Civ Final

EFFECT AND APPLICATION OF LAWS
EFFECT AND APPLICATION OF LAWS Q: Are all laws required to be published?
Q: What is a law? A: GR: Yes. Publication is indispensable.
A: In its jural and concrete sense, law means a rule of XPNs:

conduct formulated and made obligatory by legitimate 1. Municipal Ordinances (governed by the Local
power of the state (Diaz, Statutory Construction, p. 1). Government Code)
2. Rules and regulations which are internal in
Q: When did the Civil Code take effect? nature.
3. Letters of Instruction issued by administrative
A: August 30, 1950 supervisors on internal rules and guidelines.
4. Interpretative regulations regulating only the
Q: When do laws take effect? personnel of administrative agency.
A: GR: Laws take effect after 15 days following the XPNs to the XPNs: Administrative rules and regulations
completion of their publication in the Official Gazette or that require publication:
newspaper of general circulation in the Philippines. 1. The purpose of which is to implement or enforce
existing laws pursuant to a valid delegation;
XPN: unless it is otherwise provided by the law. (Art. 2) 2. Penal in Nature;
3. It diminishes existing rights of certain individuals
Note: If the law provided a specific date for its effectivity, it
becomes effective only upon the lapse of said period following Note: If the law is not published, it shall not be effective. Non-
its complete publication and not before. publication is a violation of due process.
Q. How is the 15-day period computed? Q: Honasan questions the authority and jurisdiction of the
DOJ panel of prosecutors to conduct a preliminary
A: The 15-day period may either be on the 15th day or on investigation and to eventually file charges against him,
the 16th day depending on the language used by Congress claiming that since he is a senator with a salary grade of
in fixing the effectivity date of the statute. (Rabuya, p. 8) 31, it is the Office of the Ombudsman, not the DOJ, which
has authority and jurisdiction to conduct the preliminary
th
15 Day - If the law declares that it shall become investigation. DOJ claims that it has concurrent
effective “15 days after its publication” jurisdiction, invoking an OMB-DOJ Joint Circular which
outlines the authority and responsibilities among
th
16 Day - If the law declares that it shall be effective prosecutors of the DOJ and the Office of the Ombudsman
“after 15 days following its publication” in the conduct of preliminary investigations. Honasan
counters that said circular is ineffective as it was never
Q: What is meant by the phrase “unless it is otherwise published. Is OMB-DOJ Circular No. 95-001 ineffective
provided” in the provision on effectivity of laws? because it was not published?
A: The clause "unless it is otherwise provided" refers to the A: No. OMB-DOJ Circular No. 95-001 is merely an internal
date of effectivity and not to the requirement of circular between the two offices which outlines the
publication itself, which cannot, in any event be omitted. authority and responsibilities among prosecutors of the
This clause does not mean that the legislator may make the DOJ and of the Office of the Ombudsman in the conduct of
law effective immediately upon approval, or on any other preliminary investigations. It does not contain any penal
date without its previous publication. provision nor prescribe a mandatory act or prohibit any
under pain of penalty. Further, it does not regulate the
Note: Publication is indispensable in every case, but the legislature conduct of persons or the public, in general. As such
may in its discretion provide that the usual fifteen-day period shall therefore, it need not be published (Honasan, II v. The
be shortened or extended (Umali v. Estanislao, G.R. No. 104037,
Panel of Investigating Prosecutors of the Department of
May 29, 1992, [citing Tañada v. Tuvera, G.R. No. L-63915,
December29, 1986]). Justice, G.R. No. 159747, Jun. 15, 2004).
Q: When will the law take effect if it is made to take effect Q: What must be published in order to comply with the
“immediately” or “upon approval? publication requirement?
A: It shall take effect immediately after publication. The 15- A: Publication must be in full or it is no publication at all
day period after publication is dispensed with but since its purpose is to inform the public of the contents of
publication is not. In cases wherein the law states that it the law. The mere mention of the number of the
shall be effective upon approval, it likewise becomes presidential decree, the title of such decree, its
effective only after its complete publication and not whereabouts, the supposed date of effectivity, and in a
immediately after its signing by the President. mere supplement of the Official Gazette cannot satisfy the
publication requirement. This is not even substantial
UNIVERSITY OF SANTO TOMAS

1 FACULTY OF CIVIL LAW
CIVIL LAW
compliance (Tañada v. Tuvera, G.R. No. L-63915, A: An interpretative rule is designed to provide guidelines
December29, 1986). to the law which the administrative agency is in charge of
enforcing xxx Whether an administrative rule is merely
Q: Publication must be made in the Official Gazette or in a interpretative in nature, its applicability needs nothing
newspaper of general circulation. What is a newspaper of further than its bare issuance for it gives no real
general circulation? consequence more than what the law itself has already
prescribed. When the administrative agency goes beyond
A: merely providing for the means that can facilitate or render
1. It is published within the court’s jurisdiction least cumbersome the implementation of the law but
2. Published at regular intervals for disseminating local substantially increases the burden of those governed, it
news and general information. behooves the agency to accord at least to those directly
3. It has a bona fide subscription list of paying subscribers affected a chance to be heard and thereafter to be duly
4. It is not devoted to the interest or published for the informed.
entertainment of a particular class, profession, trade,
calling, race or religious denomination (Alvarez v. The said orders cannot be viewed simply as implementing
people, G.R. No. 192591, June 29, 2011). rules or directive measures revoking in the process previous
rulings of past commissioners xxx The due observance of
Q: A Local Budget Circular 55 issued by the DBM which the requirements of publication should not have been
reduced the monthly allowance given by Local ignored (CIR v. Lhuillier G.R No. 150947, 15 July 2003).
Governments to RTC and MTC judges was questioned in
this case. Petitioner judges filed a protest against the IGNORANCE OF THE LAW
notices. Is the circular valid?
Q: What is the presumption of knowledge of laws?
A: LBC 55 is void on account of its lack of publication.
Administrative rules and regulations must be published if A: GR: Everyone is conclusively presumed to know the law.
their purpose is to enforce or implement existing law Hence, ignorance of the law excuses no one from
pursuant to a valid delegation. Interpretative regulations compliance therewith (Art. 3).
and those merely internal in nature, that is, regulating only
the personnel of an administrative agency and the public XPNs:
need not be published. Neither is publication required of a. Mistake upon a doubtful or difficult question of
the so called LOIs issued by administrative superiors law may be the basis of good faith. [Art. 526 (3)]
concerning the rules or guidelines to be followed by their b. Art. 2155
subordinates in the performance of their duties (Judge c. Art. 1344
Dadole v. COA, G.R. No. 125350, December 3, 2002).
Q: Differentiate mistake of law from mistake of fact.
Q: The Sangguniang Bayan of Hagonoy Bulacan enacted an
ordinance which increased the stall rentals of the market A:
vendors in Hagonoy. Art. 3 of the said ordinance provided MISTAKE OF FACT MISTAKE OF LAW
that it shall take effect upon approval. The ordinance was Want of knowledge or
posted from November 4 to 25, 1996. In the last week of Want of knowledge of acquaintance with the laws
November 1997, petitioners were personally given copies some fact or facts of the land insofar as they
and were informed that it shall be enforced on January constituting or relating to apply to the act, relation,
1998. The petitioners contended that the subject the subject matter in hand. duty, or matter under
ordinance was not posted as required by law. Did the consideration.
ordinance comply with the rule of publication? When some facts which Occurs when a person
really exist are unknown or having full knowledge of the
A: An ordinance which increased the stall rentals of the some fact is supposed to facts come to an erroneous
market vendors has complied with the publication exist which really does not conclusion as to its legal
requirement when the same was posted in 3 conspicuous exist. effects
places since there was no newspaper of local circulation in Not excusable, even if in
the municipality which is in accordance with Sec. 188 of the Good faith is an excuse
good faith
LGC (Hagonoy v. Municipality, G.R. No. 137621 February 6,
2002). Note: Ignorance of a foreign law is a mistake of fact
Q: CIR issued a Memorandum Order 15-91 imposing a 5% Q: Eduardo was married to Ruby. He then met Tina and
lending investor’s tax on pawnshops. The BIR issued an proposed marriage, assuring her that he was single. They
assessment against Lhuillier demanding payment of got married and lived together. Tina, upon learning that
deficiency tax. Lhuillier contended that the said memo is a Eduardo had been previously married, charged Eduardo
new and additional tax measure on pawnshops which for bigamy for which he was convicted.
Congress should enact. Is the said memorandum valid
even without publication? Eduardo testified that he declared he was “single”
because he believed in good faith that his first wife was
already dead, having not heard from her for 20 years, and
2013 GOLDEN NOTES 2
that he did not know that he had to go to court to seek for proved (Estate of Boo v. Gee, G.R. No. 18081, March 3,
the nullification of his first marriage before marrying Tina. 1922).
Is Eduardo liable for the crime of bigamy? Note: Processual Presumption – if the foreign law is not properly
alleged and proved, the presumption is that it is the same as our
A: Yes. Eduardo is presumed to have acted with malice or own law (Estate of Suntay v. Suntay, G.R. No. 132524. December
29, 1998).
evil intent when he married Tina. As a general rule, mistake
of fact or good faith of the accused is a valid defense in a
RETROACTIVITY OF LAWS
prosecution for a felony by dolo; such defense negates
malice or criminal intent. However, ignorance of the law is
Q: Do laws have retroactive effect?
not an excuse because everyone is presumed to know the
law. It was the burden of Eduardo to prove that when he
A: GR: Laws shall have no retroactive effect. (lex prospicit,
married Tina, he was of the well-grounded belief that his
non respicit)
first wife was already dead. He should have adduced in
evidence a decision of a competent court declaring the
XPNs: TIN CREEP
presumptive death of his first wife as required by Art. 349
1. Tax laws
of the RPC, in relation to Art. 41 of the FC. Such judicial
2. Interpretative statutes
declaration constitutes proof that Eduardo acted in good
3. Laws creating New Substantive Rights
faith, and would negate criminal intent on his part when he
4. Curative Statutes
married the private complainant (Manuel v. People, G.R.
5. Remedial/procedural
No. 165842, November 29, 2005).
6. Emergency Laws
7. When Expressly provided
Q: Complainants who were connected with the Daily
8. Penal laws favorable to the accused provided,
Informer (a widely circulated newspaper in Western
accused is not a habitual criminal
Visayas) were charged before the MTC by Judge Pamonag
of the crime of libel. Respondent judge conducted a
XPNs to the XPNs: Constitutional limits where
preliminary investigation and thereafter issued warrants
retroactivity would result to: IE
for the arrest of the complainants. Complainants filed an
1. Impairment of obligation of contracts
administrative case against the judge for gross ignorance
2. Ex Post Facto Laws
of the law. They contended that the judge neither has
authority to conduct a preliminary investigation nor to
Note: In case of doubt, laws apply prospectively.
issue warrants for their arrest. The judge said that it was
his first libel case and that he issued the warrants in good
Q: May judicial decisions be given retroactive effect?
faith. Is the respondent guilty of gross ignorance of the
law?
A: No. When a doctrine of the Supreme Court is overruled
and a different view is adopted, the new doctrine should be
A: Judges are expected more than just cursory
applied prospectively and should not apply to parties who
acquaintance with statutes and procedural rules. They must
had relied on the old doctrine and acted on the faith
know the law and apply them properly in good faith. The
thereon. (Rabuya, p. 10)
provisions of Art. 360 of the RPC on the persons authorized
to conduct preliminary investigation in libel cases is so
Q: Does the Family Code contain a retroactivity clause?
elementary. Not to know it constitutes gross ignorance of
the law (Miaque v. Judge Pamonag, A.M. No. MTJ-02-1412.
A: Yes. Art. 256 of the FC provides that the Code shall have
March 28, 2003).
retroactive effect insofar as it does not prejudice or impair
vested or acquired rights in accordance with the NCC or
Q: Cheong Boo, a native of China died intestate in
other laws.
Zamboanga. He left a property worth P100,000. The estate
of the deceased was claimed on one hand by Gee, who
MANDATORY OR PROHIBITORY LAWS
alleged that he was a legitimate child by a marriage
contracted by Boo with Tan Dit in China in 1895. The
Q: What is the status of acts which are contrary to law?
estate was claimed, on the other hand, by Mora Adong
who alleged that she had been lawfully married to Boo in
A: GR: Acts executed against the provisions of mandatory
1896. Gee introduced in evidence a document in Chinese
or prohibitory laws are void. (Art. 5)
stating the marriage ceremony that took place in Amoy,
China. Is the document presented by Gee recognized here
XPNs: Where the law:
in the Philippines?
1. Makes the act valid but punishes the violator, e.g.
Marriage solemnized by a person not authorized
A: Ignorance of a foreign law is not ignorance of the law but
to do so;
of fact because such foreign law must be first alleged and
2. Itself authorizes its validity;
proved as a matter of fact, there being no judicial notice of
3. Makes the act merely voidable;
said foreign law. The Chinese marriage was not adequately

CIVIL LAW
4. Declares the nullity of an act but recognizes its 4. Waiver must Not be contrary to law, public order,
effects as legally existing, e.g. Child born after the public morals, etc.
annulment of marriage is considered legitimate. 5. When Formalities are required, they must be
complied with.
WAIVER OF RIGHTS
Q: What are some instances where waiver is considered
Q: What is a right? void?
A: It is a legally enforceable claim of one person against A: Waiver is considered void in such instances as: (i) waiver
another, that the other shall do a given act, or shall not do a of future support; (ii) waiver of political rights; (iii) waiver of
given act. (Pineda, Persons, p. 23) future inheritance especially if the waiver is intended to
prejudice creditors.
Q: What are the kinds of rights? Distinguish.
REPEAL OF LAWS
A:
1. Natural Rights – Those which grow out of the nature Q: What are the kinds of repeal? Distinguish.
of man and depend upon personality. e.g. right to life,
liberty, privacy, and good reputation A: Repeal may be:
2. Political Rights – Consist in the power to participate, 1. EXPRESS - if the law expressly provides for such
directly or indirectly, in the establishment or 2. IMPLIED – if the provisions of the subsequent law
administration of government. e.g. right of suffrage, are incompatible or inconsistent with those of the
right to hold public office, right of petition previous law, PROVIDED, it is impossible to
3. Civil Rights– Those that pertain to a person by virtue of reconcile the two laws.
his citizenship in a state or community. e.g. property
rights, marriage, equal protection of laws, freedom of Q: What are the two accepted instances of implied repeal?
contract, trial by jury (Pineda, Persons, p. 24)
a. Rights of personality or human rights; A:
b. Family rights; and 1. When the provisions in the two acts on the same
c. Patrimonial rights: subject matter are irreconcilably contradictory, in
i. Real rights which case, the later act, to the extent of the conflict,
ii. Personal rights. (Rabuya, p. 19) constitutes an implied repeal of earlier one; and
2. When the later act covers the whole subject of the
Q: May rights be waived? earlier one and is clearly intended as a substitute; thus
it will operate to repeal the earlier law (Carmelita
A: GR: Yes. Lledo v. Atty. Cesar V. Lledo, A.M. No. P-95-1167,
February 9, 2010).
XPNs:
1. If waiver is: Q: What is the rule on repeal of repealing laws?
a. Contrary to law, public order, public policy,
morals or good customs. A: It depends upon how the old law is repealed by the
b. Prejudicial to a third person with a right repealing law:
recognized by law. 1. If the old law is expressly repealed and repealing law is
2. If the right is: repealed: the Old law is not revived
a. A natural right, such as right to life. 2. If the old law is impliedly repealed and repealing law is
b. Inchoate, such as future inheritance. repealed: the Old law is revived.
Q: What are the elements of waiver of rights? JUDICIAL DECISIONS
A: EKI Q: Are judicial decisions considered laws in this

1. Must be an Existing right jurisdiction?
2. The one waiving such right must have Knowledge
of evidence thereof A: No. However, decisions of the Supreme Court, although
3. Intention to relinquish said right (Valderamma v. in themselves not laws, are nevertheless evidence of what
Macalde, G.R. No. 165005, September 16,2005). the laws mean.
Q: What are the requisites of a valid waiver? Q: When do judicial decisions form part of the law of the
land?
A: AFCUNF
1. Waiving party must Actually have the right he is A: As of the date of the enactment of said law. This is so
renouncing. because the Supreme Court’s interpretation merely
2. He must have Full capacity to make the waiver establishes the contemporaneous legislative intent that the
3. Waiver must be Clear and Unequivocal construed law purports to carry into effect.

2013 GOLDEN NOTES 4
Note: When a doctrine is overruled and a different view is Q: May courts apply customs in deciding cases?
adopted, the new doctrine should be applied prospectively and
should not prejudice parties who relied on the old doctrine. A:
1. In civil cases, customs may be applied by the courts in
Q: What is the Doctrine of Stare Decisis? cases where the applicable law is: SOI
a. Silent
A: It is adherence to judicial precedents. Once a question of b. Obscure
law has been examined and decided, it should be deemed c. Insufficient
settled and closed to further argument.
Note: Provided said customs are not contrary to law, public
Note: This doctrine however is not inflexible, so that when in the morals, etc.
light of changing conditions, a rule has ceased to be beneficial to
the society, courts may depart from it.
2. In criminal cases, customs cannot be applied because
nullum crimen nulla poena sine lege (There is neither
DUTY TO RENDER JUDGMENT
crime nor punishment, without a law).
Q: Can the Court decline to render judgment by reason of
Q: In case of silence, obscurity or insufficiency of the law
silence of the law?
with respect to a particular controversy, what rules shall
be applied? (1961, 1971, 1977 Bar Question)
A: No. No judge or court shall decline to render judgment
by reason of the silence, obscurity or insufficiency of the
A: If the law is silent, or is obscure or insufficient with
law (Art. 9).
respect to a particular controversy, the judge shall apply
the custom of the place, and in default thereof, the general
Note: However, this duty is not a license for courts to engage in
judicial legislation. The duty of the courts is to apply or interpret principles of law and justice.
the law, not to make or amend it.
Q: What should first be established before such custom
PRESUMPTION AND APPLICABILITY OF CUSTOM could be considered a source of right?
Q: What is the presumption in case there is doubt in the A: The custom must be proved as a fact, according to the
interpretation or application of laws? rules of evidence (Art. 12, NCC). This fact, however, should
possess the following requisites: (1) plurality of acts, (2)
A: It is presumed that the lawmaking body intended right uniformity of acts, (3) general practice by the great mass of
and justice to prevail (Art. 10). the people of the country or community; (4) continued
practice for a long period of time; (5) general conviction
Q: What are customs? that the practice is the proper rule of conduct; and (6)
conformity with law, morals or public policy (1 Tolentino.
A: These are rules of conduct, legally binding and Civil Code, p. 39; 1 Manresa 82).
obligatory, formed by repetition of acts uniformly observed
as a social rule. LEGAL PERIODS
Q: How are customs proved? Q: How do you compute the periods?
A: GR: Must be proved as a fact, according to the rules on A: Year – 12 calendar months (CIR v. Primetown Property
evidence. (Art. 12) Group, Inc., 531 SCRA 436))
Month – 30 days, unless designated by their name, in
XPN: Courts may take judicial notice of a custom if which case, they shall be computed according to the
there is already a decision rendered by the same court number of days which they respectively have.
recognizing the custom. Day – 24 hours
Night time – from sunset to sunrise
Q: What are the requisites to make a custom an obligatory Week – 7 successive days regardless of which day it
rule? would start
Calendar week – Sunday to Saturday
A: P-TOP
1. Plurality or Repetition of acts Q: What is the manner of computing a period?
2. Practiced for a long period of Time
3. The community accepts it as a proper way of A: The first day shall be excluded, and the last day included.
acting, such that it is considered Obligatory upon
all. Q: In a case of violation of the Copyright law filed against
4. Practiced by the great mass of the social group. her, Soccoro countered by saying that since the crime was
found out on September 3, 1963, while the information
was filed on September 3, 1965, the crime had already

CIVIL LAW
prescribed, since 1964 was a leap year. Has the crime c. Legal capacity of persons are binding upon
prescribed? citizens of the Philippines even though living
abroad (Art. 15)
A: Yes. With the approval of the NCC we have reverted to
the provisions of the Spanish Civil Code in accordance with XPNs:
which a month is to be considered as the regular 30-month a. In case of divorce obtained validly by an alien
and not the solar or civil month with the particularity that, pursuant to the rules that governs his
whereas the Spanish Civil Code merely mentioned 'months, country, the Filipino spouse shall be
days or nights,' ours has added thereto the term 'years' and considered also as divorced (Van Dorn v.
explicitly ordains in Art. 13 that it shall be understood that Romillo, Jr., 139 SCRA 139, 1985).
years are of three hundred sixty-five days (People v. Ramos b. Domiciliary rule applies to stateless persons
GR L-25265, May 9, 1978, Ramos v. Ramos GR L-25644,
May 9, 1978). Note: the basis for determining the personal law
of an individual is either the Domiciliary Rule
However, when the year in question is a leap year, the 365 (Domicile) or Nationality Rule (Citizenship)
day rule is not followed because February 28 and 29 of a
leap year should be counted as separate days in computing 3. REAL STATUTES – Laws on Property
periods of prescription (NAMARCO v. Tuazon, GR No L- GR: Lex Rei Sitae – Real property as well as personal
29131, August 27, 1969). property is subject to the law of the country where it is
situated. (Art. 16)
Q: What is the rule if the last day falls on a Sunday or a
legal holiday? XPNS:
A: It depends. If the act to be performed within the period a. Succession as to order of succession, amount of
is: successional rights and intrinsic validity of the
testamentary provisions - governed by national law (in
1. Prescribed or allowed by: ROO Philippines) not lex situs
a. the Rules of Court
b. an Order of the court; or b. Contracts involving real property but do not deal
c. any Other applicable statute with title or real rights over the property, the issue
being the contractual rights and liabilities of parties -
The last day will automatically be the next working governed by the proper law of the contract (lex loci
day. voluntatis or lex loci intentionis)
2. Arises from a contractual relationship – the act will still c. In contracts where real property is given as security
become due despite the fact that the last day falls on a by way of mortgage to secure a principle contract (i.e.
Sunday or a legal holiday. loan) - loan is governed by the proper law of the
contract while the mortgage is governed by the lex
CONFLICT OF LAWS situs
Q: When, where and upon whom do the following laws d. While the validity of the transfer of land must be
apply? determined by the lex situs, the validity of the contract
to transfer is determined by the proper law of the
A: contract
1. PENAL LAWS
GR: TERRITORIALITY RULE - Penal laws and laws of 4. Law governing extrinsic validity of contracts, wills and
public security and safety shall be obligatory upon all public instruments.
who live or sojourn in the Philippine territory (Art. 14) GR: Lex loci celebrationis (Art. 17) – forms and
solemnities of contracts, wills and other public
XPNs: Treaty stipulations, Principle of Public instruments shall be governed by the laws of the
International, Laws of Preferential Application. country in which they are executed
e.g. Ambassadors, Ministers, International
agencies enjoying diplomatic immunity XPNs: Philippine law shall apply in the following
cases even though performed abroad:
Note: Consul is not entitled to the privileges and a. Acts are executed before the diplomatic or
immunities of ambassadors or ministers. consular officials of the Philippines.
b. Prohibitory laws concerning persons, their
2. STATUS LAWS acts or property, and those which have for
GR: NATIONALITY RULE - Laws relating to their object public order, public policy and
a. Family rights and duties good customs. (Art. 17)
b. Status and condition

2013 GOLDEN NOTES 6
Q: The second clause of the will of Joseph, a Turkish as if executed according to the laws of the Philippines.
citizen and a resident of the Philippines, states that: (Art. 817)
xxx, it is my wish that the distribution of my property 3. Two or more persons cannot make a will jointly, or in the
and everything in connection with this, my will, be same instrument, either for their reciprocal benefit or for
made and disposed of in accordance with the laws in the benefit of a third person (Article 818).
force in the Philippine Islands, requesting all of my
relatives to respect this wish, otherwise, I annul and Note: Wills, prohibited by the preceding article, executed by
cancel beforehand whatever disposition found in this Filipinos in a foreign country shall not be valid in the Philippines,
will favorable to the person or persons who fail to even though authorized by the laws of the country where they may
have been executed (Art. 819).
comply with this request.
4. Capacity to succeed is governed by the law of the nation
Is the clause above-quoted valid?
of the decedent (Article 1039).
A: No, it is void. The second clause of the will regarding the
Q: What law governs the revocation of wills?
law which shall govern it and the condition imposed, is null
and void, being contrary to law. Article 792 of the Civil Code
A:
provides that “Impossible conditions and those contrary to
1. Under Art. 829 of the NCC, a revocation done outside the
law or good morals shall be considered as not imposed and
Philippines by a person who does not have his domicile
shall not prejudice the heir or legatee in any manner
here is valid if done according to:
whatsoever, even should the testator otherwise provide.”
(a) The law of the place where the will was made (lex
Said clause is contrary to law because it expressly ignores
loci celebrationis) or
the testator's national law when, according to Art. 16 of the
NCC, such national law of the testator is the one to govern
(b) The law of his domicil at the time of revocation (lex
his testamentary dispositions. Said condition then is
domicilii)
considered unwritten, hence the institution of legatees is
unconditional and consequently valid and effective.
Note: It ignores the law of the place of revocation
Q: What law governs the validity of wills?

2. If the revocation is done in the Philippines, it is valid if
made in accordance with the provisions of the Civil Code
A:
1. Intrinsic validity of wills - The NCC applies the lex
3. If the revocation is done outside the Philippines by a
nationalii of the decedent
person who is domiciled in the Philippines, it is valid if made
in accordance with the law of the Philippines (lex domicilii)
2. Extrinsic validity of wills - The NCC applies the law of the
or lex loci actus of the revocation (the place where the
place in which they are executed
revocation was made)
a.) When a Filipino is in a foreign country, he is
Q: Explain the following doctrines:
authorized to make a will in any of the forms
established by the law of the country in which he may
A:
be. Such will may be probated in the Philippines
1. Renvoi Doctrine (“referring back”) – Renvoi takes place
(Article 815).
when the conflicts rule of the forum makes a reference
to a foreign law, but the foreign law is found to
XPN: Joint wills executed by Filipinos in a foreign
contain a conflict rule that returns or refers the matter
country shall not be valid in the Philippines even
back to the law of the forum (Remission).
though authorized by the laws of the country where
2. Transmission theory – Provides that when the conflicts
they have been executed (Art. 819, NCC).
rule of the forum makes a reference to a foreign law,
but the foreign law is found to contain a conflict rule
b.) The will of an alien who is abroad produces effect
that refers it to a third country, the law of the third
in the Philippines if made with the formalities
country shall apply.
prescribed by the law of the place in which he resides,
3. Doctrine of Processual Presumption – The foreign law,
or according to the formalities observed in his country,
whenever applicable, should be proved by the
or in conformity with those which this Code prescribes
proponent thereof, otherwise, such law shall be
(Article 816).
presumed to be exactly the same as the law of the
forum.
c.) A will made in the Philippines by a citizen or subject
4. Doctrine of Operative Facts – Acts done pursuant to a
of another country, which is executed in accordance
law which was subsequently declared unconstitutional
with the law of the country of which he is a citizen or
remain valid, but not when the acts are done after the
subject, and which might be proved and allowed by
declaration of unconstitutionality.
the law of his own country, shall have the same effect

CIVIL LAW
Q: Edward is a citizen of California domiciled in the to foreigners who get
Philippines. After he executed his will, he went back to married abroad)
America and stayed there. During the post mortem Marriage between a The national law of the
probate of the will, Helen, his illegitimate natural child, Filipino and a foreigner in Filipino – Philippine law
opposed it on the ground of preterition. She claims that the PHILIPPINES should be followed –
under Art. 16 par. 2 of the Civil Code, in case of succession, otherwise the country’s
the national law of the deceased - the civil code of public policy would be
California - should govern., which provides that if a violated
Californian not domiciled in California dies, the law of his
domicile must govern. Lucy, on the otherhand, counters Q: What law governs the personal relations of the
that under the same provision, the national law of the spouses?
deceased should apply. Which law should be applied –
Philippine law or Californian Law? A: GR: The personal relations of the spouses are governed
by the national law of the husband
A: Philippine Law should be applied. Where the testator
(Edward) was a citizen of California, and domiciled in the Alien woman who marries Ipso facto becomes a
Philippines, the amount of successional rights should be a Filipino husband Filipino citizen if she does
governed by his national law, that is, Californian law. not suffer under any
However, the conflict of law rules of California provides disqualification for
that in cases of citizens who are residents of another naturalization as a Filipino
country, the law of the country of domicile should apply, citizen
hence, Philippine law on legitimes should be applied. This is
so because California law itself refers the case back to the Personal relations: national
Philippines. The Philippine court has no other alternative law of the husband shall
but to accept the referring back, for to do otherwise, might govern (GR)
result again in its referring back to the Philippines, which A Filipina who marries an Constitution provides that
would give rise to a sort of an “international football” alien husband she “shall retain her
(Aznar v. Garcia, G.R. No.L-16749. January 31, 1963). Philippine citizenship,
unless by her act or
Q: What is the effect of laws, judgments promulgated or omission, she is deemed,
conventions agreed upon in a foreign country on under our law, to have
Philippine laws? renounced her citizenship”
Personal relations: Art. 80
A: As regards prohibitive laws: of the Family Code provides
that the national law of the
GR: Prohibitive laws concerning persons, their acts, or wife or Philippine law
property and laws which have for their object public order, would govern the spouses’
public policy or good customs are not rendered ineffective personal relations (rule was
by laws, judgments promulgated or conventions agreed intended to protect the
upon in foreign country. Filipino wife)
XPN: Art 26, par. 2 of the Family Code (FC), on mixed Q: What if the spouses change nationalities, what law will
marriages where the foreigner obtained a divorce decree govern?
abroad and was thereby capacitated to remarry.
A:
Note: In this case, even though divorce is not recognized in the 1. If the spouses have the same nationality but they acquire
Philippines as a mode of terminating marriage, still the marriage is
a new nationality by their common act – their new national
terminated by virtue of a judgment of divorce and issuance of a
divorce decree by a foreign court. law will govern their personal relations
Q: What law governs the validity of marriage in case of 2. If the husband alone changes his nationality after the
mixed marriages? marriage – the law of the last common nationality of the
spouses would govern
A:
Marriage between a If the marriage is valid 3. If the spouses retain their different nationalities after the
Filipino and foreigner under the law of one of the marriage – National law of both spouses should govern
ABROAD spouses while void under
the law of the other, the Q: What are the rules in determining the domicile of a
validity of the marriage person?
should be upheld, unless
the marriage is universally A:
incestuous or highly If the child is legitimate His domicile of origin is that
immoral (the same rule as of his parents at the time of

2013 GOLDEN NOTES 8
his birth 2. If there is legal

separation between the
If parents are separated, spouses, the wife can have
the domicile of the her own domicile of choice
custodial parent
If the child is illegitimate His domicile of origin is that 3. If there is a separation de
of the mother at the time facto, the wife can also
of his birth have a separate domicile
If the child is legitimated The domicile of his father at
the time of his birth If the marriage is voidable Apply the same rules when
controls the marriage is valid.
If the child is adopted The domicile of origin is the However, after annulment,
domicile of his real parents the wife can freely select
at the time of his birth, NOT her own domicile of choice
the domicile of the If the marriage is void The wife can have a
adopters domicile separate from the
If a foundling The domicile of origin is the husband
country where it was found OTHER PERSONS
Convict or prisoner His domicile is the one he
RULES DETERMINING ONE’S CONSTRUCTIVE DOMICILE had possessed prior to his
incarceration
MINORS Soldiers Their domicile is their
1. If legitimate, the domicile of both parents domicile before their
enlistment
In case of disagreement, that of the father, unless there is Public officials or Their domicile is the one
a judicial order to the contrary employees abroad they had before they were
(diplomats, etc) assigned elsewhere, unless
2. If illegitimate, the domicile of the mother they voluntarily adopt their
place of employment as
3. In case of absence or death of either parent, the their permanent residence
domicile of the present parent.
Even in case of remarriage of the surviving parent, still

his/her domicile determines the constructive domicile of
the minor child
4. If the child is adopted, the domicile of choice of the

adopter is the child’s constructive domicile
INSANES, IDIOTS, IMBECILES

The law assigns their domicile to them:
1. If they are below the age of majority, the rules on

minors apply to them
2. If they are of age and have guardians, they follow the

domicile of choice of their guardians
3. If they are of age and have no guardians, their

constructive domicile is their domicile of choice before
they became insane
MARRIED WOMEN
1. The constructive
domicile of the wife is the
domicile of both spouses,
unless the law allows the
wife to have a separate
domicile for valid and
If the marriage is valid compelling reasons

CIVIL LAW
Q: What law governs the validity of contracts?
A:
Extrinsic validity Capacity of parties Intrinsic validity
Barter, sale, donation Lex situs Lex situs Lex situs
Lease of property: creates Lex situs Lex situs Lex situs
real rights
Lease of property: does Lex loci celebrationis Personal law of the Lex voluntatis or lex loci
not create real rights parties intentionis
Pledge, chattel mortgage, Lex situs Lex situs Lex situs
real estate mortgage,
antichresis
Contract of loan: mutuum Lex loci celebrationis Personal law of the Lex loci voluntatis or lex
parties loci intentionis
Contract of loan: Lex situs Lex situs Lex situs
commodatum
Lease of service, agency, Lex loci celebrationis Personal law of parties Lex loci voluntatis or lex
guaranty, suretyship loci intentionis
Note: Agency to alienate
or encumber real property
is governed by lex situs
Lex loci celebrationis Personal law of the Lex loci voluntatis
parties
Liability for loss, destruction, deterioration of goods in transit: law of destination of
Contract of goods (Art. 1753, NCC)
transportation or carriage
(render services) If COGSA applies, limitation on liability applies, unless the shipper declares value of
goods and inserts such declaration in the bill of lading
Contract for air transportation

(Warsaw Convention)
1. The liability of the airline in case of death, injury to passengers, or loss or damage
to cargo is governed by Warsaw Convention
2. If there was malice, gross negligence, or bad faith, or improper discrimination,

carrier is liable for damages beyond those limited by Warsaw Convention
Note: If contracts involve encumbrances of property, real or personal, apply lex situs. If personal contracts, law on contracts will apply

2013 GOLDEN NOTES 10
HUMAN RELATIONS
HUMAN RELATIONS Q: How is Art. 21 related to Art. 19?
Q: What is the principle of abuse of rights? A: While Art. 19 lays down the rule of conduct for the
government of human relations, it does not provide a
A: A right, though by itself legal because recognized or remedy. Generally, an action for damages under either Art.
granted by law as such, may become the source of some 20 or Art. 21 would be proper. Art. 21 deals with acts
illegality. When a right is exercised in a manner which does contra bonus mores or contrary to good morals and
not conform with the norms enshrined in Art. 19 and presupposes loss or injury, material or otherwise, which
results in damage to another, a legal wrong is thereby one may suffer as a result of such violation. Under Arts. 19
committed for which the wrongdoer must be held and 21, the act must be intentional. (Rabuya, 2006)
responsible.
Note: Art. 21 fills countless gaps in the statutes, which leave so
Q: What are the elements of abuse of rights? many victims of moral wrongs helpless, even though they suffered
material and moral damages. (Tolentino, p. 70)
A:
1. There is a legal right or duty; Q: Is breach of promise to marry an actionable wrong?
2. Such duty is exercised in bad faith;
3. It is for the sole intent of prejudicing or injuring another. A: GR: No. A breach of promise to marry per se is not an
actionable wrong. There is no provision in the NCC
Q: What is the principle of Damnum Absque Injuria? authorizing an action for breach of promise to marry.
A: Under this principle which literally means damage XPN: When the act is not a mere breach of promise to
without injury, one who merely exercises one’s rights does marry but constitutes one where damages pursuant to
no actionable injury and cannot be held liable for damages. Art. 21 of the NCC may be recovered, such as:
This is premised on the valid exercise of a right (Amonoy v. 1. Where the woman is a victim of moral seduction
Guitierrez, 351 SCRA 731, 2001). (Gashem Shookat Baksh v. CA, G.R. No. 97336,
February 19, 1993).
Note: Injury is the illegal invasion of a legal right; damage is 2. Where one formally sets a wedding and go
the loss, hurt, or harm which results from the injury; and through and spend for all the preparations and
damages are the recompense or compensation awarded for publicity, only to walk out of it when the
the damage suffered. There can be damage without injury matrimony was about to be solemnized
in those instances in which the loss or harm was not the (Wassmer v. Velez, G.R. No. L-20089, December
result of a violation of a legal duty. In such cases, the 26, 1964).
consequences must be borne by the injured person alone
(Panteleon v. American Express, G.R. No. 174269, August Q: Maria met Ayatollah, an Iranian medical student, at the
25, 2010). restaurant where she worked. A few days after, Ayatollah
courted and proposed to marry Maria. The latter accepted
Q: Is there civil liability for moral negligence? his love on the condition that they would get married.
When the couple visited Maria's parents, Ayatollah was
A: None. A person is required to act with prudence towards allowed to sleep with Maria during the few days of their
others, but not with charity; the law imposes diligence and stay. The couple continued to live together in an
not altruism. Hence, the failure to make sacrifices or apartment, but Ayatollah's attitude towards Maria
egoism does not constitute a source of liability. (Tolentino, changed. He maltreated her and when Maria became
p. 69) pregnant, Ayatollah gave her medicine to abort the fetus.
Despite the abuses, Maria continued to live with Ayatollah
Illustration: A person who fails to render assistance to and kept reminding him of his promise to marry her.
a drowning person or to the victim of an accident, However, Ayatollah told her that he could not do so
cannot be held liable for damages (3 Colin & Capitant because he was already married to a girl in Bacolod City.
826). Maria left and filed a complaint for damages against
Ayatollah for the alleged violation of their agreement to
Note: Every person who, contrary to law, wilfully or negligently get married. May damages be recovered for a breach of
causes damage to another, shall indemnify the latter for the same. promise to marry on the basis of Art. 21 of the NCC?
(Art. 20, NCC)
A: Yes. A breach of promise to marry per se is not an
Q: What are the elements of an action under Art. 21 of the actionable wrong. But where a man's promise to marry is
NCC? the proximate cause of the acceptance of his love by a
woman and his representation to fulfill that promise
A: LCI thereafter becomes the proximate cause of the giving of
1. There is an act which is Legal; herself unto him in a sexual congress, proof that the
2. Such act is Contrary to morals, good customs, public promise was only a deceptive device to inveigle her to
order or policy; obtain her consent to the sexual act, could justify the award
3. It is done with Intent to injure. of damages pursuant to Art. 21, not because of such
promise to marry but because of the fraud and deceit

CIVIL LAW
behind it and the willful injury to her honor and reputation Q: What are the requisites of accion in rem verso?
which followed thereafter. It is essential, however, that
such injury should have been committed in a manner A:
contrary to morals, good customs or public policy. In the 1. The defendant has been enriched;
instant case, Ayatollah's fraudulent and deceptive 2. The plaintiff has suffered a loss;
protestations of love for and promise to marry Maria that 3. The enrichment of the defendant is without just or legal
made her surrender her virtue and womanhood to him and ground; and
to live with him on the honest and sincere belief that he 4. The plaintiff has no other action based on contract,
would keep said promise. In short, Maria surrendered her quasi-contract, crime or quasi-delict.
virginity, the cherished possession of every single Filipina,
not because of lust but because of moral seduction Q: How is accion in rem verso different from solutio
(Gashem Shookat Baksh v. CA, G.R. No. 97336, February 19, debiti?
1993).
A: Mistake is an essential element in solutio indebiti. In
Q: Soledad a high school teacher used to go around accion in rem verso, it is not necessary that there should
together with Francisco who was almost ten (10) years have been mistake in the payment (Rabuya, 2006).
younger than her. Eventually, intimacy developed
between them after Soledad became an underwriter in Q: Can there be liability without fault or negligence?
Cebu. One evening, they had sexual intercourse in
Francisco's cabin on board M/V Escaño, to which he was A: Yes. The NCC recognizes liability without fault or
then attached as apprentice pilot. After a few months, negligence, even when the event producing loss to others
Soledad advised Francisco that she was pregnant, may be accidental or fortuitous, so long as another person
whereupon he promised to marry her. Later their child is benefited through such event or act. (Art. 23, NCC)
was born. However, subsequently, Francisco married
another woman. Soledad filed a complaint for moral
damages for alleged breach of promise to marry. May
moral damages be recovered for breach of promise to
marry?
A: No. It is the clear and manifest intent of our law making

body not to sanction actions for breach of promise to
marry. Moreover, Francisco is not morally guilty of
seduction, not only because he is approximately 10 years
younger than the complainant — who around 36 years of
age, and as highly enlightened as a former high school
teacher and a life insurance agent are supposed to be —
when she became intimate with him, than a mere
apprentice pilot, but, also, because, the court of first
instance found that, complainant "surrendered herself" to
Francisco because, "overwhelmed by her love" for him, she
"wanted to bind" "by having a fruit of their engagement
even before they had the benefit of clergy (Hermosisima v.
CA, G.R. No. L-14628, September 30, 1960).
Note: To constitute seduction there must be some

sufficient promise or inducement and the woman must
yield because of the promise or other inducement. If she
consents merely from carnal lust and the intercourse is
from mutual desire, there is no seduction.
Q: What is accion in rem verso?
A: It is an action for recovery of what has been paid or

delivered without just cause or legal ground. Under Art. 22
of the NCC, if a person acquires or comes into possession of
something at the expense of another without just or legal
ground through an act or of performance by another or any
other means has the obligation to return the same.

PERSONS AND FAMILY RELATIONS
PERSONS which declares that the civil personality of the child shall
commence from the time of his conception, for all purposes
PERSONS AND PERSONALITY favorable to him, subject to the requirements of Art. 41 of
the NCC.
Q: Differentiate person from personality.
RESTRICTIONS ON CAPACITY TO ACT
A: A person is every physical or moral, real or juridical and
legal being susceptible of rights and obligations or being the Q: What are the restrictions on capacity to act?
subject of legal relations. Personality, on the other hand, is
the aptitude to be the subject, active or passive, of juridical A: MIDI-PC (Art. 38, NCC)
relations. One is a person, while one has personality. 1. Minority - state of a person who is under the age of
(Rabuya, 2006) legal majority which is eighteen years of age
2. Insanity – state of a person whose mental faculties are
Q: What are the two kinds of persons? diseased
3. Deaf-mute – lacking sense of hearing and the inability
A: to speak
1. NATURAL – human beings and have physical existence
2. JURIDICAL – artificial persons and product of legal Note: Only deaf-mutes who do not know how to write
fiction are declared by law incapable of giving consent.
Q: Distinguish juridical capacity from capacity to act. 4. Imbecility – state of a person who while advanced in
age has the mental capacity comparable to that of a
A: child between two and seven years of age
JURIDICAL CAPACITY CAPACITY TO ACT 5. Prodigality – a spendthrift or squanderer
6. Civil Interdiction – an accessory penalty imposed upon
Definition
an accused who is sentenced to a principal penalty not
Fitness to be the subject Power to do acts with legal
lower than reclusion temporal.
of legal relations effect
Acquisition
Note: They do not exempt the incapacitated person from
Inherent (co-exists with Through the fulfillment of certain obligations.
the natural person) specific legal activities
Loss Q: What are the circumstances that modify or limit
Through death and other capacity to act?
Only through death
causes
In relation to the other A: I-PAID-FAT-PIA
Can exist without Cannot exist w/o juridical 1. Insanity
capacity to act capacity 2. Prodigality
Limitation 3. Age
Art. 38 (restriction) 4. Imbecility
Art. 39 (modification/ 5. Deaf-Mute
None
limitation), 6. Family Relations
among others 7. Alienage
8. Trusteeship
Q: What is meant by status? 9. Penalty
10. Insolvency
A: The status of a person is the legal condition or class to 11. Absence
which one belongs in a society. (1 del Viso 32, 2 Sanchez
Roman 110) BIRTH
Q: What is meant by civil personality? Q: How is personality acquired by natural persons?
A: Civil personality is merely the external manifestation of A: GR: Actual/Permanent Personality – Personality begins at
either juridical capacity or capacity to act. Consequently, it birth, not at conception.
may be defines as the aptitude of being the subject of
rights and obligations. (2 Sanchez Roman 114-147) XPN: Presumptive/Temporary – The law considers the
conceived child as born (Conceptus pro natohabetur)
Q: When does civil personality begin in natural persons?
Note: For there to be presumptive personality, the fetus must
A: Birth determines personality, but the conceived child be “born later in accordance with law” and the purpose for
shall be considered born for all purposes that are which such personality is given must be beneficial to the
favourable to it, provided it be born later with the child.
conditions specified in the following article (Art. 40, NCC).
This provision is now superseded by Art. 5 of P.D. No. 603,

CIVIL LAW
Q: Explain the meaning of the clause “Born later in since he was much younger than his father and therefore,
accordance with law”. should be presumed to have survived longer?
A: A fetus with an intra-uterine life of: A: No, Wilma cannot successfully claim that Willy had a
1. Less than 7 months – Must survive for at least 24 hours hereditary share in his father’s estate.
after its complete delivery from the maternal womb
2. At least 7 months – If born alive, it shall be considered Under Art. 4 of the NCC, two persons “who are called to
born even if it dies within 24 hours after complete succeed each other” are presumed to have died at the
delivery. same time, in the absence of proof as to which of them
died first. This presumption of simultaneous death applies
Note: Complete delivery means the cutting of the umbilical cord. in cases involving the question of succession as between
the two who died, who in this case, are mutual heirs, being
Q: Does the conceived child have the right to be father and son.
acknowledged even if it is still conceived?
Q: Suppose, Jaime had a life insurance policy with his wife
A: Yes. It is a universal rule of jurisprudence that a child, Julia, and his son, Willy, as the beneficiaries. Can Wilma
upon being conceived, becomes a bearer of legal rights and successfully claim that one-half of the proceeds should
is capable of being dealt with as a living person. The fact belong to Willy’s estate? (1998 Bar Question)
that it is yet unborn is no impediment to the acquisition of
rights provided it be born later in accordance with law (De A: Yes, Wilma can invoke the presumption of survivorship
Jesus v. Syquia, G.R. No. L-39110, November 28, 1933). and claim that one-half of the proceeds should belong to
Willy’s estate, under Rule 131, Sec.3 (jj), par. 5, Rules of
Q: What do you mean by provisional personality of a Court, as the dispute does not involve succession.
conceived child?
Under this presumption, the person between the ages of 15
A: A conceived child, although as yet unborn, has a limited and 60 is deemed to have survived one whose age was over
and provisional personality. Its personality is essentially 60 at the time of their deaths. The estate of Willy endowed
limited because it is only for purposes favorable to the with juridical personality stands in place and stead of Willy,
child. Its personality is provisional because it depends upon as beneficiary.
the child being born alive later under certain conditions.
COMPARISON OF ART.43 AND RULE 131
DEATH
SURVIVORSHIP RULE UNDER THE NCC
Q: How does civil personality cease?
Q: Explain the survivorship rule under the NCC.
A: It depends upon the classification of persons:
1. Natural persons – by death A: If there is doubt as to who died first between 2 or more
2. Juridical persons – by termination of existence persons who are called to succeed each other, as to which
of them died first,
Q: What rule would apply in case there is doubt as to who
died first? Burden of Proof: Whoever alleges the death of one prior to
the other has the burden of proving such claim.
A: It depends on whether the parties are called to succeed
each other. Absent such proof: Presumption is they all died at the same
1. If successional rights are involved – Art. 43 of the NCC: time. There shall be no transmission of successional rights.
Survivorship Rule, and Rule 131, Sec. 3(kk): (Rule 131, Sec. 3 [kk], Rules of Court)
Presumption of simultaneity of deaths between
persons called to succeed each other, apply. Q: What are the conditions that may warrant the
2. If no successional rights are involved – Rule 131, Sec. 3 application of the survivorship rule?
(jj) of the Rules of Court applies. (Presumption of
survivorship) A: It applies when the following conditions are present:
1. The parties are heirs to one another
Note: Both are to be applied only in the absence of facts. 2. There is no proof as to who died first
3. There is doubt as to who died first
Q: Jaime, who is 65, and his son, Willy, who is 25, died in a
plane crash. There is no proof as to who died first. Jaime’s Q: What is the presumption under the survivorship rule?
only surviving heir is his wife, Julia, who is also Willy’s
mother. Willy’s surviving heirs are his mother, Julia, and A: Presumption of simultaneity of deaths. When two or
his wife, Wilma. more persons who are called to succeed each other die,
they shall be presumed to have died at the same time.
In the settlement of Jaime’s estate, can Wilma successfully
claim that her late husband, Willy, had a hereditary share

PRESUMPTION ON SURVIVORSHIP UNDER THE RULES OF that the designation of the unborn child as a beneficiary is
COURT favorable to the child.
Q: What are the requisites for the presumptions on Q: Between Marian and the baby, who is presumed to
survivorship under the Rules of Court to apply? have died ahead?
A: A: If the baby was not alive when completely delivered

1. Two or more persons; from the mother’s womb, it was not born as a person, then
2. They perish in the same calamity; the question of who between two persons survived will not
3. It is not shown who died first; be an issue. Since the baby had an intra-uterine life of more
4. There are no particular circumstances from which it than 7 months, it would be considered born if it was alive,
can be inferred that one died ahead of the other. at the time of its complete delivery from the mother’s
womb. We can gather from the facts that the baby was
Q: What are the presumptions under the survivorship rule completely delivered. But whether or not it was alive has to
under the Rules of Court? be proven by evidence.
A: The survivorship shall be determined from the If the baby was alive when completely delivered from the
probabilities resulting from the strength and age of the mother’s womb, then it was born as a person and the
sexes according to the following rules: question of who survived as between the baby and the
mother shall be resolved by the provisions of the Rules of
Age/Sex of decedents at the time of Court on survivorship. This is because the question has
Who presumed to
death nothing to do with succession. Obviously, the resolution of
have survived
Decedent A Decedent B the question is needed just for the implementation of an
Under 15 Under 15 Older insurance contract. Under Rule 13, Sec. 3, (jj), (5) as
Above 60 Above 60 Younger between the baby who was under 15 years old and Marian
Under 15 who was 18 years old, Marian is presumed to have
Under 15 Above 60 survived.
(younger)
Different sexes –
Above 15 BUT Above 15 BUT male In both cases, therefore, the baby never acquired any right
under 60 under 60 Same sex – under the insurance policy. The proceeds of the insurance
Older will then go to the estate of Marian.
Under 15 OR Between 15 and Between 15 and
over 60 60 60 Q: Will Prieto, as surviving biological father of the baby, be
entitled to claim the proceeds of the life insurance on the
Note: The statutory rules in the determination of sequence of life of Marian? (2008 Bar Question)
death do not absolutely apply in a case where indirect and/or
inferential evidence surrounding the circumstances of the deaths A: Since the baby did not acquire any right under the
exists. Where there are facts, known or knowable, from which a insurance contract, there is nothing for Prieto to inherit.
rational conclusion can be made, the presumption does not step in,
and the rule of preponderance of evidence controls. It is the JURIDICAL PERSONS
"particular circumstances from which survivorship can be inferred"
that are required to be certain as tested by the rules of evidence
(Joaquin v. Navarro, G.R. No. L-5426, May 29, 1953).
Q: What are the different kinds of Judicial Persons?
Q: At the age of 18, Marian found out that she was A:

pregnant. She insured her own life and named her unborn 1. The State and its political subdivisions;
child as her sole beneficiary. When she was already due to 2. Other corporations, institutions and entities for public
give birth, she and her boyfriend Pietro, the father of her interest or purpose, created by law; their personality
unborn child, were kidnapped in a resort in Bataan. The begins as soon as they have been constituted
military gave chase and after one week, they were found according to law;
in abandoned hut in Cavite. Marian and Pietro were 3. Corporations, partnerships and associations for private
hacked with bolos. Marian and the baby she delivered interest or purpose to which the law grants a juridical
were both found dead, with the baby’s umbilical cord personality, separate and distinct from that of each
already cut. Pietro survived. shareholder, partner or member (Art. 44, NCC)
Can Marian’s baby be the beneficiary of the insurance Q: May juridical persons acquire and possess property of
taken on the life of the mother? all kinds, as well as incur obligations and bring civil or
criminal actions?
A: An unborn child may be designated as the beneficiary in
the insurance policy of the mother. An unborn child shall be A: Yes, provided that they are in conformity with the laws
considered a person for purposes favorable to it provided it and regulations of their organization. (Art. 46)
is born later in accordance with the NCC. There is no doubt

CIVIL LAW
DOMICILE AND RESIDENCE OF PERSON Social institution
Applicable law
Q: Distinguish between residence and domicile. Governed by the law on Governed by the law on
marriage contracts
A: Residence is a place of abode, whether permanent or
Right to stipulate
temporary. Domicile denotes a fixed permanent place to
which, when absent, one has the intention of returning. GR: Not subject to
stipulation
Generally subject to
Q: Where is the domicile of a natural person for the stipulations
exercise of civil rights and fulfillment of civil obligations? XPN: Property relations in
marriage settlements
A: His place of habitual residence. Capacity to contract
Minors may contract thru
Q: Where is the domicile of juridical persons? their parents or guardians or
Legal capacity required
in some instances, by
A: themselves
1. The place fixed by the law creating or recognizing the Gender requirement
juridical person; Contracting parties must Contracting parties may be
2. In the absence thereof, the place where their legal only be two persons of two or more persons
representation is established or where they exercise opposite sexes regardless of sex
their principal functions. Dissolution by agreement
Dissolved only by death or
Can be dissolved by mutual
MARRIAGE annulment, never by
agreement among others.
mutual agreement
Q: What is marriage?
Q: What is required to prove the marriage?
A: Marriage is a special contract of permanent union
between a man and a woman entered into in accordance A: The best documentary evidence of a marriage is the
with law for the establishment of conjugal and family life. It marriage contract. Although a marriage contract is
is the foundation of the family and an inviolable social considered primary evidence of marriage, the failure to
institution whose nature, consequences, and incidents are present it is not, however, proof that no marriage took
governed by law and not subject to stipulation, except that place, as other evidence may be presented to prove
marriage settlements may fix the property relations during marriage. The following may be presented as proof of
the marriage within the limits provided by the Family Code. marriage: (a) testimony of a witness to the matrimony (b)
(Art. 1, FC) the couple’s public and open cohabitation as husband and
wife after the alleged wedlock (c) the birth and baptismal
NATURE OF MARRIAGE certificate of children born during such wedlock and (d) the
mention of such nuptial in subsequent documents
Q: What is meant by the law when it declares marriage as (Balogbog v. CA, G.R No. 83598, March 7, 1997).
an inviolable social institution?
KINDS OF REQUISITES
A: Marriage is an institution in which the community is
deeply interested. The State has surrounded it with ESSENTIAL REQUISITES
safeguards to maintain its purity, continuity and
permanence. The security and stability of the State are Q: What are the essential requisites of marriage?
largely dependent on it. It is in the interest and duty of each
member of the community to prevent the bringing about of A:
a condition that would shake its foundation and lead to its 1. Legal capacity of the contracting parties who must be
destruction. The incidents of the status are governed by a male and a female;
law, not by will of the parties (Beso v. Daguman, A.M. No. 2. Consent freely given in the presence of the solemnizing
MTJ-99-1211, January 28, 2000 [citing Jimenez v. Republic, officer. (Art. 2, FC)
G.R. No. L-12790, August 31,1960]).
Q: What constitutes legal capacity of the parties to marry?
Q: Distinguish marriage from an ordinary contract:
A: ASL
A: 1. Age – at least 18 years
2. Sex – between male and female
MARRIAGE ORDINARY CONTRACT 3. Lack of legal impediment to marry
As a contract
Special contract
Merely a contract
Sui Generis contract

Q: Are there other requirements, taking into consideration 2. their personal declaration that they shall take each
the age of the parties to the marriage, for the validity of other as husband and wife; and
such marriage? 3. in the presence of not less that 2 witnesses of legal
age.
A: Yes, depending upon the age of the contracting party.
Note: No particular form of ceremony or religious rite is required
ADDITIONAL by law (Art. 6, FC).
AGE
REQUIREMENTS
Q: Is marriage by proxy allowed?
Parental consent and
18 to 21 years old
Marriage counseling A: It depends.
Parental advice and 1. If performed in the Philippines – No, it is not
22 to 25 years old allowed, hence the marriage is void.
Marriage counseling
Note: Philippine laws prohibit marriages by proxy. Since
Note: Absence of the additional requirement of parental consent the marriage is performed in the Philippines, Philippine
does not make the marriage void but only voidable. laws shall apply following the principle of lex loci
celebrationis.
FORMAL REQUISITES
2. If performed abroad – Whether it is allowed or
Q: What are the formal requisites of marriage? not depends upon the law of the place where the
marriage was celebrated (lex loci celebrationis).
A: CAL
1. Marriage Ceremony Note: As to marriages between Filipinos - all marriages
2. Authority of the solemnizing officer solemnized outside the Philippines, in accordance with
3. Valid marriage License (Art. 3, FC) the laws enforced in said country where they are
solemnized, and valid there as such, shall also be valid
EFFECT OF ABSENCE OF REQUISITES here in the country, except those prohibited under Art.
35 (1), (2), (4), (5), (6), 36, 37 and 38. (Art. 26, FC)
Q: What is the status of marriage in case of:
SOLEMNIZING AUTHORITY
1. Absence of any of the essential requisites?
Q: Who are authorized to solemnize marriage?
A: Void ab initio (Art. 4)
A: It depends:
1. Under ordinary circumstances:
2. Absence of any of the formal requisites?
a. Incumbent judiciary member – provided, within
the court’s (his) jurisdiction
A: GR: Void ab initio. (Art. 4)
b. Priest, rabbi, imam or minister of any
church/religious sect duly authorized – provided
XPNs: Valid even in the absence of formal
at least one of the parties belongs to such church
requisite:
or religious sect.
a. Marriages exempt from license requirement
c. Consul general, consul or vice-consul – provided
b. Either or both parties believed in good faith
both parties are Filipinos and marriage takes
that the solemnizing officer had the proper
place abroad.
authority. (Art. 35 [2])
d. Mayors (Arts. 444 and 445 of LGC)
3. Defect in essential requisites?
Note: Includes “Acting Mayor”
A: Voidable
2. Marriages in articulo mortis:
a. Ship captain or airplane chief – provided the
4. Irregularity in formal requisites?
marriage is performed:
i. During voyage, even during stopovers
A: Valid, but the party responsible for such irregularity
ii. Between passengers or crew members
shall be civilly, criminally or administratively liable.
b. Military commander of a unit who is a
(Art. 4 par. 2)
commissioned officer – provided the marriage is
performed:
MARRIAGE CEREMONY
i. In absence of chaplain;
ii. Within zone of military operation;
Q: What constitutes a valid marriage ceremony?
iii. Between members of the armed forces or
civilians
A: That which takes place with the:
1. personal appearance of the contracting parties before
the solemnizing officer;

CIVIL LAW
Q: What must the solemnizing officer in a marriage in Note: In case of a marriage solemnized by a mayor outside of his
articulo mortis do after solemnizing such marriage? territorial jurisdiction, LGC is silent on the matter, hence the
abovementioned case may be applied by analogy.
A: He shall state in an affidavit executed before the local
civil registrar or any other person legally authorized to Q: What is the exception to the rule requiring authority of
administer oaths, that the marriage was performed in the solemnizing officer?
articulo mortis and that he took the necessary steps to
ascertain the ages and relationship of the contracting A: Marriages contracted with either or both parties
parties and the absence of a legal impediment to the believing in good faith that the solemnizing officer had the
marriage. (Art. 29, FC) authority to do so. (Art. 35 (2))
Q: Will the solemnizing officer’s failure to execute an MARRIAGE LICENSE

affidavit that he solemnized the marriage in articulo
mortis affect the validity of marriage? Q: What is the period of the validity of a marriage license?
A: No. The marriage will still be valid. The Law permits A: The license shall be valid in any part of the Philippines for
marriages in articulo mortis without marriage license but it a period of 120 days from the date of issue, and shall be
requires the solemnizing officer to make an affidavit and deemed automatically cancelled at the expiration of said
file it. period if the contracting parties have not made use of it.
(Art. 20, FC).
However, such affidavit is not an essential or formal
Note: If the parties contracted marriage after the lapse of 120 days
requisite of marriage, the same with a Marriage Contract.
from the issuance of the marriage license, such marriage shall be
The signing of the marriage contract and the affidavit is considered void for lack of marriage license.
only required for the purpose of evidencing the act, not a
requisite of marriage. It is the obligation of the solemnizing Q: What is the effect in the issuance of a marriage license
officer. It does not affect the validity of marriage (De Loria if a party who is required by law to obtain parental advice
v. Felix, G.R. No. L-9005, Jun. 20, 1958). or undergo marriage counseling failed to do so?
Q: What are the authorized venues of marriage? A: The issuance of marriage license is suspended for 3
months from the completion of publication of the
A: GR: Must be solemnized publicly within the jurisdiction application.
of the authority of the solemnizing officer:
1. Chambers of the judge or in open court Note: The marriage is valid in this case.
2. Church, chapel or temple
3. Office of the consul-general, consul or vice-consul Q: What is the status of the marriage if the parties get
married within said 3-month period?
XPNs:
1. Marriage at the point of death A: It depends.
2. Marriage in remote places 1. If the parties did not obtain a marriage license –
3. Marriage at a house or place designated by the the marriage shall be void for lack of marriage
parties with the written request to the license.
solemnizing officer to that effect. 2. If the parties were able to obtain a marriage
license – the marriage shall be valid without
Note: This provision is only directory, not mandatory. The prejudice to the actions that may be taken against
requirement that the marriage be solemnized in a particular venue
the guilty party.
or a public place is not an essential requisite for the validity of the
marriage.
Q: Who issues the marriage license?
Q: What is the status of a marriage solemnized by a judge
outside of his territorial jurisdiction? A: The local civil registrar of the city or municipality where
either contracting party habitually resides (Art. 9, FC).
A: The marriage is valid. Under Art. 3 of the FC, one of the
Note: Obtaining a marriage license in a place other than where
formal requisites of marriage is the "authority of the
either party habitually resides is a mere irregularity.
solemnizing officer." Under Art. 7, marriage may be
solemnized by, among others, "any incumbent member of
FOREIGN NATIONAL
the judiciary within the court's jurisdiction." Art. 8, which is
a directory provision, refers only to the venue of the
Q: What is required from the contracting parties before a
marriage ceremony and does not alter or qualify the
marriage license can be obtained?
authority of the solemnizing officer as provided in the
preceding provision. Non-compliance herewith will not
A: Each of the contracting parties shall file a separate or
invalidate the marriage. (Navarro v. Domagtoy, A.M. No.
individual sworn application with the proper local civil
MTJ-96-1088. July 19, 1996)
registrar (Art. 11, FC).

Note: When either or both of the contracting parties are citizens of Note: The five-year period of cohabitation must have been a
a foreign country, it shall be necessary for them to submit a period of legal union had it not been for the absence of
certificate of legal capacity to contract marriage, issued by their marriage.
respective diplomatic or consular officials.
3. Fact of absence of legal impediment must be Present
Stateless persons or refugees from other country shall, in lieu of at the time of the marriage
the certificate of legal capacity herein required, submit an affidavit
4. Parties must execute an Affidavit that they are living
stating the circumstances showing such capacity to contract
marriage. (Art 21, FC) together as husband and wife for 5 years and that they
do not have any impediment to marry
Q: What is the status of a marriage celebrated on the basis 5. Solemnizing officer must execute a Sworn statement
of a license issued without the required Certificate of that he had ascertained the qualifications of the
Legal Capacity? parties and found no legal impediment to their
marriage (Manzano v. Sanches, March 1, 2001).
A: The marriage is valid as this is merely an irregularity in
complying with a formal requirement of the law in Q: Pepito was married to Teodulfa. Teodulfa was shot by
procuring a marriage license, which will not affect the him resulting in her death. After 1 year and 8 months, he
validity of the marriage. (Garcia v. Recio, G.R. 138322, married Norma without any marriage license. In lieu
October 2, 2001) thereof, they executed an affidavit stating that they had
lived together as husband and wife for at least five years
EXCEPTIONS and were thus exempt from securing a marriage license.
What is the status of their marriage?
Q: What are the marriages exempt from the license
requirement? A: Void for lack of marriage license. To be exempt from the
license requirement under the 5-year cohabitation rule, the
A: MARCOS-Z cohabitation should be in the nature of a perfect union that
is valid under the law but rendered imperfect only by the
1. Marriages among Muslims or members of ethnic absence of the marriage contract and is characterized by
cultural communities continuity, that is, unbroken, and exclusivity, meaning no
2. Marriages in Articulo mortis third party was involved at anytime within the 5 years. It
a. Solemnized by a ship captain or airplane pilot should be a period of legal union had it not been for the
b. within Zones of military operation absence of the marriage.
3. Marriages in Remote places
In this case, Pepito and Norma are not exempt from the
Note: “Remote Place” - no means of transportation to enable marriage license requirement because at the time of Pepito
the party to personally appear before the solemnizing local and Norma's marriage, it cannot be said that they have
civil registrar. lived with each other as husband and wife for at least five
years prior to their wedding day because from the time
4. Marriages between parties Cohabiting for at least 5 Pepito's first marriage was dissolved to the time of his
years marriage with Norma, only about twenty months had
5. Marriages solemnized Outside the Philippines where elapsed.
no marriage license is required by the country where it
was solemnized. Q: Would your answer be the same if Pepito was
separated in fact from Teodulfa?
Q: What are the requisites for the 5-year cohabitation as
an exception to the marriage license requirement? A: Yes, the marriage is still void. Even if they were
separated in fact, and thereafter both Pepito and Norma
A: The requisites are: 5D PAS had started living with each other that has already lasted
1. Living together as husband and wife at least 5 years for five years, the fact remains that Pepito had a subsisting
before the marriage. marriage at the time when he started cohabiting with
Norma. It is immaterial that when they lived with each
The 5 year period must be characterized by: other, Pepito had already been separated in fact from his
a. Exclusivity – the partners must live together lawful spouse. The subsistence of the marriage even where
exclusively, with no other partners, during the there was actual severance of the filial companionship
whole 5-year period. between the spouses cannot make any cohabitation by
b. Continuity – such cohabitation was unbroken. either spouse with any third party as being one as "husband
and wife" (Niñal v. Bayadog, GR No. 133778, March 14,
Note: The period is counted from the date of celebration of 2000).
marriage. It should be the years immediately before the day
of the marriage.
2. No legal impediment to marry each other During the

period of cohabitation.

CIVIL LAW
MARRIAGE CERTIFICATE country where it is celebrated, if valid there, shall be valid
here as such.
Q: What are the distinctions between a marriage license
and a marriage certificate? XPNs: It shall be void, even if it is valid in the foreign
country where the marriage was celebrated, if any of
A: the following circumstances are present: LIM – 2B – 2P
MARRIAGE LICENSE MARRIAGE CERTIFICATE 1. Lack of legal capacity even with parental consent
Authorization by the Best evidence of the (e.g. party is below 18);
state to celebrate existence of the 2. Incestuous;
marriage. marriage. 3. Contracted through Mistake of one party as to
Not an essential or the identity of the other;
Formal requisite of 4. Contracted following the annulment or
formal requisite of
marriage. declaration of nullity of a previous marriage but
marriage.
Before partition, etc.;
Q: Guillermo and Josefa lived together as husband and 5. Bigamous or polygamous except as provided in
wife, but there is doubt as to whether they got married, Art. 41 FC on terminable bigamous marriages;
since no record of the marriage existed in the civil registry 6. Void due to Psychological incapacity;
but their relatives and friends maintained that the two in 7. Void for reasons of Public policy
fact married each other and lived as husband and wife for
more than half a century. Is Guillermo married to Josefa? Q: Suppose in a valid mixed marriage (marriage between a
citizen of a foreign country and a citizen of the Philippines)
A: They are presumed to be married. In this jurisdiction, the foreign spouse obtained a divorce decree abroad and
every intendment of the law leans toward legitimizing was capacitated to remarry.
matrimony. Persons dwelling together apparently in 1. May the Filipino spouse remarry despite the fact
marriage are presumed to be in fact married. This is the that divorce is not valid in the Philippines?
usual order of things in society and, if the parties are not 2. Will your answer be the same if it was a valid
what they hold themselves out to be, they would be living marriage between Filipinos?
in constant violation of the common rules of law and
propriety. Semper praesumitur pro matrimonio – always A:
presume marriage (Vda.De la Rosa v. Heirs of Vda. De 1. Yes, the Filipino spouse is likewise capacitated. Divorce
Damian, G.R. No. 103028, October 10, 1997). validly obtained abroad by the alien spouse
capacitating him/her to remarry will likewise allow the
Note: Although a marriage contract is considered a primary Filipino spouse to remarry. This is the rule laid down in
evidence of marriage, its absence is not always proof that no Art. 26 (2) of the FC.
marriage took place (Delgado Vda. De la Rosa, et al. v. Heirs of
Marciana Rustia Vda. De Damian, et al., G.R. No. 103028, October It should be noted however that the foreign spouse
10, 1997). must be capacitated to remarry before the Filipino
spouse may also be capacitated to remarry.
EFFECT OF MARRIAGE CELEBRATED ABROAD AND
FOREIGN DIVORCE Note: It is true that owing to the nationality principle
embodied in Art. 16 of the NCC, only Philippine nationals are
Q: What rules govern the validity of marriage? covered by the policy against absolute divorces, the same
being considered contrary to our concept of public policy and
A: It depends: morality. Nevertheless, aliens may obtain divorces abroad
1. As to its extrinsic validity –Lex loci celebrationis which may be recognized in the Philippines, provided they are
valid according to their national law (Van Dorn v. Romillo, Jr.,
GR No. L-68470, October 8, 1985).
Note: Locus regit actum (the act is governed by the law of the
place where it is done) - is adhered to here in the Philippines
as regards the extrinsic validity of marriage. 2. It depends. What is material in this case is the
citizenship of the spouse who obtained a divorce
2. As to its intrinsic validity – Personal law decree abroad at the time the decree was obtained
and not their citizenship at the time the marriage was
Note: Personal law may either be the national law or the law celebrated.
of the place where the person is domiciled.
If the Filipino spouse was naturalized as a citizen of a
If the person involved is a stateless person, domiciliary rule foreign country before he/she obtains a divorce
applies, otherwise, lex nationalii applies. decree and was thereafter capacitated to remarry, the
Filipino spouse will be capacitated to remarry.
Q: What is the status of marriages between Filipinos
solemnized abroad in accordance with the law in force in Note: The naturalization of one of the parties, as well as the
said country? divorce decree obtained by him or her, must be proven as a
fact under our rules on evidence. The foreign law under which
A: GR: Marriages between Filipinos solemnized outside the the divorce was obtained must likewise be proven as our
Philippines in accordance with the law of the foreign courts cannot take judicial notice of foreign laws.

However, if the Filipino spouse remained to be a citizen of the

Philippines when he/she obtained a divorce decree abroad,
such decree will not be recognized in the Philippines even if
that spouse is subsequently naturalized as a citizen of a
foreign country. This is so because at the time the spouse
obtained the divorce decree, he/she was still a citizen of the
Philippines and being naturalized afterwards does not cure
this defect (Republic v. Iyoy, G.R. No. 152577, September 21,
2005).
Note: Burden of Proof lies with "the party who alleges the
existence of a fact or thing necessary in the prosecution or
defense of an action." Since the divorce was a defense raised
by respondent, the burden of proving the pertinent foreign
law validating it falls squarely upon him. Courts cannot take
judicial notice of foreign laws. The power of judicial notice
must be exercised with caution, and every reasonable doubt
upon the subject should be resolved in the negative (Garcia
v. Recio, G.R. No. 138322, October 2, 2001).
VOID AND VOIDABLE MARRIAGES
Q: What may be the status of marriages?
A:
1. Valid
2. Void
3. Voidable
Q: What are the distinctions between void and voidable marriages?
A:
VOID MARRIAGE VOIDABLE MARRIAGE
Status of marriage
Void ab initio Voidable: Valid until annulled
Petition filed
Declaration of Nullity of Marriage Annulment of Marriage
Who may file
GR: Solely by the husband or wife.
XPN: Any real party in interest, only in the following cases: GR: Offended Spouse
1. Nullity of marriage cases commenced before the XPN:
effectivity of A.M. No. 02-11-10 - March 15, 2003. 1.Parents or guardians in cases of insanity
2. Marriages celebrated during the effectivity of the Civil 2.Parents or guardians before the party reaches 21
Code (De Dios Carlos v. Sandoval, G.R. No. 179922, years old on the ground of Lack of Parental Authority
December 16, 2008).
Prescriptive Period
GR: Within 5 years from discovery of the ground
XPN:
No prescriptive period 1. Lifetime of spouse in cases of insanity
2. Before the party reaches 21 in cases where parents
or guardians may file annulment
How may be impugned
Either directly or collaterally Judicial declaration is necessary

CIVIL LAW
Children
GR: Illegitimate;
XPN: Those conceived or born of marriages declared void Legitimate

under:
1. Art. 36 (Psychological incapacity), or
2. Art. 52 in relation to Art. 53
Property
GR: governed by rules on absolute community
Property relations are governed by rules on co-ownership
XPN: unless another system is agreed upon in marriage
settlement
Judicial Declaration
GR: Not necessary that there is judicial declaration
Necessary
XPN: in case of remarriage
VOID MARRIAGE 1. If the change is artificial – No, he/she cannot.
Q: What are the marriages that are void ab initio? Note: The sex or gender at the time of birth shall be
taken into account. He is still, in the eyes of the law, a
A: LAaMB- PIPS-18 man although because of the artificial intervention, he
now has the physiological characteristics of a woman
1. Absence of any of the essential or formal
(Silverio v. Republic, G.R. No. 174689, October22, 2007)
requisites of marriage;
2. Marriages contracted by any party below 18 years
2. If the change is natural – He/she can.
of age even with the consent of parents or
guardians;
Q: Jennifer was registered as a female in her Certificate of
3. Solemnized without License, except those
Live Birth. In her early years, she suffered from clitoral
marriages that are exempt from the license
hypertrophy and was found out that her ovarian
requirement;
structures had minimized. She also alleged that she has no
4. Solemnized by any person not Authorized to
breasts or menstruation. She was diagnosed to have
perform marriages unless such marriages were
Congenital Adrenal Hyperplasia (CAH) a condition where
contracted with either or both parties believing in
persons thus afflicted possess secondary male
good faith that the solemnizing officer had the
characteristics because of too much secretion of
legal authority to do so;
androgen. She then alleged that for all interests and
5. Contracted through Mistake of one of the
appearances as well as in mind and emotion, she has
contracting parties as to the identity of the other;
become a male person. What is Jennifer’s gender or sex?
6. Bigamous or polygamous marriages;
7. Subsequent marriages which are void under Art.
A: Male. Where the person is biologically or naturally
53 FC;
intersex the determining factor in his gender classification
8. Marriages contracted by any party, who at the
would be what the individual, having reached the age of
time of the celebration of the marriage, was
majority, with good reason thinks of his/her sex. Jennifer
Psychologically incapacitated (Art. 36, FC);
here thinks of himself as a male and considering that his
9. Incestuous Marriages (Art. 37, FC);
body produces high levels of androgen, there is
10. Marriages declared void because they are
preponderant biological support for considering him as
contrary to Public policy (Art. 38, FC).
being male. Sexual development in cases of intersex
persons makes the gender classification at birth
ABSENCE OF REQUISITES
inconclusive. It is at maturity that the gender of such
persons is fixed.
Q: What is the status of a marriage between Filipinos if
the parties thereto are of the same sex?
Jennifer has simply let nature take its course and has not
taken unnatural steps to arrest or interfere with what he
A: Void. For a marriage to be valid, it must be between
was born with. And accordingly, he has already ordered his
persons of opposite sexes.
life to that of a male. He could have undergone treatment
and taken steps, like taking lifelong medication, to force his
Q: In case of a change in sex, can the person who has
body into the categorical mold of a female but he did not.
undergone said change be allowed to marry another of
He chose not to do so. Nature has instead taken its due
the same sex as he/she originally had?
course in his development to reveal more fully his male
characteristics.
A: It depends upon the cause for the change in sex.

To him belongs the primordial choice of what courses of essential or formal requisites shall generally render the
action to take along the path of his sexual development and marriage void ab initio and that, while an irregularity in the
maturation. In the absence of evidence that he is an formal requisites shall not affect the validity of the
“incompetent” and in the absence of evidence to show that marriage, the party or parties responsible for the
classifying him as a male will harm other members of irregularity shall be civilly, criminally and administratively
society who are equally entitled to protection under the liable (Cosca v. Palaypayon, A.M. No. MTJ-92-721,
law, the Court affirms as valid and justified his position and September 30, 1994).
his personal judgment of being a male (Republic v. Jennifer
Cagandahan, G.R. No. 166676, Sep. 12, 2008). Q: For the marriage to be void, on what circumstance
must the mistake refer to?
Q: What is the status of marriages where one or both of
the parties are below 18 years of age? A: For marriage to be rendered void, the mistake in identity
must be with reference to the actual physical identity of
A: It is void for lack of legal capacity. other party, not merely a mistake in the name, personal
qualifications, character, social standing, etc. (Rabuya, p.
Q: Would your answer be the same if their parents 213)
consented to the marriage?
Q: If a person contracts a subsequent marriage during the
A: Yes. Parental consent does not have the effect of curing subsistence of a prior marriage, what is the status of the
this defect. subsequent marriage?
Q: What if the marriage was a mixed marriage where the A: GR: Void for being bigamous or polygamous, even if
Filipino is 18 years old but the foreigner is below 17 years celebrated abroad and valid there as such.
of age. What is the status of the marriage?
XPN: Valid if it is a terminable bigamous marriage.
A: It depends. If the national law of the foreigner recognizes
17 year old persons to be capacitated to marry, then their Q: When is a marriage considered bigamous?
marriage is valid, otherwise it is void.
A: It is when a person contracts a second or subsequent
Q: What is the effect of lack of authority of solemnizing marriage before the former marriage has been legally
officer? dissolved, or before the absent spouse has been declared
presumptively dead by means of judgment rendered in the
A: GR: The marriage is void ab initio. proper proceedings. (Art. 349, RPC)
XPN: Note: The same applies to polygamy.

1. Express - If either or both parties believed in good
faith that the solemnizer had the legal authority Q: Arnold, a Filipino, and Britney, an American, both
to do so. (Art. 35, FC) residents of California, decided to get married in their
2. Implied - Article 10 in relation to Article 26 of the local parish, two years after their marriage, Britney
Family Code. If the marriage between a foreigner obtained a divorce in California. While in Boracay, Arnold
and a Filipino citizen abroad solemnized by a met Jenny, a Filipina, who was vacationing there. Arnold
Philippine consul assigned in that country is fell in love with her. After a brief courtship and complying
recognized as valid in the host country, such with all the requirements, they got married in Hong Kong
marriage shall be considered as valid in the to avoid publicity, it being Arnold’s second marriage. Is his
Philippines. (Sta. Maria Jr., Persons and Family marriage with Jenny valid? (2006 Bar Question)
Relations Law)
A: Yes. The marriage will not fall under Art. 35(4) on
Q: Judge Palaypayon solemnized marriages even without bigamous marriages, provided that Britney obtained an
the requisite marriage license. Thus, some couples were absolute divorce, capacitating her to remarry under her
able to get married by the simple expedient of paying the national law. Consequently, the marriage between Arnold
marriage fees. As a consequence, their marriage contracts and Jenny may be valid as long as it was solemnized and
did not reflect any marriage license number. In addition, valid in accordance with the laws of Hong Kong.
the judge did not sign their marriage contracts and did not
indicate the date of the solemnization, the reason being Q: May a person contract a valid subsequent marriage
that he allegedly had to wait for the marriage license to be before a first marriage is declared void ab initio by a
submitted by the parties. Such marriage contracts were competent court?
not filed with the Local Civil Registry. Are such marriages
valid? A: No. The Supreme Court has consistently held that a
judicial declaration of nullity is required before a valid
A: No. The Family Code pertinently provides that the formal subsequent marriage can be contracted; or else, what
requisites of marriage are, inter alia, a valid marriage transpires is a bigamous marriage, reprehensible and
license, except in the cases provided for therein. immoral. Article 40 of the Family Code expressly requires a
Complementarily, it declares that the absence of any of the

CIVIL LAW
judicial declaration of nullity of marriage (In re: Salvador v. d. clearly explained in the decision
Serafico, A.M. 2008-20-SC, March 15, 2010).
Note: Expert evidence may be given by qualified psychiatrists and
Note: Under Art. 40 of the FC, before one can contract a second clinical psychologists.
marriage on the ground of nullity of the first marriage, there must
first be a final judgment declaring the first marriage void. If a party Q: Is a physician’s examination required in establishing
fails to secure a judicial declaration of nullity of the first marriage, psychological incapacity as a ground for declaration of
he or she runs the risk of being charged with bigamy as the marital nullity?
bond or vinculum in the first nuptial subsists (Mercado v. Tan GR:
137110, August, 2000; Te v. CA GR No: 126746, November 29,
2009). A: No. If the totality of evidence presented is enough to
sustain a finding of psychological incapacity, physician’s
Q: What are the special cases when subsequent marriage examination of the person concerned need not be resorted
is allowed? to.
A: Q: What are the guidelines set by the Court to aid it in its

1. Marriage between a Filipino and a foreigner and disposition of cases involving psychological incapacity?
procurement by the alien spouse of a valid divorce
decree abroad, capacitating him/her to remarry. A:
2. Terminable bigamous marriages (Art. 41) 1. Burden of proof to show the nullity of the marriage
belongs to the plaintiff;
PSYCHOLOGICAL INCAPACITY 2. The root cause of the psychological incapacity must
be: (a) medically or clinically identified, (b) alleged in
Q: What is psychological incapacity? the complaint, (c) sufficiently proven by experts and
(d) clearly explained in the decision.
A: There is no exact definition for psychological incapacity, 3. The incapacity must be proven to be existing at “the
but it was defined by the Supreme Court as “no less than a time of the celebration” of the marriage.
mental (not physical) incapacity that causes a party to be 4. Such incapacity must also be shown to be medically or
truly incognitive of the basic marital covenants that clinically permanent or incurable.
concomitantly must be assumed and discharged by the 5. Such illness must be grave enough to bring about the
parties to the marriage.” disability of the party to assume the essential
obligations of marriage.
The determination is left solely with the courts on a case- 6. The essential marital obligations must be those
to-case basis. Determination of PI “depends on the facts of embraced by Arts. 68 up to 71 of the FC as regards the
the case. Each must be judged, not on the basis of a priori husband and wife, as well as Arts. 220, 221 and 225 of
assumptions, predilections or generalizations but according the same Code in regard to parents and their children.
to its own facts (Republic v. Dagdag, G.R. No. 109975, Such non-complied marital obligation(s) must also be
February 9, 2001). stated in the petition, proven by evidence and
included in the text of the decision.
The intendment of the law has been to confine the 7. Interpretations given by the National Appellate
meaning of "psychological incapacity" to the most serious Matrimonial Tribunal of the Catholic Church in
cases of personality disorders clearly demonstrative of an the Philippines, while not controlling or decisive,
utter insensitivity or inability to give meaning and should be given great respect by our courts.
significance to the marriage (Santos v. CA, G.R. No. 112019, 8. The trial court must order the prosecuting attorney or
January 4, 1995). fiscal and the Solicitor General to appear as counsel for
the state. No decision shall be handed down unless the
Q: What are the requisites of psychological incapacity? Solicitor General issues a certification, which will be
quoted in the decision, briefly stating therein his
A: reasons for his agreement or opposition, as the case
1. Juridical antecedence – must be rooted in the history may be, to the petition (Danilo A. Aurelio v. Vide Ma.
of the party antedating the marriage, although overt Corazon P. Aurelio, G.R. No. 175367, June 6, 2011).
manifestations may arise only after such marriage.
2. Gravity – grave enough to bring about the disability of Q: What are some instances where allegations of
the party to assume the essential marital obligations. psychological incapacity were not sustained?
3. Permanence or incurability – must be incurable. If
curable, the cure should be beyond the means of the 1. Mere showing of irreconcilable differences and
parties involved. conflicting personalities (Carating-Siayngco v.
Siayngco, G.R. No. 158896, Oct, 27. 2004).
Q: How is psychological incapacity proven?
2. Mere sexual infidelity or perversion, do not by
A: The root cause of psychological incapacity must be: themselves constitute psychological incapacity, as
a. medically or clinically identified well as immaturity and irresponsibility.
b. alleged in the complaint
c. sufficiently proven by experts
Note: It must be shown that these acts are sexual intimacy which brings the spouses wholeness and
manifestations of a disordered personality which would oneness (Chi Ming Tsoi v. CA, G.R. No. 119190, January 16,
make respondent completely unable to discharge the 1997).
essential obligations of a marital state, not merely
youth, immaturity or sexual promiscuity (Dedelvs CA,
G.R. no. 151867, January29, 2004). Alternative Answer:
None of them are necessarily psychologically incapacitated.
3. Disagreements regarding money matters (Tongol Being a nagger, etc., are at best only physical
v. Tongol, G.R. No. 157610, October 19, 2007). manifestations indicative of psychological incapacity. More
than just showing the manifestations of incapacity, the
4. Mere abandonment. petitioner must show that the respondent is incapacitated
to comply with the essential marital obligations of marriage
Note: There must be proof of natal or supervening and that it is also essential that he must be shown to be
disabling element in the personality factor that incapable of doing so due to some psychological, not
effectively incapacitates a person from accepting and physical illness. (Republic v. Quintero-Hamano, G.R. No.
complying with the Essential Marital obligations of 149498, May 20, 2004)
Marriage.(Republic v. Quintero-Hamano, G.R. No.
149498, May 20, 2004). Alternative Answer:
A congenital sexual pervert may be psychologically
5. Sexual infidelity (Republic v. Dagdag, GR No. incapacitated if his perversion incapacitates him from
109975, February 9, 2001). discharging his marital obligations. For instance, if his
perversion is of such a nature as to preclude any normal
Q: Would the state of being of unsound mind or the sexual activity with his spouse.
concealment of drug addiction, habitual alcoholism,
homosexuality or lesbianism be considered indicia of INCESTUOUS MARRIAGES
psychological incapacity, if existing at the inception of
marriage? (2002 Bar Question) Q: What marriages are considered incestuous?
A: In the case of Santos v. CA (240 SCRA 20, 1995), the A: Those marriages:
Supreme Court held that being of unsound mind, drug 1. Between ascendants and descendants of any degree;
addiction, habitual alcoholism, lesbianism or homosexuality 2. Between brothers and sisters whether of the full or
may be indicia of psychological incapacity, depending on half blood. (Art. 37, FC)
the degree of severity of the disorder. However, the
concealment of drug addiction, habitual alcoholism, Note: Regardless of whether the relationship between the parties
lesbianism or homosexuality is a ground of annulment of is legitimate or illegitimate.
marriage.
Q: What are the marriages that are void by reason of
Q: Art. 36 of the FC provides that a marriage contracted by public policy?
any party who, at the time of the celebration, was
psychologically incapacitated to comply with the essential A: Marriages between:
marital obligations of marriage, shall be void. 1. Collateral blood relatives (legitimate or Illegitimate) up
th
to the 4 civil degree;
Choose the spouse listed below who is psychologically 2. Step-parents & step-children;
incapacitated. 3. Parents-in-law & children-in-law;
a. Nagger 4. Adopting parent & the adopted child;
b. Gay or Lesbian 5. Surviving spouse of the adopting parent & the adopted
c. Congenital sexual pervert child;
d. Gambler 6. Surviving spouse of the adopted child & the adopter;
e. Alcoholic (2006 Bar Question) 7. Adopted child & legitimate child of the adopter;
8. Adopted children of the same adopter;
A: B and C. To be sure, the existence and concealment of 9. Parties where one, with the intention to marry the
these conditions at the inception of marriage renders the other, kills the latter’s spouse, or his/her spouse. (Art.
marriage contract voidable (Art 46, FC). They may serve as 38, FC)
indicia of psychological incapacity, depending on the
degree and severity of the disorder (Santos v. CA, G.R. No. Note: The list is exclusive. If not falling within this enumeration, the
112019, January 4, 1995). Hence, if the condition of marriage shall be valid. Such as marriages between:
homosexuality, lesbianism or sexual perversion, existing at 1. Adopted and Illegitimate child of the adopter
the inception of the marriage, is of such a degree as to 2. Step brother and step sister
3. Brother-in-law and sister-in-law
prevent any form of sexual intimacy, any of them may
4. Parties who have been guilty of adultery or concubinage
qualify as a ground for psychological incapacity. The law
provides that the husband and wife are obliged to live
Q: Amor gave birth to Thelma when she was 15 years old.
together, observe mutual love, respect and fidelity (Art. 68,
Thereafter, Amor met David and they got married when
FC). The mandate is actually the spontaneous, mutual
she was 20 years old. David has a son, Julian, with his ex-
affection between the spouses/ in the natural order it is

CIVIL LAW
girlfriend Sandra. Can Julian and Thelma get married? barred by res judicata. There is only one cause of action
(2007 Bar Question) which is the nullity of the marriage. Hence, when the
second case was filed based on another ground, there was
A: If the marriage was solemnized during the effectivity of a splitting of a cause of action which is prohibited. The
the NCC, the marriage between stepbrother and stepsister petitioner is estopped from asserting that the first marriage
is void. However, under the FC, the marriage may be valid. had no marriage license because in the first case, he
impliedly admitted the same when he did not question the
PRESCRIPTION absence of a marriage license. Litigants are provided with
the options on the course of action to take in order to
Q: What is the prescriptive period of the action or defense obtain judicial relief. Once an option has been taken and a
for the declaration of absolute nullity of marriage? case is filed in court, the parties must ventilate all matters
and relevant issues therein. The losing party who files
A: None. The time for filing an action or defense for the another action regarding the same controversy will be
declaration of absolute nullity of marriage, whether in a needlessly squandering time, effort and financial resources
direct or collateral manner, does not prescribe. (Art. 39, FC) because he is barred by law from litigating the same
controversy all over again (Mallion v. Alcantara, G.R. No.
Note: Any of the parties in a void marriage can file an action for the 141528, October 31, 2006).
declaration of nullity of marriage even though such party is the
wrongdoer. Q: Is the declaration of nullity of marriage applied
prospectively?
Q: What is the effect of death of a party in a petition for
declaration of nullity of marriages? A: No, it retroacts to the date of the celebration of the
marriage. However, although the judicial declaration of
A: nullity of a marriage on the ground of psychological
1. Before the entry of judgment – The court shall order incapacity retroacts to the date of the celebration of the
the case closed and terminated without prejudice to marriage insofar as the vinculum between the parties is
the settlement of estate in proper proceedings. concerned, it must be noted that the marriage is not
2. After the entry of judgment – The decision shall be without legal consequences or effects. One such
binding upon the parties and their successors-in- consequence or effect is the incurring of criminal liability
interest in the settlement of the estate. for bigamy. To hold otherwise would be to render nugatory
the State's penal laws on bigamy as it would allow
Q: May the heirs of a deceased person file a petition for individuals to deliberately ensure that each marital contract
the declaration of nullity of his marriage after his death? be flawed in some manner, and to thus escape the
consequences of contracting multiple marriages (Tenebro v.
A: No. The advent of the Rule on Declaration of Absolute CA, G.R. No. 150758, February 18, 2004).
Nullity of Void Marriages marks the beginning of the end of
the right of the heirs of the deceased spouse to bring a Q: While his marriage is subsisting, Veronico married
nullity of marriage case against the surviving spouse. The Leticia, which marriage was later declared void on the
heirs can still protect their successional right, for, ground of psychological incapacity. When Veronico got
compulsory or intestate heirs can still question the validity married for the third time, Leticia filed a case for bigamy
of the marriage of the spouses, not in a proceeding for against him.
declaration of nullity but upon the death of a spouse in a
proceeding for the settlement of the estate of the deceased For his defense, Veronico claims that effects of the nullity
spouse filed in the regular courts. of his marriage with Leticia retroacts to the date when it
was contracted, hence, he is not guilty of bigamy for want
However, with respect to nullity of marriage cases of an essential element – the existence of a valid previous
commenced before the effectivity of A.M. No. 02-11-10 and marriage. Rule on Veronico’s argument.
marriages celebrated during the effectivity of the NCC, the
doctrine laid down in the Niñal v. Bayadog case still applies; A: No. Art. 349 of the RPC penalizes the mere act of
that the children have the personality to file the petition to contracting a second or subsequent marriage during the
declare the nullity of marriage of their deceased father to subsistence of a previous valid marriage. Here, as soon as
their stepmother as it affects their successional rights (De the second marriage to Leticia was celebrated, the crime of
Dios Carlos v. Sandoval, G.R. No. 179922, December 16, bigamy had already been consummated as the second
2008). marriage was contracted during the subsistence of the valid
first marriage (Tenebro v. CA, G.R. No. 150758, February 18,
Q: If the court denies a petition for declaration of nullity of 2004).
marriage based on psychological incapacity, may a party
to the said case file another petition for declaration of its Q: Is the judicial declaration of absolute nullity of a void
nullity based on the absence of marriage license? marriage necessary?
A: A petition to declare the marriage void due to absence of A:

marriage license, filed after the court denied a petition to 1. For purposes of remarriage – judicial declaration of
declare the marriage void due to psychological incapacity, is absolute nullity is necessary.
Q: May a marriage be terminated extra-judicially?
Note: In the instance where a party who has
previously contracted a marriage which is legally A: Yes. The recording of the affidavit of reappearance of the
unassailable, he is required by law to prove that the absent spouse in the civil registry of the residence of the
previous one was an absolute nullity. But this he may parties to the subsequent marriage shall automatically
do on the basis solely of a final judgment declaring terminate the terminable bigamous marriage unless there is
such previous marriage void. a judgment annulling the previous marriage or declaring it
void ab initio. (Art. 42)
2. For purposes other than remarriage – no judicial
action is necessary. In Art 42, FC, no judicial proceeding to annul a subsequent
marriage contracted under Art. 41 is necessary. Also, the
Note: Here, evidence may be adduced, testimonial or termination of the subsequent marriage by affidavit
documentary, to prove the existence of the grounds provided for in Art. 42 does not preclude the filing of an
rendering such a previous marriage an absolute nullity. But action in court to prove the reappearance of the absentee
these need not be limited solely to an earlier final judgment
and obtain a declaration of dissolution or termination of the
of a court declaring such marriage void. (Rabuya, Civil Law
Reviewer, 2009 ed.) subsequent marriage (SSS v. Jarque Vda. De Bailon, G.R. No.
165545, March 24, 2006).
SUBSEQUENT MARRIAGE
Q: When are non-bigamous subsequent marriages void?
Q: In what cases may a person enter into a valid
subsequent marriage during the subsistence of a prior A: The subsequent marriage of a person whose prior
marriage? marriage has been annulled but contracted said subsequent
marriage without compliance with Art. 52, FC, shall be void.
A: In case of terminable bigamous marriages. If before the
celebration of the subsequent marriage: ABD Before he contracts a subsequent marriage, he must first
1. The Absent spouse had been absent for 4 comply with the requirement provided for in Art. 52, viz:
consecutive years (ordinary absence) or 2
consecutive years (extra-ordinary absence); The recording in the civil registries and registries of
2. The present spouse has a well-founded Belief that properties of the following: JPDD
the absent spouse is already dead; 1. Judgment of annulment;
3. There is judicial Declaration of presumptive death in 2. Partition;
a summary proceeding. 3. Distribution of properties, and
4. Delivery of presumptive legitimes
Note: If both spouses of subsequent marriage acted in bad faith,
such marriage is void ab initio. Q: Ana Rivera had a husband, a Filipino citizen like her,
who was among the passengers on board a commercial jet
Q: Gregorio married Janet. When he was employed plane which crashed in the Atlantic Ocean ten (10) years
overseas, he was informed that Janet left. Five years later, earlier and had never been heard of ever since. Believing
he filed an action for her to be declared presumptively that her husband had died, Ana married Adolf Cruz
dead without alleging that he wishes to remarry. Will his Staedler, a divorced German national born of a German
action prosper? father and a Filipino mother residing in Stuttgart. To avoid
being required to submit the required certificate of
A: No. A petition to declare an absent spouse capacity to marry from the German Embassy in Manila,
presumptively dead may not be granted in the absence of Adolf stated in the application for marriage license stating
any allegation that the spouse present will remarry. Also, that Adolf was a Filipino, the couple got married in a
there is no showing that Gregorio conducted a search for ceremony officiated by the Parish Priest of Calamba,
his missing wife with such diligence as to give rise to a Laguna in a beach in Nasugbu, Batangas, as the local
"well-founded belief" that she is dead. The four requisites parish priest refused to solemnize marriage except in his
not having concurred, his action for the declaration of church. Is the marriage valid? (2008 Bar Question)
presumptive death of his wife should be denied (Republic v.
Nolasco, G.R. No. 94053, March 17, 1993). A: The issue hinges on whether or not the missing husband
was dead or alive at the time of the second marriage.
Q: What is the effect if the parties to the subsequent
marriage obtains knowledge that the spouse absent has If the missing husband was in fact dead at the time the
reappeared? second marriage was celebrated, the second marriage was
valid. Actual death of a spouse dissolves the marriage ipso
A: None. If the absentee reappears, but no step is taken to facto whether or not the surviving spouse had knowledge of
terminate the subsequent marriage, either by affidavit or by such fact. A declaration of presumptive death even if
court action, such absentee's mere reappearance, even if obtained will not make the marriage voidable because
made known to the spouses in the subsequent marriage, presumptive death will not prevail over the fact of death.
will not terminate such marriage (SSS v. Jarque Vda. De
Bailon, G.R. No. 165545, March 24, 2006). If the missing husband was in fact alive when the second
marriage was celebrated, the second marriage was void ab

CIVIL LAW
initio because of a prior subsisting marriage. Had Ana
obtained a declaration of presumptive death, the second
marriage would
have been voidable.
In both cases, the fact that the German misrepresented his

citizenship to avoid having to present his Certificate of Legal
Capacity, or the holding of the ceremony outside the church
or beyond the territorial jurisdiction of the solemnizing
officer, are all irregularities which do not affect the validity
of the marriage.
VOIDABLE MARRIAGES
Q: What is the effect if a marriage is voidable?
A: A voidable marriage is considered valid and produces all

its civil effects until it is set aside by final judgment of a
competent court in an action for annulment. (Rabuya,
2006, p. 295)
Q: What are voidable marriages and how may they be ratified?
A:
GROUND RATIFICATION WHO MAY FILE WHEN TO FILE
Contracting party who failed to obtain
Marriage of a party 18 years of parental consent: Through free
cohabitation after attaining the age of By the contracting party Within 5 years after
age or over but below 21
21. attaining the age of 21
solemnized without the consent
of the parents, guardian or Parent, guardian, or
Note: The parents cannot ratify the person having legal charge At any time before
person having substitute
marriage. The effect of prescription on such party has reached
parental authority over the of the contracting party
their part is that they are barred from the age of 21
party, in that order contesting it but the marriage is not yet
cleansed of its defect.
Sane spouse who had no At any time before the
knowledge of the other’s death of either party
insanity
At any time before the
Either party was of unsound Insane spouse: Through free
Any relative, guardian or death of either party
mind cohabitation after coming to reason.
person having legal charge
of the insane During a lucid interval
or after regaining
Insane spouse sanity
Injured party: Through free
Consent of either party was Within 5 years after
cohabitation with full knowledge of Injured party
obtained by fraud the discovery of fraud
the facts constituting the fraud.
Within 5 years from
Injured party: Through free the time the force,
Vices of consent such as force,
cohabitation after the vices have Injured party intimidation or undue
intimidation or undue influence
ceased or disappeared. influence disappeared
or ceased
May not be ratified but action may be Within 5 years after
Impotence and STD
barred by prescription only, which is 5 Injured party the celebration of
years after the marriage marriage

Q: What is the test in determining unsoundness of mind as Note: The intention of Congress to confine the circumstances that
a ground for annulment? can constitute fraud as ground for annulment of marriage to the 3
cases therein may be deduced from the fact that, of all the causes of
nullity enumerated in Art. 85 (now, Art. 46 of the FC), fraud is the
A: It is essential that the mental incapacity must relate
only one given special treatment in a subsequent article within the
specifically to the contract of marriage and the test is chapter on void and voidable marriages. If its intention were
whether the party at the time of the marriage was capable of otherwise, Congress would have stopped at Art. 85, for anyway,
understanding the nature and consequences of the fraud in general is already mentioned therein as a cause for
marriage. (Rabuya, 2006, p. 300) annulment. (Anaya v. Palaroan, GR L-27930, November 26, 1970)
Q: Who may file annulment based on unsound mind? Q: Under what conditions, respectively, may drug addiction
be a ground, if at all, for the declaration of nullity of
A: GR: The sane spouse has the legal standing to file the marriage, annulment of marriage, and legal separation?
action for annulment only in cases where he or she (1997 Bar Question)
contracted the marriage without knowledge of the other’s
insanity. A:
Declaration of Nullity a. The drug addiction must
XPNs: When the sane spouse had knowledge of the of Marriage amount to psychological
other’s insanity, action for annulment may be filed only incapacity to comply with the
by the following; essential obligations of
1. Any relative or guardian or person having legal marriage;
charge of the insane b. It must be antecedent
2. The insane spouse during a lucid interval or after (existing at the time of
regaining sanity (Rabuya, p. 301) marriage), grave and
incurable:
Q: What are the circumstances constituting fraud under Annulment of Marriage a. The drug addiction must be
Art. 45(3)? concealed;
b. It must exist at the time of
A: NPSD marriage;
1. Non-disclosure of conviction by final judgment of crime c. There should be no
involving moral turpitude; cohabitation with full
2. Concealment by the wife of the fact that at the time of knowledge of the drug
marriage, she was Pregnant by a man other than her addiction;
husband; d. The case is filed within five (5)
3. Concealment of Sexually transmitted disease, regardless years from discovery.
of nature, existing at the time of marriage; Legal Separation a. There should be no
4. Concealment of Drug addiction, habitual alcoholism, condonation or consent to
homosexuality and lesbianism. (Art. 46) the drug addiction;
b. The action must be filed
Note: Where there has been no misrepresentation or fraud, that is, within five (5) years from the
when the husband at the time of the marriage knew that the wife occurrence of the cause.
was pregnant, the marriage cannot be annulled (Buccat v. Buccat,
c. Drug addiction arises during
G.R. No. 47101, April 25, 1941).
the marriage and not at the
time of marriage.
Q: Aurora prayed for the annulment of her marriage with
Fernando on the ground of fraud in obtaining her consent
after having learned that several months prior to their
marriage, Fernando had pre-marital relationship with a Q: If drug addiction, habitual alcoholism, lesbianism or
close relative of his. According to her, the "non- homosexuality should occur only during the marriage,
divulgement to her of such pre-marital secret" constituted would these constitute grounds for a declaration of nullity
fraud in obtaining her consent w/in the contemplation of or for legal separation, or would they render the marriage
Art. 46 of the FC. Is the concealment by the husband of a voidable (2002 Bar Question)?
pre-marital relationship with another woman a ground for
annulment of marriage? A: In accordance with law, if drug addiction, habitual
alcoholism, lesbianism or homosexuality should occur only
A: No. The non-disclosure to a wife by her husband of his during the marriage, they will:
pre-marital relationship with another woman is not a ground 1. Not constitute as grounds for declaration of nullity. (Art.
for annulment of marriage. For fraud as a vice of consent in 36, FC)
marriage, which may be a cause for its annulment, comes 2. Constitute as grounds for legal separation. (Art. 55, FC);
under Art. 46 of the FC. This fraud, as vice of consent, is and
limited exclusively by law to those kinds or species of fraud 3. Not constitute as grounds to render the marriage
enumerated in Art. 86. voidable. (Arts. 45 and 46 of the FC)

CIVIL LAW
Q: When is vitiated consent a ground for annulment of Yvette annulled on the ground that Yvette has STD. Yvette
marriage? opposes the suit contending that Joseph is estopped from
seeking annulment of their marriage since he knew even
A: GR: Consent of either party was obtained by force, before their marriage that she was afflicted with HIV virus.
intimidation or undue influence Can the action of Joseph for annulment of his marriage with
Yvette prosper?
XPN: If the same having disappeared or ceased, such
party thereafter freely cohabited with the other as A: No. Concealment of a sexually transmitted disease may
husband and wife annul the marriage if there was fraud existing in the party
concerned. In this case, there was no fraud because Joseph
Q: When may impotence be a ground for annulment of knew that Yvette was suffering from HIV when he married
marriage? her. (Art. 46, par 3, FC)
A: CPUII Q: Differentiate Arts. 45 and 46 of the FC on STD as ground

1. Exists at the time of the Celebration of marriage for annulment.
2. Permanent (does not have to be absolute)
3. Incurable A:
4. Unknown to the other spouse ARTICLE 45 ARTICLE 46
5. Other spouse must not also be Impotent Affliction Concealment
The act of concealing is the
Q: In case there is no proof as to the potency of one spouse, The fact of being afflicted is
ground for annulment as it
shall he be considered as impotent? the ground for annulment
constitutes fraud
A: GR: No. Presumption is in favor of potency. Whether concealed or not There must be concealment
Must be serious and Does not have to be serious

XPN: Doctrine of triennial cohabitation.
incurable and incurable
Q: What is the doctrine of triennial cohabitation?
PRESENCE OF PROSECUTOR
A: If after 3 years of living together with her husband, the
wife remained a virgin, the husband is presumed to be Q: What is the role of the prosecutor or Solicitor General in
impotent (Rabuya, Persons, p. 310). The husband will have to all cases of annulment or declaration of absolute nullity of
overcome this presumption. marriage?
Q: The day after John and Marsha got married, John told A: They shall take steps to prevent collusion between the
her that he was impotent. Marsha continued to live with parties and to take care that evidence is not fabricated or
John for two years. Is Marsha now estopped from filing an suppressed. Concomitantly, even if there is no suppression
annulment case against John? (2007 Bar Question) of evidence, the public prosecutor has to make sure that the
evidence to be presented or laid down before the court is
A: No. Unlike the other grounds for annulment of voidable not fabricated. Truly, only the active participation of the
marriage which are subject to ratification by continued public prosecutor or the Solicitor General will ensure that
cohabitation, the law does not allow ratification in case of the interest of the State is represented and protected in
impotency. proceedings for declaration of nullity of marriages by
preventing the fabrication or suppression of evidence. (Art.
Q: When may affliction of a sexually transmitted disease 48, FC)
(STD) be a ground for annulment?
Note: The non-intervention of the prosecutor is not fatal to the
validity of the proceedings in cases where the respondent in a
A: Requisites: AESIAF
petition for annulment vehemently opposed the same and where he
a. One of the parties is Afflicted with STD does not allege that evidence was suppressed or fabricated by any
b. STD must be: of the parties (Tuason v. CA, G.R. No. 116607, April 10, 1996).
a. Existing at the time the marriage is celebrated
b. Serious Q: What are the actions prohibited in annulment and
c. apparently Incurable declaration of absolute nullity of marriage cases?
c. The other spouse must not be Aware of the other’s
affliction A: CCSSJ
d. Injured party must be Free from STD. 1. Compromise
2. Confession of judgment
Q: Yvette was found to be positive for HIV virus, considered 3. Stipulation of facts
sexually transmissible, serious and incurable. Her boyfriend 4. Summary judgment
Joseph was aware of her condition and yet married her. 5. Judgment on the pleadings
After two (2) years of cohabiting with Yvette, and in his
belief that she would probably never be able to bear him a Note: What the law prohibits is a judgment based exclusively or
healthy child, Joseph now wants to have his marriage with mainly on defendant's confession (Ocampo v. Florenciano, 107 Phil.

35). Thus, stipulation of facts or confession of judgment if Q: What must the final judgment of nullity or annulment
sufficiently supported by other independent substantial evidence to provide?
support the main ground relied upon, may warrant an annulment or
declaration of absolute nullity.
A: The final judgment shall provide for the ff:
1. Liquidation, partition and distribution of the properties
PENDENCY OF ACTION
of the spouses;
2. Custody and support of the common children; and
Q: What is the duty of the Court during the pendency of the
3. Delivery of their presumptive legitimes.
action for annulment, declaration of absolute nullity of
marriage or legal separation?
Unless such matters had already been adjudicated in
previous judicial proceedings, in which case, the final
A: The Court shall, in the absence of adequate written
judgment of nullity or annulment need not provide for those
agreement between the spouses, provide for the:
which have already been adjudicated.
1. Support of the spouses
2. Support and custody of the common children. Note: Where there was a failure to record in the civil registry and
3. Visitation rights of the other parent. (Art.49, FC) registry of property the judgment of annulment or absolute nullity
of the marriage, the partition and distribution of the property of the
EFFECTS OF NULLITY spouses, and the delivery of the children’s presumptive legitimes, it
shall not affect third persons. (Arts. 52, FC)
Q: What rule governs the liquidation of properties in
marriages declared void or annulled by final judgment? Q: What are the forms of presumptive legitime?
A: A:
1. Void marriages: 1. Cash
GR: The rules on co-ownership under the Civil Code 2. Property
(Valdes v. RTC, G.R. No. 122749. July 31, 1996). 3. Sound security
XPN: Art. 43(2) of the FC in marriages declared Q: What must be done by a person whose prior marriage
void under Art. 40. (Art. 50) was annulled or declared void if he wishes to remarry?
2. Voidable marriages under Art. 45: shall be liquidated in A: He must comply with the requirement provided for in Art.
accordance with Art. 43(2) of the FC. (Art. 50) 52, before he contracts a subsequent marriage, viz:
Note: In both instances under Arts. 40 and 45, the marriages are The recording in the civil registries and registries of
governed either by absolute community of property or conjugal properties of the following: JPDD
partnership of gains unless the parties agree to a complete 1. Judgment of annulment;
separation of property in a marriage settlement entered into before 2. Partition;
the marriage (Dino v. Dino, G.R. No. 178044, January 19, 2011).
3. Distribution of properties; and
4. Delivery of presumptive legitimes.
Q: What are the effects of Final Judgment of Annulment?
LEGAL SEPARATION
A: The effects are:
1. Termination of the marital bond, as if it had never been
GROUNDS
entered into, but the effects thereof are not totally
wiped out.
Q: What are the grounds for legal separation?
2. Children conceived or born before the judgment of
annulment has become final and executor are
A: PALFAC SILA
considered legitimate.
1. Repeated Physical violence or grossly abusive conduct
3. Absolute community property regime or the conjugal
against petitioner, common child, child of petitioner;
partnership property regime is terminated of dissolved
2. Attempt to corrupt or induce petitioner, common child,
and the same shall be liquidated in accordance with the
child of petitioner to engage in prostitution, or
provisions of Arts. 102 and 129.
connivance in such corruption or inducement;
3. Attempt by respondent against Life of petitioner;
Q: What will happen to the liquidation of property, after
4. Final judgment sentencing respondent to imprisonment
final judgment of annulment, if either spouse contracted
of more than 6 years, even if pardoned;
the marriage in bad faith?
5. Drug Addiction or habitual alcoholism of respondent;
A: If either spouse contracted the marriage in bad faith, his Note: It must exist after celebration of marriage
or her share of the next profits of the community property or
conjugal partnership property shall be forfeited in favour of 6. Physical violence or moral pressure to Compel
the common children or if there be none, the children of the petitioner to change religious or political affiliation;
guilty spouse by previous marriage or in default thereof, the 7. Bigamous marriage Subsequently contracted by
innocent spouse. respondent in the Philippines or abroad

CIVIL LAW
8. Sexual Infidelity or perversion; f. Intimidation directed against the woman or child. This
9. Lesbianism or homosexuality of respondent; shall include, but not limited to, the following acts
committed with the purpose or effect of controlling
Note: It must exist after celebration of marriage or restricting the woman’s or her child’s movement
or conduct:
10. Abandonment of petitioner by respondent without i. Threatening to deprive or actually depriving the
justifiable cause for more than 1 year. woman or her child of custody to her/his
family;
Q: If a man commits several acts of sexual infidelity, ii. Depriving or threatening to deprive the woman
particularly in 2002, 2003, 2004, 2005, does the prescriptive or her children of financial support legally due
period to file for legal separation run from 2002? (2007 Bar her or her family, or deliberately providing the
Question) woman’s children insufficient financial support;
iii. Depriving or threatening to deprive the
A: The prescriptive period begins to run upon the woman or her child of a legal right;
commission of each act of infidelity. Every act of sexual iv. Preventing the woman in engaging in any
infidelity committed by the man is a ground for legal legitimate profession, occupation, business or
separation. activity or controlling the victim’s own money
or properties, or solely controlling the conjugal
Q: Lucita left the conjugal dwelling and filed a petition for or common money, or properties;
legal separation due to the physical violence, threats, 5. Inflicting or threatening to inflict physical harm on
intimidation and grossly abusive conduct she had suffered oneself for the purpose of controlling her actions or
at the hands of Ron, her husband. Ron denied such and decisions;
claimed that since it was Lucita who had left the conjugal 6. Causing or attempting to cause the woman or her child
abode, then the decree of legal separation should not be to engage in any sexual activity which does not
granted, following Art. 56 (4) of the FC which provides that constitute rape, by:
legal separation shall be denied when both parties have a. Force, or
given ground for legal separation. Should legal separation b. threat of force;
be denied on the basis of Ron’s claim of mutual guilt? c. physical harm, or
d. through intimidation directed against the woman
A: No. Art. 56 (4) of the FC does not apply since the or her child or her/his immediate family;
abandonment that is a ground for legal separation is 7. Engaging in purposeful, knowing, or reckless conduct,
abandonment without justifiable cause for more than one personally or through another that alarms or causes
year. In this case, Lucita left Ron due to his abusive conduct. substantial emotional or psychological distress to the
Such act does not constitute the abandonment woman or her child. This shall include, but not be
contemplated in the said provision. Since this is so, there is limited to, the following acts:
no mutual guilt between them as there is only one erring a. Stalking or following the woman or her child in
spouse (Ong Eng Kiam v. CA, GR No. 153206, October 23, public or private places;
2006). b. Peering in the window or lingering outside the
residence of the woman or her child;
Q: What acts are considered acts of violence under R.A. c. Entering or remaining in the dwelling or on the
9262? property of the woman or her child against her/his
will;
A: d. Destroying the property and personal
1. Causing, threatening to cause, or attempting to cause belongingness or inflicting harm to animals or pets
physical harm to the woman or her child; of the woman or her child; and
e. Engaging in any form of harassment or violence;
2. Placing the woman or her child in fear of imminent 8. Causing mental or emotional anguish, public ridicule or
physical harm; humiliation to the woman or her child, including, but
not limited to, repeated verbal and emotional abuse,
3. Attempting to compel or compelling the woman or her and denial of financial support or custody of minor
child: children of access to the woman’s child/children.
a. to engage in conduct which the woman or her child
has the right to desist from; or Q: What is a Protection Order under R.A. 9262?
b. desist from conduct which the woman or her child has
the right to engage in, A: Protection order is an order issued under this act for the
purpose of preventing further acts of violence against a
4. Attempting to restrict or restricting the woman’s or her woman or her child and granting other necessary relief. The
child’s freedom of movement or conduct by: relief granted under a protection order serves the purpose of
a. Force, or safeguarding the victim from further harm, minimizing any
b. Threat of force; disruption in the victim’s daily life, and facilitating the
c. Physical, or opportunity and ability of the victim to independently regain
d. Other harm, or control over her life. The provisions of the protection order
e. Threat of physical or other harm; shall be enforced by law enforcement agencies. The
protection orders that may be issued under this Act are the Note: This case was decided under the Civil Code not under the
barangay protection order (BPO), temporary protection Family Code.
order (TPO) and permanent protection order (PPO).
What is the effect of failure to interpose prescription as a
Q: Who may file for protection order? defense?
A: A: None. While it is true that prescription was not interposed

1. The offended party; as a defense, nevertheless, the courts can take cognizance
2. Parents or guardians of the offended party; thereof, because actions seeking a decree of legal
3. Ascendants, descendants or collateral relatives within separation, or annulment of marriage, involve public interest
the fourth civil degree of consanguinity or affinity; and it is the policy of our law that no such decree be issued if
4. Officers or social workers of the DSWD or social workers any legal obstacles thereto appear upon the record (Brown v.
of local government units (LGUs); Yambao, G.R. No. L-10699, October 18, 1957).
5. Police officers, preferably those in charge of women
and children’s desks; Q: Rosa and Ariel were married in the Catholic Church of
6. Punong barangay or Barangay Kagawad; Tarlac, Tarlac on January 5, 1988. In 1990, Ariel went to
7. Lawyer, counselor, therapist or healthcare provider of Saudi Arabia to work. There, after being converted into
the petitioner; Islam, Ariel married Mystica, Rosa learned of the second
8. At least 2 concerned responsible citizens of the city or marriage of Ariel on January 1, 1992 when Ariel returned to
municipality where the violence against women and the Philippines with Mystica. Rosa filed an action for legal
their children occurred and who has personal separation on February 5, 1994.
knowledge of the offense committed.
1. Does Rosa have legal grounds to ask for legal
DEFENSES separation?
2. Has the action prescribed? (1994 Bar Question)
Q: What are the grounds for denial of petition for legal
separation? A:
1. Yes, the abandonment of Rosa by Ariel for more than
A: C
4
MP-DR one (1) year is a ground for legal separation unless upon
1. Condonation of the act complained of; returning to the Philippines, Rosa agrees to cohabit with
2. Consent to the commission of the offense/act; Ariel which is allowed under the Muslim Code. In this
3. Connivance in the commission of the act; case, there is condonation.
4. Collusion in the procurement of decree of LS;
5. Mutual guilt; The contracting of a subsequent bigamous marriage
6. Prescription: 5 yrs from occurrence of cause; whether in the Philippines or abroad is a ground for
7. Death of either party during the pendency of the case legal separation under Art. 55 (7) of the FC. Whether
(Lapuz-Sy v. Eufemio, G.R. No. L-31429, January 31, the second marriage is valid or not, Ariel having
1972); converted into Islam, is immaterial.
8. Reconciliation of the spouses during the pendency of
the case (Art. 56, FC) 2. No. Under Art. 57 of the FC, the aggrieved spouse must
file the action within 5 years from the occurrence of the
Q: What is the prescriptive period for filing a petition for cause. The subsequent marriage of Ariel could not have
legal separation? occurred earlier than 1990, the time he went to Saudi
Arabia. Hence, Rosa has until 1995 to bring the action
A: An action for legal separation shall be filed within five under the FC.
years from the time of the occurrence of the cause (Art. 57,
FC). An action filed beyond that period is deemed prescribed. COOLING-OFF PERIOD
Q: William filed a petition for legal separation in 1955 Q: What is the mandatory cooling-off period?
grounded on Juanita’s adulterous relations allegedly
discovered by William in 1945. Was William’s action A: The requirement set forth by law that an action for legal
already barred by prescription? separation shall be in no case tried before 6 months has
elapsed since the filing of the petition, to enable the
A: Yes. Under Art. 102, NCC, an action for legal separation contending spouses to settle differences. In other words, it is
cannot be filed except within 1 year from and after the for possible reconciliation (Art. 58, FC).
plaintiff became cognizant of the cause and within five years
from and after the date when such cause occurred. The 6 months cooling-off period is a mandatory
requirement. Petition shall not be granted if it is not
In this case, William’s action is already barred because of his observed (Pacete v. Carriaga, G.R. No. L-53880 March 17,
failure to petition for legal separation proceedings until ten 1994).
years after he learned of his wife's adultery, which was upon
his release from internment in 1945 (Brown v. Yambao, G.R.
No. L-10699, October 18, 1957).

CIVIL LAW
Note: There is no cooling-off period if the ground alleged are those depend upon the parties themselves. It is consonant with
under R.A. 9262 (Anti-violence against Women and Children). The this policy that the inquiry by the Fiscal should be allowed to
court can immediately hear the case. focus upon any relevant matter that may indicate whether
the proceedings for separation or annulment are fully
RECONCILIATION EFFORTS justified or not. (Brown v. Yambao, G.R. No. L-10699, October
18, 1957)
Q: What is required of the Court before legal separation
may be decreed? Q: Who may file, when and where should the petition for
legal separation be filed?
A: The Court shall take steps toward the reconciliation of the
spouses and must be fully satisfied, despite such efforts, that A:
reconciliation is highly improbable. (Art. 59, FC) Who may file Husband or wife
Within 5 years from the time of the
CONFESSION OF JUDGMENT When to file
occurrence of the cause
Family Court of the province or city
Q: What is the rule in rendering a judgment of legal
where the petitioner or the respondent
separation based upon a stipulation of facts or confession
has been residing for at least 6 months
of judgment?
Where to file prior to the date of filing or in case of a
non-resident, where he may be found in
A: A decree of legal separation cannot be issued solely on the
the Philippines, at the election of the
basis of a stipulation of facts or a confession of judgment.
petitioner
The grounds for legal separation must be proved. Neither
confession of judgment nor summary judgment is allowed
EFFECTS OF FILING PETITION
(Art. 60, FC).
Q: What are the effects of filing of a petition for legal
Note: What the law prohibits is a judgment based exclusively or
mainly on defendant's confession. (Ocampo v. Florenciano, G.R. No. separation?
L-13553, February 23, 1960)
A:
Q: After learning of Juanita’s misconduct, William filed a 1. The spouses shall be entitled to live separately from
petition for legal separation. During his cross-examination each other.
by the Assistant Fiscal, it was discovered that William lived 2. In the absence of a written agreement between the
with a woman named Lilia and had children with her after parties, the court shall designate either the husband or
rd
the liberation. The court denied the petition on the ground the wife or a 3 person to administer the absolute
both of them had incurred in a misconduct of similar nature community or conjugal partnership property.
that barred the right of action under Art. 100, NCC.
EFFECTS OF PENDENCY
William argues that in cross-examining him with regard to
his marital relation with Lilia, who was not his wife, the Q: What is the effect of the death of plaintiff- spouse
Assistant Fiscal acted as counsel for Juanita when the before a decree of legal separation?
power of the prosecuting officer is limited to finding out
whether or not there is collusion, and if there is no A: The death of plaintiff before a decree of legal separation
collusion, to intervene for the state. Is his argument abates such action. Being personal in character, it follows
correct? that the death of one party to the action causes the death of
the action itself - actio personalis moritur cum persona. Even
A: The argument is untenable. It was legitimate for the Fiscal if property rights are involved, because these rights are mere
to bring to light any circumstances that could give rise to the effects of the decree of legal separation, being rights in
inference that Juanita's default was calculated, or agreed expectation, these rights do not come into existence as a
upon, to enable him to obtain the decree of legal separation result of the death of a party. Also under the Rules of Court,
that he sought without regard to the legal merits of his case. an action for legal separation or annulment of marriage is
One such circumstance is the fact of William's cohabitation not one which survives the death of spouse. (Lapuz v.
with Lilia, since it bars him from claiming legal separation by Eufemio, G.R. No. L-31429, January 31, 1972)
express provision of Art. 100 of the NCC. Such evidence of
misconduct is a proper subject of inquiry as they may Q: May the heirs of the deceased spouse continue the suit
justifiably be considered circumstantial evidence of collusion (petition for decree of legal separation) if the death of the
between the spouses. spouse takes place during the pendency of the suit?
Art. 101 of the NCC, calling for the intervention of the state A: No. An action for legal separation is purely personal,
attorneys in case of uncontested proceedings for legal therefore, the death of one party to the action causes the
separation (and of annulment of marriages, under Art. 88) death of the action itself – action personalis moritur cum
emphasizes that marriage is more than a mere contract; that persona.
it is a social institution in which the state is vitally interested,
so that its continuation or interruption cannot be made Note: Incases where one of the spouses is dead, or where the
deceased’s heirs continue the suit, separation of property and any

forfeiture of share already effected subsists, unless spouses agree to Q: Which of the following remedies,
revive former property regime. a. declaration of nullity of marriage,
b. annulment of marriage,
EFFECTS OF LEGAL SEPARATION c. legal separation, and/or
d. separation of property,
Q: What are the effects of decree of legal separation? can an aggrieved spouse avail himself/herself of:
A: a. If the wife discovers after the marriage that her husband

1. Spouses entitled to live separately; has “AIDS”?
Note: Marriage bond not severed A: Since AIDS is a serious and incurable sexually transmissible
disease, the wife may file an action for annulment of the
2. ACP/CPG shall be dissolved and liquidated; marriage on this ground whether such fact was concealed or
not from the wife, provided that the disease was present at
Note: But offending spouse shall have no right to any share of
the time of the marriage. The marriage is voidable even
the net profits earned by the AC/CP which shall be forfeited in
according w/ Art. 43(2). though the husband was not aware that he had the disease
at the time of marriage.
3. Custody of minor children is awarded to the innocent
spouse (subject to Art. 213, FC); b. If the wife goes to abroad to work as a nurse and refuses
4. Offending spouse is disqualified to inherit from innocent to come home after the expiration of her three-year
spouse by intestate succession; contract there?
5. Provisions in the will of innocent spouse which favors
offending spouse shall be revoked by operation of law; A: If the wife refuses to come home for three (3) months
6. Innocent spouse may revoke donations he/she made in from the expiration of her contract, she is presumed to have
favor of offending spouse; abandoned the husband and he may file an action for judicial
separation of property. If the refusal continues for more than
Note: Prescriptive period: 5 years from finality of decree of one year from the expiration of her contract, the husband
legal separation may file the action for legal separation under Art. 55(10) of
the FC on the ground of abandonment of petitioner by
7. Innocent spouse may revoke designation of offending respondent without justifiable cause for more than one year.
spouse as beneficiary in any insurance policy, even The wife is deemed to have abandoned the husband when
when stipulated as irrevocable. she leaves the conjugal dwelling without any intention of
returning (Art. 101, FC). The intention not to return cannot
Note: An action for legal separation which involves nothing more be presumed during the 30 year period of her contract.
than bed-and-board separation of the spouses is purely personal.
The Civil Code recognizes this by: c. If the husband discovers after the marriage that his wife
1. By allowing only the innocent spouse and no one else to has been a prostitute before they got married?
claim legal separation;
2. By providing that the spouses can, by their reconciliation,
stop or abate the proceedings and even rescind a decree of A: If the husband discovers after the marriage that his wife
legal separation already granted (Lapuz v. Eufemio, G.R. No. was a prostitute before they got married, he has no remedy.
L-31429, January 31, 1972). No misrepresentation or deceit as to character, health, rank,
fortune or chastity shall constitute fraud as legal ground for
Q: May the wife who has been granted legal separation an action for the annulment of marriage (Art. 46, FC).
petition be allowed to revert to her maiden name?
d. If the husband has a serious affair with his secretary and
A: No. The marriage bond not having severed, the woman refuses to stop notwithstanding advice from relatives and
remains to be the lawful wife of the man. friends?
Note: Even under the NCC, the use of the husband's surname during A: The wife may file an action for legal separation. The
the marriage (Art. 370, NCC), after annulment of the marriage (Art. husband’s sexual infidelity is a ground for legal separation
371, NCC) and after the death of the husband (Art. 373, NCC) is (Art. 55, FC). She may also file an action for judicial
permissive and not obligatory except in case of legal separation (Art. separation of property for failure of her husband to comply
372, NCC). Under the present article of our Code, however, the word
with his marital duty of fidelity (Art. 135(4), 101, FC).
"may" is used, indicating that the use of the husband's surname by
the wife is permissive rather than obligatory. We have no law which
provides that the wife shall change her name to that of the husband e. If the husband beats up his wife every time he comes
upon marriage. This is in consonance with the principle that home drunk? (2003 Bar Question)
surnames indicate descent. It seems, therefore, that a married
woman may use only her maiden name and surname. She has an A: The wife may file an action for legal separation on the
option, but not a duty, to use the surname of the husband in any of ground of repeated physical violence on her person (Art.
the ways provided by this Article (Yasin v. Hon. Judge Sharia’h 55(1), FC). She may also file an action for judicial separation
District court, G.R. No. 94986, February 23, 1995).
of property for failure of the husband to comply with his
marital duty of mutual respect (Art. 135(4), Art. 101, FC). She
may also file an action for declaration of nullity of the

CIVIL LAW
marriage if the husband’s behavior constitutes psychological This is an exception to the Rules of Court provision that defenses not
incapacity existing at the time of the celebration of marriage. raised in the pleadings will not be considered since provisions on
marriage are substantive in nature.(Brown v. Yambao, G.R. No. L-
10699, October 18, 1957)
Q: What will happen to the donations made by the spouses
to each other?
Q: Does reconciliation automatically revive the former
property regime of the spouses?
A: The revocation of the donations shall be recorded in the
registries of property in the places where the properties are
A: No. If the spouses want to revive the previous property
located. Alienations, liens and encumbrances registered in
regime, they must execute an agreement to revive the
good faith before the recording of the complaint for
former property regime, which agreement shall be
revocation in the registries of property shall be respected.
submitted in court, together with a verified motion for its
The revocation of or change in the designation of the
approval. (Art. 67, FC)
insurance beneficiary shall take effect upon written
notification thereof to the insured.
The agreement to revive must be under oath and specify:
1. The properties to be contributed anew to the
The action to revoke the donation must be brought within
restored regime;
five years from the time the decree of legal separation has
2. Those to be retained as separated properties of
become final.
each spouse; and
3. The names of all their known creditors, their
RECONCILIATION
addresses and the amounts owing to each.
Q: What are the effects of reconciliation?
Q: What if there is reconciliation between the spouses
while the petition is being heard by the court?
A:
1. As to the Decree:
A:
a. During the pendency of the case: LS proceedings
1. If the spouses should reconcile, a corresponding joint
terminated at whatever stage
manifestation under oath duly signed by them shall be
b. After the issuance of the decree: Final decree of LS
filed with the court in the same proceeding for legal
to be set aside
separation.
2. The legal separation proceedings, if still pending, shall
2. As to the Property Regime:
thereby be terminated at whatever stage; and
GR: With respect to separation of properties, the same
3. The final decree of legal separation shall be set aside, but
shall subsist.
the separation of property and any forfeiture of the share
of the guilty spouse already effected shall subsist, unless
XPN: The parties, however, can come into an
the spouses agree to revive their former property regime.
agreement to revive their previous regime. Their
The court's order containing the foregoing shall be
agreement must be under oath and must contain a
recorded in the proper civil registries
list of the properties desired to be returned to the
community or conjugal property and those which
will remain separate, a list of creditors and their
addresses.
3. As to capacity to succeed: The Family Code does not

provide for the revival of revoked provisions in a will
originally made in favor of the offending party as a
result of the LS. This absence gives the innocent spouse
the right to choose whether the offending spouse will
be reinstituted.
4. As to the forfeited shares: Those given to the children

cannot be returned since the spouses are no longer the
owners of such. But those given to the innocent spouse
may be returned.
Note: In an action for legal separation on the ground of adultery

filed by the husband, even though the defendant wife did not
interpose the defense of prescription, nevertheless, the courts can
take cognizance thereof, because actions seeking a decree of legal
separation or annulment of marriage, involve public interest, and it
is the policy of our law that no such decree be issued if any legal
obstacles thereto appear upon the record. Also, the husband was
guilty of commission of the same offense by living with another
woman.

Q: How do Declaration of Nullity of Marriage, Annulment of Marriage and Legal Separation differ from each other?
A:
DECLARATION OF NULLITY OF MARRIAGE ANNULMENT LEGAL SEPARATION
Marriage bond
No effect, marriage bond
Dissolved Dissolved
remains valid
Status of children
GR: Illegitimate
XPN: Children conceived or born of marriages before Legitimate

declaration of nullity under Arts. 36 and 53 considered
legitimate
Property relations
ACP/CPG shall be dissolved & liquidated. [Art. 43 (2)]
GR: Governed either by Article 147 or Article 148 of the Family
Code. Thus, property regime shall be liquidated pursuant to the Share of spouse, who contracted the subsequent marriage in
ordinary rules on co-ownership. bad faith, in the net profits of the community property or
conjugal partnership, shall be forfeited in favor of the
XPN: Marriages declared void under Art. 40 which shall be common children, or
liquidated in accordance with Art. 43 (2). (Valdes v. RTC,
G.R. No. 122749. July 31, 1996). If there are none, the children of the guilty spouse by a
previous marriage, or
in default of children, the innocent spouse

Donations propter nuptias
GR: Shall remain valid. [Art. 43 (3)]
XPN:
1. if donee contracted the marriage in bad faith, such
donations made to said donee shall be revoked by
operation of law.
2. if both spouses to the marriage acted in bad faith, all
donations propter nuptias shall be revoked by operation
of law.
Insurance
If one spouse acted in bad faith, innocent spouse may revoke
his designation as beneficiary in the insurance policy even if
such designation be stipulated as irrevocable. [Art. 43 (4)]
Succession
If one spouse contracted the marriage in bad faith, he shall be
disqualified to inherit from innocent spouse by testate and
intestate succession. [Art. 43 (5)]
RIGHTS AND OBLIGATIONS BETWEEN HUSBAND AND WIFE b. Observe mutual love, respect, fidelity
c. Render mutual help and support
ESSENTIAL OBLIGATIONS 2. Fix the family domicile (Art. 69, FC)
Q: What are the rights and obligations of the spouses? Note: In case of disagreement the Court shall decide.
A: 3. Jointly support the family (Art. 70, FC)

1. Essential marital obligations (EMO): LOR a. Expenses shall be paid from the community
a. Live together property
b. In the absence thereof from the income or fruits
Note: Includes consortium and copulation of their separate properties

CIVIL LAW
c. In the absence or insufficiency thereof from their b. affecting property situated in a foreign
separate properties country whose laws require different
4. Manage the household (Art. 71, FC) formalities for its extrinsic validity
5. Not to neglect duties, or commit acts which tend to
bring danger, dishonor, or injury to family (Art. 72, FC) Q: What governs the property relations of spouses?
6. Either spouse may practice any legitimate
profession/business, even without the consent of the A: The property relations shall be governed by the ff. in the
other. (Art. 73, FC) stated order:
1. Marriage settlement
Note: Other spouse may object on valid, serious and moral 2. Provisions of the FC
grounds. In case of disagreement, the court shall decide 3. Local custom
whether:
a. Objection is proper; and
Q: Marriage being a contract, may the parties enter into
b. Benefit has accrued to the family before and after the
objection. stipulations which will govern their marriage?
Q: What are the other obligations of spouses? A: Yes, only as to their property relations during the
marriage subject only to the condition that whatever
A: settlement they may have must be within the limits
1. Exercise the duties and enjoy the rights of parents; provided by the Family Code. However, the nature,
2. Answer for civil liability arising from injuries caused by consequences, and effects of marriage cannot be subject to
children below 18; stipulation. (Rabuya, 2006, p. 398)
3. Exercise parental authority over children’s property
Note: Future spouses may agree upon the regime of absolute
(Republic v. CA, Molina, G.R. No. 108763, February 13,
community of property, conjugal partnership of gains, absolute
1997). separation of property or any other regime.
Q: May the performance of essential marital obligations Q: Are rights over share in the community or conjugal
be compelled by court? property waivable during the marriage?
A: GR: Performance of EMO under Art. 68 cannot be A: GR: No.

compelled by court because it will be a violation of personal
liberty. XPN: In case of judicial separation of property.
XPN: Giving support (Arroyo v. Arroyo, G.R. No. L-17014, Note: The waiver must be in a public instrument and recorded in
August 11, 1921) the office of the local civil registrar where the marriage contract
was recorded as well as in the proper registry of property.
Q: When may the Court exempt one spouse from living
with the other? MARRIAGE SETTLEMENTS
A: Q: What is a marriage settlement (MS)?

1. If one spouse should live abroad.
2. Other valid and compelling reasons. A: It is a contract entered into by spouses about to be
married for the purpose of fixing the terms and conditions
Note: The Court shall not grant the exemption if it is not of their property relations with regard to their present and
compatible with the solidarity of the family. future property.
Q: What law shall govern the property relations of It is also referred to as Ante Nuptial Agreement or
spouses? Matrimonial Contract. (Pineda, 2008 ed.)
A: GR: Philippine laws shall govern, regardless of place of Q: What are the requisites of a valid MS?
celebration and residence of spouses, in the absence of
contrary stipulation in a marriage settlement. (Art. 80, FC) A: I-SER
1. In writing;
XPN: Lex rei sitae applies: 2. Signed by the parties;
1. Where both spouses are aliens; 3. Executed before the celebration of marriage;
2. With respect to the extrinsic validity of contracts: 4.
rd
Registration (to bind 3 persons)
a. affecting property not situated in the
Philippines; and Note: The provisions in the marriage settlement must be in
b. executed in the country where the property accordance with law, morals or public policy, otherwise such
is located; agreement is void (Paras, book I, p. 516).
3. With respect to extrinsic validity of contracts:
a. entered into in the Philippines; but

Q: What are the additional requirements for the validity of Q: What is the effect of donations of property which is
the MS? subject to encumbrances?
A: A: Such donations are valid. In case of foreclosure of the

ADDITIONAL encumbrance and the property is sold for more less than
FACTUAL SITUATION
REQUIREMENT the total amount of the obligation secured, the donee shall
The ff. must be made a not be liable for the deficiency. If the property is sold for
If one of both of the parties
party to the MS, more than the total amount of the obligation, the done
are: shall be entitled to the excess. (Art. 85, FC)
otherwise the MS is void:
Parents; or
18-21 years old those required to give VOID DONATIONS BY THE SPOUSES
consent
Q: What is the rule regarding donations made between
Sentenced with civil Guardian appointed by the
spouses?
interdiction court
Guardian appointed by the A:
Disabled
court 1. Before the marriage:
Q: May a marriage settlement be modified? GR: Future spouses cannot donate to each other more
than 1/5 of their present property (Excess shall be
A: Yes. For any modification in the MS to be valid: considered void)
1. The requisites for a valid MS must be present;
2. There must be judicial approval; XPN: If they are governed by ACP, then each
3. Subject to the provisions of Arts. 66, 67, 128, 135, spouse can donate to each other in their marriage
and 136. settlements present property without limit,
provided there is sufficient property left for their
Q: What is the effect on the ante-nuptial agreement in support and the legitimes are not impaired.
case the marriage is not celebrated?
2. During the marriage:
A: GR: Everything stipulated in the settlements or contracts
in consideration of the marriage shall be rendered void. GR: Every donation or grant of gratuitous advantage,
direct or indirect, between spouses is considered void.
XPN: Those not dependent upon or is not made in
consideration of the marriage subsists. XPN: Moderate gifts on the occasion of any family
rejoicing.
DONATIONS BY REASON OF MARRIAGE
Note: The aforementioned rules also apply to common law
Q: When are donations considered as donations by reason spouses.
of marriage?
Q: Why are donations between spouses during marriage
A: Those donations which are made before the celebration considered void?
of the marriage, in consideration of the same, and in favor
of one or both of the future spouses. A:
1. To protect unsecured creditors from being defrauded;
Q: What are the requisites for donations propter nuptias 2. To prevent the stronger spouse from imposing upon
(DPN)? the weaker spouse transfer of the latter’s property to
the former;
A: 3. To prevent indirect modification of the marriage
1. Made before celebration of marriage; settlement.
2. Made in consideration of the marriage;
3. Made in favor of one or both of the future spouses. Q: What if the parties agree upon a regime other than
absolute community of property?
Q: What are the requisites if donation be made by one
spouse in favor of the other? A: They cannot donate to each other in their marriage
settlements more than 1/5 of their present property. Any
A: excess is considered void.
1. There must be marriage settlement (MS) stipulating a
property regime other than ACP; Note: Donations of future property are governed by provisions on
2. Donation in the MS be not more that 1/5 of the testamentary succession and formalities of wills.
present property;
3. There must be acceptance by the other spouse.

CIVIL LAW
Q: What are the donations that may be revoked by the
donor?
A: A donation by reason of marriage may be revoked by the

donor in the following cases:
1. Marriage is not celebrated or judicially declared void ab
initio
XPN: donations made in the marriage settlements
2. Marriage takes place without the required consent of

parents or guardians
3. Marriage is annulled and done acted in bad faith
4. Upon legal separation, the donee being the guilty
spouse
5. If with a resolutory condition which was complied with
6. Donee has committed an act of ingratitude
Q: What are the grounds for filing an action for revocation of a DPN and what are their respective prescriptive periods?
A:
PRESCRIPTIVE PERIOD
GROUNDS (Art. 86)
Period Reckoning Point
1. Marriage is not celebrated Time the marriage was not solemnized
5 yrs
XPN: Those automatically rendered void by law on the fixed date. (art. 1149)
Ground for nullity:
a. Contracted subsequent marriage
Revoked by operation of law
2. Marriage is judicially before prior marriage has been
declared void judicially declared void
Finality of judicial declaration of nullity
b. any other grounds 5 yrs
(if action is to recover property)
Time the donor came to know that the
3. Marriage took place without consent of parents or guardian, when
5 yrs required parental consent was not
required by law
obtained.
4. Marriage is annulled and donee acted in bad faith 5 yrs Finality of decree
5. Upon legal separation (LS), donee being the guilty spouse 5 yrs Time decree of LS has become final
6. Donation subject to resolutory condition which was complied with 5 yrs Happening of the resolutory condition.
From donor’s knowledge of the
7. Donee committed an act of ingratitude 1 yr
commission of an act of ingratitude.
Note: Acts of ingratitude:

1. Commission of an offense against the person, honor or property of the donor, his wife or his children under his parental authority
2. GR: Imputation to the donor any criminal offense or any act involving moral turpitude
XPN: if the crime was committed against the donee himself, his wife or his children under his authority
3. Undue refusal to support the donor when he is legally or morally bound to give such support.
PROPERTY RELATIONS OF THE SPOUSES
Q: What are the different property regimes which may be adopted by future spouses?
A:
1. Absolute Community of Property (ACP)
2. Conjugal Partnership of Gains (CPG)
3. Absolute Separation of Property (ASOP)
4. Any other regime within limits provided by the FC

Q: Distinguish ACP, CPG and ASOP.
A:
ACP CPG ASOP
When it applies
1. When future spouses adopt it in a

marriage settlement
2. ACP or CPG is dissolved
When spouses:
3. Prior marriage is dissolved due to
1. Adopt it in a marriage settlement;
death of one spouse and surviving
2. Do not choose any economic When the future spouses adopt it in a
spouse failed to comply with the
system; or marriage settlement.
requirements under Art. 103
3. Adopted a different property
(judicial settlement proceeding of
regime and the same is void.
the estate of deceased spouse)
4. By judicial order. Judicial separation
of property may either be voluntary
or for sufficient cause.
Consist of
Each spouse retains his/her property
All the properties owned by the spouses before the marriage and only the fruits
at the time of marriage become and income of such properties become
community property part of the conjugal properties during the
marriage
Effect of separation in fact
The separation in fact shall not affect the regime of ACP, but:
1. The spouse who leaves the conjugal home or refuses to live therein, without
just cause, shall not have the right to be supported;
2. When consent of one spouse to any transaction of the other is required by law,
judicial authorization shall be obtained in a summary proceeding.
3. In case of insufficiency of community or conjugal partnership property, separate
property of both spouses shall be solidarily liable for the support of the family.
Spouse present shall, upon proper petition in a summary proceeding, be given
judicial authority to administer or encumber any specific separate property of
the other spouse and use the fruits or proceeds thereof to satisfy the latter’s
share. (Arts. 100 & 127, FC)
Effect of dissolution
Upon dissolution and liquidation of the Upon dissolution of the partnership, the
community property, what is divided separate property of the spouses are
equally between the spouses or their returned and only the net profits of the
heirs is the net remainder of the partnership are divided equally between
properties of the ACP. the spouses of their heirs.

CIVIL LAW
Q: When do the property regimes commence? ABSOLUTE COMMUNITYY
A: Property regimes commence at the precise moment of GENERAL PROVISIONS

the celebration of the marriage.
Q: When shall the absolute community of property
Q: In the absence of a marriage settlement, what property commence?
regime governs the property relations of spouses?
A: At the precise moment of the celebration of the
A: GR: Absolute community of property (Art. 75, FC) marriage. i.e. actual time the marriage is celebrated on a
certain date.
XPNs:
1. For marriages contracted prior to the effectivity Note: Any stipulation, express or implied, for the commencement
of the Family Code on August 3, 1988, conjugal of the community regime at any other time shall be void.
partnership of gains shall govern the property
relations. This is so because Art. 119 of the NCC Q: What law governs the absolute community of
will apply. The provisions of the FC shall have no property?
retroactive effect because it shall impair vested
rights. A:
1. Family code
2. Subsequent marriage contracted within one year 2. Provisions on co-ownership
from the death of the deceased spouse without
liquidation of the community property or conjugal Q: What constitutes the community property?
partnership of gains, either judicially or
extrajudicially, as required under Arts. 103 and A:
130 of the FC. In such case, a mandatory regime Includes:
of complete separation of property shall govern 1. All the property owned by the spouses:
the subsequent marriage. (Rabuya, Civil Law a. at the time of the celebration of the marriage; or
Reviewer, p. 100). b. acquired thereafter;
2. Property acquired during the marriage by gratuitous
Q: What are the grounds for the revival of a former title, if expressly made to form part of the community
property regime? property by the donor, testator or grantor;
3. Jewelries, etc.;
A: 1-CAR-APS 4. Winnings in gambling.
1. Civil interdiction of the prisoner-spouse
terminates; Excludes:
2. Absentee spouse reappears 1. Property acquired during the marriage by gratuitous
3. Court authorizes Resumption of administration by title and its fruits as well as income thereof;
the spouse formerly exercising such power;
4. Spouse who has Abandoned the conjugal home XPN: If expressly provided by the donor, testator or
returns and resumes common life with the other; grantor that they shall form part of the community
5. Parental authority is judicially restored to the property
spouse previously deprived thereof;
6. Reconciliation and resumption of common life of 2. Property for personal and exclusive use of either
spouse who had been separated in fact for at spouse;
least 1 year;
7. Spouses agree to revive their former property XPN: Jewelries shall form part of the ACP because of
regime. their monetary value.
Q: What are the grounds for transfer of administration of 3. Property acquired before the marriage by one with
the exclusive property of each spouse? legitimate descendants by former marriage and its
fruits and income, if any;
A: When one spouse: CFAG 4. Those excluded by the marriage settlement.
1. is sentenced to penalty with Civil interdiction;
2. becomes a Fugitive from justice or is hiding as an Q: In absence of evidence, does property acquired during
accused in a criminal case; the marriage belong to the community property?
3. is judicially declared Absent;
4. becomes a Guardian of the other. A: Property acquired during the marriage is presumed to
belong to the community, unless proven otherwise by
Note: Transfer of administration of the exclusive property of either strong and convincing evidence. (Art. 93, FC)
spouses does not confer ownership over the same (Rodriguez v. De
la Cruz, GR No. 3629, September 28, 1907). Q: Mister, without Misis’ consent, executed a special
power of attorney in favor of Drepa in order to secure a
loan to be secured by a conjugal property, which loan was

later obtained. When the loan was not paid, the mortgage 125283, February 10, 2006).
was foreclosed and sold on auction. Misis seeks the
declaration of the mortgage and sale as void invoking Art. Q: Will losses in gambling be charged upon the community
124 of the FC. Will the wife’s action prosper? property?
A: Yes. The settled rule is that the sale or encumbrance of a A: No (Art. 95). However, any winnings therefrom shall
conjugal property requires the consent of both the husband form part of the community property.
and the wife (Guiang v. CA, 353 Phil. 578). The absence of
the consent of one renders the entire sale or encumbrance CHARGES UPON AND OBLIGATIONS OF THE COMMUNITY
null and void, including the portion of the conjugal property PROPERTY
pertaining to the husband who contracted the sale. Neither
would the conjugal partnership be liable for the loan on the Q: What are the charges upon the ACP?
ground that it redounded to the benefit of the family. The
sweeping conclusion that the loan was obtained by the A:
husband in order to finance the construction of housing 1. The support of
units, without however adducing adequate proof, does not a. the spouses
persuade (Homeowners Savings & Loan Bank v. Dailo, G.R. b. their common children
No. 153802, March 11, 2005). c. legitimate children of either spouse;
2. All debts and obligations contracted during the
Q: In a sale of a piece of land that she and her husband, marriage by:
David, owned, Lorenza, who witnessed the sale, signed on a. the designated administrator-spouse for the
the page reserved for witnesses to the deed. When the benefit of the community
buyer sought to register the sale, it was denied by the b. by both spouses
Register of Deeds for lack of the wife's consent to the sale. c. by one spouse with the consent of the other;
Decide. 3. Debts and obligations contracted by either spouse
without the consent of the other to the extent that the
A: The register of deeds is incorrect. A wife, by affixing her family may have been benefited;
signature to a deed of sale on the space provided for 4. All taxes, liens, charges and expenses, including major
witnesses, is deemed to have given her implied consent to or minor repairs, upon the community property;
the contract of sale. The consent need not always be 5. All taxes and expenses for mere preservation made
explicit or set forth in any particular document so long as it during marriage upon the separate property of either
is shown by acts of the wife that such consent or approval spouse used by the family;
was in fact given (Pelayo v. Perez, G.R. No. 141323, June 8, 6. Expenses to enable either spouse to commence or
2005). complete a professional or vocational course, or other
activity for self-improvement;
Note: In this case, it will be noted that the sale was entered into 7. Ante-nuptial debts of either spouse insofar as they
prior to the effectivity of the FC. Because of such, Art. 173, in have redounded to the benefit of the family;
relation to Art. 166 of the NCC would have applied if there was a 8. The value of what is donated or promised by both
finding of lack of the wife's consent. Under said provisions, the sale spouses in favor of their common legitimate children
would have been merely voidable, and not void.
for the exclusive purpose of commencing or
completing a professional or vocational course or
Q: Andres sold a parcel of land belonging to the conjugal
other activity for self-improvement;
partnership to Pepito. Days before the sale, Kumander, his
9. Payment, in case of absence or insufficiency of the
wife, assented to such by signing a document entitled
exclusive property of the debtor-spouse, of:
"Marital Consent" contained in a jurat, which was then
a. Ante-nuptial debts of either spouse which did not
sworn to before the same notary public who notarized the
redound to the benefit of the family;
deed of sale, and then appended to the deed of sale itself.
b. the support of illegitimate children of either
Is the conveyance valid?
spouse;
c. liabilities incurred by either spouse by reason of a
A: It depends. The use of the jurat, instead of an
crime or quasi-delict;
acknowledgment, does not elevate the marital consent into
the level of a public document but instead consigns it to the Note: The payment of which shall be considered as advances
status of a private writing. Hence, the presumption of to be deducted from the share of the debtor-spouse upon
regularity does not apply and the wife still needs to prove liquidation of the community
its genuineness and authenticity as required under the
rules of evidence (Pan Pacific Industrial Sales Co., Inc. v. CA, 10. Expenses of litigation between the spouses.
G.R. No. 125283, February 10, 2006)
XPN: If suit is found to be groundless, it cannot be
Note: The fact that the document contains a jurat, and not an charged against the ACP.
acknowledgment, should not affect its genuineness or that of the
related document of conveyance itself, the Deed of Absolute Sale.
Q: An individual, while single, purchases a house and lot in
In this instance, a jurat suffices as the document only embodies the
manifestation of the spouse's consent, a mere appendage to the 1990 and borrows money in 1992 to repair it. In 1995,
main document (Pan Pacific Industrial Sales Co., Inc. v. CA, G.R. No. such individual is married while the debt is still being paid.

CIVIL LAW
After the marriage, is the debt still the responsibility of person which may be perfected as a binding contract upon
such individual? (2007 Bar Question) acceptance by the spouse or court approval.
A: No. Ante-nuptial debts of either spouse shall be Q: When may one spouse resort to obtaining court
considered as the liability of the absolute community of approval for any alienation, encumbrance or disposition of
property insofar as they have redounded to the benefit of community property?
the family.
A: In absence of the written consent of the other spouse.
OWNERSHIP, ADMINISTRATION, ENJOYMENT AND
DISPOSITION OF THE COMMUNITY PROPERTY Q: What if the community property is insufficient to cover
the foregoing liabilities?
Q: To whom does the right of administration of the
community property belong to? A: GR: The spouses shall be solidarily liable for the unpaid
balance with their separate properties.
A: GR: It belongs to both spouses jointly.
XPN: Those falling under paragraph 9 of Art. 94.
XPN: If one spouse is incapacitated or otherwise (Ante-nuptial debts, support of illegitimate children,
unable to participate in the administration of the liabilities incurred by spouse by reason of a crime or
common properties – capacitated or able spouse quasi-delict) –in which case the exclusive property
may assume sole powers of administration of the spouse who incurred such debts will be liable.
However, if the exclusive property is insufficient,
But such powers do not include: DAE payment will be considered as advances to be
1. Disposition; deducted from share of debtor-spouse. (Art. 94 (9),
2. Alienation; or FC)
3. Encumbrance
of the conjugal or community property. Q: What is the rule on donating a community property by
a spouse?
Q: In case of disagreement, whose decision shall prevail?
A: GR: A spouse cannot donate any community property
A: That of the husband but subject to recourse to the court without the consent of the other.
by the wife for proper remedy.
XPN: Moderate donations for charity or on occasion
Note: Prescriptive period for recourse is within 5 years from the of family rejoicing or distress. (Art. 98, FC)
date of the contract implementing such decision.
Q: Will the separation in fact between husband and wife
Q: In cases of alienation, disposition or encumbrance of affect the regime of absolute community?
the community property, and one spouse is incapacitated
or unable to participate in the administration of the A: GR: No.
community property, is the approval of one spouse
enough for said alienation, disposition or encumbrance to XPNs:
be valid? 1. Spouse who leaves the conjugal home or refuses
to live therein without just cause has no right
A: No. Both spouses must approve any dispositions or to be supported
encumbrances, and consent of the other spouse regarding 2. When consent of one spouse to any transaction
the disposition must be in writing, otherwise, the matter of the other is required by law, judicial
should be brought to court and the court will give the authorization must be obtained
authority, if proper. 3. If community property is insufficient, the separate
property of both spouses shall be solidarily
Such consent or court approval must be obtained before liable for the support of the family
the alienation, etc., otherwise, such will be void and
obtaining such consent or court approval afterwards will Q: If a spouse abandons without just cause his family or
not validate the act. A void act cannot be ratified. fails to comply with obligations to the family, what are the
remedies of the spouse present?
Q: What if one spouse acts without the consent of the
other or without court approval? A: Petition the court for:
1. Receivership;
A: If one spouse acts without the consent of the other or 2. Judicial separation of property;
without court approval, such disposition or encumbrance is 3. Authority to be the sole administrator of the absolute
void. community.
However, the transaction shall be construed as a continuing

rd
offer on the part of the consenting spouse and the 3

Q: When is there abandonment? 6. Adjudication of conjugal dwelling and custody of
common children. (Art. 102, FC)
A: When a spouse leaves the conjugal dwelling without
intention of returning. Q: What is the applicable procedure in the dissolution of
the ACP in case the marriage is terminated by death?
Note: Three months disappearance without any information as to
the spouse’s whereabouts shall be prima facie presumption of A: Community property shall be liquidated in the same
abandonment of the other spouse. (Art. 101, FC) proceeding for the settlement of the estate of the
deceased.
Q: May spouses sell property to each other?
If no judicial proceeding is instituted, the surviving spouse
A: GR: No, such sale is considered void shall, judicially or extra-judicially, liquidate the community
property within 1 year from the death of the deceased
XPNs: spouse. (Art. 103, FC)
1. When a separation of property was agreed upon
in the marriage settlement; Q: What if the surviving spouse failed to liquidate the
2. When there has been a judicial separation of community property within 1 year from the death of the
property under Articles 135 and 136 of FC (Art. deceased spouse contrary to Art. 103, FC?
1490, NCC).
A: Failure to do so would render any disposition or
Note: The proscription against the sale of property between
encumbrance involving community property of the
spouses under Art. 1490 applies even to common law
relationships. In an earlier ruling, the SC nullified a sale made by a terminated marriage void.
husband in favor of a concubine, after he had abandoned his family
and left the conjugal home where his wife and children lived, and CONJUGAL PARTNERSHIP OF GAINS
from whence they derived their support, for being contrary to
morals and public policy. The sale was regarded by the court as GENERAL PROVISIONS
subversive of the stability of the family, a basic social institution
which public policy cherishes and protects (Ching v. CA, GR No. Q: What is the regime of CPG?
165879, November 10, 2006).
A: It is the property relation formed by the husband and the
DISSOLUTION OF COMMUNITY REGIME
wife by placing in a common fund:
1. the proceeds, product, fruits and income of their
Q: How is the ACP terminated?
separate properties;
2. those acquired by either or both of them through:
A:
a. effort
1. Death of either spouse;
b. chance
2. Legal separation;
3. Annulment;
Q: When shall the conjugal partnership commence?
4. Judicial separation of property during marriage (Art.
A: At the precise moment when the marriage ceremony is
99, FC)
celebrated.
LIQUIDATION OF THE ABSOLUTE COMMUNITY ASSETS
Q: What law governs the conjugal partnership?
AND LIABILITIES
A: The rules on the contract of partnership in all that is not
Q: What is the applicable procedure in case of dissolution
in conflict with what is expressly determined in the FC and
of ACP?
by the spouses in their marriage settlements (Art. 108, FC).
A:
EXCLUSIVE PROPERTY OF EACH SPOUSE
1. Inventory of all properties of the ACP, excluding
separate property of each spouse; Q: What are the exclusive properties of the spouses?
2. Payment of community debts;
A:
Note: First, pay out of the community assets. If not enough, 1. Those brought into the marriage as his/her own;
husband and the wife are solidarily liable for the unpaid
balance with their separate properties. Note: A property purchased before the marriage and fully
paid during the marriage remains to be a separate property
3. Delivery to each spouse of his/her remaining exclusive of either spouse (Lorenzo v. Nicolas, L-4085, July 30, 1952).
properties;
4. Equal division of net community assets 2. Those acquired during the marriage by gratuitous title;
Unless there is: 3. Those acquired by right of redemption, barter or
a. An agreement for a different proportion; or exchange with exclusive property;
b. A voluntary waiver of such share; 4. That purchased with exclusive money of either spouse.
5. Delivery of the presumptive legitimes of the children;

CIVIL LAW
Note: The controlling factor is the source of the money used, Q: Yamane asserts that the parcel of land, which was
or the money promised to be paid (Rivera v. Bartolome, C.A., purchased at auction, belonged to the conjugal
40 O.G. 2090). partnership of him and his late wife. In the title, his name
appeared to be merely descriptive of the civil status of the
Q: What are the rules in cases of improvement of registered owner, his late wife. The purchase took place
exclusive property? prior to the advent of the Family Code. Is the property
conjugal or paraphernal property of his late wife?
A:
1. Reverse accession – If the cost of the improvement and A: Conjugal. In this case, the provisions of the NCC would
the additional value is more than the value of the apply since the purchase took place before the FC took
principal property at the time of the improvement, the effect. Under Art. 160 of the NCC, all property of the
entire property becomes conjugal. marriage is presumed to belong to the conjugal
2. Accession – If the cost of the improvement and the partnership, unless it be proved that it pertains exclusively
additional value is equal to or less than the value of to the husband or the wife. In this case, there was no proof
the principal property, the entire property becomes that the property had been acquired exclusively by
the exclusive property of the spouses Yamane's late wife. The mere registration of a property in
the name of one spouse does not destroy its conjugal
Note: In either case, there shall be reimbursement upon the nature in the absence of strong, clear and convincing
liquidation of the conjugal partnership and ownership of
evidence that it was acquired using the exclusive funds of
entire property shall be vested only upon reimbursement.
said spouse (Spouses Go v. Yamane, G.R. No. 160762, May
3, 2006).
Q: What is the presumption with regard to property
acquired during marriage?
Q: Dolores seeks to recover a parcel of land, alleging that
she and her husband acquired such during their marriage,
A: GR: All property acquired during the marriage, whether
that it formed part of their conjugal properties and that he
the acquisition appears to have been made, contracted or
sold it without her consent. She presents as evidence their
registered in the name of one or both spouses, is presumed
marriage contract and the initial tax declaration over the
to be conjugal.
property.
XPN: Unless the contrary is proved.
A: Recovery is not warranted. The rule is all property of the
marriage is presumed to be conjugal in nature. However,
CONJUGAL PARTNERSHIP PROPERTY
for this presumption to apply, the party who invokes it must
first prove that it was acquired during the marriage. Here,
Q: What constitutes CPG?
Dolores' evidence consisted of her marriage contract and
the initial tax declaration over the property. She did not
A:
identify when she and her husband first occupied and
1. Those acquired by onerous title during the marriage
possessed the land. Neither did she present any witness to
with conjugal funds;
prove that they first occupied the property during their
2. Those obtained from labor, industry, work or
marriage and that they both, worked on the land (Pintiano-
profession of either or both spouses;
Anno v. Anno, G.R. No. 163743, January 27, 2006).
3. Fruits of conjugal property due or received during the
marriage and net fruits of separate property;
Q: H & W got married on October 1926. H subsequently
4. Share of either spouse in hidden treasure;
cohabited with X. During the cohabitation of H with X, H
5. Those acquired through occupation such as hunting or
acquired certain properties and places his status as single.
fishing;
What is the nature of said properties?
6. Livestock in excess of what was brought to the
marriage;
A: They are conjugal properties. Whether a property is
7. Those acquired by chance such as winnings in
conjugal or not is determined by law and not by the will of
gamblings and bettings. (Art. 117, FC)
one of the spouses. No unilateral declaration by one spouse
can change the character of conjugal property. The clear
Q: What are the rules if a property is bought on
intent of H in placing his status as single is to exclude W
installments paid partly from the exclusive funds of the
from her lawful share in the conjugal property. The law
spouses and partly from conjugal funds?
does not allow this. The cohabitation of a spouse with
another person, even for a long period, does not sever the
A:
tie of a subsisting previous marriage. H and X’s cohabitation
1. If full ownership was vested before the marriage – it
cannot work to the detriment of W as the legal spouse. The
shall belong to the buyer spouse.
marriage of H and W continued to exist regardless of the
2. If full ownership was vested during the marriage – it
fact that H was already living with X. Hence, all property
shall belong to the conjugal partnership.
acquired from the date of their marriage until the death of
Note: In either case, any amount advanced by the partnership or
W are presumed conjugal. It was neither claimed nor
by either or both spouses shall be reimbursed by the owner/s upon proved that any of the subject properties was acquired
liquidation of the partnership. outside or beyond this period. (Villanueva v. CA, G.R. No.
143286, April 14, 2004)
CHARGES UPON AND OBLIGATIONS OF THE CPG DISSOLUTION OF CPG REGIME
Q: What are the charges upon the CPG? Q: How is the conjugal partnership terminated?
A: D2-T2-E2-VAS A:
1. Support of the spouses, their common children and 1. Death of either spouse;
the legitimate children of either spouse; 2. Legal separation;
2. Debts and obligations contracted by one without the 3. Annulment;
consent of the other to the extent that the family 4. Judicial separation of property during marriage. (Art.
benefited; 126, FC)
3. Debts and obligations contracted during the marriage
by an administrator-spouse, both spouses or one with LIQUIDATION OF THE CONJUGAL PARTNERSHIP ASSETS
the consent of the other; AND LIABILITIES
4. Taxes, liens, charges, expenses upon conjugal
Q: What are the steps in the liquidation of the CPG?
property;
5. Taxes and expenses for mere preservation of separate
A: R2-D4-IPA
property;
1. Inventory of all the properties;
6. Expenses for professional, vocational or self-
2. Restitution of advances made to each of the spouses;
improvement courses of either spouse;
3. Reimbursement for use of exclusive funds;
7. Ante-nuptial debts to the extent the family has been
4. Debts and obligations of the CP are paid;
benefited;
5. Delivery of exclusive properties;
8. Value of what is donated or promised to common
6. Payment of losses and deterioration of movables
legitimate children for professional, vocation or self-
belonging to each of the spouses;
improvement courses;
7. Division of the net conjugal partnership;
9. Expenses of litigation. (Art. 121, FC)
8. Delivery of the children’s presumptive legitimes;
Note: If the conjugal partnership is insufficient to cover the 9. Adjudication of conjugal dwelling and custody of
foregoing liabilities, spouses shall be solidarily liable for the unpaid children. (Art. 129, FC)
balance with their separate properties.
Q: Upon termination of the marriage by death, how shall
Q: Levy was made on the conjugal partnership of husband the community property be liquidated?
and wife on the basis of liability of the husband as
guarantor. Is the levy proper? A: The community property shall be liquidated in the same
proceeding for the settlement of the estate of the deceased
A: No. The payment of personal debts contracted by the spouse.
husband or the wife before or during the marriage shall not
be charged to the conjugal partnership except as they Q: From where shall the support to be given to the
redounded to the benefit of the family. (Art. 122, FC) surviving spouse and to the children be charged against
during the liquidation?
ADMINISTRATION OF THE CPG
A: The support shall come from the common mass of
Q: To whom does the right to administer the conjugal property and shall be particularly charged against the fruits,
partnership belong? rents or income pertaining to their shares to the inventories
property. But where the support given exceeds the fruits,
A: GR: It belongs to both spouses jointly. rents or income pertaining to their shares, the excess shall
be deducted from their respective shares as these are
XPN: If one spouse is incapacitated or otherwise deemed advances from the inventoried property. (Art. 133,
unable to participate in the administration of the FC)
common properties – capacitated or able spouse may
assume sole powers of administration. Q: In the absence of a judicial settlement proceeding, how
shall the community property be liquidated?
But such powers do not include: DAE
1. Disposition; A: The surviving spouse shall liquidate the community
2. Alienation; or property either, judicially or extrajudicially within 1 year
3. Encumbrance of the conjugal or community property. from the death of the deceased spouse.
Q: In case of disagreement, whose decision shall prevail? Q: What if the conjugal partnership assets are less than
the conjugal partnership liabilities at the time of
A: That of the husband but subject to recourse to the court liquidation of the CP?
by the wife for proper remedy.
A: The surviving spouse and the children shall not be
Note: Prescriptive period for recourse is 5 years from the date of entitled to support.
the contract implementing such decision.

CIVIL LAW
Q: What are the effects if the community property is not 4. Rights previously acquired by creditors are not
liquidated? prejudiced.
A: Q: How and in what instances can the property regime

1. Any disposition or encumbrance made by the surviving that existed between the spouses before the separation of
spouse involving community property of the property be revived?
terminated marriage shall be void.
2. Should the surviving spouse contract a subsequent A: Spouses may, in the same proceedings where separation
marriage a mandatory regime of complete separation of property was decreed, file a motion existed between
of property shall govern the property relations of the them before the separation of property in any of the
subsequent marriage following instances:
a. When the civil interdiction terminates
SEPARATION OF PROPERTY OF THE SPOUSES AND b. When absentee spouse reappears
ADMINISTRATION OF COMMON PROPERTY BY ONE c. When the court, being satisfied
SPOUSE DURING THE MARRIAGE
REGIME OF SEPARATION OF PROPERTY
Q: When shall the system of complete separation of
property govern the property relations between the Q: What governs the regime of separation of property?
spouses?
A:
A: Only in the following cases: 1. Marriage settlement
1. When it is expressly provided for in the marriage 2. Family Code in suppletory character. (Art. 149, FC)
settlement
2. When it is so decreed by a competent court Q: What are the kinds of separation of property?
3. Mandatory regime of complete separation of property
A:
Q: In what ways can there be judicial separation of 1. As to extent:
property? a. Total
b. Partial – In this case, the property not agreed
A: Judicial separation of property may either be: upon as separate shall pertain to the absolute
1. voluntary community.
2. for sufficient cause 2. As to kinds of property:
a. Present property
Q: What are the sufficient causes for judicial separation of b. Future property
property? c. Both present and future property
A: CJ-LASA Q: What are the rights of the spouses under the regime of
1. Civil interdiction of the spouse of petitioner; separation of property?
2. Judicial declaration of absence;
3. Loss of parental authority as decreed by the court; A:
4. Abandonment or failure to comply with family 1. Each spouse shall own, dispose of, administer, possess,
obligation; and enjoy his or her own separate property, without
5. Administrator spouse has abused authority; need of the consent of the other.
6. Separation in fact for one year and reconciliation is 2. Each spouse shall own all earnings from his or her
highly improbable. (Art. 135, FC) profession, business or industry and all fruits, natural,
industrial or civil, due or received during the marriage
Note: In cases provided in 1, 2 and 3, the presentation of the final from his or her separate property.
judgment against the guilty or absent spouse shall be enough basis
for the grant of the decree of judicial separation of property. Q: What are the liabilities for family expenses of the
spouses under the regime of separation of property?
Q: What are the effects of judicial separation of property
between spouses? A: GR: Both spouses shall bear the family expenses in
proportion to their income.
A:
1. The absolute community or conjugal partnership is XPN: In case of insufficiency or default thereof, to the
dissolved; current market value of their separate properties.
2. The liability of the spouses to creditors shall be
solidary with their separate properties;
3. Mutual obligation to support each other continues;
XPN: When there is legal separation

PROPERTY REGIME OF UNIONS WITHOUT MARRIAGE
Q: What is the property regime of unions without marriage?
A:
ART. 147 ART. 148
Applicability
Presence of legal impediment:
1. No legal impediment to marry; 1. Adulterous relationships
2. Void marriage on the ground of psychological 2. Bigamous/polygamous marriages
incapacity. 3. Incestuous void marriages under Art. 37
4. Void marriages by reason of public policy (Art. 38)
Salaries & wages
Separately owned by the parties. If any is married, his/her
Owned in equal shares
salary pertains to the CPG of the legitimate marriage.
Property exclusively acquired
Belongs to party
Belongs to such party
upon proof of acquisition through exclusive funds
Property acquired by both through their work or industry
Owned in common in proportion to their respective
Governed by rules of co-ownership
contributions
Presumption
Property acquired while living together presumed obtained
No presumption of joint acquisition.
by their joint efforts, work or industry and owned by them
in equal shares.
Actual joint contribution of money, property or industry shall
be owned by them in common proportion.
If one party did not participate in acquisition:
presumed to have contributed through care and
However, their contributions are presumed equal, in the
maintenance of family and household (Buenaventura v.
absence if proof to the contrary
Buenaventura, G.R. No. 127358, March 31, 2005)
Forfeiture
If one of the parties is validly married to another, his/her
When only one is in GF, share of party in BF in the co-
share in the co-ownership shall accrue to the ACP or CPG
ownership be forfeited in favor of:
existing in the marriage.
1. their common children
2. innocent party
If the party who acted in BF is not validly married to another
in default of / waiver by any/all common children, or by
or if both parties are in BF, such share be forfeited in manner
their descendants
provided in the last par. of Art. 147
Proof of actual contribution
Not necessary Necessary
Note: For as long as it is proven that property was acquired during marriage, the presumption of conjugality will attach regardless in whose name
the property is registered.
The presumption is not rebutted by the mere fact that the certificate of title of the property or the tax declaration is in the name of one of the
spouses (Villanueva v. CA, G.R. No. 143286, Apr. 14, 2004).

CIVIL LAW
Q: What property relation governs in case marriage is maintenance of the family and of the household.
declared null and void on the ground of psychological
incapacity? Note: In this case, Francisco himself testified that his wife was not
a plain housewife but one who helped him in managing the family's
A: The property relation between the parties is governed business. Hence, Erminda is rightfully entitled to a joint share in
their properties (Gonzales v. Gonzales, G.R. No. 159521,
by Art. 147 of the FC. Under this property regime, property
December16, 2005).
acquired by both spouses through their work and industry
shall be governed by the rules on equal co-ownership. Any
Q: Romeo and Juliet lived together as husband and wife
property acquired during the union is prima facie presumed
without the benefit of marriage. During their
to have been obtained through their joint efforts. A party
cohabitation, they acquired a house. When they broke up,
who did not participate in the acquisition of the property
they executed an agreement where he agreed to leave the
shall still be considered as having contributed thereto
house provided Juliet will pay his entire share in their
jointly if said party's "efforts consisted in the care and
properties. She failed to do so but she also ignored his
maintenance of the family household." Unlike the conjugal
demand for her to vacate. Romeo sued her for ejectment
partnership of gains, the fruits of the couple's separate
which the court granted. Was the court correct in granting
property are not included in the co-ownership.
the same?
Q: Josefina’s petition for nullity of her marriage to
A: No. Under Art. 147 of the FC, the property is co-owned
Eduardo was granted on the ground of existence of a prior
by the parties. Under said provision, in the absence of
marriage. She now asserts that since her marriage to
proof to the contrary, any property acquired by common-
Eduardo is void, their property relation is to be governed
law spouses during their cohabitation is presumed to have
by the rules on co-ownership under Art. 148 of the FC and
been obtained thru their joint efforts and is owned by them
not by Art.144 of the Civil Code. In this regime, Eduardo
in equal shares. Their property relationship in such a case is
has no share at all in the properties since no proof was
essentially governed by the rules on co-ownership. Thus,
adduced by him as regards his participation in their
Romeo cannot seek the ejectment of Juliet therefrom. As a
purchase. However, she did not prove that she acquired
co-owner, she is as much entitled to enjoy its possession
the properties using her personal funds and prior to her
and ownership as him (Abing v. CA,G.R. No. 146294, Jul. 31,
cohabitation with Eduardo. Is her contention correct?
2006).
A: No. Art. 148 of the FC does not apply since, in said
Q: Luis and Rizza, both 26 years of age and single, live
article, a co-ownership may ensue in case of cohabitation
exclusively with each other as husband and wife without
where, for instance, one party has a pre-existing valid
the benefit of marriage, Luis is gainfully employed, Rizza is
marriage, provided that the parties prove their actual joint
not employed, stays at home, and takes charge of the
contribution of money, property or industry and only to the
household chores.
extent of their proportionate interest thereon. Petitioner
failed to adduce preponderance of evidence that she
After living together for a little over twenty years, Luis was
contributed money, property or industry in the acquisition
able to save from his salary earnings during that period
of the subject property and, hence, is not a co-owner of the
the amount of P200,000.00 presently deposited in a bank.
property. Since the subject property was acquired during
A house and lot worth P500,000.00 was recently
the subsistence of the first marriage of Eduardo, under
purchased for the same amount by the couple. Of the
normal circumstances, the same should be presumed to be
P500.000.00 used by the common-law spouses to
conjugal property of Eduardo and Josefina (Francisco v.
purchase the property, P200.000.00 had come from the
Master Iron Works Construction Corp., G.R. No. 151967.
sale of palay harvested from the hacienda owned by Luis
February 16, 2005).
and P300,000.00 from the rentals of a building belonging
to Rizza. In fine, the sum of P500.000.00 had been part of
Q: Francisco and Erminda’s marriage was nullified by the
the fruits received during the period of cohabitation from
trial court due to psychological incapacity. He did not
their separate property, a car worth P100.000.00 being
contest the decree of nullity but he assailed the division in
used by the common-law spouses, was donated just
the properties which was contained in the decree. He
months ago to Rizza by her parents.
asserted that the properties were acquired through his
efforts and that she had no contribution whatsoever in
Luis and Rizza now decide to terminate their cohabitation,
their acquisition and maintenance; hence, she should not
and they ask you to give them your legal advice on how,
be entitled to a joint share in their properties. Is
under the law should the bank deposit of P200,000.00 the
Francisco’s contention correct?
house and lot valued at P500.000.00 and the car worth
P100.000.00 be allocated to them (1997 Bar Question)?
A: No. The property relation between the parties is
governed by Art. 147 of the FC. Under this article, there is a
A: Art. 147 of the FC provides in part that when a man and
presumption that the properties which they acquired
a woman who are capacitated to marry each other, live
during their cohabitation were acquired through their joint
exclusively with each other as husband and wife without
efforts, work or industry. It further provides that a party
the benefit of marriage or under a void marriage, their
who did not participate in the acquisition thereof shall be
wages and salaries shall be owned by them in equal shares
deemed to have contributed jointly in the acquisition
and the property acquired by both of them through their
thereof if his or her efforts consisted in the care and
work or industry shall be governed by the rules of co- Addendum: However, after Rico's marriage to Letty,
ownership. In the absence of proof to the contrary, the coconut land of Rico will then become absolute
properties acquired while they lived together shall be community property of Rico and Letty.)
presumed to have been obtained by their joint efforts,
worker industry, and shall be owned by them in equal 3. Rico and Letty are the co-owners. The relations is the
shares. A party who did not participate in the acquisition by Absolute Community of Property (Arts, 75, 90 and 91,
the other party of any property shall be deemed to have Family Code).
contributed jointly in the acquisition thereof if the former's
efforts consisted in the care and maintenance of the family THE FAMILY
and of the household. Thus:
1. The wages and salaries of Luis in the amount of P200, THE FAMILY AS AN INSTITUTION
000.00 shall be divided equally between Luis and Rizza.
2. The house and lot valued at P500.000.00 having been Q: What is included in family relations?
acquired by both of them through work or industry
shall be divided between them in proportion to their A:
respective contribution, in consonance with the rules 1. Between husband and wife
on co-ownership. Hence, Luis gets 2\5 while Rizza gets 2. Between parents and children
3\5 of P500.000.00. 3. Among other ascendants and descendants
3. The car worth P100, 000.00 shall be exclusively owned 4. Among brothers and sisters, whether of the full or half
by Rizza, the same having been donated to her by her blood (Art. 150, FC)
parents.
Q: What governs family relations?
Q: In 1989, Rico, then a widower 40 years of age,
cohabited with Cora, a widow 30 years of age. While living A: Family relations are governed by the law. No custom,
together, they acquired from their combined earnings a practice or agreement destructive of the family shall be
parcel of riceland. After Rico and Cora separated, Rico recognized or given effect. (Art. 149, FC)
lived together with Mabel, a maiden 16 years of age.
While living together, Rico was a salaried employee and Note: Even if not all forms of extra-marital relations are
Mabel kept house for Rico and did full-time household punishable under penal law, the sanctity of marriage is
chores for him. During their cohabitation, a parcel of constitutionally recognized and likewise affirmed by our
coconut land was acquired by Rico from his savings. statutes as a special contract of permanent union.
Accordingly, the Court has had little qualms with penalizing
After living together for 1 year, Rico and Mabel separated. judicial employees for their dalliances with married persons
Rico then met and married Letty, a single woman 26 years or for their own betrayals of the marital vow of fidelity
of age. During the marriage of Rico and Letty, Letty bought (Concerned Employee v. Mayor, A.M. No. P-02-1564,
a mango orchard out of her own personal earnings. November 23, 2004).
1. Who would own the riceland, and what property Q: What are the requisites before a suit between
relation governs the ownership? Explain. members of the same family may prosper?
2. Who would own the coconut land, and what
property relation governs the ownership? A:
Explain. 1. Earnest efforts toward a compromise have been
3. Who would own the mango orchard, and what made;
property relation governs the ownership? 2. Such efforts failed;
Explain. (1992 Bar Question) 3. The fact that earnest efforts toward a compromise
have been made but the same have failed appears in
A: the verified complaint or petition.
1. Rico and Cora are the co-owners of the riceland. The
relation is that of co-ownership (Art. 147, Family Code, Note: This rule shall not apply to cases which may not be subject of
first paragraph). compromise under the Art. 2035 of the NCC.
Addendum: However, after Rico's marriage to Letty, Q: In a complaint filed by Manolo against his brother,
the half interest of Rico in the riceland will then Rodolfo, it was alleged that the case "xxx passed through
become absolute community property of Rico and the Barangay and no settlement was forged between the
Letty. plaintiffs and defendant as a result of which Certification
to File Action was issued xxx". Rodolfo moved to dismiss
2. Rico is the exclusive owner of the coconut land. The for failure to comply with a condition precedent - that
relation is a sole/single proprietorship (Art. 148. Family earnest efforts for an amicable settlement among the
Code, first paragraph is applicable, and not Art. 147 parties had been exerted but that none was reached.
Family Code). Decide.
A: The case will prosper. There was in fact substantial

compliance with Art. 151 of the FC since the spouses

CIVIL LAW
alleged in the complaint for ejectment that the case "xxx A: It is not exempt. Under Art. 155 of the FC, the family
passed through the Barangay and no settlement was forged home shall be exempt from execution, forced sale, or
between the plaintiffs and defendant as a result of which attachment except for, among other things, debts incurred
Certification to File Action was issued by Barangay 97, Zone prior to the constitution of the family home. In the case at
8, District I, Tondo, Manila xxx". It bears stressing that bar, the house and lot was not constituted as a family
under Sec. 412 (a) of R.A. 7160, no complaint involving any home, whether judicially or extra-judicially, at the time that
matter within the authority of the Lupon shall be instituted the debtor incurred her debts. Under prevailing
or filed directly in court for adjudication unless there has jurisprudence, it is deemed constituted as such by
been a confrontation between the parties and no operation of law only upon the effectivity of the Family
settlement was reached. Code on August 3, 1988, thus, the debts were incurred
before the constitution of the family home (Gomez-Salcedo,
Moreover, the phrase "members of the same family" found et al. v. Sta. Ines, et al., G.R. No. 132537, October 14, 2005).
in Art. 151 of the FC must be construed in relation to Art.
150 thereof (Martinez, et al. v. Martinez, G.R. No. 162084. Q : Has the residential house and lot of Cesario Montana
Jun. 28, 2005). which he and his family built in 1960 but which was not
constituted as a family home, whether judicially or
Note: A sister-in-law or a brother-in-law is not covered by extrajudicially, under the NCC been constituted as a family
these two provisions. Being an exception to the general home by operation of law under Art. 153 of the FC, and
rule, Art. 151 must be strictly construed (Gayon v. Gayon, therefore, exempt from execution from a money
G.R. No. L-28394, November 26, 1970). judgement where the debt or liability was incurred before
the effectivity of the FC ?
THE FAMILY HOME
A : Under Art. 162 of the FC, it is provided that “the
Q: What is meant by family home (FH) and how is it provisions of this Chapter shall also govern existing family
constituted? residences insofar as said provisions are applicable.” It does
not mean that Arts. 152 and 153 of the FC have a
A: It is the dwelling house where the husband and wife and retroactive effect such that all existing family residences are
their family reside, and the land on which it is situated; it is deemed to have been constituted as a family home at the
constituted jointly by the husband and the wife or by an time of their occupation prior to the effectivity of the FX
unmarried head of a family. (Art. 152, FC) and are exempt from execution for the payment of
obligations before the effectivity of the FC. Art. 162 simply
Q: Can FH be constituted on a house constructed on a land means that all existing family residences at the time of the
belonging to another? effectivity of the FC are considered family homes and are
prospectively entitled to the benefits accorded to a family
A: No. The land where the house is erected is an integral home under the FC (Manacop v. CA, 277 SCRA 64, August
part of the home and the home should be permanent in 11, 1997).
character.
Q: What are the rules for the family home to be exempt
Note: A house constructed on rented land or by tolerance of the from execution?
owner is not a permanent improvement on the land and the home
will thus be temporary. A: If the family home was constructed before the effectivity
of the FC, then it must have been constituted either
Q: What are the exceptions to the rule that the FH is judicially or extrajudicially as provided under Arts. 225,
exempt from execution, forced sale or attachment? 229-231 and 233 of the NCC. Judicial constitution of the
family home requires the filing of a verified petition before
A: LTPM the courts and the registration of the court’s order with
1. Debts due to Laborers, mechanics, architects, builders, the Registry of Deeds of the area where the property is
material men and others who rendered service or located. Meanwhile, extrajudicial constitution is governed
furnished materials for the constitution of the by Arts. 240 to 242 of the NCC and involves the execution
building; of a public instrument which must also be registered with
2. Non-payment of Taxes; the Registry of Property.
3. Debts incurred Prior to its constitution;
4. Debts secured by Mortgages on the premises before For family homes constructed after the effectivity of the FC,
or after such constitution. there is no need to constitute extrajudicially or
judicially, and the exemption is effective from the time it
Note: Exemption is limited to the value allowed in the FC.
was constituted and lasts as long as any of its beneficiaries
actually resides therein. Moreover, the family home should
Q: A complaint for damages was filed against Hinahon in
belong to the absolute community or conjugal partnership,
1986 when she incurred liabilities as early as 1977, which
or if exclusively by one spouse, its constitution must have
action prospered in 1989. The house and lot that she
been with consent of the other, and its value must not
owned was levied upon and sold at auction. She assails
exceed certain amounts depending upon the area where it
the levy and sale on the ground that it was her family
is located. Further, the debts incurred for which the
home and therefore exempt from execution. Decide.
exemption does not apply as provided under Art. 155 for
which the family home is made answerable must have been home either by the owner thereof or by “any of its
incurred after the effectivity of the FC. beneficiaries” must be actual. That which is “actual” is
something real, or actually existing, as opposed to
And in both cases, whether under the Civil Code or the something merely possible, or to something which is
Family Code, it is not sufficient that the person claiming presumptive and constructive. Actual occupancy, however,
exemption merely alleges that such property is a family need not be by the owner of the house. Rather, the
home. This claim for exemption must be set up and proved property may be occupied by the “beneficiaries”
(Juanita Trinidad Ramos, et al. v. Danilo Pangilinan et al. enumerated by Art. 154 of the FC (Manacop v. CA, 277
G.R. No. 185920, July 20, 2010). SCRA 65, August 11, 1997).
Q: Does the exemption of family home from execution be Note: This enumeration may include the in-laws where the family
set up and proved? home is constituted jointly by the husband and wife. But the law
definitely excludes maids and overseers.
A: Yes. The family home’s exemption from execution must
be set up and proved to the Sheriff before the sale of the Q: On what properties must the family home be
property at public auction. It should be asserted that the constituted?
property is a family home and that it is exempted from
execution at the time it was levied or within a reasonable A: The family home must be part of the properties of the
time thereafter. It is not sufficient that the person claiming absolute community or the conjugal partnership or the
exemption merely alleges that such property is a family exclusive properties of either spouse with the latter’s
home. Failure to do so will estop one from later claiming consent. It may also be constituted by an unmarried head
the said exemption (Spouses Araceli Oliva-De Mesa and of a family on his or her own property.
Ernesto de Mesa v. Spouses Claudio D. Acero Jr. and
Note: Property that is subject of a conditional sale on instalments
Ma.Rufina D. Acero, Sheriff Felixberto L. Samonte and
where ownership is reserved by the vendor to guarantee payment
Registrar Alfredo Santos, G.R. No. 185064, January 16, of the purchase price may be constituted as a family home.
2012).
Q: What is the effect of death of one or both spouses or of
Q: What are the guidelines in the constitution of the the unmarried head of the family upon the family home?
family home?
A: The family home shall continue despite the death of one
A: 1-SAPOC or both spouses or of the unmarried head of the family for
1. FH is deemed constituted from the time of Actual a period of 10 years or for as long as there is a minor
occupation as a family residence; beneficiary and the heirs cannot partition the same unless
2. Only 1 FH may be constituted; the court finds compelling reasons therefor. This rule shall
3. Must be Owned by the person constituting it; apply regardless of whoever owns the property or
4. Must be Permanent; constituted the family home. (Art. 159, FC)
5. Same rule applies to both valid and voidable marriages
and even to common law spouses; (Arts. 147 and 148) Q: What are the requisites in the sale, alienation,
6. It Continues despite death of one or both spouses or donation, assignment or encumbrance of the FH?
an unmarried head of the family for 10 years or as long
as there is a minor beneficiary. A: The following must give their written consent:
1. The person who constituted the FH;
Note: The heirs cannot partition the same unless the court finds
2. The spouse of the person who constituted the FH;
compelling reasons therefor. This rule shall apply regardless of
whoever owns the property or constituted the family home. 3. Majority of the beneficiaries of legal age.
Note: In case of conflict, the court shall decide.

Q: Who are the beneficiaries of a FH?
Q: What are the requisites for the creditor to avail of the
A:
right to execute?
1. Husband and wife, or unmarried head of the family
2. Parents (may include parents-in-law), ascendants,
A:
brothers and sisters (legitimate or illegitimate) living in
1. He must be a judgment creditor;
the FH and dependent on the head of the family for
2. His claim must not be among those excepted under
support
Art. 155;
3. He has reasonable grounds to believe that the family
Q: Miko contends that he should be deemed residing in
home is worth more than the maximum amount fixed
the family home because his stay in the U.S. is merely
in Art. 157.
temporary. He asserts that the person staying in the house
is his overseer and that whenever his wife, Rosanna,
Q: What is the procedure in exercising the right to
visited the Philippines, she stayed in the family home. Is
execute?
the contention of Miko meritorious?
A:
A: The law explicitly provides that occupancy of the family
1. Creditor must file a motion in the court proceeding

CIVIL LAW
where he obtained a favorable judgment for a writ of LEGITIMATE CHILDREN
execution against the FH;
2. There will be a hearing on the motion where the Q: Who is a legitimate child?
creditor must prove that the actual value of the FH
exceeds the maximum amount fixed by the Family A: One who is conceived or born during the marriage of the
Code, either at the time of its constitution or as a parents
result of improvements introduced after its
constitution; Q: When is a child conceived by artificial insemination
3. If the creditor proves that the actual value exceeds the considered legitimate?
maximum amount, the court will order its sale in
execution; A: The following conditions must be present:
4. If the family home is sold for more than the value 1. The artificial insemination is made on the wife, not on
allowed, the proceeds shall be applied as follows: another woman;
a. The obligations enumerated in Art. 155 must be 2. The artificial insemination on the wife is done with the
paid sperm of the husband or of a donor, or both the
b. The judgment in favor of the creditor will be paid, husband and a donor;
plus all the costs of execution 3. The artificial insemination has been authorized or
The excess, if any, shall be delivered to the judgment ratified by the spouse on a written instrument
debtor. (Art. 160, FC) executed and signed by them before the birth of the
child; and
Q: How many family homes may a person constitute or be 4. The written instrument is recorded in the civil registry
a beneficiary of, for the purposes of availing of the together with the birth certificate of the child.
benefits of a family home?
Q: What are the rights of legitimate children?
A: A person may constitute or be the beneficiary of only
one family home for purposes of availing of the benefits of A:
a family home. (Art. 161, FC) 1. To bear the surname of the father and the mother;
2. To receive support from their parents, their
PATERNITY AND FILIATION ascendants, and in proper cases, their brothers and
sisters;
Q: To what do paternity and filiation refer to? 3. To be entitled to the legitimate and other successional
rants granted to them by Art. 174 of the FC.
A: Paternity and filiation refer to the relationship existing
between parent and child. Q: On what grounds may legitimacy be impugned?
Note: Filiation may be by nature or adoption, legitimate or A: legitimacy of the child may be impugned only on the
illegitimate.
following grounds:
1. Physical impossibility of the husband to have sexual
Q: What are the classifications of filiation?
intercourse with his wife within the first 120 days of
the 300 days which immediately preceded the birth of
A: LILA
the child
GENERAL RULE EXCEPTIONS
2. It is proved that the child could not have been that of
Legitimate the husband
Conceived or born within a valid marriage 3. In case of artificial insemination, the written
authorization or ratification of either parent was
Illegitimate obtained through mistake, fraud, violence,
Conceived and born outside a valid marriage intimidation, or undue influence.
Legitimated
Q: What is the rule on status of child where the mother
Conceived or born outside of wedlock of parents without
contracted another marriage within 300 days after
impediment to marry at the time of conception and had
termination of the former?
subsequently married.
A: The child shall be considered as conceived during the:
Requisites of Legitimation:
1. No legal impediment for parents to marry at time
1. Former marriage– if child is born:
of conception;
a. Before 180 days after the solemnization of the
2. Valid marriage subsequent to child’s birth.
subsequent marriage, provided it is born
Adopted
b. Within 300 days after termination of former
(Please refer to related notes on Adoption laws at page 61)
marriage
2. Subsequent marriage –if a child is born:
a. 180 days after the celebration of the subsequent
marriage;

b. even though it be born within 300 days after the
termination of the former marriage.
Illustrations:
th th
1. 180 day takes place before 300 day
Subsequent 180th day from 300th day

Former marriage marriage solemnization of from
terminated solemnized subsequent termination of
marriage former
marriage
Born during this period: Born during this period:
Conceived during Former Conceived during Subsequent

Marriage Marriage
th th
2. 180 day takes place after 300 day
300th day from

Subsequent termination of
180th day from
marriage solemnization of
Former former
solemnized subsequent
marriage marriage
marriage
terminated
Born during this period: Born during this period:

Conceived during Former Conceived during Subsequent
Marriage Marriage
Q: Distinguish action to impugn legitimacy and action to without having Note: Must be filed within 5
claim legitimacy. desisted; years.
3. Child was born after
A: the death of husband.
ACTION TO IMPUGN ACTION TO CLAIM Prescription
LEGITIMACY LEGITIMACY GR: During the lifetime of
Remedy the child
1 year – husband reside in
Action to impugn legitimacy Action to claim legitimacy the same municipality or
XPN: Lifetime of the
or illegitimacy (compulsory recognition) city where birth took place
putative father
Real party in interest 2 years – husband reside
NOT in the same
GR: Husband GR: Child In cases where the action is
municipality or city
for the recognition of
3 years – husband is living
XPNs: Heirs, in cases where: XPNs: Heirs of the child, in illegitimate child by “open
abroad
1. Husband died before cases where: and continuous possession”
the expiration of the 1. Child died in state of of the status.
period for bringing the insanity
action; 2. Child died during
2. Husband died after minority
filing the complaint,

CIVIL LAW
Q: What are the grounds to impugn legitimacy of the Q: When does the prescriptive period start to run?
child?
A: GR: The prescriptive period for filing action impugning
A: the legitimacy of the child shall be counted from the
1. Physical impossibility for the husband to have sexual knowledge of birth or its recording in the civil registry.
intercourse with his wife within the first 120 days of
the 300 days which immediately preceded the birth of XPN: If the birth was:
the child because of: 1. Concealed from or
a. Physical incapacity of the husband to have sexual 2. Was unknown to the husband or his heirs, the
intercourse with his wife, periods shall be counted from the discovery or
b. The fact that the husband and wife were living knowledge of the birth of the child or of the act of
separately in such a way that sexual intercourse registration of said birth, whichever is earlier.
was not possible, or
c. Serious illness of the husband which absolutely Q: Is the right to claim filiation transmissible to the heirs
prevented intercourse; of the child?
2. Proved that for biological or other scientific reasons,
the child could not have been that of the husband, A: GR: The right to claim filiation may be used only by the
except in the case of children conceived through child. It is not transmissible to the heirs.
artificial insemination;
3. In case of children conceived through artificial XPN: In cases where child died:
insemination, the written authorization or ratification 1. During minority or
of either parent was obtained through mistake, fraud, 2. In a state of insanity.
violence, intimidation or undue influence.
Q: When should an action to claim legitimacy be brought?
Q: Is sterility synonymous with impotency?
A: It depends on who is bringing the action:
A: No, they are not synonymous. Sterility is the inability to 1. By the child – during his lifetime
procreate, while impotency is the physical inability to 2. By his heirs – within 5 years should the child die
copulate (Menciano v. San Jose, 89, Phil. 63). during minority or in a state of insanity
Q: Will an infliction of the last stages of tuberculosis be a Note: Questioning legitimacy may not be collaterally attacked. It
ground for impugnation of the legitimacy of the child? can be impugned only in a direct action.
A: Tuberculosis, even in its last stages, is not the kind of PROOF OF FILIATION
serious illness of the husband that will establish physical
impossibility of access (Andal v. Macaraig, 89 Phil.165). Q: What are the different kinds of proof of filiation?
Q: What is the effect of the declaration of a wife against A: Proof of filiation has two kinds:
the legitimacy of the child where the child is conclusive 1. Primary proof consists of the ff:
presumed to be the legitimate child of H and W? a. Record of birth appearing in civil registrar or final
judgment;
A: The child shall still be legitimate, although the mother b. Admission of legitimate filiation in public
may have declared against his legitimacy. This law likewise document or private handwritten instrument
applies to such instances where the mother may have been signed by parent concerned.
sentenced as an adulteress (Art. 167, FC). 2. Secondary consists of the ff:
a. Open and continuous possession of legitimacy;
Q: Who may attack the legitimacy of the child? b. Any means allowed by the Rules of Court and
special laws.
A: GR: Only the husband can contest the legitimacy of the
child. Note: To prove open and continuous possession of the status of an
illegitimate child, there must be evidence of manifestation of the
permanent intention of the supposed father to consider the child
XPNs: Heirs of the husband may impugn the filiation as his, by continuous and clear manifestations of parental affection
of the child within the period prescribed in Art. 170 of and care, which cannot be attributed to pure charity.
the FC only in the following cases:
1. If the husband should die before the expiration of Such acts must be of such a nature that they reveal not only the
the period fixed for brining his action; conviction of paternity, but also the apparent desire to have and
2. If he should die after the filing of the complaint, treat the child as such in all relations in society and in life, not
without having desisted therefrom; or accidentally, but continuously (Jison v. CA, G.R. No. 124853,
February 24, 1998).
3. If the child was born after the death of the
husband. (Art. 171, FC)

Q: Will pictures or certificate of baptism constitute The SSS granted her claim but this was withdrawn after
authentic documents to prove the legitimate filiation of a investigation, when a sister of the decedent informed the
child? system that Pablo could not have sired a child during his
lifetime because he was infertile. However in lyn’s birth
A: Pictures or the canonical baptismal certificate do not certificate, Pablo affixed his signature and he did not
constitute the authentic documents to prove the legitimate impugn lyn’s legitimacy during his lifetime. Was the SSS
filiation of a child. The baptismal certificate of the child, correct in withdrawing the death benefits?
standing alone, is not sufficient. It is not a record of birth.
Neither is it a public instrument nor a private handwritten A: No. Under Art. 164 of the FC, children conceived or born
instrument (Abelle v. Santiago, 7 SCRA 925). during the marriage of the parents are legitimate. This
presumption becomes conclusive in the absence of proof
Q: May a baptismal certificate prove filiation? that there is physical impossibility of access under Art. 166.
Further, upon the expiration of the periods for impugning
A: Just like in a birth certificate, the lack of participation of legitimacy under Art. 170, and in the proper cases under
the supposed father in the preparation of a baptismal Art. 171, of the FC, the action to impugn would no longer
certificate renders this document incompetent to prove be legally feasible and the status conferred by the
paternity. And “while a baptismal certificate may be presumption becomes fixed and unassailable. In this case,
considered a public document, it can only serve as evidence there is no showing that Pablo, who has the right to impugn
of the administration of the sacrament on the date the legitimacy of lyn, challenged her status during his
specified but not the veracity of the entries with respect to lifetime. Furthermore, there is adequate evidence to show
the child’s paternity. Thus, baptismal certificates are per that the child was in fact his child, and this is the birth
se inadmissible in evidence as proof of filiation and they certificate where he affixed his signature (SSS v. Aguas, et
cannot be admitted al., G.R. No. 165546, February 27, 2006).
indirectly as circumstantial evidence to prove the Q: In an action for partition of estate, the trial court
same” (Antonio Perla v. Mirasol Baring and Randy B. dismissed it on the ground that the respondent, on the
Perla, G.R. No. 172471, November 12, 2012). basis of her birth certificate, was in fact the illegitimate
child of the deceased and therefore the latter's sole heir,
Q: What are the rules in proving filiation? to the exclusion of petitioners. However, trial court failed
to see that in said birth certificate, she was listed therein
A: GR: Primary proof shall be used to prove filiation. as “adopted.” Was the trial court correct in dismissing the
action for partition?
XPN: In absence of primary proof, secondary proof
may be resorted to. A: No. The trial court erred in relying upon the said birth
certificate in pronouncing the filiation of the respondent.
Note: For illegitimate children, if the action is based on par. 2 of However, since she was listed therein as “adopted”, she
Art. 172 (secondary proof), the action may be brought only during should therefore have presented evidence of her adoption
the lifetime of the alleged parent. in view of the contents of her birth certificate. In this case,
there is no showing that she undertook such. It is well-
Q: May a will which was not presented for probate settled that a record of birth is merely prima facie evidence
sufficiently establish filiation? of the facts contained therein. It is not conclusive evidence
of the truthfulness of the statements made there by the
A: Yes. It still constitutes a public document or private interested parties (Rivera v. Heirs of Romualdo Villanueva,
handwritten instrument signed by parent concerned. G.R. No. 141501, July 21, 2006).
Q: When is a prima facie case said to exist? Q: In a complaint for partition and accounting with
damages, Ma. Theresa alleged that she is the illegitimate
A: We explained that a prima facie case exists if a woman daughter of Vicente, and therefore entitled to a share in
declares — supported by corroborative proof — that she the estate left behind by the latter. As proof, she
had sexual relations with the putative father; at this point, presented her birth certificate which Vicente himself
the burden of evidence shifts to the putative father. We signed thereby acknowledging that she is his daughter. Is
explained further that the two affirmative defenses the proof presented by Ma.Theresa sufficient to prove her
available to the putative father are: (1) incapability of claim that she is an illegitimate child of Vicente?
sexual relations with the mother due to either physical
absence or impotency, or (2) that the mother had sexual A: Yes. Citing the earlier case of De Jesus v. Estate of Juan
relations with other men at the time of conception (Charles Dizon, (366 SCRA 499), the Supreme Court held that the
Gotardo v. Divina Buling, G.R. No. 165166, August 15, Ma. Theresa was able to establish that Vicente was in fact
2012). her father. The due recognition of an illegitimate child in a
record of birth, a will, a statement before a court of record,
Q: Rosanna, as surviving spouse, filed a claim for death or in any authentic writing is, in itself, a consummated act
benefits with the SSS upon the death of her husband, of acknowledgment of the child, and no further court action
Pablo. She indicated in her claim that the decedent is also is required. The rule is, any authentic writing is treated not
survived by their minor child, lyn, who was born in 1991. just as a ground for compulsory recognition; it is in itself a

CIVIL LAW
voluntary recognition that does not require a separate execution, which is, the fact of birth of a child. A birth
action for judicial approval. (Eceta v. Eceta, G.R. No. certificate, in order to be considered as validating proof of
157037, May 20, 2004) paternity and as an instrument of recognition, must be
signed by the father and mother jointly, or by the mother
Q: Gerardo filed a complaint for bigamy against Ma. alone if the father refuses. There having been no convincing
Theresa, alleging that she had a previous subsisting proof of respondent's supposed legitimate relations with
marriage when she married him. The trial court nullified respect to the decedent, the presumption of legitimacy
their marriage and declared that the son, who was born under the law did not therefore arise in her favor (Angeles
during their marriage and was registered as their son, as v. Angeles-Maglaya, G.R. No. 153798, September2, 2005).
illegitimate. What is the status of the child?
Q: On the basis of the physical presentation of the
A: The first marriage being found to be valid and subsisting, plaintiff-minor before it and the fact that the alleged
whereas that between Gerardo and Ma. Theresa was void father had admitted having sexual intercourse with the
and non-existent, the child should be regarded as a child's mother, the trial court, in an action to prove
legitimate child out of the first marriage. This is so because filiation with support, held that the plaintiff-minor is the
the child's best interest should be the primordial child of the defendant with the plaintiff-minor's mother.
consideration in this case. Was the trial court correct in holding such?
Q: Gerardo and Ma. Theresa, however, admitted that the A: No. In this age of genetic profiling and DNA analysis, the
child was their son. Will this affect the status of the child? extremely subjective test of physical resemblance or
similarity of features will not suffice as evidence to prove
A: No. The admission of the parties that the child was their paternity and filiation before courts of law. This only shows
son was in the nature of a compromise. The rule is that: the the very high standard of proof that a child must present in
status and filiation of a child cannot be compromised. Art. order to establish filiation.
164 of the FC is clear that a child who is conceived or born
during the marriage of his parents is legitimate (Concepcion Note: The birth certificate that was presented by the plaintiff-
v. CA, G.R. No. 123450. August 31, 2005). minor appears to have been prepared without the knowledge or
consent of the putative father. It is therefore not a competent
piece of evidence on paternity. The local civil registrar in this case
Q: What is the effect of Ma. Theresa’s claim that the child
has no authority to record the paternity of an illegitimate child on
is her illegitimate child with her second husband, to the the information of a third person. Similarly, a baptismal certificate,
status of the child? while considered a public document, can only serve as evidence of
the administration of the sacrament on the date specified therein
A: None. This declaration – an avowal by the mother that but not the veracity of the entries with respect to the child's
her child is illegitimate – is the very declaration that is paternity (Macadangdang v. CA, 100 SCRA 73). Thus, certificates
proscribed by Art. 167 of the FC. This proscription is in issued by the local civil registrar and baptismal certificates are per
consonance with, among others, the intention of the law to se inadmissible in evidence as proof of filiation and they cannot be
admitted indirectly as circumstantial evidence to prove the same
lean towards the legitimacy of children (Concepcion v. CA,
(Jison v. CA, 350 Phil. 138; Cabatania v. CA, G.R. No. 124814.
G.R. No. 123450. August 31, 2005). October 21, 2004).
Q: In a petition for issuance of letters of administration, Q: Ann Lopez, represented by her mother Araceli Lopez,
Cheri Bolatis alleged that she is the sole legitimate filed a complaint for recognition and support of filiation
daughter of decedent, Ramon and Van Bolatis. Phoebe, against Ben-HurNepomuceno. She assailed that she is the
the decedent's second wife, opposed the petition and illegitimate daughter of Nepomuceno submitting as
questioned the legitimate filiation of Cheri to the evidence the handwritten note allegedly written and
decedent, asserting that Cheri’s birth certificate was not signed by Nepomuceno. She also demanded for financial
signed by Ramon and that she had not presented the support along with filial recognition. Nepomuceno denied
marriage contract between her alleged parents which the assertions reasoning out that he was compelled to
would have supported her claim. execute the handwritten note due to the threats of the
National People’s Army. RTC ruled in favor of Ann. Is the
In said birth certificate, it was indicated that her birth was trial court correct?
recorded as the legitimate child of Ramon and Van Bolatis,
and contains as well the word "married" to reflect the A: Ann’s demand for support is dependent on the
union between the two. However, it was not signed by determination of her filiation. However, she relies only on
Ramon and Vanemon Bolatis. It was merely signed by the the handwritten note executed by petitioner. The note
attending physician, who certified to having attended to does not contain any statement whatsoever about her
the birth of a child. Does the presumption of legitimacy filiation to petitioner. It is, therefore, not within the ambit
apply to Cherimon? of Article 172(2) vis-à-vis Art. 175 of the FC which admits as
competent evidence of illegitimate filiation an admission of
A: No. Since the birth certificate was not signed by Cher's filiation in a private handwritten instrument signed by the
alleged parents but was merely signed by the attending parent concerned.
physician, such a certificate, although a public record of a
private document is, under Sec. 23, Rule 132 of the Rules of
Court, evidence only of the fact which gave rise to its
The Court is mindful that the best interests of the child in
cases involving paternity and filiation should be advanced. Q: How may illegitimate children establish their
It is, however, just as mindful of the disturbance that illegitimate filiation should their status be impugned?
unfounded paternity suits cause to the privacy and peace of When must the action to claim illegitimacy be brought?
the putative father’s legitimate family (Ben-
HurNepomuceno v. Archbencel Ann Lopez, represented by A: Illegitimiate children may establish their illegitimate
her mother Araceli Lopez G.R. No. 181258, March 18, 2010). filiation in the same way and on the same evidence as
st
legitimate children. (Art. 175, 1 sentence, FC)
ILLEGITIMATE CHILDREN
The action must be brought in the same period specified in
Q: Who are illegitimate children? Art. 173 of the FC, except when the action is based on the
nd
2 par. of Art. 172 of the FC, in which case the action may
A: Children conceived and born outside a valid marriage: be brought during the lifetime of the alleged parent. (Art.
1. children born of couples who are not legally married or 175, FC)
of common law marriages
2. children born of incestuous marriage LEGITIMATED CHILDREN
3. children born of bigamous marriage
4. children born of adulterous relations between parents Q: Who are legitimated children?
5. children born of marriages which are void for reasons of
public policy under Art. 18 A; Legitimated children are those who, because of the
6. children born of couples below 18, whether they are subsequent marriage of their parents to each other are by
married (which marriage is valid) or not legal fiction, considered legitimate.
7. children born of void marriages under Art. 35, except
where the marriage is void for lack of authority on the Q: What is legitimation?
part of the solemnizing officer, but the parties or either
of them believed in good faith that the solemnizing A: Legitimation is a remedy or process by means of which
officer had authority, in which case the marriage will be those who in fact not born in wedlock and should therefore
considered valid and the children will be considered be ordinarily illegitimate, are by fiction, considered
legitimate. legitimate.
Q: What are the rights of an illegitimate child? Q: Who are entitled to legitimation?
A: A: Only children conceived and born outside of wedlock of

1. They shall use the surname of the mother; parents who, at the time of conception, were not
2. They shall be under the parental authority of the disqualified by any impediment to marry each other or
mother; were so disqualified only because either or both of them
3. They shall be entitled to support in conformity with were below eighteen (18) years of age (Art. 177, FC as
the FC; amended by R.A. 9858).
4. They shall be entitled to a legitime which shall consist
of ½ of the legitime of a legitimate child. (Art. 176, FC) Q: How does legitimation take place?
Q: What is the effect of the recognition of an illegitimate A: Legitimation takes place by a subsequent valid marriage
child by the father? between parents.
A: Such recognition would be a ground for ordering the Note: The annulment of a voidable marriage shall not affect
latter to give support to, but not the custody of the child. the legitimation. (Art. 178, FC)
The law explicitly confers to the mother sole parental
authority over an illegitimate child; it follows that only if Q: When does legitimation take place?
she defaults can the father assume custody and authority
over the minor (Briones v. Miguel, G.R. No. 156343, October A: It shall retroact to the time of the child’s birth. (Art 180,
18, 2004). FC)
Q: In what instances may an illegitimate child use the Q: Who may impugn legitimation?
surname of their father?
A: Only by those who are prejudiced in their rights.
A: RAP
1. Filiation has been Recognized by the father through Q: What are the requisites of legitimation?
the record of birth appearing in the civil register
2. Admission in public document A:
3. Private handwritten instrument is made by the father 1. Child must have been conceived and born outside of
wedlock;
Note: Provided that the father has the right to institute an action 2. Child’s parents, at the time of former’s conception,
before the regular courts to prove non-filiation during his lifetime. were not disqualified by any impediment to marry

CIVIL LAW
each other or were so disqualified only because either Q: Can Laica bring an action to impugn her own status on
or both of them were below eighteen (18) years of the ground that based on DNA results, Roderick is her
age; biological father?
3. The subsequent valid marriage of the parents.
A: No, she cannot impugn her own filiation. The law does
Q: Why is an illegitimate child of a woman who gets not allow a child to impugn his or her own filiation. In the
married allowed to bear the surname of her spouse, while problem, Laica’s legitimate filiation was accorded to her by
a legitimate child may not? operation of law which may be impugned only by Brad, or
his heirs in the cases provided by law within the
A: To allow the child to adopt the surname of his mother’s prescriptive period.
second husband, who is not his father, could result in
confusion in his paternity. It could also create the suspicion Q: Can Laica be legitimated by the marriage of her
that the child, who was born during the covertures of his biological parents?
mother with her first husband, was in fact sired by the
second husband, thus bringing his legitimate status into A: No she cannot be legitimated by the marriage of her
discredit (Republic v. Vicencio, G.R. No. 88202. biological parents. In the first place she is not, under the
December14, 1998). law, the child of Roderick. In the second place, her
biological parents could not have validly married each other
Q: Roderick and Faye were high school sweethearts. When at the time she was conceived and born simply because
Roderick was 18 and Faye, 16 years old, they started living Faye was still married to Roderick at that time. Under Art.
together as husband and wife without the benefit of 177 of the FC, only children conceived or born outside of
marriage. When Faye reached 18 years of age, her parents wedlock of parents who, at the time of the conception of
forcibly took her back and arranged for her marriage to the child were not disqualified by any impediment to marry
Brad. Although Faye lived with Brad after the marriage, each other, may be legitimated.
Roderick continued to regularly visit Faye while Brad was
away at work. During their marriage, Faye gave birth to a Q: Who may oppose legitimation? Within what time may
baby girl, Laica. When Faye was 25 years old, Brad the impugnation of the legitimation be made?
discovered her continued liaison with Roderick and in one
of their heated arguments, Faye shot Brad to death. She A: Legitimation may be impugned only by those who are
lost no time in marrying her true love Roderick, without a prejudiced in their rights, within 5 years from the time their
marriage license, claiming that they have been cause of action accrues, that is, from the death of the
continuously cohabiting for more than 5 years. Was the putative parent.
marriage of Roderick and Faye valid? (2008 Bar Question)
A: The marriage was void because there was no marriage

license. Their marriage was not exempt from the requisite
of a marriage license because Roderick and Faye have not
been cohabiting for at least 5 continuous years before the
celebration of their marriage. Their lovers’ trysts and brief
visitations did not amount to “cohabitation”. Moreover, the
Supreme Court held that for the marriage to be exempt
from a license, there should be no impediment for them to
marry each other during the entire 5 years of cohabitation.
Roderick and Faye could not have cohabited for 5 years of
cohabitation. Roderick and Faye could not have been
cohabited for 5 continuous years without impediment
because Faye was then legally married to Brad.
Q: What is the filiation status of Laica?
A: Having been born during the marriage of Faye and Brad,

she is presumed to be the legitimate child of Faye and Brad,
she is presumed to be the legitimate child of Faye and Brad.
This presumption had become conclusive because the
period of time to impugn her filiation had already
prescribed.

