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Civil Law

Bar 2011 Notes

Roland Glenn T. Tuazon

Ateneo de Manila University

TABLE OF CONTENTS:
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number of days, not fact of publication.


What is required to be published?
o The entire text of the law.
What is the interpretation of the term law?
o It can be executive issuances, regulations, et. al., and not just
requires public interest.
Can a law affect just one person?
o Yes, for instance, declarations of citizenship. It still has to be
published. Same rule applies, even if only one locality is

affected
Read Tanada v. Tuvera.
o It is not whether you read the publication or not. It not whether
you understand the law or not. As long as there is opportunity

to read it, there is compliance with publication requirements.


Garcillano v. House:
o The rules of procedure for legislative inquiries of Senate must
be published in accordance to Art. 2 of the Civil Code, as

PRELIMINARY TITLE

mandated by the constitution (duly published).


SEC v. GMA Network:
o A memorandum circular regulating filing fees for submission of
articles of incorporation or extension of corporate life must be
published because it regulates public rights at large.

Publication

mandatory is fact of publication.


Can the law provide that there is no need for publication?
o No. The phrase unless otherwise provided only refers to the

republic acts, as long as it affects the public in general and it

PRELIMINARY TITLE
PERSONS AND FAMILY RELATIONS
PROPERTY
SUCCESSION
OBLIGATIONS AND CONTRACTS
LAND TITLES
PRESCRIPTION
CREDIT TRANSACTIONS
SALES
PARTNERSHIP
AGENCY
COMPROMISE
LEASE
TORTS AND DAMAGES

No. It can be some other time period, less or more. What is

Mistake of fact v. mistake of law

When do laws become effective?


o 15 days after publication in OG or newspaper of general
circulation (EO 200), unless otherwise provided
Is 15 days mandatory?

Mistake of fact can be a ground for vitiation of consent. But mistake of

law is not a defense for vitiated consent.


Specific instances where a mistake of law can have some effect?

1. Good faith defense must show that it is a difficult provision

Three types of termination of laws

of law to interpret, and this gave rise to mistake (Art. 526).

BUT this only gives rise to mitigation of liability, not complete


o

excuse there from.


2. Mistake of payment or solutio indebiti

the law is repealed, or a new law that is irreconcilable with the old law.

Prospectivity of laws

General rule: laws are prospective in nature.


When did the Family Code take effect?
o August 3, 1988
When did the Civil Code take effect?
o August 30, 1950
Exceptions to non-retroactivity?
o Regardless of what kind of law, it MUST have a retroactivity
o
o
o
o

clause. (IMPT)
1. Procedural laws
2. Curative laws
3. Tax laws
4. Penal laws which benefit the accused (who is not a habitual

number 3 repeals law 1.


(2) When does a law lapse?
o When the law itself provides for its own lifespan. There is no

need for a further statute to give effect to its lapse.


(3) Unconstitutionality declared by courts. How does this differ?
o When the court declares that a law is unconstitutional, it is null
and void from the beginning. Exception: operative fact, which
is based on equity.

offender)
o 5. Substantive laws that do not impair vested rights
o 6. Interpretative laws
Liam Law v. Olympic Sawmill:
o Ineffectivity of usury law should retroact as to change the Rules

Judicial decisions

Considered as part of the law of the land. Stare decisis, however, only

applies to SC decisions.
It does not, however, become a law per se no need to publish.
De Roy v. CA:
o Judicial decisions need not be published first in the OG before
becoming effective and binding jurisprudence. A lawyer must

What is the general rule?


o Rights may be waived
What are the exceptions?
o 1. Waiver against public policy, public order, good customs,
o

be a specific provision reviving it.


If law number 2 is a case of implied repeal, then law number 1
is revived unless law number 3 is likewise incompatible or law

Waiver of rights

Implied repeal is not favored.


What happens if the repealing law is itself repealed?
o It depends on law number 2. If law number 2 is a case of
express repeal, then law number 1 is not revived. There must

of Court as to this matter.

Effectivity of laws is a shared legislative and judicial function.


(1) Repeal: Requires another law passed by Congress declaring that

keep abreast with judicial decisions.


Computation of period of laws

morals, or law
2. Prejudicial to third persons with right recognized by law

Ordinary contracts: you can define your terms any way you want

(example, a year can be 300 days) For laws, however, a year is 365

days.
o UNLESS, one specifically names the year
First day excluded, last day included.
For contracts, it does not matter if the last day falls on a weekend.

