of actions
bought and sold like other personal
(a) Real actions - Actions concerning real
property, susceptible of being severed
property are commenced in the court
from a mass of larger quantity and of
that has jurisdiction over the area
being transported from place to place
where the real property is situated.
[US v Tambunting (1921)]
[Rules of Court Rule 4 Sec. 1]
(b) Personal actions - Commenced where
B.3. IMPORTANCE AND SIGNIFICANCE OF the plaintiff or any of the principal
CLASSIFICATION UNDER THE NCC plaintiffs, or where the defendant or
any of the principal defendants
(1) In criminal law
resides, or if a non-resident
Usurpation of property can take place defendant, where he may be found, at
only with respect to real property. the election of the plaintiff. [Rule 4
[RPC 312] Sec. 2]
Robbery and theft can be committed (6) The governing law (Private International
only against personal property. [RPC Law):
293, 308]
(a) Immovables - governed by the law of
(2) In the forms of contracts the country where they are located
(a) Subject matter of specific contracts: (rei situs).

(i) Only real property can be the (b) Movables - governed by the personal
subject of real estate mortgage laws of the owner. (which in some
[NCC 2124] and antichresis. [NCC cases is the law of his nationality and
2132] in other cases, the law of his domicile)

(ii) Only personal property can be the (7) Affecting third persons
subject of voluntary deposit [NCC (a) In transactions involving real property
1966], pledge [NCC 2094] and – must be recorded in the Registry of
chattel mortgage. [Act 1508] Property to affect third persons.
(b) Donations of real property to be valid (b) In transactions involving personal
are required to be in a public property – registration is not
instrument [NCC 749] but a donation required, except for chattel
of a movable may be made orally or mortgages. [Chattel Mortgage
in writing. [NCC 748] Register, NCC 2140]
(3) For acquisitive prescription (8) Preference of credits
(a) Real property can be acquired by (a) Movables governed by NCC 2241
prescription in 30 years (bad faith)
(b) Immovables governed by NCC 2242
and 10 years (good faith). (NCC 1137,
1134) (9) Double sales (NCC 1544)
(b) Movables can be acquired by (a) For movables – ownership shall be
prescription in 8 years (bad faith) and transferred to the person who first
4 years (good faith). (NCC 1132) took possession thereof in good faith
(4) Actions for recovery of possession
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(b) For immovables – ownership shall


belong to the person acquiring it who
CLASSIFICATIONS
in good faith first recorded it in the
Registry of Property; or if there be no Administered by the State [NCC 420]
inscription, to the person who in good
• Those intended for public use. (roads,
faith first took possession, or in the
canals, rivers, torrents, ports and bridges
absence of possession, to the person
constructed by the State, banks, shores,
who presents the oldest title,
roadsteads, and others of similar
provided there is good faith.
character)
(10) Taxation - If the property is subject to
real estate taxes • Those (w/o being for public use) and are
intended for some public service:May be
used only by authorized persons but exists
C. BASED ON OWNERSHIP/ RIGHTS- for the benefit of all, e.g. fortresses,
unleased mines and civil buildings.
HOLDER
• Those for the development of the national
NCC 419. Property is either of public dominion wealth. Includes natural resources such as
or of private ownership. minerals, coal, oil and forest.
• Patrimonial property:
Churches and other consecrated objects are (a) Owned by the State over which it has
considered outside the commerce of man; the same rights as private individuals
they are considered neither public nor private in relation to their own property.
property. (b) Subject to the administrative laws
and regulations on the procedure of
exercising such rights, e.g. friar lands,
C.1. PUBLIC DOMINION escheated properties and commercial
Property of public dominion is outside the buildings.
commerce of man. They cannot be the (c) Purpose:
subject matter of private contracts, cannot be
acquired by prescription and they are not (i) Enables the State to attain its
subject to attachment and execution nor economic ends
burdened with a voluntary easement. (ii) Serves as a means for the State’s
subsistence and preservation
Public
As enumerated by NCC 420
Dominion (iii) Enables the State to fulfill its
primary mission
Public Used in Art XII, Section 2, (d) Conversion of property of public
Domain 1987 Constitution dominion for public use to
patrimonial property:
Public Lands Public Land Act (i) Property of public dominion,
when no longer intended for
public use or for public service,
CHARACTERISTICS shall form part of the patrimonial
property of the State [NCC 422]
(1) Not owned by the State but pertains to it
as territorial sovereign; to hold in trust for (ii) An express declaration by the
the interest of the community. State (either by the Congress or
by the President, if the power was
(2) Purpose: For public use, and not for use provided by law) that the property
by the State as a juridical person. of public dominion has been
(3) Cannot be the subject of appropriation converted into patrimonial
either by the State or by private persons. property, even though it was
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classified as alienable or Can be exercised by the state in its private


disposable. [Heirs of Malabanan v. capacity or by private persons.
Republic (2009)]
Kinds
(1) Patrimonial property - Property owned by
Administered by Municipal Corporations the State and its political subdivisions in
[NCC 424 (1)] their private capacity; all property of the
State not included in NCC 420 (on public
• Property for public use, in the provinces, dominion) [NCC 421-424]
cities, and municipalities, consist of the
provincial roads, city streets, municipal (2) Property belonging to private persons,
streets, the squares, fountains, public either individually or collectively [NCC
waters, promenades, and public works for 425]
public service paid for by said provinces, Property of private ownership, besides the
cities, or municipalities. patrimonial property of the State, provinces,
• Patrimonial property of Municipal cities, and municipalities, consists of all
Corporations: property belonging to private persons, either
individually or collectively.
(a) All other property possessed by any of
them (provinces, cities, and Refers to all property belonging to private
municipalities) [NCC 424 (2)] persons, natural or juridical, either
individually or collectively
(b) The province or municipality, as a
juridical entity, also possesses private
property to answer for its economic Conversion
necessities.
Alienable Public Land converted to Private
(c) General Presumption: that land comes Property through Prescription
from the State upon the creation of the
municipality. All lands in the Alienable public land held by a possessor –
possession of the municipality are personally/through predecessors-in-interest,
properties of public dominion held in openly, continuously and exclusively – for 30
trust for the State’s inhabitants are years is converted to private property by the
subject to the control and supervision mere lapse or completion of the period. The
of the State. application for confirmation is a mere
formality, because land had already been
Exception: Properties acquired with their own converted, giving rise to a registrable title.
funds in their private or corporate capacity [Director of Lands v. IAC (1986)]
over which the political subdivision has
ownership and control. A municipal
corporation must prove that they acquired Private Land converted to Property of Public
the land with their own corporate funds. Dominion through abandonment and
[Salas v. Jarencio, (1972)] reclamation
Note: Through the gradual encroachment or
The Local Government Code classifies erosion by the ebb and flow of the tide,
property of LGUs into: private property may become public if the
owner appears to have abandoned the land,
(1) property of LGU in its governmental and permitted it to be totally easten up by the
character, which is broader than NCC sea so as to become part of the shore. The
424, land having disappeared on account of the
(2) property of LGU in its proprietary gradual erosion in case of natural
character. expropriation, and having remained
submerged until they were reclaimed by the
government, they are public land.
C.2. PRIVATE OWNERSHIP [Government v. Cabangis (1929)]

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D. BASED ON CONSUMABILITY
III. Ownership
Only applies to movable property,
determined by nature [NCC 418]
A. DEFINITION AND CONCEPT
Independent right of exclusive enjoyment and
D.1. CONSUMABLE control of a thing.
(1) Movables which cannot be used in a Has the purpose of deriving all advantages
manner appropriate to their nature required by the reasonable needs of the
without their being consumed. (e.g. food) owner/holder of right and promotion of
(2) Consumable goods cannot be the subject general welfare.
matter of a commodatum unless the A complete subjection to an owner’s will.
purpose of the contract is not the
consumption of the object, as when it is May be exercised in everything not prohibited
merely for exhibition. by public law or the rights of another. [NCC
427]

D.2. NON-CONSUMABLE
B. TYPES OF OWNERSHIP
All others not falling under ‘consumable’ e.g.
money in coin. (1) Full Ownership - With complete rights
over the property.
(2) Naked Ownership - Absence of jus
E. BASED ON SUSCEPTIBILITY TO fruendi and jus utendi.
SUBSTITUTION
(3) Sole Ownership - Ownership vested only
Only applies to movables, determined by the in one person.
intention of the parties.
(4) Co-Ownership - Ownership vested in 2 or
more persons in ideal shares or undivided
E.1. FUNGIBLES interest.
Things that, because of their nature or the (5) Beneficial ownership - Right to enjoy the
will of the parties, are capable of being use and fruits of a property
substituted by others of the same kind, not
having a distinct individuality.
C. RIGHT IN GENERAL
C.1. RIGHTS INCLUDED IN OWNERSHIP
E.2. NON-FUNGIBLES [NCC 428]
Things that cannot be substituted for (a) Right to enjoy and dispose of a thing,
another; without other limitations than those
If the parties agreed that the same thing be established by law.
returned, it is not fungible. (b) Right of action against the holder and
possessor of the thing in order to recover
it.
F. BASED ON THE CONSTITUTION [ARTICLE
XII, SEC 3]
(1) Public Agricultural Land; C.2. BUNDLE OF RIGHTS
(2) Mineral Land; (a) Jus Utendi: right to use and enjoy
(3) Timber Land; (b) Jus Fruendi: right to receive the fruits
(4) National Parks. (c) Jus Abutendi: right to consume a thing by
use

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(d) Jus Disponendi: right to alienate, 2. Real right of 9. Antichresis


encumber, transform or even destroy the possession
thing owned
(e) Jus Vindicandi: right to recover possession 3. Usufruct 10. Retention
of property based on a claim of ownership
(f) Jus Possidendi: right to possess the 4. Real right of 11. Preemption
property (Implied from all the other praedial servitudes
rights) (easement)
(g) Jus Accessionis: right to whatever is 5. Recorded lease 12. Redemption
attached to the thing in such a way that
they cannot be separated without injury
6. Real estate 13. Stewardship
(h) Jus Tresauris: right to hidden treasure mortgage

7. Chattel mortgage 14. Certificate of


Other Specific Rights: Ancestral Domain
(1) Right to Exclude; Doctrine of Self-Help Title; Certificate of
[NCC 429] Ancestral Domain
Claims in the IPRA
(2) Right to enclose or fence [NCC 430] Law
(3) Right to receive just compensation in
case of expropriation [NCC 435] but not if
property seized by competent authority in Personal Rights
the interest of health, safety, or security
(exercise of police power) unless seizure if Rights of a person to demand from another
unjustified as a definite passive subject, the fulfillment of
a prestation to give, to do or not to do.
(4) Right of owner of land to its surface and
everything under it, except natural
resources - the owner may make any Real Rights Personal Rights
works, plantations, and excavations
subject to servitudes and special laws
and ordinances and reasonable needs of Definite active subject Definite active subject
aerial navigation [NCC 437] who has a right against (creditor) and a
ALL persons generally definite passive
as an indefinite passive subject (debtor).
C.3. PROTECTING PROPERTY subject.

C.3.1 BASIC DISTINCTIONS


Object is generally a Subject matter is
REAL RIGHTS v. PERSONAL RIGHTS corporeal thing. always an incorporeal
Real Rights thing.
Rights that confer upon its holder an (5) Created by (6) Created by
autonomous power to derive directly from a mode and title title
thing certain economic advantages
independently of whoever the possessor of
the thing.
Generally extinguished Personal right survives
by the loss or the subject matter.
The number of real rights is an open destruction of the thing
classification: over which it is
exercised.
1. Ownership 8. Pledge

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Real Rights Personal Rights Every owner may enclose or fence his land or
tenements by any other means without
detriment to servitudes constituted thereon.
It is directed against the It is binding or
whole world, giving rise enforceable only
to real actions against against a particular
ACTIONS TO RECOVER OWNERSHIP AND
3rd persons. person giving rise to
POSSESSION OF PROPERTY
personal actions
against such debtor Immovable Property
and his privies. (1) Accion Reivindicatoria
Recovery of ownership of real property.
REAL ACTION v. PERSONAL ACTION (ROC, Including but not limited to possession.
Rule 4 Sec 1-2) Prescription of Action: 30 years.
Real action - Actions affecting title to or
possession of real property or any interest
therein. (2) Accion Publiciana
Personal action - All other actions. Recovery of real right of possession
(posession de jure).
Judgment as to who has the better right of
ACTION IN REM v. ACTION IN PERSONAM v. possession.
ACTION QUASI IN REM
Also, actions for ejectment not filed within 1
Action in rem - Action against a property, year must be filed as accion publiciana.
judgment binding against the whole world.
Prescription: 10 years.
Action in personam - Action against a specific
person, judgment binding against that
particular person. (3) Accion Interdictal - Action for Ejectment
Action quasi in rem - Action against a specific A summary action for recovery of actual,
property with respect to a person. material or de facto physical possession
An action to redeem, or to recover title to or through either an action for Forcible Entry or
possession of, real property is not an action in Unlawful Detainer.
rem or an action against the whole world, like
a land registration proceeding or the probate
of a will; it is an action in personam, so much Distinction between forcible entry and
so that a judgment therein is binding only unlawful detainer:
upon the parties properly impleaded and duly (1) Forcible Entry: Lawful possessor deprived
heard or given an opportunity to be heard. through FISTS:
[Ching v. CA (1990)]
Grounds: FISTS (Force, Intimidation,
Strategy, Threats, Stealth)
Prior physical possession must be alleged.
Prescription: 1 year from dispossession
(force, intimidation, threats) or from
knowledge of dispossession (strategy,
C.4. REMEDIES stealth).
DOCTRINE OF SELF-HELP [NCC 429-430]
The owner may use such force as may be (2) Unlawful Detainer: Possessor refused to
reasonably necessary to repel or prevent an vacate upon demand by owner.
actual or threatened unlawful physical
invasion or usurpation of his property.

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Legal possession (by permission/ To justify the exercise of police power, the
tolerance) becomes unlawful upon failure following must appear [US v Toribio (1910)]:
to vacate.
(a) The interests of the public generally,
Prior physical possession must be alleged. require such interference (as
distinguished from those of a particular
Prescription of action: 1 year from last
class); and
notice to vacate.
(b) The means are reasonably necessary for
the accomplishment of a purpose, and
Movable property not unduly oppressive.
Replevin
For manual delivery of movable property, for TAXATION
either ownership or possession
Forced contribution to the operation of
Acquisitive Prescription of Right: 4 years government.
(good faith) or 8 years (bad faith)

EMINENT DOMAIN
Requisites for recovery of property [NCC 434]
Property taken for public use/purpose, but
(1) Property must be identified; subject to due process and payment of just
compensation.
If titled land, through a relocation survey and
a title properly identifying boundaries and Requisites
location and technical description.
To justify the exercise of the right of eminent
Plaintiff must rely on the strength of his title domain, the following requisites must all be
and not on weakness of defendant’s claim. present:
Right must be founded on positive title and (1) Private property or its use as the object of
not on lack or insufficiency of defendant’s. the expropriation;
Ei incumbit probatio qui dicit, non qui negat: (c) The property or its use is taken by the
“He who asserts, not he who denies must State or by competent authority;
prove.”
(d) The purpose of the taking is for public
use;
D. LIMITATIONS ON OWNERSHIP (e) The taking must be attended with due
process of law; and
(f) There is payment of just compensation.
D.1. GENERAL LIMITATIONS:
Taxation, eminent domain, police power
Note:
Expropriation may be exercised on both real
POLICE POWER
and personal property. [Rule 67, Rules of
PROPERTY TAKEN WITH NO Court]
COMPENSATION FOR GENERAL WELFARE
Expropriation may be exercised not only on
When any property is condemned or seized by property but also its use such as the use of
competent authority in the interest of health, telephone lines [Republic v PLDT (1969)]
safety or security, the owner thereof shall not
Eminent domain may be availed of to impose
be entitled to compensation, unless he can
only a burden upon the owner of the
show that such condemnation or seizure is
condemned property, without loss of title and
unjustified. [Art. 436, Civil Code]
possession.

Requisites
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D.2. SPECIFIC LIMITATIONS: CLASSES OF NUISANCE [Iloilo Cold Storage


v. Municipal Council (1913) ]
(1) Legal Servitudes
(a) Nuisance per se
Once requisites are satisfied, the servient
owner may ask the Court to declare the Those which are unquestionably and under
existence of an easement. all circumstances nuisances (i.e. gambling
houses, houses of ill fame, etc.) May be
(a) Art. 644 & 678: Aqueduct
summarily abated.
(b) Art. 679: Planting of trees
(b) Nuisance per accidens
(c) Art. 670: Light and View
Nuisances because of particular facts and
(d) Art. 649 & 652: Right of Way circumstances surrounding the otherwise
harmless cause of nuisance
(e) Art. 637: Passage of water from
upper to lower tenements Requires a hearing before a tribunal to be
abated
(f) Art. 676: Drainage of buildings
(g) Art. 684-687: Lateral and subjacent
support (5) Limitations imposed by the owner himself
(2) Must not injure the rights of a third person (6) Limitations imposed by the party
transmitting the property either by the
Sic Utere Tuo Ut Alienum Non Laedas: The
contract or will
owner of a thing cannot make use thereof in
such manner as to injure the rights of a third
person. [NCC 431]
(3) Actions in a State of Necessity
The owner of a thing has no right to prohibit
the interference of another with the same, if
the interference is necessary to avert an
imminent danger and the threatened
damage, compared to the damage arising to
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]

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Summary of Actions

Action Venue Summon Prayer Basis Prescription Jurisdiction

Prior physical
Forcible Entry
In possession for
/ Real
persona Possession forcible entry; 1 year (2) MTC
Unlawful Action
m Notice to vacate for
Detainer
unlawful detainer

In 10 years
Accion Real Real right of
persona Possession (3) RTC
Publiciana Action Possession [NCC 555(4)]
m

GF: 10 years
BF: 30 years
[NCC 1137]

In Exception (i.e. no
Accion Real
persona Possession Ownership acquisitive (4) RTC
Reivindicatoria Action
m prescription):
Torrens Title and
property of public
dominion;
Exception to
exception: laches

In 10 years (5) RTC or


Real
Reconveyance persona Title Constructive trust MTC (depending
Action (NCC 1456)
m on value)

If plaintiff in
possession,
imprescriptible
(6) RTC or
Quieting of Real Quasi-in Quieting
Ownership MTC (depending
Title Action rem of Title Otherwise, 10 years
on value)
(based on
constructive trust)
[Heirs of Jose Olviga
vs. CA (1993)]

In (7) RTC or
Personal Possession or GF: 4 years
Replevin persona Possession MTC (depending
Action Ownership BF: 8 years
m on value)

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way around [Philippine National Bank v De


IV. Accession Jesus (2003)]
(2) No one shall be unjustly enriched at the
Accession – the right by virtue of which the expense of another [NCC 447-452]
owner of a thing becomes the owner of
everything that is produced thereby, or which
is incorporated or attached thereto, either A.1. WITH RESPECT TO IMMOVABLES
naturally or artificially. [NCC 440]
Accession Discreta
Accession is one of the bundle of rights of
ownership and is not a mode of acquiring Right of ownership to the fruits. [NCC 441]
property; it does not depend upon a new General Rule: To the owner of the principal
title. belongs the natural, industrial and civil
Accessories – things joined to or included fruits.
with the principal thing for the latter’s Exceptions:
embellishment, better use, or completion,
but which cannot be separated without (1) Possession in good faith (fruits belong to
damage or injury. possessor by good faith for as long as he
remains in good faith)
(h) Usufruct (to usufructuary)
A. CLASSIFICATION OF ACCESSION
(i) Lease (to lessee in civil law lease of
(1) Accession Discreta – the right pertaining agricultural land; lessor gets rentals
to the owner of a thing over everything as civil fruits)
produced thereby (by internal forces).
(j) Antichresis
(2) Accession Continua – the right pertaining
to the owner of a thing over everything
that is incorporated or attached thereto KINDS OF FRUITS
either naturally or artificially (by external
(1) Natural – spontaneous products of soil
forces).
and the young and other products of
(a) Over Immovables animals [NCC 442 (1)]
(i) Industrial or artificial (building, Under the rule partus sequitur ventrem, to
planting, sowing) the owner of female animals would also
belong the young of such animals although
(ii) Natural
this cannot apply when the owner mixes his
(1) Alluvion cattle with those of another and they
interbreed, thus co-ownership is applied
(2) Avulsion
[Siari Valley Estates v. Lucasan (1960)].
(3) Change of Course of River
(2) Industrial – produced by lands of any kind
(4) Formation of Islands through cultivation or labor [NCC 442
(b) Over Movables (2)].

(i) Conjunction and Adjunction Standing trees are not fruits since they are
considered immovables although they
(ii) Commixtion and Confusion produce fruits themselves. However, they
(iii) Specification may be considered as industrial fruits when
they are cultivated or exploited to carry on
an industry, as in tree plantation.
(3) Civil – easily prorated for under NCC 544
GENERAL PRINCIPLES OF ACCESSION they are deemed to accrue daily and
(1) Accessio cedit principali - the accessory belong to the possessor in good faith in
follows the principal, and not the other that proportion (e.g. rents of buildings,
price of leases or lands and the amount
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of perpetual or life annuities or other Accession Continua


similar income).
(1) Accession Continua Artificial or Industrial
Building, planting or sowing on land owned
Notes: by another (over immovables).
Natural and industrial fruits are real property General Rule: Whatever is built, planted or
while still ungathered. sown on the land of another + improvements
or repairs made thereon, belong to the
Only those that are manifest or born are
owner of the land subject to the rules on BPS
considered as natural or industrial fruits.
(NCC 445).
Dividends, whether cash or stock, are civil
Presumptions:
fruits. If the principal shares are in usufruct
such dividends go to the usufructurary. (1) All works, sowing and planting are
[Bachrach v Seifert (1950)] presumed made by the owner and at his
expense, unless the contrary is proved.
An amount paid to the owner of a property
who mortgaged it for another person's debt (2) The owner of the principal thing owns
is not a civil fruit, but a compensation for the the natural, industrial and civil fruits,
risk assumed by the owner. [Bachrach Motor except when the following persons exist:
Co. v Talisay-Silay Co (1931)]
(i) Possessor in Good Faith
(ii) Usufructuary
Principles Applicable to Accession Discreta
(iii) Lessee
Time of Accrual depending on kind:
(iv) Antichretic creditor
Annuals: from the time seedlings appear on
the ground.
Meaning of Bad Faith
Perennials: from the time fruits actually
appear on the plants. On the part of the landowner
Young of animals: from the time they are in Whenever the building, planting or sowing
the womb, although unborn – beginning of was done with his knowledge and without
maximum ordinary period of gestation. opposition on his part (NCC 453, par. 2).
Fowls: from the time of incubation.
He who receives the fruits has the obligation On the part of the owner of materials
to pay the expenses incurred by a third
Allows the use of his materials without
person in the production, gathering and
protest.
preservation of the fruits. [NCC 443]
Exception: Owner does not have to pay if
land is recovered before gathering from a On the part of the builder, planter and
possessor in bad faith. sower, he is a possessor in bad faith at the
time of BPS if he:
But if owner recovers land from possessor in
bad faith, he may choose to acquire the land Knows that he does own the land, nor the
and he can make the possessor, builder, right to build thereon or no permission of the
planter, sower account for the fruits that owner of the materials to pay their value.
have been gathered, with the obligation to
deduct the expenses for producing,
harvesting and preservation of the fruits. Note:
Bad faith leads to liability for damages and
the loss of the works or the improvement
without reimbursement.

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Bad faith of one party neutralizes the bad Avulsion


faith of the other.
A known portion of land is segregated from
one estate by the forceful current of a river,
creek or torrent and transferred to another.
(2) Accession Continua Natural Land
deposits, etc. Requisites:
Alluvium (1) Segregation and transfer of land is
sudden and abrupt;
Soil is gradually deposited on banks
adjoining the river. There can be no (2) Caused by the current of the water; and
acquisition of soil deposited on the shores of
(3) The portion of land transported must be
the sea [De Buyser v. Director of Lands (1983)]
known and identifiable; or
Requisites:
(4) Can also apply to sudden transfer by
(1) Deposit of soil or sediment is gradual other forces of nature such as land
and imperceptible; transferred from a mountain slope
because of an earthquake.
(2) As a result of the action of the currents of
the waters of the river and should have no
human intervention;
Effect: The ownership of the detached
(3) Land where the accretion takes place is property is retained by the owner subject to
adjacent to the banks of the rivers; and removal within 2 years from the detachment.
(4) Deemed to Exist: When the deposit of the In case of uprooted trees, the owner retains
sediment has reached a level higher than ownership if he makes a claim within 6
the highest level of the water during the months. This refers only to uprooted trees
year, i.e. higher than the river bank. and does not include trees which remain
planted on a known portion of land carried
by the force of the waters. In this latter case,
Effect: The riparian owner automatically the trees are regarded as accessions of the
owns the Alluvion but it does not land through gradual changes in the course
automatically become registered property in of adjoining stream. [Payatas v. Tuazon
his name. Registration does not give title to (1929)]
the land, but merely confirms and thereafter
protects the title already possessed by the
owner, making it imprescriptible by Alluvium Avulsion
occupation of third parties. [Grande v CA
Accretion is gradual Accretion is sudden
(1962)]
and abrupt
Accretion cannot be Accretion can be
Rationale identified identified
To offset the owner’s loss from possible There is merely First there is
erosion due to the current of the river; attachment detachment followed
To compensate for the subjection of the land by attachment
to encumbrances and legal easements. The accretion Ownership is
When is Alluvion formed? When the deposit belongs to the owner retained by the
of sediment has reached a level higher than of the land to which owner of the land
the highest level of water during the year the attachment is from which it is
made ipso jure detached, at least,
Where the deposit is by sea water, it belongs for a certain period
to the state. A gradual change of bed is also
governed by the rules of alluvium [Canas vs.
Tuason (1906)]
Change of course of river
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Requisites: (b) Must be sufficient not only to


float bancas and light boats, but
(1) Change in the natural course of the
also bigger watercraft;
waters of the river; and
(c) Deep enough to allow
(2) Such change causes the abandonment of
unobstructed movements of
the river beds. “Natural Bed”: ground
ships and vessels.
covered by its waters during the highest
floods. [Binalay v. Manalo (1991)] TEST: can be used as a highway of
commerce, trade and travel.
(3) Such change is sudden or abrupt
Note: There is no accession when islands are
formed bythe branching of a river; the owner
Results retains ownership of the isolated piece of
land.
Owners whose lands are occupied by the
new course automatically become owners of
the old bed, in proportion to the area they
They belong to the owners of the nearest
lost
margins or banks if [NCC 465]:
Owners of the lands adjoining the old bed
(1) Formed through successive accumulation
are given the right to acquire the same by
of alluvial deposits
paying the value of the land.
(2) On non-navigable and non-floatable
*Not exceeding the value of the land invaded
rivers
by the new bed (the old property of the
owner) (3) If island is in the middle: divided
longitudinally in half.
The new bed opened by the river on a private
estate shall become of public dominion. (4) if nearer to one margin or bank, to the
nearer reparian owner
It does not apply to cases where the river
simply dries up because there are no persons
whose lands are occupied by the waters of
Note:
the river.
If a landowner allows the sea or a lake to eat
up his land completely, it is a case of natural
Formation of Islands expropriation and if the land later reappears,
he does not regail ownership thereof.
They belong to the State if [NCC 464]:
[Republic v. Cabangis (1929)]
(1) Formed on the seas within the
jurisdiction of the Philippines.
Take note of the rule on reverse accession in
(2) Formed on lakes, or
Persons and Family Relations [FC 120; NCC
(3) Formed on navigable or floatable rivers: 321].
(a) Capable of affording a channel
or passage for ships and vessels;

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Accession Continua over Immovables


Artificial or Industrial - Building, Planting, Sowing
(1) Builder builds, plants, or sows on land of another

Landowner [LO] in Bad


Landowner [LO] in Good Faith
Faith

Rights of Landowner [NCC 448] Absolute Duties of


Landowner [NCC 454 in
Options:
relation to NCC 447]:
(1) Buy from BPS but only after payment of indemnity for
(1) Pay damages; and
necessary, useful and ornamental expenses [NCC 546
and 548]; BPS in good faith has right of retention; (2) Allow removal even if it
Builder,
causes damage or
Planter, (2) Sell to BP the land (unless the value of the land is
destruction; or
Sower [BPS] considerably more than that of the building or trees); or
in Good Faith (3) Buy or pay for value of
(3) Rent to BP the land if LO does not want to buy
improvement.
Note: If BP refuses or cannot purchase the land, he loses his
right of retention and must turnover possession to
landowner.
(4) Rent to S.

Rights of Landowner [NCC 449-452] Same as though both


landowner and BPS are in
Options:
good faith
(1) Appropriate the improvements without paying
indemnity;
Builder,
Planter, (2) Demolish/Remove the work of BPS at the expense of
Sower [BPS] BPS;
in Bad Faith
(3) Sell to BP without any right to refuse even if value of
land is considerably whole; or
(4) Rent to the S
(5) Absolute right to Damages from BPS.

Note: Good faith does not necessarily exclude negligence, which gives rise to damages under Article 2176
(NCC 456).
(2) Landowner builds, plants, or sows with materials of another

Landowner [LO] in Good Faith Landowner [LO]in Bad Faith

Absolute duty of the LO [NCC 447]: Absolute Duties of LO [NCC 447]:


Owner of (1) LO shall pay OM the value of the (1) Pay damages; and
Material [OM] materials
in Good Faith (2) Allow removal in any event; or
Pay for value of material.

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Right of OM:
(1) OM shall have the right to remove the
materials only if he can do so without
damage [NCC 447] at the expense of LO
[Tolentino on whether the owner can offer to
return the materials instead of paying their
value]

Absolute Rights of Landowner [NCC 447] Same as though both landowner and
Owner of material manare in good faith
(1) To appropriate the materials without
Material [OM]
payment.
in Bad Faith
(2) Right to damages from OM.

(3) Builder builds, plants, or sows on another's land with materials owner by a third person

Landowner BPS Owner of Material [OM]

Good faith Good faith Good faith


Options: (1) Right of retention until (1) Collect value of material
necessary and useful primarily from BPS and
(1) Right to acquire improvements and
expenses are paid; subsidiarily to landowner if
pay indemnity to BPS; subsidiarily
BPS is insolvent; and
liable to OM; (2) To pay value of materials
to OM. (2) Limited right of removal (if
(2) Sell the land to BP except if the
the removal will not cause
value of the land is considerably
any injury)
more; or
(3) Rent to S.

Good faith Good faith Bad faith


Options: (1) Right of retention until (1) Lose the material without
necessary and useful right to indemnity.
(1) Right to acquire improvements and
expenses are paid.
pay indemnity to BPS; (2) Must pay for damages to
(2) Keep BPS without BPS.
(2) Sell land to BP except if the value
indemnity to OM and
of the land is considerably more; or
collect damages from
(3) Rent to S. him.

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Landowner BPS Owner of Material [OM]

Good faith Bad faith Bad faith


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

Bad faith Bad faith Bad faith


Same as when all acted in good faith Same as when all acted in Same as when all acted in good
under Article 453 good faith under Article 453 faith under Article 453

Bad faith Good faith Good faith


(1) Acquire improvement after paying (1) May remove (1) Remove materials at any
indemnity and damages to BPS improvements. event
unless the latter decides to remove.
(2) Be indemnified for (2) Collect value of materials
(2) Subsidiarily liable to OM for value damages in any event from BPS; subsidiarily from
of materials if he acquires BPS and landowner, if landowner is
(3) Pay OM the value of the
damages; no subsidiary liability if made to pay for BPS and
materials
BPS chooses removal in any event. damages

Good faith Bad faith Good faith


Options: (1) No right of retention. (1) Collect value of materials
primarily from BPS and
(1) Right to acquire improvements and (2) Pay value of materials to
subsidiarily from landowner,
pay indemnity to BPS; subsidiarily OM and pay him
if landowner acquires the
liable to OM; damages.
BPS.
(2) Sell the land to BP except if the
(2) Collect damages from BPS.
value of the land is considerably
more; or (3) Absolute right to remove
materials in any event.
(3) Rent to S.

Good faith Bad faith Good faith


(1) Landowner has right to collect (1) Right to necessary (1) Collect value of materials
damages from BPS in any case and expenses. primarily from BPS and
the option to either subsidiarily from landowner
(2) Pay value of materials to
(a) Acquire improvements w/o OM. (2) Collect damages from BPS
paying for indemnity;
(3) Pay damages to OM/LO. (3) If BPS acquires
(b) Demolition or restoration; or improvements, absolute
right of removal in any event.
(c) Sell to BP, or to rent to sower

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Landowner BPS Owner of Material [OM]

(2) Pay necessary expenses to BPS.

Bad faith Good faith Bad faith


Acquire improvements and pay (1) Receive indemnity for (1) No right to indemnity.
indemnity and damages to BPS unless damages.
(2) Loses right to the materials.
the latter decides to remove materials.
(2) Absolute right of removal
of improvements in any
event.

Note: If there are 3 parties in BPS, solve the problem by considering the options open to the landowner
vis-à-vis BPS depending on their good faith or bad faith; apply NCC 455 re: one who acted in good faith.

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A.2. WITH RESPECT TO MOVABLE If owner of principal is in bad faith, owner of


PROPERTY the accessory has a right to choose between
the owner of the principal paying him its
TYPES
value or that the thing belonging to him be
(1) Conjunction or Adjunction separated, even though for this purpose it be
necessary to destroy the principal thing; and
Process where 2 movables belonging to
in both cases, there shall be indemnity for
different owners are attached to each other
damages.
to form a single object.
(2) Mixture
Test to determine the principal thing
The union of materials belonging to different
owners where the components lose their In the order of application, the principal is
identity. that:
(3) Specification (1) To which the other has been united as an
ornament or for its use or perfection
Transforming or giving of a new form to
(“Rule of importance and purpose”).
another’s material through labor.
(2) Of greater value.
(3) Of greater volume.
CONJUNCTION / ADJUNCTION
(4) That of greater merits, taking into
Requisites
consideration all the pertinent legal
(a) There are 2 movables belonging to 2 provisions, as well as the comparative
different owners; merits, utility and volume of their
(b) They are united in such a way that they respective things. [Manresa]
form a single object; and
(c) They are so inseparable that their When separation allowed
separation would impair their nature or
(a) When separation will not cause any
result in substantial injury to either
injury; or
component.
(b) When the accessory is much more
precious:
Ownership of new object formed by
adjunction (i) Owner of accessory may demand
separation even though the principal
(1) If union was made in good faith thing may suffer (NCC 469).
General Rule: The owner of the principal (ii) Owner who caused the union shall
thing acquires the accessory, with the bear the expenses for separation even
obligation to indemnify the owner of the if he acted in good faith.
accessory for its value in its original state.
(c) When the owner of the principal is in bad
Exception: if the accessory is much more faith.
precious than the principal, the owner of the
accessory may demand separation even if Note:
the principal suffers some injury In painting and sculptures, writings, printed
matter, engravings and lithography, the
board, metal, stone, canvas, paper or
(2) If union was in bad faith, NCC 470 parchment are deemed as the accessory
applies: things [NCC 468, par. 2]
Owner of accessory in bad faith loses the Mixture
thing incorporated and has the obligation to
Kinds
indemnify the owner of the principal thing
for damages. (1) Commixtion: mixture of solid things
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(2) Confusion: mixture of liquid things, and material, in consequence of the work itself,
includes mixture of gases undergoes a transformation.
It is the transformation of another’s material
by the application of labor.
Rules
Examples: Turning grapes into wine, flour
(1) Mixture by will of the owners:
into bread
Primarily governed by their stipulations. In
Rules:
the absence of stipulation, each owner
acquires a right or interest in the mixture in (1) Person in good faith
proportion to the value of his material, i.e.
General rule: Worker becomes the owner but
co-ownership is created.
must indemnify the owner (who was also in
good faith) for the value of the material.
(1) Mixture caused by an owner in good faith Exception: If the material is more valuable
or by chance than the new thing, the owner of the
material may choose:
Share of each owner shall be proportional to
the value of the part that belonged to him. If (a) To take the new thing but must pay
things mixed are exactly the same kind, for the value of the work or labor; or
quality and quantity, divide the mixture
(b) To demand indemnity for the value
equally. If things mixed are of different kind
of the material.
or quality, a co-ownership arises. If they can
be separated without injury, the owners may If the owner was in bad faith, maker may
demand separation. Expenses are borne by appropriate the new thing without paying
the owners pro rata. the owner, or require the owner to pay him
the value of the thing or his work, with right
Note:
to indemnity.
Good faith in accession does not necessarily
exclude negligence, which gives rise to
damages. (2) Person in bad faith
General rule: Owner may either appropriate
the new thing to himself without paying the
(2) Mixture caused by an owner in bad faith
maker, or owner may demand value of
Actor forfeits the thing belonging to him. material plus damages
Actor also becomes liable for damages.
Exception: The first option is not available in
case the value of the work, for artistic or
scientific reasons, is considerably more than
(3) Mixture made with knowledge and
that of the material, in which case the owner
without objection of the other owner
of the material can ask for payment of
Rights to be determined as though both material and damages.
acted in good faith.

(3) Person made use of material with


Specification consent and without objection of owner
Takes place when the work of a person is Rights shall be determined as though both
done on the material of another, such acted in good faith.

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V. Quieting of Title E. THE ACTION TO QUIET TITLE DOES


NOT APPLY:
(1) To questions involving interpretation of
A. IN GENERAL documents;
A remedy or form of proceeding originating in (2) To mere written or oral assertions of claim,
equity jurisprudence. Equity comes to the aid EXCEPT
of the plaintiff who would suffer if the
instrument (which appear to be valid but is in (a) made in a legal proceeding or
reality void, ineffective, voidable or (b) asserting that an instrument or entry
unenforceable) was to be enforced. in plaintiff’s favor is not what it
A common law remedy for the removal if any purports to be;
cloud upon a doubt or uncertainty with (3) To boundary disputes;
respect to title to real property. [PARAS,
supra at 299] (4) To deeds by strangers to the title UNLESS
purporting to convey the property of the
plaintiff;
B. PURPOSE (5) To instruments invalid on their face; or
To declare: (6) Where the validity of the instrument
(a) The invalidity of a claim on a title; or involves a pure question of law.

(b) The invalidity of an interest in property.


To free the plaintiff and all those claiming Note: To prevent multiplicity of suits, an
under him from any hostile claim on the action for quieting of title takes precedence
property. over an ejectment case. (Luzuriaga v. Adil,
G.R. No. L-58912 May 7, 1985)
Pending an action for quieting of title,
C. NATURE: QUASI IN REM possession of actual possessor must be
A suit against a particular person or persons respected until the case is decided on the
in respect to the res and the judgment will merits. (Balbecino v. Judge Ortega, G.R. No. L-
apply only to the property in dispute. 14231, April 28, 1962).

The action to quiet title is characterized as a


proceeding quasi in rem. Technically, it is F. REQUIREMENTS
neither in rem nor in personam. In an action
quasi in rem, an individual is named as a
defendant. However, unlike suits in rem, a F.1. REQUISITES OF AN ACTION TO QUIET
quasi in rem judgment is conclusive only TITLE
between the parties. [Spouses Portic v.
Cristobal] (1) There is a cloud on title to real property or
any interest to real property;
(2) The plaintiff must have legal or equitable
D. JUSTIFICATIONS TO BRING AN title to, or interest in the real property; and
ACTION TO QUIET TITLE (3) Plaintiff must return the benefits received
To prevent future or further litigation on the from the defendant.
ownership of the property.
To protect the true title and possession.
“Cloud on title” means a semblance of title,
To protect the real interest of both parties. either legal or equitable, or a claim or a right
in real property, appearing in some legal
To determine and make known the precise
form but which is, in fact, invalid or which
state of the title for the guidance of all.
would be inequitable to enforce.

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A cloud exists if: The plaintiff must have legal or equitable title
to, or interest in the real property [NCC 477]
(1) There is a claim emerging by reason of:
Legal title: the party is the registered owner
(a) Any instrument e.g. a contract, or any
of the property.
deed of conveyance, mortgage,
assignment, waiver, etc. covering the Equitable title: the person has the beneficial
property concerned; ownership of the property.
(b) Any record, claim, encumbrance e.g. an The plaintiff must return the benefits received
attachment, lien, inscription, adverse from the defendant [NCC 479]
claim, lis pendens, on a title; or
(c) Any proceeding e.g. an extrajudicial
partition of property. G. QUIETING OF TITLE V. REMOVAL OF
CLOUD
(2) The claim should appear valid or effective
and extraneous evidence is needed to Quieting of Preventing Removing of
prove their validity or invalidity; Title a Cloud Cloud

Test: Would the owner of the property in an There is always


There isn’t
action for ejectment brought by the adverse an adverse
always an
party be required to offer evidence to defeat a claim by virtue
adverse
recovery? There is no of an
claim (e.g.
claim yet instrument,
As a general rule, a cloud is not created by land
record, claim,
mere verbal or parole assertion of ownership registration
encumbrance or
or an interest in property. cases)
proceeding.
(3) Such instrument, etc. is, in truth and in Remedial
fact, invalid, ineffective, voidable, or Preventive Preventive
action
unenforceable, or has been extinguished or in nature action to
involving a
terminated, or has been barred by to prevent prevent a future
present
extinctive prescription; and a future cloud on the
adverse
cloud title
(4) Such instrument, etc. may be prejudicial claim
to the true owner or possessor.
General rule: Subject matter of quieting of H. PRESCRIPTION
title is limited to real property. [DE LEON,
Property, p. 215] Prescription of Action
Exception: Certain personal properties may When the plaintiff is in possession of the
be the subject of quieting of title. property, the action to quiet title does not
prescribe.
When the plaintiff is not in possession of the
F.2. REQUISITES OF AN ACTION TO real property, the action to quiet title may
PREVENT A CLOUD: prescribe depending upon the right of action
(1) Plaintiff has a title to a real property or filed by the plaintiff:
interest therein; (a) 10 yrs. – if plaintiff is a possessor with a
(2) Defendant is bent on creating a cloud on real right, i.e. accion publiciana, or if
the title or interest therein. The danger action is for reconveyance on the basis
must not be merely speculative or of a constructive trust under NCC 1456
imaginary but imminent; and (b) 30 yrs. – if plaintiff is the owner of real
(3) Unless the defendant is restrained or property
stopped, the title or interest of the plaintiff
will be prejudiced or adversely affected.

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Note:
VI. Co-ownership
An action to quiet title may be defeated by a The form of ownership when the ownership of
claim of ordinary or extraordinary acquisitive an undivided thing or right belongs to
prescription by the defendant. different persons. [NCC 484]
The regime of co-ownership exists when the
ownership of an undivided thing or right
belongs to different persons. By the nature of
co-ownership, a co-owner cannot point to any
specific portion of the property owned in
common as his own because his share in it
remains intangible and ideal. (Avila v. Sps.
Barabat, G.R. No. 141993, March 17, 2006).

A. REQUISITES
(1) Plurality of owners;
(2) Object must be an undivided thing or
right; and
(3) Each co-owner’s right must be limited
only to his ideal or abstract share of
the physical whole.

B. WHAT GOVERNS CO-OWNERSHIP


(1) Contracts;
(2) Special laws; and
(3) The Civil Code

C. CHARACTERISTICS OF CO-
OWNERSHIP
There are 2 or more co-owners.
There is a single object which is not
materially or physically divided and his ideal
share of the whole.
There is no mutual representation by the co-
owners.
It exists for the common enjoyment of the co-
owners.
It has no distinct legal personality.
It is governed first of all by the contract of the
parties; otherwise, by special legal provisions,
and in default of such provisions, by the
provisions of Title III on Co-Ownership.
There are ideal shares defined but not
physically identified [NCC 485]

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The share of the co-owners, in the benefits as


well as in the charges, shall be proportional
CO-OWNERSHIP PARTNERSHIP
to their respective interests.
As to creation
Any stipulation in a contract to the contrary
shall be void. Can be created Can be created only
The portions belonging to the co-owners in without formlaities by contract, express
the co-ownership shall be presumed equal, of a contract or implied
unless the contrary is proved. As to Juridical Personality
Each co-owner has absolute control over his Has no juridical or Has juridical
ideal share legal personality personality distinct
Every co-owner has absolute ownership of his from partners
undivided interest in the co-owned property As to Purpose
and is free to alienate, assign or mortgage his
interest, except as to purely personal rights. Purpose is collective Purpose is to obtain
While a co-owner has the right to freely sell enjoyment of the profits
and dispose of his undivided interest, thing
nevertheless, as a co-owner, he cannot As to Disposition of Shares
alienate the shares of his other co-owners –
nemo dat quod non habet. [Acabal v. Acabal Consent of other co- Partner needs to be
(2005)] owners not needed; authorized; he
transferee cannot substitute
Mutual respect among co-owners with regard automatically another as a partner
to use, enjoyment, and preservation of the becomes co-owner in his place
things as a whole
As to Existence of Mutual Agency
The property or thing held pro indiviso is
impressed with a fiduciary character: each co- There is no mutual A partner can
owner becomes a trustee for the benefit of his representation generally bind the
co-owners and he may not do any act partnership
prejudicial to the interest of his co-owners. As to Effect of Death or Incapacity
Until a judicial division is made, the Does not result in Results in
respective part of each holder cannot be dissolution dissolution
determined. The effects of this would be:
As to Formal Requisites
(a) Each co-owner exercises, together with
the others, joint ownership over the pro No public May be made in any
indiviso property, in addition to his use instrument is form except when
and enjoyment of the same needed even if the real property is
object of the co- contributed
(b) Each co-owner may enjoy the whole
ownership is a real
property and use it.
property
Redemption exercised by a co-owner inures
As to Agreement on the Period
to the benefit of his other co-owners [Mariano
v. CA (1993)] An agreement to There may be
keep the thing agreement as to a
undivided for a definite term
Only limitation period of more than without limit set by
Each co-owner of realty held pro indiviso 10 years is void law
exercises his rights over the whole property
and may use and enjoy the same with no
other limitation than that he shall not injure
the interests of his co-owners. [Pardell v. D. SOURCES OF CO-OWNERSHIP
Bartolome (1912)]
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D.1. LAW exceeding ten years, shall be valid. This term may
Cohabitation: co-ownership between be extended by a new agreement.
common law spouses A donor or testator may prohibit partition for a
The Family Code, in the following provisions, period which shall not exceed twenty years.
apply rules on co-ownership: Neither shall there be any partition when it is
Art. 147: between a man and a woman living prohibited by law.
together as husband and wife without the No prescription shall run in favor of a co-owner or
benefit of marriage but are capacitated to co-heir against his co-owners or co-heirs so long
marry each other, or under a void marriage as he expressly or impliedly recognizes the co-
Art. 148: between a man and a woman not ownership.
capacitated to marry each other
Art. 90: if matter is not provided in the FC By the creation of a Universal Partnership of
Chapter on ACP, then rules on co-ownership all present property
will apply
NCC 1778. A partnership of all present
property is that in which the partners
Purchase creating implied trust contribute all the property which actually
belongs to them to a common fund, with the
If two or more persons agree to purchase intention of dividing the same among
property and by common consent, the legal themselves, as well as all the profits which
title is taken in the name of one of them for they may acquire therewith.
the benefit of all, a trust is created by force of
law in favor of the others in proportion to the NCC 1779. In a universal partnership of all
interest of each. [NCC 1452] present property, the property which
belonged to each of the partners at the time
Easement of party wall: co-ownership of part- of the constitution of the partnership,
owners of a party wall [NCC 658] becomes the common property of all the
Condominium Law: co-ownership of the partners, as well as all the profits which they
common areas by holders of units may acquire therewith.

Sec. 6, RA 4726. The Condominium Act. A stipulation for the common enjoyment of
Unless otherwise expressly provided in the any other profits may also be made; but the
enabling or master deed or the declaration of property which the partners may acquire
restrictions, the incidents of a condominium subsequently by inheritance, legacy, or
grant are as follows: donation cannot be included in such
stipulation, except the fruits thereof
(c) Unless otherwise, provided, the common
areas are held in common by the holders
of units, in equal shares, one for each By Association and Societies with Secret
unit. Articles
NCC 1775. Associations and societies, whose
articles are kept secret among the members,
D.2. CONTRACT
and wherein any one of the members may
By Agreement of Two or More Persons contract in his own name with third persons,
shall have no juridical personality, and shall
Article 494, Civil Code. No co-owner shall be be governed by the provisions relating to co-
obliged to remain in the co-ownership. Each co- ownership.
owner may demand at any time the partition of
the thing owned in common, insofar as his share
is concerned.
Nevertheless, an agreement to keep the thing
undivided for a certain period of time, not

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D.3. INTESTATE SUCCESSION Harvesting and Fishing: Co-ownership by two


or more persons who have seized a res nullius
Co-ownership between the heirs before
thing
partition of the estate
NCC 1078. Where there are two or more heirs,
the whole estate of the decedent is, before its E. RIGHTS OF CO-OWNERS
partition, owned in common by such heirs,
subject to the payment of debts of the
deceased. E.1. RIGHT TO SHARE IN THE BENEFITS AS
For as long as the estate is left undivided the WELL AS THE CHARGES [NCC 485]
heirs will be considered co-owners of the Proportional to their interests;
inheritance.
Stipulation to the contrary is void;
If one of the heirs dies, his heirs will in turn be
Portion belonging to the co-owners is
co-owners of the surviving original heirs.
presumed equal.

D.4. TESTAMENTARY DISPOSITION OR


E.2. RIGHT TO USE THE THING OWNED IN
DONATION INTER VIVOS
COMMON [NCC 486]
When a donation is made to several persons
Limitations: That he use the thing in
jointly, it is understood to be in equal shares,
accordance with the purpose for which it is
and there shall be no right of accretion
intended.
among them, unless the donor has otherwise
provided. [NCC 753] That he uses it in such a way as to not injure
the interest of the co-ownership or prevent
Exception: Donations to spouses jointly, right
the other co-owners from using it.
of accretion is presumed unless donor
provides otherwise If co-owner exclusively uses property owned
in common, he is liable to pay rentals for
A donor or testator may prohibit partition for
other co-owners’ share [Pardell v. Bartolome
a period which shall not exceed 20 years.
(1912)].

D.5. BY FORTUITOUS EVENT OR BY


E.3. RIGHT TO BRING AN ORDER IN
CHANCE
EJECTMENT [NCC 487]
Co-ownership between owners of 2 things
that are mixed by chance or by will of the
owners: E.4. RIGHT TO COMPEL OTHER CO-
OWNERS TO CONTRIBUTE TO THE
NCC 472. Each owner shall acquire a right EXPENSES OF PRESERVATION AND TO
proportional to the part belonging to him, THE TAXES [NCC 488]
bearing in mind the value of the things mixed or
confused. Any one of the other co-owners may exempt
himself by renouncing so much of his
undivided interest as may be equivalent to his
Hidden Treasure share of the expenses and taxes.

When the discovery is made on the property If a co-owner has paid taxes to prevent
of another, or of the State or any of its forfeiture of the common property for tax
subdivisions, and by chance, one-half shall be delinquency, he could compel contribution
allowed to the finder. [NCC 438] from his co-owners [PARAS].
No waiver if it is prejudicial to the co-
ownership
Note:
D.6. BY OCCUPANCY
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Renunciation needs the consent of other co- (2) When the donor or testator imposes a
owners as this is akin to a dacion en pago condition of indivision, but must not
[J.B.L. Reyes] exceed 20 years [NCC 494].
(3) When the legal nature of the
community prevents partition.
E.5. RIGHT TO REPAIR [NCC 489]
(4) When partition would render the
Repairs for preservation may be made at the
thing unserviceable [NCC 495].
will of one of the co-owners but he must first
notify his co-owners if practicable. (5) When partition is prohibited by law
[NCC 494].
Expenses to improve or embellish, decided
upon by a majority.
An agreement to keep the thing undivided for
a certain period not exceeding 10 years is
E.6. RIGHT TO OPPOSE ALTERATIONS
valid.
Consent of all the others is needed to make
Term may be extended by a new agreement.
alterations, even if the alteration benefits all.
[NCC 491] Donor or testator may prohibit partition,
period not to exceed 20 years.
If the withholding of the consent is clearly
prejudicial to the common interest, the courts
may afford relief
E.9. RIGHT TO REDEMPTION [NCC 1619]
Reason for the rule: alteration is an act of
May exercise this in case the shares of other
ownership, not of mere administration.
co-owners are sold to a third person
If 2 or more co-owners wish to exercise this
E.7. RIGHT TO FULL OWNERSHIP OF HIS right, redemption will be made in proportion
PART AND OF THE FRUITS AND BENEFITS to their share in the thing
PERTAINING THERETO [NCC 493]
Therefore he may alienate, assign or
E. 10. RIGHT TO PROTEST AGAINST ACTS
mortgage it, and even substitute another
OF MAJORITY WHICH ARE PREJUDICIAL
person in its enjoyment except when personal
TO MINORITY [NCC 492(3)]
rights are involved.
Should the resolution of the majority be
The effect of the alienation or the mortgage,
seriously prejudicial to those interested in the
with respect to the co-owners, shall be
property owned in common:
limited to the portion which may be allotted
to him in the division upon the termination of The court, at the instance of an interested
the co-ownership. party, shall order such measures as it may
deem proper, including the appointment of
an administrator.
E.8. RIGHT TO PARTITION
General Rule: Each may demand at any time
Note:
the partition of the thing, insofar as his share
is concerned, and as long as the co- Rules on Co-Ownership do not apply to CPG
ownership lasts or is recognized or ACP. These are governed by the Family
Code. Even void marriages and cohabitation
Exceptions to the right to demand partition at
of incapacitated persons are governed by FC
any time:
50, 147, and 148.
(1) When there is stipulation prohibiting
it, but must not exceed 10 years [NCC
494].

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F. IMPLICATIONS OF CO-OWNER’S G.2. REPAIRS FOR PRESERVATION


RIGHT OVER HIS IDEAL SHARE First, notify other co-owners, as far as
Co-Owner has the right: practicable.
(1) To share in fruits and benefits Co-owner may advance expenses for
preservation even without prior consent; he is
(2) To alienate, mortgage or encumber and entitled to reimbursement.
dispose of his ideal share—but other
owners can exercise right of redemption
(3) To substitute another person in the G.3. EMBELLISHMENTS OR
enjoyment of the thing IMPROVEMENTS
(4) To renounce part of his interest to Notify co-owners of improvements and
reimburse necessary expenses incurred by embellishments to be made.
another co-owner (NCC 488) If no notification is made, the co-owner who
EFFECT OF TRANSACTION BY EACH CO- advanced the expenses will only have the
OWNER right to be reimbursed if he proves the
necessity of such repairs and the
(1) Limited to his share in the partition reasonableness of the expenses.
(2) Transferee does not acquire any specific Exception: If proven that had there been a
portion of whole property until partition notification, they could have hired another
(3) Creditors of co-owners may intervene in who would charge lessor that they know of a
partition or attack the same if prejudicial store that sells the needed material at a
[NCC 499], except that creditors cannot cheaper price. The reimbursement will be
ask for rescission even if not notified in the limited to the amount that should have been
absence of fraud. [NCC 497] spent had he notified the others, and the
difference shall be borne by him alone.

G. RULES
Decisions by the majority must be followed.
Act of Co-Owner Consent Needed
G.1. ON RENUNCIATION OF SHARE
(DIFFERENT FROM RENUNCIATION OF Preservation May be made at will
CO-OWNERSHIP) by any co-owner but
must first notify
Other co-owners may choose not to other co-owners if
contribute to the expenses by renouncing so practicable
much of his undivided interest as may be
equivalent to his share of the necessary Alterations Consensus of
expenses and taxes. Majority
Renunciation must be express; thus, failure Lease for more than 1 Consensus of
to pay is nota renunciation of the right. year Majority
Requires the consent of other co-owners Acts of administration Majority of co-
because it is a case of dacion en pago owners
(cessation of rights) involving expenses and
Improvement/ Majority of co-
taxes already paid. [J.B.L. Reyes]
Embellishing the owners
Cannot renounce his share if it will be Thing/ Useful
prejudicial to another co-owner. expenses

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H. TERMINATION OR Form: Oral or Written (Statute of Frauds does


EXTINGUISHMENT not operate here because it is not a
conveyance of property but a mere
segregation or designation of which parts
H.1. TOTAL DESTRUCTION OF THING OR belong to whom)
LOSS OF THE PROPERTY CO-OWNED The Rules of Court do not preclude
Is there still co-ownership if a building is agreements or settlements.
destroyed? Yes, over the land and the debris.

H.5. SALE OF PROPERTY CO-OWNED


H.2. MERGER OF ALL INTERESTS IN ONE H.6. TERMINATION OF PERIOD AGREED
PERSON UPON BY THE CO-OWNERS
H.7. EXPROPRIATION; AND
H.3. ACQUISITIVE PRESCRIPTION H.8. JUDICIAL OR EXTRAJUDUCIAL
By whom PARTITON
(1) A third person. [NCC 1106]
(2) A co-owner against the other co-owners. Action for partition will determine:
(1) Whether or not the plaintiff is indeed a
co-owner of the property
Requisites for acquisitive prescription against
co-owners [Adille v CA (1988)]: (2) How the property will be divided between
the plaintiff and defendant.
(a) A co-owner repudiates the co-ownership
by executing unequivocal acts of
repudiation leading to ouster of other co- Effects of Partition
owners;
(1) Confers exclusive ownership of the
(b) The act of repudiation is clearly made property adjudicated to a co-heir.
known to other co-owners;
(2) Co-heirs shall be reciprocally bound to
(c) The evidence thereon is clear and warrant the title to and the quality of
conclusive; and each property adjudicated.
(d) The co-owner has been in possession thru (3) Reciprocal obligation of warranty shall be
open, continuous, exclusive and notorious proportionate to the respective hereditary
possession of the property for the period shares of co-heirs.
required by law.
(4) An action to enforce warranty must be
Note: brought within 10 years from the date the
There is a presumption that possession of a right accrues.
co-owner is not adverse (5) The co-heirs shall not be liable for the
Registration under the Torrens system is subsequent insolvency of the debtor of
constructive notice of title but is not sufficient the estate.
notice of the act of repudiation. [Adille v CA
(1988)]
Rights against individual co-owners in case of
partition [NCC 497]
H.4. PARTITION OR DIVISION The creditors are allowed to take part in the
Procedure for Partition partition.
Governing rule: Rule 69 of the Rules of Court. Reason for the rule: They own part of the
interest of the co-owners who made the
How: By agreement of parties or by judicial assignment or alienation.
decree.
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VII. Possession
Intervention of creditors and assignees The holding of a thing or the enjoyment of a
General Rule: Creditors may take part in the right. [NCC 523]
division. They need to establish the existence
of the credit during co-ownership.
A. CONCEPT OF POSSESSION
Exception: If the partition was already
executed, they cannot impugn partitiion To possess, in a grammatical sense, means to
have, to physically and actually occupy a
Exception to the exception: If there was fraud, thing, with or without right. [Sanchez Roman]
or a previous formal opposition to prevent the
partition, without prejudice to right of It is the holding of a thing or a right, whether
debtor/assignor to maintain its validity. by material occupation or by the fact that the
thing or the right is subjected to the action of
our will. [Manresa]
Rules on notice to creditors and assignees: Possession includes the idea of occupation. It
(1) The law does not expressly require cannot exist without it.
previous notice to the creditors and Exceptions: Acts merely tolerated, and those
assignees before a partition, but the latter executed clandestinely and without the
have the right of creditors and assignees knowledge of the possessor of a thing, or by
to take part in the division. violence, do not affect possession. [NCC 537]
(2) If notice is not given, the partition may be Right of possession Right to possess
impugned by creditor/assignee if made in
fraud of creditors. (jus possessionis) (jus possidendi)
(3) Once notice has been given, it is the duty Independent right Incident to
of creditors and assignees to intervene ownership
and make known their stand.
(a) If they fail, they cannot question the Possession is not a definitive proof of
division made, except in cases of fraud. ownership nor is non-possession inconsistent
(b) If they formulate a formal question, therewith [Heirs of G. Bofill v. CA, G.R. No.
they can contest such partition 107930, October 7, 1994].

Partition of an indivisible thing (NCC 498) B. ESSENTIAL REQUISITES OF


1st option: The co-owners can agree that one POSSESSION
of them shall be the sole owner by paying the Corpus possessionis: Holding (actual or
value of other co-owners’ shares constructive) of a thing or exercise of a right,
2nd option: If they cannot agree who among if right is involved.
them shall be sole owner, the property will be Possession and cultivation of a portion of a
sold to a 3rd person and the proceeds tract under claim of ownership of all is a
distributed among them. constructive possession of all, if the
remainder is not in adverse possession of
another [Ramos v. Director of Lands (1918)]; or
the land area is so big that it is impossible
that there are no adverse possessors.
Doctrine of constructive possession applies
when the possession is under title calling for
the whole. It does not apply where possession
is without title.

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Possession in the eyes of the law does not Period of acquisitive prescription will depend
mean that a man has to have his feet on every upon good/bad faith of possessor.
square merer of ground before it can be said
Possessor is a possession in the concept of
he is in possession (Ramos v. Director of
owner.
Lands, G.R. No. 13298, November 19, 1918).
Note:
(4) (Dominium) Possession with a just title
To apply the doctrine, intention to possess
from the true owner
must be proved.
This is possession that springs from
ownership.
Animus possidendi: Intention to possess
Actually, jus possidendi not just jus
There is no possession if the holder does not possessionis.
want to exercise the rights of a possessor.
Highest form of possession
Implied from the acts of the possessor.
May be contradicted and rebutted by
evidence – to prove that the person who is in D. CLASSES OF POSSESSION
possession does not in fact exercise power or
control and does not intend to do so.
D.1. POSSESSION FOR ONESELF, OR
POSSESSION EXERCISED IN ONE’S OWN
NAME AND POSSESSION IN THE NAME OF
C. DEGREES OF POSSESSION
ANOTHER [NCC 524]
(1) Grammatical degree - Mere holding or
In one’s own name – the fact of possession
possession without title and in violation of
and the right to such possession is found in
the right of the owner
the same person.
e.g. Possession of a thief or usurper of land
In the name of another – the one in actual
Here, both the possessor and the public know possession is without any right of his own, but
that the possession is wrongful. is merely an instrument of another in the
exercise of the latter’s possession.

(2) Juridical possession - Possession with


juridical title but not that of ownership D.2. POSSESSION IN THE CONCEPT OF AN
OWNER, AND POSSESSION IN THE
e.g. possession of a tenant, depository agent,
CONCEPT OF A HOLDER WITH THE
bailee trustee, lessee, antichretic creditor.
OWNERSHIP BELONGING TO ANOTHER
This possession is peaceably acquired. [NCC 525]
This degree of possession will never ripen into Possession in Concept of Holder
full ownership as long as there is no
One who possesses as a mere holder, not in
repudiation of concept under which property
the concept of owner, acknowledges in
is held.
another a superior right which he believes to
be ownership, whether his belief be right or
wrong. He is also a possessor under the
(3) Real possessory right - Possession with
second degree of possession.
just title or title sufficient to transfer
ownership, but not from the true owner e.g. tenant, usufructuary, borrower in
commodatum.
e.g. possession of a vendee from a vendor
who pretends to be the owner.
This degree of possession ripens into full
ownership by lapse of time.

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Possession in Concept of Owner The belief of a possessor that he is the owner


of the thing must be based upon the title or
May be exercised by the owner himself or one
mode of acquisition, such as a sale, a
who claims to be so.
donation, inheritance or other means of
When a person claims to be the owner of a transmitting ownership; for without this,
thing, whether he believes so or not, acting as there can be no real, well-grounded belief of
an owner, and performing acts of ownership, one’s ownership.
and he is or may be considered as the owner
Error in the application of the law, in the legal
by those who witness his exercise of
solutions that arise from such application, in
proprietary rights, then he is a possessor in
the appreciation of legal consequence of
the concept of owner. This is the kind of
certain acts, and in the interpretation of
possession that ripens into ownership under
doubtful or difficult provisions or doctrines,
Article 540, when such possession is public,
may properly serve as basis for good faith.
peaceful and uninterrupted. [see Art. 1118].

Possessor in bad faith: one who knows his


Effects of Possession in Concept of an Owner
title is defective.
(1) Converted into ownership by the lapse of
Only personal knowledge of the flaw in the
time necessary for prescription.
title or mode of acquisition can make him a
(2) Possessor can bring all actions necessary possessor in bad faith for bad faith is not
to protect his possession, availing himself transmissible from one person to another.
of any action which an owner can bring,
Mistake or ignorance of the law, by itself,
except accion reivindicatoria which is
cannot become the basis of good faith. What
substituted by accion publiciana.
makes the error or ignorance a basis of good
(3) He can ask for the inscription of faith is the presence of an apparent “doubt”
possession in the registry of property. or “difficulty” in the law. In other words, the
law is complex, ambiguous, or vague such
(4) Upon recovering possession from one who
that it is open to two or more interpretations.
has unlawfully deprived him of it, he can
demand fruits and damages. When the ignorance of the law is gross and
(5) He can do on the thing possessed inexcusable, as when a person of average
intelligence would know the law, such
everything that the law authorizes an
ignorance cannot be the basis of good faith.
owner to do; he can exercise the right of
Otherwise, the intendment of Article 3 which
pre-emption and is entitled to the
states that, “Ignorance of the law excuses no
indemnity in case of expropriation.
one from compliance therewith,” will be
defeated.
D.3. POSSESSION IN GOOD FAITH AND
POSSESSION IN BAD FAITH [NCC 526]
What Things May be Possessed [NCC 530]
Possessor in good faith: one who is not aware
Only things and rights which are susceptible
that there exists in his title or mode of
of being appropriated may be the object of
acquisition any flaw or defect which
possession.
invalidates his title or mode of acquisition.
Good faith – consists in the possessor’s belief
that the person from whom he received a What May Not Be Possessed by Private
thing was the owner of the same and could Persons
convey his title.
(1) Res Communes
It implies freedom from knowledge and
(2) Property of Public Dominion
circumstances which ought to put a person
on inquiry. (3) Right under discontinuous and/or non-
apparent easement

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(4) Prohibited by law the control of the transferee, e.g. keys to a


warehouse includes contents thereof.
(2) Tradicion longa manu – by the transferor
Extent of Possession
pointing out to the transferee the things
(1) Actual possession – occupancy in fact of that are being transferred.
the whole or substantially the whole of a
property
By execution of proper acts under legal
(2) Constructive possession – occupancy of
formalities
part in the name of the whole, under such
circumstances that the law extends the This mode refers to juridical acts or the
occupancy to the possession of the acquisition of possession by sufficient title
wholes evidenced by the performance of required
formalities.
Examples: Donations; Succession; Contracts
E. ACQUISITION OF POSSESSION (like a sale with right to repurchase); Judicial
possession; Execution of judgments;
Execution and registration of public
E.1. WAYS OF ACQUIRING POSSESSION
instruments; Inscription of possessory
[NCC 531]
information titles.
By material occupation
The execution of the required formalities is
“Material occupation” – used in its ordinary equivalent to delivery of the property.
meaning and not in its technical meaning
under NCC 712, which defines occupation as a
mode of acquiring ownership. E.2. BY WHOM MAY POSSESSION BE
ACQUIRED [NCC 532]
Possession acquired by material occupation
is only possession as a fact, not the legal right (1) By the same person
of possession. (2) By his legal representative
Constructive delivery is considered as an (3) By his agent
equivalent of material occupation in two
situations where such occupation is essential (4) By any person without any power
to the acquisition of possession: whatsoever but subject to ratification,
without prejudice to proper case of
(1) Tradicion brevi manu – takes place when negotiorum gestio [Arts. 2144, 2149, 2150]
one who possesses a thing by title other
than ownership, continues to possess the By his legal representative
same under a new title, that of ownership. Qualifiedly, minors and incapacitated
(2) Tradicion constitutum possessorium – persons [NCC 535]
takes place when the owner alienates the (a) Incapacitated – all those who do not
thing, but continues to possess the same have the capacity to act (insane,
under a different title. lunatic, deaf-mutes who cannot read
and write, spendthrifts and those under
civil interdiction).
By subjection to the action of one’s will
(b) Object of possession– things only, not
This mode refers more to the right of rights.
possession than to possession as a fact. The
“action of our will” must be juridical, in the (c) Method of acquisition – material
sense that it must be according to law. occupation; acquisition by means for
which the incapacitated person has the
It includes: capacity, such as acquisition by
(1) Tradicion symbolica – by delivering some succession, testate or intestate, or by
object or symbol placing the thing under
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donations propter nuptias, pure and court, if holder refuses to deliver the thing
simple donations. (NCC 536).

F. WHAT DO NOT AFFECT POSSESSION Effect on Possession


[NCC 537] Acts mentioned do not constitute true
possession. They do not interrupt the period
of prescription nor affect the rights to the
F.1. ACTS MERELY TOLERATED fruits.
Those which because of neighborliness or Note:
familiarity, the owner of property allows
another person to do on the property; If a deforciant succeeds in remaining in
possession through force and intimidation for
Those services or benefits which one’s more than one year, he becomes a de jure
property can give to another without material possession.
injury or prejudice to the owner, who permits
them out of friendship or courtesy;
Permissive use merely tolerated by the RULES TO SOLVE CONFLICTS OF
possessor cannot affect possession and POSSESSION [NCC 538]
cannot be the basis of acquisitive General Rule: Possession cannot be
prescription. Possession to constitute the recognized in two different personalities,
foundation of prescriptive right must be except in cases of co-possession by co-
possession under claim of title; it must be possessors without conflict of claims or
adverse. [Cuaycong v. Benedicto (1918)] interest.
In case of conflicting possession – preference
F.2. ACTS EXECUTED CLANDESTINELY is given to:
AND WITHOUT THE KNOWLEDGE OF THE (1) Present possessor or actual possessor;
POSSESSOR [NCC 1108]
(2) If there are two or more possessors, the
Possession by possessor is not affected as one longer in possession;
long as it remains clandestine and unknown.
Possession has to be in the concept of an (3) If the dates of possession are the same,
owner, public, peaceful and uninterrupted. the one who presents a title; or
(4) If all conditions are equal, the thing shall
be placed in judicial deposit pending
F.3. ACTS OF VIOLENCE AS LONG AS determination of possession or ownership
THE POSSESSOR OBJECTS THERETO [NCC through proper proceedings.
536]
Possession cannot be acquired through force
or intimidation as long as there is a possessor G. EFFECTS OF POSSESSION
who objects thereto. This includes forcibly
taking away the property from another, and
also when one occupied the property in the G.1. RIGHTS OF A POSSESSOR IN GOOD
absence of another, and repels the latter FAITH
upon his return. (1) Right to be protected and respected in
Possessor must file a case of forcible entry if possession; (NCC 539)
property is an immovable, and replevin if (2) Right to bring action to restore
property is a movable. possession;
He who believes that he has an action or a (3) Right to the fruits already received; (NCC.
right to deprive another of the holding of a 544)
thing must invoke the aid of a competent

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At the time good faith possession ceases, No right to reimbursement for useful
he has the right to a part of cultivation improvements and no limited right of
expenses and to a part of net fruits in removal.
proportion to time of possession (NCC.
545)
G.4. OBLIGATIONS OF A POSSESSOR IN
(4) Right to necessary expenses; (NCC. 546)
BAD FAITH
(5) Right to retain the thing until reimbursed;
Reimburse the value of fruits received and
(NCC. 546)
which the legitimate possessor could receive;
(6) Right to remove useful improvements (NCC 549)
removable without damage to the
Pay in proportion to the charges, expenses of
principal thing or to refund its value;
cultivation and the net proceeds upon
(upon election by the owner) (NCC. 547)
cessation of good faith; (NCC 545)
(7) Right to recover removable ornaments
Costs of litigation; (NCC 550)
unless owner opts to buy them (NCC. 548)
Liability to the deterioration/loss of a thing
possessed in every case, including fortuitous
G.2. OBLIGATIONS OF A POSSESSOR IN events. (NCC 552)
GOOD FAITH
Pay in proportion to the charges, expenses of
G.5. RIGHT TO BE PROTECTED IN HIS
cultivation and the net proceeds upon
cessation of good faith; (NCC 545) POSSESSION [NCC 539]
The owner of the thing may give the Every possessor has a right to be respected in
possessor in good faith the right to finish the his possession; if disturbed, possessor has a
cultivation and gathering of the growing right to be protected in or restored to said
fruits, as an indemnity for his part of the possession.
expenses of cultivation and the net proceeds.
“Every possessor” includes all kinds of
The possessor in good faith who refuses to
possession, from that of an owner to that of a
accept this concession shall lose the right to
mere holder, except that which constitutes a
be indemnified in any other manner.
crime
Costs of litigation; (NCC 550) Reason for the rule: To prevent anyone from
Liability to the deterioration/loss of a thing taking the administration of justice into his
possessed if acted through fraudulent own hands. Even the owner cannot forcibly
intent/negligence after the judicial summons. eject the possessor, but must resort to the
(NCC 552) courts.

G.3. RIGHTS OF A POSSESSOR IN BAD Rules


FAITH
Lawful possessor can employ self-help [NCC
(1) Right to be respected in possession; (NCC 429]
539)
To consolidate title by prescription, the
(2) Right to necessary expenses and the possession must be under claim of
expenses for production, gathering, and ownership, and it must be peaceful, public
preservation of fruits; (NCC. 545 and 546) and uninterrupted.
Does not have right to reimbursement of Acts of possessory character done by virtue of
expenses for luxury but may remove them a license or mere tolerance by the real owner
as long as the principal thing suffers no are not sufficient and will not confer title by
injury, or may sell them to the owner who prescription or adverse possession.
opts to buy the removable ornaments.

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(a) Possession of real property presumes The expenses are not considered
possession of the movables therein improvements; they do not increase the value
[NCC 542]. of the thing, but merely prevent them from
becoming useless.
(b) Each co-owner is deemed to have
exclusive possession of the part which A possessor in bad faith is entitled to
may be allotted to him upon the reimbursement for necessary expenses but
division, for the entire period during without right of retention.
which the co-possession lasted.
Interruption in the possession of the whole or
H.2. USEFUL EXPENSES
a part of a thing possessed in common shall
be to the prejudice of all the possessors. [NCC Incurred to give greater utility or productivity
543]. to the thing, e.g. Wall surrounding an estate,
an irrigation system, planting in an
uncultivated land, a fishpond, an elevator in
RULES ON CO-POSSESSION the building, electric lighting system
(a) For the entire period that the co- They are reimbursed only to the possessor in
possession lasted, each one of the GF as a compensation or reward for him. A
participants of a thing possessed in possessor in BF cannot recover such
common shall be deemed to have expenses.
exclusively possessed the part
If the useful improvements can be removed
allotted to him upon division thereof
without damage to the principal thing, the
[NCC 543]
possessor in good faith may remove them,
(b) Interruption in the possession of the unless the person who recovers the
whole or a part of the thing possession refunds the expenses or pays the
possessed in common shall be to the increase in value which the thing may have
prejudice of all possessors [Ibid]. acquired by reason thereof.
(c) In case of civil interruption, Rules of Bad faith possessor has no limited right of
Court applies [Ibid]. removal.
Note: Civil interruption
When interruption is produced by judicial H.3. EXPENSES FOR LUXURY
summons to the possessor, and only those
They do not affect the existence or the
possessors served with judicial summons are
substance of the thing itself, but only the
affected [DE LEON].
comfort, convenience or enjoyment of the
possessor.
H. REIMBURSEMENT FOR EXPENSES – They are not the subject of reimbursement,
POSSESSOR IN GOOD/BAD FAITH because the law does not compensate
[NCC 546-552] personal whims or caprices, e.g. Opening of a
garden, placing fountains and statues in it,
adorning the ceilings with paintings, and the
H.1. NECESSARY EXPENSES walls with reliefs.
Imposed by the thing itself for its preservation Bad faith possessor has no right of
and has no relation to the desire or purpose reimbursement but has limited right of
of the possessor. removal, where owner has the option to buy
removable ornament.
They are the “cost of living” for the thing and
must be reimbursed to the one who paid
them, irrespective of GF or BF. Notes
Only the possessor in GF may retain the thing Costs of litigation over the property shall be
until he has been reimbursed therefor. borne by every possessor. [NCC 550]
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Improvements caused by nature or time shall Possessor in GF Possessor in BF


always inure to the benefit of the person who
has succeeded in recovering possession [NCC retention in the (546)
551] meantime (546)
Includes all the natural accessions referred to Useful Expenses
by articles 457-465, and all those that do not
depend upon the will of the possessor. (e.g. Right of retention until
widening of the streets, rising of fountains of reimbursed; Owner’s
fresh or mineral water, increase of foliage of option to reimburse
trees) him either for
expenses or for
increase in value
Possessor in GF Possessor in BF which the thing may
have acquired (546) No right to
Fruits Received reimbursement and
no right of removal
Must reimburse the Limited right of (547)
legitimate possessor removal – should not
Entitled to the fruits
for fruits received or damage principal and
while possession is in
could have been owner does not
GF and before legal
received, less exercise option of
interruption (544)
expenses under Art. paying the expenses
443 (549) or increase in value
(547)
Pending Fruits
Ornamental Expenses
Entitled to part of the
expenses of Limited right of Limited right of
cultivation, and to a removal (548) removal (549)
part of the net harvest,
in proportion to the Deterioration or Loss
time of the possession.
Goes to the No liability unless due
legitimate possessor to fraud or negligence
Indemnity may be, at who recovers Liable in every case
after becoming in BF
the owner’s option, possession (549) (552)
after service of
1. In money, OR summons (552)

2. By allowing full Costs of Litigation


cultivation and
gathering of the fruits Bears cost (550) Bears cost (550)
(545)

Charges

Must share with the


legitimate possessor,
Same as with GF
in proportion to the
(545)
time of the possession
(545)

Necessary Expenses

Right to
Reimbursement only
reimbursement and
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I. LOSS OR UNLAWFUL DEPRIVATION I.3. FINDER OF LOST MOVABLE [NCC 719-


OF A MOVABLE PROPERTY 720]
Whoever finds a movable, which is not a
treasure, must return it to its previous
I.1. POSSESSION OF MOVABLE ACQUIRED possessor.
IN GOOD FAITH (IN CONCEPT OF OWNER)
IS EQUIVALENT TO TITLE [NCC 559] If the previous possessor is unknown, the
finder shall immediately deposit it with the
Possessor has actual title which is defeasible mayor of the city or municipality where the
only by true owner. finding has taken place.
Requisites of title: The finding shall be publicly announced by
(1) Possession in GF; the mayor for two consecutive weeks in the
way he deems best.
(2) The owner has voluntarily parted with the
possession of the thing; and If the movable cannot be kept without
deterioration, or without expenses which
(3) The possession is in the concept of an considerably diminish its value, it shall be
owner. sold at public auction 8 days after the
Nevertheless, one who has lost any movable publication.
or has been unlawfully deprived thereof may 6 months from the publication having
recover it from the person in possession. elapsed without the owner having appeared,
When the owner can recover the thing found, or its value, shall be awarded
to the finder. The finder and the owner shall
(a) Has lost the thing; or be obliged, as the case may be, to reimburse
(b) Has been unlawfully deprived thereof. the expenses.
(c) Includes swindling, not only theft or If the owner should appear in time, he shall
robbery be obliged to pay, as a reward to the finder,
1/10 of the sum or of the price of the thing
If the current possessor has acquired it in found.
good faith at a public sale, owner must
reimburse the price paid in order to recover
the property.
J. EFFECTS OF POSSESSION IN THE
CONCEPT OF AN OWNER
I.2. PERIOD TO RECOVER [NCC 1140, 1132, General Rule: Possession may lapse and ripen
1133] into full ownership. Possession in the concept
Actions to recover movable properties of owner has in his favor the presumption
prescribe after 8 years from the time the that he has just title and he cannot be
possession thereof is lost, unless the obliged to show or prove it; but not for
possessor has acquired the ownership by purposes of acquisitive prescription. [NCC
prescription for a lesser period. 541] For purposes of prescription, just title
must be proved; it cannot be presumed. [NCC
Ownership of movable properties prescribes 1131]
through uninterrupted possession for 4 years
in good faith. Basis: Possession presumes ownership,
unless the contrary is proved.
Ownership of personal property also
prescribes through uninterrupted possession Kinds of titles:
for 8 years, without need of any other (1) True and Valid Title - there was a mode of
condition. transferring and the grantor was the
Movable properties possessed through a owner
crime can never be acquired through (2) Colorable Title – there was a mode of
prescription by offender (NCC 1133). transferring but the grantor was not the
owner
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(3) Putative Title – title of a person who Of continuity of initial good faith in which
belives himself to be the owner, but is not possession was commenced; possession in
because there was no mode of acquiring good faith does not lose this character except
ownership in case and from the moment possessor
became aware or is not unaware of improper
Just title: that which is legally sufficient to
or wrongful possession [NCC 528]
transfer the ownership or the real right to
which it relates.
For the purposes of prescription, there is just Good faith ceases from the date of the
title when the adverse claimant came into summons to appear at the trial if
possession of the property through one of the defendant/possessor loses the case. [Cordero
modes recognized by law for the acquisition v Cabral (1983)]
of ownership or other real rights, but the
Good faith ceases when there is:
grantor was not the owner or could not
transmit any right. [NCC 1129] (a) Extraneous evidence; or
Exception: For the purposes of prescription, (b) A suit for recovery of the property by the
just title must be proved; it is never true owner.
presumed. [NCC 1131]
Of enjoyment of possession in the same
Possessor may bring all actions necessary to character in which possession was acquired
protect his possession except accion until the contrary is proved [NCC 529]
reivindicatoria.
Of non-interruption of possession in favor of
May employ self-help under Art. 429. present possessor who proves possession at a
previous time until the contrary is proved
Possessor may ask for inscription of such real
[NCC 554]
right of possession in the registry of property.
Possession is interrupted for the purposes of
Has right to the fruits and reimbursement of
prescription, naturally or civilly. [NCC 1120]
expenses (assuming he is possessor in good
faith) Possession is naturally interrupted when
through any cause it should cease for more
Upon recovery of possession which he was
than one year [NCC 1121]
unlawfully deprived of, may demand fruits
and damages. Old possession is not revived if a new
possession should be exercised by the same
Generally, he can do on the things possessed
adverse claimant [NCC 1121]
everything that the law authorizes the owner
to do until he is ousted by one who has a If the natural interruption is for only one year
better right. or less, the time elapsed shall be counted in
favor of the prescription [NCC 1122]
This is whether possession is in good faith or
in bad faith [NCC. 528] Civil interruption is produced by judicial
summons to the possessor. [NCC 1123]
Judicial summons shall be deemed not to
Presumption in favor of the possessor — for
have been issued and shall not give rise to
acquisitive prescription
interruption [NCC 1124]:
Of good faith until contrary is proved
(a) If it should be void for lack of legal
Presumption is only juris tantum because solemnities;
possession is the outward sign of ownership.
(b) If the plaintiff should desist from the
Unless such proof of bad faith is presented,
complaint or should allow the
the possessor will be held to be in good faith.
proceedings to lapse;
[NCC 527]
(c) If the possessor should be absolved from
So long as the possessor is not actually aware
the complaint
of any defect invalidating his title, he is
deemed a possessor in good faith.
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In all these cases, the period of the which the person may have in a thing, with
interruption shall be counted for the intent to lose such a thing. To be effective, it
prescription is necessary that it be made by a possessor in
the concept of an owner.
Non-interruption of possession of property
unjustly lost but legally recovered [NCC. 561] It must clearly appear that the spes
recuperandi is gone and the animus revertendi
is finally given up.
Other presumptions with respect to specific
properties of property rights
K.2. ASSIGNMENT, EITHER GRATUITOUS
(1) Of extension of possession of real property
OR ONEROUS
to all movables contained therein so long
as in is not shown that they should be Complete transmission of ownership rights to
excluded [NCC 542] another person, gratuitously or onerously.
Non-interruption of possession of hereditary
property [NCC 553]
K.3. POSSESSION BY ANOTHER
(a) Possession of hereditary property is
Acts merely tolerated, and those executed
deemed transmitted to the heir without
clandestinely and without the knowledge of
interruption and from the moment of
the possessor of a thing, or by violence, do
the death of the decedent
not affect possession.
Of just title in favor of possessor in concept of
Possession that is lost here refers only to
owner [NCC 541]
possession as a fact (de facto), not the legal
Exclusive Possession of Common Property right of possession (de jure). It is the
[NCC. 543] possession that the new possessor acquires.
Present possessor may tack his possession to Real right of possession is lost only after 10
that of his grantor or predecessor in interest years.
[NCC 1138 (1)]
After 1 year, the actions for forcible entry and
unlawful detainer can no longer be brought.
But accion publiciana may still be instituted
K. LOSS/TERMINATION OF to recover possession de jure.
POSSESSION [NCC 555]
ACTS NOT CONSTITUTING LOSS OF
(1) By the abandonment of the thing; POSSESSION [NCC 537-538]
(2) By an assignment made to another either (1) Acts executed by stealth and wthout
by onerous or gratuitous title; knowledge of the possessor;
(3) By the destruction or total loss of the (2) Acts merely tolerated either by the
thing, or because it goes out of possessor or by his representative or
commerce; holder in his name unless authorized or
(4) By the possession of another, subject to ratified;
the provisions of Art. 537, if the new (3) Violence; and
possession has lasted longer than 1 year.
But the real right of possession is not lost (4) Temporary ignorance of the whereabouts
till after the lapse of 10 years. of the movable property.

K.1. ABANDONMENT L. RULES FOR LOSS OF MOVABLES


Includes the giving up of possession, and not The possession of movables is not deemed
necessarily of ownership by every possessor. lost so long as they remain under the control
of the possessor, even though for the time
It is the opposite of occupation. It consists of being he may not know their whereabouts.
the voluntary renunciation of all the rights (NCC 556)
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Control – judicial control or right, or that the


thing remains in one’s patrimony. VIII. Usufruct
Usufruct is a temporary real right which gives
Wild animals are possessed only while they a right to enjoy the property as well as its
are under one's control. (NCC 560) fruits of another with the obligation of
Domesticated or tamed animals – if they preserving its form and substance, unless the
retain the habit of returning to the premises title constituting it or the law otherwise
of the possessor. provides. [NCC 562]

M. KINDS OF ANIMALS Easement Usufruct

Maybe constituted Maybe constituted on


M.1. WILD OR FERAL only on an immovable either movable or
property immovable property
those which live naturally independent of
man. Not extinguished by Extinguished by the
the death of dominant death of usufructuary
owner
M.2. TAMED
those which, being wild by nature, have Non-possessory right Involves a right of
become accustomed to recognize the over an immovable possession in an
authority of man. When they observe this immvovable
habit of returning to the place which the
Limited to particular Includes all the uses
possessor keeps them, they are placed in the
or specific use of the and the fruits of the
same category as domestic and when they
servient estate property
lose it, they are considered as wild.

M.3. DOMESTIC There can be no easement over a usufruct


because an easement may be constituted
those which are born and reared ordinarily only on corporeal real property.
under the control and care of man; they are
under the ownership of man, and do not There can be no usufruct over an easement
become res nullius unless they are because easement cannot exist by itself.
abandoned. Usufruct must have an existence of its own
separate from the property.

Note: Some abandoned domestic animals


like cats, horses, goats may become wild or Lease Usufruct
feral.
Generally covers only Covers all fruits and
a particular or specific uses as a rule
use

Real right only if, as in Always a real right


the case of a lease
over a real property,
the lease is
registered, or is for
more than one year.
Otherwise, it is only a
personal right

Lessor may or may Can be created only

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Lease Usufruct (1) It is a real right;


(2) Of temporary duration;
not be the owner (as by the owner or by a
when there is duly authorized agent (3) The purpose is to derive all advantages
sublease or when the acting in behalf of the from the thing due to normal
lessor is only a owner exploitation.
usufructuary)

May be created, as a May be created by B.1. NATURAL CHARACTERISTICS


rule, only by contract law, contract, last
(1) Includes only the right to use them (jus
and by way of will, or prescription
utendi), the right to own the fruits (jus
exception by law
fruendi) and the right to possess (jus
The owner or owner is Owner is passive possidendi).
more or less active (2) Usufructuary must preserve the form or
substance of the thing.
Lessee generally has As the usufructuary
no duty for repairs has the duty to make (3) Preservation is a natural requisite, not
ordinary repairs essential because the title constituting it
or the law may provide otherwise.
Lessee generally pays Usufructuary pays for (4) Usufruct is extinguished by the death of
no taxes the annual charges the usufructuary.
and taxes on the fruits
(5) Natural because a contrary intention may
Lessee cannot Usufructuary may prevail.
constitute a usufruct lease the property to
on the property another
leased Reasons for preserving form and substance
(a) To prevent extraordinary exploitation;

A. OBJECTS OF USUFRUCT (b) To prevent abuse, which is frequent;


(c) To prevent impairment.

A.1. INDEPENDENT RIGHTS Exception: In an abnormal usufruct,


alteration is allowed.
A servitude which is dependent on the
tenement to which it attaches cannot be the
object of usufruct. C. CLASSIFICATION
C.1. BY ORIGIN
A.2. THINGS i. Voluntary: created by the will of private
Non-consumable things persons
Consumable things, but only as to their value (1) By act inter vivos– such as contracts and
if appraised, or on an equal quantity and donations:
quality if they were not appraised. (2) By donation of the usufruct;
(3) By retention of the usufruct by donor;
Unproductive things (4) Where a usufruct is constituted inter vivos
e.g. sterile or absolutely unproductive land, and for valuable consideration, the
or things for mere pleasure, such as contract is unenforceable unless in
promenades, statues or paintings, even if writing;
they do not produce any utility. (5) By act mortis causa – such as testament.
B. CHARACTERISTICS ii. Legal: as provided by law.
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Usufruct of parents over the property of Must not be strictly personal or


unemancipated children. (now limited to the intransmissible.
collective daily needs of the family) [FC 26]
Usufruct over a real right is by itself a real
right.
iii. Mixed: created both by law and the acts of Right to receive present or future support
persons, i.e. by acquisitive prescription. cannot be the object of the usufruct.
The rights and duties of the usufructuary
provided by law may be modified or
ii. Things
eliminated by the parties.
Normal: involves non-consummable things
The title constituting the usufruct may validly
where the form and substance are preserved.
authorize the usufructuary to alienate the
thing itself held in usufruct. Abnormal or irregular: when the usufruct
includes things which cannot be used in a
If the usufructuary is authorized to alienate
manner appropriate to its nature without
the thing in case of necessity, it is the
being consumed.
usufructuary who determines the question of
necessity. The usufructuary has right to make use of
them under the obligation of paying their
appraised value at the termination of the
C.2. BY PERSON ENJOYING THE RIGHT OF usufruct, if they were appraised when
USUFRUCT delivered.
i. Simple: only one usufructuary enjoys the If they were not appraised, he has the right to
property. return the same quantity and quality, or pay
their current price at the time the usufruct
ii. Multiple: several usufructuaries enjoy the
ceases. [NCC 574]
property as co-usufructuaries.
In reality, the usufruct is not upon the
iii. Simultaneous: at the same time.
consumable things themselves, but upon the
iv. Successive: one after the other. sum representing their value or upon a
quantity of things of the same kind and
quality.
Limitations On Successive Usufruct
The usufructuary, in effect, becomes the
(1) If usufruct is by donation, ALL donees owner of the things in usufruct, while the
must be alive. [NCC 756] grantor becomes a mere creditor entitled to
(2) Fiduciary or first heir and the second heir the return of the value or of the things of the
must be alive at the time of the death of same quantity and quality (as if converted
the testator. [NCC 863] into a simple loan).

(3) If by testamentary succession, there must Example: Usufruct over sterile animals [NCC
be only 2 successive usufructuaries, and 591, par. 4].
both must be alive or at least already
conceived at the time of the testator’s
iv. Quasi-usufruct [NCC 574; Bar 1998]
death and later born alive. [NCC 869]
Includes things which cannot be used without
being consumed.
C.3. BY OBJECT OF USUFRUCT
Money may be the object of usufruct. [Alunan
Usufruct may be constituted on the whole or v. Veloso, 52 Phil 545]
a part of the fruits of the thing or on a right,
provided it is not strictly personal or
intransmissible. [NCC 564]
i. Rights C.4. BY THE EXTENT OF THE USUFRUCT

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i. At to the Fruits (2) Right to enjoy the property to the same


extent as the owner, but only with respect
Total: all consumed by the usufruct.
to its use and the receipt of its fruits.
Partial: only on certain aspects of the
(3) Usufructuary cannot extract products
usufruct’s fruits.
which do not constitute fruits because he
is bound to preserve the form and
substance of the thing.
ii. As to the Object
(4) Usufructuary rights may be transferred,
Singular: only on particular property of the
assigned or otherwise disposed of by the
owner.
usufructuary.
Universal: pertains to the usufruct over
(5) Not exempt from execution and can be
universal property, i.e. over an entire
sold at public auction.
patrimony, a while inheritance of a
compulsory heir, a dowry;
A universal usufructuary must pay the debts HIDDEN TREASURE
of the naked owner, if stipulated. Article 758
As to hidden treasure, usufructuary is
and 759 on donations apply.
considered a stranger without a right to a
share, unless he is also the finder of the
treasure
NCC 758: When the donation imposes upon
the donee the obligation to pay the debts of With respect to hidden treasure which may be
the donor, if the clause does not contain any found on the land or tenement, he shall be
declaration to the contrary, the former is considered a stranger.
understood to be liable to pay only the debts Hidden treasure belongs to the owner of the
which appear to have been previously land, building, or other property on which it is
contracted. In no case shall the donee be found.
responsible for the debts exceeding the value
of the property donated, unless a contrary Nevertheless, when the discovery is made on
intention clearly appears. the property of another, or of the State or any
of its subdivisions, and by chance, one-half
thereof shall be allowed to the finder.
NCC 759: There being no stipulation
regarding the payment of debts, the donee i. Right to fruits pending at the beginning of
shall be responsible therefor only when the usufruct
donation has been made in fraud of creditors.
Fruits pending at the Fruits pending at the
beginning of the termination of the
The donation is always presumed to be in usufruct usufruct
fraud of creditors, when at the time thereof
the donor did not reserve sufficient property Belong to the Belong to the naked
to pay his debts prior to the donation. usufructuary owner

Without need to The owner shall


reimburse the reimburse to the
expenses to the usufructuary ordinary
D. RIGHTS AND OBLIGATIONS OF owners cultivation expenses
USUFRUCTUARY from the proceeds of
the fruits (not to
exceed the value of
D.1. RIGHTS AS TO THE THING AND ITS the fruits)
FRUITS
Without prejudice to Rights of innocent 3rd
(1) Right to enjoy the property the right of 3rd parties should not be
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Fruits pending at the Fruits pending at the Right to enjoy any increase through
beginning of the termination of the accessions and servitudes, including products
usufruct usufruct of hunting and fishing.

persons e.g. if the prejudiced.


fruits arose by iii. Right to lease the thing
building, planting, General rule: The usufructuary may lease the
sowing by a possessor thing to another but this shall terminate upon
in good faith, the the expiration of the usufruct, saving leases
pending crop of rural lands, which shall be considered as
expenses of subsisting during the agricultural year, i.e.
cultivation and of the the period from planting to harvesting of one
net harvest and crop.
charges shall be
prorated between Exceptions
said possessor and (1) Legal usufructs cannot be leased.
the usufructuary in
proportion to the time (2) Caucion juratoria (lease would show that
of possession (NCC the usufructuary does not need the
545) property badly).
N.B. In the case of (3) Usufruct is purely personal, e.g. title
civil fruits, no need to creating usufruct provides that
prorate, as civil fruits usufructuary shall personally use and
accrue daily [NCC enjoy the property given in usufruct.
544]

Effect of the transfer of right:


ii. Right to civil fruits The transfer or lease of the usufruct does not
Civil fruits – deemed to accrue daily, and terminate the relation of the usufructuary
belong to the usufructuary in proportion to with the owner.
the time the usufruct may last. Death of the transferee does not terminate
Whenever a usufruct is constituted on the the usufruct but it terminates upon the death
right to receive a rent or periodical pension, of the usufructuary who made the transfer.
whether in money or in fruits, or in the
interest on bonds or securities payable to
bearer, each payment due shall be Rules as to Lease:
considered as the proceeds or fruits of such (1) The property in usufruct may be leased
right. even without the consent of the owner.
Whenever it consists in the enjoyment of (2) The lease should be for the same period
benefits accruing from a participation in any as the usufruct.
industrial or commercial enterprise, the date
of the distribution of which is not fixed, such Exception: leases of rural lands continues
benefits shall have the same character. for the remainder of the agricultural year.

If the usufruct is constituted only on the land (3) A lease executed by the usufructuary
and not the building built thereon then the before the termination of the usufruct
right to the fruits by the usufructuary would and subsisting after the termination of
not extend to the building. The building is the usufruct must be respected, but the
considered as a separate and distinct rents for the remaining period will belong
prinicipal which produces its own fruits. to the owner.
[Gabuya v Cui (1971)] (4) If the usufructuary has leased the lands
or tenements given in usufruct, and the
usufruct should expire before the
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termination of the lease, he or his heirs which the things in usufruct may suffer
and successors shall receive only the through the fault or negligence of the person
proportionate share of the rent that must who substitutes him. [NCC, 590]
be paid by the lessee. [NCC, 568]
A usufructuary can sell or alienate his right of
(5) It is the usufructuary and not the naked usufruct, apart from the thing held in
owner who has the right to choose the usufruct, but the right of usufruct remains a
tenant. temporary real right.
(6) As corollary to the right of the
usufructuary to all the rent, to choose the
iv. Improvements by the Usufructuary of the
tenant, and to fix the amount of the rent,
Land [NCC 579]
she necessarily has the right to choose
herself as the tenant thereof; and, as long He may improve the thing without altering its
as the obligations she had assumed form and substance;
towards the owner are fulfilled. [Fabie v.
He may remove improvements made by him if
Gutierrez David (1945)]
it is possible to do so without damage to
(7) A lease executed by the owner before the property
creation of the usufruct is not
extinguished by such usufruct.
v. Usufructuary May Set Off Improvements
Limitations on the Right to Lease the Property
[NCC 580]
General rule: Usufructuary cannot do the
(1) The usufructuary may set off the
following:
improvements he may have made on the
(1) Cannot alienate or dispose of the objects property against any damage to the
included in the usufruct; same.
(2) Cannot renounce a servitude; Right to improve the thing, but
improvement inures to the benefit of the
(3) Cannot mortgage or pledge a thing.
naked owner [NCC 579]
Exception:
Usufructuary is not entitled to
(1) When the right of usufruct is converted reimbursement.
into the right of ownership;
(2) Whenever the usufructuary can remove
(2) When the things are consumable (NCC the improvements without injury to the
574); property in usufruct, he has the right to
do so, and the owner cannot prevent him
(3) When the things by their nature are
from doing so even upon payment of their
intended for sale, such as the
value.
merchandise in a commercial
establishment; and This right does not involve an obligation –
if the usufructuary does not wish to
(4) When the things, whatever their nature,
exercise it, he cannot be compelled by the
are delivered under appraisal as
owner to remove the improvements.
equivalent to their sale.
This right to remove improvements can
Notes:
be enforced only against the owner, not
Future crops may be sold but such sale would against a purchaser in good faith to
be void if usufruct terminates prior to harvest whom a clean title has been issued.
of future fruits. The buyer’s remedy is to
(3) Usufructuary may set off the
recover from the usufructuary.
improvements against any damage to the
The usufructuary-lessor is liable for the act of property.
the substitute.
The improvements should have increased
A usufructuary who alienates or leases his the value of the property, and that the
right of usufruct shall answer for any damage
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damages are imputable to the description of the condition of the


usufructuary. immovables; and
Increase in value and the amount of (2) To give security, binding himself to fulfill
damages are set off against each other. the obligations imposed upon him in
accordance with this Chapter.
If the damages exceed the increase in
value, the difference should be paid by Note: These requirements are not conditions
the usufructuary as indemnity. precedent to the commencement of the right
of the usufruct but merely to the entry upon
If the increase in value exceeds the
the possession and enjoyment of the
damages, and the improvements are of
property.
such nature that they can be removed
without injury to the thing in usufruct, the
settlement of the difference must be
i. To Make An Inventory
agreed upon by the parties.
Requisites
(4) If the improvements cannot be removed
without injury, the excess in value accrues (1) Immovables must be described; and
to the owner.
(2) Movables must be appraised because
(5) Registration of improvements – to they are easily lost or deteriorated.
protect usufructuary against 3rd persons
Concurrence of the owner in the making of
the inventory.
D.2. RIGHTS AS TO THE LEGAL RIGHT OF Expenses for the making of the inventory are
USUFRUCT ITSELF borne by the usufructuary.
The inventory may be in a private document,
except when immovables are involved. (a
i. Right to mortgage right of usufruct
public instrument is prescribed to affect 3rd
The usufructuary may alienate his right of persons).
usufruct, even by a gratuitous title; but all the
Failure to make an inventory does not affect
contracts he may enter into as such
the rights of the usufructuary to enjoy the
usufructuary shall terminate upon the
property and its fruits.
expiration of the usufruct. [NCC. 572]
A prima facie presumption arises that the
ii. Does not include parental usufruct because
property was received by the usufructuary in
of personal and family considerations.
good condition.
Is there still a personal usufruct? Answer: No.
General rule: Even if he is already in
NCC 321 was amended by FC 226, where
possession, he may still be required to make
there is no more mention of a parental
an inventory.
usufruct. [Prof. Labitag]
Exception to the requirement of inventory:
Right to alienate the usufruct except in purely
personal usufructs or when title constituting When no one will be injured, the usufructuary
it prohibits the same. may be excused from this obligation.
Parental usufruct is inalienable.
ii. To give a bond for the faithful performance
of duties as usufructuary
D.3. OBLIGATIONS AT THE BEGINNING OF
THE USUFRUCT OR BEFORE EXERCISING Any kind of sufficient security is allowed, e.g.
THE USUFRUCT cash, personal bond, mortgage.
(1) To make, after notice to the owner or his No bond is required in the following:
legitimate representative, an inventory of
(1) No prejudice would result; [Art. 585]
all the property, which shall contain an
appraisal of the movables and a (2) Usufruct is reserved by a donor; [Art. 584]
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(3) Gratitude on the donee’s part demands The owner may, until the usufructuary gives
that the donor be excused from filing the security, retain in his possession the property
bond. in usufruct as administrator, subject to the
obligation to deliver to the usufructuary the
(4) Title constituting usufruct excused
net proceeds, after deducting the sums,
usufructuary.
which may be agreed upon or judicially
(5) A usufructuary may take possession allowed him for such administration.
under a caucion juratoria (bond by oath)
[Art. 587]
D.4. OBLIGATIONS DURING THE
Note:
USUFRUCT
It is only by way of exception that a caucion
(1) To take care of the thing like a good
juratoria is allowed, and only under the
father of a family;
special circumstances:
(2) To undertake ordinary repairs;
(1) Proper court petition;
(3) To notify owner of need to undertake
(2) Usufruct is over a house, furniture or tools
extraordinary repairs;
of a trade and the necessity for delivery of
furniture, implements or house included (4) To pay for annual charges and taxes on
in the usufruct; the fruits;
(3) Approval of the court; and (5) To notify owner of any act detrimental to
ownership;
(4) Sworn promise.
(6) To shoulder the costs of litigation
A usufructuary under this can neither alienate
regarding the usufruct; and
his right nor lease the property, for that
would mean that he does not need the (7) To answer for fault or negligence of
dwelling or the implements and furniture. alienee, lessee or agent of usufructuary.
i. To take care of the thing like a good father of
a family
Effect of filing a bond
When damages are caused to the property by
Retroactivity: upon giving the security, the
the fault or negligence of the usufructuary,
usufructuary will be entitled to all the
the naked owner need not wait for the
benefits accruing since the time when he
termination of the usufruct before bringing
should have begun to receive them.
the action to recover proper indemnity.
The bad use of a thing, which causes
Effect of failure to give bond: [NCC 586] considerable injury, entitles the naked owner
to demand the delivery and administration of
(1) The owner may demand that the
the thing.
immovable properties be placed under
administration; The exercise of this remedy does not
extinguish the usufruct.
(2) That the movable properties be sold and
the proceeds of the sale be the property He may set off the value of useful
held in usufruct – legal interest of 6% improvements against his liability for
shall be the fruits; damages (NCC 580).
(3) That the public bonds, instruments of ii. To undertake ordinary repairs
credit payable to order or to bearer be
The usufructuary is obliged to make the
converted into registered certificates or
ordinary repairs needed by the thing given in
deposited in a bank or public institution;
usufruct. [NCC 592]
and
Ordinary repairs:
(4) That the capital or sums in cash and the
proceeds of the sale of the movable
property be invested in safe securities.
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(1) Such as are required by the wear and tear (2) The naked owner failed to make them;
due to the natural use of the thing and and
are indispensable for its preservation;
(3) The repair is needed for preservation.
(2) Deteriorations or defects arise from the
The usufructuary who has made the
natural use of the thing;
extraordinary repairs necessary for
(3) Repairs are necessary for the preservation preservation is entitled to recover from the
of the thing. owner the increase in value, which the
tenement acquired by reason of such works.
The usufructuary is bound to pay only for the
repairs made during the existence of the Usufructuary may retain, i.e. has a right of
usufruct. retention, until he is paid.
If the defects existed already at the time the
usufruct began, the obligation to defray the
iv. To pay for annual charges and taxes on the
ordinary repairs falls upon the owner.
fruits
If the defects are caused by the ordinary use
It is well settled that a real tax, being a
of the thing, the usufructuary may exempt
burden upon the capital, should be paid by
himself from making the repairs by returning
the owner of the land and not by a
to the owner the fruits received during the
usufructuary. There is no merit in the
time that the defects took place.
contention of distinguishing public lands into
Exception: When the ordinary repairs are due alienable and indisposable. All properties
to defects caused by the fault of the owned by the government, without any
usufructuary distinction, are exempt from taxation. [Board
of Assessment Appeals of Zamboanga del Sur
If the usufructuary fails to make the repairs
v. Samar Mining Company, Inc.(1971)]
even after demand, the owner may make
them at the expense of the usufructuary v. To notify owner of any act detrimental to
ownership [NCC 601]
iii. To notify owner of need to undertake
extraordinary repairs
Extraordinary repairs vi. To shoulder the costs of litigation regarding
the usufruct [NCC 602]
(1) Those caused by exceptional
circumstances, whether or not they are
necessary for the preservation of the
vii. To answer for fault or negligence of the
thing; or
alienee, lessee or agent of the usufructuary
(2) Those caused by the natural use of the [NCC 590]
thing, but are not necessary for its
The usufructuary is made liable for the acts of
preservation.
the substitute. While the substitute answers
General Rule: Naked owner must make the to the usufructuary, the usufructuary answers
extraordinary repairs. to the naked owner.
The usufructuary is obliged to pay legal
interest on the amount while usufruct lasts.
D.5. AT THE TIME OF THE TERMINATION
Exception: If the extraordinary repairs are OF THE USUFRUCT
indispensable, and the naked owner fails to
To deliver the thing in usufruct to the owner
undertake them, the usufructuary may make
in the condition in which he has received it,
such repairs.
after undertaking ordinary repairs.
Requisites:
Exception: Abnormal usufruct: A thing of the
(1) There must be due notification to the same kind, quantity and quality is returned; if
naked owner of the urgency – if it is not with appraised value, must return value
urgent, there is no obligation to give appraised.
notice;
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contagious disease or any other uncommon


event, provided the usufructuary has no
E. SPECIAL CASES OF USUFRUCT fault); or
If all perish, the usufructuary should deliver
E.1. USUFRUCT OVER A PENSION OR A the remains to the owner.
PERIODICAL INCOME [NCC 570] There is a partial loss if a part of the stock
Each payment due shall be considered as the perishes, the usufruct subsists on the
proceeds or fruits of such right. remainder.
The usufruct shall be distributed as civil
fruits. E.4. USUFRUCT OVER FRUIT BEARING
TREES AND SHRUBS AND WOODLANDS
[NCC 575-577]
E.2. USUFRUCT OF PROPERTY OWNED IN
COMMON [NCC 582] The usufructuary can:
The usufructuary takes the place of the co- (1) Use dead trunks and those cut off or
owner as to: uprooted by accident with obligation to
replace them with new plamts;
(1) Management;
(2) Make usual cuttings that owner used to
(2) Fruits; and
do, and in default thereof, according to
(3) Interest. the custom of the place with regard to the
manner, amount and season; and
(3) Cut the trees that are not useful.
Effect of partition:
(4) If a result of a calamity, most trees have
(1) The right of the usufructuary is not
disappeared, usufructuary may leave
affected by the division of the property in
dead or uprooted trunks to owner and
usufruct among the co-owners.
demand removal thereof and clear the
(2) After partition, the usufruct is transferred land.
to the part allotted to the co-owner.
(5) In tree nurseries, to make necessary
thinnings, so the rest may grow properly.
E.3. USUFRUCT CONSTITUTED ON A
FLOCK OR HERD OF LIVESTOCK [NCC 591]
E.5. USUFRUCT ON A RIGHT OF ACTION
On sterile stock: same rules on fungible TO RECOVER PROPERTY [NCC 578]
property govern. (i.e. it is an abnormal
The action may be instituted in the
usufruct – may dispose of or consume the
usufructuary’s name. As the owner of the
animal [NCC 574]
usufruct, he is properly deemed a proper
party-in-interest.
On fruitful stock: If the purpose is the recovery of the real or
personal property or a real right, he is still
(1) Must replace ordinary losses of the stock
required under Art. 578 to obtain the naked
with the young if:
owner’s authority.
(a) Some animals die from natural
If action brought by usufructuary succeeds
causes; or
and he recovers property, usufruct is limited
(b) Some animals are lost due to rapacity to the fruits, ownership to the naked owner.
of beasts of prey.
If the purpose is to object to or prevent
(2) No obligation to replace if: disturbances over the property, no special
There is a total loss of animals because of authority from the naked owner is needed. If
it relates to ownership of property, he must
some unexpected or unnatural loss (like
notify the naked owner.
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It is sufficient if the usufructuary returns the


things in the condition in which they may
E.6. USUFRUCT ON MORTGAGED
have been found at the time of the expiration
PROPERTY [NCC 600]
of the usufruct after having made ordinary
Usufructuary not obligated to pay the repairs.
principal obligation foreclosed, owner is
Exception: when such defects were caused
liable for value of right of usufruct.
through the usufructuary’s fraud and
When the usufruct is universal and some negligence.
objects are mortgaged, apply Art. 598.
If the usufructuary does not return the things
If the usufructuary mortgaged the upon the expiration of the usufruct, he should
usufructuary right, he is liable to pay his own pay an indemnity equivalent to the value of
debt. He cannot mortgage property held in the things at the time of such expiration.
usufruct.

E.9. USUFRUCT OVER CONSUMABLE


E.7. USUFRUCT OVER AN ENTIRE PROPERTY [NCC 574]
PATRIMONY [NCC 598]
The usufructuary shall have the right to make
Applies when: use of them under the obligation of paying
their appraised value at the termination of
(1) The usufruct is a universal usufruct; and
the usufruct, if they were appraised when
(2) If at its constitution the owner had debts delivered.
or is obliged to make periodical payments
If not appraised, he shall have the right to
(whether or not there be known capital)
return at the same quantity and quality, or
General rule: The usufructuary is not liable for pay their current price at the time the
the owner’s debts. NCC 758 and 759 applies. usufruct ceases.
Exceptions: An abnormal usufruct, but the usufruct shall
(1) When it is so stipulated; the usufructuary be a normal usufruct if consumable is merely
shall be liable for the debts previously for exhibition.
contracted if no contrary declaration, but
only up to the value of the usufruct,
unless the contrary is indicated in the F. RIGHTS OF THE OWNER
title;
(2) If there is no specification, he is liable F.1. AT THE BEGINNING OF THE
only for debts incurred by the owner USUFRUCT
before the usufruct was constituted; or
See obligations of usufructuary at the
(3) When the usufruct is constituted in fraud beginning of the usufruct)
of creditors.
In no case shall the usufructuary be
responsible for debts exceeding the benefits F.2. DURING THE USUFRUCT
under the usufruct. (except when the contrary (1) Retains title to the thing or property.
intention appears)
(2) He may alienate the property: he may not
alter the form or substance of the thing;
E.8. USUFRUCT OVER DETERIORABLE nor do anything prejudicial to the
PROPERTY usufructuary.

The usufructuary shall have the right to make (3) He may construct buildings, make
use thereof in accordance with the purpose improvements and plantings, provided:
for which they are intended. (4) The value of the usufruct is not impaired;
and

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(5) The rights of the usufructuary are not If the period is fixed by reference to the life of
prejudiced. another or there is a resolutory condition,
death does not affect the usufruct and the
(6) He can constitute a voluntary easement
right is transmitted to the heirs of the
over land/building held in usufruct, but if
usufructuary until the expiration of the term
it affects the usufructuary right, the
or the fulfillment of the condition.
usufruct mas give his consent. If
easement is perpetual, consent of both
must be obtained (NCC 689-690)
When a contrary intention clearly appears:
If the usufructuary dies before the happening
G. EXTINGUISHMENT/ TERMINATION of a resolutory condition, the usufruct is
[NCC 603] extinguished.
(1) By the death of the usufructuary, unless a Usufruct is personal and it cannot be
contrary intention clearly appears; extended beyond the lifetime of the
usufructuary. [Sanchez Roman and SC]
(2) By the expiration of the period for which it
was constituted, or by the fulfillment of If period is fixed with reference to the age of a
any resolutory condition provided in the third person usufruct continues until such
title creating the usufruct; person attains that age, even if he dies
before reaching such age, unless expressly
(3) By merger of the usufruct and ownership granted in consideration of his existence in
in the same person; life [NCC 606]
(4) By renunciation of the usufructuary;
(5) By the total loss of the thing in usufruct; G.2. EXPIRATION OF PERIOD OR
(6) By the termination of the right of the FULFILLMENT OF RESOLUTORY
person constituting the usufruct; or CONDITION IMPOSED ON USUFRUCT BY
PERSON CONSTITUTING USUFRUCT
(7) By prescription.
In favor of juridical persons [NCC. 605]
Usufruct cannot be constituted in favor of a
G.1. DEATH OF USUFRUCTUARY town, corporation, or association for more
Exceptions: than fifty years.
(1) In multiple usufructs: it ends at the death If before the expiration of such period the
of the last survivor [NCC 611] town is abandoned, or the corporation or
association is dissolved, the usufruct shall be
(2) If a simultaneous usufruct: all the extinguished.
usufructuaries must be alive (or at least
conceived and born alive later) at the Usufruct granted for the time that may elapse
time of constitution. before a third person attains a certain age
[NCC 606]
(3) If successive usufruct:
It shall subsist for the number of years
If by virtue of donation – all the donees- specified even if the third person should die
usufructuaries must be living at the time of before the period expires unless such usufruct
the donation; has been expressly granted only in
If by will – there should only be 2 successive consideration of the existence of such person.
usufructuaries and both must have been alive
at the time of testator’s death.
G.3. MERGER OF RIGHTS OF USUFRUCT
AND NAKED OWNERSHIP IN ONE PERSON
Note: Same rule as in fideicommissary Illustration: H was the usufructuary of land
substitution [NCC 863-867, par. 1] owned by X. X dies, leaving in his will, the
naked ownership of the land to H. the
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usufruct is extinguished because now H is Situation Effect


both the naked owner and the usufructuary.
When insurance If owner rebuilds,
premium paid by usufruct subsists on
G.4. RENUNCIATION OF USUFRUCT owner and new building.
Waiver: A voluntary surrender of the rights of usufructuary (par. 1)
If owner does not
the usufructuary, made by him with the intent rebuild, interest upon
to surrender them. insurance proceeds
Limitations: paid to usufructuary.

(1) Must be express: tacit renunciation is not When the insurance Owner entitled to
sufficient; taken by the naked insurance money (no
owner only because interest paid to
(2) Does not need the consent of naked
usufructuary refuses usufructuary).
owner; and
to contribute to the
If he does not rebuild,
(3) If made in fraud of creditors, they may premium (par. 2)
usufruct continues
rescind the waiver through an action
over remaining land
under Article 1381 (accion pauliana).
and/or owner may
pay interest on value
of both materials and
G.5. EXTINCTION OR LOSS OF PROPERTY
land [Art. 607].
[NCC 608]
If owner rebuilds,
Situation Effect usufruct does not
continue on new
Art. 607
building, but owner
If destroyed property is not insured must pay interest on
value of land and old
If the building forms Usufruct continues materials.
part of an immovable over the land and
under usufruct materials (plus When insurance taken Insurance proceeds
interests), if owner by usufructuary only go to the
does not rebuild. depends on value of usufructuary.
usufructuary’s
If usufruct is on the Usufruct continues No obligation to
insurable interest
building only over the land and rebuild.
materials (plus Usufruct continues on
interests), if owner the land.
does not rebuild.
Owner has no share in
If owner rebuilds, insurance proceeds.
usufructuary must
allow owner to occupy
the land and to make G.6. TERMINATION OF THE RIGHT OF
use of materials; but PERSON CONSTITUTING THE USUFRUCT
the owner must pay
interest on the value Example: usufructs constituted by a vendee a
of both the land and retro terminate upon redemption.
the materials.

Art. 608 G.7. PRESCRIPTION


If destroyed property is insured before Adverse possession against the owner or the
termination of the usufruct usufructuary.

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It is not the non-use which extinguishes the An easement or servitude is an encumbrance


usufruct by prescription, but the use by a 3rd imposed upon an immovable by nature for
person. the benefit of another immovable belonging
to a different owner. [NCC. 613]
There can be no prescription as long as the
usufructuary receives the rents from the lease It is a real right which burdens a thing with a
of the property, or he enjoys the price of the prestation of determinate servitudes for the
sale of his right. exclusive enjoyment of one who is not an
owner of a tenement.
It is a real right constituted on another’s
H. CONDITIONS NOT AFFECTING property, corporeal and immovable, by virtue
USUFRUCT of which the owner has to abstain from doing
or allow somebody else to do something to
his property for the benefit of another.
H.1. EXPRORPIATION OF THING IN
USUFRUCT [NCC 609]
If naked owner alone was given the Dominant Estate – the immovable in favor of
indemnity, he has the option: which the easement is established.
(1) To replace with equivalent thing; or Servient Estate – the immovable which is
subject to the easement.
(2) To pay to the usufructuary legal interest
on the indemnity. This requires a security
to be given by the naked owner for the A. CHARACTERISTICS
payment of the interest.

A.1. ESSENTIAL FEATURES:


If both the naked owner and the usufructuary
were separately given indemnity, each owns i. It is a real right – it gives an action in rem or
the indemnity given to him, the usufruct real action against any possessor of the
being totally extinguished. servient estate
If usufructuary alone was given the This may only affect third persons when
indemnity, he must give it to the naked owner registered.
and compel the latter to return either the Owner of the dominant estate can file a real
interest or to replace the property. He may action for enforcement of right to an
even deduct the interest himself, if the naked easement.
owner fails to object.
Action in rem: an action against the thing
itself, instead of against the person.
H.2. BAD USE OF THING IN USUFRUCT
[NCC 610]
ii. It is a right enjoyed over another’s property
Bad use does not extinguish the usufruct but (jus in re aliena).
entitles the owner to demand delivery and
administration of the thing with the When the dominant and the servient estates
obligation to pay the net proceeds of fruits. have the same owner, the easement is
extinguished. Separate ownership is a
The bad use must cause considerable injury prerequisite to an easement.
not to the thing, but to the owner.
The acknowledgment of an easement is a
Usufructuary is liable for damages caused to admission that the property belongs to
property. another.
iii. It can only exist between neighboring
estates in case of real easements.
IX. Easement
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iv. It is a right constituted over an immovable Right to use another’s wall to support a
by nature (land and buildings), not over building.
movable properties or even immovable by
incorporation, by destination or by analogy.
[NCC. 613] vii. It is inherent or inseparable from estate to
which they actively or passively belong. [NCC
Immovable: used in its common and not in
617]
the legal sense, meaning only property
immovable by nature can have easements. Easements are merely accessory to the
tenements, and a “quality thereof.” They
They cannot be established on things beyond
cannot exist without tenements.
the commerce of man, (i.e. property of public
dominion). Easements exist even if they are not expressly
stated or annotated as an encumbrance on
the titles.
v. It limits the servient owner’s right of
ownership for the benefit of the dominant
estate. viii. It is intransmissible.
Right of limited use but no right to own and It cannot be alienated separately from the
possess the servient estate. tenement affected or benefited.
There exists a limitation on ownership: the Any alienation of the property covered carries
dominant owner is allowed to enjoy or use with it the servitudes affecting said property.
part of the servient estate, and owner of the But this affects only the portion of the
servient estate is restricted in his enjoyment tenement with the easement, meaning that
of his property. the portions unaffected can be alienated
without the servitude.
Being an abnormal limitation of ownership, it
cannot be presumed [DE LEON, Property,
478-479].
ix. It is indivisible. [NCC 618]
If the servient estate is divided between two
vi. It creates a relation between tenements. or more persons, the easement is not
modified, and each of them must bear it on
There is no transfer of ownership, but a
the part that corresponds to him.
relationship is created, depending on the type
of easement. If the dominant estate is divided between two
or more persons, each of them may use the
easement in its entirety, without changing
General Rule: It may consist in the owner of the place of its use, or making it more
the dominant estate demanding that the burdensome in any other way.
owner of the servient estate refrain from
doing something (servitus in non faciendo) or
that the latter permit that something be done x. It has permanence because once it
over the servient property (servitus in attaches, whether used or not, it continues
patendo), but not in the right to demand that and may be used anytime
the owner of the servient do something
Perpetual: exists as long as property exists,
(servitus in faciendo) except if such act is an
unless it is extinguished.
accessory obligation to a praedial servitude
(obligation propter rem)
Servient owner merely allows something to
be done to his estate. Easement Distinguished from Lease
Exception: Praedial servitudes
Easement Lease
Right to place beams in an adjoining wall to
support a structure. Real right, whether Real right only when
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Easement Lease servient estate, in reality, the primary


obligation is still negative.
registered or not it is registered, or Illustration: Under Article 680: the owner of a
when its subject tree whose branches extend over to a
matter is real neighboring property is required to cut off the
property and the extended branches, but the real essence of
duration exceeds one the easement is the obligation NOT TO
year ALLOW the branches of the tree to extend
May be constituted May be constituted beyond the land.
only on an on real or personal
immovable property property
iii. Servitus servitutes esse non potest: There
Limited to use of real Limited right to both can be no servitude over another servitude.
property of another the use and
but without the right possession of the
to possess property of another iv. A servitude must be exercised civiliter – in a
way least burdensome to the owner of the
servient estate.

Easement Distinguished from Usufruct v. A servitude must have a perpetual cause.


Easement Usufruct
C. CLASSIFICATION
May be constituted May be constituted on
only on an either movable or
immovable property immovable property
C.1. AS TO RECIPIENT OF BENEFITS
Not extinguished by Extinguished by the i. Real or Praedial: exists for the benefit of a
the death of death of usufructuary particular tenement. [NCC 613]
dominant owner
ii. Personal: exists for the benefit of persons
Non-possessory right Involves a right of without a dominant tenement e.g. usus
over an immovable possession in an habitatio (right to reside in a house) and
immovable operae servorum (right to the labor of slaves)
in Roman law. [NCC 614]
Limited to particular Includes all the uses
or specific use of the and the fruits of the
servient estate property C.2. AS TO ITS EXERCISE [NCC 615]
i. Continuous: Use is or may be incessant,
without the intervention of any act of man
ii. Discontinuous: Used at intervals, and
B. GENERAL RULES dependent upon the acts of man.
Note: This classification is important in
i. Nulli res sua servi: No one can have a determining prescription. Only continuous
servitude over one’s own property. and apparent easements can be created by
prescription.

ii. Servitus in faciendo consistere nequit: A


servitude cannot consist in doing. C.3. AS INDICATION OF ITS EXISTENCE
[NCC 615]
Although some easements seem to impose a
positive prestation upon the owner of the

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i. Apparent: Made known and continually iii. Mixed: created partly by will or agreement
kept in view by external signs that reveal the and partly by law.
use and enjoyment of the same.
ii. Non-apparent: No external indication of
Note:
their existence.
There is no such thing as a JUDICIAL
EASEMENT. The Courts cannot create
Note: Also important for purposes of easements, they can only declare the
prescription. existence of one, if it exists by virtue of the
law or will of the parties. [Castro v. Monsod,
February 2, 2011]
C.4. BY THE OBJECT OR OBLIGATION
IMPOSED [NCC 616]
i. Positive: Imposes upon the owner of the D. RELEVANCE OF CLASSIFICATIONS
servient estate the obligation of allowing
something to be done, or extraordinarily or
doing it himself. D.1. DETERMINES WHAT EASEMENTS CAN
BE ACQUIRED BY PRESCRIPTION
ii. Negative: Prohibits the owner of the
servient estate from doing something that he Continuous and apparent easements may be
could lawfully do if the easement did not acquired by prescription of 10 years [NCC.
exist. 620]

e.g. Negative Easement of Light and View: An Note:


opening is made on the wall of the dominant No need for good faith and just title.
estate, and the easement consists of
imposing upon the servient estate the
obligation to not build anything that would D.2. DETERMINES WHAT EASEMENTS CAN
obstruct the light. BE ACQUIRED BY TITLE
Continuous non-apparent easements, and
discontinuous ones, whether apparent or not,
Note: Prescription starts to run from service
of notarial prohibition. may be acquired only by virtue of a title.
[NCC. 622]

C.5. AS TO CAUSE OR ORIGIN [NCC 619]


The existence of an apparent sign of
i. Legal: created by law, whether for public easement between two estates, established
use or for the interest of private persons. or maintained by the owner of both, shall be
Once requisites are satisfied, the owner of the considered, as a title in order that the
dominant estate may ask the Court to declare easement may continue actively and
that an easement is created. passively.

Example: Natural drainage of waters, Unless, at the time the ownership of the two
Abutment of land, Aqueduct, etc. estates is divided, the contrary should be
provided in the title of conveyance of either of
them, or the apparent sign should be
ii. Voluntary: created by the will of the owners removed before the execution of the deed.
of the estate through contract, last will or This provision shall also apply in case of the
donation. division of a thing owned in common by two
or more persons. [NCC. 624]
These must be recorded in the Registry of
Property to prejudice third persons.
D.3. DETERMINES HOW TO COMPUTE THE
PRESCRIPTIVE PERIOD [NCC 621]

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In positive easements, from the day on which title of conveyance of either of them, or
the owner of the dominant estate, or the the sign aforesaid should be removed
person who may have made use of the before the execution of the deed. This
easement, commenced to exercise it upon the provision shall also apply in case of the
servient estate. division of a thing owned in common by
two or more persons. [NCC 624]
In negative easements, from the day on which
the owner of the dominant estate forbade, by (5) If the easement has been acquired but no
an instrument acknowledged before a notary proof of existence of easement available,
public, the owner of the servient estate from and the easement is one that cannot be
executing an act which would be lawful acquired by prescription, the defect may
without the easement. be cured by:
Deed of recognition by owner of servient
estate: By an affidavit or a formal deed
D.4. DETERMINES HOW EASEMENT IS
acknowledging the servitude; or
LOST BY PRESCRIPTION [NCC 631 (2)]
By final judgment: Owner of the dominant
By non-user for 10 years:
estate must file a case in Court to have the
With respect to discontinuous easements, easement declared by proving its existence
this period shall be computed from the day through other evidence.
on which they ceased to be used.
The existence of an apparent sign is
With respect to continuous easements, from considered as title.
the day on which an act contrary to the same
Illustration: The presence of 4 windows was
took place.
considered an apparent sign that created a
negative easement of light and view (altius
non tollendi) i.e. not to build a structure that
E. CREATION will cover the windows. [Amor v. Florentino
(1943)].
E.1. BY TITLE OR BY SOMETHING
EQUIVALENT TO A TITLE E.2. BY LAW (LEGAL EASEMENTS)
(1) Continuous and apparent easements may
Easements imposed by law have for their
be acquired by virtue of a title. [NCC 620]
object either public use or the interest of
(2) Continuous non-apparent easements, private persons. [NCC 634]
and discontinuous ones, whether
These easements may be modified by
apparent or not, are acquired only by
agreement of the interested parties,
virtue of a title. [NCC 622]
whenever the law does not prohibit it or no
(3) The absence of a document or proof injury is suffered by a third person. [NCC 636]
showing the origin of an easement which
cannot be acquired by prescription may
be cured by a deed of recognition by the E.3. BY WILL OF THE OWNERS
owner of the servient estate or by a final (VOLUNTARY EASEMENTS)
judgment. [NCC 623] Every owner of a tenement or a piece of land
(4) The existence of an apparent sign of may establish the easements that he may
easement between two estates, deem suitable and best provided he does not
established or maintained by the owner contravene the laws, public policy, or public
of both, shall be considered as a title in order. [NCC 688]
order that the easement may continue Note:
actively and passively.
If an owner constitutes an easement over his
Unless: at the time the ownership of own property and makes such easement
either of the two estates is transferred, available to the general public, said owner
the contrary should be provided in the may not arbitrarily discriminate against
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certain persons by not letting them use the but without altering it or rendering it
easement. [Negros Sugar Company v Hidalgo more burdensome. [NCC 627(1)]
(1936)]
(4) In a right of way, to ask for change in
width of easement sufficient for the needs
of the dominant estate. [NCC 651]
E.4. BY PRESCRIPTION
The needs of the dominant property
Continuous and apparent easements may be
ultimately determine the width of the
acquired by prescription of 10 years. [NCC
passage. And these needs may vary from
620]
time to time. [Encarnacion v. Court of
Requisites: Appeals]
(1) The easement must be continuous and (5) To renounce totally the easement, if he
apparent; desires to be exempt from contributing to
the expenses. [NCC 628]
(2) The easement must have been used for
10 years; and
(3) There is no need for good faith or just F.2. OBLIGATIONS OF DOMINANT ESTATE
title. OWNER
Note: (1) To use the easement for the benefit of
immovable and in the manner originally
Example of a continuous and apparent
established [NCC 626]
easement is of light and view, as opposed to
a right of way which is discontinuous but If established for a particular purpose, the
apparent, and thus cannot be acquired by easement cannot be used for a different
prescription. one. However, if established in a general
way, without specific purpose, the
Mere passage which was permitted and is
easement can be used for all the needs of
under an implied license cannot be the basis
the dominant estate.
of prescription. [Archbishop of Manila v Roxas
(1912)] (2) To notify the owner of the servient estate
before making repairs and to make
repairs in a manner least inconvenient to
F. RIGHTS AND OBLIGATIONS OF the servient estate [NCC 627(2)]
OWNERS OF DOMINANT AND (3) Not to alter the easement or render it
SERVIENT ESTATES more burdensome.
The owner of the dominant estate may
F.1. RIGHTS OF DOMINANT ESTATE make repairs at his expense, but he
OWNER cannot alter the easement or make it
more burdensome.[NCC 627]
(1) To use the easement and exercise all
rights necessary for it [NCC 625] Making the easement more burdensome
means widening the easement.
(2) The owner of the dominant estate is [Valderrama v. North Negros Sugar Co.
granted the right to use the principal (1925)]
easement, and all accessory servitudes.
(4) To contribute to expenses of works
Example: Easement of drawing water necessary for use and preservation of
carries with it the easement of right of servitude, if there are several dominant
way to the place where water is drawn. estates. [NCC 628]
Limitation: Only for the original The contribution is in proportion to the
immovable and the original purpose. benefits which each may derive from the
(3) To make, at his own expense, on the work.
servient estate, any works necessary for
the use and preservation of the servitude,
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Anyone who does not wish to contribute (3) To use the easement
may exempt himself by renouncing the
He may use the easement but must also
easement for the benefit of the others.
contribute proportionately to the
If the owner of the servient estate should expenses.
make use of the easement in any manner
whatsoever, he shall also be obliged to
contribute to the expenses in the F.4. OBLIGATIONS OF SERVIENT ESTATE
proportion stated, saving an agreement OWNER
to the contrary.
(1) Not to impair the use of the easement
(5) To do at his expense all necessary works [NCC 629(1)]
for the use and preservation of the
(2) To contribute proportionately to expenses
easement [NCC 627]
if he uses the easement [NCC 628(2)]
The necessity of the works determines
Unless there is an agreement to the
extent of such works.
contrary
(3) To pay for the expenses incurred for the
F.3. RIGHTS OF THE SERVIENT ESTATE change of location or form of the
OWNER easement
(1) To retain ownership and use of his
property
G. EXTINGUISHMENT OF EASEMENTS
The owner of the servient estate retains
(1) By merger in the same person of the
the ownership of the portion on which the
ownership of the dominant and servient
easement is established, and may use the
estates;
same in such a manner as not to affect
the exercise of the easement. [NCC 630] (2) By a non-user for ten years;
The servient owner must respect the use (3) When either or both of the estates fall
of the servitude, but retains ownership into such condition that the easement
and use of the same, in a manner not cannot be used;
affecting the easement.
(4) By the expiration of the term or the
(2) To change the place and manner of the fulfillment of the condition, if the
use of the easement [NCC 629] easement is temporary or conditional;
General rule: The owner of the servient (5) By the renunciation of the owner of the
estate cannot impair the use of the dominant estate; or
servitude.
(6) By the redemption agreed upon between
Exceptions: By reason of either: the owners of the dominant and servient
estates.
The place/manner originally assigned, the
use of such easement has become VERY
INCONVENIENT to the owner;
G.1. MERGER
The easement should prevent him from
Must be absolute, perfect and definite, and
making any important works, repairs or
not merely temporary.
improvements thereon;
Absolute: Ownership of the property must be
The change must be done at his expense;
absolute, thus not applicable to lease,
He offers another place or manner usufruct, etc.
equally convenient; and
Perfect: Merger must not be subject to a
The change is done in such a way that no condition.
injury is caused to the dominant owner or
to those who may have a right to use the
easement.
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If the merger is temporary, there is at most a Applies only to voluntary easements.


suspension of the easement, but no
extinguishment.
G.5. RENUNCIATION OF THE OWNER OF
THE DOMINANT ESTATE
G.2. BY A NON-USER FOR 10 YEARS
Must be specific, clear, express (distinguished
Owner of dominant estate does not exercise from non-user).
right over easement.
This is inaction, and not outright
G.6. OTHER CAUSES NOT MENTIONED IN
renunciation.
NCC 631
This is due to the voluntary abstention by the
(1) Annulment and rescission of the title
dominant owner, and not due to a fortuitous
constituting the voluntary easement;
event.
(2) Termination of the right of grantor of the
voluntary easement;
Computation of the period:
(3) Abandonment of the servient estate;
Discontinuous easements: counted from the
(4) Owner of the servient estate gives up
day they ceased to be used.
ownership of the easement (e.g. the strip
Continuous easements: counted from the day of land where the right of way is
an act adverse to the exercise of the constituted) in favor of the dominant
easement took place. estate.
E.g. in an easement of light and view, the The easement is extinguished because
erection of works obstructing the servitude ownership is transferred to the dominant
would commence the period of prescription. owner, who now owns both properties.
The use by a co-owner of the dominant estate (5) Eminent domain; or
bars prescription with respect to the others.
(6) The government’s power to expropriate
Note: property for public use, subject to the
payment of just compensation.
Non-user cannot extinguish servitudes not
yet exercised. Extinguishment by non-use (7) Special cause for extinction of legal rights
only applies to easements which being in use of way: if right of way no longer
are later abandoned. necessary. [NCC 655]
If the right of way granted to a surrounded
estate ceases to be necessary because its
G.3. BY IMPOSSIBILITY OF USE
owner has joined it to another abutting on a
Impossibility referred to must render the public road, the owner of the servient estate
entire easement unusable for all time. may demand that the easement be
extinguished, returning what he may have
Impossibility of using the easement due to
received by way of indemnity. The interest on
the condition of the tenements (e.g. flooding)
the indemnity shall be deemed to be in
only suspends the servitude until it can be
payment of rent for the use of the easement.
used again.
The same rule shall be applied in case a new
Exception: If the suspension exceeds 10 years,
road is opened giving access to the isolated
the easement is deemed extinguished by
estate.
non-user.
In both cases, the public highway must
substantially meet the needs of the dominant
G.4. EXPIRATION OF THE TERM OR estate in order that the easement may be
FULFILLMENT OF RESOLUTORY extinguished.
CONDITION
Right of way ceases to be necessary:
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(a) Owner of the dominant estate has joined By agreement of the interested parties
to another abutting on a public road. whenever the law does not prohibit it and no
injury is suffered by a 3rd person.
(b) A new road is opened giving access to the
isolated estate. By the provisions of Chapter 2, title VII, Book
II.
Requisite: the public highway must
substantially meet the needs of the dominant
estate in order that the easement may be
extinguished J. KINDS OF PRIVATE LEGAL
EASEMENTS
Owner of the servient estate may demand
that the easement be extinguished. (1) Natural drainage of water [NCC 637]

Owner of the servient estate must return (2) Riparian banks [NCC 638]
indemnity he received (value of the land) (3) Dam [NCC 639]
(4) Drawing water and watering animals
H. VOLUNTARY EASEMENTS [NCC 640-641]
Every owner of a tenement or piece of land (5) Aqueduct [NCC 642-646]
may establish thereon the easements which
(6) Stop lock or sluice gate [NCC 647]
he may deem suitable, and in the manner
and form which he may deem best. [NCC (7) Right of way [NCC 649-657]
688]
(8) Party wall [NCC 658-666]
The owner of a thing, the usufruct of which
(9) Light and view [NCC 667-681]
belongs to another, may impose, without the
consent of the usufructuary, any servitudes (10) Drainage of buildings [NCC 674]
which will not injure the right of usufruct.
(11) Intermediate distances [NCC 677-681]
[NCC 689]
(12) Nuisance [NCC 682-683]
Whenever the naked ownership belongs to
one person and the beneficial ownership to (13) Lateral and subjacent support [NCC
another, no perpetual voluntary easement 684-687]
may be established thereon without the
consent of both owners. [NCC 690]
J.1. THOSE ESTABLISHED FOR THE USE OF
Consent of all co-owners is required to
WATERS OR RELATING TO WATERS
impose an easement on an undivided
tenement. [NCC 691]
i. Natural Drainage
I. LEGAL EASEMENTS Lower estates are obliged to receive the
waters which naturally and without the
Easements imposed by law have for thir intervention of man descend from the higher
object either public use of the interest of estates (as well as the stones or earth which
private persons. [NCC 634] they carry with them).
The owner of the lower estate cannot do any
I.1. LAW GOVERNING LEGAL EASEMENTS works that will impede this easement.
i. For public easements The owner of the higher estate cannot do any
works that will increase the burden.
Special laws and regulations relating thereto.
(ex: PD 1067 and PD 705)
By the provisions of Chapter 2, Title VII, Book ii. Riparian Banks
II, NCC. The banks of rivers and streams are subject
ii. For private legal easements throughout their entire length and within a
zone of 3 meters for urban areas, 20 meters
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for agricultural areas and 40 meters for forest (1) To prove that he can dispose of the water
areas (PD 1067, Water Code as amended by and that it is sufficient for the use for
PD 1067) along their margins, to the which it is intended;
easement of public use in the general interest
(2) To show that the proposed right of way is
of navigation, floatage, fishing, recreation
the most convenient and the least
and salvage.
onerous to third persons; and
Estates adjoining the banks of navigable or
(3) To indemnify the owner of the servient
floatable rivers are subject to the easement of
estate in the manner determined by the
towpath for the exclusiveservice of river
laws and regulations
navigation and floatage.
Easement of aqueduct for private interest
If it be necessary to occupy lands of private
cannot be imposed on buildings, courtyards,
ownership, the proper indemnity shall first be
annexes, or outhouses, or on orchards or
paid.
gardens already existing.
This easement does not prevent the owner of
iii. Dam the servient estate from closing or fencing it,
or from building over the aqueduct in such
Whenever for the diversion of water it should
manner as not to cause the latter any
be necessary to build a dam, and the person
damage, or render necessary repairs and
who is to construct it is not the owner of the
cleanings impossible.
banks, or lands which must support it, he
may establish the easement of abutment of a This easement is considered as continuous
dam, after payment of the proper indemnity. and apparent, even though the flow of the
water may not be continuous, or its use
depends upon the needs of the dominant
iv. Drawing Water and Watering Animals estate, or upon a schedule of alternate days
or hours. Therefore, it can be created by
Compulsory easements for drawing water or
prescription. N.B.: In the appropriation of
for watering animals can be imposed only for
water, there is a need to apply for water
reasons of public use in favor of a town or
rights.
village, after payment of the proper
indemnity.
Easements for drawing water and for vi. Stop Lock or Sluice Gate
watering animals carry with them the
The construction of a stop lock or sluice gate
obligation of the owners of the servient
in the bed of the stream from which the water
estates to allow passage to persons and
is to be taken, for the purpose of improving
animals to the place where such easements
an estate.
are to be used, and the indemnity shall
include this service. Such person may demand that the owners of
the banks permit its construction, after
The width of the easement must not exceed
payment of damages, including those caused
10 meters.
by the new easement to such owners and to
the other irrigators.
v. Aqueduct
Any person who may wish to use upon his J.2. RIGHT OF WAY
own estate any water of which he can dispose
Who may demand
shall have the right to make it flow through
the intervening estates, with the obligation to (a) The owner of the dominant estate; or
indemnify their owners, as well as the owners
(b) Any person with the real right to cultivate
of the lower estates upon which the waters
or use the dominant estate e.g. a
may filter or descend.
usufructuary, a de jure possessor.
Person desiring to make use of this right is
obliged to:
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Note: a lessee cannot demand such The criterion of least prejudice to the servient
easement, because the lessor is the one estate must prevail over the criterion of
bound to maintain him in the enjoyment of shortest distance although this is a matter of
the property. judicial appreciation. While shortest distance
may ordinarily imply least prejudice, it is not
Requisites:
always so as when there are permanent
(1) The dominant estate is surrounded by structures obstructing the shortest distance;
other immovables owned by other while on the other hand, the longest distance
persons; may be free of obstructions and the easiest or
most convenient to pass through. [Quimen v.
(2) There must absolutely be no access i.e.
CA (1996)]
means of entrance or exit/egress to a
public highway; The fact that LGV had other means of egress
to the public highway cannot extinguish the
(3) Even if there is access, it is difficult or
said easement, being voluntary and not
dangerous to use, or grossly insufficient;
compulsory. The free ingress and egress
(4) Mere inconvenience in the use of an along Mangyan Road created by the
outlet does not render the easement a voluntary agreement between the parties is
necessity; thus legally demandable with the
(5) An adequate outlet is one that is corresponding duty on the servient estate not
sufficient for the purpose and needs of to obstruct the same. [La Vista Association v.
the dominant owner, and can be CA]
established at a reasonable expense; The width of the easement of right of way
(6) Does not necessarily have to be by land – shall be that which is sufficient for the needs
an outlet through a navigable river or a of the dominant estate, and may accordingly
lake or the sea if suitable to the needs of be changed from time to time. [NCC651]
the tenement is sufficient;
(7) The isolation of the immovable is NOT Obligations In Permanent And Temporary
due to the dominant owner’s own acts Easements Of Right Of Way
e.g. if he constructs building to others
obstructing the old way; and Permanent right of way Temporary right of way
(8) There is payment of indemnity; Indemnity
If right of way is permanent and
Consists of the Consists of the
continuous for the needs of the dominant
damages and the damages only.
estate = value of the land + amount of
value of the land.
damage caused to the servient estate;
If right of way is limited to necessary Necessary repairs
passage for cultivation of the estate and
for gathering crops, without permanent Dominant owner to Servient owner to
way = damage caused by encumbrance. spend on such. spend on such.

Share in taxes
Rules for establishing Right of Way:
The dominant owner Servient owner to
(1) Must be established at the point least shall reimburse a spend on such.
prejudicial to the servient estate. [NCC proportionate share of
650] taxes to the proprietor
(2) Insofar as consistent with the first rule, of the servient estate.
where the distance from the dominant
estate to a public highway is shortest.

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Rules on Indemnity for Estates Enclosed If it be indispensable for the construction,


Through a Sale, Exchange, Partition or repair, improvement, alteration or
Donation. beautification of a building, to carry
materials through the estate of another,
Sale, exchange or or to raise therein scaffolding or other
Donation
partition objects necessary for the work, the owner
of such estate shall be obliged to permit
Buyer, grantee or donee the act, after receiving payment of the
as dominant owners proper indemnity for the damage caused
him. [NCC656]
The buyer or grantee The donee shall pay
shall grant the right the donor indemnity. (3) Right of way for the passage of livestock
of way without known as animal path, animal trail,
indemnity. watering places, resting places, animal
folds. [NCC 657]
Seller, grantor or donor Easements of the right of way for the
as dominant owners passage of livestock known as animal
path, animal trail or any other, and those
The seller or grantor The donee shall grant for watering places, resting places and
shall pay indemnity. the right of way animal folds, shall be governed by the
without indemnity. ordinances and regulations relating
thereto, and, in the absence thereof, by
the usages and customs of the place.
Extinguishment as Legal Easement of Right of Without prejudice to rights legally
Way [NCC 655] acquired, the animal path shall not
(1) The owner has joined the dominant exceed in any case the width of 75
estate to another abutting the public meters, and the animal trail that of 37
road. meters and 50 centimeters.