RIGHTS OF CHILDREN 4. Full civil capacity and legal rights;
5. Not been Convicted of any crime involving moral
Q: What are the rights of legitimate and illegitimate turpitude;
children? 6. Emotionally and psychologically capable of caring for
children;
A: 7. GR: At least 16 years older than adoptee
LEGITIMATE CHILDREN ILLEGITIMATE CHILDREN XPN: It is not necessary that adopter be at least
16 years older:
Surname a. Adopter is the biological parent of the
Bear the surnames of both Bear the surname of either adoptee,
parents (mother and the mother or the father b. Adopter is the spouse of adoptee’s parent.
father) under R.A. 9255
Q: What are the qualifications of an alien who may adopt
Support
under R.A. 8552?
Receive support from:
1. Parents;
A: SD-3
2. Ascendants; and Receive support according to
1. Possesses Same qualifications as those enumerated for
3. in proper cases, provision of FC
Filipino adopters;
brothers and sisters
2. His country has Diplomatic relations with the
under Art. 174.
Philippines;
Legitime 3. GR: Has been living in the Philippines for at least 3
Full Legitimes and other Share is equivalent to ½ of continuous years prior to the application for adoption
successional rights under the share of a legitimate and maintains such residence until adoption decree
the NCC child has been entered.
Period for filing action for claim of legitimacy or
illegitimacy XPNs:
For primary proof: his/her a. He is a former Filipino who seeks to adopt a
whole lifetime relative within the 4
th
civil degree of
His/her whole lifetime
regardless of type of proof consanguinity or affinity,
For secondary proof: b. He is married to a Filipino and seeks to adopt
provided under Art. 172
only during the lifetime of jointly with his spouse a relative within the 4
th
the alleged parent degree of consanguinity or affinity,

Transmissibility of right to file an action to claim c. He is married to a Filipino and seeks to adopt
legitimacy the legitimate or illegitimate child of his
Yes No Filipino spouse.
Right to inherit ab intesto
No right to inherit ab intesto Q: How may a guardian adopt his ward?
from legitimate children and
Yes relatives of father and A: A guardian may only adopt his ward after termination of
mother under Art. 992, NCC guardianship and clearance of his financial accountabilities.
(Iron Curtain Rule)
Q: What is the rule when a person seeking to adopt has a
ADOPTION spouse?
DOMESTIC ADOPTION LAW A: GR: Such person must adopt with his spouse jointly. The
general rule is that husband and wife shall jointly adopt.
WHO CAN ADOPT
XPNs:
Q: Who may adopt? 1. One spouse seeks to adopt the legitimate child of
the other;
A: 2. One spouse seeks to adopt his own illegitimate
1. Filipino citizens; child;
2. Aliens; 3. Spouses are legally separated.
3. Guardians with respect to their ward.
Q: Spouses Primo and Monica Lim, childless, were
Q: What are the qualifications of a Filipino who may entrusted with the custody of two minor children, the
adopt? parents of whom were unknown. Eager of having children
of their own, the spouses made it appear that they were
A: LPG-FEC-16 the children’s parents by naming them Michelle P. Lim and
1. Must be of Legal age; Michael Jude Lim. Subsequently, Monina married Angel
2. In a Position to support and care for his children; Olario after Primo’s death of her husband. She decided to
3. Good moral character; adopt the children by availing the amnesty given under

CIVIL LAW
R.A. 8552 to those individuals who simulated the birth of a ADOPTEE
child. She filed separate petitions for the adoption of
Michelle, then 25 years old and Michael, 18. Both Michelle Q: Who may be adopted?
and Michael gave consent to the adoption.
A:
The trial court dismissed the petition and ruled that 1. Any person below 18 of age who has been
Monina should have filed the petition jointly with her new administratively or judicially declared available for
husband. Monina, in a Motion for Reconsideration argues adoption;
that mere consent of her husband would suffice and that 2. Legitimate child of one spouse by the other spouse;
joint adoption is not needed, for the adoptees are already 3. Illegitimate child by a qualified adopter to improve the
emancipated. status of said child to that of legitimacy;
4. Person of legal age, if prior to the adoption, said
Is the trial court correct in dismissing the petitions for person has been consistently considered and treated
adoption? by adopters as their child since minority;
5. Child whose adoption has been previously rescinded;
A: Yes. Sec. 7 Art. 3 of R.A. 8552 reads: Sec. 7 – Husband 6. Child whose biological parents have died provided no
and wife shall jointly adopt xxx. proceedings have been initiated within 6 months from
time of death.
The use of the word “shall” in the above-quoted provision
means that joint adoption by the husband and the wife is Q: What is the definition of “child”?
mandatory. This is in consonance with the concept of joint
parental authority over the child which is the ideal A: A child is any person below 18 years old.
situation. As the child to be adopted is elevated to the level
of a legitimate child, it is but natural to require the spouses Q: What is the definition of “child legally free for
to adopt jointly. The rule also ensures harmony between adoption”?
the spouses.
A: A child voluntarily or involuntarily committed to the
The law is clear. There is no room for ambiguity. Monina, DSWD, freed of his biological parents, guardians, adopters
having remarried at the time the petitions for adoption in case of rescission.
were filed, must jointly adopt. Since the petitions for
adoption were filed only by Monina herself, without joining Q: Whose written consent is necessary for adoption?
her husband, Olario, the trial court was correct in denying
the petitions for adoption on this ground (In Re: Petition for A:
Adoption of Michelle P. Lim, In Re: Petition for Adoption of 1. Adoptee, if 10 years of age and over;
Michael Jude P. Lim, Monina P. Lim, G.R. Nos. 168992-93, 2. Biological parents of the child, if known or the legal
May 21, 2009). guardian, or the proper government instrumentality
which has legal custody of the child;
Q: Is joint adoption still needed when the adoptees are 3. Legitimate children of the adopter, if 10 years old or
already emancipated? over;
4. Illegitimate children of the adopter, if 10 years old or
A: Yes. Even if emancipation terminates parental authority, over and living with him;
the adoptee is still considered a legitimate child of the 5. Spouse of the adopted, if married;
adopter with all the rights of a legitimate child such as: (1) 6. Spouse of the adopter, if married.
to bear the surname of the father and the mother; (2) to
receive support from their parents; and (3) to be entitled to Q: Bernadette filed a petition for adoption of the three
the legitime and other successional rights. Conversely, the minor children of her late brother, Ian. She alleged that
adoptive parents shall, with respect to the adopted child, when her brother died, the children were left to the care
enjoy all the benefits to which biological parents are of their paternal grandmother, Anna, who went to Italy.
entitled such as support and successional rights. This grandmother died however, and so she filed the
petition for adoption. The minors gave their written
Q: May a person who already has children of his own consent to the adoption and so did all of her own grown-
adopt? up children. The trial court granted the decree of adoption
even though the written consent of the biological mother
A: Yes, a person who already has children of his own may of the children was not adduced by Bernadette. Was the
still adopt, provided, that he is in a position to support and trial court correct in granting the decree of adoption?
care for his children, legitimate or illegitimate, in keeping
with the means of the family, both material and otherwise. A: No. The rule is adoption statutes must be liberally
(Art. 183, par. 1, FC) construed in order to give spirit to their humane and
salutary purpose which is to uplift the lives of unfortunate,
needy or orphaned children. However, the discretion to
approve adoption proceedings on the part of the courts
should not to be anchored solely on those principles, but
with due regard likewise to the natural rights of the parents
over the child. The written consent of the biological parents 5. In legal and intestate succession, the adopters and the
is indispensable for the validity of the decree of adoption. adoptee shall have reciprocal rights of succession
Indeed, the natural right of a parent to his child requires without distinction from legitimate filiation. However,
that his consent must be obtained before his parental rights if the adoptee and his/her biological parents had left a
and duties may be terminated and vested in the adoptive will, the law on testamentary succession shall govern.
parents. In this case, since the minors' paternal
grandmother had taken custody of them, her consent Q: State the effects of rescission of the adoption in the
should have been secured instead in view of the absence of Domestic Adoption Act of 1998 (RA 8552).
the biological mother. This is so under Sec. 9 (b) of R.A.
8552, otherwise known as the Domestic Adoption Act of A:
1998. Diwata failed in this respect, thus necessitating the 1. If adoptee is still a minor or is incapacitated –
dismissal of her petition for adoption (Landingin v. Republic, Restoration of:
G.R. No. 164948, June 27, 2006). a. Parental authority of the adoptee’s biological
parents, if known’ or
Q: On what grounds may an adoptee seek the rescission of b. Legal custody of the DSWD;
the adoption? 2. Reciprocal rights and obligations of the adopters and
adoptee to each other shall be extinguished;
A: 3. Court shall order the civil registrar to cancel the
1. Attempt on the life of the adoptee; amended certificate of birth of the adoptee and
2. Sexual assault or violence; restore his/her original birth certificate;
3. Abandonment and failure to comply with parental 4. Succession rights shall revert to its status prior to
obligations; adoption, but only as of the date of judgment of
4. Repeated physical or verbal maltreatment by the judicial rescission;
adopter. 5. Vested rights acquired prior to judicial rescission shall
be respected.
Q: May the adopter seek the rescission of the adoption?
Q: Despite several relationships with different women,
A: No. Adopter cannot rescind but he may disinherit the Andrew remained unmarried. His first relationship with
adoptee. Brenda produced a daughter, Amy, now 30 years old. His
second, with Carla, produced two sons: Jon and Ryan. His
Q: What are the grounds by which an adopter may third, with Donna, bore him two daughters: Vina and
disinherit adoptee? Wilma. His fourth, while Elena, bore him no children
although Elena has a daughter Jane, from a previous
A: relationship. His last, with Fe, produced no biological
1. Groundless accusation against the testator of a crime children but they informally adopted without court
punishable by 6 years or more imprisonment; proceedings, Sandy, now 13 years old, whom they
2. Found guilty of attempt against the life of the testator, consider as their own. Sandy, now 13 years old, whom
his/her spouse, descendant or ascendant; they consider as their own. Sandy was orphaned as a baby
3. Causes the testator to make changes or changes a and was entrusted to them by the midwife who attended
testator’s will through violence, intimidation, fraud or to Sandy’s birth. All the children, including Amy, now live
undue influence; with Andrew in his house. Is there any legal obstacle to
4. Maltreatment of the testator by word or deed; the legal adoption of Amy by Andrew? To the legal
5. Conviction of a crime which carries a penalty of civil adoption of Sandy by Andrew and Elena? (2008 Bar
interdiction; Question)
6. Adultery or concubinage with the testator’s wife;
7. Refusal without justifiable cause to support the parent A: No, there is no legal obstacle to the legal adoption of
or ascendant; Amy by Andrew. While a person of age may not be
8. Leads a dishonorable or disgraceful life. adopted, Amy falls within two exceptions: (1) she is an
illegitimate child and she is being adopted by her
Q: What are the effects of adoption? illegitimate father to improve her status; and (2) even on
the assumption that she is not an illegitimate child of
A: Andrew, she may still be adopted, although of legal age,
1. GR: Severance of all legal ties between the biological because she has been consistently considered and treated
parents and the adoptee and the same shall then be by the adopter as his own child since minority. In fact, she
vested on the adopters has been living with him until now.
XPN: In cases where the biological parent is the There is a legal obstacle to the adoption of Sandy by
spouse of the adopter; Andrew and Elena. Andrew and Elena cannot adopt jointly
because they are not married.
2. Deemed a legitimate child of the adopter;
3. Acquires reciprocal rights and obligations arising from
parent-child relationship;
4. Right to use surname of adopter;

CIVIL LAW
Q: In his old age, can Andrew be legally entitled to claim
support from Amy, Jon, Ryan, Vina, Wilma and Sandy A: It depends. If Sonny and Sarah have been residing in the
assuming that all of them have the means to support him? Philippines for at least 3 years prior to the effectivity of R.A.
8552, the petition may be granted. Otherwise, the petition
A: Andrew can claim support from all of them, except from cannot be granted because the American husband is not
Sandy, who is not his child, legitimate, illegitimate or qualified to adopt.
adopted.
While the petition for adoption was filed in 1990, it was
Q: Can Amy, Jon, Ryan, Vina, Wilma and Sandy legally considered refiled upon the effectivity of R.A. 8552. This is
claim support from each other? the law applicable, the petition being still pending with the
lower court. Under the Act, Sarah and Sonny must adopt
A: Amy, Jon, Ryan, Vina and Wilma can ask support from jointly because they do not fall in any of the exceptions
each other because they are half-blood brothers and where one of them may adopt alone. When husband and
sisters, and Vina and Wilma are full-blood sisters (Art. 195 wife must adopt jointly, the Supreme Court has held in a
[5], FC), but not Sandy who is not related to any of them. line of cases that both of them must be qualified to adopt.
While Sarah, an alien, is qualified to adopt, for being a
Q: Can Jon and Jane legally marry? former Filipino citizen who seeks to adopt a relative within
th
the 4 degree of consanguinity or affinity, Sonny, an alien,
A: Jon and Jane can legally marry because they are not is not qualified to adopt because he is neither a former
related to each other. Jane is not a daughter of Andrew. Filipino citizen nor married to a Filipino. One of them not
being qualified to adopt, their petition has to be denied.
INTERCOUNTRY ADOPTION ACT OF 1995 However, if they have been residents of the Philippines 3
(R.A. 8043) years prior to the effectivity of the Act and continues to
reside here until the decree of adoption is entered, they are
ADOPTER qualified to adopt the nephew of Sarah under Sec. 7(b)
thereof, and the petition may be granted.
Q: Who may adopt?
ADOPTEE
A:
1. Any alien; Q: Who may be adopted?
2. Filipino citizen, both permanently residing abroad.
A: Only a legally free child may be adopted provided the
Q: What are the qualifications needed for a Filipino or following are submitted:
alien to adopt? 1. Child study;
2. Birth certificate/ foundling certificate;
A: 3. Deed of Voluntary Commitment/Decree of
1. At least 27 years old and 16 years older than the child Abandonment/Death Certificate of parents;
to be adopted at the time of the application unless 4. Medical evaluation or history;
adopter is the parent by nature of the child; 5. Psychological evaluation;
2. If married, his spouse must jointly file for adoption; 6. Recent photo;
3. Has the capacity to act or assume all rights and
responsibilities of parental authority; Q: What is the definition of “child”?
4. Not been convicted of a crime involving moral
turpitude; A: A child is any person below 15 years old.
5. Eligible to adopt under his national law;
6. In a position to provide for proper care and support Note: No child shall be matched to a foreign adoptive
and give necessary moral values; family unless it is satisfactorily shown that the child cannot
7. Agrees to uphold the basic rights of the child be adopted in the Philippines.
mandated by the UN convention of rights of Child and
the Philippine Laws; GR: There shall be no physical transfer of a voluntarily
8. Comes from a country with which the Philippines has committed child earlier than 6 months from the date of
diplomatic relations and adoption is allowed under his execution of Deed of Voluntary Commitment.
national law;
9. Possesses all the qualifications and none of the XPN:
disqualifications under the law or other applicable 1. Adoption by relative;
Philippine laws. 2. Child with special medical condition.
Q: Sometime in 1990, Sarah, born a Filipino but by then a INTER-COUNTRY ADOPTION BOARD
naturalized American citizen, and her American husband
Sonny Cruz, filed a petition in the Regional Trial Court of Q: What is the function of Inter-Country Adoption Board?
Makati, for the adoption of the minor child of her sister, a
Filipina, can the petition be granted? (2000 Bar Question) A: The Inter-Country Adoption Board acts as the central
authority in matters relating to inter-country adoption. The
Board shall ensure that all the possibilities for adoption of Q: What are the rules on the amount of support?
the child under the Family Code have been exhausted and
that the inter-country adoption is in the best interest of the A: Amount of support shall be in proportion to the
child resources or means of the giver and to the necessities of
the recipient. It shall be increased or reduced
Q: What is trial custody? proportionately, according to the increase/reduction of
necessities of the recipient and the resources of the person
A: It is the pre-adoptive relationship which ranges 6 months obliged.
from the time of the placement. It starts from the actual
transfer of the child to the applicant who, as actual Q: What are the different kinds of support?
custodian, shall exercise substitute parental authority over
the person of the child A:
1. Legal – required or given by law;
Note: 2. Judicial – required by court;May be:
1. If unsatisfactory – the relationship shall be suspended by the a. Pendente lite
board and the foreign adoption agency shall arrange for the b. In a final judgment
child’s voluntary care.
3. Conventional – by agreement.
2. If satisfactory – the Board shall submit the written consent of
the adoption to the foreign adoption agency within 30 days
after the request of the latter’s request. Q: What are the rules on support of illegitimate children
of either spouse?
SUPPORT
A: It depends upon the property regime of the spouses.
Q: What is support? 1. ACP:
a. Exclusive property of the debtor spouse shall be
A: It comprises everything indispensable for sustenance, liable.
dwelling, clothing, medical attendance and transportation,
in keeping with the financial capacity of the family, b. If the exclusive property is insufficient, the
including the education of the person entitled to be community is liable.
supported until he completes his education or training for
some Note: The same being considered as advance made by the
absolute community to said spouse.
2. CPG:
profession, trade or vocation, even beyond the age of
a. Property of the debtor-spouse is liable.
majority. (Art. 194, FC)
b. If the debtor spouse has no property or the same
is insufficient, it may be enforced against the
Q: What are the characteristics of support?
conjugal property.
A: PRIM PEN
WHO ARE OBLIGED
1. Personal
2. Reciprocal on the part of those who are by law bound
Q: Who are persons obliged to support each other?
to support each other
3. Intransmissible
A:
4. Mandatory
1. Spouses;
5. Provisional character of support judgment
2. Legitimate ascendants & descendants;
6. Exempt from attachment or execution
3. Parents and their legitimate children, and the
7. Not subject to waiver or compensation
legitimate and illegitimate children of the latter;
4. Parents and their illegitimate children, and the
WHAT IT COMPRISES
legitimate and illegitimate children of the latter;
5. Legitimate brothers and sisters whether full or half-
Q: What comprises support?
blood. (Art. 195, FC)
A: Support comprises of everything indispensable for: SDC
Q: Are brothers and sisters not legitimately related
MET
likewise bound to support each other?
1. Sustenance
2. Dwelling
A: GR: Yes, whether full or half-blood.
3. Clothing
4. Medical attendance
XPN: When the need for support of the brother or
5. Education – includes schooling or training for some
sister, being of age, is due to a cause imputable to the
profession, trade or vocation, even beyond the age of
claimant’s fault or negligence. In this case, the
majority
illegitimate brother or sister has no right to be
6. Transportation – includes expenses going to and from
supported.
school, or to from place of work

CIVIL LAW
Q: What are the sources of support? no means to support them, then Francisco, as the girls’
grandfather, should then extend the support needed by
A: them.
SOURCES OF SUPPORT
During Note: The second option in Art. 204 of the FC, that of taking in the
Pending Litigation After Litigation family dwelling the recipient, is unavailing in this case since the
Marriage
filing of the case has evidently made the relations among the
Spouses
parties bitter and unpleasant (Mangonon, et al. v. CA, et al., G.R.
ACP No. 125041, Jun. 30, 2006).
GR: From the
community property Q: Marcelo and Juana called Dr. Arturo to their house to
assets GR: No render medical assistance to their daughter-in-law who
XPN: If Art. 203 obligation to was about to give birth to a child. He performed the
applies, that if the support necessary operation. When Dr. Arturo sought payment,
claimant spouse is the Marcelo and Juana refused to pay him without giving any
guilty spouse, he/she is XPN: If there is good reason. Who is bound to pay the bill for the services
From the not entitled to support. Legal rendered by Arturo?
community
Separation. In
property CPG which case, the A: Her husband, not her father and mother- in-law. The
Support is considered court may rendering of medical assistance in case of illness is
an advance of such require the comprised among the mutual obligations to which the
spouses’ share. guilty spouse to spouses are bound by way of mutual support (Arts. 142 and
give support 143). If every obligation consists in giving, doing or not
Note: The rule does not doing something (Art. 1088), and spouses are mutually
apply if the spouses are
bound to support each other, there can be no question but
under ACP based on Art.
153. that, when either of them by reason of illness should be in
Children need of medical assistance, the other is under the
From the unavoidable obligation to furnish the necessary services of
From the a physician in order that health may be restored, and he or
From the community separate
community she may be freed from the sickness by which life is
property properties of
property jeopardized.
the spouses
Q: Cheryl married Edward Lim they have three children.
Q: To whom does the liability to support devolve upon?
Cheryl, Edward and their children lived at the house of
Edward’s parents, Prudencio and Filomena, together with
A: In the following order: S-DAB
Edward’s ailing grandmother and her husband. Edward
1. Spouse
was employed with the family business, which provided
2. Descendants in the nearest degree
him with a monthly salary of P6,000 and shouldered the
3. Ascendants in the nearest degree
family expenses. Cheryl had no steady source of income.
4. Brothers and sisters
Cheryl caught Edward in “a very compromising situation”
with the midwife of Edward’s
Q: Belen, in behalf of her minor children, instituted a
petition for declaration of legitimacy and support against
grandmother. After a violent confrontation with Edward,
Federico, their alleged father, and Francisco, father of
Cheryl left the Forbes Park residence. She subsequently
Federico. It appears that the marriage of the two was
sued, for herself and her children, Edward, Edward’s
annulled due to the minority of Federico. May Francisco
parents and grandparents for support. Edward and his
be ordered to give support?
parents were ordered by the RTC to “jointly” provide,
monthly support to Cheryl and her children. Is the court’s
A: Yes. There appears to be no dispute that the children are
judgment in making Edward’s parents concurrently liable
indeed the daughters of Federico by Belen. Under Art. 199
with Edward to provide support to Cheryl and her children
of the FC, “Whenever two or more persons are obliged to
correct?
give support, the liability shall devolve upon the following
persons in the following order herein provided:
A: Yes. However, the Supreme Court modified the appealed
1. The spouse;
judgment by limiting liability of Edward’s parents to the
2. The descendants in the nearest degree;
amount of monthly support needed by Cheryl’s children.
3. The ascendants in the nearest degree: and
Edward’s parents are liable to provide support but only to
4. The brothers and sisters.
their grandchildren. By statutory and jurisprudential
mandate, the liability of ascendants to provide legal
The obligation to give support rests principally on those
support to their descendants is beyond cavil. Petitioners
more closely related to the recipient. However, the more
themselves admit as much — they limit their petition to the
remote relatives may be held to shoulder the responsibility
narrow question of when their liability is triggered, not if
should the claimant prove that those who are called upon
they are liable.
to provide support do not have the means to do so. Here,
since it has been shown that the girls' father, Federico, had

There is no showing that private respondent is without AMOUNT
means to support his son; neither is there any evidence to
prove that petitioner, as the paternal grandmother, was Q: What is the amount of support?
willing to voluntarily provide for her grandson's legal
support. Cheryl is unable to discharge her obligation to A: Amount shall be in proportion to the resources or means
provide sufficient legal support to her children. It also of the giver and to the necessities of the recipient. (Art.
shows that Edward is unable to support his children. This 201, FC)
inability of Edward and Cheryl to sufficiently provide for
their children shifts a portion of their obligation to the Q: May the amount of support be reduced or increased?
ascendants in the nearest degree, both in the paternal
(petitioners) and maternal lines, following the ordering in A: Yes. Support may be decreased or increased
Article 199. (Spouses Lim v. Cheryl Lim, G.R. No. 163209, proportionately according to the reduction or increase of
October 30, 2009) the necessities of the recipient and the resources of the
person obliged to furnish the same. (Art. 202, FC)
SUPPORT DURING MARRIAGE LITIGATION
WHEN DEMANDABLE
Q: What is the source of support during the pendency of
legal separation, annulment and declaration of nullity of Q: When is the obligation to give support demandable?
marriage proceedings?
A: From the time the person who has a right to receive
A: The spouses and their common children shall be support needs it for maintenance.
supported from the properties of the absolute community
or the conjugal partnership. Q: When shall support be paid?
Q: Are the spouses still obliged to render mutual support A: Only from the date of judicial or extrajudicial demand.
after final judgment granting the petition?
Note: The right to support does not arise from mere fact of
A: GR: No. The obligation of mutual support ceases after relationship but from imperative necessity without which it cannot
final judgment. be demanded. The law presumes that such necessity does not exist
unless support is demanded.
XPN: In case of legal separation the Court may order
that the guilty spouse shall give support to the OPTIONS
innocent one.
Q: What are the options given to persons giving support?
Q: H and W are living separately. Both had been unfaithful
to each other. After their separation, H had been giving A:
money to W for her support. Subsequently, W brought an 1. To Give a fixed monthly allowance; or
action against H for separate maintenance. Will the action 2. To Receive and maintain the recipient in the giver’s
prosper? home or family dwelling. (Art. 204, FC)
A: Yes. The principle of in pari delicto is applicable. Both are Q: What if support is given by a stranger without the
at fault. Consequently, H cannot avail of himself of the knowledge of the person obliged to give support?
defense of adultery of W. Besides, the act of H in giving
money to W is implied condonation of the adultery of W A: GR: The stranger shall have the right of reimbursement.
(Amacen v. Baltazar, L-10028, May 28, 1958).
XPN: Unless it appears that he gave it without any
Q: May the woman oblige her husband to pay the intention of being reimbursed. (Art. 206, FC)
attorney’s fee for the lawyer who defended her in a
criminal action for adultery instituted against her by the Q: What if the person obliged to give support unjustly
husband? refuses or fails to give support when urgently needed?
A: It depends. A: Any third person may furnish support to the needy

individual, with a right of reimbursement. (Art. 207, FC)
She may, in case of acquittal. Expenses such as judicial costs
and attorney’s fees incurred by the wife to defend herself ATTACHMENT
against unjust prosecution are chargeable as support
against the husband. However, the rule is different in case Q: Is the right to receive support subject to attachment or
of conviction. Adultery on the part of the wife, when execution?
proved, is a valid defense against an action for support
(Quinatana v. Lerma, G.R. No. L-7426, February 5, 1913). A: GR: No. The right to receive support and any money or
property obtained as support cannot be attached nor be
subject to execution to satisfy any judgment against the
recipient.

CIVIL LAW
latter, any third person may furnish support to the needy
XPN: In case of contractual support or support given individual, with right of reimbursement from the person
by will, the excess in amount beyond that required for obliged to give support." The resulting juridical relationship
legal support shall be subject to levy on attachment or between the Edward and Noel is a quasi-contract, an
execution. equitable principle enjoining one from unjustly enriching
himself at the expense of another (Lacson v. Lacson, et al.,
Note: Contractual support shall be subject to adjustment GR No. 150644, August 28, 2006).
whenever modification is necessary due to changes in
circumstances beyond the contemplation of the parties Q: Fe and her son Martin sued Martin’s alleged biological
father Arnel for support. Arnel denied having sired Martin
Q: Jurisdictional questions may be raised at any time. arguing that his affair and intimacy with Fe had allegedly
What is the exception with respect to the provisional ended in long before Martin’s conception. As a result, Fe
character of judgment for support and the application of and Martin moved for the issuance of an order directing
estoppel? all the parties to submit themselves to DNA paternity
testing. The said motion was granted by the court. Did the
A: Judgment for support is always provisional in character. order of the court convert the complaint for support to a
Res Judicata does not apply. The lower court cannot grant a petition for recognition?
petition based on grounds, such as bigamy, not alleged in
the petition. Such a decision based on grounds not alleged A: The assailed order did not convert the action for support
in the petition is void on the ground of no jurisdiction. into one for recognition but merely allowed Fe to prove
their cause of action. But even if the order effectively
However, if the lower court’s void decision is not assailed integrated an action to compel recognition with an action
on appeal which dealt only with the matter of support, the for support, such was valid and in accordance with
losing party is now estopped from questioning the jurisprudence. In Tayag v. Court of Appeals (209 SCRA 665),
declaration of nullity and the SC will not undo the judgment the Supreme Court allowed the integration of an action to
of the RTC declaring the marriage null and void for being compel recognition with an action to claim one's
bigamous. inheritance. A separate action will only result in a
multiplicity of suits. Furthermore, the declaration of
It is axiomatic that while a jurisdictional question may be filiation is entirely appropriate to the action for support
raised at any time, this however admits of an exception (Agustin v. CA, G.R. No. 162571, June 15, 2005).
where estoppel has supervened (Lam v. Chua, G.R. No.
131286, March 18, 2004). Q: Can DNA testing be ordered in a proceeding for support
without violating the constitutional right against self-
Q: Edward abandoned his legitimate children when they incrimination?
were minors. After 19 years from the time Edward left
them, they, through their mother, finally sued him for A: Yes. In People v. Yatar (428 SCRA 504), the Supreme
support, which the court granted. The court ordered him Court had already upheld the constitutionality of
to pay 2M pesos as support in arrears. compulsory DNA testing and the admissibility of the results
thereof as evidence. Moreover, it has mostly been in the
Edward assails the grant of the support in arrears as areas of legality of searches and seizure and in the
erroneous since under Art. 203 of the FC, there was never infringement of privacy of communication where the
any demand for support, judicial or extra-judicial, from constitutional right to privacy has been critically at issue.
them. Rule on his contention.
If, in a criminal case, an accused whose very life is at stake
A: No. Edward could not possibly expect his daughters to can be compelled to submit to DNA testing, so much more
demand support from him considering their tender years at so may a party in a civil case, who does not face such dire
the time that he abandoned them. In any event, the mother consequences, be likewise compelled. DNA testing and its
of the girls had made the requisite demand for material results is now acceptable as object evidence without
support although this was not in the standard form of a running afoul self-incrimination rights of a person (Agustin
formal written demand. Asking one to give support owing v. CA, GR No. 162571, June 15, 2005).
to the urgency of the situation is no less a demand just
because it came by way of a request or a plea (Lacson v. PARENTAL AUTHORITY
Lacson, et al., G.R. No. 150644, August 28, 2006).
GENERAL PROVISIONS
Q: Noel helped Lea by extending financial help to support
Lea’s children with Edward. May Noel seek Q: What is patria potestas?
reimbursement of his contributions? If yes, from whom
may he do so? A: The sum total of the rights of parents over the persons
and property of their unemancipated child.
A: Yes. Pursuant to Art. 207 of the FC, Noel can rightfully
exact reimbursement from Edward. This provision reads
that "[W]hen the person obliged to support another unjustly
refuses or fails to give support when urgently needed by the

Q: What does parental authority include? XPN: If the fears and apprehensions were unfounded
as to the father’s corrupting influence over the
A: It shall include: children and if it is proven therefore that indeed the
1. Caring for and rearing of such children for civic father is a negative influence because of reasons like
consciousness and efficiency; immorality, drunkenness, etc. on the children, the
2. Development of their moral, mental and physical court, taking into consideration the best interest of the
character and well-being. children, can deny his petition for the exercise of his
visitation rights (Silva v. CA, G.R. No. 114742, July 17,
Q: What are the characteristics of parental authority? 1997).
A: Jo-Na-RePuTe Q: What is meant by the parental preference rule?

1. Jointly exercised by the father and mother;
2. Natural right and duty of the parents; A: The natural parents, who are of good character and who
3. Cannot be Renounced, transferred or waived; can reasonably provide for the child are ordinarily entitled
to custody as against all persons.
XPN: In cases authorized by law such as in cases of
adoption, guardianship and surrender to a children's Q: Who shall exercise parental authority in case of
home or an orphan institution (Santos v. CA, G.R. No. absence, death, remarriage of either parent or legal or de
113054, March 16, 1995). facto separation of parents?
4. Purely personal; A:
1. Absence or death of either parent – parent present
Note: It cannot be exercised through agents. shall continue exercising parental authority
2. Remarriage of either parent – it shall not affect the
5. Temporary. parental authority over the children, unless the court
appoints another person to be the guardian of the
Q: What are the rules as to the exercise of parental person or property of the children. (Art. 213, FC)
authority? 3. Legal or de facto separation of parents – the parent
designated by the court.
A:
1. The father and the mother shall jointly exercise Q: What shall the Court take into account in the
parental authority over the persons of their common designation of the parent?
children.
A: All relevant considerations, especially the choice of the
Note: In case of disagreement, the father’s decision shall child over seven years of age except when the parent
prevail unless there is a judicial order to the contrary. chosen is unfit.
2. If the child is illegitimate, parental authority is with the Note: The relevant Philippine law on child custody for spouses
mother. separated in fact or in law (under the second paragraph of Art. 213
of the FC) is also undisputed: “no child under seven years of age
Q: What is “visitation rights”? shall be separated from the mother x x x.” (This statutory awarding
of sole parental custody to the mother is mandatory, grounded on
sound policy consideration, subject only to a narrow exception not
A: It is the right of access of a noncustodial parent to his or
alleged to obtain here.) Clearly then, the Agreement’s object to
her child or children. establish a post-divorce joint custody regime between respondent
and petitioner over their child under seven years old contravenes
Q: Carlitos Silva and Suzanne Gonzales had a live-in Philippine law. The Philippine courts do not have the authority to
relationship. They had two children, namely, Ramon enforce an agreement that is contrary to law, morals, good
Carlos and Rica Natalia. Silva and Gonzales eventually customs, public order, or public policy (Dacasin v. Dacasin, G.R. No.
separated. They had an understanding that Silva would 168785, February 5, 2010).
have the children in his company on weekends. Silva
claimed that Gonzales broke that understanding on Q: What is the rule as to the custody of a child below 7
visitation rights. Hence, Silva filed a petition for custodial years of age?
rights over the children before the RTC. The petition was
opposed by Gonzales who claimed that Silva often A: GR: No child below 7 years of age shall be separated
engaged in gambling and womanizing which she feared from the mother.
could affect the moral and social values of the children. In
the meantime, Suzanne had gotten married to a Dutch XPN: When the court finds compelling reasons to
national. She eventually immigrated to Holland with her consider otherwise
children Ramon Carlos and Rica Natalia. Can Silva be
denied visitation rights? Note: The paramount consideration in matters of custody of a child
is the welfare and well-being of the child
A: GR: No. The use of the word “shall” in Art. 213 of the FC is mandatory in
character. It prohibits in no uncertain terms the separation of a

CIVIL LAW
mother and her child below 7 years, unless such separation is Q: Bonifacia Vancil, a US citizen, is the mother of Reeder C.
grounded upon compelling reasons as determined by a court Vancil, a Navy serviceman of USA who died in the said
(Lacson v. San Jose-Lacson, G.R. No. L-23482, August 30, 1968). country on December 22, 1986. During his lifetime, Reeder
had two children named Valerie and Vincent by his
Q: If the parents are separated de facto, who between common-law wife, Helen G. Belmes. Bonifacia obtained a
them has custody over their child/children? favorable court decision appointing her as legal and
judicial guardian over the persons and estate of Valerie
A: In the absence of a judicial grant of custody to one Vancil and Vincent Vancil, Jr. She alleged that Helen was
parent, both are entitled to the custody of their morally unfit as guardian of Valerie considering that
child/children. Helen’s live-in partner raped Valerie several times. Can
Bonifacia exercise substitute parental authority over
The parent who has been deprived of the rightful custody Valerie and Vincent?
of the child may resort to the remedy of habeas corpus
(Salientes v. Abanilla, G.R. No. 162734, August 29, 2006). A: Bonifacia, as the surviving grandparent, can exercise
substitute parental authority only in case of death, absence
Q: The petition for declaration of nullity filed by Crisanto or unsuitability of Helen. Considering that Helen is very
against his wife included a prayer for custody pendente much alive and has exercised continuously parental
lite of their 4-year old son. The supplication for custody authority over Vincent, Bonifacia has to prove, in asserting
was based on the alleged immorality of the mother who, her right to be the minor’s guardian, Helen’s unsuitability.
the husband asserted, was a lesbian. However, the trial Bonifacia, however, has not proffered convincing evidence
court citing Art. 213 of the FC, denied Crisanto's prayer for showing that Helen is not suited to be the guardian of
temporary custody of his son, there having been no Vincent. Bonifacia merely insists that Helen is morally unfit
compelling reason to so order it. Was the trial court as guardian of Valerie considering that her live-in partner
correct in denying Crisanto’s prayer for temporary raped Valerie several times. (But Valerie, being now of
custody? major age, is no longer a subject of this guardianship
proceeding.)
A: Yes. The petitioner failed to overcome the so-called
"tender-age presumption" rule under Art. 213 of the FC. Even assuming that Helen is unfit as guardian of minor
There was no compelling evidence of the mother's Vincent, still Bonifacia cannot qualify as a substitute
unfitness. Sexual preference or moral laxity alone does not guardian. She is an American citizen and a resident of
prove parental neglect or incompetence – to deprive the Colorado. Obviously, she will not be able to perform the
wife of custody, the husband must clearly establish that her responsibilities and obligations required of a guardian. In
moral lapses have had an adverse effect on the welfare of fact, in her petition, Bonifacia admitted the difficulty of
the child or have distracted the errant spouse from discharging the duties of a guardian by an expatriate, like
exercising proper parental care. her. To be sure, she will merely delegate those duties to
someone else who may not also qualify as a guardian
Note: The general rule that children less than 7 years of age shall
not be separated from the mother finds its raison d'etre in the (Vancil v. Belmes, G.R. No. 132223, June 19, 2001).
basic need of minor children for their mother's loving care. This is
predicated on the "best interest of the child" principle which EFFECTS OF PARENTAL AUTHORITY UPON THE PERSON OF
pervades not only child custody cases but also those involving THE CHILDREN
adoption, guardianship, support, personal status and minors in
conflict with the law (Pablo-Gualberto v. Gualberto, G.R. No. Q: What are the rules regarding the right to custody over
154994/G.R. No. 156254, Jun. 28, 2005). the child?
SUBSTITUTE AND SPECIAL PARENTAL AUTHORITY A: GR: Parents are never deprived of the custody and care
of their children.
Q: What is the order of substitute parental authority?
XPNS:
A: GOC 1. For cause
1. Surviving Grandparent;
Note: the law presumes that the child’s welfare will be
Note: The law considers the natural love of a parent to best served in the care and control of his parents.
outweigh that of the grandparents, such that only when the
parent present is shown to be unfit or unsuitable may the
2. If in consideration of the child’s welfare or well-
grandparents exercise substitute parental authority (Santos v.
CA, G.R. No. 113054, March 16, 1995). being, custody may be given even to a non-
relative.
2. Oldest brother or sister, over 21 years;
Q: What is the basis for the duty to provide support?
XPN: unfit or disqualified
A: Family ties or relationship, not parental authority.
3. Actual Custodian over 21 year;
Note: The obligation of the parents to provide support is not
coterminous with the exercise of parental authority.
XPN: unfit or disqualified (Art. 216, FC)
Q: What are the distinctions between substitute parental
Q: What is the rule on the parent’s duty of authority and special parental authority?
representation?
A:
A: GR: Parents are duty-bound to represent their SUBSTITUTE PARENTAL SPECIAL PARENTAL
unemancipated children in all matters affecting their AUTHORITY AUTHORITY
interests; Exercised in case of: DAU 1. Exercised concurrently
with the parental
Note: This duty extends to representation in court litigations. 1. Death, authority of the
2. Absence, or parents;
XPN: A guardian ad litem may be appointed by the 3. Unsuitability of 2. Rests on the theory that
court to represent the child when the best interest of parents. while the child is in the
the child so requires. custody of the person
exercising special
Q: What is the scope of the parent’s right to discipline the parental authority, the
child? parents temporarily
relinquish parental
A: Persons exercising parental authority may: authority over the child
1. Impose discipline on minor children as may be to the latter.
required under the circumstances.
Q: What is the liability of persons exercising special
2. Petition the court for the imposition of parental authority over the child?
appropriate disciplinary measures upon the child,
which include the commitment of the child in A: They are principally and solidarily liable for damages
entities or institutions engaged in child care or in caused by the acts or omissions of the child while under
children’s homes duly accredited by the proper their supervision, instruction or custody.
government agency.
Note: Parents, judicial guardians or those exercising substitute
Note: Such commitment must not exceed 30 days. parental authority over the minor are subsidiarily liable for said
acts and omissions of the minor.
Q: What are the limitations on the exercise of the right to
discipline the child and what are its consequences? Q: While Jayson and his classmates were conducting a
science experiment about fusion of sulphur powder and
A: Persons exercising such right is not allowed to: iron fillings under the tutelage of Tabugo, the subject
1. Treat the child with excessive harshness or teacher and employee of St. Joseph College. Tabugo left
cruelty; or her class while it was doing the experiment without
2. Inflict corporal punishment. having adequately secured it from any untoward incident
or occurrence. In the middle of the experiment, Jayson
Otherwise, the following are its consequences: checked the result of the experiment by looking into the
1. Parental authority may be suspended; test tube with magnifying glass and it was moved towards
2. Parent concerned may be held criminally liable his eyes. At that instance, the compound in the test tube
for violation of RA 7160 (Special Protection of spurted out and several particles of which hit his eyes and
Children against Abuse, Exploitation and his left eye was chemically burned for which he had to
Discrimination Act) undergo surgery and had to spend for his medication.
Hence, Jayson was constrained to file the complaint for
Q: To whom may special parental authority be granted? damages against the school and Tabugo. Can the said
school and its teacher, Tabugo, be held liable for the
A: unfortunate incident of Jayson?
1. School, its administrators and teachers;
2. Individual entity or institution engaged in child care. A: Yes. The proximate cause of the student’s injury was the
concurrent failure of petitioners to prevent the foreseeable
mishap that occurred during the conduct of the science
experiment. Petitioners were negligent by failing to
exercise the higher degree of care, caution and foresight
incumbent upon the school, its administrators and
teachers. Art. 218 of the FC, in relation to Art. 2180 of the
NCC, bestows special parental authority on a school, its
administrators and teachers, or the individual, entity or
institution engaged in child care, and these persons have
responsibility over the minor child while under their
supervision, instruction or custody. Authority and
responsibility shall apply to all authorized activities whether

CIVIL LAW
inside or outside the premises of the school, entity or Q: What are the rules regarding the use of the child’s
institution. property?
In this case, the petitioners’ negligence and failure to A:

exercise the requisite degree of care and caution was 1. The property of minor children shall be devoted to their
demonstrated by the following: (i) petitioner school did not support and education unless the title or transfer
take affirmative steps to avert damage and injury to its provides otherwise.
students although it had full information on the nature of 2. The parents have the right to use only the fruits and
dangerous science experiments conducted by the students income of said property for the following purposes:
during class; (ii) petitioner school did not install safety a. Primarily, to the child’s support;
measures to protect the students who conduct experiments b. Secondarily, to the collective daily needs of the
in class; (iii) petitioner school did not provide protective family.
gears and devices, specifically goggles, to shield students
from expected risks and dangers; and (iv) petitioner Tabugo Q: What is the rule on lease of property belonging to
(the teacher) was not inside the classroom the whole time minor children?
her class conducted the experiment, specifically, when the
accident involving the student occurred (St. Joseph’s A: GR: The parents, as legal guardians of the minor’s
College v. Miranda, G.R. No. 182353, June 29, 2010). property, may validly lease the same, even without court
authorization, because lease has been considered as an act
EFFECTS OF PARENTAL AUTHORITY UPON THE PROPERTY of administration.
OF THE CHILDREN
XPNs: Court authorization is required if:
Q: Who exercises legal guardianship over the property of 1. If the lease will be recorded in the Registry of
an unemancipated child? Property;
2. If the lease is for a period of more than one year,
A: The father and the mother, jointly, without need of because this is already deemed an act of
court appointment. dominion.
Note: In case of disagreement, the father’s decision shall prevail SUSPENSION OR TERMINATION OF PARENTAL AUTHORITY
unless there is a judicial order to the contrary.
Q: When is parental authority terminated?
Q: When is a parent required to post a bond?
A:
A: If the market value of the property or the annual income 1. Permanent: DED
of the child exceeds Php 50,000. a. Death of parents;
b. Emancipation of the child;
Note: The bond shall not be less than 10% of the value of the c. Death of child.
property or annual income. (Art. 225, FC)
2. Temporary: AGA FIA – it may be revived
Q: What are the kinds of properties of a minor?
a. Adoption of the child;
Distinguish.
b. Appointment of general Guardian;
c. Judicial declaration of Abandonment;
A:
d. Final judgment divesting parents of PA;
ADVENTITIOUS PROSFECTITIOUS e. Incapacity of parent exercising PA;
1. Earned or f. Judicial declaration of Absence.
acquired by the
child through his 1. Property Q: What are the grounds for suspension of PA?
work or industry given by the
by onerous or parents to the A: CHAIN B
gratuitous title; child for the 1. Gives Corrupting orders, counsel and example;
2. Owned by the latter to 2. Treats child with excessive Harshness and cruelty;
child; administer; 3. Subjects/allows child be subjected to Acts of
3. Child is also the 2. Owned by the lasciviousness;
usufructuary, but parents; 4. Conviction of crime with penalty of civil Interdiction ;
the child’s use of 3. Parents are 5. Culpable Negligence of parent or person exercising PA;
the property shall usufructuary; 6. Compels child to Beg.
be secondary to 4. Property
all collective daily administered Note: If the person exercising PA has subjected the child or allowed
needs of the by the child. him to be subjected to sexual abuse, he/she shall be permanently
family; deprived of PA.
4. Administered by
the parents.

Q: When may the suspension be revoked and parental 4. The responsibility of parents or guardians for children
authority revived? and wards below 21 under the second and third
paragraphs of Art. 2180 of the NCC shall not be
A: There must be a case filed for the purpose or in the same derogated.
proceeding if the court finds that the cause therefore had
ceased and will not be repeated. SUMMARY JUDICIAL PROCEEDINGS IN FAMILY LAW CASES
GR: Parental authority and responsibility are inalienable Q: What are the matters subject to summary proceedings?
and may not be transferred and renounced.
A:
XPN: In case authorized by law. 1. Petition for judicial authority to administer or
encumber specific separate property of the
Note: Parents may exercise authority over their children’s abandoning spouse.
property. 2. Petition for an order providing for disciplinary
measures over a child.
Q: Under the Child Abuse Law (R.A. 7610), when will 3. Petition for approval of bond of parents who exercise
parental authority over the minor? parental authority over the property of their children.
4. Judicial declaration of presumptive death.
A: When an ascendant, stepparent or guardian of the 5. Action of a child for delivery of presumptive legitime
minor, induces, delivers or offers him to any person who 6. Judicial determination of family domicile in case of
would keep or have in his company such minor, twelve (12) disagreement between the spouses
years or under or who in ten (10) years or more his junior, 7. Objection of one spouse as to the profession of the
in any public or private place, hotel, motel, beer joint, other.
discotheque, cabaret, pension house, sauna or massage 8. Action entrusting parental authority over foundlings,
parlor, beach and/or other tourist resort or similar places. abandoned, neglected or abused children to heads of
institutions.
Q: What is corporal punishment? 9. Annulment by wife of the husband's decision in the
administration and enjoyment of community or
A: It is the infliction of physical disciplinary measures to a conjugal property.
student. This is absolutely prohibited under the Family 10. Appointment of one of the spouses as sole
Code (Sta. Maria, Jr., Persons and Family Relations Law). administrator but only when the other spouse is
absent, or separated in fact, or has abandoned the
Note: While a teacher is administratively liable or civilly liable in other or the consent is withheld (Uy v. CA, G.R. No.
the event that he or she inflicts corporal punishment to a student,
109557, November 29, 2000 ).
it has been held that where there was no criminal intent on the
part of the teacher who angrily and repeatedly whipped a student
resulting in slight physical injuries to the said student and where Q: How shall matters subject to summary proceedings be
the purpose of the teacher was to discipline a student, the said decided?
teacher cannot be held feloniously liable for the criminal offense of
slight physical injuries (Bagajo v. Marave, G.R. No. L-33345, A: All cases requiring summary court proceedings shall be
November 20, 1978, also cited by Sta. Maria, Jr., Persons and decided in an expeditious manner, without regard to
Family Relations Law). technical rules.
EMANCIPATION Q: W filed a petition with the RTC under the rules on

Summary Judicial Proceedings in the Family Law provided
Q: What is emancipation? for in the FC, for the declaration of the presumptive death
of her absent spouse, H, based on the provisions of Art. 41
A: It is the release of a person from parental authority of the FC, for purposes of remarriage. After trial, the RTC
whereby he becomes capacitated for civil life. rendered a decision declaring the presumptive death of H.
The Republic received a copy of the decision on November
Q: How does emancipation take place? 14, 2001. Subsequently, the Republic filed a Notice of
Appeal on November 22, 2001. The RTC held that the
A: By attainment of majority at the age of (18) eighteen appeal was filed within the reglementary period and thus,
years. elevated the records to the Court of Appeals. However,
Q: What are the effects of emancipation? the Court of Appeals denied the Republic’s appeal and
accordingly affirmed the appealed RTC decision. Did the
A: Court of Appeals acquire jurisdiction over the appeal on a
1. Parental authority over the person and property of the final and executory judgment of the RTC?
child is terminated
2. Child shall be qualified and responsible for all acts of A: No. In Summary Judicial Proceedings under the Family
civil life, save exceptions established by existing laws. Code, there is no reglementary period within which to
3. Contracting marriage shall require parental consent perfect an appeal, precisely because judgments rendered
until the age of 21. thereunder, by express provision of Art. 247 of the FC, are
“immediately final and executory”. An appellate court

CIVIL LAW
acquires no jurisdiction to review a judgment which, by possession of status of illegitimate children of Jose who
express provision of law, is immediately final and had an amorous relationship with their mother Luz Fabian
executory. The right to appeal is not a natural right nor is it until the time of the death of Jose. The court declared that
a part of due process, for it is merely a statutory privilege. Antonia Aruego is an illegitimate daughter of the
Since, by express mandate of Article 247 of the Family deceased with Luz Fabian while Evelyn is not. Antonia and
Code, all judgments rendered in summary judicial Evelyn contested the decision citing provisions of the
proceedings in Family Law are “immediately final and Family Code particularly Art. 127 on Filiation, Art. 172 on
executory”, the right to appeal was not granted to any of illegitimate children’s filiation, and Art. 256 on the
the parties therein. The Republic, as oppositor in the retroactivity of the code. Whether or not the provisions of
petition for declaration of presumptive death, should not the Family Code be applied retroactively and will it impair
be treated differently. It had no right to appeal the RTC the vested rights of the respondents?
decision of November 7, 2001. The RTC's decision was
immediately final and executory upon notice to the parties A: The action for compulsory recognition and enforcement
(Republic v. Bermudez-Lorino, G.R. No. 160258, January 19, of successional rights which was filed prior to the advent of
2005). the FC, must be governed by Art. 285 of the NCC and not by
Art. 175, par. 2 of the FC. The present law cannot be given
Note: However, an aggrieved party may file a petition for certiorari retroactive effect insofar as the instant case is concerned,
to question abuse of discretion amounting to lack of discretion. as its application will prejudice the vested right of private
(Republic v. Tango, G.R. No. 161062, July 31, 2009) respondent to have her case decided under Art. 285 of the
NCC. The right was vested to her by the fact that she filed
RETROACTIVITY OF THE FAMILY CODE her action under the regime of the NCC. Prescinding from
this, the conclusion then ought to be that the action was
Q: What is the rule on the retroactivity of the Family not yet barred, notwithstanding the fact that it was brought
Code? when the putative father was already deceased, since
private respondent was then still a minor when it was filed,
A: GR: The Code shall have retroactive effect. an exception to the general rule provided under Art. 285 of
the NCC. Hence, the trial court, which acquired jurisdiction
XPN: No retroactivity if it would prejudice vested over the case by the filing of the complaint, never lost
rights. jurisdiction over the same despite the passage of E.O. No.
209, also known as the Family Code of the Philippines
Q: What is a vested right? (Aruego v. CA,G.R. No. 112193, March 13, 1996).
A: Some right or interest in property that has become fixed Note: If an action for recognition was filed prior to the effectivity of
or established, and is no longer open to doubt or the FC, Art. 173 of the FC cannot be given retroactive effect
controversy. Rights are vested when the right to because it will prejudice the vested rights of petitioners
enjoyment, present or prospective, has become the transmitted to them at the time of the death of their father,
property of some person as present interest. Eutiquio Marquino. "Vested right" is a right in property which has
become fixed and established and is no longer open to doubt or
controversy. It expresses the concept of present fixed interest,
Q: Is a decree of nullity of the first marriage required
which in right reason and natural justice should be protected
before a subsequent marriage can be entered into validly? against arbitrary State action (Marquino v. IAC, G.R. No. 72078,
June 27, 1994).
A: GR: Under the Art. 40 of the FC, the absolute nullity of a
previous marriage may be invoked for purposes of FUNERALS
remarriage on the basis solely of a final judgment declaring
such previous marriage void. Q: What are the rules regarding funeral?
XPN: If the second marriage, however, took place prior A: General Guidelines:
to the effectivity of the FC, there is no need for judicial 1. Duty and right to make arrangements in funerals in
declaration of nullity of the first marriage pursuant to accordance with Art. 199, FC:
the prevailing jurisprudence at that time. (Rabuya, a. Spouse,
2006, p. 265) b. Descendants in the nearest degree,
c. Ascendants in the nearest degree,
Note: Art. 40 is applicable to remarriages entered into after d. Brothers and Sisters
the effectivity of the FC on August 3, 1988 regardless of the
date of the first marriage. Besides, under Art. 256 of the FC,
Note: In case of descendants of the same degree, or of
said Article is given "retroactive effect insofar as it does not
brothers and sisters, the oldest shall be preferred.
prejudice or impair vested or acquired rights in accordance
with the Civil Code or other laws" (Atienza v. Brillantes, A.M.
In case of ascendants, the paternal shall have a better right.
No. MTJ-92-706, March 29, 1995).
2. Funeral shall be:

Q: Antonia Aruego and her sister Evelyn filed a petition in
a. in keeping with the social position of the
the courts seeking Jose Aruego, Jr. and his five children to
deceased,
recognize them as illegitimate children and compulsory
heirs of Jose. They claim there is open and continuous

b. in accordance with the expressed wishes of the show proper or reasonable cause, or any compelling reason
deceased, which may justify such change. Otherwise, the request
c. In absence of the expressed wishes, his religious would be denied. (In Re: Petition for change of name and/or
beliefs or affiliation shall determine; correction/cancellation of entry in civil registry of
3. Any person who disrespects the dead or allows the
same shall be liable for damages; Julian Lin Carulasan Wang, G.R. No. 159966, March 30,
4. Funeral expenses are chargeable against the property 2005)
of the deceased. However, if the deceased is one of
the spouses, they are chargeable against the conjugal Note: The touchstone for the grant of a change of name is that
partnership property. (Art. 310, NCC) there be proper and reasonable cause for which the change is
5. If the deceased is married, the tombstone or sought.
mausoleum is deemed part of the funeral expense and
chargeable against the community property or Q: Can a person change his registered first name and sex
conjugal partnership property. on the basis of a sex reassignment?
USE OF SURNAMES A: No. Before a person can legally change his given name,
he must present proper or reasonable cause or any
Q: What are the grounds for change of name which have compelling reason justifying such change. In addition, he
been held valid? must show that he will be prejudiced by the use of his true
and official name. Under the Civil Register Law, a birth
A: CLEARED certificate is a historical record of the facts as they existed
1. One has Continuously used and been known since at the time of birth. Thus, the sex of a person is determined
childhood by a Filipino name and was unaware of alien at birth, visually done by the birth attendant (the physician
parentage; or midwife) by examining the genitals of the infant.
2. The change results as a Legal consequence, as in Considering that there is no law legally recognizing sex
legitimation; reassignment, the determination of a person’s sex made at
3. There is a sincere desire to adopt a Filipino name to the time of his or her birth, if not attended by error, is
Erase signs of former alienage, all in good faith and immutable (Silverio v. Republic, G.R. No. 174689, October
without prejudicing anyone; 22, 2007).
4. The change will Avoid confusion;
5. The name is: Q: What are the procedural requirements for a petition for
a. Ridiculous, change of name?
b. Extremely difficult to write or pronounce,
c. Dishonorable. A:
1. 3 years residency in the province where the change is
Q: The petition filed by the parents in behalf of their sought prior to the filing;
minor son Julian Lin Carulasan Wang sought the dropping 2. Must not be filed within 30 days prior to an election;
of the latter's middle name, "Carulasan." The parents 3. Petition must be verified.
averred that their plan for Julian to study in Singapore and
adjust to its culture necessitates the drop since in that
Q: What is the Rule with regard to the use of surname by a
country, middle names or the mother's surname are not
child who is (1) legitimate, (2) legitimated, (3) adopted
carried in a person's name. They therefore anticipate that
and (4) illegitimate?
Julian may be subjected to discrimination on account of
his middle name, which is difficult to pronounce in light of
A:
Singapore's Mandarin language which does not have the
CHILD CONCERNED SURNAME TO BE USED
letter "R" but if there is, Singaporeans pronounce it as "L."
Legitimate
Should the petition for the dropping of his middle name Father’s
be granted? Legitimated
Adopted Adopter’s
A: No. Petitioners’ justification for seeking the change in Mother’s or Father’s if
the name of their child, that of convenience, was Illegitimate requisites of R.A. 9255 are
characterized by the Supreme Court as amorphous, to say complied with
the least, and would not warrant a favorable ruling. As Conceived prior to
Father’s
Julian is only a minor and has yet to understand and annulment of marriage
appreciate the value of any change in his name, it is best Conceived after annulment
Mother’s
that the matter be left to his judgment and discretion when of marriage
he reaches legal age.
FACTUAL CIRCUMSTANCE
SURNAME TO BE USED
The State has an interest in the names borne by individuals OF THE WIFE
and entities for purposes of identification, and that a 1. first name and maiden
Valid marriage (before
change of name is a privilege and not a right, such that name + husband’s
husband dies)
before a person can be allowed to change the name given surname
Art 370
him either in his birth certificate or civil registry, he must 2. first name + husband’s

CIVIL LAW
surname In case of renewal of passport, a married woman may

3. husband’s full name + either adopt her husband’s surname or continuously use
prefix indicating that her maiden name. However, once she opted to use her
she is his wife (e.g. husband’s surname in her original passport, she may not
Mrs.) revert to the use of her maiden name, except if any of the
4. retain the use of her four grounds provided under R.A. 8239 is present.
maiden name
Further, even assuming R.A. 8239 conflicts with the Civil
*use of husband’s surname Code, the provisions of R.A. 8239 which is a special law
is not a duty but merely an specifically dealing with passport issuance must prevail over
option for the wife the provisions of the Civil Code which is the general law on
Wife is the Shall resume using her the use of surnames. A basic tenet in statutory construction
guilty party maiden name is that a special law prevails over a general law. (Remo v.
Choices: Sec. of Foreign Affairs, G.R. No. 169202, March 5, 2010)
1. resume using her
maiden name Q: What are the elements of usurpation of name?
2. continue using
husband’s surname A: AUD
Marriage is 1. Actual use of another’s name by the defendant;
Annulled Wife is the 2. Use is Unauthorized;
Unless:
Art. 371 innocent 3. Use of another’s name is to Designate personality
a. court decrees
party or identify a person.
otherwise;
b. she or the former
husband is Q: What are the remedies available to the person whose
married again to name has been usurped?
another person
A:
Wife shall continue using 1. Civil – insofar as private persons are concerned:
Legally Separated the name and surname a. Injunction
Art. 372 employed by her prior to b. Damages
the legal separation. 2. Criminal – when public affairs are prejudiced.
She may use the
deceased’s husband’s Q: Is the use of another’s name always actionable?
Widowed Spouse
surname as though he
were still living. Art. 373 A: No. It is not actionable when it is used as stage, screen or
Divorced (at least if they pen name.
Choices same as widowed
allow it later or for those
spouse. Provided: GIM
who got divorced during the
Japanese occupation) 1. Use is in Good faith;
2. No Injury is caused to the rights of the person
Q: Virginia Remo, a Filipino citizen, is married to Francisco whose name was used;
Rallonza. In her passport, the following entries appear: 3. Use is Motivated by:
"Rallonza" as her surname, "Maria Virginia" as her given a. Modesty
name, and "Remo" as her middle name. Prior to the b. desire to avoid unnecessary trouble
expiration of her passport, Virginia applied for the c. other reason not prohibited by law or
renewal of her passport with the DFA, with a request to morals.
revert to her maiden name and surname in the
replacement passport. Virginia, relying on Article 370 of MIDDLE NAME
the Civil Code, contends that the use of the husband’s
Note: A middle name has practical or legal significance as it serves
surname by the wife is permissive rather than obligatory. to identify the maternal pedigree or filiation of a person and
Is Virginia correct? distinguishes him from others who may have the same given name
and surname as he has. Art. 364 of the Civil Code states that
A: No. A married woman has an option, but not a duty, to legitimate and legitimated children shall principally use the
use the surname of the husband in any of the ways surname of their father. Art. 174 of the Family Code gives
provided by Art. 370 of the Civil Code. However, R.A. 8239 legitimate children the right to bear the surnames of the father and
or the Philippine Passport Act of 1996 limits the instances mother, while illegitimate children, under Art. 176, as amended by
R.A. 9255, shall use the surname of their mother, unless their
when a married woman applicant may exercise the option
father recognizes their filiation, in which case, they may bear the
to revert to the use of her maiden name. These are death father's surname. In the case of these children, their registration in
of husband, divorce, annulment, and declaration of nullity the civil registry requires that their middle names be indicated
of marriage. therein, apart of course from their given names and surnames. (In
re: Petition for Change of Name and/or Correction of Entry in the
Civil Registry of Julian Lin Carulasan Wang, 454 SCRA 155)

under the law as the legitimate child of Aimee and her
Q: Honorato filed a petition to adopt his minor illegitimate husband. This filiation may be impugned only by the
child Stephanie. Stephanie has been using her mother's husband. To correct the status of Gianna in her birth
middle name and surname. certificate from “legitimate child of Andy and Aimee” to
“illegitimate child of Andy and Aimee” will amount to
He prayed that Stephanie's middle name be changed from indirectly impugning her filiation as the child of Aimee’s
"Astorga" to "Garcia," which is her mother's surname and husband in a proper action. What cannot be done directly
that her surname "Garcia" be changed to "Catindig," cannot be done indirectly.
which is his surname. This the trial court denied. Was the
trial court correct in denying Honorato’s request for b. Change her surname from that of Andy’s to Aimee’s
Stephanie’s use of her mother’s surname as her middle maiden surname?
name?
A: A judicial action to change the surname of Gianna from
A: No. The name of an individual has two parts – the given the surname of Andy to the maiden surname of Aimee is
name or proper name and the surname or family name. The also not allowed. Gianna, being presumed to be the
given name may be freely selected by the parents for the legitimate child of Aimee’s husband is required by law to be
child, but the surname to which the child is entitled is fixed registered under the surname of Aimee’s husband. While it
by law. The Civil Code (Arts. 364 to 380) is silent as to the is true that Gianna’s registered surname is erroneous, a
use of a middle name. Even Art. 176 of the FC, as amended judicial action for correction of entry to change the
by R.A. 9255 (An Act Allowing Illegitimate Children to surname of Gianna to that of Aimee’s maiden surname will
Use the Surname of Their Father) is silent as to what also be erroneous. A judicial action to correct an entry in
middle name a child may use. the birth certificate is allowed to correct an error and not to
commit another error.
An adopted child is entitled to all the rights provided by law
to a legitimate child without discrimination of any kind, Alternative Answers: It may be noted that the problems
including the right to bear the surname of her father and does not show whether Gianna was born while Aimee was
her mother. As she had become a legitimate child on living with her ex-husband. Neither does it show who filed
account of her adoption, it follows that Stephanie is the judicial action to correct the entries.
entitled to utilize the surname of her father, Honorato
Catindig, and that of her mother, Gemma Garcia. If the problem is intended only for purpose of determining
whether factual changes are in order, then the answers are:
Since there is no law prohibiting an illegitimate child
adopted by her natural father, like Stephanie, to use, as a. A change from “legitimate” to “illegitimate” is
middle name her mother's surname, the High Court found proper upon proof of lack of marriage between
no reason why she should not be allowed to do so. Andy and Aimee.
Note: The Supreme Court, in granting the petition, predicated its b. If the child is considered illegitimate, then she
ruling upon the statutory principle that adoption statutes, being should follow the surname of her mother.
humane and salutary, should be liberally construed to carry out the
beneficent purposes of adoption. The modern trend is to consider
Q: Instead of a judicial action, can administrative
adoption not merely as an act to establish a relationship of
paternity and filiation, but also as an act which endows a child with proceedings be brought for the purpose of making the
legitimate status. (In the Matter of the Adoption of Stephanie above corrections?
Nathy Astorga Garcia, G.R. No. 148311. March 31, 2005)
A: Under R.A. 9048, only typographical errors are allowed
Q: Giana was born to Andy and Aimee, who at the time of to be corrected administratively. The change of status from
Giana’s birth were not married to each other. While Andy legitimate to illegitimate is not a typographical error and
was single at that time, Aimee was still in the process of even assuming that it is, its administrative correction is not
securing a judicial declaration of nullity on her marriage to allowed under R.A. 9048. Typographical errors involving
her ex-husband. Gianna’s birth certificate, which was status, age, citizenship, and gender are expressly excluded
signed by both Andy and Aimee, registered the status of from what may be corrected administratively.
Gianna as “legitimate”, her surname carrying that of
Andy’s, and that her parents were married to each other. The change of the surname is also not allowed
Can a judicial action for correction of entries in Gianna’s administratively. R.A. 9048 provides for an administrative
birth certificate be successfully maintained to: procedure for change of first name only and not for change
of surname.
a. Change her status from “legitimate” to “illegitimate”;
and Q: Assuming that Aimee is successful in declaring her
former marriage void, and Andy and Aimee subsequently
A: A judicial action cannot be maintained to change the married each other, would Gianna be legitimated (2008
status of Gianna from “legitimate” to “illegitimate” child of Bar Question)?
Andy and Aimee. While it is true that Gianna is the
biological daughter of Andy and Aimee conceived and born A: No, Gianna will not be legitimated. While the court may
without marriage between them, Gianna is presumed, have declared the marriage void ab initio and, therefore, no

CIVIL LAW
marriage took place in the eyes of the law, Gianna will still
not be legitimated. This is because at the time she was A: They may petition the Court for the appointment of a
conceived and born her biological parents could not have representative to represent the absentee in all that may be
validly married each other. For their marriage to be valid, necessary.
the court must first declare the first marriage null and void.
In the problem, Gianna was conceived and born before the Q: What is the duty of the Court after appointing the
court has decreed the nullity of her mother’s previous representative?
marriage.
A: The Court shall:
Note: The word "principally" as used in the codal provision is not 1. Take the necessary measures to safeguard the
equivalent to "exclusively" so that there is no legal obstacle if a rights and interests of the absentee.
legitimate or legitimated child should choose to use the surname of 2. Specify the powers, obligations, and
its mother to which it is equally entitled. If the use of the mother’s
remuneration of the representative.
surname is since childhood and the child has been using it already
in various records, then there is an ample justification for the 3. Regulate the powers, obligations and
continuation of the use of the mother’s surname. It is therefore, remuneration according to the circumstances by
not whimsical but on the contrary is based on a solid and the rules concerning guardians.
reasonable ground, i.e. to avoid confusion. (Alfon v. Republic, G.R
No. L-51201, May 29, 1980) Q: What is the order of preference in the appointment of a
representative?
ABSENCE
A:
PROVISIONAL MEASURES IN CASE OF ABSENCE 1. Spouse present, except, when legally separated.
2. In the absence of spouse, any competent person.
Q: What is absence?
Note: The administrator of the absentee's property shall be
A: The special status of a person who has left his domicile appointed in accordance with the same order.
and thereafter his whereabouts and fate are unknown, it
being uncertain whether he is already dead or still alive. DECLARATION OF ABSENCE
(Olaguiviel v. Morada, 63 O.G. 4940)
Q: What are the requisites for a declaration of absence?
Q: What are the kinds of absence?
A:
A: 1. The absentee have disappeared from his domicile
1. Physical Absence 2. His whereabouts are not known
2. Legal Absence 3. he has been absent without any news for 2 years, if
nobody was left to administer his property or 5 years if
Q: What are the 3 Stages of Absence? somebody was left to administer such property
A: Q: When may absence be judicially declared?

1. Provisional Absence – when a person disappears from
his domicile his whereabouts being unknown, without A: It depends.
leaving an agent to administer his property 1. Where the absentee left no agent to administer
his property- after two (2) years without any
2. Declared Absence – when a person disappears from his news about the absentee or since receipt of the
domicile and 2 years thereafter have elapsed without any last news.
news about him or since the receipt of the last news, or 5 2. Where the absentee has left a person to
years have elapsed in case he left a person to administer his administer his property- after five (5) years.
property
Q: Who may ask for the declaration of absence?
3. Presumptive Death – the absentee is presumed dead
(Jurado, 2009) A:
1. Spouse present
Q: What is provisional absence? 2. Heirs instituted in a will
3. Relatives who may succeed by intestacy
A: 4. Persons who may have over the property of the
1. When a person disappears from his domicile absentee some right subordinated to the condition of
2. His whereabouts are unknown and: his death.
a. he did not leave any agent
b. he left an agent but the agent’s power has Q: When shall the judicial declaration of absence take
expired effect?
Q: What is the remedy of an interested party, a relative or A: Six (6) months after its publication in a newspaper of
a friend of the absentee to protect the latter's interest? general circulation.

Q: Who are presumed dead for all purposes including the
Note: A judicial declaration of absence is necessary fpr interested division of estate among heirs in case of extraordinary
persons o be able to rotect their rights, interests and benefits in presumption of death?
connection with the person who has disappeared. It is also
necessary to protect the interest of the absentee. (Sta. Maria, Jr.,
A: VAD
Persons and Family Relations Law)
1. Person on board a Vessel lost during a sea
ADMINISTRATION OF THE PROPERTY OF THE ABSENTEE voyage, or an airplane which is missing, who has
not been heard of for four (4) years since the loss
Q: When shall the administration of the property of the of the vessel or airplane;
absentee cease? 2. Person in the Armed forces who has taken at in
war, and has been missing for four (4) years;
A: ADD 3. Person who has been in Danger of death under
1. When absentee Appears personally or by means other circumstances and his existence has not
of an agent. been known for four (4) years.
2. When Death of the absentee is proved and his
testate or intestate heirs appear. Q: When is the absentee presumed to have died under an
3. When a third person appears, showing by a extraordinary presumption?
proper Document that he has acquired the
absentee's property by purchase or other title. A: At the time of disappearance. i.e. when the calamity took
place.
PRESUMPTION OF DEATH
Q: May a petition for the declaration of presumptive
Q: What are the kinds of presumed death? death be the subject of a judicial declaration, if it is the
only question upon which a competent court has to pass?
A:
1. Ordinary presumption- ordinary absence; absentee A: No. Under the NCC, the presumption of death is
disappears under normal conditions without danger or established by law and no court declaration is needed for
idea of death. the presumption to arise. Moreover, It is clear that a
2. Extraordinary presumption- qualified absence; judicial declaration that a person is presumptively dead,
disappearance with great probability of death. being a presumption juris tantum only, subject to contrary
proof, cannot become final. If a judicial decree declaring a
Q: What are the rules in ordinary presumption of death? person presumptively dead, cannot become final and
executory even after the lapse of the reglementary period
A: In case of: within which an appeal may be taken, then a petition for
1. Disappearance upon or before reaching the age such a declaration is useless, unnecessary, superfluous and
of seventy five (75) years: of no benefit to the petitioner.
a. After an absence of seven (7) years -the
absentee is presumed dead for all purposes Q: Juana married Arturo on January 1973. However,
except, succession. because the latter was unemployed the spouses
b. After an absence of ten (10) years - the constantly argued. Thus, Arturo left the conjugal dwelling
absentee is presumed dead for all purposes on October 1975. Years passed without any word from
including succession. Arturo. Juana didn’t hear any news of Arturo, his
2. Disappearance at the age of seventy six (76) years whereabouts or even if he was alive or not. Believing that
or older, after an absence of five (5) years -the Arturo was already dead, Juana married Dante on June
absentee is presumed dead for all purposes 1986. Subsequently, however, Dante's application for
including succession. naturalization filed with the United States Government
was denied because of the subsisting marriage between
Note: The word “absence” in the rule that a presumption of death Juana and Arturo. Hence, on March, 2007, Juana filed a
is raised by the “absence” of a person from his domicile when Petition for declaration of presumptive death of Arturo
unheard of for seven years, means that a person is not at the place with the RTC. The RTC dismissed the Petition on the
of his domicile and his actual residence is unknown, and it is for ground that Juana was not able to prove the existence of a
this reason that his existence is doubtful, and that, after seven well-grounded belief that her husband Arturo was already
years of such absence, his death is resumed. But removal alone is dead as required under Article 41 of the Family Code.
not enough. (Gorham v. Settegast, 98 SW 655, also cited by Sta.
Maria, Jr. Persons and Family Relations Law)
a. Was the RTC correct in dismissing the petition based on
Article 41 of the Family Code?
Q: When is the absentee presumed to have died under an
ordinary presumption?
A: No. Since the marriages were both celebrated under the
auspices of the Civil Code it is the Civil Code that applies to
A: At the end of the five, seven or ten year period, as the
this case not Art. 41 of the FC. Under the Civil Code, proof
case may be.
of well-founded belief is not required. Juana could not have
been expected to comply with the requirement of proof of
"well-founded belief" since the FC was not yet in effect at

CIVIL LAW
the time of her marriage to Dante. Moreover, the
enactment of the FC in 1988 does not change this
conclusion. The FC shall have no retroactive effect if it
impairs vested rights. To retroactively apply the provisions
of the FC requiring Juana to exhibit "well-founded belief"
will, ultimately, result in the invalidation of her second
marriage, which was valid at the time it was celebrated.
Such a situation would be untenable and would go against
the objectives that the Family Code wishes to achieve.
b. Will the petition for declaration of presumptive death,

therefore, prosper?
A: No. Under the NCC, the presumption of death is

established by law and no court declaration is needed for
the presumption to arise. For the purposes of the civil
marriage law, Art. 83 of the Civil Code, it is not necessary to
have the former spouse judicially declared an absentee.
The law only requires that the former spouse has been
absent for seven consecutive years at the time of the
second marriage, that the spouse present does not know
his or her former spouse to be living, that such former
spouse is generally reputed to be dead and the spouse
present so believes at the time of the celebration of the
marriage. Since death is presumed to have taken place by
the seventh year of absence, Arturo is to be presumed dead
starting October 1982.
Further, the presumption of death cannot be the subject of

court proceedings independent of the settlement of the
absentee’s estate. In case the presumption of death is
invoked independently of such an action or special
proceeding there is no right to be enforced nor is there a
remedy prayed for by the petitioner against her absent
husband. Neither is there a prayer for the final
determination of his right or status or for the ascertainment
of a particular fact, for the petition does not pray for a
declaration that the petitioner's husband is dead, but
merely asks for a declaration that he be presumed dead
because he had been unheard from in seven years. In sum,
the petition for a declaration that the petitioner's husband
is presumptively dead, even if judicially made, would not
improve the petitioner's situation, because such a
presumption is already established by law. (Valdez v.
Republic, G.R. No. 180863, September 8, 2009)
Q: Discuss the distinctions between declaration of presumptive death for purpose of contracting subsequent marriage and
opening succession and declaration of absence under Rules of Court.
A:
DECLARATION OF PRESUMPTIVE DEATH FOR PURPOSE OF: DECLARATION OF ABSENCE
OPENING OF SUCCESSION CONTRACTING SUBSEQUENT MARRIAGE
Applicable laws
Arts. 390-396, Civil Code Arts. 41-44, Family Code Rule 107, Rules of Court
Who may file petition
1. Spouse present;
2. Heirs instituted in the will;
3. Relatives who will succeed by
Absentee’s co-heirs, heirs, assigns,
Spouse present intestacy; or
representative or successors-in-interest
4. Those who have over the property of
the absentee some right
subordinated to the condition of his

death. (Sec. 2, Rule 107)

Purpose of petition
It is to appoint an administrator over the
For the purpose of contracting properties of the absentee. This is
To open succession
subsequent marriage by spouse present proper only where the absentee has
properties to be administered
When to file petition
GR: 4 consecutive years absence of
spouse – and the spouse present has a After 2 years:
well-founded belief that the absent 1. From his disappearance and
GR: Absence of ten years.
spouse was already dead without any news about the
absentee; or
XPN: If he disappeared after the age of
XPN: 2 consecutive years absence of 2. Of the last news about the
seventy-five years, an absence of five
spouse – In case of disappearance where absentee.
years shall be sufficient in order that his
there is danger of death under the
succession may be opened
circumstances set forth in the provisions After 5 years: If he left an administrator
of Article 391 of the Civil Code (Art. 41, of his property. (Sec. 2)
FC)
Effect of reappearance
It does not automatically terminate the
subsequent marriage. To cause the
termination of the subsequent marriage,
the reappearance must be made in an
If the absentee appears, or without affidavit of reappearance and the
appearing his existence is proved, he recording of a sworn statement of the
shall recover his property in the fact and circumstances of such The trustee or administrator shall cease
condition in which it may be found, and reappearance in the civil registry. in the performance of his office, and the
the price of any property that may have property shall be placed at the disposal
been alienated or the property acquired If, however, there was previous of those who may have a right thereto.
therewith; but he cannot claim either judgment annulling or declaring the prior
fruits or rents. (Art. 392, Civil Code) marriage void, then the reappearance of
the absent spouse, the execution of the
affidavit, and the recording of the sworn
statement shall not result to the
termination of the subsequent marriage.
CIVIL REGISTRAR his being legitimate or illegitimate, or his being married or

not.
ARTICLE 407-413
Q: What are the acts authorized to be entered in the civil
Q: What is the civil register? register?
A: Refers to the various registry books and related A:

certificates and documents kept in the archives of the local 1. Legitimation
civil registry offices, Philippine Consulate, and of the Office 2. Acknowledgment of illegitimate children
of the Civil Registrar General. 3. Naturalization
Q: What shall be recorded in the civil register? Q: What are the events authorized to be entered in the
civil register?
A: The following, concerning the civil status of persons:
1. Acts A:
2. Events 1. Birth
3. Judicial decrees 2. Marriages
3. Naturalization
Q: What is civil status? 4. Death
A: The circumstances affecting the legal situation or sum Q: What are the judicial decrees authorized to be entered
total of capacities or incapacities of a person in view of his in the civil register?
age, nationality and family membership (Beduya v.
Republic, G.R. L-71639, May 29, 1964). It also includes all A:
his personal qualities and relations, more or less permanent 1. Legal separation
in nature, not ordinarily terminable at his own will, such as 2. Annulments of marriage

CIVIL LAW
3. Declarations of nullity of marriage his first name Zirxthoussous to "Jesus." His full name now
4. Adoption reads "Jesus delos Santos."
5. Naturalization
6. Loss or recovery of citizenship Jesus delos Santos moved to General Santos City to work
7. Civil interdiction in a multi-national company. There, he fell in love and
8. Judicial determination of filiation married Mary Grace delos Santos. She requested him to
9. Changes of name (Silverio v. Republic, G.R. No. 174689, have his first name changed because his new name "Jesus
October 22, 2007) delos Santos" is the same name as that of her father who
abandoned her family and became a notorious drug lord.
Q: What is the nature of the books making up the civil She wanted to forget him. Hence, Jesus filed another
register and the documents relating thereto? petition with the Office of the Local Civil Registrar to
change his first name to "Roberto." He claimed that the
A: The books and documents shall be considered public change is warranted because it will eradicate all vestiges
documents and shall be prima facie evidence of the facts of the infamy of Mary Grace's father. Will the petition for
therein contained. change of name of Jesus delos Santos to Roberto delos
Santos under Republic Act No. 9048 prosper? (2006 Bar
Note: Applications for delayed registration of birth go through a Question)
rigorous process. The books making up the civil register are
considered public documents and as a public document, a A: No, under the law, Jesus may only change his name
registered certificate of live birth enjoys the presumption of
once. In addition, the petition for change of name may be
validity (Nieves Estares Baldos, substituted by Francisco Baldos and
Martin Baldos v. Court of Appeals and Reynaldo Pillazar a.k.a. denied on the following grounds:
Reynaldo Estares Baldos, G.R. No. 170645, July 9, 2010). 1. Jesus is neither ridiculous, nor tainted with
dishonor nor extremely difficult to write or
R.A. 9048 pronounce.
2. There is no confusion to be avoided or created
Q: When did R.A. 9048 take effect? with the use of the registered first name or
nickname of the petitioner.
A: March 22, 2001 3. The petition involves the same entry in the same
document, which was previously corrected or
Q: What is the rule with regard to changing or correction changed under the Rules and Regulations
of entries in the civil register? Implementing RA 9048.
A: GR: No entry in a civil register shall be changed or RULE 108, RULES OF COURT
corrected without a judicial order.
Q: May clerical or typographical errors be corrected under
XPNs: Rule 108 of the Rules of Court?
1. Clerical or typographical errors and
2. Change of first name or nickname which can be A: No. The correction or change of clerical or typographical
corrected or changed administratively by the errors can now be made through administrative
concerned city or municipal civil registrar or proceedings and without the need for a judicial order. In
consul general in accordance with the provisions effect, RA 9048 removed from the ambit of Rule 108 of the
of RA 9048 (Clerical Error Law). Rules of Court the correction of such errors. Rule 108 now
applies only to substantial changes and corrections in
Q: What is a clerical or typographical error? entries in the civil register. (Silverio v. Republic, G.R. No.
174689, October 22, 2007)
A: Refers to a mistake committed in the performance of
clerical work in writing , copying, transcribing or typing an Q: What is a first name?
entry in the civil register that is harmless and innocuous,
such as misspelled name or misspelled place of birth or the A: Refers to a name or nickname given to a person which
like, which is visible to the eyes or obvious to the may consist of one or more names in addition to the middle
understanding, and can be corrected or changed only by and last names.
reference to other existing record or records: Provided, that
no correction must involve the change of , nationality, age, Q: John Lloyd Cruzada filed a petition for the change of
status or sex of the petitioner. (Section 2(c), RA 9048) his first name and sex in his birth certificate in the RTC. He
alleged that his name was registered as “John Lloyd
Q: Zirxthoussous delos Santos filed a petition for change Cruzada” in his certificate of live birth. His sex was
of name with the Office of the Civil Registrar of registered as “male”. Further, he alleged that he is a male
Mandaluyong City under the administrative proceeding transsexual. Prior to filing the petition, he underwent sex
provided in RA No. 9048. He alleged that his first name reassignment surgery Thailand. Thus, he seeks to have his
sounds ridiculous and is extremely difficult to spell and name in his birth certificate changed from “John Lloyd” to
pronounce. After complying with the requirements of the “Joanna,” and his sex from “male” to “female” on the
law, the Civil Registrar granted his petition and changed ground of sex reassignment pursuant to Articles 407 to

413 of the Civil Code, Rules 103 and 108 of the Rules of subsequently denied. Hence, the remedy and the proceedings
Court and RA 9048. regulating change of first name are primarily administrative in
1. May a person's first name be changed on the ground nature, not judicial (Silverio v. Republic, G.R. No. 174689, October
22, 2007).
of sex reassignment?
A: No. The State has an interest in the names borne by

individuals and entities for purposes of identification. A
change of name is a privilege, not a right. Petitions for
change of name are controlled by statutes. RA 9048 now
governs the change of first name. RA 9048 provides the
grounds for which change of first name may be allowed:
(1) The petitioner finds the first name or nickname to
be ridiculous, tainted with dishonor or extremely
difficult to write or pronounce;
(2) The new first name or nickname has been
habitually and continuously used by the
petitioner and he has been publicly known by that
first name or nickname in the community; or
(3) The change will avoid confusion.
RA 9048 does not sanction a change of first name on the

ground of sex reassignment. Rather than avoiding
confusion, changing petitioner’s first name for his declared
purpose may only create grave complications in the civil
registry and the public interest. Before a person can legally
change his given name, he must present proper or
reasonable cause or any compelling reason justifying such
change. In addition, he must show that he will be
prejudiced by the use of his true and official name. In this
case, he failed to show, or even allege, any prejudice that
he might suffer as a result of using his true and official
name.
2. May a person's sex as indicated in his certificate of

birth be changed on the ground of sex reassignment?
A: No. Under RA 9048, a correction in the civil registry

involving the change of sex is not a mere clerical or
typographical error. It is a substantial change for which the
applicable procedure is Rule 108 of the Rules of Court. The
entries correctable under Rule 108 of the Rules of Court are
those provided in Arts. 407 and 408 of the NCC. These acts,
events and judicial decrees provided in Arts. 407 and 408 of
the NCC produce legal consequences that touch upon the
legal capacity, status and nationality of a person. Their
effects are expressly sanctioned by the laws. In contrast,
sex reassignment is not among those acts or events
mentioned in Art. 407. Neither is it recognized nor even
mentioned by any law, expressly or impliedly. A person’s
sex is an essential factor in marriage and family relations. It
is a part of a person’s legal capacity and civil status. In this
connection, Art. 413 of the NCC provides that all other
matters pertaining to the registration of civil status shall be
governed by special laws. But there is no such special law in
the Philippines governing sex reassignment and its effects
(Silverio v. Republic, G.R. No. 174689, October 22, 2007).
Note: The jurisdiction over applications for change of first name is

now primarily lodged with the city or municipal civil registrar or
consul general concerned. The intent and effect of the law is to
exclude the change of first name from the coverage of Rules 103
(Change of Name) and 108 (Cancellation or Correction of Entries in
the Civil Registry) of the Rules of Court, until and unless an
administrative petition for change of name is first filed and

CIVIL LAW
PROPERTY respiratory functions or the irreversible cessation of all functions of
the entire brain, including the brain system.) (Sec. 2[j], R.A. 7170,
CHARACTERISTICS as amended)
CLASSIFICATION OF PROPERTY
Q: What is property?
Q: What are the classifications of property?
A: It is an object or a right which is appropriated or
susceptible of appropriation by man, with capacity to A:
satisfy human wants and needs (Pineda, 1999) 1. As to mobility
a. Immovable or real property
It is any object which is, or may be, appropriated. (Art. 414) b. Movable or personal property
2. As to ownership
Q: What are the requisites for a thing to be considered as a. Public dominion
property? b. Private ownership
3. As to alienability
A: USA a. Alienable
1. Utility – capacity to satisfy human wants b. Inalienable
2. Substantivity/ Individuality – It has a separate and 4. As to individuality
autonomous existence. It can exist by itself and a. Specific property
not merely as a part of a whole. (Paras, Civil Code b. Generic property
of the Philippines, vol. 2, 2008 ed.) 5. As to susceptibility to touch
3. Appropriability – susceptibility to a. Tangible
ownership/possession, even if not yet actually b. Intangible
appropriated 6. As to susceptibility to substitution
a. Fungible
Q: What properties are not susceptible of appropriation? b. Non fungible
7. As to accession
A:
a. Principal
1. Common things (res communes) – Those properties
b. Accessory
belonging to everyone. While in particular no one
8. As to existence
owns common property, still in another sense, res
a. Existing or present property (res existentes)
communes are really owned by everybody in that their
b. Future property (res futurae)
use and enjoyment are given to all of mankind.
9. As to consumability
Examples: air, wind, sunlight. (Paras, Civil Code of the
a. Consumable
Philippines, vol. 2, 2008 ed.)
b. Non-consumable
10. As to divisibility
XPN: Those that may be appropriated under certain
a. Divisible
conditions in a limited way.
b. Indivisible
e.g. Electricity
HIDDEN TREASURE
2. Not susceptible due to physical impossibility
e.g. Sun Q: What is the concept of hidden treasure?
3. Not susceptible due to legal impossibility A: Any hidden and unknown deposit of money, jewelry or
e.g. Human body other precious objects, the lawful ownership of which does
not appear. (Art 439)
Q: Is the human body a real or personal property?
Q: What is the meaning of “other precious objects”?
A: The human body, whether alive or dead, is neither real
nor personal property. It is not even property at all, in that
A: Under the ejusdem generis rule, the phrase should be
it generally cannot be appropriated.
understood as being similar to money or jewelry.
While a human being is alive, he cannot, as such, be the
Q: Is oil or gold considered as hidden treasure?
object of a contract, for he is considered outside the
commerce of man. He may donate part of his blood, may
A: No, these are natural resources. The Regalian Doctrine
even sell part of his hair, but he cannot sell his body (Paras,
applies and not the provisions on hidden treasure.
Civil Code of the Philippines, vol. 2, 2008).
Note: Under the R.A. 7170 or the Organ Donation Act of 1991, Q: What is the rule regarding discovery of hidden
donation of all or a part of a human body may only occur after a treasure?
person’s “death” (i.e., the irreversible cessation of circulatory and
A: GR: If the finder is the owner of the land, building, or
other property where it is found, the entire hidden treasure
belongs to him.

PROPERTY
The vault of the Banco de las Islas Filipinas has been buried
XPN: If the finder is not the owner or is a stranger for about a century and the Bank of the Philippine Islands
(includes the lessee or usufructuary), he is entitled to ½ cannot succeed by inheritance to the property of Banco de
thereof. (Art 566) las Islas Filipinas. The ownership of the vault, together with
the notes and coins can now legally be considered as
Q: What is the effect if the finder is married? hidden treasure because its ownership is no longer
apparent. The contractor, Adams, is not a trespasser and
A: If the finder is married he or she gets one half of the therefore entitled to one-half of the hidden treasure and
treasure or its value his or her spouse is entitled to share Blas as owner of the property, is entitled the other half (Art.
one-half of that share it being a conjugal property. (Art. 438). Since the notes and coins have historical value, the
117, par. 4, FC) government may acquire them at their just price which in
turn will be divided equally between Adam and Blas (Art.
Q: When is the finder entitled to any share in the hidden 438, par.3)
treasure?
Alternative Answer: The Banco de las Islas Filipinas is the
A: Requisites: ACTA owner of the vault. The finder and the owner of the land
1. Discovery was made on the property of Another, cannot share in the notes and coins, because they are not
or of the State or any of its political subdivisions; buried treasure under the law, as the ownership is known.
2. Made by Chance; and Although under Art. 720 of the NCC the finder shall be
3. He is not a Trespasser or Agent of the landowner. given a reward of one-tenth of the price of the thing found,
(Art. 438 par. 2) as a lost movable, on the principle of quasi-contract.
Note: If the things found be of interest to science or the arts, the However, the notes and coins may have become res nullius
State may acquire them at their just price, which shall be divided in
considering that Banco de las Islas Filipinas is no longer a
conformity with the rule stated. (Art. 438)
juridical person and has apparently given up looking for
Q: Is a trespasser who discovers hidden treasure on a land them and Adam, the first one to take possession with intent
owned by another entitled to any rights to such treasure? to possess shall become the sole owner.
A: A trespasser (one prohibited to enter, or not given the Q: Assuming that either or both Adam and Blas are
authority to enter) who discovers hidden treasure is not adjudged as owners, will the notes and coins be deemed
entitled to any share of the treasure. (Paras, Civil Code of part of their absolute community or conjugal partnership
the Philippines, p. 199, vol. 2, 2008) of gains with their respective spouses? (2008 Bar
Question)
Q: What is the meaning of “By Chance”?
A: Yes. The hidden treasure will be part of the absolute
A: The finder had no intention to search for the treasure. community or conjugal property, of the respective
There is no agreement between the owner of the property marriages. (Arts. 91, 93 & 106, FC)
and the finder for the search of the treasure.
Alternative Answer: It is not hidden treasure and therefore,
Q: Adam, a building contractor, was engaged by Blas to not part of the absolute or conjugal partnership of the
construct a house on a lot which he (Blas) owns. While spouses. But the finder of the lost movable, then his reward
digging on the lot in order to lay down the foundation of equivalent to one-tenth of the value of the vault’s contents,
the house, Adam hit a very hard object. It turned out to be will form part of the conjugal partnership. If the
the vault of the old Banco de las Islas Filipinas. Using a government wants to acquire the notes and coins, it must
detonation device, Adam was able to open the vault expropriate them for public use as museum pieces and pay
containing old notes and coins which were in circulation just compensation.
during the Spanish era. While the notes and coins are no
longer legal tender, they were valued at P 100 million ACCESSION
because of their historical value and the coins’ silver and
nickel content. The following filed legal claims over the Q: What is the right of accession?
notes and coins:
A: That right of ownership of which an owner of a thing has
i) Adam, as finder; over the products of said thing (accession discreta), as well
ii) Blas, as owner of the property where they were as to all things inseparably attached or incorporated
found; thereto whether naturally or artificially (accession
iii) Bank of the Philippine Islands, as successor-in- continua). (Pineda Property, p.116, 2009 ed.)
interest of the owner of the vault; and
iv) The Philippine Government because of their
Q: Is accession a mode of acquiring ownership?
historical value.
Who owns the notes and coins?
A: No. It is not one of the modes enumerated under Art.
712 (different modes of acquiring ownership). It is therefore
A: Hidden treasure is money jewelry or other precious
safe to conclude that accession is not a mode of acquiring
objects the ownership of which does not appear (Art. 439).
ownership. The reason is simple: accession presupposes a

CIVIL LAW
previously existing ownership by the owner over the
principal. Fundamentally and in the last analysis, accession
is a right implicitly included in ownership, without which it
will have no basis or existence. (Paras, Civil Code of the
Philippines, p. 203, vol. 2, 2008)
Note: In general, the right to accession is automatic (ipso jure),

requiring no prior act on the part of the owner or principal.
FRUITS
Q: What is the rule on the owners right of accession with

respect to what is produced by his property?
A: To the owner belongs the:

1. Natural fruits;
2. Industrial fruits;
3. Civil fruits. (Art. 441)
Note: Natural fruits are the spontaneous products of the soil, and
the young and other products of animals. Industrial fruits are those
produced by lands of any kind through cultivation or labor. Civil
fruits are the rents of buildings, the price of leases of lands and
other property and the amount of perpetual or life annuities or
other similar income.
Q: What is the obligation of the owner who receives the

fruit from a third person?
A: He who receives the fruits has the obligation to pay the

expenses made by a third person in their production,
gathering and preservation.
Note: Only such as are manifest or born are considered as natural

or industrial fruits.
With respect to animals, it is sufficient that they are in the womb

of the mother, although unborn.

PROPERTY
ACCESSION; IMMOVABLE PROPERTY FRUITS
Q: What is the rule if the planter and owner of the land are different?
A: As to:
Gathered Fruits
Planter in GF Planter in BF
Reimbursed for expenses for production,
Planter Keeps fruits
gathering and preservation
No necessity to reimburse the planter of
Owner Gets fruits, pay planter expenses
expenses since he retains the fruits
Standing Crops
Planter in GF Planter in BF
Reimbursed for expenses, Loses everything; No right of
Planter
for production, gathering and preservation reimbursement
Owns fruits provided he pays planter
Owner expenses for production, gathering and Owns fruits
preservation
Q: Give the rule when the land owner is the builder, planter or sower.
A:
Land Owner and Builder, Planter or Sower Owner of Materials
Good Faith Good Faith
1. Remove materials if w/o injury to works,
Acquire building etc. after paying indemnity for value of materials. plantings or constructions; or
2. Receive indemnity for value of materials
Bad Faith Good Faith
1. Remove materials, w/ or w/o injury and be
Acquire building etc. after paying value of materials AND indemnity for indemnified for damages; or
damages, subject to the right of the owner of materials to remove 2. Be indemnified for value of materials and
damages
Good Faith Bad Faith
Lose materials w/o being indemnified and pay
Acquire w/o paying indemnity and right to damages
damages
Bad Faith Bad Faith
As though both acted in good faith
(in pari delicto)
Q: Give the rule when land owner is not builder, planter or sower.
A:
Land Owner Builder, Planter, Sower and Owner of Materials
LO has option to: In case land owner exercises (1), builder has the right to
1. Acquire improvements after paying indemnity which could either retain until indemnity is paid and cannot be required to
be: pay rent
a. Original costs of improvements
b. Increase in the value of the whole
2. Sell the land to builder and planter or collect rent from sower
unless the value of the land is considerably greater than the
building etc., in which case, the builder and planter shall pay rent
under the terms fixed by the parties
1. Option to: 1. Lose improvements without right to be indemnified
a. Acquire improvements without paying indemnity and collect
damages 2. Recover necessary expenses for preservation of land

CIVIL LAW
b. Sell the land to builder and planter or rent it to the sower,

and collect damages in both cases 3. Pay damages to land owner
c. Order the demolition of work or restoration to former
condition and collect damages in both cases
2. Pay necessary expenses for preservation

Bad Faith Good Faith
1. Land owner must indemnify builder, planter, sower for 1. Receive indemnity for improvements and receive
improvements and pay damages. damages; or
2. Remove them in any event and receive damages
2. Cannot compel Builder, planter and sower to buy land
Bad Faith Bad Faith

As though both acted in good faith
(in pari delicto)
Q: Give the rule when the land owner, builder, planter, sower and owner of materials are different persons.
A:
Land Owner Builder, Planter, Sower Owner of Materials
Good Faith Good Faith Good Faith
1. Acquire improvements and pay 1. Right of retention for necessary and 1. Collect value of materials primarily
indemnity to builder, planter, sower and useful expenses; from BPS and subsidiarily from LO if
be subsidiarily liable to owner of materials former is insolvent
for value of materials and
2. Remove only if w/o injury
2. Either 2. Pay value of materials to its owner
a. Sell the land to builder and planter
except if its value is considerably
more
b. Rent to sower
Good Faith Good Faith Bad Faith
1. Option to: 1. Right of retention for necessary and 1. Loses materials without right to
a. Acquire improvements and pay useful expenses. indemnity
indemnity to builder, planter, sower
b. 2. Keeps building etc. without indemnity 2. Pays damages
i. Sell to builder, planter except if the to owner of materials and collects
value of land is considerably more, damages from him
then, forced lease
ii. Rent to sower
2. Without subsidiary liability for cost of

materials
Good Faith Bad Faith Bad Faith

1. Option to:
1.Recover value from builder, planter,
a. Acquire improvements without
sower (in pari delicto)
paying indemnity and collect 1. Recover necessary expenses for land
damages preservation
2. If builder, planter, sower acquired
b. Demolition/ restore plus damages
improvements, remove materials if
c. Sell to builder, planter or collect rent 2. Loses improvements without right to
possible without injury
from sower plus damages indemnity from land owner unless the
latter sells the land
3. No action against land owner and may
2. Pay necessary expenses to builder,
be liable to the latter for damages
planter, sower
Bad Faith Bad Faith Bad Faith
Same as though both acted in good faith
(in pari delicto)

PROPERTY
Bad Faith Good Faith Good Faith

1. Remove materials if possible without
1. Acquires improvements after paying injury
1. Remove improvements
indemnity and damages to builder,
2. Be indemnified for damages in any
planter, sower, unless the latter decides to 2. Collect value of materials primarily
event
remove from builder, planter, sower, subsidiarily
from land owner
Bad Faith Bad Faith Good Faith
1. Acquire improvements after indemnity,
subsidiarily liable to owner of materials 1. Right of retention for necessary
expenses 1. Collect value of materials primarily
2. from builder, planter, sower, subsidiarily
a. Sell to builder, planter except if value 2. Pay value of materials to owner of from land owner
of land is more materials and pay him damages
b. Rent to sower
Good Faith Bad Faith Good Faith

1. Option to:
a. Acquire without paying indemnity
and collect damages 1. Recovers necessary expenses 1. Collect value of materials and damages
b. Sell to builder, planter or rent to from builder, planter, sower
sower and collect damages 2. Loses improvements without right of
2. Pay necessary expenses to builder, indemnity from land owner unless the 2. Remove materials in any event if
planter, sower latter sells the land builder, planter, sower
3. Subsidiarily liable to owner of
materials
Bad Faith Good Faith Bad Faith
Acquire improvements and pay 1. Indemnity for damages No indemnity, loses materials
indemnity and damages to builder,
planter, sower unless the latter decides 2. Remove improvements in any event
to remove
Q: When can the owner of the land appropriate as his own Q: Felix cultivated a parcel of land and planted sugar cane,
the works, sowing or planting of the builder, planter or believing it to be his own. When the crop was eight
sower? months old, and harvestable after two more months, a
resurvey of the land showed that it really belonged to
A: Only when the builder, planter, or sower believes that he Fred. What are the options available to Fred? (2000 Bar
has the right to so build, plant, or sow because he thinks he Question)
owns the land or believes himself to have a claim of title
(Morales v. CA, G.R. No. 12196, January28, 1998). A: As to the pending crops planted by Felix in good faith,
Fred has the option of allowing Felix to continue the
Note: Improvements made prior to the annotation of the notice of cultivation and to harvest the crops, or to continue the
lis pendens are deemed to have been made in good faith. After cultivation and harvest the crops himself. In the latter
such annotation, the builder can no longer invoke the rights of a
option, however, Felix shall have the right to a part of the
builder in good faith (Carrascoso v. CA, G.R. No. 123672,
December14, 2005).
expenses of cultivation and to a part of the net harvest,
both in proportion to the time of possession. (Art. 545)
Q: May the owner of the land choose neither to pay the
building nor to sell the land and demand the removal of Q: Because of confusion as to the boundaries of the
the structures and restoration of possession of the lot? adjoining lots that they bought from the same subdivision
Decide. company, X constructed a house on the adjoining lot of Y
in the honest belief that it is the land that he bought from
A: The owner has the option of paying the value of the the subdivision company.
building or selling the land. He cannot refuse either to pay
or sell and compel the owner of the building to remove it What are the respective rights of X and Y with respect to
from the land where it is erected. He is entitled to such X's house?
removal only when, after having chosen to sell the land, the
other party fails to pay for the same (Ignacio v. Hilario, 76 A: The rights of Y, as owner of the lot, and of X, as builder of
Phil 606, 1946). a house thereon, are governed by Art. 448 which grants to
Y the right to choose between two remedies: (a)
appropriate the house by indemnifying X for its value plus

CIVIL LAW
whatever necessary expenses the latter may have incurred Q: In good faith, Pedro constructed a five-door
for the preservation of the land, or (b) compel X to buy the commercial building on the land of Pablo who was also in
land if the price of the land is not considerably more than good faith. When Pablo discovered the construction, he
the value of the house. If it is, then X cannot be obliged to opted to appropriate the building by paying Pedro the cost
buy the land but he shall pay reasonable rent, and in case thereof. However, Pedro insists that he should be paid the
of disagreement, the court shall fix the terms of the lease. current market value of the building, which was much
higher because of inflation. (2000 Bar Question)
Suppose X was in good faith but Y knew that X was
constructing on his (Y's) land but simply kept quiet about 1. Who is correct, Pedro or Pablo?
it, thinking perhaps that he could get X's house later.
What are the respective rights of the parties over X's A: Pablo is correct. Under Art. 448 in relation to Art. 546,
house in this case? (1999 Bar Question) the builder in good faith is entitled to a refund of the
necessary and useful expenses incurred by him, or the
A: Since the lot owner Y is deemed to be in bad faith (Art. increase in value which the land may have acquired by
453), X as the party in good faith may (a) remove the house reason of the improvement, at the option of the
and demand indemnification for damages suffered by him, landowner. The builder is entitled to a refund of the
or (b) demand payment of the value of the house plus expenses he incurred, and not to the market value of the
reparation for damages (Art. 447, in relation to Art. 454). Y improvement.
continues as owner of the lot and becomes, under the
second option, owner of the house as well, after he pays Note: The case of Pecson v. CA, G.R. No. 115814, May 26, 1995 is
the sums demanded. not applicable.
Q: Pecson owned a commercial lot on which he built a 2. In the meantime that Pedro is not yet paid, who is
building. For failure to pay realty taxes, the lot was sold at entitled to the rentals of the building, Pedro or Pablo?
public auction to Nepomuceno, who in turn sold it to the
spouses Nuguid. The sale, however, does not include the A: Pablo is entitled to the rentals of the building. As the
building. The spouses subsequently moved for the owner of the land, Pablo is also the owner of the building
delivery of possession of the said lot and apartment. being an accession thereto. However, Pedro who is entitled
Pecson filed a motion to restore possession pending to retain the building is also entitled to retain the rentals.
determination of the value of the apartment. May Pecson He, however, shall apply the rentals to the indemnity
claim payment of rentals? payable to him after deducting reasonable cost of repair
and maintenance.
A: Yes, Pecson is entitled to rentals by virtue of his right of
retention over the apartment. The construction of the Q: What is the effect if the building built on the land
apartment was undertaken at the time when Pecson was owned by another is sold to pay for the land’s value?
still the owner of the lot. When the Nuguids became the
A: The builder becomes part-owner of the land.
uncontested owner of the lot, the apartment was already in
existence and occupied by tenants.
Q: When may the landowner compel the removal of the
building built on his land?
Art. 448 does not apply to cases where the owner of the
land is the builder but who later lost the land; not being
A: The landowner may not seek to compel the owner of the
applicable, the indemnity that should be paid to the buyer
building to remove the building from the land after refusing
must be the fair market value of the building and not just
to pay for the building or to sell the land. He is entitled to
the cost of construction thereof. To do otherwise would
such removal only when, after having chosen to sell the
unjustly enrich the new owner of the land.
land, the other party fails to pay for said land (Ignacio v.
Note: While the law aims to concentrate in one person the
Hilario, G.R. L-175, April 30, 1946).
ownership of the land and the improvements thereon in view of
the impracticability of creating a state of forced co-ownership, it Q: What is the rule when the land’s value is considerably
guards against unjust enrichment insofar as the good-faith more than the improvement?
builder’s improvements are concerned. The right of retention is
considered as one of the measures to protect builders in good A: The landowner cannot compel the builder to buy the
faith. land. In such event, a “forced lease” is created and the
court shall fix the terms thereof in case the parties disagree
Q: Pending complete reimbursement, may the spouses thereon (Depra v. Dumalo, No. L-57348, May 16, 1985).
Nuguid benefit from the improvement?
rd
Q: What is the rule when landowner sells the land to a 3
A: No. Since spouses Nuguid opted to appropriate the person who is in bad faith?
improvement for themselves when they applied for a writ
rd
of execution despite knowledge that the auction sale did A: Builder must go against the 3 person but if the latter
not include the apartment building, they could not benefit has paid the land owner, a case against such land owner
rd
from the lot’s improvement until they reimbursed the may still be filed by the builder and the 3 person may file a
rd
improver in full, based on the current market value of the 3 party complaint against land owner.
property (Pecson v. CA, G.R. No. 115814, May 26, 1995).

PROPERTY
Q: Does the land owner have the right of removal or XPN: He may remove the improvements even against
demolition? the will of the owner, provided, that no damage would
be caused to the property. (Art. 579)
A: GR: No.
Note: The usufructuary may introduce useful or luxurious
XPN: Option exercised was compulsory selling and improvements but is prohibited from altering the form and
builder failed to pay. substance of the property.
Q: What is the recourse left to the parties where the Q: What if the improvements cannot be removed without
builder fails to pay the value of the land? causing damage to the property?
A: While the Civil Code is silent on this point, guidance may A: The usufructuary may set off the improvements he may
be had from these decisions: have made on the property against any damage to the
1. In Miranda v. Fadullon, G.R. No. L-8220, October 29, same. (Art 580)
1955, the builder might be made to pay rental only,
leave things as they are, and assume the relation of
LAND ADJOINING RIVER BANKS
lessor and lessee;
2. In Ignacio v. Hilario, G.R. L-175, April 30, 1946, owner
ALLUVION
of the land may have the improvement removed; or
3. In Bernardo v. Bataclan, G.R. No. L-44606, November
Q: What is alluvium or alluvion?
28, 1938, the land and the improvement may be sold
in a public auction, applying the proceeds first to the
A: It is the gradual deposit of sediment by natural action of
payments of the value of the land, and the excess if
a current of fresh water (not sea water), the original
any, to be delivered to the owner of the house in
identity of the deposit being lost. Where it is by sea water,
payment thereof. (Filipinas College Inc. v. Timbang,
it belongs to the State. (Government of Philippine Islands v.
G.R. No. L-12812, September 29, 1959).
Cabangis, G.R. No. L-28379, March 27, 1929)
Q: Will the landowner upon demand for payment
Note: Art. 457 states “To the owners of the lands adjoining
automatically become the owner of the improvement for
the banks of the rivers belongs the accretion which they
failure of the builder to pay for the value of the land?
gradually receive from the effects of the current of the
waters.
A: No. There is nothing in Arts. 448 and 546 which would
justify the conclusion that upon failure of the builder to pay
Q: Distinguish accretion from alluvium?
the value of the land, when such is demanded by the
landowner, the land owner becomes automatically the A: Accretion is the process whereby the soil is deposited
owner of the improvement under Art. 445. while alluvium is the soil deposited.
Q: The Church, despite knowledge that its intended Q: What are the requisites of alluvium?
contract of sale with the National Housing Authority
(NHA) had not been perfected, proceeded to introduce A: GRA
improvements on the disputed land. On the other hand, 1. Deposit be Gradual and imperceptible
NHA knowingly granted the Church temporary use of the 2. Resulted from the effects of the current of the
subject properties and did not prevent the Church from water
making improvements thereon. Did the Church and NHA 3. The land where the accretion takes place is
act in bad faith? Adjacent to the banks of a river
A: Yes. The Church and the NHA, both acted in bad faith, Q: What is the effect if all the requisites are present?
hence, they shall be treated as if they were both in good
faith (National Housing Authority v. Grace Baptist Church, A: The riparian owner is automatically entitled to the
G.R. No. 156437, March 1, 2004). accretion.
USUFRUCTUARY Q: When does the alluvion start to become the property
of the riparian owner?
Q: What are the rights of the usufructuary over
improvements he introduced on the property held in A: From the time that the deposit created by the current of
usufruct? water becomes manifest. (Heirs of Navarro v. IAC, GR. No.
68166, February 12, 1997)
A: GR: The usufructuary is not entitled to indemnity for the
expenses he had incurred in the making of the Q: When does the rule on alluvion not apply?
improvements.
A: The rule does not apply to man-made or artificial
accretions to lands that adjoin canals or esteros or artificial

CIVIL LAW
drainage system (Ronquillo v. CA, G.R. No 43346, March 20, Note: The rule does not apply to temporary overflowing of
1991). the river.
Q: What if the deposits accumulate, not through the 4. There must be Abandonment by the owner of the bed.
effects of the current of the water, but because of the
constructions made by the owner purely for defensive Note: Abandonment pertains to the decision not to bring
back the river to the old bed (Reyes-Puno, p.53).
purposes against the damaging action of the water?
Q: What is the effect when the river bed is abandoned?
A: The deposits are still deemed to be alluvion and will
belong to the riparian owner.
A: River beds which are abandoned through the natural
change in the course of the waters ipso facto belong to the
Q: What if the deposit is brought about by sea water?
owners whose lands are occupied by the new course in
A: It belongs to the State and forms part of the public proportion to the area lost. However, the owners of the
domain. lands adjoining the old bed shall have the right to acquire
the same by paying the value thereof, which value shall not
Q: Must alluvial deposits be registered? exceed the value of the area occupied by the new bed. (Art
461)
A: Yes, though automatically it is owned by the riparian
owner (Heirs of Navarro v. IAC, G.R. No. 68166, February Note: The rule on abandoned river bed does not apply to cases
where the river simply dries up because there are no persons
12, 1997).
whose lands are occupied by the waters of the river.
Q: What if the riparian owner fails to register the deposits AVULSION

within the prescriptive period?
Q: What is avulsion?
A: Failure to register the alluvial deposit acquired by
accretion for a period of 50 years subjects said accretion to
A: It is the deposit of known (identifiable) portion of land
acquisition thru prescription by third persons (Reynante v.
detached from the property of another which is attached to
CA, G.R. No. 95907, Apr. 8, 1992).
the property of another as a result of the effect of the
Note: Registration under the Torrens System does not protect the current of a river, creek or torrent.
riparian owner against the diminution of the area of his registered
land through gradual changes in the course of an adjoining stream. Note: Art. 459 states that whenever the current of a river, creek, or
torrent segregates from an estate on its banks a known portion of
land and transfers it to another estate, the owner of the land to
Q: What are the reasons for granting a riparian owner the
which the segregated portion belonged retains the ownership of it,
right to alluvion deposited by a river? provided he removes it within 2 years.
A: Q: Distinguish alluvium from avulsion.

1. To compensate him for:
a. danger of loss that he suffers due to the location A:
of his land; and ALLUVIUM AVULSION
b. for the encumbrances and other easements on
his land Gradual and imperceptible Sudden or abrupt process
2 To promote the interests of agriculture as he is in
the best position to utilize the accretion. Soil cannot be identified Identifiable and verifiable
Belongs to the owner of Belongs to the owner from
CHANGE IN THE COURSE OF RIVER the property to which it is whose property it was
attached detached
Q: What happens when a river changes its course by Detachment followed by
natural causes and its bed is formed on a private estate? Merely an attachment
attachment
A: It becomes of public dominion whether it is navigable or Q: What are the requisites of avulsion?
floatable.
A: CAP
Q: What are the requisites? 1. Transfer is caused by the Current of a river, creek,
or torrent.
A: NAPA
2. Transfer is sudden or Abrupt
1. There must be a Natural change in the course of the
3. The Portion of the land transported is known or
waters of the river; otherwise, the bed may be the
identifiable.
subject of a State grant (Reyes-Puno, p.54)
2. The change must be Abrupt or sudden; Q: What if land from one tenement is transferred to
3. The change must be Permanent; another by forces of nature other than the river current?
A: By analogy, it can still be considered as an avulsion.

PROPERTY
Q: What is the rule on acquisition of titles over an possession is needed. (Jagualing v. CA, G.R. No. 94283,
avulsion? March 4, 1991)
A: GR: Original owner retains title. Note: There is no accession when islands are formed by the
branching of a river; the owner retains ownership of the isolated
XPNs: The owner must remove (not merely claim) the piece of land.
transported portion within 2 years to retain
ownership, otherwise, the land not removed shall BY OBJECT
belong to the owner of the land to which it has been
adjudicated in case of: REAL OR IMMOVABLE
1. Abandonment; or
2. Expiration of 2 years, whether the failure to Q: What are the categories of immovable property?
remove be voluntary or involuntary, and
irrespective of the area of the portion known A: Real Property by: NIDA
to have been transferred. 1. Nature – Those which cannot be carried from
place to place
ISLANDS 2. Incorporation – Those which are attached to an
immovable in a fixed manner and considered as
Q: What are the rules on ownership with regard to an integral part thereof, irrespective of its
formation of islands? ownership
3. Destination – Things placed in buildings or on
A: lands by the owner of the immovable or his agent
LOCATION OWNER in such a manner that it reveals the intention to
If formed on the sea attach them permanently thereto
4. Analogy – Classified by express provision of law.
W/in territorial waters State
Outside territorial waters First country to occupy IMMOVABLE BY NATURE & INCORPORATION
If formed on lakes or navigable/ floatable rivers
State Par. 1, Art. 415. Land, buildings, roads and constructions of
If formed on non-navigable/ floatable rivers all kinds adhered to the soil.
Nearer in margin to one Owner of nearer margin is
bank the sole owner Q: Are barong-barongs immovable property?
Island divided longitudinally
If equidistant A: No. They are not permanent structures but mere
in halves
superimpositions on land.
Q: Eduave is the owner of land forming part of an island in
a non-navigable river. Said land was eroded due to a Q: Where buildings are sold to be demolished
typhoon, destroying the bigger portion thereof and immediately, are the buildings immovable or movable?
improvements thereon. Due to the movements of the
river deposits on the part of the land that was not eroded, A: The sale involves movable property. What are really sold
the area was increased. Later, Eduave allowed Dodong to are the materials.
introduce improvements thereon and live there as a
caretaker. However, Dodong however later denied Q: What is the effect of demolition of a house?
Eduave’s claim of ownership so the latter filed action to
A: Once a house is demolished, its character as an
quiet title over the property. Who has a better right to
immovable ceases. This is because a house is classified as
the land?
an immovable property by reason of its adherence to the
soil on which it is built (Bicerra v. Teneza, G.R. No. L-16218,
A: Eduave. Clearly, the land in question is an island that
November 29, 1962).
appears in a non-floatable and non-navigable river, and it is
not disputed that Eduave is the owner of the parcel of land
Q: May a building be mortgaged apart from the land on
along the margin of the river and opposite the island.
which it was built?
Applying Art. 465, the island belongs to the owner of the
parcel of land nearer the margin. More accurately, because A: Yes. While it is true that a mortgage of land necessarily
the island is longer than the property of Eduave, he is includes, in the absence of stipulation of the improvements
deemed ipso jure the owner of that portion which thereon, buildings, still a building by itself may be
corresponds to the length of his property along the margin mortgaged apart from the land on which it has been built.
of the river. If however, the riparian owner fails to assert Such a mortgage would still be a real estate mortgage for
his claim thereof, the same may yield to the adverse the building would still be considered immovable property
possession of the third parties, as indeed even accretion to even if dealt with separately and apart from the land (Yee v.
land titled under the Torrens system must itself still be Strong Machinery Company, G.R. No. 11658, February15,
registered. Dodong thus may acquire said land by 1918).
acquisitive prescription. But here, Dodong’s possession
cannot be considered to be in good faith, so 30 years of

CIVIL LAW
Q: Can a building erected on a land belonging to another Q: What do you mean by “placed by the owner”?
be mortgaged?
A: The objects must be placed by the owner of the
A: Yes. A valid real estate mortgage can be constituted. Art. immovable and not necessarily the owner of the object.
415 of the New Civil Code mentions “buildings” separate
from land. This means that the building by itself is an Q: Distinguish Par. 3 from Par. 4.
immovable and may be subject of a REM (Prudential Bank
v. Panis, G.R. No. L-50008, August 31, 1987). A:
PAR. 3 PAR. 4
Q: Is the annotation or inscription of a deed of sale of real Cannot be separated from Can be separated from the
property in a chattel mortgage registry considered an the immovable without immovable without
inscription in the registry of real property? breaking or deterioration breaking or deterioration.
Must be placed by the
A: No. By its express terms, the Chattel Mortgage Law Need not be placed by the owner of the immovable, or
contemplates and makes provisions for mortgages of owner by his agent whether
personal property; and the sole purpose and object of the express or implied
chattel mortgage registry is to provide for the registry of Real property by
“Chattel mortgages,” that is to say, mortgages of personal Real property by
incorporation and
property executed in the manner and form prescribed in incorporation
destination
the statute. (Yee v. Strong Machinery Co, G.R. No. L-11658,
February 15, 1918) Par. 5, Art. 415. Machinery, receptacles, instruments or
implements intended by the owner of the tenement for an
Par. 2, Art. 415. Trees, plants and growing fruits, while industry or works which may be carried on in a building or
they are attached to the land or form an integral part of on a piece of land & which tend directly to meet the needs
an immovable. of the said industry or works.
Q: Are trees immovable or movable? Q: What are the requisites for machinery to be considered
real property?
A:
1. Real property by nature - if they are spontaneous A: COTE
products of the soil 1. The industry or work must be Carried on in a building
2. Real property by incorporation - If they have been or on a piece of land;
planted thru cultivation or labor 2. The machinery must:
a. Be placed by the Owner of the tenement or his
Note: The moment trees are detached or uprooted from the land it
agent;
is considered as personal property. However, in case of uprooted
timber, they are still not considered as personal property because
b. Tend directly to meet the needs of the said
timber is an integral part of the timber land. industry or work; and
c. Be Essential and principal to the industry or work,
IMMOVABLE BY INCORPORATION and not merely incidental thereto.
Par. 3, Art. 415. Everything attached to an immovable in a Q: Is machinery placed by a tenant or by a usufructuary
fixed manner, in such a way that it cannot be separated considered real property?
therefrom without breaking the material or deterioration
of the object. A: No. Since it is placed by a person having only a
temporary right, it does not become immobilized.
Q: What is res vinta?
Note: Where a tenant places the machinery under the express
provision of lease that it shall become a part of the land belonging
A: These are immovables by incorporation, which when to the owner upon the termination of the lease without
separated from the immovable, regain their condition as compensation to the lessee, the tenant acts as an agent of the
movable. owner and the immobilization of the machineries arises from the
act of the owner in giving by contract a permanent destination to
IMMOVABLE BY INCORPORATION & BY DESTINATION the machinery (Valdez v. Central Altagracia, 225 U.S. 58, 1912).
Q: How is the equipment of a transportation business

Par. 4, Art. 415. Statutes, reliefs, paintings or other classified?
objects for use or ornamentation, placed in buildings or
on lands by the owner of the immovable in such a A: A transportation business is not carried on in a building
manner that it reveals the intention to attach them or on a specified land. Hence, equipment destined only to
permanently to the tenements. repair or service a transportation business may not be
deemed real property, but personal property (Mindanao
Bus Co. v. City Assessor and Treasurer, G.R. No. L-17870,
September 29, 1962).

PROPERTY
Note: Machines must be essential and principal elements in the a. Is the platform movable or immovable property?
industry and must directly meet the needs of said industry. It does
not include movables which are merely incidentals, without which A: The platform is an immovable property by destination. It
the business can still continue or carry on their functions.
was intended by the owner to remain at a fixed place on a
river or coast. Art. 415 (9) of the NCC considers as real
Q: Are machineries bolted or cemented on real property
property “docks and structures which, though floating are
mortgaged considered an immovable property?
intended by their nature and object to remain at a fixed
A: No. The fact that machineries were bolted or cemented place on a river, lake, or coasts” (2007 Bar Question; Fels
on real property mortgaged does not make them ipso facto Energy, Inc. v. The Province of Batangas, G.R. No. 168557,
immovable under Art. 415 (3) and (5) as the parties intent February 16, 2007).
has to be looked into.
b. Are the equipment and living quarters movable or
Q: Can parties treat an immovable property by nature as a immovable property? (2007 Bar Question)
chattel?
A: With respect to the equipment, the same is real
A: Yes. Even if the properties appear to be immovable by property under paragraph 5 of Art. 415, NCC. It is intended
nature, nothing detracts the parties from treating them as to meet the needs of the industry being undertaken by
chattels to secure an obligation under the principle of MPC. The equipment partakes of the nature of the
estoppel (Tsai v. CA, G.R. No. 120098, October 2, 2001). immovable upon which it has been placed.
Q: What is the effect of temporary separation of movables The living quarters, if attached to the immovable platform
from the immovables to which they are attached? with permanence, becomes an immovable as well.
Permanence means they cannot be separated without
A: 2 views destroying the platform or the quarters. On the other hand,
1. They continue to be regarded as immovables. if the attachment is not permanent, or not merely
2. Fact of separation determines the condition of superimposed on the platform, then the living quarters are
the objects thus recovering their condition as movable property.
movables.
c. Are the trees, plants and flowers immovable or movable
Q: Petitioners contend that the machines that were the property? (2007 Bar Question)
subjects of the Writ of Seizure were placed in the factory
built on their own land. Indisputably, they were essential A: The trees, plants and flowers are also immovable, having
and principal elements of their chocolate making industry. been “planted” in the garden area, under Art. 415 (2) which
Hence, although each of them was movable or personal provides that “Trees, plants and growing fruits, while they
property on its own, all of them have become immobilized are attached to the land or form an integral part of the
by destination because they are essential and principal immovable” are likewise immovable property.
elements in the industry. Petitioners argue that said Q: The City Assessor sought to impose realty tax on steel
machines are real properties pursuant to Art. 415 (5) of towers of MERALCO. The taxes were paid under protest,
the NCC and are not, therefore, the proper subjects of a MERALCO contending that the towers were exempt from
Writ of Seizure. However, the lease agreement entered taxation and that they were personal and not real
into by the petitioners provides that the machines in properties. Decide.
question are to be considered as personal property. How
should the machines be classified? A: The towers are personal properties. They are not
buildings adhered to the soil (Art. 415 par. 1); they are not
A: That machines should be deemed personal property attached to an immovable in a fixed manner and they can
pursuant to the Lease Agreement—is good only insofar as be separated without substantial damage or deterioration,
the contracting persons are concerned. Hence, while the and they are not machineries intended for works on the
parties are bound by the Lease Agreement, third persons land (Board of Assessment Appeals v. Meralco, G.R. No. L-
acting in good faith are not affected by its stipulation 15334, January 31, 1964).
characterizing the subject machinery as personal (Serg’s
Products, Inc. v. PCI Leasing and Finance, Inc., 338 SCRA PERSONAL OR MOVABLE
504, August 22, 2000).
Q: What are movable properties?
Q: Manila Petroleum Co. (MPC) owned and operated a
petroleum operation facility off the coast of Manila. The A: SOFTSS
facility was located on a floating platform made of wood 1. Movables Susceptible of appropriation which are not
and metal, upon which was permanently attached the included in Art. 415;
heavy equipment for the petroleum operations and living 2. Real property which by any Special provision of law
quarters of the crew. The floating platform likewise considers as personalty
contained a garden area, where trees, plants and flowers e.g. growing crops under the Chattel Mortgage Law.
were painted. The platform was tethered to a ship, the 3. Forces of nature which are brought under the control
MV101, which was anchored to a seabed. of science

CIVIL LAW
e.g. electricity generated by electric powers, solar light Q: What are the characteristics of properties of public
for batteries power. dominion?
4. In general, all things which can be Transported from
place to place without impairment of the real property A: ULEP- ROB
to which they are fixed; 1. In general, they can be Used by everybody;
5. Obligations and actions which have for their object 2. Cannot be Levied upon by execution or attachment;
movables or demandable sums; and 3. May Either be real or personal property;
6. Shares of stock of agricultural, commercial and 4. Cannot be acquired by Prescription;
industrial entities, although they have real estate. (Art. 5. Cannot be Registered under Land Registration Law and
416) be the subject of Torrens Title;
6. Outside the commerce of man – cannot be alienated or
Q: State the tests to determine whether a property is a leased or be subject of any contract;
movable property. 7. Cannot be Burdened by voluntary easement.
A: MES Q: How are lands of public dominion classified?

1. Test of Exclusion – Everything not included in Art. 415,
e.g. ships or vessels or interest in a business A:
2. By reason of a Special law – Immovable by nature but 1. Agricultural;
movable for the purpose of the special law, e.g. 2. Forest or timber;
Growing crops for purposes of the Chattel Mortgage 3. Mineral lands;
Law 4. National Parks. (Art. XIV, Sec. 10, Philippine
3. Test of Mobility – If the property is capable of being Constitution)
carried from place to place without injuring the real
property to which it may in the meantime be attached Q: Who has the authority to classify or reclassify public
lands?
BY OWNER
A: As provided in the Public Land Act, the classification or
Q: How are properties classified according to ownership? reclassification of public lands into alienable or disposable,
mineral or forest lands is a prerogative of the executive
A: department of the government and not of the courts.
1. Public dominion - Property owned by the State (or its
political subdivisions) in its public or sovereign capacity Q: Can property of public dominion be converted to
and intended for public use patrimonial property?
2. Private ownership – Property owned by:
a. Private persons, either individually or A: Yes, through a formal declaration by the executive or
collectively; and legislative body that the property is no longer needed for
b. The State in its private capacity (patrimonial public use or for public service.
property)
c. The LGUs: Q: Do LGUs have the power to withdraw a public street
i. Property for public use – roads, streets, from public use?
squares, fountains, public waters,
promenades and public works for public A: LGU cannot withdraw a public street from public use,
service paid for by the LGUs unless it has been granted such authority by law (Dacanay
ii. Patrimonial Property – all other properties v. Asistio Jr., G.R. No. 93654, May 6, 1992).
possessed by LGUs without prejudice to
special laws. (Art. 419) PRIVATE OWNERSHIP
Note: Sacred and religious objects are considered outside the Q: What are properties in private ownership of private
commerce of man. They are neither public nor private party. persons or entities?
PUBLIC DOMINION A: All properties not belonging to the State or its political
subdivision are properties of private ownership pertaining
Q: What are the kinds of property of public dominion? to private persons, either individually or collectively.
A: Properties which are: USD Q: What is the patrimonial property of the State?
1. For public Use;
2. Intended for public Service and not for public use; and A: It is the property not devoted to public use, public
3. For the Development of the national wealth. (Art. 420) service, or the development of the national wealth. It is
intended rather for the attainment of the economic ends of
the State, that is, for subsistence. It is owned by the State in
its private or proprietary capacity.

PROPERTY
Note: It may be disposed of by the State in the same manner that Q: How are properties classified according to susceptibility
private individuals dispose of their own property subject, however, to substitution?
to administrative laws and regulations.
A:
Q: Where do properties for public service and properties 1. Fungible property – That property which belongs to a
for the development of national wealth fall? common genus permitting its substitution
2. Non- fungible property – That property which is
A: Public service – depends on who pays for the service.
specified and not subject to substitution
If paid for by the political subdivision, public; if for profit,
Note: As to whether a property is fungible or non-fungible is
patrimonial. determined by the agreement of the parties and not on the
consumability of the thing.
National wealth – still property for public use under the
regalian doctrine OWNERSHIP
Q: Are canals constructed by private persons within RIGHTS IN GENERAL

private lands are of public dominion or of private
ownership? Q: What is ownership?
A: Art. 420 states that canals constructed by the State are A: The juridical relation of a person over a thing by virtue of
of public ownership; conversely, canals constructed by which said person has the exclusive power or authority to
private persons within private lands are of private receive all the benefits and advantages arising from said
ownership (Santos v. Moreno, G.R. No. L-15829, thing, save those restricted by law or the recognized rights
December4, 1967). of others.
Q: The City of Cebu obtained a loan which was to be paid Q: What are the kinds of ownership?
with its own funds. Part of the proceeds of this loan was
used to fund the construction of the City’s sewage system. A: FNSC
NAWASA sought to expropriate the sewage system. This 1. Full ownership – Includes all the rights of an owner;
was opposed with the arguments that there was no
payment of just compensation; NAWASA offered Note: Naked ownership + Usufruct
unliquidated assets and liabilities. NAWASA averred, as an
alternative course of action, that the property is one for 2. Naked ownership – Ownership where the rights to the
public use and under the control of the legislature. Decide use and to the fruits have been denied;
whether the property is patrimonial property of the city or
property for public use. Note: Full ownership – Usufruct
A: The property is patrimonial and not subject to legislative 3. Sole ownership – Ownership is vested in only one
control. It is property of the city, purchased with private person;
funds and not devoted to public use (it is for profit). It is
therefore patrimonial under the Civil Code. Nor can the 4. Co-ownership– Ownership is vested in 2 or more
system be considered “public works for public service” persons. There is Unity of the property, and plurality of
under Art. 424 because such classification is qualified by the subjects.
ejusdem generis; it must be of the same character as the
preceding items. (City of Cebu v. NAWASA, G.R. No. 12892, Q: What are the characteristics of ownership?
April 20, 1960)
A:
BY NATURE 1. Elastic – Power/s may be reduced and thereafter
automatically recovered upon the cessation of the
Q: How are properties classified according to limiting rights.
consumability? 2. General – The right to make use of all the possibilities
or utility of the thing owned, except those attached to
A: other real rights existing thereon.
1. Consumable property – That which cannot be used 3. Exclusive –There may be two or more owners, but only
according to its nature without being consumed or one ownership.
being eaten or used up 4. Independent – Other rights are not necessary for its
2. Non-Consumable property – That which can be used existence.
according to its nature without being consumed or 5. Perpetual – Ownership lasts as long as the thing exists.
being eaten or used up. It cannot be extinguished by nonuser but only by
adverse possession.

CIVIL LAW
BUNDLE OF RIGHTS PERSONAL OR MOVABLE Note: Where the facts averred in the complaint reveals that the
action is neither one of forcible entry nor unlawful detainer but
JUS UTENDI, FRUENDI, ABUTENDI, VINDICANDI, essentially involves a boundary dispute, the same must be resolved
in an accion reinvindicatoria (Sarmiento v. CA, G.R. No. 116192,
DISPODENDI, POSSIDENDI, ACCESIONES
November 16, 1995).
Q: What are the attributes of ownership? Q: A contract of lease executed by Alava (lessor) and Anita
Lao (lessee) was not registered with the Register of Deeds.
A:
Aside from Anita, Rudy Lao also leased a portion of the
1. Right to enjoy (jus utendi)
same property where he put up his business. At that time,
2. Right to the fruits (jus fruendi)
Rudy knew that Anita and her husband were the owners
3. Right to abuse (jus abutendi)
of the said building. He also knew that she had leased
4. Right to dispose (jus dispodendi)
that portion of the property, and that Jaime Lao, their son,
5. Right to recover (jus vindicandi)
managed and maintained the building, as well as the
6. Right to accessories (jus accessiones)
business thereon. Rudy eventually purchased the entire
7. Right to possess (jus possidendi)
property from Alava. Rudy then filed a complaint for
unlawful detainer against Jaime alleging that the latter
REMEDIES TO RECOVER POSSESSION
had occupied a portion of his property without any lease
agreement and without paying any rentals, and prayed
ACTIONS TO RECOVER OWNERSHIP AND POSSESSION OF
that an order be rendered directing Jaime to vacate the
REAL PROPERTY
premises. Should the complaint be dismissed?
Q: What are the legal remedies to recover possession of A: Yes. The records in this case show that the respondent
one’s property? has been in possession of the property in question, not by
mere tolerance or generosity of Rudy, but as the manager
A: of his mother, who conducted her business in the building
1. Personal property- Replevin which stood on a portion of the property leased from Alava.
2. Real property Jaime’s possession was in behalf of his mother, and not in
a. Accion Interdictal his own right.
i. Forcible Entry
ii. Unlawful detainer Q: What is the effect of non-registration of the contract of
b. Accion Publiciana lease?
c. Accion Reinvindicatoria
A: Although the lease contract was not filed with the
DISTINCTIONS BETWEEN ACCION REIVINDICATORIA, Register of Deeds, nevertheless, Rudy was bound by the
ACCION PUBLICIANA, ACCION INTERDICTAL terms and conditions of said contract. The lease, in effect
became a part of the contract of sale. However, Rudy had
Q: What is accion interdictal? no cause of action for unlawful detainer against Anita
because of the subsisting contract of lease; hence, he could
A: A summary action to recover physical or material not file the complaint against her (Lao v. Lao, G.R. No.
possession only and it must be brought within one year 149599, May 16, 2000).
from the time the cause of action arises.
1. Forcible Entry
DISTINCTION BETWEEN FORCIBLE ENTRY AND UNLAWFUL
2. Unlawful detainer
DETAINER
Q: What is accion publiciana?

Q: Distinguish forcible entry from unlawful detainer.
A: An ordinary civil proceeding to recover the better right
A:
of possession, except in cases of forcible entry and unlawful
detainer. What is involved here is not possession de facto Forcible Entry Unlawful Detainer
but possession de jure. As to when possession became unlawful
Possession is inceptively
Q: What is accion reinvindicatoria?
lawful but becomes illegal
from the time defendant
A: An action to recover real property based on ownership.
Possession of the defendant unlawfully withholds
Here, the object is the recovery of the dominion over the
is unlawful from the possession after the
property as owner.
beginning as he acquired expiration or termination of
Q: What are the requisites of accion reinvindicatoria? possession by force, his right thereto.
intimidation, strategy, threat
A: or stealth (FISTS). Note: The question of
possession is primordial, while
1. Identity of property
the issue of ownership is
2. Plaintiff’s title to the property generally unessential in unlawful
detainer (Rosa Rica Sales Center

PROPERTY
v. Sps. Ong, G.R. 132197, August Note: Plaintiff’s title must be founded on positive right or title and
16, 2005). not merely on the lack or inefficiency of the defendant’s title. In
other words, he shall not be permitted to rely upon the defects of
As to necessity of demand the defendant’s title. (Art. 434)
No previous demand for the Demand is jurisdictional if
defendant to vacate is the ground is non-payment Q: Why is the plaintiff not allowed to rely on the weakness
necessary. of rentals or failure to of defendant’s title?
comply with the lease
contract. A:
As to necessity of proof of prior physical possession 1. Possibility that neither the plaintiff nor the defendant
is the true owner of the property. In which case, the
Plaintiff must prove that he Plaintiff need not have been defendant who is in possession will be preferred.
was in prior physical in prior physical possession. 2. One in possession is presumed to be the owner and he
possession of the premises cannot be obliged to show or prove a better title
until he was deprived Note: The fact that petitioners
3. Possessor in the concept of an owner is presumed to
thereof by the defendant. are in possession of the lot does
not automatically entitle them be in good faith and he cannot be expected to be
to remain in possession (Ganilla carrying every now and then his proofs of ownership
v. CA, G.R. No. 150755, June 28, over the property
2005). 4. He who relies on the existence of a fact, should prove
As to when 1 year period is counted from that fact. If he cannot prove, the defendant does not
have to prove.
1 year period is generally 1 year period is counted
counted from the date of from the date of last
actual entry of the land. demand or last letter of DISTINCTION BETWEEN REAL AND PERSONAL RIGHTS
demand.
Q: Distinguish real from personal rights
ACTIONS FOR RECOVERY OF POSSESSION OF MOVABLE
PROPERTY A:
Real Right Personal Right
Q: What is replevin? Creation
Created by title alone
A: It is the remedy when the complaint prays for the It is not directly created
recovery of the possession of personal property. Created by both title and over a thing but is
mode directly over a thing exercised through another
Q: May a property in custodia legis be subject of a against whom the action is
replevin suit? to be brought.
Object
A: No. A property validly deposited in custodia legis cannot
be subject of a replevin suit (Calub v. CA, G.R. No. 115634, Incorporeal or intangible.
Apr. 27, 2000). Generally corporeal or Object covers all the
tangible. Object is specific present and future
REQUISITES FOR RECOVERY OF PROPERTY property or thing. property of the debtor.
(Art. 2236)
Subjects
Q: What are the requisites in an action to recover
property? (a) One definite active
subject (e.g.
owner)
A: (b) One indefinite
1. Clearly identify the land he is claiming in passive subject
accordance with the title/s on which he bases his (a) An active subject
which is the whole
right of ownership; and (creditor)
world
(b) A definite passive
Right of pursuit is
Note: Burden of proof lies on the party who asserts the subject (debtor)
affirmative of an issue. The description should be so
therefore
definite that an officer of the court might ho to the available. Real
locality where the land is situated and definitely locate right follows its
it. object in the hands
of any possessor
2. Prove that he has a better title than the Enforceability
defendant Enforceable only against
a. Best proof is a Torrens certificate. the original debtor or his
Enforceable against the
b. Tax receipts, tax declarations are only prima transferee charged with
whole world
facie evidence of ownership; it is rebuttable. notice of the personal
rights

CIVIL LAW
Limit GENERAL RULES

Limited by usefulness, value
No such limitation FOR IMMOVABLES
or productivity of the thing
Extinguishment
ACCESSION DISCRETA
Not so extinguished. Claim
Extinguished by loss or for damages may still be
Q: What is accession discreta?
destruction of the thing pursued-in case of loss or
destruction of the thing
A: It is the right pertaining to the owner of a thing over
everything produced thereby.
LIMITATIONS
Q: What are the requisites of accession discreta?
Q: What are the limitations on the right of ownership?
A:
A: Those imposed by the: CC-SLOG 1. Increase or addition to the original thing
1. State in the exercise of: 2. At repeated intervals
a. Power of taxation 3. By inherent forces
b. Police power
c. Power of eminent domain Q: Is the rule of accession discreta—that to the owner of
2. Law the thing belong the natural, industrial and civil fruits—
a. Legal easements (i.e., easements of waters absolute in character?
and of right of way) and
b. The requirement of legitime in succession; A: No. It is subject to the following exceptions:
3. Owner himself 1. If the thing is in possession of a possessor in good
a. Voluntary easement faith in which case such possessor is entitled to
b. Mortgage the fruits. (Art. 544)
c. Pledge 2. If the thing is subject to a usufruct, in which case
d. Lease; the usufructuary is entitled to the fruits. (Art. 566)
4. Grantor of the property on the grantee, either by: 3. If the thing is leased, in which case the lessee is
a. Contract entitled to the fruits of the thing, although such
b. Donation or lessee must pay the owner rentals which are in
c. Will; the nature of civil fruits. (Art. 1654)
5. Those arising from Conflicts of private rights 4. If the thing is in possession of an antichretic
a. Those which take place in accession creditor, in which case such creditor is entitled to
continua; the fruits with the obligation of applying them to
6. Constitution the interest and principal. (Art. 2132)
a. Prohibition against the acquisition of private
lands by aliens. Q: What are the kinds of fruits?
7. Acts in state of necessity – The law permits injury
or destruction of things owned by another A: NIC
provided this is necessary to avert a greater 1. Natural –
danger (with right to indemnity v. principle of a. Spontaneous products of the soil;
unjust enrichment) b. The young and
8. True owner must resort to judicial process – When c. Other products of animals, whether brought
thing is in possession of another; law creates a about by scientific means or not.
disputable presumption of ownership to those in 2. Industrial– produced by lands of any kind
actual possession through:
a. Cultivation or
ACCESSION b. Labor
3. Civil fruits –
Q: Define accession. Is accession a mode of acquiring a. Derived from the use of property or
ownership? b. Income from the property itself. They
consist of rents of buildings and the prices of
A: Accession may be defined as the right pertaining to the leases of lands. (Art. 442)
owner of a thing over everything which is produced
thereby, or which is incorporated or attached thereto, Q: When can we say that the fruit is in existence?
either naturally or artificially (Art. 440). From the very
definition itself, it is clear that it is not a mode of acquiring A: It depends on the type of fruit:
ownership; it is merely a consequence of the right of 1. Annual (must be planted every year/must re-plant after
ownership. Furthermore, under Art. 712 of the NCC which harvest; rice, wheat, corn) – deemed manifest the
enumerates the different modes of acquiring ownership or moment their seedlings appear.
other real rights, accession is not included.

PROPERTY
2. Perennial (only planted once and bear fruit for several a. Specification
seasons; mango and coconut trees) –deemed to exist b. Adjunction or conjunction
only when they actually appear. c. Commixtion or confusion
Q: When are animal young considered as existing? Q: What are the basic principles in accession continua?
A: They are considered existing even if still in the maternal A: BADONG-E

womb. They should be considered existing only at the 1. He who is in Bad faith is liable for damages.
commencement of the maximum ordinary period for 2. Accessory follows the principal
gestation. 3. Union or incorporation must generally be
effected in such a manner that to separate the
Q: When are civil fruits and natural fruits deemed to exist? principal from the accessory would result in
substantial Damage to either or diminish its
A: value.
a. Civil fruits accrue daily and are considered personal 4. To the Owner of the thing belongs the extension
property and may be pro-rated. or increases to such thing.
b. Natural and industrial fruits, while still growing, are 5. Bad faith of one party Neutralizes the bad faith of
considered as real property; ordinarily, they cannot be the other so that they shall be considered in good
pro-rated. faith.
6. He who is in Good faith may be held responsible
Q: To whom do the fruits belong? but not penalized.
7. No one shall unjustly Enrich himself at the
A: GR: To the owner of the land. (Art. 441) expense of another.
XPNS: If the thing is: [PULPA] ACCESSION INDUSTRIAL

1. In possession of a possessor in good faith (Art 546,
NCC); before the possession is legally interrupted.
Q: What are the maxims in connection with accession
2. Subject to a Usufruct (Art. 566)
industrial?
3. Lease of rural land
4. Pledged (Art. 1680 and Art. 2102, par. 7); pledge is A:
entitled to the fruits but has the obligation to 1. The accessory follows the principal.
compensate or set-off what he receives with those 2. The accessory follows the nature of that to which it
which are owing to him. relates.
5. In possession of an Antichretic creditor (Art. 2132) 3. What is built upon the land goes with it; or the land is
the principal, and whatever is built on it becomes the
Q: What does the maxim pratus sequitor ventrem mean? accessory.
A: The offspring follows the dam (mother).
Q: What is the rule on ownership regarding accession
industrial?
ACCESSION CONTINUA
A: GR: The owner of the land is the owner of whatever is
Q: What is accession continua? built, planted or sown on that land, including the
improvements or repairs made thereon.
A: It is the right pertaining to the owner of a thing over
everything incorporated or attached thereto either XPNS:
naturally or artificially; by external forces.
1. With respect to real property [IN] 1. When the doer is in good faith the rule is
a. Accession Industrial (building, planting or modified.
sowing) 2. Improvements on the land of one of the spouses
b. Accession Natural (alluvium, avulsion, at the expense of the conjugal partnership will
change of a river course, and formation of belong to the partnership or to the spouse who
islands) owns the land depending on which of the two
properties has a higher value (Art. 120, FC)
Note: In case of uprooted trees, the owner retains Note: If the doer is in bad faith, he is entitled only to necessary
ownership if he makes a claim within 6 months. expenses for the preservation of the land.
This does not include trees which remain planted
on a known portion on land carried by the force of
the waters. In this latter case, the trees are
regarded as accessions of the land through gradual
changes in the course of adjoining stream.
(Payatas v. Tuazon, No. 30067, March 23, 1929)
2. With respect to personal property [SAC]

CIVIL LAW
ACCESSION NATURAL b. Plumbatura – Different metals (Art. 468)
Q: To whom does the offspring of animals belong when Q: Who owns the movables subject to adjunction?
the male and female belong to different owners?
A: The owner of the principal by law becomes owner of the
A: Under the Partidas, the owner of the female was resulting object and should indemnify the owner of the
considered also the owner of the young, unless there is a accessories for the values thereof.
contrary custom or speculation.
Q: What are the tests to determine the principal?
The legal presumption, in the absence of proof to the
contrary, is that the calf, as well as its mother belongs to A: VVUM
the owner of the latter, by the right of accretion (US v. 1. That of greater Value- If two things are of equal value.
Caballero, G.R. No. 8608, September 26, 1913). (Art. 468)
2. That of greater Volume- If two things are of equal
Note: This is also in accord with the maxim “pratus sequitor volume. (Art. 468)
ventrem.” 3. That to which the other has been United as an
ornament, or for its use or perfection- If it cannot be
FOR MOVABLES determined from Art. 467. (Art. 467)
4. That which has greater Merits, utility and volume if
ACCESSION CONTINUA things.
Q: What is the basic principle of accession with respect to Q: How is ownership determined if the adjunction
movable property? involves three or more things?
A: Accession exists only if separation is not feasible. A: The court should first distinguish the principal and apply
Otherwise, separation may be demanded. Art. 466 in an equitable manner such that the principal
acquires the accessory, indemnifying the former owner
Q: Enumerate different kinds of accession continua as thereof for its value.
regard movables.
Q: How about if the adjunction involves three or more
A: AMS things?
1. Adjunction or conjunction
2. Mixture A: The principal should first be distinguished, after, Art. 466
3. Specification will be applied in an equitable manner, such that the
principal acquires the accessory, indemnifying the former
Q: What is adjunction? owner thereof for its value.
A: The process by virtue of which two movable things Note: Art. 466 states that “Whenever two movable things
belonging to different owners are united in such a way that belonging to different owners are, without bad faith, united in such
they form a single object and each of the things united a way that they form a single object, the owner of the principal
thing acquires the accessory, indemnifying the former owner
preserves its own nature. (Art. 466)
thereof for its value.”
Q: What are its characteristics? Q: When is separation of things allowed?
A: That there are: 2BUS A: WIB

1. 2 movables; 1. Separation Without injury
2. Belonging to different owners; 2. Separation with Injury – Accessory is much more
3. United forming a single object; precious than the principal, the owner of the former
4. Separation would impair their nature or result in may demand its separation even though the principal
substantial injury to either thing. may suffer injury.
3. Owner of the principal acted in Bad faith. (Art. 469)
Q: What are the classes of adjunction or conjunction?
Q: What are the rules as regards rights of owners over the
A: PEWWS thing in adjunction?
1. Painting (pintura)
2. Engraftment - Like setting a precious stone on a A:
golden ring) OWNER OF THE
3. Writing (escritura) OWNER OF THE ACCESSORY
PRINCIPLE
4. Weaving Good Faith Good Faith
5. Soldering- Joining a piece of metal to another 1. Acquire 1. Receive payment for value
metal)
accessory and pay of accessory; OR
a. Ferruminacion - Principal and accessory are owner of the accessory 2. GR: Demand separation
of the same metal
for its value; OR provided the thing suffers

PROPERTY
2. Demand no injury ownership)

separation provided XPN: If accessory is more
the thing suffers no precious than principal, he Bad Faith
Good Faith
injury may demand separation (caused the mixture)
w/ or w/o injury to the st nd
1 owner will lose his part on 2 owner will acquire
thing
the mixture and pay damages entire mixture and
nd
to the 2 owner entitled to damages
Acquire accessory w/o Good Faith
Lose accessory and pay Bad Faith
paying the owner of (caused the mixture)
damages
accessory and entitled to
As if both acted in GF,
damages As if both acted in GF, because st
nd since the 1 owner is in
Bad Faith Good Faith the 2 owner in GF was the nd
BF and the 2 owner who
1. Pay value of 1. Receive payment one who caused the
st caused the mixture in GF
accessory and pay and damages; OR ratification, because the 1
in a way ratifies the BF of
damages; OR owner st
1 owner.
2. Have the things
separated, even though 2. Have accessory
there is injury to the separated w/ or w/o injury Q: What is a specification?
principal and pay to principal and receive
damages damages A: It is the giving of new form to another’s material thru
Bad Faith Bad Faith application of labor. The material undergoes a
Same as though both acted in good faith transformation or change of identity.
Q: What are the respective rights of the maker and the

Q: How is the indemnity made?
owner of the materials in specification?
A: A:
1. Delivery of a thing equal in kind and value; or
Maker (M) Owner of Materials (OM)
2. Payment of its price including the sentimental value.
(Art. 471) Good Faith Good Faith
GR: Appropriate the thing
Q: What is a mixture? transformed and pay the
owner of the materials for
A: It is the combination of materials where the respective its value
identities of the component elements are lost either XPN: If the material is
voluntarily or by chance. (Arts. 472-473) more precious than the
thing transformed, the Receive payment for value of
Q: What are the kinds of mixtures? owner of the materials has materials
the option to:
A: COM-CON
1. Commixtion – mixture of solids 1. Acquire the work and
2. Confusion – liquids indemnify the maker for
his labor; or
Q: What are the rules regarding mixtures? 2. Demand indemnity for
the material
A:
st nd
1 Owner 2 Owner
1. Receive payment for 1. Appropriate new
By Will of Both Owners of by Accident value of his work; OR thing and pay the maker for
2. Appropriate the new the work; OR
Good Faith Good Faith thing and pay the owner 2. Receive payment for
1. Right is subject to stipulations; OR of materials for its value value of materials
2. Right is in proportion to the part belonging to him Bad Faith Good Faith
(Co-ownership arises) 1. Lose the new thing and 1. Appropriate the new thing
By Will of Only 1 Owner/ By Chance pay damages to owner without paying and receive
of the materials; OR damages; OR
Note: Not available if the
1. Have the things separated provided the thing
2. Pay value of materials new thing is more valuable
suffers no injury; OR than materials for scientific
and damages to owner
2. If cannot be separated w/o injury, acquire interest or artistic reasons
of the materials
on mixture in proportion to his part (co-

CIVIL LAW
2. Receive payment for the Q: What are the properties that can be subject of an
value of materials and action for quieting of title?
damages
A: Only real properties could be the subject matter of
Q: Distinguish adjunction, mixture and specification. quieting of title. Art. 476 makes reference only to real
property without hinting to include personal property.
A: (Pineda, p. 192)
ADJUNCTION MIXTURE SPECIFICATION REQUIREMENTS
May involve 1 Q: What are the requisites for an action to quiet title?
Involves at least 2 Involves at least 2
thing(or more) but
things things
form is changed A: LCDR
1. Plaintiff must have a Legal or equitable title to, or
Accessory follows Co-ownership Accessory follows interest in the real property which is the subject
the principal results the principal matter of the action;
2. There must be Cloud in such title;
Things mixed or 3. Such cloud must be Due to some
The new object
confused may a. Instrument;
retains or
Things joined either retain or b. Record;
preserves the
retain their nature lose their c. Claim;
nature of the
respective d. Encumbrance; or
original object
natures e. Proceeding which is apparently valid but is in
truth invalid, ineffective, voidable or
RULES FOR DETERMINING THE PRINCIPAL AND unenforceable, and is prejudicial to the plaintiff’s
ACCESSORY title; and
4. Plaintiff must
a. Return to the defendant all benefits he may have
Q: What are the factors to determine the principal and the
received from the latter; or
accessory?
b. reimburse him for expenses that may have
redounded to his benefit.
A: Primary Factors (Importance/purpose)
1. The thing which is incorporated to another thing Q: What are the reasons for quieting of title?
as an ornament is the accessory. The other is the
principal A:
2. The thing to which is added to or joined to 1. Prevent future litigation on the ownership of the
another for the use or perfection of the latter is property
the accessory. The other is the principal. 2. Protect true title & possession
3. To protect the Real interest of both parties
Secondary Factors 4. To determine and make known the precise state of
1. The one which has a greater value shall be title for the guidance of all
considered principal
2. If they have equal value, the one with greater Q: State the rules in actions for Quieting of Title.
volume shall be considered principal (Art. 467-
468. A:
1. These put an end to vexatious litigation in respect to
Note: In painting and sculpture, writings, printed matter, engraving property involved; plaintiff asserts his own estate &
and lithographs, the board, metal, stone, canvas, paper or generally declares that defendant’s claim is without
parchment shall be deemed the accessory thing. (Art. 468)
foundation
2. Remedial in nature
QUIETING OF TITLE
3. Not suits in rem nor personam but suits against a
particular person or persons in respect to the res
Q: What is an action for quieting of title?
(quasi in rem)
4. May not be brought for the purpose of settling a
A: It is a proceeding in equity, the purpose of which is the
boundary disputes.
declaration of the invalidity of a claim on a title or the
5. Applicable to real property or any interest therein.
invalidity of an interest in property adverse to that of the
The law, however, does not exclude personal property
plaintiff, and thereafter to free the plaintiff and all those
from actions to quiet title.
claiming under him from any hostile claim thereon. (Pineda,
6. An action to quiet title brought by the person in
p. 191)
possession of the property is IMPRESCRIPTIBLE.
7. If he is not in possession, he must invoke his remedy
Note: An action to quiet title is quasi in rem - an action in
personam concerning real property where judgment therein is
within the prescriptive period.
enforceable only against the defeated party and his privies.

PROPERTY
Q: What are the classifications of action? the barangay traces its claim of ownership over the
disputed property to a valid contract of donation which is
A: yet to be effectively revoked. Such rightful claim does not
a.) Remedial action – one to remove cloud on title constitute a cloud on the supposed title of Edgardo over
b.) Preventive action – on to prevent the casting of a the same property removable by an action to quiet title.
(threatened) cloud on the title. (Dolar v. Brgy. Lublub, G.R. No. 152663, November 18,
2005)
Q: What are the requisites for existence of a cloud?
PRESCRIPTION OR NON-PRESCRIPTION
A: ATP OF ACTION
1. There is an Apparently valid or effective
instrument. Q: What are the prescriptive periods for bringing an action
to quiet title?
Note: They must appear valid or effective – and
extraneous evidence is needed to prove their invalidity
or ineffectivity. A:
1. Plaintiff in possession – Imprescriptible
2. But such instrument is in Truth: 2. Plaintiff not in possession –
a. Invalid; a. 10 years (ordinary) or
b. Ineffective; b. 30 years (extra-ordinary)
c. Voidable;
d. Unenforceable; Note: Laches is defined as the failure or neglect, for unreasonable
and unexplained length of time, to do that which by exercising due
e. Has been extinguished or terminated;
diligence, could or should have been done earlier.
f. Has been barred by extinctive prescription.
3. Such instrument may be Prejudicial to the title. The negligence or omission to assert a right within a reasonable
time, warranting a presumption that the party entitled to assert it
Q: What is the purpose of an action to remove cloud on either has abandoned it or declined to assert it (Tijam v
title? Sibonghanoy, L-21450, Apr. 15, 1968).
A: It is intended to procure the cancellation, or delivery of, Q: May an action filed within the period of limitations, still
release of an instrument, encumbrance, or claim be barred?
constituting a claim on plaintiff’s title, and which may be
used to injure or vex him in the enjoyment of his title. A: Yes, by laches. (See Arts. 1431, 1433, 1437)
Q: Differentiate an action to quiet title from an action to Q: Is an action to quiet title imprescriptible?
remove cloud on title.
A: Yes. Even though the NCC does not include an action to
A: quiet title as one of those actions which are imprescriptible,
the SC in this case held that such action is imprescriptible.
ACTION TO REMOVE
ACTION TO QUIET TITLE The basis of the court is Art. 480. The imprescriptibility of
CLOUD ON TITLE
an action to quiet title is a general principle from American
To put an end to troublesome For the removal of a jurisprudence (Bucton v. Gabar, G.R. No. L-36359,
litigation with respect to the possible foundation for a January31, 1974).
property involved future hostile claim
A remedial action A preventive action CO-OWNERSHIP
Involving a present adverse To prevent a future cloud
claim on the title CHARACTERISTICS OF CO-OWNERSHIP
IN GENERAL
Q: Edgardo donated a parcel of land to a barangay subject
Q: What is co-ownership?
to the condition that it shall be used for the construction
of a public plaza within 5 years from execution of the
A: It is a state where an undivided thing or right belongs to
Deed of Donation. Otherwise, the deed shall have no force
2 or more persons (Art. 484). It is the right of common
and effect and ownership of the land will revert to the
dominion which two or more persons have in a spiritual (or
donor. The barangay took possession of the property and
ideal) part of the thing which is not physically divided.
allowed the construction of buildings by public and private
entities. Edgardo filed a complaint for quieting of title and
Q: What are the characteristics of co-ownership?
recovery of possession of the area donated against the
barangay claiming that the donation had ceased to be A: PRES-LG
effective, for failure to comply with the conditions of the 1. Plurality of subjects / owners;
donation. Was the action to quiet title properly made? 2. There is no mutual Representation by the co-owners;
3. It exists for the common Enjoyment of the co-owners;
A: No. The action to quiet title is unavailing until the
4. There is a Single object which is not materially divided;
donation shall have first been revoked. In the case at bar,
5. It has no distinct Legal personality

CIVIL LAW
6. It is Governed first of all by the contract of the parties; Under the law, such interests are presumed equal, unless
otherwise, by special legal provisions, and in default of the contrary is proved. (Art. 485, par.2)
such provisions, by the provisions of Title III of the
New Civil Code on co-ownership.
Q: What are the requisites of co-ownership?
A: POL
1. Plurality of owners;
2. Object, which is an undivided thing or right;
3. Each co-owner’s right must be Limited only to his ideal
share of the physical whole
Note: By the very 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 remains intangible and ideal (Spouses Avila
et al v. Spouses Barabat, GR. No. 141993, May 17, 2006).
Q: What are the limitations upon the right of a co-owner

to use the thing owned in common?
A: The thing should be used only:

1. In accordance with the purpose for which it is
intended;
2. In such a way as not to injure the interest of the
co-ownership; and
3. In such a way as not to prevent the other co-
owners from using it according to their rights.
(Art. 486)
Q: What happens when a co-owner sells the whole

property as his?
A: The sale will affect only his own share but not those of
the other co-owners who did not consent to the sale.
Note: A sale of the entire property by one co-owner without the

consent of the other co-owners is not null and void but affects only
his undivided share and the transferee gets only what would
correspond to his grantor in the partition of the thing owned in
common (Paulmitan v. CA, GR No. 51584, November 25, 1992.).
Q: Can there be an agreement to keep the thing undivided

for a certain period of time?
A: Yes. An agreement to keep the thing n undivided for a

certain period of time, not exceeding ten years, shall be
valid. This term may be extended by a new agreement.
A donor or testator may prohibit partition for a period

which shall not exceed twenty years.
Neither shall there be any partition when it is prohibited by

law. (Art. 494)
Q: How do you determine the share of the co-owners in

the benefits and charges arising from the co-ownership?
A: According to the NCC, the share of the co-owners in the

benefits and charges arising from the co-ownership shall be
proportional to their respective interests and any
stipulation in a contract to the contrary shall be void (Art.
485, par.1). Consequently, in order to determine the share
of the co-owners in the benefits and charges, we must first
determine their respective interests in the co-ownership.

PROPERTY
Q: Distinguish co-ownership from joint tenancy.
A:
CO-OWNERSHIP JOINT OWNERSHIP
Tenancy in common Joint Tenancy
As to the extent of ownership
Each co-owner is the owner of his own ideal share. Each joint owner owns the whole thing.
As to disposition
Each co-owner may dispose of his undivided share without the Joint owner may not dispose of his own share without of all the
other co-owners’ consent. rest, because he really has no ideal share.
As to transfer of shares in case of death
Upon the death of a joint owner, his share goes to the other
Upon the death of a co-owner, his ideal share goes to his heirs.
joint owners by accretion.
As to minority or legal disability

In case of a minor who is a co-owner, this does not benefit the
The legal disability of one joint owner benefits the others.
others.
Prescription
Prescription will continue to run among co-owners Prescription will not run among them.
Q: Distinguish co-ownership from partnership.
A:
CO-OWNERSHIP ORDINARY PARTNERSHIP
No legal personality Has legal personality
Can be created without the formalities of a Can be created only by contract, express or
contract implied
By contract or by will By contract only
Agreement to exist for more than 10 years is
No term limit is set by law
void
No mutual representation There is mutual representation
Not dissolved by the death/incapacity of a co-
Dissolved by death or incapacity of a partner
owner
A co-owner can dispose of his share w/o the
A partner cannot be substituted w/o the
consent of the others hence in a way a co-
consent of the others
owner is substituted
Profits of a co-owner depend on his Profits may be stipulated upon (for e.g., profit-
proportionate share sharing agreements)
For collective enjoyment For profit
No public instrument is needed even if the May be made in any form except when real
object of the co-ownership is an immovable property is contributed

CIVIL LAW
SPECIAL RULES: XPNs: A partition shall be made only upon a showing
that: COURE
CONCEPT OF CONDOMINIUM 1. That 3 years after damage to the project which
rendered a material part thereof unfit for its use
CONDOMINIUM CORPORATION prior thereto, it has not been Repaired
substantially to its state prior to said damage; or
Q: What is a condominium corporation? 2. That damage to the project has rendered 1/2 or
more of the units therein Untenantable and
A: A condominium may include, in addition, a separate owners holding, in aggregate, more than 30%
interest in other portions of such real property. Title to the interest in the common areas are opposed to the
common areas, including the land, or the appurtenant repair; or
interests in such areas, may be held by a corporation 3. That the project which has been in existence for
specially formed for the purpose (known as the more than 50 yrs, is Obsolete and is uneconomic,
“condominium corporation”) in which the holders of and owners holding, in aggregate, more than 50%
separate interest shall automatically be members or interest in the common areas are opposed to the
shareholders, to the exclusion of others, in proportion to repair or modernizing; or
the appurtenant interest of their respective units in the 4. That the project or a material part thereof has
common areas. been condemned or Expropriated, the project is
no longer viable and owners holding, in
The real right in condominium may be ownership or any aggregate, more than 70% interest in the
other interest in real property recognized by law, on common areas are opposed to continuation of
property in the Civil Code and other pertinent laws. (Sec. 2, the condominium after such expropriation or
RA No. 4726) condemnation; or
5. That the Conditions for such partition by sale
INTEREST IN REAL PROPERTY have been met.
Q: What is a condominium? Q: When can a Corporation Condominium be voluntarily

dissolved?
A: An interest in real property consisting of;
1. A separate interest in a unit in a residential, A:
industrial or commercial building; and 1. By the affirmative vote of all the stockholders or
2. An undivided interest in common, directly or members thereof at a general or special meeting duly
indirectly, in the called for the purpose: Provided all the requirements
a. Land on which it is located; and of Section 62 of the Corporation Law are complied
b. In other common areas of the building. with.
CONCEPT OF COMMON AREAS, AMENDMENT 2. GR: When the enabling or master deed is revoked
Q: What are common areas? XPN:
A: The entire project excepting all units separately granted

1. That 3 years after damage or destruction to the
or held or reserved.
project which renders a material part thereof
unfit for its use prior thereto, it has not been
Q: What is a project?
rebuilt or repaired substantially to its prior
A: The entire parcel of real property divided or to be state; or
divided in condominiums, including all structures thereon. 2. That damage or destruction to the project has
rendered 1/2 or more of the units therein
Q: Where the common areas in the condominium are held untenantable and that more than 50% of the
by the owners of separate units as co-owners thereof, to members of the corporation, if non-stock, or
whom can the units therein be conveyed? the shareholders representing more than 30%
of the capital stock entitled to vote, if a stock
A: GR: Only to Filipino citizens corporation, are opposed to the repair or
reconstruction of the project, or
XPN: To aliens in case of hereditary succession 3. That the project has been in existence in excess of
50 years, that it is obsolete and uneconomical,
GROUNDS FOR PARTITION OF COMMON AREAS, OR and more than 50% of the members of the
DISSOLUTION OF THE CONDOMINIUM corporation, if non-stock, or the stockholders
representing more than 50% of the capital
stock entitled to vote, if a stock corporation,
Q: Can the common areas be divided? are opposed to the repair or restoration or
remodeling or modernizing of the project; or
A: GR: No, there can be no judicial partition.

PROPERTY
4. That the project or a material part thereof has RIGHTS OF CO-OWNERS
been condemned or expropriated and that the
project is no longer viable, or that the Q: What are the general rights of each co-owner as to the
members holding in aggregate more than 70% thing owned in common?
interest in the corporation, if non-stock, or the
stockholders representing more than 70% of A: USA-COPE-P
the capital stock entitled to vote, if a stock 1. To Use the thing according to the purpose intended
corporation, are opposed to the continuation provided that:
of the condominium regime after expropriation a. It is w/o prejudice to the interest of the co-
or condemnation of a material portion thereof; ownership; and
or b. W/o preventing the use of other co-owners.
5. That the conditions for such a dissolution have (Art. 486)
been met. (Secs. 13 & 14, R.A. 4726) 2. To Share in the benefits in proportion to his interest,
provided the charges are borne in the same
Q: If you are the owner of a unit in a condominium proportion. (Art. 485)
project, such as an apartment, office or store, can you
transfer your interest in the project to a third person? Note: A contrary stipulation is void. Hence, benefits cannot
be stipulated upon by the co-owners.
A: Yes, I can. However, the limitations prescribed by Sec. 5

3. Each co-owner may bring an Action for ejectment.
of the Condominium Act must be observed. According to
(Art. 487)
this section: “Any transfer or conveyance of a unit or an
apartment, office or store or other space therein, shall Note: Action for ejectment covers; forcible entry, unlawful
include the transfer or conveyance of the undivided detainer, accion publiciana, quieting of title, accion
interest in the common areas or, in a proper case, the reivindicatoria, replevin.
membership or shareholding in the condominium
corporation: Provided, however, that where the common 4. To Compel other co-owners to contribute to expenses
areas in the condominium project are held by the owners of for preservation of the thing (Art. 488)
separate units as co-owners thereof, no condominium unit 5. To Oppose to any act of alteration (Art. 491) even if
therein shall be conveyed or transferred to person other beneficial to the co-owners
than Filipino citizens or corporations at least 60% of the 6. To Protect against acts of majority which are
capital stock of which belong to Filipino citizens, except in prejudicial to the minority (Art. 492, par. 3)
cases of hereditary succession. Where the common areas in 7. To Exercise legal redemption
a condominium project are held by a corporation, no 8. To ask for Partition (Art. 494)
transfer or conveyance of a unit shall be valid if the 9. Right to exempt himself from obligation of paying
concomitant transfer of the appurtenant membership or necessary expenses and taxes by renouncing his share
stockholding in the corporation will cause the alien interest in the pro-indiviso interest; but can’t be made if
in such corporation to exceed the limits imposed by existing prejudicial to co-ownership
laws.” 10. Right to make repairs for preservation of things can be
made at will of one co-owner; receive reimbursement
SOURCES OF CO-OWNERSHIP therefrom; notice of necessity of such repairs must be
given to co-owners, if practicable
11. Right to full ownership of his part and fruits
Q: What are the sources of co-ownership?
12. Right to alienate, assign or mortgage own part; except
A: LOST-CC personal rights like right to use and habitation
1. Law - ex. Easement of party walls (Article 658, NCC) 13. Right of pre-emption
2. Occupancy - ex. When two persons gather forest 14. Right to be adjudicated thing (subject to right of others
products or catch a wild animal to be indemnified)
3. Succession- ex. Heirs of undivided property before 15. Right to share in proceeds of sale of thing if thing is
partition indivisible and they cannot agree that it be allotted to
4. Testamentary (or mortis causa) / Donation inter vivos one of them.
i.e. Where the donor prohibits partition of the
property for a certain period of time Q: What is the effect of redemption of the whole property
5. Contract of a co-owner?
6. by Chance or fortuitous event A: Redemption of the whole property by a co-owner does
i.e. Hidden treasure not vest in him sole ownership over said property.
Redemption within the period prescribed by law by a co-
owner will inure to the benefit of all co-owners. Hence, it
will not put an end to existing co-ownership (Mariano v. CA
222 SCRA 76, 1993).

CIVIL LAW
Q: What are the duties/liabilities of co-owners? Q: What if the case does not prosper, are the other co-
owners bound by the judgment?
A: A: GR: No.
1. Share in charges proportional to respective interest;
stipulation to contrary is void XPN: If they were also served with summons, even as
2. Pay necessary expenses and taxes – may be exercised unwilling plaintiffs.
by only one co-owner
3. Pay useful and luxurious expenses – if determined by Q: Can a suit for ejectment be brought by one co-owner
majority against another co-owner?
4. Duty to obtain consent of all if thing is to be altered
even if beneficial; resort to court if non-consent is A: No, since the latter also has a right of possession; the
manifestly prejudicial only effect of the action will be to obtain recognition of the
5. Duty to obtain consent of majority with regards to co-ownership.
administration and better enjoyment of the thing;
controlling interest; court intervention if prejudicial – DISTINCTION BETWEEN RIGHT TO PROPERTY OWNED IN
appointment of administrator COMMON AND FULL OWNERSHIP OVER HIS/HER IDEAL
6. No prescription to run in favor co-owner as long as he SHARE
recognizes co-ownership; requisites for acquisition
through prescription:
a. He has repudiated through unequivocal acts Q: Distinguish right to property owned in common and full
b. Such act of repudiation is made known to other co- ownership over his/her ideal share
owners
c. Evidence must be clear and convincing A:
7. Co-owners cannot ask for physical division if it would 1. Right to property owned in common
render thing unserviceable; but can terminate co-
ownership. Each co- owner is granted the right to use the property
8. After partition, duty to render mutual accounting of owned in common for the purpose for which it is intended.
benefits and reimbursements for expenses.
rd There are two restrictions in the enjoyment of this right:
Q: What are the rights of a co-owner to 3 parties?
a. The co- ownership shall not be injured; and

A: b. The exercise shall not prevent the other co-
1. Assignees may take part in division and object if being owners from using the property according to their
effected without their concurrence, but cannot own rights.
impugn unless there is fraud or made not withstanding
their formal opposition.
2. Full ownership over his/her ideal share
2. Non-intervenors – Retain rights of mortgage and
servitude and other real rights and personal rights
belonging to them before partition was made. A co- owner has full ownership of his share (undivided
interest) and the fruits and benefits arising therefrom.
Q: Borromeo, a co-owner of a parcel of land, allowed Being the full owner thereof he may alienate, assign or
Resuena to reside in said land. After sometime, Borromeo mortgage it; he can also substitute another person in the
later demands that Resuena should vacate the property, enjoyment of his share, except only when personal rights
but the latter refused. May Borromeo file an ejectment are involved.
suit even if he is a mere co-owner of the lot?
ACTS OF ALTERATION
A: Yes. Art. 487 of the Civil Code which provides that
“Anyone of the co-owners may bring an action in Q: What is an alteration?
ejectment” is a categorical and an unqualified authority in
favor of Borromeo to evict Resuena from the portion A: Alteration is a change which is more or less permanent,
occupied. Borromeo’s action for ejectment against Resuena which changes the use of the thing and which prejudices
is deemed to be instituted for the benefit of all co-owners the condition of the thing or its enjoyment by the others.
of the property. (Resuena v. CA, G.R. No. 128338, March 28, (Paras, p.344)
2005)
Q: What does alteration include?
Q: Does the filing of an ejectment suit require the consent
of the other co-owners? A: It includes the act by virtue of which a co-owner changes
the thing from the state in which the others believe it
A: No. Art. 487 states that “Any one of the co-owners may should remain. It is not limited to material charges (Viterbo
bring action for ejectment”. The law does not require that v. Quinto, 35226-R, December19, 1973).
consent of the co-owners must be first secured before
bringing an action for ejectment.

PROPERTY
Q: Distinguish acts of administration from acts of RIGHT TO PARTITION
alteration.
Q: What are the rights of co-owners as to the ideal share
A: of each?
ACTS OF
ACTS OF ALTERATION A: FARTS
ADMINISTRATION
1. Each has Full ownership of his part and of his share of
the fruits and benefits;
Acts, by virtue of which, a co- 2. Right to Alienate, dispose or encumber;
Refer to the owner, in opposition to the 3. Right to Renounce part of his interest to reimburse
enjoyment, expressed or tacit agreement of necessary expenses incurred by another co-owner;
exploitation, alteration all the co-owners, and in 4. Right to enter into Transaction affecting his ideal
of the thing which do violation of their will, chang the share;
not affect its thing from the state in which the
substance, form, or others believe it would remain, Note: The transaction affects only his ideal share not that of
purpose or withdraws it from the use to the other co-owners.
which they believe it is intended
5. Right to Substitute another person in its enjoyment,
except when personal rights are involved.
Transitory in character Permanent
Note: Personal rights or jus in personam is the power
belonging to one person to demand from another, as a
Do not affect the Affect or relate the substance or
definite passive subject-debtor, the fulfillment of a prestation
substance or form essence of the thing to give, to do, or not to do. (Paras, p.773)
In relation to the right Q: What is the rule as regards to the right to demand
of a co-owner, they Require the consent of all co- partition?
require the consent of owners
the majority A: GR: Every co-owner has the right to demand partition.
Can be exercised by XPNs: EAS-PAUL

Must be exercised by the co-
the co-owners through 1. When partition would render the thing
owners themselves
others Unserviceable; or
2. When the thing is essentially Indivisible;
3. When partition is prohibited by Law by reason of
Q: What is the liability of a co-owner who makes an
their origin or juridical nature- ex. party walls and
alteration without the express or implied consent of the
fences;
others? 4. When the co-owners Agree to keep the property
undivided for a period of time but not more than
A: He shall: LDP 10 yrs;
1. Lose what he has spent; 5. When partition is Prohibited by the transferor
2. Be obliged to Demolish the improvements done; and (donor / testator) but not more than 20 yrs;
3. Pay for the loss and damages the community
property or other co-owners may have suffered. Note: 10 years ordinary prescription, 30 years extra-
ordinary partition.
Note: Estoppel will operate against the co-owners who were aware
of the execution of the acts of alteration, but did not object 6. When a co-owner possessed the property as an
thereto. They are deemed to have given their implied consent. (3 Exclusive owner for a period sufficient to acquire
Manresa 469-470)
it through prescription. (Acquisitive Prescription)
7. When Co-owners may agree that it be Allotted to
Q: What is conversion?
one of them reimbursing the others;
8. If they cannot agree, may Sell the thing and
A: It refers to the act of using or disposing of another’s
distribute the proceeds.
property without lawful authority to do so in a manner
different from that with which a property is held by the
Q: May the right to ask for partition be waived or
trustees to whom the owner had entrusted the same. It is
renounced permanently?
not necessary that the use for which the property is given
be directly to the advantage of the person misappropriating
A: No, such waiver or renunciation is void.
or converting the property of another (People v. Carballo,
17136-CR, November 17, 1976).
Q: Can prescription run in favor of or against a co-owner?
A: GR: As long as he expressly or impliedly recognizes the

co-ownership, it cannot.

CIVIL LAW
Reason: Possession of a co-owner is like that of a trustee Q: Should creditors and/or assignees be notified of the
and shall not be regarded as adverse to the other co- proposed partition?
owners but in fact is beneficial to all of them. Acts
considered adverse to strangers may not be considered A: The law does not require that a notification be given but:
adverse insofar as co-owners are concerned (Salvador v. 1. If notice is given- It is their duty to appear to
CA, G.R. No. 109910, Apr. 5, 1995). concur /oppose, otherwise creditor’s claims are
deemed waived.
XPN: Co-owner's possession may be deemed adverse to 2. If no notice is given- creditors and/or assignees
the cestui que trust or the other co-owners provided the may still question the partition made.
following elements must concur:
1. That he has performed unequivocal acts of Note: Third persons who have rights attached to the community
repudiation amounting to an ouster of the cestui property before its partition, shall retain such rights even after the
que trust or the other co-owners; partition of the property. The protection granted by law applies to
both real and personal rights. (Pineda, p. 254)
2. That such positive acts of repudiation have been
made known to the cestui que trust or the other
Q: Can a partition already executed or implemented be
co-owners; and
still impugned?
3. That the evidence thereon must be clear and
convincing (Salvador v. CA, G.R. No. 109910, Apr.
A: GR: No.
5, 1995).
XPN:
Note: Prescription begins to run from the time of
repudiation.
1. In case of fraud, regardless of notification and
opposition;
Example of acts of repudiation: filing of an action to: 2. In case of partition was made over their objection
1. Quiet title; or even in absence of fraud (Article 497)
2. Recovery of ownership.
Q: What are the remedies available to co-owners where
XPN to XPN: Constructive trusts can prescribe. the co-owned property cannot be physically divided
Express trust cannot prescribe as long as the without rendering it useless or unserviceable?
relationship between trustor and trustee is
recognized. (Paras, p. 362) A:
1. Agree on the allotment of the entire property to one of
Q: The two lots owned by Alipio were inherited by his 9 them who in turn will indemnify the others for their
children, including Maria, upon his death. Pastor, Maria’s respective interests; or
husband, filed a complaint for quieting of title and 2. Sell the property and distribute the proceeds to the co-
annulment of documents against the spouses Yabo, owners. (Pineda, p.252)
alleging that he owned a total of 8 shares of the subject
lots, having purchased the shares of 7 of Alipio's children Q: What are rights of co-owners are not affected by
and inherited the share of his wife, Maria, and that he partition?
occupied, cultivated, and possessed continuously, openly,
peacefully, and exclusively the parcels of land. He prayed A: MRS-P
that he be declared the absolute owner of 8/9 of the lots. 1. Rights of:
His co-heirs then instituted an action to partition the lots. a. Mortgage;
Did Pastor acquire by prescription the shares of his other b. Servitude;
co-heirs or co-owners? c. any other Real rights existing before
partition.
A: No. The only act which may be deemed as repudiation by 2. Personal rights pertaining to third persons against
Pastor of the co-ownership over the lots is his filing of an the co-ownership (Art. 499, NCC)
action to quiet title. The period of prescription started to
run only from this repudiation. However, this was tolled Illustration: A, B and C where co-owners of parcel of land
when his co-heirs, instituted an action for partition of the mortgaged to M. If A, B, and C should physically partition
lots. Hence, the adverse possession by Pastor being for only the property, the mortgage in M’s favor still covers all the
about 6 months would not vest in him exclusive ownership three lots, which, together, formerly constituted one single
of his wife's estate, and absent acquisitive prescription of parcel. If A alone had contracted an unsecured obligation,
ownership, laches and prescription of the action for he would of course be the only one responsible. (Paras, p.
partition will not lie in favor of Pastor (Salvador v. CA, G.R. 376)
No. 109910, Apr. 5, 1995).
Q: What are the rights of third persons in case of
partition?
A:
1. The partition of a thing owned in common shall not
prejudice third persons, who shall retain the rights of

PROPERTY
mortgage, servitude or nay other real rights belonging WAIVER
to them before the division was made;
2. Personal rights pertaining to them against the co- Q: May a co-owner opt not to contribute to the expenses
ownership shall also remain in force, notwithstanding for the preservation of the property? How?
the partition.
A: GR: Yes, by renouncing his undivided interest equal to
RIGHT TO CONTRIBUTIONS FOR EXPENSES the amount of contribution.
XPN: If the waiver or renunciation is prejudicial to the

Q: What are the expenses which the co-owners can be
co-ownership, otherwise he cannot exempt himself
compelled to contribute?
from the contribution (Art. 488)
A: Only necessary expenses. Useful expenses and those for
Note: The value of the property at the time of the renunciation will
pure luxury are not included. be the basis of the portion to be renounced.
Q: Differentiate necessary, useful and expenses of pure Q: Is the failure or refusal of a co-owner to contribute pro
luxury. rata to his share in expenses tantamount to renunciation?
A: Necessary expenses are those made for the preservation A: No, there must be an express renunciation, otherwise he
of the thing, or those without which the thing would is required to reimburse the others for the expenses they
deteriorate or be lost, or those that augment the income of incurred.
the things upon which are expended, or those incurred for
cultivation, production, upkeep, etc. (Mendoza v De Q: What is the effect of renunciation?
Guzman, 52 Phil. 171)
A: It is in effect a dacion en pago since there is a change in
Useful expenses incurred for the preservation of the realty the object of the obligation (i.e. from sum of money to
in order that it may produce the natural, industrial, and civil interest in the co-ownership). Consequently, the consent of
fruits it ordinarily produce. (Marcelino v. Miguel, 53 OG the other co-owners is necessary.
5650)
Note: Dacion en pago is a juridical concept whereby a debtor pays
Ornamental expenses add value to the thing only for off his obligations to the creditor by the conveyance of ownership
certain persons in view of their particular whims, neither of his property as an accepted equivalent of performance or
essential for preservation nor useful to everybody in payment. The end result may be the same, but the concept is
general. entirely different from that of a purchase (Damicog v. Desquitada,
CV – 43611, October 3, 1983).
Q: When may acts of preservation made in the property of
the co-owners? Q: Can the renunciation be made without the consent of
any unpaid creditor?
A: At the will of one of the co-owners, but he must, if
practicable, first notify the others of the necessity of such A: No, for it is in effect a novation by substitution, it will
repairs. prejudice the rights of the unpaid creditor.
Q: What are those acts which require the majority consent Note: Novation by substitution is the substitution of the person of
the debtor.
of the co-owners?
A: IME RIGHT OF REDEMPTION OF CO-OWNERS SHARE

a. Management
b. Enjoyment Q: Whose shares may a co-owner redeem?
c. Improvement or embellishment
A: The shares of all or any other co-owner if sold to a third
Q: What is the remedy in case the minority opposes the person.
decision of the majority in co-ownership?
Q: What if two or more co-owners want to redeem?
A: Minority may appeal to the court against the majority’s
decision if the same is seriously prejudicial. A: They may do so in proportion to the shares they
respectively have.
Q: Who shall decide on matters relating to expenses for
the improvement or embellishment of the thing? Q: What is the effect of redemption by a co-owner?
A: Expenses to improve or embellish the thing shall be A: Redemption of the whole property by a co-owner does
decided upon by the majority. (Art. 489, NCC) not vest in him sole ownership over said property.
Redemption within the period prescribed by law will inure
Note: There is no majority unless the resolution is approved by the to the benefit of all co-owners. Hence, it will not put an end
co-owners who represent the controlling interest in the object of
the co-ownership (par. 2 Art. 492)

CIVIL LAW
to existing co-ownership (Mariano v. CA, GR. No. 101522, TERMINATION/EXTINGUISHMENT
May 28, 1993).
Q: How is co-ownership extinguished?
Q: Fortunato, his siblings and mother are co-owners of a
parcel of land. Lumayno purchased the shares of A: CALSTEP
Fortunato’s co-owners. When Fortunato died, his wife 1. Consolidation or merger in one co-owner;
claimed that she has the right of redemption over the 2. Acquisitive prescription in favor of a third person or a
shares previously sold by the co-owners to Lumayno co-owner who repudiates;
because they have not formally subdivided the property. 3. Loss or destruction of thing co-owned;
However, although the lot had not yet been formally 4. Sale of thing co-owned;
subdivided, still, the particular portions belonging to the 5. Termination of period agreed upon;
co-owners had already been ascertained. In fact the co- 6. Expropriation;
owners took possession of their respective parts. Can 7. Judicial or extra-judicial Partition.
Fortunato’s wife be entitled to right of legal redemption?
A: No, she is no longer entitled to the right of legal EFFECT OF PARTITION

redemption under Art. 1632 of the NCC. As legal
redemption is intended to minimize co-ownership, once the Q: What are the effects of partition?
property is subdivided and distributed among the co-
owners the community ceases to exist and there is no more A:
reason to sustain any right of legal redemption. The 1. It confers upon the co-owner exclusive title over the
exercise of this right presupposes the existence of a co- property adjudicated to him (Art. 1091);
ownership at the time the conveyance is made by a co- 2. Possession of the co-owner over the property
owner and when it is demanded by the other co-owners. adjudicated to him shall be deemed exclusive for the
Even an oral agreement of partition is valid and binding period during which the co-possession lasted (Art. 543,
upon the parties (Vda. de Ape v. CA, G.R. No. 133638, Apr. NCC). In other words, it is deemed continuous.
15, 2005).
RIGHTS AGAINST INDIVIDUAL CO-OWNERS IN CASE OF
Q: Villaner, upon death of his wife, sold the conjugal PARTITION
property to Leonardo. Villaner’s 8 children, as co-owners
of the property, now claim that the sale does not bind
them as they did not consent to such undertaking. Is the Q: What are the obligations of co-owners upon partition?
sale binding on the children?
A: WARD
A: No. While a co-owner has the right to freely sell and 1. Mutual Accounting for benefits received, fruits and
dispose of his undivided interest, nevertheless, as a co- other benefits
owner, he cannot alienate the shares of his other co- 2. Mutual Reimbursements for expenses
owners. The disposition made by Villaner affects only his 3. Indemnity for Damages caused by reason of
share pro indiviso, and the transferee gets only what negligence/fraud
corresponds to his grantor's share in the partition of the 4. Reciprocal Warranty for defects of title and quality of
property owned in common. The property being conjugal, the portion assigned to the co-owner (Art. 500-501)
Villaner's interest in it is the undivided one-half portion.
When his wife died, her rights to the other half was vested PARTITION IN CASE CO-OWNERS CANNOT AGREE
to her heirs including Villaner and their 8 legitimate
children. Q: How is partition effected?
Q: What is the status of the sale? Is it valid, void or A:
voidable? 1. By agreement between the parties; or
2. By judicial proceedings (Art. 496)
A: A sale of the entire property by one co-owner without
the consent of the other co-owners is valid. However, it will
Q: What is the remedy in case the co-owners cannot agree
only affect the interest or share in the undivided property
in the partition?
of the co-owner who sold the same.
A: If realty is involved, an action for partition (under Rule 69
Q: What is the remedy of the other heirs in this case?
of the Rules of Court) against the co-owners may be filed. In
case of personality and actual partition could not be made,
A: The proper action in cases like this is not for the
it may be sold under the discretion of the court and the
nullification of the sale or the recovery of possession of the
proceeds be divided among the owners after deducting the
thing owned in common from the third person who
necessary expenses
substituted the co-owner or co-owners who alienated their
shares, but the division of the common property or that is,
an action for partition under Rule 69 of the Revised Rules of
Court (Acabal v. Acabal, G.R. No. 148376, March 31, 2005).

PROPERTY
Q: What is the rule in case the co-owners cannot agree as 5. In the Concept of an owner (en concepto de dueno)–
to the partition of a thing which is essentially indivisible? possessor, by his actions, is believed by others as the
owner, whether he is in good or bad faith
A: 6. In the concept of a Holder – possessor holds it merely
1. Firstly, the property may be allotted to one of the co- to keep or enjoy it, the ownership pertaining to
owners, who shall indemnify the other; another; ex. usufructuary
2. Otherwise, it shall be sold, and the proceeds
distributed. (Art. 498) Note: None of these holders may assert a claim of ownership
for himself over the thing but they may be considered as
POSSESSION possessors in the concept of an owner, or under a claim of
ownership, with respect to the right they respectively
exercise over the thing.
CHARACTERISTICS
7. Possession in Good faith
Q: What is possession? 8. Possession in Bad faith
A: Possession is the holding of a thing or the enjoyment of a Note: Only personal knowledge of the flaw in one’s title or
right (Art. 523) mode of acquisition can make him possessor in bad faith. It is
not transmissible even to an heir.
Q: What are the requisites of possession?
Possession in good faith ceases from the moment defects in
A: PAP his title are made known to the possessor.
1. Possession in fact or holding or control of a thing
or right; 9. Constructive possession- does not mean that a man
2. Animus possidendi or the deliberate intention to has to have his feet on every square meter of ground.
possess;
3. Possession by virtue of one’s own right Q: What kind of possession can serve as title?
Q: What is the distinction between Right to Possession A: Possession with title in fee simple.
and Right of Possession?
Q: Differentiate possession and occupation
A: Right to Possession is an incident or attribute of
A:
ownership over a thing. It is also known as jus possidendi,
POSSESSION OCCUPATION
and attribute of ownership. On the other hand, Right of
Apply to properties whether Applies only to property
Possession is an independent right, separate from
with or without an owner without an owner
ownership. It is also known as jus possessiones.
Possession does not confer Occupation confers
ownership ownership
Q: What are the degrees of possession? Distinguish.
There can be no
There can be possession
A: NJJS occupation without
without ownership
1. Possession with No right or title- possessor knows that ownership
his possession is wrongful,
2. With Juridical title - possession peaceably acquired and Q: Is it possible for a person who has been declared as the
will not ripen into full ownership as long as there is no owner of a certain property not to be entitled to its
repudiation of the concept under which property is possession?
held.
3. With Just title or title sufficient to transfer ownership, A: Yes. Possession and ownership are distinct legal
but not from the true owner - ripens to full ownership concepts. Ownership confers certain rights to the owner
by the lapse of time. among which are the right to enjoy the thing owned and
4. With a title in fee Simple - springs from ownership; the right to exclude other persons from possession thereof.
highest degree of possession. On the other hand, possession is defined as the holding of a
thing or the enjoyment of a right. Literally, to possess
means to actually and physically occupy a thing with or
Q: What are the classes of possession?
without a right. Thus a person may be declared an owner
but not entitled to possession (Heirs of Roman Soriano v.
A: OVAL-OH-GBC
CA, GR No. 128177, August 15, 2001).
1. In one’s Own name – possessor claims the thing for
himself Note: Possession is merely one of the attributes ownership. (Jus
2. Voluntary – by virtue of an agreement Possidendi)
3. In the name of Another – held by the possessor for
another; agent, subject to authority and ratification; if
not authorized, negotiorum gestio
4. Legal – by virtue of law;
e.g. possession in behalf of incapacitated

CIVIL LAW
ACQUISITION OF POSSESSION Q: When does possession in good faith cease?
Q: What are the ways of acquiring possession? A: Possession in good faith ceases from the moment
defects in his title are made known to the possessor.
A: FAMS
1. By Material occupation/exercise of a right This interruption of good faith may take place:
2. By Subjection of the thing/right to our will 1. at the date of summons or
3. By proper Acts and legal Formalities established for 2. that of the answer if the date of summons does
acquiring such right (Art. 531) not appear at the date
Q: What are the essential elements of possession? Q: What is the effect in case possession ceases to be in
good faith?
A:
1. Corpus –refers to the existence of the thing and its A: Possessor in bad faith is required to pay rent or in case
holding; and vacate the property, in both cases he is required to pay
2. Animus – refers to the intent to possess the thing. damages to the lawful owner or possessor of the property.
Q: What if the possession is acquired by a stranger? Q: Jose offered to sell his lot to Rosario which the latter
accepted. They executed a document containing the sale.
A: Where possession is acquired not by an agent or Later, Rosario sought the execution of the formal deed of
representative but by a stranger without agency, sale, but Jose could not continue the sale because he sold
possession is not acquired until the act of the agent or the lot to Emma with whom he executed a formal deed of
representative is ratified (Art. 532). sale. Informed that the sale in favor of Emma was not
registered, Rosario registered her adverse claim. Later,
Q: What are the acts which do not give rise to possession? Emma registered her deed of sale and a TCT was issued to
her but with Rosario’s adverse claim. Emma then took
A: Possession through: FAT-V possession of the lot. Who has a better right to the land?
1. Force or intimidation as long as there is a possessor
who objects thereto. (Art. 536) A: Rosario. To merit the protection of Art 1544 (double
2. Acts executed clandestinely and without the sale) it is essential that the buyer of the realty must act in
knowledge of the possessor which means that: good faith in registering his deed of sale. Rosario’s prior
a. acts are not public; and purchase of the land was made in good faith; she was the
b. unknown to the owner or possessor only buyer at that time. Her good faith did not cease after
3. Mere Tolerance by the owner or the lawful possessor. Jose told him of the second sale to Emma. Because of that
4. Acts executed by Violence. (Art 537) information, Rosario wanted an audience with Emma but
was snubbed by the latter. In order to protect her right,
Q: What kind of possession can serve as a title for Rosario registered her adverse claim. Said recording is
acquiring dominion? deemed to be in good faith and emphasize Emma’s bad
faith (Carbonell v.CA G.R. No. L-29972, January 26, 1976).
A: Only the possession acquired and enjoyed in the concept
of owner. (Art. 540) Q: Is Emma entitled to the improvements she introduced
in the lot?
EFFECTS OF POSSESSION
A: No. Emma’s rights to the improvements she introduced
POSSESSOR IN GOOD FAITH are governed by Arts. 546 and 547 (necessary and useful
expense made by possessor in good faith). These provisions
Q: When is a possessor in good faith? seem to imply that the possessor in bad faith has neither
the right of retention of useful improvements nor the right
A: When he is not aware that there exists in his title or to demand refund for useful expenses (Carbonell v.CA G.R.
mode of acquisition any flaw which invalidates it. (Art. 526) No. L-29972, January 26, 1976).
Q: What are the requisites in order to be considered a Q: What are the rights of a possessor?
possessor in good faith?
A:
A: GOOD FAITH BAD FAITH
1. Ostensible title or mode of acquisition As to fruits received
2. Vice or defect in the title Reimburse fruits received or
3. Possessor is ignorant of the vice or defect and must Entitled while possession is
which lawful possessor
have an honest belief that the thing belongs to him. in good faith
would have received
As to pending fruits
Liable to the lawful No right to such pending
possessor for expenses of fruits

PROPERTY
cultivation and shall share Q: Who is entitled to reimbursement for necessary

in net harvest to time of expenses?
possession
As to expenses: A: Every possessor, whether the possessor is in good faith
(Necessary expenses) or bad faith.
Right of reimbursement and Right of reimbursement and
retention retention Note: However, only the possessor in good faith may retain the
(Useful expenses) thing until he has been reimbursed. (Art. 546)
Right of removal No right of removal
(Ornamental Expenses) Q: What are useful expenses?
Reimbursement at owner’s
option, however, removal
No reimbursement A: Those which increase the value or productivity of the
can be effected provided no
property.
injury is incurred
As to liability in case of deterioration or loss
No liability, unless due to Always liable for Q: Who has the right to be refunded for useful expenses?
his fault/negligence deterioration or loss
A: Only to the possessor in good faith with the same right
RIGHT TO PENDING FRUITS of retention as in necessary expenses. (Art. 546)
Q: When are fruits considered received? Q: What is the effect of voluntary surrender of property?
A: A: It is a waiver of the possessor’s right of retention but his
1. Natural and industrial fruits- from the time they are right to be refunded may still be enforced, unless he also
gathered or severed waived the same.
2. Civil fruits - from the time of their accrual and not their
actual receipt. (Art. 544) Q: May a possessor remove the useful improvements he
introduced?
Q: What if there are ungathered natural or industrial fruits
at the time good faith ceases?
A: Yes, but only by a possessor in good faith and only when
A: The possessor shall share in the expenses of cultivation, no substantial damage or injury would be caused to the
net harvest, and charges in proportion to the time of principal thing. (Art. 547)
possession. (Art 545)
Note: However, this right of removal is only subordinate to the
Q: What are the options of the owner in case there are owner’s right to keep the improvements himself by paying the
pending fruits at the time good faith ceases? expenses incurred or the concomitant increase in the value of the
property caused by the improvements.
A:
1. To pay the possessor in good faith indemnity for his EXPENSES FOR PURE LUXURY
cultivation expenses and charges and his share in the
net harvest; or Q: What are luxurious expenses?
2. To allow him to finish the cultivation and gathering of
the growing fruits.
A: Expenses incurred for improvements introduced for pure
luxury or mere pleasure.
Q: What if the possessor refuses, for any reason, to finish
the cultivation and gathering?
Q: Are luxurious expenses refundable?
A: He forfeits the right to be indemnified in any other
manner. (Art. 545, par. 3) A: No, even if the possessor is in good faith.
RIGHT TO BE REIMBURSED Note: But he may remove the luxurious improvements if the
principal thing suffers no injury thereby, and if his successor in the
NECESSARY AND USEFUL EXPENSES possession does not prefer to refund the amount expended. (Art.
548)
Q: What are necessary expenses?
POSSESSOR IN BAD FAITH
A: Expenses incurred to preserve the property, without
which, said property will physically deteriorate or be lost. Q: When is a possessor in bad faith?
A: When he is aware that there exists in his title or mode of

acquisition any flaw which invalidates it.

CIVIL LAW
Note: Only personal knowledge of the flaw in one’s title or mode of application, Dolorico named Martin, as his heir and
acquisition can make him a possessor in bad faith. successor in interest. Martin later relinquished his rights in
favor of Quirino his grandson and requested the Director
Q: When is good or bad faith material or immaterial? of Lands to cancel the homestead application which was
granted. Quirino filed his sales applications and the said
A: It is important in connection with the property was awarded to him being the only bidder. Is
1. receipt of fruits, Ortiz entitled to right of retention?
2. indemnity for expenses, and
3. acquisition of ownership by prescription. A: Yes. A possessor in good faith has the right of retention
of the property until he has been fully reimbursed for all
It becomes immaterial when the right to recover is the necessary and useful expenses made by him on the
exercised. (Art. 539) property. Its object is to guarantee the reimbursement for
the expenses, such as those for the preservation of the
Q: What are the liabilities of possessor in bad faith property, or for the enhancement of its utility or
regarding fruits? productivity. It permits the actual possessor to remain in
possession while he has not been reimbursed by the person
A: who defeated him in the possession for those necessary
(a) As to fruits already received or gathered: expenses and useful improvements made by him on the
thing possessed (Ortiz v. Kayanan, G.R. No. L-32974, July 30,
- return the fruits if still existing or pay their value if already 1979).
consumed or spent,
- pay the value of the fruits which the legitimate possessor Q: What is the rule when two or more persons claim
could have received were it not for his dispossession, but possession over the same property?
deducting the expenses for cultivation, gathering and
harvesting to prevent unjust enrichment on the part of the A: It depends.
latter. GR: Possession cannot be recognized in two different
personalities
(b) As to growing, pending or ungathered fruits:
- no right whatsoever on the pending, growing or XPN: In case of co-possession when there is no conflict.
ungathered fruits,
- not entitled to be reimbursed for expenses for cultivation. Q: What are the criteria in case there is a dispute of
possession of 2 or more persons?
(c) As additional liability:
- pay for damages A: Criteria in case of dispute: A2DE
1. Present/Actual possessor shall be preferred
Q: What are the requisites to constitute possession 2. If there are 2 possessors, the one longer in
whether in good faith or in bad faith? possession
3. If the Dates of possession are the same, the one
A: with a title
1. Possessor has a title/mode of acquisition;
2. There is a flaw or defect in said title/mode; If all of the above are Equal, the fact of possession shall be
3. The possessor is aware or unaware of the flaw or judicially determined, and in the meantime, the thing shall
defect. be placed in judicial deposit. (Art. 538)
Q: May mistake upon a doubtful questions or difficult Q: What are the acts which do not give rise to possession?
question of law be the basis of possession in good faith?
A: Possession through: FAT-V
A: Yes. Mistake upon a doubtful or difficult questions of law 1. Force or intimidation as long as there is a possessor
(provided such ignorance is not gross and therefore who objects thereto. (Art. 536)
inexcusable) may be a basis of good faith. It is true that 2. Acts executed clandestinely and without the
“ignorance of the law excuses no one” but error in the knowledge of the possessor which means that:
application of the law, in the legal solutions arising from a. acts are not public; and
such application, and the interpretation of doubtful b. unknown to the owner or possessor
doctrine can still make a person ignorance of the law may 3. Mere Tolerance by the owner or the lawful possessor.
be based on an error of fact. (Paras, p. 463) 4. Acts executed by Violence. (Art 537)
Note: Mistake upon a doubtful or difficult question of law refers to Q: What kind of possession can serve as a title for
the honest error in the application or interpretation of doubtful or acquiring dominion?
conflicting legal provisions/doctrines, and not to the ignorance of
the law. (Art. 526, par. 3) A: Only the possession acquired and enjoyed in the concept
of owner. (Art. 540)
Q When Dolorico died, his guardian Ortiz continued the
cultivation and possession of the property, without filing
any application to acquire title. In the homestead
PROPERTY
LOSS OR UNLAWFUL DEPRIVATION OF A MOVABLE c. Possessor is in the concept of an owner.
Q: What is a lost thing? Q: Is the possession of movable property acquired in good

faith equivalent to a title?
A: It is one previously under the lawful possession and A: Yes.
control of a person but is now without any possessor.
GR: Doctrine of irrevindicability - The possession of movable
Note: An abandoned property is not considered as a lost thing. property acquired in good faith is equivalent to title.
(Pineda Property, 1999, p. 503)
Note: This is merely presumptive as it can be defeated by
Q: What is the duty of a finder of a lost movable? the true owner. (Art. 559)
A: Whoever finds a lost movable, which is not a treasure, XPNs:

must return it to its previous possessor. If the latter is 1. When the owner has lost; or
unknown, the finder shall immediately deposit it with the 2. Has been unlawfully deprived of a movable.
mayor of the city or municipality where the finding has In which case the possessor cannot retain the
taken place. thing as against the owner, who may recover it
without paying any indemnity
Note: The mayor in turn must publicly announce the finding of the
property for two consecutive weeks. XPN to the XPNs: Where movable is
acquired in good faith at a public sale,
Q: When is public auction of the lost movable authorized? the owner must reimburse to recover.
(Art. 559 par. 2)
A: If the movable cannot be kept without deterioration, or
without expenses which considerably diminish its value, it Q: Using a falsified manager's check, Justine, as the buyer,
shall be sold at public auction eight days after the was able to take delivery of a second hand car which she
publication. had just bought from United Car Sales. Inc. The sale was
registered with the Land Transportation Office. A week
Q: May the lost movable be awarded to the finder? later, the United Car Sales learned that the check had
been dishonored, but by that time, Justine was nowhere
A: Yes. If the owner or previous possessor did not appear to be seen. It turned out that Justine had sold the car to
after 6 months from the publication, the thing found or its Jerico, the present possessor who knew nothing about the
value or proceeds if there was a sale, shall be awarded to falsified check. In a suit filed by United Car Sales. Inc.
the finder. The finder, however, shall pay for the expenses against Jerico for recovery of the car, United Car Sales
incurred for the publication. (Art. 719) alleges it had been unlawfully deprived of its property
through fraud and should, consequently, be allowed to
Q: What is the duty of the owner who appeared? recover it without having to reimburse the defendant for
the price the latter had paid. Should the suit prosper?
A: (1998 Bar Question)
1. Give a reward to the finder equivalent to one-tenth
(1/10) of the sum or of the price of the thing found. A: Yes, the suit should prosper because the criminal act of
(Art. 720) estafa should be deemed to come within the meaning of
2. Reimburse to the finder for the latter’s expenses unlawful deprivation under Art. 559, NCC, as without it
incurred for the preservation of the thing. (Art. 546) United Car Sales would not have parted with the possession
and expenses spent for the location of the owner of its car.
3. Reimburse the expenses for publication if there was a
public auction sale. (Pineda Property, 1999, p. 505) Note: The possession of movable property acquired in good faith is
equivalent to a title. Nevertheless, one who has lost any movable
FINDER OF LOST MOVABLE or has been unlawfully deprived thereof, may recover it from the
person in possession of the same. (Art. 559, Civil Code)
Q: What is the right of a possessor who acquires a
movable claimed by another? DISTINGUISHED FROM VOIDABLE TITLE
A: Q: What is the rule in case the seller of a thing has

1. Bad faith - no right voidable title on the thing sold?
2. Good faith- presumed ownership. It is equivalent to
title. A: Where the seller of goods has a voidable title thereto,
but his title has not been avoided at the time of the sale,
Requisites: the buyer acquires a good title to the goods, provided he
a. possession in good faith buys them in good faith, for value, and without notice of
b. owner has voluntarily parted with the possession the seller's defect of title. (Art. 1506, NCC)
of the thing; and

CIVIL LAW
IN CONCEPT OF OWNER, HOLDER, IN ONE’S OWN NAME, Q: What are the rights of a possessor as regards
IN NAME OF ANOTHER NECESSARY EXPENSES?
RIGHTS OF THE POSSESSOR A:

GOOD FAITH BAD FAITH
Q: What are the rights of a possessor?
1. Right to refund; Right to refund
2. Right of retention;
A: RPR
1. to be Respected in his possession
Note: During his possession, he is not
2. to be Protected in said possession by legal means
obliged to pay rent nor damages in case
3. to secure in an action for forcible entry the proper writ
he refuses to vacate the premises.
to Restore him in his possession (Art. 539, NCC)
Q: During his lifetime, Velasco acquired Lot A from Q: Why is there no right of retention in case of bad faith?
spouses Sacluti and Obial evidenced by a deed of sale. In
1987, spouses Padilla entered the said property as A: As punishment for his bad faith.
trustees by virtue of a deed of sale executed by the Rural
Bank. The Padilla’s averred that the Solomon spouses Q: Is there right of removal?
owned the property which was identified as Lot
B. However, it was proved during trial that the land A: None, whether in good faith or bad faith. Necessary
occupied by spouses Padilla was Lot A in the name of expenses affect the existence or substance of the property
Velasco, whereas the land sold by the bank to the spouses itself.
Padilla was Lot B. The heirs of Velasco demanded that
spouses Padilla vacate the property, but they refused. Note: Improvements be so incorporated to the principal
Thus, the heirs filed a complaint for accion publiciana. thing that their separation must necessarily reduce the
Who has the better right of possession? value of the thing not curable by ordinary repairs.
A: The heirs of Velasco has the better right. Accion Q: What are the rights of a possessor with regard to useful
publiciana, or for recovery of the right to possess is an expenses?
action filed in the RTC to determine the better right to
possession of realty independently of the title. The A: If in good faith:
objective of the plaintiffs in accion publiciana is to recover 1. Right to refund
possession only, not ownership. Lot A was the subject of a 2. Right of retention until paid
cadastral case. The OCT was issued to Sacluti and Obial who 3. Right of removal, provided:
sold the same to Artemio. From the date of sale, until a. without damage to the principal thing
Artemio’s death, he was in continuous possession of the b. subject to the superior right of the prevailing
land. party to keep the improvements by paying
the expenses or the increase in value of the
Q: Has the action already prescribed? thing
A: No. The remedy of accion publiciana prescribes after the Q: What are the rights of a possessor with regard to
lapse of ten years. In the present case, the action was filed expenses for pure luxury?
with the RTC in 1991. Spouses Padilla dispossessed the
heirs of Velasco of the property in 1987. At the time of the A:
filing of the complaint, only 4 years had elapsed from the GOOD FAITH BAD FAITH
time of dispossession. The real right of possession is not
Right of removal, Provided: same rights, but liable only
lost till after the lapse of 10 years (Spouses Padilla v.
1. without injury to for the value of the
Velasco, G.R. No. 169956, January 19, 2009).
principal thing; ornaments at the time he
2. successor in possession enters into possession, in
Q: What are the presumptions in favor of a possessor?
does not prefer to refund case he prefers to retain
A: GCENCE amount expended.
1. Good faith
2. Continuity of initial good faith
3. Enjoyment in the same character in which possession
was acquired until the contrary is proved
4. Non-interruption in favor of the present possessor
5. Continuous possession by the one who recovers
possession of which he was wrongfully deprived
6. Extension of possession of real property to all
movables contained therein.

PROPERTY
Q: What are other rights of possessor?
A:
With respect to GOOD FAITH BAD FAITH
On capital Charged to owner Charged to owner
Taxes and
On fruits Charged to possessor Charged to owner
Charges
Charges Pro rata Charge to owner
Possessor must return value of fruits already
received as well as value of fruits which the
Gathered or severed fruits Possessor is entitled to the fruits owner or legitimate possessor should be
entitled
(does not apply to possessor in BF)
Cultivation expenses of gathered Possessor is not entitled to be
Possessor is entitled to be reimbursed
fruits reimbursed
Share pro-rata between possessor and
Pending or ungathered fruits owner of expenses, net harvest, and Owner is entitled to the fruits
charges
indemnity to possessor in pro rata:
(owner’s option)
Production expenses of pending
a. money No indemnity
fruits
b. allowing full cultivation and
gathering of all fruits
Improvements no longer existing No reimbursement No reimbursement
Liability for accidental loss or Liable if acting with fraudulent intent
Liable in every case
deterioration or negligence, after summons
Improvements due to time or nature Inure to the owner or lawful possessor Inure to the owner or lawful possessor
Note: A possessor is protected regardless of the manner of acquisition.

CIVIL LAW
Q: May the owner of a property eject the possessor USUFRUCT
forcibly without court intervention?
CHARACTERISTICS
A: No. The owner must resort to the courts and cannot
forcibly eject a possessor (Bago v. Garcia, No. 2587, January Q: Discuss the concept of usufruct.
8, 1906).
A: It is the right of a person called usufructuary, to enjoy
LOSS/TERMINATION the property of another called the owner, with the
obligation of returning it at the designated time and
preserving its form and substance, unless the title
Q: How is possession lost?
constituting it or the law provides otherwise. (Pineda, 2009,
A: PRADA p. 387)
1. Possession of another subject to the provisions of Art.
537, if a person is not in possession for more than one Q: What are the characteristics of usufruct?
year but less than 10 years he losses possession de
fact. This means that he can no longer bring an action A: ENA
of forcible entry or unlawful detainer, since the 1. Essential – those without which it cannot be
prescriptive period is one year for such actions. But he termed as usufruct:
may still institute an accion publiciana to recover a. real right (whether registered in the registry
possession de jure, possession as a legal right or the of property or not);
real right of possession. (Paras, p. 548) b. constituted on property.
i. real
Note: Acts merely tolerated, and those executed ii. personal;
clandestinely and without the knowledge of the possessor of iii. consumable;
a thing, or by violence, do not affect possession. (Art. 537, iv. non-consumable;
Civil Code) v. tangible;
vi. intangible.
2. Abandonment c. temporary duration;
d. purpose: to enjoy the benefits and derive all
Note: Abandonment involves a voluntary renunciation advantages from the object as a
of all rights over a thing consequence of normal use or exploitation.
2. Natural – that which ordinarily is present, but a
Requisites:
contrary stipulation can eliminate it because it is
a. the abandoner must have been a possessor in the
not essential.
concept of owner (either an owner or mere
a. The obligation of conserving or preserving
possessor may respectively abandon either
the form and substance (value) of the thing.
ownership or possession)
b. Transmissible
b. the abandoner must have the capacity to
3. Accidental – those which may be present or
renounce or to alienate ( for abandonment is the
absent depending upon the stipulation of parties
repudiation of property right)
a. Whether it be pure or a conditional usufruct
c. there must be physical relinquishment of the
b. The number of years it will exist
thing or object
c. Whether it is in favor of one person or
d. there must be no spes recuperandi (expectation
several, etc.
to recover) and no more animus revertendi (
intention to return or get back) (Paras, pp. 344-
Q: Is the usufructuary bound to preserve the form and
345)
substance of the thing in usufruct?
3. Recovery of the thing by the legitimate owner
A: GR: Yes.
4. Destructionor total loss of the thing – a thing is lost
XPN: In case of an abnormal usufruct, whereby the law
when it perishes or goes out of commerce, or
or the will of the parties may allow the modification of
disappears in such a way that its existence is unknown,
the substance of the thing.
or it cannot be recovered. (Art. 1189, Civil Code)
Q: Chayong owned a parcel of land which she mortgaged
5. Assignment - complete transmission of the thing/right
to Michael. Upon the OCT was an annotation of
to another by any lawful manner.
usufructuary rights in favor of Cheddy. Is Michael obliged
to investigate Chayong’s title?
A: No. The annotation is not sufficient cause to require

Michael to investigate Chayong’s title because the latter’s
ownership over the property remains unimpaired despite
such encumbrance. Only the jus utendi and jus fruendi over
the property are transferred to the usufructuary. The

PROPERTY
owner of the property maintains the jus disponendi or the act mortis causa (e.g. in a last will and
power to alienate, encumber, transform, and even destroy testament)
the same. (Hemedes v. CA, G.R. Nos. 107132 and 108472, c. Mixed (or prescriptive) – created by both law
October 08, 1999) and act of the person (e.g. acquired by
prescription: I possessed in good faith a
Q: Differentiate usufruct from lease. parcel of land which really belonged to
another. Still in good faith, I gave in my will
A: CRONEC to X, the naked ownership of land and to Y,
USUFRUCT LEASE the usufruct. In due time, Y may acquire the
Nature of the right ownership of the usufruct by acquisitive
prescription.) (Paras, p. 572)
Real right only if, as in the case of a 2. As to Number of beneficiary
Always a real lease over real property, the lease is a. Simple – if only one usufructuary enjoys the
right registered, or is for more than one usufruct
year, otherwise it is a personal right b. Multiple – if several usufructuaries enjoy the
Creator of Right usufruct
Owner or his May not be the owner, as in the case i. simultaneous – at the same time.
agent of a sub-lessor or a usufructuary ii. successive – one after the other.
3. As to Extent of object:
Origin
a. Total – constituted on the whole thing
By contract, by way of exception by b. Partial – constituted only on a part
By law,
law (as in the case of an implied new 4. As to Subject matter:
contract,
lease, or when a builder has built in a. Over things
will of
good faith on the land of another a i. Normal (or perfect or regular) – involves
testator or
building, when the land is non consumable things where the form
by
considerably worth more in value and substance are preserved
prescription
than the building. ii. Abnormal (or imperfect or irregular) –
Extent of Enjoyment involves consumable things
b. Over rights – involves intangible property;
All fruits,
rights must not be personal or
uses and Only those particular or specific use.
intransmissible in character so present or
benefits
future support cannot be an object of
Cause usufruct.
A passive 5. As to Effectivity or extinguishment:
owner who a. Pure – no term or condition
allows the b. With a term – there is a period which may be
An active owner who makes the either suspensive or resolutory
usufructuary
lessee enjoy i. ex die – from a certain day
to enjoy the
object of ii. in diem – up to a certain day
usufruct iii. ex die in diem – from a certain day up to
Repairs and Taxes a certain day.
c. Conditional – subject to a condition which
Usufructuary may be either suspensive or resolutory.
pays for
ordinary
RIGHTS AND OBLIGATIONS OF USUFRUCTUARY
repairs and
Lessee is not obliged to pay for
pays for
repairs/taxes Q: What are the rights of the usufructuary as to the thing
annual
and its fruits?
charges and
taxes on the
A: RISERI-CR
fruits
1. To Receive the fruits of the property in usufruct and
half of the hidden treasure he accidentally finds on the
CLASSIFICATION property (Arts. 566, 438, NCC)
2. To enjoy any Increase which the thing in usufruct may
Q: What are the kinds of usufruct? acquire through accession (Art. 571, NCC)
3. To personally Enjoy the thing or lease it to another
A: ONES-E (Arts. 572-577, NCC)generally for the same or shorter
1. As to Origin: period as the usufruct
a. Legal – created by law such as usufruct of 4. To make such Improvements or expenses on the
the parents over the property of their property he may deem proper and to remove the
unemancipated children improvements provided no damage is caused to the
b. Voluntary – created by will of the parties property (Art. 579, NCC)
either by act inter vivos (e.g. donation) or by

CIVIL LAW
5. To Set-off the improvements he may have made on 3. Property which has been Appraised when
the property against any damage to the same (Art. delivered.
580, NCC)
6. To Retain the thing until he is reimbursed for advances Note: if it has not yet been appraised or if it is not a consumable:
for extraordinary expenses and taxes on the capital return the same quality (mutuum)
(Art. 612, NCC)
7. To Collect reimbursements from the owner for Q: What are the rights of the usufructuary as to advances
indispensable extra ordinary repairs, taxes on the and damages?
capital he advanced, and damages caused to him
8. To Remove improvements made by him if the same A: To be: ITD
will not injure the property 1. reimbursed for Indispensable extraordinary repairs
made by him
Q: 120-hectares of land from the NHA property were
reserved for the site of the National Government Center. 7 Note: The reimbursement shall be in the amount equal to the
increase in value of the property (Art. 594, NCC)
hectares from which were withdrawn from the operation.
These revoked lands were reserved for the Manila
2. reimbursed for Taxes on the capital advanced by him
Seedling Bank Foundation, Inc. (MSBF). However, MSBF
(Art. 597, par. 2, NCC)
occupied approximately 16 hectares and leased a portion
3. indemnified for Damages caused by usufructuary to
thereof to Bulacan Garden Corporation (BGC). BGC
the naked owner (Art. 581, NCC)
occupies 4,590 sqm. Implementing such revocation, NHA
ordered BGC to vacate its occupied area. BGC then filed a
Q: What are the rights of a usufructuary on pending
complaint for injunction. Has BGC any right over the
natural and industrial fruits?
leased premises?
A:
A: A usufructuary may lease the object held in usufruct. The
Fruits
owner of the property must respect the lease entered into Rights of the usufructuary
Growing:
by the usufructuary so long as the usufruct exists. MSBF
was given a usufruct over only a 7-hectare area. NHA At the
not bound to refund to the owner
cannot evict BGC if the 4,590 square meter portion MSBF beginning
the expenses of cultivation and
leased to BGC is within the 7-hectare area held in usufruct of the
production
by MSBF. However, the NHA has the right to evict BGC if usufruct
BGC occupied a portion outside of the 7-hectare area belong to the owner but he is bound
covered by MSBF's usufructuary rights (NHA v. CA, G.R. No. At the
to reimburse the usufructuary of
148830, Apr. 13, 2005). termination
the ordinary cultivation expenses
of the
(Art. 545, NCC) out of the fruits
Q: What are the rights of the usufructuary as to the usufruct
received (Art. 443, NCC)
usufruct itself?
Note: Civil fruits accrue daily, stock dividends and cash dividends
A: ARC are considered civil fruits.
1. To Alienate or mortgage the right of usufruct (Art. 572, Q: What if the expenses exceed the proceeds of the
NCC) growing fruits?
XPN: parental usufruct (Arts. 225, 226 FC) A: The owner has no obligation to reimburse the difference.
(Art. 567, NCC)
2. In a usufruct to Recover property/real right, to bring the
action and to oblige the owner thereof to give him the Q: May the usufructuary lease the thing in usufruct even
proper authority and the necessary proof to bring the without the owner’s consent
action (Art. 578, NCC)
A: Yes, but not being the owner, he cannot alienate, pledge
3. In a usufruct of part of a Common property, to exercise or mortgage the thing itself.
all the rights pertaining to the co-owner with respect to the
administration and collection of fruits or interests. Q: May the usufructuary alienate, pledge, or mortgage the
right of usufruct?
Q: Can usufructuary exercise acts of ownership?
A: Yes, he, being the owner of the right itself. (Art. 572,
A: GR: A usufructuary cannot exercise acts of ownership NCC)
such as alienation or conveyance.
XPNs: When what is to be alienated or conveyed is a:

CIA
1. Consumable’
2. Property Intended for sale;

PROPERTY
Q: Up to when may the transferee enjoy the rights b. Replace the young of animals that die or are lost
transferred to him by the usufructuary? or become prey when the usufruct is constituted
on a flock or herd of livestock;
A: Until the expiration of the usufruct. Transfer of c. Make ordinary repairs
usufructuary rights, gratuitous or onerous, is co-terminous d. Notify the owner of urgent extra-ordinary repairs
with the term of usufruct. e. Permit works & improvements by the naked
owner not prejudicial to the usufruct
Q: What happens if the thing subject of usufruct is f. Pay annual taxes and charges on the fruits
mortgaged by the owner? g. Pay interest on taxes on capital paid by the naked
owner
A: Usufructuary has no obligation to pay mortgage. But if h. Pay debts when usufruct is constituted on the
the same is attached, the owner becomes liable for whole patrimony
whatever is lost by the usufructuary. i. Secure the naked owner’s/court's approval to
collect credits in certain cases
Q: To what may the usufructuary be liable for? j. Notify the owner of any prejudicial act committed
rd
by 3 persons
A: For the damages suffered by the usufructuary on
k. Pay for court expenses and costs
account of fraud committed by him or through his
3. At the termination
negligence.
a. Return the thing in usufruct to the naked owner
unless there is a right of retention
Q: When is the usufructuary not liable?
b. Pay legal interest for the time that the usufruct
A: lasts
1. For deterioration due to wear and tear c. Indemnify the naked owner for any losses due to
2. For deterioration due to a fortuitous event his negligence or of his transferees
Note: If the animals all perish w/o fault but due to contagious
Q: What are the rights and obligations of the usufructuary disease/uncommon event –deliver remains saved. If the young of
with respect to consumable things? animals perished in part due to accident, usufruct continues on
remaining portion. If the usufruct is constituted on sterile animals,
A: The usufructuary shall have the right to make use of the they are considered as if fungible and have the obligation to
replace same kind and quality.
consumable thing. At the termination of the usufruct, the
usufructuary has the obligation to:
Q: What are the effects of failure to post a bond or
1. If the thing has been appraised, pay its appraised
security?
value;
2. If the thing has not been appraised:
A:
a. Return the same quantity and quality; or
1. The owner shall have the following options:
b. Pay its current price at such termination.
a. receivership of realty;
b. sale of movables;
Q: What if the damages exceed the value of the
c. deposit of securities; or
improvements?
d. investment of money; or
e. retention of the property as administrator.
A: The usufructuary is liable for the difference as indemnity.
2. The net product shall be delivered to the usufructuary;
3. The usufructuary cannot collect credit due or make
Q: What if the improvements exceed the amount of
investments of the capital without the consent of the
damages?
owner or of the court until the bond is given.
A: He may remove the portion of the improvements
Q: What are the effects of failure to give security?
representing the excess in value if it can be done without
injury; otherwise, the excess in value accrues to the owner.
A:
Q: Why do improvements accrue to the owner? 1. On the rights of the naked owner
a. May deliver the property to the usufructuary
A: Because there is no indemnity for improvements. b. May choose retention of the property as
administrator
Q: What are the obligations of the usufructuary? c. May demand receivership or administration of
the real property, sale of movable, conversion or
A: deposit of credit instruments or investment of
1. Before the usufruct cash or profits
a. Make an inventory 2. On the rights of the usufructuary
b. Give security a. Cannot posses the property until he gives security
2. During the usufruct b. Cannot administer property
a. Take care of property c. Cannot collect credits that have matured nor
invest them except the court or naked owner
consents

CIVIL LAW
d. May alienate his right to usufruct. because they are not needed for the preservation of
the thing.
Q: When may the usufructuary be exempt from the
obligation to give security? XPN:He shall have the right to demand the
payment of the increase in value at the
termination of the usufruct provided that:
A: When: SIR
1. He notified the owner of the urgency of the
1. No one will be Injured by the lack of the bond;
repairs
2. The donor (or parent) Reserved the usufruct of the
2. The owner failed to make repairs
property donated;
notwithstanding such notification
3. The usufruct is Subject to caution curatorial where:
3. The repair is necessary for the preservation
a. The usufructuary: takes an oath to take care of
of the property.
the things and restore them to its previous state
before the usufruct is constituted.
Q: Does the usufructuary have a right of retention even
b. The property subject to such cannot be alienated
after the termination of the usufruct?
or encumbered or leased.
A: Yes, until he is reimbursed for the increase in value of
Q: What is caution curatorial?
the property caused by extraordinary repairs for
preservation.
A: The usufructuary, being unable to file the required bond
or security, files a verified petition in the proper court
Q: How is the increase in value determined?
asking for the delivery of the house and furniture necessary
for himself and his family without any bond or security. A: It is the difference between the value of the property
(Art. 587) before the repairs were made and the value after the
repairs have been made.
Q: When does the usufructuary start to have a right to the
proceeds and benefits after the security has been given?
RIGHTS OF THE OWNER
A: He shall have a right to all the proceeds and benefits
from the day on which he should have commenced to Q: What are the rights of a naked owner and the
receive them. (Art. 588, NCC) limitations imposed upon him?
Q: What are ordinary repairs? A:
A: Such as are required by the wear and tear due to the Rights Limitations
natural use of the thing and are indispensable for its Can alienate the thing in
Alienation
preservation. (Art. 592, NCC) usufruct
Cannot alter the form and
Note: GR: Usufructuary has no liability when the thing deteriorates Alteration
substance
due to wear and tear. He is obliged to return the thing in such Cannot do anything
state.
Enjoyment prejudicial to the
XPN: when there is fraud or negligence
usufructuary
Can construct any works
Q: What are extraordinary repairs? and make any
improvement provided it
Construction and
A: does not diminish the value
Improvement
1. Those required by the wear and tear due to the or the usufruct or prejudice
natural use of the thing but not indispensable for its the rights of the
preservation. usufructuary.
2. Those required by the deterioration of or damage to
the thing caused by exceptional circumstances and are Q: What is the effect of the death of the naked owner on
indispensable for its preservation. the usufruct?
Q: Who pays for extraordinary repairs? A: It does not terminate the usufruct. His rights are
transmitted to his heirs.
A: Depends on the kind of extraordinary repairs: (Art. 594,
NCC) Q: Is renunciation an assignment of right?
1. If made by the owner - he can make them but to his
expense and he shall have the right to demand from A: No, it is really abandonment by the usufructuary of his
the usufructuary the payment of legal interest on the right and does not require the consent of the naked owner
amount expended during the duration of the usufruct. but it is subject to the rights of creditors.
2. If made by the usufructuary – GR: The usufructuary

may make them but he is not entitled to indemnity

PROPERTY
Q: What is the obligation of the owner if the property held son. Thus, the general rule and not the exception should
in usufruct is expropriated for public use? apply in this case.
A: The owner is obliged to: Q: What are considered special usufructs?

1. either replace it; or
2. pay legal interest to usufructuary of the net A: These are usufruct on:
proceeds of the same. 1. Pension or income (Art. 570, NCC)
2. Property owned in common (Art. 582, NCC)
Q: What happens when a part of the thing subject of the 3. Cattle (livestock) (Art. 591, NCC)
usufruct is lost? 4. On Vineyards and woodland
(Arts 575-576, NCC)
A: The remaining part shall continue to be held in usufruct. 5. Right of action (Art. 578, NCC)
6. Mortgaged property (Art. 600, NCC)
Q: Can usufruct be constituted in favor of a town, 7. over the Entire patrimony (Art. 598, NCC)
corporation or association? 8. things which Gradually deteriorate
(Art. 573, NCC)
A: Yes, but it cannot be for more than 50 years. 9. Consumable property (Art. 574, NCC)
Q: A usufruct is constituted on an immovable where a EXTINCTION/TERMINATION

building is erected, and the building is destroyed, what
will happen? Q: How is usufruct extinguished?
A: Usufructuary will have the right to make use of the land A: PLDT-ERM
and materials. 1. Acquisitive Prescription
Q: An insurance covering the object of usufructuary was Note: The use by a third person and not the non-use by the
obtained, who gets the proceeds? usufructuary
A: If both of them paid premium: both will share in the 2. Total Loss of the thing
insurance proceeds. If it was only the owner who paid, then
proceeds will go to him alone. Note: If the loss is only partial, the usufruct continues with
the remaining part.
Q: What is the effect of improper use of the thing by the
usufructuary? 3. Death of the usufructuary; unless a contrary intention
appears, since a usufruct is constituted essentially as a
A: The owner may demand the delivery of and lifetime benefit for the usufructuary or in
administration of the thing with responsibility to deliver net consideration of his person
fruits to usufructuary. 4. Termination of right of the person constituting the
usufruct
Q: On 1 January 1980, Minerva, the owner of a building 5. Expiration of the period or fulfilment of the resolutory
granted Petronila a usufruct over the property until 01 condition
June 1998 when Manuel, a son of Petronila, would have 6. Renunciation by the usufructuary.
reached his 3oth birthday. Manuel, however, died on 1
June 1990 when he was only 26 years old. Note: It partakes the nature of a condonation or donation, it
must comply with the forms of donation.
Minerva notified Petronila that the usufruct had been
extinguished by the death of Manuel and demanded that 7. Merger of the usufruct and ownership in the same
the latter vacate the premises and deliver the same to the person who becomes the absolute owner thereof.
former. Petronila refused to vacate the place on the (Art. 1275, NCC)
ground that the usufruct in her favor would expire only on
th
1 June 1998 when Manuel would have reached his 30 EASEMENTS
th
birthday and that the death of Manuel before his 30
birthday did not extinguish the usufruct. Whose CHARACTERISTICS
contention should be accepted? (1997 Bar Question)
Q: What is an easement or servitude?
A: Petronila’s contention is correct. Under Article 606 of the
Civil Code, a usufruct granted for the time that may elapse A: It is an encumbrance imposed upon an immovable for
before a third person reaches a certain age shall subsist for the benefit of:
the number of years specified even if the third person 1. another immovable belonging to a different owner; or
should die unless there is an express stipulation in the 2. for the benefit of a community or one or more persons
contract that states otherwise. to whom the encumbered estate does not belong by
virtue of which the owner is obliged to abstain from
In the case at bar, there is no express stipulation that the doing or to permit a certain thing to be done on his
consideration for the usufruct is the existence of Petronila’s estate. (Arts. 613- 614, NCC)

CIVIL LAW
5. Has 2 distinct tenements: dominant and servient
Q: Distinguish Dominant Estate from Servient Estate. estate;
6. Cause must be perpetual.
A:
DOMINANT ESTATE SERVIENT ESTATE Q: What is meant by “easement established only on an
Immovable in favor of That property or estate immovable?”
which, the easement is which is subject to the
established dominant estate A: The term “immovable” must be understood in its
Upon which an obligation common and not in its legal sense.
Which the right belongs
rests.
Q: Distinguish easement from usufruct.
Note: The immovable in favor of which, the easement is
established is called the dominant estate; that which is subject A:
thereto, the servient estate. EASEMENT USUFRUCT
Constituted on
Q: Can there be an easement over another easement?
Explain. (1995 Bar Question) On real property Real or personal
Use granted
A: There can be no easement over another easement for Limited to a particular or
the reason that an easement may be constituted only on a specific use of the servient Includes all uses and fruits
corporeal immovable property. An easement, although it is estate
real right over an immovable, is not a corporeal right.
As to right of possession
Q: Differentiate easement from servitude. Non-possessing right over an Involves a right of possession
immovable in an immovable or movable
A:
As to effect of death
EASEMENT SERVITUDE
Not extinguished by death of Extinguished by death of
An English law term Used in civil law countries dominant owner usufructuary
Real Real or personal Nature of right
Burden imposed upon Real right whether or not Real right whether or not
The right enjoyed
another registered registered
As to transmissibility
Q: What are characteristics of easement?
Transmissible Transmissible
A: NICE LIAR How it may be constituted
1. Is a right limited by the Needs of the dominant owner
or estate, without possession; Cannot be constituted on an
May be constituted in favor,
2. IsInseparable from the estate to which it is attached - easement but it may be
or, burdening, a piece of land
cannot be alienated independently of the estate; (Art. constituted on the land
held in usufruct
617, NCC) burdened by an easement
3. Cannot consist in the doing of an act unless the act is
accessory in relation to a real easement; Q: Can there be:
4. Involves 2 neighboring Estates: the dominant estate to
which the right belongs and the servient estate upon 1. An easement over a usufruct?
which an obligation rests;
5. Is a Limitation on the servient owner’s rights of A: There can be no easement over a usufruct. Since an
ownership; easement may be constituted only on a corporeal
6. Is Indivisible- not affected by the division of the estate immovable property, no easement may be constituted on a
between two or more persons; (Art. 618, NCC) usufruct which is not a corporeal right.
7. It is enjoyed over Another immovable never on one’s
own property; 2. A usufruct over an easement?
8. Is a Real right but will affect third persons only when
registered. A: There can be no usufruct over an easement. While a
usufruct may be created over a right, such right must have
Q: What are essential qualities of easements? an existence of its own independent of the property. A
servitude cannot be the object of a usufruct because it has
A:
no existence independent of the property to which it
1. Incorporeal;
attaches.
2. Imposed upon corporeal property;
3. Confer no right to a participation in the profits arising
from it;
4. Imposed for the benefit of corporeal property;

PROPERTY
Q: Distinguish easement from lease. easement should be constituted, since no one objected to
the continued existence of the windows.
A:
Easement Lease Note: It is understood that there is an exterior sign contrary to the
easement of party wall whenever:
Nature 1. there is a window or opening in the dividing wall of
Real right whether Real right only when buildings
2. entire wall is built within the boundaries of one of the
registered or not registered OR when the
estates
(whether real or personal) lease exceeds 1 yr. 3. the dividing wall bears the burden of the binding beams,
Where constituted floors and roof frame of one of the buildings, but not
those of the others
Only on real properties Real or personal 4. the lands enclosed by fences or live hedges adjoin
Limitations on the use of right others which are not enclosed
In all these cases, ownership is deemed to belong exclusively to the
There is limited right to the
Limited right to both owner of the property which has in its favor the presumption
use of real property of based on any of these signs.
possession and use of
another but w/o right of
another’s property
possession Q: What is the effect of acknowledgement of an easement
Scope and Uses in one owns property?
Covers all fruits and uses as a Generally covers only a
rule particular or specific use A: An acknowledgement of the easement is an admission
that the property belongs to another (BOMEDCO v. Heirs of
Who may create Valdez, G.R. No. 124669).
Can be created only by the The lessor may or may not
owner, or by a duly be the owner as when there Q: How is easement acquired?
authorized agent, acting in is a sub-lease or when the
behalf of the owner lessor is only a usufructuary A:
1. Prescription of 10 years
How it is created
2. By deed of recognition
GR: only by contract; 3. By final judgment
4. By apparent sign established by the owner of two
May be created by: XPN: by law as in the case of adjoining estates
law, an implied new lease, or 5. By title
contract, when a builder has built in
last will or GF on the land of another a PARTIES TO AN EASEMENT
prescription building, when the land is
considerably worth more in Q: Who are the parties to an easement?
value than the building
Passive or Active Owner A:
1. Dominant estate – refers to the immovable for which
The owner is more or less The owner or lessor is more
the easement was established.
passive, and he allows the or less active
2. Servient estate – the estate which provides the service
usufructuary to enjoy the
or benefit.
thing given in usufruct
Who has the duty to make repairs Q: What are the rights of the dominant owner?
Usufructuary has the duty to Lessee generally has no duty
make the ordinary repairs to pay for repairs A: MARE
1. Exercise all rights necessary for the use of the
Who bears payment of taxes and charges on the property
easement (Art. 625, NCC)
Usufructuary pays for the Lessee generally pays no 2. Make on the servient estate all works necessary for
annual charges and taxes taxes the use and preservation of the servitude (Art. 627
and on the fruits par. 1, NCC)
Limitation on the use of the property 3. Renounce the easement if he desires to exempt from
contributing necessary expenses (Art. 628, NCC)
The lessee cannot constitute
Usufructuary may lease the 4. Ask for mandatory injunction to prevent impairment
a usufruct on the property
property to another of his right (Resolme v. Lazo, 27 Phil 416).
leased
Q: What are the obligations of the dominant owner?
Q: What is the doctrine of apparent sign?
A: CAN C
A: Easements are inseparable from the estate to which they 1. He cannot Alter the easement or render it more
actively or passively pertain. The existence of apparent sign burdensome. (Art. 627 par. 1, NCC)
under Art. 624 is equivalent to a title. It is as if there is an
implied contract between the two new owners that the

CIVIL LAW
2. He shall Notify the servient owner of works necessary a. Apparent – Made known and continually kept in
for the use and preservation of the servitude. (Art. 627 view by external signs that reveal the use and
par. 2, NCC) enjoyment of the same
3. He must Choose the most convenient time and b. Non-apparent – They show no external indication
manner of making the necessary works as to cause the of their existence.
least inconvenience to the servient owner. 5. As to the right given:
4. If there are several dominant estates he must a. Right to partially use the servient estate
Contribute to the necessary expenses in proportion to b. Right to get specific materials or objects from the
the benefits derived from the works (Art. 628 par. 1, servient estate
NCC) c. Right to participate in ownership
d. Right to impede or prevent the neighboring
Q: What are the rights of the servient owner? estate from performing a specific act of
ownership.
A: RMC 6. As to source:
1. Retain the ownership of the portion of the estate on a. Legal – those created by law for public use or
which easement is imposed private interests.
2. Make use of the easement unless there is an b. Voluntary - constituted by will or agreement of
agreement to the contrary. (Art. 628 par. 2, NCC), the parties or by testator.
3. Change the place or manner of the use of the c. Mixed – created partly by agreement and partly
easement, provided it be equally convenient (Art. 629, by law.
par. 2, NCC) 7. As to the duty of the servient owner:
a. Positive – Imposes upon the owner of the servient
Q: What are the obligations or limitations imposed on the estate the obligation of allowing something to be
servient owner? done or doing it himself.
A: IC e.g. right of way - imposes the duty to allow the

1. He cannot Impair the use of the easement. use of said way.
2. He must Contribute to the necessary expenses in case
he uses the easement, unless otherwise agreed upon b. Negative – Prohibits the owner of the servient
(Art. 628 par. 2, NCC) estate from doing something which he could
lawfully do if the easement did not exist.
CLASSIFICATIONS OF EASEMENT
e.g. Easement of light and view where the owner
Q: What are the classifications of easements? is prohibited from obstructing the passage of
light.
A:
1. As to recipient of the benefit: Q: How is an easement extinguished?
a. Real (or Predial) – The easement is in favor of
another immovable. A:
b. Personal – The easement is in favor of a 1. By redemption agreed upon in case of voluntary
community, or of one or more persons to whom redemption.
the encumbered estate does not belong 2. Expiration of the term or fulfilment of the resolutory
(easement of right of way for passage of condition.
livestock). 3. Merger of ownership of the dominant and servient
2. As to purpose or nature of limitation: estate
a. Positive – One which impose upon the servient 4. Annulment of the title or servitude.
estate the obligation of allowing something to be 5. Permanent impossibility to use easement.
done or of doing it himself. 6. Non user for 10 years
b. Negative – That which prohibits the owner of the 7. Bad condition
servient estate from doing something which he 8. Resolution of the right to create the servitude.
could lawfully do if the easement did not exist 9. Expropriation of the servient estate.
3. As to the manner of exercised: 10. Waiver by the dominant owner
a. Continuous – Their use may or may not be
incessant LEGAL EASEMENT
Note: For acquisitive prescription, the easement of Q: What is a Legal Easement?
aqueduct and easement of light and view are
considered continuous.
A: An easement established by law for public use or for the
interest of private persons.
b. Discontinuous – used at intervals and depend
upon the acts of man.
Q: What is a Public Legal Easement?
4. As to whether their existence is indicated:
A: A Public Legal Easement is for public or communal use.

