a.

Res nullius belong to no one and the reason is that they have not yet been appropriated

PROPERTY

b. Res communes really owned by everybody in that their use and enjoyment are given to all mankind. c. Res alicujus are owned privately, either collectively or individually

1. Define property -

&. '( ssifi) tion of property:

ANS: Property may be defined as anything which is or may be the object of appropriation.

a.

ccording to its nature, mobility and non!mobility ". #ovable or personal property

2. Distinguish between thing n! property " b. ANS: Strictly speaking, the concept of thing is broader than the concept of property, because while property refers only to those objects which are or may be the object of appropriation, thing refers also to those which are not or may not be the object of appropriation. In other words, thing is the genus, while property is the species.

$. Immovable or real property ccording to its ownership ". Public dominion $. Private ownership c. ccording its alienability ". %ithin the commerce of man $. &utside the commerce of man

#. The three $in!s of things% !epen!ing on the n ture of their ownership:

d.

ccording to its e'istence ". present property $. future property

e.

ccording to its materiality or immateriality

". (angible or corporeal )can be seen or touched* $. Intangible or incorporeal )rights or credits* f. ccording to its dependence or importance ". Principal $. g. ccessory

it is tangible or corporeal being a thing. %hile a human being is alive, he cannot, as such, be the object of a contract, for he is considered outside the commerce of man. 2e may, of course, offer to another the use of various parts of the body. 2e may donate part of his blood, may even sell part of his hair1 but he cannot sell his body.

ccording to its capability of substitution ". +ungible )capable of substitution by other things of the same ,uantity and ,uality* $. -on!fungible )incapable of such substitution, hence, the identical thing must be given or returned*

0. The !ifferent ) !e-i) )( ssifi) tions of re ( properties "

ANS: ". Immovables by nature, or those which cannot be moved from place to place, such as those mentioned in -os. " )with respect to land and roads* and 3 in rt. 4"5 of the -66. $. Immovables by incorporation, or those which are attached to an immovable in such a manner as to form and integral part thereof, such as those mentioned in -os." )e'cept lands 7 roads*, $, 8, and 4 of rt. 4"5, -66. 8. Immovables by destination, or those which are placed in an immovable for the use, e'ploitation or perfection of such immovable, such as those mentioned in -os. 4, 5, 9, : and ; of rt. 4"5, -66. 4. Immovables by analogy, or those which are considered immovables by operation of law, such as those mentioned in -o. "< of art. 4"5, -66. 1. The fo((owing re i--o/ b(e properties enu-er te! by ( w "

h.

ccording to its definiteness ". .eneric $. Specific

i.

ccording to whether in the custody of the court of free ". In /custodia legis0 $. +ree property )not in /custodia legis0*

*. +s the ,u- n .o!y% whether !e ! or property-

(i/e%

re ( or person (

ANS: %hether dead or alive, it is neither real or personal property, for it is not even property at all, in that it generally cannot be appropriated. It is indeed, a thing or a being, for it e'ists1 in fact,

ANS:

a. =and, buildings, roads and constructions of all kinds adhered to the soil1 b. (ress, plants, and growing fruits, while they are attached to the land or form an integral part of an immovable1 c. >verything attached to an immovable in a fi'ed manner in such a way that it cannot be separated therefrom without breaking the material or deterioration of the object1 d. Statues, reliefs, paintings or other objects for use or ornamentation, placed in buildings or on lands by the owner of the immovable in such a manner that it reveals the intention to attach them permanently to the tenements1 e. #achinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land, and which tend directly to meet the needs of the said industry or works1 f. nimal houses, pigeon houses, beehives, fishponds or breeding places of similar nature, in case their owner has placed them or preserves them with the intention to have them permanently attached to the land and forming a permanent part of it1 the animals in these places are included1

2. Re3uisites in or!er th t - )hinery - y be )onsi!ere! i--o/ b(e property "

ANS: ". (he machinery must have been placed by the owner or an agent of the same. $. n industry or works must be carried on in the building or land1

8. (he machinery must tend directly to meet the needs of the industry or works1 4. (he machinery must be essential and principal to the pursuance of the business of the owner, and not merely incidental.

4. 5hen 6 )hinery i--o/ b(e "

tt )he! to

( n! or

tene-ent )onsi!ere!

g. +ertili?er actually used on a piece of land1 h. #ines, ,uarries, and slag dumps, while the matter thereof forms part of the bed, and waters either running or stagnant1 i. @ocks and structures which, though floating, are intended by their nature and object to remain at affi'ed place on the river, lake or coast1 6ontracts for public works, and servitudes and other real rights over immovable property. ) rt. 4"5-66*

ANS: In par. 5 of rt. 4"5, -66. (he e'ception is when placed on the land or tenement by a tenant. )@avao Sawmill vs. 6astillo*

j.

(he e'ception to the e'ception is when the tenant had promised to leave the machinery on the tenement at the end of lease, or when he acted only as agent of the owner of the land. )Aalde? vs. 6entral*

17. +s

bui(!ing n i--o/ b(e property8

ANS: Bes, it is obvious that in the enumeration of immovable properties in rt. 4"5, -66, a building is mentioned independently of the land. Cy this, there is no other conclusion that a building is by itself an immovable property. )=ope? vs. &roso, Dr.*

ANS: -o, because the structure must be more or less permanent in nature in order that it may be classified as an immovable. If the same is a mere superimposition on the land, like the barongbarong, the same is not an immovable property.

1&. S pphire owns house n! (ot. The house is - !e of )on)rete - teri (s. S pphire so(! it to E-er (! for purposes of !e-o(ition. ,ow is the house )( ssifie!8 ANS: It is movable or personal property. In one case the Supreme 6ourt ruled that a building sold to be demolished may be considered personal property because the true object of the sale would be the materials.

11. 6 y

bui(!ing be )onsi!ere!

person ( property "

ANS: Bes. If there is a stipulation as when it is used as security in the payment of an obligation where a chattel mortgage is e'ecuted over it. It may also be considered personal if the building is being bought for purpose of demolishing the same. In this case, the materials resulting from the demolition are being bought. 12. +s -ortg ge on ( n! -o/ b(e or i--o/ b(e property8 ANS: It depends. If the mortgage is registered in the Registry of Property, it constitutes a real right over an immovable within the meaning of -o. "< of rt. 4"5 of the -66, which declares that the contracts for the public works, servitudes and other real rights over immovable property are classified as immovable property. 2owever, if the mortgage is not registered in the Registry of Property although valid as between the contracting parties, it cannot be classified as immovable property.

1*. The fo((owing things re !ee-e! to be person ( property " ANS: ". (hose movables susceptible of the appropriation which are not included in rt. 4"5, -66. $. Real property which by any special provision of law is considered as personalty1 8. +orces of nature which are brought under control by science1 4. In general, all things which can be transferred from place to place without impairment of the real property to which they are fi'ed. ) rt 4"9, -66*

1#. +s b rong-b rong bui(t on the p r)e( of ( n! be(onging to hi- be )( ssifie! s i--o/ b(e property "

(he following are also considered personal propertyE

". &bligations and actions which have for their object movables or demandable sums1 and $. Shares of stocks of agricultural, commercial and industrial entities, although they may have real estate. ) rt. 4":, -66.*

11. The tests to be pp(ie! su))essi/e(y in or!er to !eter-ine whether n ob9e)t is -o/ b(e or not " ANSE ". %hether the object can be transported from place to place1 $. %hether the change of location can take place without injury to the immovable to which it may be attached1 and whether it is not included in the enumeration found in rt. 4"5, -66. If the answer to all the above ,uestion is in the affirmative, then the object is movable. 12. +s p inting whi)h the owner (ent to so-ebo!y% who then tt )he! the s -e on the w (( of his house to be utify it with the ob(ig tion to return it within one wee$ )onsi!ere! s -o/ b(e or i--o/ b(e " ANS: It is movable due to lack of intent to attach it permanently.

10. ,ow is -o/ b(e property )( ssifie! ))or!ing to its n ture " ANS: s to their possibility of being consumed by their use, movable or personal property may be eitherE

". 6onsummable or those which cannot be used in a manner appropriate to their nature without their being consumed1 or $. -on!consummable or those which can be used in a manner appropriate to their nature without their being consumed. ) rt. 4"3, -66* s to their possibility of being substituted by others of the same kind and ,uality, they may be eitherE +ungibles, or those which can be substituted by others of the same kind and ,uality1 or

";. #ay certain things partake both of the nature of real and personal property ANS: Bes, certain things may partake of the nature of real and personal property at the same time. (his is e'pressly recogni?ed in -o. $ rt. 4"9 of the -66, which states that real property which by any provision of law is considered as personalty is deemed to be movable or personal property. (hus, under the 6hattel #ortgage =aw )Sec. :, ct -o. "5<3*, growing crops may be the object of a contract of chattel mortgage. Similarly, growing crops may also be considered as personalty for the purpose of a contract of sale.

-on!fungibles, or those which cannot be substituted by other of the same kind and ,uality.

27. +s

/esse( person ( or re ( property "

ANS: It is a personal property. In the first place, it can be transported from place to place1 in the second place, the change of location can take place without injury to immovable to which it may be attached1 and in the third place, it is not included in the enumeration of immovable in rt. 4"5 of the -66. 2owever, because of its importance in the world of commerce, it partakes of the nature of immovables when it comes to re,uirement of registration. (hus, if it is mortgaged under the 6hattel #ortgage =aw, the mortgage must be registered not only in the 6hattel #ortgage Register but also in the office of the 6ollector of 6ustoms at the port of entry.

and settlement by homestead and other similar acts as provided by law. &n the other hand, public lands and government lands are not only public lands, but also other lands already reserved for or devoted to pubic use or subject to private right. (herefore, the government owns lands which are known as public lands or public domain as well as lands which are not public lands or public domain.

2#. < n!s of the pub(i) !o- in re )( ssifie! into " ANS: ". gricultural1 $. +orest or timber1 8. #ineral lands, and 4. -ational parks.

21. The fo((owing things re property of pub(i) !o-inion " ANS: ". (hose intended for public use such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads and others of similar character. (hose which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth.

2&. P tri-oni ( property of the St te or of pro/in)es% )ities -uni)ip (ities "

n!

ANS: (hose properties of the State which are not intended for public use, or public service or for the development of national wealth, as well as those property of provinces, cities and municipalities which are not intended for public use are patrimonial.

2*. 5h t is -e nt by property of pri/ te ownership " ANS: Property or private ownership, besides that patrimonial property of the State, provinces, cities and municipalities, consists of all property belonging to private persons, either individually or collectively.

22. 5h t is -e nt by :pub(i) ( n!s;% :pub(i) !o- in; n! :go/ern-ent ( n!s;% n! how sh (( we !istinguish one fro- the other " ANS: Public lands and public domain are synonymous. (hey refer only to government lands which are opened to private appropriation

20. 6 y the Roponggi property in = p n be so(! "

ANS: -o, because the said property is a property of the State intended for public use or public service.

ANS: Cy hidden treasure is understood, for legal purpose, any hidden and unknown deposit of money, jewelry, or other precious objects, the lawful ownership of which does not appear.

21. 5h t is the Reg (i n Do)trine " ANS: It is a doctrine which reserves to the State the full ownership of all natural resources or natural wealth that may be found in the bounds of the earth.

It belongs to the owner of the land, building or other property on which it is found.

#7. A(bert foun! hi!!en tre sure insi!e the ( n! of Teren)e. ,ow wi(( the tre sure be !i/i!e! if A(bert is usufru)tu ry of the ( n!> (essee> f r-er> ( bourer hire! to (oo$ for it " ANS: If lberta is usufructuary, or lessee or farmer, she is entitled to F of the hidden treasure because they are considered as strangers to the land.

22. +f you re n owner of p r)e( of ( n!% wh t rights !o you h /e on the s -e " ANS: Bou are also the owner of the surface and everything under it. Bou can make constructions, works, plantations and e'cavations. Cut your right is not absolute because it is subject to certain restrictions or limitations like servitudes, special laws, ordinances, re,uirements of aerial navigation and the principles of human relations.

If she is the labourer intended or hired to look for it, she is entitled to her wage or salary only.

s regards, the mineral found in it, you are not the owner because ownership of minerals is reserved in favour of the State even if the land is a private land. In fact you have no right to e'tract the mineral without the permission of the State.

#1. Suppose A(bert in the pre)e!ing 3uestion h s n instru-ent to (oo$ for hi!!en tre sure% ) n she sti(( be )onsi!ere! fin!er by )h n)e " ANS: Bes, because the word /by chance0 means there should be purpose or intention to look for it.

24. 5h t is

hi!!en tre sure n! who owns the s -e " (he better rule however, is that /by chance0 means / good luck0, whether there was a deliberate search or not for the treasure, but no prior agreement as to how it is to be divided. &ne who

intentionally looks for it is embraced if he does not ask for permission, he is a trespasser.

ANS:

#2. Define ownership " ANS: It is an independent right of e'clusive enjoyment and control of a thing for the purpose of deriving therefrom all advantages re,uired by the reasonable needs of the owner and the promotion of the general welfare but subject to the restrictions imposed by law and the rights of others. ##. The tr !ition ( ttributes or e(e-ents of ownership or the rights of person o/er his property re " ANS: a. (he right to enjoy, which includesE Dus utendi, or the right to use1 Dus fruendi, or the right to enjoy the fruits1 and Dus abutendi, or the right to consume the thing by its use. b. (he right to dispose )jus disponendi*, or the right to alienate, encumber, transform, or even to destroy the property. c. (he right to vindicate )jus vindicandi*, or the right of action available to the owner to recover the property against the holder or possessor. #&. The $in!s of ownership re " ANS: a. full ownership this includes all the rights of the owner b. naked ownership ownership where the rights to the use and fruits are denied. c. sole ownership where ownership is vested in only one person. d. co!ownership where the ownership is vested in two or more owners.

It is not absolute because it has limitations which are imposed for the benefit of humanity and based on certain legal ma'imsE a. the welfare of the people is the supreme law of the land /salus populi suprema est le'01 b. use your property so as not to impair the rights of others /sic utere tuo ut alienum non laedas0.

#0. The (i-it tions upon the right of ownership " ANS: ". .eneral limitations imposed by the State for its benefit such as the power of eminent domain, the police power, and the power of ta'ation1 $. Specific limitations imposed by law, such as legal servitudes1 8. =imitations imposed by the party transmitting the property either by contract or by will1 4. =imitations imposed by the owner himself, such as voluntary servitudes, mortgages, pledges, and lease rights1 and 5. Inherent limitations arising from conflict with other rights, such as those caused by contiguity of property. %e might add to the above enumeration the constitutional prohibition regarding ac,uisition of private land by aliens and other constitutional limitations. #1. As )onse3uen)e of ownership% the rights of property re " ANS: ". $. 8. 4. person o/er his

#*. +s the right of ownership bso(ute "

(o enjoy the property1 (o dispose of the property1 (o recover the property from any holder or possessor1 (o e'clude any person from the enjoyment and disposal of the property1 5. (o enclose or fence his land or tenement1 9. (o just compensation in case of eminent domain1 :. (o construct any works, or make any plantation or e'cavation on the surface or subsurface of his land1

3. (o the ownership of all or a part of hidden treasures found in his property1 and ;. (o the ownership of all accessions to his property. #2. ?or)e in !efense of property 9ustifie! if the fo((owing re3uisites )on)ur " ANS: ". (he force must be employed by the owner or lawful possessor of the property1 $. (here must be an actual or threatened physical invasion or usurpation of the property.

8. 6ivil fruits are rents of buildings, the price of leases of lands and other property and the amount of perpetual or life annuities or other similar income. ) rt. 44$, -66* C.* ccession continua, or the right pertaining to the owner of a thing over everything which is incorporated or attached thereto, either naturally or artificially. ". %ith regard to immovable propertyE a. ccession industrial, or that which takes place in case ofE )i* Cuilding )ii* Planting, or )iii* Sowing ) rts. 445!455, -66* b. ccession natural, which may be in the form of either1 )i* lluvium, or the accretion which lands adjoining the banks of rivers, lakes, creeks or torrents gradually receive from the effects of the currents of the waters. ) rt. 45:, -66* )ii* vulsion or the accretion which takes place whenever the current of a river, lake, creek or torrent segregates from one estate on its bank a known portion of land and transfers it to another estate. ) rt. 45;, -66* )iii* 6hange of river beds, or that which takes place when a river bed is abandoned through the natural change in the course of the waters. ) rt. 49", -66* )iv* +ormation of islands either on the seas within the jurisdiction of the Philippines, on lakes, and on navigable or floatable rivers or non! navigable and non!floatable rivers. ) rt. 495, -66* $. %ith regard to movable propertyE a. djunction or conjunction, or that which takes place whenever movable things belonging to different owners are united in such a way that they cannot be

A''ESS+ON
#4. Define ))ession n! is it -o!e of )3uiring ownership "

ANS:It is the right pertaining to the owner of a thing over everything which is produced thereby, or which is incorporated or attached thereto, either naturally or artificially. +rom the very definition itself, it is clear that it is not a mode of ac,uiring ownership1 it is merely a conse,uence of the right of ownership. +urthermore, under rt. :"$ of the -66 which enumerates the different modes of ac,uiring ownership or other real rights, accession is not included. &7. The !ifferent $in!s of ))ession re " ANS: .* ccession discreta, or the right pertaining to the owner of a thing over everything which is produced thereby. ". -atural fruits, or 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 of labor.

separated without injury, thereby forming a single object. ) rt. 499, -66* b. 6ommi'tion or confusion, or that which takes place whenever there is a mi'ture of things solid or li,uid belonging to different owners, the mi'ture of solids being called commi'tion, while that of li,uids, confusion. ) rt. 4:$, -66* c. Specification or that which takes place whenever a person imparts a new form to materials belonging to another person. ) rt. 4:4, -66* &1. To who- !oes the offspring of ni- (s be(ong when the - (e n! fe- (e be(ong to !ifferent owners " ANS: pplying the principle of /partus se,uitur ventrem0, the offspring belongs to the owner of the female.

$. (hat this e'tension of the right of ownership is reali?ed, as a general rule, under the juridical principle that the accessory follows the principal ) ccessio cedit principali*1 8 (hat this incorporation of the accessory with the principal saving the e'ceptions provided by law is effected only when two things are so united that they cannot be separated without injuring or destroying the juridical nature of one of them1 and 4. (hat, as a general rule, punitive liability attaches to the party who acts in bad faith, but not to the party who acts in good faith. &#. +f A(ph bui(!s in goo! f ith re the rights of the p rties " house on the ( n! of .r /o% wh t

ANS: a. (he rights of the owner of the land areE ".* 2e can appropriate the house upon payment of indemnity. (he phrase /upon payment of indemnity0 means that lpha has the right to retain the house for as long as Cravo has not yet paid the indemnity1 or $.* 2e has the right to sell the land to the builder in good faith. 2e can compel the builder to buy the land, unless the value of the land is considerably more than the value of the building. If so, then the builder must rent or the remedy is a /forced leaseG. b. (he right of the builder is to ask for indemnity if the landowner opts to appropriate the house. (he reason for this is that the appropriation without compensation would amount to solutio indebiti. nyway, lpha is in good faith. &&. +n the i--e!i te(y pre)e!ing 3uestion% ) n .r /o fi(e suit for e9e)t-ent n! pr y for !e-o(ition upon $nowing th t A(ph bui(t her house on his ( n! " ANS: -o. 2e has yet to make a choice. If he has not yet done so, he cannot ask for the ejectment of lpha, but if he opted to sell

&1. +s the ru(e of ))ession !is)ret " th t to the owner of the thing be(ong the n tur (% in!ustri ( n! )i/i( fruits " bso(ute in )h r )ter " ANS: -o. It is subject to the following e'ceptionsE ". the thing is in possession of a possessor in good faith in which case such possessor is entitled to the fruits. $. If the thing is subject to a usufruct in which case the usufructuary is entitled to the fruits. 8. If the thing is leased in which case the lessee is entitled to the fruits of the thing, although such lessee must pay the owner rentals which are in the nature of civil fruits. 4. If the thing is in possession of an antichretic creditor in which case such creditor is entitled to the fruits with the obligation of applying them to the interest and principal. &2. The b si) prin)ip(es go/erning ))ession )ontinu re "

-SE ". (hat to the owner of a thing belong the e'tension or increase of such thing1

the land where the value of the same is not considerably more than the value of the house, and the builder does not pay the land then lpha can be ejected. If she cannot pay, she should not be allowed to continue using the land. &*. +f the ( n!owner )hooses to ppropri te the bui(!ing% ) n the bui(!er s$ the owner of the ( n! to se(( it inste ! " ANS: -o, because the option to appropriate the building or sell the land belongs to the landowner. (he only right of the builder in good faith is the right to reimbursement, not to compel the owner of the land to sell. (he option is not to buy but to sell. (he option is given to the landowner because his right is older1 and because of the principle of accession, he is entitled to the thing attached to his land. &0. 5h t then is the re-e!y (eft to the owner of the ( n! if the bui(!er f i(s to p yANS: %hile the -66 is silent on this point, guidance may be derived from the decision of the Supreme 6ourt, thusE )"* In #iranda vs. +udalan, ;: Phil. 3<", the Supreme 6ourt said that the parties may decide to leave the things as they are and assume the relation of lessor and lessee, and should they disagree as to the amount of rental, then they can got to the court to have the amount fi'ed. )$* Should the parties not agree to assume the relation of the lessor and lessee, another remedy is suggested in the Ignacio vs. 2ilario case wherein the Supreme 6ourt ruled that the owner of the land is entitled to have the improvement removed when after having chosen to sell his land, the builder in good faith fails to pay for the same. )8* further remedy is indicated in Cernardo vs. Cataclan case where the Supreme 6ourt approved the sale of the land and improvement in a public auction, applying the proceeds thereof first to the payment of the value of the land and the e'cess, if nay, to be delivered to the owner of the house in payment thereof. &1. 6 y (essee be bui(!er in goo! f ith "

ANS:In one case, it was held that lessees are not builders in good faith. (hey came into the possession of the lot by virtue of a contract of lease e'ecuted by petitionerGs mother in their favor. (hey are then estopped to deny their landlordGs title, or to assert a better title not only in themselves, but also in some third person while they remain in possession of the leased premises and until they surrender possession to the landlord. (his estoppel applies even though the lessor had no title at the time. (he relation of lessor and lessee was created and may be asserted not only by the original lessor, but also by those who succeed to his title. Ceing mere lessees, they knew that their occupation of the premises would continue only for the life of the lease. Plainly, they cannot be considered as possessors or builders in good faith. &2. 5h t re the rights% if ny% of bui(!er in b ! f ith "

ANS: s a rule, he has no right. Cut he is entitled to reimbursement for necessary e'penses for the preservation of the land, not the value of the building ) rt. 45$, -66*. (he reason for this rule is, after all, the owner would have borne the same e'penses of preservation of the land. &4. 5h t re the rights of the owner of the ( n! in ) se there is bui(!er in b ! f ith " ANS: ". (o appropriate the building without payment of indemnity plus damages. In this case, the builder is like a donor1 $. 2e can demand the demolition of the house plus damages1 8. 2e can compel the builder to buy the land even if the value is considerably more than the value of the building plus damages. ) rts. 45< and 45", -66* *7. 5h t re the rights n! ob(ig tions of the owner of the ( n! who uses the - teri (s of nother " ANS: a. If the landowner acted in good faith ". 2e becomes the owner of the materials but he must pay for their value. (he only e'ception is when they can be

removed without destruction to the work made or to the plants. In such case, the owner of the materials can move them. b. If the landowner is in bad faith $. 2e becomes the owner of the materials but he may pay their value and damages. (he only e'ception is when the owner of the materials decides to remove them whether or not destruction would be caused. In this case, the materials would still belong to the owner of said materials who in addition will still be entitled to damages. *1. 5h t re the rights n! ob(ig tions of the owner of the - teri (s " ANS: a.* If the landowner acted in good faith ". (he owner of the materials is entitled to reimbursement provided he does not remove them1 $. 2e is entitled to removal provided no substantial injury is caused1 b.* If the landowner acted in bad faith ". (he owner of the materials is entitled to absolute right of removal and damages whether or not substantial injury is caused1 $. 2e is entitled to reimbursement and damages in case he chooses not to remove. *2. +f you p( nt n! grow )rops on the f r- of your neighbor $nowing fu((y we(( th t the f r- is not yours% wh t re yours rights with referen)e to the )rops% if your neighbor is in goo! f ith " ANS: (here is a distinctionE "* If the crops have been already gathered, then you have to return the value of the crops or the crops themselves minus the e'penses essential for their production, gathering and preservation1 $* If not yet gathered, that is, the crops are still standing, you completely forfeit them in favor of the owner of the land without any right of indemnity e'cept of course for the necessary e'penses, not of the crops but of the land.

*#. Define ((u/iu- " ANS: lluvium may be defined as the accretion which the lands adjoining the banks of rivers, creeks, torrents or lakes gradually received from the effects of the current of the waters.

*&. The ru(e with reg r! to ((u/iu-8 ANS: (o the owners of the land adjoining the banks of rivers belongs the accretion which they gradually receive from the effects of the current of the waters. ) rt 45:, -66* (he owners of the estates adjoining ponds or lagoons do not ac,uire the land left dry by the natural decrease of the waters, or lose that inundated by them in e'traordinary floods. ) rt 453, -66* **. Define /u(sion " ANS: vulsion may be defined as the accretion which takes place whenever the current of a river, creek, torrent or lake segregates from an estate on its bank a known portion of the land and transfers it to another estate.