(2) A new road is opened giving access to the Whenever it is necessary to establish a
isolated estate. compulsory easement of the right of way
or for a watering place for animals, the
provisions of this Section and those of
Notes on extinguishment Articles 640 and 641 shall be observed. In
this case the width shall not exceed 10
(1) Extinguishment is not automatic. The meters
owner of the servient estate must ask for
such extinguishment.
(2) Indemnity paid to the servient owner J.3. PARTY WALL
must be returned without interest. Refers to all those mass of rights and
Interest on account of indemnity is obligations emanating from the existence
deemed to be rent for use of easement. and common enjoyment of wall, fence,
enclosures or hedges, by the owners of
adjacent buildings and estates separated by
Special Rights of Way such objects.
(1) Right of way to carry materials for the
construction, repair, improvement,
alteration or beautification of a building Nature
through the estate of another. A common wall which separates two estates,
(2) Right of way to raise on another’s land built by common agreement at the dividing
scaffolding or other objects necessary for line such that it occupies a portion of both
the work. estates on equal parts.

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A party wall is a special form of co-ownership property owners may rebut these
(a kind of compulsory co-ownership). presumptions.
Each owner owns part of the wall but it
cannot be separated from the other portions
When Existence Of An Exterior Sign Is
belonging to the others. A party wall has a
Presumed [NCC 660]
special characteristic that makes it more of
an easement as it is called by law. (1) Whenever in the dividing wall of buildings
there is a window or opening.
An owner may use a party wall to the extent
of the ½ portion on his property. (2) Whenever one side is straight and plumb
on all its facement, and on the other, it
has similar conditions on the upper part,
Party Wall Co-ownership but the lower part slants or projects
outward.
Shares of the co- Before division of (3) Whenever the entire wall is built within
owners cannot be shares, a co-owner the boundaries of one of the estates.
physically segregated cannot point to any
but they can be definite portion of the (4) Whenever the dividing wall bears the
physically identified. property as belonging burden of the binding beams, floors and
to him. roof frame of one of the buildings, but not
those of the others.
There is no such None of the co-
(5) Whenever the dividing wall between
limitation. owners may use the
courtyards, gardens, and tenements is
community property
constructed in such a way that the coping
for his exclusive
sheds the water upon only one of the
benefit because he
estates.
would be invading the
rights of the others. (6) Whenever the dividing wall, being built of
masonry, has stepping stones, which at
Any owner may free In a co-ownership, certain intervals project from the surface
himself from partial renunciation is on one side only, but not on the other.
contributing to the allowed.
cost of repairs and (7) Whenever lands enclosed by fences or
construction of a live hedges adjoin others that are not
party wall by enclosed.
renouncing all his
rights thereto.
Note: The deposit of earth or debris on one
side alone is an exterior sign that the owner
of that side is the owner of the ditch or drain.
When Existence Of Easement Of Party Wall Is
The presumption is an addition to those
Presumed
enumerated in NCC 660.
(1) In dividing walls of adjoining buildings up
to the point of common elevation.
Right Of Owners Of A Party Wall
(2) In dividing walls of gardens or yards
situated in cities, or towns, or in rural
communities. i. Generally, part-owners may use the wall in
(3) In fences, walls and live hedges dividing proportion to their respective interests,
rural lands. provided that:
Note: (1) The right to use by the other party is not
interfered with;
A title or an exterior sign, or any other proof
showing that the entire wall in controversy (2) The consent by the other owner is needed
belongs exclusively to one of the adjoining if a party wants to open a window; and
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(3) The condition of the building is (e) Bear the increased expenses for
determined by experts. preservation

ii. To increase the height of the wall. J.4. EASEMENT OF LIGHT AND VIEW
(1) He does this at his expense, including the
thickening of the wall on his land.
Definition
(2) He shall indemnify the other party for any
Easement of light (jus luminum) is the right to
damages.
admit light from the neighboring estate by
virtue of the opening of a window or the
making of certain openings.
iii. To acquire a half-interest in any increase in
height or thickness of the wall, paying a Easement of view (jus prospectus) is the right
proportionate share in the cost of the work to make openings or windows, to enjoy the
and the value of the land covered. view through the estate of another and the
power to prevent all constructions or works
Note that the value of the land must be
which would obstruct such view or make the
appraised at the time of acquisition.
same difficult.
Necessarily includes the easement of light.
iv. To renounce his part ownership of a party
It is possible to have light only without a view.
wall if he desires to demolish his building
supported by the wall. Note:
He shall bear all the expenses of repairs and If an owner has an easement of view, he also
work necessary to prevent any damage which has an easement of light, but not vice versa.
the demolition may cause to the party wall.

Nature
Obligations Of Owners Of A Party Wall
(1) Positive: Opening a window through a
(1) To contribute proportionately to the party wall
repair and maintenance of the party wall
When the opening is made through the
unless he renounces his part-ownership.
wall of another
This includes the renunciation of the
When a part owner of a party wall opens
share in the wall and the land
a window therein, such act implies the
He cannot renounce his part if his exercise of the right of ownership by the
building is being supported by the party use of the entire thickness of the wall.
wall
The easement is created only after the
(2) If he raises the height of the wall, he lapse of the prescriptive period.
must:
(2) Negative: Formal prohibition upon the
(a) Bear the cost of maintenance of the owner of the adjoining land or tenement.
additions; Formal means that the prohibition has
been notarized [Cortes v Yu-Tibo (1903)]
(b) Bear the cost of construction, if the
wall cannot support the additional When a person opens a window on his
height; own building, he is exercising his right of
ownership on his property, which does
(c) Give additional land, if necessary to
not establish an easement.
thicken the wall;
Coexistent is the right of the owner of the
(d) Pay for damages, if necessary, even if
adjacent property to build or plant on his
temporary; and
own land, even if such structures or
planting cover the window.
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If the adjacent owner does not build (i) The outer line of the wall if the
structures to obstruct the window, such is openings do not project.
considered mere tolerance and NOT a
(ii) The outer line of the openings if
waiver of the right to build.
they project.
An easement is created only when the
(iii) The dividing line between the two
owner opens up a window and
properties in cases of oblique
subsequently prohibits or restrains the
views.
adjacent owner from doing anything that
may tend to cut off or interrupt the light
and the 10-year prescriptive period has
Effect If Distances Are Not Complied With
lapsed by a notarial prohibition.
(1) Easement is not acquired by prescription
(2) Windows are considered unlawful
Rules And Restrictions On Openings And
openings and may be ordered by the
Structures
Court to be closed.
i. Openings for light
(3) Even if the adjoining owner does not
When the opening is 2 meters or more object to the construction of such
away from another’s tenement, i.e. the structures at first, he cannot be held to be
boundary line: in estoppel, unless the 10-year period of
acquisitive prescription has passed.
(a) An owner may build any kind of
opening without restriction.
When the wall is contiguous (less than 2 Note:
meters) to another’s tenement:
In buildings separated by a public way or
(a) Openings are made at the height of alley, not less than 3 meters wide, the
the ceiling joists (horizontal beams) distances required (2 m, 60 cm) do not apply.
or immediately under the ceiling;
If an easement is acquired to have direct
(b) Size: 30 cm square; views, balconies or belvederes, the owner of
the servient estate must not build at less than
(c) With iron grating imbedded in the
3 meters from the boundary line of the two
wall;
tenements.
(d) With a wire screen.
The distances may be stipulated by the
parties, but should not be less than what is
prescribed by the law (2 meters and 60 cm).
ii. Openings for view
(a) The following structures cannot be
built without following the prescribed Notes on the Acquisition of the Easement
distances:
Period of acquisitive prescription depends
Window, apertures, balconies and upon whether the easement of light and view
other projections with a direct view is positive or negative, and only starts to run
upon or towards an adjoining land from the time the owner asserting the
must have a distance of 2 meters servitude has forbidden the owner of the
between the wall and the contiguous adjoining tenement from doing something he
property. could lawfully do.
(b) For structures with a side or oblique THUS, although the action to compel the
view (at an angle from the boundary closure might have prescribed because the
line), there should be a distance of 60 easement has been created by prescription,
centimeters. the owner of the adjoining estate may still
build on his own land a structure that might
Measured from:
obstruct the view for 10 years, thus
extinguishing it by non-user.
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(2) At least 50 centimeters if shrubs or small


trees are planted.
J.5. DRAINAGE OF BUILDINGS
In case of violation, a landowner shall have
The owner of a building is obliged to
the right to demand the uprooting of the
construct its roof or covering in such manner
plant even if it has grown spontaneously.
that the rain water shall fall on his own land
or on a street or public place, and NOT on the
land of his neighbor, even though the
Branches, Roots and Fruits
adjacent land may belong to two or more
persons, one of whom is the owner of the If the branches of any tree should extend over
roof. a neighboring estate, tenement, garden or
yard, the owner of the latter shall have the
Even if it should fall on his own land, the
right to demand that they be cut off.
owner shall be obliged to collect the water in
such a way as not to cause damage to the If it be the roots of a neighboring tree, which
adjacent land or tenement. should penetrate into the land of another, the
latter may cut them off himself within his
The true easement is Article 675 where the
property.
adjacent estate has the obligation of
receiving the rain water falling from a Fruits naturally falling upon adjacent land
neighboring roof and giving it an outlet on his belong to the owner of said land.
own lot so as not to cause damage to the
dominant estate.
J.7. LATERAL AND SUBJACENT SUPPORT
Easement of drainage if buildings [NCC 676]
– to give outlet to rain water collected The proprietor is prohibited from making
dangerous excavations upon his land as to
deprive any adjacent land or building of
J.6. INTERMEDIATE DISTANCES sufficient lateral or subjacent support.
Prohibiting the contraction and plantings Easement of lateral and subjacent support is
near fortified places or fortresses without deemed essential to the stability of buildings.
complying with special laws, ordinances and
Support is lateral when a vertical plane
regulations relative hereto. NCC 677, in
divides the supported and supporting lands.
effect, establishes an easement in favor of the
State. The general prohibition is dictated by Support is subjacent when the supported
the demands of national security. land is above the supporting land.
The following must comply with the
regulations or customs of the place:
(1) Construction of aqueduct, well, sewer,
etc. [NCC 678]
(2) Constructions, which by reason of their
nature or products are dangerous or
noxious.

Planting of trees [NCC 679]


No trees shall be planted near a tenement or
piece of land belonging to another except at
the distance authorized by the ordinances or
customs of the place.
In the absence of regulations:
(1) At least 2 meters from the dividing line of
the estates if tall trees are planted.
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X. Nuisance B. NUISANCE V. NEGLIGENCE


NCC 694. A nuisance is any act, omission, Nuisance Negligence
establishment, condition of property, or
anything else which: Whether the
Whether it was
defendant’s use of his
(1) Injures or endangers the health or safety unreasonable for the
property was
of others; or defendant to act as he
unreasonable as to
did in view of the
(2) Annoys or offends the senses; or plaintiff, without
threatened danger or
regard to
(3) Shocks, defies or disregards decency or harm to one in
foreseeability of
morality; or plaintiff’s position.
injury.
(4) Obstructs or interferes with free passage
of any public highway or street, or any Liability for the Liability is based on a
body of water; or resulting injury to want of proper care
others regardless of
(5) Hinders or impairs the use of property. the degree of care or
skill exercised to avoid
such injury.
Note: To constitute a nuisance there must be
an arbitrary or abusive use of property or Principles ordinarily Principles ordinarily
disregard of commonly accepted standards apply where the cause apply where the cause
set by society. of action is for of action is for harm
A municipal body has the power to declare continuing harm resulting from one act
and abate nuisances. BUT it has no power to caused by continuing which created an
find as fact that a particular thing is a or recurrent acts unreasonable risk of
nuisance. The determination of whether or which cause injury.
not a nuisance exists is a judicial function, discomfort or
because to declare something a nuisance is annoyance to plaintiff
to deprive its use. [Iloilo Cold Storage v Mun. in the use of his
Council of Iloilo (1913)] property.

A. NUISANCE V. TRESPASS C. CLASSES


Nuisance Trespass
C.1. ACCORDING TO NATURE
Use of one’s own Direct infringement of
property in such a another’s right of i. Nuisance per se or at law
manner as to cause property. An act, occupation or structure which is a
injury to the property nuisance at all times and under any
or right or interest of circumstances, regardless of location or
another, and surroundings.
generally results from
the commission of an
act beyond the limits ii. Nuisance per accidens or in fact
of the property
affected. One that becomes a nuisance by reason of
circumstances and surroundings.
Injury is It is not a nuisance by its nature but it may
Injury is immediate.
consequential. become so by reason of the locality,
surrounding, or the manner in which it is
conducted, managed, etc.

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Per se Per accidens D. DOCTRINE OF ATTRACTIVE


NUISANCE
The wrong is Proof of the act and
established by proof its consequences are One who maintains on his premises
of the mere act. It necessary. dangerous instrumentalities or appliances of
becomes a nuisance a character likely to attract children in play,
as a matter of law. and who fails to exercise ordinary care to
prevent children from playing therewith or
Nuisance under any That which depends resorting thereto, is liable to a child of tender
and all circumstances, upon certain years who is injured thereby, even if the child
because it constitutes conditions and is technically a trespasser in the premises.
a direct menace to circumstances, and its [Jarco Marketing Corp. v. CA (1999)]
public health or existence being a Basis of liability – The attractiveness is an
safety, and, for that question of fact, it invitation to children. Safeguards to prevent
reason, may be cannot be abated danger must therefore be set up.
abated summarily without due hearing
under the undefined thereon in a tribunal Note: A swimming pool or water tank is not
law of necessity authorized to decide an attractive nuisance, for while it is
whether such a thing attractive, it cannot be a nuisance, being
does in law constitute merely an imitation of the work of nature.
a nuisance. [Iloilo Ice [Hidalgo Enterprises v. Balandan (1952)]
and Cold Storage v.
Municipal Council of
Iloilo, 24 Phil 471; E. LIABILITY IN CASE OF NUISANCE
Monteverde v.
Generoso, 52 Phil, 123,
127] E.1. WHO ARE LIABLE
Every successive owner or possessor of
property who fails or refuses to abate a
C.2. ACCORDING TO SCOPE OF INJURIOUS nuisance in that property started by a former
EFFECTS owner or possessor is liable therefor in the
Test: not the number of persons annoyed but same manner as the one who created it. [NCC
the possibility of annoyance to the public by 696]
the invasion of its rights – the fact that it is in
a public place and annoying to all who come
within its sphere. E.2. LIABILITY OF CREATOR OF NUISANCE
He who creates a nuisance is liable for the
resulting damages and his liability continues
i. Public as long as the nuisance continues.
The doing of or the failure to do something There must be a breach of some duty on the
that injuriously affects the safety, health or part of the person sought to be held liable for
morals of the public. damages resulting from a nuisance before an
It causes hurt, inconvenience or injury to the action will lie against him.
public generally, or to such part of the public No one is to be held liable for a nuisance
as necessarily comes in contact with it. which he cannot himself physically abate
without legal action against another for that
purpose.
ii. Private
Where several persons, acting independently,
One which violates only private rights and cause damage by acts which constitute a
produces damages to but one or a few nuisance, each is liable for the damage which
specific persons. he has caused or for his proportionate share
of the entire damage.

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E.3. LIABILITY OF TRANSFEREES F. REGULATION OF NUISANCES


The grantee of land upon which there exists a
nuisance created by his predecessors in title
is not responsible therefore merely because F.1. PUBLIC NUISANCE
he becomes the owner of the premises, or NCC 695. Nuisance is either public or private.
merely because he permits it to remain. A public nuisance affects a community or
He shall be liable if he knowingly continues neighborhood or any considerable number of
the nuisance. Generally, he is not liable for persons, although the extent of the
continuing it in its original form, unless he annoyance, danger or damage upon
has been notified of its existence and individuals may be unequal. A private
requested to remove it, or has actual nuisance is one that is not included in the
knowledge that it is a nuisance and injurious foregoing definition.
to the rights of others.
If the transferee cannot physically abate the Public Nuisance: That which affects a
nuisance without legal action against another community or neighborhood or any
person, then he shall not be liable for such considerable number of persons, although
nuisance. the extent of annoyance, danger or damage
upon individuals may be unequal [NCC 695]

E.4. NATURE OF LIABILITY


All persons who participate in the creation or Remedies
maintenance of a nuisance are jointly and (1) The remedies against a public nuisance
severally liable for the injury done. are:
If 2 or more persons who create or maintain (a) Prosecution under the Penal Code or
the nuisance act entirely independent of one any local ordinance;
another, and without any community of
interest, concert of action, or common design, (b) A civil action; or
each is liable only so far as his acts contribute (c) Extrajudicial abatement.
to the injury.
(2) It must be reasonably and efficiently
For solidary liability, there must be some joint exercised
or concurrent act or community of action or
duty, or the several wrongful acts done at (3) Means employed must not be unduly
several times must have concurred in their oppressive on individuals, and
effects as one single act to produce the injury (4) No more injury must be done to the
complained of. property or rights of individuals than is
necessary to accomplish the abatement.

E.5. RIGHT TO RECOVER DAMAGES (5) No right to compensation if property


taken or destroyed is a nuisance.
The abatement of a nuisance does not
preclude the right of any person injured to
recover damages for its past existence. [NCC Action for Abatement
697]
The district health officer shall take care that
Abatement and damages are cumulative one or all of the remedies against a public
remedies. nuisance are availed of.
If a civil action is brought by reason of the
No Prescription maintenance of a public nuisance, such
action shall be commenced by the city or
The action to abate a public or private municipal mayor.
nuisance is NOT extinguished by prescription.
[NCC 1143(2)] The district health officer shall determine
whether or not abatement, without judicial
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proceedings, is the best remedy against a reasonable time to enable the other to
public nuisance. abate the nuisance himself.
A private person may file an action on (4) The means employed must be reasonable
account of a public nuisance if it is especially and for any unnecessary damage or force,
injurious to him. the actor will be liable. The right to abate
is not greater than the necessity of the
General rule: An individual has no right of
case and is limited to the removal of only
action against a public nuisance. The
so much of the objectionable thing as
abatement proceedings must be instituted in
actually causes the nuisance.
the name of the State or its representatives.
(5) The property must not be destroyed
Exception: An individual who has suffered
unless it is absolutely necessary to do so.
some special damage different from that
sustained by the general public may maintain
a suit in equity for an injunction to abate it, or
F.2. PRIVATE NUISANCE
an action for damages which he has
sustained. Private Nuisance: That which is not included
in the definition of a public nuisance [NCC
The action becomes a tort if an individual has
695]
suffered particular harm, in which case the
nuisance is treated as a private nuisance with
respect to such person.
Remedies
(1) The remedies against a private nuisance
Requisites of the right of a private individual are:
to abate a public nuisance
(a) A civil action; or
(1) That demand be first made upon the
(b) Extrajudicial abatement.
owner or possessor of the property to
abate the nuisance; (2) The procedure for extrajudicial
abatement of a public nuisance by a
(2) That such demand has been rejected;
private person will also be followed.
(3) That the abatement be approved by the
(3) The person extrajudicially abating a
district health officer and executed with
nuisance liable for damages if:
the assistance of the local police; and
(4) If he causes unnecessary injury; or
(4) That the value of the destruction does not
exceed P3000. (5) If an alleged nuisance is later declared by
the courts to be not a real nuisance.

Rules
Remedies of the property owner
(1) The right must be exercised only in cases
of urgent or extreme necessity. The thing (1) A person whose property is seized or
alleged to be a nuisance must be existing destroyed as a nuisance may resort to the
at the time that it was alleged to be a courts to determine whether or not it was
nuisance. in fact a nuisance.
(2) A summary abatement must be resorted (2) An action for replevin;
to within a reasonable time after (3) To enjoin the sale or destruction of the
knowledge of the nuisance is acquired or property;
should have been acquired by the person
entitled to abate. (4) An action for the proceeds of its sale and
damages if it has been sold; or
(3) The person who has the right to abate
must give reasonable notice of his (5) To enjoin private parties from proceeding
intention to do so, and allow thereafter a to abate a supposed nuisance.

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XI. Modes of Acquiring Mode Title

Ownership and Other Directly and Serves merely to give


immediately produces the occasion for its
Real Rights a real right. acquisition or
existence.

(1) Occupation Cause Means


(2) By operation of Law, e.g. hidden treasure, Proximate cause Remote cause
accession discreta and continua, NCC
1434, 1456, FC 120, registration of land Essence of the right, Means whereby that
under PD 1529. which is to be created “essence” is
(3) Donation or transmitted. transmitted.
(4) Tradition
(5) Intellectual Property A. OCCUPATION
(6) Prescription Note: Ownership of land cannot be acquired
by occupation.
(7) Succession
Possession Occupation
Mode is a specific cause which produces Possession is the Things appropriable
dominion and other real rights as a result of holding of a thing or by nature which are
the co-existence of special status of things, the enjoyment of a without an owner,
capacity and intention of persons and right [NCC 523] such as animals that
fulfillment of the requisites of law. are the object of
hunting and fishing,
hiddren treasure and
Kinds of modes: abandoned
(1) Original – occupation and intellectual movables, are
creation acquired by
occupation. [NCC 713]
(2) Derivative – based on a pre-existing right
of another (the 5 other modes)
A.1. REQUISITES
Title is every juridical right which gives a (1) The property must be a corporeal
means to the acquisition of real rights but in personal property susceptible of
itself is insufficient to produce them. appropriation;
(2) The property is either res nullius (no
owner) or res derelict (abandoned
It is not by contract but by delivery that the property);
ownership of property is transferred (Non
nudis pactis, sed traditione, dominia rerum (3) There is seizure or apprehension with the
transferentur). Contracts only constitute titles intent to appropriate; and
or rights to transfer or acquisition of (4) There is an observance of requisites or
ownership, while delivery is the mode of conditions prescribed by law.
accomplishing the same.

Mode Title

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A.2. KINDS person within 20 days to be counted from


such occupation. This period having expired,
i. Of Animals
they shall pertain to him who has caught and
(1) Wild or feral animals – seizure kept them. [NCC 716] For the 3rd person in
(hunting/fishing) in open season by this case to invoke this provision, he must
means not prohibited. have occupied the domesticated animal as
against its owner in good faith. [Pajunar vs CA
(2) Tamed/domesticated animals – General
(1989)]
Rule: belong to the tamer for as long as
tamed animal retains the habit of
returning to the place where it is kept, but
iii. Pigeons and Fish [NCC 717]
upon recovering freedom, are susceptible
to occupation unless claimed within 20 Pigeons and fish which from their respective
days from seizure by another. [NCC 716] breeding places pass to another pertaining to
a different owner shall belong to the latter,
(3) Tame/domestic animals – not acquired
provided they have not been enticed by some
by occupation except when abandoned.
artifice or fraud.

ii. Of Other Personal Property


iv. Hidden Treasure [NCC 718, 438]
(1) Abandoned – may be acquired
He who by chance discovers hidden treasure
(2) Lost in another’s property: ½ shall be allowed to
the finder.
(3) Hidden treasure – finder gets ½ by
occupation; landowner gets ½ by If the finder is a trespasser, he shall not be
accession; except in CPG system, share entitled to any share of the treasure.
goes to the partnership.
If the things found be of interest to science or
the arts, the State may acquire them at their
just price, which shall be divided in
A.3. SPECIAL RULES [NCC 716]
conformity with the rule stated.

i. Occupation of a Swarm of Bees


v. Lost Movables; Procedure After Finding Lost
The owner of a swarm of bees shall have a Movables [NCC 719]
right to pursue them to another’s land,
Whoever finds a movable, which is not
indemnifying the possessor of the latter for
treasure, must return it to its previous
the damage.
possessor.
If the owner has not pursued the swarm, or
If unknown, the finder shall immediately
ceases to do so within 2 consecutive days, the
deposit it with the mayor of the city or
possessor of the land may occupy or retain
municipality where the finding has taken
the same, the owner having lost his
place.
ownership by leaving, abandoned them (no
more intention to recover) The finding shall be publicly announced by
the mayor for two consecutive weeks in the
way he deems best.
ii. Occupation of Domesticated Animals
If the movable cannot be kept without
Wild animals are possessed only while they deterioration, or without expenses which
are under one's control; domesticated or considerably diminish its value, it shall be
tamed animals are considered domestic or sold at a public auction eight days after the
tame if they retain the habit of returning to publication.
the premises of the possessor. [NCC 560]
Six months from the publication having
The owner of domesticated animals may also elapsed without the owner having appeared,
claim them from their occupation by another the thing found, or its value, shall be awarded
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to the finder. The finder and the owner shall B.4. WHAT MAY BE DONATED
be obliged, as the case may be, to reimburse
All present property or part thereof of the
the expenses.
donor, subject to the limitations below
If the owner should appear in time, he shall
be obliged to pay, as a reward to the finder,
one-tenth of the sum or of the price of the Limitations:
thing found.
(1) The donor reserves, in full ownership or
usufruct, sufficient means for support of
himself and all relatives entitled to be
B. DONATION supported by donor at the time of
Donation is an act of liberality whereby a acceptance. [NCC 750].
person disposes gratuitously of a thing or (2) The donor reserves property sufficient to
right in favor of another, who accepts it. pay donor’s debts contracted before
(Simple donation) donation, otherwise, donation is in fraud
of creditors [NCC 759, 1387].
B.1. OTHER INSTANCES CONSIDERED AS (3) Donations provided for in marriage
DONATION settlements between future spouses –
must be not more than 1/5 of present
When a person gives to another a thing or property.
right on account of the latter's merits or of
the services rendered by him to the donor, (4) Donation propter nuptias by an ascendant
provided they do not constitute a consisting of jewelry, furniture or clothing
demandable debt. (Remuneratory donation) not to exceed 1/10 of disposable portion.
When the gift imposes upon the donee a
burden that is less than the value of the thing B.5. WHAT MAY NOT BE DONATED
given. (Onerous donation)
(1) Future property
“Future property” is understood as
B.2. NATURE anything which the donor does not
Bilateral contract creating unilateral currently own although the donor may or
obligations on the donor’s part. may not own it later. [Osorio v Osorio
(1921)]
Requires consent of both donor and donee
(except for onerous donation) though it Note:
produces obligations only on the side of the Inheritance is NOT considered as future
donor, unless it is an onerous donation. property. [ibid]
B.3. REQUISITES (2) The donor cannot donate more than he
(1) Consent and capacity of the parties; can give or receive by will [NCC 752]
(2) Animus Donandi (intent to donate);
(3) Delivery of thing donated in oral donation C. KINDS OF DONATIONS
of movable valued at P5,000 or less,
C.1. AS TO ITS TAKING EFFECT
once proper form is complied with,
donation is perfected;
(4) Form as prescribed by law; and i. Donation Inter Vivos [NCC 729]
(5) Impoverishment of donor’s patrimony Donation which shall take effect during the
and enrichment on part of donee. lifetime of the donor upon concurrence of the
requirements of donation, though the
property shall not be delivered until after the
donor's death.

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General Rule: Irrevocable Causes for revocation of donation propter


nuptias [FC 86]:
Exceptions:
(1) If the marriage is not celebrated or
(1) Subsequent birth of the donor’s children;
judicially declared void ab initio, except
(2) Donor’s failure to comply with imposed donations made in the marriage
conditions; settlements;
(3) Donee’s ingratitude; or (2) When the marriage takes place without
the consent of the parents or guardian, as
(4) Reduction of donation by reason of
required by law;
inofficiousness.
(3) When the marriage is annulled, and the
donee acted in bad faith;
ii. Donation Propter Nuptias [FC 86]
(4) Upon legal separation, the one being the
A special type of donation made by reason of guilty spouse;
marriage.
(5) If it is with a resolutory condition and the
Requisites: condition is complied with; or
(1) Must be made before the celebration of (6) When the donee has committed an act of
marriage; ingratitude as specified by the provisions
(2) Made in consideration of the marriage; of the Civil Code on donations in general.
and
(3) Made in favor of one or both of the future Donation between spouses
spouses.
General Rule: Every donation or grant of
gratuitous advantage, direct or indirect,
Ordinary Donations v. Donations Propter between the spouses during the marriage
Nuptias shall be VOID. The prohibition applies to
persons living together as husband and wife
Ordinary Propter Nuptias without a valid marriage.
Exception: Moderate gifts which the spouses
As to requirement of express acceptance
may give each other on the occasion of any
Necessary Not required family rejoicing.

iii. Donation Mortis Causa [NCC 728]


As to future property
It only becomes effective upon the death of
Cannot include future May include future the donor, as the donor’s death ahead of the
property property (same rule as donee works as a suspensive condition for the
wills) existence of the donation.

As to limit on donation of present property


Characteristics:
No limit to donation If present property is
of present property donated and property (1) The transferor retains ownership and
provided legitimes are regime is other than control of the property while alive;
not impaired. ACP, limited to 1/5. (2) The transfer is revocable at will before his
death; and
As to grounds for revocation
(3) The transfer will be VOID if the transferor
Enumerated in CC Enumerated in FC 86 should survive the transferee.
760 and 765 (see below)

Inter Vivos v. Mortis Causa


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Inter vivos Mortis causa Inter vivos Mortis causa

As to formalities As to effect if donor survives donee

Executed and Must be in the form of Not affected. Donation is void.


accepted with a will, with all the
formalities prescribed formalities for the
by CC. validity of wills. Notes:
As to effectivity The nature of the act, whether it’s one of
disposition or of execution, is controlling to
Effective during the Effective after the determine whether the donation is mortis
lifetime of the donor. death of the donor. causa or inter vivos.
What is important is the time of transfer of
As to acceptance
ownership even if transfer of property
Acceptance must be donated may be subject to a condition or a
made after the death term.
of the donor, the Whether the donation is inter vivos or mortis
donation being causa depends on whether the donor
effective only after the intended to transfer ownership over the
Acceptance must be death of donor. properties upon the execution of the deed.
made during the Acceptance during [Gestopa v. CA (2002)]
lifetime of the donor. the donor’s lifetime is
premature and
ineffective because C.2. AS TO CAUSE OR CONSIDERATION
there can be no
Simple - made out of pure liberality or
contract regarding
future inheritance. because of the merits of the donee.
Remuneratory - made for services already
As to transfer of ownership for right of rendered to the donor.
disposition
Onerous - imposes a burden inferior in value
Ownership is Upon acceptance by to property donated.
immediately the donee, but the Improper - burden equal in value to property
transferred. Delivery effect of such donated
of possession is retroacts to the time
allowed after death. of death of the donor. Sub-modo or modal - imposes a prestation
upon donee as to how property donated will
As to revocation be applied.
Mixed donations – e.g. sale for price lower
Irrevocable – may be Revocable upon the
than value of property.
revoked only for the exclusive will of the
reasons provided in donor.
CC 760, 764, 765.
D. FORMALITIES REQUIRED
As to reduction or suppression

When it is excessive or When it is excessive or D.1. HOW MADE AND ACCEPTED


inofficious, being inofficious, it is
preferred, it is reduced first, or even
reduced only after the suppressed. i. Movable properties [NCC 748]
donations mortis The donation of a movable may be made
causa had been orally or in writing.
reduced or exhausted.

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If made orally, the donation requires the (4) Legal representative, if done is an unborn
simultaneous delivery of the thing or of the child
document representing the right donated.
Note:
If the value of the movable donated exceeds
A joint donation (donation to two or more
P5,000, the donation and the acceptance
persons) could not be accepted by a donee,
should be in writing; otherwise, the donation
independently of the other donee/s. [Genato
is void.
v Lorenzo (1968)]

ii. Immovable properties [NCC 749]


iii. Time Of Acceptance
General Rule: Must be made in a public
Must be made during the lifetime of both
instrument specifying the donated property
donor and donee. [NCC 746]
and the burdens assumed by the donee.
The acceptance must be either:
D.3. QUALIFICATIONS OF DONORS AND
(a) In the same instrument; or
DONEES
(b) In another public instrument notified to
i. Who May Give Donations
the donor in authentic form and noted in
both deeds. All persons who may contract and dispose of
their property may make a donation. [NCC
735]
Exceptions:
Notes:
Donations propter nuptias – need no express
Donor’s capacity shall be determined as of
acceptance.
the time of the making of the donation. [NCC
Onerous donations – form governed by the 737]
rules of contracts.
Capacity to donate is required for donations
inter vivos and NOT in donations mortis
causa.
D.2. PERFECTION
Donor’s capacity is determined as of the time
i. Acceptance
of the donation. Subsequent incapacity is
Acceptance is indispensable, and must be immaterial.
made during the lifetime of both donor and
ii. Who May Receive Donations
donee. [NCC 746]
All who are not specially disqualified by law.
Donation is perfected upon the donor’s
[NCC 738]
learning of the acceptance.
Minors and others who cannot enter into a
A document merely correcting the deed of
contract: acceptance may be made through
donation does not constitute a new deed of
their parents or legal representatives. [NCC
donation so there is no need for a new
741]
acceptance [Osorio v Osorio (1921)]
Donations made to conceived and unborn
children: those who would legally represent
ii. Who May Accept them if they were already born may accept
the donations. [NCC 737]
(1) Donee himself;
(2) Donee’s representative duly authorized
with a special power of attorney (or a iii. Who May Not Give or Receive Donations
general power of attorney with specific
power to accept a donation);
By reason of public policy [NCC 739]
(3) Parents or legal representative, if donee
is a minor; or
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(1) Those made between persons guilty of of the gospel who extended spiritual aid to
adultery or concubinage at the time of him during the same period;
the donatrion;
The relatives of such priest or minister of the
(2) Those made between persons guilty of gospel within the fourth degree, the church,
the same criminal offense if the donation order, chapter, community, organization, or
is made in consideration thereof; or institution to which such priest or minister
may belong;
(3) Those made to a public officer, his
spouse, descendants, and/or ascendants A guardian with respect to testamentary
by reason of the office. dispositions given by a ward in his favor
before the final accounts of the guardianship
have been approved, even if the testator
By reason of the donee’s unworthiness or should die after the approval thereof;
incapacity to succeed [NCC 740, 1032 except nevertheless, any provision made by the ward
(6-8), and 1027 except (4)] in favor of the guardian when the latter is his
ascendant, descendant, brother, sister, or
(1) NCC 1032:
spouse, shall be valid;
Parents who have abandoned their children
Any physician, surgeon, nurse, health officer
or induced their daughters to lead a corrupt
or druggist who took care of the testator
or immoral life, or attempted against their
during his last illness; or
virtue;
Individuals, associations and corporations not
Any person who has been convicted of an
permitted by law to inherit.
attempt against the life of the testator, his or
her spouse, descendants, or ascendants;
Any person who has accused the testator of a By reason of prejudice to creditors or heirs
crime for which the law prescribes
(1) If donation is made in fraud of creditos by
imprisonment for six years or more, if the
debtor who is insolvent (rescissible for
accusation has been found groundless;
accion pauliana)
Any heir of full age who, having knowledge of
(2) If legitimes of compulsory heirs infringed
the violent death of the testator, should fail
upon (donation is inofficious (revocation
to report it to an officer of the law within a
or reduction of donation)
month, unless the authorities have already
taken action; this prohibition shall not apply
to cases wherein, according to law, there is no
obligation to make an accusation; E. EFFECTS OF DONATION /
LIMITATIONS
Any person convicted of adultery or
concubinage with the spouse of the testator;
Any person who by fraud, violence, E.1. IN GENERAL
intimidation, or undue influence should cause (1) The donee may demand actual delivery of
the testator to make a will or to change one thing donated;
already made;
(2) The donee is subrogated to the rights of
Any person who by the same means prevents the donor in the property donated;
another from making a will, or from revoking
one already made, or who supplants, (3) The donor is not obliged to warrant the
conceals, or alters the latter’s will; things donated except in onerous
donations where the donor is liable for
Any person who falsifies or forges a supposed eviction up to the extent of the burden;
will of the decedent. [NCC 754]
(2) NCC 1027: (4) The donor is liable for eviction or hidden
The priest who heard the confession of the defects in case of bad faith on his part;
testator during his last illness, or the minister [NCC 754]

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(5) In donation propter nuptias, the donor If the rule is violated, the stipulation on
must release the property donated from reversion is void but the donation is still valid.
mortgages and other encumbrances
unless the contrary has been stipulated;
iv. Payment of donor’s debt [NCC 758]
(6) In donations to several donees jointly,
there is no right of accretion EXCEPT: (1) If expressly stipulated, the donee must
pay only the debts contracted before the
(a) When the donor provides otherwise;
donation unless specified otherwise.
or
But in no case shall the donee be
(b) When the donation to husband and
responsible for debts exceeding the value
wife is joint with the right of accretion
of the property donated unless clearly
UNLESS the donor provides
intended.
otherwise.
(2) If there’s no stipulation, the donee will be
(7) Donations by a person to his non-heirs
answerable only for the donor’s debt only
are collationable. [Liguez v CA]
in case the donation is in fraud of
(8) Donations made to one’s heirs must creditors.
expressly prohibit collation to be
exempted from collation. [De Roma v CA
(1987)] v. Illegal or impossible conditions [NCC 1183]
Impossible conditions: those contrary to good
customs or public policy and those prohibited
E.2. SPECIAL PROVISIONS
by law shall annul the obligation, which
depends upon them.
i. Reservation by donor of power to dispose (in The condition not to do an impossible thing
whole or in part) or to encumber property shall be considered as not having been
donated [NCC 755] agreed upon.
The donor may reserve the right to dispose of If the obligation is divisible, that part thereof
some things donated, or of some amount, which is not affected by the impossible or
which shall be a charge thereon. unlawful condition shall be valid.
But if he should die without having made use
of this right, the property or amount reserved
vi. Double donations [NCC 744]
shall belong to the donee.
Rule: Priority in time, priority in right.
(1) If movable: one who first took possession
ii. Donation of naked ownership to one donee
in good faith.
and usufruct to another [NCC 756]
(2) If immovable: one who recorded in
The naked ownership and the usufruct may
registry of property in good faith
be donated separately, provided that all the
donees are living at the time of the donation. (3) If there is no inscription, the one who first
took possession in good faith.
(4) If there is no possession, one who can
iii. Conventional reversion in favor of donor or
present the oldest title.
other person [NCC 757]
(1) If made in favor of the donor, reversion
may be for any case and circumstance. vii. Excessive/Inofficious Donations [NCC 752]
(2) If made in favor of other persons, such Inofficious donation: a type of donation in
persons must all be living at the time of which a person gives or receives more than
the donation. what he may give or receive by will. If a
donation is inofficious, it shall be reduced
with regard to the excess.
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But this reduction shall not prevent the guilt of the donor and donee may be proved
donations from taking effect during the life of by preponderance of evidence in the same
the donor, nor shall it bar the donee from action.
appropriating the fruits.

F.2. THOSE MADE BETWEEN PERSONS


Note: FOUND GUILTY OF THE SAME CRIMINAL
OFFENSE, IN CONSIDERATION THEREOF
Only those who, at the time of the donor's
death, have a right to the legitime and their
heirs and successors-in-interest may ask for
F.3. THOSE MADE TO A PUBLIC OFFICER
the reduction or inofficious donations.
OR HIS WIFE, DESCENDANTS AND
If, there being two or more donations, the ASCENDANTS, BY REASON OF HIS OFFICE
disposable portion is not sufficient to cover
all of them, those of the more recent date
shall be suppressed or reduced with regard to F.4. THOSE MADE TO PERSONS
the excess. INCAPACITATED TO SUCCEED BY WILL.
[NCC 1027]

vii. Donations cannot comprehend future


property. G. REVOCATION V. REDUCTION
Future property: understood as anything
which the donor cannot dispose of at the time
of the donation. Revocation Reduction
Note: Total withdrawal of
Amount is only insofar
It is immaterial that the then-future property amount, whether the
as the legitime is
may subsequently belong to the donor. legitime is impaired or
prejudiced
not

Benefits the donor’s


viii. In fraud of creditors [NCC 759]
heirs (except when
Donation is always presumed to be in fraud of Benefits the donor made on the ground
creditors, when at the time thereof the donor of the appearance of a
did not reserve sufficient property to pay his child)
debts prior to the donation.
The donee shall be responsible for donor’s
debts only when the donation has been made G.1. GROUNDS FOR REDUCTION
in fraud of creditors, otherwise creditors may (1) Inofficiousness
rescind donation by way of accion pauliana.
A donation where a person gives or
receives more than what he may give or
F. VOID DONATIONS [NCC 739-740, receive by will is inofficious. [NCC 752]
1027] (2) Subsequent birth, reappearance of child
or adoption of minor by donor [NCC 760]
Effects of subsequent birth, reappearance
F.1. THOSE MADE BETWEEN PERSONS
or adoption:
WHO WERE GUILTY OF ADULTERY OR
CONCUBINAGE AT THE TIME OF THE A donation is valid if it does not exceed the
DONATION free part computed as of the birth, adoption
or reappearance of the child.
Note:
The donee must return the property or its
The spouse of the donor or donee may bring
value at the time of the donation.
the action for declaration of nullity and the
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The fruits must be returned from the filing of Applies to all donations EXCEPT:
the action.
(1) Mortis causa
Mortgages by the donee are valid but may be
(2) Propter nuptias
discharged subject to reimbursement from
the donee. (3) Onerous donations
Extent of revocation: only to the extent of the Notes:
presumptive legitime of the child.
Founded on moral duty: one who received a
(1) Insufficient means of support donation must be grateful to his benefactor.
(2) In fraud of creditors Conviction is not necessary.
(3) Prescription – 4 years from either: Time to file action for revocation – within 1 yr
from knowledge of the offense by donor and
Birth of first legitimate child;
it was possible for him to file the case [NCC
Legitimation, adoption, recognition of first 769].
child;
Judicial declaration of filiation; or
Who may file
Knowledge of information on the existence of
Only the donor can file an action for
a child believed to be dead.
revocation on the ground of the donee’s
ingratitude, as such is personal to the donor.
G.2. REVOCATION It may be filed by the donor’s heirs only if they
substitute the donor in case the latter dies
(1) Failure to comply with any of the
during the pendency of the case.
conditions imposed by the donor upon
the donee
(2) For additional legitime for subsequent Effect of revocation on alienations and
birth, reappearance or adoption encumbrances [NCC 766]
(3) Ingratitude Alienations and mortgages effected before
the notation of the complaint for revocation
The following cases are forms of
in the Registry of Property shall subsist.
ingratitude:
Later ones shall be void.
If the donee should commit some offense
against the person, the honor or the property
of the donor, or of his wife or children under
Effect as to fruits [NCC 768]
his parental authority;
When the donation is revoked for any of the
If the donee imputes to the donor any
causes stated in NCC 760, or by reason of
criminal offense, or any act involving moral
ingratitude, or when it is reduced because it is
turpitude, even though he should prove it,
inofficious, the donee shall not return the
unless the crime or the act has been
fruits except from the filing of the complaint.
committed against the donee himself, his
wife or children under his authority; or If the revocation is based upon
noncompliance with any of the conditions
If he unduly refuses him support when the
imposed in the donation, the donee shall
donee is legally or morally bound to give
return not only the property but also the fruits
support to the donor.
thereof which he may have received after
having failed to fulfill the condition.

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What may be donated

All present property of the donor or part thereof Limitation:


(1) The donor reserves, in full ownership or usufruct,
sufficient means for support of himself and all
relatives entitled to be supported by donor at the
time of acceptance. [NCC 750].
(2) The donor reserves property sufficient to pay
donor’s debts contracted before donation,
otherwise, donation is in fraud of creditors [NCC
759, 1387].
(3) Donations provided for in marriage settlements
between future spouses – must be not more than
1/5 of present property.
(4) Donation propter nuptias by an ascendant
consisting of jewelry, furniture or clothing not to
exceed 1/10 of disposable portion.

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 [NCC 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]
Donor’s capacity is determined at the time of the
making of donation [NCC 737]
(2) Made between person who are guilty of adultery
or concubinage [NCC 739]
Made between persons found guilty of the same
criminal offense, in consideration thereof [NCC 739]

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Donee

Who are allowed to accept donations: Those who Who are not allowed:
are not specifically disqualified by law [NCC 738]
(1) Made between person who are guilty of adultery
Those who are allowed, with qualifications: or concubinage [NCC 739]
Minors, insane/imbecile, deaf-mute and others who (2) Made between persons found guilty of the same
are incapacitated [see NCC 38], provided that their criminal offense, in consideration thereof [NCC 739]
acceptance is 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 739]
(2) Conceived and unborn children, provided that
(4) Those who cannot succeed by will [NCC 740]
the donation is accepted by those who would legally
represent them if they were already born Those made to incapacitated persons, although
simulated under the guise of another contract [NCC
743]

Acceptance of the donation

Who may accept [NCC 745] When to accept: during the lifetime of the donor or
donee [NCC 746]
(1) Donee personally
(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 clearly 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

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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 Transmitted to children Property is returned Fruits returned from the
birth, legitimation and and descendants upon filing of the complaint
If the property has been
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 donor’s heirs and may alienations and having failed to fulfill
be exercised against mortgages void subject condition returned
donee’s heirs to rights of third persons
in good faith

Ingratitude

Within 1 year after Not transmitted to heirs Property returned, but Fruits received from the
knowledge by donor of of donor/ donee, but if alienations and filing of the complaint
the fact and it was donor dies during mortgages effected returned
possible for him to bring pendency of case, heirs before the notation of
the action may be substituted. the complaint for
revocation in the registry
of property subsist

Failure to reserve sufficient means for support

At any time, by the Not transmissible Reduced to the extent Donee entitled
donor or relatives necessary to provide
entitled to support support

Inofficiousness for being in excess of what the donor can give by will

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Time of Action Transmissibility Effect Liability (Fruits)

Within 5 years from the Transmitted to donor’s Donation takes effect on Donee entitled
death of the donor [NCC heirs the lifetime of donor.
1149] Reduction only upon his
death with regard to the
excess

Fraud against creditors

Rescission within 4 Transmitted to creditor’s Returned for the benefit Fruits returned/ if
years from the heirs or successors-in- of the creditor who impossible, indemnify
perfection of donation/ interest brought the action creditor for damages
knowledge of the
donation

H. TRADITION Constructive Tradition: when the delivery of


the thing is not real or material but consists
It is a derivative mode of acquiring ownership merely in certain facts indicative of the same
and other real rights by virtue of which, there
being intention and capacity on the part of Symbolical Tradition: done through the
the grantor and grantee and the pre- delivery of signs or things which represent
existence of said rights in the estate of the that which is being transmitted. (e.g. keys or
grantor, they are transmitted to the grantee title itself)
through a just title. Tradition by public instrument: consists in the
substitution of real delivery of possession by a
public writing with the delivery of a document
H.1. REQUISITES which evidences the transaction.
(1) Pre-existence in the estate of the grantor Traditio longa manu: made by the grantor
of the right to be transmitted; pointing out to the grantee the thing to be
(2) Just cause or title for the transmission; delivered.
(3) Intention on the part of the grantor to Traditio brevi manu: takes place when the
grant and on the part of the grantees to grantee is already in possession of the thing.
acquire; (e.g. when the lessee buys the thing leased to
him)
(4) Capacity to transmit and to acquire; and
Traditio constitutum possessorium: similar to
(5) An act that gives it outward form,
brevi manu but in the opposite sense – when
physically, symbolically, or legally.
the owner alienates a thing but remains in
possession in another concept as lesee or
depositary.
H.2. PURPOSE
Quasi-tradition: delivery of incorporeal things
Ownership and other real rights are
or rights by the grantee exercising his rights
transferred, among other means, by tradition.
with the grantor’s consent.
The delivery of a thing constitutes a necessary
Tradition by operation of law: delivery which is
and indispensable requisite for the purpose of
not included in the foregoing modes of
acquiring the ownership of the same by virtue
delivery and where the delivery is effected
of a contract.
solely by virtue of an express provision of law,
e.g. NCC 1434.
H.3. KINDS
Real Tradition: physical delivery
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B.2. PRESCRIPTION WHERE POSSESSION


XII. Prescription IN GOOD FAITH CONVERTED INTO
By prescription, one acquires ownership and POSSESSION IN BAD FAITH:
other real rights through the lapse of time in
the manner and under the conditions laid (a) Ordinary
down by law. In the same way, rights and Movable properties - 4 years
conditions are lost by prescription.
Immovable properties - 10 years
It is a means of acquiring ownership and
other real rights or losing rights or actions to (b) Extraordinary:
enforce such rights through the lapse of time. Movable properties - 8 years
Immovable properties - 30 years
A. RATIONALE
It is purely statutory in origin. It is founded on B.3. AS A MODE OF ACQUISITION,
grounds of public policy which requires for PRESCRIPTION REQUIRES EXISTENCE OF
the peace of society, that juridical relations FOLLOWING:
susceptible of doubt and which may give rise
(1) Capacity of the claimant to acquire by
to disputes, be fixed and established after the
prescription;
lapse of a determinate time so that
ownership and other rights may be certain for (2) A thing capable of acquisition by
those who have claim in them. prescription;
(3) Adverse possession of the thing under
certain conditions; and
B. KINDS OF PRESCRIPTION
(4) Lapse of time provided by law.
(a) Acquisitive prescription
(5) Possession must be in the concept of
(b) Extinctive prescription owner, not holder.

B.1. ACQUISITIVE PRESCRIPTION The following are only required in ordinary


The acquisition of ownership and other real acquisitive prescription:
rights through possession in the concept of (1) Good faith of the possessor; and
owner of a thing in the manner and condition
provided by law. (2) Proof of just title

May be ordinary or extraordinary: Note:


Ordinary: requires possession of things in For extraordinary prescription, only
good faith and with just title for the time fixed possession in the concept of owner is
by law. required; no need of good faith and just title.
Extraordinary: acquisition of ownership and Possession has to be in the concept of an
other real rights without need of title or of owner, public, peaceful, and uninterrupted.
good faith or any other condition.

B.4. EXTINCTIVE PRESCRIPTION


The loss or extinguishment of property rights
or actions through the possession by another
of a thing for the period provided by law or
through failure to bring the necessary action
to enforce one’s right within the period fixed
by law.

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Acquisitive C.3. RIGHTS NOT EXTINGUISHED BY


Extinctive Prescription PRESCRIPTION [NCC 1143]
Prescription
(1) To demand a right of way, regulated by
Requires positive Requires inaction of NCC 649;
action of the the owner out of
possessor (a possession or neglect (2) To bring an action to abate a public or
claimant) who is not of one with a right to private nuisance.
the owner bring his action

Applicable to all C.4. ACTION TO QUIET TITLE IF PLAINTIFF


Applicable to
kinds of rights, IS IN POSSESSION
ownership and other
whether real or
real rights When plaintiff is in possession of the
personal
property: the action to quiet title does not
Vests the property Vests the property prescribe.
and raise a new title and raise a new title The reason is that the owner of the property
in the occupant in the occupant or right may wait until his possession is
disturbed or his title is assailed before taking
Results in the Merely results in the steps to vindicate his right.
acquisition of loss of a real or
ownership or other personal right, or
real rights in a bars the cause of C.5. VOID CONTRACTS
person as well as the action to enforce said
loss of said right The action or defense for the declaration of
ownership or real the inexistence of a contract does not
rights in another prescribe. [NCC 1410]
The title is susceptible to direct as well as to
Can be proven under Should be collateral attack. [Ferrer v. Bautista, 1994]
the general issue affirmatively pleaded
without its being and proved to bar the
affirmatively pleaded action or claim of the C.6. ACTION TO DEMAND PARTITION
adverse party
No prescription shall run in favor of a co-
owner or co-heir against his co-owners or co-
heirs so long as he expressly or impliedly
C. NO PRESCRIPTION APPLICABLE
recognizes the co-ownership. [NCC 494]

C.1. BY OFFENDER
C.7. PROPERTY OF PUBLIC DOMINION
The offender can never acquire, through
Prescription, both acquisitive and extinctive,
prescription, movable properties possessed
does not run against the State in the exercise
through a crime.
of its sovereign function to protect its interest
EXCEPT with respect to its patrimonial
property which may be the object of
C.2. REGISTERED LANDS
prescription. [NCC 1113]
PD 1529 (Amending and codifying the laws
relative to registration of property and for
other purposes) C.8. PRESCRIPTION DISTINGUISHED
No title to registered land in derogation of FROM LACHES
the title of the registered owner shall be Prescription Laches
acquired by prescription or adverse
possession. Concerned with the Concerned with the
fact of delay effect of delay

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Prescription Laches Action for reconveyance


(1) Based on fraud: Prescribes 4 years from
A question or a Principally a question the discovery of fraud.
matter of time of inequity of
permitting a claim to (2) Based on implied or constructive trust: 10
be enforced, this years from the alleged fraudulent
inequity being registration or date of issuance of
founded on some certificate of title over the property.
subsequent change
in the condition or
the relation of the D.3. OTHER ACTIONS
parties

Statutory NOT statutory i. Action to foreclose mortgage:

Applies at law Applies at equity Prescribes after 10 years from the time the
obligation secured by the mortgage becomes
Cannot be availed of Being a defense of due and demandable
unless it is especially equity, need not be
pleaded as an specifically pleaded
affirmative allegation ii. Actions that Prescribe in 10 Years [NCC 1144]
(1) Upon a written contract
Based on a fixed time NOT based on a fixed
time (2) Upon an obligation created by law
(3) Upon a judgment
The computation of the period of prescription
D. PRESCRIPTION OR LIMITATION OF
of any cause or right of action, which is the
ACTIONS same as saying prescription of the action,
should start from the date the cause of action
accrues or from the day the right of the
D.1. TO RECOVER MOVABLE PROPERTIES
plaintiff is violated. [Nabus v. CA, 1991]
The action rescribes in 8 years from the time
the possession thereof is lost. [NCC 1140]
iii. Actions that Prescribe in 6 Years [NCC 1145]
However, the action shall not prosper if it is
brought after 4 years when the possessor has (1) Upon an oral contract
already acquired title by ordinary acquisitive (2) Upon a quasi-contract
prescription. [NCC 1132]
If the possessor acquired the movable in good
faith at a public sale, the owner cannot obtain iv. Actions that Prescribe in 4 Years [NCC 1145]
its return without reimbursing the price paid. (1) Upon an injury to the rights of the
plaintiff
D.2. TO RECOVER IMMOVABLES (2) Upon a quasi-delict
General Rule: Real actions prescribe after 30 But when the action arises from any act of
years [NCC 1141] any public officer involving the exercise of
powers arising from Martial Law including
Exception: The possessor has acquired the arrest, detention and/or trial of the
ownership of the immovable by ordinary plaintiff, the same must be brought within 1
acquisitive prescription through possession of year.
10 years. [NCC 1134]
v. Actions that Prescribe in One Year or Less
[NCC 1147]

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(1) For forcible entry within one year from communication signed by the payor would
date of dispossession thru FISTS or interrupt the running of the period of
unlawful detainer 1 year from date of last prescription [PNB v. Osete (1968)]
demand
(2) For defamation

vi. Other Actions that Prescribe in 1 Year under


the Civil Code
(1) To recover possession de facto [NCC 554
(4)]
(2) To revoke a donation on the ground of
ingratitude [NCC 769]
(3) To rescind or recover damages if
immovable is sold with non-apparent
burden or servitude [NCC 1560 (3,4)]
(4) To enforce warranty of solvency of debts
in assignment of credits [NCC 1629]

vii. 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]

viii. Interruption [NCC 1155]


Prescription of actions is interrupted when:
(1) They are filed before the court
(2) When there is a written extrajudicial
demand by the creditors
(3) When there is any written
acknowledgment of the debt by the
debtor
Civil actions are deemed commenced from
the date of the filing and docketing of the
complaint with the Clerk of Court. [Cabrera v.
Riano (1963)]
A written extrajudicial demand wipes out the
period that has already elapsed and starts
anew the prescriptive period [The Overseas
Bank of Manila v. Geraldez, (1979)]
Not all acts of acknowledgement of a debt
interrupt prescription. To produce such effect,
the acknowledgment must be “written”, so
that the payment, if not coupled with the
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XIII. LEASE ninety-nine years shall be valid.

• Special characteristics:
A. GENERAL CONCEPT OF LEASE o Essential purpose is to
transmit the use/enjoyment
A.1. CHARACTERISTICS OF EVERY of a thing
LEASE o Consensual
o Onerous
• Temporary duration o Price is fixed in relation to the
• Onerous period of use/enjoyment
• Price is fixed according to the o Temporary
duration of the contract (Tolentino)
• The subject matter must be within
A.2. KINDS OF LEASE (ART. 1642) the commerce of man.

1) Lease of things • Consumable things cannot be the


• Movables and immovables subject matter of lease, except:
o Consumable only for display or
• One of the parties binds himself
advertising (lease ad pompam et
to give to another the enjoyment
ostentionem)
or use of a thing for a price
o Goods are accessory to an
certain, and for a period which
industrial establishment, e.g.
may be definite or indefinite, but
coal in a factory (Art. 1645).
not to exceed 99 years (Art. 1643).
• Special provisions for lease of
• Main distinctions from:
rural and urban lands
o Sale: In lease, only use and
enjoyment is transferred, while in
2) Lease of work or services (Art. 1700-
sale, ownership is transferred; In
1712) 1
lease, price may be in money,
• One of the parties binds himself fruits, some other useful things,
to execute a piece of work or to or even some prestation, unlike
render to the other some service in sale where the price must be in
for a price certain, but the money or its equivalent.
relation of principal and agent o Usufruct: Lease is not a real right
does not exist between them (Art. except when lease is registered
1644). and for a period of more than 1
• Household help year, whereas usufruct is a real
• Contract of Labor (Art. 1713-1731) right; lessor need not be owner
• Lease of services of common of the thing and the use is
carrier (Art. 1732-1763) limited to that in the contract,
whereas a usufruct generally
B. LEASE OF THINGS includes all possible uses and
manner of enjoyment of
B.1. GENERAL CONCEPT property;
o Commodatum: Lease is
Art. 1643. In the lease of things, one of the essentially onerous, whereas a
parties binds himself to give to another the commodatum is essentially
enjoyment or use of a thing for a price certain, gratuitous
and for a period which may be definite or
indefinite. However, no lease for more than • Period of Lease
o Cannot be perpetual – there
must always be a period,
whether definite or indefinite.
1Excluded from Bar Coverage: 1) Household Service; 2)
Contract of Labor; 3) Contract for Piece of Work
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However, no lease for more than


99 years shall be valid. • Sublease – When in the contract of
o If at the end of the contract the lease of things there is no express
lessee should continue enjoying prohibition, the lessee may sublet the
the thing leased for fifteen days thing leased, in whole or in part,
with the acquiescence of the without prejudice to his responsibility
lessor, and unless a notice to the for the performance of the contract
contrary by either party has toward the lessor (Art. 1650).
previously been given, it is o Distinguished from assignment:
understood that there is an In assignment, there is a transfer
implied new lease, not for the to a third person of the rights
period of the original contract, and obligations arising from the
but for the time established in lease contract, whereas in a
articles 1682 and 1687. The other sublease, there is another
terms of the original contract contract of lease where the
shall be revived (Art. 1670). original lessee becomes a lessor,
o The lease of a piece of rural land, and the original lease contract
when its duration has not been remains binding on the lessee.
fixed, is understood to have been o Under the House Rental Law
for all the time necessary for the (R.A. No. 887), there is a
gathering of the fruits which the presumption that there would be
whole estate leased may yield in no sublease unless the lessor
one year, or which it may yield allows it.
once, although two or more years o Obligation of sublessee to lessor
have to elapse for the purpose – Without prejudice to his
(Art. 1682). obligation toward the sublessor,
o If the period for the lease has not the sublessee is bound to the
been fixed, it is understood to be lessor for all acts which refer to
from year to year, if the rent the use and preservation of the
agreed upon is annual; from thing leased in the manner
month to month, if it is monthly; stipulated between the lessor
from week to week, if the rent is and the lessee (Art. 1651).
weekly; and from day to day, if o For rents - The sublessee is
the rent is to be paid daily. subsidiarily liable to the lessor
However, even though a monthly for any rent due from the lessee.
rent is paid, and no period for the However, the sublessee shall not
lease has been set, the courts be responsible beyond the
may fix a longer term for the amount of rent due from him, in
lease after the lessee has accordance with the terms of the
occupied the premises for over sublease, at the time of the
one year. If the rent is weekly, the extra-judicial demand by the
courts may likewise determine a lessor. Payments of rent in
longer period after the lessee has advance by the sublessee shall
been in possession for over six be deemed not to have been
months. In case of daily rent, the made, so far as the lessor's claim
courts may also fix a longer is concerned, unless said
period after the lessee has stayed payments were effected in virtue
in the place for over one month of the custom of the place (Art.
(Art. 1687). 1652).

• Assignment of Lease – The lessee


cannot assign the lease without the B.2. RIGHTS AND OBLIGATIONS
consent of the lessor, unless there is a
stipulation to the contrary (Art. 1649).
i) Obligations of Lessor
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Art. 1654. The lessor is obliged: the property leased.


(1) To deliver the thing which is the
object of the contract in such a Art. 1662. If during the lease it should become
condition as to render it fit for the use necessary to make some urgent repairs upon
intended; the thing leased, which cannot be deferred
(2) To make on the same during the until the termination of the lease, the lessee
lease all the necessary repairs in is obliged to tolerate the work, although it
order to keep it suitable for the use to may be very annoying to him, and although
which it has been devoted, unless during the same, he may be deprived of a
there is a stipulation to the contrary; part of the premises.
(3) To maintain the lessee in the peaceful
and adequate enjoyment of the lease If the repairs last more than forty days the
for the entire duration of the contract. rent shall be reduced in proportion to the
time - including the first forty days - and the
Art. 1661. The lessor cannot alter the form of part of the property of which the lessee has
the thing leased in such a way as to impair been deprived.
the use to which the thing is devoted under
the terms of the lease. When the work is of such a nature that the
portion which the lessee and his family need
Art. 1664. The lessor is not obliged to answer for their dwelling becomes uninhabitable, he
for a mere act of trespass which a third may rescind the contract if the main purpose
person may cause on the use of the thing of the lease is to provide a dwelling place for
leased but the lessee shall have a direct the lessee.
action against the intruder.
Art. 1663. The lessee is obliged to bring to the
There is a mere act of trespass when the third knowledge of the proprietor, within the
person claims no right whatever. shortest possible time, every usurpation or
untoward act which any third person may
Art. 1653. The provisions governing warranty, have committed or may be openly preparing
contained in the Title on Sales, shall be to carry out upon the thing leased.
applicable to the contract of lease.
He is also obliged to advise the owner, with
In the cases where the return of the price is the same urgency, of the need of all repairs
required, reduction shall be made in included in No. 2 of Article 1654.
proportion to the time during which the
lessee enjoyed the thing. In both cases the lessee shall be liable for the
damages which, through his negligence, may
ii) Obligations of Lessee be suffered by the proprietor.
Art. 1657. The lessee is obliged:
(1) To pay the price of the lease If the lessor fails to make urgent repairs, the
according to the terms stipulated; lessee, in order to avoid an imminent danger,
(2) To use the thing leased as a diligent may order the repairs at the lessor’s cost.
father of a family, devoting it to the
use stipulated; and in the absence of Art. 1665. The lessee shall return the thing
stipulation, to that which may be leased, upon the termination of the lease, as
inferred from the nature of the thing he received it, save what has been lost or
leased, according to the custom of impaired by the lapse of time, or by ordinary
the place; wear and tear, or from an inevitable cause.
(3) To pay expenses for the deed of lease.
Art. 1667. The lessee is responsible for the
Art. 1658. The lessee may suspend the deterioration or loss of the thing leased,
payment of the rent in case the lessor fails to unless he proves that it took place without his
make the necessary repairs or to maintain the fault. This burden of proof does not apply
lessee in peaceful and adequate enjoyment of when the destruction is due to earthquake,

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flood, storm or other natural calamity. thereof.

Art. 1668. The lessee is liable for any The ejectment of tenants of agricultural lands
deterioration caused by members of his shall be governed by special laws.
household and by guests and visitors.
ii) Right to Ask for Writ of Preliminary
iii) Rights of Purchaser of Leased Land Mandatory Injunction in Unlawful Detainer
Art. 1676. The purchaser of a piece of land Cases
which is under a lease that is not recorded in Art. 1674. In ejectment cases where an appeal
the Registry of Property may terminate the is taken the remedy granted in Article 539,
lease, save when there is a stipulation to the second paragraph, shall also apply, if the
contrary in the contract of sale, or when the higher court is satisfied that the lessee's
purchaser knows of the existence of the lease. appeal is frivolous or dilatory, or that the
lessor's appeal is prima facie meritorious. The
If the buyer makes use of this right, the lessee period of ten days referred to in said article
may demand that he be allowed to gather the shall be counted from the time the appeal is
fruits of the harvest which corresponds to the perfected.
current agricultural year and that the vendor
indemnify him for damages suffered. Art. 539. Every possessor has a right to be
respected in his possession; and should he be
If the sale is fictitious, for the purpose of disturbed therein he shall be protected in or
extinguishing the lease, the supposed vendee restored to said possession by the means
cannot make use of the right granted in the established by the laws and the Rules of
first paragraph of this article. The sale is Court.
presumed to be fictitious if at the time the
supposed vendee demands the termination A possessor deprived of his possession
of the lease, the sale is not recorded in the through forcible entry may within ten days
Registry of Property. from the filing of the complaint present a
motion to secure from the competent court,
Art. 1677. The purchaser in a sale with the in the action for forcible entry, a writ of
right of redemption cannot make use of the preliminary mandatory injunction to restore
power to eject the lessee until the end of the him in his possession. The court shall decide
period for the redemption. the motion within thirty (30) days from the
filing thereof.

B.3. REMEDIES iii) Rescission or Specific Performance, plus


damages
i) Ejectment
Alternative remedies: Upon failure of the
Art. 1673. The lessor may judicially eject the
lessee to pay the stipulated rent at the
lessee for any of the following causes:
time agreed upon, the lessor may elect
(1) When the period agreed upon, or that
between the remedies of performance
which is fixed for the duration of
and rescission. In either case, he is
leases under Articles 1682 and 1687,
entitled to such damages as are
has expired;
appropriate. (Tolentino)
(2) Lack of payment of the price
stipulated;
B.4. LEASE OF RURAL AND URBAN LANDS
(3) Violation of any of the conditions
agreed upon in the contract;
(4) When the lessee devotes the thing 1) Distinction
leased to any use or service not • The purpose of the property is the
stipulated which causes the controlling factor in determining
deterioration thereof; or if he does not whether the land is rural or urban.
observe the requirement in No. 2 of • Urban: principal purpose if
Article 1657, as regards the use dwelling;
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Rural: principal purpose is lost after they have been separated from their
exploitation of the soil. stalk, root or trunk.

2) Useful improvements in good faith Article 1682. The lease of a piece of rural
made by lessee land, when its duration has not been fixed, is
understood to have been for all the time
Art. 1678. If the lessee makes, in good faith, necessary for the gathering of the fruits which
useful improvements which are suitable to the whole estate leased may yield in one year,
the use for which the lease is intended, or which it may yield once, although two or
without altering the form or substance of the more years have to elapse for the purpose.
property leased, the lessor upon the
termination of the lease shall pay the lessee Article 1683. The outgoing lessee shall allow
one- half of the value of the improvements at the incoming lessee or the lessor the use of
that time. Should the lessor refuse to the premises and other means necessary for
reimburse said amount, the lessee may the preparatory labor for the following year;
remove the improvements, even though the and, reciprocally, the incoming lessee or the
principal thing may suffer damage thereby. lessor is under obligation to permit the
He shall not, however, cause any more outgoing lessee to do whatever may be
impairment upon the property leased than is necessary for the gathering or harvesting and
necessary. utilization of the fruits, all in accordance with
the custom of the place.
With regard to ornamental expenses, the
lessee shall not be entitled to any Article 1684. Land tenancy on shares shall be
reimbursement, but he may remove the governed by special laws, the stipulations of
ornamental objects, provided no damage is the parties, the provisions on partnership and
caused to the principal thing, and the lessor by the customs of the place.
does not choose to retain them by paying
their value at the time the lease is Article 1685. The tenant on shares cannot be
extinguished. ejected except in cases specified by law.

Special Provisions for Lease of Urban Lands


3) Special Rules for Lease of Art. 1686. In default of a special stipulation,
Rural/Urban Lands the custom of the place shall be observed
with regard to the kind of repairs on urban
Special Provisions for Lease of Rural Lands property for which the lessor shall be liable.
Art. 1680. The lessee shall have no right to a In case of doubt it is understood that the
reduction of the rent on account of the repairs are chargeable against him.
sterility of the land leased, or by reason of the
loss of fruits due to ordinary fortuitous Article 1687. If the period for the lease has not
events; but he shall have such right in case of been fixed, it is understood to be from year to
the loss of more than one-half of the fruits year, if the rent agreed upon is annual; from
through extraordinary and unforeseen month to month, if it is monthly; from week to
fortuitous events, save always when there is a week, if the rent is weekly; and from day to
specific stipulation to the contrary. day, if the rent is to be paid daily. However,
even though a monthly rent is paid, and no
Extraordinary fortuitous events are period for the lease has been set, the courts
understood to be: fire, war, pestilence, may fix a longer term for the lease after the
unusual flood, locusts, earthquake, or others lessee has occupied the premises for over one
which are uncommon, and which the year. If the rent is weekly, the courts may
contracting parties could not have reasonably likewise determine a longer period after the
foreseen. lessee has been in possession for over six
months. In case of daily rent, the courts may
Article 1681. Neither does the lessee have any also fix a longer period after the lessee has
right to a reduction of the rent if the fruits are stayed in the place for over one month.
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Article 1688. When the lessor of a house, or


part thereof, used as a dwelling for a family,
or when the lessor of a store, or industrial
establishment, also leases the furniture, the
lease of the latter shall be deemed to be for
the duration of the lease of the premises.

C. TERMINATION
Lease may terminate by:
1) Expiration of the period
2) Total loss of the thing
3) Resolution of the right of lessor
(lessor-usufructuary and usufruct
expires)
4) Will of the purchaser or transferee of
things
5) Rescission

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CIVIL LAW
OBLIGATIONS

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1. As to Sanction
I. Obligations
(1) CIVIL OBLIGATION (or perfect
obligation) – give a right of action to
A. DEFINITION compel their performance; the sanction
is judicial process
Art. 1156. An obligation is a juridical necessity
to give, to do or not to do. (2) NATURAL OBLIGATION – midway
between civil and purely moral
obligations; there is a juridical tie, but
Art. 1156 provides the definition of civil performance is left to the will of the
obligations only (…juridical necessity); it does debtor; after voluntary fulfillment by the
not cover natural obligations. obligor, the sanction is the law
(3) MORAL OBLIGATION (or imperfect
A.1. ELEMENTS OF AN OBLIGATION obligation) – the sanction is conscience
or morality. These obligations are not
(1) ACTIVE SUBJECT (Obligee/Creditor): The judicially demandable. Moral duty is not
person who has the right or power to a valid consideration.
demand the prestation.
(2) PASSIVE SUBJECT (Obligor/Debtor): The
Natural Obligations
person bound to perform the prestation.
(3) PRESTATION (Object): The conduct Art. 1423. Obligations are civil or natural.
required to be observed by the Civil obligations give a right of action to
debtor/obligor (to give, to do, or not to compel their performance. Natural
do). obligations, not being based on positive law
but on equity and natural law, do not grant
(4) VINCULUM JURIS (Juridical or Legal Tie; a right of action to enforce their
Efficient Cause): That which binds or performance, but after voluntary fulfillment
connects the parties to the obligation. (De by the obligor, they authorize the retention
Leon) of what has been delivered or rendered by
reason thereof. Some natural obligations are
set forth in the following articles.
A.2. DIFFERENT KINDS OF PRESTATIONS
(1) TO GIVE: real obligation; to deliver either
(a) a specific or determinate thing, or (b) a Natural obligations are midway between civil
generic or indeterminate thing. obligations and purely moral obligations. It is
distinguished from moral in that it produces
(2) TO DO: positive personal obligation; some juridical effects (ex. Right to retention),
includes all kinds of work or service. but is distinguished from civil in that it does
(3) NOT TO DO: negative personal not give rise to an action to compel its
obligation; to abstain from doing an act; performance [Tolentino].
includes the obligation not to give.
Payment is voluntary when the debtor knows
Requisites of a Prestation: that the obligation is a natural one which
(1) Possible - physically and juridically; cannot be coerced nor recovered through
solutio indebiti.
(2) Assessable - Must have a possible
equivalent in money.
(3) Determinate, or at least, determinable; “Fulfillment” does not refer only to the
delivery of things, but also to the
performance of an act, the giving of security,
B. CLASSIFICATION OF OBLIGATIONS and the execution of a document.

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Payment by mistake by a debtor believing the


obligation to be a civil one, may be recovered
C. SOURCES OF OBLIGATION
on the principle of solutio indebiti [De leon].
Art. 1157. Obligations arise from:
(1) Law;
The contractor builds additional works, but is
paid the additional cost of such works. Payor (2) Contracts;
characterizes the payment as a "mistake,"
(3) Quasi-contracts;
and not a "voluntary" fulfillment under Art.
1423 of the Civil Code. Hence, it urges the (4) Acts or omissions punished by law; and
application of the principle of solution indebiti.
(5) Quasi-delicts.
However, it is not enough to prove that the
payments made by payor to contractor were
"not due" because there was no prior
C.1 LAW
authorization or agreement with respect to
additional works. There is a further Art. 1158. Obligations derived from law are
requirement that the payment by the debtor not presumed. Only those expressly
was made either through mistake or under a determined in this Code or in special laws are
cloud of doubt. In short, for the provisions on demandable, and shall be regulated by the
solutio indebiti to apply, there has to be precepts of the law which establishes them;
evidence establishing the frame of mind of and as to what has not been foreseen, by the
the payor at the time the payment was made provisions of this Book.
[Uniwide v Titan-Ikeda, G.R. No. 126619,
(2006)].
Obligations arise when imposed by the law
itself and cannot be presumed; examples
2. As to Subject Matter include obligation to pay taxes and obligation
(1) REAL – obligation to give to support one’s family.

(2) PERSONAL – obligation to do or not to


do C.2 CONTRACTS
Art. 1159. Obligations arising from contracts
3. As to the Affirmativeness or Negativeness of have the force of law between the contracting
the Obligation parties and should be complied with in good
faith.
(1) POSITIVE/AFFIRMATIVE – obligation to
give or to do
(2) NEGATIVE: obligation not to give or not Obligations arise from stipulation of the
to do parties; it has the force of law and should be
complied with in good faith in accordance
with the stipulations and terms; examples
4. As to Persons Obliged include obligation to pay loan by virtue of an
agreement.
(1) UNILATERAL – only one of the parties is
bound
(2) BILATERAL – both parties are bound C.3 QUASI-CONTRACTS

a. Reciprocal – performance by one is Art. 1160. Obligations derived from quasi-


dependent on the performance by contracts shall be subject to the provisions of
the other Chapter 1, Title XVII, of this Book.
b. Non-reciprocal – performance by
one is independent of the other Obligations arise from lawful, voluntary and
[Paras] unilateral acts enforceable to the end that no

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one shall be unjustly enriched or benefited at


the expense of another.
A single act or omission may give rise to
Kinds: different causes of action.
(a) Negotiorum gestio (Officious A concurrence of scope in regard to negligent
management) – voluntary acts does not destroy the distinction between
management of the property or the civil liability arising from a crime and the
affairs of another without knowledge responsibility for cuasi-delitos or culpa extra-
or consent of the latter; obligation is contractual. The same negligent act causing
to continue the same until damages may produce civil liability arising
termination of the affair and its from a crime... or create an action for cuasi-
incidents delito or culpa extra-contractual. [Barredo vs.
Garcia, G.R. No. L-48006, (1942)]
Exceptions:
(1) When property is not neglected
(2) If manager is tacitly authorized
[Art. 2144]
(b) Solutio indebiti (Payment not due) –
when something is received when
there is no right to demand it and
unduly delivered through mistake;
obligation is to return the undue
payment [Art. 2154]

C.4 ACTS OR OMISSIONS PUNISHABLE BY


LAW
Art. 1161. Civil obligations arising from
criminal offenses shall be governed by the
penal laws, subject to the provisions of Article
2177, and of the pertinent provisions of
Chapter 2, Preliminary Title, on Human
Relations, and of Title XVIII of this Book,
regulating damages.

Civil liability arises as a consequence of


criminal offense; examples include obligation
of a thief to return as stolen car and duty of
killer to indemnify victim’s heirs.

C.5 QUASI-DELICTS
Art. 1162. Obligations derived from quasi-
delicts shall be governed by the provisions of
Chapter 2, Title XVII of this Book, and by
special laws.

Obligations arise from damages caused to


another through an act or omission, there
being fault or negligence but no contractual
relations exist between the parties.
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II. Nature and Effect of Duties of the Debtor Rights of the Creditor
excluding fruits
Obligations (b) accessories – 5. To recover
things destined for damages in case of
the embellishment, breach, exclusive or
A. OBLIGATION “TO GIVE” use or preservation of in addition to specific
another thing of performance (1165;
more importance 1170)
A.1. TYPE OF THINGS:
5. To pay damages in
Limited case of breach (1170)
Specific Thing Generic Thing
Generic Thing
To Give a Generic Thing
Particularly Object is When the
designated designated generic 1. To take care of the 1. To ask that the
or physically only by its objects are thing (1163) obligation be
segregated class/ confined to a complied with (1165)
2. To deliver a thing
from all genus/ particular of the quality 2. To ask that the
others of the species. class. intended by the obligation be
same class parties taking into complied with by a
(Art.1460); consideration the third person at the
Identified by purpose of the expense of the debtor
individuality. obligation and other
3. To recover
Cannot be Can be Can be circumstances (1246)
damages in case of
substituted substituted substituted - Creditor cannot breach (1165)
against the by any of the by any of the demand a thing of
obligee’s will. same class same 4. Not to be
superior quality;
and same particular compelled to receive
neither can the
kind. class. a different one,
debtor deliver a thing
although of the same
of inferior quality.
value as, or more
A.2. RIGHTS AND DUTIES OF PARTIES: 4. To pay damages in valuable than that
case of breach (1170) which is due (1244)
Duties of the Debtor Rights of the Creditor
Note: No legal
To Give a Specific Thing accessory obligations
1. To preserve or take 1. To compel delivery arise until thing is
care of the thing due (1165) separated from
(1163) others of their kind.
[Reyes and Puno]
2. To deliver the 2. To fruits from the
thing itself (1165) time the obligation to
deliver arises (1164) B. OBLIGATION “TO DO” OR “NOT TO
3. To deliver the fruits
of the thing (1164) DO”
3. To accessions and
4. To deliver its
accessories, even if
accessions and B.1. RIGHTS AND DUTIES OF PARTIES:
not mentioned (1166)
accessories (1166)
4. Not to be Duties of the Debtor Rights of the Creditor
(a) accessions –
compelled to receive
everything which is To Do
a different one,
produced by a thing,
although of the same 1. To do it (1167) 1. To have the
or which is
value as, or more obligation executed
incorporated or 2. To shoulder the
valuable than that at the cost of the
attached thereto, cost of execution
which is due (1244) debtor (1167)
should he fail to do it
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Duties of the Debtor Rights of the Creditor Slight or Casual


Substantial Breach
Breach
(1167) 2. To recover
damages in case of 1. Total breach 1. Partial breach
3. To undo what has
breach (1170)
been poorly done 2. Amounts to non- 2. There is partial/
(1167) Note: The debtor performance, basis substantial
cannot be compelled for rescission performance in good
4. To pay damages in
to perform his (resolution) under faith
case of breach (1170)
obligation. The Art. 1191 and 3. Gives rise to
ultimate sanction of payment of damages liability for damages
civil obligations is only (1234)
indemnification of
damages. This would Art. 1234. If the obligation has been
be tantamount to substantially performed in good faith, the
involuntary servitude. obligor may recover as though there had
Not To Do been a strict and complete fulfillment, less
damages suffered by the obligee.
1. Not to do what 1. To ask to undo
should not be done what should not be
done, at the debtor’s In order that there may be substantial
2. To shoulder cost of
expense. (1168) performance of an obligation, there must
undoing what should
not have been done 2. To recover have been an attempt in good faith to
(1168) damages, where it perform, without any willful or intentional
would be physically departure therefrom. The deviation from the
3. To pay damages in obligation must be slight, and the omission
or legally impossible
case of breach (1170) or defect must be technical and unimportant,
to undo what should
not have been done, and must not pervade the whole or be so
because of : material that the object which the parties
intended to accomplish in a particular
a. the very nature of manner is not attained. The non-performance
the act itself; of a material part of a contract will prevent
b. rights acquired by the performance from amounting to a
third persons who substantial compliance… The compulsion of
acted in good faith; payment is predicated on the substantial
benefit derived by the obligee from the partial
c. when the effects of performance. Although compelled to pay, the
the acts prohibited obligee is nonetheless entitled to an
are definite in allowance for the sum required to remedy
character and will omissions or defects and to complete the
not cease even if the work agreed upon. [International Hotel Corp v
thing prohibited be Joaquin, G.R. 158361 (2013)]
undone.

The question of whether a breach of contract


C. BREACH is substantial depends upon the attending
Art. 1170. Those who in the performance of circumstances and not merely on the
their obligations are guilty of fraud (dolo), percentage of the amount not paid. [Cannu v
negligence (culpa), or delay (mora), and Galang, G.R. No. 139523, (2005)]
those who in any manner contravene the
tenor thereof, are liable for damages.
C.2. DEFAULT, DELAY, OR MORA
Failure to perform an obligation on time
C.1. COMPLETE FAILURE TO PERFORM
which constitutes breach of the obligation.
[De Leon]
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Note: It is insufficient that the law or


Rules on Default, Delay, or Mora obligation fixes a date for performance.
It must further state expressly that after
Reciprocal
Unilateral Obligations the period lapses, default will
Obligations
commence;
General Rule: Neither party incurs
in delay if the other Kinds of Delay; Requisites and Effects
“No demand, No
does not comply or is
delay.” (1) Mora Solvendi
not ready to comply
in a proper manner (2) Mora Accipiendi
The mere expiration with what is (3) Compensatio Morae
of the period fixed by incumbent upon him.
the parties is not From the moment Mora solvendi – Delay on the part of the
enough in order that one of the parties debtor to fulfil his obligation either to give (ex
the debtor may incur fulfills his obligation, re) or to do (ex persona).
in delay. delay by the other
begins. (1169 par. 3)
Those obliged to
deliver or to do
something incur in No delay if neither Requisites:
delay from the time performs.
the obligee judicially 1. Obligation must be liquidated, due and
or extrajudicially demandable
demands from them 2. Non-performance by the debtor within
the fulfillment of the period agreed upon
their obligation.(1169
par 1) 3. Demand, judicial or extra-judicial, by the
creditor, unless demand is not necessary
Exceptions: Demand under the circumstances enumerated in
is not necessary in Art 1169 par (2).
order that delay may
exist under the There is no mora solvendi in:
circumstances listed
in Art 1169 par 2, (1)- a) Negative obligations because delay is
(3). impossible [De Leon]
b) Natural obligations [Tolentino]
Demand may be judicial or extrajudicial.

When demand is not necessary in order that Effects:


delay may exist (Art. 1169 par 2) 1. The debtor is liable for damages. [Art.
(1) When demand would be useless, as when 1170]
the obligor has rendered it beyond his 2. For determinate objects, the debtor shall
power to perform. OR bear the risk of loss, even if the loss is due
(2) When from the nature and the to fortuitous events. [1165 par 3]
circumstances of the obligation it
appears that the designation of the time
when the thing is to be delivered or the Mora accipiendi – Delay on the part of the
service is to be rendered was a controlling creditor to accept the performance of the
motive for the establishment of the obligation
contract (time is of the essence); OR
(3) When the law or the obligation expressly Requisites:
so declare;
(1) Debtor offers performance.
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(2) Offer must be in compliance with the Art 1192 Art 2215
prestation as it should be performed.
“In case both parties “In contracts, quasi-
(3) Creditor refuses performance without have committed a contracts, and quasi-
just cause. breach of the delicts, the court may
obligation, the equitably mitigate
Effects: liability of the first the damages under
infractor shall be circumstances other
(1) The responsibility of the debtor is reduced equitably tempered than the case
to fraud and gross negligence. by the courts. xxx” referred to in the
(2) The debtor is exempted from risk of loss preceding article, as
of the thing, which is borne by the in the ff. instances:
creditor. (1) That the plaintiff
(3) The expenses incurred by the debtor for himself has
the preservation of the thing after the contravened the
mora shall be chargeable to the creditor. terms of the contract
xxx”
(4) If the obligation bears interest, the debtor
does not have to pay from the time of Second infractor not Does not appear to
delay. liable for damages at consider which
all; only the first infractor first
(5) The creditor is liable for damages. infractor is liable, but committed the
(6) The debtor may relieve himself of the with his liability breach
obligation by consigning the thing. mitigated
[Tolentino]
Articles 1192 and 2215 are not irreconcilably
Compensatio morae – Delay of both parties in conflicting. The plaintiff referred to in Article
reciprocal obligations. 2215(1) should be deemed to be the second
infractor, while the one whose liability for
damages may be mitigated is the first
Effects: infractor. Furthermore, the directions to
equitably temper the liability of the first
1. Delay of the obligor cancels delay of infractor in Articles 1192 and 2215 are both
obligee (and vice versa) hence it is as if subject to the discretion of the court, despite
there is no default. the word "shall" in Article 1192, in the sense
2. The liability of the first infractor shall be that it is for the courts to decide what is
equitably tempered by the courts. If it equitable under the circumstances. (Ong v
cannot be determined which of the Bognalbal, 2006)
parties first violated the contract, the
same shall be deemed extinguished, and
each shall bear his own damages. [Art. C.3. FRAUD (DOLO) IN THE
1192] PERFORMANCE OF THE OBLIGATION
Art. 1171. Responsibility arising from fraud is
demandable in all obligations. Any waiver of
Cessation of the Effects of Mora: an action for future fraud is void.
(1) Express or implied renunciation by the
creditor;
Fraud (dolo) is the deliberate or intentional
(2) Prescription. [Tolentino] evasion of the normal fulfilment of an
obligation. [De Leon]
Equitable Tempering under Art. 1192 vs. Under A waiver of future fraud is void but past fraud
Art. 2215 [Ong v Bognalbal, 2006] may be subject of a valid waiver by the
aggrieved party. [De Leon]
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Dolo Incidente – refers only to some


particular or accident of the obligation
Distinguished from Causal Fraud
In order that fraud may vitiate consent, it
Fraud in the Causal Fraud
must be the dolo causante and not merely the
(dolo causante and
Performance dolo incidente, inducement to the making of
dolo incidente)
the contract. The false representation was
[Art. 1170]
[Arts. 1338, 1344] used by plaintiff to get from defendant a
Definition bigger share of net profits. This is just
incidental to the matter in agreement...
The deliberate and Every kind of because despite plaintiff’s deceit, respondent
intentional evasion of deception for the would have still entered into the contract.
the normal fulfilment purpose of leading [Woodhouse vs. Halili, 1953]
of obligations. another party into
[International error and execute a
Corporate Bank v particular act. Requisites for Fraud to Vitiate a Contract:
Gueco, 2001]
(1) It must have been employed by one
When Present contracting party upon the other;
During the During the time of (2) It must have induced the other party to
performance of a birth or perfection of enter into the contract;
pre-existing the obligation
obligation (3) It must have been serious; and
Purpose (4) It must have resulted in damage or injury
to the party seeking annulment.
To evade normal To secure consent of [Tolentino]
fulfilment of another to enter the
obligation contract(dolo
causante) C.4. NEGLIGENCE (CULPA) IN THE
To influence a party PERFORMANCE OF THE OBLIGATION
regarding an incident Art. 1172. Responsibility arising from
to the contract (dolo negligence in the performance of every kind
incidente) of obligation is also demandable, but such
Result liability may be regulated by the courts,
Breach of the Vitiation of consent according to the circumstances.
obligation
Remedy The fault or negligence of the obligor consists
in the omission of that diligence which is
Obligee may recover Innocent party may required by the nature of the obligation and
damages (1344) annul the contract(if corresponds with the circumstances of the
dolo causante) persons, of the time and of the place. [Art.
Damages (both dolo 1173]
causante or
incidente)
Obligation Involved Diligence Required [De Leon]

Valid obligation Voidable obligation (1) By stipulation of the parties


(if dolo causante) (2) By law, in the absence of stipulation
Valid obligation (if
(3) Diligence of a good father of a family, if
dolo incidente)
both the contract and law are silent. (1173
par 2)
Dolo Causante – that which determines or is
the essential cause of the contract (4) Future negligence may be waived except
in cases where the nature of the
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obligation or the public requires another degree of care required of him.


standard of care (i.e. common carriers)
Note: Only future simple negligence Art. 2001. The act of a thief or robber, who
may be waived. Future gross has entered the hotel is not deemed force
negligence may not be waived since majeure, unless it is done with the use of
such negligence amounts to fraud. arms or through an irresistible force.

Art. 2002. The hotel-keeper is not liable for


Exceptions: compensation if the loss is due to the acts of
Common Carriers the guest, his family, servants or visitors, or
if the loss arises from the character of the
Art. 1733. Common carriers, from the nature things brought into the hotel.
of their business and for reasons of public
policy, are bound to observe extraordinary
diligence in the vigilance over the goods and Test of Negligence
for the safety of the passengers transported “Whether or not the defendant, in doing the
by them, according to all the circumstances alleged negligent act, used the reasonable
of each case. care and caution, which an ordinary and
Such extraordinary diligence in the vigilance prudent person would have used in the same
over the goods is further expressed in situation” If not, then he is guilty of
articles 1734, 1735, and 1745, Nos. 5, 6, and negligence. [Mandarin Villa Inc. vs. CA, 1996]
7, while the extraordinary diligence for the
safety of the passengers is further set forth Kinds of Civil Negligence
in articles 1755 and 1756.
Culpa Contractual Culpa Aquiliana
Hotel and Inn-keepers Negligence is merely Negligence is
Art. 1998. The deposit of effects made by incidental in the substantive and
travellers in hotels or inns shall also be performance of an independent.
regarded as necessary. The keepers of hotels obligation.
or inns shall be responsible for them as There is always a pre- There may or may
depositaries, provided that notice was given existing contractual not be a pre-existing
to them, or to their employees, of the effects relation. contractual
brought by the guests and that, on the part obligation.
of the latter, they take the precautions which
said hotel-keepers or their substitutes The source of The source of
advised relative to the care and vigilance of obligation of obligation is the
their effects. defendant to pay defendant’s
damages is the negligence itself.
Art. 1999. The hotel-keeper is liable for the breach or non-
vehicles, animals and articles which have fulfillment of the
been introduced or placed in the annexes of contract.
the hotel. Proof of the existence The negligence of the
of the contract and of defendant must be
Art. 2000. The responsibility referred to in its breach or non- proved.
the two preceding articles shall include the fulfillment is
loss of, or injury to the personal property of sufficient prima facie
the guests caused by the servants or to warrant recovery.
employees of the keepers of hotels or inns as
well as strangers; but not that which may Proof of diligence in Proof of diligence in
proceed from any force majeure. The fact the selection and the selection and
that travellers are constrained to rely on the supervision of the supervision of the
vigilance of the keeper of the hotels or employees is NOT employee is a
inns shall be considered in determining the available as defense. defense.
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which makes the normal fulfillment of the


obligation impossible. [De Leon]
Extent of Damages to be Awarded (1) Act of God: An accident, due directly or
exclusively to natural causes without
[Art. 2201]
human intervention, which by no amount
Good Faith Bad Faith of foresight, pains or care, reasonably to
have been expected, could have been
Obligor is liable for Obligor shall be
prevented.
those that are the responsible for all
natural and damages which may (2) Act of Man: Force majeure is a superior or
probable be reasonably irresistible force, which is essentially an
consequences of the attributed to the act of man; includes unavoidable
breach of the non-performance of accidents, even if there has been an
obligation, and the obligation. intervention of human element, provided
which the parties that no fault or negligence can be
have foreseen or imputed to the debtor.
Any waiver or
could have (3)
renunciation made
reasonably foreseen Liability in case of Fortuitous Event
in the anticipation of
at the time the
such liability is null No person shall be responsible for fortuitous
obligation was
and void. events, UNLESS:
constituted.
(1) expressly specified by law [Arts. 552 (2);
1942, 2147, 2148, 2159]
(2) liability specified by stipulation
C.5. CONTRAVENTION OF THE TENOR OF
THE OBLIGATION (3) the nature of the obligations requires
assumption of risk [Art. 1174]
This refers to a violation of the terms and
conditions stipulated in the obligation, which (4) debtor is guilty of concurrent or
must not be due to a fortuitous event or force contributory negligence
majeure. [De Leon] (5) debtor has promised to deliver the same
“In any manner contravenes the tenor” thing to two or more persons who do not
means any illicit act, which impairs the strict have the same interest [Art. 1165 par. 3]
and faithful fulfillment of the obligation, or (6) the thing is lost due to the obligor’s fraud,
every kind of defective performance. negligence, delay or contravention of the
[Tolentino] tenor of the obligation [Art. 1170]
(7) the obligation to deliver a specific thing
D. LEGAL EXCUSE FOR BREACH: arises from a crime [Art. 1268]
(1) “Fortuitous Event” or (8) the object is a generic thing, i.e. the
genus never perishes
(2) “Acts of the Creditor”
Note: ‘Genus nunquam perit’ only
Art. 1174. Except in cases expressly specified pertains to physical perishing. The genus
by the law, or when it is otherwise declared may still perish legally. [Labitag]
by stipulation, or when the nature of the
obligation requires the assumption of risk,
no person shall be responsible for those Requisites of Exemption Based on Force
events which could not be foreseen, or Majeure
which, though foreseen, were inevitable.
(1) The event must be independent of the
debtor’s will (fraud or negligence).
1. Fortuitous Event - a happening
independent of the will of the debtor and (2) The event must be unforeseeable or
inevitable.
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(3) The event renders it impossible for debtor E.3. RESCISSION (RESOLUTION IN
to fulfill his obligation in a normal RECIPROCAL OBLIGATIONS)
manner.
(4) The debtor must be free from any
Art. 1191. The power to rescind obligations is
negligence or participation in the
implied in reciprocal ones, in case one of the
aggravation of the injury to the creditor
obligors should not comply with what is
[Tolentino, 1987; De Leon, 2003]
incumbent upon him.
(5) It must be the sole cause, not merely a
The injured party may choose between the
proximate cause.
fulfillment and the rescission of the
obligation, with the payment of damages in
2. Act of Creditor: The debtor is also released either case. He may also seek rescission,
from liability when the non-performance of even after he has chosen fulfilment, if the
the obligation is due to the act of the creditor latter should become impossible.
himself. [Tolentino] The court shall decree the rescission
claimed, unless there be just cause
authorizing the fixing of a period.
E. REMEDIES AVAILABLE IN CASE OF This is understood to be without prejudice to
BREACH the rights of third persons who have
acquired the thing, in accordance with
articles 1385 and 1388 and the Mortgage
E.1. ACTION FOR SPECIFIC PERFORMANCE Law.
(IN OBLIGATION TO GIVE SPECIFIC THING)
The creditor has a right to compel the debtor Rescission
to perform the prestation.
The unmaking of a contract, or its undoing
from the beginning, and not merely its
termination [Pryce Corp v Pagcor, G.R. No.
Art. 1165, Par. 1 – When what is to be 157480, 2005]
delivered is a determinate thing, the
creditor, in addition to the right granted
him by Art. 1170 (indemnification for Right to Rescind
damages), may compel the debtor to
make the delivery. The power to rescind obligations is implied in
reciprocal ones, in case one of the obligors
should not comply with what is incumbent
upon him. The injured party may choose
between fulfillment and rescission of the
E.2. ACTION FOR SUBSTITUTED obligation, with payment of damages in
PERFORMANCE (IN OBLIGATION TO GIVE either case. The rescission on account of
GENERIC THING AND OBLIGATION TO DO) breach of stipulations is not predicated on
injury to economic interests of the party
plaintiff but on the breach of faith by the
Art. 1165, Par. 2 – If the thing is defendant, that violates the reciprocity
indeterminate or generic, he may ask that between the parties. [Universal Food
A third
the personbemay
obligation perform
complied withanother’s
at the
obligation Corporation v. CA, G.R. No. L-29155, 1970]
expense of to
thedeliver
debtor.a generic thing or an
obligation to do, unless it is a purely
personal act, at the expense of the debtor.
Effect of Rescission under Art 1191
Debtor cannot avoid obligation by paying
Extinguishes the obligatory relation as if it
damages if the creditor insists on
had never been created, the extinction having
performance.
a retroactive effect. Both parties must
surrender what they have respectively
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received and return each other as far as Applies only to Applies to either
practicable to their original situation. reciprocal obligations unilateral or
[Tolentino] where one party is reciprocal
Rescission may take place extrajudicially, by guilty of non- obligations even
declaration of the injured party. But if the fulfillment when the contract
debtor impugns the declaration of rescission, has been fully
fulfilled
it shall be subject to judicial determination. If
the debtor does not oppose the extrajudicial In some cases, court Court cannot grant a
declaration of rescission, such declaration may grant a term for period or term within
will produce legal effect. performance. which one must
The party who deems the contract violated comply.
may consider it resolved or rescinded, and act Non-performance by Non-performance by
accordingly, without previous court action, the other party is the other party is
but it proceeds at its own risk. For it is only important. immaterial.
the final judgment of the corresponding court
that will conclusively and finally settle
whether the action taken was or was not Distinguished from Termination [Pryce Corp v
correct in law. But the law definitely does not PAGCOR, 2005]
require that the contracting party who
believes itself injured must first file suit and
wait for a judgment before taking Rescission Termination
extrajudicial steps to protect its interest. [UP
v Delos Angeles, 1970] May be effected: May be effected by
mutual agreement or
Under Art 1191, the right to rescind an (a) by both parties by
by one party
obligation is predicated on the violation of mutual agreement,
exercising one of its
the reciprocity between parties, brought or
remedies as a
about by a breach of faith by one of them. (b) unilaterally by consequence of the
Rescission, however, is allowed only where one of them default of the other
the breach is substantial and fundamental to declaring a rescission
the fulfillment of the obligation. [Del Castillo without the consent
Vda de Mistica v Naguiat, 2003; Cannu v of the other if a
Galang, 2005]. legally sufficient
It will not be permitted in casual or slight ground exists or if a
breach. [Song Fo v. Hawaiian Philippines] decree of rescission is
applied for before the
courts
Distinguished from Rescission under Art. 1380 Requires mutual The parties are not
Rescission / Resolution restitution to restore restored to their
Rescission [Art. 1380] the parties to their original situation;
[Art. 1191]
original situation prior to termination,
Based on non- Based on lesion or parties are obliged to
performance or non- fraud upon creditors. comply with their
fulfillment of contractual
obligation. obligations
Action is instituted Action is instituted
only by the injured by either party or by
party. a third person.
Principal action, Subsidiary action, in E.4. DAMAGES, IN ANY EVENT
retaliatory in character. the absence of any Art. 1170. Those who in the performance of
other legal means to their obligations are guilty of fraud,
obtain reparation. negligence, or delay, and those who in any
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manner contravene the tenor thereof, are (4) The debtors assets are insufficient
liable for damages. (debtor is insolvent)
(5) The right of action is not purely personal
to the debtor

E.5. SUBSIDIARY REMEDIES OF


CREDITORS Previous approval of the court is not
necessary to exercise the accion subrogatoria.

(a) Accion Subrogatoria


(b) Accion Pauliana
Art. 1177. The creditors, after having
pursued the property in possession of the
debtor to satisfy their claims, may exercise Art. 1177. …they may also impugn the acts
all the rights and bring all actions of the Art.
which1381
the(par 3.) The
debtor mayfollowing contracts
have done are
to defraud
latter for the same purpose, save those rescissible:
them.
which are inherent in his person; they may (3) Those undertaken in fraud of creditors
also impugn the acts which the debtor may when the latter cannot in any other manner
have done to defraud them. collect the claims due them.

Right of the creditor to exercise all of the Rescission, which involves the right of the
rights and bring all the actions which his creditor to attack or impugn by means of
debtor may have against third persons. rescissory action any act of the debtor which
The creditors, after having pursued the is in fraud and to the prejudice of his rights as
property in possession of the debtor to satisfy creditor.
their claims, may exercise all the rights and
bring all the actions of the latter for the same
purpose, save those which are inherent in his Requisites [Cheng v CA, 2001]
person. [Art.1177] (1) There is a credit in favor of the plaintiff
In order to satisfy their claims against the prior to the alienation by the debtor
debtor, creditors have the ff. successive (2) The debtor has performed a subsequent
rights: contract conveying patrimonial benefit to
(1) To levy by attachment and execution third person/s.
upon all the property of the debtor, (3) The debtor’s acts are fraudulent to the
except those exempt from execution; prejudice of the creditor.
(2) To exercise all the rights and actions of (4) The creditor has no other legal remedy to
the debtor, except such are inherently satisfy his claim
personal to him; and
(5) The third person who received the
(3) To ask for the rescission of the contracts property is an accomplice to the fraud.
made by the debtor in fraud of their
rights.
An accion pauliana thus presupposes the
Requisites following:
(1) The person to whom the right of action 1) A judgment;
pertains must be indebted to the creditor 2) the issuance by the trial court of a writ of
(2) The debt is due and demandable execution for the satisfaction of the judgment,
and;
(3) The creditor must be prejudiced by the
failure of the debtor to collect his debts 3) the failure of the sheriff to enforce and
due him from third persons, either satisfy the judgment of the court.
through malice or negligence
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It requires that the creditor has exhausted the concerned, unless said payments were
property of the debtor. The date of the effected in virtue of the custom of the place.
decision of the trial court is immaterial. What
is important is that the credit of the plaintiff
antedates that of the fraudulent alienation by Vendor has right of action against possessor
the debtor of his property. After all, the whose right is derived from the vendee
decision of the trial court against the debtor
will retroact to the time when the debtor
became indebted to the creditor. [Cheng v CA, Art. 1608. The vendor may bring his action
2001] against every possessor whose right is
derived from the vendee, even if in the
second contract no mention should have
Accion Subrogatoria Accion Pauliana been made of the right to repurchase,
without prejudice to the provisions of the
Not necessary that Credit must exist Mortgage Law and the Land Registration
creditor’s claim is before the fraudulent Law with respect to third persons.
prior to the act [Tolentino]
acquisition of the
I. Laborer/materialsman has right of action
right by the debtor
Note: Commentators against owner of piece of work up to the
have conflicting amount owed by the latter to the contractor.
views on WoN new
debts contracted by
the debtor fall under Art. 1729. Those who put their labor upon or
the scope of accion furnish materials for a piece of work
pauliana. undertaken by the contractor have an action
against the owner up to the amount owing
No need for Fraudulent intent is
from the latter to the contractor at the time
fraudulent intent required if the
the claim is made. However, the following
contract rescinded is
shall not prejudice the laborers, employees
onerous
and furnishers of materials:
No period for Prescribes in 4 years
(1) Payments made by the owner to the
prescription from the discovery of
contractor before they are due;
the fraud
(2) Renunciation by the contractor of
any amount due him from the
(c) Other Specific Remedies owner.
This article is subject to the provisions of
special laws.
Accion Directa
Subsidiary liability of sublessee to the lessor
for rent due from the lessee. Article 1730. If it is agreed that the work shall
be accomplished to the satisfaction of the
proprietor, it is understood that in case of
Art. 1652. The sublessee is subsidiarily liable disagreement the question shall be subject
to the lessor for any rent due from the to expert judgment.
lessee. However, the sublessee shall not be
responsible beyond the amount of rent due
from him, in accordance with the terms of If the work is subject to the approval of a
the sublease, at the time of the extra-judicial third person, his decision shall be final,
demand by the lessor. except in case of fraud or manifest error.
Payments of rent in advance by the
sublessee shall be deemed not to have been
made, so far as the lessor's claim is

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Principal has right of action against


substitute of agent in cases when the agent is III. Kinds of Civil
liable for acts of appointed substitute
Obligations
Art. 1893. In the cases mentioned in Nos. 1
and 2 of the preceding article, the principal A. PURE OBLIGATIONS
may furthermore bring an action against the Art. 1179. Every obligation whose performance
substitute with respect to the obligations does not depend upon a future or uncertain
which the latter has contracted under the event, or upon a past event unknown to the
substitution. parties, is demandable at once.
Every obligation which contains a resolutory
Petitioner cannot invoke the credit of a condition shall also be demandable, without
different creditor to justify the rescission of prejudice to the effects of the happening of
the subject deed of donation, because the the event.
only creditor who may benefit from the
rescission is the creditor who brought the
action; those who are strangers to the action Its effectivity or extinguishment does not
cannot benefit from its effects. [Siguan vs. depend upon the fulfillment or non-
Lim, 1999] fulfillment of a condition or upon the
expiration of a term or period. A pure
obligation is IMMEDIATELY DEMANDABLE.

B. CONDITIONAL OBLIGATIONS

Art. 1181. In conditional obligations, the


acquisition of rights, as well as the
extinguishment or loss of those already
acquired, shall depend upon the happening
of the event which constitutes the condition.

A condition is a future and uncertain event.


This includes acquisition of proof/knowledge
of a past event unknown to the parties.

B.1. KINDS OF CONDITIONS


1) As to effect on the obligation
a. Suspensive
b. Resolutory
2) As to cause/ origin
a. Potestative
b. Casual
c. Mixed

(1) As to effect
(a) Suspensive – Obligation shall only be
effective upon the fulfillment of the
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condition [1181]. The obligee acquires (2) External contingency that is lawfully
a mere hope or expectancy, protected within the control of the obligor [Taylor v
by law, upon the constitution of the Uy Tieng, 1922]
obligation.
(3) Obligor, in preventing the fulfilment of
the condition, acts pursuant to a right
Before Fulfillment After Fulfillment
The demandability The obligation arises B.3. PRINCIPLE OF RETROACTIVITY IN
and acquisition/ or becomes effective. SUSPENSIVE CONDITIONS
effectivity of the
II. The obligor can be Art. 1187, par 1.The effects of a conditional
rights arising from
compelled to comply obligation to give, once the condition has
the obligation is been fulfilled, shall retroact to the day of
with what is
suspended.
incumbent upon him. the constitution of the obligation.
The creditor may Nevertheless, when the obligation imposes
bring the appropriate reciprocal prestations upon the parties, the
actions for the fruits and interests during the pendency of
preservation of his the condition shall be deemed to have
right. Anything paid been mutually compensated. If the
by mistake may be obligation is unilateral, the debtor shall
recovered [Art 1188]. appropriate the fruits and interests
However, this received, unless from the nature and
excludes fruits and circumstances of the obligation it should
interests. be inferred that the intention of the person
constituting the same was different.
Rationale: Obligation is constituted when its
B.2. DOCTRINE OF CONSTRUCTIVE
essential elements concur. The condition
FULFILLMENT OF SUSPENSIVE
imposed is only an accidental element.
CONDITIONS
This applies to consensual contracts only.
Art. 1186. The condition shall be deemed
This does not apply to real contracts which
fulfilled when the obligor voluntarily can only be perfected by delivery.
prevents its fulfillment.

B.4. EFFECTS OF THE HAPPENING OF


Suspensive condition is deemed fulfilled SUSPENSIVE CONDITIONS
when:
(1) Obligor intends to prevent obligee from To Give To Do/Not To Do
complying with the condition
If reciprocal, the In obligations to do
(2) Obligor actually prevents obligee from fruits and interests or not to do, the court
complying with the condition shall be deemed to shall determine the
The two requisites must concur. Mere have been mutually retroactive effect of
intention of the debtor to prevent the compensated a the condition that
happening of the condition, or to place matter of justice and has been complied
ineffective obstacles to its compliance, convenience with
without actually preventing the fulfillment, is [Art. 1187, par. 1] [Art. 1187, par. 2]
insufficient. [International Hotel Corporation v.
Joaquin, 2013] If unilateral, the The power of the
debtor shall court includes the
Doctrine does not apply to: appropriate the fruits determination of
(1) Resolutory conditions and interests whether or not there
received, unless from will be any
the nature and retroactive effect.
circumstance it This rule shall
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should be inferred likewise apply in


that the intention of obligations with a
the persons resolutory condition Exclusively Condition and obligation are
constituting the [Art. 1190 par. 3] upon the valid.
same was different. Creditor’s
[Art. 1187 par 1] Will
Condition and obligation are
void because to allow such
(b) Resolutory – The obligation is Exclusively
condition would be equivalent
demandable at once, without upon the
to sanctioning obligations
prejudice to the effects of the Debtor’s Will
which are illusory. It also
happening of the event (1179 par 2). in case of a
constitutes a direct
The rights are immediately vested to Suspensive
contravention of the principle
the creditor but always subject to the Condition
of mutuality of contracts.
threat or danger of extinction by the
(Art. 1182) There is nothing to demand
happening of the resolutory condition
until the debtor wishes to.
[Tolentino].
Exclusively Condition and obligation are
upon the valid because in such
Before Fulfillment After Fulfillment Debtor’s Will situation, the position of the
in case of a debtor is exactly the same as
Preservation of Whatever may have
Resolutory the position of the creditor
creditor’s rights [Art. been paid or
Condition when the condition is
1188, par. 1] also delivered by one or
suspensive. It does not render
applies to obligations both of the parties (Art. 1179,
the obligation illusory.
with a resolutory upon the constitution par. 2)
condition. of the obligation
shall have to be
returned upon the Defendant executed an endorsement saying
fulfillment of the that she’ll pay her debt if the house in which
condition (Art. 1190 she lives is sold. Such condition depended
par 1). There is no upon her exclusive will; thus, it is void.
return to the status [Osmeña vs. Rama, 1909]
quo. However, when
the condition is not
fulfilled, rights are The condition that payment should be made
consolidated and by Hermosa as soon as he receives funds
they become from the sale of his property in Spain is a
absolute in character. mixed condition. The condition implies that
the obligor already decided to sell the house
and all that was needed to make the
(2) As to Cause/Origin obligation demandable is that the sale be
consummated and the price thereof remitted
a. Potestative – The fulfillment of the
to the islands. There were still other
condition depends on the sole act or
conditions that had to concur to effect the
decision of a party.
sale, mainly that of the presence of a buyer,
b. Casual – The fulfilment of the ready, able and willing to purchase the
condition depends upon chance or property under the conditions set by the
upon the will of a third person. (1182) intestate. [Hermosa vs. Longara, 1953]
c. Mixed – The fulfilment of the
condition depends partly upon the
Loss, Deterioration, or Improvement of a
will of a party to the contract and
Specific Thing before Fulfillment of
partly upon chance and/or will of a
Suspensive Condition in Obligations to Give
third person.

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(Art. 1189) or of Resolutory Condition in damages.


Obligations to Do or Not to Do [Art. 1190 par 3]
Deterioration
Art. 1189.When the conditions have been
imposed with the intention of suspending V. Impairment toVI. be Creditor may choose
the efficacy of an obligation to give, the borne by the creditor. between bringing an
following rules shall be observed in case of action for rescission of
the improvement, loss or deterioration of the obligation OR
the thing during the pendency of the bringing an action for
condition: specific performance,
with damages in
(1) If the thing is lost without the fault of either case.
the debtor, the obligation shall be
extinguished; Improvement

(2) If the thing is lost through the fault of VII. Improvement atVIII.the Improvement by the
the debtor, he shall be obliged to pay debtor’s expense, the thing’s nature or by
damages; it is understood that the debtor shall ONLY time shall inure to the
thing is lost when it perishes, or goes have usufructuary benefit of the creditor.
out of commerce, or disappears in rights.
such a way that its existence is
unknown or it cannot be recovered;
Upon the happening of the resolutory
(3) When the thing deteriorates without condition, the rules of Article 1189 shall be
the fault of the debtor, the impairment applied to the party who is bound to return
is to be borne by the creditor; (i.e. the creditor in the original obligation).
(4) If it deteriorates through the fault of
the debtor, the creditor may choose
between the rescission of the Impossible Conditions
obligation and its fulfillment, with Art. 1183. Impossible conditions, those
indemnity for damages in either case; contrary to good customs or public policy
(5) If the thing is improved by its nature, and those prohibited by law shall annul the
or by time, the improvement shall obligation which depends upon them. If the
inure to the benefit of the creditor; obligation is divisible, that part thereof
which is not affected by the impossible
(6) If it is improved at the expense of the or unlawful condition shall be valid.
debtor, he shall have no other right
than that granted to the usufructuary. The condition not to do an impossible thing
shall be considered as not having been
agreed upon.
Art. 1190, par 3. As for the obligations to do
and not to do, the provisions of the second
paragraph of article 1187 shall be observed In testaments (Art. 873) and donations (Art.
as regards the effect of the extinguishment 727), an unlawful or impossible condition
of the obligation. does not annul the transaction. The condition
is merely deemed not written.

Positive and Negative Conditions


Without Debtor’s With Debtor’s
Fault/Act Fault/Act Positive [Art. 1184] Negative [Art. 1185]

Loss The condition that The condition that


some event happen some event will not
III. Obligation IV. is Obligation is at a determinate time happen at a
extinguished. converted into one of shall extinguish the determinate time
indemnity for obligation shall render the
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(a) as soon as the obligation effective contracting parties from the fulfillment of
time expires or from the moment their respective obligations during the period.
(b) if it has become
(a) the time
indubitable that
indicated has Term/Period and Condition Distinguished
the event will not
elapsed, or
take place.
(b) if it has become Term/Period Condition
evident that the
event cannot IX. Interval of time which
X. Fact or event which is
occur. is future and certain future and uncertain
Must necessarilyXI. May or may not
Where no date of fulfilment is stipulated, come, although it happen
condition must be fulfilled within a may not be known
reasonable time or time probably when
contemplated according to the nature of the
obligation [Art. 1185, par 2]. XII. No effect on existence
XIII. Gives rise to an
of the obligation, only obligation or
its demandability or extinguishes one
C. OBLIGATIONS WITH A PERIOD OR performance already existing
TERM XIV. No retroactive effect
XV. Has retroactive effect
unless there is an
agreement to the
Art. 1193. Obligations for whose fulfillment a contrary
day certain has been fixed, shall be
XVI. When it is left XVII. When it is left
demandable only when that day comes.
exclusively to the will exclusively to the will
Obligations with a resolutory period take of the debtor, the of the debtor, the very
effect at once, but terminate upon arrival of existence of the existence of the
the day certain. obligation is not obligation is affected
A day certain is understood to be that which affected
must necessarily come, although it may not
be known when.
Kinds of Period [Art 1193]
If the uncertainty consists in whether the day
will come or not, the obligation is (1) Ex die – period with a suspensive effect.
conditional, and it shall be regulated by the Obligation becomes demandable after
rules of the preceding Section. the lapse of the period.
(2) In diem – period with a resolutory effect.
Obligation becomes demandable at once
Art. 1180. When the debtor binds himself to but is extinguished after the lapse of the
pay when his means permit him to do so, the period.
obligation shall be deemed to be one with a
(c)
period, subject to the provisions of Article
1197.
Effect of Advance Payment or Delivery
Period or Term: Interval of time, which either Art. 1195. Anything paid or delivered before
suspends demandability or produces the arrival of the period, the obligor being
extinguishment. unaware of the period or believing that the
obligation has become due and
The period must be: future, certain, and
demandable, may be recovered, with the
possible.[Tolentino]
fruits and interests.
A fortuitous event does not interrupt the
running of the period. It only relieves the

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This is in contrast to payment by mistake of (3) When by his own acts he has impaired
the obligor before the occurrence of the said guaranties or securities after their
suspensive condition, where fruits and establishment, and when through a
interests may no longer be recovered. fortuitous event they disappear, unless he
immediately gives new ones equally
satisfactory;
Loss, Deterioration, or Improvement of the
(4) When the debtor violates any
Thing Before Period Expires
undertaking, in consideration of which
Art. 1194. In case of loss, deterioration or the creditor agreed to the period;
improvement of the thing before the arrival
(5) When the debtor attempts to abscond
of the day certain, the rules in Article 1189
[Art. 1198]
shall be observed.
(6) When required by law or stipulation;
(7) If parties stipulated an acceleration
clause [Tolentino]
Benefit of the Period The obligation immediately becomes due and
Art. 1196. Whenever in an obligation a period demandable even if the period has not yet
is designated, it is presumed to have been expired. The obligation becomes a pure one.
established for the benefit of both the [Tolentino]
creditor and the debtor, unless from the
tenor of the same or other circumstances it
should appear that the period has been When Courts May Fix Period
established in favor of one or of the other. Art. 1197. If the obligation does not fix a
period, but from its nature and the
circumstances it can be inferred that a
Period for the benefit of either creditor or period was intended, the courts may fix the
debtor duration thereof.
Creditor Debtor The courts shall also fix the duration of the
XVIII. Creditor may demand
XIX. Debtor may oppose period when it depends upon the will of the
the fulfillment or any premature debtor.
performance of the demand on the part of In every case, the courts shall determine
obligation at any time the obligee for the such period as may under the circumstances
but the obligor performance of the have been probably contemplated by the
cannot compel him to obligation, or if he so parties. Once fixed by the courts, the period
accept payment desires, he may cannot be changed by them.
before the expiration renounce the benefit
of the period. of the period by
performing his General Rule: The court is not authorized to fix
obligation in advance. a period for the parties [De Leon]

If the period is for the benefit of the debtor Exceptions: If the Court determines that one
alone, he shall lose every right to make use of of the 3 circumstances are present, it must
it decide the period “probably contemplated by
(1) When after the obligation has been the parties” [Araneta v. Phil. Sugar Estates,
contracted, he becomes insolvent, unless 1967]
he gives a guaranty or security for the (a) obligation does not fix a period, but
debt; from its nature and circumstances, it
(2) When he does not furnish to the creditor can be inferred that a period was
the guaranties or securities which he has intended
promised;
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(b) the period is void, such as when it XXII. May be compliedXXIII.


with May be complied with
depends upon the will of the debtor by performance of one by performance of
(c) If the debtor binds himself when his of the prestations another prestation in
means permit him to do so. which are alternatively substitution of that
due. which is due.

Art. 1197 does not apply to contract of XXIV. Choice of prestation


XXVI. Choice of prestation
services and to pure obligations. may pertain to debtor, pertains only to the
creditor, or third debtor.
The court, however, to prevent unreasonable person.
interpretations of the immediate
demandability of pure obligations, may fix a XXV.
reasonable time in which the debtor may pay XXVII. Loss/impossibilityXXX.
of Loss/impossibility of
[Tolentino] all prestations due to the prestation due to
The only action that can be maintained by the fortuitous event shall fortuitous event is
creditor under Art. 1197 is the action to ask extinguish the sufficient to
the courts to fix the term within which the obligation. extinguish the
debtor must comply with his obligation. The obligation.
XXVIII.
fulfillment of the obligation itself cannot be
demanded until after the court has fixed the XXIX. Loss/impossibility of
period for compliance therewith, and such one of the prestations Loss/impossibility of
period has arrived. does not extinguish the substitute/s does
the obligation. not extinguish the
Art. 1197 applies to a situation in which the obligation, provided
parties intended a period. [Where] no period the obligation which
was intended by the parties… Their mere is due subsists
failure to fix the duration of their agreement
does not necessarily justify or authorize the XXXI. Culpable loss of any
XXXII.
of Culpable loss of the
courts to do so. Based on the reasons [herein], the objects object which the
the agreement subsisted as long as the alternatively due debtor may deliver in
parents and the children mutually benefited before the choice is substitution before
from the arrangement. Effectively, there is a made may give rise to the substitution is
resolutory condition in such agreement. liability on the part of effected does not give
When a change in the condition occurs, the the debtor. rise to any liability on
agreement may be deemed terminated. the part of the
[Macasaet v Macasaet, 2004] debtor.

D. ALTERNATIVE OR FACULTATIVE D.1 ALTERNATIVE OBLIGATIONS:


OBLIGATIONS Definition
Several prestations are due but the
performance of one is sufficient. [De Leon]
Alternative and Facultative Conditions
Distinguished
Alternative Facultative Right of Choice [Art. 1200]
Obligations Obligations Belongs to the debtor, UNLESS—
XX. Of the two or more
XXI. Of the two or more (1) it is expressly granted to the creditor
prestations, several prestations, only one
are due. is due, while the (2) it is expressly granted to a third person
other/s may be
performed in
substitution of the Limitations to the right of choice [Tolentino]
one due.

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(1) indivisible (cannot choose part of one


prestation and part of another; See Art.
Debtor cannot make a choice, or delays
1199, par. 2)
selection
(2) impossible prestations
If through the creditor's acts the debtor
(3) unlawful prestations cannot make a choice according to the terms
of the obligation, the latter may rescind the
(4) those which could not have been the
contract with damages. [Art 1203]
object of the obligation
If the debtor does not select at the time when
performance should be effected, the choice
When choice shall produce effect can be made for him by the creditor by
applying Art. 1167 in obligations to do (debtor
Choice shall produce no effect except from
considered to have waived his right, subject
the time it has been communicated. [Art.
to equity considerations) [Tolentino].
1201]

Effect of notice of choice


Form of notice
The effect of the notice is to limit the
Notice of selection or choice may be in any
obligation to the object or prestation
form provided it is sufficient to make the
selected. The obligation is converted into a
other party know that the selection has been
simple obligation to perform the prestation
made. It can be:
chosen. Once a selection has been
(1) oral communicated, it is irrevocable [Ibid.]
(2) in writing
(3) tacit Instances when obligation is converted into a
(4) any other equivocal means [Tolentino] simple obligation

Selection may be implied from the fact of (1) The person with the right of choice has
performance [Tolentino] communicated his choice [Arts. 1201, 1205
par 1]
(2) Only one prestation is practicable [Art.
Consent of other party 1202]
The law does not require the other party to
consent to the choice made by the party
entitled to choose. The only possible Loss of Specific Things or Impossibility of
exception is when the debtor has chosen a Performance of Prestations in an Alternative
prestation which could not have been the Obligation
object of the obligation; the creditor’s
consent would bring about a novation of the
obligation [Ibid.]

Consent in obligations with various debtors If Debtor’s Choice [Art. 1204]


and creditors Fortuitous Event Debtor’s Fault
In a joint obligation w/ various debtors and All prestations lost/impossible
creditors, the consent of all is necessary to
make the selection effective. If the obligation Debtor is released Creditor shall have a
is solidary, and there is no stipulation to the from the obligation. right to indemnity for
contrary, the choice by one will be binding damages based on
personally upon him but not as to the others the value of the last
[Tolentino]. thing which
disappeared or
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service which become Only one prestation is agreed upon, but the
impossible, plus obligor may render another in substitution.
damages other than [Art. 1206]
the value may also be
awarded
Loss or deterioration of Substitute in
Some prestations lost/impossible Facultative Obligations [Art. 1206]
Debtor to perform Debtor to perform Before Substitution is After Substitution is
that which he shall that which the debtor Made Made
choose from among shall choose from
the remainder. among the If due to bad faith or The loss or
remainder, without fraud of obligor: deterioration of the
liability for damages. obligor is liable. substitute on
account of the
One prestation remains XXXIII.
obligor’s delay,
Debtor to perform Debtor to perform XXXIV. negligence, or fraud,
that which remains. that which remains. renders the obligor
XXXV.
liable because once
If due to the the substitution is
If Creditor’s Choice [Art. 1205] negligence of the made, the obligation
obligor: obligor is not is converted into a
Fortuitous Event Debtor’s Fault liable. simple one with the
All prestations lost/impossible substituted thing as
XXXVI.
the object of the
Debtor is released Creditor may claim obligation.
from the obligation. the price/value of
any of them, with
indemnity for E. DIVISIBLE AND INDIVISIBLE
damages. OBLIGATIONS
Some prestations lost/impossible
Debtor to deliver that Creditor may claim Divisible Obligations
which he shall any of those
choose from among subsisting without a Ones which are susceptible of partial
the remainder. right to damages OR performance, that is, the debtor can legally
price/value of the perform the obligation by parts and the
thing lost, with right creditor cannot demand a single performance
to damages. of the entire obligation [Tolentino]

One prestation remains


Debtor to perform Creditor may claim Indivisible Obligations
that which remains. the remaining thing Ones which cannot be validly performed in
without a right to parts [Tolentino]
damages OR the
price/value of the
thing lost with right Rules
to damages.
(1) Divisibility/indivisibility refers to the
performance of the prestation and not to
the thing which is the object thereof. The
thing may be divisible, yet the obligation
D.2 FACULTATIVE OBLIGATIONS: may be indivisible.
(2) When the obligation has for its object the
execution of a certain number of days of
Definition
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work, the accomplishment of work by If the principal obligation is void, the penal
metrical units, or analogous things which clause shall also be void. However, the nullity
by their nature are susceptible of partial of the penal clause does not carry with it the
performance, it shall be divisible [Art.1225, nullity of the principal obligation [Art.1230].
par. 2].
(3) Even though the object or service may be
Purposes of Penalty
physically divisible, an obligation is
indivisible if so provided by law or (1) Funcion coercitiva de garantia - to insure
intended by the parties. the performance of the obligation.
(4) In obligations not to do, divisibility or (2) Funcion liquidatoria - to liquidate the
indivisibility shall be determined by the amount of damages to be awarded to the
character of the prestation in each injured party in case of breach of the
particular case. principal obligation (compensatory).
(5) A joint indivisible obligation gives rise to (3) Funcion restrictamente penal - to punish
indemnity for damages from the time any the obligor in case of breach of the
one of the debtors does not comply with principal obligation (punitive).
his undertaking [Art. 1224].

Rules on Penalty
Effect
(1) The penalty shall substitute the
Creditor cannot be compelled to receive indemnity for damages and payment of
partially the prestation in which the interest in case of non-compliance [Art.
obligation consists; neither may the debtor 1226], UNLESS:
be required to make the partial payment [Art.
a. There is an express provision
1248], UNLESS:
to that effect
(1) The obligation expressly stipulates the b. The obligor refuses to pay the
contrary. penalty
c. The obligor is guilty of fraud
(2) The different prestations constituting the
in non-fulfillment
objects of the obligation are subject to
different terms and conditions. In this case, damages and interest aside
from the penalty may be awarded
(3) The obligation is in part liquidated and in
[Tolentino]
part unliquidated.
(2) Debtor cannot exempt himself from the
performance of the principal obligation
Cessation of Indivisibility
by paying the stipulated penalty UNLESS
a) By conversion of the obligation into this right has been expressly reserved for
an obligation to pay damages him [Art. 1227].
b) By novation of the obligation (3) Creditor cannot demand the fulfillment of
the principal obligation and demanding
c) By death of creditor or the debtor
the satisfaction of the penalty at the
(division among heirs of the
same time UNLESS the right has been
deceased)
clearly granted to him [Art. 1227]. A tacit
or implied grant is admissible.
F. OBLIGATIONS WITH A PENAL a. If the creditor chooses to demand
CLAUSE the satisfaction of the penalty, he
cannot afterwards demand the
fulfillment of the obligation.
Penal Clause b. If there was fault on the part of the
An accessory undertaking to assume greater debtor, creditor may demand not
liability in case of breach.
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only the satisfaction of the penalty (2) If the principal obligation has been
but also the payment of damages. irregularly complied with.
c. If the creditor has chosen to demand
(3) If the penalty is iniquitous or
the fulfillment of the principal
unconscionable, even if there has been no
obligation and the performance
performance.
thereof becomes impossible without
his fault, he may still demand the
satisfaction of the penalty.
The question of whether a penalty is
reasonable or iniquitous can be partly
Enforcement of the Penalty subjective and partly objective. Its resolution
would depend on such factor as, but not
The enforcement of the penalty can be
necessarily confined to, the type, extent and
demanded by the creditor only when the non-
purpose of the penalty, the nature of the
performance is due to the fault or fraud of the
obligation, the mode of breach and its
debtor. However, the creditor does not have
consequences, the supervening realities, the
to prove fault or fraud, since the non-
standing and relationship of the parties, and
performance gives rise to the presumption of
the like, the application of which, by and
fault. Thus, the burden of proof to show that
large, is addressed to the sound discretion of
non-performance was due to force majeure or
the court. [Ligutan v CA, G.R. No. 138677,
creditor’s acts lies with the debtor.
2002]
[Tolentino]

Proof of Actual Damage


Proof of actual damage suffered by the
creditor is NOT NECESSARY in order that the
penalty may be enforced [Art. 1228]
That proof of actual damages is not
necessary is applicable only to the general
rule stated in Art. 1226, where penalty shall
substitute for damages and interest, but not
to the exceptions where interest or damages
aside from the penalty may be awarded.

Liquidated damages
The penalty is exactly identical with what is
known as “liquidated damages” in Art. 2226.
In cases where there has been partial or
irregular compliance, as in this case, there
will be no substantial difference between a
penalty and liquidated damages insofar as
legal results are concerned and either may be
recovered without the necessity of proving
actual damages and both may be reduced
when proper. [Filinvest v CA, G.R. No.138980,
2005]

When Penalty may be Reduced [Art. 1229]:


(1) If the principal obligation has been partly
complied with.
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(5) When the solidary responsibility is


IV. Joint and Solidary imputed by a final judgment upon several
Obligations defendants

Presumption of Divisibility in Joint Obligations


A. JOINT OBLIGATIONS
Credit or debt shall be presumed to be
The whole obligation, whether capable of divided into as many equal shares as there
division into equal parts or not, is to be paid are creditors or debtors, the credits or debts
or performed by several debtors (joint being considered distinct from one another.
debtors) and/or demanded by several [Art.1208]
creditors (joint creditors).
Each debtor is liable only for a proportionate
part of the debt, and each creditor is entitled Principal Effects of Joint Liability [Tolentino]
only to a proportionate part of the credit. (1) Demand by one creditor upon the debtor,
[Tolentino] produces the effects of default only with
respect to the creditor who demanded
and the debtor on whom the demand was
Terms used for Joint Obligations made, but not with respect to others.
(1) Mancomunada (2) Interruption of prescription by the judicial
(2) Mancomunada simple demand of one creditor upon a debtor
does not benefit the other creditors nor
(3) Pro rata interrupt the prescription as to other
(4) “We promise to pay”, followed by debtors.
signatures of two or more persons (3) Vices of each obligation arising from the
personal defect of a particular debtor or
creditor do not affect the obligation or
Presumption of Joint Obligation right of the others.
An obligation is presumed joint if there is a (4) Insolvency of a debtor does not increase
concurrence of several creditors, or of several the responsibility of his co-debtors, nor
debtors, or of several creditors and debtors in does it authorize a creditor to demand
one and the same obligation [Art. 1207] anything from his co-debtors.
(5) Defense of res judicata is not extended
Exceptions: from one debtor to another.
(1) When the obligation expressly states that
there is solidarity A.1 JOINT DIVISIBLE OBLIGATION
(2) When the law requires solidarity, i.e. One where a concurrence of several creditors,
quasi-delicts (Art. 2194), joint payees by or of several debtors, or of several creditors
mistake (Art. 2157), acts under articles 19- and debtors, by virtue of which, each of the
22 if committed by two or more persons creditors has a right to demand, and each of
acting jointly the debtors is bound to render compliance
(3) When the nature of the obligation with his proportionate part of the prestation
requires solidarity which constitute the object of the obligation
(obligacion mancomunada).
(4) When a charge or condition imposed
upon heirs or legatees, and the testament
expressly makes the charge or condition A.2 JOINT INDIVISIBLE OBLIGATIONS
in solidum
Art. 1209. If the division is impossible, the
right of the creditors may be prejudiced only
by their collective acts, and the debt can be
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enforced only by proceeding against all the corresponding portion of the price of the
debtors. If one of the latter should be thing or of the value of the service in which
insolvent, the others shall not be liable for the obligation consists.
his share.

Summary: in case of breach


When there are several debtors or creditors,
Joint Divisible Joint Indivisible
but the prestation is indivisible, the
Obligations Obligations
obligation is joint, UNLESS solidarity has
been stipulated [Tolentino] In case of breach of In case of breach
obligation by one of where one of the joint
the debtors, debtors fails to
When Indivisible [Art. 1225] damages due must comply with his
(1) Obligations to give definite things be borne by him undertaking, the
alone. obligation can no
(2) Obligations not susceptible of partial longer be fulfilled or
performance performed. Thus, the
(3) Indivisibility is provided by law or action must be
intended by the parties, even though converted into one
object or service may be physically for indemnity for
divisible damages, with each
debtor liable only for
(4) In obligations not to do, when character his part in the price
of prestation requires indivisibility or value of the
prestation.

Plurality of Creditors in Joint Indivisible Joint Indivisible Obligations and Prescription

If one or some of the creditors demands the The act of a joint creditor which would
prestation, the debtor may legally refuse to ordinarily interrupt the period of prescription
deliver to them. He can insist that all the would not have an effect on prescription
creditors together receive the thing, and if because the indivisible character of the
any of them refuses to join the others, the obligation requires collective action of the
debtor may deposit the thing in court by way creditors. Hence, the act of one alone is
of consignation. [Tolentino] ineffective to interrupt prescription
[Tolentino]

Plurality of Debtors in Joint Indivisible


B. SOLIDARY OBLIGATIONS
The obligation can be performed by them
only by acting together. Hence all must be An obligation where there is concurrence of
sued. If any of the debtors is not willing to several creditors, or of several debtors, or of
perform, the prestation is converted into an several creditors and several debtors, by
indemnification for damages. [Tolentino] virtue of which, each of the creditors has the
right to demand, and each of the debtors is
bound to render, entire compliance with the
Failure of one debtor to perform in a joint prestation which constitutes the object of the
indivisible obligation gives rise to indemnity obligation (obligacion solidaria).
for damages Each debtor is liable for the entire obligation
Art. 1224. A joint indivisible obligation gives (solidary debtor or passive solidarity), and
rise to indemnity for damages from the time each creditor is entitled to demand the entire
anyone of the debtors does not comply with obligation (solidary creditor or active
his undertaking. The debtors who may have solidarity) [Tolentino]
been ready to fulfill their promises shall not
contribute to the indemnity beyond the
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Solidarity may exist although the creditors All debtors are liable Only the debtors
and the debtors may not be bound in the for breach guilty of breach of
same manner and by the same periods and committed by a co- obligation liable for
conditions. [Art. 1211] debtor damages
All debtors are Other debtors are
Terms used for Solidary Obligations proportionately not liable if one
liable for insolvency debtor is insolvent
(1) Mancomunada solidaria of one debtor
(2) Joint and several
(3) In solidum Kinds of Solidary Obligations
(4) Juntos o separamende As to Source
(5) “I promise to pay”, followed by signatures (1) Legal – imposed by law
of two or more persons
(2) Conventional – agreed upon by parties
(6) Individually and collectively
(3) Real – imposed by the nature of the
(7) Individually liable obligation
(8) Individually and jointly liable
As to Parties Bound
Distinguished from Indivisibility (1) Active (solidarity among creditors) – Each
Art. 1210. The indivisibility of an obligation creditor has the authority to claim and
does not necessarily give rise to solidarity. enforce the rights of all, with the resulting
Nor does solidarity of itself imply obligation of paying everyone what
indivisibility. belongs to him.
(2) Passive (solidarity among debtors) – Each
debtor can be made to answer for the
Solidarity Indivisibility others, with the right on the part of the
debtor-payor to recover from the others
Refers to the legal Refers to the
their respective shares.
tie (vinculum juris), prestation that is not
and consequently to capable of partial (3) Mixed (solidarity among creditors and
the subjects or performance debtors) – Solidarity is not destroyed by
parties of the the fact that the obligation of each debtor
obligation is subject to different conditions or
periods. The creditor can commence an
More than one Exists even if there is
action against anyone of the debtors for
creditor or more only one creditor
the compliance with the entire obligation
than one debtor and/or one debtor
minus the portion or share which
(plurality of subjects)
corresponds to the debtor affected by the
Each creditor may Each creditor cannot condition or period.
demand the entire demand more than
prestation and each his share and each
debtor is bound to debtor is not bound As to Uniformity
pay the entire to pay more than his (1) Uniform – Parties are bound by the same
prestation share conditions or terms
Effect of breach: Effect of breach: (2) Non-uniform – Parties are bound by
Solidarity remains Obligation is different conditions or terms
converted to
indemnity for
damages Active Solidary Obligation (among creditors)

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Art. 1214. The debtor may pay any one of the Art. 1216. The creditor may proceed against
solidary creditors; but if any demand, any one of the solidary debtors or some or
judicial or extrajudicial, has been made by all of them simultaneously. The demand
one of them, payment should be made to made against one of them shall not be an
him. obstacle to those which may subsequently
be directed against the others, so long as
the debt has not been fully collected.
A relationship of mutual agency is created
among co-creditors.
Art. 1217. Payment made by one of the
solidary debtors extinguishes the obligation.
Effects of Active Solidarity [Tolentino] If two or more solidary debtors offer to pay,
(1) Death of solidary creditor does not the creditor may choose which offer to
transmit solidarity to his heirs but rather accept.
to all of them taken together (joint) He who made the payment may claim from
(2) Each represents the other in receiving his co-debtors only the share which
payment and all other advantageous acts corresponds to each, with the interest for the
(i.e. interrupt prescription and render the payment already made. If the payment is
debtor in default for the benefit of all made before the debt is due, no interest for
creditors) the intervening period may be demanded.

(3) Each one of the solidary creditors may do When one of the solidary debtors cannot,
whatever may be useful to the others, but because of his insolvency, reimburse his
not anything which may be prejudicial to share to the debtor paying the obligation,
the latter. [Art. 1212] such share shall be borne by all his co-
debtors, in proportion to the debt of each.
(4) One creditor does NOT represent all
others in acts such as novation (even if
advantageous), compensation and Art. 1222. A solidary debtor may, in actions
remission. In this case, even if debtor is filed by the creditor, avail himself of all
released, the other creditors can still defenses which are derived from the nature
enforce their rights against the creditor of the obligation and of those which are
who made the novation, compensation or personal to him, or pertain to his own share.
remission [Art. 1215, par. 2] With respect to those which personally
(5) The creditor who collects the debt, shall belong to the others, he may avail himself
be liable to the others for the share in the thereof only as regards that part of the debt
obligation corresponding to them. [Art. for which the latter are responsible.
1215, par 2]
(6) The credit is divided equally among them, A relationship of mutual guaranty is created
unless agreement to the contrary. among co-debtors.
(7) Debtor may pay any one of the solidary
creditors; but if any demand, judicial or
extrajudicial, has been made by one of Effects of Passive Solidarity [Tolentino]
them, payment should be made to him (1) Each debtor can be required to pay the
who demanded [Art. 1214] entire obligation, but after payment he
can recover from the co-creditors their
A solidary creditor cannot assign his rights respective shares
without the consent of the others [Art. 1213]. (2) Each debtor may set up his own claims
Such an assignment produces no effect against the creditor as payment of the
whatsoever obligation
(3) Remission of the entire debt affects all
Passive Solidary Obligation debtors, but when remission is limited to
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the share of one debtor, the other debtors defendant debtor from liability to the
are still liable for the balance of the creditor
obligation
(3) Those pertaining to his own share
a. The remission of the whole
(4) Those personally belonging to other
obligation, obtained by one of
co-debtors but only as regards that
the solidary debtors, does not
part of the debt for which the latter are
entitle him to reimbursement
responsible.
from his co-debtors. [Art.
1220]
b. The remission made by the Comparing demand upon Solidary Debtor and
creditor of the share which Payment by a Solidary Debtor
affects one of the solidary
Demand Upon a Payment by a
debtors does not release the
Solidary Debtor Solidary Debtor
latter from his responsibility
towards the co-debtors, in The demand made Full payment made
case the debt had been against one of them by one of the solidary
totally paid by anyone of shall not be an debtors extinguishes
them before the remission obstacle to those the obligation [Art.
was effected. [Art. 1219] which may 1217].
subsequently be
(4) All debtors are liable for the loss of the
directed against the
thing due, even if only one of them is at
others so long as the
fault, or after incurring delay it is lost by
debt has not been
fortuitous event
fully collected [Art.
(5) Interruption of prescription as to one 1216].
debtor affects all others, but renunciation
of prescription already had does not The creditor may If two or more
prejudice the others. (Reason: proceed against any solidary debtors offer
prescription extinguishes the mutual one of the solidary to pay, the creditor
representation among solidary debtors) debtors or all may choose which
simultaneously [Art. offer to accept [Art.
(6) Interests due by delay of one is borne by 1216]. 1217].
all of them
A creditor’s right to The solidary debtor
proceed against the who made the
Defenses Available to a Solidary Debtor [Art. surety exists payment shall have
1222] independently of his the right to claim
(1) Those derived from the nature of the right to proceed from his co-debtors
obligation against the principal the share which
corresponds to them
a. Defenses inherent in an obligation with interest,
include non-existence of the obligation UNLESS barred by
because of absolute simulation or illicit prescription or
object, nullity due to defect in capacity or illegality [Art. 1218].
consent of all debtors, unenforceability,
non-performance of suspension condition
or non-arrival of period, extinguishment Art 2047 specifically calls for the application
of the obligation, res judicata, and of the provisions on solidary obligations to
prescription. suretyship contracts. In particular, Art 1217
(2) Those personal to him recognizes the right of reimbursement from a
co-debtor in favor of the one who paid (i.e.,
a. Personal defenses such as minority, the surety). In contrast, Art 1218 is definitive
insanity, fraud, violence, or intimidation on when reimbursement is unavailing, such
will serve as a complete exemption of the that only those payments made after the

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obligation has prescribed or became illegal event the payment of damages and
shall not entitle a solidary debtor to after one interest, without prejudice to
reimbursement. [Diamond Builders v Country incurred their action against the guilty or
Bankers, 2007] in delay negligent debtor.

PASSIVE SOLIDARITY SURETYSHIP


the solidary debtor and the surety, answers
for a debt which is not properly his own
both may demand reimbursement from the
debtor personally bound in the prestation
paid
liable, not only for a surety does not
the debt of another incur liability unless
but also for one the principal debtor
properly his own is held liable
the one who paid the surety who paid
may claim the obligation is
reimbursement from entitled to be
his co-debtors for the indemnified by the
share which principal debtor with
corresponds to each the right to
subrogation
an extension granted an extension granted
by the creditor to one to the principal
of the solidary debtor without the
debtors without the consent of the surety
consent of the other would lead to the
solidary debtors dissolution of the
would not release the suretyship
latter from their
obligations

Loss of the thing or impossibility of


performance of the passive/mixed solidary
obligation [Art. 1221]
Without
fault of The obligation shall be
the extinguished.
debtors
All debtors shall be responsible
With fault to the creditor, for the price and
of any of the payment of damages and
the interest, without prejudice to
debtors their action against the guilty or
negligent debtor.
Through a All debtors shall be responsible
fortuitous to the creditor, for the price and
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V. Extinguishment of In obligations to do or not to do, an act or


forbearance cannot be substituted by
Obligations another act or forbearance against the
obligee's will. (1166a)

MODES OF EXTINGUISHING OBLIGATIONS


Exceptions to Art. 1244:
Art. 1231. Obligations are extinguished: (1) If the obligation is facultative
(1) By payment or performance; (2) If the creditor agrees (Dation in payment)
(2) By the loss of the thing due; (3) Substantial Performance by Debtor
(3) By the condonation or remission of the (Creditor only has a right to damages)
debt; [Art 1234]
(4) By the confusion or merger of the rights If the obligation has been substantially
of creditor and debtor; performed in good faith, the obligor may
(5) By compensation; recover as though there had been a strict
and complete fulfillment, less damages
(6) By novation.
suffered by the obligee.
Other causes of extinguishment of
obligations, such as annulment, rescission,
fulfillment of a resolutory condition, and Requisites:
prescription, are governed elsewhere in this
a. There must be substantial performance
Code.
(its existence depends upon the
circumstances of each particular case);
and
A. PAYMENT OR PERFORMANCE b. The obligor must be in good faith [De
1. Payment Leon]
(1) The delivery of money OR
(4) When the obligee accepts the
(2) The performance of an obligation performance, knowing its incompleteness
[Art.1232] or irregularity, and without expressing
any protest or objection, the obligation is
2. Object of Payment deemed fully complied with. [Art. 1235]

Principle of Integrity of Payment Necessity of Complete Performance


(1) Integrity of Prestation Art. 1248. Unless there is an express
Art. 1233. A debt shall not be understood to stipulation to that effect, the creditor cannot
have been paid unless the thing or service in be compelled partially to receive the
which the obligation consists has been prestations in which the obligation consists.
completely delivered or rendered, as the Neither may the debtor be required to make
case may be. partial payments.
However, when the debt is in part liquidated
and in part unliquidated, the creditor may
(2) Identity of Prestation demand and the debtor may effect the
Article 1244. The debtor of a thing cannot payment of the former without waiting for the
compel the creditor to receive a different liquidation of the latter.
one, although the latter may be of the same
value as, or more valuable than that which is
due. 3. By whom

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Payor must have free disposal of the thing penalty.


due and capacity to alienate it. [Art. 1239]
Free disposal of the thing due means that the
thing to be delivered must not be subject to Articles 1236 and 1237 merely lay down a
any claim or lien or encumbrance of a third presumption. However, by virtue of the
person. parties’ freedom to contract, the parties could
stipulate otherwise. But such mutual
Capacity to alienate means that the person is agreement, being an exception to presumed
not incapacitated to enter into contracts (Arts. course of events as laid down by Articles 1236
1327, 1329.) and for that matter, to make a and 1237, must be adequately proven
disposition of the thing due. [De Leon] [Carandang v de Guzman, 2006].
(1) The debtor or his duly authorized agent
(2) The debtor’s heir or successor in interest Reimbursement & Subrogation Distinguished
(3) A third person interested in the Reimbursement Subrogation
fulfillment of the obligation (i.e. co-
debtor, guarantor) whether the debtor Personal action to Includes
consents to it or not, and even without recover amount paid reimbursement, but
debtor’s knowledge [Art 1302]. This also the exercise of
includes payment by a joint debtor other rights attached
[Monte de Piedad v Fernando Rodrigo, to the original
1936] but not a solidary co-debtor. obligation (e.g.
(4) A third person not interested in the guaranties,
obligation; but the creditor is not bound securities)
to accept payment by him, unless there
is a stipulation to the contrary [Art 1236].
Art. 1238. Payment made by a third person
who does not intend to be reimbursed by the
Note: When payment is made by a 3rd person debtor is deemed to be a donation, which
without the consent of the debtor, such requires the debtor's consent. But the
payment has NO EFFECT on the running of payment is in any case valid as to the creditor
the prescriptive period. [Tolentino] who has accepted it.