PROPERTY
Q: What is a Private Legal Easement? Q: What if the property is not the shortest way and will
not cause the least damage to the servient estate?
A: A Private Legal Easements is for the interest of private
persons or for private use. A: The way which will cause the least damage should be
used even if it will not be the shortest.
Q: What are the kinds of legal easements?
The easement of right of way shall be established at the
A: WIND – PLW point least prejudicial to the servient estate and where the
1. Easement relating to Waters distance from the dominant estate to a public highway is
2. Easement relating to right of Way the shortest. In case of conflict, the criterion of least
3. Intermediate distances and works for certain prejudice prevails over the criterion of shortest distance
construction and plantings
4. Easement against Nuisance Q: What does “least prejudicial” mean in determining the
5. Drainage of Building right of way?
6. Easement of Party wall
7. Easement of Light and view A: It means it is the shortest way and the one which will
cause the least damage to the property to the servient
RIGHT OF WAY estate in favor of the dominant estate.
Q: The coconut farm of Federico is surrounded by the

Q: What is right of way? lands of Romulo. Federico seeks a right of way through a
portion of the land of Romulo to bring his coconut
A: It is the right to demand that the owner of an estate products to the market. He has chosen a point where he
surrounded by other estates be allowed to pass thru the will pass through a housing project of Romulo. The latter
neighboring estates after payment of proper indemnity. wants him to pass another way which is 1km longer. Who
should prevail? (2000 Bar Question)
Q: Can easement of right of way be acquired by
prescription? A: Romulo will prevail. Under Art. 650, the easement of
right of way shall be established at the point least
A: No, because it is discontinuous or intermittent
prejudicial to the servient estate and where the distance
(Ronquillo, et al. v. Roco, GR No. L-10619, February 28,
from the dominant estate to a public highway is the
1958).
shortest. In case of conflict, the criterion of least prejudice
prevails over the criterion of shortest distance. Since the
Q: What kind of servitude in favor of the government is a
route chosen by Federico will prejudice the housing project
private owner required to recognize?
of Romulo, Romulo has the right to demand that Federico
A: The only servitude which he is required to recognize in pass another way even though it will be longer.
favor of the government is:
Q: Spouses dela Cruz are occupants of a parcel of land
1. the easement of a public highway,
located at the back of Ramiscal’s property. They use as
2. private way established by law, or
their pathway, to and from the nearest public highway
3. any government canal or lateral that has been
from their property, a long strip of land owned by
pre-existing at the time of the registration of the
Ramiscal. They also enclosed such strip of land with a
land.
gate, fence, and roof. Ramiscal demanded that the
Note: If the easement is not pre-existing and is sought to be
spouses demolish the same. The spouses refused. Are the
imposed only after the land has been registered under the LR Act, spouses entitled to a right of way?
proper expropriation proceedings should be had, and just
compensation paid to the registered owner (Eslaban v. Vda De A: No. There is no voluntary nor legal easement
Onorio, G.R. No. 146062). established. The spouses failed to show that they entered
into an agreement with Ramiscal to use the pathway. Art
Q: What are the requisites for easement on right of way? 649 provides that the easement of right of way is not
compulsory if the isolation of the immovable is due to the
A: POON-D proprietor’s own acts. Mere convenience for the dominant
1. The easement must be established at the point least estate is not enough to serve as its basis. There should be
Prejudicial to the servient estate no other adequate outlet to a public highway. Also, under
2. Claimant must be an Owner of enclosed immovable or Art. 649, it is the owner or any person who by virtue of a
with real right real right may cultivate or use any immovable surrounded
3. There must be no adequate Outlet to a public highway by other immovable pertaining to other persons, who is
4. The right of way must be absolutely Necessary not entitled to demand a right of way through the neighboring
mere convenience estates. Here, the spouses fell short of proving that they are
5. The isolation must not be Due to the claimant’s own the owners of the supposed dominant estate (Eslaban v.
act Vda De Onorio, G.R. No. 146062).
6. There must be payment of proper Indemnity.

CIVIL LAW
Q: David owns a subdivision which does not have an Q: Is said extinguishment automatic?
access to the highway. When he applied for a license to
establish the subdivision, he represented that he will A: No. There must be a demand for extinguishment coupled
purchase a rice field located between his land and the with tender of indemnity by the servient owner.
highway, and develop it into an access road. However,
when the license was granted, he did not buy the rice Q: Emma bought a parcel of land from Equitable-PCI Bank,
field, which remained unutilized. Instead, he chose to which acquired the same from Felisa, the original owner.
connect his subdivision with the neighboring subdivision Thereafter, Emma discovered that Felisa had granted a
of Nestor, which has an access to the highway. When right of way over the land in favor of the land of Georgina,
Nestor and David failed to arrive at an agreement as to which had no outlet to apublic highway, but the easment
compensation, Nestor built a wall across the road was not annotated when the servient estate was
connecting with David’s subdivision. Is David entitled to registered under the Torrens system. Emma then filed a
an easement of right of way through the subdivision of complaint for cancellation of the right of way, on the
Nestor which he claims to be the most adequate and ground that it had been extinguished by such failure to
practical outlet to the highway? annotate. How would you decide the controversy? (2001
Bar Question)
A: No, David is not entitled to the right of way being
claimed. The isolation of his subdivision was due to his own A: The complaint for cancellation of easement of right of
act or omission because he did not develop an access road way must fail. The failure to annotate the easement upon
to the rice fields which he was supposed to purchase the title of the servient estate is not among the grounds for
according to his own representation when he applied for a extinguishing an easement under Art. 631 of the NCC.
license to establish the subdivision (Floro v. Llenado, 244 Under Art 617, easements are inseparable from the estate
SCRA 713). to which they actively or passively belong. Once it attaches,
it can only be extinguished under Art 631, and they exist
Q: How much is the proper indemnity to the servient even if they are not stated or annotated as an
estate? encumbrance on the Torrens title of the servient estate.
A: If the passage is: OTHER LEGAL EASEMENTS

a. Continuous and permanent - the indemnity
consists of the value of the land occupied plus the WATERS
amount of damages caused to the servient estate.
b. Temporary – indemnity consists in the payment Q: What are the different easements relating to waters?
of the damage caused
A: These are: DRAW – BN
Q: How wide should an easement of right of way be? 1. Natural drainage (Art. 637)
2. drainage of Buildings (Art. 674)
A: The width of the easement shall be that which is 3. easement on Riparian banks for navigation,
sufficient for the needs of the dominant estate. (Art. 651, floatage, fishing, salvage, and tow path (Art. 638)
NCC) 4. easement of a Dam (Arts. 639, 647)
5. easement for drawing Water or for watering
Q: Can a dominant owner demand a driveway for his animals (Arts. 640-641)
automobile? 6. easement of Aqueduct (Arts. 642- 636)
A: Yes, due to necessity of motor vehicles in the present NATURAL DRAINAGE

age.
Note: Lower estates must receive waters which are naturally and
Q: Who is responsible for repairs and taxes? without intervention of man descend from higher estates including
earth and stones carried with them.
A:
Q: What are its limitations?
1. As to repairs the dominant owner is liable for
necessary repairs.
A:
2. As to proportionate share of the taxes it shall be
1. Dominant owner must not increase the burden but he
reimbursed by said owner to the proprietor of the
may erect works to avoid erosion.
servient estate. This applies only to permanent
2. The servient owner must not impede the descent of
easements. (Art. 654, NCC)
water (but may regulate it).
Q: What are the special causes of extinguishment of right
EASEMENT FOR DRAWING WATER OR FOR WATERING
of way?
ANIMALS
A: Note: This is a combined easement for drawing of water and right
1. The opening of a public road, or of way.
2. Joining the dominant tenement to another which has
an exit to a public road.

PROPERTY
Q: What are the requisites for easement for watering Q: What are the presumptions (juris tantum) of existence
cattle? of a party wall?
A: A:
1. It must be imposed for reasons of public use 1. In adjoining walls of building, up to common elevation
2. It must be in favor of a town or village indemnity must 2. In dividing walls of gardens and yards (urban)
be paid 3. In dividing fences, walls and live hedges of rural
tenements
Note: The right to make the water flow thru or under 4. In ditches or drains between tenements
intervening or lower estates
Rebuttal of presumption:
Q: What are the requisites for drawing water or for 1. Title
watering of animals? 2. By contrary proof
3. By signs contrary to the existence of the servitude
A: (Arts. 660 & 661, NCC)
1. Owner of the dominant estate has the capacity to
dispose of the water; Note: If the signs are contradictory, they cancel each
2. The water is sufficient for the use intended other.
3. Proposed right of way is the most convenient and the
least onerous to third persons. Q: Who spends for the cost of repairs and construction of
4. Pay indemnity to the owner of the servient estate (Art. party walls?
643)
A: The part-owners. They are obliged to contribute in
EASEMENT OF AQUEDUCT proportion to their respective interests.
Q: How is the easement of aqueduct considered? Q: May an owner refuse to contribute?
A: For legal purposes, it is considered continuous and A: GR: Yes, any owner may free himself from the obligation
apparent even though the flow of water may not be to contribute by renouncing his rights in the party wall.
continuous or its use depends upon the needs of the
dominant estate or upon a schedule of alternate days or XPN: When the party wall actually supports his
hours. (Art. 646, NCC) building, he cannot refuse to contribute for the
expenses or repair and construction. (Art. 662, NCC)
PARTY WALL
XPN to XPN: If the owner renounces his part-
Q: What is a party wall? ownership of the wall, in this case he shall bear the
expenses of repairs and work necessary to prevent
A: A common wall which separates two estates, built by any damage which demolition may cause to the
common agreement at the dividing line such that it party wall. (Art. 663, NCC)
occupies a portion of both estates on equal parts.
Q: May an owner increase the height of a party wall?
Note: It is a kind of compulsory co-ownership.
A: Yes, provided that he must:
Q: Distinguish easement of party wall from co-ownership. 1. do so at his own expense;
2. pay for any damage caused even if it is temporary;
A: 3. He must bear the cost of maintaining the portion
PARTY WALL CO-OWNERSHIP added;
Shares of co-owners cannot Can be divided physically; a 4. He must pay the increased cost of preservation of the
be physically segregated but co-owner cannot point to wall (Art. 664, NCC);
they can be physically any definite portion of the 5. He shall be obliged to reconstruct the wall at his
identified property belonging to him expense if necessary for the wall to bear the increased
height and if additional thickness is required, he shall
None of the co-owners may
provide the space therefore from his own land.
use the community property
No limitation as to use of the
for his exclusive benefit
party wall for exclusive DRAINAGE OF BUILDINGS
because he would be
benefit of a party
invading on the rights of the Q: Define drainage of buildings
others
Any owner may free himself A: It is the right to divert the rain waters from one’s own
from contributing to the cost roof to the neighboring estate.
Partial renunciation is
of repairs and construction
allowed
of a party wall by renouncing
ALL his rights

CIVIL LAW
Q: What are the conditions for drainage of buildings? MODES OF ACQUIRING EASEMENTS
A: COMPULSORY EASEMENTS
1. No adequate outlet
2. The outlet must be at the point where egress is easiest Q: How are easements acquired?
and establishing a conduit for the drainage of water
3. Proper indemnity A: FART-P
1. By Title – All easements:
LATERAL AND SUBJACENT SUPPORT a. Continuous and apparent (Art. 620)
b. Continuous non-apparent (Art. 622)
Q: Can there be a stipulation or testamentary provision c. discontinuous, whether apparent or non-
allowing excavations that could cause danger to an apparent (Art. 622)
adjacent land or building? 2. By Prescription of ten years –
continuous and apparent (Art. 620)
A: No, the same shall be void. (Art. 685, NCC) 3. By deed of Recognition
4. By Final judgment
Q: What should be done first before making an 5. By Apparent sign established by the owner of the
excavation? two adjoining estates
A: Any proprietor who intends to make any excavation shall
Q: How is the prescriptive period computed?
notify all owners of adjacent lands.
A:
VOLUNTARY EASEMENT
a. Positive easement - the period is counted from the day
Q: When is an easement voluntary? when the owner of the dominant estate begins to
exercise it
A: it is voluntary when it is established by the will of the b. Negative easement- from the day a notarial
owners. prohibition is made on the servient estate
Q: Who may constitute voluntary easements? EASEMENT OF LIGHT AND VIEW
A: The owner possessing capacity to encumber property

Q: What is easement of light (jus luminum)?
may constitute voluntary servitude. If there are various
owners, all must consent; but consent once given is not A: The right to admit light from neighboring estate by virtue
revocable. of the opening of a window or the making of certain
openings.
Q: For whose favor are voluntary easements established?
Q: What is easement of view (jus prospectus)?
A:
1. Predial servitudes: A: The right to make openings or windows to enjoy the
a. for the owner of the dominant estate view thru the estate of another and the power to prevent
b. for any other person having any juridical relation all constructions or works which could obstruct such view
with the dominant estate, if the owner ratifies it. or make the same difficult.
2. Personal servitudes: for anyone capacitated to accept.
Note: It necessarily includes easement of light.
Q: How are voluntary easements created and what are the
governing rules for such? Q: What are its modes of acquisition of easement of light
and view?
A:
1. If created by title (contract, will, etc.), the title A:
governs. 1. By title
2. If acquired by prescription, it is governed by the manner 2. By prescription
or form of possession.
Q: What is the prescriptive period for acquisition of
Note: In both cases, the Civil Code will only apply easement of light and view?
suppletorily.
A: 10 years
Q: From when does the prescriptive period start to run?
A: The reckoning point depends on whether the easement

is positive or negative which, in turn, is dependent on
where the opening is made if it is made:

PROPERTY
1. On one’s own wall and the wall does not extend over distance of two meters between the wall in which they are made
the property of another – The easement is negative. and such contiguous property. Neither can side or oblique views
upon or towards such conterminous property be had, unless there
be a distance of 60 cm. The non observance of these distances
Commencement of Period of prescription - starts from
does not give rise to prescription. (Art. 670, NCC)
the time formal prohibition is made.
Q: How is easement of light and view extinguished?
Reason: The owner merely exercises his right of
dominion and not of an easement. Negative easement
A:
is not automatically vested as formal prohibition is a
1. Merger
pre-requisite.
2. When the easement can no longer be used
2. Thru a party wall or on one’s own wall which extends 3. Expiration of the term (if temporary) or fulfillment of
over the neighboring estate – The easement is the condition (if conditional)
positive. 4. Renunciation of the owner of the dominant estate of
the redemption agreed upon
Commencement of Period of prescription – starts from 5. Non-user for 10 years
the time the window is opened.
EXTINGUISHMENT OF EASEMENTS
Reason: owner of the neighboring estate who has a
right to close it up allows an encumbrance on his Q: How are easements extinguished?
property.
A: MARINE-CREW
Q: How about with regard to openings at height of ceiling 1. Merger of ownership of the dominant and servient
owner
joists?
2. Annulment of the title to the servitude
3. Redemption agreed upon
A: The owner of a wall which is not a party wall may make
4. Impossibility to use the easement
an opening to admit light and air, but not view subject to
5. Non-user : 10 years
the ff:
6. Expiration of the term or fulfilment of the resolutory
1. The size must not be more than 30 square centimeters
condition
2. The opening must be at the height of the ceiling joists
7. Bad Condition – when either or both estates fall into
or immediately under the ceiling
such a condition that the easement could not be used
3. There must be an iron grating imbedded in the wall
8. Resolution of the right of grantor to create the
4. There must be wire a screen.
easement (as when the vendor a retro redeems the
land)
Q: What are the restrictions as to easement of views?
9. Expropriation of the servient estate
10. Waiver by the dominant owner gathered from positive
A:
acts
1. Direct Views: the distance of 2 meters between the
wall and the boundary must be observed
NUISANCE
2. Oblique Views: (walls perpendicular or at an angle to
the boundary line) must not be 60 cm to the nearest
Q: What is a nuisance?
edge of the window.
A: Any:
Note: Any stipulation to the contrary is void (Art. 673, NCC).
1. act,
2. omission,
Q: What if the wall upon which an opening is made,
3. establishment,
becomes a party wall?
4. business or
5. condition of property or
A: A part-owner can order the closure of the opening. No
6. anything else which: ISAHO
part-owner may make an opening thru a party wall without
a. Injures/dangers the health or safety of others
the consent of the others.
b. Shocks, defies or disregards decency or morality
c. Annoys or offends the senses
Note: If the wall becomes a party wall the part-owner can close the
window unless there is a stipulation to the contrary (Art. 669, NCC) d. Hinders or impairs the use of property or
e. Obstructs or interferes with the free passage to
Q: Does non-observance of the distances provided in Art. any public highway or street or body of water
670 give rise to prescription?
Q: May a nuisance be both public and private?
A: No, this refers to a negative easement as the window is
thru a wall of the dominant estate. A: Yes, it is called mixed nuisance.
Note: No windows, apertures, balconies, or other similar

projections which afford a direct view upon or towards an
adjoining land or tenement can be made, without leaving a

CIVIL LAW
Q: Distinguish nuisance from trespass.
Q: Is a swimming pool an attractive nuisance?
A:
Nuisance Trespass A: GR: A swimming pool or water tank is not an attractive
nuisance, for while it is attractive, it is merely an imitation
Use of one’s own property
Direct infringement of of the work of nature. Hence, if small children are drowned
which causes injury to
another’s right or property in an attractive water tank of another, the owner is not
another
liable even if there be no guards in the premises (Hidalgo
Injury is direct and Enterprises v. Balandan, et. al, L-3422 Jun. 13, 1952).
Injury is consequential
immediate
XPN: Swimming pool with dangerous slides
Q: What are the kinds of nuisance?
Note: The doctrine of attractive nuisance does not generally apply
A: to bodies of water, artificial as well as natural in the absence of
some unusual condition or artificial other than the mere water and
1. According to the number of persons affected:
its location.
a. Public (or common) nuisance – is one which
affects the community or neighborhood or Q: What are the remedies against nuisance?
considerable number of persons
b. Private nuisance – is one which affects an A: If the nuisance is:
individual or few persons only. PUBLIC PRIVATE
2. Other classification of nuisance: Civil action Civil Action
a. Nuisance Per Se – that kind of nuisance which is Abatement w/o judicial Abatement w/o judicial
always a nuisance. By its nature, it is always a proceedings proceedings
nuisance at all times and under any circumstances Prosecution under
regardless of location of surroundings. RPC/local ordinance
b. Nuisance Per Accidens – that kind of nuisance by
reason of location, surrounding or in the manner
Q: What are the requisites of extra-judicial abatement?
it is conducted or managed.
A: BAR VID
Q: Distinguish nuisance per se from nuisance per accidens. 1. The nuisance must be specially Injurious to the person
affected.
A:
2. No Breach of peace or unnecessary injury must be
PER SE PER ACCIDENS committed
As a matter of law As a matter of fact 3. Demand must first be made upon the owner or
Depends upon its location possessor of the property to abate the nuisance.
Need only be proved in any and surroundings, the 4. Demand is Rejected
locality manner of its conduct or 5. Abatement is Approved by the district health officer
other circumstances and executed with the assistance of the local police,
May be abated only with and
reasonable notice to the 6. Value of destruction does not exceed P3,000
May be summarily abated
person alleged to be
under the law of necessity
maintaining or doing such Q: When can an owner of the thing abated recover
nuisance damages?
Q: What is the doctrine of attractive nuisance? A: If the thing is found by the court not to be a nuisance,
the owner can claim damages.
A. One who maintains on his estate or premises an
attractive nuisance without exercising due care to prevent Note: A private person or a public official extra judicially abating a
children from playing therewith or resorting thereto, is nuisance shall be liable for damages if he causes unnecessary injury
liable to a child of tender years who is injured thereby, even or if the alleged nuisance is later declared by the courts to be not
if the child is technically a trespasser in the premises. (Jarco real nuisance.
Marketing Corp. v. CA, 117 SCAD 818, 321 SCRA 375, 1991)
Q: Does the right to question the existence of a nuisance
Q: What is the basis for liability? prescribe?
A: The attractiveness is an invitation to children. A: No. It is imprescriptible.

Safeguards to prevent danger must therefore be set up.
Q: What are the elements of attractive nuisance?
A:
1. It must be attractive
2. Dangerous to children of tender years.

PROPERTY
MODES OF ACQUIRING OWNERSHIP As regards the intent to acquire
There must be an intent to May be had in the concept
Q: Differentiate mode from title.
acquire ownership of a mere holder
A: As regards possession
MODE TITLE May not take place w/o
May exist w/o occupation
Serves merely to give the some form of possession
Directly and immediately
occasion for its acquisition As to period
produces a real right
or existence
Short duration Generally longer
Cause Means
As to leading to another mode of acquisition
Proximate cause Remote cause
Cannot lead to another May lead to another mode-
Essence of the right which is Means whereby that mode of acquisition prescription
to be created or transmitted essence is transmitted
Q: What are the things susceptible of occupation?
Q: What are the modes of acquiring ownership?
A:
A: OLD TIPS 1. Things that are without an owner – res nullius;
1. Occupation abandoned
2. Law
3. Donation Note: Stolen property cannot be subject of occupation
4. Tradition
5. Intellectual creation 2. Animals that are the object of hunting and fishing
6. Prescription 3. Hidden treasure
7. Succession 4. Abandoned movables
Note: Q: May a person acquire ownership over a wild animal by

1. Original – Those which do not arise or depend upon any pre- occupation?
existing right or title of another person, i.e. Occupation,
Intellectual Creation, Acquisitive Prescription A: Wild animals are considered res nullius when not yet
captured. After its capture, animals that escaped become
2. Derivative – are those which arise or depend upon a pre-
res nullius again.
existing or preceding right or title of another person, i.e. Law,
Donation, Succession mortis cause, tradition (delivery)
Q: When can land be the object of occupation?
OCCUPATION
A: It depends.
1. If without an owner, it pertains to the State.
Q: What are the requisites of occupation? (Regalian Doctrine)
2. If abandoned and the property is private, it can
A: WISCS be the object of occupation.
1. There must be Seizure of a thing, 3. And if the land does not belong to anyone is
2. which must be a Corporeal personal property, presumed to be public.
3. which must be Susceptible of appropriation by nature
4. The thing must be Without an owner DONATION
5. There must be an Intention to appropriate.
DEFINITION
Q: Distinguish occupation from possession.
Q: What is donation?
A:
OCCUPATION POSSESSION A: It is an act of pure liberality whereby a person disposes
As regards acquisition of ownership gratuitously of a thing or right in favor of another who
accepts it. (Art. 725, NCC)
Merely raises the
Mode of acquiring presumption of ownership Q: What are the requisites of donation?
ownership when exercised in the
concept of owner A: ACID
As to property involved 1. Donor must have Capacity to make the donation
Involves only corporeal 2. He must have donative Intent (animus donandi)
Any kind of property 3. There must be Delivery
personal property
4. Donee must Accept or consent to the donation during
As regards ownership of the thing by another the lifetime of the donor and of the donee in case of
Requires that the object be The property may be owned donation inter vivos (Art. 746, NCC); whereas in case of
without an owner by somebody donation mortis causa, acceptance is made after

CIVIL LAW
donor’s death because they partake of a will (Art. 728, Q: May ownership and usufruct of property be donated to
NCC) different persons separately?
Q: What are the essential features or elements of a true A: Yes, provided all the donees are living at the time of
donation? donation. (Art. 756, NCC)
A: Q: Is there a limitation on the amount that can be

1. Alienation of property by the donor during his lifetime, donated?
which is accepted
2. Irrevocability by the donor of the donation A:
3. Animus Donandi (donative intent) 1. If the donor has forced heirs he cannot give or receive
4. Consequent impoverishment of the donor by donation more than what he can give or receive by
(diminution of his assets) will.
2. If the donor has no forced heirs, donation may include
Q: What rules govern donations of the same thing to all present property provided he reserves in full
different donees? ownership or in usufruct:
a. the amount necessary to support him and those
A: These are governed by provisions on double sale as set relatives entitled to support from him.
forth in Art. 1544. (Art. 744, NCC) b. property sufficient to pay the donor’s debt
contracted prior to the donation.
Note: If the same thing should have been sold to different
vendees, the ownership shall be transferred to the person RESERVATIONS AND REVERSIONS
who may have first taken possession thereof in good faith,
if it should be movable property. Should it be immovable Q: What is the effect if the donor violates the requirement
property, the ownership shall belong to the person for reservation under Art. 750?
acquiring it who in good faith first recorded it in the
Registry of Property. Should there be no inscription, the
A: A donation where the donor did not reserve property or
ownership shall pertain to the person who in good faith
assets for himself in full ownership or in usufruct sufficient
was first in the possession; and, in the absence thereof, to
for his support and all relatives legally dependent upon
the person who presents the oldest title, provided there is
him, is not void. It is merely reducible to the extent that the
good faith. (Art. 1544, NCC)
support to himself and his relatives is impaired or
prejudiced. (Pineda Property, p. 571, 1999)
CHARACTERISTICS
EXTENT TO WHICH DONOR MAY DONATE PROPERTY Q: What is reversion in donation?
Q: Up to what extent may a donation cover? A: It is a condition established in the deed of donation
which has for its effect the restoration or return of the
A: It may comprehend all the present property of the property donated to the donor or his estate or in favor of
donor, or part thereof, provided he reserves, in full other persons who must be living at the time of the
ownership or in usufruct, sufficient means for the support donation for any cause or circumstances. (Art. 757, NCC)
of himself, and of all relatives who, at the time of the
acceptance of the donation, are by law entitled to be Note: If the reversion is in favor of other persons who are not all
supported by the donor. (Art. 750, NCC) living at the time of the donation, the reversion stipulated shall be
void, but the donation shall remain valid.
Q: Can future properties be subject of donation? Q: What is the standing of the donation where the donor
did not reserved property or assets for himself sufficient
A: No, donations cannot comprehend future properties for his support and all his relatives legally dependent upon
him?
Note: Future property means anything which the donor cannot
dispose of at the time of the donation. (Art. 751, NCC)
A: It is valid. It is merely reducible to the extent that the
support to himself and his relatives is impaired or
Q: Can future inheritance or the inchoate right to inherit
prejudiced (Agapito v. De Joya, [CA]. 40 Off. Gaz. P. 3526).
be donated?
A: No, because it is future property. KINDS
Q: May a property, the acquisition of which is subject to Q: What are the kinds of donation?
suspensive condition, be donated?
A:
A: Yes, because once the condition is fulfilled, it retroacts to 1. According to motive or cause: SRMO
the day the contract is constituted. (Art. 1187, par. 1, NCC) a. Simple

PROPERTY
st
b. Remuneratory (1 kind) DONATION INTER VIVOS
nd
c. Remuneratory (2 kind): Conditional or Modal
donations Q: What are the limitations imposed by law in making
d. Onerous donations donations inter vivos?
2. As to perfection or extinguishment:
a. Pure A: RFM
b. With a condition 1. Donor must Reserve sufficient means for his support
c. With a term and for his relatives who are entitled to be supported
3. According to effectivity: by him (Art. 750, NCC)
a. Inter vivos (Art. 729, Civil Code) 2. Donation cannot comprehend Future property except
b. Mortis Causa (Art. 728, Civil Code) donations between future husband and wife (See Art.
c. Propter Nuptias 84 FC)
3. No person may give by way of donation More than he
Q: Discuss the kinds of donation according to motive or may give by will
cause?
DONATION BY REASON OF MARRIAGE
A:
PURPOSE FORM
Simple Q: What are donations by reason of marriage or donations
propter nuptias (DPN)?
same to that of forms in
pure liberality
donations
st A: Those donations which are made before the celebration
Remuneratory (1 kind)
of the marriage, in consideration of the same, and in favor
to reward past services
of one or both parties.
provided the services do same to that of forms in
not constitute a donations
Q: What are the grounds for filing an action for revocation
demandable debt.
nd of a DPN?
Remuneratory (2 kind)
1. reward A:
future services; or 1. Marriage is not celebrated
1. Onerous
2. becaus 2. Marriage is judicially declared void
– same form of that
e of future charges 3. Marriage took place without consent of parents, when
of contracts
or burdens, when required by law
2. Gratuitou
the value of said 4. Marriage is annulled and donee acted in bad faith
s – same form of that
services, burdens, 5. Upon legal separation, donee being the guilty spouse
of donations
or charges is less 6. Donation subject to resolutory condition and it took
than the value of place
the donation. 7. Donee committed an act of ingratitude
Onerous
Burdens, charges or DONATION MORTIS CAUSA
same as that of contracts
services are equal in value
to that of the donation.
Q: What is donation mortis causa?
Q: Discuss the kinds of donation according to motive or
cause? A: These are donations which are to take effect upon the
death of the donor.
A:
Note: It partakes of the nature of testamentary provisions and
1. Pure donation – is one which is not subject to any governed by the rules on succession (Art. 728, NCC).
condition
2. Conditional – is one wherein the donor imposes on the Q: Distinguish donation inter vivos from donation mortis
donee a condition dependent on the happening of a causa.
future event or past event unknown to the parties.
3. With a Term – is one wherein the donor imposes on A:
the donee a condition dependent upon the happening INTER VIVOS MORTIS CAUSA
of a future and certain event. As to when it takes effect
Takes effect during the
lifetime of the donor, Takes effect upon donor’s
independently of the his death
death
As to cause or consideration
In contemplation of donor’s
Cause is donor’s pure
death without intention to
generosity
dispose of the thing in case

CIVIL LAW
of survival Q: What is the effect if a suspensive condition may take

On predecease place beyond the natural expectation of life of the donor?
Valid if donor survives the
Void if donor survives A: The condition does not destroy the nature of the act as a
done
On revocability donation intervolves, unless a contrary intention appears.
Generally irrevocable Always revocable at any (Art. 730)
except for grounds provided time and for any reason
for by law before the donor’s death Q: What is a modal donation?
On formalities
Must comply with the Must comply with the A: A donation subject to burdens or charges. (Pineda
formalities of donations formalities of a will Property, p. 536-537, 1999)
On when acceptance is made
Acceptance during donor’s FORMALITIES REQUIRED
After donor’s death
lifetime
On when property is conveyed to the donee HOW MADE AND ACCEPTED
Property completely Property retained by the
conveyed to the done donor while he is still alive Q: Who must make the acceptance?
On tax payable
A: Acceptance may be made by the donee himself or thru
Donor’s tax Estate tax
an agent with special power of attorney; otherwise,
donation shall be void. (Art. 745, NCC)
ONEROUS DONATION
Q: Why is there a need for an acceptance?
Q: What is an onerous donation?
A: Because the donee may not want to accept the donor’s
A: A donation given for which the donor received a valuable
liberality or if donation is onerous, he may not agree with
consideration which is the equivalent of the property so
the burden imposed.
donated.
Note: Donation is perfected once the acceptance of the donation
Q: What are the kinds of onerous donations? was made known to the donor. Accordingly, ownership will only
revert to the donor if the resolutory condition is not fulfilled.
A:
1. Totally onerous – when the burden is equal to or Q: What is the effect of donations made to incapacitated
greater than the value of the property donated persons?
2. Partially onerous – when the burden is lesser than the
value of the donation. (Pineda Property, p. 547, 1999 A: Donations made to incapacitated persons shall be void,
ed) though simulated under the guise of another contract or
through a person who is interposed. (Art. 743, NCC)
Q: What laws will apply to onerous donations?
Q: Who may accept donations made in favor of minors?
A:
1. Totally onerous – rules on contracts A: If the donation is pure and simple and does not require
2. Partially onerous written acceptance, the minors can accept the donation by
a. Portion exceeding the value of the burden – themselves.
simple donations If the donation needs written acceptance, it may be
b. Portion equivalent to the burden – law on accepted by their guardian or legal representatives .
contracts (Pineda Property, p. 547, 1999)
Q: Who may accept donations made to conceived and
SIMPLE, MODAL, CONDITIONAL unborn children?
Q: What is a simple donation? A: Donations made to conceived and unborn children may
be accepted by those who would legally represent them if
A: One which is not subject to any condition they were already born. (Art. 742, NCC)
Q: What is a conditional donation? PERFECTION
A: One wherein the donor imposes on the donee a Q: When is a donation perfected?
condition dependent on the happening of a future event or
past event unknown to the parties. A: Donation is perfected from the moment the donor
knows of the acceptance by the donee (Art. 734, NCC).

PROPERTY
DIFFERENCES BETWEEN FORMALITIES FOR DONATION OF essential for a person to be able to make a donation, he must have
REAL, PERSONAL PROPERTIES full civil capacity.
Q: What is the formalities required for donation of real EFFECTS OF DONATION/LIMITATIONS

and personal properties?
IN GENERAL
A:
1. Of movable property: Q: What rights and actions does the donee acquire?
a. With simultaneous delivery of property donated:
i. for P 5,000 or less - may be oral/written A: The donee is subrogated to the rights and actions which
ii. for more than P 5,000 – written in public or in case of eviction would pertain to the donor.
private document
b. Without simultaneous delivery: Q: When are donors liable for eviction of hidden defects?
i. The donation and acceptance must be written
in a public or private instrument (Statute of A:
Frauds), regardless of value. Otherwise, 1. If the donation is simple or remunerative, donor is not
donation is unenforceable liable for eviction or hidden defects because the
2. Of immovable property: donation is gratuitous, unless the donor acted in bad
a. Must be in a public instrument specifying faith.
i. the property donated and 2. If the donation is onerous, the donor is liable on his
ii. the burdens assumed by the donee warranty against eviction and hidden defects but only
b. Acceptance may be made: to the extent of the burden.
i. In the same instrument or
ii. In another public instrument, notified to the Q: What are the rules regarding the liability of the donee
donor in authentic form, and noted in both to pay the debts of donor?
deeds. Otherwise, donation is void.
A:
1. Where donor imposes obligation upon the done; (Art.
QUALIFICATIONS OF DONOR, DONEE 758, NCC) the done is liable:
a. to pay only debts previously contracted;
Q: Who qualifies as a donor? b. for debts subsequently contracted only when
there is an agreement to that effect;
A: Any person who has capacity to contract and capacity to
dispose of his property. (Art. 735, NCC) Note: But he is not liable for debts in excess of the value
of donation received, unless the contrary is intended.
Q: Why is there a need for capacity to contract?
2. Where there is no stipulation regarding the payment
A: Because a donation inter vivos is contractual in nature of debts: (Art. 759, NCC)
and is a mode of alienation of property. a. Donee is generally not liable to pay donor’s debts
b. Donee is responsible only if donation has been
Q: When is the possession of capacity to contract by the made in fraud of creditors.
donor determined?
Note: The presumption that the donations was made in
A: His capacity shall be determined as of the time of the fraud of creditors arises when the donor has not left
sufficient assets to pay his debts, at the time of
making of donation. (Art. 737, NCC)
donation.
Note: “Making of donation” shall be construed to mean perfection.
c. The done shall not be liable beyond the value of
Q: Who may qualify as donees? donation received.
A: All those who are not specially disqualified by law. DOUBLE DONATIONS
Q: May an unborn child be a donee or a donor? Q: When is there double donation?
A: An unborn child may be a donee but not a donor. A: When the same thing has been donated to two or more
persons.
As a donee, donations made to conceived and unborn
children may be accepted by those persons who would Q: What is the rule in case of a double donation?
legally represent them if they were already born. (Art. 742,
NCC) A: The rule on double sale under Article 1544 shall be
applicable:
Note: If the conceived child did not become a person, the donation 1. Movable – Owner who is first to possess in good
is null and void. An unborn child cannot be a donor because it is faith
2. Immovable –

CIVIL LAW
a. First to register in good faith gospel who extended spiritual aid to him during the
b. No inscription, first to possess in good faith same period;
c. No inscription & no possession in good faith 9. To a public Officer or his/her spouse, descendants or
– Person who presents oldest title in good ascendants in consideration of his/her office;
faith 10. To a Physician, surgeon, nurse, health officer or
druggist who took care of the donor during his/her last
EXCESSIVE/INOFFICIOUS illness;
REVOCATION OR REDUCTION
Q: What is the rule in case of an excessive or in officious
donation?
GROUNDS FOR REVOCATION AND REDUCTION
A:
Q: What are the grounds for revocation of donation?
1. A donor may not donate more than what he can give
by will. If he donates more than what he cannot give
A:
by will, the donation will become excessive and to
1. Under Art. 760
insist on it, the legitimism of the compulsory heirs will
a. Birth of a donor’s child or children (legitimate,
be impaired. Legitimism is reserved for the compulsory
legitimated, or illegitimate) after the donation,
heirs and the same cannot be impaired or disposed of
even though born after his death.
by the testator.
b. Appearance of a donor’s child who is missing and
thought to be dead by the donor
2. The donee cannot receive by way of donation more
c. Subsequent adoption by the donor of a minor
than what he may receive by will. If the donee can
child.
receive by donation (devise or legacy) more than what
the testator is allowed by law to give, the donation is
2. Under Art. 764 –When the donee fails to comply with
inofficious and it may be suppressed totally or reduced
any of the conditions which the donor imposed upon
as to its excess.
the donee.
IN FRAUD OF CREDITORS
3. Under Art. 765 – by reason of ingratitude
a. If the donee should commit some offense against
Q: What is the remedy in case of donations executed in
the person, the honor or the property of the
fraud of creditors?
donor, or of his wife or children under his
parental authority
A: The creditors may rescind the donation to the extent of b. If the donee imputes to the donor any criminal
their credits. The action is known as accion pauliana. offense, or any act involving moral turpitude,
even though he should prove it, unless the crime
Note: If the donor did not reserved enough assets to pay his or act has been committed against the donee
creditors whom he owned before the donation, the donation is himself, his wife or children under his authority
presumed to be in fraud of creditors. c. If he unduly refuses him support when the donee
is legally or morally bound to give support to the
VOID DONATIONS donor
Q: What are the donations prohibited by law? Q: What are the grounds for reduction of donation?
A: Donations made: LAW SCRA POP A: The same grounds for revocation under Art. 760. The
1. By individuals, associations or corporations not donation shall be reduced insofar as it exceeds the portion
permitted by Law to make donations; that may be freely disposed of by will, taking into account
2. By persons guilty of Adultery or concubinage at the the whole estate of the donor at the time of the birth,
time of donation; appearance, or adoption of a child. (Art. 761, NCC)
3. By a Ward to the guardian before the approval of
accounts; Q: Can a donation be revoked once it is perfected?
4. By Spouses to each other during the marriage or to
A: Once a donation is perfected, it cannot be revoked
persons of whom the other spouse is a presumptive
without the consent of the donee except on grounds
heir.
provided by law (Arts. 760, 764, 765, NCC)
5. Between persons found guilty of the same Criminal
offense in consideration thereof;
th Q: Is revocation or reduction automatic?
6. To Relatives of such priest, etc. within the 4 degree,
or to the church to which such priest belongs; A: No. The emergence of the circumstances enumerated in
7. To an Attesting witness to the execution of donation, if Art. 760 do not automatically revoke or reduce the
there is any, or to the spouse, parents or children or donation. The revocation or reduction is authorized only if
anyone claiming under them; the amount or value of the property donated exceeds the
8. To the Priest who heard the confession of the donor disposable free portion.
during the latter’s last illness, or the minister of the

PROPERTY
Q: For purposes of prescription of action, what is the rule 2. If due to causes stated under Art. 760, ingratitude, or
in case of concurrence of two or more grounds for inofficious donations – fruits acquired from the time
revocation or reduction? the complaint is filed shall be returned (Art. 768)
A: In the event that two or more causes are present, the PRESCRIPTION
earliest among them shall be the starting point in the
reckoning of the period of prescription of the action.
Q: What is the period of prescription of action for
Q: Can a donor execute a donation subject to a condition? revocation or reduction?
A: Yes. A donor may execute a donation subject to a A:

condition, the non- fulfilment of which authorizes the PRESCIPTIVE RECKONING
donor to go to court to seek its revocation (not reduction). PERIOD PERIOD
Birth of child 4 years From the birth of
Note: The word “condition” should be understood in its broad the first child
sense and not in its strict legal sense. It means charges or burdens Legitimation 4 years From Birth of the
imposed by the donor. legitimated child,
not from the date
Q: In a conditional donation, can revocation be done of marriage of the
unilaterally by the donor? parents
Recognition 4 years From the date the
A: No. A donor cannot revoke a conditional donation
of an recognition of the
unilaterally, that is, without going to court, even if the
illegitimate child by any
donee had breached any of the obligations imposed in the
child means
donation. A Judicial action is essential if the donee refuses
enumerated in
to return the property, or pay its value to the donor, or to
Article 712 of the
latter’s heirs or assigns. However, the action must be filed
Family Code
within the prescriptive period fixed buy law, otherwise, it
Adoption 4 years From the date of
will be barred (Ongsiaco v. Ongsiaco, 101 Phil 1196).
filing of the
Q: Can the creditors of the deceased file an action for original petition
reduction of inofficious donation? for adoption,
provided a decree
A: No. Only compulsory heirs or their heirs and successors of adoption is
in interest may sue for reduction of inofficious donations. issued thereafter
The remedy of the creditor is to sue, during the lifetime of Appearance 4 years From the date an
the donor, for the annulment of inofficious donation made of a child information was
in fraud of creditors (Art. 1387); or they can go against the believed to received as to the
estate of the deceased and not against the donees. be dead existence or
survival of the
child believed to
EFFECTS
be dead
Non- 4 years From the non-
Q: What are the obligations of the donee upon the compliance compliance with
revocation or reduction of donation? with any the condition
condition
A: imposed
1. Return the thing or the object of the donation Act of 1 year From the time the
2. If the property had already been alienated and could ingratitude donor had
not be recovered anymore, its value shall be paid to learned of the
the donor. The value shall be the price of the property donee’s act of
estimated at the time of the perfection of the ingratitude,
donation provided it was
3. If the property had been mortgaged, the donor may possible for him
pay the mortgage obligations, subject to to file an action.
reimbursement by the donee. (Art. 762)
Q: What if the donor dies within the four-year prescriptive
Q: Is the donee required to return the fruits? period?
A: A: The right of action to revoke or reduce is transmitted to

1. If due to non-compliance with any condition imposed his heirs. (Pineda Property, 1999, p. 589)
on the donation – fruits acquired after non-compliance
shall be returned

CIVIL LAW
INOFFICIOUS DONATIONS the value of the property determined as of the time of the
donation. (Art. 767, NCC)
Q: When is a donation inofficious?
Q: Can the donor make a renunciation of actions to revoke
A: A donation is inofficious or excessive when its amount in advance?
impairs the legitimes of the compulsory heirs.
A: No. Such waiver is void.
Note: Donations must be charged only against the disposable free
portion. If its amount exceeds the same, the excess is void for Note: However, the donor may renounce an action to revoke if the
being inofficious (Pineda Property, p. 598, 1999) act of ingratitude had already been done.
Q: What is the status of an inofficious donation?
A: During the lifetime of the donor, the inofficious donation

is effective since the excessiveness of the donation can only
be determined after the donor’s death.
Note: Consequently, the donee is entitled to the fruits of

the property donated during the lifetime of the donor (Art.
771, NCC)
Q: May an heir waive his right during the lifetime of the

donor to file an action for suppression or reduction of an
inofficious donation?
A: No. Such waiver, in whatever form it is extended, is void.

(Art. 772, NCC)
INGRATITUDE
Q: Are there any other grounds for revocation of donation

by reason of ingratitude other than those enumerated
under Art. 765?
A: None. The grounds under Art. 765 are exclusive.
Q: Suppose the husband of the donee had maligned the

donor, is there a ground for revocation by reason of
ingratitude?
A: None. The act must be imputable to the donee himself

and not to another. (Pineda, 1999, p. 593)
Q: What if there are mortgages and alienations effected

before the notation of the complaint for revocation in the
Registry of Property?
A: Such alienations and mortgages shall remain valid and

must be respected. (Art. 766, NCC)
Note: Alienations and mortgages after the registration of the

pendency of the complaint shall be void.
Q: What is the remedy of the donor?
A: If the property is already transferred in the name of the

buyer or mortgagee, the remedy of the donor is to recover

PROPERTY
SUMMARY OF THE RULES ON REDUCTION OF DONATIONS
TIME OF FILING OF THE TRANSMISSIBILITY OF

EXTENT OF REDUCTION RIGHTS TO THE FRUITS
ACTION ACTION
1. Failure of the donor to reserve sufficient means for support (Art. 750, NCC)
Any time by the donor Not transmissible Donation reduced to Donee is entitled to the
or by relatives entitled
extent necessary to fruits as owner of the
to support during the Note: the duty to give and
provide support (Art. property donated (Art.
donor’s lifetime (Art. right to receive support are
personal (Art. 195, FC) 750, NCC) 441, NCC)
750, NCC)
2. Inofficiousness for being in excess of what the donor can give by will (Art. 750, 771, NCC)
Transmissible to Donation effective

donor’s heirs as during the donor’s
Within 5 years after the
donation shall be lifetime subject to Donee appropriates fruits
donor’s death (Art.
reduced as regards the reduction only upon his (Art. 441, NCC)
771, 1149, NCC)
excess at donor’s death death with regard to the
(Art. 771, NCC) excess (Art. 771, NCC)
3. Birth, appearance or adoption of a child (Art. 760, NCC)
[Same as in #1
Donee appropriates fruits
Revocation]
not affected by reduction
[Same as in #1 [Same as in #1
(Art. 441, NCC). When
W/in 4 years from birth Revocation] Reduction]
st donation is revoked for
of 1 child, legitimation
any of the cause
(recognition), adoption, To children & Donation reduced to
mentioned in article 760,
judicial declaration of descendants of donor extent necessary to
the donee shall not return
filiation or receipt of upon his death provide support (Art.
the fruits except from the
info of existence of the (Art. 763, 2, NCC) 750, NCC)
filing of the complaint
child believed to be
(Art. 768, NCC).
dead. (Art. 763, NCC)
4. Fraud against creditors (Art. 759, NCC)
Fruits shall be returned in

Within 4 years from
Property returned for case donee acted in bad
perfection of donation
To creditor’s heirs or the benefit of creditors faith; if impossible to
or from knowledge by
successors-in-interest subject to the rights of return, indemnify the
the creditor of the rd
(Art. 1178, NCC) innocent 3 persons donor’s creditor for
donation (Art. 1389,
(Art. 1387, NCC) damages (Art. 1388, ,
NCC)
NCC)
MODES OF EXTINGUISHING OWNERSHIP f. destruction of the prior title or right

i.e. expropriation , rescission, annulment,
fulfillment of a resolutory condition)
Q: What are the modes of extinguishing ownership? g. Prescription (Paras, p. 779)
A: Q: What is a de facto case of eminent domain?

1. Absolute – all persons are affected
a. physical loss or destruction A: Expropriation resulting from the actions of nature as in a
b. legal loss or destruction (when it goes out of case where land becomes part of the sea. In this case, the
commerce of man) owner loses his property in favor of the state without any
2. Relative – only for certain persons for others may compensation.
acquire their ownership
a. law
b. succession
c. tradition as a consequence of certain contracts
d. donation
e. abandonment

CIVIL LAW
PRESCRIPTION Relationship by owner and possessor
Relationship between the
DEFINITION
occupant and the land in One does not look to the
terms of possession is act of the possessor but
Q: What is meant by prescription?
capable of producing legal to the neglect of the
consequences; it is the owner
A: One acquires ownership and other real rights through possessor who is the actor
the lapse of time in the manner and under the conditions
laid down by law. In the same way, rights and actions are Q: Who may acquire by prescription?
lost by prescription. (Art. 1106, NCC)
A: PSM
Q: What are the kinds of prescription? 1. Persons who are capable of acquiring property by
other legal modes
A: 2. State
1. Acquisitive prescription - one acquires ownership and 3. Minors – through guardians of personally
other real rights through the lapse of time in the
manner and under the conditions laid down by law. Q: Who are the persons against whom prescription runs?
a. Ordinary – requires the possession of things in
good faith and with a just title for the time fixed A: MAPJ
by law; 1. Minors and other incapacitated persons who have
b. Extraordinary – does not require good faith or parents, guardians or other legal representatives.
just title but possession for a period longer than 2. Absentees who have administrators.
ordinary acquisitive prescription 3. Persons living abroad who have managers or
2. Extinctive prescription – loss of property rights or administrators
actions through the possession by another of a thing 4. Juridical persons, except the state and its subdivision
for the period provided by law or failure to bring the
necessary action to enforce one’s right with in the Q: Against whom does prescription not run?
period fixed by law.
A: SPG
Q: Differentiate acquisitive from extinctive prescription. 1. Between Spouses, even though there be a separation
of property agreed upon in the marriage settlements
A: or by judicial decree.
ACQUISITIVE EXTINCTIVE 2. Between Parents and children, during the minority or
insanity of the latter.
How acquired
3. Between Guardian and ward during the continuance of
Inaction of the owner of the guardianship
Requires possession by a
possession or neglect of
claimant who is not the
his right to bring an Q: What can be subject of prescription?
owner
action
Rights covered A: PP
1. Private property
Applicable to all kinds of
Applicable to ownership and 2. Patrimonial property of the state
rights whether real or
other real rights
personal
Note: Patrimonial property of the state is the property it owns but
Effect which is not devoted to public use, public service, or the
development of national wealth. It is wealth owned by the state in
Produces the extinction
Vests ownership and other its private, as distinguished from its public, capacity. (Paras, p. 58)
of rights or bars a right of
real rights in the occupant
action
ACQUISITIVE
Results in the acquisition of
Results in the loss of a
ownership or other real rights CHARACTERISTICS
real or personal right or
in a person as well as the loss
bars the cause of action
of said ownership or real Q: What is the basis of acquisitive prescription?
to enforce the right
rights in another
How proved A: It is based on the assertion of a usurper of an adverse
right for such a long period of time, uncontested by the
Should be affirmatively
Can be proven under the true owner of the right, as to give rise to the presumption
pleaded and proved to
general issue without its that the latter has given up such right in favor of the
bar the action or claim of
being affirmatively pleaded former. (Tolentino, Civil Code, Vol. IV, p. 2)
the adverse party

PRESCRIPTION
Q: What are the basic requirements of prescription as a Note: An absolutely simulated or fictitious title is void and cannot
mode of acquiring ownership? be a basis for ordinary prescription. (Pineda Succession and
Prescription, p. 646, 2009)
A:
1. Actual possession of a property, which is susceptible of Q: What is a valid title?
prescription
2. Possession must be in the concept of an owner and A: A title which is sufficient to transmit ownership of the
not that of a mere holder (Art. 1118) property or right being conveyed had the transferor or
3. Possession must be public or open (Art. 1118) grantor been the real owner thereof.
4. Possession must be peaceful (Art. 1118)
5. Possession must be continuous and not interrupted EXTRAORDINARY
(Art. 1118)
6. Possession must be adverse, that is, exclusive and not Q: What is extraordinary prescription?
merely tolerated
7. Possession must satisfy the full period required by law
A: Prescription where the possessor is in bad faith. It does
(Pineda Succession and Prescription, p. 606, 2009)
not require good faith or just title but possession for a
period longer than ordinary acquisitive prescription.
ORDINARY (Pineda Succession and Prescription, p. 607, 2009)
Q: What is ordinary prescription? Q: How does ownership of personal property prescribe?
A: It requires possession of things in good faith and with A: Through uninterrupted possession for 8 years, without
just title for the time fixed by law. need of any other condition. (Art. 1132)
GOOD FAITH
Q: How about ownership and other real rights over
immovables?
Q: When is a possessor in good faith?
A: They prescribe through uninterrupted adverse
A: If he is not aware of the existence of any flaw or defect possession for 30 years, without need of title or of good
in his title or mode of acquisition which invalidates it (Art. faith. (Art. 1137)
526 in relation to Art. 1128) and has reasonable belief that
the person from whom he received the thing was the
Q: What are the requisites of extraordinary prescription?
owner thereof, and could transmit his ownership. (Art.
1127) A: CLAS G
1. Capacity of the possessor to acquire by prescription;
Q: When must good faith exist? 2. Susceptibility of object to prescription;
3. Adverse possession of the character prescribed by law;
A: It must exist not only from the beginning but throughout 4. Lapse of time required by law;
the entire period of possession fixed by law. (Pineda 5. Good faith of possessor or proof of just title.
Succession and Prescription, p. 643, 2009)
REQUISITES
JUST TITLE
Q: What are the basic requirements of prescription as a
Q: What does just title mean? mode of acquiring ownership?
A:
A: It means that the possessor obtained the possession of
1. Capacity to acquire by prescription;
the property through one of the modes recognized by law
2. A thing capable of acquisition by prescription;
for acquiring ownership but the transferor or grantor was
3. Possession of the thing under certain conditions; and
not the owner of the property or he has no power to
4. Lapse of time provided by law
transmit the right. (Art. 1129)
Note: Just title is never presumed, it must be proved. (Art. Note: The first two requisites apply to both ordinary and
1130, NCC) extraordinary prescription, but the last two requisites vary for each
kind.
Q: What is a true title?
A: One which actually exists and is not just a pretended

one.

CIVIL LAW
PERIOD commenced in 1960 when Flores, who had neither title nor
good faith, secured a tax declaration in his name and may,
Q: What are the periods as regards prescription as a mode therefore, be said to have adversely claimed ownership of
of acquisition of ownership? the lot. On said date, respondents were also deemed to
have become aware of the adverse claim. Flores’s
A: possession thus ripened into ownership through acquisitive
1. Movables prescription after the lapse of 30 years (Heirs of Restar v.
a. 4 years- good faith Heirs of Cichon, G.R. No. 161720, November 22, 2005).
b. 8 years- bad faith
2. Immovables Q: Sixto, owner of a parcel of land, died. He was survived
a. 10 years- good faith by his wife and 3 children. The subject land was donated
b. 30 years- bad faith by his wife to Silverio, who immediately entered into
possession of the land, built a fence around it, constructed
Q: What are the rules for the computation of time a residential house, declared it for tax purposes and paid
necessary for prescription? the taxes thereon, and resided there until his death. After
45 years from the time of donation, Soledad, one of
A: Sixto’s children, filed a complaint for recovery of
1. The present possessor may complete the period ownership, and possession against Silverio. Who is the
necessary for prescription by tacking his possession to rightful owner of the land?
that of his grantor or predecessor in interest.
2. It is presumed that the present possessor who was A: By extraordinary acquisitive prescription, Silverio
also the possessor at a previous time, has continued to became the rightful owner of the land. In extraordinary
be in possession during the intervening time, unless prescription ownership and other real rights over
there is proof to the contrary. immovable property are acquired through uninterrupted
3. The first day shall be excluded and the last day adverse possession thereof for 30 years without need of
included. (Art 1138, NCC) title or of good faith.
When Soledad filed the case, Silverio was in possession of

WHAT CANNOT BE REQUIRED BY ACQUISITIVE the land for 45 years counted from the time of the
PRESCRIPTION donation. This is more than the required 30 years of
uninterrupted adverse possession without just title and
Q: What cannot be subject of prescription? good faith. Such possession was public, adverse and in the
concept of an owner. He declared the land for taxation
A: PRIM purposes and religiously paid the realty taxes thereon.
1. Public domain; Together with his actual possession of the land, these tax
2. Registered land; declarations constitute strong evidence of ownership of the
3. Intransmissible rights; land occupied by him (Calicdan v. Cendeña, G.R. No.
4. Movables possessed through a crime; 155080, February 5, 2004).
Q: Emilio died, leaving 8 children. In 1960, His eldest child, Q: Anthony bought a piece of untitled agricultural land
Flores, took possession of and cultivated the land, caused from Bert. Bert, in turn, acquired the property by forging
the cancellation of the tax declaration in Emilio’s name Carlo’s signature in a deed of sale over the property. Carlo
covering a parcel of land and caused the issuance of had been in possession of the property for 8 years,
another in his own name. The co-heirs of Flores declared it for tax purposes, and religiously paid all taxes
discovered the cancellation. Upon Flores’ death, the heirs due on the property. Anthony is not aware of the defect in
of his sisters together with his surviving sisters filed a Bert’s title, but has been in actual physical possession of
complaint in 1999 against the heirs of Flores for partition the property from the time he bought it from Bert, who
of the lot and declaration of nullity of the documents. Did had never been in possession. Anthony has since then
the heirs of Flores acquire ownership over the lot by been in possession of the property for 1 year. Can
extraordinary acquisitive prescription? Anthony acquire ownership of the property by acquisitive
prescription? How many more years does he have to
A: Yes. While the action to demand partition of a co-owned possess it to acquire ownership?
property does not prescribe, a co-owner may acquire
ownership thereof by prescription, where there exists a A: Yes, Anthony can acquire ownership of the property by
clear repudiation of the co-ownership, and the co-owners ordinary acquisitive prescription which requires just title
are apprised of the claim of adverse and exclusive and good faith (Art. 1117, NCC). There was just title
ownership. In this case, the respondents never possessed because a deed of sale was issued in his favor even though
the lot, much less asserted their claim thereto until 1999 it was forged, which fact he was not aware of. He needs to
when they filed the complaint for partition. In contrast, possess the land in good faith and in the concept of owner
Flores took possession of the lot after Emilio’s death and for a total of 10 years in order to acquire ownership. Since
exercised acts of dominion thereon- tilling and cultivating Anthony possessed the land for only one year, he has not
the land, introducing improvements, and enjoying the completed the 10-year period. Even if Anthony tacks the 8-
produce thereof. The statutory period of prescription year period of possession by Carlo who in the deed of sale

PRESCRIPTION
is supposed to be his grantor or predecessor in interest, the acquisition of the property by the transferor.
period is still short of ten years. (Art. 1133, Pineda Succession and
Q: If Carlo is able to legally recover his property, can he 1. An action to recover a
require Anthony to account for all the fruits he has registered land by the owner
harvested from the property while in possession? 2. Right to petition for the
issuance for the issuance of a
A: Since Anthony is a possessor in good faith, Anthony Registered Lands Writ of Possession filed by the
cannot be made to account for the fruits he gathered (P.D. 1529) applicant for registered land
before he was served with summons. A possessor in good
faith is entitled to the fruits received before the possession Note: Similarly, an action to recover
was legally interrupted by the service of summons (Art. possession of a registered land never
544, NCC). After Anthony was served with summons, he prescribes.
became a possessor in bad faith and a builder, planter, 1. Action legal to
sower in bad faith. He can also be made to account for the demand a right
fruits but he may deduct expenses for the production of way Imprescriptible
gathering and preservation of the fruits (Art. 443, NCC). 2. To abate a
nuisance
Q: If there are standing crops on the property when Carlo Action to quiet
recovers possession, can Carlo appropriate them? (2008 title if plaintiff is Imprescriptible
Bar Question) in possession
Applies to both action and defense.
A: The value of the standing crops must be prorated
depending upon the period of possession and the period of Void contracts
Note: However, an action to annul a voidable
growing and producing the fruits. Anthony is entitled to a contract prescribes after 4 years
part of the net harvest and a part of the expenses of
Action to
cultivation in proportion to his period of possession.
demand
However, Carlo may allow Anthony to gather these growing As long as the co-ownership is
partition
fruits as an indemnity for the expenses of cultivation. If recognized expressly or impliedly (Art.
Note:
Anthony refuses to accept this concession, he shall lose the 494)
Distinguished
right to indemnity under Art. 443. (Art. 545, par. 3, NCC).
from laches
Right of reversion or reconveyance to
EXTINCTIVE
the State of the public properties
registered and which are not capable of
Q: What is extinctive prescription? private appropriation or private
acquisition does not prescribe
A: It refers to the time within which an action may be Property of
brought, or some act done, to preserve a right (Pineda public dominion Note: In contrast, where private property is
Succession and Prescription, p. 660, 2009 ed). taken by the Government for public use
without first acquiring title thereto either
through expropriation or negotiated sale , the
Q: What is the basis of extinctive prescription? owner’s action to recover the land or the
value thereof does not prescribe.
A: It based on the probability, born of experience, that the
alleged right which accrued in the past never existed or has PRESCRIPTION OR LIMITATION OF ACTIONS
already been extinguished; or if it exists, the inconvenience
caused by the lapse of time should be borne by the party
Q: What are the respective prescriptive periods of actions
negligent in the assertion of his right (Tolentino, Civil Code
specified under the Civil Code?
of the Philippines, Vol. IV, p. 2).
A:
NO PRESCRIPTION APPLICABLE ACTIONS PRESCRIPTIVE PERIOD
When it is possessed through a crime 8 years (good faith)or 4
such as robbery, theft, or estafa. years (bad faith) from the
time the possession is lost
Recover Movables
Note: The person who cannot invoke the (Art. 1140, Pineda Succession
By Offender right of prescription is the offender or person and Prescription, p. 666,
who committed the crime or offense, not a 2009)
subsequent transferee who did not 30 years (Recover
participate in the crime or offense, unless the
Recover Immovables ownership) (Art. 1141)
latter knew the criminal nature of the
10 years (Recover real right

CIVIL LAW
of possession) (Art. 555

(4),Pineda Succession and
10 years from default of
Mortgage Action
mortgagor (Art. 1142)
Based on written contract
Note: If contract is oral or 10 years

quasi, prescriptive period is
6 years (Art. 1145)
Based on obligation 10 years from the time the
created by law right of action accrues
10 years from the day
Based on judgment judgment became final and
executory (Art. 1144)
Based upon an injury to the 4 years
rights of plaintiff
Based on quasi-delicts 4 years (Art. 1146)
Forcible entry and detainer 1 year
Defamation 1 year (Art. 1147)
All other actions not 5 years (Art. 1149)
specified

OBLIGATIONS
OBLIGATIONS Note: In order to be valid, the object must be:
1. licit or lawful;
DEFINITION 2. possible, physically & judicially;
3. determinate or determinable; and
4. pecuniary value or possible equivalent in money.
Q: What is an obligation?
Note: Absence of either of the first three (licit, possible and/or
A: It is a juridical necessity to give, to do, or not to do. (Art. determinate) makes the object void.
1156)
Form is not generally considered essential, though sometimes it is
It is a juridical relation whereby a person (creditor) may added as the 5threquisite.There is no particular form to make
demand from another (debtor) the observance of a obligations binding, except in certain rare cases. (Tolentino, Civil
Code of the Philippines, Vol. IV, 2002 ed. p. 57)
determinative conduct (giving, doing, or not doing), and in
case of breach, may demand satisfaction from the assets of
DIFFERENT KINDS OF PRESTATION
the latter (Arias Ramos).
Note: Art. 1156 refers only to civil obligations which are Q: What are the different kinds of prestation?
enforceable in court when breached. It does not cover natural
obligations (Arts. 1423-1430) because these are obligations that A:
cannot be enforced in court being based merely on equity and OBLIGATION TO OBLIGATION TO OBLIGATION NOT
natural law and not on positive law (Pineda, Obligations and GIVE DO TO DO
Contracts, 2000 ed., p3).
Consists in the
Covers all kinds of
ELEMENTS OF AN OBLIGATION delivery of a Consists in
works or services
movable or refraining from
whether physical
Q: What are the elements of an obligation? immovable thing doing some acts
or mental
to the creditor
A: JAPO i.e. – Easement
1. Juridical tie or vinculum juris or efficient cause – is prohibiting building
the efficient cause by virtue of which the debtor proprietor or
i.e. – Contract for
has become bound to perform the prestation possessor from
i.e. – Sale, professional
(Pineda, Obligations and Contracts, 2000, p.2). committing
deposit, pledge, services like
nuisance(Art. 682),
Note: The vinculum juris is established by:
donation, painting,
restraining order or
1. law (i.e. – relation of husband and wife for antichresis modeling, singing,
injunction (Pineda,
support) etc.
Obligations and
2. bilateral acts (i.e. – contracts)
Contracts, p. 3,
3. unilateral acts (i.e. – crimes and quasi-delicts)
(Tolentino, Civil Code Vol. IV, 1999 ed. p.59) 2000)
2. Active subject [creditor (CR) or obligee] – is the Note: It is the conduct that must be observed by the
one who is demanding the performance of the debtor/obligor. (Pineda, Obligations and Contracts, p. 2, 2000)
obligation. It is he in whose favor the obligation is
constituted, established or created (Pineda, Q: What are the requisites of a valid prestation?
Obligations and Contracts, 2000, p.2).
A:
3. Passive subject [debtor (DR) or obligor] – is the 1. Possible, physically and juridically;
one bound to perform the prestation to give, to 2. Determinate, or at least determinable according to
do, or not to do (Pineda, Obligations and pre-established elements or criteria; and
Contracts, 2000 ed., p. 2). 3. Has a possible equivalent in money (Tolentino, Civil
Code Vol. IV, p. 58, 1999 ed).
Note: When there is a right there is a corresponding
obligation. Right is the active aspect while obligation is CLASSIFICATION OF OBLIGATIONS
the passive aspect. Thus, it is said that the concepts of
credit and debt are two distinct aspects of unitary Q: What are the kinds of obligation?
concept of obligation. (Pineda, Obligations and
Contracts, p. 2, 2000) A: From the viewpoint of:
1. Sanction
4. Object or prestation – it is the subject matter of a. Civil – gives a right of action to compel their
the obligation which has an economic value or performance
susceptible of pecuniary substitution in case of b. Natural – not based on positive law but on
noncompliance. It is a conduct that may consist of equity and natural law; does not grant a right
giving, doing, or not doing something. (Pineda, of action to enforce their performance, but
Obligations and Contracts, p. 2, 2000) after voluntary fulfillment by the obligor,
they authorize retention of what has been
delivered/ rendered by reason thereof.

CIVIL LAW
c. Moral – cannot be enforced by action but b.
Facultative – only one prestation has been
are binding on the party who makes it in agreed upon, but the obligor may render one
conscience and natural law. in substitution of the first one (Art. 1206)
2. Performance 11. Imposition of penalty
a. Positive – to give; to do a. Simple – there is no penalty imposed for
b. Negative – not to do violation of the terms thereof (Art. 1226)
3. Subject matter b. Obligation with penalty – obligation which
a. Personal – to do; not to do imposes a penalty for violation of the terms
b. Real – to give thereof (Art. 1226; Pineda, Obligations and
4. Object Contracts, 2000 ed, p. 5-7)
a. Determinate/specific– particularly
designated or physically segregated from all SOURCES OF OBLIGATIONS
others of the same class.
b. Generic– is designated merely by its class or Q: What are the sources of obligations?
genus.
c. Limited generic– generic objects confined to A: LCQ-DQ
a particular class (e.g. an obligation to Sources Obligations Perfection
deliver one of my horses) (Tolentino, Civil From the time designated
Code of the Philippines, Vol. IV, 2002 ed, p. Law ex lege by the law creating or
91) regulating them.
5. Person obliged GR: From the time of the
a. Unilateral – only one party is bound perfection of the contract
b. Bilateral – both parties are bound (i.e. meeting of the minds)
Note: A bilateral obligation may be reciprocal or XPNs:

non-reciprocal. Reciprocal obligations are those 1. When the parties
which arise from the same cause, wherein each
made stipulation on
party is a debtor and a creditor of the other, such
that the performance of one is conditioned upon the right of the
the simultaneous fulfilment of the other. creditor to the fruits
Contracts ex contractu
of the thing
6. Creation 2. When the obligation is
a. Legal – imposed by law (Art. 1158) subject to a
b. Conventional – established by the suspensive condition
agreement of the parties like contracts or period, it arises
7. Susceptibility of partial fulfillment upon fulfillment of the
a. Divisible – obligation is susceptible of partial condition or
performance (Art. 1223; 1224) expiration of the
b. Indivisible – obligation is not susceptible of period.
partial performance (Art. 1225) Quasi- ex quasi-
8. Existence of burden or condition contracts contractu
a. Pure – is not burdened with any condition or ex maleficio or From the time designated
Delicts
term. It is immediately demandable (Art. ex delicto by the law creating or
1179) ex quasi regulating them.
Quasi-
b. Conditional – is subject to a condition which maleficio or ex
delict
may be suspensive (happening of which shall quasi- delicto
give rise to the obligation) or resolutory
(happening of which terminates the Note: No obligation exists if its source is not one of those
obligation). (Art. 1181) enumerated in Article 1157 (Navales v. Rias, 8 Phil. 508)
9. Character of responsibility or liability
a. Joint – each debtor is liable only for a part of OBLIGATION EX LEGE
the whole liability and to each creditor shall
belong only a part of the correlative rights (8 Q: Are obligations derived from law presumed?
Manresa 194; Art. 1207)
b. Solidary – a debtor is answerable for the A: No. Obligations derived from law are not presumed. Only
whole of the obligation without prejudice to those expressly determined in the Code or in special laws
his right to collect from his co-debtors the are demandable and shall be regulated by the precepts of
latter’s shares in the obligation (Art. 1207) the law which establishes them and as to what has not
10. Right to choose and substitution been foreseen by the provisions of Book IV of NCC. (Art.
a. Alternative – obligor may choose to 1158)
completely perform one out of the several
prestations (Art. 1199) Note: If there is conflict between the NCC and a special law, the
latter prevails unless the contrary has been expressly stipulated in
UNIVERSITY OF SANTO TOMAS 152

2013 GOLDEN NOTES
OBLIGATIONS
the NCC. (Art. 18, Paras, Civil Code of the Philippines Annotated, OBLIGATION EX QUASI - CONTRACTU
Vol. IV, 2008 ed., p. 86)
Q: What is quasi-contract?
Q: What are the characteristics of a legal obligation or an
obligation ex lege? A: It is a juridical relation arising from lawful, voluntary and
unilateral acts based on the principle that no one shall be
A: unjustly enriched or benefited at the expense of another
1. Does not need the consent of the obligor; (Art. 2142).
2. Must be expressly set forth in the law creating it and
not merely presumed; and Q: What are the characteristics of a quasi-contract?
3. In order that the law may be a source of obligation, it
should be the creator of the obligation itself. (Art. A:
1158) 1. It must be lawful
2. It must be voluntary
OBLIGATION EX CONTRACTU 3. It must be unilateral (Pineda, Obligations and
Contracts, p.14, 2000)
Q: Do obligations arising from contracts have the force of Q: What is presumptive consent?
law between the parties?
A: Since a quasi-contract is a unilateral contract created by
A: Yes. Obligations arising from contracts have the force of the sole act or acts of the gestor, there is no express
law between the parties and should be complied with in consent given by the other party. The consent needed in a
good faith (Art. 1159). contract is provided by law through presumption (Pineda,
Obligations and Contracts, p. 15, 2000).
Q: What are the requisites for a contract to give rise to
obligations ex contractu? Q: What are the principal forms of quasi-contracts?
A: A:
1. It must contain all the essential requisites of a 1. Negotiorum gestio (inofficious manager) – arises when
contract (Art. 1318) a person voluntarily takes charge of the management
2. It must not be contrary to law, morals, good of the business or property of another without any
customs, public order, and public policy. (Art. power from the latter (Art. 2144).
1306) 2. Solutio indebiti (unjust enrichment)–takes place when
a person received something from another without
Q: What is compliance in good faith? any right to demand for it, and the thing was unduly
delivered to him through mistake (Art. 2154).
A: It is performance in accordance with the stipulation,
clauses, terms and conditions of the contract (Pineda, Note: The delivery must not be through liberality or some other
Obligations and Contracts, 2000 ed., p. 12). cause.
Note: The contract is the “law” between the parties (Art. 1159). Q: What is the rule in case of excess of payment of
interest?
Q: May a party unilaterally evade his obligation in the
contract? A: If the borrower pays interest when there has been no
stipulation therefor, the provisions of the Code concerning
A: GR: Neither party may unilaterally evade his obligation in solutio indebiti, or natural obligations, shall be applied, as
the contract. the case may be.
XPNs: Unilateral evasion is allowed when the: Note: If the payment of interest is made out of mistake, solutio
1. contract authorizes such evasion indebiti applies; hence, the amount must be returned to the
2. other party assents thereto debtor. If the payment was made after the obligation to pay
interest has already prescribed, natural obligation applies; hence,
the creditor is authorized to retain the amount paid.
Q: What governs obligations arising from contracts?
*For further discussion on quasi contracts, please see page
A: GR: These obligations shall be governed primarily by the
399 on Credit Transactions
stipulations, clauses, terms and conditions of the parties’
agreements.
OBLIGATIONS EX DELICTO
XPN: Contracts with prestations that are
Q: What is delict?
unconscionable or unreasonable (Pineda, Obligations
and Contracts, 2000 ed., p. 12-13).
A: It is an act or omission punished by law.

CIVIL LAW
Q: What is the basis for civil liability arising from delicts as Q: What are the elements of a quasi-delict?
according to the penal code?
A: NDCN
A: Art. 100 of the Revised Penal Code provides that: “Every 1. Negligent or wrongful act or omission;
person criminally liable for a felony is also civilly liable.” 2. Damage or injury caused to another;
3. Causal relation between such negligence or fault
A crime has dual character: (1) as an offense against the and damage;
state because of the disturbance of the social order; and (2) 4. No pre-exisitng contractual relationship between
an offense against the private person injured unless it the parties (Article 2176).
involves the crime of treason, rebellion, espionage,
contempt and others wherein no civil liability arises on the Q: When is a person liable for a quasi-delict?
part of the offender either because there are no damages
to be compensated or there is no private person injured by A: He is liable for such when, by his act or omission, he
the crime (Reyes, The Revised Penal Code, Criminal Law, causes damage to another, there being fault or negligence,
Book One, 2008, ed., p. 875). and there is no pre-existing contractual relationship
between them. (Art. 2176, NCC)
Q: What is the scope of civil liability?
Note: A single act or omission may give rise to two or more causes
A: RRI of action. Thus, an act or omission may give rise to an action based
1. Restitution on delict, quasi-delict or contract.
2. Reparation for damage caused
In negligence cases, prior conduct should be examined, that is,
3. Indemnity for consequential damages (Art. 104, conduct prior to the injury that resulted, or in proper case, the
RPC) aggravation thereof.
Q: Is civil action implicitly instituted in criminal case? Q: When is Art.2176 on quasi-delict inapplicable?
A: GR: Yes. When a criminal action is instituted, the civil A:

action for the recovery of the civil liability arising from the 1. When there was a pre-existing contractual relation
offense charged shall be deemed instituted with the because the breach of contract is the source of the
criminal action (Rule 111, Sec. 1, Rules of Court). obligation (Robles v. Yap Wing, 41 SCRA 267).
XPNs: No. When the offended party: Note: However, if the act that breaches the contract is tortuous,
1. Waives the civil action the pre-existing contractual relation will not bar the recovery of
2. Reserves the right to institute it separately damages (Singson v. BPI, G.R. No. L-24837, June 27, 1968)
3. Institutes the civil action prior to the criminal
action (Rule 111, Sec. 1, Rules of Court) 2. When the fault or negligence is punished by law as a
crime, Art. 100 of RPC shall be applicable.
Q: What is the effect of acquittal in criminal case?
3. If the action for quasi-delict is instituted after 4 years, it is
A: GR: The acquittal of the accused in criminal case on the deemed prescribed. (Afialda v.Hisole, 85 Phil 67)
ground of reasonable doubt does not preclude the filing of
a subsequent civil action and only preponderance of 4. When the injury suffered by a person is the result of a
evidence is required to prove the case. fortuitous event without human intervention.
XPN: When the acquittal is based on the reason that: 5. If there is no damage or injury caused to another. (Walter
1. The accused did not commit the crime charged; A. Smith & Co. v. Cadwallader Gibson Lumber Company, 55
or Phil 517)
2. There is a declaration in the decision of acquittal
that no negligence can be attributed to the * For further discussion on quasi delict, see page 471 on
accused and that the fact from which the civil torts and damages
action might arise did not exist (Art. 29)
OBLIGATIONS EX QUASI – DELICTO
Q: What is quasi-delict or tort?
A: It is an act or omission arising from fault or negligence

which causes damage to another, there being no pre-
existing contractual relations between the parties (Art.
2176)

2013 GOLDEN NOTES
OBLIGATIONS
DISTINGUISHED FROM CULPA CONTRACTUAL AND CULPA Q: What are the conditions for natural obligations to
CRIMINAL arise?
Q: Distinguish quasi-delict from culpa contractual and A:

culpa criminal 1. The obligation is not prohibited by law or contrary to
morals and good customs.
A: 2. There must be a previous juridical relationship
CULPA CULPA between two persons but due to certain intervening
CULPA AQUILIANA
CONTRACTUAL CRIMINAL circumstances, it lost its legal enforceability leaving its
Civil fulfillment entirely to the free will or discretion of the
Negligence,Quasi- supposed debtor. (Pineda, Obligations and Contracts,
Contractual Criminal
Delict, 2000 ed, p. 633)
Negligence Negligence
Tort,or Culpa Extra-
Contractual Q: Distinguish natural obligation from civil obligation.
Proof Needed
Proof of guilt A:
Preponderance of Preponderance of beyond NATURAL OBLIGATION CIVIL OBLIGATION
evidence evidence reasonable Based from law, contracts,
Based on equity and
doubt quasi-contracts, delicts, and
natural law
Onus Probandi quasi-delicts
Cannot be enforced in
Victim must prove: Can be enforced in court
court because the obligee
1. The damage because the obligee has a
Contracting party Prosecution has no right of action to
suffered; right of action
must prove: must prove compel its performance
2. The negligence of
1. The the guilt of
the defendant;
existence of the accused Q: Distinguish natural obligation from moral obligation
3. The causal
the contract; beyond
connection
2. The breach reasonable A:
between the
thereof. doubt. NATURAL OBLIGATION MORAL OBLIGATION
damage and the
negligence. Juridical tie previously
existed between the parties
Defense Available
but because of certain
Exercise of Exercise of diligence No juridical tie
Defenses intervening causes they
extraordinary of a good father of a cannot be enforced in
provided for
diligence (in family in the courts
under the
contracts of selection and Voluntary fulfillment by the Performance is a pure act
Revised Penal
carriage), Force supervision of debtor is a legal fulfillment of liberality which springs
Code.
majeure employees with legal effect from blood, affection
Existence of Contract between the Parties Within the domain of the Within the domain of
No pre- law morals
There is pre- No pre-existing
existing Performance of moral
existing contract contract
contract When fulfilled produce obligations does not
legal effects produce legal effects
Note: The result in the criminal case, whether acquittal, or
conviction is irrelevant in the independent civil action under the
Civil Code (Dionisio v.Alyendia, 102 Phil 443, cited in Mckee v. IAC,
Q: What are the instances of natural obligations?
211 SCRA 536) unless acquittal is based on the court’s declaration
that the fact from which the civil action arose did not exist, hence
the dismissal of criminal action carries with the extinction of the A:
civil liability (Andamo v. IAC, 191 SCRA 204, ’90 J. Fernan). 1. Performance after the civil obligation has prescribed
(Art. 1424);
NATURAL OBLIGATIONS 2. Reimbursement of a third person for a debt that has
prescribed (Art. 1425);
Q: What are natural obligations? 3. Restitution by minor of the thing or price after
annulment of contract (Art. 1426);
A: Natural obligation, not being based on positive law but 4. Delivery by minor of money or fungible thing in
on equity and natural law, do not grant a right of action to fulfillment of obligation (Art. 1427);
enforce their performance, but after voluntary fulfillment 5. Performance after action to enforce civil obligation has
by the obligor, they authorize the retention of what has failed (Art. 1428,);
been delivered or rendered by reason thereof (Art. 1423 ). 6. Payment by heir of debt exceeding value of property
inherited (Art. 1429); and
Note: They are real obligations to which the law denies an action,
but which the debtor may perform voluntarily.

CIVIL LAW
7. Payment of legacy after will has been declared void. Estoppel is effective only between the parties thereto or
(Art. 1430) their successors in interest (Art. 1439).
Note: The enumeration is not exclusive. The following also Q: What is the basis and purpose of estoppel?
constitute natural obligations:
1. Support given to unrecognized illegitimate children by A: Estoppel is based on public policy, fair dealing, good faith
their putative parents, including support given to
and justice and its purpose is to forbid one to speak against
illegitimate children by the putative parents despite
judgment denying their recognition; his own act, representation or commitments to the injury
2. Interest voluntarily paid for the use of money even if no of one who reasonably relied thereon (Pineda, Obligations
interest is agreed upon in writing may be considered as and Contracts, 2000 ed. p. 644)
a natural obligation (Art. 1956; 1960);
3. Support given to relatives for whom the law made no Q: What are the kinds of estoppel?
provisions for their support; and
4. Indemnification given to a woman seduced, although A:
the seducer was acquitted of the charge of seduction.
1. Estoppel by deed (technical estoppel)
a. Estoppel by deed proper – a party signs a
Q: May natural obligations be converted into civil
document which bars him from denying the
obligations?
truth of any material facts asserted in it. It
applies only between the same parties, their
A: Yes, by way of novation. The natural obligation becomes
privies and cannot be used against strangers
a valid cause for a civil obligation after it has been affirmed
(Pineda, Obligations and Contracts, 2000 ed.
or ratified anew by the debtor (Pineda, Obligations and
p. 655)
Contracts, 2000 ed, p. 634).
b. Estoppel by record – truth set forth in a
record, whether judicial or legislative, cannot
A natural obligation may be subject to a contract of
be denied (Pineda, Obligations and
guaranty so that a creditor may proceed against the
Contracts, 2000 ed. p. 655)
guarantor although he has no right of action against the
c. Estoppel by court record - the parties are
principal debtor. But when the debtor himself offers a
precluded from:
guaranty for his natural obligation, he impliedly recognizes
i. raising questions involving matters which
his liability, thereby transforming the obligation from
were directly adjudged because of the
natural into a civil one (De Leon, Comments and Cases on
principle of res judicata - Estoppel by
Credit Transactions, 2010 ed, p. 240.).
judgment or direct estoppel by judgment
ii. from raising questions involving matters
Note: Compliance with a natural obligation is discretionary. If a
person chose to fulfil, he cannot recover what he had delivered in that have not been adjudged but could
compliance therewith. Fulfillment places the debtor into estoppels have been placed in issue and decide in
from recovering what had been paid or delivered (Pineda, the previous case because of their relation
Obligations and Contracts, 2009 ed., pg. 696) to the issues therein - Collateral estoppel
by judgment (Pineda, Obligations and
Q: What is the effect of partial performance? Contracts, 2000 ed. p. 654)
2. Estoppel in pais (equitable estoppel)
A: If only a part of the natural obligation has been fulfilled, a. by conduct or by acceptance of benefits
this partial payment cannot be recovered. It is converted b. by representation or concealment
into civil obligation if it is legally susceptible of confirmation c. by silence
or ratification. d. by omission
e. by laches
However, if the fulfilled portion is not susceptible of
confirmation or ratification, this portion can be the basis of LACHES
a cause of action for recovery of what has been delivered
because it has not been converted into legal obligation. Q: What is laches?
(Pineda, Obligations and Contracts, 2000 ed, p. 634-635)
A: It is the failure or neglect, for an unreasonable length of
ESTOPPEL time, to do that which by exercising due diligence could or
should have been done earlier; its negligence or omission
Q: What is estoppel? to assert a right within a reasonable time, warranting a
presumption that the party entitled to assert it either has
A: It is an admission or representation rendered conclusive abandoned it or declined to assert it. It is also known as
upon the person making it, and cannot be denied or stale demands (Lim Tay vs. Court of Appeals, 293 SCRA 634;
disproved as against the person relying thereon (Art. 1431) Pineda, Obligations and Contracts, 2000 ed. p. 609).
Note: The admission or representation must be plain and clear.

Estoppel cannot be sustained on doubtful or ambiguous
inferences.

2013 GOLDEN NOTES
OBLIGATIONS
Q: What is the basis of the doctrine of laches or stale Q: What are the obligations of the debtor in an obligation
demands? to deliver a thing?
A: It is based upon grounds of public policy which requires A: It depends upon the kind of obligation
for the peace of society, discouragement of state claims.
SPECIFIC GENERIC
Q: What are the elements of laches?
Deliver the thing which is
neither of superior nor
A:
Deliver the thing agreed inferior quality if quality and
1. Conduct on the part of the defendant or one under
upon (Art. 1165) circumstances have not been
whom he claims, giving rise to the situation
stated by the partiies (Art.
complained of;
1246)
2. Delay asserting complainant’s right after he had
knowledge of the defendant’s conduct and after he Take care of the thing with
has opportunity to exercise it; the proper diligence of a If the object is generic, but
3. Lack of knowledge or notice on the part of the good father of a family the source is specified or
defendant that the complainant would assert the right unless the law requires or delimited, the obligation is
on which he bases his suit; parties stipulate another to preserve the source
4. Injury or prejudice to the defendant in the event relief standard of care (Art.1163)
is accorded to the complainant (Pineda, Obligations Delivery of another thing
and Contracts, 2000 ed. p. 610). Deliver all accessions,
within the same genus as the
accessories and fruits of the
thing promised if such thing
Q: Distinguish laches from prescription thing even though they may
is damaged due to lack of
not have been mentioned
care or a general breach is
A: (Art. 1166)
committed
LACHES PRESCRIPTION Pay damages in case of
Concerned with the Concerned with the Pay damages in case of
breach of obligation by
effect of delay fact of delay breach of obligation by
reason of delay, fraud,
Principally a question reason of delay, fraud,
negligence, contravention of
of inequity of negligence, contravention of
It is a matter of time the tenor thereof (Art.
permitting a claimed to the tenor thereof (Art. 1170)
1170,)
be enforced
Obligation is not
Not statutory Statutory
Fortuitous event extinguished (genus nun
Applies in equity Applies at law
extinguishes the obligation quam peruit – genus never
Based on fixed of time
perishes)
Not based on fixed of (Pineda, Obligations
time and Contracts, 2000
ed. p. 609-610) Q: In failing to deliver a thing, what are the remedies of
the creditor?
Note: The doctrine of laches is inapplicable when the claim was
filed within the prescriptive period set forth under the law (Pineda, A:
Obligations and Contracts, 2000 ed. p. 610). SPECIFIC OBLIGATION GENERIC OBLIGATION
Specific performance
NATURE AND EFFECTS OF OBLIGATIONS (delivery of any thing
Specific performance
belonging to the same
Q: What are the types of real obligation? species)
A: Ask that the obligation be
Rescission (action to rescind
a. Determinate/specific – particularly designated or complied with at the
under Art. 1380,)
physically segregated from all others of the same class. debtor’s expense
b. Indeterminate/Generic– is designated merely by its Resolution or specific
Resolution (action for
class or genus. performance, with damages
cancellation under Art. 1191)
c. Limited generic– generic objects confined to a in either case (Art. 1191)
particular class (e.g. an obligation to deliver one of my
Damages, in both cases (Art. 1170)
horses) (Tolentino, Civil Code of the Philippines, Vol. IV,
2002 ed, p. 91) Note: May be exclusive or in addition to the above-mentioned
remedies(Pineda, Obligations and Contracts, 2000 ed, p. 37)
Note: In an obligation to deliver a specific thing, the creditor has

the right to demand preservation of the thing, its accessions,
accessories, and the fruits. The creditor is entitled to the fruits and
interests from the time the obligation to deliver the thing arise.

CIVIL LAW
Q: When is the debtor obliged to deliver the thing and the
fruits? Q: What are the types of personal obligations?
A: A:
1. When obligation is based on law, quasi-delict, quasi- 1. Positive - to do
contract or crime, the specific provisions of the 2. Negative - not to do
applicable law, shall determine when the delivery shall
be done or effected Q: What are the remedies in personal obligations?
2. When the obligation is subject to a suspensive
condition, the obligation to deliver arises from the A:
happening of the condition 1. Positive personal obligations
3. When the obligation is subject to a suspensive term or a. not purely personal act- to have obligation
period, the obligation arises from the constitution, executed at debtor's expense plus damages
creation or perfection of the obligation b. purely personal act- damages only.
4. When there is no condition or term (period), the
obligation to deliver arises from the constitution, Note: Same rule applies if obligation is done in contravention
creation or perfection of the obligation (Pineda, of the terms of the obligation. Furthermore, it may be
Obligations and Contracts, 2000 ed, p. 31). decreed that what has been poorly done be undone (Art.
1167).
Q: What is the nature of the right of the creditor with
2. Negative personal obligation – to have the prohibited
respect to the fruits?
thing undone at the expense of the debtor plus
damages. However, if thing cannot be physically or
A:
legally undone, only damages may be demanded (8
1. Before delivery – personal right
Manresa 58).
2. After delivery – real right
Note: The creditor has a right to the fruits of the thing from the Q: Is specific performance a remedy in personal
time the obligation to deliver it arises. However, he shall acquire no obligations?
real right over it until the same has been delivered to him (Art.
1164). A: No. Otherwise this may amount to involuntary servitude
which is prohibited by the Constitution (Pineda, Obligations
Q: Distinguish personal right from real right and Contracts, 2000 ed., p. 41).
A: Q: When may a thing be ordered undone?

PERSONAL REAL
A:
Jus ad rem Jus in re
1. If made poorly
Enforceable only against a 2. Negative personal obligations provided that the
Enforceable against the
definite person/group of undoing is possible
whole world
persons
Right to demand from Right over a specific thing, BREACHES OF OBLIGATIONS
another, as a definite passive without a definite passive
subject, the fulfillment of the subject against whom the Q: What is the degree of diligence required?
prestation to give, to do or right may be personally
not to do. enforced. A:
1. That agreed upon;
No definite passive subject
2. In the absence of such, that which is required by the
(Pineda, Obligations and
Has a definite passive subject law;
Contracts, 2000 ed., p. 34-
3. In the absence of the foregoing, diligence of a good
35)
father of a family – that reasonable diligence which an
ordinary prudent person would have done under the
Q: What is the principle of “balancing of equities” as same circumstances.
applied in actions for specific performance? XPN: Common carriers requiring extraordinary
diligence (Arts. 1998-2002)
A: In decreeing specific performance, equity requires not
only that the contract be just and equitable in its Q: What is the concept of a good father of the family?
provisions, but that the consequences of specific
performance likewise be just and equitable. The general A: The Supreme Court described a good father as not and is
rule is that this equitable relief will not be granted if, under not supposed to be omniscient of the future; rather, he is
the circumstances of the case, the result of the specific one who takes precautions against any harm when there is
performance of the contract would be harsh, inequitable, something before him to suggest or warn him of the danger
and oppressive or result in an unconscionable advantage to or to foresee it (Picart v. Smith, G.R. No. L-12406, Mar. 15,
the plaintiff (Agcaoili v. GSIS, G.R. No. 30056, Aug. 30, 1918).
1988).

2013 GOLDEN NOTES
OBLIGATIONS
Q: What are the kinds of delay?
Q: What are the forms of breach of obligations?
A:
A: 1. Ordinary delay – this is the mere failure to perform an
1. Voluntary –debtor is liable for damages if he is guilty obligation at the appointed time.
of: 2. Extraordinary delay or legal delay – this is the delay
a. default (mora) which is tantamount to non-fulfillment of the
b. fraud (dolo) obligation and arises after the extrajudicial or judicial
c. negligence (culpa) demand has been made upon the debtor (Pineda,
d. breach through contravention of the Obligations and Contracts, 2000 ed, p. 31).
tenor thereof (Art. 1170)
2. Involuntary – debtor is unable to perform the Q: What are the requisites of delay?
obligation due to fortuitous event thus not liable for
damages. A:
1. Obligation must be due, demandable and liquidated;
Q: What are the effects of breach of obligation? 2. Debtor fails to perform his positive obligation on the
date agreed upon;
A: If a person obliged to do something fails to do it, or if he 3. A judicial or extra-judicial demand made by the
does it in contravention of the tenor of the obligation or creditor upon the debtor to fulfill, perform or comply
what has been poorly done be undone, the same shall be with his obligation; and
executed at his cost (Art. 1167). 4. Failure of the debtor to comply with such demand.
When the obligation consists in not doing, and the obligor Note: In reciprocal obligations, the moment one party is ready to
does what has been forbidden him, it shall also be undone comply with his obligation, delay by the other begins. There is no
at his expense. (Art.1168) need for demand from either party.
Q: What are the instances where the remedy under Art. Q: What are the kinds of delay or default?
1168 is not available?
A:
A: 1. Mora solvendi – default on the part of the
1. Where the effects of the act which is forbidden are debtor/obligor
definite in character – even if it is possible for the a. Ex re – default in real obligations (to give)
creditor to ask that the act be undone at the expense b. Ex personae – default in personal obligations (to
of the debtor, consequences contrary to the object of do)
the obligation will have been produced which are 2. Mora accipiendi – default on the part of the
permanent in character. creditor/obligee
2. Where it would be physically or legally impossible to 3. Compensatio morae – default on the part of both the
undo what has been undone – because of: debtor and creditor in reciprocal obligations
a. the very nature of the act itself;
b. a provision of law; or MORA SOLVENDI
c. conflicting rights of third persons.
Q: What are the requisites of mora solvendi?
Note: In either case, the remedy is to seek recovery for damages.
(Art.1168) A:
1. Obligation pertains to the debtor;
DELAY (MORA) 2. Obligation is determinate, due and demandable, and
liquidated;
Q: When does delay or default arise? 3. Obligation has not been performed on its maturity
date;
A: Those obliged to deliver or to do something incur in 4. There is judicial or extrajudicial demand by the
delay from the time the obligee (creditor) judicially or creditor;
extrajudicially demands from them the fulfillment of their 5. Failure of the debtor to comply with such demand.
obligation.
Q: Does mora solvendi apply in natural obligations?
In reciprocal obligations, neither party incurs in delay if the
other does not comply or is not ready to comply in a proper A: No, because performance is optional or voluntary on the
manner with what is incumbent upon him. From the debtor’s part. It does not grant a right of action to enforce
moment one of the parties fulfills his obligations, delay by their performance.
the other begins (Art. 1169).
Q: Does mora solvendi apply in negative obligations?
A: No, because one can never be late in not giving or doing

something.

CIVIL LAW
Q: What are the effects of mora solvendi?
2. Reciprocal obligations
A: GR: Fulfillment by both parties should be
1. Debtor may be liable for damages or interests; and simultaneous.
Note: The interest shall commence from the filing of the XPN: When different dates for the performance
complaint when there is no extrajudicial demand. of obligation is fixed by the parties.
2. When it has for its object a determinate thing, debtor Q: What are reciprocal obligations?
may bear the risk of loss of the thing even if the loss is
due to fortuitous event. A: These are obligations created and established at the
3. Rescission or resolution same time, out of the same cause and which results in the
mutual relationship between the parties.
Q: May the debtor’s liability be mitigated even if he is
guilty of delay? Q: When does a party incur in delay in reciprocal
obligations?
A: Yes. If the debtor can prove that loss would nevertheless
transpire even if he had not been in default, the court may
A: In reciprocal obligations, one party incurs in delay from
equitably mitigate his liability (Art. 2215 (4); Pineda,
the moment the other party fulfills his obligation, while he
Obligations and Contracts, 2000 ed., p. 47)
himself does not comply or is not ready to comply in a
proper manner with what is incumbent upon him.
MORA ACCIPIENDI
Q: In reciprocal obligations, when is demand necessary in
Q: What are the requisites of mora accipiendi?
order for a party to incur in delay?
A:
A: Only when the respective obligations are to be
1. Offer of performance by a capacitated debtor;
performed on separate dates.
2. Offer must be to comply with the prestation as it
should be performed; and
Q: What is the effect of non-compliance of both parties in
3. Refusal of the creditor without just cause.
reciprocal obligations?
Q: What are the effects of mora accipiendi?
A: If neither party complies with his prestation, default of
one compensates for the default of the other.
A:
1. Responsibility of debtor is limited to fraud and gross
Q: What may cause the cessation of the effects of mora?
negligence
2. Debtor is exempted from risk of loss of thing; creditor
A:
bears risk of loss
1. Renunciation (express/implied); or
3. Expenses by debtor for preservation of thing after
2. Prescription.
delay is chargeable to creditor
4. If the obligation bears interest, debtor does not have
FRAUD
to pay from time of delay
5. Creditor liable for damages
Q: What is fraud?
6. Debtor may relieve himself of obligation by consigning
the thing
A: It is an intentional evasion of the faithful performance of
the obligation (8 Manresa 72). It is also known as deceit or
COMPENSATIO MORAE
dolo.
Q: What are the rules on default?
Q: What are the kinds of fraud?
A:
A:
1. Unilateral obligations
1) Fraud in obtaining consent or that employed by a
GR: Default or delay begins from extrajudicial or
person to induce another to enter into a contract,
judicial demand – mere expiration of the period fixed
without which the latter would not have agreed
is not enough in order that DR may incur delay.
to (Art. 1338, Civil Code).
XPNs:
2) Fraund in performance of the obligation or the
a. The obligation or the law expressly so
intentional evasion of the normal fulfilment of the
dictates;
obligation.
b. Time is of the essence;
c. Demand would be useless, as debtor has
rendered it beyond his power to perform; or
d. Debtor has acknowledged that he is in
default.

2013 GOLDEN NOTES
OBLIGATIONS
Q: What type of fraud is present in Art. 1171? Q: What is the effect if the obligor is in good faith or in
bad faith?
A: It is incidental fraud or fraud in the performance of the
obligation and not the fraud in the execution of the A: If the obligor acted in good faith, he is responsible for
contract or causal fraud. It is the intentional evasion of the the natural and probable consequences of the breach of
normal fulfilment of the obligation. (Pineda, Obligations contract and which the parties have reasonably foreseen at
and Contracts, 2000 ed, p. 53) the time of the constitution of the obligation.
Note: Responsibility arising from fraud is demandable in all If the obligor is guilty of fraud, bad faith, malice or wanton
obligations. Any waiver of an action for future fraud is void. (Art. attitude, he shall be responsible for all damages which may
1171) be reasonably attributed to the non-performance of the
obligation.
Q: May an action arising from fraud be waived?
Q: What are the effects of contributory negligence of the
A: With respect to fraud that has already been committed, creditor?
the law does not prohibit renunciation of the action for
damages based on the same. However, the law does A: GR: It reduces or mitigates the damages which he can
prohibit any waiver of an action for future fraud since the recover.
same is contrary to law and public policy. Waiver for future
fraud is void (Art. 1171). XPN: If the negligent act or omission of the creditor is
the proximate cause of the event which led to the
Note: Waiver of past fraud is valid since such can be deemed an act
of generosity. What is renounced is the effect of fraud, particularly damage or injury complained of, he cannot recover
the right to indemnity.
Q: What are the remedies of the defrauded party? Q: What are the kinds of negligence or culpa?
A: A:
1. Specific performance (Art. 1233) 1. Culpa contractual (contractual negligence) – which
2. Resolution of the contract (Art. 1191) result from breach of contract
3. Damages, in either case 2. Culpa aquiliana (civil negligence or tort or quasi-delict)
– this acts or omissions that cause damage to another,
NEGLIGENCE there being no contractual relation between the
parties. (Art. 2176)
Q: Distinguish fraud from negligence 3. Culpa criminal (criminal negligence) – which results in
the commission of a crime or a delict.
A:
FRAUD NEGLIGENCE
There is no deliberate
There is deliberate intention intention to cause damage
to cause damage or injury even if the act was
done voluntarily
Liability cannot be mitigated Liability may be mitigated
GR: Waiver for future
negligence may be allowed
in certain cases
Waiver for future fraud is XPN:Nature of the

void obligation or public policy
requires extraordinary
diligence (e.g. common
carrier)
Note: When negligence is so gross that it amounts to wanton

attitude on the part of the debtor, the laws in case of fraud shall
apply.
Where negligence shows bad faith (i.e., deliberately committed) it

is considered equivalent to fraud. Any waiver of an action for
future negligence of this kind is therefore void.

CIVIL LAW
Q: Distinguish culpa contractual from culpa aquiliana and culpa criminal
A:
CULPA CONTRACTUAL CULPA AQUILIANA CULPA CRIMINAL
(CONTRACT) (QUASI-DELICT) (DELICT)
Existence of Negligence
Negligence is merely an incident in Negligence is substantive and Negligence is substantive and
the performance of an obligation independent independent
Contractual Relations
There is always a pre-existing There is no pre-existing There is no pre-existing
contractual relation contractual relation contractual relation
Source of Obligation
The source of obligation of
defendant to pay damages is the The source of obligation is The source of obligation is an act
breach or non-fulfillment of the defendant’s negligence itself or omission punishable by law
contract
Proof of Negligence
Proof of the existence of the
Accused shall be presumed
contract and of its breach or non- The negligence of the defendant
innocent until the contrary is
fulfillment is sufficient prima facie must be proved
proved beyond reasonable doubt
to warrant recovery
Defense Available
Defense of “good father of a
Defense of “good father of a
family” in the selection &
family”in the selection & s
supervision of the employees is
upervision of the employees is not
not a proper complete defense Defense of “good father of a
a proper defense
though it may mitigate damages. family”in the selection &
supervision of the employees is a
The employee’s guilt is
Respondeat superior or command proper and complete defense
automatically the employer’s civil
responsibility or the master and
guilt, if the former is insolvent
servant rule
Proof needed
Proof of guilt beyond reasonable
Preponderance of evidence Preponderance of evidence
doubt

2013 GOLDEN NOTES
OBLIGATIONS
CONTRAVENTION OF TENOR OF OBLIGATION (VIOLATIO) 4. The debtor is guilty of dolo, malice or bad faith,
has Promised the same thing to two or more
Q: What is violation of the terms of the contract? persons who does not have the same interest
(Art. 1165)
A: It is the act of contravening the tenor or terms or 5. The debtor Contributed to the loss (Tan v.
conditions of the contract. It is also known as “violatio,” i.e. Inchausti & Co., G.R. No. L-6472, Mar. 7, 1912)
failure of common carrier to take its passenger to their 6. The possessor is in Bad faith (Art. 552)
destination. (Pineda, Obligations and Contracts, 2000 ed, p. 7. The obligor is Guilty of fraud, negligence or delay
50) or if he contravened the tenor of the obligation
(Juan Nakpil v. United Construction Co., Inc. v. CA,
Note: Under Art. 1170, the phrase “in any manner contravene the G.R. No. L-47851, Apr. 15, 1988)
tenor” of the obligation includes any illicit act which impairs the
strict and faithful fulfillment of the obligation, or every kind of Q: Philcomsat contends that expiration of the RP-US
defective performance. Such violation of the terms of contract is
Military Bases Agreement and non-ratification of the
excused in proper cases by fortuitous events.
treaty is not a fortuitous event. Decide.
FORTUITOUS EVENT
A: No. The requisites for fortuitous events are present in
the instant case. Philcomsat and Globe had no control over
Q: What is fortuitous event?
the non-renewal of the term of the RP-US Military Bases
Agreement when the same expired in 1991, because the
A: It is an occurrence or happening which could not be
prerogative to ratify the treaty belonged to the Senate.
foreseen, or even if foreseen, is inevitable (Art. 1174).
Neither did the parties have control over the subsequent
withdrawal of the US military forces and personnel from
Q: What are the requisites of a fortuitous event?
Cubi Point. The events made impossible the continuation of
the agreement without fault on the part of either party.
A:
Such fortuitous events rendered Globe exempt from
1. Cause of breach is independent of the will of the
payment of rentals for the remainder of the term of the
debtor;
agreement. (Philippine Communications Satellite
2. The event is unforeseeable or unavoidable;
Corp.v.Globe Telecom, Inc.,G.R. No. 147324, May 25, 2004)
3. Occurrence renders it absolutely impossible for the
debtor to fulfill his obligation in a normal manner -
Q: Distinguish Act of God from Act of Man
impossibility must be absolute not partial, otherwise
not force majeure; and
A:
4. Debtor is free from any participation in the
aggravation of the injury to the creditor. ACT OF GOD ACT OF MAN
Fortuitous event Force majeure
Note: The fortuitous event must not only be the proximate Event caused by the
Event which is absolutely
cause but it must also be the only and sole cause. legitimate or illegitimate
independent of human
Contributory negligence of the debtor renders him liable acts of persons other than
intervention
despite the fortuitous event (Pineda, Obligations and the obligor
Contracts, 2000 ed, p. 62). i.e. – armed invasion,
i.e. – earthquakes, storms, robbery, war (Pineda,
If the negligence was the proximate cause, the obligation is floods, epidemics Obligations and Contract,
not extinguished. It is converted into a monetary obligation 2000 ed, p. 60)
for damages
Note: There is no essential difference between fortuitous event
and force majuere; they both refer to causes independent of the
Q: If the happening of an event is difficult to foresee, is it a
will of the obligor (Tolentino, Civil Code of the Philippines, Vol. IV,
fortuitous event? 2002 ed, p. 127).
A: No. The mere difficulty to foresee the happening is not Q: MIAA entered into a compromise agreement with ALA.
impossibility to foresee the same (Republic v. Luzon MIAA failed to pay within the period stipulated. Thus, ALA
Stevedoring Corp., G.R. No. L-21749, Sept. 29, 1967). filed a motion for execution to enforce its claim. MIAA
filed a comment and attributed the delays to its being a
Q: Is there liability for loss due to fortuitous event? government agency and the Christmas rush. Is the delay of
payment a fortuitous event?
A: GR: There is no liability for loss in case of fortuitous
event. A: No. The act-of-God doctrine requires all human agencies
to be excluded from creating the cause of the mischief.
XPNs: LaNS-PCBaG Such doctrine cannot be invoked to protect a person who
1. Law has failed to take steps to forestall the possible adverse
2. Nature of the obligation requires the assumption consequences of loss or injury. Since the delay in payment
of risk in the present case was partly a result of human
3. Stipulation participation - whether from active intervention or neglect -

CIVIL LAW
the whole occurrence was humanized and was therefore
th
outside the ambit of a caso fortuito. the 17 month, work was only 45% completed. AB Corp.
asked for extension of time, claiming that its labor
First, processing claims against the government are problems is a case of fortuitous event, but this was denied
certainly not only foreseeable and expectable, but also by XY Corp. When it became certain that the construction
dependent upon the human will. Second, the Christmas could not be finished on time, XY Corp. sent written notice
season is not a caso fortuito, but a regularly occurring cancelling the contract and requiring AB Corp. to
event. Third, the occurrence of the Christmas season did immediately vacate the premises. Can the labor unrest be
not at all render impossible the normal fulfillment of the considered a fortuitous event? (2008 Bar Question)
obligation.
A: No. Labor unrest is not a fortuitous event that will
Fourth, MIAA cannot argue that it is free from any excuse AB Corp. from complying with its obligation of
participation in the delay. It should have laid out on the constructing the research and laboratory facilities of XY
compromise table the problems that would be caused by a Corp. The labor unrest, which may even be attributed in
deadline falling during the Christmas season. Furthermore, large part to AB Corp. itself, is not the direct cause of non-
it should have explained to ALA the process involved for the compliance by AB Corp. It is independent of its obligation. It
payment of ALA’s claim (MIAA v. Ala Industries Corp., G.R. is similar to the failure of a DBP borrower to pay her loan
No. 147349, Feb. 13, 2004). just because her plantation suffered losses due to the
cadang-cadang disease. It does not excuse compliance with
Q: What are the effects of fortuitous event? the obligation (DBP v. Vda. De Moll). AB Corp. could have
anticipated the labor unrest which was caused by delays in
A: paying the laborer’s wages. The company could have hired
1. On determinate obligation – the obligation is additional laborers to make up for the work slowdown.
extinguished
2. On generic obligation – the obligation is not Q: Can XY Corp. unilaterally and immediately cancel the
extinguished (genus nun quam peruit – genus contract? (2008 Bar Question)
never perishes)
A: Yes, XY Corp. may unilaterally cancel the obligation but
Q: Kristina brought her diamond ring to a jewelry shop for this is subject to the risk that the cancellation of the
cleaning. The jewelry shop undertook to return the ring by reciprocal obligation being challenged in court and if AB
February 1, 1999. When the said date arrived, the jewelry Corp. succeeds, then XY Corp. will be declared in default
shop informed Kristina that the job was not yet finished. and be liable for damages.
They asked her to return five days later. On February 6,
1999, Kristina went to the shop to claim the ring, but she Q: Must AB Corp. return the 50% down payment? (2008
was informed that the same was stolen by a thief who Bar Question)
entered the shop the night before. Kristina filed an action
for damages against the jewelry shop which put up the A: No, under the principle of quantum meruit, AB Corp. had
defense of force majeure. Will the action prosper or not? the right to retain payment corresponding to his
(2000 Bar Question) percentage of accomplishment less the amount of damages
suffered by XY Corp. because of the delay or default.
A: Yes. The action will prosper. Since the defendant was
already in default for not having delivered the ring when REMEDIES
delivery was demanded by plaintiff at due date, the
defendant is liable for the loss of the thing and even when Q: What are the remedies that may be availed of in case of
the loss was due to force majeure. breach of obligation?
The defendant who is obliged to deliver incurred delay from A:

the time the plaintiff extrajudicially demands the fulfillment 1. Specific performance, or substituted performance by a
of the obligation (Art. 1169). The defendant shall be held third person in case of an obligation to deliver a
liable for the loss of the thing even it was due to fortuitous generic thing, and in obligations to do, unless it is a
event. purely personal act; or
2. Rescission (or resolution in reciprocal obligations);
Q: AB Corp. entered into a contract with XY Corp. whereby 3. Damages, in any case;
the former agreed to construct the research and 4. Subsidiary remedies of creditors:
laboratory facilities of the latter. Under the terms of the a. Accion subrogatoria
contract, AB Corp. agreed to complete the facility in 18 b. Accion pauliana
months, at the total contract price of P10 million. XY Corp. c. Accion directa
paid 50% of the total contract price, the balance to be paid
upon completion of the work. The work started
immediately, but AB Corp. later experienced work
slippage because of labor unrest in his company. AB
Corp.’s employees claimed that they are not being paid on
time; hence, the work slowed down. As of

2013 GOLDEN NOTES
OBLIGATIONS
SPECIFIC PERFORMANCE he had conveyed the subject properties to his children.
Thus, Philam filed an accion pauliana for rescission of the
Q: What are the remedies in connection with specific donations. Felix countered that an action for rescission of
performance? the donation had already prescribed since the time of
prescription has to run from the date of registration. Has
A: the action filed by Philam prescribed?
1. Exhaustion of the properties of the debtor (not
exempt from attachment under the law) A: No. Philam only learned about the unlawful conveyances
2. Accion subrogatoria (subrogatory action) – an indirect made by Felix more than four years after the donations
action brought in the name of the debtor by the were effected, when its counsel accompanied the sheriff to
creditor to enforce the former’s rights except: Butuan City to attach the properties. There they found that
a. personal rights of the debtor he no longer had any properties in his name. It was only
b. rights inherent in the person of the debtor then that Philam's action for rescission of the deeds of
c. properties exempt from execution (e.g donation accrued because then it could be said that Philam
.family home) had exhausted all legal means to satisfy the trial court's
3. Accion pauliana (rescissory action) – an action to judgment in its favor. Since Philam filed its complaint for
impugn or assail the acts done or contracts entered accion pauliana against petitioners barely a month from its
into by the debtor in fraud of his creditor. discovery that Felix had no other property to satisfy the
judgment award against him, its action for rescission of the
Note: Resort to the remedies must be in the order stated above. subject deeds clearly had not yet prescribed. (Khe Hong
(Art. 1177) Cheng v. CA,G.R. No. 144169, Mar. 28, 2000)
Q: Sacramento Steel Corporation (SSC) is a business entity Note: The debtor is liable with all his property, present and future,
manufacturing and producing steel and steel products. It for the fulfillment of his obligations, subject to the exemptions
entered into a credit agreement with respondent provided by law (De Leon, Obligations and Contracts, 2003 ed,
International Exchange Bank (IEB). As security for its p.71).
obligations, SSC executed 5 separate deeds of chattel
mortgage constituted over various equipment found in its Q: What is substitute performance?
steel manufacturing plant.
A: It is a remedy of the creditor in case of non-performance
Subsequently, SSC defaulted in the payment of its by the debtor where another party performs the obligation
obligations. IEB’s demand for payment went unheeded. or the same is performed at the expense of the debtor.
Meanwhile, Metropolitan Bank and Trust Company
(Metro Bank) filed a motion for intervention as a creditor Q: When may there be substitute performance?
of SSC. It contends that the mortgage contracts between
IEB and SSC were entered into to defraud the latter’s A:
creditors. Thus, it prayed for the rescission of the chattel 1. Positive personal obligation:
mortgaged executed by SSC in favor of IEB. Will the action a. If not purely personal – substitute performance;
to rescind the mortgage prosper? the obligation shall be executed at debtor’s cost if
he fails to do it. (Art. 1167)
A: No. Jurisprudence is clear that the following successive b. Purely personal – no substitute performance may
measures must be taken by a creditor before he may bring be demanded because of the personal
an action for rescission of an allegedly fraudulent contract: qualifications taken into consideration. The only
(1) exhaust the properties of the debtor through levying by remedy is damages.
attachment and execution upon all the property of the 2. Real obligation:
debtor, except such as are exempt by law from execution; a. Generic thing – substitute performance; delivery
(2) exercise all the rights and actions of the debtor, save may be made by a person other than the debtor
those personal to him (accion subrogatoria); and (3) seek since the object is merely designated by its class
rescission of the contracts executed by the debtor in fraud or genus. The creditor may ask that the obligation
of their rights (accion pauliana). It is thus apparent that an be complied with at the expense of the debtor
action to rescind, or an accion pauliana, must be of last (1165).
resort, availed of only after the creditor has exhausted all b. Specific thing – specific performance may be
the properties of the debtor not exempt from execution or demanded, that is, the creditor may compel the
after all other legal remedies have been exhausted and debtor to make the delivery.
have been proven futile (Metropolitan Bank and Trust
Company v. International Exchange Bank, G.R. No. 176008, RESCISSION
August 10, 2011).
Q: What is rescission under Article 1191?
Q: While the case was pending, Felix donated his parcels
of land in favor of his children. Judgment was rendered A: It refers to the cancellation of the contract or reciprocal
against Felix. When the sheriff, accompanied by counsel of obligation in case of breach on the part of one, which
Philam, sought to enforce the alias writ of execution, they breach is violative of the reciprocity between the parties.
discovered that Felix no longer had any property and that This is properly called resolution.

CIVIL LAW
condominium units will never be available. The
Note: The rescission under Art. 1380 is rescission based on lesion impossibility of fulfillment of the obligation on the part of
or fraud upon creditors. Vermen necessitates resolution of the contract, for indeed,
the non-fulfillment of the obligation aforementioned
Q: What kind of obligation is resolution available? constitutes substantial breach of the agreement (Vermen
Realty Development Corp. v. CA and Seneca Hardware Co.,
A: Reciprocal obligation, since resolution is implied therein. Inc., G.R. No. 101762, July 6, 1993)
Q: What are the characteristics of the right to rescind? Q: Ong and spouses Robles executed an "agreement of
purchase and sale" of 2 parcels of land. Pursuant to the
A: contract they executed, Ong partially paid the spouses the
1. Can be demanded only if plaintiff is ready, willing and by depositing it with the bank. Subsequently, Ong
able to comply with his own obligation and defendant deposited sums of money with the BPI in accordance with
is not; their stipulation that Ong pay the loan of the spouse with
2. Not absolute; BPI. To answer for Ong’s balance, he issued 4 post-dated
3. Needs judicial approval in the absence of a stipulation checks which were dishonored. Ong failed to replace the
allowing for extra-judicial rescission, in cases of non- checks and to pay the loan in full. Can the contract
reciprocal obligations; entered into by Ong and the spouses be rescinded?
4. Subject to judicial review if availed of extra-judicially;
5. May be waived expressly or impliedly; and A: No. The agreement of the parties in this case may be set
6. Implied to exist in reciprocal obligations therefore aside, but not because of a breach on the part of Ong for
need not be expressly stipulated upon. failure to complete payment of the purchase price. Rather,
his failure to do so brought about a situation which
Q: May an injured party avail of both fulfillment and prevented the obligation of the spouses to convey title
rescission as remedy? from acquiring an obligatory force.
A: GR: The injured party can only choose between The agreement of purchase and sale shows that it is in the
fulfillment and rescission of the obligation, and cannot have nature of a contract to sell. Ong’s failure to complete
both. payment of the purchase price is a non-fulfillment of the
condition of full payment which rendered the contract to
XPN: If fulfillment has become impossible, Article 1191 sell ineffective and without force and effect. The breach
allows the injured party to seek rescission even after contemplated in Article 1191 is the obligor’s failure to
he has chosen fulfillment. (Ayson-Simon v. comply with an obligation. In this case, Ong’s failure to pay
Adamos,G.R. No. L-39378, Aug. 28 1984) is not even a breach but merely an event which prevents
the vendor’s obligation to convey title from acquiring
Q: Vermen and Seneca entered into an "offsetting binding force.
agreement", where Seneca is obliged to deliver
construction materials to Vermen, who is obliged to pay Note: In a contract to sell, the payment of the purchase price is a
Seneca and to deliver possession of 2 condominium units positive suspensive condition, the failure of which is not a breach,
to Seneca upon its completion. Seneca filed a complaint casual or serious, but a situation that prevents the obligation of the
for rescission of the offsetting against Vermen alleging vendor to convey title from acquiring an obligatory force.
that the latter had stopped issuing purchase orders of (Ongv.CA, G.R. No. 97347, July 6, 1999)
construction materials without valid reason, thus resulting
in the stoppage of deliveries of construction materials on DAMAGES
its part, in violation of the Offsetting Agreement. Can the
agreement be rescinded? Q: When does liability for damages arise?
A: Yes, because the provisions of the offsetting agreement A: Those liable under Art. 1170 shall pay damages only if
are reciprocal in nature. Article 1191 of the Civil Code aside from the breach of contract, prejudice or damage was
provides the remedy of rescission (more appropriately, the caused (Berg v. Teus, G.R. No. L-6450, Oct 30, 1954).
term is "resolution") in case of reciprocal obligations, where
Note: If action is brought for specific performance, damages
one of the obligors fails to comply with that is incumbent
sought must be asked in the same action; otherwise the damages
upon him. are deemed waived (Daywalt v. Augusitinian Corp, 39 Phil 567).
The question of whether a breach of contract is substantial Q: What are the kinds of damages?
depends upon the attendant circumstances. Seneca did not
fail to fulfill its obligation in the offsetting agreement. The A: MENTAL
discontinuance of delivery of construction materials to 1. Moral
Vermen stemmed from the failure of Vermen to send 2. Exemplary
purchase orders to Seneca. Vermen would never have been 3. Nominal
able to fulfill its obligation in allowing Seneca to exercise 4. Temperate
the option to transfer from Phase I to Phase II, as the 5. Actual
construction of Phase II has ceased and the subject 6. Liquidated

2013 GOLDEN NOTES
OBLIGATIONS
SUBSIDIARY REMEDIES 2) Art. 1608 – right of sellers a retro to redeem
property from persons other than the buyer a
ACCION SUBROGATORIA retro.
3) Art. 1729 – subsidiary liability of owners to
Q: What is accion subrogatoria? laborers and material men.
4) Art. 1893 – the principal may sue the substitute of
A: It is an action whereby the creditor whose claim had not the agent with respect to the obligations which
been fully satisfied, may go after the debtors (third the substitute has contracted under the
persons) of the defendant-debtor. substitution.
Q: What are the requisites of accion subrogatoria? KINDS OF CIVIL OBLIGATIONS
A: IPNI PURE OBLIGATIONS

1. The debtor’s assets must be Insufficient to satisfy
claims against him; Q: What is pure obligation?
2. The creditor must have Pursued all properties of
the debtor subject to execution; A: It is an obligation whose performance does not depend
3. The right of action must Not be purely personal; upon a future or uncertain event, or upon a past event or
and upon a past event unknown to the parties, demandable at
4. The debtor whose right of action is exercised once (Art. 1179).
must be Indebted to the creditor.
CONDITIONAL OBLIGATIONS
Note: Accion subrogatoria is different and distinct from active
subjective subrogation governed by Articles 1300 to 1304. In the Q: What is conditional obligation?
latter, there is change of creditors whereas in the former there is
no change of creditors; the creditor merely acts in the name and
A: It is an obligation subject to a condition and the
for the account of the debtor after exhausting the assets of the
latter but not enough to satisfy the claims of the creditor. effectivity of which is subordinated to the fulfillment or
non-fulfillment of a future and uncertain event, or upon a
ACCION PAULIANA past event unknown to the parties (Pineda, Obligations and
Contracts, 2000 ed. p. 70).
Q: What is accion pauliana?
Q: What is a condition?
A: It is an action where the creditor files an action in court
for the rescission of acts or contracts entered into by the A: It is an uncertain event which wields an influence on a
debtor designed to defraud the former. legal relationship (Manresa).
Note: When the creditor could not collect in any manner, accion Q: What does a constructive fulfillment of a condition
pauliana may be resorted by him to rescind a fraudulent alienation entail?
of property (Regalado, v. Luchsinger and Co., 5 Phil 625).
A: The condition shall be deemed fulfilled when the obligor
Q: What are the requisites of accion pauliana? voluntarily prevents its fulfillment (Art. 1186)
A: IAP-PL Note: No person shall profit by his own wrong. Mere intention to
1. Defendant must be Indebted to plaintiff; prevent the happening of thee condition will not be enough
2. The fraudulent act performed by the debtor without actually preventing the fulfillment.
subsequent to the contract gives Advantage to
The doctrine applies only to suspensive condition. (Taylor v. Uy
another; Tieng Piao, 43 Phil. 873)
3. The creditor is Prejudiced by such act;
4. The creditor must have Pursued all properties of Q: Ramon, the judicial administrator of the estate of Juan,
the debtor subject to execution; and found out that Rodriguez had enlarged the area of the
5. The creditor has no other Legal remedy. land which he purchased from Juan before his death.
Thus, Ramon demanded Rodriguez to vacate the portion
ACCION DIRECTA allegedly encroached by him. Rodriguez refused and
contested there was indeed a conditional sale with the
Q: What is accion directa? balance of the purchase price payable within five years
from the execution of the deed of sale. Ramon then filed
A: It is the right of a person to go directly against another an action for recovery of possession of the disputed lot. Is
who has no privity to the contract. (Arts. 1652, 1608, 1729, the contract of sale a conditional one?
1893)
A: No. The stipulation that the "payment of the full
1) Art. 1652 – subsidiary liability of sublessee for the consideration based on a survey shall be due and payable in
rent. 5 years from the execution of a formal deed of sale" is not a

CIVIL LAW
condition which affects the efficacy of the contract of sale.
It merely provides the manner by which the full 2. Personal obligations- the court determines the
consideration is to be computed and the time within which retroactive effect of the condition fulfilled (Art. 1187)
the same is to be paid. But it does not affect in any manner
the effectivity of the contract (Heirs of San Andres v. Q: What are the rights of the parties before the fulfillment
Rodriguez, G.R. No. 135634, May 31, 2000). of the condition?
Q: Distinguish period from condition. A:

A: 1. Creditor – may bring the appropriate actions for the
PERIOD CONDITION preservation of his right (Art. 1188), such as:
As to Time (a) action for prohibition restraining the alienation of
May refer to past event the thing pending the happening of the
Refers to the future suspensive condition
unknown to the parties
As to Fulfillment (b) petition for the annotation of the creditor’s right
It will happen at an with the proper registry
exact date or at an (c) action to demand security if the debtor has
May or may not happen become insolvent
indefinite time, but is
sure to arrive (d) action to set aside alienations made by the debtor
As to its Influence on the Obligation to be Fulfilled in fraud of creditors
or Performed (e) action against adverse possessors to interrupt the
No effect or influence May give rise to an running of prescriptive period.
upon the existence of obligation (suspensive) 2. Debtor – may recover what during the same time he
the obligation but only or the cessation of one has paid by mistake in case of a suspensive condition
in its demandability or already existing (Art. 1188).
performance (resolutory)
Q: In cases of obligations with a suspensive condition and
Note: Period refers to a future and certain event while condition obligation for the delivery of determinate or specific
refers to a future and uncertain event. things, what are the effects of loss, deterioration, and
improvements in real obligations?
SUSPENSIVE CONDITION
A:
Q: What is a suspensive condition? WITH DR’S FAULT WITHOUT DR’S FAULT
Loss
A: A condition the fulfillment of which will give rise to the DR pays damages Obligation extinguished
acquisition of a right. While the condition has not arrived Deterioration
yet, in the meantime, the rights and obligations of the CR- choose b/w
parties are suspended. rescission of obligation
Impairment borne by
or fulfillment (with
Note: In suspensive condition or condition precedent, the efficacy CR
indemnity for damages
or the obligatory force is subordinated to the happening of a in either case)
“future and uncertain event”; if the suspensive condition does not
Improvement
take place the parties would stand as if the conditional obligation
never existed. (Gaite v. Fonacier, 2 SCRA 830; Cheng v. Genato, 300 1. By the thing’s nature or by time – inure to the
SCRA 722; Pineda, Obligations and Contracts, 2000, ed. p. 76) benefit of the CR
2. At the debtor’s expense – DR shall have no
Q: What are the effects of fulfillment of the suspensive right other than that granted to a
condition? usufructuary
A: Note: Loss, deterioration and improvement cannot apply to

1. Real obligations: indeterminate or generic things. “Genus nun quam peruit” – “genus
never perishes”
GR: Retroacts to the day of the constitution of the
obligation. Loss is understood that the thing is lost when it perishes, or goes
out of commerce, or disappears in such a way that its existence is
XPNs: There is no retroactive effect with respect to the unknown or it cannot be recovered.
fruits and interest:
a. In reciprocal obligations, the fruits and Q: What are the requisites for Art.1189 to apply?
interests shall be deemed to have been
mutually compensated; A:
b. In unilateral obligations, the debtor 1. Must be a real obligation;
appropriates the fruits and interest received 2. Object is a specific/determinate thing;
before the fulfillment of the condition unless 3. Obligation is subject to a suspensive condition;
contrary to the intention of the parties (Art. 4. The condition is fulfilled; and
1187)

2013 GOLDEN NOTES
OBLIGATIONS
5. There is loss, deterioration or improvement of the Q: The late Don Lopez, Sr., who was then a member of the
thing during the pendency of the happening of the Board of Trustees of CPU, executed a deed of donation in
condition. favor of the latter of a parcel of land subject to the
condition that it shall be utilized for the establishment and
Note: The same conditions apply in case of an obligor in obligations use of a medical college. However, the heirs of Don Lopez,
with a resolutory condition. In such cases, the third requisite must Sr., filed an action for annulment of the donation,
read, “subject to a resolutory condition.” reconveyance and damages against CPU alleging that CPU
had not complied with the conditions of the donation.
Q: What is meant by a positive suspensive condition?
Are the conditions imposed resolutory or suspensive?
A: It is a condition which requires a positive act on the part
of the obligor which gives rise to the acquisition of rights. In A: Under Art. 1181 of the Civil Code, on conditional
a contract to sell, the obligation to sell the subject obligations, the acquisition of rights, as well as the
properties becomes demandable only upon the happening extinguishment or loss of those already acquired, shall
of the positive suspensive condition, which is the buyer’s depend upon the happening of the event which constitutes
full payment of the purchase price. Without full payment, the condition. Thus, when a person donates land to another
there can be no breach of contract to speak of because the on the condition that the latter would build upon the land a
seller has no obligation yet to turn over the title (Reyes v. school, the condition imposed was not a condition
Tuparan, G.R. No. 188064, June 1, 2011). precedent or a suspensive condition but a resolutory. It is
not correct to say that the school house had to be
RESOLUTORY CONDITION constructed before the donation became effective, that is,
before the donee could become the owner of the land,
Q: What is a resolutory condition? otherwise, it would be invading the property rights of the
donor. The donation had to be valid before the fulfillment
A: It is a condition where the rights already acquired are of the condition. If there was no fulfillment or compliance
lost upon fulfillment of the condition. It is also known as with the condition, the donation may now be revoked and
condition subsequent. all rights which the donee may have acquired under it shall
be deemed lost and extinguished (Central Philippine
Q: What are the effects of fulfillment of resolutory University v. CA, G.R. No. 112127, July 17, 1995).
condition?
Note: Rights over a donated land subject to a condition are already
A: acquired upon the perfection of the donation subject to
1. Real obligations: extinguishment upon, making it a resolutory condition. If the
a. The parties shall return to each other what donee’s rights are suspended in the meantime, then it will be
they have received. impossible for him to comply with the condition, as he cannot even
b. Obligation is extinguished. enter its possession.
c. In case of the loss, deterioration or
improvement of the thing, Art. 1189, with Q: What is meant by a negative resolutory condition?
respect to the debtor, shall be applied to the
party who is bound to return (Art. 1190). A: It is an act, which if not done, would give rise to a cause
2. Personal obligations – the courts shall determine, in of action against the obligor. It contemplates a situation
each case, the retroactive effect of the condition that where rights are already acquired but subject to an
has been complied with. (Art. 1187; Art. 1190) obligation, the non-fulfillment of which does not affect the
rights already acquired but merely gives a cause of action in
Q: Distinguish suspensive from resolutory conditions favor of the other party. In a contract of sale, the buyer’s
non-payment of the price is a negative resolutory condition.
A: In such case, the seller has lost and cannot recover the
SUSPENSIVE RESOLUTORY ownership of the property unless he takes action to set
CONDITION CONDITION aside the contract of sale (Heirs of Atienza v. Espidol, G.R.
No. 180665, August 11, 2010).
Effect of Fulfillment
Obligation arises or Obligation is
POTESTATIVE CONDITION
becomes effective extinguished
Effect of Non-fulfillment
Q: When is a condition said to be potestative?
If not fulfilled, no
If not fulfilled, juridical
juridical relation is
relation is consolidated A: When the condition depends upon the will of one of the
created
contracting parties (Art. 1182).
When Rights are Acquired
Rights are not yet Q: Does a condition which depends upon the will of the
Rights are already
acquired, but there is debtor invalidate both the condition and the obligation?
acquired, but subject to
hope or expectancy
the threat or danger of
that they will soon be A: It depends. If the condition is suspensive, both the
extinction
acquired condition and obligation are VOID. However, if the

CIVIL LAW
condition is a pre-exisiting one or the condition is
resolutory, only the condition is void, leaving the obligation Note: In the foregoing, the obligations remain valid, only the
itself valid because what is left to the sole will of the debtor condition is void and deemed to have not been imposed. It is
is not the existence or the fulfillment of the obligation but applicable only to obligations not to do and gratuitous
obligations.
merely its extinguishment.
OBLIGATIONS WITH A PERIOD
Q: What is the effect if the condition depends upon the
will of the creditor?
Q: What is an obligation with a period or a term?
A: The condition and obligation are valid, whether the
A: It is the obligations for whose fulfillment a day certain
condition is suspensive or resolutory.
has been fixed, shall be demandable only when that day
comes. (Art. 1193)
CASUAL CONDITION
Q: What are the requisites of a valid period or term?
Q: What is a casual condition?
A: FCP
A: It is the performance or the fulfillment of the condition
1. Future
which depends upon chance and/or the will of a third
2. Certain
person.
3. Possible, legally and physically (Paras, Civil Code
of the Philippines Annotated, Vol. IV., 2008 ed. p.
Q: What is a mixed condition?
235)
A: It is the performance or fulfillment of the condition
Q: What is a term or period?
which depends partly upon the will of a party to the
obligation and partly upon chance and or the will of a third
A: It is a certain length of time which determines the
person.
effectivity or the extinguishment of the obligations.
Q: What is the status of casual and mixed conditions?
Q: What is a “day certain”?
A: Casual and mixed conditions, unlike purely potestative
A: It is understood to be that which must necessarily come,
conditions, are valid.
although it may not be known when.
Q: What are the other types of conditions?
Q: What are the kinds of terms or periods?
A: PN-DI-CAPI
A:
1. Positive – involves the doing of an act
1. Ex die – this is a term or period with suspensive effect.
2. Negative – involves the omission of an act
The obligation begins only from a day certain, in other
3. Divisible – is susceptible of partial performance
words upon the arrival of the period.
4. Indivisible – is not susceptible of partial
2. In diem – a period or term with a resolutory effect. Up
performance
to a certain extent, the obligation remains valid, but
5. Conjunctive – there are several conditions in an
upon the arrival of said period, the obligation
obligation all of which must be performed
terminates.
6. Alternative – there are several conditions in an
3. Legal – a period granted under the provisions of the
obligation but only one must be performed
law.
7. Possible – is capable of fulfillment according to
4. Conventional or voluntary – period agreed upon or
the nature, law, public policy or good customs
stipulated by the parties.
8. Impossible – is not capable of fulfillment
5. Judicial – the period or term fixed by the courts for the
according to nature, law, public policy or good
performance of an obligation or for its termination.
customs (Art. 1183)
6. Definite – the exact date or time is known and given.
7. Indefinite – something that will surely happen but the
Q: What is the effect of an impossible or unlawful
date of happening is unknown.
condition?
Q: Is the statement of a debtor that he will pay when his
A: GR: Impossible conditions annul the obligation which
means permit him to do so relate to a period or a
depends upon the parties but not of a third person.
condition? Is such a statement valid considering that the
same is left to the will of the debtor?
XPNs: PD-DoNT.
1. Pre-existing obligation
A: When the debtor binds himself to pay when his means
2. Obligation is Divisible
permit him to do so, the obligation is deemed with a
3. In simple or remuneratory Donations
period. (Art. 1180) This is valid because it is not the
4. In case of conditions Not to do an impossible
payment itself that is dependent upon the will of the
thing
debtor, but the moment of payment.
5. In Testamentary dispositions

2013 GOLDEN NOTES
OBLIGATIONS
2. When he does not furnish to the creditor the
As the time of payment is not fixed, the court must fix the Guaranties or securities which he has promised;
same before any action for collection may be entertained, 3. When by his own acts he has Impaired said
unless, the prior action of fixing the term or period will only guaranties or securities after their establishment,
be a formality and will serve no purpose but delay (Tiglao v. and when through a fortuitous event they
Manila Railroad Co., 98 Phil. 181). disappear, unless he immediately gives new ones
or equally satisfactory;
Q: For whose benefit is the period constituted? 4. When the debtor Violates any undertaking, in
consideration of which the creditor agreed to the
A: GR: Whenever in an obligation a period is designated, it period;
is presumed to have been established for the benefit of 5. When the debtor attempts to Abscond. (Art.
both the creditor and the debtor 1198)
XPN: When it appears from the tenor of the period or Note: In case of loss, deterioration or improvement of the thing
other circumstances that it was established for the before the arrival of the day certain, rules in conditional obligation
benefit of one of the parties. shall be observed.
Q: What is the effect of the term being for the benefit of Q: What must a creditor ask the court before he can
either the CR or the DR? demand payment?
A: A: If the time of payment is not fixed, the court must fix the
1. When it is for the benefit of the Creditor – Creditor same before any action for collection may be entertained,
may demand the performance of the obligation at any unless, the prior action of fixing the term or period will be a
time but the DR cannot compel him to accept payment formality and will serve no purpose but delay.
before the expiration of the period (e.g. “on demand”)
ALTERNATIVE OBLIGATION /
2. When it is for the benefit of the Debtor – Debtor may FACULTATIVE OBLIGATION
oppose any premature demand on the part of the CR
for performance of the obligation, or if he so desires, Q: What is an alternative obligation?
he may renounce the benefit of the period by
performing his obligation in advance. (Manresa) A: It is one where the debtor is alternatively bound by
different prestations but the complete performance of one
Q: What is the effect of a fortuitous event in an obligation of them is sufficient to extinguish the obligation.
with a period?
Q: What is a facultative obligation?
A: It only relieves the contracting parties from the
fulfillment of their respective obligation during the term or A: It is one where the debtor is bound to perform one
period. prestation or to deliver one thing with a reserved right to
choose another prestation or thing as substitute for the
Q: When may the court fix the period? principal.
A: Q: Distinguish facultative from alternative obligations

1. If the obligation does not fix a period, but from its
nature and circumstances it can be inferred that a A:
period was intended by the parties. FACULTATIVE ALTERNATIVE
2. If the duration of the period depends upon the OBLIGATIONS OBLIGATIONS
will of the debtor. Number of prestation
3. In case of reciprocal obligations, when there is a Only one object is due Several objects are due
just cause for fixing the period. Manner of compliance
4. If the debtor binds himself when his means May be complied with May be complied with
permit him to do so. by substitution of one by fulfilling any of those
that is due alternately due
Note: Once fixed by the courts, the period cannot be changed Right to choice
by the parties. GR: Choice pertain to
debtor
Q: When may a debtor lose his right to make use of the Choice pertains only to
period? debtor XPN: Expressly granted
to creditor or third
A: IGIVA person
1. When after the obligation has been contracted he Effect of fortuitous loss
becomes Insolvent, unless he gives a guaranty or Fortuitous loss Fortuitous loss of all
security for the debt; extinguishes the prestation will extinguish
obligation the obligation

CIVIL LAW
Effect of culpable loss Q: In alternative obligations, when does the choice made
Culpable loss obliges the take effect?
debtor to deliver Culpable loss of
substitute prestation any object due will give A: The choice made takes effect only upon communication
without liability to rise to liability to debtor of the choice to the other party and from such time the
debtor obligation ceases to be alternative (Art. 1201; Art. 1205).
Liability of the debtor
The creditor shall have Note: The notice of selection or choice may be in any form
provided it is sufficient to make the other party know that the
the right of indemnity
Substitution has been election has been made (Tolentino, Civil Code of the Philippines,
for damages when, 2002 ed, p. 205).
made and
through the fault of the
communicated to the
debtor, all the things Q: When will alternative obligation become a simple
creditor, the obligor is
which are alternatively obligation?
liable for the loss of the
the object of the
thing on account of
obligation have been lost A:
delay, negligence or
or the compliance of the 1. When the debtor has communicated the choice to the
fraud
obligation has become creditor.
impossible. 2. When debtor lose the right to choice among the
Void prestation prestations whereby the debtor is alternatively bound,
If principal obligation is If one prestation is void, only one is practicable (Art. 1202).
void, the creditor cannot the others free from 3. When the choice has been expressly given to the
compel delivery of the vices preserve the creditor and his choice has been communicated to the
substitute validity of the obligation debtor.
Impossibility of prestation
If various prestations are Q: Does the choice made by the DR require the
If there is impossibility to
impossible to perform concurrence of the CR? What happens when through the
deliver the principal
except one, this one CR’s fault, selection is deemed impossible?
thing or prestation, the
must be delivered.
obligation is
If all prestations are A: No. To hold otherwise would destroy the very nature of
extinguished, even if the
impossible to perform, the right to select given to the DR. Once a choice is made, it
substitute obligation is
the obligation is can no longer be renounced and the parties are bound
valid
extinguished thereto.
Loss of substitute
Where the choice is When choice is rendered impossible through the CR’s fault,
Loss of substitute before
given to the creditor, the the DR may bring an action to rescind the contract with
the substitution through
loss of the alternative damages (Art. 1203).
the fault of the debtor
through the fault of the
doesn’t make him liable
debtor renders him Q: What are the effects of loss of objects in alternative
liable for damages obligations?
Q: In alternative obligation, who has the right to choose A:

prestation? DUE TO
FORTUITOUS DUE TO DEBTOR’S FAULT
A: GR: The right of choice belongs to the debtor EVENT
Choice Belongs to Debtor
XPN: unless it has been expressly given to the creditor (Art. CR shall have a right to
1200). indemnify for damages
based on the value of the
Q: What are the limitations on debtor’s right to choose? All are DR released from
last thing which
lost the obligation
disappeared/service
A: which become
1. The debtor must absolutely perform the prestation impossible
chosen. He cannot compel the creditor to receive part DR shall deliver that
of one and part of the other undertaking. Some DR shall deliver that
which he shall choose
2. The debtor shall have no right to choose those but not which he shall
from among the
prestation which are impossible, unlawful or which all are choose from among
remainder without
could not have been the object of the obligation (Art. lost the remainder
damages
1200). Only
3. The debtor shall lose the right to choice when among one Deliver that which remains
the prestation whereby he is alternatively bound, only remains
one is practicable (Art. 1202). Choice Belongs to Creditor
All are DR released from CR may claim the

2013 GOLDEN NOTES
OBLIGATIONS
lost the obligation price/value of any of Q: What is the rule as regards the joint or solidary
them with indemnity for character of an obligation?
damages
CR may claim any of A: GR: When two or more creditors or two or more debtors
CR may choose those subsisting OR he concur in one and the same obligation, the presumption is
Some
from among the may choose any of those that the obligation is joint.
but not
remainder or that were lost, but it is the
all are
which remains if price/value of with right XPNs: The obligation shall be solidary when: ELN-CJ
lost 1. Expressly stipulated that there is solidarity;
only one subsists to damages that can be
claimed 2. Law requires solidarity;
Only 3. Nature of the obligation requires solidarity;
Deliver that which remains. In case of fault of 4. Charge or condition is imposed upon heirs or
one
DR, CR has a right to indemnity for damages legatees and the will expressly makes the charge
remains
or condition in solidum (Manresa); or
JOINT AND SOLIDARY OBLIGATIONS
5. Solidary responsibility is imputed by a final
Q: What are joint obligations? Judgment upon several defendants (Gutierrez v.
Gutierrez, 56 Phil 177).
A: It is one where the credit or debt shall be presumed to
be divided into as many equal shares as there are creditors Q: Chua bought and imported to the Philippines dicalcium
or debtors, the credit or debts being considered distinct phosphate. When the cargo arrived at the Port of Manila,
from one another (Art. 1208). it was discovered that some were in apparent bad
condition. Thus, Chua filed with Smith, Bell, and Co., Inc.,
It is where each debtor is liable only for a proportionate the claim agent of First Insurance Co., a formal statement
part of the debt and each creditor is entitled only to a of claim for the loss. No settlement of the claim having
proportionate part of the credit. been made, Chua then filed an action. Is Smith, Bell, and
Co., solidarily liable upon a marine insurance policy with
Q: What are solidary obligations? its disclosed foreign principal?
A: It is where each of the debtors obliges to pay the entire A: No. Article 1207 of the Civil Code clearly provides that
obligation, and where each one of the creditors has the "there is a solidary liability only when the obligation
right to demand from any of the debtors, the payment or expressly so states, or when the law or the nature of the
fulfillment of the entire obligation (Art. 1207; Pineda, obligation requires solidarity." The well-entrenched rule is
Obligations and Contracts, 2000 ed, p. 139). that solidary obligation cannot lightly be inferred. It must
be positively and clearly expressed (Smith, Bell & Co., Inc. v.
Q: Distinguish joint from solidary obligation CA, G.R. No. 110668, Feb. 6, 1997).
A: Q: The labor arbiter rendered a decision, the fallo of which

JOINT OBLIGATION SOLIDARY OBLIGATION states the following respondents as liable, namely: FCMC,
Not presumed. Must be Sicat, Gonzales, Chiu Chin Gin, Lo Kuan Chin, and
expressly stipulated by INIMACO. INIMACO questions the execution, alleging that
Presumed by law the parties, or when the alias writ of execution altered and changed the tenor
(Art. 1208) the law or the nature of of the decision by changing their liability from joint to
the obligation requires solidary, by the insertion of the words "AND/OR". Is the
solidarity. (Art. 1207) liability of INIMACO pursuant to the decision of the labor
Each debtor is liable arbiter solidary or not?
Each debtor is obliged
only for a
to pay the entire A: INIMACO's liability is not solidary but merely joint. Well-
proportionate part of
obligation entrenched is the rule that solidary obligation cannot lightly
the entire debt
Each creditor has the be inferred. There is a solidary liability only when the
right to demand from obligation expressly so states, when the law so provides or
Each creditor, if there any of the debtors, the when the nature of the obligation so requires. In the
are several, is entitled payment or fulfillment dispositive portion of the labor arbiter, the word "solidary"
only to a proportionate of the entire obligation does not appear. The said fallo expressly states the
part of the credit (Tolentino, Civil following respondents therein as liable, namely: Filipinas
CodeVol IV, 1999 ed. p. Carbon Mining Corporation, Sicat, Gonzales, Chiu Chin Gin,
217) Lo Kuan Chin, and INIMACO. Nor can it be inferred
therefrom that the liability of the six respondents in the
case below is solidary, thus their liability should merely be
joint (INIMACO v. NLRC, G.R. No. 101723, May 11, 2000).

CIVIL LAW
Q: What are the legal consequences if the obligation is Q: What are the rules in a solidary obligation?
joint?
A:
A: 1. Anyone of the solidary creditors may collect or
1. Each debtor is liable only for a proportionate part of demand payment of the whole obligation; there is
the entire debt mutual agency among solidary debtors (Arts. 1214,
2. Each creditor, if there are several, is entitled only to a 1215)
proportionate part of the credit
3. The demand made by one creditor upon one debtor, 2. Any of the solidary debtor may be required to pay the
produces effects of default only as between them whole obligation; there is mutual guaranty among
4. Interruption of prescription caused by the demand solidary debtors (Arts. 1216, 1217, 1222)
made by one creditor upon one debtor, will NOT
benefit the co-creditors or the co-debtors 3. Each one of solidary creditors may do whatever maybe
5. Insolvency of a debtor will not increase the liability of useful to the others, but not anything prejudicial to
his co-debtor them (Art. 1212); however, any novation,
6. Vices of each obligation emanating from a particular compensation, confusion or remission of debt made
debtor or creditor will not affect the others by any solidary creditors or with any of the solidary
7. In indivisible or joint obligation, the defense of res debtors shall extinguish the obligation without
judicata of one does not extend to the others. prejudice to his liability for the shares of other solidary
creditors (Art. 1215; Art.1219).
JOINT INDIVISIBLE OBLIGATIONS
Q: Joey, Jovy and Jojo are solidary debtors under a loan
Q: What are the different permutations of joint indivisible obligation of P300,000.00 which has fallen due. The
obligations? What are their effects? creditor has, however, condoned Jojo's entire share in the
debt. Since Jovy has become insolvent, the creditor makes
A: a demand on Joey to pay the debt.
1. If there are two or more debtors, compliance with the 1. How much, if any, may Joey be compelled to
obligation requires the concurrence of all the debtors, pay?
although each for his own share. The obligation can be 2. To what extent, if at all, can Jojo be compelled
enforced only by preceding against all of the debtors. by Joey to contribute to such payment? (1998
2. If there are two or more creditors, the concurrence or Bar Question)
collective act of all the creditors, although each of his
own share, is also necessary for the enforcement of A:
the obligation. 1. Joey can be compelled to pay only the remaining
3. Each credit is distinct from one another; therefore a balance of P200, 000, in view of the remission of Jojo’s
joint debtor cannot be required to pay for the share of share by the creditor. (Art. 1219)
another with debtor, although he may pay if he wants
to. 2. Jojo can be compelled by Joey to contribute P50,000.
4. In case of insolvency of one of the debtors, the others When one of the solidary debtors cannot, because of
shall not be liable for his shares. To hold otherwise his insolvency, reimburse his share to the debtor
would destroy the joint character of the obligation paying the obligation, such share shall be borne by all
(Art. 1209). his co-debtors, in proportion to the debt of each (par.
3, Art. 1217).
Q: What is the effect of breach of a joint indivisible
obligation by one debtor? Since the insolvent debtor's share which Joey paid was
P100, 000, and there are only two remaining debtors -
A: If one of the joint debtors fails to comply with his namely Joey and Jojo - these two shall share equally
undertaking, the obligation can no longer be fulfilled or the burden of reimbursement. Jojo may thus be
performed. It is converted into one of indemnity for compelled by Joey to contribute P50, 000.
damages. Innocent joint debtor shall not contribute to the
indemnity beyond their corresponding share of the Q: What are the kinds of solidary obligation?
obligation.
A:
SOLIDARY OBLIGATIONS 1. Passive – solidarity on the part of the debtors
2. Active – solidarity on the part of the creditors
Q: What is the effect of solidary obligation? 3. Mixed – solidarity on both sides
A: Each one of the debtors is obliged to pay the entire Note: example of words that connote solidary obligation: a) joint
obligation, and each one of the creditors has the right to and several; b) in solidum; c) individually and collectively; d) each
demand from any of the debtors the payment or fulfillment will pay the whole value; e) “I promise to pay” and there are two or
of the entire obligation. more signatures

2013 GOLDEN NOTES
OBLIGATIONS
Q: Distinguish solidarity from indivisibility DIVISIBLE AND INDIVISIBLE OBLIGATIONS
A: Q: What is the primary distinction between divisible and

SOLIDARITY INDIVISIBILITY indivisible obligations?
Refers to the vinculum
Refers to the prestation
existing between the A:
or object of the contract
subjects or parties DIVISIBLE INDIVISIBLE
Does not require Non-susceptibility to be
Requires the plurality of
plurality of subjects or Susceptibility of an performed partially
parties or subjects
parties obligation to be performed Partial performance is
In case of breach, it is partially tantamount to non-
In case of breach, the converted to one of performance
liability of the solidary indemnity for damages
debtors although and the indivisibility of
Q: What is the true test in determining divisibility?
converted into one of the obligation is
the indemnity for terminated and so each
A: Whether or not the prestation is susceptible of partial
damages remains debtor is liable only for
performance, not in the sense of performance in separate
solidary his part of the
or divided parts, but in the sense of the possibility of
indemnity
realizing the purpose which the obligation seeks to obtain.
Death of solidary debtor
If a thing could be divided into parts and as divided, its
terminates the Heirs of the debtor
value is impaired disproportionately, that thing is indivisible
solidarity, the tie or remain bound to
(Pineda, Obligations and Contracts, 2000 ed, p. 174).
vinculum being perform the same
intransmissible to the prestation
Q: What are the obligations that are deemed indivisible
heirs
and obligations that are deemed divisible:
Q: In cases of solidary creditors, may one act for all? What A:
are the limitations? 1. Obligations that are deemed indivisible:
a. Obligations to give definite things
A: Yes. However, while each one of the solidary creditors b. Those which are not susceptible of partial
may execute acts which may be useful or beneficial to the performance
others, he may not do anything which may be prejudicial to
them (Art. 1212). c. Even the object or service may be physically
divisible, an obligation is indivisible if so
Note: Prejudicial acts may still have valid legal effects, but the
performing creditor shall be liable to his co-creditors (Pineda,
provided (i) by law or (i) intended by the
Obligations and Contracts, 2000 ed, p. 157). parties. (Art. 1225)
Q: What are the effects of assignment of rights in a A pledge or mortgage is one and indivisible by provision of
solidary obligation? law, and the rules applies even if the obligation is joint and
not solidary (Art. 2089).
A: GR: Solidary creditor cannot assign his right because it is
Note: A joint obligation gives rise to indemnity for damages
predicated upon mutual confidence, meaning personal
from the time anyone of the debtors does not comply with
qualification of each creditor had been taken into
his undertaking. The debtors who may have been ready to
consideration when the obligation was constituted (Art. fulfill their promises shall not contribute to the indemnity
1213). beyond the corresponding portion of the price of the thing or
of the value of the service in which the obligation consists
XPNs: (Art. 1224).
1. Assignment to co-creditor; or
2. Assignment is with consent of co-creditor. 2. Obligations that are deemed divisible:
a. When the object of the obligation involves:
Q: To whom must payment be made in a solidary i. certain number of days of work;
obligation? ii. accomplishment of work by
metrical unit;
A: GR: To any of the solidary creditors. iii. Analogous things which are by
their nature susceptible of partial
XPN: If demand, judicial or extra-judicial, has been performance (Art. 1225)
made by one of them, payment should be made to him.
(Art. 1214)

CIVIL LAW
Q: What is the effect of illegality of a part of a contract? 3. the debtor is Guilty of fraud in the fulfillment of
the obligation. (Art. 1126)
A:
1. Divisible contract – illegal part is void and Note: The nullity of the penal clause does not carry with it that of
unenforceable. Legal part is valid and enforceable. the principal obligation.
(Art. 1420)
The nullity of the principal obligation carries with it that of the
2. Indivisible contract – entire contract is indivisible and
penal clause. (Art. 1230)
unenforceable.
Q: When may penalty be reduced by the courts?
Q: What is the effect of partial performance in indivisible
obligation?
A: PIU
1. Partial performance of the obligation
A: It is tantamount to non-performance. (Pineda,
2. Irregular performance of the obligation
Obligations and Contracts, 2000 ed, p. 179)
3. Penalty is Unconscionable even if there has been
no performance.
OBLIGATIONS WITH A PENAL CLAUSE
EXTINGUISHMENT OF OBLIGATIONS
Q: What is a penal clause?
Q: What are the modes of extinguishment of an
A: It is an accessory obligation or undertaking attached to
obligation?
the principal obligation to assure greater responsibility in
case of breach.
A:
Principal Modes: PaLoCo₃N
Note: Proof of actual damages suffered by the creditor is not
necessary in order that the penalty may be demanded (Art. 1228). 1. Payment or performance
2. Loss of the thing due
Q: Can the debtor just choose penalty over non- 3. Condonation or remission of debt
fulfillment? 4. Confusion or merger
5. Compensation
A: GR: No. The debtor cannot exempt himself from the 6. Novation (Art. 1231)
performance of the obligation by paying the penalty (Art.
1227). Other Modes: ARFP
7. Annulment
XPN: Yes, when the right has been expressly reserved 8. Rescission
to the debtor (Art. 1227). 9. Fulfillment of a resolutory condition
10. Prescription (Art. 1231)
Q: Can the creditor demand both the fulfillment of the
principal obligation and the penalty? Note: The enumeration is not exclusive.
A: GR: No. The creditor cannot demand the fulfillment of Q: If the parties mutually disagree as regards the
the obligation and the satisfaction of the penalty at the obligation, may it be cancelled?
same time (Art. 1227).
A: Yes. That is in the nature of “mutual desistance” – which
XPNs: is a mode of extinguishing obligations. It is a concept that
1. When the right has been clearly granted derives from the principle that since mutual agreement can
to him; create a contract, mutual disagreement by the parties can
2. If the creditor has decided to require cause its extinguishment (Saura v. Development Bank of the
the fulfillment of the obligation, the Phils., G.R. No. 24968, Apr. 27, 1972).
performance thereof should become
impossible without his fault, the penalty PAYMENT OR PERFORMANCE
may be enforced. (Art. 1227)
Q: Is the term “payment,” as used in the Code, limited to
Q: What is the effect of incorporating a penal clause in an appreciable sums of money?
obligation?
A: No. Payment may consist not only in the delivery of
money but also the giving of a thing (other than money),
A: GR: The penalty fixed by the parties is a compensation or the doing of an act, or not doing of an act.
substitute for damages in case of breach.
Note: Payment means not only the delivery of money but
XPNs: Damages shall still be paid even if there is a also the performance, in any other manner, of an
penal clause if: SRG obligation. (Art. 1232)
1. there is a Stipulation to the contrary
2. the debtor Refuses to pay the agreed penalty

2013 GOLDEN NOTES
OBLIGATIONS
Q: State the requisites of a valid payment Note: Payment made by a third person who does not intend to be
reimbursed by the debtor is deemed to be a donation, which
A: CCPAD requires the debtor's consent. But the payment is in any case valid
as to the creditor who has accepted it (Art. 1238)
1. Capacity of the payor
2. Capacity of the payee
Q: What are the characteristics of payment?
3. Propriety of the time, place, and manner of
payment
A:
4. Acceptance by the creditor
1. Integrity
5. Delivery of the full amount or the full
2. Identity
performance of the prestation
3. Indivisibility
Q: What is tender of payment?
Q: How should performance be made (integrity)?
A: Tender of payment is the definitive act of offering the
A: GR: Performance should always be in full. (Art. 1233)
creditor what is due him or her, together with the demand
that the creditor accept the same.
XPNs:
Note: There must be a fusion of intent, ability and capability to 1. Substantial performance performed in good faith
make good such offer, which must be absolute and must cover the (Art. 1234)
amount due (FEBTC v. Diaz Realty Inc., G.R. No. 138588, Aug. 23, 2. When the obligee accepts the performance,
2001). knowing its incompleteness or irregularity and
without expressing any protest or objection (Art.
Note: The legal tender covers all notes and coins issued by the 1235)
Bangko Sentral ng Pilipinas and guaranteed by the Republic of the 3. Debt is partly liquidated and partly unliquidated,
Philippines. The amount of coins that may be accepted as legal
but the liquidated part of the debt must be paid
tender are:
a. 1-Peso, 5-Pesos, 10-Pesos coins in amount not in full.
exceeding P1,000.00
b. 25 centavos or less – in amount not exceeding Q: What should be given as payment of an obligation
P100.00 (BSP Circular No. 537, Series of 2006, July (identity)?
18, 2005).
A: GR: Thing paid must be the very thing due and cannot be
Q: What is the rule on tender payment as to check? another thing even if of the same or more quality and
value.
A: A check does not constitute a legal tender, and that a
creditor may validly refuse it. However, this does not XPNs:
prevent a creditor from accepting a check as payment – the 1. Dation in payment
creditor has the option and the discretion of refusing or 2. Novation of the obligation
accepting it (Far East Bank & Trust Company vs. Diaz Realty, 3. Obligation is facultative
Inc, G.R. No. 138588, 2001)
Note: In an obligation to do or not to do, an act or
Q: Is the creditor bound to accept payment or forbearance cannot be substituted by another act or
performance by a third person? forbearance against the obligee’s (CR) will.
A: GR: No, the creditor is not bound. Q: Can the debtor or creditor be compelled to
perform/accept partial prestations (indivisibility)?
XPNs:
1. When made by a third person who has interest in A: GR: Debtor cannot be compelled by the creditor to
the fulfillment of the obligation perform obligation in parts and neither can the debtor
2. Contrary stipulation (Art. 1236) compel the creditor to accept obligation in parts.
Q: What are the rights of a third person who paid the XPNs: When:
debt? 1. partial performance has been agreed upon
2. part of the obligation is liquidated and part is
A: unliquidated
1. With knowledge and consent of the debtor: 3. to require the debtor to perform in full is
a. can recover entire amount paid (absolute impractical
reimbursement)
b. can be subrogated to all rights of the creditor. Q: Is the acceptance by a creditor of a partial payment an
2. Without knowledge or against the will of the debtor – abandonment of its demand for full payment?
can recover only insofar as payment has been
beneficial to the debtor (right of conditional A: No. When creditors receive partial payment, they are not
reimbursement) ipso facto deemed to have abandoned their prior demand
for full payment.

CIVIL LAW
To imply that creditors accept partial payment as complete SPECIAL FORMS OF PAYMENT
performance of their obligation, their acceptance must be
made under circumstances that indicate their intention to Q: What are the special forms of payment?
consider the performance complete and to renounce their
claim arising from the defect. A:
Dation in Payment
Note: While Article 1248 of the Civil Code states that creditors Alienation by the debtor of a particular property in favor of
cannot be compelled to accept partial payments, it does not
his creditor, with the latter’s consent, for the satisfaction of
prohibit them from accepting such payments (Selegna
Management and Development Corp. v. UCPB, G.R. No. 165662, the former’s money obligation to the latter, with the effect
May 30, 2006). of extinguishing the said money obligation (Pineda,
Q: To whom should payment be made? Application of Payment
Designation of the particular debt being paid by the debtor
A: Payment shall be made to: who has two or more debts or obligations of the same kind
1. the person in whose favor the obligation has been in favor of the same creditor to whom the payment is made
constituted (Pineda, Obligations and Contracts, 2000 ed, p. 229)
2. his successor in interest, or Payment by Cession
3. any person authorized to receive it. (Art. 1240) Debtor cedes his property to his creditors so the latter may
sell the same and the proceeds realized applied to the
Q: Is payment to an unauthorized person a valid payment? debts of the debtor (Pineda, Obligations and Contracts,
2000 ed, p. 238)
A: GR: Payment to an unauthorized person is not a valid Tender of Payment
payment. (Art. 1241) Voluntary act of the debtor whereby he offers to the
creditor for acceptance the immediate performance of the
XPNs: former’s obligation to the latter (Pineda, Obligations and
1. Payment to an incapacitated person if: Contracts, 2000 ed, p. 241)
a. he kept the thing delivered, or Consignation
b. it has been beneficial to him (Art. 1241) Act of depositing the object of the obligation with the court
or competent authority after the CR has unjustifiably
2. Payment to a third person insofar as it redounded refused to accept the same or is not in a position to accept
to the benefit of the creditor it due to certain reasons or circumstances (Pineda,
Benefit to the creditor need not be proved: RRE
a. If after the payment, the third person DATION IN PAYMENT
acquires the creditor’s Rights;
b. If the creditor Ratifies the payment to the Q: What does dation in payment or dacion en pago entail?
third person;
c. If by the creditor’s conduct, the debtor has A: Dacion en pago is the delivery and transmission of
been led to believe that the third person had ownership of a thing by the debtor to the creditor as an
authority to receive the payment (Estoppel) accepted equivalent of the performance of the obligation.
(Art. 1241) The property given may consist not only of a thing but also
of a real right (Tolentino, Civil Code of the Philippines, Vol.
3. Payment in good faith to the possessor of credit IV, 2002 ed, p. 293).
(Art. 1242)
Note: The undertaking partakes of the nature of sale, that is, the
Note: Payment made to the creditor by the debtor after the creditor is really buying the thing or property of the debtor,
latter has been judicially ordered to retain the debt shall not payment for which is to be charged against the debtor’s debt. As
be valid (Art. 1243). such, the essential elements of a contract of sale, namely, consent,
object certain, and cause or consideration must be present.
Q: Is consent of the debtor necessary when the third
person does not intend to be reimbursed? Q: What are the elements of dation in payment?
A: Yes. Payment made by a third person who does not A:

intend to be reimbursed by the debtor is deemed to be a 1. Existence of a money obligation
donation which requires the debtor’s consent. But the 2. Alienation to the creditor of a property by the debtor
payment is in any case valid as to the creditor who has with the consent of the former
accepted it (Art. 1238). 3. Satisfaction of the money obligation of the debtor
Q: Lopez obtained a loan in the amount of P20, 000.00

from the Prudential Bank. He executed a surety bond in
which he, as principal, and PHILAMGEN as surety, bound
themselves jointly and severally for the payment of the
sum. He also executed a deed of assignment of 4,000

2013 GOLDEN NOTES
OBLIGATIONS
shares of the Baguio Military Institution in favor of extinguishing the obligation; the delivery and transmission
PHILAMGEN. Is the stock assignment made by Lopez of ownership of a thing (in this case, the credit due from a
dation in payment or pledge? third person) by the debtor to the creditor is accepted as
the equivalent of the performance of the obligation.
A: The stock assignment constitutes a pledge and not a
dacion en pago. Dation in payment is the delivery and The terms of the compromise judgment of the parties,
transmission of ownership of a thing by the debtor to the however, did not convey an intent to equate the
creditor as an accepted equivalent of the performance of assignment of Magdalena’s retirement benefits as the
the obligation. Lopez’s loan has not yet matured when he equivalent of the payment of the debt due the spouses
"alienated" his 4,000 shares of stock to Philamgen. Lopez's Serfino. There was actually no assignment of credit; if at all,
obligation would arise only when he would default in the the compromise judgment merely identified the fund from
payment of the principal obligation which is the loan and which payment for the judgment debt would be sourced.
Philamgen had to pay for it. Since it is contrary to the Only when Magdalena has received and turned over to the
nature and concept of dation in payment, the same could spouses Serfino the portion of her retirement benefits
not have been constituted when the stock assignment was corresponding to the debt due would the debt be deemed
executed. In case of doubt as to whether a transaction is a paid. Since no valid assignment of credit took place, the
pledge or a dation in payment, the presumption is in favor spouses Serfino cannot validly claim ownership of the
of pledge, the latter being the lesser transmission of rights retirement benefits that were deposited with FEBTC.
and interests (Lopez v. CA, G.R. No. L-33157, June 29, 1982). Without ownership rights over the amount, they suffered
no pecuniary loss that has to be compensated by actual
Q: Cebu Asiancars Inc., with the conformity of the lessor, damages. (Sps. Godfrey and Gerardina Serfino vs. Far East
used the leased premises as a collateral to secure Bank and Trust Company, Inc., now Bank of the Philippine
payment of a loan which Asiancars may obtain from any Islands, G.R. No. 171845, October 10, 2012)
bank, provided that the proceeds of the loan shall be used
solely for the construction of a building which, upon the FORM OF PAYMENT
termination of the lease or the voluntary surrender of the
leased premises before the expiration of the contract, Q: What are the rules as regards payment in monetary
shall automatically become the property of the lessor. obligations?
Meeting financial difficulties and incurring an outstanding
balance on the loan, Asiancars conveyed ownership of the A:
building on the leased premises to MBTC, by way of 1. Payment in cash– all monetary obligations shall
"dacion en pago."Is the dacion en pago by Asiancars in be settled in the Philippine currency which is legal
favor of MBTC valid? tender in the Philippines. However, the parties
may agree that the obligations or transactions
A: Yes. MBTC was a purchaser in good faith. MBTC had no shall be settled in any other currency at the time
knowledge of the stipulation in the lease contract. Although of payment (Sec. 1, R.A. 8183).
the same lease was registered and duly annotated, MBTC
was charged with constructive knowledge only of the fact 2. Payment in check or other negotiable instrument
of lease of the land and not of the specific provision – not considered payment, they are not
stipulating transfer of ownership of the building to the considered legal tender and may be refused by
Jaymes upon termination of the lease. While the alienation the creditor except when:
was in violation of the stipulation in the lease contract a. the document has been cashed; or
between the Jaymes and Asiancars, MBTC’s own rights b. it had been impaired through the fault of the
could not be prejudiced by Asiancars’ actions unknown to creditor.
MBTC. Thus, the transfer of the building in favor of MBTC
was valid and binding (Jayme v. CA, G.R. No. 128669, Oct. 4, PAYMENT IN CASH
2002).
Q: Northwest Airlines, through its Japan Branch, entered
Q: Can an assignment of credit constitute dation in into an International Passenger Sales Agency Agreement
payment? with CF Sharp, authorizing the latter to sell its air
transport tickets. CF Sharp failed to remit the proceeds of
A: An assignment of credit is an agreement by virtue of the ticket sales, thus, Northwest Airlines filed a collection
which the owner of a credit, known as the assignor, by a suit before the Tokyo District Court which rendered
legal cause, such as sale, dation in payment, exchange or judgment ordering CF Sharp to pay 83,158,195 Yen and
donation, and without the consent of the debtor, transfers damages for the delay at the rate of 6% per annum.
his credit and accessory rights to another, known as the Unable to execute the decision in Japan, Northwest
assignee, who acquires the power to enforce it to the same Airlines filed a case to enforce said foreign judgment with
extent as the assignor could enforce it against the debtor. It the RTC of Manila. What is the rate of exchange that
may be in the form of sale, but at times it may constitute a should be applied for the payment of the amount?
dation in payment, such as when a debtor, in order to
obtain a release from his debt, assigns to his creditor a A: The repeal of R.A. 529 by R.A. 8183 has the effect of
credit he has against a third person. As a dation in payment, removing the prohibition on the stipulation of currency
the assignment of credit operates as a mode of other than Philippine currency, such that obligations or

CIVIL LAW
transactions may now be paid in the currency agreed upon Q: Are receipts the only evidence that can be presented to
by the parties. Just like R.A. 529, however, the new law prove payment?
does not provide for the applicable rate of exchange for the
conversion of foreign currency-incurred obligations in their A: No. Receipts of payment, although not exclusive, are
peso equivalent. It follows, therefore, that the deemed the best evidence of the fact of payment (Dela
jurisprudence established in R.A. 529 regarding the rate of Peña and Villareal v. CA and Rural Bank of Bolinao, Inc., G.R.
conversion remains applicable. Thus, in Asia World No. 177828, Feb. 13, 2009).
Recruitment, Inc. v. National Labor Relations Commission,
the SC, applying R.A. 8183, sustained the ruling of the NLRC EXTRAORDINARY INFALTION OR DEFLATION
that obligations in foreign currency may be discharged in
Philippine currency based on the prevailing rate at the time Q: What is the rule in payment in case of an extraordinary
of payment. It is just and fair to preserve the real value of inflation or deflation?
the foreign exchange- incurred obligation to the date of its
payment. A: In case an extraordinary inflation or deflation of the
currency stipulated should supervene, the value of the
Q: If the rate of interest is not stipulated, what should be currency at the time of the establishment of the obligation
the rate of interest that should apply? When should the shall be the basis of payment, unless there is an agreement
interest begin to run? to the contrary (Art. 1250).
A: In Eastern Shipping Lines, Inc. v. CA, it was held that Note: It applies only to contractual obligations, it cannot be applied
absent any stipulation, the legal rate of interest in to obligations arising from torts.
obligations which consists in the payment of a sum of
money is 12% per annum to be reckoned from the time of Q: Does the exchange rate at the time of the
filing of the complaint therein until the said foreign establishment of the obligation apply in all cases?
judgment is fully satisfied (C.F. Sharp & Co., Inc. v.
Northwest Airlines, Inc., G.R. No. 133498, Apr. 18, 2002). A: No. The rule that the value of the currency at the time of
the establishment of the obligation shall be the basis of
PAYMENT BY NEGOTIABLE INSTRUMENT payment finds application only when there is an official
pronouncement or declaration of the existence of an
Q: Diaz & Company obtained a loan from Pacific Banking extraordinary inflation or deflation.
Corp which was secured by a real estate mortgage over
two parcels of land owned by the plaintiff Diaz Realty. APPLICATION OF PAYMENTS
ABC rented an office space in the building constructed on
the properties covered by the mortgage contract. The Q: What does the concept of application of payments
parties then agreed that the monthly rentals shall be paid mean?
directly to the mortgagee for the lessor's account, either
to partly or fully pay off the aforesaid mortgage A: It is the designation of the debt to which the payment
indebtedness. Thereafter, FEBTC purchased the credit of must be applied when the debtor has several obligations of
Diaz & Company in favor of PaBC, but it was only after 2 the same kind in favor of the same creditor (Art. 1252).
years that Diaz was informed about it. Diaz asked the
FEBTC to make an accounting of the monthly rental Q: What are the requisites of application of payments?
payments made by Allied Bank. Diaz tendered to FEBTC
the amount of P1,450,000.00 through an Interbank check, A:
in order to prevent the imposition of additional interests, 1. There is only one debtor and creditor
penalties and surcharges on its loan but FEBTC did not 2. The debtor owes the creditor two or more debts which
accept it as payment, instead, Diaz was asked to deposit are of the same kind or identical
the amount with the FEBTC’s Davao City Branch Office. 3. All debts are due and demandable
Was there a valid tender of payment? 4. The payment made by the debtor is not sufficient to
A: Yes. True, jurisprudence holds that, in general, a check cover or settle all debts (Pineda. Obligations and
does not constitute legal tender, and that a creditor may Contracts, 2000 ed. p. 251)
validly refuse it. It must be emphasized, however, that this
dictum does not prevent a creditor from accepting a check Q: What is the governing rule in case the debtor fails to
as payment. In other words, the creditor has the option and ascertain which debt his payment is to be applied?
the discretion of refusing or accepting it (FEBTC v. Diaz
Realty Inc., G.R. No. 138588, Aug. 23, 2001). A: The choice may be transferred to the creditor as when
the debtor makes payment and does not make application
Q: Who has the burden of proving payment in an action and debtor accepts a receipt in which the application is
for sum of money? made. In such a case, the debtor cannot complain of the
application the creditor has made unless there be a cause
A: The party who pleads payment as a defense has the for invalidating the contract (Art. 1252).
burden of proving that such payment has, in fact, been
made. Note: The debtor has the preferential right to choose which debt of
the several debts shall be due (Art. 1252).

2013 GOLDEN NOTES
OBLIGATIONS
Financial condition of the debtor

Q: May application of payments be made even if the debts Not necessarily in state of Debtor must be partially or
are not yet due? financial difficulty relatively insolvent
Object
A: GR: No. All debts must be due and demandable. Thing delivered is
Universality or property of
considered as equivalent of
XPN: debtor is what is ceded
performance
1. The parties so stipulate Extent of the extinguishment
2. Application is made by the party whose benefit Payment extinguishes
the term has been constituted (Art.1252) Merely releases debtor for
obligation to the extent of
net proceeds of
the value of the thing
Q: If both the creditor and the debtor fail to apply things ceded or assigned,
delivered as agreed upon,
payments, what rule governs? unless there is contrary
proved or implied from the
intention
conduct of the creditor
A: Legal application of payment governs wherein the law Ownership
makes the application. Ownership is transferred to Ownership is not
CR upon delivery transferred
The payment should be applied to the more onerous debts:
Novation
1. When a person is bound as principal in one
An act of novation Not an act of novation
obligation and as surety in another, the former is
Presumption of insolvency
more onerous.
Does not presuppose
2. When there are various debts, the oldest ones are Presupposes insolvency
insolvency
more burdensome.
3. Where one bears interest and the other does not,
even if the latter is the older obligation, the TENDER OF PAYMENT
former is considered more onerous.
4. Where there is an encumbrance, the debt with a Q: What constitutes a valid tender of payment?
guaranty is more onerous than that without
security. A: Voluntary act of the debtor whereby he offers to the
5. With respect to indemnity for damages, the debt creditor for acceptance the immediate performance of the
which is subject to the general rules on damages former’s obligation to the latter (Pineda, Obligations and
is less burdensome than that in which there is a Contracts, 2000 ed, p. 241).
penal clause.
6. The liquidated debt is more burdensome than the Tender of payment is the manifestation by debtors of their
unliquidated one. desire to comply with or to pay their obligation (Sps. Benos
7. An obligation in which the debtor is in default is v. Sps. Lawilao, G.R. No. 172259, Dec. 5, 2006).
more onerous than one in which he is not
Note: If the creditor refuses the tender of payment without just
(Tolentino, Civil Code of the Philippines, Vol. IV,
cause, the debtors are discharged from the obligation by the
2002 ed, p. 314-315) consignation of the sum due (Sps. Benos v. Sps. Lawilao, G.R. No.
172259, Dec. 5, 2006).
Note: If the debts happen to be of same nature and burden,
the payment shall be applied proportionately.
TENDER OF PAYMENT AND CONSIGNATION
PAYMENT BY CESSION
Q: What is consignation?
Q: What are the circumstances evidencing payment by
A: Act of depositing the object of the obligation with the
cession?
court or competent authority after the CR has unjustifiably
refused to accept the same or is not in a position to accept
A: Debtor abandons all of his property for the benefit of his
it due to certain reasons or circumstances (Pineda,
creditors in order that from the proceeds thereof, the latter
may obtain payment of credits.
Q: When and where is consignation made?
Note: It presupposes insolvency of the debtor. All the debtor’s
creditors must be involved and the consent of the latter must be
obtained. A: Consignation shall be made by depositing the things due
at the disposal of judicial authority, before whom tender of
payment shall be proved, in proper case, and the
Q: Distinguish dation in payment from payment in cession announcement of the consignation in other cases (Art.
1258)
A:
Note: Once the consignation has been duly made, the debtor may
DATION IN PAYMENT PAYMENT IN CESSION
ask the judge to order the cancellation of the obligation. (Art.
Number of creditors 1260)
Maybe one creditor Plurality of creditors

CIVIL LAW
Q: What are the requisites of consignation? extinguish the obligation obligation when declared
valid
A: VP-CPAS Character
1. Valid existing debt which is already due; Judicial for it requires the
2. Prior valid tender of payment except when prior filing of a complaint in
tender of payment is dispensable Extrajudicial court (Pineda, Obligations
3. Creditor unjustly refuses the tender of payment and Contracts, 2000 ed, p.
4. Prior notice of consignation given to persons 242)
interested in the fulfillment of the obligation
Q: In an ejectment case, X refused to vacate the land
Note: For reasons of equity, substantial alleging that Y had sold to him the additional area, the
compliance with the requirement of notice is payment of which would be effected five years after the
enough (De Mesa v. CA, G.R. Nos. 106467-68, execution of a formal deed of sale. However, the parties
1999) failed to execute a deed of sale. During the pendency of
the action, X deposited the payment for the addition to
5. Amount or thing is deposited at the disposal of the lot with the court. Is there a valid consignation?
judicial authority
6. Subsequent notice of the fact of consignation to A: No. Under Art. 1257 of the Civil Code, consignation is
persons interested in the fulfillment of the proper only in cases where an existing obligation is due. In
obligation. this case, the contracting parties agreed that full payment
of purchase price shall be due and payable within 5 years
Q: When will consignation produce effects of payment? from the execution of a formal deed of sale. At the time
Rodriguez deposited the amount in court, no formal deed
A: GR: Consignation shall produce effects of payment only of sale had yet been executed by the parties, and,
if there is a valid tender of payment. therefore, the 5-year period during which the purchase
price should be paid had not commenced. In short, the
XPNs: When: ARTIT purchase price was not yet due and payable (Heirs of San
1. Creditor is Absent or unknown, or doesn’t appear Andres v. Rodriguez, G.R. No. 135634, May 31, 2000).
at place of payment
2. Creditor Refuses to issue a receipt without just Q: Under a pacto de retro sale, X sold to Y his lot and the
cause building erected thereon. They agreed that half of the
3. Title of the obligation has been lost consideration shall be paid to the bank to pay off the loan
4. Creditor is Incapacitated to receive payment at of X. After paying the first installment, Y, instead of paying
the time it is due the loan to the bank, restructured it twice. Eventually, the
5. Two or more persons claim the right to collect loan became due and demandable. Thus, X paid the bank.
(Art. 1256) On the same day, Y also went to the bank and offered to
pay the loan, but the bank refused to accept the payment.
Note: The expenses of consignation, when properly made, shall be
charged against the creditor (Art. 1259).
Y then filed an action for consignation without notifying X.
Is there a valid consignation by Y of the balance of the
Q: Can the debtor withdraw the thing deposited?
contract price?
A: Before the creditor has accepted the consignation, or
before a judicial declaration that the consignation has been A: No. Y filed the petition for consignation against the bank
properly made, the debtor may withdraw the thing or the without notifying the X, resulting to the former’s failure to
sum deposited, allowing the obligation to remain in force prove the payment of the balance of the purchase price and
(Art. 1260). consignation. In fact, even before the filing of the
consignation case, Y never notified the X of their offer to
Note: If, the consignation having been made, the creditor should pay. (Sps. Benos v. Sps.Lawilao, G.R. No. 172259, Dec. 5,
authorize the debtor to withdraw the same, he shall lose every 2006)
preference which he may have over the thing. The co-debtors,
guarantors and sureties shall be released. (Art. 1261) Q: Because of Ligaya’s refusal to accept several tenders of
payment and notices of consignation given by OSSA in its
Q: Distinguish tender of payment from consignation desire to comply with its obligation to pay on installments,
OSSA brought a complaint for consignation against Ligaya
A: before the RTC. The RTC allowed OSSA, among others, to
TENDER OF PAYMENT CONSIGNATION deposit with it,by way of consignation, all future quarterly
Nature installments without need of formal tenders of payment
Antecedent of consignation Principal or consummating and service of notices of consignation.
or preliminary act to act for the extinguishment
consignation of the obligation Ligaya assails the validity of the consignation on the
Effect ground that there was no notice to her regarding OSSA's
It does not by itself It extinguishes the consignation of the amounts corresponding to certain
installments. Is Ligaya correct?

2013 GOLDEN NOTES
OBLIGATIONS
or physically impossible without the fault of the
A: No. The motion and the subsequent court order served obligor. (Art. 1266)
on Ligaya in the consignation proceedings sufficiently
served as notice to Ligaya of OSSA's willingness to pay the Q: Differentiate legal from physical impossibility to
quarterly installments and the consignation of such perform an obligation to do.
payments with the court. For reasons of equity, the
procedural requirements of consignation are deemed A:
substantially complied with in the present case (De Mesa v. 1. Legal impossibility – act stipulated to be performed is
CA, G.R. Nos. 106467-68, Oct. 19, 1999). subsequently prohibited by law.
2. Physical impossibility – act stipulated could not be
LOSS OF THE THING DUE physically performed by the obligor due to reasons
subsequent to the execution of the contract. (Pineda,
Q: When is a thing considered lost? Obligations and Contracts, 2000 ed, p. 261)
A: When: DOPE Note: The impossibility must be after the constitution of the
1. It Disappears in such a way that its existence is obligation. If it was before, there is nothing to extinguish.
unknown;
2. It goes Out of commerce; Q: What is the effect of partial loss?
3. It Perishes; or
4. Its Existence is unknown or if known, it cannot be A:
recovered. 1. Due to the fault or negligence of the debtor – CR has
the right to demand the rescission of the obligation or
Q: What is the effect of loss of the thing which is the to demand specific performance, plus damages, in
object of the obligation? either case.
2. Due to fortuitous event:
A: If the obligation is a: a. Substantial loss – obligation is extinguished.
1. Determinate obligation to give: b. Unsubstantial loss – the CR shall deliver the thing
GR: The obligation is extinguished when the promised in its impaired condition. (Art. 1264)
object of the obligation is lost or destroyed. (Art.
1262) Q: What is the effect when the thing is lost in the
possession of the debtor?
XPNs: LAS-CD-PCG
a. Law provides otherwise (Art. 1262) A: GR: It is presumed that loss is due to DR’s fault.
b. Nature of the obligation requires the
Assumption of risk (Ibid) XPN: Presumption shall not apply in case loss is due to
c. Stipulation to the contrary (Ibid) earthquake, flood, storm or other natural calamity (Art.
d. Debtor Contributed to the loss (Ibid) 1262)
e. Loss the of the thing occurs after the debtor
incurred in Delay (Ibid) XPN to the XPN: Debtor still liable even if loss is due to
f. When debtor Promised to deliver the same fortuitous event when:
thing to two or more persons who do not 1. Debtor incurred in delay; or
have the same interest (Art. 1165) 2. Debtor promised to deliver the thing to two or
g. When the debt of a certain and determinate more persons with different interests (par. 3, Art.
thing proceeds from a Criminal offense (Art. 1165)
1268)
h. When the obligation is Generic (Art. 1263) Q: What does rebus sic stantibus mean?
2. Generic obligation to give: A: A principle in international law which means that an

GR: The obligation is not extinguished because a agreement is valid only if the same conditions prevailing at
generic thing never perishes (genus nun guam time of contracting continue to exist at the time of
perit). (Art. 1263) performance. It is the basis of the principle of unforeseen
difficulty of service. (Art. 1267)
XPNs:
1. In case of generic obligations whose object is Note: However, this principle cannot be applied absolutely in
a particular class or group with specific or contractual relations since parties are presumed to have assumed
determinate qualities (delimited generic the risk of unfavorable developments. (Pineda, Obligations and
Contracts, 2000 ed., p. 264)
obligation)
2. In case the generic thing has already been Note: Principle of unforeseen events applies when the service has
segregated or set aside, in which case, it has become so difficult as to be manifestly beyond the contemplation
become specific. of the parties, the obligor may also be released therefrom in whole
or in part (Art. 1267).
3. An obligation to do – the obligation is
extinguished when the prestation becomes legally

CIVIL LAW
Q: What are the requisites in order to relieve the debtor Note: Whenever the private document in which the debt
from his obligation, in whole or in part, based on appears is found in the possession of the debtor, it shall be
unforeseen difficulty of service? presumed that the creditor delivered it voluntarily, unless
the contrary is proved (Art. 1272).
A:
1. Event or change in circumstance could not have been Q: What is the effect of the remission of the principal debt
foreseen at the time of the execution of the contract with respect to the accessory obligation and vice versa?
2. Such event makes the performance extremely difficult
but not impossible A: The renunciation of the principal debt shall extinguish
3. The event must not be due to the act of any of the the accessory but the waiver of the latter shall leave the
parties former in force (Art. 1273).
4. The contract is for a future prestation. (Tolentino, Civil
Code of the Philippines, Vol. IV, 2002 ed, p. 347) Note: It is presumed that the accessory obligation of pledge has
been remitted when the thing pledged, after its delivery to the
Q: What is the rule when the debt of a thing certain and creditor, is found in the possession of the debtor, or of a third
person who owns the thing (Art. 1274).
determinate proceeds from a criminal offense?
Q: What is the effect of inofficious condonation?
A: GR: Debtor shall not be exempted from the payment of
its price, whatever may be the cause for the loss.
A: It may be totally revoked or reduced depending on
whether or not it is totally or only partly inofficious.
XPN: The thing having been offered by debtor to the
(Pineda, Obligations and Contracts, 2000 ed, p. 268)
person who should receive it, the latter refused
without justification to accept it. (Art. 1268)
Q: Can there be a unilateral condonation?
Note: Offer referred in Art. 1268 is different from
consignation; the former refers to extinguishment of A: No. Since it is a donation of an existing credit, considered
obligation through loss while the latter refers to the a property right, in favor of the debtor, it is required that
payment of the obligation. the DR gives his consent thereto by making an acceptance.
If there is no acceptance, there is no condonation (Pineda,
CONDONATION OR REMISSION OF DEBT Obligations and Contracts, 2000 ed, p. 267).
Q: What is condonation? CONFUSION OR MERGER OF RIGHTS
A: It is an act of liberality by virtue of which the creditor, Q: What is confusion or merger of rights?
without receiving any price or equivalent, renounces the
enforcement of the obligation, as a result of which it is A: It is the merging or convergence of the rights of a
extinguished in its entirety or in that part or aspect of the creditor and debtor in one and the same person with
same to which the condonation or remission refers (Pineda, regard to the same obligation.
Example of merger: A makes a check payable to bearer,
Q: What are the requisites of condonation? and hands the check to C, who hands it to D who finally
hands it to A. Here A owes himself. This is a clear case of
A: GAIDE merger, and hence the obligation of A is extinguished.
1. Must be Gratuitous;
2. Acceptance by the debtor; Q: When is there a confusion or merger of rights?
3. Must not be Inofficious;
4. Formalities provided by law on Donations must A: The meeting in one person of the qualities of a creditor
be complied with if condonation is express; and and debtor of the same obligation. (Sanchez Roman)
5. An Existing demandable debt.
Q: What are the requisites of confusion or merger of
Q: What is the effect of the delivery of a private document rights?
evidencing a credit?
A:
A: The delivery of a private document evidencing a credit, 1. Merger in the same person of the characters of
made voluntarily by the creditor to the debtor, implies the both a creditor and debtor (Art. 1275);
renunciation of the action which the former had against the 2. Must take place in the persons of a principal
latter. creditor and a principal debtor(Art. 1276); and
3. Merger is definite and complete.
If in order to nullify this waiver it should be claimed to be
inofficious, the debtor and his heirs may uphold it by
proving that the delivery of the document was made in
virtue of payment of the debt (Art. 1271).

2013 GOLDEN NOTES
OBLIGATIONS
Q: What is the effect of confusion or merger of rights? COMPENSATION
A: The creditor and debtor becomes the same person Q: What is compensation?
involving the same obligation. Hence, the obligation is
extinguished. (Art. 1275) A: It is a mode of extinguishing obligations that take place
when two persons, in their own right, are creditors and
Q: Can there be partial confusion? debtors of each other (Art. 1278)
A: Yes. It will be definite and complete up to the extent of Note: It is the offsetting of the respective obligation of two persons
the concurrent amount or value, but the remaining who stand as principal creditors and debtors of each other, with
obligation subsists (Pineda, Obligations and Contracts, 2000 the effect of extinguishing their obligations to their concurrent
amount.
ed, p. 278).
Q: What are the requisites of compensation?
Q: What is the effect when confusion or merger is
revoked?
A: PriSDue-LiDeCoP
1. Each one of the obligors must be bound
A: If the act which created the confusion is revoked for
Principally, and that he be at the same time a
some causes such as rescission of contracts, or nullity of the
principal creditor of the other except guarantor
will or contract, the confusion or merger is also revoked.
who may set up compensation as regards what
The subject obligation is revived in the same condition as it
the creditor may owe the principal (Art. 1279,
was before the confusion.
1280);
Note: During such interregnum, the running of the period of 2. Both debts consist in sum of money, or if the
prescription of the obligation is suspended (Pineda, Obligations things due are consumable, they be of the Same
and Contracts, 2000 ed, p. 279). kind and also of the same quality if the latter has
been stated;
Q: What is the effect of confusion or merger in relation to 3. Both debts are Due;
the guarantors? 4. Both debts are Liquidated and Demandable;
5. Neither debt must be retained in a Controversy
A: commenced by third person and communicated
1. Merger which takes place in the person of the in due time to the debtor (neither debt is
principal debtor or principal creditor benefits the garnished) (Art. 1279); and
guarantors. The contract of guaranty is extinguished. 6. Compensation must not be Prohibited by law.
2. Confusion which takes place in the person of any of (Art. 1290)
the guarantors does not extinguish the obligation (Art.
1276). Note: When all the requisites mentioned in Art. 1279 of the
Civil Code are present, compensation takes effect by
Q: What is the effect of confusion or merger in one debtor operation of law, and extinguishes both debts to the
concurrent amount, even though the creditors and debtors
or creditor in a joint obligation?
are not aware of the compensation. (Art. 1290)
A: GR: Joint obligation is not extinguished since confusion is

Q: X, who has a savings deposit with Y Bank in the sum of
not definite and complete with regard to the entire
PI,000,000.00, incurs a loan obligation with the said bank
obligation. A part of the obligation still remains
in the sum of P800,000.00 which has become due. When X
outstanding.
tries to withdraw his deposit, Y Bank allows only
P200,000.00 to be withdrawn, less service charges,
XPN: Obligation is extinguished with respect only to the
claiming that compensation has extinguished its
share corresponding to the DR or CR concerned. In
obligation under the savings account to the concurrent
effect, there is only partial extinguishment of the entire
amount of X's debt. X contends that compensation is
obligation (Art. 1277; Pineda, Obligations and Contracts,
improper when one of the debts, as here, arises from a
2000 ed, p. 281).
contract of deposit. Assuming that the promissory note
signed by X to evidence the loan does not provide for
Q: In a solidary obligation, what is the effect of confusion
compensation between said loan and his savings deposit,
or merger in one debtor or creditor?
who is correct? (1998 Bar Question)
A: If a solidary debtor had paid the entire obligation, the
A: Y bank is correct. All the requisites of Art. 1279, Civil
obligation is totally extinguished without prejudice to the
Code are present. Compensation shall take place when two
rights of the solidary debtor who paid, to proceed against
persons are reciprocally creditor and debtor of each other.
his solidary co- debtors for the latter’s individual
In this connection, it has been held that the relation
contribution or liability (Pineda, Obligations and Contracts,
existing between a depositor and a bank is that of creditor
2000 ed, p. 282).
and debtor. As a general rule, a bank has a right of set off of
the deposits in its hands for the payment of any
indebtedness to it on the part of a depositor" (Gullas v.
PNB, GR No. L-43191, November 13, 1935). Hence,

CIVIL LAW
compensation took place between the mutual obligations collectible in its favor from Pacweld also by way of
of X and Y bank. attorney's fees which MPCC recovered from the same CFI
of Manila in another civil case. Was there legal
Q: What are the debts or obligations not subject to compensation?
compensation?
A: MPCC and Pacweld were creditors and debtors of each
A: other, their debts to each other consisting in final and
1. Debts or obligations arising from contracts of executory judgments of the CFI in two separate cases. The
depositum (Art. 1287) two obligations, therefore, respectively offset each other,
2. Debts arising from obligations of a depositary. compensation having taken effect by operation of law and
(Ibid) extinguished both debts to the concurrent amount of
3. Debts arising from obligations of a baileee in P10,000.00, pursuant to the provisions of Arts. 1278, 1279
commodatum (Ibid) and 1290 of the Civil Code, since all the requisites provided
4. Claims for support due by gratuitous title (Ibid) in Art. 1279 of the said Code for automatic compensation
5. Obligations arising from criminal offenses (Art. "even though the creditors and debtors are not aware of
1288) the compensation" were present. (Mindanao Portland
6. Certain obligations in favor of government (e.g. Cement Corp. v. CA,G.R. No. L-62169, Feb. 28, 1983)
taxes, fees, duties, and others of a similar nature)
Q: What is conventional compensation?
Note: Compensation takes place by operation of law, even though
the debts may be payable at different places, but there shall be an A: It is one that takes place by agreement of the parties.
indemnity for expenses of exchange or transportation to the place
of payment. (Art. 1286)
Q: What is the rule in conventional compensation?
KINDS OF COMPENSATION
A: Compensation to become effective:
GR: The mutual debts must be both due (Art. 1279)
Q: What are the kinds of compensation?
XPN: The parties may agree that their mutual debts be
compensated even if the same are not yet due (Art.
A:
1282)
1. Legal compensation – by operation of law
2. Conventional – by agreement of the parties
Q: When shall judicial compensation arise?
3. Judicial (set-off) – by judgment of the court when
there is a counterclaim duly pleaded, and the
A: If one of the parties to a suit over an obligation has a
compensation decreed
claim for damages against the other, the former may set it
4. Facultative – may be claimed or opposed by one
off by proving his right to said damages and the amount
of the parties.
thereof (Art. 1283).
Q: De Leon sold and delivered to Silahis various Note: All the requisites mentioned in Art. 1279 must be present,
merchandise. Due to Silahis' default, De Leon filed a except that at the time of filing the pleading, the claim need not be
complaint for the collection of said accounts. Silahis liquidated. The liquidation must be made in the proceedings.
asserts, as affirmative defense, a debit memo as
unrealized profit for a supposed commission that Silahis Q: What is facultative compensation?
should have received from De Leon. Was there legal
compensation? A: One of the parties has a choice of claiming or opposing
the compensation but waives his objection thereto such as
A: Silahis admits the validity of its outstanding accounts an obligation of such party is with a period for his benefit
with De Leon. But whether De Leon is liable to pay Silahis a alone and he renounces the period to make the obligation
commission on the subject sale to Dole is disputed. This become due.
circumstance prevents legal compensation from taking
place (Silahis Marketing Corp. v. IAC, G. R. No. L-74027, Dec. Example: X owes Y P100,000 demandable and due on Apr.
7, 1989). 1, 2012. Y owes X P100,000 demandable and due on or
before Apr. 15, 2012. Y, who was given the benefit of the
Note: Compensation is not proper where the claim of the person term, may claim compensation on April 1, 2012. On the
asserting the set-off against the other is not clear or liquidated; other hand, X, who demands compensation, can be
compensation cannot extend to unliquidated, disputed claim
properly opposed by Y because Y could not be made to pay
existing from breach of contract. (Silahis Marketing Corp. v. IAC, G.
R. No. L-74027, Dec. 7, 1989) until Apr. 15, 2012.
Note: Facultative compensation is unilateral and does not require

Q: Atty. Laquihon, in behalf of Pacweld, filed a pleading
mutual agreement; voluntary or conventional compensation
addressed to MPCC titled “motion to direct payment of requires mutual consent.
attorney's fee”, invoking a decision wherein MPCC was
adjudged to pay Pacweld the sum of P10,000.00 as Q: Eduardo was granted a loan by XYZ Bank for the
attorney's fees. MPCC filed an opposition stating that the purpose of improving a building which XYZ leased from
said amount is set-off by a like sum of P10,000.00,

2013 GOLDEN NOTES
OBLIGATIONS
him. Eduardo executed the promissory note in favor of the because there is no change in the object or principal
bank, with his friend Ricardo as cosignatory. In the PN, conditions of the obligation. There is no substitution of
they both acknowledged that they are “individually and debtors, either. Compensation is considered as abbreviated
collectively” liable and waived the need for prior demand. or simplified payment and since Ricardo bound himself
To secure the PN, Ricardo executed a real estate mortgage solidarily with Eduardo, any facultative compensation
on his own property. When Eduardo defaulted on the PN, which occurs does not result in partial legal subrogation.
XYZ stopped payment of rentals on the building on the Neither Eduardo nor Ricardo is a third person interested in
ground that legal compensation had set in. Since there the obligation under Art. 1302.
was still a balance due on the PN after applying the
rentals, XYZ foreclosed the real estate mortgage over Q: What are the obligations subject to facultative
Ricardo’s property. Ricardo opposed the foreclosure on compensation?
the ground that he is only a co-signatory; that no demand
was made upon him for payment, and assuming he is A: When one of the debts arises from:
liable, his liability should not go beyond half of the 1. Depositum
balance of the loan. Further, Ricardo said that when the 2. Obligations of a depositary
bank invoked compensation between the rentals and the 3. Obligations in commudatum
amount of the loan, it amounted to a new contract or 4. Claim of support due to gratuitous title
novation, and had the effect of extinguishing the security
since he did not give his consent (as owner of the property XPN: Future support.
under the real estate mortgage) thereto.
5. Civil liability from a crime
Can XYZ Bank validly assert legal compensation?
Note: Art. 1288 prohibits compensation if one of the debts
A: XYZ Bank may validly assert the partial compensation of consists in civil liability arising from a penal offense. However,
both debts, but it should be facultative compensation the victim is allowed to claim compensation.
because not all of the five requisites of legal compensation
are present (Art. 1279). The payment of the rentals by XYZ Q: What is the rule if one or both debts are rescissible or
Bank is not yet due, but the principal obligation of loan voidable?
where both Eduardo and Ricardo are bound solidarily and
therefore any of them is bound principally to pay the entire A: When one or both debts are recissible or voidable, they
loan, is due and demandable without need of demand. XYZ may be compensated against each other before they are
Bank may declare its obligation to pay rentals as already judicially rescinded or avoided (Art. 1284).
due and demand payment from any of the two debtors.
Note: If the prescriptive period had already lapsed, there is
automatic compensation and the same will not be disturbed
Q: Can Ricardo’s property be foreclosed to pay the full anymore. Whereas, if the debt is rescinded or annulled,
balance of the loan? compensation shall be restitution of what each party had received
before the rescission or annulment.
A: No, because there was no prior demand on Ricardo,
depriving him of the right to reasonably block the Q: What are the effects of assignment on compensation of
foreclosure by payment. The waiver of prior demand in the debts?
PN is against public policy and violates the right to due
process. Without demand, there is no default and the A:
foreclosure is null and void. Since the mortgage, insofar as 1. After the compensation took place –
Ricardo is concerned is not violated, a requirement under GR: ineffectual; useless act since there is nothing more
Act 3135 for a valid foreclosure of real estate mortgage is to assign
absent.
XPN: when the assignment was made with the
In the case of DBP v. Licuanan, it was held that: “the issue consent of the debtor.
of whether demand was made before the foreclosure was
effected is essential. If demand was made and duly received Note: Such consent operates as a waiver of the rights to
by the respondents and the latter still did not pay, then compensation.
they were already in default and foreclosure was proper.
However, if demand was not made, then the loans had not XPN TO THE XPN: at the time he gave his consent,
yet become due and demandable. This meant that the he reserved his right to the compensation.
respondents had not defaulted in their payment and the
foreclosure was premature.” 2. Before compensation took place
a. With the consent of the debtor –
Q: Does Ricardo have basis under the Civil Code for compensation cannot be set up except when
claiming that the original contract was novated? (2008 Bar the right to compensation is reserved.
Question) b. With the knowledge but without consent of
the debtor – compensation can be set up
A: None of the three kinds of novation is applicable. There regarding debts previous to the cession or
is no objective novation, whether express or implied, assignment but not subsequent ones.

CIVIL LAW
c. Without the knowledge of debtor - can set up Code of Court, particularly on
compensation as a defense for all debts Counterclaims and/or
maturing prior to his knowledge of the Cross-claims are
assignment. observed.
Q: Distinguish compensation from payment NOVATION
A: Q: What is novation?
COMPENSATION PAYMENT
A mode of extinguishing to A: It is the substitution or change of an obligation by
the concurrent amount, the Payment means not only another, resulting in its extinguishment or modification,
obligations of those persons delivery of money but also either by changing the object or principal conditions, or by
who in their own right are performance of an substituting another in the place of the debtor or by
reciprocally debtors and obligation subrogating a third person to the rights of the creditor
creditors of each other (Pineda, Obligations and Contracts, 2000 ed, p. 298).
Capacity of parties not
necessary Debtor must have capacity Q: What are the requisites of novation?
to dispose of the thing paid;
Reason: Compensation creditor must have capacity A: OIC -SN
operates by law, not by the to receive payment 1. Valid Old obligation
act of the parties 2. Intent to extinguish or to modify the old
The performance must be obligation
There can be partial 3. Capacity and consent of all the parties to the new
complete and indivisible
extinguishment of the obligation (except in case of expromission where
unless waived by the
obligation
creditor the old debtor does not participate)
Legal compensation takes 4. Substantial difference of the old and new
Takes effect by the act of obligation – on every point incompatible with
place by operation of law
the parties and involves each other (implied novation)
without simultaneous
delivery or action 5. Valid New obligation
delivery
Parties must be mutually It is not necessary that the
debtors and creditors of parties be mutually debtors Q: What are the two-fold functions of novation?
each other and creditors of each other
A:
Q: Distinguish compensation from confusion. 1. It extinguishes the old obligation; and
2. Creates a new obligation in lieu of the old one.
A:
COMPENSATION CONFUSION Q: What are the kinds of novation?
(Arts. 1278-1279) (Arts. 1275-1277)
Two persons who are One person where A:
mutual debtors and qualities of debtor and 1. As to essence
creditors of each other creditor are merged a. Objective or real novation – changing the object or
At least two obligations One obligation principal conditions of the obligation (Art. 1291).
b. Subjective or personal novation – change of the
parties.
Q: Distinguish compensation from counterclaim or set-off
i. Substituting the person of the debtor
(passive novation) – may be made
A:
without the knowledge of or against the
COUNTERCLAIM /
COMPENSATION will of the latter, but not without the
SET-OFF
consent of the creditor.
Need not to be
a) Delegacion – the substitution is initiated by the
pleaded; takes place by
old debtor himself (delegante) by convincing
operation of law and
another person (delegado) to take his place
extinguishes
It must be pleaded to and to pay his obligation to the creditor.
reciprocally the two
be effectual b) Expromission – the substitution of the old debtor
debts as soon as they
by a new debtor is upon the initiative or
exist simultaneously, to
proposal of a third person.
the amount of their
respective sums.
Note: If it is the creditor who initiated the change of
Generally, both debts Does not require that debtor, it is considered expromission
must be liquidated debts are liquidated
Legal or conventional Judicial compensation ii. Subrogating a third person to the rights
compensation provided that the of the creditor (active novation)
governed by the Civil requirements of Rules

2013 GOLDEN NOTES
OBLIGATIONS
c. Mixed – combination of the objective and subjective Q: What are the requisites of delegacion?
novation.
A:
2. As to form of their constitution 1. Substitution is upon the initiative or proposal of the
a. Express – the parties declared in unequivocal terms old debtor himself by proposing to the creditor the
that the obligation is extinguished by the new entry of another (third person) as the new debtor who
obligation. will replace him in payment of the obligation.
b. Implied – no express declaration that the old 2. The creditor accepts and the new debtor agrees to the
obligation is extinguished by the new one. The old proposal of the old debtor.
and new obligation is incompatible on every 3. The old debtor is released from the obligation with the
material point. (Art. 1292) consent of the creditor.
3. As to extent of their effects Q: In case of delegacion, what is the effect if the new
a. Total or extinctive – obligation is originally debtor is insolvent?
extinguished.
b. Partial or modificatory – original obligation is not A: GR: Insolvency of the new debtor (delegado), who has
extinguished but merely modified. been proposed by the original debtor (delegante) and
accepted by the creditor (delegatario), shall not revive the
4. As to their origin action of the latter against the original obligor. (Art. 1295)
a. Legal novation – by operation of law (Art. 1300 and
1302) XPN: Original debtor shall be held liable:
b. Conventional novation – by agreement of the 1. Insolvency was already existing and of
parties (Art. 1300 and 1301) public knowledge, or known to the
debtor (Art. 1295);
5. As to presence of absence of condition 2. Insolvency of the new debtor was
a. Pure – new obligation is not subject to a condition already existing and known to the
b. Conditional – when the creation of the new original debtor at the time of the
obligation is subject to a condition. delegation of the debt to the new
debtor. (Art. 1295)
Q: What are the rights of the new debtor?
Q: What are the requisites of expromission?
A:
1. With the debtor’s consent – right of reimbursement A:
and subrogation. 1. Substitution is upon the initiative or proposal of a third
2. Without the consent of the old debtor or against his person who will step into the shoes of the debtor;
will – right to beneficial reimbursement. 2. Creditor must give his consent to the proposal of the
third person.
Q: Is novation presumed? 3. Old debtor must be released from the obligation with
the consent of the creditor.
A: No. Novation is never presumed, it must be proven as a
fact either by: Q: In case of expromission, what is the effect in case the
1. Explicit declaration – if it be so declared in new debtor is insovent or could not fulfill the obligation?
unequivocal terms; or
2. Material incompatibility – that the old and the A: If substitution is without the knowledge or against the
new obligations be on every point incompatible will of the debtor, the new debtor’s insolvency or
with each other. (Art. 1292) nonfulfillment of the obligation shall not give rise to any
liability on the part of the original debtor. (Art. 1294)
Q: Is creditor’s consent mandatory in the substituting the
person of the creditor? Note: If the old debtor gave his consent and the new debtor could
not fulfill the obligation, the old debtor should be liable for the
A: Yes. The consent of the creditor is mandatory both in payment of his original obligation.
delegacion and expromission. (Art. 1293) It may be express
or implied from his acts but not from his mere acceptance
of payment by a third party, for there is no true transfer of
debt.
Note: Creditor’s consent or acceptance of the substitution of the

old debtor by a new one may be given at anytime and in any form
while the agreement of the debtor subsists (Asia Banking Corp. v.
Elser, 54 Phil. 994)

CIVIL LAW
SUMMARY
Delegacion Expromission
Person who initiated the substitution Old debtor Third person
It may be express or implied from his acts but not from his mere acceptance of
Consent of the creditor
payment by a third party.
With or without the knowledge of the
With the consent of the old debtor
Consent of the old debtor debtor or against the will of the old
(since he initiated the substitution)
debtor
Consent is needed but it need not be
Consent of third person Consent is needed
given simultaneously
Intention of substitution Released from the obligation with the consent of the creditor
With the debtor’s consent – right of
reimbursement and subrogation
With the debtor’s consent – right of
Rights of the new debtor
reimbursement and subrogation Without the consent of the old debtor or
against his will – right to beneficial
reimbursement
Shall not revive the action of the latter
With the debtor’s consent - If the old
against the original obligor
debtor gave his consent and the new
debtor could not fulfill the obligation,
Original debtor shall be held liable:
the old debtor should be liable for the
1. Insolvency was already
payment of his original obligation.
existing and of public
Insolvency or nonfulfillment of the
knowledge, or known to the
obligation of the new debtor Without the consent of the old debtor or
debtor
against his will – the new debtor’s
2. Insolvency of the new debtor
insolvency or nonfulfillment of the
was already existing and
obligation shall not give rise to any
known to the original debtor
liability on the part of the original
at the time of the delegation
debtor.
of the debt to the new debtor.
Q: SDIC issued to Danilo a Diners Card (credit card) with Q: What are the effects of novation?
Jeannete as his surety. Danilo used this card and initially
paid his obligations to SDIC. Thereafter, Danilo wrote SDIC A:
a letter requesting it to upgrade his Regular Diners Club 1. Extinguishment of principal also extinguishes the
Card to a Diamond (Edition) one. As a requirement of accessory, except:
SDIC, Danilo secured from Jeanette her approval and the
latter obliged. Danilo's request was granted and he was a. Mortgagor, pledgor, surety or guarantor agrees to
issued a Diamond (Edition) Diners Club Card. Danilo had be bound by the new obligation (Tolentino, Civil
incurred credit charged plus appropriate interest and Code of the Philippines, Vol. IV, 1999 ed, p. 395)
service charge. However, he defaulted in the payment of b. Stipulation made in favor of a third person such
this obligation. Was the upgrading a novation of the as stipulation pour atrui (Art. 1311), unless
original agreement governing the use of Danilo Alto's first beneficiary consents to the novation. (Art. 1296)
credit card, as to extinguish that obligation? 2. If old obligation is:
a. Void – novation is void (Art. 1298)
A: Yes. Novation, as a mode of extinguishing obligations, b. Voidable – novation is valid provided that the
may be done in two ways: by explicit declaration, or by annulment may be claimed only by the debtor or
material incompatibility. when ratification validates acts. (Art. 1298)
c. If the old obligation was subject to a suspensive
There is no doubt that the upgrading was a novation of the or resolutory condition, the new obligation shall
original agreement covering the first credit card issued to be under the same condition, unless it is
Danilo Alto, basically since it was committed with the intent otherwise stipulated. (Art. 1299)
of cancelling and replacing the said card. However, the 3. If old obligation is conditional and the new obligation
novation did not serve to release Jeanette from her surety is pure:
obligations because in the surety undertaking she expressly a. if resolutory and it occurred – old obligation
waived discharge in case of change or novation in the already extinguished; no new obligation since
agreement governing the use of the first credit card (Molino nothing to novate.
v. Security Diners International Corp., G.R. No. 136780, Aug. b. if suspensive and it did not occur – it is as if there
16, 2001). is no obligation; thus, there is nothing to novate

2013 GOLDEN NOTES
OBLIGATIONS
4. If the new obligation is: Note: Conventional subrogation of a third person
a. Void – original one shall subsist, unless the parties requires the consent of the original parties and of the
intended that the former relation should be third person. (Art. 1301)
extinguished in any event. (Art. 1297)
b. Voidable – novation can take place, except when 2. As to their extent
such new obligation is annulled. In such case, old a. Total subrogation – credits or rights of the
obligation shall subsist. creditor in the transaction are totally transferred
c. Pure obligation – conditions of old obligation to the third person.
deemed attached to the new, unless otherwise b. Partial subrogation – only part of the credit or
stipulated (Tolentino, Civil Code of the Philippines, rights of the creditor in the transaction are
Vol. IV, 1999 ed, p. 399) transferred to the third person.
d. Conditional obligation:
Note: A creditor, to whom partial payment has been
i. if resolutory– valid until the happening of the
made, may exercise his right for the remainder and he
condition (Art. 1181) shall be preferred to the person who has been
ii. if suspensive and did not materialize– no subrogated in his place in virtue of the partial payment
novation, old obligation is enforced (Art. of the same credit. (Art. 1304)
1181)
Q: When does legal subrogation exist?
Q: Will a contract of suretyship, which is secondary to a
principal obligation, be extinguished when novation A: It is presumed that there is legal subrogation:
occurs? 1. When a creditor pays another creditor who is
preferred, even without the debtor’s knowledge;
A: A surety is released from its obligation when there is a 2. When a third person, not interested in the
material alteration of the principal contract in connection obligation, pays with the express or tacit approval
with which the bond is given, such as a change which of the debtor
imposes a new obligation on the promising party, or which 3. When, even without the knowledge of the debtor,
takes away some obligation already imposed, or one which a person interested in the fulfillment of the
changes the legal effect of the original contract and not obligation pays, without prejudice to the effects
merely its form (Philippine Charter Insurance Corporation of confusion as to the latter’s share (Art. 1302)
vs. Petroleum Distributors & Service Corporation, G.R. No.
180898, April 18, 2012). Furthermore, a surety is not Note: GR: Legal subrogation is not presumed (Art. 1300)
released by a change in the contract, which does not have
the effect of making its obligation more onerous XPN: in cases expressly mentioned in the law - Art. 1302
(Stronghold Insurance Company, Inc. v. Tokyu Construction
Company, G.R. Nos. 158820-21 [2009]). As such, a contract Q: Distinguish conventional subrogation from assignment
is only extinguished by novation when there is a material of credit
alteration in the principal contract or if it has the effect of
making the obligation more onerous. A:
CONVENTIONAL ASSIGNMENT OF CREDITS OR
Q: What is subrogation? SUBROGATION RIGHTS
Governing law
A: It is the active subjective novation characterized by the Art. 1300-1304 Art. 1624-1627
transfer to a third person of all rights appertaining to the Effect
creditor in the transaction concerned including the right to The transfer of the credit or
proceed against the guarantors or possessors of mortgages right does not extinguish or
It extinguishes the
and similar others subject to any applicable legal provision modify the obligation. The
original obligation and
or any stipulation agreed upon by the parties in transferee becomes the new
creates a new one
conventional subrogation. creditor for the same
obligation.
Note: Whoever pays on behalf of the debtor without the Need for consent of debtor
knowledge or against the will of the latter, cannot compel the The consent of the debtor is not
creditor to subrogate him in his rights, such as those arising from a The consent of the
necessary. Notification is
mortgage, guaranty, or penalty (Art. 1237). debtor is necessary.
enough for the validity of the
(Art. 1301)
assignment. (Art. 1626)
Q: What are the kinds of subrogation?
Effectivity
A: Begins from the
Begins from notification of the
1. As to their creation moment of
debtor
a. Legal subrogation – constituted by virtue of a subrogation
law (Art. 1300; Art. 1302) Curability of defect or vice
b. Voluntary or conventional subrogation – The defect in the old The defect in the credit or rights
created by the parties by their voluntary obligation may be is not cured by its mere
agreement (Art. 1300) cured such that the assignment to a third person

CIVIL LAW
new obligation
becomes valid
Defense
Debtor cannot set up a
defense against the The debtor can still set up the
new creditor which he defense (available against the
could have availed old creditor) against the new
himself of against the creditor
old creditor
Note: In the law of subrogation, active subjective novation is

stricter than passive subjective novation. In the latter, the consent
of the old debtor is not even required in expromission.

2013 GOLDEN NOTES
CONTRACTS
CONTRACTS Requisites of stipulation pour atrui:
a. Stipulation in favor of a third person;
Q: What is a contract? b. Stipulation is just part and not the whole
obligations of the contract;
A: A contract is a meeting of minds between two persons c. Contracting parties must have clearly and
whereby one binds himself, with respect to the other, to deliberately conferred a favor upon third
give something or to render some service. (Art. 1305) person;
d. Third person must have communicated his
Q: What is the difference between an obligation and a acceptance; and
contract? e. Neither of the contracting parties bears the
legal representation of the third person.
A: While a contract is one of the sources of obligations, an (Young v. Court of Appeals G.R. No. 79518,
obligation is the legal tie or relations itself that exists after a Jan. 13, 1989)
contract has been entered into.
3. Third persons coming into possession of the
Hence, there can be no contract if there is no obligation. object of the contract creating real rights subject
But an obligation may exist without a contract. (De Leon, to the provisions of Mortgage Law and the Land
Obligations and Contracts, 2003 ed, p. 283-284) Registration Law. (Art. 1312)
4. Contracts entered into in fraud of creditors. (Art.
Q: State the characteristics of a contract. 1313)
5. When a third person induces a party to violate
A: ROMA the contract. (Art. 1314)
1. Relativity (Art. 1311) 6.
2. Obligatoriness and consensuality (Art. 1315) Note: This tort or wrongful conduct is known as
3. Mutuality (Art. 1308) “Interference with contractual relations.”
4. Autonomy (Art. 1306)
Requisites:
RELATIVITY OF CONTRACTS a. Existence of a valid contract;
b. Third person has knowledge of such
Q: What is the principle of relativity (principle of limited contract;
effectivity) of contracts? (2011 Bar Question) c. Third person interferes without justification.
A: GR: Contracts take effect only between the parties or Q: Fieldmen's Insurance issued, in favor of MYT, a
their assigns and heirs, except where the rights and common carrier, accident insurance policy. 50% of the
obligations arising from the contract are not transmissible premium was paid by the driver. The policy indicated that
by their nature, by stipulation, or by provision of law (Art. the Company will indemnify the driver of the vehicle or his
1311). representatives upon his death. While the policy was in
force, the taxicab driven by Carlito, met with an accident.
Res inter alios acta aliis neque nocet prodest (a thing done Carlito died. MYT and Carlito's parents filed a complaint
between others does not harm or benefit others) – a against the company to collect the proceeds of the policy.
contract can only obligate the parties who entered into it, Fieldmen’s admitted the existence thereof, but pleaded
or their successors who assumed their personalities, and lack of cause of action on the part of the parents. Decide.
that, concomitantly, a contract can neither favor nor
prejudice third persons. (Vitug, Civil Law. 2006 ed. p. 134) A: Carlito’s parents who, admittedly, are his sole heirs have
a direct cause of action against the Company. This is so
Note: With respect to the heir, he shall not be liable beyond the because pursuant to the stipulations, the Company will also
value of the property he received from the decedent. (Art. 1311) indemnify third parties. The policy under consideration is
typical of contracts pour autrui, this character being made
XPNs: more manifest by the fact that the deceased driver paid
1. Rights and obligations that are not transmissible 50% of the premiums (Coquia v. Fieldmen’s Insurance Co.,
by their nature, or by the stipulation or by Inc.,G.R. No. L-23276, Nov. 29, 1968).
provisions of law. (Art. 1311)
2. Stipulation pour autrui (stipulation in favor of a OBLIGATORY FORCE OF CONTRACTS
third person) – benefits clearly and deliberately
conferred by parties to a contract upon third Q: What is the obligatory force of contracts?
persons (Art. 1311) and which stipulation is
merely part of a contract entered into by the A: The parties are bound from the moment the contracts
parties, neither of whom acted as agents of the are perfected by mere consent not only from the fulfillment
third person and which favor can be demanded of what has been expressly stipulated but also to all the
by the third person if duly accepted by him before consequences which, according to their nature, may be in
it could be revoked. keeping with good faith, usage and law (Art. 1315).