(he rule with regard to avulsion ANS: %henever the current of a river, creek or torrent segregates from an estate on its bank a known portion of land and transfer it to another estate, the owner of the land to which the segregated portion belonged retains the ownership of it, provided that he removes the same within $ years. (rees uprooted and carried away by the current of the waters belong to the owner of the land upon which they may be cast, if the owners do not claim them within 9 months. If such owners claim them, they shall pay the e'penses incurred in gathering them or putting them in a safe place.

*0. Ru(e on uproote! trees " >'ampleE Cecause of the force of the river current, some trees on the estate of were uprooted and cast on the estate of C, who owns the treesH ANS: should still be considered as the owner of the uprooted trees but if he does not claim them within si' months, C will become the owner. If makes the claim, he will have to shoulder the e'penses for gathering or putting them in a safe place. +ailure to make the claim within 9 months will bar any future action to recover the trees. *1. Ru(e if the trees h /e been tr nsp( nte! " ANS: In the e'ample given above, even if the trees have been transplanted by the owner of the land upon which they have been cast on his own land ownership still pertains to the person who lost the trees provided that the claim was made properly. Incidentally, the owner of the land upon which the trees have been cast does not have to wait for si' months before he can temporarily set them aside to make proper use of his own land. *2. Effe)t if )( i- is - !e but trees re not re-o/e! " If say within 4 months a claim is made but no steps are yet taken to recover the trees, may an action still be filed afterwards for recovery of the treesH ANS: It is submitted that the answer is B>S, provided the action is brought within the period set by law for prescription of movable )since uprooted* property. ) rt. ""4< 4 years for ordinary prescription*. (he si'!month period given in rt. 49< should be considered only as condition precedent1 in other words, has to make the claim within 9 months. (he recovery )as distinguished from the claim* can be made within the period for

prescription. If no claim is made within si' months, the ownership changes. *4. Arti)(e pp(ies to uproote! trees " If instead of being uprooted, the trees still remain attached to the land that has been carried away, it is rt. 45; that must govern. rticle 45;E /%henever the current of a river, creek or torrent segregates from an estate on its bank a known portion of the land and transfers it to another estate, the owner of the land to which segregated portion belonged retains the ownership of it provided that he removes the same within two years.0 07. 6ust owner of ( n! upon whi)h the uproote! trees h /e been ) st be gi/en )o-pens tion8 ANS: It depends. If he has incurred e'penses for preserving them as when he gathered them in a safe place for eventual return or when he transplants them only for preservation purposes, he is doubtless entitled to indemnification. If he has done nothing, he cannot demand indemnification unless he has suffered in any way and the real owner has benefited in that, for e'ample, they were not carried away by the current. )See rt. $$*

Arti)(e &01. River beds which are abandoned through the natural change in the course of the waters ipso facto belong to the owners whose lands are occupied by the new course in proportion to the area lost. 2owever, the owners of the lands adjoining the old bed shall have the right to ac,uire the same by paying the value thereof, which value shall not e'ceed the value of the area occupied by the new bed. 01. Distinguish between ((u/iu- n! /u(sion. ANS: (he $ may be distinguished from each other in the following waysE

". In alluvium, the accretion is gradual, whereas in avulsion, it is sudden and abrupt1 $. In alluvium, the accretion cannot be identified, whereas in avulsion, it can be identified1 8. In alluvium, there is merely an attachment, whereas in avulsion there is first detachment followed by attachment1 and 4. In alluvium, the accretion belongs to the owner of the land to which the attachment is made ipso jure, whereas in avulsion, the ownership is retained by the owner of the land from which it is detached, at least, for a certain period. 02. The ru(e with reg r! to )h nges in the )ourse of ri/ers. ANS: River beds which are abandoned through the natural change in the course of the waters ipso facto belong to the owners whose lands are occupied by the new course in proportion the area lost. 2owever, the owners of the lands adjoining the old bed shall have the right to ac,uire the same by paying the value thereof, which value shall not e'ceed the value of the area occupied by the new bed ) rt. 49", -66* ttention, however, must be called to the fact that the above provision has already been superseded by the following provision of the %ater 6ode of the Philippines )P.@. -o. "<9:*. rticle 53. %hen a river or stream suddenly changes its course to traverse private lands, the owners of the affected lands may not compel the government to restore the river to its former bed1 nor can they restrain the government from taking steps to revert the river or stream to its former course. (he owners of the lands thus affected are not entitled to any compensation for any damage sustained thereby. 2owever, the former owners of the new bed shall be the owners of the abandoned bed in proportion to the area lost by each.

therefore is secured from the #inister of Public %orks and works pertaining thereto are commenced within two years from the change in the course of the river or stream.0 Re,uisites that must be complied with in order that the owner of the land adjoining the bank of a river may become the owner of an accretion on the land. ANS: (hey are the followingE ". (he deposit must be gradual or imperceptible or impervious1 $. It must be cause by the current of a river1 8. (he current must be that of a river1 4. (he river must continue to e'ist1 and 5. (he increase must be comparatively little. ) rt. 45:, -66* NOTE: If the increase is through artificial means, the law does not apply. 0#. Suppose th t ri/er !ries up% who is the owner of the o(! be!8

ANS: (he old bed will be considered as property of public ownership 0&. 5h t is ))retion8 ANS: ccretion is the process whereby the soil is deposited while alluvium is the soil deposited. ccretion is broader scope that alluvium because strictly speaking, alluvium applies only to the soil deposited on river banks.

0*. Re sons why ((u/iu- is gr nte! to the rip ri n owner. ANS: a. to compensate him for the loss he may suffer due to erosion or destructive force of the water and danger from floods1

/(he owners of the affected lands may undertake to return the river or stream to its old bed at their own e'pense1 Provided, that a permit

b. to compensate him because the property is subject to encumbrances and legal easement1 c. the interest of agriculture re,uire that the soil be given to the person who is in the best position to cultivate the same1 d. since, it cannot be said with certainty from where the soil came, it is but just that it be given to him who can best utili?e the property. 00. +f the rip ri n owner h s ((u/i ( !eposit8 5hy8 tit(e to the ( n!% !oes th t )o/er the

ANS: It is a process by virtue of which two movables belonging to the different owners are united in such a way that they form a single object. (he kinds of adjunction areE a. b. c. d. e. 17. engraftment attachment weaving painting writing

ANS: -o, because there is specific technical description of the land. (here must first be an independent application for registration of the land. 01. 6 y the ((u/i ( !eposits be (ost by pres)ription in f /or of nother8 Re son. ANS: Bes, because it is not covered by a (orrens title. It can be lost by prescription after 8< years. 02. 5ho owns n b n!one! ri/er be!8 for-e! on ri/er8 ,ow bout n is( n!

+f two -o/ b(es be(onging to !ifferent owners re unite! in su)h w y th t they for- sing(e ob9e)t% to who- sh (( the ob9e)t be(ong8 ANS: ". %hen both owners had acted in good faithE If the two things which are united cannot be separated from each other without injury, the owner of the principal things ac,uires the accessory, indemnifying the owner of such accessory for its value. ) rt. 499, -66* If the two things can be separated without injury, their respective owners may demand their separation. ) rt. 49;, par.", -66* -evertheless, in case the thing united for the use, embellishment or perfection of the other is much more precious that the principal thing, the owner of the former may demand its separation, even though the thing to which is has been incorporated may suffer some injury. ) rt. 49;, par.$, -66* $. %hen the owner of the accessory had acted in bad faithE %henever the owner of the accessory thing had made the incorporation in bad faith, he shall lose the thing incorporated and shall have the obligation to indemnify

ANS: a. River beds which are abandoned through the natural change in the course of the waters ipso facto belong to the owners whose lands are occupied by the new course in proportion to the area lost. ) rt. 49", -66* b. If the river on which the land is formed is navigable, the island belongs to the State. ) rt. 494, -66* If the river is non!navigable, the island belongs to the riparian owner, nearer the island. If the said island is formed e'actly at the middle of the river, it shall be divided longitudinally in halves between the two riparian owners. ) rt. 495, -66* 04. 5h t is !9un)tion n! gi/e the $in!s of !9un)tion8

the owner of the principal thing for the damages he may have suffered. ) rt. 4:<, -66*. 8. %hen the owner of the principal had acted in bad faithE if the one who has acted in bad faith is the owner of the principal thing, the owner of the accessory thing have a right to choose between the former, paying him its value or that the thing belonging to him be separated, even though for this purpose it be necessary to destroy the principal thing1 and in both cases, furthermore, there shall be indemnity for damages. ) rt. 4:<, -66* 4. %hen both owners had acted in bad faithE If either one of the owners has made the incorporation with the knowledge and without the objection of the other, their respective rights shall be determined as though both acted in good faith. ) rt. 4:<, -66* 11. +n !9un)tion or )on9un)tion% wh t re the tests to be pp(ie! in or!er to !eter-ine the prin)ip (8 ANS: In general, there are 4 tests which may be applied. In their order of preference, they are as followsE ". (hat to which the other has been united as an ornament or for its use or perfection1 $. (he thing of greater value1 8. If they are of e,ual value, that of the greater volume1 4. If not one of these tests can be applied, then, the ,uestion will be resolved by taking into consideration all pertinent provisions applicable as well as their respective merits, utility and volume. ) rts. 49: and 493, -66.* In painting and sculpture, writings, printed matter, engraving and lithographs, the board, metal, stone, canvas, paper or parchment shall be deemed the accessory thing. ) rt. 493. par.$, -66* 12. 5h t is -i@ture n! st te its $in!8 1&.

ANS: #i'ture is combination or union of materials where the respective identities of the component elements are lost. (he kinds of mi'ture areE a. 6ommi'ion which is a mi'ture of solids1 b. 6onfusion which is a mi'ture of li,uids. 1#. St te the ru(es on -i@ture. ANS: (he rules in mi'ture may be stated this wayE a. If mi'ture is caused by one owner in good faith, or by will of both owners, or by chance, or by common agent, co! ownership results. b. If mi'ture is made by one owner in bad faith, then he loses his material in favor of another and he is liable for damages. 5h t is spe)ifi) tion8 ANS: Specification is the giving of a new form to anotherGs material through application of labor where labor becomes the principal. 1*. St te the ru(es in spe)ifi) tion. ANS: (he rules in specification can be stated in this mannerE ". If the worker is in good faithE a. he appropriates the new thing but he must indemnify the owner of the materials. If the material is more precious than the new thing, the owner of the material has the optionE

aa. ab.

to get the new thing but he has to pay for the work1 or demand indemnity for material

>'ampleE ring and a diamond. Cased on the test of intention, the ring is the principal and the diamond is the accessory. In the case of the ring, if the diamond is more valuable, the latter is the principal and the ring is the accessory. Inder the test of volume, that which is bigger is the principal1 that which is smaller is the accessory. Since the ring is bigger than the diamond, the ring is the principal and the diamond is the accessory. (he test of merits is a combination of utility and volume.

$. If the worker is in bad faith, the owner of the material has the optionE a. to appropriate the work without paying for the labor1 or b. to demand indemnity for the materials with damages. (he option to appropriate, however, does not apply if the value of the resultant work is more valuable for artistic or scientific reasons. 10. St te the !istin)tions -i@ture: ANS: ". -ong !9un)tion% spe)ifi) tion n!

AB+ET+NC O? T+T<E
12. 5hen - y n A)tion to 3uiet tit(e prosper8 ANS: %hen the following re,uisites are presentE ". >'istence of an instrument or record or claim or encumbrances or proceeding1 $. (he document appears to be valid or effective1 8. Cut the document is in truth and in fact1 invalid, ineffective, voidable or unenforceable1 and 4. (he document is prejudicial to the title. ) rt. 4:9, -66* 14. Din!s of A)tion referre! to: ANS: a. Remedial b. Preventive 27. ! ! action to remove the cloud or to ,uiet title. ) rt. 4:9, par. "* action to prevent a future cloud or doubt

djunction involves at least two things. #i'ture involves at least two things. Specification may involve only one thing but the form is changed. $. In adjunction and specification, accessory follows the principal. In mi'ture, co!ownership results. 8. In adjunction, the things joined retain their nature. In mi'ture, the things mi'ed or confused, retain or loss their respective nature. In specification, the new object retains or preserves the nature of the original object.

11.

5h t re the tests in !eter-ining whi)h of two things is the prin)ip ( n! the ))essory8 -SE (he tests areE )"* intention1 )$* value1 )8* volume and )4* merits. Inder the test of intention, the rule is, that to which a thing is attached is the principal1 and that to which is attached to the thing is the accessory.

Re sons for ((owing the A)tion: ANS: a. the prevention of litigation )eventual litigation*1 b. the protection of the true title and possession1

c. the promotion of right and justice. 21. N ture of the A)tion " (he result is not binding upon the whole world, therefore not /in rem0. It is /in rem0. It is really /in personam0 because it is enforceable only against the defeated party, or privies and that a suit to ,uiet title brought against one co!owner, is -&( res judicata with respect to the other co!owners who were not made parties thereto. In fact, an action for conveyance, which is really /in personam0, has, in at least one case, been considered by our Supreme 6ourt, as an action to ,uiet title. (echnically, it is /,uasi in rem0, which is an action 0in personam0 concerning real property. 22. Are person ( E-o/ b(eF properties referre! to in the )tion to 3uiet tit(e8 s the law is worded, -&, because the law says /real property or any interest therein0. Cut by analogy, the same principles should apply to personal property, particularly vessels, which although movable, partake of the nature of real property. 2#. Does the A)tion to Auiet Tit(e Pres)ribe8 ANS: It depends. a. If the plaintiff is in possession of the property, the action DOES NOT PRES'R+.E. ReasonE %hile the owner continues to be liable to an action, proceeding, or suit upon the adverse claim, he has a continuing right to be given aid by the court to ascertain and determine the nature of such claim and its effect on his title, or to assert any superior e,uity in his favor. 2e may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right. (hus, a buyer of land in ";8", who possesses it from that date may still compel the sellerGs successors!interest to e'ecute the proper deed of conveyance in ";54, so that the deed may be registered.

b. If the plaintiff is NOT in possession of the property, the action 6AY PRES'R+.E. #oreover, even if the action is brought within the period of limitations, it may be barred by <A',ES, where there is no e'cuse offered for the failure to assert the title sooner. If somebody else has possession, the period of prescription for the recovery of the land is either "< or 8< years, depending on ordinary or e'traordinary prescription. nd even if brought within the prescriptive period, the action may no longer prosper if there has been an unreasonable or unjustified delay in filing the suit. s a general rule, it is settle that an action to ,uiet title does not prescribe. (he plaintiff must either have legal or e,uitable title to or interest in the real property which is the subject matter of the action. &therwise, the action will not prosper. 2e need not be in possession of said property. ) rt. 4::, -66*. 2&. Non-ne)essity of Possession " (he plaintiff may be in possession or not in possession. (he differences in effect areE +f P( intiff is in possession a. period does not prescribe b. onl y right is to remove or prevent cloud a. +f P( intiff +s Out Possession

period prescribes b. aside from being given the right to remove or prevent cloud, he may also bring the ordinary actions of ejectment, publiciana or reinvindicatoria within the proper prescriptive periods.

RB+NOBS .B+<D+NCS AND TREES +N DANCER O? ?A<<+NC

rticle 435. If a building, wall, column, or any other construction is in danger of falling, the owner shall be obliged to demolish it or to e'ecute the necessary work in order to prevent it from falling. If the proprietor does not comply with this obligation, the administrative authorities may order the demolition of the structure at the e'pense of the owner, or take measures to insure public safety. Ru(e in ' se of .ui(!ing% et).% +n D nger of ? ((ing >'ampleE &n Gs estate is a wall facing the street. (he wall is in danger of falling. #ay the owner be compelled to demolish or repair itH Bes, and if he does not do so, the administrative authorities may either order its demolition at Gs e'pense or take measures to insure public safety. The 'o-p( in nt " (he complainant who brings the case must either have his property adjacent to the dangerous construction, or must have to pass by necessity in the immediate vicinity. If the construction falls, the owner would be liable for damages, as a general rule. rticle 438. %henever a large tree threatens to fall in such a way as to cause damage to the land or tenement of another or to travelers over a public or private road, the owner of the tree shall be obliged to fell and remove it1 and should he not do so, it shall be done at his e'pense by order of the administrative authorities.

(here is co!ownership whenever the ownership of an undivided thing or right belongs to different persons. 72. 5h t Co/erns 'o-ownership8 a. contracts b. special legal provisions c. provisions of the (itle on 6o!ownership In default of the "st, apply the $nd1 in the absence of the $ nd, apply the 8rd. ) rt. 434, -66* 7#. Sour)es of 'o-ownership E,ow +t ArisesF a. b. c. d. e. 7&. Cy law Cy contract Cy chance Cy &ccupation or occupancy Cy succession or will

'h r )teristi)s of 'o-ownership ". (here must be more than one subject or owner1 $. (here is one physical whole divided into ideal shares1 8. >ach ideal share is definite in amount, but is not physically segregated from the rest1 4. Regarding the physical whole, each co!owner must respect each other in the common use, enjoyment or preservation of the physical whole1 5. Regarding the ideal share, each co!owner holds almost absolute control over the same1 9. (he co!ownership does not have juridical personality :. co!owner is in a sense a trustee for other co!owners.

'7-O5NERS,+P
71. Define 'o-ownership8

7*.

Distin)tions between )o-ownership n! p rtnership". 6o!ownership has no legal personality1 while partnership has a legal or juridical personality1

$. 8. 4. 5. 9. :. 3. 70.

6o!ownership is created by contract or the other things1 while a partnership is created by contract only1 (he purpose of co!ownership is for collective enjoyment1 while partnership is for profit1 n agreement of a co!ownership e'ist for "< years is valid1 while in partnership, there is no term limit1 (here is no mutual representation in co!ownership1 while there is mutual representation in partnership1 6o!ownership is not dissolved by death or incapacity of a co! owner1 while partnership is dissolved by death or incapacity of a partner1 co!owner can dispose of his share without the consent of the others1 while in partnership, a partner cannot substitute another in his place without the consent of the others1 In co!ownership, profits must depend on proportionate share1 while in partnership, profits may be stipulated by the partners.

". 6ontractual co!ownership )an agreement not to divide for ten years allowed ) rt.4;4, -66* $. -on!contractual co!ownership )if the source is not a contract*. c. +rom the viewpoint of the rights of the co!ownersE ". (enancy in common )or ownership in common or just co! ownership as contemplated in rt. 434*. $. Doint tenancy )also called joint ownership*. 72. Rights of the )o-owners". +ull ownership of his part and share of fruits or benefits1 $. (he right to alienate, assign or mortgage his share1 8. (he right to substitute another in his enjoyment, e'cept when personal rights are involved ) rt. 4;8, -66* 4. (he right to e'empt himself from necessary e'penses or ta'es by renouncing part of his interest in the co!ownership ) rt. 433, -66*. 74. A)tions )o/ere! by the ter- :E9e)t-ent; whi)h is one of the rights of )o-owners re the fo((owing -a. b. c. d. e. f. forcible entry1 unlawful detainer1 accion publiciana1 accion reindivicatoria1 ,uieting of title1 replevin. )o-owner8 Are there e@)eptions8

Distin)tions between )on9ug ( p rtnership n! )o-ownership". 6onjugal partnership arises only because of a marriage contract1 while co!ownership arises by an ordinary contract1 $. (he parties in a conjugal partnership must be a male and a female1 while in co!ownership se' is immaterial1 8. In conjugal partnership, the owners are always two1 while in co! ownership, the co!owner may be more than two1 4. In conjugal partnership, the profits are divided e,ually, unless there is contrary stipulation in the marriage settlement1 while in co! ownership, profits are proportional to their respective shares1 5. @eath of either party in conjugal partnership dissolves it1 while death of one in co!ownership does not dissolve it.

17. 6 y pres)ription run g inst

71. Din!s of 'o-ownership a. +rom the viewpoint of subject matterE ". 6o!ownership of an undivided thing $. 6o!ownership of an undivided right b. +rom the viewpoint of source

ANS: -o, as a rule. Prescription does not run against co!owners and co!heirs as long as the co!ownership is e'pressly or impliedly recogni?ed. (he e'ception is repudiation, provided that the following re,uisites are presentE

". 2e must make known to the others that he is repudiating the co! ownership and claiming complete ownership of the entire property. $. >vidence of repudiation and knowledge of others is clear and convincing. 8. (here is open, continuous, peaceful, public and adverse possession for a period to time re,uired under the law. Note: #ere receiving of rents or profits, payment of ta'es, or construction of a fence or building would not be sufficient proof of e'clusive or adverse possession because anyone in the co!ownership may do it. @efinite repudiation is necessary. 11. ,ow !o you !eter-ine the sh re of the )o-owners to the benefits n! )h rges rising fro- the )o-ownership8 ANS : (he share of the co!owners in the benefits and charges arising from the co!ownership shall be proportional to their respective interests and any stipulation in a contract to the contrary shall be void. 6onse,uently, in order to determine the share of the co! owners in the benefits and charges, we must first determine their respective interests in the co!ownership. Inder the law, such interests are presumed e,ual, unless the contrary is proved. ) rt. 435, par.$, -66* 12. 5h t re the (i-it tions upon the right of thing owne! in )o--on8 ANS: )o-owner to use the

ornamentation of the property, particularly in the main and common walls, roof, stairs, etc. (his is uncommon in our country. NOTE: If the various units are in one plane as when one storey units all sets on the ground the co!ownership may be referred to as a /hori?ontal co!ownership0. combination of both perpendicular and horizontal co-ownership can result in a situation very similar to a condominium which may be in the form of a building consisting of several stories, each storey being by itself divided into different units, owned by different persons. -ote that each unit cannot be considered owned in common. Inder the 6ondominium =aw, a condominium corporation can be formed to take care of common property, like the common stairs, common halls, etc. )o-owner not

1&. +n )o-ownership% un!er wh t )ir)u-st n)es - y !e- n! p rtition8 ANS: (hey are the followingE

(he thing should be used onlyE )"* in accordance with the purpose for which it is intended1 )$* in such a way as not to injure the interest of the co!ownership1 )8* in such a way as not to prevent the other co!owners from using it according to their rights. ) rt. 439, -66*

".* %hen there is an agreement, but the period should not e'ceed ten years1 $.* %hen the testator prohibits it, but the period shall be limited to twenty years1 8.* %hen it is prohibited by law ) s in conjugal partnership or absolute community property e'cept in case of legal separation*1 4.* %hen partition renders the object unserviceable1 5.* %hen the legal nature of the property does not allow partition of the object, like a party wall. ) rts. 4;4 7 4;5, -66* 1*. ,ow )o-ownership is e@tinguishe!Gter-in te!8 )a* judicial partition )b* e'trajudicial partition )c* when by prescription, one co!owner has ac,uired the whole property by adverse possession as against all the others, and repudiating une,uivocally the co!ownership of the other )d* when a stranger ac,uires by prescription the thing owned in common

1#. Perpen!i)u( r 'o-ownership(his is not an ordinary case of ownership where all the floors and everything else belong to all co!owners. 2ere, we have a case of /perpendicular co!ownership0 where the different stories belong to different persons. (his is still co!ownership for there is some unity in the use or

)e* merger in one co!owner )f* loss or destruction )g* e'propriation )here the indemnity will be distributed accordingly*. 10. 6 y the )o-owners of property gree th t the )o-ownership sh (( be for n in!efinite perio!8 5hy8 ANS: -&. In one case, the Supreme 6ourt ruled that the duration of the juridical condition of co!ownership is not limitless. Inder rts. 4;4 and "<38 of -ew 6ivil 6ode, co!ownership of an estate should not e'ceed $< years. ny agreement to keep the thing or property undivided should be for ten year period only. If the parties stipulate a definite period of indivision which e'ceeds the ma'imum allowed by law, said stipulation is void only as to the period beyond such ma'imum period. (he 6ivil 6ode is silent as to the effect of the indivision of property for more than twenty years. (he Supreme 6ourt, however, said that it would be contrary to public policy to sanction co!ownership beyond the period set by law. &therwise, the $< year limitation would be rendered meaningless. 11. +s n e@isting -ortg ge b r to the p rtition of property8 5hy8

co!owner the owner of it all. (he redemption made by him does not put an end to the e'isting state of co!ownership. (he property remains to be in a condition of co!ownership. (he redemption of the property, however, entails a necessary e'pense. -ecessary e'penses may be incurred by one co!owner but this is subject to his right to collect reimbursement from the remaining co!owners. 14. Distinguish between the right of )o-owner to - $e rep irs for the preser/ tion of the property owne! in )o--on% to perfor)ts of !-inistr tion% n! to perfor- )ts of ownership or (ter tion. ANS: ". %ith regard to acts of preservationE Repairs for preservation may be made at the will of one of the co!owners, but he must, if practicable, first notify the owners of the necessity for such repairs. ) rt. 43;, -66* $. %ith regard to acts of administrationE cts of administration can be performed only with the concurrence of the majority of the co!owners. ) rt. 4;$, -66* 8. %ith regard to acts of alterationE cts of alterations can be performed only with the concurrence of the co!owners. ) rt. 4;", -66* 27. 5h t is -e nt by )ts of !-inistr tion n! )ts of (ter tion8 Distinguish one fro- the other. ANS: cts of administration are those which refer to the enjoyment, e'ploitation and alteration of the thing which do no affect its substance or form, while acts of alteration are those by virtue of which a co!owner, in opposition to the e'pressed or tacit agreement of all the co!owners, and in violation of their will, changes the thing from the state in which the others believe it should remain, or withdraws it from the use to which they believe it is intended.