Contrast with Rules of Court, where it adjusts to the next business day.

o
o
WILLS
o
o

Principle of nationality

What are the things covered by the principle of nationality?


o Family rights and duties,
o status and condition, (ex. legitimacy, whether marriage is valid)
o Legal capacity
Wherever a Filipino citizen is, Philippine law governs the three realms

above.
When there is an alien within our country, we still apply their national

Legal capacity nationality

Except: contracts referring to properties, which is


governed by lex situs
Extrinsic validity lex loci celebrationis
Intrinsic validity there is freedom to stipulate governing law
Legal capacity national law of decedent, not successor
Extrinsic validity lex loci celebrationis

Aliens choices national law, domicile, Philippine

for probate in the Philippines; we dont care otherwise


o Intrinsic validity national law of the decedent
PROPERTIES
o Lex rei sitae (where found)

Ex. so controversy between whether a British


decedent spouse can dispose of the entirety of

laws as regards family rights and duties, status and condition, and legal

property in the Philippines, where British law is

capacity.
Nationality also governs successional rights of the decedent

For purposes of legal capacity, when will the principle of

unclear, it is presumed it is the same as Philippine


law. Philippine law governs because the property is
found here. Our law says that he can only dispose

nationality not apply?


o Marriages lex loci celebrationis but only as to authority of

law, lex loci celebrationis


NOTE: for aliens wills, these refer to wills presented

solemnizing officer, marriage license, marriage ceremony

General rule: still governed by nationality (IMPT)


Contracts involving real or personal properties lex situs

Exception: when reason of acquisition of the thing is

of his share in the property.


Exceptions:

1) successional rights are governed by the national


law of the decedent

Order of succession, amount of successional


rights, intrinsic validity of testamentary

succession: nationality of the decedent governs


o For the formal validity of wills lex loci celebrationis
3 things to determine:
o What law governs legal capacity
o What law governs extrinsic validity
o What law governs intrinsic validity
CONTRACTS

provisions, capacity to succeed


2) property relations between spouses governed by

the marriage settlement entered into prior to marriage


When does renvoi usually apply?
o This usually applies when an alien dies in the Philippines.
Basing this on general principle, basing it on the law of

nationality of decedent. If based on national law of decedent, it

refers back to the law of the domicile (which is the Philippines),

other terminated employees for unpaid liabilities (which is offset

then we accept the renvoi and apply Philippine law


Llorente v. CA:
o A married Filipino man joined the US army and became a US

by gratuities later) and then suddenly went legal on another


employee for no apparent reason was not acting with justice,

citizen. He divorced his wife after his wife cheated on him.


he could initiate divorce.
What does Article 17 say about prohibitive laws?
o Prohibitive laws here concerning persons, acts, property, or

laws which have for their object public order, public policy, or
good customs are not rendered ineffective by laws, judgments,
o

honesty, good faith.


Leads to civil liability even if perfectly legal.
Requisites for Art. 19?
1. There is legal right or duty
2. Exercised in BF
3. With intent to prejudice another
What is the difference between Art 20 and 21?
NOTE: Articles 20 and 21 are implementing
o
o

The divorce was valid because under American national laws,

provisions of Art. 19. So Art. 19 is the general

or conventions abroad.
EXCEPTION?

Art. 26(2), where an alien obtains divorce abroad

principle, and 20 (general sanction) and 21 (acts

allowing him to remarry, his Filipino spouse gains

contra bonus mores) are the specifics.


Article 20 has to be contrary to law. Article 21 is legal, but

contrary to morals, public policy, or customs.


Article 20, the act is either done willfully or negligently as

capacity to remarry as well.


Human relations

long as contrary to law. Article 21, intentional.


In a case, an example of Art. 21 is a wife who left her

Pardo de Tavera case human relations chapter are just general

husband, went abroad, got a divorce, and remarried.

concepts guiding particular human conduct. In the absence of any


specific law or contract, then you use these provisions. You cannot
contract.
Chato v. Fortune Tobacco Corp:
o In order for Art. 32 to apply, where a private individual can hold

you have to comply with the promise to marry?


o No. You cannot demand for specific performance that the

a public officer personally liable of an act or omission only if

It is against morals, good customs, or public policy.


Requisites of Art. 21?
1. Legal act
2. But contrary to morals, GC, PP, PO, or law
3. With intent to prejudice another
Article 21 breach of promise to marry. Is there any law that says
o

immediately use these provisions, if there is a specific governing law or

Lorente v. Sandiganbayan: An official who cleared three

there is a particular injury to that person.


Duty to act with justice, observe honesty, and good faith:
o Every person in the exercise of his rights and in the

other marry you.


But you can recover actual damages for expenses, such as

performance of his duties must act with justice, give everyone

down-payment for venue, dress, food, etc. But not moral

his due, and observe honesty and good faith.

damages, in general.

Exception: moral damages when there is deceit or fraud.

4.

(Baksh case)
There was breach of promise to marry. The teacher became

Public officers

pregnant, and was dismissed from her job because she got

pregnant without a husband. Can she recover from the man loss
of income?
o Yes (old case).
o But now, you cannot be dismissed for this anymore, so its

moot.
Who is liable for hospital expenses?
o Shared expenses, since it takes two to get pregnant.
When are moral damages allowed?
o Criminal or moral seduction.

return salaries received. This is a case where social justice

c.

outweighs unjust enrichment provisions.