CIVIL LAW
Note: Obligations arising from contracts have the force of law contract, while the other party merely affixes his signature
between the contracting parties and should be complied with in or his "adhesion" thereto, giving no room for negotiation
good faith (Art. 1159). and depriving the latter of the opportunity to bargain on
equal footing (Norton Resources and Development
Contracts shall be obligatory, in whatever form they may have
been entered into, provided all the essential requisites for validity Corporation v. All Asia Bank Corporation, G.R. No. 162523
are present (Art. 1356). [2009]).
When the provisions of a contract are valid, the parties are bound Q: Is contract of adhesion valid?
by such terms under the principle that a contract is the law
between the parties (P.L. UY Realty Corporation v. ALS A: Yes. It is not entirely prohibited since the one who
Management and Development Corporation and Antonio S. adheres to the contract is, in reality, free to reject it
Litonjua, G.R. No. 166642, October 24, 2012).
entirely, and if he adheres, he gives his consent (Premiere
Development Bank v. Central Surety & Insurance Company,
Q: Villamor borrowed a large amount from Borromeo, for
Inc., G.R. No. 176246 [2009]). However, it is void when the
which he mortgaged his property but defaulted. Borromeo
weaker party is imposed upon in dealing with the dominant
pressed him for settlement. The latter instead offered to
bargaining party, and its option is reduced to the
execute a promissory note containing a promise to pay his
alternative of “taking or leaving it,” completely depriving
debt as soon as he is able, even after 10 years and that he
such party of the opportunity to bargain on equal footing
waives his right to prescription. What are the effects of
(Keppel Cebu Shipyard, Inc. v. Pioneer Insurance and Surety
said stipulation to the action for collection filed by
Corporation, G.R. Nos. 180880-81 [2009]).
Borromeo?
Q: What is the rule in interpreting contracts of adhesion?
A: None. The rule is that a lawful promise made for a lawful
consideration is not invalid merely because an unlawful
A: In interpreting such contracts, however, courts are
promise was made at the same time and for the same
expected to observe greater vigilance in order to shield the
consideration. This rule applies although the invalidity is
unwary or weaker party from deceptive schemes contained
due to violation of a statutory provision, unless the statute
in ready-made covenants (Premiere Development Bank v.
expressly or by necessary implication declares the entire
Central Surety Insurance Company, Inc., G.R. No. 176246
contract void. Thus, even with such waiver of prescription,
[2009]). In case of doubt which will cause a great
considering that it was the intent of the parties to
imbalance of rights against one of the parties, the contract
effectuate the terms of the promissory note, there is no
shall be construed against the party who drafted the same
legal obstacle to the action for collection filed by Borromeo
(Magis Young Achiever’s Learning Center v. Manalo, G.R.
(Borromeo v. CA,G.R. No. L-22962, Sept. 28, 1972).
No. 178835 [2009])
Note: Where an agreement founded on a legal consideration
contains several promises, or a promise to do several things, and a Q: May a third person determine the performance of a
part only of the things to be done are illegal, the promises which contract? Does it automatically bind the contracting
can be separated, or the promise, so far as it can be separated, parties?
from the illegality, may be valid (Borromeo v. CA,G.R. No. L-22962,
Sept. 28, 1972). A: Yes. The determination of the performance may be left
to a third person. However, decision shall not be binding
MUTUALITY OF CONTRACTS until it has been known to both the contracting parties (Art.
1309). Moreover, the determination made shall not be
Q: What is the principle of mutuality of contracts? obligatory if it is evidently inequitable. In such case, the
courts shall decide what is equitable under the
A: The contract must bind both contracting parties and its circumstances (Art. 1310).
validity or compliance cannot be left to the will of one of
them (Art. 1308). AUTONOMY OF CONTRACTS
Note: A contract containing a condition whose efficacy or Q: What is the principle of autonomy of contracts?
fulfillment is dependent solely on the uncontrolled will of one of
the parties is void. (Garcia v. Rita, Gr. No. L-20175, October 30,
1967; PNB v. CA, G.R. No. 88880, April 30, 1991) A: It is the freedom of the parties to contract and includes
the freedom to stipulate provided the stipulations are not
However, the termination of the contract does not necessarily contrary to law, morals, good customs, public order or
require mutuality, and it can even be validly left to one party by public policy (Art. 1306).
agreement or under a resolutory facultative condition. (Vitug, Civil
Law. 2006 ed. p. 134) Note: Courts cannot make for the parties better or more equitable
agreements than they themselves have been satisfied to make, or
Q: What is a contract of adhesion? rewrite contracts because they operate harshly or inequitably as to
one of the parties, or alter them for the benefit of one party and to
A: A contract of adhesion is defined as one in which one of the detriment of the other, or by construction, relieve one of the
parties from terms which he voluntarily consented to, or impose
the parties imposes a ready-made form of contract, which
on him those which he did not. (Angel Bautista v. Court of Appeals,
the other party may accept or reject, but which the latter G.R. No. 123655, January 19, 2000)
cannot modify. One party prepares the stipulation in the

2013 GOLDEN NOTES
CONTRACTS
ESSENTIAL REQUISITES OF A CONTRACT Q: What are the requisites of a valid consent?
Q: State the essential elements of contracts. A: It should be:

1. Intelligent, or with an exact notion of the matter
A: COC to which it refers;
1. Consent;
2. Object or subject matter; and Note: Intelligence in consent is vitiated by error;
3. Cause or consideration. freedom by violence, intimidation or undue influence;
and spontaneity by fraud.
CONSENT
2. Free; and
Q: Define consent 3. Spontaneous.
A: It is the manifestation of the meeting of the offer and Q: What are the elements of a valid offer and acceptance?
the acceptance upon the thing and the cause which are to
constitute the contract (Art. 1319). A:
1. Definite – unequivocal
Note: Consent is essential to the existence of a contract; and 2. Intentional
where it is wanting, the contract is non-existent. 3. Complete – unconditional
Q: What are the elements of consent? Note: We follow the cognitive theory and not the mailbox theory.
Under our Civil Law, the offer and acceptance concur only when
the acceptance has reached the knowledge of the offeror, and not
A: LM-CR
at the time of sending the acceptance.
1. Legal capacity of the contracting parties;
Q: What are the requisites of a valid offer?
Note: Contracting parties must be juristic entities at
the time of the consummation of the contract. Stated
otherwise, to form a valid and legal agreement it is A:
necessary that there be a party capable of contracting 1. Must be certain (Art. 1345)
and a party capable of being contracted with. Hence, 2. May be made orally or in writing, unless the law
if any one party to a supposed contract was already prescribes a particular form
dead at the time of its execution, such contract is
undoubtedly simulated and false and, therefore, null Note: The person making the offer may fix the time, place and
and void by reason of its having been made after the manner of acceptance, all of which must be complied with. (Art.
death of the party who appears as one of the 1321)
contracting parties therein. The death of a person
terminates contractual capacity (Milagros De Belen
Q: When does offer become ineffective?
Vda. De Cabalu, et. al. v. SPS. Renato Dolores Tabu
and Laxamana, G.R. No. 188417, September 24,
2012). A:
1. Death, civil interdiction, insanity or insolvency of either
2. Manifestation of the conformity of the party before acceptance is conveyed
contracting parties; 2. Express or implied revocation of the offer by the
3. Parties’ Conformity to the object, cause, terms offeree
and condition of the contract must be intelligent, 3. Qualified or conditional acceptance of the offer, which
spontaneous and free from all vices of consent; becomes counter-offer
and 4. Subject matter becomes illegal or impossible before
4. The conformity must be Real. acceptance is communicated
5. Period given to the offerree to signify his acceptance
Q: The husband assumed sole administration of the has already lapsed
family’s mango plantation since his wife worked abroad.
Subsequently, without his wife’s knowledge, the husband Q: What is the rule on complex offer?
entered into an antichretic transaction with a company,
giving it possession and management of the plantation A:
with power to harvest and sell the fruits and to apply the 1. Offers are interrelated – contract is perfected if all the
proceeds to the payment of a loan he got. What is the offers are accepted
standing of the contract? (2011 Bar Question) 2. Offers are not interrelated – single acceptance of each
offer results in a perfected contract unless the offeror
A: It is considered a continuing offer by the parties; has made it clear that one is dependent upon the
perfected only upon the wife’s acceptance or the court’s other and acceptance of both is necessary.
authorization.

CIVIL LAW
Q: What is the rule on advertisements as offers? d. Contracts of deposit with the Postal Savings
Bank provided that the minor is over 7 years
A: of age
1. Business advertisements – not a definite offer, but e. Upon reaching age of majority – they ratify
mere invitation to make an offer, unless it appears the same
otherwise (Art. 1325)
2. Advertisement for bidders – simply invitation to make Q: What are the vices of consent?
proposals and advertiser is not bound to accept the
highest or lowest bidder, unless the contrary appears. A: MIVUF
(Art. 1326) 1. Mistake
2. Intimidation
Q: What are the requisites of a valid acceptance? 3. Violence
4. Undue influence
A: 5. Fraud
1. Must be absolute; a qualified acceptance constitutes a
counter-offer (Art. 1319) Q: What kind of mistake that will be considered as a vice
2. No specified form but when the offeror specifies a of consent?
particular form, such must be complied with.
A: GR: Mistake as a vice of consent refers to mistake of
Note: Offer or acceptance, or both, expressed in electronic form, is facts and not of law.
valid, unless otherwise agreed by the parties (electronic contracts).
XPN: When mistake of law involves mutual error as to
Q: What is the period for acceptance? the legal effect of an agreement when the real
purpose of the parties is frustrated (Art. 1334)
A:
1. Stated fixed period in the offer Requisites:
a. Must be made within the period given by the 1. Mistake must be with respect to the legal effect of
offeror. the agreement;
b. As to withdrawal of the offer: 2. It must be mutual; and
GR: It can be made at any time before 3. Real purpose of the parties must have been
acceptance is made, by communicating such frustrated.
withdrawal.
Q: What are the kinds of mistakes of fact which vitiate
XPN: When the option is founded upon a consent?
consideration, as something paid or promised
since partial payment of the purchase price is A:
considered as proof of the perfection of the 1. Error in Re (mistake as to object)
contract. 1. Error in Corpore (mistake as to the
identity of the thing)
2. No stated fixed period 2. Error in Substantia (mistake as to the
a. Offer is made to a person present – acceptance substance of the thing)
must be made immediately. 3. Error in Quantitae (mistake as to the
b. Offer is made to a person absent – acceptance quantity of the thing)
may be made within such time that, under 4. Mistake as to the conditions of the
normal circumstances, an answer can be received thing, provided such conditions have
from him. principally moved one or both parties to
enter into the contract
Q: Who are the persons incapacitated to give consent?
2. Error in Persona (Mistake as to person)
A: DIM
1. Deaf-mutes who do not know how to read and Mistake as to the identity or qualifications of one
write (illiterates) of the parties will vitiate consent only when such
2. Insane or demented persons, unless the contract identity or qualifications have been the principal
was entered into during a lucid interval cause of the contract. For mistake as to the
3. Minors (Art. 1327) except: qualification of one of the parties to vitiate
a. Contracts for necessaries (Art. 1489) consent, two requisites must concur:
b. Contracts by guardians or legal a. The mistake must be either with regard
representatives and the court having to the identity or with regard to the
jurisdiction had approved the same qualification of one of the contracting
c. When there is active misrepresentation parties; and
on the part of the minor (minor is estopped) b. The identity or qualification must have
been the principal consideration for the
celebration of the contract (The Roman

2013 GOLDEN NOTES
CONTRACTS
Catholic Church v. Regino Pante, G.R. Q: Is a threat to enforce a valid claim an intimidation?
No. 174118, April 11, 2012)
A: No. A threat to enforce a just or legal claim through a
Q: When will mistake invalidate consent? competent authority does not amount to intimidation nor
vitiate consent (Art. 1335).
A: Mistake, in order to invalidate consent, should refer to
the substance of the thing which is the object of the Q: What are the requisites of violence?
contract, or to those conditions which have principally
moved one or both parties to enter into the contract A:
(Leonardo v. CA, G.R. No. 125485, Sept. 13, 2004). 1. Physical force employed must be serious or irresistible;
and
Q: Leonardo is the only legitimate child of the late spouses 2. The determining cause for the party upon whom it is
Tomasina and Balbino. She only finished Grade three and employed in entering into the contract.
did not understand English. The Sebastians, on the other
hand, are illegitimate children. She filed an action to Q: May a contract be annulled if the violence or
declare the nullity of the extrajudicial settlement of the intimidation was employed by third person?
estate of her parents, which she was made to sign without
the contents thereof, which were in English, explained to A: Yes. Violence or intimidation shall annul the obligation,
her. She claims that her consent was vitiated because she although it may have been employed by a third person who
was deceived into signing the extrajudicial settlement. Is did not take part in the contract (Art. 1336)
the extra-judicial settlement of estate of Tomasina valid?
Q: When does undue influence vitiate consent?
A: No. When one of the parties is unable to read, or if the
contract is in a language not understood by him, and A: There is undue influence when a person takes improper
mistake or fraud is alleged, the person enforcing the advantage of his power over the will of another, depriving
contract must show that the terms thereof have been fully the latter of a reasonable freedom of choice (Art. 1337)
explained to the former. (Art. 1332) Leonardo was not in a
position to give her free, voluntary and spontaneous Q: What are the circumstances to be considered for the
consent without having the document, which was in existence of undue influence?
English, explained to her. Therefore, the consent of
Leonardo was invalidated by a substantial mistake or error, A:
rendering the agreement voidable. The extrajudicial 1. Confidential, family, spiritual and other relations
partition between the Sebastians and Leonardo should be between the parties
annulled and set aside on the ground of mistake. (Leonardo 2. Mental weakness
v. CA, G.R. No. 125485, Sept. 13, 2004) 3. Ignorance
4. Financial distress (Art. 1337)
Q: What are the requisites of intimidation?
Note: The enumeration is not exclusive. Moral dependence,
A: indigence, mental weakness, tender age or other handicap are
1. One of the parties is compelled to give his some of the circumstances to consider undue influence.
consent by a reasonable and well-grounded fear
The test to determine whether or not there is undue influence
of an evil; which will invalidate a contract is to determine whether or not the
2. The evil must be imminent and grave; influence exerted has so overpowered and subjugated the mind of
3. It must be unjust; and the contracting party as to destroy his free agency, making him
4. The evil must be the determining cause for the express the will of another rather than his own. (Jurado, Comments
party upon whom it is employed in entering into and Jurisprudence on Obligations and Contracts. 2011 ed. pp. 443-
the contract. (Art. 1335) 444)
Note: To determine the degree of the intimidation, the age, sex Q: When does fraud vitiate consent?
and condition of the person shall be borne in mind. (Art. 1335)
A: There is fraud when through the insidious words or
Q: What is the effect on the validity of a contract if machinations of one of the contracting parties, the other is
consent is reluctant? induce to enter into a contract which, without them, he
would not have agreed to (Art. 1338).
A: A contract is valid even though one of the parties
entered into it against his wishes and desires or even Note: Insidious words refers to a deceitful scheme or plot with an
against his better judgment. Contracts are also valid even evil design, or a fraudulent purpose (Pineda, Obligations and
though they are entered into by one of the parties without Contracts. 2000 ed. p. 414).
hope of advantage or profit (Martinez v. Hongkong and
Shanghai Banking Corp., GR No. L-5496, Feb. 19, 1910) Q: What are the kinds of fraud?
A:
1. Fraud in the perfection of the contract

CIVIL LAW
a. Causal fraud (dolo causante) Q: What are the acts not considered fraudulent?
b. Incidental fraud (dolo incidente)
A:
2. Fraud in the performance of an obligation (Art. 1170) 1. The usual exaggerations in trade, the other party had
an opportunity to know the facts; are not themselves
Requisites: fraudulent (Art. 1340);
a. Fraud, insidious words or machinations must have 2. A mere expression of an opinion does not signify
been employed by one of the contracting parties; fraud, unless made by an expert and the other party
b. It must have been material and serious; had relied on the former’s special knowledge (Art.
c. It induced the other party to enter into a 1341);
contract; 3. Misrepresentation does not vitiate consent, unless
d. It must be a deliberate intent to deceive or and such misrepresentation has created substantial
induce; mistake and the same is mutual (Art. 1342); and
e. Should not have been employed by both 4. Misrepresentation made in good faith is not
contracting parties or by third persons; fraudulent but may constitute error (Art. 1337).
f. The victim suffered damage or injury.
Q: What are the kinds of simulation of contract?
Q: Distinguish dolo causante from dolo incidente
A:
A: 1. Absolute – the contracting parties do not intend to be
DOLO CAUSANTE DOLO INCIDENTE bound by the contract at all, thus the contract is void.
(ART. 1338) (ART. 1344) (Art. 1345; Art. 1346)
Refers to fraud which is Refers to fraud which is not 2. Relative – the contracting parties conceal their true
serious in character serious in character agreement; (Art. 1345) binds the parties to their real
It is the efficient cause It is not the efficient cause agreement when it does not prejudice third persons or
which induces the party to which induces the party to is not intended for any purpose contrary to law,
enter into a contract enter into a contract morals, good customs, public order or public policy.
Renders the contract Does not affect the validity Art. 1346) If the concealed contract is lawful, it is
voidable of the contract absolutely enforceable, provided it has all the essential
Contract remains valid. requisites: consent, object, and cause. (Art. 1345; Art.
Annulment with damages Remedy is claim for 1346)
damages.
As to third persons without notice, the apparent
Q: Santos’ lease contract was about to expire but it was contract is valid for purposes beneficial to them. As to
extended and he continued to occupy the leased premises third persons with notice of the simulation, they
beyond the extended term. Samson offered to buy Santos’ acquire no better right to the simulated contract than
store and his right to the lease. Santos stated that the the original parties to the same.
lease contract between him and the lessor was impliedly
renewed and that formal renewal thereof would be made Note: If the parties state a false cause in the contract to
conceal their real agreement, the contract is only relatively
upon the arrival of a certain Tanya Madrigal, based on the
simulated and the parties are still bound by their real
letter to him given by the lessor. When Samson occupied agreement. Hence, where the essential requisites of a contract
the premises, he was forced to vacate for Santos’ failure are present and the simulation refers only to the content or
to renew his lease. He filed an action for damages against terms of the contract, the agreement is absolutely binding and
Santos for fraud and bad faith claiming that the enforceable between the parties and their successors in
misrepresentation induced him to purchase the store and interest.
the leasehold right. Decide.
In absolute simulation, there is a colorable contract but it has
no substance as the parties have no intention to be bound by
A: No, Santos was not guilty of fraud nor bad faith in
it. The main characteristic of an absolute simulation is that the
claiming that there was implied renewal of his contract of apparent contract is not really desired or intended to produce
lease with his lessor. The letter given by the lessor led legal effect or in any way alter the juridical situation of the
Santos to believe and conclude that his lease contract was parties. As a result, an absolutely simulated or fictitious
impliedly renewed and that formal renewal thereof would contract is void, and the parties may recover from each other
be made upon the arrival of Tanya Madrigal. Thus, from the what they may have given under the contract. (Heirs of Dr.
start, it was known to both parties that, insofar as the Mario S. Intac and Angelina Mendoza-Intac v. CA, G.R. No.
agreement regarding the transfer of Santos’ leasehold right 173211, October 11, 2012)
to Samson was concerned, the object thereof relates to a
future right. It is a conditional contract, the efficacy of Q: Tiro is a holder of an ordinary timber license issued by
which depends upon an expectancy the formal renewal of the Bureau of Forestry. He executed a deed of assignment
the lease contract between Santos and lessor. The efficacy in favor of the Javiers. At the time the said deed of
of the contract between the parties was thus made assignment was executed, Tiro had a pending application
dependent upon the happening of this suspensive for an additional forest concession. Hence, they entered
condition. (Samson v. CA, G.R. No. 108245, Nov. 25, 1994) into another agreement.

2013 GOLDEN NOTES
CONTRACTS
Afterwards, the Javiers, now acting as timber license 3. Future inheritance, except in cases expressly
holders by virtue of the deed of assignment entered into a authorized by law;
forest consolidation agreement with other ordinary 4. Services which are contrary to law, morals, good
timber license holders. For failure of the Javiers to pay the customs, public order or public policy;
balance due under the two deeds of assignment, Tiro filed 5. Impossible things or services; and
an action against them. Are the deeds of assignment null 6. Objects which are not possible of determination
and void for total absence of consideration and non- as to their kind.
fulfillment of the conditions?
CAUSE
A: The contemporaneous and subsequent acts of Tiro and
the Javiers reveal that the cause stated in the first deed of Q: Define cause
assignment is false. It is settled that the previous and
simultaneous and subsequent acts of the parties are A: It is the essential and impelling reason why a party
properly cognizable indicia of their true intention. Where assumes an obligation. (Manresa)
the parties to a contract have given it a practical
construction by their conduct as by acts in partial Q: What are the requisites of a cause?
performance, such construction may be considered by the
court in construing the contract, determining its meaning A: It must:
and ascertaining the mutual intention of the parties at the 1. Exist;
time of contracting. The first deed of assignment is a 2. Be true; and
relatively simulated contract which states a false cause or 3. Be licit.
consideration, or one where the parties conceal their true
agreement. A contract with a false consideration is not null Q: What are the two presumptions in contracts as to
and void per se. Under Article 1346 of the Civil Code, a cause?
relatively simulated contract, when it does not prejudice a
third person and is not intended for any purpose contrary A:
to law, morals, good customs, public order or public policy 1. Every contract is presumed to have a cause; and
binds the parties to their real agreement. (Javier v. CA, G.R. 2. The cause is lawful.
No. L-48194, Mar. 15, 1990)
Q: What are the kinds of causes?
OBJECT
A:
Q: What is an object? 1. Cause of onerous contracts – the prestation or promise
of a thing or service by the other.
A: It is the subject matter of the contract. It can be a thing, 2. Cause of remuneratory contracts– the service or
right or service arising from a contract. benefit remunerated.
3. Cause of gratuitous contracts – the mere liberality of
Q: What are the requisites of an object? the donor or benefactor.
4. Accessory – identical with cause of principal contract,
A: DELiCT the loan which it derived its life and existence (e.g.:
1. Determinate as to kind (even if not determinate, mortgage or pledge)
provided it is possible to determine the same
without the need of a new contract); Q: What is the meaning of complementary contracts
2. Existing or the potentiality to exist subsequent to construed together doctrine?
the contract;
3. Must be Licit; A: It means that an accessory contract must be interpreted
4. Within the Commerce of man; and with its principal contract. The provisions must be
5. Transmissible. construed together to arrive at their true meaning. Certain
stipulations cannot be segregated and then made to
Note: The most evident and fundamental requisite in order that a control. This doctrine closely adheres to the spirit of Art.
thing, right or service may be the object of a contract, is that it 1374 of the Civil Code which states that the various
should be in existence at the moment of the celebration of the
stipulations of a contract shall be interpreted together,
contract, or at least, it can exist subsequently or in the future.
attributing to the doubtful ones that sense which may
result from all of them taken jointly (Spouses Rigor v.
Q: What are the things which can be the object of
Consolidated OrixLeasing and Finance Corporation, G.R. No.
contracts?
136423. August 20, 2002).
A: GR: All things or services may be the object of contracts.
Q: Distinguish cause from motive.
XPNs:
A:
1. Things outside the commerce of men (Art. 1347);
2. Intransmissible rights; CAUSE MOTIVE
Direct and most
Indirect or remote reasons
proximate reason of a

CIVIL LAW
contract According to their relation to other contracts:

Objective and juridical Psychological or purely a. Preparatory Contracts – are those which
reason of contract personal reason have for their object the establishment of a
Legality or illegality of Legality or illegality of condition in law which is necessary as a
cause affects the motive does not affect the preliminary step towards the celebration of
existence or validity of existence or validity of another subequent contract. (e.g.
the contract contract Partnership, Agency)
Cause is always the Motive differs for each b. Principal Contracts – are those which can
same for each contracting party subsist independently from other contracts
contracting party (e.g. Sale, Lease)
c. Accessory Contracts – those which can exist
Q: What is the effect of the error of cause on contracts? only as a consuquence of, or in relation with,
another prior contract. (e.g. Pledge,
A: Mortgage)
1. Absence of cause (want of cause; there is total lack or
absence of cause) – Confers no right and produces no According to their perfection:
legal effect. a. Consensual Contracts - are those which are
2. Failure of cause - Does not render the contract void perfected by mere agreement or by the
3. Illegality of cause (the cause is contrary to law, morals, meeting of the minds of the parties. (e.g.
good customs, public order and public policy)– Sale, Lease)
Contract is null and void. b. Real Contracts – are those which require for
4. Falsity of cause (the cause is stated but the cause is their perfection both the consent of the
not true) – Contract is void; unless the parties show parties and the delivery of the object by one
that there is another cause which is true and lawful. party to the other. (e.g. Deposit, Pledge)
5. Lesion or inadequacy of cause –Does not invalidate the
contract, unless: According to their form:
a. there is fraud, mistake, or undue influence; a. Common or Informal Contracts – are those which
b. when the parties intended a donation or some require no particular form. (e.g. Loan)
other contract; or b. Special or Formal Contracts – are those which
c. in cases specified by law (e.g. contracts entered require a particular form. (e.g. Donations, Chattel
by guardian when ward suffers lesion of more Mortgage)
than 25% and with court approval, otherwise, if
there is no approval, the contract is void According to their purpose:
regardless of the amount of lesion) a. Transfer of Ownership (e.g. Sale)
b. Conveyance of Use (e.g. Usufruct, Commodatum)
KINDS OF CONTRACTS c. Rendition of Services (e.g. Agency)
Q: What are the kinds of contracts? According to the nature of the vinculum which they
produce:
A: a. Unilateral Contracts – are those which give rise to
1. Consensual contracts which are perfected by the mere an obligation only to one of the parties. (e.g.
meeting of the minds of the parties. (Art. 1305) Commodatum)
2. Real contracts that require delivery for perfection – b. Bilateral Contracts – are those which give rise to
creation of real rights over immovable property must reciprocal obligations for both parties. (e.g. Sale)
be written.
3. Solemn contracts– contracts which must appear in According to their cause:
writing, such as: a. Onerous (e.g. Sale)
a. Donations of real estate or of movables if the b. Gratuitous (e.g. Commodatum)
value exceeds P5,000;
b. Partnership to which immovables are According to the risks involved:
contributed; a. Commutative Contracts – are those where each
c. Contract of antichresis – requires the of the parties acquire an equivalent of his
amount of principal and interest be prestation and such equivalent is pecuniarily
specified; appreciable and already determined from the
d. Sale of piece of land or interest therein is moment of the perfection of the contract. (e.g.
through an agent; Lease)
e. Stipulation to charge interest; b. Aleatory Contracts – are those which are
f. Stipulation limiting common carrier's duty of dependent upon the happening of an uncertain
extraordinary diligence to ordinary diligence; event, thus, charging the parties with the risk of
g. Chattel mortgage; or loss or gain. (e.g. Insurance)
h. Transfer of large cattle (Sec. 22, Act No.
1147; Art. 1581); According to their names or norms regulating them:

2013 GOLDEN NOTES
CONTRACTS
a. Nominate Contracts – are those which have their FORMALITY
own name and individuality, and are regulated by
provisions of law. (e.g. Sale) Q: What are rules on the form of contracts?
b. Innominate Contracts – are those which lack
name or individuality, and are not regulated by A:
special provisions of law. 1. Contracts shall be obligatory, in whatever form they
(Jurado, Comments and Jurisprudence on Obligations and may have been entered into, provided all essential
Contracts. 2011 ed. pp. 359-361) requisites for their validity are present.
2. Contracts must be in a certain form –when the law
Q: What are the formalities required in the following requires that a contract be in some form to be:
contracts? a. valid;
b. enforceable; or
A: c. for the convenience of the parties.
1. Donations: 3. The parties may compel each other to reduce the
a. Personal property- if value exceeds 5,000, the verbal agreement into writing.
donation and acceptance must both be written.
(Art. 748) Note: GR: Form is not required in consensual contracts.
b. Real property:
i. donation must be in a public instrument, XPNs: When the law requires a contract be in writing for its:
1. validity (formal contracts); or
specifying therein the property donated and
2. enforceability (under Statute of Frauds).
value of charges which donee must satisfy.
ii. acceptance must be written, either in the
Q: What are the contracts which must appear in writing to
same deed of donation or in a separate
be valid?
instrument.
iii. if acceptance is in a separate instrument, the
A:
donor shall be notified thereof in authentic
1. Donation of personal property whose value
form, and this step shall be noted in both
exceeds five thousand pesos (Art. 748) – the
instruments. (Art. 749)
donation and acceptance must be in writing
2. Sale of a piece of land or any interest therein
2. Partnership where real property contributed:
through an agent (Art. 1874) – the authority of
a. there must be a public instrument regarding
the agent shall appear in writing
the partnership;
3. Agreements regarding payment of interest in
b. the inventory of the realty must be made,
contracts of loan (Art. 1956)
signed by the parties and attached to the
4. Antichresis (Art. 2134) – the amount of the
public instrument. (Art. 1773)
principal and the interest shall be specified in
writing (Jurado, Comments and Jurisprudence on
3. Antichresis - the amount of the principal and interest
Obligations and Contracts. 2011 ed. p. 481)
must be in writing. (Art. 2134)
Q: What are the contracts which must appear in a public
4. Agency to sell real property or an interest therein -
document?
authority of the agent must be in writing. (Art. 1874)
A:
5. Stipulation to charge interest - interest must be
1. Donation of real properties (Art. 719);
stipulated in writing. (Art. 1956)
2. Partnership where immoveable property or real rights
are contributed to the common fund (Arts. 1171 &
6. Stipulation limiting common carrier's duty of
1773);
extraordinary diligence to ordinary diligence:
3. Acts and contracts which have for their object the
a. must be in writing, signed by shipper or owner
creation, transmission, modification or extinguishment
b. supported by valuable consideration other than
of real rights over immovable property; sales of real
the service rendered by the comon carrier
property or of an interest therein is governed by Arts.
c. reasonable, just and not contrary to public policy.
1403, No. 2, and 1405 [Art. 1358 (1)];
(Art. 1744)
4. The cession, repudiation or renunciation of hereditary
rights or of those of the conjugal partnership of gains
7. Chattel mortgage - personal property must be
[Art. 1358 (2)]
recorded in the Chattel Mortgage Register. (Art. 2140)
5. The power to administer property or any other power
which has for its object an act appearing or which
should appear in a public document or should
prejudice a third person [Art. 1358 (3)];
6. The cession of actions or rights proceeding from an act
appearing in a public document [Art. 1358 (4)].

CIVIL LAW
Q: What are contracts that must be registered? that the property is sold absolutely or with a right of
repurchase (Art. 1365).
A:
1. Chattel mortgages (Art. 2140) Q: In what cases is reformation of instruments not
allowed?
Note: In accordance with Article 2125 of the Civil Code, an
unregistered chattel mortgage is a valid and binding between A:
the parties because registration is necessary only for the 1. Simple, unconditional donations inter vivos
purpose of binding third persons (Filipinas Marble
2. Wills
Corporation v. Intermediate Appellate Court, G.R. No. L-
68010, 1986). 3. When the agreement is void
4. When an action to enforce the instrument is filed
2. Sale or transfer of large cattle (Cattle Registration Act) (estoppel).
REFORMATION Q: What is the prescriptive period in reformation of

instruments?
Q: What is reformation of instruments?
A: 10 years from the date of the execution of the
A: It is a remedy to conform to the real intention of the instrument (Pineda, Obligations and Contracts, 2000 ed.,
parties due to mistake, fraud, inequitable conduct, accident p.483)
(Art. 1359).
Q: Who may ask for the reformation of an instrument?
Note: Reformation is based on justice and equity (Pineda,
Obligations and Contracts, 2000 ed., p.469). A: It may be ordered at the instance of:
1. if the mistake is mutual – either party or his
Q: What are the requisites in reformation of instruments? successors in interest; otherwise;
2. upon petition of the injured party; or
A: 3. his heirs and assigns.
1. Meeting of the minds to the contract
2. True intention is not expressed in the instrument Note: When one of the parties has brought an action to enforce
3. By reason of: (MARFI) the instrument, no subsequent reformation can be asked
(estoppel) (Art. 1367)
a. Mistake,
b. Accident,
Q: In case of reformation of contracts, is the prescription
c. Relative simulation,
period in bringing an action for reformation run from the
d. Fraud, or
time the contract became disadvantageous to one party?
e. Inequitable conduct
f. Clear and convincing proof of MARFI.
A: In reformation of contracts, what is reformed is not the
Note: When there is no meeting of the minds, the proper remedy contract itself, but the instrument embodying the contract.
is annulment and not reformation (Pineda, Obligations and It follows that whether the contract is disadvantageous or
Contracts, 2000 ed., p.471). not is irrelevant to reformation and therefore, cannot be an
element in the determination of the period for prescription
Q: In what cases is reformation of instrument allowed? of the action to reform. (Pineda, Obligations and Contracts,
2000 ed., p.469)
A:
1. When a mutual mistake of the parties causes the
failure of the instrument to disclose their agreement.
(Art. 1361)
2. When one party was mistaken and the other acted
fraudulently or inequitably in such a way that the
instrument does not show their true intention, the
former may ask for the reformation of the instrument
(Art. 1362)
3. When one party was mistaken and the other knew or
believed that the instrument did not state their real
agreement, but concealed that fact from the former
(Art. 1363).
4. When through the ignorance, lack of skill, negligence
or bad faith on the part of the person drafting the
instrument or of the clerk or typist, the instrument
does not express the true intention of the parties (Art.
1364).
5. If the parties agree upon the mortgage or pledge of
real or personal property, but the instrument states

2013 GOLDEN NOTES
CONTRACTS
DEFECTIVE CONTRACTS
RESCISSIBLE VOIDABLE UNENFORCEABLE VOID INEXISTENT

Defect is cause by
Defect is caused by
Defect is caused by lack lack of the essential
injury/damage either Defect is caused by Defect is caused by
of form, authority or requisites of contract
to one of the parties or vices of consent illegality
rd capacity of both parties (consent, object,
to a 3 person
cause)
Not Curable Not curable by
Curable by prescription Curable by prescription Curable by prescription
prescription prescription
Binding unless the
Binding unless
Binding until annulled defect is raised against Not binding Not binding
rescinded
enforcement
Note: Inexistent contracts are not perfected contracts. Rescissible, voidable, unenforceable and void contracts are perfected contracts.
Rescissible, voidable, and unenforceable contracts are valid and binding unless otherwise declared by the court upon a petition commenced for
such purpose or upon being raised as a defense. Rescissible and voidable contracts are valid, binding and enforceable unless otherwise declared
by the court upon a petition commenced for such purpose or upon being raised as a defense.
BASIC DISTINCTIONS
VOID and
BASIS RESCISSIBLE VOIDALBE UNENFORCEABLE
INEXISTENT
Illegality (void) or
Incapacity of one of Entered without authority or in excess
Economic damage or absence of any of
Origin of the parties to give thereof; non-compliance with Statute of
lesion; declaration essential requisites
defect consent or vitiated Frauds; incapacity of both parties to give
by law of a contract
consent consent
(inexistent)
rd
Damage/ One of parties or 3 To other party not
Not necessary Not necessary
prejudice person necessary
Valid & legally Valid & legally Inoperative until ratified; not
Legal effect enforceable until enforceable until enforceable in court without proper None
judicially rescinded judicially annulled ratification
Rescission or Annulment of Declaration of nullity
Remedy/ action Just a personal defense
rescissory action contract of contract
Must be a direct Attacked directly or
Nature of action Direct action needed Indirect attack allowed
action indirectly
Generally rd
Contracting party; 3 persons cannot
Who can file the contracting party;
XPN: CRs who are rd Must be contracting party unless interest are
action XPN: 3 person
defrauded directly affected
prejudiced
Susceptibility of Yes, but not of
Yes Yes No
ratification ratification proper
Action for
Action for Action for recovery; specific
Action for rescission declaration of nullity
Susceptibility annulment performance or damages prescribes (10
prescribes after 4 or putting of defense
prescription prescribes after 4 years if basis written contract; 6 years if
years of nullity does not
years unwritten)
prescribe
RESCISSIBLE CONTRACTS Q: What are the characteristics of rescissible contract?
Q: What are rescissible contracts? A:

1. It has all the elements of a valid contract;
A: Those contracts validly agreed upon but have caused a 2. It has the defect consisting in an injury to one of the
particular economic damage or lesion either to one of the contracting parties or third person,
parties or to a third person and which may be set aside
even if valid. It may be set aside in whole or in part, to the generally in the form of economic damage or lesion,
extent of the damage caused (Art. 1381) fraud, and alienation of the property.
3. It is valid and effective until rescinded;
Those contracts have all the essential requisites but may be 4. It can be attacked only directly.
set aside by reason of damage or injury to third pesons. 5. It is susceptible of convalidation only by prescription
(Pineda, Obligations and Contracts, 2000 ed., p. 513)

CIVIL LAW
6. Transfer is made between father and son, where there
Q: Which contracts are rescissible? are present some or any of the above circumstances;
and
A: 7. Failure of the vendee to take exclusive possession of
1. Entered into by persons exercising fiduciary capacity: the property. (Oria v. McMicking, 21 Phil. 243)
a. Entered into by guardians whenever the wards
whom they represent suffer lesion by more than Q: Distinguish resolution from rescission.
¼ of value of the property [Art. 1381(1)];
A:
Note: Contracts entered by a guardian over the RESOLUTION RESCISSION
property of his ward, without court approval is void, not (ART. 1191) (ARTICLE 1381)
merely rescissible regardless of the existence of lesion
Both presuppose contracts validly entered into and
subsisting and both require mutual restitution when proper
b. Agreed upon in representation of absentees, if
Nature
absentee suffers lesion by more than ¼ of value
Principal action. retaliatory
of property [Art. 1381(2)]; Subsidiary remedy
in character
c. Contracts where rescission is based on fraud
Grounds for Rescission
committed on creditor and cannot collect the
claim due (accion pauliana) [Art. 1381(3)]; 5 grounds under Art. 1381.
d. Objects of litigation; contract entered into by Only ground is non- (lesions or fraud of creditors)
defendant without knowledge or approval of performance of obligation Non-performance is not
litigants or judicial authority [Art. 1381(4)]; important
e. Payment by an insolvent – on debts which are not Applicability
yet due; prejudices claim of others; (Art. 1382) Applies only to reciprocal Applies to both unilateral
f. Provided for by law (Arts. 1526, 1534, 1538, 1539, obligations and reciprocal obligations
1542, 1556, 1560, 1567 & 1659) Person who can Initiate the Action
Even third persons
Only the injured party who is
2. Payments made in state of insolvency: prejudiced by the contract
a party to the contract
a. Plaintiff has no other means to maintain may bring the action
reparation; Fixing of Period by the Court
b. Plaintiff must be able to return whatever he may Court may fix a period or
be obliged to return due to rescission; grant extension of time for
c. The things must not have been passed to third the fulfillment of the Court cannot grant
persons in good faith; obligation when there is extension of time
d. It must be made within 4 yrs. sufficient reason to justify
such extension
Q: What are the requisites before a contract entered into Purpose
in fraud of creditors may be rescinded? Reparation for damage or
injury, allowing partial
A: rescission of contract
Cancellation of the contract
1. There must be credit existing prior to the celebration (Pineda, Obligations and
of the contract; Contracts, 2000 ed., pp. 514-
2. There must be fraud, or at least, the intent to commit 515)
fraud to the prejudice of the creditor seeking
rescission; Note: While Article 1191 uses the term “rescission,” the original
3. The creditor cannot in any legal manner collect his term which was used in the old Civil Code, from which the article
credit (subsidiary character of rescission); and was based, was “resolution.” (Ong v. CA, G.R. No. 97347, July 6,
1999)
4. The object of the contract must not be legally in
possession of a third person in good faith.
Q: What is the obligation created by the rescission of the
Q: What are the badges of fraud attending sales, as contract?
determined by the courts?
A: Mutual restitution of things which are the objects of the
contract and their fruits and of the price with interest.
A:
1. Consideration of the conveyance is inadequate or
Q: When is mutual restitution not applicable?
fictitious;
2. Transfer was made by a debtor after a suit has been
begun and while it is pending against him A:
1. Creditor did not receive anything from contract; or
3. Sale upon credit by an insolvent debtor;
4. The presence of evidence of large indebtedness or 2. Thing already in possession of third persons in good
faith; subject to indemnity only, if there are two or
complete insolvency of the debtor;
5. Transfer of all his property by a debtor when he is more alienations – liability of first infractor.
financially embarrassed or insolvent;

2013 GOLDEN NOTES
CONTRACTS
Note: Rescission is possible only when the person demanding rescission creates the obligation to return the things which
rescission can return whatever he may be obliged to restore. A were the object of the contract together with their fruits
court of equity will not rescind a contract unless there is and interest. Therefore, by virtue of the extrajudicial
restitution, that is, the parties are restored to the status quo ante
rescission of the contract to sell by Goldenrod without
(Article 1385).
opposition from Barretto Realty, which in turn, sold the
property to other persons, Barretto Realty, had the
Q: Reyes (seller) and Lim (buyer) entered into a contract
obligation to return the earnest money which formed part
to sell a parcel of land. Harrison Lumber occupied the
of the purchase price plus legal interest from the date it
property as lessee. Reyes offered to return the P10 million
received notice of rescission. It would be most inequitable
downpayment to Lim because Reyes was having problems
if Barretto Realty would be allowed to retain the money at
in removing the lessee from the property. Lim rejected
the same time appropriate the proceeds of the second sale
Reyes’ offer. Lim learned that Reyes had already sold the
made to another. (Goldenrod, Inc. v. CA, G.R. No. 126812,
property to another.
Nov. 24, 1998)
Both Reyes and Lim are now seeking rescission of the
What is the prescriptive period of action for rescission?
contract to sell. However, Reyes does not want to deposit
the 10M to the court because according to him, he has the
A:
“right to use, possess and enjoy” of the money as its
1. Under Art. 1381, no.1 – within 4 years from the time
owner before the contract to sell is rescinded. Is Reyes’
the termination of the incapacity of the ward;
contention correct?
2. Under Art. 1381, no. 2- within 4 years from the time
the domicile of the absentee is known; or
A: No. There is also no plausible or justifiable reason for
3. Under Art. 1381, nos. 3 & 4 & Art. 1382 – within 4
Reyes to object to the deposit of the P10 million
years from the time of the discovery of fraud.
downpayment in court. The contract to sell can no longer
be enforced because Reyes himself subsequently sold the
VOIDABLE CONTRACTS
property. Both Lim and Reyes are seeking for rescission of
the contract. By seeking rescission, a seller necessarily
Q: What are voidable contracts?
offers to return what he has received from the buyer. Such
a seller may not take back his offer if the court deems it
A: Voidable contracts are those where consent is vitiated
equitable, to prevent unjust enrichment and ensure
either by the incapacity of one of the contracting parties or
restitution, to put the money in judicial deposit.
by mistake, violence, intimidation, undue influence or
Note: In this case, it was just, equitable and proper for the trial fraud. These contracts are binding, unless they are
court to order the deposit of the down payment to prevent unjust annulled by a proper action in court. It is susceptible of
enrichment by Reyes at the expense of Lim. Depositing the down ratification. (Art. 1390)
payment in court ensure its restitution to its rightful owner. Lim, on
the other hand, has nothing to refund, as he has not received Note: Annulment may be had even if there be no damage to the
anything under the contract to sell (Reyes v. Lim, Keng and contracting parties.
Harrison Lumber, Inc., G.R. No. 134241, Aug. 11, 2003).
Q: What are the two general classes of voidable contracts?
Q: Goldenrod offered to buy a mortgaged property owned
by Barreto Realty to which it paid an earnest money A:
amounting to P1 million. It was agreed upon that 1. Those where one of the parties is incapable of
Goldenrod would pay the outstanding obligations of giving consent; and
Barreto Realty with UCPB. However, Goldenrod did not
pay UCPB because of the banks denial of its request for Note: If both parties are incapacitated to give consent,
the extension to pay the obligation. Thereafter, the contract is unenforceable, not voidable
Goldenrod, through its brocker, informed Barreto Realty
that it could not go through with the purchase of the 2. Those where the consent is vitiated by mistake,
property and also demanded the refund of the earnest violence, intimidation, undue influence or fraud.
money it paid. In the absence of a specific stipulation, may (Art. 1390)
the seller of real estate unilaterally rescind the contract
and as a consequence keep the earnest money to answer Q: What are the characteristics of a voidable contract?
for damages in the event the sale fails due to the fault of
the prospective buyer? A:
1. Effective until set aside;
A: No. Goldenrod and Barretto Realty did not intend that 2. May be assailed or attacked only in an action for that
the earnest money or advance payment would be forfeited purpose;
when the buyer should fail to pay the balance of the price, 3. Can be confirmed; and
especially in the absence of a clear and express agreement 4. Can be assailed only by the party whose consent was
thereon. defective or his heirs or assigns.
Moreover, Goldenrod resorted to extrajudicial rescission of

its agreement with Barretto Realty. Under Article 1385,

CIVIL LAW
Q: What are the causes of extinction of action to annul? value of the thing at the time of the loss,
with interest from the same date (Art. 1400).
A:
1. Prescription – the action for annulment must be Q: What is the prescriptive period for an annulment of a
commenced within 4 years from the time the: voidable contract?
a. incapacity ends;
b. guardianship ceases; A: The action for annulment shall be brought within four
c. violence, intimidation or undue influence ends; or years.
d. mistake or fraud is discovered (Art. 1391)
This period shall begin:
Note: If the action has prescribed, the contract can no In cases of intimidation, violence or undue
longer be set aside (Villanueva v. Villanueva, 91 Phil 43).
influence, from the time the defect of the consent
ceases.
2. Ratification–cleanses the contract of its defects from
In case of mistake or fraud, from the time of the
the moment it was constituted (Art. 1396) It
discovery of the same.
extinguishes the action to annul a voidable contract
And when the action refers to contracts entered
(Art. 1392).
into by minors or other incapacitated persons,
from the time the guardianship ceases. (Art.
3. By loss of the thing which is the object of the contract
1391)
through fraud or fault of the person who is entitled to
annul the contract (Art. 1401)
Q: What is confirmation?
Note: If the right of action is based upon the incapacity of any one
of the contracting parties, the loss of the thing shall not be an A: It is an act by which a voidable contract is cured of its
obstacle to the success of the action, unless it took place through vice or defect (Luna v. Linatoc, 74 Phil. 15)
the fraud or fault of the plaintiff (Art. 1401)
Q: What is recognition?
Q: Who may institute action for annulment?
A: It is an act whereby a defect of proof is cured such as
A: By all who are thereby obliged principally or subsidiarily. when an oral contract is put into writing or when a private
instrument is converted into a public instrument (Luna v.
Note: He who has capacity to contract may not invoke the Linatoc, 74 Phil. 15)
incapacity of the party with whom he has contracted nor can those
who exerted intimidation, violence or undue influence or
Q: What is ratification?
employed fraud or caused mistake base their action upon these
flaws of the contract.
A: It is the act or means by virtue of which efficacy is given
Q: What are the effects of annulment? to a contract which suffers from a vice of curable nullity
(Manresa)
A:
1. If contract not yet consummated – parties shall be Note: Ratification extinguishes the action to annul a
released from the obligations arising therefrom. voidable contract (Art. 1392)
2. If contract has already been consummated – rules
provided in Arts. 1398-1402, shall govern. Q: What are the requisites of ratification?
a. Restitution
A:
GR: Mutual restitution. – the contracting parties 1. It is a voidable contract;
shall restore to each other things which have 2. Person ratifying must know the reason for the contract
been the subject matter of the contract, with being voidable;
their fruits and the price with its interest except in 3. Cause must not exist or continue to exist anymore at
case provided by law. In an obligation to render the time of ratification;
services, the value thereof shall be the basis for 4. It must be made expressly or by an act implying a
damages. (Art. 1398) waiver of the action to annul; and
5. The person ratifying it must be the injured party.
XPN: No restitution. – the incapacity of one of
the parties, the incapacitated person is not Q: What are the kinds of ratification?
obliged to make any restitution except insofar
as he has been benefited by the thing or the A:
price received by him. (Art. 1399) 1. Express –the desire of the innocent party to
convalidate the contract, or his waiver or renunciation
b. Whenever the person obliged by the decree of his right to annul the contract is clearly manifested
of annulment to return the thing cannot do verbally or formally in writing (Pineda, Obligations and
so because it has been lost through his fault, Contracts, 2000 ed. p. 552)
he shall return the fruits received and the

2013 GOLDEN NOTES
CONTRACTS
2. Implied (tacit) – it is the knowledge of the reason UNENFORCEABLE CONTRACTS
which renders the contract voidable and such reason
having ceased, the person who has a right to invoke it Q: What are unenforceable contracts?
should execute an act which necessarily implies an
intention to waive his right (Art. 1393). A: Those contracts which cannot be enforced by action or
complaint, unless they have been ratified by the party or
Q: Who may ask for ratification of contract entered into parties who did not give consent.
by the incapacitated person?
Q: What are the kinds of unenforceable contracts?
A: Ratification may be effected by the guardian of the
incapacitated person (Art. 1394) A: The following contracts are unenforceable unless they
are ratified:
Note: Art. 1394 does not refer to a rescissible contract entered into 1. Those entered into the name of another person
by the guardian in behalf of his ward. by one who has been given no authority or legal
representation or who acted beyond his powers;
Q: Does retroactivity apply in ratification of contracts?
Note: A contract of sale over a piece of land entered by
A: GR: Yes. Ratification cleanses the contract from all its an agent whose authority is not in writing, even if he
defects from the moment it was constituted. (Art. 1396) acted beyond teh scope of his authority is void, not
merely unenforceable (Art. 1874).
XPN: Rights of innocent third person must not be
prejudiced. 2. Those that do not comply with the Statute of
Frauds; and
Note: Ratification does not require the conformity of the 3. Those where both parties are incapable of giving
contracting party who has no right to bring the action for consent to a contract. (Art. 1403)
annulment.
Q: What are the characteristics of unenforceable contract?
Q: Distinguish voidable contract from rescissible contract.
A:
A: 1. It cannot be enforced by a proper action in court;
VOIDABLE RESCISSIBLE 2. It may be ratified;
Defect is intrinsic. Defect is external 3. it cannot be assailed by third person.
It consist damage or
prejudice suffered by Q: What is Statute of Frauds?
It vitiates consent. one of the contracting
parties or a third A: The term "Statute of Frauds" [Article 1403, (2)] is
person. descriptive of statutes which require certain classes of
No damage or contracts to be in writing. It requires certain contracts
Damage is immaterial. prejudice, contract enumerated therein to be evidenced by some note or
cannot be rescissible. memorandum subscribed by the party charged or by his
Annulability of the Rescissibility of the agent in order to be enforceable. The Statute does not
contract is based on contract is based on deprive the parties of the right to contract with respect to
law. equity. the matters therein involved, but merely regulates the
Public interest Private interest formalities of the contract necessary to render it
predominates. predominates. enforceable. Evidence of the agreement cannot be received
Susceptible of Not susceptible of without the writing or a secondary evidence of its contents
ratification. ratification. (Swedish Match, AB v. CA, G.R. No. 128120, Oct. 20, 2004).
It is not a sanction but
It is a sanction. Note: The Statute of Frauds applies only to executory contracts,
a remedy.
not to those that are partially or completely fulfilled. Where a
Third persons who are contract of sale is alleged to be consummated, it matters not that
Only parties to the
affected may file the neither the receipt for the consideration nor the sale itself was in
contract can assail it.
action writing. Oral evidence of the alleged consummated sale is not
It is a subsidiary action. forbidden by the Statute of Frauds and may not be excluded in
(Pineda, Obligations court (Victoriano v. CA, G.R. No. 87550, Feb. 11, 1991).
It is a principal action.
and Contracts, 2000
ed., p. 546) Q: Cenido, as an heir of Aparato and claiming to be the
owner of a house and lot, filed a complaint for ejectment
against spouses Apacionado. On the other hand, spouses
Apacionado allege that they are the owners which are
unregistered purchased by them from its previous owner,
Aparato. Their claim is anchored on a 1-page typewritten
document entitled "Pagpapatunay," executed by Aparato.

CIVIL LAW
Is the “Pagpapatunay” entered into by Bonifacio and Q: What is the purpose of the Statute of Frauds?
spouse Apacionado valid and enforceable?
A: It is to prevent fraud and perjury in the enforcement of
A: It is valid and enforceable. Generally, contracts are obligations depending for their evidence on the unassisted
obligatory, in whatever form such contracts may have been memory of witnesses, by requiring certain enumerated
entered into, provided all the essential requisites for their contracts and transactions to be evidenced by a writing
validity are present. When, however, the law requires that signed by the party to be charged (Swedish Match, AB v.
a contract be in some form for it to be valid or enforceable, CA, G.R. No. 128120, Oct. 20, 2004)
that requirement must be complied with.
Q: What are the fundamental principles governing Statute
The sale of real property should be in writing and of Frauds?
subscribed by the party charged for it to be enforceable.
The "Pagpapatunay" is in writing and subscribed by A:
Aparato, hence, it is enforceable under the Statute of 1. It only applies to executory contracts and not partially
Frauds. Not having been subscribed and sworn to before a or completely executed.
notary public, however, the "Pagpapatunay" is not a public 2. It cannot apply if the action is neither for damages
document, and therefore does not comply with par. 1, Art. because of violation of an agreement nor for the
1358. specific performance of said agreement.
3. It is exclusive as it applies only to the agreements or
Moreover, the requirement of a public document in Article contracts enumerated in Art. 1403.
1358 is not for the validity of the instrument but for its 4. The defense of Statute of Frauds may be waived
efficacy. Although a conveyance of land is not made in a 5. It is a personal defense, it cannot be assailed by third
public document, it does not affect the validity of such persons.
conveyance. The private conveyance of the house and lot is 6. Contracts infringing the Statute of Frauds are not void;
therefore valid between Aparato and the spouses. For they are merely unenforceable.
greater efficacy of the contract, convenience of the parties 7. It is a Rule of Exclusion as it excludes oral testimony.
and to bind third persons, respondent spouses have the 8. It does not determine the credibility or weight of
right to compel the vendor or his heirs to execute the evidence. It merely concerns itself with the
necessary document to properly convey the property admissibility.
(Cenidon v. Spouses Apacionado, G.R. No. 132474, Nov. 19, 9. It does not apply if the claim is that the contract does
1999) not express the true agreement of the parties. (Paras,
Civil Code of the Philippines Annotated, Vol. IV, 2008
Q: What are the contracts or agreements covered by the ed., pp.790-791)
Statute of Frauds?
Q: When is ratification of an unenforceable contract
A: available?
1. An agreement that by its terms is not to be performed
within a year from the making thereof; A:
2. A special promise to answer for the debt, default or 1. A contract entered into in the name of another by one
miscarriage of another; who has no authority or legal representation or who
3. An agreement made in consideration of marriage, acted beyond his powers shall be unenforceable,
other than a mutual promise to marry; unless it is ratified expressly or impliedly, by the
4. An agreement for the sale of goods, chattels or things person on whose behalf it has been executed, before it
in action, at a price not less than 500 pesos, unless the is revoked by the other contracting party. (Art. 1317)
buyer accepts and receives part of such goods and
chattels, or the evidences, or some of them, of such 2. Contracts infringing the Statute of Frauds are ratified:
things in action, or pay at the time some part of the a. by failure to object to the representation of
purchase money; but when a sale is made by an oral evidence to prove the same; or
auction and entry is made by the auctioneer in his b. by the acceptance of benefits under them.
sales book, at the time of the sale, of the amount and (Art. 1317)
kind of property sold, terms of sale, price, names of
the purchasers and person on whose account the sale 3. In a contract where both parties are incapable of
is made, it is a sufficient memorandum; giving consent, express or implied ratification by the
5. An agreement for the leasing for a longer period than parents or guardian, as the case may be, of one of the
one year, or for the sale of real property or of an contracting parties, or one of the contracting parties
interest therein; upon attaining capacity, shall give the contract the
6. A representation as to the credit of a third person. same effect as if only one of them is incapacitated.
(Art. 1403) Hence, the contract becomes voidable and the rules
on voidable contracts should govern.
Note: The enumeration is exclusive.
If the ratification is made by the parents or guardians
as the case may be, of both contracting parties, or
both of the contracting parties upon attaining

2013 GOLDEN NOTES
CONTRACTS
capacity, the contract shall be validated from the 3. The action or defense for the declaration of the
inception. (Jurado, Comments and Jurisprudence on inexistence of a contract does not prescribe. (Art.
Obligations and Contracts. 2011 ed. p. 572) 1410)
4. The defense of illegality of contracts is not available to
Q: What are the two ways of ratifying contracts which third persons whose interests are not directly affected.
infringe the Statute of Frauds? (Art. 1421)
5. A contract which is the direct result of a previous
A: illegal contract is also void and inexistent. (Art. 1422)
1. Failure to object during the trial to the admissibility of 6. As a general rule, they produce no legal effect
parol evidence to support a contract covered by the whatsoever in accordance with the principle “quod
Statute of Frauds. nullum est nullum producit effectum”. (Jurado,
2. Acceptance of benefits – when the contract has been Comments and Jurisprudence on Obligations and
partly executed because estoppel sets in by accepting Contracts. 2011 ed. p. 579)
performance.
XPN: In case of pari delicto since it will refuse legal
VOID and INEXISTENT CONTRACTS remedy to either party to an illegal agreement and
leaves them to where they were. Hence, if a void
Q: What are void contracts? contract is already executed, neither of the parties can
recover from each other.
A: Void contracts are those which have no force and effect
from the beginning and which cannot be ratified or Q: Judie sold one-half of their lot to Guiang under a deed
validated by lapse of time (Pineda, Obligations and of transfer of rights without the consent and over the
Contracts, 2000 ed., p. 598) objection of his wife, Gilda and just after the latter left for
abroad. When Gilda returned home and found that only
Q: What are the kinds of void contracts? her son, Junie, was staying in their house. She then
gathered her other children, Joji and Harriet and went to
A: stay in their house. For staying in their alleged property,
1. Those lacking in essential elements: the spouses Guiang complained before the barangay
a. Those whose cause, object or purpose is authorities for trespassing.
contrary to law, morals, good customs,
public order or public policy: illicit Is the deed of transfer of rights executed by Judie Corpuz
cause, or object. and the spouses Guiang void or voidable?
b. Those which are absolutely simulated or
fictitious: no cause A: It is void. Gilda’s consent to the contract of sale of their
c. Those whose cause or object did not conjugal property was totally inexistent or absent. Thus,
exist at the time of the transaction: no said contract properly falls within the ambit of Article 124
cause or object of the FC.
d. Those whose object is outside the
commerce of man: no object The particular provision in the old Civil Code which provides
e. Those which contemplate an impossible a remedy for the wife within 10 years during the marriage
service: no object to annul the encumbrance made by the husband was not
f. Those where the intention of parties carried over to the Family Code. It is thus clear that any
relative to principal object of the alienation or encumbrance made after the Family Code
contract cannot be ascertained took effect by the husband of the conjugal partnership
2. Contracts prohibited by law property without the consent of the wife is null and void
a. Pactum commisorium – the creditor appropriates (Spouses Guiangv.CA, G.R. No. 125172, June 26, 1998).
to himself the things given by way of pledge or
mortgage to fulfill the debt Q: On July 6, 1976, Honorio and Vicente executed a deed
b. Pactum de non alienando – an agreement of exchange. Under this instrument, Vicente agreed to
prohibiting the owner from alienating the convey his 64.22-square-meter lot to Honorio, in exchange
mortgaged immovable for a 500-square-meter property. The contract was
c. Pactum leonina – a stipulation in a partnership entered into without the consent of Honorio’s wife. Is the
agreement which excludes one or more partners deed of exchange null and void?
from any share in the profits or losses
3. Illegal or illicit contracts(e.g. contract to sell marijuana) A: The deed is valid until and unless annulled. The deed was
entered into on July 6, 1976, while the Family Code took
Q: Cite some characteristics of void and inexistent effect only on August 3, 1998. Laws should be applied
contracts prospectively only, unless a legislative intent to give them
retroactive effect is expressly declared or is necessarily
A: implied from the language used. Hence, the provisions of
1. It cannot be ratified. (Art. 1409) the Civil Code, not the Family Code are applicable.
2. The right to set up the defense of illegality cannot be According to Article 166 of the Civil Code, the husband
waived. (Art. 1409) cannot alienate or encumber any real property of the

CIVIL LAW
conjugal partnership without the wife’s consent. This the contract itself either against one of
provision, however, must be read in conjunction with the parties or a third
Article 173 of the same Code. The latter states that an person
action to annul an alienation or encumbrance may be Based on equity and
instituted by the wife during the marriage and within ten Nullity is a matter of
matter of private
law and public interest
years from the transaction questioned. Hence, the lack of interest
consent on her part will not make the husband’s alienation No legal effects even if Produces legal effects
or encumbrance of real property of the conjugal no action is filed to set and remains valid if no
partnership void, but merely voidable. (Villarandav. it aside action is filed
Villaranda, G.R. No. 153447, Feb. 23, 2004) Action to rescind
prescribes within 4
Q: Distinguish void contract from inexistent contract Action to declare its
years (Art. 1389;
nullity does not
Pineda, Obligations
A: prescribe (Art. 1410)
and Contracts, 2000
VOID CONTRACT INEXISTENT CONTRACT ed, p. 605)
Those where all the
requisites of a contract are Q: Distinguish void contract from unenforceable contract.
present, but the cause,
Those where one or some
object or purpose is A:
of the requisites which are
contrary to law, morals, VOID UNENFORCEABLE
essential for validity are
good customs, public order There is contract but
absolutely lacking
or public policy or the No contract at all. which cannot be
contract itself is prohibited enforced.
or declared prohibited. It is not subject to It is subject to
Principle of in pari delicto is Principle of in pari delicto ratification. ratification.
applicable. Is not applicable. It can be easily assailed
It cannot be assailed by
by third persons whose
Q: Distinguish void contract from voidable contract third persons.
interests are directly
affected.
A:
VOID VOIDABLE EFFECT OF CONTRACTS
Consent is vitiated or
Absence of essential
there is incapacity to Q: Between whom do contracts take effect?
element/s of a contract
give consent
No effect even if not Valid contract until set A: Contracts take effect only between the parties, and their
set aside aside assigns and heirs, the latter being liable only to the extent
Cannot be ratified Can be ratified of the property received from the decedent. (Art. 1311)
Nullity can be set up
against any person Q: What are the instances when the heirs may be liable for
Nullity can be set up
asserting right arising the obligation contracted by the decedent?
only against a party
from it, and his
thereto
successors in interest A: When the rights and obligations arising from the
not protected by law contract are transmissible:
Action to annul 1. By their nature; or
contract prescribes in 4 2. By stipulation; or
Action to declare
years (Pineda, 3. By provision of law. (Art. 1311)
nullity does not
Obligations and
prescribe
Contracts, 2000 ed, p. Q: What are the requisites in order that a third person
606) may demand the fulfillment of the contract?
Defense may be Defense may be
availed of by anybody, invoked only by the A:
whether he is a party parties (those 1. The contracting parties must have clearly and
to the contract or not principally and deliberately conferred a favor upon the third person;
as long as his interest is subsidiarily liable) or 2. The third person’s interest or benefit in such
directly affected. (Art. their successors in fulfillment must not be merely incidental; and
1421) interest and privies 3. Such third person communicated his acceptance to the
obligor before the stipulations in his favor are revoke.
Q: Distinguish void contract from rescissible contract
A:
VOID RESCISSIBLE
Defect is inherent in Defect is in its effects,

2013 GOLDEN NOTES
SALES
SALES Q: When is a sale absolute?
DEFINITION AND ESSENTIAL REQUISITES OF A CONTRACT A: A sale is absolute when no condition is imposed and
OF SALE ownership passes to the vendee upon delivery of the thing
subject of the sale.
Q: What is a contract of sale?
A: By the contract of sale, one of the contracting parties Q: When is a deed of sale considered absolute in nature?
obligates himself to transfer the ownership of and to
deliver a determinate thing, and the other to pay therefor a A: A deed of sale is considered absolute in nature where
price certain in money or its equivalent. (Art. 1458, NCC) there is neither a stipulation in the deed that title to the
property sold is reserved in the seller until the full payment
Note: Gross inadequacy of price does not affect a contract of sale, of the price, nor one giving the vendor the right to
except as it may indicate a defect in the consent, or that the parties unilaterally resolve the contract the moment the buyer fails
really intended a donation or some other act or contract (Art. to pay within a fixed period.
1470)
Q: When is a sale conditional?
Q: What are the different kinds of sales?
A: It is conditional where the sale contemplates a
A: As to:
contingency, and in general, where the contract is subject
1. Nature of the subject matter:
to certain conditions, usually in the case of the vendee, the
a. Sale of real property;
full payment of the agreed purchase price and in the case
b. Sale of personal property
of the vendor, the fulfillment of certain warranties. (De
2. Value of the things exchanged:
Leon, p. 15)
a. Commutative sale;
b. Aleatory sale
Q: Distinguish a conditional sale from an absolute sale
3. Whether the object is tangible or intangible:
a. Sale of property (tangible or corporeal);
A:
CONDITIONAL SALE ABSOLUTE SALE
Note: A tangible object is also called chose in
possession One where the title to the
One where the seller is
property is not reserved to
granted the right to
b. Sale of a right (assignment of a right, or a the seller or if the seller is
unilaterally rescind the
credit or other intangibles such as copyright, not granted the right to
contract predicated on the
trademark, or good will); rescind the contract based
fulfillment or non-
on the fulfillment or non-
fulfillment, as the case may
Note: An intangible object is a chose in action. fulfillment, as the case may
be, of the prescribed
be, of the prescribed
condition.
4. Validity or defect of the transaction: condition.
a. Valid
b. Rescissible Q: What is the effect of the non-performance of the
c. Voidable condition or if the condition did not take place?
d. Unenforceable
e. Void A: Where the obligation of either party to a contract of sale
5. Legality of the object: is subject to any condition which is not performed, such
a. Licit object party may refuse to proceed with the contract or he may
b. Illicit object waive performance of the condition. Unlike in a non-
6. Presence or absence of conditions: fulfillment of a warranty which would constitute a breach
a. Absolute of the contract, the non-happening of the condition,
b. Conditional although it may extinguish the obligation upon which it is
7. Wholesale or retail: based, generally does not amount to a breach of a contract
a. Wholesale of sale.
b. Retail
8. Proximate inducement for the sale: Q: When is a conditional sale considered an absolute sale?
a. Sale by description
b. Sale by sample A: A deed of sale is absolute in nature although
c. Sale by description and sample denominated a “conditional sale” absent such stipulations
9. When the price is tendered: reserving title to the vendor until full payment of the
a. Cash sale purchase price, nor any stipulation giving them the right to
b. Sale on installment plan unilaterally rescind the contract in case of non-payment.
Q: A contract of sale of a lot stipulates that the "payment

of the full consideration based on a survey shall be due
and payable in 5 years from the execution of a formal
deed of sale". Is this a conditional contract of sale?

CIVIL LAW
A: No, it is not. The stipulation is not a condition which car to D. B now comes to Court to ask for annulment of the
affects the efficacy of the contract of sale. It merely sale made by C to D on the principle of nemo dat quod non
provides the manner by which the full consideration is to habet. Since, A, the first seller was not able to transfer
be computed and the time within which the same is to be ownership to C because he was not the owner at the time
paid. But it does not affect in any manner the effectivity of of delivery, then C cannot also transfer ownership to D (Tsai
the contract (Heirs of San Andres v. Rodriguez, G.R. No. v. CA).
135634, May 31, 2000).
Q: Jose, as co-owner, sold the entire land in favor of his
Q: What are the elements of a contract of sale? minor daughter, Ida. Alleging that Jose had fraudulently
registered it in his name alone, his sisters, sued him for
A: ANE recovery of 2/3 share of the property. Ida did not pay for
1. Accidental elements – dependent on parties’ the land. Is the sale valid?
stipulations; Examples:
a. Conditions A: No. Jose did not have the right to transfer ownership of
b. Interest the entire property to petitioner since 2/3 thereof belonged
c. time & place of payment to his sisters. Also, Ida could not have given her consent to
d. penalty the contract, being a minor at the time. Consent of the
2. Natural elements – those that are inherent even contracting parties is among the essential requisites of a
in absence of contrary provision. contract, including one of sale, absent which there can be
E.g. warranties no valid contract. Moreover, Ida admittedly did not pay any
3. Essential elements – for validity: centavo for the property, which makes the sale void. Article
a. Consent 1471 of the Civil Code provides: If the price is simulated,
b. Determinate subject matter the sale is void, but the act may be shown to have been in
c. Consideration reality a donation, or some other act or contract (Labagala
v. Santiago, G.R. No. 132305, Dec. 4, 2001).
Q: What is the effect and/or consequence of the absence
of consent of the owner in a contract of sale of said Q: Is there a formal requirement for the validity of a
property? contract of sale?
A: GR: The contract of sale is void. One of the essential A: GR: None. A contract of sale may be made in writing, or
requirements of a valid contract of sale is the consent of by word of mouth, or partly in writing and partly by word of
the owner of the property. The buyer acquires no better mouth, or may be inferred from the conduct of the parties.
title to the goods than the seller had. He cannot give what (Art. 1483) Contracts shall be obligatory, in whatever form
he does not have— quod non habet. A stream cannot rise they have been entered into, provided all the essential
higher than its source. requisites for their validity are present.
Note: The principle of Nemo dat quod non habet pertains to XPNS:
the effect of delivery of the subject matter pursuant to a valid a) If the law requires a document or other special form,
contract of sale, which is at the consummation stage of the the contracting parties may compel each other to
contract. It does not pertain to the validity of the contract of
observe that form. (Art. 1357)
sale upon perfection (Villanueva, Law on Sales, 2004 edition,
pg. 104). b) Under Statute of Frauds, the following contracts must
be in writing; otherwise, they shall be unenforceable:
XPNS: 1. Sale of personal property at a price not less than
a) When the owner of the goods is, by his conduct, P500;
precluded from denying the seller’s authority to 2. Sale of a real property or an interest therein;
sell. (Art. 1505) 3. Sale of property not to be performed within a
b) year from the date thereof;
1) Factors’ acts, recording laws, or any other 4. When an applicable statute requires that the
provision of law enabling the apparent owner contract of sale be in a certain form. (Art. 1403,
of the goods to dispose them as if he were the par.2)
true owner;
2) Sales made under the order of a court of Q: Are there instances where the Statute of Frauds is not
competent jurisdiction; essential for the enforceability of a contract of sale?
3) Sales made pursuant to a special law;
4) Purchases made in a merchant’s store or fairs or A: Yes.
markets. (Art. 1505) 1. When there is a note or memorandum in writing
and subscribed to by the party or his agent
Example: A, the seller sold a car owned by B, to C, the (contains essential terms of the contract);
buyer. The contract of sale is valid since ownership at the 2. When there has been partial
time of perfection is not required. A was able to deliver the performance/execution (seller delivers with the
car in the absence of the knowledge of B. Later, C sold the intent to transfer title/receives price);

2013 GOLDEN NOTES
SALES
3. When there has been failure to object to Q: What is the obligation of the seller in terms of the
presentation of evidence aliunde as to the nature of the subject matter of the sale?
existence of a contract without being in writing
and which is covered by the Statute of Frauds; A: When the subject matter of the sale is a determinate
4. When sales are effected through electronic thing, the seller must deliver the thing to the buyer when
commerce. (Villanueva, p. 192) compelled by the latter. When the subject matter is an
indeterminate or generic thing, the seller may be asked that
Note: Rules on forms, and of validity and enforceability of the obligation be complied with at his expense (Art. 1165,
contracts of sale, are strictly kept within the contractual NCC)
relationship of the seller and buyer pursuant to the characteristic
of relativity of every contract, and do not necessarily apply to third
Q: What is the seller’s obligation in case of delay or
parties whose rights may be affected by the terms of a sale.
promise to deliver the thing to two or more persons who
do not have the same interest?
Q: What are the obligations of the buyer?
A: The seller shall be responsible for any fortuitous event
A:
that may occur until he has delivered the thing (Art. 1165,
1. Payment of the price
NCC)
GR: Seller is not bound to deliver unless the purchase
price is paid
CHARACTERISTICS OF A CONTRACT OF SALE
XPN: A period of payment has been fixed
Q: What are the characteristics of a contract of sale?
2. Accept delivery of thing sold
A:
3. Pay for expenses of delivery
1. Consensual – a sale is perfected by mere consent,
Note: A grace period granted the buyer in case of failure to pay is a manifested by the meeting of the minds as to the offer
right not an obligation. Non-payment would still generally require and acceptance thereof on the subject matter, price
judicial or extrajudicial demand before default can arise. and terms of payment.
2. Bilateral – the seller will deliver and transfer a
Q: What are the other obligations of the buyer? determinate thing to the buyer and the latter will pay
an ascertained price (or equivalent) therefor.
A: 3. GR: Commutative – the thing sold is considered the
1. To take care of the goods without the obligation to equivalent of the price paid and the price paid is the
return, where the goods are delivered to the buyer equivalent of the thing sold.
and he rightfully refuses to accept;
XPN: Aleatory – the consideration is not equivalent of
Note: The goods in the buyer’s possession are at the seller’s what has been received like the purchase of a lotto
risk. ticket. If the ticket wins, the prize is much more than
the price of the ticket.
2. To be liable as a depositary if he voluntarily
constituted himself as such; 4. Principal – its existence does not depend upon the
3. To pay interest for the period between delivery of the existence and validity of another contract.
thing and the payment of the price in the following 5. Onerous – the thing sold is conveyed in consideration
cases: of the purchase price, and vice versa.
a. should it have been stipulated; 6. Nominate – it has a specific name given by law.
b. should the thing sold and delivered (Pineda, p. 4, 2010 ed)
produces fruits or income; or
c. should he be in default, from the time SALE IS A TITLE AND NOT A MODE
of judicial or extra-judicial demand for
the payment of the price. Q: Does sale by itself transfer ownership?
Q: What are the obligations of the seller? A: No. The most that sale do is to create the obligation to
transfer ownership. It is only a title and not a mode of
A: DDTWTP transferring ownership.
1. Deliver the thing sold;
2. Deliver fruits & accessions/accessories accruing Q: What then transfers ownership?
from perfection of sale;
3. Transfer the ownership; A: It is tradition or delivery, which is a consequence of the
4. Warranties; sale that transfers ownership.
5. Take care of the thing, pending delivery, with
proper diligence; Q: Differentiate mode and title.
6. Pay for the expenses of the deed of sale unless
there is a stipulation to the contrary A: Mode is the legal means by which dominion or
ownership is created, transferred, or destroyed; title only

CIVIL LAW
constitutes the legal basis by which to affect dominion or such as the full payment thereto. The second
ownership. (Villanueva, p. 15, 2009 ed.) of the purchase price, buyer of the property
cannot be deemed a who may have had
CONTRACT TO SELL buyer in badactual or constructive
faith. There is no double knowledge of such
Q: What is a contract to sell? sale in such case. Title defect in the seller’s
A: A contract to sell may be defined as a bilateral contract to the property will title, or at least was
whereby the prospective seller, while expressly reserving transfer to the buyer charged with the
the ownership of the subject property despite delivery after registration
obligation to discover
thereof to the prospective buyer, binds himself to sell the because there is no such defect, cannot be a
said property exclusively to the prospective buyer upon defect in the owner- registrant in good
fulfillment of the condition agreed upon, that is, full seller’s title per se, butfaith. Such second
payment of the purchase price (Coronel v. Court of Appeals, the latter, of course, buyer cannot defeat the
G.R. No. 103577, October 7, 1996). may be sued for first buyer’s title. In
damages by the
case a title is issued to
Q: What is the difference between a contract to sell and a intending buyer. the second buyer, the
conditional contract of sale? first buyer may seek
reconveyance of the
A: property subject of the
CONTRACT TO SELL CONDITIONAL sale.
CONTRACT OF SALE (Reyes v. Tuparan, G.R. No. 188064, June 1, 2011; Coronel v.
The prospective seller The first element of Court of Appeals, G.R. No. 103577, October 7, 1996).
does not as yet agree or consent is present,
consent to transfer although it is Q: Distinguish a contract of sale from a contract to sale
ownership of the conditioned upon the
property subject of the happening of a A:
contract to sell until the contingent event which CONTRACT OF SALE CONTRACT TO SELL
happening of an event, may or may not occur. As regards transfer of ownership
which may be the full Ownership is transferred to
Ownership is transferred
payment of the the buyer upon delivery of
upon full payment of the
purchase price. What the object to him.
purchase price.
the seller agrees or
obliges himself to do is Note: Vendor has lost and
Note: Prior to full payment,
to fulfill his promise to cannot recover ownership until
ownership is retained by the
sell the subject property and unless the contract is
seller.
when the entire amount resolved or rescinded
of the purchase price is As to numbers of contracts involved
delivered to him. There are two contracts:
Upon the fulfillment of If the suspensive 1. The contract to sell
the suspensive condition is fulfilled, the
condition which is the contract of sale is There is only one contract Note: Preparatory sale
full payment of the thereby perfected, such executed between the
purchase price, that if there had already seller and the buyer. 2. The deed of absolute sale
ownership will not been previous delivery
Note: The principal contract is
automatically transfer of the property subject
executed after full payment of
to the buyer although of the sale to the buyer, the purchase price.
the property may have ownership thereto Payment as a condition
been previously automatically transfers Full payment of the price is
delivered to him. The to the buyer by a positive suspensive
Non-payment of the price is
prospective seller still operation of law condition.
a resolutory condition.
has to convey title to without any further act
Vendor loses ownership
the prospective buyer having to be performed Note: Failure to fully pay the
over the property and
by entering into a by the seller. price is not a breach but an
cannot recover it until and
contract of absolute event that prevents the
unless the contract is
sale. obligation of the vendor to
resolved or rescinded. convey title from becoming
There being no previous Upon the fulfillment of effective.
sale of the property, a the suspensive Remedies available
third person buying condition, the sale 1. SpecifichPerformance
1. Resolution
such property despite becomes absolute and 2. Rescission
2. Damages
the fulfillment of the this will definitely affect 3. Damages
suspensive condition the seller’s title

2013 GOLDEN NOTES
SALES
Q: Having agreed to sell property which they inherited PMRDC. Is Keppel bank bound by the contract to sell
from their father, which was then still in their father’s between PMRDC and Adao?
name, the Coronels executed a document entitled
"Receipt of Down Payment" in favor of Alcaraz for the A: No. Adao’s lone affidavit is self-serving, and cannot be
purchase of their house and lot, with the condition that considered as substantial evidence. As a general rule, one
Ramona will make a down payment upon execution of the who pleads payment has the burden of proving it. Even
document. The Coronels would then cause the transfer of where the petitioner alleged non-payment, the general rule
the property in the name of Ramona and will execute a is that the burden rests on the respondent to prove
deed of absolute sale in favor of Ramona. Ramona paid payment, rather than on the petitioner to prove non-
the downpayment as agreed. Is there a perfected contract payment (Kepel Bank Phils. Inc., v. Adao, G.R. No. 158227,
of sale or a mere contract to sell? Oct. 19, 2005).
A: The agreement could not have been a contract to sell Q: Ursal and Spouses Monesets entered into a “Contract
because the sellers herein made no express reservation of to Sell” of a house and lot. A downpayment was to be paid
ownership or title to the subject parcel of land. The by Ursal and subsequently the balance of the price is to be
Coronels had already agreed to sell the house and lot they paid every month until it is fully paid. After 6 months, the
inherited from their father, completely willing to transfer monthly installments were stopped because the spouses
full ownership of the subject house and lot to the buyer if did not give Ursal the transfer of certificate title.
the documents were then in order. However, the TCT was Subsequently, the Spouses Monesets sold the property to
then still in the name of their father, that is why they Dr. Canora. The same property was also mortgaged by the
caused the issuance of a new TCT in their names upon spouses to a rural bank. When the spouses failed to pay
receipt of the down payment. As soon as the new TCT is the rural bank, the bank moved to foreclose the mortgage.
issued in their names, they were committed to immediately Does Ursal have vested ownership over the property?
execute the deed of absolute sale. Only then will the
obligation of the buyer to pay the remainder of the A: No. In such contract, the prospective seller expressly
purchase price arise. This suspensive condition was reserves the transfer of title to the prospective buyer, until
fulfilled. Thus, the conditional contract of sale became the happening of an event, which in this case is the full
obligatory, the only act required for the consummation payment of the purchase price. In this case, the parties not
thereof being the delivery of the property by means of the only titled their contract as “Contract to Sell Lot and House”
execution of the deed of absolute sale in a public but specified in their agreement that the vendor shall only
instrument, which they unequivocally committed execute a deed of absolute sale on the date of the final
themselves to do as evidenced by the "Receipt of Down payment by the vendee. Since the contract in this case is
Payment." (Coronel, et al. v. CA, G.R. No. 103577, Oct. 7, a contract to sell, the ownership of the property remained
1996) with the Monesets even after petitioner has paid the down
payment and took possession of the property. In other
Q: Instead of executing a deed of Absolute Sale in favor of words, petitioner did not acquire ownership over the
Ramona, the Coronels sold the property to Catalina and subject property as she did not pay in full the equal price of
unilaterally and extrajudicially rescinded the contract with the contract to sell (Ursal v. Court of Appeals, et. al, G.R.
Ramona. Ramona then filed a complaint for specific No. 142411, Oct. 14, 2005).
performance. Will Ramona’s action prosper?
Q: Caguiat offered to buy Spouses Herrera’s lot and
A: Yes. Under Article 1187, the rights and obligations of the subsequently gave the spouses a partial payment. In turn,
parties with respect to the perfected contract of sale the spouses gave Caguiat the corresponding receipt
became mutually due and demandable as of the time of stating that respondent promised to pay the balance of
fulfillment or occurrence of the suspensive condition. the purchase price on or before a fixed date. Caguiat’s
Hence, petitioner-sellers' act of unilaterally and counsel wrote the spouses informing them of his
extrajudicially rescinding the contract of sale cannot be readiness to pay the balance of the price and requesting
justified, there being no express stipulation authorizing the them to prepare the final deed of sale. However, the
sellers to extrajudicially rescind the contract of sale. spouses’ counsel sent a letter to Caguiat stating that the
(Coronel, et al. v. CA, G.R. No. 103577, Oct. 7, 1996) wife is leaving for abroad and that they are cancelling the
transaction. The spouses allowed Caguiat to recover the
Q: Project Movers Realty and Development Corporation partial payment he paid them. Is the transaction a
(PMRDC) was indebted to Keppel Bank for P200M. To pay contract of sale?
the debt, PMRDC conveyed to the bank 25 properties.
Adao occupies one of the properties conveyed. The bank
A: No. In this case, the "Receipt for Partial Payment" shows
demanded Adao to vacate the property but he refused.
that the true agreement between the parties is a contract
Hence, an ejectment case was filed against Adao. In his
to sell. First, ownership over the property was retained by
defense, Adao assailed that he had a Contract to Sell
petitioners and was not to pass to respondent until full
entered between PMRDC and Adao. To prove full payment
payment of the purchase price. In effect, petitioners have
of the property, he presented an affidavit. The lower court
the right to rescind unilaterally the contract the moment
ordered that Keppel banks should respect the contract to
respondent fails to pay within the fixed period. Second, the
sell because when the bank acquired the properties by
agreement between the parties was not embodied in a
way of dacion en pago, it merely stepped into the shoes of

CIVIL LAW
deed of sale. The absence of a formal deed of conveyance is authority given

a strong indication that the parties did not intend
immediate transfer of ownership, but only a transfer after Not unilaterally May be revoked unilaterally
full payment of the purchase price. Third, petitioners revocable even w/o ground
retained possession of the certificate of title of the lot. This
is an additional indication that the agreement did not Seller receives profit Agent not allowed to profit
transfer to respondent, either by actual or constructive
delivery, ownership of the property (Spouses Herrera v. Real contract Personal contract
Caguiat, G.R. No. 139173, Feb. 28, 2007)
Q: What are the instances when a contract to sell may be 4. Dacion en Pago
resorted to? DACION EN PAGO
SALE
A: Contract where property is alienated

No pre-existing to extinguish pre-existing
1. Where subject matter is indeterminate credit
2. Sale of future goods except future inheritance credit/debt
3. Stipulation that deed of sale & corresponding
Buyer-seller Novates creditor-debtor relationship
certificate of sale would be issued only after full
relationship into seller-buyer
payment
DISTINCTIONS OF THE CONTRACT OF SALE WITH OTHER

5. Lease
CONTRACTS
SALE LEASE
Q: Distinguish Sale from the following: Use of thing is for
Obligation to absolutely
specified period only
transfer ownership of thing
1. Donation. with obligation to return
Consideration is the
SALE DONATION Consideration is the price
rental
Onerous Gratuitous/onerous Seller needs to be owner of
Consensual Formal contract thing to transfer ownership.
Law on Sales Law on Donation Lessor need not be
Note: Lease with option to buy – owner
really a contract of sale but
2. Barter
designated as lease in name.
SALE BARTER
6. Contract for piece-of-work
Consideration is giving of Consideration is giving of
SALE CONTRACT FOR PIECE-
money as payment a thing
OF-WORK
If consideration consists partly in money & partly by thing–
Manufacturing in the Manufacturing upon special
look at manifest intention
ordinary course of order of a customer
If intention is not clear, If intention is not clear, and business
and the value of thing is the value of thing is more
For the general market Not for the general market,
equal or less than amount than amount of money =
but specially for the customer
of money = Sale Barter
Both are governed by law on sales

PARTIES TO A CONTRACT OF SALE
Q: Who are the parties to a contract of sale?

3. Agency to Sell
SALE AGENCY TO SELL
A:
1. Seller – one who sells and transfers the thing and
Agent not obliged to pay for
Buyer pays for price of ownership to the buyer
price; must account for
object 2. Buyer – one who buys the thing upon payment of the
the proceeds of the sale.
consideration agreed upon
Principal remains the owner
Buyer becomes owner of
even if the object
thing
delivered to agent
Seller warrants Agent assumes no personal

liability as long as within

2013 GOLDEN NOTES
SALES
CAPACITY OF THE PARTIES RELATIVE INCAPACITY
Q: Who may enter into a contract of sale? Q: Who are those relatively incapacitated to enter into a
contract of sale?
A: GR: Any person who has capacity to contract or enter
into obligations, may enter into a contract of sale, A:
whether as party-seller or as party-buyer. 1. Spouses (Art. 1490, NCC)
2. Agents, Guardians, Executors and Administrators,
XPNs: Public Officers and Employees, Court Officers and
1. Minors, insane and demented persons and deaf- Employees, and others specially disqualified by law.
mutes who do not know how to write (Art. 1491, NCC)
2. Persons under a state of drunkenness or during
hypnotic spell Q : What is the status of the following contracts of sale?
3. Husband and wife - sale by and between spouses
A:
Note: Rationale for the prohibition: 1. That entered into by minors:
a) To prevent a spouse from defrauding his creditors a. Merely voidable, subject to annulment or
by transferring his properties to the other spouse ratification
b) To avoid a situation where the dominant spouse
b. Action for annulment cannot be instituted by the
would unduly take advantage of the weaker spouse
c) To avoid an indirect violation of the prohibition person who is capacitated since he is disqualified
against donations between spouses under Article from alleging the incapacity of the person with
133 of the Civil Code (Medina v. Collector of Internal whom he contracts (with partial restitution in so
Revenue, 1 SCRA 302) far as the minor is benefited) where necessaries
are sold and delivered to a minor or other person
XPN to XPN: without capacity to act, he must pay a reasonable
1. Where necessaries are sold and delivered to a price (Art. 1489)
minor or other person without capacity to act, he
must pay a reasonable price therefor. 2. Sale by & between spouses (Art. 1490):
2. In case of sale between spouses: a. Status of prohibited sales between spouses:
a. when separation of property was agreed upon GR: Null and void
in the marriage settlements; or
b. when there has been a judicial separation of XPN: In case of sale between spouses:
property agreed upon between them
i. When a separation of property was agreed
ABSOLUTE INCAPACITY upon in the marriage settlements; or
ii. When there has been a judicial separation of
Q: Who are those absolutely incapacitated to enter into a property agreed upon between them
contract of sale?
rd
b. Contract of sale with 3 parties:
A:
1. Unemancipated minors (Art. 1327, NCC); GR: Under the law on sales, it would seem that a
2. Insane or demented persons, and deaf-mutes who do spouse may, without the consent of the other spouse,
not know how to write (Art. 1327, NCC) enter into sales transactions in the regular or normal
pursuit of their profession, vocation or trade. (in
Q: May a capacitated person file an action for annulment relation with Art. 73, Family Code)
using as basis the incapacity of the incapacitated party?
XPN: Even when the property regime prevailing was
A: No. He is disqualified from alleging the incapacity of the the conjugal partnership of gains, the Supreme Court
person whom he contracts (Art. 1397, NCC); held the sale by the husband of a conjugal property
without the consent of the wife is void, not merely
Q: In a defective contract, where such defect consists in voidable under Art. 124 of the Family Code since the
the incapacity of a party, does the incapacitated party resulting contract lack one of the essential elements of
have an obligation to make restitution? full consent. (Guiang v. CA, G.R. No. 125172, June 26,
1998)
A: GR: The incapacitated person is not obliged to make any
restitution. 3. Between Common Law Spouses - also null and void.
XPN: insofar as he has been benefited by the thing or In Calimlim-Canullas v. Fortun, the Court decided that
price received by him. (Art. 1399, NCC) sale between common law spouses is null and void
because Art. 1490 prohibits sales between spouses to
prevent the exercise of undue influence by one spouse
over the other, as well as to protect the institution of
marriage. The prohibition applies to a couple living as

CIVIL LAW
husband and wife without the benefit of marriage,

otherwise, the condition of those incurred guilt
would turn out to be better than those in legal union.
(Calimlim-Canullas v. Fortun, et. al., G.R. No. L-57499,
June 22, 1984)
But when the registered property has been conveyed

subsequently to a third-party buyer in good faith and
for value, then reconveyance is no longer available to
common-law spouse-seller, since under the Torrens
system every buyer has a right to rely upon the title of
his immediate seller (Cruz v. CA, G.R. No. 120122, Nov.
6, 1997)
Q: Who has the right to assail the validity of the

transaction between spouses?
A: The following are the only persons who can question the
sale between spouses:
1. The heirs of either of the spouses who have been
prejudiced;
2. Prior creditors; and
3. The State when it comes to the payment of the
proper taxes due on the transactions

2013 GOLDEN NOTES
SALES
Q: Who are the persons with relative incapacity to be the vendee in a contract of sale?
A: AGE-COP
RELATIVELY INCAPACITATED
PROPERTIES INVOLVED STATUS OF SALE RATIFICATION
TO BUY
Property entrusted to them for Can be ratified after the
Agents administration or sale inhibition has ceased
XPN: When principal gave his consent
Property of the ward during period of Reason: the only wrong that
Guardian
guardianship subsists is the private wrong to
the ward, principal or estate;
and can be condoned by the
private parties themselves
Voidable Note: Contracts entered by
guardian in behalf of ward are
Property of the estate under rescissible if ward suffers lesion
Executors and administrators
administration by more than ¼ of the value of
property. Sale by guardian of
property belonging to a ward
without Court approval is void
regardless of the lesion, hence,
cannot be ratified.
Property and rights in litigation or
Court officers and employees levied upon on execution before the Cannot be ratified
court under their jurisdiction
Void
Others specially disqualified
Reason: It is not only a private
by law
wrong, but also a public wrong.
Property of the State entrusted to (Villanueva, Law on Sales, p. 58)
Pubic officers and employees
them for administration
Note: Prohibitions are applicable to sales in legal redemption, compromises and renunciations.
EFFECT OF SALE IN VIOLATION OF THE PROHIBITION: 1) With respect to guardians, agents, executors/administrators, the sale shall only be
voidable because in such cases only private interests are affected – defect can be cured by ratification; 2) with respect to Public
officers/employees, justices, judges, lawyers, clerks of courts, and those specially disqualified by law, the sale shall be null and void since public
interest being involve therein (De Leon, Comments and Cases on Sales and Lease, 7th edition, pg 168)
Q: Atty. Leon G. Maquera acquired his client’s property as litigation by the lawyer provided for in the Civil Code since
payment for his legal services, then sold it and as a the prohibition applies only to a sale or assignment to the
consequence obtained an unreasonable high fee for lawyer by his client during the pendency of the litigation.
handling his client’s case. Did he validly acquire his client’s The transfer actually takes effect after the finality of the
property? judgment and not during the pendency of the case. As such
it is valid stipulation between the lawyer and client.
A: No. Article 1491 (5) of the New Civil Code prohibits
lawyer’s acquisition by assignment of the client’s property SPECIAL DISQUALIFICATIONS
which is the subject of the litigation handled by the lawyer.
Also, under Article 1492, the prohibition extends to sales in Q: Who are those persons specially disqualified by law to
legal redemption. (In Re: Suspension from the Practice of enter into contracts of sale?
Law in the territory of Guam of Atty. Leon G. Maquera, B.M.
No. 793, July 30, 2004) A: ALIEN-UnOS
1. ALIENs who are disqualified to purchase private
Q: The stipulation between the lawyer and counsel is as agricultural lands (Art. XII Secs. 3 & 7)
follows, “the attorney’s fees of the Atty. X will be ½ of 2. Unpaid seller having a right of lien or having
whatever the client might recover from his share in the stopped the goods in transitu, is prohibited from
property subject of the litigation.” Is the stipulation valid? buying the goods either directly or indirectly in
the resale of the same at public/private sale which
A: Yes. The stipulation made is one of a contingent fee he may make (Art. 1533 [5]; Art. 1476 [4])
which is allowed by the CPE and the CPR. It does not violate
the prohibition of acquisition of property subject of the

CIVIL LAW
3. The Officer holding the execution or deputy GR: Must be transmissible.

cannot become a purchaser or be interested Example: right of redemption, right of usufruct,
directly or indirectly on any purchase at an sale of credit, right to inheritance already
execution. (Sec. 21 Rule 39, Rules of Court) assigned, etc.
4. In Sale by auction, seller cannot bid unless notice
has been given that such sale is subject to a right XPN:
to bid in behalf of the seller (Art. 1476). a. Future inheritance – cannot be the subject of
sale
SALE BY A PERON HAVING A VOIDABLE TITLE b. Service – cannot be the object of sale. They are
not determinate things and no transfer of
Q: What is the effect of a sale made by the seller with ownership is available but it can be the object
voidable title over the object? of certain contracts such as contract for a piece
of work. (Pineda, p. 19, 2010 ed)
A:
1. Perfection stage: valid – buyer acquires title of goods Q: When may a thing be considered as determinate?
2. Consummation stage: valid – If the title has not yet
been avoided at the time of sale and the buyer must A: A thing is determinate when it is particularly designated
buy the goods under the following conditions: or physically segregated from all others of the same class.
a. In good faith The requisite that a thing be determinate is satisfied if at
b. For value the time the contract is entered into, the thing is capable of
c. Without notice of seller’s defect of title being made determinate without the necessity of a new or
further agreement between the parties.
EMPTIO REI SPERATAE EMPTIO SPEI
Sale of thing having Sale of mere hope or Q: Rodriguez first purchased a portion of a Lot A consisting
potential existence expectancy of 345 square meters located in the middle of Lot B, which
Uncertainty is w/ regard to Uncertainty is w/ regard to has a total area of 854 square meters, from Juan. He then
quantity & quality existence of thing purchased another portion of said lot. As shown in the
Contract deals w/ present receipt, the late Juan received P500.00 from Rodriguez as
Contract deals w/ future "advance payment for the residential lot adjoining his
thing – hope or
thing previously paid lot on three sides excepting on the
expectancy
Sale is valid even though frontage. Juan’s heirs now contests the validity of the
expected thing does not subsequent sale, alleging that the object is not
Sale is valid only if the determinate or determinable. Decide.
come into existence as
expected thing will exist.
long as the hope itself
validly existed. (eg. lotto) A: Their contention is without merit. There is no dispute
that Rodriguez purchased a portion of Lot A consisting of
Note: The presumption is Emptio Rei Speratae 345 square meters. This portion is located in the middle of
B, which has a total area of 854 square meters, and is
Q: What is the effect if a buyer in good faith purchased clearly what was referred to in the receipt as the
from a public sale a personal property belonging to "previously paid lot." Since the lot subsequently sold to
another who has lost or has been deprived thereof? Rodriguez is said to adjoin the "previously paid lot" on
three sides thereof, the subject lot is capable of being
A: The owner of the personal property cannot demand its determined without the need of any new contract. The fact
return without reimbursing the price paid by the buyer in that the exact area of these adjoining residential lots is
good faith. (Art. 559) subject to the result of a survey does not detract from the
fact that they are determinate or determinable.
SUBJECT MATTER Concomitantly, the object of the sale is certain and
determinate. (Heirs of San Andres v. Rodriguez, G.R. No.
Q: What are the requisites of a proper objects of sale? 135634, May 31, 2000)
A: Note: Where land is sold for a lump sum and not so much per unit
1. Things of measure or number, the boundaries of the land stated in the
contract determine the effects and scope of the sale, not the area
a. Determinate or determinable
thereof. The vendors are obligated to deliver all the land included
b. Lawful (licit), otherwise contract is void within the boundaries, regardless of whether the real area should
c. Should not be impossible (within the be greater or smaller than that recited in the deed. This is
commerce of men) particularly true where the area is described as "humigit
kumulang," that is, more or less. (Semira v. CA, G.R. No. 76031,
Note: From the viewpoint of risk or loss, not until the object Mar. 2, 1994)
has really been made determinate can we say that the object
has been lost, because “genus never perishes.” Q: Lino entered into a contract to sell with Ramon,
undertaking to convey to the latter one of the five lots he
2. Rights owns, without specifying which lot it was, for the price of

2013 GOLDEN NOTES
SALES
P1 million. Later, the parties could not agree which of five contract provided it is possible to determine the
lots he owned Lino undertook to sell to Ramon. What is same, without need of a new contract (Art. 1349)
the standing of the contract? (2011 Bar Question)
OBLIGATION OF THE SELLER
A: It is a void contract since the particular lot sold cannot be TO TRANSFER OWNERSHIP
determined.
Q: Should the seller be the owner at the time of perfection
Q: Can rights be the objects of sale? of the contract?
A: Yes, if they are transmissible. (Art. 1347) A: GR: No. Seller must have the right to transfer ownership
at the time of delivery or consummation stage. He need not
Q: When is a thing determinate? be the owner at the time of perfection of the contract.
A: When it is particularly designated or physically XPN: Foreclosure sale wherein the mortgagor should be
segregated from all others of the same class. (Art. 1460, the absolute owner.
NCC)
Q: When is ownership transferred by the seller to the
Q: When is a thing determinable? buyer?
A: When the thing is capable of being made determinate A: GR: The ownership of the thing sold is acquired by the
without the necessity of a new or further agreement vendee from the moment it is delivered to him in any ways
between the parties. (Art. 1460, NCC) specified in articles 1497 to 1501. This is the case when the
sale is absolute.
PARTICULAR KINDS
XPN: Any other manner signifying an agreement that the
Q: What may be objects of sale? possession is transferred from vendor to vendee. The sale
in this exception is a conditional one.
A:
1. Existing Goods – owned/ possessed by seller at the Q: EJ was subjected to a buy-bust operation where police
time of perfection officers posed to buy 500 pesos worth of “S”. She was
2. Future Goods – goods to be manufactured, raised, then charged with a violation of the Dangerous Drugs Act
acquired by seller after perfection of the contract or for trafficking drugs. EJ uses as defense her lack of
whose acquisition by seller depends upon a possession of the object of the sale. Would her contention
contingency (Art. 1462) free her from liability?
3. Sale of Undivided Interest or Share
a. Sole owner may sell an undivided interest. (Art. A: No. Though she was not in possession of the object of
1463) Ex. A fraction or percentage of such sale, Article 1459 merely requires that the vendor must
property have the right to transfer ownership of the object sold at
b. Sale of an undivided share in a specific mass of the time of delivery. In the case at bar, though Beth is not
fungible goods makes the buyer a co-owner of the owner, she had the right to dispose of the prohibited
the entire mass in proportion to the amount he drug. Ownership was thereafter acquired upon her delivery
bought. (Art. 1464) to the men in the alley after her payment of the price.
c. A co-owner cannot sell more than his share (People v. Ganguso, G.R. No. 115430, Nov. 23, 1995)
(Yturralde v. CA)
4. Sale of Things in Litigation Q: Spouses De Leon alleged that they are the owners of a
a. Sale of things under litigation is rescissible if parcel of land which was inherited by the husband from
entered into by the defendant , without the his father. They engaged the services of Atty. Juan to take
approval of the litigants or the court (Art. 1381) care of the documents of the properties of his parents.
The lawyer let them sign voluminous documents. After the
Note: If the property involved belongs to a ward and death of Atty. Juan, some documents surfaced and
the guardian enters into a contract involving such revealed that their properties had been conveyed by sale
property without court approval, the contract is void, or quitclaim to the husband's brothers and sisters and to
not merely rescissible.
Atty. Juan and his sisters, when in truth and in fact, no
such conveyances were ever intended by them. His
b. No rescission is allowed where the thing is legally
rd signature in the deed was forged. The land in question
in the possession of a 3 person who did not
was subsequently sold to Alcantara by Rodolfo De Leon,
acted in bad faith.
one of the brothers. The spouses demanded annulment of
5. Things subject to Resolutory Condition. Ex. Things
the document and reconveyance but it was refused.
acquired under legal or conventional right of
Likewise, Alcantara averred that she bought the land in
redemption, or subject to reserva troncal. (Art. 1465)
question in good faith and for value. Was there a right to
6. Indeterminate Quantity of Subject Matter
transfer ownership of the land?
a. The fact that the quantity is not determinate shall
not be an obstacle to the existence of the

CIVIL LAW
A: None. It is during the delivery that the law requires the 5. When a person who is not the owner sells and
seller to have the right to transfer ownership of the thing delivers a thing, and subsequently acquired title
sold. In general, a perfected contract of sale cannot be thereto
challenged on the ground of the seller’s non-ownership of 6. When the seller has a voidable title which has not
the thing sold at the time of the perfection of the contract. been avoided at the time of the sale
Undisputed is the fact that at the time of the sale, Rodolfo 7. Sale by co-owner of the whole property or a
de Leon was not the owner of the land he delivered to definite portion thereof
petitioner. Thus, the consummation of the contract and the 8. Special rights of unpaid seller
consequent transfer of ownership would depend on
whether he subsequently acquired ownership of the land. A Q: What are the instances when the Civil Code recognizes
comparison of the genuine signatures of Hermoso de Leon sale of things not actually or already owned by the seller
with his purported signature on the Deed of Extrajudicial at the time of sale?
Partition with Quitclaim will readily reveal that the latter is
a forgery. (Alcantara-Daus v. Spouses De Leon, G.R. No. A:
149750, June 16, 2003) 1. Sale of a thing having potential existence (Art.1461,
NCC)
SALE BY A PERSON WHO DOES NOT OWN THE THING 2. Sale of future goods (Art. 1462, NCC)
SOLD 3. Contract for the delivery at a certain price of an article,
which the seller in the ordinary course of business
Q: Is the sale of a good made by a person who does not manufactures/ procures for the general market,
own it valid? whether the same is on hand at the time or not (Art.
1467, NCC)
A: In the case of sale of property, ownership is not required
at the time of perfection in order for the sale to be valid. PRICE
Ownership is material only at the time of delivery but only
for the purpose of transferring ownership and does not Q: What is a price?
affect the validity of the contract of sale. This is because
validity is determined not at the time of performance but at A: Price signifies the sum stipulated as the equivalent of the
the time of perfection. If the seller is still not the owner of thing sold and also every incident taken into consideration
the thing subject of the sale at the time of delivery, then for the fixing of the price put to the debit of the buyer and
the contract of sale does not become void. It is still valid. agreed to by him. (Villanueva, p. 52)
The remedy of the buyer is rescission under Art. 1191 and
damages. Note: A definite agreement on the manner of payment of the price
is an essential element in the formation of a binding and
Note: What the law requires is that the seller has the right to enforceable contract of sale. (Co v. CA, G.R. No. 123908, Feb. 9,
transfer ownership at the time the thing sold is delivered. 1998)
Perfection per se does not transfer ownership which occurs upon
the constructive delivery of the thing sold. A perfected contract of Q: What are the requisites of price?
sale cannot be challenged on the ground of non-ownership on the
part of the seller at the time of its perfection (Quijada v. CA, 299 A: Must be:
SCRA 69) 1. Real
2. In money or its equivalent
Note: Future inheritance cannot be the subject of sale.
3. Certain or ascertainable at the time of the
perfection of the contract
Q: What is the legal effect of sale by a non-owner?
Q: When is price certain?
A: GR: The buyer acquires no better title to the goods than
the seller had; caveat emptor (buyer beware).
A:
1. If there is a stipulation
XPNs:
2. If it be with reference to another thing certain
1. Estoppel – when the owner of the goods is by his
3. If the determination of the price is left to the judgment
conduct precluded from denying the seller’s
of specified person(s)
authority to sell
4. By reference to certain fact(s) as referred to in Art.
2. When the contrary is provided for in recording
1472 (Art. 1469)
laws
3. When the sale is made under statutory power of Note: If the price is based on estimates, it is uncertain.
sale or under the order of a court of competent
jurisdiction
4. When the sale is made in a merchant’s store in
accordance with the Code of Commerce and
special laws

2013 GOLDEN NOTES
SALES
Q: When is the price of securities, grains, liquids and may be annulled. On the other hand, respondent's defense
things considered certain? for the declaration of the inexistence of the contract does
not prescribe. (Catindig v. Vda. de Meneses, Roxas v. Court
A: of Appeals, G.R.No. 165851 & G.R. No. 165851 , Feb. 2,
1. When the price fixed is that which the thing would 2011)
have on a definite day, or in a particular exchange or
market Q: What is considered reasonable price?
2. When the amount is fixed above or below the price of
such day, or in such exchange or market, provided said A: Generally the market price at the time and place fixed by
amount be certain (Art. 1472, NCC) the contract or by law for the delivery of the goods.
Q: Can the fixing of the price be left to the discretion of Q: When is the time to determine the adequacy or
one of the contracting parties? inadequacy of price?
A: GR: No. The price cannot be fixed unilaterally by one of A: In determining the adequacy or inadequacy of the price,
the contracting parties. the price obtaining at the time of the execution of the
contract shall be considered, and not the price obtaining
XPN: If the other party agreed or consented. (Art. thereafter (Pineda, p. 47, 2010 ed.)
1473, NCC)
Q: How is inadequacy of price proved?
Q: What is the effect when the price in unilaterally fixed
by one of the contracting parties without consent of the A: Allegation of inadequacy of price must be proved by
other party? sufficient evidence. Without being substantiated with
evidence, it is a mere speculation. (Pineda, p. 47, 2010 ed.)
A: There is no meeting of the minds. The sale is
inefficacious (Pineda, p. 54, 2010 ed.) Q: What is the effect on the contract of sale in case of a
breach in the agreed manner of payment?
Q: What is the effect of gross inadequacy of price?
A: None. It is not the act of payment of price that
A: GR: It does not affect the validity of the sale if it is fixed determines the validity of a contract of sale. Payment of the
in good faith and without fraud price has nothing to do with the perfection of the contract,
as it goes into the performance of the contract. Failure to
XPN: CoRDS pay the consideration is different from lack of
1. If Consent is vitiated (may be annulled or consideration. Failure to pay such results in a right to
presumed to be equitable mortgage) demand the fulfillment or cancellation of the obligation
2. If the parties intended a Donation or some other under an existing valid contract. On the other hand, lack of
act/ contract consideration prevents the existence of a valid contract.
3. If the price is so low as to be “Shocking to the (Sps. Bernardo Buenaventura and Consolacion Joaqui v. CA,
conscience” GR No. 126376, Nov. 20, 2003)
4. If in the event of Resale, a better price can be
obtained WHEN NO PRICE IS AGREED UPON BY THE PARTIES
Q: What is the effect if the price is simulated? Q: What is the effect of failure to determine the price?
A: GR: Contract of sale is void. A:

1. Where contract is executory – ineffective
XPN: The act may be shown to have been in reality a 2. Where the thing has been delivered to and
donation or some other act or contract. appropriated by the buyer – the buyer must pay a
reasonable price therefore
Q: Is annulment of sale the remedy in a simulated sale?
Note: The fixing of the price cannot be left to the discretion of one
A: No. It is a well-entrenched rule that where the deed of of the parties. However, if the price fixed by one of the parties is
sale states that the purchase price has been paid but in fact accepted by the other, the sale is perfected.
has never been paid, the deed of sale is null and void ab
initio for lack of consideration. Moreover, Article 1471 of Q: What is the effect when a thing or a part thereof is
the Civil Code, provides that “if the price is simulated, the delivered to the buyer although the contract is
sale is void,” which applies to the instant case, since the inefficacious and the latter appropriated the same?
price purportedly paid as indicated in the contract of sale
was simulated for no payment was actually made. Since it A: The buyer must pay the reasonable price for the thing
was well established that the Deed of Sale is simulated and, received (Art. 1474, NCC)
therefore void, petitioners’ claim that respondent's cause
of action is one for annulment of contract, which already
prescribed, is unavailing, because only voidable contracts

CIVIL LAW
Q: How is reasonable price determined? Q: When is payment considered option money?
A: Reasonableness of price is a question of fact. Its A: Payment is considered option money when it is given as
determination is dependent upon the circumstances of a separate and distinct consideration from the purchase
each particular case. The market value is a good standard in price. Consideration in an option contract may be anything
determining the reasonable price. (Pineda, p. 55) or undertaking of value.
Q: What is market value? Note: An option is not itself a purchase, but merely secures the
privilege to buy. It is not a sale of property but a sale of right to
A: It is that reasonable sum which a property would purchase. He does not sell his land; he does not then agree to sell
it; but he does sell something, i.e., the right or privilege to buy at
command in a fair sale by a man willing but not obliged to
the election or option of the other party. Its distinguishing
sell to another who is willing but not obliged to buy. characteristic is that it imposes no binding obligation on the person
holding the option, aside from the consideration for the offer
Q: In an action for specific performance with damages, X (Limson v. CA, G.R. No. 135929, 2001).
alleged that there was an agreement to purchase the lot
of Y. As regards the manner of payment, however, Y’s Q: What is an earnest money or “arras”?
receipts contradicted the testimony of X. The receipts
failed to state the total purchase price or prove that full A: This is the money given to the seller by the prospective
payment was made. For this reason, it was contended that buyer to show that the latter is truly interested in buying
there was no meeting of their minds and there was no the property, and its aim is to bind the bargain. (Pineda, p.
perfected contract of sale. Decide. 75)
A: The question to be determined should not be whether Q: What is the effect of giving an earnest money?
there was an agreed price, but what that agreed price was.
The sellers could not render invalid a perfected contract of A: It is statutory rule that whenever earnest money is given
sale by merely contradicting the buyer’s obligation in a contract of sale, it shall be considered as part of the
regarding the price, and subsequently raising the lack of price and as proof of the perfection of the contract. It
agreement as to the price. (David v. Tiongson, G.R. No. constitutes an advance payment and must, therefore be
108169, Aug. 25, 1999) deducted from the total price. (Adelfa Properties, Inc. v. CA,
240 SCRA 265)
Q: Distinguish the failure to pay the consideration from
lack of consideration. Note: Option money may become earnest money if the parties so
agree.
A:
FAILURE TO PAY LACK OF Q: What is the effect of rescission on earnest money
CONSIDERATION CONSIDERATION received?
As to validity of contract of sale
Contract is valid because it is the A: When the seller seeks to rescind the sale, he is obliged to
existence of the price and not return the thing which was the object of the contract along
the act of payment of price that with fruits and interest. (Art. 1385, NCC)
determines the validity of a Lack of consideration
contract of sale. Q: Distinguish option money from earnest money.
prevents the existence
of a valid contract.
Note: Payment of the price has A:
nothing to do with the perfection of OPTION MONEY EARNEST MONEY
the contract, but merely goes into Money given as distinct
the performance of the contract. Forms part of the purchase
consideration for an
As to resultant right price
option contract
Failure to pay the consideration Applies to a sale not Given only when there is
The contract of sale is
results in a right to demand the yet perfected already a sale
null and void and
fulfillment or cancellation of the Prospective buyer is not When given, the buyer is
produces no effect
obligation under an existing required to buy. bound to pay the balance.
whatsoever
valid contract. If sale did not materialize, it
If buyer does not decide
must be returned.
OPTION MONEY VIS-A-VIS EARNEST MONEY to buy, it cannot be
(Villanueva, p. 87, Pineda,
recovered.
p.77)
Q: What is option money?
Q: Bert offers to buy Simeon's property under the
A: The distinct consideration in case of an option contract. following terms and conditions: P1 million purchase price,
It does not form part of the purchase price hence, it cannot 10% option money, the balance payable in cash upon the
be recovered if the buyer did not continue with the sale. clearance of the property of all illegal occupants. The
option money is promptly paid and Simeon clears the

2013 GOLDEN NOTES
SALES
property of all illegal occupants in no time at all. However, Article 1482 of the Civil Code, provides that whenever
when Bert tenders payment of the balance and asks for earnest money is given in a contract of sale, it shall be
the deed of absolute sale, Simeon suddenly has a change considered as part of the price and proof of the perfection
of heart, claiming that the deal is disadvantageous to him of the contract. Although the presumption is not
as he has found out that the property can fetch three conclusive, as the parties may treat the earnest money
times the agreed purchase price. Bert seeks specific differently, there is nothing alleged in the present case that
performance but Simeon contends that he has merely would give rise to a contrary presumption. In cases where
given Bert an option to buy and nothing more and offers the Court reached a conclusion contrary to the
to return the option money which Bert refuses to accept. presumption declared in Article 1482, we found that the
1. Will Bert's action for specific performance money initially paid was given to guarantee that the buyer
prosper? Explain. would not back out from the sale, considering that the
2. May Simeon justify his refusal to proceed with parties to the sale have yet to arrive at a definite
the sale by the fact that the deal is financially agreement as to its terms – that is, a situation where the
disadvantageous to him? Explain. (2002 Bar contract has not yet been perfected. These situations do
Question) not obtain in the present case, as neither of the parties
claimed that the P20,000.00 was given merely as guarantee
A: by the respondents, as vendees, that they would not back
1. Bert's action for specific performance will prosper out from the sale (Heirs of Pangan v. Spouses Perreras, G.R.
because there was a binding agreement of sale, not No. 157374, Aug. 27, 2009).
just an option contract. The sale was perfected upon
acceptance by Simeon of 10% of the agreed price. This FORMATION OF CONTRACT OF SALE
amount is in reality an earnest money because the
agreement states that the balance was to be paid after Q: What are the 3 stages involved in the formation of a
fulfilling the condition. Under Art. 1482, it "shall be contract of sale?
considered as part of the price and as proof of the
perfection of the contract." (Topacio v. CA, G.R. No. A:
102606, July 3, 1992; Villongco Realty v. Bormaheco, 1. Negotiation/Preparatory offer/Policitation
G.R. No. L-26872, July 25, 1975). 2. Perfection
3. Consummation
2. Simeon cannot justify his refusal to proceed with the
sale by the fact that the deal is financially Q: What is policitation?
disadvantageous to him. Having made a bad bargain is
not a legal ground for pulling out of a binding contract A: Policitation is defined as an unaccepted unilateral
of sale, in the absence of some actionable wrong by promise to buy or sell. This produces no judicial effect and
the other party (Vales v. Villa, G.R. No. 10028, Dec. 16, creates no legal bond. This is a mere offer, and has not yet
1916), and no such wrong has been committed by been converted into a contract. It covers the period from
Bert. the time the prospective contracting parties indicate
interest in the contract to the time the contract is
Q: Spouses Pangan owned a lot and a two-door apartment. perfected. (Villanueva, p. 6).
The wife, Consuelo Pangan agreed to sell the properties to
spouses Perreras. Consuelo received P20,000 from the Q: What are usually included in a policitation?
respondents as earnest money with a receipt that also
contained the terms of agreement. Later on, the parties A: Legal matters arising prior to the perfection of the sale,
agreed to increase the price from P540,000 to P580,000. dealing with concepts of invitation to make offer, offer,
Spouses Perreras issued two checks in compliance to the acceptance, right of first refusal option contract, supply
new agreement amounting to P200,000 and P250,000. agreement, mutual promises to buy and sell or contracts to
Consuelo, however, refused to accept the checks. She sell, and even agency to sell or agency to buy. (Villanueva,
justified her refusal by saying that her children, co-owners p. 135, 2009 ed.)
of the subject properties, did not agree to sell the
properties. Consuelo offered to return the P20,000 earnest Q: What makes an offer certain?
money to the spouses buyers but the latter rejected it.
Hence, Consuelo filed a complaint for consignation. A: An offer is “certain” only where there is an offer to sell
Spouses Perreras insisted on enforcing the agreement, or an offer to buy a subject matter and for a price having all
hence they filed an action for specific performance. In the essential requisites mandated by law.
Consuelo’s answer, she claimed that the contract became
ineffective for lack of the requisite consent from the co- Q: How is an offer accepted?
owners, her children. Decide.
A: The acceptance must be absolute and must not qualify
A: The presence of Consuelo’s consent and, corollarily, the the terms of the offer—it must be plain, unequivocal,
existence of a perfected contract between the parties are unconditional and without variance of any sort from the
further evidenced by the payment and receipt proposal.
of P20,000.00, an earnest money by the contracting
parties’ common usage. The law on sales, specifically

CIVIL LAW
Q: What are the rules in the conception stage about the Q: What is the effect of a separate consideration in an
offer? option contract?
A: A:
RULE 1. With separate consideration:
a. Contract is valid
Offer is Prior to acceptance, may be withdrawn at b. Offeror cannot withdraw offer until after
floated will by offeror but no authority to modify it expiration of the option
Must be accepted within the period, c. Is subject to rescission and damages but not
otherwise, extinguished at the end of specific performance
With a 2. Without separate consideration:
period and may be withdrawn at will by
period a. the option contract is not deemed perfected
offeror but must not be arbitrary,
otherwise, liable for damages b. offer may be withdrawn at any time prior to
acceptance
With a Extinguished by happening/ non-happening
condition of condition Note: However, even though the option was not supported by a
consideration, the moment it was accepted, contract of sale is
without perfected (Art. 1324).
Continues to be valid depending upon
period/
circumstances of time, place and person
condition Q: What are the obligations of the offeror?
With a
counter- Original offer is extinguished A:
offer 1) Not to offer to any third party the sale of the object of
the option during the option period;
2) Not to withdraw the offer or option during the option
Q: What is an option contract? period;
3) To hold the subject matter for sale to the offeree in
A: An option contract is a contract by which the owner of the event that the latter exercises his option during
the property agrees with another person that he shall have the option period.
the right to buy his property at a fixed price within a certain
time. It is binding upon the promisor if the promise is Q: What is the effect of acceptance and withdrawal of the
supported by a consideration distinct from the price. An offer?
option contract is likewise a separate and distinct contract
from a contract of sale. A: If the offer had already been accepted and such
acceptance has been communicated before the withdrawal
Q: What is the nature of an option contract? is communicated, the acceptance creates a perfected
contract, even if no consideration was as yet paid for the
A: It is a preparatory contract in which one party grants to option. In which case, if the offeror does not perform his
another, for a fixed period and at a determined price, the obligations under the perfected contract, he shall be liable
privilege to buy or sell, or to decide whether or not to enter for all consequences arising from the breach thereof based
into a principal contract. It binds the party who has given on any of the available remedies such as specific
the option not to enter into the principal contract with any performance, or rescission with damages in both cases.
other person during the period designated, and within that
period, to enter into such contract with the one whom the Q: What is the right of first refusal?
option was granted, if the latter should decide to use the
option. It is a separate and distinct contract. A: A right of first refusal is a contractual grant, not of the
sale of a property, but of the first priority to buy the
Note: If the option is perfected, it does not result in the perfection property in the event the owner sells the same.
or consummation of the sale. (Diaz, p.7)
Note: Where a time is stated in an offer for its acceptance, the
Q: What is the period within which to exercise the option? offer is terminated at the expiration of the time given for its
acceptance (Pineda, p. 76, 2010 ed.)
A:
1. Within the term stipulated Q: When can the owner offer the sale of the property to a
2. If there is no stipulation, the court may fix the term third person?
Q: How is an option exercised? A: Only after the grantee fails to exercise its right under the
same terms and within the period contemplated can the
A: A notice of acceptance must be communicated to offeror owner validly offer to sell the property to a third person,
even without actual payment as long as payment is again under the same terms as offered to the grantee.
delivered in the consummation stage.

2013 GOLDEN NOTES
SALES
Q: NDC and Firestone entered into a contract of lease third party. Iris filed an action to rescind the sale and to
wherein it is stipulated that Firestone has the right of first compel Andres to sell the property to her at the same
refusal to purchase the leased property "should lessor price. Alternatively, she asked the court to extend the
NDC decide to sell the same”. After the rumor that NDC lease for another two years on the same terms. Can Iris
will transfer the lot to PUP, Firestone instituted an action seek rescission of the sale of the property to
for specific performance to compel NDC to sell the Andres’mother? (2008 Bar Question)
property in its favor. PUP moved to intervene arguing that
the Memorandum issued by then President Aquino A: Iris can seek rescission because pursuant to Equatorial
ordered the transfer of the whole NDC compound to the Realty Co. v. Mayfair Theater rescission is a relief allowed
Government, which in turn would convey it in favor of for the protection of one of the contracting parties and
PUP. Can Firestone exercise its right of first refusal? even third persons from all injury and damage the contract
of sale may cause or the protection of some incompatible
A: Yes. It is a settled principle in civil law that when a lease and preferred right.
contract contains a right of first refusal, the lessor is under
a legal duty to the lessee not to sell to anybody at any price Q: Will the alternative prayer for extension of the lease
until after he has made an offer to sell to the latter at a prosper? (2008 Bar Question)
certain price and the lessee has failed to accept it. The
lessee has a right that the lessor's first offer shall be in his A: No, the extension of the lease should be upon the
favor (PUP v. CA, G.R. No. 143513, Nov. 14, 2001). mutual agreement of the parties.
Q: In a 20-year lease contract over a building, the lessee is Q: Differentiate an option contract from a right of first
expressly granted a right of first refusal should the lessor refusal
decide to sell both the land and building. However, the
lessor sold the property to a third person who knew about A: An option contract is a preparatory contract in which one
the lease and in fact agreed to respect it. Consequently, party grants to another, for a fixed period and at a
the lessee brings an action against both the lessor-seller determined price, the privilege to buy or sell, or to decide
and the buyer (a) to rescind the sale and (b) to compel whether or not to enter into a principal contract.
specific performance of his right of first refusal in the
sense that the lessor should be ordered to execute a deed In a right of first refusal, while the object may be
of absolute sale in favor of the lessee at the same price. determinate, the exercise of the right would be dependent
The defendants contend that the plaintiff can neither seek not only on the grantor’s eventual intention to enter into a
rescission of the sale nor compel specific performance of a binding juridical relation with another but also on terms,
"mere" right of first refusal. Decide the case. (1998 Bar including the price, that are yet to be firmed up. (Diaz, p.
Question) 54)
A: The action filed by the lessee, for both rescission of the OPTION CONTRACT RIGHT OF FIRST REFUSAL
offending sale and specific performance of the right of first Principal contract; stands Accessory; cannot stand on
refusal which was violated, should prosper. If the right of on its own its own
first refusal was violated and the property wa sold to a Needs separate Does not need separate
buyer who was aware of the existence of such right, the consideration consideration
resulting contract is rescissible by the person in whose There must be subject
Subject matter and price
favour the right of first refusal was given and although no matter but price not
must be valid
particular price was stated in the covenant granting the important
right of first refusal, the same price by which the third-party Not conditional Conditional
buyer bought the property shall be deemed to be the price There is no offer to sell, but There is an offer to sell
by which the righ of first refusal shall therefore be only an opportunity for
exercisable (Equitorial Realty Development, Inc. v. Mayfair the buyer to enter into a
Theater, Inc., 264 SCRA 483) contract of sale
Not subject to specific Subject to specific
Note: The offer of the person in whose favor the right of first refusal performance performance
was given must conform with the same terms and conditions as
those given to the offeree.
Q: Is it necessary that the right of first refusal be
embodied in a written contract?
Q: Andres leased his house to Iris for a period of 2 years,
at the rate of P25, 000 monthly, payable annually in
A: Yes, the grant of such right must be clear and express.
advance. The contract stipulated that it may be renewed
for another 2-year period upon mutual agreement of the
Note: It is applicable only to executory contracts and not to
parties. The contract also granted Iris the right of first contracts which are totally or partially performed.
refusal to purchase the property at any time during the
lease, if Andres decides to sell the property at the same If a particular form is required under the Statute of Frauds: sale is
price that the property is offered for sale to a third party. valid & binding between the parties but not to 3rd persons.
Twenty-three months after execution of the lease
contract, Andres sold the house to his mother who is not a

CIVIL LAW
Q: Pozzolanic entered a long-term contract with the by virtue of law or stipulation.

National Power Corporation (NPC) for the purchase of all
fly ash to be produced by the latter’s future power plants. Q: What is the form of acceptance required?
In the contract, NPC granted Pozzolanic a right of first
refusal to purchase the fly ash that may be generated in A: It may be express or implied. Acceptance may be
the future. When NPC’s two new power plants started evidenced by some act, or conduct, communicated to the
operation, it published an invitation to interested buyers offeror, either in a formal or an informal manner, that
for the purchase of the fly ash. Pozzolanic sent letters to clearly manifest the intention or determination to accept
NPC reminding its right of first refusal. NPC deferred its the offer to buy or sell (Villanueva, p. 177, 2009 ed.).
public bidding with the first power plant’s fly ash but it
nevertheless continued with the bidding of the second Q: How is acceptance made?
power plant’s fly ash. Pozzolanic filed a complaint, but
during the pendency of the case NPC decided to likewise A: It is made at the time and place stipulated in the
dispose the fly ash from the first power plant without contract. If there is no stipulation, it shall be made at the
allowing Pozzolanic to exercise its right of first refusal. Can time and place of the delivery of the thing. (Art. 1582, NCC)
Pozzolanic exercise its right of first refusal?
Q: When is it deemed that the buyer has accepted the
A: No. The right of first refusal granted in favour of goods?
Pozazolanic is invalid for being contrary to public policy as
the same violates the requirement of competitive public A:
bidding in the award of government contracts. In this 1. When he intimates to the seller that he has accepted
jurisdiction, public bidding is the established procedure in them
the grant of government contracts. Thus, respondent’s right 2. When the goods have been delivered and he does any
of first refusal cannot take precedence over the dictates of act inconsistent with the ownership of the seller
public policy. The right of first refusal of respondent being 3. When, after the lapse of reasonable time, he retains
invalid, it follows that it has no binding effect. It does not the goods without intimating to the seller that he
create an obligation on the part of petitioner to rejected them (Art. 1585, NCC)
acknowledge the same. (PSALM Corp., vs. Pozzolanic, G.R.
No. 183789, Aug. 24, 2011) Q: What is the rule on refusal to accept the goods by the
buyer?
Q: May the right of first refusal be waived?
A: The buyer is not bound to return the goods to the seller
A: Yes. Like other rights, the right of first refusal may be and it is sufficient that he notifies the seller of his refusal in
waived or when a party entered into a compromise the absence of a contrary stipulation. (Art. 1587, NCC)
agreement. (Diaz, p. 55)
Note: If the refusal is without just cause, the title passes to the
Q: Can a sublessee avail of the right of first refusal of the buyer from the moment the goods are placed at his disposal. (Art.
1588, NCC)
lessee?
A: GR: No. The sublessee is a stranger to the lessor who is Q: What is the rule on the inspection of goods?
bound to respect the right of first refusal in favor of the
lessee only. A: GR: If the goods have not yet been previously examined,
the buyer is not deemed to have accepted them unless and
XPN: When the contract of lease granted the lessee until he has had reasonable to examine them (Art. 1584,
the right to assign the lease, the assignee would be NCC)
entitled to exercise such right as he steps into the
shoes of the original assignee (Villanueva, p. 164, 2009 XPNS:
ed.). 1. The buyer had reasonable time to inspect the
goods but he failed to do so
PERFECTION 2. Stipulation to the contrary
3. C.O.D. sales
Q: When is a contract of sale deemed perfected?
Q: What is the effect and/or consequence of a qualified
A: GR: It is deemed perfected at the moment there is acceptance?
meeting of minds upon the thing which is the object of the
contract and upon the price. (Art.1475, par.1) A: It constitutes merely a counter-offer which must in turn
be accepted to give rise to a valid and binding contract
Note: The acceptance of the offer must be absolute. It must be (Villanueva, p. 171, 2009 ed.).
plain, unequivocal, unconditional and without variance of any sort
from the proposal.
XPN: When the sale is subject to a suspensive condition

2013 GOLDEN NOTES
SALES
Q: When is a contract of sale perfected through a letter or A: No. When Msgr. Cirilos affixed his signature on that
a telegram? letter, he expressed his conformity to the terms of Licup’s
offer appearing on it. There was meeting of the minds as to
A: It is perfected only when the offeror has received or has the object and consideration of the contract. But when
knowledge of the acceptance made by the offeree. Even if Licup ordered a stop-payment on his deposit and proposed
the buyer has accepted, the seller may still withdraw if he in his April 26, 1988 letter to Msgr. Cirilos that the property
does not know yet of the buyer’s acceptance (Pineda, p. 59, be instead transferred to SSE, a subjective novation took
2010 ed.). place. The proposed substitution of Licup by SSE opened
the negotiation stage for a new contract of sale as between
Q: What is the effect of the parties’ failure to appear SSE and the owners (Starbright Sales v. Phil. Realty Corp.,
before the notary public who notarized the deed? et. al, G.R. No. 177936, Jan. 18, 2012).
A: None. The non-appearance of the parties before the Q: Petitioners are the co-owners of undivided shares of
notary public who notarized the deed does not necessarily two parcels of land. Respondent Paraiso Development
nullify nor render the parties' transaction void ab initio. Corporation purchased from them their respective shares
Article 1358, NCC on the necessity of a public document is except for two shares. A Contract to Sell was then
only for convenience, not for validity or enforceability. established, where the petitioner affixed their signatures
Where a contract is not in the form prescribed by law, the thereon. However, the petitioners decided to withdraw
parties can merely compel each other to observe that form, from the said agreement and along with it the request for
once the contract has been perfected. the rescission of the contract which they said they never
signed. They allege there is inability to understand the
Note: Contracts are obligatory in whatever form they may have consequences of the contract. Was the contract perfected
been entered into, provided all essential requisites are present. between the parties?
(Penalosa v. Santos, G.R. No. 133749, Aug. 23, 2001)
A: It is well-settled that contracts are perfected by mere
Q: DBP sought to consolidate its ownership with Paragon consent, upon the acceptance by the offeree of the offer
Paper Industries, Inc. Medrano, President and General made by the offeror. From that moment, the parties are
Manager of Paragon, was instructed to contact all bound not only to the fulfillment of what has been
minority stockholders to convince them to sell their shares expressly stipulated but also to all the consequences which,
to DBP at the price of 65% of the par value. He was able to according to their nature, may be in keeping with good
contact all except for one who was in Singapore. Medrano faith, usage and law. To produce a contract, the acceptance
testified that all have agreed to sell their shares to DBP. must not qualify the terms of the offer. However, the
Paragon made proposals to DBP and the sale was acceptance may be express or implied. For a contract to
approved by a DBP resolution subject to terms and arise, the acceptance must be made known to the offeror.
conditions. However, the required number of shares Accordingly, the acceptance can be withdrawn or revoked
contained in the conditions was not delivered by before it is made known to the offeror. In the case at bar,
Medrano. Is the sale perfected? the Contract to Sell was perfected when the petitioners
consented to the sale to the respondent of their shares in
A: No. DBP imposed several conditions to its acceptance the subject parcels of land by affixing their signatures on
and it is clear that Medrano indeed tried in good faith to the said contract. Such signatures show their acceptance of
comply with the conditions given by DBP but unfortunately what has been stipulated in the Contract to Sell and such
failed to do so. Hence, there was no birth of a perfected acceptance was made known to respondent corporation
contract of sale between the parties (DBP v. Medrano and when the duplicate copy of the Contract to Sell was
PMO, G.R. No. 167004. Feb. 7, 2011). returned to the latter bearing petitioners' signatures
(Rizalino, substituted by his heirs, vs. Paraiso Development
Q: Licup, through a letter, offered to buy parcels of land to Corporation, G.R. No. 157493, February 5, 2007).
The Holy See and Philippine Realty Corporation (PRC). He
enclosed a check for P100,000.00 to “close the Q: When is an auction sale perfected?
transaction” and accepted the responsibility of removing
informal settlers. Msgr. Cirilos, representative of the Holy A: A sale by auction is perfected when the auctioneer
See and PRC signed the conforme portion of the letter and announces its perfection by the fall of the hammer, or in
accepted the check. A stop-payment order was issued by other customary manner. (Art. 1476, par.2)
Licup and the latter requested that the titles to the land
instead be given to SSE. Msgr. Cirilos wrote SSE requesting Q: Does the seller have the right to bid in an auction sale?
to remove the informal settlers, otherwise, the
P100,000.00 would be returned. SSE replied with an A: Yes. The seller has the right to bid provided that such
“updated proposal” that they will comply provided that right was reserved and notice was given to that effect
the purchase price is lowered. The proposal was rejected. (Pineda, p. 53)
The parcel of land was sold to another third person. Is
there a perfected contract of sale between the two
parties?

CIVIL LAW
CONSUMMATION Requisites:
a. The seller must have control over the thing
Q: How does the consummation stage in a contract of sale b. The buyer must be put under control
take place? c. There must be intention to deliver the thing for
purposes of ownership
A: It takes place by the delivery of the thing together with
the payment of the price. i. Tradicion Symbolica – delivery of certain
symbols representing the thing
Note: The ownership of the thing is acquired by the buyer in any of ii. Tradicion Instrumental – delivery of the
the ways specified by law or in any manner agreed upon by the instrument of conveyance
parties.
iii. Traditio Longa Manu – Delivery of thing
by mere agreement; when seller points
Q: A and PDS Development Corp. executed a contract to
to the property without need of actually
sell a parcel of land. A died without having completed the
delivering
installment on the property. His heirs then took over the
iv. Tradicion Brevi Manu – the buyer, being
contract to sell and assumed his obligations by paying the
already in possession of the thing sold
selling price of the lot from their own funds, and
due to some other cause, merely
completed the payment. To whom should the final Deed
remains in possession after the sale is
of Absolute Sale be executed by PDS?
effected, but now in concept of owner.
E.g.From lessee to becoming an owner
A: Having stepped into the shoes of the deceased with
v. Constitutum Possessorium – the seller
respect to the said contract, and being the ones who
remains in possession of the property in
continued to pay the installments from their own funds, A’s
a different capacity. E.g. From owner to
heirs became the lawful owners of the said lot in whose
lessee
favor the deed of absolute sale should have been executed
by vendor PDS (Dawson v. Register of Deeds of Quezon City,
3. Quasi-tradition – delivery of rights, credits or
G.R. No. 120600 Sept. 22, 1998).
incorporeal property, made by:
a. Placing titles of ownership in the hands of the
TRANSFER OF OWNERSHIP
buyer;
b. Allowing buyer to make use of rights
Q: When is ownership deemed transferred?
4. Tradition by operation of law – Execution of a public
instrument is equivalent to delivery. But to be
A: The thing shall be understood as delivered, when it is
effective, it is necessary that the seller have such
placed in the control and possession of the vendee.
control over the thing sold that, at the moment of sale,
its material delivery could have been made.
Note: The most that sale do is to create the obligation to transfer
ownership. It is only the title while the mode of transferring
ownership is delivery. GR: There is presumption of delivery
Q: What is the effect of delivery? XPN:

a. Contrary stipulation;
A: GR: Title /ownership is transferred b. When at the time of execution, subject
matter was not subject to the control of
XPN: Contrary is stipulated as in the case of: seller;
1. Pactum reservatii in domini – agreement that c. Seller has no capacity to deliver at time of
ownership will remain with seller until full execution;
payment of price (Contract to sell) d. Such capacity should subsist for a reasonable
2. Sale on acceptance/approval time after execution of instrument.
3. Sale on return
4. There is implied reservation of ownership Q: When can there be an effective delivery?
Note: Seller bears expenses of delivery. A: Delivery should be coupled with intention of delivering
the thing, and acceptance on the part of the buyer to give
Q: What are the different kinds of delivery? legal effect of the act. Without such intention, there is no
such tradition.
A:
1. Actual – thing sold is placed under the control and Q: How is incorporeal property delivered?
possession of buyer/agent;
2. Constructive – does not confer physical possession of A:
the thing, but by construction of law, is equivalent to 1. When sale is made through a public instrument (Art.
acts of real delivery. 1498, NCC)
2. By placing the titles of ownership in the possession of
the buyer

2013 GOLDEN NOTES
SALES
3. When buyer uses and enjoys the rights pertaining to possession of the property. Is there a constructive delivery
the incorporeal property with the consent of the seller of the subject properties?
(Art. 1501, NCC).
A: None. As a general rule, when the sale is made through a
Q: Lagrimas Boy borrowed P15,000 from spouses Ramos. public instrument, the execution thereof shall be equivalent
Thereafter, Boy executed a Deed of Absolute Sale with the to the delivery of the thing which is the object of the
Ramoses involving a house and lot. The price agreed upon contract, if from the deed the contrary does not appear or
was P31,000. It was alleged that Boy’s debt is to be cannot clearly be inferred. And with regard to movable
deducted, so the spouses needed only to pay P16,000. property, its delivery may also be made by the delivery of
Because the Ramoses were not yet in immediate need of the keys of the place or depository where it is stored or
the properties, Lagrimas stayed therein. Later on, kept. In order for the execution of a public instrument to
Lagrimas went to the wife, Erlinda, asking that they effect tradition, the purchaser must be placed in control of
execute a Kasunduan. In the Kasunduan, it states that the the thing sold. However, the execution of a public
spouses still had a remaining balance of P16,000 and that instrument only gives rise to a prima facie presumption of
interest is to be deducted in favor of the spouses so that delivery. Such presumption is destroyed when the delivery
would leave a balance of P8,500. The Kasunduan was is not effected because of a legal impediment. It is
notarized, however Erlinda changed her mind upon necessary that the vendor shall have control over the thing
signing. According to her, she realized that they already sold that, at the moment of sale, its material delivery could
paid P31,000 to Lagrimas when the Deed of Sale was have been made. Thus, a person who does not have actual
executed. When the spouses Ramos already needed to possession of the thing sold cannot transfer constructive
occupy the land, Lagrimas refused to vacate. She invoked possession by the execution and delivery of a public
the Kasunduan. Decide. instrument. In this case, there was no constructive
delivery of the machinery and equipment upon the
A: Under Article 1477 of the Civil Code, the ownership of execution of the deed of absolute sale or upon the issuance
the thing sold shall be transferred to the vendee upon the of the gate pass since it was not petitioner but Creative
actual or constructive delivery thereof. In addition, Article Lines which had actual possession of the property. The
1498 of the Civil Code provides that when the sale is made presumption of constructive delivery is not applicable as it
through a public instrument, as in this case, the execution has to yield to the reality that the purchaser was not placed
thereof shall be equivalent to the delivery of the thing in possession and control of the property. (Asset
which is the object of the contract, if from the deed the Privatization Trust v. T.J. Enterprises, G.R. No. 167195, May
contrary does not appear or cannot clearly be inferred. In 8, 2009)
this case, the Deed of Absolute Sale does not contain any
stipulation against the constructive delivery of the property Q: Given that actual possession, control and enjoyment is
to private respondents. In the absence of stipulation to the a main attribute of ownership, is symbolic delivery by
contrary, the ownership of the property sold passes to the mere execution of the deed of conveyance sufficient to
vendee upon the actual or constructive delivery thereof. convey ownership over property?
The Deed of Absolute Sale, therefore, supports private
respondents’ right of material possession over the subject A: Yes, possession is also transferred along with ownership
property (Boy v. Court of Appeals, et. al, G.R. No. 125088, thereof by virtue of the deed of conveyance. The mere
April 14, 2004). execution of the deed of conveyance in a public document
is equivalent to the delivery of the property, prior physical
Q: Asset Privatization (petitioner) entered into an delivery or possession is not legally required. The deed
absolute deed of sale over certain machinery and operates as a formal or symbolic delivery of the property
refrigeration equipment with T.J. Enterprises (respondent) sold and authorizes the buyer or transferee to use the
on an as-is-where-is basis. Respondent paid the full document as proof of ownership. Nothing more is required
amount of P84,000.00 as evidenced by a receipt. After two (Sps. Sabio v. International Corporate Bank, Inc. et. at. G.R.
days, respondent demanded the delivery of the No. 132709, Sept. 4, 2001).
machinery. The subject properties were located in a
compound under the possession of Creative Lines, Inc. Q: Spouses Bernal purchased a jeepney from Union Motor
Some time after, respondent was able to pull out from the to be paid in installments. They then executed a
petitioner’s compound the subject by means of a gate promissory note and a deed of chattel mortgage in favor
pass issued by the petitioner. However, during the hauling of Union Motor which in turn assigned the same with
of the second lot, only nine items were pulled out instead Jardine Finance. To effectuate the sale as well as the
of sixteen because Creative Lines’ employees prevented assignment of the promissory note and chattel mortgage,
respondent from hauling the remaining machinery and the spouses were required to sign documents, one of
equipment. Respondent filed a complaint for specific which was a sales invoice. Although the Spouses have not
performance and damages against petitioner and Creative yet physically possessed the vehicle, Union Motor’s agent
Lines. Petitioner argued that upon the execution of the required them to sign the receipt as a condition for the
deed of sale it had complied with its obligation to deliver delivery of the vehicle. It was discovered that the said
the object of the sale since there was no stipulation to the agent stole the vehicle even prior to its delivery to the
contrary. It further argued that being a sale on an as-is- spouses. Was there a transfer of ownership of the subject
where-is basis, it was the duty of respondent to take vehicle?

CIVIL LAW
A: No. The issuance of a sales invoice does not prove Q: When should the object be delivered?
transfer of ownership of the thing sold to the buyer; an
invoice is nothing more than a detailed statement of the A:
nature, quantity and cost of the thing sold and has been 1. Stipulated time
considered not a bill of sale. 2. If there is none, at a reasonable hour.
The registration certificate signed by the spouses does not Q: Where is the place of delivery?
conclusively prove that constructive delivery was made nor
that ownership has been transferred to the respondent A:
spouses. Like the receipt and the invoice, the signing of the 1. That agreed upon
said documents was qualified by the fact that it was a 2. Place determined by usage of trade
requirement of Union Motor for the sale and financing 3. Seller’s place of business
contract to be approved. In all forms of delivery, it is 4. Seller’s residence
necessary that the act of delivery, whether constructive or 5. In case of specific goods, where they can be found
actual, should be coupled with the intention of delivering
the thing. The act, without the intention, is insufficient. Q: What are the effects of a sale of goods on installment?
Inasmuch as there was neither physical nor constructive
delivery of a determinate thing, (in this case, the subject A:
motor vehicle) the thing sold remained at the seller’s risk. 1. Goods must be delivered in full except when stipulated
The Union Motor should therefore bear the loss of the 2. When not examined by the buyer – it is not accepted
subject motor vehicle after its agent allegedly stole the until examined or at least had reasonable time to
same (Union Motor Corp. v. CA, G.R. No. 117187, July 20, examine
2001).
Q: When is the seller not bound to deliver the thing sold?
Q: Can delivery be effected through a carrier?
A:
A: GR: Yes, if the seller is authorized. Delivery to carrier is 1. If the buyer has not paid the price;
delivery to the buyer. 2. No period for payment has been fixed in the contract;
XPN: 3. A period for payment has been fixed in the contract
1. A contrary intention appears but the buyer has lost the right to make use of the
2. Implied reservation of ownership under Art. 1503, time.
pars 1, 2, 3.
Q: When may the buyer suspend payment of the price?
Q: What are the kinds of delivery to carrier?
A: GR:
A: 1. If he is disturbed in the possession or ownership
1. FAS (Free Along Side) – when goods are delivered of the thing bought
alongside the ship, there is already delivery to the 2. If he has well-grounded fear that his possession
buyer or ownership would be disturbed by a vindicatory
2. FOB (Free On Board) – when goods are delivered at the action or foreclosure of mortgage.
point of shipment, delivery to carrier by placing the
goods on vessel is delivery to buyer XPN:
3. CIF (Cost, Insurance, Freight) – 1. Seller gives security for the return of the price in a
a. When buyer pays for services of carrier, delivery proper case;
to carrier is delivery to buyer, carrier as agent of 2. A stipulation that notwithstanding any such
buyer; contingency, the buyer must make payment;
b. When buyer pays seller the price – from the 3. Disturbance or danger is caused by the seller;
moment the vessel is at the port of destination, 4. If the disturbance is a mere act of trespass;
there is already delivery to buyer 5. Upon full payment of the price.
4. COD (Collect On Delivery) – the carrier acts for the
seller in collecting the purchase price, which the buyer Q: Is payment of the purchase price essential to transfer
must pay to obtain possession of the goods. ownership?
Q: What are the seller’s duties after delivery to the A: Unless the contract contains a stipulation that ownership
carrier? of the thing sold shall not pass to the purchaser until he has
fully paid the price, ownership of the thing sold shall be
A: transferred to the vendee upon the actual or constructive
1. To enter on behalf of the buyer into such contract delivery thereof (Diaz, p. 48).
reasonable under the circumstances;
2. To give notice to the buyer regarding necessity of
insuring the goods.

2013 GOLDEN NOTES
SALES
Q: How may the buyer accept the delivery of the thing XPN: Third person acknowledges to the buyer that he
sold? holds the goods in behalf of the buyer (Art. 1521, NCC)
A: 7. On sale or return – The ownership passes to buyer

1. Express – he intimates to seller that he has accepted upon delivery, but he may revest ownership in the
2. Implied seller by returning or tendering the goods within the
a. Buyer does not act inconsistent with ownership of time fixed in the contract or within reasonable time.
seller after delivery (Art. 1502, NCC)
b. Retains without intimating to seller that he has
rejected Q: What is sale on trial, approval or satisfaction?
Q: What is the effect if the buyer refuses to accept despite A: It is a contract in the nature of an option to purchase if
delivery of the object of the sale? the goods prove to be satisfactory, the approval of the
buyer being a condition precedent.
A: Delivery is completed. Since delivery of the subject
matter of the sale is an obligation on the part of the seller, Q: In this kind of sale, when is ownership deemed
the acceptance thereof by the buyer is not a condition for transferred?
the completeness of the delivery (Villanueva, p. 117)
A:
Note: Thus, even with such refusal of acceptance, delivery 1. When buyer signifies approval or acceptance to the
(actual/constructive), will produce its legal effects. (e.g. seller or does any act adopting the transaction
transferring the risk of loss of the subject matter to the buyer who 2. If buyer did not signify approval or acceptance, but
has become the owner thereof) (Villanueva, p. 117)
retains the goods without giving notice of rejection
Under Art. 1588, when the buyer’s refusal to accept the goods is after the expiration of the period fixed or of
without just cause, the title thereto passes to him from the reasonable time (Art. 1502, NCC)
moment they are placed at his disposal. (Villanueva, p. 117)
Q: What are the rules in case of sale on trial, approval or
WHEN DELIVERY DOES NOT TRANSFER TITLE satisfaction?
Q: When does delivery does not transfer title? A:

Title Who bears the loss
A: GR: Borne by seller
1. Sale on Trial, Approval, or Satisfaction XPN:
2. When there is an EXPRESS RESERVATION Risk of Loss 1. Buyer is at fault
a. If it was stipulated that ownership shall not pass 2. Buyer agreed to bear
to the purchaser until he has fully paid the price the loss
(Art. 1478) GR: Buyer must give goods a
3. When there is an IMPLIED RESERVATION trial
a. When goods are shipped, but the bill of lading As to trial XPN: Buyer need not do so if
states that goods are deliverable to the seller or it is evident that it cannot
his agent, or to the order of the seller or his agent perform the work.
b. When the bill of lading is retained by the seller or
his agent When period within It runs only when all the parts
c. when the seller of the goods draws on the buyer which buyer must signify essential for the operation of
for the price and transmits the bill of exchange his acceptance runs the object has been delivered
and the bill of lading to the buyer , and the latter
does not honor the bill of exchange by returning Validity of stipulation that rd
rd Valid, provided the 3 person
the bill of lading to the seller a 3 person must satisfy
is in good faith
4. When sale is not VALID approval or satisfaction
5. When the seller is not the owner of the goods
If the sale is made to a
Generally, it cannot be
XPNs: buyer who is an expert on
considered a sale on approval
a. Estoppel: when the owner is precluded from the object purchased
denying the sellers authority to sell
b. Registered land bought in good faith: Ratio: Buyer DOUBLE SALE
need not go beyond the Torrens title
c. Order of Courts in a Statutory Sale Q: When is there a double sale?
d. When the goods are purchased in a Merchant’s
store, Fair or Market (Art. 1505) A: There is double sale when the same object of the sale is
sold to different vendees.
6. When goods are held by a third party
Note: Requisites:
1. Same subject matter

CIVIL LAW
2. Same immediate seller 4. If the marriage has been legally dissolved, when and
3. Two or more different buyers how the marriage relation terminated
4. Both sales are valid 5. Full names and addresses of all occupants of the land
and those of the adjoining owners, if known, and, if
Q: What is the rule on double sale? not known, it shall state the extent of the search made
to find them.
A: First in time, priority in right
Q: Suppose the applicant is a non-resident of the
Note: Rule on Double Sale regarding immovables: Philippines, what are the requirements?
GR: Apply Art.1544
XPN: Sale of registered lands – apply Torrens System A: He shall file with his application an instrument in due
form appointing an agent or representative residing in the
Q: What are the rules according to Article 1544 of the Civil Philippines, giving his full name and postal address, and
Code? shall therein agree that the service of any legal process in
the proceedings under or growing out of the application
A: made upon his agent or representative shall be of the same
1. Movable – Owner who is first to possess in good faith legal effect as if made upon the applicant within the
2. Immovable – Philippines.
a. First to register in good faith
b. No inscription, first to possess in good faith Q: In the registration of a voluntary instrument, is a
c. No inscription & no possession in good faith – duplicate of certificate of title required?
Person who presents oldest title in good faith
A: GR: Yes. No voluntary instrument shall be registered by
Q: Does prior registration by the second buyer of a the Register of Deeds, unless the owner's duplicate
property subject of a double sale confer ownership or certificate is presented with such instrument.
preferred right in his favor over that of the first buyer? XPN: In cases expressly provided for in the decree or
upon order of the court, for cause shown.
A: Prior registration of the disputed property by the second
buyer does not by itself confer ownership or a better right Q: What is the effect of the production of a duplicate
over the property. Article 1544 requires that such certificate of title?
registration must be coupled with good faith.
A: It shall be conclusive authority from the registered
Knowledge gained by the first buyer of the second sale owner to the Register of Deeds to enter a new certificate or
cannot defeat the first buyer's rights except where the to make a memorandum of registration in accordance with
second buyer registers in good faith the second sale ahead such instrument, and the new certificate or memorandum
of the first, as provided by the Civil Code. shall be binding upon the registered owner and upon all
persons claiming under him, in favor of every purchaser for
Knowledge gained by the second buyer of the first sale value and in good faith.
defeats his rights even if he is first to register the second
sale, since such knowledge taints his prior registration with Q: What are the other payments to be made by the seller
bad faith (Art. 1544) (Uraca, et. al v. CA, G.R. No. 115158, in the registration of property?
Sept. 5, 1997)
A: The seller should pay capital gains tax and documentary
PROPERTY REGISTRATION DECREE registration fees. The rate of capital gains tax is 6% of
capital gains based on purchase price, fair market value or
Q: What are the rules in the application for land zonal value, whichever is higher.
registration?
Q: Spouses Guimba are the registered owners of a parcel
A:
of land. The wife entrusted her copy of the Owner’s
1. The application for land registration shall be in writing
and signed by the applicant or the person duly Duplicate Certificate of Title to De La Cruz as collateral for
authorized in his behalf. It shall be sworn in the place a loan. Later on, De La Cruz received a phone call from the
where it was signed. wife, informing her that she had changed her mind and
2. If there is more than one applicant, the application will no longer obtain the loan, consequently asking for her
shall be signed and sworn to by and in behalf of each. TCT back. However, the certificate had been deposited in
a bank. When she inquired at the bank, they told her that
Q: What shall be contained in the application? the certificate was not there. The wife received a telegram
from Abad reminding her of the maturity of her mortgage.
A: The spouses were not aware of any actual mortgage
1. Description of the land
involving their property until the receipt of such telegram.
2. Citizenship and civil status of the applicant
Hence, the spouses filed an adverse claim. Abad, in his
3. If married, the name of the wife or husband
answer, alleged that spouses Guimba made a connivance

2013 GOLDEN NOTES
SALES
with De La Cruz to defraud him. Is Abad an innocent 3. In sheriff’s sales (Art. 1570)
holder for value? 4. Tax sales (Art. 1547, last paragraph)
A: The main purpose of land registration, covered by PD Note: In the above sales, there is no warranty of title or quality on
the part of the seller. The purchaser who buys without checking
1529, is to facilitate transactions relative to real estate by the title of the vendor is assuming all risks of eviction.
giving the public the right to rely upon the face of the
Torrens certificate of title. Therefore, as a rule, the In sheriff’s sales, the sheriff does not guarantee the title to real
purchaser is not required to explore further than what the property and it is not incumbent upon him to place the buyer in
Certificate indicates on its face. This rule however possession of such property (Pineda sales, p. 275).
applies only to innocent purchasers for value and in good
faith; it excludes a purchaser who has knowledge of a Q: Is caveat emptor applicable in sales of registered land?
defect in the title of the vendor, or of facts sufficient to
induce a reasonably prudent man to inquire into the status A: No. The purchaser of a registered land under the Torrens
of the property. Under Section 32 of PD 1529, an innocent system is merely charged with notice of the burdens and
purchaser for value is deemed to include an innocent claims on the property which are inscribed on the face of
mortgagee for value. By insisting on the application of PD certificate of title. (Pineda sales, p. 275)
1529 in his favor, petitioner begs the question. He invokes
Sections 52 and 53 of the law, which Q: Does caveat emptor apply in judicial sales?
protects innocent mortgagees for value, but which the RTC
has already determined he was not. As already discussed, A: Yes. The purchaser in a judicial sale acquires no higher or
such factual determination by the trial court is conclusive, better title or right than that of the judgment debtor. If it
because he did not question it in the proper forum. The happens that the judgment debtor has no right, interest, or
logical consequence, therefore, is the inapplicability of the lien on and to the property sold, the purchaser acquires
said law to his factual situation. Preliminarily, we should none (Pineda sales, p. 280).
stress that the remedy of appeal by certiorari under Rule 45
of the Rules of Court contemplates only questions of law, Q: Juliet offered to sell her house and lot, together with all
not of fact. Therefore, a party who files a Rule 45 petition the furniture and appliances therein, to Dehlma. Before
waives the opportunity to inquire into the findings of fact of agreeing to purchase the property, Dehlma went to the
the lower court. Coming to the present case, the Register of Deeds to verify Juliet’s title. She discovered
paramount question regarding the good faith of petitioner that while the property was registered in Juliet’s name
is obviously one of fact. (Abad v. Spouses Guimba, G.R. No. under the Land Registration Act, as amended by the
157002, July 29, 2005) Property Registration Decree, it was mortgaged to Elaine
to secure a debt of P80, 000. Wanting to buy the property,
Q: Explain the principle of prius tempore, potior jure. Dehlma told Juliet to redeem the property from Elaine,
and gave her an advance payment to be used for purposes
A: Knowledge by the first buyer of the second sale cannot of releasing the mortgage on the property. When the
defeat the first buyer’s rights except when the second mortgage was released, Juliet executed a Deed of
buyer first registers in good faith the second sale. Absolute Sale over the property which was duly registered
Conversely, knowledge gained by the second buyer of the with the Registry of Deeds, and a new TCT was issued in
first sale defeats his rights even if he is first to register, Dehlma’s name. Dehlma immediately took possession
since such knowledge taints his registration with bad faith over the house and lot and the movables therein.
nd
to merit the protection of Art. 1544 (2 par.), the second Thereafter, Dehlma went to the Assessor’s Office to get a
realty buyer must act in good faith in registering his deed of new tax declaration under her name. She was surprised to
sale (Diaz, p. 125). find out that the property was already declared for tax
purposes in the name of XYZ Bank which had foreclosed
Note: Where one sale is absolute and the other is a pacto de retro the mortgage on the property before it was sold to her.
transaction where the period to redeem has not yet expired, Art. XYZ Bank was also the purchaser in the foreclosure sale of
1544 will not apply (Pineda, p. 223). the property. At that time, the property was still
unregistered but XYZ Bank registered the Sheriff’s Deed of
Q: What does the principle of caveat emptor mean? Conveyance in the day book of the Register of Deeds
under Act 3344 and obtained a tax declaration in its name.
A: It literally means, ‘Let the buyer beware’. The rule Was Dehlma a purchaser in good faith? (2008 Bar
requires the purchaser to be aware of the supposed title of Question)
the vendor and one who buys without checking the
vendor’s title takes all the risks and losses consequent to A: Yes, Dehlma is a purchaser in good faith. She learned
such failure (Agcaoili, p. 184) about the XYZ tax declaration and foreclosure sale only
after the sale to her was registered. She relied on the
Q: In what particular sale transactions does caveat emptor certificate of title of her predecessor-in-interest. Under the
apply? Torrens System, a buyer of registered lands is not required
by law to inquire further than what the Torrens certificate
A: indicates on its face. If a person proceeds to but it relying
1. Sales of animals (Art. 1574) on the title, that person is considered a buyer in good faith.
2. Double sales (Art. 1544)

CIVIL LAW
The “priority in time” rule could not be invoked by XYZ Bank Q: What is the effect suppose the buyer chooses to
because the foreclosure sale of the land in favour of the continue with the sale of the remaining goods?
bank was recorded under Act 3344, the law governing
transactions affecting unregistered land, and thus, does not A: The remaining goods shall pass in ownership to the
bind the land. buyer but subject to proportionate reduction of the price.
But this is applicable only if the goods are divisible or
Q: Who as between Dehlma and XYZ Bank has a better capable of being divided (Pineda, p. 122, 2010 ed.). If
right to the house and lot? indivisible, the only option available is the avoidance of the
sale.
A: Between Dehlma and the bank, the former has a better
right to the house and lot. Q: Who bears the risk of loss or deterioration?
Q: Who owns the movables inside the house? A:

BEFORE Res perit domino – Seller is the owner so
A: Unless there is a contrary stipulation in the absolute PERFECTION seller bears risk of loss
deed of sale, Dehlma owns the movables covered by the
Deed of Sale and her ownership is perfected by the Res perit domino
execution and delivery of public document of sale. The
delivery of the absolute deed of sale is a symbolical delivery AT Contract shall be without any effect – the
of the house and lot, including the contents of the house. PERFECTION seller bears the loss since the buyer is
This is an obligation to deliver a specific thing, which relieved of his obligation under the
includes the delivery of the specific thing itself and all of its contract
accessions and accessories even though they may not have AFTER
been mentioned (Art. 1166, CC). PERFECTION Seller;
BUT Deterioration & fruits – Buyer bears loss
RISK OF LOSS BEFORE (Tolentino)
DELIVERY
Q: When is a thing considered lost? Buyer becomes the owner so buyer bears
risk of loss
A: It is understood that the thing is lost when it: AFTER
1. perishes, or DELIVERY Delivery extinguish ownership vis-a-vis
2. goes out of commerce, or the seller & creates a new one in favor of
3. disappears in such a way that its existence is the buyer
nd
unknown or cannot be recovered. (Art. 1189, 2
par.) DOCUMENTS OF TITLE
XPN: In an obligation to deliver a generic thing, the loss Q: What is a Document of Title?
or destruction of anything of the same kind does not
extinguish the obligation (Art. 1263, NCC) A: A document used in the ordinary course of business in
the sale or transfer of goods , as proof of the possession or
Q: What is the effect when the loss occurred at the time of control of the goods , or authorizing or purporting to
perfection of the contract of sale? authorize the possessor of the document to transfer or
receive, either by endorsement or by delivery, goods
A: GR: When the object of the contract is entirely lost, the represented by such document (Art. 1636).
contract shall be without effect.
Q: What may be considered as a document of title?
XPN: In case of partial loss, the buyer may choose
between withdrawing from the contract and A: A document of title of goods includes any bill of lading,
demanding the remaining part. If he chooses the dock warrant, quedan, or warehouse receipt or order
latter, he shall pay the remaining part’s corresponding (Villanueva, p. 301, 2009 ed.)
price in proportion to the total sum agreed upon. (Art.
1493, NCC) Q: What is the purpose of the Documents of Title?
Q: In the total or partial loss or deterioration of a mass of A:

specific goods without the knowledge of the seller, what 1. Evidence of possession or control of goods described
are the options of the buyer with regard to the sale? therein
2. Medium of transferring title and possession over the
A: goods described therein without having to effect
1. He may treat the sale as avoided or cancelled actual delivery (Villanueva, 2009 ed.)
2. He may continue with the sale with respect to the 3. The custody of a negotiable warehouse receipts issued
available or remaining goods. (Art. 1494, NCC) to the order of the owner, or to bearer, is a
representation of title upon which bona fide

2013 GOLDEN NOTES
SALES
purchasers for value are entitled to rely , despite hold possession of the goods for him according to
breaches of trust or violations of agreement on the the terms of the document.
part of the apparent owner (Siy Cong Bieng v. HSBC, 56
Phil 598) Q: How may the transferor’s creditor defeat the
aforementioned rights of the transferee?
Q: What is the rationale behind a document of title?
A: Prior to the notification to such bailee by the transferor
A: Merchants are able to transact with goods and or transferee of a non-negotiable document of title, the
merchandise without having to physically carry them title of the transferee to the goods and the right to acquire
around, and that buyers should be assured that they may the obligation of such bailee may be defeated by the
deal with the evidence thereof with the same effect as transferor’s creditor by the levy of an attachment or
though they could feel the merchandise themselves execution upon the goods. (Art. 1514, NCC)
(Villanueva, p. 303, 2009 ed.)
Q: If the goods are delivered to a bailee by the owner or
Q: What is a Negotiable Document of Title? by a person whose act in conveying the title to them to a
purchaser in good faith for value and a negotiable
A: A document of title which states that the goods referred instrument was issued for them, can the said goods be
therein will be delivered to the bearer, or to the order of attached, garnished or levied upon?
any person named in such document (Art. 1509, NCC).
A: GR: No, the goods cannot be attached, garnished or
Q: Who may negotiate a Negotiable Document of Title? levied upon while they are in the bailee’s possession.
A: XPN:
1. Owner 1. When the document is first surrendered; or
2. Person to whom the possession or custody of the 2. When its negotiation is enjoined.
document has been entrusted by the owner
a. If bailee undertakes to deliver the goods to such Note: The bailee shall in no case be compelled to deliver the
person actual possession of the goods until the document is:
b. If document is in such form that it may be 1. Surrendered to him; or
2. Impounded by the court.
negotiated by delivery.
(Art. 1519, NCC)
Q: What are Non-negotiable documents of title?

Q: What is the reason behind this prohibition?
A:
A: This is to protect the bailee from liability as the
1. They are delivered only to a specified person
document may have been negotiated by the holder to
2. Carrier will not deliver the goods to any holder of the
subsequent transferees for value and in good faith. He may
document or to whom such document may have been
be liable for damages if he cannot produce and deliver the
endorsed by the consignee
goods later (Pineda, p. 181, 2010 ed).
3. Must present the deed of sale or donation in his favor
Q: What are the rights of a creditor whose debtor is the
Q: What are the warranties of seller of documents of title?
owner of a negotiable document of title?
A:
A: He is entitled to such aid from courts of appropriate
1. Genuineness of the Document
jurisdiction by:
2. Legal right to negotiate or transfer
1. injunction;
3. No knowledge of fact which would impair the validity
2. attaching such document;
or worth of the document
3. as regards property which cannot be readily
4. Right to transfer Title to the goods and merchantability
attached or levied upon by ordinary legal process
or fitness for a particular purpose, whenever such
- satisfying the claim by means allowed by law or
warranties would have been implied had the contract
equity. (Art. 1520, NCC)
transfer the goods without a document.
REMEDIES OF AN UNPAID SELLER
Q: What does a person to whom a non-negotiable
instrument has been transferred but not negotiated,
Q: Who is an unpaid seller?
acquire as against the transferor?
A: The seller of goods is deemed to be an unpaid seller
A: He acquires:
either:
1. Title to the goods, subject to the terms of any
1. when the whole of the price has not been paid or
agreement with the transferor;
tendered;
2. Right to notify the bailee who issued the
2. when a bill of exchange or other negotiable
document of the transfer thereof, and thereby to
instrument has been received as conditional
acquire the direct obligation of such bailee to
payment, and the condition on which it was

CIVIL LAW
received has been broken by reason of the 3. Special Right to Resell the Goods
dishonor of the instrument, the insolvency of the Exercised when:
buyer, or otherwise. a. Goods are perishable,
b. Stipulated the right of resale in case of
Note: The mere delivery of a negotiable instrument default, or
does not ipso facto extinguish the obligation of the c. Buyer in default for unreasonable time
buyer to pay because the instrument which has been
delivered may be dishonoured. In which case, the seller
4. Special Right to Rescind
is still an unpaid seller. (US v. Bedoya, 14 Phil. 398)
Requisites:
Note: It includes an agent of the seller to whom the bill of lading a. Expressly stipulated OR buyer is in default
has been indorsed, or consignor or agent who has himself paid, or for unreasonable time
is directly responsible for the price, or any other person who is in b. Notice needed to be given by seller to buyer
the position of a seller (Pineda, p. 197, 2010 ed)
Q: What are the instances when possessory lien is lost?
Q: When may the seller still be considered as unpaid even
though the title to the goods has passed to the buyer? A:
1. Seller delivers without reserving ownership in goods or
A: Whenever the seller was only paid partially, he remains right to possess them
an unpaid seller (Pineda, p. 197, 2010 ed.) 2. Buyer or agent lawfully obtains possession of goods
3. Waiver
Q: What are the remedies of an Unpaid Seller?
Note: Seller loses lien when he parts with goods (but still, stoppage
A: in transitu can be exercised)
I. Ordinary
1. Action for Price Q: What is the right of stoppage in transitu?
Exercised when:
a. ownership has passed to buyer; A: The seller may resume possession of the goods at any
b. price is payable on a day certain time while they are in transit, and he will then become
c. goods cannot readily be resold for entitled to the same rights in regard to the goods as he
reasonable price and Art. 1596 is would have had if he had never parted with the possession.
inapplicable (Art. 1530, NCC)
2. Action for Damages – In case of wrongful neglect
or refusal by the buyer to accept or pay for the Q: When are goods considered to be in transit?
thing sold
II. Special A:
1. Possessory Lien – Seller not bound to deliver if 1. After delivery to a carrier or other bailee and before
buyer has not paid him the price. This remedy the buyer or his agent takes delivery of them; and
presupposes that the sale is on credit. It is 2. If the goods are rejected by the buyer, and the carrier
exercisable only in following circumstances: or other bailee continues in possession of them. (Art.
a. goods sold without stipulation as to credit 1531, par. 1)
b. goods sold on credit but term of credit has
expired Q: When are goods deemed to be no longer in transit?
c. buyer becomes insolvent
A:
Note: When part of goods delivered, may still exercise 1. After delivery to the buyer or his agent
right on goods undelivered 2. If the buyer/agent obtains possession of the goods at a
point before the destination originally fixed;
2. Stoppage in Transitu 3. If the carrier or the bailee acknowledges that he holds
the goods in behalf of the buyer/ his agent;
Requisites: I-CSENT-U 4. If the carrier or bailee wrongfully refuses to deliver the
a. Insolvent buyer goods to the buyer or his agent. (Villanueva, p. 181)
b. The sale of goods must be on credit
c. Seller must Surrender the negotiable Q: How is stoppage in transit carried out?
document of title, if any
d. Seller must bear the Expenses of delivery of A: The seller may:
the goods after the exercise of the right. a. Take actual possession of the goods
e. Seller must either actually take possession of b. Give notice of his claim to the carrier or other
the goods sold or give Notice of his claim to bailee who is in possession of the goods
the carrier or other person in possession
f. Goods must be in Transit
g. Unpaid seller

2013 GOLDEN NOTES
SALES
Q: What is the effect of the exercise of this right? Note: Art. 1484 of the NCC incorporates the provisions of Act No.
4122 passed by the Philippine Legislature on Dec. 9, 1939, known
A: Thereafter the seller becomes entitled to the same rights as the "Installment Sales Law" or the "Recto Law," which then
amended Art. 1454 of the Civil Code of 1889.
to the goods as if he had never parted with the possession
of the goods (Pineda, p. 205, 2010 ed)
Q: To what does the Recto Law apply?
Q: What if the seller knew of the insolvency of the buyer
A: This law covers contracts of sale of personal property by
beforehand?
installments (Act No. 4122). It is also applied to contracts
purporting to be leases of personal property with option to
A: Then he cannot exercise the right to stoppage in transit
buy, when the lessor has deprived the lessee of the
because he is under estoppel. He assumed the risk.
possession or enjoyment of the thing. (PCI Leasing and
Finance Inc. v. Giraffe- X Creative Imaging, Inc., G.R. No.
Q: What is the rationale behind the right of stoppage in
142618, July 12, 2007)
transitu?
Q: What are the alternative remedies in case of sale of
A: To prevent injustice of allowing the buyer to acquire
personal property in installments?
ownership and possession of the goods when owing to his
insolvency, he cannot pay the price. (Pineda, p. 206, 2010
A:
ed)
1. Specific Performance: Exact fulfillment should the
buyer fail to pay
Q: What is the effect of exercising the special right of
resale?
GR: If availed of, the unpaid seller cannot anymore
choose other remedies;
A: The unpaid seller shall not be liable to the original buyer
upon the sale or for any profit made by such resale, but
XPN: if after choosing, it has become impossible,
may recover from the buyer damages for any loss
rescission may be pursued
occasioned by the breach of the sale. (Art. 1533, NCC)
2. Rescission: Cancel the sale if buyer fails to pay 2 or
Q: Is notice to the defaulting buyer required in the resale
more installments. Deemed chosen when:
of goods?
a. Notice of rescission is sent
b. Takes possession of subject matter of sale
A: GR: No.
c. Files action for rescission
3. Foreclosure: Foreclose on chattel mortgage if buyer
XPN: Where the right to resell is not based on the
fails to pay 2 or more instalments. He shall have no
perishable nature of the goods or upon an express
further action against the purchaser to recover any
provision of the sale.
unpaid balance of the price. Any agreement to the
Note: Notice of time and place of resale is not essential to the contrary shall be void.
validity of such resale. (Art. 1433, NCC)
GR: Actual foreclosure is necessary to bar recovery of
Q: What is the effect of exercising the special right to balance
rescind?
XPN: Mortgagor refuses to deliver property to effect
A: The unpaid seller shall not be liable to the buyer upon foreclosure; expenses incurred in attorneys fees,
the sale, but may recover from the buyer damages for any etc.
loss occasioned by the breach of the sale. (Art. 1534, NCC)
Note: The remedies are alternative not cumulative. Availment of
one is a bar to the other remedies
Q: When is a buyer deemed insolvent?
Q: What is the rationale of Recto Law?
A: One is deemed insolvent when he either ceased to pay
his debts in the ordinary course of business or cannot pay
A: To remedy the abuses committed in connection with the
his debts as they become due, whether insolvency
foreclosure of chattel mortgages and to prevent
proceedings have been commenced or not. (Villanueva, p.
mortgagees from seizing the mortgaged property, buying it
369, 2009 ed.)
at a foreclosure sale for a low price and then bringing suit
against the mortgagor for a deficiency judgment
Q: What is the Installment Sales Law?
(Villanueva, p. 278, 2009 ed.)
A: Commonly known as the Recto Law. It is embodied in
Q: A, sold and delivered a car to B which was to be paid on
Art. 1484 of the NCC which provides for the remedies of a
a monthly basis. After a series of payments, B
seller in the contracts of sale of personal property by
subsequently defaulted. A then filed an action against B
installments.
for specific performance.However, the amount collected
was not sufficient to cover the amount of the car. The

CIVIL LAW
court then issued a writ of execution and the sheriff levied Q: What is the rule when the seller delivers goods which
the subject car. B contends that this is a violation of the are mixed with other goods of different description not
Recto law because having elected specific performance, A included in the contract?
can no longer foreclose the subject car. Is this correct?
A: The buyer may accept the goods which are in accordance
A: No. A evidently chose the remedy of specific with the contract and reject the rest. (Art. 1522, NCC)
performance. The sheriff levied upon the car by virtue of
an execution and not as an incident of a foreclosure Q: What if the subject matter is indivisible?
proceeding. The rule is that in installment sales, if the
action instituted is for specific performance and the A: The buyer may reject the whole of the goods. (Art. 1522,
mortgaged property is subsequently attached and sold, the NCC)
sale thereof does not amount to a foreclosure of the
mortgage. Hence, the seller-creditor is entitled to a Q: What is the duty of the seller with regard to accessions
deficiency judgment (Industrial Finance Corporation v and accessories?
Ramirez, G.R. No. L-43821 May 26, 1977)
A: The seller has the duty to preserve the thing and its
Q: A mortgaged a diamond ring to M as a security for a accessions and accessories from the time of the perfection
loan which was to be paid 2 years thereafter. Since A of the contract of sale. (Art. 1537, NCC)
failed to pay M, she then foreclosed the mortgaged
property. However, it turned out that the proceeds of the Note: In case of loss or deterioration, the seller is liable for
damages or the buyer may seek rescission with damages. However,
sale were insufficient, thus, M filed an action for specific
if loss or deterioration is due to a fortuitous event, the seller is not
performance. A contends that this is a violation of the liable. (Art. 1538, NCC)
Recto law since the foreclosure of the chattel bars
subsequent recovery. Is this correct? Q: What is the rule when the sale of immovable is by unit
of measure or number?
A: No. A is not correct in invoking the Recto law since it is
only applicable in case of sale of personal property through A: GR: The seller must deliver all that may have been stated
installment. In the given case, the amount being claimed by in the contract.
A was to be paid 2 years thereafter as a lump sum, not
through installments. Moreover, the transaction is a loan XPN: If impossible to deliver all, the buyer may choose
not a sale. between:
1. proportional reduction of the price
Q: Does Recto Law cover a contract to sell movables? 2. rescission of the contract, provided the deficiency is
at least 1/10 of the area stated in the contract (Art.
A: No. Because when the suspensive condition upon which 1539, NCC)
the contract is based fails to materialize, it would extinguish
the contract, and consequently there is no contract to Q: What is the prescription period for the action of
rescind (Villanueva, p. 381, 2009 ed.). rescission of contract?
PERFORMANCE OF CONTRACT A: 6 months from the day of delivery. (Art. 1543, NCC)
Q: What is the rule when the seller delivers goods lesser Q: How is payment made by the buyer?
than what he has contracted to sell?
A: Price is paid at the time and place stipulated in the
A: contract. It is made to the person in whose favor the
1. The buyer may reject the goods delivered and he shall obligation has been constituted or his successor in interest,
have no liability or any person authorized to receive. (Villanueva, p. 297,
2. The buyer may accept the goods delivered, but he will 2009 ed.)
pay the contract price, if he has knowledge that the
seller is not going to deliver all the goods contracted Q: When is interest required to be paid?
for (Art. 1522, NCC)
A: SFD
Q: What is the rule when the seller delivers goods greater 1. When it is Stipulated
than what he has contracted to sell? 2. When the object delivered produced Fruits or
income
A: 3. When the buyer is in Default from the time of
1. The buyer may accept only the goods which were demand (Villanueva, p. 297, 2009 ed.)
included in the contract and reject the excess.
2. The buyer may accept the entire goods delivered and Q: What is the Realty Installment Buyer Act?
he shall pay for them at the contract rate. (Art. 1522,
NCC) A: Commonly known as the “957 Law.” It is embodied in
R.A. 6552 which provides for certain protection to

2013 GOLDEN NOTES
SALES
particular buyers of real estate payable on installments. The Q: What are the other rights granted to a buyer under the
law declares as "public policy to protect buyers of real Maceda Law?
estate on installment payments against onerous and
oppressive conditions. A:
1. Sell or assign rights to another
Note: The purpose of the law is to protect buyers in installment 2. Reinstate contract by updating within 30 days before
against oppressive conditions. and cancellation
3. Deed of Sale to be done by notarial act
Q: What are the transactions/sale covered by the Maceda 4. Pay full installment in advance the balance of price
Law? anytime w/o interest
5. Have full payment annotated in certificate of title
A: The law involves the sale of immovables on installment
(Maceda Law, R.A. 6552). Note: Applies to contracts even before the law was enacted.
1. Coverage: Residential Real Estate (Villanueva, p. Stipulation to the contrary is void
431)
2. Exclude: Q: Bernie bought on installment a residential subdivision
a. Industrial lots lot from DEVLAND. After having faithfully paid the
b. Commercial buildings (and commercial lots installments for 48 months, Bernie discovered that
by implication) DEVLAND had failed to develop the subdivision in
c. Sale to tenants under agrarian laws accordance with the approved plans and specifications
within the time frame in the plan. He thus wrote a letter
Note: The list is not exclusive. (Villanueva, p. 416, NCC) to DEVLAND informing it that he was stopping payment.
Consequently, DEVLAND cancelled the sale and wrote
Q: What are the so-called “Maceda” and “Recto” laws in Bernie, informing him that his payments are forfeited in
connection with sales on installments? Give the most its favor.
important features on each law. (1999 Bar Question) 1. Was the action of DEVLAND proper? Explain.
2. Discuss the rights of Bernie under the
A: The Maceda Law (R.A. 6552) is applicable to sales of circumstances.
immovable property on installments. The most important 3. Supposing DEVLAND had fully developed the
features are: subdivision but Bernie failed to pay further
installments after 4 years due to business
1. After having paid installments for at least two years, reverses. Discuss the rights and obligations of
the buyer is entitled to a mandatory grace period of the parties. (2005 Bar Question)
one month for every year of installment payments
made, to pay the unpaid installments without A:
interest. 1. Assuming that the land is a residential subdivision
project under P.D. No. 957 (The Subdivision and
If the contract is cancelled, the seller shall refund to Condominium Buyers Protective Decree), DEVLAND's
the buyer the cash surrender value equivalent to action is not proper because under Section 23 of said
fifty percent (50%) of the total payments made, and Decree, no installment payment shall be forfeited to
after five years of installments, an additional five the owner or developer when the buyer, after due
percent (5%) every year but not to exceed ninety notice, desists from further payment due to the failure
percent (90%) of the total payments made. of the owner-developer to develop the subdivision
according to the approved plans and within the time
2. In case the installments paid were less than 2 years, limit for complying with the same.
the seller shall give the buyer a grace period of not
less than 60 days. If the buyer fails to pay the 2. Under the same Section of the Decree, Bernie may, at
installments due at the expiration of the grace his option, be reimbursed the total amount paid
period, the seller may cancel the contract after 30 including amortization interests but excluding
days from receipt by the buyer of the notice of delinquency interests at the legal rate. He may also ask
cancellation or demand for rescission by notarial the Housing and Land Use Regulatory Board to apply
act. (Rillo v. CA, G.R. No. 125347 June 19, 1997) penal sanctions against DEVLAND consisting of
payment of administrative fine of not more than
The Recto Law (Art.1484) refers to sale of movables payable P20.000.00 and/or imprisonment for not more than 20
in installments and limiting the right of seller, in case of years.
default by the buyer, to one of three remedies:
1. Exact fulfillment; 3. Under R.A. No. 6552 (Maceda Law), DEVLAND has the
2. Cancel the sale of two or more installments have right to cancel the contract but it has to refund Bernie
not been paid; the cash surrender value of the payments on the
3. Foreclose the chattel mortgage on the things sold, property equivalent to 50% of the total payments
also in case of default of two or more installments, made.
with no further action against the purchaser.

CIVIL LAW
WARRANTIES a. Final Judgment

b. Buyer is Evicted in whole or in part from the
Q: What is a warranty? subject matter of sale
c. Basis of eviction is a right Prior to sale or act
A: A statement or representation made by the seller of imputable to seller
goods, as part of the contract of sale, having reference to d. Seller has been Summoned in the suit for
the character, quality, or title, of the goods, and by which eviction at the instance of buyer; or made
he promises or undertakes to insure that certain facts are 3rd party defendant through 3rd party
or shall be as he then represents. complaint brought by buyer
e. No waiver on the part of the buyer
Note: May either be express or implied.
Note: For eviction – disturbance in law is required and
Q: What is the effect of a breach of warranty? not just trespass in fact.
A: Buyer may: 3. Warranty against encumbrances (non-

1. Refuse to proceed with the contract; or apparent)
2. Proceed with the contract and waive the
condition. Requisites:
a. immovable sold is encumbered with non-
Note: If the condition is in the nature that it should happen, the apparent burden or servitude not mentioned
non-performance may be treated as a breach of warranty. in the agreement
b. nature of non-apparent servitude or burden
Q: What are the kinds of warranties? is such that it must be presumed that the
buyer would not have acquired it had he
A: Warranties could either be express or implied been aware thereof
Q: What are express warranties? XPN: warranty not applicable when non-apparent
burden or servitude is recorded in the Registry of
A: Any affirmation of fact or any promise by the seller Property – unless there is expressed warranty
relating to the thing if the natural tendency of such that the thing is free from all burdens and
affirmation or promise is to induce the buyer to purchase encumbrances
the same, and if the buyer purchases the thing relying
thereon. (Art. 1546) 4. Warranty against Hidden Defects
Q: What are the requisites of express warranties? Requisites: HENNAS

a. Defect is important or Serious
A: AIR i. The thing sold is unfit for the use which
1. It must be an Affirmation of fact relating to it is intended
the subject matter of sale ii. Diminishes its fitness for such use or to
2. Natural tendency is to Induce buyer to such an extent that the buyer would not
purchase subject matter have acquired it had he been aware
3. Buyer purchases the subject matter Relying thereof
thereon b. Defect is Hidden
c. Defect Exists at the time of the sale
Q: What is the liability of the seller for breach of express d. Buyer gives Notice of the defect to the seller
warranties? within reasonable time
e. Action for rescission or reduction of the price
A: The seller is liable for damages (Villanueva, p. 249). is brought within the proper period
i. 6 months – from delivery of the thing
Q: What are implied warranties? sold
ii. Within 40 days – from the delivery in
A: Warranties deemed included in all contracts of sale by case of animals
operation of law (Art. 1547). f. There must be No waiver of warranty on the
part of the buyer.
1. Warranty that seller has right to sell –
refers to consummation stage. Not Q: When is implied warranty not applicable?
applicable to sheriff, auctioneer,
mortgagee, pledgee A: ASAP
1. “As is and where is” sale
2. Warranty against eviction 2. Sale of second hand articles
3. Sale by virtue of authority in fact or law
Requisites: JPENS 4. Sale at public auction for tax delinquency

2013 GOLDEN NOTES
SALES
Q: Petitioner De Guzman purchased from Rspondent Q: What is the effect of a breach of warranty against
Toyota Cubao a white Toyota Hi-Lux 2.4 SS double cab eviction?
motor vehicle, 1996 model, for a price of P508,000. He
paid a downpayment of P152,400, leaving a balance of A: The buyer shall have the right to demand the seller:
P355,600. Later on, he demanded that the engine of the 1. The return of the value which the thing sold had
vehicle be replaced for it had a crack after travelling along at the time of the eviction, be it greater or lesser
Marcos Highway while raining hard. Petitioner claims the than the price of the sale
replacement is based on an implied warranty. On the 2. The income or fruits, if he has been ordered to
other hand, respondent answered that the said damage deliver them to the party who won the suit
was not covered by a warranty. Decide. against him
3. The costs of suit which caused the eviction, and,
A: In the absence of an existing express warranty on the in a proper case, those of suit brought against the
part of the respondent, as in this case, the allegations in vendor for the waranty
petitioner's complaint for damages were clearly anchored 4. The expenses of contract if buyer has paid them
on the enforcement of an implied warranty against hidden 5. The damages and interests and ornamental
defects, i.e., that the engine of the vehicle which expenses if sale was made in bad faith.
respondent had sold to him was not defective. By filing this
case, petitioner wants to hold respondent responsible for Note: Vendor is liable for any hidden defect even if he is not aware.
breach of implied warranty for having sold a vehicle with (Caveat Venditor)
defective engine. Such being the case, petitioner should
have exercised this right within six months from the Purchaser must be aware of the title of the vendor. (Caveat
Emptor)
delivery of the thing sold. Since petitioner filed the
complaint on April 20, 1999, or more than nineteen months
Q: What are the rights of buyer in case of partial eviction?
counted from November 29, 1997 (the date of the delivery
of the motor vehicle), his cause of action had become time-
A:
barred (De Guzman v. Toyota Cubao, G.R. No. 141480,
1. Restitution (with obligation to return the thing w/o
November 29, 2006).
other encumbrances than those which it had when he
Q: What are the effects of waiver of an implied warranty? acquired it)
2. Enforcement of warranty against eviction (Paras, p.
A: 153 and Art. 1556)
1. Seller in bad faith and there is waiver against eviction –
void WARRANTY AGAINST HIDDEN DEFECT
2. When buyer without knowledge of a particular risk,
made general renunciation of warranty – is not a Q: What is a hidden defect?
waiver but merely limits liability of seller in case of
eviction A: A hidden defect is one which is unknown or could not
3. When buyer with knowledge of risk of eviction have been known to the buyer. (Diaz, p. 145)
assumed its consequences and made a waiver – seller
Note: Seller does not warrant patent defect; Caveat emptor (buyer
not liable (applicable only to waiver of warranty
beware)
against eviction)
Q: What is a redhibitory defect?
WARRANTY AGAINST EVICTION
A: It is a defect in the article sold against which defect the
Q: What is a warranty against eviction? seller is bound to warrant. The vice must constitute an
imperfection, a defect in its nature, of certain importance;
A: In a contract of sale, unless a contrary intention appears, and a minor defect does not give rise to redhibition (De
there is an implied warranty on the part of the seller that Leon, Comments and Cases on Sales and Lease, 2005 ed, p.
when the ownership is to pass, and that the buyer shall 318).
from that time have and enjoy the legal and peaceful
st
possession of the thing (Art. 1547, 1 paragraph). Q: What is a redhibitory defect on animals?
Q: What is covered by a warranty against eviction? A: If the hidden defect of animals, even in case a
professional inspection has been made, should be of such a
A: It covers eviction by a final judgment based on a right nature that expert knowledge is not sufficient to discover it,
prior to the sale or an act imputable to the vendor, the the defect shall be considered as redhibitory.
vendee is deprived of the whole or of a part of the thing
purchased. Q: When is the sale of animal void?
The vendor shall answer for the eviction even though A: The sale is void if animal is:
nothing has been said in the contract on the subject. (Art. 1. Suffering from contagious diseases;
1548, NCC)

CIVIL LAW
2. Unfit for the use or service for which they were Q: Is there a waiver of warranty against hidden defects
purchased as indicated in the contract when the lessee inspected the premises and pushed
through with the contract?
Q: When is a vendor responsible for hidden defects?
A: Yes. Under Arts. 1561 and 1653 of the Civil Code, the
A: If the hidden defects which the thing sold may have: lessor is responsible for warranty against hidden defects,
1. Render it unfit for the use for which it is intended, but he is not answerable for patent defects or those, which
or are visible, and which can be seen upon inspection (Jon and
2. Diminish its fitness for such use to such an extent Marissa De Ysasi v. Arturo and Estela Arceo, G.R. No.
that, had the vendee been aware thereof, he 136586, Nov. 22, 2001).
would not have acquired it or would have given a
lower price for it (Art. 1561). Q: What are the specific implied warranties in sale of
goods?
Q: Up to what extent does the seller warrant against
hidden defects? A:
1. Warranty of fitness
A: The seller is responsible to the vendee for any hidden
faults or defects in the thing sold, even though he was not GR: No implied warranty
aware thereof.
XPN:
Q: When is the seller not answerable for the defects of the a. Buyer manifests to the seller the particular
thing sold? purpose for which the goods are required; and
b. Buyer relies upon the seller’s skill or judgment
A: 2. Warranty of merchantability – That goods are
1. For patent defects or those which are visible reasonably fit for the general purpose for which they
2. Even for those which are not visible if the buyer is an are sold.
expert who, by reason of his trade or profession,
should have known them (Art. 1561) REMEDIES IN CASE OF BREACH OF WARRANTY
3. If the contrary has been stipulated, and the vendor
was not aware of the hidden faults or defects in the Q: What are the remedies of the buyer in case of breach of
thing sold (Art. 1566) warranty?
Q: What is the effect of a breach of warranty against A:

hidden defects? 1. Accept goods and set up breach of warranty by way of
recoupment in diminution or extinction or the price.
A: It would depend on whether the seller had knowledge of 2. Accept goods and maintain action against seller for
such defect and whether there has been a waiver of the damages
warranty. 3. Refuse to accept goods and maintain action against
1. If the thing should be lost in consequence of the seller for damages
hidden faults, and seller was aware of them – he 4. Rescind contract of sale and refuse to receive
shall: goods/return them when already received.
a. bear the loss,
b. return the price and Q: Are the remedies of the buyer in case of breach of
c. refund the expenses of the contract with warranty absolute?
damages
A: No. The vendee's remedies against a vendor with respect
2. If the thing is lost and seller was not aware of the to the warranties against hidden defects of or
hidden faults – he shall: encumbrances upon the thing sold are not limited to those
a. return the price and interest prescribed in Article 1567 where the vendee, in the case of
b. reimburse the expenses of the contract Arts. 1561, 1562, 1564, 1565 and 1566, may elect either to
which the buyer might have paid, but not for withdraw from the contract or demand a proportionate
damages. (Villanueva, Law on Sales,2004 ed, reduction of the price, with damages in either case.
pp. 548-549)
The vendee may also ask for the annulment of the contract
Q: What are the remedies of the buyer in case of sale of upon proof of error or fraud, in which case the ordinary rule
things with hidden defects? on obligations shall be applicable. Under the law on
obligations, responsibility arising from fraud is demandable
A: The vendee may elect between: in all obligations and any waiver of an action for future
1. Withdrawing from the contract, or fraud is void. Responsibility arising from negligence is also
2. Demanding a proportionate reduction of the demandable in any obligation, but such liability may be
price, with damages in either case. regulated by the courts, according to the circumstances.

2013 GOLDEN NOTES
SALES
The vendor could likewise be liable for quasi-delict under Q: What is the difference between a condition and a
Article 2176 of the Civil Code, and an action based thereon warranty?
may be brought by the vendee. While it may be true that
the pre-existing contract between the parties may, as a A:
general rule, bar the applicability of the law on quasi-delict, CONDITION WARRANTY
the liability may itself be deemed to arise from quasi-delict, Purports to the existence of Purports to the
i.e., the acts which breaks the contract may also be a quasi- obligation performance of obligation
delict. (Coca-Cola Bottlers Philippines, Inc. v. CA, G.R. No. Need not be stipulated;
110295, Oct. 18, 1993) Must be stipulated to form
may form part of obligation
part of the obligation
by provision of law
Q: What are the instances when the buyer cannot rescind Relates to the subject
the sale in case there is a breach of warranty? May attach itself to
matter itself or to
obligation of seller to
obligation of the seller as to
A: deliver possession and
the subject matter of the
1. If he knew of the breach of warranty transfer
sale
2. If he fails to return or offer to return goods to seller in
substantially as good condition as they were at time BREACH OF CONTRACT
ownership was transferred
3. If he fails to notify the seller within a reasonable time REMEDIES OF THE SELLER
of his election to rescind
Note: see Recto and Maceda Law (Performance of Contract) pp.
Q: Goodyear Philippines sold a car to Anthony Sy. Later 240.
on, Sy sold the car to Jose Lee. When Lee tried to register
the car in his name, he failed to have it registered because REMEDIES OF THE BUYER
it turned out that the car was stolen before and was only
subsequently recovered by Goodyear. However, PNP did Q: What are the remedies of the buyer?
not lift the alert alarm over the said car. Due to this, the
car was impounded and Lee was sued by PNP. This A:
problem was relayed by Lee to Sy. It led to Sy filing a case I. Immovables in general
against Goodyear for breach of warranty. It is Sy’s 1. Disturbed in possession or with reasonable
argument that it is Goodyear’s duty to convey the vehicle grounds to fear disturbance – Suspend payment
to Sy free from all liens, encumbrances and legal 2. In case of subdivision or condominium projects –
impediments. Was there a breach of warranty by If real estate developer fails to comply with
Goodyear? obligation according to approved plan:
a. Rescind
A: No. Upon the execution of the Deed of Sale, petitioner b. Suspend payment until seller complies
did transfer ownership of and deliver the vehicle to II. Movables
Respondent Sy. The impoundment of the vehicle and the 1. Failure of seller to deliver – Action for specific
failure to register it were clearly acts that were not performance without giving the seller the option
deliberately caused by petitioner, but that resulted solely of retaining the goods on payments of damages
from the failure of the PNP to lift the latter’s own alarm 2. Breach of seller’s warranty – The buyer may, at his
over the vehicle. Hence, the former did not breach its election, avail of the following remedies:
obligation as a vendor to Respondent Sy; neither did it a. Accept goods & set up breach of warranty by
violate his right for which he could maintain an action for way of recoupment in diminution or
the recovery of damages. (Goodyear Philippines, Inc. v. Sy extinction or the price.
and Lee, G.R. No. 154554, Nov. 9, 2005) b. Accept goods & maintain action against
seller for damages
CONDITION VIS-À-VIS WARRANTY c. Refuse to Accept goods & maintain action
against seller for damages
Q: What is the effect of non-fulfillment of a condition? d. Rescind contract of sale & refuse to receive
goods/return them when already received.
A: If imposed on the perfection of contract – prevents the
juridical relation itself from coming into existence 3. Disturbed in possession or with reasonable
The other party may: grounds to fear disturbance – Suspend payment
1. Refuse to proceed with the contract
2. Proceed w/ contract, waiving the performance of Note: When the buyer has claimed and been granted a
the condition remedy in any of these ways, no other remedy can thereafter
be granted, without prejudice to the buyer’s right to rescind,
even if previously he has chosen specific performance when
fulfillment has become impossible. (Villanueva, p. 389 in
relation with Art. 1191, NCC)

CIVIL LAW
EXTINGUISHMENT OF THE SALE Q: Can any other person exercise the right to repurchase?
Q: What are the causes for extinguishment of sale? A: Yes. By any person to whom the right of repurchase may
be transfereed, or in case of legl redemption, by the person
A: A contract of sale is extinguished by: so entitled by law. (Villanueva, p. 517, 2009 ed.)
1. Same causes as all other obligations, namely:
a. Payment or performance Note: Right to repurchase must be reserved at the time of
b. Loss of the thing due perfection of sale. (Pineda, p. 333)
c. Condonation or remission of the debt
d. Confusion or merger of the rights of creditor Q: How is the right to repurchase reserved?
and debtor
e. Compensation A: By a stipulation to that effect in the contract of sale.
f. Novation Because it is not a right granted to the vendor by the
g. Annulment vendee, but is a right reserved by the vendor.
h. Rescission
i. Fulfillment of resolutory condition Q: Can the reservation be made in a separate instrument
j. Prescription apart from the contract of sale?
2. Conventional Redemption
3. Legal redemption A: No. Once the instrument of absolute sale is executed,
and any right thereafter granted the vendor in a separate
Q: What is redemption? instrument cannot be a right of repurchase but some other
right like the option to buy in the instant case. (Villanueva,
A: It is a mode of extinguishment wherein the seller has the p. 517, 2009 ed.)
right to redeem or repurchase the thing sold upon return of
the price paid. Q: What happens in case the contract of sale is void?
Q: What are the kinds of redemption? A: Since the underlying contract of sale was inoperative
and consequently void, then the right of repurchase
A: reserved would also be void. (Villanueva, p. 518, 2009 ed.)
1. Legal
2. Conventional EQUITABLE MORTGAGE
Q: Should the right to redeem be incorporated in every Q: What is an equitable mortgage?

contract of sale?
A: One which lacks the proper formalities, form or words or
A: The right of the vendor to redeem/repurchase must other requisites prescribed by law for a mortgage, but
appear in the same instrument. However, parties may shows the intention of the parties to make the property
stipulate on the right of repurchase in a separate document subject of the contract as security for a debt and contains
but in this case, it is valid only between the parties and not nothing impossible or contrary to law
against third persons (Pineda, p. 333)
Q: What are the essential requisites of equitable
Q: What is the difference between pre-emption and mortgage?
redemption?
A:
A: 1. Parties entered into a contract of sale
PRE-EMPTION REDEMPTION 2. Their intention was to secure an existing debt by way
Arises before sale Arises after sale of a mortgage.
There can be rescission of
Rescission inapplicable Q: What is the rule on the presumption of an equitable
original sale
Action is directed against Action is directed against mortgage?
prospective seller buyer
A: A sale with conventional redemption is deemed to be an
equitable mortgage in any of the following cases: (Art.
CONVENTIONAL REDEMPTION
1602) AIR-STAR
1. Price of the sale with right to repurchase is
Q: What is conventional redemption?
unusually Inadequate
2. Seller Remains in possession as lessee or
A: Seller reserved the right to repurchase thing sold
otherwise
coupled with obligation to return price of the sale,
3. Upon or after the expiration of the right to
expenses of contract & other legitimate payments and the
repurchase Another instrument extending the
necessary & useful expenses made on the thing sold
period of redemption or granting a new period is
executed

2013 GOLDEN NOTES
SALES
4. Purchaser Retains for himself a part of the commissorium. Jurisprudence has consistently declared
purchase price that the presence of even just one of the circumstances set
5. Seller binds himself to pay the Taxes on the thing forth in the foregoing Civil Code provision suffices to
sold convert a contract to an equitable mortgage. Article 1602
6. In any other case where the real intention of the specifically states that the equitable presumption applies
parties is that the transaction shall Secure the to any of the cases therein enumerated. In the present
payment of a debt or the performance of any factual milieu, the vendor retained possession of the
other obligation. property allegedly sold. Petitioner and her children
7. Art. 1602 shall also apply to a contract purporting continued to use it as their residence, even after Jonas
to be an Absolute sale. (Art. 1604) Ramos had abandoned them. In fact, it remained as her
address for the service of court orders and copies of
Note: In case of doubt in determining whether it is equitable Respondent Sarao’s pleadings (Ramos v. Sarao, G.R. No.
mortgage or sale a retro (with right of repurchase); it shall be 149756, Feb. 11, 2005).
construed as equitable mortgage. The remedy is reformation.
Q: Respondent Dizon mortgaged to Monte de Piedad a
An equitable mortgage is one which although lacking in some parcel of land including the two-storey apartment built
formality, or form or words, or other requisites demanded by a thereon to secure a loan. Respondent failed to settle the
statute, nevertheless reveals the intention of the parties to charge
loan, drawing Monte de Piedad to foreclose the mortgage,
real property as security for a debt, and contains nothing
impossible or contrary to law.
consolidate its ownership of the property, and register it
in its name. Monte de Piedad nevertheless gave
Q: Does inadequacy of price constitute proof sufficient to respondent until May 28, 1987 to purchase back the
declare a contract as one of equitable mortgage? property. On the day of the expiration itself, one of the
petitioners on behalf of respondent paid for the property.
A: Mere inadequacy of the price is not sufficient. The price Monte de Piedad thereupon executed a deed of sale in
must be grossly inadequate, or purely shocking to the favor of respondent who, the following day, executed a
conscience. (Diaz, p. 186) deed of sale in favor of petitioners. Also, respondent and
petitioners executed an agreement giving respondent
Q: Spouses Ramos executed a Deed Of Sale under Pacto repurchase within three months from the date of this
De Retro over their conjugal house and lot in favor of agreement. Failure to repurchase shall result to
Susana Sarao. The contract granted the Ramos spouses respondent vacating the premises and turn over
the option to repurchase the property within six months possession thereof to petitioners. Three months passed
plus an interest of 4.5 percent a month. It was further without respondent repurchasing the property.
agreed that should the spouses fail to pay the monthly Petitioners registered the Deed of Sale executed by Monte
interest or to exercise the right to repurchase within the de Piedad in favor of respondent, as well as the Deed of
stipulated period, the conveyance would be deemed an Sale of the property executed by respondent in favor of
absolute sale. In the succeeding months, the wife Myrna petitioners. Notwithstanding this, respondent failed to
Ramos tendered to Sarao payment in the form of two vacate the property. An ejectment case was filed against
manager’s checks, which the latter refused to accept for respondent. Is the agreement a contract of sale or an
being allegedly insufficient. Myrna filed a complaint for equitable mortgage?
the redemption of the property. She deposited with the
RTC two checks that Sarao refused to accept. Is the A: It is a contract of sale. The presumption of equitable
contract a Pacto De Retro sale or an equitable mortgage? mortgage created in Article 1602 of the Civil Code is not
Decide. conclusive. It may be rebutted by competent and
satisfactory proof of the contrary. In the case at bar, ample
A: The contract shall be presumed to be an equitable evidence supports petitioners’ claim that the transaction
mortgage, in any of the following cases: (1) When the price between them and respondent was one of sale with option
of a sale with right to repurchase is unusually inadequate; to repurchase. While after the sale of the property
(2) When the vendor remains in possession as lessee or respondent remained therein, her stay was not in the
otherwise; (3) When upon or after the expiration of the concept of an owner. Contrary to respondent’s claim that
right to repurchase another instrument extending the after the sale of the property in 1987, the tax declarations
period of redemption or granting a new period is executed; remained in her name and she continued to pay realty
(4) When the purchaser retains for himself a part of the taxes thereon, the record shows that the 1987 tax
purchase price; (5) When the vendor binds himself to pay declarations were in the names of Monte de Piedad and
the taxes on the thing sold; (6) In any other case where it petitioners. (Spouses Cristobal, et. al v. Dizon, G.R. No.
may be fairly inferred that the real intention of the parties 172771, Jan. 31, 2008)
is that the transaction shall secure the payment of a debt or
the performance of any other obligation. (Article 1602, New Q: Ceballos was able to borrow from Mercado certain sum
Civil Code) Furthermore, a contract purporting to be a pacto of money and as security, she executed a Deed of Real
de retro is construed as an equitable mortgage when the Estate Mortgage over the subject property. The said
terms of the document and the surrounding circumstances mortgage was not registered. Ceballos defaulted.
so require. The law discourages the use of a pacto de Thereafter, a Deed of Absolute Sale was executed by
retro, because this scheme is frequently used to circumvent Ceballos and her husband whereby the mortgaged
a contract known as a pactum property was sold to Mercado for the price of P16, 500.00.

CIVIL LAW
Ceballos offered to redeem the property from Mercado May exist prior to or after
for the price of P30, 000.00 but the latter's wife refused The right must be imbedded in the perfection of the sale,
since the same was already transferred in their names by a contract of sale upon its or be imbedded in
virtue of the Deed of Absolute Sale. As a consequence, perfection another contract upon
Ceballos filed the case contending that the Contract perfection
should be declared as an equitable mortgage. Is the Does not need a separate Separate consideration is
contention of Ceballos correct? consideration to be valid and needed for it to be valid
effective and effective
A: No. The instances when a contract, regardless of its Redemption period cannot Period for an option right
nomenclature, may be presumed to be an equitable exceed 10 years may exceed 10 years
mortgage are enumerated in Art. 1602 of the Civil Code. Notice is required for its
Here, none of those circumstances were present. The exercise accompanied with
original transaction was a loan. Ceballos failed to pay the Only notice is required
tender of
loan; consequently, the parties entered into another payment/consignment
agreement — the assailed, duly notarized Deed of Absolute Its exercise results into
Sale, which superseded the loan document. Ceballos had Its exercise extinguishes a
the perfection of a
the burden of proving that she did not intend to sell the existing contract of sale
contract of sale
property and that Mercado did not intend to buy it; and (Villanueva, pp. 519-520, 2009 ed.)
that the new agreement did not embody the true intention
of the parties. (Ceballos v. Intestate Estate of the Late Q: On May 19, 1951, the spouses-sellers executed a public
Emigdio Mercado, G.R. No. 155856, May 28, 2004) instrument of absolute sale in favor of the buyer for a
consideration which is sufficiently adequate. A few days
Q: Eulalia was engaged in the business of buying and thereafter, the buyers executed in favor of the sellers an
selling large cattle. In order to secure the financial capital option to buy within one year, the property subject of the
she advanced for her employees (biyaheros) she required absolute sale, which option was extended for a month.
them to surrender TCT of their properties and to execute Prior to the expiration of said one-year period, the buyer
the corresponding Deeds of Sale in her favor. Domeng sold said property to a third person.
Bandong was not required to post any security but when
Eulalia discovered that he incurred shortage in cattle If the spouses-sellers would file an action for reformation
procurement operation, he was required to execute a of instrument where they seek reformation of the
deed of sale over a parcel of land in favor of Eulalia. She absolute sale into one of equitable mortgage, will said
sold the property to her grandniece Jocelyn who action prosper?
thereafter instituted an action for ejectment against the
Spouses Bandong. To assert their right, Spouses Bandong A: No, it will not prosper. If a seller has been granted
filed an action for annulment of sale against Eulalia and merely an option to buy (not a right to repurchase) within a
Jocelyn alleging that there was no sale intended but only certain period, and the price paid by the buyer is adequate,
equitable mortgage for the purpose of securing the the sale is absolute and cannot be construed nor presumed
shortage incurred by Domeng in the amount of P70, to be one of equitable mortgage, even if the period within
000.00 while employed as “biyahero” by Eulalia. Was the which to exercise the option has been extended. (Villarica,
deed of sale between Domeng and Eulalia a contract of et. al. v. CA, G.R. L-19196, Nov. 29, 1968)
sale or an equitable mortgage?
Note: SC held that in this case, there was no sale a retro and that
A: It is an equitable mortgage. In executing the said deed of the right of repurchase is not a right granted the seller by the buyer
sale, Domeng and Eulalia never intended the transfer of in a separate instrument. Such right is reserved by the vendor in
ownership of the subject property but to burden the same the same instrument of the sale as one of the stipulations in the
with an encumbrance to secure the indebtedness incurred contract.
by Domeng on the occasion of his employment with Eulalia.
Also, once the instrument of absolute sale is executed, the seller
The agreement between Dominador and Eulalia was not
can no longer reserve the right of repurchase and any right
avoided in its entirety so as to prevent it from producing thereafter granted the seller by the buyer cannot be a right of
any legal effect at all. Instead, the said transaction is an repurchase but some other rights, like that of an option to buy.
equitable mortgage, thereby merely altering the
relationship of the parties from seller and buyer, to PERIOD OF REDEMPTION
mortgagor and mortgagee, while the subject property is not
transferred but subjected to a lien in favor of the latter Q: What is the period of redemption?
(Sps. Raymundo, et al. v. Sps. Bandong, G.R. No. 171250,
Jul. 4, 2007). A:
1. No period agreed upon – 4 years from date of contract
DISTINGUISHED FROM OPTION TO BUY 2. When there is agreement – should not exceed 10
years; but if it exceeded, valid only for the first 10
REDEMPTION OPTION TO BUY years.
Forms part of the contract of Principal and preparatory 3. When period to redeem has expired & there has been
sale contract a previous suit on the nature of the contract – seller

2013 GOLDEN NOTES
SALES
still has 30 days from final judgment on the basis that of the fixed and definite period within which to exercise the
contract was a sale with pacto de retro: right of legal redemption.
Rationale: no redemption due to erroneous belief that Note: Art. 1623 does not prescribe any distinctive method for
it is equitable mortgage which can be extinguished by notifying the redemptioner.
paying the loan.
Q: Is tender of payment necessary for redemption to take
4. When period has expired & seller allowed the period effect?
of redemption to expire – seller is at fault for not
having exercised his rights so should not be granted a A: Tender of payment is not necessary; offer to redeem is
new period enough.
Note: Tender of payment is sufficient but it is not in itself a Q: What is the effect of failure to redeem?
payment that relieves the seller from his liability to pay the
redemption price. A: There must be judicial order before ownership of real
property is consolidated to the buyer a retro.
Q: When does period of redemption begin to run?
Q: Can the vendor a retro be compelled to redeem?
A:
1. Right of legal pre-emption or redemption shall be A: No. There is no obligation on the part of the vendor a
exercised within 30 days from written notice by the retro to repurchase. He may or may not exercise the right
buyer – deed of sale not to be recorded in Registry of to repurchase (Pineda, p. 402, 2010 ed).
Property unless accompanied by affidavit that buyer
has given notice to redemptioners Q: What is a trust de son tort?
2. When there is actual knowledge, no need to give
written notice; period of redemption begins to run A: It is a trust created by the purchase or redemption of
from actual knowledge property by one other than the person lawfully entitled to
do so and in fraud of the other.
Q: Can there an extension of the time to redeem?
Q: Do constructive trusts arise only out of fraud or duress?
A: Yes. Parties may extend the period to redeem as long as
the total period shall not exceed ten years. However, such A: No. A constructive trust, otherwise known as a trust ex
extension can only be granted when the original period has maleficio, a trust ex delicto, a trust de son tort, an
not yet expired. Otherwise, there exists only a promise to involuntary trust, or an implied trust, is a trust by operation
sell on the buyer’s part (Pineda, pp. 381-382, 2010 ed.). of law which arises contrary to intention and in invitum,
against one who, by fraud, actual or constructive, by duress
EXERCISE OF THE RIGHT TO REDEEM or abuse of confidence, by commission of wrong, or by any
form of unconscionable conduct, artifice, concealment, or
Q: What are the obligations the vendor a retro if he questionable means, or who in any way against equity and
desires to redeem? good conscience, either has obtained or holds the legal
right to property which he ought not, in equity and good
A: The vendor a retro must pay or reimburse the vendee a conscience, hold and enjoy. It has been broadly ruled that a
retro the following: breach of confidence, although in business or social
1. Price of the sale relations, rendering an acquisition or retention of property
2. Expenses of the contract by one person unconscionable against another, raises a
3. Other legitimate expenses constructive trust. It is raised by equity in respect of
4. Necessary and useful expenses (Pineda, pp. 397- property, which has been acquired by fraud, or where,
398, 2010 ed.) although acquired originally without fraud, it is against
equity that it should be retained by the person holding it.
Q: Is written notice mandatory for the right of redemption (Arlegui v. CA G.R. No. 126437, Mar. 6, 2002)
to commence?
Note: "A constructive trust is substantially an appropriate remedy
A: Yes, the notice must be in writing stating the execution against unjust enrichment. It is raised by equity in respect of
of the sale and its particulars. It may be made in a private or property, which has been acquired by fraud, or where, although
public document. (Pineda, p. 400) acquired originally without fraud, it is against equity that it should
be retained by the person holding it." (76 Am. Jur. 2d, Sec. 222, p.
447 cited in Arlegui v. CA G.R. No. 126437, Mar. 6, 2002)
Q: Is there a prescribed form for an offer to redeem?
LEGAL REDEMPTION
A: There is no prescribed form for an offer to redeem to be
properly effected. Hence, it can either be through a formal
Q: What is legal redemption?
tender with consignation of the redemption price within
the prescribed period. What is paramount is the availment
A: Also referred to as “retracto legal”, it is the right to be
subrogated upon the same terms and conditions stipulated

CIVIL LAW
in the contract, in the place of one who acquires the thing Note: Failure of the owner or developer to comply with the
by purchase or by dation in payment or by other obligations under this and the preceding provisions shall constitute
transaction whereby ownership is transmitted by onerous a violation punishable under Sections 38 and 39 of the Decree.
title.
Q: How is “sale” or “sell” defined under the Decree?
Q: What are the instances of legal redemption?
A: Shall include:
1. Every disposition, or attempt to dispose, for a
A:
valuable consideration, of a subdivision lot,
1. Sale of a co-owner of his share to a stranger (Art.
including the building and other improvements
1620)
thereof, if any, in a subdivision project or a
2. When a credit or other incorporeal right in litigation is
condominium unit in a condominium project;
sold (Art. 1634)
2. contract to sell;
3. Sale of an heir of his hereditary rights to a stranger
3. contract of purchase and sale;
(Art. 1088)
4. exchange;
4. Sale of adjacent rural lands not exceeding 1 hectare
5. attempt to sell;
(Art. 1621)
6. option of sale or purchase;
5. Sale of adjacent small urban lands bought merely for
7. solicitation of a sale;
speculation (Art. 1622)
8. offer to sell, directly or by an agent, or by a
circular, letter, advertisement or otherwise; and
Q: Are there other instances when the right of legal
9. a. privilege given to a member of a cooperative,
redemption is also granted?
corporation, partnership, or any association
and/or
A:
b. the issuance of a certificate or receipt
1. Redemption of homesteads
evidencing or giving the right of participation in,
2. Redemption in tax sales
or right to, any land in consideration of payment
3. Redemption by judgment debtor
of the membership fee or dues. (Deemed sale)
4. Redemption in extrajudicial foreclosure
5. Redemption in judicial foreclosure of mortgage
Q: How are the terms “buy” and “purchase” defined under
the Decree?
Q: What is the basis of legal redemption?
A: Shall include any contract to buy, purchase, or otherwise
A: It is created partly for reason of public policy and partly
acquire for a valuable consideration a subdivision lot,
for the benefit and convenience of the redemptioner to
including the building and other improvements, if any, in a
afford him a way out of what might be a disagreeable or
subdivision project or a condominium unit in a
inconvenient association into which he has been in trust. It
condominium project.
is intended to minimize co-ownership. (Pineda, p. 407, 2010
ed.) Q: What is a subdivision project?
Q: When does legal redemption period begin to run? A: A tract or a parcel of land registered under Act No. 496
which is partitioned primarily for residential purposes into
A: The right of legal redemption shall not be exercised individual lots with or without improvements thereon, and
except within 30 days from the notice in writing by the offered to the public for sale, in cash or in installment
prospective seller, or seller, as the case may be. The deed terms.
of sale shall not be recorded in the Registry of Property
unless accompanied by an affidavit of the seller that he has Note: It shall include all residential, commercial, industrial and
given written notice thereof to all possible redemptioners. recreational areas as well as open spaces and other community
(Art. 1623, NCC) and public areas in the project.
THE SUBDIVISION AND CONDOMINIUM BUYER’S Q: What is a subdivision lot?

PROTECTIVE DECREE (P.D. 957)
A: Any of the lots, whether residential, commercial,
Q: Are sales or dispositions of subdivision lots or industrial, or recreational, in a subdivision project.
condominium units prior to the effectivity of the decree
exempt from compliance with the requirements stated Q: What is a complex subdivision plan?
therein?
A: A subdivision plan of a registered land wherein a street,
A: No. It shall be incumbent upon the owner or developer passageway or open space is delineated on the plan.
of the subdivision or condominium project to complete
compliance with his or its obligations as provided in the
decree within two years from the date of effectivity of the
Decree, unless otherwise extended by the Authority or
unless an adequate performance bond is filed.

2013 GOLDEN NOTES
SALES
Q: What is a condominium project? 3. The subdivision plan, as so approved, shall then
be submitted to the Director of Lands for
A: The entire parcel of real property divided or to be approval.
divided primarily for residential purposes into 4. In case of complex subdivision plans, court
condominium units, including all structures thereon. approval shall no longer be required.
5. The condominium plan as likewise so approved,
Q: What is a condominium unit? shall be submitted to the Register of Deeds of the
province or city in which the property lies and the
A: A part of the condominium project intended for any type same shall be acted upon subject to the
of independent use or ownership, including one or more conditions and in accordance with the procedure
rooms or spaces located in one or more floors (or part of prescribed in Section 4 of the Condominium Act
parts of floors) in a building or buildings and such (R.A. No. 4726).
accessories as may be appended thereto.
Q: The owner or the real estate dealer interested in the
Q: Define the following terms: sale of lots or units, respectively, in such subdivision
project or condominium project shall register the project
1. Owner. with the Authority by filing a sworn registration
statement. What shall be contained in the sworn
A: Registered owner of the land subject of a registration statement?
subdivision or a condominium project.
A:
2. Developer. (a) Name of the owner
(b) The location of the owner's principal business office,
A: person who develops or improves the subdivision and if the owner is a non-resident Filipino, the name
project or condominium project for and in behalf of and address of his agent or representative in the
the owner thereof. Philippines is authorized to receive notice
(c) The names and addresses of all the directors and
3. Dealer. officers of the business firm, if the owner be a
corporation, association, trust, or other entity, and of
A: any person directly engaged as principal in the all the partners, if it be a partnership
business of buying, selling or exchanging real estate (d) The general character of the business actually
whether on a full-time or part-time basis. transacted or to be transacted by the owner
(e) A statement of the capitalization of the owner,
4. Broker. including the authorized and outstanding amounts of
its capital stock and the proportion thereof which is
A: any person who, for commission or other paid-up.
compensation, undertakes to sell or negotiate the sale
of a real estate belonging to another. Q: Part of the required documentary attachments to the
application is a certificate of title to the property which is
5. Salesman. free from all liens and encumbrances. Does this bar an
owner of mortgaged property from engaging in
A: person regularly employed by a broker to perform, subdivision or condominium project while the mortgage is
for and in his behalf, any or all functions of a real in force?
estate broker.
A: No. In case any subdivision lot or condominium unit is
Q: What must a registered owner of a parcel of land do if mortgaged, it is sufficient if the instrument of mortgage
he wishes to convert said property into a subdivision or contains a stipulation that the mortgagee shall release the
condominium project? mortgage on any subdivision lot or condominium unit as
soon as the full purchase price for the same is paid by the
A: He shall: buyer.
1. Submit his subdivision plan to the Authority
which shall act upon and approve the same, upon Q: When is a subdivision or condominium project deemed
a finding that the plan complies with the to be registered?
Subdivision Standards' and Regulations
enforceable at the time the plan is submitted. A: Upon completion of the publication requirement
2. If the conversion desired involves a condominium
project, the same procedure shall be followed Note: The fact of such registration shall be evidenced by a
except that, in addition, the NHA shall act upon registration certificate to be issued to the applicant-owner or
and approve the plan with respect to the building dealer.
or buildings included in the condominium project
in accordance with the National Building Code
(R.A. No. 6541).

CIVIL LAW
Q: After issuance of the registration certificate, may the condominium unit, revoke the registration of any
owner or dealer already sell subdivision lots or subdivision project or condominium project and the license
condominium units? to sell any subdivision lot or condominium unit in said
project by issuing an order to this effect, with his findings in
A: No. He must first obtain a license to sell the project respect thereto, if upon examination into the affairs of the
within two weeks from the registration of such project. owner or dealer during a hearing, it shall appear there is
satisfactory evidence that the said owner or dealer:
Q: When is a license to sell issued? 1. is insolvent; or
2. has violated any of the provisions of this Decree
A: After an examination of the registration statement filed or any applicable rule or regulation of the
by said owner or dealer and all the pertinent documents Authority, or any undertaking of his/its
attached thereto, the Authority is convinced that the owner performance bond; or
or dealer is of good repute, that his business is financially 3. has been or is engaged or is about to engage in
stable, and that the proposed sale of the subdivision lots or fraudulent transactions; or
condominium units to the public would not be fraudulent. 4. has made any misrepresentation in any
prospectus, brochure, circular or other literature
Q: What is the purpose of the requirement of posting of a about the subdivision project or condominium
performance bonds before a license to sell may be issued? project that has been distributed to prospective
buyers; or
A: It is to guarantee the construction and maintenance of 5. is of bad business repute; or
the roads, gutters, drainage, sewerage, water system, 6. does not conduct his business in accordance with
lighting systems, and full development of the subdivision law or sound business principles.
project or the condominium project and the compliance by
the owner or dealer with the applicable laws and rules and Note: Where the owner or dealer is a partnership or corporation or
an unincorporated association, it shall be sufficient cause for
regulations.
cancellation of its registration certificate and its license to sell, if
any member of such partnership or any officer or director of such
Q: Is a license to sell and performance bond required in all corporation or association has been guilty of any act or omission
subdivision and condominium projects? which would be cause for refusing or revoking the registration of
an individual dealer, broker or salesman.
A: No. The following transactions are exempt from said
requirements: Q: What is the duration of the registration of dealers,
1. Sale of a subdivision lot resulting from the brokers and salesmen?
partition of land among co-owners and co-heirs.
2. Sale or transfer of a subdivision lot by the original A: On the thirty-first day of December of each year.
purchaser thereof and any subsequent sale of the
same lot. However, in the case of salesmen, their registration shall
3. Sale of a subdivision lot or a condominium unit by also cease upon termination of their employment with a
or for the account of a mortgagee in the ordinary dealer or broker.
course of business when necessary to liquidate a
bona fide debt. Note: Renewal of registration for the succeeding year shall be
granted upon written application therefore made not less than
thirty nor more than sixty days before the first day of the ensuing
Q: When may a license to sell be suspended? year and upon payment of the prescribed fee, without the
necessity of filing further statements or information, unless
A: specifically required by the Authority.
1. Upon verified complaint by a buyer of a subdivision lot
or a condominium unit in any interested party, the All applications filed beyond said period shall be treated as original
Authority may, in its discretion, immediately suspend applications.
the owner's or dealer's license to sell pending
investigation and hearing of the case. Q: When can there be refusal or revocation of registration
2. The NHA may motu proprio suspend the license to sell as dealers, brokers or salesmen?
if, in its opinion, any information in the registration
statement filed by the owner or dealer is or has A: Such registration may be refused or revoked by the NHA
become misleading, incorrect, inadequate or if, after reasonable notice and hearing, it shall determine
incomplete or the sale or offering for a sale of the that such applicant or registrant has:
subdivision or condominium project may work or tend 1. violated any provision of this Decree or any rule
to work a fraud upon prospective buyers. or regulation made hereunder; or
2. made a material false statement in his application
Q: When may a license to sell or registration of a for registration; or
subdivision or condominium project be revoked? 3. been guilty of a fraudulent act in connection with
any sale of a subdivision lot or condominium unit;
A: The Authority may, motu proprio or upon verified or
complaint filed by a buyer of a subdivision lot or

2013 GOLDEN NOTES
SALES
4. demonstrated his unworthiness to transact the Q: When is approval given by the Authority?
business of dealer, broker, or salesman, as the
case may be. A: When it is shown that the proceeds of the mortgage loan
shall be used for the development of the condominium or
Note: The suspension or revocation of the registration of a dealer subdivision project and effective measures have been
or broker shall carry with it all the suspension or revocation of the provided to ensure such utilization.
registration of all his salesmen.
Q: What is the rule if the owner desires to make
Q: In making advertisements, does the owner or
alterations in the approved subdivision plan?
developer make warranties relative to such?
A: GR: No owner or developer shall change or alter the
A: Yes.
roads, open spaces, infrastructures, facilities for public use
1. Advertisements that may be made through
and/or other form of subdivision development as contained
newspaper, radio, television, leaflets, circulars or
in the approved subdivision plan and/or represented in its
any other form about the subdivision or the
advertisements
condominium or its operations or activities must
reflect the real facts and must be presented in XPN: If he has obtained the permission of the
such manner that will not tend to mislead or Authority and the written conformity or consent of the
deceive the public. duly organized homeowners association, or in the
2. The owner or developer shall answerable and absence of the latter, by the majority of the lot buyers
liable for the facilities, improvements, in the subdivision.
infrastructures or other forms of development
represented or promised in brochures, Q: May payment made by a buyer be forfeited in favor of
advertisements and other sales propaganda the owner or developer in case the buyer desists from
disseminated by the owner or developer or his further payment due to the failure of the owner or
agents and the same shall form part of the sales developer to develop the subdivision or condominium
warranties enforceable against said owner or project according to the approved plan within the time
developer, jointly and severally. limit provided for such? What is the buyer’s remedy in this
case?
Note: Failure to comply with these warranties shall also be
punishable in accordance with the penalties provided for in this A: No, such forfeiture is not allowed. Such buyer may, at his
Decree.
option, be reimbursed the total amount paid including
amortization interests but excluding delinquency interests,
Q: Within what period must the owner or developer
with interest thereon at the legal rate.
construct and provide the facilities, improvements,
infrastructures and other forms of development, including
Q: Does a defaulting buyer have any right under the
water supply and lighting facilities, which are offered and
Decree?
indicated in the approved subdivision or condominium
plans, brochures, prospectus, printed matters, letters or in A: Yes. The rights of the buyer in the event of this failure to
any form of advertisement? pay the installments due for reasons other than the failure
of the owner or developer to develop the project shall be
A: GR: Within one year from the date of the issuance of the
governed by Republic Act No. 6552.
license for the subdivision or condominium project
Where the transaction or contract was entered into prior to
XPN: Such other period of time as may be fixed by the
the effectivity of Republic Act No. 6552 on August 26, 1972,
Authority.
the defaulting buyer shall be entitled to the corresponding
refund based on the installments paid after the effectivity
Q: Is registration needed after the execution of a contract
of the law in the absence of any provision in the contract to
to sell relevant to the sale or conveyance of subdivision
the contrary.
lots and condominium units?
Q: What is the owner or developer’s obligation in case the
A: Yes. All contracts to sell, deeds of sale and other similar
lot bought and fully-paid by the buyer is mortgaged?
instruments relative to the sale or conveyance of the
subdivision lots and condominium units, whether or not the A: In the event a mortgage over the lot or unit is
purchase price is paid in full, shall be registered by the outstanding at the time of the issuance of the title to the
seller in the Office of the Register of Deeds of the province buyer, the owner or developer shall redeem the mortgage
or city where the property is situated. or the corresponding portion thereof within six months
from such issuance in order that the title over any fully paid
Q: Can mortgage be made by the owner or developer lot or unit may be secured and delivered to the buyer in
without permission? accordance herewith.
A: No. There must be prior written approval of the
Authority.