ANS: -o, because the latter does not operate to e'tinguish the mortgage. mortgage is inseparable from the property. Inder rt. $"$9 of -66, a mortgage directly and immediately subjects the property upon which it is imposed, whoever, the possessor may be, to the fulfillment of the obligation for whose security it was constituted. +urthermore, rt. 4;4 of the -66, provides that no co!owner shall be obliged to remain in the co!ownership. >ach co!owner may demand at any time the partition of the thing owned in common, insofar as his share is concerned. 12. 5i(( re!e-ption by )o-owner of )o-owne! property% in its entirety% ter-in te or e@tinguish )o-ownership8 ANS:(he fact that a co!owner redeems a co!owned property in its entirety, shouldering the e'penses therefor, does not make said

6onse,uently, acts of administration are transitory in character, while acts of alteration are more permanent. (he former do not affect

the substance or form of the thing, while the latter relate to the substance or essence of the thing itself. nd in relation to the right of a co!owner, the former re,uire the consent or resolution of the majority of the co!owners, while the latter re,uire the consent of all. 2#. 21. 5ho h s the right of )o--on8 !-inistr tion of the property owne! in

Registry of Property and the duration thereof is only one year or less, it is an act of administration and therefore, merely re,uires the resolution of the majority of the co!owners. . 5h t is -e nt by )on!o-iniu-8 b. 5ho h s tit(e to the )on!o-iniu- pro9e)t8 ANS: a. ccording to the 6ondominium ct )R. . -o. 4:$9*, a condominium is an interest in real property consisting of a separate interest in a unit in a residential, industrial or commercial building and an undivided interest in common, directly or indirectly, in the land on which it is located and in other common areas of the building. condominium may include, in addition, a separate interest in other portions of such real property. b. %e must ,ualify our answer. %hen we speak of the condominium project, we refer to the entire parcel of real property divided or to be divided in condominiums, including all structures thereon. (hus, as far as the unit of the project which is being used by a condominium owner is concerned, such owner has title thereto, but as far as the common areas, including the land are concerned, all of the condominium owners have an undivided interest or title thereto. 2owever, title to such common areas, including the land, may be held by a corporation )hereinafter known as condominium corporation* in which the holder of separate interests shall automatically be members or shareholders, to the e'clusion of others, in proportion to the appurtenant interest of their respective units in the common areas.

ANS: (he management of the property owned in common lies, in the first place, in the co!owners themselves. In this, management, the majority of interest control, and their decisions are binding upon the minority. 2owever, the administration may be delegated by the co!owners to one or more persons, whether co!owners or not. In such case, the powers and duties of such administrators shall be governed by the rules on agency. Should there be no majority, or should the resolution of the majority be seriously prejudicial to those interested in the property owned in common, the court, at the instance of an interested party, may order the appointment of an administrator. 22. +s the (e se of the entire )o--unity property !-inistr tion or n )t of ownership or (ter tion8 n )t of

ANS: =ease of personal property is a mere act of administration and therefore, re,uires the resolution of the majority of the co! owners. 2owever, lease of real property may be an act of administration or an act of alteration depending upon the circumstances of each particular case. (husE )"* If the lease is recorded in the Registry of Property, whatever may be the duration thereof, it is an act of ownership and therefore, re,uires the unanimous consent of all the co!owners, since under the law, a special power of attorney is re,uired. )see rt. "94:, -66* )$* If the lease is not recorded in the Registry of Property, but the duration thereof is more than one year, it is also an act of ownership and, therefore, re,uires the unanimous consent of all the co!owners, since, again, under the law, a special power of attorney is re,uired. )see rt. "3:3, -o. 3, -66* )8* If the lease however, is not recorded in the

POSSESS+ON
Possession defined ! it is the holding of a thing or the enjoyment of a right. It is really a fact since it e'ists but from the moment it e'ists, certain conse,uences follows, thus making possession also a right.

/Right to possession0 is a right or incident of ownership while /Right of possession0 is an independent right of itself, independent of ownership. A : 5h t re the !egrees of possession8

5ho is in )tu ( possession of

rente! p r)e( of ( n!8

ANS E a. #ere holding or having without any right whatsoever like the possession itself. b. Possession with juridical title, but not that of an owner like that of a lessee, pledgee or depositary. (his is called juridical possession. c. Possession with just title, but not from the true owner. (his is called real possessory right. >'ample is when a person in goodfaith buys an automobile from another who delivers the same to the former and who merely pretended to be the owner. d. Possession with a title of dominium, that is, with a just title from the owner. (his is really ownership or possession that springs from ownership. Re3uisites or E(e-ents of possession: "* (here must be a holding or control of a thing or a right. $* (here must be a deliberate intention to possess )animus possidendi* 8* (he possession must be by virtue of oneGs own right. '( sses of possession: "* In oneGs own name or in that of another $* In the concept of owner or in the concept of holder 8* In good faith or in bad faith Ownership is !ifferent fro- possession. person may be declared the owner, but he may not be entitled to possession. (he possession in the concept of holder may in the hands of another, such as a lessee or tenant. rticle 5$4 Possession may be e'ercised in oneGs own name or in that of another.0

(he lessor, thru the tenant, is in actual possession of the land )in the concept of the owner* that is, if the lessor is not the owner1 if he is the owner, he is called the possessor!owner. (he tenant, by himself, is in actual possession in the concept of holder. Possession in notherHs n -e a. voluntary as when an agent possesses for the principal by virtue of an agreement. b. -ecessary as when a mother possesses for a child still in the maternal womb. c. Inauthori?ed no authority given to possess a thing. Suppose I visit a piece of land once in a while and I declare for ta'ation purposes the fact that the land belongs to me, this does not necessarily mean that I am in possession of the land, for those facts, by themselves, do not show possession. -ote however, that the holding of a possessory information is considered evidence of possession. )Cishop of -ueva Segovia vs. #un. of Cantay, $4 Phils. 84:* Specific e'amples of possession in the concept of holderE "* $* 8* 4* that of the tenant that of the usufructuary that of the depositary that of the bailee in commodatum

Arti)(e *20. /2e is deemed a possessor in good faith who is not aware that there e'ists in his title or mode of ac,uisition any flow which invalidates it. 2e is deemed a possessor in bad faith who possesses in any case contrary to the foregoing. #istake upon a doubtful or difficult ,uestion of law may be the basis of good faith.0

: +f person is w re of the !efe)ts of his pre!e)essorHs tit(e% shou(! he be )onsi!ere! in goo! f ith or b ! f ith8 lthough #anresa says he should be considered in good faith because after all the law speaks of his title, not that of the predecessor, still the fact remains that he is not allowed to get from a person who is not the owner. (herefore, we should consider him in bad faith unless of course he has valid reasons to believe that his own title is good.

ANS E

:Res Nu((ius; )abandoned or ownerless property* may be possessed but cannot be ac,uired because prescription presupposes prior ownership in another. 2owever, said /res nullius0 may be ac,uired by occupation.

A'AB+S+T+ON O? POSSESS+ON
,ow is possession )3uire!-EArti)(e *#1 )orre( te with Arti)(e ***F a* by material occupation of a thing or the e'ercise of a right ),uasi!possession*. (his includes constitutom possessorium or traditio brevi manu. b* by the subjection to our will )this includes tradition longa manu*! by mere agreement1 or by the delivery of keys!traditio simbolica* c* by constructive possession or proper acts and legal formalities 'onstituto- possessoriu-! e'ists when a person who possessed property as an owner, now possesses it in some other capacity, as that of a lease or depositary. Tr !itio bre/i - nu! )the opposite of constitutom possessorium* this e'ists when a person who possessed property not as an owner )like a lessee*, now possesses it as an owner. Essenti ( re3uire-ents for possession: "* the corpus )or the thing physically detained* $* the animus or intent to possess A)3uisition of possession fro- the /iewpoint of who possesses: "* personal $* through authori?ed person )agent or legal representative* 8* thru unauthori?ed person )but if only subse,uently ratified* Essenti ( re3uisites: "* for personal ac,uisition

Cad faith is personal. Dust because a person is in bad faith )knows of the defect or flaw of his title* does not necessarily mean that his successors in interest are also in bad faith. s a matter of fact, a child or heir may even be presumed in good faith, notwithstanding the fatherGs bad faith. Arti)(e *21. .ood faith is always presumed, and upon him who alleges bad faith on the part of a possessor rests the burden of proof. Possession ac,uired in good faith does not lose this character e'cept in the case and from the moment facts e'ist which shows that the possessor is not unaware that he possesses the thing improperly or wrongfully. It is presumed that possession continues to be enjoyed in the same character in which it was ac,uired, until the contrary is proved.

Arti)(e *22.

Arti)(e *24.

Arti)(e *#7. &nly things and rights which are susceptible of being appropriated may be the object of possession.0 (he following cannot be appropriated and hence cannot be possessedE a* b* c* d* property of public dominion res communes easements )if discontinuous or non!apparent* things specifically prohibited by law

a* intent to possess b* capacity to possess c* object must be capable of being possessed $* thru an authori?ed person a* intent to possess for the principal b* authorityJcapacity to possess for another c* principal has intent and capacity to possess 8* thru an unauthori?ed person )as in negotiorium gestio* a* intent to posses for another )the principal* b* capacity of /principal/ to possess c* ratification by /principal0 Arti)(e *##. (he possession of hereditary property is deemed transmitted to the heir without interruption and from the moment of the death of the decedent, in case the inheritance is accepted. &ne who validly renounces an inheritance is deemed never to have possessed the same. (ime of ac,uisition of possessionE a* if the heir accepts!from the moment of death since there is no interruption b* if the heir refuses )or is incapacitated to inherit*!he is deemed never to have possessed the same Some effects of ac,uisition of possession thru successionE If the father or decedent was in bad faith, it does not necessarily mean that the son was also in bad faith. (he son is presumed to be in good faith. 2owever, since the father was in bad faith, the conse,uences of the good faith of the son should be counted only from the date of the decedentGs death. minor may ac,uire the possession of a fountain pen donated to him, but in case of a court action, his parent or legal representative must intervene. ) rticle 585*

minor and other incapacitated persons may ac,uire property or rights by prescription, either personally or thru their parents, guardians or legal representatives. ) rticle ""<:*

#odes through which possession cannot be ac,uiredE "* thru force or intimidation $* thru mere tolerance )permission* 8* thru clandestine, secret possession (he /intruder0 does not ac,uire any right to possession )no legal possession* (he legal possessor, even if physically ousted, is still the possessor and thereforeE "* still entitled to the benefit of prescription $* still entitled to the fruits 8* still entitled as possessor for all purposes favorable to his possession .eneral Rule regarding possession as a +actE Possession as a fact cannot be recogni?ed at the same time in two different personalities. >'ceptionsE co!possessors since here, there is no conflict of interest, both of them acting as co!owners possession in different concepts or different degrees, e'ample, both owner and tenant are the possessors as a fact at the same time1 the first, in the concept of an owner1 the second, in the concept of holder ) rticle 583* RulesJ6riteria to be used in case of conflict or dispute regarding possessionE "* present possessor shall be preferred

$* if both are present, the longer in possession 8* if both began to possess at the same time, the one who presents a title 4* if both present a title, the 6ourt will determine. In the meantime, the thing shall be judicially deposited. Preferences of ownership )not possession* in case of double sale ) rticle "544* and in double donation ) rticle :44*E a* movable property!preference in ownership is given to the person who first possessed it in good faith b* immovable property!preference in ownership is givenE "* to the first who registered his right in good faith in the Registry of Property $* if there was no registration, to the person who first possessed in good faith 8* if there was no possession, to the person who presents the oldest title, provided that the title had been ac,uired in good faith In case of conflict between a sale and a mortgage!it is the unrecorded sale that is preferred for the reason that if the original owner had parted with his ownership of the thing sold, he no longer had the ownership and free disposal of that thing so as to be able to mortgage it. )#aria Cautista vda. de Reyes vs. de =eon =!$$88", Dune 9, ";9:* 6o!possessors of a parcel of land that is mortgaged must be made parties to foreclosure proceedings, otherwise they cannot be deprived of possession of that portion of land actually possessed by them. )6oncha vs. 2en. @ivinagracia, =!$:<4$, September 8<, ";3"* E??E'TS O? POSSESS+ON Arti)(e *#4. >very possessor has a right to be respected in his possession1 and should he be disturbed there he shall be protected in or restored to said possession by the means established by the laws and the Rules of 6ourt.

possessor deprived of his possession through forcible entry may within ten days from the filing of the complaint present a motion to secure from the competent court, in the action for forcible entry, a writ of preliminary mandatory injunction to restore him in his possession. (he court shall decide the motion within 8< days from the filing thereof.0 Arti)(e *&7. &nly the possession ac,uired and enjoyed in the concept of owner can serve as title for ac,uiring dominion.0 (he following cannot ac,uire ownership by prescription as long as they remain such!mere possessors in the concept of holderE lessees1 trustees1 antichretic creditors1 agents1 attorneys regarding their clientGs properties1 depositaries1 co!owners lthough payment of land ta'es is not evidence of ownership and although a mere ta' declaration or a ta' assessment does not by itself give the title, and is of little value in proving oneGs ownership, still the payment of the land ta' is one of the most persuasive and positive indicia, which shows the will of a person to possess in concepto de dueno or with claim of ownership. nd therefore, prescription may eventually be had, provided that the other re,uisites are present. Arti)(e *&1. possessor in the concept of owner has in his favor the legal presumption that he possesses with a just title and he cannot be obliged to show or prove it.0

@ifference with respect to /just title0 in possession and /just title0 on prescriptionE "* in possession, /just title0 here is presumed, while in prescription, /just title0 here must be proved1 $* in possession, /just title0 here means /titulo verdadero y valido0 )true and valid title sufficient to transfer ownership* while in prescription, /just title0 means /titulo colorado0 )merely colorable* title although there was a mode of transferring ownership, the grantor was not the owner

The $in!s of tit(es: "* true and valid title!here there was a mode of transferring ownership and the grantor was the owner $* colorable title!that title where, although there was a mode of transferring ownership, still something is wrong, because the grantor is not the owner 8* putative title!that title where although a person believes himself to be the owner, he nonetheless is not, because there was no mode of ac,uiring ownership Arti)(e *&2. (he possession of real property presumes that of the movables therein, so long as it is not shown or proved that they should be e'cluded. Arti)(e *&&. possessor in good faith is entitled to the fruits received before the possession is legally interrupted.

Rights of possessor Ein the )on)ept of ownerF ne)ess ry e@penses: a* if in good faith!entitled toE ". refund $. retain the premises till paid

s to the

b* if in bad faith!entitled only to a refund )no right of retention as penalty* ) rticle 549* Rights of possessor Ein the )on)ept of ownerF e@penses: s to the usefu(

-atural and industrial fruits are considered received from the time they are gathered or secured. 6ivil fruits are deemed to accrue daily and belong to the ges possessor in good faith in that proportion.0 Arti)(e *&*. If at the time the good faith ceases. (here should be any natural or industrial fruits, the possessor shall have a right to a part of the e'penses of cultivation, and to a part of the net harvest, both in proportion to the time of possession.

a* if in good faith!) rticle 549* ". right to reimbursement )of either the amount spent or increase in value! /plus value0!at ownerGs option $. right of retention till paid 8. right of removal )provided no substantial injury is caused to the principal, reducing its value!unless the owner e'ercises the option in paragraph " of rticle 54: b* if in bad faith!the possessor in bad faith is not entitled to any right regarding the useful e'penses Arti)(e *&1. If the useful improvements can be removed without damage to the principal thing, the possessor in good faith may remove them, unless the person who recovers the possession e'ercises the option under paragraph $ of rticle 549.0 )which is the option of refunding the amount of the e'penses or of paying the increase in value which the thing may have ac,uired by reason thereof.* Rights of possessor Ein the )on)ept of ownerF with referen)e to (u@urious or orn -ent ( e@penses: F if in goo! f ith-

(he charges shall be divided on the same basis by the two possessors. (he owner of the thing may, should he so desire, give the possessor in good faith the right to finish the cultivation and gathering of the growing fruits, as an indemnity for his part of the e'penses of cultivation and the net proceeds1 the possessor in good faith who for any reason whatever should refuse to accept this concession, shall lose the right to be indemnified in any other manner.0

In general, no right of refund or retention but can remove if no substantial injury is caused. 2owever, owner has the option to allowE "* possessor to remove $* or retain for himself )the owner* the ornament by refunding the amount spent ) rticle 543* bF if in b ! f ithIn general, no right of refund or retention but can remove if no substantial injury is caused. 2owever the owner has the option to allowE "* possessor to remove $* or retain for himself )the owner* the ornament by refunding the value it has at the time the owner enters into possession ) rticle 54;* Rights of the possessor Ein )on)ept of ownerF reg r!ing fruits: F. +f in Coo! ? ith : "* .athered or severed or harvested fruits are his own $* Pending or ungathered fruits pro!rating between possessor and owner of e'penses, net harvest and charges ) rt. 545* bF. +f in . ! ? ith: "* .athered fruits must return value of fruits already received as well as value of fruits which the owner or legitimate possessor could have received with due care or diligence minus necessary e'penses for cultivation, gathering and harvesting to prevent the owner from being unjustly enriched. $* Pending or ungathered fruits no rights at all, not even to e'penses for cultivation because by accession, all should belong to the owner, without indemnity. ) rt. 44;* Arti)(e **7 (he cost of litigation over the property shall be borne by every possessor.

Arti)(e **1

Improvements caused by nature or time shall always inure to the benefit of the person who has succeeded in recovering possession. possessor in good faith shall not be liable for the deterioration or loss of the thing possessed, e'cept in cases in which it is proved that he has acted with fraudulent intent or negligence, after the judicial summons. possessor in bad faith shall be liable for deterioration or loss in every case, even if caused by a fortuitous event.

Arti)(e **2

Arti)(e **#

&ne who recovers possession shall not be obliged to pay for improvements which have ceased to e'ist at the time he takes possession of the thing. present possessor who shows his possession at some previous time, is presumed to have held possession at also during the intermediate period, in the absence of proof to the contrary. possessor may loss his possessionE a* Cy the abandonment of the thing1 b* Cy an assignment made to another either by onerous or gratuitous title1 c* Cy the destruction or total loss of the thing, or because it goes out of commerce1 d* Cy the possession of another, subject to the provisions of rt 58:, if the new possession has lasted longer than one year. Cut the real right of possession is not lost till after the lapse of "<years.

Arti)(e **&

Arti)(e ***

Arti)(e **0

(he possession of movables is not deemed lost so long as they remain under the control of the possessor, even though for the time being he may not know their whereabouts.

Arti)(e **1

(he possession of immovables and of real rights is not deemed lost, or transferred for purposes of prescription to the prejudice of third persons, e'cept in accordance with the provisions of the #ortgage =aw and the =and Registration =aws. (he possession of movable property ac,uired in good faith is e,uivalent to a title. -evertheless, one who has lost any movable or has been unlawfully deprived thereof, may recover it from the person in possession of the same. If the possessor of a movable lost or of which the owner has been unlawfully deprived, has ac,uired it in good faith at a public sale, the owner cannot obtain its return without reimbursing the price paid therefor.

(he combination of the latter two is called /usufruct0 )from the term /usufructus0. (he remaining right )jus disponendi* is really the essence of what is termed /naked ownership0 Rights of )tion / i( b(e to usufru)tu ry Ethe person entit(e! to the usufru)tF: "* $* ction to protect the usufruct itself ction to protect the e'ercise of the usufruct

Arti)(e **4

Bsufru)t !istinguishe! fro- e se-ents Eser/itu!esF: "* In usufruct, the object may be real or personal property while in easement, only real property1 $* In usufruct, what can be enjoyed are all uses and fruits of the property while easement is limited to a particular use1 8* usufruct cannot be constituted on an easement, but it may be constituted on the land burdened by an easement while an easement may be constituted in favor of, or burdening, a piece of land held in usufruct1 4* Isually e'tinguished by death of usufructuary while easement is not e'tinguished by the death of the owner of the dominant estate. Si-i( rities between the two: a* Coth are real rights, whether registered or not1 b* Coth right may be registered1 c* Coth may ordinarily be alienated or transmitted in accordance with the formalities set by law. Arti)(e *0# Isufruct is constituted by law, by the will of private persons e'pressed in acts inter vivos, or in a last will and testament and by prescription. usufruct over real property being a real right, must be duly registered in order to bind innocent third parties. '( ssifi) tion of usufru)t " ))or!ing to 3u ntity or e@tent of fruits: a* s to fruits total or partial b* s to object universal or singular or particular

Arti)(e *07

%ild animals are possessed only while they are under oneGs control1 domesticated or tamed animals are considered domestic or tame, if they retain the habit of returning to the premises of the possessor. &ne who recovers, according to law, possession unjustly lost, shall be deemed for all purposes which may redound to his benefit, to have enjoyed it without interruption.

Arti)(e *01

BSB?RB'T
Arti)(e *02 Isufruct gives a right to enjoy the property of another with the obligation pf preserving its form and substance, unless the title constituting it or the law otherwise provides.

Ownership re ((y )onsist of # fun! -ent ( rights "* Dus disponendi )the right to dispose* $* Dus utendi )right to use* 8* Dus fruendi )right to the fruits*

'( ssifi) tion of usufru)t " s to the nu-ber of persons en9oying the right: "* Simple if only one usufructuary enjoys $* #ultiple if several usufructuaries enjoy "* Simultaneous at the same time $* Successive one after the other '( ssifi) tion of usufru)t " s to 3u (ity or $in! of ob9e)ts: i. Isufruct over rights ii. Isufruct over things "* -ormal usufruct this involves non!consumable things where the form and substance are preserved $* bnormal usufruct usufruct over consumable property like vinegar or money )this is also called ,uasi!usufruct* '( ssifi) tion s to ter-s or )on!itions: "* Pure usufruct no term or condition $* %ith a term or period >' die from a certain day In diem up to a certain day 8* %ith a condition )conditional* Ru(es go/erning usufru)t: a* +irst, the agreement of the parties or the title giving the usufruct b* Second, in case of deficiency, apply the 6ivil 6ode In case of conflict between the rights granted as usufructuary by virtue of a will, and codal provisions, the former, unless repugnant to the mandatory provisions of the 6ivil 6ode, should prevail. R+C,TS O? T,E BSB?RB'TBARY Arti)(e *00 /(he usufructuary shall be entitled to all the natural, industrial and civil fruits of the property in usufruct. %ith respect to hidden treasures which may be found on the land or tenement in any name, that is, with respect to hidden treasure which may be found on land or tenement, shall be considered a stranger.0

Arti)(e *01 -atural or industrial fruits growing at the time the usufruct begins, belong to the usufructuary. (hose growing at the time the usufruct terminates belong to the owner. (his article refers to pending natural or industrial fruits )as there can be no pending civil fruits, for they accrue daily* Ru(es s to fruits pen!ing t the beginning of usufru)t: ". Celong to the usufructuary1 $. -o necessity of refunding owner for e'penses incurred )for the owner gave the usufruct evidently without any thought to being reimbursed for the pending fruits*1 8. Cut without prejudice to the right of third persons )(hus, if the fruits had been planted by a possessor in good faith, the pending crops e'penses and charges shall be pro!rated between said possessor and the usufructuary* Ru(es s to fruits pen!ing t the ter-in tion of usufru)t: ". Celong to the owner1 $. Cut the owner must reimburse the usufructuary for ordinary cultivation e'penses and for the seeds and similar e'penses, from the proceeds of the fruit1 8. lso, rights of innocent third parties should not be prejudiced. Arti)(e *02 If the usufructuary has leased the lands or tenement given in usufruct, and the usufruct should e'pire before the termination of the lease, he or his heirs and successors shall receive only the proportionate share of the rent that must be paid by the lessees. Arti)(e *04 6ivil fruits are deemed to accrue daily and belong to the usufructuary in proportion to the time the usufruct may last. Arti)(e *11 (he usufructuary shall have the right to enjoy any increase which the thing in usufruct may ac,uire through accession,

the servitudes established in its favor and in general, all the benefit inherent therein. Arti)(e *12 (he usufructuary may personally enjoy the thing in usufruct, lease it to another, or alienate his right of usufruct, even by a gratuitous title1 but all the contracts he may enter into as such usufructuary shall terminate upon the e'piration of the usufruct, saving leases of rural lands, which shall be considered as subsisting during the agricultural year. Arti)(e *1# %henever the usufruct includes things which, without being consumed, gradually deteriorate through wear and tear, the usufructuary shall have the right to make use thereof in accordance with the purpose for which they are intended, and shall not be obliged to return them at the termination of the usufruct e'cept in their condition at that time1 but he shall be obliged to indemnify the owner for any deterioration they may have suffered by reason of his fraud or negligence. Arti)(e *1& %henever the usufruct includes things which cannot be used without being consumed, the usufructuary shall have the right to make use of them under the obligation of paying their appraised value at the termination of the usufruct, if they were appraised when delivered. In case they were not appraised, he shall have the right to return the same ,uantity and ,uality, or pay their current price at the time the usufruct ceases. )(his is a ,uasi!usufruct* Arti)(e *1* (he usufructuary of fruit!hearing trees and shrubs may make use of the dead trunks, and even of those cut!off or uprooted by accident, under the obligation to replace them with new plants. Arti)(e *10 If in conse,uence of a calamity or e'traordinary event, the trees or shrubs shall have disappeared in such a considerable number that it would not be possible or it would be too burdensome to replace them, the usufructuary may leave the dead, fallen or uprooted trunks at the disposal of

the owner, and demand that the latter remove them and clear the land. The ob(ig tions of usufru)tu ry in the en9oy-ent of usufru)t o/er woo!( n!: spe)i (

". #ust bear in mind that he is not the owner and therefore, in the e'ercise of the diligence in caring for the property, he must see to it that the woodland is preserved, either by development or by replanting, thus he cannot consume all, otherwise nothing would be left for the owner1 $. In the cutting or felling of trees, he must a. +ollow the ownerGs habit or practices b. In default thereof, follow the customs of the place c. If there be no customs, the only time the usufructuary can cut down trees will be for repair or improvement, but here the owner must first be informed. 8. 6annot alienate the trees unless he is permitted by the owner or unless he needs the money to do some repairs. )Arti)(e *11% N''* In a usufruct of an action to recover through the courts, the usufructuary can demand from the ownerE "* (he authority to bring the action )usually a special power of attorney*1 and $* Proof needed for a recovery. (he institution of the action may in the usufructaryGs name, for being the owner of the usufruct, he is properly deemed a proper party!in!interest. If the purpose is the recovery of the property or right, he is still re,uired to obtain the naked ownerGs authority. If the purpose is to object to or prevent disturbance over the property, no special authority from the naked owner is needed. )Arti)(e *12% N''* Arti)(e *27 (he usufructuary may set off the improvements he may have made on the property against any damage to the same.