Payment by a third person


4. To whom
Art. 1236. The creditor is not bound to accept
payment or performance by a third person (1) The person in whose favor the obligation
who has no interest in the fulfillment of the has been constituted; or
obligation, unless there is a stipulation to (2) His successor in interest; or
the contrary.
(3) Any person authorized to receive it [Art.
Whoever pays for another may demand from 1240]
the debtor what he has paid, except that if
he paid without the knowledge or against
the will of the debtor, he can recover only Payment to a person who is incapacitated to
insofar as the payment has been beneficial administer his property shall be valid:
to the debtor.
(1) if he has kept the thing delivered, OR
(2) insofar as the payment has been
Art. 1237. Whoever pays on behalf of the beneficial to him. [Art. 1241 par 1]
debtor without the knowledge or against the
will of the latter, cannot compel the creditor
to subrogate him in his rights, such as those Payment made in good faith to any person in
arising from a mortgage, guaranty, or possession of the credit shall release the
debtor. [Art. 1242]
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Payment made to the creditor by the debtor tender in the Philippines.


after the latter has been judicially ordered to
The delivery of promissory notes payable to
retain the debt shall not be valid. [Art. 1243]
order, or bills of exchange or other
mercantile documents shall produce the
Payment to a third person [Art. 1241 par 2] effect of payment only when they have been
cashed, or when through the fault of the
Payment made to a third person shall also be creditor they have been impaired.
valid insofar as it has redounded to the
benefit of the creditor. In the meantime, the action derived from the
original obligation shall be held in the
General Rule: Proof that such payment has abeyance.
redounded to the benefit of the creditor is
required.
Exceptions: Legal Tender:

(1) If after the payment, the third person Such currency which in a given jurisdiction
acquires the creditor's rights can be used in the payment of debts, and
(SUBROGATION); which cannot be refused by the creditor.

(2) If the creditor ratifies the payment to the When payment not in legal tender is accepted
third person (RATIFICATION); by the creditor:

(3) If by the creditor's conduct, the debtor 1. Demandability of obligation is suspended


has been led to believe that the third 2. Produces the effect of payment when:
person had authority to receive the
payment (ESTOPPEL). [Art. 1241] a. It is encashed; or
b. It was impaired due to creditor’s
fault. [Tolentino]
5. Where: Place of Payment
(1) In the place designated in the obligation.
Extraordinary inflation or deflation
(2) In the absence of stipulation—
Art. 1250. In case an extraordinary inflation
a. If obligation is to deliver a or deflation of the currency stipulated
determinate thing: wherever the should supervene, the value of the currency
thing might be at the moment the at
obligation was constituted. the time of the establishment of the
b. In any other case: domicile of debtor obligation shall be the basis of payment,
[Art. 1251] unless there is an agreement to the contrary.

6. When: Time of Payment


Upon demand, EXCEPT- For extraordinary inflation (or deflation) to
affect an obligation, the following requisites
(1) When time is of the essence must be proven:
(2) When the debtor loses the benefit of the (1) an official declaration of extraordinary
period inflation or deflation from the BSP
(3) When the obligation is reciprocal (2) obligation was contractual in nature; and
(3) parties expressly agreed to consider the
7. Form of Payment effects of the extraordinary inflation or
deflation [Equitable PCI Bank v Ng
Art. 1249. The payment of debts in money Sheung, December 19 2007]
shall be made in the currency stipulated, (Note: the 3rd requisite does not folow the
and if it is not possible to deliver such scheme of Article 1250)
currency, then in the currency which is legal

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A.1 APPLICATION OF PAYMENTS [Reparations Commission vs. Universal Deep


Sea Fishing Corp, 1978]
Designation of the debt to which should be
applied a payment made by a debtor who The debtor’s right to apply payment can be
owes several debts to the same creditor. waived and even granted to the creditor if the
debtor so agrees [Premiere Development v
Central Surety, 2009]
Requisites:
(1) There is a plurality of debts
Limitations:
(2) Debts are of the same kind
(3) Debts are owed to the same creditor and 1. Right of creditor to refuse partial payment
by the same debtor [Art. 1248]
(4) All debts must be due, UNLESS parties so
2. Rule on satisfaction of interest before the
stipulate, or when application is made by
Principal. [Art. 1453]
the party for whose benefit the term has
been constituted 3. Debtor cannot apply payment to a debt
(5) Payment made is not sufficient to cover which is not yet liquidated
all debts [Art. 1252]
4. He cannot choose a debt with a period
(established for the creditor’s benefit) before
the period has arrived.
Rules on Application of Payments
5. Stipulation as to preference of payment.
(1) Preferential right of debtor - debtor has
[Tolentino]
the right to select which of his debts he is
paying.
(2) The debtor makes the designation at the A.2. DATION IN PAYMENT
time he makes the payment.
Delivery and transmission of ownership of a
(3) If not, the creditor makes the application, thing by the debtor to the creditor as an
by so stating in the receipt that he issues, accepted equivalent of the performance of
unless there is cause for invalidating the the obligation (dacion en pago).
contract.
(4) If neither the creditor nor debtor exercises
Requisites:
the right to apply, or if the application is
not valid, the application is made by (1) Existence of a money obligation
operation of law. (2) Alienation to the creditor of a property by
(5) If debt produces interest, the payment is the debtor with the creditor’s consent
not to be applied to the principal unless (3) Satisfaction of the money obligation
the interests are covered.
(6) When no application can be inferred from
the circumstances of payment, it is A.3. PAYMENT BY CESSION
applied: (a) to the most onerous debt of Special form of payment where the debtor
the debtor; or (b) if debts due are of the assigns/abandons ALL his property for the
same nature and burden, to all the debts benefit of his creditors in order that from the
in proportion. proceeds thereof, the latter may obtain
(7) Rules of application of payment may not payment of their credits.
be invoked by a surety or solidary Requisites:
guarantor.
(1) There is a plurality of debts
Rules on application of payment cannot be
made applicable to a person whose (2) There is a plurality of creditors
obligation as a mere surety is both contingent (3) Partial or relative insolvency of debtor
and singular. There must be full and faithful
compliance with the terms of the contract.
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(4) Acceptance of the cession by the creditors payment or because of some circumstances
[Art. 1255] which render direct payment to the creditor
impossible or inadvisable.
Debtor is released only for the net proceeds (1) Principal act which constitutes a form
unless there is a stipulation to the contrary. of payment
(2) Judicial in character
Cession and Dation Distinguished
Requisites of consignation
Cession Dacion en pago
(1) There is a debt due
Plurality of creditors One creditor
(2) Consignation is made because of some
Debtor must be Debtor not legal cause
partially or relatively necessarily in state
insolvent of financial difficulty a. There was tender of payment and
creditor refuses without just cause
Universality of Thing delivered is to accept it
property is ceded equivalent of b. Instances when consignation
performance alone would suffice as provided
Merely releases Extinguishes under Art. 1256
debtor for the net obligation to the (3) Previous notice of consignation was given
proceeds of things extent of the value to those persons interested in the
ceded or assigned, of the thing performance of the obligation
unless there is delivered, as agreed
contrary intention upon, proved or (4) Amount or thing due was placed at the
implied from the disposal of the court
conduct of the (5) After the consignation has been made,
creditor the persons interested were notified
Involves all Does not involve all thereof
properties of debtor properties of debtor
Creditor does not Creditor becomes When tender and refusal not required [Art.
become owner of the owner 1256]
ceded property
(1) Creditor is absent or unknown, or does
not appear at the place of payment.
(2) Creditor is incapacitated to receive the
A.4. TENDER OF PAYMENT AND thing due at the time of payment.
CONSIGNATION (3) Without just cause, creditor refuses to
give receipt.

Tender of payment: Manifestation made by (4) Two or more persons claim the same
the debtor to the creditor of his desire to right to collect (i.e. Interpleader)
comply with his obligation, with offer of (5) Title of the obligation has been lost.
immediate performance.
(1) Preparatory act to consignation
Unless there is an unjust refusal by a creditor
(2) Extrajudicial in character to accept payment from a debtor, Article 1256
cannot apply. The possession of the property
Consignation: Deposit of the object of by the petitioners being by mere tolerance as
obligation in a competent court in they failed to establish the existence of any
accordance with the rules prescribed by law contractual relations between them and the
whenever the creditor unjustly refuses respondent, the bank deposit made by the
petitioners intended as consignation has no
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legal effect [Llobrera v Fernandez, May 2, If accepted by the creditor or declared


2006]. properly made by the Court:
(1) Debtor is released in same manner as if
he had performed the obligation at the
What constitutes valid consignation
time of consignation
In order that the consignation of the thing
(2) Accrual of interest is suspended from the
due may release the obligor, it must first be
moment of consignation.
announced to the persons interested in the
fulfilment of the obligation. (3) Deterioration or loss of the thing or
amount consigned, occurring without the
The consignation shall be ineffectual if it is
fault of debtor, must be borne by creditor
not made strictly in consonance with the
from the moment of deposit
provisions which regulate payment. [Art.
1257] Any increment or increase in the value of the
thing after consignation inures to the benefit
of the creditor
How consignation is made
Consignation shall be made by depositing the
In a “Contract To Sell”, tender and
things due at the disposal of judicial authority,
consignation is necessary to bring into effect
before whom the tender of payment shall be
the suspensive condition of payment which
proved, in a proper case, and the
gives rise to the obligation on the part of the
announcement of the consignation in other
SELLER to enter into a contract of sale.
cases.
Tender of payment alone is NOT enough
The consignation having been made, the [Adelfa Properties v CA]. On the other hand, in
interested parties shall also be notified an “Option Contract”, tender of payment is
thereof. enough to perfect the contract of sale.

Who bears the expenses Effects of Withdrawal by Debtor [Arts. 1260-


1261]
The expenses of consignation, when properly
made, shall be charged against the creditor. (1) Before approval of the court - Obligation
[Art. 1259] remains in force.
(2) After approval of the court or acceptance
by the creditor, with the consent of the
Withdrawal of Consigned Amount
latter - Obligation remains in force, but
Before the creditor has accepted the guarantors and co-debtors are liberated.
consignation, or before a judicial declaration Preference of the creditor over the thing is
that the consignation has been properly lost.
made, the debtor may withdraw the thing or
(3) After approval of the court or acceptance
the sum deposited, allowing the obligation to
remain in force [Art. 1260, par 2]. by the creditor, and without creditor’s
consent - Obligation subsists, without
The amount consigned with the trial court change in the liability of guarantors and
can no longer be withdrawn by the debtor co-debtors, or the creditor’s right of
because creditor’s prayer in his answer that preference.
the amount consigned be awarded to him is
equivalent to an acceptance of the
consignation, which has the effect of B. LOSS OF THE THING DUE OR
extinguishing debtor’s obligation [Pabugais v IMPOSSIBILITY OR DIFFICULTY OF
Sahijwani, 2004]. PERFORMANCE

Effects of Consignation Loss


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A thing is lost when it perishes, goes out of (8) Bailee in commodatum: saves his own
commerce or disappears in such a way that thing and not the thing of the creditor, etc.
its existence is unknown or it cannot be [Art. 1942].
recovered [Art. 1189, no. 2] (9) Depositary in deposit for certain
instances [Art. 1979].

Effects of Loss [Arts. 1262-1263]


Loss of the thing when in possession of the
Obligation to Deliver a Obligation to Deliver
debtor
Specific Thing a Generic Thing
Loss was due to the debtor’s fault. Burden of
Obligation is Loss of a generic explaining the loss of the thing falls upon him,
extinguished if the thing does not UNLESS due to an earthquake, flood, storm,
thing was destroyed extinguish an or other natural calamity [Art. 1265].
without fault of the obligation, EXCEPT
debtor and before he in case of delimited
has incurred delay. generic things, where In Reciprocal Obligations
the kind or class is
limited itself, and the Extinguishment of the obligation due to loss
whole class perishes. of the thing or impossibility of performance
affects both the creditor and debtor; the
entire juridical relation is extinguished.
An obligation to pay money is generic;
therefore, it is not excused by fortuitous loss
of any specific property of the debtor [Gaisano Partial loss
v Insurance Company, 2006].
Art. 1264. The courts shall determine whether,
under the circumstances, the partial loss of
the object of the obligation is so important as
Actions Against Third Persons
to extinguish the obligation.
Art. 1269. The obligation having been
extinguished by the loss of the thing, the
creditor shall have all the rights of action Partial loss due to a fortuitous event does not
which the debtor may have against third extinguish the obligation. The thing due shall
persons by reason of the loss. be delivered in its present condition, without
any liability on the part of the debtor,
UNLESS the obligation is extinguished when
Other cases where loss is attributed to debtor the part lost was of such extent as to make
the thing useless.
(1) Law provides that the debtor shall be
liable even if the loss is due to fortuitous
events [Arts. 1942, 1979, 2147, 2159].
(2) Obligor is made liable by express
Impossibility of Performance
stipulation.
When prestation becomes legally or
(3) Nature of the obligation requires an
physically impossible (by fortuitous event or
assumption of risk.
force majeure), the debtor is released. [Arts.
(4) Fault or negligence concurs with the 1266]
fortuitous event.
Impossibility must have occurred without
(5) Loss occurs after delay. fault of debtor, and after the obligation has
(6) Debtor has promised to deliver the same been constituted.
thing to two or more different parties.
(7) Obligation arises from a criminal act. Subjective impossibility

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Where there is no physical or legal loss, but or in such part of the same to which remission
the thing belongs to another, the refers.
performance by the debtor becomes
impossible. The debtor must indemnify the
creditor for damages. Requisites:
(1) Debt must be existing and demandable.
Partial Impossibility (2) Renunciation must be gratuitous.
Courts shall determine whether it is so (3) Debtor must accept the remission. [Art.
important as to extinguish the obligation. 1270]
(1) If debtor has performed part of the
obligation when impossibility occurred,
If the renunciation is not gratuitous, the
creditor must pay the part done as long
nature of the act changes and it may be:
as he benefits from it.
(2) If debtor received full payment from (1) Dation in payment – when the creditor
creditor, he must return excess amount receives a thing different from that
corresponding to part which was stipulated;
impossible to perform. (2) Novation – when the object or principal
conditions of the obligation have
Doctrine of Unforeseen Events changed;
Art. 1267. When the service has become so (3) Compromise – when the matter
difficult as to be manifestly beyond the renounced is in litigation or dispute and
contemplation of all the parties, the obligor in exchange of some concession which
may also be released therefrom, in whole or the creditor receives.
in part.

Although the debtor must accept the


Requisites [Tolentino]: remission, nothing prevents the creditor from
making a unilateral declaration of his right,
(1) The event or change in circumstances abandoning and thereby extinguishing his
could not have been foreseen at the time of credit, as expressly allowed by Art 6.
the execution of the contract;
(2) It makes the performance of the
contract extremely difficult but not Kinds of Condonation:
impossible; As to extent
(3) The event must not be due to the act 1. Total – extinguishes the entire
of any of the parties; and obligation.
(4) The contract is for a future prestation 2. Partial – refers to only a particular
aspect of the obligation, i.e. amount
of indebtedness or an accessory
obligation.

C. CONDONATION As to Form
1. Express
Condonation or Remission of the Debt 2. Implied
An act of liberality, by virtue of which, without Art. 1270. Condonation or remission is
receiving any equivalent, the creditor essentially gratuitous, and requires the
renounces the enforcement of the obligation. acceptance by the obligor. It may be made
The obligation is extinguished either in whole expressly or impliedly.
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One and the other kind shall be subject to the Confusion: The meeting in one person of the
rules which govern inofficious donations. qualities of creditor and debtor of the same
Express condonation shall, furthermore, obligation.
comply with the forms of donation.

Requisites
1. Express Condonation (1) It should take place between principal
Made formally: in accordance with debtor and creditor. [Art 1276]
forms of ordinary donations. [Art. (2) The very same obligation must be
1270] involved;
An express remission must be (3) The confusion must be total, i.e. as
accepted in order to be effective. regards the whole obligation.
When the debt refers to movable or
personal property, Art 748 will
govern; if it refers to immovable or Effects
real property, Art 749 applies. (1) In general
Art. 1275. The obligation is extinguished from
2. Implied Condonation the time the characters of the debtor and
creditor are merged in the same person.
Inferred from the acts of the parties.

Presumptions of Condonation: (2) In case of joint or solidary obligations

(1) Whenever the private document in which Confusion in Confusion in


the debt is found is in the possession of Joint Obligation Solidary Obligation
the debtor, it shall be presumed that the
creditor delivered it voluntarily, unless Extinguishes the Extinguishes the
the contrary is proved. [Art. 1272] share of the person in entire obligation, but
whom the two the other debtors
(2) Delivery of a private document evidencing characters concur may be liable for
credit made voluntarily by the creditor to [Art 1277] reimbursement if
the debtor implies the renunciation of the payment was made
action of creditor against the latter. [Art. prior to remission.
1272]
(3) Accessory obligation of pledge has been
remitted when thing after its delivery is Obligation is not extinguished when
found in the possession of the debtor or confusion takes place in the person of
third person. [Art. 1274] subsidiary debtor (i.e. guarantor), but merger
in the person of the principal debtor shall
benefit the former.
Effect Note: Where, however, the mortgagee
Art. 1273. Renunciation of the principal debt acquires ownership of the entire mortgaged
shall extinguish the accessory obligations, property, the mortgage is extinguished; but
but remission of the latter leaves the this does not necessarily mean the
principal obligation in force. extinguishment of the obligation secured
thereby, which may become an unsecured
obligation.
D. CONFUSION OR MERGER OF
RIGHTS E. COMPENSATION
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Compensation Confusion
Compensation: Offsetting of two obligations There must always Involves only one
which are reciprocally extinguished if they are be two obligations. obligation.
of the same value, or extinguished to the
concurrent amount if of different values.
There are two There is only one
persons who are person whom the
Requisites [Art. 1279] mutually debtors characters of the
(1) Each obligor is bound principally, and at and creditors of each creditor and debtor
the same time a principal creditor of the other in two separate meet.
other obligations, each
arising from the
(2) Both debts must consist in a sum of
same cause.
money, or if the things due are fungible,
of the same kind & quality
Note: The term ‘consumable’ is Compensation Payment
erroneously used in Art 1279. The
appropriate term is ‘fungible’. Capacity to dispose Requires capacity to
[Tolentino] and receive the thing dispose of the thing
is unnecessary since paid and capacity to
(3) Both debts are due compensation receive
(4) Debts are liquidated and demandable operates by law

(5) There must be no retention or controversy May be partial Must be total


over either of the debts, commenced by performance
third persons and communicated in due
time to the debtor
Compensation Counterclaim
(6) Compensation is not prohibited by law
Takes place by Must be pleaded to
To warrant the application of set off under operation of law be effectual
Article 1278 of the Civil Code, the debtor’s
admission of his obligation must be clear and
categorical and not one which merely arise by Kinds of Compensation
inference or implication from the customary
execution of official documents in assuming As to extent
the responsibilities of a predecessor [Bangko (1) Total – when two debts are of the same
Sentral v COA, 2006]. amount (Art. 1281)
Effects (2) Partial - when the two obligations are of
(1) Both debts are extinguished to the different amounts and a balance remain
concurrent amount, even though the
creditors and debtors are not aware of As to cause
the compensation.
(1) Legal
(2) Accessory obligations are also
extinguished. (2) Voluntary
Debtor claiming its benefits must prove (3) Judicial
compensation; once proven, effects retroact (4) Facultative
from the moment when the requisites
concurred.
(1) Legal Compensation – takes place by
operation of law from the moment all
Compensation Distinguished from Other requisites are present.
Modes of Extinguishment
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Since it takes place ipso jure, when used as a mutual extinguishment of their credits
defense, it retroacts to the date when all its [United Planters v CA, 2009].
requisites are fulfilled.

(3) Judicial Compensation – takes place by


Art. 1290. When all the requisites mentioned judicial decree
in article 1279 are present, compensation
takes effect by operation of law, and
Art. 1283. If one of the parties to a suit over
extinguishes both debts to the concurrent
an obligation has a claim for damages
amount, even though the creditors and
against the other, the former may set it off
debtors are not aware of the compensation.
by proving his right to said damages and the
amount thereof.
Legal compensation may apply to:
i. Awards of attorney’s fees, against the
(4) Facultative Compensation - When it can
litigant and not his lawyer [Gan Tion v
be claimed by one of the parties who,
CA, 1969]
however, has the right to object to it.
ii. Bank deposits, against the accounts of - Compensation which can only be set up
a depositor whose checks were at the option of a creditor, when legal
dishonored [BPI v CA, 1996] compensation cannot take place because
some legal requisites in favor of the
Note: While a bank generally has a
creditor are lacking.
right of set-off over deposits for the
payment of any withdrawals on the
part of a creditor, the question of
Obligations which cannot be compensated
whether the remedy is properly
[Arts. 1287-1288]
exercised is a separate matter and
depends on the bank’s role as the (1) Contracts of depositum
depository bank and as collecting
(2) Contracts of commodatum
agent for the check. The depositary
bank must have acted with the highest (3) Future support due by gratuitous title
degree of care, otherwise it may not
(4) Civil liability arising from a penal offense
exercise such right of setoff.
[Associated Bank v Tan, 2004] (5) Obligations due to the government
(6) Damage caused to the partnership by a
partner
(2) Voluntary Compensation – takes place
when parties who are mutually creditors
and debtors of each other agree to Right of a Guarantor
compensate their respective obligations
even though one of the requisites of A guarantor may set up compensation as
compensation may be lacking regards what the creditor may owe the
principal debtor. [Art. 1280]
Art. 1282. The parties may agree upon the
compensation of debts which are not yet Effect of Assignment of Rights by the Creditor
due. to a Third Person [Art. 1285]
Debtor cannot set up against
The only requisites of conventional assignee compensation
With
compensation are (1) that each of the parties pertaining to him against
debtor’s
can dispose of the credit he seeks to assignor UNLESS he
consent
compensate, and (2) that they agree to the reserved such right at the
time he gave his consent

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With Debtor may set up obligation is void if the obligation is


debtor’s compensation of debts extinguished original void, the old
knowledge previous to the assignment and obligation obligation
but without but not of subsequent ones replaced by was void, subsists,
consent the new one EXCEPT UNLESS the
stipulated. when parties
Debtor may set up
annulment intended that
Without compensation of all credits
may be the former
debtor’s prior and also later to the
claimed only relations shall
knowledge assignment until he had
by the be
knowledge of the assignment
debtor, or extinguished
when in any event
ratification [Art. 1297]
validates acts
1. New
F. NOVATION that are
obligation
voidable [Art.
void: No
1298]
novation
Novation 1. Original
2. New
Extinguishment of an obligation by the obligation is
obligation
substitution or change of the obligation by a void: No
voidable:
subsequent one which extinguishes or novation.
Novation is
modifies the first either by changing the 2. Original effective
object or principal conditions, or by obligation
substituting the person of the debtor, or by voidable:
subrogating a third person in the rights of the Effective if
creditor. contract is
Unlike other modes of extinguishment, it is a ratified
juridical act of dual function—it extinguishes before
an obligation, and at the same time, it novation.
creates a new one in lieu of the old. It
operates as a relative, not an absolute,
extinction. Accessory obligations are also extinguished,
but may subsist only insofar as they may
benefit third persons who did not give their
Requisites consent to the novation OR those who may
be affected, upon agreement between the
(1) A previous valid obligation
parties.
(2) Agreement of all the parties to the new
obligation
Original or new obligation with suspensive or
(3) Animus novandi or intent to novate
resolutory condition
(4) Substantial difference between old and
new obligations and, consequently, Art. 1299. If original obligation was subject to
extinguishment of the old obligation a suspensive or resolutory condition, the new
obligation shall be under the same condition,
(5) Validity of the new obligation unless it is otherwise stipulated.

Effect Compatible Incompatible


If Original If New Conditions Conditions
In General Obligation is Obligation is (a) Fulfillment of (a) Original obligation
Void Void both conditions: is extinguished,
Old Novation is New new obligation while new
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becomes obligation exists exists when they can stand together. Hence,
demandable there is no novation. Incompatibility exists
when they cannot stand together. Hence,
(b) Fulfillment of
(b) Demandability there is novation.
condition
shall be subject to
concerning the
fulfillment/
original For there to be implied novation, the changes
nonfulfillment of
obligation: old
the condition must be essential, i.e. referring to the object,
obligation is cause, or principal conditions of the
affecting it
revived; new obligation.
obligation loses
force
(c) Fulfillment of As to effect
condition (1) Total
concerning the
new obligation: (2) Partial
no novation; Total Partial
requisite of a
previous valid and (1) Transfers to the A creditor, to
effective person subrogated the whom partial
obligation lacking credit with all the payment has
rights thereto been made, may
appertaining, either exercise his right
against the debtor or for the
third persons. remainder, and
Kinds of Novation
shall be
(2) Obligation is not
preferred to the
extinguished, even if
person
As to form the intention is to pay
subrogated in his
it.
(1) Express place in virtue of
(3) Defenses against the the partial
(2) Implied
old creditor are payment.
AS TO FORM retained, unless
waived by the debtor.
Express – Implied – the old and
declared in an new obligations are
unequivocal on every point As to essence or object
terms incompatible with
each other (1) Objective/ Real
(2) Subjective/ Personal
AS TO ESSENCE OR OBJECT
Novation is not presumed
Objective/Real Subjective/Personal
In the absence of an unequivocal declaration
of extinguishment of the pre-existing
obligation, only proof of incompatibility
a. Change of the a. Substitution of
between the old and new obligation would
subject matter; debtors
warrant a novation by implication. [California
Bus Line vs. State Investment, 2003] b. Change of cause i. Expromision
or consideration; or
ii. Delegacion
c. Change of the
Test of Incompatibility b. Subrogation of a
principal conditions
third person to the
Whether or not the old and new obligation or terms
rights of the
can stand together, each one having an
independent existence. No incompatibility
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creditor paid and with creditor to


subrogation of subrogate him to
i. Conventional
creditor’s rights. all of his rights.
ii. Legal
(4) If without
knowledge of the
old debtor, the
new debtor can
demand
reimbursement
only up to the
extent that the
latter has been
Subjective Novation benefited without
subrogation of
a. Substitution of debtors creditor’s rights.

Expromision Delegacion
For subjective novation, it is insufficient that
Initiative for change Debtor (delegante) the juridical relation between the parties to
does not emanate offers or initiates the the original contract is extended to a third
from the debtor, and change, and the person. If the old debtor is not released, no
may even be made creditor (delegatorio) novation occurs and the third person who has
without his accepts a third assumed the debtor’s obligation becomes
knowledge. person (delegado) as merely a co-debtor or surety or co-surety.
consenting to the [Conchinyan, Jr. v. R&B Surety and Insurance
substitution. Company, 1987]
Requisites
(1) Consent of the Consent of old An accessory surety may not be released if he
creditor and the debtor, new debtor, expressly waives his discharge from the
new debtor. and creditor. obligation in case of change or novation in
(2) Knowledge or the original agreement [Molino v Security
consent of the old Diners International Corp, 2001].
debtor is not
required.
Effects
b. Subrogation
(1) Old debtor is (1) Insolvency of the
released new debtor Transfers to the person subrogated the credit
revives the with all the rights thereto appertaining, either
(2) Insolvency of the against the debtor or against third persons,
obligation of the
new debtor does be they guarantors or possessors of
old debtor if it was
not revive the old mortgages, subject to stipulation in a
anterior and
obligation in case conventional subrogation. [Art. 1303]
public, and known
the old debtor did
to the old debtor.
not agree to
expromision. (2)New debtor can i. Conventional Subrogation – takes place by
demand agreement of parties
(3) If with knowledge
reimbursement of
and consent of the
the entire amount
old debtor, the Difference between Conventional Subrogation
he has paid from
new debtor can and Assignment of Credit [Licaros v Gatmaitan,
the original
demand 2001]
debtor. He may
reimbursement of
compel the
the entire amount
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Conventional
Assignment of credit
subrogation
Debtor’s consent is Debtor’s consent is not
necessary. required.
Extinguishes an Refers to the same right
obligation and which passes from one
gives rise to a new person to another,
one. without modifying or
extinguishing the
obligation.
Defects/vices in Defects/vices in the old
the old obligation obligation are not
are cured. cured.

ii. Legal Subrogation – takes place by


operation of law

Legal subrogation is not presumed, except in


the following circumstances:
(1) When creditor pays another creditor
who is preferred, even without the
debtor’s knowledge
(2) When a third person not interested in
the obligation pays with the express or
tacit approval of the debtor
(3) When, even without the knowledge of
the debtor, a person interested in the
fulfillment of the obligation pays,
without prejudice to the effects of
confusion as to the latter’s share (Art.
1302)

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CIVIL LAW
CONTRACTS

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Similarly, contract changes must be


I. General Provisions made with the consent of the contracting
parties. The minds of all the parties must
meet as to the proposed modification,
Contract - A contract is a meeting of the especially when it affects and important
minds between two persons whereby one aspect of the agreement. Thus, any
binds himself, with respect to the other, to change must be mutually agreed upon;
give something or to render some service otherwise, it produces no binding effect.
[Article 1305] [Philippine Savings Bank v. Sps. Castillo,
G.R. No. 193178 (2011)]

A. PRINCIPAL CHARACTERISTICS OF
CONTRACTS (MARCO) A.2. AUTONOMY (ALSO FREEDOM TO
CONTRACT)

A. 1. MUTUALITY Art. 1306. The contracting parties may


establish such stipulations, clauses, terms
Art. 1308. The contract must bind both and conditions as they may deem convenient,
contracting parties; its validity or provided they are not contrary to law, morals,
compliance cannot be left to the will of one good customs, public order, or public policy.
of them.

Contracting parties may establish any


General rule: Any contract which appears to agreement, term, and condition they may
be heavily weighed in favor of one of the deem advisable, provided they are not
parties or is left solely to the will of one of the contrary to law, morals or public policy. The
parties is void [Floirendo v Metrobank, G.R. No. right to enter into lawful contracts constitutes
148325 (2007)]. one of the liberties guaranteed by the
Exception: The legality of contracts which is Constitution. It cannot be struck down or
left to the will of either of the parties may be arbitrarily interfered with without violating
upheld if there was a finding of the presence the freedom to enter into lawful contracts.
of essential equality of the parties to the [Gateway Electronics Corporation v Land Bank,
contracts, thus preventing the perpetration of G.R. Nos. 155217 & 156393 (2003)]
injustice on the weaker party [GF Equity v It is necessary for the existence of a contract
Valenzona, G.R. No. 156841 (2005)] that two distinct parties enter into it (auto-
A contract may expressly confer upon one contracts).
party the right to cancel the contract because • The existence of a contract is not
the exercise of that right is a fulfillment of the determined by the number of persons
provisions of the contract itself [Taylor v Uy who intervene in it, but by the number of
Tieng Piao, G.R. No. L-16109 (1922)] parties; not by the number of individual
wills but by the number of declarations
of will.
The determination of the performance may • As long as there are two distinct
be left to a third party as long as: patrimonies, even if they are represented
(1) The decision has been made known by the same person, the contract will be
to both contracting parties [Article valid; e.g. an agent representing both
1309] the buyer and the seller.
(2) The determination is not evidently
inequitable [Article 1310]. If it is Special disqualifications in freedom to contract
inequitable, the court shall decide Art. 87, FC: Every donation or grant of
what is equitable under the gratuitous advantage, direct or indirect,
circumstances. between the spouses during the marriage
shall be void, except moderate gifts which the
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spouses may give each other on the occasion partnership


of any family rejoicing. The prohibition shall
also apply to persons living together as
husband and wife without a valid marriage. Limitations to stipulations/what not to
stipulate:
Art. 1490, CC: The husband and the wife
cannot sell property to each other, except: (1) 1. Contrary to Law
When a separation of property was agreed
Pactum commisorium – automatic
upon in the marriage settlements; or (2)
appropriation
When there has been a judicial separation of
property under Article 191. Art. 2088, CC: The creditor cannot
appropriate the things given by way of pledge
Art. 1491, CC The following persons cannot
or mortgage, or dispose of them. Any
acquire by purchase, even at a public or
stipulation to the contrary is null and void.
judicial auction, either in person or through
the mediation of another: Pactum leonina – one party bears the lion’s
share of the risk
(1) The guardian, the property of the
person or persons who may be under Art. 1799, CC: A stipulation which excludes
his guardianship; one or more partners from any share in the
(2) Agents, the property whose profits or losses is void.
administration or sale may have been
Pactum de non alienundo – a stipulation not
entrusted to them, unless the consent
to alienate
of the principal has been given;
(3) Executors and administrators, the Art. 2130, CC: A stipulation forbidding the
property of the estate under owner from alienating the immovable
administration; mortgaged shall be void.
(4) Public officers and employees, the
2. Contrary to morals
property of the State or of any
subdivision thereof, or of any 3.Contrary to good customs
government-owned or controlled
4. Contrary to public order
corporation, or institution, the
administration of which has been 5. Contrary to public policy
entrusted to them; this provision shall
Public policy is the principle under which
apply to judges and government
freedom of contract or private dealing is
experts who, in any manner whatsoever,
restricted by law for the good of the public. In
take part in the sale;
determining whether a contract is contrary to
(5) Justices, judges, prosecuting attorneys,
public policy, the nature of the subject matter
clerks of superior and inferior courts,
determines the source from which such
and other officers and employees
question is to be solved [Ferrazzini v Gsell,
connected with the administration of
G.R. No. L-10712 (1916)]
justice, the property and rights in
litigation or levied upon an execution A contract which is neither prohibited by law
before the court within whose nor condemned by judicial decision, nor
jurisdiction or territory they exercise contrary to public morals, contravenes no
their respective functions; this public policy. In the absence of express
prohibition includes the act of acquiring legislation or constitutional prohibition, a
by assignment and shall apply to court, in order to declare a contract void as
lawyers, with respect to the property against public policy, must find that the
and rights which may be the object of contract as to the consideration or thing to be
any litigation in which they may take done, has a tendency to injure the public, is
part by virtue of their profession. against the public good, or contravenes some
(6) Any others specially disqualified by law. established interests of society, or is
Art. 1782, CC: Persons who are prohibited inconsistent with sound policy and good
from giving each other any donation or morals, or tends clearly to undermine the
advantage cannot enter into universal security of individual rights, whether of
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personal liability or of private property v. The favorable stipulation should not


[Gabriel v Monte de Piedad,G.R. No. L-47806 be conditioned or compensated by
(1941)] any kind of obligation whatsoever.

2. Accion directa –the creditor is authorized by


A.3. RELATIVITY the statute to sue on his debtor’s contract
Art. 1311, para. 1. Contracts take effect only Examples:
between parties, their assigns and heirs,
EXCEPT in case where the rights and (1) Lessor against Sublessee [Art. 1651,
obligations arising from the contract are not 1652]
transmissible by their (1) nature, (2) by (2) Laborers of Contractor against Owner
stipulation, or (3) by provision of law. The of the work [Art. 1729]
heir is not liable beyond the value of the
property he received from the decedent
3. Third Person in Possession of Object of
Contract [Art. 1312]
Art. 1317. No one may contract in the name of
another without being authorized by the In contracts creating real rights, third
latter, or unless he has by law a right to persons who come into possession of the
represent him. object of the contract are bound thereby,
subject to the provisions of the Mortgage
A contract entered into in the name of Law and the Land Registration Laws.
another by one who has no authority or legal
representation or who has acted beyond his
powers, shall be unenforceable, unless it is 4. Fraud of Creditors by Contracting Parties
ratified expressly or impliedly by the person [Art. 1313]
on whose behalf it has been executed,
before it is revoked by the other contracting Creditors are protected in cases of
party contracts intended to defraud them.
Creditors of the contracting parties may
rescind contracts intended to defraud
Exceptions to Relativity (Contracts may bind them although they did not intervene
and affect strangers in the ff. cases): therein [Reyes and Puno]
1. Stipulations Pour Autrui [Art. 1311, par.2]
If a contract should contain some 5. Tortious Interference [Art. 1314]
stipulation in favor of a third person, he Any third person who induces another to
may demand its fulfillment, provided: violate his contract shall be liable for
i. He communicated his acceptance to damages to the other contracting party
the obligor before its revocation (by (even though the third person is not
the original parties). bound by the stipulations).
ii. The contracting parties must have Requisites:
clearly and deliberately conferred a i. Existence of a valid contract
favor upon the third person (A mere
incidental benefit or interest of a ii. Knowledge of the third person of the
person is not sufficient). existence of the contract

iii. The stipulation favoring the third iii. Interference by third person without
person is only a part of the contract. legal justification or excuse. [Lagon v
CA, G.R. No. 119107 (2005)]
iv. No relation of agency exists between
any of the parties and the third (1) The word "induce" refers to situations
person favored. where a person causes another to choose
one course of conduct by persuasion or
intimidation.
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(2) Knowledge alone is not sufficient to make (ordinary) (formal)


a third person liable for tortuous
interference. To sustain a case for Consent
Essential
tortuous interference, the defendant Object
Elements
must have acted with malice or must
Cause
have been driven by purely impious
reasons to injure the plaintiff. Delivery
of the Formality
Additional
- thing to prescribe
A.4. CONSENSUAL Elements
be d by law
Art. 1315. Contracts are perfected by mere returned
consent and from that moment, the parties
are bound not only to the fulfillment of what
has been expressly stipulated but also to all 2) Natural – those which are derived
consequences which according to their from the nature of the contract and
nature may be keeping in good faith, usage, ordinarily accompany the same; they
and law. are presumed to exist unless the
contrary is stipulated
3) Accidental – those which exist only if
Exceptions: Real contracts, such as deposit, stipulated
pledge and commodatum, are not perfected
until the delivery of the object of the C. CLASSIFICATION OF CONTRACTS
obligation [Article 1316].
(1) To their subject matter
a. Things, e.g. sale, deposit, pledge
A.5. OBLIGATORY FORCE
b. Services, e.g. agency, lease of services
Art. 1159. Obligations arising from contracts
have the force of law between the (2) To formation or perfection
contracting parties and should be complied a. Consensual – consent is sufficient to
with in good faith. perfect the contract [Art. 1315]
b. Real – delivery, actual or constructive,
is required in addition to consent [Art.
Art. 1308. The contract must bind both
1316]
contracting parties; its validity or
compliance cannot be left to the will of one c. Solemn or formal – where special
of them formalities are required for perfection
[Art. 1356]
(3) To relation to other contracts
Art. 1315. Contracts are perfected by mere
consent and from that moment, the parties a. Principal – may exist alone; e.g. lease
are bound not only to the fulfillment of what b. Accessory – depends on another
has been expressly stipulated but also to all contract for its existence, e.g.
consequences which according to their guaranty
nature may be keeping in good faith, usage, c. Preparatory – a preliminary step
and law towards the celebration of a
subsequent contract; e.g. agency
B. ELEMENTS OF CONTRACTS (4) To form
1) Essential – those without which there a. Common or informal – may be
is no contract entered into in whatever form as long
as there is consent, object and cause
Consensual Real Solemn

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b. Special or formal – required by law to (i) Do ut des (I give so that you may
be in certain specified form give)
(5) To cause/by equivalence of prestations (ii) Do ut facias (I give so that you
may do)
a. Onerous – there is an exchange of
correlative values, e. g. sale (iii) Facio ut facias (I do so that you
may do)
b. Remuneratory – where the
outstanding prestation is premised (iv) Facio ut des (I do so that you may
upon services or benefits already give)
received
c. Gratuitous – where no correlative Art. 1307. Innominate contracts shall be
prestation is received by one party, e. regulated by the stipulations of the parties,
g. donation, commodatum by the provisions of Titles I and II of this
Book, by the rules governing the most
(6) To purpose analogous nominate contracts, and by the
a. Transfer of ownership, e.g. sale customs of the place

b. Conveyance of Use, e.g.


commodatum D. STAGES OF A CONTRACT
c. Rendition of Service, e.g. agency (1) Preparation (conception or “generation”)
(7) To time of fulfillment – when negotiations are in progress
a. Executed – where the obligations are (2) Perfection (or birth) – when the parties
fulfilled at the time the contract is come to an agreement
entered into (3) Consummation (or death) - when the
b. Executory – where fulfillment of contract is fully executed
obligations does not take place at the
time the contract is made Essential Requisites
(8) To risk There is no contract unless the following
a. Commutative – fulfillment is requisites concur: (COC)
predetermined in advance (1) Consent of the contracting parties;
b. Aleatory – fulfillment is dependent (2) Object certain which is the subject matter
upon chance of the contract;
(9) To the nature of the vinculum produced (3) Cause of the obligation which is
a. Unilateral – only one party is bound established. [Art. 1318]
by the prestation, e.g. commodatum
b. Bilateral (synallagmatic)- both D.1. CONSENT
parties are bound by reciprocal The meeting of the minds of the parties on
prestations, e.g. sale the subject matter and cause of the contract.
• All contracts are bilateral in the
consent, but not all are bilateral in Requisites
effects. (1) It must be manifested by the concurrence
(10) To their designation/name of the offer and acceptance [Arts. 1319-
1326].
a. Nominate – where the law gives the
contract a special designation or (2) The contracting parties must possess the
particular name; e.g. deposit necessary legal capacity [Arts. 1327-1329].

b. Innominate – where the contract has (3) It must be intelligent, free, spontaneous,
no special name and real (not vitiated) [Arts. 1330-1346]

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A contract is perfected by mere consent.


From the moment of a meeting of the offer
(3) Statements of intention: no contract
and the acceptance upon the object and the
results even if accepted.
cause that would constitute the contract,
consent arises. However, “the offer must be In a letter informing another that the sender
certain” and “the acceptance seasonable and was “in a position and is willing to entertain”
absolute; if qualified, the acceptance would the purchase of a yacht under some terms,
merely constitute a counteroffer. [Insular Life the word “entertain” applied to an act does
v. Asset Builders Corp., 2004] not mean the resolution to perform said act,
but simply a position to deliberate for
The facts that the signatures of the witnesses
deciding to perform or not to perform said act.
and the notary public were forged does not
It was merely a position to deliberate whether
negate the existence of the contract for as
or not he would purchase the yacht and
long as the parties consented to it. The
invitation to a proposal being made to him,
signatures of the witnesses and the notary
which might be accepted by him or not.
public are necessary simply to make the
[Rosenstock v. Burke, 1924]
contract binding on the third person. [Soriano
v. Soriano, G.R. No. 130348 (2007)]
Offer terminates upon—
Offer (1) Rejection by the offeree
A unilateral proposition which one party (2) Incapacity (death, civil interdiction,
makes to the other for the celebration of the insanity, or insolvency) of the offeror or
contract. [Tolentino] offeree before acceptance is conveyed
[Art. 1323]
(3) Counter-offer
Requisites of an Offer:
(4) Lapse of the time stated in the offer
(1) Definite
without acceptance being conveyed
(2) Intentional
(5) Revocation of the offer before learning of
(3) Complete acceptance
(6) Supervening illegality before acceptance
[Reyes and Puno]
Invitation to make offers (advertisements)
(1) Business advertisements of things for
Acceptance
sale are NOT definite offers, just
invitations to make an offer, UNLESS the To produce a contract, the acceptance must
contrary appears [Art. 1325]. not qualify the terms of the offer. It is
necessary that the acceptance be
(2) Advertisements for bidders are invitations
unequivocal and unconditional, and the
to make proposals, the advertiser is NOT
acceptance and the proposition shall be
bound to accept the lowest or highest
without any variation whatsoever; and any
bid; UNLESS the contrary appears. The
modification or variation from the terms of
bidder is the offeror [Art. 1326].
the offer annuls the latter and frees the
The Terms and Conditions of the bidding offeror. [Tolentino]
disseminated by PUREFOODS constitutes the
"advertisement" to bid on the project. The bid
proposals or quotations submitted by the Requisites of acceptance:
prospective suppliers including respondent
(1) Unqualified and unconditional, i.e. it
FEMSCO, are the offers. The reply of
must conform with all the terms of the
petitioner Purefoods constitutes the
offer, otherwise it is a counter-offer [Art.
acceptance or rejection of the respective
1319]
offers. [Jardine Davies v. CA, 2000]

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(2) Directed and communicated to the A preparatory contract in which one party
offeror and learned by him [Art. 1319] If grants to the other, for a fixed period, the
made through an agent, the offer is option to decide whether or not to enter into
accepted from the time the acceptance is a principal contract [Art. 1324]
communicated to such agent. [Art. 1322]
It binds the party who has given the option
(3) Made within the proper time not to enter into the principal contract with
any other person during the person
(4) May be express/implied, but is not
designated, and within that period, to enter
presumed
into such contract to whom the option was
granted if the latter should decide to use the
Acceptance must be absolute, unconditional, option. [Tolentino]
and without variance of any sort from the
offer. It must also be made known to the
offeror. An acceptance not made in the With consideration Without consideration
manner prescribed is not effective but
constitutes a counter-offer. [Malbarosa v. CA, Offeror cannot Offeror may withdraw
2003] unilaterally withdraw by communicating
his offer. withdrawal to the
offeree before
Contracts are perfected by mere consent acceptance.
Contracts are perfected by mere consent, and
from that moment the parties are bound not
Art. 1324 provides the general rule regarding
only to the fulfillment of what has been
offer and acceptance: when the offerer gives
expressly stipulated but also to all the to the offeree a certain period to accept, "the
consequences which, according to their offer may be withdrawn at any time before
nature, may be in keeping with good faith, acceptance" except when the option is
usage and law. [Art. 1315]
founded upon consideration.
However, Art. 1479 modifies the general rule,
Exceptions: which applies to "a promise to buy and sell"
specifically. This rule requires that a promise
(1) Real contracts, such as deposit, pledge
to sell to be valid must be supported by a
and commodatum, are not perfected
consideration distinct from the price. The
until the delivery of the object of the
option can still be withdrawn, even if
obligation [Art. 1316]
accepted, if the same is not supported by any
(2) Formal contracts, where the law requires consideration. [Tuazon v. Del Rosario-Suarez,
that a contract be in some form or be 2010]
proved in a certain way; the intent of the
parties have to be accompanied by the
requisite formality [Art. 1356] Capacity to Contract
There are two types of void contracts:
Cognition Theory (1) Those where one of the essential requisites
Acceptance made by a letter or telegram of a valid contract as provided for by Article
does not bind the offeror except from the 1318 of the Civil Code is totally wanting; and
time it came to his knowledge. The contract, (2) Those declared to be so under Article
in such a case, is presumed to have been
1409 of the Civil Code. By contrast, a voidable
entered into in the place where the offer was
or annullable contract is one in which the
made. [Art. 1319, 2nd par.]
essential requisites for validity under Article
1318 are present, but vitiated by want of
capacity, error, violence, intimidation, undue
Option Contract
influence, or deceit. [Francisco v. Pastor
Herrera, 2000]
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Guardian Property of the ward


Persons incapacitated to give consent [Art. Agent Property of the
1327] Principal
(1) Minors, EXCEPT— Executors and Property under
a. For necessaries [Art.1427] Administrators administration
b. Where the minor actively Public Officers Property under their
misrepresents his age (estoppel) administration
c. When it involves a natural obligation
and such obligation is fulfilled Justices, judges, Property attached in
voluntarily by the minor [Art. 1425-27] prosecutors, clerks litigation
d. Contracts by guardians or legal of court, lawyers
representatives
e. When upon reaching the age of
majority they ratify the same Incapacity to Give Consent vs. Disqualification
f. When a minor opens a savings to Contract
account without the assistance of his
Incapacity to Give Disqualification to
parents, provided that the minor is at
Consent Contract
least 7 years old and can read and
write [PD 1734]. Restrains the Restrains the very
exercise of the right right itself
to contract
(2) Insane or demented persons, UNLESS
they contract during a lucid interval. [Art. Based upon Based upon public
1328] subjective policy and morality
(3) Deaf-mutes who do not know how to read circumstances of
AND write. certain persons
Voidable Void
[Mercado v. Espiritu, 1917]: Minors were held in
estoppel through active misrepresentation.
Consent
[Bambalan v. Maramba, 1928]: There is no
estoppel if the minority was known by the Requisites of Consent:
other party, and there was no active (1) intelligent
misrepresentation on the part of the minors.
(2) free
(3) spontaneous
Persons disqualified to contract
(4) real
(1) Those under civil interdiction for
transactions inter vivos [Art. 34, RPC]
(2) Undischarged insolvents [Sec. 24, Vices of Consent
Insolvency Law] A contract where consent is given through
(3) Husband and wife cannot donate to each a. Mistake
other [Art. 123, FC], nor sell to each other
if the marriage is under the regime of b. Violence
Absolute Community of Property c. Intimidation
[Art.1490]
d. Undue influence
(4) The ff. cannot purchase, whether in
e. Fraud
public or private sale [Art. 1491]:
is voidable. [Art. 1330]
Prohibited Party Subject

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Mistake
Inadvertent and excusable disregard of a Mistake which vitiates consent is an error of
circumstance material to the contract [Reyes fact, and not an error of law. Ignorance of the
and Puno] law excuses no one from compliance
therewith [Art. 3]; but the modern tendency is
In order that mistake may invalidate consent,
to allow an excusable mistake of law to be
it should refer to the substance of the thing
invoked as vitiating consent. [Tolentino]
which is the object of the contract, or to those
conditions which have principally moved one
or both parties to enter into the contract.
See also Art. 526, on Possession: Mistake
[Art.1331] There is no mistake if the party
upon a doubtful or difficult question of law
alleging it knew the doubt, contingency or
may be the basis of good faith.
risk affecting the object of the contract. [Art.
1333]
To invalidate consent, the error must be Ignorantia Facti Excusat vs. Ignorantia Legis
excusable. It must be real error, and not one Neminem Excusat
that could have been avoided by the party
Mistake of Fact Mistake of Law
alleging it. An error so patent and obvious
that nobody could have made it, or one which One or both One or both parties
could have been avoided by ordinary contracting parties arrive at an erroneous
prudence, cannot be invoked by the one who believe that a fact conclusion on the
made it in order to annul his contract. A exists when in reality interpretation of a
mistake that is caused by manifest it does not, or vice question of law or its
negligence cannot invalidate a juridical act. versa legal effects
[Tolentino]
Vitiates consent Does not vitiate
consent EXCEPT
Requisites: when it involves
mutual error as to the
a. The error must be substantial regarding: effect of an
(1) The object of the contract (error in re) agreement when the
which may be: real purpose is
frustrated.
i. Mistake as to the identity of the thing
(error in corpore)
ii. Mistake as to the substance of the Note: The obligation to show that the terms
thing (error in substantia) of the contract had been fully explained to
the party who is unable to read or understand
iii. Mistake as to the conditions of the the language of the contract, when fraud or
thing provided, or mistake is alleged, devolves on the party
iv. Mistake as to the quantity of the thing seeking to enforce it. [Art. 1332]
(error in quantitate)
(2) The condition which primarily moved or Intimidation
induced one or both parties to enter the
contract. One of the contracting parties is compelled
by a reasonable and well-grounded fear of an
(3) Identity or qualifications of one of the imminent and grave evil upon his person or
parties (error in persona), but only if property, or upon the person or property of
such was the principal cause of the his spouse, descendants or ascendants, to
contract. give his consent
b. The error must be excusable To determine the degree of intimidation, the
c. The error must be a mistake of fact and not age, sex and condition of the person shall be
of law. borne in mind. [Art. 1335]

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The conveyance of several properties by the Requisites:


wife to her husband’s creditors, though
(1) Improper advantage
reluctant, is still consent. She assented to the
requirements of the defendants in order that (2) Power over the will of another
the civil and criminal actions against them
(3) Deprivation of the latter’s will of a
would be dropped. A contract is valid even
reasonable freedom of choice
though one of the parties entered into it
against his wishes and desires, or even
against his better judgment. [Martinez vs Circumstances to consider:
HSBC, 1910]
a. Relationship of the parties (family,
spiritual, confidential etc.)
Violence b. That the person unduly influenced
• Serious or irresistible force used to was suffering from infirmity (mental
extort consent [Art. 1335] weakness, ignorance etc.) [Art.1337]
Requisites: Note: By analogy, undue influence employed
by a third person may annul the contract.
(1) One party is compelled to give his
consent by a reasonable and well-
grounded fear of an evil; Test of Undue Influence: Whether or not the
(2) The evil must be imminent and grave; influence exerted has so overpowered or
subjugates the mind of a contracting party as
(3) The evil must be upon his person or to destroy his free agency, making him
property, spouse, descendants or express the will of another rather than his
ascendants; own. [Coso-Fernandez Deza, 1921]
(4) The evil must be unjust. Undue influence must be distinguished from
intimidation, in that in intimidation there
must be an unlawful or unjust act which
If a contract is signed merely because of “fear threatens and which causes consent to be
of displeasing persons to whom obedience given, while in undue influence, there need
and respect are due”, the contract is still valid, not be an unjust or unlawful act. [Tolentino]
for by itself, reverential fear is not wrong.
[Paras, Civil Code]
Fraud
Violence Intimidation When, through insidious words or
machinations of one of the contracting
Physical compulsion Moral compulsion parties, the other is induced to enter into a
External or prevents Internal or induces contract which, without them, he would not
the will to manifest the performance of an have agreed to. [Art. 1338]
itself act In order that fraud may make a contract
voidable, it should be serious and should not
have been employed by both contracting
Note: Violence or intimidation shall annul the parties. [Art. 1344]
obligation, although it may have been
employed by a third person who did not take
part in the contract. [Art. 1336] Art. 1339. Failure to disclose facts, when
there is a duty to reveal them, as when the
parties are bound by confidential relations,
Undue Influence constitutes fraud.
When a person takes improper advantage of
his power over the will of another, depriving
the latter of a reasonable freedom of choice.
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Art. 1340. The usual exaggerations in trade, Renders the contract Renders the party
when the other party had an opportunity to voidable liable for damages
know the facts, are not in themselves
fraudulent.
Dolo incidente (Incidental fraud, Article 1344)
Those which are not serious in character and
Art. 1341. A mere expression of an opinion
without which the other party would still have
does not signify fraud, unless made by an entered into the contract.
expert and the other party has relied on the
former's special knowledge.
Dolo causante (Causal fraud)
Art. 1342. Misrepresentation by a third Determines or is the essential cause of the
person does not vitiate consent, unless such consent, while dolo incidente refers only to
misrepresentation has created substantial some particular or accident of the obligation.
mistake and the same is mutual. The effects of dolo causante are nullity of the
contract and indemnification of damages,
while dolo incidente obliges the person
Art. 1343. Misrepresentation made in good employing it to pay damages. [Tankeh v. DBP,
faith is not fraudulent but may constitute 2013]
error.
Fraud to vitiate consent must fulfill two
Requisites: conditions
(1) It must be made in Bad faith (1) The fraud must be dolo causante or it must
be fraud in obtaining the consent of the party.
(2) One party must have employed fraud The deceit must be serious. The fraud is
or insidious words or machinations serious when it is sufficient to impress, or to
(3) Damage or injury resulted to the lead an ordinarily prudent person into error;
other party that which cannot deceive a prudent person
cannot be a ground for nullity. The
(4) It must have been serious circumstances of each case should be
(5) It induced the other party to enter considered, taking into account the personal
into a contract conditions of the victim.
(6) It must have been employed by one (2) The fraud must be proven by clear and
contracting party upon the other and convincing evidence and not merely by a
not employed by both contracting preponderance thereof. [ECE Realty v.
parties nor by third persons. Mandap, 2014]

Dolo Causante vs. Dolo Incidente Note: However, fraud in its general sense
(false representation of a fact) coming about
Dolo Causante Dolo Incidente in the consummation stage of the sale, as
Refers to those Refers to those opposed to the negotiation and perfection
deceptions or deceptions or stages, entitles the aggrieved party to the
misrepresentations misrepresentations rescission of the sales contract. [Spouses
of a serious character which are not serious Tongson v. Emergency Pawnshop, 2010]
employed by one in character and
party and without without which the
which the other party other party would Simulation of Contracts
would not have have still entered into Takes place when the parties do not really
entered into the the contract want the contract they have executed to
contract produce the legal effects expressed by its
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wordings. It may be absolute or relative [Arts. valid and enforceable contract. [Manila
1345-1346] Banking v. Silverio, 2005]
The primary consideration in determining the If the parties [merely] state a false cause in
true nature of a contract is the intention of the contract to conceal their real agreement,
the parties. Such intention is determined not the contract is relatively simulated and the
only from the express terms of their parties are still bound by their real agreement.
agreement, but also from the Hence, where the essential requisites of a
contemporaneous and subsequent acts of the contract are present and the simulation refers
parties. [Spouses Lopez v. Spouses Lopez, only to the content or terms of the contract,
2009] the agreement is absolutely binding and
enforceable between the parties and their
successors in interest. [Valerio v. Refresca,
Requisites: 2006]
(1) A deliberate declaration contrary to the With respect to a third person acting in good
will of the parties; faith, the apparent contract must be
considered as the true contract. The
(2) Agreement of the parties to the
declaration that the contract is simulated
apparently valid act, and
does not prejudice him.
(3) The purpose is to deceive or to hide from
third persons although it is not necessary
that the purpose be illicit or for purposes Note: Relative simulation is presumed by law
of fraud in case of Art. 1602 (Contracts presumed to
be Equitable Mortgages)

Absolute Simulation Relative Simulation


D.2. OBJECT OF CONTRACTS
(Simulados) (Disimulados)
The subject matter; the thing, right or service
No real transaction Real transaction is
which is the subject matter of the obligation
is intended. hidden.
arising from the contract. [Tolentino]
Fictitious contract. Disguised contract.
Void. (Because Bound as to hidden Requisites
there is an absolute agreement, so long as
lack of declaration it does not prejudice a (1) Within the commerce of men [Art. 1347]
of will) third person and is not (2) Not legally or physically impossible
contrary to law, morals, [Art.1348]
good customs, public
order or public policy. (3) In existence or capable of coming into
existence [See Arts. 1461, 1493, 1495]
(4) Determinate or determinable, without the
The characteristic of simulation is the fact need of a new contract between the
that the apparent contract is not really parties [Arts. 1349, 1460, par.2]
desired or intended to produce legal effects
or in any way alter the juridical situation of
the parties. Thus, where a person, in order to All things or services may be the object of
place his property beyond the reach of his contracts, EXCEPT:
creditors, simulates a transfer of it to another,
he does not really intend to divest himself of (1) Things which are outside the commerce
his title and control of the property; hence, of men
the deed of transfer is but a sham. Lacking, (2) Intransmissible rights
therefore, in a fictitious and simulated
contract is consent which is essential to a (3) Future inheritance except in cases
authorized by law

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Requisites: that the thing will never come into


existence, e.g. insurance.
a. The succession has not yet been
opened;
In case of doubt about the nature of the
b. The object of the contract forms
contract, it must be deemed conditional as
part of the inheritance; and
doubt shall be resolved in favor of greatest
c. The promissor has an expectancy reciprocity of interests.
of a right which is purely
hereditary in nature
D.3. CAUSE OF CONTRACTS
Exceptions to the Exception
The essential and impelling reason why a
a. In case of marriage settlements
party assumes an obligation. Motive, on the
under Art. 130, NCC
other hand, is the particular reason for a
b. In case of partition of properties contracting party which does not affect the
inter vivos by the deceased under other. [Manresa]
Art. 1080, NCC [JLT Agro v.
Requisites:
Balansag, 2005)]
(1) Exists at the time of the contract is
(4) Impossible things or services:
entered into [Arts. 1352, 1409, par. 3]
a. Absolute or objective – when
(2) Lawful [Id.].
nobody can perform the service. It
nullifies the contract (3) True or real [Art.1353]
b. Relative or subjective – when due to
the special conditions or
Cause vs. Object
qualifications of the debtor it cannot
be performed. If temporary, it does Cause Object
not nullify the contract.
As to Remuneration
(5) Objects which are indeterminable as to
their kind, the genus should be expressed The service or benefit The thing which is
which is remunerated given in
remuneration
In order that a thing, right, or service may be
the object of a contract, it should be in As to Donation
existence at the moment of the celebration of The liberality of the The thing which is
the contract, or at least, it can exist donor or benefactor given or donated
subsequently or in the future.
A showing of mere inconvenience,
unexpected impediments, or increased As to the Thing
expenses is not enough to relieve a party of Prestation or promise The thing or service
the obligation. [De Castro v. Longa, G.R. No L- of a thing or service itself
2152-53 (1951)] by the other
As to Contracting Parties
A FUTURE THING may be the object of a Different with respect May be the same for
contract. Such contract may be interpreted as to each part both parties
a:
a) Conditional contract, where its efficacy
should depend upon the future Distinguished from Motive
existence of the thing. Cause Motive
b) Aleatory contract, where one of the
contracting parties assumes the risk Proximate reason for Remote reason for
contract the contract
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Objective or juridical Psychological and Effect of Lack of Cause, Unlawful Cause, False
reason purely personal Cause and Lesion (Arts. 1352 – 1355)
reason
Cause Effect
Always the same for Differs for each
Lack of Cause – If there is no cause
each contracting contracting party
absence or total whatsoever, contract is
party
lack of cause VOID; a fictitious sale is
Illegality affects Illegality does not VOID.
existence or validity affect existence or Note: Cause must exist
of the contract validity of contract at the time of the
perfection of the
contract; it need not exist
Note: Motive becomes the cause when it later.
predetermines the purpose of the contract.
Contrary to law, If cause is unlawful,
morals, good transaction is VOID.
Cause in contracts [Art. 1350] customs, public
policy and public
Pure
Onerous Remuneratory order (unlawful If parts of a contract are
Beneficenc
Contracts Contracts cause) illegal but the rest are
e
supported by lawful
The The service or Mere cause, claimant of such
undertaking benefit which is liberality of has the burden of
or the remunerated the showing proof;
promise of benefactor otherwise, the whole
the thing or contract is VOID.
service by
the other
party Contract with illegal
cause may still produce
effect in certain cases
Moral Obligation as a Cause where parties are not of
equal guilt: (1) innocent
In Villaroel v. Estrada (1940), where a moral
party cannot be
obligation is based upon a previous civil
compelled to perform his
obligation which has already been barred by
obligation and he may
the statute of limitations at the time the
recover what has already
contract is entered into, it constitutes a
been given; (2) if both
sufficient cause or consideration to support a
parties are guilty, neither
contract (natural obligation).
can sue the other, the
law leaving them as they
are (in pari delicto).
BUT,
Falsity of cause – Contract with a false
In Fisher v. Robb (1939), if the moral
cause is stated cause is merely
obligation arises wholly from ethical
but is untrue revocable/voidable.
considerations, it cannot constitute a
sufficient cause to support an onerous
contract, as when the promise is made on the
Parties are given a
erroneous belief that one was morally
chance to show that a
responsible for the failure of an enterprise
cause really exists, and
(moral obligation).
that said cause is true
and lawful.
Lesion or Inadequacy of cause

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Cause Effect
III. Form of Contracts
inadequacy of shall not invalidate the
cause – cause is contract except when: (1)
not proportionate there is fraud, mistake, GENERAL RULE:
to object undue influence (2) when
parties intended a Art. 1356, par. 1. Contracts shall be
donation obligatory, in whatever form they may have
been entered into, provided all the essential
requisites for their validity are present
Note: Inadequacy of cause may be a badge of • “Spiritual System” of the Spanish
fraud. Code: The law looks more on the
spirit rather than the form of
contracts

EXCEPTION:
(1) When the law requires that a contract be
in some form in order that it may be valid
or enforceable [Art. 1356, par. 2]
(2) When the law requires that a contract be
proved in a certain way to be enforceable
(Statute of Frauds) [Art. 1356, par. 2]
(3) When the law requires a contract to be in
some form for convenience [Art. 1357 and
1358]

A. KINDS OF FORMALITIES REQUIRED


BY LAW

A.1. FOR THE VALIDITY OF CONTRACTS


(AD ESENTIA / AD SOLIMNITATEM/
SOLEMN CONTRACTS)
Formal or Solemn Special Form Required
Contract by Law
Donations of Must be in a public
Immovables instrument [Art. 749]
Donations of Must be in a written
Movables contract if the
donation exceeds
P5,000.- [Art. 748]
Partnerships where Must be in public
real property is instrument; otherwise
contributed the contract of
partnership is void
[Art. 1771, 1773]
Contracts of The principal loan and
antichresis the interest, if any,
must be specified in
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writing; otherwise, the contents:


contract of antichresis a. An agreement that by its terms is not
is void [Art. 2134] to be performed within a year from
the making thereof;
Agency to sell real Authority of the agent
b. A special promise to answer for the
property or any must be in writing;
debt, default, or miscarriage of
interest therein otherwise, the sale is
another;
null and void [Art.
c. An agreement made in consideration
1874]
of marriage, other than a mutual
Stipulation to pay Must be expressly promise to marry;
interest on loans, made in writing [Art. d. An agreement for the sale of goods,
interest for the use 1956] chattels or things in action, at a price
of money not less than five hundred pesos,
unless the buyer accept and receive
Stipulation limiting Must be (1) in writing, part of such goods and chattels, or
common carrier’s signed by the shipper the evidences, or some of them, of
duty of or owner; (2) such things in action or pay at the
extraordinary supported by a time some part of the purchase
diligence to ordinary valuable money; but when a sale is made by
diligence consideration; and (3) auction and entry is made by the
reasonable, just, and auctioneer in his sales book, at the
not contrary to public time of the sale, of the amount and
policy [Art. 1744] kind of property sold, terms of sale,
Chattel mortgage Must be recorded in price, names of the purchasers and
Chattel Mortgage person on whose account the sale is
Register [Art. 2140] made, it is a sufficient memorandum;
e. An agreement of the leasing for a
Transfer of large Requires transfer of longer period than one year, or for the
cattle the certificate of sale of real property or of an interest
registration [Rev. therein;
Adm. Code, Sec. 523] f. A representation as to the credit of a
third person.
3. Those where both parties are incapable
A.2. FOR THE PURPOSE OF PROVING THE of giving consent to a contract.
EXISTENCE OF THE CONTRACT
(ad probationem/ Statute of Frauds)
• This article speaks of contracts that
cannot be proved except by written note
or memorandum, unless the party
Art. 1403. The following contracts are
charged waives the objection [Rule 123,
unenforceable, unless they are ratified:
Sec. 21, Rules of Court]
1. Those entered into in the name of another • This article applies to executory contracts
person by one who has been given no only [Almirol v Monserrat, 1925]
authority or legal representation, or who
has acted beyond his powers;
2. Those that do not comply with the Statute An oral promise to reduce to writing an
of Frauds as set forth in this number. In agreement that is within the Statute of
the following cases an agreement Frauds is itself unenforceable [Reyes and
hereafter made shall be unenforceable by Puno]
action, unless the same, or some note or
memorandum, thereof, be in writing, and
subscribed by the party charged, or by his A.3. FOR THE EFFECTIVITY OF THE
agent; evidence, therefore, of the CONTRACT AGAINST THIRD PERSONS
agreement cannot be received without Art. 1357, Civil Code. If the law requires a
the writing, or a secondary evidence of its document or other special form, as in the
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acts and contracts enumerated in the (2) Enforceable under the Statute of Frauds
following article, the contracting parties may Enumerated contracts in Art. 1358 are valid
compel each other to observe that form, even when not reduced into writing, although
once the contract has been perfected. This parties may have recourse under Art. 1357 to
right may be exercised simultaneously with compel execution of the writing, except in the
the action upon the contract. following cases:
1) Solemn Contracts (action under Art.
Art. 1358, Civil Code. The following must 1357 is not available at all)
appear in a public document: 2) Real Contracts (action under Art. 1357
is available if there is consent, subject
Acts and contracts which have for their matter, cause, and delivery)
object the creation, transmission, 3) Contracts under the Statutes of Fraud
modification or extinguishment of real rights (remedy under Art. 1357 is applicable
over immovable property; sales of real only if the defense of the Statute is
property or of an interest therein a governed waived expressly or impliedly by the
by Articles 1403, No. 2, and 1405; party charged
The cession, repudiation or renunciation of • Action under this Article 1357 may be
hereditary rights or of those of the conjugal exercised simultaneously with (i.e. need
partnership of gains; not be separate nor need it precede) the
action to enforce the contract, although
The power to administer property, or any
questions of form must be decided first.
other power which has for its object an act
appearing or which should appear in a
public document, or should prejudice a third
person;
The cession of actions or rights proceeding
from an act appearing in a public document.
All other contracts where the amount
involved exceeds five hundred pesos must
appear in writing, even a private one. But
sales of goods, chattels or things in action
are governed by Articles, 1403, No. 2 and
1405.

Article 1358 of the Civil Code which requires


the embodiment of certain contracts in a
public instrument, is only for convenience,
and registration of the instrument only
adversely affects third parties. Formal
requirements are, therefore, for the benefit of
third parties. Non-compliance therewith does
not adversely affect the validity of the
contract nor the contractual rights and
obligations of the parties thereunder. [Fule vs
CA, G.R. No. 112212, (1998)]

Before the contracting parties may be


compelled to execute the needed form, the
contract should be:
(1) Perfected or valid

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The action for reformation of instrument


IV. Reformation of should not be confused with the action for
Instruments annulment of contract. [Veluz v Veluz, 1968]:

Reformation of Annulment
Reformation – remedy in equity by means of Instrument
which a written instrument is made or
construed so as to express or conform to the Presupposes a valid, Presupposes a
real intention of the parties when some error existing contract, in defective contract in
or mistake has been committed [Reyes and which there had been which the minds of
Puno] a meeting of the the parties did not
minds of the parties meet, or the consent
Rationale: It would be unjust and inequitable but the instrument of one was vitiated.
to allow the enforcement of a written drawn up and signed
instrument which does not reflect or disclose
by them does not
the real meeting of the minds of the parties correctly express the
[Reyes and Puno] terms of their
agreement.
REQUISITES [Art. 1359]: Equity of reformation Intended to declare
is ordinarily limited the inefficiency which
a. There must be a meeting of the minds of
to written the contract already
the contracting parties
agreements, and its carries in itself and to
b. Their true intention is not expressed in
purpose is to render the contract
the instrument;
establish and inefficacious.
c. Such failure to express their true
perpetuate the true
intention is due to mistake, fraud,
agreement.
inequitable conduct, or accident; and
d. There is clear and convincing proof of
mistake, fraud, inequitable conduct, or
[Multi-Ventures Capital Management
accident
Corporation v Stalwart, 2007]
(1) The presumption is that an instrument
The appellant’s complaint states no cause of
sets out the true agreement of the
action, for it fails to allege that the
parties and that it was executed for
instrument to be reformed does not express
valuable consideration. Thus, when
the real agreement or intention of the parties.
there is some error or mistake in the
Such allegation is essential since the object
contract, the onus probandi is upon the
sought in an action for reformation is to make
party who insists that the contract
an instrument conform to the real agreement
should be reformed.
or intention of the parties. Moreover, courts
(2) While intentions involve a state of mind,
do not reform instruments merely for the
subsequent and contemporaneous acts
sake of reforming them, but only to enable
of the parties as well as the evidentiary
some party to assert right under them as
facts as proved and admitted can be
reformed. [Garcia vs. Bisaya, G.R. No. L-8060,
reflective of one’s intention.
(1955)].
(3) Expediency and convenience, which
was the purpose of the execution of
If mistake, fraud, inequitable conduct, or “purchase and sale agreement”, is not
accident has prevented a meeting of the a ground for reformation of instrument.
minds of the parties, the proper remedy is not
reformation of the instrument but annulment [Rosello-Bentir v Leanda, (2000)]
of the contract [Art. 1359, par.2]
(1) The right of reformation is necessarily
an invasion or limitation of the parol
evidence rule since, when a writing is
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reformed, the result is that an oral other acted fraudulently or inequitably in


agreement is by court decree made such a way that the instrument does not
legally effective. show their true intention, the former may
(2) The prescriptive period for actions ask for the reformation of the instrument
based upon a written contract and for
reformation of an instrument is ten
(10) years under Article 1144 of the Civil Passive (concealment)
Code.
Art. 1363. When one party was mistaken
and the other knew or believed that the
[Quiros vs Arjona, G.R. No. 158901 (2004)] instrument did not state their real
agreement, but concealed that fact from
In granting reformation, the remedy in equity the former, the instrument may be
is not making a new contract for the parties, reformed.
but establishing and perpetuating the real
contract between the parties which, under
the technical rules of law, could not be A.3. INEQUITABLE CONDUCT
enforced but for such reformation.
Art. 1362. If one party was mistaken and the
other acted fraudulently or inequitably in
A. CASES WHERE REFORMATION IS such a way that the instrument does not
show their true intention, the former may ask
PROPER for the reformation of the instrument.
A.1. MISTAKE
The mistake should be of fact generally, and
A.4. ACCIDENT
not of law [BPI v Fidelity and Surety Co., 1927]
Mutual Art. 1364. When through the ignorance, lack
of skill, negligence or bad faith on the part of
Art. 1361. When a mutual mistake of the the person drafting the instrument or of the
parties causes the failure of the instrument clerk or typist, the instrument does not
to disclose their real agreement, said express the true intention of the parties, the
instrument may be reformed. courts may order that the instrument be
reformed.
No fraud exists in the sense that neither of
Unilateral
the parties took part therein.
Art. 1362. If one party was mistaken and the
other acted fraudulently or inequitably in
such a way that the instrument does not A.5. SEVERE PACTO DE RETRO /
show their true intention, the former may RELATIVE SIMULATION
ask for the reformation of the instrument.
Art. 1365. If two parties agree upon the
mortgage or pledge of real or personal
property, but the instrument states that the
Art. 1363. When one party was mistaken
property is sold absolutely or with a right of
and the other knew or believed that the
repurchase, reformation of the instrument is
instrument did not state their real
proper.
agreement, but concealed that fact from
the former, the instrument may be
reformed.
B. WHO MAY ASK FOR REFORMATION
[ART. 1368]
A.2. FRAUD
Active 1. Either party of his successors in interest,
Art. 1362. If one party was mistaken and the if the mistake was mutual; otherwise,

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2. Upon petition of the injured party, or his 3. When the real agreement is void—
heirs and assigns because there is nothing to reform

C. CASES WHERE REFORMATION IS Implied Ratification/Estoppel: the party who


NOT PROPER has brought an action to enforce the
instrument cannot subsequently ask for its
reformation [Art. 1367]
1. Simple donations inter vivos—wherein no
condition is imposed—because donation
is an act of liberality [Art. 725] and
cannot be compelled);
2. Wills—no reformation before the testator
dies because the making of a will is
strictly personal [Art. 784], a free act [Art.
839], and essentially revocable [Art.
828];

V. Interpretation of Contract

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A. PRIMACY OF INTENTION
Separability Clause
a. If the terms of a contract are clear and Another fundamental rule in the
leave no doubt upon the intention of the interpretation of contracts is that the terms,
contracting parties, the literal meaning of its clauses and conditions contrary to law,
stipulations shall control. morals and public order should be separated
from the valid and legal contract and when
b. If the words appear to be contrary to the such separation can be made because they
evident intention of the parties, the latter are independent of the valid contract. A
shall prevail over the former. [Art 1370] lawful promise made for a lawful
c. However general the terms of a contract consideration is not invalid merely because
may be, they shall not be understood to an unlawful promise was made at the same
comprehend things that are distinct and time and for the same consideration. [Kasilag
cases that are different from those upon v Rodriguez, 1939]
which the parties intended to agree. [Art. Exception:
1372]
(1) Where the statute expressly or by
necessary implication declares the
CARDINAL TEST entire contract void
(2) Where the terms, clauses, and
conditions, by an established
Intention of the parties, to be derived from connection or by manifest intention of
the terms/language of the contract. the parties, is inseparable from the
principal obligation, and is a condition,
Where the language of a contract is plain and
juridically speaking, of that the nullity
unambiguous, its meaning should be
of which it would also occasion
determined without reference to extrinsic
[Manresa]
facts or aids. The intention of the parties
must be gathered from that language, and
from that language alone. Courts cannot Interpretation of Contracts of Adhesion
make for the parties better or more equitable
It bears stressing that a contract of adhesion
agreements than they themselves have been
is just as binding as ordinary contracts. It is
satisfied to make, or rewrite contracts
true that the SC has, on occasion, struck
because they operate harshly or inequitably
down such contracts as void when the weaker
as to one of the parties, or alter them for the
party is imposed upon in dealing with the
benefit of one party and to the detriment of
dominant bargaining party and is reduced to
the other, or by construction, relieve one of
the alternative of taking it or leaving it,
the parties from the terms which he completely deprived of the opportunity to
voluntarily consented to, or impose on him
bargain on equal footing. Nevertheless,
those which he did not [Bautista v CA, 2000].
contracts of adhesion are not invalid per se;
they are not entirely prohibited.The one who
While ordinarily the literal sense of the words
adheres to the contract is in reality free to
employed is to be followed, such is not the
reject it entirely; if he adheres, he gives his
case where they "appear to be contrary to the
consent.
evident intention of the contracting parties."
Intention shall prevail. [Borromeo v Reyes, While ambiguities in a contract of adhesion
1972] are to be construed against the party that
prepared the same, this rule applies only if
the stipulations in such contract are obscure
Nomenclature is not decisive of the character or ambiguous. If the terms thereof are clear
and leave no doubt upon the intention of the
A contract is what the law defines it to be,
contracting parties, the literal meaning of its
and not what it is called by the contracting
stipulations shall control. In the latter case,
parties. The Title of the contract does not
necessarily determine its nature [Tolentino]
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there would be no need for construction. interpreted according to the legal


[RCBC vs CA G.R. No. 133107(1999)] meaning it bears in the place of its
execution, UNLESS the parties intended
otherwise.
B. RULES ON DOUBTS [ART. 1378] Sec. 11. Instrument construed so as to give
effect to all provisions
When it is absolutely impossible to settle In the construction of an instrument,
doubts by the rules established in the where there are several provisions or
preceding articles: particulars, such a construction is, if
possible, to be adopted as will give effect
Principal Incidental Incidental to all.
object/s circumstances circumstances
of any of gratuitous of onerous Sec. 12. Interpretation according to
contact contracts contracts intention; general and particular
provisions.
Doubts Absolutely Absolutely
where it impossible to impossible to In the construction of an instrument, the
cannot be settle doubts settle doubts intention of the parties is to be pursued;
known by the rules by the rules and when a general and a particular
what may and only refer and only refer provision are inconsistent, the latter is
have to incidental to incidental paramount to the former. So a particular
been the circumstances, circumstances intent will control a general one that is
intention the least the doubt shall inconsistent with it.
or will of transmission of be settled in Sec. 13. Interpretation according to
the rights and favor of the circumstances.
parties, interests shall greatest
the prevail. reciprocity of For the proper construction of an
contract interests. instrument, the circumstances under
shall be which it was made, including the
null and situation of the subject thereof and of
void. the parties to it, may be shown, so that
the judge may be placed in the position
of those who language he is to interpret.
Sec. 14. Peculiar signification of terms.
The terms of a writing are presumed to
have been used in their primary and
C. FROM RULE 123, RULES OF general acceptation, but evidence is
COURT admissible to show that they have a
local, technical, or otherwise peculiar
Art. 1379 The principles of interpretation signification, and were so used and
stated in Rule 123 of the Rules of Court understood in the particular instance, in
shall likewise be observed in the which case the agreement must be
construction of contracts construed accordingly.
Sec. 15. Written words control printed.
NOTE: This is now found in Rule 130, When an instrument consists partly of
Sections 10-19. written words and partly of a printed
form, and the two are inconsistent, the
former (written) controls the latter
Rule 130 (printed).
Sec. 10. Interpretation of a writing Sec. 16. Experts and interpreters to be used
according to its legal meaning in explaining certain writings.
The language of a writing is to be When the characters in which an
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instrument is written are difficult to be


deciphered, or the language is not VI. Defective Contracts
understood by the court, the evidence of
persons skilled in deciphering the A. RESCISSIBLE CONTRACTS
characters, or who understand the
language, is admissible to declare the Contracts which are valid until rescinded. All
characters or the meaning of the essential requisites of a contract exist but
language. there is injury or damage to one of the parties
or to third persons – external or extrinsic
Sec. 17. Of Two constructions, which defect consisting of an economic damage or
preferred. lesion. [Paras]
When the terms of an agreement have
been intended in a different sense by the
different parties to it, that sense is to A.1. RESCISSION
prevail against either party in which he Process designated to render inefficacious a
supposed the other understood it, and contract validly entered into and normally
when different constructions of a binding, by reason of external conditions,
provision are otherwise equally proper, causing an economic prejudice to a party or
that is to be taken which is the most to his creditors [Scaevola].
favorable to the party in whose favor the
provision was made. Remedy granted by law to the contracting
parties and to third persons in order to secure
Sec. 18. Construction in favor of natural reparation for damages caused them by a
right. contract, even if the contract is valid, by
When an instrument is equally means of the restoration of things to their
susceptible of two interpretations, one in condition prior to the celebration of said
favor of natural right and the other contract [Manresa]
against it, the former is to be adopted. Relief to protect one of the parties or a third
Sec. 19. Interpretation according to usage. person from all injury and damages which the
contract may cause, to protect some
An instrument may be construed preferential right [Aquino v. Tañedo, 1919]
according to usage, in order to determine
its true character. Rescission is a remedy granted by law to the
contracting parties and even to third persons,
to secure reparation for damages caused to
them by a contract, even if this should be
valid, by means of the restoration of things to
their condition at the moment prior to the
celebration of said contract. [Tolentino]

Lesion
The injury which one of the parties suffers by
virtue of a contract which is disadvantageous
for him. To give rise to rescission, the lesion
must be known or coud have been known at
the time of making of the contract. [Tolentino]

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A.2. CHARACTERISTICS OF RESCISSIBLE


CONTRACTS: Art. 1191 – Rescission
Art. 1381 – Rescission
(1) The defect consists in injury or or Resolution for
by reason of lesion
Breach of Stipulation
damage either to one of the
contracting parties or to third
persons; The reparation of The cause of action is
(2) Before rescission, they are valid, and damages for the subordinated to the
therefore, legally effective; breach is purely existence of an
(3) They can be attacked directly only secondary. economic prejudice.
and not collaterally; Hence, where the
(4) They can be attacked only by a defendant makes
good the damages
contracting party or a third person
caused, the action
who is injured or defrauded; and cannot be maintained
(5) They are susceptible of convalidation or continued.
only by prescription and not
ratification Mutual restitution when declared proper as
between the parties involved
A.3. DISTINGUISHED FROM Constitutes Constitutes
RESCISSION/RESOLUTION UNDER ART. termination of the abrogation of the
1191 obligation and contract from the
[Congregation of the Religious Virgin Mary vs. release of the beginning and to
Orola, 2008] parties from further restore the parties to
obligations from their relative positions
each other as if no contract has
Art. 1191 – Rescission been made
Art. 1381 – Rescission
or Resolution for
by reason of lesion Declares the contract
Breach of Stipulation
void at its inception
and puts an end to it
as though it never was
Applies only to Applies whether
reciprocal obligations are
May be demanded May be demanded by
obligations, such reciprocal or unilateral
only by a party to a third party
that a party’s breach and whether the
the contract prejudiced in the
thereof partakes of contract has been fully
contract
a tacit resolutory fulfilled
condition which
May be denied by Extension of time does
entitles the injured
court when there is not affect the right to
party to rescission.
sufficient reason to ask for rescission
justify the extension
Predicated on Predicated on injury to
of time
breach of faith. economic interests of
the party
Non-performance is Various reasons of
plaintiff/lesion.
the only ground for equity are grounds for
HOWEVER, not all
the right to rescission
economic prejudices
rescission
are recognized by law.

Principal action that Subsidiary action.


A.4. REQUISITES OF A VALID RESCISSION
is retaliatory in
[ART. 1381-1383, 1385, 1389]
character.

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(4) There is no other legal means of


Art. 1381. The following contracts are
rescissible: obtaining reparation for the lesion.
[Art. 1383]
(1) Those which are entered into by
guardians whenever the wards whom (5) Person bringing the action must be
able to return whatever he may be
they represent suffer lesion by more
than one-fourth of the value of the obliged to restore. [Art. 1385(1)]
things which are the object thereof; (6) Object of the contract must not be
legally in the possession of a third
(2) Those agreed upon in representation
person who did not act in bad faith
of absentees, if the latter suffer the
[Art. 1385(2)]
lesion stated in the preceding
number; Note: for Art. 1381 (4): Any disposition of the
(3) Those undertaken in fraud of creditors thing subject of litigation or any act which
when the latter cannot in any other tends to render inutile the court’s impending
disposition in such case without the
manner collect the claims due them; knowledge and approval of the litigants or of
(4) Those which refer to things under the court, is unmistakably and irrefutably
litigation if they have been entered indicative of bad faith.
into by the defendant without the However, even without knowledge or
knowledge and approval of the approval from the court, the conveyance of a
litigants or of competent judicial property subject of litigation may still be valid
but is susceptible for rescission under Art.
authority;
1381(4).
(5) All other contracts specially declared A definitive judicial determination with
by law to be subject to rescission. respect to the thing subject of litigation is not
a condition sine qua non before the rescissory
action contemplated under Article 1381(4) of
Requisites for Rescission under Art. 1381 (1) (2) the Civil Code may be instituted. The
(1) Contract was entered into by a primordial purpose of Article 1381(4) of the
Civil Code is to secure the possible effectivity
guardian in behalf of his ward or by a of the impending judgment by a court with
legal representative in behalf of an respect to the thing subject of litigation. [Ada
absentee [Arts. 1381, Nos. 1 and 2] v. Baylon, 2012]

Note: A guardian is authorized only to


manage the estate of the ward; should he Requisites before a Contract Entered Into in
dispose a portion thereof without Fraud of Creditors May Be Rescinded:
authority from the court by way of a (1) There is a credit existing prior to the
contract, the same is unenforceable under
Art. 1403(1), irrespective of whether there celebration of the contract;
is lesion or not. (2) There is fraud, or at least, the intent
to commit fraud to the prejudice of
(2) It was entered into without judicial the creditor seeking rescission;
approval [Art. 1386] (3) Creditor cannot in any legal manner
collect his credit; and
(3) Ward or absentee suffered lesion of
(4) Object of the contract must not be
more than one-fourth of the value of
legally in the possession of a third
the property which is the object of the
person who did not act in bad faith.
contract. [Art. 1381, Nos. 1 and 2]

Accion Pauliana
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The action to rescind contracts in fraud of together with their fruits, and the price with
creditors. Consequently, accion pauliana its interests.
presupposes a judgment and unsatisfied
However, if the object of the contract is in the
execution which cannot exist when the debt is
possession of third persons in good faith,
not yet demandable at the time the rescissory
rescission cannot take place and indemnity
action is brought. [Tolentino]
for damages may be demanded from the
person causing the loss [Art. 1385]
Note: Even secured creditors are entitled to
accion pauliana.
[Lalicon v. National Housing Authority, 2011]
Rescission
Art. 1382. Payments made in a state of
Art. 1191 Art. 1381
insolvency for obligations to whose
fulfillment the debtor could not be
Rescission in Rescission by Reason
compelled at the time they were effected,
Reciprocal of Lesion
are also rescissible.
Obligations
(Resolution)
Requisites before payment made by Insolvent
can be rescinded: A resolutory The action is based
condition is implied on a party’s breach of
(1) It was made in a state of upon breach of one obligation and
insolvency; party. cannot be instituted
(2) Obligation must have been except when the
one which debtor could not party suffering
be compelled to pay at the damage has no other
time such payment was legal means to
obtain reparation.
effected.
[Art. 1383]

Payment made by an insolvent is rescissible. Grants the injured Creates the


(Art. 1382), but a debtor can be compelled to party the option to obligation to return
pay by the creditor even before the expiration pursue, either a the things which
of the period since by his insolvency he has rescission or specific were the object of the
already lost his right to the benefit of such performance of the contract, together
period. [Art. Art. 1198(1)] obligation, with with their fruits, and
payment of damages the price with its
The conflict can be resolved by considering in either case interests
the priority of dates between the two debts. If
the obligation with a period became due This can only be
before the obligation to the creditor seeking carried out when he
the rescission became due, then the latter who demands
cannot rescind the payment even if such rescission can return
payment was effected before the expiration of what he is obliged to
the period; but if the obligation with a period restore, also when
became due after the obligation to the there are none
creditor seeking rescission became due, then endangered third
the latter can rescind the payment. [Manresa] persons who did not
act in bad faith.
Otherwise, damages
Effects of Rescission may be demanded
It creates an obligation to return the things from the person
which were the object of the contract, causing the loss. (Art.

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1385) [China Banking v. CA, 2000, citing Oria v


McMicking, 1912]:
Prescribes in 10 years Prescribes in 4 years
1) Consideration is fictitious or
inadequate;
For persons under guardianship and for 2) Transfer was made while suit had
absentees, the period of four years shall not
begun or pending;
begin until the termination of the former's
incapacity, or until the domicile of the latter is 3) Sale was upon credit by insolvent
known. [Art. 1389] debtor;
4) There was large indebtedness or
Do all creditors benefit from the rescission of complete insolvency;
the contract?
5) Transfer consisted of all or nearly all
As a rule, the rescission should benefit only
property especially when insolvent or
the creditor who obtained the rescission,
because the rescission is to repair the injury greatly;
caused to him by the fraudulent alienation. If 6) The transfer was made between father
a balance is left after satisfying the claim of
and son when other above
the creditor who brought the action, other
creditors who are qualified to bring an accion circumstances present; and
pauliana should be given the benefit of 7) There was failure of vendee to take
rescission, instead of requiring them to bring exclusive possession of all property
other rescissory actions. However, creditors
who only became such after the fraudulent embarrassed financially.
alienation, cannot benefit from the rescission.

B. VOIDABLE CONTRACTS
Presumption of Fraud Contracts which are valid until annulled,
When alienation of property presumed in unless ratified. Defect is more or less intrinsic,
fraud of creditors: as in the case of vitiated consent. [Paras]
a. Alienation by gratuitous title if the Voidable or annullable contracts are existent,
debtor has not reserved sufficient valid and binding, although they can be
property to pay all of his debts annulled because of want of capacity or
contracted before alienation [Art. 1387(1), vitiated consent of one of the parties.
NCC] [Tolentino]
b. Alienation by onerous title if made by a
debtor against whom some judgment
has been rendered in any instance or Art. 1390. The following contracts are
some writ of attachment has been voidable or annullable, even though there
may have been no damage to the
issued [Art. 1387(2), NCC]
contracting parties:
The test as to whether or not a conveyance is (3) Those where one of the parties is
fraudulent is if it prejudices the rights of the
incapable of giving consent to a
creditors. [Tolentino]
contract;
(4) Those where the consent is vitiated by
Badges of Fraud mistake, violence, intimidation, undue
A conveyance leaving no property for other influence or fraud.
creditors to attach is an evidence of fraud.
These contracts are binding, unless they are
annulled by a proper action in court. They
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are susceptible of ratification.


Private interest Direct influence of the
alone governs public interest is
involved
Note: Art. 1390 refers to a “proper action in
court”. The validity of a voidable contract may
May be compatible Based on a vice of the
only be attacked either by way of a direct
with the perfect contract which
action or by way of defense via a counterclaim,
validity of the invalidates it
and not a special or affirmative defense.
contract
[Jurado]
A remedy A sanction
Voidable/ Annullable Contracts:
Equity The law predominates
(1) Those where one of the contracting predominates
parties is incapable of giving consent to
a contract, and May be demanded Can be demanded
(2) Those where the consent is vitiated by by third parties only by parties to the
affected by the contract
mistake, violence, intimidation, undue
contract
influence or fraud.

B.2. CHARACTERISTICS OF VOIDABLE Who may institute action for annulment


CONTRACTS: General Rule: Action for annulment may be
(1) Its defect consists of the vitiation of instituted by all who are thereby obliged
principally or subsidiarily.
consent of one of the contracting
parties; Requisites:
(2) It is binding until it is annulled; 1. Plaintiff must have interest in the
(3) It is susceptible of convalidation by contract;
ratification or prescription; and 2. The victim and not the party
(4) Its defect or voidable character cannot responsible for the vice or defect
be invoked by third persons. must assert the same
Exception: If a third person is prejudiced in
Note: Failure of an heir to obtain authority his rights with respect to one of the
from his co-heirs does not result in his contracting parties and can show detriment
incapacity to give consent so as to render the which would postitively result to him from the
contract voidable, but rather, renders the contract in which he has no intervention.
contract valid but unenforceable against [Teves v. People’s Homesite & housing Corp.,
Conrado’s co-heirs for having been entered 1968]
into without their authority. [Heirs of Ureta, Sr.
v. Heirs of Ureta, September 14, 2011]
Effects of Annulment
If contract has not yet been consummated –
Rescission Annulment parties shall be released from the obligations
arising therefrom.
Merely produces the Declares the inefficacy If contract has already been consummated -
inefficacy of the which the contract The contracting parties shall restore to each
contract, which did already carries in itself other the things which have been the subject
not essentially exist matter of the contract, with their fruits, and
in the contract the price with its interest, except in cases
provided by law. [Art. 1398-1402]
Needs ratification to Requires an act of
be effective ratification to be cured

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Obligation of Mutual Restitution


Grounds for being
When the defect of the contract consists in Reckoning Point
voidable
the incapacity of one of the parties, the
incapacitated person is not obliged to make influence consent ceases
any restitution except insofar as he has been
benefited by the thing or price received by Fraud or Mistake Four years from
him [Art. 1399] discovery thereof
Art. 1399 cannot be applied to those cases Minors and Four years from the
where the incapacitated person can still Incapacitated time the guardianship
return the thing which he has received. Persons ceases.

Constructive Notice
Effects of Failure to Make Restitution Discovery or fraud must be reckoned from the
time the document was registered in the
Loss of thing by Loss of thing by office of the register of deeds. Registration
Plaintiff Defendant constitutes constructive notice to the whole
world. [Carantes v. CA, 1977]
If the loss of the If it is lost through the
onject in his defendant’s fauly, he
possession is due to is liable for fruits B.3. RATIFICATION
his fault or fraud, he received, value of the The act or means by virtue of which efficacy is
cannot ask for thing at the time it given to a contract which suffers from a vice
annulment. was lost, with interest of curable nullity [Arts. 1392-1396].
from the same date. Ratification is either express or tacit.

If the loss of the thing in his possession was (1) EXPRESS or


due to a fortuitous event, the action for (2) TACIT – When the person who has the
annulment is not extinguished. [Tolentino] right to invoke it, with the knowledge of
the reason which renders the contract
voidable and such reason having
Three Ways or Modes of Convalidating a ceased, executes an act implying an
Voidable Contract [Jurado]
intention to waive his right [Art. 1393]
(1) By prescription of the action for annulment
[Art.1391]
Requisites of Ratification
(2) By ratification or confirmation [Art. 1392-
(1) Contract is tainted with a vice
1396]
susceptible of being cured;
(3) By loss of the thing which is the object of (2) Confirmation is effected by the
the contract through the fraud or fault of person who is entitled to do so under
the person who is entitled to institute the the law;
action for the annulment [Art.1401] (3) It is effected with knowledge of the
vice or defect of the contract;
Prescription of the Action for Annulment (4) Cause of the nullity or defect have
already disappeared.
Grounds for being
Reckoning Point
voidable The right to ratify may be transmitted to the
heirs of the party entitled to such right. It may
Intimidation, Four years from the likewise be exercised by the guardian of the
violence, or undue time the defect of the
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incapacitated person having such right. [Art.


1394]
C.1. CHARACTERISTICS:
1. Cannot be enforced by a proper action
Ratification does not require the conformity
of the contracting party who has no right to in court
bring an action for annulment. [Art. 1385] 2. Susceptible of ratification
3. Cannot be assailed by third persons [Art.
1408]
Effect of Ratification
It extinguishes the action for annulment of a C.2. KINDS OF UNENFORCEABLE
voidable contract. [Art. 1392] CONTRACTS
It cleanses the contract from all its defects 1. Unauthorized contracts – those entered
from the moment it was constituted [Art. into by one who has no authority or
1396]
legal representation, or who has acted
beyond his powers [Art. 1403, par.1]
C. UNENFORCEABLE CONTRACTS 2. Those which did not comply with the
Statute of Frauds [Art. 1403, par.2]
Unenforceable Contracts – contracts that by
reason of statutory defects do not confer any 3. Those where both parties are incapable
action to enforce the same until and unless of giving consent to a contract [Art.
they are ratified in the manner prescribed by 1403, par.3]
law [J.B.L. Reyes]

Contract entered into Contracts covered by Contract where both


without authority Statute of Frauds parties are incapable of
giving consent

Effect on the Contract No effect unless ratified. Cannot be enforced by a proper action in court

How to assail Not by direct action. Not by direct action. Not by direct action.
As a defense, by motion As a defense, by motion As a defense, by motion
to dismiss the complaint to dismiss on the ground to dismiss the complaint
on the ground that the that the contract is on the ground that the
contract is unenforceable; contract is
unenforceable unenforceable
Objection to the
presentation of oral
evidence to prove an oral
contract [see Art. 1405]

Who can assail - By person whose name By party against whom By party against whom
cannot be assailed by the contract was entered the contract is being the contract is being
third persons (Art. into / by owner of enforced; or his privies enforced; or his privies;
1408) property or parents or guardians,
as it is a personal
defense

When When a party asks the court to enforce the contract

How to Cure Defect Ratification by person Ratification by party ratification of party


whose name the against whom the against whom the

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contract was entered contract is being enforced contract is being


into enforced; or his privies;
failure to object to the
or parents or guardians
presentation of oral
evidence to prove an oral
contract or by the
The ratification by one
acceptance of benefits
party converts the
under the contract [Art.
contract into a voidable
1405]
contract [Art. 1407]

GENERAL RULES OF APPLICATION OF (3) The Statute of Frauds does not apply if
STATUTE OF FRAUDS it is claimed that the contract does not
(1) The Statute of Frauds is a Rule of express the true agreement of the
Exclusion, i.e. oral evidence might be parties. As long as the true or real
relevant to the agreements enumerated agreement is not covered by the
therein and might therefore be Statute of Frauds, it is provable by oral
admissible were it not for the fact that evidence [Cayuga v Santos]
the law excludes said oral evidence.
(2) The defense of the Statute of Frauds The Statute of Frauds simply provides the
may be waived [Art. 1405] method by which the contracts enumerated
(3) Applies only to executory contracts, not therein may be proved but does not declare
partially or completely executed them invalid because they are not reduced to
writing. [Swedish Match v CA (2004)]:
(consummated) contracts.
(4) The Statute of Frauds is exclusive that
is, it applies only to the agreements or For a note or memorandum to satisfy the
contracts enumerated therein [Quintos Statute, it:
v Morata, 1930] (a) Must be complete in itself and cannot
(5) The Statute of Frauds is a personal rest partly in writing and partly in
defense, that is, a contract infringing it parol.
cannot be assailed by third persons [Art. (b) Must contain the names of the parties,
1408] the terms and conditions of the
(6) Contracts infringing the Statute of contract, and a description of the
Frauds are not void, they are merely property sufficient to render it
unenforceable [Art. 1403] capable of identification.
(c) Must contain the essential elements
EXCEPTIONS TO APPLICATION OF STATUTE of the contract expressed with
OF FRAUD certainty that may be ascertained
(1) The Statute of Frauds cannot apply if from the note or memorandum itself,
the action is neither for damages or some other writing to which it
because of the violation of an refers or within which it is connected,
agreement nor for the specific without resorting to parol evidence.
performance of said agreement
(2) The Statute of Frauds does not The purpose of the Statute is to prevent fraud
determine the credibility or weight of and perjury in the enforcement of obligations
evidence. It merely concerns itself with depending for their evidence on the
unassisted memory of witnesses, by requiring
the admissibility thereof.
certain enumerated contracts and
transactions to be evidenced by a writing
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signed by the party to be charged. [Asia


Productions v Pano (1992)]
D.1. CHARACTERISTICS OF VOID
Even if parol evidence was initially CONTRACTS
inadmissible, the same became competent
(1) It does not produce any legal effect;
and admissible because of the cross-
examination, which elicited evidence proving (2) It is not susceptible of ratification;
the evidence of a perfected contract. The (3) The right to set up the defense of
cross-examination on the contract is deemed inexistence or absolute nullity cannot
a waiver of the defense of the Statute of be waived or renounced;
Frauds. [Limketkai Sons Milling, Inc. v CA (4) The action or defense for the
(1995)] declaration of their inexistence or
nullity is imprescriptible; [Art. 1410]
D. VOID OR INEXISTENT CONTRACTS Note: This provision does not apply to
wills. [Gallanosa v. Arcangel, June 21,
Contracts which have no effect at all and
1978] and
cannot be ratified or validated [Paras]
(5) The inexistence or absolute nullity of
Those which, because of certain defects, a contract cannot be invoked by a
generally produce no effect at all. They are
person whose interests are not
considered as inexistent from its inception or
from the very beginning [De Leon] directly affected. [Art. 1421]

Includes not only those contracts in which Note: Article 1421 is subject to exceptions. For
one of the essential requisites is totally instance, the creditors of a party to an illegal
wanting, but also those which are declared contract may, under the conditions set forth
void by positive provision of law or statute in Article 1177 of said Code, exercise the rights
and actions of the latter, EXCEPT only those
Art. 1409. The following contracts are which are inherent in his person, including
inexistent and void from the beginning: therefore, his right to the annulment of said
(1) Those whose cause, object or purpose contract, even though such creditors are not
is contrary to law, morals, good affected by the same, except indirectly, in the
manner indicated in said legal provision.
customs, public order or public policy;
[Pascual v. Secretary of Public Works,
(2) Those which are absolutely simulated December 29, 1960]
or fictitious; A contract which is the direct result of a
(3) Those whose cause or object did not previous illegal contract is also void and
inexistent. [Art. 1421]
exist at the time of the transaction;
(4) Those whose object is outside the
commerce of men; Void v. Inexistent Contracts

(5) Those which contemplate an Void Inexistent


impossible service;
Those where all the Those where one or
(6) Those where the intention of the requisites of a some or all of the
parties relative to the principal object contract are present requisites essential for
of the contract cannot be ascertained; but the cause, the validity of a
object or purpose is contract are
(7) Those expressly prohibited or declared contrary to law, absolutely lacking
void by law morals, good
customes, public
These contracts cannot be ratified. Neither
order or public
can the right to set up the defense of illegality
policy, or the
be waived.
contract itself is
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between spouses during marriage are


Void Inexistent
prohibited. The prohibitions apply to common
prohibited or law relations. [Ching v. Goyanko, November 10,
declared void by law 2006]
(See: Pactum commissorium, Pactum de non
Principle of pari Principle of pari delicto alienado, Pactum leonina)
delicto is applicable is inapplicable

May produce legal Cannot produce any Divisibility of Contracts


effects effect
In contracts with separate provisions, the
Covers Art. 1409 Covers Art. 1409 nos. invalidity of one does not automatically
nos. 1, 3, 4, 5, 6 and 2 and 3 render the other invalid. Art. 1420 of the New
7 Civil Code holds that "In case of a divisible
contract, if the illegal terms can be separated
from the legal ones, the latter may be
Void v. Voidable Contracts enforced." Contrary to the suppositions of
petitioners, the invalid stipulation is
Void Voidable independent from the rest of the terms of the
agreement and can easily be separated
Those where one of Those where all the therefrom without doing violence to the
the essential essential requisites manifest intention of the parties. This being
requisites is are present, but so, the legal terms of the contract can be
wanting, either in consent is vitiated by enforced. [Spouses Litonjua v. L & R
fact or in law, or is want of capacity, or by Corporation, March 27, 2000]
declared void by error, violence,
statute. intimidation, or deceit
In Pari Delicto Principle (in pari delicto, non
Void; no contract at Valid until annulled oritur actio)
all Parties to a void agreement cannot expect
the aid of the law; the courts leave them as
May be assailed Must be assailed they are, because they are deemed in pari
indirectly through an action for delicto or "in equal fault." [Menchavez vs.
that purpose by a Tevez (2005)]. This requires:
party to the contract,
and never by a third (1) When the defect of a void contract
person (direct attack) consists in the illegality of the cause or
object of the contract and both parties
Nullity may be set- Nullity may only be are at fault or in pari delicto, the law
up against anyone set-up against a party refuses them any remedy and leaves
who asserts a right thereto.
them where they are. [Arts. 1411-1419]
arising from it.
(2) If the act in which the unlawful or
Not susceptible to May be validly ratified forbidden cause consists does not
ratification constitute a criminal offense. [Art. 1412]
Action to declare Action for annulment
nullity does not prescribes
Exceptions to the Principle of In Pari Delicto:
prescribe
(1) Payment of usurious interest [Art. 1413]

The law prohibits the spouses from selling (2) Payment of money or delivery of
property to each other, subject to certain property for an illegal purpose, where
exceptions. [Art. 1490] Similarly, donations the party who paid or delivered
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repudiates the contract before the (1) the contract is not illegal per se but
purpose has been accomplished, or merely prohibited;
before any damage has been caused to
(2) the prohibition is for the protection of
a third person [Art. 1414] [See: Hulst v.
the plaintiffs; and
PR Builders Inc., September 3, 2007]
(3) if public policy is enhanced thereby.
(3) Payment of money or delivery of
[Acabal v. Acabal, March 31, 2005] See
property made by an incapacitated
also: Arts. 1345 and 1346
person [Art. 1415]
Non-Existing Cause or Object [Paras]
(4) Agreement or contract not illegal per se
but merely prohibited by law, and the Art. 1409(3) speaks of contracts “whose
prohibition is designed for the object or cause did not exist at the time of the
transaction.” This is not exactly correct
plaintiff’s protection [Art. 1416] Note: because there can be valid contracts
When the assailed contracts are void involving future property; example, sale of
ab initio, Art. 1416 cannot be applied, future or after-acquired property. Thus,
as in the case of aliens purchasing Justice J. B. L. Reyes notes: “did not exist at
property despite knowing fully well the the time of the transaction” should be “could
constitutional prohibition against not come into existence because the object
may legally be a future thing.”
foreigners owning land in the
Philippines at the time of purchase.
[Frenzel v. Catito, July 11, 2003]
(5) Payment of any amount in excess of
the maximum price of any article or
commodity fixed by law [Art. 1417]
(6) Contract whereby a laborer undertakes
to work longer than the maximum
number of hours fixed by law [Art. 1418]
(7) Contract whereby a laborer accepts a
wage lower than the minimum wage
fixed by law [Art. 1419]
(8) In case of divisible contracts, the legal
terms may be enforced separately from
the illegal terms [Art. 1420]; and
(9) One who lost in gambling because of
fraudulent schemes practiced on him.
He is allowed to recover his losses [Art.
315(3)(b)] even if gambling is prohibited

The principle of in pari delicto admits of an


exception under Art. 1416 of the Civil Code
Under this article, recovery for what has been
paid or delivered pursuant to an inexistent
contract is allowed only when the following
requisites are met:

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VII. Natural
Natural Civil
Obligations Obligations Obligations
As to Not by court Court action
Those based on equity and natural law, which enforceability actions, but or the
do not grant a right of action to enforce their by good coercive
performance, but after voluntary fulfillment conscience power of
by the obligor, authorize the retention of of debtor public
what has been delivered or rendered by authority
reason thereof [Art. 1423]
As to basis Equity and Positive law
Note: The binding tie is the conscience of man natural [Art. 1157]
In order that there may be a natural justice
obligation there must exist a juridical tie
which is not prohibited by law and which in
itself could give a cause of action but because
of some special circumstances is actually Natural Obligations Moral Obligations
without legal sanction or means of enforcing
compliance by intervention of courts. There is a juridical No juridical tie
[Tolentino] tie between the whatsoever.
parties which is not
enforceable by court
Four Types of Obligations in Juridical Science action.
(1) Moral Obligations – duties of Voluntary Voluntary fulfillment
conscience completely outside the field fulfillment of such of such does not
of law produces legal produce any legal
effects which the effect which the court
(2) Natural Obligations – duties not court will recognize will recognize and
sanctioned by any action but have a and protect. protect.
relative judicial effect Within the domain Within the domain of
(3) Civil Obligations – juridical obligations of law morals
that are in conformity with positive law
but are contrary to juridical principles The promise made by an organizer of a dog
and susceptible of being annulled; racing course to a stockholder to return to
enforceable by action him certain amounts paid by the latter in
satisfaction of his subscription upon the
(4) Mixed Obligations – full juridical effect; belief of said organizer that he was morally
falls under civil obligations responsible because of the failure of the
enterprise, is not the consideration required
by Art. 1261 of the Civil Code as an essential
Two Conditions Necessary for Natural element for the legal existence of an onerous
Obligations: contract which would bind the promissor to
(1) That there be a juridical tie between comply with his promise. The promise was
two persons; and prompted by a feeling of pity and is, therefore,
purely moral and as such, not demandable in
(2) That this tie is not given effect by law law but only in conscience, over which human
judges have no consideration. [Fisher v. Robb,
November 2, 1939]

Conversion to Civil Obligations

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General Rule: Partial payment of a natural (2) The right to sue upon it has already
obligation does not make it civil; the part paid lapsed by extinctive prescription
cannot be recovered but the payment of the
balance cannot be enforced. (3) Obligor performs contract voluntarily
 applicable only to natural obligations
because of prescription or lack of formalities Consequence: Obligor cannot recover what he
(nullity due to form e.g. Art. 1430) and not to has delivered or value of the service he
natural obligation subject to ratification or rendered.
confirmation

Art. 1425. When without the knowledge or against the will of


Note: Payment by mistake is not voluntary the debtor, a third person pays a debt which the obligor is not
legally bound to pay because the action thereon has
and may be recovered. Payment is voluntary prescribed, but the debtor later voluntarily reimburses the
when the debtor knew that the obligation is a third person, the obligor cannot recover what he has paid.
natural one. The debtor, however, has the
burden of proving the mistake.
Requisites under Art 1425 (Prescribed Civil
(1) By novation Obligation – Payment to 3rd Person)
(2) By ratification or confirmation (1) There is a debt
(2) Action upon the debt has prescribed
Rules on Natural Obligation: (3) A third person, without the knowledge or
(1) The promise to perform a natural against the will of the debtor, pays the
obligation is as effective as performance debt
itself, and converts the natural obligation
(4) Debtor voluntarily reimburses the third
to a civil obligation.
person
(2) Partial payment of a natural obligation
does not make it civil; the part paid
cannot be recovered, but payment of the Consequence: Obligor cannot recover what he
balance cannot be enforced. The has paid.
exception would be if the natural
obligation is susceptible of ratification. Art. 1426. When a minor between eighteen and twenty-one
years of age who has entered into a contract without the
(3) Guaranties for the performance of a consent of the parent or guardian, after the annulment of the
contract voluntarily returns the whole thing or price received,
natural obligation are valid. notwithstanding the fact that he has not been benefited
thereby, there is no right to demand the thing or price thus
(4) Payment of a natural obligation is not returned.
subject to reduction by reason of
inofficiousness, appearance of children or
Requisites under Art 1426 (Voluntary Return
ingratitude.
of Payment – Minor between 18 and 21)
Examples of Natural Obligations (1) There is a civil obligation
Art. 1424. When a right to sue upon a civil obligation has
lapsed by extinctive prescription, the obligor who voluntarily (2) Minor between 18 and 21 entered into
performs the contract cannot recover what he has delivered
or the value of the service he has rendered. the contract without consent of parent or
guardian

Requisites under Art 1424 (Prescribed Civil (3) Obligation is annulled after minor
has received the price or whole thing
Obligation – Obligor)
(1) There is a civil obligation (4) Minor returns whole thing or price
received voluntarily

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(2) An action to enforce such has failed


Consequence: There is no right to demand (3) Defendant voluntarily performs the
the thing or price returned. obligation

Art. 1427. When a minor between eighteen and twenty-one


years of age, who has entered into a contract without the Consequence: Defendant cannot demand
consent of the parent or guardian, voluntarily pays a sum of return of what he has delivered or the
money or delivers a fungible thing in fulfillment of the
obligation, there shall be no right to recover the same from payment of the value of the service
the obligee who has spent or consumed it in good faith.

Art. 1429. When a testate or intestate heir voluntarily pays a


debt of the decedent exceeding the value of the property
Requisites under Art 1427 (Voluntary Payment which he received by will or by the law of intestacy from the
– Minor between 18 and 21) estate of the deceased, the payment is valid and cannot be
rescinded by the payer.
(1) There is a civil obligation
(2) Minor between 18 and 21 entered into Requisites under Art 1429 (Payment made by
the contract without consent of parent or
Heir)
guardian
(1) Decedent incurred in debt during his
(3) Minor pays a sum of money or lifetime
delivers a fungible thing voluntarily
(2) Heir voluntarily pays debt
(4) Obligee spends the money or
consumes the thing in good faith (3) Value of debt exceeds value of heir’s
inheritance
Consequence: There is no right to recover the
money paid or thing delivered. Consequence: Payment is valid and heir
cannot rescind it.
It is not the voluntary payment that prevents
recovery, but the consumption or spending of Art. 1430. When a will is declared void because it has not
the thing or money in good faith. been executed in accordance with the formalities required by
law, but one of the intestate heirs, after the settlement of the
debts of the deceased, pays a legacy in compliance with a
clause in the defective will, the payment is effective and
Art 1426 and 1427 Distinguished irrevocable.

1426 1427
Presupposes a prior No prior annulment is Requisites under Art 1430 (Payment of legacy
annulment involved
– Will declared Void)
Refers to any object Refers to money or fungible
things (1) There is a will providing for a legacy
Consumption in good faith is Requires consumption in
not required good faith (2) The will is declared void because it was
not executed in accordance with the
formalities required by law
Art. 1428. When, after an action to enforce a civil obligation
has failed the defendant voluntarily performs the obligation, (3) Heir pays legacy
he cannot demand the return of what he has delivered or the
payment of the value of the service he has rendered.

Consequence: Payment is effective and


Requisites under Art 1428 (Payment by irrevocable.
Defendant notwithstanding failed action)
(1) There is a civil obligation

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estoppel against the City of Manila in this


VIII. Estoppel case would be tantamount to enabling it to
do indirectly what it could not do directly.
A. DEFINITION Cases where estoppel applies
A condition or state by virtue of which an
admission or representation is rendered 1. When a person who is not the owner of a
conclusive upon the person making it, and thing sells or alienates and delivers it, and
cannot be denied or disproved as against the later the seller or grantor acquires title
person relying thereon [Art. 1431] thereto, such title passes by operation of law
to the buyer or grantee [Art. 1434].

B. KINDS OF ESTOPPEL 2. If a person in representation of another


(1) Estoppel in pais or by conduct [Art. 1433] sells or alienates a thing, the former cannot
subsequently set up his own title as against
a. Estoppel by silence [Art. 1437]
the buyer or grantee [Art. 1435].
b. Estoppel by acceptance of benefits
3. A lessee or a bailee is estopped from
(2) Technical Estoppels asserting title to the thing leased or received,
a. Estoppel by Deed – a party to a deed as against the lessor or bailor [Art. 1436].
is precluded from asserting as against
4. When in a contract between third persons
the other party, material fact asserted
concerning immovable property, one of them
therein; (Art. 1433) and
is misled by a person with respect to the
b. Estoppel by Record – a party is ownership or real right over the real estate,
precluded from denying the truth of the latter is precluded from asserting his
matters set forth in a record whether legal title or interest therein, provided all
judicial or legislative these requisites are present:
(3) Estoppel by Judgment – a party to a case
(1) There must be fraudulent representation
is precluded from denying the facts
or wrongful concealment of facts known to
adjudicated by a court of competent
the party estopped;
jurisdiction
(4) Estoppel by laches (2) The party precluded must intend that the
other should act upon the facts as
misrepresented;
Persons bound
(3) The party misled must have been unaware
Estoppel is effective only as between the of the true facts; and
parties thereto or their successors-in-interest.
[Art 1439] (4) The party defrauded must have acted in
The government is not estopped by mistake accordance with the misrepresentation [Art.
or error on the part of its officials or agents. In 1437].
Manila Lodge No. 761 Benevolent and
Protective Order of the Elks v. CA (1976), the (5) One who has allowed another to assume
sale executed by the City of Manila to Manila apparent ownership of personal property for
Lodge was certainly a contract prohibited by
the purpose of making any transfer of it,
law, and that estoppel cannot be urged even
if the City of Manila accepted the benefits of cannot, if he received the sum for which a
such contract of sale and the Manila Lodge pledge has been constituted, set up his own
No. 761 had performed its part of the title to defeat the pledge of the property,
agreement, for to apply the doctrine of made by the other to a pledgee who received
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the same in good faith and for value [Art.


1438].
IX. Trusts
C. LACHES DEFINITION

Failure or neglect, for an unreasonable and A fiduciary relationship with respect to


unexplained length of time, to do that which, property, subjecting the person holding the
by exercising due diligence, could or should same to the obligation of dealing with the
have been done earlier. It is negligence or property for the benefit of another person
omission to assert a right within a reasonable [Reyes and Puno]
time, warranting a presumption that the
party entitled to assert it either has
abandoned it or declined to assert it. [Miguel Characteristics of Trust:
v. Catalino, November 29, 1968] 1. It is a relationship
Elements 2. The relationship is of fiduciary character
3. The relationship is with respect to
(1) Conduct on the part of the defendant,
property, not one involving merely
or of one under whom he claims, giving
personal duties
rise to the situation of which complaint
4. It involves the existence of equitable
is made and for which the compaint
duties imposed upon the holder of the
seeks a remedy;
title to the property to deal with it for the
(2) Delay in asserting the complainant’s benefit of another
rights, the complainant having had 5. It arises as a result of a manifestation of
knowledge or notice of the defendant’s intention to create the relationship
conduct and having been afforded an
opportunity to institute a suit;
Trust as distinguished from other concepts
(3) Lack of knowledge or notice on the part Trust Stipulation pour autrui
of the defendant that the complaint
would assert the right on which he Refers to a specific Involves any
property stipulation in favor of
bases his suit; and a third person
(4) Injury or prejudice to the defendant in
the event relief is accorded to the
Trust Condition
complainant, or the suit is not held to
be barred Performance of Performance or
trust is enforceable accomplishment is not
Prescription Laches enforceable
Concerned with the Concerned with the
fact of delay effect of delay
Question or matter Question of inequity of Trust Guardianship or
of time permitting the claim Executorship
to be enforced
Statutory Not statutory Trustees has legal Guardians or Executors
Applies in law Applies in equity title to the property do not have legal title
Cannot be availed of Being a defense in but mere actual
unless it is equity, it need not be possession and limited
specifically pleaded specifically pleaded powers over the
as an affirmative property
allegation
Based on a fixed Not based on a fixed
time time

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A. GOVERNING RULES 2. Where the trust is over personal property,


an oral trust is sufficient between the
Art. 1442. The principles of the general law
of trusts insofar as they are not in conflict parties.
with this Code, the Code of Commerce, the 3. But to bind third persons the trust must
Rules of Court and special laws are hereby be in a public instrument [Art. 1358(1)
adopted. and (3)]

B. PARTIES [ART. 1440] Form of Express Trusts

1. Trustor – the person who establishes Art. 1444. No particular words are required
for the creation of an express trust, it being
the trust
sufficient that trust is clearly intended
2. Trustee – one in whom the confidence
is reposed as regards property for the
benefit of another person Want of Trustee
3. Beneficiary or cestui que trust – person
Art. 1445. No trust shall fail because the
for whose benefit the trust has been trustee appointed declines the designation,
created unless the contrary should appear in the
instrument constituting the trust
C. KINDS OF TRUST To permit the trust to fail for want of trustee
is to defeat the intention of the trustor in
creating the trust.
C.1. EXPRESS TRUST
Created by the intention of the trustor or
of the parties [Art. 1441] Acceptance by beneficiary

Elements: Acceptance by beneficiary is necessary [Art.


1446]. It may be:
1. Competent trustor or settlor
1. Express
2. Trustee
3. Ascertainable trust res / Trust property 2. Implied
4. Sufficiently certain beneficiaries
• Acceptance by the beneficiary is
not subject to the formal rules of
Trust is created:
donations [Cristobal v Gomez,
1. By declaration of the trustor or settlor 1927]
that he holds property in trust
2. By conveyance to the trustee: 3. Presumed – if the trust imposes no
a. Inter vivos, or onerous condition upon the
b. By testament beneficiary

Proof Required: Termination of Express Trusts


1. No express trusts concerning an 1. Revocation or modification by the
immovable or any interest therein may trustor under a reserved power
be proved by parol evidence [Art. 1443].
2. Rescission
o Trusts over real property are
unenforceable unless in writing, 3. Expiration of the period or happening
although writing is not required for of the resolutory condition
validity, only for proof. 4. Accomplishment of the purpose or its
becoming impossible or illegal
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5. Dissolution by the Court if instrument of conveyance [Salao v.


continuation will defeat the purpose Salao, 1976]
of the trust
6. Dissolution by the consent of all the Art. 1448. There is an implied trust when
beneficiaries and/or the settlor property is sold, and the legal estate is
7. Merger granted to one party but the price is paid by
another for the purpose of having the
beneficial interest of the property. The former
is the trustee, while the latter is the
C.2. IMPLIED TRUST
beneficiary. However, if the person to whom
the title is conveyed is a child, legitimate or
illegitimate, of the one paying the price of the
How established
sale, no trust is implied by law, it being
Implied trusts come into being by operation disputably presumed that there is a gift in
of law [Art. 1441]. favor of the child.
Art. 1449. There is also an implied trust when
The essential idea involves a certain a donation is made to a person but it appears
antagonism between the cestui que trust and that although the legal estate is transmitted
the trustee even where the trust has not to the donee, he nevertheless is either to have
arisen out of fraud or an immoral transaction no beneficial interest or only a part thereof.
[J.B.L. Reyes] Art. 1451. When land passes by succession to
any person and he causes the legal title to be
put in the name of another, a trust is
Proof required established by implication of law for the
Art. 1457. An implied trust may be proved by benefit of the true owner.
oral evidence Art. 1452. If two or more persons agree to
purchase property and by common consent
the legal title is taken in the name of one of
A trust must be proven by clear, satisfactory them for the benefit of all, a trust is created
and convincing evidence. It cannot rest on by force of law in favor of the others in
vague and uncertain evidence or on loose, proportion to the interest of each.
equivocal or indefinite declarations [De Leon v.
Molo-Peckson, 1962] Art. 1453. When property is conveyed to a
person in reliance upon his declared intention
to hold it for, or transfer it to another or the
Where a trust is to be established by oral grantor, there is an implied trust in favor of
proof, the testimony supporting it must be the person whose benefit is contemplated.
sufficiently strong to prove the right of the
alleged beneficiary with as much certainty as
if a document proving the trust were shown C.3. CONSTRUCTIVE TRUST
[Suarez v. Tirambulo, 1933] Constructive Trusts - a trust not created by
any words, either expressly or impliedly
evincing a direct intension to create a trust,
Examples of Implied Trusts but by the construction of equity in order to
1. Resulting Trusts - a trust raised by satisfy the demands of justice [Salao v Salao,
implication of law and presumed to 1976]
have been contemplated by the parties,
the intention as to which is to be found Art. 1450. If the price of a sale of property is
in the nature of their transaction, but loaned or paid by one person for the benefit
not expressed in the deed or of another and the conveyance is made to

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the lender or payor to secure the payment of


the debt, a trust arises by operation of law in
favor of the person to whom the money is
loaned or for whom it’s is paid. The latter
may redeem the property and compel a
conveyance thereof to him.
Art. 1454. If an absolute conveyance of
property is made in order to secure the
performance of an obligation of the grantor
toward the grantee, a trust by virtue of law is
established. If the fulfillment of the
obligation is offered by the grantor when it
becomes due, he may demand the
reconveyance of the property to him.
Art. 1455. When any trustee, guardian or
other person holding a fiduciary relationship
uses trust funds for the purchase of property
and causes the conveyance to be made to
him or to a third person, a trust is
established by operation of law in favor of
the person to whom the funds belong.
Art. 1456. If property is acquired through
mistake or fraud, the person obtaining it is,
by force of law, considered a trustee of an
implied trust for the benefit of the person
from whom the property comes.

Express trust is a "continuing and subsisting"


trust, not subject to the statute of limitations,
at least, until repudiated, in which event the
period of prescription begins to run only from
the time of the repudiation. [Tamayo v Callejo,
1972]
In constructive trusts, the rule is that laches
constitutes a bar to actions to enforce the
trust, and repudiation is not required, unless
there is a concealment of the facts giving rise
to the trust. [Fabian v Fabian, 1968]

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CIVIL LAW
SALES

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Must be determinate or capable of being


I. Nature and Form of determinate, licit and within the commerce of
Contract man, and possible

A.DEFINITION OF SALES Requisites of a Valid Subject Matter


[Arts. 1459-1465]
Art. 1458. By the contract of sale one of the
contracting parties obligates himself to transfer (1) For Rights:
the ownership and to deliver a determinate (a) Transmisible or personal
thing, and the other to pay therefor a price (b) Licit
certain in money or its equivalent.
(2) For Things:
A contract of sale may be absolute or (a) Licit
conditional. (b) Existing, Future, Contingent
(c) Determinate or determinable
The essence of a contract of sale is the transfer of
ownershipor that the recipient has the ability to
(2) (a) Must be licit
alienate the thing transferred to him. [Art. 1459]
B. ESSENTIAL REQUISITES OF A The thing is licit when—
CONTRACT OF SALE
(a) Within the commerce of man [Art 1347,
B.1. ESSENTIAL ELEMENTS OF A VALID CC]
CONTRACT OF SALE (b) Example of properties that are not within
[Coronel vs CA, 1996; De Leon] the commerce of man:
(i) Those belonging to the State or its
(1) Consent or meeting of the minds political subdivisions intended for
Consent refers to seller’s consent to transfer public use or public service. (Art 420)
ownership of, and deliver, a determinate thing, (ii) Church
and to buyer’s consent to pay the price certain. (iii) Narcotics or dangerous drugs except
upon prescription (RA 6425, the
Being a consensual contract, the contract of sale dangerous drugs act of 1972)
is perfected at the moment there is a “meeting of (c) When right is not intransmissible [Art
the minds” upon the thing which is the object of 1347]
the contract and upon the price. [Art. 1475] (d) It does not contemplate a future
Requisites: inheritance, unless expressly authorized
(a) Legal Capacity by law
(b) Offer and acceptance, and Kinds of illicit things:
(c) No vitiation of consent (a) Per Se – of its nature
A person is not incompetent to contract merely (b) Per Accidens – due to provision of law.
because of advanced years or by reason of Art 1347, paragraph 2, characterizes a
physical infirmities [Paragas vs Heirs of D. Balanco, contract entered into upon future
2005]. inheritance as void. Art. 1347 applies
Exceptions to consent being a requisite: when the following requisities concur:
(a) Expropriation, (i) Succession has not yet been opened;
(b) Ordinary Execution Sale, (ii) The object of the contract forms part
(c) Judicial Foreclosure Sale, and of the inheritance; and
(d) Extra-Judicial Foreclosure Sale (iii) The promissor has, with respect to
the object, an expectancy of a right
Special Case: If sale involves the conjugal which is purely hereditary in
property of spouses, consent must be given by nature.[Vda. de Cabatu v. Spouses
both. Tabu, 2012]
(2) Object or subject matter Examples of illicit sale
(a) Sale of future inheritance is void[Art.
1347]
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(b) Sale of animals suffering from contagious Sale of Things Having Potential Existence
diseases [Art 1575]
(c) Sale of animals if the use or service for Emptio Rei Emptio Rei Spei
which they are acquired has been stated Speratei Mere Hope Vain Hope
in the contract, and they are found to be
unfit therefor [Art 1575] the thing will existence immediately
(d) Sale of land in violation of Constitutional exist
prohibition against the transfer of lands Future thing is
to aliens. [Art XII of Constitution] certain as to
itself, but
When the subject matter is illicit, the contract of incertain as to
sale is void [Art. 1409 (7)] quantity and
(2)(B) Existing, Future, Contingent quality
In case of doubt, the presumption is in favor of
The goods which form the subject of a contract of emptio rei speratae since it is more in keeping
sale may either be— with the commutative character of the contract.
(a) Existing goods owned or possessed by the
seller; (4) Sale of specific things
(b) Goods to be manufactured, raised, OR
acquired by the seller – “Future Goods”; (a) Sale of things in litigation [Art 1381(4)]
[Art 1462, CC]
Sale of things under litigation entered into by
It is valid only as an executory contract to be defendant, without the approval of the litigants
fulfilled by acquisition and delivery of goods or the court, is rescissible. [Art 1381 (4)]
specified.
But no rescission where the thing is legally in the
(3) Things having potential existence may be the possession of 3rd persons who did not act in bad
object of a contract of sale. [Art 1461, CC] faith [Art 1385 (2)]
A sale may be made of a thing which, though not
yet actually in existence is reasonably certain to (b) Sale of an undivided interest in a thing
come into existence as the natural increment or [Art 1463]
usual incident of something in existence already LEGAL EFFECT: Make the buyer a co-owner in the
belonging to the seller, and the title will vest in thing sold:
the buyer the moment the thing comes into (i) acquire full ownership of his part
existence. [Sibal vs Valndez, 1927] (ii) may sell his part even without consent of
Sale of Things Having Potential Existence other co-owners

(c) Sale of undivided share of a specific mass


Emptio Rei Emptio Rei Spei
[Art 1464]
Speratei Mere Hope Vain Hope
The sale of an undivided share in a specific mass
Sale of a thing Sale of a Sale of a VAIN
of fungible goods makes the buyer a co-owner of
expected or MERE HOPE HOPE or
the entire mass in proportion to the amount he
future thing or expectancy expectancy
bought.
Valid GR: Valid EXC: Void
Example: Sale Example: Sale Example: Sale If later on it was discovered that the mass of
of the grain a of a valid of a fake fungible goods contain less than what was
field may grow lottery ticket lottery ticket agreed upon, the buyer becomes owner of whole
in a given time mass and seller must make up for the
Deals with a Deals with a thing that currently difference.[De Leon]
future thing exists – the hope or expectancy
that is (d) Sale of things subject to resolutory
currently not condition [Art 1465]
in existence Examples: Things acquired under legal or
Subject to the Not subject to any condition; conventional right of redemption; or subject to
condition that The contract comes into reserva troncal; pacto de retro sale
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(2) (c) Determinate or Determinable donation or some other act or


contract. [Art 1471]
A thing is determinate when it is particularly
2. If price is false – when the real
designated or physically segregated from all
consideration is not the price stated
others of the same class. [Art 1460]
in the contract:
A thing is determinable when it is capable of (i) Sale is void
being made determinate at the time the contract (ii) UNLESSproved to be founded on
was entered into without the necessity of a new or another true and lawful price [Art
further agreement between the parties. [Art 1460] 1353]
Art. 1165: If the obligation to deliver is a (c) How Price is Determined/When Certain
determinate thing, the creditor has the right to
compel specific performance and to recover (i) Fixed by agreement of the parties
damages for breach of the obligation. [Jurado] 1. Fixing of price cannot be left to the
discretion of one of the parties
Failure to state the exact location of the land 2. BUT if such is accepted by the other,
does not make the subject matter indeterminate, sale is perfected. [Art 1473]
so long as it can be located.[Camacho v CA, 2007] (ii) Determination is left to the judgment of a
The fact that the exact area of the land specified specified person
in the contract of sale is subject to the result of a General Rule: Price fixed by 3rd persons
survey does not render the subject matter designated by the parties is binding upon them
indeterminate.[Heirs of Juan San Andres v.
Rodriguez, 2000] Exceptions:
(i) If unable or unwilling: Sale is inefficacious
(3) Cause or consideration unless parties subsequently agree about
Refers to “price certain in money or its equivalent.” the price.
(ii) If in bad faith/by mistake: Courts may fix
(a) Meaning of Price price (but mere error in judgment cannot
(Arts. 1469-1474) serve as basis for impugning price fixed)
Price signifies the sum stipulated as the (iii) If 3rd person is prevented from fixing
equivalent of the thing sold and also every price by fault of seller or buyer: Innocent
incident taken into consideration for the fixing of party may avail of remedies (rescission or
the price put to the debit of the buyer and agreed fulfillment of obligation, with damages)
to by him [Inchausti v. Cromwell, 1911] (iv) If 3rd person disregards specific
instructions/data/procedure, thereby
(b) Requisites for a Valid Price fixing an arbitrary price
(i) Certain or ascertainable at the time of (1) The price is made in reference to
perfection another thing, or when the price fixed
(ii) In Money or its equivalent is the price of the commodity on a
1. N.B.: Example of “equivalent”: definite day, or in a particular
Letters of credit exchange or market, or when the
2. If price is partly in money and partly amount fixed is above or below the
in another thing: Determine manifest price on such day, exchange or
intention of the parties to see whether market. [Art 1472]
it was barter or sale. [Art 1468] When the price is not certain, the
3. If intention does not clearly appear, it contract is without effect and no
shall be considered a barter if the obligation arises from it.
value of the thing exceed the amount
of money or its equivalent. [Art 1468] Exception: When the thing is already
(iii) Real delivered, the buyer must pay a
When buyer has an intention to pay and reasonable price therefor. This
the seller has an expectation to receive the exception only arises when the means
price contemplated by the parties for fixing
1. If simulated: Sale is VOID; BUT act the price have become ineffectual.
may be shown to have been a
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(d) Inadequacy of Price 2. The reasonableness of a price may be


(Arts. 1355, 1470) determined on the basis of a
company’s balance sheet showing the
General Rule: Does not affect a contract of sale’s
book value or fair market value of its
validity. [Art. 1470]
shares. [Philippine Free Press vs. CA,
The stipulation in a contract of sale which states 2005]
that the consideration is “Php 1 and other
Generally, the reasonable price is the market
valuable considerations” does not make the
price at the time and place fixed by the contract
contract void. Gross inadequacy of price does not
or by law for delivery of goods.
affect the contract of sale except that it may
indicate a defect in consent. [Bagnas v. C.A., (f) False Price vs. Simulated Price
1989]
(i) False Price (Relative Simulation) – price
Exceptions: stated in the contract is not the true price.
(i) In Voluntary sales Parties intended to be bound.
(a) Where low price indicates a vice of
consent, sale may be annulled. Effect: Binds the parties to their real
(b) Where price is so low to be shocking agreement when it does not prejudice 3rd
to the conscience (fraud, mistake, persons and is not intended for any
undue influence), then sale may be purpose contrary to law, morals, public
set aside. policy, etc.
(3) Where price is simulated such as (ii) Simulated Price (Absolute Simulation) –
when the real intention was a price stated in the contract is not
donation or some other contract. intended to be paid. Parties never
(4) Where the parties did not intend to be intended to be bound.
bound at all, sale is void.
(ii) In Involuntary sales Effect: Void for lack of
A judicial or execution sale is one made cause/consideration, but can be shown
by a court with respect to the property of as a donation or some other contract.
a debtor for the satisfaction of his Parties may recover from each other what
indebtedness. they may have given under the contract.
1. Where price is so low to be shocking Disagreement on the manner of payment is
to the conscience, such that a tantamount to a failure to agree on the price.
reasonable mind would not be likely [Toyota Shaw vs. CA, 1995]
to consent to it, then judicial sale will
be set aside. (g) Earnest Money vs Option Money
2. If in event of a resale, a better price [ART. 1482]
can be obtained.
(c) Rescissible contracts of sale Earnest Money – paid in advance of the purchase
Inadequacy of price is a ground for price agreed upon by the parties in a contract of
rescission of conventional sale under Art sale, given by the buyer to the seller, to bind the
1381 (a-b) latter to the bargain.
Limson vs. CA, 2001
It must be real, certain, and pecuniary.
Option Money Earnest Money
(e) When No Price Agreed Separate and distinct Part of purchase price
(ART. 1474) consideration from the [Art 1482]
(i) Sale is inefficacious [Art. 1474] purchase price
(ii) But if the thing or part thereof has been Given when sale is not Given only when there
delivered and appropriated by the buyer, yet perfected is already a sale
he must pay a reasonable price therefor. When given, the would- When given, the buyer
1. What is a reasonable price is a be-buyer is not required is bound to pay the
question of fact dependent on the to buy, but may even balance
circumstances of each particular case. forfeit it depending on
[Art 1474] the terms of the option
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Option Money Earnest Money (c) Electronic Commerce Act


Sections 7,8 and 11, RA 8792
Grantee of option is still Buyer manifests his
undecided whether or earnest desire to buy D. STAGES OF CONTRACT OF SALE
not to buy or sell the the property
[De Leon]
property [Baviera]
(1) Preparation, conception, negotiation, or
False Price Non-payment of Price generation stage – from the time the
prospective contracting parties indicate
Real price is not Failure of buyer to
interest in the contract to the time the
declared pay the price
contract is perfected
Contract is void if it Contract is not void (2) Perfection or “birth” of the contract – upon
should not be proved but gives rise to a the concurrence of the essential elements of
that it was founded right to demand
the sale; and
upon another casue fulfillment or (3) Consummation or “death” of the contract –
which is true and cancellation of the begins when the parties perform their
lawful [Art 1353] obligation
respective undertakings under the contract of
There can be sale even when no price is agreed sale, culminating in the extinguishment
upon. When the price cannot be determined in thereof.
accordance with Arts 1469-1473, the contract is
inefficious.
E. OBLIGATIONS CREATED

Exception: when the thing or part thereof has Art. 1165. When what is to be delivered is a
been delivered to and appropriated by the buyer, determinate thing, the creditor, in addition to
in which case the buyer has to pay a reasonable the right granted him by Article 1170, may
price therefor. compel the debtor to make the delivery.
If the thing is indeterminate or generic, he
B.2. NON-ESSENTIAL ELEMENTS OF A may ask that the obligation be complied with
CONTRACT OF SALE at the expense of the debtor.
(1) Natural – those deemed to exist in certain If the obligor delays, or has promised to
contracts in the absence of any contrary deliver the same thing to two or more persons
stipulations.(Ex. Warranty against eviction, who do not have the same interest, he shall
hidden defects) be responsible for any fortuitous event until
(2) Accidental – those which may be present or he has effected the delivery.
absent depending on the stipulations of the (1) Specific or Determinate Thing – capable of
parties.(Ex. Conditions, interest, penalty) particular designation, e.g. this car, the car
with plate no. XNY 200
C. FORM OF CONTRACT OF SALE
(2) Generic or Indeterminate Thing – refers only to
ART. 1483 a class, to a genus, and cannot be pointed out
General Rule: Form is not important with particularity, e.g. a car (genus nunquam
Exceptions: perit)
(1) Form important for Enforceability E.1 NATURE OF OBLIGATIONS CREATED PER
(a) Statute of Frauds DEFINITION IN ART.1458
ART. 1403
[Villanueva]
ART. 1405
(1) For the SELLER: To transfer ownership and to
(2) Form important for Validity deliver possession of the subject matter
(a) Sale of Realty through Agents (2) For the BUYER: To pay the price
ART. 1874
F. CHARACTERISTICS OF A CONTRACT OF
(b) Sale of Large Cattle SALE
ART. 1581
(1) Consensual – perfected by mere consent and
Section 529, Revised Administrative without any further acts.
Code

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(2) Bilateral and Reciprocal – imposes correlative Consideration is price in Consideration is


obligations on both parties to the relationship. money or its equivalent another thing
Consequently, power to rescind is implied.
Barter is a contract where one of the parties binds
(3) Principal – can stand on its own and does not
himself to give one thing in consideration of the
depend on another contract for validity, as
other’s promise to give another thing [Art.1638]
contrasted from an accessory contract.
(4) Onerous – imposes valuable consideration as If consideration consists partly in money and
prestation, as distinguished from a gratuitous partly in another thing, the intention of the
contract. parties determines whether the contract is one of
Consequence: all doubts in construing an sale or barter.
onerous contract shall be resolved in that
If manifest intention is not clear: Barter when the
which gives greater reciprocity of interests.
value of thing is more than the amount of money
[Art. 1378]
or its equivalent; otherwise, sale. [Art.1468]
(5) Commutative – because a thing for value is
G.3. CONTRACT FOR A PIECE OF WORK
exchanged for equal value, as contrasted
from an aleatory contract. Contract for a Piece of
Sale
Test: As long as the party believes in all Work
honesty that he is receiving equal for what he Goods are Goods are
gave up for, then commutative character is manufactured or manufactured for
complied with. procured in the ordinary customer upon his
course of business special order
(6) Nominate – given a particular name by law
For the general market, For a specific customer
F.1. SALE IS TITLE AND NOT MODE whether on hand or not
Delivery or tradition is the mode to transfer Governed by Statute of Not within Statute of
ownership and possession to the buyer. Frauds Frauds

When a contract of sale is perfected, the seller is The fact that the object were made by the seller
merely obligated to transfer ownership and to only when customers placed their orders, does
deliver the property. Transfer of ownership is not alter the nature of the contract of sale, for it
effected only upon delivery. only accepted such orders as called for the
employment of such materials as it ordinarily
Sale is merely title that creates the obligation on manufactured or was in a position habitually to
the part of the seller to transfer ownership and manufacture such. [Celestino Co & Co vs. Collector,
deliver possession, but on its own, sale is not a 1956:]
mode that transfers ownership. [Equatorial Realty
Dev. v. Mayfair Theater, 2001] When each product or system executed is always
UNIQUE and could not mass-produce the
G. SALE DISTINGUISHED FROM OTHER product because of its very nature, such is a
CONTRACTS contract for a piece of work.[Commissioner vs.
Engineering Equipment and Supply Co., 1975]
G.1. DONATION
G.4. DACION EN PAGO
Sale Donation
Onerous Gratuitous Sale Dacion en pago
No pre-existing debt Pre-existing debt
Perfected by mere Must comply with the
Creates an obligation Extinguishes the
consent formalities required by
obligation (mode of
law. [Art 745]
payment)
When the price of the contract of sale is Price is more freely Price is value of the
simulated, the sale may be void but the act may agreed upon, fixed by thing given
be shown to have been in reality a donation or the parties
some other contract. [Art.1471] Buyer has to pay the Payment is received by
G.2. BARTER price the debtor before
contract is perfected
Sale Barter
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There is a novation of the contract of loan into a Sale Agency to sell


contract of sale when the creditor agrees to
accept a thing in payment of the debt. Hence, if Not unilaterally Essentially revocable
the thing given in payment turns out to belong to revocable
another, the creditor’s remedy should be G.7. LEASE
governed by the law on sales, not loan. [Baviera]
Sale Lease
(i) Bilateral promise to buy and sell [Asked in 80,
91] Ownership transferred No transfer of
A promise to buy and sell a determinate thing for by delivery ownership
a price certain is reciprocally demandable. [Art
479, CC] Permanent Temporary
Seller must be owner at Lessor neet not be
Like a sale, the thing must be determinate and time of delivery owner
the price, certain.
G.5. CONTRACT TO SELL
H. KINDS OF CONTRACT OF SALE
Contract of Sale Contract to sell (1) Absolute – when sale is not subject to any
Ownership is Ownership is only condition and the title immediately passes to
transferred upon transferred upon full the purchaser upon delivery
delivery payment of price (2) Conditional – ownership of the object remains
Non-payment is a Full payment is a with the vendor until fulfillment of the
resolutory condition positive suspensive condition/s
condition, hence non-
payment would not
give rise to the
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 buyer presumed to be a
in bad faith buyer in good faith

G.6. AGENCY TO SELL


Sale Agency to sell

Buyer receives the Agent receives good


goods as owner as goods of the
principal
Agent delivers the
Buyer pays the price price which he got
from his principal
Buyer cannot return the Agent can’t return the
object sold as a general goods
rule
Seller warrants the Agent makes no
thing sold warranty

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[ARTS. 1491-1492] (AGE-PLJ)


II. Capacity to Buy or Sell
The sale entered into by agents, guardians, and
Art. 1489. All persons who have capacity to enter executors and adminsitrators shall be voidable,
into obligations may enter into a contract of sale as it affects only private interests.
A. KINDS OF INCAPACITY The sale entered into by public officers, lawyers,
justices and judges, and others specially
(1) Absolute incapacity – when persons cannot disqualified by law shall be void,as it affects
bind themselves at all public interest.
(2) Relative incapacity – only with regard to
certain persons and certain class of property (1) Agents- Cannot purchase or acquire property
(3) Specific incapacity or Special disqualifications whose administration or sale was entrusted
to them
A.1. ABSOLUTE INCAPACITY Exception: Principal gives consent.
[ARTS. 1327, 1397, 139] (2) Guardian - Cannot purchase property of
(1) Minors person under his guardianship
(2) Insane or Demented Guardianship is a trust of the highest order,
(3) Deaf-mutes who do not know how to write and the trustee cannot be allowed to have
(4) Civil Interdiction any inducement or neglect his ward’s interest.
(5) Judicially-declared Incompetents (Art. 39) [Phil Trust Co v Roldan, 1956]
(a) Prodigal Art. 1491(2) in relation to Art. 1409 does not
(b) Imbeciles apply where the sale was under a special
(c) Absence & presumption of death power attached to the real estate mortgage,
(d) Persons not of unsound mind but by pursuant law. Under Act No. 3135, a
reason of age, disease, weak mind, and other mortgagee-creditor is allowed, as an
similar causes, cannot take care of exception, to participate in the bidding under
themselves and manage their property the same condition as any other
without outside aid (Easy prey for deceit and bidder.[Fiestan v. CA, 1990]
exploitation)
(3) Executors and Administrators - Cannot
A.2. RELATIVE INCAPACITY: MARRIED acquire or purchase property of estate under
PERSONS their administration.
(1) Husband and wife [Art. 1490] Does not apply to purchase of hereditary
General Rule: Cannot sell property to each rights, as these are not under their
other administration.
Exceptions: The prohibition on executors and
(a) Separation of property in marriage administrators does not apply if the principal
settlement, OR consents to the sale.[Distajo v. CA, 2000]
(b) Judicial separation of property. (4) Public Officers and Employees - Cannot
Sale by husband in favor of a concubine after acquire or purchase property of State/any of
he had abandoned his family and left its subdivisions, GOCC or administration, the
conjugal home where his wife and children administration of which was entrusted to
lived and from whence they derived their them.
support, is void.[Ching v. Goyanko, Jr., 2006] Includes judges and government experts who,
(2) Alienage [Art. 39] in any manner whatsoever take part in the
sale.
General Rule: Aliens are disqualified from
purchasing or acquiring real property. Requisites:
(a) Properties must belong to the State, any
Exception: If acquisition is through hereditary of its subdivisions, or of any GOCC
succession (b) Administration of these properties are
(3) Trusteeship [Art. 39] entrusted to the public officers/officials
A.3. SPECIAL DISQUALIFICATIONS
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(5) Lawyers - Cannot acquire or purchase (1) If both parties are incapacitated:
property or rights in litigation in which they unenforceable [Art. 1403 (3)]
take part by virtue of their profession (2) If only 1 party is incapacitated: voidable
Lawyers may have undue influence over Exception: If necessaries are sold and delivered to
client; greed may get the better of the an incapacitated person: pay a reasonable price
sentiments of loyalty and disinterestedness. therefor. [Art 1489]
[Valencia v Cabanting, 1991]
Prohibition is definite and permanent and B.2. RELATIVE INCAPACITY
cannot be cured by ratification. [Rubias v
Sale between spouses is void.
Batiller, 1973]
Rationale:
Exceptions: An assignment to a lawyer by his
(1) To protect 3rd persons who may have
client of an interest in the property does not
contracted with the spouse
violate Art 1491, where:
(2) To avoid undue advantage of the dominant
(a) A judgment has been rendered and has
spouse over the weaker spouse.
become final; and
(3) To avoid circumvention of the prohibition
(b) In case of contingency fee arrangements:
against donations between spouses. [Medina
the interest of the lawyer may be
v CIR, 1961]
annotated as an adverse claim on the
property awarded to his client [Director of Such prohibition shall likewise apply to common
Lands v Ababa, 1979] law spouses. [Calimlim-Canulas v Fortun, 1984]
(6) Justices, Judges, prosecuting attorneys, clerks But if already sold to a third person who relied on
and other officers and employees connected the title of his immediate seller, reconveyance to
with the administration of justice - Cannot the seller spouse is no longer available [Cruz v CA,
acquire or purchase property or rights in 1997]
litigation or levied upon on execution before
the court within whose jurisdiction or territory
B.3. SPECIFIC INCAPACITY/ SPECIAL
they exercise their respective functions.
DISQUALIFICATIONS
Rationale: to prevent fraud and to surround
General Rule: Contracts expressly prohibited by
their profession with prestige. law are VOID and CANNOTBERATIFIED. Neither
Prohibition applies only on sales or can the right to set-up the defense of illegality be
assignment during the pendency of litigation waived. [Art. 1409 (7)]
involving the property. [Macariola v Asuncion,
Those entered into by public officers/employees,
1963]
justices and judges, and lawyers in violation of
(7) Others specially disqualified by law Art. 1491 are inexistent and VOID from the
(a) Unpaid sellers with goods in transit from beginning. [Rubias v Batiller, 1973] It is NOT
buying the goods subject to RATIFICATION.
(b) Officer conducting the execution sale of Exception: Sales entered into by guardians,
deputies administrators, and agents (specific incapacities)
Art 1492: The prohibitions in the two in violation of Art. 1491 may be RATIFIED by
preceding articles (Arts. 1490, 1491) are means of and in the form of a new contract when
applicable to sales in legal redemption, the cause of nullity has ceased to exist.
compromises and renunciations. Ratification is valid only from date of execution of
Art 1646: The persons disqualified to buy the new contract and does not retroact.
referred to in articles 1490 and 1491, are also
disqualified to become lessees of the things
mentioned therein.
B. EFFECTS OF INCAPACITY
B.1. ABSOLUTE INCAPACITY

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In reciprocal obligations, the extinguishment of


III. Effects of the Contract the obligation due to loss of the thing
When the Thing Sold Has extinguishes the entire juridical relation.
D.2. DETERIORATION
Been Lost [ART 1189]
A. RES PERIT DOMINO Impairment is borne by the BUYER if the thing
[ARTS. 1263, 1189] deteriorates without the fault of the seller.
Res perit domino: Owner bears risk of loss and If it deteriorates through the fault of the seller,
deterioration the buyer may choose between rescission of
Basis: Ownership is not transferred until delivery. obligation and fulfillment, either case with
B. PRIOR TO PERFECTION OF CONTRACT indemnity for damages.
Seller bears risk of loss and deterioration. E. AFTER DELIVERY
Basis: Res perit domino General Rule: Buyer bears risk of loss and
C. AT TIME OF PERFECTION deterioration.
[ARTS. 1493 AND 1494] Exceptions [Art 1504 (1) and (2)]
Seller: bears risk of loss and deterioration. (1) Where delivery has been made either to
Basis: Res perit domino the buyer or to the bailee for the buyer,
but ownership in the goods has been
Partial Loss (Or loss which retained by the seller merely to secure
Total Loss results in substantial performance by the buyer of his
change in character) obligations under the contract; and
Contract is void Buyer may withdraw from (2) Where actual delivery has been delayed
because the object the contract through the fault of either the buyer or
did not exist at the or seller, the goods are at the risk of the
time of the Buy the remainder at a party in fault.
transaction. proportionate price
D. AFTER PERFECTION BUT BEFORE
DELIVERY
D.1.LOSS
General Rule: Stipulations in the contract will
govern.
In the absence of stipulation, there are two
conflicting views:
(1) Res perit creditori or the buyer bears the risk of
loss. This is an exception to the rule of res
perit domino.
Basis: Art 1504 only covers goods.
Pursuant to Article 1262, if the thing is destroyed
without the fault of the debtor/seller, the
obligation to pay shall subsist.
(2) Res perit domino or the seller bears the risk of
loss.
Basis: The rule on loss is different from the rule
on deterioration for the loss would be for the
account of the seller, while the deterioration
would be for the account of the buyer.