Accion in rem verso Art. 22. Requisites?
i. 1. Defendant enriched
ii. 2. Plaintiff suffered loss
iii. 3. Unjust enrichment of defendant without just/legal

ground
4. Plaintiff has no other action based on K, quasi-K,

crime, or quasi-delict
What is the difference between Art. 22 and solutio
indebiti?
i. In solution, mistake is an essential element. In accion

2.
3.

and being unfair


What actions can you file against public officers?
o Action for nonfeasance
But this action cannot be brought against those
Deeds
Violation of basic rights
Policemen failure to come to the aid of persons in danger

Civil liability in criminal prosecutions

the reinstatement is reversed, the employee is not bound to

iv.

specific provisions.
Can a public officer invoke acting in public capacity as a defense?
o Aberca v. Ver
o No. Your official function does not include acting with injustice

o
o

Unjust enrichment
a. Garcia v. PAL: If a dismissed employee is reinstated, and then

b.

Articles 19-21 bind even public officers. Take note. Though there are

officers exercising ministerial functions, ex. Register of

Provisions Dean Del just breezed through:


1.

Violation of privacy

Civil liability is always included


There is a distinction between being acquitted
o For reasonable doubt: there is still civil liability
o Because one did not commit the crime: no civil liability
General rule: civil case is simultaneously filed along with criminal case.
Criminal case suspends separate civil action.
Independent civil actions
o NOT suspended upon filing criminal case.
o When a civil case is filed ahead, it proceeds independently and
o

in rem verso, it is not.


Less in life = more in law
Thoughtless extravagance

need not wait for resolution of the criminal case.


Assuming the criminal case is instituted ahead, the civil case

can still be prosecuted separately.


Prejudicial questions:

Opposite suspend criminal case, and wait for civil case to be

resolved first, which is determinative of guilt or innocence of


o

other, as to who died first, whoever alleges the death must prove it
o PRESUMPTION: died at the same time, so no transmission of

accused in the criminal case.


Questions on annulment or nullity of marriage are NOT

prejudicial questions for bigamy. Because now, before you get


marriage.
Classic case: ownership of property v. crime of theft.
Ching civil case was for annulment of K, and criminal case is
for violation of trust receipts law. HELD: not considered as
prejudicial question because the criminal case can still
proceed, because the act can be considered as ordinary
estafa.

Juridical persons

Persons

Natural persons

Juridical
o
o
o

capacity
Passive subject the ability to be the subject of legal relations
UPON BIRTH
Exceptions: unborn fetus

(A) Beneficial

Ex. donation

(B) subsequent birth

So aborted fetus is not counted because it

Restrictions and limitations

Mere restrictions, which do not exempt the person from certain

obligations:
o Minority,
o insanity and imbecility,
o deaf-mutism,
o prodigality,
o civil interdiction
o [For juridical persons this is the issue of ultra vires acts]
Modifications, which affect a person depending on the type of

Birth

7 months + = just born alive

Less than 7 months = survive for 24 hours


Capacity to Act
o 18 years old, in general

Although you cannot marry without consent of parents


End of judicial capacity AND capacity to act = upon death of person
o

Birth and death: from when created by law or for ordinary corporations,
upon registration/dissolution

wasnt born alive

rights
CONTRA rule in Remedial Law/Evidence: Survivorship for those
who died due to calamity, wreck, battle, or conflagration
o Follow what rule?

Strength and age of the sexes


o For what purpose can this be used?

ANY purpose except succession


o Allowed for:

Insurance
o Survivorship agreements

married, you need a judicial declaration of nullity for the prior


o
o

Doubt as to who between two or more persons called to succeed each

transaction, who one is dealing with:


o Age (because it is not minority per se), etc. (See Art. 39)
o Ex. foreigners ownership of land
Domicile

* Very little relevance in civil law now, but usually just for elections, etc.
Domicile place of habitual residence; based on intention and actual

connection
Residency based on actual facts
Domicile is acquired from moment of birth
o Legitimate child domicile of parents (correct the reviewer)
o Illegitimate of mother
o Legitimated of parents
o Foundling wherever found
One never loses a domicile under a new one is acquired.
It is possible to be without residence, but one always has a domicile
Domicile of juridical person
o Provided in charter
o If none, place of business or place of legal representation

o
o

MARRIAGE

change of sex in registry


4. In accordance with law
5. Purpose: establish conjugal and family rights

Effect of absence or defect:


o Essential:

Lack/absence void

Defect voidable
o Formal:

Lack/absence void

Irregularity still valid, but the person responsible is


liable

Took effect 3 August 1988


o Does not change the regime of property relations of those who
o

the marriage was never deemed to have existed


3. Between man and woman

Note: P v. Silverio and other spec pro cases on

Essential and formal requirements of marriage:

PERSONS AND FAMILY RELATIONS

2. Permanent union

Only terminated by death

Grounds for voiding or avoiding a marriage: because

What are the essential and formal requisites of marriage?

got married prior to the FC


But those who selected CPG, they are affected by the new

provisions as to this property relation, post 3 Aug 1988


Definition of marriage (elements)
o 1. Special contract

Compare and contrast marriage from ordinary

contracts?
As a general rule, ordinary contracts are subject to

Essential requirements:
o 1. Legal capacity

A) Age

Under 18: void

18 to under 21: need parental consent


o Without: voidable
o Whose consent is required?
Ideally, both. But one is allowed to

parties stipulations, as long as not against law, PP,

decide, if one is absent, has passed

morals. But marriage contract is governed by law,

away, lost capacity, etc. Ignore the

and is only subject to stipulation for regime of property

provision on legal guardians here,

relations at the moment of marriage.

because upon turning 18, then he

already has legal capacity.