Arti)(e *21 (he owner of the property the usufruct of which is held by another, may alienate it, but he cannot alter its form or substance, or do anything thereon which may be prejudicial to the usufructuary. co!owner may give the usufruct of his share to another even without the consent of the others, unless personal considerations are present. (he usufructuray in such a case takes the ownerGs place as to administration )management* and collection of fruits or interest. )Arti)(e *22% N''* If there be partition, the usufructuary continues to have the usufruct of the part allotted to the co!owner concerned and if the owners make a partition without the intervention of the usufructuary, this is all right and the partition binds the usufructuary. -ecessarily however, the naked owner must also respect the usufruct. )Arti)(e *22% N''*.

$. &r the naked owner may choose retention of the property as administrator1 8. &r the naked owner may demand receivership or administration of the real property, sale of movable, conversion or deposit of credit retirements or investments of cash or profits. bF +n the rights of the usufru)tu ry: ". (he usufructuary cannot possess the property till he gives the security $. 2e cannot administer the property, hence, he cannot e'ecute a lease thereon 8. 2e cannot collect credits that have matured, nor invest them unless the 6ourt or the naked owner consents 4. Cut he can alienate his right to the usufruct since failure to give the security did not e'tinguish the usufruct. (he /' u)ion =ur tori ;- is the promise under oath made by the usufructuary to take care of the property and return the same at the end of the usufruct. It take s the place of the bond and is based on necessity and humanity as when a poor family ac,uires by inheritance, of a badly needed house. fter the security is given by the usufructuary, he shall have the right to all the proceeds and benefits from the day on which he should have commenced to receive them )retroactive effect* )Arti)(e *42, N''* 2e )the usufructuary* shall take good care of the things given in usufruct as a good father of a family. EArti)(e *24% N''F A usufru)t is e@tinguishe!: EArti)(e 07#% N''F

O.<+CAT+ONS O? T,E BSB?RB'TBARY

(he usufructuary has obligations before, during and after the usufruct The usufru)tu ry% before entering upon the en9oy-ent of the property is ob(ige!: "* (o make an inventory of all the property, which shall contain an appraisal of the movables and a description of the condition of the immovables1 $* (o give security binding himself to fulfill the obligations imposed upon him. )Arti)(e *2#% N''* Effe)ts of f i(ure to gi/e se)urity Eun(ess e@e-pte!F " EArti)(e *20% N''F F +n the rights of the n $e! owner: ". 2e may deliver the property to the usufructuary but even if delivery is made, the naked owner may still later on demand the needed security1

a. by the death of the usufructuary, unless a contrary intention appears1 b. by the e'piration of the period for which it was constituted or by the fulfillment of any resolutory condition provived in the title creating the usufruct1 c. by the merger of the usufruct and ownership in the same person1 d. by renunciation of the usufruct1

e. by the total loss of the thing in usufruct1 f. by the termination of the right of the person constituting the usufruct1 g. by prescription Other ) uses re: a. nnulment1 b. Rescission1 c. mutual withdrawal1 d. legal causes ending legal usurfruct Rights n! Ob(ig tions t the en! of the usufru)t: EArti)(e 012% N''F A. on the p rt of the usufru)tu ry: ". must return he property to the naked owner1 $. the right to retain the property till he is reimbursed for the ta'es on the capital and indispensble e'traordinary repairs or e'penses1 8. to remove removable improvements or set them off against @amages he has caused EArti)(e *27% N''F. .. On the p rt of the n $e! owner: ". must cancel the security or mortgage provided the usufructuary has complied with all his obligations1 $. must in case of rural leases, respect leases made by the usufructuary till the end of the agricultural year1 8. make reimbursements to the usufructuary in proper cases.

benefit of another person belonging to a different owner )real or predial easement*. <e se !istinguishe! fro- E se-ent: ". =ease is a real right only when it is registered or when the )lease of the real property* e'ceeds one year1 while >asement is always a real right1 $. In =ease, there is rightful and limited use and possession without ownership1 while in >asement, there is rightful limited use but without ownership or possession1 8. =ease may involved real or personal property1 while easement refer only to immovable. Do-in nt Est te the immovable in favor of which the easement is established and that which is subject thereto is the servient estate. Person ( E se-ent !istinguishe! fro- Bsufru)t: ". personal easement cannot be alienated while usufruct can be alienated1 $. In personal easement, the use is specifically designated while in usufruct, the use has a broader scope and in general comprehends all the possible uses of the thing.

'h r )teristi)s of E se-ent: ". It is a real right, therefore an action I- R># is possible against the possessor of the servient estate1 $. Impossible only in anotherGs property1 8. It is a real right may be alienated although the naked ownership is maintained1 4. It is a limitation or encumbrance on the servient estate for anotherGs benefit1 5. (here is inseparability from the estate to which it belongs1 9. It is indivisible even if the tenement is divided1 :. It is intransmissible unless the tenement affected be also transmitted or alienated1

EASE6ENTS OR SERI+TBDES
E se-ent or Ser/itu!e " Is an encumbrance imposed upon an immovable for the benefit of a community or one or more persons )personal easements* or for the

3. It is perpetual as long as the dominant andJor the servient estate e'ists unless sooner e'tinguished by causes enumerated by law. (here is no easement on personal property only immovables may be burdened with easements. '( ssifi) tion of E se-ents: A. A))or!ing to p rty gi/en the benefit-

a.* llow something to be done on his property1 or b.* @o it himself. $. Neg ti/e E se-ent the owner of the servient estate is prohibited to do something which he could lawfully do were it not for the e'istence of the easement. >'ampleE >asement of light and view when the window or opening is on oneGs wall or estate. E. A))or!ing to the sour)e or origin:

". Real or predial for the benefit of another immovable belonging to a different owner. $. Personal for the benefit of one or more persons or of a community. >'ampleE easement or right of way for the passage of the community. .. A))or!ing to the - nner th t they re e@er)ise!: ". 6ontinuous their use is incessant without the intervention of any act of man1 e'ample easement of drainage. $. @iscontinuous they are used at intervals and depend upon the act of man. >'ampleE >asement of a right of way. >asement of =ight and Aiew is continuous. '. A))or!ing to whether or not their e@isten)e is in!i) te!: A ". pparent those made known and continually kept in enjoyment of the same. >'ample Right of way when there is an alley or path. $. -on!apparent they show no e'ternal indication of their e'istence. >'ampleE right of way when there is no visible path or alley. D. A))or!ing to the purpose of the e se-ent or the n ture of the (i-it tion: ". Positi/e E se-ent the owner of the servient estate is obliged toE

". Aoluntary $. #i'ed 8. =egal e'ampleE watersE right of way, party wall ,ow e se-ents re )3uire!: a.* If continuous or apparent ". by (itle $. by Prescription )"< years* b.* If discontinuous and apparent )only by (itle* c.* If continuous and non!apparent )only by (itle* d.* If discontinuous and non!apparent )only by (itle* : 6 y the e se-ent of right of w y be )3uire! by pres)ription8

ANS: -o, because it is discontinuous or intermittent. Since the dominant owner cannot be continually crossing the servient estate, but can do so only at intervals, the easement is of a discontinuous nature. The Rights of the Do-in nt Est te a. (o e'ercise the easement and all the necessary rights for its use including accessory easement. b. (o make on the servient estate all works necessary for the use and preservation of the servitude, but! ". this must be at his own e'pense

$. he must notify the servient owner 8. select convenient time and manner 4. he must not alter the easement nor render it more burdensome c.* (o ask for a mandatory injunction to prevent impairment or obstruction in the e'ercise of the easement as when the owner of the servient estaste obstructs the right of way by building a wall or fence. d.* (o renounce totally the easement if he desires e'emption from contribution to e'penses Ob(ig tion of the Do-in nt Est te a.* 2e cannot alter the easement b.* 2e cannot make it more burdensome ".* thus, he cannot use the easement e'cept for movable originally contemplated1 $.* In the easement of right of way, he cannot increase c.* If there be several dominant estate, each must contribute to necessary repairs and e'penses in proportion to the benefits received by each estate and not in proportion to the value of each estate. Rights of the Ser/ient Est te: a. (o retain ownership and possession of the portion of his land affected by the easement even if indemnity for the right is given unless the contrary has been stipulated1 b. (o make use of the easement, unless deprived by stipulation provided that the e'ercise of the easement is he not adversely affected and provided further that he contributes to the e'penses in proportion to benefits received, unless there is a contrary stipulation1 c. (o change the location of a very inconvenient substitute is made without injury to the dominant estate1

Ob(ig tions of the Ser/ient Est te: a.* 2e cannot impair the use of the easement1 b.* 2e must contribute to the e'penses in case he uses the easement, unless there is a contrary stipulation1 c.* In case of impairment, to restore conditions to the status ,uo at his e'pense plus damages1 d.* (o pay for the e'penses incurred for the change of location or form of the easement. E se-ents re e@tinguishe!: EArti)(e 0#1F ".* Cy merger of the same person of the ownership of the dominant and servient estates1 $.* Cy non!use for ten!years, with respect to discontinuous easements, this period shall be computed from the day on which they ceased to be used, with respect to continuous easements from the day on which an act contrary to the same took place1 8.* %hen either or both of the estates fall into such condition that the easement cannot be used, but it shall revive if the subse,uent easement condition of the estates or either of them should again permit its use, unless when the use becomes possible, sufficient time for prescription has elapsed1 4.* Cy the e'piration of the term or fulfillment of the condition, if the easement is temporarily or conditional1 5.* Cy the renunciation of the owner of the dominant estate1 9.* Cy the redemption agreed upon the owners of dominant and servient estates. <eg ( E se-ents they are easements imposed by the law, and which have for their object eitherE for public use or in the interest of private persons. ,ow <eg ( E se-ents for pri/ te interest re go/erne!:

a.*

greement of interested parties provided not prohibited by law nor prejudicial to third person1 b.* In default of , general or local laws and ordinances for the general welfare1 c.* In default of C, the 6ivil 6ode ' uses for e@tinguish-ent of the e se-ent of right of w y: a.* &pening of a new road1 b.* Doining the dominant estate to another ?or E se-ent of Right of 5 y for the p ss ge of (i/esto)$ is: a.* animal path :5 meters )width ma'imum* b.* animal trail 8: meters and 5< centimeters c.* cattle "< meters (he easement of a party wall is a compulsory kind of co!ownership where the shares of each owner cannot be separated physically. (he e'istence of an easement of an easement of a party wall is presumed, unless there is title, or e'terior sign, or proof of the contrary. ) rticle 95;* Arti)(e 002 (he period of prescription for the ac,uisition of an easement of light and view shall be counted !! a.* b.* from the time of the opening of the window, if it is through a party wall from the time of the formal prohibition upon the proprietor of the adjoining land or tenement, if the window is through a wall on the dominant estate.

b.* -egative ! If the window is thru oneGs own wall, that is, thru a wall of the dominant estate. (herefore, the time for the period of prescription should begin from the time of notarial prohibition upon the adjoining owner. Ru(es with respe)t to the p( nting of trees " EArti)(e 014% N''F Regarding distances, follow ordinances )if there be any*, then customs. If either ordinances, nor customs are present, the following distances must be observedE a.* (all trees two )$* meters from the boundary line to center of the tree. b.* Small trees or shrubs 5< centimeters from boundary line to the center of the tree or shrub (he remedy for violationE demand uprooting of the tree or shrub. Ru(es reg r!ing intrusions or e@tensions of br n)hes EArti)(e 027F n! roots

a.* Cranches the adjacent owner has the right to demand that they be cut off )insofar as they spread over his property* b.* Roots he may cut them off himself )because by accession or incorporation he has ac,uired ownership over them* Pres)ription: a. of the right to demand the cutting of the branches this does not prescribe if tolerated by invaded owner1 if demand is made, prescription runs from the date of said demand1 b. of the right to cut off the roots this is imprescriptible unless a notarial prohibition is made

5hen e se-ent of (ight n! /iew positi/e n! neg ti/e: a.* Positive ! if the window is thru a party wall. (herefore, the period of prescription commences from the time the window is opened1

(he owner of the trees even if the branches and roots have invaded the adjacent land can cut down the tree himself, for he owns the tree. Arti)(e 021 +ruits naturally falling upon adjacent land belong to the owner of said land Ru(es s to fruits: a. If the fruits still hang on to the trees, they are still owned by the tree owner1 b. It is only after they have naturally fallen )not taken by poles or shaken that they belong to the owner of the invaded land. Re son for the Ru(e It is based not on accession for they were not grown or produced by the land nor added to it )naturally or artificially* nor on occupation )for they are not res nullius*1 but to avoid disputes and arguments between the neighbors. (he mode of ac,uisition may be said to be the law. A : 5ho is ser/ient in n e se-ent g inst nuis n)e8

c* abatement, without prejudicial proceedings $. if the nuisance is a private nuisance, the remedies areE a* a civil action1 or b* abatement, without judicial proceedings

NB+SAN'E
Nuis n)e ! is an act, omission, establishment, business, condition of property, or anything else whichE a* b* c* d* injures or endangers the health or safety of others1 or annoys or offends the senses1 or shocks, defies or disregards decency or morality1 or obstructs or interferes with the free passage of any public highway or street, or any body of water1 or e* hinders or impairs the use of property (he word /nuisance0 is derived from =atin nocumentum or the +rench nuire )to harm or hurt or injure*. Nuis n)e s !istinguishe! fro- neg(igen)e n! fro- tresp ss: a* from negligence ! negligence is penali?ed because of lack of proper care1 but a nuisance is wrong, not because of the presence or absence of care, but because of the injury caused. b* from trespass ! in trespass, there is entry into anotherGs property1 this is not necessarily so in nuisance. In trespass, the injury is direct and immediate1 in nuisance, it is only conse,uential. '( ssifi) tion of nuis n)es:

ANS. : (he proprietor or possessor of the building or piece of land, who commits the nuisance thru noise, offensive odor, etc., is servient. In another sense, the building or the land itself is the servient estate, since the easement is inherent in every building or land. 5ho is !o-in nt in n e se-ent g inst nuis n)e8 (he general public, or anybody injured by the nuisance. 5h t re the rights of the !o-in nt est te8 ". if it is a public nuisance, the remedies areE a* a prosecution under the Revised Penal 6ode or any local ordinance1 or b* a civil action1 or

.F o(! )( ssifi) tion "* nuisance per se ! always a nuisance. >'E house of prostitution $* nuisance per accidens ! a nuisance only because of the location or other circumstances.

>'E noisy factory in a residential district bF new )( ssifi) tion "* according to relief whether given or not a. actionable b. non!actionable 2F ))or!ing to - nner of re(ief a. those abatable by criminal and civil actions b. those abatable only by civil actions c. those abatable judicially d. those abatable e'trajudicially #F ))or!ing to the 'i/i( 'o!e a. public ! affects a community or neighborhood or any considerable number of persons b. private ! that which is not public Arti)(e 042 ! =apse of time cannot legali?e any nuisance, whether public or private. (he action to abate a public or private nuisance is not e'tinguished by prescription.

Arti)(e 172 ! (he district health officer shall determine whether or not abatement, without judicial proceedings, is the best remedy against a public nuisance. In the 6ity of #anila, it is the 6ity >ngineer who is the official concerned regarding illegal construction. Arti)(e 17& ! ny private person may abate a public nuisance which is specially injurious to him by removing, or if necessary, by destroying the thing which constitutes the same, without committing a breach of the peace or doing unnecessary injury. Cut it is necessaryE that demand be first made upon the owner or possessor of the property to abate the nuisance1 that such demand has been rejected1 that the abatement be approved by the district health officer and e'ecuted with the assistance of the local police1 and that the value of the destruction does not e'ceed three thousand pesos.0

a* b* c* d* Arti)(e 171 !

Arti)(e 11&# !

private person or a public official e'trajudicially abating a nuisance shall be liable for damagesE a* if he causes unnecessary injury1 or b* if an alleged nuisance is later declared by the courts to be not a real nuisance.0

(he above articles 9;3 and ""48 do not apply to easements which are e'tinguished by prescription. The re-e!ies g inst pub(i) nuis n)e re:

PARTNERS,+P
Arti)(e 1101 ! Cy the contract of partnership, two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves. (wo or more persons may also form a partnership for the e'ercise of a profession.0

"* prosecution under the Penal 6ode or any local ordinance1 or $* a civil action1 or 8* abatement without judicial proceedings Arti)(e 171 ! If a civil action is brought by reason of the maintenance of a public nuisance, such action shall be commenced by the city or municipal mayor.

'h r )teristi)s of the )ontr )t: a. It is consensual, because it is perfected by mere consent. It is also bilateral or multilateral, because it is entered into between two or more persons1 nominate, because it is designated by a specific name1 principal, because its e'istence does not depend on the life of another contract1 onerous, because certain contributions have to be made1 and preparatory, in the sense that after it has been entered into, other contracts essential in the carrying of its purposes can be entered into1 b. (here must be a contribution of money, property or industry to a common fund1 c. (he object must be a lawful one1 d. (here must be an intention of dividing the profit among the partners since the firm is for the common benefit or interest of its partners. e. (here must be the /affectio societatis0 the desire to formulate an active union with people among whom there e'ists mutual confidence and trust )delectus personarum*. f. new personality that of the firm must arise, distinct from the separate personality of each of the members. ' p )ity to be)o-e p rtners: a* In general, a person capacitated to enter into contractual relation may become a partner1 b* minor cannot become a partner unless his parents or guardian consents. %ithout such consent, the partnership contract is voidable, unless other partners are in the same situation in which case the contract is unenforceable. c* married woman cannot contribute conjugal funds as her contribution to the partnership, unless she is permitted to do so by her husband or unless she is the administrator of the conjugal partnership, in which latter case, the court must give its consentJauthority1 d* partnership being a juridical person by itself can form another partnership, either with private individuals or with other partnerships, there being no prohibition on the matter1

e*

6orporation cannot become a partner on grounds of public policy1 otherwise, people other than its officers may be able to bind it. 2owever, a corporation can enter into a joint venture with another where the nature of that venture is in line with the business authori?ed in its charter.

Arti)(e 1102 !(he partnership has a juridical personality separate and distinct from that of each of the partners, even in case of failure to comply with the re,uirements of rticle "::$, first paragraph.0 KE Inder rticle "::$, /every contract of partnership having a capital of P8,<<<.<< or more in money or property, shall appear in a public instrument, which must be recorded in the office of the S>6.0 Suppose this re,uirement has not been complied with, is the partnership still a juridical person, assuming all other re,uirements are presentH

ANS : Bes, in view of the e'press provision of rt. ":93. Par. " of "::$, is not intended as a prere,uisite for its ac,uisition of juridical personality by the partnership, but merely as a condition for the issuance of license to engage in business or trade. 'onse3uen)es of the p rtnership being "* 9uri!i) ( entity:

Its juridical personality is separate and distinct from that of each of the partners. $* (he partnership can, in generalE a* ac,uire and possess property of all kinds1 b* incur obligations1 c* bring civil or criminal actions1 d* can be adjudged insolvent even if the individual members be each financially solvent. Inless he is personally sued, a partner has no right to make a separate appearance in court, if the partnership being sued is already represented. Arti)(e 1104 ! In determining whether a partnership e'ists, these rules

shall applyE a* >'cept as provided by rticle "3$5, persons who are not partners as to each other are not partners as to third persons1 b* 6o!ownership or co!possession does not itself establish a partnership, whether such co!owners or co!possessors do or do not share any profits made by the use of the property1 c* (he sharing of gross returns does not of itself establish a partnership, whether or not the persons sharing them have a joint common right or interest in any property from which the returns are derived1 d* (he receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business, but no such inference shall be drawn if such profit were received in paymentE a. as a debt by installments or otherwise1 b. as wage of an employee or rent to a landlord1 c. an an annuity to a widow or representative of a deceased partner1 d. as interest on a loan, though its amount of payment vary with the profits of the business1 e. as the consideration for the sale of a goodwill of a business or other property by installment or otherwise.0 Arti)(e 1117 ! partnership must have a lawful object or purpose, and must be established for the common benefit or interest of the partners. %hen an unlawful partnership is dissolved by a judicial decree, the profits shall be confiscated in favor of the State, without prejudice to the provisions of the Penal 6ode governing the confiscation of the instruments and effects of a crime. If a partnership has several purposes, one of which is unlawful1 the partnership can still validly e'ists so long as the illegal purpose can be separated from the legal purpose. +s 9u!i)i ( !e)ree nee!e! to !isso(/e n un( wfu( p rtnership8 ANS: -o, for the contract is void from the very beginning, and therefore, never e'isted from the viewpoint of the law. 2owever, there would be nothing wrong in having the court dissolve the partnership. (his will be good and convenient for everybody1 moreover, there maybe a ,uestion as to whether or not the partnership is indeed unlawful. (his is particularly true when the object was lawful at the beginning but has later on become unlawful. The )onse3uen)es of un( wfu( p rtnership: a* If the firm is also guilty of a crime, the Revised Penal 6ode governs both the criminal liability and the forfeiture of the proceeds of the crime and the instruments or tools with which it was committed. Such proceeds and the instruments or tools shall be confiscated and forfeited in favor of the government, unless they be the property of a third person not liable for the offense, but those articles which are not subject of lawful commerce shall be destroyed. ) rt. 45, RP6* b* (he partners forfeit the proceeds or profits, but not their contributions, provided no criminal prosecution has been instituted. If the contributions have already been made, they can be returned1 if the contributions have not been made, the partners cannot be made to make the contribution1 c* n unlawful partnership has no legal personality. Arti)(e 1111 ! partnership maybe constituted in any form, e'cept, where immovable property or real rights are contributed thereto, in which case a public instrument shall be necessary.

+or the validity of the contract among the partners as well as for enforceability, no form is re,uired, as a general rule, regardless of the value of the contributions. (herefore, the contract may even be oral. E@)eption: %henever real properties or real rights in real properties are contributed regardless of the value a public instrument is needed. (he contract itself must be in the

public instrument1 moreover, there must be an inventory of the immovables. (his inventory must be signed by the parties and attached to the public instrument. EArt. 111#% N''F (he inventory is important to show how much is due from each partner to complete his share in the common fund and how much is due to each of them in the event of li,uidation. %ithout such inventory, the contract is void. +or effectivity of the partnership contract insofar as innocent third persons are concerned, the same must be registered if real properties are involved. Arti)(e 1112 - >very contract of partnership having a capital of 8,<<< pesos or more, money or property, shall appear in a public instrument, which must be recorded in the office of the S>6. +ailure to comply with the re,uirements of the preceding paragraph shall not affect the liability of the partnership and the member thereof to third persons. (he purpose of the registration with the office of the S>6 is to set a condition for the issuance of licenses to engage in business or trade. Effe)t of non-registr tion: a* >ven if not registered, the partnership having a capital of 8,<<< or more is still a valid one, and therefore has legal personality. &f course, if real properties had been contributed, regardless of value, a public instrument is needed for the attainment of legal personality. If registration is needed or desired, any of the partners of a valid partnership can compel the others to e'ecute the needed public instrument and to subse,uently cause its registration. (his right cannot be availed of if the partnership is void.

Arti)(e 111# "

contract of partnership is void, whenever immovable property is contributed thereto, if an inventory of said property is not made, signed by the parties, and attached to the public instrument.