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(a) Subject matter is movable


IV. Obligations of the (b) Owner has either lost the thing or has
Vendor been unlawfully deprived. [Art 559]
(2) Reimbursement is necessary before owner
A. OBLIGATIONS OF THE VENDOR IN can recover when:
GENERAL (a) Buyer acted in good faith
(b) Acquired at a public auction [Art 559]
(1) To transfer ownership of the thing[Art. 1495] (3) Recovery no longer possible when:
(2) To deliver the thing, with its accessions and (a) Buyer in good faith
accessories, if any[Arts 1164, 1166] (b) Acquired it at a merchant’s store, fair or
(3) To warrant against eviction and against market. [Art 1506]
hidden defects[Arts 1545-1581]
(4) To take care of the thing, pending delivery, D. MANNER OF TRANSFER
with proper diligence[Art 1163] [ARTS. 1477, 1496-150]
(5) To pay for the expenses of the deed of sale
[Art. 1487] General Rule: Ownership of the thing sold shall
be transferred to the vendee upon actual or
B. WHEN SELLER IS NOT THE OWNER constructive delivery thereof [Art 1477]
General Rule: Ownership is not acquired by the Obligation to transfer ownership and to deliver is
buyer. One cannot give what one does not have. implied in every contract of sale [Arts. 1458-1459]
[Art 1505]
Transfer of ownership requires delivery [Art. 1495]
Exceptions:
(1) Seller has a right to transfer ownership Exceptions
Seller need not be the owner of the thing at (1) Contrary stipulation
the time of perfection of the contract. It is (2) Contract to sell
sufficient that seller has a right to transfer (3) Contract of insurance
ownership thereof at the time it is delivered. (4) Sale on acceptance/Trial
[Art. 1459] (5) When seller is not the owner or has voidable
title
One who sells something he does not own yet
is bound by the sale when he acquires the General Concepts
thing later. [Bucton vs Gabar, 1974] Transfer of ownership is effected even if the
(2) Estoppel: Owner is, by his conduct, precluded purchase has been made on credit.Payment of
from denying the seller’s authority to sell. [Art. the purchase price is not essential to transfer of
1434] ownership as long as the property sold was
(3) Registered land bought in good faith delivered.
General rule: Buyer need not go beyond the Intention to transfer ownership
Torrens Title
(1) All forms of delivery shall be coupled with
Exception: When he has actual knowledge of intention of delivering the thing sold.
facts and circumstances that would impel a (2) Seller must be owner or authorized by owner
reasonably cautious man to make further of the thing sold
inquiry
When right to transfer ownership must exist: At
(4) Order of courts; Statutory Sale the time of delivery and not at the time of
In execution sale, the buyer merely steps into perfection of contract of sale.
the shoes of the judgment debtor [Rule 39,
sec. 33, ROC] E. CONCEPT OF DELIVERY
(5) When goods are purchased in Merchant’s E.1. REQUISITES
store, Fair, or Market [Art 1505] (1) Identity – between what must be delivered
C. SALE BY PERSON HAVING A VOIDABLE and what is actually delivered
(2) Integrity – in a condition suitable for
TITLE
enjoyment
(1) True owner may recover the thing when the ff. (3) Intentional
requisites concur:
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E.2. WHAT TO DELIVER Buyer becomes owner of the property on


delivery, BUT has the option to revest
(1) Thing sold [Art. 1495]
ownership in the seller instead of paying the
(2) Fruits [Art. 1164 & 1537] – belong to the
price by returning the goods within the time
vendee from day of perfection.
fixed in the contract, or, if no time is fixed,
(3) Accessions and accessories [Art. 1166 & 1537]
within a reasonable time. Otherwise, the sale
– in the same condition they were in on day of
becomes absolute.
perfection
(a) Improvements by seller at his expense Loss or destruction of the property prior to
grants him a usufructuary right [Art 1138, return falls upon the buyer and makes him
1189] responsible for the purchase price.
(b) No indemnification Sale on Approval vs Sale or Return
(c) But he may remove it to the extent that
there is no damage [Art. 1538] Sale on Approval Sale or Return
E.3. WHERE TO DELIVER Ownership does not Ownership passes to
pass upon delivery buyer on delivery and
(1) A hierarchy is followed: remaining with the subsequent return
(a) Stipulation seller until buyer revests ownership in
(b) Usage of trade signifies his approval. the seller.
(c) Seller’s place of business (office)
(d) Seller’s residence Depends on the Depends on the will
(2) In case of specific goods, which the parties character or quality of of the buyer
knew to be at some other place when the goods
contract was perfected, that place is the
Subject to a suspensive Subject to a
place of delivery
condition resolutory condition
(3) If goods are at the time of sale are possessed
by a third person, then there is no delivery Risk of loss remains Risk of loss remains
until he acknowledges to the buyer that he with the seller with the buyer
holds the goods for the buyer.
(3) Express Reservation
E.4. WHEN TO DELIVER
If it was stipulated that ownership in the
Absent a stipulation as to time, delivery must be thing shall not pass to the purchaser until he
made within a reasonable time; demand or has fully paid the price then ownership
tender of delivery shall be made at a reasonable remains with seller even when delivery is
hour. made [Art 1478]
F. WHEN DELIVERY DOES NOT TRANSFER (4) Implied Reservation
TITLE The following are instances when there is an
implied reservation of ownership:
(1) Sale on Approval or Trial
Title remains with the seller notwithstanding (a) Goods are shipped, but by the bill of
delivery of the goods. lading goods are deliverable to the seller
or his agent, or to the order of the seller
Buyer becomes the owner when he – or his agent
(a) Signifies his approval or acceptance to (b) Bill of lading is retained by the seller or
the seller his agent.
(b) Does any other act adopting the (c) When the seller of the goods draws on
transaction (i.e. sale to a third person) the buyer for the price and transmits the
(c) Retains the goods without giving notice bill of exchange and bill of lading to the
of rejection after the time fixed has buyer, and the latter does not honor the
expired; if no time has been fixed, after bill of exchange by returning the bill of
the expiration of a reasonable time [Art lading to the seller.
1502] (5) When Sale Not Valid
(2) Sale or Return When the thing sold is a public property
(6) When Seller is Not the Owner
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General Rule: Ownership is not acquired by “Control” over thing sold must be such that
the buyer. One cannot give what one does not seller is capable of physically transferring it to
have. [Art 1505] buyer.
Exceptions: Although parties may stipulate that the
execution of a public instrument is equivalent
(a) Seller has a Right to transfer ownership
to delivery, this legal fiction holds true only
(b) Estoppel: Owner is, by his conduct,
when there is no impediment that may
precluded from denying the seller’s
prevent the passing of the property from the
authority to sell. [Art. 1434]
vendor to the vendee. [Vda. de Sarmiento v.
(c) Registered land bought in good faith
Lesaca, 1960]
(d) Order of courts; Statutory Sale
(e) When goods are purchased in Merchant’s If, notwithstanding execution of the
store, Fair, or Market [Art 1505] instrument, the buyer cannot enjoy material
tenancy and make use of the object himself or
(7) Sale by Person Having a Voidable Title
through another in his name, there is no
(a) True owner may recover the thing when
delivery. [Power Commercial v. CA, 1997]
the ff. requisites concur:
(i) Subject matter is movable Execution of a public instrument gives rise
(ii) Owner has either lost the thing or has only to a prima facie presumption of delivery,
been unlawfully deprived. [Art 559] negated by failure of the buyer to take actual
(b) Reimbursement is necessary before possession of land sold. A person who does
owner can recover when: not have actual possession cannot transfer
(i) Buyer acted in good faith constructive possession by execution and
(ii) Acquired at a public auction [Art 559] delivery of public instrument.[Spouses
(c) Recovery no longer possible when: Santiago v. Villamor, 2012]
(i) Buyer in good faith
(2) Symbolic Delivery
(ii) Acquired it at a merchant’s store, fair
or market. [Art 1506] Delivery of keys of the place or depositary
where the movable is stored or kept. [Art
G. KINDS OF DELIVERY 1498]
G.1.ACTUAL DELIVERY Unless otherwise agreed, when symbolic
(1) Deemed made when the thing sold is placed delivery has been made, the seller is not
in the control and possession of the vendee obliged to remove tenants to place the buyer
[Art. 1497] in actual possession of the property as he has
(2) Not always essential to passing of title [Art. already complied with his obligation to
1475] transfer ownership of and deliver the thing
(3) Parties may agree when and on what sold. [Power Commercial and Industrial Corp. v.
conditions the ownership shall pass to the CA, 1997; Sabio v. The International Corporate
buyer [E.g.: Art 1478 where ownership will Bank, Inc., 2001]
only pass after full payment of the price] (3) Tradition Longa Manu (Long Hand)
G.2. CONSTRUCTIVE DELIVERY Delivery of movable property by mere consent
(1) Execution of public instrument[Art 1498, first or agreement, if the thing sold cannot be
paragraph] transferred to the possession of the buyer at
the time of sale. [Art 1499]
General Rule: produces the same legal effects
of actual delivery. Example: Seller points to the property
without actually transferring physical
Exceptions: possession thereof.
(a) The parties intended otherwise.
(b) At the time of execution, the subject When an employer assigned all its rights and
matter was not subject to the control of the title to all surplus property salvaged by the
seller, which control must subsist for a contractor, tradition longa manu takes place.
reasonable length of time after execution. Delivery is upon the moment a thing is
[Pasagui v Villablanca, 1975] salvaged. [Board of Liquidators v. Floro, 1960]

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(4) Tradition Brevi Manu (Short Hand) H. DOUBLE SALES


Delivery of movable property by mere consent [ART. 1544]
or agreement, if the buyer already had it in
his possession for any other reason. [Art 1499] General Rule: Prior tempore, prior jure (“First in
time, priority in right”) applies.
Happens when the already has possession of
the thing sold before the sale by virtue of Requisites
another title (as lessee, borrower, depositary, (1) 2 or more valid sales;
etc.) (2) Same subject matter;
(3) 2 or more buyers with conflicting interests
(5) Tradition Constitutum Possessorium over the rightful ownership of the thing
Seller continues to be in possession of the sold;
property sold not as owner but in some other (4) Same seller. [Cheng v Genato, 1998]:
capacity, like as tenant or lessee. (i) Rules Governing Sale of Movables, Immovables
(6) Quasi-traditio and Unregistered Lands
Mode of delivery of incorporeal things or (1) Sale of Movables
rights. Delivery is effected: Ownership shall be transferred to the person
(a) By execution of public instrument who may have first taken possession in good
(b) When such is not applicable, by placing faith.
the titles of ownership in the possession
of the buyer (2) Sale of Immovables: Registered Land
(c) By allowing the buyer to use his rights as Ownership belongs to the person who:
new owner with the consent of the seller (a) In good faith first recorded the sale in the
(7) Delivery to a Common Carrier Registry of Property; or
(b) If there is no inscription of sale on the title,
General Rule: Delivery to the courier or carrier ownership passes to the person who in
is tantamount to delivery to buyer, whether good faith was first in possession; or
carrier is named by buyer or not. The buyer (c) In the absence thereof, to the person who
assumes the risk of loss. presents the oldest title, provided there is
Exceptions good faith.
(a) Seller reserved title through the form of Possession refers to any of the modes of
the bill of lading, with intent to remain possession in Articles 1497-1501
the owner, not merely for the purpose of Oldest Title as to any public document
securing payment, OR showing acquisition of the land in good faith.
(b) Contrary intention appears in the contract To constitute “title,” the transmission of
(i.e. seller is required to deliver goods to ownership must appear in a public document
buyer at the point of destination) [Art. 1358 (1)]
(c) Delivery by the seller is in breach of the
contract Registration includes any entry made in the
(d) F.O.B. (Free on Board or Freight on Primary Entry Book of the registry, including
Board)- When seller bears the expenses both registration in its ordinary and strict
of transportation up to the F.O.B. point. sense and cancellation, annotation, and even
(e) C.I.F. (Cost, Insurance, Freight) - Price marginal notes. [Cheng v. Genato, 1998]
quoted includes the costs of the goods, Pencilled entries on the title are not
insurance, and freight charges on the considered registration. [AFPMBAI v. Court of
goods up to the point of destination. Appeals, 1999]
(f) F.A.S. (Free Alongside) -Seller bears the
expenses of transportation until he (3) Second Sale Made by Virtue of Execution and
delivers the goods alongside a vessel at a Attachment
named port. Art. 1544 does NOT apply in cases where the
first sale of an unregistered immovable
occurred prior to an execution sale and the

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second sale occurred by virtue of an execution (2) Annotation of Lis Pendens: Buyer cannot
sale. This is because a buyer of unregistered be considered an innocent purchaser for
land at an execution sale only steps into the value where it ignored the lis pendens on
shoes of the judgment debtor (the person the title.
who sold the property prior to the execution (3) A purchaser of a parcel of land cannot
sale). The second buyer merely acquires the close his eyes to facts which should put a
latter's interest in the property sold as of the reasonable man upon his guard, such as
time the property was levied upon. [Carumba when the property subject of the
v. CA, 1970] purchase is in the possession of persons
other than the seller. A buyer who could
(4) Sale of Immovables: Unregistered Land
not have failed to know or discover that
(a) Instrument or deeds establishing, the land sold to him was in the adverse
transmitting, acknowledging, modifying possession of another is a buyer in bad
or extinguishing rights with respect to faith. [Heirs of Ramon Durano v Uy, 2010]
lands not registered under the Land
Registration Act or the Spanish Mortgage
Law, are required to be registered in the Annotation of Adverse
Registry of Property to prejudice 3rd Lis Pendens
Claim
persons, although such registration is
understood to be “without prejudice to a May be cancelled even May be cancelled
third party with a better right”. [PD 1528 before the action is only in one instance,
Sec 113] finally terminated for i.e., after the claim is
(b) Art. 1544 applies to unregistered land causes which may not adjudged invalid or
subject to a conventional sale (because of be attributable to the unmeritorious by the
Art. 1358) but NOT to unregistered land claimant Court
subject to judicial sale.
(c) Unregistered by both buyers, the first The two are not contradictory or repugnant to
buyer is preferred. one another; nor does the existence of one
(d) If first buyer did not register but second automatically nullify the other, and if any of the
buyer registered property, second buyer is registrations should be considered unnecessary
preferred. or superfluous, it would be the notice of lis
pendens [A. Doronila Resources Development Inc
I. PROPERTY REGISTRATION DECREE v CA, 1988]
I.1 REQUISITES FOR REGISTRATION OF DEED (ii) Accompanied by vendors duplicate certificate
OF SALE IN GOOD FAITH of title, payment of capital gains tax, and
(i) Purchaser in Good Faith documentary tax registration fees
One who buys the property of another, without Must be accompanied by:
notice that some other person has a right to or (a) Vendor’s duplicate certificate of title
interest in such property, and who pays a full (b) Payment of capital gains tax – 6% of the
and fair price for the sale, at the time of the selling price or zonal value, whichever is
purchase or before he has notice of the higher
claim/interest of some other person in the (c) Documentary tax registration fees – 1.5%
property. [Agricultural and Home Extension of the selling price or zonal value,
Development Group v CA, 1992] whichever is higher
General Rule: As a rule, he who asserts the J. RISK OF LOSS (SEE EFFECTS OF
status of a purchaser in good faith and for CONTRACTS WHERE THE THING IS LOST)
value has the burden of proving such assertion.
[Mathay v CA, 1998] K. WARRANTIES
When buyer is presumed to be in bad faith A statement or representation made by the seller
(1) Annotation of adverse claim: Places any contemporaneously and as part of the contract of
subsequent buyer of the registered land sale, having reference to the character, quality, or
in bad faith. [Balatbat v CA, 1996] title of the goods, and by which he promises or

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undertakes to ensure that certain facts are or represented as true in value of the thing or
shall be as he then represents. said document cannot statement of only the
be considered as mere seller’s opinion is not a
Not every false representation voids the contract,
dealer's talk. [Moles v. warranty unless:
only those matters substantially affecting the
IAC, 1989] 1) The seller made it as
buyer’s interest, not matters of opinion, judgment,
an expert;
probability, or expectation. When the buyer
2) It was relied upon
undertakes his own investigation, and the seller
by the buyer.
does nothing to prevent it from being as full as
[Art.1546]
the buyer chooses, the buyer cannot afterwards
3) Ordinarily, what
allege misrepresentations. [Songco v. Sellner,
does not appear on
1917]
the face of the written
instrument [Moles v.
IAC, 1989]
Condition vs. Warranty
Express Warranty vs. False Representation
Condition Warranty
Pertains to and affects Goes into the Express Warranty False Representation
the existence of the performance of an Concealment of facts When concealment of
obligation obligation and may, in does not necessarily facts comes with an
itself, be an obligation amount to false active misstatement of
Non-happening does Non-fulfillment representation fact or a partial
not amount to breach of constitutes breach of statement of fact such
contract contract that withholding of
Must be stipulated Stipulation or that unsaid portion
operation of law makes that which is
May attach either to the Always relates to the stated absolutely false
seller’s duty to deliver subject matter or the
thing or some other seller’s obligations as However, buyer who
circumstance to the subject matter fails to inspect
condition of property
If seller has promised that the condition should despite ample
happen or be performed, the buyer may treat the opportunity to do so
nonperformance of the condition as a breach of when there is no
warranty. [Art.1545] opposition on the part
K.1 EXPRESS WARRANTIES of seller to inspect
cannot later on allege
For there to be express warranty, the following
false representation.
requisites must concur: (APIR)
[Phil Mftg Co. v Go
(1) An affirmation of fact or any promise Jucco, 1926]
relating to the thing sold;
(2) The natural tendency of such affirmation
Reason: buyer’s duty
or promise is to induce the buyer to buy;
to inspect remains
(3) The buyer buys the thing relying thereon.
despite false
[Art. 1546]
representation by the
(4) Made before the sale not upon delivery or
seller; he has the duty
any other point
to exercise due
An express warranty can be made by and also be diligence.
binding on the seller even in the sale of a second
hand article. [Moles v. IAC, 1989]
K.2 IMPLIED WARRANTIES
Express Warranty vs. Dealer’s/Trader’s Talk
[ART. 1547]
Dealer’s or Trader’s
Express Warranty An implied warranty is derived by law by
Talk
implication or inference from the nature of the
What is specifically Affirmation of the
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transaction or relative situation, or circumstances (2) The defect is not patent or visible;
of the parties, irrespective of any intention of the (3) The buyer is not an expert who, by reason of
seller to create it.[De Leon] his trade or profession, should have known
the defect
(i) Implied Warranty of Title
(4) The seller is aware of the hidden fault or
(1) Implied warranty arises by operation of law
defect, OR even if he is not aware thereof, if
and need not be stipulated in the contract
there is no stipulation to the contrary
of sale.
[Art.1566]
(2) Warranty of Seller’s Right to Sell: Seller
warrants his right to sell at the time the The buyer must also give notice of such
ownership is to pass. redhibitory defect within a reasonable time.
Inapplicable to a sheriff, auctioneer, The use contemplated must be that which is
mortgagee, pledgee, or other person stipulated, and in absence of stipulation, that
professing to sell by virtue of authority in which is adopted to the nature of the thing, and
fact or law. [Art. 1547] to the business of the buyer.
(3) Warranty against Eviction: seller warrants
(iv) Implied Warranty as to Merchantable Quality
that buyer, from the time ownership passes,
and Fitness of Goods
shall have and enjoy legal and peaceful
possession of the thing. Its requisites are:
Merchantable Quality
(a) Buyer is deprived of the whole or a part
(1) Where the goods are brought by description
of the thing sold;
from a seller who deals in goods of that
(b) Eviction is by final judgment
description [Art.1562]
(c) Final judgment based on a right prior to
(2) In a sale by sample, if the seller is a dealer in
the sale or an act imputable to the
goods of that kind and the defect is not
vendor
apparent on reasonable examination of the
(d) Seller is summoned and made co-
sample [Art.1566]
defendant in the suit for eviction at the
instance of the buyer. [Power Warranty of merchantability is warranty that
Commercial and Industrial Corp. v. CA, goods are reasonably fit for the general purpose
1997] for which the same are sold.
(ii) Implied Warranty Against Encumbrance/Non- Warranty of fitness is warranty that goods are
apparent Servitudes suitable for the special purpose of the buyer
Requisites for breach: which will not be satisfied by mere fitness for
(1) Thing sold is an immovable general purposes.
(2) Burden or servitude encumbering the thing
In a sale by sample, there is implied warranty that
sold is:
goods are free from defects not apparent on
(a) Non-apparent to the naked eye
reasonable examination of sample and which
(b) Not mentioned in the agreement render goods unmerchantable. [Mendoza v. David,
(c) Of such nature that it must be presumed
2004]
that the buyer would not have bought it
had he been aware of it “Fitness for a particular purpose”:Where the
(d) Not recorded in the Registry of Property buyer expressly or impliedly makes known to the
unless there is an express warranty that seller the particular purpose for which the goods
the thing is free from all burdens and are acquired AND it appears that the buyer relied
encumbrances [Art.1560] on the seller’s skill or judgment [Art.1562(1)]
(iii) Implied Warranty Against Hidden Defects (v) Implied Warranty Against Redhibitory Defect in
the Sale of Animals
Requisites for breach:
[Art. 1572]
(1) The defect renders the thing sold unfit for the
use for which it was intended OR diminishes Redhibitory defect – a hidden defect of animals of
its fitness for such use to such an extent that such nature that expert knowledge is not
had the buyer been aware thereof, he would sufficient to discover it, even in a case where a
not have bought it or would have paid a lower professional inspection has been made
price; No warranty in case of [Art. 1574]
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(1) Animals sold at fairs or public auctions eyes to facts which should put a reasonable man
(2) Livestock sold as condemned upon his guard and then claim that he acted in
good faith under the belief that there was no
The following sales are void [Art. 1575]
defect in the title of the vendor.
(1) Sale of animals suffering from contagious
diseases
(2) Sale of animals unfit for the purpose for K.5. BUYER’S OPTIONS IN CASE OF BREACH
which they are acquired as stated in the OF WARRANTY
contract
[Art. 1599]
Veterinarian is liable if he fails to discover or
(1) Express Warranty
disclose the hidden defect through ignorance or
bad faith. [Art 1576] Prescriptive period: Period specified in express
warranty OR 4 years, if no period is specified
Seller liable if animal dies within 3 days after its
(following the general rule on rescission of
purchase due to a disease that existed at the time
contracts)
of sale. [Art 1578]
Remedies
(a) Accept goods + demand diminution/
K.3. EFFECTS OF WARRANTIES extinction of price
(b) Accept goods + damages
(1) Natural tendency is to induce buyer to
(c) Refuse to accept goods + damages
purchase the subject matter
(d) Rescind (Refuse to accept or return or
(2) Buyer purchases subject matter relying
offer to return) + recover price paid
thereon
(3) Seller liable for damages in case of breach
Rescission not available when buyer:
K.4. EFFECTS OF WAIVERS (a) Knew of breach of warranty when he
accepted the goods without protest
Only applicable to waiver of warranty against
(b) Fails to notify the seller about election to
eviction; parties may increase or decrease
rescind within a reasonable period of time
warranty against eviction but the effect depends
(c) Fails to return or offer to return the goods
on good/bad faith of the seller:
to the seller in substantially a good
(1) Seller in bad faith and there is warranty
condition as they were when delivered,
against eviction – null and void
unless deterioration was due to breach of
(2) Buyer without knowledge of a particular risk
warranty
and made general renunciation of warranty –
not waiver but merely limits liability of seller
in case of eviction (pay value of subject
Measure of damages: Difference between value of
matter at the time of eviction)
goods at the time of delivery and the value they
(3) Buyer with knowledge of risk of eviction
would have had if they had answered to the
assumed its consequences and made a
warranty
waiver – vendor not liable
(4) Waiver to a specific case of eviction – wipes
out warranty as to that specific risk but not as Effects of rescission
to eviction caused by other reasons (a) Buyer no longer liable for price: Entitled
to the return of any part of price paid,
One who purchases real estate with knowledge of
concurrently with or immediately after an
defect or lack of title cannot claim he acquired
offer to return the goods
title thereto in good faith, as against true owner
(b) If seller refuses to accept offer to return
of land or of interest therein. [J.M. Tuason v. CA,
goods: buyer deemed as bailee for seller
1979]
and has right of lien to secure payment of
The same rule must be applied to one who has part of price paid
knowledge of facts which should have put him
(2) Implied Warranty against Eviction[Arts. 1555,
upon such inquiry and investigation as might be
1556]
necessary to acquaint him with the defects in the
title of his vendor. A purchaser cannot close his
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Total Eviction Partial Eviction (b) Damages: Within 1 year from execution of
deed of sale or discovery of the burden or
Enforce liability for Enforce liability
servitude
eviction (demand VICED)
(4) Implied Warranty against Hidden Defects [Arts.
OR
1567-1571]
Demand from seller: Rescind within 6
If thing is not lost:
(VICED) months from delivery
(a) Withdraw from contract (accion
(a) Value of thing sold (a) If he would not have
redhibitoria) + damages
at time of eviction bought the thing sold
(b) Demand a proportionate reduction of the
(b)Income or fruits, if without the part lost;
price (accion quanti minoris) + damages
he has been ordered to (b) BUT he must return
deliver them to the the thing without other If thing is lost:
party who won the encumbrances than
Due to fortuitous event
eviction suit those which it had Due to hidden fault
or fault of buyer
(c) Costs of eviction suit when he acquired it
If seller aware of Demand:
and in a proper case,
defect, buyer may (a) Price paid minus
suit against seller for
demand: value of thing when it
warranty
(a) Return of price was lost
(d) Expenses of the
(b) Refund of expenses (b) Damages, if seller
contract, if buyer has
(c) Damages acted in bad faith
paid them
(e) Damages and If seller not aware of
interests, and defect:
Buyer may demand
ornamental expenses,
IF sale was made in price and expenses
bad faith BUT NOT damages

Rules: Prescriptive period: 6 mos from delivery


(a) Buyer need not appeal from decision to (5) Implied Warranty against Redhibitory Defects
hold seller liable for eviction of Animals
(b) When adverse possession commenced
Remedies
before sale, but prescription period
completed after transfer: seller is not (a) Withdraw from contract + damages
liable (b) Demand a proportionate reduction of the
(c) If property sold for nonpayment of taxes price + damages
due and not made known to the buyer If sale is rescinded:
before the sale: seller liable (a) Buyer must return animal in the condition
(d) Judgment debtor also responsible for in which it was sold and delivered
eviction in judicial sales, unless it is (b) Buyer shall be liable for injury due to his
otherwise decreed in the judgment negligence.
If there is waiver of warranty: Prescriptive period: 40 days from delivery
(a) Seller acted in bad faith: Waiver is void,
seller liable for eviction
(b) Buyer made waiver without knowledge of K.6. WARRANTY IN SALE OF CONSUMER
risks of eviction: Seller liable only for the GOODS
value of the thing sold at time of eviction
[RA 7394, Sec 68]
(c) Buyer made waiver with knowledge of
risks: Seller not liable; buyer assumed the If implied warranty accompanies express
consequences warranty, both will be of equal duration.
(3) Implied Warranty against Encumbrances[Art. Express Warranty Implied Warranty
1560]
(1) Demand repair (1) Retain the goods
(a) Rescission: Within 1 year from execution
within 30 days and recover damages
of deed of sale OR
Extendible for causes OR
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Express Warranty Implied Warranty V. Obligations of the


beyond the control of (2) Reject the goods,
the warrantor cancel contract and Vendee
(2) Demand refund of recover from seller so
price minus amount much of the purchase A. OBLIGATION TO ACCEPT DELIVERY
directly attributable to price as has been paid
the use of the + damages A.1 WHAT IS ACCEPTANCE
consumer prior to the Acceptance is assent to become owner of the
discovery of the non- specific goods when delivery of them is offered to
conformity the vendee. [De Leon]
(i) Modes
(1) Express acceptance
(2) Implied acceptance
(a) When the vendee, after delivery of goods,
does any act inconsistent with the
vendor’s ownership or makes alteration
in them in a manner proper only for an
owner
Acts inconsistent with vendor’s
ownership:
(i) Use of property except if the single
act of use does not affect the
condition or value of the property
(ii) Resale or mortgage
(iii) AlterationConduct after rejection –
if the vendee performs an act
inconsistent with the vendor’s
ownership after rejection
(ii) Vendee’s refusal
If vendee has the right to refuse and rightfully
refused upon delivery,
(1) He has no obligation to return them
UNLESS otherwise agreed
BUT he has to take reasonable care of the
goods
(2) He is not a depositary thereof
UNLESS he voluntarily agrees to be one
If the vendee’s refusal to accept is wrongful
(a) The title passes to the vendee from the
moment they are placed at his disposal
UNLESS there is a stipulation to the contrary (as
specified in Article 1523, par. 1)
(b) When the buyer, after the lapse of a
reasonable time, retains the goods
without intimating his rejection.
A.2 BUYER’S RIGHT TO EXAMINE

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General rule: The buyer is not deemed to have (5) If the vendee has already fully paid the
accepted the goods delivered which he has not price [De Leon]
previously examined unless and until he has had
B.3 PAYMENT IN INSTALLMENTS
a reasonable opportunity to examine them for the
purpose of ascertaining whether they are in General rule: The vendee has no right to pay in
conformity with the contract installments
Exception: If there is no stipulation to the contrary Exception: Unless otherwise agreed
(ART. 1584, par.1)
General rule: The seller is bound, when he C. OBLIGATION TO BEAR THE EXPENSES
tenders delivery to the buyer, on request, to afford FOR THE EXECUTION AND REGISTRATION
the buyer a reasonable opportunity to examine OF THE SALE AND PUTTING THE GOODS
the goods for the purpose of ascertaining IN A DELIVERABLE STATE, IF SO
whether they are in conformity with the contract. STIPULATED
Exception: Unless otherwise agreed upon (ART.
1584, par. 2)
A.3 DELIVERY OF GOODS IN INSTALLMENT
General rule: The vendee is not bound to accept
delivery of goods in installment
Exception: Unless otherwise agreed (ART. 1583)

B. OBLIGATION TO PAY THE PRICE


B.1 OBLIGATION TO PAY INTEREST
The three instances when the vendee shall pay
interest for the period between delivery and
payment of the price:
(1) If there was a stipulation
(2) If the thing sold and delivered produces
fruits or income
(3) If the vendee is in default, from the time
of judicial or extrajudicial demand for
payment (ART. 1589)
B.2 RIGHT OF VENDEE TO SUSPEND PAYMENT
OF PRICE
The vendee has the right to suspend in two
instances:
(1) If he is disturbed in the possession or
ownership of the thing bought
(2) If he has a well-grounded fear that his
possession or ownership would be
disturbed by a vindicatory action or
foreclosure of mortgage (ARTICLE 1590)
Exceptions
(1) If the vendor gives security for the return
of the price in a proper case
(2) If it has been stipulated
(3) If the vendor caused disturbance or
danger to cease
(4) If the diustrubance is a mere act of
trespass
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(a) Seller delivers goods to carrier or other


VI. Breach of Contract of bailee for transmission to the buyer
Sale without reserving ownership or right of
possession (i.e. under a straight or
A. GENERAL REMEDIES [ART 1191] non-negotiable bill of lading)
(b) Buyer or his agent lawfully obtains
The following remedies arise from the bilateral possession of goods
nature of the contract of sale: (c) Seller waives the lien
(1) Specific performance (i) But it is not lost with respect to the
(2) Rescission remainder of the goods when only
General rule: Rescission of a contract will not partial delivery is made (unless
be permitted for a slight or casual breach, but such is symbolic delivery of the
only for such substantial and fundamental whole)
breach as would defeat the very object of the (ii) It is not lost by the mere fact that
parties in making the agreement. [Song Fo & seller obtained a judgment for the
Co. vs. Hawaiian-Philippine Co., 1925] price
(3) Damages When Lien May Be Revived After Delivery
Prescriptive periods (a) If the buyer refuses to receive the
(1) 10 years if based on written contract goods after the same are delivered to
(2) 6 years if based on oral contract the carrier or other bailee on his behalf,
though the seller has parted with both
ownership and possession. Here, the
B. REMEDIES OF THE SELLER seller may reclaim the goods and
revest the lien.[Art 1531, par.1(2)]
[ARTS. 1636, 1594] (b) If the buyer returns the goods in
B.1. SALE OF MOVABLES wrongful repudiation of the sale, and
the seller, in accepting the goods from
Extrajudicial or Self-Help Remedies –No need the buyer, says he does not assent to
to resort to the courts as long as possession of the rescission.
the goods has not yet passed to the buyer
Possessory lien is lost after the seller loses
(1) Possessory Lien Over The Goods possession but his lien as an unpaid seller
Right to retain possession of goods until remains. His preference can only be
payment or tender of the whole price, or defeated by the government’s claim to the
unless he agrees to sell on credit [Arts. specific tax on the goods. [Arts 2241, 2247]
1526-1529, 1503, 1535]
(2) Right Of Stoppage In Transitu
When lien available
(a) The seller is unpaid An extension of the lien for the price;
(b) The unpaid seller has possession over entitles unpaid seller to resume
the thing possession of the goods while they are in
(c) Ownership of the thing has passed to transit before the goods come in
the buyer possession of the vendee [Arts. 1530-1532,
(d) Any of the following: [Art 1527] 1535, 1636[2]]
(i) Goods are sold without stipulation Requisites for the exercise of stoppage in
as to credit transitu
(ii) Goods are sold on credit, but term (a) The seller is unpaid
of credit has expired (b) The buyer is insolvent
(iii) Buyer becomes insolvent (c) The goods are in transit
The seller may exercise his right of lien (d) The seller either takes actual
notwithstanding that he is in possession of possession, or gives notice of claim to
the goods as agent or bailee for the buyer the carrier or other person possessing
[Art 1527, par. 2] the goods
When unpaid seller loses his lien [Art 1529]
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(e) The seller must surrender the (b) Carrier not obliged to redeliver
negotiable instrument or title, if any, until the negotiable document of
issued by the carrier/bailee title, if any, has been surrendered
(f) The seller must bear the expenses of for cancellation
the delivery of the goods after exercise
Effect When Buyer Has Sold the Goods[Art
of such right.
1535]
When Goods Are In Transit [Art 1531, first General Rule: Seller’s right to stoppage in
paragraph] transitu is not affected even if buyer has
(a) From the time of delivery to the carrier sold or disposed of the goods unless the
or other bailee by the seller, for the seller has given his assent thereto.
purpose of transmission to the buyer,
Exceptions:
until the buyer or his agent takes such
(a) When seller has given consent thereto
delivery from the carrier.
(b) When a negotiable document of title
(b) Even when goods have reached their
has been issued for the goods to a
ultimate destination, if buyer rejects
purchaser for value in good faith
them and carrier retains possession
(3) Special Right of Resale
To terminate transit by delivery to a
middleman, delivery must be to keep, not Available to unpaid seller who has a right
to transport. of lien or who has stopped the goods in
transitu [Art. 1533]
In case of misdelivery, the goods are still
considered in transit, hence, the seller may When available
still exercise his right pursuant to Article When the unpaid seller has either a right
1523. of lien or has stopped the goods in transitu
and under any of the following conditions:
When Goods Are No Longer In Transit[Art
(a) The goods are perishable in nature
1531, par. 2]
(b) The right to resell is expressly reserved
(a) Buyer obtained delivery of the goods
in case the buyer should default
before they have reached their
(c) The buyer delays in paying the price
appointed destination
for an unreasonable time
(b) Goods have arrived at the appointed
The right to resell the goods is not
destination, and the carrier/bailee
mandatory, but permissive.
acknowledges to hold the goods on
behalf of the buyer How exercised
(c) Goods have arrived at the appointed (a) He must do so within a reasonable
destination, but carrier wrongfully time and in such manner as to obtain
refuses to deliver to buyer/his agent the best price possible.
(b) The place of sale shall be at the place
Note: If the goods are delivered to a ship,
of delivery, except if the seller cannot
freight train, truck, or airplane chartered
sell the thing at a fair price at the
by the buyer, it is a question depending on
place of delivery.
the circumstances of the particular case,
(c) Resale is deemed to be a fair sale if it
whether they are in the possession of the
is undertaken in accordance with
carrier as such or as agent of the buyer.
established business practices, with no
How Right Is Exercised[Art 1532] attempt to take advantage of the
(1) By obtaining actual possession of the original buyer.
goods (d) Resale may be in a private or public
(2) By giving notice of his claim to the sale, but seller cannot buy directly or
carrier/other bailee who has indirectly.
possession of the goods (e) For resale to be valid, buyer need not
(a) Carrier must redeliver goods to be notified of an intention to resell or
seller, or according to his the time and place of the resale.
instructions
Exception: if the ground for resale is failure
to pay for an unreasonable amount of time
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The seller must exercise reasonable (a) When lessor has deprived the lessee of
judgment in making the sale. the possession or enjoyment of the thing
(i.e. lessor files a complaint for replevin
Effects of Resale
against lessee)
(a) Seller is no longer liable to the original
(b) Also applies when seller assigns his credit
buyer upon the contract of sale or for
to someone else
any profit made by the resale
(b) Buyer at resale acquires good title as C.2. ALTERNATIVE AND EXCLUSIVE REMEDIES
against the original owner
The exercise of one remedy bars the exercise of
(c) In case resale is at a loss, seller is
the others.
entitled to recover the difference from
the original buyer (1) Specific Performance
(d) Seller may recover damages from
General Rule: When the seller has chosen specific
original buyer for breach of contract
performance, he can no longer seek for rescission
(4) Special Right to Rescind or foreclosure of the chattel mortgage
Return of the title over the undelivered Exception: If specific performance has become
goods to the seller, and right to recover impossible, the seller may still choose rescission
damages for breach of contract [Art. 1534] [Art 1191]
When available (2) Cancellation of sale if vendee fails to pay 2 or
When the unpaid seller has either a right more installments
of lien or has stopped the goods in transitu (a) When the seller cancels the sale by
and under any of the following conditions: repossessing the property sold, he is
(a) Seller expressly reserved his right to barred from exacting payment for its
rescind in case buyer defaults price.
(b) Buyer has been in default in payment (b) It can only be carried out when he who
for an unreasonable time demands rescission can return whatever
he may be obliged to restore [Art 1385]
Transfer of title shall not be held to have
been rescinded by the unpaid seller until (3) Foreclosure of Chattel Mortgage if vendee
he manifests by notice to the buyer or fails to pay 2 or more installments
some other overt act an intention to (a) If seller chooses this remedy, he shall
rescind. have no further action to recover any
unpaid balance, and any stipulation to
Communication to buyer of rescission is
the contrary shall be void.
not always necessary (it can be an overt
(b) The purpose of the law is to remedy the
act). But giving/failure to give notice is
abuses committed in foreclosure of
relevant in determining reasonableness of
chattel mortgages. It prevents
time given to the buyer to make good his
mortgagees from seizing the mortgaged
obligation under contract. [De Leon]
property, buying it at foreclosure sale for
C. RECTO LAW: SALE OF MOVABLES ON a low price and then bringing the suit
INSTALLMENT – ARTS. 1484-1486 against the mortgagor for a deficiency
judgment. The almost invariable result of
C.1. WHEN APPLICABLE this procedure was that the mortgagor
(1) Sale of movables in installment found himself minus the property and still
owing practically the full amount of his
The rule is intended to apply to sales of movables, original indebtedness. [Bachrach Motor
the price of which is payable in 2 or more Co., Inc. v. Millan, 1935]
installments, but not to straight-term sales where
the price is payable in full, after making a down
payment because the law aims to protect D. SALE OF IMMOVABLES
improvident buyers who may be tempted to buy
beyond their means. [Levy Hermanos vs. Gervacio, D.1. RESCISSION FOR ANTICIPATORY BREACH
1939] [Art. 1591]
(2) Lease of personal property with option to buy
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This is applicable to both cash sales and to sales (3) If the buyer fails to pay the installments for
in installments. reasons other than the failure of the owner or
developer to develop the project, his rights
Requisites
shall be governed by RA 6552.
(1) There is delivery of immovable property
(2) Vendee has not yet paid the price; and
(3) Vendor has reasonable ground to fear the F. MACEDA LAW (RA 6552): SALE OF
loss of property and the loss of price IMMOVABLES ON INSTALLMENT
If there is no such reasonable ground, Art 1191 RA 6552 does NOT apply to:
applies (specific performance or rescission with (1) Industrial lots
damages). (2) Commercial buildings
Court has no discretion to compel the seller to (3) Sale to tenants under Agricultural Reform
wait for the expiration of the period to pay, or to Code [RA 3844]
grant the buyer more time to pay. (4) Sale of lands payable in straight terms [RA
6552, Sec 3]
D.2. SPECIFIC PERFORMANCE + DAMAGES OR
RESCISSION + DAMAGES Rights of the Buyer:
[Art. 1191] The law imposes additional requirements on the
part of the seller for a valid rescission
(1) Seller may choose between specific (1) If buyer has paid at least 2 years of
performance and rescission, with damages in installments then defaults:
either case. (a) Buyer has right to a grace period of 1
(2) Court has discretion, for a just cause, to give month per year of installment payment
the buyer more time to pay even if the seller made BUT the buyer may only avail of the
chooses rescission. grace period once every 5 years
(3) If seller chose specific performance, and such (b) Buyer has right to the refund of Cash
becomes impossible, he may still avail of Surrender Value (CSV): 50% of total
rescission amount paid + 5% for every year after the
(4) If absolute sale, seller must make a demand first 5 years of installments BUT total CSV
for rescission should not be greater than 90% of total
(a) Judicially, OR amount paid
(b) By a notarial act (c) After the lapse of the grace period, buyer
(5) Demand necessary even if automatic is given a notice of cancellation or
rescission is stipulated demand for rescission by notarial act,
(a) Effect of lack of demand: Buyer can still effective 30 days from the buyer’s receipt
pay thereof AND only upon full payment of
(b) Effect of demand: Court may not grant CSV
buyer a new term (2) If buyer has paid less than 2 years of
E. PD 957, SECTIONS 23 AND 24 installments:
(a) Grace period of at least 60 days
Non-forfeiture of payments (b) After the lapse of the grace period, buyer
(1) No installment payment made by the buyer is given a notice of cancellation or
shall be forfeited in favor of the owner or demand for rescission by notarial act,
developer of the condominium or subdivision effective 30 days upon receipt thereof
project, after due notice, when the buyer (3) During the grace period, the buyer shall also
desists from paying due to the failure of the have the right:
developer or owner to develop the project (a) To sell or assign his rights, evidenced in a
according to the approved plans or within the notarial instrument
time limit stated. (b) To update his account
(2) Buyer’s Remedy: At his option, he may (c) To pay in advance any installment, or the
reimburse the total amount paid including full unpaid balance of the price, without
amortization interest with interest thereon at any interest, and to have such full
the legal rate payment of the purchase price annotated

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in the certificate of title covering the (2) Remedy for breach of obligation to deliver
property.
(a) Deliveryof wrong quantity [Art. 1522]
Down payments, deposits, or options on the
Goods are LESS THAN Goods are MORE THAN
contract shall be included in the total number of
what was contracted what was contracted
installments made.
Reject the goods Reject the excess
The seller may go to court for judicial rescission in OR OR
lieu of a notarial act of rescission. Accept and pay Reject the whole, if
Cancellation pertains to extrajudicial cancellation. (a) At contract rate if indivisible
Absence of notice does not bar the filing of an buyer accepts knowing OR
action to cancel the contract. that seller won’t Accept the whole and
perform in full pay at contract rate
A decision in an ejectment case can operate as (b) At fair value if
notice of cancellation as required by RA6552. goods were used
However, mere filing of an unlawful detainer suit before knowing that
by the seller does not operate as such notice. [De seller won’t be able to
Leon] perform in full

Buyer becomes the


G. REMEDIES OF THE BUYER owner of the whole
mass and the seller is
General rule: Courts will refuse to decree specific bound to make good
performance with respect to chattels because the deficiency [Art
damages are a sufficient remedy 1464]
Exception: Buyer is entitled to the specific thing G.2. SALE OF IMMOVABLES
which to him has special value and which he
cannot readily obtain in the market OR where [Art 1539 – 1543]
damages would not furnish a complete and (1) If at the rate of a certain price per unit of
adequate remedy [Baviera] measure or number
G.1. SALE OF MOVABLES Less (in area or quality) More (in area or quality)
(1) Remedy for breach of obligation to preserve than what was agreed than what was agreed
upon: upon:
(a) If thing is lost— Proportional reduction
Through fault of seller / of price
Without fault of seller
Through Fortuitous Event OR
(if seller is liable) Rescission, if:
NO BREACH. Damages (a) Lack in area is at
Obligation is least 1/10 of what is Reject the excess
extinguished. stated, or inferior value OR
of thing sold exceeds Accept the whole and
A thing is lost when it— 1/10 of price pay at contract rate
(i) Perishes (b) Buyer would not
(ii) Goes out of commerce of man have bought the
(iii) Disappears in such a way that its property has he been
existence is unknown or it cannot be aware of the inferior
recovered quality or smaller area
(b) If thing deteriorates This rule also applies to judicial sales [Art. 1541]
(2) If for a lump sum
Without fault of seller Through fault of seller
NO BREACH. Rescission + damages Everything is within
Impairment shall be OR boundaries, even if Not everything is within
borne by buyer Specific performance + less or more than the boundaries
damages stated area

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Everything is within
boundaries, even if Not everything is within VII. Extinguishment of
less or more than the boundaries
stated area
Sale
No remedy Proportional reduction in A. CAUSES
price
Where both the area OR [ARTS. 1600, 1231]
and the boundaries of Rescission Generally, extinguished by the same causes as all
the immovable are other obligations [Arts.1600, 1231]
declared, the area
covered within the (P-PLAN-C3-R3)
boundaries of the (1) Payment/performance
immovable prevails (2) Prescription
over the stated area. (3) Loss of thing due
[Rudolf Lietz, Inc. v. (4) Annulment
CA, 2005] (5) Novation
(6) Condonation/remission
Prescriptive period: 6 months counted from date (7) Confusion/merger
of delivery (8) Compensation
(9) Rescission
(10) Resolutory condition fulfilled
(11) Redemption (Conventional or Legal)
B. CONVENTIONAL REDEMPTION
[ART. 1601]
B.1. DEFINITION
(1) Vendor reserves the right to repurchase the
thing sold, with the obligation to comply with
the provisions of Article 1616 and other
stipulations which may have been agreed
upon. [Art 1601,CC]
(2) Available when the seller reserves the right to
repurchase the thing sold in the same
instrument of sale as one of the stipulations
of the contract [Villarica v CA, 1968]

B.2. PERIOD
General Rule: Follow period stipulated in contract,
but should not exceed 10 years.
Exceptions:
(1) If no period stipulated but the parties
intended a period, then it shall be 10 years
from the date of the contract.
(2) If no period stipulated, then it shall be four
years from the execution of the contract
(3) But vendor may still exercise the right to
repurchase within thirty days from the time
final judgment was rendered in a civil action
on the basis that the contract was a true sale
with right to repurchase

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B.3. BY WHOM EXERCISED (2) The seller shall receive the thing free from all
charges or mortgages constituted by the
(1) Vendor
buyer BUT he shall respect leases executed
(2) His heirs, assigns or agents
by the buyer in good faith and in accordance
(3) Creditor, if he has exhausted the property of
with local custom.
the vendor
(3) As to fruits:
(4) Co-owners of an immovable, if they sold their
(a) If parties agreed on a distribution, the
interests to the same person, may only
fruits shall be distributed according to the
redeem their respective shares
agreement.
(a) Vendee cannot be compelled to agree to
(b) If parties did not agree on a distribution,
a partial redemption
(i) If there are growing fruits at the time
(b) If the co-owners sold their interest to the
of sale and at the time of redemption:
same person who previously bought the
(1) Buyer receives reimbursement if
share of a co-owner subject to a right of
the buyer paid indemnity at the
redemption, then the latter may be
time of the sale
compelled to redeem the whole property
(2) Buyer receives no reimbursement
or prorating if the buyer did not
B.4. FROM WHOM TO REDEEM pay indemnity at the time of sale
(ii) If there were no growing fruits at the
(1) Vendee a retro
time of sale, but some exist at the
(2) His heirs, assigns or agents
time of redemption: fruits prorated
(3) Subsequent purchaser of property, even if the
(buyer entitled to part corresponding
right to redeem was not mentioned in the
to time he possessed the land in the
subsequent contract; except if registered land,
last year, counted from the
where the right to redeem must be annotated
anniversary of the date of sale)
on the title
(4) If several heirs, then the right of redemption
can be exercised against each heir for his B.7. EFFECT OF NON-REDEMPTION
share of the property
Ownership is consolidated in the buyer BUT the
consolidation shall not be recorded in the
B.5. HOW EXERCISED Registry of property without a judicial order, after
the vendor has been duly heard.
(1) By returning the ff. to the buyer: (PEN)
(a) Price of the sale
B.8. RIGHT TO REDEEM VS OPTION TO
Except if the parties agreed on a
PURCHASE
redemption price
(b) Expenses of the contract and other Right to Redeem Option to Purchase
legitimate payments made by reason of
the sale; Not a separate contract Generally a principal
(c) Necessary and useful expenses made on but part of a main contract and may be
the thing sold contract of sale, and created independent of
(2) Complying with any other stipulation agreed cannot exist unless another contract
upon, if any. reserved at the time of
the perfection of the
The general rule in redemption is that it is not main contract of sale
sufficient that a person offering to redeem Does not need its Must have a
manifests his desire to do so. The statement of separate consideration consideration separate
intention must be accompanied by an actual and to be valid and effective
and distinct from the
simultaneous tender of payment for the full purchase price to be
amount of the repurchase price. [BPI Family valid and effective
Savings Bank, Inc. v. Veloso, 2004] [Arts. 1324 and 1479]
The maximum period The period of the
B.6. EFFECT OF REDEMPTION for the exercise of the option contract may be
right to repurchase beyond the 10-year
(1) The sale is extinguished cannot exceed 10 years period
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Right to Redeem Option to Purchase transaction to secure a debt or other


obligation.
Requires in addition a May be exercised by The right of repurchase is not a right granted to
tender of payment of notice of its exercise to the seller by the buyer in a subsequent
the amount required by the offeror instrument, but one reserved by the seller in the
law, including same instrument as the sale contract. Any right
consignment thereof if granted after the execution of the sale instrument
tender of payment is not a right to repurchase, but some other right
cannot be made like an option to buy. [Roberts v. Papio, 2007]
effectively on the buyer

C.2. REQUISITES FOR PRESUMPTION OF AN


C. EQUITABLE MORTGAGE EQUITABLE MORTGAGE
[ARTS. 1602-1604] (1) That the parties entered into a contract
An equitable mortgage is defined as one which, denominated as a contract of sale, and
although lacking in some formality, or form or (2) That their intention was to secure an existing
words, or other requisites demanded by a statute, debt by way of a mortgage. [Molina v. CA,
nevertheless reveals the intention of the parties 2003]
to charge real property as security for a debt, and In case of doubt, a contract purporting to be a
contains nothing impossible or contrary to law. sale with right to repurchase shall be construed
[Molina v. CA, 2003] as an equitable mortgage [Art. 1603]
A pactum commissorium is a stipulation enabling
the mortgagee to acquire ownership of the
mortgaged properties without need of foreclosure C.3. RATIONALE BEHIND PROVISION ON
proceedings which is a nullity being contrary to EQUITABLE MORTGAGE
the provisions of Article 2088 of the Civil Code. (1) Circumvention of usury law
The inclusion of such stipulation in the deed (2) Circumvention of prohibition against pactum
shows the intention to mortgage rather than to commissorium – creditor cannot appropriate
sell. [Legaspi v. Spouses Ong, 2005] the things given by way of pledge or
A pactum commissorium is contrary to the nature mortgage since remedy is foreclosure.
of a true pacto de retro sale since ownership of the
property sold is immediately transferred to the C.4. REMEDIES OF APPARENT VENDOR
vendee a retro upon execution of the sale, subject
only to the repurchase of a vendor a retro within (1) If the instrument does not reflect the true
the stipulated period. agreement: remedy is reformation
(2) If decreed to be an equitable mortgage: any
money, fruits or other benefit to be received
C.1. PRESUMPTION THAT A CONTRACT IS AN by the buyer as rent or otherwise considered
EQUITABLE MORTGAGE (5p-r) as interest.
[Art. 1602] (3) If decreed as a true sale with right to
purchase: seller may redeem within 30 days
(1) Price unusually inadequate; from finality of judgment, even if the period
(2) Possession retained by the seller as lessee or for redemption has expired.
otherwise;
(3) Period of redemption extended (or granted
anew) upon or after the expiration of the right C.5. PERIOD OF REDEMPTION
to repurchase; [ART. 1606]
(4) Part of the purchase price retained by the
seller; (1) No stipulation: 4 years from the date of
(5) Payment of taxes on the thing sold borne by contract
the seller; (2) When there is agreement: Period not to
(6) Any other case where it may be fairly inferred exceed 10 years
that the Real intention of the parties is for the
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(3) General Rule: Period starts to run from the (2) A sincere or genuine tender of payment is
date of the execution of the contract enough. The deposit of the amount of the
(4) Exception: When the efficacy of the sale is repurchase money with the Clerk of Court was
subject to a suspensive condition, period simply and additional security [Legazpi v.
should be counted not from the date Court of Appeals, 1986]
appearing on the instrument, but from the (3) When tender of payment cannot be validly
date when the condition is fulfilled, marking made because the buyer cannot be located, it
the consummation of the sale [Tolentino becomes imperative for the seller a retro to
citing Manresa]. file a suit for consignation with the courts of
the redemption price [Catangcatang v.
Legayada, 1978].
Additional 30 days for Repurchase (4) If the offer or tender of payment for
repurchase is refused, it is not necessary for
The last paragraph of Art. 1606 giving the vendor
the vendor a retro to consign in court or make
the right to repurchase within 30 days from the
judicial deposit of the repurchase price
time of the rendition of final judgment applies
[Rosales v. Reyes, 25 Phil 495].
only where the nature and the character of the
transaction, whether as a pacto de retro or an The seller a retro is given no option to require the
equitable mortgage, was put in issue before the buyer a retro to remove the useful improvements
court [Gonzales v. De Leon, 4 SCRA 332] on the land subject of the sale a retro, unlike that
granted the owner of a land under Arts. 546 and
When an unrecorded pacto de retro sale was
547. Under Art. 1616, the seller a retro must pay
construed as an equitable mortgage, the plaintiff
for useful improvements introduced by the buyer
had the right to enforce his lien in a separate
a retro; otherwise, the latter may retain
proceeding notwithstanding the fact that he had
possession of the land until reimbursement is
failed to obtain judgment declaring him the sole
made. [Gargollo v. Duero, 1961]
and absolute owner of the land. [Heirs of Arches v.
Diaz, 1973]
Where the petition of the buyer in a pacto de retro D. LEGAL REDEMPTION
sale is for a judicial orders pursuant Art. 1607, so
that there may be consolidation of ownership [ART. 1619]
since there was failure to redeem during the D.1. DEFINITION
redemption period, the right of action to foreclose
or to collect the indebtedness arises from the (1) Right to be subrogated:
court judgment declaring the contract an (a) upon the same terms and conditions
equitable mortgage. stipulated in the contract,
(b) in the place of one who acquires a thing
by purchase or dation in payment, or by
C.6. EXERCISE OF THE RIGHT TO REDEEM any other transaction whereby ownership
is transmitted by onerous title [Art 1619,
[ART. 1616] CC]
The seller can avail himself of the right of (2) Applies to transfers of ownership by onerous
repurchase by returning to the buyer: title where subrogation is possible. Hence, it
(1) the price of the sale cannot apply to barter or to transfer by
(2) the expenses of the contract and any other gratuitous title or hereditary succession.
legitimate payments made by reason of the (3) Applies to sales with pacto de retro [Baviera
sale citing MANRESA]
(3) the necessary and useful expenses made on
the thing sold [Art.1616]. D.2. MANNER
C.7. HOW REDEMPTION IS EXERCISED (1) a formal offer to redeem or
(1) The vendor de retro must complete the (2) filing of an action in court together with the
repurchase before the expiration of the consignation of the redemption price within
redemption period [Panganiban v. Cuevas, 7 the reglementary period
Phil 477]. (3)

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D.3. PERIOD TO REDEEM To whom granted Period


To whom granted Period foreclosure of real
estate mortgage IF the
Co-owner [Art 1620] 30 days from notice
mortgagee is a bank or
(a) In writing
a banking institution.
Adjoining owner of (b) By the seller
[The
Rural Land [Art 1621] (c) Of the actual
General Banking Law
execution and delivery
of 2000]
Adjoining owner of of the deed of sale
urban land [Art. 1622] Agricultural lessee w/o 2 years from the
Actual knowledge of knowledge of sale of registration of the sale
the sale is immaterial, landholding [Agrarian
Land
absent any showing
that the co-owner has Reform Code, Sec.12]
been shown a copy of The notice required in Art. 1623 must be given by
the deed of sale the seller, because the seller is in a better
through a written position to identify who his co-owners are. Said
communication. provision is clear.[Francisco v. Boiser, 2000]
[Doromal v. CA, 1975]

The law did not provide D.4. INSTANCES OF LEGAL REDEMPTION


for a particular mode of
(1) Redemption by Co-owners[Art. 1621]
written notice, thus any
A co-owner of a thing may exercise the right
compliance with
of redemption in case the shares of all the co-
“written notice” should
owners or any of them are sold to a third
suffice, including the
person
giving of a copy of the
(a) Third person refers to all persons who are
deed of sale. [Cronejero
not heirs of the vendor, by will or
v. CA, 1966]
intestate succession
Debtor in case a credit 30 days from the date
(b) The right is available not only to original
or the assignee demands co-owners, but to those who had later
incorporeal right in payment from debtor
acquired the share of the co-owner
litigation is sold
(c) But the right of redemption may be
[Art.1634]
exercised by a co-owner only when part of
Taxpayer in case of tax 1 year from date of the community property is sold to a
sale [Sec. 215, NIRC] forfeiture stranger. When the portion is sold to
Judgment debtor, 1 year from the date of another co-owner, the right does not
successor–in- interest, registration of the arise because a new participant is not
or creditor with certificate of sale added to the co-ownership [Fernandez v.
subsequent lien, in Tarun, 2002]
case of execution sale
[Rule 39, Sec.27, ROC] If the price of the alienation is grossly
Debtor-mortgagor, 1 year from the date of excessive, the redemptioner shall pay only a
successors-in- interest, the sale reasonable one.
judicial/judgment Should two or more co-owners desire to
creditor, any person exercise the right, they may also do so in
having a lien on the proportion to the share they may respectively
property, in case of have in the thing owned in common.
extrajudicial
foreclosure of The ff. requisites must concur:
mortgage [Act No. (a) Co-ownership of a thing
3135. Sec. 6.] (b) Alienation of shares of co-owners or all of
Debtor-mortgagor in 90 days from finality of the other co-owners
case of judicial judgment (c) Sale must be to a third person or stranger

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(d) Sale must be before partition (4) Redemption of Credit


(e) Right must be exercised within the period Available when it is sold while in litigation
specified in Article 1623 (From the time the complaint is answered)
(f) Buyer must be reimbursed the price of the
sale Not available when the assignment is in favor
of:
Rationale: Public Policy, since co-ownership (a) Co-heir/co-owner of right assigned
is a hindrance to the development and
(b) Creditor in payment of his credit
administration of the property. [Baviera]
(c) Possessor of a tenement or piece of land
(2) Redemption by Adjoining Land-owners of which is subject to the right assigned
rural land [Art. 1621]
How exercised: reimburse the assignee for
The ff. requisites must concur: the:
(a) All lands must be rural lands (a) Price paid
(b) Lands must be adjacent to each other (b) Judicial expenses incurred
(c) A piece of rural land is alienated (c) Interest on the price from date of
(d) Area does not exceed one hectare payment
(e) Buyer must already own other rural lands Under the Public Land Act
When not applicable Coverage:
(a) The grantee does not own any rural land (a) Every conveyance of land acquired under
(b) Adjacent lands are separated by brooks, a free patent or homestead
drains, roads and other apparent (b) The ownership of the land must have
servitudes for the benefit of other estates been transferred to another. If the
Order of preference if two or more wishes to transaction is a mere promise to sell,
exercise the right: there is no right yet to redeem
(a) Owner with smaller land area (c) This refers to conveyances made after the
(b) If same land area, then the one who first prohibited 5 years from the issuance of
requested the redemption the patent or grant
(3) Redemption by adjoining land-owners of Period:
urban land (applies only to small portions of (a) Within 5 years from the date of
urban land) [Art. 1621] conveyance
(b) If pacto de retro sale, the period to
Right of Pre-emption Right of Redemption redeem cannot be less than 5 years
Owner of any adjoining If the resale has been Who may redeem:
land has a right of pre- perfected, the owner of
(a) General Rule: Applicant, widow, or heirs
emption at a the adjoining land shall
(b) Exception: land is sold to another
reasonable price when: have a right of
member of the family of the applicant, or
(a) Urban land is so redemption, also at a
his direct descendant or heir
small and so situated reasonable price
(c) From whom: Subsequent purchasers
that a major portion of
it cannot be used for Priority if 2 or more The right to redeem can be exercised against
any practical purpose adjoining owners want any subsequent purchaser even if the land is
w/in a reasonable to redeem: owner registered under the Torrens System
time; whose intended use of becausethe fact that it was acquired through
(b) Was bought merely the land appears to be a homestead or free patent can be seen from
for speculation; best justified the description of the property in the
(c) Was resold certificate of title.
Arises before sale Arises after sale
(5) Redemption in Foreclosure and Execution
No rescission because There can be rescission Sales
no sale exists yet of the original sale
The action is directed Action is directed Who may redeem
against prospective against buyer In extra judicial In execution sales
seller foreclosure (a) Judgment debtor
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(a) Debtor (b) Successor in


(b) Successor in interest VIII. Assignment of
interest
(c) Judicial or judgment
(c) Creditor having a
lien on the property
Credits
creditor of said debtor sold by attachment, Art. 1624 An assignment of credits and other
(d) Junior judgment or mortgage incorporeal rights shall be perfected in
encumbrancer on the property accordance with the provisions of article
subsequent to the 1475.
judgment A. DEFINITION
Period to redeem
Extra-judicial Execution If land is An assignment of credit is a contract by which the
foreclosure: sale: mortgaged in owner (assignor/creditor) of a credit and other
within 1 year within 12 favor of a bank: incorporeal rights transfers, either onerously or
from the date months after within 1 year gratuitously, to another (assignee) his rights and
of the sale the sale after the sale actions against a third person (debtor). [De Leon]
(not available in
case of a B. NATURE
corporate
mortgagor) It is a consensual, bilateral, generally onerous,
Amount of redemption and commutative or aleatory contract. [De Leon]
(a) Amount of the purchase Where the aassignment is on account of pure
(b) Interest at 1% per month from the time of the liberality on the part of the assignor, the rules on
sale up to the time of redemption donation would be pertinent; where valuable
(c) Any assessment or taxes which the purchaser consideration is involved, the assignment
may have paid partakes of the nature of a contract of sale or
(6) Under the Agrarian Land Reform Code purchase. [Nyco Sales Corporation vs. BA Finance
Corporation, 200 SCRA 637, 1991]
Lessee’s right of pre-emption
The agricultural lessee shall have the It merely effects the transfer of rights which the
preferential right to buy under the same assignor has at the time [of the assignment] to
reasonable terms and conditions, in case the the assignee. [Casabuena vs. CA, 286 SCA 594,
lessor decides to hold the landholding 1998]

Conditions: The act of assignment cannot operate to erase


(a) The landholding must be pre-empted by liens or restrictions burdening the right assigned.
the DAR [Gonzales vs. Land Bank of the Philippines, 183
(b) When two or more lessees, each shall SCRA 520, 1990]
have preferential right only to the extent
of the area cultivated by him
C. PERFECTION
Period: 180 days from notice in writing
It is perfected from the moment the parties agree
Lessee’s right of redemption upon the credit or right assigned and upon the
In case landholding is sold to 3rd person price but the assignee will acquire ownership only
without the knowledge of the lessee, the upon delivery. [De Leon]
latter shall have the right to redeem the same
at a reasonable price and consideration. [Sec.
12 RA 3844] D. ASSIGNMENT DISTINGUISHED FROM
Period: within 180 days from notice in writing OTHER TERMS
Renunciation is the abandonment of a right
without a transfer to another.

Agency involves representation, not transmission


wherein the agent acts for the principal.
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Substitution is the change of the previous debtor Payment to the original creditor is valid. The
by a new debtor with the credit remaining in the assignee has a right of action against the
same creditor. assignor, the original creditor. Burden of
proving that the debtor had knowledge of the
Subrogation is the change in the person of the
assignment is on the assignee. [Manresa
creditor with his credit being transferred to the
cited by De Leon]
new creditor.
(2) After notice, or before notice but debtor had
Dation in payment is the alienation of property to
knowledge of assignment
the creditor in satisfaction of a debt of in money.
Payment by the debto to the original creditor
It is also governed by the law on sales. It may be
after the former had received notice of the
legal or conventional.
assignment, whether or not he consented, is
not valid as against the assignee.
E. BINDING EFFECT If he had knowledge even before the notice
and still paid to the original creditor, he will
General rule: An assignment of a credit, right or
not be released from his obligation. He acted
action shall produce no effect as against third
in bad faith. He can be made to pay again.
persons.
[De Leon]
Note: No effect means no prejudice or damage
Exceptions:
(1) If it appears in a public instrument
H. EXTENT OF ASSIGNMENT OF CREDIT
(2) If it is recorded in the Registry of Property General rule: All the accessory rights (such as
in case the assignment involves real guaranty, mortgage, pledge or preference) are
property. included. (ART. 1627)
(3) The assignee cannot acquire greater rights
Exception: The parties may stipulate otherwise.
than those pertaining to the assignor. [Koa
[De Leon]
vs. Court of Appeals, 219 SCRA 541, 1993]
Art. 1626 The debtor who, before having
knowledge of the assignment, pays his I. WARRANTIES OF THE ASSIGNOR OF
creditor shall be released from the obligation. CREDIT
(1) When a credtor assigns his credit
F. CONSENT NOT NECESSARY (a) Existence
(b) Legality of credit at the perfection of the
Consent of debtor is not necessary; merely notice
contract
to him is necessary.
UNLESS the credit had been sold as
Hence, the duty to pay does not depend on the
doubtful
consent of the debtor; otherwise, all creditors
(2) No warranty as to the solvency of the debtor
would be prevented from assigning their credits
because of the possibility of the debtors’ refusal UNLESS it was expressly stipulated
to give consent. [Sison vs. Yap Tico, 27 Phil. 587,
UNLESS insolvency was already existing
1918]
PRIOR to the sale and of public knowledge at
The purpose of the notice by the assignee is to the time of the assignment
inform the debtor that from the date of the
assignment he should make payment to the
assignee and not to the original creditor. [supra] I.1. BREACH OF WARRANTIES
If there be any breach of the above warranties,
the assignor-vendor shall be held answerable
G. EFFECT OF PAYMENT BY DEBTOR therefor. [De Leon]
AFTER ASSIGNMENT OF CREDIT
(1) Before notice
I.2 LIABILITIES OF THE ASSIGNOR OF CREDIT

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(1) The liability of assignor in good faith: Limited The subject of sale is hereditary right and not the
to the price received and to the expenses of the objects which make up the inheritance. [De Leon]
contract, and any other legitimate payments by
The seller of hereditary rights warrants only the
reason of the assignment.
fact of his heirship but he does not warrant the
(2) The liability of assignor in bad faith: Price, all objects which make up his inheritance. The sale is
expenses, and damages only a sort of an aleatory contract. [De Leon]
As distinguished form a waiver of hereditary rights
I.3 DURATION OF ASSIGNOR’S LIABILITY The waiver is a mode of extinction of ownership
WHERE DEBTOR’S SOLVENCY GUARANTEED where there is an abdication or intentional
[ART. 1629] relinquishment of a known right with knowledge
of its existence and intention to relinquish it, in
In case of express warranty by assignor of
favour of other persons who are co-heirs in the
debtor’s solvency
succession. (Acap v CA, 251 SCRA 30, 1995)
(1) If there is a stipulation, for the term or period
fixed
(2) If there is NO stipulation,
(a) For 1 year from the assignment of the K. SALE OF WHOLE OF CERTAIN RIGHTS,
credit when the period for payment of the RENTS, OR PRODUCTS
credit has expired In the sale of the whole of certain rights, rents, or
Example: Debtor owed OG Creditor 10k products for a lump sum, the subject matter is
payable on November 1, 2017. OG the totality of such rights, rents, or products.
Creditor assigns his credit to Newbie The vendor warrants only the legitimacy of the
Creditor on December 1, 2017. The whole and not the various parts of which it may
liability of OG Creditor will be for 1 year be composed. [De Leon]
from December 1, 2017.
General rule: Vendor is not liable for eviction of
(b) For 1 year after its maturity, when such any of the various parts of the whole
period for payment has not yet expired
Exceptions: Eviction involves the whole or the part
Example: (Same premise as above) If OG of greater value [ART. 1631]
Creditor assigns his credit to Newbie
Creditor on October 1, 2017, the liability of
OG Creditor will be 1 year from the L. LIABILITY OF VENDOR OF INHERITANCE
maturity date or November 1, 2018. FOR FRUITS RECEIVED
Reasons for this rule: General rule: Vendor shall pay the vendee if he
(i) To prevent fraud profited by the fruits or received anything from
(ii) To oblige assignee to exert efforts in the inheritance sold
the recovery of the credit [De Leon,
citing Manresa] Exception: If the contrary has been stipulated

J. SALE OF SUCCESSIONAL OR M. LIABILITY OF VENDEE FOR DEBTS AND


HEREDITARY RIGHTS CHARGES ON ESTATE
There is no law which prohibits an heir from General rule: Vendee shall reimburse the vendor
selling his interests in an inheritance before for all that the latter may have paid for the debts
partition except that any such sale must be of and charges on the estate and satisfy the
deemed subject to the result of the credits he may have against the same
administration proceedings and any pending Exception: If there is an agreement to the contrary
litigation. [Beltran v Soriano, 97 Phil. 50, 1955] (ART. 1633)
However, the law prohibits the sale of future
inheritance. [De Leon]

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N. LEGAL REDEMPTION IN SALE OF (2) To deliver the thing, with its accessions and
CREDIT OR OTHER INCORPOREAL RIGHT accessories, if any
IN LITIGATION (3) To warrant against eviction and against
hidden defects
N.1 REQUISITES FOR THE EXERCISE BY THE (4) To take care of the thing, pending delivery,
DEBTOR OF THE RIGHT OF LEGAL with proper diligence
REDEMPTION: (5) To pay for the expenses of the deed of sale
(1) There must be a sale or assignment of credit
or other incorporeal right.
(2) The credit or other incorporeal right must be
in litigation
(3) There must be a pending litigation at the
time of the assignment.
Note: The claim must be one which is actually
litigated (disputed or contested) – this
happens only after an answer is filed by the
creditor [Robinsons v Garry, 8 Phil. 275, 1907]
(4) The assignee must have demanded payment
from the debtor
(5) The debtor must reimburse the assignee:
(a) The price paid by him
(b) The judicial costs
(c) The interest on the price from the date of
payment
(6) The reimbursement must be made by the
debtor within 30 days from the date the
assignee demands, whether judicially or
extrajudicially, payment from him. [De Leon]

N.2 PURPOSE OF GRANT OF RIGHT TO


DEBTOR
It gives an advantage to the debtor because he
will pay less than the value of the credit assigned
if he exercises his right to redeem the same. [De
Leon]

N.3 EXCEPTIONS TO THE DEBTOR’S RIGHT OF


LEGAL REDEMPTION
Assignments or sales made
(1) To a co-heir or co-owner of the right assigned
(2) To a creditor in payment of his credit
(3) To the possessor of a tenement or piece of
land which is subject to the right in litigation
assigned. (ART. 1635)

O. TRANSFER OF OWNERSHIP
OBLIGATIONS OF THE VENDOR
(1) To transfer ownership of the thing

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(2) Person to whom the possession or custody of


IX. Documents of Title the document has been entrusted by the
A. DEFINITION owner
(a) If bailee undertakes to deliver the goods
[Art. 1636] to such person
A document used in the ordinary course of (b) If document is in such form that it may be
business in the sale or transfer of goods, as proof negotiated by delivery
of the possession or control of the goods, or
authorizing or purporting to authorize the WHAT IS ACQUIRED? [Art.1513]
possessor of the document to transfer or receive, A person to whom a document has been
either by endorsement or by delivery, goods negotiated acquires:
represented by such document. [Art. 1636] (1) Title of person negotiating the document,
Examples: bill of lading, quedan, warehouse over goods covered by document
receipts, trust receipts, dock warrant (2) Title of depositor/owner over such goods
(3) Direct obligation of bailee/carrier to hold
possession of goods for him
B. PURPOSE OF DOCUMENTS OF TITLE
(1) As evidence of possession or control of goods
described therein D. NON-NEGOTIABLE DOCUMENTS OF
(2) As a medium of transferring title and TITLE
possession over the goods described therein Goods described in a non-negotiable document
without having to effect actual delivery of title are transferable only to a specified person.
thereof [Villanueva]
(3) The custody of a negotiable warehouse A person to whom a document has been
receipts issued to the order of the owner, or to transferred acquires:
bearer, is a representation of title upon which (1) Title to goods as against the transferor
bona fide purchasers for value are entitled to (2) Right to notify the bailee of the transfer
rely, despite breaches of trust or violations of thereof
agreement on the part of the apparent owner. (3) Obligation of bailee to hold the goods [Art.
[Siy Cong Bieng vs. HSBC,1932] 1514]

C. NEGOTIABLE DOCUMENTS OF TITLE E. WARRANTIES OF SELLER OF


DOCUMENTS OF TITLE
A document of title which states that the goods
referred to therein will be delivered to the bearer, [ART. 1516]
or to the order of any person named in such A person who negotiates or transfers a document
document [Art. 1508] of title warrants:
(1) The genuineness of document
Terms of the Document How negotiated
(2) The legal right to negotiate or transfer
Goods are deliverable to By delivery of the (3) That there is no knowledge of any fact which
bearer document to another would impair the validity or worth of the
Endorsed in blank or to document
bearer by the person to (4) The right to transfer the title to the goods and
whose order the goods merchantability or fitness for a particular
were supposed to be purpose, whenever such warranties would
delivered have been implied
Goods are deliverable to By indorsement of
the order of a specified such person [Art. He does not warrant that:
person 1509, CC] (1) Common carrier will fulfill its obligation to
deliver the goods
Who may negotiate ? [Art.1512] (2) Previous endorsers will fulfill their obligation
[Art. 1516-1517]
(1) Owner

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Goods in the hands of the carrier covered by a


negotiable document cannot be attached or X. Remedies of an Unpaid
levied upon, unless:
(1) Document is first surrendered to the carrier;
Seller
or A. DEFINITION OF UNPAID SELLER
(2) Impounded by the court; or
(3) Its negotiation is enjoined. [Art. 1519-1520] [ART. 1525]
A seller is considered to be an unpaid seller if the
F. RULES ON LEVY/GARNISHMENT OF whole price has not been paid or tendered, or
when check received as a conditional payment
GOODS
was dishonored by non-payment or insolvency of
Goods in the hands of the carrier covered by a the buyer [Baviera]
negotiable document cannot be attached or
A seller is unpaid within such definition whether
levied upon, unless:
or not title has been passed. Partial payment of
(1) Document is first surrendered to the bailee; or
the price does not extinguish the unpaid seller’s
(2) Its negotiation is enjoined. [Art. 1519]
lien. [De Leon]
A creditor whose debtor is the owner of a
Term also includes:
negotiable document of title shall be entitled to
(1) The agent of the seller to whom the bill of
such aid from courts in regard to property which
lading was endorsed,
cannot be readily attached or levied by ordinary
(2) The consignor or agent who had paid the
legal process [Art 1520]
price or is responsible for the price
(3) Any other person who is in the position of a
seller (i.e. buyer who paid the price and had a
right to return the goods). [Baviera]

B. JUDICIAL REMEDIES OF UNPAID


SELLER
(1) Action for the price [Art. 1595]
(a) When the ownership of the goods has
passed to the buyer and he wrongfully
neglects or refuses to pay for the price
(b) When the price is payable on a certain
day and the buyer wrongfully neglects to
pay such price, whether or not ownership
has passed
(c) When the goods cannot readily be resold
for a reasonable price, and the buyer
wrongfully refuses to accept the goods,
whether or not ownership has passed.
In an action by the seller under (b), buyer can
set up the defense that seller, at any time
before judgment in such action, could not or
did not intend to deliver the goods.
Unless the contrary appears, payment and
delivery are presumed to be concurrent acts,
and the obligation of each party to perform
the contract is dependent upon the
simultaneous performance by the other party
[De Leon citing Williston]

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If ownership has not yet passed to the buyer, The unpaid seller’s right to rescind for non-
the seller cannot maintain an action for the performance is not absolute. Not allowed to
price, unless it involves (b) or (c). rescind when:
(a) There are 3rd persons possessing the
Title to goods passes from the moment the
objects of the contract to whom no bad
goods are placed at the buyer’s disposal
faith is imputable [De Leon, Ocejo Perez
when refusal to accept is without just cause.
& Co. vs. International Bank (1918)]
[De Leon citing Art. 1588]
(b) Breach is on slight or casual [De Leon,
(2) Action for damages [Art. 1596] Song Fo & Co. vs. Hawaiian-Phil. Co.
(1925)]
When ownership has not yet passed and the
buyer, without lawful cause, neglects or The seller cannot unilaterally and
refuses to ACCEPT and PAY for the goods extrajudicially rescind a contract absent
express stipulation to do so, except as
General Rule: Measure of damages is the
provided in Art. 1597. [De Leon]
ESTIMATED LOSS directly and naturally
resulting in the ordinary course of events (4) Special rule for sale of movables by
from the buyer’s breach. installments – Recto Law [Arts. 1484, 1485]
Exceptions: Applies in cases of:
(a) Sale of movables in installment
(a) Where there is available market for goods:
Difference between the contract price and The rule is intended to apply to sales of movables,
the market price. The market price is fixed the price of which is payable in two or more
at the time the goods ought to have been installments, but not to straight-term sales where
accepted, or if no time was fixed, at the the price is payable in full, after making a down
time of refusal to accept. Note: When payment because the law aims to protect
there are special circumstances showing improvident buyers who may be tempted to buy
proximate damages of a greater amount beyond their means. [Levy Hermanos vs. Gervacio,
than the difference between the contract 1939]
price and market price, seller is entitled (b) Lease of personal property with option to
to such higher amount of damages when buy
such damages may be reasonably
attributed to the non-performance of the
obligation. [De Leon, Art. 1596 par. 3 read C. ALTERNATIVE REMEDIES OF THE
with Art. 2201 par. 2] UNPAID SELLER UNDER RECTO LAW
(b) Where labor or expense of material
amount is necessary on the part of the Note: Remedies are ALTERNATIVE, not
seller to perform the contract: Cost of cumulative. [Nonato vs. IAC, 1985]
labor performed or expenses made before (1) Specific Performance
receiving notice of buyer’s repudiation, (2) Cancellation of sale: If vendee fails to pay 2 or
and unrealized profit. more installments. Cancellation of sale bars
(3) Rescission by giving the buyer notice of the seller from recovering unpaid price [Nonato
election to rescind [Art. 1597] vs. IAC (1985)].
(3) Foreclosure of Chattel Mortgage: If vendee
When the goods have not yet been delivered fails to pay 2 or more installments
to the buyer, and the buyer repudiated the (a) If seller chooses this remedy, he shall
contract of sale, or manifested his inability to have no further action to recover any
perform his obligations, or has committed a unpaid balance, and any stipulation to
breach of the contract of sale. the contrary shall be void
Under this rule, rescission would bar an (b) What Art 1484 (3) prohibits is “further
action on the contract because it means action against the purchaser to recover
cancellation of the contractual obligations any unpaid balance of the price;” and
between the parties. [Baviera] although this Court has construed the
word “action” to mean “any judicial or
extrajudicial proceeding by virtue of

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which the vendor may lawfully be


enabled to exact recovery of the XI. Performance of
supposed unsatisfied balance of the
purchase price from the purchaser or his
Contract
privy,” there is no occasion at this stage A. DELIVERY OF THING SOLD
to apply the restrictive provision of the
said article because there has not yet (1) Sale of movables [Arts. 1522, 1537, 1480]
been a foreclosure sale resulting in a (a) When Quantity less than expected
deficiency. The payment of the sum of (i) Buyer may reject all
P1,250 of Sapinoso was a voluntary act (ii) Buyer may accept.
on his part and did not result from a 1. If buyer accepts with knowledge
“further action” instituted by Northern of seller’s inability to deliver the
Motors. [Motors vs. Sapinoso, 1970] rest – buyer pays contract price
(c) The purpose of the law is to remedy the 2. If Buyer has used or disposed
abuses committed in foreclosure of prior to knowing seller’s inability
chattel mortgages. It prevents to deliver the rest, or buyer does
mortgagees from seizing the mortgaged not know of seller’s inability to
property, buying it at foreclosure sale for deliver the rest – buyer pays fair
a low price and then bringing the suit value
against the mortgagor for a deficiency (b) Quantity more than expected
judgment. The almost invariable result of (i) If divisible, buyer may accept only the
this procedure was that the mortgagor contracted quantity, and reject the
found himself minus the property and still rest – buyer pays contract price
owing practically the full amount of his (ii) Buyer may accept all – buyer pays for
original indebtedness. [Bachrach Motor all at contract rate
Co., Inc. v. Millan, 1935] (iii) If indivisible, buyer may reject all
(c) Quality different or different goods
Where the mortgagor unjustifiably refused to (i) If divisible, buyer may accept the
surrender the chattel subject of the mortgage goods compliant with contract and
upon failure of two or more installments, or if reject those that are not
he concealed the chattel to place it beyond (ii) If indivisible, buyer may reject all [Art.
the reach of the mortgagee, that thereby 1522]
constrained the latter to seek court relief, the (d) Sale of specific mass of goods
expenses incurred for the prosecution of the In the sale of fungibles where the measure or
case, such as attorney's fees, could rightly be weight has not been agreed upon nor is there a
awarded. [Borbon II v. Servicewide, 1996] fixed rate based upon a measurement, the
subject matter of the sale is a determinate object
– the specific mass; seller is merely required to
deliver such mass even if actual quantity falls
short of parties’ estimate [Art. 1480]
(e) Delivery by installments
(i) By default, buyer is not bound to
accept delivery of goods by
installments
(ii) In a contract of delivery by
installment to be paid by installment
as well, delay or breach may not
necessarily mean breach of the entire
contract; depending on the
circumstances, breach may be
severable and the aggrieved party is
entitled to damages and not rescission.
[Art. 1583]
(2) Sale of immovables [Arts. 1539, 1543]
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(a) Sale at a fixed rate per unit of measure (a) Inspections


(i) Seller bound to deliver entire land,
Right of Inspection– The buyer has
i.e., the entire area stated in the
reasonable opportunity to examine the goods
contract.
upon delivery. If there is a stipulation that
(ii) If the area is less than that stated,
delivery is preconditioned on payment, then
buyer may rescind* or demand a
buyer has no right of inspection until he has
proportionate reduction in price.
paid. [Art.1584]
Buyer may only avail of rescission if
the area deficiency is 10% or more of Exception: in case such right of inspection is
total area [Art. 1539] permitted by agreement or usage of trade.
(iii) If a part of the land is not of the (b) Acceptance
quality stated in the contract, buyer (a) Form
may rescind or demand a Express: buyer intimates acceptance
proportionate reduction in price.
Implied:
Buyer may only avail of rescission if
the inferior value of the part of the (i) Goods are delivered to the buyer
land exceeds 10% of the price agreed and he does any act in relation to
upon. [Art. 1539] the goods delivered that is
inconsistent with the ownership of
(iv) If the area turns out to be greater
the seller.
than that stated, buyer may accept
(ii) After the lapse of a reasonable
area included and reject the excess or
time, the buyer retains the goods
accept all and pay a proportionate
without intimating to the seller
increase in price based on contract
that he has rejected them. [Art.
rate [Art. 1540]
1585]
(b) Sale for a lump sum
(ii) Effect of Refusal to Accept
(i) Follows the same rule as the sale of a
If buyer refuses to accept goods,
specific mass which is explained
having the right to do so, he is not
above
bound to return them to the seller, it
(ii) There is no change in price even if being sufficient that he notifies the
area or number turns out to be
seller of his refusal to accept
greater or lesser than that stated [Art.
1542] 1. If he voluntarily constitutes himself
(iii) Exception: when the excess or a depositary of the goods, he shall
deficiency is no longer reasonable be liable as such. [Art.1587]
[Asian v Jalandoni, 1923] 2. Unjust refusal to accept still
(iv) Exception to the exception: when results to transfer of ownership. In
buyer expressly assumes risk on such case, title to the goods
actual area of the land. [Garcia v passes to the buyer from the
Veloso, 1941] moment they are placed at his
(v) If the price per unit or measure is not disposal, except if ownership has
provided for in the contract, then the been reserved by the seller
rules of lump sum sale should prevail. [Art.1588]
[Sta. Ana v Hernandez, 1966]
If sale for lump sum, the cause of the B. PAYMENT OF PRICE
contract is the thing sold, independent of
(1) Payment of interest [Art. 1589]:
number/measure. The law presumes that
the purchaser had in mind a determinate Buyer is liable for interest when:
price for real estate and the ascertained
(a) Interest is stipulated;
area and quality. The purchaser intended
(b) Thing sold produces fruits or income;
to buy thing in entirety, not just any unit
(c) Buyer is in default - interest accrues from
of measure or number. [De Leon]
the time of judicial or extrajudicial
(3) Inspections and Acceptance demand for payment

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(2) Suspension of payments [Art. 1590]:


XII. The Law on Sale
General rule: Buyer may suspend payment
when: of Subdivision and
(a) His ownership or possession of the thing
is disturbed; OR
Condominium (PD 957)
(b) He has reasonable grounds to fear such A. DEFINITIONS
disturbance by a vindicatory action or a
Owner shall refer to the registered owner of the
foreclosure of mortgage
land subject of a subdivision or a condominium
Exceptions: Buyer cannot suspend payment project.
when:
Developer shall mean the person who develops or
(a) Seller gives security for the return of the
improves the subdivision project or condominium
price in a proper case
project for and in behalf of the owner thereof.
(b) It has been stipulated that,
notwithstanding any such contingency, Dealer shall mean any person directly engaged as
the buyer shall be bound to pay principal in the business of buying, selling or
(i) Suspension may continue until the exchanging real estate whether on a full-time or
seller has caused the disturbance or part-time basis.
danger to cease
Broker shall mean any person who, for
(ii) However, a mere act of trespass shall
commission or other compensation, undertakes
not authorize the suspension of the
to sell or negotiate the sale of a real estate
payment. [Art.1590]
belonging to another.
(3) Sale of real property
Salesman shall refer to the person regularly
(a) In the sale of immovable property, buyer employed by a broker to perform, for and in his
may pay even beyond the expiration of behalf, any or all functions of a real estate broker.
the period agreed upon, as long as no
demand for rescission of the contract has
been made upon him either judicially or
B.REQUIREMENTS FOR OWNERS AND
by a notarial act, despite a stipulation
providing for ipso jure rescission DEVELOPERS
[Art.1592] (1) Registration of projects
(b) Mere failure to fulfill the contract does (subdivision/condominium) with the NHA
not ipso facto entitle the offended party to (2) Registration of the owner
rescind. A judicial or notarial act is (3) License to sell of owner or dealer with
necessary before rescission can take performance bond [PD, exceptions in Sec. 7]
place, whether or not automatic
rescission has been stipulated. A letter
informing the buyer of automatic B.1. REGISTRATION OF PROJECTS [SECTION 4,
rescission is not demand if such letter is PD 957]
not notarized. [De Leon]
The registered owner of a parcel of land who
(c) After demand, court may not grant him a
wishes to convert the same into a subdivision
new term [Heirs of Escanlar, et.al. v. CA,
project shall submit his subdivision plan to the
1997]
National Housing Authority. The same procedure
(d) R.A. 6552 (Maceda Law) applies to sale or
shall be followed in the case of a plan for a
financing of real estate on installment
condominium project except that NHA also
[Rillo v. Court of Appeals,1997]
approves the building thereon in accordance with
the National Building Code.

B.2. REGISTRATION OF OWNER [SECTION 4,


PD 957]

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The owner or the real estate dealer interested in A license to sell and performance bond shall not
the sale of lots or units, respectively, in such be required in any of the following transactions:
subdivision project or condominium project shall (1) Sale of a subdivision lot resulting from the
register the project with the Authority by filing partition of land among co-owners and co-
therewith a sworn registration statement. heirs.
(2) Sale or transfer of a subdivision lot by the
Publication and issuance of registration certificate
original purchaser thereof and any
[Section 4, PD 957]
subsequent sale of the same lot.
A notice of the filing of the registration statement (3) Sale of a subdivision lot or a condominium
at the expense of the applicant-owner or dealer, unit by or for the account of a mortgagee in
in two newspapers general circulation, one the ordinary course of business when
published in English and another in Filipino, once necessary to liquidate a bona fide debt.
a week for two consecutive weeks. Notice shall
(iii) Grounds for suspension of license to sell
state that subdivision lots or condominium units
[Section 8, PD 957]
are open to inspection during business hours by
interested parties. The project shall be deemed (1) misleading, incorrect, inadequate, or
registered upon completion of the publication incomplete information in registration
requirement. The fact of registration shall be statement
evidenced by a registration certificate issued to (2) fraud upon prospective buyers on the sale or
the applicant-owner or dealer. offering for a sale
Note: suspension is confidential unless order of
suspension has been violated.
B.3. LICENSE TO SELL [SECTION 5, PD 957]
(iv) Grounds for revocation of registration
The registration certificate does NOT authorize
certificate and license to sell [Section 9, PD 957]
the owner or dealer to sell any unit. They must
first obtain a license to sell within two weeks from (1) Insolvency of owner/dealer
the registration of the project. The license to sell (2) Violation of owner of PD 957 or its IRR or any
is issued upon examination of the registration undertaking of his/its performance bond
statement filed by the owner or dealer showing (3) Has been or is engaged or is about to engage
that: in fraudulent transactions
(1) the owner or dealer is of good repute (4) Misrepresentation in any prospectus,
(2) that his business is financially stable brochure, circular or other literature about
(3) that the proposed sale of subdivision lots or the subdivision project or condominium
condominium units to the public would not project that has been distributed to
be fraudulent prospective buyers
(5) Bad business repute of owner/dealer
(i) Performance bond [Section 6, PD 957]
(6) Does not conduct his business in accordance
A license to sell can only be issued by the NHA if with law or sound business principles
the owner or dealer files a performance bond
guaranteeing the construction and maintenance
of the roads, gutters, drainage, sewerage, water C. REQUIREMENT FOR DEALERS,
system, lighting systems, and full development of BROKERS, AND SALESMEN (DBS)
the subdivision project or the condominium
project and the compliance by the owner or C.1. REGISTRATION
dealer with the applicable laws and rules and (1) Dealers, brokers, and salesmen (DBS) must be
regulations. The bond shall be executed in favor registered (Section 11, PD 957)
of the Republic of the Philippines and shall
authorize the Authority to use the proceeds Requisites of registration:
thereof for the purposes of its undertaking in case (a) Good reputation and compliance with
of forfeiture as provided in this Decree. NHA rules
(b) Payment of prescribed fee
(ii) When license to sell and performance bond not (c) Filing of bond or other security (amount
required [Section 7, PD 957] fixed by NHA) conditioned upon his

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faithful compliance with provisions of PD D.3. ADVERTISEMENTS BY THE OWNER OR


957 DEVELOPER [SECTION 19, PD 957]
When registration of DBS terminates (1) Must reflect real facts, must not mislead or
(a) Termination of employment with dealer deceive public
or broker (2) Owner or developer shall be liable for any
(b) Expiration (31st day of Dec each year) misrepresentation as to facilities, etc.
(3) Advertisements shall form part of the sales
(2) Revocation of registration as DBS [Section 12,
warranties enforceable against the owner or
PD 957]
developer
Grounds (4) Failure to comply with sales warranties is
(a) Has violated any provision of this Decree punishable under PD 957
or any rule or regulation made hereunder;
or
D.4. NON-FORFEITURE OF PAYMENTS
(b) Has made a material false statement in
(SECTION 23, PD 957)
his application for registration; or
(c) Has been guilty of a fraudulent act in No installment payment made by a buyer in a
connection with any sale of a subdivision subdivision or condominium project for the lot or
lot or condominium unit; or unit he contracted to buy shall be forfeited in
(d) Has demonstrated his unworthiness to favor of the owner or developer when the buyer,
transact the business of dealer, broker, or after due notice to the owner or developer,
salesman, as the case may be. desists from further payment due to the failure of
the owner or developer to develop the subdivision
The NHA may suspend the DBS' registration
or condominium project according to the
pending hearing of the case. The suspension
approved plans and within the time limit for
or revocation of the registration of a dealer or
complying with the same. Such buyer may, at his
broker shall carry with it all the suspension or
option, be reimbursed the total amount paid
revocation of the registration of all his
including amortization interests but excluding
salesmen.
delinquency interests, with interest thereon at the
legal rate.
D. CHARACTERISTICS OF SALE OF A D.5. FAILURE TO PAY INSTALLMENTS
CONDOMINIUM OR SUBDIVISION UNIT [SECTION 24, PD 957]
AND SIMILAR CONTRACTS
The rights of the buyer in the event of this failure
D.1. REGISTRATION OF SALE, ETC [SECTION 17, to pay the installments due for reasons other
PD 957] than the failure of the owner or developer to
All contracts to sell, deeds of sale and other develop the project shall be governed by Republic
similar instruments relative to the sale or Act No. 6552 [Maceda Law].
conveyance of the subdivision lots and
condominium units, whether or not the purchase
price is paid in full, shall be registered by the D.6. ISSUANCE OF TITLE [SECTION 25, PD 957]
seller in the Office of the Register of Deeds of the The owner or developer shall deliver the title of
province or city where the property is situated. the lot or unit to the buyer upon full payment of
the lot or unit. No fee, except those required for
D.2. MORTGAGES ON UNIT OR LOT BY OWNER the registration of the deed of sale in the Registry
OR DEVELOPER [SECTION 18, PD 957] of Deeds, shall be collected for the issuance of
such title. In the event a mortgage over the lot or
(1) Need prior written approval of the NHA unit is outstanding at the time of the issuance of
(2) Must show that proceeds of mortgage will be the title to the buyer, the owner or developer
used for development of the condominium or shall redeem the mortgage or the corresponding
subdivision portion thereof within six months from such
(3) Value of each lot or unit determined by the issuance in order that the title over any fully paid
buyer (if there is one) and the buyer shall be lot or unit may be secured and delivered to the
notified before release of loan buyer in accordance herewith.
(4) Buyer may pay directly to mortgagee
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D.7. REALTY TAX [SECTION 26, PD 957]


XIII. The Condominium
Real estate tax and assessment on a lot or unit
shall de paid by the owner or developer without Act (RA 4726)
recourse to the buyer for as long as the title has
not passed the buyer; Provided, however, that if A. DEFINITION OF A CONDOMINIUM
the buyer has actually taken possession of and [SECTION 2]
occupied the lot or unit, he shall be liable to the A condominium is an interest in real property
owner or developer for such tax and assessment consisting of separate interest in a unit in a
effective the year following such taking of residential, industrial or commercial building and
possession and occupancy. an undivided interest in common, directly or
D.8. NO OTHER CHARGES [SECTION 27, PD indirectly, in the land on which it is located and in
957] other common areas of the building. A
condominium may include, in addition, a
No owner or developer shall levy upon any lot or separate interest in other portions of such real
buyer a fee for an alleged community benefit. property. Title to the common areas, including
Fees to finance services for common comfort, the land, or the appurtenant interests in such
security and sanitation may be collected only by a areas, may be held by a corporation specially
properly organized homeowners association and formed for the purpose (hereinafter known as the
only with the consent of a majority of the lot or "condominium corporation") in which the holders
unit buyers actually residing in the subdivision or of separate interest shall automatically be
condominium project. members or shareholders, to the exclusion of
others, in proportion to the appurtenant interest
of their respective units in the common areas.

A.1. OTHER DEFINITIONS [SECTION 3]


(1) Unit means a part of the condominium
project intended for any type of independent
use or ownership, including one or more
rooms or spaces located in one or more floors
(or part or parts of floors) in a building or
buildings and such accessories as may be
appended thereto.
(2) Project means the entire parcel of real
property divided or to be divided in
condominiums, including all structures
thereon,
(3) Common areas means the entire project
excepting all units separately granted or held
or reserved.

B. TRANSFERS OR CONVEYANCES OF A
UNIT OR AN APARTMENT, OFFICE OR
STORE, OR OTHER SPACE THEREIN
[SECTION 5, RA 4726]
(1) Transfer or conveyance of a unit or a space
therein includes the transfer or conveyance of
(a) undivided interests in common areas
(b) membership or shareholding in the
condominium corporation
(2) Proviso: only Filipino citizens or corporations
at least 60% of the capital stock are owned

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by Filipino citizens may be the transferee of in the common areas are opposed to repair or
common areas in cases where the common restoration of the project
areas are owned by the owners of separate (3) That the project has been in existence in
units as co-owners (not by condominium excess of 50 years, that it is obsolete and
corporation) uneconomic, and that condominium owners
(3) Exception to proviso: hereditary succession. holding in aggregate more than 50% interest
in the common areas are opposed to repair or
Shareholdings in a condominium corporation
restoration or remodeling or modernizing of
may be conveyed only in a proper case. Not every
the project
purchaser of a condominium unit is a shareholder
(4) That the project or a material part thereof has
of a condominium corporation. The
been condemned or expropriated and that
Condominium Act leaves to the Master Deed the
the project is no longer viable, or that the
determination of when the shareholding will be
condominium owners holding in aggregate
transferred the buyer of the unit. But ownership
more than 70% interest in the common areas
of a unit is an indispensable requisite to being a
are opposed to continuation of the
shareholder in the corporation. [Sunset View
condominium regime after expropriation or
Condominium Corporation v. Campos (1981)]
condemnation of a material portion thereof
(5) That the conditions for such partition by sale
C. RIGHTS OF A CONDOMINIUM UNIT set forth in the declaration of restrictions,
OWNER (ASIDE FROM RIGHTS ARISING duly registered in accordance with the terms
FROM OWNERSHIP) [SECTION 6] of the Condominium Act, have been met.
(1) Absolute right to sell or dispose of his
condominium unless there is a right of first E. DECLARATION OF RESTRICTIONS BY
refusal in favor of condominium owners OWNER OF PROJECT - PRECONDITION TO
(2) Exclusive right to mortgage, pledge or CONVEYANCE [SECTION 9]
encumber his condominium and to have the
(1) The owner must register with the Register of
same appraised independently of the other
Deeds a declaration of restrictions before the
condominiums but any obligation incurred by
conveyance of any condominium in the
such condominium owner is personal to him
project
(2) The restrictions constitute a lien upon each
D. PARTITION BY SALE [SECTION 8] condominium in the project and shall insure
to and bind all condominium owners in the
This is an action that may be brought by one or
project
more persons owning condominiums in a
(3) The lien may be enforced by any
condominium project for the partition of the condominium owner or by the management
project by the sale thereof. The effect is as if the
body of the project
owners of all the condominiums in such project
were co-owners of the entire project in the same
proportion as their interests as their interests in F. ASSESSMENT IN ACCORDANCE WITH
the common areas. DECLARATION OF RESTRICTIONS
A partition by sale can only be done upon [SECTION 20]
showing any of the following: This is the "tax imposition power" of the
(1) That three years after damage or destruction condominium corporation. If unpaid, the
to the project which renders material part management body may cause a notice of
thereof unfit for its use prior thereto, the assessment to be registered with the Register of
project has not been rebuilt or repaired Deeds, which may be released only upon
substantially to its state prior to its damage payment of the assessed fees. This lien is superior
or destruction to all other subsequent liens except real property
(2) That damage or destruction to the project has taxes liens and other liens provided for in the
rendered one-half or more of the units therein declaration of restrictions.
untenantable and that condominium owners
holding in aggregate more than 30% interest

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G. HOW LIEN ENFORCED AFTER NON- J. SALE, EXCHANGE, LEASE, OR


PAYMENT OF ASSESSED FEES [SECTION DISPOSITION BY CORPORATION OF THE
20] COMMON AREAS [SECTION 16]
Judicial or extra-judicial foreclosure of real Generally not allowed unless authorized by
property mortgages, where the management affirmative vote of all of the
body may bid unless disallowed by the stockholders/members.
declaration of restrictions.
K. STOCKHOLDER/MEMBER DEMANDING
H. INVOLUNTARY DISSOLUTION OF THE PAYMENT FOR SHARES OR INTEREST
CONDOMINIUM CORPORATION [SECTION AKA APPRAISAL RIGHT [SECTION 17]
12]
By-laws of the condominium corporation shall
In case of involuntary dissolution, the common provide that any shareholder/member
areas held by the corporation shall be transferred demanding payment for his share or interest
pro-indiviso and in proportion to their interest to must also consent to sell his separate interest in
the members/stockholders of the corporation, the project to the corporation or any buyer of the
subject to the rights of creditors of the corporation's choice.
corporation. The common areas remain in
undivided co-ownership.
L. REQUIREMENT FOR REGISTRATION OF
CONVEYANCE WITH THE REGISTER OF
I. POWER OF ATTORNEY HELD BY DEEDS [SECTION 18]
CORPORATION IN CASE OF VOLUNTARY
Certificate of the management body of the
DISSOLUTION OF CONDOMINIUM
project that the conveyance is in accordance with
CORPORATION [SECTION 15] the declaration of restrictions
The condominium corporation is deemed to hold
a power of attorney from all
M. REALTY TAX ON CONDOMINIUMS
members/stockholders to sell and dispose of their
separate interests in the project. To liquidate, the [SECTION 25]
condominium corporation will sell the entire Each condominium separately owned shall be
project as if it owned the whole project itself, separately assessed, for purposes of real property
subject to the corporate and individual taxation and other tax purposes to the owners
condominium creditors. thereof and the tax on each such condominium
shall constitute a lien solely thereon.

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CIVIL LAW
SUCCESSION

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I. General Provisions (a) Intransmissible by nature: this refers


to rights and obligations which are
strictly personal (intuitu personae)
A. DEFINITION
Examples:
Succession – a mode of acquisition by virtue • Those relating to family relations
of which the property, rights and obligations, • Those arising from public law
to the extent of the value of the inheritance, • Those which involve or require the
of a person are transmitted through his death personal skills, qualifications,
to another or others either by his will or by characteristics or circumstances
operation of law. [Art. 774, CC] of a particular individual
Kinds of Succession • Criminal responsibility
(1) Testamentary – that which results from
the designation of an heir, made in a will
executed in the form prescribed by law. (b) Intransmissible by stipulation
[Art. 779, CC] (c) Intransmissible by provision of law
(2) Legal or Intestate – that which takes
place by operation of law in the absence
of a valid will. Examples:
(3) Mixed – that which is effected partly by
• Usufruct [Art. 603]
will and partly by operation of law. [Art.
780, CC] • Agency [Art. 1919]
(4) Compulsory – succession to the legitime • Commodatum [Art. 1939]
and prevails over all other kinds of
succession [Balane]
(2) Monetary debts left by the decedent are
intransmissible in the sense that they are
B. OBJECT OF SUCCESSION AND paid from the estate of the decedent and
TRANSMISSION only the net estate or remainder goes to
the heirs. If the decedent’s estate is not
sufficient to pay his debts, his heirs
Scope of Inheritance cannot be held liable for said debts in
General rule: their personal capacity. [Rules of Court,
Rule 88-90]
(1) All the property, rights and obligations of
a person which are not extinguished by
his death [Art. 776, CC]
Rule on Transmission
(2) Not only the property and the
General rule: All property rights which have
transmissible rights and obligations
accrued to the hereditary estate since the
existing at the time of his death, but also
opening of succession are transmitted to the
those which have accrued thereto since
heirs.
the opening of the succession [Art. 781,
CC]
Exception: Property acquired after the making
of a will shall not pass to the heirs unless it
Exceptions:
should expressly appear in the will that such
(1) Rights and obligations extinguished by was the intention of the testator. [Art. 793,
death and are not transmissible [Art. 1311, CC]
CC]:

Rules on Opening of Succession


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(1) The rights to succession are transmitted C. SUBJECTS OF SUCCESSION


from the moment of the death of the
decedent. [Art. 777, CC] (1) Decedent – person whose property is
transmitted through succession, whether or
not he left a will. [Art. 775, CC]
Implications of this principle: Testator – a decedent who left a will [Art.
775, CC]
(a) The law in effect at the time of death
of the decedent governs the
succession [Art. 2236, CC] (2) Successor – person who succeeds to the
(b) The heir becomes the owner of his property of the decedent. He may be either—
share as well as all fruits which (a) Heirs – those who are called to the whole
accrue after the death of the or an aliquot portion of the inheritance either
decedent. by will or by operation of law [Art. 782, CC]
(c) Upon death of the decedent, heirs
may immediately possess, administer Kinds of Heirs:
and dispose of their shares in the (1) Compulsory Heirs – those who
estate (in the absence of existing succeed by force of law to some
debts/claims against the estate); portion of the inheritance, in an
(d) Since succession takes place by amount predetermined by law known
operation of law at the moment of the as the legitime, of which they cannot
death of the decedent, the heirs can be deprived by the testator, except by
sue upon the rights of the decedent, a valid disinheritance. They succeed
without having to be appointed regardless of a will.
executor or administrator [Emnace v.
CA, G.R. No. 126334 (2001)], and (2) Voluntary or Testamentary Heirs –
without need of a judicial declaration those who are instituted by the
of their status as heirs [De Vera v. testator in his will, to succeed to the
Galauran, 67 Phil 213 (1939)]. Heirs portion of the inheritance of which
may also be sued without a previous the testator can freely dispose. They
declaration of heirship, provided succeed by reason of a will.
there is no pending special (3) Legal or Intestate Heirs – those who
proceeding for the settlement of succeed to the estate of the decedent
estate of the decedent [Gayon v. who dies without a valid will, or to the
Gayon, G.R. No. L-28394 (1970)]. portion of such estate not disposed of
(e) The possession of hereditary property by will, or when certain grounds are
is deemed transmitted to the heir met.
without interruption and from the
(a) Devisees and Legatees – those who
moment of death of the decedent, in
succeed by particular title, i.e., to individual
case the inheritance is accepted [Art.
or specified items of personal or real property.
533, CC]
(i) Devisees are persons to whom gifts of real
(f) Estate taxes accrue upon death of the
property are given by virtue of a will. [Art.
decedent, even if the heirs come into
782]
possession only later.
(ii) Legatees are persons to whom gifts of
personal property are given by virtue of a will.
(2) A person may be “presumed” dead for [Art. 782]
the purpose of opening his succession. In
this case, succession is only of provisional Note: The distinction between heir and
character because there is always a legatee/devisee is significant in case of
chance that the absentee may still be preterition, which annuls the institution of
alive. [Arts. 390-391, CC]. heirs, but does not affect the institution of
legatees and devisees to the extent that the
legitimes are not impaired. [Art. 854]

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II. Testamentary Note: testator must


first specify the class
Succession and the amount of
property for proper
delegation
A. WILLS
A.1. IN GENERAL (2) Free and intelligent [Art. 839, CC]
Will – an act whereby a person is permitted, (3) Solemn or formal – if the form is
with the formalities prescribed by law to defective, the will is void
control to a certain degree the disposition of
his estate to take effect after his death. [Art. (4) Revocable and ambulatory – will can be
783, CC] revoked at any time before the testator’s
death [Art. 828, CC]
(5) Mortis causa - takes effect upon the
i. Kinds of wills testator’s death
(1) Notarial – an ordinary or attested will,
which must comply with the (6) Individual – prohibition against joint wills
requirements of the law [Arts. 804-808, [Art. 818, CC]
CC] (7) Executed with animus testandi – intent to
(2) Holographic – a will entirely written, dispose of the property
dated and signed by the hand of the
testator [Art. 810, CC] (8) Executed with testamentary capacity
(9) Unilateral act – does not involve an
ii. Characteristics of Wills exchange of values or depend on
(1) Purely personal – the making of a will is simultaneous offer and acceptance
non-delegable
(10) Dispositive – disposes of property
• making of a will cannot be left in whole
General rule: Wills contain disposition of
or in part of the discretion of a third
the testator’s estate mortis causa.
person, or accomplished through the
instrumentality of an agent or attorney
[Art. 784, CC]
A will disinheriting a compulsory heir is
• testator may not make a testamentary still a dispositive will even in the absence
disposition in such manner that another of dispositive provisions because a
person has to determine whether or not disinheritance has the effect of disposing
it is to be operative [Art. 787, CC] the legitime of the disinherited
compulsory heir in favor of other
compulsory heirs [Seangio v. Reyes,
What cannot be What may be 2006].
delegated to 3rd entrusted to 3rd
persons persons
Exceptions: (non-dispositive wills)
(1) designation of (1) designation of
heirs, devisees person/institution • will recognizing an illegitimate child
and legatees falling under a
(2) duration/efficacy class specified by
of designation testator (11) Statutory grant – permitted only by law,
(3) determination of (2) manner of not a constitutional right
portions, when distribution of
referred to by property specified
name [Art. 785, by testator [Art. As it is a statutory grant, a will must be
CC] 786, CC] made in accordance with the formalities

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prescribed by the law [Art. 783, CC; used to ascertain the intention of the
Balane] testator
• Oral declarations of the testator as to
iii. Rules of Construction and Interpretation his intention must be excluded. [Art
[Arts. 788-795] 789, CC]

Kinds of Ambiguities
Main principle: Testacy is preferred to Patent Ambiguity Latent Ambiguity
intestacy and the intent of the testator is
paramount and must be given effect as far as one which appears one which cannot be
legally possible. upon the face of the seen from the reading
(1) Giving effect to the will instrument of the will but which
appears only upon
(a) If the testamentary disposition admits consideration of
of different interpretations, in case of extrinsic
doubt, that interpretation by which circumstances
the disposition is to be operative shall
be preferred. [Art. 788]
(b) The words of a will are to receive an Note: There is no real difference in the
interpretation which will give to every prescribed solution for either latent or patent
expression some effect, rather than ambiguity. In either case, extrinsic evidence
one which will render any of the or evidence of external circumstances can be
expressions inoperative. [Art. 791] considered. Moreover, in either case, the oral
(c) Of two modes of interpreting a will, declarations of the testator are excluded.
that is to be preferred which will
prevent intestacy. [Art. 791]
iv. Governing Laws, In General
(2) Words to be taken in their ordinary and
Aspect of the
grammatical sense unless there is a clear Governing Law
Will
intention to use them in another sense
[Art. 790, CC] Formal Validity Law in force at the time the
will was executed [Art. 795,
(3) Technical words are to be taken in their CC]
technical sense unless there is a contrary
intention or when testator was Intrinsic Validity Law of decedent’s
unacquainted with such technical sense nationality at the time of his
[Art. 790, CC] death [Arts. 16 and 2263,
CC]
(4) Severability of provisions – Invalidity of
one of several dispositions does not result
in invalidity of others unless the testator Aspects of the Will Governed by the National
would not have made such dispositions if Law of the Decedent:
the first invalid disposition had not been
made [Art. 792, CC] (1) Order of succession;
(2) Amount of successional rights;
(5) Every devise and legacy shall convey all the
interest unless it clearly appears the (3) Intrinsic validity of testamentary
intention was to convey a less interest provisions; and
[Art. 794, CC] (4) Capacity to succeed [Art. 16, CC]
(6) Where there are ambiguities (i.e.
imperfect description or no person or A.2. TESTAMENTARY CAPACITY AND
property exactly answers to the INTENT
description, mistakes, omissions),
intrinsic or extrinsic evidence may be
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Time of Determining Capacity


Capacity to make a will is determined as of
A.3. FORM
the time of making thereof. [Art. 798]
In General [Art. 804, CC]
Supervening incapacity does not invalidate (1) The will must be in writing
an effective will nor is the will of an incapable (2) It must be in a language or dialect known
validated by a supervening of capacity [Art. to the testator
801, CC]
Applicable Laws as to Formal Validity
Requisites for Capacity to Make a Will • Formal validity is governed by the law in
(1) The testator must not be expressly force at the time the will was executed [Art.
prohibited by law to make a will [Art. 796, 795, CC]
CC]

• As to the place, forms and solemnities of a


(2) The testator must not be under 18 years will are governed by the law of the country
of age [Art. 797, CC] in which the will was executed [Art. 17, CC]

“Year” shall be understood to be 12


calendar months [Sec. 31, Book 1, Admin • Arts. 815-817 (summarized in the table
Code] below) provide for the various governing
laws in these instances:
(3) The testator must be of sound mind at the (1) A will was made in a foreign country by
time of execution [Art. 798, CC] a Filipino [Art. 815]
(2) A will was made in a foreign country by
an alien [Art. 816]
(3) A will was made in the Philippines by
TEST OF SOUNDNESS OF MIND: an Alien [Art. 817]
(a) To be of sound mind, it is not
necessary that—
(i) the testator be in full possession Governing Law as to Place of Execution of
of reasoning faculties Will
(ii) the testator’s mind be wholly Place of
unbroken, unimpaired, Testator Execution of Governing Law
unshattered by disease, injury or Will
other cause [Art. 799, CC]
(b) To be of sound mind, the testator Philippines Philippine Law [Art. 16,
must know: CC]
(i) The nature of the estate to be
disposed of; Outside of (1) Law of the country
the in which it is
(ii) The proper objects of his bounty; Filipino Philippines executed [Art.
(iii) The character of the testamentary 17,CC]; or
act [Art. 799, CC] (2) Philippine Law [Art.
815, CC]

Philippines (1) Philippine Law; or


General rule: Soundness of mind is
(2) Law of the country
presumed [Art. 800, CC]
of which testator is
a citizen or subject
[Art. 817, CC]
Exception: When the testator, one month
or less before the execution of the will, Outside of (1) Law of the place
was publicly known to be insane the where the will is
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Philippines executed [Art. 17, but also of its due


CC]; or execution
Alien
(2) Law of the place
where the testator
resides; or The attestation clause shall state the
(3) Law of the following:
testator’s country;
or (1) Number of pages;
(4) Philippine Law [Art. (2) The fact that the testator or his
816, CC] representative under his express
direction signed the will and every
page in the presence of instrumental
witnesses
ATTESTED OR NOTARIAL WILLS
(3) That the witnesses signed the will
Formal Requirements for Notarial Wills
and all its pages in the presence of
(1) Subscribed at the end
the testator and of one another.
(2) Attestation clause
(3) Marginal signatures
The signatures of the witnesses must be
(4) Page numbers at the bottom of the attestation clause
[Cagro v. Cagro (1953)]
(5) Acknowledged by a notary public
(6) Additional requirements for
handicapped testators The notary public cannot be counted as
an attesting witness [Cruz v. Villasor
(7) Subscribed by 3 or more witnesses in
(1973)]
the presence of the testator and of
one another
Test of presence: Not whether they
actually saw each other sign, but whether
(1) Subscription: Subscribed to, at the end of
they might have seen each other sign had
the will [Art. 805, CC]
they chosen to do so considering their
• By the testator himself; or mental and physical condition and
position with relation to each other at the
• By the testator’s name written by a moment of inscription of each signature.
representative in his presence and [Jaboneta v. Gustilo (1906)]
under his express direction.

Effect of Omissions
(2) Attestation Clause: Attested and
subscribed by 3 or more credible (1) Omissions can be supplied by an
witnesses in the presence of the testator examination of the will itself, without
and of one another [Art. 805, CC] the need of resorting to extrinsic
evidence, will not be fatal and will not
prevent allowance of the will.
Attestation Subscription

Mental act (act of the Mechanical act (act of Examples:


senses) the hand) (a) The fact that the
testator/witnesses signed each
Purpose is to render Purpose of
and every page of the will can be
available proof during identification
proved also by the mere
probate of will, not
examination of the signatures
only of the
appearing on the document itself.
authenticity of the will
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Omission of this fact in the purpose of the marginal signature is


attestation clause is not fatal only to authenticate the page. The
(b) The failure to state in the attestation clause has a purpose that
attestation clause the number of is not fulfilled by the marginal
pages of the instrument is signature (attest to the act of signing
ordinarily a fatal flaw. However, by testator and witnesses) [Balane].
such omission will not invalidate
the will if the number of pages
appears elsewhere in the will Note: The doctrine of substantial compliance
itself so that no evidence aliunde applies only as to defects in the form or
is necessary. language of the attestation clause. In case of
omissions of certain facts which need to be
stated, apply the rule on omissions
(2) However, those omissions which
aforestated. [Caneda v. CA, G.R. No. 103554
cannot be supplied except by
(1993)]
evidence aliunde would result in the
invalidation of the attestation clause,
and consequently, of the will itself.
(3) Marginal Signatures
General rule: Testator or his
Example: representative shall write his name, and
the witnesses shall sign each and every
Whether the testator signed in the presence
page except the last page [Art. 805, CC]
of the witnesses, or the witnesses signed in
the presence of the testator and of one
another.
Exceptions:
(1) When the will consists of only one
Substantial Compliance Rule (as to the page
form of the attestation clause) (2) When the will consists of only two
pages, the first of which contains all
dispositions and is signed at the
Substantial compliance rule applies only
bottom by the testator and the
in cases when such defects and
witnesses, and the second page
imperfections can be supplied by an
contains only the attestation clause
examination of the will itself.
duly signed at the bottom by the
witnesses. [Abangan v. Abangan
There must be no bad faith, forgery,
(1919)]
fraud, or undue and improper pressure
(3) The use of thumbprint was allowed
and influence for substantial compliance
[Matias v. Salud (1957)]
to be allowed. [Art. 809, CC]
(4) The inadvertent failure of one witness
to affix his signature to one page of a
Example: testament, due to the simultaneous
lifting of two pages in the course of
The signature in the attestation
signing, is not per se sufficient to
clause is sufficient compliance for
justify denial of probate. [Icasiano v.
marginal signatures on the same
Icasiano (1964)]
page because the signature in the
attestation clause also authenticates
the page which is the purpose of the (4) Page Numberings: Numbered
marginal signatures. correlatively in letters placed on the
upper part of each page (i.e. Page One of
Five Pages). [Art. 805, CC]
The marginal signature, however, is • Mandatory part: pagination by means
not sufficient compliance with the of a conventional system
requirement of signing the
attestation clause because the
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• Directory part: pagination in letters on (1) Person not domiciled in the


the upper part of each page [Balane] Philippines
(2) Those who have been convicted of
(5) Acknowledged before a notary public by falsification, perjury, or false
the testator and the witnesses [Art. 806, testimony.
CC]

Notary public cannot be considered a RULES ON INTERESTED WITNESS [Art. 823,


third witness. He cannot acknowledge CC]
before himself his having signed the will.
General Rule Exception
To allow such would have the effect of
having only two attesting witnesses to Devises or legacies in If there are three
the will. [Cruz v. Villasor (1973)] favor of an attesting other competent
witness or his or her witnesses, the devise
The certification of acknowledgement spouse, parent or or legacy shall be
need not be signed by the notary in the child, shall be void valid and the
presence of the testator and the interested witness
witnesses. [Javellana v. Ledesma (1955)] shall be treated as a
mere surplusage
(6) Additional rules for handicapped
testators:
(a) Deaf Mute [Art. 807, CC] Creditors are not incompetent to be
witnesses [Art. 824, CC]
• Testator must personally read the
will; or Supervening incompetency shall not
• Testator shall personally designate prevent the allowance of the will [Art.
two persons to read the contents 822, CC]
and communicate it to him in some
practicable manner.

HOLOGRAPHIC WILLS
(b) Blind [Art. 808, CC] Formal Requirements for Holographic Wills
• The will shall be read to the (a) In writing [Art. 804, CC]
testator twice - By one of the
subscribing witnesses and by the (b) In a language known to the testator [Art.
notary public acknowledging the 804, CC]
will. (c) Entirely written, dated and signed in the
• A testator suffering from glaucoma hand of the testator himself [Art. 810, CC]
may be considered as legally blind
[Garcia v. Vasquez (1970)]
Advantages Disadvantages
(7) Witnesses
Simple and easy to No guarantee as to
Qualifications [Art. 820, CC] make the capacity of the
(1) Of sound mind testator
Induces foreigners in
(2) Aged 18 years or over this jurisdiction to set No protection against
(3) Not blind, deaf or dumb down their last wishes violence, intimidation
or undue influence
(4) Able to read and write Guarantees the
absolute secrecy of May not faithfully
the testamentary express the will of the
Disqualifications [Art. 821, CC] dispositions testator due to faulty
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expressions Effect of insertion written by another person


on the validity of a holographic will
Can be easily falsified When Made Effect
and concealed
After the execution, Insertion considered
without consent of not written. Validity
testator cannot be defeated by
the malice or caprice
WITNESSES REQUIRED FOR PROBATE [Art. of a third person
811, CC]
After execution, with Will is valid, insertion
• At least one witness who knows the consent is void
handwriting and signature of the testator;
explicitly declare that it is the testator’s Contemporaneous to Will is void because it
• If contested – at least 3 of such witnesses the execution of the is not written entirely
• In the absence of a competent witness, will by the testator
expert testimony may be resorted to

General rule: The holographic will itself must Joint Wills


be presented for probate [Gan v. Yap (1958)] (1) A single testamentary instrument,
(2) Which contains the wills of two or more
persons,
Exception: If there is a photostatic copy or
xerox copy of the holographic will, it may be (3) Jointly executed by them,
presented for probate [Rodelas v. Aranza (4) Either for their reciprocal benefit or for
(1982)] the benefit of a third person.
- prohibited under Article 819.
Additional Dispositions - However, separate documents, each serving
In holographic wills, the dispositions of the as one independent will (even if written on
testator written below his signature must be the same sheet)
dated and signed by him in order to make
them valid as testamentary dispositions [Art.
812, CC] Mutual Wills
(1) Executed pursuant to an agreement
When a number of dispositions appearing in between two or more persons,
a holographic will are signed without being (2) Jointly executed by them,
dated, and the last disposition has a
signature and date, such date validates the (3) Either for their reciprocal benefit or for
dispositions preceding it, whatever be the the benefit of a third person.
time of prior dispositions. [Art. 813, CC] - prohibited under Article 819.

Insertion, Cancellation, Erasure or Alteration Reciprocal Wills


[Art. 814, CC]
(1) Testators name each other as
Testator must authenticate by his full beneficiaries in their own wills,
signature.
(2) Under similar testamentary plans
Note: Full signature does not necessarily - valid
mean the testator’s full name; it rather
means his usual and customary signature.
[Balane] A.4. CODICILS
Codicil
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(1) It is a supplement or addition to a will, LAW GOVERNING REVOCATION [Art. 829,


CC]
(2) made after the execution of a will,
(3) and annexed to be taken as a part of the Place of Testator’s Governing Law
will, Revocation Domicile

(4) by which any disposition made in the Philippines Philippines, Philippine Law
original will is explained, added to, or or some other
altered. country
(5) in order that it may be effective, it shall Philippines (1) Law of
be executed as in the case of a will. [Arts. (This situation Domicile -
825-826, CC] is not Philippine law
governed by
(2) Law of lace of
Art. 829)
A.5. INCORPORATION BY REFERENCE Outside the Revocation
Philippines
Requisites [Art. 827, CC] (3) Law of Place
of Execution of
(a) The document or paper referred to in the Will [Balane]
will must be in existence at the time of
the execution of the will. Foreign (1) Law of the
(b) The will must clearly describe and Country Place of
identify the same, stating among other Execution of
things the number of pages thereof. Will; or
(2) Law of the
(c) It must be identified by clear and place in
satisfactory proof as the document or which the
paper referred to therein; and testator had
(d) It must be signed by the testator and the his domicile
witnesses on each and every page, except at the time of
in case of voluminous books of account or revocation
inventories.

DOCTRINE OF DEPENDENT RELATIVE


A.6. REVOCATION REVOCATION [Molo v. Molo (1951)]
A will may be revoked by the testator at any
time before his death [Art. 828, CC]
The rule that where the act of destruction is
connected with the making of another will so
MODES OF REVOCATION [Art. 830, CC] as to fairly raise the inference that the
testator meant the revocation of the old to
(1) By implication of law; or depend upon the efficacy of the new
(2) By the execution of a will, codicil or other disposition intended to be substituted, the
writing executed as provided in the case revocation will be conditional and dependent
of wills; or upon the efficacy of the new disposition; and
if for any reason, the new will intended to be
(3) By burning, tearing, canceling, or made as a substitute is inoperative, the
obliterating the will with the intention of revocation fails and the original will remain in
revoking it, by the testator himself, or by full force.
some other person in his presence, and by
his express direction.
The act contemplating revocation must be The failure of the new testamentary
done at any time before the death of the disposition upon whose validity the
testator. The right of revocation cannot be revocation depends is equivalent to the non-
waived or restricted. [Art. 828, CC] fulfillment of a suspensive condition and
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hence prevents the revocation of the original accordance with the Rules of Court [Art. 838,
will. CC]

Probate – a proceeding in rem required to


A.7. REPUBLICATION AND REVIVAL establish the validity of a will and in order to
pass real or personal property [Art. 838, CC]
The execution of a codicil referring to a
previous will has the effect of republishing The testator himself may, during his lifetime
the will as modified by the codicil. [Art. 836, petition the court having jurisdiction for the
CC] allowance of his will. [Art. 838, CC]
The testator cannot republish without
reproducing in a subsequent will, the
Matters to be proved in probate
dispositions contained in a previous one
(1) Identity – Whether the instrument which
which is void as to its form. [Art. 835, CC]
is offered for probate is the last will and
Reproduction in the codicil is required only testament of the decedent
when the original will is void as to it form; in
(2) Due Execution – Whether the will has
all other cases, reference to the original will
been executed in accordance with the
suffices to republish it through the codicil.
formalities prescribed by law
[Tolentino]
(3) Capacity – Whether the testator had
If after making a will, the testator makes a
testamentary capacity at the time of
second will expressly revoking the first, the
execution of the will
revocation of the second will does not revive
the first will, which can be revived only by
another will or codicil. [Art. 837, CC]
SCOPE OF PROBATE PROCEEDINGS [Art.
839, CC]
Principle of instanter – Revoking clause in the General rule: The probate court cannot
2nd will is not testamentary in character but inquire into the intrinsic validity of
operates to revoke the prior will instanter testamentary provisions. Only the extrinsic
(immediately) upon the execution of the will validity of such wills may be examined.
containing it. The revocation of the 2nd will
does not revive the 1st will which has already
become a nullity. Exceptions:
(1) When practical considerations demand
that the intrinsic validity of the will be
REPUBLICATION VS. REVIVAL
resolved: When the will is intrinsically
Republication Revival void on its face (e.g., when there is clearly
a preterition) such that to rule on its
Takes place by an act Takes place by formal validity would be a futile exercise.
of the testator operation of law [Acain v. Diongson (1987)]
(2) Claimants are all heirs and they consent,
Corrects extrinsic and Restores a revoked
either expressly or impliedly, to the
intrinsic defects will
submission of the question of intrinsic
validity to the court. [Valera v. Inserto
(1987)]
A.8. ALLOWANCE AND DISALLOWANCE (3) Probate court may pass upon the title to
OF WILLS a property, but such determination is
provisional and not conclusive, and is
i. Probate Requirement subject to the final decision in a separate
No will shall pass either real or personal action to resolve title. [Pastor v.CA (1983)]
property unless it is proved and allowed in
(4) Probate court may decide on the
ownership of a property when the estate
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contains only one property to be (4) If the testator was insane or otherwise
adjudicated upon. [Portugal v. Portugal- mentally incapable of making a will at
Beltran (2005)] the time of its execution;
(5) If the formalities required by law have not
been complied with; or
Revocation vs. Disallowance
Revocation Disallowance (6) If it was executed through force or under
duress, or the influence of fear, or threats.
Voluntary act of the Given by judicial [Art. 839, CC]
testator decree

With or without cause Must always be for a B. INSTITUTION OF HEIR


legal cause Institution of Heirs – an act by virtue of which
the testator designates in his will the person
May be partial or total Always total, except or persons who are to succeed him in his
when the ground of property and transmissible rights and
fraud or influence for obligation [Art. 840, CC]
example affects only
certain portions of the
will A will shall be valid even though it—
(1) should not contain an institution of an
Effect of Final Decree of Probate, Res Judicata heir or
on Formal Validity (2) such institution should not comprise the
Subject to the right of appeal, the allowance entire estate or
of the will, either during the lifetime of the (3) the person so instituted should not
testator or after his death, shall be conclusive accept the inheritance or be
as to due execution. [Art. 838, CC] incapacitated to succeed.

The probate of a will by the probate court In such cases, the testamentary dispositions
having jurisdiction thereof is usually made in accordance with law shall be
considered as conclusive as to its due complied with and the remainder of the
execution and validity, and is also conclusive estate shall pass to the legal heirs. [Art. 841,
that the testator was of sound and disposing CC]
mind at the time when he executed the will,
and was not acting under duress, menace,
fraud, or undue influence, and that the will is Extent Of Grant [Art. 842, CC]
genuine and not a forgery. [Mercado v. Santos Freedom of disposition depends upon the
(1938)] existence, kind and number of compulsory
heirs.

ii. Grounds for Denying Probate • No compulsory heirs – Testator has full
(1) If the signature of the testator was power of disposition
procured by fraud; • One with compulsory heirs cannot
(2) If it was procured by undue and improper disregard the rights of the latter; may only
pressure and influence, on the part of the dispose of the free portion of his estate
beneficiary or some other person;
(3) If the testator acted by mistake or did not Effect Of Predecease Of Heir [Art. 856, CC]
intend that the instrument he signed
should be his will at the time affixing his Any heir who dies before the testator or is
signature thereto; incapacitated to succeed or renounces the
inheritance transmits no rights of the testator

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to his own heirs. This is without prejudice to Every disposition in favor of an unknown
the rights of representation. [Tolentino] person shall be void, unless by some event or
circumstance his identity becomes certain.
A disposition in favor of a definite class or
MANNER OF INSTITUTION
group of persons shall be valid. [Art. 845, CC]
Rules on Identity of Heirs [Arts. 843-849, CC]
The heir must be designated with sufficient
clarity INTENT OF THE TESTATOR
False Cause [Art. 850, CC]
• If an unknown person is instituted, the
disposition is void (unless by some event, The statement of a false cause for the
the identity becomes certain) institution of an heir shall be considered as
not written unless it appears from the will
• If a definite class or group of persons is
that the testator would not have made such
instituted, institution is valid.
institution if he had known the falsity of such
cause.
The heir shall be designated by name or
surname.
Falsity of stated cause for institution will set
• If there are two or more persons with the aside or annul the institution if the following
same names, indicate some circumstance are present [Austria v. Reyes (1973)]:
by which the heir may be known.
(1) The cause for the institution is stated in
• Even though the name may have been the will
omitted but there can be no doubt as to
(2) The cause is shown to be false
who has been instituted, the institution is
valid. (3) It appears on the face of the will that the
testator would not have made such
• If there is error in the name but identity can
institution if he had known the falsity of
still be identified through other proof,
the cause.
institution is still valid.
• If heir is unidentifiable, none is deemed
instituted. SCOPE OF INSTITUTION [Arts. 852-853, CC]
(1) There are more than one instituted heir
MANNER OF DISTRIBUTION (2) The testator intended them to get the
• Heirs instituted without designation of whole estate or the whole disposable
shares shall inherit in equal parts [Art. 846] portion
• If the institution pertains to some heirs (3) The testator has designated a definite
individually and others collectively, the portion for each heir
presumption is that all are individually
(4) Under Art. 852: the total of all portions is
instituted. [Art. 847]
less than the whole estate (or free
• If siblings are instituted (whether full or portion)
half-blood), the presumption is that the
• Therefore, a proportionate increase is
inheritance is to be distributed equally [Art.
necessary
848]. This is different from the rules of
distribution in intestate succession. • The difference cannot pass by intestacy
because the intention of the testator is
• If parents and children are instituted, they
clear—to give the instituted heirs the
are presumed to have been instituted
entire amount
simultaneously and not successively. [Art.
849]
(5) Under Art. 853: The total exceeds the
whole estate (or free portion)
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• Therefore, a proportionate reduction vivos is treated as an advance on the legitime


must be made under Articles 906, 909, 910 and 1062.
The remedy, if the value of inheritance, legacy
or devise, or donation inter vivos is only for
Preterition completion of his legitime under Articles 906
and 907.
The preterition or omission of one, some, or
all of the compulsory heirs in the direct line,
whether living at the time of the execution of
(c) Distinguished from Disinheritance
the will or born after the death of the testator,
shall annul the institution of heir; but the Preterition Disinheritance
devises and legacies shall be valid insofar as
they are not inofficious. • Tacit deprivation of • Express deprivation
a compulsory heir of of a compulsory
his legitime heir of his legitime
If the omitted compulsory heirs should die • May be voluntary • Always voluntary
before the testator, the institution shall be but the • For some legal
effectual, without prejudice to the right of presumption of law cause
representation. [Art. 854, CC] is that it is • If the disinheritance
involuntary is valid, the
• Law presumes there compulsory heir
Concept [Art. 854, CC] has been merely disinherited is
(1) There must be a total omission of one, oversight or mistake totally excluded
some or all of the heir/s from the on the part of the from the
inheritance. [Seangio v. Reyes (2006)] testator inheritance. In case
(2) The omission must be that of a • Since preterition of invalid
compulsory heir. annuls the disinheritance, the
institution of heirs, compulsory heir is
(3) The compulsory heir omitted must be of
the omitted heir merely restored to
the direct line.
gets not only his his legitime
(4) The omitted compulsory heir must be legitime but also his
living at the time of the testator’s death share in the free
or must at least have been conceived portion not
before the testator’s death. disposed of by way
of legacies and
devises
(a) Compulsory Heirs in the Direct Line
A direct line is that constituted by the
series of degrees among ascendants and (d) Effects of Preterition [Art. 854, CC]
descendants (ascending and (1) The institution of the heir is annulled.
descending). [Art. 964, par.2, CC] (2) Devises and legacies shall remain
valid as long as they are not
inofficious.
(b) Dispositions Less Than Legitime But No (3) If the omitted compulsory heir should
Preterition [Balane] die before the testator, the institution
If the heir in question is instituted in the will shall be effective, without prejudice to
but the portion given to him by the will is less the right of representation.
than his legitime – there is no preterition.
[Reyes v. Barretto-Datu (1967)] When there are no devises and legacies,
preterition will result in the annulment of
If the heir is given a legacy or devise – there is the will and give rise to intestate
no preterition. [Aznar v. Duncan (1966)] succession. [Neri v. Akutin (1941)]
If the heir had received a donation inter vivos
from the testator – the better view is that
there is no preterition. The donation inter C. SUBSTITUTION OF HEIRS

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Substitution - is the appointment of another dies before the testator, renounces or


heir, so that he may enter into the inheritance turns out to be incapacitated, then the
in default of the heir originally instituted. [Art. other two will get his shares in the same
857, CC] proportion as in the institution. A will get
twice as much as B (because his share of
1/3 in the institution is twice the size of
The substitute shall be subject to the same B’s share of 1/6)
charges and conditions imposed upon the
instituted heir, unless the testator has
(3) Simple Substitution [Art. 859, CC]
expressly provided the contrary, or the
The testator may designate one or more
charges or conditions are personally
persons to substitute the heir/s instituted
applicable only to the heir instituted. [Art.
in case the heirs should:
862, CC]
(1) die before him (predecease),
(2) should not wish to accept the
Kinds
inheritance (repudiation), or
(1) Brief or Compendious
(3) should be incapacitated to accept the
(2) Reciprocal
inheritance (incapacitated).
(3) Simple or Common
(4) Fideicommissary
(4) Fideicommissary Substitution
The testator institutes an heir with an
obligation to preserve and to deliver to
(1) Brief or Compendious [Art. 860, CC]
another the property so inherited. The
Brief – Two or more persons were heir instituted to such condition is called
designated by the testator to substitute the First Heir or the Fiduciary Heir; the
for only one heir one to receive the property is the
Fideicommissary or the Second Heir. [Art.
Compendious – One person is designated 863, CC]
to take the place of two or more heirs

(2) Reciprocal [Art. 861, CC] Requisites: [Arts. 863-865, CC]


(a) A Fiduciary or First Heir instituted is
If the heirs instituted in unequal shares
entrusted with the obligation to
should be reciprocally substituted, the
preserve and to transmit to a
substitute shall acquire the share of the
Fideicommissary Substitute or
heir who dies, renounces, or is
Second Heir the whole or part of the
incapacitated, unless it clearly appears
inheritance.
that the intention of the testator was
(b) The substitution must not go beyond
otherwise. If there is more than one
substitute, they shall have the same one degree from the heir originally
instituted.
share in the substitution as the
(c) The Fiduciary Heir and the
institution.
Fideicommissary are living at the
time of the death of the testator.
Example (only 1 substitute): If two heirs
(d) The fideicommissary substitution
are reciprocally substituted, then if one of
must be expressly made.
them dies before the testator dies,
(e) The fideicommissary substitution is
renounces, or turns out to be
imposed on the free portion of the
incapacitated, the other will get his share,
estate and never on the legitime
regardless of whether or not their shares
are equal.
In the absence of an obligation on the
part of the first heir to preserve the
Example (more than 1 substitute): A is
property for the second heir, there is no
instituted to 1/3, B to 1/6, and C to ½. If C
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fideicommissary substitution. [PCIB v. the widow or widower by the deceased


Escolin (1974)] spouse, or by the latter’s ascendants or
descendants. [Art. 874]
Effects of predecease of the first heir/fiduciary (5) Scriptura captatoria or legacy-hunting
or the second heir/fideicommissary dispositions - dispositions made upon the
condition that the heir shall make some
Situation 1: If the first heir dies followed by the
provision in his will in favour of the
second heir, then the testator dies, who will
testator or of any other person. [Art. 875]
inherit? The legal heirs. There is no
fideicommissary substitution because first Reasons for prohibition:
and second heirs are not living at the time of
(1) The captatoria converts the testamentary
the testator’s death. [Art. 863, CC]
grants into contractual transactions;
Situation 2: The testator dies first followed by (2) It deprives the heirs of testamentary
the second heir. The first heir survived them freedom;
but subsequently dies, who will inherit? The
(3) It gives the testator the power to dispose
SH and his heirs under Art. 866, CC. This is
mortis causa not only of his property but
because the SH passes his rights to his own
also of his heir’s.
heirs when he dies before FH.