21 to under 25: need parental advice
o Without: issuance of ML is delayed

when does it not? Will NOT apply for mistakes of


law, such as if you thought one designation of people
(ex. president or senator) can solemnize a marriage,

for three months

when in fact he cannot. It applies to mistakes of fact.

B) Sex
C) Absence of legal impediments: (see full discussion
below)

(ex. you thought the janitor posing as a priest was the


parish priest.) Also, even if only one party believed in
good faith that the solemnizing officer had authority,

37. Incestuous relationships


38. Relationships against PP
35. Prior existing marriage
36. Psychological incapacity
52, 53. Failed to comply with distribution of

properties and presumptive legitimes


Is there such a thing as defective legal capacity?

the marriage solemnized.


2. Valid marriage license

A party thinks that the marriage license is valid,


when it is not. Can the rule on good faith apply?
No. There is no good faith exemption for marriage
license. The exceptions provided by the FC are not

celebration of marriage
Do you have to speak out your consent? No need

to verbally explicate it; as long as you can


solemnizing officer
Is there such a thing as defective consent? Yes,

when it is vitiated. Ex. when one is of unsound mind.


the voluntariness.
Is it possible for a party not to give consent at all?
o

No. Ex. mistake in identity there is total absence of

void.
Examples of defects in marriage license:

1. Not applied for in the proper place

2. Just signed by the employee of the LCR,


although acting with authority of the LCR (if

A person actually said yes, but there was problem in

based on GF, but on law.


Aranes v. Occiano: A ML gotten after a marriage
without an ML does not cure the lack thereof. It is still

communicate your consent effectively to the

the marriage is valid.


If the solemnizing officer committed fraud or an
irregularity in obtaining authority, it has no validity in

No, its either you have it or not.


2. Consent freely given

Before a solemnizing officer, at the time of the

When does the good faith exemption apply, and

consent.
Formal requirements:
o 1. Authority of solemnizing officer

no authority, void ML)

3. 10 day posting of ML not complied with


3. Marriage ceremony

There is no particular requirement for the ceremony,

except for:
1. Both must personally appear before the
solemnizing officer

2. Must openly declare that they take each other as

husband and wife


3. Two witnesses of legal age

In the absence of two witnesses, what is

judges outside judicial regions? As of now, it is a


mere irregularity, according to the SC. This rule is
different as opposed to ship captains, etc. (Navarro

the effect? Is it an absence or an


irregularity? No resolution yet.

Other requirements:
o 1. Marriage certificate

What is this? The document signed after marriage

According to Dean Del, the SC rule on judges must


not extend to mayors they must strictly comply with

marriage. This is neither a formal or essential

requisite. It is merely evidentiary, although the best


evidence.
What is the difference between a ML and a MC?

their territorial jurisdiction.


Legal impediments (in depth)
o A) Incestuous relationships:

1. Ascendants and descendants, regardless of degree

How many degrees does this rule cover?

The absence of a ML results in a void marriage. The


o

absence of a MC will not affect the marriage.


2. Place of celebration

What about article 8? It is merely directory. If the

solemnizing officer agrees to marry you in another

Unlimited.

2. Brothers and sisters, whether full or half blood


B) Marriages against public policy

By blood:

1. Between collateral blood relative, up to fourth civil


degree (whether legitimate or illegitimate)

NOTE: no prohibition for collateral relatives

place, then it is perfectly fine.


Is there any instance where the place of the

by half-blood
Created by marriage:
2. Between step-parents and step-children

NOTE: no prohibition for step-brother and

step-sister
3. Between parent-in-law and children-in-law

If your wife dies, can you now marry your

celebration of marriage affects the marriage? Yes,


for those marriages celebrated by persons with limited
jurisdiction. For instance, the ship captain or airplane
captain can only solemnize the marriage in the vessel
or during a stopover. For instance, for military
commanders, it must be within the zone of military

v. Domagtoy)
Can this decision apply to mayors? For instance,
the mayor of Makati solemnized a marriage in QC.

ceremony. It is the evidence of the celebration of

What is the effect of marriages celebrated by

operations.
What about members of the judiciary? Within their

parent in law? No. Not even death


terminates this relationship. Not unless you

judicial region. If it is SC, CA, or Sandiganbayan, it is

terminate your marriage first through court

nationwide.

declaration that the marriage was not valid in


the first place.

Created by adoptive relationship:


4. Adopter and adopted
5. SS of the adopter and adopted
6. Adopter and SS of adopted
7. Legitimate child of adopter and adopted

NOTE: the reason is because legitimate

marriage is a nullity or is annulled. You have to wait

declaration of nullity or annulment first, or else the

children are asked to give their consent to

declaration prior to questioning the marriage.

asked.
Hence the illegitimate children and adopted

Authority of solemnizing officer:

children may marry.