A gener ( p rtnership " is one where all the parties are general partners, that is, they are liable even with respect to their individual properties, after the assets of the partnership have been e'hausted. A (i-ite! p rtnership ! is one where at least one partner is a general partner and the others are limited partners. A (i-ite! p rtner ! is one whose liability is limited only up to the e'tent of his contribution. partnership where all the partners are /limited partnersG cannot e'ist as a limited partnership1 it will even be refused registration. If at all it continues, it will be a general partnership, and all the partners will be general partners. Persons who together ) nnot fora* b* c* uni/ers ( p rtnership:

husband and wife ! as a rule. ) rt. "88* those guilty of adultery or concubinage ) rt. :8;* those guilty of the same criminal offense, if the partnership was entered into in consideration of the same. ) rt. :8;*

A p rti)u( r p rtnership - has for its object determinate things, their use or fruits, or specific undertaking, or the e'ercise of a profession or vocation. )Art. 112#% N''* Ob(ig tions of a* b* c* p rtner:

b*

to give his contribution1 ) rt. ":39 7 ":33* not to convert firm money or property for his own use1 ) rt. ":33* not to engage in unfair competition with his own firmE ) rt. "3<3*

d*

to account for and hold as trustee, unauthori?ed personal profits1 ) rt."3<:* e* pay for damages caused by his fault1 ) rt. ":;4* f* duty to credit to the firm, payment made by a debtor who owes him and the firm1 ) rt. ":;$* g* to share with the other partners the share of the partnership credit, which he has received from an insolvent debtor. ) rt. ":48* Rights of p rtner:

Two $in!s of

p rtnership : t wi((; -

a* "st kind ! when there is no term, e'press or implied1 b* $nd kind ! when it is continued by the habitual managers ! although the period has ended, or the purpose has been accomplished. The essenti ( !ifferen)es between p rtnership n! )orpor tion:

a* property rights ! E rt. "3"<F ". rights in specific partnership property )SPP* $. interest in the partnership, that is, share in the profits and surplusE 8. right to participate in the management b* right to associate with another person in his share. ) rt."3<4* c* right to inspect and copy partnership books. ) rt. "3<5* d* right to demand a formal account. ) rt. "3<;* e* right to ask for the dissolution of the firm at the proper time. .enerally, a partnership begins, from the moment of the e'ecution of the contract. >'ceptionE ! when there is a contrary stipulation. .enerally, even if contribution have not yet been made, the firm already e'ists, for partnership is a consensual contract. partnership is unlimited as to its duration in the sense that no time limit is fi'ed by law. (he duration may be agreed upon e'pressly )as when there is a definite period* or impliedly )as when a particular enterprise is undertaken it being understood that the firm ends as soon as its purpose has been achieved.

F with reg r! to )re tion partnership is created by voluntary agreement of the partners %2>R> S a corporation is always created by some e'press legislative authority, either in the form of a special or of a general law. bF with reg r!s to (i bi(ity of -e-bersPartners are usually liable to partnership creditors not only to the e'tent of their capital contribution to the firm but even with their own private property, %2>R> S the stockholders of a corporation, after they have paid for their shares are not subject to any further liability unless otherwise provided by law. )F with reg r!s to effe)t of tr nsfer of interest Cecause of the rule of /delectus personarum0, the third person to whom a partner has transferred his interest in the partnership does not become a partner without the consent of all the other partners, %2>R> S the third person to whom a stockholder has transferred his share becomes automatically a stockholder even without the consent of the other stockholders1 !F with reg r!s to effe)t of !e th or b n$rupt)y of -e-bers (he death or bankruptcy of a partner usually covers the dissolution of the firm, %2>R> S the death or bankruptcy of a stockholder does not result in such dissolution1

eF with reg r!s to the effe)t of )ts of -e-ber s a general rule, the partners are the agent of the partnership, hence act of partners done or the account of the partnership is binding not only on the partnership but also on the members. &- (2> &(2>R 2 -@, whatever acts the stockholders might e'ecute for the account of the corporation, either individually or collectively, are not binding on the corporation. T,E D+??ERENT D+NDS O? PARTNERS F As to <i bi(ity ".* .eneral Partners those who can be held liable for partner! Ship obligation even to the e'tent of their private property $.* =imited Partners those who cannot be held liable for part! nership obligations bF As to 'ontribution ".* 6apitalist Partners those who contribute money or property (o the common fund $.* Industrial Partners those who contribute only their skill or Industry to the common fund )F As to 6 n ge-ent ".* #anaging Partners those who manage or administer Partnership affairs $.* Silent Partners those who have no voice in the manage! ment of partnership affairs !F As to Thir! Persons ".* &stensible Partners those publicly known as such $.* Secret Partners those whose connection to the partnership is not known. 8.* Partners by >stoppel those who represent themselves, or consent to another or others representing them to anyone as partners either in an e'isting partnership or the one that is fictitious or apparent. (hey are also known as / de facto0 partners.

eF As to Ob9e)t -".* universal $.* particular universal partnership profits comprises all that the partners may ac,uire by their industry or work during the e'istence of the partnership. 'AN A ,BS.AND AND 5+?E ENTER +NTO A 'ONTRA'T O? PARTNERS,+PH If a partnership is a universal partnership, they cannot enter into such contract,. (his is so because person prohibited from making donations to each other are prohibited from entering into universal partnership. 2owever, if the partnership is a particular partnership or a limited partnership, they can. ,O5 S,A<< T,E PRO?+TS AND <OSSES O? A PARTNERS,+P .E D+STR+.BTED8 ANS : 5e -ust !istinguish whether there is n gree-ent or none. ".* If there is an agreement the profits and losses shall be distributed in conformity with such agreement . If the agreement is only with respect to the profits the share for the partners in losses shall be in the same proportion as their share in the profits. If there is no agreement a.* Profits ! ". 6apitalist Partners their share shall be in proportion to what they may have contributed to the common fund $. Industrial Partner their share shall be that which is just and e,uitable under the circumstances b.* =osses

$.*

". 6apitalist Partners their share shall be in proportion to what they may have contributed to the common fund $. Industrial Partners! they shall not be liable or the losses 'AN AN +NDBSTR+A< PARTNER ENCACE +N A .BS+NESS OT,ER T,AN T,AT O? T,E PARTNERS,+P8 n industrial partner cannot engage in business for himself, unless the partnership e'pressly permits him to do so, and if he should do o, the capitalist partners may either e'clude him from the firm or avail themselves of the benefits which he may have obtained in violation of the provision, with right to damages in either case )Art. 1124% N''* 'AN A 'AP+TA<+ST PARTNER ENCACE +N A .BS+NESS OT,ER T,AN T,AT O? T,E PARTNERS,+P8 (he 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 stipulation to the contrary. ny capitalist partner violating this prohibition shall bring to the common fund any profit accruing to him from his transactions and shall personally bear all the losses.) rt. "3<3* 5,O S,A<< 6ANACE T,E PARTNERS,+P8 (he management of the partnership may be vested by agreement in one, or some, or all o the partners, or even in a third person, either in the articles of partnership or after the partnership had already been constituted, If there is no agreement, it is vested in all the partners EArt. 127#% N''* Prin)ip(e of :!e(e)tus person ru-; refers to the rule which is inherent in every partnership that no one can become a member of the partnership without the consent of all the partners. 6onse,uently, even if a partner will associate another person in his share in the partnership, the associate shall not be admitted into the partnership without the consent of all the partners, even if the partner having an associate should be a manager )Art. 127&% N''*.

If a partner assigns his whole interest in the partnership to a third person, such an assignment does not result in the latter becoming a substitute partner. 6 y p rtner fro- sub-p rtnership with to his interest in the p rtnership8 thir! person with respe)t

ANS: Bes, and even without the consent of the other partners. 5hen - y ff irs8 p rtner !e- n! for for- ( ))ounting of p rtnership

". If he is wrongfully e'cluded from the partnership business or possession of its property of its property by his co!partners1 $. If the right e'ists under the terms of any agreement1 8. If a partner has derived profits from any transaction connected with the formation, conduct or li,uidation of the partnership of from any use by him of its property, or1 4. %henever other circumstances under it just and reasonable. 5h t re the property rights of ssign b(e8 ANS: ". his rights in specific partnership property $. his interest in the partnership 8. his right to participate in the management &nly the second right is assignable but not the others. P rtnerHs +nterest It is his share of the profits and surplus. Effe)ts of )on/ey n)e by p rtnership " p rtnership of his who(e interest in the p rtner8 Are these rights

". it does not dissolve the partnership1 $. it does not entitle the assignee to interfere in the management of the business, or to re,uire an accounting of partnership transaction,

or to inspect the partnership books1 however, in case of fraud in the management of the partnership, he may avail himself of the usual remedies1 8. it entitles the assignee to receive in accordance with his contract the profits to which the assignor would otherwise be entitled1 and 4. upon dissolution of the partnership, the assignee is entitled to receive his assignorGs interest and may then demand for an accounting. :'h rging Or!er; upon a partnerGs interest in the partnership refers to the remedy available to a judgment creditor of a debtor partner to charge the interest of the latter in the partnership by means of a court order for the purpose of satisfying the amount of the judgment. (his changing order, however, is always subject to the preferred rights of partnership creditors. ' n the p rtners be he(! (i b(e for wh t is the n ture of their (i bi(ity8 p rtnership ob(ig tion8 +f so%

those who, not being members of the partnership, include their names in the firm name.) rt. "3"5* D+SSO<BT+ON is the change in the relation of the partners caused by any partner ceasing to be associated in the carrying on of the membersG business. 5+ND+NC BP - refers to the process of li,uidating partnership affairs TER6+NAT+ON " refers to that moment when partnership affairs are wound up 'ABSES ?OR T,E D+SSO<BT+ON O? A PARTNERS,+P " EART. 12#7F: ". %ithout violation of the agreement between the partnersE a. Cy the termination of the definite term or particular un! dertaking specified in the agreement1 b. Cy the e'press will of any partner, who must act in good faith when no definite term or particular undertaking is specified1 c. Cy the e'press will o all the partners who have not assigned their interest or suffered them to be charged for their separate debts either before or after the termination o any specified term or particular undertaking1 d. Cy the e'pulsion of any partner from the business bond file in accordance with such a power conferred by the agreement between the partners1 $. In contravention of the agreement between the partners where the circumstances do not permit a dissolution under any other provision o this article, by the e'press will of any partner at any time. 8. Cy any event which makes it unlawful for the business of the partnership to be carries on or for the members to carry it on in partnership 4. %hen a specific thing which a partner had promised to contribute to the partnership, perishes before the delivery, in any case by the loss of the thing, when the partner

ANS: Bes, in the case of partnership obligations arising from the contracts, all general partners, including industrial ones, shall be liable pro! rata with all their property and after all the partnership assets have been e'haustedE in other words, the liability o the partners is joint an subsidiary. In the case of a partnership obligation arising from a criminal offense, or a ,uasi!delict, all partners are liable solidarily with the partnership. In the case of a partnership obligation under the %orkmenGs 6ompensation ct all partners are also liable solidarily with the partnership. )=iwanag 6ase* A PARTNER .Y ESTOPPE< refers to a person who represents him! self or consents to another or others representing him to anyone as a partner either in an e'isting partnership or in one that is fictitious or apparent ) rt. "3$5, -66* (he only instance when an e'isting partnership is bound by the representation made by or in behalf o a partner by estoppel is when all the partners had given their consent to such representation. It will be only then that a partnership obligation shall result. In such a case, any third person who, relying on such representations, gave credit to the partnership, can hold the partnership as well as all the of the partners, including the partner by estoppel, liable in accordance with rt."3<5. good e'ample would be

5. 9. :. 3.

who contributed it having reserved the ownership thereof, has only transferred to the partnership the use or enjoyment of the same, but the partnership shall not be dissolved by the loss of the thing when it occurs after the partnership has ac,uired ownership thereof1 Cy the death of any partner1 Cy the insolvency of any partner or of the partnership1 Cy the civil interdiction o any partner1 Cy the decree of court.

T,E 'ASE 6AY .E% TO A'T OR T,E PARNERS,+P. T,+S RB<E +S SB.=E'T TO T,E ?O<<O5+NCEJ'EPT+ONS: cts necessary to wind up partnership affairs1 cts necessary to complete transactions begun but not when finished cts or transactions which would bind the partnership I dissolution had not taken place, provided the other party to such transactionsE had e'tended credit to the partnership prior to dissolution and had no knowledge or notice of such dissolution1 lthough he had not so e'tended credit , had nevertheless known o the partnership prior to dissolution and having no knowledge or notice o dissolution, the act of dissolution had not been advertised in a newspaper o general circulation in the place of which the business was regularly carried on .

ON T,E APP<+'AT+ON O? A PARTNER% T,E 'OBRT S,A<< DE'REE A D+SO<BT+ON 5,ENEIER: ".* $.* 8.* 4.* partner has been declared insane in any judicial proceedings or is shown to be o unsound mind1 partner becomes in any other way incapable of the partnership contract1 partner has been guilty of such conduct as tends to affect prejudicially the carrying on of the business1 partner willfully or persistently commits breach of the partnership agreement , or otherwise so conduct himself in matters relating to the partnershipGs business that I not reasonably practicable to carry on the business in partnership with him1 (he business o the partnership can only be carried on at a =oss.

5,O ,AS T,E R+C,T OR DBTY TO 5+ND BP OR <+AB+DATE PARTNERS,+P A??A+RS8 ". If the winding up or li,uidation of the affairs is judicial, the right or duty to wind up or li,uidate partnership affairs devolves upon the partner or legal representative or assignee designated by the court. If it is e'trajudicial, the right or duty devolves upon the managing partner. Cut where there is no managing or even where there is, he dies, then the right or duty evolves upon the partner who have not wrongfully dissolved the partnership or its legal representative o the last surviving partner, not insolvent. ) rt. "389* D+ST+N'T+ON .ET5EEN A CENERA< PARTNERS,+P AND A <+6+TED PARTNERS,+P: ".* s to compositionE general partnership is composed only of general partners, %2>R> S, a limited partnership is composed of at least one general partner and one limited partner

5.*

ON T,E APP<+'AT+ON O? T,E PBR',ASER O? A PARTNERHS +NTEREST: ".* $.* t the termination of the specific term or particular undertaking1 t any time if the partnership was a partnership at will when the interest was assigned or when the charging order was issued ) rt. "38"*

T,E D+SSO<BT+ON O? T,E PARTNERS,+P% TER6+NATES A<< ABT,OR+TY O T,E 6ANAC+NC PARTNER OR O? ANY PARTNER% AS

$.*

8.*

4.* 5.*

s to constitutionE general partnership as a general rule, maybe constituted in any form whereas a limited partnership must be stated in a certificate of limited partnership, duly signed and sworn by all the partners and recorded in the office o the S>61 s to firm nameE /.P0 must operate under a firm name which may or may not include the name of one or more partners, whereas a /=P0 must also operate under a firm name, followed by the word /=imited01 s to must also operate under a firm name, followed by the word /=imited01 s to dissolution and winding upE there are also differences, formal and procedural between the dissolution and winding up of a .P or =P.

(he interest of a limited partner is assignable. A SB.ST+TBTED <+6+TED PARTNER ! is a person admitted to all the rights of a limited partner who has died or has assigned his interest in partnership. n ssignee of the interest of a limited partner shall have the right to become a substituted limited partner if all the members consent thereto or if the assignor, being thereunto empowered by the certificate of limited partnership gives the assignee that right. 2owever, he becomes a substituted limited partner only from the moment that the certificate is appropriately amended. (he substituted limited partner has all the rights and powers, and is subject to all the restrictions and liabilities of his assignor, e'cept those liabilities of which he was ignorant at the time he become a limited partner an which could not be ascertained from the certificate. K5,AT +S T,E ORDER O? PAY6ENT +N T,E 5+ND+NC BP O? PARTNERS,+P <+A.+<+T+ES: If it is a general partnership, the order of payment is as followsE a. b. c. d. those owing to creditors other than partners1 those owing to partners other than for capital and profits1 this owing to partners in respect of capital those owing to partners in respect of profit) rt."38;*

D+ST+NCB+S, A CENERA< PARTNER AND <+6+TED PARTNER: "* $* 8* 4* 5* general partner can be held personally liable for partnership obligation after all of the assets of the partnership have been e'hausted, whereas a limited partner cannot be held liable1 general partner may participate in the management o the partnership, whereas a limited partner does not1 general partner may contribute money, property or industry to a common fund, whereas a limited partner, as such can only contribute money or other property only1 (he name o a general partner may appear in the firm name, whereas, that of a limited partner does not1 (here is limitation on the right of a general partner to engage in another business or in the same kind of business as that in which the partnership is engaged, whereas there is no such limitation in the case of a limited partner.

If the partnership is a limited partnership the order of payment is as followsE "* those to creditors in the order of priority as provided by law e'cept those to limited partners on account of their contributions, and to the general partners $* those limited to partners in respect to their share of the

'AN A <+6+TED PARTNER .E ,E<D <+A.<E ?OR PARTNERS,+P O.<+CAT+ONS8 " ANS : limited partner as such cannot be held liable for partnership obligations. 2owever, if his surname appears in the partnership or firm name or if he participates in the management or control of the business, then he is liable as a general partner.

8* 4* 5* 9*

profits and other compensation by way of income on their contribution1 those to limited partners in respect to the capital of their contributions1 those to general partners other than for capital and profits those to general partners in respect to profits1 those to general partners in respect to capital

for the account of the partnership credit, the amount shall be fully applied to the latter. ART. 114# " partner who has received, in whole or in part, his share of a partnership credit, when the other partners have not collected theirs, shall be obliged if the debtor should thereafter become insolvent, to bring to the partnership capital what he received even though he may have given receipt or his own share only. ART. 114& " >very partner is responsible to the partnership for damages suffered by it through his fault, and he cannot compensate them with the profits and benefits which he may have earned for the partnership by his industry. 2owever, the courts may e,uitably lessen his responsibility if through the partnerGs e'traordinary efforts in other activities of the partnership, unusual profits have been reali?ed. ART. 1142 " If the partners have agreed to entrust to a third person the designation of the share of each one in the profits an losses, such designation may impugned only when it is manifestly ine,uitable. In no case may a partner who has begun to e'ecute the decision of the third person, or who has not impugned the same within a period o three )8* months from the time he had knowledge thereof, complain of such decision. (he designation of losses and profits cannot be entrusted to one of the partners. (he general rule is that a stipulation e'cluding one or more partners from any share in the profits or losses is void. ReasonE the partnership is for common benefit. &ne e'ception is in the case of the industrial partner whom the law itself e'cludes from losses. If the law does this, a stipulation e'empting the industrial partner from losses is naturally valid.

ART. 1121 " %hen the capital or part thereof which a partner is about to contribute consist of goods, their appraisal must be made in the manner prescribed in the contract of partnership, and in the absence of stipulation, it shall be made by e'perts chosen by the partners, and according to current prices, the subse,uent changes thereof for the account of the partnership. ART. 1122 " partner who has undertaken to contribute a sum of money and fails to do so becomes a debtor for the interest and damages from the time he should have complied with his obligation. (he same rule applies to any amount he may have taken from the partnership coffers, an his liability shall begin from the time he converted the amount to his own use ART. 1141 " If there is no agreement to the contrary, in case of imminent loss of the business of the partnership, any partner who refuses to contribute an additional share to the capital, e'cept on industrial partners, to save the venture, shall be obliged to sell his interest to the other partners. ART. 1142 If a partner authori?ed to manage collects a demandable sum, which was owed to him in his own name, from a person who owed the partnership another sum also demandable, the sum thus collected shall be applied to the credits in proportion to their amount, even though he may have given a receipt for his own credit only, but should he have given it

ART. 1277 (he partner who has been appointed manager in the rticles of partnership may e'ecute all acts of administration despite the opposition of his partners, unless he should act in bad faith1 and his power is irrevocable without just or lawful cause. (he vote of the partners representing the controlling interest shall be necessary for such revocation of power. power granted after the partnership has been constituted maybe revoked at anytime0.

Cut if the refusal or consent by the other partners is manifestly prejudicial to the interest of the partnership, the courtGs intervention may be sought. ART.127* ! (he partnership books shall be kept, subject to an agreement between the partners, at the principal place of business of the partnership and every partner shall at any reasonable hour have access to and may inspect and copy any of them. >very partner must account to the partnership for any benefit, and hold as trustee for it any profit derived by him without the consent of the other partners from any transaction connected with the formation, conduct, or li,uidation of the partnership or from any use by him of its property. partner is a co!owner with his partners of specific partnership property. )SPP*

ART.1271 ART.1271 ! If two or more partners have been entrusted with the management of the partnership without specification of their respective duties, or without a stipulation that one of them shall not act without the consent of all the others, each one may separately e'ecute all acts of administration, but if any 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 decided by the partners owning the controlling interest ART. 1272 - In case it should have been stipulated that none of the managing partners shall act without the consent of the others, the concurrence of all shall be necessary for the validity of the acts, and the absence or disability of any one of them cannot be alleged, unless there is imminent danger or grave or irreparable injury to the partnership0. ART. 127# - %hen the manner of management has not been agreed upon, the following rules shall be observed1 "* ll the partners shall be considered agents and whatever anyone of them may do alone shall bind the partnership, without prejudice to the provisions of R(. "3<".

ART.1211 !

T,E +N'+DEN'E O? T,+ 'O-O5NERS,+P ARE T,E ?O<<O5+NC: a* partner subject to any agreement between the partners, has an e,ual right with his partners to possess specific partnership property for partnership purposes but he has no right to possess such property for any purposes without the consent of his partners1 b* partnerGs right in specific partnership property is not assignable e'cept in connection with the assignment of rights of all the partners in the same property1 c* partnerGs right in specific partnership property is not subject to attachment or e'ecution, e'cept on a claim against the partnership1 d* partnerG right in specific partnership property is not subject to legal support under rticle $;" ART. 1220 person admitted as a partner into an e'isting partnership is liable for all the obligations of the partnership

$* -one of the partners may ,without the consent of the others, make any important alteration in the immovable property of the partnership, even if it may be useful to the partnership.

arising before his admission as though he had been a partner when such obligation were incurred, e'cept that this liability shall be satisfied only out of partnership property, unless there is a stipulation to the contrary. ART. 1221 - (he creditors for the partnership shall be preferred to those of each partner as regards the partnership property. %ithout prejudice to this right, the private creditors of each Partner may ask the attachment and public sale of the share Lof the latter in the partnership assets. ART. 120& - (he certificate shall be cancelled when the partnership dissolved or all limited partners cease to be such. certificate shall be amended whenE ". there is a change in the name of the partnership or in the or character of the contribution of any limited partner1 $. a person is substituted as a limited partner1 8. an additional limited partner is admitted1 4. a person is admitted as a general partner1 5. a general partner retires, dies, becomes insolvent or insane, or is sentenced to civil interdiction and the business is continued under rticle "39<1 9. there is change in the character of the business of the partnership1 :. there is a false or erroneous statement in the certificate1 3. a person is substituted as a limited partner1 ;. there is a change in the time as stated in the certificate for the dissolution of the partnership of for the return of a contribution1 "<. a time is fi'ed for the dissolution of the partnership or the return of a contribution, no time having been specified in the certificate, or "". the members desire to make a change in any other statement in the certificate in order that it shall accurately represent the agreement among them. Lis

Arti)(e 1200

contribution, unless he is general partner, is not a proper party to proceeding by or against a partnership, e'cept where the object is to enforce a limited partnerGs right against or liability of the partnership.

Arti)(e 12&0 (he surname of a limited partner shall not appear in the partnership name unlessE ". $. it is also the surname of a general partner1 or prior to the time when the limited partner become such, the business had been carried on under a name in which his surname appeared.