CIVIL LAW
Q: May the parties waive compliance with the decree? THE CONDOMINIUM ACT (RA 4726)
A: No. Any condition, stipulation, or provision in contract of Q: What is a condominium?

sale whereby any person waives compliance with any
provision of the Decree or of any rule or regulation issued A: It is an interest in real property consisting of separate
thereunder shall be void. interest in a unit in a residential, industrial or commercial
building and an undivided interest in common, directly or
Q: When will there be non-forfeiture of installment indirectly, in the land on which it is located and in other
payments paid by the buyer? common areas of the building.
A: No installment payment shall be forfeited in favor of the Note: It may include, in addition, a separate interest in other
owner or developer when the buyer, after due notice to the portions of such real property.
owner or developer, desists from further payment due to
the failure of the owner or developer to develop the Q: What comprises a real right in condominium?
subdivision or condominium project according to the
approved plans and within the time limit for complying with A: The real right in condominium may be ownership or any
the same. (Sec. 23, P.D. 957) other interest in real property recognized by law, on
property in the Civil Code and other pertinent laws.
Q: What is the remedy of the buyer in case of non-
compliance by the owner or developer of the approved Q: What is a condominium unit?
plans within the time limit?
A: It is a part of the condominium project intended for any
A: Such buyer may, at his option, be reimbursed the total type of independent use or ownership, including one or
amount paid including amortization interests but excluding more rooms or spaces located in one or more floors (or
delinquency interests, with interest thereon at the legal part or parts of floors) in a building or buildings and such
rate. (Sec. 23, P.D. 957) accessories as may be appended thereto.
Q: Is notice required in the demand of refund? Q: What is a condominium project?
A: No. Section 23 of P.D. 957 does not require that a notice A: It is the entire parcel of real property divided or to be
be given first by the buyer to the seller before a demand for divided in condominiums, including all structures thereon,
refund can be made as the notice and demand can be made
in the same letter or communication (Villanueva, p. 408, Q: What are common areas?
2009 ed.)
A: The entire project excepting all units separately granted
Q: What are the rights of the buyer in case he defaults in or held or reserved.
his installment payment due to causes other than the
failure of the owner or developer to develop the project? Q: What is meant by “to divide” real property?
A: To divide the ownership thereof or other interest therein

A: Where the transaction or contract was entered into prior
by conveying one or more condominiums therein but less
to the effectivity of Republic Act No. 6552, the defaulting
than the whole thereof.
buyer shall be entitled to the corresponding refund based
on the installments paid after the effectivity of the law in
Q: What is the rule as regards acquisition of ownership
the absence of any provision in the contract to the contrary
over common areas?
(Sec. 24, P.D. 957)
A: Transfer or conveyance of a unit or apartment, office or
Q: When can there be a Take-Over Development?
store or other space therein shall include the transfer or
conveyance of the undivided interests in the common areas
A: The NHA may take over or cause the development and
or, in a proper case, the membership or shareholdings in
completion of the subdivision or condominium project at
the condominium corporation
the expenses of the owner or developer, jointly and
severally, in cases where the owner or developer has
Q: Are there any restrictions as regards ownership of
refused or failed to develop or complete the development
condominium units provided under the Condominium
of the project as provided for in the Decree.
Act?
Note: The Authority may, after such take-over, demand, collect
and receive from the buyers the installment payments due on the A:
lots, which shall be utilized for the development of the subdivision. 1. As regards individuals:
GR: None.
XPN: where the common areas in the condominium

project are owned by the owners of separate units as

2013 GOLDEN NOTES
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co-owners thereof, no condominium unit therein shall Note: Such easement shall be automatically terminated
be conveyed or transferred to persons other than: in any air space upon destruction of the unit as to
1. Filipino citizens, or render it untenantable.
2. Corporations at least sixty percent of the capital
stock of which belong to Filipino citizens 3. Common areas are held in common by the
holders of units, in equal shares, one for each
XPN to the XPN: in cases of hereditary succession. unit, unless otherwise provided.
2. As regards corporations: 4. A non-exclusive easement for ingress, egress and

Where the common areas in a condominium project support through the common areas is
are held by a corporation, no transfer or conveyance appurtenant to each unit and the common areas
of a unit shall be valid if the concomitant transfer of are subject to such easements.
the appurtenant membership or stockholding in the
corporation will cause the alien interest in such 5. Each condominium owner shall have the exclusive
corporation to exceed the limits imposed by existing right to paint, repaint, tile, wax, paper or
laws. otherwise refinish and decorate the inner
surfaces of the walls, ceilings, floors, windows
Note: Under Republic Act (R.A.) No. 4726, otherwise known as the and doors bounding his own unit.
Condominium Act, foreign nationals can own Philippine real estate
through the purchase of condominium units or townhouses 6. Each condominium owner shall have the exclusive
constituted under the Condominium principle with Condominium right to mortgage, pledge or encumber his
Certificates of Title. The law provides that no condominium unit condominium and to have the same appraised
can be sold without at the same time selling the corresponding independently of the other condominiums but
amount of rights, shares or other interests in the condominium
any obligation incurred by such condominium
management body, the Condominium Corporation; and no one can
buy shares in a Condominium Corporation without at the same owner is personal to him.
time buying a condominium unit. It expressly allows foreigners to
acquire condominium units and shares in condominium 7. GR: Each condominium owner has also the
corporations up to not more than 40% of the total and outstanding absolute right to sell or dispose of his
capital stock of a Filipino-owned or controlled corporation. Under condominium.
this set up, the ownership of the land is legally separated from the
unit itself (Hulst v. PR Builders, Inc., G.R. No. 156364, September 25, XPN: If the master deed contains a requirement
2008).
that the property be first offered to the
condominium owners within a reasonable period
Q: What are the incidents of a condominium grant?
of time before the same is offered to outside
parties;
A: Unless otherwise expressly provided in the enabling or
master deed or the declaration of restrictions, the incidents
Q: May common areas be divided through judicial
of a condominium grant are as follows:
partition?
1. The boundary of the unit granted are the interior
surfaces of the perimeter walls, floors, ceilings,
A: GR: Common areas shall remain undivided, and there
windows and doors thereof.
shall be no judicial partition thereof.
Note: The following are not part of the unit bearing
walls, columns, floors, roofs, foundations and other XPN: Where several persons own condominiums in a
common structural elements of the building: condominium project, an action may be brought by
one or more such persons for partition thereof by sale
a. lobbies, stairways, hallways, and other areas of of the entire project, as if the owners of all of the
common use, condominiums in such project were co-owners of the
b. elevator equipment and shafts, central heating, entire project in the same proportion as their interests
c. central refrigeration and central air- in the common areas:
conditioning equipment,
d. reservoirs, tanks, pumps and other central
Note: However, a partition shall be made only upon a
services and facilities,
showing that:
e. pipes, ducts, flues, chutes, conduits, wires and 1. three years after damage or destruction to the project
other utility installations, wherever located, which renders material part thereof unit for its use prior
except the outlets thereof when located thereto, the project has not been rebuilt or repaired
within the unit. substantially to its state prior to its damage or
destruction, or
2. There shall pass with the unit, as an appurtenance 2. damage or destruction to the project has rendered one-
thereof, an exclusive easement for the use of the half or more of the units therein untenantable and that
air space encompassed by the boundaries of the condominium owners holding in aggregate more than
thirty percent interest in the common areas are
unit as it exists at any particular time and as the
opposed to repair or restoration of the project; or
unit may lawfully be altered or reconstructed 3. the project has been in existence in excess of fifty years,
from time to time. that it is obsolete and uneconomic, and that
condominium owners holding in aggregate more than

CIVIL LAW
fifty percent interest in the common areas are opposed 8. Any reasonable restriction not contrary to law, morals or
to repair or restoration or remodeling or modernizing of public policy regarding the right of any condominium owner
the project; or to alienate or dispose of his condominium.
4. the project or a material part thereof has been
condemned or expropriated and that the project is no
Note: The enabling or master deed may be amended or revoked
longer viable, or that the condominium owners holding
upon registration of an instrument executed by the registered
in aggregate more than seventy percent interest in the
owner or owners of the property and consented to by all registered
common areas are opposed to continuation of the
holders of any lien or encumbrance on the land or building or
condominium regime after expropriation or
portion thereof. The term “registered owner” shall include the
condemnation of a material portion thereof; or
registered owners of condominiums in the project. Until
5. the conditions for such partition by sale set forth in the
registration of a revocation, the provisions of RA. No. 4726 shall
declaration of restrictions, duly registered in accordance
continue to apply to such property (Sec. 4, R.A. 4726).
with the terms of the Act, have been met.
Q: What is the rule regarding issuance of certificate of title

Q: What are the requirements before a property be
where the enabling or master deed provides that the land
considered divided or to be divided into condominiums?
included within a condominium project are to be owned in
common by the condominium owners therein?
A: An enabling or master deed must be recorded in the
Register of Deeds of the province or city in which the
A: The Register of Deeds may, at the request of all the
property lies and duly annotated in the corresponding
condominium owners and upon surrender of all their
certificate of the title of the land, if the latter has been
"condominium owner's" copies, cancel the certificates of
patented or registered under either the Land Registration
title of the property and issue a new one in the name of
or Cadastral Acts (Sec. 4, R.A. 4726).
said condominium owners as pro-indiviso co-owners
thereof.
Q: What must an enabling or master deed contain?
Q: How are deeds, declarations or plans for a
A:
condominium project construed?
1. Description of the land on which the building or buildings
and improvements are or are to be located;
A:
1. Liberally, to facilitate the operation of the project
2. Description of the building or buildings, stating the
2. Provisions shall be presumed to be independent and
number of stories and basements, the number of units and
severable.
their accessories, if any;
3. Description of the common areas and facilities;

Q: When should a declaration of restrictions be registered
and what is the effect of such?
4. A statement of the exact nature of the interest acquired
or to be acquired by the purchaser in the separate units
A: The owner of a project shall, prior to the conveyance of
and in the common areas of the condominium project.
any condominium therein, register a declaration of
Where title to or the appurtenant interests in the common
restrictions relating to such project.
areas are or are to be held by a condominium corporation,
a statement to this effect shall be included;
Such restrictions shall constitute a lien upon each
condominium in the project, and shall insure to and bind all
5. Statement of the purposes for which the building or
condominium owners in the project.
buildings and each of the units are intended or restricted as
to use;
Note: Such liens, unless otherwise provided, may be enforced by
any condominium owner in the project or by the management
6. A certificate of the registered owner of the property, if body of such project.
he is other than those executing the master deed, as well as
of all registered holders of any lien or encumbrance on the Q: What should a declaration of restrictions provide?
property, that they consent to the registration of the deed;
A: The declaration of restrictions shall provide for the
7. The following plans shall be appended to the deed as management of the project by anyone of the following
integral parts thereof: management bodies:
a. A survey plan of the land included in the project, 1. a condominium corporation,
unless a survey plan of the same property had 2. an association of the condominium owners,
previously been filed in said office; 3. a board of governors elected by condominium
b. A diagrammatic floor plan of the building or owners, or
buildings in the project, in sufficient detail to identify 4. a management agent elected by the owners or by
each unit, its relative location and approximate the board named in the declaration.
dimensions; 5. voting majorities,
6. quorums,
7. notices,

2013 GOLDEN NOTES
SALES
8. meeting date, and 6. For conditions, other than those provided for in
9. other rules governing such body or bodies. Sections 8 and 13 of the Act, upon which partition
of the project and dissolution of the
Q: What may a declaration of restrictions provide? condominium corporation may be made.
A: Such declaration of restrictions, among other things, may Note: Such right to partition or dissolution may be
also provide: conditioned upon:
1. As to any such management body; a. failure of the condominium owners to rebuild
within a certain period;
a. For the powers thereof, including power to
b. specified inadequacy of insurance proceeds;
enforce the provisions of the declarations of c. specified percentage of damage to the building;
restrictions; d. a decision of an arbitrator; or
b. For maintenance of insurance policies, e. upon any other reasonable condition.
insuring condominium owners against loss
by fire, casualty, liability, workmen's Q: What is the duty of the Register of Deeds as regards
compensation and other insurable risks, and this declaration of restrictions?
for bonding of the members of any
management body; A: The Register of Deeds shall enter and annotate the
c. Provisions for maintenance, utility, declaration of restrictions upon the certificate of title
gardening and other services benefiting the covering the land included within the project, if the land is
common areas, for the employment of patented or registered under the Land Registration or
personnel necessary for the operation of the Cadastral Acts.
building, and legal, accounting and other
professional and technical services; Q: What are the restrictions imposed by the law upon
d. For purchase of materials, supplies and the corporations which is also the management body of the
like needed by the common areas; condominium project?
e. For payment of taxes and special
assessments which would be a lien upon the A: The restrictions are as follows:
entire project or common areas, and for 1. The corporate purposes of such a corporation
discharge of any lien or encumbrance levied shall be limited to the:
against the entire project or the common a. holding of the common areas, either in
areas; ownership or any other interest in real
f. For reconstruction of any portion or portions property recognized by law,
of any damage to or destruction of the b. management of the project, and
project; c. to such other purposes as may be necessary,
g. The manner for delegation of its powers; incidental or convenient to the
h. For entry by its officers and agents into any accomplishment of said purposes.
unit when necessary in connection with the 2. The articles of incorporation or by-laws of the
maintenance or construction for which such corporation shall not contain any provision
body is responsible; contrary to or inconsistent with the:
i. For a power of attorney to the management a. provisions of the Act;
body to sell the entire project for the benefit b. enabling or master deed; or
of all of the owners thereof when partition c. declaration of restrictions of the project.
of the project may be authorized under
Section 8 of the Condominium Act, which Q: May the management body acquire and hold, for the
said power shall be binding upon all of the benefit of the condominium owners, tangible and
condominium owners regardless of whether intangible personal property and dispose of the same by
they assume the obligations of the sale or otherwise?
restrictions or not.
2. The manner and procedure for amending such A: Yes, unless otherwise provided for by the declaration of
restrictions: Provided, That the vote of not less restrictions.
than a majority in interest of the owners is
obtained. Note: The beneficial interest in such personal property shall be
3. For independent audit of the accounts of the owned by the condominium owners in the same proportion as
management body; their respective interests in the common areas.
4. For reasonable assessments to meet authorized
A transfer of a condominium shall transfer to the transferee
expenditures, each condominium unit to be
ownership of the transferor's beneficial interest in such personal
assessed separately for its share of such expenses property.
in proportion (unless otherwise provided) to its
owners fractional interest in any common areas; Q: What is a condominium corporation?
5. For the subordination of the liens securing such
assessments to other liens either generally or A: A corporation specially formed for the purpose, in which
specifically described; the holders of separate interest shall automatically be

CIVIL LAW
members or shareholders, to the exclusion of others, in Q: What is the effect of involuntary dissolution of a
proportion to the appurtenant interest of their respective condominium corporation for any of the causes provided
units in the common areas. by law?
Note: As regards title to the common areas, including the land, or A:

the appurtenant interests in such areas, these may be held by a 1. The common areas owned or held by the corporation
condominium corporation. shall, by way of liquidation, be transferred pro-indiviso
and in proportion to their interest in the corporation
Q: What is the term of a condominium corporation? to the members or stockholders thereof, subject to the
superior rights of the corporation creditors.
A: Co-terminous with the duration of the condominium
project, the provisions of the Corporation Law to the Note: Such transfer or conveyance shall be deemed to be a
contrary notwithstanding. full liquidation of the interest of such members or
stockholders in the corporation.
Q: What are the rules regarding membership in a
condominium corporation? 2. After such transfer or conveyance, the provisions of
this Act governing undivided co-ownership of, or
A: Membership in a condominium corporation, regardless undivided interest in, the common areas in
of whether it is a stock or non-stock corporation, shall not condominium projects shall fully apply.
be transferable separately from the condominium unit of
which it is an appurtenance. Q: When may voluntary dissolution of a condominium
corporation be allowed?
Note: When a member or stockholder ceases to own a unit in the
project in which the condominium corporation owns or holds the A: A condominium corporation may be voluntarily dissolved
common areas, he shall automatically cease to be a member or only:
stockholder of the condominium corporation.
1. when the enabling or the master deed of the
project in which the condominium corporation
Q: May a condominium corporation sell, exchange, lease
owns or holds the common area is revoked; and
or otherwise dispose of the common areas owned or held
2. upon a showing that:
by it in the condominium project?
a. three years after damage or destruction to
the project in which the corporation owns or
A: GR: During its existence, it cannot do so.
holds the common areas, which damage or
destruction renders a material part thereof
XPN: If authorized by the affirmative vote of all the
unfit for its use prior thereto, the project has
stockholders or members.
not been rebuilt or repaired substantially to
its state prior to its damage or destruction;
Q: Is the so called appraisal right under the Corporation
or
Code available to stockholders or members of a
b. damage or destruction to the project has
condominium corporation?
rendered one-half or more of the units
therein untenantable and that more than
A: GR: Not available. The law provides that “the by-laws of
thirty percent of the members of the
a condominium corporation shall provide that a stockholder
corporation, if non-stock, or the
or member shall not be entitled to demand payment of his
shareholders representing more than thirty
shares or interest in those cases where such right is granted
percent of the capital stock entitled to vote,
under the Corporation Law xxx”
if a stock corporation, are opposed to the
repair or reconstruction of the project, or
XPN: If said stockholder or member consents to sell his
c. the project has been in existence in excess of
separate interest in the project to the corporation or
fifty years, that it is obsolete and
to any purchaser of the corporation's choice who shall
uneconomical, and that more than fifty
also buy from the corporation the dissenting member
percent of the members of the corporation,
or stockholder's interest.
if non-stock, or the stockholders
representing more than fifty percent of the
Note: In case of disagreement as to price, the procedure set
forth in the appropriate provision of the Corporation Law for capital stock entitled to vote, if a stock
valuation of shares shall be followed. corporation, are opposed to the repair or
restoration or remodeling or modernizing of
The corporation shall have two years within which to pay for the project; or
the shares or furnish a purchaser of its choice from the time d. the project or a material part thereof has
of award. been condemned or expropriated and that
the project is no longer viable, or that the
All expenses incurred in the liquidation of the interest of the members holding in aggregate more than
dissenting member or stockholder shall be borne by him.
seventy percent interest in the corporation,
if non-stock, or the stockholders

2013 GOLDEN NOTES
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representing more than seventy percent of tax purposes to the owners thereof and the tax on each
the capital stock entitled to vote, if a stock such condominium shall constitute a lien solely thereon.
corporation, are opposed to the
continuation of the condominium regime Q: Who should pay for an assessment upon any
after expropriation or condemnation of a condominium made in accordance with a duly registered
material portion thereof; or declaration of restrictions?
e. the conditions for such a dissolution set
forth in the declaration of restrictions of the A: It is an obligation of the owner thereof at the time the
project in which the corporation owns or assessment is made.
holds the common areas, have been met.
Q: What are the rules as regards the notice of assessment?
Note: An action for voluntary dissolution is that under Rule 104 of
the Rules of Court. A: The notice:
1. is to be registered with the Register of Deeds of
Q: May the members or stockholders of a condominium the city or province where such condominium
corporation dissolve such corporation? project is located.
2. shall state the following:
A: Yes, by the affirmative vote of all the stockholders or a. amount of such assessment and such other
members thereof at a general or special meeting duly called charges thereon as may be authorized by the
for the purpose: Provided, that all the requirements of declaration of restrictions,
Section 62 of the Corporation Law are complied with. b. a description of the condominium unit
against which same has been assessed, and
Q: What is the consequence of voluntary dissolution of a c. the name of the registered owner thereof.
condominium corporation? 3. Such notice shall be signed by an authorized
representative of the management body or as
A: GR: The corporation shall be deemed to hold a power of otherwise provided in the declaration of
attorney from all the members or stockholders to sell and restrictions.
dispose of their separate interests in the project.
Q: What is the effect if the management body causes a
XPN: Unless otherwise provided for in the declaration notice of assessment to be registered with the register of
of restrictions deeds?
Q: How is a condominium corporation liquidated? A: The amount of any such assessment plus any other
charges thereon, such as interest, costs (including
A: Liquidation of the corporation shall be effected by a sale attorney's fees) and penalties, as such may be provided for
of the entire project as if the corporation owned the whole in the declaration of restrictions, shall be and become a lien
thereof, subject to the rights of the corporate and of upon the condominium assessed.
individual condominium creditors.
Note: Effect of payment: Upon payment of said assessment and
Q: What should the Court do if, in an action for partition charges or other satisfaction thereof, the management body shall
of a condominium project or for the dissolution of cause to be registered a release of the lien.
condominium corporation on the ground that the project
or a material part thereof has been condemned or Q: What are the rules as regards the lien created in case of
expropriated, the Court finds that the conditions provided unpaid assessments, etc?
for in the Condominium Act or in the declaration of
restrictions have not been met? A: GR: Such lien shall be superior to all other liens
registered subsequent to the registration of said notice of
A: The Court may decree a reorganization of the project, assessment
declaring which portion or portions of the project shall
continue as a condominium project, the owners thereof, XPNs:
and the respective rights of said remaining owners and the 1. real property tax liens are superior;
just compensation, if any, that a condominium owner may 2. when declaration of restrictions provide for the
be entitled to due to deprivation of his property. subordination thereof to any other liens and
encumbrances.
Note: Upon receipt of a copy of the decree, the Register of Deeds
shall enter and annotate the same on the pertinent certificate of Q: What is the rule as regards enforcement of the lien?
title.
A: Such liens may be enforced in the same manner
Q: If real property has been divided into condominiums, provided for by law for the judicial or extra-judicial
how will it be assessed for taxation purposes? foreclosure of mortgages of real property.
A: Each condominium separately owned shall be separately

assessed, for purposes of real property taxation and other

CIVIL LAW
Q: Can the management body bid in the foreclosure sale

based on the lien for unpaid assessments?
A: GR: No, the management body shall have power to bid

at foreclosure sale.
XPN: Unless otherwise provided for in the declaration

of restrictions,
Note: The condominium owner shall have the same right of

redemption as in cases of judicial or extra-judicial foreclosure of
mortgages.

2013 GOLDEN NOTES
SUCCESSION
SUCCESSION death, but also those which have accrued thereto since the
opening of the succession. (Art. 781)
GENERAL PROVISIONS
Q: What are the rules on transmissibility of rights and
Q: What is succession? obligations?
A: Succession is a mode of acquisition by virtue of which A: Purely personal rights are extinguished by death. Hence,
the property, rights and obligations to the extent of the they are not transmitted to the heirs.
value of the inheritance of a person, are transmitted
through his death to another or others either by his will or GR: patrimonial rights are transmissible to the heirs
by operation of law. (Art. 774)
XPN:
Q: What are the requisites of succession? 1. Otherwise provided by law
2. by the will of the testator.
A: DATE
1. Death of decedent; GR: Rights and obligations arising from contracts are
2. Acceptance of the inheritance by the successor; binding upon the heirs.
3. Transmissible estate;
4. Existence and capacity of successor, designated XPN: when the rights and obligations arising are not
by decedent or law. transmissible by
a. Their nature
Q: What is an inheritance? b. Stipulation
c. Provided by law
A: The inheritance includes all the property, rights and
obligations of a person which are not extinguished by his Q: What are the rights that are extinguished by death?
death. (Art 776)
A: PAPULP
Note: The heirs succeed not only to the rights of the deceased but 1. Partnership rights
also to his obligations. 2. Agency
3. Personal easements
Q: What is the relation of “Inheritance” to “Succession”? 4. Usufruct
5. Legal support
A: Inheritance refers to the objective element of 6. Parental authority
succession, to the mass or totality of the patrimony of a
deceased person. Succession, on the other hand refers to Q: May heirs be held liable for the debts or obligations of
the legal mode by which inheritance is transmitted. the decedent?
Q: Who is a decedent? A: GR: No. It is the estate that pays for the debts left by the
decedent.
A: Person whose property is transmitted through
succession whether or not he left a will. If the decedent left XPN: It is true that the heirs assume liability for the debts of
a will, he is also called a testator. (Art. 774 & 775) the decedent, although it is limited only to the extent of the
value of the inheritance received (Estate of Hemady v.
Q: What is transferred by death in succession? Luzon Surety Co., G.R. No. L-8437, Nov. 28, 1956)
A: Only the property, rights and obligations not It is only after the debts are paid that the residue of the
extinguished by death are transmitted to the heirs. estate is distributed among the successors.
With respect to obligations arising from contracts, while the
Q: Are after-acquired properties of the decedent same is transmissible to the heirs, the latter’s liability shall,
transmissible? however, be limited only up to the value of the property
they received from the decedent. (Art. 1311)
A: GR: Property acquired during the period between the
execution of the will and the death of the testator is not Note: The heirs are not personally liable with their own individual
included. properties for the monetary obligations/debts left by the
decedent.
XPN: When a contrary intention expressly appears in the
will. (Art. 793) Q: Before his death, A borrowed from X P1, 000 evidenced
by a promissory note. A died without paying the debt. He
Note: Applies only to legacies and devises and not to institution of left no property but he is survived by his son, B, who is
heirs. making good in the buy and sell business. Subseqeuntly, X
brought an action against B for the collection of P1,000
The inheritance of a person includes not only the property and the plus legal interest thereon on the groud that, since B is the
transmissible rights and obligations existing at the time of his only heir of A, he has inherited from the latter not only

CIVIL LAW
the latter’s property, but also all his rights and obligations. When she died, her claim or right to the parcels of land in
Will the action prosper? Reason. litigation was not extinguished by her death but was
transmitted to her heirs upon her death. Her heirs have
A: The action will not prosper. Money debts are obligations thus acquired interest in the properties in litigation and
which are intransmissible for they do not constitute a part became parties in interest in the case (Bonilla v. Barcena, et
of the inheritance. This is so because they must be al., G.R. No. L-41715, June 18, 1976).
liquidated in the testate or intestate proceedings for the
settlement of the estate of the decedent. It is the estate of Q: Can the heir enter into a contract of sale, conveyance
the deceased, instead of the heirs, which is vested and or any disposition pertaining to his interest in the
charged with his rights and obligations which survive after inheritance even pending the settlement of the estate?
his death. After the money debts are paid, what is left of
the estate is distributed among the heirs of the deceased. A: Yes, because his hereditary share/interest in the
For this purpose, it has been held that it is the estate rather decedent’s estate is transmitted or vested immediately
than the heir which must be considered as the continuation from the moment of decedent’s death. This is, however,
of the decedent’s personality. Consequently, the subject to the outcome of the settlement proceedings.
decedent’s estate is a juridical person. (Limjoco v. Fragante,
80 Phil 776). From this, it is clear that X cannot hold B liable Q: What is the nature of the transaction entered into by
for the payment of the obligation. the heir pertaining to his hereditary share in the estate
pending the settlement of the estate?
Q: Is a contract of guaranty extinguished by death?
A: The effect of such transaction is to be deemed limited to
A: No, because a contract of guaranty does not fall in any of what is ultimately adjudicated to the heir. However, this
the exceptions under Art. 1311 (relativity of contracts). A aleatory character of the contract does not affect the
guarantor’s obligation is basically to pay the creditor if the validity of the transaction.
principal debtor cannot pay. Payment does not require any
personal qualifications. The personal qualifications become Q: Can an heir sell any particular part of the estate?
relevant only at the time the obligation is incurred but not
so at the time of discharge or fulfillment of the obligation A: An heir can sell his undivided share of the inheritance
(Estate of Hemady v. Luzon Surety Co., Inc., G.R. No. L-8437, but not any particular part of the estate. (Flora v. Prado,
Nov. 28, 1956). GR. No. 156879) An heir can validly convey a property of
the estate only in so far as his individual share in the co-
Q: The wife died while the action for legal separation was ownership is concerned. (Aguirre v. CA, GR. No. 122249)
pending. Her children, however, wanted to continue the
action. They ask that they be allowed to substitute their Q: Can an heir alienate or dispose his interest over his
deceased mother, arguing that the action should be future inheritance during the lifetime of the decedent?
allowed to continue. Decide.
A: GR: Contracts entered into upon future inheritance are
A: The children cannot be substituted in an action for legal void. (Art 1347, par. 2)
separation upon the death of their mother who filed the
case. An action for legal separation is purely personal on XPN: Partition inter vivos (Art 1080)
the part of the innocent spouse because such an action
affects the marital status of the spouses. (Bonilla v. Q: What are the requisites for the contract to be classified
Barcena, G.R. No. L-41715, June 18, 1976) as one upon future inheritance?
Q: Fortunata died while her action for quieting of title of A:

parcels of land was pending. Does her death result in the 1. The succession has not yet been opened.
extinguishment of the action or may her heirs substitute 2. The object of the contract forms part of the
her in the case? inheritance.
3. The promissory has an expectancy of a right
A: Her heirs may substitute her because the action is not which is purely hereditary in nature with respect
extinguished by her death. Since the rights to the to the object.
succession are transmitted from the moment of the death
of the decedent, from that moment, the heirs become the Q: Can an heir enter into a compromise agreement to
absolute owners of his property, subject to the rights and renounce his rights over a future inheritance?
obligations of the decedent, and they cannot be deprived of
their rights thereto except by the methods provided for by A: No. Every renunciation or compromise as regards a
law. The right of the heirs to the property of the deceased future legitime between the person owing it and his
vests in them upon such death, even before judicial compulsory heirs is void, and the latter may claim the same
declaration of their being heirs in the testate or intestate upon the death of the former; but they must bring to
proceedings. collation whatever they may have received by virtue of the
renunciation or compromise (Art 905).

2013 GOLDEN NOTES
SUCCESSION
A future legitime is merely an expectancy, and the heir does Q: What kind of “death” is contemplated under the New
not acquire any right over the same until the death of the Civil Code?
testator. Hence, juridically, there is nothing on which to
compromise. Furthermore, Art. 1347 of NCC expressly A: The principle under Art. 777 applies to both:
provides that, “no contract may be entered into upon (a) ACTUAL death; and
future inheritance except in cases expressly authorized by (b) PRESUMPTIVE death.
law.”
Note: Absentee shall not be considered dead for the purpose
Q: Is actual delivery necessary for an heir to acquire of opening his succession till after an absence of ten years. If
ownership over an inherited property? he disappeared after the age of seventy-five years, an
absence of five years shall be sufficient in order that his
succession may be opened. (Art. 390, NCC)
A: No. The possession of hereditary property is deemed
transmitted to the heir without interruption and from the
Q: What are the different circumstances of qualified or
moment of the death of the decedent, in case the
extraordinary absence in the Civil Code?
inheritance is transmitted.
Q: Pending a proceeding determining the rightful heirs, A:

can the prospective heirs demand delivery of their 1. A person on board a vessel lost during a sea voyage, or
supposed inheritance? an aeroplane which is missing, who has not been
heard of for four years since the loss of the vessel or
A: Yes. Ownership passes to the heir at the very moment of aeroplane;
death. 2. A person in the armed forces who has taken part in
war, and has been missing for four years;
Q: What is the basis of the heirs’ rights to the fruits, if 3. A person who has been in danger of death under other
any? circumstances and his existence has not been known
for four years.
A: The Right of Accession
Note: The persons included the aforementioned circumstances are
SUCCESSION OCCURS AT THE MOMENT OF DEATH considered dead for all purposes including the division of the
estate among the heirs (Art. 391, NCC).
Q: When will the descendant acquire the right to inherit?
Note: If there is a doubt, as between two or more persons who are
Does that mean that they automatically become owners
called to succeed each other, as to which of them died first,
of the inheritance?
whoever alleges the death of one prior to the other, shall prove the
same; in the absence of proof, it is presumed that they died at the
A: The rights to the succession are transmitted from the same time and there shall be no transmission of rights from one to
moment of the death of the decedent (Art. 777). the other (Art. 43, NCC).
It is clear that the moment of death is the determining KINDS OF SUCCESSION AND SUCCESSORS
point when the heirs acquire a definite right to the
inheritance, whether such right be pure or conditional. The Q: What are the kinds of succession?
possession of hereditary property is therefore deemed
transmitted to the heir without interruption and from the A:
moment of death of the decedent, in case the inheritance is 1. Testamentary Succession- That which results from the
accepted. designation of an heir, made in a will executed in the
form prescribed by law. (Art 779)
The right of the heirs to the property of the deceased vests 2. Legal or Intestate Succession- That which takes place
in them even before judicial declaration of their being heirs if a person dies without a will, or with a void will, or
in the estate or intestate proceedings. one which has subsequently lost its validity.
3. Mixed Succession- that effected partly by will and
Note: It is immaterial whether a short or long period of time partly by operation of law. (Art 780)
elapses between the death of the predecessor and the entry in the 4. Compulsory Succession- That which takes place
possession of the properties of the inheritance, because the right is compulsorily by operation of law with respect to the
always deemed to retroact to the moment of death.
legitime in favor of compulsory heirs.
Q: What is the interest of the heir over the inheritance
Q: What are the kinds of heirs?
prior to the death of the decedent?
A: His interest is merely inchoate or a mere expectancy A:

1. Voluntary or testamentary heirs – called to succeed
Q: What law determines who the heirs are? by virtue of the will of the testator:
a. Devisee
A: The law at the time of the decedent’s death. b. Legatee

CIVIL LAW
Note: An heir is one who succeeds to the whole (universal) or Q: Suppose a person is named to succeed to an entire
aliquot part of the estate. Devisee or legatee is one who estate. The estate, however, consists of only one parcel of
succeeds to definite, specific, and individualized properties. land. Is he an heir or a devisee?
2. Compulsory – called by law to succeed to a portion of A: It depends on the manner of his designation in the will.
the testator’s estate known as legitime. Those who Here, because he is called to inherit the entire estate, he is
succeed by force of law to some portion of the an heir.
inheritance, in an amount predetermined by law, of
which they cannot be deprived by the testator, except Q: In what instances do the distinctions between heirs and
by a valid disinheritance devisees/legatees become significant?
3. Legal or Intestate – by operation of law through A:

intestate succession. Those who succeed to the estate 1. Preterition. The effect is to annul entirely the
of the decedent who dies without a valid will, or to the institution of heirs but the legacies and devises shall be
portion of such estate not disposed of by will. valid insofar as they are not inofficious.
2. Imperfect/defective disinheritance. The effect is to
Q: Who are devisees and legatees? annul the institution of heirs insofar as it may
prejudice the person disinherited but the devises and
A: Devisees are persons to whom gifts of real property are legacies and other testamentary dispositions shall be
given by virtue of a will. Legatees are persons to whom gifts valid to such extent as will not impair the legitime.
of personal property are given by virtue of a will. 3. After-acquired property. Such properties are not, as a
rule, included among the properties disposed of,
Q: What are the distinctions between heirs and unless it should expressly appear in the will itself that
legatees/devisees? such was the testator’s intention. However, this rule is
applicable only to legacies and devises, and not to
A: institution of heirs.
HEIRS DEVISEES OR LEGATEES 4. Acceptance or repudiation of successional rights
As to representation of deceased’s juridical person
Represent the juridical Never represent the TESTAMENTARY SUCCESSION
personality of the personality of the
deceased and acquire their deceased no matter how Q: What is a will?
rights, with certain big the legacy or the
exceptions to his devise is A: A will is an act whereby a person is permitted, with the
obligations formalities prescribed by law, to control to a certain degree
the disposition of his estate, to take effect after his death.
Determinability of amount of inheritance
(Art. 783)
Inherit an undetermined Are always given a
quantity whose exact determinate thing or a Q: What are the characteristics of a will?
amount cannot be known fixed amount
a priori and which cannot A: A will is:
be fixed until the 1. Statutory right – The making of a will is only a
inheritance is liquidated statutory not a natural right. Hence, a will should
Extent of successional right be subordinated to both the law and public
Succeed to the remainder Only succeed to the policy.
of the properties after all determinate thing or 2. Unilateral act – No acceptance by the transferees
the debts and all the quantity which is is needed during the lifetime of the testator.
legacies and devices have mentioned in the legacy or 3. Strictly personal act – The disposition of property
been paid or given devise is solely dependent upon the testator.
As to when they exist 4. Ambulatory – A will is essentially revocable
Can exist whether the Only in testamentary during the lifetime of the testator.
succession be testate or succession 5. Free from vices of consent – A will must have
intestate been executed freely, knowingly and voluntarily,
Effect of preterition otherwise, it will be disallowed.
The institution of an heir is The legacies and devises 6. Individual act – A will must be executed only by
entirely annulled remain valid insofar as one person. A joint will executed by Filipinos even
they are not inofficious. abroad is not allowed in the Philippines.
Effect of defective disinheritance
Note: Mutual wills – Separate wills although containing
In case of imperfect or The legacies and devises reciprocal provisions are not prohibited, subject to the
defective disinheritance, remain valid to such rule on disposicion captatoria.
the institution of an heir is extent as will not impair 7. Solemn or formal act – A will is executed in
annulled to the extent that the legitime. accordance with formalities prescribed by law.
the legitimes are impaired.

2013 GOLDEN NOTES
SUCCESSION
PERSONAL ACT; Testamentary provisions in favor of the poor in general, without
NON-DELEGABILITY OF WILL-MAKING designation of particular persons or of any community, shall be
deemed limited to the poor living in the domicile of the testator at
the time of his death, unless it should clearly appear that his
Q: What is meant by “strictly personal act”?
intention was otherwise (Art. 1030, NCC).
A: Under Art. 784, the making of a will is a strictly personal

Q: How should the provisions of a will be construed?
act; it cannot be left in whole or in part to the discretion of
a third person, or accomplished through the instrumentality
A: If a testamentary disposition admits of different
of an agent or attorney.
interpretations, in case of doubt, that interpretation by
which the disposition is to be operative shall be preferred.
Q: What is the rule on non-delegability of will-making?
(Art. 788)
A: It is the exercise of the disposing power that cannot be
Construing the provisions of a will, substance rather than
delegated. But the mere mechanical act of drafting the will
form must be regarded, and the instrument should receive
may be done by a third person as it does not constitute a
the most favorable construction to accomplish the purpose
delegation of the will or disposition.
intended by the testator.
Q: What matters cannot be delegated to the discretion of
Reason: Testacy is preferred over intestacy because testacy
a third person?
is the express will of the decedent whereas intestacy is only
his implied will. (Art. 791)
A: The following cannot be delegated to a third person
because they comprise the disposing power of the testator:
Q: What are the rules in the construction of Wills?
1. Duration or efficacy of designation of heirs,
legatees, or devisees.
A:
2. Determination of the portions which the heirs are
1. Words of the will are to be taken in their ordinary and
to receive when referred to by name.
grammatical sense unless there is a clear intention to
3. Determination as to whether or not a disposition
use them in another sense can be gathered, and that
is to be operative. (Art. 785 and 787)
can be ascertained. (Art. 790)
2. Technical words are to be taken in their technical
Note: It is not only the delegation which is void; the
testamentary disposition whose effectivity will depend sense, unless:
upon the determination of the third person is the one a. The context clearly indicates a contrary intention
that cannot be made. Hence, the disposition itself is or
void. b. It satisfactorily appears that he was unacquainted
with such technical sense. (Ibid.)
Q: What, on other hand, may be entrusted to third 3. The invalidity of one of several dispositions contained
persons? in a will does not result in the invalidity of the other
dispositions unless it is to be presumed that the
A: testator would not have made such other dispositions
1. Distribution of specific property or sums of money that if the first invalid disposition had not been made. (Art.
the testator may leave in general to specified classes 792)
or causes 4. Every devise or legacy shall cover all the interest in the
2. Designation of the persons, institutions or property disposed of unless it clearly appears from the
establishments to which such property or sums are to will that he intended to convey a less interest. (Art.
be given or applied. (Art. 786) 794)
Reason: Here, there is really no delegation because the Q: What is the parol evidence rule with respect to
testator has already set the parameters required by law, interpretation of the wills?
namely:
a. The specification of property or sums of money A: When there is an imperfect description, or when no
b. The specification of classes or causes. person or property exactly answers the description,
mistakes and omissions must be corrected, if the error
In effect, the third person will only be carrying out the will appears from the context of the will or from extrinsic
of the testator as determined by these parameters. evidence, excluding the oral declarations of the testator as
to his intention; and when an uncertainty arises upon the
Note: Should the testator dispose of the whole or part of his face of the will, as to the application of any of its provisions,
property for prayers and pious works for the benefit of his soul, in the testator's intention is to be ascertained from the words
general terms and without specifying its application, the executor, of the will, taking into consideration the circumstances
with the court's approval shall deliver one-half thereof or its
under which it was made, excluding such oral declarations.
proceeds to the church or denomination to which the testator may
belong, to be used for such prayers and pious works, and the other (Art.789)
half to the State, for the purposes mentioned in article 1013. (Art.
1029, NCC)

CIVIL LAW
Q: What are the kinds of ambiguities in a will? residence;

3.NCC
A:
1. Latent (Intrinsic) ambiguities – Ambiguities which are TESTAMENTARY CAPACITY AND INTENT
not apparent on the face of a will but to circumstances
outside the will at the time the will was made. E.g. If it Q: Who can make a will?
contains an imperfect description of person or
property; No peson or property exactly answers the A: All persons who are not expressly prohibited by law may
description. make a will (Art. 796). The capacity of a person to make a
will shall be governed by his national law (Art. 15, NCC).
Example: Testator gives a legacy “to my cousin Anna”
and it will turn out that the testator has three cousins Note: The ability as well as the power to make a will must be
named “Anna” present at the time of the execution of the will.
2. Patent (Extrinsic) ambiguities – Those which are Q: What are the requisites of testamentary capacity?
apparent on the face of the will. E.g. Uncertainty
which arises upon the face of the will as to the A:
application of any of its provisions. (Art. 789) 1. All persons not expressly prohibited by law
2. At least 18 years of age; and
Example: Testator gives a devise “to some of the 3. Of sound mind
eleven children of my only brother"
Note: It shall be sufficient if the testator was able at the time
Q: What are the steps in resolving the ambiguities? of making the will to know the:
a. nature of the estate to be disposed of;
b. proper objects of his bounty; and
A: c. character of the testamentary act.
1. Examine the will itself;
2. Refer to extrinsic evidence or the surrounding Q: What is meant by sound mind?
circumstances, except oral declarations of the testator
as to his intention. A: To be of sound mind, it is not necessary that the testator
be in full possession of all his reasoning faculties or that his
Q: What law governs the validity of wills? mind be wholly unbroken, unimpaired or unshattered by
disease, injury or other cause. It shall be sufficient if the
A: testator was able at the time of making the will to know the
1. As to extrinsic validity - refers to the forms and nature of the estate to be disposed of, the proper objects
solemnities required by law. It is governed by: of his bounty, and the character of the testamentary act.
a. As to time - the law in force at the time of the
making of the will. The requirement that the testator be of sound mind is
b. As to place - the will can be executed in essential only at the time of the making of the will (or
accordance to the formalities of the testator’s execution). If he is not of sound mind at that time, the will
nationality, domicile, residence or the place is invalid regardless of his state of mind before or after such
where the will was executed depending on the execution. In other words, the will of an incapable will not
place where it is executed and the nationality of be validated by supervening capacity.
the testator.
2. As to Intrinsic validity- refers to the legality of Note: Conversely, if the testator was of sound mind at the time of
provisions in the will. It is governed by: the making of the will, the will is valid even if the testator should
a. As to time- the law in force at the time of the later on become insane and die in that condition. In other words,
decedent’s death. supervening incapacity does not invalidate an effective will.
b. As to place- the national law of the testator
governs the intrinsic validity of the will regardless Q: If there is no proof as to the soundness of the mind of
of the place of execution. the testator at the time he executed his will, what is the
status of his will assuming that he complies with all other
Place of execution Applicable Law requisites for its validity?
Testator is a Filipino
Philippines New Civil Code (NCC) A: The will is valid. The law presumes that every person is of
sound mind, in the absence of proof to the contrary.
Foreign country Law of the place of
execution Such presumption of soundness of mind, however, does
Testator is an alien not arise if the testator was:
Philippines NCC or 1. Publicly known to be insane, one month, or less,
National law before making his will;
Foreign country 1.National law; 2. Under guardianship at the time of the making of
2. Law of the place of the will.

2013 GOLDEN NOTES
SUCCESSION
FORMAL VALIDITY RULES
Note: Mere weakness of mind or partial imbecility from disease of
body or from age does not necessarily render a person incapable of Q: What law governs the forms and solemnities of wills?
making a will.
A: It is the law of the country where the will was executed
Q: Who has the burden of proving that the testator acted that governs the form and solemnities of wills. (Art. 17, 1
st
in lucid interval? paragraph; Art. 815)
A: The person who maintains the validity of the will has the Q: What are included in the due execution of the will?
burden of proving that the testator made the will during a
lucid interval. A: It includes a determination of whether
1. the testator was of sound and disposing mind at the
Q: Is there a difference between testamentary capacity time of its execution,
and testamentary power? 2. that he freely executed the will and was not acting
under duress, fraud, menace or undue influence and
A: No. Testamentary capacity refers to the ability as well as 3. that the will is genuine and not forgery,
the power to make a will. In American law, testamentary 4. that he was of proper testamentary age
capacity is concerned with the ability of the testator while 5. that he is not expressly prohibited by law from
the testamentary power involves a privilege under the law. making a will.
Hence, although a person may have testamentary capacity,
it does not necessarily follow that he has testamentary Q: What are the effects of a will executed by an alien
power. In the Philippines, however, such distinction is lost abroad?
altogether. As a matter of fact, the term testamentary
power is sometimes understood to refer to the power of A: The will of an alien who is abroad produces effect in the
the testator to designate the person or persons who are to Philippines if made with the formalities prescribed by the
succeed him in his property and transmissible rights and law of the place in which he resides, or according to the
obligations. formalities observed in his country, or in conformity with
those which the Civil Code prescribes. (Art. 816)
Q: Is a person suffering from civil interdiction qualified to
make a will? Q: What are the effects of a will executed by an alien in
the Philippines?
A: Yes. He is deprived only of the power to dispose of his
properties through acts inter vivos but not through acts A: It shall produce the same effect as if it was executed in
mortis causa. (Art. 34, Revised Penal Code) the Philippines if it is executed in accordance with the law
of the country where he is a citizen or subject, and which
Q: Is a married woman required to obtain the consent of might be proved and allowed by the law of his own country.
the husband and the authority of the court before she can (Art. 817)
make a will?
Q: Is a joint will executed by a Filipino in a foreign country
A: No. A married woman may make a will without the valid?
consent of her husband, and without the authority of the
court. (Art 802) A: No. The same holds true even if it is authorized by the
law of the country where the joint will was executed. (Art.
Note: A married woman may dispose by will all her separate
819) A joint will is against the public policy of the
property as well as her share of the conjugal partnership or
absolute community property. (Art 803) Philippines.
LAW GOVERNING SUBSTANTIVE VALIDITY

Q: May an illiterate execute a will?
Q: What are the matters mentioned in Article 15 of the
A: GR: Yes, an illiterate can make an ordinary or notarial
New Civil Code which are governed by Philippine laws?
will because the law allows a notarial will to be written by
someone else and in certain cases, for the will to be read by
A:
someone else not the testator.
1. Family rights and duties
2. Status;
XPN: The illiterate cannot make a holographic will because
3. Condition; and
it is required to be in writing by the testator.
4. Legal capacity of persons. (Art. 15)
Q: What are the matters pertaining to intestate and

testamentary successions which are regulated by the
national law of the deceased?
A:
1. Order of succession

CIVIL LAW
2. Amount of successional rights Q: Is it presumed that the testator knows the dialect of
3. Intrinsic validity of testamentary provisions the locality where he resides?
4. Capacity to succeed. (Art. 16; Art. 1039)
A: If the testator resides in a certain locality, it can be
Q: What are the formal requirements common to both presumed that he knows the dialect or the language in the
notarial and holographic wills? said locality. (Abangan v. Abangan, G.R. No. 13431, Nov. 12,
1919)
A:
1. Law governing extrinsic validity of wills; Note: The fact that the testator knew the language need not
2. In writing; appear on the face of the will. This fact may be proven by extrinsic
3. In a language or dialect known to the testator. evidence.
Note: The object of the solemnities surrounding the execution of Q: Does this rule apply to witnesses in a notarial or
wills is to close the door against bad faith and fraud, to avoid attested will?
substitution of wills and testaments and to guarantee their truth
and authenticity. A: No. The rule only applies to the testator, whether in
notarial or holographic will. Further, Art. 805 is clear that
Q: Is the rule that every will must be in writing the attestation clause need not be in the language known
mandatory? to the witnesses.
A: Yes. If the will is not in writing, it is void and cannot be Q: What are the formalities in the execution of a notarial
probated. will?
Note: Philippine laws do not recognize the validity of “noncupative A: WESA-PNAN
wills,” which are oral wills declared or dictated by the testator and 1. In Writing;
dependent merely on oral testimony.
2. Executed in a language or dialect known to the
testator;
Q: In case of a holographic will, what is the requirement
3. Subscribed at the end thereof by the testator
for its validity?
himself or by the testator’s name written by some
other person in his presence, and by his express
A: It must be entirely handwritten by the testator himself.
direction;
(Art. 810)
4. Attested and subscribed by three or more
credible witnesses in the presence of the testator
Q: What are the rules in relation to notarial or attested
and of one another;
wills?
5. The testator or the person requested by him to
write his name must also sign every Page, except
A: Notarial or attested will may be:
the last, on the left margin in the presence of the
1. entirely handwritten by a person other than the
witnesses;
testator;
2. partly handwritten by the testator himself and Note: All the pages must be signed by the testator. The
partly handwritten by another person; exception pertains to the signature at the left margin
3. entirely printed, engraved or lithographed; or and not the signature itself. Signature at the left margin
4. partly handwritten (whether by testator or on the last page is no longer a mandatory requirement
another person) and partly printed, engraved or since the testator will already sign it at the end of the
lithographed. will.
NOTARIAL WILLS 6. All the pages shall be Numbered correlatively in

letters on the upper part of each page;
Q: Is the rule that every will must be executed in a 7. Must contain an Attestation clause which
language known to the testator mandatory? expressly states the following:
a. The number of pages used upon which the
A: Yes, otherwise, the will is void. (Suroza v. Honrado, 110 will is written;
SCRA 388). It is also applicable eve if the provisions of the b. The fact that the testator signed the will and
will are interpreted or explained to the testator. every page thereof, or caused some other
person to write his name, under his express
Q: Is the fact that the will was executed in a language direction, in the presence of the
known to the testator required to be stated in the instrumental witnesses;
attestation clause? c. The fact that the witnesses witnessed and
signed the will and all the pages thereof in
A: No. This fact can be established by extrinsic evidence or the presence of the testator and of one
evidence aliunde. (Lopez v. Liboro, 81 Phil. 429) another.

2013 GOLDEN NOTES
SUCCESSION
Note: The attestation clause is executed by the by the testator to be his signature. (Garcia v. La Cuesta, GR.
witnesses to the will and not the testator. Hence, No. L-4067)
even if the language used in the attestation clause
is not known to the testator, but only to the
The three witness rule required for the validity of an
witnesses, the will still remains valid.
ordinary will is satisfied provided either two of the
conditions exist:
8. Must be acknowledged before a Notary public by
the testator and the witnesses.
1. Roberta could see Clara and the other witnesses
Note: A jurat is insufficient as the law requires an at any time while she was in the toilet, had she
acknowledgment executed by the party before a notary wanted to.
public, not a declaration of the notary public. 2. If Roberta could not have seen Clara and the
other witnesses sign the will, the same is valid if
Q: What is the effect if one or some of the requisites are the will was acknowledged before a notary public
lacking? other than Benjamin.
A: Lack of one of the requisites is a fatal defect which will It is not necessary that the testator or the witnesses should
render the will null and void actually see the other subscribe their names to the
instrument provided that he is in the position to see them
Q: Where must the testator sign the will? sign if he chooses. Thus signing must be considered in the
presence of Hannah who was reading a book on the couch
A: The signature of the testator of the will must be at the beside the table.
end of the will, which may be in the logical end (last
testamentary disposition) or physical end (non dispositive Q: In an ordinary will, may the testator validly delegate
provisions). the signing to someone else?
Q: What is the effect of testamentary dispositions placed A: Yes. A will is valid if it is signed by way of the testator’s
in the will after the signature of the testator? name written by some other person in his presence, and by
his express direction.
A: Where the signature is followed by dispositive
provisions, even the portion of the instrument preceding Q: May a notary public serve as one of the instrumental
the signature cannot be probated, because the instrument witnesses?
must be considered as a whole.
A: No. The notary public before whom the will was
Note: Signing before the end invalidates not only the dispositions acknowledged cannot be considered as the third
that come after but the entire will, because then one of the instrumental witness since he cannot acknowledged before
statutory requirements of signing at the end would not have been himself having signed the will. He cannot split his
complied with (Azuela v. CA 487 SCRA 119). personality into two so that one will appear before the
other to acknowledged his participation in the making of
Q: Is a fingerprint sufficient signature? the will. To permit such a situation to obtain would be
sanctioning a sheer absurdity (Cruz v. Villasor, 52 SCRA 31)
A: In notarial will, it is allowed as long as it is voluntarily
made but not in holographic will because it presupposes SPECIAL RULES FOR HANDICAPPED TESTATORS
that he knows how to write.
Q: What are the special requirements if the testator is
Q: Is a cross a sufficient signature? deaf or mute?
A: No, except If it is (1) the customary, habitual signature A:

or (2) one of the ways he sign his signature. The one who 1. If the testator is able to read, he must personally read
alleges that it is the customary, habitual or one of the ways the will; or
he sign his signature has the burden of proof. 2. If the testator is unable to read, he must designate two
persons to read it and communicate to him, in some
Q: Clara, thinking of her mortality, drafted a will and practicable manner, the contents thereof. (Art. 807)
asked Roberta, Hannah, Luisa and Benjamin to be
witnesses. During the day of the signing of the will, Clara Note: The law does not require that the persons reading and
fell down the stairs and broke both her arms. Coming from communicating the contents of the will be the instrumental
the hospital, Clara, insisted on signing her will by witnesses.
thumbmark and said she will sign her full name. Later
Clara was run over by a drunk driver while crossing the Q: What are the special requirements if the testator is
street in Greenbelt. May the will of Clara be admitted to blind?
probate? Give your reason briefly. (2007 Bar Question)
A: The will shall be read to him twice, once by one of the
A: Yes. The will of Clara may be probated. A thumbmark has subscribing witnesses, and another time by the notary
been considered by the SC as a valid signature if intended public before whom the will is acknowledged. (Art. 808)

CIVIL LAW
the time of attesting, their becoming subsequently

Note: Art. 808 applies not only to blind testators but also to those incompetent shall not prevent the allowance of the will.
who, for one reason or another, are incapable of reading their
wills, either because of poor or defective eye sight or because of Q: Would a person qualified to make a will necessarily be
illiteracy.
qualified to be a witness to the will of another?
SUBSTANTIAL COMPLIANCE
A: A person qualified to make a will is not necessarily
qualified to be a witness to the will of another. Even if a
Q: When is a will not rendered invalid by reason of defects
person can make a will because he can comply with the age
or imperfections in the form of attestation or in the
and mental requirements imposed by law, he cannot be a
language used therein?
witnees to the will of another in four specific cases. They
are:
A: In the absence of bad faith, forgery, or fraud, or undue
and improper pressure and influence, defects and
1. Where he is not domiciled in the Philippines
imperfections in the form of attestation or in the language
2. Where he had been convicted of falsification of a
used therein shall not render the will invalid if it is proved
document, perjury or false testimony
that the will was in fact executed and attested in
3. Where he is blind, deaf or dumb
substantial compliance with all the requirements of article
4. Where he is not able to read or write.
805. (Art 809)
Q: What is the rule if an instrumental witness is a
Q: What is the rule in cases of omissions in the will?
beneficiary under the will?
A: Omissions which can be supplied by an examination of
A: If a person attest to the execution of a will, to whom or
the will itself, without the need of resorting to extrinsic
to whose spouse, or parent or child, a devise or legacy is
evidence, will not be fatal and, correspondingly, would not
given by such will, such devise or legacy shall, so far only as
obstruct the allowance to probate of the will being assailed.
concerns such person, or spouse, or parent, or child of such
person, or any one claiming under such person or spouse,
However, evidence aliunde are not allowed to fill a void in
or parent, or child, be void unless there are three other
any part of the document or supply missing details that
competent witnesses to such will. (Art 823)
should appear in the will itself. They only permit a probe
into the will, an exploration into its confines, to ascertain its Note: If the witness is instituted as heir, not as devisee or legatee,
meaning or to determine the existence or absence of the the rule would still apply, because undue influence or pressure on
requisite formalities of law (Cañeda v. CA, G.R. No. 103554, the part of the attesting witness would still be present.
May 28, 1993).
Q: Stevie was born blind. He went to school for the blind,
WITNESSES and learned to read in Braille language. He speaks English
fluently. Can he:
Q: What are the qualifications of witnesses?
1. Make a will?
A: Witnesses to a will must be: S18-ABCD
1. Of Sound mind. A: Yes. Stevie may make a notarial will. A blind man is not
2. At least 18 years of age. expressly prohibited from executing a will. In fact, Art. 808
3. Able to read and write of NCC provides for additional formality when the testator
4. Not Blind, deaf or dumb is blind. Stevie however, may not make a holographic will in
Braille because the writing in Braille is not a handwriting. A
Note: While a blind or deaf may Not be a witness, holographic will to be valid must be entirely written, signed
he could be a testator in a notarial will and dated by the testator in his own handwriting.
5. Not have been Convicted by final judgment of 2. Act as a witness to a will?

falsification of a document, perjury or false
testimony. A: No. A blind man is disqualified by law to be a witness to a
6. Domiciled in the Philippines – his habitual notarial will.
residence must be in the Philippines (Art. 50,
NCC) 3. In either of the instances, must the will be read to him?
(2008 Bar Question)
Note: The witnesses must be domiciled in the Philippines applies
only if a Filipino citizen executes his will in the Philippines. A: In case Stevie executes a notarial will, it has to be read to
him twice. First by one of the instrumental witnesses and
Q: When qualifications of witnesses determined? second by the notary public before whom the will was
acknowledged.
A: It is at the time of the attestation of the will. If the
witnesses attesting the execution of a will are competent at

2013 GOLDEN NOTES
SUCCESSION
Q: Can a notarial will still be considered valid even if one (Kalaw v. Relova, G.R. No. L-40207, Sept. 28,
of the instrumental witnesses is of unsound mind as long 1984)
as the testator is of sound mind?
2. Where the alteration affects the date of the will
A: No. The will shall be void since it was expressly provided or the signature of the testator, the whole will is
under Art.820 of the NCC that for a witness to a notarial or void.
attested will to be qualified, he/she must be of sound mind.
rd
3. If the words written by a 3 person were
Q: Can one of the instrumental witnesses be the person contemporaneous with the execution of the will,
who signs the will of the testator by writing his name in even though authenticated by the testator, the
his presence and upon his express direction? entire will is void for violation of the requisite that
the holographic will must be entirely in the
A: No. The person signing the testator’s name must not be testator’s handwriting.
one of the 3 instrumental witnesses because he must sign
in the presence of the testator and of three other Q: In a holographic will, where must the signature be?
instrumental witnesses.
A: The signature must be at the end of the will. This can be
Note: The essential thing for validity (if a witness is the one who inferred from Article 812 of the NCC by the reference to
would sign under the presence of the testator and under his dispositions “written below his signature.” This phrase
express direction or the signing by an agent of the testator) is that
implies that the signature is at the end of the will, and any
the agent write the testator’s name¸ nothing more (Barut v.
Cabacungan, 21 Phil. 461).
disposition below it must further be signed and dated.
Q: What is the effect of a testamentary disposition after

HOLOGRAPHIC WILLS
the signature? Will it affect the validity of a will?
Q: What is a holographic will?
A: “In a holographic will, the dispositions of the testator
written below his signature must be dated and signed by
A: A holographic will is one entirely written, dated, and
him in order to make them valid as testamentary
signed by the hand of the testator himself. It is subject to
dispositions” (Art. 812). If one disposition below the
no other form, and may be made in or out of the
signature of the testator is not dated, even if signed, that
Philippines, and need not be witnessed. (Art. 810)
particular disposition is void, without affecting the validity
of the others or of the will itself.
Q: What are the formalities required in the execution of
holographic will? Note: When a number of dispositions appearing in a holographic
will are signed without being dated, and the last disposition has a
A: signature and a date, such date validates the dispositions
1. Entirely handwritten by the testator, preceding it, whatever be the time of prior dispositions (Art. 813,
2. Dated NCC)
3. Signed by the hand of the testator himself
Q: Is it required that the date of the will should include
Q: What are the effects of insertions or interpolations the day, month and year of its execution?
rd
made by a 3 person?
A: GR: The "date" in a holographic will should include the
A: GR: When a number of erasures, corrections, day, month, and year of its execution.
cancellation, or insertions are made by the testator in the
will but the same have not been noted or authenticated XPN: When there is no appearance of fraud, bad faith,
with his full signature, only the particular words erased, undue influence and pressure and the authenticity of the
corrected, altered will be invalidated, not the entirety of will is established and the only issue is whether or not the
the will. date appearing on the holographic will is a valid compliance
with Art. 810 probate of the holographic will should be
XPNs: allowed under the principle of substantial compliance.
1. Where the change affects the essence of the will
of the testator; Note: The day and month may be indicated by implication as long
as there is no doubt as to the exact date. The date may be placed
Note: When the holographic will had only one at the end or at the beginning of the will, or in the body, although
substantial provision, which was altered by substituting its normal location should be after the signature.
the original heir with another, and the same did not
carry the requisite full signature of the testator, the Q: Where must the date be placed in a holographic will?
entirety of the will is voided or revoked.
A: The law does not specify the particular location where
Reason: What was cancelled here was the very the date should be placed in the will. The only
essence of the will; it amounted to the revocation requirements are that the date be in the will itself and
of the will. Therefore, neither the altered text nor executed in the hand of the testator.
the original unaltered text can be given effect.

CIVIL LAW
Q: Is it required that the will be executed on a single day, ALTERATIONS, REQUIREMENTS

at one time and in the same ink?
Q: What are the rules in case of insertion, cancellation,
A: No. The unity of the act is not required in holographic erasure or alteration?
wills.
A: In case of insertion, cancellation, erasure or alteration in
Q: What are the rules governing the probate of a holographic will, the testator must authenticate the same
holographic wills? by his full signature. (Art. 814)
A: In the post mortem probate of holographic wills, the Note: Full signature refers to the testator’s habitual, usual and
following rules are to be observed as to the number of customary signature.
witnesses to be presented:
Q: What is the effect if the insertion, cancellation, erasure
1. If the will is not contested, it shall be necessary or alteration is not authenticated with the testator’s full
that at least one witness who knows the signature?
handwriting and signature of the testator
explicitly declares that the will and the signature A: It is considered as not made, but the will is not
are in the handwriting of the testator. invalidated. It does not affect the validity of the will itself.
2. If the will is contested, at least three of such The will is not thereby invalidated as a whole, but at most
witnesses shall be required. only as regards the particular words erased, corrected or
3. In the absence of any competent witness and if inserted. (Kalaw v. Relova, 132 SCRA 237, 1984), citing
the court deems it necessary, expert testimony Velasco v. Lopez, (1 Phil 720, 1903), unless the portion
may be resorted to. (Art. 811) involved is an essential part of the will, such as the date.
Q: In the probate of a holographic will, the will was Note: Where the testator himself crossed out the name of the heir
named, and substituted the name of another, without
contested. Is the requirement for at least three witnesses
authentication, it was held that this did not result in making the
to explicitly declare that the signature in the will is the person whose name was crossed as heir. The effect of this is that
genuine signature of the testator mandatory or the entire will is voided or revoked for the simple reason that
permissive? nothing remains in the will after that which could remain valid
(since one of the essential part of the will, the designation of heir,
A: The requirement is mandatory. In the case of Ajero v. is avoided by lack of proper authentication) (Kalaw v. Relova, 132
Court of Appeals, the Court held that “the object of the SCRA 237).
solemnities surrounding the execution of wills is to close
the door against bad faith and fraud, to avoid substitution JOINT WILLS
of wills and testaments and to guaranty their truth and
authenticity. Q: Are joint wills allowed in the Philippines?
Therefore, the laws on this subject should be interpreted in A: Two or more persons cannot make a will jointly, or in the
such a way as to attain these primordial ends. But, on the same instrument, either for their reciprocal benefit or for
other hand, also one must not lose sight of the fact that it is the benefit of a third person. (Art. 818)
not the object of the law to restrain and curtail the exercise
of the right to make a will. Wills, prohibited by Article 818, executed by Filipinos in a
foreign country shall not be valid in the Philippines, even
Q: May the contents and due execution of a lost though authorized by the laws of the country where they
holographic will be established merely through oral may have been executed. (Art. 819)
testimonies of witness who allegedly seen the same?
Note: Mutual wills – Separate wills although containing reciprocal
provisions are not prohibited, subject to the rule on disposition
A: No. The execution and contents of a lost or destroyed
captatoria.
holographic will may not be proved by the bare testimony
of witnesses who have seen or read such will. The will itself
Q: What is the reason why joint wills are prohibited?
must be presented; otherwise, it shall produce no effect
(Gan v. Yap, 104 Phil. 509; id.)
A: Whether in the Philippines or in foreign country, Filipino
citizens are prohibited from executing joint wills because it
Q: May a holographic will which was lost or could not be
is a matter of public policy. Joint wills may lead to the
found be proved by means of a photostatic copy
commission of parricide. (In re Will of Bilbao, 87 Phil. 114;
(photocopy)?
Dacanay v. Florendo)
A: Yes. A photostatic copy or xerox copy of the holographic
Q: John and Paula. British citizens at birth, acquired
will may be allowed because comparison can be made with
Philippine citizenship by naturalization after their
the standard writings of the testator. (Rodelas v. Aranza,
marriage. During their marriage the couple acquired
119 SCRA 16)
substantial landholdings in London and in Makati. Paula

2013 GOLDEN NOTES
SUCCESSION
bore John three children, Peter, Paul and Mary. In one of Q: What formalities are required in the execution of the
their trips to London, the couple executed a joint will codicil?
appointing each other as their heirs and providing that
upon the death of the survivor between them the entire A: The formalities which are required in the execution of
estate would go to Peter and Paul only but the two could the codicil are the same those required in the execution of
not dispose of nor divide the London estate as long s they the will.
live. John and Paula died tragically in the London Subway
terrorist attack in 2005. Peter and Paul filed a petition for Q: Is a codicil a will per se?
probate of their parents’ will before a Makati Regional
Trial Court. Should the will be admitted to probate? (2008 A: GR: No. A codicil is a supplement or addition to a will
Bar Question) made after the exection of a will and annexed to be taken
as a part thereof (Art.825)
A: No, the will cannot be admitted to probate. Joint wills
are void under the New Civil Code. And even if the joint will XPN: If the latter instrument makes disposition
executed by Filipinos abroad were valid where it was independent of those in the original will, without explaining
executed, the joint will is still not valid in the Philippines. or modifying such original will, then it is a new WILL, and it
must be executed in accordance with all the formalities
Q: Are the testamentary dispositions valid? (2008 Bar required in executing a will.
Question)
Q: What are the distinctions between a codicil and a
A: If a will is void, all testamentary dispositions contained in subsequent will?
that will are also void. Hence, all testamentary provisions
contained in the void joint will are also void. A:
CODICIL SUBSEQUENT WILL
Q: Is the testamentary prohibition against the division of Forms a part of the
the London estate valid? (2008 Bar Question) It is a new or a separate will.
original will.
A: The testamentary prohibition against the division by Supplements the original Makes dispositions without
Peter and Paul of the London estate for as long as they live, will, explaining, adding to, reference to and
is not valid. Art. 494 of NCC provides that a donor or or altering any of its independent of the original
testator may prohibit partition for a period which may not dispositions. will.
exceed twenty (20) years. If it provides for a full
disposition of the testator’s
Q: Manuel, a Filipino, and his American wife Eleanor, Does not, as a rule, revoke estate, may revoke the
executed a joint will in Boston, Massachusetts when they entirely the prior will. whole prior will by
were residing in said city. The law of Massachusetts allows substituting a new and last
the execution of joint wills. Shortly thereafter, Eleanor disposition for the same.
died. Can the said will be probated in the Philiipines for
the settlement of her estate? (2000 Bar Question) A will and a codicil, being A prior will and a subsequent
regarded as a single will, being two separate
A: Yes, the will may be probated in the Philippines insofar instrument are to be wills, may be construed
as the estate of Eleanor is concerned. While the Civil Code construed together. independently of each other.
prohibits the execution of joint wills here and abroad, such
prohibition applies only to Filipinos. Hence, the joint will Q: If the former will is a notarial will, is it required that the
which is valid where executed is valid in the Philippines but codicil be notarial in form as well?
only with respect to Eleanor. Under Article 819, it is void
with respect to Manuel whose joint will remains void in the A: No. The law does not require that the codicil be also in
Philippines despite being valid where executed. the form of a notarial will. It may either be in the form of a
holographic will or notarial/attested will.
CODICILS
INCORPORATION BY REFERENCE
Q: What is a codicil?
Q: What is incorporation by reference?
A: A codicil is a supplement or addition to a will, made after
the execution of a will and annexed to be taken as part A: Incorporation by reference is the incorporation of an
thereof, by which any disposition made in the original will is extrinsic document or paper into a will by reference so as to
explained, added to, or altered. (Art. 825) become a part thereof.
Note: The documents or papers incorporated will be considered

part of the will even though the same are not executed in the form
of a will. The doctrine of incorporation by reference is not
applicable in a holographic will unless the documents or papers
incorporated by reference are also in the handwriting of the
testator.

CIVIL LAW
Q: What are the requisites of incorporation by reference? Requisites:

1. The cause must be concrete, factual and not
A: EDIS purely subjective
1. The document or paper referred to in the 2. It must be false
will must be in Existence at the time of the 3. The testator must not know of its falsity
execution of the will; 4. It must appear from the will that the testator is
2. The will must clearly Describe and identify revoking because of the cause which is false.
the same, stating among other things the
number of pages thereof; Note: The rule is if the revocation is based on a false or illegal
3. It must be Identified by clear and satisfactory cause, it is null and void (Art. 833) while institution of heir based on
proof as the document or paper referred to false cause as a general rule does not affect the validity or efficacy
of the institution (Art. 850).
therein;
4. It must be Signed by the testator and the
Q: What are the modes of revoking a will?
witnesses on each and every page, except in
case of voluminous books of account or
A:
inventories. (Art. 827)
1. By implication of law;
Note: Incorporation by reference applies only to attested wills 2. By the execution of a subsequent document;
because of the mention of witnesses in paragraph 4 of Art. 827 3. By physical destruction through burning, cancelation
(Rabuya, Civil Law Reviewer, 2009 ed.) or obliteration. (Art. 830)
REVOCATION OF WILLS Q: Discuss revocation by implication of law
Q: When may the testator revoke a will? A: It takes place when certain acts or events take place
subsequent to the making of a will, which nullify or render
A: A will may be revoked by the testator at any time before inoperative either the will itself or some testamentary
his death. Any waiver or restriction of this right is void. (Art. disposition therein.
828)
Rationale: The law presumes a change of mind on the part
Q: May the right of the testator to revoke the will be of the testator due to certain changed circumstance
waived or restricted? pertaining to the family relations or in the status of the
property.
A: No, the testator’s right to revoke during his lifetime is
absolute because a will is ambulatory. It can neither be Q: What are the instances when revocation by implication
waived nor restricted. As a matter of fact, even if the will of law takes place?
has already been admitted to probate during the testator’s
lifetime, it may still be revoked. This necessarily follows A:
from the principle that “a testament is of force after men 1. Upon the termination of the subsequent marriage in
are dead; otherwise it is of no strength at all while the Article 41 of the FC through the filing of the affidavit of
testator lives.” reappearance, the spouse who contracted the
marriage in bad faith shall be disqualified to inherit
Q: What law governs in case of revocation? from the innocent spouse by testate and intestate
succession. Hence, any testamentary disposition in the
A: will of the innocent spouse in favour of the guilty
1. If the revocation takes place in the Philippines, spouse shall be revoked by implication of law (Art. 43,
whether the testator is domiciled in the Philippines or par. 5, FC).
in some other country – Philippine laws 2. If both spouses of the subsequent marriage referred in
2. If the revocation takes place outside the Philippines: Art. 41 of the FC acted in bad faith, testamentary
a. by a testator who is domiciled in the Philippines – dispositions by one in favour of the other are revoked
Philippine laws by operation of law (Art. 44, FC).
b. by a testator who is not domiciled in this country 3. In case of annulment, the spouse who contracted the
– marriage in bad faith shall be disqualified to inherit
i. Laws of the place where the will was made, or from the innocent spouse by testate and intestate
ii. Laws of the place in which the testator had his succession. Hence, any disposition in the will of the
domicile at the time of revocation. (Art. 829) innocent spouse in favour of the guilty spouse shall be
revoked by operation of law (Art. 50 in relation to Art.
Q: What is the rule in case of revocation based on false or 43, par. 5, FC).
illegal cause? 4. Upon issuance of the decree of legal separation,
provisions in favor of the offending spouse made in
A: Revocation based on a false or illegal cause is null and the will of the innocent spouse shall be revoked by
void. operation of law (Art. 63, par. 4, FC).

2013 GOLDEN NOTES
SUCCESSION
5. In case of preterition of compulsory heirs in the direct
line, whether living at the time of the execution of the Q: Can there be an instance where a subsequent will,
will or born after the death of the testator. In such which is incompatible with the prior will, and such prior
case, the preterition shall annul the institution of heir; will subsist at the same time?
but the devises and legacies shall be valid insofar as
they are not inofficious (Art. 854, NCC) A: Yes. The fact that the subsequent will is posterior and
6. When the heir, devisee or legatee commits any of the incompatible with the first does not mean that the first is
acts of unworthiness which by express provision of law entirely revoked because the revocation may be total or
will incapacitate him to succeed. In such case, any partial.
testamentary disposition in favour of such heir,
devisee or legatee is revoked (Art. 1032, NCC) Note: In case of inconsistent wills, the subsequent will prevails over
7. When in the testator’s will there is a legacy of a credit the prior will because it is the latest expression of testamentary
against a third person or of the remission of a debt of intent of the testator.
the legatee, and subsequently, after the execution of
the will, the testator brings an action against the Q: What is the effect if the revoking will becomes
debtor for the payment of his debt. In such case, the inoperative by reason of incapacity of heirs or
legacy is revoked (Art. 935 and 936, NCC) renunciation?
8. When the testator (a) transforms the thing
bequeathed in such a manner that it does not retain A: A revocation made in a subsequent will shall take effect
either the form or denomination it had, or (b) when he even if the new will should become inoperative by reason
alienates by any title or for any cause the thing of the incapacity of the heirs, devisees or legatees
bequeathed or any part thereof, or (c) when the thing designated therein, or by their renunciation. (Art. 832)
bequeathed is totally lost during the testator’s lifetime
or after his death without the heir’s fault. In such Q: What are the ways for physically destroying a will?
cases, the legacy is revoked (Art. 957, NCC) (Rabuya,
Civil Law Reviewer, 2009 ed.) A: BTCO
1. Burning
Q: What are the requisites of revocation by subsequent 2. Tearing
will or codicil? 3. Cancelling
4. Obliterating
A:
1. The subsequent instrument must comply with the Q: What are the requisites of revocation by physical act of
formal requirements of a will destruction?
2. The testator must possess testamentary capacity
3. The subsequent instrument must either contain a A: OTAP
revocatory clause or be incompatible with the prior 1. Overt act of physical destruction;
will (totally or partially) 2. Testamentary capacity of the testator at the time
4. The revoking will must be admitted to probate. of performing the act of revocation;
3. Animus Revocandi - intention to revoke;
Note: The testator must have the testamentary capacity at the 4. Performed by testator himself or other person in
time of the making of the subsequent will. the presence and express direction of the
testator.
Q: In what ways may revocation by a subsequent will be
done? Note: It is not necessary that the will be totally destroyed. It is
sufficient if on the face of the will, there is shown some sign of the
physical act of destruction. (Maloto v. CA, G.R. No. 76464, Feb. 29,
A: Revocation may be:
1988)
a. Express – by providing for a revocatory clause;
b. Implied – provisions are completely inconsistent
Q: How can a will be revoked by physical destruction?
with previous will.
A: The physical act of destruction of a will, like burning,
Note: The will containing the revocatory clause must itself be valid,
and admitted to probate, otherwise, there is no revocation. does not per se constitute an effective revocation, unless
the destruction is coupled with animus revocandi on the
Q: What is the Principle of Instanter? part of the testator. (Maloto v. CA, G.R. No. 76464, Feb. 29,
1988)
st
A: The express revocation of the 1 will renders it void
nd
because the revocatory clause of the 2 will, not being Q: Is it imperative that the physical destruction be done by
testamentary in character, operates to revoke the 1 will
st the testator himself?
instantly upon the execution of the will containing it.
A: No. It may be performed by another person under his
Note: In implied revocation, the first will is not instantly revoked express direction and in his presence. If the destruction
by the second will because the inconsistent testamentary done by a person other than the testator is made not in his
dispositions of the latter do not take effect immediately but only presence or not upon his express direction, there is no
after the death of the testator. revocation.

CIVIL LAW
will is available, may it now be admitted to probate and

Q: What is the effect if the person directed by the testator given effect? Why? (2003 Bar Question)
to revoke his will is incapacitated to make a will such as
when he is below 18 years of age? A: Yes, the first will may be admitted to probate and given
effect. When the testator tore the first will, he was under
A: None. In revocation of wills, what is essential is the the mistaken belief that the second will was perfectly valid
capacity of the testator to revoke. The capacity of the and he would not have destroyed the first will had he
person directed by the testator to revoke his will is known that the second will is not valid. The revocation by
immaterial. destruction therefore is dependent on the validity of the
second will. Since it turned out that the second will was
Q: In 1919, Miguel executed a will. In the post mortem invalid, the tearing of the first will did not produce the
probate, there was a testimony to the effect that the will effect of revocation. This is known as the doctrine of
was in the testator’s possession in 1919, but it can no dependent relative revocation (Molo v. Molo, G.R. No. L-
longer be found. Is the will revoked? 2538, Sept. 21, 1951)
A: Yes, the Doctrine of Presumed Revocation applies, which Q: The will contains a statement whereby the testator
provides that: where a will which cannot be found, is shown recognizes his illegitimate child. This will was revoked.
to have been in the possession of the testator when last May the revoked will be used as basis for proving the said
seen, the presumption is, in the absence of other recognition?
competent evidence, that the same was cancelled or
destroyed. The same presumption arises where it is shown A: Yes. Recognition in a will of an illegitimate child does not
that the testator had ready access to the will and it cannot lose its legal effect even if the will is revoked.
be found after his death (Gago v. Mamuyac G.R. No. 26317,
Jan. 29, 1927). REPUBLICATION AND REVIVAL OF WILLS
Note: The presumption is, however, not conclusive and anyone Q: What is Republication of wills?
may prove the contrary to rebut the presumption.
A: It is the re-execution or the re-establishment by a
Q: What is the Doctrine of Dependent Relative testator of a will which is void or a will which the testator
Revocation? had once revoked.
A: Where the testator’s act of destruction is connected with Q: What are the two ways of republishing wills?
the making of another will, so as fairly to raise the inference
that the testator meant the revocation of the old to depend A:
upon the efficacy of the new disposition intended to be 1. By Reproduction - the contents of a previous will are
substituted, the revocation will be conditional and reproduced in a subsequent will
dependent upon the efficacy of the new disposition; and if, 2. By Execution of a Codicil - such codicil referring to
for any reason, the new will intended to be made as a the previous will to be republished
substitute is inoperative, the revocation fails and the
original will remains in full force. But a mere intent to make Q: Can there be republication by execution of a codicil if
at some time a will in place of that which is destroyed will the previous will is void as to its form?
not render the destruction conditional. It must appear that
the revocation is dependent upon teh valid execution of a A: No. If the previous will is void as to its form, it can only
new will (Molo v. Molo, G.R. No. L-2538, Sept. 21, 1951). be republished by reproducing the provisions thereof in a
subsequent will.
Simply put, for this doctrine to operate, the testator must
have intended that the revocation of his first will be Q: What is Revival of wills?
dependent on the validity of his second will. In this case the
intention of the testator is clear: He does not want to die A: It is the process of renewing the operative force of a will
intestate. which had once been revoked by the testator.
Note: Failure of the new testamentary disposition upon whose Q: What is the rule on revival of wills?
validity the revocation depends is equivalent to the non-fulfillment
of a suspensive condition and thus prevents the revocation of the
original will. A:
1. If there is an EXPRESS REVOCATION
Q: Mr. Reyes executed a will completely valid as to form. - The revocation of the second will does not revive
A week later, however, he executed another will which the first will
expressly revoked his first will, which he tore his first will - The previous will can only be revived by
to pieces. Upon the death of Mr. Reyes, his second will republication
was presented for probate by his heirs, but it was denied
due to formal defects. Assuming that a copy of the first 2. If there is an IMPLIED REVOCATION

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- The subsequent will which impliedly revoked the Q: What are the different kinds of probate?
previous will revives the latter
A:
ALLOWANCE AND DISALLOWANCE OF WILLS 1. Ante-mortem – testator himself petitions the court for
PROBATE REQUIREMENT the probate of his own will.
2. Post-mortem – another person applies for probate of
Q: What is probate? the will after the testator’s death.
A: It is a special proceeding mandatorily required for the Q: What are the questions that can be determined by a
purpose of establishing the validity of a will. probate court?
No will shall pass either real or personal property unless it is A: GR: Probate courts cannot inquire into the intrinsic
proved and allowed in accordance with the Rules of Court. validity of will. The only questions that can be determined
(Art. 838) by a probate court are the:
It means to prove before some officer or tribtunal, vested 1. Due execution

by law with authority for that purpose, that the instrument 2. Testamentary capacity
offered to be proved is the will and testament of the 3. Identity of the will
deceased person whose testamentary act is alleged to be,
and that it is executed, attested, and published as required Note: Probate deals with the will’s extrinsic validity. The
by law, and that the testator was of sound and disposing court merely inquires on its due execution. It does not
mind. determine the validity of each and every disposition made
in it.
The presentation of the will for probate is mandatory, and
is a matter of public policy. XPN:
In testate succession, there can be no valid partition among 1. When the defect of the will is apparent on the
the heirs, until after the will has been probated. face and the probate of the will may become a
useless ceremony if it is intrinsically invalid;
Q: May the parties agree to waive the probate 2. For practical considerations as when there is
proceedings? preterition of heirs, or testamentary provisions
are of doubtful legality (E.g. when the will is void
A: No. It is a mandatory requirement. Until admitted to on its face or in case of incapacity to be a legatee
probate, no right can be claimed thereafter. or devisee because he is also prohibited to be a
done of the decedent, (Sec. 1028, NCC);
Q: Is the principle of estoppel applicable in probate 3. By agreement of the parties to determine first the
proceedings? intrinsic validity of the will.
A: No. These proceedings involve public interest and the Q: The testator devised a part of his estate to his
application therein of the principle of estoppel would seem concubine, which fact of concubinage was stated in his
inimical to public policy when it will block the will. On probate, the court ruled that the will was validly
ascertainment of truth surrounding the execution of a executed but the devise in favor of the concubine is null
testament. and void. Can the probate court pass upon the intrinsic
validity of the testamentary provision stated in the will?
Q: Does prescription apply to probate of wills?
A: Yes. While as a general rule, in probate proceedings, the
A: The statute of limitations is not applicable to probate of court’s area of inquiry is limited to an examination and
wills (Imprescriptibility of Probate) resolution of the extrinsic validity of the will, given
exceptional circumstances, the probate court is not
Rationale: Probate proceedings are not established in the powerless to do what the situation constrains it to do and
interest of the surviving heirs, but primarily for the pass upon certain provisions of the will, as in this case.
protection of the expressed wishes of the testator. (Nepomuceno v. CA, G.R. No. 62952, Oct. 9, 1985)
Q: What are the characteristics of a probate proceeding? Note: The SC held as basis it’s finding that in the event of probate
of the will, or if the court rejects the will, probability exists that the
A: case will come up once again on the same issue of the intrinsic
1. Special proceeding; validity or nullity of the will, the same will result in waste of time,
2. Proceeding in rem; effort, expense plus added anxiety.
3. Not contentious litigation;
4. Mandatory; Q: Can a probate court decide on questions of ownership?
5. Imprescriptible;
A: GR: A probate court has no jurisdiction to decide
questions of ownership.

CIVIL LAW
disinheritance, her successional interest existed

XPN: independent of Francisco's last will and testament and
1. When the parties voluntary submit the issue of would exist even if such will were not probated at all. Thus,
ownership to the court; the prerequisite of a previous probate of the will, as
2. When provisionally, the ownership is passed upon established in the Guevara and analogous cases, can not
to determine whether or not the property apply to the case.
involved is part of the estate.
3. The question of ownership is an extraneous Note: Neither the aleatory character of the contract nor the
matter which the probate court cannot resolve coetaneous agreement that the numerous litigations between the
with finality. parties are to be considered settled and should be dismissed,
although such stipulation gives the contract the character of a
compromise, affect the validity of the transaction. (De Borja, et al.
Q: When Vic died, he was survived by his legitimate son, v. Vda. de Borja, G.R. No. L-28040, Aug. 18, 1972)
Ernesto, and natural daughter, Rosario. Rosario, who had
Vic’s will in her custody, did not present the will for Q: What is the scope of a final decree of probate?
probate. She instituted an action against Ernesto to claim
her legitime on the theory that Vic died intestate because A: A final decree of probate is conclusive as to the due
the absence of probate. To support her claim, she execution and extrinsic validity of the will, i.e., as to the
presented Vic’s will, not for its probate, but for proving extrinsic or formal validity only. Also, it settles the question
that Vic acknowledged her. Is the procedure adopted by of whether the testator, being of sound mind, freely
Rosario allowed? executed it in accordance with the formalities set forth by
law.
A: No. It is in violation of procedural law and an attempt to
circumvent and disregard the last will and testament of the Q: After an ante mortem proceeding, the will was allowed.
decedent. The presentation of a will to the court for Later on, during the post mortem probate proceedings,
probate is mandatory and its allowance by the court is one of the heirs filed a criminal case alleging falsification
essential and indispensable to its efficacy (Guevara v. in the execution of the will. Will the action prosper?
Guevara G.R. No. 48840, Dec. 29, 1943)
A: No. Pursuant to Sec. 1, Rule 75 of the Rules of Court, the
Q: To put an end to the numerous litigations involving probate court inquires into its due execution. Regardless of
decedent Francisco’s estate, his heirs entered into a whether it is ante mortem or post mortem, once an issue of
compromise agreement whereby they agreed to pay due execution has already been passed upon by the
Tasiana, Francisco’s surviving spouse, P800,000 as her full probate court, it would constitute res judicata if such issue
share in the hereditary estate. be raised again. In the present scenario, the issue on due
execution was already passed upon and therefore,
When submitted to the court for approval, Tasiana allegations of whatever ground assailing the due execution
attacked its validity on the ground that the heirs cannot of the will, will be barred by res judicata.
enter into a compromise agreement without first
probating Francisco’s will. Tasiana relied on Guevara v. Q: If a probate court passed upon the intrinsic validity of a
Guevara (74 Phil. 479) where the court held that the will pursuant to the exceptions as regards its powers and
presentation of a will for probate is mandatory and that jurisdiction, may the decision of that probate court be
the settlement and distribution of an estate on the basis considered as res judicata?
of intestacy when the decedent left a will, is against the
law and public policy. Decide. A: Yes. As a general rule, a probate court may only pass
upon the extrinsic validity of the will. However, by virtue of
A: The Guevara ruling is not applicable in this case because the exceptions, the probate court may pass upon the
here, there was no attempt to settle or distribute the estate intrinsic validity of a will. If it does so, then it will constitute
among the heirs before the probate of the will. The clear as a ruling on such issues on the intrinsic validity and
object of the contract was merely Tasiana’s conveyance of questioning such again in a different proceeding shall be
any and all her individual share and interest, actual or barred by res judicata.
eventual in the estate. There is no stipulation as to any
other claimant, creditor or legatee. Note: A joint will even if invalid but has been probated by the court
and whose decision was not appealed, already constitutes res
As a hereditary share in a decedent's estate is transmitted judicata, and has a conclusive effect. The error committed by the
or vested immediately from the moment of the death of probate court was an error of law that should have been corrected
by appeal, but which did not affect the jurisdiction of the probate
such predecessor in interest, there is no legal bar to a
court nor the conclusiveness of its final decision, however
successor (with requisite contracting capacity) disposing of erroneous since the final judgment is binding upon the whole
her or his hereditary share immediately after such death, world (De la Cerna v. Potot, 12 SCRA 576).
even if the actual extent of such share is not determined
until the subsequent liquidation of the estate.
Also, as Francisco’s surviving spouse, Tasiana was his

compulsory heir. Wherefore, barring unworthiness or valid

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GROUNDS FOR DENYING PROBATE Q: Who can intervene in probate proceedings?
Q: What are the grounds for disallowance of a will? A: The person who intervenes must have an interest in the
estate or in the will, or in the property to be affected by it,
A: FIFUSM either as executor or claimaint of the estate, and an
1. The Formalities required by law have not been interested party is one who would be benefited by the
complied with; estate such as an heir or one who has a claim against the
2. The testator was Insane or otherwise mentally estate like a creditor.
incapable of making a will, at the time of its
execution; INSTITUTION OF HEIRS
3. The will was executed through Force or under
duress, or influence of fear or threats; Q: How is institution of heir defined under Article 840?
4. The will was procured by Undue and improper
pressure and influence, on the part of the A: Institution of heir is an act by virtue of which a testator
beneficiary or some other person; designates in his will the person or persons who are to
5. The Signature of testator was procured by fraud. succeed him in his property and transmissible rights and
6. The testator acted by Mistake or did not intend obligations (Art. 840, NCC).
that the instrument he signed should be his will at
the time of affixing his signature thereto.(Art. Note: Institution cannot be allowed to affect the legitime.
839)
There can be an instituted heir only in testamentary succession.
Q: When do the following constitute as grounds for
disallowance? Q: What are the requisites of a valid institution?
1. Violence A:
1. The will must be extrinsically valid;
A: When in order to compel the testator to execute a
Note: The testator must have the testamentary capacity to
will, serious or irresistible force is employed
make the institution.
2. Intimidation
2. The institution must be intrinsically valid;
A: When the testator is compelled by a reasonable and Note: The legitime must not be impaired, the person
well-grounded fear of an imminent and grave evil instituted must be identified or identifiable, and there is no
upon his person or property of his spouse, preterition.
descendants, or ascendants, to execute the will
3. The institution must be effective.
3. Undue Influence
Note: No repudiation by the heir; testator is not predeceased
A: When a person takes improper advantage of his by the heir.
power over the will of another, depriving the latter of
a reasonable freedom of choice. Q: Can there be a valid will which does not institute an
heir?
4. Mistake
A: Yes, a will is valid even if it contains only a provision for
A: Pertains to the “mistake in execution” which may disinheritance or if only legacies and devises are contained
either be: in the will even though it does not contain an institution of
1. mistake as to the identity or character of the heir, or such institution should not comprise the entire
instrument which he signed, or estate, and even though the person so instituted should not
2. mistake as to the contents of the will itself. accept the inheritance or should be incapacitated to
succeed (Art. 841).
Q: What is the effect if the grounds for disallowance is
proved? Q: What are the three principles in the institution of heirs?
A: The will in such case shall be set aside as VOID. A:

1. Equality – heirs who are instituted without a
Note: In case of natural obligations, when a will is declared void designation of shares inherit in equal parts.
because it has not been executed in accordance with the
formalities required by law, but one of the intestate heirs, after the Note: Applies only when the heirs are of the same class or
settlement of debts of the deceased, pays a legacy in compliance same juridical condition and involves only the free portion.
with a clause in the defective will, the payment is effective and
irrevocable. As between a compulsory heir and a voluntary heir and they
are instituted without any designation of shares, the legitime
must first be respected and the free portion shall then be
equally divided between them.

CIVIL LAW
cannot be shown by extrinsic evidence, either

2. Individuality – heirs collectively instituted are deemed oral or documentary
individually instituted unless contrary intent is proven. 2. A disposition in favor of a definite class or group
of persons shall be valid.
Note: Art. 847 itself gave an example, when the testator
institutes some heirs individually and others collectively as Q: May evidence aliunde be presented to identify the
when he says, “I designate my heirs A and B, and the children uknown person?
or C,” those collectively designated shall be considered as
individually instituted, unless it clearly appears that the
A: No. The determinate event or circumstance, sufficient to
intention of the testator was otherwise.
indicate with certainty the person whom the testator wants
to favor, must appear in the will itself; it cannot be shown
3. Simultaneity – when several heirs are instituted, they
by extrinsic evidence, either oral or documentary.
are instituted simultaneously and not successively,
unless the contrary is proved.
Note: If there is merely a latent ambiguity as to the identity of the
heir, extrinsic evidence other than the oral declaration of the
Q: How must a testator designate an heir? testator may be used, but if his identity is unknown, extrinsic
evidence is not allowed.
A: Generally, the heir must be designated by his name and
surname. This rule is not, however, mandatory. Even when Q: What is the effect if the institution of heir is based on a
the name of the heir has been omitted but the testator has false cause?
designated the heir in such a manner that there can be no
doubt as to who has been instituted, the institution is valid. A: GR: The institution of heir is valid. The false cause shall
be considered simply as not written.
Q: How must designation be made if two or more persons
have the same names? XPN: If from the will itself, it appears that the testator
would not have made the institution if he had known the
A: The testator must indicate some circumstance by which falsity of the cause, the institution shall be void.
the instituted heir may be known. If the testator fails to
mention any circumstance regarding the heir instituted and Note: The rule is, if the revocation is based on a false or illegal
there appear to persons bearing the same name, there is cause, it is null and void (Art. 833) while institution of heir based on
latent ambiguity and extrinsic evidence other than the oral false cause as a general rule does not affect the validity or efficacy
declaration of the testator as to his intention is admissible of the institution (Art. 850).
to resolve the ambiguity.
Q: What is the reason for the general rule that institution
Q: May a conceived child be instituted as an heir? of heir, though based on false cause, does not affect the
validity or efficacy of the institution?
A: A conceived child may be instituted, provided the
conditions in Arts. 40 and 41 are present (Conceptus pro A: Because testamentary dispositions are ultimately based
nato habetur). on liberality. As such, the false cause is merely incidental to
the ultimate cause of making the disposition which is the
Note: A conceived child, although as yet unborn, has a limited and testator’s liberality. Unless it be shown that the testator
provisional personality (Quimiguing v. Icao, G.R. No. 26795, 1970). would not have made such institution if he had known the
Its personality is essentially limited because it is only for purposes falsity of such cause, which is the reason for the disposition
favourable to the child. Its personality is provisional because it
(Art. 850, NCC).
depends upon the chil being born alive later under the following
conditions:
1. The child must be alive for at least 24 hours from Q: What are the various kinds of institution?
complete delivery, if it had an intra-uterine life of less
than 7 months. A: Institution of heir may be:
2. The child must be alive even only for a few hours from 1. With a condition
complete delivery, if it had an intra-uterine life of at 2. With a term
least 7 months (Art. 41, NCC) 3. For a certain purpose or cause (modal Institution)
Q: If the disposition is in favor of an unknown person, is Note: Conditions, terms and modes are not presumed, they must
such valid? be clearly expressed in the will. The condition must fairly appear
from the language of the will. Otherwise, it shall be considered
A: GR: Every disposition in favor of an unknown person pure.
shall be void.
Q: What is a condition?
XPNS:
1. If the identity can become certain by some event A: it is future or uncertain event or a past event unknown
or circumstance, the disposition is valid. It is to the parties, upon which the performance of an obligation
important, however, that the event or depends.
circumstance must appear in the will itself; it

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SUCCESSION
Q: What are the kinds of condition? Reason for the prohibition: Disposition captatoria is
incompatible with good faith and with the nature of
A: testaments; it is immoral and contrary to the freedom to
Resolutory Condition Suspensive Condition make wills.
The disposition becomes The effectivity of the
effective upon the death disposition is Q: What are the instances when a violation of the NCC
of the testator but is suspended until the would not invalidate the will?
extinguished upon the fulfillment of the
happening of the condition. A:
condition. 1. False cause in case of institution of heir because it
is merely considered not written unless from the
Q: What is the effect of an impossible condition on the will itself, it appears that the testator would not
testamentary disposition? have made the institution if he had known the
falsity of the cause, the institution shall be void
A: Impossible conditions and those contrary to law or good (Art. 850)
customs shall be considered as not imposed and shall in no 2. Charge, condition or substitution whatsoever
manner prejudice the heir, even if the testator should upon the legitimes shall be considered as not
otherwise provide. (Art. 873) written (Art.872)
3. Defect in the fideicommisary substitution will not
Q: What is the rule on the imposition of condition, charge affect the will (Art. 868)
or burden on the legitimes?
Q: What are the instances when a violation of the NCC
A: GR: The testator cannot impose any charge, condition or would invalidate the will not just the provision?
substitution whatsoever upon the legitimes. If a charge
condition or substitution is imposed, it shall be considered A:
as not imposed. 1. Joint wills (Art. 818)
2. False cause in case of revocation (Art. 833)
XPN: Testator can validly impose a prohibition against 3. Disposition Captatoria (Art. 875)
the partition of the legitime for a period not exceeding
20 years. Q: What are the kinds of suspensive conditions?
Note: The legitime passes by strict operation of law, independently A:

of the testator’s will. As such, any condition, burden, or 1. Purely Potestative – the fulfillment of the condition
substitution upon the same is merely considered by law as not depends solely upon the will of the heir, devisee or
imposed (Art. 872, Civil Code). legatee
GR: The condition must be fulfilled as soon as the heir
Q: What is the rule regarding conditions on the prohibition learns of the testator’s death.
to marry?
XPN: If the condition has already been fulfilled and it
A: GR: An absolute condition not to contract a first or cannot be fulfilled again and the condition was already
subsequent marriage is not a valid condition and shall be complied with at the time he learns of the testator’s
considered as not written (Art. 874). However, the validity death.
of the disposition itself shall not be affected.
2. Casual – The fulfillment of the condition depends
XPN: If such condition was imposed on the widow or solely on chance or on the will of a third person.
widower by the deceased spouse or by the latter’s 3. Mixed – The fulfillment of the condition depends
ascendants or descendants, in which case, the partly on chance and partly on the will of the heir,
condition is valid. (Art. 874) devisee, or legatee.
Note: If the prohibition is relative with respect to persons, time or Q: What are the rules for casual and mixed conditions?
place, such conditions is valid and must be complied with unless
the testator renders it impossible for the heir to marry at all. A: GR: The condition may be fulfilled any time, either
before or after the testator’s death unless the testator
Q: What is a Disposition Captatoria? provides otherwise.
A: Any disposition made upon the condition that the heir XPN:
shall make some provision in his will in favor of the testator 1. If the condition is fulfilled at any time before the
or of any other person shall be void (Art. 875). Here, both death of the testator, the condition is deemed
the condition and the disposition are void but the validity fulfilled, unless the testator provides otherwise.
of the other provisions, including the will itself, shall not be 2. If condition is already fulfilled at the time of the
affected. execution:
a. Testator is unaware- The condition is
deemed complied with or fulfilled.

CIVIL LAW
b. Testator is aware- Q: What is a term?

i. If the condition can no longer be
fulfilled again, it is deemed fulfilled. A: It is any future and certain event upon the arrival of
ii. If the condition can still be fulfilled, which the validity or efficacy of a testamentary disposition
there is a need to fulfill it again. subject to it, depends.
Q: What is the effect of a Suspensive Condition? Note: A disposition with a suspensive term does not prevent the
instituted heir from acquiring his rights and transmitting them to
A: his heirs even before the arrival of the term.
1. Heir, Devisee, or legatee acquires no rights until the
condition is fulfilled. Reason: The right of the heir instituted subject to a term is
2. If he dies before the condition is fulfilled, he transmits vested at the time of the testator's death - he will just wait
no rights to his heirs, even though he survived the for the term to expire. Before the arrival of the term, the
testator. property should be delivered to the intestate heirs but a
caucion muciana must be posted by them (Art. 885 par. 2)
Reason: Capacity to succeed by the conditional heir
must be determined both at the time of the death of If the heir dies after the testator but before the term
the testator and at the time of the fulfillment of the expires, he transmits his rights to his own heirs because of
condition. the vested right.
3. Once the condition is fulfilled, its effects retroact to Suspensive Term Suspensive Condition
the moment of the death of the testator. The right of the heir The instituted heir does
4. If the suspensive condition is not fulfilled, the estate instituted subject to a not acquire any
will be placed under administration until: term is vested at the successional right upon
a. The condition is fulfilled, in which case the estate time of the testator’s the death of the testator
should be given to the instituted heir; death. Hence, if he dies as long as teh condition
b. It becomes obvious that it cannot be fulfilled, in after the testator but is not yet fulfilled.
which case, the estate should be given to the before the term Hence, upon the death
intestate heirs. expires, he can transmit of the instituted heir,
his rights to his own prior to the fulfillment
Q: Must there be actual or strict fulfillment of the heirs. of the condition, no
condition, or is constructive or substantial fulfillment right is transmitted to
sufficient? his heirs.
A: Q: When the disposition is subject to a term, what should

1. Casual Condition- there must be actual or strict be done by the instituted heirs or legal heirs so that they
fulfillment. can enjoy possession of the property?
2. Potestative Condition- there can be constructive
fulfillment, i. e. Heir or legatee has done everything to A: If the disposition is subject to a:
perform the condition and yet for some reason or 1. Suspensive term- The legal heirs can enjoy
another it cannot be fulfilled. possession of the property until the expiration of
3. Mixed Condition- the period but they must put up a bond (caucion
GR: There must be actual or strict fulfillment muciana) in order to protect the right of the
instituted heir.
XPN: There can be constructive fulfillment when the 2. Resolutory term- The legal heirs can enjoy
heir has done everything in his power to comply and possession of the property but when the term
still the condition is not fulfilled because it was arrives, he must give it to the legal heirs. The
prevented by a third party interes in its non- instituted heir does not have to file a bond.
fulfillment.
Q: What is “Caucion Muciana”?
Q: What is negative potestative condition?
A: A caucion muciana is a security or bond required from
A: It consists in the non-performance of an act or not giving the conditional heir in order to secure the rights of those
something. (Art. 879) who would succeed to the property upon violation of the
condition.
Note: The heir instituted has a right to receive his share in the
inheritance upon the death of the testator and loses his right only Q: What are the instances when caucion muciana is
when he violates the condition. needed?
A:
1. Suspensive term - the legal heir shall be considered as
called to the succession until the arrival of the period.

2013 GOLDEN NOTES
SUCCESSION
But he shall not enter into possession of the property
until after having given sufficient security, with the When Dr. Rabadilla died, Maria filed a complaint to
intervention of the instituted heir (Art. 885 par. 2). reconvey the land alleging that the heirs of Dr. Rabadilla
2. Negative potestative condition - If the potestative violated the condition. Is the institution of Dr. Rabadilla, a
condition imposed upon the heir is negative, or modal institution?
consists in not doing or not giving something, he shall
comply by giving a security that he will not do or give A: Yes, because it imposes a charge upon the instituted heir
that which has been prohibited by the testator, and without, however, affecting the efficacy of such institution.
that in case of contravention he will return whatever
he may have received, together with its fruits and In a modal institution, the testator states the object of the
interests (Art. 879). institution, the purpose or application of the property left
by the testator, or the charge imposed by the testator upon
Note: If the heirs do not post the required bond in case of a the heir. A mode imposes an obligation upon the heir or
suspensive term or a negative potestative condition, the legatee but it does not affect the efficacy of his rights to the
estate shall be placed under administration (Art. 880, NCC). succession. The condition suspends but does not obligate;
and the mode obligates but does not suspend. (Rabadilla v.
3. Mode - That which has been left in this manner may CA, G.R. No. 113725, June 29, 2000)
be claimed at once provided that the instituted heir or
his heirs give security for compliance with the wishes PRETERITION
of the testator and for the return of anything he or
they may receive, together with its fruits and interests, Q: What is preterition?
if he or they should disregard this obligation. (Art.
882). A: Preterition is the omission in testator’s will of one, some
or all of the compulsory heirs in the direct line, whether
Q: What is a mode? living at the time of execution of the will or born after the
death of the testator. (Art. 854)
A: It is an obligation imposed upon the heir to do or to give
something Q: What does “born after the death of the testator”
mean?
Modal institution – statement of
1. Object of the institution, A: It simply means that the omitted heir must already be
2. Application of the property left by the testator, conceived at the time of death of the testator but was born
3. Charge imposed by him. only after the death of the testator.
Q: What is a modal disposition? Q: What are the requisites of preterition?

A: A “mode” imposes an obligation upon the heir, devisee
A:
or legatee, but it does not affect the efficacy of his rights to
1. There is a total omission in the inheritance;
the succession. The mode obligates but does not suspend.
2. The person omitted is a compulsory heir in the direct
line;
Q: How does a mode differ from a condition?
3. The omitted compulsory heir must survive the
A: testator, or in case the compulsory heir predeceased
the testator, there is a right of representation;
MODE CONDITION
4. Nothing must have been received by the heir by
Imposes an The condition must
gratuitous title.
obligation upon the happen or be fulfilled
heir, devisee or in order for the heir
Q: May a spouse be preterited?
legatee, but it does to be entitiled to
not affect the succeed the testator.
A: No. While a spouse is a compulsory heir, he/she is not in
efficacy of his rights
the direct line (ascending or descending).
to the succession.
Obligates but does Suspends but does Note: The surviving spouse shall only be entitled to recover his
not suspend not obligate legitime but the institution of heirs shall not be annulled.
In case of doubt, the institution should be
considered as modal not conditional. Q: When is there a total omission of a compulsory heir?
Q: The testatrix devised a parcel of land to Dr. Rabadilla. It A: There is total omission when the heir:
was provided that Dr. Rabadilla will acquire the property
subject to the obligation, until he dies, to give Maria 100 1. Receives nothing under the will whether as heir,
piculs of sugar, and in the event of non-fulfillment, the legatee, or devisee;
property will pass to the nearest descendants of the
testatrix.

CIVIL LAW
Note: If a compulsory heir is given a share in the

inheritance, no matter how small, there is no Q: May the decedent’s parents be preterited?
preterition.
A: Yes, if there is an absence of legitimate compulsory heirs
However, if a compulsory heir gets less than his
legitime, while this is not a case of preterition. In this in the descending line. This is the effect of the application
case, he is entitled to a completion of his legitime under of the rule on preference of lines.
Art. 906.
Q: Who are the compulsory heirs in the direct line?
2. Has received nothing by way of donation inter
vivos or propter nuptias; and A:
1. Legitimate children and descendants with respect to
Note: If a compulsory heir has already received a their legitimate parents or ascendants;
donation from the testator, there is no preterition. 2. Legitimate parents of ascendants, with respect to their
legitimate children and descendants;
Reason: A donation to a compulsory heir is 3. Illegitimate children;
considered an advance of the inheritance. 4. The father or mother of illegitimate children
3. The heir will receive nothing by way of intestate Note: The surviving spouse is not included. An adopted child is by
succession. (e.g. if the heir is not mentioned in legal fiction considered a compulsory heir in the direct line.
the will nor a recipient of a donation inter vivos
and all of the estate is disposed by will) Q: What are the distinctions and similarities between
ineffective disinheritance and preterition?
Q: What are the effects of preterition?
A:
A: INEFFECTIVE PRETERITION
1. Preterition annuls the institution of heirs; DISINHERITANCE
2. Devices and legacies are valid insofar as they are not Distinctions
inofficious; A testamentary Omission in the
3. If the omitted compulsory heir dies before the disposition depriving tetsator’s will of the
testator, the institution shall be effectual, without any compulsory heir of forced heirs or any of
prejudice to the right of representation. his share in the legitime them
for a cause authorized
Example: X has two legitimate children: A and B. X by law
makes a will which results in the preterition of A. A The institution remains The institution of heirs
predeceases X but leaves a legitimate child A-1, who is valid, but must be is completely annulled.
himself completely omitted from the inheritance (A-1 reduced insofar as the Hence, the annulment
being entitled to succeed X by representation). There legitime has been is in toto, unless there
is preterition, not because A was preterited but impaired. Such nullity of are in addition,
because A-1 was preterited (Balane, Jottings and institution is limited testamentary
Jurisprudence in Civil Law: Succession, 2010 ed.). In only to that portion of dispositions in the
such case, the descendant of A can now file an action which, the disinherited form of legacies and
to annul the institution of heirs. heir has been devices which shall
unlawfully deprived of. remain valid so long as
Note: The effect of annulling the institution of heirs will open they are not
intestacy except for the legacies and devices which must be inofficious.
respected.
The omission is By mere mistake or
intentional in which inadvertence resulting
Q: May the omission of an illegitimate child in a will be
case the institution of in the fact that the
equal to preterition?
heir is not wholly void compulsory heir
but only in so far as it receives nothing at all.
A: Yes. Art. 854 does not distinguish. It is immaterial
prejudices the legitime There is total
whether the heir omitted in the testator’s will is legitimate
of the person deprivation.
or illegitimate provided that he is a compulsory heir in the
deisinherited
direct line.
Similarities
Q: May the omission of an adopted child amount to In both cases, the omitted heir and the
preterition? imperfectly disinherited heir get at least their
legitime
A: Yes. It is submitted that an adopted child is by legal Both legacies and devises remain valid insofar as
fiction considered a compulsory heir in the direct line. the legitime has not been impaired.
Besides an adopted child is by law given all of the Both legacies and devises refer to compulsory
successional rights of a legitimate child. heirs.

2013 GOLDEN NOTES
SUCCESSION
RIGHT OF REPRESENTATION
Q: What is the effect of preterition on the will itself?
Q: What is the right of representation?
A: GR: The effect of annulling the institution of heirs will be,
necessarily, the opening of a total intestacy except that A: It is the right created by fiction of law, by virtue of which,
proper legacies and devises must be respected. Here, the the representative is raised to the place and degree of the
will is not abrogated. person represented, and acquires the rights which the
latter would have if he were living or if he could have
XPN: If the will contains a universal institution of heirs to inherited.
the entire inheritance of the testator, the will is totally
abrogated. The representative thereby steps into the shoes of the
person he represents and succeeds, not from the latter, but
Reason: The nullification of such institution of the universal from the person whose estate, the person represented
heirs without any other testamentary disposition in the will would have succeeded.
amounts to a declaration that nothing at all was written.
Q: When is the right of representation allowed in
Q: Will the mere fact that an heir was omitted in a will, testamentary succession?
automatically equate to preterition?
A: Representation is allowed with respect to the legitime in
A: No. One must distinguish whether the omission of a case the compulsory heir in the descending line dies before
forced heir in the will of the testator is by mistake or in the testator or incapacitated to succeed.
advertence or voluntary or intentional:
Q: Who may not be represented?
a. If by mistake or inadvertence, there is true
preterition and total intestacy results. A: heirs who repudiated their share may not be
b. If the omission is intentional, the effect would be represented. A voluntary heir may not also be represented.
a defective disinheritance covered by art 918 in
which case the institution of heir is not wholly Q: What are the rules in case of representation?
void but only in so far as it prejudices the legitime
of the person disinherited A:
1. It shall take place in cases of:
Q: What are the rights of the preterited heirs? a. Predecease
b. Incapacity
A: They are entitled not only to their shares of the legitime c. Disinheritance
but also to those of the free portion which was not
expressly disposed of by the testator by way of devises and 2. Representation applies only to those acquired by
legacies. virtue of provision of the law (legitime, intestate
share, in case of reserve troncal);
PREDECEASE, INCAPACITY 3. No representation in cases of repudiation;
& REPUDIATION 4. Representation only occurs in the direct
decending line and never in the ascending;
Q: What is the effect if the heir predeceases the testator? 5. In the direct collateral line, the right of
representation only takes place in favour of
A: If the heir who predeceases the testator is a voluntary children of brothers or sisters, full or half-blood
heir, a devisee or a legatee, he shall transmit no right to his 6. The representation obtains degree by degree, and
own heirs. Death prevents him from acquiring any rights. no jump is made.
Note: The rule is absolute with respect to a voluntary heir and a COMPLETION OF
devisee or legatee. THE LEGITIME
Q: What is the effect if the heir repudiated or renounced Q: What can the compulsory heir do if the testator left
his inheritance? title less than the legitime belonging to the former?
A: An heir who renounced his inheritance, whether as A: Any compulsory heir to whom the testator has left by
compulsory or as voluntary heir, does not transmit any right any title less than the legitime belonging to him may
to his own heirs. demand that the same be fully satisfied. (Art. 906)
Note: An heir who repudiated his inheritance, may represent the Note: Testamentary dispositions that impair or diminish the
person whose inheritance he has renounced (Art. 976). The reason legitime of the compulsory heirs shall be reduced on petition of the
for this is found in Art. 971 (2nd sentence): “the representative does same, insofar as they may be inofficious or excessive. (Art. 907)
not succeed the person represented but the one whom the person
represented would have succeeded.

CIVIL LAW
Q: If the testator instituted only one heir and allotted only Q: What are the different kinds of substitution?
an aliquot part, what will happen to the remainder?
A:
A: If the testator has instituted only one heir, and the 1. Simple/common – takes place when the heir
institution is limited to an aliquot part of the inheritance, instituted:
legal succession takes place with respect to the remainder a. predeceases testator;
of the estate. b. repudiates the inheritance; or
c. is incapacitated to succeed
Q: If the testator instituted several heirs as sole heirs but
what was allotted was only part of the inheritance, what Note: Simple substitution without a statement of the causes,
will happen? to which it refers, shall comprise the 3 above mentioned
situations unless the testator has otherwise provided.
A: If the testator instituted several heirs as sole heirs but
allotted only an aliquot part of the inheritance and together 2. Brief/compendious – when two or more persons are
they do not cover the whole inheritance, or the whole free substituted for one or for two or more heirs.
portion, each part shall be increased proportionately.
3. Reciprocal – one heir designated as substitute for
Q: What if such allotment exceeds the whole of the instituted heir while latter is simultaneously instituted
inheritance, what will happen? What will be the extent of as substitute for former.
deduction, if any?
GR: The substitute shall be subject to the same charges and
A: If each of the instituted heirs has been given an aliquot conditions imposed upon the instituted heir.
part of the inheritance and the parts together exceed the
whole inheritance, or the whole free portion, as the case XPN:
may be, each part shall be reduced proportionately. 1. If the testator has expressly provided the contrary
2. If the charges or conditions are personally
SUBSTITUTION OF HEIRS applicable only to the heir instituted. (Art 862)
Q: What is substitution? 4. Fideicommissary Substitution (Indirect Substitution) – It

is a substitution by virtue of which the fiduciary or first
A: Substitution is the appointment of another heir so that heir instituted is entrusted with the obligation to
he may enter into the inheritance in default of the heir preserve and to transmit to a second heir the whole or
originally instituted. (Art 857) part of the inheritance, shall be valid and shall take
effect, provided such substitution does not go beyond
Q: Where does the concept of substitution apply? one degree from the heir originally instituted, and
provided, further, that the fiduciary or first heir and
A: Substitution applies in cases if the heir or heirs instituted the second heir are living at the time of the death of
should die before the testator or should not wish, or should the testator.
be incapacitated to accept the inheritance.
Q: Who are the parties to a fideicommissary substitution
Q: What is the effect if the substitute dies ahead of the and what are their respective obligations?
testator?
A:
A: The substitute who dies ahead of the testator prevents
PARTIES OBLIGATIONS
him from acquiring any rights, since there is no substitution
First heir or He has the obligation to preserve
to speak of.
fiduciary and transmit the inheritance.
Q: When will the substitution be extinguished? Second heir or He eventually receives the property
fideicommissary from the fiduciary.
A: Testator None
1. By the nullity of the will;
2. By the annulment of the institution of heir; Q: What are the distinctions between direct substitution
3. By the death of the substitute before the testator; and indirect substitution?
4. When the substitute himself is incapacitated to
succeed the testator; A:
5. When the substitute repudiates or renounces the INDIRECT SUBSTITUTION
inheritance. DIRECT SUBSTITUTION (Fideicommissary
Substitution)
The substitute receives the The substitute receives the
property in default of the property after the heir first
first heir instituted who instituted has enjoyed the
does not or cannot receive same for some time.

2013 GOLDEN NOTES
SUCCESSION
the same. Q: What are the obligations of a fiduciary?
A:
1. To preserve the inheritance;
2. To deliver the inheritance;
There are various 3. To make an inventory of the inheritance.
liberalities, one that is
immediate and the other Note: The first heir receives property, either upon the death of the
or others eventual, but There are two liberalities testator or upon the fulfillment of any suspensive condition
with only one of them which are both effective imposed by the will.
effective (because but successively enjoyed.
The first heir is almost like a usufructuary with right to enjoy the
ultimately either the property. Thus, like a usufructuary, he cannot alienate the
instituted heir succeeds or property. The first heir is obliged to make an inventory but he is
it is the substitute). not required to furnish a bond.
The first heir instituted is
The testator so directs the obliged to preserve the Q: What is the effect of alienation of the property subject
transmission of his property for the benefit of to the fideicommissary substitution by the first heir?
property that one or more one or more succeeding
heirs enjoy and may freely heirs and his power of A: The transfer is not valid. The fiduciary cannot alienate
dispose of the same. alienation is curtailed or at the property either by an act inter vivos or mortis causa. He
least limited. is bound to preserve the property and transmit it to the
Has a further social effect second heir or fideicommissary.
as it limits the free
No other purpose than to
circulation of property and Note:
prevent the succession of a. If the fiduciary registers the property in his name without
for such reason many laws
the intestate heirs. the fideicommissary substitution, innocent parties are
prohibit the same or limit
protected. However, if the property is unregistered, the
it.
buyer acquires only the seller’s right; i.e., subject to the
There is only one transfer. There are 2 transfers fieocommissary substitution
No absolute disposition b. The fideicommissary is a sort of naked owner; ownership is
because it is subject to the consolidated in him upon transmission of the property to
condition that he will him.
preserve and transmit the
Has the free and absolute
same to the Q: What is the period of the fiduciary’s tenure?
disposition and control
fideicommissary. And also,
over the property.
there is control on the A:
property but there is a 1. Primary rule – the period indicated by the testator
limit to the circulation of 2. Secondary rule – if the testator did not indicate a
the property. period, then the fiduciary’s lifetime
The fideicommissary is
limited to relatives within Q: Is the fiduciary allowed to make deductions to the
The identity of the
one degree from the first inheritance?
substitute does not matter.
heir or fiduciary: parent–
child. A: GR: The fiduciary should deliver the property intact and
undiminished to the fideicommisary heir upon arrival of the
Q: What are the elements/requisites of fideicommissary period
substitution?
XPN: The only deductions allowed, in the absence of a
A: contrary provision in the will are:
1. There must be a first heir or fiduciary; 2. Legitimate expenses
2. An absolute obligation is imposed upon the fiduciary to 3. Credits
preserve and to transmit to a second heir the property at a 4. Improvements
given time;
3. There is a second heir who must be one degree from the Note: The coverage of legitimate expenses and improvements are
first heir; limited to necessary and useful expenses, but not to ornamental
expenses.
4. The first and second heir must both be living and
qualified at the time of the death of the testator.
Q: What are the distinctions between a fiduciary in
Note: That it should be imposed on the free portion and not on the
fideicomissary substitution and a trustee in a trust?
legitime.
A:
FIDUCIARY TRUSTEE
Can only be designated May be designated
expressly by means of a either expressly by acts

CIVIL LAW
will inter vivos or mortis Q: Do the heirs to a fideicommissary substitution inherit

causa or impliedly by successively?
operation of law
Has no usufructuary A: No. Both the first heir and the fideicommissary inherit
Entitled to all of the
right over the property the property simultaneously, although the enjoyment and
rights of a usufructuary possession are successive.
which he holds in trust
May alienate his right of
usufruct but always Q: What is the effect if the fideicommissary predeceases
subject to his obligation Cannot alienate the fiduciary?
of preserving and anything whatsoever
transmitting the object A: If the fideicommissary predeceases the fiduciary, but
to a second heir survives the testator, his rights pass to his own heirs.
Fiduciary carries out not
another’s wishies but Q: What is the remedy of the fideicommissary to protect
his won and he enjoys Obligation is broader himself against alienation to an innocent third person?
the use and the fruits because it extends not
unlike a trustee (he is only to the properties A: If the first heir was able to register the property in his
like a usufructuary) but also to the fruits name, the fideicommissary should annotate his claim on
(Perez v. Gachitorena, the land on the title to protect himself against any
G.R. No. L-31703, 1930) alienation in favor of innocent third parties.
Q: How should an absolute obligation to preserve and to When the property passes to the fideicommissary, there is
transmit be imposed upon the fiduciary? no more prohibition to alienate.
A: The obligation to preserve and transmit must be given Q: If the testator gives the usufruct to different persons
clearly and expressly (1) by giving it a name successively, what rules will apply?
“fideicommissary substitution” or (2) by imposing upon the
first heir the absolute obligation to preserve and deliver the A: The provisions on fideicommissary substitution also
property to the second heir. apply in a case where the testator gives the usufruct to
various persons successively.
st
Q: If the testator provided that the 1 heir shall enjoy the
property during his life and that upon his death it shall Q: What are the different dispositions related or
pass to another expressly designated by the testator, but analogous to fideicommissary substitutions which the law
without imposing the obligation to preserve the property, considers as void?
is there fideicommissary substitution in this case?
A:
A: None. There is no fideicommissary substitution but 1. Fideicommissary substitutions which are not made in
merely a legacy of the usufruct of the property. an express manner, either by giving them this name,
or imposing upon the fiduciary the absolute obligation
Q: What does “one degree” mean? to deliver the property to a second heir
2. Provisions which contain a perpetual prohibition to
A: "One degree" refers to the degree of relationship; it alienate and even a temporary one, beyond the limit
means “one generation”. As such, the fideicommissary can fixed in Art. 863 (20 years)
only be either a parent or child of the first heir (Palacios v. 3. Those which impose upon the heir the charge of
Ramirez, G.R. No. L-27952, 1982). paying to various persons successively, beyond the
limit prescribed in Art. 863, a certain income or
Note: The relationship is always counted from the first heir. pension
However, fideicommissary substitutions are also limited to one 4. Those which leave to a person the whole or part of the
transmission. Upon the lapse of time for the first heir, he transmits hereditary property in order that he may apply or
the property to the second heir. In other words, there can only be invest the same according to secret instructions
one fideicommissary transmission such that after the first, there communicated to him by the testator (Art. 867)
can be no second fideicommissary substitution.
Q: What is the effect of the nullity of the fideicommissary
Q: Why must both the first and second heir be living and
substitution?
qualified at the time of the death of the testator?
A: The nullity of the fideicommissary substitution does not
A: The fideicommissary inherits not from the first heir but
prejudice the validity of the institution of the heirs first
from the testator, thus, the requirement that the
designated; the fideicommissary clause shall simply be
fideicommissary be alive or at least conceived at the time
considered as not written. (Art. 868, Civil Code)
of the testator’s death.
Q: Raymond, single, named his sister Ruffa in his will as a
devisee of a parcel of land which he owned. The will

2013 GOLDEN NOTES
SUCCESSION
imposed upon Ruffa the obligation of preserving the land Note: There is compulsion on the part of the testator to reserve
and transferring it, upon her death, to her illegitimate that part of the estate which corresponds to the legitime.
daughter Scarlet who was then only one year old.
Raymond later died, leaving behind his widowed mother, Q: How is legitime determined?
Ruffa and Scarlet. Is the condition imposed upon Ruffa to
preserve the property and to transmit it upon her death to A: To determine the legitime, the value of the property left
Scarlet, valid? (2008 Bar Question) at the death of the testator shall be considered, deducting
all debts and charges, which shall not include those
A: Yes. When an obligation to preserve and transmit the imposed in the will.
property to Scarlet was imposed on Ruffa, the testator
Raymond intended to create a fideicommissary substitution To the net value of the hereditary estate, shall be added
where Ruffa is the fiduciary and Scarlet is the the value of all donations by the testator that are subject to
fideicommisary. Having complied with the requirements of collation, at the time he made them. (Art. 908)
Art. 863 and 869 (NCC), the fideicomissary substitution is
valid. Q: Cite the rules governing the donations made by the
testator in favor of his children, legitimate and
Q: If Scarlet predeceases Ruffa, who inherits the property? illegitimate, and strangers and those which are inofficious.
(2008 Bar Question)
A:
A: If Scarlet predeceases Ruffa, the fideicommissary 1. Donations given to children shall be charged to their
substitution is rendered null or ineffective under Art.863 legitime.
(NCC). Applying Art. 868 (NCC), the fideicommissary clause 2. Donations made to strangers shall be charged to that
is disregarded without prejudice to the validity of the part of the estate of which the testator could have
institution of the fiduciary. In such case Ruffa shall inherit disposed by his last will.
the device free from the condition. 3. Insofar as they may be inofficious or may exceed the
disposable portion, they shall be reduced according to
Q: If Ruffa predeceases Raymond, can Scarlet inherit the the rules established by this Code. (Art. 909)
property directly from Raymond? (2008 Bar Question) 4. Donations which an illegitimate child may have
received during the lifetime of his father or mother,
A: In a fideicommissary substitution, the intention of the shall be charged to his legitime. Should they exceed
testator is to make the second heir his ultimate heir. The the portion that can be freely disposed of, they shall
right of the second heir is simply postponed by the delivery be reduced in the manner prescribed by this Code.
of the inheritance to the first heir for him to enjoy the (Art. 910)
usufruct over the inheritance. Hence, when the first heir
predeceased the testator, the first heir did not qualify to Q: In relation to Articles 908 to 910, how shall the
inherit and the right of the second heir to receive the reduction from the legitime be made?
inheritance will no longer be delayed provided the second
heir is qualified to inherit at the time of the testator’s
A: After the legitime has been determined in accordance
death. In fideicommissary substitution, the first and second
with the three preceding articles, the reduction shall be
heirs inherit from the testator, hence, both should be
made as follows:
qualified to inherit from the testator at the time of his
1. Donations shall be respected as long as the
death.
legitime can be covered, reducing or annulling, if
necessary, the devises or legacies made in the
In the problem, when Ruffa predeceased Raymond, she did
will;
not qualify to receive the inheritance to enjoy it usufruct,
2. The reduction of the devises or legacies shall be
hence, the right of Scarlet to receive the inheritance upon
pro rata, without any distinction whatever.
the death of the testator will no longer be delayed.
If the testator has directed that a certain devise
However, Scarlet is not qualified to inherit from Raymond
or legacy be paid in preference to others, it shall
because she is barred by Art. 992 of NCC being an
not suffer any reduction until the latter have been
illegitimate child of Raymond’s illegitimate father. The
applied in full to the payment of the legitime.
devise will therefore be ineffective and the property will be
3. If the devise or legacy consists of a usufruct or life
disposed of by intestacy.
annuity, whose value may be considered greater
than that of the disposable portion, the
LEGITIME
compulsory heirs may choose between complying
with the testamentary provision and delivering to
Q: Define legitime
the devisee or legatee the part of the inheritance
of which the testator could freely dispose. (Art.
A: Legitime is that part of the testator's property which he 911)
cannot dispose of because the law has reserved it for 4. If the devise subject to reduction should consist
certain heirs who are, therefore, called compulsory heirs. of real property, which cannot be conveniently
(Art. 886) divided, it shall go to the devisee if the reduction
does not absorb one-half of its value; and in a

CIVIL LAW
contrary case, to the compulsory heirs; but the Note: The prohibition does not cover an onerous disposition (sale)
former and the latter shall reimburse each other because this involves an exchange of values.
in cash for what respectively belongs to them.
(Art. 912) The devisee who is entitled to a Q: What are the rules governing succession in the direct
legitime may retain the entire property, provided descending line?
its value does not exceed that of the disposable
portion and of the share pertaining to him as A:
legitime. 1. Rule of preference between lines – descending line is
preferred over the ascending line
Note: If the heirs or devisees do not choose to avail 2. Rule of proximity – nearer excludes the more remote
themselves of the right granted by the preceding article, any 3. Right of representation, in case of predecease,
heir or devisee who did not have such right may exercise it; incapacity and disinheritance
should the latter not make use of it, the property shall be sold 4. If all the legitimate children repudiate their legitime,
at public auction at the instance of any one of the interested the next generation of legitimate descendants,
parties. (Art. 913)
succeed in their own right.
The testator may devise and bequeath the free portion as he
may deem fit. (Art. 914) Q: What are the rules governing succession in the
ascending line?
RULES ON LEGITIME
A:
1. Rule of proximity – nearer excludes the more remote
Q: Can the testator deprive the compulsory heirs their
2. Division by line
legitimes?
3. Equal division within the line
A: GR: No. The testator cannot deprive the compulsory
Q: What is/are the remedy(ies) available to a compulsory
heirs of their legitimes.
heir whose legitime has been impaired?
XPN: When the testator validly disinhirited his heir and
A:
when there partition of the hereditary estate for a period
1. In case of preterition – annulment of institution of heir
not exceeding twenty (20) years, which prohibition can
and reduction of devises and legacies
apply even to the legitime of the compulsory heirs.
2. In case of partial impairment – completion of legitime
Note: Only the legitime is reserved. The free portion may be
3. In case of inofficious donation – collation
disposed of by will.
Q: Is the renunciation or compromise of future legitime
Q: Must compulsory heirs accept their legitimes? allowed?
A: No. There is no obligation on the compulsory heirs to A: No. The renunciation or compromise is prohibited and
accept. considered null and void.
Q: What are the kinds of legitime? Q: What is the scope of the prohibition?
A: A:
1. Fixed – If the amount (fractional part) does not vary or 1. Any renunciation of future legitimes, whether for a
change regardless of whether there are concurring valuable consideration or not;
compulsory heirs or not. 2. Any waiver of the right to ask for the reduction of an
a. legitimate children and descendants (legitimate innoficious donation;
children’s legitime is always ½) 3. Compromise between the compulsory heirs
b. legitimate parents and ascendants (When there themselves during the lifetime of the testator.
are no legitimate children and descendants, Art.
887 (1)) Note: The prohibition is not applicable in cases of:
1. Renunciations or compromises made after the death of
2. Variable – If the amount changes or varies in
the testator;
accordance with whom the compulsory heir concur. 2. Donations or remissions made by the testator to the
compulsory heirs as advances of their legitime.
Note: Factors which affect the legitime:
1. Identity of the concurring compulsory heirs
Q: What is the order of preference in reducing
2. Number of concurring compulsory heirs.
testamentary dispositions and donations?
Q: What are the limitations imposed on the testator
regarding his rights of ownership? A: Method of reduction:
1. Reduce pro rata the non-preferred legacies and
A: The testator cannot make donations inter vivos which devises (Art.911[2]), and the testamentary
impinge upon the legitime or which are inofficious. dispositions (to heirs) (Art. 907). Among these

2013 GOLDEN NOTES
SUCCESSION
legacies, devises, and testamentary dispositions Q: What are the properties not subject to collation?
there is no preference.
A:
Note: preferred legacies and devisees are those 1. Absolutely no collation – expenses for support,
directed by testator to be preferred than the others education (elementary and secondary only), medical
attendance, even in extra-ordinary illness,
2. Reduce pro rata the preferred legacies and apprenticeship, ordinary equipment or customary
devises (Art. 911, last par.) gifts.
3. Reduce the donations inter vivos according to the 2. Generally not imputed to legitime:
inverse order of their dates (i.e., the oldest is the a. Expenses incurred by parents in giving their
most preferred) (Art. 773) children professional, vocational, or other career
unless the parents so provide, or unless they
Note: These reductions shall be to the extent required to impair the legitime.
complete the legitimes, even if in the process the disposition
b. Wedding gifts by parents and ascendants
is reduced to nothing
consisting of jewelry, clothing and outfit except
Note: The order of preference is applicable when: when they exceed 1/10 of the sum disposable by
1. The reduction is necessary to preserve the legitime of will.
compulsory heirs from impairment whether there are
donations inter vivos or not; or Note: Only the value of the thing donated shall be brought to
2. Although, the legitime has been preserved by the collation. This value must be the value of the thing at the time of
testator himself there are donations inter vivos. the donation.
Q: What is the effect of donations to the inheritance of an Q: Is a legacy or devise subject to collation?
heir?
A: Property left by will (like a legacy or devise) is not
A: Donations inter vivos given to children shall be charged deemed subject to collation if the testator has not
to their legitime, unless otherwise provided by the testator. otherwise provided, but the legitime shall in any case
Reason: Donations to the compulsory heirs are advances to remain unimpaired. This means that the legacy or devise
the legitime. should be imputed to the free portion, not to the legitime.
Note: Donations inter vivos to strangers shall be charged to the

free portion.
Q: What is collation?
A: It is the process of adding the value of thing donated to

the net value of hereditary estate.
To collate is to bring back or return to the hereditary mass,

in fact or fiction, property which came from the estate of
the decedent, during his lifetime, but which the law
considers as an advance from the inheritance.
Collation is applicable to both donations to compulsory

heirs and donations to strangers.
GR: Compulsory heirs are obliged to collate.
XPN:
1. When testator should have so expressly provided;
2. When compulsory heir repudiates his inheritance
Q: What are the properties that are to be collated?
A:
1. Any property/right received by gratuitous title during
testator’s lifetime
2. All that may have been received from decedent during
his lifetime
3. All that their parents have brought to collation if alive

CIVIL LAW
Steps in Determining the Legitime of Compulsory Heirs
Step 1: INVENTORY Determination of the gross value of the estate at the time of
(Gross Value of Estate) the death of the testator
Step 2: DEDUCT Determination of all the debts and charges which are
OBLIGATIONS chargeable against the estate
Determination of the net valueof the estate by deducting all

the debts and charges from the gross value of the estate
Step 3: Net Value
Collation or addition of all the value of all donations inter

vivos to the net value of the estate
Step 4: Collation
Determination of the Net Hereditary Estate from the total

Net Hereditary Estate thus found
Imputation of all the value of donations inter vivos made to

compulsory heirs against their legitimes and of the value of
all donations inter vivos made to strangers against the
disposable free portion and restoration to the hereditary
estate if the donation is inofficious.
If the legitime is impaired, the following reductions shall be

made:
a. First, reduce pro rata non-preferred legacies and
devices, and the testamentary dispositions.
b. Second, reduce pro rata the preferred legacies and
devises
c. Third, reduce the donations inter vivos according to
the inverse order of their dates.
*** As to the remaining portion of the estate, it shall be

distributed to the devisees and legatees

2013 GOLDEN NOTES
SUCCESSION
TABLES OF LEGITIMES
WHEN SURVIVING ALONE

½ of the hereditary estate (Free portion = ½)
Surviving spouse where the marriage was solemnized under 1/3 of the hereditary estate (Free portion =2/3)
articulo mortis and the deceased died within 3 months from
the time of marriage.
Note: The deceased was the spouse who was at the point of death at
the time of marriage (Tolentino, Civil Code, 1992 ed.)
Surviving spouse where the marriage was solemnized under ½ of the hereditary estate (Free portion = ½)
articulo mortis and the deceased died within 3 months from
the time of marriage but the parties have been living as
huband and wife for more than 5 years prior to the marriage
PRIMARY HEIRS CONCUR WITH CONCURRING COMPULSORY HEIRS

One legitimate child and the surviving spouse Legitimate child = ½ of the hereditary estate
Surviving spouse = ¼ of the hereditary estate
Free portion = ¼
Two or more legitimate children and the surviving spouse Legitimate children = ½ of the hereditary estate in equal
portions
Surviving spouse = a share equal to that of each child
Free portion = whatever remains
One legitimate child and illegitimate children Legitimate child = ½ of the hereditary estate (if there are
several, they shall divide the ½ share in equal portions)
Illegitimate children = ½ of the share of each legitimate child
(if the free portion is insufficient, the illegitimate children shall
divide the free portion equally among themselves)
One legitimate child, the surviving spouse, and illegitimate Legitimate child = ½ of the hereditary estate
children Surviving spouse = ¼ of the hereditary estate
Note: The share of the surviving spouse shall have preference over
those of the illegitimate children whose share may suffer reduction
pro rata because there is no preference as among themselves.
Two or more legitimate children, surviving spouse, and Legitimate children = ½ of the hereditary estate in equal
illegitimate children portions
Surviving spouse = a share equal to that of each legitimate
child
Note: The share of the surviving spouse shall have preference over
those of the illegitimate children whose share may suffer reduction
pro rata because there is no preference as among themselves.
SECONDARY HEIRS CONCUR WITH COMPULSORY HEIRS

Legitimate parents and surviving spouse Legitimate parents = ½ of the hereditary estate
Free portion = ¼
Legitimate parents and illegitimate children Legitimate parents = ½ of the hereditary estate
Illegitimate children = ¼ of the hereditary estate in equal
shares
Free portion = ¼
Legitimate parents, surviving spouse, and illegitimate children Legitimate parents = ½ of the hereditary estate
Illegitimate children = ¼ of the hereditary estate in equal
shares
Surviving spouse = 1/8 of the hereditary estate
Free portion = 1/8
Illegitimate parents and children Illegitimate parents = excluded

CIVIL LAW
Children = ½ if legitimate and ½ of the share of each

legitimate child if illegitimate children
Illegitimate parents and surviving spouse Illegitimate parents = ¼ of the hereditary estate
Free portion = ¼
CONCURRENCE AMONG CONCURRING COMPULSORY HEIRS

Surviving spouse and illegitimate children Surviving spouse = 1/3 of the hereditary estate
Illegitimate children = 1/3 of the hereditary estate
(Rabuya, Civil Law Reviewer, 1009 ed.)
COMPULSORY HEIRS AND VARIOUS COMBINATIONS 2. by right of representation
Q: Who are compulsory heirs? Q: Is an adopted child a compulsory heir?
A: The following are compulsory heirs: A: Yes. Legitimate children” includes adopted children and
1. Legitimate children and descendants, with legitimated children.
respect to their legitimate parents and
ascendants; Under R.A. 8552 or the Domestic Adoption Law adopted
2. In default of the foregoing, legitimate parents and children have the same rights granted to the legitimate
ascendants, with respect to their legitimate children. Adopted children, for all intents and purposes are
children and descendants; considered as legitimate children.
3. The widow or widower;
4. Acknowledged natural children, and natural The adopted child enjoys successional rights as a legitimate
children by legal fiction; child, he would exclude the legitimate parents and
5. Other illegitimate children referred to in article ascendants but the relationship does not extend to other
287. relatives of the adopter, thus, disqualifying the adopted
from directly inheriting from the adopter’s ascendants.
Note: Compulsory heirs mentioned in Nos. 3, 4, and 5 are not
excluded by those in Nos. 1 and 2; neither do they exclude one Q: Is formal or judicial adoption necessary before the
another.
adopted child can inherit from the adopter?
In all cases of illegitimate children, their filiation must be duly
proved. A: Yes, because adoption is a juridical act, a proceeding in
rem, which creates between two persons a relationship
The father or mother of illegitimate children of the three classes similar to that which results from legitimate paternity and
mentioned, shall inherit from them in the manner and to the filiation.
extent established by this Code. (Art. 887)
Without the benefit of formal (judicial) adoption, the
Q: What are the classifications of compulsory heirs? adopted child is neither a compulsory nor a legal heir.
Hence, he is not entitled to inherit.
A: Q: What is the rule regarding legitimated child?

1. Primary compulsory heirs – They are not excluded by
the presence of other compulsory heirs. Those who A: Prior to the marriage of the parents of the child, he is an
have precedence over and exclude other compulsory illegitimate child since he is born outside a valid marriage.
heirs. E.g. legitimate children and / or decendants
Legitimation takes place upon the marriage of the child’s
2. Secondary compulsory heirs – Those who succeed only parents, the marriage being valid or at least voidable, the
in default of the primary compulsory heirs. E.g. child is automatically raised to the status of legitimacy,
legitimate parents and/ or legitimate ascendants; without need of any additional act on the part of either the
illegitimate parents child or the parents.
3. Concurring compulsory heirs – Those who succeed Note: Children conceived and born outside of wedlock of parents
who, at the time of the conception of the former, were not
together with the primary or secondary compulsory
disqualified by any impediment to marry each other, or were so
heirs. E.g. Surviving spouse and illegitimate children disqualified only because either or both of them were below
and descendants. eighteen (18) years of age, may be legitimated (Art. 177, Family
Code as amended by R.A. 9858).
Q: In what ways may compulsory heirs inherit?
A: Compulsory heirs inherit either:

1. in their own right; or

2013 GOLDEN NOTES
SUCCESSION
Q: What is the rule regarding an illegitimate child? RESERVA TRONCAL
A: He may become a primary compulsory heir of his Q: What is reserva troncal?

illegitimate parents only if they do not concur with
legitimate children or descendants of his illegitimate A: Reserva troncal – The ascendant who inherits from his
parents. descendant any property which the latter may have
acquired by gratuitous title from another ascendant, or a
If the illegitimate parents have legitimate children or brother or sister, is obliged to reserve such property as he
descendants, the latter shall be the primary compulsory may have acquired by operation of law for the benefit of
heirs and the illegitmate child shall be considred merely as relatives who are within the third degree and who belong
concurring compulsory heir. to the line from which said property came. (Art. 891)
Note: Under the Family Code, there is no more distinction between Purpose: To prevent persons who are outsiders to the
acknowledged natural children and illegitimate children. They are family from acquiring, by chance or accident, property
all considered as illegitimate. which otherwise would have remained with the said family.
In short, to put back the property to the line from which it
Compulsory heirs of a person who is illegitimate:
1. Legitimate children and descendants; originally came.
2. Illegitimate children and descendants;
3. In default of the foregoing, illegitimate parents Note: Other terms used to refer to reserva troncal:
only; 1. Lineal
4. Surviving spouse. 2. Familiar
3. Extraordinaria
4. Semi-troncal
Q: When do legitimate parents and ascendants inherit?
5. Pseudo-troncal
A: Legitimate parents and ascendants inherit in default of

Q: What are the requisites that must exist in order that a
legitimate children and descendants. They are secondary
property may be impressed with a reservable character?
compulsory heirs.
A:
Q: Does the presence of illegitimate children of the
1. That the property was acquired by a descendant
decedent exclude the legitimate parents and ascendants?
(called “praepositus” or propositus) from an ascendant
or from a brother or sister by gratuitous title when the
A: No. Legitimate parents and ascendants concur with the
recipient does not give anything in return;
illegitimate children of the decedent. However, if the
2. That said descendant (praepositus) died without an
decedent is himself illegitimate, his illegitimate children
issue;
exclude the illegitimate parents and ascendants.
3. That the same property (called “reserva”) is inherited
by another ascendant (called “reservista”) by
Q: Can a common law spouse be a compulsory heir?
operation of law (either through intestate or
compulsory succession) from the praepositus; and
A: No. There must be valid marriage between the decedent
4. That there are living relatives within the third degree
and the surviving spouse. If the marriage is null and void,
counted from the praepositus and belonging to the
the surviving spouse cannot inherit.
same line from where the property originally came
(called “reservatarios”). (Art. 891; Chua v. CFI of
Q: How can the heirs of the decedent use the nullity of
Negros Occidental, Branch V, 78 SCRA 412; Rabuya,
marriage to prevent the surviving spouse from inheriting?
Civil Law Reviewer, pp. 634-635)
A: The heirs can raise the issue of nullity of the marriage in
Q: Does reserva troncal exist in an illegitimate or adoptive
the same proceeding for the settlement of the estate. This
relationship?
is allowed because a marriage that is null and void can be
collaterally attacked.
A: No. It only exists in the legitimate family. (Centeno v.
Centeno, 52 Phil. 322; id, p. 635)
However, in case of voidable marriages, if the marriage is
not annulled before the decedent died, the surviving Note: In order that reserva will exist, all these persons should be
spouse can still inherit legitimately related. Reserva troncal only exists in a legitimate
family relation. Illegitimate and adoptive relationships, as well as
Note: Voidable marriages can only be attacked in a direct those by afiinity are excluded.
proceeding, i.e. annulment proceeding.
Q: What are the causes for the extinguishment of the
Note: The surviving spouse is not a compulsory heir of his/her
reserva?
parent-in-law. When the spouse has given a ground for legal
separation, it is a sufficient cause for disinheriting a spouse even
without a decree of legal separation. If there is already a decree for A: DD LRR P
legal separation then disinheritance is superfluous for this in effect 1. Death of the reservista
would be denying the guilty spouse of a right not possessed. 2. Death of all the relatives within the third degree
prior to the death of the reservista

CIVIL LAW
3. Accidental Loss of all the reservable properties Q: In order for reserva troncal to take place, how should
4. Renunciation or waiver by the reservatarios the property be transmitted from the origin to the
5. Registration under Act 496 without the reservable propositus?
character being annotated if it falls into the hands
of a buyer in good faith for value A: The transmission from the origin to the propositus must
6. By Prescription – reservista seeks to acquire (30 be by gratuitous title.
years – immovable; 8 years- movable)
Q: Can the origin alienate the property?
Q: Differentiate reserva minima and reserva maxima.
A: Yes. While the origin owns the property, there is no
A: reserva yet, and therefore, he has the perfect right to
RESERVA MINIMA RESERVA MAXIMA dispose of it, in any way he wants, subject, however to the
rule on inofficious donations.
All of the properties which the
All of the properties which
descendant had previously
the descendant had Q: Who must be the propositus?
acquired by gratuitous title
previously acquired by
from another ascendant or
gratuitous title from another A: The propositus must be a legitimate descendant or half-
from a brother or sister must
ascendant or from a brother brother/sister of the origin of the property.
be considered as passing to
or sister must be included in
the ascendant- reservista Note: To give rise to reserve troncal, the propositus must not have
the ascendants legitime
partly by operation of law and any legitimate children, otherwise, the reservable property will be
insofar as such legitime can
partly by force of the inherited by the latter
contain.
descendant’s will.
The presence of illegitimate children of the propositus will not
Q: A son received from his mother P200,000 by virtue of a prevent his legitimate parents or ascendants from inheriting the
reserved property.
will. The son had properties of his own amounting to
P400,000. When the son died without issue, he left a will The propositus is the descendant whose death gives rise to the
giving all his estate to his father. How much is the reserva troncal, and from whom therefore the third degree is
reservable property? counted.
A: Since the father’s legitime is only ½, he received the Q: Can the propositus alienate the property?
P600,000 in two capacities: P300,000 as a compulsory heir
– and which was received therefore as a legitime or by A: Yes. While propositus is still alive, there is no reserva yet,
operation of law and P300,000 as a voluntary heir. therefore, he is the absolute owner of the property, with
According to the theory of reserva minima, the reservable full freedom to alienate or dispose or encumber.
property is only P 100,000 on the theory that half of the
P200,000 received from the origin (mother in this case) was Note: The propositus is referred to as the “arbiter of the reserva”.
given to the father as his legitime or by operation of law.
Therefore, the reservable property is only P100,000 (Paras, Q: Who is the reservista in reserva troncal?
Civil Code of the Philippines Annotated, 2008 ed.).
A: The reservista is the ascendant who inherits from the
Note: According to Manresa, in view of the silence of the law on propositus by operation of law. It is he who has the
the matter, the principle of reserve minima should be followed. obligation to reserve.
This seems also teh opinion of Scaevola (Paras, Civil Code of the
Philippines Annotated, 2008 ed.). Note: The relationship between the reservista and the propositus
must be legitimate.
Q: Who are the parties in reserva troncal?
If he inherited the property from the propositus, not by legal
A: succession or by virtue of legitime, there is no obligation to
1. Origin reserve.
2. Propositus
3. Reservista Q: Does the reservista own the reservable property?
4. Reservatartios/Reservees
A: Yes. The reservista is an absolute or full owner, subject
Q: Who must be the origin in reserva troncal? to a resolutory condition. If the resolutory condition is
fulfilled, the reservista’s ownership of the property is
A: The origin of the property must be an ascendant, brother terminated.
or sister of the propositus.
Resolutory condition: If at the time of the reservista’s
Note: The origin must be a legitimate relative because reserva death, there should still exist relatives within the third
troncal exists only in the legitimate family. degree (reservatarios) of the propositus and belonging to
the line from which the property came.

2013 GOLDEN NOTES
SUCCESSION
Note: The reservable property is not part of the estate of the and by operation of law, the absolute owner of the
reservista. reservable property. (Cano v. Director of Lands)
Q: Can the reservista alienate the property? Q: Is there right of representation in reserva troncal?
A: Yes, unlike in fideicommisary substitution where the A: Yes. There is representation in reserva troncal, but the
fiduciary heir cannot alienate the property because he is representative must also be within the third degree from
merely considered a usufruct, the reservista can alienate the propositus. (Florentino v. Florentino)
the property being the owner thereof but subject to the
reservation. Note: The reservatarios inherit the property from the propositus,
not from the reservista.
Q: Is the reservista required to furnish a bond?
Reserva troncal is governed by the following rules on intestate
A: GR: He is required to furnish a bond, security or succession: (Applicable when there are concurring relatives within
the third degree)
mortgage to guarantee the safe delivery later on to the
1. Proximity - “The nearer excludes the farther”
reservatarios of the properties concerned, in the proper 2. “The direct line is preferred over the collateral line”
cases. 3. “The descending line is preferred over the ascending
line”
XPN: The bond, security or mortgage is not needed
when the property has been registered or annotated in Q: What are the rights of the reservatarios?
the certificate of title as subject to reserva troncal.
A:
Note: Upon the reservista’s death the ownership of the reserved 1. To ask for the inventory of all reservable property
properties is automatically vested to the reservatarios who are 2. The appraisal of all reservable movable property
existing. Hence, the reservista cannot dispose the reserved
3. The annotation in the registry of deeds of the
property by will if there are reservatarios existing at the time of his
death. reservable character of all reservable immovable
property
Q: Who are the reservatarios? 4. Constitution of the necessary mortgage
A: The reservatarios are relatives within the third degree of

the propositus, who belong to the same line from which the
property originally came, who will become the full owners
of the property the moment the reservista dies, because by
such death, the reserva is extinguished.
Note: It is further required that the reservatario should be related

by blood not only from the prepositus but also to the other
descendant, or brother, or sister, from whom the property came.
Only then can he be considered as belonging to the “line from
which the property came.”
Q: Who are the relatives within the third degree from the
propositus?
A:
1. Parents;
2. Grandparents;
3. Full and half blood brothers and sisters;
4. Great grandparents,
5. Nephews and nieces.
Q: What are the requisites for passing of title to the

reservatarios?
A:
1. Death of the reservista; and
2. The fact that the reservatarios survived the reservista.
Q: When does the reservatario acquire the right over the

reservable property?
A: Upon the death of the reservista, the reservatario

nearest the decedent propositus becomes, automatically

CIVIL LAW
OPERATION OF RESERVA TRONCAL

2013 GOLDEN NOTES
SUCCESSION
DISINHERITANCE d. Refusal without justifiable cause to support the
testator who disinherits such heir.
Q: What is disinheritance?
2. Peculiar Causes for Disinheritance
A: Disinheritance is the process or act, thru a testamentary a. Children and Descendants:
disposition of depriving in a will any compulsory heir of his i. Conviction of a crime which carries with it a
legitime for true and lawful cause. penalty of civil interdiction
ii. Maltreatment of the testator by word or deed
Note: The only way in which a compulsory heir can be deprived of by the children or descendant
his legitime is through valid disinheritance. iii. When the children or descendant has been
convicted of adultery or concubinage with the
Q: Is disinheritance automatic? spouse of the testator
iv. When the children or descendant leads a
A: No. Disinheritance is not automatic. There must be dishonorable or disgraceful life
evidence presented to substantiate the disinheritance and b. Parents or Ascendants:
must be for a valid and sound cause. i. When the parent or ascendant has been
convicted of adultery or concubinage with the
Q: What is the effect of disinheritance? spouse of the testator
ii. When the parents have abandoned their
children or induced their daughters to live a
A: Total exclusion to the inheritance, meaning, loss of corrupt or immoral life, or attempted against
legitime, right to intestate succession, and of any their virtue
disposition in a prior will. iii. Loss of parental authority for causes specified
in the Code
Disinheritance, however, is without prejudice to the right of iv. Attempt by one of the parents against the life
representation of the children and descendants of the of the other, unless there has been
person disinherited. reconciliation between them
c. Spouse:
But the disinherited parent shall not have the usufruct or i. When the spouse has given cause for legal
administration of the property which constitutes the separation
legitime. ii. When the spouse has given grounds for the
loss of parental authority
Q: What are the requisites of a valid disinheritance?
Q: What is reconciliation?
A: Disinheritance must be:
1. Made in a valid will A: There is reconciliation when two persons who are at
2. Identity of the heir is clearly established odds decide to set aside their differences and to resume
3. For a legal cause their relations. They need not go back to their old relation.
4. Expressly made
5. Cause stated in the will Note: A handshake is not reconciliation. It has to be something
6. Absolute or unconditional more. It must be clear and deliberate.
7. Total
8. Cause must be true and if challenged by the heir, In order to be effective, the testator must pardon the disinherited
it must be proved to be true. heir. The pardon whether express or tacit, must refer specifically to
the heir disinherited and to the acts he has committed, and must
be accepted by such heir.
Note: Proponent of disinheritance has the burden of proof.
In disinheritance, reconciliation need not be in writing.
Q: What are the grounds for disinheritance?
Q: What is the effect of reconciliation on a person’s right
A: to disinherit?
1. Common causes for disinheritance of children or
descendants, parents or ascendants, and spouse: A:
a. When the heir has been found guilty of an 1. If made before disinheritance – right to disinherit
attempt against the life of the testator, his/her is extinguished.
descendants or ascendants, and spouse, in case 2. If made after disinheritance – disinheritance is set
of children or parents. aside.
b. When the heir by fraud, violence, intimidation, or
undue influence causes the testator to make to Q: Is there a right of representation in case of
make a will or to change one already made. disinhiritance?
c. When the heir has accused the testator of a crime
for which the law prescribes imprisonment of six A: Yes. The causes of disinhiritance are personal to the
years or more, if the accusation has been found disinhirited heir. Hence, in case of valid disinhiritance, only
groundless. the disinhirited heir is deprived of his right to the legitime.

CIVIL LAW
But the children or descendants of the disinhirted heir can A: If at the time the legacy or devise is made, the thing did
take his place and preserve the disinhirited heir’s to the not belong to the legatee or devisee but later on he
legitime. acquires it, then:
1. If he acquired it by gratuitous title, then the
Q: What is the effect of disinheritance without cause? legacy or devise is void.
A: Disinheritance without a specification of the cause, or Reason: The purpose of the testator that the
for a cause the truth of which, if contradicted, is not property would go to the devisee or legatee has
proved, or which is not one of those set forth in this Code, already been accomplished with no expense to
shall annul the institution of heirs insofar as it may the legatee or devisee.
prejudice the person disinherited; but the devises and
legacies and other testamentary dispositions shall be valid 2. If he acquired it by onerous title, the legacy or
to such extent as will not impair the legitime. (Art. 918) devise is valid and the estate may be required to
reimburse the amount.
LEGACIES AND DEVISES
Q: Suppose the property bequeathed or devised has been
Q: What can be bequeathed or devised? pledged or mortgaged, who has the obligation to free the
property from such encumbrance?
A: Anything within the commerce of man or which is
alienable. A: GR: The pledge or mortgage must be paid by the estate.
Q: Who may be charged with legacies and devices? XPN: If the testator provides otherwise. However, any
other charge such as easements and usufruct, with
A: which the thing bequeathed is burdened, shall be
1. Any compulsory heir respected by the legatee or devisee.
2. Any voluntary heir
3. Any legatee or devisee Q: What is a legacy of credit?
4. The estate, represented by the executor or
administrator (Jurado, p. 345) A: It takes place when the testator bequeaths to another a
credit against a third person. In effect, it is a novation of
Q: Can the testator bequeath or devise a thing or property the credit by the subrogation of the legatee in the place of
belonging to someone else? the original creditor.
A: It depends on whether: Q: What is a legacy of remission?

1. The testator thought that he owned it –
A: It is a testamentary disposition of a debt in favor of the
GR: A legacy or devise of a thing belonging to someone debtor. The legacy is valid only to the extent of the amount
else when the testator thought that he owned it is a of the credit existing at the time of the testator's death. In
void legacy or devise because it is vitiated by mistake. effect, the debt is extinguished.
XPN: If the testator acquires it after making his will. Q: Is a legacy or devise considered payment of a debt, if
the testator has a standing indebtedness to the legatee or
2. The testator knows that he does not own but ordered devisee?
its acquisition –
A: No, because if it is, then it would be a useless legacy or
If the thing given as devise or legacy is not owned by devise since it will really be paid.
the testator at the time he made the will but he orders
his estate to acquire it, it is a valid legacy or devise. Q: What is the order of payment of legacies and devises?
The testator knew that he did not own it. There is no
mistake. A:
1. Remuneratory legacies or devises
Q: What is the effect if the thing or property bequeathed 2. Legacies or devises declared by testator to be
or devised belonged to the legatee or devisee at the time preferential
the will was executed? 3. Legacies for support
4. Legacies for education
A: The legacy or devise is ineffective even if the legatee or 5. Legacies or devises of a specific determinate thing
devisee alienates the thing after the will is made. which forms part of the estate
6. All others pro rata
Q: Suppose the legatee or devisee acquired the property
after the will has been executed? Suppose he acquired the Note: The order of preference abovementioned is applicable when:
thing by onerous title? What would be the effect? 1. There are no compulsory heirs and the entire estate is
distributed by the testator as legacy/devise; or

2013 GOLDEN NOTES
SUCCESSION
2. There are compulsory heirs but their legitime has Q: What is the formula for application of inheritance?
already been provided for by the testator and there are
no donations inter vivos. A: The following are applied successively: ISRAI
1. Institution of an heir (Bequest, in case of legacies
Q: What is the distinction between Art. 911 and Art. 950? or devises)
2. Substitution, if proper
A: 3. Representation, if applicable
Order of preference under Order of preference under 4. Accretion, if applicable
Art. 911 Art. 950 5. Intestacy, if all of the above are not applicable
LDPO: 1. Remuneratory L/D;
1. Legitime of compulsory 2. Preferential L/D; Q: When can legal or intestate succession take place?
heirs; 3. Legacy for support;
2. Donations inter vivos; 4. Legacy for education; A: Intestate succession takes place when:
3. Preferential legacies or 5. L/D of a specific, 1. there is no will; the will is void, or the will is
devises; determinate thing which revoked;
4. All Other legacies or forms a part of the estate; 2. the will does not dispose all the property of the
devises pro rata 6. All others pro rata testator. (partial intestacy);
3. the suspensive condition attached to the
Note: When the question of reduction is between and among inheritance is not fulfilled;
legatees and devisees themselves, Art. 950 governs; but when 4. The heir predeceased the testator or repudiates
there is a conflict between compulsory heirs and the inheritance and no substitution and no right
legatees/devisees, Art. 911 governs. of accretion take place.
5. The heir instituted is incapacitated to succeed.
Q: What are the grounds for the revocation of legacy or
devise? Note: The enumeration is not exclusive; there are other causes for
intestacy which are not included in the enumeration.
A: E.g.
1. Transformation of the thing in such a manner that 1. Preterition;
2. Arrival of the resolutory term or period;
it does not retain either the form or the denomination
3. Fulfillment of a resolutory condition attached to the
it had. inheritance;
4. Non-compliance or impossibility of complying with the
2. Alienation of the thing bequeathed. will of the testator.
Note: GR: The alienation of the property revokes the legacy Q: What are the rules on exclusion and concurrence in
or devise notwithstanding the nullity of the transaction. intestate succession?
However, if the nullity is based on vitiated consent, the legacy
or devise is not revoked because there was no intention to
revoke (Fernandez v. Dimagiba, G.R. No. L-23638, 1967). A:
1. Legitimate children
XPN: If the sale is pacto de retro and the testator a. Exclude parents, collaterals and State
reacquired it during his lifetime. b. Concur with surviving spouse and illegitimate
children
3. Total loss of the thing bequeathed. c. Are excluded by no one
Note: The loss of the thing bequeathed must not be 2. Illegitimate children
attributed to the heirs. a. Exclude illegitimate parents, collaterals and State
b. Concur with surviving spouse, legitimate children,
4. If the legacy is a credit against a third person or the and legitimate parents
remission of a debt, and the testator, subsequent to c. Are excluded by no one
the making of the will, brings an action against the
debtor for payment. 3. Legitimate parents
a. Exclude collaterals and the State
LEGAL OR INTESTATE SUCCESSION b. Concur with illegitimate children and surviving
spouse
Q: What is legal or intestate succession? c. Are excluded by legitimate children
A: Legal or intestate succession is that which is effected by 4. Illegitimate parents

operation of law in default of a will. It is legal because it a. Exclude collaterals and State
takes place by operation of law; it is intestate because it b. Concur with surviving spouse
takes place in the absence or in default of a last will of the c. Are excluded by legitimate children and illegitimate
decedent. children
5. Surviving spouse

CIVIL LAW
a. Excludes collaterals other than brothers, sister, 2. In the absence of legitimate children and descendants,
nephews and nieces, and State the illegitimate children (of the illegitimate child) and
b. Concurs with legitimate children, illegitimate their descendants succeed to the entire estate,
children, legitimate parents, illegitimate parents, without prejudice to the concurrent right of the
brothers, sisters, nephews and nieces surviving spouse.
c. Is excluded by no one
3. In the absence of children and descendants, whether
6. Brothers and Sister, nephews and nieces legitimate or illegitimate, the third in the order of
a. Exclude all other collaterals and the State succession to the estate of the illegitimate child is his
b. Concur with surviving spouse illegitimate parents. If both parents survive and are
c. Are excluded by legitimate children, illegitimate entitled to succeed, they divide the estate share and
children, legitimate parents and illegitimate parents share alike. Although the law is silent, if the surviving
spouse of the illegitimate child concurs with the
7. Other collaterals illegitimate parents, the surviving spouse shall be
a. Exclude collaterals in remoter degrees and the State entitled to one-half of the estate while the illegitimate
b. Concur with collaterals in the same degree parents get the other half.
c. Are excluded by legitimate children, illegitimate
children, legitimate parents, illegitimate parents, Note: In the ascending line, only the illegitimate parents are
surviving spouse, brothers and sisters, and nephews entitled to inherit from the illegitimate child; the other
and nieces illegitimate descendants are not so entitled.
8. State 4. In default of children or descendants, legitimate or

a. Excludes no one illegitimate, and illegitimate parents, the surviving
b. Concurs with no one spouse shall inherit the entire estate. But if the
c. Is excluded by everyone surviving spouse should survive with brothers and
(Balane, Jottings and Jurisprudence in Civil Law: Succession, sisters, nephews and nieces, the surviving spouse shall
2010 ed.) inherit one-half of the estate, and the latter the other
half. The brothers and sisters must be by illegitimate
ORDER OF INTESTATE SUCCESSION filiation, otherwise, the Iron Curtain Rule shall apply.
Q: What is the order of preference between lines in legal 5. Although the law is silent, illegitimate brothers and
or intestate succession? sisters who survive alone shall get the entire
inheritance. The legitimate children of the illegitimate
A: Succession takes place: parents are not entitled to inherit from the illegitimate
First, in the direct descending line; child by virtue of Article 992 of the NCC.
Second, in the direct ascending line;
Finally, in the collateral line. 6. The State. (id., pp. 691-692)
Q: What is the order of intestate succession to a legitimate

child?
A: In general, and without prejudice to the concurrent right

of other heirs in proper cases, the order of intestate
succession to a legitimate child is as follows:
1. legitimate children and descendants;
2. legitimate parents and ascendants;
3. illegitimate children;
4. the surviving spouse;
5. collaterals up to the fifth degree; and
6. State (Rabuya, Civil Law Reviewer, p. 678)
Q: What is the order of intestate succession to an

illegitimate child?
A:
1. The legitimate children and descendants of a person
who is an illegitimate child are preferred over other
intestate heirs, without prejudice to the right of
concurrence of illegitimate children and the surviving
spouse.

2013 GOLDEN NOTES
SUCCESSION
TABLE OF INTESTATE SHARES
Legitimate Children alone The whole estate divided equally

Legitimate children and Illegitimate children The whole estate, each illegitimate child getting ½ share of
one legitimate child
Legitimate children and surviving spouse The whole estate, divided equally (the surviving spouse
counted as one legitimate child)
Legitimate Children, surviving spouse and illegitimate children The whole estate, the surviving spouse being counted as one
legitimate child and each illegitimate child getting ½ share of
one legitimate child
Legitimate parents alone The whole estate, divided equally
Legitimate ascendants (other than parents) alone The whole estate, observing in proper cases, the rule of
division by line
Legitimate parents and illegitimate children Legitimate parents = ½ of the estate
Illegitimate children = ½ of the estate
Legitimate parents and surviving spouse Legitimate parents = ½ of the estate
Surviving spouse = ½ of the estate
Legitimate parents, surviving spouse and illegitimate children Legitimate parents = ½ of the estate
Surviving spouse = ¼ of the estate
Illegitimate children = ¼ of the estate
Illegitimate children alone The whole estate, divided equally
Illegitimate children and surviving spouse Illegitimate children = ½ of the estate
Surviving spouse alone The whole estate
Surviving spouse and illegitimate parents No article governing, but Art. 997 may be applied by analogy,
thus:
Illegitimate parents = ½ of the estate
Surviving spouse and legitimate brothers and sisters, nephews Surviving spouse = ½ of the estate
and nieces Legitimate brothers, sisters, nephews, nieces = ½ of the estate
(the nephews and nieces inheriting by representation in
proper cases)
Surviving spouse and illegitimate brothers and sisters, Surviving spouse = ½ of the estate
nephews and nieces Illegitimate brothers, sisters, nephews and nieces = ½ of the
estate (the nephews and nieces inheriting by representation
in proper cases)
Note: When the law speaks of brothers and sisters, nephews and
nieces as legal heirs of an illegitimate child, it refers to illegitimate
brothers and sisters as well as to the children, whether legitimate or
illegitimate, of such brothers and sisters (Manuel v. Ferrer, 247 SCRA
476)
Illegitimate parents alone The whole estate
Illegitimate parents and children of any kind Illegitimate parents = excluded
Children
a. Child alone (legitimate or illegitimate) = whole estate
b. Legitimate and illegitimate children = each illegitimate gets
½ share of one legitimate child
Legitimate brothers and sister alone The whole estate, with a brother/sister of the half-blood
inheriting ½ the share of a brother/sister of the full blood
Legitimate brothers and sisters, nephews and nieces The whole estate, observing the 2:1 proportion of full and half
blood fraternity and the nephews and nieces inheriting by
representation in the proper cases
Nephews and nieces with Uncles and aunts Uncles and Aunts = excluded
Nephews and nieces = whole estate per capita, but observing
the 2:1 proportion for the full and half blood
Illegitimate brothers and sisters alone The whole estate, observing the 2:1 proportion of full and half
blood fraternity
Illegitimate brothers, sisters, nephews and nieces No article governing, but Arts. 1005 and 1008 may be applied
by analogy, hence, they acquire the whole estate
Nephews and nieces alone The whole estate per capita, but observing the 2:1 proportion
for the full and half blood

CIVIL LAW
Other collaterals The whole estate, per capita, the nearer in degree excluding
the more remote
State The whole estate
Assignment and disposition
1. If decedent was a resident of the Philippines at any time:

a. Personal property – to municipality of last residence
b. Real property – where situated
2. If decedent was never a resident of the Philippines

Personal and real property – where respectively situated
How property is to be used:
1. For the benefit of public educational and charitable

institutions in the respective municipalities/cities
2. Alternatively, at the instance of an interested party, or

motu propio, court may order creation of a permanent trust
for the benefit of the institutions concerned
RIGHT OF REPRESENTATION Q: Does the representative inherit from the person

represented?
Q: What is right of representation?
A: No. In representation, the representative does not
A: Right created by fiction of law where the representative inherit from the person represented but from the testator
is raised to the place and degree of the person represented, or decedent.
and acquires the rights which the latter would have if he
were living or could have inherited. Q: Where does right of representation take place?
Q: What is the effect of representation? A: Representation takes place in the direct descending line,
never in the ascending.
A: Whenever there is succession by representation, the
division of the estate shall be made per stirpes, in such Note: The representative himself must be capable of succeeding
manner that the representative or representatives shall not the decedent.
inherit more than what the person they represent would
An illegitimate child can represent his father, provided that the
inherit, if he were living or could inherit (Art. 974).
father was also illegitimate.
Note: Per stirpes means inheritance by group, all those within the
group inheriting in equal shares. Q: Does right of representation apply in the collateral
line?
Q: When does right of representation arise?
A: Right of representation takes place only in favor of
A: Representation may arise either because of: children of brothers or sisters, whether full or half blood
1. predecease and only if they concur with at least one uncle or aunt.
2. incapacity
Note: This rule applies only when the decedent does not have
3. disinheritance
descendants.
Q: When is right or representation not available?

Q: What is the effect if there is no uncle or aunt upon
whom the children, who seek to invoke the right of
A:
representation, can concur with?
1. As to compulsory heirs: In case of repudiation, the one
who repudiates his inheritance cannot be represented.
A: There shall be no right of representation and ultimately
Their own heirs inherit in their own right.
they shall not inherit following Art. 975.
2. As to voluntary heirs: Voluntary heirs, legatees and
devisees who:
a. Predecease the testator
b. Renounce the inheritance
cannot be represented by their own heirs, with
respect to their supposed inheritance.

2013 GOLDEN NOTES
SUCCESSION
Q: May an illegitimate sibling of the decedent be Q: Distinguish the application of iron curtain rule and right
represented? of representation
A: Yes. An illegitimate brother or sister of the deceased can A:

be represented by his children, without prejudice to the RIGHT OF
IRON CURTAIN RULE
application of the Iron Curtain Rule (Tolentino, p. 451). REPRESENTATION
Prohibits absolutely a
Q: Does the right of representation apply to adopted succession ab intestato Right created by fiction of
children? between the illegitimate law where the
child and the legitimate representative is raised to
A: No. The right of representation cannot be invoked by children and relatives of the place and degree of
adopted children because they cannot represent their the father or mother of the person represented,
adopting parents to the inheritance of the latter’s parents. said illegitimate child. and acquires the rights
which the latter would
Reason: The law does not create any relationship between Note: Iron curtain rule have if he were living or
the adopted child and the relatives of the adopting parents, imposes a limitation on right could have inherited.
not even to the biological or legitimate children of the of representation.
adopting parents. Applies only in intestate Applies to both intestate
succession and testate succession
Note: Under R.A. 8552 or the Domestic Adoption Law, the adopted Determining factor: who died first? Is it the parent of
child and the adopting parents have reciprocal successional rights. the illegitimate child or is it the legitimate relative or
child of his parent?
Q: What is the rule on equal division of lines? Applies if the one who Applies if the one who
died first is the died first is the legitimate
A: GR: Intestate heirs equal in degree inherit in equal illegitimate’s parent. parent or child of the
shares. illegitimate’s parent.
Reason: illegitimate will
XPN: be representing his parent Reason: illegitimate
1. In the ascending line, the rule of division by line is because of the inherits from his parent’s
½ to the maternal line and ½ to the paternal line, predecease, the bar estate which includes his
and within each line, the division is per capita. imposed by the iron parent’s inheritance from
2. In the collateral line, the full-blood curtain rule is rendered said legitimate relative or
brothers/sisters will get double that of the half- operative to prevent such. child who died.
blood.
3. The division in representation, where division is
per stirpes – the representative divide only the
share pertaining to the person represented.
Note: Compulsory heirs shall, in no case, inherit ab intesto less

than their legitime as provided in testamentary succession.
IRON CURTAIN RULE
Q: What is the iron-curtain rule?
A: Art. 992 of the Civil Code provides that illegitimate

children cannot inherit ab intestato from the legitimate
children and relatives of his mother or father. Legitimate
children and relatives cannot inherit in the same way from
the illegitimate child.
Note: The iron curtain rule only applies in intestate succession.
There is a barrier recognized by law between the legitimate

relatives and the illegitimate child so that one cannot inherit from
the other and vice-versa.

CIVIL LAW
Right of Representation and Iron Curtain Rule
(D)†
If the child to be represented is If the child to be represented is
LEGITIMATE – only legitimate children/ ILLEGITIMATE – both legit & illegit
descendants can represent him children/ descendants can represent him
Legit X† Illegit Y†
Predeceased D Predeceased D
legit illegit legit illegit

(X1) (X2) (Y2) (Y1)
Iron Curtain Rule applies
Since X and Y both predeceased D, only X1 can represent X. X2 cannot by virtue of the iron curtain
rule. Both Y1 and Y2 can represent Y
PROVISIONS COMMON TO TESTATE AND INTESTATE

SUCCESSION Q: In testamentary succession, in what instances may
accretion take place?
RIGHT OF ACCRETION
A:
Q: What is accretion? 1. Predecease
2. Incapacity
A: Accretion is a right by virtue of which, when two or 3. Renunciation
more persons are called to the same inheritance, devise or 4. Non-fulfillment of suspensive condition imposed upon
legacy, the part assigned to the one who renounces or instituted heir
cannot receive his share, or who died before the testator, is 5. Ineffective testamentary disposition
added or incorporated to that of his co-heir, co-devisees, or
co-legatees. Q: In intestate succession, in what instances may accretion
take place?
Basis: Accretion is a right based on the presumed will of the
deceased that he prefers to give certain properties to A:
certain individuals rather than to his legal heirs. Accretion is 1. Predecease of legal heir
preferred over intestacy. 2. Incapacity of legal heir
3. Repudiation by legal heir
Q: What are the requisites of accretion?
Note: Accretion takes place only if there is no representation. In
renunciation, there is always accretion.
A:
1. Two or more persons must have been called in the
Reason: No representation in renunciation.
testator’s will to the same inheritance, legacy or
devise, or to the same portion thereof, pro indiviso
2. There must be a vacancy in the inheritance, legacy or
devise as a result of predecease, incapacity or
repudiation

2013 GOLDEN NOTES
SUCCESSION
Q: Distinguish substitution, representation and accretion in testate and intestate succession
A:
TESTAMENTARY SUCCESSION INTESTATE SUCCESSION
With respect to LEGITIME in case of predecease, In case of predecease and incapacity
incapacity and disinheritance
1. If the right of representation takes place, 1. If the right of representation takes place,
then the representative succeeds to the then the representative succeeds to the
vacant portion. vacant portion.
2. If representation is not available, then the co- Note: Representation takes place in case of
heirs of the same degree shall succeed to it in predecease and incapacity with respect to
their own right and not by accretion since inheritance conferred by law. Hence, it takes place
in legal or intestate succession.
there is no accretion with respect to the
legitime
2. If representation is not available, then the
vacant portion shall go to the co-heirs in their
3. In default of the above, the vacant portion
own right
shall go to the other secondary and/or other
compulsory heirs
3. In default thereof, then the vacant share shall
Note: Substitution cannot take place with respect to legitime go to the heirs in the next order of intestacy
With respect to LEGITIME in case of repudiation In case of repudiation

1. The other co-heirs shall succeed to it in their The vacant portion shall go to the other co-heirs by
own right and not by right of accretion since right of accretion. In legal succession, the share of the
there is no accretion with respect to legitime person who repudiates the inheritance always accrue
to his co-heirs
2. In default thereof, the vacant portion shall go
to the other secondary and/or compulsory In default thereof, the vacant share shall go to heirs of
heirs next degree in their own right
Note: Representation does not take place in repudiation. In default thereof, it shall go to the heirs in the next
order of intestacy
Note: Substitution cannot take place with respect to legitime
With respect to the FREE PORTION in case of

predecease, incapacity or renunciation
1. Substitution shall take place if provided for
by the testator
2. If no substitution is provided, the vacant

share shall go to the co-heir by right of
accretion if the requisites are present and the
testator has not provided to the contrary
3. If the requisites of accretion are not present

or when the testator provides that no
accretion shall take place, the vacant portion
shall pass to the legal heirs if no substitute
has been designated
Note: In testamentary succession, representation takes place

only with respect to the legitime; it does not take place with
respect to what is voluntarily given by will

CIVIL LAW
CAPACITY TO SUCCEED BY WILL OR INTESTACY institution to which such priest or minister may
belong;
PERSONS INCAPABLE OF SUCCEEDING
3. A Guardian with respect to testamentary
Q: What does absolute incapacity to succeed mean? dispositions given by a ward in his favor before
the final accounts of the guardianship have been
A: It means the person is incapacitated to succeed in any approved, even if the testator should die after the
form, whether by testate or intestate succession. approval thereof; nevertheless, any provision
made by the ward in favor of the guardian when
Q: Who are absolutely incapacitated to succeed? the latter is his ascendants, descendant, brother,
sister, or spouse, shall be valid;
A:
1. Those not living at the time of death of the testator 4. Any attesting Witness to the execution of a will,
2. Those who cannot be identified. (Art. 845) the spouse, parents, or children, or any one
3. Those who are not permitted by law to inherit. (Art. claiming under such witness, spouse, parents, or
1027) children;
When do you determine capacity? Note: Numbers 1 to 4 do not apply to legitimes.
A: GR: In order to judge the capacity of the heir, devisee, or 5. Any Physician, surgeon, nurse, health officer or
legatee, his qualification at the time of the death of the druggist who took care of the testator during his
decedent shall be the criterion. last illness;
XPN: If the institution, devise or legacy should be Note: Number 5 is an absolute disqualification.
conditional (suspensive condition), the capacity is to be
determined not only at the time of the death of the 6. Individuals, associations and corporations not
decedent but also at the time of the fulfillment of the permitted by law to inherit.
condition.
Q: What are the requisites for a priest to be disqualified
Q: What is the governing law in determining the capacity from inheriting?
to succeed of the heir, devisee, legatee?
A:
A: Law of the nation of the decedent 1. The will was made during the last illness of the
testator;
RELATIVE INCAPACITY TO SUCCEED 2. The spiritual ministration must have been extended
during the last illness;
Q: What is relative incapacity to succeed? 3. The will was executed during or after the spiritual
ministration.
A: It means the person is incapacitated to succeed because
of some special relation to the testator Q: Who are covered by this disqualification to inherit?
Q: What are the grounds for relative incapacity to A: PMRC

succeed? 1. Priest who heard the confession of the testator
during his last illness;
A: UMA 2. Minister of the gospel who extended spiritual aid
1. Undue influence or interest (Art. 1027) to him during the same period;
2. Morality or public policy (Art. 739) 3. Relatives of such priest or minister of the gospel
3. Acts of unworthiness (Art. 1032) within the fourth degree; or
4. The Church, order, chapter, community,
Q: Who are incapacitated to succeed based on undue organization, or institution to which such priest or
influence or interest? minister may belong;
A: PRG-WPI Q: If the confession was made before the will was made,
1. The Priest who heard the confession of the can the priest inherit upon the death of the sick person, if:
testator during his last illness, or the minister of
the gospel who extended spiritual aid to him 1. The priest is the son of the sick person?
during the same period; 2. The priest was the sick person’s brother?
2. The Relatives of such priest or minister of the A:

gospel within the fourth degree, the church, 1. Yes. He can get the legitime.
order, chapter, community, organization, or

2013 GOLDEN NOTES
SUCCESSION
Note: A priest is incapacitated to succeed when the
confession is made prior to or simultaneously with the making Q: Upon whom does the disqualification apply?
of a will.
A: PSN-HD
The disqualification applies only to testamentary 1. Physician;
dispositions. 2. Surgeon;
3. Nurse;
2. Yes. He can inherit by intestacy. 4. Health officer; or
5. Druggist
Note: Despite this apparent restriction to Christian ministers,
this applies to all spiritual ministers, e.g., Buddhist monks.
Q: Who are incapacitated to succeed based on morality or
public policy?
Reason: It is conclusively presumed that the spiritual
minister used his moral influence to induce or
A: ACO
influence the sick person to make a testamentary
1. Persons guilty of Adultery or concubinage with
disposition in his favor.
the testator at the time of the making of the will
2. Persons guilty of the same Criminal offense, in
Q: When is a guardian disqualified from inheriting by
consideration thereof
testate succession?
3. A public officer or his wife, descendants and
ascendants, by reason of his Office (Art. 1028 in
A: GR: The disqualification applies when the disposition is
relation to Art. 739)
made before the approval of final accounts or lifting of
guardianship.
Q: Who are incapacitated to succeed by reason of
unworthiness?
XPN: It does not apply even when the disposition is
made after the guardianship began or before it is
A: P-CAV-AFP-F
terminated when the guardian is an: ADBSS
1. Parents who have abandoned their children or
1. Ascendant
induced their daughters to lead a corrupt or
2. Descendant
immoral life, or attempted against their virtues
3. Brother
2. Persons Convicted of an attempt against the life
4. Sister
of the testator, his or her spouse, descendants or
5. Spouse
ascendants
3. Persons who Accused the testator of a crime for
Q: Who are covered by the disqualification on attesting
which the law prescribes imprisonment for six
witnesses?
years or more, if the accusation has been found
to be groundless
A:
4. Heir of full age who, having knowledge of the
1. Attesting witness to the execution of a will;
Violent death of the testator, should fail to report
2. The attesting witness’:
it to an officer of the law within a month unless
a. spouse
the authorities have already taken action.
b. parents
c. children
Note: This prohibition shall not apply to cases wherein,
3. Any one claiming under such witness, spouse, parents, according to law, there is no obligation to make an
or children; accusation.
Q: Will the disqualification still apply if there are other 5. Person convicted of Adultery or concubinage with
witnesses to the will? the spouse of the testator
6. Person who by Fraud, violence, intimidation, or
A: It depends upon compliance with the requisite number undue influence should cause the testator to
of witnesses. If, notwithstanding the disqualified witness, make a will or to change one already made
the number of witnesses is sufficient, the former is not 7. Person who by the same means Prevents another
disqualified. from making a will, or from revoking one already
made, or who supplants, conceals, or alters the
Q: What must be present for the disqualification of latter's will
physician to apply? 8. Person who Falsifies or forges a supposed will of
the decedent. (Art. 1032)
A:
1. The will was made during the last illness Note: Grounds 1, 2, 3, 5 and 6 are the same grounds as in
2. The sick person must have been taken cared of during disinheritance.
his last illness Numbers 6, 7 and 8 cover six (6) acts which relate to wills:
3. Medical attendance was made 1. Causing the testator to make a will
4. The will was executed during or after he was being 2. Causing the testator to change an existing will
taken care of 3. Preventing the decedent from making a will
4. Preventing the testator from revoking his will

CIVIL LAW
5. Supplanting, concealing, or altering the testator's will.

6. Falsifying or forging a supposed will of the decedent. Q: When is inheritance deemed accepted?
UNWORTHINESS vs. DISINHERITANCE A:

1. When the heir sells, donates, or assigns his rights
Q: Distinguish Unworthiness from Disinheritance 2. When the heir renounces it for the benefit of one or
more heirs
A: 3. When renunciation is in favor of all heirs
DISINHERITANCE UNWORTHINESS indiscriminately for consideration
Effects on the inheritance 4. Other tacit acts of acceptance
Exclusion from the entire a. Heir demands partition of the inheritance
Deprivation of a compulsory inheritance. However, b. Heir alienates some objects of the inheritance
heir of his legitime. donations inter vivos are c. Acts of preservation or administration if, through
not affected. such acts, the title or capacity of the heir has
Effects of pardon or reconciliation been assumed
Reconciliation between the d. Under Art. 1057, failure to signify acceptance or
offender and the offended repudiation within 30 days after an order of
If the testator pardons the distribution by the probate court.
party deprives the latter of
act of unworthiness, the
the right to disinherit, and
cause of unworthiness shall Q: What are the ways by which the repudiation of the
renders ineffectual any
be without effect. inheritance, legacy or devise may be made?
disinheritance that may
have been made.
A:
Manner of reconciliation or pardon
1. By means of a public instrument
Express or implied 2. By means of an authentic instrument
Grounds 3. By means of a petition presented to the court having
There are grounds for disinheritance which are also causes jurisdiction over the testamentary or intestate
for incapacity by reason of unworthiness. proceedings.
Effect of subsequent reconciliation if disinheritance has Q: What is the effect of repudiation if an heir is both a
already been made on any of the grounds which are also testate and legal heir?
causes for unworthiness
The moment the testator uses one of the causes for A: If an heir is both a testate and legal heir, the repudiation
unworthiness as a ground for disinheritance, he thereby of the inheritance as a testate heir, he is understood to
submits it to the rule on disinheritance. (Rabuya, Civil Law have repudiated in both capacities. However, should he
Reviewer, pp. 644-649; 704-708) repudiate as a legal heir, without knowledge of being a
testate heir, he may still accept the inheritance as a testate
ACCEPTANCE AND REPUDIATION OF THE INHERITANCE heir.
Q: What are the three principal characteristics of Q: What is the remedy if the heir repudiates the
acceptance and repudiation? inheritance to the prejudice of his creditors?
A: A: If the heir repudiates the inheritance to the prejudice of

1. It is voluntary and free his own creditors, the latter may petition the court to
2. It is retroactive authorize them to accept it in the name of the heir.
3. Once made, it is irrevocable
Requisites:
Q: What are the requisites of acceptance and repudiation? 1. The heir who repudiated his inheritance must
have been indebted at the time when the
A: repudiation is made
1. Certainty of the death of the decedent 2. The heir-debtor must have repudiated his
2. Certainty of the right of inheritance inheritance according to the formalities
prescribed by law
Q: How may inheritance be accepted? 3. Such act of repudiation must be prejudicial to the
creditor or creditors.
A: 4. There must be judicial authorization (Art. 1052)
1. Express acceptance – through a public or private
instrument
2. Tacit acceptance – through acts by which the intention
to accept is necessarily implied or which one would
have no right to do except in the capacity of an heir.

2013 GOLDEN NOTES
SUCCESSION
PARTITION AND DISTRIBUTION OF ESTATE 4. An action to enforce warranty among co-heirs must be
brought within 10 years from the date the right of
Q: What is partition and distribution? cause of action accrues.
A: It is the separation, division and assignment of a thing

held in common among those to whom it may belong. Q: What are the effects of the inclusion of an intruder in
partition?
Q: Who may effect partition?
A:
A: The partition may be effected either: 1. Between a true heir and several mistaken heirs –
1. By the decedent himself during his lifetime by an partition is void.
act inter vivos or by will 2. Between several true heirs and a mistaken heir –
2. By a third person designated by the decedent or transmission to mistaken heir is void.
by the heirs themselves
3. By a competent court in accordance with the New 3. Through the error or mistake; share of true heir is
Rules of Court allotted to mistaken heir – partition shall not be
rescinded unless there is bad faith or fraud on the part
Q: Who can demand partition? of the other persons interested, but the latter shall be
proportionately obliged to pay the true heir of his
A: Any: share.
1. Compulsory heir
2. Voluntary heir
3. Legatee or devisee
4. Person who has acquired an interest in the estate
Q: When partition cannot be demanded?
A: Partition cannot be demanded when: PAPU

1. Expressly Prohibited by testator for a period not
more than 20 years
2. Co-heirs Agreed that estate not be divided for
period not more than 10 years, renewable for
another 10 yrs
3. Prohibited by law
4. To partition estate would render it Unserviceable
for use for which it was intended
Q: Can an estate be partitioned inter vivos?
A: Yes. Such partition shall be respected, insofar as it does

not prejudice the legitime of compulsory heirs. (See Art.
1080)
Q: What are the effects of partition?
A:
1. Confers upon each heir the exclusive ownership of
property adjudicated.
2. After the partition, the co-heirs shall be reciprocally
bound to warrant the title to (warranty against
eviction) and the quality of (warranty against hidden
defects) each property adjudicated.
3. The obligation of warranty shall cease in the following
cases:
a. When the testator himself has made the partition
unless his intention was otherwise, but the
legitime shall always remain unimpaired.
b. When it has been expressly stipulated in the
agreement of partition, unless there has been bad
faith.
c. When the eviction was due to a cause subsequent
to the partition, or has been caused by the fault
of the distributee of the property.

CIVIL LAW
PARTNERSHIP the view of dividing them among the contracting

parties.
CONTRACT OF PARTNERSHIP
Q: What are the essential features of partnership?
Q: What is partnership?
A:
A: A contract whereby two or more persons bind 1. There must be a valid contract
themselves to contribute money, property, or industry to a 2. The parties (two or more persons) must have
common fund, with the intention of dividing the profits legal capacity to enter into the contract
among themselves (Art. 1767). 3. There must be a mutual contribution of money,
property, or industry to a common fund
Note: Two or more persons may also form a partnership for 4. The object must be lawful
the exercise of a profession (Art. 1767). 5. The primary purpose must be to obtain profits
and to divide the same among the parties (De
Q: Is the formation of a partnership an absolute right? Leon, Comments and Cases on Partnership,
Agency, and Trust, 2010 ed., p. 13)
A: To organize a corporation or a partnership that could
claim a juridical personality of its own and transact business Q: Jose entered into a verbal agreement with Francisco to
as such is not a matter of right but a privilege which may be form a partnership for the purchase of cascoes for a
enjoyed only under such terms as the State may deem proposed boat rental business. It was agreed that
necessary to impose (De Leon, Comments and Cases on Francisco would buy the cascoes and each partner is to
Partnership, Agency, and Trust, 2010 ed., p. 27) furnish such amount of money as he could, and that the
profits will be divided proportionately. After Francisco
Q: When does the contract of partnership commence? purchased a casco with the money advanced by Jose, they
undertook to draft the articles of partnership and embody
A: A partnership is a consensual contract; hence, it exists the same in an authentic document. However, they did
from the moment of the celebration of the contract by the not come to an agreement. So, Francisco returned the
partners. money advanced by Jose, which the latter received with
an express reservation of all his rights as a partner.
Q: What are the essential elements of a partnership? 1. Was there a partnership formed between Jose
and Francisco?
A: 2. If such partnership existed, was it terminated by
1. Agreement to contribute money, property or industry the receipt of Jose of the money he advanced?
to a common fund (mutual contribution to a common
stock); and A:
2. Intention to divide the profits among the contracting 1. Yes. Both elements in a contract of partnership exist:
parties (joint interest in the profits) (Evangelista v. a) mutual contribution to a common stock, and b) a
Collector of Internal Revenue, G.R. No. L-9996, Oct. 15, joint interest in the profits. If the contract contains
1987). these two elements, a partnership relation results, and
the law itself fixes the incidents of this relation if the
Q: What are the characteristics of a partnership? parties fail to do so. In this case, there was money
furnished by Jose and received by Francisco for the
A: BON-CC-PP purchase of the cascoes and there was also an
1. Bilateral – it is entered into by two or more intention to divide the profits proportionately
persons and the rights and obligations arising between them. Thus, there is a partnership by virtue
therefrom are always reciprocal of the verbal agreement between Jose and Francisco.
2. Onerous – each of the parties aspires to procure 2. No. There was no clear intent on the part of Jose, in
for himself a benefit through the giving of accepting the money, to relinquish his rights as a
something partner (Fernandez v. Dela Rosa, G.R. No. 413, Feb. 2,
3. Nominate – it has a special name or designation 1903).
in our law
4. Consensual – perfected by mere consent, upon Note: The partnership relation is not the contract itself, but the
the express or implied agreement of two or more result of the contract. The relation is evidenced by the terms of the
persons contract which may be oral or written, express or implied from the
acts and declarations of the parties, subject to the provisions of
5. Commutative – the undertaking of each of the
Articles 1771-1773 and to the Statute of Frauds (De Leon,
partners is considered as the equivalent of that of Comments and Cases on Partnership, Agency, and Trust, 2010 ed.,
the others p. 13).
6. Principal – it does not depend for its existence or
validity upon some other contracts Q: Discuss the so-called “Articles of Partnership.”
7. Preparatory – because it is entered into as a
means to an end, i.e. to engage in business or A: While partnership relation may be informally created
specific venture for the realization of profits with and its existence proved by manifestations of the parties, it

2013 GOLDEN NOTES
PARTNERSHIP
is customary to embody the terms of the association in a Q: Henry and Lyons are engaged in real estate business
written document known as “Articles of Partnership” and are co-owners of a parcel of land. Henry, with the
stating the name, nature or purpose and location of the consent of Lyons, mortgaged the property to raise the
firm, and defining, among others, the powers, rights, funds sufficient to buy and develop the San Juan Estate.
duties, and liabilities of the partners among themselves, Lyons expressed his desire not to be part of the
their contributions, the manner by which the profits and development project, but Henry, nevertheless, pursued
losses are to be shared, and the procedure for dissolving the business alone. When the business prospered, Lyons
the partnership (De Leon, Comments and Cases on demanded for a share in the business. Is Lyons entitled to
Partnership, Agency, and Trust, 2010 ed., p. 13). the shares in San Juan Estate?
Q: What does mean? A: No. Lyons himself manifested his desire not to be part of
the development project. Thus, no partnership was formed.
A: Under the Code of Commerce, cuentas en participacion The mortgage of the land was immaterial to the existence
means a sort of an accidental partnership constituted in of the partnership. It is clear that Henry, in buying the San
such a manner that its existence was only known to those Juan Estate, was not acting for any partnership composed
who had an interest in the same, there being no mutual of himself and Lyons, and the law cannot be distorted into a
agreement between the partners, and without a corporate proposition which would make Lyons a participant in this
name indicating to the public in some way that there were deal contrary to his express determination. (Lyons v.
other people besides the one who ostensibly managed and Rosenstock, G.R. No. 35469, Mar. 17, 1932)
conducted the business, governed under article 239 of the
Code of Commerce (Bourns v. Carman, G.R. No. L-2880, Q: Catalino and Ceferino acquired a joint tenancy over a
Dec. 4, 1906). parcel of land under a verbal contract of partnership. It
was stipulated that each of the said purchasers should pay
Q: What are the typical incidents of partnership? one-half of the price and that an equal division should be
made between them of the land thus purchased. Despite
A: Catalino’s demand for an equal division between them,
1. The partners share in profits and losses. (Arts. Ceferino refused to do so and even profited from the
1767,1797-98) fruits of the land. Are they partners or co-owners?
2. They have equal rights in the management and
conduct of the partnership business. (Art. 1803) A: They are co-owners because it does not appear that they
3. Every partner is an agent of the partnership, and entered into any contract of partnership but only for the
entitled to bind the other partners by his acts, for the sole purpose of acquiring jointly or by mutual agreement of
purpose of its business. (Art. 1818). He may also be the land under the condition that they would pay ½ of the
liable for the entire partnership obligations. price of the land and that it be divided equally between
4. All partners are personally liable for the debts of the them. (Gallemit v. Tabiliran, G.R. No. 5837, Sept. 15, 1911)
partnership with their separate property (Arts. 1816,
1822-24) except limited partners are not bound
beyond the amount of their investment (Art 1843).
5. A fiduciary relation exists between the partners. (Art.
1807)
6. On dissolution, the partnership is not terminated, but
continues until the winding up of partnership is
completed. (Art 1828)
Note: Such incidents may be modified by stipulation of the

partners subject to the rights of third persons dealing with
the partnership.
Q: Before there can be a valid contract of partnership, it is

essential that the contracting parties have the necessary
legal capacity to enter into the contract. Consequently,
any person who cannot give consent to a contract cannot
be a partner. Who are the persons who cannot give their
consent to a contract of partnership?
A:
1. Unemancipated minors;
2. Insane or demented persons;
3. Deaf-mutes who do not know how to write;
4. Persons who are suffering from civil interdiction;
and
5. Incompetents who are under guardianship

CIVIL LAW
Q: What are the distinctions between partnership, co-ownership and corporation?
A:
PARTNERSHIP CO-OWNERSHIP COPORATION
Creation
Created by contract or by mere
Created by law Created by law
agreement of the parties
Juridical Personality
Has juridical personality separate Has juridical personality separate
and distinct from that of each None and distinct from that of each
partner corporators
Purpose
Common enjoyment of a thing or Depends in Articles of
Realization of profits
right Incorporation (AOI)
Duration/ Term of Existence
10 years maximum (May be 50 years maximum, extendible for
No limitation extended by new agreement, Art. not more than 50 years in any one
494, Civil Code) instance
Number of incorporators
Minimum of 2 persons Minimum of 2 persons Minimum of 5 persons
Commencement of Juridical Personality
From the moment of execution of From the date of issuance of the
None
the contract of partnership certificate of incorporation
Disposal/ Transferability of Interest
Partner may not dispose of his Stockholder has a right to transfer
individual interest unless agreed Co-owner may freely do so shares without prior consent of
upon by all partners other stockholders
rd
Power to Act with 3 Persons
In absence of stipulation to
contrary, a partner may bind Co-owner cannot represent the Management is vested with the
partnership – each partner is co-ownership BOD
agent of partnership
Effect of Death
Death of a partner results in Death of co-owner does not Death of stockholder does not
dissolution of partnership necessarily dissolve co-ownership dissolve the corporation
Dissolution
May be dissolved at any time by
May be dissolved anytime by the Can only be dissolved with the
the will of any or all of the
will of any or all of the co-owners consent of the State
partners

2013 GOLDEN NOTES
PARTNERSHIP
Q: What is a joint venture?
Q: What are those that can be contributed by a partner?
A: An association of persons or companies jointly
undertaking some commercial enterprise; generally, all A:
contributes assets and share risks. It requires a community MONEY PROPERTY INDUSTRY
of interest in the performance of the subject matter, a right The term is to be The property The word “industry”
to direct and govern the policy in connection therewith, understood as contributed has been
and a duty which may be altered by agreement to share referring to may be real or interprered to
both in profits and losses. currency which is personal, mean the active
a legal tender in corporeal or cooperation, the
Q: What is the difference between a partnership and a the Philippines. incorporeal. work of the party
joint venture? Checks, drafts, Hence, credit associated, which
promissory notes such as may be either
A: payable to order, promissory personal manual
Partnership Joint Venture and other note or other efforts or
Transactions entered into mercantile evidence of intellectual, and for
documents are obligation or which he receives a
The duration of a partnership not money but even goodwill share in the profits
Limited to the period in
generally relates to a only may be (not merely salary)
which the goods are sold
continuing business of representatives of contributed, as of the business
or the project is carried on
various transactions of a money. There is they are
or a single transaction.
certain kind. no contribution of considered
money until they property
Nature have been
Permanent - partners are encashed
interested in carrying on (De Leon, Comments and Cases on Partnership, Agency, and
together of a general and Trust, 2010 ed., p. 19).
continuing business of a Temporary, although it
particular kind. may continue for a number Q: May a partnership be formed even if the common fund
of years. is comprised entirely of borrowed or loaned money? What
Note: A particular partnership would be the liability of the partners in such a case?
has a limited and temporary or
ad hoc nature, being confined to A: Yes. A partnership may be deemed to exist among
a single undertaking. parties who agree to borrow money to pursue a business
Firm Name and Liablities and to divide the profits or losses that may arise therefrom,
There must be a partnership even if it is shown that they have not contributed any
A firm name is not
or firm name under which capital of their own to a "common fund." Their contribution
necessary, thus the
the partnership shall may be in the form of credit or industry, not necessarily
participating persons can
operate. The names of the cash or fixed assets. Being partners, they are all liable for
transact business under
partners may appear in the debts incurred by or on behalf of the partnership. (Lim Tong
their own name and can be
firm name and the act of the Lim v. Philippine Fishing Gear Industries, Inc., G.R. No.
individually liable
partners will make the 136448, Nov. 3, 1999)
therefore.
partnership liable.
Corporation as partner SHARE IN PROFITS AND LOSSES
Corporation cannot enter Corporations can engage in
into a partnership contract, a joint venture with others Q: Is sharing of profits conclusive evidence of partnership?
thus it cannot be a partner through a contract of
by reason of public policy; agreement if the nature of A: The sharing in profits is merely presumptive and not
otherwise people other than the venture in line with the conclusive, even if cogent, evidence of partnership. There
its officers may be able to business of the corporation are numerous instances of parties who have a common
bind it (Albano, Civil Law and it is authorized in its interest in the parties and losses of an enterprise but who
Reviewer, 1998, p.570) charter. are not partners. Thus, if the division of profits is merely
Legal Personality used as guide to determine the compensation due to one of
the parties, such is not a partner (De Leon, Comments and
A partnership acquires Cases on Partnership, Agency, and Trust, 2010 ed., p. 25).
personality after following
the requisites required by Q: Mariano and Isabelo entered into a partnership
law. e.g. Art. 1771-1773 A joint venture has no legal agreement wherein they are to contribute P15,000 each
personality. for the purpose of printing 95,000 posters. Isabelo was
Note: SEC registration is not unable to print enough posters pursuant to the
required before a partnership
agreement, thus he executed in favor of Mariano a
acquires legal personality. (Art.
1768) promissory note in an amount equivalent to the
unrealized profit due to insufficient printing. The whole

CIVIL LAW
amount became due but Isabelo defaulted payment. Is Q: What are the rules regarding distribution of profits and
Mariano entitled to file a case for the recovery of the losses?
unrealized profit of the partnership?
A:
A: No. The essence of a partnership is to share in the profits 1. Distribution of profits
and losses, thus, Mariano should shoulder the losses with a. The partners share in the profits according to
Isabelo (Moran Jr., v. CA, G.R. No. L-59956, Oct. 31, 1984). their agreement
b. In the absence of such:
Q: Is it necessary for the parties to agree upon a system of i. Capitalist partner – in proportion to his
sharing losses? contribution
ii. Industrial partner – what is just and equitable
A: No, for the obligation is implied in the partnership under the circumstances
relation. If only the share of each partner in the profits has 2. Distribution of losses
been agreed upon, the share of each in the losses shall be a. The partners share in the losses
in the same proportion. according to their agreement
b. In the absence of such, according to
Note: The definition of partnership under Article 1767 refers to their agreement as to profits but the industrial
“profits” only and is silent as to “losses.” The reason is that the
partner shall not be liable for losses.
object of partnership is primarily the sharing of profits, while the
distribution of losses is but a “consequence of the same.” Be that
c. In the absence of profit agreement, in
as it may, the right to share in the profits carries with it the duty to proportion to his capital contribution, but the
contribute to the losses, of any. purely industrial partner shall not be liable for the
losses.
Q: To form a lending business, it was verbally agreed that
Noynoy would act as financier while Cory and Kris would Q: What is the rule regarding a stipulation which excludes
take charge of solicitation of members and collection of a partner in the sharing of profits and losses?
loan payments. They agreed that Noynoy would receive
70% of the profits while Cory and Kris would earn 15% A: GR: Stipulation is void but the partnership subsists
each. The parties executed the 'Articles of Agreement'
which formalized their earlier verbal agreement. Later, XPN: Industrial partner is not liable for losses [Art.
Noynoy filed a complaint against Cory and Kris for 1797(2)]. However, he is not exempted from liability
misappropriation of funds allegedly in their capacities as insofar as third persons are concerned.
Noynoy’s employees. In their answer, Cory and Kris
asserted that they were partners and not mere employees Note: If the industrial partner has contributed capital other
of Noynoy. What kind of relationship existed between the than his services, he shall also receive a share in the profits in
proportion to his capital.
parties?
A: A partnership was formed among the parties. The RULES TO DETERMINE EXISTENCE
"Articles of Agreement" stipulated that the signatories shall
Q: What are the rules to determine the existence of
share the profits of the business in a 70-15-15 manner, with
partnership?
Noynoy getting the lion's share. This stipulation clearly
proved the establishment of a partnership. (Santos v.
A:
Spouses Reyes, G.R. No.135813, Oct. 25, 2001)
1. Except as provided by Art. 1825 (partnership by
Q: Jose conveyed his lots in favor of his four sons in order estoppel), persons who are not partners as to each
for them to build their residences. His sons sold the lots other are not partners as to third persons;
since they found the lots impractical for residential 2. Co-ownership or co-possession does not of itself
purposes because of high costs of construction. They establish a partnership, whether such co-owners or co-
derived profits from the sale and paid income tax. The possessors do or do not share any profits made by the
sons were required to pay corporate income tax and use of the property;
income tax deficiency, on the theory that they formed an 3. The sharing of gross returns does not of itself establish
unregistered partnership or joint venture taxable as a a partnership, whether or not the persons sharing
corporation. Did the siblings form a partnership? them have a joint or common right or interest in any
property from which the returns are derived;
A: No. The original purpose was to divide the lots for 4. The receipt by a person of a share of the profits of a
residential purposes. If later, they found out that it is not business is prima facie evidence that he is a partner in
feasible to build their residences on the lots, they can the business, but no such inference shall be drawn if
dissolve the co-ownership by reselling said lots. The division such profits were received in payment:
on the profit was merely incidental to the dissolution of the a. As a debt by installments or otherwise;
co-ownership which was in the nature of things a b. As wages of an employee or rent to a landlord;
temporary state (Obillos, Jr. v. CIR, G.R. No. L-68118, Oct. c. As an annuity to a widow or representative of a
29, 1985) deceased partner;

2013 GOLDEN NOTES
PARTNERSHIP
d. As interest on a loan, though the amount of
payment vary with the profits of the business; HOW PARTNERSHIP IS FORMED
e. As the consideration for the sale for the sale of a
goodwill of a business or other property by Q: How are partnerships formed?
installments or otherwise. (Art. 1769)
A: It is created by agreement of the parties (consensual).
Note: In sub-paragraphs a – e, the profits in the business are not
shared as profits of a partner as a partner, but in some other Note: There is no such thing as a partnership created by law or by
respects or for some other purpose. operation or implication of law alone. (De Leon, Comments and
cases on Partnership, Agency and Trust, p. 13, 2005 ed.
Q: Who has the burden of proving the existence of a
partnership? Q: What are the formalities needed for the creation of a
partnership?
A: The burden of proving the existence of a partnership
rests on the party having the affirmative of that issue. The A: GR: No special form is required for its validity or
existence of a partnership must be proved and will not be existence (Art. 1771). The contract may be made orally or in
presumed. writing regardless of the value of the contributions.
Note: However, when a partnership is shown to exist, the XPN: If property or real rights have been contributed
presumption is that it continues in the absence of evidence to the to the partnership:
contrary, and the burden of proof is on the person asserting its 1. Personal property
termination (De Leon, Comments and Cases on Partnership,
a. Less than P3,000 – may be oral
b. P 3,000 or more – must be:
i. in a public instrument; and
Q: Can a person who alleges the existence of partnership
ii. registered with SEC (Art. 1772)
prove it by evidence of an agreement wherein the parties
call themselves partners?
Note: Even if the partnership is not
registered with SEC, the partnership is still
A: No, since use of the term “partner” in popular sense, or valid and possesses a distinct personality
as a matter of business convenience, will not necessarily (Paras, Civil Code of the Philippines
import an intention that a legal partnership should result. Annotated, Volume 5, p. 412, 1969 6th ed)
But while the use of “partnership” or “partners” in an
alleged oral agreement claimed to have constituted 2. Real property or real rights – must be:
partnership is not conclusive that partnership did not exist, a. in a public instrument (Art. 1771)
non-use of such terms is entitled to weight (De Leon, b. with an inventory of said property
Comments and Cases on Partnership, Agency, and Trust, i. signed by the parties
2010 ed., p. 43). ii. attached to the public instrument (Art.
1773)
EFFECTS OF AN UNLAWFUL PARTNERSHIP iii. registered in the Registry of Property of the province,
where the real property is found to bind third
Q: What are the consequences of a partnership formed for persons (Paras, p. 412)
an unlawful purpose?
3. Limited partnership – must be registered as such
A: with SEC, otherwise, it is not valid as a limited
1. The contract is void ab initio and the partnership partnership but may still be considered a general
never existed in the eyes of the law partnership with juridical personality (Paras, Civil
2. The profits shall be confiscated in favor of the Code of the Philippines Annotated, Volume 5, p.
th
government 412, 1969 6 ed)
3. The instruments or tools and proceeds of the
crime shall also be forfeited in favor of the Note: An agreement to enter in a partnership at a
government future time, which “by its terms is not performed within
4. The contributions of the partners shall not be a year from the making thereof” is covered by the
Statute of Frauds. [Art. 1403(2)] Such agreement is
confiscated unless they fall under No.3 (De Leon,
unenforceable unless the same be in writing or at least
Comments and Cases on Partnership, Agency, and evidenced by some note or memorandum therof
Trust, 2010 ed., p. 57). subscribed by the parties. (De Leon, Comments and
Cases on Partnership, Agency and Trusts, 2010 ed., p.
Q: Is judicial decree necessary to dissolve an unlawful 63)
partnership?
Q: If the requirements under Art. 1773, as regards
A: No, however, it may sometimes be advisable that a contribution of real property to a partnership, has not
judicial decree of dissolution be secured for the been complied with, what is the status of the partnership?
convenience and peace of mind of the parties (De Leon,
Comments and Cases on Partnership, Agency, and Trust, A: The contract of partnership is void. Nonetheless, a void
2010 ed., p. 57-58). partnership under Art. 1773, in relation to Art. 1771, may

CIVIL LAW
still be considered by the courts as an ordinary contract as derived therefrom as a common fund with the intention
regards the parties thereto from which rights and to produce profits for them in proportion to their
obligations to each other may be inferred and enforced respective shares in the inheritance as determined in a
(Torres v. CA, G.R. No. 134559, Dec. 9 1999) project of partition. What is the effect of such agreement
on the existing co-ownership?
Note: Torres v. CA does not involve third persons.
A: The co-ownership is automatically converted into a
Q: What must be done in order that the partnership may partnership. From the moment of partition, A and B, as
be effective as against third persons whenever immovable heirs, are entitled already to their respective definite shares
property is contributed? of the estate and the income thereof, for each of them to
manage and dispose of as exclusively his own without the
A: To be effective against third persons, the transfer of real intervention of the other heirs, and, accordingly, he
property to the partnership must be duly registered in the becomes liable individually for all the taxes in connection
Registry of Property of the province or city where the therewith.
property contributed is located. (Art. 1771)
If, after such partition, an heir allows his shares to be held
Q: Can there be a partnership based on a verbal
in common with his co-heirs under a single management to
agreement, and without such agreement being registered
be used with the intent of making profit thereby in
with SEC?
proportion to his share, there can be no doubt that, even if
no document or instrument were executed for the purpose,
A: Yes. Article 1772 requires that partnerships with a capital
for tax purposes, at least, an unregistered partnership is
of P3,000 or more must register with SEC. However, this
formed (Ona v. Commissioner of Internal revenue, 45 SCRA
registration requirement is not mandatory. Article 1768
74 [1972]).
explicitly provides that the partnership retains its juridical
personality even if it fails to register. The failure to register
Q: What is the limitation on the parties’ freedom to
the contract of partnership does not invalidate the same as
choose the transaction or transactions they will engage
among the partners, so long as the contract has the
in?
essential requisites, because the main purpose of
registration is to give notice to third parties, and it can be
A: The only limitation is that the object must be lawful and
assumed that the members themselves knew of the
for the common benefit of the members. The limitation
contents of their contract. Non-compliance with this
arises not only from the express provisions of the law, but
directory provision of the law will not invalidate the
from the general principles of morality and justice (De Leon,
partnership.
Comments and Cases on Partnership, Agency, and Trust,
A partnership may be constituted in any form, except 2010 ed., p. 56).
where immovable property of real rights are contributed
thereto, in which case a public instrument shall be PARTNERSHIP TERM
necessary. Hence, based on the intention of the parties, a
Q: When does a partnership commence to exist?
verbal contract of partnership may arise. (Sunga-Chan v.
Chua, G.R. No. 143340, Aug. 15, 2001)
A: A partnership begins from the moment of the execution
Note: Registration is merely for administration and licensing of the contract, unless it is otherwise stipulated (Art 1784).
purposes; hence, it shall not affect the liability of the partnership
and the members thereof to third persons. [Art. 1772, (2)] Note: Since under Artilce 1784, a partnership commences from the
time of execution of the contract if there is no contrary stipulation
as to the date of effectivity of the same, its registration in the
Q: A partnership was entered into between Mauricio and
Securities and Exchange Commission is not essential to give it
Severino to operate a fishpond. Neither partner juridical personality (De Leon, Comments and Cases on Partnership,
contributed a fishpond or a real right over any fish pond. Agency, and Trust, 2010 ed., p. 86)
Their capital contributions were in cash in the amount of
P1,000 each. While the partnership contract was done in a Q: What is a “future partnership”?
public instrument, no inventory of the fishpond to be
operated was attached in the said instrument. Is there a A: It is a kind of partnership where the partners may
valid contract of partnership? stipulate some other date for the commencement of the
partnership. Persons who enter into a future partnership do
A: Yes. There is a valid contract of partnership despite the not become partners until or unless the agreed time has
lack of inventory. The purpose of the partnership was not arrived or the contingency has happened (De Leon,
to engage in the fishpond business but to operate a Comments and Cases on Partnership, Agency and Trusts,
fishpond. Neither said fishpond nor a real right to any fish 2010 ed. p.87).
pond was contributed to the partnership (Agad v. Mabato,
G.R. No. L-24193, June 28, 1968). Note: As long as the agreement for a partnership remains inchoate
or unperformed, the partnership is not consummated (De Leon,
Q: A and B are co-owners of an inherited property. They Comments and Cases on Partnership, Agency, and Trust, 2010 ed.,
agreed to use the said common properties and the income p. 87).

2013 GOLDEN NOTES
PARTNERSHIP
industry or work during the existence of
Q: What is a partnership with a fixed term? the partnership
b. Particular partnership – It is one which
A: It is one in which the term of its existence has been has for its object, determinate things, their
agreed upon by the partners either: use and fruits, or a specific undertaking or
1. Expressly – there is a definite period the exercise of a profession or a vocation.
2. Impliedly – a particular enterprise or transaction (Art. 1783)
is undertaken
2. Liability of partners
Note: The mere expectation that the business would be successful a. General partnership – One where all
and that the partners would be able to recoup their investment is partners are general partners who are liable
not sufficient to create a partnership for a term. even with respect to their individual
properties, after the assets of the
Q: Can the partners fix any term in the partnership partnership have been exhausted (Paras,p.
contract? 411)
b. Limited partnership – One formed by 2
A: Yes, the partners may fix in their contract any term and or more persons having as members one or
they shall be bound to remain under such a relation for the more general partners and one or more
duration of the term. limited partners, the latter not being
personally liable for the obligations of the
Q: What is the effect when the fixed term has expired? partnership. (Art. 1843)
A: The expiration of the term fixed or the accomplishment 3. Duration

of the particular undertaking specified will cause the a. Partnership at will – Partnership for a
automatic dissolution of the partnership. particular undertaking or venture which may
be terminated anytime by mutual
Q: When is a partnership at will terminate? agreement; one for a fixed term or particular
undertaking which is continued by the
A: It may be lawfully terminated at any time by the express
partners after the termination of such term
will of all the partners or any of them.
or particular undertaking without express
agreement
Q: How is a partnership at will dissolved?
b. Partnership with a fixed period – The term
A: Any one of the partners may dictate the dissolution of a for which the partnership is to exist is fixed
partnership at will. or agreed upon or one formed for a
particular undertaking.
Note: The partner who wants the partnership dissolved must do so
in good faith, not that the attendance of bad faith can prevent the 4. Legality of existence
dissolution of the partnership, but to avoid the liability for damages a. De jure partnership – one which has
to other partners. complied with all the requirements for its
establishment
CLASSIFICATIONS OF PARTNERSHIP b. De facto partnership – one which has failed
to comply with all the legal requirements for
Q: State the classifications of partnership its establishment.
A: As to: 5. Representation to others

1. Object a. Ordinary or real partnership – one
a. Universal partnership which actually exist among the partners and
i. of all present property (Art. 1778) – the also as to third person.
partners contribute all the property which b. Ostensible or partnership by estoppel –
actually belongs to them to a common When two or more persons attempt to
fund, with the intention of dividing the create a partnership but fail to comply with
same among themselves, as well as all the legal personalities essential for juridical
profits they may acquire therewith. The personality, the law considers them as
following become the common fund of all partners, and the association is a partnership
the partners: insofar as it is favorable to third persons, by
property which belonged to each of the reason of the equitable principle of estoppel
partners at the time of the constitution (MacDonald et. al. v. Nat’l. City Bank of New
of the partnership York, G.R. No. L-7991, May 21, 1956)
profits which they may acquire from all
property contributed 6. Publicity
ii. of all profits (Art. 1780) – comprises all a. Secret partnership – Partnership that is not
that the partners may acquire by their known to many but only as to its partners.

CIVIL LAW
b. Notorious or open partnership – It is known line with the business authorized by its charter (Tuason v.
not only to the partners, but to the public as Bolaños, G.R. No. L-4935, May 28, 1954).
well.
Q: What are the different kinds of partners?
7. Purpose
a. Commercial or trading – One formed for the A:
transaction of business. A. Under the Civil Code
b. Professional or non-trading – One formed for
the exercise of a profession 1. Capitalist – Contributes money or property to the
common fund
Q: What are the different kinds of partnership under the 2. Industrial – Contributes only his industry or personal
Spanish Civil Code? service
rd
3. General – One whose liability to 3 persons extends to
A: his separate or personal property
rd
1. Sociedad Anonima – similar to anonymous partnership 4. Limited – One whose liability to 3 persons is limited
2. Sociedad Colectiva – general or collective partnership to his capital contribution
3. Sociedad de Cuentas en Participacion – joint account 5. Managing – Manages the affairs or business of the
partnership partnership; he may be appointed either in the articles
4. Sociedad Mercantile Regular Colectiva – mercantile of partnership or after the constitution of the
partnership company partnership. He is also known as general or real
5. Sociedad Leonila – partnership by which the entire partner.
profits should belong to some of the partners in 6. Liquidating – Takes charge of the winding up of
exclusion of the rest partnership affairs upon dissolution
7. Partner by estoppel – Is not really a partner but is
rd
Q: Who may be partners? liable as a partner for the protection of innocent 3
persons; he is also known as the partner by implication
A: GR: Any person capacitated to contract may enter into a or nominal partner or a quasi-partner
contract of partnership. 8. Continuing partner – Continues the business of a
partnership after it has been dissolved by reason of
XPNs: the admission of a new partner, retirement, death or
1. Persons who are prohibited from giving each expulsion of one of the partners
other any donation or advantage cannot enter 9. Surviving partner – Remains after a partnership has
into a universal partnership. (Art. 1782) been dissolved by death of any partner
10. Sub-partner – Is not a member of the partnership;
Note: A husband and wife, however, may enter into a contracts with a partner with reference to the latter's
particular partnership or be members thereof. (De Leon, share in the partnership
Comments and Cases on Partnership, Agency and Trusts,
2010 ed., p. 78)
B. Other Classifications
2. Persons suffering from civil interdiction
11. Ostensible – Takes active part and known to the
3. Persons who cannot give consent to a contract:
public as partner in the business, whether or not he
a. Minors
has an actual interest in the firm. Thus, he may be an
b. Insane persons
actual or a nominal partner.
c. Deaf-mutes who do not know how to write
12. Secret – Takes active part in the business but is
not known to be a partner by outside parties
Q: What is the principle of delectus personae?
13. Silent – Does not take any active part in the
business although he may be known to be a partner. If
A: This refers to the rule that is inherent in every
he withdraws from the partnership, he must give
partnership, that no one can become a member of the
notice to those persons who do business with the firm
partnership association without the consent of all the
to escape liability in the future
partners.
14. Dormant – Does not take active part in the
business and is not known or held out as a partner; the
Note: Even if a partner will associate another person in his share in
the partnership, the associate shall not be admitted into the term is also synonymous with a “sleeping partner”
partnership without the consent of all the partners, even if the 15. Original partner-one who is a member of the
partner having an associate should be a manager (Art. 1804). partnership from the time of its organization
16. Incoming patner- a person lately, or about to be,
Q: May a corporation enter into a partnership with taken into an existing partnership as a member
another corporation? 17. Retiring partner- one withdrawn from the
partnershop; a withdrawing partner
A: As a rule, it is illegal for two corporations to enter into a
partnership. Nevertheless, a corporation may enter into a
joint venture with another if the nature of the venture is in

2013 GOLDEN NOTES
PARTNERSHIP
Q: What are the relations created by a contract of determinate (De Leon, Comments and Cases on Partnership,
partnership? Agency, and Trust, 2010 ed., p. 76).
A: Q: What is particular partnership?

1. Partners-Partners
2. Partners-Partnership A: It is one which has for its object determinate things, their
3. Partnership-third persons with whom it contracts use or fruits, or a specific undertaking, or the exercise of a
4. Partners-third persons with whom partnership profession or vocation. (Art. 1783)
contracts.
Note: The fundamental difference between a universal partnership
UNIVERSAL vs. PARTICULAR and a particular partnership lies in the scope of their subject
matter or object. In the former, the object is vague and indefinite,
contemplating a general business with some degree of continuity,
Q: Distinguish the classes of universal partnership
while in the latter, it is limited and well-defined, being confined to
an undertaking of a single, temporary, or ad hoc nature (De Leon,
A: Comments and Cases on Partnership, Agency, and Trust, 2010 ed.,
ALL PROFITS ALL PRESENT PROPERTY p. 81).
What constitutes common property
Only usufruct of All properties actually Q: Is it required that the business of the partnership be
the properties of belonging to the partners are continuing in nature?
the partners contributed – they become
become common common property A: No. It may be inferred from Articles 1761 and 1783 that
property (owned by all of the partners the carrying on of a business of a continuing nature is not
and the partnership) essential to constitute partnership. An agreement to
As to profits as common property undertake a particular piece of work or a single transaction
As to profits from other or a limited number of transactions and immediately divide
sources: the resulting profits would seem to fall within the meaning
GR: Aside from the of the term “partnership” as used in the law (De Leon,
contributed properties, the Comments and Cases on Partnership, Agency, and Trust,
All profits profits of said property 2010 ed., p. 81).
acquired by the become common property
industry of the Q: J, P and B formed a limited partnership called Suter Co.,
partners become XPN: Profits from other with P as the general partner and J and B as limited
common sources may become common partners. J and B contributed P18,000 and P20,000
property if there is a stipulation to such respectively. Later, J and B got married and P sold his
(whether or not effect share of the partnership to the spouses which was
they were As to properties subsequently recorded in the SEC. Has the limited partnership been
obtained acquired: dissolved by reason of the marriage between the limited
through the GR: Properties subsequently partners?
usufruct acquired by inheritance,
contributed) legacy or donation, cannot be A: No. The partnership is not a universal but a particular
included in the stipulation one. As provided by law, a universal partnership requires
either that the object of the association must be all present
XPN: Only fruits thereof can property of the partners as contributed by them to a
be included in the stipulation common fund, or all else that the partners may acquire by
(Art. 1779) their industry or work. Here, the contributions were fixed
sums of money and neither one of them were industrial
Q: If the Articles of Universal Partnership fail to specify partners. Thus, the firm is not a partnership which the
whether it is one of all present property or of profits, what spouses are forbidden to enter into. The subsequent
shall be its nature? marriage cannot operate to dissolve it because it is not one
of the causes provided by law. The capital contributions
A: Articles of Universal Partnership entered into without were owned separately by them before their marriage and
specification of its nature only constitutes a universal shall remain to be separate under the Spanish Civil Code.
partnership of profits (Art. 1781), because it imposes lesser Their individual interest did not become common property
obligations on the partners, since they preserve the after their marriage. (Commissioner of Internal Revenue v.
ownership of their separate property. Suter, G.R. No. L-25532, Feb. 28, 1969)
Q: May future properties be contributed? GENERAL vs. LIMITED
A: As a general rule, future properties cannot be Q: What is general partnership?

contributed. The very essence of the contract of
partnership that the properties contributed be included in A: One where all partners are general partners who are
the partnership requires the contribution of things liable even with respect to their individual properties, after
the assets of the partnership have been exhausted (Paras,

CIVIL LAW
Civil Code of the Philippines Annotated, Volume 5, p. 411,

th
1969 6 ed)
Q: Who is a general partner?
A: One whose liability to third persons extends to his

separate property; he may be either a capitalist or an
industrial partner. (De Leon, Comments and Cases on
Partnership, Agency, and Trust, p. 77, 2005 ed) He is also
known as real partner.
Q: What are the distinctions between a general and a limited partner/partnership?
GENERAL LIMITED
Extent of Liability
Personally liable for partnership obligations Liability extends only to his capital contributions
Right in Management
When manner of management has not agreed upon,
all general partners have an equal right in the No participation in management
management of the business
Contribution
Contribute money, property or industry Contribute cash or property only, not services
If Proper Party to Proceedings By or Against Partnership
Not proper party to proceedings by/against
partnership, unless:
1. He is also a general partner; or
Proper party to proceedings by/against partnership
2. Where the object of the proceeding is to
enforce a limited partner’s right or liability to
the partnership
Assignment of Interest
Interest is not assignable without consent of other
Interest is freely assignable
partners
Firm Name
It must also operate under a firm name, followed by
the word “Limited.”
GR: The surname of a limited partner shall not

appear in the partnership name.
It must operate under a firm name, which may or XPNs:

may not include the name of one or more of the 1. It is also the surname of a general partner;
partners. 2. Prior to the time when the limited partner
became such, the business had been carried on
Note: Those, who, not being members of the partnership, under a name in which his surname appeared.
include their names in the firm name, shall be subject to the
liability of a partner. (Art. 1815) Note: A limited partner whose surname appears in a
partnership name is liable as a general partner to
partnership creditors who extend credit to the partnership
without actual knowledge that he is not a general partner.
(Art. 1846)
Prohibition to Engage in Other Business
The capitalist partner cannot engage for their own
account in any operation which is of the kind of
business in which the partnership is engaged, unless
there is a stipulation to the contrary No prohibition against engaging in business
If he is an industrial partner- in any business for

himself.