8. Between adopted children of same adopter
Created by criminal intent
9. When one party kills his own spouse or the other

partys spouse, with the intention of marrying the other

If the killing was to obtain insurance

Who can solemnize:


o 1) Any member of the judiciary, as long as:

Incumbent

When does incumbency start? From

benefits, but there was subsequent


marriage, is the latter valid? Yes, because

the killing was not with intent to marry.

No need to be convicted
Who can marry each other?

1. Brother-in-law and sister-in-law

2. Stepbrother and stepsister

3. Guardian and ward

4. Adopted child and illegitimate child of the

same person
5. Parties convicted of adultery or

concubinage
6. Adopted child of husband, adopted child of

second marriage is bigamous.


If the purpose is some other thing, like succession
issues, then there is no need for prior judicial

the adoption. Illegitimate children are not

for this.
Wiegel v. Sempio-Diy: Need to have prior judicial

when one has taken his oath of office.


What if the judge was on leave or is on

vacation? Still incumbent.


Is there a need for further authority or
license? None; it is an inherent function of

office.
Within territorial jurisdiction
Who in particular? RTC, MTC, CA, CTA, SC,
Sandiganbayan, etc. Even if their jurisdiction is
limited, like the CTA. Contrast this to executive

branch, where only the mayor can.


2) Member of religious group, authorized by religious group.

Is the ordinary per se coming with the authority to


solemnize marriage? No. The authority does not

wife
C) Prior existing marriage

What if the prior marriage has a problem? There

come from the office itself. They need special

must still be a judicial declaration that the prior

authority from the group or sect first.


What is the requirement for the group or sect?
The church, sect or group must be recognized.

10

Either or both of the parties must be part of that

religion or church.
What if both are not members of that religion?

Strictly, invalid. But a lot of people are invoking that

apply, or one can treat this as a mere irregularity.


3) Ship captain or airplane chief

Who is the captain or chief? The head of the ship,

battalion in the zone of operations, and he

or the chief pilot.


When can they solemnize marriages? In articulo
mortis, where one or both are at the point of death.

A person is diagnosed as terminally ill,

articulo mortis? No, the person is not yet

at the point of death. Terminal illness is still

uncertain.
Who can they solemnize?

Members of crew or passenger


What about stowaways?

Can still marry them, as long as on board the


o

destination, including stops-over.


The stop-over must be in a continuous flight.
This is different from a break where one

Who?

No need to be a member of the military or a

the zone of military operation.


5) Consuls

No need to be dying

As long as abroad and both Filipinos


6) Mayors

Reinstated in the LGC of 1991

Marriage license

disembarked and put down all the luggage

military commander can solemnize.


What is military operation?

Involves State action. This is different from

combatant. As long as someone is within

embarkation, until one reaches the final

the one to solemnize.


What if there is no chaplain assigned?

Dean Del prefers the liberal interpretation:

mere police operations for petty crimes.

vessel.
When and where can they solemnize?

During the voyage, from the point of

has to be absent.
If he is present, then the chaplain must be

when there is no chaplain assigned, then the

and given two weeks to live. Is he in

lieutenant up, must be the head of a battalion


There is a person who is preferred, before the
military commander is allowed. Who is this?

There has to be a chaplain assigned to the

this is a gray area, where the good faith defense can


o

Who is a military commander?

Commissioned officer, at least second

and went around already.


For purposes of marriage, do we adopt

Valid marriage license


o What is the consequence of lying in the place of
residence?

It is a public document, so one can be charged for

transportation laws?

No decision yet.
4) Military commander

falsification of a public document.

11

BUT this is a mere irregularity, and should not affect

validity
If you lie about your age, and you are not yet 18?

VOID marriage, not because of the irregularity in the

23? BOTH must attend, even if the other party is

ML, but because of lack of capacity.

Procedure to obtain a Marriage License

1. What do you need to present when you get married (FIRST


MARRIAGE)?
o 1. Birth certificate, but just for the purpose of verifying legal
capacity based on age. Absent this, you can submit a
baptismal certificate.

If none, either:

Residence certificate

Instrument containing sworn declaration of


o

issuance of Marriage License


2. What do you need to present for a SUBSEQUENT MARRIAGE?
o Proof of termination of marriage:

Death certificate

Judicial declaration of nullity

Judicial declaration of annulment


o If one is previously married but is still 18-21 years old, do

prior marriage has fully emancipated the person.

Jurado says otherwise


What about those between 21-25, and this is the second
marriage, do you still need parental advice? Yes, because
there is no stated exception of emancipation for prior marriage,
unlike for parental consent. This is not anymore based on
parental authority, but is based on filial love and respect from

parents.
3. What about alien applicants?
o The diplomatic or consular officials will issue a certificate of

legal capacity. This is usually taken by face value.


4. What about Stateless persons?
o For these people without citizenship and if they can prove that

since when they turn 18, there is no more


need for a legal guardian since he is of full
capacity.)
What is the nature of the consent given

they are political refugees, all one needs is an affidavit

by the parents? The consent is with

declaring oneself as having legal capacity. Again, this is taken

respect to a specific person. If the child


decides to marry someone else, he or she

older than 25.