SA<E
'ontr )t of S (e " &ne of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing and the other to pay therefore a price certain in money or its e,uivalent. E Art.1&*2* Essenti ( Re3uire-entsE "* 6onsent of the parties by virtue of which the vendor obligates himself to transfer the ownership of and to deliver a determinate thing, and the vendee obligates himself to pay therefore a price certain in money or its e,uivalent1 $* &bject certain which is subject matter of the contract1 8* (he 6ause of the obligation, the cause as far as the vendor is concerned is the ac,uisition of the price certain in money or its e,uivalent while the cause as far as the vendee is concerned is the ac,uisition of the thing which is the object of the contract. 'h r )teristi)s: 6onsensual, bilateral, commutative, and nominate. and reciprocal1 principal1 onerous,

'ontr )t of S (e !istinguishe! fro- 'ontr )t to Se((

". In the first, title passes to the vendee upon delivery of the thing sold, whereas, in the second, by agreement, ownership is reserved in the vendor and is not to pass until full payment of the price1 $. In the first, non!payment is a negative resolutory condition, whereas in the second, full payment is a positive suspensive condition1 8. In the first, the vendor lost and cannot recover ownership until and unless the contract is rescinded. %hereas in the second, title remains in the vendor, and when he seeks to eject vendee because of non compliance of such vendee with the suspensive condition stipulated, he is enforcing the contact and not resolving the same. E-ptio Res Sper t e !istinguishe! fro- E-ptio Spei ". (he first refers to a sale of a thing having a potential e'istence, whereas the second refers to a sale of a mere hope or e'pectancy. $. In the first, uncertainty is with regard the ,uantity and ,uality but not with regard the e'istence of the thing, in the second, the uncertainty is with regard with the e'istence of the thing1 8. In the first, the contract deals with a future thing, in the second, the contract deals with a present thing!the hope or e'pectancy1 4. In the first, the sale is subject to the condition that the thing should e'ist, so that if it does not, there is no contract for lack of an essential re,uisite, in the second, the sale produces effects even though the thing itself does not come to e'istence, since the subject matter is the hope itself. Since the contract of sale is consensual, /it is perfected at the moment when there is a meeting of the minds upon the thing which is the object of the contact and upon the price. 2owever, in case of a sale by auction, it is perfected when the auctioneer announces its perfection by the fall of the hammer or in any other customary manner0. In a contract of sale, the ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery. (he parties however may stipulate that the ownership will not pass to the vendee until the latter shall have fully paid the purchase price.

promise to buy and sell a determinate thing for a certain price is reciprocally demandable. n accepted unilateral promise to buy or sell a determinate thing for a price certain is binding upon the promissor is the promise is supported by a consideration distinct from the price. :E rnest -oney; whenever earnest money is given in a contract of sale, it shall be considered as part of the price and as proof of the perfection of the contract. It then could be simply defined as part of the purchase price advanced by the vendee to the vendor as a token of the perfection of the contract. +n )ontr )t of s (e of person ( property% the pri)e of whi)h is p y b(e in inst ((-ents% the !ifferent re-e!ies in ) se of bre )h / i( b(e to the /en!or re: ". >'act fulfillment of the obligation, should the vendee fail to pay1 $. 6ancel the sale, should the vendeeGs failure to pay cover two or more installments1 8. +oreclose the chattel mortgage on the thing sold, if one has been constituted, should the vendeeGs failure to pay cover two or more installments. (he last case, have shall have no further action against the purchaser to recover any unpaid balance of the price. ny agreement to the contrary shall be void. The foregoing re-e!ies of the unp i! se((er )u-u( ti/e. re (tern ti/e% not

%hen goods are delivered to the buyer /on sale or return0 to give buyer an option to return the goods instead of paying the price, the ownership passes to the buyer on delivery, but he may revert the ownership in the seller by returning or tendering the goods within the time fi'ed in the contract, or if no time has been fi'ed, within a reasonable time. %hen goods are delivered to the buyer /on approval0 or /on trial0 or /on satisfaction0, or other similar terms, the ownership passes to the buyerE ". %hen he signifies his approval or acceptance to the seller or does any act adopting the transaction1 $. if he does not signify his approval or acceptance to the seller but retains the goods without giving notice of rejection, then if a time

has been fi'ed for the return of the goods, on the e'piration of such time, and if no such time has been fi'ed, on the e'piration of a reasonable time. %hat is a reasonable time is a ,uestion of fact. ) rt."5<$* 5h t tit(e is )3uire! by the /en!ee or buyer if the ob9e)t whi)h he bought w s so(! by so-ebo!y who is not the ownner thereof n! who w s not uthoriMe! to se(( it8 ANS: (he vendee in such case, ac,uires no better title to the object than the vendor had. (his rule is subject to the following exceptionsE ". when the true owner is estopped or precluded by his conduct from denying the vendorGs authority to sell1 $. when the sale is made by the registered or apparent owner in accordance with recording or registration laws1 8. where the sale is made pursuant to a statutory power of sale or under the order of a court of a competent authority1 and 4. where the purchase is made in a merchantGs store, or in fairs, or in markets in accordance with the 6ode of 6ommerce and special laws. s far as the third e'ception is concerned, it must be observed that if the object which was sold at the public sale if movable property, the true owner who had lost it or who has been unduly deprived of it can still recover the same from the vendee. 2owever, if the latter had ac,uired it in good faith, such owner cannot obtain its return without reimbursing the price paid therefore. 5h t re the ob(ig tions of the se((er :'.+.?; n! :?.O..; s (e. n! the buyer in )ontr )ts of

Re-e!ies of the :unp i! se((er; EArt.1*20F ". (ien on the goods or right to retain them for the price while he is in possession of them1 $. In case of insolvency of the buyer, a right of stopping the goo!s in tr nsitu after he has parted with the possession of them1 8. right of res (e> 4. right to res)in! the s (e. The unp i! se((er of goo!s who is in possession of the- is entit(e! to ret in possession of the- unti( p y-ent or ten!er of the pri)e in the fo((owing ) ses: ". %hen the goods have been sold without any stipulation as to credit1 $. %here the goods have been sold on credit, but the term of credit has e'pired1 8. %here the buyer becomes insolvent. The unp i! se((er (osses his right of (ien or retention in the fo((owing ) ses> ". %hen he delivers the goods to a carrier or other bailee for the purpose of transmission to the buyer without reserving the ownership in the goods or the right to possession thereof1 $. %hen the buyer or his agent lawfully obtains possession of the goods1 8. Cy waiver thereof ) rt. "5$;* The right of stopp ge in tr nsitu refers to the right of the unpaid seller to resume possession of the goods anytime while they are in transit by virtue of which he will then be entitled to same rights in regard to the goods as he would have had if he had never parted with the possession. (his right is available to the unpaid seller when he has already parted with the possession of the goods and the buyer is or becomes insolvent. ) rt. "58<* ,ow Right of Stopp ge +n Tr nsitu E@er)ise! either by obtaining actual possession of the goods or by giving notice of his claim to the carrier

ANS: In /6.I.+0 sales of goods, the buyer pays a fi'ed price, while the seller pays the insurance freight up to the place of destination. In /+.&.C0 sales of goods, the goods are shipped by the seller to a certain point without any e'pense to the buyer, but after delivery at such point all subse,uent e'penses incident to the transportation and delivery shall be paid by the buyer. (hus the sale is +.&.C at the place of shipment, the buyer must pay the freight. ) rt."5$5*

or other bailee in whose possession the goods are. Such notice may be given either to the person in actual possession of the goods or to his principal. In the latter cases, the notice, to be effectual, must be given at such time and under circumstances that the principal, by its e'ercise of reasonable diligence, may present a delivery to the buyer. %hen notice is given by the seller to the carrier, or other bailee in possession of the goods, he must redeliver the goods to, or according to the directions of the seller. (he e'penses of such delivery must be borne by the seller. If, however, a negotiable document of title representing the goods has been issued by the carrier, or other bailee, he shall not be obliged to deliver or justified in delivering the goods to the seller unless such document is first surrendered for cancellation. ) rt."58$* Right of Res (e / i( b(e to the unp i! se((er : ". %hen the goods are perishable in nature1 $. %here the seller has e'pressly reserved the right of resale in case the buyer should make default1 8. %here the buyer has been in default in payment of the price for unreasonable time. It is however, essential before the resale can be made that the unpaid seller should have a right of lien or should have stopped the goods in transitu. Effe)t of the Res (e- buyer ac,uires a good title against the original buyer. (he unpaid seller, on the other hand, shall not be liable to the original buyer upon the contract of sale or for any profit made by reason of the resale. ,O5 +S RESA<E E??E'TED8 ANS: #aybe made either by public or private sale. 2owever, the unpaid, who is bound to e'ercise reasonable care and judgment in making the resale, cannot directly or indirectly buy the goods. It is not essential to the validity of the resale that notice of an intention to resell the goods be goods be given by the seller to the

original buyer. Cut where the right to resell is not based on the perishable nature of the goods, or upon e'press provision of the contract of sale, the giving or failure to give such notice shall be relevant in any issue involving the ,uestion whether the buyer had been in default for an unreasonable time before the resale was made ) rt."588* Right of res)ission / i( b(e to the unp i! se((er, whenE ". %here he e'pressly reserved the right to do so in case the buyer should make default1 and $. %here the buyer has been in default in the payment of the price for un reasonable time. It is essential however that before rescission can be made, the unpaid seller should have a right of lien or should have stopped the goods in transitu. Effe)t of Res)ission " once the unpaid seller has rescinded the transfer of title and resumed ownership on the goods, he shall not be thereafter be liable to the buyer upon the contract of sale. s a matter of fact, he may recover from the buyer damages for any loss occasioned by the breach of the contract. It is not essential that such overt act should be communicated to the buyer. (he unpaid sellerGs right of lien or stoppage in transitu is not affected should the buyer sold the goods to another before he e'ercises the right, unless he assented thereto. 5,ERE T,E SA6E T,+NC +S SO<D TO D+??ERENT PBR',ASERS% TO 5,O6 S,A<< T,E O5NERS,+P .E TRANS?ERRED8 ANS: s to movables, the ownership shall be transferred to the person who may have first taken possession thereof in good faith. As to i--o/ b(es

a. to the person ac,uiring it who in good faith first recorded it in the Registry of Property1 b. In default thereof, to the person who in good faith was first in possession1 c. In default thereof, to the person who presents the oldest title, provided there is good faith. ) rt. "544* 5 rr nty in ) se of e/i)tion is an implied warranty in contracts of sale, by virtue of which, if the vendee is deprived of the whole or part of the thing purchased by a final judgment based on a prior right to the sale or an act imputable to the vendee, such vendor shall answer for the eviction even though nothing has been said in the contract on the subject. ) rt."543* Two $in!s of 5 i/er of 5 rr nty Ag inst E/i)tion: ". 6onsciente waiver there is merely voluntary renunciation made by the vendee of the right to warranty in case of eviction. $. Intencionada waiver! there is voluntary renunciation by the vendee of the right to warranty against eviction, with knowledge of the risk of eviction and assuming the conse,uences thereof. (he effect of such renunciation in case of eviction is to relieve the vendor of any liability. ) rt "554* +? T,ERE +S NO ACREE6ENT 5+T, RECARD TO 5ARRANTY +N 'ASE O? EI+'T+ON% 5,AT +S T,E EJTENT O? T,E <+A.+<+TY O? T,E IENDOR8 ANSE (he Aendee shall have the right to demand of the vendorE ". the return of the value of the thing sold had at the time of eviction, be it greater or less than the price of the sale1 $. the income or the fruits1 8. the cost of the suit which caused the eviction and those of the suit brought against the vendor for the warranty1 4. the e'penses of the contract, if the vendee has paid them1 5. the damages and interests, and the ornamental e'penses, if the sale was made in bad faith.

A))ion Re!hibitori is the action instituted by the vendee against the vendor to avoid a sale on account of some one of defect in the thing sold which renders it unfit for the use intended of which will diminish its fitness for such use to such e'tent, that had the vendee been aware thereof, he would have not ac,uired it. A))ion Au nti 6inoris is an action to procure the return of a part of the purchase price paid by the vendee to the vendor by reason of such defect. +nst n)es when /en!ee - y suspen! p y-ent of the pri)e: ". Should he be disturb in the possession or ownership of the thing sold1 or $. Should he have reasonable grounds to fear such disturbance by a vindicatory action or by a foreclosure of mortgage. The right% howe/er% !oes not e@ist in the fo((owing ) ses: ". Should there be a stipulation to that effect, or $. Should the vendor give security for the return of the purchase price, or 8. Should the vendor have caused the disturbance or danger to cease1 or 4. Should the disturbance consist only of a mere act of trespass. 6ontract of Sale is e'tinguished by the same causes in all other obligations, and also by conventional or legal redemption. 'on/ention ( Re!e-ption is that which takes place when the vendor reserves the right to repurchase the thing sold with the obligation to reimburse to the vendee the price of the sale, the e'penses of the cntract, other legitimate payments made by reason of the sale, as well as necessary and useful e'penses made on the thing sold.

5,EN +S 'ONIENT+ONA< REDE6PT+ON PRESB6ED TO .E AN EAB+TA.<E 6ORTCACE8 ANSE Inder the following circumstancesE ". %hen the price of the sale with right to repurchase is unusually inade,uate1 $. %hen the vendor remains in possession as a lessee or otherwise1 8. %hen upon of after the e'piration of the right to repurchase another instrument e'tending the period of redemption or granting a new period is e'ecuted1 4. %hen the purchaser retains for himself a part of the purchase price1 5. when the vendor binds himself to pay the ta'es on the thing sold1 9. I- any other cases, where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of another obligation1 :. %hen there is doubt as to whether the contract is a contract of sale with right to repurchase or an e,uitable mortgage. 5,AT +S T,E PER+OD ?OR T,E REDE6PT+ON O? PROPERTY SO<D 5+T, T,E R+C,T O? REPBR',ASE8 ANS : In absence of any e'press agreement, that period of redemption shall be four )4* years from the date of the contract. Should there be any agreement, the period cannot e'tend ten )"<* years. 2owever, the vendor may still e'ercise the right to repurchase within thirty )8<* days from the time final judgment was rendered in a civil action on the basis that the contract was a true sale with right to repurchase. 5,AT ARE T,E O.<+CAT+ONS O? T,E IENDOR A RETRO 5,EN ,E EJER'+SES ,+S R+C,T O? REPBR',ASE8 ANS: ". (o return to the vendee the price of the sale1 $. (o pay the e'penses of the contract and other legitimate payments made by reason of sale1 and 8. (o pay all necessary and useful e'penses made on the thing sold. <eg ( Re!e-ption is the right subrogated upon the same terms and conditions stipulated in the contract, in the place of one who ac,uires a thing by purchase or dation in payment, or by any other transaction whereby ownership is transmitted by onerous title. +NSTAN'ES O? <ECA< REDE6PT+ON% RE'OCN+NED .Y OBR <A5: Bn!er the 'i/i( 'o!e: ". Redemption by the other co!heirs, or by any or some of them, should a co!heir sell his hereditary right to a stranger1 $. Redemption by an owner of an adjoining land should the owner of a piece of rural land, the area of which does not e'ceed one hectare, alienate it to a third person. If two or more adjoining owners desire to e'ercise the right at the same time, the owner of a smaller area shall be preferred1 and should both lands have the same area, the one who first re,uested the redemption. )Art. 1021* 8. Redemption by an owner of adjoining land should the owner of a piece of urban land, which is so small and so situated that a major portion thereof cannot be used for any practical purpose within a reasonable time and which said owner had bought merely for speculation, resell it to a third person. If the resale has not yet been perfected, an owner of adjoining land shall have the right of preemption1 in other words, his right to buy the property is preferred to that of third persons. If two or more adjoining owners desire to e'ercise the right of pre!emption or redemption, as the case may be, the owner whose intended use of the land appears best justified shall be preferred. )Art. 1022* 4. Redemption by a debtor should the credit or other incorporeal right in litigation be sold by the creditor to a third person. )Art. 10#&* Bn!er other ( wsE ". Redemption by the applicant, his widow, and legal heirs within five years should a piece of land under a homestead of free patent be alienated to a third person. ) Se). 114% 'o-. A)t. No. 1&1*

$. Redemption by a judgment debtor within one year should real property belonging to him be sold on e'ecution. )Re/ise! Ru(es of 'ourt* 8. Redemption by owner should the property belonging to him be sold for delin,uent realty ta'es. )Se)tion 1#0% Re/. A!-. 'o!eF 4. Redemption by mortgagor within one year should his mortgaged property be foreclosed and subse,uently sold. ) Re/ise! Ru(es of 'ourt* Distin)tion between re!e-ption n! pre-e-ption ". In redemption, the sale to a third person has already been perfected, whereas in pre!emption, the sale to a third person has not yet been perfected1 $. (he right of redemption has a much broader scope than the right of pre!emption. s a matter of fact, the latter may be e'ercised only where there is a prospective resale of a small piece of urban land originally bought by the prospective vendor merely for speculation1 8. (he right of redemption is directed against the third person who bought the property, whereas the right of pre!emption is directed against the prospective vendor who is about to resell the property1 4. (he effect of redemption is to e'tinguish a contract that has already been perfected or even consummated, whereas the effect of pre!emption is to prevent the birth or perfection of a contract. T,E R+C,T O? PRE-E6PT+ON OR REDE6PT+ON RECB<ATED .Y ARTS. 10#7 TO 1022 O? T,E '+I+< 'ODE +S TO .E EJER'+SED8 ANSE (he right must be e'ercised within thirty )8<* days from the notice in writing by the prospective vendor, or by the vendor as the case may be. S (e !istinguishe! fro- ! tion in p y-ent: ". In sale, there is no pre!e'isting credit. %hile in dation thereGs a pre! e'isting credit1 $. In the first, gives rise to obligations while in the second, it e'tinguishes obligations1

8. In the first, the cause or consideration is the price from the viewpoint of the seller or obtaining the object from the viewpoint of the buyer, while in the second, the cause or consideration from the viewpoint of the person offering dation in payment is the e'tinguishment of his debt and from the viewpoint of the creditor, it is the ac,uisition of the object offered in lieu of the original credit1 4. In the first, there is greater freedom in the determination of the price, while in the second, there is less freedom. S (e !istinguishe! fro- (e se " In a sale, the seller transfers ownership1 in a lease, the lessor or landlord transfers merely the temporary possession and use of the property. Arti)(e 1&07 " thing is determinate when it is particularly or physically segregated from all others of the same class. (he re,uisite that a thing be determined is satisfied if at the time the contract is entered into, the thing is capable of being made determinate without the necessity of a new or further agreement between the parties.

?uture goo!s re those sti(( to be: ". #anufactured or printed1 $. Raised or future agricultural products1 8. c,uired by seller after the perfection of the contract1 4. (hose whose ac,uisition depends upon a contingency which may or may not happen. (he sole owner of a thing may sell an undivided interest therein. ) Art. 00#* Distin)tion between a. )ontr )t of s (e n! n gen)y to se((:

In sale, the buyer pays the price1 the agent delivers the price which in turn he got from this buyer1

b. In sale, the buyer after delivery becomes the owner, the agent who is supposed to sell does not become the owner even if the property has already been delivered to him1 c. In sale, the seller warrants1 the agent who sells assumes no personal liability as long as her acts within his authority and in the name of the principal. +n the Auirog /s P rsons , r!w re 'o. E#2 Phi(. *71F% the defendant entered into a contract of sale not an agency to sell. (here was the price that was fi'ed and there was the duty to pay the same regardless of whether or not the defendant had sold the beds. (he word /agent0 simply means that the defendant was the only one who could sell the plaintiffGs beds in Aisayas0. Ru(es to !eter-ine if the )ontr )t is one of s (e or pie)e of wor$: "

seller, in an auction sale, can bid, provided such a right to bid is reserved1 and notice was given that the sale by auction is subject to a right to bid on behalf of the seller. seller also may employ others to bid for him, provided he has notified the public that the auction is subject to the right to bid on behalf of the seller. People who bid for the seller, but are not themselves bound, are called /by!bidders0 or /puffers0. The ownership of the thing so(! is tr nsferre! to the /en!ee upon )tu ( or )onstru)ti/e !e(i/ery thereof0 )Art. 1&11* Ownership is not tr nsferre! by perfe)tion but by !e(i/ery. The p rties - y stipu( te th t ownership in the thing sh (( not p ss to the pur)h ser unti( he h s fu((y p i! the pri)e;. EArt. 1&12F .enerally, ownership is transferred upon delivery, but even if delivered, the ownership may still be with the seller till full payment of the price is made, if there is a stipulation to this effect. Cut of course, innocent third parties cannot be prejudiced. (his stipulation is usually known as pactum reservati dominii and is common in sales on the installment plan. :Po(i)it )ion; this is a unilateral promise to buy or sell which is not accepted. (his produces no juridical effect and creates no legal bond. (his is a mere offer. Option " it is a contract granting a person the privilege to buy or not to buy certain object at any time within the agreed period at a fi'ed price. (he contract of option is a separate and distinct contract from the contract. It must have its own cause or consideration. 5ho be rs the ris$ of (oss8 "

a. If ordered in the ordinary course of business sale b. If manufactures specially and not for the market piece of work. +f one wi(( )onstru)t house on his own ( n! n! + wi(( get both the ( n! n! the house% it wou(! see- th t this )ou(! be s (e. Ru(es to !eter-ine whether 1&02F )ontr )t is one of s (e or of b rter: EArt.

a. +irst rule Intent b. If intent does not clearly appear ". If thing is more valuable than money barter $. of 5<!5< sale 8. If thins is less valuable than money sale Bn!er the st tute of fr u!% the s (e of: ". Real property )regardless of the amount* $. Personal property if P5<< or more must be in writing to be enforceable.

a. If the object has been lost before perfection, the seller bears the loss because there was no contract and being the owner, the seller bears the loss1

b.

If the object was lost after delivery to the buyer, clearly the buyer bears the loss. /Res perit !o-ino0 the owner bears the loss1 c. If the object is lost after perfection but before delivery, here the buyer bears the loss, as e'ception to the rule of res perit domino. )(he implication in the case of / Ro- n /s Cri- (t0 is that had the sale been perfected, the buyer would have borne the loss, that is, he would still have had to pay for the object even if no delivery had been made.* 6e ning of :fungib(es; " are personal property which may be replaced with e,uivalent things. +ungibles are almost the same as consumable goods with this differenceE that while the distinction between consumables and non!consumables is based on the nature of the thing, the differences between fungibles and non!fungibles is based on the intention. (hus rice is ordinarily consumable, but if I borrowed a sack of rice for display purposes only, and I promised to return the identical sack of rice, the rice here is non!fungible. If the deed of sale of land is notari?ed by a notary public whose authority had e'pired, the sale would still be valid, since for the validity of its sale, a public instrument is not even essential. The husb n! n! wife ) nnot se(( property to e )h other% e@)ept: ". %hen there is a separation of property agreed upon in the marriage settlements1 $. %hen there has been a judicial separation of property. )Art. 1&47* Art. 1&4# " If at the time the contract of sale is perfected, the thing which is the object of the contract has been entirely lost, the contract shall be without any effect. Cut is the thing is lost in part only, the vendee may choose between withdrawing from the contract and demanding the

remaining part, paying its price in proportion to the total sum agreed upon. Ob(ig tions of the /en!or: a. b. c. d. (o transfer ownership )cannot be waived*1 (o deliver ) cannot be waived*1 (o warrant the object sold )this can be waived* (o preserve the thing from perfection to delivery, otherwise, he can be held liable for damages. )Art. 1&4**

As ru(e% in the bsen)e of gree-ent% ownership is not tr nsferre!% e/en if so(!% un(ess there h s been !e(i/ery. In general, /delivery of the property to a person who has purchased the property in his own name )although he used the money of another* will give title to said purchaser and not the owner of the money used.0 Din!s of !e(i/ery or tr !ition: ". ctual or real $. =egal or constructive a. =egal +ormalities b. symbolical tradition c. traditio longa manu d. traditio brevi manu e. tradition constitutum possessorium The inst n)es when se((er is sti(( owner !espite !e(i/ery: ". $. >'press stipulation1 If under the bill of lading the goods are deliverable to seller or agent or their order1 8. If the bill of lading, although stating that the goods are to be delivered to buyer or his agent, is kept by the seller or his agent1 4. %hen the buyer although the goods are deliverable to order of buyer, and although the bill of lading is given to him, does not honor

the bill of e'change sent along with it. Cut of course, innocent third parties should not be adversely affected. Ru(es when the 3u ntity is (ess th n th t gree! upon " EArt. 1*22F ". Cuyer may reject1 $. &r buyer may accept what have been delivered, at the contract rate. Ru(es when the 3u ntity is -ore th n the gree-ent: -

". +rom the time when they are delivered to a carrier by land, water, or air, or other bailee for the purpose of transmission to the buyer, until the buyer, or his agent in that behalf, takes delivery of them from such carrier or other bailee1 $. If the goods are rejected by the buyer, and the carrier or other bailee continues in possession of them, even if the seller has refused to receive them back. 5hen re goo!s : no (onger in tr nsit; "

a. Cuyer may reject all. 2e must not be burdened with the duty of segregation, if he does not so desire1 b. Cuyer may accept the goods agreed upon and reject the rest1 c. If he gets all, he must pay for item at the contract rate. Ru(es when 3u ntity is !ifferent: a. accept the goods which are in accordance with the contract1 b. and reject the rest. 5hen is the /en!or not ob(ige! to - $e !e(i/ery fter the perfe)tion of the )ontr )t of s (e8 " The /en!or is not ob(ige! to - $e s i! !e(i/ery in the fo((owing: a. If the vendee has not paid him the price1 b. If no period for the payment has been fi'ed in the contract otherwise, the vendor might play a futile /waiting game01 c. >ven if a period for such payment has been fi'ed in the contract if the vendee has lost the right to make use of the period and still refuse to pay. A se((er is !ee-e! n :unp i! se((er; " ". $. If only part of the price has been paid or delivered1 #ere delivery of a negotiable instrument does not e'tinguish the obligation because it may be dishonored.