Situation 3: If the first heir dies, followed by Effect: Entire disposition is void
the testator, then the second heir, who will
inherit? No specific provision in law, but SH
inherits because the T intended him to Potestative, Casual and Mixed Conditions
inherit.
(1) Potestative Conditions
D. TESTAMENTARY DISPOSITIONS Depends solely on the will of the heir
WITH A CONDITION, A TERM, AND A
MODE General rule: Must be fulfilled as soon as
the heir learns of the testator’s death
Exception: If the condition was already
3 Kinds of Testamentary Dispositions complied with at the time the heir learns
(1) Conditional [Art. 871, CC] of the testator’s death; or if the condition
(2) Dispositions with a term [Art. 885, CC] is of such a nature that it cannot be
(3) Dispositions with a mode/modal fulfilled again.
dispositions [Art. 882, CC]
Constructive Compliance: deemed
fulfilled
CONDITIONAL DISPOSITIONS
Basis of testator’s right to impose conditions,
terms or modes: Testamentary freedom (2) Casual or mixed
Casual condition – one whose fulfillment
Prohibited conditions: (considered as not depends on chance or the will of a third
imposed) person.

(1) Any charge, condition or substitution


whatsoever upon the legitimes. [Art. 872] Mixed condition – one whose fulfillment
(2) Impossible and illegal conditions. [Art. depends partly on the will of the heir and
873] partly on chance or the will of a third
person.
(3) Absolute condition not to contract a first
marriage. [Art. 874]
(4) Absolute condition not to contract a
subsequent marriage unless imposed on
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General rule: May be fulfilled at any time A mode functions similarly to a resolutory
(before or after testator’s death), unless condition.
testator provides otherwise.
In modal institutions, the testator states (1)
the object of the institution, (2) the purpose
or application of the property left by the
Exception: If already fulfilled at the time
testator, or (3) the charge imposed by the
of execution of will:
testator upon the heir. [Rabadilla v. CA
(1) if testator unaware of the fact of (2000)]
fulfillment – deemed fulfilled
Caución Muciana
(2) if testator aware:
• can no longer be fulfilled again: A security to guarantee the return of the
deemed fulfilled value of property, fruits, and interests, in case
of contravention of condition, term or mode
• can be fulfilled again: must be
fulfilled again. Instances when it is needed:
(1) Suspensive term [Art. 885,CC]
Constructive Compliance: (2) Negative potestative condition - when the
• if casual – not applicable condition imposed upon the heir is
• if mixed – applicable only if dependent negative, or consists in not doing or not
partly on the will of a third party not giving something [Art. 879, CC]
interested. (3) Mode [Art. 882, par 2, CC]

DISPOSITIONS WITH A TERM


A term may either be suspensive or E. LEGITIME
resolutory.
(1) If the term is suspensive: It is that part of the testator’s property which
Before the arrival of the term, the he cannot dispose of because the law has
property should be delivered to the legal reserved it for his compulsory heirs. [Art. 886,
or intestate heirs. CC]
A caución muciana has to be posted by
the legal or intestate heirs. COMPULSORY HEIRS AND VARIOUS
COMBINATIONS
(2) If the term is resolutory: Classes of Compulsory Heirs [Art. 887, CC]
Before the arrival of the term, the (1) Primary: Those who have precedence over
property should be delivered to the and exclude other compulsory heirs:
instituted heir. • Legitimate Children and Legitimate
No caución muciana required as the heir Descendants with respect to their
has a right over the property during the Legitimate Parents and Ascendants
period.
(2) Secondary: Those who succeed only in the
absence of the primary compulsory heirs:
MODAL DISPOSITIONS (a) Legitimate Parents and Legitimate
Dispositions with an obligation imposed upon Ascendants, with respect to their
the heir, without suspending the effectivity of Legitimate Children and
the institution, as a condition does Descendants. (They will inherit only in
default of legitimate children and
Must be clearly imposed as an obligation in their descendants)
order to be considered as one. Mere (b) Illegitimate Parents with respect to
preferences or wishes expressed by the their Illegitimate Children. (They will
testator are not modes. inherit only in default of the
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illegitimate and legitimate children (b) Right of representation ad infinitum


and their respective descendants). in case of predecease, incapacity, or
Note that other illegitimate disinheritance [Arts. 972 and 992, CC]
ascendants are not included. • For decedents who are Legitimate
Children, only the Legitimate
(3) Concurring: Those who succeed together Descendants are entitled to right of
with the primary or the secondary representation.
compulsory heirs: • For decedents who are Illegitimate
(a) Surviving Spouse Children, both the Legitimate and
(b) Illegitimate Children and Illegitimate the Illegitimate Descendants can
Descendants represent, only with respect to the
decedent’s illegitimate parents.
If the testator is a If the testator is an
legitimate child: illegitimate child: (c) If all the Legitimate Children
repudiate their legitime, the next
(1) LC and (1) LC and generation of Legitimate
descendants descendants Descendants may succeed in their
(2) In default of No. 1, (2) ILC and own right.
LP and descendants
ascendants (3) In default of Nos.
(3) SS 1-2 ILP only (2) Direct Ascending Line
(4) IC and (4) SS (a) Rule of division between lines
descendants • The father and the mother shall
inherit equally if both living. One
parent succeeds to the entire estate
Specific Rules on Legitimes of the child if the other parent is
(1) Direct Descending Line dead. [Art. 986, CC]
(a) Rule of Preference between lines • In default of the mother and the
[Arts. 978 and 985, CC] father, the ascendants nearest in
• Those in the direct descending line degree will inherit. [Art. 987]
shall exclude those in the direct • If there is more than one relative of
ascending and collateral lines; and the same degree but of different
• Those in the direct ascending line lines, one half will go to the
shall, in turn, exclude those in the paternal ascendants and the other
collateral line. half to the maternal ascendants.
• Rule of Proximity [Art. 926, CC]: The [Art. 987]
relative nearest in degree excludes (b) Rule of equal division
the farther one • The relatives who are in the same
degree shall inherit in equal shares.
[Art. 987]

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SUMMARY OF LEGITIMES OF COMPULSORY HEIRS


Legend:
LC – Legitimate ILC - Illegitimate SS – Surviving LP – Legitimate ILP – Illegitimate
Children Children Spouse Parents Parents

Surviving Relatives LC & Descendants SS ILC LP &


ILP
Ascendants

1 LC alone 1/2 of the estate in


equal portions

2 1 LC, SS 1/2 1/4

3 LC, SS 1/2 in equal Same portion as 1LC


portions

4 LC, ILC 1/2 in equal 1/2 share of 1 LC (for each


portions ILC)

5 1 LC, SS, ILC 1/2 1/4 (preferred) 1/2 share of 1 LC (for each
child)

N.B. The share of the ILC


may suffer reduction pro
rata because spouse is
given preference

6 2 or more LC, SS, 1/2 in equal Same as share of 1LC 1/2 share of 1 LC (for each
ILC portions 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

13 SS alone ½
Exception: marriage in
articulo mortis and testator
dies within 3 months from
marriage – 1/3

Exception to the exception:


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

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Steps in Determining the Legitime of Compulsory by operation of law for the benefit of relatives
Heirs who are within the third degree and who belong
(1) Determine the gross value of the estate at to the line from which said property came.
the time of the death of the testator.
(2) Determine all debts and charges which are
chargeable against the estate. Concept of Reserva Troncal
(1) A descendant (prepositus) inherits or
(3) Determine the net value of the estate by acquires property from an ascendant or from
deducting all the debts and charges from a brother or sister (origin or mediate source)
the gross value of the estate. by gratuitous title
(4) Collate or add the value of all donations (2) The same property is inherited by another
inter vivos to the net value of the estate. ascendant (reservista) or is otherwise
(5) Determine the amount of the legitime from acquired by him by operation of law from the
the total thus found. said descendant (prepositus)

(6) Impute the value of all donations inter vivos (3) The said ascendant (reservista) must reserve
made to strangers against the disposable the property for the benefit of the relatives of
free portion and restore it to the estate if the the deceased descendant within the third
donation is inofficious. civil degree and who belong to the line from
which the said property came (reservatarios).
(7) Distribute the residue of the estate in
accordance with the will of the testator. Parties: [Balane at 371]
(1) Origin or Mediate Source – either an
ascendant of any degree of ascent or a
Remedy of a Compulsory Heir in case of brother or sister of the Prepositus;
Impairment of Legitime responsible for the 1st transfer
Extent and Nature of (2) Prepositus – the first transferee of the
Remedy
Impairment reserved property
Total omission of a Annulment of (3) Reservista – an ascendant of the Prepositus
compulsory heir who is institution and other than the Origin or Mediate Source; the
a direct descendant or reduction of legacies one obligated to reserve the property
ascendant (preterition) and devises [Art. 854,
CC] (4) Reservatarios – within the 3rd degree of
consanguinity from the Prepositus [Cabardo
Testamentary Reduction of the v. Villanueva (1922)] belonging to the line
dispositions impairing disposition insofar as from which the property came
or diminishing the they may be inofficious
legitime or excessive [Art. 907,
CC] Requisites for Reserva Troncal [Chua vs. CFI
(1977)]:
Partial impairment Completion of the (a) That the property was acquired by a
legitime [Art. 906, CC] descendant (Prepositus) from an ascendant
or from a brother or sister (Origin or Mediate
Impairment by Collation – reduction of Source) by gratuitous title,
inofficious donations donations [Arts. 771 and
911, CC] (b) That the Prepositus died without
(legitimate*) issue,
RESERVA TRONCAL (c) That the property is inherited by another
Art. 891, CC. The ascendant who inherits from his ascendant (Reservista) by operation of law,
descendant any property which the latter may and
have acquired by gratuitous title from another (d) That there are relatives within the 3rd degree
ascendant, or a brother or sister, is obliged to (Reservatarios) belonging to the line from
reserve such property as he may have acquired which said property came.
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*Only legitimate descendants will prevent the (2) In his will, he institutes as his heir his
property from being inherited by the legitimate ascendant (who is also a compulsory heir)
ascending line by operation of law [Balane] such that the ascendant receives half of the
estate by operation of law as legitime and
the other half by testamentary disposition
Three transmissions involved: [Balane at 366-
Two Views
367]
(1) Reserva Maxima: As much of the potentially
(1) 1st transfer – by gratuitous title, from a
reservable property as possible must be
person to his descendant, brother or sister
deemed included in the part that passes by
(2) 2nd transfer – by operation of law, from the operation of law (maximizing the scope of
transferee in the 1st transfer to another the reserva)
ascendant. This creates the reserva. (2) Reserva Minima: every single property in the
prepositus’s estate must be deemed to pass,
(3) 3rd transfer – from the transferee in the
partly by will and partly by operation of law,
second transfer to the relatives
in the same proportion that the part given by
will bears to the part not so given [Balane]
JURIDICAL NATURE OF RIGHTS
Nature of the reservista’s right: [Edroso v. Sablan Either view is defensible, but Reserva Minima
(1913)] finds wider acceptance in the Philippines
• The reservista’s right over the reserved [Balane]
property is one of ownership

• The right of ownership is subject to a Extinguishment of the Reserva


resolutory condition, i.e. the existence of (1) Loss of the reservable property
reservatarios at the time of the reservista's (2) Death of the reservista
death
(3) Death of all the relatives within the third
• The right of ownership is alienable, but subject degree belonging to the line from which the
to the same resolutory condition. property came
(4) Renunciation by the reservatarios
• The reservista’s right of ownership is
registrable. (5) Prescription, when the reservista holds the
property adversely against the reservatarios,
as free from reservation
Nature of reservatarios’ right: [Sienes v. Esparcia
(1961)] F. DISINHERITANCE
• The reservatarios have a right of expectancy Definition [Art. 915, CC]
over the property.
(1) It is the act by which the testator
• The right is subject to a suspensive condition, (2) For just cause
i.e. the expectancy ripens into ownership if the (3) Deprives a compulsory heir of his right to the
reservatarios survive the reservistas. legitime.
• The right is alienable but subject to the same
suspensive condition. Requisites of a Valid Disinheritance

• The right is registrable. (a) Heir disinherited must be designated by


name or in such a manner as to leave no
Reserva Minima vs. Reserva Maxima room for doubt as to who is intended to be
disinherited.
(1) The prepositus acquired property (b) It must be for a cause designated by law.
gratuitously from an ascendant, a brother or (c) It must be made in a valid will.
sister
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(d) It must be made expressly, stating the cause (2) When the parent or ascendant has been
in the will itself. convicted of an attempt against the life of
(e) The cause must be certain and true, and the testator, his or her spouse, descendants,
must be proved by the interested heir if the or ascendants;
person should deny it.
(3) When the parent or ascendant has accused
(f) It must be unconditional.
the testator of a crime for which the law
(g) It must be total.
prescribes imprisonment for six years or
more, if the accusation has been found to be
F.1. DISINHERITANCE OF CHILDREN AND false;
DESCENDANTS
(4) When the parent or ascendant has been
[Art. 919, CC] convicted of adultery or concubinage with
the spouse of the testator;
(1) When a child or descendant has been found (5) When the parent or ascendant by fraud,
guilty of an attempt against the life of the violence, intimidation, or undue influence
testator, his or her spouse, descendants, or causes the testator to make a will or to
ascendants; change one already made;
(2) When a child or descendant has accused the (6) The loss of parental authority for causes
testator of a crime for which the law specified in this Code;
prescribes imprisonment for six years or
(7) The refusal to support the children or
more, if the accusation has been found
descendants without justifiable cause;
groundless;
(8) An attempt by one of the parents against the
(3) When a child or descendant has been
life of the other, unless there has been a
convicted of adultery or concubinage with
reconciliation between them.
the spouse of the testator;
(4) When a child or descendant by fraud,
violence, intimidation, or undue influence F.3. DISINHERITANCE OF A SPOUSE
causes the testator to make a will or to
[Art. 921, CC]
change one already made;
(5) A refusal without justifiable cause to support (1) When the spouse has been convicted of an
the parent or ascendant who disinherits such
attempt against the life of the testator, his or
child or descendant;
her descendants, or ascendants;
(6) Maltreatment of the testator by word or
(2) When the spouse has accused the testator of
deed, by the child or descendant;
a crime for which the law prescribes
(7) 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;
(8) 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
already made;
F.2. DISINHERITANCE OF PARENTS AND
(4) When the spouse has given cause for legal
ASCENDANTS
separation;
[Art. 920, CC]
(5) When the spouse has given grounds for the
loss of parental authority;
(1) When the parents have abandoned their
(6) Unjustifiable refusal to support the children
children or induced their daughters to live a
or the other spouse.
corrupt or immoral life, or attempted against
their virtue;

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Summary of Causes of Disinheritance


CC 919 CC 920 CC 921 CC 1032
Grounds for Disinheritance Children & Parents & Spouse Unworthiness
Descendants Ascendants

1 Guilty or Convicted of Attempt Against


the Life of the Testator, Spouse,
Ascendant or Descendant ✓ ✓ ✓ ✓

2 Accused Testator or Decedent of Crime


Punishable by Imprisonment of 6 years or
more, and Found Groundless or False ✓ ✓ ✓ ✓

3 Causes testator or decedent to Make a


Will or Change one by Fraud, Violence,
Intimidation, or Undue Influence ✓ ✓ ✓ ✓

4 Unjustified Refusal to Support Testator ✓ ✓ ✓

5 Convicted of Adultery or Concubinage ✓ ✓ ✓


with Spouse of Testator or Decedent

6 Maltreatment of testator by Word and ✓


Deed

7 Leading a Dishonorable or Disgraceful ✓


Life

8 Conviction of Crime which carries the ✓


penalty of Civil Interdiction

9 Abandonment of Children or Inducing


Children to Live Corrupt and Immoral Life
or Against Attempted Virtue ✓ ✓

10 Loss of Parental Authority ✓ ✓

11 Attempt by One Parent Against the Life


of the Other Unless there is
Reconciliation Between Parents ✓

12 Spouse Has Given Cause for Legal ✓ ✓


Separation

13 Failure to Report Violent Death of


Decedent Within One Month Unless
Authorities Have Already Taken Action ✓

14 Force, Violence, Intimidation, or Undue


Influence to Prevent Another from
Making a Will or Revoking One Already
Made or Who Supplants or Alters the ✓
Latter’s Will
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15 Falsifies or Forges Supposed Will of ✓


Decedent

Modes of Revocation of Disinheritance (3) The cause is not among those specified in
(1) Reconciliation [Art. 922, CC] the provisions.
(2) Subsequent institution of the disinherited
heir
(3) Nullity of the will which contains the Effect of Ineffective Disinheritance: if the
disinheritance. disinheritance lacks one or other of the
requisites mentioned in this article, the heir in
question gets his legitime. [Balane]
Note: The moment that testator uses one of the
acts of unworthiness as a cause for
disinheritance; he thereby submits it to the rules
on disinheritance. Thus, reconciliation renders
the disinheritance ineffective. Ineffective
Preterition
Disinheritance

RECONCILIATION [Art. 922, CC] Person disinherited Person omitted must


may be any compulsory be a compulsory heir in
heir the direct line
Effect of Reconciliation between Offender and
Offended Person: If no disinheritance has been Only annuls the Annuls the entire
made yet, the offended person will be deprived institution in so far as it institution of heirs
of his right to disinherit. prejudices the person
disinherited

If disinheritance has been effected, it will be


rendered ineffectual. G. LEGACIES AND DEVISES
Legacy Devise
RIGHTS OF DESCENDANTS OF PERSON
DISINHERITED [Art. 923, CC] A gift of personal A gift of real property
property given in a will given in a will

Disinheritance gives rise to the right of It is bequeathed It is devised


representation in favor of the children and
descendants of the disinherited person with
respect to his legitime. PERSONS CHARGED WITH THE DUTY TO GIVE
LEGACIES AND DEVISES IN A WILL

This is inconsistent with Art. 1033. In


disinheritance, reconciliation is sufficient. It (1) Compulsory heir, provided, their legitimes
need not be in writing. In unworthiness, are not impaired [Art. 925, CC]
however, it needs to be in writing. [Balane] (2) Voluntary heir
(3) Legatee or devisee can be charged with the
INEFFECTIVE DISINHERITANCE [Art. 918, CC] duty of giving a sub-legacy or sub-devise but
only to the extent of the value of the legacy
or devise given him [Art. 925, CC]
Instances of Ineffective disinheritance: (4) The estate represented by the executor or
(1) There is no specification of the cause. administrator, if no one is charged with this
duty to pay or deliver the legacy or devise in
(2) The cause is not proved. the will
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• If there is an administration proceeding, it The thing is subject to an Valid only as to


constitutes a charge upon the estate. encumbrance or interest of the interest or
• If there is no administration proceeding, it another person [Art. 932, CC] encumbrance
is a charge upon the heirs.
Legatee or devisee Ineffective
subsequently alienates the
VALIDITY AND EFFECT OF LEGACY OR DEVISE thing [Art. 933,CC]
Legacy or devise of a thing belonging to another
[Art. 930, CC] After alienating the thing, the Ineffective
legatee or devisee subsequently
Testator erroneously believed Void reacquires it gratuitously [Art.
that the property belonged to 933, CC]
him
After alienating the thing, the Legatee or
The thing bequeathed Effective legatee or devisee acquires it by devisee can
afterwards becomes his by onerous title [Art. 933, CC] demand
whatever title reimbursement
from the heir or
Legacy or devise of thing already belonging to the estate
legatee or devisee

The thing already belongs to Ineffective


the legatee or devisee at the
time of the execution of the will
[Art. 932, CC]

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


Objects of Legacy or Devise Effect

Thing pledged or • Estate is obliged to pay the debt


mortgaged to secure a
debt • Other charges pass to the legatee or devisee

Credit or remission or • Effective only as regards the credit or debt existing at the time of the
release of a debt testator’s death
• 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

Order of payment of a debt • If testator does not really owe the debt, the disposition is void
• 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

Alternative legacies and • The choice is with the heir, or the executor or administrator
devises
• If the heir, legatee or devisee dies, the right passes to their heirs
• Once made, the choice is irrevocable

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Legacy of generic personal • Legacy is valid even if there are no things of the same kind in the estate
property or indeterminate
real property • Devise of indeterminate real property valid only if there are immovable
property of the same kind in the estate
• The choice belongs to the heir, legatee or devisee or the executor or
administrator

Legacy of education • 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 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

Legacy of support • Lasts during lifetime of legatee


• If the testator used to give the legatee a sum of money for support, give the
same amount unless it is 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

• Legitime of compulsory heirs • Remuneratory legacy/devise


• Donations inter vivos • Preferential legacy/devise
• Preferential legacies or devises • Legacy for support
• All other legacies or devises pro rata • Legacy for education
• Legacy/devise of specific, determinate thing which
forms a part of the estate
• All others pro rata

Application

• When the reduction is necessary to preserve the • When there are no compulsory heirs and the entire
legitime of compulsory heirs from impairment whether estate is distributed by the testator as legacies or
there are donations inter vivos or not; or devises; or
• When, although, the legitime has been preserved by • When there are compulsory heirs but their legitime has
the testator himself there are donations inter vivos. already been provided for by the testator and there are
no donations inter vivos.

Art. 911, CC governs when there is a conflict between


compulsory heirs and the devisees and legatees. Art. 950, CC governs when the question of reduction is
exclusively among legatees and devisees themselves.

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Delivery of Legacy/Devise [Art. 951, CC] Revocation of Legacies and Devises [Art. 957, CC]
(1) The very thing bequeathed shall be delivered (1) Testator transforms the thing such that it does
and not its value not retain its original form or denomination
(2) With all its accessions and accessories (2) Testator alienates the thing by any title or for
any cause. Reacquisition of the thing by the
(3) In the condition in which it may be upon the
testator does not make the legacy or devise
death of the testator
valid, unless it is effected by right of
(4) Legacies of money must be paid in cash repurchase.
(3) Thing is totally lost during the lifetime or after
the death of the testator
Effect of ineffective legacies or devises [Art. 956,
CC] (4) Other causes: nullity of will, non-compliance
with suspensive condition, sale of the thing to
In case of repudiation, revocation or incapacity of
pay the debts of the deceased during the
the legatee or devisee, the legacy or devise shall
be merged with the mass of the hereditary estate, settlement of his estate.
except in cases of substitution or accretion.

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descending line to the legitime if the


III. Legal or Intestate vacancy is caused by predecease,
Succession incapacity, or disinheritance.
(3) The right of Accretion applies to the free
portion when the requisites in Art. 1016
A. GENERAL PROVISIONS are present.
(4) If there is no substitute, and the right of
Intestacy – that which takes place by representation or accretion is not proper,
operation of law in default of compulsory and the rules on Intestate succession shall
testamentary succession. Not defined in the apply.
Civil Code.
The Intestate or Legal Heirs:
INSTANCES WHEN LEGAL OR INTESTATE (1) Relatives
SUCCESSION OPERATES [Art. 960, CC] (a) Legitimate children
(1) If a person dies without a will, or with a (b) Illegitimate children
void will, or one which has subsequently
lost its validity (c) Legitimate parents
(2) When the will does not institute an heir (d) Illegitimate parents
(3) Upon the expiration of term, or period of (e) Brothers, sisters, nephews and nieces
institution of heir [Balane] (BSNN)
(4) Upon fulfillment of a resolutory condition (f) Other collateral relatives
attached to the institution of heir, (2) Surviving spouse
rendering the will ineffective [Balane] (3) State (through escheat proceedings)
(5) When the will does not dispose of all the
property belonging to the testator. Legal Intestate succession is based on the
succession shall take place only with presumed will of the decedent. That is, to
respect to the property which the testator distribute the estate in accordance with the
has not disposed (mixed succession) love and affection he has for his family, and in
(6) If the suspensive condition attached to default of these persons, the presumed desire
the institution of the heir does not to promote charitable and humanitarian
happen or is not fulfilled activities. [Balane]
(7) If the heir dies before the testator
(8) If the heir repudiates the inheritance, FUNDAMENTAL PRINCIPLES IN INTESTATE
there being no substitution, and no right SUCCESSION
of accretion takes place (1) Rule of Preference between Lines
(9) When the heir instituted is incapable of • Those in the direct descending line
succeeding, except in cases provided in shall exclude those in the direct
the Civil Code ascending and collateral lines;
(10) Preterition – Intestacy may be total or • Those in the direct ascending line shall,
partial depending on whether or not in turn, exclude those in the collateral
there are legacies or devises [Balane] line.
Note: In all cases where there has been an
institution of heirs, follow the ISRAI order: (2) Rule of Proximity
(1) If the Institution fails, Substitution occurs. • The relative nearest in degree excludes
(2) If there is no substitute, the right of the farther one [Art. 962(1), CC], saving
Representation applies in the direct
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the right of representation when it survives, the other collateral relatives and
properly takes place. the state are excluded.
• If any of the heirs concur in legitimes, then
they also concur in intestacy.
(3) Rule of Equal Division
A.1. RELATIONSHIP
• The relatives who are in the same
degree shall inherit in equal shares. The number of generations determines the
[Arts. 962(2), 987 and 1006, CC] proximity of the relationship. Each generation
forms one degree. [Art. 963, CC]
Exceptions: [Balane]
(a) Rule of preference between Lines A series of degrees forms a line. This line may
either be direct or collateral. [Art. 964, CC]
(b) Distinction between legitimate and
illegitimate filiation. The ratio under • A direct line is that constituted by the series
present law is 2:1. [Art. 983, in relation of degrees among ascendants and
to Art. 895 as amended by Art. 176, descendants.
FC] • The direct line is either ascending (brings a
(c) Rule of division by line in the person with those from whom he descends)
ascending line [Art. 987 (2), CC] and descending (connecting the head of
(d) Distinction between full-blood and the family with those who descend from
half-blood relationship among him). [Art. 965, CC]
brothers and sisters, as well as • A collateral line is that constituted by the
nephews and nieces. [Art. 1006 and series of degrees among persons who are
1008, CC] not ascendants or descendants, but who
(e) Right of representation. come from a common ancestor.

(4) Rule of Barrier between the legitimate Note: It is important to distinguish between
family and the illegitimate family (the direct and collateral, as the direct has
iron-curtain rule) preference over the collateral.
The illegitimate family cannot inherit by
intestate succession from the legitimate In a line, as many degrees are counted as
family and vice-versa. [Art. 992, CC] there are generations. [Art. 966, CC]
(1) In the direct line, ascent is made up to the
(5) Rule of Double Share for full blood common ancestor or progenitor.
collaterals (2) In the collateral line, ascent is made to
the common ancestor. Then descent to
When full and half-blood brothers or the person with whom the computation is
sisters, nephews or nieces, survive, the to be made.
full blood shall take a portion in the
inheritance double that of the half-blood.
[Arts. 895 and 983, CC] Note: Descending line is preferred over
ascending.
Note:
Blood relationship is either full or half-blood.
• If one of the legitimate ascendants, [Art. 967, CC]
illegitimate parents, legitimate children or
illegitimate children survives, the brother, Note: As among brothers and sisters and
sisters, nephews, and nieces (BSNN) are nephews and nieces, there is a 2:1 ratio for
excluded. full-blood and half-blood relatives. Direct
• If one of the legitimate ascendants, relatives are preferred. But this distinction
illegitimate parents, legitimate children, does not apply with respect to other
illegitimate children or surviving spouse collateral relatives.
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A.2. RIGHT OF REPRESENTATION


Representation – right created by fiction of
law, by virtue of which the representative is
INCAPACITY [Art. 968, CC]
raised to the place and the degree of the
General rule: If there are several relatives of person represented, and acquires the rights
the same degree, and one or some of them which the latter would have if he were living
are unwilling or incapacitated to succeed, his or if he could have inherited [Art. 970, CC]
portion shall accrue to the others of the same
degree.
Effect of Representation
The representative heir acquires the rights
Exception: When the right of representation
which the person represented would have if
should take place.
he were living or if he could have inherited.

Note: This accretion in intestacy takes place


When it occurs
in case of predecease, incapacity, or
renunciation among heirs of the same Representation is allowed with respect to
degree. The relatives must be in the same inheritance conferred by law (legitime and
relationship because of the Rule of intestate based on Art. 923)
Preference of Lines.
It occurs only in the following instances: (DIP)
(1) Predecease of an heir
REPUDIATION [Arts. 968-969, CC]
(2) Incapacity or unworthiness
(3) Disinheritance [Art. 923, CC]
There is no right of representation in
repudiation. If the nearest relative/s
repudiates the inheritance, those of the
There is no representation in testamentary
following degree shall inherit in their own
succession. [Art. 856, CC]
right.

In case of repudiation by all in the same


A renouncer can represent, but cannot be
degree, the right of succession passes on the represented. Rationale is found in Art. 971
heirs in succeeding degrees: descending line
which states that “The representative does
first, ascending line next, and collateral line
not succeed the person represented but the
next. [Balane]
one whom the person represented would
have succeeded.”
ADOPTION [Art. 189, FC]
In adoption, the legal filiation is personal and
Representation in the Direct Descending Line
exists only between the adopter and the
adopted. The adopted is deemed a legitimate Representation takes place ad infinitum in
child of the adopter, but still remains as an the direct descending line but never in the
intestate heir of his natural parents and other direct ascending line. [Art. 972, CC]
blood relatives. (Note, however, Section 16 of
the Domestic Adoption Act [RA 8552], which
provides that all legal ties between the General rule: Grandchildren inherit from the
biological parent(s) and the adoptee shall be grandparents by right of representation, if
severed and the same shall then be vested on proper.
the adopter(s).”

Exception: Whenever all the children


repudiate, the grandchildren inherit in their

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own right because representation is not • In determining whether or not


proper. [Art. 969, CC] representation is proper, it is necessary that
the representative must be a legal heir of
both the person he is representing and the
Representation in Collateral Line decedent. [Art. 973, CC]
In the collateral line, representation takes • But the representative need not be
place only in favor of the children of the qualified to succeed the person
brothers or sisters (i.e., nephews and nieces) represented. [Art. 971, CC] In the same
whether of the full or half-blood [Art. 972, CC] manner, the person represented need not
and only if they concur with at least one uncle be qualified to succeed the decedent, as it
or aunt. In this case, they share in the is his disqualification which gives rise for
inheritance per stirpes. representation to apply.
 Legitimate children may not be
If the children survive alone, they inherit in represented by their illegitimate
their own right and share in equal descendants (because of the bar in Art.
proportions or per capita. [Art. 975, CC] 992). In contrast, illegitimate children
may be represented by their legitimate
and illegitimate descendants. [Art. 902]
Right of representation in the collateral line is  Illustration: A has legitimate son L and
only possible in intestate succession. It illegitimate son I. L has an illegitimate
cannot take place in testamentary son L-1 while I also has an illegitimate
succession. son I-1. I-1 may inherit from A by
representation of I (under Art. 902, CC),
but L-1 may not inherit from A (because of
Per stirpes the barrier under Art. 992, CC)
• Inheritance per stirpes means that the
representative/s shall receive only what the Representation in Adoption
person represented would have received, if
• If the adopting parent should die before the
he were living or could inherit. [Art.975, CC]
adopted child, the latter cannot represent
• If there are more than one representative in the former in the inheritance of the parents
the same degree, then it shall be divided or ascendants of the adopter. The adopted
equally, without prejudice to the distinction child is not related to the deceased in that
between legitimate and illegitimate, if case, because filiation created by fiction of
applicable. law is exclusively between the adopter and
the adop

The Double Heirship Test


• ted. [Tolentino]

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B. ORDER OF INTESTATE SUCCESSION

Decedent is a Legitimate Child Decedent is an Illegitimate Child Decedent is an Adopted Child

1 Legitimate children or Legitimate children or Legitimate children or


descendants (LCD) descendants (LCD) descendants (LCD)

2 Legitimate parents or Illegitimate children or Illegitimate children or


ascendants (LPA) descendants (LPA) descendants (ICD)

3 Illegitimate children or Illegitimate parents (IP) Legitimate or illegitimate


descendants (ICD) parents, or legitimate
ascendants, adoptive parents

4 Surviving spouse (SS) Surviving spouse (SS) Surviving spouse (SS)

5 Brothers and sisters, nephews, Illegitimate brothers and sisters, Brothers and sisters, nephews,
nieces (BS/NN) nephews, nieces (IBS/NN) nieces (BS/NN)

6 Legitimate collateral relatives State State


within the 5th degree (C5)

7 State

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Rules of Exclusion and Concurrence in Intestate Shares


Intestate Heirs Excludes Excluded By Concurs With

LC + LD Ascendants, Collaterals No one SS + ILC


and State

ILC + D ILP, Collaterals and State No one SS, LC, LP

LP + LA Collaterals and State LC ILC + SS

ILP Collaterals and State LC and ILC SS

SS Collaterals other than No one LC, ILC, LP, ILP, Siblings,


siblings, nephews and Nephews, Nieces
nieces, State

Siblings, Nephews, All other collaterals and LC, ILC, LP, ILP SS
Nieces
State

Other collaterals within Collateral more remote LC, ILC, LP, ILP and SS Collaterals in the same
5th degree in degree and State degree

State No one Everyone No one

Outline of Intestate Shares


Note: In partial intestacy, the testamentary (1) Legitimate children only
dispositions can reduce the shares of intestate
Divide entire estate equally among all
heirs, provided that their legitimes, if they are
legitimate children [Art. 979, CC]
also compulsory heirs, are not impaired. More
specifically: Legitimate children include an adopted child.
(1) The law of legitimes must be brought into (2) Legitimate children and Illegitimate children
operation in partial intestacy.
Divide entire estate such that each
(2) If among the concurring intestate heirs there
illegitimate child gets ½ of what a legitimate
are compulsory heirs whose legal or intestate
child gets [Art. 983, CC and Art. 176, FC]
portions exceed their respective legitimes, the
amount of the testamentary disposition must Ensure that the legitime of the legitimate
be deducted from the disposable portion, to children are first satisfied.
be borne by all the intestate heirs in the (3) Legitimate children and surviving spouse
proportions that they are entitled to receive
from such disposable portion as intestate heir. Divide entire estate equally between the
(3) If the legal or intestate share of a compulsory legitimate children and the surviving spouse,
heir is equal to his legitime, then the amount the latter deemed as one child. The same rule
of the testamentary disposition must be holds where there is only one child.
deducted only from the legal or intestate (4) Legitimate children. Surviving spouse, and
shares of the others. Illegitimate children
(4) If the testamentary dispositions consume the
entire disposable portion, then the intestate Divide the entire estate such that the
heirs who are compulsory heirs will get only surviving spouse is deemed one legitimate
their legitimes, and those who are not child and each illegitimate child getting ½ of
compulsory heirs will get nothing. [Tolentino] what the legitimate child gets. [Art. 996, CC
and Art. 176, FC]

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Ensure that the legitime of the legitimate and nieces inheriting by representation, if
children and the spouse are first satisfied. proper; Note that all the other relatives
should be “illegitimate” because of the iron-
(5) Legitimate parents only
curtain rule. [Art. 994, CC]
Divide the entire estate equally. [Art. 985]
(16) Illegitimate parents only
(6) Legitimate ascendants only (excluding
Entire estate goes to the illegitimate parents.
parents)
[Art. 993, CC]
Divide the entire estate equally but with the
(17) Illegitimate parents and children of any kind
observance of the rule of division by line. [Art.
(whether legitimate or illegitimate child)
987
Illegitimate parents are excluded and do not
(7) Legitimate parents and illegitimate children
inherit. For the rule on the respective shares
Legitimate parents get ½ of the estate, of the children, see numbers 1, 2 or 10,
illegitimate children get the other ½. [Art. whichever is applicable.
991]
(18) Legitimate brothers and sisters only
(8) Legitimate parents and surviving spouse
Divide the entire estate such that full-blood
Legitimate parents get ½ of the estate; The brothers/sisters gets a share double the
surviving spouse gets the other ½. [Art. 997] amount of a half-blood brother or sister. [Art.
1004 and 1006, CC]
(9) Legitimate parents, surviving spouse and
illegitimate children (19) Legitimate brothers and sisters, nephews and
nieces
Legitimate parents get ½ of the estate;
surviving spouse and the illegitimate child Divide the entire estate observing the 2 is to 1
each get ¼ each, the latter to share among ratio for full and half-blood relationships with
themselves if more than one. [Art. 1000] respect to the brothers and sisters, with the
nephews and nieces inheriting by
(10) Illegitimate children only
representation, if proper. [Art. 1005 & 1008,
Divide the entire estate equally. [Art. 988 CC]
(11) Illegitimate children and surviving spouse (20) Nephews and nieces only
Illegitimate children get ½ of the estate; the Divide the entire estate per capita, observing
surviving spouse gets the other ½. [Art. 998] the 2 is to 1 ratio. [Arts. 975 and 1008, CC]
(12) Surviving spouse only (21) Other collaterals [Arts. 1009 and 1010]
Entire estate goes to the surviving spouse. Divide entire estate per capita. Collateral
[Art. 994/995] relatives must be with the 5th degree of
(13) Surviving spouse and illegitimate parents consanguinity.

Illegitimate parents get ½ and the spouse Note: the nearer relative excludes the more
gets the other ½. [by analogy with Art. 997 remote relatives.

(14) Surviving spouse and legitimate brothers and (22) State


sisters, nephews and nieces If there are no other intestate heirs, the State
Surviving spouse gets ½ of the estate, while inherits the entire estate through escheat
the rest gets the other ½ with the nephews proceedings. [Art. 1011, CC]
and nieces inheriting by representation if
proper. [Art. 1001
(15) Surviving spouse and illegitimate brothers and
sisters, nephews and nieces
Surviving spouse gets ½ of the estate while
the rest gets the other ½ with the nephews
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It is the mechanism where the share of an heir is


IV. Provisions Common to increased by vacant shares vacated by heirs who
Testate and Intestate cannot inherit for various reasons. (Rationale: the
decedent intended to give the property to nobody
Succession but the co-heirs.)

There can only be accretion if there is an


A. RIGHT OF ACCRETION institution of heirs with respect to specific
DEFINITION OF ACCRETION [Art. 1015, CC] properties. [Art. 1016, CC]
It is a right by virtue of which, when two or more
persons are called to the same inheritance, devise
Among compulsory heirs, there can only be
or legacy, the part assigned to one who
accretion with respect to the free portion. There
renounces or cannot receive his share or who died
can be no accretion with respect to the legitimes.
before the testator is added or incorporated to
[Arts. 1021 and 1018, CC]
that of his co-heirs, co-devisees, or co-legatees.

The heirs to whom the portion goes by the right of


Basis accretion take it in the same proportion that they
The right of accretion is based upon the inherit. [Art. 1019, CC]
presumed will of the decedent. Thus, the testator
can expressly provide that there shall be no Exceptions [Balane]
accretion among persons who would otherwise (1) In testamentary succession, if the testator
be entitled thereto. Conversely, the testator may provides otherwise
validly provide for accretion in a case where no (2) If the obligation is purely personal, and hence
accretion would take place under the provisions intransmissible
of the law. [Tolentino]
The heirs to whom the inheritance accrues shall
succeed to all the rights and obligations which
REQUISITES [Tolentino p. 497-499] the heir who renounced or could not receive it
would have had. [Art. 1020, CC]
(a) Unity of object and plurality of subjects (two
or more persons are called to the same
In testamentary succession, when the right of
inheritance or same portion thereof)
accretion does not take place, the vacant portion
of the instituted heirs, if no substitute has been
designated, shall pass to the legal heirs of the
(b) Vacancy of share (one of the heirs dies before
testator, who shall receive it with the same
the testator, or renounces the inheritance, or
charges and obligations. [Art. 1022, CC]
is incapacitated)
Accretion shall also take place among devisees,
When does Accretion Occur? legatees and usufructuaries under the same
conditions established for heirs. [Art. 1023, CC]
Accretion happens when there is repudiation,
incapacity, or predecease of an heir. (RIP) Note: There can be accretion only when there is
no representation, because when there is
representation, by legal fiction, it cannot be said
that there is a vacant portion. [Tolentino]

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Effect of Predecease, Incapacity, Disinheritance or Repudiation


Cause of Vacancy Testamentary Succession
Intestate Succession
Legitime Free Portion

Predecease Representation Accretion Representation


Intestate Succession Intestate Succession Intestate
Succession

Incapacity Representation Accretion Representation


Intestate Succession Intestate Succession Intestate Succession

Disinheritance Representation - -
Intestate Succession

Repudiation Intestate Succession Accretion Accretion

B. CAPACITY TO SUCCEED BY WILL OR before the final accounts of the


INTESTACY guardianship have been approved, even if
the testator should die after the approval
thereof; except if the guardian is his
REQUISITES FOR CAPACITY TO SUCCEED ascendant, descendant, brother, sister, or
BY WILL OR BY INTESTACY: [Art. 1024 – 1025, spouse;
CC] (4) Relatives of the priest or minister of the
(a) The heir, legatee or devisee must be gospel within the fourth degree, the
living or in existence at the moment the church, order, chapter, community,
succession opens; [Art 1025] and organization, or institution to which such
priest or minister may belong;
(5) Attesting witness to the execution of a
(b) He must not be incapacitated or will, the spouse, parents, or children, or
disqualified by law to succeed. [Art 1024, any one claiming under such witness,
par.1] spouse, parents, or children;
(6) Physician, surgeon, nurse, health officer
PERSONS INCAPABLE OF SUCCEEDING [Arts. or druggist who took care of the testator
1027, 739, 1032] during his last illness.

Based on undue influence or interest [Art.


1027, CC] Based on morality or public policy [Arts. 739
(1) Priest who heard the last confession of and 1028, CC]
the testator during his last illness, or the (1) Those made in favor of a person with
minister of the gospel who extended whom the testator was guilty of adultery
spiritual aid to him during the same or concubinage at the time of the making
period; of the will.
(2) Individuals, associations and corporations (2) Those made in consideration of a crime of
not permitted by law to inherit; which both the testator and the
beneficiary have been found guilty.
(3) Guardian with respect to testamentary
dispositions given by a ward in his favor

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(3) Those made in favor of a public officer or writing in which the unworthy heir with
his spouse, descendants and ascendants, decedent condones knowledge of the
by reason of his public office. the cause of cause of incapacity
incapacity

Based on acts of unworthiness [Art. 1032, CC] Cannot be revoked Revoked when the
The following are incapable of succeeding by testator revokes the
reason of unworthiness: will or the institution
(1) Parents who have abandoned their
children or induced their daughters to
lead a corrupt or immoral life, or Effect of Pardon
attempted against their virtue; Once the act of unworthiness has been
(2) Any person who has been convicted of an pardoned, whether expressly or tacitly, the
attempt against the life of the testator, heir is restored to full capacity to succeed the
his or her spouse, descendants, or decedent, as if the cause of unworthiness had
ascendants; never existed.
(3) Any person who has accused the testator
of a crime for which the law prescribes
imprisonment for six years or more, if the
accusation has been found groundless; Unworthiness vs. Disinheritance
Unworthiness Disinheritance
(4) Any heir of full age who, having
knowledge of the violent death of the Unworthiness renders Disinheritance is the
testator, should fail to report it to an a person incapable of act by which a
officer of the law within a month, unless succeeding to the testator, for just
the authorities have already taken action; succession, whether cause, deprives a
this prohibition shall not apply to cases testate or intestate compulsory heir of his
wherein, according to law, there is no right to the legitime
obligation to make an accusation; [Art. 815, CC]
(5) Any person convicted of adultery or
concubinage with the spouse of the
testator; Determination of Capacity [Tolentino p. 539]
(6) Any person who by fraud, violence, General Rule: At the death of the decedent
intimidation, or undue influence should [Art. 1034, CC]
cause the testator to make a will or to
change one already made;
Exceptions:
(7) Any person who by the same means
prevents another from making a will, or (1) Those falling under 2, 3, and 5 of Art.
from revoking one already made, or who 1032 – when the final judgment is
supplants, conceals, or alters the latter's rendered
will; (2) Those falling under 4 of Art. 1032 – when
the month allowed for the report expired
(8) Any person who falsifies or forges a (3) If the institution is conditional – when the
supposed will of the decedent. condition is complied with
Pardon of Acts of Unworthiness
C. ACCEPTANCE AND REPUDIATION
Express Implied
OF THE INHERITANCE
Made by the Effected when the
execution of a testator makes a will
document or any instituting the Definition of Acceptance

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The act by which the person called to succeed court having jurisdiction whether they
by universal title either by the testator or by accept or repudiate the inheritance; if
law manifests his will of making his own the they do not do so within that time, they
universality of the rights and obligations are deemed to have accepted the
which are transmitted to him. [Tolentino] inheritance. [Art 1057, CC]

An inheritance is deemed accepted:


Definition of Repudiation
The manifestation by an heir of his desire not (a) If the heir sells, donates, or assigns
to succeed to the rights and obligations his right to a stranger, or to his co-
transmitted to him. [Tolentino] heirs, or to any of them – the heir
must first accept the inheritance
before he can dispose of it.
CHARACTERISTICS [Arts. 1041–1042, 1056,
CC] (b) If the heir renounces the same, even
though gratuitously, for the benefit of
(1) Acceptance and repudiation must be
one or more of his co-heirs – this is
voluntary and free [Art. 1041, CC]
actually a donation. The heir must
first accept the inheritance before he
(2) They are irrevocable except if there is can donate it.
vitiation of consent or an unknown will
appears [Art. 1056, CC] (c) If the heir renounces it for a price in
favor of all his co-heirs
indiscriminately – this is actually an
(3) They have a retroactive effect [Art. 1042, onerous disposition. The heir must
CC] first accept the inheritance before he
can dispose of it.

REQUISITES [Art. 1043, CC] Note: But if the renunciation should be


(a) Certainty of death of the decedent gratuitous, and in favor of all the co-heirs (to
whom the portion renounced should devolve
(b) Certainty of the right to the inheritance by accretion), the inheritance shall not be
deemed as accepted. [Art. 1050] This is a
true case of renunciation.
FORMS OF ACCEPTANCE [Arts. 1049 – 1050,
CC]
(1) Express Acceptance – one made in a FORMS OF REPUDIATION [Art. 1051, CC]
public or private document. [Art. 1049 par. (1) In a public instrument acknowledged
1] before a notary public; or
(2) In an authentic document – equivalent of
(2) Tacit Acceptance – one resulting from an indubitable writing or a writing whose
acts by which the intention to accept is authenticity is admitted or proved; or
necessarily implied or from acts which (3) By petition presented to the court having
one would have no right to do except in jurisdiction over the testamentary or
the capacity of an heir. intestate proceeding

(3) Implied Acceptance - Within thirty days HEIRS IN TWO CAPACITIES [Art. 1055, CC]
after the court has issued an order for the
distribution of the estate in accordance (1) If a person is called to the same
with the Rules of Court, the heirs, inheritance as an heir by will and by law
devisees and legatees shall signify to the and he repudiates the inheritance in his
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capacity as a testamentary heir, he will be Rationale for collation: If donations inter vivos
considered to have also repudiated the will not be collated, then the rule on
inheritance as a legal heir. legitimes shall be circumvented or
disregarded.

(2) If he repudiates it as a legal heir, without


knowledge of his being a testamentary Operations Related to Collation
heir, he may still accept it in the latter (1) Collation – adding to the mass of the
capacity. hereditary estate the value of the
donation or gratuitous disposition.
(2) Imputing or Charging – crediting the
IRREVOCABILITY OF ACCEPTANCE OR
donation as an advance on the legitime (if
REPUDIATION
the donee is a compulsory heir) or on the
General Rule: The acceptance or repudiation free portion (if the donee is a stranger, i.e.,
of an inheritance, once made, is irrevocable not a compulsory heir). [Balane, p. 522]
and cannot be impugned.
(3) Reduction – determining to what extent
the donation will remain and to what
extent it is excessive or inofficious.
Exceptions:
(4) Restitution – returning or the act of
(1) When the acceptance or repudiation
payment of the excess to the mass of
suffers from any of the vices which annul
hereditary estate.
consent; and
(2) When an unknown will appears. [Art.
1056, CC]
Persons Obliged to Collate
General rule: Compulsory heirs
D. COLLATION Exceptions:
(1) When the testator should have so
Concept of Collation expressly provided [Art. 1062, CC]
To collate is to bring back or to return to the (2) When the compulsory heir should have
hereditary mass in fact or by fiction property
repudiated his inheritance [Art. 1062, CC]
which came from the estate of the decedent,
during his lifetime by donation or other
gratuitous title but which the law considers Grandchildren who survive with their uncles,
as an advance from the inheritance. [Art. 1061, aunts, or first cousins and inherit by right of
CC] representation [Art. 1064, CC]

It is the act by virtue of which, the compulsory Note: Grandchildren may inherit from their
heir who concurs with other compulsory heirs grandparents in their own right, i.e., as heirs
in the inheritance brings back to the common next in degree, and not by right of
hereditary mass the property which they may representation if their parent repudiates the
have received from the testator so that a inheritance of the grandparent, as no living
division may be effected according to law and person can be represented except in cases of
the will of the testator. disinheritance and incapacity. In this case,
the grandchildren are not obliged to bring to
collation what their parent has received
In reducing inofficious donations, the last to gratuitously from their grandparent.
be donated should be the first to be reduced.

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What to Collate spouses jointly, the child shall be obliged


(1) Any property or right received by to bring to collation one-half of the thing
gratuitous title during the testator’s donated. [Art. 1066, CC]
lifetime [Art. 1061, CC]
Note: Parents are not obliged to bring to
(2) All that they may have received from the collation in the inheritance of their
decedent during his lifetime. [Art. 1061, ascendants any property which may have
CC] been donated by the latter to their children.
[Art. 1065, CC]
(3) Expenses incurred by the parents in
giving their children a professional,
vocational or other career shall not be
brought to collation unless the parents so E. PARTITION AND DISTRIBUTION OF
provide, or unless they impair the ESTATE
legitime; but when their collation is
required, the sum which the child would
have spent if he had lived in the house E.1. IN GENERAL
and company of his parents shall be Separate, Divide, Assign. Partition is the
deducted therefrom. [Art. 1068, CC] separation, division and assignment of a
(4) Any sums paid by a parent in satisfaction thing held in common among those to whom
of the debts of his children, election it may belong. The thing itself or its value
expenses, fines, and similar expenses may be divided. [Art. 1079, CC]
shall be brought to collation. [Art. 1069,
CC] Owned in common. Before partition, the
whole estate of the decedent is owned in
common by the heirs. [Art. 1078, CC]
Note: Only the value of the thing donated
shall be brought to collation. Thing or value may be divided. [Art. 1079]

Acts deemed partition. Every act which is


PROPERTIES NOT SUBJECT TO COLLATION intended to put an end to indivision among
Absolutely no collation heirs and legatees or devisees is deemed a
Expenses for support, education (only partition, although it should purport to be a
elementary and secondary), medical sale, an exchange, a compromise, or any
attendance, even in extraordinary illness, other transaction. [Art. 1082, CC]
apprenticeship, ordinary equipment, or
customary gifts [Art. 1067, CC] A void partition may be valid if:
(1) The will was in fact a partition
Generally not imputable to legitime/ cannot (2) The beneficiaries of the void will were
be collated, subject to exceptions legal heirs
(1) Expenses incurred by parents in giving
their children professional, vocational or
other career unless the parents so provide, The titles of acquisition or ownership of each
or unless they impair the legitime. [Art. property shall be delivered to the co-heir to
1067, CC] whom said property has been adjudicated.
(2) Wedding gifts by parents and ascendants, [Art. 1089, CC]
consisting jewelry, clothing and outfit,
except when they exceed 1/10 of the sum JUDICIAL vs. EXTRAJUDICIAL PARTITION
disposable by will. [Art. 1070, CC] Judicial – Partition done by Court pursuant to
an Order of Distribution which may or may
(3) Neither shall donations to the spouse of not be based on a project of partition.
the child be brought to collation; but if
they have been given by the parent to the
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Extra-judicial – partition made by the (3) Even if a prohibition is imposed, the heirs
decedent himself by an act inter vivos or by by mutual agreement can still make the
will or by a third person entrusted by the partition.
decedent or by the heirs themselves. [Paras]
• Partition Inter Vivos: It is one that merely
allocates specific items or pieces of Effects of Inclusion of Intruder in Partition [Art.
property on the basis of the pro-indiviso 1108, CC]
shares fixed by law or given under the will (1) Between a true heir and several mistaken
to heirs or successors. [Art. 1080, CC] heirs – partition is void.
(2) Between several true heirs and a
Who May Effect Partition mistaken heir – transmission to mistaken
heir is void
(1) The Decedent, during his lifetime by an
act inter vivos or by will [Art.1080, CC] (1) Through error or mistake, share of true
heir is allotted to mistaken heir –
(2) The decedent’s heirs [Art.1083, CC] partition shall not be rescinded unless
(3) A competent court [Art. 1083,CC] there is bad faith or fraud on the part of
the other persons interested, but the
(4) A third person not an heir designated by latter shall be proportionately obliged to
the decedent [Art.1081, CC] pay the true heir of his share. The
partition with respect to the mistaken heir
Who Can Demand Partition is void. [Sempio-Dy]
(1) Compulsory heir
(2) Voluntary heir upon fulfillment of Right of Redemption in Partition
condition if any [Art. 1084, CC]
(3) Legatee or devisee Should any of the heirs sell his hereditary
(4) Any person who has acquired interest in rights to a stranger before the partition, any
the estate or all of the co-heirs may be subrogated to
the rights of the purchaser by reimbursing
him for the price of the sale, provided they do
When Partition Cannot Be Demanded so within the period of one month from the
(1) When expressly prohibited by the testator time they were notified in writing of the sale
for a period not exceeding 20 years [Art. by the vendor [Art. 1088, CC]
1083, CC]
Strangers – those who are not heirs on the
(2) When the co-heirs agreed that the estate succession.
shall not be divided for a period not
exceeding 10 years, renewable for Legal Redemption by Co-Heir; Requisites:
another 10 years [Art. 494, CC]
(a) That there are several heirs of the
(3) When prohibited by law common inheritance;
(4) When to partition the estate would render (b) That one of them sells his hereditary
it unserviceable for the use for which it is rights;
intended
(c) That the sale is made to a stranger, and
before the partition has been made;
Prohibition to Partition (d) That one or more of the co-heirs demand
(1) The prohibition to partition for a period the repurchase within a period of one
not exceeding 20 years can be imposed month, counted from the time he or they
even on the legitime. were notified in writing of the sale; and
(2) If the prohibition to the partition is for (e) That the buyer is reimbursed the price of
more than 20 years, the excess is void. the sale. [Garcia v. Calaliman]
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Note: The redemption can be exercised only If a credit should be assigned as collectible,
by a co-heir. the co-heirs shall not be liable for the
subsequent insolvency of the debtor of the
estate, but only for his insolvency at the time
E.2. EFFECTS OF PARTITION the partition is made. [Art. 1095, CC]
Effect
The warranty of the solvency of the debtor
A partition legally made confers upon each can only be enforced during the five years
heir the exclusive ownership of the property following the partition.
adjudicated to him [Art. 1091, CC]
Co-heirs do not warrant bad debts, if so
known to, and accepted by the distributee.
No partition shall be construed so as to
prejudice, defeat, or destroy the right or title But if such debts are not assigned to a co-heir,
of any person claiming the real estate and should be collected, in whole or in part,
involved in the action for partition by title the amount collected shall be distributed
under any other person, or by title paramount proportionately among the heirs. [Art. 1095,
to the title of the parties among whom the CC]
partition may have been made. [Rule 69, Sec.
12, ROC]
End of Warranty
The obligation of warranty among co-heirs
A judicial partition in probate proceedings shall cease in the following cases:
does not bind the heirs who were not parties
thereto. [Tolentino]
(1) The testator himself has made the
partition
Warranty • Unless it appears, or it may be
After the partition has been made, the co- reasonably presumed, that his intention
heirs shall be reciprocally bound to warrant was otherwise, but the legitime shall
the title to, and the quality of, each property always remain unimpaired.
adjudicated [Art. 1092, CC]
(2) When it has been so expressly stipulated
The reciprocal obligation of warranty shall be in the agreement of partition
proportionate to the respective hereditary • Unless there has been bad faith
shares of the co-heirs.
(3) When the eviction is due to a cause
If any one of them should be insolvent, the subsequent to the partition, or has been
other co-heirs shall be liable for his part in caused by the fault of the distributee of
the same proportion, deducting the part the property. [Art. 1096, CC]
corresponding to the one who should be
indemnified. E.3. RESCISSION AND NULLIFICATION OF
PARTITION
Those who pay for the insolvent heir shall
have a right of action against him for Causes for Rescission or Annulment
reimbursement, should his financial condition (1) A partition may be rescinded or annulled
improve [Art. 1093, CC] for the same causes as contracts. [Art.
1097, CC]
An action to enforce the warranty among the
co-heirs must be brought within ten years (2) A partition, judicial or extra-judicial, may
from the date the right of action accrues. [Art. also be rescinded on account of lesion,
1094, CC] when any one of the co-heirs received
things whose value is less by at least one-

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fourth, than the share to which he is


entitled, considering the value of the
An heir who has alienated the whole or a
things at the time they were adjudicated
considerable part of the real property
[Art. 1098, CC]
adjudicated to him cannot maintain an action
• This article applies only to cases of for rescission on the ground of lesion, but he
partition among-coheirs shall have a right to be indemnified in cash
• Lesion is the injury suffered in [Art. 1102, CC]
consequence of inequality of situation
by one party who does not receive the
full equivalent for what she gives in a The omission of one or more objects or
sale or any commutative contract securities of the inheritance shall not cause
the rescission of the partition on the ground
(3) The partition made by the testator cannot of lesion, but the partition shall be completed
be impugned on the ground of lesion, by the distribution of the objects or securities
except when the legitime of the which have been omitted. [Art. 1103, CC]
compulsory heirs is thereby prejudiced, or
when it appears or may be reasonably be
presumed, that the intention of the Difference of Nullity from Rescission
testator was otherwise. [Art. 1099, CC] Nullity – the act is supposed to never have
existed
(4) Preterition of a compulsory heir in the
partition [Art. 1104, CC]: Rescission – the act is valid at the origin
• Partition shall not be rescinded unless though it afterwards became ineffective
bad faith or fraud on the part of other
heirs is proved.
• The culpable heirs shall share in the
damages of the prejudiced compulsory
heir proportionately.

(5) A partition which includes a person


believed to be an heir, but who is not,
shall be void only with respect to such
person. [Art. 1105, CC]

The action for rescission on account of lesion


shall prescribe after four years from the time
the partition was made. [Art. 1100, CC]

The heir who is sued shall have the option of


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

Indemnity may be made:


(1) By payment in cash or
(2) By the delivery of a thing of the same kind
and quality as that awarded to the
plaintiff.

If a new partition is made, it shall affect


neither those who have not been prejudiced
nor those who have not received more than
their just share [Art. 1101, CC]
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Important Periods in Partition distribution


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

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CIVIL LAW
AGENCY

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A.3. BEING A CONTRACT, IT MUST ALSO


I. Definition of Agency COMPLY WITH ART. 1318
A. AS A TYPE OF CONTRACT (1) Consent: But the legal relationship may
Art 1868. By the contract of agency, a person still arise even without consent
binds himself to render some service or to do (2) Object: The performance of acts by the
something in representation or on behalf of agent in representation of the principal
another, with the consent or authority of the
(3) Cause: it is presumed to be for
latter.
compensation

A.1. ELEMENTS (STATUTORY):


B. AS A LEGAL RELATIONSHIP
(1) A person must bind himself to render
some service or to do something It is possible for an agency to arise even
without a contract. In such cases, an agency
(2) in representation or on behalf of another is more properly described as a legal
person; and relationship.
(3) With the consent or authority of the latter It is (a relationship) whereby one party, called
the principal, authorizes another, called the
agent, to act for and in his behalf in
A.2. ELEMENTS (JURISPRUDENTIAL) transactions with third persons. [Rallos v.
(1) There is consent, express or implied, of Felix Go Chan, G.R. No. L-24332 (1978)]
the parties to establish the relationship;
(2) The object is the execution of a juridical C. EFFECTS OF AGENCY
act in relation to a third person;
• Integration (merger) of the personality of
(3) The agent acts as a representative and the principal into that of the agent
not for himself; and
• Extension (reproduction) of the
(4) The agent acts within the scope of his personality of the principal through the
authority agent
• Consequences:
Note: the first two elements reflect the
a) Merger: In an agency relationship, the
elements given by Article 1868, while the last
agent, by legal fiction, becomes the
two elements merely limit the acts of the
principal, authorized to perform all
agent, i.e. violation of these elements does
acts which the latter would have him
not mean that no agency was created.
do. [Orient Air Services v. CA, G.R. No.
On the part of the principal, there must be an 76931 (1991)]
actual intention to appoint or an intention
b) Agent is not a real party in interest:
naturally inferable from his words or actions;
The agent is not a party to the
and on the part of the agent there must be an
contract between the principal and
intention to accept the appointment and act
the third person. He is not a real party
on it, and in the absence of such intent, there
in interest and cannot therefore sue
is generally no agency. [Victorias Milling v. CA,
in his own behalf on a contract for his
G.R. No. 117356 (2000)]
principal, except if he is an assignee
Mere closeness of relationship is not of such contract. [Uy and Roxas v. CA,
tantamount to an agency relationship. [Apex G.R. No. 120465 (1999)]
v. Southeast Mindanao Mining, G.R. Nos.
c) Imputed Knowledge: Knowledge of
152613 & 152628 (2006)]
facts acquired or possessed by an
officer or agent of a corporation in the
course of his employment, and in
relation to matters within the scope
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of his authority, is notice to the


corporation, whether he II. Kinds of Agency
communicates such knowledge or not. A. IN GENERAL
[Francisco v. GSIS, G.R. No. L-18287
(1963)] AS TO MANNER OF CREATION:
The theory of imputed knowledge (1) Express;
ascribes knowledge of the agent to (2) Implied
the principal, not the other way
around. [Sunace International v. NLRC,
G.R. No. 161757 (2006)] AS TO CAUSE OR CONSIDERATION:
• Gratuitous;
General rule is that : Notice to the
• Compensated or onerous.
agent constitutes notice to the
principal [Air France v. CA (1983)].
Thus, knowledge of or notice to his
Note: Agency is presumed to be for a
agent, received while the latter was
compensation, unless there is proof to the
acting as such. [Rovels Enterprises v.
contrary [Art. 1875].
Ocampo (2002)].
Requisites:
AS TO THE EXTENT OF BUSINESS
1. Actual notice to the agent;
COVERED:
2. Notice must pertain to a matter of
(1) General
fact and not of law;

(2) Special
3. The fact must be within the scope
of the agent’s authority. To be a General Agent, it is sufficient that the
listed authorized transactions apparently
cover all that is required to run the business
Exceptions: of the principal. It is not necessary that the
power granted actually says “all the business
1. Where the agent’s interests are of the principal.” [Dominion Insurance v. CA,
adverse to those of the principal; G.R. No. 129919 (2002)]
2. Where the agent’s duty is not to
disclose the 
information (e.g., he
is informed by way of confidential AS TO THE AUTHORITY CONFERRED:
information); • Couched in general terms;
3. Where the person claiming the • Couched in specific terms.
benefit of the rule colludes with
the agent to defraud the principal
[De Leon (2010)]. 
 AS TO NATURE AND EFFECT:
(1) Ostensible or representative, where the
• Bad faith of the Agent is Bad faith of the agent acts in the name and
Principal [Caram v. Laureta, G.R. No. representation of the principal [Art.
72194 (1990)] 1868];
(2) Simple or commission, where the agent
acts in his own name but for the account
of the principal.

AS TO THE KINDS OF PRINCIPAL:

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(1) With a disclosed principal, where, at the (1) The alleged principal should be aware of
time the transaction was contracted by the acts of the alleged agent
the agent, the other party thereto was
(2) The alleged principal has had reasonable
known:
opportunity under the circumstances to
a. that the agent was acting for a repudiate the acts of the alleged agent
principal; and
(3) A third party has transacted with the
b. the principal’s identity; alleged agent without being made aware
of the alleged agent’s lack of authority
(2) Partially disclosed, where the other party
knows or has reason to know that the (4) There were no facts or circumstances
agent is or may be acting for a principal which may raise any suspicion on the part
but is unaware of the principal’s identity; of the third person that the agent was not
authorized
(3) Undisclosed, where the party has no
notice of the fact that the agent is acting
as such for a principal
Where no third party was prejudiced, and it
was emphasized in no uncertain terms to the
alleged agent that no agency exists
B. AS TO MANNER OF CREATION (therefore both principal and agent knew that
Art. 1869. Agency may be express, or implied the agent had no authority) then Art 1869 has
from the acts of the principal, from his silence no room for operation. [Uniland Resources v.
or lack of action, or his failure to repudiate DBP, G.R. No. 95909 (1991)]
the agency, knowing that another person is
acting on his behalf without authority.
B.2.B ACTS OF THE AGENT
Agency may be oral, unless the law requires a
specific form. Acceptance of the agent may be implied from
(1) His acts which carry out the agency
B.1 EXPRESS AGENCY (2) His silence or inaction if the agent does
not inform the principal of his rejection of
An express agency is one where the agent has the agency relationship:
been actually authorized by the principal,
either: a. Within a reasonable amount of
time under the circumstances
(1) Orally; or
b. Prior to the principal suffering
(2) In writing[Art.1869]. damage as a result of the delay
on the part of the agent in
informing the principal of his
B.2 IMPLIED AGENCY rejection of the agency
Art. 1870. Acceptance by the agent may also relationship [Casis (2011)]
be express, or implied from his acts which
carry out the agency, or from his silence or
inaction according to the circumstances. Art. 1871. Between persons who are present,
the acceptance of the agency may also be
implied if the principal delivers his power of
B.2.A ACTS OF THE PRINCIPAL attorney to the agent and the latter receives it
without any objection.
The act of the principal which constitutes
consent may be in the form of silence, lack of
action, or failure to repudiate the agency
knowing that another person is acting on his
behalf without authority. [See Art 1869] Art. 1872. Between persons who are absent,
the acceptance of the agency cannot be
Requisites: implied from the silence of the agent, except:
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(3) When the principal transmits his power of Scope of Authority


attorney to the agent, who receives it
without any objection; All acts connected with Only authorized acts or
the business or those necessarily
(4) When the principal entrusts to him by
employment in which implied
letter or telegram a power of attorney
agent is engaged
with respect to the business in which he is
habitually engaged as an agent, and he Nature of Service Authorized
did not reply to the letter or telegram.
Involves continuous Usually involves a
service single transaction

• Conditions for Applicability of Art. 1871 Authority to Bind


(a) The principal delivers his power of Acts within the scope of Acts beyond authority
attorney to the agent authority, even in given cannot bind
(b) The agent personally receives it conflict with special principal
without any objection, and instructions, may bind
principal
(c) The agent must be aware of the
contents of the document containing Termination of Authority
the powers of attorney [Casis (2011)
Notice to third persons No notice required,
required to terminate since third parties are
(1) Conditions for Applicability of Art. 1872(1) apparent authority required to inquire as
• The principal transmits the power of to authority
attorney Instructions
(a) It is received by the agent without any
objection. Notice to third persons The instructions, in so
required far as they grant
authority, are strictly
(2) Conditions for Applicability of Art. 1872(2) construed
(a) The principal entrusts the power of
attorney by letter or telegram
D. AS TO AUTHORITY CONFERRED
(b) The power of attorney pertains to a
business that the agent is habitually D.1 COUCHED IN GENERAL TERMS
engaged in, and An agency couched in general terms is one
(c) The agent did not reply created in general terms and is deemed to
comprise only acts of administration, even if:
(1) The principal should state that he
C. AS TO EXTENT OF BUSINESS withholds no power;
COVERED (2) He should state that the agent may
(1) General agency comprises all the execute such acts as he may consider
business of the principal. appropriate; or
(2) Special agency comprises one or more (3) Even though the agency should authorize
specific transactions [Art. 1876]. a general and unlimited management
[Art. 1877].

General Agency Special Agency


D.2 COUCHED IN SPECIFIC TERMS
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An agency couched in specific terms powers and duties are excluded. [BPI v. De
authorizes only the performance of specific Coster, G.R. No. L-23181 (1925)]
acts. Certain specific acts, however, require
special powers of attorney.
Article 1878. Special powers of attorney are
A special power of attorney is an instrument
necessary in the following cases:
in writing by which one person, as principal,
appoints another as his agent and confers (1) To make such payments as are not usually
upon him the authority to perform certain considered as acts of administration;
specified acts or kinds of acts on behalf of the
(2) To effect novations which put an end to
principal.
obligations already in existence at the time
the agency was constituted;
D.2.A EFFECT OF ABSENCE OF SPECIFIC (3) To compromise, to submit questions to
AUTHORITY arbitration, to renounce the right to appeal
from a judgment, to waive objections to the
IN GENERAL
venue of an action or to abandon a
If an agent performs a transaction under Art prescription already acquired;
1878 without specific authority therefor, the
(4) To waive any obligation gratuitously;
transaction is unenforceable. However, the
agent can still seek the principal’s ratification. (5) To enter into any contract by which the
[Dungo v. Lopena, G.R. No. L-18377 (1962)] ownership of an immovable is transmitted or
acquired either gratuitously or for a valuable
consideration;
SALE OF LAND OR ANY INTEREST THEREIN
(6) To make gifts, except customary ones for
Art. 1874. When a sale of a piece of land or charity or those made to employees in the
any interest therein is through an agent, the business managed by the agent;
authority of the latter shall be in writing;
(7) To loan or borrow money, unless the latter
otherwise, the sale shall be void.
act be urgent and indispensable for the
Requirements: preservation of the things which are under
administration;
The authorization must be
(8) To lease any real property to another
(1) Written, and
person for more than one year;
(2) Specific
(9) To bind the principal to render some
service without compensation;
Only specific authorization is required (and it (10) To bind the principal in a contract of
need not be written): partnership;
(1) If the contract is a sale of an immovable (11) To obligate the principal as a guarantor or
other than land surety;
(2) If the contract transmits ownership over (12) To create or convey real rights over
an immovable other than land immovable property;
(3) If the contract transmits ownership over (13) To accept or repudiate an inheritance;
land through a transaction other than a
(14) To ratify or recognize obligations
sale
contracted before the agency;
(15) Any other act of strict dominion.
EFFECT OF SPECIFIC AUTHORIZATION
Where an instrument specifies and defines
The requirement of special power of attorney
powers and duties, all such powers and
refers to the nature of the authorization, not
duties are limited and confined to those
to its form. Thus, even if a document is titled
which are specified and defined, and all other
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as a general power of attorney, the


requirement of a special power of attorney is
E.1.A.2. HOW RESCINDED
met if there is a clear mandate from the
principal specifically authorizing the Art. 1873 par.2. The power shall continue to
performance of the act [Bravo-Guerrero v. be in full force until the notice is rescinded in
Bravo (2005)]. the same manner in which it was given.
A special power of attorney can be included
in the general power when it is specified
This is agency by estoppel because no
therein the act or transaction for which the
acceptance by the agent is required.
special power is required [Veloso v. CA
(1996)]. By remaining silent and thereby clothing the
alleged agent with authority, the alleged
A SPOA may be oral or written, but if it is oral,
principal is barred from questioning the
it must be duly established by evidence. [Lim
alleged agent’s authority. [Pahud v. CA, G.R.
Pin v. Liao Tan, G.R. No. L-47740 (1982)]
No. 160346 (2009), applying estoppel in
general]
Art. 1879. A special power to sell excludes the
power to mortgage; and a special power to
E.B. BASED ON JURISPRUDENCE –
mortgage does not include the power to sell.
REQUISITES
(1) The principal manifested a representation
Art. 1880. A special power to compromise of the agent’s authority or knowingly
does not authorize submission to arbitration. allowed the agent to assume such
authority
(2) The third person, in good faith, relied
E. SPECIAL KINDS OF AGENCY upon such representation
E.1 AGENCY BY ESTOPPEL (3) Relying upon such representation, such
E.1.A. BASED ON STATUTE third person has changed his position to
his detriment.
Art. 1873 par.1. If a person specially informs
another or states by public advertisement
that he has given a power of attorney to a Agency by estoppel is similar to the doctrine
third person, the latter thereby becomes a of apparent authority. It requires proof of
duly authorized agent, in the former case reliance upon the representation and that the
with respect to the person who received the representation predated the action which
special information, and in the latter case relied on the representation. [Litonjua v.
with regard to any person. Eternit, G.R. No. 144805 (2006)]

E.1.A.1. TWO MODES As to liability, implied agency and agency by


(1) Specific Information estoppel are different in that, in the former,
the principal is liable, while in the latter, the
If a person specially informs another that he person who acts in bad faith is liable.
has given a power of attorney to a third
person, then that third person becomes his
agent with respect to the person who Article 1911 states that: “Even when the agent
received the special information. has exceeded his authority, the principal is
(2) Public Advertisement solidarily liable with the agent if the former
allowed the latter to act as though he had full
If a person states by public advertisement powers.” In this case, there is a duly formed
that he has given a power of attorney to a agency and estoppel only applies to the
third person, then that third person becomes excess of authority. This is an application of
his agent with respect to any person. the doctrine of apparent authority.
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as one between the principal and the third


person.
The doctrine of apparent authority is to the
effect that: One who clothes another with Qualification: The exception only
apparent authority as his agent, and holds applies if the agent contracts with the
him out to the public as such, cannot be properties of the principal within the
permitted to deny the authority of such scope of his authority [PNB v. Agudelo
person to act as his agent, to the prejudice of (1933)].
innocent third parties dealing with such
person in good faith.
Under the doctrine of apparent authority, the E.3 AGENCY BY OPERATION OF LAW
question in every case is whether the General Rule: Normally, an agency is
principal has, by his voluntary act, placed the established only if there is mutual intent on
agent in such a situation that a person of the part of the principal and agent to
ordinary prudence, conversant with business establish the agency. [Victorias Milling v. CA,
usages and the nature of the particular G.R. No. 117356 (2000)]
business, is justified in presuming that such
Exceptions:
agent has authority to perform the particular
act in question [Professional Services v. An agency may be established by operation
Agana (2008)]. of law, however, in the following cases:
(1) In a partnership, every partner is an agent
of the partnership for the purpose of its
Ratification Estoppel business [Art. 1818];
Rests on intention Rests on prejudice (2) Agency by estoppel (both statutory and
jurisprudential), where the principal’s
Retroacts as if Affects only relevant actions would reasonably lead a third
originally authorized parts of the person to conclude that an agency exists;
transaction
(3) In case of certain necessity or emergency,
Substance is Substance is the an agency by necessity may arise. [De
confirmation of principal’s Leon]
unauthorized acts inducement for third
party to act to his
prejudice E.4 IRREVOCABLE AGENCY
Article 1927 (on agency coupled with an
E.2 AGENCY WITH UNDISCLOSED interest) mentions three instances where the
PRINCIPAL sole will of the principal cannot terminate an
agency:
General Rule: If an agent acts in his own
name (the principal is undisclosed), the agent (1) A bilateral contract depends upon it;
is directly bound in favor of the person with (2) It is the means of fulfilling an obligation
whom he has contracted as if the transaction already contracted; or
were his own.
(3) A partner is appointed manager of a
Ratio: There is no representation of the partnership in the contract of partnership
principal when the agent acts in his own and his removal from the management is
name. The third person cannot allege that he unjustifiable.
was misled by any representation since he did
not know of the existence of the undisclosed Qualifications:
principal. (1) Coupled with interest or not, the authority
Exception: The principal is bound when the certainly can be revoked for a just cause,
contract involves things belonging to him [Art. such as when the attorney-in-fact betrays
1883]. In this case, the contract is considered the interest of the principal. It is not open
to serious doubt that the irrevocability of
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the power of attorney may not be used to


shield the perpetration of acts in bad
Attorneys have authority to bind their clients
faith, breach of confidence, or betrayal of
in any case by any agreement in relation
trust, by the agent for that would amount
thereto made in writing, and in taking
to holding that a power coupled with an
appeals, and in all matters of ordinary judicial
interest authorizes the agent to commit
procedure. But they cannot, without special
frauds against the principal [Coleongco v.
authority, compromise their client’s litigation,
Claparols (1964)].
or receive anything in discharge of a client’s
(2) A mere statement in the power of claim but the full amount in cash [Sec. 23,
attorney that it is coupled with an interest Rule 138, Rules of Court].
is not enough. In what does such interest
consist must be stated in the power of
attorney [Del Rosario v. Abad (1958)].
(3) An agency coupled with an interest
cannot affect third persons. They are
obligatory only on the principal who
executed the agency [New Manila Lumber
v. Republic (1960)].

F. KINDS OF AGENTS
F.1 AS TO NATURE AND EXTENT OF
AUTHORITY
According to the nature and extent of their
authority, agents have been classified into:
(1) Universal agents are authorized to do all
acts for his principal which can lawfully
be delegated to an agent. So far as such
a condition is possible, such an agent
may be said to have universal authority.
(2) General agents are authorized to do all
acts pertaining to a business of a certain
kind or at a particular place, or all acts
pertaining to a business of a particular
class or series. He has usually authority
either expressly conferred in general
terms or in effect made general by the
usages, customs or nature of the business
which he is authorized to transact. An
agent, therefore, who is empowered to
transact all the business of his principal
of a particular kind or in a particular place,
would, for this reason, be ordinarily
deemed a general agent.
(3) Special agents are authorized to do some
particular act or to act upon some
particular occasion (i.e., acts usually in
accordance with specific instructions or
under limitations necessarily implied
from the nature of the act to be done)
[Siasat v. IAC (1985)]. 

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When there is a close, proximate and causal


III. Rights and connection between the agent’s efforts and
Obligations of the labor and the principal’s sale of his property,
the agent is entitled to commission. [Manotok
Agent Brothers v. CA]

A. RIGHTS OF AGENTS
A.1.C. FORFEITURE OF RIGHT TO
COMMISSION
A.1. COMPENSATION
An agent who takes a secret profit without
Art. 1875. Agency is presumed to be for a revealing the same to his principal is guilty of
compensation, unless there is proof to the a breach of his loyalty to the principal and
contrary. forfeits his right to collect the commission
from his principal, even if the principal does
not suffer any injury, or he obtained better
The principal must prove that the agency is results, or the agency is gratuitous, or that
not for a fee if he contests it. But in itself, usage or custom allows it. The rule is to
compensation is not an element of an agency prevent the possibility of any wrong, not to
contract. remedy an actual damage. [Domingo v.
Domingo, G.R. No. L-30573 (1971)]

Agent Broker
A.2. LEND MONEY TO / BORROW MONEY
Commission is Commission is earned FROM THE AGENCY
received upon the by merely bringing Art. 1890. If the agent has been empowered
successful conclusion the buyer and seller to borrow money, he may himself be the
of the sale together lender at the current rate of interest. If he has
been authorized to lend money at interest, he
cannot borrow it without the consent of the
A.1.A PROCURING CAUSE principal.
A procuring cause starts a series of events,
which, without break in their continuity, result
in the accomplishment of the prime objective (1) Borrow Money From
of the employment of the broker – a sale. Conditions:
[Philippine Health Care Providers v. Estrada,
G.R. 171052 (2008)] (a) The agent is empowered to borrow
money
The agent is entitled to commission even if
the (transaction) is consummated after the (b) The agent must borrow at the current
revocation of his authority, if the revocation rate of interest
was done in bad faith by the principal to
avoid payment of commission. [Infante v.
Cunanan] (2) Lend Money To
Conditions:
A.1.B TEST (a) The agent is authorized to lend
money at interest
Even if the agent is not the procuring cause of
the transaction, he may still be awarded a (b) The principal consents to such
sum of money if he is “somehow instrumental arrangement.
in bringing the parties together again and
finally consummating the transaction.” [Prats
v. CA] A.3. APPOINT A SUBSTITUTE
Art. 1892. The agent may appoint a substitute
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if the principal has not prohibited him from (a) The principal is aware that a
doing so; but he shall be responsible for the substitute is acting on his behalf
acts of the substitute: without authority yet he fails to
repudiate the substitute’s acts. There
(1) When he was not given the power to
may be implied agency.
appoint one
(b) The principal gives the agent the
(2) When he was given such power, but
power to appoint a substitute.
without designating the person, and the
person appointed was notoriously
incompetent or insolvent.
• The Substitute is an Alternate, not a
All acts of the substitute appointed against Delegate
the prohibition of the principal shall be void.
An agent cannot delegate to another the
same agency. Potestas delegate non delegare
potest. Re-delegation is detrimental to the
Art. 1893. In the cases mentioned in Nos.1 and
principal as the second agent has no privity of
2 of the preceding article, the principal may
contract with the principal... Article 1892
furthermore bring an action against the
allows the agent to appoint a substitute (not
substitute with respect to the obligations
a delegate). [Baltazar v. Ombudsman, G.R.
which the latter has contracted under the
No. 136433 (2006)]
substitution.

A.4. RETAIN IN PLEDGE THE OBJECTS OF


• When Allowed: when the principal does AGENCY
not prohibit it.
Art 1912. The principal must advance to the
Presumption: the agent is authorized to agent, should the latter so request, the sums
appoint a substitute necessary for the execution of the agency.
Should the agent have advanced them, the
• Responsibility for Acts of the Substitute principal must reimburse him therefore, even
if the business or undertaking was not
General Rule: If the Agent validly appoints a successful, provided the agent is free from
substitute, the Principal is liable for the fault.
Substitute’s acts
The reimbursement shall include interest on
Exception: [Art. 1892] the sums advanced, from the day on which
(a) If the agent appoints a substitute the advance was made.
although he was not given the power to
appoint one
Art. 1913. The principal must also indemnify
(b) If the agent was given the power to the agent for the damages which the
appoint a substitute, and the principal execution of the agency may have caused the
did not designate the person he can latter, without fault or negligence on his part.
appoint, but he appoints someone who is
notoriously incompetent or insolvent
(proven by history or record of failures in
Art. 1914. The agent may retain in pledge the
similar business ventures in the past).
things which are the object of the agency
• Validity of the Substitute’s acts until the principal effects the reimbursement
and pays the indemnity set forth in the two
If the principal prohibits the agent from preceding articles.
appointing a substitute, then all the acts of
the substitute are void.
The acts will be valid if: Two scenarios under which the Agent may
retain in pledge the objects of the agency:

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• When the agent advances funds for the acts do not apply if a SPOA is required. [c.f.
execution of the agency, or Woodchild v. Roxas]
• When the agent has suffered injury
caused by the execution of the agency Collateral Acts
(The agent has the implied authority) to do
B. OBLIGATIONS OF AGENTS all of the collateral acts which are the natural
and ordinary incidents of the main act or
B.1. IN GENERAL business authorized. [Guinhawa v. People,
B.1.A ACT WITHIN SCOPE OF AUTHORITY G.R. No. 162822 (2005)]
Art. 1881. The agent must act within the scope
of his authority. He may do such acts as may (2) With Respect to Third Persons
be conducive to the accomplishment of the
purpose of the agency.
Art. 1900. So far as third persons are
concerned, an act is deemed to have been
(1) In General performed within the scope of the agent's
An agent can bind his principal if he acts authority, if such act is within the terms of the
within the scope of authority granted to him. power of attorney, as written, even if the
agent has in fact exceeded the limits of his
Powers of attorney are generally construed authority according to an understanding
strictly. The general rule is that the power of between the principal and the agent.
attorney must be pursued within legal
strictures, and the agent can neither go
beyond it; nor beside it. The act done must be The Situation: the principal provided
legally identical with that authorized to be limitations to the authority of the agent orally
done. [Woodchild v. Roxas, G.R. No. 140667 or through a document other than the written
(2004)] power of attorney.
General Rule: The third person can rely
Conducive Acts completely on the written power of attorney
to determine whether the agent’s act is within
Acts “conducive to the accomplishment of the limits of his authority.
the purpose of the agency” are deemed to be
within the agent’s authority. Exception: If the third person is aware of the
secret understanding between the principal
and the agent.
Advantageous Acts
Art. 1882. The limits of the agent's authority (3) Authority of Corporate Officers
shall not be considered exceeded should it
have been performed in a manner more The general principles of agency govern the
advantageous to the principal than that relation between the corporation and its
specified by him. officers or agents, subject to the articles of
incorporation, bylaws, or relevant provisions
of law. [San Juan v. CA, G.R. No. 129459
The agent may do acts more advantageous to (1998)]
the principal than what is indicated in the A corporate officer entrusted with the general
power of attorney. But the principal may later management and control of its business, has
contest whether such act is indeed implied authority to make any contract or do
advantageous to him. any other act which is necessary or
However, if a special power of attorney is appropriate to the conduct of the ordinary
required for the transaction, then the agent business of the corporation. As such officer,
must obtain it. Advantageous and conducive he may, without any special authority from
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the Board of Directors, perform all acts of an Art. 1885. In case a person declines an
ordinary nature, which by usage or necessity agency, he is bound to observe the diligence
are incident to his office... of a good father of a family in the custody and
Where similar acts have been approved by preservation of the goods forwarded to him
the directors as a matter of general practice, by the owner until the latter should appoint
custom and policy, the general manager may an agent or take charge of the goods.
bind the company without formal
authorization of the board of directors. [Board
of Liquidators v. Kalaw, G.R. No. L-18805 Art. 1899. If a duly authorized agent acts in
(1967)] accordance with the orders of the principal,
the latter cannot set up the ignorance of the
agent as to circumstances whereof he himself
B.1.B ACT IN ACCORDANCE WITH was, or ought to have been, aware.
INSTRUCTIONS
Art. 1887. In the execution of the agency, the B.1.C CARRY OUT THE AGENCY
agent shall act in accordance with the
instructions of the principal. (1) In General

In default thereof, he shall do all that a good Art. 1884 par. 1 The agent is bound by his
father of a family would do, as required by the acceptance to carry out the agency, and is
nature of the business. liable for the damages which, through his
non-performance, the principal may suffer.

In the execution of the agency:


The agent is bound to carry out his duties as
• The agent shall act in accordance with agent once he accepts the authorization
the instructions of the principal; or granted by the principal. Else, he is liable for
damages if the principal suffers injury.
(1) In default thereof, he shall do all that a
good father of a family would do, as An agent is also liable for its own negligent
required by the nature of the business acts or omission in the performance of its
[Art. 1887]. duties. Such person is liable for damages
caused to the principal by such negligent acts.
Note: The limits of the agent’s authority shall
[British Airways v. CA, G.R. No. 121824 (1998)]
not be considered exceeded should it have
been performed in a manner more
advantageous to the principal than that
(2) Continuing Business
specified by him [Art. 1882]
Art. 1884 par. 2 He must also finish the
Authority Instructions business already begun on the death of the
principal, should delay entail any danger.
Sum total of the Private rule of
powers committed or guidance to the agent
permitted to the
agent (3) In case of Withdrawal
Art. 1929. The agent, even if he should
Relates to the Refers to the manner withdraw from the agency for a valid reason,
transaction or or mode of agent’s must continue to act until the principal has
business with which action with respect to had reasonable opportunity to take the
the agent is matters within the necessary steps to meet the situation.
empowered to act permitted scope of
authority
(4) Agent Not Required to Carry Out Agency
Binds the parties Does not bind third
parties Art. 1888. An agent shall not carry out an
agency if its execution would manifestly
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result in loss or damage to the principal. opposition to that of his principal or cestui
que trust. [Severino v. Severino, G.R. No. L-
18058 (1923)]
B.1.D ADVANCE FUNDS
Art. 1886. Should there be a stipulation that (3) Double Sales
the agent shall advance the necessary funds,
he shall be bound to do so except when the Art. 1916. When two persons contract with
principal is insolvent. regard to the same thing, one of them with
the agent and the other with the principal,
and the two contracts are incompatible with
Conditions: each other, that of prior date shall be
preferred, without prejudice to the provisions
• There is a stipulation stating that the of article 1544.
agent shall advance the necessary funds,
and
• The principal must be solvent Art. 1917. In the case referred to in the
preceding article, if the agent has acted in
good faith, the principal shall be liable in
B.1.E PREFER THE PRINCIPAL’S INTEREST damages to the third person whose contract
OVER HIS OWN must be rejected. If the agent acted in bad
faith, he alone shall be responsible.
(1) In General
Art. 1889. The agent shall be liable for
damages if, there being a conflict between Art. 1544. If the same thing should have been
his interests and those of the principal, he sold to different vendees, the ownership shall
should prefer his own. be transferred to the person who may have
first taken possession thereof in good faith, if
it should be movable property.
Note: Agency is a fiduciary relationship. A Should it be immovable property, the
breach of that relationship will expose the ownership shall belong to the person
agent to liability for damages. acquiring it who in good faith first recorded it
in the Registry of Property.
(2) Over Property Being Administered Should there be no inscription, the ownership
shall pertain to the person who in good faith
Art. 1491. The following persons cannot was first in the possession; and, in the
acquire by purchase, even at a public or absence thereof, to the person who presents
judicial auction, either in person or through the oldest title, provided there is good faith.
the mediation of another:
(2) Agents, the property whose
administration or sale may have been The Situation: the principal and the agent
intrusted to them, unless the consent of the each contracts with different people for the
principal has been given; same thing, and the contracts are
incompatible.
General Rule [Art. 1544]:
The relations of an agent to his principal are
fiduciary and it is an elementary and very old • The property is a movable, then the
rule that in regard to property forming the person who takes first possession in good
subject matter of the agency, he is estopped faith (PGF) prevails
from acquiring or asserting a titled adverse to
• The property is immovable, then the
that of the principal. His position is analogous
person who first records it in good faith in
to that of a trustee and he cannot
the register of deeds prevails. If there is
consistently, with the principles of good faith,
no record, the PGF prevails. If there is no
be allowed to create in himself an interest in
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PGF, then the person who has the oldest Applicability: The agent may only borrow
title. (record > PGF > title) funds from the agent if he has been
authorized to lend money at interest [Art
Exceptions: the contract “of a prior date”
1890]. If he does borrow, then he should pay
shall prevail if:
interest for the amount he borrowed.
(a) None of the buyers had obtained
possession over the movable, or
B.1.H LIABILITY FOR FRAUD/NEGLIGENCE
(b) None of the buyers had recorded,
possessed or has title over the Art. 1909. The agent is responsible not only
immovable for fraud, but also for negligence, which shall
Liability be judged with more or less rigor by the
courts, according to whether the agency was
(a) If the Agent was in good faith, then the or was not for a compensation.
principal is liable for damages to the third
person whose contract won’t be honored
(b) If the Agent was in bad faith, then he is The article has been applied against an agent
liable for damages to the third person for negligence which caused damage against
and to the principal [see Art 1889] itself, thereby preventing it from recovering
from the principal what it lost. [Metrobank v.
CA, G.R. No. 88166 (1991)]
B.1.F RENDER ACCOUNT/DELIVER
Art. 1891. Every agent is bound to render an B.2 FACTOR OR COMMISSION AGENT
account of his transactions and to deliver to
the principal whatever he may have received A factor or commission agent is one whose
by virtue of the agency, even though it may business is to receive and sell goods for a
not be owing to the principal. commission (also called factorage) and who
is entrusted by the principal with the
Every stipulation exempting the agent from possession of goods to be sold, and usually
the obligation to render an account shall be selling in his own name. He may act in his
void. own name or in that of the principal.
An ordinary agent need not have possession
of the goods of the principal, while the
If an agent receives a secret gift from a client,
commission agent must be in possession [De
he must report it and deliver it to the
Leon (2010)].
principal.
The law imposes upon the agent the absolute
obligation to make a full disclosure or Ordinary Agent Commission Agent
complete account to his principal of all his
transactions and other material facts relevant Acts for and in behalf Private rule of
to the agency. If he makes a secret profit, he of the principal guidance to the agent
is guilty of breach of his loyalty, and he
forfeits his right to his commission. [Domingo Need not have Refers to the manner
v. Domingo, G.R. No. L-30573 (1971)] possession of the or mode of agent’s
goods action with respect to
matters within the
B.1.G PAY INTEREST permitted scope of
authority
Art. 1896. The agent owes interest on the
sums he has applied to his own use from the
day on which he did so, and on those which
he still owes after the extinguishment of the Broker Commission Agent
agency.
Has no custody of the Has custody or
thing to be disposed possession of the
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of, only acts as things to be sold with a statement of the names of the buyers.
intermediary between Should he fail to inform the principal, the sale
seller and buyer is deemed to have been made for cash as far
as the principal is concerned [Art. 1906].
Maintains no relations Maintains relations
The commission agent is obliged to collect
with things to be with the thing, the
the credits of his principal when they become
sold/bought buyer and the seller
due and demandable [Art. 1908].
General rule: Failing to so collect, the agent
B.2.A RESPONSIBILITY FOR GOODS shall be liable for damages.
RECEIVED Exception: He is not liable if he proves that he
(1) The commission agent shall be exercised due diligence for that purpose.
responsible for goods received by him in the Should the commission agent receive a
terms and conditions and as described in the guarantee commission (del credere
consignment, unless upon receiving them he commission) on a sale, in addition to the
should make a written statement of the ordinary commission, he shall:
damage and deterioration suffered by the
same [Art. 1903]. (1) Bear the risk of collection; and
(2) The commission agent who handles (2) Pay the principal the proceeds of the sale
goods of the same kind and mark, which on the terms agreed upon with the purchaser
belong to different owners, shall: [Art. 1907].
(a) Distinguish them by countermarks
and C. LIABILITY OF AGENTS
(b) Designate the merchandise C.1. WHEN SOLIDARY
respectively belonging to each
principal [Art. 1904]. Art. 1894. The responsibility of two or more
agents, even though they have been
appointed simultaneously, is not solidary, if
B.2.B. SALE OF GOODS ON CREDIT solidarity has not been expressly stipulated.
WITHOUT AUTHORITY
General rule: The commission agent cannot (1) General Rule: Two or more agents are
sell on credit. Should he do so, the principal jointly liable.
may:
(2) Each of the agents can be held solidarily
(1) Demand from him payment in cash, in liable for the non-fulfilment of the agency
which case the commission agent shall be or for injuries caused by fault or
entitled to any interest or benefit, which may negligence if:
result from such sale [Art. 1905]; or
• The principal simultaneously appoints
(2) Ratify the sale on credit, in which case the
more than one agent, and
principal will have all the risks and
advantages to him [De Leon (2010)]. • There is an express stipulation that such
Exception: The commission agent can sell on agents are solidarily liable
credit with the express or implied consent of (3) An agent will not be solidarily liable if the
the principal. fellow agents acted beyond the scope of
authority.

B.2.C. SALE OF GOODS ON CREDIT WITH


AUTHORITY C.2. WHEN PERSONAL
If the commission agent was authorized to (1) Expressly Bound or In Excess of Authority
sell on credit and should he so sell on credit,
he shall inform the principal of such sale,
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General Rule: the agent who transacts as an Exception: When the contract involves things
agent is not personally liable to the third belonging to the principal. The principal may
person for the obligation entered into seek damages for such contract.
Exceptions: The exception under Art 1883 “does not say
that (a third party) does not have, and cannot
(1) When the agent expressly binds himself
bring an action against the agent also.”
(2) When the agent exceeds the limits of his [Beaumont v. Prieto, G.R. No. L-8988 (1916)]
authority without giving the person he is
transacting with sufficient notice of his
powers [Art 1897]
• When all of the following are present:
(a) The person transacting with the
agent is aware of the limits of the
agent’s authority
(b) The agent exceeded the scope of his
authority
(c) The agent exceeded his or her
authority, and
(d) The principal did not ratify the
contract
Note: In (c), the transaction will be considered
void.

(2) Acts in His Own Name


Art. 1883. If an agent acts in his own name,
the principal has no right of action against
the persons with whom the agent has
contracted; neither have such persons
against the principal.
In such case the agent is the one directly
bound in favor of the person with whom he
has contracted, as if the transaction were his
own, except when the contract involves
things belonging to the principal.
The provisions of this article shall be
understood to be without prejudice to the
actions between the principal and agent.

This is called an “Agency with an undisclosed


principal.”

General Rule: If the agent enters contract


without notice to the third party that he was
acting as an agent, the agent is directly
bound as a party to the contract, and the
principal and the third person have no right
of action against one another.
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ratification. [Manila Memorial v. Linsangan,


IV. Rights and G.R. No. 151319 (2004)]
Obligations of the
Principal By benefitting from the unauthorized act of
an agent, the principal is said to have ratified
the acts of the agent and is estopped from
denying said authority. [Filipinas Life v.
A. OBLIGATIONS Pedroso, G.R. No. 159489 (2008)]
However, in some cases, the mere acceptance
A.1. COMPLY WITH THE OBLIGATIONS of benefits is not tantamount to ratification
CONTRACTED BY THE AGENT by the principal.
Art. 1910. The principal must comply with all
the obligations which the agent may have (3) When Estoppel Applies
contracted within the scope of his authority.
Art. 1911. Even when the agent has exceeded
his authority, the principal is solidarily liable
As for any obligation wherein the agent has with the agent if the former allowed the latter
exceeded his power, the principal is not to act as though he had full powers.
bound except when he ratifies it expressly or
tacitly.
Even if there was no express authority, the
principal is still solidarily liable because he
If the agent acts within the scope of his allowed the agent to act as if he had
authority, then the principal must comply. authority.
Otherwise, the principal is bound to comply
This is not actually estoppel, but implied
only if he ratifies the agent’s act that was
agency. It is different from agency created by
done beyond the scope of his authority.
estoppel.

(1) Acts Within the Scope of Authority


(4) Acts by the Agent in His Own Name but
(a) Those expressly specified in the Involving Things of the Principal
power of attorney
(b) Conducive acts
A.2. ADVANCE OR REIMBURSE SUMS
(c) Advantageous acts NECESSARY
(d) Collateral acts Article 1912. The principal must advance to
the agent, should the latter so request, the
sums necessary for the execution of the
(2) Ratified Acts agency.
Art. 1901. A third person cannot set up the Should the agent have advanced them, the
fact that the agent has exceeded his powers, principal must reimburse him therefor, even if
if the principal has ratified, or has signified the business or undertaking was not
his willingness to ratify the agent's acts. successful, provided the agent is free from all
fault.
The reimbursement shall include interest on
The principal must have full knowledge at the
the sums advanced, from the day on which
time of ratification of all the material facts
the advance was made.
and circumstances relating to the
unauthorized act of the person who assumed
to act as agent. If the material facts were
Art. 1918. The principal is not liable for the
suppressed or unknown, there can be no
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expenses incurred by the agent in the latter, without fault or negligence on his part.
following cases:
• If the agent acted in contravention of the General Rule: The principal must indemnify
principal's instructions, unless the latter the agent for damages in the execution of the
should wish to avail himself of the agency.
benefits derived from the contract;
Exception: When damage was caused due to
• When the expenses were due to the fault the fault or negligence of the agent.
of the agent;
• When the agent incurred them with
knowledge that an unfavorable result A.4. COMPENSATE THE AGENT
would ensue, if the principal was not Art. 1875. Agency is presumed to be for a
aware thereof; compensation, unless there is proof to the
• When it was stipulated that the expenses contrary.
would be borne by the agent, or that the
latter would be allowed only a certain
sum. Steps to determine whether the agent is
entitled to compensation:
• Determine whether the person is an
General Rule: the principal must advance or agent or a broker
reimburse (with interest) the sums necessary
to execute the agency. • If he is an agent, determine whether he is
the procuring cause, i.e. if there is a close,
Exceptions: proximate and causal relation between
• Expenses incurred through acts which the agent’s efforts and the sale
contravene the principal’s instructions,
and the principal does not want to derive
benefit therefrom B. LIABILITY OF THE PRINCIPAL
• Expenses due to the fault of the agent
• Expenses incurred by the agent with the B.1. IN GENERAL
knowledge that an unfavorable result The principal is bound and liable for the acts
would ensue, and the principal was of the agent done within the scope of his
unaware authority (express, conducive, advantageous,
• If there is a stipulation that expenses and collateral acts), for unauthorized acts
would be borne by the agent or that he which the principal has ratified and for acts
which is estopped from denying.
would be allowed only a certain sum
• Expenses incurred from acts outside the
authority of the agent. B.2. BE SOLIDARILY LIABLE
Sums to be reimbursed include those from Art. 1911. Even when the agent has exceeded
unsuccessful undertakings as well as those his authority, the principal is solidarily liable
initially in contravention of the principal’s with the agent if the former allowed the latter
instructions but later becomes a source of to act as though he had full powers.
benefits.

Requisites:
A.3. INDEMNIFY THE AGENT FOR INJURY
• Agency relationship exists
Art. 1913. The principal must also indemnify
the agent for all the damages which the • The agent acts in excess of his authority.
execution of the agency may have caused the

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• The principal allowed the agent to act as • Principal and third persons now have a
though he had full powers. right of action against each other. [Syjuco
v. Syjuco, G.R. No. 13471 (1920)]

Art. 1915. If two or more persons have • The principal is not bound by the contract
appointed an agent for a common if the act is beyond the scope of the
transaction or undertaking, they shall be agent’s authority. [PNB v. Agudelo, G.R.
solidarily liable to the agent for all the No. L-39037 (1933)] This operates as an
consequences of the agency. exception to the exception.

This contemplates a situation where several


principals appoint an agent for a common
transaction. They will be solidarily liable as
principals to the agent.

B.3. IF THE CONTRACT INVOLVES THINGS


BELONGING TO THE PRINCIPAL

Art. 1883. If an agent acts in his own name,


the principal has no right of action against
the persons with whom the agent has
contracted; neither have such persons
against the principal.
In such case the agent is the one directly
bound in favor of the person with whom he
has contracted, as if the transaction were his
own, except when the contract involves
things belonging to the principal.
The provisions of this article shall be
understood to be without prejudice to the
actions between the principal and agent.

General Rule: If the agent acts in his own


name, then the contract is between the agent
and the third person. Neither the third person
nor the principal has a right of action against
the other.
Except: If the contract involves things
belonging to the principal, then the principal
is also liable to the third party. (Agency with
an Undisclosed Principal).
However, it is not the case that the agent
escapes liability by simply contracting things
belonging to the principal.
There are two effects of the exception,
according to jurisprudence:

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(1) The law indulges in no bare presumptions


V. Rights and that an agency exists: it must be proved
Obligations Of Third or presumed from facts;
(2) The agent cannot establish his own
Persons authority, either by his representations or
by assuming to exercise it;
(3) An authority cannot be established by
A. RIGHTS OF THIRD PERSONS mere rumor or general reputation;
A.1. REQUIRE THE PRESENTATION OF
(4) Even a general authority is not an
AUTHORITY/INSTRUCTIONS
unlimited one; and
Art. 1902. A third person with whom the (5) Every authority must find its ultimate
agent wishes to contract on behalf of the source in some act or omission of the
principal may require the presentation of the principal.
power of attorney, or the instructions as
regards the agency. Private or secret orders The burden of proof to show that an agency
and instructions of the principal do not relationship exists is with the third person.
prejudice third persons who have relied upon Every person dealing with an agent is put
the power of attorney or instructions shown upon inquiry and must discover upon his peril
them. the authority of the agent. If he does not
make such inquiry, he is chargeable with
Art. 1900. So far as third persons are knowledge of the agent's authority, and his
concerned, an act is deemed to have been ignorance of that authority will not be any
performed within the scope of the agent's excuse. [Bacaltos Coal Mines v. CA, G.R. No.
authority, if such act is within the terms of the 114091 (1995)]
power of attorney, as written, even if the
agent has in fact exceeded the limits of his
authority according to an understanding
between the principal and the agent.

A.2. RELY ON REPRESENTATIONS BY THE


PRINCIPAL
Art. 1873. If a person specially informs
another or states by public advertisement
that he has given a power of attorney to a
third person, the latter thereby becomes a
duly authorized agent, in the former case
with respect to the person who received the
special information, and in the latter case
with regard to any person. 
The power shall
continue to be in full force until the notice is
rescinded in the same manner in which it was
given.

B. OBLIGATIONS OF THIRD PERSONS


Based on Keeler Electric v. Rodriguez, G.R. No.
L-19001 (1922),

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General Rule: The principal may revoke the


VI. Modes of agency at will.
Extinguishment Exception: Agency cannot be revoked if it is
coupled with an interest, such that:
(1) A bilateral contract depends upon it;
A. IN GENERAL
(2) It is the means of fulfilling an obligation
already contracted; or
Art. 1919. Agency is extinguished: (3) A partner is appointed manager of a
(1) By its revocation; partnership in the contract of partnership
and his removal from the management is
(2) By the withdrawal of the agent; unjustifiable.
(3) By the death, civil interdiction, insanity or The principal can revoke the agency even if
insolvency of the principal or of the agent; the period fixed in the contract has not yet
(4) By the dissolution of the firm or expired. [CMS Logging v. CA, G.R. No. L-
corporation which entrusted or accepted the 41420 (1992)]
agency; Art. 1925. When two or more principals have
(5) By the accomplishment of the object or granted a power of attorney for a common
purpose of the agency; transaction, any one of them may revoke the
same without the consent of the others.
(6) By the expiration of the period for which
the agency was constituted.
Qualifications: The right of the principal to
terminate the authority of his agent is
The provision enumerates only those which absolute and unrestricted, except that he is
are peculiar to agency and is, therefore, not liable for damages in case:
exclusive. Agency may also be extinguished
by the modes of extinguishment of (1) He revokes the agency in bad faith
obligations in general. [De Leon (2010)] [Danon v. Brimo, G.R. No. 15823 (1921)];
or
The modes of extinguishment may be
classified into three: (2) He revokes the agency before the
expiration of the period stipulated in the
• By agreement (Nos. 5 and 6); agency contract.
• By subsequent acts of the parties:
(a) By the act of both parties or by B.2. WHEN REVOCATION IS NOT BINDING
mutual consent; or ON THIRD PERSONS
(b) By the unilateral act of one of them (1) When Notice is Required
(Nos. 1 and 2);
Art. 1921. If the agency has been entrusted for
(3) By operation of law (Nos. 3 and 4). the purpose of contracting with specified
persons, its revocation shall not prejudice the
latter if they were not given notice thereof.
B. REVOCATION
B.1. IN GENERAL
(2) When a Third Person in Good Faith Has No
Art. 1920. The principal may revoke the Knowledge of Revocation
agency at will, and compel the agent to
return the document evidencing the agency. Art. 1922. If the agent had general powers,
Such revocation may be express or implied. revocation of the agency does not prejudice
third persons who acted in good faith and
without knowledge of the revocation. Notice
of the revocation in a newspaper of general
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circulation is a sufficient warning to third B.6. WHEN AGENCY CANNOT BE REVOKED


persons.
Art. 1927. An agency cannot be revoked if a
An agent with general powers is most likely, bilateral contract depends upon it, or if it is
an agent authorized to transact with the the means of fulfilling an obligation already
general public in contradistinction to the contracted, or if a partner is appointed
agent who contracts with specified persons manager of a partnership in the contract of
under Art. 1921. partnership and his removal from the
management is unjustifiable.

B.3. APPOINTMENT OF NEW AGENT


Art. 1930. The agency shall remain in full
Art. 1923. The appointment of a new agent for
force and effect even after the death of the
the same business or transaction revokes the
principal, if it has been constituted in the
previous agency from the day on which notice
common interest of the latter and of the
thereof was given to the former agent,
agent, or in the interest of a third person who
without prejudice to the provisions of the two
has accepted the stipulation in his favor.
preceding articles.
Even if the agency is coupled with an interest
Revocation takes effect when notice is given
(which means that it is irrevocable), it may
to the former agent, not when the new agent
still be revoked if there is just cause to
is appointed.
terminate such agency relationship.

B.4. DIRECT MANAGEMENT BY THE


PRINCIPAL C. WITHDRAWAL BY THE AGENT
Art. 1924. The agency is revoked if the Art. 1928. The agent may withdraw from the
principal directly manages the business agency by giving due notice to the principal. If
entrusted to the agent, dealing directly with the latter should suffer any damage by
third persons. reason of the withdrawal, the agent must
indemnify him therefor, unless the agent
should base his withdrawal upon the
If the principal believes that the agent is in impossibility of continuing the performance
breach of the contract and thereby decides to of the agency without grave detriment to
deal with the business directly, then the himself.
agency is said to be revoked. [CMS Logging v.
CA] The mere act of direct management by
the principal is not enough to revoke the General Rule: The agent may withdraw so
agency without such intention. long as he gives due notice to the principal. If
the principal suffers damage because of the
withdrawal, then the agent must indemnify
B.5. SPECIAL AUTHORITY REVOKES THE him, except if the basis of his withdrawal is
GENERAL AUTHORITY WHERE A SPECIAL because continuing the performance of the
MATTER IS INVOLVED agency is impossible without grave detriment
to the agent.
Art. 1926. A general power of attorney is
revoked by a special one granted to another If the Agent files a complaint against his
agent, as regards the special matter involved principal, then he is understood to have
in the latter. renounced the agency because his act was
more expressive than words and could not
have caused any doubt. [Valera v. Velasco,
If Agent 1 is given a general agency, and G.R. No. L-28050 (1928)]
Agent 2 is later given a special agency, then
Agent 1 can no longer perform the powers
granted to Agent 2 under the special agency. D. DEATH, CIVIL INTERDICTION,
INSANITY OR INSOLVENCY
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E. DISSOLUTION / ACCOMPLISHMENT
D.1. IN GENERAL / EXPIRATION
By reason of the very nature of the Art. 1919. Agency is extinguished:
relationship between the principal and agent, xxx
agency is extinguished by the death of the
principal or the agent. Any act of an agent (4) By the dissolution of the firm or
after the death of his principal is void ab initio corporation which entrusted or accepted the
unless the same falls under the exceptions agency;
provided for in the aforementioned Articles (5) By the accomplishment of the object or
1930 and 1931. purpose of the agency;
(6) By the expiration of the period for which
D.2. EXCEPTIONS the agency was constituted.

• Agency Coupled with an Interest.


Art. 1930. The agency shall remain in full Accomplishment
force and effect even after the death of the The fulfillment of the purpose for which
principal, if it has been constituted in the agency was created ipso facto terminates
common interest of the latter and of the agency even though it was expressly made
agent, or in the interest of a third person who irrevocable. If the purpose has not been
has accepted the stipulation in his favor. accomplished, the agency continues
indefinitely for as long as the intent to
continue is manifested through words or
2. Contract between Agent Without actions of the parties.
Knowledge of Death and Third Person in
Good Faith
Dissolution
Art. 1931. Anything done by the agent, without
knowledge of the death of the principal or of The dissolution of a partnership or
any other cause which extinguishes the corporation which entrusted (principal) or
agency, is valid and shall be fully effective accepted (agent) the agency extinguishes its
with respect to third persons who may have juridical existence, except for the purpose of
contracted with him in good faith. winding up its affairs. It is equivalent to death.

3. Unfinished business Expiration


Art. 1884 par.2. He must also finish the (1) If created for fixed period, expiration of
business already begun on the death of the the period extinguishes agency even if the
principal, should delay entail any danger. purpose was not accomplished.
(2) If no time is specified, the courts may fix
the period as under the circumstances
D.3. DEATH OF AGENT have been probably contemplated by the
If the agent dies, his heirs must: parties [Art. 1197]. Otherwise, the agency
terminates at the end of a reasonable
(1) Notify the principal thereof; and period of time. Either party can terminate
(2) In the meantime adopt such measures as the relationship at will by giving notice to
the circumstances may demand in the the other [De Leon (2010)].
interest of the latter [Article 1932]. The period contemplated may be implied
from terms of agreement, purpose of agency,
and the circumstances of the parties.

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CIVIL LAW
PARTNERSHIP

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3. There must be a mutual contribution of


I. Contract of money, property, or industry to a common
Partnership fund;
4. The object must be lawful;
Article 1767. By the contract of partnership
two or more persons bind themselves to 5. The primary purpose must be to obtain
contribute money, property, or industry to a profits and to divide the same among the
common fund, with the intention of dividing parties;
the profits among themselves. 6. The partnership has a juridical
Two or more persons may also form a personality separate from individual
partnership for the exercise of a profession. partners [Article 1768].
(1665a)

B.1. LAWFUL PURPOSE


A. ELEMENTS: Article 1770 (1). A partnership must have a
(1) Two or more persons bind themselves to lawful object or purpose, and must be
contribute money, property, or industry to established for the common benefit or
a common fund, interest of the partners.
(2) With the intention of dividing the profits
among themselves
If there is no lawful purpose, then the
partnership agreement is void ab initio.
Contracts whose purpose is contrary to law
Common Fund
are void from the beginning. [Art1409 (1)].
The Civil Code requires the parties “bind
themselves to contribute” to a common fund.
The partnership may therefore exist even Article 1770 (2). When an unlawful partnership
before the common fund is created. The is dissolved by a judicial decree, the profits
common fund may not even come from the shall be confiscated in favor of the State,
partners themselves but may be borrowed without prejudice to the provisions of the
from third persons. The form of the common Penal Code governing the confiscation of the
fund may not even be cash or property; it can instruments and effects of a crime.
be in the form of credit or industry. [Lim Tong
Lim v Philippine Fishing Gear, G.R. No.
136448 (1999)] Upon the dissolution of an unlawful
partnership, the profits are simply
confiscated by the State. The previous rule is
Intention to Divide Profits to give such profits to a charitable institution.
If the common fund’s work is “indispensable,
beneficial and economically useful to the
business” of the partners and the profit The profit and tools/instruments in the
motive is the primordial reason to establish partnership with an unlawful purpose will be
the partnership, even if there are no actual confiscated in favor of the government but if
profits, then there is partnership. [AFISCO v the partners were not in pari delicto, they may
CA, G.R. No. 112675 (1999)] be able to recover their contribution to the
partnership instead of it being forfeited as
well.
B. ESSENTIAL FEATURES
1. There must be a valid contract; B.2. COMMON BENEFIT
2. The parties must have legal capacity; Article 1770. A partnership must have a lawful
object or purpose, and must be established

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for the common benefit or interest of the


partners.
Although a corporation cannot enter into a
partnership contract, it may, however,
engage in a joint venture with others
A partnership must be established for the [Aurbach vs. Sanitary Wares Manufacturing
common benefit of the partners. This Corp, G.R. No. 75875 (1989)]
“common benefit” is always pecuniary based
on Art 1799.
On the other hand, there is no prohibition
against a partnership being a partner in
Article 1799. A stipulation which excludes one another partnership [De Leon (2010)].
or more partners from any share in the profits
or losses is void.
D. OBJECT
B.3. JURIDICAL PERSONALITY D.1. OBJECT OF UNIVERSAL PARTNERSHIP

Article 1768. The partnership has a juridical A universal partnership may refer to:
personality separate and distinct from that of (1) All present property :
each of the partners, even in case of failure to
comply with the requirements of article 1772, • The partners contribute all the property
first paragraph. which belongs to them to a common fund,
with the intention of dividing the same
among themselves, as well as the profits
C. PARTIES they may acquire therewith [Article 1778].
General Rule: Any person capacitated to • The property contributed includes all
contract may enter into a contract of those belonging to the partners at the
partnership. time of the constitution of the partnership.
The following persons CANNOT enter into a • A stipulation for the common enjoyment
contract of partnership: of any other profits may also be made.
• Those suffering from civil interdiction; However, the property which the partners
may acquire subsequently by inheritance,
• Minors; legacy or donation cannot be included in
such stipulation, except the fruits thereof
• Insane or demented persons; [Article 1779].
• Deaf-mutes who do not know how to (2) All the profits:
write;
(a) It comprises all that the partners may
• Incompetents who are under acquire by their industry or work
guardianship. during the existence of the
partnership.
Exceptions : The capacity of the following (b) Only the usufruct over the property of
persons to enter into a contract of the partners passes to the
partnership, though capacitated to contract partnership [Article 1780].
generally, are limited:
• Those who are prohibited from giving When the articles of universal partnership do
each other any donation or advantage not specify its nature (all present property or
cannot enter into a universal partnership all the profits), the partnership will be
[Article 1782]; considered as one only of all the profits
• A corporation cannot enter into a [Article 1781].
partnership in the absence of express
authorization by statute or charter.
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D.2. OBJECT OF PARTICULAR


PARTNERSHIP
As to the second, failure to comply with these
A particular partnership has for its object requirements, however, does NOT affect the
determinate things, their use or fruits, or a liability of the partnership and the partners to
specific undertaking, or the exercise of a third persons [Articles 1768 and 1772].
profession or vocation [Article 1783].

F. DURATION
D.3. EFFECT OF UNLAWFUL OBJECT
F.1. COMMENCEMENT
If the partnership has an unlawful object or
purpose: Art 1784. A partnership begins from the
moment of the execution of the contract,
(1) The contract is void ab initio [Article unless otherwise stipulated
1409(1)].
(2) Once dissolved by judicial decree:
F.2. TERM
(a) The profits shall be confiscated by
favor of the State; As to period, a partnership may either be:

(b) The instruments or tools and For a fixed term or particular undertaking; or
proceeds of the crime shall also be At will, the formation and dissolution of
forfeited in favor of the State [Article which depend on the mutual desire and
1770]. consent of the parties. Any one of the
(3) The contributions of partners shall not be partners may, at his sole pleasure, dictate the
confiscated unless they are instruments dissolution of the partnership, even in bad
or tools of the crime [De Leon (2010)]. faith, subject to liability for damages [Ortega
v. CA, G,R, No. 109248 (1995)].

F.3. EXTENSION
E. FORM
A partnership term may be extended by:
General rule: The contract may be constituted
in any form [Article 1771]. (1) Express renewal; or

Exceptions: (2) Implied renewal, when these requisites


concur:
(1) Where immovable property or real
rights are contributed: (a) The partnership is for a fixed term or
particular undertaking;
(a) The contract must appear in a
public instrument; and (b) It is continued after the termination of
the fixed term or particular
(b) Attached to such instrument undertaking without any express
must be an inventory, signed by agreement [Article 1785].
the parties, of the property
contributed [Articles 1771 and
1773]; G.RULES TO DETERMINE EXISTENCE
(2) Where the capital is at least P3,000, When the intent of the parties is clear, such
in money or property: intent shall govern. When it does not clearly
(a) The contract must appear in a appear, the following rules apply:
public instrument; and (1) Persons who are not partners to each
(b) It must be recorded in the Office other are not partners as to third persons,
of the Securities and Exchange subject to the provisions on partnership
Commission (SEC). by estoppel.

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(2) Co-ownership or co-possession does not H.2. AS TO ITS OBJECT:


of itself establish a partnership, even
(1) Universal partnership:
when there is sharing of profits in the use
of the property. (a) Of all present property;
(3) Sharing of gross returns does not of itself (b) Of profits;
establish a partnership, even when the
(2) Particular partnership.
parties have joint or common interest in
any property from which the returns are
derived. H.3. AS TO ITS DURATION:
(4) The receipt by a person of a share in the (1) For a fixed term or particular undertaking;
profits of a business is prima facie
evidence that he is a partner. (2) At will.

As to the fourth, no such inference is drawn if H.4. AS TO THE LIABILITY OF THE


the profits are received in payment: PARTNERS:
1. As a debt by installments or (1) General partnership, consisting of general
otherwise; partners only, who are liable pro rata for
partnership obligations with all their property
2. As wages of an employee or rent to a after exhaustion of partnership assets;
landlord;
(2) Limited partnership, includes, aside from
3. As an annuity to a widow or general partner/s, limited partners, who are
representative of a deceased partner; not personally liable for partnership
4. As interest on a loan, though the obligations.
amount of payment vary with the
profits of the business;
H.5. AS TO ITS PUBLICITY:
5. As the consideration for the sale of a
goodwill of a business or other (1) Secret partnership, where the existence of
property by installments or otherwise certain persons as partners is not made
[Article 1769]. known by the partners;
(2) Open or notorious partnership, the
existence of which is made known to the
H. KINDS OF PARTNERSHIPS public by the partners.
H.1. AS TO THE LEGALITY OF ITS
EXISTENCE:
H.6. AS TO ITS PURPOSE:
(1) Partnership de jure is one which has
complied with all the requisites for its lawful (1) Commercial or trading partnership, for
establishment; transaction of business;
(2) Partnership de facto is one which failed to (2) Professional or non-trading partnership,
so comply. for the exercise of profession.

A profession has been defined as “a group of


men pursuing a learned art as a common
calling in the spirit of public service – no less
a public service because it may incidentally
be a means of livelihood” [In the Matter of the
Petition for Authority to Continue Use of Firm
name “Sycip, Salazar, etc.”/“Ozaeta, Romulo,
etc.” (1979)].

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I. KINDS OF PARTNERS (17) Retiring partner, who is withdrawing from


the partnership.
(1) Capitalist partner, whose contribution is
money or property;
(2) Industrial partner, contribution is only his Industrial Capitalist
industry;
partner partner
(3) General partner, whose liability to third
persons extends to his separate property; Form of contribution
(4) Limited partner, whose liability to third Industry Money or property
persons is limited to his capital
contribution; Share in profits
(5) Managing partner, who was designated
to manage the affairs or business of the Just and equitable According to
partnership; share agreement; if none,
in proportion to
(6) Liquidating partner, who takes charge of contribution
the winding up of partnership affairs;
Share in losses
(7) Partner by estoppel, who is not really a
partner but is liable as such for the Exempted as to losses According to
protection of innocent third persons; as between partners, agreement; if none,
(8) Continuing partner, who continues the but liable to third in the same
business after dissolution of the persons, without proportion as the
partnership by admission of a new prejudice to agreed share in
partner, or retirement, death or expulsion reimbursement from profits; if none, in
of existing partners; capitalist partners proportion to
contribution
(9) Surviving partner, who remains a partner
after dissolution by death of any partner; Engagement in business
(10) Subpartner, who is not a member of the
partnership but contracts with a partner Cannot engage in Cannot engage, for
with regard to the share of the latter in business for himself, his own account, in
the partnership; unless the partnership the same kind of
expressly permits him business as that of
(11) Ostensible partner, who takes active part to do so; should he do the partnership,
in the business of the partnership and is so without permission, unless there is a
known by the public; the capitalist partners stipulation to the
(12) Secret partner, who takes active part in may: [1] exclude him contrary; should he
the business, but is unknown to the third from the firm; or [2] do so, he shall
persons as a partner; avail themselves of the bring to the
benefits obtained in common fund any
(13) Silent partner, who does not take active violation of the profits accruing to
part in the business, but may be known to prohibition, with right him from his
be a partner by third persons; to damages in either transactions and
(14) Dormant partner, who does not take case [Article 1789] shall personally
active part in the business and is not bear all the losses
known or held out as a partner; [Article 1808]
(15) Original partner, who has been a partner
since the constitution of the partnership;
(16) Incoming partner, who is about to be
taken as a member into an existing
partnership;

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J. PARTNERSHIP, DISTINGUISHED Partnership Co-ownership


FROM OTHER CONTRACTS
Death or incapacity Death or incapacity of
Partnership Joint venture of a partner a co-owner does not
dissolves the dissolve the co-
Operates with firm Operates without partnership ownership
name and legal firm name and
personality legal personality A partner cannot A co-owner can
dispose of his dispose of his share
Generally relates to a Usually limited to interest, so as to without consent of
continuing business of a single make the assignee others
various transactions of transaction a partner, without
a certain kind consent of others
Corporations may not Corporations may
enter into a partnership enter into joint
ventures Partnership Corporation

Has juridical personality separate and distinct


from its individual members
A joint venture is an agreement between two
parties to enter into a commercial Can only act through agents
undertaking. It may fall under a partnership
with a limited purpose. Composed of an aggregate of individuals

Distributes its profits to those who


Under Philippine law, a joint venture is a form contributed capital to the business
of partnership and should thus be governed
by the laws of partnership [Auerbach vs. Can only be organized where there is a law
Sanitary Wares Manufacturing Corp]. authorizing its organization

Taxable as in a corporation
Partnership Co-ownership
Created by Created by operation of
Generally created Generally created by agreement law
by either express or law and may exist
implied contract even without a Involves at least Except for corporation
contract two persons sole, requires at least 5
incorporators
Has a separate Has no separate
juridical personality juridical personality Personality Personality
commences from commences from the
Generally, the The purpose is the the moment of issuance of certificate
purpose is to obtain common enjoyment of execution of the of incorporation
profits a thing or right contract

Duration has no An agreement to keep Can exercise any Can exercise only
limitation a thing undivided for power authorized powers conferred by
more than ten years is by partners the Corporation Code or
not allowed, but may by its articles of
be extended incorporation, and such
as are necessary or
There is mutual There is no mutual incidental to the
agency between representation among exercise of such powers
partners co-owners
When Management is vested

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Partnership Corporation be stipulated; equal


otherwise, in
management is in the board of proportion to
not agreed upon, directors or trustees contribution
every partner may
act for the Management Administration
partnership shared by all belongs to the
partners, unless spouses jointly, but
Partners are Stockholders are liable otherwise agreed decision of husband
generally liable for only to the extent of upon prevails in case of
partnership debts their shares disagreement
A partner cannot A stockholder has the Partner can dispose Spouse cannot
dispose of his right to transfer his of interest even dispose of interest
interest, so as to shares without consent without consent of during marriage, even
make the assignee of others others with consent
a partner, without
consent of others

Duration has no The term limit is 50 Partnership Voluntary association


limitation years, but may be
Has juridical Has no juridical
extended
personality personality
May be dissolved May only be dissolved
Organized for profit Not always organized
at any time by one with the consent of the
for profit
or all of the state
partners Capital is Capital is not
contributed contributed,
although fees are
collected from
members

Conjugal partnership The partnership is The members are


Partnership primarily liable; the liable individually for
of gains
partners are liable debts which they
Created by Arises in case the only subsidiarily authorized or ratified
voluntary spouses, of opposite
agreement of two or sex, agree before Share in profits may Share in profits is
more partners of marriage be stipulated; equal
either sex otherwise, in
proportion to
Governed by Governed by law contribution
agreement

Has juridical Has no juridical


personality personality

Commencement Commencement is on
date may be the date of the
stipulated celebration of the
marriage and any
stipulation to the
contrary is void

Share in profits may Share in profits is


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Exception: When there is an agreement to the


II. Rights and contrary, the contribution shall follow such
Obligations of the agreement [Art. 1790].

Partnership ADDITIONAL CAPITAL CONTRIBUTION


Requisites:
A. RIGHT TO CONTRIBUTION (1) There is an imminent loss of the business
The partnership has a right to the of the partnership;
contribution (or the partners are obliged to (2) The majority of the capitalist partners are
contribute). The money or property thus of the opinion that an additional
contributed, or their use or fruits, become the contribution to the common fund would
property of the partnership. save the business;
(3) The capitalist partner refuses
CONTRIBUTION OF MONEY OR PROPERTY deliberately (not because of financial
inability) to contribute an additional
With respect to contribution of property, a
partner is obliged to: share to the capital; and 


(1) To contribute, at the beginning of the • There is no agreement that even in case
partnership or at the stipulated time, the of imminent loss of the business, the
money, property or industry which he partners are not obliged to contribute. 

undertook to contribute;
(2) In case a specific and determinate thing is
to be contributed:
Any partner who refuses to contribute an
• To warrant against eviction in the same additional share to the capital, except an
manner as a vendor; and
 industrial partner, to save the venture, shall
(a) To deliver to the partnership the fruits be obliged to sell his interest to the other
of the property promised to be partners, unless there is an agreement to the
contributed, from the time they contrary [Art. 1791].
should have been delivered, without
need of demand [Art. 1786];
CONTRIBUTION OF INDUSTRY
(3) In case a sum of money is to be
contributed, or in case he took any An industrial partner is obliged to contribute
amount from the partnership coffers, to his industry at the stipulated time.
indemnify the partnership for:
(a) Interest; and General rule: An industrial partner cannot
(b) Damages from the time he should engage in business for himself. Should he do
have complied with his obligation, or so, the capitalist partners, as well as
from the time he converted the industrial partners [De Leon (2010)] may
amount to his own use, respectively either:
[Art. 1788]. • Exclude him from the firm; or

(2) Avail themselves of the benefit which he
AMOUNT OF CONTRIBUTION may have obtained.
General rule: Partners are to contribute equal Exception: He may engage in business for
shares to the capital of the partnership. himself when the partnership expressly
permits him to do so [Art. 1789].

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B. RIGHT TO APPLY PAYMENT already collected not to share in the loss of


RECEIVED TO PARTNERSHIP CREDIT the other partners.
General rule: A partner authorized to manage,
who collects a demandable sum owed to him D. RIGHT TO INDEMNITY FOR
in his own name from a person who also owes
DAMAGES
the partnership a demandable sum, is
obliged to apply the sum collected to both Every partner is responsible to the
credits pro rata, even if he issued a receipt for partnership for damages suffered by it
his own credit only. through his fault.
Requisites:
(1) There exist at least two debts, one where SET-OFF OF LIABILITY
the collecting partner is creditor, and the
General rule: The liability for damages cannot
other, where the partnership is the creditor;
be set-off or compensated by profits or
(2) Both debts are demandable ; and 
 benefits which the partner may have earned
for the partnership by his industry.
(3) The partner who collects is authorized to
manage and actually manages the Ratio: The partner has the obligation to
partnership. 
 secure the benefits for the partnership. As
such, the requirement for compensation, that
the partner be both a creditor and a debtor of
Exceptions: the partnership at the same time, is not
complied with [Art. 1278; De Leon (2010)].
(1) In case the receipt was issued for the
account of the partnership credit only, Exception : The court may equitably lessen
however, the sum shall be applied to the the liability if, through his extraordinary
partnership credit alone. efforts in other activities of the partnership,
unusual profits were realized [Art. 1794]. Note,
(2) When the debtor declares, pursuant to however, that there is still no compensation
Article 1252, at the time of making the in this case.
payment, to which debt the sum must be
applied, and if the personal credit of the
partner is more onerous to him, it shall be so SUIT FOR DAMAGES
applied [Art. 1792].
Before a partner may sue another for alleged
fraudulent management and resultant
C. RIGHT TO RETURN OF CREDIT damages, liquidation must first be effected to
determine the extent of the damage. Without
RECEIVED
liquidation of partnership affairs, a partner
A partner, authorized to manage or not, who cannot claim damages [Soncuya v. De Luna
already received, in whole or in part, his share (1939)].
of a partnership credit, is obliged to bring to
the partnership capital what he received
when: RESPONSIBILITY TO PARTNERS
(1) The other partners have not collected their In the absence of any stipulation to the
shares; and contrary, every partner is an agent of the
partnership for the purpose of its business. As
(2) The partnership debtor has become
such, it is responsible to every partner:
insolvent.
(1) For amounts, and the corresponding
This obligation exists even when he issued a
interest from the time the expenses were
receipt for his share only [Art. 1793].
made, which he may have disbursed on
Ratio: In this case, the debt becomes a bad behalf of the partnership;
debt. It would be unfair for the partner who

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(2) For obligations he may have contracted in


good faith in the interest of the partnership III. Rights and
business; and 
 Obligations of Partners
(3) For risks in consequence of the
management of the partnership [Art. 1796]. 

Inter Se
A. RIGHT TO ASSOCIATE ANOTHER IN
SHARE
Every partner may associate another person
with him in his share. The admission of the
associate to the partnership, however,
requires consent of all the other partners
even if the partner having an associate is a
managing partner [Art. 1804].
This arrangement refers to a contract of
subpartnership, which is a partnership within
a partnership, distinct and separate from the
main partnership. It is considered a
modification of the original contract [De Leon
(2010)].

B. RIGHT TO INSPECT PARTNERSHIP


BOOKS
The partnership books shall be kept:
(1) At a place agreed upon by the partners;
(2) When there is no such agreement, at the
principal place of business of the partnership.
Every partner shall, at any reasonable hour,
have access to and may inspect and copy any
of them.
Any reasonable hour means reasonable hours
on business days throughout the year [Pardo
v. Lumber Co. (1925)].

C. RIGHT TO FORMAL ACCOUNT


General rule: The right to a formal account of
partnership affairs accrues only when the
partnership is dissolved.
Exceptions: In the special and unusual cases
mentioned in Article 1809, formal accounting
may be demanded by any partner even before
dissolution:
(1) If he is wrongfully excluded from the
partnership business or possession of its
property by his co-partners;
(2) If the right exists under the terms of any
agreement; 

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(3) If, without his consent, a partner has (4) Other factors may be considered to
derived profits from any transaction determine ownership of the property. 

connected with the formation, conduct, or
liquidation of the partnership or from any use
of partnership property; 
 RIGHTS IN SPECIFIC PROPERTY
(4) Whenever other circumstances render it (1) The partners have equal rights to possess
just and reasonable [Art. 1809]. 
 partnership property for partnership
purposes.
(2) For other purposes, the consent of his
D. PROPERTY RIGHTS OF PARTNERS partners is necessary. 

IN GENERAL (3) If the partner is excluded, he may ask for:
The property rights of a partner are:
(a) Formal accounting [Art.1809]; or

(1) Rights in specific partnership property;
(b) Dissolution by judicial decree
(2) Interest in the partnership; and [Art.1831]. 

(3) Right to participate in the management (4) A partner’s right in such property is not
[Art. 1810]. assignable, except when all the partners
assign their rights in the same property; 

PROPERTY AND CAPITAL DISTINGUISHED (5) The right is not subject to attachment or
execution, except on claim against the
Partnership capital Partnership property partnership. In case of such attachment, the
partners, or any of them, or the
With constant Value varies with representatives of a deceased partner, cannot
value market conditions claim any right under the homestead or
exemption laws.
Includes only Includes the
actually contributions and (6) The right is not subject to legal support
contributed and property acquired by under Article 291 [Art. 1811].
promised capital the partnership

INTEREST IN PARTNERSHIP
OWNERSHIP OF CERTAIN PROPERTIES A partner’s interest in the partnership is his
(1) The ownership of property used by the share of the profits and surplus [Art. 1812].
partnership depends on the intention of the
parties, which may be drawn from an express
agreement or their conduct. ASSIGNMENT OF INTEREST

• A partner may allow the property to be Assignment by a partner of his whole interest
used by the partnership without transfer in the partnership, of itself:

of ownership, contributing only the use or (1) Does not dissolve the partnership; or

enjoyment thereof.
(2) Does not entitle the assignee to:
• He may also hold title to partnership
property, without acquiring ownership (a) Interfere in the management or
thereof [Art. 1819]. administration of the partnership business or
affairs;
(2) Property acquired by a partner with
partnership funds is presumed to be (b) Require information or account of
partnership property. 
 partnership; or 

(3) The same presumption also arises when (c) Inspect the partnership books. 

the property is indicated in the partnership
books as partnership asset. 

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It merely entitles the assignee to: (2) A number of partners appointed as


(1) Receive the profits to which the assigning managers, which may be appointed:

partner was entitled; (a) In the articles of partnership; or
(2) In case of fraud in management, avail 
 (b) After constitution of the
himself of the usual remedies; partnership.
(3) In case of dissolution:
(a) Receive his assignor’s interest; POWERS OF A MANAGING PARTNER
and
General rule: The partner designated as
(b) Require an accounting from the manager in the articles may execute all acts
date only of the last account agreed of administration despite opposition by the
to by all 
the partners [Art. 1813]. 
 other partners.
Exception: He cannot do so when he acts in
bad faith.
INTEREST BY PERSONAL CREDITORS
General rule: Partnership creditors are
preferred over the personal creditors of the REVOCATION OF POWER BY MANAGING
partners as regards partnership property. PARTNER
Exception: On due application by any The powers of the managing partner may be
judgment creditor of a partner, a competent revoked:
court may: (1) If appointed in the articles of partnership,
(1) Charge the interest of the partner for the when:
satisfaction of the judgment debt; (a) There is just or lawful cause for
(2) Appoint a receiver of the share of the revocation; and
profits and of any other money due or to fall (b) The partners representing the
due to 
the partner; and 
 controlling interest revoke such
(3) Make all other orders, directions, power.
accounts 
 and inquiries, which the debtor (2) If appointed after the constitution of the
partner might have made, or which the partnership, at any time and for any cause
circumstances may require. 
 [Art. 1800].
The interest charged may be redeemed
before foreclosure or, in case of sale directed
MANAGING BY TWO OR MORE PARTNERS

by the court, may be purchased without
causing dissolution: 
 (1) With separate When there are two or more managing
property, by one or more of the partners; or
 partners appointed, without specification of
(2) With partnership property, by one or more their duties or without a stipulation on how
of the partners, will consent of all, except the each one will act:
debtor partner [Art. 1814]. (1) Each one may separately execute all acts
of administration. 

E. RIGHT TO PARTICIPATE IN (2) If any of them opposes the acts of the
MANAGEMENT others, the decision of the majority prevails. 

Management of the partnership is primarily (3) In case of a tie, the partners owning the
governed by the agreement of the partners in controlling interest will decide [Art. 1801]. 

the articles of partnership. It may be
Requisites:
stipulated that the partnership will be
managed by: (1) Two or more partners have been
(1) All the partners; or appointed 
as managers; 


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(2) There is no specification of their 
evidence against the partnership [Art. 1820].
respective 
duties; and 
 

(3) There is no stipulation that one of them 
 (3) Notice to any partner of any matter
shall not act without the consent of all the relating to partnership affairs is notice to the
others. 
 
partnership [Art. 1821]. 

(4) Wrongful act or omission of any partner
acting for partnership affairs makes the
STIPULATION OF UNANIMITY
partnership liable [Art. 1822]. 

Art. 1802. In case there is a stipulation that
(5) Partnership is bound to make good losses
none of the managing partners shall act
without the consent of others, the 
 for wrongful acts or misapplications of
concurrence of all is necessary for the validity partners [Art. 1823]. 

of the acts, and the absence or disability of
one cannot be alleged, unless there is
imminent danger of grave or irreparable F. RIGHT TO PROFITS AND
injury to the partnership. OBLIGATIONS FOR LOSSES
RULES FOR DISTRIBUTION OF PROFITS AND
LOSSES
MANAGEMENT WHEN MANNER NOT
AGREED UPON The distribution of profits and losses shall be
in accordance with the following rules:
When there is no agreement as to the manner
of management, the following rules apply: (1) They shall be distributed in conformity
with the agreement. 

(1) All the partners are considered agents
(mutual agency). Whatever any one does (2) If only the share in profits has been
alone binds the partnership, unless there is a stipulated, the share in the losses shall be in
timely opposition to the act, under Article the same proportion. 

1801.
(3) In the absence of any stipulation:
(2) Any important alteration in the
immovable property of the partnership, even (a) The share in the profits of the
if useful to the partnership, requires capitalist 
partners shall be in
unanimity. If the alteration is necessary for proportion to their 
contributions.
the preservation of the property, however,
(b) The losses shall be borne by the
consent of the others is not required [De Leon
capitalist partners, also in
(2010)].
proportion to 
the contributions.

If the refusal is manifestly prejudicial to the
partnership, court intervention may be (c) The share of the industrial
sought [Art. 1803]. partners in 
the profits is that
share as may be just and
equitable. If he also contributed
MUTUAL AGENCY capital, he will receive a share of
the profits in proportion to his
In addition to the Article 1801, there is contribution; and 

effectively a mutual agency in the following
cases: (d) The industrial partner, who did
not contribute capital, is not
(1) Partners can dispose of partnership
property even when in partnership name [Art. liable for losses [Art. 1797]. 

1819].
(2) An admission or representation made by 
 EXCLUSION OF PARTNER FROM SHARE
any partner concerning partnership affairs is

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General rule: A stipulation excluding one or


more partners from any share in the profits or IV. Obligations of the
losses is void [Art. 1799].
Partnership/Partners
Exception: A stipulation exempting an
industrial partner from losses is valid, since, if to Third Persons
the partnership fails to realize profits, he can
no longer withdraw his work or labor [De Leon
A. OBLIGATION TO OPERATE UNDER A
(2010)]. FIRM NAME
Art. 1815. Every partnership shall operate
under a firm name, which may or may not
G. OBLIGATION TO RENDER include the name of one or more of the
INFORMATION partners.
Partners shall render on demand true and full Those who, not being members of the
information of all things affecting the partnership, include their names in the firm
partnership to: name, shall be subject to the liability of a
(1) Any partner; partner.

(2) The legal representative of any deceased


partner; or General rule: The partners may adopt any
(3) The legal representative of any partner firm name desired.
under legal disability [Art. 1806]. Exceptions:
• They cannot use a name which is
H. OBLIGATION TO ACCOUNT AND ACT “identical 
or deceptively or confusingly
AS TRUSTEE similar to an existing or corporation [or
partnership] or to any other name already
Every partner must (1) account to the protected by law or is patently deceptive,
partnership for any benefit and (2) hold as confusing or contrary to existing laws”
trustee for it any profits derived by him [Sec. 18, Corporation Code].
without the consent of the other partners:
• Use of names of deceased partner in law
(1) From any transaction connected with the firms is “permissible provided that the
formation, conduct, or liquidation of the firm indicates in all its communications
partnership; or that said partner is deceased” [Rule 3.02,
(2) From any use by him of its property [Art. Code of 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].

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NATURE OF INDIVIDUAL LIABILITY LIABILITY OF PARTNERS FOR PARTNERSHIP


CONTRACTS
SUBSIDIARY
ACTS APPARENTLY FOR THE CARRYING ON
General rule: The partners are liable
OF USUAL BUSINESS
subsidiarily. It only arises upon exhaustion of
partnership assets [Cia. Maritima v. Muñoz General rule: Any act of a partner which is
(1907)]. apparently for the carrying on of the usual
business of the partnership binds the latter,
Exceptions:
including the execution of any instrument in
(1) A third person who transacted with the the partnership name.
partnership can hold the partners solidarily
Exception: The partnership is not bound when
(rather than subsidiarily) liable for the whole
the following concur:
obligation if the case falls under Articles 1822
or 1823 [Muñasque v. CA (1985)]. The (1) The partner has in fact no authority to act;
provisions refer to wrongful acts or omission and
and misapplication of money or property by a
(2) The person with whom he deals has
partner in the ordinary course of business.
knowledge of such fact [Art. 1818, par. 1].
(2) A person admitted as a partner into an
existing partnership is liable for all the
obligations of the partnership arising before ACTS NOT APPARENTLY FOR CARRYING ON
his admission, except that his liability shall be OF THE USUAL BUSINESS
satisfied only out of partnership property,
General rule: Acts of a partner which is not
unless there is a stipulation to the contrary
apparently for carrying on of the usual
[Art. 1826]. In other words, he is not
business does not bind the partnership.
personally liable.
Exception: The partnership is bound if the
other partners authorized him to do the act
PRO RATA [Art. 1818, par. 2].
The partners are liable pro rata.
This liability
is not increased even when a partner: ACTS OF STRICT DOMINION
(1) Has left the country and the payment of his General Rule: One or some of the partners
share of the liability cannot be enforced [Co- have no authority to do the following acts of
Pitco v. Yulo (1907)]; or strict dominion:
(2) His liability is condoned by the creditor (1) Assign the partnership property in trust
[Island Sales v. United Pioneers (1975)]. for 
creditors or on the assignee’s promise to

pay the debts of the partnership; 

LIABILITY OF AN INDUSTRIAL 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
losses, is not exempt from this liability. impossible 
to carry on the ordinary business
However, he can recover the amount he has
of the 
partnership; 

paid from the capitalist partners, unless there
is a stipulation to the contrary [Cia. Maritima (4) Confess a judgment; 

v. Muñoz (1907)].
(5) Enter into a compromise concerning a
partnership claim or liability; 

STIPULATION AGAINST INDIVIDUAL (6) Submit a partnership claim or liability to
LIABILITY
arbitration; 

Any stipulation against this liability is:
(7) Renounce a claim of the partnership. 

(1) Void against third persons; but
(2) Valid among the partners[Art.1817].
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Exceptions: They may do so if:



(1) Authorized by all the partners; or
 Where the title is in the name of one or more
or all the partners, or in a third person in trust
(2) The other partners have abandoned the for the partnership a partner authorized to
business [Art. 1818, par. 3]. carry on the usual business may convey
equitable title in the partnership name or in
his own name [Art. 1819, par. 4].
ACTS IN CONTRAVENTION OF A
RESTRICTION Where the title is in the names of all the
partners, a conveyance executed by all of
Any act of a partner in contravention of a them passes all the rights to the property [Art.
restriction on authority does not bind the 1819, par. 5].
partnership to persons having knowledge of
the restriction [Art. 1818, par. 4].
LIABILITY OF PARTNERSHIP
CONVEYANCE OF PARTNERSHIP REAL FOR ADMISSION BY A PARTNER
PROPERTY An admission or representation by any
TITLE IN PARTNERSHIP NAME partner may be used as evidence against the
partnership when:
Any partner may convey the real property in
the name of the partnership.
The partnership (1) It concerns partnership affairs;
can recover it, except when: (2) Such affairs are within the scope of his
(1) The act of the partner binds the authority [Art. 1820].
partnership, 
when he has authority to carry
out the usual business of the partnership, LIABILITY OF PARTNERSHIP FOR
under Article 1818, 1st par.; or 
 WRONGFUL ACTS OF A PARTNER
(2) If not so authorized, the property has The partnership is solidarily liable with the
been conveyed by the grantee, or a person partner who causes loss or injury to any
claiming under him, to a holder for value and person not a partner, or incurs any penalty
without knowledge that the partner exceeded through any wrongful act or omission:
his authority [Art. 1819, par. 1]. 

(1) In the ordinary course of the business of
A partner authorized to carry out the usual the partnership; or
business may convey, in his own name, the
equitable interest of the partnership [Art. 1819, (2) Not in such ordinary course of business,
par. 2]. but with the authority of his co-partners [Art.
1822].