Lack thereof results in 3 month suspension of

you still need parental consent? Not anymore, because the

two witnesses of lawful age testifying on this


2. Additional requirements:

18-21: consent of parents; order

Father

Mother

Surviving parent

Legal guardian (but ignore this provision,

Parties below 25 years old


What if one party is 80 years old, but the other is

cannot use that same consent.

21-25: parental advice


3. Certificate of marriage counseling.

When does this apply?

by face value.
What is the nature of a marriage license?
o It is a license to marry a specific person. You cannot use it to
marry another person. The impediments and capacities of
people are different.

12

There is no good faith exemption for a ML. A fake marriage

ask for the nullification of the parents marriage based on

license is no good.
What is the validity of the ML?
o For 120 days, then automatically cancelled after
o In any part of the Philippines
o An expired license is NOT a mere irregularity but an absence of

lack of ML? The court held that the children have standing.
BUT this has been changed when the administrative rules
o

a requirement.
Marriages exempt from requirement of ML

other essential and formal requisites.


The solemnizing authority determines whether there is legal

capacity between the parties to be married.


Can the solemnizing officer refuse to solemnize the

there are. What matters is lack of means of transportation.


o Means of transportation need not be public.
4. Muslims and cultural minorities
o Look into customs, rites, practices
5. Marriage celebrated abroad and there is no ML requirement in the

country where it was celebrated


For marriages in articulo mortis and where a party lives in a remote

1. Marriages in articulo mortis.


o Because there is no time.
o The only exemption is the ML. There is no exception as to

marriage? Yes, the solemnizing officer has discretion to


refuse. There is no law compelling solemnizing officers to
o

place, the law requires that the solemnizing officer state the

marry.
Are marriages in articulo mortis exempt from requirement

circumstances of the marriage in an affidavit. What is the effect of


the lack of such?
o No effect. It is merely evidentiary. It is not a replacement to

of ML limited to those in an airplane, military operation,


etc? No. It can occur anywhere, and the ML requirement is
o

came out. Ninal was decided before these rules came out.
What are the requisites:

1. Exclusivity absence of 3rd parties

2. Continuity cohabitation as husband and wife 5

years immediately preceding marriage

3. No impediments during the 5 year period


3. Parties who live in a remote place
o Ratio: no means of transportation to get to LCR
o Not based on distance: it doesnt matter how many kilometers

What are the marriages exempt from the ML requirement?

Another issue in Ninal: do the children have standing to

the ML requirement.

still waived.
If the person miraculously survives, is the marriage valid?

Marriages celebrated outside the Philippines

Yes.
2. People who have been living together as husband and wife for at

least five years.


o Purpose: to save face, because they have already presented
o

themselves as husband and wife.


When must there be an absence of impediment? The

What is the general rule?


o Art 26: Lex loci celebrationis. When the marriage is valid in
that country, it is valid in the Philippines.
Does this provision apply to marriages of aliens outside the
country?

entire five-year period of cohabitation. (Ninal v. CA)

13

No. It doesnt matter, our law doesnt care. Their own national

laws determine whether the marriage is valid.


Two Filipinos get married outside the country. Do we apply Art 26?
o Yes.
o Art 26 only applies ONLY when at least one of the parties is a

both?

Filipino.
What are the exceptions to this rule?
o Art 35 (1, 4, 5, 6), Art 36, Art 37, Art 38

(1) under 18

(4) bigamous

(5) mistaken identity

(6) void under Art 53


o All of these exceptions deal with the essential requisites of
determined by the law of the place where the marriage is

celebrated.
What if two male people get married abroad?
o No settled rule yet.
What is the rule on divorces obtained abroad?
o If the alien obtained a divorce decree abroad allowing him to
o

subsequently remarry, then the Filipino may remarry as well.


Van Dorn v. Romillo and Pilapil v. Ibay-Somera

In Van Dorn, alien husband got a divorce abroad, but

Philippines. The basis of the court was estoppel


Pilapil: she is married to you but you are not married

to her
NOTE: both cases were decided before the Family

Time of marriage

Time of divorce

Effect

2 Fil
2 Fil

2 Fil
1 Alien, 1 Fil

2 Fil

2 Aliens

1 Alien 1 Fil
1 Alien 1 Fil

1 Alien 1 Fil
2 Aliens

X
Old view: not allowed to
circumvent the law through this
NOW: the Alien is not anymore
under our jurisdiction, so he can
obtain divorce. Then Art. 26
applies.
Amor-Catalan case: recognize as
being a divorce entered into by 2
aliens. Art. 26 does not apply
because there is no Filipino to
equalize.
Art. 26
Valid as well

Difference between void and voidable marriages:

sought to administer community property in the

who obtained the divorce.


The requirement that one is an alien and one is Filipino: must it
occur during the time of marriage, during the time of divorce, or

marriage. But as to the formal requisites, then that is

Not allowed. The article only applies if the alien was the one

Code
Requisites?
o 1. Marriage between Alien and Filipino
o 2. Alien files for divorce
o 3. Divorce decree capacitated the alien to remarry
What if the Filipino obtains the divorce?