If the buyer, or his agent in that behalf, obtains delivery of the goods before their arrival of the appointed destination1 If, after the arrival of the goods at the appointed destination, the carrier or other bailee acknowledges to the buyer or his agent that he holds the goods on his behalf and continues in possession of item as bailee for the buyer or his agent1 and it is immaterial that further destination for the goods may have been indicated by the buyer1 If the carrier or other bailee wrongly refuses to deliver the goods to the buyer or his agent in that behalf. )Art. 1*#1*

(he period of limitation )prescriptive period* for a redhibitory action based on the fraud or defects of animals is forty )4<* days from the date of their delivery to the vendee. nd si' )9* months for breach of warranty against hidden defects1 rescission of the contract because of the same1 or proportionate reduction in the price because of the same1 rescission or proportionate reduction in the price of sales of real estate either by the unit or for a lump sum because of failure to comply with the provisions of the contract. If an animal should die within three )8* days after its purchase, the vendor shall be liable if the disease which caused the death e'isted of the time of the contract. ) rt. "5:3*

ACEN'Y

5hen re :goo!s in tr nsit;"

Arti)(e 1202

Cy the contract of agency, a person binds himself to render some service, or to do something in representation or in behalf of another with the consent or authority of the latter

c. (he agent e'ercises discretionary powers in order to attain the ends for which he was appointed, whereas the employee e'ercises ministerial function only1 d. (he first is a preparatory contract1 whereas the second is a principal contract. 2. Distinguish :)ontr )t of in!epen!ent )ontr )tor; gen)y; fro- )ontr )t with n

. The !efinition is so bro ! n! therefore !efe)ti/e. s it is so worded, it would seem that the agent must always e'pressly represent the principal. (his is not necessarily so, for sometimes an agent does not disclose his principal1 he may soon act in behalf of himself, but here the principal would still be bound as when the contract involves things belonging to the principal. b. +ts 'h r )teresti)s: gency is a principal, nominate, bilateral, preparatory, cumulative and generally onerous contract1 .enerally, it is also a representative relation, not a status since agency is not inherent or permanent1 It is a fiduciary relation since it is based on trust and confidence. )ontr )t of gen)y:

Essenti ( e(e-ents of

(here is consent, e'press or implied of the parties to establish the relationship of agency1 (he object is the e'ecution of a juridical act in relation to a third person1 (he agent acts as a representative and not for himself1 and (he agent acts within the scope of his authority. :)ontr )t of gen)y; fro- )ontr )t of (e se of

". In the first, the principle of representation e'ists, whereas in the second, such principle is not recogni?ed1 $. n agent is more or less under the control of his principal, whereas, an independent contractor is not under the control of the person with whom he contracts1 8. n agent binds his principal provided that he acts within the scope of his authority, whereas an independent contractor cannot bind the person with whom he contracts, by his acts1 4. If a third person is injured through the fault or negligence of an agent, he can proceed against the principal for damages, but if he is injured through the fault or negligence of an independent contractor, he cannot proceed against the person with whom the latter had contracted damages1 5. (he first is a preparatory contract, whereas the second, is a principal contract.

T,E D+??ERENT D+NDS O? ACEN'Y

". s to 6onstitutionE >'press when it is e'pressly constituted Implied a. from the acts of the principal b. from his silence or inaction c. from his failure to repudiate the agency, knowing that another is acting in his behalf without authority. $. s to form oral

1. Distinguish ser/i)es; a.

In the first, the principle of representation is applied, whereas in the second, it is not1 in other words, in the first, the basis of the contract is representation, whereas in the second, the basis is employment1 b. In the first, the contract may be e'tinguished at will by the principal, whereas in the second, concurrence of both party is necessary1

 8.

written

s to cause onerous when it is for compensation gratuitous when there is no compensation s to e'tent! general when it comprises all of the business of the principal special when it comprises one or more specific transactions

In a sale of a piece of land, or any interest therein through an agent, the authority of an agent must be in writing, otherwise, the sale shall be void. )Art. 121&* D+ST+N'T+ON O? CENERA< AND SPE'+A< ACEN'Y E CENERA< ACEN'Y refers to that type of agency with comprises all of the business of the principal, whereas special agency, refers to that type of agency which comprises one or more transactions. %hether general or special, the agency may be couched in general terms. In such a case, the agency merely authori?es the agent to perform acts of administration. 6onse,uently, a general agency may or may not be couched in general terms but an agency couched in general agency, if it comprises all of the business of the principal, or a special agency, it is comprises only one or more specific transactions. +nst n)es where spe)i ( power of ttorney is ne)ess ry in or!er to bin! the prin)ip ( EArt. 1212F ! ! ! ! ! ! ! ! ! ! ! ! to make such payment as are not usually considered as acts of administration1 to effect novation which put an end to obligations e'isting at the time of the constitution of the agency1 to compromise, to submit to arbitration, to renounce right to appeal, to waive objections to venue, or to abandon a prescription already ac,uired1 to waive any obligation gratuitously1 to enter into any contract by which ownership of an immovable is transmitted or ac,uired gratuitously or for a valuable consideration1 to make gifts, e'cept customary ones for charity or those made to employees in the business managed by the agent1 to loan or borrow money, unless the latterGs act be urgent and indispensable for the preservation of the things under administration1 to lease any real property to another person for more than one year. to bind the principal to render some services without compensation to bind the principal in a contract of partnership1 to obligate the principal as a guarantor or surety1

4.

5. s to third persons agent de jure agent by estoppel as when a person, who is not really an agent, represents himself or is represented as such. (here can be a perfected contract of agency even if the acceptance by the agent is merely implied. s far as acceptance by mere silence of inaction is concerned, the following rules shall governE RB<ES COIERN+NC +6P<+ED ACEN'YE Cetween the persons who are present, the acceptance may be implied if the principal delivers his power of attorney to the agent and the latter receives it without objection1 Cetween the persons who are absent, the acceptance cannot be implied, unlessE (he principal transmits his power of attorney to the agent, who receives it without objection, or (he principal entrusts to him by letter or telegram a power of attorney with respect to the business in which he is habitually engaged as an agent, and he did not reply to the letter or telegram.

! ! !

to create or convey real rights over immovable property1 to accept or repudiate an inheritance1 to ratify or recogni?e obligations contracted before agency, any other act of dominion.

SBPPOSE AN ACENT 'ONTRA'TS +N T,E NA6E O? ,+S PR+N'+PA< .BT EJ'EED+NC T,E S'OPE O? ,+S ABT,OR+TY% 5,AT +S T,E STATBS AND E??E'T O? T,E 'ONTRA'T8 ANS: (he answer is a distinction.

special power to sell e'cludes the power to mortgage, and a special power to mortgage does not include the power to sell. 6onse,uently, if an agent, holding a special power to sell, mortgages the property, the contract would be unenforceable ) rt. "3:;*. If the special power to sell does not specify the manner or terms of payment, the agent may not sell the property on credit. (he most fundamental obligations of an agentE a* to carry out the agency1 b* to act within the scope of his authority1 and c* to act on behalf of his principal. Croadly speaking, the words /authority0 and /power0 of an agent are interchangeable terms. 2owever /authority0 refers to the mandate given to the agent by his principal, whereas /power0 refers to the e'tent of the mandate of the agency. In other words, the first is the cause, whereas the second is the effect. n agent authori?ed to sell a given authority cannot bind his principal by selling such commodity, either directly or indirectly, to himself. 6onse,uently, if he sells the commodity to himself, by acting through a sub! agent, the sale is unenforceable unless the principal ratifies the sale after he has full knowledge of the facts. If the agent entered into a contract with a third person in his own name or without disclosing his principal, the contract could be binding only as between the two parties, because obviously, the third person did not rely on the credit of the principal when he entered into the contract. 2owever, there are two instances where the principal is bound by the contractE a* where the contract involves things belonging to him1 and b* where he ratifies the contract or derives benefit therefrom.

Its effect upon the principalE s far as the principal is concerned, the contract is unenforceable. (his is true whether the third person is aware or unaware of the fact that the agent was acting outside the scope of his authority. 6onse,uently, is such third person is prejudiced as a result of the contract, he would not be able to proceed against the principal. (here are, however, two )$* instances, where he may hold the principal liable, namelyE a* where such principal has ratified the contract. In such case, the contract becomes valid and binding1 and b* where such principal had allowed the agent to act as though he had full power. In such a case, the former is solidarily liable with the latter. Its effect upon the agentE s far as the agent is concerned, the status of the contract shall depend upon whether the third person was unaware or aware of the fact that such agent was acting beyond the scope of his authority. If the third person was unaware of such fact, the contract is certainly binding as between the two parties, although unenforceable insofar as the principal is concern. If the third person was aware of such fact, the contract is unenforceable, even as between the two parties. In such a case, the agent cannot be held liable, unless he undertook effort to secure the principalGs ratification. &bviously, the principal cannot be held liable unless he ratifies the contract. n agent who receives something by virtue of the agency, such as gift or an amount in e'cess of the purchase price is bound to make an accounting to his principal even if such thing, gift or e'cess is not owing to the latter because of rt. "3;" which provides that />very agent is bound to render an account of his transactions and to deliver to the principal whatever he may have received by virtue of the agency, even though it may not be owing to the principal. ny stipulation e'empting the agent from the obligation to render an account shall be void0.

n agent may appoint a substitute if the principal has not prohibited him from doing so1 but he shall be responsible for the acts of his substituteE "* when he was no given the power to appoint one1 $* when he was given such power, but without designating the person, and the person appointed was notoriously incompetent or insolvent. ll acts of the substitute appointed against the prohibition of the principal shall be void. commission agent is one who is engaged in the business of buying and selling for a principal of personal property, which for this purpose has to be placed in his possession and at his disposal. broker is a middleman or intermediary who, in behalf of others, and for a commission, or fee, negotiates contracts or transactions relative to real or personal property in the name of the principal. Distin)tion between bro$er n! re ( or person ( property: "* )o--ission gent re( ti/e to

compensation, in pursuance of the agentGs usual trade or business, with the title to the goods remaining in the principal. 2e differs from a broker can only buy or sell in the name of his principal. (he ordinary commission given to a commission agent is merely the fee or compensation for the sale of the goods which are placed in his possession and at his disposal, whereas the guarantee commission )del credere commission* is merely additional compensation for the risks of the collection. Should the commission agent receive on a sale, in addition to the ordinary commission, a guarantee commissionE )"* he shall bear the risk of collection, and )$* he shall pay the principal, the proceeds of the sale on the same terms agreed upon with the purchaser. contract of agency may be revoked, either e'press or implied. +-p(ie! re/o) tion - y be effe)te!: "* by the act of the principal in appointing another agent for the same business or transactions. $* by the act of the principal in directly managing the business entrusted to the agent. 8* by the act of the principal in subse,uently granting a special power of attorney as regards the business to another agent where he had previously granted a general power of attorney to the agent. ' uses for the e@tinguish-ent of )ontr )t of gen)y. EArt 1414F )> @ % R @* "* by the >'piration of the period for which the agency was constituted $* by the @eath, civil interdiction, insanity or insolvency of the principal or the agent 8* by the %ithdrawal of the agent 4* by the ccomplishment of the object or purpose of agency 5* by Revocation 9* by the @issolution of the firm or corporation which entrusted or accepted the agency An gen)y is not re/o) b(e t wi(( in the fo((owing ) ses: "* if a bilateral contract depends upon it1 $* if it is the means of fulfilling an obligation already contracted1

$*

8* 4*

(he job of a commission agent involves a three!fold relationship, in other words, the agent is related not only to his principal and to the buyer or seller, but also to the property constituting the object of the transaction which should be placed in his possession and at his disposal. (he job of a broker on the other hand, involved only a double relationship, in other words, the broker is a pure intermediary, a pure go!between who does not have either the custody or the possession of the property that he disposes of. commission agent engages only in the business of buying and selling personal property for his principal1 whereas, a broker engages in the business of buying or selling for his clientGs personal or real property1 commission agent should have a place of business, whereas, this is not necessary for the broker1 (he broker is much more independent than the commission agent.

commission merchant is a commercial agent to whom the possession of personalty is entrusted by or for the owner, to be sold, for

8* if a partner is appointed manager of the partnership and his removal from the management is unjustifiable1 4* if it has been constituted in the common interest of the principal and of the agent or with interest of a third person who has accepted the stipulation in his favor. n agency coupled with an interest refers to /an agency wherein the agent has ac,uired some interest of his own in the e'ecution of the authority granted to him, in addition to his mere interest in the contract of employment with the resulting gains0. D+ST+N'T+ONS .etween gen)y n! p rtnership an agent acts not for himself but for his principal1 a partner acts for himself, for his firm and for his partners. Agen)y fro- (o n an agent may be given funds by the principal to advance the latterGs business, while a borrower is given money for purposes of his own, and he must generally return it, whether or not his business is successful. Agen)y fro- (e se of property the agent is controlled by the principal whereas the lessee is not controlled by the lessor1 (he agency may involve things other than property whereas a lease of property involves property only. (he agent can bind the principal, while the lessee, as such cannot bind the lessor. Agen)y fro- Trust: "* an agent usually hold no title at all1 while a trustee may hold legal title to the property1 $* usually, an agent acts in the name of the principal1 while a trustee may act in his own name1 8* usually, agency may be revoked or terminated at any time, while trust is usually ended by the accomplishment of the purposes for which it was formed 4* agency may not be connected at all with the property, while trust involves control over the property1

5* the agent has authority to make contracts which will be binding on his principal1 while a trustee does not necessarily or even possess such authority to bind the trustor or the cestui ,ue trust1 9* agency is really a contractual relation, while a trust may be the result of the contract or not1 it may be created by law. :Agen)y to se((; fro- s (e: "* in the first, the ownership of the goods is not transferred to the agent while in the second, the ownership is transferred to the buyer after delivery1 $* in the first, the agent delivers the price, while in the second, the buyer pays the price. :Agen)y to buy; fro- s (e: "* in the first, the agent ac,uires ownership in behalf of the principal, while in the second, the buyer ac,uires ownership for himself1 $* in the first, the agent must account for all benefits or discounts received from the seller, while in the sale, the buyer who obtains discount does not have to reveal such fact to its own buyer. 8* (he agent delivers the price, while the buyer pays the price. Agen)y fro- Cu r!i nship; "* the agent represents a capacitated person while a guardian represents an incapacitated person1 $* the agent is appointed by the principal and can be removed by the latter, while the guardian is appointed by the court and stands in /loco parentis01 8* the agent is subject to the direction of the principal while the guardian is not subject to the directions of the ward, but must of course act for the benefit of the latter1 4* the agent can make the principal personally liable, while the guardian has no power to impose personal liability on the ward. Agen)y fro- =u!i)i ( !-inistr tor: "* an agent is appointed by the principal, while a judicial administrator is appointed by the court1 $* an agent represents the principal, while a judicial administrator represents not only the court but also the heirs and creditors of the estate1

8* an agent generally does not file a bond, while an administrator files a bond1 4* an agent is controlled by the principal thru their agreement, while an administratorGs acts are subject to specific orders from the court. / n agency is presumed to be for a compensation, unless there is proof to the contrary0 ) rt. "3:5* special promise to compromise does not authori?e submission to arbitration ) rt. "33<* Two fun! -ent ( prin)ip(es of gen)y EArt 1221F "* the agent must act within the scope of his authority $* the agent must act in behalf of his principal Authority !istinguishe! fro- instru)tions: "* the principal affects only third persons, because if the act is done beyond the scope of the agentGs authority, the principal is not bound1 while instruction concerns only the principal and the agent1 $* (hird persons must therefore verify or investigate the authority, while in instruction, third persons do not have to verify or investigate the instructions.

Arti)(e 14## Cy the contract of loan, one of the parties delivers to another, either something not consumable so that the latter may use the same for a certain time and return it, in which case the contract is called a commodatum, or money or other consumable thing upon the condition that the same amount of the same thing and ,uality shall be paid, in which case the contract is simply called a loan or mutuum. 6ommodatum is essentially .R (II(&IS. Simple loan maybe gratuitous or with a stipulation to pay interest in commodatum, the bailor retains the ownership of the thing loaned while in simple loan, ownership passes to the borrower. Distin)tions between -utuu- n! )o--o! tu-: "* In the first, e,uivalent amount is to be returned )subject matter is fungible*1 while in the second, the same thing is to be returned )subject matter is non!fungible*1 $* #utuum may be gratuitous or onerous )with interest* while commodatum is gratuitous ) if there is compensation, it ceases to be commodatum*1 8* &wnership goes to the borrower or bailee1 while in commodatum ownership is retained by the lender or bailor1 4* Refers only to personal property, while in the second, may involve real and personal property1 5* Referred to as loan for consumption, while commodatum referred to as loan for use or temporary possession1 9* Corrower, because of his ownership, bears risks of loss1 while lender, because of ownership, bears risks of loss1 :* 6an be generally obliged to pay only at the end of period, while object at the end of period, still in some cases as return can be demanded even before the end of the period. 'onsu- b(e n! Non-)onsu- b(e !istinguishe!: "* 6onsumable a movable which cannot be used in a manner appropriate for its nature without its being consumed. i.e. gasoline.

'RED+T TRANSA'T+ONS
Credit0 refers to the belief or trust by a person in anotherGs ability to comply with an obligation1 and /credit transaction refers to the contracts of agreements based on the said trust or credit. S)ope of the 're!it Tr ns )tions: a. the principal contracts of loan )both /commodatum0 and /mutuum0* and deposit1 b. the accessory contracts of personal guaranty and real guaranty1 c. preference and concurrence of credits.

$* -on!consumable a movable which can be used in a manner appropriate to its nature without its being consumed. i.e. book ?ungib(e n! Non-fungib(e !istinguishe!: "* +ungible if the intention is to allow a substitution of the thing given $* -on fungible if the intention is to compel a return of the identical thing given. %hether a thing is consumable or not depends on the nature of the thing1 whether it is fungible or not depends on the intention. 2ence, sugar is consumable and ordinarily fungible but if the intention is merely to display the sugar for e'hibition )ad ostentationem* then it is still consumable )nature* but non!fungible )intention*. Bailment it is derived from a +rench word / bailler0 meaning to deliver. It is defined as the /delivery by one person to another in trust for a specific purpose, with a contract e'press or implied, that the first shall be faithfully e'ecuted and the property returned or duly accounted for when the special purpose is accomplished or kept until the bailor reclaims it0 P rties in b i(-ent: "* bailor the giver1 and $* bailee the recipient of the thing bailed. Insofar as the borrower is concerned, the cause of consideration in a contract of bailment of loan is the ac,uisition of thing1 insofar as the lender is concerned, it is the right or re,uire the return of the same thing or its e,uivalent. 're!it !efine! s pp(ie! to :(o ns; " It is the ability to borrow money or thing by virtue of the confidence or trust reposed by a lender that the borrower will pay what he may promise. It is derived from a =atin word :)re!ere; meaning :to trust;. <o n !istinguishe! fro- Rent or <e se:

"* In loan, the lender losses his property for the borrower becomes the owner thereof, while in rent or lease, the owner of the property does not lose his ownership, he merely loses control thereof in a limited way for the duration of the rent or lease1 $* (he relationship is one of lender and borrower, while the relationship is one of lessor and lessee. <o n !istinguishe! fro- !eposit: "* In loan, the purpose is to grant its use to the borrower, while in deposit, the purpose is safekeeping by depository )who generally cannot use*1 $* .enerally, the borrower pays only at the end of the period1 while in deposit, the returning can be demanded by the depositor at any time1 8* Relationship is that of lender )creditor* and borrower )debtor*, while the relationship is that of depositor and depository1 4* (here can be compensation of credits, while in deposit, thereGs no compensation of things deposited with each other )e'cept by mutual agreement* <o n !istinguishe! fro- S (e: "* =oan is a real contract, while sale is a consensual contract1 $* .enerally, unilateral because only borrower has the obligations while sale is bilateral and reciprocal.

'O66ODATB6
6ommodatum and =oan are real contracts. (hey are perfected by the delivery of the object loaned. &n the other hand, consensual contracts are perfected by mere consent. Commodatum is a real, principal, essentially gratuitous and personal contract where one of the parties )called a bailor or lender* delivers to another )called the bailee or borrower* a non!consumable

object, so that the latter may use the same for a certain period and later return it. (he term is derived from the =atin /6ommodum0 or /commodo0 meaning usefulness to a borrower. ?e tures or 'h r )teristi)s of 'o--o! tu- s "* $* 8* 4* 'ontr )t:

borrowed CGs land so that he can erect thereon a small barong! barong to be used for the time that works in CGs province. If there is no rental this is a case of commodatum, but if rental is paid, this would be a lease. rticle ";83 (he bailor in commodatum need not be the owner of the thing leased. Cailor )lender* need not be the owner. ReasonE the contract of commodatum does not transfer ownership. ll that is re,uired is that the bailor has the right to use the property which he is lending, and that he be allowed to alienate his right to use. 2ence, in lease for e'ample, a lessee may become a sub!lessor, unless he has been e'pressly prohibited to do so in contract of lease. (ake note of the Mercado vs Aguilar case, wherein #ercado, the occupant of a stall in the Catangas market has allowed guilar to occupy the same gratuitously with the promise of guilar to return it upon demand. guilar claims that #ercado has no right to demand because #ercado, being a mere lessee of the municipality has no right to cede its occupancy in commodatum. 2eldE #ercado had the right to give it in commdatum. If a lessee, by a contract of a sub!lease, may transfer to another the enjoyment of the thing leased for a consideration, there is no reason why he should be unable to cede gratuitously its use. guilar should return the stall. Arti)(e 14#4 6ommodatum is purely personal in character. 6onse,uentlyE ". (he death of either the bailor or bailee e'tinguishes the contract1 $. (he bailee can neither lend nor lease the object of the contract to a third person. 2owever, the members of the baileeGs household may make use of the thing loaned, unless there is a stipulation to the contrary or unless the nature of the thing forbids such use.0 E@ -p(e of the first p r gr ph:

Real )because it is perfected by delivery* Principal )because it can stand alone by itself* .ratuitous )otherwise, the contract is one of lease* Personal in -ature )because of trust*

5h t b i(ee EborrowerF in )o--o! tu- )3uires: 6ommodatum gives the right to the use )jus utendi* and not the rights to the fruits )jus fruendi* otherwise the contract maybe one of usurfruct. Cut of course a stipulation that the bailee may make use of the fruits of the thing loaned is valid. In such a case, however, the right to get the fruits us merely incidental and not the main cause of the contract. Cailor in commodatum )lender* is called /comodatario0 in Spanish, bailee in commodatum )borrower* is termed /comodante0. Sub9e)t - tter of 'o--o! tuIsually, only non! consumable goods may be the object of a commodatum for the thing itself should not be consumed and must be returned, but when a jar of vinegar is given merely for e'hibition the thing itself is not consumed. It is only used /ad ostentationem0. -ote that the vinegar in this case is non!fungible for the same vinegar must be returned. Properties th t - y be the ob9e)t of 'o--o! tu-: ". $. Immovable property #ovable property

>'ample of 6ommodatum involving =andE

loaned to C the formerGs car by way of commodatum. If either dies, the contract is e'tinguished.

or C

". If he devotes the thing to any purpose different from that for which it has been loaned )amounts to bad faith or abuse of generosity considering that commodatum is gratuitous*1 $. If he keeps it longer than the period stipulated or after the accomplishment of the use for which the commodatum has been constituted )guilty of default or mora*1 8. If the thing loaned has been delivered with appraisal of its value, unless there is a stipulation e'empting the bailee from responsibility in case of a fortuitous event )the giving of the value was made to hold the bailee liable for after all this is not a sale and neither is ownerhip transferred*1 4. If he lends or leases the thing to a third person, who is not a member of his household )amounts to violation of its personal character*1 5. If being able to save either the thing borrowed or his own thing, he chose to save the latter )amounts to an act of ingratitude and to a failure to e'ercise due diligence*. /(he bailee does not answer for the deterioration of the thing loaned due only to the use thereof and without his fault0 ) rt. ";48* /(he bailee cannot retain the thing loaned on the ground that the bailor owes him something, even though it maybe by reason of e'penses. 2owever, the bailee has a right of retention for damages mentioned in rticle ";5"0. ) rt. ";44* /%hen there are two or more bailees to whom the thing is loaned in the same contract, they are liable solidarily0. ) rt. ";45* Ob(ig tion of the b i(or: a* /(he bailor cannot demand the return of the thing loaned till after the e'piration of the period stipulated or after the accomplishment

)-oteE If there are two or more borrowers, the death of one does not e'tinguish the commodatum as to the other, unless there is stipulation to the contrary*. E@ -p(e of the 2n! p r gr ph: loaned to C a stereo by way of commodatum. C cannot lend or lease this to a friend. Cut the children of C, his household may use the same unless there is a stipulation to the contrary. Cut said stereo cannot be used as a chair, because the nature of the thing forbids such use. Arti)(e 14&7 stipulation that the bailee may make use of the fruits of the things loaned is valid0

s a rule, the bailee is not entitled to the fruits, otherwise the contract may be one of usufruct. It should be noted that the right to use is distinct from the right to enjoy the fruits, since under the law, fruits should as a rule pertain to the owner of the thing producing the fruits. 2owever, to stipulate that the bailee may make use of the fruits would not destroy the essence of a commodatum for liberality is still the actual cause or consideration of the contract. Ob(ig tions of the b i(ee: a* /(he bailee is obliged to pay for the ordinary e'penses for the use and preservation of the thing loaned.0 ) rt. ";4"* Re son: (he bailee is supposed to return the identical thing, so he is obliged to take care of the thing with the diligence of a good father of a family. b* (he bailee is liable for the loss of the thing, even if it should be through a fortuitous event under the following instancesE ) rt. ";4$*

of the use for which the commodatum has been constituted. 2owever, if in the meantime, he should have urgent need of the thing, he may demand its return or temporary use. In case of temporary use by the bailor, the contract of commodatum is suspended while the thing is in the possession of the bailor0. ) rt. ";49* b* (he bailor may demand the thing at will, and the contractual relation is called a /precarium0, in the following casesE ". If either the duration of the contract nor the use to which the thing loaned should be devoted has been stipulated1 $. If the use of the thing is merely tolerated by the owner ) rt. ";4:* Pre) riu- a special form of commodatum wherein the possession of the borrower is precarious, that is, dependent on the lenderGs will.

c. If he unduly refuses him support when the donee is legally or morally bound to give support to the donor. d* (he bailor shall refund the e'traordinary e'penses during the contract for the preservation of the thing loaned, provided the bailee brings the same to the knowledge of the bailor before incurring them, e'cept when they are so urgent that the reply to the notification cannot be awaited without danger. If the e'traordinary e'penses arise on the occasion of the actual use of the thing by the bailee, even though he acted without fault they shall be borne by both the bailor and bailee, unless there is a stipulation to the contrary. ) rt. ";4;* e* If for the purpose of making use of the thing, the bailee incurs e'penses other than those referred to in rticles ";4" and ";4;, he is not entitled to reimbursement. ) rt. ";5<* f* /(he bailor, who, knowing the flaws of the thing loaned does not inform the bailee of the same, shall be liable to the latter for the damages which he may suffer by reason thereof.0 ) rt. ";5"*

c* /(he bailor may demand the immediate return of the thing, if the bailee commits any act of ingratitude as specified in rt. :950. ) rt. ";43* The groun!s of ingr titu!e un!er Art. 10* Ewhi)h re the s -e groun!s for the re/o) tion of !on tionF: a. If the donee should commit offense against the person, the honor or the property of the donor, or his wife, or children under his parental authority1 b. If the donee imputes to the donor any criminal offense or any act involving moral turpitude, even though he should prove it, unless the crime or the act has been committed against the donee himself, his wife, or children under his authority1

g* /(he bailor cannot e'empt himself from the payment of e'penses or damages by abandoning the thing to the bailee.0 ) rt. ";5$* Re son: (he value of the thing loanedJborrowed might be less than the value of the e'penses or damages. Si-p(e <o n or 6utuu-: Arti)(e 14*# person who receives a loan of money or any other fungible thing ac,uires thereof, and is bound to pay to the creditor an e,ual amount of the same kind an ,uality.