2013 GOLDEN NOTES
PARTNERSHIP
Effect of Death, Insolvency, Retirement, Insanity

Retirement, death, insolvency, insanity of general Does not have same effect; rights are transferred to
partner dissolves partnership legal representative
Creation
Created by the members after substantial
As a rule, it maybe constituted in any form, by
compliance in good faith of the requirements set
contract or conduct of the parties
forth by law
Composition / Membership
Composed of at least one general partner and one
Composed only of general partners
limited partner.
PROFESSIONAL PARTNERSHIP MANAGEMENT OF THE PARTNERSHIP
Q: What is a professional partnership? Q: What are the modes of appointment of a manager?
A: It is a partnership formed by persons for the sole A:

purpose of exercising their common profession, no part of Appointment through the Appointment Other Than in
the income of which is derived from engaging in any trade Articles of Partnership the Articles
or business. Power is irrevocable
without just or lawful cause
Q: In a professional partnership, who is deemed engaged
in the practice of profession? Note: Vote required for
removal of manager Power to act is revocable
A: It is the individual partners and not the partnership. 1. For just cause – Vote anytime, with or without
Thus, they are responsible for their own acts. of the controlling cause (should be done by
partners (controlling the controlling interest)
Q: What is prohibited in the formation of a professional financial interest)
partnership? 2. Without cause or for
unjust cause –
A: Partnership between lawyers and members of other Unanimous vote
profession or non-professional persons should not be Extent of Power
formed or permitted where any part of the partnership’s 1. If he acts in good faith,
employment consists of the practice of law (Canons of he may do all acts of
As long as he is a manager,
Professional Ethics). administration
he can perform all acts of
(despite opposition of
administration (if others
Q: What are the characteristics of a partnership for the his partners)
oppose, he can be removed)
practice of law? 2. If he acts in bad faith,
he cannot
A:
1. A duty of public service, of which the emolument is a Q: What is the scope of the power of a managing partner?
by-product;
2. A relation as an “officer of court” to the administration A: As a general rule, a partner appointed as manager has all
of justice involving thorough sincerity, integrity, and the powers of a general agent as well as all the incidental
reliability; powers necessary to carry out the object of the partnership
3. A relation to clients in the highest fiduciary degree; in the transaction of its business. The exception is when the
4. A relationship to colleagues at the bar characterized by powers of the manager are specifically restricted (De Leon,
candor, fairness, and unwillingness to resort to current Comments and Cases on Partnership, Agency, and Trust,
business methods of advertising and encroachment on 2010 ed., p. 119).
their practice, or dealing with their clients (In the
Matter of Petition for Authority to Continue Use of Note: A managing partner may not bind the partnership by a
Firm Name “Sycip, Salazar, etc.” / “Ozaeta Romulo, contract wholly foreign to its business.
etc.,” 92 SCRA 1 [1979], citing H.S. Drinker, Legal Ethics
[1953], pp4-5.) Q: What is the rule where there are two or more
managers?
Q: What is prohibited in the firm name of a partnership
for the practice of law? A:
Without specification of their respective duties and
A: In the selection and use of firm name, no false, without stipulation requiring unanimity of action
misleading, assumed, or trade names should be used GR: Each may separately execute all acts of
(Canons of Professional Ethics) administration (unlimited power to administer)
XPN: If any of the managers opposes, decision of the

CIVIL LAW
majority prevails intervened claiming entitlement to the proceeds from

Travellers. Who is entitled to the proceeds of the policy?
Note: In case of tie – Decision of the controlling interest (who are
also managers) shall prevail A: Tai Toing is entitled to the insurance proceeds. Arsenio
contracted the insurance policy on behalf of Tai Tong. As
With stipulation that none of the managing partners the managing partner of the partnership, he may execute
shall act without the consent of the others all acts of administration including the right to sue debtors
GR: Unanimous consent of all the managing partners of the partnership in case of their failure to pay their
shall be necessary for the validity of the acts and obligations when it became due and demandable. Or at the
absence or inability of any managing partner cannot be very least, Arsenio is an agent of the partnership. Being an
alleged. agent, it is understood that he acted for and in behalf of the
firm. (Tai Tong Chuache & Co. v. Insurance Commissioner,
XPN: Where there is an imminent danger of grave or G.R. No. L-55397, Feb. 29, 1988)
irreparable injury to the partnership.
Note: If refusal of partner is manifestly prejudicial to the interest of
Q: What is the rule when the manner of management has partnership, court’s intervention may be sought.
not been agreed upon?
COMPENSATION
A:
1. All partners shall be considered agents and whatever Q: Are partners entitled to compensation?
any one of them may do alone shall bind the
partnership, without prejudice to the provisions of Art. A: GR: In the absence of an agreement to the contrary,
1801. This right is not dependent on the amount or each member of the partner assumes the duty to give his
size of the partner’s capital contribution or services to time, attention, and skill to the management of its affairs,
the business. so far, at least, as may be reasonably necessary to the
success of the common enterprise; and for this service a
Note: If two or more partners have been entrusted with the share of the profits is his only compensation.
management of the partnership without specification of their
respective duties, or without a stipulation that one of them XPNS:
shall not act without the consent of all the others, each one 1. A partner engaged by his co-partners to perform services
may separately execute all acts of administration, but if any
not required of him in fulfillment of the duties which the
of them should oppose the acts of the others, the decision of
the majority shall prevail. In case of a tie, the matter shall be
partnership relation imposes and in a capacity other than
decided by the partners owning the controlling interest (Art. that of a partner
1801, Civil Code).
2. A contract for compensation may be implied if there is
2. None of the partners may, without the consent of the extraordinary neglect on the part of one partner to perform
others, make any important alteration in the his duties toward the firm’s business, thereby imposing the
immovable property of the partnership. (Art. 1803) entire burden on the remaining partner
Q: What is the rule in case where unanimity of action is 3. One partner may employ his co-partner to do work for
stipulated? him outside of and independent of the co-partnership, and
become personally liable therefor
A: The partners may stipulate that none of the managing
partners shall act without the consent of the others. 4. Where the services rendered are extra-ordinary
GR: In such a case, the unanimous consent of all the 5. Where one partner is entrusted with the management of
managing partners shall be necessary for the validity of the partnership business and devotes his whole time and
their acts. attention thereto, at the instance of the other partners who
are attending to their individual business and giving no time
XPN: Imminent danger of grave or irreparable injury for the or attention to the business of the firm (De Leon, Comments
partnership, in which case, a partner may act alone without and Cases on Partnership, Agency, and Trust, 2010 ed., p.
the consent of the partner who is absent or under 121).
disability, without prejudice to his liability for damages.
RIGHTS AND OBLIGATIONS OF PARTNERSHIP
Q: Azucena and Pedro acquired a parcel of land and a
building. Azucena obtained a loan from Tai Tong Co., Q: What are the relations created by a contract of
secured by a mortgage which was executed over the land partnership?
and building. Arsenio, representative of Tai Tong, insured
it with Travellers Multi Indemnity Corporation. The A: A contract of partnership gives rise to at least four
building and the contents thereof were razed by fire. distinct juridical relations, namely:
Travellers failed to pay the insurance. Hence, Azucena and
Pedro filed a case against Travellers wherein Tai Tong 1. Relations among the partners themselves

2013 GOLDEN NOTES
PARTNERSHIP
2. Relations of the partners with the partnership 4. Preserve said property with the diligence of a
3. Relations of the partnership with third persons with good father of a family, pending delivery to the
whom it contracts partnership
4. Relations of the partners with such third persons (De
Leon, Comments and Cases on Partnership, Agency, and 5. Indemnify the partnership for any damage caused
Trust, 2010 ed., p. 88). to it by the retention of the same or by the delay
in its contribution
Q: What are the responsibilities of a partnership to
partners? Q: What is “eviction”?
A: A: Under the law on sales, eviction shall take place

1. Refund the amounts disbursed by partner in whenever by a final judgment based on a right prior to the
behalf of the partnership plus corresponding sale or an act imputable to the vendor, the vendee is
interest from the time the expenses are made, deprived of the whole or a part of the thing purchased.
not from the date of demand. (e.g. loans and
advances made by a partner to the partnership Note: The obligation of warranty in case of eviction is in
aside from capital contribution); consequence of the character of the contract of partnership which
2. Answer for obligations the partner may have is onerous contract (De Leon, Comments and Cases on Partnership,
contracted in good faith in the interest of the
partnership business;
Q: Can the money or property contributed by a partner be
3. Answer for risks in consequence of its
withdrawn or disposed of by the contributing partner
management (Art. 1796)
without the consent or approval of the partnership or of
the other partners?
RIGHTS AND OBLIGATIONS OF PARTNERS AMONG
THEMSELVES
A: No, the money or property contributed by a partner
becomes the property of the partnership (De Leon,
Q: What are the obligations of partners among
themselves?
2010 ed., p. 92).
A:
Q: Is a partner who fails to perform the personal services
1. Contribution of property (Art. 1786)
which he has stipulated to render to the partnership,
2. Contribution of money and money converted to
liable to the other partners for the value of the services?
personal use (Art. 1788)
3. Prohibition in engaging in business for himself (Art.
A: Unless there is a special agreement to that effect, the
1789)
partners are not entitled to charge each other, or the
4. Contribute additional capital (Art. 1791)
partnership of which they are members, for their services in
5. Managing partner who collects debt (Art. 1792)
the firm business. The doctrine seems to be that every
6. Partner who receives share of partnership credit (Art.
partner is bound to work to the extent of his ability for the
1793)
benefit of the whole, without regard to the services of his
7. Damages to partnership (Art. 1794)
copartners, however unequal in value or amount, and to
8. Keep the partnership books (Art. 1805)
require a partner to account for the value of his services
9. Render information (Art. 1806)
would be, in effect, allowing compensation to the other
10. Accountable as fiduciary (Art. 1807)
members of the partnership for the services they rendered.
Q: What are the obligations of partners with respect to
Q: Who bears the risk of loss of things contributed?
contribution of property?
A:
A: To CAFPI
1. Contribute at the beginning of the partnership, or WHO BEARS THE
KIND OF PROPERTY / THING
at the stipulated time, the money, property or RISK?
industry which he may have promised to Specific and determinate things
contribute; which are not fungible where only partners
the use is contributed
2. Answer for eviction in case the partnership is Specific and determinate things the
deprived of the determinate property contributed ownership of which is transferred to
the partnership
3. Answer to the partnership for the Fruits of the partnership
property the contribution of which he delayed, Fungible things (Consumable)
from the date they should have been contributed Things brought and appraised in the
up to the time of actual delivery inventory

CIVIL LAW
Q: What is the effect if a partner fails to contribute the Q: What are the requisites before capitalist partners are
property which he promised to deliver to the partnership? compelled to contribute additional capital?
A: A:
1. Partner become ipso jure a debtor of the partnership 1. Imminent loss of the business of the partnership;
even in the absence of any demand (Art. 1786) 2. Majority of the capitalist partners are of the opinion
2. Remedy of the other partner is not rescission but that an additional contribution to the common fund
specific performance with damages and interest from would save the business;
defaulting partner from the time he should have 3. Capitalist partner refuses deliberately to contribute
complied with his obligation. (not due to financial inability);
4. There is no agreement to the contrary.
Note: When the capital or a part hereof which a partner is bound
to contribute consists of goods, their appraisal must be made in Note: The refusal of the partner to contribute his additional share
the manner prescribed in the contract of partnership, and in the reflects his lack of interest in the continuance of the partnership.
absence of stipulation, it shall be made by experts chosen by the (De Leon, Comments and Cases on Partnership, Agency and Trusts,
partners, and according to current prices, the subsequent changes 2010 ed. p. 101)
therof being for the account of the partnership. (Art. 1787)
It is to be noted that the industrial partner is exempted from the
Q: What are the rules regarding contribution of money to requirement to contribute an additional share. Having contributed
the partnership? his entire industry, he can do nothing further (De Leon, Comments
and Cases on Partnership, Agency, and Trust, 2010 ed., p. 101).
A: To CRIP
1. Contribute on the date fixed the amount the Q: What are the obligations of managing partners who
partner has undertaken to contribute to the collect his personal receivable from a person who also
partnership; owes the partnership?
2. Reimburse any amount the partner may have
taken from the partnership coffers and converted A:
to his own use; 1. Apply sum collected to 2 credits in proportion to their
3. Indemnify the partnership for the damages amounts
caused to it by delay in the contribution or 2. If he received it for the account of partnership, the
conversion of any sum for the partner’s personal whole sum shall be applied to partnership credit
benefit;
4. Pay the agreed or legal interest, if the partner Requisites:
fails to pay his contribution on time or in case he 1. At least 2 debts, one where the collecting partner
takes any amount from the common fund and is creditor and the other, where the partnership is
converts it to his own use. the creditor
2. Both debts are demandable
Q: What is the rule regarding obligation to contribute to 3. Partner who collects is authorized to manage and
partnership capital? actually manages the partnership
Note: The debtor is given the right to prefer payment of the credit
A: Unless there is a stipulation to the contrary, the partners
of the partner if it should be more onerous to him in accordance
shall contribute equal shares to the capital of the with his right to application of payment (Art. 1252; De Leon,
partnership (Art 1790). It is not applicable to an industrial Comments and Cases on Partnership, Agency and Trusts, 2010 ed.
partner unless, besides his services, he has contributed p. 103)
capital pursuant to an agreement.
Q: What is the reason for applying payment to partnership
Q: Is the capitalist partner required to contribute credit?
additional capital?
A: The law safeguards the interests of the partnership by
A: GR: A capitalist partner is not bound to contribute to the preventing the possibility of their being subordinated by
partnership more than what he agreed to contribute. the managing partner to his own interest to the prejudice
of the other partners (De Leon, Comments and Cases on
XPN: Partnership, Agency and Trusts, 2010 ed. p. 102)
1. in case of imminent loss of the business
2. there is no agreement to the contrary. Q: What is the obligation of a partner who receives share
of partnership credit?
He is under obligation to contribute an additional share
to save the venture. If he refuses to contribute, he shall A: To bring to the partnership capital what he has received
be obliged to sell his interest to the other partners. even though he may have given receipt for his share only.

2013 GOLDEN NOTES
PARTNERSHIP
Requisites:
1. A partner has received in whole or in part, his A: GR: Every partner is responsible to the partnership for
share of the partnership credit damages suffered by it through his fault and he cannot
2. Other partners have not collected their shares compensate them with the profits and benefits which he
3. Partnership debtor has become insolvent may have earned for the partnership by his industry.
Q: May a person who has not directly transacted in behalf XPN: The courts may equitably lessen this
of an unincorporated association be held liable for a responsibility if through the partner’s extraordinary
contract entered into by such association? efforts in other activities of the partnership, unusual
profit has been realized. (Art. 1794)
A: Yes. The liability for a contract entered into on behalf of
an unincorporated association or ostensible corporation Q: Can damages be subject to set-off?
may lie in a person who may not have directly transacted
on its behalf, but reaped benefits from that contract (Lim A: GR: The damages caused by a partner to the partnership
Tong Lim v. Philippine Fishing Gear Industries Inc., G.R. No. cannot be offset by the profits of benefits which he may
136448, Nov. 3, 1999) have earned for the partnership by his industry.
Q: What are the rules regarding the prohibition to engage Ratio: The partner has the obligation to secure benefits for
in another business? the partnership. Hence, the profits which he may have
earned pertain as a matter of law or right, to the
A: partnership
INDUSTRIAL PARTNER CAPITALIST PARTNER
Prohibition XPN: If unusual profits are realized through the
Relative: Cannot extraordinary efforts of the partner at fault, the courts may
Absolute: Cannot engage in business equitably mitigate or lessen his liability for damages. This
engage in business for (with same kind of rule rests on equity.
himself unless the business with the
partnership expressly partnership) for his Note that even in this case, the partner at fault is not
permits him to do so own account, unless allowed to compensate such damages with the profi ts
there is a stipulation to earned. The law does not specify as to when profi ts may be
the contrary considered “unusual.” The question depends upon the
Remedy circumstances of the particular case.
Capitalist partner, who
Capitalist partners may: Q: What is the duty of the partners with respect to
violated shall:
1. Exclude him from keeping the partnership books?
1. Bring to the
the firm
common fund any
2. Avail themselves of A: The partnership books shall be kept, subject to any
profits accruing to
the benefits which agreement between partners, at the principal place of
him from said
he may have business of the partnership. (Art. 1805)
transaction; and
obtained
2. Personally bears
3. Damages, in either Q: To whom does the duty to keep partnership belong?
all losses (Art.
case (Art. 1789)
1808)
A: The duty to keep true and correct books showing the
Q: Joe and Rudy formed a partnership to operate a car firm’s accounts, such books being at all times open to
repair shop in Quezon City. Joe provided the capital while inspection of all members of the firm, primarily rests on the
Rudy contributed his labor and industry. On one side of managing or active partner (De Leon, Comments and Cases
their shop, Joe opened and operated a coffee shop, while on Partnership, Agency, and Trust, 2010 ed., p. 131).
on the other side, Rudy put up a car accessories store.
May they engage in such separate businesses? Why? Q: What is the duty of the partners with respect to
(2001 Bar Question) information affecting the partnership?
A: Joe, the capitalist partner, may engage in the restaurant A: Partners shall render on demand true and full
business because it is not the same kind of business the information of all things affecting the partnership to:
partnership is engaged in. On the other hand, Rudy may not 1. any partner; or
engage in any other business unless their partnership 2. legal representative of any deceased or any
expressly permits him to do so because as an industrial partner under legal disability. (Art. 1806)
partner he has to devote his full time to the business of the
partnership (Art. 1789). Note: Under the same principle of mutual trust and confidence
among partners, there must be no concealment between them in
all matters affecting the partnership. The information, to be sure,
Q: What is the rule with regard to the obligation of a must be used only for a partnership purpose (De Leon, Comments
partner as to damages suffered by the partnership and Cases on Partnership, Agency, and Trust, 2010 ed., p. 134).
through his fault?

CIVIL LAW
Q: How are partners accountable to each other as formal accounting even before dissolution of the
fiduciary? partnership cannot be doubted. An example under No. (4)
of Article 1809 is where a partner has been assigned abroad
A: Every partner must account to the partnership for any for a long period of time in connection with the partnership
benefit, and hold as trustee for it any profits derived by him business and the partnership books during such period
without the consent of the other partners from any being in the possession of the other partners.
transaction connected with the formation, conduct, or
liquidation of the partnership or from any use by him of its Q: Describe the partners’ inspection rights.
property. (Art. 1807)
A: The partners’ inspection rights are not absolute. He can
Q: Does this duty terminate upon the dissolution of the be restrained from using the information gathered for
partnership? other than partnership purpose.
A: The duty of a partner to act with utmost good faith Q: What does the phrase “any reasonable hour” mean?
towards his copartners continues throughout the entire life
of the partnership even after dissolution for whatever A: Article 1805 declares that the rights of the partners with
reason or whatever means, until the relationship is respect to partnership books can be exercised at “any
terminated, i.e., the winding up of partnership affairs is reasonable hour.” This phrase has been interpreted to
completed (De Leon, Comments and Cases on Partnership, mean reasonable hours on business days throughout the
Agency, and Trust, 2010 ed., p. 134). year and not merely during some arbitrary period of a few
days chosen by the managing partners (De Leon, Comments
RIGHTS OF PARTNERS and Cases on Partnership, Agency, and Trust, 2010 ed., p.
132).
Q: What are the rights of partners among themselves?
Q: Describe the nature of action for accounting
A:
1. Right to reimbursement for amounts advanced to the A: An action for accounting, asking that the assets of the
partnership and to indemnification for risks in partnership be accounted for, sold and distributed
consequence of management (Art. 1796); according to the agreement of the partners is a personal
2. Right on the distribution of profits and losses (Art. action which under the Rules of Court, may be commenced
1797) and tried where the defendent resides or may be found or
3. Right to associate another person with him in his share where the plaintiffs reside, at the election of the latter.
without the consent of the other partners. (Art. 1804)
Note: The fact that the some of the assets of the partnership are
Note: Such partnership formed between a member of a real property does not materially change the nature of the action.
partnership and a third person for a division of the profits It is an action in personam because it is an action against a person
coming to him from the partnership enterprise is termed for the performance of a personal duty on his part, and not an
subpartnership. (De Leon, Comments and Cases on action in rem where the action is against the thing itself. It is only
Partnership, Agency and Trusts, 2010 ed. p. 129-130) incidental that part of the assets of the partnership subject to
accounting or under liquidation happen to be real property (De
4. Right to free access and to inspect and copy at any Leon, Comments and Cases on Partnership, Agency, and Trust, 2010
ed., p. 143).
reasonable hour the partnership books. (Art. 1805)
5. Right to formal account as to partnership affairs:
Q: What are the rules regarding distribution of profits and
a. If he is wrongfully excluded from the partnership
losses?
business or possession of its property by his co-
partners;
A:
b. If the right exist under the terms of any
1. Distribution of profits
agreement;
a. The partners share in the profits according to
c. As provided by Art. 1807;
their agreement
d. Whenever there are circumstances render it just
b. In the absence of such:
and reasonable.
i. Capitalist partner – in proportion to his
5. Right to have the partnership dissolved.
contribution
6. Property rights of a partner (Art. 1810)
ii. Industrial partner – what is just and equitable
under the circumstances
Q: Is a partner entitled to formal account during the
existence of the partnership?
Note: If the industrial partner has contributed capital
other than his services, he shall also receive a share
A: GR: During the existence of the partnership, a partner is in the profits in proportion to his capital.
not entitled to a formal account of partnership affairs.
2. Distribution of losses
XPNs: However, in the special and unusual situations a. The partners share in the losses according to
enumerated under Article 1809, the justifi cation for a their agreement

2013 GOLDEN NOTES
PARTNERSHIP
b. In the absence of such, according to their Such assignment does not grant the assignee the right
agreement as to profits to:
c. In the absence of profit agreement, in proportion a. To interfere in the management
to his capital contribution b. To require any information or account
c. To inspect partnership books
Q: What is the rule regarding a stipulation which excludes
a partner in the sharing of profits and losses? 2. Rights of assignee on partner’s interest:
a. To receive in accordance with his contract the
A: GR: Stipulation is void. profits accruing to the assigning partner
b. To avail himself of the usual remedies provided
XPN: Industrial partner is not liable for losses [Art. by law in the event of fraud in the management
1797(2)]. However, he is not exempted from liability c. To receive the assignor’s interest in case of
insofar as third persons are concerned. dissolution
d. To require an account of partnership affairs, but
Note: Loss is different from liability only in case the partnership is dissolved, and such
account shall cover the period from the date only
Q: What are the property rights of a partner? of the last account agreed to by all the partners
A: SIM Q: Rosa received from Jois money, with the express

1. Right in Specific partnership property obligation to act as Jois’ agent in purchasing local
2. Interest in the partnership (share in the profits cigarettes, to resell them to several stores, and to give Jois
and surplus) the commission corresponding to the profits received.
3. Right to participate in the Management However, Rosa misappropriated and converted the said
amount due to Jois to her personal use and benefit. Jois
Q: What are the related rights? filed a case of estafa against Rosa. Can Rosa deny liability
on the ground that a partnership was formed between her
A: and Rosa?
1. right to the partnership and to indemnification for risks
in consequence of management (Art. 1796.); A: No. Even assuming that a contract of partnership was
indeed entered into by and between the parties, when a
2. the right of access and inspection of partnership books partner receives any money or property for a specific
(Art. 1805.); purpose (such as that obtaining in the instant case) and he
later misappropriates the same, he is guilty of estafa.
3. the right to true and full information of all things (Liwanag v. CA, G.R. No. 114398, Oct. 24, 1997)
affecting the partnership (Art. 1806.);
OBLIGATIONS OF PARTNERSHIP/PARTNERS TO THIRD
4. the right to a formal account of partnership affairs under PERSONS
certain circumstances (Art. 1809.); and
rd
Q: What are the obligations of partners with regard to 3
5. the right to have the partnership dissolved also under persons?
certain conditions (Arts. 1830-1831) (De Leon, Comments
and Cases on Partnership, Agency, and Trust, 2010 ed., p. A:
148). 1. Every partnership shall operate under a firm name.
Persons who include their names in the partnership
Q: What is the nature of a partner's right in specific name even if they are not members shall be liable as a
partnership property? partner (Art. 1815)
2. All partners shall be liable for contractual obligations
A: of the partnership with their property, after all
1. Equal right to possession for partnership purposes partnership assets have been exhausted:
2. Right is not assignable, except in connection with a. Pro rata
assignment of rights of all partners in the same b. Subsidiary(Art. 1816)
property
3. Right is limited to his share of what remains after Note: Any stipulation against the liability laid down in
partnership debts have been paid Art. 1816 shall be void except as among the partners.
4. Right is not subject to attachment or execution except (Art. 1817)
on a claim against the partnership
5. Right is not subject to legal support 3. Partner as an agent of the partnership (Art. 1818)
4. Conveyance of real property belonging to the
Q: What are the effects of assignment of partner’s whole partnership (Art. 1819)
interest in the partnership? 5. Admission or representation made by any partner
concerning partnership affairs within the scope of his
A: authority is evidence against the partnership (Art.
1. Rights withheld from the assignee: 1820)

CIVIL LAW
6. Notice to partner of any matter relating to partnership Q: What are the remedies available to the creditors of a
affairs operates as notice to partnership except in case partner?
of fraud:
a. Knowledge of partner acting in the particular A:
matter acquired while a partner 1. Separate or individual creditors should first secure a
b. Knowledge of the partner acting in the particular judgment on their credit; and
matter then present to his mind 2. Apply to the proper court for a charging order
c. Knowledge of any other partner who reasonably subjecting the interest of the debtor-partner in the
could and should have communicated it to the partnership for the payment of the unsatisfied amount
acting partner (Art. 1821) of the judgment debt with interest thereon.
rd
7. Partners and the partnership are solidarily liable to 3
persons for the partner's tort or breach of trust (Art.
1822-24)
8. Liability of incoming partner is limited to:
a. His share in the partnership property for
existing obligations
b. His separate property for subsequent
obligations (Art. 1826)
9. Creditors of partnership are preferred in partnership
property & may attach partner's share in partnership
assets (Art. 1827)
Note: On solidary liability, Art. 1816 should be construed together

with Art. 1824 (in connection with Arts. 1822 and 1823). While the
liability of the partners is merely joint in transactions entered into
by the partnership, a third person who transacted with said
partnership may hold the partners solidarily liable for the whole
obligation if the case of the third person falls under Articles 1822
and 1823 (Munasque v. CA, G.R. No. L-39780, Nov. 11, 1985).
Q: What is the importance of having a firm name?
A: A partnership must have a firm name under which it will

operate. It is necessary to distinguish the partnership which
has a distinct and separate juridical personality from the
individuals composing the partnership and from other
partnerships and entities (De Leon, Comments and Cases on
Partnership, Agency, and Trust, 2010 ed., p. 166).
Note: The partners enjoy the utmost freedom in the selection of

the partnership name. As a general rule, they may adopt any firm
name desired. The firm name of a partnership may be that of an
individual partner, the surnames of all the partners, or the
surname of one or more of the members with the addition of “and
Company,” or it may consist of individual names wholly distinct
from the names of any of the members, or it may be a name purely
fanciful or fictitious. But whatever the firm name may be, the
signature of the firm name is, in law, the signature of the several
partners’ name.
Q: Discuss the liability for the inclusion of name in the first

name
A: Persons who, not being partners, include their names in

thefirm name do not acquire the rights of a partner but
under Article 1815, they shall be subject to the liability of a
partner (Art. 1816) insofar as third persons without notice
are concerned (De Leon, Comments and Cases on
Partnership, Agency, and Trust, 2010 ed., p. 169).

2013 GOLDEN NOTES
PARTNERSHIP
Q: What are the effects of the acts of partners acting as an agent of the partnership?
A:
ACTS OF A PARTNER EFFECT
With binding effect except:
1. When the partner so acting has in fact no
authority to act for the partnership in the
particular matter, and
Acts for apparently carrying on in the usual way 2. The person with whom he is dealing has
the business of the partnership knowledge of the fact that he has no such
authority.
(par.1, Art. 1818)
Do not bind partnership unless authorized by
Acts not in the ordinary course of business
other partners (par. 2, Art. 1818)
Acts of strict dominion or ownership:
1. Assigning partnership property in trust for
creditors ;
GR: One or more but less than all the partners
2. Disposing of goodwill of business;
have no authority
3. Doing an act which would make it impossible
to carry on the ordinary business of
XPNs:
partnership;
1. authorized by the other partners; or
4. Confessing a judgment;
5. Entering into a compromise concerning a
2. partners have abandoned the business
partnership claim or liability;
(par. 3, Art. 1818)
6. Submitting partnership claim or liability to
arbitration;
7. Renouncing claim of partnership
Partnership is not liable to 3rd persons having
Acts in contravention of a restriction on authority actual or presumptive knowledge of the
restriction (par. 4, Art. 1818)
Q: What is the effect of conveyance of a real property?
A:
TYPE OF CONVEYANCE EFFECT
Conveyance passes title but partnership can recover unless:
1.
a. Conveyance was done in the usual way of business, and
Title in the partnership’s name; b. The partner so acting has the authority to act for the
Conveyance in partnership name partnership; or
2. The property which has been conveyed by the grantee or a person
claiming through such grantee to a holder for value without
knowledge that the partner, in making the conveyance, has exceeded
his authority
Conveyance does not pass title but only equitable interest, provided:
Title in the partnership’s name;
1. Conveyance was done in the usual way of business, or
Conveyance in partner's name
2. The partner so acting has the authority to act for the partnership
Conveyance passes title but the partnership may recover such property if
the partners’ act does not bind the partnership:
Title in the name of 1 or more partners, and the
1. The partner so acting has no authority to act for the partnership,
record does not disclose the right of the
and
partnership; Conveyance in name of partner/s in
2. The person with whom he is dealing has knowledge of the fact
whose name title stands
unless the purchaser of his assignee, is a holder for value, without
knowledge
rd
Title in name of 1 or more or all partners or 3
Conveyance will only pass equitable interest, provided:
person in trust for partnership; Conveyance
1. The act is one within the authority of the partner, and
executed in partnership name or in name of
2. Conveyance was done in the usual way of the business
partners
Title in the names of all the partners;
Conveyance will pass all the rights in such property
Conveyance executed by all the partners

CIVIL LAW
PARTNERSHIP BY ESTOPPEL by any partner while it is in the custody of the

partnership.
Q: Who is a partner by estoppel?
Note: Partners are solidarily liable with the partnership for any
A: One who, by words or conduct does any of the following: penalty or damage arising from a partnership tort.
1. Directly represents himself to anyone as a partner
in an existing partnership or in a non-existing DISSOLUTION
partnership
2. Indirectly represents himself by consenting to Q: Distinguish dissolution, winding up and termination.
another representing him as a partner in an
existing partnership or in a non-existing Dissolution Winding up Termination
partnership A change in Point in time
the relation of when all
Q: What are the elements before a partner can be held the partners Settling the partnership
liable on the ground of estoppel? caused by any partnership affairs are
partner business or wound up or
A: ceasing to be affairs after completed;
1. Defendant represented himself as partner or is associated in dissolution the end of the
represented by others as such, and did not carrying on partnership
deny/refute such representation. the business. life
2. Plaintiff relied on such representation. It is that point
3. Statement of defendant is not refuted. in time when
the partners
Q: What are the liabilities in case of estoppel? cease to carry
It signifies the
on the
It is the final end of the
A: business
step after partnership
When Partnership is Liable together. It
dissolution in life. It takes
represents the
If all actual partners consented to the representation, the place after
demise of a
then the liability of the person who represented termination of both
partnership.
himself to be a partner or who consented to such the dissolution and
Thus, any time
representation and the actual partner is considered a partnership. winding up
a partner
partnership liability have occurred.
leaves the
When Liability is PRO RATA business, the
When there is no existing partnership and all those partnership is
represented as partners consented to the dissolved.
representation, then the liability of the person who
represented himself to be a partner and all who made Q: What are the causes of dissolution?
and consented to such representation, is joint or pro-
rata A:
1. Without violating the agreement:
When Liability is SEPARATE
a. Termination of the definite term or specific
When there is no existing partnership and not all but undertaking
only some of those represented as partners b. Express will of any partner in good faith, when
consented to the representation, or none of the there is no definite term and no specified
partnership in an existing partnership consented to undertaking
such representation, then the liability will be separate c. Express will of all partners (except those who
have assigned their interests or suffered them to
Q: When is there a partnership tort? be charged for their separate debts) either before
or after the termination of any specified term or
A: Where: particular undertaking
1. by any wrongful act or omission of any partner, d. Expulsion of any partner in good faith of a
acting in the ordinary course of business of the member
partnership or with authority of his co-partners, 2. Violating the agreement
loss or injury is caused to any person, not being a 3. Unlawfulness of the business
partner in the partnership; 4. Loss
2. one partner, acting within the scope of his a. Specific thing promised as contribution is lost or
apparent authority, receives money or property perished before delivery
from a third person, and misapplies it; or b. Loss of a specific thing contributed before or after
3. the partnership, in the course of its business, delivery, if only the use of such is contributed
receives money or property, and it is misapplied

2013 GOLDEN NOTES
PARTNERSHIP
Note: The partnership shall not be dissolved by the loss completing transactions begun but not then finished
of the thing when it occurs after the partnership has (Art. 1832).
acquired the ownership thereof.
Note: Subject to the qualifications set forth in Articles 1833
5. Death of any of the partners and 1834 in relation to Article 1832:
6. Insolvency of any partner or of the partnership 1. In so far as the partners themselves are concerned – The
7. Civil interdiction of any partner authority of any partner to bind the partnership by a
8. By decree of court under Art. 1831 new contract is immediately terminated when the
a. a partner has been declared insane or of unsound dissolution is not by the Act, Insolvency, or Death of a
partner (AID).
mind
2. When the dissolution is by the act, insolvency, or death,
b. a partner becomes in any other way incapable of the termination of authority depends upon whether or
performing his part of the partnership contract not the partner had knowledge or notice of dissolution
c. a partner has been guilty of such conduct as tends (Art. 1833).
to affect prejudicially the carrying on of the
business Q: The articles of co-partnership provide that in case of
d. a partner willfully or persistently commits a death of one partner, the partnership shall not be
breach of the partnership agreement dissolved but shall be continued by the deceased partner’s
e. the business of the partnership can only be heirs. When H, a partner, died, his wife, W, took over the
carried on at a loss management of some of the real properties with
f. other circumstances render a dissolution permission of the surviving partner, X, but her name was
equitable not included in the partnership name. She eventually sold
these real properties after a few years. X now claims that
Q: What are the effects of dissolution? W did not have the authority to manage and sell those
properties as she was not a partner. Is the sale valid?
A:
1. Partnership is not terminated A: Yes. The widow was not a mere agent, because she had
2. Partnership continues for a limited purpose become a partner upon her husband's death, as expressly
3. Transaction of new business is prohibited (De Leon, provided by the articles of co-partnership, and by
Comments and Cases on Partnership, Agency, and authorizing the widow to manage partnership property X
Trust, p. 229, 2005 ed) recognized her as a general partner with authority to
administer and alienate partnership property. It is
Note: The dissolution of a partnership must not be understood in immaterial that W's name was not included in the firm
the absolute and strict sense so that at the termination of the name, since no conversion of status is involved, and the
object for which it was created the partnership is extinguished,
articles of co-partnership expressly contemplated the
pending the winding up of some incidents and obligations of the
partnership, but in such case, the partnership will be reputed as admission of the partner's heirs into the partnership.
existing until the juridical relations arising out of the contract are (Goquiolay v. Sycip, G.R. No. L-11840, Dec. 16, 1963)
dissolved (Testate of Motta v. Serra, G.R. No. L-22825, Feb. 14,
1925). Q: What is the liability of a partner where the dissolution
is caused by the act, death or insolvency of a partner?
Dissolution does not automatically result in the termination of the
legal personality of the partnership, nor the relations of the A: GR: Each partner is liable to his co-partners for his share,
partners among themselves who remain as co-partners until the
of any liability created by any partner for the partnership,
partnership is terminated (De Leon, Comments and Cases on
Partnership, Agency, and Trust, p. 29, 2005 ed). as if the partnership had not been dissolved.
Q: Can a partner be expelled from the partnership? XPNs: Partners shall not be liable when:
1. the dissolution, being by act of any partner, the
A: In the absence of an express agreement to that effect, partner acting for the partnership had knowledge
there exists no right or power of any member, or even a of the dissolution; or
majority of the members, to expel all other members of the 2. the dissolution, being by the death or insolvency
firm at will. Nor can they at will forfeit the share or interest of a partner, the partner acting for the
of a member or members and compel him or them to quit partnership had knowledge or notice of the death
the fi rm, even paying what is due him (De Leon, Comments or insolvency (Art. 1833)
and Cases on Partnership, Agency, and Trust, 2010 ed., p.
227). Q: After the dissolution of a partnership, can a partner still
bind the partnership?
Q: What is the effect of dissolution on the authority of a
partner? A: GR: Yes. A partner continues to bind partnership even
after dissolution in the following cases:
A: GR: The partnership ceases to be a going concern 1. Transactions to wind up partnership affairs or to
complete transactions unfinished at dissolution;
XPN: The partner’s power of representation is 2. Transactions which would bind partnership if
confined only to acts incident to winding up or dissolution had not taken place, provided the
other party/obligee:

CIVIL LAW
a. Had extended credit to partnership prior to 1. Those to creditors, in the order of priority as
dissolution; AND Had no knowledge/notice provided by law, except those to limited partners
of dissolution; or on account of their contributions, and to general
b. Did not extend credit to partnership; Had partners
known partnership prior to dissolution; AND 2. Those to limited partners in respect to their share
Had no knowledge/notice of dissolution/fact of the profits and other compensation by way of
of dissolution not advertised in a newspaper income on their contributions
of general circulation in the place where 3. Those to limited partners in respect to the capital
partnership is regularly carried on. of their contributions
4. Those to general partners other than for capital
XPNs: Partner cannot bind the partnership anymore and profits
after dissolution where dissolution is due to 5. Those to general partners in respect to profits
unlawfulness to carry on business. 6. Those to general partners in respect to capital
(Art. 1863)
XPN to XPN: Winding up of partnership affairs
1. Partner has become insolvent Note: Subject to any statement in the certificate or to subsequent
2. Act is not appropriate for winding up or for agreement, limited partners share in the partnership assets in
completing unfinished transactions respect to their claims for capital, and in respect to their claims for
profits or for compensation by way of income on their contribution
3. Completely new transactions which would bind
respectively, in proportion to the respective amounts of such
the partnership if dissolution had not taken claims.
place with third persons in bad faith.
4. Partner is unauthorized to wind up partnership WINDING UP
affairs, except by transaction with one who:
a. Had extended credit to partnership prior to Q: What takes place during the winding up of the
dissolution; AND Had no knowledge or notice partnership?
of dissolution; or
b. Did not extend credit to partnership prior to A: It is during this time after dissolution that partnership
dissolution; Had known partnership prior to business or affairs are being settled. (De Leon, Comments
dissolution; AND Had no knowledge/notice and Cases on Partnership, Agency, and Trust, p. 229, 2005
of dissolution/fact of dissolution not ed)
advertised in a newspaper of general
circulation in the place where partnership is Q: What are the ways of winding up?
regularly carried on.
A: The winding up of the dissolved partnership may be
Q: Does the dissolution of a partnership discharge existing done either:
liability of a partner?
1. Judicially, under the control and direction of the proper
A: GR: No. court upon cause shown by any partner, his legal
representative, or his assignee; or
XPN: Said liability is discharged when there is an 2. Extrajudicially, by the partners themselves without
agreement between: intervention of the court (De Leon, Comments and Cases on
1. Partner himself; Partnership, Agency, and Trust, 2010 ed., p. 247).
2. Person/s continuing the business; and
3. Partnership creditors Q: What is the nature of the action for liquidation?
Q: Discuss the liability of the estate of a deceased partner A: An action for the liquidation of a partnership is a
personal one; hence, it may be brought in the place of
A: In accordance with Article 1816, the individual property residence of either the plaintiff or the defendant (De Leon,
of a deceased partner shall be liable for all obligations of Comments and Cases on Partnership, Agency, and Trust,
the partnership incurred while he was a partner. Note that 2010 ed., p. 247).
the individual creditors of the deceased partner are to be
preferred over partnership creditors with respect to the Q: Who are the persons authorized to wind up?
separate property of said deceased partner (De Leon,
Comments and Cases on Partnership, Agency, and Trust, A:
2010 ed., p. 245). 1. Partners designated by the agreement
2. In the absence of such, all partners who have not
Q: What is the order of priority in the distribution of wrongfully dissolved the partnership
assets during the dissolution of a limited partnership? 3. Legal representative of last surviving partner who is
not insolvent
A: In setting accounts after dissolution, the liabilities of the
partnership shall be entitled to payment in the following Note: The court may, in its discretion, after considering all the facts
order: and circumstances of the particular case, appoint a receiver to

2013 GOLDEN NOTES
PARTNERSHIP
wind up the partnership affairs where such step is shown to be to d. To possess partnership property should
the best interests of all persons concerned. they decide to continue the business
2. Rights of partner who has wrongfully caused the
An insolvent partner does not have the right to wind up
dissolution:
partnership affairs (De Leon, Comments and Cases on Partnership,
Agency, and Trust, 2010 ed., p. 247). a. If the business is not continued by the other
partners, to have the partnership property
Q: What are the rights of liquidating partner? applied to discharge its liabilities and to
receive in cash his share of the surplus less
A: damages caused by his wrongful dissolution
1. Make new contracts b. If the business is continued:
2. Raise money to pay partnership debts i. To have the value of his interest in the
3. Incur obligations to complete existing contracts or partnership at the time of the
preserve partnership assets dissolution, less any damage caused by
4. Incur expenses necessary in the conduct of the dissolution to his co-partners,
litigation (De Leon, Comments and Cases on ascertained and paid in cash, or secured
Partnership, Agency, and Trust, 2010 ed., p. 248). by bond approved by the court; and
ii. To be released from all existing and
Q: What is the order of payment in winding up? future liabilities of the partnership
A: Q: What are the rights of injured partner where

1. Those owing to creditors other than partners partnership contract is rescinded?
2. Those owing to partners other than for capital or profits
3. Those owing to partners in respect of capital A:
4. Those owing to partners in respect to profits [Art. 1839 1. Right of a lien on, or retention of, the surplus of
(2)] partnership property after satisfying partnership
liabilities for any sum of money paid or contributed by
Q: What is the “doctrine of marshalling of assets”? him;
2. Right of subrogation in place of partnership creditors
A: after payment of partnership liabilities; and
1. Partnership creditors have preference in partnership 3. Right of indemnification by the guilty partner against
assets all debts and liabilities of the partnership.
2. Separate or individual creditors have preference in
separate or individual properties Q: How are the accounts settled between partners?
3. Anything left from either goes to the other.
A:
Q: What are the rights of a partner where dissolution is 1. Assets of the partnership include:
not in contravention of the agreement? a. Partnership property (including goodwill)
b. Contributions of the partners
A: Unless otherwise agreed, the rights of each partner are 2. Order of application of the assets:
as follows: a. First, those owing to partnership creditors
1. To have the partnership property applied to b. Second, those owing to partners other than for
discharge the liabilities of partnership; and capital and profits such as loans given by the
2. To have the surplus, if any, applied, to pay in cash partners or advances for business expenses
the net amount owing to the respective partners. c. Third, those owing for the return of the capital
contributed by the partners
Q: What are the rights of a partner where dissolution is in d. Fourth, the share of the profits, if any, due to
contravention of the agreement? each partner
A: The rights of a partner vary depending upon whether he Q: A partnership was formed with Magdusa as the
is the innocent or guilty partner. manager. During the existence of the partnership, two
1. Rights of partner who has not caused the partners expressed their desire to withdraw from the firm.
dissolution wrongfully: Magdusa determined the value of the partners share
a. To have partnership property applied for which were embodied in the document drawn in the
the payment of its liabilities and to receive handwriting of Magdusa but was not signed by all of the
in cash his share of the surplus partners. Later, the withdrawing partners demanded for
b. To be indemnified for the damages caused payment but were refused. Considering that not all
by the partner guilty of wrongful partners intervened in the distribution of all or part of the
dissolution partnership assets, should the action prosper?
c. To continue the business in the same
name during the agreed term of the A: No. A partner’s share cannot be returned without first
partnership, by themselves or jointly with dissolving and liquidating the partnership, for the return is
others dependent on the discharge of creditors, whose claims
enjoy preference over those of the partner, and it is self-

CIVIL LAW
evident that all members of the partnership are interested accounting, etc. Emnace counters, contending that
in its assets and business, and are entitled to be heard in prescription has set in. Decide.
the matter of the firm’s liquidation and distribution of its
property. The liquidation prepared by Magdusa not signed A: Prescription has not yet set in. Prescription of the said
by the other partners is not binding on them. (Magdusa v. right starts to run only upon the dissolution of the
Albaran, G.R. No. L-17526, June 30, 1962) partnership when the final accounting is done. Contrary to
Emnace’s protestations, prescription had not even begun to
Since the capital was contributed to the partnership, not to run in the absence of a final accounting. The right to
partners, it is the partnership that must refund the equity demand an accounting accrues at the date of dissolution in
of the retiring partners. Since it is the partnership, as a the absence of any agreement to the contrary. When a final
separate and distinct entity that must refund the shares of accounting is made, it is only then that prescription begins
the partners, the amount to be refunded is necessarily to run (Emnace v. CA, G.R. No. 126334, Nov. 23, 2001).
limited to its total resources. In other words, it can only pay
out what it has in its coffers, which consists of all its assets. Q: Pauline, Patricia and Priscilla formed a business
(Villareal v. Ramirez, G.R. No. 144214, July 14, 2003) partnership for the purpose of engaging in neon
advertising for a term of five (5) years. Pauline
Q: What is partner’s lien? subsequently assigned to Philip her interest in the
partnership. When Patricia and Priscilla learned of the
A: The right of every partner to have the partnership assignment, they decided to dissolve the partnership
property applied, to discharge partnership liabilities and before the expiration of its term as they had an
surplus assets, if any, distributed in cash to the respective unproductive business relationship with Philip in the past.
partners, after deducting what may be due to the On the other hand, unaware of the move of Patricia and
partnership from them as partners. Priscilla but sensing their negative reaction to his
acquisition of Pauline’s interest, Philip simultaneously
Q: What are the effects when the business of a dissolved petitioned for the dissolution of the partnership. Is the
partnership is continued? dissolution done by Patricia and Priscilla without the
consent of Pauline or Philip valid? Explain (1995 Bar
A: Question).
1. Creditors of old partnership are also creditors of the
new partnership who continues the business of the old A: Under Art 1830(1)(c), the dissolution by Patricia and
one without liquidation of the partnership affairs. Priscilla is valid and did not violate the contract of
2. Creditors have an equitable lien on the consideration partnership even though Pauline and Philip did not consent
paid to the retiring/deceased partner by the purchaser thereto. The consent of Pauline is not necessary because
when retiring/deceased partner sold his interest she had already assigned her interest to Philip. The consent
without final settlement with creditors. of Philip is also not necessary because the assignment to
3. Rights of retiring/estate of deceased partner: him of Pauline’s interest did not make him a partner, under
a. To have the value of his interest ascertained as of Art. 1813.
the date of dissolution; and
b. To receive as ordinary creditor the value of his Q: Does Philip have any right to petition for the
share in the dissolved partnership with interest or dissolution of the partnership before the expiration of its
profits attributable to use of his right, at his specified term? Explain (1995 Bar Question)
option.
A: No, Philip has no right to petition for dissolution because
Note: The right to demand on accounting of the value of his he does not have the standing of a partner. (Art. 1813)
interest accrues to any partner or his legal representative after
dissolution in the absence of an agreement to the contrary. LIMITED PARTNERSHIP
Prescription begins to run only upon the dissolution of the
partnership, when the final accounting is done. Q: What is limited partnership?
Q: Who are the persons required to render an account? A: One formed by two or more persons having as members
one or more general partners and one or more limited
A: partners, the latter not being personally liable for
1. Winding up partner; partnership debts (Art. 1843)
2. Surviving partner; and
3. Person or partnership continuing the business Q: What are the characteristics of limited partnership?
Q: Emnace and Tabanao decided to dissolve their A:

partnership in 1986. Emnace failed to submit the 1. It is formed by compliance with the statutory
statement of assets and liabilities of the partnership, and requirements.
to render an accounting of the partnership's finances. 2. One or more general partners control the business and
Tabanao’s heirs filed against Emnace an action for are personally liable to creditors.

2013 GOLDEN NOTES
PARTNERSHIP
3. One or more limited partners contribute to the capital
and share in the profits but do not participate in the Q: When may a certificate or articles of limited
management of the business and are not personally partnership be amended?
liable for partnership obligations beyond their capital
contributions. A:
4. The limited partners may ask for the return of their 1. It must fall under the following changes and
capital contributions under conditions prescribed by conditions:
law. a. There is a change in the name of the partnership
5. Partnership debts are paid out of common fund and or in the amount or character of the contribution
the individual properties of general partners of any limited partner
b. A person is substituted as a limited partner
HOW LIMITED PARTNERSHIP IS FORMED/AMENDED c. An additional limited partner is admitted
d. A person is admitted as a general partner
Q: What are the essential requirements for the formation e. A general partner retires, dies, becomes insolvent
of limited partnership? or insane, or is sentenced to civil interdiction and
the business is continued under Article 1860
A: f. There is a change in the character of the business
1. Certificate of articles of limited partnership which of the partnership
states the matters enumerated in Art. 1844, must be g. There is a false or erroneous statement in the
signed and sworn; and certificate
2. Certificate must be filed for record in the office of the h. There is a change in the time as stated in the
SEC. certificate for the dissolution of the partnership
or for the return of a contribution
Note: Strict compliance with legal requirements is not necessary. It i. A time is fixed for the dissolution of the
is sufficient that there is substantial compliance in good faith. If partnership, or the return of a contribution, no
there is no substantial compliance, the partnership becomes time having been specified in the certificate
general partnership as far as third persons are concerned, in which
j. The members desire to make a change in any
the member are liable as general partners. (Jo Chun v. Pacific
Commercial Co., G.R. No. 19892, Sept. 6, 1923) other statement in the certificate in order that it
shall accurately represent the agreement among
Q: Does a limited partnership have a personality separate them (Art. 1864)
and distinct from that of the partners? What are the 2. Must be signed and sworn to by all of the members
consequences of such? including the new members if some added; in case of
substitution, the assigning limited partner must also
A: Yes. The personality of a limited partnership being sign.
different from that of its members, it must, on general 3. Must be recorded in the SEC
principle, answer for, and suffer, the consequence of its
acts as such an entity capable of being the subject of rights Q: When does a general partner need consent or
and obligations. If the limited partnership failed to pay its ratification of all the limited partners?
obligations, this partnership must suffer the consequences
of such a failure, and must be adjudged insolvent. (Campos A: When he:
Rueda & Co. v. Pacific Commercial Co., et. al, G.R. No. L- 1. does any act in contravention of the certificate;
18703, Aug. 28, 1922) . 2. does any act which would make it impossible to
carry on the ordinary business of the partnership;
Q: What are the business reasons and purposes of statutes 3. confesses judgment against partnership;
authorizing limited partnerships? 4. possesses partnership property / assigns rights in
specific partnership property other than for
A: partnership purpose;
1. Secure capital from others for one’s business and 5. admits person as general partner;
still retain control 6. admits person as limited partner – unless
2. Share in profits of a business without risk of authorized in certificate; or
personal liability 7. continues business with partnership property on
3. Associate as partners with those having business death, retirement, civil interdiction, insanity or
skill (De Leon, Comments and Cases on insolvency of general partner unless authorized in
Partnership, Agency, and Trust, 2010 ed., p. 279). the certificate.
Q: When is the certificate or articles of limited partnership RIGHTS AND OBLIGATIONS OF A LIMITED PARTNER
cancelled?
Q: What are the specific rights of a limited partner?
A:
1. When the partnership is dissolved A: To:
2. When all the limited partners ceased to be such (Art. 1. have partnership books kept at principal place of
1864) business;
2. inspect/copy books at reasonable hours;

CIVIL LAW
3. have on demand true and full information of all Q: What are the requirements for the admission of a
things affecting partnership; substituted limited partner?
4. have formal account of partnership affairs
whenever circumstances render it just and A:
reasonable; 1. All the members must consent to the assignee
5. ask for dissolution and winding up by decree of becoming a substituted limited partner or the limited
court; partner, being empowered by the certificate must give
6. receive share of profits/other compensation by the assignee the right to become a limited partner;
way of income; and 2. The certificate must be amended in accordance with
7. receive return of contributions, provided the Art. 1865; and
partnership assets are in excess of all its liabilities. 3. The certificate as amended must be registered in the
SEC.
Q: What are the liabilities of a limited partner?
Q: What is the basis of preference given to limited
A: partners over other limited partners?
AS CREDITOR AS TRUSTEE
Specific property stated as contributed A: Priority or preference may be given to some limited
Deficiency in
but not yet contributed/ wrongfully partners over other limited partners as to the:
contribution 1. return of their contributions;
returned
Money/other property wrongfully paid/ 2. their compensation by way of income; or
Unpaid 3. any other matter.
conveyed to him on account of his
contribution
contribution
Note: In the absence of such statement in the certificate, even if
there is an agreement, all limited partners shall stand on equal
Q: What transactions are allowed or prohibited in a
footing in respect of these matters.
limited partnership?
Q: What are the requisites for return of contribution of a
A:
limited partner?
1. Allowed
a. Granting loans to partnership
A:
b. Transacting business with partnership
1. All liabilities of the partnership have been paid or if
c. Receiving pro rata share of partnership assets
they have not yet been paid, the assets of the
with general creditors if he is not also a general
partnership are sufficient to pay such liabilities;
partner
2. The consent of all the members (general and limited
2. Prohibited
partners) has been obtained except when the return
a. Receiving/holding partnership property as
may be rightfully demanded; and
collateral security
3. The certificate of limited partnership is cancelled or
b. Receiving any payment, conveyance, release from
rd amended
liability if it will prejudice right of 3 persons
Q: When is the return of contribution of a limited partner
Note: The prohibition is not absolute because there is no
prohibition if the partnership assets are sufficient to discharge a matter of right?
partnership liabilities to persons not claiming as general or limited
partners. A: When all liabilities of the partnership, except liabilities to
general partners and to limited partners on account of their
Q: Who is a substituted limited partner? contributions, have been paid or there remains property of
the partnership sufficient to pay them and the certificate is
A: A person admitted to all the rights of a limited partner cancelled or so amended as to set forth the withdrawal or
who has died or assigned his interest in the partnership reduction:
1. on the dissolution of the partnership;
Q: What are the rights and liabilities of a substituted 2. upon the arrival of the date specified in the
limited partner? certificate for the return; or
3. after the expiration of 6 month notice in writing
A: GR: He has all the rights and powers and is subject to all given by him to the other partners if no time is
the restrictions and liabilities of his assignor. fixed in the certificate for the return of the
contribution or for the dissolution of the
XPN: Those liabilities which he was ignorant of at the partnership.
time that he became a limited partner and which could
not be ascertained from the certificate Note: Even if a limited partner has contributed property, he has
only the right to demand and receive cash for his contribution. The
exceptions are:
1. When there is stipulation to the contrary in the
certificate; or

2013 GOLDEN NOTES
PARTNERSHIP
2. When all the partners (general and limited partners) Q: What is the effect of retirement, death, civil
consent to the return other than in the form of cash interdiction, insanity or insolvency of a partner?
Q: What are the liabilities of a limited partner? A:

1. General partner - the partnership is dissolved (Art.
A: 1860) unless the business is continued by the
1. To the partnership - Since limited partners are not remaining general partners:
principals in the transaction of a partnership, their a. Under the right stated in the certificate; or
liability as a rule, is to the partnership, not to the b. With the consent of all the partners.
creditors of the partnership. The general partners 2. Limited partner - the partnership is not dissolved
cannot, however waive any liability of the limited except all limited partners cease to be such.
partners to the prejudice of such creditors.
Q: What are the rights of the executor/administrator on
2. To the partnership creditors and other partners the death of the limited partner?
a. A limited partner is liable for partnership obligations A:

when he contributed services instead of only money or 1. All the rights of a limited partner for the purpose of
property to the partnership settling his estate
b. When he allows his surname to appear in the firm 2. To have the same power as the deceased had to
name constitute his assignee as substituted limited partner.
c. When he fails to have a false statement in the
certificate corrected, knowing it to be false Q: What is the order of priority in the distribution of
d. When he takes part in the control of the business assets during the dissolution of a limited partnership?
e. When he receives partnership property as collateral
security, payment, conveyance, or release in fraud of A: In setting accounts after dissolution, the liabilities of the
partnership creditors partnership shall be entitled to payment in the following
f. When there is failure to substantially comply with the order:
legal requirements governing the formation of limited 1. Those to creditors, in the order of priority as
partnerships provided by law, except those to limited partners
on account of their contributions, and to general
3. To separate creditors partners
2. Those to limited partners in respect to their share
As in a general partnership, the creditor of a limited partner of the profits and other compensation by way of
may, in addition to other remedies allowed under existing income on their contributions
laws, apply to the proper court for a charging order 3. Those to limited partners in respect to the capital
subjecting the interest in the partnership of the debtor of their contributions
partner for the payment of his obligation. (De Leon, 4. Those to general partners other than for capital
Comments and cases on Partnership, Agency and Trust, and profits
2010, pp. 306-307) 5. Those to general partners in respect to profits
6. Those to general partners in respect to capital
Q: What are the requisites for waiver or compromise of (Art. 1863)
liabilities?
Note: Subject to any statement in the certificate or to subsequent
A: The waiver or compromise: agreement, limited partners share in the partnership assets in
1. is made with the consent of all partners; and respect to their claims for capital, and in respect to their claims for
2. does not prejudice partnership creditors who profits or for compensation by way of income on their contribution
extended credit or whose claims arose before the respectively, in proportion to the respective amounts of such
claims.
cancellation or amendment of the certificate.
Q: Is limited partner, not a proper party to proceedings?
Q: When may a limited partner have the partnership
dissolved?
A: GR: A limited partner is not a proper party to
proceedings:
A:
1. By a partnership
1. When his demand for the return of his contribution is
2. Against a partnership
denied although he has a right to such return; or
2. When his contribution is not paid although he is
XPNs:
entitled to its return because the other liabilities of the
1. If he is also a general partner.
partnership have not been paid or the partnership
2. Where the object is to enforce a limited partner’s
property is insufficient for their payment.
right against or liability to the partnership. (Art.
1866)

CIVIL LAW
SUMMARY OF RIGHTS AND OBLIGATIONS OF PARTNERS
GENERAL PARTNER LIMITED PARTNER

Rights
1. Right in specific partnership property
2. Interest in the partnership (share in the profits and
surplus) 1. To have partnership books kept at principal place of
3. Right to participate in the management business
4. Right to associate another person with him in his share 2. To inspect/copy books at reasonable hours
without the consent of other partners (sub-partnership) 3. To have on demand true and full information of all things
5. Right to inspect and copy partnership books at any affecting partnership
reasonable hour. 4. To have formal account of partnership affairs whenever
6. Right to a formal account as to partnership affairs (even circumstances render it just and reasonable
during existence of partnership) 5. To ask for dissolution and winding up by decree of court
a. if he is wrongfully excluded from partnership business 6. To receive share of profits/other compensation by way of
or possession of its property by his co-partners. income
b. if right exists under the terms of any agreement. 7. To receive return of contributions, provided the
c. as provided in Art. 1807 partnership assets are in excess of all its liabilities
d. whenever the circumstances render it just and
reasonable.
Obligations
Obligations of partners among themselves
1. Contribution of property
To the partnership
2. Contribution of money and money converted to personal
use
Since limited partners are not principals in the transaction of a
3. Prohibition in engaging in business for himself
partnership, their liability as a rule, is to the partnership, not to
4. Contribute additional capital
the creditors of the partnership. The general partners cannot,
5. Managing partner who collects debt
however waive any liability of the limited partners to the
6. Partner who receives share of partnership credit
prejudice of such creditors.
7. Damages to partnership
8. Render information
9. Accountable as fiduciary
rd
Obligations of partners to 3 persons
1. Every partnership shall operate under a firm name.

Persons who include their names in the partnership name
even if they are not members shall be liable as a partner
2. All partners shall be liable for contractual obligations of
the partnership with their property, after all partnership
To the partnership creditors and other partners
assets have been exhausted:
a. Pro rata
1. A limited partner is liable for partnership obligations when
b. Subsidiary
he contributed services instead of only money or property
3. Admission or representation made by any partner
to the partnership
concerning partnership affairs within the scope of his
2. When he allows his surname to appear in the firm name
authority is evidence against the partnership
3. When he fails to have a false statement in the certificate
4. Notice to partner of any matter relating to partnership
corrected, knowing it to be false
affairs operates as notice to partnership except in case of
4. When he takes part in the control of the business
fraud:
5. When he receives partnership property as collateral
a. Knowledge of partner acting in the particular matter
security, payment, conveyance, or release in fraud of
acquired while a partner
partnership creditors
b. Knowledge of the partner acting in the particular
6. When there is failure to substantially comply with the legal
matter then present to his mind
requirements governing the formation of limited
c. Knowledge of any other partner who reasonably
partnerships
could and should have communicated it to the acting
partner
rd
5. Partners and the partnership are solidarily liable to 3
persons for the partner's tort or breach of trust
6. Liability of incoming partner is limited to:
a. His share in the partnership property for existing
obligations

2013 GOLDEN NOTES
PARTNERSHIP
b. His separate property for subsequent obligations

7. Creditors of partnership are preferred in partnership property
& may attach partner's share in partnership assets
Other obligations To separate creditors
3. Duty to render on demand true and full information As in a general partnership, the creditor of a limited partner
affecting partnership to any partner or legal representative may, in addition to other remedies allowed under existing laws,
of any deceased partner or of any partner under legal apply to the proper court for a charging order subjecting the
disability. interest in the partnership of the debtor partner for the
4. Duty to account to the partnership as fiduciary. payment of his obligation.

CIVIL LAW
AGENCY Leon, Comments and Cases on Partnership,

Agency and Trusts, 2010, p. 371)
DEFINITION OF AGENCY
Q: Who are the parties to a contract of agency?
Q: What is contract of agency?
A:
A: By contract of agency a person binds himself to render 1. Principal- one whom the agent represents and from
some service or to do something in representation or on whom he derives his authority; he is the person
behalf of another, with the consent or authority of the represented. Agency imports the contemporaneous
latter (Art. 1868) existence of a principal, and there is no agency unless one is
acting for and in behalf of another.
Q: What are the characteristics of a contract of agency?
2. Agent - one who acts for and represents another; he is
A: BUNC-PP the person acting in a representative capacity. The agent
1. Bilateral – If it is for compensation because it has derivative authority in carrying out the principal’s
gives rise to reciprocal rights and obligations business. He may employ his own agent in which case he
2. Unilateral – If gratuitous, because it creates becomes a principal with respect to the latter (De Leon,
obligations for only one of the parties Comments and Cases on Partnership, Agency, and Trust,
3. Nominate 2010 ed., p. 328).
4. Consensual – It is perfected by mere consent
5. Principal Note: From the time the agent acts or transacts the business for
6. Preparatory – It is entered into as a means to an which he has been employed in representation of another, a third
end (De Leon, Comments and Cases on party is added to the agency relationship – the party with whom
the business is transacted (De Leon, Comments and Cases on
Partnership, Agency and Trusts, 2010, p. 325)
Partnership, Agency, and Trust, 2010 ed., 328).
Q: What are the classifications of agency?

Q: What are the essential elements of an agency?
A:
A: CORS
1. As to manner of creation
1. Consent (express or implied) of the parties to
a. Express – agent has been actually authorized by
establish the relationship;
the principal, either orally or in writing (Art. 1869)
b. Implied – agency is implied from the acts of the Note: A person may express his consent (1) by contract
principal, from his silence or lack of action or his (Art. 1868), orally or in writing, (2) by conduct (Art.
failure to repudiate the agency, knowing that 1869) (3) by ratification (Art. 1910) or the consent may
another person is acting on his behalf without arise (4) by presumption or operation of law. (De Leon,
authority (Art. 1869) Comments and Cases on Partnership, Agency and Trusts,
2. As to character 2010, p. 329)
a. Gratuitous – agent receives no compensation for
his services (Art. 1875) 2. The Object is the execution of a juridical act in
b. Onerous – agent receives compensation for his relation to third persons;
services (Art. 1875) 3. The agent acts as a Representative and not for
himself; and
3. As to extent of business of the principal 4. The agent acts within the Scope of his authority.
a. General – agency comprises all the business of (De Leon, Comments and Cases on Partnership,
the principal (Art. 1876) Agency and Trusts, 2010, p. 329)
b. Special – agency comprises one or more specific
transactions (Art. 1876) Q: Are there any formal requirements in the appointment
4. As to authority conferred of an agent?
a. Couched in general terms – agency is created in
general terms and is deemed to comprise only A: GR: There are no formal requirements governing the
acts in the name and representation of the appointment of an agent.
principal (Art. 1877)
b. Couched in specific terms – agency authorizing XPN: When the law requires a specific form. i.e. –
only the performance of a specific act or acts (Art. when sale of land or any interest therein is through an
1876) agent, the authority of the latter must be in writing;
5. As to nature and effects otherwise, the sale shall be void (Art. 1874)
a. Ostensible or representative – agent acts in the
name and representation of the principal (Art.
1868)
b. Simple or commission – agent acts in his own
name but for the account of the principal (De

2013 GOLDEN NOTES
AGENCY
Q: What is the rule on the implied acceptance of the Q: What are the requisites for solidary liability of joint
agency? principals?
A: A:
1. Between persons who are present – the acceptance of 1. There are two or more principals;
the agency may also be implied of the principal 2. They have all concurred in the appointment of the
delivers his power of attorney to the agent and the same agent; and
latter receives it without any objection (Art. 1871) 3. Agent is appointed for a common transaction or
2. Between persons who are absent – the acceptance of undertaking (De Leon, Comments and Cases on
the agency cannot be implied from the silence of the Partnership, Agency and Trusts, 2010, p. 569)
agent except:
a. When the principal transmits his power of Q: What is the “Theory of imputed knowledge”?
attorney to the agent, who receives it without
any objection; A: The importance of the duty to give information of
b. When the principal entrusts to him by letter or material facts becomes readily apparent when it is borne in
telegram a power of attorney with respect to the mind that knowledge of the agent is imputed to the
business in which he is habitually engage as an principal even though the agent never communicated such
agent and he did not reply to the letter or knowledge to the principal (De Leon, Comments and Cases
telegram. (Art. 1872) on Partnership, Agency, and Trust, 2010 ed., p. 343).
Note: Acceptance by the agent may also be express or implied Q: What are the exceptions to the theory of imputed
from his acts which carry out the agency, or from his silence or knowledge?
inaction according to the circumstances. (Art. 1870)
A:
Q: What is the nature of the relationship between 1. Where the agent’s interests are adverse to those of the
principal and agent? principal;
2. Where the agent’s duty is not to disclose the
A: It is fiduciary in nature that is based on trust and information, as where he is informed by way of confidential
confidence (De Leon, Comments and Cases on Partnership, information; and
Agency and Trusts, 2010, p. 337). 3. Where the person claiming the benefit of the rule
colludes with the agent to defraud the principal.
Q: What are the qualifications of a principal?
Note: The theory of imputed knowledge ascribes the knowledge of
A: the agent to the principal, not the other way around. The
1. Natural or juridical person knowledge of the principal cannot be imputed to his agent (Sunace
2. He must have capacity to act International Management Services, Inc. vs. National Labor
Relations Commission, 480 SCRA 146, 2006)
Note: If a person is capacitated to act for himself or his own right,
he can act through an agent. Q: What are the kinds of agents?
Insofar as third persons are concerned, it is enough that the A:

principal is capacitated. But insofar as his obligations to his 1. Universal agent – one employed to do all acts which
principal are concerned, the agent must be able to bind himself.
the principal may personally do, and which he can
lawfully delegate to another the power of doing (De
Q: What are the kinds of principal?
Leon, Comments and Cases on Partnership, Agency and
Trusts, 2010, p. 403)
A:
2. General agent – one employed to transact all business
1. Disclosed principal- if at the time of the transaction
of the principal, or all the business of a particular kind
contracted by the agent, the other party thereto has known
or in a particular place, do all acts connected with a
that the agent is acting for a principal and of the principal’s
particular trade, business or employment (De Leon,
identity.
Comments and Cases on Partnership, Agency and
2. Partially disclosed principal- if the other party knows or
Trusts, 2010, p. 403)
has reason to know that the agent is or may be acting for a
3. Special or particular agent – one authorized to do act
principal but is unaware of the principal’s identity.
in one or more specific transactions or to do one or
3. Undisclosed principal- if the party has no notice of the
more specific acts or to act upon a particular occasion
fact that the agent is acting as such for a principal (De Leon,
(De Leon, Comments and Cases on Partnership, Agency
and Trusts, 2010, p. 404)
2010 ed., p. 375).
Q: What is the rule with regard to the execution of the
Q: Define “joint principals”
agency?
A: Two or more persons appoint an agent for a common
A: GR: The agent is bound by his acceptance to carry out
transaction or undertaking (Art. 1915).
the agency, in accordance with the instruction of the

CIVIL LAW
principal and is liable for damages which, through his non-

performance, the principal may suffer. (Art. 1884; Art.1887) Q: What are the requisites for the existence of agency by
necessity?
XPN: If its execution could manifestly result in loss or
damage to the principal. (Art. 1888) A: RIAA
1. Real existence of emergency
Q: What is the responsibility of two or more agents 2. Inability of the agent to communicate with the
appointed simultaneously? principal
3. Exercise of Additional authority is for the
A: GR: Jointly liable. principal’s protection
4. Adoption of fairly reasonable means, premises
XPN: Solidarity has been expressly stipulated. Each of duly considered
the agents becomes solidarily liable for:
1. the non-fulfillment of the agency; or Q: What is the rule regarding double agency?
2. fault or negligence of his fellow agent.
A: GR: It is disapproved by law for being against public
XPNs to the XPN: policy and sound morality.
1. When one of the other agents acts beyond the
scope of his authority – innocent agent is not XPN: Where the agent acted with full knowledge and
liable. consent of the principals.
2. When the the fault or negligence of his fellow
agents acted beyond the scope of their authority Q: What are the acts that a principal may delegate to his
– innocent agent is not liable. (Art. 1895) agent?
Note: An innocent agent has a right later on to recover from A: GR: What a man may do in person, he may do thru
the guilty or negligent agent. (Art. 1217) another.
Q: What are the instances when the agent may incur XPNs:
personal liability? 1. Personal acts – personal performance is required
by law or public policy or the agreement of the
A: parties, the doing of the act by a person on behalf
1. Agent expressly bound himself; of another does not constitute performance by
2. Agent exceeds his authority; the latter.
3. Acts of the agent prevent the performance on the part 2. Criminal acts or acts not allowed by law – an
of the principal; attempt to delegate an act to another authority
4. When a person acts as agent without authority or to do an act which, if done by the principal would
without a principal; or be illegal, is void. (De Leon, Comments and Cases
5. A person who acts as an agent of an incapacitated on Partnership, Agency and Trusts, 2010, pp. 334-
principal unless the third person was aware of the 335)
incapacity at the time of the making of the contract.
(De Leon, Comments and Cases on Partnership, Q: A granted B the exclusive right to sell his brand of
Agency, and Trust, 2010 ed. pp. 484-490) Maong pants in Isabela, the price for his merchandise
payable within 60 days from delivery, and promising B a
Q: Can agency be presumed? commission of 20% on all sales. After the delivery of the
merchandise to B but before he could sell any of them, B’s
A: GR: Agency is not presumed. The relation between store in Isabela was completely burned without his fault,
principal and agent must exist as a fact. Thus, it is held that together with all of A's pants. Must B pay A for the lost
where the relation of agency is dependent upon the acts of pants? Why? (1999 Bar Question)
the parties, the law makes no presumption of agency, and it
is always a fact to be proved, with the burden of proof A: The contract between A and B is a sale not an agency to
resting upon the person alleging the agency to show, not sell because the price is payable by B upon 60 days from
only the fact of its existence, but also its nature and extent. delivery even if B is unable to resell it. If B were an agent,
he is not bound to pay the price if he is unable to resell it.
XPNS: As a buyer, ownership passed to B upon delivery and, under
1. Operation of law Art. 1504, the thing perishes for the owner. Hence, B must
2. To prevent unjust enrichment (De Leon, Comments and still pay the price.
Cases on Partnership, Agency, and Trust, 2010 ed., p. 375).
Q: Is mere representation of an alleged agent sufficient to
Q: Can agency be created by necessity? prove the existence of a principal-agent relationship?
A: No. What is created is additional authority in an agent A: No. The declarations of the agent alone are generally
appointed and authorized before the emergency arose. insufficient to establish the fact or extent of agency. It is a

2013 GOLDEN NOTES
AGENCY
settled rule that the persons dealing with the assumed by the principal specific orders from the
agent are bound at their peril, if they would hold the thru the agreement court
principals liable, to ascertain not only the fact of agency but
also the nature and extent of authority, and in case either is Q: Distinguish agency from lease of services.
controverted, the burden of proof is upon them to establish
it (Spouses Yu v. Pan American World Airways, Inc., G.R. No. A:
123560, Mar. 27, 2000). AGENCY LEASE OF SERVICES
Agent represents the Worker or lessor of
Q: A foreign manufacturer of computers and a Philippine principal services does not
distributor entered into a contract whereby the represent his employer
distributor agreed to order 1,000 units of the Relationship can be
manufacturer's computers every month and to resell them Generally, relationship
terminated at the will
in the Philippines at the manufacturer's suggested prices can be terminated only
of either principal or
plus 10%. All unsold units at the end of the year shall be at the will of both
agent
bought back by the manufacturer at the same price they Agent exercises Employee has ministerial
were ordered. The manufacturer shall hold the distributor discretionary powers functions
free and harmless from any claim for defects in the units.
Is the agreement one for sale or agency? (2000 Bar Q: Distinguish agency from trust
Question)
A:
A: The contract is one of agency not sale. The notion of sale AGENCY TRUST
is negated by the following indicia: (1) the price is fixed by
Agent usually holds Trustee may hold legal
the manufacturer with the 10% mark-up constituting the
no title at all title to the property
commission; (2) the manufacturer reacquires the unsold
Agent usually acts in
units at exactly the same price; and (3) warranty for the Trustee may act in his
the name of the
units was borne by the manufacturer. The foregoing indicia own name
principal
negate sale because they indicate that ownership over the
Trust usually ends by the
units was never intended to transfer to the distributor. Agency usually may
accomplishment of the
be terminated or
purposes for which it was
Q: Distinguish agency from guardianship revoked any time
formed
Agency may not be
A: Trust involves control
connected at all with
AGENCY GUARDIANSHIP over property
property
Agent represents a Guardian represents an
Trustee does not
capacitated person incapacitated person Agent has authority
necessarily or even
Agent derives to make contracts
Guardian derives possess such authority to
authority from the which will be binding
authority from the court bind the trustor or the
principal on his principal
cestui que trust
Agent is appointed by
Guardian is appointed by Agency is really a Trust may be the result of
the principal and can
the court, and stands in contractual relation a contract, it may also be
be removed by the
loco parentis created by law
latter
Agent is subject to Guardian is not subject to
POWERS
directions of the the directions of the
principal ward, but must act for the
Q: What are the kinds of agency as to extent of powers
ward’s benefit
conferred?
Agent can make the Guardian has no power to
principal personally impose personal liability
A: An agency may be couched in general terms or couched
liable on the ward
in specific terms. (Art. 1869)
Q: Distinguish agency from judicial administration. Q: What is an agency couched in general terms?
A: A: One which is created in general terms and is deemed to
AGENCY JUDICIAL ADMINISTRATION comprise only acts of administration (Art. 1877).
Agent is appointed Judicial Administrator is
by the principal appointed by the court Q: When is an express power necessary?
Represents not only the
Represents the
court but also the heirs and A: It is necessary to perform any act of strict ownership (De
principal
creditors of the estate Leon, Comments and Cases on Partnership, Agency and
Agent does not file Judicial Administrator files a Trusts, 2010, p. 408)
a bond bond
Agent is controlled His acts are subject to

CIVIL LAW
Q: When is the act of an agent binding to the principal? Q: When is the principal not bound by the act of the
agent?
A:
1. When the agent acts as such without expressly A:
binding himself or does not exceed the limits of 1. GR: When the act is without or beyond the scope of
his authority (Art. 1897) his authority in the principal’s name.
2. If principal ratifies the act of the agent which
exceeded his authority (Art. 1898) XPNs:
3. Circumstances where the principal himself was, a. Where the acts of the principal have contributed
rd
or ought to have been aware (Art. 1899) to deceive a 3 person in good faith
4. If such act is within the terms of the power of b. Where the limitation upon the power created by
attorney, as written. (Art.1900 & 1902) the principal could not have been known by the
rd
5. Principal has ratified, or has signified his 3 person
willingness to ratify the agent’s act (Art 1901) c. Where the principal has placed in the hands of
the agent instruments signed by him in blank
Q: Does knowledge of a fact by an agent bind the d. Where the principal has ratified the acts of the
principal? agent
A: GR: Knowledge of agent is knowledge of principal. 2. When the act is within the scope of the agent’s
authority but in his own name, except when the
XPNs: transaction involves things belonging to the principal.
1. Agent’s interests are adverse to those of the (Art. 1883)
principal;
2. Agent’s duty is not to disclose the information Note: The limits of the agent’s authority shall not be
(confidential information); or considered exceeded should it have been performed in a
3. Where the person claiming the benefit of the rule manner more advantageous to the principal than that
specified by him.
colludes with the agent to defraud the principal
(De Leon, Comments and Cases on Partnership,
RIGHTS OF AGENTS
Agency, and Trust, 2010 ed. p. 344)
Q: What are the instances when the agent may retain in
Q: What are the effects of the acts of an agent?
pledge the object of the agency?
A:
A:
1. With authority
1. If principal fails to reimburse the agent the necessary
a. In principal’s name – valid
sums, including interest, which the latter advanced for
b. In his own name – not binding on the principal;
the execution of the agency (Art. 1912); or
agent and stranger are the only parties, except
2. If principal fails to indemnify the agent for all damages
regarding things belonging to the principal or
which the execution of the agency may have caused
when the principal ratifies the contract or derives
the latter, without fault or negligence on his part. (Art.
benefit therefrom
1913)
2. Without authority
a. In principal’s name – unenforceable but may be
Q: What is the rule where two persons deal separately
ratified, in which case, may be validated
with the agent and the principal?
retroactively from the beginning
b. In his own name – valid on the agent, but not on
A: If the two contracts are incompatible with each other,
the principal
the one of prior date shall be preferred. This is subject
however to the rule on double sale under Art. 1544.
Q: CX executed a special power of attorney authorizing DY
to secure a loan from any bank and to mortgage his
Note: Rules of preference in double sale
property covered by the owner’s certificate of title. In 1. Personal property – possessor in good faith
securing a loan from M Bank, DY did not specify that he 2. Real property
was acting for CX in the transaction with the bank. Is CX a. Registrant in good faith
liable for the bank loan? (2004 Bar Question) b. Possessor in good faith
c. Person with the oldest title in good faith (Art.
A: While as a general rule the principal is not liable for the 1544)
contract entered into by his agent in case the agent acted in
If agent acted in good faith, the principal shall be liable for
his own name without disclosing his principal, such rule
damages to the third person whose contract must be rejected. If
does not apply if the contract involves a thing belonging to agent is in bad faith, he alone shall be liable. (Art. 1917)
the principal. In such case, the principal is liable under Art.
1883. The contract is deemed made in his behalf (Sy-Juco v.
Sy-Juco, G.R. No. L-13471, Jan. 12, 1920).

2013 GOLDEN NOTES
AGENCY
Q: Can a person acting as an agent escape criminal liability 7. Not to carry out the agency of its execution would
by virtue of the contract of agency? manifestly result in loss or damage to the
principal (Art. 1888)
A: No. The law on agency has no application in criminal 8. Answer for damages if there being a conflict
cases. When a person participates in the commission of a between his interests and those of the principal,
crime, he cannot escape punishment on the ground that he he should prefer his own (Art. 1889)
simply acted as an agent of another party (Ong v. CA, G.R. 9. Not to Loan to himself if he has been authorized
No. 119858, Apr. 29, 2003) to lend money at interest (Art. 1890)
10. Render an Account of his transactions and to
Q: Can an agent maintain an action against persons with deliver to the principal whatever he may have
whom they contracted on behalf of his principal? received by virtue of the agency, even though it
may not be owing to the principal (Art. 1891)
A: No. Agents are not a party with respect to that contract
between his principal and third persons. As agents, they Note: Every stipulation exempting the agent from the
only render some service or do something in representation obligation to render an account shall be void. [Art.
or on behalf of their principals. The rendering of such 1891(2)]
service did not make them parties to the contracts of sale
executed in behalf of the latter. The fact that an agent who 11. Distinguish goods by countermarks and designate
makes a contract for his principal will gain or suffer loss by the merchandise respectively belonging to each
the performance or nonperformance of the contract by the principal, in the case of a commission agent who
principal or by the other party thereto does not entitle him handles goods of the same kind and mark, which
to maintain an action on his own behalf against the other belong to different owners (Art. 1904)
party for its breach. An agent entitled to receive a 12. Be Responsible in certain cases for the acts of the
commission from his principal upon the performance of a substitute appointed by him (Art. 1892)
contract which he has made on his principal's account does 13. Pay interest on funds he has applied to his own
not, from this fact alone, have any claim against the other use (Art. 1896)
party for breach of the contract, either in an action on the 14. Inform the principal, where an authorized sale of
contract or otherwise. An agent who is not a promisee credit has been made, of such sale (Art. 1906)
cannot maintain an action at law against a purchaser 15. Bear the risk of collection and pay the principal
merely because he is entitled to have his compensation or the proceeds of the sale on the same terms
advances paid out of the purchase price before payment to agreed upon with the purchaser, should he
the principal (Uy v. CA, G.R. No. 120465, Sept. 9, 1999) receive also on sale, a guarantee commission (Art.
1907)
RESPONSIBILITIES AND OBLIGATIONS OF AN AGENT 16. Indemnify the principal for damages for his failure
to collect the credits of his principal at the time
Q: What are the specific obligations of an agent to the that they become due (Art. 1908)
principal? 17. be Responsible for fraud or negligence (Art. 1909;
De Leon, Comments and Cases on Partnership,
A: CAFO-FAN-ALAD-RIP-BIR Agency, and Trust, 2010 ed., pp.451-452)
1. Carry out the agency which he has accepted (Art.
Note: The court shall judge with more or less rigor, the
1884)
fault or negligence of the agent, according to whether
2. Answer for damages which through his non- the agency was or was not for compensation.
performance the principal may suffer (Ibid)
3. Finish the business already begun on the death of Q: What are “instructions”?
the principal should delay entail any danger (Ibid)
4. Observe the diligence of a good father of a family A: Instructions are private directions which the principal
in the custody and preservation of the goods may give the agent in regard to the manner of performing
forwarded to him by the owner in case he his duties as such agent but of which a third party is
declines an agency, until an agent is appointed ignorant. They are said to be secret if the principal intended
(Art. 1885) them not to be made known to such party (De Leon,
Note: The owner shall as soon as practicable either
2010 ed., p. 455).
appoint an agent or take charge of the goods. (Art.
1885)
Q: What are the distinctions between authority and the
5. Advance the necessary Funds should there be a principal’s instructions?
stipulation to do so except when the principal is
insolvent (Art. 1886) A:
6. Act in accordance with the instructions of the AUTHORITY INSTRUCTIONS
principal, and in default thereof, to do all that a Contemplates only a
Sum total of the powers
good father of a family would do, as required by private rule of guidance to
committed to the agent by
the nature of the business (Art. 1887) the agent; independent
the principal
and distinct in character

CIVIL LAW
Relates to the
subject/business with which
Refers to the manner or
the agent is empowered to
mode of agent’s action
deal or act
Limitations of authority are Without significance as
operative as against those against those with neither
who have/charged with knowledge nor notice of
knowledge of them them
Not expected to be made
known to those with whom
Contemplated to be made
the agent deals (De Leon,
known to third persons
Comments and Cases on
dealing with the agent
Partnership, Agency, and
Trust, 2010 ed. p. 344)
Q: In case of breach of loyalty, is the agent still entitled to

commission?
A: No, The forfeiture of the commission will take place

regardless of whether the principal suffers any injury by
reason of such breach of loyalty. It does not even matter if
the agency is for a gratuitous one, or that the principal
obtained better results, or that usage and customs allow a
receipt of such a bonus.
Note: An agent has an absolute duty to make a full

disclosure or accounting to his principal of all transactions
and material facts that may have some relevance with the
agency (Domingo v. Domingo, G.R. No. L-30573, Oct. 29,
1971).
Q: When is the obligation to account not applicable?
A:
1. If the agent acted only as a middleman with the task of
merely bringing together the vendor and vendees;
2. If the agent informed the principal of the
gift/bonus/profit he received from the purchaser and
his principal did not object thereto; or
3. Where a right of lien exists in favor of the agent.

2013 GOLDEN NOTES
AGENCY
SUMMARY OF RULES; ACTS OF AN AGENT
In behalf of the principal, within the scope of authority

1. Binds principal;
2. Agent not personally liable
Without or beyond scope of authority
Contract is unenforceable as against the principal but binds the agent to the third person
Binding on the principal when:

1. Ratified or
2. The principal allowed the agent to act as though he had full powers
Within the scope of authority but in the agent’s name
1. Not binding on the principal;
rd
2. Principal has no cause of action against the 3 parties and vice versa
Note: When the transaction involves things belonging to the principal:

Remedy of the principal – damages for agent’s failure to comply with the agency
Within the scope of the written power of attorney but agent has actually exceeded his authority
according to an understanding between him and the principal
rd
1. Insofar as 3 persons are concerned (not required to inquire further than the terms of the
written power), agent acted within scope of his authority;
2. Principal stopped
With improper motives
Motive is immaterial; as long as within the scope of authority, valid
With misrepresentations by the agent
1. Authorized – principal still liable
2. Beyond the scope of the agent’s authority
GR: Principal not liable
XPN: Principal takes advantage of a contract or receives benefits made under false representation
of his agent
Mismanagement of the business by the agent
rd
1. Principal still responsible for the acts contracted by the agent with respect to 3 persons;
2. Principal, however, may seek recourse from the agent
Tort committed by the agent
Principal civilly liable so long as the tort is committed by the agent while performing his duties in
furtherance of the principal’s business
rd
Agent in good faith but prejudices 3 parties
Principal is liable for damages

CIVIL LAW
EXPRESS vs. IMPLIED AGENCY Q: What are the distinctions between apparent authority
and authority by estoppel?
Q: Distinguish express and implied agency
A:
A: Apparent Authority Authority by Estoppel
EXPRESS AGENCY IMPLIED AGENCY Arises when the principal, by
That which is though not
As to definition his culpable negligence,
actually granted, the
One where the agent permits his agent to exercise
principal knowingly
has been actually powers not granted to him,
One which is implied from permits the agent to
authorized by the even though the principal may
the acts of the principal, exercise or holds him out
principal, either orally have no notice or knowledge
as possessing
or in writing of the agent’s conduct
As to authority Founded in conscious Founded on the principal’s
When it is incidental to permission of acts negligence in failing properly
the transaction or beyond the powers to supervise the affairs of the
reasonably necessary to granted agent
When it is directly accomplish the purpose of
conferred by words the agency, and therefore, AGENCY BY ESTOPPEL
the principal is deemed to
have actually intended the Q: When is there an agency by estoppel?
agent to possess
A: When one leads another to believe that a certain person
Q: What is the scope of the agent’s authority as to third is his agent, when as a matter of fact such is not true, and
persons? the latter acts on such misrepresentation, the former
cannot disclaim liability, for he has created an agency by
A: It includes not only the actual authorization conferred estoppel. (Paras, Civil Code of the Philippines Annotated,
th
upon the agent by his principal but also that which is Vol. V, p. 558, 6 ed)
apparent or impliedly delegated to him. (De Leon,
Comments and Cases on Partnership, Agency, and Trust, Q: What are the rules regarding estoppel in agency?
2010 ed. p.493)
A:
Q: Is the third person required to inquire into the 1. Estoppel of agent – One professing to act as agent for
authority of the agent? another may be estopped to deny his agency both as
against his asserted principal and the third persons
A: interested in the transaction in which he engaged.
1. Where authority is not in writing – Every person
dealing with an assumed agent must discover upon his 2. Estoppel of principal
peril, if he would hold the principal liable, not only the a. As to agent – One who knows that another is
fact of the agency but the nature and extent of the acting as his agent and fails to repudiate his acts,
authority of the agent. or accepts the benefits, will be estopped to deny
2. Where authority is in writing – 3rd person is not the agency as against the other.
required to inquire further than the terms of the b. As to sub-agent – To estop the principal from
written power of attorney. denying his liability to a third person, he must
have known or be charged with knowledge of the
Note: A third person with whom the agent wishes to contract on fact of the transaction and the terms of the
behalf of the principal may require the presentation of the power agreement between the agent and sub-agent.
of attorney or the instructions as regards the agency (Art. 1902). c. As to third persons – One who knows that
another is acting as his agent or permitted
Q: When is the principal bound by the actual or apparent another to appear as his agent, to the injury of
authority of the agent? third persons who have dealt with the apparent
agent as such in good faith and in the exercise of
A: The principal is bound by the acts of the agent on his reasonable prudence, is estopped to deny the
behalf, whether or not the third person dealing with the agency.
agent believes that the agent has actual authority, so long
as the agent has actual authority, express or implied. 3. Estoppel of third persons – A third person, having dealt
with one as agent may be estopped to deny the
Q: What is doctrine of apparent authority? agency as against the principal, agent, or third persons
in interest.
A: The principal is liable only as to third persons who have
been led reasonably to believe by the conduct of the 4. Estoppel of the government – The government is not
principal that such actual authority exists, although none estopped by the mistake or error on the part of its
has been given. agents.

2013 GOLDEN NOTES
AGENCY
Note: However, the rule on non-estoppel of the government is not

designed to perpetrate an injustice (Leca Realty Corporation v.
Republic. G.R. Nos. 155605 & 160179, 2006) Q: Who is a commission agent?
Q: Distinguish implied agency from agency by estoppel A: He is one engaged in the purchase and sale of personal
property for a principal, which, for this purpose, has to be
A: placed in his possession and at his disposal.
IMPLIED AGENCY AGENCY BY ESTOPPEL
As to liability between principal and agent Q: Who is a broker?
If caused by the “agent”,
Agent is a true agent,
he is not considered a A: He is a middleman or intermediary who in behalf of
with rights and duties
true agent, hence, he has others and for a commission or fee negotiates
of an agent
no rights as such contracts/transactions relating to real or personal property.
As to liability to third persons
1. If caused by the Q: What is factorage?
principal, he is liable,
1. The principal is rd
but only if the 3 A: It is the compensation of a factor or commission agent.
always liable
person acted on the
2. The agent is
misrepresentation; Q: What is ordinary commission?
never personally
2. If caused by the agent
liable
alone, only the agent A: It is the compensation for the sale of goods which are
is liable placed in the agent’s possession or at his disposal.
GENERAL vs. SPECIAL AGENCY Q: What is guarantee commission?
Q: Distinguish a general agent from a special agent? A: It is the fee which is given in return for the risk that the
agent has to bear in the collection of credits.
A:
General Agent Special Agent Note: The purpose of the guarantee commission is to compensate
Scope of Authority the agent for the risks he will have to bear in the collection of the
credit due the principal. (De, Leon, Comments and Cases on
Specific acts in Partnership, Agensy and Trust, 2010, p. 516)
All acts connected with pursuance of particular
the business or instructions or with Q: Who is a del credere agent?
employment in which restrictions necessarily
he is engaged implied from the act to A: He is the agent who guarantees payment of the
be done customer’s account in consideration of the commission.
Nature of Service Authorized (De, Leon, Comments and Cases on Partnership, Agensy and
Involves continuity of Trust, 2010, p. 516)
No continuity of service
service
Extent to which the Agent may Bind the Principal Note: A del credere agent may sue in his name for the purchase
May bind his principal price in the event of non-performance by the buyer (De, Leon,
Cannot bind his Comments and Cases on Partnership, Agensy and Trust, 2010, p.
by an act within the
principal in a manner 517)
scope of his authority
beyond or outside the
although it may be
specific acts which he is AGENCY COUCHED IN GENERAL TERMS
contrary to the latter’s
authorized to perform
special instructions
Termination of Authority Q: What is an agency couched in general terms?
Duty imposed upon the
Apparent authority A: One which is created in general terms and is deemed to
third party to inquire
does not terminate by comprise only acts of administration (Art. 1877).
makes termination of
mere revocation of his
the relationship
authority without Q: What is meant by acts of administration?
effective upon
notice to the third party
revocation
Construction of Principal’s Instruction A: Those which do not imply the authority to alienate for
the exercise of which an express power is necessary (De
Strictly construed as
Merely advisory in Leon, Comments and Cases on Partnership, Agency and
they limit the agent’s
nature Trusts, 2010, p. 408-409).
authority

CIVIL LAW
Q: When is payment an act of administration? Q: When is a special power necessary?
A: When payment is made in the ordinary course of A: COLL MO SPRING COW

management (Art. 1878; De Leon, Comments and Cases on 1. to Create or convey real rights over immovable
Partnership, Agency and Trusts, 2010, p. 415). property;
2. To enter into any contract by which the
Q: When are making gifts an act of administration? Ownership of an immovable is transmitted or
Acquired either gratuitously or for a valuable
A: The making of customary gifts for charity, or those made consideration
to employees in the business managed by the agent are 3. to Loan or borrow money, unless the latter act be
considered acts of administration (Art. 1878; De Leon, urgent and indispensable for the preservation of
Comments and Cases on Partnership, Agency and Trusts, the things which are under administration;
2010, p. 418) 4. to Lease any real property to another person for
more than one year;
Q: P granted to A a special power to mortgage the 5. to Make such Payments as are not usually
former’s real estate. By virtue of said power, A secured a considered as acts of administration;
loan from C secured by a mortgage on said real estate. Is P 6. to Obligate principal as guarantor or surety
personally liable for said loan? 7. to bind the principal to render some Service
without compensation;
A: No. A special power to mortgage property is limited to 8. to bind the principal in a contract of Partnership;
such authority to mortgage and does not bind the grantor 9. to Ratify obligations contracted before the agency
personally to other obligations contracted by the grantee in 10. to Accept or repudiate an Inheritance
the absence of any ratification or other similar act that 11. To effect Novation which put an end to
would estop the grantor from questioning or disowning obligations already in existence at the time the
such other obligations contracted by the grantee. agency was constituted
12. to make Gifts, except customary ones for charity
AGENCY REQUIRING SPECIAL POWER OF ATTORNEY or those made to employees in the business
managed by the agent
Q: What is special power of attorney (SPA)? 13. To Compromise, to submit questions to
arbitration, to renounce the right to appeal from
A: It is an instrument in writing by which one person, as a judgment, to waive objections to the venue of
principal, appoints another as his agent and confers upon an action or to abandon a prescription already
him the authority to perform certain specified acts or kinds acquired
of acts on behalf of the principal with a primary purpose to 14. any Other act of strict dominion
evidence agent’s authority to third parties within whom the 15. To Waive an obligation gratuitously
agent deals.
Q: What are the limitations to a special power of
Q: Is the intervention of a notary public required for the attorney?
validity of an SPA?
A:
A: GR: A power of attorney is valid although no notary 1. A special power to sell excludes the power to
public intervened in its execution. (Barretto v. Tuason, G.R. mortgage (Art. 1879)
Nos. L-36811, 36827, 36840, 36872, Mar. 31, 1934) (De 2. A special power to mortgage does not include the
Leon, p. 443, 2005 ed) power to sell (ibid)
3. A special power to compromise does not authorize
XPN: When SPA is executed in a foreign country, it must submission to arbitration (Art. 1880)
be certified and authenticated according to the Rules of
Court, particularly Sec. 25, Rule 132. AGENCY BY OPERATION OF LAW
Note: When the special power of attorney is executed and Q: When is an agency created by operation of law?
acknowledged before a notary public or other competent official in
a foreign country, it cannot be admitted in evidence unless it is A:
certified as such by a secretary of embassy or legation, consul
1. When the agent withdraws from the agency for a
general, consul, vice consul, or consular agent or by any officer in
the foreign service of the Philippines stationed in the foreign valid reason, he must continue to act until the
country in which the record is kept of said public document and principal has had a reasonable opportunity to
authenticated by the seal of his office. (Medina v. Natividad, G.R. take the necessary steps like the appointment of
No. 177505, Nov. 27, 2008) a new agent to remedy the situation caused by
the withdrawal (Art. 1929).
The failure to have the special power of attorney (executed in a 2. In case a person declines an agency, he is bound
foreign country) authenticated is not merely a technicality – it is a to observe the diligence of good father of the
question of jurisdiction. Jurisdiction over the person of the real
family in the custody and preservation of the
party-in-interest was never acquired by the courts. (Ibid.)

2013 GOLDEN NOTES
AGENCY
goods forwarded to him by the owner until the
latter should appoint an agent (Art. 1885). XPN to the XPN: When the principal ratifies it
expressly or tacitly (Art. 1910)
Note: The law reconciles the interests of the agent with those
of the principal, and if it permits the withdrawal of the agent, Note: Even if the agent has exceeded his authority, the principal is
it is on the condition that no damage results to the principal, solidarily liable with the agent if the former allowed the latter to
and if the agent desires to be relieved of the obligation of act as though he had full powers (Art. 1911)
making reparation when he withdraws for a just cause, he
must continue to ac so that no injury may be caused to the Q: What is the liability of the principal for tort committed
principal. (De Leon Comments and Cases on Partnership,
by the agent?
Agency, and Trust, 8th ed.)
A: GR: Where the fault or crime committed by the agent is

RIGHTS AND OBLIGATIONS OF PRINCIPAL
not in the performance of an obligation of the principal, the
latter is not bound by the illicit acts of the agent, even if it is
Q: What are the obligations of the principal to the agent?
done in connection with the agency.
A: To: CARIP
XPNs:
1. Comply with all obligations which the agent may
1. Where the tort was committed by the agent
have contracted within the scope of his authority
because of defective instructions from the
[Art. 1910(1)];
principal or due to lack of necessary vigilance or
2. Advance to the agent, should the latter so
supervision on his part; or
request, the sums necessary for the execution of
2. When the tort consists in the performance of an
the agency (Art. 1912);
act which is within the powers of an agent but
3. Reimburse the agent for all advances made by
becomes criminal only because of the manner in
him, even if the business or undertaking was not
which the agent has performed it; the principal is
successful, provided the agent is free from fault
civilly liable to 3rd persons who acted in good
(Ibid.);
faith.
4. Indemnify the agent for all damages which the
execution of the agency may have caused the
IRREVOCABLE AGENCY
latter without fault or negligence on his part (Art.
1913); and
Q: When is agency irrevocable?
5. Pay the agent the compensation agreed upon, or
if no compensation was specified, the reasonable
A:
value of the agent’s services (De Leon, Comments
1. If a bilateral contract depends upon it
and Cases on Partnership, Agency, and Trust,
2. if it is the means of fulfilling an obligation already
2010 ed. p.523).
contracted
3. if partner is appointed manager and his removal from
Q: Is the principal liable for the expenses incurred by the
the management is unjustifiable. (Art 1927)
agent?
4. if it has been constituted in the common interest of
the principal and the agent (Art. 1930)
A: GR: Yes.
5. Stipulation pour atrui (Art. 1311)
XPNs:
Q: How may the agent withdraw from the agency?
1. If the agent acted in contravention of the
principal's instructions, unless principal should
A: The agent may withdraw from the agency by giving due
wish to avail himself of the benefits derived from
notice to the principal. If the latter should suffer any
the contract;
damage by reason of the withdrawal, the agent must
2. When the expenses were due to the fault of the
indemnify him therefor, unless the agent should base his
agent;
withdrawal upon the impossibility of continuing the
3. When the agent incurred them with knowledge
performance of the agency without grave detriment to
that an unfavorable result would ensue, if the
himself (Art. 1928).
principal was not aware thereof; or
4. When it was stipulated that the expenses would
Note: The agent, even if he should withdraw from the agency for a
be borne by the agent, or that the latter would be valid reason, must continue to act until the principal has had
allowed only a certain sum (Art. 1918) reasonable opportunity to take the necessary steps to meet the
situation (Art. 1929).
Q: What is the liability of the principal regarding contracts
entered into by the agent? MODES OF EXTINGUISHMENT
A: GR: The principal must comply with all the obligations Q: What are the modes of extinguishing an agency?
which the agent may have contracted within the scope of
his authority. A: EDWARD
1. Expiration of the period
XPN: Where the agent exceeded his authority.

CIVIL LAW
2. Death, civil interdiction, insanity or insolvency of 4. it is created not only for the interest of the
principal or of the agent principal but also for the interest of third persons
3. Withdrawal by the agent (Art. 1930)
4. Accomplishment of the object or the purpose of
the agency XPN to the XPN: When the agent acts to defraud the
5. Revocation principal.
6. Dissolution of the firm or corporation which
entrusted or accepted the agency. (Art. 1919) Q: What are the kinds of revocation?
Note: The list is not exclusive; May also be extinguished by the A: Revocation may either be express or implied (De Leon,
modes of extinguishment of obligations in general whenever they Comments and Cases on Partnership, Agency, and Trust,
are applicable, like loss of the thing and novation. 2010 ed. p. 590; Art. 1920)
Agency may be terminated: (1) by agreement (No.s 1 and 4); (2) by
the subsequent acts of the parties which may be either: (a) by the Q: How is agency impliedly revoked?
act of both parties or by mutual consent; or (b) by unilateral act of
one of them (Nos. 3 and 5; (3) by operation of law (Nos. 2 and 6). A: Principal:
(De Leon, Comments and Cases on Partnership, Agency, and Trust, 1. appoints a new agent for the same business or
2010 ed., p. 574-575) transaction (Art. 1923);
2. directly manages the business entrusted to the
Q: What is “presumption of continuance of agency”? agent (Art. 1924); or
3. after granting general power of attorney to an
A: It means that when once shown to have existed, an agent, grants a special one to another agent
agency relation will be presumed to have continued, in the which results in the revocation of the former as
absence of anything which shows its termination. (De Leon, regards the special matter involved in the latter
Comments and Cases on Partnership, Agency, and Trust, (Art. 1926)
2010 ed., p. 574))
Note: A special power of attorney is not revoked by a
Q: What are the essential elements for continuance of subsequent general power of attorney given to another
agency? agent, unless that the latter refers also to the act authorized
under the special power (Tolentino, Civil Code of the
Philippines, Vol. V, p. 436)
A: Both principal and agent must be:
1. Present Q: How is agency revoked when the agent has been
2. Capacitated appointed by two or more principals?
3. Solvent (De Leon, Comments and Cases on
Partnership, Agency, and Trust, 2010 ed., p. 575) A: Any one of the principals is granted the right to revoke
the power of attorney without the consent of the others
Q: Can the heirs continue the agency? (Art. 1927)
A: GR: No. Q: Is notice of revocation necessary?
Ratio: The agency calls for personal services on the part A:

of the agent since it is founded on a fiduciary 1. As to the agent – Express notice is not always
relationship; rights and obligations intransmissible. necessary; sufficient notice if the party to be notified
actually knows, or has reason to know, a fact
XPNs: indicating that his authority has been
1. Agency by operation of law, or a presumed or terminated/suspended; revocation without notice to
tacit agency the agent will not render invalid an act done in
2. Agency is coupled with an interest in the subject pursuance of the authority (De Leon, Comments and
matter of the agency (e.g. power of sale in a Cases on Partnership, Agency, and Trust, 2010 ed., p.
mortgage) 590)
rd
2. As to 3 persons – Express notice is necessary
Q: Is a contract of agency revocable? a. As to former customers – Actual notice must be
given to them because they always assume the
A: GR: Yes. Agency is revocable at will by the principal. continuance of the agency relationship (Art. 1873)
b. As to other persons – Notice by publication is
XPNs: It cannot be revoked if: enough (Art. 1922)
1. a bilateral contract depends upon it
2. it is the means of fulfilling an obligation already Note: There is implied revocation of the previous agency when the
contracted principal appoints a new agent for the same business or
3. a partner is appointed manager of a partnership transaction, provided there is incompatibility. But the revocation
and his termination is unjustifiable (Art. 1927) does not become effective as between the principal and the agent
until it is in some way communicated to the latter.

2013 GOLDEN NOTES
AGENCY
Q: What are the kinds of withdrawal by the agent?
Q: What is the effect of the direct management by the
principal? A:
1. Without just cause – The law imposes upon the agent
A: GR: The agency is revoked for there would no longer be the duty to give due notice to the principal and to
any basis for the representation previously conferred. But indemnify the principal should the latter suffer
the principal must act in good faith and not merely to avoid damage by reason of such withdrawal.
his obligation to the agent.
2. With just cause – If the agent withdraws from the
XPN: The only desire of the principal is for him and the agency for a valid reasons (Art. 1929) as when the
agent to manage the business together. withdrawal is based on the impossibility of continuing
with the agency without grave detriment to himself
Q: Richard sold a large parcel of land in Cebu to Leo for (Art. 1928) or is due to a fortuitous event (Art. 1174),
P100 million payable in annual installments over a period the agent cannot be held liable. (De Leon, Comments
of ten years, but title will remain with Richard until the and Cases on Partnership, Agency, and Trust, 2010 ed.,
purchase price is fully paid. To enable Leo to pay the price, p. 575)
Richard gave him a power-of-attorney authorizing him to
subdivide the land, sell the individual lots, and deliver the Note: Even if the agent withdraws from the agency for a valid
proceeds to Richard, to be applied to the purchase price. reason, he must continue to act until the principal has had
Five years later, Richard revoked the power of attorney reasonable opportunity to take the necessary steps to meet
the situation. (Art. 1929)
and took over the sale of the subdivision lots himself. Is
the revocation valid or not? Why? (2001 Bar Question)
Q: What is the effect of death of a party to the contract of
agency?
A: The revocation is not valid. The power of attorney given
to the buyer is irrevocable because it is coupled with an
A: GR: The agency is terminated by the death of the
interest – the agency is the means of fulfilling the obligation
principal even if the agency is for a definite period. (Art.
of the buyer to pay the price of the land (Art. 1927). In
1919)
other words, a bilateral contract (contract to buy and sell
the land) is dependent on the agency.
XPNs:
1. If it has been constituted in common interest of
Q: Eduardo executed a SPA authorizing Zenaida to
the principal and the agent or in the interest of
participate in the pre-qualification and bidding of a NIA
the third person who accepted the stipulation in
project and to represent him in all transactions related
his favor; (Art. 1930) or
thereto. It was granted to them. Zenaida leased Manuel’s
2. Anything done by the agent, without the
heavy equipment to be used for the NIA project. Manuel
knowledge of the death of the principal or on any
interposed no objection to Zenaida’s actuations. Eduardo
other cause which extinguishes the agency is valid
later revoked the SPA alleging that Zenaida acted beyond
and shall be fully effective with respect to third
her authority in contracting with Manuel under the SPA.
persons who may have contracted with him in
Records show that Eduardo and zenaida entered into a
good faith.
partnership in regard to the NIA project. Decide.
Note: The death of the principal extinguishes the
A: Under Art. 1818, every partner is an agent of the agency; but in the same way that revocation of the
partnership for the purpose of its business and each one agency does not prejudice third persons who have dealt
may separately execute all acts of administration, unless, with the agent in good faith without notice of the
under Art. 1801, a specification of their respective duties revocation (Art. 1921, 1922) such third persons are
has been agreed upon, or else it is stipulated that any one protected where it is not shown that the agent had
of them shall not act without the consent of all the others. knowledge of the termination of the agency because of
As such, even granting that Zenaida exceeded the authority the death of the principal or of any other cause which
extinguishes the agency. (Hererra v. Luy Kim Guan, 1
granted by the SPA, being a partner in the constituted
SCRA 406)
partnership between her and Eduardo, she can still execute
acts of administration absent any agreement that one
Q: Is the sale of the land by the agent after the death of
cannot act without the consent of all others. (Mendoza v.
the principal valid?
Paule, G.R. No. 175885, Feb. 13, 2009.
A: Article 1931 provides that an act done by the agent after
Q: Can the agent withdraw from the agency?
the death of the principal is valid and effective if these two
requisites concur:
A: Yes. The agent may renounce or withdraw from the
1. that the agent acted without the knowledge of
agency at any time, without the consent of the principal,
the death of the principal; and
even in violation of the latter’s contractual rights; subject to
2. that the third person who contracted with the
liability for breach of contract or for tort.
agent himself acted in good faith.

CIVIL LAW
Good faith here means that the third person was not aware
of the death of the principal at the time that he contracted
with said agent (Rallos v. Felix Go Chan, G.R. No. L-24332,
Jan. 31, 1978).
Q: What is the effect of a change of circumstance

surrounding the transaction?
A: GR: The authority of the agent is terminated.
XPNs:
1. If the original circumstances are restored within a
reasonable period of time, the agent's authority
may be revived;
2. Where the agent has reasonable doubts as to
whether the principal would desire him to act, his
authority will not be terminated if he acts
reasonably; or
Where the principal and agent are in close daily contact,

the agent's authority to act will not terminate upon a
change of circumstances if the agent knows the principal is
aware of the change and does not give him new
instructions. (De Leon, Comments and Cases on Partnership,

2013 GOLDEN NOTES
COMPROMISE
COMPROMISE Q: Who should seek court’s approval before entering into
a compromise?
DEFINITION
A: The court’s approval is necessary in compromises
Q: What is a compromise? entered into by:
1. Guardians
A: A compromise is a contract whereby the parties, by 2. Parents
making reciprocal concessions, avoid litigation or put an 3. Absentee’s represenatatives
end to one already commenced. (Art. 2028) 4. Administrators or executors of decedents’
estates. (Art. 2032)
Q: What are the characteristics of a compromise?
Q: Can a juridical person enter into a compromise?
A:
1. Consensual A: Yes. Juridical persons may compromise only in the form
2. Reciprocal and with the requisites which may be necessary to alienate
3. Nominate their property. (Art. 2033)
4. Onerous
5. Accessory (in the sense that a prior conflict is pre Q: Can there be a compromise on the criminal aspect of a
supposed) crime?
6. Once accepted, it is Binding on the parties, provided
there is no vitiated consent (McCarthy v. Barber A: None. There may be a compromise upon the civil liability
Steamship Lines, 45 Phil. 488). arising from an offense; but such compromise shall not
7. It is the Settlement of a controversy principally, and is extinguish the public action for the imposition of the legal
but merely incidentally, the settlement of a claim. penalty. (Art. 2034)
(Ibid)
VOID COMPROMISE
Q: What are the kinds of compromise?
Q: When is a compromise void?
A:
1. Judicial – to end a pending litigation A: CVA-FJF
2. Extrajudicial – to prevent a litigation from arising 1. Civil status of person
2. Validity of a marriage or a legal separation
3. Any ground for legal separation
4. Future support
5. Jurisdiction of courts
Q: What is the basic duty of a court whenever a suit is 6. Future legitime (Art. 2035)
filed?
EFFECT
A: The court shall endeavor to persuade the litigants in a
civil case to agree upon some fair compromise. (Art. 2029) Q: What is the effect if two parties enter into a
compromise?
Q: What circumstances may a proceeding in a civil action
be suspended? A: It has the effect of res judicata. A compromise has upon
the parties the effect and authority of res judicata. (Art.
A: 2037)
1. If willingness to discuss a possible compromise is
expressed by one or both parties; or Q: What requirement is necessary in order that a
2. If it appears that one of the parties, before the compromise be executed?
commencement of the action or proceeding, offered
to discuss a possible compromise but the other party A: In order that a compromise may be executed, there must
refused the offer. (Art. 2030) be approval of the court. (Art 2037)
Q: X is indebted to Y in the amount of P50, 000 with the Q: When will a compromise become voidable?
stipulation that the same shall earn interest at 40% per
annum. When X failed to pay, Y sued him. In an effort to A: A compromise which there is a mistake, fraud, violence,
settle the case, X offered to pay the principal but begged intimidation, undue influence or falsity of documents. (Art.
for the reduction of the interest. Y refused, hence, trial 2038)
was conducted. Can the judge reduce the rate of interest?
Note: However, one of the parties cannot set up a mistake of fact
A: Yes. The courts may mitigate the damage to be paid by as against the other if the latter, by virtue of the compromise, has
the losing party who has shown a sincere desire for a withdrawn from a litigation already commenced. (Art. 2038)
compromise. (Art. 2031)

CIVIL LAW
Q: A and B entered into a compromise agreement. A week parties who are duty bound to abide by it and observe
thereafter, B filed an action in court seeking to annul the strictly its terms and conditions”. (Esguerra v. CA, GR
compromise agreement contending that it is one-sided. Is 119310, February 3, 1997))
the action proper?
A: No, because where the compromise is instituted and

carried through in good faith, the fact that there was a
mistake as to the law or as to the facts, except in certain
cases where the mistake was mutual and correctible as
such in equity, cannot afford a basis for setting aside a
compromise. Compromises are favored without regard to
the nature of the controversial compromise, and they
cannot be set aside because the event shows all the gains
have been on one side (Asong v. Intermediate Appellate
Court, May 12, 1989).
Note: if after litigation has been decided by a final judgment, a

compromise should be agreed upon, either or both parties being
unaware of the existence of the final judgment, the compromise
may be rescinded.
Ignorance of a judgment which may be revoked or set aside is not a

valid ground or attacking a compromise. (Art. 2040)
Q: X and Y entered into a compromise agreement

whereby X respected the ownership of Y over a part of a
creek (now a fishpond). Is the agreement valid?
A: No, because that is contrary to public policy and the law.

The creek is a property belonging to the State; hence, it is
part of public domain which is not susceptible to private
appropriation and acquisition. (Maneclang v Intermediate
Appellate Court, 161 SCRA 469
Q: X and Y entered into a compromise agreement,

terminating a suit between them. X failed to comply with
the terms and conditions of the same. What are the
remedies of the aggrieved party?
A: If one of the parties fails or refuses to abide by the

compromise, the other party may either enforce the
compromise, or regard it as rescinded and insist upon his
original demand. (Art 2041).
Q: What is the effect of a contract or a compromise even if

it is disadvantageous to one of the parties?
A: It is still a valid one. It is a long established doctrine that

the law does not relieve a party from the effects of an
unwise, foolish, or disastrous contract, entered into with all
the required formalities and with full awareness of what he
is doing. Courts have no power to relieve parties from
obligations voluntarily assumed, simply because their
contracts turned out to be disastrous deals or unwise
investments. (Tanda v. Aldaya, 89 Phil. 497; Villacorte v.
Mariano, 89 Phil. 341)
It is a truism that “a compromise agreement entered into

by party-litigants, when not contrary to law, public order,
public policy, morals, or good customs is a valid contract
which is the law between the parties themselves. It follows,
therefore, that a compromise agreement, not tainted with
infirmity, irregularity, fraud or illegality is the between the

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
CREDIT TRANSACTIONS a. Onerous– This is a contract where there is
consideration or burden imposed like
Q: What is credit? interest.
b. Gratuitous – This is a contract where there is
A: It is a person’s ability to borrow money by virtue of no consideration or burden imposed. (e.g.
confidence or trust reposed in him by the lender that he commodatum)
will pay what he may promise.
Q: What is bailment?
Q: What is credit transaction?
A: It is the delivery of a personal property for some
A: It refers to an agreement based on trust or belief of particular use, or on mere deposit, upon a contract, express
someone on the ability of another person to comply with or implied, that after the purpose has been fulfilled, it shall
his obligations be redelivered to the person who delivered it, or otherwise
dealt with according to his directions, or kept until he
Q: What do credit transactions include? reclaims it, as the case may be.
A: It includes all transactions involving the purchase or loan Note: Generally, no fiduciary relationship is created by bailment.
of goods, service, or money in the present with a promise No trustee-beneficiary relationship is created.
to pay or deliver in the future.
Q: Who are the parties in a contract of bailment?
Q: What is security?
A:
A: It is something given, deposited, or serving as a means to 1. Bailor- the giver; the party who delivers the
ensure the fulfillment or enforcement of an obligation or of possession or custody of the thing bailed
protecting some interest in the property. 2. Bailee-the recipient; the party who receives the
possession or custody of the thing thus delivered
Q: What is the significance of credit?
Q: What are the contractual bailments with reference to
A: By virtue of the use of credit, more exchanges are compensation?
possible: persons are able to enjoy a thing today but pay it
for later, and through the banking system, the transfer of A:
actual money is eliminated by cancellation of debts and 1. For the sole benefit of the bailor (gratuitous)
credits. e.g. gratuitous deposit, commodatum
Q: What are the kinds of credit transactions? 2. For the sole benefit of the bailee (gratuitous)
e.g. commodatum, mutuum
A:
1. As contracts of security 3. For the benefit of both parties (mutual-benefit
a. Contracts of real security – These are bailments)
contracts supported by collateral/s or
burdened by an encumbrance on property e.g. deposit for compensaton, involuntary deposit,
such as mortgage and pledge pledge and bailments for hire:
b. Contracts of personal security – These are a. hire of things – temporary use
contracts where performance by the b. hire of service – for work or labor
principal debtor is not supported by c. hire of carriage of goods – for carriage
collateral/s but only by a promise to pay or d. hire of custody – for storage
by the personal undertaking or commitment
of another person such as in surety or LOAN
guaranty
2. As to their existence Q: What is loan?
a. Principal contracts– They can exist alone.
Their existence does not depend on the A: It is a contract where one of the parties delivers to
existence of another contract (e.g. another, either something not consumable so that the
commodatum and mutuum) latter may use the same for a certain time and return it, in
b. Accessory contracts – They have to depend which case is called a commodatum; or money or other
on another contract. These accessory consumable things, upon the condition that the same
contracts depend on the existence of a amount of the same kind and quality shall be paid, in which
principal contract of loa (e.g. guaranty case the contract is simply called a loan or mutuum (Art.
proper, suretyship, pledge, mortgage and 1933, NCC).
antichresis)
3. As to their consideration

CIVIL LAW
Q: What are the kinds of loan?

Q: Distinguish loan from:
A: Credit
1. Commodatum – where the bailor (lender) delivers Discount
to the bailee (borrower) a non-consumable thing Rent or lease
so that the latter may use it for a given time and Barter
return the same thing (i.e. identical thing) Deposit
2. Mutuum or Simple Loan – where the bailor
(lender) delivers to the bailee (borrower) money A:
or other consumable thing subject to the CREDIT LOAN
condition that the latter shall pay same amount Delivery by one party
of the same kind and quality Ability to borrow money and the receipt by the
by virtue of the other party of a given
Q: What could be the consideration in a contract of loan? confidence reposed by sum of money, upon an
the lender unto him agreement, expressed
A: that he will pay what he or implied, to repay the
1. As to the borrower, the acquisition of the thing has promised sum loaned, with or
2. As to the lender, the right to demand its return or without interest
its equivalent. DISCOUNT LOAN
Interest is deducted in Interest is taken at the
Q: What may be the object of a contract of loan? advance expiration of a credit
Always on double-name Generally on a single-
A: It depends upon the kind of loan. paper name paper
1. Commodatum – the object is generally not RENT LOAN
consumable; The owner of property
2. Mutuum – the object is consumable. does not lose the
The thing loaned
ownership; he loses his
Q: Distinguish consumable from non-consumable things becomes the property
control over the
of the obligor
property rented during
A: A thing is consumable when it cannot be used in a the period of contract
manner appropriate to its nature without being consumed Landlord-tenant Obligor-obligee
(Art. 418) (e.g. food, firewood, gasoline). relationship relationship
BARTER LOAN
On the other hand, a non-consumable thing is a movable
Subject matter is
thing which can be used in a manner appropriate to its Subject matter are non-
money or other
nature without it being consumed (Art. 418) (e.g. car, fungible things
fungible things
television, radio)
May be gratuitous or
Always onerous
onerous
Q: Distinguish fungible from non-fungible things
There is a mutual sale
In mutuum, there is
resulting in the transfer
A: Fungible thing is one where the parties have agreed to transfer of ownership,
of ownership on both
allow the substitution of the thing given or delivered with there is no sale
sides
an equivalent thing (3 Manresa 58). Non-fungible thing is
one where the parties have the intention of having the In commodatum, the
The parties do not
bailee returns the thing
same identical thing returned after the intended use (Ibid). return the things
after the expiration of
subject of the exchange
Note: As to whether a thing is consumable or not, it depends upon the period agreed upon
the nature of the thing. DEPOSIT LOAN
Safekeeping of the thing
As to whether it is fungible or not, it depends upon the intention of
Lender grants the
deposited. Generally,
the parties. borrower the use of
the depositary cannot
the thing learned
use the thing deposited
Fungibles are usually determined by number, weight or measure.
Depositor can demand Generally, borrower
the return of the thing pays at the end of the
Q: Are non-fungible things irreplaceable?
deposited at any time period
Compensation not
A: GR: Non-fungible things are irreplaceable. They must be Compensation of
applicable to things
returned to the lender after the purpose of the loan had credits applicable
deposited
been accomplished.
Relationship is one of Relationship is one of
XPN: Non-fungible things may be replaced by depositor and lender and borrower;
agreement of the parties. In such case, the contract is depositary or creditor and debtor
barter and not loan

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
Q: What is the legal effect of an accepted promise to Q: What may be the object of commodatum?
deliver something by way of mutuum or simple loan?
A: Both movable and immovable property may be the
A: It is binding upon the parties, but the mutuum or simple object of commodatum (Art. 1937, NCC).
loan itself shall not be perfected until the delivery of the
object of the contract (Art. 1934, NCC). Q: May the bailee in commodatum use the fruits of the
thing loaned?
Q: What is the effect if the loan is for an unlawful
purpose? A: GR: The fruits of the property shall pertain to the bailor
or owner. The bailor does not enjoy the fruits (Art. 1935).
A: If the loan is executed for illegal or immoral or unlawful
purpose or use, the contract is void. The bailor may XPN: If there is a stipulation in the contract allowing the
immediately recover the thing before any illegal act is bailee to enjoy the fruits of the thing loaned, the
committed and provided he is innocent or in good faith stipulation shall be valid (Art. 1940).
(Arts. 1411 and 1412, NCC).
Q: What are the kinds of commodatum?
COMMODATUM AND MUTUUM
A:
COMMODATUM 1. Ordinary commodatum – bailor cannot just
demand the return of the thing at will, because
Q: What is commodatum? there is a period agreed upon by the parties.
A: It is a contract where one of the parties (bailor) delivers 2. Precarium – one whereby the bailor may demand
to another (bailee) something not consumable so that the the thing loaned at will in the following cases:
latter may use the same for a certain time and thereafter a. if the duration of the contract had not
returns it. been stipulated;
b. if the use to which the thing loaned
Q: What are the characteristics of a contract of should be devoted had not been
commodatum? stipulated; or
c. if the use of the thing is merely by
A: tolerance of the owner
1. Real contract – delivery of the thing loaned is
necessary for the perfection of the contract Note: The word “owner” in Art. 1947 (2) is not proper because the
2. Unilateral contract – once subject matter is delivered, bailor need not be the owner of the thing (Pineda, Credit
it creates obligations on the part of only one of the Transactions and Quasi contracts, p. 26, 2006 ed, Art. 1938).
parties (the borrower)
3. Essentially gratuitous Q: What are the consequences of the purely personal
4. Purpose is to transfer the temporary use of the thing character of commodatum?
loaned
5. Principal contract A: GR: Commodatum is purely personal in character hence
6. Purely personal contract death of either bailor or bailee extinguishes the contract
(Art. 1939, NCC)
Q: What are the elements of commodatum?
XPN: By stipulation, the commodatum is transmitted
A: There must be: to the heirs of either or both party.
1. a bailor and bailee
2. the bailee acquires the use of the thing In case of lease of the thing subject of commodatum:
3. it must be gratuitous
GR: The bailee can neither lend nor lease the object of
Q: What could be the subject of commodatum? the contract to a third person.
A: GR: Under Art. 1933, the subject matter of commodatum XPN: Members of the bailee’s household may make
must be non-consumable because the thing must be use of the thing loaned.
returned.
Note: Members of the bailee’s household are not
considered as third persons.
XPN: Consumable goods may be the object of
commodatum if the purpose is not to consume them
XPN to the XPN:
such as when they were loaned merely for ad
Contrary stipulation; or
ostentationem or exhibition purposes. After the affair,
Nature of the thing forbids such use.
the same and identical goods shall be returned to the
lender or bailor (Art. 1936, NCC). Note: Household members are those permanently living or residing
within the same residence including the household helpers.

CIVIL LAW
Q: Distinguish commodatum from lease. bailor remains the owner
A: XPNs:
COMMODATUM LEASE use of the fruits is
Real contract Consensual stipulated;
Object is a non-consumable Object may even be work or enjoyment of the fruits is
and non fungible thing service stipulated; or
Essentially gratuitous Onerous enjoyment of the fruits is
If the bailor is not aware of incidental to its use
Provisions governing Subject Matter
the flaws, he is not liable for
warranty are made Real or personal property
the resulting danger caused
applicable
by such.
Generally non-consumable
Only personal property
MUTUUM things but may cover
consumables if the purpose of
Q: What is mutuum? the contract is for exhibition.
Ownership of the thing
A: It is a contract whereby one of the parties called the Retained by the bailor Passes to the debtor
“lender” delivers to another called the “borrower”, money Thing to be returned
or other consumable thing subject to the condition that the Equal amount of the
Exact thing loaned
same amount of the same kind and quantity shall be paid. same kind and quality
Who bears risk of loss
Bailor Debtor
When to return
Q: What are the characteristics of a contract of mutuum? In case of urgent need even
before the expiration of term Only after the expiration
A: (the contract is in the of the term
1. Borrower acquires ownership of the thing (Art meantime suspended)
1953). Contract
2. If the thing loaned is money, payment must be Contract of use Contract of consumption
made in the currency which is legal tender in the
Philippines and in case of extraordinary deflation or Q: Distinguish mutuum from Lease and barter
inflation, the basis of payment shall be the value of
the currency at the time of the creation of the A:
obligation (Art 1249 and 1250).
MUTUUM LEASE
3. If fungible thing was loaned, the borrower is obliged
Object may be any
to pay the lender another thing of the same kind, Object is money or any
thing, whether movable
quality and quantity even if it should change in consumable (fungible)
or immovable, fungible
value. thing
or non-fungible
Note: Mere issuance of checks does not perfect the contract of
There is transfer of No transfer of
loan. It is only after the checks have been encashed that the ownership ownership
contact may be deemed perfected. Further, when the movable Creditor-debtor Lessor-lessee
thing delivered in loan is not to be returned to the bailor, but may relationship relationship
be substituted or replaced with another equivalent thing, it is a Unilateral Bilateral
fungible thing.
MUTUUM BARTER
Q: Distinguish commodatum from mutuum Subject matter is
Subject matter are non-
money or other
A: fungible things
fungible things
COMMODATUM MUTUUM May be gratuitous or
Object Always onerous
onerous
Non-consumable and Non- Money or consumable While in mutuum, there There is a mutual sale
fungible thing is transfer of resulting in the transfer
Cause ownership, there is no of ownership on both
Gratuitous, otherwise it is a May or may not be sale sides
lease gratuitous The money or
Purpose consumable thing
Use or temporary possession of The parties do not
loaned is not returned
the thing loaned but return the things subject
Consumption but the same amount
of the exchange
of the same kind and
GR: not its fruit because the quantity shall be paid.

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
Q: Can estafa be committed by a person who refuses to
Q: What is the cause in a simple loan? pay his debt or denies its existence?
A: A: No, because the debtor in mutuum becomes the owner

1. As to the borrower – the acquisition of the thing of the thing delivered to him. If he consumed or disposed of
2. As to the lender – the right to demand the return of the thing, the act which is an act of ownership is not
the thing loaned or its equivalent (Monte de Piedad v. misappropriation. Hence, there is no basis for a criminal
Javier, CA, 36 Off. Gaz. 2176). prosecution.
Q: What may be the object of mutuum? Q: Does destruction of the thing loaned extinguish one’s
obligation in a simple loan?
A: Money or fungible and consumable things.
A: The destruction of the thing loaned does not extinguish
Q: Can loan of money be payable in kind? one’s obligation to pay because his obligation is not to
return the thing loaned but to pay a generic thing.
A: Yes, if there is an agreement between the parties (Art.
1958, NCC). Q: Who are the parties to a commodatum? Distinguish.
Q: When is a contract of simple loan perfected? A:

1. Bailor/Comodatario/Commodans – the giver/ lender -
A: Real contracts, such as deposit, pledge and the party who delivers the possession or custody of the
commodatum, are not perfected until the delivery of the thing bailed.
object of the obligation. (Art. 1316, NCC) While mutuum or 2. Bailee/Comodante/Commodatarius – the recipient/
simple loan is not mentioned, it has the same character as borrower - the party who receives the possession or
commodatum. Hence, mutuum is also a real contract which custody of the thing thus delivered.
cannot be perfected until the delivery of the object.
OBLIGATIONS OF THE BAILOR
Q: What is the binding effect of an accepted promise to
lend? Q: What are the obligations of the bailor?
A: An accepted promise to make a future loan is a A:

consensual contract and therefore, binding upon the 1. Allow the bailee the use of the thing loaned for the
parties but it is only after delivery, will the real contract of duration of the period stipulated or until the
loan arise. accomplishment of the purpose.
2. Refund the extraordinary expenses the bailee incurred
Q: What are the governing rules on payment of loan? for the preservation of the thing.
A: It depends on the object of the contract of loan. GR: The bailee must bring to the knowledge of the
bailor such expenses before incurring the same.
Money – governed by Arts. 1249 and 1250, NCC
XPN: In case there is urgency and delay would cause
GR: Payment shall be made in the currency stipulated. imminent danger.
XPN: If not, that currency which is legal tender in the Note: If the extraordinary expenses arise on the occasion of
Philippines. the actual use of the thing loaned by the bailee, the expenses
shall be borne by the bailor and bailee equally, even though
Note: In case of extraordinary inflation – value of the the bailee is without fault (Art. 1949, NCC)
currency at the time of the creation of the obligation.
3. To be liable for damages for known hidden defects.
Consumable or fungible thing – debtor or borrower shall pay 4. Cannot exempt himself from payment of expenses or
another thing of the same kind, quality and quantity even damages by abandonment of the thing to bailee.
if it should change in value. If cannot be done, the value of
the thing at the time of its perfection (delivery) shall be the Q: When is the bailor liable for hidden defects?
basis of the payment of the loan (Art 1955).
A: When the following requisites are present:
Q: May a person be imprisoned for non-payment of debt? 1. there was a flaw or defect in the thing loaned;
2. the flaw or defect is hidden;
A: No. This is because of the constitutional provision under 3. the bailor is aware thereof;
Article III, Section 3 of the 1987 Constitution which 4. he does not advise the bailee of the same; and
expressly provides that no person shall be imprisoned for 5. the bailee suffers damages by reason of said flaw
non-payment of a debt or poll tax. or defect.

CIVIL LAW
Q: What is the cause of action against the bailor who did

not disclose the flaw or defect? Q: Must the bailor be the owner of the thing loaned?
A: Action for recovery of damages on the ground of quasi- A: No. The bailor in commodatum need not be the owner of
delict because of negligence or bad faith. the thing loaned. It is sufficient that he has possessory
interest over subject matter (Art. 1938, NCC).
Q: What is the effect if both parties are aware of the flaws
or defects? Note: A mere lessee or usufructuary may gratuitously give the use
of the thing leased or in usufruct, provided there is no prohibition
A: The bailee is deemed to have assumed a risk. The bailor against such.
is not liable for the damages suffered by the bailee by
reason thereof. BAILEE
RIGHTS OF A BAILOR Q: What is the nature of liability of two or more bailees to

a contract of commodatum?
Q: Can the bailor demand the return of thing loaned
anytime he pleases? A: When there are 2 or more bailees to whom a thing is
loaned in the same contract, they are liable solidarily. (Art.
A: GR: No. The return of the thing loaned may be 1945, NCC)
demanded by the bailor only (1) after the expiration of the
Note: Their liability is solidary in order to protect the bailor’s rights
period stipulated or (2) after the accomplishment of the use
over the thing loaned.
for which it is constituted.
Q: Following the principle of autonomy of contracts, may
XPNs:
the parties to a contract of commodatum validly stipulate
1. In case of urgent need by the bailor
that the liability of the bailees shall be joint?
2. In case of precarium
3. If the bailee commits an act of ingratitude specified
A: No. Article 1245 expressly provides that in a contract of
in Article 765 to the bailor (Art. 1948), to wit:
commodatum, when there are two or more bailees to
a. If the bailee should commit some
whom a thing is loaned in the same contract, they are liable
offenses against the person, honor or the
solidarily. It constitutes as an exception to the general rule
property of the bailor, or his wife or children
of “joint obligations” where there are two or more debtors,
under his parental authority;
who concur in one and same obligation under Articles 1207
b. If the bailee imputes to the bailor any
and 1208. Solidarity is provided to safeguard effectively the
criminial offense, or any act involving moral
rights of the bailor over the thing loaned.
turpitude, even though he should prove it,
unless the crime or the act has been
OBLIGATIONS OF THE BAILEE
committed against the bailee, his wife or
children under his authority; or
Q: What are the obligations of a bailee?
c. If the bailee unduly refuses the bailor
support when the bailee is legally or morally
A:
bound to give support to the bailor.
Pay for the ordinary expenses for
As to ordinary
the use and preservation of the
Note: The rationale for the application of Art. 765 which refers to expenses
donations is the fact that commodatum, like donation, is gratuitous thing
in nature. Liable for loss even through
fortuitous event when
Q: If the contract of commodatum is a precarium, will Art. [ask-dl]:
1942 (1) and (2) still apply? 1. when being able to save
either of the thing
A: It depends. If there has been a demand on the part of borrowed or his own thing,
the bailor before the loss of the thing under the he chose to save the latter
As to the loss
circumstances set forth under Art. 1942 (1) and (2) and the 2. he keeps it longer than the
of the thing in
bailee did not return the thing, then the latter is liable. period stipulated, or after
case of
However, if there has been no demand on the part of the the accomplishment of its
fortuitous
bailor and the thing was lost, the bailor is estopped and use (in default);
event
cannot hold the bailee liable for under a contract of 3. the thing loaned has been
precarium, the use of the thing by the bailee depends on delivered with appraisal of
the pleasure of the bailor and no time is fixed for such use. its value
Hence, demand on the part of the bailor is needed for the 4. when he lends or leases it
return of the thing. Without such, loss of the thing on the to third persons who are
hands of the bailee will not make him liable. not members of his
household

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
5. there is deviation from the Q: Will the stipulation that the bailee may make use of the
purpose fruits of the thing loaned impair the essence of
Not liable for the deterioration of commodatum?
As to the the thing loaned caused by the
ordinary wear and tear of the A: No. It will not impair the essence of commodatum
deterioration
thing loaned. (Art. 1943) because the actual cause or consideration therefore is still
of the thing
the liberality of the bailor or lender.
loaned
Note: When there are two or more
bailees, their liability is solidary. Q: Is there right of retention in commodatum?
RIGHTS OF A BAILEE A: GR: No. The bailee cannot retain the thing loaned on the
ground that the bailor owes the bailee.
Q: What are the rights of a bailee?
XPN: The bailee has the right of retention for claims of
A: FRUD damages which the bailee incurred or suffered by
-Use of the thing; reason of the hidden defects or flaws of the thing
-Make use of the fruits of the thing when such right is loaned, of which he was not informed or advised by the
stipulated in the contract; bailor.
-Not answerable for the deterioration of the thing
loaned due to the use thereof and without his fault; Note: The reason for the general rule that there is no right of
and retention is that “bailment implies a trust that as soon as the time
-Right of retention for damages due to hidden defects has expired or the purpose accomplished, the bailed property must
or flaws of the thing of which he was not advised by be returned to the bailor.” Also, Art. 1287 provides that
compensation shall not be proper when one of the debts arises
the bailor.
from the obligations of a bailee in commodatum (Art. 1287,
reworded)
Q: Art. 1178 of the NCC provides that all rights acquired by
virtue of an obligation are transmissible. Is the right to use Q: Suppose during the said retention of the bailee by
the thing by virtue of a contract of commodatum reason of hidden defects, the thing is lost due to a
transmissible? fortuitous event. Can the bailor hold the bailee liable for
said loss based on Art.1942 (2)?
A: No, it is not transmissible for 2 reasons:
A: No, the bailee cannot be held liable for the loss. Art.
-Art. 1178 provides that the transmissibility of said 1942 (2) contemplates wrongful retention or a situation
acquired rights are either subject to the laws or to a where the bailee is not entitled to retain the thing loaned.
contrary sipulation; and
-Art. 1939 provides that a contract of commodatum is Note: Article 1942 (2) provides that the bailee is liable for the loss
purely personal in character. of the thing, even if it should be through a fortuitous event if he
keeps it longer than the period stipulated, or after the
Note: To rule otherwise would be to run counter to the purely accomplishment of the use for which the commodatum has been
personal character of the commodatum and to the proviso that constituted.
transmissibility is subject to the law governing such obligations.
Q: What if the bailee is entitled to payment or
Q: What is the legal effect if the bailee pays for the use of reimbursement of expenses incurred or damages suffered
the thing? and the bailor offers the thing loaned as payment for said
expenses or damages, would such offer be valid or not, in
A: The contract ceases to be commodatum; it becomes view of the prohibition under Art. 1952 which states that
lease. the bailor cannot exempt himself from the payment of
expenses or damages by abandoning the thing to the
Q: In commodatum, does the bailee acquire the use of the bailee?
fruits of the thing?
A: The offer is not valid.It may be considered as dation in
A: No. The bailee in commodatum acquires only the use of payment. In this case, the abandonment done by the bailor
the thing loaned but not its fruits (Art. 1935, NCC). was made in favor of the bailee for the payment of the
expenses incurred by the latter, hence, a violation of what
Q: Is a stipulation that the bailee may make use of the the law has expressly prohibited under Article 1952.
fruits of the thing loaned valid?
Q: When is the bailee not entitled to reimbursement for
A: Yes. It is understood that the enjoyment of the fruits the expenses he incurred?
must only be incidental to the use of the thing. It should
not be the main cause; otherwise, the contract is not a A: If, for the purpose of making use and preservation of the
commodatum but a usufruct (Art. 1940, NCC). thing, the bailee incurs expenses other than those ordinary
and extraordinary expenses.

CIVIL LAW
Q: Before he left for Riyadh to work as a mechanic, Pedro Q: What is the rule on interests?
left his van with Tito, with the understanding that the
latter could use it for one year for his personal or family A: GR: No interest shall be due unless it is stipulated in
use while Pedro works in Riyadh. He did not tell Tito that writing. (Art. 1956, NCC)
the brakes of the van were faulty. Tito had the van tuned
up and the brakes repaired. He spent a total amount of XPN: In case of interest on damages or indemnity for
P15,000.00. After using the vehicle for two weeks, Tito damages, it need not be in writing.
discovered that it consumed too much fuel. To make up
for the expenses, he leased it to Annabelle. Two months Q: What is the basis of the right to interest?
later, Pedro returned to the Philippines and asked Tito to
return the van. A: It only arises by reason of the contract (stipulation in
writing) for the use of money or by reason of delay or
Unfortunately, while being driven by Tito, the van was failure to pay principal on which interest is demanded due
accidentally damaged by a cargo truck without his fault. to a breach of an obligation (Baretto v. Santa Marina, No.
11908, feb. 4, 1918).
Who shall bear the P15,000.00 spent for the repair of the
van? Explain. If the obligation consists of the payment of a sum of
money, and the debtor incurs delay, the indemnity for
A: The contract between Pedro and Tito is one of damages shall be the payment of legal interest (Philrock,
commodatum. Of the P15, 000.00 spent, Pedro, the bailor, Inc. v. Construction Industry Arbitration Commission, G.R.
shall bear the expenses for the repair of the faulty brakes, Nos. 132848-49, June 25, 2001)
they being extraordinary expenses incurred due to the non-
disclosure by the bailor of the defect or fault; Tito, on the Q: Can there be interest in equitable mortgage?
other hand, shall shoulder "that part of the P15,000.00
spent for the tune-up”, said expense being ordinary for the A: No. Interest could not be collected on equitable
use and preservation of the van. mortgage because the same is not stipulated in writing (Tan
v. Valdehueza, G.R. No. L-38745, Aug. 6, 1975).
Q: Who shall bear the costs for the van's fuel, oil and
other materials while it was with Tito? Explain. (2005 Bar Note: One which, although it lacks the proper formalities or other
Question) requisites of a mortgage required by law, nevertheless reveals the
intention of the parties to burden real property as a security for a
debt, and contains nothing impossible or contrary to law.
A: The costs for the fuel and other materials are considered
ordinary expenses, and consequently Tito, the bailee, shall
Q: Can paid unstipulated interest be recovered?
shoulder them (Art. 1941, NCC)
A: If paid by mistake the debtor may recover as in the case
Q: Does Pedro have the right to retrieve the van even
of solutio indebiti or undue payment. However if payment
before the lapse of one year? Explain. (2005 Bar Question)
is made voluntarily, no recovery can be made as in the case
of natural obligation. (Art. 1960)
A: No, Pedro cannot demand the return of the van until
after the expiration of the one-year period stipulated.
Q: Siga-an granted a loan to Villanueva in the amount
However, if in the meantime he should have urgent need of
of P540,000.00. Such agreement was not reduced to
the van, he may demand its return or temporary use.
writing. Siga-an demanded interest which was paid by
Villanueva in cash and checks. The total amount
Q: Who shall bear the expenses for the accidental damage
Villanueva paid accumulated to P1,200,000.00. Upon
caused by the cargo truck, granting that the truck driver
advice of her lawyer, Villanueva demanded for the return
and truck owner are insolvent? Explain. (2005 Bar
of the excess amount of P660,000.00 which was ignored
Question)
by Siga-an.
1. Is the payment of interest valid?
A: Both Tito and Pedro shall bear equally the costs of the
2. Is solutio indebiti applicable? Explain. (2012 Bar
extraordinary expenses, having been incurred on the
Question)
occasion of actual use of the van by Tito, the bailee, even
though he acted without fault. [Art. 1949(2), NCC]
A:
1. No. Payment of monetary interest is allowed only if:
INTEREST AND THE SUSPENSION OF THE USURY LAW
a. there was an express stipulation for the
Q: What is interest?
payment of interest; and
A: It is the compensation to be paid by the borrower for the
b. the agreement for the payment of
use of the money lent to him by the lender.
interest was reduced in writing.

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
The concurrence of the two conditions is required for the indemnity for damages at the rate stipulated by the
payment of monetary interest. Thus, collection of interest parties or if rate is not stipulated, at the legal rate of
without any stipulation therefor in writing is prohibited by 12% per annum in case of loan or forbearance of
law. money, goods and credit otherwise, at the rate of 6%
per annum even in the absence of stipulation for the
2. Yes. The quasi-contract of solutio indebiti harks back to payment of interest. Such interest as indemnity for
the ancient principle that no one shall enrich himself damages is payable only in case of default or non-
unjustly at the expense of another.The principle of solutio performance of contract.
indebiti applies where (1) a payment is made when there
exists no binding relation between the payor, who has no Note: If the obligation consists in the payment of a sum of money
duty to pay, and the person who received the payment; and and the debtor incurs in delay, the debtor is liable for damages.
(2) the payment is made through mistake, and not through (Art. 2209, NCC)
liberality or some other cause. We have held that the
principle of solutio indebiti applies in case of erroneous Q: What is the basis for the interest rate for compensatory
payment of undue interest (Siga-an v. Villanueva, G.R. No. interest?
173227, Jan. 20, 2009.)
A:
Q: May interest be adjudged on unliquidated claims? 1. Central Bank Circular 416 – 12% per annum in cases of:
a. Loans
A: GR: No. b. Forbearance of money, goods and credits
c. Judgement involving such loan or forbearance
XPN:Unless the same can be established with
Note: During the interim period from the date of
reasonable certainty (Atlantic Gulf and Pacific Company
judgment until actual payment.
of Manila, Inc. v. CA, G.R. Nos. 114841-42, Aug. 23,
1995)
d. In the absence of a stipulation as to interest, the
loan due will now earn interest at the legal rate of
Q: In case the interest may be adjudged on unliquidated
12% per annum. (Sulit v. CA, G.R. No. 119247,
claim but the pleadings in court did not spell out said
Feb. 17, 1997).
amount with certitude, when shall legal interest thereon
run?
2. Art. 2209, NCC – 6% per annum in cases of:
a. Other sources (i.e. sale)
A: The legal interest thereon shall run only from the
b. Damages arising from injury from person.
promulgation of judgment of said court, it being at that
c. Loss of property which does not involve a loan.
stage that the quantification of damages may be deemed to
have been reasonably ascertained. (Ibid)
3. Interest accruing from unpaid interest (compound
interest) – there must first be a stipulation for
Q: What is the actual base for computing such legal
payment of interest due and this shall earn interest
interest?
from the time it is judicially demanded although the
obligation may be silent upon this point.
A: It shall be the amount as finally adjudged by the
Supreme Court. (Ibid)
Q: What is forbearance?
Q: What are the classes of interest?
A: It signifies the contractual obligation of the creditor to
forbear during a given period of time to require the debtor
A:
payment of an existing debt then due and payable. Such
1. Simple – interest which is paid for the use of the
forbearance of giving time for the payment of a debt is, in
money, at a certain rate stipulated in writing by the
substance, a loan (91 C.J.S. 598).
parties.
2. Compound – interest which is imposed upon accrued
Q: What is the interest rate imposable for back rentals?
interest, that is, the interest due and unpaid.
3. Legal – that interest which the law directs to be paid in
A: Back rentals being equivalent to a loan or forbearance of
the absence of any agreement as to the rate.
money, the interest rate due thereon is 12% per annum
from the time of extra-judicial demand (Catungal v. Hao,
Q: When can there be:
G.R. No. 134972, Mar. 22, 2001).
1. Monetary interest;
2. Compensatory interest? Note: Back rental is the full extended value of land let by lease,
payable by tenant for life or years.
A:
1. Monetary interest must be expressly stipulated in Q: What is the rule on compounding of interest?
writing and it must be lawful. (Art. 1956, NCC)
A: GR: Accrued interest (interest due and unpaid) shall not
2. Indemnity for damages (compensatory interest) – the earn interest.
debtor in delay is liable to pay legal interest as

CIVIL LAW
XPN: When: the debtor incurs in delay, he has to pay interest by way of
1. judicially demanded; or damages (Angel Jose Warehousing v. Chelda Enterprises, 23
2. there is express stipulation made by the parties – SCRA 119).
that the interest due and unpaid shall be added
to the principal obligation and the resulting total Q: What is the rationale behind the invalidity of
amount shall earn interest. unconscionable Interest rate in a loan despite the
suspension of the Usury law?
Note: Compounding of interest may be availed only when there is
a written stipulation in the contract for the payment of interest. A: The Supreme Court said nothing in said circular (Circular
905) suspending Usury Law grants lender authority to raise
Q: What is floating interest? interest rates to levels which will either enslave their
borrowers or lead to a hemorraghing of their assets
A: It is the interest stipulated by banks which is not fixed (Almeda v. CA, G.R. No. 113412, Apr. 17, 1996)
and made to depend upon the prevailing market
conditions, considering the fluctuating economic In the case of Medel v. CA, G.R. No. 131622, Nov. 27, 1998,
conditions. the court ruled that while stipulated interest of 5.5% per
month on a loan is usurious pursuant to CBC No. 905, the
Q: Is a stipulation for floating interest valid? same must be equitably reduced for being iniquitous,
unconscionable and exorbitant. It is contrary to morals. It
A: No. A stipulation for a floating rate of interest in a letter was reduced to 12% per annum in consonant with justice
of credit in which there is no reference rate set either by it and fairplay.
or by the Central Bank, leaving the determination thereof
to the sole will and control of the lender bank is invalid. The Court had previously tagged a 5% monthly interest rate
While it may be acceptable for practical reasons given the agreed upon as “excessive, iniquitous, unconscionable and
fluctuating economic conditions for banks to stipulate that exorbitant, contrary to morals, and the law.” We need not
interest rates on a loan not be fixed and instead be made unsettle the principle we had affirmed in a plethora of
dependent on prevailing market conditions, there should cases that stipulated interest rates of 3% per month and
be a reference rate upon which to peg such variable higher are excessive, iniquitous, unconscionable, and
interest rates (Consolidated Bank and Trust Corp. (Solid exorbitant (Arthur F. Mechavez vs. Marlyn M,
Bank) v. CA, G.R. No. 114672, Apr. 19, 2001). Bermudez, G.R. No. 185368, Oct. 11, 2012).
Q: In an action for Recovery of damages for injury to Q: Samuel borrowed P300,000.00 housing loan from the
person and loss of property, a judgment was rendered bank at 18% per annum interest. However, the promissory
ordering the defendant Mark to pay Ron with legal note contained a proviso that the bank "reserves the right
interest of 12% from the filing of the complaint until paid. to increase interest within the limits allowed by law." By
The decision became final and executory. Christopher virtue of such proviso, over the objections of Samuel, the
argues that the rate of 12% under Central Bank Circular bank increased the interest rate periodically until it
416 was misapplied. How much by way of legal interest reached 48% per annum. Finally, Samuel filed an action
should a judgment debtor pay the judgment creditor? questioning the right of the bank to increase the interest
rate up to 48%. The bank raised the defense that the
A: The legal interest rate of 6% per annum will apply. The Central Bank of the Philippines had already suspended the
judgments spoken of and referred to under Central Bank Usury Law. Will the action prosper or not? Why? (2001 Bar
Circular 416 are judgments in litigations involving loans or Question)
forbearances of money, goods or credits. Any other kind of
monetary judgments which has nothing to do with, or A: The action will prosper. While it is true that the interest
involving loans or forbearance of any money goods or ceilings set by the Usury Law are no longer in force, it has
credits does not fall within the coverage of said law. been held that PD No. 1684 and CB Circular No. 905 merely
Coming to the case at bar, the decision herein sought to be allow contracting parties to stipulate freely on any
executed is one rendered in an Action for Damages for adjustment in the interest rate on a loan or forbearance of
injury to persons and loss of property and does not involve money but do not authorize a unilateral increase of the
any loan, much less forbearances of any money, goods or interest rate by one party without the other's consent (PNB
credits (Reformina v. Tomol, 139 SCRA 260). v. CA, G.R. No. 107569, Nov. 8, 1994). To say otherwise will
violate the principle of mutuality of contracts under Article
Q: What is the effect of a usurious transaction? 1308 of the Civil Code. To be valid, therefore, any change of
interest must be mutually agreed upon by the parties
A: The principal debt remaining without stipulation for (Dizon v. Magsaysay, G.R. No. L-23399, May 31, 1974). In
payment of interest can still be recovered by judicial action. the present problem, the debtor not having given his
In case of such demand, and the debtor incurs in delay, the consent to the increase in interest, the increase is void.
debt earns interest from the date of the demand. Such
interest is not due to stipulation, for the imposition of a
usurious interest void. Rather, it is due to the general
provision of law that in obligations to pay money, where

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
DEPOSIT or may be immovable fungible thing
(judicial)
Q: What is deposit? Relationship
Depositor-depositary Lender-borrower
A: It is a contract whereby a person (depositor) delivers a Compensation
thing to another (depositary), for the principal purpose of No compensation of
safekeeping it, with the obligation of returning it when things deposited with There can be
demanded. each other (except by compensation of credits
mutual agreement)
Q: When is a contract of deposit constituted?
DEPOSIT COMMODATUM
A: From the moment a person receives a thing belonging to
Principal Purpose
another, with the obligation of safely keeping it and
Transfer of use
returning the same upon demand. Safekeeping
Use of the thing
Q: What are the characteristics of contract of deposit? Nature
May be gratuitous or
Always gratuitous
A: onerous
1. Real contract – because it can only be perfected by the
delivery of the object of the contract.
DEPOSIT AGENCY
However, an agreement to constitute a future deposit Purpose
is a consensual contract and is therefore binding. Representation of the
Safekeeping
principal by the agent
Note: There is no consensual contract of deposit; there is Reason for custody of the thing
only a consensual promise to deliver which is binding if such
The custody of the
is accepted.
thing is the principal It is merely an incidental
and essential reason obligation of the agent
2. Object of the contract must be a movable property.
for the deposit
However, in cases of judicial deposit, the subject
Nature
matter may be a real property.
It is generally onerous or
Essentially gratuitous
3. Purpose is for the safekeeping of the thing deposited. for compensation
This must be the principal purpose and not only
secondary. DEPOSIT LEASE
Principal Purpose
4. It is gratuitous, unless there is a: Safekeeping Use of the thing
a. Contrary agreement; or When to return
b. The depositary is engaged in the business of Upon demand of the Upon termination of
storing goods, like a warehouseman. (Art. 1965) depositor the lease contract.
5. The depositary cannot use the thing deposited, unless: DEPOSIT SALE
a. Permitted by the depositor; or
Ownership
b. Preservation of the thing requires its use, but only
Retained by depositor. Transferred to buyer.
for said purpose.
Q: What is the nature of advance payment in a contract of
Q: Distinguish deposit from:
sale?
1. Mutuum;
2. Commodatum;
A: A so called deposit of an advance payment in the case of
3. Agency;
a sale is not the deposit contemplated under Art. 1962. It is
4. Lease; and
that advance payment upon which ownership is transferred
5. Sale.
to the seller once it is given subject to the completion of
payment by the buyer under an agreement (Cruz v. Auditor
A:
General, No. L-12233, May 30, 1959).
DEPOSIT MUTUUM
Purpose
Safekeeping/custody Consumption Q: Is a contract of deposit gratuitous?
When to return
Upon expiration of the A: GR: A contract of deposit is generally gratuitous.
Upon demand of the
term granted to the
depositor
borrower XPNs:
Subject Matter 1. Agreement to the contrary by the parties
Movable (extrajudicial) Money or other

CIVIL LAW
2. When the depositary is engaged in the business abandoning the ruling in Sia v. CA, making it conform with
of storing goods (warehouseman) for the General Banking Law of 2000.
compensation and not out of pure generosity
3. If the parties agreed that compensation be paid Fixed, savings and current deposits in banks and other
4. Where the property is saved from destruction similar institutions are not true deposits but are considered
without knowledge of the owner, the latter is simple loans because they earn interest. (Art. 1980, NCC)
bound to pay the other person just compensation
(as in case of involuntary deposit) Q: Is ownership necessary in a contract of deposit?
Q: What are the kinds of deposit? A: No. The depositor need not be the owner of the thing
deposited because the purpose of the contract is
A: safekeeping and not transfer of ownership.
1. Judicial (sequestration)
2. Extra-judicial Note: A deposit may also be made by two or more persons each of
a. Voluntary – the delivery is made by the will of the whom believes himself entitled to the thing deposited with a third
depositor (Art. 2005) person, who shall deliver it in a proper case to the one to whom it
belongs.
b. Necessary – made in compliance with a legal
obligation, or on the occasion of any calamity, or
PARTIES TO A CONTRACT OF DEPOSIT
by travelers in hotels and inns, or by travelers
with common carriers (Art. 1996)
Q: Who are the parties to a contract of deposit?
Q: Distinguish judicial from extra-judicial deposit?
A:
1. Depositary – to whom the thing is deposited
A:
2. Depositor – the one who deposits the thing
JUDICIAL EXTRA-JUDICIAL
Creation Q: May the depositary change the manner of the deposit?
Will of the contracting
Will of the court
parties A: Yes, if he may reasonably presume that the depositor
Purpose would consent to the change if the latter knew of the facts
Security or to ensure the of the situation. However, before the depositary may make
right of a party to property such change, he shall notify the depositor thereof and wait
Custody and safekeeping
or to recover in case of for his decision, unless delay would cause danger (Art.
favorable judgment 1974, NCC).
Subject Matter
Movables or immovables Q: What is the degree of care required?
Movables only
but generally immovables
Cause A: The depositary shall observe the diligence of a good
Generally gratuitous but father of a family in the performance of his obligations to
Always onerous
may be compensated protect and preserve the thing deposited, unless a higher
When must the thing be returned degree of diligence is stipulated by the parties.
Upon order of the court or
Upon demand of depositor
when litigation is ended Q: Is a guardian a depositary of the ward’s property?
In whose behalf it is held
Depositor or third person A: The guardian is not holding the funds of the ward merely
Person who has a right for safekeeping exclusively but also intended for the latter’s
designated
maintenance and support. Losses, if any without the fault
Q: What is the nature of the rent of safety deposit boxes? of the guardian shall be deducted from the funds of the
ward (Phil. Trust Co. v. Ballesteros, No. L-8261, April 20,
A: The rent of safety deposit boxes is an ordinary contract 1956).
of lease of things and not a special kind of deposit because
the General Banking Law of 2000 has excluded the renting Q: When the deposit consists of money, what must be
out of safety deposit box where the bank shall act as agent returned upon the extinguishment of contract?
or depositary with the obligation to keep the funds,
securities and other effects which it receives duly separate A: The provision of Article 1896 shall apply wherein the
from the bank’s own assets and liabilities. money deposited must be returned together with interest
on the sums he has applied to his own use from the day on
The case of Sia v. CA, G.R. No. 102970, May 13, 1993 which he did so, and on those which he still owes after the
enunciating that a rent of a safety deposit box is a special extinguishment of thedeposit. The imposition of interest is
kind of deposit, was decided under the former General in the form of penalty for the use of money for himself
Banking Act. However, SC has not yet decided a case there being no agreement to pay the interest at the outset,
otherwise, the contract will be a mutuum.

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
A: It is a deposit in which the depositee is not to return the
Q: Can the depositary demand that the depositor should specific money deposited, but he is to return an equal sum
prove his ownership of the thing deposited? to the depositor.
A: GR: No. Q: Maneja assigned and conveyed to Serrano her time

deposit. Notwithstanding series of demands for
XPN: Should he discover that the thing has been stolen encashment of the aforementioned time deposits, OBM
and who its true owner is, he must advise the latter of refused to honor the time deposits. Is OBM liable to
the deposit. Serrano despite the fact the Central Bank declared that
OBM could no longer operate due to its chronic reserve
Note: If the depositary has reasonable grounds to believe that the deficiencies?
thing has not been lawfully acquired by the depositor, the former
may return the same. A: Yes. Bank deposits are in the nature of irregular deposits.
They are really loans because they earn interest. All kinds of
Q: May the depository return the thing to the owner bank deposits, whether fixed, savings or current, are to be
should he knew of the identity of the latter? treated as loans and are to be covered by the law on loans.
Current and savings deposits are loans to a bank because it
A: The depositary is not authorized to return the thing can use the same. Serrano, in making time deposits that
unceremoniously to the alleged owner without the earn interest with OBM was in reality a creditor of the
knowledge of the depositor. His duty is merely to advise the respondent bank, and not a depositor. The bank was in turn
owner of the deposit. a debtor of Serrano. Failure of OBM to honor the time
deposits is failure to pay its obligation as a debtor and not a
Note: If the depositor insists on his ownership as against the true
breach of trust arising from a depositary’s failure to return
owner, the depositary may file an Interpleader suit against both of
them to avoid responsibility. If the identity of the true owner the subject matter of the deposit (Serrano v. Central Bank,
cannot be ascertained, the depositary may return the thing to the G.R. No. 30511, Feb. 14, 1980).
depositor (p. 82, Credit Pineda).
Q: What is the rule when there are two or more
Q: What should the depositary do if he loses the thing depositors?
through force majeure or government order and receives
money or another thing in its place? A: If they are not solidary, and the thing admits of division,
each one cannot demand more than his share.
A: He shall deliver the sum or other thing to the depositor.
When there is solidarity or the thing does not admit of
Q: What is the duty of the depositary’s heir if he sold the division, the provisions of Art. 1212 and 1214 shall govern.
thing which he did not know was deposited? However, if there is a stipulation that the thing should be
returned to one of the depositors, the depositary shall
A: He shall be bound to return the price he may have return it only to the person designated (Art. 1985, NCC).
received or to assign his right of action against the buyer in
case the price has not been paid by him (Art. 1991, NCC). Q: What are the obligations of the depositor?
Note: The provision applies only when the depositary has died and A:
left heir/s who took possession of the thing in the concept of an 1. Payment for necessary expenses for preservation
owner and sold it in good faith to a third person. a. If the deposit is gratuitous – reimburse depositary
b. With compensation – no need for
Q: What is the right of the depositary if he has not been reimbursement; expenses borne by depositary
paid the amount due to him?
2. GR: Pay losses incurred by depositary due to the
A: The depositary may retain the thing in pledge until full character of the thing deposited.
payment of what may be due him by reason of the deposit
(Art. 1994, NCC). XPNs:
a. When at the time of deposit, the depositor was
Q: May the depositary sell the thing retained in pledge? not aware of the dangerous character of the thing
or was not expected to know it;
A: Yes, Article 2108 provides that if, without the fault of the b. When the depositor notified the depositary; or
pledgee, there is danger, destruction, impairment, or c. When the depositary was aware of it without
diminution in value of the thing pledged, he may cause the advice from the depositor.
same to be sold at public auction. The proceeds of the
auction shall be a security for the principal obligation in the 3. In case of an onerous deposit, to pay the
same manner as the thing originally pledged (Pineda, p. 93, compensation agreed upon as consideration for the
2006 ed). deposit
Q: What is an irregular deposit? Q: To whom should the thing deposited be returned?

CIVIL LAW
A: ii. Deposits the thing to a 3rd person who is

1. To the depositor, to his heirs and successors, or to the manifestly careless or unfit although there is
person who may have been designated in the contract authority.
(Art. 1972, NCC).
2. If the depositor was incapacitated at the time of 4. If the thing should earn interest:
making the deposit, to his guardian or administrator or a. collect interest as it falls due
to the depositor himself should he acquire capacity b. take steps to preserve the value and rights
(Art. 1970, NCC). corresponding to it
3. Even if the depositor had capacity at the time of
making the deposit but he subsequently loses his 5. Not to commingle things if so stipulated
capacity during the deposit, the thing must be
returned to his legal representative (Art.1986). 6. GR: Not to make use of the thing deposited
Q: Where should the thing deposited be returned? XPNs:

a. When preservation of thing deposited requires its
A: GR: At the place agreed upon. use
b. When authorized by depositor
XPN: In the absence of stipulation, at the place where
the thing deposited might be, even if it should not be GR: In such case it is no longer a deposit but a
the same place where the original deposit was made contract of loan or commodatum, as the case
provided the transfer was accomplished without may be.
malice on the part of the depositary (Art. 1987)
XPN: Principal reason for the contract is still
Q: When should the thing deposited be returned? safekeeping, it is still deposit.
A: GR: Upon demand or at will, whether or not a period has 7. When the thing deposited is delivered sealed and
been stipulated. closed:
a. return the thing in the same condition
XPNs: b. pay damages if seal be broken through his fault
1. Thing is judicially attached while in the c. keep the secret of the deposit when seal is
depositary’s possession. broken w/ or w/o his fault
2. Depositary was notified of the opposition of a d. However, the depositary is authorized to open
third person to the return or the removal of the the seal or lock when:
thing deposited (Art. 1988, NCC) i. there is presumed authority (i.e. the key
3. When the thing is stolen and the period of 30 is delivered)
days from notice to the true owner for him to ii. out of necessity
claim it had not yet lapsed, the depositary cannot
return the thing deposited to the depositor. This 8. GR: Pay for any loss or damage that may arise due to
is intended to protect the true owner. his fault
4. In case of gratuitous deposit, if the depositary has
a justifiable reason for not keeping the deposit. If XPN: Liability of loss through fortuitous event
the depositor refuses, the depositary may secure
its consignation from the court (Art. 1989, NCC). XPNs to XPN (Art. 1979): Even in case of loss through
fortuitous event, still liable if (USAD):
VOLUNTARY DEPOSIT a. Stipulated
b. he Uses thing w/o depositor’s permission
Q: What are the obligations of a depositary in voluntary c. he Delays its return
deposit? d. he Allows others to use it (even if he himself
is authorized to use it)
A:
1. To keep the thing safely and return it 9. Return the thing deposited with all its fruits,
2. Exercise same diligence as he would exercise over his accessions, and accessories (Art. 1983)
own property
3.
rd
Not to deposit the thing with a 3 person, except: 10. Pay interest on sums converted to personal use if the
a. When expressly authorized by stipulation; and deposit consists of money
b. When the preservation of the thing requires its
use (Art. 1977) Q: When is a voluntary deposit extinguished?
Note: Depositary is liable for the loss if: A:

i. He deposits the thing to a 3rd person without 1. Loss or destruction of thing deposited;
authority, even though the loss is due to fortuitous 2. In gratuitous deposit, upon death of either depositor
events or depositary; or

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
3. Other causes (e.g. return of thing, novation, expiration 2. It includes lost or damages in hotels annexes such as
of the term, fulfillment of resolutory condition) vehicles in the hotel’s garage.
NECESSARY DEPOSIT Q: Venus was the owner of Suzuki Grand Vitara which was
insured with Pioneer Insurance for loss and damage.
Q: When is deposit considered as necessary? When she arrived and checked in at Heaven’s Hotel before
midnight, its parking attendant, John, got the key to said
A: Vitara. At about one in the morning, Venus was awakened
1. When it is in compliance with a legal obligation; in her room by a telephone call from the Hotel Chief
2. It takes place on the occasion of any calamity, such as Security Officer who informed her that her Vitara was
fire, storm, flood, pillage, shipwreck, or other similar carnapped while it was parked unattended at the parking
events; area of the bank near the hotel. May the insurance
3. Made by passengers with common carriers; or company, by right of subrogation, recover from the hotel
4. Made by travelers in hotels or inns. the damages it paid to Venus?
Q: When can the keepers of hotels or inns be held A: Yes. The contract of necessary deposit existed between
responsible for loss of thing in case of deposit? the insured Venus and the hotel. Article 1962, in relation to
Article 1998, of the Civil Code defines this contract. Plainly,
A: When both are present: Venus deposited for safekeeping her vehicle through the
1. they have been previously informed by guest hotel’s employee. From Venus’ delivery, when she handed
about the effects the latter brought in, and the keys to John, the contract was perfected. Thus, there is
2. the guest has taken precautions prescribed for the obligation of safely keeping it and returning it.
their safekeeping. Ultimately, the hotel is liable for the loss of Venus’ vehicle
(Durban Apartments Corporation vs. Pioneer Insurance
Note: They are liable regardless of the degree of care Surety Corporation, G.R. No. 179419, January 12, 2011).
exercised when:
a. loss or injury is caused by his employees or even Q: Can the keepers of the hotels or inns exercise the right
by strangers (Art. 2000); or
of retention?
b. loss is caused by act of thief or robber when there
is no use of arms or irresistible force (Art. 2001).
A: Yes, as security for credits incident to the stay at the
Q: What are the instances when the keepers of hotels or hotel (in the nature of a pledge created by operation of
inns are not liable for loss of thing in case of deposit? law).
A: They are not liable when: Q: What is the effect of obtaining food or accommodation
1. loss or injury is caused by force majeure; in a hotel or inn without payment?
2. loss due to the acts of guests, his family, his
employees, or visitors; and A: The act is equivalent to estafa under Art. 315 of the
3. loss arises from the character of the goods (Art. Revised Penal Code
2002)
JUDICIAL DEPOSIT
Q: Are hotel or inn keepers still liable regardless of the
posting of notices exempting themselves from any Q: When does judicial deposit (sequestration) take place?
liability?
A: When an attachment or seizure of property in litigation
A: Yes. Hotel/Inn-keepers cannot escape or limit liability by is ordered by a court (Art. 2005, NCC)
stipulation or the posting of notices. Any stipulation
Note: It is auxiliary to a case pending in court. The purpose is to
between the hotel keeper and the guest whereby the
maintain the status quo during the pendency of the litigation or to
responsibility of the former (Arts. 1998-2001) is suppressed insure the right of the parties to the property in case of a favorable
or diminished shall be void (Art. 2003). judgment (De Leon, Comments and cases on credit transaction, p.
154, 2010).
Q: What may be the object of Judicial sequestration?
A: Movables and immovables (Art. 2006, NCC)
Q: What is the extent of the liability of the hotel keepers Q: When will the properties sequestered cease to be in
in case of loss? custodia legis?
A: A: When the insolvency proceedings of a partnership

1. It covers liability in hotel rooms which come under the terminated because the assignee in insolvency has returned
term “baggage” or articles such as clothing as are the remaining assets to the firm, said properties cease to be
ordinarily used by travelers.

CIVIL LAW
in custodia legis (Ng Cho Cio, et al. v. Ng Diong & Hodges, L-

14832, Jan. 28, 1961) Q: Distinguish guaranty from warranty.
GUARANTY AND SURETYSHIP A:

NATURE AND EXTENT OF GUARANTY GUARANTY WARRANTY
An undertaking that the title,
Q: What is guaranty? A contract by which a quality or quantity of the
person is bound to subject matter of a contract is
A: It is a contract where a person called the guarantor binds another for the fulfillment what it is represented to be,
himself to the creditor to fulfill the obligation of the of a promise or and relates to some
principal debtor in case the latter should fail to do so. undertaking of a third agreement made ordinarily by
person the party who makes the
Q: What is suretyship? warranty
A: It is a contract where a person binds himself solidarily Q: What is the similarity between guaranty and warranty?
with principal debtor.
A: Each is an undertaking by one party to another to
Q: Distinguish guaranty from suretyship. indemnify or make good the assured against some possible
default or defect in the contemplation of the parties
A:
GUARANTY SURETYSHIP Q: What are the kinds of guaranty?
Surety is an original
Collateral undertaking
promissory undertaking A:
Guarantor-secondarily 1. General classification
Surety-primarily liable
liable a. Personal – guaranty where an individual
Guarantor binds himself Surety undertakes to personally assumes the fulfillment of the principal
to pay if the principal pay if principal obligation;
cannot pay does not pay b. Real – guaranty is property, movable, or
Insurer of solvency of immovable.
Insurer of the debt
debtor 2. As to its origin
Guarantor can avail of a. Conventional – constituted by agreement of the
the benefit of excussion Surety cannot avail of parties
and division in case the benefit of excussion b. Legal – imposed by virtue of a provision of law
creditor proceeds and division c. Judicial – required by a court to guarantee the
against him eventual right of the parties in a case.
3. As to consideration
Q: What is the similarity between guaranty and a. Gratuitous – guarantor does not receive any price
suretyship? or remuneration for acting as such.
b. Onerous – one where the guarantor receives
A: Both guarantor and surety promise or undertake to valuable consideration for his guaranty
answer for the debt, default or miscarriage of another 4. As to person
person. a. Single – constituted solely to guarantee or secure
performance by the debtor of the principal
Q: What are the characteristics of guaranty and obligation.
suretyship? b. Double or subguaranty – constituted to secure
the fulfillment of the obligation of a guarantor by
A: ACCUNCS a sub-guarantor
1. Accessory 5. As to scope and extent
2. Consensual a. Definite – where the guaranty is limited to the
3. Conditional principal obligation only, or to a specific portion
4. Unilateral thereof.
5. Nominate b. Indefinite or simple – where the guaranty
6. Cannot be presumed included all the accessory obligations of the
7. Subsidiary principal, e.g. costs, including judicial costs.
8. Covered by the Statute of Frauds
EFFECTS OF GUARANTY
Note: In case of guaranty, the guarantor must be a person distinct
from the debtor because a person cannot be the personal Q: What are the obligations that may be secured in a
guarantor of himself. A person cannot be both the primary debtor contract of guaranty?
and the guarantor of his own debt as this is inconsistent with the
very purpose of a guarantee which is for the creditor to proceed A:
against a third person if the debtor defaults in his obligation.
1. Valid obligations

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
2. Voidable obligations
3. Unenforceable obligations Q: Who is a guarantor?
4. Natural obligations – When the debtor himself offers a
guaranty for his natural obligation, he impliedly A: The guarantor is the person who is bound to another for
recognizes his liability, thereby transforming the the fulfillment of a promise or undertaking of a third
obligation from a natural into a civil one. person.
5. Conditional obligations – only in case of suspensive
condition because upon its happening, it gives rise to Q: What are the qualifications of a guarantor?
the principal and hence, gives rise also to the
accessory obligation. A:
1. Possesses integrity;
Q: Is a valid principal obligation necessary in contract of 2. Capacity to bind himself; and
guaranty? 3. Has sufficient property to answer for the obligation
which he guarantees.
A: Since guaranty is an accessory contract, it is an
indispensable condition for its existence that there must be Note: The qualifications need only be present at the time of the
a principal obligation. Hence, if the principal obligation is perfection of the contract.
void, it is also void.
Q: What if the guaranty was undertaken without
Q: In what form should a contract of guaranty be made? knowledge of debtor?
A: It must be expressed and in writing (par. 2, Art. 1403, A: Guaranty is unilateral. It exists for the benefit of the
NCC); otherwise, it is unenforceable unless ratified. It need creditor and not for the benefit of the principal who is not a
not be in a public instrument. party to the contract of guaranty. The creditor has every
right to take all possible measures to secure the payment of
Note: Guaranty, as a contract, requires the expression of the his credit. Hence, it can be constituted without the
consent of the guarantor in order to be bound. It cannot be knowledge and even against the will of the principal debtor.
presumed because of the existence of a contract or principal
obligation. It shall be unenforceable by action unless made in Q: What is the effect of subsequent loss of required
writing. qualifications?
Q: Is acceptance necessary in a contract of guaranty? A: The supervening loss of required qualifications will not
generally end the guaranty. However, the creditor is given
A: GR: The acceptance of the creditor is not essential in the right to demand substitution of guarantor.
such contracts.
Q: When is the qualification of the guarantor lost?
XPN: When there is a mere offer of a guaranty or a
conditional guaranty wherein the obligation does not A:
become binding until it is accepted by the creditor and 1. Conviction of a crime involving dishonesty
notice of such acceptance is given to the guarantor. 2. Insolvency
Q: In case of doubt, in whose favor should a contract of Q: What is the effect of absence of direct consideration or
guaranty or surety be resolved? benefit to guarantor?
A: GR: Strict construction against the creditor and liberal in A: Guaranty or surety agreement is regarded valid despite
favor of the guarantor or surety; terms cannot be extended the absence of any direct consideration received by the
beyond the stipulation. guarantor or surety, such consideration need not pass
directly to the guarantor or surety; a consideration moving
XPN: In cases of compensated sureties. to the principal will suffice.
Q: State the general character of guaranty. Q: What is the rule when a married woman is a guarantor?
A: GR: Generally gratuitous (Art. 2048, NCC) A: GR: Binds only her separate property.
XPN: Stipulation to the contrary.
PARTIES TO A CONTRACT OF GUARANTY XPNs:

1. If with her husband’s consent, it binds the
Q: Who are the parties to a contract of guaranty? community or conjugal partnership property.
2. Without husband’s consent, in cases provided for
A: by law, such as when the guaranty has redounded
1. Guarantor to the benefit of the family.
2. Creditor

CIVIL LAW
Q: What are the rights of a third person who pays for the
debt guaranteed or secured? A: His obligation will survive. His estate will be answerable.
If the estate has no sufficient assets, the guarantor shall be
A: liable.
1. If payment is made without the knowledge or against
the will of the debtor: Q: What is the rule with respect to jurisdiction in an action
a. Guarantor can recover only insofar as the based on a contract of guaranty?
payment has been beneficial to the debtor (Art.
1236) A: The guarantor shall be subject to the jurisdiction of the
b. Guarantor cannot compel the creditor to court of the place where the obligation is to be complied
subrogate him in his rights. (Art. 1237) with.
2. If payment is made with the knowledge or consent of
the debtor – Subrogated to all the rights which BENEFIT OF EXCUSSION
creditor had against the debtor.
Q: What is the benefit of excussion?
Q: What is the extent of guarantor’s liability?
A: It is a right by which the guarantor cannot be compelled
A: to pay the creditor unless the latter has exhausted all the
1. Where the guaranty is definite – It is limited in whole properties of the principal debtor and has resorted to all
or in part to the principal debt to the exclusion of legal remedies against such debtor (Art. 2058).
accessories.
2. Where the guaranty is indefinite or simple – It shall Q: What are the requisites of benefit of exhaustion or
comprise not only the principal obligation but also all excussion?
its accessories, including the judicial costs provided
that the guarantor shall only be liable for those cost A:
incurred after he has been judicially required to pay. 1. The guarantor must set up the right of excussion
against the creditor upon the latter’s demand for
Q: What are the situations when a guarantor may lawfully payment from him; and
be required to pay more than the original obligation of the 2. He must point out to the creditor the available
principal debtor? property of the debtor (not exempted from execution)
found within the Philippine territory (Art. 2060, NCC).
A:
1. If upon demand, a guarantor fails to pay the Q: May a complaint be filed against the debtor and
obligation, he can be held liable for interest, even if in guarantor simultaneously in one case before the
thus paying, the liability becomes more than that in exhaustion of all the properties of the debtor?
the principal obligation. The increased liability is not
because of the contract but because of the default and A: Yes. There is nothing procedurally objectionable in
the necessity for judicial collection. It should be noted, impleading the guarantor as a co-defendant. As a matter of
however, that the interest runs from the time the fact, the Rules of Court on permissive joinder of parties
complaint is filed, not from the time the debt becomes explicitly allow it. If the creditor obtained a favorable
due and demandable (Tagawa v. Aldanese, No.18636, judgment against the debtor and guarantor, the latter is
Sept. 28, 1922 ). entitled to a deferment of the execution of the said
judgment against him until all properties of the debtor shall
2. Creditors suing on a surety bond may recover from the have been exhausted to satisfy the latter’s obligation
surety, as part of their damages, interest at the legal involved in the case.
rate, judicial cost and attorney’s fees when
appropriate even if the surety would thereby become Note: Just because the guarantor was sued at the same time as the
liable to pay more than the total amount stipulated in debtor does not mean that the creditor has already made the
the bond (Dino v. CA, G.R. No. 89775, Nov. 26, 1995). demand on the guarantor.
3. A penalty clause may also increase the liability of the Q: What is the effect of declaration of insolvency with
surety (General Insurance Surety Co. v. Republic, G.R. respect to the right of excussion?
No. L-13873, Jan. 31, 1963).
A: Just because the debtor has been declared insolvent in
insolvency proceeding does not necessarily mean that he
Q: What is the effect of guarantor’s death? cannot pay, for part of the debtor’s assets may still be
available to the creditor. One good proof of the debtor’s
A: His heirs are still liable to the extent of the value of the inability to pay is an unsatisfied writ of execution which has
inheritance because the obligation is not purely personal been returned by the implementing sheriff (Machetti v.
and is therefore transmissible. Hospicio de San Jose, 43 Phil. 297, Feb. 7, 1920).
Q: What is the effect of the debtor’s death? Q: When is there no benefit of excussion?

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
the creditor co-guarantors

A: RJS-AIR-FEDS There is no payment There is already
1. Guarantor has expressly renounced it. yet, but there is merely payment of debt; the
2. Guarantor has bound himself solidarily with the a claim pressed against paying co-guarantor is
Debtor. one or more co- seeking the contribution
3. Debtor is insolvent. guarantors of the co-guarantors
4. Guarantor has absconded, or cannot be sued
within the Philippines unless he left a manager or Q: What is the effect of the creditor’s negligence in
representative. exhausting the properties of the debtor?
5. If it may be presumed that an execution on the
property of the Debtor cannot satisfy the A: He shall suffer the loss to the extent of the value of the
obligation. pointed property which was not exhausted by the creditor
6. Guarantor does not invoke the benefit against (Art. 2061, NCC).
Creditor upon demand to him for payment and he
does not point out available property of the Note: The article applies when the guarantor has complied with
Debtor within the Philippines sufficient to cover the conditions of Art. 2060 (requisites of benefit of excussion).
the obligation (Art. 2060, NCC).
7. Guarantor is a judicial bondsman or sub-surety. Q: What is the rule with regard to action of the creditor
(Art. 2084) against the debtor?
8. A pledge or mortgage of his own property has
been given by Guarantor as special security. A: GR: Only the principal debtor should be sued alone.
9. Guarantor fails to interpose it as a defense before
judgment is rendered. XPN: If the benefit of excussion is not available, the
guarantor can be sued jointly with the debtor.
BENEFIT OF DIVISION
Q: Is the guarantor entitled to be notified of the complaint
Q: What is the principle of benefit of division? against the debtor?
A: Should there be several guarantors of only one debtor A: Yes. If the guarantor desires to set up defenses as are
for the same debt, the obligation to answer for the same is granted him by law, he may have the opportunity to do so
divided among all. (Joint liability) (Art. 2065) (Art. 2062).
Note: GR: Creditor can claim from the guarantors only up Q: What are the consequences of the guarantor’s
to the extent they are respectively bound to pay. appearance or non-appearance in the case against the
debtor?
XPN: When solidarity has been stipulated.
A:
Should any of the guarantors become insolvent, his share 1. If he does not appear and judgment is rendered
shall be borne by the other guarantors including the paying against the debtor, he cannot set up defenses which
guarantor in the same joint proportion in accordance with he could have set up had he appeared; moreover, he
the rule in solidary obligations. cannot question the decision anymore;
The right to be reimbursed from his co- guarantors is 2. If he appears such as by filing an answer in
acquired ipso jure by virtue of said payment. intervention, he may lose or may win the case. If he
losses, he is still entitled to the benefit of excussion.
Q: What is the effect of payment made by a co-guarantor There is no waiver of his benefit of excussion by his
not by virtue of a judicial demand or by reason of appearance in the case.
insolvency?
Q: What is the effect of compromise between the creditor
A: The paying co-guarantor cannot directly seek and the principal debtor?
reimbursement from the other co-guarantors. He has to
pursue first the claim against the principal debtor alone. A: If the compromise is beneficial to the guarantor, it is
st
(Sadaya v. Sevilla, 126 Phil. 101) valid; otherwise, it is not binding upon him (1 sentence,
Art. 2063, NCC).
Q: Distinguish benefit of division from benefit of Q: What is the effect of compromise between the creditor
contribution. and the guarantor to the principal debtor?
A: A: If compromise is beneficial to the principal debtor, it is

nd
BENEFIT OF valid; otherwise, it is not binding upon him (2 sentence,
BENEFIT OF DIVISION Art. 2063, NCC). To be binding, it must benefit both the
CONTRIBUTION
Controversy is between Controversy between guarantor and the debtor.
the co-guarantors and and among the several

CIVIL LAW
Q: What is the rule on the right of indemnity and XPN: If ratified by the debtor.
reimbursement of the guarantor who paid the debt?
Q: Can the guarantor proceed against the principal debtor
A: GR: Guarantor is entitled to be reimbursed by Debtor even before having paid the creditor?
for:
1. total amount of the debt paid; A: GR: No.
2. legal interest from the time payment was made
known to the debtor; XPNs:
3. expenses incurred after notifying debtor that
demand to pay was made upon him; and 1. When he is sued for payment;
4. damages in accordance with law. 2. In case of insolvency of the principal debtor;
3. When the debtor has bound himself to relieve him
XPNs: from the guaranty within a specified period, and
1. Guaranty is constituted without the knowledge or this period has expired.
against the will of the debtor. 4. When the debt has become demandable by reason
of the expiration of the period of payment;
Effect: Guarantor may only recover so much as 5. After the lapse of ten years, when the principal
was beneficial to the debtor. obligation has no fixed period for its maturity,
unless it be of such nature that it cannot be
rd
2. Payment by 3 persons who does not intend to be extinguished except within a period longer than
reimbursed. ten years;
6. If there are reasonable grounds to fear that the
Effect: deemed a donation and as such requires principal debtor intends to abscond; or
the consent of debtor. 7. If the principal debtor is in imminent danger of
becoming insolvent.
Q: What is the right of the guarantor after the payment of
the debt is made to the creditor? Note: In all these cases, the cause of action of the guarantor is
either to obtain release from the guaranty, or to demand a security
A: Right of subrogation. The guarantor is subrogated to all that shall protect him from any proceedings by the creditor and
st from the danger of insolvency of the debtor (Art. 2071, NCC).
the rights which the creditor had against the debtor (1
par., Art. 2067)
Q: What is the remedy of a person who becomes a
guarantor at the request of another for the debt of a third
Q: What happens when guarantor pays without notice to
person who is not present?
the debtor?
A: He has the option of suing either the principal debtor or
A: The debtor may interpose against the guarantor
the requesting party (Art. 2072, NCC).
defenses available to the debtor as against the creditor at
the time payment was made.
Note: The provision applies when the guarantor has actually paid
the debt.
Note: GR: Guarantor must first notify the debtor before paying,
otherwise, if the debtor pays again, the guarantor can only collect
from the creditor and the guarantor will have no cause of action SUB-GUARANTY
against the debtor even if the creditor becomes insolvent (Art.
2070). Q: What is double or sub-guaranty?
XPN: Guarantor may still recover from debtor if the following A: It is one constituted to guarantee the obligation of the
circumstances concur: guarantor.
1. Guaranty is gratuitous; Note: In case of insolvency of the guarantor for whom he bound
2. Guarantor was prevented by fortuitous event from himself, he is responsible to the co-guarantors in the same terms
notifying the debtor; and as the guarantors (Art. 2075, NCC).
3. Creditor was insolvent.
Q: What is the effect if guarantor pays the debt before

Q: Is a sub-guarantor entitled to the right of excussion?
maturity?
A: Yes, both with respect to the guarantor and to the
A: GR: The Guarantor cannot seek reimbursement from the
principal debtor (Art. 2064, NCC).
debtor until expiration of the period stipulated. The
guarantor must wait. For being subsidiary in character, the
CONTINUING GUARANTY
guaranty is not enforceable until the debt has become due
(Art. 2069)
Q: What is continuing guaranty or suretyship?

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
A: A continuing guaranty is one which covers all only for the partial payments already made but for the full
transactions, including those arising in the future, which are amount owed by PAGRICO to the PNB. (Cochingyan, Jr. v.
within the description or contemplation of the contract of R&B Surety and Ins. Co., GR.No.L-47369, June 30, 1987)
guaranty until the expiration or termination thereof.
EXTINGUISHMENT OF GUARANTY
GR: It is not limited to a single transaction but
contemplates a future course of dealings, covering a Q: What are the grounds for extinguishing a contract of
series of transactions generally for an indefinite time or guaranty?
until revoked.
A:
XPN: A chattel mortgage can only cover obligations 1. Principal obligation is extinguished
existing at the time the mortgage is constituted and 2. Same causes as all other obligations
not to obligations subsequent to the execution of 3. If creditor voluntarily accepts immovable or other
the mortgage. properties in payment of the debt (even if he should
afterwards lose the same through eviction or
XPN to the XPN: In case of stocks in department conveyance of property) (Art. 2077)
stores, drug stores etc. 4. Release in favor of one of the guarantors, w/o consent
of the others, benefits all to the extent of the share of
Q: What is the test of continuing guaranty? the guarantor to whom it has been granted (Art. 2078)
5. Extension granted to debtor by creditor without
A: A guaranty shall be construed as continuing when by the consent of guarantor (Art. 2079)
terms thereof it is evident that the object is to give a 6. When by some act of the creditor, the guarantors even
standing credit to the principal debtor to be used from time though they are solidarily liable cannot be subrogated
to time either indefinitely or until a certain period, to the rights, mortgages, and preferences of the
especially if the right to recall the guaranty is expressly former (Art. 2080)
reserved (Dino v. CA, G.R. No. 89775, Nov. 26, 1995)
MATERIAL ALTERATION OF CONTRACT
Q: May guaranty secure future debts?
Q: What is the effect of material alteration of principal
A: Yes. A guaranty may be given to secure even future contract?
debts, the amount of which may not be known at the time
the guaranty is executed. This is the basis for contracts A: Any agreement between the creditor and the principal
denominated as continuing guaranty or suretyship. It is one debtor which essentially varies the terms of the principal
which covers all transactions, including those arising in the contract without the consent of the surety will release the
future, which are within the description or contemplation surety from liability. Material alteration would constitute a
of the contract of guaranty, until the expiration or novation or change of the principal contract and which is
termination thereof (Dino v. CA, G.R. No. 89775, Nov. 26, consequently extinguished.
1995)
Q: When is the alteration considered material?
Q: PAGRICO submitted a Surety Bond issued by R&B
Surety to secure an increase in its credit line with PNB. For A: It must be a change which imposes an obligation or
consideration of the Surety Bond, Cochingyan and added burden on the party promising or which takes away
Villanueva entered into an Indemnity Agreement with some obligation already imposed, changing the legal effect
R&B Surety and bound themselves jointly and severally to of the original contract and not merely the form thereof.
the terms and conditions of the Surety Bond. When
PAGRICO defaulted, PNB demanded payment to R&B Note:
Surety; R&B Surety, in turn, demanded payment to a. The increase in the interest rates without the
Cochingyan and Villanueva. R&B sued them. Villanueva guarantor’s consent does not release the guarantor
where the creditor is demanding only the original and
argued that the complaint was premature because PNB
not the increased rate of interest rate.
had not yet proceeded against R&B Surety to enforce the b. Assignment of the creditor without the knowledge or
latter's liability under the Surety Bond. Is the contention consent of surety is not material alteration of the
correct? contract
c. Change in the technical specifications of the items to be
A: No. Indemnity Agreements are contracts of purchased but their amount, length, and quality
indemnification not only against actual loss but against remained unchanged, and the period for payment and
liability as well. While in a contract of indemnity against the amount of liability of principal debtor and surety
were untouched is not material.
loss an indemnitor will not be liable until the person to be
indemnified makes payment or sustains loss, in a contract
LEGAL AND JUDICIAL BONDS
of indemnity against liability, as in this case, the
indemnitor's liability arises as soon as the liability of the
Q: What is a Bond?
person to be indemnified has arisen without regard to
whether or not he has suffered actual loss. Accordingly, R &
B Surety was entitled to proceed against petitioners not

CIVIL LAW
A: A bond, when required by law, is commonly understood Q: What is the effect of a surety bond filed for an alien
to mean an undertaking that is sufficiently secured, and not staying in the country which is forfeited for violating its
cash or currency. Whenever surety bonds are submitted, terms?
they are subject to any objections as to their sufficiency or
as to the solvency of the bondsman. A: The effect of the violation is that its subsequent
unauthorized cancellation thru mistake or fraud does not
Q: What is a Bondsman? relieve the surety. A bond surrendered thru mistake or
fraud may, therefore, be considered as a valid and
A: A bondsman is a surety offered in virtue of a provision of subsisting instrument (Far Eastern Surety and Ins. Co., v. CA,
law or a judicial order. He must have the qualifications GR No. L-12019, Oct 16, 1958).
required of a guarantor and in special laws like the Rules of
Court. Q: What is the rule when the performance of a bond is
rendered impossible?
Q: What are the qualifications to a property bond?
A: It is the surety’s duty to inform the court of the
A: The necessary qualifications of sureties to a property happening of the event so that it may take action or decree
bond shall be as follows: in the discharge of the surety when the performance of the
1. Each of them must be a resident owner of real bond is rendered impossible by an act of God, or the
estate within the Philippines; obligee, or the law. (People v. Otiak Omal & Luzon Co., Inc.,
2. Where there is only one surety, his real estate GR. No. L-14457, June 30, 1961)
must be worth at least the amount of the
undertaking;
3. In case there are two or more sureties, they may
justify severally in amounts less than that
expressed in the undertaking, if the entire sum
justified is equivalent to the whole amount of bail
demanded (Sec. 12, Rule 114, Rules of Court).
Q: What is the nature of a bond?
A: All bonds including “judicial bonds” are contractual in

nature. Bonds exist only in consequence of a meeting of
minds under the conditions essential to a contract.
Q: What is a Judicial Bond?
A: Judicial bonds constitute merely as a special class of

contracts of guaranty, characterized by the fact that they
are given in virtue of a judicial order.
Q: What is the liability of the surety if the creditor was

negligent in collecting the debt?
A: A surety is still liable even if the creditor was negligent in

collecting from the debtor. The contract of suretyship is not
about the oblige will seeing to it that the principal pays the
debt or fulfills the contract, but that the surety will see that
the principal pay or perform (PNB v. Manila Surety &
Fidelity Co., Inc., 14 SCRA 776, 1965).
Q: What is the effect of violation by the creditor of the

terms of the surety agreement?
A: A violation by the creditor of the terms of the surety

entitles the surety to be released therefrom (Associated Ins.
& Surety Co. v. Bacolod Murcia Milling Co., GR. No. L-12334,
May 22, 1959).

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
PLEDGE, MORTGAGE, AND ANTICHRESIS
Q: What is pledge, mortgage and antichresis? Distinguish
A:
PLEDGE CHATTEL MORTGAGE REAL ESTATE MORTGAGE ANTICHRESIS
Definition
An accessory contract whereby a
Chattel mortgage is a It is a contract whereby the
debtor delivers to the creditor or A contract whereby the CR
contract by virtue of which a debtor secures to the
a third person a movable or acquires the right to
personal property is recorded creditor the fulfillment of a
personal property, or document receive the fruits of an
in the Chattel Mortgage principal obligation, specially
evidencing incorporeal rights, to immovable of the debtor,
Register as a security for the subjecting to such security,
secure the fulfillment of a with the obligation to
performance of an obligation. immovable property or real
principal obligation with the apply them to the payment
rights over immovable
condition that when the of interest, if owing, and
property, in case the
obligation is satisfied, the thing thereafter to the principal
principal obligation is not
delivered shall be returned to the of his credit.
paid or complied with at the
pledgor with all its fruits and
time stipulated.
accessions, if any.
Object of the contract
movable or personal property, or immovable property or real
Personal property
document evidencing incorporeal rights over immovable fruits of an immovable
rights property
Necessity of delivery
Property is delivered to the
Property must be delivered Delivery is not necessary Delivery is not necessary
creditor
Q: What are the similarities of pledge and mortgage? 3. Unenforceable obligations

4. Natural obligations
A: 5. Conditional obligations
1. Both are accessory contracts;
2. Both pledgor and mortgagor must be the absolute Q: What rules are common to pledge and mortgage?
owner of the property;
3. Both pledgor and mortgagor must have the free A:
disposal of their property or be authorized to do so; 1. Constituted to secure the fulfillment of a valid
and principal obligation.
4. In both, the thing proffered as security may be sold at 2. Pledgor or mortgagor must be the absolute owner of
public auction, when the principal obligation becomes the thing pledged or mortgaged.
due and no payment is made by the debtor. 3. They must have the free disposal of their property,
and in the absence thereof, that they be legally
Q: Are the contracts of pledge, mortgage or antichresis authorized for such purpose.
indivisible? 4. Debtor retains ownership of the thing given as a
security.
A: GR: A pledge, mortgage or antichresis is indivisible.
Q: May property acquirable in the future be mortgaged?
Note: The mortgage is indivisible even if the obligation
of the debtor is joint and not solidary. Generally, the A: No. Where the mortgagor mortgaged a property and in
divisibility of the principal obligation is not affected by the contract he agreed to mortgage additional properties
the indivisibility of the pledge or mortgage. which he may acquire in the future, there was no valid
mortgage as to the latter because he was not yet the owner
XPNs: of the properties at the time of the mortgage (Dilag v. Heirs
1. Where each one of several things guarantees of Ressurrecion, No. 48941, May 6, 1946).
determinate portion of the credit (Art. 2089)
2. Where only a portion of the loan was released Q: Is a third person who pledged and mortgaged his
3. Where there was failure of consideration property liable for any deficiency?
Q: What are the obligations that can be secured by pledge, A: GR: No.
mortgage and antichresis?
XPN: If the third party pledgor or mortgagor expressly
A: agreed to be bound solidarily with the principal
1. Valid obligations debtor.
2. Voidable obligations

CIVIL LAW
Q: Is mortgage constituted to secure future advances Q: ABC loaned to MNO P40,000 for which the latter
valid? pledged 400 shares of stock in XYZ Inc. It was agreed that
if the pledgor failed to pay the loan with 10% yearly
A: Yes. It is a continuing security and not discharged by interest within four years, the pledgee is authorized to
repayment of the amount named in the mortgage, until the foreclose on the shares of stock. As required, MNO
full amount of the advances is paid. However, a chattel delivered possession of the shares to ABC with the
mortgage can only cover obligations existing at the time the understanding that the shares would be returned to MNO
mortgage is constituted and not to obligations subsequent upon the payment of the loan. However, the loan was not
to the execution of the mortgage. paid on time. A month after 4 years, may the shares of
stock pledged be deemed owned by ABC or not? Reason.
Q: What is the nature of an assignment of rights to (2004 Bar Question)
guarantee an obligation of a debtor?
A: The shares of stock cannot be deemed owned by ABC
A: It is in effect a mortgage and not an absolute conveyance upon default of MNO. They have to be foreclosed. Under
of title which confers ownership on the assignee (Manila Article 2088, NCC, the creditor cannot appropriate the
Banking Corp. v. Teodoro, Jr., G.R. No. 53955, Jan. 13, 1989) things given by way of pledge. And even if the parties have
stipulated that ABC becomes the owner of the shares in
ACCOMMODATION MORTGAGE case MNO defaults on the loan, such stipulation is void for
being a pactum commissorium.
Q: Who is an accommodation mortgagor?
Q: To secure a loan obtained from a rural bank, Purita
A: He is a third person who is not a party to a principal assigned her leasehold rights over a stall in the public
obligation and secures the latter by mortgaging or pledging market in favor of the bank. The deed of assignment
his own property. provides that in case of default in the payment of the
loan, the bank shall have the right to sell Purita's rights
Q: What is the extent of the liability of an accommodation over the market stall as her attorney-in-fact, and to apply
mortgagor? the proceeds to the payment of the loan.
A: It extends up to the loan value of their mortgaged 1. Was the assignment of leasehold rights a mortgage or a
property and not to the entire loan itself. cession? Why?
2. Assuming the assignment to be a mortgage, does the
Note: Accommodation is also applicable to pledge since the law provision giving the bank the power to sell Purita's rights
provides that “third parties who are not parties to the principal constitute pactum commissorium or not? Why? (2001 Bar
obligation may secure the latter by pledging or mortgaging their Question)
own property” (Art. 2085, Civil Code). It is also applicable to
antichresis since Art. 2139 states that the last paragraph of Art.
2085 shall be applicable to a contract of antichresis. A:
1. The assignment was a mortgage, not a cession, of the
PACTUM COMMISSORIUM leasehold rights. A cession would have transferred
ownership to the bank. However, the grant of authority to
Q: What is pactum commisorium? the bank to sell the leasehold rights in case of default is
proof that no such ownership was transferred and that a
A: It is a stipulation whereby the thing pledged or mere encumbrance was constituted. There would have
mortgaged or subject of antichresis shall automatically been no need for such authority had there been a cession.
become the property of the creditor in the event of non-
payment of the debt within the term fixed. Such stipulation 2. No, the clause in question is not a pactum
is null and void. commissorium. It is pactum commissorium when default in
the payment of the loan automatically vests ownership of
Q: What are the elements of pactum commissorium? the encumbered property in the bank. In the problem
given, the bank does not automatically become owner of
A: the property upon default of the mortgagor. The bank has
1. There is a pledge, mortgage or antichresis of a to sell the property and apply the proceeds to the
property by way of security; and indebtedness.
2. There is an express stipulation for the automatic
appropriation by the creditor of the property in case of Q: Spouses Uy Tong purchased seven motor vehicles from
non-payment Bayanihan Investment payable in installments. It was
agreed that if the spouses should fail to pay their
Note: What are prohibited are those stipulations executed or made obligation, Bayanihan will automatically be the owner of
simultaneously with the original contract, and not those the apartment which the spouses has a leasehold right.
subsequently entered into. The spouses after paying the downpayment, failed to pay
the balance, hence, Bayanihan filed an action for specific
performance against the spouses. The judgment provided
that in case the spouses failed to pay the obligation within

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
30 days from notice, they are to execute a Deed of Q: What are the essential requisites for a contract of
Absolute Sale over the apartment and/or leasehold rights. pledge?
Is the stipulation a pactum commissorium?
A:
A: No. The questioned agreement evinces no basis for the 1. Constituted to secure the fulfillment of a principal
application of pactum commissorium. There is no contract obligation;
of pledge or mortgage entered into by the parties. 2. Pledgor is the absolute owner of the thing pledged;
Bayanihan sought the intervention of the court by filing an 3. Persons constituting the pledge have the free disposal
action for specific performance. Hence there was no of their property, and in the absence thereof, that they
automatic appropriation of the property. (Uy Tong v. CA, be legally authorized for the purpose. (Art. 2085, NCC)
G.R. No. 77465, May 21, 1988)
Note: A contract of pledge not appearing in a public instrument
Q: X borrowed money from Y and gave a piece of land as does not affect its validity. It is valid between the parties.
security by way of mortgage. It was expressly agreed
between the parties in the mortgage contract that upon Q: What kind of possession is required in pledge?
nonpayment of the debt on time by X, the mortgaged land
would already belong to Y. If X defaulted in paying, would A: The mere taking of the property is not enough. There
Y now become the owner of the mortgaged land? Why? must be continuous possession of the thing. However, the
pledgee is allowed to temporarily entrust the physical
A: No, Y would not become the owner of the land. The possession of the thing pledged to the pledgor without
stipulation is in the nature of pactum commissorium which invalidating the contract. But here, the pledgor would be in
is prohibited by law. The property should be sold at public possession as a mere trustee and his possession is subject
auction and the proceeds thereof applied to the to the order of the pledgee.
indebtedness. Any excess shall be given to the mortgagor.
Q: Pablo owns a tractor which he left with his son Mike for
Q: Suppose in the preceding question, the agreement safekeeping. Mike then offered the said tractor to Calibo
between X and Y was that if X failed to pay the mortgage as security for the payment of his debt. When Pablo came
debt on time, the debt shall be paid with the land back and learned that the tractor was in the custody of
mortgaged by X to Y. Would your answer be the same as Calibo, he demanded its return. Calibo, however, refused.
in the preceding question? Explain. (1999 Bar Question) Calibo alleged that the tractor was pledged to him, and in
the alternative, the tractor was left with him in the
A: No, the answer would not be the same. This is a valid concept of deposit and he may validly hold on to it until
stipulation and does not constitute pactum commissorium. Mike pays his obligation. Is Calibo correct?
In pactum commissorium, the acquisition is automatic
without need of any further action. In the instant problem A: No.There is no valid pledge because Mike is not the
another act is required to be performed, namely, the absolute owner of the property pledged. He who is not the
conveyance of the property as payment (dacion en pago). owner or proprietor of the property pledged or mortgaged
to guarantee the fulfillment of a principal obligation, cannot
PLEDGE legally constitute such a guaranty as may validly bind the
property in favor of his creditor, and the pledgee or
Q: What is pledge? mortgagee in such a case acquires no right whatsoever in
the property pledged or mortgaged. There is likewise no
A: A contract whereby the debtor delivers to a creditor or valid deposit, in this case, where the principal purpose for
rd
3 person a movable or document evidencing incorporeal receiving the object is not safekeeping (Calibo Jr. v. CA, G.R.
right for the purpose of securing fulfillment of a principal No. 120528, Jan. 29, 2001).
obligation with the understanding that when the obligation
is fulfilled, the thing delivered shall be returned with all its Q: What is the right of an owner of personal property
fruits and accessions. pledged without authority?
Q: What are the kinds of pledge? A: He may invoke Art. 559, NCC. The defense that
pawnshop owner acquired ownership of the thing in good
A: faith is not available.
1. Conventional - by agreement of parties
2. Legal - by operation of law Note: Art. 559 – The possession of movable property acquired in
good faith is equivalent to a title. Nevertheless, one who has lost
any movable or has been unlawfully deprived thereof, may recover
Note: A thing lawfully pledged to one creditor, cannot be pledged
it from the person in possession of the same.
to another as long as the 1st pledge subsists. (Mission de San
Vicente v. Reyes 19 Phil 524)
If the possessor of a movable lost or of which the owner has been
unlawfully deprived, has acquired it in good faith at a public sale,
the owner cannot obtain its return without reimbursing the price
paid therefore.

CIVIL LAW
Q: How is a contract of pledge perfected? Q: Is constructive or symbolic delivery of the thing

sufficient to constitute pledge?
A: A contract of pledge is perfected when the thing pledged
is placed in the actual possession of or delivered to the A: GR: No.
pledgee or a third person designated by the parties by
common consent (Art. 2093, NCC) XPN: If the pledge consists of goods stored in a
warehouse for purposes, of showing the pledgee’s
Note: If Art. 2093 is not complied with, the pledge is void. control over the goods, the delivery to him of the keys
to the warehouse is sufficient delivery of possession
Q: What is the effect when possession or delivery of the (constructive/symbolic delivery).
thing pledged was not made?
The type of delivery will depend upon the nature and
A: An agreement to constitute a pledge only gives rise to a peculiar circumstances of each case (Yuliongsiu v. PNB,
personal action between the contracting parties. Unless the G.R. No. L-19227, Feb. 17, 1968).
movable given as a security by way of pledge be delivered
to and placed in the possession of the creditor or of a third Q: Can incorporeal rights evidenced by proper document
person designated by common agreement, the creditor be pledged?
acquires no right to the property because pledge is merely
a lien and possession is indispensable to the right of a lien. A: Yes (Art. 2095, NCC). It is, however, required that the
actual instrument be delivered to the pledgee. More, if the
Q: What is the effect if the pledgee fails to take the instrument is a negotiable document, it must be indorsed.
property pledged into his possession?
OBLIGATIONS OF PLEDGOR AND PLEDGEE
A: If a pledgee fails or neglects to take the property pledged
into his possession, he is presumed to have waived the Q: Who are the parties in a contract of pledge?
right granted him by the contract (U.S. v. Terrel, 2 Phil. 222)
A:
Q: What are the requisites to bind third persons in a 1. Pledgor – the debtor; the one who delivers the thing
contract of pledge? pledged to the creditor
2. Pledgee – the creditor; the one who receives the thing
A: To bind third persons, the pledge must be embodied in a pledged
public instrument where the following entries must appear
- Q: What are the rights of a pledgee?
1. A description of the thing pledged; and
2. Statement of date when the pledge was A:
executed. (Art. 2096, NCC) 1. Retain the thing until debt is paid. (Art. 2018, NCC) Art.
2098
Q: What is the effect of an undated contract of pledge? 2. To be reimbursed for the expenses made for the
preservation of the thing pledged. (Art. 2099, NCC)
A: An undated instrument of pledge cannot ripen into a 3. Creditor may bring any action pertaining to the
valid pledge (Betita v. Ganzon, 49 Phil. 87) pledgor in order to recover it from or defend it against
rd
a 3 person. (Legal Subrogation) (Art. 2103)
Q: What is the effect if no public instrument is made?
Q: What are the obligations of a pledgee?
A: When the contract of pledge is not recorded in a public
instrument, it is void as against third persons; the buyer of A:
the thing pledged is a third person. The fact that the person 1. Take care of the thing pledged with the diligence of a
claiming as pledgee has taken actual physical possession of good father of a family. (Art. 2099, NCC)
the thing sold will not prevent the pledge from being
declared void insofar as the innocent stranger is concerned. Note: Pledgee is liable for the loss or deterioration of the
(Tec Bi & Co. v. Chartered Bank of India, Australia and thing by reason of fraud, negligence, delay, or violation of the
China, 16 O.G. 908; Ocejo, Perez and Co. v. International terms of the contract.
Bank, 37 Phil. 631) rd
2. GR: Pledgee cannot deposit the thing pledged to a 3
Q: What is the reason behind the requisites? person.
A: The purpose of the requirements is to forestall fraud, XPN: Unless there is stipulation to the contract (Art. 2100,
because a debtor may attempt to conceal his property from NCC)
his creditors when he sees it in danger of execution by
simulating a pledge thereof with an accomplice (Tec Bi & Note: Pledgee is liable for the loss or deterioration of the thing
pledged caused by the acts or negligence of the agents or
Co. v. Chartered Bank of India, 41 Phil. 576).
employees of the pledgee.

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
3. Apply the fruits, income, dividends, or interests Q: What is the effect of the return of the thing pledged to
produced or earned by the property, to interests or the pledgor by the pledgee?
expenses first, then to the principal. (Art. 2102, NCC)
A: The pledge shall be extinguished. Any stipulation to the
4. GR: Cannot use the thing pledged without authority. contrary shall be void (Art. 2110, NCC).
(Art. 2104)
Q: What is the presumption when the thing is found in the
XPNs: possession of the pledgor subsequent to the perfection of
a. If the pledgor had given him authority or the pledge?
permission to use it;
b. If the use of the thing is necessary for its A: There is prima facie presumption that the thing pledged
preservation but only for that purpose. has been returned by the pledgee to the pledgor or owner,
in any of the following circumstances:
5. Return the thing pledged to the pledgor when the 1. If the thing is found in the possession of the
principal obligation is fulfilled or satisfied it. pledgor or owner after the pledge had been
perfected; or
Q: Does the debtor continue to be the owner of the thing 2. If the thing is found in the possession of a third
in case the same is expropriated by the State? person who received it from the pledgor or owner
nd
after the perfection of the pledge (2 par., Art.
A: No. Ownership is transferred to the expropriating 2110, NCC).
authority.
Note: It is presumed that the accessory obligation of pledge has
Note: The creditor may bring actions pertaining to the owner of been remitted when the thing pledged, after its delivery to the
the thing pledged in order to recover it from, or defend it against a creditor, is found in the possession of the debtor, or of a third
third person (Art. 2103, NCC). person who owns the thing (Art. 1274, NCC).
Q: Can the debtor ask for the return of the thing pledged Q: What is the requisite for the renunciation or
against the will of the creditor? abandonment of the pledge by the pledgee?
st
A: GR: No. A: There must be a statement in writing to that effect (1
sentence, Art. 2111, NCC).
XPNs:
1. If the debtor has paid the debt and its interest, Note: The renunciation of the pledge is not contrary to law, public
with expenses in a proper case (Art. 2105, NCC). order, public policy, morals or good customs. Further, Art. 1356 of
the NCC, which speaks of the form of contracts, must be complied
2. If the thing is in danger of destruction or
with.
impairment provided, the pledgor offers an
acceptable substitute for it which is of the same
Q: Is acceptance or return of the thing necessary for the
kind and not of inferior quality and without
validity of the renunciation under Art. 2111?
prejudice to the application of Art. 2108
whenever warranted. (Art. 2107)
A: No. it is not a case of donation where acceptance is
necessary to make the donation valid.
Q: Can the pledgee cause the sale of the thing pledged in
public auction where the obligation is not yet due?
Q: Suppose the thing was not returned, is there extinction
of the pledge?
A: Yes, if without the fault of the pledgee, there is danger of
destruction, impairment or diminution in value of the thing
A: Yes. Even if the thing was not returned, as long as there
pledged. The proceeds of the auction shall be security for
is an effective renunciation, abandonment or waiver, the
the principal obligation in the same manner as the thing
pledge is already extinguished.
originally pledged (Art. 2108, NCC).
The pledgor is considered a depositor and the pledgee shall
Q: What are the rights of the creditor who is deceived on
become a depositary of the thing. Accordingly, the law on
the substance or quality of the thing pledged?
deposit will apply.
A: To demand:
Q: What happens when the property was not sold at the
1. from the pledgor an acceptable substitute of the
first auction (such as when there are no participating
thing; or
bidders)?
2. the immediate payment of the principal
obligation (Art. 2109, NCC).
A: There will be another setting for the second auction
following the same formalities.
Note: The remedies are alternative and not cumulative. Only one
may be chosen. The law used the conjunctive “or”. Either one is
more convenient than annulment.

CIVIL LAW
Q: What is the remedy of the pledgee if no sale was OBM and the measure of such damages is interest at
effected on the second auction? the legal rate of 6% per annum on the amounts due
and unpaid at the expiration of the periods
A: The pledgee is now allowed to appropriate the thing respectively provided in the contracts (Integrated
pledged. This is an exception to the prohibition against Realty Corp. v. PNB, G.R. No. 60705, June 28, 1989)
pactum commissorium.
Q: What is the rule when two or more things are pledged?
Q: What is deed of acquittance?
A: The pledgee may choose which he will cause to be sold,
st
A: It is a document of the release or discharge of the unless there is a stipulation to the contrary (1 sentence,
pledgor from the entire obligation including interests and Art. 2119, NCC)
expenses. This shall be executed by the pledgee after
appropriating the thing in case a no sale was made in a Q: What is the restriction on the right of the pledgee
st
second auction. under the 1 sentence of Art. 2119?
Q: Who can bid in the public auction? A: He may only demand the sale of only as many of the
nd
things as are necessary for the payment of the debt (2
A: sentence, Art. 2119, NCC).
1. The public
2. Pledgor/owner/debtor – shall be preferred if same RIGHTS OF PLEDGOR
terms as the highest bidder is offered
3. Pledgee/creditor – he must not be the only bidder, Q: What are the rights of the pledgor?
otherwise, his bid is invalid and void
A:
Q: May a third person pay the pledgor’s debt? 1. Right to dispose the thing pledged, provided there is
consent of the pledgee (Art. 2097, NCC)
A: Yes, if he has any interest in the fulfillment of the
principal obligation (Art. 2117, NCC). Note: The pledge however, shall continue in possession.
Q: What is the rule when what has been pledged is a 2. Right to ask that the thing pledged be deposited (Art.
“credit”? 2104 and Art. 2106, NCC)
A: The pledgee may collect and receive the amount due. He 3. Right to substitute thing pledged (Art. 2107, NCC)
shall apply the same to the payment of his claim, and
deliver the surplus, should there be any, to the pledgor (Art. Q: When may the owner ask that the thing pledged be
2118, NCC). deposited judicially or extrajudicially?
Q: Santos made time deposits with OBM. IRC, through its A:

president Santos, applied for a loan with PNB. To secure 1. If the creditor uses the thing without authority
the loan, Santos executed a Deed of Assignment of the 2. If he misuses the the thing in any other way
time deposits in favor of PNB. When PNB tried to collect 3. If the thing is in danger of being lost or impaired
from OBM, the latter did not pay the CTDs. PNB then because of the negligence or willful act of the pledge
demanded payment from Santos and IRC, but the latter (Art. 2106, NCC)
refused payment alleging that the obligation was deemed
paid with the irrevocable assignment of the CTDs. Q: Does the pledgor have the right to demand the return
of the thing pledged against the will of the creditor?
1. Is the liability of IRC deemed paid by virtue of
the deed of assignment? A: No. He cannot ask for its return until the obligation is
2. Is OBM liable for damages fully paid including interest due thereon and expenses
incurred for its preservation (Art. 2105, NCC)
A:
1. No. For all intents and purposes, the deed of Q: What are the requisites before the pledgor may
assignment in this case is actually a pledge. Where a substitute the thing pledged with another thing?
CTD in a bank, payable at a future time, was handed
over by a debtor to his creditor, it was not payment, A:
unless there was an express agreement on the part of 1. Pledgor has reasonable grounds to fear the
the creditor to receive it as such. destruction or impairment of the thing pledged;
2. Yes. While it is true that no interest shall be due unless 2. No fault on the part of the pledge
it has been expressly stipulated in writing, this applies 3. Pledgor is offering in place of the thing, another thing
only to interest for the use of money. It does not in pledge which is of the same kind and quality as the
comprehend interest paid as damages. Santos has the former; and
right to recover damages resulting from the default of

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
4. Pledgee does not choose to exercise his right to cause Q: What must the pledgee do before he may cause sale of
the thing pledged to be sold at public auction (Art. the thing pledged?
2107, NCC)
A: The pledgee must first make a demand of the amount
FORECLOSURE for which the thing is retained. After the demand, the
pledgee must proceed with the sale of the thing within
Q: When may a pledgee foreclose the thing pledged? thirty (30) days. Otherwise, the pledgor can require of him
the return of the thing retained.
A: When there is no payment of the debt on time, the
object of the pledge may be alienated for the purpose of Q: To whom will the remainder of the price pertain?
satisfying the claims of the pledgee.
A: The remainder of the price of sale shall be delivered to
Q: What is the procedure for the public sale of a thing the obligor (Art. 2121).
pledged?
Q: What are the instances when the pledgor may demand
A: that the thing pledged be deposited judicially or
1. The obligation must be due and unpaid extrajudicially?
2. The sale of the thing pledged must be at public auction
3. There must be notice to the pledgor and owner, A:
stating the amount for which the sale is to be held 1. Creditor uses the thing without authority
4. The sale must be conducted by Notary Public. 2. Creditor misuses the thing
3. The thing is in danger of being lost or impaired due to
PLEDGE BY OPERATION OF LAW the negligence or willful acts of the pledgee.
Q: What is a pledge created by operation of law? Q: What are the effects of sale of the thing pledged?
A: Pledge by operation of law or Legal Pledges are those A:

constituted or created by operation of law. This refers to 1. Extinguish the principal obligation even if the proceeds
the right of retention. of the sale do not satisfy the whole amount of the
obligation.
Q: What rules apply to legal pledge? 2. If proceeds from the sale exceed the amount due, the
debtor is not entitled to the excess, the excess goes to
A: the pledgee. This is to compensate him for the
1. The rules governing conventional pledge applies. eventuality where the purchase price is lesser than the
2. There is no definite period for the payment of the amount of the debt, wherein he cannot receive any
principal obligation. The pledge must, therefore, make deficiency unless there is a contrary agreement or in
a demand for the payment of the amount due him. case of legal pledge, the pledgor is entitled to the
Without such demand, he cannot exercise the right of excess
sale at public auction. (De Leon) 3. If the proceeds of the sale is less than the amount due,
the creditor has no right to recover the deficiency and
Q: What are the instances of legal pledges where there is the pledgor is not liable for the deficiency even if there
right of retention? is a stipulation that he be so liable. Such stipulation is
void.
A:
1. Art. 546 – Right of the possessor in good faith to retain Q: What is the meaning of the right of the mortgagee or
the thing until refunded of necessary expenses. pledgee to foreclose?
2. Art. 1707 – Lien on the goods manufactured or work
done by a laborer until his wages had been paid. A: If the debtor failed to pay on maturity date, the thing
3. Art. 1731 – Right to retain of a worker who executed pledged or mortgaged may be sold at public auction as
work upon a movable until he is paid. provided by law so that the proceeds may be used for
4. Art. 1914 – Right of an agent to retain the thing payment of the obligation.
subject of the agency until reimbursed of his advances
and damages (Arts. 1912 and 1913, NCC).
5. Art. 1994 – Right of retention of a depositary until full
payment of what is due him by reason of the deposit.
6. Art. 2004 – Right of the hotel-keeper to retain things
of the guest which are brought into the hotel, until his
hotel bills had been paid.

CIVIL LAW
PLEDGE DISTINGUISHED FROM MORTGAGE to the principal

Sale at public auction of
Q: Distinguish contract of pledge from chattel mortgage. Sale may be judicial or
the thing pledged is
extrajudicial
always extrajudicial
A: Description of the thing
CHATTEL MORTGAGE PLEDGE Must be registered,
and the date of pledge
otherwise, it is not valid
Delivery must appear in a public
against third persons
Delivery is not instrument otherwise, it
Delivery is necessary although binding
necessary is not valid as to third
between the parties
Law governing the sale person
Procedure for the sale Real right and real
Not a real right
of the thing given as property by itself
Art. 2112, NCC
security is governed by
Sec. 14, Act No. 1508 REAL MORTGAGE
Excess
If the property is sold, Q: What is real estate mortgage (REM)?
If the property is the debtor is not
foreclosed, the excess entitled to the excess A: It is a contract whereby the debtor secures to the
goes to the debtor unless otherwise creditor the fulfillment of the principal obligation, specially
agreed. subjecting to such security immovable property or real
Recovery of deficiency rights over immovable property in case the principal
The creditor is entitled obligation is not fulfilled at the time stipulated.
to recover the
The creditor is not Q: State the essence of a contract of mortgage?
deficiency from the
entitled to recover the
debtor except if the
deficiencynotwithstandi A: The essence of a contract of mortgage indebtedness is
chattel mortgage is a
ng any stipulation to the that a property has been identified or set apart from the
security for the
contrary. mass of the property of the debtor-mortgagor as security
purchase of property in
installments for the payment of money or the fulfillment of an
Possession obligation to answer the amount of indebtedness in case of
Possession remains with Possession is vested in default of payment.
the debtor the creditor
Contract Q: What are the requisites for valid constitution of a real
Formal contract Real contract mortgage?
Recording in a public instrument
A:
Must be in a public
1. It covers only immovable property and alienable real
instrument containing
Must be recorded in a rights imposed upon immovables
description of the thing
public instrument to 2. It must appear in a public instrument
pledged and the date
bind third persons 3. Registration in the Registry of Property is necessary to
thereof to bind third rd
bind 3 persons
persons
Q: What are the kinds of real mortgages?
Q: Distinguish contract of pledge from real estate
mortgage.
A:
1. Conventional mortgages – constituted voluntarily by
A:
the contracting parties.
REAL ESTATE
PLEDGE 2. Legal mortgage – required by law.
MORTGAGE
3. Equitable mortgage – intention of the parties is to
Real contract Consensual contract make the immovable as a security for the performance
Subject matter is Subject matter is real of the obligation but the formalities of a real mortgage
personal property property are not complied with.
Possession of the thing Possession of the thing
pledged is vested in the mortgaged remains Q: Distinguish contract of real estate mortgage from
creditor with the debtor contract of sale with right of repurchase.
Pledgee has the right to
receive the fruits of the A:
thing pledged, with the REAL ESTATE SALE WITH RIGHT OF
Mortgagee does not
obligation of applying MORTGAGE REPURCHASE
possess such right
the same to the interest Principal and
of the debt, if owing, Accessory contract
independent contract
and the balance, if any,

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
There is transfer of title

There is no transfer of Note: It is a clause which operates as a convenience and
and possession of the
title and possession of accommodation to the borrowers as it makes available additional
property, although
the property funds without their having to execute additional security
conditional
documents, thereby saving time, travel, loan closing costs, costs of
Creditor has no right to extra legal services, recording fees etc.
The vendee a retro is
the fruits of the
entitled to the fruits
property during the Q: How do you construe such clause?
even during the period
pendency of the
of redemption
mortgage A: It must be carefully scrutinized and strictly construed
If the debtor fails to pay As soon as there is a particularly where the mortgage contract is one of
his debt, the creditor consolidation of title in adhesion.
cannot appropriate the the vendee a retro, he
property mortgaged nor may dispose of it as an Note:
dispose of it absolute owner
1. A mortgage must sufficiently describe the debt sought
Q: Is registration of mortgage a matter of right? to be secured, and an obligation is not secured by a
mortgage unless it comes fairly within the terms of the
mortgage.
A: Yes. By executing the mortgage, the mortgagor is
2. Where the intention of the mortgagor is to secure a
understood to have given his consent to its registration, larger amount, the action to foreclose may be for the
and he cannot be permitted to revoke it unilaterally. larger amount.
3. But where the obligation is not a series of
Q: What is the meaning of mortgage as a real and indeterminate sums incurred over a period of time but 2
inseparable right? specific amounts procured in a single instance, what
applies is the general rule state above that an action to
A: The mortgage directly and immediately subjects the foreclose a mortgage must be limited to the amount
mentioned in the mortgage.
property upon which it is imposed, whoever the possessor
4. A mortgage given to secure future advancements is a
may be, to the fulfillment of the obligation for whose continuing security and is not discharged by the
security it was constituted (Art. 2126, NCC). repayment of the amount named in the mortgage, until
the full amount of the advancements is paid. It
Q: What are the things that are deemed included in the permitted the mortgagor to take the money as it is
mortgage? needed and thus avoid the necessity of paying interest
until the necessity for its use actually arises.
A:
1. Natural accessions Q: Is the amount stated in the contract controlling in case
2. Improvements of mortgage securing future advancements?
3. Growing fruits
4. Rents A: No. The amount named in the contract does not limit the
5. Income amount for which the mortgage stand as a security, if, from
6. Insurance proceeds the four corners of the instrument the intent to secure
7. Expropriation price (Art. 2127, NCC) future and other indebtedness can be gathered.
Q: When does the mortgage lien attach in case of new or Q: Petitioner obtained a loan of P20K from defendant
future improvements? Rural Bank of Kawit. The loan was secured by a REM over
a parcel of land. The mortgage contract states that the
A: On the date of the registration of the mortgage (Luzon mortgage will cover the payment of the loan of P20K and
Lumber and Hardware Co., Inc, v. Quiambao, G.R. No. L- such other loans or other advances already obtained or to
5638, Mar. 20, 1954). be obtained by the mortgagors from the bank. The loan of
P20k was fully paid. Thereafter they again obtained a loan
Q: What is dragnet clause? of P18K, secured by the same mortgage. The spouses
defaulted. The bank extra judicially foreclosed the
A: It is a mortgage provision which is specifically phrased to mortgage. Was the foreclosure sale valid?
subsume all debts of past or future origin. It is a valid and
legal undertaking, and the amounts specified as A: Yes. It has long been settled that mortgages given to
consideration in the contracts do not limit the amount for secure future advancements are valid and legal contracts;
which the pledge or mortgage stands as security, if from that the amounts named as consideration in said contract
the four corners of the instrument, the intent to secure do not limit the amount for which the mortgage may stand
future and other indebtedness can be gathered. A pledge as security, if from the four corners of the instrument the
or mortgage given to secure future advancements is a intent to secure future and other indebtedness can be
continuing security and is not discharged by the repayment gathered. A mortgage given to secure advancement is a
of the amount named in the mortgage until the full amount continuing security and is not discharged by repayment of
of all advancements shall have been paid (Premiere the amount named in the mortgage, until the full amount
Development Bank v. Central Surety & Insurance, Inc., G.R. of the advancements is paid (Mojica v. CA, G.R. No. 94247,
No. 176246 [2009]). Sept. 11, 1991).