VOID

VOIDABLE

Inexistent from the beginning


Does not prescribe
No ratification

Valid until annulled


Generally, 5 years prescription
May be ratified by free cohabitation
or prescription
ACP unless provided otherwise

No community property. Only coownership.


Directly or collaterally attacked
[but subject to recent rules: check
discussion below]

14

Must be directly attacked

The common statement is that void marriages can be collaterally


attacked. But what does Art. 40 say?
o Art. 40 For purposes of remarriage, one has to obtain a
o

and deliver presumptive legitimes of children,

judicial declaration of nullity.


So there has to be a direct proceeding. You cannot do this by

collateral attack.
RULES ON STANDING re: nullity
o SC 02-11-10 only husband and wife have standing in a
direct action

EXCEPT: a) for those commenced before 15 March

2003, b) marriages under CC


EXCEPT: for intestate and testate proceedings, allow

collateral attack

So the rule in Ninal was technically not changed


BUT the main determinant is whether the person has standing

(as in an heir)
In Carlos v. Sandoval, since the one questioning was the

and recorded in the ROP and LCR


o Art. 36: Psychological incapacity
o Art. 37: Incestuous marriage (see above)
o Art. 38: Void due to public policy

A. by blood

B. by adoptive relationship

C. by marriage

D. by criminal intent
When is a marriage entered into without termination of a previous
marriage valid?
o When there is a declaration of presumptive death. Article 41 is
the only article which provides for a situation where there can

brother of the deceased, it doesnt matter if the marriage was


valid or not because he only inherits in default of descendants
or ascendants.

be 2 valid subsisting marriages.

Four years for ordinary situations

Two years for extraordinary situations


The declaration is not of DEATH but of PRESUMPTIVE

DEATH.
This takes the place of the usual requirement of death
certificate to allow the other spouse to remarry.

The declaration of presumptive death obviously only

What are the grounds for nullity?


o Arts. 35, 36, 37, 38
o Art. 35:

A. party below 18 years old

B. solemnized by unauthorized solemnizing officer

EXCEPT if either or both parties believed in

EXCEPT: see below (presumptive death)


E. Mistake in identity
F. subsequent marriage void under Art. 53

Failure to partition and distribute properties

empowers the present spouse to remarry.


For other grounds, any subsequent marriage is automatically

null and void.


What if both spouses in the subsequent marriage acted in
BF?

GF that the officer had authority


C. no marriage license

EXCEPT when license is not required


D. bigamous or polygamous

Art. 41

15

The marriage is void ab initio.

What if the spouse who was declared presumptively dead

reappears?
o If no one does anything, we have a situation where there are
o

o
o
o

FC did not define what psychological incapacity. They wanted

two valid subsisting marriages


Reappearing spouse files an affidavit of reappearance

But other people may file an objection to the affidavit

If there is no objection: then the subsequent marriage

is deemed terminated upon filing of the affidavit


Who can file reappearing spouse or persons

interested (ex. children in first marriage)

Legal effect: not void ab initio, just terminated


If there are objections, then a court of law must rule on the

it gave the 3 requirements:


o 1) gravity
o 2) juridical antecedence
o 3) incurability
There is no case yet where the court says that psychological incapacity
declaration of nullity, both parties can still marry again. So

presumptively dead. Need more than that.

Mistake in identity as ground for nullity

the family (220, 221, 225)


Santos: It was a cut and paste case from different sources. In the end, it

is such that he will never be able to perform marital obligations. So after

say that the people havent seen her to prove that a person is

there is mistaken identity, there is no consent.


This is NOT mistake in particulars of a person (ex. you thought he was

carry out the essential obligations of marriage


Ex. Narcissistic complex
Inability to perform obligations to the spouse and obligations to

did not say how we should define it in the Philippines. Only value is that

spouse has died.


Republic v. Nolasco: Not enough to just ask people around and

Spirit of provision consent to marriage is for a SPECIFIC person. If

impotence. It is a ground for voidable marriage only.


o It is NOT mental incapacity, which is also for voidable marriage.
What is psychological incapacity?
o He is normal under any other circumstance, but he cannot
o
o

objections. The LCR cannot rule upon the objections.


What is the basis for objection or opposition?

The only basis: this is an impostor.


Is there a prescriptive period for filing an objection for the

jurisprudence to develop the concept.


What is the distinction between physical and psychological
incapacity?
o Psychological incapacity is NOT physical incapacity, which is

affidavit of reappearance?

These questions have not been settled yet.


What is required to be proved in declaration of presumptive death?
o Proof that there is reasonable ground to believe that the
o

One that has a lot of cases. Members of the committee who drafted the

psychological incapacity is relative.


Molina: Eight point test. This is the first case where the court actually
set down, point by point, what one should look for to establish Art. 36:
o 1) plaintiff has burden of proof to show P.I.
o 2) Root cause must be something medically proven and
clinically identified and clearly explained in the decision

This has received so much flip-flopping from other

rich, but he was actually a pauper)


o
o

Psychological incapacity

16

decisions
3) it must exist at the time of the celebration of the marriage
4) the PI is incurable [from Santos case]

5) it is grave and it prevents him from performing essential

marital obligations

Molina included obligations to family and children too,


o

not just to the spouse


6) Essential marital obligations are Arts. 68-71 of FC, and Arts.