In :-utuu-; the ownership passes to the borrower, but of course, he must pay later.

(ake note of the .rijaldo case )=!$<$4<, @ec. 8", ";95* where .rijaldo who borrowed money from a bank secured by a chattel mortgage in the standing crops on his land, which crops were destroyed by the Dapanese during the war, was still obliged to pay, for his obligation was to pay a generic thing money representing the loan with interest. (he chattel mortgage on the crops simply stood as security for the fulfillment of his obligation and therefore, the loss of the crops did not e'tinguish his obligation to pay, because the account can still be paid from sources other than the mortgaged crops. Arti)(e 14*& contract whereby one person transfers the ownership of non!fungible things to another with the obligation on the part of the latter to give things of the same kind, ,uantity and ,uality is considered a /barter0. )It is not a commodatum nor a mutuum*.

Interest due shall earn legal interest from the time it is judicially demanded, although the obligation may be silent. ) rt. $$"$* +nterest by w y of ! - ges: a* Part of the contract saidE /(he first installment payable in three )8* months shall have no interest.0 Cut the debtor was in default. Should he pay interest for damagesH ,e(!: Bes, not interest for compensation but interest for damages. b* In contracts for the payment of a sum of money, the measure of damages for delay is limited to the interest provided by law. c* If the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest which is now "$M per annum )not anymore 9M per annum*. Repe ( of the Bsury < w: 6entral Cank 6ircular -o. ;<5 has repealed the Isury law. (oday, there is no more ma'imum rate of interest. (he rate will just depend on the mutual agreement of the parties. Interest can now be charged as the lender and borrower may agree upon. 6entral Cank 6ircular -o. 4"9 fi'ing the rate of interest at "$M per annum deals withE loans, forbearance of any money1 goods or credit1 and judgments. In the determination of the interest, if it is payable in kind, its value shall be appraised at the current price of the products or goods at the time and place of payment. ) rt. ";53* (he general rule is that accrued interest )interest due and unpaid* will not bear interest, e'ceptE a* If there is agreement to this effect ) rt. ";5;* or b* If there is judicial demand ) rt. $$"$*

Arti)(e 14** (he obligation of a person who borrows money shall be governed by the provision of rt. "$4; and "$5<. /If what was loaned is a fungible thing other than money, the debtor owes another thing of the same kind, ,uantity and ,uality, even if it should change in value. In case it is impossible to deliver the same kind, its value at the time of the perfection of the loan shall be paid.0 Arti)(e 14*0 -o interest shall be due unless it has been e'pressly stipulated in writing.0 )for the use of the money* Din!s of interest: Interest may be paid either as compensation for the use of the money )monetary interest* or as damages )compensatory interest*. ,ow +nterest Arises: (he right to interest arises only by virtue of a contract or by virtue of damages for delay or failure to pay principal on which interest is demanded. 5hen +nterest E rns +nterest:

(hen, such accrued interest will bear interest at the legal rate, unless a different rate is stipulated. ) rt. ";5;* If the borrower pays interest when there has been no stipulation therefore, the provisions concerning solutio indebiti or natural obligations, shall be applied as the case may be. ) rt. ";9<* If a borrower borrows money and orally agrees to pay legal interest at "<M per annum, there is really no obligation to pay since the interest was not agreed upon in writing. If he nevertheless pays because he considers it his moral obligation to pay said interest, he cannot recover the interest that he has given voluntarily. (his will now be a natural obligation. Cut if no interest was stipulated and by mistake he pays interest, this will be a ,uestion of undue payment or solutio indebiti. 6harging interest in advance is permissible provided said interest does not correspond to interest for more than one year. +? A DE.TOR ,AS PA+D BSBR+OBS +NTEREST% ,O5 6B', 'AN ,E CET .A'D ?RO6 ,+S 'RED+TOR8 ANS: Inder rt. ";9", in case of conflict between the -66 and the Isury =aw, the -66 applies, and therefore, the interest in e'cess of "$M or "4M maybe recovered, with interest. 2owever, in the case of ngel Rose %arehousing vs. 6helda >nterprises, the Supreme 6ourt ruled that the entire interest can be recovered by the debtor for such stipulation is void, )thus, it is as if there is no stipulation as to interest*. &n the other hand, the principal contract of loan by itself is valid, hence, this maybe recovered by the creditor. In case of demand, and if the debtor is in default, said principal debt earns interest from the date of the demand. (he interest is not by way of compensation but by way of damages.

deposit is constituted from the moment a person receives a thing belonging to another, with the obligation of safely keeping it and of returning the same. If the safekeeping of the thing delivered is not the principal purpose of the contract, there is no deposit but some other contract. ) rt. ";9$* contract of deposit, being a real contract, is perfected by delivery but on agreement to constitute a deposit is merely consensual, and is therefore binding upon mere consent. (he principal purpose of a deposit is the safekeeping of the thing delivered, but this does not mean that the depositary can never use. 2e can, in two instancesE a* %ith the e'press permission of the depositor1 b* %hen the preservation of the thing deposited re,uires its use, it must be used but only for that purpose. &f course, if safekeeping is not the principal purpose, there is no deposit but some other contract like one of lease or commodatum. Din!s of !eposits ". Dudicial )se,uestration* when an attachment or sei?ure of property in litigation is ordered. $. >'tra!judicial a* voluntary made by the will of the depositor b* necessary ". made in compliance with a legal obligation1 $. on the occasion of a calamity1 8. made by travelers in hotels or inns1 4. made by travelers with common carrier. ',ARA'TER+ST+'S O? T,E 'ONTRA'T O? DEPOS+T:

DEPOS+T

a* It is a real contract perfected by delivery. -onetheless, there can be consensual contract to make or constitute a deposit1

b* (he principal purpose is the safekeeping of the thing delivered. (hus, if safekeeping is merely secondary, the contract is not a deposit but some other contract like one of lease or commodatum1 c* (he depositary cannot use the thing deposited e'ceptE ". %ith the e'press permission of the depositor1 or $. %hen the preservation of the thing deposited re,uires its use, but then it must be used only for that purpose. d* &nly movable things can be the object of deposit1 e* It is a gratuitous contract, e'cept when there is an agreement to the contrary or unless the depositary is engaged in the business of storing goods1 f* (he contract is neither unilateral or bilateral according to whether it is gratuitous or compensated )onerous*. Deposit !istinguishe! fro- S (e n! . rter: ". In deposit, ownership is not transferred but in S 7 C, ownership is transferred upon delivery1 $. ItGs a real contract, while S 7 C are consensual )perfected by mere consent*1 8. .enerally gratuitous, while S 7 C always onerous. Deposit !istinguishe! fro- 'o--o! tu-: ". It may be gratuitous, while the second is essentially and always gratuitous. $. Principal purpose is safekeeping, while the second, the principal purpose is use. Deposit !istinguishe! fro- Agen)y: ". In deposit, the purpose is safekeeping, while in agency, the purpose is the representation by the agent of the principalGs affairs1 $. (he custody of the things is the principal and essential reason for deposit, while the custody of the things is merely an incidental or accessory obligation of the agent1

8. ItGs generally gratuitous, while agency is generally onerous or for a compensation. so!called deposit of an advance payment in the case of a sale is not the deposit contemplated by law. It is advance payment and ownership is transferred to the seller once given. / n agreement to constitute a deposit is binding, but the deposit itself is not perfected until the delivery of the thing.0 ) rt. ";98* / deposit may be constituted judicially or e'tra!judicially.0 ) rt. ";94* Distin)tions between e@tr -9u!i)i ( !eposit n! 9u!i)i ( !eposit: a* In >D@, the origin is the will of the parties, while D@, itGs the will of the court1 b* In >D@, the status is that thereGs a contract, while in D@, thereGs no contract1 c* In >D@, the purpose is the custody and safekeeping of the thing for the benefit of the depositor, while in D@, it is to guarantee the right of the plaintiff in case of a favorable judgment1 d* In >D@, the cause is gratuitous as a rule, while in D@, itGs onerous1 e* In >D@, the subject matter is always a movable property, while in D@, itGs either movable or immovable property, but generally immovable1 f* In >D@, itGs always in behalf of the depositor, while in D@, itGs in behalf of the winner. Cener ((y% !eposit is gr tuitous. E@)eptions: EArt. 140*F ". %hen there is a contrary agreement. $. %hen its depositary is engaged in the business of storing goods. Din!s of E@tr -=u!i)i ( Deposit EE=DF: a* Aoluntary as when there is mutual consent1 b* -ecessary when there is a deposit because of a calamity )depositum miserable*

Io(unt ry !eposit is that wherein the delivery of the object is made by the will of the depositor. ) rt. ";93* deposit may also be made by two or more persons each of whom believes himself entitled to the thing deposited with a third person, who shall deliver it in a proper case to the one to whom it belongs. ) rt. ";93* (he depositor need not be the owner as a matter of fact, the law provides /that the depositary cannot demand that the depositor prove his ownership of the thing deposited.0 fter all, a depositor does not transfer ownership over the subject matter. ?or- of )ontr )t of !eposit " EArt. 1404F &ral %ritten.

a.* the safekeeping and b.* the return of the ring, when re,uired The !uty of s fe$eeping: a.* If the contract does not state the diligence which is to be observed in the performance, that of a good father of a family shall be re,uired1 b.* (he depositary is responsible if the loss occurs through his fault, but as a rule not if the loss is through a fortuitous event. Effe)t if !eposit is gr tuitious or onerous " #ore care is re,uired if the deposit is for a compensation than if it is gratuitous. Cut even if gratuitous, care must still be e'ercised. In case of non!fault on the depository, the depositor!owner bears the loss because of the ma'im /res perit domino0. guardian is not the depositary of the wardGs properties )Phil. (rust 6o. As. Callestero, =3$9", pril, ";59* Arti)(e 141# Inless there is a stipulation to the contrary, the depositary cannot deposit the thing with a third person. If deposit with a third person is allowed, the depositary is liable for the loss if he deposited the thing with a person who is manifestly careless on unfit. (he depository is responsible for the negligence of his employee0. REASON : (he depositary is as a rule not allowed to deposit with a third person because a deposit is founded on the fact that the depositor has precisely chosen a particular depository by virtue of the latterGs ,ualification and because of the trust and confidence reposed on him by the depositor. (he depositary may change the way of the deposit if under the circumstances he may reasonably presume that the depositor would consent to the change if he knew of the facts of the situation. 2owever, before the depositary may make such change, he shall notify the depositor thereof

In either case, however, there must be a delivery. Ru(e when !epositor is in) p )it te! " EArt. 1417F /If a person having capacity to contract accepts a deposit made by one who is incapacitated, the former shall be the subject to all the obligations of a depositary, and maybe compelled to return the thing by the guardian, or administrator of the person who made the deposit, or by latter himself if he could ac,uire capacity.0 Ru(e if !epository is in) p )it te! " EArt. 1411F If the deposit has been made by a capacitated person with another who is not the depositor shall only have an action to recover the thing deposited while it is still in the possession of the depositary, or to compel the latter to pay him the amount by which he may have enriched or benefited himself with the thing or its price. 2owever, if a third person who ac,uired the thing acted in bad faith, the depositor may bring an action against him for its recovery. The two prin)ip ( ob(ig tions of the !eposit ry:

Arti)(e. 141&.

and wait for his decision, unless delay would cause danger. )n* (he depositary holding certificates, bonds, securities or instruments which earn interest is duty bound to collect not only the interest on intangible properties, when due, but also the capital itself, and to whatever may have been received or collected, to the depositor. -aturally, this would not be the case should there be a contrary agreement ) rt.";:5, "st par.*

)conversion into rice* has been fulfilled, the rice continued to be a deposit in the possession of the thresher for them to return to the owner upon demand. )@elgado vs. Connevie and rande', $8 Phils. 8<3* 5,EN DEPOS+T +S REA<<Y A <OAN: ". %here money, consisting of coins of legal tender, is deposited with a person, and the latter is authori?ed by the depositor to use and dispose of the same, the agreement thus entered between the depositor and the depository is not a contract of deposit but a loan )=evellena vs. =ion, et.al, )"" Phils "4"*1

(his above particular provision does not apply to contracts for the rent of safety deposit bo'es. ) rt. ";:5, $nd par.* (he reason for this is that here the renter of the bo' is supposed to have control over the bo' and contents thereof, and the real owner of said bo'es should therefore not have the duty imposed in the first par. s matter of fact, this is really a lease of a thing )the bo'* and not a contract of deposit. Arti)(e 1410. Inless there is a stipulation to the contrary, the depositary may commingle grain or other articles of the same kind and ,uality, in which case the various depositors shall own or have a proportionate interest in the mass.

$. >vidence showing that interest has been offered as compensation for the use of money deposited leads one to the conclusion that the contract, although denominated by the parties as deposit is really one of loan. )6& griela vs. -epomuceno, 55 Phils. $38* 'AN T,E R+C,T TO DE6AND T,E RETBRN O? T,E T,+NC DEPOS+TED PRES'R+.ED8 ANS: (hings received on deposit do not prescribed for the depositary cannot claim that ownership of the thing deposited was transferred to him, but simply the custody thereof. (he possession of a depositary as such, is not adverse to that of the depositor. Possession in order to ripen into prescription, must among other things be in the concept of an owner, public, peaceful and uninterrupted. dverse possession, can of course, give rise to prescription.

Arti)(e. 1411. (he depositary cannot make use of the thing deposited without the e'press permission of the depositor. &therwise, he shall be liable for damages. 2owever, when the preservation of the thing deposited re,uires its use, it must be used but only for that purpose. Arti)(e.1412. %hen the depositary has permission to use the thing deposited, the contract loses the concept of a deposit and becomes a loan or commodatum, e'cept where safekeeping is still the principal purpose of the contract. (he permission shall not be presumed, and its e'istence must be proved. Palay was deposited so that it would be threshed into rice. Is this a deposit or a hire of servicesH nswerE %hile deposit of palay was converted into a hire of services, yet, after the object of the hiring

Art. 1414. (he depositary is liable for the loss of the thing through a fortuitous eventE

)"* If it is so stipulated1 )$* If he uses the thing without the depositorNs permission1 )8* If he delays its return1 )4* If he allows others to use it, even though he himself may have been authori?ed to use the same. bank can compensate a debtorGs debt with a debtorGs deposit because insofar as the deposit is concerned, the relationship between them is that of a debtor and creditor not depositary and depositor0. ).ullas vs. P-C, 9$ Phils. 9";* depositor is disputably presumed to be the owner of the funds standing in his name in a bank deposit.0 )+ultun Iron %orks case 55 Phils. $<3* 6urrent and savings deposits are loans to bank because it can use the same. post dated check cannot be regarded as a check. bank cannot therefore deduct from a clientGs checking )current* amount postdated checks which have been issued by the depositor at least not until the date indicated on the check )&ng Sip vs. PC(6, .R. -o. $:8$3* Cecause the P-C has a charter of its own, it is not an ordinary corporation, and is not therefore governed by the 6orporation =aw. (hus, a stockholder cannot inspect its books, otherwise its charter would be violated. &nly the 6entral Cank can inspect0 ).on?ales vs. P-C, .R. O 888$<, #ay 8<, ";38* (he recovery of time deposits from a distressed bank as well as damages should be in the R(6 in an ordinary action, not a petition for mandamus and prohibition. Cank deposits are really loans, and failure to return the same is failure to pay an obligation as a debtor, not a breach of trust for there is no trust, constructive or otherwise. (he depositorGs remedy is to file his claim in the li,uidation proceeding of the bank.0 )Serrano vs. 6entral Cank, =!8<5:", +eb. "4, ";3<, ;9 S6R ;9*

Canks are not re,uired to pay interest on deposit for the period during which they are not allowed to operate by the 6entral Cank. (his is demanded by fairness. 2owever, interest that had accrued prior to the suspension should be paid by the bank for after all, it had made use then of the money deposited. )(he &versees Cank of #anila vs. 6 , =!4;898, Dune "",";3"* Arti)(e. 1421. %hen the thing deposited is delivered closed and sealed, the depositary must return it in the same condition, and he shall be liable for damages should the seal or lock be broken through his fault. +ault on the part of the depositary is presumed, unless there is proof to the contrary. s regards the value of the thing deposited, the statement of the depositor shall be accepted, when the forcible opening is imputable to the depositary, should there be no proof to the contrary. 2owever, the courts may pass upon the credibility of the depositor with respect to the value claimed by him. %hen the seal or lock is broken, with or without the depositaryNs fault, he shall keep the secret of the deposit. Arti)(e1422. %hen it becomes necessary to open a locked bo' or receptacle, the depositary is presumed authori?ed to do so, if the key has been delivered to him1 or when the instructions of the depositor as regards the deposit cannot be e'ecuted without opening the bo' or receptacle. )n* Arti)(e 142#. (he thing deposited shall be returned with all its products, accessories and accessions. Should the deposit consist of money, the provisions relative to agents in article "3;9 shall be applied to the depositary. Arti)(e 1240. (he agent owes interest on the sums he has applied to his own use from the day on which he did so, and on those which he still owes after the e'tinguishment of the agency.

Arti)(e 142&. (he depositary cannot demand that the depositor prove his ownership of the thing deposited. -evertheless, 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 the period of one month, the depositary shall be relieved of all responsibility by returning the thing deposited to the depositor. If the depositary has reasonable grounds to believe that the thing has not been lawfully ac,uired by the depositor, the former may return the same. Arti)(e 142*. %hen there are two or more depositors, if they are not solidary, and the thing admits of division, each one cannot demand more than his share. %hen there is solidarity or the thing does not admit of division, the provisions of rticles "$"$ and "$"4 shall govern. 2owever, if there is a stipulation that the thing should be returned to one of the depositors, the depositary shall return it only to the person designated. Arti)(e 1420. If the depositor should lose his capacity to contract after having made the deposit, the thing cannot be returned e'cept to the persons who may have the administration of his property and rights. Arti)(e 1421 If at the time the deposit was made a place was designated for the return of the thing, the depositary must take the thing deposited to such place1 but the e'penses for transportation shall be borne by the depositor. If no place has been designated for the return, it shall be made where the thing deposited may be, even if it should not be the same place where the deposit was made, provided that there was no malice on the part of the depositary. Arti)(e. 1422. (he thing deposited must be returned to the depositor upon demand, even though a specified period or time for such return may have been fi'ed.

(his provision shall not apply when the thing is judicially attached while in the depositaryNs possession, or should he have been notified of the opposition of a third person to the return or the removal of the thing deposited. In these cases, the depositary must immediately inform the depositor of the attachment or opposition Arti)(e 1424. Inless the deposit is for a valuable consideration, the depositary who may have justifiable reasons for not keeping the thing deposited may, even before the time designated, return it to the depositor1 and if the latter should refuse to receive it, the depositary may secure its consignation from the court. )"::9a* Arti)(e 1447. If the depositary by force majeure or government order loses the thing and receives money or another thing in its place, he shall deliver the sum or other thing to the depositor. Arti)(e 1441 (he depositorNs heir who in good faith may have sold the thing which he did not know was deposited, shall only be bound to return the price he may have received or to assign his right of action against the buyer in case the price has not been paid him.

O.<+CAT+ONS O? T,E DEPOS+TOR

Arti)(e.1442 If the deposit is gratuitous, the depositor is obliged to reimburse the depositary for the e'penses he may have incurred for the preservation of the thing deposited. Arti)(e 144#. (he depositor shall reimburse the depositary for any loss arising from the character of the thing deposited, unless at the time of the constitution of the deposit the former was not aware of, or was not e'pected to know the dangerous character of the thing, or unless he notified the depositary of the same, or the latter was aware of it without advice from the depositor.

Arti)(e 144&. (he depositary may retain the thing in pledge until the full payment of what may be due him by reason of the deposit. )":3<*

>'ample of necessary deposit made in compliance with a legal obligationE borrowed $<,<<< from C and as a security thereof, pledged his role' watch. If C uses the said watch without authority of , may ask that the watch be judicially or e'tra judicially deposited. &ther e'amples of necessary deposit in compliance with a legal obligationE ". 6ash deposits to be made by certain officers and officials1 $. @eposits to be made by those who desire to use firearms. >'ample of necessary deposit under par. $E In a fire, +elicity saves InaGs car. +elicity is in possession of the car and she is supposed to be its depositary. A TRAIE<<ER SPENT A N+C,T +N A ,OTE<. A ,OTE< SERIANT 6A<+'+OBS<Y DESTROYED T,E 'E<<B<AR P,ONE O? T,E TRAIE<<ER. +S T,E ,OTE<-DEEPER <+A.<E8 ANS: Bes, provided that he had previously been informed about it and provided further that the traveller followed any precaution that may have been given by the hotel!keeper or his substitutes regarding its care and vigilance of said property. +or purposes of necessary deposits, the word /guests0 and /travellers0 are synonymous. (he liability of the hotel or innkeeper commences as soon as there is an evident intention on the part of the travellers to avail himself of the accommodation of the hotel or inn. It does not matter whether compensation has already been paid or not, or whether guest has already partaken of the food and drink or not. 2e is liable for the vehicles, animals and articles which have been introduced or placed in the anne'es of the hotel. ) rt. ";;;*

Arti)(e 144*.

deposit its e'tinguishedE )"* Ipon the loss or destruction of the thing deposited1 )$* In case of a gratuitous deposit, upon the death of either the depositor or the depositary. )n*

(he above enumeration is not e'clusive there are other grounds, namelyE "* >'piration of the term $* @emand at will of the depositor 8* (ermination of the purpose of the deposit 4* +ulfilment of the resolutory condition 5* #utual withdrawal from the contract.

Art.i)(e 1440.

deposit is necessaryE )"* %hen it is made in compliance with a legal obligation1 )$* %hen it takes place on the occasion of any calamity, such as fire, storm, flood, pillage, shipwreck, or other similar events01 otherwise termed as depositor miserables.0

Two other $in!s of ne)ess ry !eposits a* (hat made by travellers in hotels or inns1 b* (hat made with common

It shall include the loss of, or injury to the personal property of the guests caused by the servants or employees of the keepers as well as strangers but not that which may proceed from any force majeure. ) rt. $<<<* (he act of a thief or robber, who has entered the hotel is not deemed force majeure, unless it is done with the use of arms or through an irresistible force. ) rt. $<<"* Cut he )hotel!keeper* is not liable for compensation if the loss is due to the acts of the guest, his family, servants or visitors, or if the loss arises from the character of the things brought into the hotel. ) rt. $<<$* +? A 5AS A CBEST +N .HS ,OTE<. '% A DRBNDARD% ENTERED T,E ,OTE< AND DESTROYED ,+S PERSONA< .E<ONC+NCS DESP+TE T,E ?A'T T,AT A ,AD .EEN C+IEN PROPER NOT+'E AND ,AD ?O<<O5ED A<< PRE'ABT+ONS. +S . <+A.<E8 ANS: Bes. (his is an act of stranger, not considered a force majeure. (he management should have been taken the necessary steps to prevent the occurrence of things like this. 2e cannot free himself from responsibility by posting notices to the effect that he is not liable for the articles brought by the guest. ny stipulation to this effect )between him and the guests* shall be void. ) rt. $<<8* 2e keeper has a right to retain the things brought into the hotel by the guest, as a security for credits on account of lodging, and supplies usually furnished to hotel guests. ) rt. $<<4* (his right of retention is given to compensate the innkeeper for the e'tra ordinary liabilities imposed upon him by the law. It does not e'ists when the debtor is not a guest of the hotel. se,uestration or judicial deposit takes place when an attachment or sei?ure of property in litigation is ordered.) rt. $<<5* #ovables or immovables may be the subjects of se,uestration.

(he depositary of property or objects se,uestrated cannot be relieved of his responsibility until the controversy which gave rise thereto has come to an end, unless the court so orders. ) rt. $<<:*

GUIRITAN NOTES
A COMPILATION OF NOTES IN PARTNERSHIP, SALES, AGENCY, CREDIT TRANSACTIONS AND PROPERTY

FELIXBERTO L. GUIRITAN, NPS-VI

CITY PROSECUTOR DEPUTIZED OMBUDSMAN PROSECUTOR Butuan City