TITLE IN THE NAME OF OTHER PERSONS


LIABILITY OF THE PARTNERSHIP FOR
Where the title is in the name of one or more MISAPPLICATION OF MONEY OR PROPERTY
but not all the partners, and the record does
not disclose the right of the partnership: The partnership is liable for losses suffered by
a third person whose money or property was:
(1) The partners having title may convey title.
(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
carry on the usual business of the partnership, apparent authority; and
unless the purchaser or his assignee is:
(b) Misapplied it; 

(a) A holder for value; and
(2) Received by the partnership:
(b) Without knowledge that the act
exceeded authority [Art. 1819, par. 4]. (a) In the course of its business; and

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(b) Misapplied by any partner while it (2) No partnership liability results, he is liable
is in the custody of the partnership [Art. 1823]. pro rata with the other persons, if any, so

 consenting to the contract or representation.
LIABILITY OF THE OTHER PARTNERS UNDER (3) When there are no such other persons, he
ART. 1822 AND 1823 is separately liable [Art. 1825, par. 1].
All partners are solidarily liable with the
partnership for its liabilities under Articles EFFECT ON EXISTING PARTNERSHIP OR
1822 and 1823 [Art. 1824]. OTHER PERSONS NOT ACTUAL PARTNERS
This is without prejudice to the guilty partner (1) When a person has been represented to
being liable to the other partners. However, be a partner (a) in an existing partnership, or
as 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
them to the same extent and in the same
LIABILITY IN CASE OF PARTNERSHIP BY manner as though he were a partner in fact,
ESTOPPEL with respect to persons who rely upon the
PARTNER BY ESTOPPEL representation. 

A partner by estoppel is a person who, by (2) When all the members of the existing
words spoken or written or by conduct (1) partnership consent to the representation, a
represents himself as a partner or (2) partnership act or obligation results. 

consents to another representing him to
anyone as a partner: (3) In all other cases, it is the joint act or
obligation of the person acting and the
(1) In an existing partnership; or persons consenting to the representation [Art.
(2) With one or more persons not actual 1825, par. 2]. 

partners [Art. 1825, par. 1].

NATURE OF LIABILITY
LIABILITY OF A PARTNER BY ESTOPPEL Summarizing Article 1825, a partner by
PERSONAL REPRESENTATION estoppel is liable in the following manner:
A partner by estoppel is liable to any such (1) He is liable as though he were a partner
persons: 
 (1) To whom such representation when:
has been made; and
(2) Who has, on the (a) There is an existing partnership; 

faith of such representation, given credit to
the actual or apparent partnership [Art. 1825, (b) All the partners consented to the
par. 1]. 
representation; and 

(c) A partnership liability results. 

PUBLIC REPRESENTATION (2) He is liable jointly and pro rata (as though
he were a partner in fact) with those who
If he has made such representation or
consented to the representation when:
consented to its being made in a public
manner, whether the representation has or (a) There is an existing partnership
has not been (personally) made or but not 
all the partners consented; or
communicated to such persons so giving
credit by or with his knowledge, and: (b) There is no existing partnership
and all those represented as partners
(1) Partnership liability results, he is liable as consented to the representation. 

though he were an actual member of the
partnership. (3) He is liable separately when:

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(a) There is an existing partnership


but none of the partners consented; or 

V. Dissolution and
(b) There is no existing partnership Winding Up
and not all of those represented as partners
consented to the representation.
A. CONCEPTS
LIABILITY OF AN INCOMING PARTNER Dissolution – the change in the relation of the
partners caused by any partner ceasing to be
A person admitted as a partner is liable: associated in the carrying on of the business.
(1) For obligations incurred subsequent to his It is different from the winding-up of the
admission as the other partners are liable; business [Article 1828]. It does not terminate
the partnership, which continues until the
(2) For obligations incurred before his winding up of partnership affairs is
admission, but will be satisfied only out of the completed [Article 1829].
partnership property, unless otherwise
stipulated that he fully assumes such
obligations. Winding up – the actual process of settling
the partnership business or affairs after
dissolution. It involves collection and
Ratio: distribution of partnership assets, payment of
(1) The new partner partakes of the benefits debts, and determination of the value of the
of the partnership property and an already interest of the partners in the partnership.
established business. 

(2) He has every means of obtaining full Termination – the point in time when all
knowledge of the debts of the partnership partnership affairs are completely wound up
and remedies that amply protect his interest and finally settled. It signifies the end of the
[De Leon (2010)]. 
 partnership life [De Leon (2010)].

NOTICE TO OR KNOWLEDGE OF THE B. CAUSES OF DISSOLUTION


PARTNERSHIP B.1. WITHOUT VIOLATION OF THE
The following operate as notice to or AGREEMENT
knowledge of the partnership: 1) By the termination of the definite term or
(1) Notice to any partner of any matter particular undertaking specified in the
relating to partnership affairs; 
 agreement;

(2) Knowledge of the partner acting in the
 2) By the express will of any partner, who
must act in good faith, when no definite
particular matter acquired while a partner; 

term or particular is specified.
(3) Knowledge of the partner acting in the 3) By the express will of all the partners who
particular matter then present to his mind; 
 have not assigned their interests or
or (4) Knowledge of any other partner who
 suffered them to be charged for their
reasonably could and should have separate debts, either before or after the
communicated it to the acting partner. 
 termination of any specified term or
particular undertaking;
4) By the expulsion of any partner from the
These do not apply in case of fraud on the
business bona fide in accordance with
partnership committed by or with the consent
such a power conferred by the agreement
of the partner [Art. 1821].
between the partners [Article 1830(1)].

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If, after the expiration of the definite term or


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


not been advertised in a newspaper
C. EFFECTS OF DISSOLUTION of general circulation in the place [or
C.1. ON AUTHORITY OF THE PARTNERS in each place if more than one] at
which the partnership business was
In general, upon dissolution, the authority of
regularly carried on [Article 1834, 1st
the partners to represent the partnership is
par.].
confined only to acts necessary to:
(1) Wind up partnership affairs; or
Note the character of the notice required:
(2) Complete transactions begun but not
then finished [Article 1832, 1st. par.]. • As to persons who extended credit to the
partnership prior to dissolution, notice
must be actual.
C.1.A. WITH RESPECT TO PARTNERS
• As to persons who merely knew of the
The authority of partners to act for the existence of the partnership, publication
partnership is terminated, with respect to in a newspaper of general circulation in
partners: the place of business of the partnership is
(1) When the dissolution is not by the act, sufficient.
insolvency or death of a partner; or
(2) When the dissolution is by such act, C.2. ON LIABILITY FOR TRANSACTIONS
insolvency or death, when the partner AFTER DISSOLUTION
acting for the partnership has knowledge
or notice of the cause [Articles 1832 and The liability of a partner, in general, is the
1833]. same as in ordinary contracts (pro rata and
subsidiary).

In other cases, each partner is still liable for


his share in the liability created by the partner In the following cases, however, the liability
acting for the partnership [Article 1833]. shall be satisfied out of the partnership
assets alone (i.e., there is no subsidiary
liability):
C.1.B. WITH RESPECT TO THIRD PERSONS 1) When the partner had been, prior to the
With respect to persons not partners: dissolution, unknown as a partner to the
person with whom the contract is made;
1) After dissolution, a partner can bind the
partnership by any act appropriate for: 2) When the partner had been, prior to the
dissolution, so far unknown or inactive in
(a) Winding up partnership affairs; or partnership affairs that the business
(b) Completing transactions reputation of the partnership could not be
unfinished at dissolution. said to have been in any degree due to his
connection with it [Article 1834].
2) He can also bind it by any transaction
which would bind the partnership as if
dissolution had not taken place, provided the Any act of a partner after dissolution in no
other party to the transaction: case binds the partnership in the following
(a) Had extended credit to the cases:
partnership prior to dissolution and 1) Where the partnership is dissolved because
had no knowledge or notice thereof; it is unlawful to carry on the business, unless
or the act is appropriate for winding up
(b) Had not so extended credit but partnership affairs;
had known of the partnership prior to 2) Where the partner has become insolvent;
dissolution, and having no knowledge
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3) Or, where the partner has no authority to 3. The person or partnership continuing the
wind up partnership affairs, except by a business.
transaction with one who:
a) Had extended credit to the
Such agreement may be inferred from the
partnership prior to dissolution and
course of dealing between the creditor having
had no knowledge or notice of his
knowledge of the dissolution and the person
want of authority; or
or partnership continuing the business.
b) Had not extended credit to the
partnership prior to dissolution, and,
having no knowledge or notice of his In case of dissolution by death, the individual
want of authority, the fact of his want property of a deceased partner is liable for
of authority has not been advertised obligations of the partnership incurred while
[Article 1834]. he was a partner, after payment of his
separate debts [Article 1835].

Article 1834 does not affect the liability under


Article 1825 of any person who, after D. WINDING UP PARTNERS
dissolution, represents himself or consents to
D.1. WHO MAY WIND UP
another representing him as a partner in a
partnership engaged in carrying on business The following partners have the right to wind
[Article 1834]. up the partnership affairs:
1) Those designated in an agreement;
C.3. ON LIABILITY FOR CONTRACTS AFTER 2) Those who have not wrongfully
DISSOLUTION BY SPECIFIC CAUSES dissolved the partnership; or
General rule: A contract entered into by a 3) The legal representative of the last
partner acting for the partnership after surviving partner, who was not
dissolution by act, death or insolvency of a insolvent.
partner binds the other partners.
Exceptions:
Any partner or his legal representative or
• The dissolution being by act of any assignee may obtain winding up by the court,
partner, the partner acting for the upon cause shown [Article 1836].
partnership had knowledge of the
dissolution; or
D.2. MANNER OF WINDING UP
• The dissolution being by death or
insolvency of a partner, the partner acting 1. Extrajudicial, by the partners
for the partnership had knowledge or themselves; or
notice of the death or insolvency [Article 2. Judicial, under the control and
1833]. direction of the proper court.

C.4. ON EXISTING LIABILITY OF


PARTNERS The action for liquidation of the partnership is
personal. The fact that sale of assets,
General rule: Dissolution does not of itself including real property, is involved does not
discharge the existing liability of any partner. change its character, such sale being merely
a necessary incident of the liquidation of the
partnership, which should precede and/or is
Exception: A partner may be relieved when part of its process of dissolution [Claridades v.
there is an agreement to that effect between: Mercader (1966)].
1. Himself;
2. The partnership creditor; and
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E. RIGHTS OF PARTNERS IN CASE OF of his interest in the partnership, less


DISSOLUTION any damages recoverable, and
indemnity against all present or
E.1. DISSOLUTION WITHOUT VIOLATION future partnership liabilities [Article
OF THE AGREEMENT 1837(2)].
Each partner may have:
1) The partnership property applied to II. PARTNER WHO CAUSED THE
discharge the partnership liabilities; DISSOLUTION
and
The partner who caused the dissolution
2) The surplus applied in cash to the net wrongfully has the following rights:
amount owing to the respective
partners. 1) If the business is not continued, all
the rights Article 1837, 1st par., subject
to liability for damages;
This is a right as against his co-partners and 2) If the business is continued, the right,
all partners claiming through them in respect as against his co-partners and all
of their interests in the partnership. It cannot claiming through them, to:
be availed if there is an agreement to the
contrary [Article 1837 (1)]. a) Ascertainment, without
considering the value of the
goodwill of the business, and
E.2. DISSOLUTION IN CONTRAVENTION payment to him in cash the value
OF THE AGREEMENT of his partnership interest, less
any damage, or have the payment
I. PARTNER WHO DID NOT CAUSE THE secured by a bond approved by
DISSOLUTION the court; and
The partners who did not cause the b) Be released from all existing
dissolution wrongfully has the following liabilities of the partnership
rights: [Article 1837(3)].
1) To demand the right under Article
1837, 1st par.;
The goodwill of a business may be defined to
2) To be indemnified for damages for be the advantage which it has from its
breach of the agreement against the establishment or from the patronage of its
partner who caused the dissolution customers, over and above the mere value of
wrongfully [Article 1837(1)]; its property and capital. The goodwill [which
3) To continue the business: includes the firm name] is part of the
partnership assets and may be subject of sale
a. In the same name; [De Leon (2010)].
b. By themselves or jointly with
others;
F. RIGHTS OF PARTNERS IN CASE OF
c. During the agreed term for
the partnership. RESCISSION
A partner, who is induced by fraud or
misrepresentation to become such partner,
For the purpose of continuing the business, may rescind the contract. Without prejudice
the said partners may possess the to any other right, he is entitled:
partnership property provided:
1) To a lien on, or right of retention of,
1. They secure the payment by bond the surplus of the partnership
approved by the court; or property after satisfying the
2. They pay any partner who has caused partnership liabilities to third persons
the dissolution wrongfully the value for any sum of money paid by him for
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the purchase of an interest in the


partnership and for any capital or
G.3. ENFORCEMENT OF CONTRIBUTION
advances contributed by him;
The following persons have the right to
2) To stand, after all liabilities to third
enforce the contributions:
persons have been satisfied, in the
place of the creditors of the 1. An assignee for the benefit of creditors;
partnership for any payments made
2. Any person appointed by the court; or
by him in respect of the partnership
liabilities; and 3. To the extent of the amount which he has
paid in excess of his share of the
3) To be indemnified by the person
partnership liability, any partner or his
guilty of the fraud or making the
legal representative [Article 1839(5) and
representation against all debts and
(6)].
liabilities of the partnership [Article
1838].
The individual property of a deceased partner
shall be liable for the contributions [Article
G. SETTLING OF ACCOUNTS BETWEEN 1839(7)].
PARTNERS
Subject to any agreement to the contrary, the
following rules shall be observed in settling G.4. ORDER OF APPLICATION OF ASSETS
accounts between partners after dissolution. The partnership liabilities shall rank, in order
of payment, as follows:
G.1. COMPOSITION OF PARTNERSHIP 1) Those owing to creditors other than
ASSETS partners;
1) The partnership property; and 2) Those owing to partners other than
for capital and profits;
2) The contributions of the partners
necessary for the payment of all the 3) Those owing to partners in respect of
liabilities [Article 1839(1)]. capital;
4) Those owing to partners in respect of
profits [Article 1839(2)].
In accordance with the subsidiary liability of
the partners, the partnership property shall
be applied first to satisfy any liability of the G.5. DOCTRINE OF MARSHALING OF
partnership [Article 1839(3)]. ASSETS
When partnership property and the individual
G.2. AMOUNT OF CONTRIBUTION FOR properties of the partners are in possession of
LIABILITIES a court for distribution:
The rules for distribution of losses shall 1. Partnership creditors have priority on
determine the contributions of the partners partnership property;
[Article 1839(4)]. As such: 2. Separate creditors have priority on
1) The contribution shall be in individual property, saving the rights
conformity with the agreement. of lien of secured creditors.
2) If only the share in profits has been 3. Anything left from either shall be
stipulated, the contribution shall be applied to satisfy the other [Article
in the same proportion. 1839(8)].
3) In the absence of any stipulation, the
contribution shall be in proportion to G.6. DISTRIBUTION OF PROPERTY OF
the capital contribution [Article 1797]. INSOLVENT PARTNER
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Where a partner has become insolvent or his and business is continued with the
estate is insolvent, the claims against his consent of the retired partner or the
separate property shall rank in the following representative of the deceased
order: partner, without assignment of their
rights to partnership property.
1) Those owing to separate creditors;
3. When the cause of dissolution is the
2) Those owing to partnership creditors;
assignment by all the partners or
3) Those owing to partners by way of their representatives of their rights in
contribution [Article 1839(9)]. partnership property to one or more
third persons who promise to pay the
debts and who continue the business
H. RIGHTS OF CREDITORS OF of the partnership [Article 1840, 1st
DISSOLVED PARTNERSHIP par.].
H.1. AS CREDITORS OF THE NEW
PARTNERSHIP H.2. LIABILITY OF A NEW PARTNER
In the following cases, creditors of the The liability to the creditors of the dissolved
dissolved partnership are also creditors of the partnership of a new partner in the
person or partnership continuing the partnership continuing the business shall be
business: satisfied out of the partnership property
1. When the business is continued alone. However, he may, through agreement,
without liquidation, and the cause of assume individual liability [Article 1840, 2nd
dissolution is: par.].
a. Admission of a new partner
into the existing partnership; H.3. PRIORITY OF CREDITORS OF
b. Retirement or death of any DISSOLVED PARTNERSHIP
partner, and his rights to Creditors of the dissolved partnership have
partnership property are prior right to any claim of the retired partner
assigned to [1] two or more of or the representative of the deceased partner
the partners, or [2] one or against the person or partnership continuing
more of the partners and one the business [Article 1840, 3rd par.].
or more third persons;
This is without prejudice to the right of
c. Retirement of all but one creditors to set aside any assignment on the
partner, and their rights to ground of fraud [Article 1840, 4th par.].
partnership property are
assigned to the remaining
partner, who continues the I. RIGHTS OF A RETIRED PARTNER OR
business, either alone or with
A REPRESENTATIVE OF DECEASED
others;
PARTNER
d. Wrongful dissolution by any
partner, and the remaining Unless otherwise agreed upon, when any
partners continue the partner retires or dies, and the business is
business, either alone or with continued without any settlement of accounts
others; as between him or his estate and the person
or partnership continuing the business, he or
e. Expulsion of a partner, and his legal representative, as against such
the remaining partners person or partnership, subject to the prior
continue the business, either rights of creditors of the dissolved
alone or with others. partnership:
2. When the cause of dissolution is the
retirement or death of any partner,

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1) May have the value of his interest at


the date of dissolution ascertained; VI. Limited Partnership
and A partnership;
2) Shall receive as an ordinary creditor: 1) Formed by two or more persons;
a) An amount equal to the value of 2) Having as members:
his interest in the dissolved
partnership with interest; or a) One or more general partners;
and
b) At his option or at the option of his
legal representative, in lieu of interest, b) One or more limited partners.
the profits attributable to the use of
his right in the property of the
dissolved partnership [Article 1841]. The limited partners as such shall not be
bound by the obligations of the partnership
[Article 1843].
J. RIGHT TO AN ACCOUNT
In the absence of any agreement to the B. CHARACTERISTICS
contrary, the right to an account of his
interest shall accrue to any partner, or his A limited partnership is formed by
legal representative at the date of dissolution, compliance with the statutory requirements
as against: [Article 1844].
1) The winding up partners; The business is controlled or managed by one
or more general partners, who are personally
2) The surviving partners; or liable to creditors [Articles 1848 and 1850].
3) The person or partnership continuing One or more limited partners contribute to
the business [Article 1842]. the capital and share in the profits but do not
manage the business and are not personally
liable for partnership obligations beyond
their capital contributions [Articles 1845, 1848
and 1856].
Obligations or debts are paid out of the
partnership assets and the individual
property of the general partners [Article 1843].
The limited partners may have their
contributions back subject to conditions
prescribed by law [Articles 1844 and 1957].

A limited partnership has the following


advantages:
1) For general partners, to secure
capital from others while retaining
control and supervision for the
business;
2) For limited partners, to have a share
in the profits without risk of personal
liability.

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C. GENERAL AND LIMITED PARTNERS Assignability of interest


DISTINGUISHED
Not assignable Assignable
General partner Limited partner

Extent of liability
D. GENERAL AND LIMITED
Personally, but Liable only to the PARTNERSHIP DISTINGUISHED
subsidiarily, liable extent of his capital
General Limited
for obligations of contributions
the partnership partnership partnership

Right to participate in management Creation

Unless otherwise No right to participate May be Partners must: [1] sign


agreed upon, all in management constituted in any and swear to a
general partners form, subject to certificate in compliance
have an equal right exceptions with Article 1844; and [2]
to manage the file the certificate for
partnership record in the SEC

Nature of contribution Composition

Cash, property or Cash or property only, Only general One or more general,
industry not industry partners and one or more limited
partners
Proper party in proceedings by or against
partnership Firm name

Proper party Not proper party, Must contain the Must include the word
unless [1] he is word “Company” “Limited” [SEC Memo.
also a general partner; [SEC Memo Circ Circ. No. 14-00]
or [2] where the object No. 14-00], except
of the proceedings is for professional
to enforce his right partnerships Must not include name
against or liability to of limited partners,
the partnership unless: [1] it is also the
May or may not surname of a general
Firm name include the name partner, or [2] prior to
of one or more of the time when the
Name may appear Name must not appear the partners limited partner became
in the firm name in the firm name such, the business has
been carried on under a
Prohibition to engage in other business name in which his
surname appeared
Prohibited [subject Not prohibited
to qualifications] Rules governing dissolution
Effect of retirement, death, insanity or Articles1828-1842 Articles 1860-1863
insolvency

Dissolves Does not dissolve


partnership partnership; rights E. FORMATION
transferred to executor E.1. GENERAL REQUIREMENTS
or administrator for
selling his estate Two or more persons desiring to form a
limited partnership shall:
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1) Sign and swear to a certificate stating E.4. FALSE STATEMENT IN THE


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

Exceptions:
E.5. GENERAL AND LIMITED PARTNER AT
1. It is also the surname of a general THE SAME TIME
partner; or
A person may be a general and a limited
2. Prior to the time when the limited partner in the same partnership at the same
partner became such, the business time. This fact must be stated in the
had been carried on under a name in certificate.
which his surname appeared.
A person who is a general, and also at the
same time a limited partner, shall have all
A limited partner whose surname appears in the rights and powers, and be subject to all
a partnership name contrary to this the restrictions of a general partner, except
prohibition is liable as a general partner to that, in respect to his contribution as a
partnership creditors who extend credit limited partner, he shall have the rights
without actual knowledge that he is not a against the other members which he would
general partner. have had if he were not also a general partner
[Article 1853].

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F. MANAGEMENT
Only general partners have the right to A limited partner is liable to the partnership:
manage the partnership. If a limited partner 1) For the difference between his actual
takes part in the control of the business, he contribution and that stated in the
becomes liable as a general partner [Article certificate as having been made; and
1848].
2) For any unpaid contribution which he
A general partner shall have the rights and agreed in the certificate to make in
powers and be subject to all restrictions and the future at the time and on the
liabilities of a partner in a partnership without conditions stated in the certificate
limited partners. Thus, he has general [Article 1858, 1st par.].
authority over the business.
However, written consent or ratification by all
limited partners is necessary to authorize the He holds as trustee for the partnership:
general partners to: 1) Specific property stated in the
1. Do any act in contravention of the certificate as contributed by him, but
certificate; which was not contributed or which
has been wrongfully returned; and
2. Do any act which would make it
impossible to carry on the ordinary 2) Money or other property wrongfully
business of the partnership; paid or conveyed to him on account of
his contribution [Article 1858, 2nd
3. Confess a judgment against the par.].
partnership;
4. Possess partnership property, or
assign their rights in specific property, These liabilities can be waived or
for other than a partnership purpose; compromised only by the consent of all
members. Such waiver or compromise,
5. Admit a person as a general partner; however, shall not affect the right to enforce
6. Admit a person as a limited partner, said liabilities of a creditor:
unless the right to do so is given in 1) Who extended credit; or
the certificate;
2) Whose claim arose, after the filing or
7. Continue the business with before a cancellation or amendment
partnership property on the death, of the certificate, to enforce such
retirement, insanity, civil interdiction liabilities [Article 1858, 3rd par.].
or insolvency of a general partner,
unless the right so to do is given in
the certificate Even after a limited partner has rightfully
received the return in whole or in part of his
capital contribution, he is still liable to the
G. OBLIGATIONS OF A LIMITED partnership for any sum, not in excess of such
PARTNER return with interest, necessary to discharge
G.1. OBLIGATIONS RELATED TO its liabilities to all creditors:
CONTRIBUTION 1) Who extended credit; or
The contributions of a limited partner may be 2) Whose claims arose before such
cash or other property, but not services return [Article 1858, 4th par.].
[Article 1845].
A limited partner is liable for partnership
obligations when he contributes services A person who has contributed capital to a
instead of only money or property to the partnership, erroneously believing that he
partnership [De Leon (2010)]. has become a limited partner, but his name
appears in the certificate as a general partner
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or he is not designated as a limited partner, is Note: In a general partnership, the interest


not personally liable as a general partner by may be redeemed with partnership property
reason of his exercise of the rights of a limited with the consent of all the partners whose
partner, provided: interests are not charged [Article 1814].
1) On ascertaining the mistake, he
promptly renounces his interest in the
profits of the business or other H. RIGHTS OF A LIMITED PARTNER
compensation by way of income H.1. IN GENERAL
[Article 1852];
A limited partner shall have the same rights
2) He does not participate in the as a general partner to:
management of the business [Article
1) Require that the partnership books
1848]; and
be kept at the principal place of
3) His surname does not appear in the business of the partnership;
partnership name [Article 1846].
2) To inspect and copy any of them at a
reasonable hour;
G.2. LIABILITY TO PARTNERSHIP 3) To demand true and full information
CREDITORS of all things affecting the partnership;
General rule: A limited partner is not liable as 4) To demand a formal account of
a general partner. His liability is limited to the partnership affairs whenever
extent of his contributions [Article 1843]. circumstances render it just and
reasonable;

Exceptions: The limited partner is liable as a 5) To ask for dissolution and winding up
general partner when: by decree of court;

1) His surname appears in the 6) To receive a share of the profits or


partnership name, with certain other compensation by way of
exceptions [Article 1846, 2nd par.]. income; and

2) He takes part in the control of the 7) To receive the return of his


business [Article 1848]. contribution provided the partnership
assets are in excess of all its liabilities
[Article 1851].
G.3. LIABILITY TO SEPARATE CREDITORS
On due application to a court of competent H.2. RIGHT TO TRANSACT BUSINESS WITH
jurisdiction by any separate creditor of a THE PARTNERSHIP
limited partner, the court may:
A limited partner may:
1. Charge his interest with payment of
the unsatisfied amount of such claim; 1) Loan money to the partnership;

2. Appoint a receiver; and 2) Transact other business with the


partnership; and
3. Make all other orders, directions and
inquiries which the circumstances of 3) Receive a pro rata share of the
the case may require. partnership assets with general
creditors if he is not also a general
partner [Article 1854, 1st par.].
The interest so charged may be redeemed
with the separate property of any general
partner, but may not be redeemed with Limitations: A limited partner, with respect to
partnership property [Article 1862]. his transactions with the partnership, cannot:
1) Receive or hold as collateral security
any partnership property; or
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2) Receive any payment, conveyance, or when not all the other partners consent],
release from liability if it will prejudice when (1) and (2) above are complied with:
the right of third persons [Article 1854,
1) On the dissolution of the partnership;
1st par.].
2) Upon the arrival of the date specified
in the certificate for the return; or
Violation of the prohibition is considered a
3) After the expiration of a 6-month
fraud on the creditors of the partnership
notice in writing given by him to the
[Article 1854, 2nd par.].
other partners, if no time is fixed in
the certificate for:
H.3. RIGHT TO SHARE IN PROFITS a. The return of the
contribution; or
A limited partner may receive from the
partnership the share of the profits or the b. The dissolution of the
compensation by way of income stipulated partnership [Article 1857, 2nd
for in the certificate. par.].

This right is subject to the condition that General rule: A limited partner, irrespective of
partnership assets will still be in excess of the nature of his contribution has only the
partnership liabilities after such payment right to demand and receive cash in return for
[Article 1856]. The partnership liabilities being his contribution.
referred to exclude the liabilities to the
Exceptions: He may receive his contribution in
limited and general partners.
a form other than cash when:
1) There is a statement in the certificate
Ratio: Otherwise, he will receive a share to to the contrary; or
the prejudice of third-party creditors.
2) All the members of the partnership
consent [Article 1857, 3rd par.].
H.4. RIGHT TO RETURN OF
CONTRIBUTION
H.5. PREFERENCE OF LIMITED PARTNERS
A limited partner may have his contributions
General rule: The limited partners stand on
withdrawn or reduced when:
equal footing.
(1) All the liabilities of the partnership,
Exception: By an agreement of all the
except liabilities to general partners
partners [general and limited] in the
and to limited partners on account of
certificate, priority or preference may be given
their contributions, have been paid or
to some limited partners over others with
there remains property of the
respect to:
partnership sufficient to pay them;
1) The return of contributions;
(2) The consent of all members is had,
unless the return may be demanded 2) Their compensation by way of
as a matter of right; and income; or
(3) The certificate is cancelled or so 3) Any other matter [Article 1855].
amended as to set forth the
withdrawal or reduction [Article 1857,
1st par.]. H.6. RIGHT TO ASSIGN INTEREST
The interest of a limited partner is assignable.
The assignee may become:
The return of his contributions may be
demanded, as a matter of right [i.e., even A substituted limited partner; or
A mere assignee.
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A substituted limited partner is a person I. DISSOLUTION


admitted to all the rights of a limited partner
who has died or has assigned his interest in a A limited partnership is dissolved in much the
partnership. He has all the rights and powers, same way and causes as an ordinary
and is subject to all the restrictions and partnership [De Leon (2010)].
liabilities of his assignor, except those
liabilities which:
General rule: The retirement, death,
1) The assignee was ignorant of; and insolvency, insanity or civil interdiction of a
2) Cannot be ascertained from the general partner dissolves the partnership.
certificate [Article 1859, 2nd and 6th Exception: It is not so dissolved when the
pars.i.] business is continued by the remaining
general partners:

An assignee is only entitled to receive the 1) Under a right to do so stated in the


share of the profits or other compensation by certificate; or
way of income, or the return of contribution, 2) With the consent of all members
to which the assignor would otherwise be [Article 1860].
entitled. He has no right:
1) To require any information or account
Upon the death of a limited partner, his
of the partnership transactions;
executor or administrator shall have:
2) To inspect the partnership books
1) All the rights of a limited partner for
[Article 1859, 3rd par.].
the purpose of settling his estate; and
2) The power to constitute an assignee
An assignee has the right to become a as a substituted limited partner, if the
substituted limited partner if: deceased was so empowered in the
1) All the partners consent thereto; or certificate.

2) The assignor, being empowered to do


so by the certificate, gives him that The estate of a deceased limited partner shall
right [Article 1859, 4th par.]. be liable for all his liabilities as a limited
partner [Article 1861].

An assignee becomes a substituted limited


partner when the certificate is appropriately J. SETTLEMENT OF ACCOUNTS
amended [Article 1859, 5th par.].
J.1. ORDER OF PAYMENT
In settling accounts after dissolution, the
H.7. RIGHT TO ASK FOR DISSOLUTION liabilities of the partnership shall be entitled
A limited partner may have the partnership to payment in the following order:
dissolved and its affairs wound up when: 1) Those to creditors, including limited
1) He rightfully but unsuccessfully partners except those on account of
demands the return of his their contributions, in the order of
contribution; or priority as provided by law;

2) He has a right to contribution but his 2) Those to limited partners in respect


contribution is not paid because the to their share of the profits and other
partnership property is insufficient to compensation by way of income in
pay its liabilities [Article 1857, 4th their contributions;
par.]. 3) Those to limited partners in respect
to the capital of their contributions;
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4) Those to general partners other than sentenced to civil interdiction and the
for capital and profits; business is continued;
5) Those to general partners in respect 6) There is a change in the character of
to profits; the business of the partnership;
6) Those to general partners in respect 7) There is a false or erroneous
to capital [Article 1863, 1st par.]. statement in the certificate;
Note: In settling accounts of a general 8) There is a change in the time as
partnership, those owing to partners in stated in the certificate for the
respect to capital enjoy preference over those dissolution of the partnership or for
in respect to profits. the return of a contribution;
9) A time is fixed for the dissolution of
the partnership, or the return of a
J.2. SHARE IN THE PARTNERSHIP ASSETS
contribution, no time having been
The share of limited partners in respect to specified in the certificate; or
their claims for capital, profits, or for
10) The members desire to make a
compensation by way of income, is in
change in any other statement in the
proportion of their contribution, unless:
certificate in order that it shall
1) There is a statement in the certificate accurately represent the agreement
as to their share in the profits; or among them [Article 1864].
2) There is a subsequent agreement
fixing their share [Article 1863].
K.3. REQUIREMENTS FOR AMENDMENT
OR CANCELLATION
K. AMENDMENT OR CANCELLATION To amend or cancel a certificate:
OF CERTIFICATE 1. The amendment or cancellation must
K.1. CANCELLATION OF CERTIFICATE be in writing;
The certificate shall be cancelled when: 2. It must be signed and sworn to by all
the members including the new
1) The partnership is dissolved; or members, and the assigning limited
2) All limited partners cease to be such partner in case of substitution or
limited partners. addition of a limited or general
partner; and
3. The writing to amend (with the
K.2. AMENDMENT OF CERTIFICATE certificate, as amended) or to cancel
A certificate shall be amended when: must be filed for record in the SEC.
1) There is a change in the name of the When a person required to sign the writing, a
partnership or in the amount or person desiring the cancellation or
character of the contribution of any amendment may petition the court to order
limited partner; cancellation or amendment. The court shall
order the SEC to record the cancellation or
2) A person is substituted as a limited amendment if it finds that the petitioner has
partner; a right to have the writing executed.
3) An additional limited partner is From the moment the amended
admitted; certificate/writing or a certified copy of a
4) A person is admitted as a general court order granting the petition for
partner; amendment has been filed, such amended
certificate shall thereafter be the certificate of
5) A general partner retires, dies,
partnership [Article 1865].
becomes insolvent or insane, or is

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CIVIL LAW
CREDIT
TRANSACTIONS

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I. Loan stipulated interest

Contract of Loan vs. Contract to Loan Borrower must return Borrower need only
the same thing pay an equal amount
Contract of Loan Contract to Loan loaned [Art.1933] of the same kind and
quality [Art. 1953]
Real Contract: Consensual Contract:
perfected, not by perfected by mere May involve real or Refers only to
mere consent, but by consent. personal property personal property
delivery of the object [Art.1937]
An accepted promise
of the contract.
to deliver something
by way of Loan for permissive or Loan for consumption
commodatum or temporary use
[Art.1935]
simple loan is binding
upon the parties [Art. Bailor may demand Lender may not
1934] the return of the thing demand its return
loaned before the before the lapse of the
expiration of the term term agreed upon
Contracts Of Loan in case of urgent need
(1) Commodatum – a contract where one [Art.1946]
party delivers to another something not
consumable so that the latter may use Bailor suffers the loss Borrower suffers the
the same for a certain time and return it. of the subject matter loss even if caused
[Art. 1933] since he is the owner exclusively by a
[Art.1942; Art.1174] fortuitous event and
(2) Mutuum (Simple Loan) – a contract where he is not, therefore,
one party delivers to another, money or discharged from his
other consumable thing, upon the duty to pay
condition that the same amount of the
same kind and quality shall be paid. [Art. Purely personal in Not purely personal in
1933] character [Art 1939] character

Both are reciprocal obligations


Commodatum Vs. Mutuum
Commodatum Mutuum
A. COMMODATUM
Ordinarily involves Involves money or Commodatum – an essentially gratuitous
something not other consumable contract where one party (bailor) delivers to
consumable thing another (bailee) something not consumable
[Art.1936] so that the latter may use the same for a
Consumable - cannot
Exception: be used in a manner certain time and return it. [Art. 1933]
consumable goods for appropriate to their
exhibition nature without their
being consumed. A.1. KINDS OF COMMODATUM
[Art. 418] (1) Ordinary commodatum – the use of the
thing by the bailee is for a certain period
Ownership of the Ownership is of time [Art. 1933]
thing loaned is transferred to the
retained by lender borrower (2) Precarium – the bailor may demand the
[Art.1933] thing loaned at will; if any one of the
following is present
Essentially gratuitous May be gratuitous or (a) The duration and purpose of the
[Art.1933] onerous, i.e. with contract is not stipulated, or
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(b) The use of the thing is merely (5) Obligation to pay for the ordinary
tolerated by the owner [Art. 1947] expenses for the use and preservation of
the thing loaned. [Art. 1941]
(6) Obligation to bear equally (with the
A.2. PARTIES
bailor) the extraordinary expenses arising
Bailor: creditor on the occasion of actual use of the thing
by the bailee even though he acted
Bailee: debtor
without fault. [Art. 1949]
Who may be a bailor in commodatum?
Exception: Contrary stipulation
Anyone. The bailor in commodatum need not
(7) Obligation to be solidarily liable when
be the owner of the thing loaned [Art. 1938],
there are two or more bailees to whom a
but as against the bailee, the bailor retains
thing is loaned in the same contract. [Art.
ownership of the thing loaned.
1945]
(8) No obligation to answer for deterioration
A.3. USE BY THE BAILEE of the thing loaned due only to the use
General rule: the bailee acquires permissive thereof and without his fault [Art. 1943]
use of the thing loaned only for himself. He NOTE: If, for the purpose of making use of the
may not lend nor lease the thing loaned to thing loaned, the bailee incurs ordinary or
him to a third person. extraordinary expenses which are neither for
Exception: the members of the bailee’s the use nor the preservation of the thing, he is
household may make use of the thing loaned not entitled to reimbursement. [Art. 1950]

Exception to the exception: if there is a


stipulation to the contrary, or the nature of A.5. OBLIGATIONS OF THE BAILOR
the thing forbids such use. [Art. 1939(2)]
(1) Obligation not to demand the return of
the thing until the expiration of the term
A.4. OBLIGATIONS OF THE BAILEE or after the accomplishment of the use
[Art. 1946]
(1) Obligation to take care of it with the
proper diligence of a good father of a Exceptions:
family. [Art. 1163] (a) When bailor has urgent need of the
(2) Obligation to use the thing loaned only thing, he may demand its return
for the purpose for which it was loaned (extinguish commodatum) or its
and not for any other purpose. [Art. 1935, temporary use (suspend
1939(2), 1942 [1]] commodatum) [Art. 1946]

(3) Obligation to not lend the thing to a third (b) Precarium [Art. 1947]
person who is not a member of his (c) If bailee commits any acts of
household. [Art. 1942 (4)] ingratitude in Art. 765: [Art. 1948]
(4) Obligation to return the thing upon the (i) Bailee committed some offense
expiration of the period stipulated or after against the person, honor or
the accomplishment of the use for which property of the bailor, or of his
it has been constituted. [Art. 1944, 1946] wife or children under his
Exception: parental authority;

Bailee has right of retention for damages (ii) Bailee imputes to bailor any
when the bailor who, knowing the flaws criminal offense, or any act
of the thing loaned, does not advise the involving moral turpitude, even
bailee of the same. [Arts. 1946, 1944] though he should prove it, unless
the crime or act has been
committed against the bailee

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himself, his wife or children under of the use for which the commodatum
his authority; or has been constituted;
(iii) Bailee unduly refuses bailor (3) If the thing loaned has been delivered
support when bailee is legally or with appraisal of its value, unless there is
morally bound to give support the a stipulation exempting the bailee from
bailor. responsibility in case of a fortuitous
event;
(2) Obligation to refund the extraordinary
expenses during the contract for the (4) If he lends or leases the thing to a third
preservation of the thing loaned. [Art. person, who is not a member of his
1949] household;
Provided that: Bailee brings the same to (5) If, being able to save either the thing
the knowledge of the bailor before borrowed or his own thing, he chose to
incurring them, except when they are so save the latter. [Art. 1942]
urgent that the reply cannot be awaited
without danger.
A.8. RIGHT OF RETENTION
(3) Obligation to bear equally (with the
bailee) the extraordinary expenses arising General Rule: the bailee has no right of
on the occasion of actual use of the thing retention of the thing loaned on the ground
by the bailee. [Art. 1949] that the bailor owes him something, even
though it may be by reason of expenses. [Art.
Exception: Contrary stipulation
1944]
(4) Obligation to pay damages to the bailee
Exception: the bailee has the right of
for hidden flaws known to the bailor. [Art.
retention for damages arising from hidden
1951]
flaws. [Art. 1944, 1951]
NOTE: Bailor has no right of abandonment;
he cannot exempt himself from payment of
expenses or damages to the bailee by A.9. EXTINGUISHMENT
abandoning the thing to the latter. [Art. 1952]
(1) Death of either the bailor or the bailee
[Art. 1939]
A.6. LIABILITY FOR DETERIORATION (2) Expiration of term or accomplishment of
purpose [Art. 1946]
General rule: the bailee is liable for the
deterioration of the thing loaned. (3) Bailor demands the return in case the
bailee committed acts of ingratitude
Exception: when the deterioration of the thing
is due only to the use thereof and without his (4) Upon demand in case of precarium
fault. [Art. 1943]
(5) Bailor demands the return in case he has
urgent need of the thing loaned
A.7. LIABILITY FOR LOSS
General Rule: The Bailee is not liable for loss B. MUTUUM
of the thing due to fortuitous event. [Art. 1174]
Mutuum – a contract where one of the parties
Exceptions: Bailee is liable for loss of the (creditor) delivers to another
thing, even if it is through a fortuitous event: (debtor/borrower) money or other
(1) If he devotes the thing to any purpose consumable thing upon the condition that
different from that for which it has been the same amount of the same kind and
loaned; quality shall be paid.

(2) If he keeps it longer than the period


stipulated, or after the accomplishment B.1. OBLIGATIONS OF THE BORROWER

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(1) Obligation to pay to the creditor an equal indemnity for damages [Art.2209]
amount of the same kind and quality.
(b) Interest accruing from unpaid interest
[Art. 1953] If impossible to deliver the
– Interest demanded shall earn
same kind, pay value at the time of
interest from the time it is judicially
perfection of loan. [Art. 1955]
demanded [Art.2212] or where there
(2) If stipulated, the borrower has the is an express stipulation [Art.1959]
obligation to pay interest. [Art. 1956]
(2) Agreement must be in writing [Art.1956]
(3) Must be lawful
B.2. INTEREST AND SUSPENSION OF
USURY LAW
Rules for award of interest in the concept of
Interest– the compensation allowed by law or
actual and compensatory damages [Nacar v.
fixed by the parties for the loan or
Gallery Frames, G.R. No. 189871 (2013)
forbearance of money, goods or credits
modifying Eastern Shipping Lines vs. CA, G.R.
(conventional interest), or the amount
No. 97412 (1994) in light of BSP-MB Circular
imposed by law or by courts as penalty or
No. 799]
indemnity for damages (compensatory
interest) (1) When the obligation is breached, and it
consists in the payment of a sum of
(1) Simple interest – Paid for the principal at
money, i.e., a loan or forbearance of
a certain rate fixed or stipulated by the
money,
parties.
(a) The interest due should be that which
(2) Compound Interest – that which is
may have been stipulated in writing.
imposed upon interest due and unpaid.
(b) The interest due shall itself earn legal
Compound interest is allowed:
interest from the time it is judicially
(a) When there is an express written demanded.
stipulation to that effect [Art.1956]
(c) In the absence of stipulation, the rate
(b) Upon judicial demand. However, of interest shall be 6% per annum to
debtor is not liable to pay compound be computed from default, i.e., from
interest even after judicial demand judicial or extrajudicial demand under
when there is no stipulation for and subject to the provisions of
payment of interest. [Art.2212] Article 1169 of the Civil Code.
(3) Legal Interest – that which the law directs (2) When an obligation, not constituting a
to be charged in the absence of any loan or forbearance of money, is breached
agreement as to the rate between the
(a) An interest on the amount of
parties.
damages awarded may be imposed
(4) Lawful Interest – that which the laws at the discretion of the court at the
allow or do not prohibit. rate of 6% per annum.
(5) Unlawful or Usurious Interest – paid or (b) No interest, however, shall be
stipulated to be paid beyond the adjudged on unliquidated claims or
maximum fixed by law. damages, except when or until the
demand can be established with
reasonable certainty.
B.3. REQUISITES FOR INTEREST TO BE
(c) Where the demand is established
CHARGEABLE
with reasonable certainty, the interest
(1) Must be expressly stipulated [Art. 1956] shall begin to run from the time the
Exceptions: claim is made judicially or
extrajudicially [Art. 1169, Civil Code]
(a) The debtor in delay is liable to pay
(d) When such certainty cannot be so
legal interest (6% per annum) as
reasonably established at the time
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the demand is made, the interest


shall begin to run only from the date II. Deposit
the judgment of the court is made [at A deposit is constituted from the moment a
which time the quantification of person receives a thing belonging to another,
damages may be deemed to have with the obligation of safely keeping it and of
been reasonably ascertained]. returning the same. [Art. 1962]
(e) The actual base for the computation
of legal interest shall, in any case, be
on the amount finally adjudged. OBJECT OF DEPOSIT
(3) When the judgment of the court awarding Art. 1966 provides that only movable things
a sum of money becomes final and may be the object of a deposit. However, Art.
executory, the rate of legal interest, 2006 provides that movable as well as
whether the case falls under paragraph 1 immovable property may be the object of
or paragraph 2, above, shall be 6% per sequestration or judicial deposit.
annum from such finality until its
satisfaction, this interim period being
deemed to be by then an equivalent to a PRINCIPAL PURPOSE
forbearance of credit. Safekeeping of the thing; if safekeeping is
NOT the principal purpose, or is only an
accessory obligation, there is NO DEPOSIT
The Usury Law [Act No.2566] – an act fixing but some other contract. [Art. 1962]
rates of interests upon loans and declaring
the effect of receiving or taking usurious rates
and for other purposes. [Arevalo v. Dimayuga, CONSIDERATION
G.R. No. 26218 (1927)]
A deposit is generally gratuitous, except:
CB Circular No. 905 abolished interest rate
ceilings. With the promulgation of such (1) If there is an agreement to the contrary
circular, usury has become “legally inexistent” (2) When the depositary is engaged in the
as the parties can now legally agree on any business of storing goods [Art. 1965]
interest that may be charged on the loan.

PARTIES
B.4. ELEMENTS OF USURY
Depositor: the person who delivers, or
(a) A loan or forbearance of money formally transfers, gives, or yields possession
(b) An understanding between parties that or control of the movable property
the loan shall and may be returned Depositary: the person who receives it
(c) An unlawful intent to take more than the
legal rate for the use of money or its
equivalent KINDS OF DEPOSIT

(d) The taking or agreeing to take for the use (1) Extrajudicial
of the loan of something in excess of (a) Voluntary – obligation arises as a
what is allowed by law. consequence of contract;
Note: A usurious loan transaction is not a (b) Necessary – obligation arises as a
complete nullity but defective only with consequence of law or quasi-contract
respect to the agreed interest. [Carpo v. Chua,
G.R. Nos. 150773 and 153599 (2005)] (2) Judicial – obligation arises as a
Although usury is legally inexistent, courts consequence of a law allowing the
will not hesitate to declare void “excessive, issuance of a judicial order constituting a
iniquitous, unconscionable, exorbitant” deposit
interest. [Gomez-Somera in re: Carpo v. Chua] A. VOLUNTARY DEPOSIT
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Voluntary deposit –the deposit itself is a real however, is greater if the deposit is for
contract, as it is not perfected until the compensation.
delivery of the thing. [Art. 1968] A contract to
Exceptions:
deposit, or an agreement to constitute a
deposit, is consensual and binding. (1) Loss is through his fault or negligence
[Art. 1170], even if the thing was insured
A deposit may be made by two or more
[Art. 2207];
persons (who believe that they are entitled to
the thing deposited with a third person). The (2) Loss while in his possession, ordinarily
third person is to deliver the thing to the one raises presumption of fault on his part.
to whom it belongs. [Art. 1968] [See Art. 1265]
How Entered Into: Orally or in writing [Art. (3) Loss is through a fortuitous event if
1969]
(a) It is stipulated that depositary will be
How Perfected: The deposit is perfected upon liable;
delivery, which is made by the will of the
(b) Depositary uses the thing without
depositor. [Arts. 1963, 1968]
Depositor’s permission;
(c) Depositary delays its return;
A.1. EXTINGUISHMENT
(d) Depositary allows others to use it.
(1) Loss or destruction of thing deposited, or [Art 1979]
(2) In case of a gratuitous deposit, upon the (4) Loss when depositary deposits the thing
death of either the depositor or with a third person
depositary [Art. 1995]. The depositary is
Exception: if deposit with a third person is
not obliged to continue with the contract
allowed
of deposit
Exception to the exception: if such third
(3) By other modes provided in the Civil
person is manifestly careless or unfit [Art.
Code, e.g. novation, merger, etc. [See
1973];
Art.1231]
(5) Depositary also liable for negligence of
employee [Ibid.];
A.2. OBLIGATIONS OF A DEPOSITARY
(6) Loss when depositary uses the thing
(1) Depositary is obliged to keep the thing Exception: use with permission or for
safely and
preservation
(2) Depositary is obliged to return it to the
(7) Even if the depositary is not liable, if the
depositor, heirs, successors or person
he receives money/replacement, he must
designated in the contract, when required
deliver such to the depositor [Art. 1990]
[Art. 1972], together with all its products,
accessories and accessions. [Art. 1983] at
the place designated when deposit was A.3. AUTHORITY OF DEPOSITARY
made. Otherwise, where the thing may be
[Art. 1987] (1) Depositary may change way of deposit if
he may reasonably presume that the
Exception to return on demand: when the depositor would consent if he knew the
thing is judicially attached while in the situation. He is to notify the depositor
depositary’s possession, or when thereof and wait for the latter’s decision,
depositary is notified of the opposition of unless delay would cause danger. [Art.
a third person [Art. 1988] 1974]
Depositary NOT LIABLE FOR LOSS (2) Depositary can collect on interest earned
General rule: The depositary is not liable in by certificates, bonds, securities and
the event of loss. The required degree of care instruments when it becomes due. [Art
1975]
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(3) Depositary cannot make use of the thing B. NECESSARY DEPOSIT


deposited unless with depositor’s consent
or its preservation requires its use. [Art Made in compliance with a legal obligation,
1977] or on the occasion of any calamity, or by
travelers with common carriers [Arts.1734-
(4) If there is justifiable reason not to keep 1735], or by travelers in hotels and inns
the thing, depositary may return it to the [Arts.1996-2004]
depositor even before the time
designated
Exception: when the deposit is for B.1. KINDS OF NECESSARY DEPOSIT
valuable consideration [Art. 1989] (1) It is made in compliance with a legal
obligation, in which case it is governed by
the law establishing it, and in case of
A.4. OBLIGATIONS OF A DEPOSITOR deficiency, the rules on voluntary deposit,
(1) Gratuitous deposit: depositor is obliged e.g., Arts. 538, 586 and 2104
to reimburse the depositary for expenses (2) It takes place on the occasion of any
incurred for preservation. [Art.1992] calamity, such as fire, storm, flood,
(2) Depositor is obliged to pay losses pillage, shipwreck, or other similar
incurred due to character of thing events. There must be a causal relation
deposited. [Art. 1993] between the calamity and the
constitution of the deposit. In this case
Exceptions: the deposit is governed by the rules on
(a) Depositor was not aware of the voluntary deposit. [Art. 2168]
danger; (3) Made by passengers with common
(b) Depositor was not expected to know carriers. [Art.1754]
the dangerous character of the thing; (4) Made by travelers in hotels or inns. [Art.
(c) Depositor notified the depositary of 1998]
such dangerous character;
(d) Depositary was aware of the danger B.2. DEPOSIT BY TRAVELERS IN HOTELS
without advice from the depositor. AND INNS
[Ibid.]
Before keepers of hotels or inns may be held
responsible as depositaries with regard to the
A.5. AUTHORITY OF DEPOSITOR effects of their guests, the following must
concur:
(1) When there are two or more depositors
and they are not solidary and the thing (1) Keepers or their employees have
admits of division, one cannot demand previously been informed about the
more than his share [Art. 1985]. effects brought by the guests; and

(2) If he should lose his capacity to contract (2) The latter have taken the precautions
after having made the deposit, the thing prescribed regarding their safekeeping.
cannot be returned except to persons
who may have administration of his
property and rights. [Art. 1986].

A.6. RIGHT OF RETENTION B.3. EXTENT OF LIABILITY UNDER


ART.1998
The depositary may retain the thing until the
full payment of what may be due him by (a) Those in hotel rooms which come under
reason of the deposit [Art. 1994] the term “baggage” or articles such as
clothing as are ordinarily used by
travelers
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(b) Include those lost or damaged in hotel The right of retention recognized in this
annexes such as vehicles in the hotel’s article is in the nature of a pledge created by
garage. operation of law.

B.4. WHEN HOTEL-KEEPER LIABLE C. JUDICIAL DEPOSIT OR


Regardless of the amount of care exercised, SEQUESTRATION
the hotel-keeper is liable when— Takes place when an attachment or seizure of
(a) The loss or injury to personal property is property in litigation is ordered [Arts. 2005-
caused by his servants or employees as 2009] It is the only type of deposit that may
well as by strangers [Art. 2000]. involve immovable property.

(b) The loss is caused by the act of a thief or


robber done without the use of arms and C.1. NATURE AND PURPOSE
irresistible force. [Art. 2001]
It is auxiliary to a case pending in court. The
purpose is to maintain the status quo during
B.5. WHEN HOTEL-KEEPER NOT LIABLE pendency of the litigation or to insure the
right of the parties to the property in case of a
(a) The loss or injury is caused by force favorable judgment.
majeure, like flood, fire, [Art.2000] theft
or robbery by a stranger—not the hotel-
keeper’s servant or employee—with the C.2. DEPOSITARY OF SEQUESTERED
use of firearms or irresistible force PROPERTY
[Art.2001]
A person is appointed by the court [Art. 2007]
Exception: Hotel-keeper is guilty of fault with the obligations—
or negligence in failing to provide
against the loss or injury from his cause. (a) To take care of the property with the
[Arts.1170 and 1174] diligence of a good father of the family.
[Art. 2008]
(b) The loss is due to the acts of the guests,
his family, servants, visitors [Art.2002] (b) To continue in his responsibility until the
controversy which give rise thereto is
(c) The loss arises from the character of the ended unless the court so orders. [Art.
things brought into the hotel [Art. 2002] 2007]

The hotel-keeper cannot free himself from C.3. APPLICABLE LAW


responsibility by posting notices to the effect
that he is not liable for the articles brought by Judicial deposit law is remedial or procedural.
the guest. Such kind of stipulation shall be The Rules of Court shall govern matters not
void. [Art. 2003] provided for in the Civil Code. [Art. 2009]

B.6. HOTEL-KEEPER’S RIGHT TO


RETENTION
The hotel-keeper has a right to retain the
things brought into the hotel by the guest, as
a security for credits on account of—
(a) lodging,
(b) supplies usually furnished to hotel guests
[Art. 2004]

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Guaranty Surety
III. Guaranty and
not bound to take
Suretyship notice of its non-
performance
Guaranty – a contract whereby a person
(guarantor) binds himself to the creditor to A guarantor is often A surety will not be
fulfill the obligation of the principal debtor in discharged by the discharged, either by
case the latter should fail to do so. [Art. 2047] mere indulgence of the mere indulgence
the creditor to the of the creditor to the
Suretyship – a relation which exists where principal, and is principal, or by want
one person [principal] has undertaken an usually not liable of notice of the
obligation and another person (surety) is also unless notified of the default of the
under a direct and primary obligation or other default of the principal, no matter
duty to a third person (obligee), who is principal how much he may be
entitled to but one performance, and as
injured thereby
between the two who are bound, the one
rather than the other should perform.
A guarantor is the A surety is the insurer
While a surety undertakes to pay if the insurer of the of the debt, and he
principal does not pay, the guarantor only solvency of the obligates himself to
binds himself to pay if the principal is unable debtor and thus pay if the principal
to pay. [See benefit of excussion, Art. 2058] binds himself to pay does not pay
if the principal is
unable to pay
Guaranty distinguished from Suretyship
[Zobel, Inc. vs. CA, G.R. No. 113931 (1998)]
Guaranty Surety A. NATURE AND EXTENT OF
GUARANTY
A collateral An accessory promise
undertaking to pay by which a person General rule: Guaranty is gratuitous
the debt of another binds himself for Exception: When there is a stipulation to the
in case the latter is another already contrary [Art. 2048]
unable to pay the bound, and agrees
debt. with the creditor to
satisfy the obligation On the cause of a guaranty contract
if the debtor does not
A guarantor or surety is bound by the same
The contract of A surety is usually consideration that makes the contract
guaranty is the bound with his effective between the principal parties
guarantor's own principal by the same thereto. [Severino v. Severino, et al., G.R. No.
separate instrument, executed 34642 (1931)]
undertaking, in which at the same time, and
Guaranty or surety agreement is regarded
the principal does on the same
valid despite the absence of any direct
not join. It is usually consideration. He is
consideration received by the guarantor or
entered into before an original promissor
surety, such consideration need not pass
or after that of the and debtor from the
directly to the guarantor or surety; a
principal, and is beginning, and is
consideration moving to the principal will
often supported on a held, ordinarily, to
suffice.
separate know every default of
consideration from his principal.
that supporting the
General Rule: A married woman who is a
contract of the
guarantor binds only her separate property
principal. The
[Art. 2049]
original contract of
his principal is not his Exceptions:
contract, and he is
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(a) With her husband’s consent, bind the obligation [Art. 2052(2)]
community or conjugal partnership
A guaranty may secure the performance of a:
property
(1) Voidable contract – such contract is
(b) Without husband’s consent, in cases
binding, unless it is annulled by a proper
provided by law, such as when the
court action
guaranty has redounded to the benefit of
the family. (2) Unenforceable contract – because such
contract is not void
(3) Natural obligation – the creditor may
A guaranty need not be undertaken with the
proceed against the guarantor although
knowledge of the debtor [Art. 2050]
he has no right of action against the
Guaranty is unilateral. It exists for the benefit principal debtor for the reason that the
of the creditor and not for the benefit of the latter’s obligation is not civilly
principal debtor enforceable. When the debtor himself
offers a guaranty for his natural
obligation, he impliedly recognizes his
Creditor has every right to take all possible liability, thereby transforming the
measures to secure payment of his credit— obligation from a natural into a civil one.
guaranty can be constituted even against the
will of the principal debtor
A guaranty may secure a future debt [Art.
2053]
However, as regards payment made by a third
Continuing Guaranty
person—
(1) Not limited to a single transaction but
(a) If payment is without the knowledge or
which contemplates a future course of
against the will of the debtor—
dealings, covering a series of transactions
(i) Guarantor can recover only insofar as generally for an indefinite time or until
the payment has been beneficial to revoked.
the debtor [Art. 1236]
(2) It is prospective in its operation and is
(ii) Guarantor cannot compel the creditor generally intended to provide security
to subrogate him in his rights [Art. with respect to future transactions.
1237]
(3) Future debts, even if the amount is not
(b) If payment is with knowledge or consent yet known, may be guaranteed but there
of the debtor: Subrogated to all the can be no claim against the guarantor
rights which the creditor had against the until the amount of the debt is
debtor ascertained or fixed and demandable.

The guaranty must be founded on a valid Rationale: A contract of guaranty is subsidiary


principal obligation [Art. 2052 (1)]
(1) To secure the payment of a loan at
Guaranty is an accessory contract: It is an maturity – surety binds himself to
indispensable condition for its existence that guarantee the punctual payment of a
there must be a principal obligation. Hence, if loan at maturity and all other obligations
the principal obligation is void, it is also void. of indebtedness which may become due
or owing to the principal by the borrower.
(2) To secure payment of any debt to be
subsequently incurred – a guaranty shall
be construed as continuing when by the
A guaranty may secure the performance of a terms thereof it is evident that the object
voidable, unenforceable, and natural is to give a standing credit to the principal
debtor to be used from time to time either
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indefinitely or until a certain period, the bond.


especially if the right to recall the
Interest runs from:
guaranty is expressly reserved.
(i) Filing of the complaint (upon judicial
(3) To secure existing unliquidated debts –
demand); or
refers to debts existing at the time of the
constitution of the guaranty but the (ii) The time demand was made upon the
amount thereof is unknown and not to surety until the principal obligation is
debts not yet incurred and existing at that fully paid (upon extra-judicial demand)
time.
(4) The surety agreement itself is valid and
Rationale: Surety is made to pay, not by
binding even before the principal
reason of the contract, but by reason of
obligation intended to be secured thereby
the debtor’s failure to pay when
is born; for example, those securing
demanded and for having compelled the
obligations subject to a condition
creditor to resort to the courts to obtain
precedent are valid and binding before
payment.
the occurrence of the condition
precedent. (b) Penalty may be provided – a surety may
be held liable for the penalty provided for
in a bond for violation of the condition
A guaranty may secure the performance of a therein.
conditional obligation [Art. 2053]
(1) Principal obligation subject to a
Principal’s liability may exceed guarantor’s
suspensive condition – the guarantor is
obligations [Art. 2054]
liable only after the fulfillment of the
condition. The amount specified in a surety bond as the
surety’s obligation does not limit the extent of
(2) Principal obligation subject to a
the damages that may be recovered from the
resolutory condition – the happening of
principal, the latter’s liability being governed
the condition extinguishes both the
by the obligations he assumed under his
principal obligation and the guaranty
contract

A guarantor’s liability cannot exceed the


The existence of a guaranty is not presumed
principal obligation [Art. 2054]
[Art. 2055]
General rule: Guaranty is a subsidiary and
Guaranty requires the expression of consent
accessory contract – guarantor cannot bind
on the part of the guarantor to be bound. It
himself for more than the principal debtor
cannot be presumed because of the existence
and even if he does, his liability shall be
of a contract or principal obligation.
reduced to the limits of that of the debtor.
But the guarantor may bind himself for less Rationale:
than that of the principal. (1) There be assurance that the guarantor
Exceptions: had the true intention to bind himself;
(a) Interest, judicial costs, and attorney’s (2) To make certain that on making it, the
fees as part of damages may be guarantor proceeded with consciousness
recovered – creditors suing on a of what he was doing.
suretyship bond may recover from the
surety as part of their damages, interest
at the legal rate, judicial costs, and Contract of guaranty is covered by the Statute
attorney’s fees when appropriate, even of Frauds [See Art. 1403 (2) (b)]
without stipulation and even if the surety Guaranty must not only be expressed but
would thereby become liable to pay must so be reduced into writing. Hence, it
more than the total amount stipulated in shall be unenforceable by action, unless the
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same or some note or memorandum thereof


be in writing, and subscribed by the party
The stipulation in the indemnity agreement
charged, or by his agent; evidence, therefore,
allowing the surety to recover even before it
of the agreement cannot be received without
paid the creditor is enforceable. In
the writing, or a secondary evidence of its
accordance therewith, the surety may
contents. However, it need not appear in a
demand from the indemnitors even before
public document.
paying the creditors. [Mercantile Insurance
Company v. Ysmael, G.R. No. L-43862 (1989)]
B. NATURE AND EXTENT OF
SURETYSHIP Note: Prior demand by the creditor upon the
Liability is contractual and accessory but principal is not required. The surety is not
direct. Liability is limited by the terms of the exonerated by neglect of the creditor to sue
contract. Liability arises only if principal the principal.
debtor is held liable
(1) In the absence of collusion, the surety is Strictissimi juris rule is applicable ONLY to
bound by a judgment against the accommodation surety.
principal even though he was not a party
to the proceedings; Rationale: An accommodation surety acts
without motive of pecuniary gain and hence,
(2) The creditor may sue, separately or should be protected against unjust pecuniary
together, the principal debtor and the impoverishment by imposing on the principal,
surety; duties akin to those of a fiduciary.
(3) A demand or notice of default is not
required to fix the surety’s liability
C. EFFECT OF GUARANTY
Exception: Where required by the
provisions of the contract of suretyship
(4) A surety bond is void where there is no C.1. EFFECTS OF GUARANTY BETWEEN
principal debtor because such an THE GUARANTOR AND THE CREDITOR
undertaking presupposes that the A. The guarantor has the right to benefit
obligation is to be enforceable against from excussion/ exhaustion [Art. 2058]
someone else besides the surety, and the
latter can always claim that it was never The guarantor cannot be compelled to
his intention to be the sole person pay the creditor unless the latter has:
obligated thereby. (a) Exhausted all of the property of the
debtor; and
Note: A surety is NOT entitled to the (b) Resorted to all the legal remedies
benefit of excussion. against the debtor.

The undertaking is to the creditor, not the Exceptions to benefit of excussion


debtor (1) As provided in Art. 2059:
The surety makes no covenant or agreement (a) If the guarantor has expressly
with the principal that it will fulfill the renounced it.
obligation guaranteed for the benefit of the
principal. The surety’s undertaking is that the (b) If he has bound himself solidarily with
principal shall fulfill his obligation and that the debtor - here, the liability
the surety shall be relieved of liability when assumed is that of a surety. The
the obligation secured is performed; unless guarantor becomes primarily liable as
otherwise expressly provided. a solidary co- debtor. In effect, he
renounces in the contract itself the
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benefit of exhaustion. excussion of property located


abroad would be a lengthy and
(c) In case of insolvency of the debtor –
extremely difficult proceeding
the guarantor guarantees the
and would not conform with the
solvency of the debtor. If the debtor
purpose of the guaranty to
becomes insolvent, the liability of the
provide the creditor with the
guarantor arises as the debtor cannot
means of obtaining the
fulfill his obligation
fulfillment of the obligation.
(d) When the debtor has absconded, or
(iii) Sufficient to cover the amount of
cannot be sued within the Philippines
the debt
– the creditor is not required to go
after a debtor who is hiding or cannot (3) If he is a judicial bondsman and sub-
be sued in our courts, and to incur the surety [Art. 2084]
delays and expenses incident thereto.
(4) Where a pledge or mortgage has been
Exception: When the debtor has left a given by him as a special security
manager or representative
(5) If he fails to interpose it as a defense
(e) If it may be presumed that an before judgment is rendered against him.
execution on the property of the
principal debtor would not result in
the satisfaction of the obligation – if B. The creditor has the right to secure a
such judicial action including judgment against the guarantor prior to
execution would not satisfy the the excussion
obligation, the guarantor can no
General rule: An ordinary personal
longer require the creditor to resort to
guarantor (NOT a pledgor/mortgagor),
all such remedies against the debtor
may demand exhaustion of all the
as the same would be but a useless
property of the debtor before he can be
formality. It is not necessary that the
compelled to pay.
debtor be judicially declared
insolvent. Exception: The creditor may, prior
thereto, secure a judgment against the
guarantor, who shall be entitled,
The right of guarantors…to demand however, to a deferment of the execution
exhaustion of the property of the of said judgment against him, until after
principal debtor, exists only when a the properties of the principal debtor
pledge or a mortgage has not been given shall have been exhausted, to satisfy the
as special security for the payment of the latter’s obligation.
principal obligation. [Southern Motors, Inc.
v. Barbosa, G.R. No. L-9306 (1956)]
C. The creditor has the duty to make prior
(2) If he does not comply with Art. 2060: demand for payment from the guarantor
In order that the guarantor may make use [Art. 2060]
of the benefit of excussion, he must:
The demand is to be made only after
(a) Set it up against the creditor upon the judgment on the debt.
latter’s demand for payment from
him;
D. The guarantor has the duty to set up the
(b) Point out to the creditor:
benefit of excussion [Art. 2060]
(i) Available property of the debtor –
As soon as he is required to pay,
the guarantor should facilitate
guarantor must also point out to the
the realization of the excussion
creditor available property (not in
since he is the most interested in
litigation or encumbered) of the debtor
its benefit.
within the Philippines.
(ii) Within the Philippine territory –
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Exception:
E. The creditor has the duty to resort to all (1) Liability will be solidary if it has been
legal remedies [Arts. 2058, 2061] expressly stipulated.
After the guarantor has fulfilled the (2) Also, the circumstances enumerated
conditions required for making use of the in Art. 2059 will preclude application
benefit of excussion, it becomes the duty of the benefit of division.
of the creditor to:
(1) Exhaust all the property of the debtor
C.2. EFFECTS OF GUARANTY BETWEEN
pointed out by the guarantor;
THE DEBTOR AND THE GUARANTOR
(2) If he fails to do so, he shall suffer the
A. The guarantor who pays has the right to
loss for the insolvency of the debtor,
be subrogated to the rights of the creditor
but only to the extent of the value of
[Art. 2067]
the said property
A guarantor who pays the debt is entitled
to every remedy which the creditor has
F. The creditor has the duty to notify the against the principal debtor, to enforce
guarantor in the action against the debtor every security and all means of payments;
[Art. 2062] to stand in the place of the creditor not
only through the medium of the contract,
Notice to the guarantor is mandatory in
but even by means of the securities
the action against the principal debtor.
entered into without the knowledge of
The guarantor, however, is not duty
the surety; having the right to have those
bound to appear in the case, and his non-
securities transferred to him though there
appearance shall not constitute default,
was no stipulation for it, and to avail
w/ its consequential effects.
himself of all securities against the
Rationale: To give the guarantor the debtor.
opportunity to allege and substantiate
However, if a guarantor has compromised
whatever defenses he may have against
with the creditor for the payment of the
the principal obligation, and chances to
obligation, then the guarantor cannot
set up such defenses as are afforded him
demand more than what he has really
by law
paid.

G. A compromise shall not prejudice the


B. The guarantor has the duty to notify the
person not party to it [Art. 2063]
debtor before paying the creditor [Art.
A compromise between creditor and 2068; see also Arts. 1236 and 1237]
principal debtor benefits the guarantor
Should payment be made without
but does not prejudice him.
notification, and supposing the debtor
A compromise between guarantor and has already made a prior payment, the
the creditor benefits but does not debtor would be justified in setting up the
prejudice the principal debtor. defense that the obligation has already
been extinguished by the time the
guarantor made the payment. The
H. Co-guarantors are entitled to the benefit guarantor will then lose the right of
of division [Art. 2065] reimbursement and consequently the
General Rule: The benefit of division right of subrogation.
applies only when there are several
guarantors and one debtor for a single
C. The guarantor cannot demand
debt. A co-guarantor is liable only to the
reimbursement for payment made by him
extent of his share in the obligation as
before the obligation has become due
divided among all the co-guarantors.
[Art. 2069]
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General rule: Since a contract of guaranty take measures for the protection of his
is only subsidiary, the guarantor cannot interest in view of the probability that he
be liable for the obligation before the would be called upon to pay the debt. As
period on which the debtor’s liability will such, he may, in the alternative, obtain
accrue. Any payment made by the release from the guaranty; or demand
guarantor before the obligation is due security that shall protect him from any
cannot be indemnified by the debtor. proceeding by the creditor, and against
the insolvency of the debtor.
Exception: Prior consent or subsequent
ratification by the debtor
Art. 2066 and 2071 Distinguished
D. The guarantor may proceed against the Art. 2066 Art. 2071
debtor even before payment has been
Provides for the Provides for the
made [Art. 2071]
enforcement of the protection before
General rule: Guarantor has no cause of guaranty/surety he has paid but
action against the debtor until after the against the debtor after he has
former has paid the obligation. after he has paid the become liable, but
Exceptions [Art. 2071]: debt before payment of
the debt
(a) When he is sued for the payment;
Gives a right of action Protective remedy
(b) In case of insolvency of the principal after payment before payment
debtor;
Substantive Right Preliminary remedy
(c) When the debtor has bound himself
to relieve him from the guaranty
within a specified period, and this C.3. EFFECTS OF GUARANTY AS BETWEEN
period has expired; CO-GUARANTORS
(d) When the debt has become (a) The one who pays may demand from
demandable, by reason of the each of the others the share
expiration of the period for payment; proportionally owing to him
(e) After the lapse of 10 years, when the (b) If any of the guarantors is insolvent, his
principal obligation has no fixed share shall be borne by the others,
period for its maturity, unless it be of including the payer, in the same
such nature that it cannot be proportion [Art. 2073]
extinguished except within a period
longer than 10 years;
(f) If there are reasonable grounds to Requisites for the applicability of Art. 2073
fear that the principal debtor intends (1) Payment has been made by one
to abscond; guarantor;
(g) If the principal debtor is in imminent (2) The payment was made because
danger of becoming insolvent.
(a) Of the insolvency of the debtor, or
(b) By judicial demand
When any of these grounds for exceptions
are present, then the guarantor may (1) (3) The paying guarantor seeks to be
obtain release from the guaranty, or (2) indemnified only to the extent of his
demand a security that shall protect him proportionate share in the total
from any proceedings by the creditor and obligation.
from the danger of insolvency of the
debtor.
For purposes of proportionate
Rationale: To enable the guarantor to reimbursement, the other guarantors may
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interpose such defenses against the paying (2) pursuant to an enforceable agreement
guarantor as are available to the debtor between the principal and the creditor,
against the creditor, except those that are and
personal to the debtor [Art. 2074]
(3) that it was made without the consent of
the surety or with a reservation of rights
with respect to him. [Filipinas Textile Mills
D. EXTINGUISHMENT OF GUARANTY v. CA, G.R. No. 119800 (2003)]

Once the obligation of the debtor is


E. LEGAL AND JUDICIAL BONDS
extinguished in any manner provided in the
Civil Code, the obligation of the guarantor is
also extinguished [Art. 2076].
Bond – an undertaking that is sufficiently
secured, and not cash or currency.
However, there may be instances when, after Bondsman – a surety offered in virtue of a
the extinguishment of the guarantor’s provision of law or a judicial order.
obligation (as in the case of a release from
Qualifications of personal bondsman [Art.
the guaranty), the obligation of the debtor
2082 in relation to Art. 2056]
still subsists.
(1) He possesses integrity;
(2) He has capacity to bind himself;
Although the guarantor generally has to
make payment in money, any other thing of (3) He has sufficient property to answer for
value, if accepted by the creditor, is valid the obligation which he guarantees.
payment and therefore releases the
guarantor (dacion en pago) [Art. 2077].
Pledge or mortgage in lieu of bond [Art. 2083]
Guaranty or suretyship is a personal security.
If one guarantor is released without the
consent of the others, the release would
benefit the co-guarantors to the extent of the Pledge or mortgage is a property or real
proportionate share of the guarantor security. If the person required to give a legal
released [Art. 2078]. or judicial bond should not be able to do so, a
pledge or mortgage sufficient to cover the
obligation shall be admitted in lieu thereof.
A guarantor is released if the creditor,
without the guarantor’s consent, extends the
time within which the debtor may perform his Bondsman not entitled to excussion [Art.
obligation [Art. 2079]. This is to protect the 2084]
interest of the guarantor should the debtor
be insolvent during the period of extension A judicial bondsman and the sub-surety are
and deprive the guarantor of his right to not entitled to the benefit of excussion.
reimbursement. Reason: They are not mere guarantors, but
The guarantors are released if by some act of sureties whose liability is primary and
the creditor they cannot be subrogated to the solidary.
rights, mortgages and preferences of the
latter. [Art. 2080]
Effect of negligence of creditor
Mere negligence on the part of the creditor in
In order to constitute an extension collecting from the debtor will not relieve the
discharging the surety, it should appear that surety from liability.
the extension was for:
(1) a definite period,
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value which the thing may have acquired


IV. Pledge and by reason thereof [Art. 546]
(2) He who has executed work upon a
Pledge – is a contract constituted to secure movable has a right to retain it by way of
the fulfillment of a principal obligation where pledge until he is paid. This is called the
the thing pledged, which may be a movable, mechanic’s lien. [Art. 1731]
or an incorporeal right evidenced by a (3) The agent may retain the things which
document, is placed in the possession of the are the objects of agency until the
creditor or a third person by common principal effects the reimbursement and
agreement. [Art. 2093 in relation to Art. pays the indemnity. This is called the
2085] agent’s lien. [Art. 1914]
The pledgor must be the absolute owner of (4) The laborer’s wages shall be a lien on the
the thing pledged, and he must have the free goods manufactured or the work done.
disposal of the property, and in the absence [Art. 1707]
thereof, that he be legally authorized for the
purpose. [Art. 2085 (2) and (3)]
NOTE:

A. CHARACTERISTICS (1) In legal pledges, the remainder of the


price of the sale shall be delivered to the
(1) Real – perfected upon the delivery of the obligor. [Art. 2121]
thing pledged [Art. 1316]
(2) Public auction of legal pledges may only
(2) Accessory – cannot exist independently be executed after demand of the amount
(i.e., without a principal obligation) for which the thing is retained. It shall
(3) Unilateral – obligation on the part of the take place within one month after the
creditor to return the thing pledged upon demand, otherwise the pledgor may
the fulfillment of the principal obligation demand the return of the thing pledged,
provided s/he is able to show that the
(4) Subsidiary– obligation incurred does not creditor did not cause the public sale
arise until the fulfillment of the secured without justifiable grounds. [Art. 2122]
principal obligation

C. ESSENTIAL REQUISITES
B. KINDS
(1) Voluntary or Conventional – created by
agreement of the parties. C.1. PROVISIONS COMMON TO PLEDGE
AND MORTGAGE [ART. 2085]
(2) Legal – created by operation of law.
(1) Constituted to secure the fulfillment of a
principal obligation.
B.1. LEGAL PLEDGE / PLEDGE BY (2) Pledgor or mortgagor must be the
OPERATION OF LAW [ARTS. 2121-2122] absolute owner of the thing pledged or
(1) Necessary expenses shall be refunded to mortgaged.
every possessor, but only a possessor in (3) The persons constituting the pledge or
good faith may retain the thing until he mortgage have the free disposal of their
has been reimbursed. property, and in the absence thereof, that
Useful expenses shall be refunded only to they be legally authorized for the
the possessor in good faith with the same purpose.
right of retention, the person who has Note: Third persons who are not parties
defeated him in the possession having to the principal obligation may secure the
the option of refunding the amount of the latter by pledging or mortgaging their
expenses or of paying the increase in own property. [Art. 2085]
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(4) Cannot exist without a valid obligation, a pledge or a dation in payment, the
but may be constituted to guarantee the presumption is in favor of pledge, the latter
performance of a voidable or being the lesser transmission of rights and
unenforceable contract. [Art. 2052] interests. [Manila Banking Corp. v. Teodoro,
G.R. No. 53955 (1989)]
(5) Debtor retains the ownership of the thing
given as a security.
(6) When the principal obligation becomes D. REQUISITES FOR PERFECTION
due, the thing pledged or mortgaged may
be alienated for the payment to the (1) For the pledge to take effect between the
creditor. [Art. 2087] parties, the thing pledged is placed in the
possession of the creditor or a third
person [Art. 2093]
C.2. PROVISIONS APPLICABLE ONLY TO (2) For the pledge to take effect as against
PLEDGE third persons, a description of the thing
(1) Transfer of possession to the creditor or pledged and the date of the pledge
to third person by common agreement is should appear in a public instrument [Art.
essential [Art. 2093]. 2096]

(2) All movables within the commerce of


man may be pledged as long as they are E. OBLIGATIONS OF PLEDGEE
susceptible of possession [Art. 2094].
(1) The pledgee cannot deposit the thing
(3) Incorporeal rights may be pledged. The pledged with a 3rd person, unless there is
instruments representing the pledged a contrary stipulation [Art. 2100 (1)].
rights shall be delivered to the creditor; if
negotiable, must be indorsed [Art. 2095]. (2) Pledgee is responsible for the acts of his
agents or employees with respect to the
(4) Pledge shall take effect against 3rd thing pledged [Art. 2100 (2)].
persons only if the following appear in a
public instrument: (3) General Rule: Has no right to use the
thing or to appropriate its fruits without
(a) Description of the thing pledged. authority from the owner. If he does so, or
(b) Date of the pledge [Art. 2096]. misuses it in any way, the owner may ask
that the thing be judicially or
(5) The thing pledged may be alienated by extrajudicially deposited. [Art. 2104]
the pledgor or owner only with the
consent of the pledgee. Ownership of the Exception: When the preservation of the
thing pledged is transmitted to the thing pledged requires its use, it must be
vendee or transferee as soon as the used by the creditor only for that purpose.
pledgee consents to the alienation, but (4) May cause the public sale of the thing
the latter shall continue to have pledged if, without fault on his part, there
possession [Art. 2097]. is danger of destruction, impairment or
(6) Creditor has the right to retain the thing diminution in value of the thing. The
in his possession or in that of a third proceeds of the auction shall be a security
person to whom it has been delivered, for the principal obligation [Art. 2108].
until the debt is paid [Art. 2098].
(7) Special laws apply to pawnshops and F. RIGHTS OF PLEDGOR
establishments engaged in making loans
secured by pledges. Provisions of the Civil (1) Takes responsibility for the flaws of the
Code shall apply subsidiarily to them. thing pledged [Art. 2101 in relation to Art.
[Art. 2123] 1951].
(2) Cannot ask for the return of the thing
against the will of the creditor, unless and
In case of doubt as to whether a transaction is until he has paid the debt and its interest,
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with expenses in a proper case [Art. a second one with the same formalities
2105]. shall be held.
(3) Subject to the right of the pledgee under (6) If at the second auction, there is no sale
Article 2108, pledgor is allowed to either, the creditor may appropriate the
substitute the thing which is in danger of thing pledged but he shall give an
destruction or impairment without any acquittance (release) for his entire claim.
fault on the part of the pledgee with
another thing of the same kind and
G.2. EFFECTS OF THE SALE OF THE THING
quality [Art. 2107].
PLEDGED
(4) May require that the thing be deposited
[Art. 2115]
with a 3rd person, if through the
negligence or willful act of the pledgee (1) Extinguishes the principal obligation,
the thing is in danger of being lost or whether the proceeds of the sale is more
impaired [Art. 2106]. or less than the amount due.
(2) General Rule: If the price of sale is more
than amount due, the debtor is not
The pledgee can temporarily entrust the
entitled to the excess
physical possession of the chattels pledged
to the pledgor without invalidating the Exception: (1) Unless the contrary is
pledge. The pledgor is regarded as holding provided. (2) Legal pledge
the pledged property merely as trustee for
(3) If the price of sale is less, the creditor is
the pledgee. The type of delivery will depend
not entitled to recover the deficiency. A
upon the nature and the peculiar
contrary stipulation is void.
circumstances of each case. [Yuliongsiu v.
PNB, G.R. No. L-19227 (1968)]
A pledgee cannot become the owner of, nor H. PLEDGE AS DISTINGUISHED FROM
appropriate to himself, the thing given in CHATTEL MORTGAGE [ARTS. 2140,
pledge. If by the contract of pledge the 1484]
pledgor continues to be the owner of the
thing pledged during the pendency of the Pledge Chattel Mortgage
obligation, it stands to reason that in case of Delivery of Personal Property
loss of the property, the loss should be borne
by the pledgor. [PNB v. Atendido, G.R. No. L- Delivery is required Not required
6342 (1954)] for validity
Registration in the Chattel Mortgage Register
G. FORECLOSURE Not necessary; Necessary for validity
of the CM against
Public document is
third persons
enough to bind third
G.1. REQUIREMENTS IN SALE OF THE persons
THING PLEDGED BY A CREDITOR, IF
CREDIT IS NOT PAID ON TIME Right to Excess of Proceeds of Sale
[Art. 2112] The excess goes to The excess goes to the
the debtor/ mortgagor
(1) Debt is due and unpaid. pledgee/creditor,
(2) Sale must be at a public auction. unless otherwise
stipulated
(3) Notice to the pledgor and owner, stating
the amount due. Note: In legal
pledge, the excess
(4) Sale must be made with the intervention goes to the debtor
of a notary public. [Art. 2121]
(5) If at the first auction the thing is not sold,
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Right to Recover Deficiency


V. Chattel Mortgage
Creditor/ mortgagee Creditor/ mortgagee
is not entitled to can recover from the
recover any debtor/ mortgagor, Chattel mortgage – a contract whereby
deficiency after the except if covered by personal property is recorded in the Chattel
property is sold, Recto Law Mortgage Register as a security for the
notwithstanding performance of an obligation. [Art. 2140] The
contrary stipulation Civil Code has repealed the definition in Act
1508 or the Chattel Mortgage Law. [Gomez-
Somera]
The provisions of the Civil Code on pledge,
insofar as they are not in conflict with the
Chattel Mortgage Law shall be applicable to A. FORM OF CHATTEL MORTGAGE
chattel mortgages [Art. 2141]
The Chattel Mortgage Law prescribes a
specific format for a chattel mortgage. It
I. PACTUM COMMISSORIUM must be written and subscribed to by the
parties in the presence of 2 witnesses. The
I.1. ELEMENTS: law also requires it to contain specific terms.
(1) There is property pledged by way of
security for the payment of the principal
obligation A.1. RECORDING REQUIRED
(2) There is a stipulation for automatic General rule: the chattel mortgage shall not
appropriation by the creditor in case of be valid against any person unless the
non-payment of the principal obligation mortgage is recorded in the office of the
within the stipulated period register of deeds
Exception: it shall be valid between the
parties
I.2. EFFECT ON PLEDGE
WHERE
The nullity of the pactum commissorium does
not affect the validity of the contract of The mortgage must be recorded in the office
pledge. The creditor may recover the credit of the register of deeds of the province in
from the proceeds of a foreclosure sale which the mortgagor resides at the time of
effected in accordance with law [Gomez- making the same. If the province in which the
Somera]. property is situated and the province of the
mortgagor’s place of residence are different,
the mortgage shall be recorded in both
J. EQUITABLE MORTGAGE provinces. If the mortgagor resides outside
the Philippines, the mortgage shall be
It is a contract that reveals the intention of recorded in the province in which the property
the parties to charge property as security for is situated. [Sec. 5]
a debt, but contains nothing impossible or
contrary to law [Gomez-Somera].
A.2. CONTENTS OF AN AFFIDAVIT OF
GOOD FAITH
(1) That chattel mortgage is made solely for
J.1. ESSENTIAL REQUISITES the purpose of securing the obligation
(1) Parties entered into a contract specified therein
denominated as a contract of sale (2) That such principal obligation is just and
(2) The true intention is to secure an existing valid, not entered into for the purpose of
debt by way of mortgage fraud

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B. OBLIGATIONS SECURED There is no statute that vests the right of


redemption over personal property. [Gomez-
A chattel mortgage cannot secure after- Somera]
incurred obligations or future debts. [Gomez-
Somera]
E.3. RIGHT TO POSSESSION
C. OBJECTS OF CHATTEL MORTGAGE A mortgagee, unlike a pledgee, is generally
not in possession of the collateral unless and
All personal property shall be subject to until the principal debtor defaults and the
mortgage, agreeably to the provisions of this mortgagee seeks to foreclose. [Gomez-
Act, and a mortgage executed in pursuance Somera]
thereof shall be termed chattel mortgage.
[Sec. 2]
E.4. RIGHT TO SURPLUS OR DEFICIENCY
C.1. REASONABLE DESCRIPTION RULE ORDER OF APPLICATION OF PROCEEDS:
The mortgaged property must be so (1) Costs and expenses of keeping and sale
described in the document such as to enable (2) Obligation secured
the parties or any other person, after
reasonable inquiry and investigation, to (3) Subsequent mortgagees
identify the mortgaged property. [Sec. 7] SURPLUS
The surplus shall be paid to the mortgagor.
C.2. AFTER ACQUIRED PROPERTIES DEFICIENCY
General rule: after acquired properties cannot Although the law is silent on the matter,
be described in the chattel mortgage, so it there is a corollary obligation for the
cannot be covered by the same mortgagor to pay the deficiency. [Gomez-
Exception: stocks in retail stores [Gomez- Somera citing PAMECA Wood Treatment Plant,
Somera citing Torres v. Limjap, G.R. No. Inc. v. Court of Appeals, G.R. No. 106435
34385 (1931)] (1999)]

D. MORTGAGOR’S RIGHT TO ALIENATE


THE COLLATERAL
The mortgagor must have the written consent
of the mortgagee to sell or pledge personal
property already pledged. [Art. 319, Revised
Penal Code]

E. FORECLOSURE

E.1. EQUITY IN REDEMPTION


A mortgagor in default may prevent the
foreclosure sale of the mortgaged property by
paying the amount due on the mortgage and
the reasonable costs and expenses before the
sale. [Sec. 13]

E.2. NO RIGHT OF REDEMPTION


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repayment of the amount named but by


VI. Real Mortgage payment of the full amount of the principal
obligation. [Gomez-Somera]

Real mortgage – a contract whereby the


debtor secures to the creditor the fulfillment C. CHARACTERISTICS
of a principal obligation (real security
transaction), immediately making immovable
property or real rights answerable to the C.1. CHARACTERISTICS OF THE
principal obligation in case it is not complied COLLATERAL
with at the time stipulated.
As a general rule, the mortgagor retains
possession of the property. He may deliver
A. OBJECTS OF REAL MORTGAGE said property to the mortgagee without
altering the nature of the contract of
mortgage.
[Art. 2124] Mortgage creates an encumbrance over the
1. Immovables property, but ownership of the property is not
parted with. It merely restricts the
2. Alienable real rights over immovables. mortgagor’s jus disponendi over the property.
The mortgagor may still sell the property,
and any stipulation to the contrary (pactum
Future property CANNOT be an object of de non alienando) is void [Art. 2130]
mortgage; however:
However, a stipulation prohibiting the
(a) A stipulation subjecting to the mortgage mortgagor from entering into second or
improvements which the mortgagor may subsequent mortgages is valid since there is
subsequently acquire, install or use in no law prohibiting it. [Litonjua et al. v. L&R
connection with real property already Corporation, et al., G.R. No. 130722 (1999),
mortgaged belonging to the mortgagor is citing Philippine Industrial Co. v. El Hogar &
valid. Vallejo, G.R. No. L-20482 (1923)]
(b) A stipulation in a registered (or recorded)
real estate mortgage that all property
taken in exchange or replacement by the C.2. CHARACTERISTICS OF THE
mortgagor (after-acquired property) shall MORTGAGE
be come subject to the mortgage is A registered real estate mortgage is a right in
binding. [Gomez-Somera] rem, a lien that a creditor has on the property;
therefore, it is inseparable from the collateral
and until discharged, it follows the property.
B. OBLIGATIONS SECURED [Gomez-Somera]
General Rule: A real estate mortgage is
limited to the principal obligations
mentioned in the contract (within its four A real estate mortgage that is unregistered
corners). [Lim Julian v. Lutero, G.R. No. L- binds the parties to the contract and it only
25235 (1926)] gives the mortgagee the right to demand the
execution and recording of the mortgage. To
Exception: A real estate mortgage may bind third parties, a real estate mortgage
contain a dragnet or blanket mortgage clause must be recorded in the Registry of Property.
which subsumes all debts, whether past or
future. [Philippine Bank of Communications v.
CA, G.R. No. 118552 (1996)] It is not an essential requisite that the
Note: This clause will be strictly construed principal of the credit bears interest, or that
and its inclusion makes the mortgage a the interest as compensation for the use of
continuing security, not to be discharged by the principal and the enjoyment of its fruits
be in the form of a certain percentage
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thereof. and sufficient property to answer for


the obligation], and in other laws
[Art. 2082]
Mortgage extends to the natural accessions,
(c) If the person bound to give a bond
to the improvements of growing fruits and
should not be able to do so, a pledge
the rents or income not yet received when the
or mortgage considered sufficient to
obligation becomes due, including indemnity
recover his obligation shall be
from insurance, and/or amount received from
admitted in lieu thereof [Art. 2083]
expropriation for public use [Art. 2127]
(3) Equitable – One which, although lacking
(a) Applies only when the accessions and
the proper formalities of a mortgage,
accessories subsequently introduced
shows the intention of the parties to
belongs to the mortgagor.
make the property a security for the debt.
(b) To exclude them, there must be an
(a) Lien created by equitable mortgage
express stipulation, or the fruits must be
ought not to be defeated by requiring
collected before the obligation becomes
compliance with formalities
due.
necessary to the validity of voluntary
(c) Third persons who introduce real estate mortgage. Ex.: Pacto de
improvements upon the mortgaged retro
property may remove them at any time
(b) Provisions governing equitable
mortgage: Arts. 1365, 1450, 1454,
1602, 1603, 1604 and 1607.
The right to alienate the real estate mortgage
credit is the right of the mortgagee to assign
its rights under the principal obligation
secured. Although the mortgagee does not E. PRINCIPLE OF INDIVISIBILITY OF
become the owner of the collateral, it owns PLEDGE/MORTGAGE
the real estate mortgage and may alienate
the same. [Art. 2128; Gomez-Somera]
[Arts. 2089 to 2090]
A mortgage directly and immediately
Alienation or assignment of mortgage credit subjects the property upon which it is
is valid even if it is not registered. imposed. It is indivisible even though the debt
may be divided, and such indivisibility is
likewise unaffected by the fact that the
D. KINDS debtors are not solidarity liable. [Dayrit v. CA,
(1) Voluntary – constituted by the will of the G.R. No. L-29388 (1970)]
owner of the property on which it is Where only a portion of the loan is released,
created the mortgage becomes enforceable only as to
(2) Legal – required by law to be executed in the proportionate value of the loan. [Central
favor of certain persons: Bank v. CA, G.R. No. L-45710 (1985)]

(a) Persons in whose favor the law Indivisibility applies only as to


establishes a mortgage have no other pledgors/mortgagors who are themselves
right than to demand the execution debtors in the principal obligation, and NOT
and recording of the document in to accommodation pledgors/ mortgagors.
which the mortgage is formalized When several things are pledged or
[Art. 2125] mortgaged, each thing for a determinate
(b) The bondsman who is to be offered in portion of the debt, the pledges or mortgage,
virtue of a provision of law or of a are considered separate from each other. But
judicial order shall have the when the several things are given to secure
qualifications prescribed in Art 2056 the same debt in its entirety, all of them are
[integrity, capacity to bind himself, liable for the debt, and the creditor does not

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have to divide his action by distributing the (1) Judicial Foreclosure


debt among the various things pledged or
(2) Extrajudicial Foreclosure
mortgaged. Even when only a part of the debt
remains unpaid, all the things are still liable
for such balance. [Tolentino]
Judicial Foreclosure vs. Extrajudicial
The question is whether or not the written Foreclosure
instrument in controversy was a mortgage or
Judicial Extrajudicial
a conditional sale. The correct test, where it
can be applied, is the continued existence of Court intervenes No court intervention
a debt or liability between the parties. If such
There is equity of There is right of
exists, the conveyance may be held to be
redemption – period redemption – period
merely a security for the debt or an indemnity
starts from the start from date of
against the liability. [Reyes v. Sierra, G.R. No.
finality of the registration of
L-28658 (1979), citing Cuyugan v. Santos,
judgment until order certificate of sale
G.R. No. L-10265 (1916)]
of confirmation
Decisions are Not appealable
F. RECORDING REQUIRED appealable
The real estate mortgage must be recorded in No need for a special Special power of
the Registry of Property in order to be validly power of attorney in attorney in favor of
constituted. [Art. 2125] the contract of the mortgagee is
Note: The mortgage would still be binding mortgage required in the
between the parties even if the instrument is contract
not recorded. [Art. 2125]
G.1. JUDICIAL FORECLOSURE
G. FORECLOSURE OF MORTGAGE [Rule 68, Rules of Court]
Foreclosure – is the remedy available to the (1) May be availed of by bringing an action in
mortgagee by which he subjects the the proper court which has jurisdiction
mortgaged property to the satisfaction of the over the area wherein the real property
obligation secured by the mortgage. involved or a portion thereof is situated
In general, an action for foreclosure of a (2) If the court finds the complaint to be
mortgage is limited to the amount mentioned well- founded, it shall order the
in the mortgage, except when the mortgage mortgagor to pay the amount due with
contract intends to secure future loans or interest and other charges within a period
advancements. of not less than 90 days nor more than
120 days from the entry of judgment
Note: The mortgagor may exercise the
Mortgage may be used as a “continuing
equity of redemption during this period of
security” which secures future advancements
grace in order to extinguish the mortgage
and is not discharged by the repayment of the
and retain ownership of the collateral by
amount in the mortgage.
paying the mortgage obligation. [Top
Rate International Services, Inc. v. IAC,
G.R. Nos. L-67496 and L-68257 (1986)]
Acceleration clause allowed
It is this equity of redemption that is
Acceleration clause, or the stipulation stating
conferred on the mortgagor’s successors-
that on the occasion of the mortgagor’s
in-interest or on third persons acquiring
default, the whole sum remaining unpaid
rights over the collateral from the
automatically becomes due and demandable,
is ALLOWED. mortgage subsequent.

Kinds of foreclosure
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Although these subsequent or junior lien- A real estate mortgage may be extrajudicially
holders acquire the equity of redemption, foreclosed only if there is a special power
this right is strictly subordinate to the inserted or attached to the document in
superior lien of the first mortgagee. which the real estate mortgage appears and
[Gomez-Somera] only in accordance with the provisions of Act
No. 3135. [Gomez-Somera]
(3) If the mortgagor fails to pay at time
directed, the court, upon motion, shall
order the property to be sold to the
[Act No. 3135]
highest bidder at a public auction.
(1) Applies to mortgages where the authority
(4) Upon confirmation of the sale by the
to foreclose is granted to the mortgagee.
court, also upon motion, it shall operate
to divest the rights of all parties to the (2) Authority is not extinguished by death of
action and to vest their rights to the mortgagor or mortgagee. This is an
purchaser subject to such rights of agency coupled with interest.
redemption as may be allowed by law.
(3) Public sale should be made after proper
Note: A foreclosure sale is not complete notice to the public; otherwise, it is a
until it is confirmed. Thus, after the jurisdictional defect which could render
foreclosure sale but before its the sale voidable.
confirmation, the court may grant the
General Rule: Statutory provisions
judgment debtor or mortgagor the equity
governing posting of notice must be
of redemption.
strictly complied with and even slight
(5) Before the confirmation, the court retains deviations will invalidate the notice.
control of the proceedings; execution on
Exception: If the objectives are attained,
judgment
immaterial errors and mistakes may not
(6) The proceeds of the sale shall be applied affect the sufficiency of the notice.
to the payment of the: [Metropolitan Bank and Trust Company v.
Wong, G.R. No. 120859 (2001) discussing
(a) costs of the sale;
Olizon v. CA, G.R. No. 107075 (1994)]
(b) amount due the mortgagee;
(4) There is no need to notify the mortgagor,
(c) claims of junior encumbrancers or where there is no contractual stipulation
persons holding subsequent therefor.
mortgages in the order of their
Proper notice consists of:
priority; and
(a) posting notice in three public places
(d) the balance, if any shall be paid to
and/or
the mortgagor
(b) publication in newspaper of general
(7) Sheriff’s certificate is executed,
circulation
acknowledged and recorded to complete
the foreclosure Purpose of notice is to obtain the best bid
for the foreclosed property
(5) Surplus proceeds of foreclosure sale
Nature of judicial foreclosure proceedings
belong to the mortgagor.
(1) Quasi in rem action. Hence, jurisdiction
(6) Debtor (who must be a natural person)
may be acquired through publication.
has the right to redeem the property sold
(2) Foreclosure is only the result or incident within 1 year from and after the date of
of the failure to pay debt. sale.
(3) Survives death of mortgagor. (a) If the mortgagee is a bank, quasi-bank
or trust entity and the debtor is a
juridical person, then there is no right
G.2. EXTRAJUDICIAL FORECLOSURE of redemption. However, juridical
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mortgagors may redeem the property Right of the Mortgagee


before the registration of the TCT to
(1) Mortgagee is entitled to recover
the buyer, which is similar to the
deficiency. This extends to judicial
equity of redemption. The TCT must
foreclosure of mortgage arising out of the
be registered within three months
settlement of estate.
after the foreclosure.
(2) If the deficiency is embodied in a
(b) The mortgagor can only legally
judgment, it is referred to as deficiency
transfer the right to redeem and the
judgment.
use of the property during the period
of redemption. (3) Action for recovery of deficiency may be
filed even during redemption period.
(7) Remedy of party aggrieved by foreclosure
is a petition to set aside sale and the (4) Action to recover prescribes after 10 years
cancellation of writ of possession. from the time the right of action accrues.
However, if the mortgagee is a bank, the
mortgagor is required to post a bond
equal to the value of the mortgagee’s G.5. EFFECT OF INADEQUACY OF PRICE IN
claim. FORECLOSURE SALE
(8) Republication of the notice of sale is (1) Where there is right to redeem,
necessary for the validity of the inadequacy of price is immaterial because
postponed extrajudicial sale the judgment debtor may redeem the
property.
(9) In foreclosure of real estate mortgage
under Act 3135, the buyer at auction may Exception: Where the price is so
petition the land registration court for a inadequate as to shock the conscience of
writ of possession pending the one-year the court, taking into consideration the
period of redemption of the foreclosed peculiar circumstances.
property. (2) Property may be sold for less than its fair
market value, upon the theory that the
lesser the price the easier it is for the
G.3. NATURE OF POWER OF
owner to redeem.
FORECLOSURE BY EXTRAJUDICIAL SALE
(3) The value of the mortgaged property has
(1) Conferred for mortgagee’s protection.
no bearing on the bid price at the public
(2) An ancillary stipulation. auction, provided that the public auction
was regularly and honestly conducted.
(3) A prerogative of the mortgagee.
Note:
A suit for the recovery of the deficiency after
(a) Both should be distinguished from
the foreclosure of a mortgage is in the nature
execution sale governed by Rule 39, ROC.
of a mortgage action because its purpose is
(b) Foreclosure retroacts to the date of precisely to enforce the mortgage contract.
registration of mortgage. [Caltex v. IAC, G.R. No. 74730 (1989)]
(c) A stipulation of upset price, or the
minimum price at which the property
shall be sold to become operative in the H. WAIVER OF SECURITY BY CREDITOR
event of a foreclosure sale at public (1) Mortgagee may waive the right to
auction, is null and void. foreclose his mortgage and maintain a
G.4. RIGHT TO SURPLUS OR DEFICIENCY personal action for recovery of the
indebtedness.
Right of the Mortgagor
(2) Mortgagee cannot have both remedies.
The mortgagor is entitled to the surplus, if This is because he only has one cause of
any, after payment of the proceeds of the sale. action, the non-payment of the mortgage
debt.
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Note: There is no right of redemption in


pledge and chattel mortgage.
I. REDEMPTION
It is a transaction by which the mortgagor
reacquires the property which may have Requisites for a Valid Redemption:
passed under the mortgage or divests the (1) Redemption must be made within 12
property of the lien which the mortgage may months from the date of the registration
have created of the sale in the Office of the Register of
Deeds
I.1. KINDS (a) For natural persons: one year from
the registration of the TCT
(1) Equity of redemption – in judicial
foreclosure of real estate mortgage under (b) For juridical persons: three months
the ROC, it is the right of the mortgagor from foreclosure (before registration)
to redeem the mortgaged property by (2) Payment of the purchase price of the
paying the secured debt within the 120 collateral involved, plus 1% interest per
day period from entry of judgment or month, together with the amount of any
after the foreclosure sale, but before the assessments or taxes if any, paid by the
sale of the mortgaged property or purchaser after the sale
confirmation of sale
Note: Under RA 8791, the amount is the
A formal offer to redeem preserves the amount due under the mortgage deed
right of redemption, e.g., by filing an
action to enforce the right to redeem (3) Written notice of the redemption must be
served on the officer who made the sale
(2) Right of redemption – in extrajudicial and a duplicate filed with the Register of
foreclosure of real estate mortgage, the Deeds of the province.
right of the mortgagor to redeem the
property within a certain period after it
was sold for the satisfaction of the debt. Equity of Redemption Right of Redemption
(If the mortgagee is a bank, the
redemption period expires after Sec. 3, Rule 68 Act No. 3135
registration of the sale.) Right to redeem the Right to redeem the
(a) For natural persons – one year from property after default property within 1 year
the registration of the TCT in the performance of from the date or
the obligation but registration of the
(b) For juridical persons – three months before the certificate of sale
from the foreclosure foreclosure sale
(c) Formal offer to redeem must be with
Applies to judicial Applies to
tender of redemption price to
foreclosure of real extrajudicial
preserve right of redemption
estate and chattel foreclosure of real
mortgage estate mortgage
In a judicial foreclosure sale, the right of
redemption must be allowed by law.
The rule up to now is that the right of a
The references in Rule 68 and Rule 39 to the purchaser at a foreclosure sale is merely
right of redemption are not grants of this inchoate until after the period of redemption
statutory prerogative. To claim a right of has expired without the right being exercised.
redemption in judicial foreclosure, there must The title to land sold under mortgage
be a specific law that allows it. foreclosure remains, in the mortgagor or his
grantee until the expiration of the redemption
Example: RA 8791 (General Banking Law of
period and conveyance by the master's deed.
2000)
[Medida v. CA, G.R. No. 98334 (1992)]

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VII. Antichresis D. AS DISTINGUISHED FROM OTHER


CONTRACTS
Antichresis Pledge
Antichresis – a real security transaction that Kind of property
arises by contract, where the antichretic
creditor acquires the right to receive the fruits Real property Personal property
of an immovable of the antichretic debtor,
Perfection
with the obligation to apply them to the
payment of the interest, if owing, and Mere consent Delivery of thing
thereafter to the principal. [Art. 2132, NCC] pledged

A. CHARACTERISTICS Antichresis Real mortgage


(1) Accessory contract – it secures the Possession
performance of a principal obligation
Delivered to creditor Retained by debtor
(2) Formal contract – it must be in a specified
Right to the fruits
form to be valid [Art. 2134, NCC]
Creditor acquires only Creditor does not
Note: The obligation to pay interest is not the
the right to receive have the right to
essence of the contract of antichresis;
fruits receive fruits, but a
antichresis is only applicable to securing the
real right over the
payment of interest-bearing loans. It is
property is created
susceptible of guaranteeing all kinds of
obligations, pure or conditional. Payment of taxes and charges
Creditor is generally Creditor has no
obliged to pay obligation to pay
B. FORMAL REQUISITES
The amount of the principal and the interest Application of fruits
must be specified in writing; otherwise, the First applied to the Mortgagee has no
contract of antichresis shall be void [Art. payment of interest, such obligation
2134, NCC] and then to principal
There must be an express agreement that the
debtor will give possession of the property to
creditor and that the latter will apply the E. OBLIGATIONS OF ANTICHRETIC
fruits to the interest, if any, then to the CREDITOR
principal of his credit. (1) To pay taxes and charges on the estate,
including necessary expenses [Art. 2135,
NCC]
C. OBJECT OF THE CONTRACT
Note: The creditor may avoid said
An antichresis can cover only the fruits of an obligation by:
immovable property.
(a) Compelling the debtor to reacquire
Delivery of the immovable is necessary for the enjoyment of the property
creditor to receive the fruits, not to make the
contract binding. (b) By stipulation to the contrary
(2) To apply all the fruits, after receiving
them, to the payment of interest, if owing,
and thereafter to the principal
(3) To render an account of the fruits to the
debtor

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(4) To bear the expenses necessary for its


preservation and repair VIII. Quasi-Contracts

F. REMEDIES OF CREDITOR IN CASE OF A quasi-contract is that juridical relation


NON-PAYMENT OF DEBT resulting from a lawful, voluntary and
unilateral act, and which has for its purpose
(1) Action for specific performance the payment of indemnity to the end that no
(2) Petition for the sale of the real property one shall be unjustly enriched or benefited at
as in a foreclosure of mortgage under the expense of another [Art. 2142]
Rule 68 of the Rules of Court [Art. 2137,
NCC]
A. NEGOTIORUM GESTIO
(a) The parties, however, may agree on (UNAUTHORIZED MANAGEMENT)
an extrajudicial foreclosure in the
same manner as they are allowed in
contracts of mortgage and pledge Negotiorum gestio – takes place when a
[Tavera v. El Hogar Filipino, Inc., G.R. person voluntarily takes charge of another’s
45963 (1939)] abandoned business or property without the
(b) A stipulation authorizing the owner’s authority [Art. 2144]. As a rule,
antichretic creditor to appropriate the reimbursement must be made to the gestor
property upon the non-payment of (i.e., one who carried out the business) for
the debt within the agreed period is necessary and useful expenses.
void [Art. 2088, NCC]

The obligation does not arise:


There is a right of retention in favor of the (1) When the property or business is not
creditor, which is used as a means of neglected or abandoned;
extinguishing the obligation. The debtor
cannot reacquire enjoyment of the (2) If in fact the manager has been tacitly
immovable until he pays what he owes to the authorized by the owner.
creditor. [Ortiz v. Kayanan, et al., G.R. No. L- In the first case, the provisions of Articles
32974 (1979)] 1317, 1403, No. 1, and 1404 regarding
unauthorized contracts shall govern.
Because of the right of the creditor to In the second case, the rules on agency in
judicially foreclose, antichresis is generally Title X of this Book shall be applicable. [Art.
viewed as a species of real estate mortgage, 2144]
in which the mortgagee retains possession of
the collateral and takes the fruits of the
property in lieu of interest on the debt. A.1. OBLIGATIONS OF A GESTOR
[Gomez-Somera] (1) Perform his duties with all the diligence
of a good father of a family
(2) Pay the damages which through his fault
and negligence may be suffered by the
owner of the property/business under his
management [Art. 2145]
(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]

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(4) Be liable for any fortuitous event under (b) Reimburse the gestor for the necessary
the following conditions: and useful expenses and for the damages
the latter may have suffered in the
(a) If he undertakes risky operations
performance of his duties
which the owner was not accustomed
to embark upon The above obligations shall be incumbent
upon the owner if the management had for
(b) If he has preferred his own interest to
its purpose the prevention of an imminent
that of the owner
and manifest loss, although no benefit may
(c) If he fails to return the property or have been derived. [Art. 2150]
business after demand of the owner
If the owner did not derive any benefit and
(d) If he assumed management in bad there was no imminent and manifest danger
faith [Art. 2147] to the property or business, the owner would
still be liable for the abovementioned
(e) If he is manifestly unfit to carry on the
obligations and expenses, provided:
management
(1) The gestor has acted in good faith; and
(f) If by his intervention he prevented a
more competent person from taking (2) The property or business is intact, ready
up the management. [Art. 2148] to be returned to the owner. [Art. 2151]
Note: The gestor shall not be liable for (e)
and (f) if the management was assumed
A.3. EFFECT OF RATIFICATION
to save the property or business from
imminent danger. The ratification of the management by the
owner of the business produces the effects of
(5) Be personally liable for contracts which
an express agency, even if the business may
he entered into with third persons, even
not have been successful. [Art. 2149]
though he acted in the name of the
owner, and there shall be no right of
action between the owner and third
A.4. EXTINGUISHMENT OF MANAGEMENT
persons.
(1) When the owner repudiates or puts an
The gestor shall NOT be personally liable
end thereto
for such contracts, provided:
(2) When the gestor withdraws from the
(a) The owner has expressly or tacitly
management, subject to Art. 2144
ratified the management, or
(3) By the death, civil interdiction, insanity or
(b) When the contract refers to things
insolvency of the owner or the gestor.
pertaining to the owner of the
[Art. 2153]
business. [Art. 2152]
Note: The responsibility of two or more
gestors shall be solidary, unless the B. SOLUTIO INDEBITI (UNDUE
management was assumed to save the PAYMENT)
thing or business from imminent danger.
Solutio indebiti – takes place when something
is received when there is no right to demand
A.2. OBLIGATIONS OF THE OWNER OF THE it, and it was unduly delivered through
PROPERTY OR BUSINESS mistake. The recipient has the duty to return
it [Art. 2154].
Although the management was not expressly
ratified, the owner who enjoys the This situation covers payment by reason of a
advantages of the same shall: mistake in the construction or application of a
doubtful or difficult question of law [Art.
(a) Be liable for the obligations incurred in 2155]
his interest

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B.1. WHEN DEBT NOT YET DUE (2) For the return of the price or assign the
action to collect the sum if he has
If the payer was in doubt whether the debt
alienated the same. [Art. 2160]
was due, he may recover if he proves that it
was not due. [Art. 2156]
B.5. EXEMPTION FROM THE OBLIGATION
TO RESTORE THE PAYMENT UNDULY
B.2. RESPONSIBILITY OF TWO OR MORE
MADE
PAYEES
A person who, believing in good faith that the
When there has been payment of what is not
payment was being made of a legitimate and
due, their responsibility is solidary.
subsisting claim,
(1) destroyed the document, or
B.3. WHEN MONEY OR THING DELIVERED
(2) allowed the action to prescribe, or
IS OWNED BY THIRD PERSON
(3) gave up the pledges, or
The payee cannot demand that the payor
prove his ownership of the thing delivered. (4) cancelled the guaranties for his right
shall be exempt from the obligation to
Nevertheless, should he discover that the
restore.
thing has been stolen and who its true owner
is, he must advise the latter. The person who paid unduly may proceed
only against the true debtor or the guarantors
If the owner, in spite of such information,
with regard to whom the action is still
does not claim it within the period of one
effective. [Art. 2162]
month, the payee shall be relieved of all
responsibility by returning the thing
deposited to the payor.
B.6. PRESUMPTION OF PAYMENT BY
If the payee has reasonable grounds to MISTAKE, DEFENSE
believe that the thing has not been lawfully
The presumption arises if something which
acquired by the payor, the former may return
had never been due or had already been paid
the same. [Art. 2158]
was delivered; but he from whom the return
is claimed may prove that the delivery was
made out of liberality or for any other just
B.4. LIABILITY OF PAYEE
cause.
If in bad faith, he shall be liable:
(1) For legal interest if a sum of money is
involved, or C. OTHER QUASI-CONTRACTS
(2) For the fruits received or which should (1) When, without the knowledge of the
have been received if the thing produces person obliged to give support, it is given
fruits, and by a stranger, the latter shall have a right
to claim the same from the former, unless
(3) For any loss or impairment of the thing it appears that he gave it out of piety and
for any cause, and without intention of being repaid. [Art.
(4) For damages to the person who delivered 2164]
the thing, until it is recovered. [Art. 2159] (2) When funeral expenses are borne by a
third person, without the knowledge of
those relatives who were obliged to give
If in good faith, he shall be liable: support to the deceased, said relatives
(1) For the impairment or loss of the thing shall reimburse the third person, should
certain and determinable or its the latter claim reimbursement. [Art.
accessories and accessions insofar as he 2165]
has thereby been benefited. (3) When the person obliged to support an
orphan, or an insane or other indigent
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person unjustly refuses to give support to and refuses to contribute to the expenses
the latter, any third person may furnish but is benefited by the project as
support to the needy individual, with right executed shall be liable to pay his share
of reimbursement from the person of said expenses. [Art. 2174]
obliged to give support. The provisions of
(12) Any person who is constrained to pay the
this article apply when the father or
taxes of another shall be entitled to
mother of a child under eighteen years of
reimbursement from the latter. [Art.
age unjustly refuses to support him. [Art.
2175]
2166]
(4) When through an accident or other cause
a person is injured or becomes seriously
ill, and he is treated or helped while he is
not in a condition to give consent to a
contract, he shall be liable to pay for the
services of the physician or other person
aiding him, unless the service has been
rendered out of pure generosity. [Art.
2167]
(5) When during a fire, flood, storm, or other
calamity, property is saved from
destruction by another person without
the knowledge of the owner, the latter is
bound to pay the former just
compensation. [Art. 2168]
(6) When the government, upon the failure of
any person to comply with health or
safety regulations concerning property,
undertakes to do the necessary work,
even over his objection, he shall be liable
to pay the expenses. [Art. 2169]
(7) When by accident or other fortuitous
event, movables separately pertaining to
two or more persons are commingled or
confused, the rules on co-ownership shall
be applicable. [Art. 2170]
(8) The rights and obligations of the finder of
lost personal property shall be governed
by Articles 719 and 720. [Art. 2171]
(9) The right of every possessor in good faith
to reimbursement for necessary and
useful expenses is governed by Article
546. [Art. 2172]
(10) When a third person, without the
knowledge of the debtor, pays the debt,
the rights of the former are governed by
Articles 1236 and 1237. [Art. 2173]
(11) When in a small community a nationality
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
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These take precedence over ordinary


IX. Concurrence and preferred credits insofar as the property, to
Preference of Credits which the liens attach, is concerned. [Gomez-
Somera]
Pro-rating – total amount to be paid is equal
Concurrence of credits – implies possession to:
by two or more creditors of equal rights or Credit
privileges over the same property or all of the
property of the debtor, and the value of such ------------------ x value of property
property is insufficient to pay in full all the Total amount of
claims.
concurring
Preference of credits – is a method adopted to
determine and specify the order in which debts
credits should be paid in the final distribution
of the proceeds of the insolvent’s assets, as
opposed to a lien, which creates a charge on NB: Sec. 136 of RA 10142 (FRIA) creates a
a particular property. [DBP v. NLRC, G.R. No. special preference of credit in favor of trade-
86932 (1990)] related claims upon trade-related assets.
This special preferred credit enjoys absolute
Preference – is the right held by a creditor to priority over all other claims, including taxes.
be preferred in the payment of his claim [Gomez-Somera]
above others out of the debtor’s assets.
Article 2241 refers only to specific immovable
property. It does not cover claims for the
A. WHEN RULES ON PREFERENCE payment of money, which is generic property
APPLICABLE and not specific or determinate. [Cordova v.
Reyes Daway Lim Bernardo Lindo Rosales Law
(1) There are two or more creditors Offices, G.R. No. 146555 (2007)]
(2) With separate and distinct claims
(3) Against the same debtor (2) Ordinary Preferred Credits
(4) Who has insufficient property, and These enjoy a preference, excluding the
(5) Such debtor is insolvent credits that are later in order, but only as
against the value of the property not
otherwise subjected to any special preferred
B. CLASSIFICATION OF CREDITS credit.

(1) Special Preferred Credits


These are considered as mortgages or Art. 2244 does not create a lien on specific
pledges of real or personal property, or liens property; rather, it creates rights in favor of
within the purview of legal provisions certain creditors to have the free property of
governing insolvency. [Art. 2243, NCC] the debtor applied in accordance with an
order of preference. [Gomez-Somera]
Taxes in Art. 2241 and 2242 shall first be
satisfied. [Art. 2243]
Note: Only taxes in 2241 and 2242 enjoy a NB: Article 110 of the Labor Code does not
preference; for all other claims, there is only a create a lien in favor of workers or employees
concurrence of credits. [Gomez-Somera] for unpaid wages upon the properties of the
employer. The first preference in Article 110
instead modifies the order of preference in
Special preferred credits exclude all other Article 2244 by removing the one-year
claims to the extent of the value of the limitation and by moving claims for unpaid
affected property. wages from second priority to first priority in

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the order of preference in 2244. [Gomez- (4) Credits guaranteed with a pledge so long
Somera] as the things pledged are in the hands of
For Articles 2242 and 2249 to apply, there the creditor, or those guaranteed by a
must be first some proceedings where the chattel mortgage, upon the things
claims of all the preferred creditors may be pledged or mortgaged, up to the value
bindingly adjudicated [De Barretto v. thereof;
Villanueva, G.R. No. L-14938, resolution (5) Credits for the making, repair,
(1962)]. This applies to cases involving either safekeeping or preservation of personal
specific immovable or specific movable property, on the movable thus made,
property. [DBP v CA, G.R. No. 126200 (2001)] repaired, kept or possessed;
Taxes and assessments in 2244 do not have (6) Claims for laborers' wages, on the goods
the overriding preference that 2241 and 2242 manufactured or the work done;
create. [Gomez-Somera]
(7) For expenses of salvage, upon the goods
salvaged;
(3) Common Credits (8) Credits between the landlord and the
These enjoy no preference, as there is only a tenant, arising from the contract of
concurrence of credits, which must be paid tenancy on shares, on the share of each in
pro rata regardless of dates [Arts. 2245, 2251]. the fruits or harvest;
(9) Credits for transportation, upon the
These are not liens and do not attach to any
specific property of the debtor. [Gomez- goods carried, for the price of the contract
Somera] and incidental expenses, until their
delivery and for thirty days thereafter;
(10) Credits for lodging and supplies usually
B.1. SPECIAL PREFERRED CREDITS ON furnished to travellers by hotel keepers,
SPECIFIC MOVABLE PROPERTY on the movables belonging to the guest
as long as such movables are in the hotel,
Art. 2241. With reference to specific movable
but not for money loaned to the guests;
property of the debtor, the following claims
or liens shall be preferred: (11) Credits for seeds and expenses for
cultivation and harvest advanced to the
(1) Duties, taxes and fees due thereon to the
debtor, upon the fruits harvested;
State or any subdivision thereof;
(12) Credits for rent for one year, upon the
(2) Claims arising from misappropriation,
personal property of the lessee existing
breach of trust, or malfeasance by public
on the immovable leased and on the
officials committed in the performance of
fruits of the same, but not on money or
their duties, on the movables, money or
instruments of credit;
securities obtained by them;
(3) Claims for the unpaid price of movables (13) Claims in favor of the depositor if the
depositary has wrongfully sold the thing
sold, on said movables, so long as they
deposited, upon the price of the sale.
are in the possession of the debtor, up to
the value of the same; and if the movable
has been resold by the debtor and the
In the foregoing cases, if the movables to
price is still unpaid, the lien may be
which the lien or preference attaches have
enforced on the price; this right is not lost
been wrongfully taken, the creditor may
by the immobilization of the thing by
demand them from any possessor, within
destination, provided it has not lost its
thirty days from the unlawful seizure.
form, substance and identity; neither is
the right lost by the sale of the thing
together with other property for a lump
Trade-related claim preference over trade-
sum, when the price thereof can be
related assets
determined proportionally;

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Sec 136. RA 10142. …trade-related claims of imposed upon the donee, upon the
clients or customers of a securities market immovable donated;
participant which, for purposes of investor
(10) Credits of insurers, upon the property
protection, are hereby deemed to have
insured, for the insurance premium for
absolute priority over all other claims of
two years.
whatever nature or kind insofar as trade-
related assets are concerned.
B.3. ORDINARY PREFERRED CREDITS
B.2. SPECIAL PREFERRED CREDITS ON Art 2244. With reference to other property,
SPECIFIC IMMOVABLE PROPERTY AND real and personal, of the debtor, the
REAL RIGHTS following claims or credits shall be preferred
in the order named:
Art. 2242. With reference to specific
immovable property and real rights of the (1) Proper funeral expenses for the debtor, or
debtor, the following claims, mortgages and children under his or her parental
liens shall be preferred, and shall constitute authority who have no property of their
an encumbrance on the immovable or real own, when approved by the court;
right:
(2) Credits for services rendered the insolvent
(1) Taxes due upon the land or building; by employees, laborers, or household
helpers for one year preceding the
(2) For the unpaid price of real property sold,
commencement of the proceedings in
upon the immovable sold;
insolvency;
(3) Claims of laborers, masons, mechanics
(3) Expenses during the last illness of the
and other workmen, as well as of
debtor or of his or her spouse and
architects, engineers and contractors,
children under his or her parental
engaged in the construction,
authority, if they have no property of their
reconstruction or repair of buildings,
own;
canals or other works, upon said
buildings, canals or other works; (4) Compensation due the laborers or their
dependents under laws providing for
(4) Claims of furnishers of materials used in
indemnity for damages in cases of labor
the construction, reconstruction, or repair
accident, or illness resulting from the
of buildings, canals or other works, upon
nature of the employment;
said buildings, canals or other works;
(5) Credits and advancements made to the
(5) Mortgage credits recorded in the Registry
debtor for support of himself or herself,
of Property, upon the real estate
and family, during the last year preceding
mortgaged;
the insolvency;
(6) Expenses for the preservation or
(6) Support during the insolvency
improvement of real property when the
proceedings, and for three months
law authorizes reimbursement, upon the
thereafter;
immovable preserved or improved;
(7) Fines and civil indemnification arising
(7) Credits annotated in the Registry of
from a criminal offense;
Property, in virtue of a judicial order, by
attachments or executions, upon the (8) Legal expenses, and expenses incurred in
property affected, and only as to later the administration of the insolvent's
credits; estate for the common interest of the
creditors, when properly authorized and
(8) Claims of co-heirs for warranty in the
approved by the court;
partition of an immovable among them,
upon the real property thus divided; (9) Taxes and assessments due the national
government, other than those mentioned
(9) Claims of donors or real property for
in Articles 2241, No. 1, and 2242, No. 1;
pecuniary charges or other conditions

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(10) Taxes and assessments due any province, fees due the State or any subdivision
other than those referred to in Articles thereof [Art. 2247]
2241, No. 1, and 2242, No. 1; (3) Those credits which enjoy preference in
(11) Taxes and assessments due any city or relation to specific real property or real
municipality, other than those indicated rights exclude all others to the extent of
in Articles 2241, No. 1, and 2242, No. 1; the value of the immovable or real right
to which the preference refers [Art.2248].
(12) Damages for death or personal injuries
caused by a quasi-delict; (4) If there are two or more credits with
respect to the same specific real property
(13) Gifts due to public and private institutions
or real rights, they shall be satisfied pro
of charity or beneficence;
rata, after the payment of the taxes and
(14) Credits which, without special privilege, assessment of the taxes and assessments
appear in [a] a public instrument; or (b) in upon the immovable property or real
a final judgment, if they have been the right [Art. 2249].
subject of litigation. These credits shall
(5) The excess, if any, after the payment of
have preference among themselves in the
the credits which enjoy preference with
order of priority of the dates of the
respect to specific property, real or
instruments and of the judgments,
personal, shall be added to the free
respectively.
property which the debtor may have, for
the payment of other credits [Art. 2250].
Worker preference in case of bankruptcy (6) Those credits which do not enjoy any
preference with respect to specific
PD 442 Labor Code, as amended, Art. 110. In property, and those which enjoy
the event of bankruptcy or liquidation of an preference, as to the amount not paid,
employer’s business, his workers shall enjoy shall be satisfied according to the
first preference as regards their wages and following rules:
other monetary claims, any provisions of law
to the contrary notwithstanding. Such unpaid (a) Order established by Art. 2244
wages and monetary claims shall be paid in (b) Common credits referred to in Art.
full before claims of the government and 2245 shall be paid pro rata
other creditors may be paid. regardless of dates [Art. 2251].

B.4. COMMON CREDITS Articles 2241 and 2242 jointly with Articles
Art. 2245. Credits of any other kind or class, 2246 to 2249 establish a two-tier order of
or by any other right or title not comprised in preference. The first tier includes only taxes,
the four preceding articles, shall enjoy no duties and fees due on specific movable or
preference. immovable property. All other special
preferred credits stand on the same second
tier to be satisfied pari passu and pro rata, out
C. ORDER OF PREFERENCE OF of any residual value of the specific property
CREDITS to which such other credits relate. [Republic v.
Peralta, G.R. No. 56568 (1920)]
(1) Credits which enjoy preference with
respect to specific movables exclude all
others to the extent of the value of the D. EXEMPT PROPERTY
personal property to which the preference
refers [Art. 2246]. (1) Present property
(2) If there are two or more credits with (a) Family home [Arts. 152, 153 and 155]
respect to the same specific movable (b) Right to receive support, as well as
property, they shall be satisfied pro rata, money or property obtained by such
after the payment of duties, taxes and
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support, shall not be levied upon on


attachment or execution. [Art. 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

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CIVIL LAW
LAND TITLES
AND DEEDS

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(f) At least two (2) witnesses


I. TORRENS SYSTEM
(g) Notarial acknowledgment

A. GENERAL PRINCIPLES
ESTATE – An estate, strictly speaking,
Land Title – It is the evidence of the right of represents the nature, extent, degree, and
the owner or the extent of his interest, by quantity of a person’s interest in land.
which he can maintain control, and as a rule,
assert right to exclusive possession and
enjoyment of the property. [Peña, Types Of Estate:
Registration of Land Titles and Deeds, p. 3]
(1) Freehold Estate – Indicates title of
ownership
Title and Certificate of Title Distinguished (a) Fee Simple – An absolute title in
perpetuity; Title to land is conferred
upon a man and his heirs absolutely
Title Certificate of Title and without any limitation imposed
upon the estate

Lawful cause or It is a mere evidence (b) Fee Tail – One designed to pass title
ground of possessing of ownership; it is not from grantee to his heirs, in the intent
that which is ours. the title to the land of the grantor being to keep the
itself.2 property in the grantee’s line of issue
(c) Life Estate – One held for the
That which duration of the life of the grantee; In
constitutes a just some cases, it may terminate earlier
cause of exclusive as by forfeiture
possession, or which
is the foundation of (2) Less-than-Freehold Estate – Signifies
ownership of some sort of right short of title
property. (a) Estate for Years – In the nature of a
lease; grantee or lessee takes over
possession of the land for a period
The title is a conclusive evidence of ownership agreed upon but the grantor retains
and it cannot be attacked collaterally. the legal title to the property
(b) Tenancy from period to period – Also
DEED – A written instrument executed in in the nature of a lease which may run
accordance with law, wherein a person grants from month to month or from year to
or conveys to another certain land, tenements year, with the peculiarity of automatic
or hereditaments. renewal from time to time, unless
expressly terminated by either party
(c) Tenancy at will – Another form of
Elements Of A Deed: lease agreement where a person is
(a) Grantor permitted to occupy the land of
another without any stipulation as to
(b) Grantee period, but either party reserves the
(c) Words of Grant right to terminate the occupation at
will or at any time
(d) Description of the property involved
(e) Signature of the grantor
A.1. LAND REGISTRATION
A judicial or administrative proceeding
2
Castillo v. Escutin, G.R. No. 171056, March 13, 2009 whereby a person’s claim of ownership over a
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particular land is determined and confirmed


or recognized so that such land and the
Purposes Of Land Registration
ownership thereof may be recorded in a
public registry. (1) Constructive notice to the whole world.
[Sec. 52, PD 1529]
Note: It is not a mode of acquiring ownership.
It is only a means to confirm the fact of its (2) To notify and protect the interests of
existence with notice to the world at large. strangers to a given transaction, who may
be ignorant thereof [Sapto, et al. v.
Fabiana, 103 Phil. 683, 1958]
Nature of Land Registration – Judicial
(3) As held in Legarda v. Saleeby [31 Phil. 590
proceedings for the registration of lands
(1915)]
throughout the Philippines shall be in rem
and shall be based on the generally accepted (a) To quiet title to the land and to stop
principles underlying the Torrens system [Sec. forever any question as to the legality
2, par. 1, PD 1529] of said title
It is therefore binding on the whole world (b) To relieve the land of unknown claims
because “by the description in the notice (of
(c) To guarantee the integrity of land
initial hearing of the application for
titles and to protect their
registration) “To Whom It May Concern,” all
indefeasibility once the claim of
the world are made parties defendant.”
ownership is established and
[Aquino, Land Registration and Related
recognized
Proceedings, p. 3, citing Esconde v. Borlongay,
152 SCRA 603, 1987] (d) To give every registered owner
complete peace of mind
(e) To issue a certificate of title to the
Laws Implementing Land Registration
owner which shall be the best
(1) Public Land Act [CA 141, as amended] evidence of his ownership of the land
(2) Property Registration Decree [PD 1529, (f) To avoid conflicts of title in and to
as amended] real estate and to facilitate
transactions
(3) Cadastral Act [Act 2259, as amended]
(4) As held in Capitol Subdivisions, Inc. v.
(4) Indigenous Peoples Rights Act of 1997
Province of Negros Occidental [7 SCRA 60
[RA 8371]
(1963)]
(5) Emancipation Decree [PD 27, as
(a) To avoid possible conflicts of title in
amended]
and to real property, and
(6) Comprehensive Agrarian Reform Law of
(b) To facilitate transactions relative
1988 [RA 6657, as amended]
thereto by giving the public the right
to rely upon the face of the Torrens
certificate of title and to dispense
To simplify and streamline land registration
with the need of inquiring further
proceedings, Presidential Decree No. 1529
was issued on June 11, 1978, otherwise known
as the Property Registration Decree,
Object of Registration – Only real property or
governing registration of lands under the
real rights may be the object of registration
Torrens system as well as the recording of
under the existing land registration laws.
transactions relating to unregistered lands,
including chattel mortgages. This Decree
consolidates, in effect, all pre-existing laws
A.2. CLASSIFICATION OF LANDS: [ART. XII,
on property registration with such SEC. 3 OF THE 1987 CONSTITUTION]
appropriate modifications as are called for by
existing circumstances. [Pena, p. 9] (1) Private or public

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(2) Alienable or inalienable The boldest effort to grapple with the


problem of simplification of title to land was
(3) Registered or unregistered
made by Mr. (afterwards Sir Robert) Torrens,
(4) Registrable or Non-registrable a layman, in South Australia in 1857. . . In the
Torrens system title by registration takes the
place of "title by deeds" of the system under
Classification of lands is an exclusive the "general" law. A sale of land, for example,
prerogative of the executive department. In is effected by a registered transfer, upon
the absence of such classification, the lands which a certificate of title is issued. The
remain as unclassified until it is released certificate is guaranteed by statute, and, with
therefrom and rendered open to disposition. certain exceptions, constitutes indefeasible
The President, through a Presidential title to the land mentioned therein. The
Proclamation or Executive Order can classify object of the Torrens system, then, is to do
or reclassify land to be included or excluded away with the delay, uncertainty, and
from the public domain. The DENR Secretary expense of the old conveyancing system.
is also empowered to approve a land
The Torrens system was introduced in the
classification and declare such land as
Philippines by Act No. 496, which took effect
alienable and disposable. [ Agcaoili LTD
on Jan. 1, 1903. This was later amended and
Handout 2016, citing Fortuna v. Republic, G.R.
superseded by PD 1529 which took effect on
No. 173423, March 5, 2014]
June 11, 1978.
The underlying principle of the Torrens
Registrable lands are: system is security with facility in dealing with
(1) Alienable public agricultural lands, land. This is made possible by defining the
absolute status of a given property in a
If the land is in the public domain, the certificate of title with a governmental and
land must be classified as alienable and universal guaranty. This certificate of title
disposable. It must be classified as such should better be known as certificate of title
at the time of filing the application for and encumbrances. In the words of Torrens
registration. [Republic v. CA and Naguit, himself the main object is “to simplify,
2005] quicken, and cheapen the transfer of real
(2) Private lands estate and to render title safe and
indefeasible.” [The Philippine Torrens System
by Florencio Ponce 1964]
Non-registrable lands - those found in the
Civil Code dealing with non-registrable
properties (e.g. property of public dominion) Advantages
(1) Secures title
(2) Protection against fraud
B. TORRENS SYSTEM
(3) Simplified dealings
Torrens System - A system for registration of
land under which, upon landowner’s (4) Restoration of the estates to its just value,
application, the court may, after appropriate whose depreciation is caused by some
proceedings, direct the issuance of a blur, technical defect
certificate of title. [Black’s Law Dictionary];
(5) Barred the recurrence of faults in the title
those systems of registration of transactions
[Legarda v. Saleeby]
with interest in land whose declared object is,
under governmental authority, to establish
and certify to the ownership of an absolute
Nature: Judicial in nature.
and indefeasible title to realty, and to simplify
its transfer. [Grey Alba v. De la Cruz, G.R. No. Purpose: The real purpose of the Torrens
L-5246 (1910)] system of registration is to quiet title to land;
to put a stop forever to any question of the

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legality of the title, except claims which may (3) Patents – Whenever public land is by the
arise subsequent thereto. [Agcaoili, p. 9] Government alienated, granted or
conveyed to any person, the same shall
be brought forthwith under the
C. ADMINISTRATION OF THE TORRENS operation of this Decree [PD 1529, Sec.
SYSTEM 103, par. 1]
(1) Land Registration Authority (a) Patents only involve public lands
which are alienated by the
• The agency charged with the efficient Government pursuant to the Public
execution of the laws relative to the Land Act [CA 141, as amended]
registration of lands
(b) The patent (even if denominated as
• Under the executive supervision of the deed of conveyance) is not really a
DOJ conveyance but a contract between
• Consists of an Administrator assisted the grantee and the Government
by 2 Deputy Administrators and evidence of authority to the
Register of Deeds to make
(2) Register of Deeds registration.
• Constitutes a public repository of (c) The act of registration is the
records of instruments affecting operative act to affect and convey
registered or unregistered lands and the land.
chattel mortgages in the province or
Probative Value: A Torrens Certificate of Title
city wherein such office is situated
is valid and enforceable against the whole
• Headed by the Register of Deeds, world. It may be received in evidence in all
assisted by a Deputy courts of the Philippines, and shall be
conclusive as to all matters contained therein,
principally the identity of the owner of the
D. CERTIFICATE OF TITLE covered land thereby and identity of the land.
The Torrens Title – Certificate of ownership A Torrens title, once registered, cannot be
issued by the Register of Deeds naming and defeated, even by adverse, open and
declaring the owner of the real property notorious possession. A registered title under
described therein free from all liens and the Torrens system cannot be defeated by
encumbrances, except such as may be prescription. The title, once registered, is
expressly noted thereon or otherwise notice to the whole world. All persons must
reserved by law take notice. No one can plead ignorance of
the registration. [Egao v. CA, 1989]
(1) Original Certificate of Title (OCT) – It is
the first certificate of title issued in the
name of the registered owner by the E. EFFECT OF REGISTRATION UNDER
Register of Deeds covering a parcel of
land which had been registered under
THE TORRENS SYSTEM
the Torrens System, by virtue of judicial (1) Land is placed under the operation of the
or administrative proceedings Torrens system
(2) Transfer Certificate of Title (TCT) – The (2) Claims and liens of whatever character
subsequent certificate of title pursuant existing against the land prior to the
to any deed of transfer or conveyance to issuance of the certificate of title are cut
another person. The Register of Deeds off by such certificate and the certificate
shall make a new certificate of title and so issued binds the whole world,
give the registrant an owner’s duplicate including the government
certificate. The previous certificate shall
(a) It is an elemental rule that a decree of
be stamped “cancelled.”
registration bars all claims and rights
which arose or may have existed prior

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to the decree of registration. By the (iii) When acquisition of certificate is


issuance of the decree, the land is attended by fraud
bound and title thereto quieted,
(5) Torrens certificate is presumed valid and
subject only to certain exceptions
devoid of flaws.
under the property registration
decree. [Heirs of Alejandra Delfin, Note: Registration is not equivalent to legal
namely, Leopoldo Delfin, et al. v. title
Avelina Rabadon, G.R. No. 165014,
July 31, 2013] • Under the Torrens system, registration
only gives validity to the transaction or
(b) Exceptions: creates a lien upon the land. It merely
(i) Those claims noted on the confirms, but does not confer, ownership
certificate [Lu v. Manipon, GR No. 147072 (2002)]

(ii) Liens, claims, or rights arising or


existing under the laws and the E.1. EFFECT OF NON-REGISTRATION
Constitution, which are not by law
If a purchaser, mortgagee or grantee should
required to appear on record in
fail to register his deed the conveyance, in
the Register in order to be valid
light of our existing registration laws, shall
(iii) Unpaid real estate taxes levied not be valid against any person unless
and assessed within 2 years registered.
immediately preceding the
Exceptions:
acquisition of any right over the
land by an innocent purchaser for (1) The grantor,
value
(2) His heirs and devisees, and
(3) Title to the land becomes non-
(3) Third persons having actual notice or
prescriptible
knowledge thereof.
(a) Even adverse, notorious, and
It is a settled rule that lands under a Torrens
continuous possession under claim of
title cannot be acquired by prescription or
ownership for the period fixed by law
adverse possession. Section 47 of P.D. No.
is ineffective against a Torrens title
1529, the Property Registration Decree,
[JM Tuason and Co. Inc. v. CA, 1979]
expressly provides that no title to registered
(b) The fact that the title to the land was land in derogation of the title of the
lost does not mean that the land registered owner shall be acquired by
ceased to be registered land before prescription or adverse possession. [Dream
the reconstitution of its title. It cannot Village Neighborhood Association, Inc.,
perforce be acquired by prescription. represented by its Incumbent President Greg
[Ruiz v. CA, 1977] Seriego v. Bases Conversion Development
Authority, G.R. No.192896, July 24, 2013.]
(4) Land becomes incontrovertible and
indefeasible. A decree of registration and
registered title cannot be impugned,
E.2. DEALINGS IN LAND BEFORE
enlarged, altered, modified, or
ISSUANCE OF DECREE
diminished either in collateral or direct
proceeding after the lapse of the 1-year With the filing of an application for
period prescribed by the law. registration, the land described therein does
not cease to become open to any lawful
(a) Exceptions:
transaction. If the transaction takes place
(i) If previous valid title of the same before the issuance of the decree of
land exists registration, Section 22 of PD 1529 provides
that the instrument is to be presented to the
(ii) When the land covered is not
RTC, together with a motion praying that the
capable of registration
same be considered in relation with the
pending application.
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However, if the motion is filed after the


decision of adjudication has become final but II. THE REGALIAN
before the issuance of the decree by the
Administrator of Land Registration Authority,
DOCTRINE
the court shall require the interested party to [N.B. This is not included in the Bar Syllabus]
pay the fees prescribed as if such instrument
had been presented for registration in the A western legal concept that was first
office of the Register of Deeds. [Peña, p. 72- introduced by the Spaniards into the country
73] through the laws of the Indies and the Royal
Cedulas whereby the Philippines passed to
Spain by virtue of “discovery” and conquest.
E.3. LACHES, WHEN APPLICABLE Consequently, all lands became the exclusive
patrimony and dominion of the Spanish
Laches sets in if it would take 18 years for a Crown. [Agcaoili]
person to file an action to annul the land
registration proceedings, especially so if the
registrant has already subdivided the land Sec. 2, Art. XII of the 1987 Constitution
and sold the same to innocent third parties. A
party’s long inaction or passivity in asserting All lands of the public domain, waters,
his rights over disputed property precludes minerals, coal, petroleum, and other mineral
him from recovering the same. [Heirs of oils, all forces of potential energy, fisheries,
Teodoro dela Cruz v. CA, 298 SCRA 172; forests or timber, wildlife, flora and fauna,
Aurora Ignacio v. Valeriano Basilio, et al., G.R. and other natural resources are owned by the
No. 122824, Sept. 26, 2001] State. With the exception of agricultural
lands, all other natural resources shall not be
alienated. The exploration, development, and
utilization of natural resources shall be under
the full control and supervision of the State.
The State may directly undertake such
activities, or it may enter into co-production,
joint venture, or production-sharing
agreements with Filipino citizens, or
corporations or associations at least 60 per
centum of whose capital is owned by such
citizens. Such agreements may be for a
period not exceeding twenty-five years,
renewable for not more than twenty-five
years, and under such terms and conditions
as may be provided by law. In cases of water
rights for irrigation, water supply, fisheries, or
industrial uses other than the development of
waterpower, beneficial use may be the
measure and limit of the grant.
The State shall protect the nation’s marine
wealth in its archipelagic waters, territorial
sea, and exclusive economic zone, and
reserve its use and enjoyment exclusively to
Filipino citizens.
The Congress may, by law, allow small-scale
utilization of natural resources by Filipino
citizens, as well as cooperative fish farming,
with priority to subsistence fishermen and
fish workers in rivers, lakes, bays, and
lagoons.