CIVIL LAW
Q: May a mortgage credit be alienated or assigned to a Q: Does an action for foreclosure of mortgage survive the
third person? death of mortgagor?
A: Yes, in whole or in part, with the formalities required by A: Yes, because the claim is not a pure money claim but an
law (Art. 2128, NCC). action to enforce a mortgage lien. Being so, the judgment
rendered therein may be enforced by a writ of execution.
Q: What are the requisites to be followed for assignment The action may be prosecuted by the interested person
of credit? against the executor or administrator independently of the
testate or intestate proceedings of the settlement of the
A: An assignment of a credit, right or action shall produce mortgagor’s estate “for the reason that such claims cannot
no effect as against third persons, unless it appears in a in any just sense be considered claims against the estate,
public instrument, or the instrument is recorded in the but the right to subject specific property to the claim arises
Registry of Property in case the assignment involves real from the contract of the debtor whereby he has during life
property (Art. 1625, NCC). set aside certain property for its payment, and such
property does not, except in so far as its value may exceed
Q: May the creditor claim from the third person in the debt, belong to the estate” (Testamentaria de Don
possession of the property payment of the credit? Amadeo Matute Olave v. Canlas, No. L-12709, Feb. 28,
1962).
A: Yes, up to the extent secured by the property which the
third party possesses, in terms and with the formalities Q: What are the options or remedies of the mortgagee in
which the law establishes (Art. 2129, NCC). case of death of the debtor?
Q: Is a stipulation forbidding the owner from alienating A:

the immovable mortgaged valid? 1. To waive the mortgage and claim the entire debt from
the estate of the mortgagor as an ordinary claim;
A: No. The prohibition to alienate is contrary to public good 2. To foreclose the mortgage judicially and prove any
inasmuch as the transmission of property should not be deficiency as an ordinary claim; or
unduly impeded (Report, Code Commission, p. 58). 3. To rely on the mortgage exclusively, foreclosing the
same at any time before it is barred by prescription,
Q: What are the laws that govern contract of real without right to file claim for any deficiency (Maglaque
mortgage? v. Planters Development Bank, GR No. 109472, May
18, 1999).
A:
1. New Civil Code Q: When is judicial foreclosure considered completed?
2. Mortgage Law
3. Property Registration Decree (PD 1529) A: A foreclosure sale is not complete until it is confirmed
4. Sec. 194, as amended by Act No. 3344, Revised and before such confirmation, the court retains control of
Administrative Code (Phil. Bank of Commerce v. De the proceedings by exercising sound discretion in regard to
Vera, G.R. No. L-18816, Dec. 29, 1962) it either granting or withholding confirmation as the rights
5. R.A. 4882 – law governing aliens who become and interests of the parties and the ends of justice may
mortgagees. require (Rural Bank of Oroquieta v. CA, No. 53466, Nov. 10,
1980).
FORECLOSURE
Q: What are the effects of confirmation of sale?
Q: What is foreclosure?
A: There can be no redemption of the property after
A: It is a remedy available to the mortgagee in which he confirmation. Such confirmation retroacts to the date of
subjects the mortgaged property to the satisfaction of the the auction sale. After the confirmation, the previous
obligation. owners lose any right they may have had over the property,
which rights in turn vested on the Purchaser of the property
Q: What are the kinds of foreclosure? (Lonzame v. Amores, No. L-53620, Jan. 31, 1985).
A: Note: GR: The redemption must be made within one year after the
1. Judicial – governed by Rule 68, Rules of Court sale, if the mortgagee is a bank, banking or credit institutions (Sec.
78, R.A. 337).
2. Extrajudicial– mortgagee is given a SPA to sell the
mortgaged property (Act No. 3135) XPN:,If the mortgagor is a juridical person, it can exercise the right
to redeem the foreclosed property until, but not after, the
Q: What is the nature of judicial foreclosure? registration of the certificate of foreclosure sale or within three
months after foreclosure, whichever is earlier. Thereafter, such
A: It is an action quasi in rem (Ocampo v. Domalanta, 20 mortgagor loses its right of redemption (Sec. 47, General Banking
SCRA 1136). Law)

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
Q: What is the basis of extrajudicial foreclosure? of paying subscribers, and that it is published at regular
intervals. The newspaper must be available to the public in
A: An extrajudicial foreclosure may only be effected if in the general, and not just to a select few chosen by the
mortgage contract covering a real estate, a clause is publisher. Otherwise, the precise objective of publishing
incorporated therein giving the mortgagee the power, upon the notice of sale in the newspaper will not be realized.
default of the debtor, to foreclose the mortgage by an (Metropolitan Bank and Trust Company, Inc. v. Eugenio
extrajudicial sale of the mortgage property (Sec. 1, Act No. Peñafiel, G.R. No. 173976, Feb. 27, 2009)
3135, as amended by Act No. 4148).
Q: When is a paper deemed a newspaper of general
The authority to sell may be done in a separate document circulation?
but annexed to the contract of mortgage. The authority is
not extinguished by the death of the mortgagor or A:
mortgagee as it is an essential and inseparable part of a 1. It must be published for the dissemination of local
bilateral agreement (Perez v. PNB, No. L-21813, July 30, news and general information;
1966). 2. It must have a bona fide subscription list of paying
subscribers;
Q: How is extrajudicial foreclosure initiated? 3. It must be published at regular intervals; and
4. It must be available to the public in general and
A: By filing a petition with the office of the sheriff. It may not just to a select few chosen by the publisher,
also be initiated through a Notary Public commissioned in otherwise, the precise objective of publication of
the place where the property is situated. notice of sale will not be realized;
5. It must not be devoted to the interests or
Note: Notice containing the place and date is required before an published for the entertainment of a particular
auction sale is made in extrajudicial foreclosure. (Sec. 3, Act No. profession, trade, calling, race or religion.
3135)
Q: Can the publication and posting requirements be
Q: What are the requisites of notice of sheriff’s sale? waived?
A: It must contain the correct number of the certificate of A: No, they are imbued with public policy considerations
title and the correct technical description of the real and any waiver thereon would be inconsistent with the
property to be sold (San Jose v. CA, GR No. 106953, Aug. 19, intent and letter of the law. It would thus be converting
1993). into a private sale what ought to be a public auction.
Q: Where should the notice be posted? Q: May a mortgagor enjoin the implementation of a writ
of possession on the ground that there is a pending case
A: The notice of sale should be posted in at least 3 public for annulment of the extrajudicial foreclosure of the REM?
places in the city or municipality where the property is
situated: A: No. As a rule, any question regarding the validity of the
mortgage or its foreclosure cannot be a legal ground for
a. Sheriff’s Office; refusing the issuance of a writ of possession. Regardless of
b. Assessor’s Office; and whether or not there is a pending suit for annulment of the
c. Register of Deed mortgage or the foreclosure itself, the purchaser is entitled
to a writ of possession, without prejudice to the outcome of
Q: What is the purpose of notice of sale? the case. Hence, an injunction to prohibit the issuance of
writ of possession is entirely out of place. Prohibition does
A: To inform the public of the nature and condition of the not lie to enjoin the implementation of a writ of possession.
property sold, and of the time, place and terms of the sale. Once the writ of possession has been issued, the trial court
has no alternative but to enforce the writ without delay
Q: MBTC granted a loan to spouses Peñafiel, who (Sps. Ong v. CA, G.R. No. 121494, June 8, 2000).
mortgaged their two (2) parcels of land in Mandaluyong.
The spouses defaulted in the payment. MBTC instituted an Q: Can the mortgagee recover the deficiency?
extrajudicial foreclosure proceeding under Act No. 3135.
The Notice of Sale was published in Maharlika Pilipinas, A: If there be a balance due to the mortgagee after applying
which has no business permit in Mandaluyong and its list the proceeds of the sale, the mortgagee is entitled to
of subscribers shows that there were no subscribers from recover the deficiency (DBP v. Mirang, G.R. No. L-29130,
Mandaluyong. Did MBTC comply with the publication Aug. 8, 1975).
requirement under Section 3, Act No. 3135?
Note: In judicial foreclosure, the Rules of Court specifically gives
A: No. Maharlika Pilipinas is not a newspaper of general the mortgagee the right to claim for deficiency in case a deficiency
circulation in Mandaluyong where the property is located. exists (Sec. 6, Rule 70).
To be a newspaper of general circulation, it is enough that
it is published for the dissemination of local news and While Act No. 3135 governing extrajudicial foreclosures of
general information, that it has a bona fide subscription list mortgage does not give a mortgagee the right to recover deficiency

CIVIL LAW
after the public auction sale, neither does it expressly or Q: What are the requisites for valid right of redemption?
impliedly prohibit such recovery.
A:
Q: What is stipulation of upset price? 1. Must be made within one year from the time of the
registration of the sale.
A: It is a stipulation of minimum price at which the property 2. Payment of the purchase price of the property plus 1%
shall be sold to become operative in the event of a interest per month together with the taxes thereon, if
foreclosure sale at public auction. It is null and void. any, paid by the purchaser with the same rate of
interest computed from the date of registration of the
REDEMPTION sale; and
3. Written notice of the redemption must be served on
Q: What is redemption? the officer who made the sale and a duplicate filed
with the proper Register of Deeds (Rosales v. Yboa,
A: Transaction by which the mortgagor reacquires or buys G.R. No. L-42282, Feb. 28, 1983).
back the property which may have passed under the
mortgage or divests the property of the lien which the Note: The redemptioner should make an actual tender in good
mortgage may have created. faith of the full amount of the purchase price as provided above,
i.e., the amount fixed by the court in the order of execution or the
amount due under the mortgage deed, as the case may be, with
Q: What are the kinds of redemption?
interest thereon at the rate specified in the mortgage, and all the
costs, and judicial and other expenses incurred by the bank or
A: institution concerned by reason of the execution and sale and as a
1. Equity of redemption – right of mortgagor to redeem result of the custody of said property less the income received
the mortgaged property after his default in the from the property (Heirs of Quisimbing v. PNB, G.R. No. 178242,
performance of the conditions of the mortgage but Jan. 20, 2009).
before the sale of the mortgaged property or
confirmation of sale. It applies in case of judicial Q: Is the period of redemption a prescriptive period?
foreclosure.
2. Right of redemption – right of the mortgagor to A: No. The period of redemption is not a prescriptive period
redeem the mortgaged property within one year from but a condition precedent provided by law to restrict the
the date of registration of the certificate of sale. It right of the person exercising redemption.
applies in case of extrajudicial foreclosure.
If a person exercising the right of redemption has offered to
Q: X and Y, judgment creditors of A, obtained the transfer redeem the property within the period fixed, he is
of the title of the mortgaged property in their names. considered to have complied with the condition precedent
Earlier, A executed a mortgage over the same property in prescribed by law and may thereafter bring an action to
favor of FGU Insurance. The latter mortgage was enforce redemption.
registered. When A defaulted, FGU foreclosed the
property. A certificate of sale was thereafter issued in If, on the other hand, the period is allowed to lapse before
FGU’s favor, which was confirmed by the RTC. However, the right of redemption is exercised, then the action to
before the new TCT could be issued, X and Y filed their enforce redemption will not prosper, even if the action is
respective motion for intervention and to set aside the brought within the ordinary prescriptive period.
judgment alleging that they are the new owners of the
property and the failure of FGU to implead X and Y in the Q: D obtained a loan from C secured by a REM over a
action for foreclosure deprived the latter of due process. parcel of land. When D defaulted, C extrajudicially
Is the contention of X and Y correct? foreclosed the property. C was declared the highest bidder
in the auction. On October 29, 1993, C caused the
A: No. Subordinate lien holders acquire only a lien upon the registration of the certificate of sale. On November 9,
equity of redemption vested in the mortgagor, and their 1994 D filed a complaint for annulment of the extrajudicial
rights are strictly subordinate to the superior lien of the foreclosure and auction sale. Can D redeem the property
mortgagee. Such equity of redemption does not constitute beyond the one year redemption period?
a bar to the registration of the property in the name of the
mortgagee. Registration may be granted in the name of the A: No. D lost any right or interest over the subject property
mortgagee but subject to the subordinate lien holders’ primarily because of his failure to redeem the same in the
equity of redemption, which should be exercised within manner and within the period prescribed by law. His
ninety (90) days from the date the decision becomes final. belated attempt to question the legality and validity of the
This registration is merely a necessary consequence of the foreclosure proceedings and public auction must
execution of the final deed of sale in the foreclosure accordingly fail. (Sps. Landrito v. CA G.R. No. 133079, Aug.
proceedings (Looyuko v. CA, G.R. No. 102696, July 12, 9, 2005)
2001).
Q: Can a mortgagor, whose property has been
extrajudicially foreclosed and sold, validly execute a

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
mortgage contract over the same property in favor of a
third party during the period of redemption?
A: Yes.The purchaser at the foreclosure sale merely

acquires an inchoate right to the property which could
ripen into ownership only upon the lapse of the redemption
period without his credit having been discharged, it is
illogical to hold that during that same period of twelve
months the mortgagor was "divested" of his ownership,
since the absurd result would be that the land will
consequently be without an owner although it remains
registered in the name of the mortgagor. Such mortgage
does not involve a transfer, cession or conveyance of the
property but only constitutes a lien thereon (Medida v. CA,
G.R. No. 98334, May 8, 1992).
Q: DBP guaranteed LCD’s loan. When LCD defaulted, DBP

paid it and sought reimbursement. LCD failed to reimburse
DBP, hence DBP extrajudicially foreclosed the REM, where
it was the highest bidder. The Sheriff’s certificate of sale
was annotated in the certificate of titles on April 30, 1976.
La Campana failed to redeem the properties. The court,
among others, ordered LCD to pay such sums of money
unlawfully collected or received by way of rentals and/or
fruits from the subject properties to DBP. When should
the period for the remittance of collected/received
rentals/fruits from the properties, of LCD to DBP start?
A: In foreclosure proceedings, the buyer becomes the

absolute owner of the property purchased if it is not
redeemed during the prescribed period of redemption,
which is one year from the date of registration of the sale.
The Sheriff’s certificate of sale was annotated in the
certificate of titles on April 30, 1976. DBP became the
absolute owner of the properties on May 1, 1977. Thus,
the period to be considered in determining the amount of
collection should start from May 1, 1997 up to the time
when the possession of the properties are actually and
completely surrendered to DBP (La Campana Development
Corporation v. DBP, G.R. No. 146157, Feb. 13, 2009).

CIVIL LAW
Flowchart of Extra-judicial Foreclosure of

Real Estate Mortgage
Execution of loan + REM agreement (REM-

with built-in SPA to sell in case of default)
Default of mortgagor for non-payment or

violation of the terms of the loan or REM
agreement
Filing of petition for sale with

Clerk of Court
Publication / posting of notice /

Once a week for 3 consecutive weeks in a
jurisdictional requirements
newspaper of general circulation
Foreclosure sale
Registration of the sale with Note: The redemption price:

Registry of Deeds
If the mortgagee is a bank:
outstanding obligation
One year redemption period
+ interest stipulated in the agreement
+ cost and expenses incurred
Consolidation of title by filing affidavit – income derived

with Registry of Deeds (operative
document)
If the mortgagee is not a bank:

Cancellation of title of the mortgagor
Bid price + 12% interest per annum
and issuance of new title in favor of
mortgagee
Note:
if after the expiration of the redemption period, the
petition for writ of possession is mandatory or
Petition for writ of possession
ministerial
but before the expiration of the redemption period,
such writ is only discretionary

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
Flowchart for Judicial Foreclosure of Real Estate Mortgage
(Rule 68, 1997 Rules of Civil Procedure)
Complaint with the court. Include

subsequent lien holders, otherwise
Entry of judgment
equity of redemption will not be Hearing Judgment
divested. (Lampin v. IAC, No. L-
70987, Sept. 29, 1988))
90 days – 120 days from

Upon failure to pay,
Mortgagee to entry of judgment for
mortgagee to file
file motion for mortgagor to pay his
Execution sale motion for execution
debt, as determined by
confirmation of foreclosing mortgage
court
sale
Issuance of order confirming

the sale (order is appealable)
(Ocampo v. Dimalanta, No. L- Cancellation of the title of
Registration of the order
21011, Aug. 30, 1967) the mortgagor/issuance of
confirming the sale
new title to the mortgagee
Wait for finality of order
* If mortgagee/bidder is bank or credit Secure a writ of

institution, mortgagor has one more year possession, by motion,
from registration of order confirming the from the same court that
sale + certificate of sale to redeem the ordered the foreclosure
property.
Note:
GR:In judicial foreclosure, there is only equity of redemption.
XPN: If the mortgagee is a bank or credit institution, there is one year right of redemption.
Equity of redemption – right of the mortgagor not to be divested of the ownership of the mortgaged
property and to stop the foreclosure sale by paying the mortgagee debt within 90-120 days from entry of
judgment and even beyond, until finality of order confirming the sale.

CIVIL LAW
ANTICHRESIS Q: Distinguish antichresis from:

1. Real estate mortgage;
Q: What is antichresis? 2. Pledge; and
3. Pacto de retro sale.
A: It is a contract whereby the creditor acquires the right to
receive the fruits of an immovable of the debtor, with the A:
obligation to apply them to the payment of interest, if REAL ESTATE
ANTICHRESIS
owing, and thereafter to the principal of his credit. MORTGAGE
Debtor usually retains
Q: What are the characteristics of antichresis? Property is delivered to
possession of the
creditor
property
A: Creditor acquires only
1. Accessory contract. Creditor has no right to
the right to receive the
2. Formal contract – the amount of the principal and of receive fruits, but
fruits of the property;
the interest must both be in writing; otherwise the mortgage creates real
does not produce a real
contract of antichresis is void. right against the
right unless registered
3. It deals only with immovable property. property
in the Registry Property
4. It is a real right. Creditor obliged to pay
5. The creditor has the right to receive the fruits of the the taxes and charges Creditor has no such
immovable. upon the estate unless obligation
6. It is a real contract. stipulated otherwise
7. It can guarantee all kinds of valid obligations. There is an express
stipulation that the
Note: It is not essential that the loan should earn interest in order creditor shall apply the
that it can be guaranteed with a contract of antichresis. Antichresis There is no such
fruits to the payment of
is susceptible of guaranteeing all kinds of obligations, pure or obligation on the part of
conditional [Javier v. Valliser, (CA) N. 2648-R, Apr. 29, 1950; Sta. the interest, if owing,
the mortgagee
Rosa v. Noble, 35 O.G. 27241] and thereafter to the
principal of the debt.
A stipulation authorizing the antichretic creditor to
appropriate the property upon the non-payment of the ANTICHRESIS PLEDGE
debt within the period agreed upon is void (Art. 2038, NCC). Refers to real property Personal property
Formal Real
Q: What is the form of a contract of antichresis and its Principal and interest Need not be in writing,
contents? must be specified in oral evidence may be
writing, otherwise allowed to prove the
A: FDA-Pa contract is void same.
1. Covers only the Fruits of real property
ANTICHRESIS PACTO DE RETRO SALE
2. Delivery of the property necessary so that CR may Creditor is given the
receive the fruits therefrom right to enjoy the fruits
and apply them to the Creditor does not have
Note: Delivery of the property to the creditor is required only payment of the interest such right
in order that the creditor may receive the fruits and not for and to the principal of
the validity of the contract.
the loan
3. Amount of principal and interest must be specified in
Q: Is prescription as a mode of acquiring ownership
writing, otherwise, the contract shall be void.
available to the creditor in antichresis?
4. Express agreement that debtor will give Possession to
A: No. His possession of the property is not in the concept
the CR and that CR will apply the fruits to the interest
of an owner but that of a mere holder during the existence
and then to the principal.
of the contract (Ramirez v. CA, G.R. No. L-38185, September
Note: The fruits of the immovable which is the object of the
24, 1986).
antichresis must be appraised at their actual market value at
the time of the application (Art. 2138).The property delivered Q: How should the amount of payment in antichresis be
stands as a security for the payment of the obligation of the determined?
debtor in antichresis. Hence, the debtor cannot demand its
return until the debt is totally paid. A: The actual market value of the fruits at the time of the
application thereof to the interest and the principal shall be
the measure of such application (Art. 2133, NCC).

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
Q: Who are the parties to a contract of antichresis? CHATTEL MORTGAGE
A: Q: What is a chattel mortgage?

1. Antichretic creditor – one who receives the fruits on
the immovable property of the debtor. A: It is a contract by virtue of which personal property is
2. Antichretic debtor – one who pays his debt through recorded in the Chattel Mortgage Register as a security for
the application of the fruits of his immovable property. the performance of an obligation.
Q: What are the obligations of an antichretic creditor? Q: What are the characteristics of chattel mortgage?
A: To: A:
1. pay the taxes and charges assessable against the 1. It is a formal contract because it must be embodied in
property like real estate taxes and others; a public instrument and recorded in the Chattel
2. bear the necessary expenses for the preservation Mortgage Register;
of the property;
3. bear the expenses necessary for the repair of the 2. It is an accessory contract because its existence
property; and depends upon an existing valid principal obligation;
4. apply the fruits received for payment of the
outstanding interests, if any, and thereafter of the 3. It is a unilateral contract because the obligation is only
principal. on the part of the creditor to free the chattel from
encumbrance upon the payment of the principal
Q: What is the rule on the application of the fruit upon the obligation;
debt?
4. It does not convey dominion but is only a security (In
A: It must be expressly agreed between the creditor and re: Du Tec Chuan, No. 11156, March 28, 1916);
the debtor that the former, having been given possession of
the properties given as security, is to apply their fruits to 5. It creates a real right or a lien which is being recorded
the payment of interest, if owing, and thereafter to the and follows the chattel wherever it goes (Northern
principal of his credit (Art. 2132, Civil Code). Motors, Inc. v. Coquia, No. L-40018, Dec. 15, 1975).
Q: When can the antichretic debtor reacquire the Q: What are the requisites in a chattel mortgage?
possession of his property?
A:
A: The debtor can only demand the return of the property 1. GR: It covers only movable property
after having fully paid his obligations to the creditor. It is
not fair for the debtor to regain the possession of the XPN: When the parties treat as personalty that which
property when his debt has not been fully paid. Until there is according to its nature realty.
is full payment of the obligation, the property shall stand as
security therefor (Macapinlac v. Gutierrez Repide, No. 2. Registration with the Chattel Mortgage Register.
18574, Sept. 20, 1922). 3. Description of the property.
rd
4. Accompanied by an affidavit of good faith to bind 3
Q: How can the creditor be exempted from the obligations persons.
imposed by Art. 2135?
Note: The absence of an affidavit of good faith does not affect the
A: The creditor may compel the debtor to re-enter into the validity of the contract.
property.
Q: What are the laws that govern chattel mortgages?
Note: Article 2135. The creditor, unless, there is a stipulation to the
contrary, is obliged to pay the taxes and charges upon the estate. A:
He is also bound to bear the expenses necessary for its 1. Chattel Mortgage Law (Act No. 1508)
preservation and repair. 2. Provisions of the Civil Code on pledge
Q: What is the remedy of the creditor in case of Note: In case of conflict between nos. 1 and 2, the former
nonpayment of his credit? shall prevail.
A: File: 3. Revised Administrative Code

1. an action for collection; or 4. Revised Penal Code (Art. 319)
2. a petition for the public sale of the property 5. Other special laws (i.e. Motor vehicle law)
(Barretto v. Barretto, No. 11933, Dec. 1, 1917). 6. Ship Mortgage Decree of 1978 (P.D. No. 1521)

CIVIL LAW
Q: What are the similarities between chattel mortgage Q: Distinguish contract of chattel mortgage from contract
and pledge? of real estate mortgage
A: A:
1. Both are executed to secure performance of a REAL ESTATE
CHATTEL MORTGAGE
principal obligation; MORTGAGE
2. Both are constituted only on personal property; Subject matter
3. Both are indivisible; Personal property Real property
4. Both constitute a lien on the property; As to Guaranty of Future Obligations
5. In both cases, the creditor cannot appropriate the Cannot guaranty future
property to himself in payment of the debt; obligations because it May guaranty future
6. When the debtor defaults, the property must be requires immediate obligations
sold for the payment of the creditor recording
7. Extinguished by the fulfillment of the principal
obligation or by the destruction of the property REGISTRATION
pledged or mortgaged.
Q: What is the legal significance of registration?
Q: What may be the subject matter of chattel mortgage?
A: It is tantamount to the symbolic delivery of the mortgage
A: to the mortgagee, which is equivalent to actual delivery
1. Shares of stock in a corporation; (Meyers v. Thein, No. 5577, Feb. 21, 1910).
2. Interest in business;
3. Machinery and house of mixed materials treated by Q: What s the period within which the registration should
parties as personal property and no innocent third be made?
person will be prejudiced thereby (Makati Leasing and
Finance Corp. v. Weaver Textile Mills, Inc., No. L-58469, A: The law does not provide any specific time. Yet, the law
May, 16, 1983); is substantially and sufficiently complied with where the
4. Vessels, the mortgage of which have been recorded registration is made by the mortgagee before the
with the Philippine Coast Guard in order to be mortgagor has complied with his principal obligation and no
effective as to third persons; right of innocent third persons is prejudiced.
5. Motor vehicles, the mortgage of which had been
registered both with the Land Transportation Q: What is the difference in registration of real mortgage
Commission and the Chattel Mortgage Registry in and chattel mortgage?
order to affect third persons;
6. House which is intended to be demolished; or A: A deed of real estate mortgage is considered registered
7. Growing crops and large cattle (pars. 2 and 3, Sec. 7, once recorded in the entry book. However, chattel
Act No. 1508). mortgage must be registered not only in the entry book but
also in the Chattel Mortgage Register (Associated Insurance
Note: Section 7 of the Chattel Mortgage Law does not demand and Surety Co. v. Lim Ang, (CA) 52 Off. Gaz. 5218).
specific description of every chattel mortgaged in the deed of
mortgage, but only requires that the description of the mortgaged
property be such as to enable the parties to the mortgage or any Q: When should the registration of the chattel mortgage
other person to identify the same after a reasonable investigation be made?
and inquiry (Saldana v. Phil. Guaranty Co., Inc., No. L-13194, Jan.
29, 1960); otherwise, the mortgage is invalid. A: The law is silent on the time or period when registration
should be made. The Court of Appeals has held though that
Q: What is affidavit of good faith? “the law is substantially and sufficiently complied with
where the registration is made by the mortgagee before
A: It is an oath in a contract of chattel mortgage wherein the mortgagor has complied with his principal obligation
the parties “severally swear that the mortgage is made for and no right of innocent third persons is prejudiced
the purpose of securing the obligation specified in the (Ledesma v. Perez, 2 C.A. Rep. 126).
conditions thereof and for no other purposes and that the
same is a just and valid, existing obligation and one not Q: In case of foreclosure sale in chattel mortgage, may the
entered into for the purpose of fraud.” creditor recover deficiency if the redemption price is less
than the debt secured?
Note: The absence of the affidavit vitiates the mortgage only as
against third persons without notice like creditors and subsequent A: GR: CR may recover deficiency.
encumbrances, but its absence is not fatal between the parties.
XPN: When the chattel mortgage is used to secure the
purchase of personal property in installments (Recto
Law).

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CREDIT TRANSACTIONS
Q: What is the effect of an increase in mortgage credit? chattel mortgage but such is binding only between them
and not on third parties. As far as third parties are
A: If the parties to a chattel mortgage take an oath that the concerned, the chattel mortgage does not exist.
debt, honestly due and owing from the mortgagor to the
mortgagee, it is obvious that a valid mortgage cannot be QUASI-CONTRACTS
made to secure a debt to be thereafter contracted (11 C.J.
448). A mortgage that contains a stipulation in regard to Q: What is a Quasi-Contract?
future advances in the credit will take effect only from the
date of the mortgage. The increase in the mortgage credit A: Quasi-contracts are lawful, voluntary, and unilateral acts
becomes a new mortgage (Belgian Catholic Missionaries v. which generally require a person to reimburse or
Magallanes Press, No. 25729, Nov. 24, 1926). compensate another in accordance with the principle that
no one shall be unjustly enriched at the expense of another.
Q: What is the effect of obtaining a personal judgment on (Art. 2142, NCC)
the mortgage lien?
Q: What are the bases for quasi-contracts?
A: the mortgage lien is deemed abandoned.
A:
Q: What are the offenses involving chattel mortgage? 1. No one must unjustly enrich himself at another’s
expense
A: 2. if one benefits, he must reimburse
1. Knowingly removing any personal property mortgaged 3. justice and equity
under the Chattel Mortgage Law to any province or 4. presumed consent of the person obliged to
city other than the one in which it was located at the compensate (p. 347 Pineda)
time of the execution of the mortgage without the
written consent of the mortgagee; or NEGOTIORUM GESTIO
2. Selling or pledging personal property already
mortgaged, or any part thereof, under the terms of the Q: What is Negotiorum Gestio?
Chattel Mortgage Law without the consent of the
mortgagee written on the back of the mortgage and A: This is a kind of quasi-contract where someone called the
duly recorded in the Chattel Mortgage Register (Art. gestor takes the management of the business or property
319, RPC). of another person known as owner without the consent or
authority of the latter.
FORECLOSURE
Q: What are the essential requisites for negostiorum
Q: What is the procedure in foreclosure of a chattel gestio?
mortgage?
A:
A: The mortgagee may, after thirty (30) days from the time 1. Taking charge of another’s business or property
of the default or from the time the condition is violated, 2. The property or business must have been abandoned
cause the mortgaged property to be sold at public auction or neglected
by a public officer (Sec. 14, Act No. 1508) 3. The officious manager (gestor) must not have been
expressly or implicitly authorized
The 30-day period to foreclose a chattel mortgage is the 4. The officious manager (gestor) must have voluntarily
minimum period after violation of the mortgage condition taken charge
for the mortgage 5. The officious manager or gestor must not be acting
erroneously on the belief that he is the owner of the
The creditor has at least ten (10) days notice served to the property or business.
mortgagor
Q: What is the required diligence from a gestor?
The notice of time, place and purpose of such sale, is
posted A: Diligence of a good father of a family (Art. 2145, NCC).
Hence, a gestor is liable for the acts or negligence of his
After the sale of the chattel at public auction, the right of employees (MRR Co. v. Compania Transatlantica, 38 Phil.
redemption is no longer available to the mortgagor (Cabral 875).
v. Evangelista, 28 L-26860, July 30, 1969).
Note: GR: If there are two or more officious managers, their
Q: What are the legal consequences of establishing a liability for their acts is solidary.
chattel mortgage over a building erected not by the owner
XPN: When the management was assumed by the officious
of the land?
managers to save the property or business from imminent danger,
in which case, the liability is only joint.
A: A building is immovable or real property whether it is
erected by the owner of the land, by a usufructuary, or by a
lessee. It may be treated as a movable by the parties to a

CIVIL LAW
Q: What is the effect of ratification of the owner of the Q: Can solutio indebiti be applied because of doubtful or
business? difficult question of law?
A: Ratification produces the effect of an express agency; A: Yes, there can be payment because of “doubtful or
and this is true even if the business is not successful (Art difficult question of law” may lead to solutio indebiti
2149, NCC). because of the mistake committed. (Art. 2155, NCC)
Q: What are the liabilities of the owner even if there is no Q: What is the liability of a person who accepts an undue
ratification? payment in bad faith?
A: A:
1. Liability for the obligation incurred in his interest. 1. He shall pay legal interest if a sum of money is involved,
2. Liability for necessary and useful expenses and for or shall be liable for fruits received or which should have
damages. been received if the thing produces fruits.
3. Damages suffered by the gestor while performing his
duties as such. (Art 2150, NCC) 2. He shall furthermore be answerable for any loss or
impairment of the thing from any cause, and for damages
Q: What is the rule if the owner is a minor? to the person who delivered the thing, until it is recovered
(Art. 2159).
A: Even if the owner is a minor, he is still liable under the
article for he should not be unjustly enriched at another’s Q: What is the effect of acceptance in good faith if there
expense (Rotea v. Delupio, 67 Phil. 330) was mistake in the payment?
Q: What are the causes for extinguishment of A:

management? 1. In case of impairment or loss, liability is only to the
extent of benefit (Art. 2160).
A: 2. In case of alienation, the price is to be reimbursed, or
1. Repudiation or termination of the management by the in case of credit, the same should be assigned (Art.
owner himself; 2160).
2. Withdrawal of gestor from the management; and 3. He shall be exempt from the obligation to restore if he
3. Death, civil interdiction, insanity or insolvency of either destroyed the document, or allowed the action to
party. prescribe, or gave up the pledges, or cancelled the
guaranties for his right (Art. 2162)
SOLUTIO INDEBITI
Note: He who paid unduly may proceed only against the true
Q: What is Solutio Indebiti? debtor or the guarantors with regard to whom the action is
still effective (Art. 2162).
A: Solutio indebiti is the quasi-contract that arises when a
person is obliged to return whatever was received by him Q: What is the rule if the property wrongfully delivered or
through error or mistake or received by him although there money wrongfully paid belongs to a third person?
was no right to demand it.
A: When the property delivered or money paid belongs to a
Note: If the payer was in doubt whether the debt was due, he may third person, the payee shall comply with the provisions of
recover if he proves that it was not due (Art. 2156). The article 1984 (Art. 2158).
responsibility of two or more payees, when there has been
payment of what is not due, is solidary (Art. 2157). Note: Art. 1948 states that the depositary cannot demand that the
depositor prove his ownership of the thing deposited.
Q: What are the requisites for solutio indebiti? Nevertheless, should he discover that the thing has been stolen
and who its true owner is, he must advise the latter of the deposit.
If the owner, in spite of such information, does not claim it within
A:
the period of one month, the depositary shall be relieved of all
1. Receipt of something. responsibility by returning the thing deposited to the depositor. If
2. There was no right to demand it the depositary has reasonable grounds to believe that the thing has
3. Undue delivery was because of mistake. not been lawfully acquired by the depositor, the former may return
the same.
Note: It is presumed that there was a mistake in the payment if
something which had never been due or had already been paid Q: What are the other examples of quasi contracts?
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 A:
cause (Art. 2163, NCC).
1. When, without the knowledge of the person
obliged to give support, it is given by a stranger,
the latter shall have a right to claim the same
from the former, unless it appears that he gave it

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
out of piety and without intention of being
repaid. (Art. 2164) Q: Distinguish between a preference of credit and a lien.
2. When funeral expenses are borne by a third
person, without the knowledge of those relatives A: A preference applies only to claims which do not attach
who were obliged to give support to the to specific properties. A lien creates a charge on a particular
deceased, said relatives shall reimburse the third property.
person, should the latter claim reimbursement.
(Art. 2165) PREFERRED CREDITS ON SPECIFIC MOVABLES
3. When the person obliged to support an orphan,
or an insane or other indigent person unjustly Q: What are the preferred credits with respect to the
refuses to give support to the latter, any third specific movable property under Art. 2241?
person may furnish support to the needy
individual, with right of reimbursement from the A:
person obliged to give support. The provisions of 1. Duties, taxes and fees due thereon to the state or any
this article apply when the father or mother of a subdivision thereof;
child under eighteen years of age unjustly refuses 2. Claims arising from misappropriation, breach of trust,
to support him (Art. 2166). or malfeasance by public officials committed in the
4. When through an accident or other cause a performance of their duties, on the movables, money
person is injured or becomes seriously ill, and he or securities obtained by them;
is treated or helped while he is not in a condition 3. Claims for the unpaid price of movable sold, on said
to give consent to a contract, he shall be liable to movables, so long as they are in the possession of the
pay for the services of the physician or other debtor, up to the value of the same, and if the
person aiding him, unless the service has been movable has been resold by the debtor and the price is
rendered out of pure generosity (Art. 2167). still unpaid, the lien may be enforced on the price; this
5. When during a fire, flood, storm, or other right is not lost by the immobilization of the thing by
calamity, property is saved from destruction by destination, provided it has not lost its form, substance
another person without the knowledge of the and identity; neither is the right lost by the sale of the
owner, the latter is bound to pay the former just thing together with other property for a lump sum,
compensation (Art. 2168). when the price thereof can be determined
6. When the government, upon the failure of any proportionally;
person to comply with health or safety 4. Credits guaranteed with a pledge so long as the things
regulations concerning property, undertakes to pledged are in the hands of the creditor, or those
do the necessary work, even over his objection, guaranteed by a chattel mortgage upon the things
he shall be liable to pay the expenses (Art. 2169). mortgaged, up to the value thereof;
7. When in a small community a majority of the 5. Credits for making repairs or preservation or personal
inhabitants of age decide upon a measure for property on the movable thus made, repaired, kept or
protection against lawlessness, fire, flood, storm possessed;
or other calamity, any one who objects to the 6. Claims for laborers wages, on the goods manufactured
plan and refuses to contribute to the expenses or the work done;
but is benefited by the project as executed shall 7. For expenses of salvage, upon the goods salvaged;
be liable to pay his share of said expenses (Art. 8. Credits between the landlord and the tenant arising
2174). from the contract of tenancy on shares, on the share
8. Any person who is constrained to pay the taxes of each in the fruits or harvest;
of another shall be entitled to reimbursement 9. Credits for transportation, upon the goods carried, for
from the latter (Art. 2175). the price of the contract and incidental expenses, until
their delivery and for thirty days thereafter;
CONCURRENCE AND PREFERENCE OF CREDITS 10. Credits for lodging and supplies usually furnished to
travelers by hotelkeepers, on the movables belonging
Q: What is concurrence of credits? to the guest as long as such movables are in the hotel,
but not for money loaned to the guests;
A: Concurrence of credit implies the possession by two or 11. Credits for seeds and expenses for cultivation and
more creditors of equal rights or privileges over the same harvest advanced to the debtor, upon the fruits
property or all the property of a debtor. harvested;
12. Credits for rent for one year, upon the personal
Q: What is preference of credit? property of the lessee existing on the immovable
leased on the fruits of the same, but not on money or
A: Preference of credit is a right held by a creditor to be instruments of credit;
preferred in the payment of his claim above others out of 13. Claims in favor of the depositor if the depository has
the debtor’s assets. wrongfully sold the thing deposited, upon the price of
the sale.
Note: The rules apply when two or more creditors have separate
and distinct claims against the same debtor who has insufficient Note: In the foregoing cases, if the movables to which the lien or
property. preference attaches have been wrongfully taken, the creditor may

CIVIL LAW
demand them from any possessor within thirty (30) days from the 9. conditional donations
unlawful seizures. 10. premiums for 2 year – insurers
Summary: EXEMPT PROPERTIES

1. taxes
2. malversation by public officials Q: What are the exempt properties from execution and
3. vendor’s lien sale?
4. pledge, chattel mortgage
5. mechanic’s lien A: FST-BCF-PLB-ELM-CL
6. laborer’s wages 1. GR: Family home constituted jointly by husband
7. salvage and wife or by unmarried head of a family (Art.
8. tenancy 152, FC).
9. carrier’s lien
10. hotel’s lien XPNs: For:
11. crop loan a. non-payment of taxes;
12. rentals – one year b. debts incurred prior to the constitution
13. deposit of the family home;
c. debts secured by mortgages on the
PREFERRED CREDITS ON SPECIFIC IMMOVABLES premises before or after such
constitution; and
Q: What are the preferred credits with respect to specific d. debts due to laborers, mechanics,
immovable property under Art. 2242? architects, builders, material men and
others who have rendered service or
A: furnished material for the construction
1. Taxes due upon the land or building; of the building
2. For the unpaid price of real property sold upon the
immovable sold; 2. Right to receive Support as well as any money or
3. Claims of laborers. Masons, mechanics and other property obtained as such support. (Art. 205, FC)
workmen, as well as of architects, engineers and 3. Tools and implements necessarily used by him in
contractors, engaged in the construction, his trade or employment;
reconstruction or repair of buildings, canals or other 4. Two horses, or two cows, or two carabaos or
works, upon said buildings, canals or other works; other Beasts of burden, such as the debtor may
4. Claims of furnishers of materials used in the select, not exceeding one thousand pesos in value
construction, reconstruction, or repair of buildings, and necessarily used by him in his ordinary
canals, and other works, upon said buildings, canals or occupation;
other works; 5. His necessary Clothing and that of all his family.
5. Mortgage credits recorded in the Registry of Property, 6. Household Furniture and utensils necessary for
upon the real estate mortgage; housekeeping and used for that purpose by the
6. Expenses for the preservation or improvement of real debtor, such as the debtor may select, of a value
property when the law authorizes reimbursement, not exceeding one thousand pesos;
upon the immovable preserved or improved; 7. Provisions for individual or family use insufficient
7. Credits annotated in the Registry of Property, by virtue for three months;
of a judicial order, by attachments or executions, upon 8. The professional Libraries of attorney’s, judges,
the property affected, and only as to later credits; physicians, pharmacists, dentist, engineers,
8. Claims of co-heirs for warranty in the partition of an surveyors, clergymen, teachers and other
immovable among them, upon the real property thus professionals, not exceeding three thousand
divided; pesos in value;
9. Claims of donors or real property for pecuniary charges 9. One fishing Boat and net, not exceeding the total
or other conditions imposed upon the donee, upon the value of one thousand pesos, the property of any
immovable donated; fisherman, by the lawful use of which he earns a
10. Credits of insurers, upon the property insured, for the livelihood;
insurance premium for two years. 10. So much of the Earnings of the debtor for his
personal services within the month preceding the
Summary: levy as are necessary for the support of his family;
1. taxes 11. Lettered gravestones;
2. vendor’s lien 12. All Moneys, benefits, privileges or annuities
3. contractor’s lien accruing or in any manner growing out of any life
4. lien of materialmen insurance, if the annual premiums paid do not
5. mortgage exceed five hundred pesos, and if they exceed the
6. expenses of preservation sum, a like exemption shall exist which shall bear
7. recorded attachments the same proportion to the moneys, benefits
8. warranty in partition privileges and annuities so accruing or growing

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
out of such insurance that said five hundred 5. support for one year
pesos bears to the whole premiums paid; 6. support during insolvency
13. Copyrights and other properties especially 7. fines in crimes
exempted by law (Sec. 12, Rule 39) 8. legal expenses – administration
14. Property under Legal custody and of the public 9. taxes
dominion. 10. tort
11. donations
Q: What is the order of preference with respect to other 12. appearing in public instrument or final judgment
properties of the debtor under Art. 2244?
Q: Does the provision of Art. 110 of the Labor Code giving
A: preference to worker’s wages prior to bankruptcy or
1. In the event of bankruptcy or liquidation of an liquidation create a lien in their favor?
employer's business, his workers shall enjoy first
preference as regards wages due them for services A: No. Article 110 of the Labor Code does not purport to
rendered during the period prior to the bankruptcy or create a lien in favor of workers or employees for unpaid
liquidation wages either upon all of the properties or upon any
2. Proper funeral expenses for the debtor, or children particular property owned by their employer. It is but a
under his or her parental authority who have no preference of credit in their favor that do not attach to
property of their own, when approved by the court; specific properties. Claims for unpaid wages do not
3. Expenses during the last illness of the debtor or of his therefore fall at all within the category of specially
or her spouse and children under his or her parental preferred claims established under Articles 2241 and 2242
authority, if they have no property of their own; of the Civil Code, except to the extent that such claims for
4. Compensation due to the laborers of their dependents unpaid wages are already covered by Article 2241, number
under laws providing for indemnity for damages in 6: claims for laborer wages, on the goods manufactured or
cases of labor accident or illness resulting from the the work done, or by Article 2242, number 3: "claims of
nature of the employment; laborers and other workers engaged in construction,
5. Credits and advancements made to the debtor for reconstruction or repair of buildings, canals and other
support of himself or herself, and family, during the works, upon said buildings, canals and other works." To the
last preceding insolvency; extent that claims for unpaid wages fall outside the scope
6. Support during the insolvency proceedings, and for of Article 2241, number 6 and Article 2242, number 3, they
three months thereafter; would come within the ambit of the category of ordinary
7. Fines and civil indemnification arising from a criminal preferred credits under Article 2244 (Republic v. Peralta,
offense; 150 SCRA 37).
8. Legal expenses, and expenses incurred in the
administration of the insolvent’s estate for the Note: Article 110 of the Labor Code has modified Article 2244 of
common interest of the creditors, when properly the Civil Code in two respects: (a) firstly, by removing the one year
authorized and approved by the court; limitation found in Article 2244, number 2; and (b) secondly, by
moving up claims for unpaid wages of laborers or workers of the
9. Taxesand assessments due the national government,
Insolvent from second priority to first priority in the order of
other those mentioned in Articles 2241, No. 1, and preference established I by Article 2244 (Republic v. Peralta, 150
2242, No. 1; SCRA 37).
10. Taxes and assessments due any province, other than
those mentioned in Articles 2241, No. 1 and 2242, No. CLASSIFICATION OF CREDITS
1;
11. Taxes and assessments due any city or municipality Q: What are the general categories of credit?
other than those mentioned in Articles 2241, No.1 and
2242, No. 1; A:
12. Damages for death or personal injuries caused by a 1. Special preferred credits – those listed in Arts. 2241-
quasi-delict; 2242, NCC shall be considered mortgages and pledges
13. Gifts due to public and private institutions of charity or of real and personal property or liens (Art. 2243).
beneficence; Hence, they are not included in the insolvent debtor’s
14. Credits which without special privilege, appear in (a) a assets.
public instrument; or (b) in the final judgment, if they 2. Ordinary preferred credits – those listed in Art 2244,
have been the subject of litigation. These credits shall NCC as amended by Art. 110 of the Labor Code
have preference among themselves in the order of 3. Common credits– those listed under Art. 2245, NCC,
priority of the dates of the instruments and of the which shall be paid pro rata regardless of dates.
judgments, respectively (Art. 2244 in relation to Art.
110 of the Labor Code). Note: Art. 2245 states that credits of any other kind or class, or
by any other right or title not comprised in the four preceding
Summary: articles (Art. 2241-2244), shall enjoy no preference; hence, they
1. wages of employees are called common credits which can be paid only after the
2. funeral expenses preferred credits are satisfied.
3. expenses of last illness
4. workmen’s compensation

CIVIL LAW
Q: What is the extent of liability of a debtor for his Q: Who are the debtors under FRIA law?
obligations?
A: Debtor shall refer to, unless specifically excluded by a
A: The debtor is liable with all his property, present and provision of this Act,
future, for the fulfillment of his obligations, subject to the 1. a sole proprietorship duly registered with the
exemptions provided by law. (Art. 2236) Department of Trade and Industry (DTI)
2. a partnership duly registered with the Securities
ORDER OF PREFERENCE OF CREDIT and Exchange Commission (SEC)
3. a corporation duly organized and existing under
Q: What is the order of preference of credits? Philippine laws, or
4. an individual debtor who has become insolvent as
A: defined herein.
1. Those credits which enjoy preference with respect to
specific movable, excluded all others to the extent of Q: What are the classes of creditors?
the value of the personal property to which the
preference refers (Article 2246). A:
2. If there are two or more credits with respect to the 1. Secured creditors;
same specific movable property, they shall be satisfied 2. Unsecured creditors;
pro-rata, after the payment of duties, taxes, and fees 3. Trade creditors and suppliers; and
due the State or any subdivision thereof (Art. 2247, 4. Employees of the debtor.
NCC).
3. Those credits which enjoy preference in relation to Q: Who are excluded from the above definition?
specific real property or real rights, exclude all others
to the extent of the value of the immovable or real A: The term debtor does not include banks, insurance
right to which the preference refers (Art. 2248). companies, pre-need companies, and national and local
4. If there are two or more credits with respect to the government agencies or units.
same specific real property or real rights, they shall be
satisfied pro rata, after the payment of the taxes and Q: What are the tests to determine insolvency?
assessments upon the immovable property or real
right (Art. 2249, NCC). A:
5. The excess, if any, after the payment of the credits 1. Equity test – A state of inability of a person to pay his
which enjoy preference with respect to specific debts at maturity.
property, real or personal, shall be added to the free 2. Balance sheet test – The assets, if all made
property which the debtor may have, for the payment immediately available, would not be sufficient to
of the other credits (Art. 2250, NCC). discharge the balance.
6. Those credits which do not enjoy any preference with
respect to specific property and those which enjoy Q: What are the remedies of an insolvent debtor?
preference, as to the amount not paid, shall be
satisfied according to the following rules: A:
a. In the order established in Article 2244; 1. Petition the court to suspend payments of his debts; or
b. Common credits referred to in Article 2245 shall 2. To be discharged from his debts and liabilities by
enjoy no preference and shall be paid pro rata voluntary or involuntary insolvency proceedings (Sec.
regardless of dated (Art. 2251, NCC). 1)
Q: What is the rule regarding obligation arising from Q: What is the effect of insolvency proceedings filed by
transactions utilizing ATM networks? individual debtors?
A: Sec. 16 of E-Commerce Act provides for the rule A:

regarding electronic transactions made through networking 1. Suits pending in court –
among banks or linkages with other entities. The obligation a. secured obligations suspended until assignee
arising therefrom is considered absolute and not subjected appointed
to preference of credit (Sec. 16, IRR). b. unsecured obligations terminated except to fix
amount of obligation
INSOLVENCY LAW - FRIA c. foreclosure suits pending continue
2. Suits not yet filed – cannot be filed anymore but claims
Q: What is insolvency? may be presented to assignee.
A: The state of a person whose liabilities are more than his Note: The result is different if the petitioner is a corporation
assets. The term is frequently used in the more restricted because under the Revised Rules on Corporate Recovery, all claims
sense to express inability of a person to pay his debts as whether secured or unsecured are stayed.
they become due in the ordinary course of his business.

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
Q: What are the three modes of rehabilitation under FRIA executory judgment from such appeal shall be referred
law? to the court for appropriate action;
2. subject to the discretion of the court, to cases pending
A: or filed at a specialized court or quasi-judicial agency;
1. Court-supervised rehabilitation 3. enforcement of claims against sureties and other
2. Pre-negotiated rehabilitation persons solidarily liable with the debtor, and third
3. Out of court or informal restructuring agreements or party or accommodation mortgagors as well as issuers
rehabilitation plans of letters of credit, where the property subject of
mortgage is necessary for the rehabilitation. (In other
COURT-SUPERVISED REHABILITATION words, claims may be enforced despite issuance of
suspension order if the property is not necessary for
Q: What are the kinds of proceedings in court-supervised rehabilitation);
rehabilitation? 4. any form of action of customers or clients of a
securities market participant to recover or otherwise
A: claim moneys and securities entrusted to the latter in
1. Voluntary – the debtor, at its initiative, files a petition in the ordinary course of the latter's business;
court, and states, among others, the fact and cause of its 5. the actions of a licensed broker or dealer to sell
insolvency, its schedule of liabilities, and proposed pledged securities of a debtor pursuant to a securities
rehabilitation plan. pledge or margin agreement;
6. the clearing and settlement of financial transactions
2. Involuntary – the petition is filed by any creditor or a
through the facilities of a clearing agency; and
group of creditors with a claim of at least 1 million pesos or
7. any criminal action against individual debtor or owner,
25% of the debtor’s subscribed capital stock or partner’s
partner, director or officer of a debtor shall not be
contribution, whichever is higher.
affected by any proceeding commend under this Act.
Q: How does a court-supervised rehabilitation proceeding
initiated? Q: What is the effect of creditors’ failure to file notice of
claim?
A: By filing a petition for rehabilitation with the court.
A: A creditor whose claim is not listed in the schedule of
If the court finds the petition to be sufficient in form and debts and liabilities and who fails to file a notice of claim
substance, it shall, issue a Commencement Order, which, but subsequently files a belated claim shall not be entitled
among others, shall declare that the debtor is under to participate in the rehabilitation proceedings but shall be
rehabilitation, appoint a rehabilitation receiver, and entitled to receive distributions arising therefrom.
includes Stay or Suspension Order.
Q: What are the qualifications of a rehabilitation receiver?
Note: The effects of the Commencement Order and the Stay or
Suspension Order shall apply to government financial institutions.
A:
1. A citizen of the Philippines or a resident of the
Q: What is the effect of Suspension Order?
Philippines in the six (6) months immediately
preceding his nomination;
A:
2. Of good moral character
1. It suspends all actions or proceedings, in court or
3. Has knowledge of insolvency and other relevant
otherwise, for the enforcement of claims against the
commercial laws, rules and procedures, and the
debtor;
relevant training; and
2. suspends all actions to enforce any judgment,
4. Has no conflict of interest (such conflict of interest
attachment or other provisional remedies against the
may be waived)
debtor;
3. prohibits the debtor from selling, encumbering,
Note: If the rehabilitation receiver is a juridical entity, it must
transferring or disposing in any manner any of its
designate a natural person/s who possess/es all the qualifications
properties except in the ordinary course of business;
above.
and
4. prohibits the debtor from making any payment of its
Q: How does a Rehabilitation Receiver appointed?
liabilities outstanding as of the commencement date
except as may be provided herein.
A: The court shall initially appoint the rehabilitation
receiver, who may or may not be from among the
Q: What are the exceptions to the Stay or Suspension
Order? nominees of the petitioner,
Note: If a qualified natural person or entity is nominated by more

A: It shall not apply to:
than fifty percent (50%) of the secured creditors and the general
1. cases already pending appeal in the Supreme Court as unsecured creditors, the court shall appoint the creditors'
of commencement date Provided, That final and nominee.

CIVIL LAW
Q: What are the powers of the Rehabilitation Receiver? Q: List the procedures after preparation to approval of
Rehabilitation Plan
A: The rehabilitation receiver shall be deemed an officer of
the court with the principal duty of preserving and A:
maximizing the value of the assets of the debtor during the 1. Consultation with Debtor and Creditors.
rehabilitation proceedings, determining the viability of the 2. Creditor Approval of Rehabilitation Plan - The Plan is
rehabilitation of the debtor, preparing and recommending deemed to have been approved by a class of creditors
a Rehabilitation Plan to the court, and implementing the if members of the said class holding more than fifty
approved Rehabilitation Plan and other powers provided in percent (50%) of the total claims of the said class vote
FRIA. in favor of the Plan.
3. Submission of Rehabilitation Plan to the Court.
Note: The rehabilitation receiver shall not take over the 4. Filing of Objections to Rehabilitation Plan by creditor
management and control of the debtor but may recommend the under the following grounds:
appointment of a management committee over the debtor. (a) The creditors' support was induced by fraud;
However, the court may appoint and direct the rehabilitation (b) The documents or data relied upon in the
receiver to assume the powers of management of the debtor, or Rehabilitation Plan are materially false or
appoint a management committee that will undertake the misleading; or
management of the debtor. (c) The Rehabilitation Plan is in fact not supported by
the voting creditors.
Q: What are the grounds for Removal of the Rehabilitation 5. Hearing on the Objections.
Receiver? 6. Confirmation of the Rehabilitation Plan. –The court
may confirm the Rehabilitation Plan notwithstanding
A: unresolved disputes over claims if the Rehabilitation
1. Incompetence, gross negligence, failure to perform or Plan has made adequate provisions for paying such
failure to exercise the proper degree of care; claims.
2. Lack of a particular or specialized competency required 7. Termination of proceedings.
by the specific case;
3. Illegal acts or conduct in the performance of his duties Q: What is the Effect of Confirmation of the Rehabilitation
and powers; Plan?
4. Lack of qualification or presence of any
disqualification; A:
5. Conflict of interest that arises after his appointment; 1. It shall be binding upon the debtor and all persons
and who may be affected by it, including the creditors;
6. Manifest lack of independence. 2. The debtor shall comply with the provisions of the
Rehabilitation Plan and shall take all actions necessary
Note: The rehabilitation receiver may be removed at any time by to carry out the Plan;
the court eithermotu proprio or upon motion by any creditor/s 3. Payments shall be made to the creditors in accordance
holding more than fifty percent (50%) of the total obligations of the with the provisions of the Rehabilitation Plan;
debtor. 4. Contracts and other arrangements between the
debtor and its creditors shall be interpreted as
Q: What is the effect of Sale or Disposal of Encumbered continuing to apply to the extent that they do not
Property of the Debtor and Assets of Third Parties Held by conflict with the provisions of the Rehabilitation Plan;
Debtor? 5. Any compromises on amounts or rescheduling of
timing of payments by the debtor shall be binding on
A: The court may authorize the sale, transfer, conveyance creditors regardless of whether or not the Plan is
or disposal of encumbered property of the debtor, or successfully implement; and
property of others held by the debtor pertaining to third 6. Claims arising after approval of the Plan that are
parties under a financial, credit or other similar transactions otherwise not treated by the Plan are not subject to
if (a) such sale or disposal is necessary for the continued any Suspension Order.
operation of the debtor's business; and (b) the debtor has
made arrangements to provide a substitute lien or Q: What is the Period for Confirmation of the
ownership right that provides an equal level of security for Rehabilitation Plan.
the counter-party's claim or right.
A: The court shall have a maximum period of one (1) year
Note: Third parties who have in their possession or control from the date of the filing of the petition to confirm a Plan,
property of the debtor shall not transfer, conveyor otherwise Otherwise, it may upon motion or motu propio, be
dispose of the same to persons other than the debtor, unless upon converted into one for the liquidation of the debtor.
prior approval of the rehabilitation receiver.

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
PRE-NEGOTIATED REHABILITATION Q: When is the remedy of suspension of payments
available?
Q: How does a court-supervised rehabilitation proceeding
initiated? A: The debtor who, possessing sufficient property to cover
all his debts, foresees the impossibility of meeting them
A: By filing a verified petition by the insolvent debtor when they respectively fall due, may petition that he be
himself, or jointly with any of the creditors for the approval declared in the state of suspension of payments by the
of a pre-negotiated Rehabilitation Plan, which has been court of the province or city in which he has resided for six
endorsed or approved by creditors holding at least two- months next preceding the filing of his petition (Sec. 2 [1]).
thirds (2/3) of the total liabilities of the debtor, including
secured creditors holding more than fifty percent (50%) of Q: When does suspension take effect?
the total secured claims of the debtor and unsecured
creditors holding more than fifty percent (50%) of the total A: Upon the filing of the petition. The suspension order
unsecured claims of the debtor. shall lapse when three (3) months shall have passed
without the proposed agreement being accepted by the
Q: What period of approval of Rehabilitation Plan? creditors or as soon as such agreement is denied. (Sec. 96,
FRIA)
A: The court shall have a maximum period of one hundred
twenty (120) days from the date of the filing of the petition Q: What are the steps in suspension of payments?
to approve the Rehabilitation Plan. If the court fails to act
within the said period, the Rehabilitation Plan shall be A:
deemed approved. 1. Filing of the petition by the debtor (Sec. 94);
2. Issuance by the court of an order calling a meeting of
Q: What is the effect of approval of a Plan? creditors (Sec.95);
3. Publication of the order and service of summons;
A: Approval shall have the same legal effect as confirmation 4. Meetings of creditors for the consideration of the
of a Plan debtor’s proposition (Sec. 97);
5. Approval by the creditors of the debtor’s proposition
OUT OF COURT OR INFORMAL RESTRUCTURING (Sec. 8, [20]);
AGREEMENTS OR REHABILITATION PLANS 6. The Double Majority Rule applies. To obtain a majority
vote, it is necessary that:
Q: What are the Minimum Requirements of Out-of-Court a. At least 2/3 of the creditorsmust vote on the
or Informal Restructuring Agreements and Rehabilitation same proposition, and
Plans? b. Said 2/3 represent at least 3/5 of the total
liabilities of the debtor.
A: 7. Objections, if any, to the decision must be made within
1. The debtor must agree to the out-of-court or informal 10 days following the meeting. (Sec. 100);
restructuring/workout agreement or Rehabilitation 8. Issuance of order by the court directing that the
Plan; agreement be carried out in case the decision is
2. It must be approved by creditors representing at least declared valid, or when no objection to said decision
sixty-seven (67%) of the secured obligations of the has been presented. (Sec. 101)
debtor;
3. It must be approved by creditors representing at least Q: What are the documents that should accompany the
seventy-five percent (75%) of the unsecured petition?
obligations of the debtor; and
4. It must be approved by creditors holding at least A:
eighty-five percent (85%) of the total liabilities, 1. A verified schedule containing a full and true
secured and unsecured, of the debtor. statement of the debts and liabilities of the petitioner
together with a list of creditors; (Secs. 15, 2)
SUSPENSION OF PAYMENTS 2. A verified inventory containing a list of creditors, an
accurate description of all the property of the
petitioner including property exempt from execution
Q: What is suspension of payments?
and a statement as to the value of each item of
property, its location, and encumbrances thereon, if
A: It is the postponement, by court order, of the payment
of debts of one who, while possessing sufficient property to any; (Secs. 16, 2)
3. A statement of his assets and liabilities; (Sec. 2) and
cover his debts, foresees the impossibility of meeting them
when they respectively fall due. (not in FRIA)
4. The proposed agreements he requests of his creditors.
(Ibid.)

CIVIL LAW
Q: What are the effects of filing of the petition? Q: Who may refrain from voting during the creditor’s
meeting?
A:
1. No disposition in any manner of his property may be A: Creditors who are unaffected by the Suspension Order
made by the petitioner except insofar as concerns the may refrain from attending the meeting and from voting
ordinary operations of commerce or of industry in therein. Such persons shall not be bound by any agreement
which he is engaged; [(Sec. 95 (e)] determined upon at such meeting, but if they should join in
the voting they shall be bound in the same manner as are
2. No payments may be made by the petitioner except in the other creditors. (Sec. 98)
the ordinary course of his business or industry [(Sec.
95 (f)]; and; Q: What is the effect of disapproval of petition?
3. Upon motion, the court may issue an order suspending A: If the decision of the meeting be negative as regards the
any pending execution against the individual debtor. proposed agreement or if no decision is had in default of
Provide, That properties held as security by secured such number or of such majorities, the proceeding shall be
creditors shall not be the subject of such suspension terminated without recourse. In such case, the parties
order. (Sec. 96) concerned shall be at liberty to enforce the rights which
correspond to them. (Sec. 99)
Note: No creditor shall sue or institute proceedings to collect his
claim from the debtor from the time of the filing of the petition for LIQUIDATION
suspension of payments and for as long as proceedings remain
pending except:
(a) those creditors having claims for personal labor,
Q: Discuss the steps in Liquidation of INSOLVENT
maintenance, expense of last illness and funeral of the JURIDICAL DEBTORS.
wife or children of the debtor incurred in the sixty (60)
days immediately prior to the filing of the petition; and A:
(b) secured creditors. A. Voluntary Liquidation –
1. Filing of verified petition for liquidation with the court
Q: Who are the creditors affected by the filing of the containing the following:
petition? a. a schedule of the debtor's debts and liabilities
including a list of creditors with their addresses,
A: Only creditors included in the schedules filed by the amounts of claims and collaterals, or securities, if
debtor shall be cited to appear and to take part in the any;
meeting. (Sec. 5) Hence, those who did not appear because b. an inventory of all its assets including receivables
they were not informed of the proceedings are unaffected and claims against third parties; and
by the same. c. the names of at least three (3) nominees to the
position of liquidator.
Q: Who are the creditors not affected by order of
2. If the court finds the petition sufficient in form and
suspension of payments?
substance it shall, within five (5) working days issue
the Liquidation Order.
A:
3. Publication of the petition or motion in a newspaper of
1. Those having claims for personal labor, maintenance,
general circulation once a week for two (2)
expenses of the last illness and funeral of wife or child
consecutive weeks.
of debtor, incurred during the 60 days immediately
4. Election/Appointment of Liquidator
preceding the filing of the petition; and
5. Determination of claims.
2. Those having legal or contractual mortgages. (Sec. 9) 6. Submit Liquidation Plan.
change to: secured creditors who failed to attend the 7. Implementation of the Plan (e.g. Selling of assets at
meeting or refrained from voting therein. public auction, payment of claims)
8. Discharge of Liquidator.
Q: When is a petition for suspension of payments deemed
rejected? B. Involuntary Liquidation
1. Three (3) or more creditors the aggregate of whose
A: claims is at least either One million pesos
1. When the number of creditors representing at least (Php1,000,000,00) or at least twenty-five percent
3/5 of the liabilities not attend; (Secs. 8, 10) or (25%0 of the subscribed capital stock or partner's
2. When the two majorities required are not in favor of contributions of the debtor, whichever is higher, may
the proposed agreement (Sec. 10). apply for and seek the liquidation of an insolvent
debtor by filing a petition for liquidation of the debtor
with the court. The petition shall show that:
(a) there is no genuine issue of fact or law on the
claims/s of the petitioner/s, and that the due and
demandable payments thereon have not been

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
made for at least one hundred eighty (180) days 5. Liquidation of the debtor’s assets and payment of his
or that the debtor has failed generally to meet its debts (Sec. 119);
liabilities as they fall due; and 6. Composition, if agreed upon (Sec. 63);
(b) there is no substantial likelihood that the debtor 7. Discharge of Liquidator (Sec 122)
may be rehabilitated. 8. Appeal
2. If the petition or motion is sufficient in form and
substance, the court shall issue an Order: Q: What are the documents to accompany the petition?
(1) directing the publication of the petition or motion
in a newspaper of general circulation once a week A: 1. A verified schedule must contain:
for two (2) consecutive weeks; and a. A full and true statement of all debts and
(2) directing the debtor and all creditors who are not liabilities of the insolvent debtor; and
the petitioners to file their comment on the b. An outline of the facts giving rise or which might
petition or motion within fifteen (15) days from give rise to a cause of action against such
the date of last publication. insolvent debtor; (Sec. 15)
3. If, after considering the comments filed, the court
determines that the petition or motion is meritorious, 2. A verified inventory, which must contain:
it shall issue the Liquidation Order a. An accurate description of all the personal and
real property of the insolvent exempt or not from
4. Publication of the petition or motion in a newspaper of
execution including a statement as to its value,
general circulation once a week for two (2)
location and encumbrances thereon; and
consecutive weeks.
b. An outline of the facts giving rise or which might
5. Election/Appointment of Liquidator
give rise to a right of action in favor of the
6. Determination of claims.
insolvent debtor. (Sec. 16)
7. Submit Liquidation Plan.
8. Implementation of the Plan (e.g. Selling of assets at
Q: What is the effect of filing petition?
public auction, payment of claims)
9. Discharge of Liquidator. A: Once the petition is filed, it ipso facto takes away and
deprives the debtor petitioner of the right to do or commit
Note: During the pendency of or after a rehabilitation court- any act of preference as to creditors, pending the final
supervised or pre-negotiated rehabilitation proceedings, three (3) adjudication. (Philippine Trust Co. v. National Bank, 42 Phil
or more creditors whose claims is at least either One million pesos 413)
(Php1,000,000.00) or at least twenty-five percent (25%) of the
subscribed capital or partner's contributions of the debtor, INVOLUNTARY INSOLVENCY
whichever is higher, may also initiate liquidation proceedings.
Q: Who may file for involuntary liquidation?
INSOLVENCY OF INDIVIDUAL DEBTORS
A: Any creditor or group of creditors with a claim of, or with
VOLUNTARY INSOLVENCY claims aggregating at least Php500, 000.00 may file a
verified petition for liquidation with the court of the
Q: Who may apply for voluntary liquidation? How is this province or city in which the individual debtor resides.
done?
Q: What are the acts of insolvency?
A: An individual debtor whose properties are not sufficient
to cover his liabilities, and owing debts exceeding A:
Php500,000.00, may apply to be discharged from his debts 1. Such person is about to depart or has departed from
and liabilities by filing a verified petition with the court of the Philippines, with intent to defraud his creditors;
the province or city in which he has resided for six (6) 2. Being absent from the Philippines, with intent to
months prior to the filing of such petition with the following defraud his creditors, he remains absent;
attachments: 3. He conceals himself to avoid the service of legal
1. A schedule of debts and liabilities and process for purpose of hindering or delaying or
2. Inventory of assets. defrauding his creditors;
4. He conceals, or is removing, any of his property to
Q: What is the procedure for voluntary insolvency? avoid its being attached or taken on legal process;
5. He has suffered his property to remain under
A: attachment or legal process for 3 days for the purpose
1. Filing of the petition by the debtor praying for the of hindering or delaying or defrauding his creditors;
declaration of insolvency (Sec.103); 6. He has confessed or offered to allow judgment in favor
2. Issuance Liquidation order (Sec.104); of any creditor or claimant for the purpose of
3. Publication of petition or motion in a newspaper of hindering or delaying or defrauding any creditor or
general circulation once a week for two consecutive claimant;
weeks [Sec. 112 (d)]; 7. He has willfully suffered judgment to be taken against
4. Election and appointment of Liquidator [Sec. 112 (j)]; him by default for the purpose of hindering or delaying
or defrauding his creditors;

CIVIL LAW
8. He has suffered or procured his property to be taken creditors.

on legal process with intent to give a preference to 1. Residents of the
one or more of his creditors and thereby hinder, delay, Philippines;
or defraud any one of his creditors; 2. Their credits or demands must
9. He has made any assignment, gift, sale, conveyance, or have accrued in the Philippines;
transfer of his estate, property, rights, or credits with and
intent to delay, defraud, or hinder his creditors; 3. Must not have been a creditor
10. He has, in contemplation of insolvency, made any by assignment within 30 days
payment, gift, grant, sale, conveyance, or transfer of prior to the filing of the petition.
his estate, property, rights, or credits; Venue: where he has Where the debtor has residence
11. Being a merchant or tradesman he has generally resided 6 months prior or has his principal place of
defaulted in the payment of his current obligations for to the filing of petition. business.
a period of 30 days; No need for the
12. For a period of 30 days he has failed after demand, to Debtor must have committed
commission of any of
pay any moneys deposited with him or received by any of the acts of insolvency.
the acts of insolvency.
him in a fiduciary capacity; and Amount of debts must Amount of debts must not be
13. An execution having been issued against him on final exceed P500,000.00. less than P500,000.00.
judgment for money, he shall have been found to be Debtor deemed
without sufficient property subject to execution to insolvent through an Debtor is considered insolvent
satisfy the judgment. (Sec. 105) order of adjudication upon the issuance by the court of
after filing of the an order after due hearing
Q: What is the procedure in involuntary insolvency? petition; adjudication declaring him insolvent;
may be granted ex adjudication granted only after
A: parte. hearing.
1. Filing of petition by creditor or group of creditors and
posting of bond (Sec. 105); Bond is not required. Bond is required.
2. Issuance of order requiring the debtor to show cause
why he should not be adjudged insolvent (Sec. 106); Q: Who is an assignee in insolvency?
3. Service of order to show cause;
4. Filing of answer or motion to dismiss; A: A person elected by the creditors or appointed by the
5. Hearing of the case (Sec. 107); court to whom an insolvent debtor makes an assignment of
6. Issuance of Liquidation order all his property for the benefit of his creditors.
7. Publication of petition or motion in a newspaper of
general circulation once a week for two consecutive Note: The assignee must be a person elected by the majority of the
weeks [Sec. 112 (d)]; creditors who have proven their claims, such majority being in
8. Election and appointment of Liquidator [Sec. 112 (j)]; number and amount.
9. Liquidation of the debtor’s assets and payment of his
debts (Sec. 119); Q: Who are the creditors not entitled to votein the
10. Discharge of Liquidator (Sec 122) election of assignee?
11. Appeal
A:
Note: Assets of the insolvent which are not exempt from execution 1. Those who did not file their claims at least 2 days prior
will then be distributed among his creditors in accordance with the to the time appointed for such election;
rules of concurrence and preference of credits in the Civil Code. 2. Those whose claims are barred by the statute of
limitations;
Q: Can a surety institute involuntary proceedings? 3. Secured creditors unless they surrender their security
or lien to the sheriff or receiver or unless they shall
A: No, a surety for the debtor is not a creditor. Hence, he first have the value of such security; and
cannot institute involuntary proceedings. All he can do is to 4. Holders of claims for unliquidated damages arising out
prove his claim. of pure tort.
Q: Distinguish voluntary insolvency from involuntary Q: Is the assignee required to give a bond?
insolvency.
A: After his election, the assignee is required to give a bond
A: for the faithful performance of his duties.
VOLUNTARY
INVOLUNTARY INSOLVENCY
INSOLVENCY Note: Courts have the power to appoint receivers to hold the
Filed by any creditor or group of property of individuals or corporations although no insolvency
Filed by the debtor.
creditors. proceedings are involved. A receiver appointed by a court before
Only 1 creditor is the institution of the insolvency proceedings may be appointed the
3 or more creditors are required. permanent assignee in such proceedings.
required.
No requirement for Requirements for creditors:

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
Q: What are the effects of Liquidation Order? Q: When may a partnership be declared insolvent?
A: Upon the issuance of the Liquidation Order: A: A partnership may be declared insolvent by a petition of
(a) the juridical debtor shall be deemed dissolved the partners and may be done during the continuation of
and its corporate or juridical existence the partnership business or after its dissolution and before
terminated; the final settlement thereof.
(b) legal title to and control of all the assets of the
debtor, except those that may be exempt from A partnership may be declared insolvent notwithstanding
execution, shall be deemed vested in the the solvency of the partners constituting the same.
liquidator or, pending his election or (Campos Rueda & Co. v. Pacific Commercial Co., G.R. No. L-
appointment, with the court; 18703 Aug. 28, 1922)
(c) all contracts of the debtor shall be deemed
terminated and/or breached, unless the Q: Who may petition for declaration of insolvency of a
liquidator, within ninety (90) days from the date partnership?
of his assumption of office, declares otherwise
and the contracting party agrees; A:
(d) no separate action for the collection of an 1. Voluntary insolvency – By all the partners or any of
them;
unsecured claim shall be allowed. Such actions
2. Involuntary insolvency – By one or more of the
already pending will be transferred to the
partners or three or more creditors of the partnership.
Liquidator for him to accept and settle or contest.
If the liquidator contests or disputes the claim,
Q: What are the properties included in the insolvency
the court shall allow, hear and resolve such
proceedings?
contest except when the case is already on
appeal. In such a case, the suit may proceed to
A:
judgment, and any final and executor judgment 1. All the property of the partnership; and
therein for a claim against the debtor shall be 2. All the separate of each of the partners except:
filed and allowed in court; and a. Separate properties of limited partners (Art. 1843,
(e) no foreclosure proceeding shall be allowed for a NCC)
period of one hundred eighty (180) days. b. Properties which are exempt by law
Q: What are the rights of secured creditors? Q: What is the effect of insolvency of partnership or any
partner?
A: The Liquidation Order shall not affect the right of a
secured creditor to enforce his lien in accordance with the A:
applicable contract or law. A secured creditor may: 1. A partnership may be declared insolvent
(a) waive his right under the security or lien, prove notwithstanding the solvency of the partners
his claim in the liquidation proceedings and share constituting the same.
in the distribution of the assets of the debtor; or 2. A partnership is not necessarily insolvent because one
(b) maintain his rights under the security or lien: of its members is insolvent. The solvent members are
bound to wind up the partnership affairs.
If the secured creditor maintains his rights under the 3. Under the law, a partnership is automatically dissolved
security or lien: by the insolvency of any partner or of the partnership
(1) the value of the property may be fixed in a
manner agreed upon by the creditor and the
liquidator. When the value of the property is less
than the claim it secures, the liquidator may
convey the property to the secured creditor and
the latter will be admitted in the liquidation
proceedings as a creditor for the balance. If its
value exceeds the claim secured, the liquidator
may convey the property to the creditor and
waive the debtor's right of redemption upon
receiving the excess from the creditor;
(2) the liquidator may sell the property and satisfy
the secured creditor's entire claim from the
proceeds of the sale; or
(3) the secure creditor may enforce the lien or
foreclose on the property pursuant to applicable
laws.

CIVIL LAW
Q: In the filing of claims in an insolvency proceeding, what debts may and may not be proved?
A:
DEBTS THAT MAY BE PROVED DEBTS THAT MAY NOT BE PROVED
The debts which may be proved against the estate of the debtor
in insolvency proceedings are the following: The following debts are not provable or allowed in insolvency
proceedings:
1. All debts due and payable from the debtor at the time of
adjudication of insolvency; (Sec. 53, Insolvency Law) 1. Claims barred by the statute of limitations; (Sec. 29, 73)
2. All debts existing at the time of the adjudication of 2. Claims of secured creditors with a mortgage or pledge in
insolvency but not payable until a future time, a discount their favor unless they surrender the security; (Sec. 59)
being made if no interest is payable by the terms of the 3. Claims of creditors who hold an attachment or execution
contract; on the property of the debtor duly recorded and not
3. Any debt of the insolvent arising from his liability as dissolved; (Sec. 32)
indorser, surety, bail or guarantor, where such liability 4. Claims on account of which a fraudulent preference was
became absolute after the adjudication of insolvency but made or given; (Sec. 61)
before the final dividend shall have been declare; (Sec. 54) 5. Support, as it does not arise from any business
4. Other contingent debts and contingent liabilities contracted transaction but from the relation of marriage; and
by the insolvent if the contingency shall happen before the 6. A claim for unliquidated damages arising out of a pure
order of final dividend; (Sec. 55); and tort, which neither constitutes a breach of an express
5. Any debt of the insolvent arising from his liability to any contract nor results in any unjust enrichment of the
person liable as bail, surety, or guarantor or otherwise, for tortfeasor that may form the basis of an implied
the insolvent, ho shall have paid the debt in full, or in part. contract.
(Sec. 56)
Q: What is a contingent claim?

3. To have the value of the encumbered property
A: A claim in which liability depends on some future event appraised and then share in the distribution of the
that may or may not happen and which makes it uncertain assets of the debtor with respect to the balance of his
whether there will be any liability. credit.
Note: After the close of the insolvency proceedings and the Q: What is discharge?
happening of the contingency, the creditor may pursue any
available remedy for the collection of his claim. A: Discharge, under the Insolvency Law, is the formal and
judicial release of an insolvent debtor from his debts with
Q: How are claims arising or acquired after insolvency the exception of those expressly reserved by law.
treated?
Note: Only natural persons may ask for discharge; corporations
A: cannot ask for discharge. (Sec. 52) When granted, takes effect not
1. Claim arose after commencement of proceedings – An from its date, but from the commencement of the proceedings in
obligation coming in force after the initiation of the insolvency.
proceedings is not generally a proper claim to be
proved. Q: When insolvent debtor may apply for discharge?
2. Claim owned by insolvent purchased after insolvency – A: A debtor may apply to the RTC for a discharge at anytime
One indebted to an insolvent will not be permitted to after the expiration of 3 months from the adjudication of
interpose as an offset, a claim owned by the insolvent insolvency, but not later than 1 year from such adjudication
which he has purchased after the insolvency. of insolvency, unless the property of the insolvent has not
been converted into money (Sec. 64) without his fault,
Q: What are the alternative rights of a secured creditor? thereby delaying the distribution of dividends among the
creditors in which case the court may extend the period
A:
1. To maintain his rights under his security or lien and Any creditor may oppose the discharge by filing his
ignore the insolvency proceedings, in which case, it is objections thereto, specifying the grounds of his
the duty of the assignee to surrender to him the opposition. After the debtor has filed and served his
property encumbered; verified answer, the court shall try the issue or issues raised
(Sec. 66).
2. To waive his right under the security or lien and
thereby share in the distribution of the assets of the
debtor; or

2013 GOLDEN NOTES
CREDIT TRANSACTIONS
Q: What are the requisites for discharge? creditors to have their satisfaction out of the mortgage
or subject of the lien;
A: 3. It is a special defense which may be pledged and be a
1. Compliance with statutory requirements regarding complete bar to all suits brought on any such debts,
surrender of his assets for the benefit of the creditors claims, liabilities or demands. (Ibid.)
and regarding the rendition of an account of his assets 4. It does not operate to release any person liable for the
and liabilities; same debt, for or with the debtor, either as partner,
joint contractor, indorser, surety or otherwise; (Sec.
Note: A discharge in insolvency is a matter of legislative grace 68)
or favour to the debtor, to be obtained only by a strict 5. The certificate of discharge is prima facie evidence of
compliance with the conditions prescribed by the statute. the fact of release, and the regularity of such
discharge.
2. Application for discharge should be filed after the
expiration of 3 months from the adjudication of Note: Where a debtor is judicially declared insolvent, the
insolvency, but not later than 1 year; (Sec. 64); and remedy of the guarantor or surety would be to file a
contingent claim in the insolvency proceeding, if his rights as
3. Insolvent debtor must not have committed any of the such guarantor or sureties are not to be barred by the
acts of insolvency preventing discharge. subsequent discharge of the insolvent debtor from all his
liabilities.
Q: What are the acts of debtor or grounds which will
prevent discharge? Q: What are the debts and obligations not affected by
discharge of insolvent?
A: No discharge shall be granted, or if granted, shall be
valid, to the following cases: A:
1. False swearing; 1. Taxes or assessments due the Government, whether
2. Concealment of any part of his estate or effects; national or local;
3. Fraud or willful neglect in the care of his property 2. Any debt created by the fraud or embezzlement of the
or in the delivery thereof to the assignee; debtor;
4. Procuring his properties to be attached or seized 3. Any debt created by the defalcation of the debtor as a
on execution within 1 month before the public officer or while acting in a fiduciary capacity;
commencement of insolvency proceedings; 4. Debt of any person liable for the same debt, for or
5. Destruction, mutilation, alteration or falsification with the insolvent debtor, either as partner, joint
of his books, documents, and papers; contractor, inorser, surety or otherwise; (Sec. 68)
6. Giving fraudulent preference to a creditor; 5. Debts of a corporation (Sec. 52);
7. Non-disclosure of the assignee of a proven false 6. Claim for support;
or fictitious debt within 1 month after acquiring 7. Discharged debt but revived by a subsequent new
knowledge; promise to pay;
8. Being a merchant, failure to keep proper books or 8. Debts which have not been duly scheduled in time for
accounts; proof and allowance, unless the creditors had notice
9. Influencing the action of any creditor, at any state or actual knowledge of the insolvency proceedings, are
of the proceedings, by pecuniary consideration; not discharged as to such creditors;
10. Effecting any transfer, conveyance or mortgage in 9. Claims for unliquidated damages arising out of a pure
contemplation of insolvency; tort;
11. Conviction of any misdemeanor under the 10. Claims of secured creditors; (Sec. 59)
Insolvency Law: 11. Claims not in existence or not mature at the time of
12. In case of voluntary insolvency, he has received the discharge;
the benefit of insolvency within 6 years next 12. Claims that are contingent at the time of discharge.
preceding his application for discharge; and
13. If insolvency proceeding in which he could have Q: When discharge may be revoked?
applied are pending by or against him in the RTC
of any other province or city. (Sec. 65) A: A discharge may be revoked by the court which granted
it on petition of any creditor:
Q: What are the effects of discharge? 1. Whose debt was proved or provable against the
estate in insolvency on the ground that the
A: discharge was fraudulently obtained;
1. It releases the debtor from all claims, debts, liabilities 2. Who has discovered facts constituting the fraud
and demand set forth in the schedule or which were or subsequent to the discharge and fraudulent
might have been proved against his estate in transfer; and provided,
insolvency. (Sec. 69). Hence, non-provable debts are 3. The petition is filed within 1 year after the date of
not affected whether or not they were properly the discharge. (Sec. 69)
scheduled;
2. It operates as a discharge of the insolvent and future
acquisitions, but pemits mortgagees and other lien

CIVIL LAW
LEASE Q: When is lease considered a contract of sale?
Q: What is a contract of lease? A: A lease of personal property with option to buy, where
title is transferred at the end of the contract provided rents
A: A contract by which one of the parties agrees to give the have been fully paid.
other for a fixed time and price the use or profit of a thing
or of his service to another who undertakes to pay some Q: Distinguish lease from sale
rent, compensation or price.
A:
A contract of lease is a consensual, bilateral, onerous and LEASE SALE
commutative contract by which one person binds himself Only the use or
to grant temporarily, the use of a thing or the rendering of Ownership is
enjoyment is
some service to another who undertakes to pay some rent, transferred
transferred
compensation, or price (4 Sanchez Roman 736). Transfer is temporary Transfer is permanent
Seller must be the
Q: What are the characteristics of a contract of lease? Lessor need not to be
owner at the time of
the owner
delivery
A: The price of the object
1. Consensual; (distinguished from the Usually, the selling price
2. Bilateral; rent) is usually not is mentioned
3. Commutative; mentioned
4. Principal contract;
5. Nominate; Q: Distinguish lease from usufruct
6. Subject matter must be within the commerce of man;
7. Purpose is to allow enjoyment or use of a thing; A:
8. Purpose to which the thing will be devoted should not LEASE USUFRUCT
be immoral; Ownership on the part Ownership of the thing
9. Onerous; of the lessor is not on the part of the
10. Period is temporary; necessary grantor is necessary
11. Period may be definite or indefinite; and
GR: Personal right
12. Lessor need not be the owner. Real right
XPN: Real right
Q: What are the kinds of lease?
Includes all possible
Limited to the use
uses and enjoyment of
A: specified in the contract
the thing
1. Lease of things (immovable/ movable) – One of the
Lessor places and
parties binds himself to give to another the enjoyment Owner allows the
maintains the lessee in
or use of a thing for a price certain. usufructuary to use and
the peaceful enjoyment
enjoy the property
of the thing
Period: definite or indefinite but not more than 99
May be for an indefinite
years. (Art. 1634) Definite period
period
Note: It may be made orally but if the lease of real property is Created by law,
Created by contract as a
for more than one year, it must be in writing (Statute of contract, last will or
general rule
Frauds). prescription
Lessee has no duty to Usufructuary has duty
2. Lease of work (contract for a piece of work) – One of make repairs to make repairs
the parties binds himself to produce a result out of his Lessee has no duty to Usufructuary has a duty
work or labor for a certain price. pay taxes to pay taxes
Lessee cannot
Note: Duties of a contractor who furnishes work and Usufructuary may
constitute a usufruct of
materials: constitute a sublease
the property leased
1. to deliver;
2. to transfer ownership; and Q: Who are persons disqualified to become lessees?
3. to warrant eviction and hidden defects.
A: Persons disqualified to buy referred to in article 1490
3. Lease of service – One party binds himself to render to and 1491, are also disqualified to become lessees of the
the other some service for a price certain. things mentioned therein. (Article 1646)

2013 GOLDEN NOTES
LEASE
Note: Article 1490. The husband and the wife cannot sell property useful only for the purpose of notifying strangers to the
to each other, except: transaction. (Art 1648, NCC)
(1) When a separation of property was agreed upon in the
marriage settlements; or
Q: What is the effect of recording of contract of lease?
(2) When there has been a judicial separation of property
Article 1491. The following persons cannot acquire by purchase, A: Even if not recorded with the Registry of Property, the
even at a public or judicial auction, either in person or through the lease is binding between the parties. However, if third
mediation of another: persons have to be bound, the contract must be recorded.
(1) The guardian, the property of the person or persons who Note: However, if a purchaser has actual knowledge of the
may be under his guardianship; existence of the lease, which knowledge is equivalent to
registration, he is bound by the lease. (Quimson vs. Suarez, 45 Phil.
(2) Agents, the property whose administration or sale may 901)
have been intrusted to them, unless the consent of the
principal has been given; Q: What are the effects if lease of real property is NOT
registered?
(3) Executors and administrators, the property of the estate
under administration;
A:
(4) Public officers and employees, the property of the State or 1. The lease is not binding on third persons
of any subdivision thereof, or of any government-owned or 2. Such third person is allowed to terminate the
controlled corporation, or institution, the administration of lease in case he buys the property from the
which has been intrusted to them; this provision shall apply owner-lessor
to judges and government experts who, in any manner 3. Actual knowledge of existence and duration of
whatsoever, take part in the sale; lease, is equivalent to registration
(5) Justices, judges, prosecuting attorneys, clerks of superior
and inferior courts, and other officers and employees Q: What is meant by proper authority?
connected with the administration of justice, the property
and rights in litigation or levied upon an execution before the A: Proper authority means a power of attorney to
court within whose jurisdiction or territory they exercise their constitute the lease.
respective functions; this prohibition includes the act of
acquiring by assignment and shall apply to lawyers, with Q: When is a proper authority required?
respect to the property and rights which may be the object of
any litigation in which they may take part by virtue of their
A:
profession;
1. Husband – with respect to the paraphernal real estate
(6) Any others specially disqualified by law. of the wife;
2. Father or Guardian – with respect to the property of
Q: Are foreigners disqualified to lease lands in the the minor or the ward;
Philippines? 3. Manager – with respect to the property under
administration.
A: GR: Yes
Q: Who is a manager?
XPN: lease of lands for residential purposes (Smith,
Bell and Co. vs. Register of Deeds, 96 Phil 53) A:
1. administrator of a conjugal property
Q: What is the form required of a contract of lease of 2. administrator of a co-ownership
things? 3. administrator of state patrimonial property
A: Lease may be made orally, but if the lease of real Q: Is the husband the administrator of the paraphernal
property is for more than a year, it must be in writings real property?
under the statute of frauds.
A: No, unless such administrator has been transferred to
Note: Where the written contract of lease called for the erection him by virtue of a public document. (Art. 110, FC)
by the tenant, of a building of strong wooden materials, but what
he actually did construct on the leased premises was semi-concrete Q: A husband was properly given his wife authority to
edifice at a much higher cost, in accordance with a subsequent oral administer the paraphernal real property. Does this
agreement with the lessor, oral evidence is admissible to prove the necessarily mean that just because the husband is now
verbal modification of the original terms of the lease. (Paterno v.
the administrator, he can lease said property without any
Jao Yan, GR. No. L-12218, February 28, 1961)
further authority?
Q: What is the purpose in recording a lease?
A: It depends.
1. If the lease will be for one year or less, no other
A: A lease does not have to be recorded in the Registry of
authority is required.
Property to be binding between the parties; registration is

CIVIL LAW
2. If the lease on the real property will be for more favor of the lessee. Hence, oridinarily the lessee, at the
than a year, then a special power of attorney end of the original period, may either:
(aside from the public instrument transferring a. leave the premises; or
administration) is required. (Art.1878, NCC) b. remain in possession
3. Furthermore, whether it be a) or b), if the lease is 4. In co-ownership, assent of co-owner is needed,
to be recorded, there must be a special power of otherwise, it is void or ineffective as against non-
attorney. (Art 1647, NCC). consenting co-owners
5. Where according to the terms of the contract, the
Note: If it is the wife who is administering her paraphernal real lease can be extended only by the written consent of
estate, the husband has no authority whatever, to lease, in any the parties thereto, no right of extension can rise
way, or administer the property. without such written consent
6. If the option is given to the lessor, the lessee cannot
Q: If a father, who is administering the real estate of his renew the lease against the former’s refusal
minor son, wants to record the lease, should he ask for 7. The lessor may impose additional conditions after the
judicial permission? expiration of the original period
8. Par. 2, Art. 1687, NCC provides that in the event that
A: Yes (Art. 1647, NCC). But even if no judicial authorization the lessee has occupied the leased premises for over a
is asked, such defect cannot be invoked by a lessee who has year, courts may fix a longer term of lease
dealt with him. (Summers v. Mahinay, [CA] 40 O.G. [11th S]
No. 18, p.40). Only the son or his own heirs may question Note: The power of the courts to establish a grace period is
the validity of the transaction. potestative or discretionary, depending on the particular
circumstances of the case.
DURATION OF LEASE
Q: What is perpetual lease?
Q: What is the duration of the lease?
A: A lease contract providing that the lessee can stay in the
A: premises for as long as he wants and for as long as he can
1. With determinate or fixed period – Lease will be for the pay the rentals and its increase.
said period and it ends on the day fixed without need
of a demand Note: It is not permissible. It is a purely potestative condition
2. No fixed period because it leaves the effectivity and enjoyment of leasehold rights
a. For rural lands (Art. 1682, NCC) – It shall be all to the sole and exclusive will of the lessee.
time necessary for the gathering of fruits which
the whole estate may yield in 1 year, or which it Q: Is an agreement that the duration of lease shall subsist
may yield once for an indefinite period provided that the payment of
b. For urban lands rentals is up-to-date (Perpetual lease)?
3. If rent is paid daily, lease is from the day to day
4. If rent is paid weekly, lease is from week to week A: No. It is a purely potestative condition because it leaves
5. If rent paid monthly, lease is from month to month the effectivity and enjoyment of leasehold rights to the sole
6. If rent is paid yearly, lease is from year to year and exclusive will of the lessee.
Q: When is the lessee entitled to a reduction of rent? Q: What is tacita reconducion (implied new lease)?
A: GR: In case of the loss of more than one-half of the fruits A: A lease that arises if at the end of the contract the lessee
through extraordinary and unforeseen fortuitous events. should continue enjoying the thing leased for 15 days with
the acquiescence of the lessor, unless a notice to the
XPN: Stipulation to the contrary. contrary had previously been given by the either party.
Note: It is applicable only to lease of rural lands. Q: What are the requisites for tacita reconducion?
Q: What are the rules on the extension of the lease A:

period? 1. The term of the original contract has expired
2. The lessor has not given the lessee a notice to vacate
A: 3. The lessee continued enjoying the thing leased for at
1. If a lease contract for a definite terms allows lessee to least 15 days with the acquiescence of the lessor
duly notify lessor of his desire to so extend the term,
Note: This acquiescence may be inferred from the failure of the
unless the contrary is stipulated
lessor to serve notice to vacate upon the lessee. This principle is
2. “May be extended” as stipulation – lessee can extend provided for under Article 1670 of the Civil Code. Thus, after the
without lessor’s consent but lessee must notify lessor expiration of the contract of lease, the implied new lease should
3. “May be extended for 6 years agreed upon by both have only been in a monthly basis. (Zosima Inc. v. Salimbagat; G.R.
parties” as stipulation – this must be interpreted in No. 174376. September 12, 2012)

2013 GOLDEN NOTES
LEASE
Q: When is there no implied new lease? Q: What can be the subject matter of a lease?
A: A: Things within the commerce of man.

1. Before or after the expiration of the term, there is a
notice to vacate given by either party; Note: Lease of properties belonging to the public domain is void.
2. There is no definite fixed period in the original lease
contract as in the case of successive renewals. Q: What is the principal obligation of a lessor?
Q: What are the effects of an implied new lease? A: To deliver the thing leased to the lessee.
A: Q: What are the remedies in case of breach of contrat of

1. The period of the new lease is not that stated in the lease?
original contract; but for then legal periods established
by law in Art. 1682, if the lease is rural lease, or Art. A:
1687, if the lease is urban lease. 1. Action for Specific Performance
2. Damages
Note: Art. 1682. The lease of a piece of rural land, when its
duration has not been fixed, is understood to have been for Q: What are the properties that may be leased?
all the time necessary for the gathering of the fruits which the
whole estate leased may yield in one year, or which it may A:
yield once, although two or more years have to elapse for the
1. By Filipinos – public domain with an area of 500
purpose.
hectares and may acquire not more than 12 hectares
Art. 1687. If the period for the lease has not been fixed, it is 2. By corporations
understood to be from year to year, if the rent agreed upon a. If at least 60% Filipinos-owned – public domain
is annual; from month to month, if it is monthly; from week for a period of 25 years, renewable for another 25
to week, if the rent is weekly; and from day to day, if the years; the area not to exceed more than 1,000
rent is to be paid daily. hectares
2. Accessory obligations contracted by a third person are Q: What are the rules on lease of things when lessee is an
extinguished (Art. 1672, NCC) alien?
3. Other terms of the original contract are revived
A:
Note: The terms that are revived are only those which are 1. Personal property – 99 year limit applies.
germane to the enjoyment of possession, but not those with
2. Aliens cannot lease public lands, and cannot acquire
respect to special agreements which are by nature foreign to
the right of occupancy or enjoyment inherent in a contract of private lands except through succession
lease. 3. If lease of real property (private lands), maximum of
25 years renewable for another 25 years (P.D. 713)
LEASE OF THINGS 4. Under the Investor ‘s Lease Act of 1995, the 25 year
period was extended to 50 years provided the
Q: Is lease of real property a real right? following conditions are met:
a. Lessee must make investments
A: GR: Lease of a real property is a personal right b. Lease is approved by DTI
c. If terms are violated, DTI can terminate it
XPNs: It is a real right:
1. If it is for more than one year and to be Note: The ILA did not do away with P.D. 713, under ILA
the consent of DTI is required, while in P.D. 713 no
enforceable – must be writing
consent is required.
2. If it is registered with Registry of Property -
regardless of its period
Q: What is rent?
Q: What are the effects if the lease of real property is not
A: The compensation either in money, provisions, chattels
registered?
or labor, received by the lessor from the lessee.
A:
Q: What are the requisites of rent?
1. It is not binding on third persons;
2. Such third person is allowed to terminate the lease in
A:
case he buys the property from the owner-lessor;
1. Not fictitious or nominal, otherwise the contract
3. Actual knowledge of existence and duration of lease is
becomes gratuitous;
equivalent to registration; or
2. Capable of determination; and
4. A stranger who knows of the existence of the lease,
3. May be in the form of products, fruits, or construction,
but was led to believe that the lease would expire
as long as it has value.
soon or before the new lease in favor of him begins,
the stranger can still be considered innocent.

CIVIL LAW
Note: Owner has the right to fix the rent because the contract is Q: Who are the parties to a sublease?
consensual and not imposed by law, but increasing the rent is not
an absolute right of the lessor. The new rate must be reasonable A:
and in no case shall the lessor be allowed to increase the rental
1. Lessor
when the term has not yet expired, unless, the tenant consents
(Paras, p. 262) 2. Sublessor (original lessee in the contract of lease)
3. Sublessee
If the rent is fixed for the first time, courts cannot interfere, but if it
is a renewal, the courts can settle the disagreements. Q: Does the lessee have the right to sublease the
property?
Q: What is the right of a purchaser of a leased property?
A: Yes, unless expressly stipulated.
A: GR: Purchaser of thing leased can terminate the lease.
XPNs: Note: If the prohibition to sublease is not express but only implied,
1. Lease is recorded in Registry of Property; the sublease will still be allowed. (Art.1650)
2. There is a stipulation in the contract of sale that
There must be no express prohibition for sublease in a contract of
the purchaser shall respect the lease;
lease. Also, the duration of sublease cannot be longer than that of
3. Purchaser knows the existence of the lease; the lease to which it is dependent
4. Sale is fictitious; or
5. Sale is made with a right of repurchase. Q: May a lessee sublease a leased property without the
consent of the lessor? (1999 Bar Question)
SUBLEASE
A: Yes, provided that there is no express prohibition against
Q: What is sublease? subleasing. Under the law, when in the contract of lease of
things, there is no express prohibition, the lessee may
A: It is an agreement between a sublessor and sublessee sublet the thing leased without prejudice to his
whereby the former grants temporarily the enjoyment or responsibility for the performance of the contract toward
use of the same thing, service or work subject of the the lessor (Art. 1650, NCC).
original contract of lease to the latter in exchange for
compensation or price, respecting the terms and conditions In case there is a sublease of the premises being leased, the
of original contract of lease between the lessor and lessee. sublessee is bound to the lessor for all the acts which refer
to the use and preservation of the thing leased in the
Q: What are the juridical relationships in a sublease manner stipulated between the lessor and the lessee (Art.
arrangement? 1651, NCC).
A: The sublessee is subsidiarily liable to the lessor for any rent

1. Principal lease due from the lessee. However, the sublessee shall not be
2. Sublease responsible beyond the amount of the rent due form him.
Note: These relationships co-exist and are intimately As to the lessee, the latter shall still be responsible to the
related to each other but are distinct from one another lessor for the rents; bring to the knowledge of the lessor
(Albano, p. 748). every usurpation or untoward act which any third person
may have committed or may be openly preparing to carry
Q: What is the nature of sublease? out upon the thing leased; advise the owner the need for all
repairs; to return the thing leased upon the termination of
A: It is a separate and distinct contract of lease wherein the the lease just as he received it, save what has been lost or
original lessee becomes a sublessor to a sublessee. impaired by the lapse of time or by ordinary wear and tear
or from an inevitable cause; responsible for the
Q: Alfonso was the owner of a building being leased to deterioration or loss of the thing leased, unless he proves
Beatriz. The contract allowed subleasing of the building, that it took place without his fault.
thus, Beatriz subleased it to Charlie. Charlie directly paid
his rent to Alfonso after the lease expired. Was Charlie Q: What is the responsibility of the lessee to the lessor in
correct? case he subleases the property?
A: No. There are two (2) distinct leases involved, the A: By express provision of Article 1650, NCC, the lessee is
principal lease and the sublease. In such agreement, the still responsible for the performance of his obligations
personality of the lessee does not pass on to or is acquired toward the lessor.
by the sublessee. Thus, the payment to the lessor was not
payment to the sublessor. Alfonso was a stranger to the
sublease agreement. (Emilia Blas vs. Court of Appeals,
1989)

2013 GOLDEN NOTES
LEASE
Q: What are the responsibilities of a sublessee to the the lessor and the assignee, who is converted into a lessee.
lessor? (Pineda, p. 451)
A: GR: No juridical relationship between lessor and Q: Distinguish sublease from assignment of lease.
sublessee.
XPNs: A:
1. All acts which affect the use and preservation of
SUBLEASE ASSIGNMENT OF LEASE
the thing leased
2. For any rent due to the lessor from the lessee There are 2 leases and 2
There is only one
which the latter failed to pay, the lessor must distinct juridical
juridical relationship,
collect first from the lessee, and if the lessee is relationships although
that of the lessor and
insolvent, the sublessee becomes liable immediately connected
the assignee, who is
(subsidiary liability) and related to each
converted into a lease
other
Q: When is a sub-lessee liable to the lessor? Personality of the lessee Personality of the lessee
does not disappear disappears
A: Lessee does not
1. All acts which refer to the use and preservation of the Lessee transmits
transmit absolutely his
thing leased in the manner stipulated between the absolutely his rights to
rights and obligations to
lessor and the lessee the assignee
the sublessee
2. The sublessee is subsidiary liable to the lessor for any Sublessee, generally,
rent due from the lessee does not have any Assignee has a direct
direct action against the action against the lessor
Q: What is the extent of the subsidiary liability of the lessor
sublessee?
REMEDIES IN SUBLEASE
A: The sublessee shall be responsible only to the amount of
rent due from him, in accordance with the terms and Q: What is accion directa?
conditions of the sublease contract, at the time the demand
was made by the lessor (Art. 1652, NCC). A: A direct action which the lessor may bring against a
sublessee who misuses the subleased property.
Q: Is mere failure of the lessee to pay rentals sufficient to
make the sublessee subsidiarily liable to the lessor? Q: What are the remedies when either the lessor or the
lessee did not comply with his obligations?
A: No. There must be a judgment cancelling the lessee’s
principal lease contract or ousting the lessee from the A: RED
premises before the sub-lessee becomes subsidiarily liable. 1. Rescission and damages;
(Wheelers Club Int’l, Inc. vs. Bonifacio, Jr.,G.R. No. 139540, 2. Damages only (contract will be allowed to remain
2005) in force); or
3. Ejectment
Q: Can rights under a contract of lease be assigned?
Q: What are the grounds for ejectment?
A: GR: Lessee cannot assign the lease without consent of
lessor (Art. 1649, NCC) A:
1. When the period agreed upon has expired
XPN: Stipulation to the contrary 2. Lack of payment of the price stipulated
3. Violation of any of the conditions agreed upon in
Q: When does an assignment of lease take place? the contract
4. When the lessee devotes the thing leased to any
A: It exists when the lessee made an absolute transfer of his use or service not stipulated which caused the
leasehold rights in a contract, and he has disassociated deterioration thereof. (Art. 1673, NCC)
himself from the original contract of lease (Pineda, p. 451)
Q: What are the grounds for judicial ejectment under the
Note: The assignment has the effect of novation consisting in the Rental Reform Act of 2002?
substitution. There being a novation, the consent of lessor is
necessary to effect assignment unless the contract of lease allows
the lessee to assign (Pineda, p. 452) A:
1. Assignment of lease or subleasing of residential
Q: What is the effect of assignment of lease? units in whole or in part, including the acceptance
of boarders or bedspacers, without the written
A: The personality of the original lessee disappears and consent of the lessor;
there only remain in the juridical relation of two persons: 2. Rental payment in arrears for 3 months; Provided,
that in case of refusal by the lessor to accept the

CIVIL LAW
payment of the rent, the lessee may deposit the Q: What if the value has not been agreed upon in a
amount in court or with the city or municipal contract of lease of service?
treasurer, as the case may be, or in the bank in
the name of and with notice to the lessor, within A: When no rate has been fixed, the same shall be
one month after the refusal of the lessor to determined by the courts according to the uses and
accept payment. customs of the place and the evidence, unless the services
by agreement were to be rendered gratuitously. (Pineda
Q: Jane leased a truck to Ed for 2 years. After 1 year from Sales, p. 444, 20002 ed)
delivery, the truck was destroyed by a strong typhoon.
What is the effect of the destruction of the truck with LEASE OF RURAL AND URBAN LANDS
respect to the lease?
Q: What is a rural land (Product-Producing Lands)?
A: It depends. If the thing leased is totally destroyed by a
fortuitious event, the lease is extinguished. If the A: Regardless of site, if the principal purpose is to obtain
destruction is partial, the lessee may choose between: (1) products from the soil, the lease is of rural lands. Hence, as
proportional reduction of rent or, (2) rescission of lease. used here, rural lands are those where the lessee
(Art. 1655, NCC) principally is interested in soil products.
LEASE OF WORK OR SERVICES Q: What is an urban land (Non-Product Producing Lands)?
Q: What is a contract for lease of services? A: Lands leased principally for purposes of residence are
called urban lands.
A: A contract whereby one party binds himself to render
some service to the other party consisting his own free RIGHTS AND OBLIGATIONS
activity of labor, and not its result and the other party binds OF LESSORS AND LESSEES
himself to pay a remuneration therefor (Pineda Sales, p.
440-441, 2002 ed). Q: What are the obligations of the lessor?
Q: What is a contract for a piece of work? A: ReD-CaP

1. To Deliver the things in such condition as to
A: A contract whereby one of the parties binds himself to render it fit for the use intended (cannot be
produce a result out of his work or labor and the other waived)
party binds himself to pay remuneration therefor. 2. GR: To make, during the lease all the necessary
Repairs in order to keep it suitable for the use to
Q: Distinguish lease of services from agency which it has been devoted
A: XPN: Stipulation to the contrary.

LEASE OF SERVICES AGENCY
Based on employment – 3. To maintain the lessee in the Peaceful and
Based on representation
the lessor of services adequate enjoyment of the lease for the entire
– agent represent his duration of the contract
does not represent his
principal and enter into
employer nor does he
juridical acts
execute juridical acts 4. Cannot alter the form of the thing leased
Principal contract Preparatory contract
Q: What are the rules on changing the form of thing
Q: Distinguish contract of piece of work and contract of leased?
lease services
A:
A: 1. Lessor can alter the thing leased provided there is no
PIECE OF WORK LEASE OF SERVICES impairment of the use to which the things are devoted
Object of contract is the Object of contract is the under the terms of the lease
result of the work service itself and not the 2. Alteration can be made by lessee provided the value of
without considering the result which it generates property is not substantially impaired
labor that produced it
If the result promised is Even if the result Q: What are the rules if urgent repairs are necessary?
not accomplished, the intended is not attained,
lessor or promissory is the services of the lessor A:
not entitled to must still be paid 1. Lessee is obligated to tolerate the work, although it
compensation may be annoying to him and although during the same
time he may be deprived of a part of the premises, if
repairs last for not more than 40 days

2013 GOLDEN NOTES
LEASE
2. If repairs last for 40 days or more, lessee can ask for which have not altered the form and substance of the
reduction of the rent in proportion to the time – land. On the other hand, the lessee may remove the
st
including the 1 40 days – and the part of the improvements should the lessor refuse to reimburse (Art.
property of which he is deprived 1678, Sulo-Nayon Inc. vs. Nayong Pilipino, 2007).
Note: In either case, rescission may be availed of if the main Q: What is the effect of the destruction of the thing
purpose of the lease is to provide a dwelling place and the property leased?
becomes uninhabitable.
A:
Q: What are the effects if the lessor fails to make urgent 1. Total destruction by fortuitous event – Lease is
repairs? extinguished.
2. Partial destruction
A: The lessee may: a. Proportional reduction of rent; or
1. order repairs at the lessor’s cost; b. Rescission of the lease.
2. sue for damages;
3. suspend the payment of the rent; or Q: When may lessee suspend payment of rent?
4. ask for rescission, in the case of substantial
damage to him. A: When the lessor fails to:
1. undertake urgent repairs; or
Q: Suppose the contract of lease was silent as to who will 2. maintain the lessee in peaceful and adequate
pay for repair expenses, who shall make the same? enjoyment of the property leased.
A: Note: For the intervening period, the lessee does not have to pay
1. Major Repairs – Lessor the rent.
2. Minor Repairs – Lessee
Q: When does the suspension become effective?
Q: What is the remedy of the lessee if the lessor fails to
make major or necessary repairs? A: The right begins:
1. In the case of repairs – from the time of the
A: Lessee may ask for: (1) Rescission of contract and demand and it went unheeded
indemnification for damages or, (2) Indemnification only, 2. In case of eviction – from the time the final
while the contract remains in force. (Art. 1659, NCC) judgment for eviction becomes effective
Q: What are the obligations of the lessee? Q: What are the kinds of trespass in lease?
A: TRUE-PRU A:
1. Pay the price of the lease according to the terms 1. Trespass in the fact (perturbation de mere hecho) –
stipulated physical enjoyment is reduced. Lessor will not be
2. Use the thing leased as a diligent father of a liable.
family devoting it to the use stipulated, and in the 2. Trespass in the law (perturbation de derecho) – a 3rd
absence of stipulation, to that which may be person claims legal right to enjoy the premises. Lessor
inferred from nature of thing leased, according to will be held liable.
the custom of the place
3. Pay the Expenses of the deed of lease Q: What are the alternative remedies of the aggrieved
4. Notify the lessor of Usurpation or untoward acts party in case of non-fulfillment of duties?
5. To notify the lessor of need for Repairs
6. To Return the property leased upon termination A:
of the lease in the same condition as he receive it 1. Rescission and damages
except when what has been lost or impaired by 2. Damages only, allowing the contract to remain in force
lapse of time, ordinary wear and tear or (specific performance)
inevitable cause/ fortuitous event
7. Tolerance of urgent repairs which cannot be Q: What are the remedies of the lessee if the lessor
deferred until the end of lease (par. 1, Art. 1662, refuses to accept rentals?
NCC)
A:
Q: A leased his land to B. B made useful improvements on 1. Tender of payment
the land. Upon the expiration of the lease contact, B seeks 2. Consignation
for reimbursement of the useful improvements from A.
Should A reimburse B? Q: What is the effect of failure to comply with the
requirements by the lessee?
A: The lessor may pay for one-half (1/2) of the value of the
improvements which the lessee made in good faith, which A: It is a ground for ejectment of the lessee. (Alfonso vs.
are suitable for the use for which the lease is intended, and Court of Appeals, G.R. No. 76824, December 20, 1988)

CIVIL LAW
SPECIAL RULES FOR LEASE OF RURAL AND URBAN LANDS A: No, the duration of the lease has not been changed.
There was a fixed period for the lease and therefore the
RURAL LANDS nature of the fruit trees or valuable improvements is
immaterial. (Iturralde v. Garduno, 9 Phil. 605)
Q: What is the effect of sterility of land in case of rural
lease? Q: If at the end of the lease, there are still pending crops,
who will own them?
A: There is no reduction. The fertility or sterility of the land
has already been considered in the fixing of the rent. A: The lessee. However, a contrary stipulation will prevail.
Q: What is the effect of damage caused by a fortuitous Q: What is the rule for land tenancy on shares?
event on the rural lease?
A: This refers to the contracts of aparceria. Land tenancy on
A: shares are primarily governed by special laws (ex:
1. Ordinary fortuitous event – no reduction. The lessee Agricultural Tenancy Act, RA 1199), and suppletorily, by the
being the owner of crops must bear the loss. Res perit stipulations of the parties, the provisions on partnership,
domino and the customs of the place.
2. Extraordinary fortuitous event –
a. More than one-half of the fruits were lost, there Q: Who is a tenant?
is a reduction (XPN: specific stipulation to the
contrary) A: A tenant is a person, who, himself, and with the aid of
b. Less than one-half, or if the loss is exactly one- available from within his immediate farm household,
half, there is no reduction cultivates the land belonging to, or possessed by another,
with the latter’s consent for the purpose of production,
Note: The rent must be reduced proportionately. sharing the produce with the landholder under the share
tenancy system, or paying to the landlord a price certain or
Q: X leased his land to Y for the purpose of growing crops ascertainable in produce, or in money or both, under the
thereon. Due to an extraordinary fortuitous event, more leasehold tenancy system. (Pangilinan v. Alvendia, GR no.
than one-half of the crops were. In the lease contract, the 10690, June 28, 1957)
rent was fixed at an aliquot (proportional) part of the
crops. Is Y entitled to a reduction in rents? Q: What is included in an immediate farm household?
A: No, because here the rent is already fixed at an aliquot A: This includes the members of the family of the tenant,
part of the crops. Thus, every time the crops decrease in and such other person/s, whether related to the tenant or
number, the rent is reduced automatically. If therefore, the not, who are dependent upon him for support, and who
tenant here refuses to give the stipulated percentage, he usually help him operate the farm enterprise.
can be evicted. (Hijos de I. dela Rama v. Benedicto, 1 Phil.
495) Q: Can a tenant work for different landowners?
Q: What is the rule for reduction of rent? A: It is prohibited for a tenant, whose holding is 5 hectares
or more, to contract work at the same time on two or more
A: The reduction on rent can be availed of only if the loss separate holdings belonging to different landholders
occurs before the crops are separated from their stalk, root, without the knowledge and consent of the landholder with
or trunk. If the loss is afterwards, there is no reduction of whom he had first entered into the tenancy relationship.
rent. (Sec. 24, RA 1199)
Q: What is the duration of rural lease with an unspecified Q: What are the grounds for ejectment of the tenant on
duration? shares?
A: The lease of a piece of rural land, when its duration has A:

not been fixed, is understood to have been for all the time 1. voluntary surrender of the land
necessary for the gathering of the fruits which the whole 2. bona fide intention of the landholders to cultivate the
estate leased may yield in one year, or which it may yield land himself personally or thru the employment of
once, although two or more years have to elapse for the farm machineries
purpose. (Art. 1682, NCC) 3. tenant violates or fails to comply with the terms and
conditions of the contract or the RA 1199
Q: A rural lease was agreed upon to last for a certain 4. failure to pay the agreed rental or deliver the
definite period. But the tenant planted fruit trees which landholder’s share
would require a long period of time to bear fruit, as well 5. tenant uses the land for different purpose
as introduce certain more or less valuable improvements. 6. share-tenant fails to follow farm practices which will
Has this act of the tenant changed the duration of the contribute towards the proper care and increased
contract? production

2013 GOLDEN NOTES
LEASE
7. negligence permits serious injury to land which will right to rescind the contract on account of this
impair its productive capacity condition
8. conviction by a competent court of a tenant or any
member of his immediate family or farm household of Q: What are the grounds for termination of lease?
a crime against the landholder or a member of his
immediate family. A: WiRe-LEx-Run
1. Expiration of the period
Q: Will the sale of the land extinguish the farm-tenancy 2. Resolution of the right of lessor (i.e.: when the
relationship? lessor is a usufructuary and the usufruct is
terminated)
A: No. The purchaser or the transferee shall assume the 3. By the will of the purchaser or transferee of the
rights and obligations of the former landholder in relation thing
to the tenant. 4. Loss of the thing
5. Rescission due to the performance of the
Q: Does death extinguish the tenancy relationship? obligations of one of the parties stated under Art.
1654 and 1657.
A: It depends. 6. The dwelling place or any other building is unfit
1. Death of tenant – extinguishes relationship but for human habitation and is dangerous to life or
heirs and members of his immediate farm health.
household may continue to work on the land until
the close of the agricultural year. Q: Will the death of the lessee extinguish the lease
2. Death of landholder – does not extinguish the agreement? (1997 Bar Question)
relationship because his heirs shall assume his
rights and obligation. A: No. The death of the lessee will not extinguish the lease
agreement, since lease is not personal in character and the
Q: Does the expiration of the period of the contract of right is transmissible to the heirs. (Heirs of Dimaculangan v.
tenancy fixed by the parties extinguish the relationship? IAC, G.R. No. 68021, Feb. 20, 1989)
A: No. The landlord is required by law, if the tenant does Q: What are the remedies of the aggrieved party in case of
not voluntarily abandon the land or turn it over to him, to non-compliance of the other party’s obligations under
ask the court for an order of dispossession of the tenant. Arts.1654 (obligations of lessor) and 1657 (obligations of
(Sec. 49, RA 1199, as amended by RA 2263) lessee)?
URBAN LANDS A:
1. Rescission with damages
Q: What are the rules applicable to repairs which an urban 2. Damages only allowing the lease to subsists
lessor is liable?
Q: What are the restrictions in exercising the right to
A: rescind?
1. Special stipulation
2. If none, custom of the place. A: JAS
1. Breach must be Substantial and fundamental (de
Q: What are the rules when the duration of lease is not minimis non curat lex – the law is not concerned
fixed? with trifles).
2. It requires Judicial action.
A: 3. It can be filed only by the Aggrieved party.
1. If there is a fixed period - the lease would be for the
said period. Q: In case of action to rescind, may the other party validly
2. If there are no fixed period - apply the following: request for time within which to comply with his duties?
a. rent paid daily – lease is from day to day
b. rent paid weekly – lease is from week to week A: No. The aggrieved party seeking rescission will prevail.
c. rent paid monthly – lease from month to month Under Article 1659, NCC, the court has no discretion to
d. rent paid yearly – lease from year to year refuse rescission, unlike the situation covered by Art. 1191,
NCC, in the general rules on obligations [Bacalla v.
TERMINATION OF LEASE Rodriguez, et. al., C.A. 40 O.G. (supp.), Aug. 30, 1941]
Q: When does immediate termination of lease apply? Q: How is the amount of damages measured?
A: A: Difference between the rents actually received and that

1. Only to dwelling places or any other building intended amount stipulated in the contract representing the true
for human habitation rental value of the premises. (A. Maluenda and Co. vs.
2. Even if at the time the contract was perfected, the Enriquez, 49 Phil. 916)
lessee knew of the dangerous condition or waived the

CIVIL LAW
Q: Under a written contract dated December 1, 1989, A that he would occupy the building being constructed
Victor leased his land to Joel for a period of five (5) years upon completion, for the unexpired portion of the lease
at a monthly rental of P1,000.00, to be increased to term, explaining that he had spent partly for the
P1,200.00 and P1,500.00 on the third and fifth year, construction of the building that was burned. A rejected
respectively. On January 1, 1991, Joel subleased the land B’s demand. Did A do right in rejecting B’s demand? (1993
to Conrad for a period of 2 years at a monthly rental of Bar Question)
P1,500.00. On December 31, 1992, Joel assigned the lease
to his compadre, Ernie, who acted on the belief that Joel A: Yes, A was correct in rejecting the demand of B. As a
was the rightful owner and possessor of the said lot. Joel result of the total destruction of the building by fortuitous
has been faithfully paying the stipulated rentals to Victor. event, the lease was extinguished. (Art. 1655, NCC)
When Victor learned on May 15, 1992 about the sublease
and assignment, he sued Joel, Conrad and Ernie for
rescission of the contract of lease and for damages.
1. Will the action prosper? If so, against
whom? Explain.
2. In case of rescission, discuss the rights and
obligations of the parties. (2005 Bar
Question)
A:
1. Yes, the action for rescission of the lease will prosper
because Joel cannot assign the lease to Ernie without
the consent of Victor (Art. 1649, NCC). But Joel may
sublet to Conrad because there is no express
prohibition (Art. 1650, NCC; Alipio v. CA, G.R. No.
134100, Sept. 29, 2000).
Victor can rescind the contract of lease with Joel, and

the assignment of the lease to Ernie, on the ground of
violation of law and of contract. The sub-lease to
Conrad remained valid for 2 years from January 1,
1991, and had not yet lapsed when the action was
filed on May 15, 1992.
2. In case of rescission, the rights and obligations of the

parties should be as follows: At the time that Victor
filed suit on May 15, 1992, the assignment had not yet
lapsed. It would lapse on December 1, 1994, the very
same date that the 5-year basic lease would expire.
Since the assignment is void, Victor can get the
property back because of the violation of the lease.
Both Joel and Ernie have to surrender possession and
are liable for damages. But Conrad has not yet
incurred any liability on the sublease which still
subsisted at the time of the filing of the action on May
15, 1992.
Ernie can file a cross-claim against Joel for damages on

account of the rescission of the contract of
assignment. Conrad can file a counter-claim against
Victor for damages for lack of causes of action at the
time of the filing of the suit.
Q: A is the owner of a lot on which he constructed a

building in the total cost of P10, 000,000. Of that amount
B contributed P5, 000,000 provided that the building as a
whole would be leased to him (B) for a period of ten years
from January 1, 1985 to December 31, 1995 at a rental of
P100,000 a year. To such condition, A agreed. On
December 20, 1990, the building was totally burned. Soon
thereafter, A’s workers cleared the debris and started
construction of a new building. B then served notice upon

2013 GOLDEN NOTES
LAND TITLES AND DEEDS
LAND TITLES AND DEEDS CERTIFICATE OF TITLE
TORRENS SYSTEM Q: What is a Certificate of Title?
Q: What is Torrens System? A: It is the transcript of the decree of registration made by

the Register of Deeds in the registry. It accumulates in one
A: It is a system for registration of land under which, upon document a precise and correct statement of the exact
the landowner’s application, the court may, after status of the fee simple title which an owner possesses.
appropriate proceedings, direct the Register of Deeds for
the issuance of a certificate of title. Q: What are the two types of certificates of title?
Q: What are the purposes in adopting the Torrens System A:

of land registration? 1. Original Certificate of Title (OCT) – the first title issued
in the name of the registered owner by the Register of
A: To: Deeds covering a parcel of land which had been
1. avoid possible conflicts of title regarding real registered under the Torrens system by virtue of a
property; and judicial or administrative proceeding.
2. facilitate transactions relative thereto by giving
the public the right to rely on the face of the It consists of one original copy filed in the Register of
Torrens certificate of title and to dispense with Deeds, and the owner’s duplicate certificate delivered
the need of inquiring further. to the owner.
Note: The Government has adopted the Torrens system due to its 2. Transfer Certificate of Title (TCT) – the title issued by
being the most effective measure to guarantee the integrity of land the Register of Deeds in favor of a transferee to whom
titles and to protect their indefeasibility once the claim of the ownership of a registered land has been
ownership is established and recognized (Casimiro Development
transferred by any legal mode of conveyance (e.g. sale,
Corporation v. Nato Mateo, G.R. No. 175485, July 27, 2011).
donation).
Q: What is the nature of the proceeding for land
It also consists of an original and an owner’s duplicate
registration under the Torrens System?
certificate.
A: The Torrens system is judicial in character and not
Q: Differentiate title over land, land title, certificate of
merely administrative. Under the Torrens system, the
title, and deed.
proceeding is in rem, which means that it is binding upon
the whole world.
A: Title is a juridical act or a deed which is not sufficient by
itself to transfer ownership but provides only for a juridical
Accordingly, all occupants, adjoining owners, adverse
justification for the effectuation of a mode to acquire or
claimants, and other interested person are notified of the
transfer ownership.
proceedings, by publication of the notice of initial hearing,
and have a right to appear in opposition to such
Land title is the evidence of the owner’s right or extent of
application.
interest, by which he can maintain control, and as a rule,
Note: In a registration proceeding instituted for the registration of assert right to exclusive possession and enjoyment of
a private land, with or without opposition, the judgment of the property.
court confirming the title of the applicant or oppositor, as the case
may be, and ordering its registration in his name, constitutes, when Certificate of title is the transcript of the decree of
final, res judicata against the whole world. registration made by the Register of Deeds in the registry. It
accumulates in one document a precise and correct
A decree of registration that has become final shall be deemed statement of the exact status of the fee simple title which
conclusive not only on the questions actually contested and
an owner possesses.
determined but also upon all matters that might be litigated or
decided in the land registration proceedings.
A deed is the instrument in writing, by which any real estate
Q: What bodies implement land registration under the or interest therein is created, alienated, mortgaged or
Torrens system? assigned, or by which title to any real estate may be
affected in law or equity.
A:
1. Courts Q: Is title over land synonymous with ownership?
2. Department of Environment and Natural Resources
(DENR) A: No. Title is a juridical act or a deed which is not sufficient
3. Department of Justice (DOJ) through the Land by itself to transfer ownership but provides only for a
Registration Authority (LRA) and its Register of Deeds juridical justification for the effectuation of a mode to
4. Department of Land Reform (DLR) acquire or transfer ownership. It provides the cause for the
5. Department of Agriculture (DAR) acquisition of ownership (i.e. sale = title; delivery = mode of
acquisition of ownership).

CIVIL LAW
disregard such rights and order the cancellation of the

Ownership, on the other hand, is an independent right of certificate. Such cancellation would impair public
exclusive enjoyment and control of the thing for the confidence in the certificate of title, for everyone dealing
purpose of deriving therefrom all advantages required by with property registered under the Torrens system would
the reasonable needs of the owner and the promotion of have to inquire in every instance whether the title has been
the general welfare but subject to the restrictions imposed regularly issued or not. This would be contrary to the very
by law and the rights of others (Art. 427, NCC) purpose of the law, which is to stabilize land titles. Verily,
all persons dealing with registered land may safely rely on
Note: Registration under the Torrens system, not being a mode of the correctness of the certificate of title issued therefor,
acquiring ownership, does not create or vest title. The Torrens and the law or the courts do not oblige them to go behind
certificate of title is merely an evidence of ownership or title in the the certificate in order to investigate again the true
particular property described therein. In that sense, the issuance of
condition of the property. They are only charged with
the certificate of title to a particular person does not preclude the
possibility that persons not named in the certificate may be co- notice of the liens and encumbrances on the property that
owners of the real property therein described with the person are noted on the certificate (Republic of the Philippines v.
named therein, or that the registered owner may be holding the Court of Appeals and Spouses Catalino Santos, et al., G.R.
property in trust for another person (Casimiro Development No. 116111, January 21, 1999).
Corporation v. Nato Mateo, G.R. No. 175485, July 27, 2011).
Q: Spouses Serafin were the original registered owners of
Q: St. Jude’s Enterprise, Inc. is the registered owner of a a lot in Bukdnon. This property was then mortgaged to the
parcel of land located in Caloocan City. It then subdivided DBP and upon default in the payment of the loan
the said land and was later on found to have expanded obligation, it was foreclosed and ownership was
and enlarged with an increase of 1, 421 square meters. consolidated in DBP’s name. Serafin Adolfo however,
Subsequently, St. Jude sold the lots to several individuals. repurchased the same in 1971, after his wife died. In 1975,
Thus, the Solicitor General filed an action seeking the he allegedly mortgaged the subject property to Aniceto
annulment and cancellation of the TCT issued in the name Bangis who took possession of the land. Yet, this
of St. Jude. Is the government estopped from questioning transaction was not reduced into writing. In 1998, the
the approved subdivision plan which expanded the areas heirs of Adolfo expressed their intention to redeem the
covered by the TCTs in question? property from Bangis but the latter refused claiming that
the transaction was one of sale evidenced by TCT No. T-
A: The general rule is that the State cannot be put in 10567 issued in 1967. Decide with reason.
estoppel by the mistakes or error of its officials or
agents. However, like all general rules, this is also subject to A: As held in the case of Top Management Programs
exceptions, viz.: Corporation v. Luis Fajardo and the Register of Deeds of Las
Piñas City: “if two certificates of title purport to include the
“Estoppels against the public are little favored. They should same land, whether wholly or partly, the better approach is
not be invoked except in rate and unusual circumstances, to trace the original certificates from which the certificates
and may not be invoked where they would operate to of titles were derived.”
defeat the effective operation of a policy adopted to
protect the public. They must be applied with Having, thus, traced the roots of the parties’ respective
circumspection and should be applied only in those special titles supported by the records of the Register of Deeds of
cases where the interests of justice clearly require Malaybalay City, the courts a quo were correct in upholding
it. Nevertheless, the government must not be allowed to the title of the Heirs of Adolfo as against TCT No. T-10567 of
deal dishonorably or capriciously with its citizens, and Bangis, notwithstanding its earlier issuance on August 18,
must not play an ignoble part or do a shabby thing; and 1976 or long before the Heirs of Adolfo secured their own
subject to limitations x x x, the doctrine of equitable titles on May 26, 1998. To paraphrase the Court’s ruling in
estoppel may be invoked against public authorities as well Mathay v. Court of Appeals: where two (2) transfer
as against private individuals.” certificates of title have been issued on different dates, the
one who holds the earlier title may prevail only in the
In the case at bar, for nearly twenty years petitioner failed absence of any anomaly or irregularity in the process of its
to correct and recover the alleged increase in the land area registration, which circumstance does not obtain in this
of St. Jude. Its prolonged inaction strongly militates against case (Aniceto Bangis, substituted by his heirs, namely
its cause, as it is tantamount to laches, which means “the Rodolfo B. Bangis, et al. vs. Heirs of Serafin and Salud
failure or neglect, for an unreasonable and unexplained Adolfo, namely: Luz A. Banniester, et al.; G.R. No. 190875,
length of time, to do that which by exercising due diligence June 13, 2012).
could or should have been done earlier; it is negligence or
omission to assert a right within a reasonable time, Q: What are the modes of acquiring title over land?
warranting a presumption that the party entitled to assert
it either has abandoned it or declined to assert it.” A: I-AS-DO
1. By possession of land since time Immemorial
Likewise time-settled is the doctrine that where innocent 2. By possession of Alienable and disposable public
third persons, relying on the correctness of the certificate land
of title, acquire rights over the property, courts cannot

2013 GOLDEN NOTES
Note: Under the Public Land Act (CA No. 141), citizens all liens & encumbrances, except as may be expressly noted
of the Philippines, who by themselves or through their there or otherwise reserved by law.
predecessors-in-interest have been in open, continuous,
exclusive and notorious possession and occupation of
Q: Filomena allegedly bought a parcel of unregistered land
alienable and disposable agricultural land of the public
domain under a bona fide claim of ownership since June from Hipolito. When she had the property titled and
12, 1945, or earlier, (except when prevented by war or declared for tax purposes, she sold it. The Mapili’s
force majeure), shall be conclusively presumed to have question the transfer, saying that Filomena falsely stated
performed all the conditions essential to a government in her Affidavit of Transfer of Real Property that Hipolito
grant and shall be entitled to a certificate of title. sold it to her in 1949, since by that time, he is already
dead. Filomena maintains that she is the lawful owner of
3. By Sale, Donation, and Other modes of acquiring such by virtue of the issuance of the Torrens certificate
ownership and tax declarations in her name. Is Filomena the lawful
owner of such property?
Q: What are the modes of acquiring ownership over land?
A: No. Torrens certificate pertaining to the disputed
A: OLD TIPS property does not create or vest title, but is merely an
1. Occupation evidence of an indefeasible and incontrovertible title to the
2. Law property in favor of the person whose name appears
3. Donation therein. Land registration under the Torrens system was
4. Tradition never intended to be a means of acquiring ownership.
5. Intellectual creation
6. Prescription Neither does the existence of tax declarations create or
7. Succession vest title. It is not a conclusive evidence of ownership, but a
proof that the holder has a claim of title over the property.
Note: Registration of a piece of land under the Torrens System (Larena v. Mapili, et. al., G.R. No. 146341, Aug. 7, 2003)
does not create or vest title, because it is not a mode of acquiring
ownership. A certificate of title is merely an evidence of ownership
Q: What are the effects of the issuance of a Torrens title?
or title over the particular property described therein. Thus,
notwithstanding the indefeasibility of the Torrens title, the
registered owner may still be compelled to reconvey the registered A: TRINC
property to its true owners (Heirs of Tanyag vs. Gabriel, et. al.; G.R. 1. The land is placed under the operation of Torrens
No. 175763, April 11, 2012). System;
2. Land is Relieved from all claims except those
Q: Differentiate possession from occupation noted thereon and provided by law;
3. The land becomes Incontrovertible and
A: indefeasible;
POSSESSION OCCUPATION 4. Title to the land becomes Non-prescriptible; and
It applies to properties 5. The certificate of title is not subject to Collateral
It applies only to property attack.
whether with or without
without owner
owner
By itself does not confer Q: Spouses Encinas are the registered owner of a lot in
It confers ownership Sorsogon. The controversy involves a potion or the said lot
ownership
There can be possession There can be no occupation which the Heirs of Jose Maligaso, Sr. continue to occupy
without ownership without ownership despite having received 2 notices to vacate. In 1929,
accordingly, an OCT covering such lot was issued in the
Q: How are land titles acquired? nae of Maria Ramos, petitioner’s aunt. In 1965, Maria sold
it to the respondents which led to the issuance of a TCT in
A: PERA PAID favour of the latter.
1. Public grant
2. Emancipation patent or grant In 1998 or 30 years from the time they purchased the lot,
3. Reclamation repsondnts issued 2 demand letters to the petitioners
4. Adverse possession / acquisitive prescription asking them to vacate the contested area. The petitioners
5. Private grant or voluntary transfer refused to leave. Hence, respondents filed a complaint for
6. Accretion unlawful detainer against them. Accoding to the
7. Involuntary alienation petitioners however, their occupation remained
8. Descent or devise undisturbed for more than 30 years and the respondents’
failure to detal and specifies their supposedly tolerated
Q: What is Torrens title? possession suggest that they are aware of their claim over
the subject area. Decide with reason.
A: It is a certificate of ownership issued under the Torrens
system of registration by the government, through the A: In Soriente v. Estate of the Late Arsenio E. Concepcion, a
Register of Deeds (RD) naming and declaring the owner in similar allegation – possession of the property in dispute
fee simple of the real property described therein, free from since time immemorial – was met with rebuke as such
possession, for whatever length of time, cannot prevail

CIVIL LAW
over a Torrens title, the validity of which is presumed and certificate of title which is an incontrovertible proof of
immune to any collateral attack. ownership. An original certificate of title issued by the
Register of Deeds under an administrative proceeding is as
“The validity of respondent’s certificate of title cannot be indefeasible as a certificate of title issued under judicial
attacked by petitioner in this case for ejectment. Under proceedings. However, indefeasibility of title does not
Section 48 of Presidential Decree No. 1529, a certificate of attach to titles secured by fraud and misrepresentation.
title shall not be subject to collateral attack. It cannot be Nonetheless, fraud and misrepresentation, as grounds for
altered, modified or cancelled, except in a direct cancellation of patent and annulment of title, should never
proceeding for that purpose in accordance with law. The be presumed, but must be proved by clear and convincing
issue of the validity of the title of the respondents can only evidence, mere preponderance of evidence not being
be assailed in an action expressly instituted for that adequate. Fraud is a question of fact which must be
purpose. Whether or not petitioner has the right to claim proved. Thus, respondent’s Torrens title is a valid evidence
ownership over the property is beyond the power of the of his ownership of the land in dispute (Datu Kiram
trial court to determine in an action for unlawful detainer.” Sampaco v. Hadji Serad Mingca Lantud, G.R. No. 163551,
July 18, 2011).
Given the foregoing, the petitioners’ attempt to remain in
possession by casting a cloud on the respondents’ title Q: Ruben C. Corpuz filed a complaint against Spouses
cannot prosper. Hilarion and Justa Agustin on the allegation that he is the
registered owner of 2 parcels of land in Laoag City.
Neither will the sheer lapse of time legitimize the Accordingly, his father bought it from Elias Duldulao and
petitioners’ refusal to vacate the subject area or bar the then allowed spouses Agustin to occupy the subject
respondents from gaining possession thereof. As ruled in properties. Despite demand to vacate, the Agustins
Spouses Ragudo v. Fabella Estate Tenants Association, Inc., refused to leave the premises.
laches does not operate to deprive the registered owner of
a parcel of land of his right to recover possession thereof Ruben alleged that he has better right to possess the
(Heirs of Jose Maligaso, Sr., etc. vs. Sps. Simon D. Encinas property having acquired the same from his father
and Esperanza E. Encinas; G.R. No. 182716, June 20, 2012). through a Deed of Quitclaim in 1971. Spouses Agustin
however contends that they are the rightful owners as
Q: What is the probative value of a Torrens title? evidenced by a Deed of Absolute Saale in their favor.
Decide who between the parties has the right to
A: Torrens title may be received in evidence in all courts of possession of the disputed properties.
the Philippines and shall be conclusive as to all matters
contained therein, principally as to the identity of the land A: Indeed, a title issued under the Torrens system is
owner except so far as provided in the Land Registration entitled to all the attributes of property ownership, which
Act (LRA) necessarily includes possession. Petitioner is correct that as
a Torrens title holder over the subject properties, he is the
A Torrens certificate is an evidence of indefeasible title of rightful owner and is entitled to possession thereof. In this
property in favor of the person in whose name appears case, the Quitclaim executed by the elder Corpuz in favor of
therein – such holder is entitled to the possession of the petitioner was executed ahead of the Deed of Sale of
property until his title is nullified. respondents. Thus, the sale of the subject properties by
petitioner’s father to respondents cannot be considered as
Q: Hadji Serad Lantud filed an action to quiet title with a prior interest at the time that petitioner came to know of
damages with the RTC of Lanao del Sur. Accordingly, Datu the transaction. (Ruben C. Corpuz v. Spouses Hilarion
Kiram Sampaco with several armed men, forcibly and Agustin and Justa Agustin, G.R. No. 183822, Jan. 18, 2012)
unlawfully entered his property and destroyed the nursery
buildings, cabbage seedlings and other improvements. Q: What is meant by indefeasibility and incontrovertibility
Datu Kiram however denied the material allegationos of of certificates of title?
Hadji Lantud asserting that he and his predecessors-in-
interest are the ones who had been in open, public, A: The certificate, once issued, becomes a conclusive
continuous, and exclusive possession of the property in evidence of the title/ownership of the land referred to
dispute. He also alleged that he inherited the land in 1952 therein. What appears on the face of the title is controlling
from his father and had been in adverse possession and on questions of ownership of the property in favor of the
ownership of the subject lost, cultivating and planting person whose name appears therein and such cannot be
trees and plants. He also declared the land for taxation defeated by adverse, open, and notorious possession;
purposes and paid real estate taxes. Who is the rightful neither can it be defeated by prescription.
owner of the subject property?
A: Datu Kiram is the rightful owner. The Torrens title is

conclusive evidence with respect to the ownership of the
land described therein, and other matters which can be
litigated and decided in land registration proceedings. Tax
declarations and tax receipts cannot prevail over a

2013 GOLDEN NOTES
Q: What are the rules as regards indefeasibility and Q: What is the mirror doctrine?
incontrovertibility?
A: All persons dealing with a property covered by Torrens
A: certificate of title are not required to go beyond what
1. The certificate of title serves as evidence of an appears on the face of the title. Where there is nothing on
indefeasible title to the property in favor of the person the certificate of title to indicate any cloud or vice in the
whose name appears therein. ownership of the property, or any encumbrance thereon,
the purchaser is not required to explore further than what
2. After the expiration of the one (1) year period from the Torrens title upon its face indicates in quest for any
the issuance of the decree of registration upon which hidden defect or inchoate right that may defeat his right
it is based, it becomes incontrovertible. thereto.
3. Decree of registration and the certificate of title issued Note: Stated differently, an innocent purchaser for value relying on
pursuant thereto may be attacked on the ground of the Torrens title issued is protected.
actual fraud within one (1) year from the date of its
entry and such an attack must be direct and not by a Q: When does the mirror doctrine apply?
collateral proceeding. The validity of the certificate of
title in this regard can be threshed out only in an A: When a title over a land is registered under the Torrens
action expressly filed for the purpose. system
Note: The defense of indefeasibility of a Torrens title does not Q: Is the right of the public to rely on the face of a
extend to a transferee who takes it with notice of a flaw in the title certificate of title absolute?
of his transferor. To be effective, the inscription in the registry
must have been made in good faith. A holder in bad faith of a A: No. This is unavailing when the party concerned has
certificate of title is not entitled to the protection of the law, for actual knowledge of facts and circumstances that should
the law cannot be used as a shield for fraud (Adoracion Rosales
imply a reasonably cautious man to make such further
Rufloe, et al., v. Leonarda Burgos et al., G.R. No. 143573, Jan. 30,
2009). inquiry.
Q: There is no specific provision in the Public Land Law (CA Q: What are the exceptions to the application of the
No. 141, as amended) or the Land Registration Act (Act mirror doctrine?
496), now P.D. 1529, fixing the one (1) year period within
which the public land patent is open to review on the A: BOB LIKA
ground of actual fraud as in Section 38 of the Land 1. Where the purchaser or mortgagee is a
Registration Act, now Section 32 of PD 1529, and clothing Bank/financing institution;
a public land patent certificate of title with indefeasibility. 2. Where the Owner still holds a valid and existing
What is the effect of such absence? certificate of title covering the same property
because the law protects the lawful holder of a
A: None. The rule on indefeasibility of certificates of title registered title over the transfer of a vendor
was applied by the Court in Public Land Patents because, bereft of any transmissible right;
according to the Court, such application is in consonance 3. Purchaser in Bad faith;
with the spirit and intent of homestead laws. 4. Purchases land with a certificate of title
containing a notice of Lis pendens;
The Court held that the pertinent pronouncements in cases 5. Sufficiently strong indications to impel closer
clearly reveal that Sec. 38 of the Land Registration Act, now Inquiry into the location, boundaries and
Sec. 32 of PD 1529 was applied by implication by this Court condition of the lot;
to the patent issued by the Director of Lands duly approved 6. Purchaser had full Knowledge of flaws and
by the Secretary of Natural Resources, under the signature defects in the title; or
of the President of the Philippines in accordance with law. 7. Where a person buys land not from the registered
owner but from whose rights to the land has been
The date of issuance of the patent, therefore, corresponds merely Annotated on the certificate of title.
to the date of the issuance of the decree in ordinary
registration cases because the decree finally awards the Q: Cipriana Delgado was the registered owner of a lot
land applied for registration to the party entitled to it, and situated in Cebu. Meanwhile, she and her husband
the patent issued by the Director of Lands equally and entered into an agreement with Cecilia Tan (buyer) for the
finally grants, awards, and conveys the land applied for to sale of the said property for a consideration of
the applicant. P10.00/sq.m. It was agreed that the buyer shall make
partial payments from time to time and pay the balance
Note: A certificate of title issued under an administrative when the Spouses are ready to execute the deed of sale
proceeding pursuant to a homestead patent is as indefeasible as a and transfer title to her. Cecilia was already occupying a
certificate of title issued under a judicial registration proceeding, portion of the property where she operates a bihon
provided the land covered by said certificate is a disposable public factory while the rest was occupied by tenants which the
land within the contemplation of the Public Land Law. Spouses undertook to clear prior to full payment. After
paying the total amount and being ready to pay the

CIVIL LAW
balance, Cecilia demanded the execution of the deed Q: If the land subject of the dispute was not brought
which was refused. Cecilia, at this point, learned of the under the operation of the Torrens system, will the
sale of the property to the Dys and its subsequent concept of an innocent purchaser for value apply?
mortgage to petitioner Philippine Banking Corporation
(Philbank). Thus, a complaint for annulment of the A: If the land in question was not brought under the
Certificate of title and for specific performance and/or operation of Torrens system because the original certificate
reconveyance with damages was filed against Spouses of title is null and void ab initio, the concept of an innocent
Delgado, the Dys and Philbank. However, Philbank purchaser for value does not apply.
contends that it is a mortgagee in good faith. Is the bank’s
contention correct? Note: Good faith and bad faith is immaterial in case of unregistered
land. One who purchases an unregistered land does so at his peril.
A: Primarily, it bears noting that the doctrine of “mortgagee
in good faith” is based on the rule that all persons dealing Q: In 1979, Nestor applied for and was granted a Free
with property covered by a Torrens Certificate of Title are Patent over a parcel of agricultural land with an area of 30
not required to go beyond what appears on the face of the hectares, located in General Santos City. He presented the
title. This is in deference to the public interest in upholding Free Patent to the Register of Deeds, and he was issued a
the indefeasibility of a certificate of title as evidence of corresponding Original Certificate of Title (OCT) No. 375.
lawful ownership of the land or of any encumbrance Subsequently, Nestor sold the land to Eddie. The deed of
thereon. In the case of banks and other financial sale was submitted to the Register of Deeds and on the
institutions, however, greater care and due diligence are basis thereof, OCT No. 375 was cancelled and Transfer
required since they are imbued with public interest, failing Certificate of Title (TCT) No. 4576 was issued in the name
which renders the mortgagees in bad faith. Thus, before of Eddie. In 1986, the Director of Lands filed a complaint
approving a loan application, it is a standard operating for annulment of OCT No. 375 and TCT No. 4576 on the
practice for these institutions to conduct an ocular ground that Nestor obtained the Free Patent through
inspection of the property offered for mortgage and to fraud. Eddie filed a motion to dismiss on the ground that
verify the genuineness of the title to determine the real he was an innocent purchaser for value and in good faith
owner(s) thereof. The apparent purpose of an ocular and as such, he has acquired a title to the property which
inspection is to protect the “true owner” of the property as is valid, unassailable and indefeasible. Decide the motion.
well as innocent third parties with a right, interest or claim (2000 Bar Question)
thereon from a usurper who may have acquired a
fraudulent certificate of title thereto (Philippine Banking A: Nestor’s motion to dismiss the complaint for annulment
Corporation v. Arturo Dy, et al., G.R. No. 183774. November of OCT No. 375 and TCT No. 4576 should be denied for the
14, 2012). following reasons:
Q: Who is a purchaser in good faith and for value? 1. Eddie cannot claim protection as an innocent
purchaser for value nor can he interpose the
A: A purchaser in good faith and for value is one who buys defense of indefeasibility of his title, because his
property of another, without notice that some other person TCT is rooted on a void title. Under Sec. 91, CA
has a right to, or interest in, such property, and pays a full No. 141, as amended, otherwise known as the
and fair price for the same, at the time of such purchase, or Public Land Act, statements of material facts in
before he has notice of the claim or interest of some other the applications for public land must be under
person in the property. Good faith is the opposite of fraud oath. Sec. 91 of the same act provides that such
and of bad faith, and its non-existence must be established statements shall be considered as essential
by competent proof. Sans such proof, a buyer is deemed to conditions and parts of the concession, title, or
be in good faith and his interest in the subject property will permit issued, any false statement therein, or
not be disturbed. A purchaser of a registered property can omission of facts shall ipso facto produce the
rely on the guarantee afforded by pertinent laws on cancellation of the concession. The patent issued
registration that he can take and hold it free from any and to Nestor in this case is void ab initio not only
all prior liens and claims except those set forth in or because it was obtained by fraud but also
preserved against the certificate of title (Philippine Charity because it covers 30 hectares which is far beyond
Sweepstakes Office (PCSO) vs. New Dagupan Metro Gas the maximum of 24 hectares provided by the free
Corporation, et al.; G.R. No. 173171, July 11, 2012). patent law.
Note: An innocent purchaser for value includes a lessee, 2. The government can seek annulment of the
mortgagee, or other encumbrances for value. original and transfer certificates of title and the
reversion of the land to the State. Eddie's defense
Purchaser in good faith and for value is the same as an innocent is untenable. The protection afforded by the
purchaser for value. Torrens System to an innocent purchaser for
value can be availed of only if the land has been
Good faith consists in an honest intention to abstain from taking
any unconscious advantage of another. titled thru judicial proceedings where the issue of
fraud becomes academic after the lapse of one
(1) year from the issuance of the decree of

2013 GOLDEN NOTES
registration. In public land grants, the action of with said property that someone is claiming an
the government to annul a title fraudulently interest on the same or may have a better right than
obtained does not prescribe such action and will the registered owner thereof. Despite the notice of
not be barred by the transfer of the title to an adverse claim, the Burgos siblings still purchased the
innocent purchaser for value. property in question. Equally significant is the fact that
Delos Reyes was not in possession of the subject
Q: Spouses Angel and Adoracion Ruflor acquired a parcel property when she sold the same to
of land located at Muntinlupa. However, in 1978 Elvira the Burgos siblings. It was Amado Burgos who bought
Delos Reyes forged the signatures of the spouses in Deed the property for his children, the Burgos siblings.
of Sale to make it appear that the disputed property was
sold to her by the former. On the basis of the said deed of In the same vein, Leonarda cannot be categorized as a
sale, Delos Reyes succeeded in obtaining title in her name. purchaser in good faith. Since it was the Rufloes who
hence, the Rufloes filed a complaint for damages against continued to have actual possession of the property,
Delos Reyes alleging that the Deed of Sale was falsified as Leonarda should have investigated the nature of their
their signatures appearing thereon was forged. possession (Adoracion Rosales Rufloe, et al., v.
Leonarda Burgos et al., G.R. No. 143573, Jan. 30, 2009)
During the pendency of the case, Delos Reyes sold the
subject property to the Burgos siblings. Correspondingly, Q: Duran owned two parcels of land which were made
they sold the same to their aunt, Leonarda Burgos. subject of a deed of sale in favor of Fe, her mother. After
However, the sale in favor of Leonarda was not registered. obtaining title in her name, Fe mortgaged the property to
Thus, no title was issued in her name. The subject Erlinda. With Fe’s failure to redeem, Erlinda acquired the
property remained in the name of the Burgos siblings who property at public auction. Duran, claiming that the deed
also continued paying the real estate taxes thereon. of sale is a forgery, sought to recover the property. Erlinda
invokes the defense of being a purchaser in good faith. Is
a. Are the sales of the subject property to Delos Erlinda a purchaser in good faith?
Reyes to the Burgos siblings and the subsequent
sale to Leonarda valid and binding? A: Yes. Erlinda, in good faith, relied on the certificate of title
b. Who is an innocent purchaser for value? in the name of Fe. A fraudulent or forged document of sale
c. Are the respondents considered as innocent may become the root of a valid title if the certificate of title
purchasers in good faith and for value despite has already been transferred from the name of the true
the forged deed of sale of their transferor Delos owner to the name of the forger or the name indicated by
Reyes? the forger. (Duran v. IAC, G.R. No. L-64159, Sept. 10, 1985)
A: Q: Cipriano, one of Pablo’s heirs, executed an extrajudicial

a. It is undisputed that the forged deed of sale was null settlement of a sole heir and
and void and conveyed no title. It is a well-settled confirmation sales, declaring himself as the only heir and
principle that no one can give what one does not have, confirmed the sales made in favor of the spouses Rodolfo.
nemo dat quod non habet. One can sell only what one Consequently, a certificate of title was issued in the name
owns or is authorized to sell, and the buyer can of the spouses, who then sold the property to Guaranteed
acquire no more right than what the seller can transfer Homes. Pablo’s other descendants seek reconveyance of
legally. Due to the forged deed of sale, Delos Reyes the property sold to the spouses alleging that the
acquired no right over the subject property which she extrajudicial settlement was forged. Who is the rightful
could convey to the Burgos siblings. All the owner of the property?
transactions subsequent to the falsified sale between
the spouses Rufloe and Delos Reyes are likewise void, A: Guaranteed Homes is the rightful owner, even assuming
including the sale made by the Burgos siblings to their that the extrajudicial settlement was a forgery. Generally a
aunt, Leonarda. forged or fraudulent deed is a nullity and conveys no title.
b. An innocent purchaser for value is one who buys the There are, however, instances when such a fraudulent
property of another without notice that some other document may become the root of a valid title. One such
person has a right to or interest in it, and who pays a instance is where the certificate of title was already
full and fair price at the time of the purchase or before transferred from the name of the true owner to the forger,
receiving any notice of another person’s claim. The and while it remained that way, the land was subsequently
burden of proving the status of a purchaser in good sold to an innocent purchaser. For then, the vendee had
faith and for value lies upon one who asserts that the right to rely upon what appeared in the certificate.
status. This onus probandi cannot be discharged by
mere invocation of the ordinary presumption of good Also, the extrajudicial settlement was recorded in the
faith. Register of Deeds. Registration in the public registry is
c. The evidence shows that the Rufloes caused a notice notice to the whole world. (Guaranteed Homes, Inc. v. Heirs
of adverse claim to be annotated on the title of Delos of Valdez, Heirs of Tugade, Heirs of Gatmin, Hilaria Cobero
Reyes as early as November 5, 1979. The annotation of and Alfredo and Siony Tepol, G.R. No. 171531, Jan. 30,
an adverse claim is a measure designed to protect the 2009)
interest of a person over a piece of real property, and
serves as a notice and warning to third parties dealing

CIVIL LAW
Q: Spouses X and Y mortgaged a piece of registered land released the land of the public domain as alienable and
to A, delivering as well the OCT to the latter, but they disposable, and that the land subject of the application for
continued to possess and cultivate the land, giving 1/2 of registration falls within the approved area per verification
each harvest to A in partial payment of their loan to the through survey by the PENRO or CENRO. In addition, the
latter. A however, without the knowledge of X and Y, applicant for land registration must present a copy of the
forged a deed of sale of the aforesaid land in favor of original classification approved by the DENR Secretary and
himself, got a TCT in his name, and then sold the land to B. certified as a true copy by the legal custodian of the official
records.
B bought the land relying on A's title, and thereafter got a
TCT in his name. It was only then that the spouses X and Y Although the survey and certification were done declaring
learned that their land had been titled in B's name. May certain portions of the public domain situated in Cebu City
said spouses file an action for reconveyance of the land in as alienable and disposable, an actual copy of such
question against B? Reason. (1999 Bar Question) classification, certified as true by the legal custodian of the
official records, was not presented in evidence.
A: The action of X and Y against B for reconveyance of the Unfortunately, respondents were not able to discharge the
land will not prosper because B has acquired a clean title to burden of overcoming the presumption that the land they
the property being an innocent purchaser for value. sought to be registered forms part of the public domain
(Republic of the Philippines vs. Gloria Jaralve (deceased),
A forged deed is an absolute nullity and conveys no title. substituted by Alan Jess Jaralve-Document, Jr., et al. G.R.
The fact that the forged deed was registered and a No. 175177. October 24, 2012).
certificate of title was issued in his name, did not operate to
vest upon A ownership over the property of X and Y. The Q: Discuss the application of the Regalian doctrine.
registration of the forged deed will not cure the infirmity.
However, once the title to the land is registered in the A: All lands not otherwise appearing to be clearly within
name of the forger and title to the land thereafter falls private ownership are presumed to belong to the State.
into the hands of an innocent purchaser for value, the Incontrovertible evidence must be shown that the land is
latter acquires a clean title thereto. A buyer of a registered alienable or disposable in order to overcome such
land is not required to explore beyond what the record in presumption.
the registry indicates on its face in quest for any hidden
defect or inchoate right which may subsequently defeat his Note: It does not negate native title to lands held in private
right thereto. This is the "mirror principle" of the Torrens ownership since time immemorial (Cruz v. Secretary of
system which makes it possible for a forged deed to be the Environment and Natural Resources, G.R. No. 135385, Dec. 6,
2000).
root of a good title.
Q: What is a native title?
Besides, it appears that spouses X and Y are guilty of
contributory negligence when they delivered the OCT to
A: it refers to a pre- conquest rights to lands and domains
the mortgagee without annotating the mortgage thereon.
which, as far back as memory reaches, have been held
Between them and the innocent purchaser for value, they
under a claim of private ownership by Indigenous Cultural
should bear the loss.
Communities of Indigenous Peoples, have never been
public lands and are thus indisputably presumed to have
REGALIAN DOCTRINE
been held that way before Spanish conquest.
Q: What is Regalian doctrine (jura regalia)?
Q: What is time immemorial possession?
A: A time-honored constitutional precept that all lands of
A: It refers to a period of time as far back as memory can
the public domain belong to the State, and that the State is
go, certain Indigenous Cultural Communities of Indigenous
the source of any asserted right to ownership in land, and
Peoples are known to have occupied, possessed in the
charged with the conservation of such patrimony.
concept of owner, and utilized a defined territory devolved
to them, by operation of customary law or inherited from
Under the Regalian doctrine, land that has not been
their ancestors, in accordance with their customs and
acquired from the government, either by purchase, grant,
tradition.
or any other mode recognized by law, belongs to the State
as part of the public domain. Thus, it is indispensable for a
Q: Socorro Orcullo was a grantee of a Free Patent for a
person claiming title to a public land to show that his title
parcel of land in Cebu. Subsequently, the subject lot was
was acquired through such means. To prove that the
sold to SAAD Agro-Industries, Inc. by one of Orculoo’s
subject property is alienable and disposable land of the
heirs. Yet, in 199, the Solicitor General filed a complaint
public domain, respondents presented the Community
for the annulment of the title and reversion of the said lot
Environment and Natural Resourtces Office Certificate
on the ground that the issuance of the free patent and
(CENRO). However, a CENRO or PENRO Certification is not
title was irregular and erroneous, following the discovery
enough to certify that a land is alienable and disposable.
that the lot is allegedly part of the timberland and forest
The applicant for land registration must prove that the
reserve. Decide on the case.
DENR Secretary had approved the land classification and

2013 GOLDEN NOTES
Note: Under R.A. No. 4726, foreign nationals can own Philippine
A: Under the Regalian doctrine or jura regalia, all lands of real estate through the purchase of condominium units or
the public domain belong to the State, and the State is the townhouses. It expressly allows foreigners to acquire condominium
units and shares in condominium corporations up to not more than
source of any asserted right to ownership in land and
40% of the total and outstanding capital stock of a Filipino owned
charged with the conservation of such patrimony. In or controlled corporation. The land is owned by the condominium
instances where a parcel of land considered to be corporation and the unit owner is simply a member in this
inalienable land of the public domain is found under private condominium corporation.
ownership, the Government is allowed by law to file an
action for reversion, which is an action where the ultimate Q: Spouses Pinoy and Pinay, both natural-born Filipino
relief sought is to revert the land to the government under citizens, purchased property in the Philippines. However,
the Regalian doctrine. they sought its registration when they were already
naturalized as Canadian citizens. Should the registration
Nevertheless, in applying this doctrine, we must not lose be denied on the ground that they cannot do so being
sight of the fact that in every claim or right by the foreign nationals?
Government against one of its citizens, the paramount
considerations of fairness and due process must be A: No. For the purpose of transfer and/or acquisition of a
observed. Respondent in this case failed to show that the parcel of residential land, it is not significant whether they
subject lot is part of timberland or forest reserve it are no longer Filipino citizens at the time they purchased or
adverted to. In the face of the uncontroverted status of registered the parcels of land in question. What is
Free Patent No. 473408 and OCT No. 0-6667 as valid and important is that they were formerly natural-born citizens
regular issuances, respondent’s insistence on the of the Philippines, and as transferees of a private land, they
classification of the lot as part of the forest reserve must be could apply for registration in accordance with the mandate
rejected (Saad Agro-Industries, Inc. v. Republic of the of Section 8, Article XII of the Constitution which states that
Philippines, G.R. No. 152570, Sept. 27, 2006). Notwithstanding the provisions of Section 7 of this
Article, a natural-born citizen of the Philippines who has
Q: Discuss the coordination of the 3 departments in their lost his Philippine citizenship may be a transferee of
goals in achieving the objectives in the conservation and private lands, subject to limitations provided by law
utilization of natural resources (Republic v. CA and Lapina, G.R. No. 108998, Aug. 24, 1994).
A: The legislature has the authority to implement the Q: Joe, an alien, invalidly acquired a parcel of land in the
constitutional provision classifying the lands of the public Philippines. He subsequently transferred it to Jose, a
domain; the executive, administers our public lands Filipino citizen. What is the status of the transfer?
pursuant to their duty “to ensure that laws be faithfully
executed” and in accordance with the policy prescribed; A: If a land is invalidly transferred to an alien who
lastly, the judiciary steps into the picture if the rules laid subsequently becomes a Filipino citizen or transfers it to a
down by the legislature are challenged or if it is claimed Filipino, the flaw in the original transaction is considered
that they are not being correctly observed by the executive cured and the title of the transferee is rendered valid. Since
branch. the ban on aliens is intended to preserve the nation’s land
for future generations of Filipinos, that aim is achieved by
CITIZENSHIP REQUIREMENT making lawful the acquisition of real estate by aliens who
became Filipino citizens by naturalization or those transfers
Q: Who may acquire private lands? made by aliens to Filipino citizens. As the property in
dispute is already in the hands of a qualified person, a
A: Filipino citizen, there would be no more public policy to be
1. Filipino citizens; protected. The objective of the constitutional provision to
2. Filipino corporations and associations as defined keep our lands in Filipino hands has been achieved
in Sec. 2, Article XII of the Constitution and by (Borromeo v. Descallar, G.R. No. 159310, Feb. 24, 2009)
exceptionl;
3. Aliens, but only by hereditary succession; Q: If Joe had not transferred it to Jose but he, himself, was
4. A natural-born citizen of the Philippines who has later naturalized as a Filipino citizen, will his acquisition
lost citizenship under the terms and Section 8. thereof remain invalid?
Note: Filipino citizens can both acquire or otherwise hold lands of A: No. If a land is invalidly transferred to an alien who
public domain. subsequently becomes a Filipino citizen, the flaw in the
original transaction is also considered cured and the title of
Q: Can an alien acquire a private land in the Philippines? the transferee is rendered valid (Borromeo v. Descallar, G.R.
No. 159310, Feb. 24, 2009).
A: GR: An alien cannot acquire private lands.
XPN: Acquisition by aliens is allowed when:

It is thru hereditary succession.

CIVIL LAW
Q: What is the maximum area that may be acquired by a

natural born citizen who has lost his Philippine Patrimonial property of the State (Sec. 3, Art. XII,
citizenship? 1987 Constitution)
1. Lease (cannot own land of the public
A: A natural born citizen who has legal capacity to enter domain) for 25 years renewable for
into a contract under Philippine laws may be a transferee of another 25 years
a private land up to a maximum area of 5,000 square 2. Limited to 1,000 hectares
meters in the case of urban land or 3 hectares in the case of 3. Applies to both Filipinos and foreign
rural land to be used by him for business or other purposes. corporations.
In the case of married couples, one of them may avail of the
privilege herein granted, but if both shall avail of the same, Q: May a corporation apply for registration of a parcel of
the total area acquired shall not exceed the maximum area land?
fixed (Sec. 10, R.A. 7042; Agcaoili, Reviewer in Property
Registration and Related Proceedings, 2008 ed.). A: Yes, through lease not exceeding 1,000 hectares. Such
lease shall not exceed twenty five (25) years and renewable
Q: Who may not file an application for registration? for not more than twenty five (25) years. (Sec. 3, Art. XII,
1987 Constitution)
A: PAMP
1. A Public land sales applicant insofar as the land Note: Determinative of this issue is the character of the parcels of
covered by his sales application is concerned land – whether they were still public or already private – when the
registration proceedings were commenced. If they are already
private lands, the constitutional prohibition against acquisitions
Reason: He acknowledged that he is not the
by a private corporation would not apply.
owner of the land and that the same is a public
land.
ORIGINAL REGISTRATION
2. An Antichretic creditor cannot acquire by
Q: What laws govern land registration?
prescription the land surrendered to him by the
debtor.
A:
1. Property Registration Decree (PD 1529, as amended)
Reason: His possession is not in the concept of an
owner but mere holder placed in possession of Note: Amended and superseded C.A. No. 496.
the land by its owners.
2. Cadastral Act (Act 2259, as amended)
3. A Mortgagee or his successor in interest to the 3. Public Land Act (CA No. 141,as amended)
mortgage, notwithstanding the lapse of the 4. Emancipation Decree (PD 27, as amended)
period for the mortgagor to pay the loan secured 5. Comprehensive Agrarian Reform Law of 1988 (R.A.
to redeem it 6657)
6. Indigenous Peoples Rights Act (R.A. 8371)
Reason: Such act would amount to a pactum
commissorium, which is against good morals and Q: What are the purposes of land registration?
public policy.
A: To: QUIP-CC
4. A person or entity whose claim of ownership to 1. Quiet title to the land and to stop forever any
land had been Previously denied in a question as t ao the legality of said title;
reivindicatory action. 2. relieve land of Unknown claims;
3. guarantee the Integrity of land titles and to
Q: May a corporation own lands? protect their indefeasibility once the claim of
ownership is established and recognized;
A: It depends. 4. give every registered owner complete Peace of
Corporation sole can acquire by purchase a parcel of mind;
private agricultural land without violating the 5. issue a Certificate of title to the owner which shall
constitutional prohibition since it has no nationality. be the best evidence of his ownership of the land;
and
Corporation: 6. avoid Conflicts of title in real estate and to
Private Lands facilitate transactions.
1. At least 60% Filipino (Sec. 7, Art. XII,
1987 Constitution) Q: What is original registration?
2. Restricted as to extent reasonably
necessary to enable it to carry out A: It is a proceeding brought before the MTC where there is
purpose for which it was created no controversy or opposition, or contested lots where the
3. If engaged in agriculture, it is restricted value of which does not exceed P100, 000.00 (Sec. 4, R.A.
to 1,024 hectares.

2013 GOLDEN NOTES
7691) or in the RTC (as a land registration court) when the domain under a bona fide claim of ownership since
value exceeds P100,000 to determine title or ownership of June 12,1945 or earlier (OCENCO);
land on the basis of an application for registration or
answer/opposition by a claimant in a cadastral registration. 2. Those who have acquired ownership of private lands
by prescription under provisions of existing laws;
Q: What are the kinds of original registration? Distinguish.
GR: Properties of public dominion cannot be acquired
A: by prescription.
ADMINISTRATIVE/
JUDICIAL/ VOLUNTARY/
INVOLUNTARY/ XPN: Where the law itself so provides. Thus,
ORDINARY
CADASTRAL patrimonial property of the State may be the subject
of acquisition through prescription.
Filing with the proper court Compulsory registration
an application by the initiated by the Under ordinary acquisitive prescription, a person
private individual himself government, to adjudicate acquires ownership of a patrimonial property through
ownership of land and possession for at least 10 years, in good faith and with
under PD 1529 (Property involuntary on the part of just title. Under extraordinary acquisitive prescription,
Registration Decree) the claimants, but they are a person’s uninterrupted adverse possession of
compelled to substantiate patrimonial property for at least 30 years, regardless
under Sec. 48 of CA 141 their claim or interest of good faith or just title, ripens into ownership.
(Public Land Act) through an answer.
Note: Good faith of the possessor consists in the reasonable
belief that the person from whom he received the thing was
WHO MAY APPLY the owner thereof, and could transmit his ownership while
just title exists when the adverse claimant came into the
possession of the property though one of the modes
UNDER P.D. 1529
recognized by law for acquisition of ownership or other real
rights, but the grantor was not the owner or could not
Q: Which lands are registrable? transmit any right (Arts. 1127 and 1129, NCC)
A: Note: For one to invoke the provisions of Section 14(2) and

1. Alienable and disposable public agricultural lands; and set up acquisitive prescription against the State, it is
2. Private lands. primordial that the status of the property as patrimonial be
first established. Furthermore, the period of possession
preceding the classification of the property as patrimonial
Q: What are the general incidents of registered land?
cannot be considered in determining the completion of the
prescriptive period.
A: Registered land or the owners are not relieved from the
following: Adverse, continuous, open, public possession in the concept
1. any rights incident to the relation of husband and of an owner is a conclusion of law and the burden to prove it
wife, landlord and tenant; by clear, positive and convincing evidence is on the applicant.
2. liability to attachment or levy on execution; A claim of ownership will not proper on the basis of tax
3. liability to any lien of any description established declarations if unaccompanied by proof of actual possession.
by law on the land and buildings thereon, or in
The counting of the thirty (30)-year prescriptive period for
the interest of the owner in such land or building; purposes of acquiring ownership of a public land under
4. any right or liability that may arise due to change Section 14(2) can only start from the issuance of DARCO
of the law of descent; Conversion Order. Before the property was declared
5. the rights of partition between co-owners; patrimonial by virtue of such conversion order, it cannot be
6. the right of government to take the land by acquired by prescription. (Jean Tan, et al. vs. Republic of the
eminent domain; Philippines; G.R. No. 193443, April 16, 2012.)
7. liability to be recovered by an assignee in
insolvency or trustee or bankruptcy under the 3. Those who have acquired ownership of private lands
laws relative to preferences; and or abandoned river beds by right of accession or
8. any other rights or liabilities created by law and accretion under the existing laws.
applicable to unregistered land.
The Alluvion must be the exclusive work of nature.
Q: Who may apply for registration in ordinary registration This excludes all deposits caused by human
proceedings? intervention. Accretion does not automatically
become registered land. Where alluvial increment is
A: not registered, it may be acquired by third persons
1. Those who by themselves or through their through prescription. In order that the accretion may
predecessors-in-interest have been in open, be protected by the rule on imprescribility, it is
continuous, exclusive, and notorious possession and necessary that the same be brought under the
occupation of alienable and disposable lands of public operation of the Torrens system.

CIVIL LAW
4. Those who have acquired ownership of land by any except through lease does not apply for land was no longer
other manner provided for by law. public land but private property.
Where the land is owned in common, all the co-owners Q: Noynoy, Erap, Manny and Gibo are co-owners of a
shall file the application jointly. (Sec. 14, PD 1529) parcel of land. May Manny seek registration in his name of
the land in its entirety?
Q: Who may apply for registration of a land subject to a:
A: Since a co-owner cannot be considered a true owner of a
1. Pacto de retro sale? specific portion until division or partition is effected, he
cannot file an application for registration of the whole area
GR: Vendor a retro may apply for registration. without joining the co-owners as applicants.
XPN: Vendee a retro should the period for Q: What are the requisites for the filing of an application
redemption expire during pendency of registration under Sec. 14(1) of PD. No. 1529?
proceedings and ownership to property is
consolidated in vendee a retro. A:
1. That the property is an agricultural land of public
2. Trust? domain;
2. That it has been classified by a positive act of
GR: Trustee may apply for registration. government as alienable and disposable (A and D);
3. That the applicant, by himself or through his
XPN: Unless prohibited by the instrument creating predecessors-in-interest has been in open, continuous,
the trust. exclusive and notorious possession and occupation of
the land in the concept of owner (OCENCO); and
Note: Trusteeship or trust is a fiduciary relationship with 4. That such possession and occupation is under a bona
respect to property which involves the existence of fide claim of ownership since June 12, 1945 or earlier.
equitable duties imposed upon the holder of the title to
the property to deal with it for the benefit of another Note: There must be an express declaration by the State that the
public dominion property is no longer intended for public service
3. Reserva troncal? or the development of the national wealth or that the property has
been converted into patrimonial. Without such express
declaration, the property, even if classified as alienable or
Reservista has the right to apply for registration but disposable, remains property of the public dominion, pursuant to
the reservable character of the property will be Article 420(2), and thus incapable of acquisition by prescription. It
annotated in the title. is only when such alienable and disposable lands are expressly
declared by the State to be no longer intended for public service or
Note: In reserva troncal the ascendant who inherits from his for the development of the national wealth that the period of
descendant any property which the latter may have acquired by acquisitive prescription can begin to run. Such declaration shall be
gratuitous title from another ascendant, or a brother or sister, is in the form of a law duly enacted by Congress or a Presidential
obliged to reserve such property as he may have acquired by Proclamation in cases where the President is duly authorized
operation of law for the benefit of relatives who are within the by law.
third degree and who belong to the line from which said
property came.
Q: In 1998, Iglesia ni Cristo filed its application for
Registration of Title before the MCTC in Paoay-Currimao.
Q: May private corporations hold alienable lands of public
Yet, the Republic filed an opposition to INC’s application.
domain?
The cadastral court held that the essential elements for
judicial confirmation of an imperfect title over the subject
A: No. The word “persons” refers to natural persons who
lot have been complied with. The CA also held that the
are citizens of the Philippines. Juridical or artificial persons
INC has been in continuous, open, and peaceful
are excluded. Sec. 3, Art. XII of the 1987 Constitution
possession and occupation of the lot for more than 40
prohibits private corporations or associations from holding
years. May a judicial confirmation of imperfect title
alienable lands of the public domain except by lease.
prosper when the subject property has been declared as
alienable only after June 12, 1945?
Private corporations or associations may not hold such
alienbale lands of public domain except by lease, for a
A: In Naguit, the Court held a less stringent requirement in
period not exceeding twenty-five years, renewable for not
the application of Sec. 14(1) of PD 1529 in that the
more than twenty-five years, and not to exceed one
reckoning for the period of possession is the actual
thousand hectares in area. But where at the time the
possession of the property and it is sufficient for the
corporation acquired land, its predecessor-in-interest had
property sought to be registered to be already alienable
been in possession and occupation thereof in the manner
and disposable at the time of the application for
and for the period prescribed by law as to entitle him to
registration of title is filed.
registration in his name, then the proscription against
corporation acquiring alienable lands of the public domain

2013 GOLDEN NOTES
The possession of INC has been established not only from 2. Title to Accretion in river banks;
1952 and 1959 when it purchased the respective halves of 3. Reclamation; or
the subject lot, but is also tacked on to the possession of its 4. Title by Escheat (Rule 91, Rules of Court)
predecessors-in-interest. These possessions and
occupation––from Sabuco, including those of his parents, PATENTS UNDER THE PUBLIC LAND ACT
to INC; and from Sabuco to Badanguio to INC––had been in
the concept of owners: open, continuous, exclusive, and Q: What are the different kinds of patents under the
notorious possession and occupation under a bona Public Land Act? To whom are they granted and what are
fide claim of acquisition of property. These had not been the requirements for acquisition of such?
disturbed as attested to by respondent’s witnesses
(Republic of the Philippines v. Iglesia ni Cristo, G.R. No. A:
180067, June 30, 2009). TO WHOM GRANTED REQUIREMENTS
Homestead Patent
Q: When is possession adverse? Does not own more than 24
hectares of land in the
A: Possession of land is adverse when it is open and Philippines or has not had
notorious. It is open when it is patent, visible, and apparent the benefit of any
and it is notorious when it is so conspicuous that it is gratuitous allotment of
generally known and talked of by public or the people in To any Filipino citizen over more than 24 hectares
the neighborhood. the age of 18 years or head Must have resided
of a family continuously for at least 1
Q: Is adverse possession similar with the possession year in the municipality
required in acquisitive prescription? where the land is situated
Must have cultivated at
A: Yes. Possession, to constitute the foundation of a least 1/5 of the land
prescriptive right, must be possession under a claim of title applied for
or it must be adverse (Cuaycong v. Benedicto, G.R. No. Free Patent
9989, Mar. 13, 1918) Does not own more than 12
hectares of land
Q: An Emancipation Patent OCT was issued in Remy’s Has continuously occupied
favor. However, Madarieta filed a complaint for annulment To any natural born citizen and cultivated, either by
and cancellation of the OCT against Remy before the of the Philippines himself or his predecessors-
DARAB, alleging that the Department of Agrarian Reform in-interest tract/s of
mistakenly included her husband’s lot as part of Luspo’s agricultural public land
property where Remy’s house was constructed. From the subject to disposition
facts of the case, what is the nature of Remy’s possession Sales Patent
of the subject land? To have at least 1/5 of the
land broken and cultivated
A: Remy possessed the subject land in the concept of an Citizens of the Philippines
within 5 years from the
owner. No objection was interposed against his possession of lawful age or such
date of the award
of the subject land and Remy did not employ fraud in the citizens not of lawful age
Shall have established
issuance of the emancipation patent and title. In fact, who is head of a family may
actual occupancy,
Madarieta faulted the DAR, not him (Rementizo v. Heirs of purchase public agricultural
cultivation and
Vda. De Madarieta, G.R. No. 170318, Jan. 15, 2009). land of not more than 12
improvement of at least
hectares
1/5 of the land until the
Q: Against whom can acquisition of ownership by date of such final payment
prescription not be used? Special Patents
Sec. of the DILG shall certify
A: Acquisition of ownership by prescription is unavailing that the majority of the
against the registered owner and his hereditary successors To non-Christian Filipinos
non-Christian inhabitants of
because under Section 47 of the Property Registration under Sec. 84 of the Public
any given reservation have
Decree, registered lands are not subject to prescription. No Land Act
advanced sufficiently in
title to registered land in derogation of the title of the civilization
registered owner shall be acquired by prescription or
adverse possession (Agcaoili, Reviewer in property
Q: How are patents acquired?
registration and related proceedings, p. 341, 2008 ed)
A: By:
ACQUISITION OF TITLE BY LAW
1. Succession (testate or intestate)
a. By descent – title is acquired when an heir
Q: How may land titles be acquired by law?
succeeds the deceased owner whether by testate
or intestate.
A:
1. Free Patents based on Public Land Act;

CIVIL LAW
b. By devise – person acquires land from one who 2. No alienation, transfer or conveyance of any
may or may not be a relative, if he is named in the homestead after five (5) years and before twenty-five
deceased’s will as devisee for such property. (25) years after the issuance of title shall be valid
2. Prescription – Possession of land for required number without the approval of the Secretary of DENR. (C.A.
of years and assertion of ownership through an No. 141 as amended by C.A. No. 458)
uninterrupted actual possession of property within the 3. It cannot be alienated within five (5) years after
period of time prescribed by law (Arts. 712, 1134, approval of such patent application.
1137, NCC). 4. It cannot be liable for the satisfaction of debt within
five (5) years after the approval of such patent
LAND PATENTS application.
5. It is subject to repurchase of the heirs within five (5)
Q: How are public lands suitable for agricultural purposes years after alienation when such is already allowed.
disposed of? 6. No private corporation, partnership or association may
lease such land unless it is solely for commercial,
A: Public Lands suitable for agricultural purposes are industrial, educational, religious or charitable
disposed as follows: purposes, or right of way (subject to the consent of the
1. homestead settlement; grantee and the approval of the Secretary of the
2. sale; DENR). [The Public Land Act (C.A. No. 141)].
3. lease;
4. confirmation of imperfect title or incomplete Q: What are the exceptions to the rule on restrictions on
titles either by judicial or administrative alienation or encumbrance of lands titled pursuant to
legalization; or patents?
5. free title.
A:
When a homesteader has complied with all the terms and 1. Actions for partition because it is not a conveyance,
conditions which entitle him to a patent for a particular 2. Alienations or encumbrances made in favor of the
tract of public land, he acquires a vested interest therein, government.
enough to be regarded as the equitable owner thereof.
Where the right to a patent to land has once become Q: What is the proper action in cases of improper or illegal
vested in a purchaser of public lands, it is equivalent to a issuance of patents?
patent actually issued. The execution and delivery of
patent, after the right to a particular parcel of land has A: Reversion suits, the objective of which is the cancellation
become complete, are the mere ministerial acts of the of the certificate of title and the consequent reversions of
officer charged with that duty. Even without a patent, a the land covered thereby to the State.
perfected homestead is a property right in the fullest sense,
unaffected by the fact that the paramount title to the land Q: Gerardo acquired title over 2 parcels of land located in
is still in the government. Such land may be conveyed or Cagayan covered by OCT No. P-311 through the grant of
inherited. Homestead Patent No. V-6269 in his favour on January 12,
1951. Upon Gherardo’s death however, respondents
As evidence of ownership of land, a homestead patent discovered that OCT No. P-311 had been cancelled as the
prevails over a land tax declaration. (Jose Medina v. Court same has been sold to Juan Binayug. Thus, respondents
of Appeals & The Heirs of the Late Abundio Castaňares, G.R. filed a complaint “for declaration of nullity of title,
No. 137582, August 29, 2012.) annulment of instrument, and declaration of ownership
with damages against the petitioners. According to them,
Note: When a free patent title is issued to an applicant and the sea the purported sale between Gerardo and Juan was
water moves toward the estate of the title holder, the invaded prohibited under CA No. 141 and that the sale violated the
property becomes part of the foreshore land. The land under the 5-year prohibitory period under Sec. 118 of the Public
Torrens system reverts to the public domain and the title is
Land Act. Is the contention of the respondents correct?
annulled.
After a free patent application is granted and the corresponding A: Yes. To reiterate, Section 118 of the Public Land Act, as
certificate of title is issued, the land ceased to be part of the public amended, reads that “[e]xcept in favor of the Government
domain and becomes private property over which the Director of or any of its branches, units, or institutions, or legally
Lands had neither control nor jurisdiction. constituted banking corporations, lands acquired under
free patent or homestead provisions shall not be subject to
Q: What are the restrictions on alienation or encumbrance encumbrance or alienation from the date of the approval of
of lands titled pursuant to patents? the application and for a term of five years from and after
the date of issuance of the patent or grant x x x.” The
A: provisions of law are clear and explicit. A contract which
1. Lands acquired under free patent or homestead patent purports to alienate, transfer, convey, or encumber any
is prohibited from being alienated, except if in favor of homestead within the prohibitory period of five years from
the government, 5 years from and after the issuance the date of the issuance of the patent is void from its
of the patent or grant. execution. In a number of cases, this Court has held that

2013 GOLDEN NOTES
such provision is mandatory (Binayug v. Ugaddan, et al. GR Once a patent is registered and the corresponding
No. 181623, Dec. 5, 2012). certificate of title is issued, the land covered thereby ceases
to be part of public domain and becomes private property,
Q: Respondents are the grantees of agricultural public and the Torrens Title issued pursuant to the patent
lands in General Santos City through Homestead and Fee becomes indefeasible upon the expiration of one year from
patents sometime in 1986 and 1991. Negotiations were the date of such issuance.
made by Petitioner sometime in 1995 and eventually a
Deed of Conditional Sale of the properties in question was However, a title emanating from a free patent which was
executed in favour of Petitioner Filinvest Land Inc. A few secured through fraud does not become indefeasible,
days after the execution of the aforestated deeds, precisely because the patent from whence the title sprung
respondents came to know that the sale was null and void is itself void and of no effect whatsoever. Well-settled is the
because it was done within the period they were not doctrine that the registration of a patent under the Torrens
allowed to do so and that the sale did not have the System does not by itself vest title; it merely confirms the
approval of the secretary of DENR. Thus, they filed a case registrant’s already existing one. Verily, registration under
for declaration of nullity of the deeds of conditional and the Torrens System is not a mode of acquiring ownership.
absolute sale of the questioned properties. Will the action
prosper? Nonetheless, a free patent that was fraudulently acquired,
and the certificate of title issued pursuant to the same, may
A: The five-year prohibitory period following the issuance only be assailed by the government in an action for
of the homestead patent is provided under Section 118 of reversion pursuant to Section 101 of the Public Land Act.
the Public Land Act. It bears stressing that the law was Since it was the Director of Lands who processed and
enacted to give the homesteader or patentee every chance approved the applications of the appellants and who
to preserve for himself and his family the land that the ordered the issuance of the corresponding free patents in
State had gratuitously given to him as a reward for his their favor in his capacity as administrator of the disposable
labour in cleaning and cultivating it. lands of the public domain, the action for annulment should
have been initiated by him, or at least with his prior
In the present case, the negotiations for the purchase of authority and consent. (Nancy T. Lorzano vs. Juan Tabayag,
the properties covered by the patents issued in 1991 were Jr., G.R. No. 189647. February 6, 2012.)
made in 1995 and, eventually, an undated Deed of
Conditional Sale was executed. Petitioner raises the issue ACCRETION
whether by a deed of conditional sale there was “alienation
or encumbrance” within the contemplation of the law. The Q: Differentiate accretion from alluvium.
prohibition does not distinguish between consummated
and executory sale. The conditional sale entered into by the A: Alluvium is the soil imperceptibly and gradually
parties is still a conveyance of the homestead patent; that deposited on lands adjoining the banks of rivers caused by
the formal deed of sale was executed after the expiration of the current of the water.
the staid period did not and could not legalize a contract
that was void from its inception. Nevertheless, petitioner Accretion is the process whereby the soil is so deposited.
does not err in seeking the return of the down payment as
a consequence of the sale having been declared void. The Q: What are the requisites of accretion?
rule is settled that the declaration of nullity of a contract
which is void ab initio operates to restore things to the A:
state and condition in which they were found before the 1. The deposit of soil or sediment be gradual and
execution thereof. (Filinvest Land, Inc., Efren C. Gutierrer vs. imperceptible;
Abdul Backy, Abehera, Baiya, Edris, et al. G.R. No. 174715. 2. It is the result of the current of the waters (river/sea);
October 11, 2012) and
3. The land where accretion takes place is adjacent to the
Q: To whom may free patent be issed? banks of rivers or the sea coast.
A: A Free Patent may be issued where the applicant is: Note: In Republic v. CA and Tancinco, the court found that the
alleged alluvial deposits were artificial and manmade and not the
a. a natural-born citizen of the Philippines; exclusive result fo the current of the Merycauayan and Bocaue
rivers. The deposits came into being not because of the sole effect
b. is not the owner of more than twelve (12)
of the current of the rivers but as a result of the transfer of the dike
hectares of land; towards the river and encroaching upon it (G.R. No. L-61647, Oct.
c. has continuously occupied and cultivated, either 12, 1984).
by himself or through his predecessors-in-
interest, a tract or tracts of agricultural public Q: What is the rule on ownership of abandoned river beds
land subject to disposition, for at least 30 years by right of accession?
prior to the effectivity of Republic Act No. 6940;
and A: Under Article 461 of the Civil Code, river beds which are
d. has paid the real taxes thereon while the same abandoned through the natural change in the course of the
has not been occupied by any person. waters ipso facto belong to the owners whose lands are
occupied by the new course in proportion to the area lost.

CIVIL LAW
However, the owners of the lands adjoining the old bed recedes, soils, rocks and other materials are deposited on
shall have the right to acquire the same by paying the value Jessica’s and Jenny’s properties. This pattern of the river
thereof, which value shall not exceed the value of the area swelling, receding and depositing soil and other materials
occupied by the new bed. being deposited on the neighbors’ properties have gone
on for many years. Knowing this pattern, Jessica
Q: What is the rule on ownership by right of accretion constructed a concrete barrier about 2 meters from her
along river banks? property line and extending towards the river, so that
when the water recedes, soil and other materials are
A: Article 457 of the Civil Code provides that to the owners trapped within this barrier. After several years, the area
of lands adjoining the banks of rivers belong the accretion between Jessica’s property line to the concrete barrier
which they gradually receive from the effects of the current was completely filled with soil, effectively increasing
of the waters. Jessica’s property by 2 meters. Jenny’s property, where no
barrier was constructed, also increased by one meter
Q: What is the rule on accretion along the banks of creeks, along the side of the river.
streams and lakes?
Can Jessica and Jenny legally claim ownership over the
A: Alluvial deposits along the banks of creeks, streams and additional 2 meters and one meter, respectively, of land
lakes do not form part of the public domain as the alluvial deposited along their properties?
property automatically belongs to the owner of the estate
to which it may have been added. That the owner of the A: Jenny can legally claim ownership of the lands by right of
adjoining property must register the same under the accession (accretion) under Article 457 of the Civil Code.
Torrens system otherwise, the alluvial property may be The lands came into being over the years through the
subject to acquisition through prescription by third persons. gradual deposition of soil and silt by the natural action of
the waters of the river.
Q: What is the rule on accretion on the sea bank?
Jessica cannot claim the two meter-wide strip of land added
A: Still of public domain, and is not available for private to her land. Jessica constructed the cement barrier two
ownership until formally declared by the government to be meters in front of her property towards the river not to
no longer needed for public use (Republic v. Amanda Vda. protect her land from the destructive forces of the water
De Castillo, G.R. No. L-69002 June 30, 1988). but to trap the alluvium. In order that the riparian owner
may be entitled to the alluvium the deposition must occur
Q: If the area of a non-registrable land is increased due to naturally without the intervention of the riparian owner
accretion, may the alluvial deposits be subjected to (Republic v. CA 132 SCRA 514 [1984]).
private ownership?
Q: If Jessica’s and Jenny’s properties are registered, will
A: No. Non-registrable lands (property of public dominion) the benefit of such registration extend to the increased
are outside the commerce of man, they are not subject to area of their properties?
private appropriation.
A: No, the registration of Jessica’s and Jenny’s adjoining
Q: If the land, the area of which is increased by accretion, property does not automatically extend to the accretions.
has already been registered, is there still a need to register They have to bring their lands under the operation of the
the alluvion? Torrens system of land registration following the procedure
prescribed in P.D. No. 1529.
A: Yes. Accretion does not automatically become
registered. It needs a new registration. Q: Assume the two properties are on a cliff adjoining the
shore of Laguna Lake. Jessica and Jenny had a hotel built
Q: If the land area has been diminished due to accretion, on the properties. They had the earth and rocks excavated
may the riparian owner claim protection against such from the properties dumped on the adjoining shore, giving
diminution based on the fact of registration of his land? rise to a new patch of dry land. Can they validly lay claim
to the patch of land? (2008 Bar Question)
A: Registration does not protect the riparian owner against
diminution of land through accretion. Accretions become A: Jessica and Jenny cannot validly lay claim to the price of
the property of the owners of the banks and are natural dry land that resulted from the dumping of rocks and earth
incidents to land bordering on running streams and the materials excavated from their properties because it is a
provisions of the Civil Code thereon are not affected by the reclamation without authority. The land is part of the
Land Registration Act (now Property Registration Decree) lakeshore, if not the lakebed, which is inalienable land of
(Republic v. CA and Tancinco, G.R. No. L-61647, Oct. 12, the public domain.
1984).
Q: Alleging continuous and adverse possession of more
Q: The properties of Jessica and Jenny, who are neighbors, than 10 years, respondent Arcadio Santos III applied for
lie along the banks of the Marikina River. At certain times registration of Lot 4998-B located in Parañaque City. It was
of the year, the river would swell and as the water bounded in the Northeast by Lot 4079 in the southeast by

2013 GOLDEN NOTES
the Parañaque River. Arcadio alleged that the property UNDER C.A. 141
has been formed through accretion and had been in their
joint, open, notorious, public, continuous and adverse Q: Who may apply for registration under the Public Land
possession for more than 30 years. Can he claim the Act or CA No. 141?
property by virtue of acquisitive prescription pursuant to
Sec. 14(1) of the Property Registration Decree? A: Those who by themselves or through their predecessors-
in-interest have been in open, continuous, exclusive and
A: The principle that the riparian owner whose land notorious possession and occupation of alienable and
receives the gradual deposits of soil does not need to make disposable agricultural lands of the public domain, under a
an express act of possession, and that no acts of possession bona fide claim of acquisition or ownership, since June 12,
are necessary in that instance because it is the law itself 1945, except when prevented by war or force majeure.
that pronounces the alluvium to belong to the riparian
owner from the time that the deposit created by the Note: The following conditions must concur in order that the
current of the water becomes manifest has no applicability benefits of the Public Land Act on the confirmation of imperfect or
herein. This is simply because the lot was not formed incomplete title may be availed of:
through accretion. Hence the ownership of the land
1. The applicant must be a Filipino citizen;
adjacent to the river bank by respondents’ predecessor-in- 2. He must have, by himself or through his predecessors-
interest did not translate to possession of the subject lot in-interest, possessed and occupied an alienable and
that would ripen to acquisitive prescription. disposable agricultural portion of the public domain;
3. Such possession and occupation must have been open,
Yet, even conceding, for the sake of argument that continuous, exclusive, notorious and in the concept of
respondents possessed the subject lot for more than thirty owner, since June, 12, 1945; and
years in the character they claimed, they did not thereby 4. The application must be filed with the proper court.
acquire the land by prescription or by other means without
Q: What is meant by public land?
any competent proof that the land was already declared as
alienable and disposable by the government. Absent that
A: The term is uniformly used to describe so much of the
declaration, the land still belonged to the State as part of its
national domain under the legislative power of the
public dominion. (Republic of the Philippines v. Arcadio Ivan
Congress as has not been subjected to private right or
Santos III and Arcadio Santos, Jr. G.R. No. 160453.
devoted to public use.
November 12, 2012)
Q: What are the means by which public lands may be
RECLAMATION
disposed of?
Q: What is reclamation?
A:
1. For homestead settlement;
A: Reclamation is the act of filling up of parts of the sea for
2. By sale;
conversion to land.
3. By lease;
Note: It must be initially owned by the government. It may be 4. By confirmation of imperfect or incomplete titles:
subsequently transferred to private owners. a. By judicial legalization; or
b. By administrative legalization (free patent)
Q: Who may undertake reclamation projects?
Q: When is a person deemed to possess an imperfect title
A: Only the National Government may engage in over property?
reclamation projects.
A: When the applicant for confirmation of imperfect title
Q: To whom does a reclaimed area belong? has shown possession and occupation that is: (OCENI)
1. open,
A: Under the Regalian doctrine, the State owns all waters 2. continuous,
and lands of the public domain, including those physically 3. exclusive and
reclaimed. 4. notorious
5. in the concept of an owner
Q: Differentiate action for reversion from escheat
proceeding Q: What is the effect of possession of an imperfect title?
A: An action for reversion is slightly different from escheat A: When the conditions set by law are complied with, the
proceeding, but in its effects they are the same. They only possessor of the land, by operation of law, acquires a right
differ in procedure. Escheat proceedings may be instituted to government grant, without the necessity of a certificate
as a consequence of a violation of the Constitution which of the title being issued.
prohibits transfers of private agricultural lands to aliens,
whereas an action for reversion is expressly authorized by Q: RP opposed the application for registration filed by
the Public Land Act (Rellosa v. Gaw Chee Hun, G.R. No. L- Manna Properties under Sec. 48(b), CA No. 141 arguing
1411, Sept. 29, 1953). that, as a private corporation, it is disqualified from

CIVIL LAW
holding alienable lands of the public domain, except by Note: Extended period for filing of application – Sec. 1, R.A. 9176
lease, citing Sec. 3, Art. XII, 1987 Constitution. On the provides in part that, “The time to be fixed in the entire
other hand, Manna Properties claims that the land in archipelago for the filing of applications shall not extend beyond
December 31, 2020. Provided that the area applied for does not
question has been in the open and exclusive possession of
exceed 12 hectares.”
its predecessors-in-interest since the 1940s, thus, the land
was already private land when Manna Properties acquired
Q: In 1913, Gov. Gen. Forbes reserved for provincial park
it from its predecessors-in-interest. Decide.
purposes a parcel of land which, sometime thereafter, the
court ordered registered in Palomo’s name. In 1954, then
A: Lands that fall under Sec. 48, CA No. 141 are effectively
Pres. Magsaysay converted the land into the Tiwi Hot
segregated from the public domain by virtue of acquisitive
Spring National Park, under the management of the
prescription. Open, exclusive and undisputed possession of
Bureau of Forest Development. The area was never
alienable public land for the period prescribed by CA No.
released as alienable or disposable. The Palomos,
141 ipso jure converts such land into private land. Judicial
however, continued to possess the said property, had
confirmation in such cases is only a formality that merely
introduced improvements therein as well as paid real
confirms the earlier conversion of the land into private
estate taxes. The Republic now seeks the cancellation of
land, the conversion having occurred in law from the
the titles over the subject land. Should the cancellation be
moment the required period of possession became
granted?
complete.
A: Yes. The adverse possession which may be the basis of a
Under CA No. 141, the reckoning point is June 12, 1945. If
grant of title in confirmation of imperfect title cases applies
the predecessors-in-interest of Manna Properties have
only to alienable lands of the public domain. There is no
been in possession of the land in question since this date,
question that the lands in the case at bar were not
or earlier, Manna Properties may rightfully apply for
alienable lands of the public domain. The records show that
confirmation of title to the land. Manna Properties, a
such were never declared as alienable and disposable and
private corporation, may apply for judicial confirmation of
subject to private alienation prior to 1913 up to the present
the land without need of a separate confirmation
(Sps. Palomo, et. al., v. CA, et. al., G.R. No. 95608, Jan. 21,
proceeding for its predecessors-in-interest first (Republic v.
1997).
Manna Properties Inc., G.R. No. 146527, Jan. 31, 2005).
Q: Bracewell asserts that he has a right of title to a parcel
Q: Who may apply for judicial confirmation?
of land having been, by himself and through his
predecessors-in-interest, in xxx occupation xxx under a
A:
bona fide claim of ownership since 1908. Thus, he filed an
1. Filipino citizens who by themselves or through their
application for registration in 1963 but the he land has
predecessors-in-interest have been in open,
been classified as alienable or disposable only on May 27,
continuous, exclusive and notorious possession and
1972. May his application for confirmation of imperfect
occupation of alienable and disposable lands of public
title be granted?
domain under a bona fide claim of acquisition since
June 12, 1945 or prior thereto or since time
A: No. The land was only classified as alienable or
immemorial;
disposable on May 27, 1972. Prior to said date, when the
subject parcels of land were classified as inalienable or not
2. Filipino citizens who by themselves or their
disposable, the same could not be the subject of
predecessors-in-interest have been, prior to the
confirmation of imperfect title. There can be no imperfect
effectivity of PD 1073 on January 25, 1977, in open,
title to be confirmed over lands not yet classified as
continuous, exclusive and notorious possession and
disposable or alienable. In the absence of such
occupation of agricultural lands of the public domain
classification, the land remains unclassified public land until
under a bona fide claim of acquisition or ownership for
released and opened to disposition. Indeed, it has been
at least 30 years, or at least since January 24, 1947;
held that the rules on the confirmation of imperfect title do
not apply unless and until the land classified as forest land
3. Private domestic corporations or associations which
is released in an official proclamation to that effect so that
had acquired lands from Filipino citizens who had
it may form part of the disposable agricultural lands of the
possessed the same in the manner and for the length
public domain (Bracewell v. CA, G.R. No. 107427, Jan. 25,
of time indicated in paragraphs 1 & 2 above; or
2000)
4. Natural-born citizens of the Philippines who have lost
Q: In an application for judicial confirmation of imperfect
their citizenship and who has the legal capacity to
title filed by Naguit, the OSG argues that the property xxx
enter into a contract under Philippine laws may be a
must first be alienable. Since the subject land was
transferee of private land up to a maximum are of
declared alienable only on 1980, Naguit could not have
5,000 sq.m., in case of urban land, or 3 hectares in
maintained a bona fide claim of ownership since June 12,
case of rural land to be used by him for business or
1945, as required by Section 14 of the Property
other purposes.
Registration Decree, since prior to 1980, the land was not
alienable or disposable. Is it necessary under Section 14(1)

2013 GOLDEN NOTES
of the Property Registration Decree (now Sec. 48 (b) of the Q: What are the requisites in ordinary registration
Public Land Act) that the subject land be first classified as proceedings and judicial confirmation of imperfect title?
alienable and disposable before the applicant’s possession
under a bona fide claim of ownership could start? A: SA-ST-PSA-HPIEST
1. Survey of land by Bureau of Lands or any duly
A: No. Section 14(1) merely requires the property sought to licensed private surveyor
be registered as already alienable and disposable at the 2. Filing of Application for registration by applicant
time the application for registration of title is filed. If the 3. Setting of date for initial hearing by the court
State, at the time the application is made, has not yet 4. Transmittal of application and date of initial
deemed it proper to release the property for alienation or hearing with all documents or other pieces of
disposition, the presumption is that the government is still evidence attached thereto by clerk of court to
reserving the right to utilize the property; hence, the need National Land Titles and Deeds Registration
to preserve its ownership in the State irrespective of the Administration (NALTDRA)
length of adverse possession even if in good faith. However, 5. Publication of notice of filing of application and
if the property has already been classified as alienable and date and place of hearing
disposable, as it is in this case, then there is already an 6. Service of notice by sheriff upon contiguous
intention on the part of the State to abdicate its exclusive owners, occupants and those known to have
prerogative over the property. (Republic v. CA and Naguit, interest in the property
G.R. No. 144057, Jan. 17, 2005) 7. Filing of Answer or opposition to the application
by any person whether named in the notice or
Note: This case is distinguishable from Bracewell v. CA, where the not
claimant had been in possession of the land since 1908 and had 8. Hearing of case by court
filed his application in 1963, or nine (9) years before the property 9. Promulgation of judgment by court
was declared alienable and disposable in 1972. Hence, registration
10. Issuance of a decree by court declaring the
was denied. The Bracewell ruling will not apply in this case because
here, the application was made years after the property had been decision final, and instructing the NALDTRA to
certified as alienable and disposable. issue a decree of confirmation and registration
11. Entry of decree of registration in NALDTRA
A different rule obtains for forest lands, such as those which form 12. Sending of copy of the decree of registration to
part of a reservation for provincial park purposes the possession of corresponding RD
which cannot ripen into ownership. It is elementary in the law 13. Transcription of decree of registration in the
governing natural resources that forest land cannot be owned by registration book and issuance of owner’s
private persons. As held in Palomo v. CA, forest land is not
duplicate original certificate of title (OCT) of
registrable and possession thereof, no matter how lengthy, cannot
convert it into private property, unless such lands are reclassified applicant by RD, upon payment of prescribed fees
and considered disposable and alienable. In the case at bar, the
property in question was undisputedly classified as disposable and Note: After judgment has become final and executory, the issuance
alienable; hence, the ruling in Palomo is inapplicable. of decree and OCT is ministerial on the part of LRA and RD.
UNDER R.A. 8371 Q: Are the Rules of Court applicable in land registration
proceedings
Q: What law governs the ownership and disposition of
ancestral lands and ancestral domains? A: The Rules of Court could be applied in land registration
proceedings in a suppletory character or whenever
A: RA 8371 of the Indigenous Peoples Rights Act of 1997 practicable or convenient.
(IPRA) which was enacted October 29, 1997. The IPRA is a
law dealing with a specific group of peoples, i.e., the Note: Motion to intervene in a land registration case is not
allowed.
Indigenous cultural communities or the indigenous peoples.
The law allows indigenous peoples to obtain recognition of
APPLICATION
their right of ownership over ancestral lands and ancestral
domains by virtue of native title.
Q: What is the form of the application for registration or
judicial confirmation?
REGISTRATION PROCESS AND REQUIREMENTS
A: In writing;
Q: What are the modes of registering land titles?
1. Signed by the applicant or person duly authorized
in his behalf;
A: There are two modes:
1. Original registration proceedings under the
2. Sworn to before an officer authorized to
Property Registration Decree (PD 1529), and
administer oaths for the province or city where
2. Confirmation of imperfect or incomplete title
the application was actually signed; and
under Section 48(b) of the Public Land Act, as
amended.
3. If there is more than 1 applicant, they shall be
signed and sworn to by and in behalf of each.

CIVIL LAW
Q: What are the contents of the application? Q: What is the rule regarding application covering two or
more parcels?
A: D CAME FAR N
1. Description of the land applied for together with A: An application may include two or more parcels of land
the buildings and improvements; the plan belonging to the applicant/s provided they are situated
approved by Director of Lands and the technical within the same province or city (Sec 18, P.D. 1529).
descriptions must be attached
Q: Where shall the application be filed?
2. Citizenship and civil status of the applicant
a. If married, name of spouse A: If the application covers a single parcel of land situated
b. If the marriage has been legally dissolved, within:
when and how the marriage relation was 1. only one city or province:
terminated RTC or MTC, as the case may be, of the province
or city where the land is situated.
3. Assessed value of the land and the buildings and 2. two or more provinces or cities:
other improvements based on the last a. When boundaries are not defined – in the
assessment for taxation purposes RTC or MTC of the place where it is declared
for taxation purposes.
4. Manner of acquisition of land b. When boundaries are defined – separate
plan for each portion must be made by a
5. Mortgage or Encumbrance affecting the land or surveyor and a separate application for each
names of other persons who may have an interest lot must be filed with the appropriate RTC or
therein, legal or equitable MTC.
6. The court may require Facts to be stated in the Note: MeTC, MCTC, and MTC has jurisdiction to decide cadastral
application in addition to those prescribed by the and land registration cases, provided:
Decree not inconsistent therewith and may 1. There is no controversy or opposition (uncontested
lots); or
require the filing of additional papers
2. Value of contested lots does not exceed P100,000 (Sec.
4, R.A. 7691)
7. Full names and addresses of All occupants of the
land and those of the adjoining owners, if known, In other cases, the RTC has jurisdiction.
and if not known, the applicant shall state the
extent of the search made to find them Q: Does the RTC acting as a land registration court have
general or limited jurisdiction?
8. If the application describes the land as bounded
by a public or private way or Road, it shall state A: Sec. 2 of P.D. No. 1529 has eliminated the distinction
whether or not the applicant claims any portion between the general and the limited jurisdiction of the
of the land within the limits of the way or road, registration court. All conflicting claims of ownership and
and whether the applicant desires to have the interest in the land, and related issues submitted to the
line of way or road determined court with or without the unanimity of the parties, may
now be heard and resolved by the court. The court is now
9. If the applicant is a Non-resident of the authorized to hear and decide not only non-controversial
Philippines, he shall file an instrument in due cases but even contentious issues which used to be beyond
form appointing an agent residing in the its competence.
Philippines and shall agree that service of any
legal process shall be of the same legal effect as if Q: What are the purposes of the publication requirement
made upon the applicant within the Philippines for notice of the filing of the application and the date and
(Sec.16, PD 1529) place of hearing?
Q: What documents must accompany the application? A: To:

1. confer jurisdiction upon the court over the res.
A: All muniments of titles and copies thereof with survey 2. Apprise the whole world of the pending
plan approved by Bureau of Lands must accompany the registration case so that they may assert their
application. rights or interests in the land, if any, and oppose
the application.
Q: What are muniments of title?
Note: The settled rule is that once the registration court had
A: They are instruments or written evidence which the acquired jurisdiction over a certain parcel, or parcels of land in the
applicant holds/possesses to enable him to substantiate registration proceedings by virtue of the publication of the
and prove title to his estate. application, that jurisdiction attaches to the land or lands
mentioned and described in the application.

2013 GOLDEN NOTES
Q: May publication of the notice of filing of application but only insofar – as the land not included in the
and date and place of hearing be dispensed with? publication concerned. But the proceedings and the
decree of registration, relating to the lands that were
A: No. Publication of the notice of filing of application and included in the publication, are valid.
date and place of hearing is mandatory.
XPN: However, if the difference is not as substantial as
Q: Where must the said notice be published? would affect the identity of the land, failure to publish
the bigger area (insubstantial inclusion) does not
A: perforce affect the court’s jurisdiction.
1. Once in the Official Gazette (OG) – this confers
jurisdiction upon the court; and Q: When may an amendment of the application be made?
2. Once in a newspaper of general circulation
A: Amendments to the application including joinder,
Note: Publication in the Official Gazette is sufficient to confer substitution, or discontinuance as to the parties may be
jurisdiction upon the court (Sec. 23, P.D. 1529). allowed by the court at any stage of the proceedings upon
just and reasonable terms. (Sec. 19, PD 1529)
Q: What is considered conclusive proof of publication and
notice? Q: What are the requirements in amending the
application?
A: The certification of the LRA Administrator and of the
sheriff to the effect that the publication of the notice of A:
initial hearing and posting as required by law has been 1. Publication
complied with. Mailing of notice – Within 7 days after publication of
said notice in the OG to:
Q: When is publication defective? a. Every person named in the notice whose address
is known.
A: There is a defective publication in the following b. Secretary of Public Highways, Provincial Governor
instances: and Mayor, if the applicant requests to have the
line of a public way or road determined
1. Where what was published in the Official Gazette c. Secretary of Agrarian Reform, Solicitor General,
is the description of a bigger lot which includes Director of Lands, Director of Fisheries, and
the lands subject of registration. Director of Mines, if the land borders on a river,
navigable stream, or shore, or on an arm of the
Reasons: sea where a river or harbor lies
a. Sec. 15, PD 1529 requires that the d. Other persons as the court may deem proper
application for registration should contain
the description of the land subject of Note: Service of notice upon contiguous owners is
registration and this is the description to be indispensable and lack of service constitutes extrinsic
published; fraud.
b. It is the publication of specific boundaries of
lands to be registered that would actually 2. Posting – In conspicuous place on subject land and on
put the interested parties on notice of the bulletin board of the municipal building for at least
registration proceedings and enable them, if fourteen (14) days before the initial hearing.
they have rights and interests in the
property, to show why the application for Q: Is publication and notice necessary in case the
registration should not be granted; application is amended?
c. The adjoining owners of the bigger lot would
not be the same owners of the smaller lots A: Publication and notice are necessary where the
subject of registration. Hence, notice to amendment to the application consists in: SIA
adjoining owners of the bigger lot is not
notice to those of the smaller lots. 1. Substantial change in the boundaries
2. Increase in the area of the land applied for
2. Where the actual publication of the notice of 3. The inclusion of Additional land
initial hearing was after the hearing itself.
Note: Without such publication, the registration court cannot
Q: What is the effect of a defective publication? acquire jurisdiction over the area that is added.
A: It deprives the court of jurisdiction. Q: When is publication not necessary in case the
application is amended?
GR: If it is later shown that the decree of registration
had included land or lands not included in the A:
publication, then the registration proceedings and the 1. If the amendment consists in the exclusion of a portion
decree of registration must be declared null and void – of the area covered by the original application and the

CIVIL LAW
original plan as previously published, a new independent of, and not subordinate to, the rights of the
publication is not necessary (Exclusion). government.
Note: In this case, the jurisdiction of the court is not affected Q: Who may be proper oppositors in specific cases?
by the failure of filing a new application.
A: The following may be proper oppositors:
2. Amendments to the application including joinder, 1. A homesteader who has not yet been issued his
substitution or discontinuance as to the parties. title but who had fulfilled all the conditions
a. Joinder means joining of two or more defendants required by law to entitle him to a patent.
or plaintiffs involved in a single claim, or where 2. A purchaser of friar land before the issuance of
two or more claims or remedies can be disposed the patent to him.
of in the same legal proceedings. 3. Persons who claim to be in possession of a tract
of public land and have applied with the Bureau
b. Substitution means the replacement of one of the of Lands for its purchase.
parties in a lawsuit because of events that 4. The Government relative to the right of foreshore
prevent the party from continuing with the trial. lessees of public land as the latter’s rights is not
based on dominion or real right independent of
c. Discontinuance means the voluntary termination the right of the government.
of litigation by a plaintiff who has elected not to
pursue it or by both parties pursuant to a Q: May a private person oppose registration on the
settlement. ground that the land sought to be registered is owned by
the government?
Note: This may be allowed by the court at any stage of
the proceedings upon just and equitable terms.
A: No. A private person may not oppose an application for
registration on the ground that the land applied for is a
3. An amendment due to change of name of the
property of the government.
applicant.
Q: Should an oppositor have title over the disputed land?
OPPOSITION
A: No. The oppositor need not show title in himself; he
Q: Who may properly oppose an application for
should however appear to have interest in the property.
registration?
Q: Should an oppositor’s interest over the land be legal or
A: Any person claiming an interest, whether named in the
may it be merely equitable?
notice or not, may appear and file an opposition on or
before the date of initial hearing, or within such further
A: It is immaterial whether his interest is in the character of
time as may be allowed by the court. The opposition shall
legal owner or is of a purely equitable nature as where he is
state all the objections to the application and shall set forth
a beneficiary of a trust.
the interest claimed by the party filing the same and apply
for the remedy desired, and shall be signed and sworn to by
Q: When may a person be declared in default in land
him or by some other duly authorized person (Sec. 25, PD
registration proceedings?
No. 1529).
A: A person may be declared in default if he fails to file an
Q: What are the requisites for a valid opposition?
opposition.
A:
Q: What is the effect of failure to oppose?
1. Set forth objections to the application;
2. State interest claimed by oppositor;
A: Order of default – The court shall, upon motion of the
3. Apply for the remedy desired; and
applicant, no reason to the contrary appearing, order a
4. Signed and sworn to by him or by some other duly
default to be recorded and require applicant to present
authorized person.
evidence.
Note: The opposition partakes of the nature of an answer with a
counterclaim. Q: A judge declared in default an oppositor who had
already filed with the court an opposition based on
Q: Who may be an oppositor to the application for substantial grounds for his failure to appear at the initial
registration or judicial confirmation? hearing of the application for registration. Is the default
order proper? If not, what is his remedy?
A: Any person whether named in the notice or not,
provided, his claim of interest in the property applied for is A: No, it is not. Failure of the oppositor to appear at the
based on a right of dominion or some other real right initial hearing is not a ground for default. In which case, his
proper remedy is to file a petition for certiorari to contest
the illegal declaration of order of default, not an appeal.

2013 GOLDEN NOTES
Q: What is the effect of an order of default in land not, the petition shall be filed not later than 60 days counted
registration proceedings? from the notice of the denial of the motion (Sec. 4, Rule 65,
Rules of Court)
A: An order of default issued in a land registration case, a
proceeding in rem, is binding “against the whole world”, Q: Can a party who has been declared in default appeal
with the exception only of the parties who had appeared from the judgment by default without first filing a motion
and filed pleadings in the registration case. to set aside the order of default?
Q: What is the effect of the absence of an opposition as A: Yes. As held in the case of Martinez v. Republic: “If it
regards allegations in the application? cannot be made any clearer, we hold that a defendant
party declared in default retains the right to appeal from
A: When there is no opposition, all allegations in the the judgment by default on the ground that the plaintiff
application are deemed confessed on the part of the failed to prove the material allegations of the complaint, or
opponent. that the decision is contrary to law, even without need of
the prior filing of a motion to set aside the order of default.
Q: What if a certificate of title was issued covering non- We reaffirm that the Lim Toco doctrine, denying such right
registrable lands without the government opposing, is the to appeal unless the order of default has been set aside,
government estopped from questioning the same? was no longer controlling in this jurisdiction upon the
effectivity of the 1964 Rules of Court, and up to this day.”
A: The government cannot be estopped from questioning (G.R. No. 160895, Oct. 30, 2005.)
the validity of the certificates of title, which were granted
without opposition from the government. The principle of EVIDENCE REQUIRED
estoppel does not operate against the government for the
acts of its agents. Q: What must the applicant for land registration prove?
Q: If an order of general default is issued, may the court A: The applicant must prove: DIP
automatically grant the application? 1. Declassification – The land applied for has been
declassified from the forest or timber zone and is
A: No. Even in the absence of an adverse claim, the a public agricultural land, is alienable and
applicant still has to prove that he possesses all the disposable, or otherwise capable of registration.
qualifications and none of the disqualifications to obtain 2. Identity of the land; and
the title. If he fails to do so, his application will not be 3. Possession and occupation of the land for the
granted. length of time and in the manner required by law.
Q: What is the remedy of a person who was declared in Q: What may constitute sufficient proof to establish
default by the court? declassification of land from forest to alienable or
disposable, or agricultural?
A:
1. Motion to set aside default order – A defaulted A: POEM-CIL
interested person may gain standing in court by filing 1. Presidential proclamation
such motion at any time after notice thereof and 2. Administrative Order issued by the Secretary of
before judgment, upon proper showing that: Environment and Natural Resources
a. his failure to answer (or file an opposition as in 3. Executive order
ordinary land registration case) was due to: 4. Bureau of Forest Development (BFD) Land
FAME: Classification Map
i. Fraud 5. Certification by the Director of Forestry, and
ii. Accident reports of District Forester
iii. Mistake 6. Investigation reports of Bureau of Lands
iv. Excusable Neglect investigator
b. and that he has a meritorious defense. (Sec. 3, 7. Legislative act, or by statute
Rule 9, Rules of Court)
Q: The Cenizas applied for registration of their title over a
2. Petition for Certiorari – Failure of the oppositor to parcel of public land which they inherited. Without
appear at the initial hearing is not a ground for default. presenting proof that the land in question is classified as
In which case, his proper remedy is to file a petition for alienable or disposable, the court granted the application,
certiorari not later than sixty (60) days from notice of holding that mere possession for a period as provided for
judgment, order or resolution to contest the illegal by law would automatically entitle the possessor the right
declaration or order of default, not an appeal. (Sec. 4, to register public land in his name. Was the court ruling
Rule 65, Rules of Court) correct?
Note: The petition shall be filed not later than 60 days from A: No. Mere possession for a period required by law is not
notice of the order. In case a motion for reconsideration or enough. The applicant has to establish first the disposable
new trial is timely filed, whether such motion is required or and alienable character of the public land, otherwise, public

CIVIL LAW
lands, regardless of their classification, can be subject of Q: In case of conflict between areas and boundaries,
registration of private titles, as long as the applicant shows which prevails?
that he meets the required years of possession. The
applicant must establish the existence of a positive act of A: GR: Boundaries prevail over area.
the government, such as a presidential proclamation or an
executive order; administrative action; reports of Bureau of XPNs:
Lands investigators and a legislative act or a statute. 1. Boundaries relied upon do not identify land
(Republic v. Ceniza, G.R. No. 127060, Nov. 19, 2002) beyond doubt.
2. Boundaries given in the registration plan do not
Q: What may be presented as proof of the identity of the coincide with outer boundaries of the land
land sought to be registered? covered and described in the muniments of title.
2
A: ST D Q: What may constitute proof of possession?
1. Survey plan in general
2. Tracing cloth plan and blue print copies of plan A: To prove possession, it is not enough to simply declare
3. Technical description of the land applied for, duly one’s possession and that of the applicant’s predecessors-
signed by a Geodetic Engineer in-interest to have been “adverse, continuous, open, public,
4. Tax Declarations peaceful and in concept of owner” for the required number
of years. The applicant should present specific facts to show
Q: What is the effect of the failure to present the original such nature of possession because bare allegations,
tracing cloth plan? without more, do not amount to preponderant evidence
that would shift the burden to the oppositor (Diaz v.
A: While the submission in evidence of the original tracing Republic, G.R. No. 141031, Aug. 31, 2004).
cloth plan is a mandatory and even a jurisdictional
requirement, the Court has recognized instances of Q: What are some specific overt acts of possession which
substantial compliance with this rule. It is true that the best may substantiate a claim of ownership?
evidence to identify a piece of land for registration
purposes is the original tracing cloth plan from the Bureau A:
of Lands, but blueprint copies and other evidence could 1. Introducing valuable improvements on the property
also provide sufficient identification. In the case of Republic like fruit-bearing trees;
v. Ludolfo y Muñoz, respondent submitted, among other 2. Fencing the area;
things, the following supporting documents: (1) a blueprint 3. Constructing a residential house thereon; or
copy of the survey plan approved by the Bureau of Lands; 4. Declaring the same for taxation purposes.
and (2) the technical descriptions duly verified and
approved by the Director of Lands (G.R. No. 151910, Note: Evidence to be admissible must, however, be credible,
October 15, 2007). substantial and satisfactory
Q: Under what instance may its presentation be dispensed Q: What are insufficient proofs of possession?
with?
A: COF-3T
A: If the survey plan is approved by the Director of Lands 1. Mere Casual cultivation of portions of the land by
and its correctness has not been overcome by clear, strong claimant.
and convincing evidence, the presentation of the tracing
cloth plan may be dispensed with. Thus, original tracing Reason: Possession is not exclusive and notorious
cloth plan need not be presented in evidence. (Republic v. so as to give rise to a presumptive grant from the
Ludolfo y Muñoz, G.R. No. 151910, Oct. 15, 2007). State.
Note: Under LRA Circular 05-2000, only a certified copy of the 2. Possession of Other persons in the land applied
original tracing cloth plan need be forwarded to the LRA. for impugns the exclusive quality of the
applicant’s possession.
Although mere blue print copies were presented in court as
evidence, the original tracing cloth plan was attached to the 3. Mere failure of Fiscal representing the State to
application for registration and was available to the court for
cross-examine the applicant on the claimed
comparison. Hence, the approval of registration was proper
(Republic v. IAC, G.R. No. L-70594, Oct. 10, 1986) possession.
4. Tax declaration of land sought to be registered

which is not in the name of applicant but in the
name of the deceased parents of an oppositor.
Reason: Possession of applicant is not completely

adverse or open, nor is it truly in the concept of
an owner.