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The President may enter into agreements government and thereafter the Philippine
with foreign-owned corporations involving Republic
either technical or financial assistance for It does not negate native title to lands held in
large-scale exploration, development, and private ownership since time immemorial.
utilization of minerals, petroleum, and other [Cruz v. Sec. of Environment and Natural
mineral oils according to the general terms Resources]
and conditions provided by law, based on real
contributions to the economic growth and Native title recognizes ownership of land by
general welfare of the country. In such Filipinos independent of any grant from the
agreements, the State shall promote the Spanish crown on the basis of possession
development and use of local scientific and since time immemorial [cf: Cariño v. Insular
technical resources. Government] Lands embraced by native title
are presumed to have been held prior to the
The President shall notify the Congress of Spanish conquest and never to have been
every contract entered into in accordance public land.
with this provision, within thirty days from its
execution.
A. EFFECTS
The principle of State ownership of lands and (1) All lands of public domain belong to the
all other natural resources had its roots in the State, and that the State is the source of
1935 Constitution, which expressed the any asserted right to ownership in land
overwhelming sentiment in the Convention in and charged with the conservation of
favor of the principle of State ownership of such patrimony [Republic v. IAC, GR No.
natural resources and the adoption of the 71285]
Regalian doctrine as articulated in Sec. 1, Art
(2) Under the Regalian doctrine, all lands of
XIII.
whatever classification and other natural
The 1973 Constitution reiterated the Regalian resources not otherwise appearing to be
Doctrine in Sec. 8, Art. XIV. clearly within private ownership are
presumed to belong to the State which is
The present Constitution provides that,
the source of any asserted right to
except for agricultural lands of the public
ownership of land. [Repubic v. Remnan
domain which alone may be alienated, forest
Enterprises, Inc. G.R. No. 199310]
or timber, and mineral lands, as well as all
other natural resources must remain with the (3) The burden of proof in overcoming the
State, the exploration, development, and presumption of State ownership of the
utilization of which shall be subject to its full lands of the public domain is on the
control and supervision albeit allowing it to person applying for registration (or
enter into co-production, joint venture, or claiming ownership), who must prove
production-sharing agreements, or into that the land subject of the application is
agreements with foreign-owned corporations alienable or disposable. To overcome this
involving technical or financial assistance for presumption, incontrovertible evidence
large-scale exploration, development, and must be established that the land subject
utilization. [Secs. 2 and 3, Art. XII; La Bugal- of application (or claim) is alienable or
B’laan Tribal Association, Inc. v. Ramos] disposable. [Valiao v. Republic, G.R. No.
170757]

The Regalian Doctrine is enshrined in the


1987 Constitution [Art 12, Sec 2 & 3] which B. CONCEPT OF NATIVE TITLE, TIME
states that all lands of public domain belong IMMEMORIAL POSSESSION
to the State, thus private title to land must be
traced to some grant, express or implied, A recognized exception to the theory of jura
from the State, i.e. The Spanish Crown or its regalia, the ruling in Cariño v. Insular
successors, the American Colonial Government, institutionalized the recognition
of the existence of native title to land, or
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ownership of land by Filipinos by virtue of particularly the home ranges of ICCs/IPs who
possession under a claim of ownership since are still nomadic and/or shifting cultivators
time immemorial and independent of any
grant from the Spanish Crown [Agcaoili]
Certificate of Ancestral Domain Title (CADT)
Lands under native title are not part of public
refers to a title formally recognizing the rights
domain, “lands possessed by an occupant
of possession and ownership of ICCs/IPs over
and his predecessors since time immemorial,
their ancestral domains identified and
such possession would justify the
delineated in accordance with this law [Sec.
presumption that the land had never been
3(c), IPRA]
part of the public domain or that it had been
private property even before the Spanish
conquest [Republic v. CA, GR No. 130174]
Certificate of Ancestral Lands Title (CALT)
refers to a title formally recognizing the rights
of ICCs/IPs over their ancestral lands.
B.1. CERTIFICATE OF ANCESTRAL DOMAIN
TITLE Individually-owned ancestral lands, which are
agricultural in character and actually used for
A formal recognition, when solicited by
agricultural, residential, pasture, and tree
Indigenous Cultural Communities/
farming purposes, including those with a
Indigenous People (ICCs/IPs) concerned,
slope of eighteen percent (18%) or more, are
shall be embodied in a Certificate of
hereby classified as alienable and disposable
Ancestral Domain Title (CADT), which shall
agricultural lands [Sec. 12, IPRA]
recognize the title of the concerned ICCs/IPs
over the territories identified and delineated Native title, however, is a right of private
[Sec. 11, IPRA] ownership particularly granted to ICCs/IPs
over their ancestral lands and domains. The
IPRA categorically declares ancestral lands
B.2. ANCESTRAL DOMAINS and domains held by native title as never to
have been public land. [Cruz v. Sec. of
Refer to all areas generally belonging to
Environment and Natural Resources, 2000,
ICCs/IPs comprising lands, inland waters,
GR No. 135385]
coastal areas, and natural resources therein,
held under a claim of ownership, occupied or
possessed by ICCs/IPs, by themselves or
through their ancestors, communally or
individually since time immemorial,
continuously to the present except when
interrupted by war, force majeure or
displacement by force, deceit, stealth or as a
consequence of government projects or any
other voluntary dealings entered into by
government and private
individuals/corporations, and which are
necessary to ensure their economic, social
and cultural welfare.
It shall include ancestral lands, forests,
pasture, residential, agricultural, and other
lands individually owned whether alienable
and disposable or otherwise, hunting
grounds, burial grounds, worship areas,
bodies of water, mineral and other natural
resources, and lands which may no longer be
exclusively occupied by ICCs/IPs but from
which they traditionally had access to for
their subsistence and traditional activities,
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Exceptions:
III. CITIZENSHIP
(1) Aliens by way of hereditary succession
REQUIREMENT [Sec. 7, Art. XII, 1987 Constitution]
[N.B. This is not included in the Bar Syllabus] (2) Natural born citizens who have lost their
citizenship:
For business use: limited to 5,000 sq. m.
A. INDIVIDUALS for urban land and 3 hectares for rural
land [RA No. 7042 as amended by RA No.
8179]
Art. XII, Sec. 3, 1987 Constitution provides, in
part: But where a Filipino citizen naturalized as
a citizen in a foreign country has
Lands of the public domain are classified into “reacquired” his Philippine citizenship
agricultural, forest or timber, mineral lands under the terms of RA 9225 (August 29,
and national parks. Agricultural lands of the 2003) otherwise known as the
public domain may be further classified by “Citizenship Retention and Re-
law according to the uses to which they may acquisition Act of 2003,” the area
be devoted. Alienable lands of the public limitations may no longer apply since the
domain shall be limited to agricultural lands. law expressly grants him the same right,
Private corporations or associations may not as any Filipino citizen, to “enjoy full civil
hold such alienable lands of the public and political rights” upon the re-
domain except by lease, for a period not acquisition of his Filipino citizenship
exceeding twenty-five years, renewable for [Agcaoili, p. 189].
not more than twenty-five years, and not to
exceed one thousand hectares in area. (3) Aliens, although disqualified to acquire
Citizens of the Philippines may lease not lands of public domain, may lease private
more than five hundred hectares, or acquire land for a reasonable period provided,
not more than twelve hectares thereof, by that such lease does not amount to a
purchase, homestead, or grant. virtual transfer of ownership. They may
also be given an option to buy property
on the condition that he is granted
A.1. THE KRIVENKO DOCTRINE Philippine citizenship. [Llantino v. Co
liong Chong, GR No. 29663]
The capacity to acquire private land is made
dependent upon the capacity to acquire or (4) Lands acquired by an American citizen
hold lands of public domain. Private land prior the proclamation of Philippine
may be transferred or conveyed only to Independence on July 4, 1946 but after
individuals or entities ‘qualified to acquire the passage of the 1935 Constitution may
lands of public domain’ [II Bernas] be registered, based on the ordinance
appended to the 1935 Constitution. [Moss
The 1935 Constitution reserved the right for v. Director of Lands, GR No. L-27170]
Filipino citizens or corporations at least sixty
percent of the capital of which was owned by (5) Land sold to an alien which is now in the
Filipinos. Aliens, whether individuals or hands of a naturalized citizen can no
corporations, have been disqualified from longer be annulled [De Castro v. Tan, GR
acquiring public lands; hence they have also No. L-31956]. The litigated property is
been disqualified from acquiring private now in the hands of a naturalized Filipino.
lands. [Krivenko v. Register of Deeds, GR No. It is no longer owned by a disqualified
L-630, 1947] vendee. The purpose of the prohibition
ceases to be applicable. [Barsobia v.
General Rule: Non-Filipinos cannot acquire or Cuenco, GR No. L-33048]
hold title to private lands of public domain,
except only by way of legal succession [Halili v.
CA, GR No. 113539, Sec. 2, 5 Art XII
Constitution]
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B. CORPORATIONS
IV. ORIGINAL
Private corporations may not hold alienable
lands of the public domain except by lease for REGISTRATION
a period not exceeding twenty-five years,
renewable for not more than twenty-five
years, and not to exceed one thousand ORIGINAL REGISTRATION - This is a
hectares in area. [1987 Constitution, Art. XII, proceeding brought before the land
Sec. 3] registration court to determine title or
ownership of land on the basis of an
application for registration or answer by a
Limitations to Ownership of Land by claimant in a cadastral registration.
Corporations:
A decree of registration merely confirms, but
(1) For private lands: does not confer ownership. [City Mayor of
Parañaque City v. Ebio, G.R. No. 178411,
• At least 60% Filipino [Sec. 2, Art. XII,
(2010)] Registration does not vest title or give
1987 Constitution; Agcaoili]
title to the land, but merely confirms and
• Restricted as to extent reasonably thereafter protects the title already
necessary to enable it to carry out the possessed by the owner, making it
purpose for which it was created imprescriptible by occupation of third parties.
The registration does not give the owner any
• If engaged in agriculture, it is better title than he has. He does not obtain
restricted to 1,024 hectares title by virtue of the certificate. He secures his
(2) For patrimonial property of the State [Sec. certificate by virtue of the fact that he has a
3, Art. XII, 1987 Constitution] fee simple title. [Legarda v. Saleeby, G.R. No.
L-8936, (1915)]
• Lease only for a limited period of
25 years
• Limited to 1,000 hectares Original Distinguished From Subsequent

• Applies to both Filipino and Original Registration Subsequent


Foreign Corporations Registration
When right of Any transaction
• This limitation does not apply
where the corporation acquired ownership or title to affecting such
the land, the same was already land is for the first originally registered
time made of public land, if in order, may
private land [Republic v. IAC and
record be registered in the
Acme]
Office of the Register
of Deeds concerned
A corporation sole may acquire and register
private agricultural land [RC Apostolic
Administrator of Davao v. LRC, GR No. L-8415 A. KINDS OF ORIGINAL
(1957)]: A corporation sole, which consists of REGISTRATION:
one person only, is vested with the right to (1) Voluntary – by filing with the proper
purchase and hold real estate and register court under:
the same in trust for the faithful or members
of the religious society or church for which the (a) PD 1529, Property Registration
corporation was organized Decree
(b) CA 141, Public Land Act
(c) RA 8371, IPRA
(2) Involuntary – as in Cadastral
Proceedings

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• This is compulsory registration trust by him, unless prohibited by


initiated by the government to the instrument creating the trust.
adjudicate ownership of the land (2) Under Sec. 12, CA 141; Any person who:
• Involuntary on the part of the (a) Is a citizen of the Philippines over the
claimant but they are compelled age of 18, or the head of a family
to substantiate their claim or
interest (b) Does not own more than 24 hectares
of land in the Philippines, or has not
had the benefit of any gratuitous
B. WHO MAY APPLY: allotment of more than 24 hectares
of land since the occupation of the
(1) Under Sec. 14, PD 1529 Philippines by the United States
(a) Those who by themselves or through NOTE: they may enter a homestead
their predecessors-in-interest, have of not exceeding 24 hectares of
been in open, continuous, exclusive agricultural land of the public domain
and notorious possession and
occupation of alienable and
disposable lands of the public (3) Under RA 8371
domain under a bona fide claim of
ownership since June 12, 1945, or (a) Sec. 11 – Formal recognition of
earlier. ancestral domains by virtue of Native
Title may be solicited by ICCs/IPs
(b) Those who have acquired ownership concerned
of private lands by prescription under
the provisions of existing laws. (b) Sec. 12 – Option to secure certificate
of title under CA 141 or Land
(c) Those who have acquired ownership Registration Act 496
of private lands or abandoned river
beds by right or accession or (i) Individual members of cultural
accretion under the existing laws. communities with respect to
individually-owned ancestral
(d) Those who have acquired ownership lands who, by themselves or
of land in any other manner provided through their predecessors-in -
for by law (see: Republic represented interest, have been in continuous
by Mindanao Medical Center v CA, G.R. possession and occupation of the
No. 40912 (19760] same in the concept of owner
(i) If land is owned in common, ALL since time immemorial or for a
co-owners shall file the period of not less than thirty (30)
application jointly years immediately preceding the
approval of this Act and
(ii) If land has been sold under pacto uncontested by the members of
de retro, the vendor a retro may the same ICCs/IPs shall have the
file an application for the original option to secure title to their
registration of the land, provided, ancestral lands
however that should the period
for redemption expire during the (ii) Option granted shall be exercised
pendency of the registration within 20 years from the approval
proceedings and ownership to the of RA 8371
property consolidated in the
vendee a retro, the latter shall be
substituted for the applicant and Jurisdiction
may continue the proceedings. Where to File: The court that should take
(iii) A trustee on behalf of his cognizance of a registration case is that
principal may apply for original which has territorial jurisdiction over the
registration of any land held in property.
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General Rule: RTC of the province, city, or (3) The full names and addresses of all
municipality where the property is situated occupants of the land and those of
the adjoining owners, if known, and, if
The RTC shall have exclusive jurisdiction over
not known, it shall state the extent of
all applications original for registration of
the search to find them.
title, with power to hear and determine all
questions arising upon such applications or (4) Whether the property is conjugal,
petition. [Sec. 2, par. 2, P.D. No. 1529] paraphernal or exclusively owned by
the applicant.
Exception: Delegated jurisdiction to the MTC,
MeTC, and MCTC by the Supreme Court in (c) Documents to accompany the application
cadastral and land registration cases IF: [from Regulations in Ordinary Land
Registration Cases]
(1) There is no controversy over the land, OR
(1) Tracing-cloth plan duly approved by
(2) Its value is less than P100,000 [Sec. 34,
the Director of Lands, together with
BP 129]
two blueprint or photographic copies
thereof;
C. PROCEDURE IN ORDINARY LAND (2) Three copies of the corresponding
REGISTRATION technical descriptions;
(3) Three copies of the surveyor’s
certificate;
STEP 1: Survey of the land by the Bureau of
Lands or a duly registered private surveyor (4) All original muniments of title in the
possession of the applicant which
Note: No plan of such survey, whether it be prove his rights, to the title he prays
original or subdivision, may be admitted in for or to the land he claims; and
land registration proceedings until approved
by the Director of Lands [Sec. 1858, (5) Certificate in quadruplicate of the city
Administrative Code] or provincial treasurer of the assessed
value of the land, at its last
assessment for taxation, or, in the
STEP 2: Filing of application for registration absence thereof, that of the next
by the applicant; preceding year. However, in case the
land has not been assessed, the
(a) Form of the application application may be accompanied with
(1) In writing an affidavit in quadruplicate of the
fair market value of the land, signed
(2) Signed by the applicant/s or person by three disinterested persons.
duly authorized in his behalf
(d) Amendments to the Application
(3) Sworn before any officer authorized
to administer oath for the province or (1) Sec. 19, PD 1529 permits the
city where the application was applicants to amend the application
actually signed at any stage of the proceedings upon
such just and reasonable terms as the
(4) Application is presented in duplicate court may order;
(b) Contents of the application:
(2) However, Sec. 23, PD 1529 mandates
(1) A description of the land that there is a need to comply with
the required publication and notice as
(2) The citizenship and civil status of the
in an original application if the
applicant, whether single or married,
amendment is substantial as in:
and, if married, the name of the wife
or husband, and, if the marriage has (i) A change in the boundaries
been legally dissolved, when and how (ii) An increase in the area of the
the marriage relation terminated. It land applied for; or
shall also state:
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(iii) The inclusion of an additional evidences attached thereto are transmitted


land by the Clerk of Court to the Land Registration
Authority (LRA)
(e) Special Cases:
(1) If the land is bounded by a road, the
applicant must state in his STEP 5: Publication of a notice of the filing of
application if he claims any portion of the application and date and place of hearing
the land within the limits of the road,
(a) Publication shall be sufficient to confer
or if he likes to have the boundaries
jurisdiction upon the court. [Sec. 23, PD
determined. [Sec. 20, PD 1529]
1529]
(2) If the applicant is a non-resident, he
(b) Form and contents of the notice:
shall appoint an agent or
representative who is a Philippine (1) Addressed to all persons appearing
resident. [Sec. 16, PD 1529] to have an interest in the land
involved
(3) Intestate Estate of Don Mariano San
Pedro v. CA (1996): A person claiming (2) Requires all persons concerned to
ownership of real property must appear in court on the date and time
clearly identify the land claimed by indicated to show cause why the
him. application for registration should not
be granted
(4) In re: Application for Land Registration
v. Republic (2008): An applicant in a (c) The public shall be given notice of the
land registration case must prove the initial hearing of the application by
facts and circumstances evidencing publication
the alleged ownership of the land
(1) The Commissioner of Land
applied for. General statements
Registration (CLR) shall cause it to be
which are mere conclusions of law
published once in the Official gazette
and not factual proof of possession
AND once in a newspaper of general
are unavailing. The deeds in its favor
circulation
only proved possession of its
predecessors-in-interest as early as (2) This is sufficient to confer jurisdiction
1948. (The law now stands that a to the court
mere showing of possession for 30 (d) It is not necessary to give personal notice
years is not sufficient. Open, to the owners or claimants of the land
continuous, exclusive, and notorious sought to be registered to vest the court
(OCEN) possession must be shown to with authority over the res. Land
have started on June 12, 1945 or registration proceedings are actions in
earlier.) rem. [Dir. Of Lands v. CA, 276 SCRA 276]
(e) Once the registration court had acquired
STEP 3: Setting of the date for the initial jurisdiction over a certain parcel, or
hearing of the application by the Court; parcels, of land in the registration
proceedings in virtue of the publication of
(a) The Court shall issue an order setting the
the application, that jurisdiction attaches
date and hour of the initial hearing within
to the land or lands mentioned and
5 days from filing of the application
described in the application. If it is later
(b) The initial hearing shall be 45 – 90 days shown that the decree of registration had
from the date of the order [Sec. 23, PD included land or lands not included in the
1529] original application as published, then
the registration proceedings and the
decree of registration must be declared
STEP 4: Transmittal to the LRA null and void insofar — but only insofar —
as the land not included in the
The application and the date of initial hearing
together with all the documents or other
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publication is concerned. [Benin v. Tuason, (3) The court may also cause notice to be
57 SCRA 531] served to such other persons and in
such manner as it may deem proper.
(c) Notice of application and initial hearing
STEP 6: Service of notice upon contiguous
by publication is sufficient and the mere
owners, occupants and those known to have
fact that a person purporting to have a
interest in the property by the Sheriff;
legitimate claim in the property did not
(a) Mailing: receive personal notice is not a sufficient
ground to invalidate the proceedings
(1) Within 7 days from publication, the
although he may ask for the review of the
CLR shall mail a copy of the notice
judgment or the reopening of the decree
(2) Copies of the notice shall be mailed of registration, if he was made the victim
to: of actual fraud. [Republic v. Abadilla, CA;
(i) Every person named in the notice G.R. No. 6902-R, Oct. 6, 1951]
whose address is known.
(ii) the Secretary of Public Highways, STEP 7: Filing of answer or opposition to the
to the Provincial Governor, and to application by any person whether named in
the Mayor of the municipality or the notice or not;
city, in which the land lies, if the
(a) Who may file? Any person claiming an
applicant requests to have the
interest, whether named in the notice or
line of a public way or road
not
determined
(b) When to file? On or before the date of
(iii) Secretary of Agrarian Reform, the
initial hearing, or within such further time
Solicitor General, the Director of
as may be allowed by the court.
Lands, the Director of Mines
and/or the Director of Fisheries (c) What shall it contain? It shall state all the
and Aquatic Resources, (as objections and the interest claimed by the
appropriate) if the land borders party the remedy desired.
on a river, navigable stream or
(d) How shall it be made? It shall be signed
shore, or on an arm of the sea
and sworn to by him or by some other
where a river or harbor line has
duly authorized person. Sec. 25, PD 1529
been established, or on a lake, or
provides for the requisites of an
if it otherwise appears from the
opposition:
application or the proceedings
that a tenant-farmer or the (1) It shall set forth “all the objections to
national government may have a the application” and
claim adverse to that of the
(2) It shall state the “interest claimed by
applicant
the party filing the same”
(b) Posting:
(e) Effect of Failure to Answer:
(1) CLR shall cause the sheriff or his
(1) If no one appears/files an answer,
deputy to post the notice at least 14
upon motion, the court shall order a
days before the hearing:
default to be recorded.
(2) In a conspicuous place on each parcel
(2) By the description in the notice "To all
of land included in the application
Whom It May Concern", all the world
and in a conspicuous place on the
are made parties defendant and shall
bulletin board of the municipal
be concluded by the default order.
building of the municipality or city in
which the land or portion thereof is (3) Where an appearance has been
situated. entered and an answer filed, a default
order shall be entered against

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persons who did not appear and (i) Adopt the same
answer.
(ii) Set aside the report
(4) Absence of opposition does not justify
(iii) Modify the report
outright registration. [Director of
Lands vs. Agustin, 1921] (iv) Refer back or recommit the
case to the referee for
(f) Effects of Default:
presentation of evidence
(1) With respect to the Applicant – he
has the right to present or adduce
evidence ex parte STEP 9: Promulgation of judgment by the
Court;
(2) With respect to those covered by the
default order – they have no legal (a) This is the adjudication, determination,
standing in court; therefore, they are and resolution of the issue of ownership
no longer allowed to participate and
(b) Forms of Judgment:
no opportunity to present evidence
(1) Dismissal of the application – with
(g) For relief from an order of default, see Sec.
prejudice or without prejudice
3, Rule 18, Rules of Court
(2) Partial Judgment – in a case where
only a portion of the land subject of
STEP 8: Hearing of the case by the court registration is contested, the court
may render partial judgment
(a) Applicable procedural law:
provided that a subdivision plan
(1) Reception of evidence is governed by showing the contested and
PD 1529 uncontested portions approved by the
Director of Land is previously
(2) Rules of Court shall, insofar as not
submitted to said court. [Sec. 28, PD
inconsistent with the provisions of the
1529]
Decree, be applicable to land
registration and cadastral cases by (3) Judgment Confirming Title -
analogy or in a suppletory character Judgment may be rendered
and whenever practicable and confirming the title of the applicant,
convenient [Sec. 34, PD 1529] or the oppositor as the case may be,
to the land or portions thereof upon
(b) Sec. 27, PD 1529: Court may either:
finding that the party concerned has
(1) Hear the parties and their evidence, sufficient title proper for registration.
or [Sec. 29, PD 1529]
(2) Refer the case or any part thereof to a (c) Finality of Judgment - Sec. 30, par. 1, PD
referee 1529 provides that the judgment becomes
final upon the expiration of 30 days
(a) Referee shall hear the parties,
counted from receipt of notice of
receive their evidence, and submit
his report thereon to the Court judgment.
within 15 days after termination Note: This has been MODIFIED to the
of such hearing lapse of 15 days counted from receipt of
notice of judgment as per Sec. 39, BP 129
(b) Hearing before a referee may be
held at any convenient place
within the province or city as may
STEP 10: Issuance of the decree
be fixed by him and after
reasonable notice thereof shall (a) If the court finds after hearing that the
have been served to the parties applicant or adverse claimant has title as
concerned stated in his application or adverse claim
and proper for registration, a decree of
(c) Upon receipt of the report the
Court may:
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confirmation and registration shall be (5) Set forth the estate of the owner, and
entered also, in such manner as to show their
relative priority, all particular estates,
(b) The Court declares the decision final and
mortgages, easements, liens,
instructs the LRA to issue a decree of
attachments and other
confirmation and registration within 15
encumbrances, including rights of
days from entry of judgment
tenant-farmer, if any, to which the
Note: It is not the court that issues the land or owner’s estate is subject,
decree, but the LRA
(6) Contain any other matter properly to
(c) One year after issuance of the decree, it be determined
becomes incontrovertible and
amendments of the same will not be
allowed except in cases of clerical errors STEP 12: Sending of copy of the decree of
registration to the corresponding Register of
(1) Court retains jurisdiction over the
Deeds (Registrar of Land Titles and Deeds)
case until after the expiration of 1 year
from the issuance of the decree of
registration. [Gomez v. CA, 1988]
STEP 13: Transcription of the decree of
(2) Note: While a decision in land registration
registration proceeding becomes final
(a) It is transcribed in the registration book of
after the expiration of thirty days from
the Registrar of Land Titles and Deeds
the date of service of its notice, the
decree of registration does not (b) Registrar issues owner’s duplicate OCT of
become final until after the lapse of the applicant by the Registrar of Land
one year from the date of its issuance Titles and Deeds, upon payment of the
and entry. prescribed fees.

STEP 11: Entry of the decree of registration D. EVIDENCE NECESSARY


(a) Decree is entered in the LRA Proofs necessary in land registration
(b) Every decree of registration shall: (1) Proofs that land has been declassified
(1) Bear the day of the year, hour, and from the forest zone, is alienable or
minute of its entry, disposable, and is registrable (e.g.
Presidential proclamation, legislative
(2) Be signed by the Administrator of the acts)
Land Registration Authority in his ex
officio capacity as Clerk of Court in (2) Identity of the land (e.g. survey plan)
land registration matters (3) Possession and occupation of the land for
(3) State whether the owner is: the length of time and in the manner
required by law [Sec. 4, PD 1073
(i) Married or unmarried, and if amending Sec. 48(b) and (c) of Public
married, the name of the Land Act]
husband or wife, provided that if
the land adjudicated is conjugal (4) If he claims private ownership not
property, it shall be issued in the because of his possession, he must prove
names of both spouses. the basis of such claim by submitting
muniments of title.
(ii) If the owner is under disability, it
shall state the nature of the
disability, Proving Private Ownership:
(iii) If the owner is a minor, his age (1) Spanish titles are inadmissible and
(4) Contain a description of the land as ineffective proof of ownership in land
finally determined by the court, registration proceedings filed AFTER Aug.
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16, 1976 [PD 892 as discussed in Santiago


v. SBMA, GR No. 156888, 2006] V. SUBSEQUENT
(2) Tax declaration and receipts are not REGISTRATION
conclusive but have strong probative
value when accompanied by proof of
actual possession. [Municipality of SUBSEQUENT REGISTRATION
Santiago vs. CA, 1983]
A proceeding where incidental matters
(3) Other proofs such as testimonial evidence AFTER original registration may be brought
before the land registration court by way of
motion or petition filed by the registered
owner or a party n interest

Necessity And Effects Of Registration


[Sec. 51 and 52, PD 1529]
The deed, mortgage, lease, or other voluntary
instrument, except a will shall ONLY operate
as:
(1) A contract between the parties and
(2) Evidence of authority to the Register of
Deeds to make registration.

The act of registration shall be the operative


act to convey or affect the land insofar as
third persons are concerned.

Also, by registration, it creates constructive


notice to the world.

General Rule: A forged deed is an absolute


nullity and conveys no title.
Exception: If there is good faith, a TCT has
already been issued to the purchaser, the
latter being an innocent purchaser for value
according to Sec. 39, PD 1529, then the title
is good.

General Rule: A person dealing with


registered property need not go beyond, but
only has to rely on, the title. [Campillo v. PNB,
1969]
He is charged with notice only of such
burdens and claims which are annotated on
the title, for registration is the operative act
that binds the property.

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Exception: When should a purchaser


investigate?
Voluntary Dealings Involuntary Dealings
(1) Banks are required to exercise more
care and prudence in dealing with
registered lands for their business is Presentation of the
one affected with public interest. The owner’s duplicate
general rule does not apply. certificate of title is
required to notify; Entry in the day book of
(2) When party concerned has actual
mere entry in the ROD is sufficient notice
knowledge of facts and
day book of the to all persons
circumstances that would impel a
Register of Deeds
reasonably cautious man to make
(ROD) is
inquiry. [Leung Yee v. Strong
insufficient
Machinery, 1918]
(3) When purchaser is in bad faith; e.g. An innocent
he had full knowledge of a previous purchaser for value
sale. [Jamoc v. CA, 1991] of registered land
becomes the
(4) When a person buys land from one registered owner
whose rights over the land is the moment he
evidenced only by a deed of sale and presents and files a Lenin v. Bass, (1952):
an annotation in the certificate of title duly notarized and Entry thereof in the day
but no TCT. [Quiniano v. CA, 1971] valid deed of sale book of the ROD is
and the same is sufficient notice to all
entered in the day persons even if the
Two Types Of Dealings book of the ROD owner’s duplicate
(1) Voluntary Dealings – these are deeds, and at the same certificate of title is not
instruments, documents which are the time he surrenders presented to the ROD.
results of free and voluntary acts of or presents the
parties thereto. owner’s duplicate
certificate of title
(2) Involuntary Dealings – these refer to writ, covering the land
order, or process issued by the court of sold and pays the
record affecting registered land, also registration fees.
other instruments which are not willful
acts of the registered owner, executed Villasor v. Camon,
without his knowledge or consent (1951): It is
necessary to Dir. Of Lands v. Reyes,
register the deed or (1976): Entry in the day
Voluntary Dealings Compared To Involuntary instrument in the book of the ROD is
Dealings entry book of the sufficient notice to all
ROD and a persons of an adverse
memorandum claim without the same
Voluntary Dealings Involuntary Dealings thereof shall also being annotated at the
be made in the back of the certificate
owner’s duplicate of title
certificate and its
original

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(2) File instrument creating or transferring


interest and certificate of title with
Voluntary Dealings Involuntary Dealings
Register of Deeds together with:
(a) Owner’s duplicate - the issuance of a
Spouses Labayen v. new transfer certificate without
Leonardo Serafica, presentation of an owner’s duplicate
AFP Mutual Benefit
(2008): At the time is unwarranted and confers no right
Association v. Santiago,
of the filing of the on the purchaser [PNB v. Fernandez,
(2008): Entry of the
petition for 1935]
attachment in the
cancellation of
books is sufficient (b) Payment of fees & documentary
encumbrance, the
notice to all persons. stamp tax
lease contract
Hence, the fact that the
already lost its (c) Evidence of full payment of real
deed of sale was
efficacy. Thus, estate tax
already annotated is of
there is no basis to
no moment with regard (d) Document of transfer – 1 copy
save its annotation additional for city/provincial assessor
to third persons. The
on defendant’s
preference created by (3) Payment of fees and DST
title. The fact that
the levy on attachment
the cancellation of (a) After payment of entry fee the
is not diminished by
the lease contract Register of Deeds shall enter the
the subsequent
was forged is of no instruments in a primary entry book
registration of the deed
moment, for there [Sec. 56, PD 1529]
of sale.
was no violation of
a right. (b) The national, provincial and city
governments are exempted from
payment of entry fees
A. VOLUNTARY DEALINGS (c) RA 456 prohibits registration of
documents affecting real property
which is delinquent in the payment of
A.1. REGISTRATION OF VOLUNTARY real estate taxes. Further, if evidence
INSTRUMENTS IN GENERAL of such payment is not presented
Process of Registration [Sec. 55, PD 1529] with 15 days from the date of entry of
said document in the primary entry
(1) The deed or other voluntary instrument book of the register of deeds the entry
must contain: shall be deemed cancelled.
(a) The following details of the grantee (4) Entry of the Instrument in the Primary
or other person acquiring or claiming Entry Book:
interest:
Instruments are regarded as registered
(1) Full name from the time the Register of Deeds
(2) Nationality enters them in the book
(3) Residence (5) TCT shall then be issued
(4) Postal address
(5) Civil status (if married, include A.2. REGISTRATION OF DEALINGS LESS
name in full of spouse) THAN OWNERSHIP [SEC. 54, PD 1529]
(b) If grantee is a corporation: If an instrument does not divest ownership or
title from owner or from transferee of the
It must contain a recital showing that registered owners, then NO NEW
such corporation or association is CERTIFICATE shall be entered or issued.
legally qualified to acquire private
lands

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Process of Registration for Dealings less than filed with the Register of Deeds for
Ownership annotation in the TCT.
(1) Filing of the instrument with the Register (3) Register of Deeds shall issue a TCT
of Deeds and cancel the grantor's certificate
partially OR it may be cancelled
(2) A brief memorandum thereof is made:
totally and a new one issued
(a) On the certificate of title by the describing therein the remaining
Register of Deeds and signed by him, portion
and
(c) If there are SUBSISTING encumbrances
(b) On the owner’s duplicate and annotations:
Cancellation or extinguishment of such • They shall be carried over in the new
interests shall be registered in the same certificate or certificates; except when
manner. they have been simultaneously
discharged.

A.3. REGISTRATION OF DEEDS OF SALE


AND TRANSFERS A.4. REGISTRATION OF MORTGAGES AND
(a) If ENTIRE property is the subject [Sec. 57, LEASES [SEC. 60, PD 1529]
PD 1529] Sec. 60, PD 1529 provides that mortgages
(1) Owner executes and registers the and leases shall be registered in the manner
deed which must be sufficient in form. provided in Sec. 54 (Dealings less than
ownership)
(2) A new certificate of title is issued and
Register of Deeds prepares and The deed shall take effect upon the title only
delivers to grantee his owner's from the time of registration.
duplicate certificate When a deed of mortgage is presented, the
(3) Register of Deeds notes upon the Register of Deeds will enter upon the OCT
OCT and the duplicate certificate and upon the owner’s duplicate a
the date of transfer, the volume and memorandum thereof and shall sign said
page of the registration book where memorandum.
the new certificate is registered
(4) The original and the owner's A.5. REGISTRATION OF POWERS OF
duplicate of the grantor's certificate ATTORNEYS
shall be stamped "cancelled".
[Sec. 64, PD 1529]
(5) The deed of conveyance shall be filed
and indorsed with the number and Powers of attorney and revocations shall be
the place of registration of the registered with the Register of Deeds of the
certificate of title of the land province or city where the land lies.
conveyed. Any instrument revoking such power shall be
registered in like manner.

(b) If ONLY A PORTION of property is the


subject [Sec. 58, PD 1529] A.6. REGISTRATION OF TRUSTS
(1) Include a plan which shows all the Registration is by memorandum:
portions already subdivided with
verified and approved technical (1) A memorandum by the words “in trust”
description. or “upon condition” or other apt words is
made if a deed or other instrument is filed
(2) That plan with the certified copy of in order to:
the technical descriptions shall be

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(a) Transfer registered land in trust, or


upon any equitable condition or
Process of Registration
limitation expressed therein, or
(1) Copy of writ in order to preserve any lien,
(b) Create or declare a trust or other
right or attachment upon registered land
equitable interests in such land
shall be filed with the Register of Deeds
without transfer [Sec. 65, PD 1529]
where the land lies, containing number of
(2) A memorandum by the words “with certificate of title of land to be affected or
power to sell,” or “power to mortgage” or description of land [PD 1529, Sec 69]
other apt words is made when:
(2) Register of Deeds to index attachment in
The instrument creating or declaring a names of both plaintiff & defendant or
trust or other equitable interest contains name of person whom property is held or
an EXPRESS POWER to sell, mortgage, in whose name stands in the records
or deal with the land in any manner
(a) If duplicate of certificate of title is not
However, if an implied or constructive trust is presented:
claimed, person claiming such must execute
(i) Register of Deeds shall within 36
a sworn statement thereof with the Register
hours send notice to registered
of Deeds, containing a description of the land,
owner by mail stating that there
the name of the registered owner and a
has been registration &
reference to the number of the certificate of
requesting him to produce
title. Such claim shall not affect the title of a
duplicate so that memorandum
purchaser for value and in good faith before
be made
its registration. [Sec. 68, PD 1529]
(ii) If owner neglects or refuses –
Register of Deeds shall report
B. INVOLUNTARY DEALINGS matter to court.
(b) Court after notice shall enter an order
to owner to surrender certificate at
The following involuntary dealings affecting time & place to be named therein.
registered land must be registered:
(3) Although notice of attachment is not
(1) Attachments [Sec. 69, PD 1529] noted in duplicate, notation in book of
(2) Adverse claim [Sec. 70, PD 1529] entry of Register of Deeds produces effect
of registration already
(3) Sale on execution or for taxes or for any
assessment [Sec. 74, PD 1529]
(4) Notice of lis pendens [Sec. 76, PD 1529] Effect of registration of attachment
(1) Creates real right
B.1. REGISTRATION OF ATTACHMENT (2) Has priority over execution sale
Attachment is a writ issued at the institution (3) But between 2 attachments – one that is
or during progress of an action commanding earlier in registration is preferred
the sheriff to attach the property, rights,
credits or effects of the defendant to satisfy
demands of the plaintiff. Duty of Register of Deeds - Duty is ministerial
but may refuse registration in the following
circumstances:
Kinds (1) Title to land is not in the name of
(1) Preliminary defendant
(2) Garnishment Exception: If petitioner is an heir
(3) Levy on execution

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(2) No evidence is submitted to show that he Adverse claim is not ipso facto cancelled after
has present or possible future interest in 30 days, hearing is necessary. [Sajonas v. CA,
land G.R. No. 102377 (1996)]

B.2. REGISTRATION OF ADVERSE CLAIM B.3. REGISTRATION OF EXECUTION AND


TAX DELINQUENCY SALES
A claim is adverse when: [Sec. 70, par. 1, PD
1529] Execution sale
(1) Claimant’s right or interest in registered (1) To enforce a lien of any description on
land is adverse to the registered owner, registered land, any execution or affidavit
and to enforce such lien shall be filed with
Register of Deeds where the land lies
(2) Such right arose subsequent to date of
original registration, and (2) Register in the registration book &
memorandum upon proper certificate of
(3) No other provision is made in the Decree
title as adverse claim or as an
for the registration of such right or
encumbrance
claimant
(3) To determine preferential rights between
2 liens: priority of registration of
Requisites for registration of an adverse claim: attachment
(1) The adverse claimant must give a
statement of the following in writing:
Tax sale
(a) His alleged right or interest
(a) Sale of land for collection of delinquent
(b) How and under whom such alleged taxes and penalties due the Government
right or interest is acquired
(b) In personam (all persons interested shall
(c) The description of the land in which be notified so that they are given
the right or interest is claimed and opportunity to be heard)
(d) The number of the certificate of title (1) Notice to be given to delinquent tax
payer at last known address
(2) The statement must be:
(2) Publication of notice must also be
(a) Signed by the adverse claimant
made in English, Spanish & local
(b) Sworn before a notary public dialect & posted in a public &
(3) The statement must also state his conspicuous place in place wherein
residence or the place to which all notices property is situated & at the main
may be served upon him. [Lozano v entrance of the provincial building
Ballesteros, G.R. No. 49470 (1991)] (c) Sale cannot affect rights of other lien
holders unless they are given the right to
defend their rights: due process must be
Duration of an adverse claim strictly observed
(a) 30 days from the date of registration. (d) Tax lien superior to attachment
(b) After that the annotation of adverse claim Note: No need to register tax lien because
may be cancelled upon filing of a verified it is automatically registered once the tax
petition by the party in interest. accrues. However, sale of registered land
When cancelled, no second adverse claim to foreclose a tax lien needs to be
based on the same ground may be registered.
registered by the same claimant.

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(4) Administration of the estate of deceased


persons
Process of Registration
(5) Levies on execution
(1) Officer’s return shall be submitted to
Register of Deeds together with duplicate (6) Foreclosure
title
(2) Register in the registration book
Process of Registration: By Memorandum or
(3) Memorandum shall be entered in the Notice stating
certificate as an adverse claim or
(1) The institution of the action or proceeding
encumbrance
(2) The court wherein the same is pending
(4) After the period of redemption has
expired & no redemption (2 years from (3) The date of the institution of the action
registration of auction sale) is made:
(4) Reference to the number of the certificate
cancellation of title & issuance of a new
of title
one
(5) Adequate description of the land affected
(5) Before cancellation, notice shall be sent
and registered owner thereof
to registered owner: to surrender title &
show cause why it shall not be cancelled
Note: Actual knowledge of a person is Other parties who need to register
equivalent to registration as against him (1) Assignee in involuntary proceeding for
insolvency
B.4. REGISTRATION OF NOTICE LIS (a) Duty of the officer serving notice to
PENDENS file a copy of the notice to the
Register of Deeds where the property
Purpose of notice of lis pendens: To keep the
of debtor lies
subject matter within the power of the court
until the entry of final judgment. It therefore (b) Assignee elected or appointed by
creates merely a contingency & not a lien. court shall be entitled to entry of new
certificate of registered land upon
presentment of copy of assignment
When notice of lis pendens is proper: with bankrupt’s certificate of title
(duplicate)
(1) To recover possession of real estate
(c) New certificate shall note that it is
(2) To quiet title
entered to him as assignee or trustee
(3) To remove clouds upon the title thereof in insolvency proceedings
(4) For partition (2) Government in eminent domain
(5) Other proceedings of any kind in court (a) Copy of judgment shall be filed in
directly affecting the title to land or the the Register of Deeds which states
use or occupation thereof or the buildings description of property, certificate
thereon number, interest expropriated,
nature of public use
(b) Memorandum shall be made or new
When notice of lis pendens is NOT proper:
certificate of title shall be issued
(1) Proceedings for the recovery of money
judgments
Effect of registration
(2) Attachments
(1) Impossibility of alienating the property in
(3) Proceedings on the probate of wills
dispute during the pendency of the suit –

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may be alienated but purchaser is subject


to final outcome of pending suit VI. CADASTRAL
(2) Register of Deeds is duty bound to carry REGISTRATION
over notice of lis pendens on all new titles
to be issued [N.B. This is not included in the Bar Syllabus]

Cancellation of lis pendens [Sec. 77, PD 1529] Nature

(1) Before final judgment – court may order It is a proceeding in rem, initiated by the filing
cancellation after showing that notice is of a petition for registration by the
only for the purpose of molesting an government, not by the persons claiming
adverse party or it is not necessary to ownership of the land subject thereof, and
protect the rights of the party who caused the latter are, on the pain of losing their claim
it to be registered thereto, in effect compelled to go to court to
make known their claim or interest therein,
(2) Register of Deeds may also cancel upon and to substantiate such claim or interest.
verified petition of the party who caused
such registration Unlike other kinds of registration, this is
compulsory as it is initiated by the
(3) Deemed cancelled when certificate of government.
clerk of court stating manner of disposal
of proceeding is registered The government does not seek the
registration of land in its name. The objective
of the proceeding is the adjudication of title
to the lands or lots involved in said
proceeding.

Cadastral Distinguished From Ordinary


Registration
Ordinary Cadastral
Registration Registration
Voluntary Compulsory
Applicant is a
Applicant is the
person claiming title
Director of Lands
to the land
Usually involves
private land; it may
also refer to public
agricultural lands if
All classes of land
the object of the
are covered (private
action is judicial
and public alienable
confirmation of
lands)
imperfect or
incomplete title (in
which case CA 141
applies)
Applicant comes to
Government asks the
court to confirm his
court to settle and
title and seek
adjudicate the title of
registration of the
the land
land in his name
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Ordinary Cadastral (b) Full and accurate description of the lands


Registration Registration to be surveyed
In cadastral
registration, if the STEP 4: Publication of notice
applicant cannot
prove that he is (a) Published once in the Official Gazette
entitled to the land, (b) A copy of the notice in English or the
the land becomes national language shall be posted in a
If the applicant fails
public land. conspicuous place on the bulletin board
to prove his title,
application may be However, the of the municipal building of the
dismissed without cadastral case municipality in which the lands or any
prejudice.3 decision does not portion thereof is situated
constitute res
If the judgment
judicata as to bar
determines STEP 5: A copy of the notice shall also be sent
even the same
ownership, then it is to:
claimant from
res judicata upon
subsequently filing (a) Mayor of the municipality
the parties.
an application for
judicial confirmation (b) Barangay captain
of title to the same (c) Sangguniang Panlalawigan and
land, provided the Sangguniang Bayan concerned
requisites are
complied with.4
STEP 6: Geodetic engineers or other Bureau
of Land employees in charge of the survey
A. PROCEDURE IN CADASTRAL shall give notice reasonably in advance of the
REGISTRATION: SEC. 35 AND 36, PD date of the survey
1529
They shall also mark the boundaries of the
STEP 1: Determination of the President that lands with monuments
public interest requires title to unregistered
lands be settled and adjudicated
STEP 7: Interested persons should
• President then orders the Director of
communicate with the geodetic engineer if he
Lands to conduct cadastral survey
requests for any information about the land

STEP 2: Director of lands shall make a


STEP 8: Actual survey and plotting of the
cadastral survey
land

STEP 3: Director of Lands gives notice to


STEP 9: Director of Lands represented by
interested persons
Solicitor General shall institute original
registration proceedings
Contents of the Notice: (a) Petition is filed in the appropriate RTC
where the land is situated
(a) Day on which the survey will begin
(b) Contents of the Petition:
(1) That public interest requires that the
title to such lands be settled and
3
adjudicated and praying that such
Santiago v. Santos, G.R. No. 31568, March 19, 1930;
Verzosa v. Nicolas, G.R. No. 9227, February 10, 1915
titles be so settled and adjudicated
4
Director of Lands v. CA & Pastor, G.R. No. L-47847, July
31, 1981
(2) Description of the lands
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(3) Accompanied by a plan thereof


VII. JUDICIAL
(4) Such other data as may serve to
furnish full notice to the occupants of CONFIRMATION OF
the lands and to all persons who may
claim any right or interest therein IMPERFECT TITLE
[N.B. This is not included in the Bar Syllabus]
STEP 10: Publication, mailing posting
Applicable law: CA 141, as amended
STEP 11: Hearing No title or right to, or equity in, any lands of
the public domain may be acquired by
Jurisdiction of the Cadastral Court:
prescription or by adverse possession or
(1) Adjudicate title to any claimant thereto occupancy except as expressly provided by
law. [Sec 57, CA 141]
(2) Declare land as a public land
The Public Land Act recognizes the concept
(3) Order correction of technical description
of ownership under the civil law. This
(4) Order the issuance of new title in place of ownership is based on adverse possession
the title issued under voluntary and the right of acquisition is governed by the
registration proceedings Chapter on judicial confirmation of imperfect
or incomplete titles.
(5) Determine the priority of overlapping title
(6) Order the partition of the property
When applicable: This applies only to
alienable and disposable agricultural lands of
STEP 12: Decision the public domain. Under Sec. 6 of CA 141, the
President, shall classify the lands of the
public domain into:
STEP 13: Issuance of the decree and
certificate of title (a) Alienable or disposable;
(b) Timber, and

Note: Reopening of cadastral cases no longer (c) Mineral lands,


allowed The rule on confirmation of imperfect title
does not apply unless and until the land
classified as, say, forest land, is released in an
RA 931, effective June 20, 1953 for five (5) official proclamation to that effect so that if
years, authorizing the reopening of cadastral may form part of the disposable agricultural
cases under certain conditions and which had lands of the public domain. [Bracewell v. CA,
been extended until Dec. 31, 1968, is no 2000]
longer in force.
The law, as presently phrased, requires that
possession of lands of the public domain
Courts are thus without jurisdiction or must be from June 12, 1945 or earlier, for the
authority to reopen a cadastral proceeding same to be acquired through judicial
since Dec. 31, 1968. [Aquino, p. 107, citing confirmation of imperfect title [Republic v.
Republic v. Estenzo, 158 SCRA 282, 1988] Doldol, 1998]

Who may apply:


(a) Individuals:
(1) Filipino citizens who by themselves or
through their predecessors-in-
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interest have been in open, still a private corporation may


continuous, exclusive, and notorious institute confirmation proceedings
possession and occupation of under Sec. 48, (b) of the Public Land
alienable and disposable lands of Act if, at the time of institution of the
public domain under a bona fide registration proceedings, the land
claim of acquisition since June 12, was already private land. On the
1945 or prior thereto since time other hand, if the land was still part
immemorial [Sec. 48, CA 141, as of the public domain, then a private
amended by Sec. 4, PD 1073] corporation cannot institute such
proceedings. [Dir. Of Lands v. IAC and
(2) Filipino citizens who by themselves or
ACME, 146 SCRA 509, 1986]
their predecessors-in-interest have
been, prior to effectivity of PD 1073 on
Jan. 25, 1977, in open, continuous,
exclusive, and notorious possession A. FILING OF THE APPLICATION:
and occupation of agricultural lands
of the public domain, under a bona
Period of Filing is EXTENDED: RA No. 9176
fide claim of acquisition of ownership
extended the period to file an application for
for at least 30 years, or at least since
judicial confirmation of imperfect or
Jan. 24, 1947 [RA 1942]
incomplete title to December 31, 2020. Prior
(3) Natural born citizens of the to RA 9176 the deadline for filing was on Dec.
Philippines who have lost their 31, 1987.
citizenship and who has legal
Scope of the Application: RA 9176 also limited
capacity to enter into a contract
the area subject of the application to 12
under Philippine laws may be a
hectares. Prior to RA 9176, the maximum
transferee of private land up to a
area applied for was 144 hectares.
maximum area of 5,000sqm, in case
of urban land, or 3 hectares in case of Applicant must Prove:
rural land to be used by him for
(1) The land is alienable and disposable
business or other purposes [Sec. 5,
land of public domain at the time of
RA 8179]
filing of application); and
(4) Natural-born citizens of the
(2) S/he must have been in open,
Philippines, who have lost their
continuous, exclusive, and notorious
Philippine citizenship, who have
(OCEN) possession and occupation of
acquired disposable and alienable
the land for the length of time and in
lands of the public domain from
the manner and concept provided by
Filipino citizens who had possessed
law [Dir. Of Lands v. Buyco, 1992]
the same in the same manner and for
the length of time indicated in
numbers (1) and (2) above.
B. PROCEDURE IN JUDICIAL
(b) Corporations CONFIRMATION:
(1) Private domestic corporations or Sec. 48, par.1, of CA 141 as amended provides,
associations which had acquired “The following-described citizens of the
lands from Filipino citizens who Philippines, occupying lands of the public
had possessed the same in the domain or claiming to own any such lands or
manner and for the length of time an interest therein, but whose titles have not
indicated in numbers (1) and (2) been perfected or completed, may apply to
above. the Court of First Instance of the province
Notwithstanding the prohibition in where the land is located for confirmation of
the 1973 and 1987 Constitutions their claims and the issuance of a certificate
against private corporations holding of title therefor under the Land Registration
lands of the public domain except by Act…”
lease not exceeding 1000 hectares,
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Hence, the procedure in original registration


discussed in the previous section is also VIII. REMEDIES
followed in judicial confirmation of imperfect [N.B. The Bar Syllabus excluded “Remedies
or incomplete title. sufficiently covered under Remedial Law”]

C. EVIDENCE NECESSARY TO It is important to take note of the following


SUBSTANTIATE APPLICATION: concepts in studying remedies:
The applicant must prove: Innocent Purchaser for Value – one who buys
(1) That the land applied for has been the property of another without notice that
declassified and is a public agricultural some other person has a right to or interest in
land, is alienable and disposable, or it, and who pays a full and fair price at the
otherwise capable of registration. time of the purchase or before receiving any
Specifically, the following may be notice of another person’s claim [Rosales v
presented: Burgos, G.R. No. 143573]

(a) Presidential proclamation Extrinsic or Actual fraud – any fraudulent act


of the successful party in a litigation which is
(b) Executive Order committed outside the trial of a case against
(c) Administrative Order issued by the defeated party, or his agents, attorneys or
the DENR Secretary witnesses, whereby said defeated party is
prevented from presenting fully and fairly his
(d) Bureau of Forest Development side of the case. [Sterling Investment
Land Classification Map Corporation v Ruiz, G.R. No. L-30694]
(e) Certification by the Director of
Forestry
An aggrieved party in a registration
(f) Investigation reports of Bureau of proceeding may avail himself of the following
Lands Investigator remedies:
(g) Legislative act or statute (1) Motion for New Trial [see Rule 37,
(2) The identity of the land; the following ROC] Relief from Judgment [see Rule
may be submitted: 38, ROC]

(a) Survey plan (2) Appeal

(b) Tracing cloth plan and blue print (3) Petition for Review of Decree of
copies of plan Registration

(c) Technical description of the land (4) Action for Reconveyance

(d) Tax declarations (5) Quieting of Title

(e) Boundaries and area (6) Cancellation of Title

(3) Possession and occupation of the land for (7) Action for Damages
the length of time and in the manner (8) Action for Compensation from the
required by law Assurance Fund
(9) Reversion

A. ANNULMENT OF JUDGMENT [SEE


RULE 47, ROC]

Appeal – Sec. 30, PD 1529 as amended by BP


129 provides that an appeal may be taken
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from the judgment of the court as in ordinary (2) The fraud must consist in an
civil cases. intentional omission of fact
required by law to be stated in
• Period in Sec. 30, PD 1529 has been the application or a wilful
modified to 15 days as per Sec. 39, BP 129 statement of a claim against the
truth
Unlike ordinary civil actions, the adjudication (d) Requisites for Petition to Reopen or
of land in a cadastral or land registration Review
proceeding does not become final in the (1) The petitioner must have an estate or
sense of incontrovertibility until after the interest in the land;
expiration of one (1) year after the entry of the
final decree of registration. As long as a final (2) He must show actual fraud in the
decree has not been entered by the LRA and procurement of the decree of
the period of 1 year has not elapsed from date registration;
of such decree, the title is not finally (3) That the action is filed within one year
adjudicated and the decision in the from the issuance and entry of the
registration proceeding continues to be under decree of registration; and
the control and sound discretion of the court
rendering it. [Gomez v. CA, 168 SCRA 503, (4) That the property has not been
(1988)] transferred to an innocent purchaser
for value; and [Agcaoili citing
Walstrom v. Mapa, G.R. No. 38387]
B. PETITION TO REOPEN OR REVIEW
DECREE OF REGISTRATION – SEC. 32,
PD 1529 C. ACTION FOR RECONVEYANCE:
(a) To whom available: Only to an aggrieved (a) When to file:
party who has been deprived of land or (1) Before issuance of decree, or
any estate or interest therein by decree of within/after 1 year from entry
registration
(2) If based on implied trust, 10 years;
(b) When to file: Any time after the rendition
of the court’s decision and before the (3) If based on express trust and void
expiration of 1 year from entry of decree of contract, or if the plaintiff is in
registration possession of the land,
imprescriptible
(1) Upon expiration of the 1 year
period, every decree becomes (4) If based on fraud, 4 years from the
incontrovertible discovery

(2) The Court held that the petition (b) It does not reopen proceedings but a
may be filed at any time after mere transfer of the land from registered
rendition of the court’s decision owner to the rightful owner [Esconde v.
(no need to wait for actual entry Barlongay, 1987]
in the LRA) and before expiration (c) Requisites:
of one year from entry of the final
decree of registration. [Rivera v. (1) The action must be brought in the
Moran, 48 Phil. 836; Director of name of a person claiming ownership
Lands v. Aba, et al., 68 Phil. 85.] or dominical right over the land
registered in the name of the
(c) Sole and ONLY Ground: Actual Fraud defendant;
(1) Actual fraud proceeds from an (2) The registration of the land in the
intentional deception practiced name of the defendant was procured
by means of misrepresentation or through fraud or other illegal means;
concealment of material fact

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(3) The property has not yet passed to an (1) That a person sustains loss or
innocent purchaser for value; and damage, or is deprived of any estate
or interest in land;
(4) The action is filed after the certificate
of title had already become final and (2) On account of the bringing of land
incontrovertible but within 4 years under the operation of the Torrens
from the discovery of the fraud System arising after original
[Balbin v. Medalla, G.R. No. L-46410] registration;
or not later than 10 years in the case
(3) Through fraud, error, omission,
of an implied trust [New Regent
mistake or misdescription in a
Sources, Inc. v. Tanjuatco, G.R. No.
certificate of title or entry or
168800]
memorandum in the registration
book;
D. QUIETING OF TITLE – REMEDY FOR (4) Without negligence on his part; and
THE REMOVAL OF ANY CLOUD OF (5) Is barred or precluded from bringing
DOUBT OR UNCERTAINTY WITH an action for the recovery of such land
RESPECT TO REAL PROPERTY or estate or interest therein. [Agcaoili,
(a) Who may file: See Sec. 1, Rule 63, ROC p. 619]

(b) Requisites:
(1) Plaintiff or complainant has a legal or H. REVERSION
an equitable title to or interest in the Instituted by the government, thru the
real property subject of the action; Solicitor General in all cases where lands of
and public domain are held in violation of the
(2) The deed, claim, encumbrance or Constitution or were fraudulently conveyed.
proceeding claimed to be casting a Indefeasibility of title, prescription, laches,
cloud on his title must be shown to be and estoppel do not bar reversion suits.
in fact invalid or inoperative despite
its prima facie appearance of validity
or legal efficacy.

E. CANCELLATION OF TITLE
It is initiated by a private party usually in a
case where there are two titles issued to
different persons for the same lot. [Agcaoili,
2015]

F. ACTION FOR DAMAGES


It can be availed of when reconveyance is no
longer possible as when the land has been
transferred to an innocent purchaser for value
[Ching v. CA, 1990]

G. ACTION FOR COMPENSATION FROM


THE ASSURANCE FUND
(a) Requisites:

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(i) New interest that does not


IX. PETITIONS AND appear on the instrument have
MOTIONS AFTER been created
(ii) Interest have been terminated or
ORIGINAL ceased
REGISTRATION (iii) Omission or error was made in
entering certificate
(iv) Name of person on certificate
All petitions or motions after original has been changed
registration shall be filed and entitled in the
original case in which the decree of (v) Registered owner has married
registration was entered [Sec 108, PD 1529] (vi) Marriage has terminated
(a) Lost Duplicate Certificate (vii) Corporation has dissolved and
(1) Person in interest must file a sworn has not conveyed the property
statement that the certificate is lost within 3 years after its
or destroyed before the Register of dissolution
Deeds (viii) Allowable corrections as long as
(2) A petition will then be filed for the the rights or interest of persons
issuance of new title are not impaired

(3) Court will order issuance of new title (d) Reconstitution of Certificate of title
after due notice and hearing, with (1) The restoration of the instrument
memorandum that it is issued in which is supposed to have been lost
place of a lost certificate or destroyed in its original form and
(b) Petition seeking surrender of duplicate condition, under the custody of the
title Register of Deeds

(1) In voluntary and involuntary (2) To have the same reproduced after
conveyances; when the duplicate proper proceedings in the same form
cannot be produced, the party must they were when the loss or
petition the court to compel destruction occurred [Heirs of Pedro
surrender of duplicate certificate of Pinote v. Dulay, 1990]
title to Register of Deeds (3) Kinds:
(2) After hearing, court may order (i) Judicial
issuance of a new certificate and
annul the old certificate (1) A petition is filed before the
RTC
(c) Amendment and alteration of certificate
of title (2) Petition is published in the
Official Gazette for 2
(1) A certificate of title cannot be altered consecutive issues and
or amended except in a direct posted on main entrance of
proceeding in court which is summary municipality for at least 30
in nature days before hearing
(2) No amendment or alteration of (3) Hearing is then conducted
decree is permitted except upon order
of the court (4) Court may then order
reconstitution if meritorious
(3) No time limit to file petition
(ii) Administrative, which may be
(4) Grounds: availed only in case of:
(1) Substantial loss or
destruction of original land
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titles due to fire, flood, or


other force majeure as X. DEALINGS WITH
determined by the LRA
UNREGISTERED
(2) Number of certificates of title
lost or damaged should be at LANDS
least 10% of the total number
in possession of the Register
of Deeds No deed, conveyance, mortgage, lease, or
other voluntary instrument affecting land not
(3) In no case shall the number of
registered under the Torrens system shall be
certificates of title lost or
valid, except as between the parties thereto,
damaged be less than 500;
unless such instrument shall have been
AND
recorded in the manner herein prescribed in
(4) Petitioner must have the the office of the Register of Deeds for the
duplicate copy of the province or city where the land lies. [Sec. 113,
certificate of title [RA 6732] par. 1, PD 1529]

Effects Of Transactions Covering Unregistered


Land
(1) As between the parties – The contract is
binding and valid even if not registered
(2) As among third persons – There must be
registration for the transaction to be
binding against third persons

Primary Entry Book And Registration Book


The Register of Deeds for each province or
city shall keep a Primary Entry Book and a
Registration Book.
(1) The Primary Entry Book shall contain,
among other particulars:
(a) Entry number
(b) Names of the parties
(c) Nature of the document
(d) Date, hour and minute it was
presented and received
(2) The Registration Book – Provides spaces
whereon the annotation is made after the
instrument has been entered in the
Primary Entry Book

Process of Registration
(1) Registration is by way of annotation
(2) The instrument dealing with unregistered
land is presented before the Register of
Deeds
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(3) The Register will then determine if it can


be registered: XI. NON-REGISTRABLE
(a) If, on the face of the instrument, it PROPERTIES
appears that it is sufficient in law, the
Register of Deeds shall forthwith
record the instrument All lands of the public domain, waters,
(b) In case the Register of Deeds refuses minerals, coal, petroleum, and other mineral
its administration to record, he shall oils, all forces of potential energy, fisheries,
advise the party in interest in writing forests or timber, wildlife, flora and fauna,
of the ground or grounds for his and other natural resources are owned by the
refusal State. [Sec. 2, Art. XII, 1987 Constitution]

• The latter may appeal the matter


to the Commissioner of Land With the exception of agricultural lands, all
Registration other natural resources shall not be
Recording by the Register of Deeds is alienated. [Sec. 2, Art. XI, 1987 Constitution]
ministerial.
Recording made under this section shall be The classification of public lands is an
without prejudice to a third party with a exclusive prerogative of the Executive
better right. [Sec. 113, PD 1529] Department of the Government and not of
Better right – refers to a right which must the courts. In the absence of such
have been acquired by a third party classification, the land remains as
independently of the unregistered deed, such, unclassified land until it is released therefrom
for instance, as title by prescription, and that and rendered open to disposition. [Aquino, p.
it has no reference to rights acquired under 41, citing Dir. Of Lands and Dir. Of Forest
that unregistered deed itself. [Peña, p. 600] Development v. CA, 129 SCRA 689, 1984]

Involuntary Dealings In Unregistered Lands A. CIVIL CODE PROVISIONS DEALING


WITH NON-REGISTRABLE
PD 1529 now permits the registration of
PROPERTIES
involuntary dealings in unregistered lands.
(1) Properties of public dominion [Art. 420,
Tax sale, attachment and levy, notice of lis
Civil Code]
pendens, adverse claim and other
instruments in the nature of involuntary (a) Those intended for public use, such
dealings with respect to unregistered lands, if as roads, canals, rivers, torrents,
made in the form sufficient in law, shall ports and bridges constructed by the
likewise be admissible to record under Sec. State, banks, shores, roadsteads, and
113. [Sec. 113 (d), PD 1529] others of similar character;
(b) Those which belong to the State,
without being for public use, and are
intended for some public service or
for the development of the national
wealth.
(2) Waters under Art. 502, Civil Code
(a) Rivers and natural beds
(b) Continuous or intermittent waters of
springs and brooks running in their
natural beds and the beds
themselves

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(c) Waters rising continuously or beaches, cannot be registered. Even


intermittently on lands of public alluvial formation along the seashore is
dominion part of public domain. [Aquino, p. 45,
citing Dizon v. Rodriguez, 13 SCRA 704,
(d) Lakes and lagoons formed by Nature
1965]
on public lands, and their beds
(6) Lakes - Lakes are part of public dominion.
(e) Rain waters running through ravines
[Art. 502(4), Civil Code]
or sand beds, which are also part of
public dominion; (7) Creeks and Streams – A dried up creek
bed is property of public dominion
(f) Subterranean waters on public lands
[Fernando v. Acuna, G.R. No. 161030
(g) Waters found within the zone of (2011)
operation of public works, even if
(8) Military or Naval Reservations - The
constructed by a contractor
reservation made segregates it from the
(h) Waters rising continuously or public domain and no amount of time in
intermittently on lands belonging to whatever nature of possession could have
private persons, to the State, to a ripen such possession into private
province, or to a city or municipality ownership. [Republic v. Marcos, G.R. No.
from the moment they leave such L-32941, (1973)]
lands
(9) Watershed - The Constitution expressly
(i) The waste waters of fountains, sewers, mandates the conservation and
and public establishments utilization of natural resources, which
includes the country’s watershed. [Tan v.
Dir. Of Forestry, G.R. No. L-24548, (1983)]
B. SPECIFIC KINDS OF NON- (10) Grazing lands - While the 1987
REGISTRABLE PROPERTIES OR LANDS Constitution does not specifically prove
(1) Forest or timberland, public forest, forest that grazing lands are not disposable, yet
reserves if such lands are part of a forest reserve,
there can be no doubt that the same are
(2) National parks – Under the present incapable of registration. [Aquino, p. 49,
Constitution, national parks are declared citing Dir. Of Lands v. Rivas]
part of the public domain, and shall be
conserved and may not be increased nor (11) Previously titled land - Proceeds from the
diminished, except by law [Rep. v AFP indefeasibility of the Torrens title.
Retirement and Separation Benefits (12) Alluvial deposit along river when man-
System, G.R. No. 180463, (2013)] made - Such deposit is really an
(3) Mangrove swamps - Mangrove swamps or encroachment of a portion of the bed of
mangroves should be understood as the river, classified as property of the
comprised within the public forests of the public domain under Art. 420, par. 1 and
Philippines as defined in Sec. 1820, Art. 502 (1) of the Civil Code, hence not
Administrative Code of 1917. [Dir. Of open to registration. [Republic v. CA, 132
Forestry v. Villareal, G.R. No. L-32266 SCRA 514, 1984]
(1980)] (13) Reservations for public and semi-public
(4) Mineral lands - Both under the 1987 purposes – Sec. 14, Chapter 4, Book III of
Constitution and Sec. 2 of the Public EO No. 292 provides that the President
Land Act, mineral lands are not alienable shall have the power to reserve for
and disposable. [Lepanto Consolidated settlement or public use, and for specific
Mining Co. v. Dumyung, G.R. No. L-31666, public purposes, any of the lands of
(1979)] public domain, the use of which is not
otherwise directed by law.
(5) Foreshore land and seashore and
reclaimed lands- Seashore, foreshore, The land registration court has no jurisdiction
and/or portions of territorial waters and over non-registrable property and cannot
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validly adjudge the registration of title the State which is not bound by any
thereof in favor of a private applicant. [Peña, prescriptive period provided by the
p. 105] Statute of Limitation. [Pena citing
Martinez v. CA, GR No. L-31271
(14) Thus, where it has so been adjudged, the
river not being capable of private
appropriation or acquisition by
prescription, the title thereto may be
attacked, either directly or collaterally by

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CIVIL LAW
TORTS

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I. Preliminary (2) Specific – Includes trespass, assault, battery,


negligence, products liability, and
Considerations intentional infliction of emotional distress

A. DEFINITION OF TORT B. DEFINITION OF QUASI-DELICT

A.1. ACCORDING TO MANNER OF Art. 2176. Whoever by act or omission causes


COMMISSION damage to another, there being fault or
(1) Negligent Tort – consists in the failure to act negligence, is obliged to pay for the damage
according to the standard of diligence done. Such fault or negligence, if there is no pre-
required under the attendant circumstances. existing contractual relation between the
It is a voluntary act or omission which results parties, is called a quasi-delict and is governed
in injury to others, without intending to by the provisions of this Chapter.
cause the same.
Quasi-delict, known in Spanish legal treatises as
Note: While the term “tort” has been used culpa aquiliana, is a civil law concept while torts
interchangeably with the term “quasi-delict”, is an Anglo-American or common law concept.
the latter merely represents an area of tort Torts is much broader than culpa aquiliana
law concerned with damage resulting from because it includes not only negligennce, but
fault (by doing a positive act constituting intentional criminal acts such as assualt and
negligence) or negligence (by omitting to do
battery, false imprisonment and deceit. In the
an act due to negligence) of the defendant.
general scheme of the Philippine legal system
(2) Intentional Tort – perpetrated by one who envisioned by the Commission responsible for
intends to do that which the law has drafting the New Civil Code, intentional and
declared to be wrong. It is conduct where the malicious acts with certain exceptopms, are to
actor desires to cause the consequences of be governed by the Revised Penal Code while
the act, or that he believes that the negligent acts or omissions are to be covered by
consequences are substantially certain to Article 2176 of the Civil Code. In between these
result therefrom. opposite spectrums are injurious acts which, in
the absence of Article 21, would have been
(3) Strict Liability – one is liable independent of beyond redress. Thus, Article 21 fills that vacuum
fault or negligence. It only requires proof of [Baksh v. CA, G.R. No. 97336 (1993)].
a certain set of facts. Liability here is based The concept of quasi-delict does not cover
on the breach of an absolute duty to make intentional acts. The liability arising from from
something safe. It most often applies to extra-contractual culpa is always based upon a
ultra-hazardous activities or in product voluntary act or omission, which, without willful
liability cases. It is also known as “absolute intent, but by mere negligence or inattention,
liability” or liability without fault.” has caused damage to another [Cango v Manila
Railroad, G.R. No. 12191 (1918)]
Strict liability is imposed by articles 1314, The concept of quasi-delict is so broad that it
1711, 1712, 1723, 2183, 2184, 2187, 2189, 2190, includes not only injuries to persons but also
2191, 2192, 2193. damage to property [Cinco v Canonoy, G.R. No.
L-33171 (1979)]
A.2. ACCORDING TO SCOPE
(1) General – Tort liability is based on any of the C. CULPA AQUILIANA DISTINGUISHED
three categories: intentional, negligent, FROM CRIME
strict liability

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A quasi-delict is a separate source of obligation When the source of the obligation upon which
under Article 1157. the plaintiff’s cause of action depends is a
negligent act or omission, the burden of proof
rests upon the plaintiff to prove the negligence—
Art. 2177. Responsibility for fault or negligence
if he does not his action fails. But when the facts
under the preceding article is entirely separate averred show a contractual undertaking by
and distinct from the civil liability arising from defendant for the benefit of the plaintiff, and it is
negligence under the Penal Code. But the alleged that the plaintiff has failed or refused to
plaintiff cannot recover damages twice for the perform the contract, it is not necessary for the
same act or omission of the defendant. plaintiff to specify in his pleadings whether the
breach of the contract is due to willful fault or to
negligence on the part of the defendant, or of his
RPC, Art. 100. Every person criminally liable servants or agents. Proof of the contract and of
for a felony is also civilly liable. its nonperformance is sufficient prima facie to
warrant a recovery. [Cangco v. Manila Railroad,
A quasi-delict or culpa aquiliana is a separate supra]
legal institution under the Civil Code, with a
substantivity all its own, and individuality that is D.3. AS TO APPLICABILITY OF THE DOCTRINE
OF PROXIMATE CAUSE
entirely apart and independent from a delict or
crime. However, the same negligent act causing The doctrine of proximate cause [to establish the
damage may produce civil liability arising from a fault or negligence of the defendant] is
applicable only in actions for quasi-delict, not in
crime under Article 100 of the Revised Penal
actions involving breach of contract [Calalas v.
Code, or create an action for quasi-delict CA, G.R. No. 122039 (2000)].
[Barredo v Garcia, G.R. No. 48006 (1942)]
D.4. AS TO THE DEFENSE OF AN EMPLOYER
An act or omission causing damage to another FOR THE NEGLIGENCE OF AN EMPLOYEE
may give rise to two separate civil liabilities on As it is not necessary for the plaintiff in an action
the part of the offender—for civil liability ex for breach of contract to show that the breach
delicto, and independent civil liabilities. The was due to the negligent conduct of the
choice is with the plaintiff who makes known his defendant or his servants, proof on the part of
cause of action in his initiatory pleading or the defendant that the negligence or omission of
complaint [LG Foods v Philadelfa, G.R. No. his servants or agents caused the breach of
158995 (2006)] contract would not constitute a defense to the
action [Cangco v. Manila Railroad, supra].
D. CULPA AQUILIANA DISTINGUISHED
FROM CULPA CONTRACTUAL; PRESENCE Presence of Contactual Relations
OF CONTRACTUAL RELATIONS The Supreme Court held there may instances
where there can be a quasi-delict even when
D.1. AS TO SOURCE there is a contract between the parties. The test
In culpa aquiliana or non-contractual obligation, (whether a quasi-delict can be deemed to
it is the wrongful or negligent act or omission underlie the breach of a contract) can be stated
itself which creates the vinculum juris, whereas thusly: Where, without a pre-existing contract
in contractual relations, the vinculum exists between two parties, an act or omission can
independently of the breach of voluntary duty nonetheless amount to an actionable tort by
assumed by the parties when entering into the
itself, the fact that the parties are contractually
contractual relation [Cangco v. Manila Railroad,
supra]. bound is no bar to the application of quasi-delict
provisions to the case [Far East v. CA, G.R. No.
D.2. AS TO BURDEN OF PROOF 108164 (1995)].

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II. Quasi-Delict By jumping into the sea, the employee failed to


exercise even slight care and diligence and
Elements: [PNR v. Brunty, G.R. No. 169891
displayed a reckless disregard of the safety of his
(2006)]
person. His death was caused by his notorious
(a) Damage to the plaintiff
negligence. Notorious negligence has been held
(b) Negligence by act/omission of the
to be tantamount to gross negligence which is
defendant
want of even slight care and diligence [Ameda v
(c) Connection of the cause and effect between
Rio, G.R. No. L-6870 (1954)].
the fault/negligence of the defendant and
the damage incurred by the plaintiff. A.1. DEFAULT STANDARD OF CARE: GOOD
FATHER OF A FAMILY
A. NEGLIGENCE
Art. 1173. The fault or negligence of the obligor Test: Did the defendant in doing the alleged
consists in the omission of that diligence which negligent act use that reasonable care and
is required by the nature of the obligation and caution which an ordinarily prudent man would
corresponds with the circumstances of the have used in the same situation? If not, then he
persons, of the time and of the place. When is negligent. Negligence in a given case is not
negligence shows bad faith, the provisions of determined by reference to the personal
Articles 1171 and 2201, paragraph 2, shall apply. judgment of the actor in the situation before him,
but is determined in the light of human
If the law or contract does not state the diligence experience and the facts involved in the
which is to be observed in the performance, that particular case. Conduct is said to be negligent
which is expected of a good father of a family when a prudent man in the position of the
shall be required. tortfeasor would have foreseen that an effect
harmful to another was sufficiently probable to
Negligence is the omission to do something warrant his foregoing the conduct or guarding
which a reasonable man, guided by those against its consequences [Picart v Smith, G.R.
considerations which ordinarily regulate the No. L-12219 (1918)].
conduct of human affairs, would do, or the doing
of something which a prudent and reasonable
man would not do [Layugan v. IAC, G.R. No. A.2. STANDARD OF CARE NEEDED IN
73998 (1988)]. SPECIFIC CIRCUMSTANCES
(1) Operators of Motor Vehicles
The diligence with which the law requires the Because of inherent differences between
individual to at all times govern his conduct motorists and cyclists, the former being
varies with the nature of the situation in which capable of greater speed and destruction,
he is placed and the importance of the act which operators of motor vehicles have a higher
he is to perform [Jorge v Sicam, G.R. No. 159617 standard in his duty of care [Anonuevo v CA,
G.R. No. 130003 (2004)].
(2007)].
To determine whether there has been (2) Banks
negligence by the defendant, this 2-step The law imposes on banks high standards in
analysis may be used: 1) determine the diligence view of the fiduciary nature of banking.
required of the actor under the circumstances, Section 2 of Republic Act No. 8791 (RA 8791),
and 2) determine whether the actor has which took effect on 13 June 2000, declares
performed the diligence required. Failing the that the State recognizes the ‘fiduciary
second step would lead to the conclusion that nature of banking that requires high
the defendant has been negligent. standards of integrity and performance.’
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This fiduciary relationship means that the The profession of pharmacy, it has been said
bank’s obligation to observe high standards again and again, is one demanding care and
of integrity and performance is deemed skill. Even under the first conservative
written into every deposit agreement expression, "ordinary care" with reference to
between a bank and its depositor. The the business of a druggist…must be held to
fiduciary nature of banking requires banks to signify "the highest practicable degree of
assume a degree of diligence higher than prudence, thoughtfulness, and vigilance,
that of a good father of a family and most exact and reliable safeguards
[Consolidated Bank v CA, G.R. No. 138569 consistent with the reasonable conduct of
(2003)]. the business in order that human life may
not constantly be exposed to the danger
(3) Experts (In General) flowing from the substitution of deadly
Those who undertake any work calling for poisons for harmless medicine. [US v Pineda,
special skills are required not only to G.R. No. L-12858 (1918)]”
exercise reasonable care in what they do but
also possess a standard minimum of special Mistake is negligence and care is no defense
knowledge and ability. In all employments [Mercury Drug v De Leon, G.R. No. 165622
where peculiar skill is requisite, one who (2008)].
offers his services is understood as holding
himself out to the public as possessing the (6) Possessor of Extremely Dangerous
degree of skill commonly possessed by
Instrumentalities
others in the same employment [Far Eastern
Shipping, G.R. No. 130068 (1998)]. [A] higher degree of care is required of
someone who has in his possession or under
When a person holds himself out as being his control an instrumentality extremely
competent to do things requiring dangerous in character, such as dangerous
professional skill, he will be held liable for weapons or substances. Such person in
negligence if he fails to exhibit the care and possession or control of dangerous
skill of one ordinarily skilled in the particular instrumentalities has the duty to take
work which he attempts to do [Culion v exceptional precautions to prevent any injury
Philippine Motors, G.R. No 32611 (1930)]. being done thereby. Unlike the ordinary
affairs of life or business which involve little
(4) Doctors or no risk, a business dealing with
dangerous weapons requires the exercise of
Whether or not a physician has committed a higher degree of care [Pacis v Morales, G.R.
an ‘inexcusable lack of precaution’ in the No. 169467 (2010)].
treatment of his patient is to be determined
according to the standard of care observed (7) Children
by other members of the profession in good The conduct of an infant of tender years is
standing under similar circumstances not to be judged by the same rule, which
bearing in mind the advanced state of the governs that of an adult. …The care and
caution required of a child is according to his
profession at the time of treatment of
maturity and capacity only, and this is to be
present state of medical science. It is in this determined in each case by the
aspect of medical malpractice that expert circumstances of the case [Taylor v Manila
testimony is essential to establish not only Railroad, G.R. No. 4977 (1910)].
the standard of care of the profession but
also that the physician’s conduct in the No contributory negligence can be imputed
treatment and care falls below such to children below 9 years old [Jarco
Marketing v CA, G.R. No. 129792 (1999)].
standard [Cruz v CA, GR. No. 122445 (1997)]
The degree of care required to be exercised
(5) Pharmacists must vary with the capacity of the person
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endangered to care for himself. …The in causing damage, the law presumes the
standard of conduct to which a child must vehicle owner equally negligent and imposes
conform for his own protection is that degree upon the latter the burden of proving proper
of care ordinarily exercised by children of the selection and supervision of employee as a
same age, capacity, discretion, knowledge defense.
and experience under the same or similar
circumstances [Ylarde v Aquino, G.R. No. L- As held in Vargas v. Langcay [G.R. No. 17459
33722 (1988)]. (1962)], “the registered owner/operator of a
passenger vehicle is jointly and severally liable
A.3. PRESUMPTIONS OF NEGLIGENCE with the driver for damages incurred by
passengers or third persons as a consequence of
i. IN MOTOR VEHICLE MISHAPS
injuries or death sustained in the operation of
(1) Liability of the owner said vehicles. Regardless of who the actual
owner of a vehicle is, the operator of record
Art. 2184. In motor vehicle mishaps, the owner is continues to be the operator of the vehicle as
solidarily liable with his driver, if the former, who regards the public and third persons and as such
was in the vehicle, could have, by the use of the is directly and primarily responsible for the
due diligence, prevented the misfortune. xxx consequences incident to its operation, so that
If the owner was not in the motor vehicle, the in contemplation of law, such owner/operator of
provisions of article 2180 are applicable. record is the employer of the driver, the actual
operator and employer being considered merely
as his agent.”
Art. 2186. Every owner of a motor vehicle
shall file with the proper government office a The registered owner of a motor vehicle is
bond executed by a government-controlled primarily liable for the damage or injury caused
corporation or office, to answer for damages to another, but he has a right to be indemnified
to third persons. The amount of the bond and by the real owner of the amount he was required
other terms shall be fixed by the competent to pay. This rule applies both to private and to
common carriers with respect to their
public official. passengers [Tamayo v Aquino, G.R. No. L-12634
(1959)].
“Owner” shall mean the actual legal owner of
the motor vehicle, in whose name such vehicle is The law does not require that a person must
duly registered with the LTO. Registration of possess a certain measure of skill or proficiency
motor vehicles is required not because it is the either in the mechanics of driving or in the
operative act which transfers ownership in observance of traffic rules before he may own a
vehicles, but because it is the means by which motor vehicle. The test of his negligence, within
the owner can be identified so that if any the meaning of Article 2184, is his omission to do
accident occurs, or damage or injury is caused in that which the evidence of his own senses tells
the operation of the vehicle, responsibility can him he should do in order to avoid the accident.
be fixed. And as far as perception is concerned, absent a
minimum level imposed by law, a maneuver that
The owner is solidarily liable with the driver for appears to be fraught with danger to one
motor vehicle mishaps when: passenger may appear to be entirely safe and
(a) The owner was IN the vehicle at the time, commonplace to another. Were the law to
AND require a uniform standard of perceptiveness,
(b) The owner could have, by the use of due employment of professional drivers by car
diligence, prevented the misfortune. owners who, by their very inadequacies, have
real need of drivers' services, would be
Note: If the owner was NOT inside the vehicle,
effectively proscribed [Caedo v Yu Khe Tai, G.R.
Art. 2180 applies. No. L-20392 (1968)].

The presumption is against the owner of the The owner of the motor vehicle is not liable for
motor vehicle. He has the burden of proving due the misfortune unless the negligent acts of the
diligence. Thus, once a driver is proven negligent
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driver are continued for such a length of time as possession of dangerous weapons or
to give the owner a reasonable opportunity to substances, such as firearms and poison, except
observe them and to direct his driver to desist when the use or possession thereof is
therefrom. The act complained of must be indispensable in his occupation or business.
continued in the presence of the owner for such
a length of time that the owner, by his iii. COMMON CARRIERS
acquiescence, makes his driver’s act his own
[Chapman v Underwood, G.R. No. L-9010 (1914)]. Art. 1735. In all cases other than those
mentioned in Nos. 1, 2, 3, 4, and 5 of the
(2) Liability of the driver preceding article (calamity, act of public enemy
in war, act of owner of the goods, character of
Art. 2184. xxx It is disputably presumed that a the goods, order of competent public authority),
driver was negligent, if he had been found guilty if the goods are lost destroyed or deteriorated,
of reckless driving or violating traffic regulations
common carriers are presumed to have been at
at least twice within the next preceding two
months. fault or to have acted negligently, unless they
prove that they observed extraordinary diligence
Art. 2185. Unless there is proof to the as required under Art. 1733.
contrary, it is presumed that a person driving
a motor vehicle has been negligent if at the Art. 1752. Even when there is an agreement
time of the mishap, he was violating any limiting the liability of the common carrier in
traffic regulation. the vigilance over the goods, the common
carrier is disputably presumed to have been
Article 2184 establishes a presumption of negligent in case of their loss, destruction or
negligence on the part of the driver based on deterioration.
previous violations of traffic regulations. Article
2185 establishes a presumption of negligence on iv. RES IPSA LOQUITUR
the basis of simultaneous violations.
The doctrine of res ipsa loquitur (“the thing or
Despite the presumption of negligence arising the transaction speaks for itself”) is a rule of
from the traffic regulation violation, the claimant evidence (not of substantive law) peculiar to the
must still prove that such negligence was the law of negligence. The doctrine treats the injury
proximate cause in order to successfully claim itself as proof of negligence.
for damages [Sanitary Steam v CA, G.R. No.
Elements: [Ramos v. CA, G.R. No. 124354 (1999)]
119092 (1998)]. (a) The accident is of a kind which ordinarily
does not occur in the absence of someone’s
Article 2185 was not formulated to compel or negligence;
ensure obeisance by all to traffic rules and (b) It is caused by an instrumentality within the
regulations. It does not apply to non-motorized exclusive control of the defendant or
vehicles, in recognition of the unequal footing of defendants; and
standards applicable to motor vehicles as (c) The possibility of contributing conduct,
opposed to other types of vehicles [Añonuevo v. which would make the plaintiff responsible,
CA, supra]. is eliminated.

ii. POSSESSION OF DANGEROUS WEAPONS Basis


OR SUBSTANCES The res ipsa loquitur doctrine is based in part
upon the theory that the defendant in charge of
Art. 2188. There is prima facie presumption of the instrumentality which causes the injury
negligence if the death or injury results from his either knows the cause of the accident or has the
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best opportunity of ascertaining it and that the


plaintiff has no such knowledge, and therefore is The responsibility treated of in this article
compelled to allege negligence in general terms shall cease when the persons herein
and to rely upon the proof of the happening of mentioned prove that they observed all the
the accident in order to establish negligence diligence of a good father of a family to
[DM Consunji v. CA, G.R. No. 137873 (2001)]. prevent the damage.

Effect Also referred to as the “doctrine of imputed


The fact of the occurrence of an injury, taken negligence”. The rationale is to extend liability
with the surrounding circumstances, raise a by legal fiction to those in a position to exercise
presumption of negligence, or make out a absolute or limited control over the direct
plaintiff’s prima facie case, and present a tortfeasor. The doctrine does not apply where
question of fact for defendant to meet with an moral culpability can be imputed directly, as
explanation [Ramos v CA, supra]. when there is actual intent to cause harm to
others.
In medical malpractice cases, when the doctrine
of res ipsa loquitur is availed by the plaintiff, the The liability of the vicarious obligor is primary
need for expert medical testimony is dispensed and direct (solidarily liable with the tortfesor),
with because the injury itself provides the proof not subsidiary. His responsibility is not
of negligence. The reason is that the general conditioned upon the insolvency of or prior
rule on the necessity of expert testimony applies recourse against the negligent tortfeasor.
only to such matters clearly within the domain of
medical science, and not to matters that are
within the common knowledge of mankind
which may be testified to by anyone familiar with
the facts.
Under Article 2180
Note: For the res ipsa loquitur doctrine to apply, Persons Vicariously Actor
it must appear that the injured party had no Liable
knowledge as to the cause of the accident, or
that the party to be charged with negligence has Father and, in case Minor children who live in
superior knowledge or opportunity for of his death or their company
explanation of the accident. incapacity, the
mother
A.4. PERSONS LIABLE Guardians Minors or incapacitated
persons who are under their
(1) The direct tortfeasor
authority and live in their
Art. 2176. Whoever by act or omission causes company
damage to another, there being fault or
negligence, is obliged to pay for the damage Owners and Employees in the service of
done. xxx managers of an the branches in which the
establishment or latter are employed or on
The tortfeasor may be a natural or juridical enterprise the occasion of their
functions
person. For natural persons, apply requisites of
Art. 2176 and for juridical persons, apply Employers Employees and household
vicarious liability provisions. helpers acting within the
scope of their assigned
tasks, even though the
(2) Persons vicariously liable former are not engaged in
Art. 2180. The obligation imposed by Article any business or industry
2176 is demandable not only for one’s own
State Special agent
acts or omissions, but also for those of
persons for whom one is responsible. Teachers or heads Pupils and students or
of establishments apprentices, so long as they
xxx of arts and trades remain in their custody
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(3) Substitute Parental Authorities


(a) Persons exercising parental authority (a) Grandparents
Art. 2180 (2). The father and, in case of his death (b) Oldest qualified sibling over 21 years old
or incapacity, the mother, are responsible for the (c) Child’s actual custodian, provided he is
damages caused by the minor children who live
in their company. qualified and over 21 years old.
(4) Special Parental Authorities
FC, Art. 221. Parents and other persons (a) School
exercising parental authority shall be civilly (b) Administrators
liable for the injuries and damages caused by (c) Teachers
the acts or omissions of their unemancipated (d) Individual, entity, or institution engaged
children living in their company and under in child care
their parental authority subject to the
appropriate defenses provided by law.
Illegitimate children
Responsibility is with the mother whom the law
FC, Art. 216. In default of parents or a vests with parental authority.
judicially appointed guardian, the following
person shall exercise substitute parental Basis of liability of parents and adopters
authority over the child in the order Parental liability is anchored upon parental
indicated: authority coupled with presumed parental
(1) The surviving grandparent, as provided in dereliction in the discharge of the duties
Art. 214; accompanying such authority. The parental
(2) The oldest brother or sister, over twenty- dereliction is, of course, only presumed and the
one years of age, unless unfit or presumption can be overturned under Article
disqualified; and 2180 of the Civil Code by proof that the parents
(3) The child's actual custodian, over twenty- had exercised all the diligence of a good father
of a family to prevent the damage [Tamargo v.
one years of age, unless unfit or
CA, G.R. No. 85044 (1992)].
disqualified.
Meaning of “Minority”
Whenever the appointment or a judicial Par. 2 and 3 of Art. 2180 speak of minors. Minors
guardian over the property of the child here refer to those who are below 21 years of age,
becomes necessary, the same order of not below 18 years. The law reducing the majority
preference shall be observed. age from 21 to 18 years old did not amend these
paragraphs. Basis is FC, Art. 236 (3), as
FC, Art. 217. In case of foundlings, abandoned amended by RA 6809, provides, “Nothing in this
neglected or abused children and other Code shall be construed to derogate from the
children similarly situated, parental authority duty or responsibility of parents and guardians
shall be entrusted in summary judicial for children and wards below 21 years of age
proceedings to heads of children's homes, mentioned in the second and third paragraphs
orphanages and similar institutions duly of 2180 of the Civil Code.”
accredited by the proper government agency.
Art. 2180 (3). Guardians are liable for damages
Art 2180, par 2 of the Civil Code which holds the caused by the minors or incapacitated persons
father liable for damages has been modified by who are under their authority and live in their
the Family Code and PD 603. Art. 211 of the FC company.
declares joint parental authority of the mother
and father over common children. The parent(s) The liability of guardians with respect to their
exercising parental authority are liable for the wards is governed by the same rule as in the
torts of their children. liability of parents with respect to their children
below 21 years and who live with them
Who are liable for minors?
(1) Parents/Adoptive parents “Incompetent” includes (Rule 92, ROC):
(2) Court-appointed guardians
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(1) Those suffering the penalty of civil preceding articles shall be governed by the
interdiction, provisions of the Civil Code on quasi-delicts.
(2) Prodigals,
(3) Deaf and dumb who are unable to read and Under Article 2180, the teacher is liable for the
acts or omissions of the pupils and students, and
write
so is the head of establishment of arts and
(4) Unsound mind, even though they have lucid trades for the apprentices, so long as they
intervals remain in custody, regardless of age. Under the
(5) Being of sound mind, but by reason of age, Family Code, liability attaches to the school, its
disease, weak mind, and other similar administrators and teachers, or the individual or
causes, cannot take care of themselves or entity engaged in child care, so long as the child
manage their property is under their supervision, instruction, or custody,
and the child is below 18 years old.
Liability of minor or insane tortfeasor without a Basis of liability of teachers and heads of
parent or guardian establishments of arts and trades
He shall be answerable with his own property in They stand, to a certain extent, in loco parentis
an action against him where a guardian ad litem and are called upon to exercise reasonable
shall be appointed. [Art. 2182] supervision over the conduct of the child.
(b) Teachers and schools
“Custody” means the protective and supervisory
Art. 2180 (7). Lastly, teachers or heads of
establishments of arts and trades shall be liable custody that the school, its head and teachers
for damages caused by their pupils and students exercise over the pupils, for as long as they are in
or apprentices, so long as they remain in their attendance in school, which includes recess time
custody. [Palisoc v. Brillantes, G.R. No. L-29025 (1971)].

FC, Art. 218. The school, its administrators As long as it is shown that the student is in the
and teachers, or the individual, entity or school premises pursuant to a legitimate
institution engaged in child are shall have
student objective, in the exercise of a legitimate
special parental authority and responsibility
over the minor child while under their right, or the enjoyment of a legitimate student
supervision, instruction or custody. privilege, the responsibility of the school
authorities over the student continues [Amadora
Authority and responsibility shall apply to all v CA, G.R. No. L-47745 (1988)].
authorized activities whether inside or
outside the premises of the school, entity or (c) Owners/managers of
institution. establishments/employers
Art. 2180 (4). The owners and managers of an
FC, Art. 219. Those given the authority and establishment or enterprise are likewise
responsibility under the preceding Article responsible for damages caused by their
shall be principally and solidarily liable for employees in the service of the branches in
damages caused by the acts or omissions of which the latter are employed or on the occasion
the unemancipated minor. The parents, of their functions.
judicial guardians or the persons exercising
substitute parental authority over said minor Art. 2180 (5). Employers shall be liable for the
shall be subsidiarily liable. damages caused by their employees and
household helpers acting within the scope of
The respective liabilities of those referred to their assigned tasks, even though the former
in the preceding paragraph shall not apply if are not engaged in any business or industry.
it is proved that they exercised the proper
diligence required under the particular “Owners and managers of an establishment or
circumstances. enterprise” does not include a manager of a
corporation. (Spanish term “directores” connotes
All other cases not covered by this and the
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“employer.” But manager of a corporation is not DISTINCTION BETWEEN THE 4TH AND 5TH PARAGRAPHS
an employer, but rather merely an employee of OF ART. 2180
the owner.) [Philippine Rabbit v. Philam A distinction must be made between the two
Forwarders, G.R. No. L-25142 (1975)].
provisions to determine what is applicable. Both
The liability imposed upon employers with provisions apply to employers: the fourth
respect to damages occasioned by the paragraph, to owners and managers of an
negligence of their employees to whom they are establishment or enterprise; and the fifth
not bound by contract is based on the paragraph, to employers in general, whether or
employer’s own negligence, such as when he not engaged in any business or industry. The
places a powerful automobile in the hands of a fourth paragraph covers negligent acts of
servant whom he knows to be ignorant of the
employees committed either in the service of the
method of managing such vehicle [Cangco v.
Manila Railroad, supra]. branches or on the occasion of their functions,
while the fifth paragraph encompasses
This Court still employs the "control test" to negligent acts of employees acting within the
determine the existence of an employer- scope of their assigned task. The latter is an
employee relationship between hospital and expansion of the former in both employer
doctor. Under the "control test", an employment coverage and acts included. Negligent acts of
relationship exists between a physician and a
hospital if the hospital controls both the means employees, whether or not the employer is
and the details of the process by which the engaged in a business or industry, are covered
physician is to accomplish his task. The Court so long as they were acting within the scope of
earlier ruled that there was employer-employee their assigned task, even though committed
relationship between the doctor and employee neither in the service of the branches nor on the
but reversed itself upon motion for occasion of their functions. For, admittedly,
reconsideration. They still held the hospital
employees oftentimes wear different hats. They
liable on the basis of agency and corporate
responsibility [Professional Services v. CA and perform functions which are beyond their office,
Agana, G.R. No. 126297 (2010)]. title or designation but which, nevertheless, are
still within the call of duty [Castilex Industrial
“Within the scope of their assigned task” in Art. Corp. v. Vasquez, G.R. No. (1999)].
2180 includes any act done by an employee in
furtherance of the interests, or for the account of DEFENSE OF DILIGENCE IN SELECTION AND
the employer at the time of the infliction of the SUPERVISION
injury or damage [Filamer v CA, G.R. No. 75112 Due diligence in the supervision of employees
(1990)]. includes the formulation of suitable rules and
regulations for the guidance of employees and
Basis of liability the issuance of proper instructions intended for
Employer’s negligence in the protection of the public and persons with
(1) The selection of their employees (culpa in whom the employer has relations through his or
eligiendo) her employees and the imposition of necessary
(2) The supervision over their employees (culpa disciplinary measures upon employees in case of
in vigilando) breach or as may be warranted to ensure
performance of acts as indispensable to the
Presumption of Negligence
The presentation of proof of the negligence of its business of and beneficial to their employee
employee gives rise to the presumption that the [Metro Manila Transit v. CA, G.R. No. 104408
defendant employer did not exercise the (1993)].
diligence of a good father of a family in the
selection and supervision of its employees Due diligence in the selection of employees
[Lampesa v. De Vera, G.R. No. 155111 (2008)]. require that the employer carefully examined the

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applicant for employment as to his qualifications, (1) Art. 2180 (6) is an example of an express
his experience and record of service. legislative consent. Here, the State assumes
a limited liability for the acts of its special
agents.
Criminal Negligence (2) Art. 2189 provides for state liability for
The vicarious liability of the employer for damages caused by defective condition of
criminal negligence of his employee is governed public works.
by RPC 103. Conviction of the employee (3) Local Government Code provides for the
conclusively binds the employer. Defense of due liability of local government units for
diligence in the selection and supervision of the wrongful exercise of its proprietary (as
employee is not available. The employer cannot opposed to its governmental) functions. The
appeal the conviction [Fernando v. Franco latter is the same as that of a private
(1971)]. corporation or individual. [Mendoza v. De
Leon (1916)]
Note: The liability of the employer under Art. 103
RPC is subsidiary. A special agent is one who receives a definite
and fixed order or commission, foreign to the
Registered Owner Rule exercise of the duties of his office if he is a
The registered owner of the vehicle is primarily special official. This concept does not apply to
responsible to the public for whatever damage any executive agent who is an employee of the
or injury the vehicle may have caused, even if he active administration and who on his own
had already sold the same to someone else. The responsibility performs the functions which are
policy is the easy identification of the owner who inherent in and naturally pertain to his office
can be held responsible so as not to [Merritt v. Government of the Philippine Islands,
inconvenience or prejudice the third party G.R. No. 11154 (1960)].
injured [Cadiente v. Macas (2008)]. The
registered owner, however, has the right to be A corporate body performing non-governmental
indemnified by the real or actual owner of the functions becomes liable for the damage caused
by the accident resulting from the tortious act of
amount that he may be required to pay as
its driver-employee. Such corporate body
damages for the injury caused to the plaintiff assumes the responsibility of an ordinary
[Orix Metro Leasing v. Mangalinan (2012)]. This employer and as such, becomes answerable for
rule applies even if the vehicle is leased to third damages [Fontanilla v. Maliaman, G.R. No.
persons. The liability of the registered owner is 55963 (1991)].
subject to his right of recourse against the
transferee or buyer. (2) Joint tortfeasors
Art. 2194. The responsibility of two or more
(d) The State persons who are liable for quasi-delict is
1987 Constitution, Art. XVI, Sec. 3. The State solidary.
may not be sued without its consent.
Definition of “Joint Tortfeasors”
Art. 2180 (3). The State is responsible in like They are all persons who command, instigate,
manner when it acts through a special agent; promote, encourage, advise, countenance,
but not when the damage has been caused cooperate in, aid or abet in the commission of a
by the official to whom the task done tort, or who approve of it after it is done, if done
properly pertains, in which case what is for their benefit [Filipinas Broadcasting Network v.
provided in Article 2176 shall be applicable. AMEC-BCCM, G.R. No. 141994 (2005)].

Instances where the State gives its consent to be Applicability of the provision
sued The provision applies when there are 2 or more
persons who have participated in the
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commission of a single quasi-delict. The injury injury to some person might probably result
must be indivisible. therefrom [Bataclan v. Medina, supra].

Respondent was mistakenly given Dormicum, a


B. CAUSE potent sleeping tablet, instead of medication for
Concept of Proximate Cause his blood sugar. He took a pill for 3 consecutive
In order that civil liability for negligence may days and on the third day, he fell asleep on the
arise, there must be a direct causal connection wheel and figured in a vehicular accident. The
between the damage suffered by the plaintiff Court found that the proximate cause of the
and the act or omission of the defendant. accident was the Mercury Drug employee’s
mistake in reading the prescription [Mercury
Where the particular harm sustained was Drug v. Baking, G.R. No. 156037 (2007)].
reasonably foreseeable at the time of the
defendant’s misconduct, his act or omission is Note: Here, 3 days have elapsed from the time of
the legal cause thereof. Foreseeability is the
the negligent act determined by the Court as the
fundamental basis of the law of negligence. To
be negligent, the defendant must have acted or proximate cause; thus, the Court did not
failed to act in such a way that an ordinary consider the time element in determining
reasonable man would have realized that proximate cause but the nature and gravity of
certain interests of certain persons were the injury.
reasonably subjected to a general but definite
class of risks. [JARENCIO] Differentiated from:
(1) Concurrent Cause – Several causes
producing the injury, and each is an efficient
Two definitions of proximate cause:
cause without which the injury would not
(1) Proximate cause immediately resulting in
have happened. The injury is attributed to
injury: defined as “that cause, which, in
any or all the causes, and recovery may be
natural and continuous sequence, unbroken
had against any or all of those responsible.
by any efficient intervening cause, produces
the injury, and without which the result
As a general rule, that negligence in order to
would not have occurred” [Bataclan v.
render a person liable need not be the sole
Medina, G.R. No. 10126 (1957)].
cause of an injury. It is sufficient that his
(2) Proximate cause not immediately resulting in
negligence, concurring with one or more
injury but sets in motion a chain of events,
efficient causes other than the plaintiff’s, is
also known as Proximate Legal Cause: that
the proximate cause of the injury. Where the
acting first and producing the injury, either
concurrent or successive negligent acts or
immediately or by setting other events in
omissions of two or more persons, although
motion, all constituting a natural and
acting independently, are in combination the
continuous chain of events, each having a
direct and proximate cause of a single injury
close causal connection with its immediate
to a third person, it is impossible to
predecessor, the final event in the chain
determine in what proportion each
immediately effecting the injury as a natural
contributed to the injury and either of them
and probable result of the cause which first
is responsible for the whole injury. Where
acted, under such circumstances that the
their concurring negligence resulted in injury
person responsible for the first event should,
or damage to a third party, they become
as an ordinary prudent and intelligent
joint tortfeasors and are solidarily liable for
person, have reasonable ground to expect at
the resulting damage [Far Eastern Shipping
the moment of his act or default that an
v. CA, G.R. No. 130068 (1998)].

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(2) Remote Cause – a cause which would have motion the chain of circumstances leading
been a proximate cause, had there been no to the injury. [Bataclan v. Medina, supra]
efficient intervening cause after it and prior
to the injury. (2) Sufficient link
The Supreme Court has adopted a relaxation
A prior and remote cause cannot be made of the “but for” test in Dy Teban v. Jose Ching
the basis of an action if such remote cause [G.R. No. 161803 (2008)]. Plaintiff, however,
did nothing more than furnish the condition must establish a sufficient link between the
or give rise to the occasion by which the act or omission and the damage or injury.
injury was made possible, if there intervened That link must not be remote or far-fetched;
between such prior or remote cause and the otherwise, no liability will attach. The
injury a distinct, successive, unrelated, and damage or injury must be a natural and
efficient cause of the injury, even though probable result of the act or omission.
such injury would not have happened but for
such condition or occasion [Manila Electric v. (3) Substantial factor
Remonquillo, G.R. No. L-8328 (1956)]. If the actor’s conduct is a substantial factor
in bringing about harm to another, the fact
(3) Intervening Cause that the actor neither foresees nor should
The test of determining whether or not the have foreseen the harm or the manner in
intervening cause is sufficient to absolve a which it occurred, does not prevent him from
prior cause of the injury is as follows: being liable. [Philippine Rabbit v. IAC, G.R.
whether the intervention of a later cause is a
No. L-66102-04 (1990)]
significant part of the risk involved in the
defendant’s conduct, or is so reasonable
connected with it that the responsibility (4) Mixed considerations
should not be terminated. In the affirmative, There is no exact formula to determine
such foreseeable intervening forces are probable cause. It is based upon mixed
within the scope of the original risk, and considerations of logic, common sense,
hence of the defendant’s negligence. In the policy and precedent [Dy Teban v. Jose Ching,
negative, there exists an efficient intervening
supra].
cause that relieves the defendant of liability.

If the intervening cause is one which in


(5) Cause v. condition
ordinary human experience is reasonably to
be anticipated, or one which the defendant The distinction between cause and condition
has reason to anticipate under the particular has already been almost entirely discredited.
circumstances, the defendant may be So far as it has any validity at all, it must
negligent, among other reasons, because of refer to the type of case where the forces set
failure to guard against it. There is an in operation by the defendant have come to
intervening cause combining with the rest in a position of apparent safety, and
defendant’s conduct to produce the result, some new force intervense. But even in such
and the defendant’s negligence consists in cases, it is not the distinction between
failure to protect the plaintiff against that “cause” and “condition” which is important,
very risk [Phoenix Construction v. IAC, G.R. but the nature of the risk and the character
No. L-65295 (1987)]. of the intervening cause [Phoenix
Construction v. IAC, supra].
Tests to Determine Proximate Cause
(1) But for / Sine qua non rule (6) Last clear chance
Whether such negligent conduct is a cause
The Doctrine of Last Clear Chance
without which the injury would not have
occurred or is the efficient cause which set in

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Also known as: "doctrine of discovered peril” The doctrine of last clear chance does not apply
or “doctrine of supervening negligence” or in a case of culpa contractual, where neither the
“humanitarian doctrine”. contributory negligence of the plaintiff nor his
The antecedent negligence of the plaintiff last clear chance to avoid the loss, would
does not preclude him from recovering exonerate the defendant from liability. Such
damages caused by the supervening contributory negligence or last clear chance by
negligence of the defendant, who had the the plaintiff merely serves to reduce the recovery
last fair chance to prevent the impending of damages by the plaintiff but does not
harm by the exercise of due diligence [PNR v. exculpate the defendant from his breach of
Brunty, supra]. contract [Consolidated Bank v. CA, G.R. No.
138569 (2003)].
If both parties are found to be negligent; but,
their negligence are not contemporaneous, Last clear chance applies only if the person who
the person who has the last fair chance to allegedly had the last opportunity to avert the
accident was aware of the existence of peril or
avoid the impending harm and fails to do so
should, with exercise of due care, have been
is chargeable with the consequences, aware of it. The doctrine can never apply where
without reference to the prior negligence of the party charged is required to act
the other party [Picart v Smith, supra]. instantaneously, and if the injury cannot be
avoided by application of all means at hand
Simply stated, it covers successive acts of after the peril is or should have been discovered
negligence: [Pantranco v. Baesa, G.R. No. 79051-51(1989)].

Primary negligence of the The doctrine of last clear chance, as enunciated


defendant in Anuran v. Buno, applies in a suit between the
owners and drivers of colliding vehicles. It does
not arise where a passenger demands
responsibility from the carrier to enforce its
Contributory negligence of the contractual obligations. It will be inequitable to
plaintiff exempt the negligent driver of the jeepney and
its owners on the ground that the other driver
was likewise guilty of negligence [Bustamante v.
CA, G.R. No. 89880 (1991)].
Subsequent negligence of the
defendant in failing to avoid the C. DEFENSES
injury to the plaintiff

C.1. DUE DILIGENCE TO PREVENT THE


Note:
DAMAGE UNDER ARTICLE 2180
• If plaintiff is the proximate cause: no recovery
can be made. Art. 2180. The obligation imposed by Article
• If plaintiff is not the proximate cause: Recovery 2176 is demandable not only for one’s own acts
can be made but such will be mitigated. or omissions, but also for those of persons for
• If negligence of parties is equal in degree, then whom one is responsible.
each bears his own loss.
xxx
The doctrine of last clear chance finds no
application in a case where the proximate cause (8) The responsibility treated of in this article
of the injury has been established [PNR v Brunty, shall cease when the persons herein mentioned
supra]. prove that they observed all the diligence of a
good father of a family to prevent damage.
The doctrine is not applicable in the following
cases:
The presumption of negligence on the part of
the master or employer, either in the selection of
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servant/employee or in the supervision, when an does not constitute a cause of action, since
injury is caused by the negligence of a damages are merely part of the remedy allowed
servant/employee may be rebutted if the for the injury caused by a breach or wrong
employer shows to the satisfaction of the court [Custodio v. CA, G.R. No. 116100 (1996)].
that in the selection and supervision, he has Injury Damage Damages
exercised the care and diligence of a good father
of a family [Ramos v. PEPSI, G.R. No. L-22533 Illegal invasion Loss, hurt, Recompense or
of a legal right harm resulting compensation
(1967)]. from the injury awarded

C.2. ACTS OF PUBLIC OFFICERS One who made use of his own legal right does
no injury, thus, whatever damages are caused to
When what is involved is a duty owing to the another should be borne solely by him under the
public in general, an individual cannot have a
principle of damnum absque injuria. This
cause of action the public officer although he principle, however, does not apply when there is
may have been injured by the action or inaction
an abuse in the exercise of a person’s right
of the officer, except when the individual suffers
[Amonoy v. Gutierrez, G.R. No. 140420 (2001)]”
a particular or special injury [Vinzons-Chato v
Fortun, G.R. No. 141309 (2008)]. C.5. PLAINTIFF’S NEGLIGENCE IS THE
PROXIMATE CAUSE
C.3. AUTHORITY OF LAW
Art. 2179. When the plaintiff’s own
Art. 5. Acts executed against the provisions negligence was the proximate cause of his
of mandatory or prohibitory laws shall be injury, he cannot recover damages. xxx
void, except when the law itself authorizes
their validity. This defense of plaintiff’s negligence as
proximate cause is absolute, for it bars recovery
RPC, Art. 11. The following do not incur any on the part of the plaintiff. In Manila Electric v.
criminal liability: Remoquillo, supra, the Court did not allow
(5) Any person who acts in the fulfillment of a recovery by Magno, ruling that his death was
duty or in the lawful exercise of a right or primarily caused by his own negligence and in
office some measure by the too close proximity of the
“media agua” to the electric wire.
(8) Any person who acts in obedience to an
order issued by a superior for some lawful If the plaintiff in a negligence action, by his own
purpose carelessness contributed to the principal
occurrence, that is, to the accident, as one of the
C.4. DAMNUM ABSQUE INJURIA determining causes thereof, he cannot recover
There can be damage without injury in those [Bernardo v. Legaspi, G.R. No. 9308 (1914)].
instances in which the loss or harm was not the
result of a violation of a legal duty. C.6. CONTRIBUTORY NEGLIGENCE OF THE
PLAINTIFF
Right to recover damages does not arise from Art. 2179. xxx But if his negligence was only
the mere fact that the plaintiff suffered losses. contributory, the immediate and proximate
To warrant the recovery of damages, there must cause of the injury being the defendant's lack
be both a right of action for a legal wrong of due care, the plaintiff may recover
inflicted by the defendant, and damage damages, but the courts shall mitigate the
resulting to the plaintiff therefrom. Wrong damages to be awarded.
without damage, or damage without wrong,

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Art. 2214. In quasi-delicts, the contributory avoid;


negligence of the plaintiff shall reduce the (c) The occurrence must be such as to render it
damages that he may recover. impossible for the debtor to fulfill his
obligation in a normal manner; and
Contributory negligence is defined as conduct on (d) The obligor must be free from any
the part of the injured party, which contributed participation in the aggravation of the injury
as a legal cause to the harm he has suffered, resulting to the creditor.
which falls below the standard to which he is
required to conform for his own protection C.8. PLAINTIFF’S ASSUMPTION OF RISK /
[Valenzuela v. CA, GR. No. 115024 (1996)]. VOLENTI NON FIT INJURIA
The doctrine of volenti non fit injuria (that to
Contributory negligence does not defeat an which a person assents is not presumed in law
action if it can be shown that the defendant as injury) refers to self-inflicted injury or to the
might, by the exercise of reasonable care and consent to injury which precludes the recovery of
prudence, have avoided the consequences of the damages by one who has knowingly and
injured party's negligence. Where the plaintiff voluntarily exposed himself to danger, even if he
contributes to the principal occurrence as one of is not negligent in doing so. This is so because,
its determining factors, he cannot recover. in theory, the plaintiff’s acceptance of the risk
Where, in conjunction with the occurrence, he has wiped out the defendant’s duty, and as to
contributes only to his own injury, he may the plaintiff the defendant’s negligence is not a
recover the amount that the defendant legal wrong.
responsible for the event should pay for such
injury, less a sum deemed a suitable equivalent Requisites:
for his own imprudence [MH Rakes v. Atlantic, (a) That the plaintiff had actual knowledge of
G.R. No. L-1719 (1907)]. the danger;
(b) That he understood and appreciated the risk
The defense of contributory negligence does not from the danger; and
apply in criminal cases committed through (c) That he voluntarily exposed himself to such
reckless imprudence, since one cannot allege risk
the negligence of another to evade the effects of
his own negligence [Genobiagon v. CA, G.R. No. The defense is not applicable in the following
40452 (1989)]. cases:
A person is excused from the force of the rule
C.7. FORTUITOUS EVENT (volenti non fit injuria), that when he voluntarily
Art. 1174. Except in cases expressly specified assents to a known danger he must abide by the
by the law, or when it is otherwise declared consequences, if an emergency is found to exist
by stipulation, or when the nature of the or if the life or property of another is in peril or
obligation requires the assumption of risk, no when he seeks to rescue his endangered
person shall be responsible for those events property [Ilocos Norte v. CA, G.R. No. 53401
which, could not be foreseen, or which, (1989)].
though foreseen, were inevitable.
The doctrine does not find application to the
Elements of caso fortuito [Juntilla v. Fontanar, case because even if respondent Reyes assumed
G.R. No. L-45637 (1985)]: the risk of being asked to leave the pary,
(a) The cause of the unforeseen and unexpected petitioners, under Articles 19 and 21 of the Civil
occurrence, or of the failure of the debtor to Code, were still under the obligation to treat him
comply with his obligation, must be fairly in order not to expose him to unnecessary
independent of the human will; ridicule and shame [Nikko Hotel v. Roberto Reyes,
(b) It must be impossible to foresee the event or G.R. No. 154259 (2005)].
if it can be foreseen, it must be impossible to
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C.9. PRESCRIPTION what subsequently and upon reflection may


Art. 1146. The following actions must be appear to be a better solution, unless the
instituted within four years: emergency was brought by his own negligence
(1) Upon an injury to the rights of the [Valenzuela v. CA, supra].
plaintiff;
(2) Upon a quasi-delict;

However, when the action arises from or out


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

Art. 1150. The time for prescription for all


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

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

It is clear that the prescriptive period must be


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

C.10. WAIVER
Art. 6. Rights may be waived, unless the waiver
is contrary to law, public order, public policy,
morals, or good customs or prejudicial to a third
person with a right recognized by law.

Art. 1171. Responsibility arising from fraud is


demandable in all obligations. Any waiver of
an action for future fraud is void.

C.11. EMERGENCY RULE OR SUDDEN PERIL


DOCTRINE
An individual, who suddenly finds himself in a
situation of danger and is required to act without
much time to consider the best means that may
be adopted to avoid the impending danger, is
not guilty of negligence if he fails to undertake
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III. Intentional Torts his rights and in the performance of his


duties, act with justice, give everyone his due,
and observe honesty and good faith.
Liability for personal acts or omission is founded
on that indisputable principle of justice Generally, the exercise of any right must be in
recognized by all legislators that when a person accordance with the purpose for which it was
by his act or omission causes damage or established. It must not be excessive or unduly
prejudice to another, a juridical relation is harsh; there must be no intention to injure
created by virtue of which the injured person another.
acquires a right to be indemnified and the
person causing the damage is charged with the There is abuse of right when:
corresponding duty of repairing the damage. (1) The right is exercised for the only purpose of
The reason for this is found in the obvious truth prejudicing or injuring another
that man should subordinate his acts to the
precepts of prudence and if he fails to observe (2) The objective of the act is illegitimate
them and cause damage to another, he must (3) There is an absence of good faith
repair the damage [MANRESA].
Elements [Albenson v. CA, G.R. No. 88694
A. HUMAN RELATIONS TORTS (1993)]:
(a) There is a legal right or duty;
(b) Which is exercised in bad faith;
A.1. ABUSE OF RIGHT (c) For the sole intent of prejudicing or injuring
another.

Art. 19. Every person must, in the exercise of


Case Legal Right and Injury Doctrine
Velayo v. Shell (1959) Right to transfer credit. The standards in NCC 19 are
The transfer of credit from Shell Philippines implemented by NCC 21.
to Shell USA was deemed a violation of NCC
21 as it allowed Shell to attach properties of
their creditor CALI to the prejudice of its
other creditors.
Globe v. CA (1989) Right to dismiss an employee. When a right is exercised in a
The dismissal itself was not illegal but it was manner which does not conform
the manner of dismissal which was deemed with the norms in NCC 19, and
in violation of Article 19, as such was based results in damage to another, a legal
on unfounded accusations of dishonesty. wrong is thereby committed. The
law, therefore, recognizes a
primordial limitation on all rights.
University of the East Academic freedom. The conscious indifference of a
v. Jader (2000) The conscious indifference of the school in person to the rights or welfare of the
not informing its student that he could not others who may be affected by his
graduate formed the basis for the award of act or omission can support a claim
damages. for damages.
Amonoy v. Gutierrez Right to demolish another’s house on his The principle of damnum absque
(2001) own property. injuria does not apply when the
Amonoy obtained a judgment in his favor for exercise of the legal right is
Gutierrez to vacate. A demolition order was suspended or extinguished pursuant
issued but the court suspended it with a to a court order. The exercise of a
TRO. Amonoy proceeded with the right ends when the right
demolition. In a complaint for damages, he disappears, and it disappears when
it is abused, especially to the
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claims the principle of damnum absque prejudice of others.


injuria.
Nikko Hotel Manila Right to forbid uninvited guests from Article 19, known to contain what is
Garden v. Reyes entering the party. commonly referred to as the
(2005) Ruby Lim’s throwing out of complainant principle of abuse of rights, is not a
Reyes, as a gatecrasher in a private party, panacea for all human hurts and
was merely in exercise of her duties as social grievances. The object of this
Executive Secretary of the hotel where the article is to set certain standards
party was held, and did not constitute a which must be observed not only in
violation of Article 19. the exercise of one’s rights but also
in the performance of one’s duties.
damage.
A.2. ACTS CONTRARY TO LAW
Art. 20. Every person who, contrary to law, This article is designed “to expand the concept
of torts and quasi-delict in this jurisdiction by
willfully or negligently causes damage to
another, shall indemnify the latter for the granting adequate legal remedy for the untold
number of moral wrongs which is impossible for
same.
human foresight to specifically enumerate and
punish in statute books”. [Baksh v. CA, supra].
The provision is intended to provide a remedy in
cases where the law declares an act illegal but
Elements: [Albenson v. CA, supra].
fails to provide for a relief to the party injured.
(a) There is an act which is legal;
[JARENCIO]
(b) But which is contrary to morals, good
NCC 20 does not distinguish, and the act may be customs, and public policy; and
done willfully or negligently. (c) It is done with intent to injure.

Requisites Examples of acts contrary to morals:


(a) The act must be willful or negligent; (1) Breach of Promise to Marry and Moral
(b) It must be contrary to law; and Seduction
(c) Damages must be suffered by the injured Mere breach of promise to marry is not an
party. actionable wrong. But to formally set a
wedding and go through all the above-
Salvador was misdiagnosed with Hepatitis, as a described preparation and publicity, only to
result of which she lost her job. During trial, it walk out of it when the matrimony is about
was proven that the clinic was operating under
substandard conditions, in violation of the to be solemnized, is quite different. This is
Clinical Laboratory Law, DOH Administrative palpably and unjustifiably contrary to good
Order No. 49-B, and the Philippine Medical customs xxx [Wassmer v. Velez, G.R. No. L-
20089 (1964)].
Technology Act of 1969. The Court held that
violation of a statutory duty is negligence, and Where a man's promise to marry is in fact
that Article 20 provides the legal basis for award the proximate cause of the acceptance of his
of damages to a party who suffers damage
love by a woman and his representation to
whenever one commits an act in violation of
some legal provision [Garcia v. Salvador, G.R. No. fulfill that promise thereafter becomes the
168512 (2007)]. proximate cause of the giving of herself unto
him in a sexual congress, proof that he had,
A.3. ACTS CONTRARY TO MORALS in reality, no intention of marrying her and
Art. 21. Any person who willfully causes loss that the promise was only a subtle scheme
or injury to another in a manner that is or deceptive device to entice or inveigle her
contrary to morals, good customs or public to accept him and to obtain her consent to
policy shall compensate the latter for the the sexual act, could justify the award of
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damages pursuant to Article 21 not because false and groundless [Que v. IAC, G.R. No.
of such promise to marry but because of the 66865 (1989)].
fraud and deceit behind it and the willful
injury to her honor and reputation. It is Malicious prosecution involves not only
essential, however, that such injury should criminal but civil and administrative suits as
have been committed in a manner contrary well [Magbanua v. Junsay, supra].
to morals, good customs or public policy
[Baksh v. CA, supra]. (3) Public Humiliation
Lolita’s family filed a case against Alfonse
However, when for one whole year, the Pe, a married man, for allegedly seducing
plaintiff, a woman of legal age, maintained Lolita and causing great damage to the
sexual relations with the defendant, with name of her parents, brothers, and sisters.
repeated acts of intercourse, there is here The Court sustained the claim, finding an
voluntariness. No case under Article 21 is injury to Lolita’s family in a manner contrary
made [Tanjanco v. CA, G.R. No. L-18630 to morals, good customs and public policy
(1966)]. as contemplated in Article 21 of the new Civil
Code [Pe v. Pe, G.R. No. L-17396 (1962)].
(2) Malicious Prosecution
Malicious prosecution is the institution of It is against morals, good customs and
any action or proceeding, either civil or public policy to humiliate, embarrass and
criminal, maliciously and without probable degrade the dignity of a person. Everyone
cause. must respect the dignity, personality, privacy
and peace of mind of his neighbors and
Elements: [Magbanua v. Junsay, G.R. other persons (Article 26, Civil Code) [Grand
No.132659 (2007)] Union v. Espino, G.R. No. L-48250 (1979)].
(a) The fact of the prosecution or that the
prosecution did occur and that the (4) Oppressive Dismissal
defendant was himself the prosecutor or The right of an employer to dismiss an
that he instigated its commencement; employee is not to be confused with the
(b) That the action finally terminated with manner in which this right is to be exercised
and the effects flowing therefrom. If the
an acquittal;
dismissal was done antisocially or
(c) That in bringing the action, the oppressively, then there is a violation of
prosecutor acted without probable cause Article 1701, which prohibits acts of
(d) That the prosecutor was actuated or oppression by either capital or labor against
impelled by legal malice, that is, by the other, and Article 21, which makes a
improper or sinister motive. person liable for damages if he willfully
causes loss or injury to another in a manner
The mere dismissal of the criminal that is contrary to morals, good customs, or
public policy. When the manner in which the
complaint by the fiscal’s office did not create
company exercised its right to dismiss was
a cause of action for malicious prosecution, abusive, oppressive and malicious, it is liable
because the proceedings therein did not for damages [Quisaba v. Sta. Ines, G.R. No.
involve an exhaustive examination of the L-38000 (1974)].
elements of malicious prosecution. To
constitute such, there must be proof that the A.4. UNJUST ENRICHMENT
prosecution was prompted by a sinister
design to vex and humiliate a person and Art. 22. Every person who through an act of
that it was initiated deliberately by the performance by another, or any other means,
defendant knowing that his charges were acquires or comes into possession of
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something at the expense of the latter mind of his neighbors and other persons.
without just or legal ground, shall return the The following and similar acts, though they
same to him. may not constitute a criminal offense, shall
produce a cause of action for damages,
Art. 23. Even when an act or event causing prevention and other relief:
damage to another’s property was not due to (1) Prying into the privacy of another’s
the fault or negligence of the defendant, the residence;
latter shall be liable for indemnity if through (2) Meddling with or disturbing the private
the act or event he was benefited. life or family relations of another;
(3) Intriguing to cause another to be
Art. 2142. Certain lawful, voluntary and
unilateral acts give rise to the juridical alienated from his friends;
relation of quasi-contract to the end that no (4) Vexing or humiliating another on account
one shall be unjustly enriched or benefited at of his religious beliefs, lowly station in
the expense of another. life, place of birth, physical defect, or
other personal condition.
Art. 2143. The provisions for quasi contracts
in this Chapter do not exclude other quasi- Article 26 specifically applies to intentional acts
contracts which may come within the purview
which fall short of being criminal offenses. It
of the preceding article.
itself expressly refers to tortious conduct which
One person should not be permitted to unjustly "may not constitute criminal offenses." The
enrich himself at the expense of another, but purpose is precisely to fill a gap or lacuna in the
should be required to make restitution of, or for law where a person who suffers injury because of
property or benefits received, retained, or a wrongful act not constituting a crime is left
appropriated where it is just and equitable that without any redress. Under Article 26, the
such restitution be made, and where such action
person responsible for such act becomes liable
involves no violation or frustration of law or
opposition to public policy, either directly or for "damages, prevention and other relief." In
indirectly. short, to preserve peace and harmony in the
family and in the community, Article 26 seeks to
Enrichment at the expense of another is not per eliminate cases of damnum absque injuria in
se forbidden. It is such enrichment without just human relations [MVRS Publications v. Islamic
or legal cause that is contemplated here. Just Da'wah Council, G.R. No. 135306 (2003)].
and legal cause is always presumed, and the
plaintiff has the burden of proving its absence.
The principal rights protected under this
provision are the following:
The restitution must cover the loss suffered by
(1) The right to personal dignity
the plaintiff but it can never exceed the amount
of unjust enrichment of the defendant if it is less (2) The right to personal security
than the loss of the plaintiff. (3) The right to family relations
(4) The right to social intercourse
Requisites: (5) The right to privacy
(a) That the defendant has been enriched; (6) The right to peace of mind
(b) That the plaintiff has suffered a loss;
(c) That the enrichment of the defendant is Note: Coverage of Art. 26 is not limited to those
without just or legal ground; and enumerated therein, the enumeration being
(d) That the plaintiff has no other action based merely examples of acts violative of a person’s
on contract, crime or quasi-delict. rights to dignity, personality, privacy and peace
of mind. Other “similar acts” are also covered
within the scope of the article.
A.5. VIOLATION OF HUMAN DIGNITY
Art. 26. Every person shall respect the VIOLATION OF PERSONAL DIGNITY
dignity, personality, privacy and peace of
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In order to be actionable it is not necessary that Public figures enjoy a limited right to privacy
the act constitutes a criminal offense. The as compared to ordinary individuals [Ayer v.
remedy afforded by the law is not only the Capulong, G.R. No. 82380 (1988)].
recovery of damages. “Prevention and other
relief” is also available. In other words,
(2) Intrusion upon plaintiff’s private affairs
injunction and other appropriate reliefs may also
be obtained by the aggrieved party. • This is not limited to situations where the
wrongdoer physically trespasses into one’s
VIOLATION OF PRIVACY property.
Privacy is the right to be let alone, or to be free • Generally, there is no invasion of privacy
from unwarranted publicity, or to live without when journalists report something that
unwarranted interference by the public in
occurs in the public realm, except when
matters in which the public is not necessarily
concerned. This right is purely personal in nature, the acts of the journalist are to an extent
such that it can be invoked only by the person that it constitutes harassment.
actually injured, it is subject to a proper waiver, • RA 4200: It is illegal for any person not
and it ceases upon death. However, the privilege authorized by both parties to any private
may be given to heirs of a deceased to protect communication to secretly record such
his memory, to protect the feelings of the living
communication.
heirs.

Reasonableness of Expectation of Privacy Test: (3) Publicity which puts one in a false light in
[Ople v. Torres, G.R. No. 127685 (1998)] the public eye – The interest here is in not
(1) Whether by one’s conduct, the individual has being made or forced to appear before the
exhibited an expectation of privacy public in an objectionable false light or
(2) Whether this expectation is one that society position.
recognizes and accepts as reasonable
Tort of putting in false
Defamation
The general rule is that the right to privacy may light
only be invoked by natural persons. Juridical The embarrassment of Concerns the
persons cannot invoke this because the basis to a person being reputational harm to a
this right is an injury to the feelings and portrayed as something person
sensibilities of the injured party, and a he is not
corporation has none of those. The exception is
where the right to privacy is invoked along with Statement should be Publication is satisfied
the right against unreasonable searches and actually made in public even if communicated
seizures. “An individual’s right to privacy under to only one specific
Article 26(1) of the Civil Code should not be third person
confined to his house or residence as it may
extend to places where he has the right to (4) Commercial appropriation of likeness of
exclude the public or deny them access” [Sps. image – It consists of appropriation, for the
Hing v. Choachuy, G.R. No. 179736 (2013)]. defendant’s benefit or advantage (ex. used
in defendant’s advertisement), of the
Types of invasion of privacy plaintiff’s name or likeness (picture or
(1) Publication of embarrassing private facts – portrait).
The interest here is the right to be free from
unwarranted publicity, wrongful publicizing DISTURBANCE OF PEACE OF MIND
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. A person, however, cannot be held
liable for damages for the mental or emotional
disturbance of the plaintiff which was due to the
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latter’s susceptibility to such disturbance, where Liability of Parents, Guardians or Kin


the defendant had no knowledge of such The law distinguishes between the right of a
peculiar susceptibility. The tendency of the law is parent to interest himself in the marital affairs of
to secure an interest in mental comfort only to his child and the absence of rights in a stranger
the extent of the ordinary sensibilities of men. to intermeddle in such affairs. However, such
distinction between the liability of parents and
Interference with Relations that of strangers is only in regard to what will
An interference with the continuance of justify interference. A parent is liable for
unimpaired interests founded upon the relation alienation of affections resulting from his own
in which the plaintiff stands toward one or more malicious conduct, as where he wrongfully
third persons [Prosser and Keeton]. entices his son or daughter to leave his or her
KINDS: spouse, but he is not liable unless he acts
(1) Family relations maliciously, without justification and from
(2) Social relations unworthy motives. He is not liable where he acts
(3) Economic relations and advises his child in good faith with respect
to his child's marital relations in the interest of
(4) Political relations
his child as he sees it, the marriage of his child
not terminating his right and liberty to interest
himself in, and be extremely solicitous for, his
Family Relations child's welfare and happiness even where his
ALIENATION OF AFFECTION conduct and advice suggest or result in the
This is a cause of action in favor of a separation of the spouses or the obtaining of a
husband against one who wrongfully divorce or annulment, or where he acts under
alienates the affection of his wife, depriving mistake or misinformation, or where his advice
him of his conjugal rights to her consortium, or interference are indiscreet or unfortunate,
that is, her society, affection, and assistance. although it has been held that the parent is
liable for consequences resulting from
Elements: recklessness. He may in good faith take his child
(a) Wrongful conduct of the defendant: into his home and afford him or her protection
intentional and malicious enticing of a and support, so long as he has not maliciously
spouse away from the other spouse enticed his child away, or does not maliciously
(b) Loss of affection or consortium 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
(c) Causal connection between such
the case of advice given to a son.
conduct and loss
LOSS OF CONSORTIUM
There is no evidence that the parents of The plaintiff Aleko E. Lilius also seeks to
Vicenta, out of improper motives, aided and recover the sum of P2,500 for the loss of
abetted her original suit for annulment, or what is called Anglo-Saxon common law
her subsequent divorce; she appears to have "consortium" of his wife, that is, "her
acted independently, and being of age, she services, society and conjugal
was entitled to judge what was best for her companionship", as a result of personal
and ask that her decisions be respected. Her injuries which she had received from the
parents, in so doing, certainly cannot be accident now under consideration. Inasmuch
charged with alienation of affections in the as a wife's domestic assistance and conjugal
absence of malice or unworthy motives, companionship are purely personal and
which have not been shown, good faith voluntary acts which neither of the spouses
being always presumed until the contrary is may be compelled to render, it is necessary
proved [Tenchavez v. Escaño, G.R. No. L- for the party claiming indemnity for the loss
19671 (1965)]. of such services to prove that the person

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obliged to render them had done so before Art. 1314. Any person who induces another to
he was injured and that he would be willing violate his contract with another person shall
to continue rendering them had he not been be liable for damages to the other
prevented from so doing [Lilius v. Manila contracting party.
Railroad Company, G.R. No. L-39587 (1934)].
Tort liability may be imposed upon a defendant
who intentionally and improperly interferes with
CRIMINAL CONVERSATION (ADULTERY) the plaintiff’s rights under a contract with
Interference with the marital relations by another person if the interference causes the
committing adultery with one of the spouses. plaintiff to lose a right under the contract or
This is obvious enough in the case of rape makes the contract rights more costly or less
but also applies where the adulterous valuable. This law of interference of contract is
spouse consented to or initiated the part of a larger body of tort law aimed at
intercourse. [PROSSER AND KEETON, p. protection of relationships [PROSSER AND
KEETON].
917]
Elements of tort interference: [So Ping Bun v. CA,
Social Relations G.R. No. 120554 (1999)]
(1) Meddling with or disturbing family relations (a) Existence of a valid contract
Art. 26. Every person shall respect the (b) Knowledge on the part of the third person of
dignity, personality, privacy and peace of the existence of contract; and
mind of his neighbors and other persons. (c) Interference of the third person is without
The following and similar acts, though they
legal justification or excuse.
may not constitute a criminal offense, shall
produce a cause of action for damages,
prevention and other relief; Everyone has a right to enjoy the fruits and
xxx advantages of his own enterprise, industry, skill
2) Meddling with or disturbing the private life and credit. He has no right to be protected
or family relations of another; against competition; but he has a right to be free
from malicious and wanton interference,
Developed as an offshoot of the action for disturbance or annoyance. If disturbance or loss
enticing away a servant and depriving the comes as a result of competition, or the exercise
master of the proprietary interest in [the of like rights by others, it is damnum absque
servant’s] services until there has been a injuria, unless some superior right by contract or
gradual shift of emphasis away from otherwise is interfered with. Thus, a plaintiff
“services” and toward a recognition of more loses his cause of action if the defendant
intangible elements in the domestic provides a sufficient justification for such
relations, such as companionship and interference, which must be an equal or superior
affection. [PROSSER AND KEETON, p. 916] right in themselves. The defendant may not
legally excuse himself on the ground that he
INTRIGUING TO CAUSE ANOTHER TO BE ALIENATED acted on a wrong understanding of his own
FROM HIS FRIENDS rights, or without malice, or bona fide, or in the
A person who committed affirmative acts best interests of himself [Gilchrist v. Cuddy, G.R.
intended to alienate the existing friendship No. 9356 (1915)].
of one with his friends is liable for damages.
A man is a social being and for being so, he Bad faith/Malice is required to make the
needs friends to socialize with and to defendant liable for damages in cases of
depend upon in case of need. To alienate tortuous interference [So Ping Bun v. CA, supra].
him wrongfully or with malice from his
friends is to cause him suffering for which he A.6 DERELICTION OF DUTY
is entitled to damages.
Art. 27. Any person suffering material or
Economic Relations moral loss because a public servant or
employee refuses or neglects, without just

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cause, to perform his official duty may file an B.1. VIOLATION OF CIVIL AND POLITICAL
action for damages and other relief against RIGHTS
the latter, without prejudice to any
Art. 32. Any public officer or employee, or any
disciplinary administrative action that may
be taken. private individual, who directly or indirectly
obstructs, defeats, violates or in any manner
This applies only to acts of nonfeasance or the impedes or impairs any of the following
nonperformance of some acts which a person is rights and liberties of another person shall
obliged or has responsibility to perform. The be liable to the latter for damages:
duty of the public servant must be ministerial in (1) Freedom of religion
character. If the duty is discretionary, he is not
(2) Freedom of speech
liable unless he acted in a notoriously arbitrary
manner. (3) Freedom to write for the press or to
maintain a periodical publication
The defense of good faith is not available (4) Freedom from arbitrary or illegal
because an officer is under constant obligation detention
to discharge the duties of his office, and it is not (5) Freedom of suffrage
necessary to show that his failure to act was due (6) The right against deprivation of property
to malice or willfulness.
without due process of law
Requisites: [Amaro v. Sumanguit, G.R. No. L- (7) The right to just compensation when
14986 (1962)] property is taken for public use
(a) Defendant is a public officer charged with a (8) The right to equal protection of the laws
performance of a duty in favor of the (9) The right to be secure in one’s person,
plaintiff; house, papers and effects against
(b) He refused or neglected without just cause unreasonable searches and seizures
to perform the duty; (10) The liberty of abode and of changing the
(c) Plaintiff sustained material or moral loss as same
a consequence of such non-performance; (11) The right to privacy of communication
(d) The amount of such damages, if material. and correspondence
(12) The right to become a member of
A.7. UNFAIR COMPETITION associations and societies for purposes
Art. 28. Unfair competition in agricultural, not contrary to law
commercial or industrial enterprises or in (13) The right to take part in a peaceable
labor through the use of force, intimidation, assembly and petition the government
deceit, machination or any other unjust, for redress of grievances
oppressive or highhanded method shall give (14) The right to be free from involuntary
rise to a right of action by the person who
servitude in any form
thereby suffers damage.
(15) The right of the accused against
B. INDEPENDENT CIVIL ACTIONS excessive bail
(16) The right of the accused to be heard by
Rule 111, Sec. 3, ROC. In the cases provided for
himself and counsel, to be informed of
in Articles 32, 33, 34 and 2176 of the Civil
Code of the Philippines, the independent civil the nature and the cause of the
action may be brought by the offended party. accusation against him, to have a speedy
It shall proceed independently of the criminal and public trial, to meet the witnesses
action and shall require only a face to face, to have compulsory process
preponderance of evidence. In no case, to secure the attendance of witnesses on
however, may the offended party recover is behalf;
damages twice for the same act or omission
(17) Freedom from being compelled to be a
charged in the criminal action.
witness against one’s self, or from being
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forced to confess his guilt, or from being protection of individual rights. [Silahis v. Soluta,
induced by a promise of immunity or G.R. No. 163087 (2006)]
reward to make such confession, except It is obvious that the purpose of the above codal
when the person confessing becomes a provision (Art. 32) is to provide a sanction to the
State witness. deeply cherished rights and freedoms enshrined
(18) Freedom from excessive fines, or cruel in the Constitution. Its message is clear; no man
and unusual punishment, unless the may seek to violate those sacred rights with
same is imposed or inflicted in impunity. In times of great upheaval or of social
accordance with a statute which has not and political stress, when the temptation is
been judicially declared unconstitutional; strongest to yield — borrowing the words of
(19) Freedom of access to the courts Chief Justice Claudio Teehankee — to the law of
force rather than the force of law, it is necessary
In any of the cases referred to in this article, to remind ourselves that certain basic rights and
whether or not the defendant’s act or liberties are immutable and cannot be sacrificed
omission constitutes a criminal offense, the to the transient needs or imperious demands of
aggrieved party has a right to commence an the ruling power. The rule of law must prevail, or
entirely separate and distinct civil action for else liberty will perish [Aberca, et al. v. Ver, et al.,
damages, and for other relief. Such civil G.R. No. 69866(1988)].
action shall proceed independently of any
B.2. DEFAMATION, FRAUD, PHYSICAL
criminal prosecution (if the latter be
INJURIES
instituted) and may be proved by a
preponderance of evidence. Art. 33. In cases of defamation, fraud, and
physical injuries, a civil action for damages,
The indemnity shall include moral damages. entirely separate and distinct from the
Exemplary damages may also be criminal action, may be brought by the
adjudicated. injured party. Such civil action shall proceed
independently of the criminal prosecution,
The responsibility herein set forth is not and shall require only a preponderance of
demandable from a judge unless his act or evidence.
omission constitutes a violation of the Penal
code or any other penal statute. The civil action for damages that Article 33
allows to be instituted is ex-delicto. This is
manifest from the provision which uses the
Article 32 speaks of a particular specie of an expressions “criminal action” and “criminal
“act” that may give rise to an action for damages prosecution”. Quoting Tolentino, the Court ruled
against a public officer, and that is, a tort for that this provision is an exception to the general
impairment of rights and liberties. [Vinzons- rule that the civil action for recovery of civil
Chato v. Fortune, supra] liability arising from the offense charged is
impliedly instituted with the criminal action.
Article 32 is clear that not only public officers Where the offense is defamation, fraud, or
but also private individuals can incur civil physical injuries, a civil action may be filed
liability for violation of rights enumerated independently of the criminal action, even
therein. Because the provision speaks of an though no reservation is made [Madeja v. Caro,
officer, employee or person “directly or G.R. No. 51183 (1983)].
indirectly” responsible for the violation of the (1) Defamation – the offense of injuring a
constitutional rights and liberties of another, it is
not the actor alone who must answer for person’s character, fame or reputation
damages under Article 32. It is not even through false or malicious statements.
necessary that the defendant should have acted Defamation is an invasion of a relational
with malice or bad faith, otherwise, it would interest since it involves the opinion which
defeat its main purpose, which is the effective
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others in the community may have, or tend Assault is an intentional, unlawful offer of
to have, of the plaintiff. physical injury to another by force unlawfully
directed toward the person of another, under
Elements of libel pursuant to RPC, Art. 353: such circumstances as to create a well-
(a) An allegation or imputation of a founded fear of imminent peril, coupled with
the apparent present ability to effectuate the
discreditable act or condition concerning
attempt if not prevented. The law seeks to
another protect the interest of the individual in
(b) Publication of the imputation freedom from offensive bodily touching
(c) Identity of the person defamed although no actual harm is done.
(d) Existence of malice
Defamation and fraud (in Art. 33) are used in
Where the defamation is alleged to have their ordinary sense because there are no
been directed at a group or class, it is specific provisions in the Revised Penal Code
essential that the statement must be so using these terms as names of offenses
sweeping or all-embracing as to apply to defined therein, so that these two terms
every individual in that group or class, or defamation and fraud must have been used
sufficiently specific so that each individual in not to impart to them any technical meaning
the class or group can prove that the in the laws of the Philippines, but in their
defamatory statement was specifically generic sense. With these apparent
pointed to him [MVRS Publications, Inc. v. circumstances in mind, it is evident that the
Islamic, supra]. term “physical injuries” could not have been
used in its specific sense as a crime defined
In determining whether certain utterances in the Revised Penal Code, for it is difficult to
are defamatory, the words used are to be believe that the Code Commission would
construed in their entirety and taken in their have used terms in same article—some in
plain, natural and ordinary meaning, as they this general and others in its technical sense.
would naturally be understood by persons In other words, the term “physical injuries”
hearing or reading them, unless it appears should be understood to mean bodily injury,
that they were used and understood in not the crime of physical injuries, because
another sense. When malice in fact is proven, the terms used with the latter are general
assertions and proofs that the libelous terms [Carandang v. Santiago and Valenton,
articles are qualifiedly privileged G.R. No. L-8238 (1955)].
communications are futile, since being
qualifiedly privileged communications Paje was acquitted of the charge of homicide
merely prevents the presumption of malice and double serious physical injuries through
from attaching in a defamatory imputation reckless imprudence on the ground that the
[Yuchengco v. Manila Chronicle, G.R. No. collision was a pure accident and the
184315 (2009)]. negligence charged against him did not exist.
In a separate civil action to enforce civil
(2) Fraud – Estafa under RPC, 315; Article 33 liability filed by the heirs of the deceased,
does not cover violations of B.P. 22. the Court ruled that criminal negligence is
not one of the three crimes mentioned in
Article 33, which authorizes the institution of
(3) Physical Injuries (Assault and Battery)
an independent civil action. Although in the
Battery case of Dyogi v. Yatco, the Court held that
Battery is the actual infliction of any the term “physical injuries” includes
unlawful or unauthorized violence on the homicide, it is borne in mind that the charge
person of another, irrespective of its degree. against Paje was for reckless imprudence
The law protects the interest of the resulting in homicide, and the law penalizes
individual in freedom from bodily harm or the negligent or careless act, not the result
any impairment of the physical integrity of thereof [Corpus v. Paje, G.R. No. L-26737
the body. (1969)].
Assault

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B.3. NEGLECT OF DUTY complaint should be found to be malicious.


Art. 34. When a member of a city or
municipal police force refuses or fails to If during the pendency of the civil action, an
render aid or protection to any person in case information should be presented by the
of danger to life or property, such peace prosecuting attorney, the civil action shall be
officer shall be primarily liable for damages, suspended until the termination of the
and the city or municipality shall be criminal proceedings.
subsidiarily responsible therefor. The civil
action herein recognized shall be
independent of any criminal proceedings,
and a preponderance of evidence shall
suffice to support such action.

Art. 34 covers a situation where:


(1) There is danger to the life or property of a
person;
(2) A member of a city or municipal police force
who is present in the scene refused or failed
to render aid or protection to the person;
and
(3) Damages are caused whether to the person
and/or property of the victim.

Nature of liability
(1) Of the police officer – Primary
(2) City or municipality – Subsidiary

The defense of having observed the diligence of


a good father of a family to prevent the damage
is not available to the city/municipality.

B.4. CATCH-ALL INDEPENDENT CIVIL ACTION

Art. 35. When a person, claiming to be


injured by a criminal offense, charges
another with the same, for which no
independent civil action is granted in this
Code or any special law, but the justice of the
peace finds no reasonable grounds to believe
that a crime has been committed, or the
prosecuting attorney refuses or fails to
institute criminal proceedings, the complaint
may bring a civil action for damages against
the alleged offender. Such civil action may
be supported by a preponderance of
evidence. Upon the defendant's motion, the
court may require the plaintiff to file a bond
to indemnify the defendant in case the
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IV. Liability Attached To shall be liable for damages for the death of,
or injuries suffered by, any person by reason
Specific Persons of the defective condition of roads, streets,
bridges, public buildings, and other public
works under their control or supervision.
A. STRICT LIABILITY
It is not even necessary that the defective roads
A.1. POSSESSOR OR USER OF ANIMALS or streets belong to the province, city or
Art. 2183. The possessor of an animal or municipality for liability to attach. The article
whoever may make use of the same is only requires that either control or supervision
responsible for the damage which it may be exercised over said street or road [Guilatco v.
cause, although it may escape or be lost. This Dagupan, G.R. No. 61516 (1989)].
responsibility shall cease only in case the
damage should come from force majeure or A.3. PROPRIETOR OF BUILDING OR
from the fault of the person who has suffered STRUCTURE
damage.
Art. 2190. The proprietor of a building or
Since the law makes no distinction, this is structure is responsible for the damages
applicable to both wild (in case the wild animal resulting from its total or partial collapse, if it
is kept) and domestic animals. It is enough that should be due to the lack of necessary
defendant is the possessor, owner, or user of the repairs.
animal at the time it caused the damage
complained of, to hold him liable therefor. Art. 2191. Proprietors shall also be
responsible for damages caused:
Possession of the animal, not ownership, is (1) By the explosion of machinery which has
determinative of liability under Art. 2183. The not been taken care of with due
obligation imposed by said article is not based diligence, and the inflammation of
on the negligence or on the presumed lack of explosive substances which have not
vigilance of the possessor or user of the animal been kept in a safe and adequate place;
causing damage. It is based on natural equity
and on the principle of social interest that he (2) By excessive smoke, which may be
who possesses animals for his utility, pleasure, harmful to persons or property;
or service, must answer for any damage which (3) By the falling of trees situated at or near
such animal may cause. The contention that the highways or lanes, if not caused by force
defendant could not be expected to exercise majeure;
remote control of the animal is not acceptable. (4) By emanations from tubes, canals,
In fact, Art. 2183 holds the possessor liable even
sewers or deposits of infectious matter,
if the animal should “escape or be lost” and so
be removed from his control. It is likewise constructed without precautions suitable
immaterial that the animal was tame and was to the place.
merely provoked by the victim. The law does not
speak only of vicious animals but covers even Art. 2192. If damage referred to in the two
tame ones as long as they cause injury [Vestil v. preceding articles should be the result of any
IAC, G.R. No. 74431 (1989)]. defect in the construction mentioned in
article 1723, the third person suffering
Possible defenses against this liability damages may proceed only against the
(1) Force Majeure engineer or architect or contractor in
(2) Fault of person suffering damage accordance with said article, within the
(3) Act of third persons period therein fixed.

A.2. PROVINCES, CITIES, AND Ownership of a building imposes on the


MUNICIPALITIES proprietor thereof the duty to maintain it in good
condition at all times to the end that it may not
Art. 2189. Provinces, cities and municipalities collapse either totally or partially as to cause
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damage or injury to another’s person or property. those plans and specifications, or due to the
This duty obtains whether the building is leased defects in the ground. The contractor is
or held in usufruct. Considering, however, that likewise responsible for the damages if the
the lessee or usufructuary has direct and edifice falls, within the same period, on
immediate control of the building, the law account of defects in the construction or the
imposes on him the duty to notify the proprietor use of materials of inferior quality furnished
of such urgent or extraordinary repairs. And by him, or due to any violation of the terms of
where the proprietor’s failure to make the the contract. If the engineer or architect
necessary repairs was due to the failure of the supervises the construction, he shall be
lessee or usufructuary to notify him, the solidarily liable with the contractor.
proprietor is entitled to indemnification for
damages he may have been required to pay to Acceptance of the building, after completion,
the parties. does not imply waiver of any of the cause of
action by reason of any defect mentioned in
Liability does not attach to the proprietor if the the preceding paragraph.
damage was caused by any defect in the
construction mentioned in Article 1723, in which The action must be brought within ten years
case the action should be against the engineer following the collapse of the building.
or architect.
Engineer or architect who drew up the plans and
Under Article 2190, the plaintiff is required to specifications is liable if the building collapses
prove: within 15 years due to:
(a) The total or partial collapse of a building or (1) A defect in those plans and specifications; or
structure (2) Due to the defects in the ground.
(b) That the defendant is the proprietor
(c) That the collapse was due to the lack of Contractor is liable if the edifice falls within 15
necessary repairs years due to:
(1) Defects in the construction;
Note: There is no requirement to prove (2) The use of materials of inferior quality
negligence. furnished by the contractor; or
(3) Due to any violation of the terms of the
Under Article 2191, with the exception of No. 1, contract.
negligence is also not an issue.
Here, the plaintiff need only prove that such
The owner or proprietor of a place of public conditions (defects) exist, and need not prove
amusement impliedly warrants that the that negligence of the defendant be the cause of
premises, appliances and amusement devices the conditions.
are safe for the purpose for which they are
designed, the doctrine being subject to no other A.5. OWNERS OF ENTERPRISES OR OTHER
exception or qualification than that he does not EMPLOYERS
contract against unknown defects not Art. 1711. Owners of enterprises and other
discoverable by ordinary or reasonable means employers are obliged to pay compensation
[Gotesco Investment Corp. v. Chatto, G.R. No. for the death of or injuries to their laborers,
workmen, mechanics or other employees,
87584 (1992)].
even though the event may have been purely
accidental or entirely due to a fortuitous
A.4. ENGINEER OR ARCHITECT OF cause, if the death or personal injury arose
COLLAPSED BUILDING out of and in the course of the employment.
Art. 1723. The engineer or architect who drew The employer is also liable for compensation
up the plans and specifications for a building if the employee contracts any illness or
is liable for damages if within fifteen years disease caused by such employment or as
from the completion of the structure, the the result of the nature of the employment. If
same should collapse by reason of a defect in the mishap was due to the employee's own
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notorious negligence, or voluntary act, or (2) When death or injury is caused by a fellow
drunkenness, the employer shall not be worker
liable for compensation. When the • General rule: The employer is solidarily
employee's lack of due care contributed to
liable with the fellow worker causing the
his death or injury, the compensation shall
be equitably reduced. death or injury
• Exception: If the only cause of the death or
Art. 1712. If the death or injury is due to the injury was the fellow worker’s intentional
negligence of a fellow worker, the latter and or malicious act
the employer shall be solidarily liable for • Exception to the exception: If it is shown
compensation. If a fellow worker's intentional that the employer did not exercise due
malicious act is the only cause of the death or diligence in the selection and supervision
injury, the employer shall not be answerable, of the fellow worker causing the death or
unless it should be shown that the latter did injury
not exercise due diligence in the selection or
supervision of the plaintiff's fellow worker. A.6. HEAD OF A FAMILY FOR THINGS
THROWN OR FALLING
Alarcon, a teacher, hired Urzino and Azaña to Art 2193. The head of a family that lives in a
dig a well on his land; in the course of which building or a part thereof, is responsible for
Urzino died of asphyxia. The Court found that damages caused by things thrown or falling
under the principle of ejusdem generis, said from the same.
“other employers” mentioned in Article 1711
The purpose of the law is to relieve the injured
must be construed to refer to persons who
party of the difficulty of determining and proving
belong to a class analogous to “owners of who threw the thing or what caused it to fall, or
enterprises”, such as those operating a business that either was due to the fault or negligence of
or engaged in a particular industry or trade, any particular individual.
requiring its managers to contract the services of
laborers, workers and/or employees. Alarcon, Lessee is considered as the head of the family. It
not owning any enterprise, did not fall under the is enough that he lives in and has control over it
category of “other employers” [Alarcon v. [Dingcong v. Kanaan, G.R. No. L-47033 (1941)].
Alarcon, G.R. No. L-15692 (1961)].
A.7. PRODUCTS LIABILITY
Situations covered: I. MANUFACTURERS / PROCESSORS OF
(1) Death or injury arising out of or in the course FOODSTUFFS
of employment – here, the employer is liable Art. 2187. Manufacturers and processors of
even if the event which caused the death or foodstuffs, drinks, toilet articles and similar
injury was purely accidental or due to a goods shall be liable for death or injuries
fortuitous event caused by any noxious or harmful substances
used, although no contractual relation exists
(2) Illness or disease caused by their between them and the consumers.
employment or as the result of the nature of
the employment Under the foregoing provision, liability is not
made to depend upon fault or negligence of the
Defenses available to the employer: manufacturer or processor. The provision
(1) When death or injury is not caused by a likewise dispensed with any contractual relation
fellow worker between the manufacturer and the consumer,
thereby clearly implying that liability is imposed
• The mishap due to the employee’s own by law as a matter of public policy.
notorious negligence or voluntary act, or
drunkenness

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Proof of negligence under this provision is not


necessary; as such, traditional contract and Article 92. Exemptions. – If the concerned
warranty defenses as (1) lack of privity; (2) lack of department finds that for good or sufficient
reliance on a warranty; (3) lack of notice to the reasons, full compliance with the labeling
defendant of the breach of warranty; and (4) requirements otherwise applicable under this
disclaimer of implied warranties are inapplicable. Act is impracticable or is not necessary for
the adequate protection of public health and
Requisites of liability safety, it shall promulgate regulations
(a) Defendant is a manufacturer or possessor of exempting such substances from these
foodstuff, drinks, toilet articles and similar requirements to the extent it deems
goods; consistent with the objective of adequately
(b) He used noxious or harmful substances in safeguarding public health and safety, and
any hazardous substance which does not
the manufacture or processing of the bear a label in accordance with such
foodstuff, drinks or toilet articles consumed regulations shall be deemed mislabeled
or used by the plaintiff; hazardous substance.
(c) Plaintiff’s death or injury was caused by the
product so consumed or used; and Article 97. Liability for the Defective Products.
(d) The damages sustained and claimed by the – Any Filipino or foreign manufacturer,
plaintiff and the amount thereof. producer, and any importer, shall be liable
for redress, independently of fault, for
damages caused to consumers by defects
Burden of proof
resulting from design, manufacture,
The burden of proof that the product was in a
construction, assembly and erection,
defective condition at the time it left the hands
formulas and handling and making up,
of the manufacturer and particular seller is upon
presentation or packing of their products, as
the injured plaintiff.
well as for the insufficient or inadequate
information on the use and hazards thereof.
Who may recover
Although the article used the term “consumer”,
A product is defective when it does not offer
such term includes a “user” and “purchaser” of
the safety rightfully expected of it, taking
the injuriously defective food product or toilet
relevant circumstances into consideration,
article. The person who may recover need not be
including but not limited to:
the purchaser of the foodstuff or toilet article.
(a) presentation of product
II. CONSUMER ACT – RA 7394, SECS. 92-107 (b) use and hazards reasonably expected of
(CH. 1) it;
Consumer Act Provisions (c) the time it was put into circulation.
Article 4. Definition of Terms.
(n) "Consumer" means a natural person who A product is not considered defective
is a purchaser, lessee, recipient or because another better quality product has
prospective purchaser, lessor or recipient of been placed in the market. The
consumer products, services or credit. manufacturer, builder, producer or importer
shall not be held liable when it evidences:
(as) "Manufacturer" means any person who (a) that it did not place the product on the
manufactures, assembles or processes market;
consumer products, except that if the goods (b) that although it did place the product on
are manufactured, assembled or processed
the market such product has no defect;
for another person who attaches his own
brand name to the consumer products, the (c) that the consumer or a third party is
latter shall be deemed the manufacturer. In solely at fault.
case of imported products, the
manufacturer's representatives or, in his Article 98. Liability of Tradesman or Seller. – The
absence, the importer, shall be deemed the tradesman/seller is likewise liable, pursuant to
manufacturer. the preceding article when:
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(a) it is not possible to identify the or publicity messages/advertisement, with


manufacturer, builder, producer or importer; due regard to the variations resulting from
(b) the product is supplied, without clear their nature, the consumer being able to
demand replacement to the imperfect parts.
identification of the manufacturer, producer,
builder or importer; If the imperfection is not corrected within
(c) he does not adequately preserve perishable thirty (30) days, the consumer may
goods. The party making payment to the alternatively demand at his option:
damaged party may exercise the right to (a) the replacement of the product by
recover a part of the whole of the payment another of the same kind, in a perfect
made against the other responsible parties, state of use;
in accordance with their part or (b) the immediate reimbursement of the
responsibility in the cause of the damage amount paid, with monetary updating,
effected. without prejudice to any losses and
damages;
Article 99. Liability for Defective Services. – (c) a proportionate price reduction.
The service supplier is liable for redress,
independently of fault, for damages caused The parties may agree to reduce or increase
to consumers by defects relating to the the term specified in the immediately
rendering of the services, as well as for preceding paragraph; but such shall not be
insufficient or inadequate information on the less than seven (7) nor more than one
fruition and hazards thereof. hundred and eighty (180) days.

The service is defective when it does not The consumer may make immediate use of
provide the safety the consumer may the alternatives under the second paragraph
rightfully expect of it, taking the relevant of this Article when by virtue of the extent of
circumstances into consideration, including the imperfection, the replacement of the
but not limited to: imperfect parts may jeopardize the product
(a) the manner in which it is provided; quality or characteristics, thus decreasing its
(b) the result of hazards which may value.
reasonably be expected of it;
(c) the time when it was provided. If the consumer opts for the alternative under
sub-paragraph (a) of the second paragraph
A service is not considered defective because of this Article, and replacement of the
of the use or introduction of new techniques. product is not possible, it may be replaced by
another of a different kind, mark or model:
The supplier of the services shall not be held Provided, That any difference in price may
liable when it is proven: result thereof shall be supplemented or
(a) that there is no defect in the service reimbursed by the party which caused the
damage, without prejudice to the provisions
rendered; of the second, third and fourth paragraphs of
(b) that the consumer or third party is solely this Article.
at fault.
Article 101. Liability for Product Quantity
Article 100. Liability for Product and Service Imperfection. – Suppliers are jointly liable for
Imperfection. – The suppliers of durable or imperfections in the quantity of the product
nondurable consumer products are jointly when, in due regard for variations inherent
liable for imperfections in quality that render thereto, their net content is less than that
the products unfit or inadequate for indicated on the container, packaging,
consumption for which they are designed or labeling or advertisement, the consumer
decrease their value, and for those resulting having powers to demand, alternatively, at
from inconsistency with the information his own option:
provided on the container, packaging, labels (a) the proportionate price
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(b) the supplementing of weight or measure as regards to the latter by the consumer.
differential;
(c) the replacement of the product by Article 104. Ignorance of Quality
another of the same kind, mark or model, Imperfection. – The supplier's ignorance of
the quality imperfections due to inadequacy
without said imperfections;
of the products and services does not exempt
(d) the immediate reimbursement of the him from any liability.
amount paid, with monetary updating
without prejudice to losses and damages Article 105. Legal Guarantee of Adequacy. –
if any. The legal guarantee of product or service
adequacy does not require an express
The provisions of the fifth paragraph of instrument or contractual exoneration of the
Article 99 shall apply to this Article. supplier being forbidden.

The immediate supplier shall be liable if the Article 106. Prohibition in Contractual
instrument used for weighing or measuring is Stipulation. – The stipulation in a contract of
not gauged in accordance with official a clause preventing, exonerating or reducing
standards. the obligation to indemnify for damages
effected, as provided for in this and in the
Article 102. Liability for Service Quality preceding Articles, is hereby prohibited, if
Imperfection. – The service supplier is liable there is more than one person responsible for
for any quality imperfections that render the the cause of the damage, they shall be jointly
services improper for consumption or liable for the redress established in the
decrease their value, and for those resulting pertinent provisions of this Act. However, if
from inconsistency with the information the damage is caused by a component or
contained in the offer or advertisement, the part incorporated in the product or service,
consumer being entitled to demand its manufacturer, builder or importer and the
alternatively at his option: person who incorporated the component or
(a) the performance of the services, without part are jointly liable.
any additional cost and when applicable;
A.8. NUISANCE
(b) the immediate reimbursement of the
amount paid, with monetary updating Art. 694. A nuisance is any act, omission,
without prejudice to losses and damages, establishment, business, condition of
if any; property, or anything else which:
(1) Injures or endangers the health or safety
(c) a proportionate price reduction.
of others; or
Reperformance of services may be entrusted (2) Annoys or offends the senses; or
to duly qualified third parties, at the (3) Shocks, defies or disregards decency or
supplier's risk and cost. morality; or
(4) Obstructs or interferes with the free
Improper services are those which prove to passage of any public highway or street,
be inadequate for purposes reasonably or any body of water; or
expected of them and those that fail to meet
(5) Hinders or impairs the use of property.
the provisions of this Act regulating service
rendering.
Art. 696. Every successive owner or possessor
Article 103. Repair Service Obligation. – of property who fails or refuses to abate a
When services are provided for the repair of nuisance in that property started by a former
any product, the supplier shall be considered owner or possessor is liable therefor in the
implicitly bound to use adequate, new, same manner as the one who created it.
original replacement parts, or those that
maintain the manufacturer's technical Art. 697. The abatement of a nuisance does
specifications unless, otherwise authorized, not preclude the right of any person injured
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to recover damages for its past existence. lands in a manner as will constitute a nuisance.
It is based on the maxim sic utere tuo ut alienum
Art. 698. Lapse of time cannot legalize any non laedas (so use your own as not to injure
nuisance, whether public or private. another’s property).

Nuisance is a condition and not an act or failure The general rule is that everyone is bound to
to act, so that if a wrongful condition exists, the bear the habitual or customary inconveniences
person responsible for its existence is that result from the proximity of others, and so
responsible for the resulting damages to others. long as this level is not surpassed, he may not
complain against them. But if the prejudice
Sangco: A person who creates or maintains a
nuisance is liable for the resulting injury to exceeds the inconveniences that such proximity
others regardless of the degree of care or skill habitually brings, the neighbor who causes such
exercised to avoid the injury. The creation or disturbances is held responsible for the resulting
maintenance of a nuisance is a violation of an damage, being guilty of causing nuisance. There
absolute duty. can be no doubt that commercial and industrial
activities which are lawful in themselves may
Liability for Negligence v. Liability for Nuisance
become nuisances if they are so offensive to the
Negligence Nuisance senses that they render the enjoyment of life and
Basis Liability is Liability attaches property uncomfortable. It is no defense that
based on lack of regardless of the skill and care have been exercised and the most
proper care and skill exercised to improved methods and appliances employed to
diligence avoid the injury prevent such result. In this case, the Court ruled
Condition Act complained There is continuing that causing or maintaining disturbing noises or
of the act of is already harm being sounds may constitute an actionable nuisance
done which suffered by the [Velasco v. Manila Electric Co., G.R. No. 18390
caused injury to aggrieved party
the plaintiff because of the (1971)].
maintenance of the
act or thing which Types of Nuisance:
constitutes the (1) Nuisance per se
nuisance It is recognized as a nuisance under any and
Remedy Action for Abatement all circumstances because it constitutes a
damages direct menace to public health and safety
and, for that reason, may be abated
summarily under the undefined law of
Easement against Nuisance
necessity.
Art. 682. Every building or piece of land is
subject to the easement which prohibits the
To become a nuisance per se, the thing must,
proprietor or possessor from committing
of itself, because of its inherent qualities,
nuisance through noise, jarring, offensive
without complement, be productive of injury,
odor, smoke, heat, dust, water, glare and
or, by reason of the matter of its use or
other causes.
exposure, threaten or be dangerous to life or
property.
Art. 683. Subject to zoning, health, police
and other laws and regulations, factories and (2) Nuisance per accidens
shops may be maintained provided the least
possible annoyance is caused to the It becomes a nuisance depending upon
neighborhood. certain conditions and circumstances, and
its existence being a question of fact, it
The provisions impose a prohibition upon cannot be abated without due hearing
owners of buildings of land from committing thereon in a tribunal authorized to decide
therein a nuisance or using such buildings or whether such a thing does in law constitute
a nuisance.
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Art. 700. The district health officer shall take


A nuisance is, according to Blackstone, "Any care that one or all of the remedies against a
thing that works3 hurt, inconvenience, or public nuisance are availed of.
damages." They arise from pursuing
particular trades or industries in populous Art. 701. If a civil action is brought by reason
neighborhoods; from acts of public of the maintenance of a public nuisance,
indecency, keeping disorderly houses, and such action shall be commenced by the city
houses of ill fame, gambling houses, etc. or municipal mayor.
Nuisances have been divided into two
classes: Nuisances per se, and nuisances per Art. 702. The district health officer shall
accidens. To the first belong those which are determine whether or not abatement,
unquestionably and under all circumstances without judicial proceedings, is the best
nuisances, such as gambling houses, houses remedy against a public nuisance.
of ill fame, etc. The number of such
nuisances is necessarily limited, and by far Art. 703. A private person may file an action
the greater number of nuisances are such on account of a public nuisance, if it is
because of particular facts and specially injurious to himself.
circumstances surrounding the otherwise
harmless cause of the nuisance. For this Art. 704. Any private person may abate a
reason, it will readily be seen that whether a public nuisance which is specially injurious to
particular thing is a nuisance is generally a him by removing, or if necessary, by
question of fact, to be determined in the first destroying the thing which constitutes the
instance before the term nuisance can be same, without committing a breach of the
applied to it [Iloilo Ice and Cold Storage Co. v. peace, or doing unnecessary injury. But it is
Municipal Council, G.R. No. L-7012 (1913)]. necessary:
(1) That demand be first made upon the
(3) Public nuisance owner or possessor of the property to
abate the nuisance;
Art. 695. Nuisance is either public or private. (2) That such demand has been rejected;
A public nuisance affects a community or (3) That the abatement be approved by the
neighborhood or any considerable number of district health officer and executed with
persons, although the extent of the
annoyance, danger or damage upon the assistance of the local police; and
individuals may be unequal. A private (4) That the value of the destruction does
nuisance is one that is not included in the not exceed three thousand pesos.
foregoing definition.
(4) Private nuisance
A public nuisance is the doing of or the failure to It is one which violates only private rights
do something that injuriously affects safety, and produces damage to but one or a few
health, or morals of the public, or works some persons, and cannot be said to be public.
substantial annoyance, inconvenience or injury
to the public. It causes hurt, inconvenience, or Art. 705. The remedies against a private
damage to the public generally, or such part of nuisance are:
the public as necessarily comes in contact with it (1) A civil action; or
in the exercise of a public or common right.
(2) Abatement, without judicial proceedings.
Art. 699. The remedies against a public
nuisance are: Art. 706. Any person injured by a private
(1) A prosecution under the Penal Code or nuisance may abate it by removing, or if
any local ordinance: or necessary, by destroying the thing which
constitutes the nuisance, without committing
(2) A civil action; or a breach of the peace or doing unnecessary
(3) Abatement, without judicial proceedings. injury. However, it is indispensable that the
procedure for extrajudicial abatement of a
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public nuisance by a private person be such children [Hidalgo Enterprises v. Balandan,


followed. G.R. No. L-3422 (1952)].

Art. 707. A private person or a public official It is doubtful whether contributory negligence
extrajudicially abating a nuisance shall be can properly be imputed to the deceased, owing
liable for damages: to his immature years and the natural curiosity
(1) If he causes unnecessary injury; or which a child would feel to do something out of
(2) If an alleged nuisance is later declared by the ordinary, and the mere fact that the
the courts to be not a real nuisance. deceased ignored the caution of a companion of
the age of 8 years does not, in our opinion, alter
the case. Contributory negligence of a minor
(5) Attractive Nuisance does not bar recovery, where his immaturity and
General Rule: When people come to the natural curiosity impelled him to act to his
lands or premises of others for their own injury; but discretion shown by the child is the
purposes, without right or invitation, they decisive factor [Del Rosario v. Manila Electric Co.,
must take the lands as they see them. G.R. No. L-35283 (1932)].

Exception: Attractive Nuisance doctrine. When Applicable/Not Applicable: [De Leon on


Torts and Damages]
One who maintains on his premises • The danger to the child must be caused by the
dangerous instrumentalities or appliances of attraction itself, or by something with which
a character likely to attract children at play,
the attraction brings the child in contact.
and who fails to exercise ordinary care to
prevent children from playing • Protects a meddling child, but not a danger
therewith or resorting thereto, is liable to a child which was created by the child himself.
of tender years who is injured thereby, even if the • Limited to latent dangers, and is no basis for
child is technically a trespasser in the premises. recovery where peril is obvious or patent.
The principle reason for the doctrine is that the
• Does not apply to natural dangers.
condition or appliance in question although its
danger is apparent to those of age, is so enticing • The age and maturity of the injured child and
or alluring to children of tender years as to the reason for the child’s presence are
induce them to approach, get on or use it, and important considerations in the application of
this attractiveness is an implied invitation to the doctrine.

Summary of Strict Liability


Person Strictly Liable For What Defenses or Exceptions
Possessor of an animal or For the damage the animal may cause • Force majeure
whoever makes use of them • Fault of the person who
even if the animal is lost or
suffered damage
escaped
Owner of Motor Vehicle Motor vehicle mishaps • Solidary liability only if the
owner was in the vehicle and if
he could have prevented it thru
due diligence
• If not in vehicle, apply Art. 2180
for his liability as employer
Manufacturers and Death and injuries caused by any Absence of contractual relation
processors of foodstuffs, noxious or harmful substances used not a defense
drinks, toilet articles and
similar goods
Defendant in possession of Death or injury results from such Possession or use thereof is
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dangerous weapons/ possession indispensable in his occupation or


substances such as firearms business
and poison
Provinces, Cities and The death or injuries suffered by any The defective public work is not
Municipalities person by reason of the defective under the LGU’s control or
condition of roads, streets, bridges, supervision
public buildings, and other public works
Proprietor of building/ (a) Total or partial collapse of building Responsibility for collapse should
structure or structure if due to lack of be due to the lack of necessary
necessary repairs repairs
(b) Explosion of machinery which has
not been taken cared of with due
diligence, and the inflammation of
explosive substances which have
not been kept in a safe and
adequate place
(c) By excessive smoke, which may be
harmful to persons or property
(d) By falling of trees situated at or
near highways or lanes, if not
caused by force majeure
(e) By emanations from tubes, canals,
sewers or deposits of infectious
matter, constructed without
precautions suitable to the place
Engineer or Architect If within 15 years from completion of the Action not brought within 10 years
structure, the same should collapse by from collapse
reason of:
(a) Defects in the plans or
specifications; or
(b) Defects in the ground.

If within the same period, the edifice


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

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CIVIL LAW
DAMAGES

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I. Damages C. TYPES OF DAMAGES

A. DEFINITION Art. 2197. Damages may be:


Damages may be defined as the pecuniary (1) Actual or compensatory;
compensation, recompense, or satisfaction (2) Moral;
for an injury sustained, or as otherwise (3) Nominal;
expressed, the pecuniary consequences, (4) Temperate or moderate;
which the law imposes for the breach of some (5) Liquidated; or
duty or the violation of some right [People v.
Ballesteros, G.R. No. 120921]. (6) Exemplary or corrective.
According to Purpose
The recompense or compensation awarded (1) For adequate reparation of the injury
for the damage suffered [Custodio v CA, G.R.
a) Compensatory damages
No. 116100].
(reparation of pecuniary losses)
B. WHEN ALLOWED b) Moral (reparation for non-pecuniary
losses: injury to feelings; physical
The obligation to repair the damages exists
whether done intentionally or negligently and suffering, etc.)
whether or not punishable by law [Occena v (2) For vindication of the right violated:
Icamina, G.R. No. 82146 (1990)] a) Nominal damages
(3) For less than adequate reparation:
The mere fact that the plaintiff suffered a) Moderate
losses does not give rise to a right to recover (4) For deterring future violations:
damages. To warrant the recovery of
damages, there must be both a right of action a) Exemplary or corrective
for a legal wrong inflicted by the defendant,
and damage resulting to the plaintiff According to manner of determination
therefrom. Wrong without damage, or (1) Conventional (or liquidated)
damage without wrong, does not constitute a (2) Non-conventional, which may either be:
cause of action, since damages are merely (a) Statutory (fixed by law, as in
part of the remedy allowed for the injury moratory interest)
caused by a breach or wrong [Custodio v CA, (b) Judicial (determined by the courts)
G.R. No. 116100].

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 result of the wrongful act or omission
results from the injury. Damages are the asserted as the foundation of liability, and
recompense or compensation awarded for include those which follow as a conclusion of
the damage suffered [Custodio v CA, supra]. law from the statement of the facts of the
injury.
Elements for recovery of damages
Special damages
(1) Right of action
Damages that arise from the special
(2) For a wrong inflicted by the defendant circumstance of the case, which, if properly
(3) Damage resulting to the plaintiff pleaded, may be added to the general
damages which the law presumes or implies
from the mere invasion of the plaintiff’s rights.
Special damages are the natural, but NOT
the necessary result of an injury. These are
not implied by law.

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obtainable. The burden of proof of the


II. Actual & damage suffered is, consequently, imposed
Compensatory on the party claiming the same, who should
adduce the best evidence available in support
Damages thereof… In the absence of corroborative
evidence, it has been held that self-serving
statements of account are not sufficient basis
Compensatory damages are damages in
for an award of actual damages [Oceaneering
satisfaction of, or in recompense for, loss or
Contractors v Baretto, G.R. No. 184215 (2011)].
injury sustained. The phrase “actual damages”
is sometimes used as synonymous with
Actual or compensatory damages cannot be
compensatory damages.
presumed, but must be proven with a
reasonable degree of certainty [MCC
A. REQUISITES Industrial Sales Corp. v Ssangyong Corp., G.R.
To seek recovery of actual damages, it is No. 170633 (2007)].
necessary to prove the actual amount of loss
with a reasonable degree of certainty, Damages must be proved with reasonable
premised upon competent proof and on the accuracy, even when not denied [Valencia vs.
best evidence obtainable [Asilo, Jr. v. People Tantoco, G.R. No. L-7267 (1956)].
and Sps. Bombasi, G.R. No. 159017-18 (2011)].
Degree of certainty required as to: fact, cause
B. WHEN IS A PERSON ENTITLED? and amount of damages
Damages are not rendered uncertain just
(1) When there is a pecuniary loss suffered by because they cannot be calculated with
him; absolute exactness or because the
(2) When he has alleged and prayed for such consequences of the wrong are not precisely
relief [Manchester Dev’t Corp v. CA, G.R. definite in pecuniary amount.
No. L-75919 (1987)];
(3) When he has duly proved it; The principle, which will disallow recovery of
damages when their existence rests solely on
(4) When provided by law or by stipulation.
speculation, applies both to the fact and
cause of damages.
No proof of pecuniary loss is necessary for: (1) The requirement of certainty does not
moral, nominal, temperate, liquidated or
prevent the drawing of reasonable
exemplary damages. The assessment of such
damages is discretionary upon the court, inferences from the fact and
except liquidated ones. (Art. 2216) circumstance in evidence.
(2) Events which occur after the wrong
Alleged and proved with certainty complained of may serve to render the
Art. 2199. Except as provided by law or by damage sufficiently certain.
stipulation, one is entitled to an adequate (3) The damages must be susceptible of
compensation only for such pecuniary loss
ascertainment in some manner other
suffered by him as he has duly proved. Such
compensation is referred to as actual or than by mere speculation, conjecture or
compensatory damages. surmise and by reference to some fairly
definite standard, such as market value,
The damages must be proven by competent established experience or direct inference
evidence (admissible or probative) from known circumstances.
There must be pleading and proof of actual
damages suffered for the same to be Where, however, it is reasonably certain that
recovered. In addition to the fact that the injury consisting of failure to realize otherwise
amount of loss must be capable of proof, it reasonably expected profits had been
must also be actually proven with a incurred, uncertainty as to the precise
reasonable degree of certainty, premised amount of such unrealized profits will not
upon competent proof or the best evidence
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prevent recovery or the award of damages -If the obligor acted with
[Talisay-Silay v. Associacion, G.R. No. 91852 FRAUD, BAD FAITH,
(1995)]. MALICE or WANTON
ATTITUDE, he shall be
Components responsible for all
Actual damage covers the following: damages which may be
(1) Value of loss; unrealized profit reasonably attributed to
(2) Attorney’s fees and expenses of litigation the breach.
(3) Interest Liability extends to all
damages which are the
Loss Covered: natural and probable
In General consequence of the act
Art. 2200. Indemnification for damages shall Crimes or omission complained
comprehend not only the value of the loss Art. and of
suffered, but also that of the profits which 2202 Quasi-
the obligee failed to obtain. delicts WON the damage was
foreseen or could have
been reasonably
In other words, indemnification for damages
foreseen by the
is not limited to damnum emergens (actual
defendant is irrelevant
loss) but extends to lucrum cessans (a cession
of gain or amount of profit lost).
C.1 IN CONTRACTS AND QUASI-
The award of damages for loss of earning CONTRACTS
capacity is concerned with the determination Art. 2201. In contracts and quasi-contracts,
of losses or damages sustained by the the damages for which the obligor who acted
[plaintiffs], as dependents and intestate heirs in good faith is liable shall be those that are
of the deceased, and that said damages the natural and probable consequences of
consist, not of the full amount of his earnings, the breach of the obligation, and which the
but of the support they received or would parties have foreseen or could have
have received from him had he not died in reasonably foreseen at the time the
consequence of negligence of [defendant’s] obligation was constituted.
agent… Only net earnings, and not gross
earnings are to be considered. That is, the In case of fraud, bad faith, malice or wanton
total of the earnings less expenses necessary attitude, the obligor shall be responsible for
in the creation of such earnings or income all damages which may be reasonably
and less living and other incidental expenses attributed to the non-performance of the
[Candano Shipping Lines, Inc. v Sugata-on, obligation.
G.R. No. 163212 (2007)].
Art. 2214. In quasi delicts, the contributory
C. EXTENT OR SCOPE OF ACTUAL negligence of the plaintiff shall reduce the
DAMAGES damages that he may recover.
Source Extent of Liability
Art. 2215. In contracts, quasi-contracts, and
-If the obligor acted in
quasi-delicts, the court may equitably
GOOD FAITH, he shall
mitigate the damages under circumstances
be liable for natural and
other than the case referred to in the
probable consequences
Contracts preceding article, as in the following
of the breach, which the
Art. and instances:
parties have foreseen or
2201 Quasi- (1) That the plaintiff himself has
could have reasonably
contracts contravened the terms of the contract;
foreseen at the time the
obligation was (2) That the plaintiff has derived some
constituted. benefit as a result of the contract;
(3) In cases where exemplary damages are
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to be awarded, that the defendant acted aggravating or mitigating circumstances


upon the advice of counsel; present.
(4) That the loss would have resulted in any
Interest, as part of damages, may be
event;
adjudicated in a proper case, in the Court’s
(5) That since the filing of the action, the discretion.
defendant has done his best to lessen
the plaintiff's loss or injury. Contributory negligence of the plaintiff, in
case of quasi-delicts, shall reduce the
The damages recoverable upon breach of damages to which he may be entitled.
contract are, primarily, the ordinary, natural However, in case of crimes, there is no
and in a sense the necessary damages mitigation for contributory negligence of the
resulting from the breach. Other damages, plaintiff.
known as special damages, are recoverable
where it appears that the particular The indemnity authorized by our criminal law
conditions which made such damages a as civil liability ex delicto for the offended
probable consequence of the breach were party, in the amount authorized by the
known to the delinquent party at the time the prevailing judicial policy and aside from other
contract was made [Daywalt vs. Recoletos et proven actual damages, is itself equivalent to
al., G.R. No. L-13505 (1919)]. actual or compensatory damages in civil law.
The principal consideration for the award of
Bad faith does not simply connote bad damages is the penalty provided by law or
judgment or negligence; it imports a imposable for the offense because of its
dishonest purpose or some moral obliquity heinousness, not the public penalty actually
and conscious doing of wrong; it partakes of imposed on the offender… Hence,
the nature of fraud…BPI-FB acted out of the notwithstanding the fact that the imposable
impetus of self-protection and not out of public penalty against the offender should be
malevolence or ill will. BPI-FB was not in the lowered due to his minority, there is no
corrupt state of mind contemplated in Article justifiable ground to depart from the
2201 and should not be held liable for all jurisprudential trend in the award of
damages now being imputed to it for its damages in the case of qualified rape,
breach of obligation [BPI Family Bank v. considering the compensatory nature of the
Franco, G.R. No. 123498 (2007)]. award of civil indemnity and moral damages
[People v Sarcia, G.R. No. 169641 (2009)].
That there was fraud or bad faith on the part
of respondent airline when it did not allow EARNING CAPACITY, BUSINESS STANDING
petitioners to board their flight in spite of Art. 2205. Damages may be recovered:
confirmed tickets cannot be disputed. (1) For loss or impairment of earning
Overbooking amounts to bad faith, entitling capacity in cases of temporary or
the passengers concerned to an award of permanent personal injury;
moral damages [Spouses Zalamea v. CA, G.R. (2) For injury to the plaintiff's business
No. 104235 (1993)].
standing or commercial credit.
C.2 IN CRIMES AND QUASI-DELICTS
Loss or Impairment of Earning Capacity
Art. 2202. In crimes and quasi delicts, the The Court did not award actual damages
defendant shall be liable for all damages because it was found that plaintiff’s
which are the natural and probable employment was lost even before the injury
consequences of the act or omission upon which she was suing. The Court
complained of. It is not necessary that such equated loss of employment with loss of
damages have been foreseen or could have earning capacity [Gatchalian v. Delim, G.R. No.
reasonably been foreseen by the defendant. 56487 (1991)].

In case of crimes, damages are to be The plaintiff need not be actually engaged in
increased or decreased according to gainful employment to recover damages due
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to loss or impairment of earning capacity. In (1) The defendant shall be liable for the loss
determining the amount of damages to be of the earning capacity of the deceased,
awarded, the Supreme Court considered the and the indemnity shall be paid to the
plaintiff’s age, probable life expectancy, the
heirs of the latter; such indemnity shall in
state of his health, and his mental and
physical condition before the accident… every case be assessed and awarded by
Taking into account [the plaintiff’s] the court, unless the deceased on
outstanding abilities, he would have enjoyed account of permanent physical disability
a successful professional career in banking not caused by the defendant, had no
[Mercury Drug v Huang, G.R. No. 172122 earning capacity at the time of his death;
(2007)]. (2) If the deceased was obliged to give
support according to the provisions of
INJURY TO BUSINESS STANDING OR
COMMERCIAL CREDIT article 291, the recipient who is not an
Loss of goodwill should be proven with the heir called to the decedent's inheritance
same standard of proof as other by the law of testate or intestate
compensatory damages [Tanay Recreation succession, may demand support from
Center v. Fausto, G.R. No. 140182 (2005)]. the person causing the death, for a
period not exceeding five years, the exact
Formula for the net earning capacity
Net earning capacity = Life expectancy * duration to be fixed by the court;
(Gross annual income – Reasonable living (3) The spouse, legitimate and illegitimate
expenses) [People vs. Aringue, G.R. No. descendants and ascendants of the
116487 (1997)]. deceased may demand moral damages
for mental anguish by reason of the
Where: death of the deceased.
Life expectancy = 2/3 * (80 – age of victim at
the time of death)
Civil / Death Indemnity :
Mere commission of the crime shall entitle
As a rule, documentary evidence should be
the heirs of the deceased to such damages.
presented to substantiate the claim for loss of
But there has been inconsistency as to
earning capacity [Tan, et al. vs. OMC Carriers,
whether indemnity is 50,000 or 75,000
Inc., G.R. No. 190521 (2011)].
[CASIS, Damages].
By way of exception, damages for loss of
As to the loss of earning capacity:
earning capacity may be awarded despite the
General Rule:
absence of documentary evidence when: (1)
Shall be awarded in every case, and that
the deceased is self-employed and earning
claimant shall present documentary evidence
less than the minimum wage under current
to substantiate claim for damages.
labor laws, in which case, judicial notice may
be taken of the fact that in the deceased's
Exceptions:
line of work, no documentary evidence is
available; or (2) the deceased is employed as (1) If the deceased was self-employed and
a daily wage worker earning less than the earning less than the minimum wage; or
minimum wage under current labor laws. (2) The deceased was a daily wage worker
earning less than the minimum wage.
DEATH BY CRIME OR QUASI-DELICT
Art. 2206. The amount of damages for death Additional Exception:
caused by a crime or quasi-delict shall be at Testimonial evidence suffices to establish a
least three thousand pesos, even though basis for which the court can make a fair and
there may have been mitigating reasonable estimate of the loss of earning
circumstances. capacity [Pleyto v. Lomboy, G.R. No. 148737
(2004)]
In addition:

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Note: Such an exception to documentary demandable claim;


proof requirement only exists as to the loss of (6) In actions for legal support;
earning capacity. (7) In actions for the recovery of wages of
household helpers, laborers and skilled
C.3 IN RAPE CASES
workers;
No statutory basis but in several cases the (8) In actions for indemnity under workmen's
court awards compensatory damages to
compensation and employer's liability
victims of rape.
laws;
Civil indemnity, in the nature of actual and (9) In a separate civil action to recover civil
compensatory damages, is mandatory upon liability arising from a crime;
the finding of the fact of rape. Awarded Php. (10) When at least double judicial costs are
50,000 for simple rape [People v. Astrologo, awarded;
G.R. No. 169873 (2007)]. (11) In any other case where the court deems
it just and equitable that attorney's fees
When imposable penalty is death, then the
civil indemnity must be Php. 75,000 [People and expenses of litigation should be
vs. Apattad, G.R. No. 193188 (2011)]. recovered.

The SC held that it could not be proven that In all cases, the attorney's fees and expenses
the age of the victim was such that it would of litigation must be reasonable.
support a penalty of death. Thus, it imposed
reclusion perpetua instead. But SC said that General Rule
this should not affect the civil liability to be Attorney’s fees and costs of litigation are
imposed, and maintained the same at Php. recoverable IF stipulated.
75,000 [People v. Bartolini, G.R. No. 179498
(2010)]. Exceptions
If there is no stipulation, they are recoverable
In cases of rape with homicide, civil indemnity only in the following cases:
in the amount of Php. 100,000 should be (1) By reason of malice or bad faith
awarded to the heirs of the victim [People vs. (a) When exemplary damages are
Pascual, G.R. No. 172326 (2009)]. awarded
(b) In case of a clearly unfounded civil
D. ATTORNEY’S FEES AND EXPENSES
action
OF LITIGATION
(c) Where defendant acted in gross and
Art. 2208. In the absence of stipulation, evident bad faith
attorney's fees and expenses of litigation, (d) When at least double judicial costs
other than judicial costs, cannot be
are awarded
recovered, except:
(1) When exemplary damages are awarded; (1) By reason of plaintiff’s indigence in
(2) When the defendant's act or omission (a) Actions for legal support
has compelled the plaintiff to litigate (b) Actions for recovery of wages of
with third persons or to incur expenses to laborers, etc.
protect his interest; (c) Actions for workmen’s
(3) In criminal cases of malicious compensation
prosecution against the plaintiff; (2) By reason of crimes in
(4) In case of a clearly unfounded civil action (a) Criminal cases of malicious
or proceeding against the plaintiff; prosecution
(5) Where the defendant acted in gross and (b) Separate actions to recover civil
evident bad faith in refusing to satisfy the liability arising from crime
plaintiff's plainly valid, just and (3) By reason of equity

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(a) Where the defendant’s act annum.


compelled plaintiff to litigate with
third persons Art. 2210. Interest may, in the discretion of
(b) Where the Court deems it just and the court, be allowed upon damages
awarded for breach of contract.
equitable
Art. 2211. In crimes and quasi-delicts, interest
Note: In all cases, attorney’s fees and costs of
as a part of the damages may, in a proper
litigation must be reasonable.
case, be adjudicated in the discretion of the
court.
Even if expressly stipulated, attorney’s fees
are subject to control by the Courts.
Art. 2212. Interest due shall earn legal
Attorney’s fees in CC 2208 is an award made
interest from the time it is judicially
in favor of the litigant, not of his counsel, and
demanded, although the obligation may be
the litigant, not his counsel, is the judgment
silent upon this point.
creditor who may enforce the judgment for
attorney's fees by execution [Quirante v. IAC,
G.R. No. 73886 (1989)]. Art. 2213. Interest cannot be recovered upon
unliquidated claims or damages, except
Attorney's fees cannot be recovered except in when the demand can be established with
cases provided for in CC 2208 [MERALCO v. reasonable certainty.
Ramoy, G.R. No. 158911 (2008)].
Interest accrues when:
Attorney’s fees and expenses of litigation are (1) The obligation consists in the payment of
recoverable only in the concept of actual a sum of money
damages, not as moral damages nor judicial (2) Debtor incurs in delay
costs. Hence, such must be specifically (3) There being no stipulation to the contrary
prayed for…and may not be deemed
incorporated within a general prayer for No interest may be recovered on unliquidated
"such other relief and remedy as this court (not fixed in amount) claims or damages,
may deem just and equitable [Briones v except when the demand can be established
Macabagdal, G.R. No. 150666 (2010)]." with reasonable certainty at the Court’s
discretion.
For CC 2208 (2), an adverse decision does
not ipso facto justify an award of attorney’s Compounding of interest
fees to the winning party. Even when a Interest due shall earn legal interest from the
claimant is compelled to litigate with third time it is judicially demanded, although the
persons or to incur expenses to protect his obligation may be silent on the point.
rights, still attorney’s fees may not be Note that interest due can earn only at 6%,
awarded where no sufficient showing of bad whether the rate of interest of the principal is
faith could be reflected in a party’s greater than 6%.
persistence in a case other than an erroneous
conviction of the righteousness of his cause Determination of legal interest
[Bank of America v. Philippine Racing Club, (1) When an obligation, regardless of its
G.R. No. 150228 (2009)]. source (i.e., law, contracts, quasi-
contracts, delicts or quasi-delicts) is
E. INTEREST
breached, the contravenor can be held
Art. 2209. If the obligation consists in the liable for damages.
payment of a sum of money, and the debtor (2) With regard particularly to an AWARD
incurs in delay, the indemnity for damages,
OF INTEREST in the concept of actual
there being no stipulation to the contrary,
shall be the payment of the interest agreed and compensatory damages, the RATE
upon, and in the absence of stipulation, the of interest, as well as the ACCRUAL
legal interest, which is six per cent per thereof, is imposed, as follows [Eastern
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Shipping Lines v. CA, (1994) as modified BASE RATE ACCRUAL


by Nakar v. Gallery Frames, G.R. No. only FROM
189871 (2013)]: THE DATE
THE
BASE RATE ACCRUAL JUDGMENT
(a)That To be OF THE
(a) When the
which computed COURT IS
obligation is MADE (at
breached, and it may from default,
which time
have i.e., from
consists in the the
been JUDICIAL or
PAYMENT OF A stipulate EXTRAJUDICI quantificatio
SUM OF n of damages
d in AL demand
MONEY, i.e., a writing. under and may be
(b) In the subject to the deemed to
loan or
absence provisions of have been
forbearance of reasonably
money, the of Article 1169
ascertained).
stipulati of the Civil
interest due (d) When the 6% per From
on, the Code.
should be- rate of JUDGMENT of annum FINALITY
interest the court UNTIL ITS
shall be SATISFACTIO
awarding a sum
6% per N, this period
of money being
annum becomes final
(legal deemed to be
and executory, an equivalent
interest)
whether or not to a
(b) Furtherm Legal From the
the case consists forbearance
ore, the interest time it is
of credit.
INTEREST DUE JUDICIALLY in the payment
demanded. of a sum of
shall itself earn
(c) When an 6% per If claim or money
obligation, NOT annum. damages are
LIQUIDATED, Note:
constituting a The new rate of legal interest (6%) in Nacar
from default,
loan or does not apply to judgments that have
i.e., from
forbearance of judicial or become final and executory prior to July 1,
money, is extrajudicial 2013.
breached, an demand.
interest on the (Art. 1169, Start of Delay
AMOUNT OF Civil Code) (1) Extrajudicial: Demand letter
DAMAGES (2) Judicial: Filing of complaint
If (3) Award
awarded may be
UNLIQUIDAT
imposed at the ED, from the Duty to Minimize
discretion of the time the Art. 2203. The party suffering loss or injury
court. demand can must exercise the diligence of a good father
be of a family to minimize the damages
The actual base established resulting from the act or omission in
for the with question.
computation of reasonable
legal interest certainty. Article 2203 of the Civil Code exhorts parties
shall be on the Hence, the suffering from loss or injury to exercise the
amount finally interest shall diligence of a good father of a family to
adjudged. begin to run minimize the damages resulting from the act
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or omission in question. One who is injured


then by the wrongful or negligent act of
another should exercise reasonable care and III. Moral Damages
diligence to minimize the resulting damage.
Anyway, he can recover from the wrongdoer Art. 2217. Moral damages include physical
money lost in reasonable efforts to preserve suffering, mental anguish, fright, serious
the property injured and for injuries incurred anxiety, besmirched reputation, wounded
in attempting to prevent damage to it [Lim feelings, moral shock, social humiliation, and
and Gunnaban vs. CA, G.R. No. 125817 similar injury. Though incapable of pecuniary
(2002)]. computation, moral damages may be
recovered if they are the proximate result of
Burden of Proof the defendant's wrongful act or omission.
The DEFENDANT has the burden of proof to
establish that the victim, by the exercise of Art. 2218. In the adjudication of moral
the diligence of a good father of a family, damages, the sentimental value of property,
could have mitigated the damages. In the real or personal, may be considered.
absence of such proof, the amount of
damages cannot be reduced. Moral damages are emphatically not
intended to enrich a complainant at the
Note: expense of the defendant. Its award is aimed
The victim is required only to take such steps at the restoration, within the limits of the
as an ordinary prudent man would possible, of the spiritual status quo ante, and
reasonably adopt for his own interest. it must be proportional to the suffering
inflicted [Visayan Sawmill v. CA, G.R. No.
83851 (1993)].

Mental suffering means distress or serious


pain as distinguished from annoyance, regret
or vexation [Bagumbayan Corp. v. IAC, G.R.
No. L-66274 (1984)].

Mental anguish is intense mental suffering.


Generally, damages for mental anguish are
limited to cases in which there has been a
personal physical injury or where the
defendant willfully, wantonly, recklessly, or
intentionally caused the mental anguish.

A. WHEN AWARDED
Awarded when injury consists of:
(1) Physical suffering
(2) Besmirched reputation
(3) Mental anguish
(4) Fright
(5) Moral shock
(6) Wounded feelings
(7) Social humiliation
(8) Serious anxiety
(9) Similar injury

Though incapable of pecuniary computation


If such is the proximate result of defendant’s
act or omission.
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illegal or arbitrary detention, illegal


A.3 REQUISITES FOR AWARDING MORAL arrest, illegal search, or defamation.
DAMAGES (6) Malicious prosecution can also give rise
The conditions for awarding moral damages to a claim for moral damages. The term
are [Sulpicio Lines v. Curso, G.R. No. 157009 "analogous cases," referred to in Article
(2010)]: 2219, following the ejusdem generis rule,
(a) There must be an injury, whether must be held similar to those expressly
physical, mental, or psychological, enumerated by the law.
clearly substantiated by the claimant; (7) Although the institution of a clearly
(b) There must be a culpable act or omission unfounded civil suit can at times be a
factually established; legal justification for an award of
(c) The wrongful act or omission of the attorney's fees, such filing, however, has
defendant must be the proximate cause almost invariably been held not to be a
of the injury sustained by the claimant; ground for an award of moral damages.
and [Expertravel& Tours vs. CA., G.R. No.
(d) The award of damages is predicated on 130030 (1999)].
any of the cases stated in Article 2219 of (8) The burden rests on the person claiming
the Civil Code. moral damages to show convincing
evidence for good faith is presumed. In a
A.4 GENERAL PRINCIPLES OF RECOVERY
case involving simple negligence, moral
(1) Moral damages must somehow be damages cannot be recovered.
proportional to the suffering inflicted. [Villanueva v. Salvador (2006)].
(2) In culpa contractual or breach of contract, (9) Failure to use the precise legal terms or
moral damages may be recovered when "sacramental phrases" of "mental
the defendant acted in bad faith or was anguish, fright, serious anxiety, wounded
guilty of gross negligence (amounting to feelings or moral shock" does not justify
bad faith) or in wanton disregard of his the denial of the claim for damages. It is
contractual obligation and, exceptionally, sufficient that these exact terms have
when the act of breach of contract itself been pleaded in the complaint and
is constitutive of tort resulting in physical evidence has been adduced [Miranda-
injuries. Ribaya v. Bautista (1980)].
(3) By special rule in Article 1764, in relation (10) Even if the allegations regarding the
to Article 2206, moral damages may also amount of damages in the complaint are
be awarded in case the death of a not specifically denied in the answer,
passenger results from a breach of such damages are not deemed admitted.
carriage. [Raagas, et al. v. Traya et al (1968)].
(4) In culpa aquiliana or quasi-delict, (11) An appeal in a criminal case opens the
(a) when an act or omission causes whole case for review and this 'includes
physical injuries, or the review of the penalty, indemnity and
(b) where the defendant is guilty of damages’. Even if the offended party had
intentional tort, moral damages not appealed from said award, and the
may aptly be recovered. This rule only party who sought a review of the
also applies to contracts when decision of said court was the accused,
breached by tort. the court can increase damages awarded.
(5) In culpa criminal, moral damages could [Sumalpong v. CA (1997)].
be lawfully due when the accused is (12) It can only be awarded to natural persons.
found guilty of physical injuries, The award of moral damages cannot be
lascivious acts, adultery or concubinage, granted in favor of a corporation because,
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being an artificial person and having


existence only in legal contemplation, it has Suggested Answer:
no feelings, no emotions, no senses, It cannot, (a) There is no legal basis to Ortillo’s claim
therefore, experience physical suffering and for moral damages. It does not fall
mental anguish, which can be experienced under the coverage of Article 2219 of the
only by one having a nervous system. The
New Civil Code.
statement in People vs. Manero and
Mambulao Lumber Co. vs. PNB that a (b) Ortillo is entitled to attorney’s fees
corporation may recover moral damages if it because Fabricato’s complaint is a case
"has a good reputation that is debased, of malicious prosecution or a clearly
resulting in social humiliation" is an obiter unfounded civil action (Art. 2208 [4] and
dictum [ABS-CBN v. CA, G.R. No. 128690 [11], NCC).
(1999)].
B. WHEN RECOVERABLE
While it is true that besmirched reputation is
included in moral damages, it cannot cause Art. 2219. Moral damages may be recovered
mental anguish to a corporation, unlike in the in the following and analogous cases:
case of a natural person, for a corporation (1) A criminal offense resulting in physical
has no reputation in the sense that an injuries;
individual has, and besides, it is inherently (2) Quasi-delicts causing physical injuries;
impossible for a corporation to suffer mental
(3) Seduction, abduction, rape, or other
anguish [NAPOCOR v. Philipp Brothers
(2001)]. lascivious acts;
(4) Adultery or concubinage;
QUESTION (5) Illegal or arbitrary detention or arrest;
Ortillo contracts Fabricato, Inc. to supply and (6) Illegal search;
install tile materials in a building he is (7) Libel, slander or any other form of
donating to his province. Ortillo pays 50% of defamation;
the contract price as per agreement. It is
(8) Malicious prosecution;
also agreed that the balance would be
payable periodically after every 10% (9) Acts mentioned in article 309;
performance until completed. After (10) Acts and actions referred to in articles 21,
performing about 93% of the contract, for 26, 27, 28, 29, 30, 32, 34, and 35.
which it has been paid an additional 40% as
per agreement, Fabricato, Inc. did not The parents of the female seduced,
complete the project due to its sudden abducted, raped, or abused, referred to in
cessation of operations. Instead, Fabricato, No. 3 of this article, may also recover moral
Inc. demands payment of the last 10% of the damages.
contract despite its non-completion of the
project. Ortillo refuses to pay, invoking the The spouse, descendants, ascendants, and
stipulation that payment of the last amount brothers and sisters may bring the action
of 10% shall be upon completion. Fabricato, mentioned in No. 9 of t his article, in the
Inc. brings suit for the entire 10% plus order named.
damages. Ortillo counters with claims for (a)
moral damages for Fabricato, Inc.’s B.1 IN CRIMINAL OFFENSE RESULTING IN
unfounded suit which has damaged his PHYSICAL INJURIES
reputation as a philanthropist and respected
businessman in his community, and (b) Under paragraph (1), Article 2219 of the Civil
attorney’s fees. Code, moral damages may be recovered in a
criminal offense resulting in physical injuries.
Does Ortillo have a legal basis for his claim In its generic sense, "physical injuries"
for moral damages? includes death [People v. Villaver (2001)].
How about his claim for attorney’s fees,
having hired a lawyer to defend him? In a case where the father of a family was
stabbed to death, the SC said that “a violent
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death invariably and necessarily brings about


emotional pain and anguish on the part of Note: Recovery may be had by the offended
the victim’s family… For this reason, moral party and also by her parents.
damages must be awarded even in the
absence of any allegation and proof of the B.4 IN ILLEGAL OR ARBITRARY
heirs’ emotional suffering [Arcona v CA, G.R. DETENTION OR ARREST
No. 134784 (2002)].”
Since the crime committed in this case is
kidnapping and failure to return a minor
B.2 IN QUASI-DELICTS CAUSING PHYSICAL
under Article 270 of the Revised Penal Code,
INJURIES
the same is clearly analogous to illegal and
In culpa aquiliana, or quasi-delict, moral arbitrary detention or arrest, thereby
damages may be recovered (a) when an act justifying the award of moral damages
or omission causes physical injuries, or (b) [People v. Bernardo (2002)].
where the defendant is guilty of intentional
tort. The SC held that an employer that is B.5 IN CASE OF MALICIOUS PROSECUTION
vicariously liable with its employee-driver
As a rule, no moral damages is imposed for
may also be held liable for moral damages to
litigation, because the law could not have
the injured plaintiff [B.F. Metal v. Lomotan,
meant to impose a penalty on the right to
G.R. No. 170813 (2008)].
litigate. A person's right to litigate, as a rule,
should not be penalized. This right, however,
B.3 IN SEDUCTION, ABDUCTION, RAPE
must be exercised in good faith. Absence of
AND OTHER LASCIVIOUS ACTS
good faith in the present case is shown by the
Anent the award of damages, civil indemnity fact that petitioner clearly has no cause of
ex delicto is mandatory upon finding of the action against respondents but it recklessly
fact of rape while moral damages is awarded filed suit anyway and wantonly pursued
upon such finding without need of further pointless appeals, thereby causing the latter
proof because it is assumed that a rape victim to spend valuable time, money and effort in
has actually suffered moral injuries entitling unnecessarily defending themselves,
the victim to such award. If without factual incurring damages in the process [Industrial
and legal bases, no award of exemplary Insurance v. Bondad, G.R. No. 136722 (2000)].
damages should be allowed [People v.
Calongui (2006)]. Moral damages cannot be recovered from a
person who has filed a complaint against
In a case where the offender-father was another in good faith, or without malice or
convicted of simple rape instead of qualified bad faith. If damage results from the filing of
rape due to the prosecution’s failure to the complaint, it is damnum absque injuria
specifically allege the age and minority of the [Mijares v. CA (1997)].
victim-daughter, but such was nonetheless
established during the trial, the award of civil The adverse result of an action does not per
indemnity and moral damages in a conviction se make the act wrongful and subject the
for simple rape should equal the award of actor to the payment of moral damages. The
civil indemnity and moral damages in law could not have meant to impose a penalty
convictions for qualified rape. Truly, [the on the right to litigate; such right is so
victim’s] moral suffering is just as great as precious that moral damages may not be
when her father who raped her is convicted charged on those who may exercise it
for qualified rape as when he is convicted erroneously [Barreto vs. Arevalo (1956)].
only for simple rape due to a technicality
[People v. Bartolini, supra]. B.6 IN ACTS REFERRED TO IN ARTS. 21,
26, 27, 28, 29, 32, 34 &35, NCC
Where there are multiple counts of rape and
Art. 21. Any person who wilfully causes loss or
other lascivious acts, the SC awarded moral
injury to another in a manner that is contrary
damages for each count of lascivious acts and
to morals, good customs or public policy
each count of rape [People v. Abadies (2002)].
shall compensate the latter for the damage.
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of the "abuse of right" doctrine [Concepcion v.


Art. 26. Every person shall respect the CA, supra].
dignity, personality, privacy and peace of Art. 28. Unfair competition in agricultural,
mind of his neighbors and other persons. The commercial or industrial enterprises or in
following and similar acts, though they may labor through the use of force, intimidation,
not constitute a criminal offense, shall deceit, machination or any other unjust,
produce a cause of action for damages, oppressive or highhanded method shall give
prevention and other relief: rise to a right of action by the person who
(1) Prying into the privacy of another's thereby suffers damage.
residence:
(2) Meddling with or disturbing the private Art. 29. When the accused in a criminal
life or family relations of another; prosecution is acquitted on the ground that
his guilt has not been proved beyond
(3) Intriguing to cause another to be
reasonable doubt, a civil action for damages
alienated from his friends; for the same act or omission may be
(4) Vexing or humiliating another on instituted. Such action requires only a
account of his religious beliefs, lowly preponderance of evidence. Upon motion of
station in life, place of birth, physical the defendant, the court may require the
defect, or other personal condition. plaintiff to file a bond to answer for damages
in case the complaint should be found to be
malicious.
B.7 VIOLATION OF HUMAN DIGNITY
The law seeks to protect a person from being If in a criminal case the judgment of acquittal
unjustly humiliated. Using this provision, the is based upon reasonable doubt, the court
SC awarded moral damages to the plaintiff, a shall so declare. In the absence of any
married man, against the defendant, who declaration to that effect, it may be inferred
confronted the plaintiff face-to-face, invading from the text of the decision whether or not
the latter’s privacy, to hurl defamatory words the acquittal is due to that ground.
at him in the presence of his wife and children,
neighbors and friends, accusing him of Art. 32. Any public officer or employee, or any
having an adulterous relationship with private individual, who directly or indirectly
another woman [Concepcion v. CA (1998)]. obstructs, defeats, violates or in any manner
impedes or impairs any of the following
Art. 27. Any person suffering material or rights and liberties of another person shall
moral loss because a public servant or be liable to the latter for damages:
employee refuses or neglects, without just (1) Freedom of religion;
cause, to perform his official duty may file an (2) Freedom of speech;
action for damages and other relief against (3) Freedom to write for the press or to
the latter, without prejudice to any
disciplinary administrative action that may maintain a periodical publication;
be taken. (4) Freedom from arbitrary or illegal
detention;
B.8 REFUSAL OR NEGLECT OF DUTY (5) Freedom of suffrage;
Under CC 27, in relation to CC 2219 and 2217, (6) The right against deprivation of property
a public officer may be liable for moral without due process of law;
damages for as long as the moral damages (7) The right to a just compensation when
suffered by [the plaintiff] were the proximate private property is taken for public use;
result of [defendant’s] refusal to perform an (8) The right to the equal protection of the
official duty or neglect in the performance laws;
thereof. In fact, under Articles 19 and 27 of
(9) The right to be secure in one's person,
the Civil Code, a public official may be made
to pay damages for performing a perfectly house, papers, and effects against
legal act, albeit with bad faith or in violation unreasonable searches and seizures;
(2) The liberty of abode and of changing the
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same; adjudicated.
(3) The privacy of communication and
correspondence; The responsibility herein set forth is not
demandable from a judge unless his act or
(4) The right to become a member of
omission constitutes a violation of the Penal
associations or societies for purposes Code or other penal statute.
not contrary to law;
(5) The right to take part in a peaceable B.9 VIOLATION OF CIVIL AND POLITICAL
assembly to petition the government for RIGHTS
redress of grievances; The purpose of [CC 32] is to provide a
(6) The right to be free from involuntary sanction to the deeply cherished rights and
servitude in any form; freedoms enshrined in the Constitution.
(7) The right of the accused against Under [CC 32], it is not necessary that the
excessive bail; public officer acted with malice or bad
(8) The right of the accused to be heard by faith. To be liable, it is enough that there was
a violation of the constitutional rights of
himself and counsel, to be informed of petitioner, even on the pretext of justifiable
the nature and cause of the accusation motives or good faith in the performance of
against him, to have a speedy and public one's duties [Cojuangco v. CA, (1999)].
trial, to meet the witnesses face to face,
and to have compulsory process to Article 32 of the Civil Code provides that
secure the attendance of witness in his moral damages are proper when the rights of
individuals, including the right against
behalf;
deprivation of property without due process
(9) Freedom from being compelled to be a of law, are violated [Meralco v Spouses Chua
witness against one's self, or from being (2010)].
forced to confess guilt, or from being
induced by a promise of immunity or Art. 34. When a member of a city or
reward to make such confession, except municipal police force refuses or fails to
when the person confessing becomes a render aid or protection to any person in case
of danger to life or property, such peace
State witness;
officer shall be primarily liable for damages,
(10) Freedom from excessive fines, or cruel and the city or municipality shall be
and unusual punishment, unless the subsidiarily responsible therefor. The civil
same is imposed or inflicted in action herein recognized shall be
accordance with a statute which has not independent of any criminal proceedings,
been judicially declared and a preponderance of evidence shall
unconstitutional; and suffice to support such action.
(11) Freedom of access to the courts.
Art. 35. When a person, claiming to be
injured by a criminal offense, charges
In any of the cases referred to in this article, another with the same, for which no
whether or not the defendant's act or independent civil action is granted in this
omission constitutes a criminal offense, the Code or any special law, but the justice of the
aggrieved party has a right to commence an peace finds no reasonable grounds to believe
entirely separate and distinct civil action for that a crime has been committed, or the
damages, and for other relief. Such civil prosecuting attorney refuses or fails to
action shall proceed independently of any institute criminal proceedings, the complaint
criminal prosecution (if the latter be may bring a civil action for damages against
instituted), and mat be proved by a the alleged offender. Such civil action may
preponderance of evidence. be supported by a preponderance of
evidence. Upon the defendant's motion, the
The indemnity shall include moral damages. court may require the plaintiff to file a bond
Exemplary damages may also be to indemnify the defendant in case the
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complaint should be found to be malicious. C. WHO MAY RECOVER MORAL


DAMAGES
If during the pendency of the civil action, an
information should be presented by the Art. 2219. Moral damages may be recovered
prosecuting attorney, the civil action shall be in the following and analogous cases:
suspended until the termination of the (1) A criminal offense resulting in physical
criminal proceedings. injuries;
(2) Quasi-delicts causing physical injuries;
Please refer to previous discussions on the (3) Seduction, abduction, rape, or other
provisions. lascivious acts;
(4) Adultery or concubinage;
Art. 2220. Willful injury to property may be a
(5) Illegal or arbitrary detention or arrest;
legal ground for awarding moral damages if
the court should find that, under the (6) Illegal search;
circumstances, such damages are justly due. (7) Libel, slander or any other form of
The same rule applies to breaches of defamation;
contract where the defendant acted (8) Malicious prosecution;
fraudulently or in bad faith. (9) Acts mentioned in article 309;
(10) Acts and actions referred to in articles 21,
B.10 IN WILLFUL INJURY TO PROPERTY
26, 27, 28, 29, 30, 32, 34, and 35.
To sustain an award of damages, the damage
inflicted upon [plaintiff’s] property must be The parents of the female seduced,
malicious or willful, an element crucial to abducted, raped, or abused, referred to in
merit an award of moral damages under No. 3 of this article, may also recover moral
Article 2220 of the Civil Code [Regala v. Carin, damages.
G.R. No. 188715 (2011)].
The spouse, descendants, ascendants, and
B.11 IN BREACH OF CONTRACT IN BAD brothers and sisters may bring the action
FAITH mentioned in No. 9 of this article, in the order
Moral damages may be recovered in culpa named.
contractual where the defendant acted in bad
faith or with malice in the breach of the C.1 RELATIVES OF INJURED PERSONS
contract. However, a conscious or intentional Article 2219 circumscribes the instances in
design need not always be present since which moral damages may be awarded. The
negligence may occasionally be so gross as to provision does not include succession in the
amount to malice or bad faith. Bad faith, in collateral line as a source of the right to
the context of Art. 2220 of the Civil Code, recover moral damages. The usage of the
includes gross negligence. Thus, we have phrase analogous cases in the provision
held in a number of cases that moral means simply that the situation must be held
damages may be awarded in culpa similar to those expressly enumerated in the
contractual or breach of contract when the law in question [Sulpicio Lines v Curso, supra].
defendant acted fraudulently or in bad faith,
or is guilty of gross negligence amounting to C.2 JURIDICAL PERSONS
bad faith, or in wanton disregard of his
contractual obligations [Bankard, Inc. v. The award of moral damages cannot be
Feliciano, G.R. No 141761 (2006)]. granted in favor of a corporation because,
being an artificial person and having
As an exception [to the requirement of bad existence only in legal contemplation, it has
faith], moral damages may be awarded in no feelings, no emotions, no senses, It cannot,
case of breach of contract of carriage that therefore, experience physical suffering and
results in the death of a passenger [Sulpicio mental anguish, which can be experienced
Lines v. Curso, supra]. only by one having a nervous system. The
statement in People vs. Manero and
Mambulao Lumber Co. vs. PNB that a
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corporation may recover moral damages if it


"has a good reputation that is debased, IV. Nominal Damages
resulting in social humiliation" is an obiter
dictum [ABS-CBN v. CA, supra]. Nominal damages consist in damages
awarded, not for purposes of indemnifying
D. FACTORS CONSIDERED IN the plaintiff for any loss suffered, but for the
DETERMINING AMOUNT vindication or recognition of a right violated
by the defendant.
The amount of damages awarded in this
appeal has been determined by adequately A. REQUISITES AND
considering the official, political, social, and CHARACTERISTICS
financial standing of the offended parties on
one hand, and the business and financial (1) Invasion or violation of any legal or
position of the offender on the other. The SC property right.
further considered the present rate of (2) No proof of loss is required.
exchange and the terms at which the amount (3) The award is to vindicate the right
of damages awarded would approximately be violated.
in U.S. dollars, the defendant being an
international airline. Senate President Lopez,
for his social standing and prestige, received B. WHEN AWARDED
P100,000; his wife Maria Lopez received Art. 2221. Nominal damages are adjudicated
P50,000 for her discomfort, and the fact that in order that a right of the plaintiff, which has
she was already sick and suffering a flu when been violated or invaded by the defendant,
she left the Philippines via defendant’s plane; may be vindicated or recognized, and not for
and the Montelibanos received P25,000 each, the purpose of indemnifying the plaintiff for
for being immediate family members of any loss suffered by him.
Senator Lopez, and as such they likewise
shared his prestige and humiliation [Lopez v. Art. 2222. The court may award nominal
Pan American, G.R. No. L-22415 (1966)]. damages in every obligation arising from any
source enumerated in article 1157, or in every
case where any property right has been
invaded.

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.

One does not ask for nominal damages, and


it is in lieu of the actual, moral, temperate, or
liquidated damages.

Nominal damages are incompatible with


actual, temperate and exemplary damages.

Nominal damages cannot co-exist with


actual or compensatory damages [Armovit v.
CA (1990)].
No moral or exemplary damages was
awarded. Nevertheless, when confronted with
their failure to deliver on the wedding day the
wedding cake ordered and paid for,
petitioners gave the lame excuse that delivery

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was probably delayed because of the traffic, the circumstances of the case. Generally,
when in truth, no cake could be delivered nominal damages by their nature are small
because the order slip got lost. For such sums fixed by the court without regard to the
prevarication, petitioners must be held liable extent of the harm done to the injured party.
for nominal damages for insensitivity, However, it is generally held that a nominal
inadvertence or inattention to their damage is a substantial claim, if based upon
customer's anxiety and need of the hour the violation of a legal right; in such a case,
[Francisco v. Ferrer, supra]. the law presumes damage although actual or
compensatory damages are not proven
Nominal damages "are recoverable where a [Gonzales v. People, G.R. No. 159950 (2007)].
legal right is technically violated and must be
vindicated against an invasion that has
produced no actual present loss of any kind.”
Its award is thus not for the purpose of
indemnification for a loss but for the
recognition and vindication of a right. When
granted by the courts, they are not treated as
an equivalent of a wrong inflicted but simply
a recognition of the existence of a technical
injury. A violation of the plaintiff’s right, even
if only technical, is sufficient to support an
award of nominal damages. Conversely, so
long as there is a showing of a violation of the
right of the plaintiff, an award of nominal
damages is proper [Gonzales v. PCIB, G.R. No.
180257 (2011)].

The plaintiffs sought to recover damages


from the hotel due to its breach of contract as
regards food service for the plaintiff’s guests.
The SC did not award actual and moral
damages because it found that the plaintiff’s
failure to inform the hotel regarding the
increase of guests (from 350 expected
guests, at maximum capacity of 380, the
number of guests reached 470) was the
proximate cause of the plaintiff’s injury.
Nevertheless, the SC awarded nominal
damages under considerations of equity, for
the discomfiture that the plaintiffs were
subjected to during the event, averring that
the hotel could have managed the "situation"
better, it being held in high esteem in the
hotel and service industry. Given
respondent’s vast experience, it is safe to
presume that this is not its first encounter
with booked events exceeding the
guaranteed cover [Spouses Guanio v. Makati
Shangri-la, G.R. No. 190601 (2011)].

C. NATURE AND DETERMINATION OF


AMOUNT
The assessment of nominal damages is left to
the discretion of the trial court according to
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V. Temperate Damages Courts are authorized to award temperate


damages even in cases where the amount of
Art. 2224. Temperate or moderate damages, pecuniary loss could have been proven with
which are more than nominal but less than certainty, if no such adequate proof was
compensatory damages, may be recovered presented. The allowance of temperate
when the court finds that some pecuniary damages when actual damages were not
loss has been suffered but its amount adequately proven is ultimately a rule drawn
cannot, from the nature of the case, be from equity, the principle affording relief to
provided with certainty. those definitely injured who are unable to
prove how definite the injury [Republic v.
Art. 2225. Temperate damages must be Tuvera, G.R. No. 148246 (2007)].
reasonable under the circumstances.
There are cases where from the nature of the
These damages are awarded for pecuniary case, definite proof of pecuniary loss cannot be
loss, in an amount that, from the nature of offered, although the court is convinced that
the case, cannot be proved with certainty. there has been such loss. For instance, injury
to one's commercial credit or to the goodwill
A. REQUISITES of a business firm is often hard to show
certainty in terms of money. (NOTE: In this
(1) Actual existence of pecuniary loss case actual and temperate damages were
(2) The nature and circumstances of the loss awarded. It is postulated that the actual
prevents proof of the exact amount damages is for the car while the temperate
(3) They are more than nominal and less damages is for the lost actual income not
than compensatory. sufficiently proved.)
(4) Causal connection between the loss and
the defendant’s act or omission. B. FACTORS IN DETERMINING
(5) Amount must be reasonable. AMOUNT
The SC awarded temperate damages where
In cases where the resulting injury might be from the nature of the case, definite proof of
continuing and possible future complications pecuniary loss cannot be adduced, although
directly arising from the injury, while certain the court is convinced that the plaintiff
to occur are difficult to predict, temperate suffered some pecuniary loss. The SC also
damages can and should be awarded on top increased the award of temperate damages
of actual or compensatory damages; in such from P100,000 to P150,000, taking into
cases there is no incompatibility between account the cost of rebuilding the damaged
actual and temperate damages as they cover portions of the perimeter fence [De Guzman v.
two distinct phases [Ramos v. CA, supra]. Tumolva, G.R. No. 188072 (2011)].

Temperate damages are incompatible with B.1 WHERE THERE ARE RECEIPTS
nominal damages hence, cannot be granted PROVIDED AMOUNTING TO LESS THAN
concurrently [Citytrust Bank v. IAC (1994)]. P25,000
Anent the actual damages, we note that the
Temperate damages are included within the CA awarded P3,000.00 representing the
context of compensatory damages. [Tan v. amount spent for the embalming as shown
OMC Carriers, supra]. by the receipt. However, the prosecution also
presented a list of expenses such as those
The SC awarded temperate damages in lieu spent for the coffin, etc., which were not duly
of actual damages for loss of earning covered by receipt. If the actual damages,
capacity where earning capacity is plainly proven by receipts during the trial, amount to
established but no evidence was presented to less than P25,000.00, the victim shall be
support the allegation of the injured party’s entitled to temperate damages in the amount
actual income [Pleno v. CA, G.R. No. 56505 of P25,000.00, in lieu of actual damages. In
(1988)].
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this case, the victim is entitled to the award


ofP25,000.00 as temperate damages VI. Liquidated
considering that the amount of actual
damages is only P3,858.50. The amount of
Damages
actual damages shall be deleted [People v.
Lucero, G.R. No. 179044 (2010)]. Art. 2226. Liquidated damages are those
agreed upon by the parties to a contract, to
B.2 WHERE NO RECEIPTS WERE be paid in case of breach thereof.
PROVIDED
Art. 2227. Liquidated damages, whether
The award of P25,000.00 as temperate intended as an indemnity or a penalty, shall
damages in homicide or murder cases is be equitably reduced if they are iniquitous or
proper when no evidence of burial and unconscionable.
funeral expenses is presented in the trial
court [People v. Gidoc, G.R. No. 185162 Liquidated damages are those damages
(2009)]. agreed upon by the parties to a contract to be
paid in case of breach thereof.
Where the amount of actual damages cannot
be determined because no receipts were It differs from a penal clause in that in the
presented to prove the same but it is shown latter case the amount agreed to be paid may
that the heirs are entitled thereto, temperate bear no relation to the probable damages
damages may be awarded, fixed resulting from the breach. Basically, a
atP25,000.00. Considering that funeral penalty is “ad terrorem,” while liquidated
expenses were obviously incurred by the damages are “ad reparationem.”
victim’s heirs, an award ofP25,000.00 as
temperate damages is proper [People v. A. REQUISITES AND
Surongon (2007)].
CHARACTERISTICS
(1) Liquidated damages must be validly
stipulated.
(2) There is no need to prove the amount of
actual damages.
(3) Breach of the principal contract must be
proved.

B. RULES GOVERNING BREACH OF


CONTRACT
Art. 2228. When the breach of the contract
committed by the defendant is not the one
contemplated by the parties in agreeing
upon the liquidated damages, the law shall
determine the measure of damages, and not
the stipulation.

Liquidated damages are those agreed upon


by the parties to a contract to be paid in case
of breach thereof. The stipulation on
attorney’s fees contained in the said
Promissory Note constitutes what is known as
a penal clause. A penalty clause, expressly
recognized by law, is an accessory
undertaking to assume greater liability on the
part of the obligor in case of breach of an
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obligation. It functions to strengthen the


coercive force of obligation and to provide, in VII. Exemplary Or
effect, for what could be the liquidated
damages resulting from such a breach. The
Corrective Damages
obligor would then be bound to pay the
stipulated indemnity without the necessity of Art. 2229. Exemplary or corrective damages
proof on the existence and on the measure of are imposed, by way of example or correction
damages caused by the breach [Suatengco v. for the public good, in addition to the moral,
Reyes (2008)]. temperate, liquidated or compensatory
damages.
General Rule: The penalty shall substitute the
indemnity for damages and the payment of In common law, these damages were termed
the interests in case of breach. “punitive.”

Exceptions The grant of temperate damages paves the


(1) When there is a stipulation to the way for the award of exemplary damages.
contrary. Under Article 2234 of the Civil Code, a
showing that the plaintiff is entitled to
(2) When the obligor is sued for refusal to temperate damages allows the award of
pay the agreed penalty. exemplary damages [Canada v All
(3) When the obligor is guilty of fraud. Commodities Marketing (2008)].

The amount can be reduced if: However, the award of P1,000,000


(1) it is unconscionable as determined by the exemplary damages is also far too excessive
court and should likewise be reduced to an
(2) there is partial or irregular performance. equitable level. Exemplary damages are
imposed not to enrich one party or
impoverish another but to serve as a
deterrent against or as a negative incentive to
curb socially deleterious actions [PNB v. CA
(1996)].

A. WHEN RECOVERABLE

A.1 IN CRIMINAL OFFENSES; NCC ART.


2230
Art. 2230. In criminal offenses, exemplary
damages as a part of the civil liability may be
imposed when the crime was committed with
one or more aggravating circumstances.
Such damages are separate and distinct
from fines and shall be paid to the offended
party.

Award of exemplary damages is part of the


civil liability, not of the penalty.

Damages are paid to the offended party


separately from the fines.

Although an aggravating circumstance not


specifically alleged in the information, albeit
established at trial, cannot be appreciated to
increase the criminal liability of the accused,
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the established presence of one or two A.2 IN CONTRACTS AND QUASI-


aggravating circumstances of any kind or CONTRACTS; NCC ART. 2232
nature entitles the offended party to
Art. 2232. In contracts and quasi-contracts,
exemplary damages under Article 2230 of the
the court may award exemplary damages if
Civil Code because the requirement of
the defendant acted in a wanton, fraudulent,
specificity in the information affected only the
reckless, oppressive, or malevolent manner.
criminal liability of the accused, not his civil
liability [People v. Dadulla (2011)].
REQUISITES
Being corrective in nature, exemplary Art. 2233. Exemplary damages cannot be
damages, therefore, can be awarded, not recovered as a matter of right; the court will
only in the presence of an aggravating decide whether or not they should be
circumstance, but also where the adjudicated.
circumstances of the case show the highly
reprehensible or outrageous conduct of the Art. 2234. While the amount of the
offender. As in this case, where the offender exemplary damages need not be proved, the
sexually assaulted a pregnant married plaintiff must show that he is entitled to
woman, the offender has shown moral moral, temperate or compensatory damages
corruption, perversity, and wickedness. He before the court may consider the question of
has grievously wronged the institution of whether or not exemplary damages should
marriage. The imposition then of exemplary be awarded. In case liquidated damages
damages by way of example to deter others have been agreed upon, although no proof of
from committing similar acts or for correction loss is necessary in order that such liquidated
for the public good is warranted in quasi- damages may be recovered, nevertheless,
delicts [People v. Alfredo (2010)]. before the court may consider the question of
granting exemplary in addition to the
Art. 2231. In quasi-delicts, exemplary liquidated damages, the plaintiff must show
damages may be granted if the defendant that he would be entitled to moral,
acted with gross negligence. temperate or compensatory damages were it
not for the stipulation for liquidated
In this case, the defendant, the previous damages.
employer of the plaintiff, wrote a letter to the
company where the plaintiff subsequently Art. 2235. A stipulation whereby exemplary
applied for employment, stating that the damages are renounced in advance shall be
plaintiff was dismissed by the defendant from null and void.
work due to dishonesty, accusing plaintiff of
malversation of defendant’s funds. Previous
police investigations revealed that the B. REQUISITES TO RECOVER
defendant’s accusations against the plaintiff EXEMPLARY DAMAGES AND
were unfounded, and cleared the plaintiff of
LIQUIDATED DAMAGES AGREED UPON
such ‘anomalies’. Here, the lower court
awarded exemplary damages to the plaintiff, The plaintiff must show that he/she is
which the defendant questioned, averring entitled to moral, temperate or compensatory
that CC 2231 may be awarded only for grossly damages:
negligent acts, not for willful or intentional
acts. The SC upheld the grant of exemplary If arising When exemplary
damages, stating that while CC 2231 provides from damages are granted
that for quasi-delicts, exemplary damages The crime was
may be granted if the defendant acted with Art. committed with an
gross negligence, with more reason is its Crimes
2230 aggravating
imposition justified when the act performed is circumstance/s
deliberate, malicious and tainted with bad Art. Quasi- Defendant acted with
faith [Globe Mackay v. CA (1989)]. 2231 delicts gross negligence
Art. Contracts Defendant acted in a
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2232 and Quasi- wanton, fraudulent, account of permanent physical disability


contracts reckless, oppressive, or not caused by the defendant, had no
malevolent manner earning capacity at the time of his death;
(2) If the deceased was obliged to give
General Principles
(1) Exemplary damages cannot be awarded support according to the provisions of
article 291, the recipient who is not an
alone: they must be awarded IN
ADDITION to moral, temperate, heir called to the decedent's inheritance
liquidated or compensatory damages. by the law of testate or intestate
(2) The purpose of the award is to deter the succession, may demand support from
defendant (and others in a similar the person causing the death, for a
condition) from a repetition of the acts period not exceeding five years, the exact
for which exemplary damages were duration to be fixed by the court;
(3) The spouse, legitimate and illegitimate
awarded; hence, they are not recoverable
as a matter of right. descendants and ascendants of the
deceased may demand moral damages
(3) The defendant must be guilty of other
malice or else negligence above the for mental anguish by reason of the
ordinary. death of the deceased.
(4) Plaintiff is not required to prove the
C.1 IN DEATH CAUSED BY BREACH OF
amount of exemplary damages.
CONDUCT BY A COMMON CRIME
(a) But plaintiff must show that he is
entitled to moral, temperate, or When death occurs as a result of a crime, the
heirs of the deceased are entitled to the
compensatory damage; that is,
following items of damages:
substantial damages, not purely (1) As indemnity for the death of the victim
nominal ones. This requirement of the offense — P12,000.00, without the
applies even if the contract need of any evidence or proof of
stipulates liquidated damages. damages, and even though there may
(b) The amount of exemplary damage have been mitigating circumstances
need not be pleaded in the attending the commission of the offense.
complaint because the same (2) As indemnity for loss of earning capacity
cannot be proved. It is merely of the deceased — an amount to be fixed
incidental or dependent upon what by the Court according to the
the court may award as circumstances of the deceased related to
compensatory damages. his actual income at the time of death
and his probable life expectancy, the said
C. DAMAGES IN CASE OF DEATH indemnity to be assessed and awarded
Re. Crimes and Quasi-delicts by the court as a matter of duty, unless
Art. 2206. The amount of damages for death the deceased had no earning capacity at
caused by a crime or quasi-delict shall be at said time on account of permanent
least three thousand pesos, even though
disability not caused by the accused. If
there may have been mitigating
circumstances. In addition: the deceased was obliged to give support,
(1) The defendant shall be liable for the loss under Art. 291, Civil Code, the recipient
of the earning capacity of the deceased, who is not an heir, may demand support
and the indemnity shall be paid to the from the accused for not more than five
heirs of the latter; such indemnity shall years, the exact duration to be fixed by
in every case be assessed and awarded the court.
by the court, unless the deceased on (3) As moral damages for mental anguish, —
an amount to be fixed by the court. This
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may be recovered even by the


illegitimate descendants and ascendants
VIII. Graduation Of
of the deceased. Damages
(4) As exemplary damages, when the crime
is attended by one or more aggravating A. RULES
circumstances, — an amount to be fixed
in the discretion of the court, the same to A.1 IN CRIMES
be considered separate from fines.
Art. 2204. In crimes, the damages to be
(5) As attorney's fees and expresses of
adjudicated may be respectively increased or
litigation, — the actual amount thereof, lessened according to the aggravating or
(but only when a separate civil action to mitigating circumstances.
recover civil liability has been filed or
when exemplary damages are awarded). A.2 IN QUASI-DELICTS
(6) Interests in the proper cases. Art. 2214. In quasi-delicts, the contributory
(7) It must be emphasized that the negligence of the plaintiff shall reduce the
indemnities for loss of earning capacity damages that he may recover.
of the deceased and for moral damages
are recoverable separately from and in B. CONTRIBUTORY NEGLIGENCE
addition to the fixed sum of P12,000.00 The alleged contributory negligence of the
corresponding to the indemnity for the victim, if any, does not exonerate the accused
sole fact of death, and that these in criminal cases committed through reckless
damages may, however, be respectively imprudence, since one cannot allege the
increased or lessened according to the negligence of another to evade the effects of
his own negligence [Genobiagon v. CA, supra].
mitigating or aggravating circumstances,
except items 1 and 4 above, for obvious If so, the disobedience of the plaintiff in
reasons [Heirs of Raymundo Castro v. placing himself in danger contributed in
Bustos (1969)]. some degree to the injury as a proximate,
although not as its primary cause [Rakes v.
At present, the SC allows civil indemnity of Atlantic, G.R. No. L-1719 (1907)].
Php. 50,000 in cases of homicide [De Villa v.
People (2012)] and Php. 75,000 in cases of (Supreme Court in this case cited numerous
murder [People v. Camat (2012)]. foreign precedents, mostly leaning towards
the doctrine that contributory negligence on
The omission from Article 2206 (3) of the the part of the plaintiff did not exonerate
brothers and sisters of the deceased defendant from liability, but it led to the
passenger reveals the legislative intent to reduction of damages awarded to the
exclude them from the recovery of moral plaintiff.)
damages for mental anguish by reason of the
death of the deceased. Inclusio unius est In determining the question of contributory
exclusio alterius [Sulpicio Lines v. Curso, negligence in performing such act — that is to
supra]. say, whether the passenger acted prudently
or recklessly — the age, sex, and physical
condition of the passenger are circumstances
necessarily affecting the safety of the
passenger, and should be considered
[Cangco vs. Manila Railroad Co., supra].

B.1 PLAINTIFF’S NEGLIGENCE


Even if Manila Electric is negligent, in order
that it may be held liable, its negligence must
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be the proximate and direct cause of the (1) That the loss would have resulted in any
accident [Manila Electric v. Remonquillo, event because of the negligence or
supra]. omission of another, and where such
negligence or omission is the immediate
Both of the parties contributed to the and proximate cause of the damage or
proximate cause; hence, they cannot recover injury;
from one another [Bernardo v. Legaspi, supra]. (2) Defendant has done his best to lessen
the plaintiff’s injury or loss.
B.2 IN CONTRACTS, QUASI-CONTRACTS
AND QUASI-DELICTS The SC deemed CC 2215(2) inapplicable
where the harm done to private respondents
Art. 2215 In contracts, quasi-contracts, and
outweighs any benefits the plaintiffs may
quasi-delicts, the court may equitably
have derived from being transported to
mitigate the damages under circumstances
Tacloban instead of being taken to
other than the case referred to in the
Catbalogan, their destination and the vessel's
preceding article, as in the following
first port of call, pursuant to its normal
instances:
schedule [Sweet Lines v. CA (1983)].
(1) That the plaintiff himself has
contravened the terms of the contract;
C.4 RULE WHEN CONTRACTING PARTIES
(2) That the plaintiff has derived some
ARE IN PARI DELICTO
benefit as a result of the contract;
(3) In cases where exemplary damages are Generally, parties to a void agreement cannot
to be awarded, that the defendant acted expect the aid of the law; the courts leave
upon the advice of counsel; them as they are, because they are deemed in
(4) That the loss would have resulted in any pari delicto or "in equal fault." In pari delicto
event; is "a universal doctrine which holds that no
(5) That since the filing of the action, the action arises, in equity or at law, from an
defendant has done his best to lessen illegal contract; no suit can be maintained for
the plaintiff's loss or injury. its specific performance, or to recover the
property agreed to be sold or delivered, or the
money agreed to be paid, or damages for its
C. GROUNDS FOR MITIGATION OF violation; and where the parties are in pari
DAMAGES delicto, no affirmative relief of any kind will
be given to one against the other."
C.1 FOR CONTRACTS:
(1) Violation of terms of the contract by the This rule, however, is subject to exceptions
plaintiff himself; that permit the return of that which may have
(2) Obtention or enjoyment of benefit under been given under a void contract to:
the contract by the plaintiff himself; (a) the innocent party (Arts. 1411-1412, Civil
(3) Defendant acted upon advice of counsel Code);
in cases where exemplary damages are (b) the debtor who pays usurious interest
to be awarded such as under Articles (Art. 1413, Civil Code);
2230, 2231, and 2232; (c) the party repudiating the void contract
(4) Defendant has done his best to lessen before the illegal purpose is
the plaintiff’s injury or loss. accomplished or before damage is
caused to a third person and if public
C.2 FOR QUASI-CONTRACTS: interest is subserved by allowing
recovery (Art. 1414, Civil Code);
(1) In cases where exemplary damages are (d) the incapacitated party if the interest of
to be awarded such as in Art. 2232; justice so demands (Art. 1415, Civil
(2) Defendant has done his best to lessen Code);
the plaintiff’s injury or loss. (e) the party for whose protection the
prohibition by law is intended if the
C.3 FOR QUASI-DELICTS: agreement is not illegal per se but
merely prohibited and if public policy
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would be enhanced by permitting


recovery (Art. 1416, Civil Code); and IX. Miscellaneous Rules
(f) the party for whose benefit the law has
been intended such as in price ceiling A. DAMAGES THAT CANNOT CO-EXIST
laws (Art. 1417, Civil Code) and labor
laws (Arts. 1418-1419, Civil Code). A.1 NOMINAL WITH OTHER DAMAGES
C.5 LIQUIDATED DAMAGES Art. 2223. The adjudication of nominal
damages shall preclude further contest upon
Art. 2227. Liquidated damages, whether the right involved and all accessory
intended as an indemnity or a penalty, shall questions, as between the parties to the suit,
be equitably reduced if they are iniquitous or or their respective heirs and assigns.
unconscionable.
The propriety of the damages awarded has
C.6 COMPROMISE not been questioned, Nevertheless, it is
Art. 2031. The courts may mitigate the patent upon the record that the award of
damages to be paid by the losing party who P10,000 by way of nominal damages is
has shown a sincere desire for a compromise. untenable as a matter of law, since nominal
damages cannot co-exist with compensatory
damages [Vda. De Medina v. Cresencia (1956)].

The purpose of nominal damages is to


vindicate or recognize a right that has been
violated, in order to preclude further contest
thereon; “and not for the purpose of
indemnifying the Plaintiff for any loss
suffered by him” (Articles 2221, 2223, new
Civil Code.)

Since the court below has already awarded


compensatory and exemplary damages that
are in themselves a judicial recognition that
Plaintiff’s right was violated, the award of
nominal damages is unnecessary and
improper. Anyway, ten thousand pesos
cannot, in common sense, be deemed
“nominal”.

A.2 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.

B. DAMAGES THAT MUST CO-EXIST

B.1 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
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damages, none of which have been allowed C. DAMAGES THAT MUST STAND
in this case, for reasons herein before ALONE
discussed [Francisco v. GSIS (1963)].
C.1 NOMINAL DAMAGES
There was, therefore, no legal basis for the Art. 2223. The adjudication of nominal
award of exemplary damages since the damages shall preclude further contest upon
private respondent was not entitled to moral, the right involved and all accessory
temperate, or compensatory damages and questions, as between the parties to the suit,
there was no agreement on stipulated or their respective heirs and assigns.
damages [Scott Consultants & Resource
Development Corp. v. CA (1995)].

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CIVIL LAW
PRIVATE
INTERNATIONAL
LAW

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I. Introduction involved relationships


amongst
transactions
between private
A. BASIS themselves individuals
which involve a
• Conflicts of laws problems arise from the foreign element
occurrence of events and transactions
that contain elements significant to more Remedies State may resort All remedies
than one legal system. to diplomatic provided by
protest, peaceful municipal laws
• Its incorporation in municipal laws is means of of the state
based not on extraterritorial validity of settlement of such as resort to
the foreign law but on comity of nations. international courts or
disputes such as administrative
• “Comity,” in the legal sense, is neither a diplomatic tribunals
matter of absolute obligation, on the one negotiations,
hand, nor of mere courtesy and good will, arbitration or
upon the other. But it is the recognition conciliation or
which one nation allows within its adjudication by
territory to the legislative, executive or filing a case
judicial acts of another nation, having due before
regard both to international duty and international
convenience, and to the rights of its own tribunals
citizens or of other persons who are under
the protection of its laws. [Hilton v Guyot,
159 US 113, 1895]
C. SCOPE
• Adjudicatory jurisdiction
B. DEFINITION
Determines the circumstances that allow for
Private international law a legal order to impose upon its judiciary the
task of deciding multi-state and
• That part of municipal law which governs
multinational disputes
cases involving a foreign element.
• Choice-of-law
• That part of law which comes into play
when the issue before the court affects Refers to the probable sources from which
some fact or event, or transaction that is the applicable law of the controversy may be
so closely connected with a foreign derived.
system of law as to necessitate recourse
• Recognition and enforcement of foreign
to that system.
judgments
• The law concerning the rights of persons Deals with the study of situations which
within the territory and dominion of one justify recognition by the forum court of a
nation by reason of acts, private or public, judgment rendered by a foreign court or the
done within the dominion of another enforcement of such within the forum.
nation.

D. SOURCES
Public Private
International International • Codes and Statutes
Law Law
• Treaties and International Conventions
Persons States and Individuals or
involved internationally corporations • Treatises, Commentaries and Studies of
recognized Learned Societies
organizations • Judicial Decisions
Transactions States in their Private
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i. Jurisdiction over the Person


II. Jurisdiction and
• Competence or power of a court to render
Choice of Law a judgment that will bind the parties to a
case.
• Required in in personam proceedings.
A. JURISDICTION Acquired by the voluntary appearance of
Judicial Jurisdiction a party and his submission to authority.
The power or authority of a court to try a case, • Over the person of the PLAINTIFF –
render judgment and execute it in accordance acquired from the moment he invokes the
with law aid of the court by filing a suit.
• Over the person of the DEFENDANT
Legislative Jurisdiction o When he enters his appearance
The ability of the state to promulgate laws Exception: if he appears for the
and enforce them on all persons and property purpose of protesting the
within its territory. jurisdiction of the court.
o When he is served with the legal
A.1. BASIS OF EXERCISE OF JUDICIAL process within the state
JURISDICTION o Personal service [Rule 14, Section
6, Rules of Court]

Traditional Approach o Substituted service [Rule 14,


Section 7, Rules of Court]
Based on the state’s physical power over
persons and property within its territory. o When subsequent proceedings
arise out of his original cause of
action including counterclaims
Modern Approach: Minimum contacts and filed by the defendant.
fundamental fairness test
• Minimum contacts must exist between ii. Jurisdiction over the Property
the forum and defendant. Due process
only requires that a defendant, if not • Results either from:
present within the territory, should have o Seizure of the property under a
certain minimum contacts with it such legal process; or
that maintenance of the suit does not
offend traditional notions of fair play and o Institution of legal proceedings
substantive justice. It includes presence wherein the court’s power over
in the state through acts of authorized the property is recognized and
agents. [International Shoe Co. v. made effective
Washington, 326 US 310, 1945] • Due process is satisfied by summons
• Minimum contacts must exist among the through publication in these in rem and
forum, defendant and the cause of action. quasi in rem proceedings
[Shaffer v Heitner, 433 US 186, 1977]
• Long-Arm Statutes – specify the kinds of iii. Jurisdiction over the Subject Matter
contacts upon which jurisdiction will be
asserted. • More than the general power conferred
by law to take cognizance of cases of a
general class to which the case belongs.
A.2. TYPES OF JUDICIAL JURISDICTION • It must be properly invoked by filing a
petition.
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• It cannot be conferred by consent of the publication or copy, which


parties. has been consularized)
(b) Doctrine of Processual
Presumption – absent
A.3. WAYS OF DEALING WITH A contrary proof, foreign law is
CONFLICTS PROBLEM presumed to be the same as
i. Dismiss the Case Philippine law.
For Lack of Jurisdiction (3) The case under any of the exceptions
to the application of foreign law.
Absent jurisdiction over the person, property
or subject matter, the court should dismiss (a) When the foreign law is
the case. Otherwise, a judgment rendered CONTRARY to an important
will be void. PUBLIC POLICY of the forum;
Doctrine of Forum Non Conveniens (b) When the foreign law is
PENAL in nature;
Even if the court assumes jurisdiction over the
parties and the subject matter, it may decline (c) When the foreign law is
to try the case on the ground that the PROCEDURAL in nature;
controversy may be more suitably tried (d) When the foreign law is
elsewhere. purely FISCAL OR
ADMINISTRATIVE in nature;
ii. Assume Jurisdiction (e) When the application of
foreign law will work
Courts may apply either FORUM or FOREIGN
UNDENIABLE INJUSTICE TO
LAW.
CITIZENS of the forum;
The presence of any one of the following
(f) When the case involves REAL
factors would justify the application of
OR PERSONAL PROPERTY
internal law: situated in the forum;
(1) A specific law of the forum decrees (g) When the application of the
that internal law should apply foreign law might
Examples: ENDANGER THE VITAL
INTEREST of the state;
(a) Real and personal property
are subject to the law of the (h) When the foreign law is
country where they are CONTRARY TO GOOD
situated. [Art. 16, Civil Code] MORALS
(b) Revocation of a will done
outside the Philippines may
be valid if done according to
B. CHOICE OF LAW
the law of the place where the
will was made or lex domicile.
B.1. APPROACHES TO CHOICE OF LAW
[Art. 829, Civil Code]
(c) Filipinos are prohibited from
making joint wills even when i. Traditional Approaches
done abroad. [Art. 819, Civil
For simplicity, convenience, uniformity and
Code]
predictability. At times, at the expense of just
(2) The proper foreign law was not results.
properly pleaded and proved
Vested-Rights Theory
(a) Foreign law must be proved
as a fact through Rules of
Evidence (e.g. official
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• An act done in a foreign jurisdiction gives


rise to the existence of a right if the laws TORT CONTRACT
of that state provides so.
• Place where the • Law chosen by the
• This right vests in the plaintiff and he
injury occurred parties.
carries it with him to be enforced in any
forum he chooses to bring suit. • Place where
negligent conduct In absence thereof, the
• The forum refers to the law of the place of
occurred following:
occurrence of the “last act” necessary to
complete the cause of action. • Domicile, residence • Place of contracting
or nationality of the
parties • Place of negotiation
Local Law Theory
• Place where the • Place of performance
The court treats a case as purely domestic relationship
case and applies local law regardless of • Domicile, residence,
between the parties
foreign elements. nationality, place of
is entered
incorporation and place
of business of the parties
Cavers’ Principles of Preference
• Made with reference to principles of Interest Analysis
preference based on considerations of
justice and social expediency and should Looks at the policy behind the laws of the
not be the result of mechanical involved state and the interest each state had
application of the rule. in applying its own law.

• It aims to provide a fair accommodation


of conflicting state policies and afford fair Comparative Impairment
treatment to the parties.
Weighs conflicting interests and apply the
law of the state whose interest would be
ii. Modern Approaches more impaired if its laws were not followed.

Place of Most Significant Relationship


Identifies a plurality of factors and factual Functional Analysis
contacts in light of choice of law principles: This approach looked into the general
policies of the state beyond those reflected in
• The needs of the interstate and
its substantive law and to policies and values
international system
“relating to effective and harmonious
• Relevant policies of the concerned states intercourse between states.”
• The relevant policies of other interested
states and the relative interests of those C. THE PROBLEM OF
in the determination of the particular
CHARACTERIZATION
issue
• The protection of justified expectations of
the parties C.1 CHARACTERIZATION AND THE
SINGLE-ASPECT METHOD
• The basic policies underlying the
particular field of law
• Certainty, predictability and uniformity of Single-aspect method (Traditional)
result Concentrates on one element of a situation in
• Ease in the determination and the order to connect the case to a particular legal
application of the law to be applied community.
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disputed question to an area in substantive


law.
Multi-aspect method (Modern Approach)
All important factors of the case are analyzed
and the applicable law is arrived at by i. Subject-Matter Characterization
“rationally elaborating and applying the
Classification by a court of a factual situation
policies and purposes underlying the
into a legal category.
particular legal rules that come in question
as well as the needs of interstate or
international intercourse”
ii. Substance-Procedure Dichotomy
Directs the court to the extent it will apply
The Philippines follows the single-aspect foreign law.
method. Examples:
• SUBSTANTIVE – the court MAY apply
• Philippine law governs citizens of the foreign law.
Philippines in matters relating to family
• PROCEDURAL – SHALL apply forum law
rights, duties, the status, condition and
legal capacity of persons. [Art. 15, Civil
Code]
Statute of Frauds
• Real and personal property are governed
• SUBSTANTIVE – if the words of the law
by the law of the country where they are
relate to forbidding the CREATION of
situated. [Art. 16, Civil Code]
obligation.
• National law of the deceased person
• PROCEDURAL – one that forbids
governs intestate and testamentary
ENFORCEMENT of the obligation.
succession both with respect to order of
succession, amount of successional rights
and intrinsic validity of testamentary
Statutes of Limitation and Borrowing Statute
provisions regardless of where the
property may be found. [Art. 16, Civil • General Rule: Statutes of limitations were
Code] classified as procedural because they
barred only the legal remedy without
• Law of the place of execution governs the
impairing the substantive right involved.
forms and solemnities of wills and other
public instruments. [Art. 17, Civil Code] • Exception: If the statute provides a
shorter period for certain types of claims
• When acts are executed before the
that fall within a wider classification
diplomatic or consular officials of the
covered by a general statute of
Republic of the Philippines in a foreign
limitations. (Specificity Test)
country, the solemnities established by
Philippine laws shall be observed in their
execution. [Art. 17, Civil Code]
Borrowing statutes
• Prohibitive laws concerning persons, acts
• Bars the filing of a suit in the forum if it is
or property and those which have as their
already barred by the statute of
object, public order, public policy, and
limitations in the place where the cause
good customs are to be governed by
of action arose.
Philippine law, unaffected by laws,
judgments and determinations of foreign • Philippines has passed a borrowing
countries. [Art. 17, Civil Code] statute.

C.2 DEPECAGE
Characterization
The process by which a court at the beginning
of the choice-of-law process assigns a
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Phenomenon where “different aspects of a (3) Desistance or mutual disclaimer of


case involving a foreign element may be jurisdiction (e.g. Forum court looks at
governed by different systems of laws.” foreign law; foreign law does not apply to
non-residents; therefore, no one has
• A case may be dissected into different applicable laws; Forum court then
issues, each analyzed as to which law applies forum law)
shall apply.
(4) Foreign Court Theory – the forum court
• When such issue by issue analysis results would assume the same position that the
in the application of different laws to foreign court would take were the case
different issues, then depecage occurs. litigated in the foreign court.
• Depecage is the effect of issue by issue
analysis. E. NOTICE AND PROOF OF FOREIGN
LAW
D. THE PROBLEM OF RENVOI
E.1. EXTENT OF JUDICIAL NOTICE
D.1. DEFINITION General Rule: Judge is not authorized to take
Procedure whereby a jural matter presented judicial notice of foreign law.
is referred by the conflict of laws rules of the Exception: When judicial notice is allowed.
forum to a foreign state, the conflict of laws [Rule 129, Section 1, Rules of Court]
rule of which, in turn, refers the matter to the
law of the forum or a third state.
• Remission – reference is made back to • The party whose cause of action or
the law of the forum defense depended upon the foreign law
has the burden of proving the foreign law.
• Transmission – reference is made to a
third state • Such foreign law is treated as a question
of fact to be properly pleaded and proved
NOT APPLICABLE in conformity with the law of evidence of
If there is a FALSE CONFLICT where one of the state where it is presented.
the states does not have a real interest in • A judge is not authorized to take judicial
applying its law in the controversy. Examples: notice of a foreign law and is presumed to
• Competing states have the same know only domestic law.
substantive law and the third concerned
state has no interest in applying its law. E.2. PROOF OF FOREIGN LAW
[PFAU v. Trent Aluminum]
Methods to prove foreign law
• The decedent was a domiciliary and
national of only one state. [Bellis v. Bellis] • Official publication of the law (and
consularized) [Rule 132, Section 24, Rules
of Court]
D.2. VARIOUS WAYS OF DEALING WITH
THE PROBLEM OF RENVOI • Copy of the law attested by the officer
having the legal custody of the record or
(1) Reject the renvoi - Forum conflict rules is by his deputy. (and consularized) [Rule
deemed to refer only to the internal law 132, Section 24, Rules of Court]
of that state (i.e. that which would apply
to a domestic case with no conflict-of- • Learned treatises and expert witness for
laws complications) unwritten foreign law [Rule 130, Section
46, Rules of Court]
(2) Accept the renvoi – looks into not just the
internal law of the foreign state, but also
the choice-of-law rules applicable in
Effect of Failure to Plead and Prove Foreign
multi-state cases.
Law
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• Dismiss the case for inability to establish


a cause of action III. Personal Law
• Processual Presumption / Presumed A. NATIONALITY
Identity – assume that the foreign law is
the same as the law of the forum
A.1. IMPORTANCE OF A PERSONAL LAW
• Apply the law of the forum
An individual’s personal law follows him
wherever he is and governs those
E.3. EXCEPTIONS TO THE APPLICATION OF transactions which affect him most closely.
FOREIGN LAW
Importance of Nationality in the Philippines
• The foreign law is contrary to an
Regulates
important public policy of the forum
• Civil status
• The foreign law is procedural in
nature • Capacity
• Issues are related to property (Lex • Condition
Situs)
• Family rights and duties
• The issue involved in the enforcement
of foreign claim is fiscal or • Laws on succession
administrative • Capacity to succeed
• The foreign law or judgment is
contrary to good morals (Contra A.2. DETERMINATION OF NATIONALITY
Bonus Mores)
Who are Filipino Citizens
• The application of foreign law will
work undeniable injustice to the • Those who are citizens of the Philippines
citizens of the forum at the time of the adoption of the
Constitution (1987)
• The foreign law is penal in character
• Those whose fathers or mothers are
• The application of the foreign law citizens of the Philippines
might endanger the vital interests of
the state • Those born before January 17, 1973 of
Filipino mothers, who elect Philippine
citizenship upon reaching the age of
majority
• Those who are naturalized in accordance
with law
i. Natural-Born Citizens
• Natural-born citizens are those who are
citizens of the Philippines without having
to perform any act to acquire or perfect
citizenship.
• The Philippines follows the jus sanguinis
principle which means the rule of descent
or blood.
ii. Naturalized Citizens
Qualifications

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(1) AGE: Must not be less than 21 years of • Where Philippine history, government
age on the date of the hearing of the and civics are taught and prescribed as
petition; part of school curriculum;
(2) RESIDENCE: Must have resided in the • During the entire period of the residence
Philippines for a continuous period of not required
less than 10 years;
• Prior to the hearing of petition for
May be reduced to 5 years in the naturalization
following cases:
• Applicant honorably held office under the
government of the Philippines or any of Disqualifications
the provinces, cities, municipalities or Naturalization is a privilege and not a right.
political subdivisions; The law must be strictly construed against
• Established a new industry or introduced the applicant.
a useful invention in the Philippines; (1) Commission of a crime involving moral
turpitude
• Married to a Filipino woman;
(2) Not receiving and dealing with Filipinos
• Had been engaged as a teacher in a in his home or visiting Filipino homes in
public or recognized private school not the community in a spirit of friendship,
established for exclusive instruction of friendliness and equality without any
children particular nationality or race in discrimination.
any of the branches of education or
industry for a period of 2 years; (3) Applicant’s country does not grant
reciprocal rights to Filipino citizens at the
• Born in the Philippines time of the hearing of his application.
(3) CHARACTER
• Must be of good moral character; Procedure [Com. Act No. 473]
• Must believe in the principles underlying (1) Declaration of intention to become a
the Philippine Constitution; and citizen must be filed 1 year prior to the
filing of petition, unless the applicant is
• Must have conducted himself in a proper
exempted:
and irreproachable manner during the
entire period of his residence in the • Born in the Philippines and received their
Philippines primary and secondary education in
(4) PROPERTY public or private schools recognized by
the Government not limited to any race or
• Must own real estate in the Philippines nationality;
worth not less than P5000; or
• Resided continuously for 30 years or
• Must have some lucrative trade, more before filing of application;
profession or lawful occupation
• Widow and minor children of an alien
(5) LANGUAGE: Must be able to speak and who declared his intention to become
write English or Spanish and any one of citizen and dies before naturalization.
the principal Philippine languages
(2) Petition for naturalization must be filed.
(6) CHILDREN:
(3) The petition will be heard after
• Enrolled his minor children of school age publication in the Official Gazette or
in any of the public or private schools newspaper of general publication.
recognized by the Bureau of Private
(4) If the petition is approved, there will be a
Schools;
rehearing 2 years after the promulgation
of the judgment awarding naturalization

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(5) Taking of the oath of allegiance to (5) By having been declared by competent
support and defend the Constitution and authority, a deserter of the Philippine
the laws of the Philippines armed forces in time of war, unless
pardoned;
(6) By marriage of a woman to a foreigner, if
Derivative Citizenship [Sec. 15, Com. Act No.
by virtue of the laws of her husband’s
473]
country, she acquires nationality;
(1) Wife shall be deemed a citizen if she is:
(7) By cancellation of the certificate of
• Any woman now of may hereafter be naturalization
married to a citizen of the Philippines;
• It was obtained fraudulently or illegally;
and
• Person naturalized shall return to his
• Might herself be lawfully naturalized.
native country or to some foreign country
(2) Minor children born in the Philippines and establish his permanent residence
shall be considered citizens; therein within 5 years from the issuance
of the certificate;
(3) FOREIGN-BORN minor children
• Petition was made on an invalid
• IN THE PHILIPPINES at the time of
declaration of intention;
naturalization: shall automatically
become Philippine citizens; • Minor children failed to graduate from
the schools required through the fault of
• NOT IN THE PHILIPPINES at the time of
their parents either by neglect to support
naturalization: deemed a Filipino citizen
them or by transfer to another school;
only during his minority. Unless, he
begins to reside permanently in the • Naturalized citizen allowed himself to be
Philippines when still a minor. used as a dummy
(4) FOREIGN-BORN children AFTER
NATURALIZATION are considered
citizens if: A.3. PROBLEMS IN APPLYING
NATIONALITY PRINCIPLE
• He registers himself as a Philippine
i. Dual or Multiple Citizenship
citizen; and
An individual can be claimed as a national of
• Take the necessary oath of allegiance; 2 or more states pursuant to the rule that
• Within 1 year from reaching the age of each State determine who its own nationals
majority are. [Hague Convention on Conflict of National
Laws]
Examples:
Loss of Citizenship
• Child born of parents who are nationals
(1) By naturalization in foreign countries; of a country applying jus sanguinis in a
(2) By express renunciation of citizenship; country applying jus soli principle;
(3) By subscribing to an oath of allegiance to • Citizen who marries an alien may acquire
support the constitution or laws of a the citizenship of his/her spouse if the
foreign country upon attaining 21 years of spouse’s national law allows
age or more, subject to certain
o Not followed under Philippine
exceptions;
law – Filipino spouse retains
(4) By rendering service to, or accepting Philippine citizenship unless by
commission in the armed forces of a his or her act or omission, he/she
foreign country, subject to certain is deemed to have renounced it
exceptions;
ii. Statelessness

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• De jure – an individual who has been Under private international law


stripped of his nationality by his own
• The place with which a person has a
former government without having an
settled connection for certain legal
opportunity to acquire another
purposes, either because his home is
• De facto – an individual possessed of a there or because that place is assigned to
nationality but whose country does not him by law.
give them protection outsider their own
• The place of his true, fixed permanent
territory. Commonly known as refugees.
home and principal establishment, and to
• When a child is born in a country which, whenever he is absent, he has the
following jus sanguinis principle of intention of returning.
parents whose national law follows jus
• To acquire a domicile, there must be
soli principle.
concurrence of intention to make it one’s
Remedies domicile and physical presence.
• Convention on the Status of Refugees
provided some basic rights of stateless B.2. GENERAL RULES ON DOMICILE
persons.
Rules on Domicile
• Convention on the Reduction on
Statelessness • No person shall be without a domicile.
• Enumerates certain conditions such as o A person’s domicile of origin
marriage, divorce, adoption, prevails until he acquires a new
naturalization, expatriation, under which domicile.
an individual would not lose nationality at • A person can have only one domicile for a
the risk of becoming stateless, unless a given purpose or a given time under the
new nationality is provided. law of a particular State.
• Prohibits states from depriving their o General Rule: A person cannot
nationals of their identity as punishment have two simultaneous domiciles.
or a discriminatory instrument for
political, religious or ethnic reasons o Exception: Domicile may vary
depending on the purpose (e.g.
domicile for divorce will be
B. DOMICILE different from domicile for the
purpose of running for public
office.)
B.1. DEFINITION • It establishes a connection between a
Domicile is defined by municipal law person and a particular territorial unit.
(Philippine Law) and private international law. • The burden of proving a change of
Under municipal law domicile is upon whoever alleges that a
change has been secured.
• For the exercise of civil rights and the
fulfillment of civil obligations, the o Without overwhelming evidence
domicile of natural persons is the place of to show a change of domicile, the
their habitual residence. [Art. 50, Civil court will decide in favor of the
Code] continuance of an existing
domicile.
• For juridical persons: domicile is
determined by the law creating or
recognizing it. In the absence thereof it B.3. KINDS OF DOMICILE
shall be understood to be the place • Domicile of origin – refers to a person’s
where their legal representation or place domicile at birth.
of business is.
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o Legitimate Child – domicile of (c) Separation


father
(d) Adoption
o Illegitimate Child – domicile of
(e) Legitimation
mother
(f) Emancipation
o Emancipated Child – may acquire
domicile of choice (7) Succession (both testate and
intestate)

• Domicile of choice
Capacity
o Voluntary domicile, freely chosen
by a person sui juris The union of the following produces complete
civil capacity:
o Acquired by the concurrence of
physical presence in the new • Juridical capacity – the fitness of a man to
place and unqualified intention to be the subject of legal relations.
make that place one’s home
• Capacity to act – the power to do acts
• Constructive domicile with juridical effects.
By operation of law, a domicile is assigned to
a person legally incapable of choosing their C.2. LEGISLATIVE JURISDICTION
own domicile. Included are minors, and the DISTINGUISHED FROM JUDICIAL
mentally disabled. JURISDICTION
Status, once established by the personal law
of the party, is given UNIVERSAL
C. PRINCIPLES ON PERSONAL STATUS RECOGNITION.
AND CAPACITY

C.3. BEGINNING AND END OF


C.1. DEFINITION PERSONALITY
Personal status • The determination of the exact moment
• Includes both condition and capacity personality begins is referred to the
individual’s personal law.
• Embraces such matters as:
• A declaration of death issued by a
(1) The beginning and end of human competent court is considered valid for all
personality purposes. Upon the death of a person,
(2) Capacity to have rights in general some of his rights and obligations are
totally extinguished while others are
(3) Capacity to engage in legal passed on to his successors.
transactions
(4) Protection of personal interests C.4. ABSENCE
(5) Family relations, particularly the Three ways of addressing conflict of laws
relations between: problem regarding absence:
(a) Husband and wife (1) There is a rebuttable presumption that a
(b) Parent and child person is dead when he has been absent
for a number of years
(c) Guardian and ward
(2) A person’s unexplained absence is
(6) Transactions of family law, especially judicially investigated and established
(a) Marriage which results in legal effects similar to
those of death
(b) Divorce
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(3) A judicial decree shall have to be issued


declaring the person dead before the IV. Choice of Law
legal effects of death take place.
Problems
The Philippines follows the first.

A. CHOICE-OF-LAW IN FAMILY
C.5. NAME RELATIONS
General Rule: No person can change his
name or surname without judicial authority. Laws relating to family rights and duties, or
Exceptions (according to Jurisprudence): to the status, condition and legal capacity
of persons are binding upon citizens of the
(1) That the name is ridiculous or tainted Philippines, even though living abroad. [Art.
with dishonor or extremely difficult to 15, Civil Code]
pronounce.
(2) When the change is necessary to avoid
confusion This follows the principle of LEX NATIONALII.
(3) When the right to a new name is a
consequence of a change in status A.1. MARRIAGE
(4) A sincere desire to adopt a Filipino name
to erase signs of a former alien
nationality which unduly hamper social i. Philippine Policy on Marriage and the Family
and business life. In case of doubt, courts will apply FORUM
Whether an alien’s change of name is valid law because marriage is greatly influenced by
DEPENDS SOLELY ON HIS PERSONAL LAW. the values of society. (Prof. Elizabeth
Pangalangan)
This policy is expressed in various laws, e.g.:
C.6. AGE OF MAJORITY
Marriage, as an inviolable social institution,
Age of majority is determined by the
is the foundation of the family and shall be
individual’s personal law.
protected by the State. [Sec. 2, Art. XV of the
1987 Constitution]
C.7. CAPACITY
• Capacity to act is governed by his In case of doubt, all presumptions favor the
personal law. solidarity of the family. Thus, every
intendment of law or facts leans toward the
• The incapacities attached to his legal validity of marriage, the indissolubility of
status go with him wherever he is. the marriage bonds, the legitimacy of
children, the community of property during
the marriage, the authority of parents over
their children, and the validity of defense
for any member of the family in case of
unlawful aggression. [Art. 220, Civil Code]

ii. Extrinsic Validity of Marriage: Lex Loci


Celebrationis
• Covers questions relating to formalities or
“external conduct required of the parties
or of third persons especially of public

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officers, necessary to the formation of a governs questions of intrinsic validity, the


legally valid marriage.” above are exceptions to lex loci celebrationis
because they are controlled by lex nationalii.
• All States recognize as valid marriages
celebrated in foreign countries if they
complied with the formalities prescribed iii. Intrinsic Validity of Marriage: Personal Law
therein [The Hague Convention] of the Parties – Lex Nationalii or Lex Domicilii
• All marriages solemnized outside the Refers to the capacity or general ability of a
Philippines in accordance with the laws in person to marry (e.g. age requirement and
force in the country where they were parental consent).
solemnized, and valid there as such, shall
also be valid in this country. [Art. 26, par. Consular marriages
1, Family Code] • Marriage celebrated by a diplomatic
• Formal Requisites under Philippine Law: agent or consular official in accordance
[Art 3, Family Code] with his state law shall be considered
valid as long as it is not prohibited by the
(1) Authority of the solemnizing officer state of celebration. [Art. 9, Hague
(2) A valid marriage license except in cases Convention on Validity of Marriages]
provided in Chapter 2 of this Title; and • Under Philippine law, marriage between
(3) A marriage ceremony which takes place spouses with at least 1 Filipino officiated
with the appearance of the contracting by the Philippine consul general, consul
parties before the solemnizing officer and or vice consul must comply with the
their personal declaration that they take FORMAL AND INTRINSIC
each other as husband and wife in the REQUIREMENTS under Philippine law.
presence of not less than two witnesses o Valid marriage license and due
of legal age. publication and registration
• Exceptions to the rule of lex loci o Alien must comply with marriage
celebrationis: requisites under his national law
(1) Either/both parties are below 18 years old and submit a certificate of legal
capacity to contract marriage
(2) Bigamous or polygamous marriages issued by his diplomatic or
(3) Subsequent marriage without recording: consular office
(a) The judgment of nullity of the first o Stateless persons or refugees
marriage shall submit an affidavit in lieu of
the certificate of legal capacity.
(b) Partition and distribution of the
properties of the spouses
(c) Delivery of the children’s presumptive iv. Effects of Marriage
legitimes Personal Relations Between the Spouses: Lex
(4) Mistake as to identity of the contracting Nationalii
party • Includes mutual fidelity, respect,
(5) One of the parties was psychologically cohabitation, support and the right of the
incapacitated to comply with the wife to use the husband’s family name.
essential marital obligations
• Governed by the national law of the
(6) Incestuous parties.
(7) Void by reason of public policy • If the spouses are of different
The abovementioned involve the question nationalities, generally, the national law
capacity to marry, which is a substantive of the husband may prevail if not contrary
requirement for marriage. Since personal law to law, customs and good morals of the
form.
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• Under Philippine law, both husband and


wife have the right to fix the family i. Divorce Decrees Obtained by Filipinos
domicile.
General Rule: Decrees of absolute divorce
obtained by Filipinos abroad are not valid and
Property Relations of Spouses are not recognized in Philippine jurisdiction.
According to The Hague Convention on the
Law applicable to Matrimonial Property Exception: If decree is obtained by alien
Regimes the governing law: spouse capacitating him to marry, the Filipino
• Internal law designated by the spouses spouse shall have capacity to marry. [Art. 26,
before the marriage; or Family Code]
• In the absence thereof, the internal law of
the state in which both spouses fix their ii. Validity of Foreign Divorce Between
habitual residence. Foreigners
PRINCIPLE OF IMMUTABILITY – the This will be recognized in the Philippines
applicable law continues notwithstanding under the principle of international comity,
any change of their nationality or habitual provided it does not violate a strongly held
residence. [Art. 7, The Hague Convention on policy of the Philippines.
Matrimonial Property Regime]

A.3. ANNULMENT AND DECLARATION OF


Under Philippine law, absent a contrary NULLITY
stipulation in a marriage settlement, property
relations are governed by Philippine law [Art. Grounds
80, Family Code] • Based on the defects at the time of the
Exceptions: celebration of the marriage
o Both spouses are aliens • Traditional approach: LEX LOCI
CELEBRATIONIS
o With respect to extrinsic validity
of contracts affecting property • Modern Approach: LAW OF THE
not situated in the Philippines MARITAL DOMICILE because it is
and executed in the country considered to have the most significant
where property is located interest in the status of the spouses.
o With respect to extrinsic validity Jurisdiction
of contracts entered into in the
• Lex loci celebrationis or Law of marital
Philippines but affecting property
situated in a foreign country domicile.
requiring different formalities • However, court must acquire personal
jurisdiction over the parties to grant an
annulment decree. [Whealton v.
A.2. DIVORCE AND SEPARATION Whealton]

• Grounds for divorce occur after the A.4. PARENTAL RELATIONS


marriage celebration and are dictated by • Includes paternity which is the civil status
the LEX FORI. of the father or mother with respect to the
• Absolute – termination of legal child and filiation which is the status of
relationship between spouses by an act of the child in relation to his parents.
law • Legitimacy of the child is submitted to
• Limited – separation from bed and board the personal law of the parents which is
either domiciliary or nationality.
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o In the Philippines, it is (a) LEX DOMICILII


determined by the national law of
(i) Rights over movables
the parents.
are governed by the
o If the parents belong to different law of owner’s
nationalities, it is determined by domicile
the national law of the father.
(ii) For simplicity and
i. Determination of Legitimacy of a Child convenience because
it is difficult to
Kinds of filiations
anticipate where they
(1) Natural may be situated at a
given time
(a) Legitimate – governed by the
personal law of the father (b) LEX SITUS
(b) Illegitimate – governed by the (i) Based on the state’s
personal law of the mother power over its
territory
(2) Adopted
(ii) State where property
is located has the sole
ii. Parental Authority over the Child power to decide the
validity and effects of
• Most countries follow the personal law of
transfer of the
the father.
property
• In the Philippines, joint exercise of (c) LEX LOCI ACTUS
parental authority by the father and
mother (Art. 211, Family Code) (i) Law of the place
where the transaction
was completed
A.5. ADOPTION
(d) PROPER LAW OF THE
Process of adoption - governed by LEX FORUM
DOMICILII
(i) Law of the state
having the most real
B. CHOICE OF LAW IN PROPERTY connection with the
transfer.
Under Philippine Law
B.1. THE CONTROLLING LAW
• Both movables and immovables are
General Rules governed by LEX SITUS [Art. 414, Civil
• Immovable: LEX SITUS Code]
o Determined by the law of the o Traditional approach – physically
place where the land is situated part of the country and subject to
the laws
o Connecting factor is immovable
itself and not the parties o Modern approach – situs is the
place most closely and
• Movable: LEX DOMICILII, LEX SITUS, or significantly related to the issue
LEX LOCI ACTUS, PROPER LAW OF THE
FORUM • Conflict arises when property is located in
a foreign country and the foreign country
Kinds of Movables: has a law that distinguishes between real
• Choses in possession – tangible objects and personal property.

• Choses in action – intangible objects

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B.2. CAPACITY TO TRANSFER OR ACQUIRE that the law which governs the contract
PROPERTY from which the debt arises shall also
govern the transfer of the debt.
Real property – governed by the law of the
place where the property is located iv. Corporate Shares of Stock
• For tax purposes – domicile of the
B.3. EXTRINSIC AND INTRINSIC VALIDITY corporation
OF CONVEYANCES • For sale – place where the title to the
Formalities and effects of conveyance – goods passes from the seller to the buyer
governed by LEX SITUS. The validity and
effect of conveyance of property are treated
as a question of property rather than contract. C. CHOICE OF LAW IN CONTRACTS

B.4. EXCEPTION TO LEX SITUS RULE C.1. EXTRINSIC VALIDITY OF CONTRACTS

• The transaction does not affect transfer LEX LOCI CELEBRATIONIS [Art. 17, Civil Code]
of title to/ownership of the land – LEX
INTENTIONIS or LEX VOLUNTATIS
C.2. INTRINSIC VALIDITY OF CONTRACTS
• Contracts where real property is offered
by way of a security for the performance i. Lex Loci Contractus
of an obligation such as a loan. • Law of the place of making.
o LOAN – covered by rules on • Looks into where “the last act is done
ordinary contracts which is necessary to bring the binding
o MORTGAGE – LEX SITUS agreement into being so far as the acts of
the parties are concerned.”
• Testate or intestate succession and
capacity to succeed – LEX NATIONALII
ii. Lex Loci Solutionis
B.5. SITUS OF CERTAIN PROPERTIES Law of the place of performance governs all
i. Situs of Personal Property for Tax Purposes matters relating to the:

• The maxim mobilia sequuntur personam • Time


has been viewed as a mere fiction of law • Place and manner of performance
having its origins in considerations of
general convenience and public policy. It • Sufficiency of performance
cannot be applied to limit the right of the • Valid excuses for non-performance
state to tax property within its jurisdiction.
It yields to established facts of legal
ownership, actual presence, and control iii. Lex Loci Intentionis
elsewhere, and cannot be applied if it
would result in inescapable and patent Law intended by the parties.
injustice. • Intent may be expressed in a choice-of-
ii. Situs of Money law provision, unless contrary to law,
morals, good customs, public order or
• Where such funds are located physically public policy of the Philippines [Art. 1306,
or where the institution holding such Civil Code]; or
funds is located
• Be judged by their contemporaneous and
iii. Situs of Debts subsequent acts
• Unsettled in Philippine jurisdiction,
however, Prof. Pangalangan suggests
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C.3. CAPACITY TO ENTER INTO • Public policy deemed written into


CONTRACTS contracts impressed with public interest
Governed by the personal law of the parties – • Cognovit Clauses / Confession of
LEX NATIONALII or LEX DOMICILII Judgment Clauses – debtor may agree to
be subject to the jurisdiction of a specific
court in case of breach or default in
C.4. CHOICE OF LAW ISSUES IN payment.
CONFLICTS CONTRACTS CASES

D. CHOICE OF LAW IN WILLS,


i. Choice of Forum Clause SUCCESSION AND ADMINISTRATION
Under the principle of freedom of contract, OF ESTATES
parties may stipulate the law to govern their
contract.
D.1. EXTRINSIC VALIDITY OF WILLS
• Questions of venue, not jurisdiction
Includes age, testamentary capacity of the
• Includes arbitration, not only choice of testator and the form of the will.
court.
ii. Contracts with Arbitration Clause
Filipino nationals
Arbitration clause – a provision in a contract
stipulating that any dispute arising from the • LEX NATIONALII – formalities prescribed
contract shall be submitted to a particular under Philippine law
body for arbitration.
• LEX LOCI CELEBRATIONIS – formalities
established by the law of the country
where the will is executed [Art. 17 and 815,
C.5. ADHESION CONTRACTS
Civil Code]
Contracts that are not negotiated by the
Aliens
parties and drafted by only one dominant
party. The only participation of the other • LEX NATIONALII [Art. 816 and 817, Civil
party would be to affix his signature Code]
General Rule: Not void per se • LEX DOMICILII
Exception: The court may not recognize the • LEX LOCI CELEBRATIONIS
law stipulated and invoke public interest or
public policy, when there is an undue Joint Wills
advantage made by a dominant party. • By Filipinos: VOID under Philippine law
on the ground of public policy. [Art. 818,
Civil Code]
C.6. LIMITATIONS TO CHOICE OF LAW
• By Foreigners: VALID UNLESS it affects
• Parties may not select a law that has no heirs in the Philippines.
connection at all with the transaction or
the parties
D.2. INTRINSIC VALIDITY OF WILLS
• If the law selected should change, the law
as changed will govern. • Governed by the national law of the
decedent [Art. 16, Civil Code]
o EXCEPT: If the change is so
revolutionary that it was never • Includes issues of substance such as
contemplated by the parties order of succession, amount of
successional rights and intrinsic validity
• Should not be interpreted to oust the of testamentary provisions [Art. 16, Civil
jurisdiction court already acquired over Code]
the parties and the subject matter
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E.1. LEX LOCI DELICTI COMMISSI FOR


D.3. INTERPRETATION OF WILLS TORTS
• Governed by the national law of the • Law of the place where the alleged tort
decedent [Art. 16, Civil Code] was committed
• Choice-of-Law
D.4. REVOCATION
o Common Law – place where the last
i. Done in the Philippines event necessary to make an actor
liable occurs; vested rights
• Philippine Law
o Civil Law – place where tortious
ii. Done outside the Philippines, by a person
conduct was committed
domiciled in the Philippines
• Traditional View on Jurisdiction – an
• LEX DOMICILII – Philippine Law
actor liable by LEX LOCI DELICTI is liable
• LEX LOCI ACTUS – Law of the place of everywhere
revocation
• LEX LOCI CELEBRATIONIS – Law of the E.2. MODERN THEORIES ON FOREIGN
place where the will was made [Balane] TORT LIABILITY
iii. Done outside the Philippines, by a Non-
domiciliary i. The Most Significant Relationship
• LEX LOCI CELEBRATIONIS – Law of the Considers the state’s contacts with the
place where the will was made occurrence and the parties.
• LEX DOMICILII – Law of the place where ii. Interest Analysis
testator was domiciled at the time of
revocation Considers the relevant concerns the state
may have in the case and its interest in
having its law applied on that issue.
D.5. PROBATE
iii. Cavers’ Principle of Preference
• FORUM LAW governs because
Considers justice and social expediency
disallowance is essentially procedural in
character
• However, the court will look into the law E.3. FOREIGN TORT CLAIMS
of the foreign state where the will was Tortious liability is transitory - the liability
made as to whether the extrinsic resulting from the conduct is “deemed
requirements in the execution of the will personal to the perpetrator of the wrong,
have been complied with. following him whithersoever he may go, so
that compensations may be exacted from him
D.6. ADMINISTRATION OF ESTATES in any proper tribunal which may obtain
jurisdiction of the defendant’s person, the
• Nationality and domicile does not affect right to sue not being confined to the place
administration where the cause of action arises.”
• Authority of the administrator or executor
is limited to the authority of the court that
appointed such. E.4. DISTINGUISHING BETWEEN TORTS
AND CRIMES
TORTS CRIMES
E. CHOICE OF LAW IN TORTS AND
CRIMES Transitory Local
Personal to the Injury to the state

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tortfeasor where committed (3) Crimes committed by Philippine nationals


abroad under Art. 2 of the RPC.
Injury to an individual Affront against
who may be situated in sovereignty and good (a) On a Philippine ship or airship
any place order of the State (b) Forgery or counterfeit any coin or
where it occurs currency note of the Philippine
Amenable to suit in Can be sued only Islands or obligations and securities
whatever jurisdiction he where crime was issued by the Government of the
is found committed Philippine Islands
Torts law assigns the Penal laws are (c) Introduction of those mentioned
liability to perpetrators promulgated to above into the Philippines
in order to indemnify punish and reform the (d) Public officers or employees
the victim for injuries perpetrators and eter committing an offense in the exercise
sustained them and others from of their functions
violating the law
(e) Crimes against national security and
the law of nations, defined in Title
E.5. LEX LOCI DELICTI FOR CRIMES One of Book Two of the RPC.
General rule: law of the place where the
crime was committed based on territoriality F. CHOICE OF LAW AFFECTING
principle CORPORATIONS AND OTHER
JURIDICAL ENTITIES
• An act is punishable if it has been made
punishable as a crime by law. This is
premised on nullum crimen sine lege.
F.1. CORPORATIONS
• Developments in public international law
now includes acts considered as a crime
under international law. Corporation
Exceptions to lex loci delicti: It is an artificial being created by operation of
law and possesses only the rights and powers
(1) Crimes committed by state officials, conferred upon it in its charter.
diplomatic representatives and officials of
recognized international organizations
(2) Crimes committed on board foreign Foreign Corporation
vessels even if it is within the territorial • One formed, organized and existing
waters of the coastal state, except: (Art. under the laws of a state other than those
27 of UNCLOS) of Philippines; such laws allowing Filipino
(a) Consequences extend to the coastal citizens and corporation to do business
state there
(b) Disturbs the peace or good order of • It shall have the right to transact business
the country in the Philippines after it shall have
(c) Assistance of local authorities obtained a license in accordance with the
requested by the master of the ship or Corporation Code and a certificate of
diplomatic agent or consular officer authority from the appropriate
of the flag state government agency.

(d) If such measures are necessary for • 4 Theories: [Bank of Augusta v. Earle, 38
the suppression of illicit traffic in U.S. 519, 1839]
narcotic drugs or psychotropic o A corporation has no legal status
substances. beyond the bounds of sovereignty
within which it was created

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▪ EXCEPTION: It can act with If a foreign corporation is granted a license to


another State’s express or operate in the Philippines, it acquires
implied consent. (Consent domicile here.
Doctrine)
o A corporation cannot exercise powers
iv. Jurisdiction over Foreign Corporations
not granted by its corporate charter
or by the laws of the state of • Consent Doctrine – a foreign corporation
incorporation shall be recognized and allowed to
o No state is under any obligation to transact business in any state which gives
adhere to the doctrine of comity. It its consent.
has the power to refuse to recognize • Under Philippine law, this doctrine is
or prevent the foreign corporation established in Sections 125, 126, 127 and
from acting within its jurisdiction 128 of the Corporation Code.
o A state is not obliged to grant the • Foreign corporations doing business in
foreign corporation privileges and the Philippines are bound by Philippine
immunities common to citizens of law except for: [Art. 129, Corporation
that state Code]
i. Personal law of a Corporation (1) Provisions for creation, formation,
• Law of the state where it is incorporated organization or dissolution

• Fixes the domicile of the corporation and (2) Provisions which fix the relations
determines the capacity to enter into liabilities, responsibilities or duties of
certain contracts stockholders, members, or officers of
the corporation
ii. Exceptions to the Rule of Incorporation Test
• Service upon foreign corporations doing
Constitutional and Statutory Restrictions business in the Philippines may be made
A state may exclude a foreign corporation on: [Rule 14, Section 14, Rules of Court]
from doing business within its territory, or o Resident agent
prescribe any conditions as a prerequisite.
o If none:
▪ Government official designated by
Control Test During War law;
Courts may pierce the veil of corporate ▪ Any of its officers or agent within
identity and look into the nationality of the the Philippines
controlling stockholders to determine the
“citizenship” of the corporation ▪ Summons through diplomatic
channels

iii. Domicile or Residence of Foreign


Corporations v. Right of Foreign Corporation to Bring Suit
and be Sued
Art. 51 of the Civil Code states:
• License to transact business in the
When the law creating or recognizing them, Philippines is a prerequisite for filing a
or any other provision does not fix the suit before Philippine courts. Such
domicile of juridical persons, domicile is: corporation may be sued or proceeded
• The place where their legal against before Philippine courts or
representation is established or administrative tribunals. [Section 133,
Corporation Code]
• Where they exercise their principal
functions • A foreign corporation which does
business without a license can still be
sued.
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(5) The exercise of some functions normally


incident to, and in progressive
vi. Exceptions to the License Requirement
prosecution of, commercial gain or of the
(1) Isolated Transactions purpose and object of the business
organization
• One which is occasional, incidental
and casual NOT DOING BUSINESS
• Not of a character or business to (1) Activities which do not bring any direct
indicate a purpose to engage in receipts or profits to the foreign
business corporations
• Does not constitute “doing business” (2) Mere investment as a shareholder in a
as contemplated by law domestic corporation and/or exercise of
rights as such investor
• There is no continuity of conduct and
intention to establish a continuous (3) Having a nominee director or officer to
business within the state. represent interests in such corporation

(2) Action to Protect Trademark, Trade Name, (4) Appointing a representative or distributor
Goodwill, Patent or for Unfair domiciled in the Philippines which
Competition transacts business in its own name and
for its own accounts
Based on equity considerations
(5) Publication of general advertisement
(3) Agreements Fully Transacted Outside the through any media
Philippines
(6) Maintaining of stocks of goods in the
The transaction must be wholly Philippines solely for the purpose of
celebrated and consummated abroad. having the same processed by another
(4) Counterclaim entity

Petition filed is merely a corollary defense (7) Consignment of equipment with a local
in a suit against it. company to be used in the processing of
products for export
(8) Collecting information in the Philippines
vii. Definition and Scope of “Transacting
Business” (9) Services auxiliary to an existing isolated
contract of sale which are not on a
i. Under the Foreign Business Registration continuing basis
Act and Foreign Investments Act, acts that
constitute DOING BUSINESS includes:
F.2. PARTNERSHIPS
(1) Soliciting orders, service contracts,
opening offices Governing Law

(2) Appointing representatives or distributors • LAW OF DOMICILE governs the


either determination of the entitlements and
limitations applicable to the partnership
(a) Domiciled in the Philippines
• PERSONAL LAW governs:
(b) Stay in the country for 180 days or
more o Legal capacity of foreign corporations
to contract
(3) Participating in the management,
supervision, or control of any domestic o Determination of the existence of the
business, firm, entity, or corporation in partnership
the Philippines o Determination of the grounds for
(4) Any other act that implies a continuity of dissolution and termination of the
commercial dealings or arrangements partnership

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• PHILIPPINE LAW governs:


V. Foreign Judgments
o Creation of their establishments in
the Philippines
o Mercantile operations A. RECOGNITION AND ENFORCEMENT
OF FOREIGN JUDGMENTS
o Jurisdiction of the courts of the
Philippines
Foreign Judgment
Extraterritorial enforcement of in personam • All decisions rendered outside the forum
judgments against partnership
• Encompasses judgments, decrees, and
• There is jurisdiction over the partnership orders of foreign governments and sister
or unincorporated association if under the states in a federal government
circumstances, there is jurisdiction over
Functions of Recognition and Enforcement
an individual
• Successful plaintiff may try to enforce
• A judgment against a partnership or
judgment in another state where
association is enforceable against its
defendant can be located if he fails to
assets in every state.
obtain satisfaction in the court which
granted it.
• Successful defendant may assert that
decision in order to preclude the plaintiff
from filing a suit on the same claim in
another forum.

A.1. DISTINCTION BETWEEN


RECOGNITION AND ENFORCEMENT

Recognition – passive act of giving effect to a


foreign judgment without necessity of filing
an action in the other forum.
Enforcement – requires filing of an action in
court wherein a new judgment must be
handed down.

A.2. BASES OF RECOGNITION AND


ENFORCEMENT OF FOREIGN JUDGMENTS

Comity – in order to obtain a reciprocal


treatment from the courts of other countries,
State are compelled to take foreign
judgments as they stand and to give them
Full Faith and Credit
Obligation of foreign judgment – derived from
the vested rights theory. It considers the
foreign judgment as imposing a duty or
obligation on the losing litigant.

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A.3. POLICIES UNDERLYING RECOGNITION iii. Judgment must be FINAL and EXECUTORY
AND ENFORCEMENT to constitue res judicata in another action
A foreign judgment that is merely
interlocutory or provisional, contemplating a
Res judicata
fuller investigation leading to a later final
A matter already settled cannot be relitigated. decision, creates no obligation on the forum
court to recognize or enforce it. (i.e. support
• Those who have contested an issue shall
and custody)
be bound by the result of the contest
• Matters once tried and decided with
finality in one jurisdiction shall be iv. PRECIPROCITY) State where foreign
considered as settled between the parties judgment was obtained allows recognition or
enforcement of Philippine judgements
• Prevents parties from litigating issues
that have been determined by a valid Reiteration of international comity
local judgment
Under Philippine law: [Rule 39, Section 40, v. Judgment must be for a fixed sum of money
Rules of Court]
Foreign judgment must specify performance
• Judgment or final order upon a SPECIFIC or delivery, otherwise, there is nothing for the
THING – renders it conclusive upon the forum court to enforce.
title to the thing
• Judgment against a PERSON –
vi. Judgment must NOT be CONTRARY to the
presumptive evidence of a right between
PUBLIC POLICY or GOOD MORALS of the
parties and their successors in interest.
country where it is to be enforced

A.4. REQUISITES FOR RECOGNITION OR


ENFORCEMENT vii. Judgement must NOT have been obtained
by FRAUD, COLLUSION, MISTAKE OF FACT
or MISTAKE OF LAW
i. Rendered by a court with JURISDICTION
over the PARTIES and the CASE • Decisions will not be disturbed, whether it
was reached through adversary
LEX FORI or the internal law of the forum proceeding or by default, in the absence
where the foreign judgment was rendered of fraud or collusion [Somportex v.
governs matters of remedy and procedure Philadelphia Chewing Gum Corp.]
such as service of process in determining
whether jurisdiction was properly obtained. • Grounds are decided by the court where
[Northwest Orient Airlines Inc. v. Court of enforcement is sought on the basis of its
Appeals and C.F. Sharp & Co. Inc., 241 SCRA internal law.
192, 1995]
• In personam jurisdiction is based on A.5. PROCEDURE FOR ENFORCEMENT
consent of the parties; or the relation of When a foreign judgment is recognized, it is
the parties or events to the forum not instantaneously executed as a judgment.
• In rem jurisdiction is based on the State’s THREE MODES OF ENFORCEMENT:
power over the property found within the
i. By filing a new action in the court where
territory
enforcement is sought
ii. Judgment must be VALID under the laws of
the court that rendered It • Filed in the proper court attaching an
authenticated copy of the foreign
judgment.

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• Authentication calls for the Philippine Nationality


Art. 15 CC and Art. 16
consul assigned to the country where the CC
foreign judgment was decreed to certify
Art. 50 CC and Art. 51
that it had been rendered by a court of Domicile
CC
competent jurisdiction.
Personal law
ii. Summary proceeding or Exequatur Personal Status
(Nationality or
procedure and Capacity
Domicile)
• A validation proceeding by the court
FAMILY RELATIONS
• It results in giving the foreign judgment Extrinsic Validity:
the same effect as a local judgment.
Lex loci celebrationis
(Art. 26 FC, 1st par.)
iii. Judgment Registration Exceptions: Art. 35(1),
• An authenticated copy of the foreign (4), (5), (6), FC; Art. 36,
judgment is filed in the registrar’s office FC; Art. 37 FC; Art. 38,
together with other proofs required by FC
domestic laws. Intrinsic Validity:
• It results in conversion of foreign Personal law
judgment into local one that is Marriage Lex nationalii (Art. 15
immediately executory. CC) or Lex domicilii
Personal relations of
the spouses – Personal
law
(lex nationalii or lex
domicilii) (Art. 15, CC)
Property relations – see
Art. 80 FC
Generally, lex rei sitae
Lex fori for grounds of
divorce
Divorce and In the Philippines, see
Separation Art. 26 FC
And Lex nationalii or lex
domicilii as basis for
Grounds for Legal adjudicative jurisdiction
Separation
(matrimonial
jurisdiction or domicile
of one spouse)
Traditional approach:
LEX LOCI
VI. SUMMARY OF Annulment and
Declaration of
CELEBRATIONIS

CONFLICTS OF LAW Nullity Modern approach: LEX


DOMICILII (marital
RULES domicile)

Parental relation Determination of


legitimacy: PERSONAL
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LAW (lex nationalii or Lex Nationalii; Lex


lex domicilii) Domicilii; Lex Loci
Celebrationis
Parental authority:
PERSONAL LAW of Lex Nationalii (Art. 16,
Intrinsic Validity
father par. 2 CC)
Adoption: PERSONAL Lex nationalii (based on
LAW nationality principle)
Interpretation of
PROPERTY Wills If terms are clear and
unambiguous, lex
Immovables Lex situs intentionis
Lex domicilii, lex situs, If done outside by one
Movables lex loci actus, proper not domiciled in the
law of the forum Philippines
BUT in the Lex situs, be it real or Lex loci celebrationis or
Philippines personal property Lex domicilii
Extrinsic Validity: LEX If done outside by one
SITUS (Art. 16(1), CC) domiciled in the
Intrinsic Validity: LEX Philippines
Conveyances
SITUS (Art. 16(1), CC) Revocation Lex loci actus or Lex
Unless we can prove domicilii or lex loci
LEX INTENTIONIS celebrationis
CONTRACTS If done within the
Philippines
LEX LOCI
CELEBRATIONIS (Art. Lex loci actus – so
Extrinsic Validity 17 CC) Philippine law (in
accordance with civil
Exception: LEX code provisions)
INTENTIONIS
LEX FORI
LEX LOCI
CONTRACTUS Probate LEX LOCI
Intrinsic Validity CELEBRATIONIS
LEX LOCI SOLUTIONIS
If there is an effective
LEX INTENTIONIS choice of law – courts of
PERSONAL LAW, which the place where the
Capacity to enter can either be lex trust is being
into contract nationalii or lex administered
domicilii (Art. 15, CC) If there is no effective
Interpretation LEX INTENTIONIS Trusts choice of law – law that
will sustain the validity
WILLS, SUCCESSIONS, ADMINISTRATION OF of the trust (place of
ESTATES administration or
Filipino makes a will domicile)
abroad For testamentary trusts
Lex Nationalii; Lex Loci – follow rules on wills
Extrinsic Validity
Celebrationis TORTS AND CRIMES
Alien makes a will in LEX LOCI DELICTI
the Philippines Situs of the tort
place of injury or COMMISSI
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place of conduct
For crimes LEX LOCI DELICTI
CORPORATIONS AND JURIDICAL ENTITIES
Personal law of Place of incorporation
corporations (domicile)

Page 599 of 599

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