2013 GOLDEN NOTES
A: No. Their bare assertions of possession and occupation
5. Holding of property by mere Tolerance of the by their predecessors-in-interest are hardly "the well-nigh
owner. incontrovertible" evidence required in cases of this nature.
Proof of specific acts of ownership must be presented to
Reason: Holder is not in the concept of owner and substantiate their claim. They cannot just offer general
possessory acts no matter how long do not start statements which are mere conclusions of law than factual
the running of the period of prescription. evidence of possession.
5. Where applicants Tacked their possession to that The law speaks of possession and occupation. Possession is
of their predecessor-in-interest but they did not broader than occupation because it includes constructive
present him as witness or when no proofs of what possession. When, therefore, the law adds the word
acts of ownership and cultivation were performed occupation, it seeks to delimit the all encompassing effect
by the predecessor. of constructive possession. Taken together with the words
open, continuous, exclusive and notorious, the word
Q: Exequiel Ampil, as representative of heirs of the late occupation serves to highlight the fact that for an applicant
Albina Ampil, filed a complaint for ejectment against to qualify, his possession must not be a mere fiction.
Perfecto Manahan, et al. Allegedly, Albina was the owner
of 2 adjoining residential lots located in Bulacan as Actual possession of a land consists in the manifestation of
evidenced by tax declarations. They asserted that Albina acts of dominion over it of such a nature as a party would
allowed Perfecto and his family to occupy a portion of said naturally exercise over his own property (Republic v.
properties on the condition that they would vacate the Alconaba, G.R. No. 155012, Apr. 14, 2004).
same should the need to use it arise. Despite requests
however, Perfecto and his family refuse to vacate the Note: “Well-nigh incontrovertible evidence” refers to the
property. Respondents aver that they had been in degree of proof of registrable rights required by law in
peaceful and continuous possession of the property in the registration proceedings.
concept of an owner sine time immemorial and that
Albina was never the owner of the property. Who Q: Are tax declarations presented by them sufficient proof
between the petitioners and the respondents have the of possession and occupation for the requisite number of
better right to the physical possession of the disputed years?
property?
A: No. The records reveal that the subject property was
A: The petitioners have the better right to the property in declared for taxation purposes by the respondents only for
question. The bare allegation of respondents that they had the year 1994. While belated declaration of a property for
been in peaceful and continuous possession of the lot in taxation purposes does not necessarily negate the fact of
question because their predecessor-in-interest had been in possession, tax declarations or realty tax payments of
possession thereof in the concept of an owner from time property are, nevertheless, good indicia of possession in the
immemorial, cannot prevail over the tax declarations and concept of an owner, for no one in his right mind would be
other documentary evidence presented by petitioners. In paying taxes for a property that is not in his actual or, at
the absence of any supporting evidence, that of the least, constructive possession. (Republic v. Alconaba, G.R.
petitioners deserves more probative value. A perusal of the No. 155012, Apr. 14, 2004)
records shows that respondents’ occupation of the lot in
question was by mere tolerance. From the minutes of the Q: What are the proofs of private ownership of land?
meeting in the Barangay Lupon, Perfecto admitted that
Albina permitted them to use the lots on the condition that A: STOP
they would vacate the same should Albina need it (Heirs of 1. Spanish title, impending cases.
Albina G. Ampil, namely Precious A. Zavalla, Eduardo Ampil,
et al. vs. Teresa Manahan and Mario Manahan G.R. No. Note: However, Spanish titles are now
175990. October 11, 2012). inadmissible and ineffective as proof of
ownership in land registration proceedings filed
Q: Mauricio and Carmencita testified to establish their after Aug. 16, 1976. It is mere indicia of a claim of
claim over the subject lots. When the application was ownership that the holder has a claim of title over
granted, the OSG appealed, arguing that weight should the property.
not be given to the self-serving testimonies of the two;
that their tax declaration is not sufficient proof that they 2. Tax declaration and tax payments.
and their parents have been in possession of the property
for at least thirty years, said tax declaration being only for Note: While tax declarations are not conclusive proof of
the year 1994 and the property tax receipts presented by ownership, they constitute good indicia of possession in
them were all of recent dates. Are the said pieces of the concept of owner and a claim of title over the
subject property for no one in his right mind would be
evidence sufficient to establish actual possession of land
paying taxes for a property that is not in his actual or
for the period required by law thus warranting the grant constructive possession.(Charles L. Ong v. Republic of
of the application? the Philippines, G.R. No. 175746, March 12, 2008 and
Republic of the Philippines v. Teodoro P. Rizalvo, Jr. G.R.
No. 172011, March 7, 2011)

CIVIL LAW
not supply the absence of evidence of title required of the

Even if belatedly declared for taxation purposes, it does applicant.
not negate possession especially if there is no other
claimant of the land. 2. Decision in an estate proceeding of a predecessor-in-
interest of an applicant which involves a property over
Mere failure of the owner of the land to pay the realty
which the decedent has no transmissible rights, and in
tax does not warrant a conclusion that there was
abandonment of his right to the property. other cases where issue of ownership was not
definitely passed upon.
3. Other kinds of proof.
3. Survey plan of an inalienable land.
E.g. Testimonial evidence (i.e. accretion is on a
Note: Such plan does not convert such land into alienable
land adjacent to a river).
land, much less private property.
Note: Any evidence that accretion was formed through
human intervention negates the claim. Q: After due hearing for registration, what will the court
do?
4. Presidential issuances and legislative acts.
A: If the court, after considering the evidence and report of
Note: It is constitutive of a “fee simple” title or absolute the LRA, finds that the applicant or the oppositor has
title in favor of the grantee. sufficient title proper for registration, it shall render
judgment confirming the title of the applicant, or the
Q: Agustin executed an Affidavit of Transfer of Real oppositor, to the land or portions thereof, as the case may
Property where Ducat is to perform all the necessary be (Sec. 29, P.D. 1529).
procedures for the registration and acquisition of title
over several parcels of land possessed and occupied by JUDGMENT AND DECREE OF REGISTRATION
Agustin. Before Ducat was able to accomplish his task,
Agustin died and Bernardo administered the properties. Q: What must a judgment in land registration proceedings
Ducat then filed an Application for Free Patent over the contain?
land, which was granted. The parcels of land were
registered in the names of Ducat and Kiong. The heirs of A: When judgment is rendered in favor of the plaintiff, the
Bernardo sought the reconveyance of the land with court shall order the entry of a new certificate of title and
damages but did not question the authenticity of the the cancellation of the original certificate and owner’s
agreement. Who is the rightful owner of the property? duplicate of the former registered owner.
A: The spouses Ducat and Kiong. The Affidavit of Transfer of Q: What is decree of registration?
Real Property proved Ducat’s ownership of the property. It
stated that Ducat bought the subject property from Cecilio A: It is a document prepared in the prescribed form by the
and Bernardo. The heirs did not question the authenticity LRA Administrator, signed by him in the name of the court,
and due execution of said document. It constitutes an embodying the final disposition of the land by the court and
admission against interest made by Bernardo, petitioners' such other data found in the record, including the name
predecessor-in-interest. and other personal circumstances of the applicant, the
technical description of the property, liens and
Bernardo's admission against his own interest is binding on encumbrances affecting it, and such other matters as
his heirs. The heirs' predecessor-in-interest recognized determined by the court in its judgment.
Ducat and Kiong as the legal owner of the lot in dispute.
Q: In a registration case, the court rendered a decision
Thus, there is no proof that the titling of the subject granting Reyes’ application, hence the Director of Lands
property was fraudulently obtained by Ducat and Kiong in appealed. Reyes moved for the issuance of a decree of
their names (Heirs of Bernardo Ulep v. Sps. Cristobal Ducat registration pending appeal. May his motion be granted?
and Flora Kiong, G.R. No. 159284, Jan. 27, 2009).
A: No. Innocent purchasers may be misled into purchasing
Q: What proofs are insufficient to establish private real properties upon reliance on a judgment which may be
ownership or right over land? reversed on appeal. A Torrens title issued on the basis of a
judgment that is not final is a nullity as it violates the
A: explicit provisions of the LRA, which requires that a decree
1. Compromise agreement among parties to a land shall be issued only after the decision adjudicating the title
registration case where they have rights and interest becomes final and executor (Dir. of Lands v. Reyes, G.R. No.
over the land and allocated portions thereof to each of L-27594, Nov. 28, 1975).
them.
Q: After final adjudication in a land registration
Note: Assent of Director of Lands and Director of Forest proceeding, Pepito and his family took possession of the
Management to compromise agreement did not and could land subject of the registration proceedings. Don Ramon

2013 GOLDEN NOTES
moved for their summary ouster from the land. Rule on
his motion. In 1977, C filed an action to annul the deeds of sale to F, X
and Y and their titles, on the ground that he (C) had been in
A: It should be denied. Persons who are not parties to actual physical possession of the land, and that the sale to
registration proceedings who took possession of the land F and the subsequent sales should be set aside on the
after final adjudication of the same cannot be summarily ground of fraud. Upon motion of defendants, the trial
ousted by a mere motion. The remedy is to resort to the court dismissed the complaint, upholding their defenses of
courts of justice and institute a separate action for unlawful their being innocent purchasers for value, prescription and
entry or detainer or for reinvidicatory action, as the case laches. Plaintiff appealed.
may be. Regardless of any title or lack of title of said
person, he cannot be ousted without giving him a day in Is the said appeal meritorious? Explain your answer (1990
court in a proper independent proceeding. Bar Question)
Q: What does a decree of registration cover? A: The appeal is not meritorious. The trial court ruled
correctly in granting defendant's motion to dismiss for the
A: Only claimed property or a portion thereof can be following reasons:
adjudicated. A land registration court has no jurisdiction to 1. While there is the possibility that F, a former
adjudge a land to a person who has never asserted any lessee of the land was aware of the fact that C was
right of ownership thereof. the bona fide occupant thereof and for this reason
his transfer certificate of title may be vulnerable,
Q: May the court render a partial judgment in land the transfer of the same land and the issuance of
registration proceedings? new TCTs to X and Y who are innocent purchasers
for value render the latter's titles indefeasible. A
A: Yes. Where only a portion of the land, subject of person dealing with registered land may safely rely
registration is contested, the court may render partial on the correctness of the certificate of title and
judgment provided that a subdivision plan showing the the law will not in any way oblige him to go behind
contested land and uncontested portions approved by the the certificate to determine the condition of the
Director of Lands is previously submitted to the court. property in search for any hidden defect or
inchoate right which may later invalidate or
Q: What is the effect of a decree of registration? diminish the right to the land. This is the mirror
principle of the Torrens System of land
A: The decree of registration binds the land, quiets title, registration.
subject only to such exceptions or liens as may be provided
by law. 2. The action to annul the sale was instituted in 1977
or more than (10) years from the date of
It is conclusive upon all persons including the national execution thereof in 1957, hence, it has long
government and all branches thereof. Such conclusiveness prescribed.
does not cease to exist when the title is transferred to a
successor. Under Sec. 45, Act 496, “the entry of a certificate of title
shall be regarded as an agreement running with the land,
Note: Title once registered cannot be impugned, altered, changed, and binding upon the applicant and all his successors in title
modified, enlarged or diminished, except in a direct proceeding that the land shall be and always remain registered land. A
permitted by law. title under Act 496 is indefeasible and to preserve that
character, the title is cleansed anew with every transfer for
Q: Does the principle of res judicata apply to land value (De Jesus v. City of Manila, G.R. No. L-26816, Feb. 28,
registration proceedings? 1967; Laperal v. City of Manila, G.R. No. L-16991, Mar. 31,
1964; Penullar v. PNB, G.R. No. L-32762 Jan. 27, 1983).
A: The principle of res judicata applies to all cases and
proceedings, including land registration and cadastral Q: Suppose the government agency concerned joined C in
proceedings. filing the said action against the defendants, would that
change the result of the litigation? Explain. (1990 Bar
Q: In 1950’s, the Government acquired a big landed estate Question)
in Central Luzon from the registered owner for subdivision
into small farms and redistribution of bonafide occupants. A: Even if the government joins C, this will not alter the
F was a former lessee of a parcel of land, five hectares in outcome of the case so much because of estoppel as an
area. After completion of the resurvey and subdivision, F express provision in Sec. 45, Act 496 and Sec. 31, PD 1529
applied to buy the said land in accordance with the that a decree of registration and the certificate of title
guidelines of the implementing agency. Upon full payment issued in pursuance thereof “shall be conclusive upon and
of the price in 1957, the corresponding deed of absolute against all persons, including the national government and
sale was executed in his favor and was registered, and in all branches thereof, whether mentioned by name in the
1961, a new title was issued in his name. In 1963, F sold the application or not.”
said land to X; and in 1965 X sold it to Y, new titles were
successively issued in the names of the said purchasers.

CIVIL LAW
Q: May the court reopen the judgment or decree of As the purchaser of the properties in the extra-judicial
registration? foreclosure sale, the PNCB is entitled to a writ of possession
therefore. The basis of this right to possession is the
A: No.The court has no jurisdiction or authority to reopen purchaser’s ownership of the property. Mere filing of an ex
the judgment or decree of registration, nor impair the title parte motion for the issuance of the writ of possession
or other interest of a purchaser holding a certificate for would suffice, and no bond is required. (Sulit v. CA, G.R. No.
value and in good faith, or his heirs and assigns, without his 119247, Feb. 17, 1997; Agcaoili, Registration Decree and
or their written consent. Related Laws, p. 508-509)
Q: What are the effects of the entry of the decree of Q: Against whom may a writ of possession be issued?
registration in the National Land Titles and Deeds
Registration Authority (NALDTRA)? A: In a registration case, a writ of possession may be issued
against:
A: 1. The person who has been defeated in a
1. This serves as the reckoning date to determine the 1- registration case; and
year period from which one can impugn the validity of 2. Any person adversely occupying the land or any
the registration. portion thereof during the land registration
2. 1 year after the date of entry, it becomes proceedings up to the issuance of the final
incontrovertible, and amendments will not be allowed decree.
except clerical errors. It is deemed conclusive as to the
whole world. Q: Yano filed an application for registration which was
3. Puts an end to litigation. granted. Consequently, a writ of possession was issued.
Vencelao, who occupies the land, contends that he was
WRIT OF POSSESSION not the defeated oppositor in the case, hence a writ of
possession may not be issued against him. May a writ of
Q: In what instances may a writ of possession issue? possession be issued against Vencelao?
A: A: Yes. In a registration case, the judgment confirming the

1. In a land registration proceeding, which is a title of the applicant and ordering the registration in his
proceeding in rem; name necessarily carried with it the delivery of possession
2. In an extrajudicial foreclosure of a realty mortgage; which is an inherent element of the right of ownership.
3. In a judicial foreclosure of mortgage; and
4. In execution sales A writ of possession may be issued not only against the
person who has been defeated in a registration case but
Q: How may possession of property be obtained? also against anyone unlawfully and adversely occupying the
land or any portion thereof during the land registration
A: Possession of the property may be obtained by filing an proceedings up to the issuance of the final decree.
ex parte motion with the RTC court of the province or place (Vencelao v. Yano, G.R. No. 25660, Feb. 20, 1993)
where the property is situated. Upon filing of the motion
and the required bond, it becomes a ministerial duty of the Q: If the court granted the registration, must the applicant
court to order the issuance of a writ of possession in favor move for the issuance of a writ of possession in case he is
of the purchaser. After the expiration of the one-year deprived of possession over the land subject of the
period without redemption being effected by the property registration proceedings?
owner, the right of the purchaser to the possession of the
foreclosed property becomes absolute (PNB v. Sanao A: Yes, if it is against:
Marketing Corporation, G.R. No. 153951, July 29, 2005). 1. the person who has been defeated in a
registration case; and
Q: PNCB purchased a parcel of land in a foreclosure sale 2. any person adversely occupying the land or any
and applied for a writ of possession after the lapse of portion thereof during the land registration
more than 1 year. On appeal, however, it was held that proceedings up to the issuance of the final
the writ of possession cannot be issued because the decree.
foreclosure sale, upon which it is based, was infirm. Is said
ruling correct? XPN.: if it is against persons who took possession of the
land after final adjudication of the same in a registration
A: No. Any question regarding the regularity and validity of proceeding. In which case, the remedy is file a separate
the sale, as well as the consequent cancellation of the writ, action for:
is to be determined in a subsequent proceeding as outlined
in Sec. 8, Act 3135, as amended by Act 4118. Such question 1. unlawful entry;
is not to be raised as a justification for opposing the 2. unlawful detainer; or
issuance of the writ of possession, since, under the Act, the 3. reivindicatory action, as the case may be, and
proceeding is ex parte. only after a favorable judgment can the prevailing

2013 GOLDEN NOTES
party secure a writ of possession (Bernas v. circumstances, it was as if no title was ever issued in this
Nuevo, G.R. No. L-58438, Jan. 31, 1984) case to the petitioner and therefore this is hardly the
occasion to talk of collateral attack against a title.” (Heirs of
Q: Does petition for the issuance of a writ of possession Leoncio C. Oliveros, represented by Aurora B. Oliveros, et al.
prescribe? vs San Miguel Corporation, et al., G.R. No. 173531. February
1, 2012).
A: GR: No.
Q: Differentiate direct from collateral attack
XPN: If a party has once made use of the benefit of a
writ of possession, he cannot again ask for it, if A:
afterwards he loses possession of the property DIRECT ATTACK COLLATERAL ATTACK
obtained by virtue of the original writ. It is made when, in another action
to obtain a different relief, an attack
Q: Does a writ of possession issue in a reconstitution case? The issues are
on the judgment is made as an
raised in a direct
incident in said action.
A: No. reconstitution does not confirm or adjudicate proceeding in an
action instituted for
ownership over the property covered by the reconstituted e.g. Torrens title is questioned in
title as in original land registration proceedings where, in that purpose.
the ordinary civil action for recovery
the latter, a writ of possession may be issued to place the of possession
applicant-owner in possession.
Q: Valentin’s homestead application was approved. After
DECREE OF CONFIRMATION AND REGISTRATION 19 years of possession, his occupation was interrupted
when Arcidio forcibly entered the land. He filed an action
Q: What is decree of confirmation and registration? for recovery of possession which was granted.
A: It is issued by LRA after finality of judgment, and contains In his appeal, may Arcidio seek the nullity of Valentin’s
technical description of land. It is subject only to an appeal. title, invoking as defense the ruling of the Director of
Lands in an administrative case that Valentin has never
It is conclusive evidence of the ownership of the land resided in said land and declared that the homestead
referred to therein and becomes indefeasible and patent was improperly issued to him?
incontrovertible after one year from the issuance of the
decree. A: No, a collateral attack is not allowed. It was erroneous
for Arcidio to question the Torrens OCT issued to Valentin
Q: Differentiate decree of confirmation and registration in an ordinary civil action for recovery of possession filed by
from decree of registration. the registered owner – Valentin – of the said lot, by
invoking as affirmative defense in his answer the Order of
A: Decree of confirmation and registration of title is issued the Bureau of Lands issued pursuant to the investigatory
pursuant to the Public Land Act, where the presumption is power of the Director of Lands under Section 91 of Public
that the land applied for pertains to the State, and that the Land Law (CA No. 141 as amended). Such a defense
occupants and possessors only claim an interest in the partakes of the nature of a collateral attack against a
same by virtue of their imperfect title or continuous, open, certificate of title brought under the operation of the
and notorious possession Torrens system of registration pursuant to Sec. 122, Land
Registration Act, now Sec. 103, P.D. 1259 (Ybanez v. IAC,
Decree of registration is issued pursuant to the Property G.R. No. 68291, Mar. 6, 1991).
Registration Decree, where there already exists a title
which is confirmed by the court (Limcoma Multi-Purpose Q: In a case for recovery of possession based on
Cooperative v. Republic, G.R. No. 167652, July 10, 2007). ownership, is a third-party complaint to nullify the title of
the third-party defendant considered a direct attack on
Q: What is the doctrine of non-collateral attack of a the title?
decree or title?
A: If the object of the third-party complaint is to nullify the
A: A decree of registration and registered title cannot be title of the third-party defendant, the third-party complaint
impugned, enlarged, altered, modified, or diminished either constitutes a direct-attack on the title because the same is
in collateral or direct proceeding, after the lapse of one in the nature of an original complaint for cancellation of
year from the date of its entry. title.
Q: Under what instance, will such doctrine not apply? Q: If an attack is made thru a counterclaim, should it be
disregarded for being a collateral attack?
A: Prohibition against collateral attack does not apply to
spurious or non-existent titles, since such titles do not A: No. A counterclaim is also considered an original
enjoy indefeasibility. “Well-settled is the rule that the complaint, and as such, the attack on the title is direct and
indefeasibility of a title does not attach to titles secured by not collateral.
fraud and misrepresentation. In view of these

CIVIL LAW
REMEDIES IN REGISTRATION PROCEEDINGS

Q: What are the grounds and their corresponding period
Q: What are the remedies of an aggrieved party in for filing an action for reconveyance?
registration proceedings?
A:
A: RADAR-CCAN-QP GROUNDS PRESCRIPTIVE PERIOD
1. Relief from judgment 4 years from the discovery of the
2. Appeal fraud (deemed to have taken
3. Action for Damages place from the issuance of the
4. Action for Compensation from the Assurance original certificate of title)
Fund
Fraud Note: The State has an
Note: If the property has already passed into the hands imprescriptible right to cause the
of an innocent purchaser for value, the remedy is to file reversion of a piece of property
action for damages from the person who allegedly belonging to the public domain if
registered the property from fraud, or if he had become title has been acquired through
insolvent or if the action is barred by prescription, to file fraudulent means.
an action for recovery against the Assurance fund within 10 years from the date of the
a period of 6 years from the time the right to bring such issuance of the OCT or TCT.
action accrues. It does not apply where the
Implied or
person enforcing the trust is in
5. Action for Reconveyance Constructive
actual possession of the property
6. Cancellation suits Trust
because he is in effect seeking to
7. Criminal Action quiet title to the same which is
8. Annulment of judgment imprescriptible.
9. New trial Express Trust Not barred by prescription
10. Quieting of title
Void Contract Imprescriptible
11. Petition for Review (of a Decree)
Q: In 1987, an Emancipation Patent OCT was issued in
RECONVEYANCE
Remy’s favor. In 1998, Madarieta filed a Complaint for
Annulment and Cancellation of the OCT against Remy
Q: What is action for reconveyance?
before the DARAB, alleging that the Department of
Agrarian Reform (DAR) mistakenly included her husband’s
A: It is an action seeking to transfer or reconvey the land
lot as part of Luspo’s property where Remy’s house was
from the registered owner to the rightful owner. It is a legal
constructed and that it was only on 1997 that she
and equitable remedy granted to the rightful owner of land
discovered such mistake. Is Madarieta’s action barred by
which has been wrongfully or erroneously registered in the
prescription?
name of another for the purposes of compelling the latter
to transfer or reconvey the land to him (Spouses Exequiel
A: Yes. Considering that there appears to be a mistake in
and Eusebia Lopez v. Spouses Eduardo and Marcelina Lopez,
the issuance of the subject emancipation patent, the
G.R. No. 161925, Nov. 25, 2009).
registration of the title to the subject property in Remy’s
name is likewise erroneous, and consequently, Remy holds
Q: What is the purpose of an action for reconveyance?
the property as a mere trustee. An action for reconveyance
based on an implied or constructive trust prescribes in 10
A: An action for reconveyance does not aim or purport to
years from the issuance of the Torrens title over the
re-open the registration proceedings and set aside the
property. The title over the subject land was registered in
decree of registration but only to show that the person who
Remy’s name in 1987 while Madarieta filed the complaint
secured the registration of the questioned property is not
to recover the subject lot only in 1998. More than 11 years
the real owner thereof. The action, while respecting the
had lapsed before Madarieta instituted the action for
decree as incontrovertible, seeks to transfer or reconvey
annulment of the patent OCT, which in essence is an action
the land from the registered owner to the rightful owner.
for reconveyance – the remedy of the rightful owner of the
erroneously registered property. It is thus barred by
This action may be filed even after the lapse of 1 year from
prescription (Rementizo v. Heirs of Vda. De Madarieta, G.R.
entry of the decree of registration as long as the property
No. 170318, Jan. 15, 2009).
has not been transferred or conveyed to an innocent
purchaser for value.
Note: In an action for reconveyance, the decree of registration is
respected as incontrovertible but what is sought instead is the
Q: What are the basic allegations to support an action for transfer of the property wrongfully or erroneously registered in
reconveyance? another’s name to its rightful owner or to one with a better right.
The person in whose name the land is registered holds it as a mere
A: All that must be alleged in the complaint are: (1) that the trustee.
plaintiff was the owner of the land; and (2) that the
defendant had illegally dispossessed him of the same.

2013 GOLDEN NOTES
Q: Juan, et. al. seek reconveyance of the property, Given the circumstances, can the action of the Solicitor
imputing fraud to Ines, without adducing evidence, saying General and the case for reconveyance filed by Percival
that she used a forged affidavit to obtain title over the possibly prosper? (1997 Bar Question)
property despite full knowledge that she owned only 1/5
portion thereof. Note that when Ines applied for a free A: If fraud be discovered in the application which led to the
patent over the property, Juan, et. al. filed their claims, issuance of the patent and Certificate of Title, this Title
but when the Bureau of Lands denied their claims, they becomes ipso facto null and void. Thus, in a case where a
did not contest such denial any further. Should the person who obtained a free patent, knowingly made a false
reconveyance be granted? statement of material and essential facts in his application
for the same, by stating therein that the lot in question was
A: No. It appears that they were notified of Ines’ application part of the public domain not occupied or claimed by any
for free patent and were duly afforded the opportunity to other person, his title becomes ipso facto canceled and
object to the registration and to substantiate their claims, consequently rendered null and void.
which they failed to do and they never contested the order
of the Bureau of Lands disregarding their claims. This could It is to the public interest that one who succeeds In
only mean that they either agreed with the order or fraudulently acquiring title to public land should not be
decided to abandon their claims. allowed to benefit therefrom and the State, through the
Solicitor General, may file the corresponding action for
Also, they failed to prove fraud in the execution of the annulment of the patent and the reversion of the land
affidavit used by Ines to obtain title to the disputed involved to the public domain (Dinero v. Director of Lands;
property. No evidence was adduced by them to Kayaban v. Republic L-33307, Aug. 20, 1973; Director of
substantiate their allegation that their signatures therein Lands vs. Animas, L-37682, Mar. 29, 1974).
were forged. It is not for private respondents to deny
forgery. The burden of proof that the affidavit of waiver is With respect to Percival's action for reconveyance, it would
indeed spurious rests on petitioners. Yet, even as they insist have prescribed, having been filed more than ten (10) years
on forgery, they never really took serious efforts in after registration and issuance of an OCT in the name of
establishing such allegation by preponderant evidence. Melvin, were it not for the inherent infirmity of the latter's
Mere allegations of fraud are not enough. Intentional acts title. Hence, under the facts, the statute of limitations will
to deceive and deprive another of his right or in some not apply to Percival because Melvin knew that a part of the
manner injure him, must be specifically alleged and proved land covered by his title actually belonged to Percival. So,
(Brusas v. CA, G. R. No. 126875, Aug. 26, 1999). instead of nullifying in toto the title of Melvin, the court, in
the exercise of equity and jurisdiction, may grant prayer for
Q: On September 10, 1965, Melvin applied for a free patent the reconveyance of Lot B to Percival who has actually
covering two lots - Lot A and Lot B - situated in Santiago, possessed the land under a claim of ownership since 1947.
Isabela. Upon certification by the Public Land Inspector After all, if Melvin's title is declared void ab initio and the
that Melvin had been in actual, continuous, open, land is reverted to the public domain, Percival would just the
notorious, exclusive and adverse possession of the lots same be entitled to preference right to acquire the land
since 1925, the Director of Land approved Melvin's from the government. Besides, well settled is the rule that
application on 04 June 1967. On December 26, 1967, once public land has been in open, continuous, exclusive
Original Certificate of Title (OCT) No. P-2277 was issued in and notorious possession under a bona fide claim of
the name of Melvln. acquisition of ownership for the period prescribed by Sec.
48, Public Land Act, the same ipso jure ceases to be public
On September 7, 1971, Percival filed a protest alleging that and in contemplation of law acquired the character of
Lot B which he had been occupying and cultivating since private land. Thus, reconveyance of the land from Melvin to
1947 was included in the Free Patent issued in the name of Percival would be the better procedure. (Vital v. Anore, G.R.
Melvin. The Director of Lands ordered the investigation of No. L-4136, Feb. 29, 1952; Pena, Land Titles and Deeds, p.
Percival's protest. The Special Investigator who conducted 427, 1982 ed)
the investigation found that Percival had been in actual
cultivation of Lot B since 1947. Q: Rommel was issued a certificate of title over a parcel of
land in Quezon City. One year later, Rachelle, the
On November 28, 1986, the Solicitor General filed in behalf legitimate owner of the land, discovered the fraudulent
of the Republic of the Philippines a complaint for registration obtained by Rommel. She filed a complaint
cancellation of the free patent and the OCT issued in the against Rommel for reconveyance and caused the
name of Melvin and the reversion of the land to public annotation of a notice of lis pendens on the certificate of
domain on the ground of fraud and misrepresentation in title issued to Rommel. Rommel now invokes the
obtaining the free patent. On the same date, Percival sued indefeasibility of his title considering that one year has
Martin for the reconveyance of Lot B. already elapsed from its issuance. He also seeks the
cancellation of the notice of lis pendens.
Melvin filed his answers interposing the sole defense in
both cases that the Certificate of Title issued in his name Will Rachelle’s suit for reconveyance prosper? Explain.
became incontrovertible and indefeasible upon the lapse (1995 Bar Question)
of one year from the issuance of the free patent.

CIVIL LAW
A: Yes, Rachelle’s suit will prosper because all the elements Q: When will an action for damages in land registration
of an action for reconveyance are present, namely: cases prescribe?
1. Rachelle is claiming dominical rights over the
property; A: An ordinary action for damages prescribes in ten (10)
2. Rommel procured his title to the land by fraud; years after the issuance of the Torrens title over the
3. The action was brought within the statutory property.
period of four years from discovery of the fraud
and not later than 10 years from the date of CANCELLATION SUIT
registration of Rommel’s title; and
4. Title to the land has not yet passed into the hands Q: What is cancellation suit?
of an innocent purchaser for value.
A: It is an action for cancellation of title brought by a
Rommel can invoke the indefeasibility of his title if Rachelle private individual, alleging ownership as well as the
had filed a petition to re-open or review the decree of defendant’s fraud or mistake, as the case may be, in
registration. But Rachelle instead filed an ordinary action in successfully obtaining title over a disputed land claimed by
personam for reconveyance. In the latter action, the plaintiff.
indefeasibility is not a valid defense, because in filing such
action, Rachelle is not seeking to nullify or to impugn the Q: When is resort to a cancellation suit proper?
indefeasibility of Rommel’s title. She is only asking the court
to compel Rommel to reconvey the title to her as the A:
legitimate owner of the land. 1. When two certificates of title are issued to different
persons covering the same parcel of land in whole or
Q: May the court cancel the notice of lis pendens even in part
before final judgment is rendered? Explain. (1995 Bar 2. When certificate of title is issued covering a non-
Question) registrable property
3. Other causes such as when the certificate of title is
A: A notice of lis pendens may be cancelled even before issued pursuant to a judgment that is not final or when
final judgment upon proper showing that the notice is for it is issued to a person who did not claim and applied
the purpose of molesting or harassing the adverse party or for the registration of the land covered.
that the notice of lis pendens is not necessary to protect
the right of the party who cause it to be registered. (Sec. Q: What are the rules as regards cancellation of
77, PD 1529) certificates of title belonging to different persons over the
same land?
In this case, it is given that Rachelle is the legitimate owner
of the land in question. It can be said, therefore, that when A: Where two certificates are issued to different persons
she filed her notice of lis pendens her purpose was to covering the same land, the title earlier in date must
protect her interest in the land and not just to molest prevail. The latter title should be declared null and void and
Rommel. It is necessary to record the lis pendens to protect ordered cancelled.
her interest because if she did not do it, there is a
possibility that the land will fall into the hands of an Q: What is meant by prior est temporae, prior est in jura?
innocent purchaser for value and in that event, the court
loses control over the land making any favorable judgment A: It is a principle which means he who is first in time is
thereon moot and academic. For these reasons, the notice preferred in right.
of lis pendens may not be cancelled.
Q: Pablo occupied a parcel of land since 1800. In 1820, he
DAMAGES was issued a certificate of title over said land. In 1830,
however, the land was reclassified as alienable and
Q: When may an action for damages be resorted to in land disposable, as it was originally a forest land. In 1850,
registration cases? Pedro was able to obtain a certificate of title over the
same land. Upon learning of such, Pablo sought to have
A: After one year from date of the decree and if Pedro’s title declared null and void. Decide.
reconveyance is not possible because the property has
passed to an innocent purchaser for value and in good A: As a general rule, the earlier in date must prevail.
faith, the aggrieved party aggrieved party may bring an However, this principle cannot apply if it is established that
ordinary action for damages only against the applicant or the earlier title was procured through fraud or is otherwise
persons responsible for the fraud or were instrumental in jurisdictionally flawed (Republic v. CA and Guido, et. al.,
depriving him of the property. G.R. No. 84966, Nov. 21, 1991). The rule is valid only absent
any anomaly or irregularity tainting the process of
registration. Where the inclusion of land in the certificate of
title of prior date is a mistake, the mistake may be rectified
by holding the latter of the two certificates to be conclusive
(Legarda v. Saleeby, G.R. No. 8936, Oct. 2, 1915). Since the

2013 GOLDEN NOTES
earlier title was issued when the disputed land was still a claimant, who has no rights to said immovable, respect and
non-registrable property, the same may be challenged not disturb the one so entitled, but also for the benefit of
through a cancellation suit and may be declared as null and both, so that whoever has the right will see every cloud of
void. Pedro’s title must prevail. doubt over the property dissipated, and he can thereafter
fearlessly introduce any desired improvements, as well as
Q: What are the grounds for amendment or correction of use, and even abuse the property (Phil-Ville Development
certificate of title? and Housing Corporation v. Maximo Bonifacio, et al., G.R.
No. 167391, June 8, 2011).
A: When:
1. registered interests of any description, whether Q: What is the basis of an action for quieting of title?
vested, contingent or inchoate have terminated
and ceased; A: An action for quieting of title is essentially a common law
2. new interests have arisen or been created which remedy grounded on equity. The competent court is tasked
do not appear upon the certificate; to determine the respective rights of the complainant and
3. any error, omission or mistake was made in other claimants, not only to place things in their proper
entering a certificate or any memorandum place, to make the one who has no rights to said
thereon or on any duplicate certificate; immovable respect and not disturb the other, but also for
4. the name of any person on the certificate has the benefit of both, so that he who has the right would see
been changed; every cloud of doubt over the property dissipated, and he
5. the registered owner has been married, or could afterwards without fear introduce the improvements
registered as married, the marriage has he may desire, to use, and even to abuse the property as he
terminated and no right or interest of heirs or deems best (Dionisio Mananquil, et al. v. Roberto Moico;
creditors will thereby be affected; G.R. No. 180076. November 20, 2012).
6. a corporation, which owned registered land and
has been dissolved, has not conveyed the same Q: Who may file an action to quiet title?
within 3 years after its dissolution; or
7. there is a reasonable ground for the amendment A:
or alteration of title. 1. Registered owner;
2. A person who has an equitable right or interest in the
Q: What are the requisites for the amendment or property; or
correction of title? 3. The State.
A: FREON-U Q: What are the 2 requisites in order that an action for

1. It must be Filed in the original case; quieting of title may prosper?
2. By the Registered owner or a person in interest;
3. On grounds Enumerated; A:
4. All parties must be Notified; 1. The plaintiff or complainant has a legal or equitable
5. There is Unanimity among them; and title or interest in the real property subject of the
6. Original decree must not be Opened. action;
2. The deed, claim, encumbrance or proceeding claimed
QUIETING OF TITLE to be casting cloud on his title must be shown to be in
fact invalid or inoperative despite prima facie
Q: What is action for quieting of title? appearance of validity or legal efficacy (Phil-Ville
Development and Housing Corporation v. Maximo
A: It is an action that is brought to remove clouds on the Bonifacio, et al., G.R. No. 167391, June 8, 2011)
title to real property or any interest therein, by reason of (Joaquin G. Chung, Jr. et al., v. Jack Daniel Mondragon
any instrument, record, claim, encumbrance, or proceeding et al., GR No. 179754, November 21, 2012).
which is apparently valid or effective but is in truth and in
fact invalid, ineffective, voidable or unenforceable, and may Q: May a person who obtains registration through fraud
be prejudicial to said title. be held criminally liable?
Quieting of title is a common law remedy for the removal of A: Yes. The State may criminally prosecute for perjury the
any cloud upon, doubt, or uncertainty affecting title to real party who obtains registration through fraud, such as by
property. Whenever there is a cloud on title to real stating false assertions in the application for registration,
property or any interest in real property by reason of any sworn answer required of applicants in cadastral
instrument, record, claim, encumbrance, or proceeding that proceedings, or application for public land and patent.
is apparently valid or effective, but is, in truth and in fact,
invalid, ineffective, voidable, or unenforceable, and may be
prejudicial to said title, an action may be brought to remove
such cloud or to quiet the title. In such action, the
competent court is tasked to determine the respective
rights of the complainant and the other claimants, not only
to place things in their proper places, and make the

CIVIL LAW
REMEDY IN CASE OF LOSS OR (b) that the documents presented by petitioner are
DESRUCTION OF CERTIFICATE OF TITLE sufficient and proper to warrant reconstitution of the
lost or destroyed certificate of title;
Q: What is the remedy in case a person lost his certificate (c) that the petitioner is the registered owner of the
of title? property or had an interest therein;
(d) that the certificate of title was in force at the time it
A: It depends. was lost or destroyed; and
1. If what is lost is the OCT or TCT – Reconstitution (e) that the description, area and boundaries of the
of certificate of title; property are substantially the same as those contained
2. If, however, it is the duplicate of the OCT or TCT – in the lost or destroyed certificate of title (Republic of
Replacement of lost duplicate certificate of title. the Philippines v. Apolinaria Catarroja, et al., G.R. No.
171774, Feb. 12, 2010).
Q: What is reconstitution of certificate of title?
Q: What are the jurisdictional requirements in petitions
A: The restoration of the instrument which is supposed to for reconstitution of title?
have been lost or destroyed in its original form and
condition, under the custody of Register of Deeds. A: Notice thereof shall be:
1. Published twice in successive issues of the Official
Q: What is the purpose of reconstitution of title? Gazette;
2. Posted on the main entrance of the provincial
A: To have the same reproduced, after proper proceedings, building and of the municipal building of the
in the same form they were when the loss or destruction municipality or city, where the land is situated;
occurred. and
3. Sent by registered mail to every person named in
The reconstitution or reconstruction of a certificate of title said notice
literally denoted restoration of the instrument which is
supposed to have been lost or destroyed in its original form Note: The above requirements are mandatory and jurisdictional.
and condition
Q: What are the kinds of reconstitution of title?
Q: Does reconstitution determine ownership of land
covered by a lost or destroyed certificate of title? A:
1. Judicial – partakes the nature of a land registration
A: A reconstituted title, by itself, does not determine or proceeding in rem. The registered owners, assigns, or
resolve the ownership of the land covered by the lost or any person having an interest in the property may file
destroyed title. The reconstitution of a title is simply the re- a petition for that purpose with RTC where property is
issuance of a lost duplicate certificate of title in its original located. RD is not the proper party to file the petition.
form and condition. It does not determine or resolve the 2. Administrative – may be availed of only in case of:
ownership of the land covered by the lost or destroyed a. Substantial loss or destruction of the original land
title. A reconstituted title, like the original certificate of titles due to fire, flood, or other force majeure as
title, by itself does not vest ownership of the land or estate determined by the Administrator of the Land
covered thereby (Alonso, et. al. v. Cebu Country Club Inc., Registration Authority
G.R. No. 130876, Dec. 5, 2003). b. The number of certificates of title lost or
damaged should be at least 10% of the total
Q: Where the title to the land was lost, does it mean that number in the possession of the Office of the
the land ceased to be registered land? Register of Deeds
c. In no case shall the number of certificates of title
A: No. The fact that the title to the land was lost does not lost or damaged be less than 500
mean that the land ceased to be a registered land before d. Petitioner must have the duplicate copy of the
the reconstitution of its title. certificate of title (R.A. 6732)
Q: May a writ of possession be issued in a petition for Note: The law provides for retroactive application thereof to cases
reconstitution? 15 years immediately preceding 1989.
A: No, because, reconstitution does not adjudicate Q: From what sources may a certificate of title be
ownership over the property. A writ of possession is issued reconstituted?
to place the applicant-owner in possession.
A:
Q: What must be shown before the issuance of an order Judicial reconstitution
for reconstitution? For OCT (in the following order):
1. Owner’s duplicate of the certificate of title
A: 2. Co-owner’s, mortgagee’s or lessee’s duplicate of
(a) that the certificate of title had been lost or destroyed; said certificate

2013 GOLDEN NOTES
3. Certified copy of such certificate, previously
issued by the Register of Deeds Q: If what is lost or destroyed is the DUPLICATE TITLE, is
4. Authenticated copy of the decree of registration reconstitution the proper remedy?
or patent, as the case may be, which was the
basis of the certificate of title A: No. When the duplicate title of the landowner is lost, the
5. Deed or mortgage, lease or encumbrance proper petition is not reconstitution of title, but one filed
containing description of property covered by with the court for issuance of new title in lieu of the lost
the certificate of title and on file with the copy.
Registry of Deeds, or an authenticated copy
thereof Q: Who are the persons entitled to a Duplicate Certificate
6. Any other document which, in the judgment of of Title?
the court, is sufficient and proper basis for
reconstitution A:
1. Registered owner
For TCT (in the following order): 2. Each co-owner
1. Owner’s duplicate of the certificate of title
2. Co-owner’s, mortgagee’s or lessee’s duplicate of Q: What are the requirements for the replacement of lost
said certificate duplicate certificate of title?
3. Certified copy of such certificate, previously
issued by the Register of Deeds A:
4. Deed of transfer of other document containing 1. Due notice under oath shall be sent by the owner or by
description of property covered by the transfer someone in his behalf to the Register of Deeds of the
certificate of title and on file with the Registry province or city where the land lies as soon as the loss
of Deeds, or an authenticated copy thereof or theft is discovered.
5. Deed or mortgage, lease or encumbrance 2. Petition for replacement should be filed with the RTC
containing description of property covered by of the province or city where the land lies.
the certificate of title and on file with the 3. Notice to Solicitor General by petitioner is not imposed
Registry of Deeds, or an authenticated copy by law but it is the Register of Deeds who should
thereof request for representation by the Solicitor General.
6. Any other document which, in the judgment of 4. A proceeding where the certificate of title was not in
the court, is sufficient and proper basis for fact lost or destroyed is null and void for lack of
reconstitution jurisdiction and the newly issued duplicate is null and
void.
Administrative reconstitution
1. Owner’s duplicate of the certificate of title SURRENDER OF
2. Co-owner’s, mortgagee’s or lessee’s duplicate of WITHHELD DUPLICATE CERTIFICATE OF TITLE
said certificate
Q: What are the grounds for surrender of withheld
Q: Apolinario Catarroja et al., filed a petition for duplicate certificate of title?
reconstitution of title covering 2 lots in Cavite.
Accordingly, the Catarrojas inherited these lands from A:
their parents. Allegedly, the LRA issued a certification 1. When it is necessary to issue a new certificate of title
confirming that the land registration court issued a Decree pursuant to any involuntary instrument which divests
covering the lots. A copy of the decree however was no the title of the registered owner against his consent;
longer available in the records. It was also claimed that 2. Where a voluntary instrument cannot be registered by
the owner’s duplicate copy of the title had been lost while reason of the refusal or failure of the holder to
with their parents. If you were the judge, will you grant surrender the owner’s duplicate certificate of title; or
the petition for reconstitution of title? 3. Where the owner’s duplicate certificate is not
presented for amendment or alteration pursuant to a
A: In Republic v. Intermediate Appellate Court, applied the court order.
principle of ejusdem generis in interpreting Section 2(f) of
R.A. 26. “Any other document” refers to reliable AMENDMENT OR CORRECTION OF CERTIFICATE OF TITLE
documents of the kind described in the preceding
enumerations. This Court is not convinced that the above Q: What are the grounds for amendment or correction of
documents of the Catarrojas fall in the same class as those certificate of title?
enumerated in paragraphs (a) to (e). None of them proves
that a certificate of title had in fact been issued in the name A: When:
of their parents. Accordingly, the documents must come 1. registered interests of any description, whether
from official sources which recognize the ownership of the vested, contingent or inchoate have terminated and
owner and his predecessors-in-interest. None of the ceased;
documents presented in this case fit such description 2. new interests have arisen or been created which do
(Republic of the Philippines v. Apolinaria Catarroja, et al., not appear upon the certificate;
G.R. No. 171774, Feb. 12, 2010).

CIVIL LAW
3. any error, omission or mistake was made in entering instrumentalities, and its officials and agents in any
a certificate or any memorandum thereon or on any litigation, proceeding, investigation or matter requiring the
duplicate certificate; services of a lawyer. It shall represent the government in all
4. the name of any person on the certificate has been registration and related proceedings and institute actions
changed; for the reversion to the State of Lands of the public domain
5. the registered owner has been married, or and improvements thereon and all lands held in violation of
registered as married, the marriage has terminated the Constitution.
and no right or interest of heirs or creditors will
thereby be affected; Q: When does reversion apply?
6. a corporation, which owned registered land and has
been dissolved, has not conveyed the same within 3 A: Generally, reversion applies in all cases where lands of
years after its dissolution; or public domain and the improvements thereon and all lands
7. there is a reasonable ground for the amendment or are held in violation of the Constitution.
alteration of title.
Q: What are the grounds for reversion of lands covered by
Q: What are the requisites for the amendment or a patent?
correction of title?
A:
A: FREON-U 1. Violation of Sec.s 118, 120, 121 and 122, Public Land
1. It must be Filed in the original case; Act (e.g. alienation or sale of homestead executed
2. By the Registered owner or a person in interest; within the 5 year prohibitory period)
3. On grounds Enumerated; 2. When land patented and titled is not capable of
4. All parties must be Notified; registration
5. There is Unanimity among them; and 3. Failure of the grantee to comply with the conditions
6. Original decree must not be Opened. imposed by law to entitle him to a patent grant
4. When the area is an expanded area
REVERSION 5. When the land is acquired in violation of the
Constitution (e.g. land acquired by an alien may be
Q: What is meant by reversion? reverted to the State)
A: It is an action instituted by the government, through the Q: Luis filed a complaint for annulment of title involving a
Solicitor General, for cancellation of certificate of title and foreshore land which was granted in Flores’ favor, alleging
the consequential reversion of the land covered thereby to that his application therefor was granted by the
the State. government. Is Luis the real party in interest with
authority to file a complaint for annulment of title of
Reversion connotes restoration of public land fraudulently foreshore land?
awarded or disposed of to the mass of the public domain
and may again be the subject of disposition in the manner A: No. In all actions for the reversion to the Government of
prescribed by law to qualified applicants. lands of the public domain or improvements thereon, the
Republic of the Philippines is the real party in interest. The
Q: Differentiate an action for reversion from an action for action shall be instituted by the Solicitor General or the
cancellation of title? officer acting in his stead, in behalf of the Republic of the
Philippines. Petitioners must first lodge their complaint
A: with the Bureau of Lands in order that an administrative
ACTION FOR REVERSION ACTION FOR CANCELLATION investigation may be conducted under Sec. 91, Public Land
Filed by the government Initiated by a private party Act (Manese v. Sps. Velasco, G.R. No. 164024, Jan. 29,
through the Solicitor usually in a case where there 2009).
General are 2 titles issued to different
persons for the same lot Private persons have no right or interest over land
considered public at the time the sales application was
Q: In the remedy of action for cancellation of title, does filed. They have no personality to question the validity of
the land revert back to the mass of public domain? the title (Vicente Cawis v. Hon. Antonio Cerilles, G.R. No.
170207, April 19, 2010).
A: No. In this action, the land does not revert to the mass of
the public domain, but is declared as lawfully belonging to Note: Indefeasibility of title, prescription, laches and estoppel do
not bar reversion suits.
the party whose certificate of title is held superior over the
other.
Q: Who initiates the action for reversion?
A: It is instituted by the Solicitor General, who shall

represent the government, its agencies, and

2013 GOLDEN NOTES
CADASTRAL LAND REGISTRATION
Cadastral court possesses no authority to award damages.
Q: What is cadastral registration?
Note: A parcel of forest land is within the exclusive jurisdiction of
A: It is a proceeding in rem, initiated by the filing of a the Bureau of Forestry and beyond the power and jurisdiction of
petition for registration by the government, not by the the cadastral court to register under the Torrens system.
persons claiming ownership of the land subject thereof, and
the latter are, on the pain of losing their claim thereto, in SUBSEQUENT REGISTRATION
effect compelled to go to court to make known their claim
or interest therein, and to substantiate such claim or Q: What is subsequent registration?
interest.
A: It is where incidental matters after original registration
Q: What is the purpose of cadastral registration? may be brought before the land registration court by way
of motion or petition filed by the registered owner or a
A: Here, the government does not seek the registration of party in interest.
land in its name. The objective of the proceeding is the
adjudication of title to the lands or lots involved in said Q: After registering his land, what conveyances may the
proceeding. Furthermore, it is to serve public interest by registered owner do?
requiring that the titles to the lands “be settled and
adjudicated (Sec 1 of Act. No. 2259) A: An owner of registered land may convey, mortgage,
lease, charge or otherwise deal with the same in
Q: Explain the process for the filing of Petition for accordance with existing laws. He may use such forms of
Registration. deeds, mortgages, leases or other voluntary instruments as
are sufficient in law.
A: The Director of Lands, represented by the Solicitor
Note: G.R. Such deed, mortgage, lease, or other voluntary
General, shall institute original registration proceedings by
instrument shall operate only as a contract between the parties
filing the necessary petition in the Regional Trial Court of and as evidence of authority to the Register of Deeds to make
the place where the land is situated against the holders, registration. It is the act of registration which shall operate to
claimants, possessors, or occupants of such lands or any convey or affect the land insofar as third persons are concerned,
part thereof, stating that public interest requires that the and in all cases, the registration shall be made in the office of the
title to such lands be settled and adjudicated and praying Register of Deeds for the province or city where the land lies. The
that such titles be settled and adjudicated. act of registration creates a constructive notice to the whole world
of such voluntary or involuntary instrument or court writ or
process. (Sec. 52, PD 1529)
Q: What is the procedure in cadastral registration?
XPN: A will purporting to convey or affect registered land shall take
A: effect as a conveyance or bind the land, not merely as a contract or
1. Cadastral survey evidence of authority of the RD to make registration (Sec. 51, PD
2. Filing of petition 1529).
3. Publication of notice of initial hearing
4. Filing of answer VOLUNTARY DEALINGS
5. Hearing of case
6. Decision Q: Must voluntary dealings be registered?
7. Issuance of decree & certificate of title
A: No. Registration is not a requirement for validity of the
Q: What should the petition contain? contract as between the parties. However, the act of
registration shall be the operative act to convey or affect
A: Petition shall contain: the land insofar as third parties are concerned.
a. Description of the lands
b. Plan thereof Q: What are the requirements for registrability of deeds
c. Such other data as to facilitate notice to all and other voluntary acts of conveyance?
occupants and persons having claim or interest
therein A: PIPE
1. Presentation of owner’s duplicate certificate
Q: What is the extent of authority of cadastral courts? whenever any duly executed voluntary
instrument is filed for registration;
A: The cadastral court is not limited to merely adjudication 2. Inclusion of one extra copy of any document of
of ownership in favor of one or more claimants. If there are transfer or alienation of real property, to be
no successful claimants, the property is declared public furnished to the city or provincial assessor;
land. 3. Payment of prescribed registration fees and
requisite documentary stamps; and
Cadastral courts do not have the power to determine and 4. Evidence of full payment of real estate tax as may
adjudicate title to a lot already covered by homestead be due.
patent to a person other than a patentee.

CIVIL LAW
Q: What is the effect of registration of such voluntary reference by number to the certificate of title to which it
dealings? relates and to the volume and page in the registration book
in which it is registered (Sec. 65, P.D. 1529).
A: It:
1. creates a lien that attaches to the property in 2. If the instrument creating or declaring a trust or other
favor of the mortgagee; and equitable interest contains an express power to sell,
2. constitutes constructive notice of his interest in mortgage or deal with the land in any manner, such power
the property to the whole world. shall be stated in the certificate of title by the words "with
power to sell", or "power to mortgage", or by apt words of
Q: What is the rule on carry over of encumbrances? description in case of other powers (Sec. 66, P.D. 1529).
A: If, at the time of any transfer, subsisting encumbrances 3. If a new trustee of registered land is appointed by a court
or annotations appear in the registration book, they shall of competent jurisdiction, a new certificate may be issued
be carried over and stated in the new certificate or to him upon presentation to the Register of Deeds of a
certificates; except so far as they may be simultaneously certified copy of the order or judicial appointment and the
released or discharged (Sec. 59, P.D. 1529). surrender for cancellation of the duplicate certificate (Sec.
67, P.D. 1529).
Q: If the property that was the subject of mortgage was
subsequently foreclosed, must a new certificate of title be 4. Whoever claims an interest in registered land by reason
automatically issued in favour of the purchaser? of any implied or constructive trust shall file for
registration with the Register of Deeds a sworn statement
A: The answer must be qualified. thereof containing a description of the land, the name of
the registered owner and a reference to the number of the
1. No right of redemption - the certificate of title of the certificate of title. Such claim shall not affect the title of a
mortgagor shall be canceled, and a new certificate issued in purchaser for value and in good faith before its registration
the name of the purchaser. (Sec. 68, P.D. 1529).
2. There is right of redemption - the certificate of title of INVOLUNTARY DEALINGS

the mortgagor shall not be canceled, but the certificate of
sale and the order confirming the sale shall be registered by Q: Must involuntary dealings be registered?
a brief memorandum thereof made by the Register of
Deeds upon the certificate of title. A: Yes. It is the act of registration which creates a
constructive notice to the whole world of such instrument
In the event the property is redeemed, the certificate or or court writ or process and is the operative act that
deed of redemption shall be filed with the Register of conveys ownership or affects the land insofar as third
Deeds, and a brief memorandum thereof shall be made by persons are concerned.
the Register of Deeds on the certificate of title of the
mortgagor. Q: What are the involuntary dealings that must be
registered?
If the property is not redeemed, the final deed of sale
executed by the sheriff in favor of the purchaser at a A:
foreclosure sale shall be registered with the Register of 1. Attachment
Deeds; whereupon the title of the mortgagor shall be 2. Adverse claim
canceled, and a new certificate issued in the name of the 3. Notice of lis pendens
purchaser (Sec. 63, P.D. 1529).
Q: What is a writ of attachment?
Q: What is the rule on registration in case the property
conveyed is held in trust? A: It is used primarily to seize the debtor’s property in order
to secure the debt or claim of the creditor in the event that
A: a judgment is rendered.
1. If a deed or other instrument is filed in order to transfer
registered land in trust, or upon any equitable condition or Q: What is the effect of the non-recording of a writ of
limitation expressed therein, or to create or declare a trust attachment?
or other equitable interests in such land without transfer,
the particulars of the trust, condition, limitation or other A: An attachment levied on real state not duly recorded in
equitable interest shall not be entered on the certificate; the Registry of Property is not an encumbrance on the
but only a memorandum thereof shall be entered by the attached property, nor can such attachment unrecorded in
words "in trust", or "upon condition", or other apt words, the registry, serve as a ground for decreeing the annulment
and by a reference by number to the instrument of the sale of the property at the request of another
authorizing or creating the same. A similar memorandum creditor.
shall be made upon the original instrument creating or
declaring the trust or other equitable interest with a

2013 GOLDEN NOTES
Q: What is adverse claim? Q: What is the effect of the registration of an adverse
claim?
A: It is a notice to third persons that someone is claiming an
interest on the property or has a better right than the A: It renders the adverse claim effective and any
registered owner thereof, and that any transaction transaction regarding the disputed land shall be subject to
regarding the disputed land is subject to the outcome of the outcome of the dispute.
the dispute.
Q: What is the effect of non-registration of an adverse
Q: What is the purpose of adverse claim? claim?
A: The purpose of annotating the adverse claim on the title A: The effect of non-registration or invalid registration of an
of the disputed land is to apprise third persons that there is adverse claim renders it ineffective for the purpose of
a controversy over the ownership of the land and to protecting the claimant’s right or interest on the disputed
preserve and protect the right of the adverse claimant land, and could not thus prejudice any right that may have
during the pendency of the controversy. arisen thereafter in favor of third parties.
Q: When is a claim of interest adverse? Q: What are the limitations to the registration of an
adverse claim?
A:
1. Claimant’s right or interest in registered land is A:
adverse to the registered owner; 1. No second adverse claim based on the same
2. Such right or interest arose subsequent to the date of ground may be registered by the same claimant.
original registration; or 2. A mere money claim cannot be registered as an
3. No other provision is made in the decree for the adverse claim.
registration of such right or claim.
Q: May an adverse claim exist concurrently with a
Q: What are the formal requisites of an adverse claim for subsequent annotation of a notice of lis pendens?
purposes of registration?
A: Yes, an adverse claim may exist concurrently with a
A: WNR subsequent annotation of a notice of lis pendens. When an
1. Adverse claimant must state the following in adverse claim exists concurrently with a notice of lis
Writing: pendens, the notice of adverse claim may be validly
a. his alleged right or interest; cancelled after the registration of such notice, since the
b. how and under whom such alleged right of notice of lis pendens also serves the purpose of the adverse
interest is acquired; claim.
c. description of the land in which the right or
interest is claimed; and Q: What is the lifespan of a registered adverse claim?
d. certificate of title number
A: The adverse claim shall be effective for a period of thirty
2. Such statement must be signed and sworn to (30) days from the date of registration and it may be
before a Notary public; and cancelled.
3. Claimant shall state his Residence or place to
which all notices may be served upon him. Q: What is the effect of the expiration of the period of
effectivity of an adverse claim?
Q: How are adverse claims registered?
A: The expiration does not ipso facto terminate the claim.
A: By filing a sworn statement with the Register of Deeds of The cancellation of the adverse claim is still necessary to
the province where the property is located, setting forth render it ineffective; otherwise, the inscription will remain
the basis of the claimed right together with other data annotated and shall continue as a lien to the property.
pertinent thereto.
Q: May the RD cancel an adverse claim?
Note: Entry of the adverse claim filed on the day book is sufficient
without the same being annotated at the back of the A: The RD cannot, on its own, automatically cancel the
corresponding certificate of title (Director of Lands v. Reyes, G.R. adverse claim.
No. L-27594, Feb. 27, 1976)
Note: Before the lapse of 30-day period, the claimant may file a
Q: What claims may be registered as adverse claims? sworn petition withdrawing his adverse claim, or a petition for
cancellation of adverse claim may be filed in the proper Regional
A: Any claim of part or interest in registered land that are Trial Court
adverse to the registered owner, arising subsequent to the
date of the original registration (Sec. 70, PD 1529)
Note: A mere money claim cannot be registered as an adverse

claim.

CIVIL LAW
Q: What must an interested party do if he seeks the Q: When may a notice of lis pendens be made and when
cancellation of a registered adverse claim? may it not be resorted to?
A: The interested party must file with the proper court a A:

petition for cancellation of adverse claim, and a hearing NOTICE OF LIS PENDENS
must also first be conducted. When applicable When Inapplicable
1. Recover possession
Q: What is notice of lis pendens? of real estate 1. Attachments
2. Quieting of title 2. Levy or execution
A: Lis pendens literally means a pending suit. The doctrine 3. Remove clouds upon 3. Proceedings on
of lis pendens refers to the jurisdiction, power or control title probate or wills
which a court acquires over property involved in a suit, 4. For Partition 4. Administration of
pending the continuance of the action, and until final 5. Any other proceeding the real estate of
judgment. of any kind in court deceased person
directly affecting title 5. Proceedings for the
It merely creates a contingency and not a lien. It does not to the land or its use recovery of money
produce any right or interest which may be exercised over or occupation or the judgments
the property of another. It only protects the applicant’s building thereon
rights which will be determined during trial.
Note: It is not a lien or encumbrance under our civil law. It is mere Q: What are the effects of the annotation of notice of lis
cautionary notice to prospective buyers of certain property that pendens?
said property is under litigation. The annotation of a notice of lis
pendens at the back of the original copy of the certificate of title on A: The filing of notice of lis pendens has 2 effects:
file with the Register of Deeds is sufficient to constitute 1. It keeps the subject matter of litigation within the
constructive notice to purchasers or other persons subsequently power of the court until the entry of the final
dealing with the same property. One who deals with property judgment to prevent the defeat of the final
subject of a notice of lis pendens cannot invoke the right of a
judgment by successive alienation; and
purchaser in good faith neither can he acquire better rights that
those of his predecessors-in-interest.
2. It binds a purchaser, bona fide or not, of the land
Q: What is the basis for such notice? subject of the litigation to the judgment or decree
that the court will promulgate subsequently.
A: Such announcement is founded upon public policy and
necessity, the purpose of which is to keep the properties in Q: What statutory liens affecting title are not barred even
litigation within the power of the court until the litigation is though not noted in the title?
terminated and to prevent the defeat of the judgment or
decree by subsequent alienation (Isabelita Cunanan et al., A: LUPD
v. Jumping Jap Trading Corporation et al., G.R. No. 173834, 1. Liens, claims or rights arising or existing under the
April 24, 2009). laws and the Constitution, not required by law to
appear of record in the RD;
Q: What are the purposes of a notice of lis pendens?
2. Unpaid real estate taxes levied and assessed
A: To: within two (2) years immediately preceding the
1. protect the rights of the party causing the acquisition of any right over the land by an
registration of the lis pendens; and innocent purchaser for value without prejudice to
2. advise third persons who purchase or contract on right of the government to collect taxes payable
the subject property that they do so at their peril before that period from the delinquent taxpayer
and subject to the result of the pending litigation. alone;
Note: It is an announcement to the whole world that a particular 3. Public highway or private way established or
real property is in litigation, serving as a warning that one who recognized by law or any government irrigation
acquires an interest over said property does so at his own risk, or canal or lateral thereof; and
that he gambles on the result of the litigation over the said
property. The filing of a notice of lis pendens charges all strangers 4. Any Disposition of the property or limitation on
with a notice of the particular litigation referred to therein and, the use thereof by virtue of laws or regulations on
therefore, any right they may thereafter acquire on the property is
agrarian reform (Sec. 44, PD 1529).
subject to the eventuality of the suit (Isabelita Cunanan et al., v.
Jumping Jap Trading Corporation et al., G.R. No. 173834, April 24,
2009). Q: When may a notice of lis pendens be cancelled?
A: A notice of lis pendens may be cancelled in the following

cases before final judgment upon order of the court:
MEND-PC

2013 GOLDEN NOTES
1. When it is shown that the notice is for the as against the State even if the property has been previously
purpose of Molesting the adverse party; classified as alienable and disposable as it is that official declaration
2. Where the Evidence so far presented by the that converts the property to patrimonial (Republic of the
Philippines vs. Metro Index Realty and Development Corporation;
plaintiff does not bear out the main allegations of
G.R. No. 198585, July 2, 201).
the complaint;
3. When it is shown that it is Not necessary to
Q: What is the reason behind their non-registrability?
protect the right of the party who caused the
registration thereof;
A: They are intended for public use, public service or
4. Where the continuances of the trial are
development of the national wealth. They are outside the
unnecessarily Delaying the determination of the
commerce of men and, therefore, not subject to private
case to the prejudice of the defendant;
appropriation.
5. Upon verified Petition of the party who caused
the registration thereof; or
Q: Which lands are non-registrable?
6. It is deemed Cancelled after final judgment in
favor of defendant, or other disposition of the
A:
action, such as to terminate all rights of the
1. Property of public domain or those intended for public
plaintiff to the property involved.
use, public service or development of the national
wealth.
Q: May a notice of lis pendens be cancelled despite the
2. Forest or timber lands
pendency of the case?
3. Water sheds
4. Mangrove swamps
A: Yes. Though ordinarily a notice of lis pendens cannot be
5. Mineral lands
cancelled while the action is still pending and
6. Parks and plazas
undetermined, the proper court has discretionary power to
7. Military or naval reservations
cancel it under peculiar circumstances, as for instance,
8. Foreshore lands
where the evidence so far presented by the plaintiffs does
9. Reclaimed lands
not bear out the main allegations of his complaint, and
10. Submerged areas
where the continuances of the trial, for which the plaintiffs
11. River banks
is responsible are unnecessarily delaying the determination
12. Lakes
of the case to the prejudice of the defendants (Baranda v.
13. Reservations for public and semi-public purposes
Gustillo, G.R. No. L-81163, Sept. 26, 1988).
14. Others of similar character
Q: When is a notice of lis pendens deemed cancelled?
Q: In 1913, Gov. Gen. Forbes reserved a parcel of land for
provincial park purposes. Sometime thereafter, the court
A: Under Section 77 of P.D. 1529, a notice of lis
ordered said land to be registered in Ignacio Palomo’s
pendens shall be deemed cancelled only upon the
name. What is the effect of the act of Gov. Gen Forbes in
registration of a certificate of the clerk of court in which the
reserving the land for provincial park purposes?
action or proceeding was pending stating the manner of
disposal thereof if there was a final judgment in favor of the
A: As part of the reservation for provincial park purposes,
defendant or the action was disposed of terminating finally
they form part of the forest zone. It is elementary in the law
all rights of the plaintiff over the property in
governing natural resources that forest land cannot be
litigation (Isabelita Cunanan et al., v. Jumping Jap Trading
owned by private persons. It is not registrable and
Corporation et al., G.R. No. 173834, April 24, 2009).
possession thereof, no matter how lengthy, cannot convert
it into private property, unless such lands are reclassified
NON-REGISTRABLE PROPERTIES
and considered disposable and alienable (Sps. Palomo, et.
al. v. CA, et. al., G.R. No. 95608, Jan. 21, 1997).
Q: What are non-registrable lands?
Q: Under what instance is a forested area classified as a
A: These are properties of public dominion which, under
forest land?
existing legislation, are not the subject of private ownership
and are reserved for public purposes.
A: A forested area classified as forest land of the public
domain does not lose such classification simply because
Note: That properties of the public dominion are not susceptible to
prescription and that only properties of the State that are no loggers or settlers may have stripped it of its forest
longer earmarked for public use, otherwise known as patrimonial, cover. Parcels of land classified as forest land may actually
may be acquired by prescription are fundamental, even be covered with grass or planted with crops
elementary, principles in this jurisdiction. In Heirs of Mario by kaingin cultivators or other farmers. “Forest lands” do
Malabanan v. Republic, the Supreme Court, in observance of the not have to be on mountains or in out-of-the-way places.
foregoing, clarified the import of Section 14(2) and made the The classification of land is descriptive of its legal nature or
following declarations: (a) the prescriptive period for purposes of status and does not have to be descriptive of what the land
acquiring an imperfect title over a property of the State shall
actually looks like (Vicente Yu Chang and Soledad Yu Chang
commence to run from the date an official declaration is issued
that such property is no longer intended for public service or the v. Republic, G.R. No. 171726, Feb. 23, 2011).
development of national wealth; and (b) prescription will not run

CIVIL LAW
Q: What is foreshore land? with prayer for TRO. The RTC dismiss PRA’s petition and
ruled that PRA was not exempt from payment of real
A: A strip of land that lies between the high and low water property taxes as it was organized as a stock corporation.
marks and is alternatively wet and dry according to the flow Is the ruling correct?
of tide. It is that part of the land adjacent to the sea, which
is alternately covered and left dry by the ordinary flow of A: The subject lands are reclaimed lands, specifically
tides. portions of the foreshore and offshore areas of Manila Bay.
As such, these lands remain public lands and form part of
Note: Seashore, foreshoreland, and/or portions of the territorial the public domain. In the case of Chavez v. Public Estates
waters and beaches, cannot be registered. Even alluvial formation Authority and AMARI Coastal Development Corporation, the
along the seashore is part of the public domain and, therefore, not Court held that foreshore and submerged areas irrefutably
open to acquisition by adverse possession by private persons.
belonged to the public domain and were inalienable unless
reclaimed, classified as alienable lands open to disposition
Q: What are mangrove swamps?
and further declared no longer needed for public service.
The fact that alienable lands of the public domain were
A: These are mud flats, alternately washed and exposed by
transferred to the PEA (now PRA) and issued land patents
the tide, in which grows various kindred plants which will
or certificates of title in PEA’s name did not automatically
not live except when watered by the sea, extending their
make such lands private. This Court also held therein that
roots deep into the mud and casting their seeds, which also
reclaimed lands retained their inherent potential as areas
germinate there. These constitute the mangrove flats of the
for public use or public service (Republic of the Philippines,
tropics, which exist naturally, but which are also, to some
represented by the Philippine Reclamation Authority (PRA)
extent cultivated by man for the sake of the combustible
vs. City of Parañaque; G.R. No. 191109, July 18, 2012.)
wood of the mangrove and like trees as well as for the
useful nipa palm propagated thereon (Montano v. Insular
DEALINGS WITH UNREGISTERED LANDS
Government, G.R. No. 3714, Jan. 26, 1909).
Q: Is the transfer of an unregistered land valid?
Q: Are mangrove swamps disposable?
A: Yes. It is valid only between the parties and does not
A: No. Mangrove swamps or manglares are forestall and
bind third persons. Sec. 113 of P.D. 1529 states that no
not alienable agricultural land.
deed, conveyance, mortgage, lease, or other voluntary
instrument affecting land not registered under the Torrens
Q: What are mineral lands?
system shall be valid, except as between the parties
thereto, unless such instrument shall have been recorded in
A: Mineral land means any land where mineral resources
the manner herein prescribed in the office of the Register
are found. Mineral resources, on the other hand, mean any
of Deeds for the province or city where the land lies.
concentration of mineral/rocks with potential economic
value.
Q: Can land be partly mineral and partly agricultural?
A: The rights over the land are indivisible and that the land
itself cannot be half agricultural and half mineral. The
classification of land must be categorical; the land must be
either completely mineral or completely agricultural.
Q: What is watershed?
A: It is a land area drained by a stream or fixed body of

water and its tributaries having a common outlet for
surface runoff.
Q: What is watershed reservation?
A: It is a forest land reservation established to protect or

improve the conditions of the water yield thereof or reduce
sedimentation.
Q: Public Reclamation Authority (formerly Philippine

Estate Authority or PEA), reclaimed several portions of the
foreshore and offshore areas of Manila Bay. In 2003, the
Parañaque City Treasurer issued Warrants of Levy of PRA’s
reclaimed propertied. PRA filed a petition for prohubiton

2013 GOLDEN NOTES
Q: What are the functions of the RD, LRA and the courts in land registration?
A:
RD LRA COURTS
1. Registration of an instrument 1. Assistance to the Jurisdiction over:
presented for registration dealing Department of Agrarian
with real or personal property which Reform, the Land Bank, 1. Applications for original
complies with the requisites for and other agencies in the registration of title to lands,
registration implementation of the land including improvements and
2. See to it that said instrument bears reform program of the interests therein
the proper documentary and stamps government
and that the same are properly 2. Assistance to courts in 2. Petitions filed after original
cancelled ordinary and cadastral land registration, with power to hear
3. If the instrument is not registerable: registration proceedings and determine all questions
4. deny the registration thereof and 3. Central repository of arising upon such application or
inform the presentor of such denial in records relative to the petitions.
writing, stating the ground or reason original registration of
therefore, and lands titled under the
5. advising him of his right to appeal by Torrens system, including
consulta in accordance with Sec. 117 the subdivision and
of PD 1529 consolidation plans of
6. Prepare and keep an index system titled lands.
which contains the names of all 4. Adjudicate appeal – en
registered owners and lands consulta cases
registered

CIVIL LAW
TORTS AND DAMAGES Note: Either of these liabilities may be enforced against the
offender subject to the caveat under Article 2177 of the Civil Code
PRINCIPLES that the plaintiff cannot recover damages twice for the same act or
omission of the defendant (Santos v. Pizardo, G.R. No. 151452, July
29, 2005).
Q: What is a tort?
Q: What is the principle of abuse of rights?
A: It is a civil wrong wherein one person’s conduct causes a
compensable injury the person, property or recognized
A: Every person must, in the exercise of his rights and in the
interest of another, in violation of a duty imposed by law
performance of his duties, act with justice, give everyone
his due, and observe honesty and good faith. (Art. 19, NCC)
Note: The term tort was not used by the Code Commission and
instead used the term quasi-delict because it is broader in coverage
as it covers in common law countries, acts which are intentional or Note: This principle is based upon the famous maxim suum jus
malicious, which latter acts in teh general plan of the Philippine summa injuria (the abuse of a right is the greatest possible wrong).
legal system are governed by the Penal Code. However, the case of (Arlegui v. CA, G.R. No. 126437, Mar. 6, 2002)
Barredo v. Garcia made no distinction between intentional and
negligent injuries as it declared that quasi delict include punishable Q: What is the rationale behind the principle?
and non punishable acts or omission (Pineda, Torts and Damages
Annotated, 2004 ed). A: The exercise of a right ends when the right disappears,
and it disappears when it is abused, especially to the
Q: What are the main functions of punishing tort? prejudice of others. The mask of a right without the spirit of
justice which gives it life is repugnant to the modern
A: concept of social law. It cannot be said that a person
1.Compensation and Restitution – to compensate persons exercises a right when he unnecessarily prejudices another
sustaining a loss or harm as a result of another’s act or or offends morals or good customs (Pineda, Torts and
omission, placing the cost of that compensation on those Damages, 2009, p. 325, citing BorrelMacia).
who, in justice ought to bear it.
2. Prevention – to prevent future losses and harm Note: The abuse of rights rule established in Article 19 of the Civil
Code requires every person to act with justice, to give everyone his
Q: What are the major purposes of imposing liability due and to observe honesty and good faith. (RellosavsPellosis, 362
arising from tort? SCRA 486)
A: Q: What is meant by the maxim quejure suoutitur nullum

1. To provide a peaceful means for adjusting the rights of damnum facit?
parties who might otherwise take teh law into their own
hands A: One who exercises his legal right does no injury.
2. Deter wrongful conduct
3. Encourage socially responsible behaviour Q: What is the concept of Damnum Absque Injuria?
4. Restore injured parties to their original condition insofar
as the court can do this by compensating them for their A: A person who only exercises his legal rights does no
injury injury. If damages result from such exercise of legal rights,
the consequences must be borne by the injured person
Q: What are the civil liabilities which may arise due to an alone. The law affords no remedy for damages resulting
act or omission of one, causing damage to another? from an act which does not amount to a legal injury or
wrong.
A:
1. Civil liability ex delicto, under Article 100 of the Revised Q: Is Liability Without Fault different from Damnum
Penal Code Absque Injuria?
2. Independent civil liabilities, such as those A: Yes. Liability without Fault includes:
(a) not arising from an act or omission complained of a. Strict Liability – there is strict liability if one is
as a felony, e.g., culpa contractual or obligations made independent of fault, negligence or intent
arising from law under Article 31 of the Civil Code after establishing certain facts specified by law. It
(such as breach of contract or tort), intentional torts includes liability for conversion and for injuries
under Articles 32 and 34, and culpa aquiliana under caused by animals, ultra-hazardous activities and
Article 2176 of the Civil Code nuisance.
b. Product Liability – is the law which governs the
(b) where the injured party is granted a right to file an liability of manufacturers and sellers for damages
action independent and distinct from the criminal resulting from defective products. (Aquino, T.,
action under Article 33 of the Civil Code (in cases of Torts and Damages, 2005, Second Ed.)
defamation, fraud and physical injuries).

2013 GOLDEN NOTES
TORTS
Q: What is the principle behind the prohibition against
unjust enrichment? 3. Doctrine of Attractive Nuisance
A: No one shall unjustly enrich himself at the expense of 4. State of Necessity (Art. 432) – A situation of
another (Pacific Merchandising Corp. v. Consolacion present danger to legally protected interests,
Insurance and Surety Co., Inc., 73 SCRA 564) in which there is no other remedy than the
injuring of another’s also legally protected
Coverage: the article applies only if: interest.
i. Someone acquires or comes into possession of
“something” which means delivery or acquisition CLASSIFICATION OF TORTS
of “things”; and
ii. Acquisition is undue and at the expense of Q: What are the classes of torts according to manner of
another, which means without any just or legal commission?
ground.
A:
Q: What is the remedy for unjust enrichment? 1. Negligent torts – It involves voluntary acts or
omissions which results in injury to others, without
A: Accion In Rem Verso. It is an action for recovery of what intending to cause the same.
has been paid without just cause.
2. Intentional torts – The actor desires to cause the
Note: Mistake is not an essential element, as opposed to solution consequences of his act or believes the consequences
indebiti where mistake is an essential element. are substantially certain to result therefrom.
Q: What are the requisites for accion in rem verso? This refers to a tort or wrong perpetuated by one
who intends to do that which the law has declared
A: wrong as contrasted with negligence in which the
1. That the defendant has been enriched; tortfeasor fails to exercise that degree of care in
2. That the plaintiff has suffered a loss; doing what is otherwise permissible (Black’s Law
3. That the enrichment of the defendant is without just th
Dictionary, 6 Edition, p. 1489).
or legal ground;
4. That the plaintiff has no other action based on 3. Strict liability – The person is made liable independent
contract, quasi-contract, crime or quasi-delict. of fault or negligence upon submission of proof of
certain facts.
Q: When may accion in rem verso be availed of?
ACCORDING TO SCOPE: GENERAL OR SPECIFIC
A: It can only be availed of if there is no other remedy to
enforce it based on contract, quasi-contract, crime or 1. General – the catch-all provisions on torts provided for
quasi-delict. in the Civil Code i.e. Articles 19, 20 and 21. The effect is
that “there is a general duty owed to every person not
Q: Is rendition of services included under Art. 22? to cause harm either willfully or negligently. Articles
19, 20, and 21 are provisions on human relations that
A: No. If services were rendered by someone benefiting “were intended to expand the concept of torts in this
another, it does not mean that the latter is exempted from jurisdiction by granting adequate legal remedy for the
indemnifying the former. The liability will lie on quasi- untold number of moral wrongs which is impossible
contract under Article 2146. for human foresight to specifically provide for in the
statutes.” (Aquino, 2005, citing PNB v. CA, et al. 83
Q: Is the owner of a property obliged to take reasonable SCRA 237)
care towards a trespasser for his protection or from
concealed danger? 2. Specific torts - It includes trespass, assault and battery,
negligence, products liability, and intentional infliction
A: GR: No. of emotional distress. As defined, torts fall into three
different categories: intentional, negligent and liability
XPN: (manufacturing and selling defective products),
1. Visitors – Owners of buildings or premises product liability tort.
owe a duty of care to visitors.
a. Art. 19, 20, 21 (catch-all provisions)
2. Tolerated Possession – The owner is still b. unjust enrichment (arts. 22, 23, 2142 &
liable if the plaintiff is inside his property by 2143)
tolerance or by implied permission. c. violation of right of privacy and family
relations
Common carriers may be held liable for d. dereliction of official duty of public officers
negligence to persons who stay in their premises e. unfair competition
even if they are not passengers. f. malicious prosecution

CIVIL LAW
g. violation of rights and liberties of another Q: What are the rules on liability for collapse of a
person building?
h. nuisance
A:
THE TORTFEASOR 1. The collapse of the building must be within 15 years
from the completion of the structure.
Q: Who are the persons liable for a quasi-delict? 2. The prescriptive period is 10 years following the
collapse.
A: Defendants in tort cases can either be natural or artificial 3. If the engineer or architect supervises the
beings. construction, he shall be solidarily liable with the
contractor.
Q: Can a corporation be held liable for torts? 4. The liability does applies to collapse or ruin, not to
minor defects.
A: Yes. A corporation may be held civilly liable in the same 5. Even if payment has been made, an action is still
manner as natural persons. (PNB v. CA, 83 SCRA 237) possible. (Art. 1723, NCC)
Note: With respect to close corporations, the stockholders who are Q: Who is liable when a building collapses during an
personally involved in the operation of the corporation may be earthquake?
personally liable for corporate torts under Section 100 of the
Corporation Code.
A: It depends.
1. If the proximate cause of the collapse of the
Q: What is the liability of the owner of a vehicle in case of
building is an earthquake, no one can be held
an accident?
liable in view of the fortuitous event.
2. If the proximate cause is, however, defective
A: In motor vehicle mishaps, the owner is solidarily liable
designing or construction, or directly attributable
with his driver, if the former, who was in the vehicle, could
to the use of inferior or unsafe material, it is clear
have, by the use of the due diligence, prevented the
that liability exists.
misfortune. It is disputably presumed that a driver was
negligent, if he had been found guilty or reckless driving or
Q: What is the liability of the the architect and builder to
violating traffic regulations at least twice within the next
the employer when the construction is defective?
preceding two months. (Art. 2184, NCC)
A: Solidary liability for damages if within 15 years from the
Q: What is the rule regarding the liability of proprietors of
completion of the structure the same should collapse.
buildings:
Q: What instance would make cities and municipalities
A:
liable for damages?
a. The proprietor of a building or structure is responsible
for the damages resulting from its total or partial
A: Cities and municipalities shall be subsidiarily liable for
collapse, if it should be due to the lack of necessary
the neglect of duty of a member of a city or municipal
repairs. (Art. 2190, NCC)
police force. (Art. 34, NCC)
b. Proprietors shall also be responsible for damages
caused: Note: The defense of having observed the diligence of a good
1) By the explosion of machinery which has not father of a family to prevent the damage is not available to the city
been taken care of with due diligence, and or municipality.
the inflammation of explosive substances
which have not been kept in a safe and Q: Who are joint tortfeasors?
adequate place;
2) By excessive smoke, which may be harmful A: All the persons who command, instigate, promote,
to persons or property; encourage, advice, countenance, cooperate in, aid, or abet
3) By the falling of trees situated at or near the commission of a tort, or who approve it after it is done,
highways or lanes, if not caused by force if done for their benefit; they are each liable as a principal,
majeure; to the same extent and in same manner as if they have
4) By emanations from tubes, canals, sewers or performed the wrongful act themselves. (Worcester
deposits of infectious matter, constructed v.Ocampo, 22 Phil 42)
without precautions suitable to the place.
(Art. 2191, NCC) Q: What is the nature of liability of joint tortfeasors?
A: They are solidarily liable for the damage caused. (Metro

Manila Transit Corporation v. CA, 298 SCRA 495)
Note: In case of injury to a passenger due to the negligence of the

driver of the bus on which he was riding and of the driver of

2013 GOLDEN NOTES
TORTS
another vehicle, the drivers as well as the owners of the two
vehicles are jointly and severally liable for damages. (Pineda, Torts Q: Does the above stated rule apply to all cases of
and Damages, 2009, p.144, citing Tiu v. Arriesgado 437 SCRA 426) violation of law?
ACT OR OMISSION AND ITS MODALITIES A: No. Generally, laws provide for their own sanctions and
methods of enforcement thereof. Article 20 applies only in
Q: When does liability for damages under quasi delict cases where the law does not provide for its own sanctions.
arises? Said article provides for a general sanction –indemnification
for damages (Pineda, Torts and Damages, 2009, p.329-330)
A: Whoever by act or omission causes damage to another,
there being fault or negligence, is obliged to pay for the Q: In view of the general sanction provided for under Art.
damage done (Art. 2176, NCC). 20, may a person have an absolute right to be
indemnified?
Q: What is an act?
A: No. It is essential that some right of his be impaired.
A: Any bodily movement tending to produce some effect in Without such, he is not entitled to indemnification. (Pineda,
the external world, it being unnecessary that the same be Torts and Damages, 2009, p.330)
actually produced, as the possibility of its production is
sufficient. (People v. Gonzales, 183 SCRA 309, 324) Note: Article 20 does not distinguish; the act may be done willfully
or negligently.
Q: When is there fault or negligence?
Q: Differentiate Article 20 from Article 21 of the NCC.
A: It consists in the omission of that diligence which is
required by the nature of the obligation and corresponds A: Article 20 speaks of the general sanction for all other
with the circumstances of the persons, of the time and of provisions of law which do not especially provide for their
the place (Art. 1173). own sanction. Article 21 on the other hand, speaks of act
which is legal but is contrary to morals, good custom, public
Note: Responsibility arising from negligence in the performance of order or public policy and is done with intent to injure.
every kind of obligation is demandable, but such liability may be
regulated by the courts, according to the circumstances (Art. 1172). Note: Any person who willfully causes loss or injury to another in a
manner that is contrary to morals, good customs or public policy
Q: What is the rule when negligence shows bad faith? shall compensate the latter for the damage. (Art. 21, NCC)
A: Responsibility arising from fraud is demandable in all Q: What are the elements of acts contra bonus mores
obligations (Art. 1171). Furthermore, in case of fraud, bad under Art. 21, NCC?
faith, malice or wanton attitude, the obligor shall be
responsible for all damages which may be reasonably A:
attributed to the non-performance of the obligation (Art. 1. There is an act which is legal;
2201). 2. But which is contrary to morals, good custom, public
order, or public policy; and
Q: If the law or contract does not state the degree of 3. It is done with intent to injure.
diligence required in the performance of the obligation,
what should be followed? Q: What is the rule on breach of promise to marry?
A: That which is expected of a good father of a family must A: GR: If a person promised to marry another and the
be observed (Art. 1173). promise was broken, no court can compel the promissee.
The right to marry is a personal one and is not subject to
Q: When is negligence excused? judicial compulsion.
A: When the events that transpired were unforeseen or, XPN: A breach of promise to marry may give rise to
which though unforeseen, were inevitable damages under certain circumstances:
XPN: a) if there is criminal or moral seduction (Art. 2219,
1. In cases specified by law par. 3 and 10)
2. When declared by stipulation b) actual damages suffered by reason of breach of
3. When the nature of the obligation requires the promise to marry. (Pineda, Torts and Damages,
assumption of risk 2009, p.333-339)
c) The aggrieved party may ask the other to
Q: Aside from quasi delict and abuse of rights, when may recognize the child, if there is any, and to give
liability for damages arise? support to said child in addition to
compensatory damages. (Suarez, 2011, 195)
A: Every person who, contrary to law, willfully or
negligently causes damage to another, shall indemnify the Q: Rosa was leasing an apartment in the city. Because of
latter for the same (Art. 20, NCC). the RentControl Law, her landlord could not increase the

CIVIL LAW
rental as much as he wanted to, nor terminate her lease Q: Who are the persons vicariously liable?
as long as she was paying her rent. In order to force her to
leave the premises, the landlord stopped making repairs A: F-GOES-T
on the apartment, and caused the water and electricity 1. Father, or in case of death or incapacity, mother:
services to be disconnected. The difficulty of living a. damage caused by minor children
without electricity and running water resulted in Rosa's b. living in their company
suffering a nervous breakdown. She sued the landlord for 2. Guardians:
actual and moral damages. Will the action prosper? (1996 a. for minors or incapacitated persons
Bar Question) b. under their authority
c. living in their company
A: Yes, based on quasi-delict under the human relations 3. Owners and managers of establishments:
provisions of the NCC (Articles 19, 20 and 21) because the a. for their employees
act committed by the lessor is contrary to morals. b. in the service of the branches in which they
are employed, or;
Moral damages are recoverable under Article 2219(10) in c. on the occasion of their functions
relation to Article 21. Although the action is based onquasi- 4. Employers:
delict and not on contract, actual damages may be a. damages caused by employees and
recovered if the lessee is able to prove the losses household helpers
andexpenses she suffered. b. acting within the scope of their assigned
tasks
Q: What is the principle of vicarious liability or law on c. even if the employer is not engaged in any
imputed negligence? business or industry
5. State – acting through a special agent and not
A: Under Art. 2180, a person is not only liable for torts when the damage has been caused by the official
committed by him, but also for torts committed by others to whom the task done properly pertains.
with whom he has a certain relation or for whom he is 6. Teachers or heads of establishments:
responsible. a. of arts and trades
b. for damages caused by their pupils and
Q: How is quasi-delict under Art. 2180 interpreted? students or apprentices
c. so long as they remain in their custody (Art.
A: A person or juridical entity is made liable solidarily with a 2180, NCC)
tortfeasor simply by reason of his relationship with the
latter. The relationship may either be a parent and child; Q: When is the actual tortfeasor not exempted from
guardian and ward; employer and employee; school and liability?
student.
A: The minor, ward, employee, special agent, pupil,
Q: What is the presumption of negligence on persons students and apprentices who actually committed the
indirectly responsible? delictual acts are not exempted by the law from personal
responsibility. They may be sued and made liable alone as
A: The presumption of law is that there was negligence on when the person responsible for them or vicarious obligor
the part of the master or employer either in the selection of proves that he exercised the diligence of a good father of
the servant or employee (culpa in eligiendo) or in the a family or when the minor or insane person has no parents
supervision over him after the selection (culpa vigilando), or guardians. In the latter instance, they are answerable
or both. with their own property. (Pineda, Torts and Damages,
2009, p.83)
Note: The presumption is juris tantum and not juris et de jure;
subsequently, it may be rebutted. Accordingly, if the employer PARENTS
shows to the satisfaction of the court that in the selection and
supervision of his employee he has exercised the care and diligence
Q: What are the requisites of vicarious liability of parents?
of a good father of a family, the presumption is overcome and he is
relieved of the liability.
A:
Q: What is the nature of the responsibility of a vicarious 1. The child is below 21 years of age
obligor? 2. The child committed a tortuous act to the
damage and prejudice of another person
A: His liability is primary and direct, not subsidiary. He is 3. The child lives in the company of the parent
solidarily liable with the tortfeasor. His responsibility is not concerned whether single or married (Pineda,
conditioned upon the insolvency of or prior recourse Torts and Damages, 2009, p.85).
against the negligent tortfeasor (De Leon Brokerage v. CA,
G.R. 15247, Feb. 28, 1962)

2013 GOLDEN NOTES
TORTS
Q: What is the difference between a minor child and an GUARDIAN
incapacitated person in the preceding number?
Q: Who is a minor under this article?
A: Minors here refer to those who are below 21 years and
not to those below 18 years. While incapacitated persons A: Minors here refer to those who are below twenty-one
refer to persons beyond 21 years of age but are (21) years and not to those below 18 years. The law
incapacitated such as those who are insane or imbecile. The reducing the majority age from 21 to 18 years did not
reason is that R.A. 6809, the law reducing the age of amend these paragraphs. (Art. 236 Family Code as
majority states in Art. 236 that “Nothing in this code shall amended by RA No. 6809) (Pineda, Torts and Damages,
be construed to derogate from the duty or responsibility of 2009, p.81-82)
parents and guardians for children and wards below 21
years of age mentioned in the second and third paragraphs Q: Are de facto guardians covered by Art. 2180?
of Art. 2180 of the Civil Code” (Pineda, Torts and Damages,
2009, p.81) A: Yes, they are liable for acts committed by children while
living with them and are below 21 years of age, the law
Q: What is the basis of the parents’ vicarious liability? being applied by analogy. De facto guardians are relatives
and neighbors who take upon themselves the duty to care
A: This liability is made natural as a logical consequence of and support orphaned children without passing through
the duties and responsibilities of parents exercising judicial proceedings. (Pineda, Torts and Damages, 2009,
parental authority which includes controlling, disciplining p.88)
and instructing their children. In this jurisdiction the
parent’s liability is vested by law which assumes that when OWNERS AND MANAGERS OF ESTABLISHMENTS AND
a minor or unemancipated child living with their parent, ENTERPRISES
commits a tortuous act, the parents are presumed
negligent in the performance of their duty to supervise the Q: In what sense do the terms “owners and managers”
children under their custody. A presumption which is juris used?
tantum, not juris et de jure, and can be rebutted only by
showing proof of having exercised and observed all the A: They are used in the sense of “employer” and do not
diligence of a good father of a family (diligentissimi patris include the manager of a corporation who himself is just an
familias) (Tamagro v. CA, 209 SCRA 519). employee (Phil. Rabbit Bus Lines v. Phil. American
Forwarders, Inc., G.R. No. L-25142, Mar. 25, 1975).
Q: In the event of death or incapacity of the parents, who
are liable for acts or omissions of minors? However, a manager who is not an owner but who assumes
the responsibility of supervision over the employees of the
A: In default of the parents or a judicially appointed owner may be held liable for the acts of the employees.
guardian, parental authority shall be exercised by the (Pineda, Torts and Damages, 2009, p.89)
following persons in the order indicated:
1. Surviving grandparents; Q: What must be proved in order to make the employer
2. Oldest sibling, over 21 years old unless unfit or liable?
unqualified;
3. Child’s actual custodian, over 21 years old A: To make the employer liable under Art. 2180, it must be
unless unfit or disqualified. established that the injurious or tortuous act was
committed at the time the employee was performing his
Note: Judicially adopted children are considered legitimate children functions (Marquez v. Castillo, 68 Phil 568; Cerf v.Medel, 33
of their adopting parents (Sec. 17, RA 8552 Domestic Adoption Act Phil 37).
of 1988). Thus, adopters are civilly liable for their tortuous/criminal
acts if the children live with them and are minors.
EMPLOYERS
Q: Is the mother liable simultaneously with the father?
Q: What is the distinction between par. 4 and 5?
A: No. The law does not make the father and mother
A:
simultaneously liable. It is only in the case of death or
Owners/Managers Employers (Par 5)
incapacity of the father, that the mother may be held liable.
(Par 4)
Note: Consequently, the wife as a co-defendant with the husband Requires engagement in The employers need not
or if impleaded alone while the husband is alive and well, may business on the part of be engaged in business
move to dismiss the case filed against her for being premature. the employers as the or industry.
(Romano v. Parinas, 101 Phil. 141) law speaks of
“establishment or
As for an illegitimate child, if he is acknowledged by the father and enterprise”
live with the latter, the father shall be responsible. However, if he
is not recognized by the putative father but is under the custody
and supervision of the mother, it is the latter who is the one
vicariously liable. (Pineda, Torts and Damages, 2009, p.87)

CIVIL LAW
Q: Who is an employer? 521 [1993]; Delsan Transport Lines v, C&tA Construction,

412 SCRA 524). Likewise, if the driver is charged and
A: Employer includes any person acting directly or indirectly convicted in a criminal case for criminal negligence, BT is
in the interest of an employer in relation to an employee subsidiarily liable for the damages arising from the criminal
and shall include the government and all its branches, act.
subdivisions and instrumentalities, all government-owned
or controlled corporations and institutions, as well as non- Q: Is it required that the employer is engaged in some kind
profit private institutions, or organizations. (Art. 97, P.D. of industry or work?
442)
A: No. Negligent acts of employees, whether or not the
Q: What is the presumption on the negligence of the employer is engaged in a business or industry, are covered
employer? so long as they were acting within the scope of their
assigned task. For, admittedly, employees oftentimes wear
A: The employer is presumed to be negligent and the different hats. They perform functions beyond their office,
presumption flows from the negligence of the employee. title or designation but which, nevertheless, are still within
Once the employee’s fault is established, the employer can the call of duty. (Castilex Industrial Corporation v. Vasquez,
then be made liable on the basis of the presumption that et. al.)
the employer failed to exercise diligentissimipatris families
in the selection and supervision of its employees. (LRTA v. Q: Is it required that the employee must be performing his
Navidad, G.R. 145804, Feb. 6, 2003) assigned task at the time that the injury is caused?
Q: What is required before an employer may be held liable A: Yes. The vicarious liability of employers attaches only
for the act of its employees? when the tortuous conduct of the employee relates to, or is
in the course of his employment. (Valenzuela v. CA)
A:
1. The employee was chosen by the employer However, it is not necessary that the task performed by the
personally or through another; employee is his regular job or that which was expressly
2. The service is to be rendered in accordance with given to him by the employer. It is enough that the task is
orders which the employer has the authority to indispensable to the business or beneficial to the
give all times; employer. (Filamer Christian Institute v. IAC, 212 SCRA 637)
3. That the elicit act of the employee was on the
occasion or by reason of the functions entrusted Q: After working overtime up to midnight, Alberto, an
to him. executive of an insurance company drove a company
vehicle to a favorite Videoke bar where he had some
Note: Before the employer’s subsidiary liability is exacted, there drinks and sang some songs with friends to "unwind". At
must be proof that: 2:00 a.m., he drove home, but in doing so, he bumped a
1. they are indeed the employer of the convicted tricycle, resulting in the death of its driver. May the
employee
insurance company be held liable for the negligent act of
2. the former are engaged in some kind of industry
3. the crime was committed by the employees in the Alberto? Why? (2001 Bar Question)
discharge of their duties
4. that the execution against the latter has not been A: No. The insurance company is not liable because when
satisfied due to insolvency. the accident occurred, Alberto was not acting within the
assigned tasks of his employment.
Q: OJ was employed as professional driver of MM Transit
bus owned by Mr. BT. In the course of his work, OJ hit a It is true that under Art. 2180 (par. 5), employers are liable
pedestrian who was seriously injured and later died in the for damages caused by their employees who were acting
hospital as a result of the accident. The victim’s heirs sued within the scope of their assigned tasks. However, the mere
the driver and the owner of the bus for damages. Is there fact that Alberto was using a service vehicle of the
a presumption in this case that Mr. BT, the owner, had employer at the time of the injurious accident does not
been negligent? If so, is the presumption absolute or not? necessarily mean that he was operating the vehicle within
(2004 Bar Question) the scope of his employment. In Castilex Industrial Corp. v.
Vasquez Jr (321 SCRA393 [1999]), the Supreme Court held
A: Yes, there is a presumption of negligence on the part of that notwithstanding the fact that the employee did some
the employer. However, such presumption is rebuttable. overtime work for the company, the former was,
The liability of the employer shall cease when they prove nevertheless, engaged in his own affairs or carrying out a
that they observed the diligence of a good father of a family personal purpose when he went to a restaurant at 2:00
to prevent damage (Article 2180, Civil Code). When the a.m. after coming out from work. The time of the accident
employee causes damage due to his own negligence while (also 2:00 a.m.) was outside normal working hours.
performing his own duties, there arises the juris tantum
presumption that the employer is negligent, rebuttable
only by proof of observance of the diligence of a good
father of a family (Metro Manila Transit v. CA, 223 SCRA

2013 GOLDEN NOTES
TORTS
Q: What are the defenses available to an employer? Employer is liable even Petitioner must prove
if not engaged in that the employer is
A: business engaged in business
1. Exercise of due diligence in the selection and Proof of negligence is by Proof beyond
supervision of its employees (except in criminal mere preponderance of reasonable doubt is
action); evidence required
2. The act or omission was made outside working
hours and in violation of company’s rules and Q: Arturo sold his Pajero to Benjamin for P1M. Benjamin
regulations. took the vehicle but did not register the sale with the Land
Transportation Office. He allowed his son Carlos, a minor
Q: What are the remedies of the injured party in pursuing who did not have a driver's license, to drive the car to buy
the civil liability of the employer for the acts of his pan de sal in a bakery. On the way, Carlos driving in a
employees? reckless manner, sideswiped Dennis, then riding a bicycle.
As a result, he suffered serious physical injuries. Dennis
A: filed a criminal complaint against Carlos for reckless
1. If he chooses to file a civil action for damages based imprudence resulting in serious physical injuries.
on quasi-delict under Article 2180 and succeeds in
proving the negligence of the employee, the liability of 1. Can Dennis file an independent civil action against
the employer is primary, direct and solidary. It is not Carlos and his father Benjamin for damages based on
conditioned on the insolvency of the employee (Metro quasi-delict?
Manila Transit Corp. v. CA, G.R. No. 118069, Nov. 16,
1998). 2. Assuming Dennis' action is tenable, can Benjamin raise
the defense that he is not liable because the vehicle is not
2. If he chooses to file a criminal case against the registered in his name? (2006 Bar Question)
offender and was found guilty beyond reasonable
doubt, the civil liability of the employer is subsidiary. A:
The employer cannot use as a defense the exercise of 1. Yes, Dennis can file an independent civil action against
the diligence of a good father of a family. Carlos and his father for damages based on quasi-
delict there being an act or omission causing damage
Once there is a conviction for a felony, final in to another without contractual obligation. Under
character, the employer under Article 103 of the RPC, Section 1 of Rule 111 of the 2000 Rules on Criminal
is subsidiary liable, if it be shown that the commission Procedure, what is deemed instituted with the
thereof was in the discharge of the duties of the criminal action is only the action to recover civil
employee. A previous dismissal of an action based on liability arising from the act or omission punished by
culpa aquiliana could not be a bar to the enforcement law. An action based on quasi-delict is no longer
of the subsidiary liability required by Art. 103 RPC deemed instituted and may be filed separately (Section
(Jocson, et al. v. Glorioso, G.R. L-22686, Jan. 30, 1968) 3, Rule 111, Rules of Criminal Procedure).
(Pineda, pp. 101-102, 2009 ed.)
2. No, Benjamin cannot raise the defense that the vehicle
Q: Would the defense of due diligence in the selection and is not registered in his name. His liability, vicarious in
supervision of the employee available to the employer in character, is based on Article 2180 because he is the
both instances? (1997 Bar Question) father of a minor who caused damage due to
negligence. While the suit will prosper against the
A: The defense of diligence in the selection and supervision registered owner, it is the actual owner of the private
of the employee under Article 2180 of the Civil Code is vehicle who is ultimately liable (See Duavit v.CA, G.R.
available only to those primarily liable thereunder, but not No. L-29759, May 18, 1989). The purpose of car
to those subsidiary liable under Article 103 of the Revised registration is to reduce difficulty in identifying the
Penal Code (Yumul v. Juliano, G.R. No. 47690, Apr., 28, party liable in case of accidents (Villanueva v.
1941). Domingo, G.R. No. 144274, Sept. 14, 2004).
Q: Give the distinctions on the employer’s liability under STATE

Art. 2180 NCC and Revised Penal Code
Q: When is the State liable for the acts of others?
A:
CIVIL CODE RPC A: The State is only liable for the negligent acts of its
Liability is direct, Liability is subisidiary officers, agents and employees when they are acting as
primary, and solidary - special agents. The State has voluntarily assumed liability
the employer may be for acts done through special agents. (Pineda, Torts and
sued even without suing Damages, 2009, p.105)
the employee
Diligence of a good Diligence of a good Note: The State assumes the role of an ordinary employer and will
father of a family is a father of a family is not be held liable for the special agent’s torts (Fontanilla v. Malianan).
defense a defense If the act is performed by an official upon whom previously

CIVIL LAW
devoted the duty of doing the act performed, it is the official, not Q: Is the application of Article 2180 limited to school of
the State, who is liable for damages by the act he performed arts and trades?
(Pineda, Torts and Damages, Annotated, 2004 ed.).
A: No. It applies to all, including academic institutions
Q: Who is a special agent? where the teacher-in-charge is liable for the acts of his
students. In the case of establishments of arts and trades, it
A: A special agent is one who receives a definite and fixed is the head thereof, and only he, who shall be liable.
order or commission, foreign to the exercise of the duties (Amadora v CA, 160 SCRA 315)
of his office.
Note: There is really no substantial difference distinction between
An employee who on his own responsibility performs the academic and non-academic schools in so far as torts
functions inherent in his office and naturally pertaining committed by their students are concerned. The same vigilance is
thereto is not a special agent. (Meritt v. Government of the expected from the teacher over the student under their control
Philippine Islands, 34 Phil 311) and supervision, whatever the nature of the school where he is
teaching.
Q: What are the aspects of liability of the State?
Q: When is a student considered in the custody of the
A: school authorities?
1. Public/Governmental – where the State is liable only
for the tortuous acts of its special agents. A: The student is in the custody of the school authorities as
2. Private/Non-governmental – when the State is long as he is under the control and influence of the school
engaged in private business or enterprise, it becomes and within its premises, whether the semester has not
liable as an ordinary employer. (Fontanilla v. ended, or has ended or has not yet begun. The term
Maliaman; NIA v. Fontanilla, 179 SCRA 685) “custody” signifies that the student is within the control
and influence of the school authorities. The teacher in
Note: If the special agent is not a public official and is charge is the one designated by the dean, principal, or
commissioned to perform non-governmental functions, then the other administrative superior to exercise supervision over
State assumes the role of an ordinary employer and will be held the pupils or students in the specific classes or sections to
liable as such for the tortuous acts of said agent. If the State which they are assigned. It is not necessary that at the time
commissioned a private individual to perform a special
of the injury, the teacher is physically present and in a
governmental task, it is acting through a special agent within the
meaning of the provision (NIA v. Fonatanilla, supra)
position to prevent it.
TEACHERS AND HEADS OF ESTABLISHMENTS OF ARTS AND Q: Can the liability be imputed to the teacher-in-charge
TRADES even if the student has already reached the age of
majority?
Q: What is the basis of the teacher’s vicarious liability?
A: Yes. Under Article 2180, age does not matter. Unlike the
A: The basis of the teacher’s vicarious liability is, as such, parent who will be liable only if the child is still a minor, the
they acting in Loco Parentis (in place of parents). However teacher is held answerable by the law for the act of the
teachers are not expected to have the same measure of student regardless of the age of the student (Pineda, Torts
responsibility as that imposed on parent for their influence and Damages, 2009, p.113, citing Amadora v. Court of
over the child is not equal in degree. The parent can instill Appeals, 160 SCRA 315).
more lasting discipline more lasting disciple on the child
than the teacher and so should be held to a greater Q: Who is a minor under Art.221 of the Family Code?
accountability than the teacher or the head for the tort
committed by the child. A: The term “unemancipated minor” found in Art. 221
means children below 18 years of age. This is in contrast
Q: What is the rationale of the liability of school heads with the “minor children” found in Art. 2180(2) of NCC
and teachers for tortuous acts of their pupil and students? which refers to children below 21 years. To avoid the
overlapping in ages, the better option to settle the conflict
A: The rationale of school heads and teachers liability for is to consider Art 221 as totally superseded by Art 236(FC)
tortuous acts of their pupil and students, so long as they as amended by R.A. 6809. Thus:
remain in custody, is that they stand, to a certain extent, as
to their pupils and students, in loco parentis and are called GR: 18 years of age – parental authority ceases
upon to “exercise reasonable supervision over the conduct (emancipation)
of the child.” This is expressly provided for in Articles 349,
350 and 352 of the Civil Code. (Pineda, Torts and Damages, XPNS: 21 years of age in the following cases
2009, p.114) 1. marriage
2. Art. 2180(2) NCC
Note: Art. 221 of the Family Code provides that parents and other
persons exercising parental authority shall be civilly liable for the
injuries and damages caused by the act or omission or their

2013 GOLDEN NOTES
TORTS
unemancipated children living in their company and under parental PROXIMATE CAUSE
authority subject to the appropriate defenses provided by law.
Q: What is proximate cause?
Q: Distinguish between Articles 218 of the Family Code
and 2180 of the New Civil Code A: That cause, which, in natural and continuous sequence,
unbroken by any efficient intervening cause, produces the
A: injury, and without which the result would not have
ARTICLE 218 ARTICLE 2180 occurred.
School, its administrators, Teachers, head of
teachers engaged in child establishment in arts and Note: When the plaintiff's own negligence was the immediate and
care are made expressly trades are made expressly proximate cause of his injury, he cannot recover damages. But if his
liable liable negligence was only contributory, the immediate and proximate
Liability of school, its cause of the injury being the defendant's lack of due care, the
No such express solidary plaintiff may recover damages, but the courts shall mitigate the
administrators, teachers is
nor subsidiary liability is damages to be awarded (Art. 2179).
solidary and parents are
stated
made subsidiary liable
Q: Distinguish proximate, immediate, intervening, remote
Students involved must be Students involved are not and concurrent causes
a minor necessarily minors
A:
Q: What is the nature of the liability of the persons
PROXIMATE INTERVENING REMOTE CONCURRENT
enumerated under Art. 218 of the Family Code?
CAUSE CAUSE CAUSE CAUSE
A: Those given authority and responsibility under Art. 218 One that
It is the destroys the
shall be principally and solidarily liable for damages caused
cause causal Causes
by the acts or omissions of the unemancipated minor. The
which, in connection That cause brought about
parents, judicial guardians or the persons exercising
natural and between the which some by the acts
substitute parental authority over said minor shall be
continuous negligent act independent and omissions
subsidiarily liable. The respective liabilities shall not apply if
sequence, and injury and force merely of third
it is proved that they exercised proper diligence required
unbroken by thereby took persons which
under the particular circumstances (Art 219).
any efficient negatives advantage of makes the
intervening liability. to defendant still
Q: A 15-year-old high school student stabs his classmate
cause, accomplish liable. Here,
who is his rival for a girl, while they were going out of the
produces Note: something the proximate
classroom after their last class. Who may be held liable?
the injury, Foreseeable not the cause is not
(2005 Bar Question)
and without Intervening natural necessarily
which the causes cannot effect the sole cause
A: Under Section 218 of the Family Code, the school, its
result would be considered thereof. of the
administrators and teachers, or the individual, entity or sufficient
not have accident
institution engaged in child care shall have special parental intervening
occurred.
authority and responsibility over the minor child while causes
under their supervision, instruction or custody. Authority
and responsibility shall apply to all authorized activities Q: What are the tests to determine whether a cause is
whether inside or outside the premises of the school, entity proximate?
or institution.
A:
Q: What defense, if any, is available to them? 1. Cause-In-Fact Test – It is necessary that there is proof
that defendant’s conduct is a factor in causing
A: These persons identified by law to be liable may raise the plaintiff’s damage.
defense that they exercised proper diligence required a. But For Test / Sine Qua Non Test
under the circumstances. Their responsibility will cease b. Substantial Factor Test
when they prove that they observed all the diligence of a c. Necessary and Sufficient Test (NESS) (Aquino,
good father of a family to prevent damage. As regards the Torts and Damages, 2005, p.267-270)
employer, if he shows to the satisfaction of the court that in 2. Policy test – The law limits the liability of the
the selection and in the supervision of his employees he has defendant to certain consequences of his action; if the
exercised the care and diligence of a good father of a damage or injury to the plaintiff is beyond the limit of
family, the presumption is overcome and he is relieved the liability fixed by law, the defendant’s conduct
from liability. (Layugan v. IAC, G.R. No. L-49542, Sept. 12, cannot be considered the proximate cause of the
1980). damage.
Note: Such limit of liability is determined by applying these

subtests of the policy test:
a. Foreseeability Test;
b. Natural and Probable Consequence Test;

CIVIL LAW
c. Natural and Ordinary or Direct Consequences Test; fraught with risk and he should therefore foresee the impending
d. Hindsight Test; harm that will result if he continues. (Suarez, 2011, 117)
e. Orbit of Risk Test;
f. Substantial Factor Test. (Aquino, Torts and Damages, EFFICIENT INTERVENING CAUSE
2005, p.273)
Q: What is an efficient intervening cause?
Q: What is the “but for” test?
A: It is one which destroys the causal connection between
A: This is also known as the sine qua non test. It considers the negligent act and the injury and thereby negatives
whether the injury would not have occurred but for the liability (Morril v.Morril, 60 ALR 102, 104 NJL 557). It is
defendant's negligent act. Defendant’s conduct is the cause sometimes called, novusactusinterviens.
in fact of the injury if the damage would not have resulted
had there been no negligence on the part of the defendant. Q: When is there no efficient intervening cause?
Note: The conduct of the defendant is not the cause of the event if
A: If the force created by the negligent act or omission have
the event would have occurred without it. (Suarez, 2011, 117)
either:
1. remained active itself; or
Q: What is the substantial factor test?
2. created another force which remained active until
it directly caused the result; or
A: It makes the negligent conduct the cause-in-fact of the
3. created a new active risk of being acted upon by
damage if it was a substantial factor in producing the
the active force that caused the result. (57 Am.
injuries. It is important in cases where there are concurrent
Jur. 2d 507)
causes (Aquino, Torts and Damages, 2005, p.268-269)
CAUSE vs. CONDITION
Q: What is the principle of concurrent causes?
Q: Distinguish cause and condition
A: Where the concurrent or successive negligent acts or
omissions of two or more persons, although acting
A: Cause is the active force while condition is the passive
independently, are in combination with the direct and
rd situation. The former is the active “cause” of the harm and
proximate cause of a single injury to a 3 person, and it is
the latter is the existing “conditions” upon which the cause
impossible to determine what proportion each contributed
operated.
to the injury, either of them is responsible for the whole
injury, even though his act alone might not have caused the
Note: If the defendant has created only a passive static condition
entire injury. which made the damage possible, the defendant is said not to be
liable.
Q: What is the necessary and sufficient test?
LEGAL INJURY
A: The act or omission is a cause-in-fact if it is a necessary
element of a sufficient set. Q: What is injury as distinguished from damage and
damages?
Q: Explain natural and probable test.
A: Injury is the illegal invasion of a legal right; damage is
A: Where the defendant’s liability is recognized only if the the loss, hurt, or harm which results from the injury; and
harm or injury suffered is the natural and probable damages are the recompense or compensation awarded
consequence of his act or omission complained of. (Banzon for the damage suffered.
v. CA, 175 SCRA 297)
Q: What is a right?
Q: Explain the foreseeability test
A: It is a legally enforceable claim of one person against
A: Where the particular harm was reasonably foreseeable another, that the other shall do a given act, or shall not do a
at the time of the defendant’s misconduct, his act or given act (Pineda, Persons, p. 23)
omission is the legal cause thereof. To be negligent, the
defendant must have acted or failed to act in such a way Q: What are the kinds of rights? Distinguish.
that an ordinary reasonable man would have realized that
certain interests of certain persons were unreasonably A:
subjected to a general but definite class of risk which made 1. Natural Rights – Those which grow out of the nature
the actor’s conduct negligent, it is obviously the of man and depend upon personality.
consequence for the actor must be held legally responsible
(Pineda, Torts and Damages, 2009, p.53). E.g. right to life, liberty, privacy, and good reputation.
Note: A prudent man placed in the position of the defendant

would have recognized that the course which he will pursue was

2013 GOLDEN NOTES
TORTS
2. Political Rights – Consist in the power to participate, Q: What are the torts committed against property?
directly or indirectly, in the establishment or
administration of government. A:
1. trespass to land,
E.g. right of suffrage, right to hold public office, right of 2. trespass to chattels, and
petition. 3. conversion.
3. Civil Rights – Those that pertain to a person by virtue Q: What are the torts that cause injury to relations?
of his citizenship in a state or community.
A:
E.g. 1. Family relations
1. property rights, a. Alienation of affection
2. marriage, b. Loss of consortium
3. equal protection of laws, c. Criminal conversation (adultery)
4. freedom of contract, trial by jury. (Pineda, 2. Social relations
Persons, p. 24) a. Meddling with or disturbing family relations
5. Rights of personalty or human rights; b. Intriguing to cause another to be alienated
6. Family rights; and from his friends
7. Patrimonial rights: 3. Economic relations
i. Real rights a. Interference with contractual relations
ii. Personal rights. (Rabuya Persons, p. 19) b. Unfair competition
4. Political relations
Q: What is meant by damnum absque injuria? a. Violation of right to suffrage
b. Violation of other political rights (freedom of
A: There is no liability even if there is damage because speech, press, assembly and petition, etc.)
there was no injury.
INTENTIONAL TORTS
The literal meaning is “damage without injury.” This means
that although the victim suffered physical damages or Q: What is intentional tort?
injury, the same is not considered a “legal injury” which
entitles him to recover damages. (Suarez, 2011, 25) A: It is a tort or wrong perpetrated by one who intends to
do that which the law has declared wrong as contrasted
Note: There can be damage without injury in those instances in with negligence in which the tortfeasor fails to exercise that
which the loss or harm was not the result of a violation of a legal degree of care in doing what is otherwise permissible
duty. In such cases, the consequences must be borne by the th
(Black’s Law Dictionary, 6 edition, p. 1489).
injured person alone.
Note: Intentional torts are those which involve malice or bad faith.
Q: What are the available remedies for a person whose
rights have been violated? Q: What is intent from the point of view of torts
A: Legal remedies are either preventive or compensatory. A: It refers either to a person’s desire that certain
Every remedy in a certain sense is preventive because it consequences result from his actions or even his knowledge
threatens certain undesirable consequences to those who that those results are substantially certain to occur as a
violate the rights of others. result of his actions (Garratt v. Dailey, 46 Wash 2d 197,
1955)
The primary purpose of a tort action is to provide
compensation to a person who was injured by the tortuous Q: What is the doctrine of transferred intent?
conduct of the defendant. The remedy of the injured
person is therefore primarily an action for damages against A: It arises when a person intends to commit a tort against
the defendant. (Aquino, Torts and Damages, 2005, p.20) one person and injury to another results instead. For
intentional tort purposes, the intent will be deemed to be
CLASSES OF INJURY transferred from the intended victim to the actual one (U.S.
v. Maisa, 8 Phil 597)
Q: What are the torts committed against persons?
Q: What are the seven major intentional torts?
A:
1. assault, A: FITTED CAB
2. battery, 1. False Imprisonment (Dignitary Tort)
3. false imprisonment, 2. Trespass to land
4. intentional infliction of emotional distress, and 3. Trespass to chattels (Trover)
5. fraud 4. Intentional Infliction of Emotional Distress
5. Conversion
6. Assault

CIVIL LAW
7. Battery person to have apprehension of such harmful or

offensive contact;
Q: Enumerate the intentional physical harms giving rise to 3. That a harmful or offensive contact with the body of a
tort liability person actually resulted;
4. That the person in some sensed “caused” the harmful
A: or offensive contact, either because he himself
1. Battery touched another person or because he set in motion
2. Assault some force that actually did the touching;
3. False Imprisonment 5. That the person did not consent to the contact.
4. Trespass to land
5. Trespass to Chattels Q: Is actual contact necessary in battery?
6. Conversion
A: Yes. Unlike assault, battery involves an actual contact.
Q: Enumerate the intentional non- physical harms giving The contact can be by one person (the tortfeasor) of
rise to tort liability another (the victim), or the contact may be by an object
brought about by the tortfeasor. For example, the
A: intentional contact by a car is a battery.
1. Violation of personal dignity
2. Infliction of emotional distress Note: Unlike criminal law, which recognizes degrees of various
3. Violation of privacy crimes involving physical contact, there is but a single tort of
a. Appropriation battery. Lightly flicking a person's ear is battery, as is severely
beating someone with a tire iron. Neither is there a separate tort
b. Intrusion
for a battery of a sexual nature.
c. public disclosure of private facts
d. false light in the public eye
Q: What are some rules in determining liability for tort
4. Malicious prosecution
based on battery?
5. Defamation
6. Fraud or misrepresentation
A:
7. Seduction
1. The victim of a battery need not be aware of the act at
8. Unjust dismissal
the time for the tort to have occurred.
9. Violation of rights committed by public officers
2. Battery is a form of trespass to the person and as such no
actual damage (e.g. injury) needs to be proved. Only proof
Q: What are the major defenses to intentional torts?
of contact (with the appropriate level of intention or
negligence) needs to be made.
A: DODD SLASH CORN
3. If there is an attempted battery, but no actual contact,
1. Defense of Others
that may constitute a tort of assault.
2. Defense of land/chattels
4. Battery need not require body-to-body contact. Touching
3. Discipline
an object "intimately connected" to a person (such as an
4. Self defense
object he or she is holding) can also be battery.
5. Legal Authority
5. A contact may constitute a battery even if there is a delay
6. Shoplifter Detention
between the defendant's act and the contact to the
7. Consent
plaintiff's injury.
8. Recapture of Chattels
9. Necessity
Q: What is the eggshell skull theory?
INTENTIONAL PHYSICAL HARM
A: It is a legal doctrine that says the wrongdoer takes the
victim in the condition he/she finds him. There is no
BATTERY (PHYSICAL INJURY)
allowance for an already weakened state of the injured
party. If a defendant negligently injures someone, the
Q: What is battery as a basis for tort liability?
defendant is responsible for all the consequences, whether
they were foreseeable or not.
A: It is the intentional, unprivileged, and either harmful or
offensive contact with the person or a third person or an Note: The term implies that if a person had a skull as delicate as
imminent apprehension of such a contact. that of the shell of an egg, and a tortfeasor who was unaware of
the condition injured that person's head, causing the skull
Q: What are the elements of battery? unexpectedly to break, the defendant would be held liable for all
damages resulting from the wrongful contact, even if the
A: tortfeasor did not intend to cause such a severe injury.
1. There must be a voluntary act;
2. That the person either (a) intended to cause a harmful
or offensive contact with his body or with the body of
some third person or (b) intended to cause a third

2013 GOLDEN NOTES
TORTS
ASSAULT (GRAVE THREAT)
Q: Is actual contact necessary in assault?
Q: What is assault in the context of torts?
A: No. As distinguished from battery, assault need not to
A: It is the tort of acting intentionally and voluntarily involve actual contact—it only needs intent and the
causing the reasonable and imminent apprehension of an resulting apprehension. Assault may also be committed by
immediate harmful or offensive contact. words alone, but this rarely happens. For example, if a
person says to another to duck, intending to make the
Q: What are the elements of assault as a basis for tort latter think that he is about to be hit, that is an assault even
liability? though the former makes no gesture.
A: Note: A battery can occur without a preceding assault, such as if a

1. That a person committed a voluntary act; person is struck in the back of the head. Fear is not required, only
2. That the person’s act created in another person an anticipation of subsequent battery.
apprehension of immediate harmful or offensive contact
with the latter’s person; Q: What are some defenses in assault?
3. That the person intended to cause either a harmful or
offensive contact or an apprehension of such a contact; A: Assault can be justified in situations of self-defense or
4. That there was a causal connection between the attacker defense of a third party where the act was deemed
and the other person’s apprehension; reasonable. It can also be justified in situations where
5. The victim lacks consent. consent can often be implied (i.e. sports competitions).
Q: When is an actor liable for tort based on assault? FALSE IMPRISONMENT (DIGNITARY TORT/ILLEGAL
DETENTION)
A: An actor is liable for assault if:
1. He acts intending to cause a harmful or offensive contact Q: What are the elements of false imprisonment as a basis
with the person of the other, or an imminent apprehension for tort liability?
of such a contact, and
2. The other is thereby put in such imminent apprehension. A:
1. An act or omission on the part of defendant that confines
Note: Assault requires intent. Actual ability to carry out the or restrains plaintiff
apprehended contact is not necessary. 2. That plaintiff is confined or restrained to a bounded area;
3. Intent
Q: When is an act not considered an assault? 4. Causation
5. Awareness of the defendant of the confinement that the
A: An act intended as a step toward the infliction of a future defendant was actually harmed by it
contact, which is so recognized by the other, does not make
the actor liable for an assault under the rule. Note: In the case of People v. Bisda, 406 SCRA 454, moral damages
may be awarded to a victim of illegal arrest and detention,
especially if the victim is a minor, the accused poked a knife at her,
Q: When is contact said to be “harmful”?
forcibly took her from school, tied her hands and placed scotch
tape on her mouth.
A: While the law varies by jurisdiction, contact is often
defined as "harmful" if it objectively intends to injure, Q: Must the restraint be physical in order to be liable for
disfigure, impair, or cause pain. false imprisonment?
Q: When is an act deemed to be “offensive”? A: No.While it is true that physical restraint is the classic
form of false imprisonment, it can take the form of threats
A: The act is deemed "offensive" if it would offend a or duress such as threats to harm the person or his family if
reasonable person’s sense of personal dignity. he leaves the premises.
Q: In what context is “imminence” understood in TRESPASS TO LAND

determining tort liability for assault?
Q: What is trespass to real property?
A: "Imminence" is judged objectively and varies widely on
the facts; it generally suggests there is little to no A: It is a tort that is committed when a person unlawfully
opportunity for intervening acts. invades the real property of another (Aquino, Torts and
Damages, 2005, p.367).
Q: Distinguish apprehension from fear.
Note: The Revised Penal Code punishes different forms of trespass.
A: The state of "apprehension" should be differentiated On the other hand, Art. 451 of the Civil Code provides that
from the general state of fear, as apprehension requires damages may be awarded to the real owner if he suffered such
only that the person be aware of the imminence of the damages because he was deprived of possession of his property by
harmful or offensive act.

CIVIL LAW
a possessor in bad faith or by a person who does not have any right CONVERSION
whatsoever over the property.
Q: What is “conversion?”
Anybody who builds, plants or sows on the land of another
knowing full well that there is a defect in his title is liable for
damages. The liability is in addition to the right of the landowner in A: It is an intentional interference with the plaintiff’s
good faith to appropriate what was built, planted or sown or to personal property that is so substantial that it is fair to
remove the same. require the defendant to pay the property’s full value.
Liability for damages under the above-cited provisions of the RPC Q: What are the elements of conversion?
and the NCC requires intent or bad faith (Aquino, Torts and
Damages, 2005, p.367) A:
1. An act by the defendant that substantially interferes
Q: What are elements of trespass to land? with plaintiff's right of possession in a chattel in a
sufficiently serious fashion as justify the payment the
A: chattel's full value.
1. The defendant committed a coluntary act against 2. Intent on the part of the defendant
the plaintiff 3. Plaintiff was either in possession of the chattel or had
2. The defendant physically invaded the real the immediate right to possess it
property owned by the plaintiff
3. Intent
4. The plaintiff had the immediate right to the Note: Conversion may include:
possession of the land (as an owner living there or 1. Cases where the defendant deprived the plaintiff of
as a tenant renting it) personal property for the purpose of obtaining
possession of a real property, as when a landlord
Note: Thepossession of real property is not affected by acts of a deprived his tenants of water in order for them to
possessory character which are merely tolerated. vacate the lot they were cultivating.
2. Unjustified deprivation of access to property such as
unjustified disconnection of electricity service
TRESPASS TO CHATTELS (TROVER)
Q: What is the difference between “conversion” and
Q: What is trespass to chattels?
trespass to chattels?
A: It is where a person intentionally interferes with
A: It is the seriousness of the damage. In “conversion”
personal property in someone else’s possession.
claim, damage to the personal property is so egregious as
Note: It may also cover cases where the defendant deprived the to merit the defendant’s paying its full value in damages.
plaintiff of personal property for the purpose of obtaining Thus, not all trespasses to chattels are conversions, but all
possession of a real property. (Aquino, Torts and Damages, 2005, conversions are trespass to chattels. (Cf. U.S. v. Calimag, 12
p.369, citing Magbanaua vs. IAC, 137 SCRA 329) Phil 687)
Q: What is the extent of trespass to personal property? INTENTIONAL NON-PHYSICAL HARMS
A: In the field of tort, trespass extends to all cases where a VIOLATION OF PERSONAL DIGNITY
person is deprived of his personal property even in the
absence of criminal liability. (Aquino, T., Torts and Q: What is the rule with regard to the right of a person to
Damages, 2005, Second Ed. p.368) his dignity, personality, privacy and peace of mind?
Q: What are the elements of trespass to chattels? A: Every person shall respect the dignity, personality,
privacy and peace of mind of his neighbors and other
A: persons. The following and similar acts, though they may
1. The defendant took a voluntary act which interfered not constitute a criminal offense, shall produce a cause of
with the plaintiff’s right of possession in the chattel. It action for damages, prevention and other relief:
could either be dispossession (taking possession to the
exclusion of the owner) or intermeddling (touching or 1. Prying into the privacy of another's residence;
harming it without removing it from the owner’s 2. Meddling with or disturbing the private life or
possession) family relations of another;
2. The defendant intended the interference 3. Intriguing to cause another to be alienated from
3. The plaintiff either possessed or had the immediate his friends;
right to possess the same 4. Vexing or humiliating another on account of his
4. Damages must be proven if the act is intermeddling, religious beliefs, lowly station in life, place of
but if the act is dispossession, actual damages need birth, physical defect, or other personal condition.
not be proven. (Art. 26, NCC)

2013 GOLDEN NOTES
TORTS
INFLICTION OF EMOTIONAL DISTRESS relational harm principle (Aquino, Torts and Damages,
2005, p.489-490)
Q: What are the requisites for one to be able to recover
for the intentional infliction of emotional distress? Note: The principle of relational harm includes harm to social
relationships in the community in the form of defamation as
A: The plaintiff must show that: distinguished from the principle of reactive harm which includes
injuries to individual emotional tranquility (MVRS Publications Inc.,
1. The conduct of the defendant was intentional or in
et al v. Islamic Da’wah Council of the Philippines., et al., 396 SCRA
reckless disregard of the plaintiff; 210).
2. The conduct was extreme and outrageous;
3. There was a causal connection between the Q: What is the so called “parasitic” damage for emotional
defendant’s conduct and the plaintiff’s mental distress?
distress; and
4. The plaintiff’s mental distress was extreme and A: These are damages which depend on the existence of
severe (MVRS Publications Inc., et al v. Islamic another tort (Aquino, Torts and Damages, 2005, p.490)
Da’wah Council of the Philippines., et al., 396 SCRA
210) VIOLATION OF PRIVACY
Note: Even if there was no intentional infliction of emotional
Q: What are the zones of privacy under the NCC, RPC,
distress in one case, the SC recognized the possibility that one may
be made liable for the tort of intentional infliction of emotional Rules of Court, and special laws?
distress.
A:
Q: What does “extreme and outrageous conduct” mean? 1. That every person shall respect the dignity, personality,
privacy and peace of mind of his neighbors and other
A: It is conduct that is so outrageous in character, and so persons and any act of a person of meddling and prying into
extreme in degree, as to go beyond all possible bounds of the privacy of another is punishable as an actionable
decency, and to be regarded as atrocious, and utterly wrong;
intolerable in civilized society (Aquino, Torts and Damages,
2005, p.487) 2. That a public officer or employee or any private
individual shall be liable for damages for any violation of
Q: What does “emotional distress” mean? the rights and liberties of another person, and recognizes
the privacy of letters and other private communications;
A: It is any highly unpleasant mental reaction such as
extreme grief, shame, humiliation, embarrassment, anger, 3. The RPC makes a crime the:
disappointment, worry, nausea, mental suffering and i. violation of secrets by an officer,
anguish, shock, fright, horror, and chagrin (Aquino, Torts ii. revelation of trade and industrial secrets, and
and Damages, 2005, p.487) iii. trespass to dwelling.
Note: “Severe emotional distress” in some jurisdictions, refer to 4. Invasion of privacy is likewise an offense in special laws
any type of severe and disabling emotional or mental condition such as the:
which may be generally recognized and diagnosed by professionals i. anti-wiretapping law; and
trained to do so, including posttraumatic stress disorder, neurosis, ii. secrecy of bank deposits act; and
psychosis, chronic depression, or phobia.
5. The Rules of Court provisions on privileged
The plaintiff is required to show, among other things, that he or
she suffered emotional distress so severe that no reasonable communication.
person could be expected to endure it; severity of the distress is an
element of the cause of action, not simply a matter of damages. Q: What is the standard to be applied in determining the
existence of a violation of the right to privacy?
The plaintiff cannot recover merely because of hurt feelings.
Liability cannot be extended to every trivial indignity. The plaintiff A: The right to privacy is not a guaranty to hermitic
must necessarily be expected and required to be hardened to a seclusion. The standard to be applied is that of a person of
certain amount of rough language, and to acts that are definitely
ordinary sensibilities. It is relative to the customs of the
inconsiderate and unkind.
time and place, and is determined by the norm of an
ordinary person.
Q: Distinguish emotional distress from defamation
Note: The essence of privacy is the right to be let alone. (Pineda,
A: An emotional distress tort action is personal in nature. It Torts and Damages, 2009, p.348)
is a civil action filed by an individual to assuage the injuries
to his emotional tranquility due to personal attacks on his Q: What is the two-part test in determining the
character. reasonableness of a person’s expectation of privacy?
Emotional distress properly belongs to the reactive harm A:

principle while defamation calls for the application of the 1. Whether by his conduct, the individual has exhibited an
expectation of privacy; and

CIVIL LAW
2. Whether this expectation is one that society recognizes

as reasonable. Intrusion and administrative investigation:
Q: What are the four general classes of tort actions for There is no intrusion when an employer investigates its
invasion of privacy? employee or when a school investigates its student. In the
latter case, the investigation may cover an alleged offense
A: committed outside the school premises. (Aquino, Torts and
1. Appropriation; Damages, 2005, p.430)
2. Intrusion;
3. Public disclosure of private facts; and Intrusion and public records:
4. False light in the public eye (Pineda, Torts and
Damages, 2009, p.349) Generally, there is no intrusion into the right of privacy of
another if the information sought is a matter of public
Q: What is appropriation? record. This is especially true in case the persons who are
invoking the right to privacy are public officers and the
A: It consists of appropriation, for the defendant’s benefit matter involved is of public concern.
or advantage, of the plaintiff’s name or likeness. (Carlisle v.
Fawcett Publications, 201 Cal. App.2d 733, 20 Cal,Rptr. 405) However, if the matter sought to be revealed does not
involve anything of public concern, there can be a violation
Q: What does this tort protect? or the right to privacy. (Aquino, Torts and Damages, 2005,
p.438)
A: The tort of commercial appropriation of likeness has
been held to protect various aspects of an individual’s Q: What is public disclosure of private facts?
identity from commercial exploitation:
1. name A: Consists of a cause of action in publicity, of a highly
2. likeness objectionable kind, given to private information about the
3. Achievements plaintiff, even though it is true and no action would lie for
4. Identifying characteristics defamation. (Melvin v. Reid, 112 Cal.App. 285, 297 P. 91)
5. Actual performances
6. Fictitious characters created by a performer Q: What is violated in public disclosure of private facts?
7. Phrases and other things associated with an
individual. A: The interest sought to be protected is the right to be free
from unwarranted publicity, from the wrongful publicizing
Q: What is intrusion? of the private affairs and activities of an individual which
are outside the realm of legitimate concern. (Aquino, Torts
A: Consists in the intrusion upon the plaintiff’s solitude or and Damages, 2005, p.450, citing Ayer Productions, Ltd.
seclusion. Pty., et.al vs Hon. Ignacio Capulong, et. al. GR No. L-82380)
It includes:
Q: What are the elements of public disclosure of private
1. Prying into the privacy of one’s home; facts?
2. Invading his home; (Ford Motor Co. v. Williams, 108
Ga.App. 21, 132, S.E.2d 206) A:
3. Invading one’s privacy by looking from outside; 1. There must be a public disclosure;
4. Eavesdropping; (LaCrone v. Ohio Bell Tel. Co., 114 Ohio 2. The facts disclosed must be a private fact;
App. 299, 182 N.E.2d 340, 59 O.O2d 236) or 3. The matter be one which would be offensive and
5. Persistent and unwanted telephone calls. objectionable to a reasonable person of ordinary
sensibilities.
Note: The tort of intrusion upon a person’s solitude protects a
person’s sense of locational and psychological privacy. Q: Who is a “public figure”?
Intrusion in public places: A: A person who, by his accomplishments, fame or mode of

living, or by adopting a profession or calling which gives the
Generally, there is no invasion of the right to privacy when public a legitimate interest in his doings, his affairs, and his
a journalist records, photographs, or writes about character, has become a ‘public personage’
something that occurs in public places. However, while
merely watching a person in public places is not a violation, Q: Is it a tortuous conduct for one to publish facts derived
one does not automatically make public everything that he from official proceedings?
does in public. It should not be tantamount to harassment
or overzealous shadowing. A: If the facts published are not declared by law to be
confidential, it is not tortuous (Aquino, Torts and Damages,
This protection is not limited to public figures. Everyone is 2005, p.452)
protected.

2013 GOLDEN NOTES
TORTS
Note: The rule however admits certain exceptions. Thus, Article
357 of the Revised Penal Code prohibits publication of certain acts Re: Acquittal: Acquittal presupposes that a criminal information is
referred to in the course of official proceedings. It punishes “any filed on court and final judgment is rendered dismissing the case
reporter, editor, or manager of a newspaper, daily or magazine, against the accused. It is not enough that the plaintiff is discharged
who shall publish facts connected with private life of another and on a writ of habeas corpus and granted bail. Such discharge is not
offensive to the honor, virtue, and reputation of said person, even considered the termination of the action contemplated to warrant
though said publication be made in connection with or under the the institution of a malicious prosecution suit against those
pretext that it is necessary in the narration of any judicial or responsible for the filing of the information against him.
administrative proceedings wherein such facts have been
mentioned.” (Aquino, Torts and Damages, 2009, p. 452) Nevertheless, it is believed that prior “acquittal” may include
dismissal by the prosecutor after preliminary investigation.
Q: Is a governmental agency or officer tasked with, and
acting in, the discharge of public duties vested with a right Q: What are the elements of malicious prosecution?
to privacy?
A: In criminal cases:
A: No, said right belongs only to individuals acting in a 1. the fact of the prosecution and the further fact
private capacity (Aquino, Torts and Damages, 2005, p. 452). that the defendant was himself the prosecutor,
and that the action was terminated with an
Q: What is false light in the public eye? acquittal;
2. that in bringing the action, the prosecutor acted
A: Consists of publicity which places the plaintiff in false without probable cause;
light in the public eye (Norman v. City of Las Vegas, 64 Nev. 3. the prosecutor was actuated or impelled by legal
38, 177 P.2d 442). malice. (Yasona v. Ramos, G.R. 156339, Oct. 6,
2004)
Q: What is the interest to be protected in this tort?
Note: The term “prosecutor” includes the complainant who
A: The interest to be protected in this tort is the interest of initiated the case; the prosecutor himself; any other public officer
authorized to file and prosecute the criminal case.
the individual in not being made to appear before the
public in an objectionable false light or false position. Mere witnesses are not included, but are liable for false testimony
or perjury for their falsehoods.
Q: How is false light in the public eye different from
defamation? To constitute malicious prosecution, there must be proof that the
prosecution was prompted by a sinister design to vex and
A: In false light, the gravamen of the claim is not humiliate a person, and that it was initiated deliberately, knowing
reputational harm but rather the embarrassment of a that the charges were false and groundless. (Pineda, Torts and
Damages, 2009, p.254)
person in being made into something he is not.
In civil cases:
Publication in defamation is satisfied if a letter is sent to a
third person; while in false light cases, the statement
1. The defendant filed a civil action against the plaintiff
should be actually made public.
previously;
2. The action was dismissed for clear lack of merit or for
In defamation, what is published lowers the esteem in
being baseless, unfounded, and malicious;
which the plaintiff is held. In false light cases, the defendant
3. The defendant who filed the previous complaint as
may still be held liable even if the statements tell
plaintiff was motivated by ill-will or sinister design;
something good about the plaintiff.
4. The present plaintiff suffered injury or damage by reason
of the previous complaint filed against him. (Pineda, Torts
MALICIOUS PROSECUTION
and Damages, 2009, p.254-255)
Q: What is a tort action for malicious prosecution?
Q: When is an action for malicious prosecution
A: It is an action for damages brought by one against premature?
another whom a criminal prosecution, civil suit, or other
legal proceedings has been instituted maliciously and A: If the action filed by a party is still pending trial, the filing
without probable cause, after the termination of such by the defendant of an action based on malicious
prosecution, suit or proceeding in favor of defendant prosecution anchored on the first case is premature. Its
therein. dismissal is in order. (Pineda, Torts and Damages, 2009, p.
255. citing Cabacungan v. Corrales, 95 PHIL 919)
Note: Malicious prosecution, both in criminal and civil cases,
requires the elements of: (1) malice, and (2) absence of probable Q: Is there liability for malicious prosecution in case a suit
cause. (Yasona v. De Ramos, 440 SCRA 154) is unsuccessful?
RE: Malice: The presence of probable cause signifies, as a legal A: None. The mere filing of a suit does not render the
consequence, the absence of malice.The absence of malice,
plaintiff liable for malicious prosecution should he be
therefore, involves good faith on the part of the defendant. This
good faith may even be based on mistake of law. unsuccessful. Persons should have free resort to the courts.

CIVIL LAW
The law does not impose a penalty on the right to litigate

(Pineda, Torts and Damages, 2009, p.255) Q: Is the imputation of criminal intention libelous?
Note: However, the repeated filing of a complaint all of which were A: No, because intent to commit a crime is not a violation
dismissed shows malicious prosecution entitling the injured party of law.
to an award of moral damages (Pineda, Torts and Damages, 2009,
p.256, citing Hawpia v. CA, 20 SCRA 536).
Q: Is the allegation that the offender merely expresses his
opinion or belief a defense in defamation cases?
DEFAMATION
A: In order to escape criminal responsibility, it is not
Q: What is defamation and what does it cover?
enough for the offender to say that he expresses therein no
more than his opinion or belief. The communication must
A: Defamation is tarnishing the reputation of someone; It is
be made in the performance of a “legal, moral, or social
a public and malicious imputation of a crime, or of a vice or
duty.”
defect, real or imaginary, or any act, omission, condition,
status, or circumstance tending to cause the dishonor,
Q: What is retraction and what is its effect as regards
discredit, or contempt of a natural or juridical person, or to
liability for defamation?
blacken the memory of one who is dead. (Art. 353, RPC). It
has two varieties, slander and libel.
A: When a periodical gives currency, whether innocently or
otherwise, to a false and defamatory statement concerning
Note: Actual damages need not be proved, at least where the
publication is libelous per se, or where the amount of damages is any person, it is under both a legal and moral duty to check
more or less nominal. the propagation of such statement as soon as practicable
by publishing a retraction.
Q: What is the reason for liability for defamation?
Retraction may mitigate the damages provided that it
A: The liability imposed for defamation is brought about by contains an admission of the falsity of the libelous
the desire to protect the reputation of every individual. The publication and evince a desire to repair the wrong
enjoyment of reputation is one of those rights necessary to occasioned thereby.
human society that underlie the whole scheme of
civilization. It is as much a constitutional right as the Q: What is the effect if the publication was by reason of an
possession of life, liberty or property (Worcester v.Ocampo, honest mistake?
22 Phil 42)
A: It only serves to mitigate liability where the article is
Q: What are the requisites before one can be held liable libelous per se.
for defamatory imputations?
Q: If the defamatory imputations were made in a
A: privileged communication, is there liability therefor?
1. It must be defamatory;
2. It must be malicious; A: None. An absolutely privileged communication is one for
3. It must be given in publicity; and which, by reason of the occasion on which it is made, no
4. The victim must be identifiable. (Alonzo v. Court of remedy is provided for the damages in a civil action for
Appeals, 241 SCRA 51) slander or libel.
Note: “Publication” is the communication of the defamatory FRAUD OR MISREPRESENTATION (FORMERLY DECEIT)
matter to some third person or persons.
Q: What are the elements of misrepresentation in torts
Q: What is libel? cases?
A: it is a defamation committed by means of writing, A:

printing, lithography, engraving, radio, phonograph, 1. Affirmative misrepresentation of a material fact;
painting or theatrical or cinematographic exhibition, or any 2. Defendant knew that statement being made was
similar means. false;
3. Intent;
Q: What is slander? 4. Causation;
5. Justifiable reliance; and
A: An oral defamation. 6. Damages
Q: What is slander by deed? Note: There is sexual fraud when the accused represented that he
was single and the complainant agreed to marry him based on this
A: It is a crime committed by any person who performs an representation. Thereafter, the accused heartlessly abandoned her
(Manuel v. People, 476 SCRA 461)
act that costs dishonor, discredit or contempt upon the
offended party in the presence of other person or persons.

2013 GOLDEN NOTES
TORTS
SEDUCTION Mackay Cable & Radio Corp. v. Court of Appeals, Aug. 25,
1989)
Q: When is a defendant liable for damages in case of
seduction? VIOLATION OF RIGHTS COMMITTED BY PUBLIC OFFICERS
A: Seduction, by itself, is an act which is contrary to morals, Q: In what instances can a public officer be liable for
good customs and public policy. The defendant is liable if damages?
he employed deceit, enticement, superior power or abuse
of confidence in successfully having sexual intercourse with A: When a member of a city or municipal police force
another (Aquino, Torts and Damages, 2005, p.364) refuses or fails to render aid or protection to any person in
case of danger to life or property, such peace officer shall
Note: There is liability even if there is no breach of promise to be primarily liable for damages. (Art. 34, NCC)
marry.
An action may be brought by any person suffering from
Q: What is included in “sexual assault”? material or moral loss because a public servant refuses or
neglects, without just cause to perform his official duty.
A: The defendant would be liable for all forms of sexual (Art.27, NCC)
assault. These include rape, acts of lasciviousness and
seduction. Requisites:
i. defendant is a public officer charged with the
Note: Gender is immaterial in seduction and sexual assault. performance of a duty in favor of the plaintiff
ii. he refused or neglected without just cause to
Q: When can it be said that there is no seduction? perform such duty (ministerial)
iii. plaintiff sustained material or moral loss as
A: Where the plaintiff, of adult age, maintained intimate consequence of such non-performance
sexual relations with the defendant, with repeated acts of iv. the amount of such damages, if material
intercourse, such conduct is incompatible with the idea of
sdecution. Voluntariness and mutual passion, though there Q: What is the intention of making public officers liable
was artful persuasions and wiles without fulfilling the under Art 34, NCC?
promise of marriage is not actionable.
A: Art. 34 is intended to afford a remedy against police
UNJUST DISMISSAL officers who connive with bad elements, are afraid of them
or simply indifferent to duty.
Q: What is the rule on dismissal of employees?
Note: Public officials ought to act with the highest degree of
A: It is a basic rule that an employer has a right to dismiss excellence, professionalism, intelligence and skill and for failure to
an employee in the manner and on the grounds provided act with such, he may be held liable for exemplary damages in his
for under the NCC. If the dismissal is for a valid cause, his personal capacity (Lim v, Ponce de Leon, 492 SCRA 497)
dismissal is consistent with the employer’s right to protect
his interest in seeing to it that his employees are INTERFERENCE WITH RELATIONS
performing their jobs with honesty, integrity and good
faith. (Aquino Torts and Damages, 2005, p.375, citing Q: What are the four kinds of interference?
Marilyn Bernardo v. NLRC, Mar. 15, 1996)
A: Interference with:
However, such exercise of the right to terminate must be 1. Family relations;
consistent with the general principles provided for under 2. Social relations;
Articles 19 and 21 of the New Civil Code. If there is non- 3. Economic relations; and
compliance with said provisions, the employer may be held 4. Political relations.
liable for damages. The right to dismiss an employee should
not be confused with the manner in which the right is FAMILY RELATIONS
exercised and the effects flowing therefrom. If the dismissal
is done anti-socially or oppressively then the employer ALIENATION OF AFFECTION
should be deemed to have violated Art. 1701, NCC which
prohibits acts of oppression by either capital or labor Q: What is alienation of affection?
against the other, and Art. 21. (Quisaba v. Sta. Ines-Melale
Veneer and Plywood, Inc. ,Aug. 30, 1974) A: This consists of depriving one spouse of the affection,
society, companionship and comfort of the other. (Aquino,
An employer may be held liable for damages if the manner Torts and Damages, 2005, p.480)
of dismissing the employee is contrary to morals, good
customs and public policy. This may be done by false Note: The Family Code imposes on the spouses the obligation to
live together, observe mutual love, respect and fidelity, and render
imputation of misdeed to justify dismissal or any similar
mutual help and support. (Article 68) Interference with such may
manner of dismissal which is done abusively. (Globe result in the tort liability of alienation of affection.

CIVIL LAW
The gist of the tort is an interference with one spouse’s mental because the same is contrary to law, morals and good
attitude toward the other and the conjugal kindness of marital customs.
relations resulting in some actual conduct which materially affects
it.
Moral damages were awarded because of the wife’s refusal
to perform her wifely duties, her denial of consortium and
Q: In general, what is the scope of the tort ‘alienation of
desertion of her husband. Her acts constitute a willful
affections’?
infliction of injury upon her husband’s feelings in a manner
contrary to morals, good customs or public policy.
A: It extends to all cases of wrongful interference in the
(Tenchaves v. Escaño, G.R. No. L-19671, July 26, 1966)
family affairs of others whereby one spouse is induced to
leave the other spouse or to conduct himself or herself in a
CRIMINAL CONVERSATION (ADULTERY)
manner that the comfort of married life is destroyed.
(Thomas M. Cooley and D. Avery Haggard, Treatise on the
Q: When is adultery committed?
Law of Torts, Vol. 2, 1932 Ed., p.6)
A: Adultery is committed by any married woman who shall
Q: Who may be liable for alienation of affections?
have sexual intercourse with a man not her husband and by
the man who has carnal knowledge of her knowing her to
A: The defendant who purposely entices the spouse of
be married, even if the marriage was subsequently declared
another, to alienate his or her affections with his or her
void (Art. 333, RPC).
spouse, even if there are no sexual intimacies is liable for
damages under this article. Likewise, a person who Note: Concubinage is committed by a husband who shall:
prevented the reconciliation of spouses after their
separation is liable for alienation of affections. 1. Keep a mistress in the conjugal dwelling;
2. Have sexual intercourse with her, under scandalous
Note: It is not necessary that there is adultery or the spouse is circumstances, with a woman not his wife; or
deprived of household services. 3. Cohabit with her in any other place. (Art. 334, RPC)
Q: What are some cases where there is no tort liability for Liability for adultery or concubinage based on the law on torts:
alienation of affections? not only moral damages but also for other appropriate damages.
There is no legal basis for the imposition of moral damages in case

A: of Bigamy. (Pineda, Torts and Damages, 2009, p.249, citing People
1. A woman cannot be made liable for alienation of the v. Bondoc, .GR. No. 22573-R, Apr. 21, 1959)
affections of the husband (of another woman) for
being merely the object of the affections of said SOCIAL RELATIONS
husband. To be liable, she must have done some active
acts calculated to alienate the affections of the The following and similar acts, though they may not
husband. She must, in a sense, be the “pursuer, not constitute a criminal offense, shall produce a cause of
merely the pursued”; action for damages, prevention and other relief:
2. A prostitute is not liable for alienation of affections of
the husband for having sexual intimacies with him on a (1) Prying into the privacy of another's residence;
chance occasion. (2) Meddling with or disturbing the private life or
3. When there is no more affection to alienate. family relations of another;
(3) Intriguing to cause another to be alienated from his
Q: May parents be liable for alienation of affections? friends;
(4) Vexing or humiliating another on account of his
A: Yes. However, parents are presumed to act for the best religious beliefs, lowly station in life, place of birth,
interest of their child. The law recognizes the right of a physical defect, or other personal condition (Art. 26,
parent to advise his/her child and when such advise is given NCC).
in good faith, the act, even if it results in separation, does
not give the injured party a right of action (Aquino, Torts Q: Who may be held liable for the tort intriguing to cause
and Damages, 2005, p.480). another to be alienated from his friends?
Note: An action for alienation of affection against the parents of A: A person who committed affirmative acts intended to
one consort is does not lie in the absence of proof of malice
alienate the existing friendship of one with his friends is
(Tenchavez v. Escano, 15 SCRA 355)
liable for damages. (Pineda, Torts and Damages, 2009,
p.352)
LOSS OF CONSORTIUM
Q: What is loss of consortium?
A: A spouse has a legal obligation to live with his or her

spouse. If a spouse does not perform his or her duty to the
other, he may be held liable for damages for such omission

2013 GOLDEN NOTES
TORTS
ECONOMIC RELATIONS protect the contracting party he is intermeddling for,
from danger to his life or property, he should not be
INTERFERENCE WITH CONTRACTUAL RELATIONS made liable for damages for the breach of the
contract.
Q: What is interference with contract?
Q: What is the rule on business interruption damages?
A: Any third person who induces another to violate his
contract shall be liable for damages to the other contracting A: Liability recognized
parties. (Art.1314, NCC)
1. A business owner whose business was interrupted
Q: Why is interference with contract tortuous? as a result of a contractor’s delay in completing a
construction project could recover economic
A: Such interference is tortious because it violates the right damages from the contractor even though the
of the contracting parties to fulfill the contract and to have business owner had not suffered physical injury or
it fulfilled, to reap the profits resulting therefrom, and to property damage
compel the performance by the other party. (45 Am. Jur. 2d 2. A business owner is entitled to recover for business
280-281) damages interruption unaccompanied by physical
damage against a supplier of electrical power as a
Q: What are the elements of interference to contractual result of the wrongful termination of the business
relation? electrical services
3. A business owner who did not sustain any property
A: damage as a result of a pollution of a waterway but
1. Existence of a valid contract; who suffered an interruption of their business could
2. Knowledge on the part of the third person of the recover damages frm those responsible for the
existence of the contract; pollution
3. Interference of the third person without legal 4. Economic damages could also be recovered against
justification or excuse. (So Ping Bun v. Court of people who cause the obstruction of a wharf or
Appeals, G.R. No. 120554, Sept.21, 1999) landing
5. A threat of a chemical explosion
Q: What is interference with prospective advantage? 6. A tenant in a building who caused leaking sewer line
A: If there is no contract yet and the defendant is only Liability not recognized
being sued for inducing another not to enter into a contract
with the plaintiff, the tort committed is appropriately called 1. A business owner cannot maintain a negligence
interference with prospective advantage. action for economic damage die to business
interruption unaccompanied by personal njury or
Q: What is the rule regarding the extent of recovery property damages against the party causing the
against defendant found guilty of interference with interruption
contractual relations? 2. A plaintiff cannot recover in negligence for purely
economic loss in the absence of physical injury
A: Such defendant cannot be held liable for more than the against a defendant who has negligently caused the
amount for which the party who induced to break the closing of a public bridge or river
contract can be held liable. It would seem that the rule is 3. Amotel owner and waitress employed thereby could
consistent with the provisions of Article 2202 of the New not maintain a claim for purely economic damages
Civil Code only if the contracting party who was induced to araising out of a contractor or fabricator of steel
break the contract was in bad faith. bars used in the construction of a bridge which was
closed when cracks were discovered
However, when there is good faith, the party who breached 4. The owners of a barge or tugboat whch collided
the contract is only liable for consequences that can be with a bridge resulting in the closing of the bridge
foreseen. (Art. 2201, NCC) for two months could not be held liable on the
theory of negligence for the loss of business by two
Q: What is the nature of the liability of the intermeddler? shores which resulted from the loss of access by
customers who were unable to cross the bridge.
A: The liability of the intermeddler is solidary because the
former has committed a tortuous act or quasi-delict where UNFAIR COMPETITION
liability is solidary. (Art. 2941, NCC)
Q: What is unfair competition?
Q: Is malice essential to make the intermeddler liable?
A: It consists in employing deception or any other means
A: GR: Yes. contrary to good faith by which any person shall pass off
the goods manufactured by him or in which he deals, or his
XPN: If the intention of the intermeddler is honest and business, or services for those of the one having established
laudable such as when the interference is intended to

CIVIL LAW
goodwill, or committing any acts calculated to produce such 8. The right to the equal protection of the laws;
result. (Second par., Sec. 29, R.A. No. 166) 9. The right to be secure in one's person, house,
papers, and effects against unreasonable
Q: What is the true test of unfair competition? searches and seizures;
10. The liberty of abode and of changing the same;
A: The true test of unfair competition is whether certain 11. The privacy of communication and
goods have been intentionally clothed with an appearance correspondence;
which is likely to deceive the ordinary purchaser exercising 12. The right to become a member of associations or
ordinary care, and not whether a certain limited class of societies for purposes not contrary to law;
purchasers with special knowledge not possessed by the 13. The right to take part in a peaceable assembly to
ordinary purchaser could avoid mistake by the exercise of petition the government for redress of
this special knowledge. (U.S. v. Manuel, 7 Phil. 221) grievances;
14. The right to be free from involuntary servitude in
Q: What is included in unfair competition? any form;
15. The right of the accused against excessive bail;
A: Art. 28, NCC provides for unfair competition which 16. The right of the accused to be heard by himself
includes: and counsel, to be informed of the nature and
1. Passing off or disparagement of products cause of the accusation against him, to have a
2. Interference with contractual relations speedy and public trial, to meet the witnesses
3. Interference with prospective advantage face to face, and to have compulsory process to
4. Fraudulent misappropriation against a secure the attendance of witness in his behalf;
competition 17. Freedom from being compelled to be a witness
5. Monopolies and predatory pricing against one's self, or from being forced to confess
guilt, or from being induced by a promise of
Q: What is predatory pricing? immunity or reward to make such confession,
except when the person confessing becomes a
A: It is a practice of selling below costs in the short run in State witness;
the hope of obtaining monopoly gains later, after driving 18. Freedom from excessive fines, or cruel and
the competition from the market. unusual punishment, unless the same is imposed
or inflicted in accordance with a statute which has
Q: What could be the basis of the award of damages in not been judicially declared unconstitutional; and
case of unfair competition? 19. Freedom of access to the courts. (Art. 32, NCC)
A: It could either be Note: The violation of a person’s rights under Article III of the 1987
1. The reasonable profit which the complainant Constitution as contemplated in Art. 32 constitutes constitutional
would have made had the defendant not tort.
infringed his rights
2. The profit which the defendant actually made out Q: What is the purpose of Article 32?
of the infringement
3. Reasonable percentage based upon the amount A: Its purpose is to provide a sanction to the deeply
of gross sales of the defendant of the value of cherished rights and freedoms enshrined in the
services in connection with which the mark or Constitution. (Pineda, Torts and Damages, 2009, p. 387)
trade names was issued in the infringement of
the complainant. Q: Are judges exempted from damages?
POLITICAL RELATIONS A: GR: Yes, if by performing their duties in good faith, they
happen to violate or impair the rights and liberties
Article 32 of the New Civil Code: Any public officer or mentioned in Article 32.
employee, or any private individual, who directly or
indirectly obstructs, defeats, violates or in any manner XPN: If the judge’s act or omission constitutes a
impedes or impairs any of the following rights and liberties violation of the Revised Penal Code or other penal
of another person shall be liable to the latter for damages: statute, the judge is liable for damages aside from
1. Freedom of religion; criminal liability. (Pineda, Torts and Damages, 2009,
2. Freedom of speech; p.388)
3. Freedom to write for the press or to maintain a
periodical publication; DEFENSES
4. Freedom from arbitrary or illegal detention;
5. Freedom of suffrage; Q: What is the defense on interference?
6. The right against deprivation of property without
due process of law; A: The defendants are free from liability if they can prove
7. The right to a just compensation when private that at the time of the commission, the plaintiff knew of the
property is taken for public use; act of interference or omission.

2013 GOLDEN NOTES
TORTS
obtain consent or one empowered to consent for
Q: What is the defense of privilege in torts cases? him, and
2. The actor has no reason to believe that the other
A: To say that an act is “privileged” connotes that the actor would decline.
owes no legal duty to refrain from such contact.
Q: What is the rule if consent is procured by fraud or
Q: Distinguish consensual and non-consensual privilege. duress?
A: Consensual privileges depend on the plaintiff agreeing to A: Consent will not shield the defendant from liability if it is
the defendant’s otherwise tortious act. On the other hand, procured by means of fraud or duress.
nonconsensual privileges shield the defendant from liability
for otherwise tortious conduct even if the plaintiff objects Note: Courts invalidate consent procured by duress when
to the defendant’s conduct. defendants threaten the plaintiff or plaintiff’s loved ones with
physical harm.
Q: When is consent a defense in torts cases and what is its
basis? Q: Why is self-defense a defense in tort cases?
A: Typically, one cannot hold another liable in tort for A: An actor is privileged to use reasonable force, not
actions to which one has consented. This is frequently intended or likely to cause death or serious bodily harm, to
summarized by the phrase "volenti non fit injuria" ("to a defend himself against unprivileged harmful contract which
willing person, no injury is done" or "no injury is done to a he reasonably believes that another is about to inflict.
person who consents"). It operates when the claimant
either expressly or implicitly consents to the risk of loss or Q: When is an actor privileged to defend himself?
damage.
A: An actor is privileged to defend himself against another
Note: Consent is willingness in fact for the conduct to occur. by force likely to cause death or serious bodily harm when
he reasonably believes that:
Q: What are some rules in determining whether consent is 1. the other is about to inflict upon him an
present as a defense? intentional contact and
2. he is thereby put in peril of death or serious
A: bodily harm which can safely be prevented only
1. It need not be communicated to the defendant by immediate use of such force.
2. In determining whether plaintiff consented, defendant
must reasonably interpret her overt act and manifestations Note: Court requires objective and subjective belief (reasonable
person could have seen the situation as dangerous and subject
of her feelings.
believed that he was in danger).
Note: The defendant’s subjective state is based on the
plaintiff’s objective actions. Q: When does the privilege of self-defense exist?
3. Plaintiff has burden of proof to show intent to commit A: The privilege exists even if the actor believes he can
the act, lack of consent, and harm. avoid defending himself by:
1. Retreating within his dwelling place, or
Q: Is consent a defense if the plaintiff or offended party is 2. Permitting the other to intrude upon
a minor? his dwelling place, or
3. Abandoning an attempt to effect a lawful arrest.
A: No.For one to surrender the right to be free from
intentional interference by others, one must have the Q: When does the privilege NOT exist?
mental capacity to consent. Defendant can be liable despite
the fact that the plaintiff was subjectively willing and A: The privilege does not exist if the actor believes that he
communicated that willingness to the defendant. can avoid defending himself by:
1. retreating in any place other than his dwelling
Note: In common law countries, most courts have applied place or
statutory rape statutes in civil cases regardless of proof that the 2. relinquishing the exercise of any right other
plaintiff was able to understand the consequences of her act and than his privilege to prevent intrusion onto his
consent. dwelling place.
Q: When is consent not necessary in order to absolve one Q: May the actor use any means in order to defend
from the injuries he caused to another? himself?
A: Conduct that injures another does not make the actor A: The actor is not privileged to use any means of self-
liable to the other, even though the other has not defense which is intended or likely to cause a bodily harm
consented to it if: in excess of that which the actor correctly or reasonably
1. An emergency makes it necessary or apparently believes to be necessary for his protection.
necessary to act before there is opportunity to

CIVIL LAW
2. One is privileged by necessity to trespass when

Note: A party claiming self-defense must prove not only that he there is a serious threat to life and no other
acted honestly in using force, but that his fears were reasonable lifesaving option is available; and
under the circumstances, and the means of self-defense were 3. The owner of property may not eject a
reasonable.
trespasser if the trespasser requires entry to
protest himself and his property from harm.
Q: Is a person protecting a total stranger liable?
Note: In these instances, intrusion is said to be privileged. The
A: The self-defense privilege extends to protecting total necessity privilege to enter the land of another in order to avoid
strangers as well. serious harm is coupled with an obligation on the part of the
entrant to pay for whatever harm he caused.
Q: May the intervener use any means or amount of force
in defending the other? Q: When may recapture of chattels be raised as a defense
in intentional torts?
A: No. The force that may be used by an intervener to repel
an attack on another is measured by the force that the A: In order for it to be invoked, two things must concur:
other could lawfully use. first, possession by the owner, and, second, a purely
wrongful taking or conversion, without a claim of right
Q: What is the consequence of a mistake on the part of (Kirby v. Foster, 298 F.3d 219).
the intervener?
Note: If personal property is involved, recapture of chattels is a
A: If the intervener is mistaken, even reasonably mistaken, proper defense, if it is a real property, recapture of land is a
the privilege is unavailable if it would not be available to defense. Such recapture of land defense is most frequently present
in landlord-tenant disputes. It is generally held by the courts that
the person to be protected.
no privilege exists for a landowner to forcibly enter the tenant's
premises or interfere with the tenant's person or property.
Note: The intervener’s mistake need only be reasonable; there is
no need to show that the victim also had the privilege to defend
himself. Q: Who may invoke legal authority as a defense in
intentional torts?
Q: Up to what extent is an actor privileged to defend his
property from intrusions? A:
1. Any person who acts in the fulfillment of a duty or in the
A: An actor is privileged to use reasonable force, not lawful exercise of a right or office.
intended or likely to cause death or serious bodily harm, to
Note: An officer of the law is protected by the legal system
prevent or terminate another’s intrusion upon the actor’s
when making an arrest, permitting that he properly followed
land if: the legal process.
1. The intrusion is not privileged;
2. The actor reasonably believes that the 2. Any person who acts in obedience to an order issued by a
intrusion can be prevented only by the superior for some lawful purpose (Art. 11, pars. 5 and 6,
force used; and RPC).
3. The actor has first requested the other
to desist or the actor believes such Note: Under the RPC, a justifying circumstance relieves the
request will be useless or substantial offender not only from criminal liability but also from civil liability
harm will be done before it can be made.
Q: How may discipline be used as a defense in intentional
Note: The intentional infliction which is intended or likely to cause torts?
death or serious bodily harm, for the purpose of preventing or
terminating the other’s intrusion upon the actor’s possession of A: Based on a person's status or profession, he may be
land, is privileged only if the actor reasonably believes that the entitled to use reasonable force in order to discipline
intruder is likely to cause death or serious bodily harm.
others. If a person such as a teacher, parent, or military
official commits a tort which results in injury to a plaintiff,
Q: The owner or lawful possessor of a thing has the right
as long as certain conditions are met, the defense of
to exclude any person from the enjoyment and disposal
discipline will excuse him from liability.
thereof. For this purpose, he may use such force as may be
reasonably necessary to repel or prevent an actual or
Q: When may necessity be used as a defense?
threatened unlawful physical invasion or usurpation of his
property (Art. 429, NCC). Is the owner’s right provided for
A: Necessity is a tort defense that is used under unusual,
in the said article an absolute right?
emergency circumstances where a defendant injures a
plaintiff in order to prevent a greater harm. The defendant
A: No. In the following instances, this right may not be
must prove that the harm inflicted on the plaintiff's person
invoked by the owner:
or property was less than the harm that was prevented.
1. One may sacrifice the personal property of
another to save his life or the lives of his fellows;

2013 GOLDEN NOTES
TORTS
NEGLIGENCE reasonable man. More so if there is no alternative
thereto.
Q: What is negligence?
7. Place – A man who should occasion to discharge a gun
A: The omission of that degree of diligence which is on an open and extensive marsh, or in a forest would
required by the nature of the obligation and corresponding be required to use less circumspection and care, then
to the circumstances of the persons, time and place. (Art. if he were to do the same thing in an inhabited town,
1173, NCC) village or city.
Q: What is the test of negligence? 8. Violation of Rules and Statutes

a. Statutes
A: The test is: Would a prudent man, in the position of the b. Administrative Rules
tortfeasor, foresee harm to the person injured as a c. Private Rules of Conduct
reasonable consequence of the course about to be
pursued? If so, the law imposes a duty on the actor to take 9. Practice and Custom – A practice which is dangerous
precaution against its mischievous results, and failure to do to human life cannot ripen into a custom which will
so constitutes negligence (Picart v. Smith, 37 Phil 809). protect anyone who follows it (Yamada v. Manila
Railroad, G.R. No.10073, Dec. 24, 1915).
Q: What are the degrees of negligence? Distinguish.
Q: Will intoxication signify negligence?
A:
1. Simple negligence – want of slight care and diligence A: No. Mere intoxication is not negligence per se nor
only establishes want of ordinary care. But it may be one of the
circumstances to be considered to prove negligence
2. Gross negligence – there is a glaringly obvious want of (Wright v. Manila Electric Railroad & Light Co., GR No. L-
diligence and implies conscious indifference to 7760, Oct. 1, 1914).
consequences (Amadeo v.Rio Y Olabarrieta, Inc., 95
Phil 33); Q: What is contributory negligence?
– pursuing a course of conduct which would probably A: It is conduct on the part of the injured party,
and naturally result to injury. (Marinduque Iron Mines contributing as a legal cause to the harm he has suffered,
Agents, Inc. v. The Workmen’s Compensation which falls below the standard to which he is required to
Commission, 99 Phil 480) conform for his own protection (Valenzuela v. CA, G.R. No.
115024, Feb. 7, 1996).
Q: What are the circumstances to be considered in
determining whether an act is negligent? Q: Are children below nine (9) years capable of
contributory negligence?
A:
1. Person Exposed to the Risk – A higher degree of A: No. A child under nine (9) years of age is conclusively
diligence is required if the person involved is a child. presumed incapable of contributory negligence as a matter
of law. (Jarco Marketing Corp. v. Court of Appeals, 321 SCRA
2. Emergency – The actor confronted with an emergency 377)
is not to be held up to the standard of conduct
normally applied to an individual who is in no such Q: What is the doctrine of comparative negligence?
situation.
A: The negligence of both the plaintiff and the defendant
3. Social Value or Utility of Action – Any act subjecting an are compared for the purpose of reaching an equitable
innocent person to unnecessary risk is a negligent act apportionment of their respective liabilities for the
if the risk outweighs the advantage accruing to the damages caused and suffered by the plaintiff (Pineda, Torts
actor and even to the innocent person himself. and Damages, 2009, p.51)
4. Time of the day – May affect the diligence required of Note: The relative degree of negligence of the parties is considered
the actor (Art. 1173); e.g. a driver is required to in determining whether, and to what degree, either should be
responsible for his negligence (apportionment of damages).
exercise more prudence when driving at night
Q: Can the principle of contributory negligence apply in
5. Gravity of the Harm to be Avoided – Even if the odds
criminal cases through reckless imprudence?
that an injury will result are not high, harm may still be
considered foreseeable if the gravity of harm to be
A: No. The principle of contributory negligence cannot be
avoided is great.
used as defense in criminal cases through reckless
imprudence because one cannot allege the negligence of
6. Alternative Cause of Action – If the alternative
another to evade the effects of his own negligence. (People
presented to the actor is too costly, the harm that may
result may still be considered unforeseeable to a

CIVIL LAW
v. Quinones, 44 O.G. 1520; People v. Orbeto, C.A. 430 O.G. 3. Where the plaintiff, a passenger, filed an action against a
3173) carrier based on contract; (Bustamante v. CA, G.R. No.
89880, Feb. 6, 1991)
LAST CLEAR CHANCE
4. If the actor, though negligent, was not aware of the
Q: What is the doctrine of last clear chance (doctrine of danger or risk brought about by the prior fraud or negligent
discovered peril)? act;
A: This is also called as the “humanitarian negligence 5. In case of a collapse of a building or structure. (De Roy v.
doctrine.” Where both parties are negligent but the CA, G.R. No. L-41154, Jan. 29, 1988)
negligent act of one succeeds that of the other by an
appreciable interval of time, the one who has the last 6. Where both parties are negligent (Philippine National
reasonable opportunity to avoid the impending harm and Railways v. Brunty, 506 SCRA 685)
fails to do so, is chargeable with the consequences, without
reference to the prior negligence of the other party (Picart Q: Mr and Mrs R own a burned-out building, the firewall
vs Smith, 37 Phil. 809). of which collapsed and destroyed the shop occupied by
the family of Mr and Mrs S, which resulted in injuries to
Note: The doctrine of last clear chance is a theory adopted to said couple and the death of their daughter. Mr and Mrs S
mitigate the harshness of the contributory negligence of the had been warned by Mr & Mrs R to vacate the shop in
plaintiff (Phoenix Construction Inc. v. IAC, 148 SCRA 353) view of its proximity to the weakened wall but the former
failed to do so. Mr & Mrs S filed against Mr and Mrs R an
Q: What are the requisites of the doctrine of last clear action for recovery of damages the former suffered as a
chance? result of the collapse of the firewall. In defense, Mr and
Mrs R rely on the doctrine of last clear chance alleging
A: that Mr and Mrs S had the last clear chance to avoid the
1. Plaintiff is placed in danger by his own negligent acts accident if only they heeded the former’s warning to
and he is unable to get out from such situation by any vacate the shop, and therefore Mr and Mrs R’s prior
means; negligence should be disregarded. If you were the judge,
2. Defendant knows that the plaintiff is in danger and how would you decide the case? (1990 Bar Question)
knows or should have known that the plaintiff was
unable to extricate himself therefrom; and A: I would decide in favor of Mr & Mrs S. The proprietor of
3. Defendant had the last clear chance or opportunity a building or structure is responsible for the damages
to avoid the accident through the exercise of ordinary resulting from its total or partial collapse, if it should be due
care but failed to do so, and the accident occurred as a to the lack of necessary repairs (Art. 2190, NCC) As regards
proximate result of such failure. (Pineda, Torts and the defense of last clear chance, the same is not tenable
Damages, 2009, p.59-60) because according to the SC in one case (De Roy v. CAL-
80718, Jan 29, 1988, 157 S 757) the doctrine of last clear
Q: Is the doctrine of last clear chance applicable in case of chance is not applicable to instances covered by Art 2190 of
collision? the Civil Code. Further, in Phoenix Construction, Inc. v.
Intermediate Appellate Court (G.R. L-65295, March 10,
A: Yes. In case of collision, it applies in a suit between the 1987. 148 SCRA 353) the Supreme Court held that the role
owners and drivers of colliding vehicles and not where a of the common law "last clear chance" doctrine in relation
passenger demands responsibility from the carrier to to Art. 2179 of the Civil Code is merely to mitigate damages
enforce its contractual obligations (Pineda, Torts and within the context of contributory negligence.
Damages, 2009, p.60, citing Tiu v. Arriesgado, 437 SCRA
426) Q: What is the sudden peril doctrine/emergency rule?
Note: There is a different rule in case of collision of vessels.
A: One who suddenly finds himself in a place of danger, and
is required to act without time to consider the best means
Q: What are the instances when the doctrine of last clear
that may be adopted to avoid the impending danger, is not
chance is inapplicable?
guilty of negligence, if he fails to adopt what subsequently
and upon reflection may have been a better method, unless
A:
the emergency in which he finds himself is brought about
1. When the injury or accident cannot be avoided by the
by his own negligence.(Mc Kee v. IAC, 211 SCRA 519)
application of all means at hand after the peril has been
discovered; (Pantranco North Expressway v. Baesa, G.R. Note: Emergency rule exempts common carriers.
Nos. 79050-51, Nov. 14, 1989)
Q: What is the captain of the ship doctrine?
2. If the defendant’s negligence is a concurrent cause and
which was still in operation up to the time the injury was A: A surgeon is likened to a captain of the ship, in that it is
inflicted; his duty to control everything going on in the operating

2013 GOLDEN NOTES
TORTS
room. Thus, negligence committed during the operation is Note: R.A. 9344 (Juvenile Justice and Welfare Act of 2006): 15
attributable to him. years of age or younger – age of absolute irresponsibility.
Nevertheless, absence of negligence does not absolutely excuse

GOOD FATHER OF A FAMILY OR REASONABLY PRUDENT
the child from liability, as his properties, if any, can be held
MAN subsidiarily liable. Nor will such absence of negligence excuse the
child’s parent’s vicarious liability.
Q: What is the general standard of diligence provided for
under the NCC? Q: What is “diligence before the fact”?
A: Bonus Pater Familias or that of a good father of a family. A: The conduct that should be examined in negligence
cases is prior conduct or conduct prior to the injury that
Note: If the law or contract does not state the diligencewhich is to resulted or, in proper cases, the aggravation thereof.
be observed in the performance, that which is expected of a good
father of a family shall be required. (Art. 1173 (2))
STANDARD OF CARE
Q: What is the rule in case of fault or negligence of an
obligor? STANDARD OF CONDUCT or DEGREE OF CARE REQUIRED
In General
A: Art. 1173. The fault or negligence of the obligor consists If the law or contract does not state the diligence which is
in the omission of that diligence which is required by the to be observed in the performance, that which is expected
nature of the obligation and corresponds with the of a good father of a family shall be required (Article 1173,
nd
circumstances of the persons, of the time and of the place. 2 paragraph, NCC).
When negligence shows bad faith, the provisions of Articles
Note: Diligence of a good father of a family - bonos pater familias -
1171 and 2201, paragraph 2, shall apply.
A reasonable man is deemed to have knowledge of the facts that a
man should be expected to know based on ordinary human
Note: Art. 1171. Responsibility arising from fraud is demandable in experience. (PNR v. IAC, GR No. 7054, Jan. 22, 1993)
all obligations. Any waiver of an action for future fraud is void.
Persons who have Physical Disability
Art. 2201. In contracts and quasi-contracts, the damages for which GR: A weak or accident prone person must come up to the
the obligor who acted in good faith is liable shall be those that are standard of a reasonable man, otherwise, he will be
the natural and probable consequences of the breach of the considered as negligent.
obligation, and which the parties have foreseen or could have
reasonably foreseen at the time the obligation was constituted. XPN: If the defect amounts to a real disability, the standard
of conduct is that of a reasonable person under like
In case of fraud, bad faith, malice or wanton attitude, the obligor
disability.
shall be responsible for all damages which may be reasonably
attributed to the non-performance of the obligation. Experts and Professionals
GR: They should exhibit the case and skill of one who is
Q: What is the concept of a good father of the family ordinarily skilled in the particular field that he is in.
(pater familias)?
Note: This rule does not apply solely or exclusively to
A: The Supreme Court described a good father of a family professionals who have undergone formal education.
by first stating who is not. He is not and is not supposed to
be omniscient of the future; rather, he is one who takes XPN: When the activity, by its very nature, requires the
precautions against any harm when there is something exercise of a higher degree of diligence
before him to suggest or warn him of the danger or to e.g. Banks; Common carriers
foresee it (Picart v. Smith, G.R. No. L-12406, Mar. 15, 1918). Insane Persons
The same rule applies under the New Civil Code. The
Note: A good father of a family is likewise referred to as the insanity of a person does not excuse him or his guardian
reasonable man, man of ordinary intelligence and prudence, or from liability based on quasi-delict. (Arts. 2180 and 2182,
ordinary reasonable prudent man. In English law, he is sometimes NCC). This means that the act or omission of the person
referred to as the man on top of a Clapham omnibus. (Aquino, suffering from mental defect will be judged using the
2005)
standard test of a reasonable man.
Q: Does the standard of conduct applied to adults apply
The bases for holding a permanently insane person liable
equally to children?
for his torts are as follows:
Where one of two innocent person must suffer a loss it
A: GR: The action of a child will not necessarily be judged
should be borne by the one who
according to the standard of an adult.
occasioned it;
To induce those interested in the estate of the insane
XPN: If the minor is mature enough to understand and
person (if he has one) to restrain and control him;
appreciate the nature and consequences of his actions.
and
In such a case, he shall be considered to have been
The fear that an insanity defense would lead to false
negligent.
claims of insanity to avoid liability. (Bruenig v.
American Family Insurance Co., 173 N.W. 2d

CIVIL LAW
619[1970]). reasonable (Prosser and Keeton, Law of Torts, 1984 Ed.,

p.173, citing Terry, Negligence, 24 Harv. L. Rev. 40,42)
Note: Under the RPC, an insane person is exempt from criminal
liability. However, by express provision of law, there may be civil Note: In the Philippines, the courts do not use any formula in
liability even when the actor is exempt from criminal liability. An determining if the defendant committed a negligent act or
insane person is still liable with his property for the consequences omission. What appears to be the norm is to give negligence a
of his acts, though they performed unwittingly. (US v. Baggay, Jr. common sense, intuitive interpretation (Aquino, Torts and
G.R. No. 6706, Sept. 1, 1911) Damages, 2005, p.44-45)
Employers
That degree of care as mandated by the Labor Code or In the field of negligence, interests are to be balanced only in the
other mandatory provisions for proper maintenance of the sense that the purposes of the actor, the nature of his act and the
harm that may result from action or inaction are elements to be
work place or adequate facilities to ensure the safety of the
considered. Some may not be considered depending on the
employees. circumstances.
Note: Failure of the employer to comply with mandatory provisions The following are circumstances to be considered:
may be considered negligence per se.
Employees 1. Time
Employees are bound to exercise due care in the 2. Place
performance of their functions for the employers. Liability 3. Emergency
may be based on negligence committed while in the 4. Gravity of harm to be avoided
5. Alternative course of action
performance of the duties of the employee (Araneta v. De
6. Social value or utility of activity
Joya, G.R. No. 83491, Aug. 27, 1990) 7. Person exposed to the risk
Owners, Proprietors and Possessors of Property (Aquino, Torts and Damages, 2005, p.46-56)
GR: The owner has no duty to take reasonable care towards
a trespasser for his protection or even to protect him from PRESUMPTION OF NEGLIGENCE
concealed danger.
XPN: Q: Discuss the provisions relative to presumptionof
1. Visitors negligence
2. Tolerated Possession
3. Doctrine of Attractive Nuisance A: Persons are generally presumed to have taken ordinary
4. State of Necessity care of his concerns.There are however exceptions when
Doctors negligence is presumed.
If a General Practitioner – Ordinary care and diligence in the 1. Article 2184. xxx. It is disputably presumed that a
application of his knowledge and skill in the practice of his driver was negligent, if he had been found guilty
profession of reckless driving or violating traffic regulations
at least twice within the next preceding two
If a Specialist – The legal duty to the patient is generally months. xxx
considered to be that of an average physician.
2. Article 2185. Unless there is proof to the contrary,
Lawyers it is presumed that a person driving a motor
An attorney is bound to exercise only a reasonable degree vehicle has been negligent if at the time of the
of care and skill, having reference to the business he mishap, he was violating any traffic regulation.
undertakes to do (Adarne v. Aldaba, Adm. Case No. 80, June
27, 1978). Note: Proof of traffic violation required.
UNREASONABLE RISK OF HARM 3. Article 2188. There is prima facie presumption of

negligence on the part of the defendant if the
Q: In determining whether a person has exposed himself death or injury results from his possession of
to an unreasonable great risk, what must be present? dangerous weapons or substances, such as
firearms and poison, except when possession or
A: Reasonableness, the elements of which are as follows: use thereof is indispensable in his occupation or
1. Magnitude of the risk business.
2. Principal object
Note: Proof of possession of dangerous weapons or
3. Collateral object
substances required.
4. Utility of the risk
5. Necessity of the risk
4. Article 1756. In case of death or injuries of
passengers, common carriers are presumed to
If the magnitude of the risk is very great and the principal
have been at fault or acted negligently, unless
object, very valuable, yet the value of the collateral object
they prove that they observed extraordinary
and the great utility and necessity of the risk
diligence prescribed in Articles 1733 and 1755.
counterbalanced those considerations, the risk is made

2013 GOLDEN NOTES
TORTS
RES IPSA LOQUITUR 6. Last Clear Chance – the person who had the last
clear chance to avoid the mishap is considered in
Q: How is negligence proven? law solely responsible for the consequence
thereof
A: 7. Prescription
1. Direct evidence 8. Waiver
2. Circumtantial evidence 9. Double Recovery - The plaintiff cannot recover
3. Res ipsa loquitur damages twice for the same act or omission of
the defendant
Q: What does res ipsa loquitur mean? 10. Contributory negligence – a partial defense
whereby plaintiff who is partly responsible for his
A: The thing speaks for itself. The fact of the occurrence of own injury should not be entitled to recover
an injury, taken with surrounding circumstances, may damages in full but must be liable only for
permit an inference or raise a presumption of negligence, damages actually caused by his own negligence
or make out a plaintiff’s prima facie case, and present a
question of fact for defendant to meet with an explanation. VOLENTI NON FIT INJURIA
Note: However, res ipsa loquitur is not a rule of substantive law Q: What is meant by volenti non fit injuria/assumption of
and, as such, does not create nor constitute an independent or risk?
separate ground of liability. Instead, it is considered as merely
evidentiary or in the nature of a procedural rule. (Professional
A: This maxim means that “to which a person assents is not
Services v.Agana, 513 SCRA 478)
esteemed in law as injury.” Stated otherwise, “one is not
legally injured if he has consented to the act complained of
Q: What are the requisites for the application of the
or was willing that it shall occur.” (Pineda, Torts and
doctrine of res ipsa loquitur?
Damages, 2009, p76)
A:
Q: What are the elements of the doctrine of assumption of
1. The accident was of such character as to warrant an
risk?
inference that it would not have happened except for
defendant’s negligence;
A:
2. The accident must have been caused by an agency or
1. The plaintiff must know that the risk is present;
instrumentality within the exclusive management or
2. He must further understand its nature; and
control of the person charged with the negligence
3. His choice to incur it is free and voluntary.
complained of;
3. The accident must not have been due to any voluntary
Q: What are the two kinds of assumption of risk?
action or contribution on the part of the person
injured. (Windvalley Shipping Co., Ltd. Vs Court of
A:
Appeals, 342 SCRA 214)
1. Express waiver of the right to recover;
2. Implied assumption
Q: What are some cases where the doctrine was held to
a. Dangerous Conditions
be inapplicable?
b. Contractual Relations
c. Dangerous Activities
A:
d. Defendant’s negligence
1. Where there is direct proof of absence or presence of
negligence;
Q: What is meant by:
2. Where other causes, including the conduct of the
plaintiff and third persons, are not sufficiently
1. Dangerous conditions?
eliminated by the evidence;
3. When one or more requisite is absent.
A: A person who, knowing that he is exposed to a
(Aquino, Torts and Damages, 2005, p.149)
dangerous condition, voluntarily assumes the risk of
such dangerous condition may not recover from the
Q: What are the defences available in order to disprove
defendant who maintained such dangerous condition.
negligence?
2. Contractual relations?
A:
1. Due diligence
A: There may be an implied assumption of risk if the
2. Accident or fortuitous event
plaintiff entered into contractual relations with the
3. Damnum absque injuria – There can be damage
defendant. By entering into a relationship freely and
without injury in those instances in which the loss
voluntarily where the negligence of the defendant is
or harm was not the result of a violation of a legal
obvious, the plaintiff may be found to accept and
duty
consent to it, and to undertake to look out for himself
4. Presumption of Regularity
and to relieve the defendant of the duty.
5. Assumption of risk

CIVIL LAW
3. Dangerous activities? the manufacturer’s representatives or, in his absence, the importer
shall be deemed the manufacturer. (Art. 4, RA 7394)
A: A person who voluntarily participates in dangerous
activities assumes the risks which are usually present Q: What are the kinds of defects in products?
in such activities.
A:
4. Defendant’s negligence? 1. Manufacturing defect – defects resulting from
manufacture, construction, assembly and erection.
A: When the plaintiff is aware of the risk created by 2. Design defect – defects resulting from design and
the defendant’s negligence, yet he voluntarily proceed formulas.
to encounter it, there is implied assumption of risk on 3. Presentation defect – defects resulting from
the part of the plaintiff. handling, making up, presentation or packing of the
products.
SPECIAL LIABILITY ON PARTICULAR ACTIVITIES 4. Absence of Appropriate Warning – defect resulting
from the insufficient or inadequate information on the
PRODUCTS LIABILITY use and hazards of the products.
Q: What is product and service liability? Q: What are the defenses of a manufacturer and supplier?
A: Product Liability is the law which governs the liability of A: Art. 97 of the Consumer Act provides thatthe
manufacturers and sellers for damages resulting from manufacturer shall not be liable when it evidences:
defective products. It is meant to protect the consumers by 1. That it did not place the product on the market;
providing safeguards when they purchase or use consumer 2. That although it did place the product on the
products. (Aquino, T., Torts and Damages, 2005, p.758) market such product has no defect;
3. That the consumer or the third party is solely at
Q: What are the general principles to determine product fault.
liability?
On the other hand, Art. 99 of said Act provides that the
A: supplier shall not be liable when it is proven:
1. Regardless of the ground on which liability is asserted, 1. That there is no defect in the service
whether negligence, breach of warranty or strict rendered;
liability in tort, a manufacturer or seller of a product 2. That the consumer or the third party is solely
cannot be held liable for injury allegedly caused in the at fault.
absence of proof that the product was defective when
it left the defendant’s possession or control and that Q: What are the remedies of a consumer in the Consumer
the injury was proximately caused by the product Act?
2. Misuse of the product is a bar to recovery in a
products liability case based on strict liability in tort A: Sec. 60 of the law expressly provides that the court may
3. Privity of contract is not a requisite to recovery in a grant injunction restraining the conduct constituting the
products liability case based on breach of warranty contravention of illegal sales act and practices and/or
actual damages and such other orders as it thinks fit to
Q: What is the Consumer Act (RA 7394)? redress injury to the person affected by such conduct.
A: Consumer Act prohibits fraudulent sales acts or STRICT LIABILITY

practices. Chapter I of Title III expressly provides for
protection against defective, unfair and unconscionable Q: When is there strict liability?
sales acts and practices. The Act likewise contains
provisions imposing warranty obligations on the A: There is strict liability if one is made independent of
manufacturers and sellers. This Act also imposes liability for fault, negligence or intent after establishing certain facts
defective service “independently of fault”. specified by law. It includes liability for conversion and for
injuries caused by animals, ultra-hazardous activities and
Q: Who are the persons made liable under the Consumer nuisance.
Act?
POSSESSOR AND USER OF AN ANIMAL
A: The strict liability under the Act is imposed on the
manufacturer. Q: Who is liable for damages caused by animals?
Note: A manufacturer is any person who manufactures, assembles A: The possessor or whoever makes use of the animal is
or processes consumer products, except that if the goods are liable independent of fault.
manufactured, assembled or processed for another person who
attaches his own brand name to the consumer products, the latter Note: The only exception is when the damage is caused by force
shall be deemed the manufacturer. In case of imported products, majeure or by the person who suffered the damage.

2013 GOLDEN NOTES
TORTS
a. Nuisance Per Se – that kind of nuisance which is
Q: What are the rules on liability of owners for damage always a nuisance. By its nature, it is always a
caused by his animals? nuisance all the time under any circumstances
regardless of location or surroundings.
A:
1. An owner is strictly liable for reasonably foreseeable That which is always a nuisance at all times and
damage done by a trespass of his animals. under all circumstances, wherever it may be
2. An owner is strictly liable to licensees and invitees for located or found.
injuries caused by wild animals as long as the injured
person did nothing to bring about the injury. b. Nuisance Per Accidens – that kind of nuisance
3. An owner is not strictly liable for injuries caused by by reason of location, surrounding or in a manner
domestic animals unless he has knowledge of that it is conducted or managed.
particular animal's dangerous propensities that are not c. Temporary – that kind which if properly
common to the species. attended does not constitute a nuisance.
4. Strict liability will generally not be imposed in favor of d. Permanent – that kind which by nature of
trespassers in the absence of the owner's negligence. structure creates a permanent inconvenience.
An exception is recognized for injuries inflicted by e. Continuing – that kind which by its nature will
vicious watchdogs. continue to exist indefinitely unless abated
f. Intermittent – that kind which recurs off and on
Q: What is the wild beast theory? may be discontinued anytime.
g. Attractive Nuisance – one who maintains on his
A: A person who for his own purposes brings on his land premises dangerous instrumentalities or
and collects and keeps there anything likely to do mischief appliances of a character likely to attract children
if it escapes, must keep it at his peril, and if he does not do in play, and who fails to exercise ordinary care to
so, is prima facie answerable for all the damages which is prevent children from playing therewith or
the natural consequence of its escape. It is therefore resorting thereto, is liable to a child of tender
unnecessary for the plaintiff to prove negligence, and it is years who is injured thereby, even if the child is
no defense for a defendant to prove that he has taken all technically a trespasser in the premises.
possible precautions to prevent the damage (Ryland v.
Fletcher, L.R. 1 Ex. 265; Pineda, Torts and Damages PUBLIC NUISANCE AND PRIVATE NUISANCE
Annotated, 2004 ed.).
Q: What are the remedies against public nuisances?
NUISANCE
A:
Q: What is nuisance? 1. Prosecution under the RPC or any local ordinance; or
2. Civil action; or
A: A nuisance is any act, omission, establishment, business, 3. Abatement, without judicial proceeding.
condition of property, or any anything else which: (Article 699 of the New Civil Code)
1) Injures or endangers the health or safety of
others; or Q: Who may avail of remedies?
2) Annoys or offends the senses; or
3) Shocks, defies or disregards decency or morality; A:
or 1. Public officers
4) Obstructs or interferes with free passage of any 2. Private persons - if nuisance is specially injurious to
public highway or street or any body of water; or himself, by removing or if necessary, by destroying the
5) Hinders or impairs the use of the property. thing which constitutes the same, without committing
(Art. 694, NCC) a breach of the peace, or doing unnecessary injury, the
ff. steps must be made:
Q: What are the kinds of nuisance? i. demand be first made upon owner or
possessor of the property to abate the
A: nuisance
1. As to the number of persons affected: ii. that such demand has been rejected
iii. that the abatement be approved by the
a. Public (or common) – one that affects a district health officer and executed with the
community or neighborhood or any considerable assistance of local police
number of persons although the extent of the iv. that the value of destruction does not
annoyance, danger or damage upon individuals exceed P3,000 (Art. 704, NCC)
may be unequal. (Suarez, 2011, 223)
Q: What is a private nuisance?
b. Private – is one which affects an individual or
few persons only. A: One that affects an individual or a limited number of
individuals only
2. Other classification:

CIVIL LAW
Q: What are the remedies against private nuisances?
A:
1. Civil action
2. Abatement, without judicial proceedings (Art. 705,
NCC)
Note: Any person injured by a private nuisance may abate it by

removing, or if necessary, by destroying the thing which
constitutes the nuisance, without committing a breach of the
peace or doing unnecessary injury. However, it is indispensable
that the procedure for extrajudicial abatement of a public nuisance
by a private person be followed (Art. 707, NCC).
Q: When may a private person or a public official

extrajudicially abating a nuisance liable for damages?
A: If he causes and injury or if an alleged nuisance is later

declared by courts to be not a real nuisance
ATTRACTIVE NUISANCE
Q: What is an attractive nuisance?
A: A condition or appliance in question although in danger

is apparent to those of age, is so enticing and alluring to
children of tender years as induce them to approach, get
on or use it and this attractiveness is an implied invitation
to children. (Hidalgo Enterprises, Inc. v.Balandan, 91 Phil
488)
Note: The attractiveness of the premises or of the dangerous

instrumentality to children of tender years is to be considered as
an implied invitation, which takes the children who accepted it out
of the category of a trespasser and puts them in the category of
invitees, towards whom the owner of the premises or
instrumentality owes the duty of ordinary care
Note: Nature has created streams, lakes and pools which attract
children. Lurking in their waters is always the danger of drowning.
Against this danger children are early instructed so that they are
sufficiently presumed to know the danger; and if the owner of
private property creates an artificial pool on his own property,
merely duplicating the work of nature without adding any new
danger, he is not liable because of having created an "attractive
nuisance." (Hidalgo Enterprises, Inc. v.Balandan, 91 Phil 488)
Q: What is easement against nuisance?
A: Easement against nuisance is established by Art. 682 –

683. It is intended to prohibit the proprietor or possessor of
a building or land from committing nuisance therein
through noise, jarring, offensive odor, smoke, heat, dust,
water, glare, and other causes (Gonzalez-Decano, Notes on
Torts & Damages Under the Civil Code of the Philippines,
2010, p166)

2013 GOLDEN NOTES
DAMAGES
BOOK II – DAMAGES
GENERAL CONSIDERATIONS
Q: What are damages?
A: The pecuniary compensation, recompense or satisfaction

for an injury sustained or as otherwise expressed the
pecuniary consequences which the law imposes for the
breach of some duty or violation of some rights.
Note: A complaint for damages is personal in nature (personal

action)
Q: What are the kinds of damages?
A: MENTAL
1. Moral
2. Exemplary
3. Nominal
4. Temperate
5. Actual
6. Liquidated
ACTUAL/
MORAL NOMINAL
COMPENSATORY
According to purpose
Actual or compensatory damages simply Awarded only to enable the injured party Vindicating or recognizing the injured
make good or replace the loss caused by to obtain means, diversion or party’s right to a property that has been
the wrong. amusement that will alleviate the moral violated or invaded. (Tan v. Bantegui, 473
suffering he has undergone, by reason of SCRA 663)
defendants culpable action. (Robleza v.
CA, 174 SCRA 354)
According to manner of determination
Claimant must produce competent proof No proof of pecuniary loss is necessary. No proof of pecuniary loss is necessary.
or the best evidence obtainable such as The assessment is left to the discretion of Proof that a legal right has been violated
receipts to justify an award therefore. the court according to the circumstances is what is only required. Usually awarded
Actual or compensatory damages of each case. However, there must be in the absence of proof of actual
cannotbe presumed but must be proved proof that the defendant caused physical damages.
with reasonable certainty. (People v. suffering, mental anguish, moral shock,
Ereno, Feb. 22, 2000) etc. (Compania Maritima v. Allied Free
Worker’s Union, G.R. No. L-31379, Aug.
29, 1988).
Actual damages must be substantiated
by documentary evidence, such as GR: Factual basis must be alleged. Aside
receipts, in order to prove expenses from the need for the claimant to
incurred as a result of the death of the satisfactorily prove the existence of the
victim or the physical injuries sustainedfactual basis of the damages, it is also
by the victim. (Philippine Hawk necessary to prove its causal relation to
Corporation v. Vivian Tan Lee,G.R. No. the defendant’s act (Raagas v. Trava,
166869, Feb. 16, 2010) G.R. No. L-20081, Feb. 27,1968; People v.
Manero, G.R. Nos. 86883-85, Jan. 29,
XPN: Damages for loss of earning 1993).
capacity may be awarded despite the
absence of documentary evidence when: XPN: Criminal cases. Moral damages
(1) the deceased is self-employed and may be awarded to the victim in criminal
earning less than the minimum wage proceedings in such amount as the court
under current labor laws, in which case, deems just without need for pleading or
judicial notice may be taken of the fact proof of the basis thereof (People v.
that in the deceased's line of work no Paredes, July 30, 1998). The amount of

CIVIL LAW
documentary evidence is available; or (2) P50,000 is usually awarded by the Court

the deceased is employed as a daily wage in case of the occurrence of death
worker earning less than the minimum
wage under current labor laws (Philippine
Hawk Corporation v. Vivian Tan Lee, G.R.
166869, Feb. 16, 2010).
Special/Ordinary
Ordinary Special Special
Note: Ordinary Damages are those generally Note: Special Damages are those which exist
inherent in a breach of a typical contract because of special circumstances and for
which a debtor in good faith can be held liable
if he had been previously informed of such
circumstances.

2013 GOLDEN NOTES
DAMAGES
EXEMPLARY/
TEMPERATE LIQUIDATED
CORRECTIVE
According to purpose
When the court is convinced that there Liquidated damages are frequently Exemplary or corrective damages are
has been such a loss, the judge is agreed upon by the parties, either by way intended to serve as a deterrent to
empowered to calculate moderate of penalty or in order to avoid serious wrongdoings. (People v. Orilla,
damages rather than let the complainant controversy on the amount of damages. 422 SCRA 620)
suffer without redress. (GSIS v. Labung-
Deang, 365 SCRA 341)
According to manner of determination
May be recovered when the court finds If intended as a penalty in obligations 1. That the claimant is entitled to moral,
that some pecuniary loss has been with a penal cause, proof of actual temperate or compensatory damages;
suffered but its amount cannot, from the damages suffered by the creditor is not and
nature of the case, be proved with necessary in order that the penalty may
certainty. No proof of pecuniary loss is be demanded (Art. 1228, NCC). 2. That the crime was committed with 1
necessary. or more aggravating circumstances, or
No proof of pecuniary loss is necessary. the quasi-delict was committed with
gross negligence, or in contracts and
quasi-contracts the act must be
accompanied by bad faith or done in
wanton, fraudulent, oppressive or
malevolent manner.
No proof of pecuniary loss is necessary.
Special/Ordinary
Special Special Special
ACTUAL AND COMPENSATORY DAMAGES Note: Liquidated damages take the place of actual
damages except when additional damages are incurred.
Q: What are actual or compensatory damages?
2. Forfeiture of bonds in favor of the government
A: It comprehends not only the value of the loss suffered for the purpose of promoting public interest or
but also that of the profits which the obligee failed to policy (Far Eastern Surety and Insurance Co. v.
obtain. The amount should be that which would put the Court of Appeals, 104 Phil 702)
plaintiff in the same position as he would have been if he
had not sustained the wrong for which he is now getting 3. Loss is presumed (Manzanares v.Moreta, 38 Phil
compensation or reparation. To recover damages, the 821)
amount of loss must not only be capable of proof but must
actually be proven. 4. When the penalty clause is agreed upon in the
contract between the parties (Art. 1226)
Q: What is the purpose of the law in awarding actual
damages? Q: What is the distinction between civil liability ex delicto
and actual or compensatory damages?
A: Its purpose is to repair the wrong that has been done, to
compensate for the injury inflicted, and not to impose a Civil Indemnity Actual or
penalty. (Algarra v.Sandejas, 27 Phil 284) Ex Delicto Compensatory
Damages
Q: Is it necessary that loss be proved? Can be awarded To be recoverable must
without need of further additionally be
A: GR: Loss must be proved before one can be entitled to proof than the fact od established with
damages. commission of the reasonable degree of
felony. certainty (People v.
XPN: Loss need not be proved in the following cases: Dianos, 297 SCRA 191)
1. Liquidated damages previously agreed upon (Art.
2226)

CIVIL LAW
Q: What is the required proof for actual damages? Thus, life expectancy is, not only relevant, but, also, an
important element in fixing the amount recoverable,
A: It is necessary that the claimant produces competent although it is not the sole element determinative of said
proof or the best evidence obtainable such as receipts to amount.
justify an award therefore. Actual or compensatory
damages cannot be presumed but must be proved with Note: The formula that has gained acceptance over time has
reasonable certainty (People v. Ereno, Feb. 22, 2000) limited recovery to net earning capacity. The premise is obviously
that net earning capacity is the person’s capacity to acquire money,
less the necessary expense for his own living (Philtranco Service
Any person who seeks to be awarded actual or
Enterprises v. Felix Paras and Inland Trailways Inc. G.R. No. 161909,
compensatory damages due to acts of another has the April 25, 2012).
burden of proving said damages as well as the amount
thereof. Actual damages cannot be allowed unless Q: Is it proper for the heirs to claim as damages the full
supported by evidence on the record. The court cannot amount of earnings of the deceased?
rely on speculations, conjectures or guesswork as to the
fact and amount of damages (Banas, Jr. v. CA, Feb. 10, A: No. Said damages consist, not of the full amount of his
2000) earnings, but of the support they received or would have
received from him had he not died in consequence of the
Q: What are the kinds of actual or compensatory negligence of the bus' agent. Stated otherwise, the amount
damages? recoverable is not loss of the entire earning, but rather the
loss of that portion of the earnings which the beneficiary
A: would have received. In other words, only net earnings, not
1. Damnun Emergens (actual damages) – the value of gross earning, are to be considered.
the actual pecuniary loss for what the claimant already
possesses before the incident which must be In fixing the amount of that support, the "necessary
supported by receipts or the best evidence available. expenses of his own living" should be deducted from his
earnings. Earning capacity, as an element of damages to
2. Lucrum cessans (compensatory damages) –the expected one's estate for his death by wrongful act, is necessarily his
profits which were not realized by reason of the act of the net earning capacity or his capacity to acquire money, less
offender or tortfeasor (Pineda, Torts and Damages, 2009, the necessary expense for his own living (Villa Rey Transit,
163-164) Inc. v. CA, et al., G.R. No. L-25499, Feb. 18, 1970).
Note: As a rule, documentary evidence should be presented to
Q: Can both actual and compensatory damages be granted
substantiate the claim for damages for loss of earning capacity. By
way of exception, damages for loss of earning capacity may be at the same time to the plaintiff?
awarded despite the absence of documentary evidence when: (1)
the deceased is self-employed and earning less than the minimum A: Yes. As provided for in Art 2200, indemnification for
wage under current labor laws, in which case, judicial notice may damages shall comprehend not only the value of the loss
be taken of the fact that in the deceased's line of work no suffered, or actual damages (damnum emergens), but also
documentary evidence is available; or (2) the deceased is that of the profits which the obligee failed to obtain or
employed as a daily wage worker earning less than the minimum compensatory damages (lucrum cessans). In other words,
wage under current labor laws.(Philippine Hawk Corporation v.
there are two components to actual damages. (RCPI vs. CA,
Vivian Tan Lee, G.R. 166869, Feb. 16, 2010)
103 SCRA 359)
Q: What must be considered in determining the amount of
ATTORNEY’S FEES AND EXPENSES OF LITIGATION
damages recoverable?
Q: What are the two concepts of attorney’s fees?
A: Much is left to the discretion of the court considering the
Distinguish one from the other.
moral and material damages involved. There can be no
exact or uniform rule for measuring the value of a human
A:
life. The amount recoverable depends on the particular
1. Ordinary
facts and circumstances of each case.
2. Extraordinary
The life expectancy of the deceased or of the beneficiary,
whichever is shorter, is an important factor. Other factors ORDINARY EXTRAORDINARY
that are usually considered are: Nature
1. Pecuniary loss to plaintiff or beneficiary; The reasonable
2. Loss of support; compensation paid to a An indemnity for damages
3. Loss of service; lawyer for the legal ordered by the court to be paid
4. Loss of society; services rendered to a by the losing to the prevailing
5. Mental suffering of beneficiaries; and client who has engaged party in litigation
6. Medical and funeral expenses. him
Basis
The fact of employment Any cases authorized by law

2013 GOLDEN NOTES
DAMAGES
of the lawyer by the EXTENT OR SCOPE OF ACTUAL DAMAGES

client
To whom payable IN CONTRACTS AND QUASI-CONTRACTS
Lawyer Client
Q: What should be the amount of actual damages?
Q:To what does Art. 2208 pertain?
A: The amount should be that which would put the plaintiff
A: Art. 2208 pertains to extraordinary attorney’s fees. They in the same position as he would have been if he had not
are actual damages due to the plaintiff. Plaintiff must allege sustained the wrong for which he is now getting
the basis of his claim for attorney’s fees in the complaint. compensation or reparation.
1. Property – value at the time of destruction, or
Q: Are attorney’s fees recoverable as actual damages? market value, plus, in proper cases, damages for
the loss of use during the period before
A: GR: Not recoverable. replacement, value of use of premises, in case of
XPN: SWISS- MUD- ERC mere deprivation of possession.
1. Stipulation between parties
2. Recovery of Wages of household helpers, 2. Personal injury- medical expenses; If the
laborers and skilled workers qualifying circumstance is present to justify the
3. Actions for Indemnity under workmen's imposition of death penalty, the civil indemnity
compensation and employer liability laws should be no less than P75,000. If the rape is
4. Legal Support actions simple rape, the civil indemnity is P50,000 (People
5. Separate civil action to recover civil liability v. Banago, 309 SCRA 417)
arising from crime
6. Malicious prosecution Note: Civil indemnity is mandatory upon the finding of
the fact of rape and is automatically imposed upon the
7. Clearly Unfounded civil action or proceeding
accused without need of proof other than the fact of
against plaintiff the commission of the rape. (People v. Lacerna, 309
8. When Double judicial costs are awarded SCRA 250)
9. When Exemplary damages are awarded
10. Defendant acted in gross & evident bad faith 3. Death – Wake and burial expenses, P P75,000 by
in Refusing to satisfy plaintiff's just & way of civil indemnity ex delicto which requires
demandable claim no proof other than the fact of death of the victim
11. When defendant's act or omission and the assailant’s responsibility therefor. (People
Compelled plaintiff to litigate with 3rd v.Tabarnero, 693 SCRA 495 )
persons or incur expenses to protect his
interest 4. Physical Injuries – Moral damages of P30,000may
be recovered by way of civil indemnity. (Guillang
Note: If not pleaded and prayed for in the complaint, attorney’s v. Bedania. G.R. No. 162987, May 21, 2009)
fees are barred. (Tin Po v. Bautista, 103 SCRA 388)
Q:Can actual damages be mitigated?
Q: Will the amount of attorney’s fees affect the
jurisdiction of the court?
A: Yes, in the following cases:
1. For Contracts:
A: No. If the claim is pursued in the very action where the
a. Violation of terms of the contract by the
services were rendered, the court may pass upon said
plaintiff himself;
claim, even if its amount were less than the minimum
b. Enjoyment of benefit under the contract
prescribed by law for the jurisdiction of said court, upon the
by the plaintiff himself;
theory that the right to recover attorney’s fees is but an
c. Defendant acted upon advice of counsel in
incident of the case in which the services of the counsel
cases where the exemplary damages are to
have been rendered. The rule against multiplicity of suits
be awarded such as under Articles 2230,
will in effect be subserved. (Pan Pacific Co. v. Advt. Corp.,
2231 and 2232;
132 Phil 446)
d. Defendant has done his best to lessen the
plaintiff’s injury or loss.
Note: Moral damages and attorney’s fees cannot be consolidated
for they are different in nature and each must be separately 2. For Quasi-contracts:
determined. (Philippine Veterans Bank v. NLRC, 317 SCRA 510) a. In cases where exemplary damages are to
be awarded such as in Article 2232;
b. Defendant has done his best to lessen the
plaintiff’s injury or loss.
3. For Quasi-delicts:
a. That the loss would have resulted in any
event because of the negligence or omission
of another, and where such negligence or

CIVIL LAW
omission is the immediate and proximate Note: No interest shall be adjudged on unliquidated claims or
cause of the damage or injury; damages except when or until the demand can be established with
b. Defendant has done his best to lessen the reasonable certainty. (Solid Homes, Inc. v. IAC, 508 SCRA 165)
plaintiff’s injury or loss. (Pineda, Torts and
Damages, 2009, p.222-223) MORAL DAMAGES
IN CRIMES AND QUASI-DELICTS Q: What do moral damages include?
Q: What is the amount of damages in cases where death A: It includes physical suffering, mental anguish, fright,
resulted from a crime or quasi-delict? serious anxiety, besmirched reputation, wounded feelings,
moral shock, social humiliation, and similar injury. (Art.
A: Art. 2206 provides that the amount of damages for 2217, NCC)
death caused by a crime or quasi-delict shall be at least
P75, 000, even though there may have been mitigating Q: What is the nature of moral damages?
circumstances. (People v. Tabarnero, 693 SCRA 495)
A: Although incapable of pecuniary estimation, they are in
In addition to the amount to be awarded, the defendant the category of an award designed to compensate the
shall also be liable for the following: claimant for actual injury suffered and not to impose a
penalty on the wrong does. (Pineda, Torts and Damages,
1. Loss of the earning capacity of the deceased, 2009, p. 229)
and the indemnity shall be paid to the heirs
of the latter; such indemnity shall in every Q: Why are moral damages awarded?
case be assessed and awarded by the court,
unless the deceased on account of A: They are awarded to enable the injured party to obtain
permanent physical disability not caused by means, diversions or amusement that will serve to alleviate
the defendant, had no earning capacity at the moral suffering he has undergone by reason of the
the time of his death; defendant’s culpable action. (Prudenciado v. Alliance
Transport System, Inc., 148 SCRA 440)
2. If the deceased was obliged to give support
according to the provisions of Article 291, Q: How can the plaintiff recover moral damages?
the recipient who is not an heir called to the
decedent's inheritance by the law of testate A: GR: The plaintiff must allege and prove:
or intestate succession, may demand 1. The factual basis for moral damages and
support from the person causing the death, 2. The causal relation to the defendant’s act
for a period not exceeding five years, the
exact duration to be fixed by the court; XPN: Moral damages may be awarded to the victim in
criminal proceedings without the need for pleading of
Note: The article only mentioned heir. Consequently, it proof or the basis thereof.
cannot speak of devisees and legatees who are
receiving support from the deceased. Q: When are moral damages recoverable?
3. The spouse, legitimate and illegitimate A: Moral damages may be recovered in the following and
descendants and ascendants of the deceased analogous cases:
may demand moral damages for mental 1. A criminal offense resulting in physical injuries;
anguish by reason of the death of the 2. Quasi-delicts causing physical injuries;
deceased. 3. Seduction, abduction, rape, or other lascivious
acts;
Note: The petitioner has correctly relied on the holding in Receiver 4. Adultery or concubinage;
for North Negros Sugar Company, Inc. v. Ybañez (G.R. No. L-22183, 5. Illegal or arbitrary detention or arrest;
August 30, 1968), to the effect that in case of death caused by 6. Illegal search;
quasi-delict, the brother of the deceased was not entitled to the
7. Libel, slander or any other form of defamation;
award of moral damages based on Article 2206 of the Civil Code.
(Sulpicio Lines Inc. v. Curso, et. al., G.R. No. 157009, Mar. 17, 2010) 8. Malicious prosecution;
9. Acts mentioned in Article 309; and
Q: When can interest be part of damages? 10. Actions referred to in Articles 21, 26, 27, 28, 29,
30, 32, 34, and 35. (Art. 2219, NCC)
A: In crimes and quasi-delicts, the court may appropriately
Note: To award moral damages, a court must be satisfied with
impose interest on the amount of the damages adjudicated
proof of the following:
by the court. The basis of interest is the legal rate which is 1. an injury – whether physical, mental or psychological;
6% per annum. (Art. 2209) 2. a culpable act or omission factually established;
3. a wrongful act or omission of the defendant as the
proximate cause of the injury sustained by the claimant;

2013 GOLDEN NOTES
DAMAGES
4. the award of damages predicated on any of the cases damages cannot stand since the Civil Code provides that
stated in Art. 2219. exemplary damages are imposed in addition to moral,
temperate, liquidated or compensatory damages. Finally,
Art. 2219, NCC speaks provides for criminal offense resulting from
since the award of moral and exemplary damages is no
physical injuries and quasi-delicts causing physical injuries.
longer justified, the award of attorney's fees and expenses
of litigation is left without basis. (Buenaventura v. CA,G.R.
Q: Is there any instance wherein the plaintiff may not
No. 127358, Mar. 31, 2005)
prove the factual basis for moral damages as well as the
causal relation to the defendant’s act?
NOMINAL DAMAGES
A: Yes. In criminal proceedings for rape.
Q: What is the purpose of nominal damages?
Requisites:
A: In order that a right of the plaintiff which has been
1. There must be an injury whether physical,
violated or invaded by the defendant may be vindicated or
mental or psychological, clearly sustained by
recognized, and not for the purpose of indemnifying the
the claimant
plaintiff for any loss suffered by him.
2. There must be culpable act or omission
3. Such act or omission is the proximate cause
Note: Elements:
of the injury 1. Plaintiff has a right;
4. The damage is predicated on the cases cited 2. Such right is violated;
in Art. 2219 3. The purpose of awarding damages is to vindicate
or recognize the right violated.
Q: In rape cases, is civil indemnity the same with moral
damages? Q: In what cases are nominal damages awarded?
A: No, civil indemnity is different from moral damages. It is A: Nominal damages are small sums fixed by the court
distinct from and should not be denominated as moral without regard to the extent of the harm done to the
damages which are based on different jural foundations injured party.They are damages in name only and are
and assessed by the court in the exercise of sound allowed simply in recognition of a technical injury based on
discretion (People v. Caldona, G.R. No. 126019, Mar. 1, a violation of a legal right.
2001).
Note: Nominal damages cannot co-exist with actual or
Q: What are those tortuous acts referred to in Articles 21, compensatory damages because nominal damages are recoverable
26, 27, 28.29, 32, 34 and 35 of the NCC, wherein the when the damages suffered cannot be proved with reasonable
certainty. The law presumes damage although actual or
plaintiff may recover moral damages?
compensatory damages are not proven. Award of actual, moral,
temperate or moderate damages preclude nominal damages. But it
A: may be awarded together with attorney’s fees. (Pineda, pp. 284-
1. Willful acts contrary to morals, good customs or public 285, 2009 )
policy
2. Disrespect to the dignity, personality, privacy and TEMPERATE OR MODERATE DAMAGES
peace of mind of neighbors and other persons
3. Refusal or neglect of a public servant to perform his Q: What are temperate damages?
official duty without just cause
4. Unfair competition in enterprise or in labor A: Those damages, which are more than nominal but less
5. Civil action for damages against accused acquitted on than compensatory, and may be recovered when the court
reasonable doubt finds that some pecuniary loss has been suffered but its
6. Violation of civil rights amount cannot be proved with certainty.
7. Civil action for damages against city or municipal
police force Note: Elements:
8. When the trial court finds no reasonable ground to 1. Some pecuniary loss;
believe that a crime has been committed after a 2. Loss is incapable of pecuniary estimation;
preliminary investigation or when the prosecutor 3. The damages awarded are reasonable.
refuses or fails to institute criminal proceedings.
Q: What is the rationale behind the temperate or
Q: May moral and exemplary damages be granted if a moderate damages?
marriage was dissolved on the ground of psychological
incapacity? A: The rationale is precisely that from the nature of the
case, definite proof of pecuniary loss cannot be offered.
A: By declaring petitioner as psychologically incapacitated, (Pineda, Torts and Damages, 2009, p.288)
the possibility of awarding moral damages was negated,
which should have been proved by specific evidence that it Note: In the absence of competent proof of the actual damage
was done deliberately. Thus, as the grant of moral damages caused on the motorcycle or the actual cost of its repair, the award
was not proper, it follows that the grant of exemplary of temperate damages by the appellate court in the amount of
P10,000.00 was reasonable under the circumstances. (Philippine

CIVIL LAW
Hawk Corporation v. Vivian Tan Lee, G.R. No. 166869, Feb. 16, 3. Contracts and Quasi-contracts – when
2010) defendant acted in wanton, fraudulent, reckless,
oppressive, or malevolent manner (Art. 2232)
LIQUIDATED DAMAGES
Q: What are the requirements for an award of exemplary
Q: What are liquidated damages? damages?
A: These are fixed damages previously agreed by the A:

parties to the contract and payable to the innocent party in 1. The claimant’s right to exemplary damages has been
case of breach by the other. (Pineda, Torts and Damages, established
2009, p.292) 2. Their determination depends upon the amount of
compensatory damages that may be awarded to the
Q: When may liquidated damages be equitably reduced? claimant
3. The act must be accompanied by bad faith or done in
A: wanton, fraudulent, oppressive or malevolent manner.
1. Iniquitous or unconscionable (National Steel Corp., v. RTC of Lanao del Norte, Br.2,
2. Partial or irregular performance Iligan City, 304 SCRA 597)
Q: What is the rule governing in case of breach of DAMAGES IN CASE OF DEATH

contract?
Q: What are the damages that can be recovered in case of
A: Art. 2228, NCC, provides that when the breach of death?
contract committed by the defendant is not the one
3
contemplated by the parties in agreeing upon the A: MEA-I
liquidated damages, the law shall determine the measure 1. Moral damages
of damages, and not the stipulation. 2. Exemplary damages
3. Attomey's fees and expenses for litigation
EXEMPLARY OR CORRECTIVE DAMAGES 4. Indemnity for death
5. Indemnity for loss of earning capacity
Q: What are exemplary damages? 6. Interest in proper cases
A: Also known as “punitive” or “vindictive” damages. These Q: What is the rule with regard to crimes and quasi-delicts
are imposed by way of example or correction for the public causing death?
good, in addition to the moral, temperate, liquidated or
compensatory damages; A: In case of death, the plaintiff is entitled to the amount
that he spent during the wake and funeral of the deceased.
Q: What is the rationale behind exemplary damages? However, it has been ruled that expenses after the burial
are not compensable.
A: Exemplary damages are required by public policy, for
wanton acts must be suppressed. They are an antidote so Note: The amount of damages for death caused by a crime or
the poison of wickedness may not run through the body quasi-delict shall be at least three thousand pesos, even though
politic(Diaz vsAmante, 104 Phil 968).They are intended to there may have been mitigating circumstances. In addition:
1. The defendant shall be liable for the loss of the
serve as a deterrent to serious wrongdoings and as a
earning capacity of the deceased, and the
vindication of undue sufferings and wanton of invasion of indemnity shall be paid to the heirs of the latter;
the rights of an injured or a punishment for those guilty of such indemnity shall in every case be assessed
outrageous conduct. (People v. Catubig, 363 SCRA 621) and awarded by the court, unless the deceased
on account of permanent physical disability not
Q: In what cases may exemplary damages be imposed as caused by the defendant, had no earning
accessory damages? capacity at the time of his death;
2. If the deceased was obliged to give support
according to the provisions of Article 291, the
A: GR: Exemplary damages cannot be recovered as a matter
recipient who is not an heir called to the
of right (Art. 2233, NCC) decedent's inheritance by the law of testate or
intestate succession, may demand support from
XPN: They can be imposed in the following cases: the person causing the death, for a period not
1. Criminal offense – when the crime was exceeding five years, the exact duration to be
committed with one or more aggravating fixed by the court;
circumstances (Art. 2230) 3. The spouse, legitimate and illegitimate
descendants and ascendants of the deceased
may demand moral damages for mental anguish
2. Quasi-delicts – when the defendant acted with
by reason of the death of the deceased. (Art.
gross negligence (Art. 2231) 2206, NCC)

2013 GOLDEN NOTES
DAMAGES
GRADUATION OF DAMAGES MISCELLANEOUS RULES
Q: What is the rule in graduation of damages in torts Q: What is the duty of the injured party?
cases?
A: The injured party is obligated to undertake measures
A: Generally, the degree of care required is graduated that will alleviate and not aggravate his condition after the
according to the danger a person or property attendant infliction of the injury or nuisance. The injured party has the
upon the activity which the actor pursues or the burden of explaining why he did not do so (Art. 2203, NCC).
instrumentality he uses. The greater the danger the greater
the degree of care required. Q: What are the damages that cannot co-exist, must co-
exist and must stand alone?
However, foreseeability is not the same as probability. Even
if there is lesser degree of probability that damage will A:
result, the damage may still be considered foreseeable. Damages that Damages that
Damages that
cannot co- must stand
Note: The test as respects foreseeability is not the balance of must co-exist
exist alone
probabilities, but the existence, in the situation in hand, of some Exemplary
real likelihood of some damage and the likelihood is of such
Nominal Damages must
appreciable weight and moment to induce, or which reasonably
should induce, action to avoid it on the part of a person or a
Damages co-exist with
reasonably prudent mind. cannot co-exist Moral, Nominal
with Temperate, Damages
Q: How are damages adjudicated in case of crimes? Exemplary Liquidated or
Damages Compensatoy
A: In crimes, the damages to be adjudicated may be Damages
respectively increased or lessened according to the
aggravating or mitigating circumstances (Art. 2204, NCC)
Q: When can damages be reduced in quasi-delict?
A: The contributory negligence of the plaintiff shall reduce

the damages he may recover. (Art. 2214, NCC)
Q: When can the court equitably mitigate the damages in

contract, quasi-contracts and quasi-delicts?
A: The court can mitigate the damages in the following

instances other than in Art. 2214:
1. That the plaintiff himself has contravened the
terms of the contract
2. That the plaintiff has derived some benefit as a
result of the contract
3. In cases where exemplary damages are to be
awarded, that the defendant acted upon the
advice of counsel
4. That the loss would have resulted in any event
5. That since the filing of the action, the defendant
has done his best to lessen the plaintiff’s loss or
injury. (Art. 2215, NCC)
Q: When can liquidated damages be equitably reduced?
A: Liquidated damages, whether intended as an indemnity

or a penalty, shall be equitably reduced if they are
iniquitous or unconscionable (Art. 2227, NCC).


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EFFECT AND APPLICATION OF LAWS

EFFECT AND APPLICATION OF LAWS Q: Are all laws required to be published?

Q: What is a law? A: GR: Yes. Publication is indispensable.

A: In its jural and concrete sense, law means a rule of XPNs:

UNIVERSITY OF SANTO TOMAS

UNIVERSITY OF SANTO TOMAS

Q: What are the elements of waiver of rights? JUDICIAL DECISIONS

A: EKI Q: Are judicial decisions considered laws in this

UNIVERSITY OF SANTO TOMAS

Q: How are customs proved? Q: How do you compute the periods?

UNIVERSITY OF SANTO TOMAS

UNIVERSITY OF SANTO TOMAS

Q: What law governs the validity of wills?

UNIVERSITY OF SANTO TOMAS

UNIVERSITY OF SANTO TOMAS

his birth 2. If there is legal

Even in case of remarriage of the surviving parent, still

4. If the child is adopted, the domicile of choice of the

INSANES, IDIOTS, IMBECILES

1. If they are below the age of majority, the rules on

2. If they are of age and have guardians, they follow the

3. If they are of age and have no guardians, their

UNIVERSITY OF SANTO TOMAS

Q: What law governs the validity of contracts?

Contract for air transportation

2. If there was malice, gross negligence, or bad faith, or improper discrimination,

UNIVERSITY OF SANTO TOMAS

UNIVERSITY OF SANTO TOMAS

A: No. It is the clear and manifest intent of our law making

Note: To constitute seduction there must be some

Q: What is accion in rem verso?

A: It is an action for recovery of what has been paid or

UNIVERSITY OF SANTO TOMAS

Q: What is meant by civil personality? Q: How is personality acquired by natural persons?

UNIVERSITY OF SANTO TOMAS

UNIVERSITY OF SANTO TOMAS

A: A: If the baby was not alive when completely delivered

Q: At the age of 18, Marian found out that she was A:

UNIVERSITY OF SANTO TOMAS

UNIVERSITY OF SANTO TOMAS

UNIVERSITY OF SANTO TOMAS

Q: Will the solemnizing officer’s failure to execute an MARRIAGE LICENSE

UNIVERSITY OF SANTO TOMAS

2. No legal impediment to marry each other During the

UNIVERSITY OF SANTO TOMAS

UNIVERSITY OF SANTO TOMAS

However, if the Filipino spouse remained to be a citizen of the

VOID AND VOIDABLE MARRIAGES

Q: What may be the status of marriages?

Q: What are the distinctions between void and voidable marriages?

Either directly or collaterally Judicial declaration is necessary

UNIVERSITY OF SANTO TOMAS

XPN: Those conceived or born of marriages declared void Legitimate

VOID MARRIAGE 1. If the change is artificial – No, he/she cannot.

UNIVERSITY OF SANTO TOMAS

XPN: Note: The same applies to polygamy.

UNIVERSITY OF SANTO TOMAS

A: Q: What are the guidelines set by the Court to aid it in its

UNIVERSITY OF SANTO TOMAS

A: A petition to declare the marriage void due to absence of A:

UNIVERSITY OF SANTO TOMAS

have been voidable.

In both cases, the fact that the German misrepresented his