220, 221, 225 of FC


7) Interpretation of the National Marital Tribunal must be given
weight

Domingo v. CA:
o Judicial declaration of nullity only needed for remarriage.
o Otherwise, no need for judicial declaration to establish nullity of
the marriage.
Tamano v. Ortiz:
o RTC has jurisdiction over all actions relating to marriage and
o

complaint; not dependent on the defenses set up. The

But its decision is not public in character; so its effect

complaint said that the parties were married under the civil

is really just to the parties, and is not jurisprudence


8) The trial court must order the public prosecutor and the Sol

Gen to act as counsel for the state


Paras: This should be the case to read if you want to know what DOES

code.
Ninal v. Bayadog:
o There must be no impediment or interruption in the five-year

NOT amount to psychological incapacity. In this case the manifestation


o

relied upon is infidelity of the spouse, going out having drinks with
friends, falsifying signature all these were struck down by Paras
Marcos v. Marcos: You dont need to have a psychiatrist or psychologist

to examine the party. Absence of such is not fatal. What you need is

death of either party. (Ex. heirs, in succession.)


De Castro v. De Castro
o As in Ninal, the nullity of a void marriage may be established
support). Here, the affidavit stating circumstances establishing

whatever evidence to prove PI.


Te v. Te: Courts must be allowed to make a decision on a case-by-case

5-year cohabitation contained false statements; hence, there


was no ground to exempt from ML requirement. No ML = void.

basis without being tied down by the Molina requirements. This came
out strong. Molina gave us a straitjacket and we dont want this.
Suazo v. Suazo: You dont have to be strictly bound by cases (open

Declaration of nullity v. bigamy

case policy). We are not throwing away Molina but the court must be

open to situational differences.


o The SC is not bound to accept with finality the findings of fact

cohabitation period in the marriage license exemption.


Declaration of nullity may be collaterally attacked after the

even collaterally in an action not for that purpose. (ex.

the totality of evidence. (Totality of evidence approach) You can use

marital relations.
Jurisdiction based on allegations of the plaintiff in the

Marbella-Bobis v. Bobis
o The question of nullity of a previous marriage not judicially
declared void is NOT a prejudicial question to a charge of

by the TC.
What is the end result of all this jurisprudence?
o It is still case-to-case. There is no set doctrine.

Declaration of nullity

17

bigamy. The marriage lawfully subsists.


Mercado v. Tan
o Subsequently getting a declaration of nullity will not invalidate a
conviction for bigamy.
Morigo v. People

The parties merely signed a marriage contract on their own,


without any ceremony there is no semblance of any valid
marriage. No need for prior declaration of nullity. Bigamy

2.

dismissed.
Tenebro v. CA
o The subsequent declaration of nullity of the second marriage
under Art. 36 does not negate the criminal action for bigamy.
(The mere act of contracting a second marriage during the
firsts subsistence is punishable.) Article 36 marriages are not
means that there can be prosecution for bigamy.

Voidable marriages
d.

Grounds
1.

e.
f.

ii.

consent. Must be in ML application.


Consent must be before wedding.

precise moment of giving consent.


Who may file?
i. Sane spouse if no knowledge of insanity
ii. Relative, guardian, etc.
1. No need to have no knowledge of insanity
iii. Insane spouse
What are the periods?
i. Sane spouse 5 years from discovery of insanity of
the other spouse [because no period was provided]
1. N.B. Sempio-Dy pegs the period at anytime

Lack of parental consent


a. Who has standing?
i. Parent/guardian who did not give consent
ii. Party whose parent/guardian did not give consent
b. What if both parties didnt get parental consent?
i. Both can file, separate or joint
ii. Pari delicto doesnt apply
c. When can the party who didnt get consent file?
i. Upon reaching 21 years old
d. When can the action be filed?
i. BEFORE reaching 21 parent or guardian who didnt
ii.

Mere attendance in wedding is not automatically

Insanity
a. When should insanity exist?
i. Time of marriage
b. When is there a presumption of insanity?
i. If the party was insane right before and after the
c.

completely without effect (ex. legitimacy of children). So this

i.

ii.
iii.
e.

before death of either party


Relative, guardian, etc.
1. Anytime before death of either party
Insane spouse 5 years from regaining sanity

[because no period was provided]


How is the marriage ratified?
i. Free cohabitation by the parties upon regaining of
sanity by the insane spouse

3.

consent
UPON reaching 21, until 26 party whose parent or

guardian didnt consent


How is marriage ratified?
i. Free cohabitation by the parties upon reaching 21.
Specific rules on form of consent:

Fraud
a.

Grounds:
i. Non-disclosure of a previous conviction by FJ of the
ii.

other party for crime involving moral turpitude


Concealment by wife that at the time of marriage, she

iii.

was pregnant with another man


Concealment of STD, regardless of nature, at time of
marriage

18

iv.

Concealment of drug addiction, habitual alcoholism,

e.

NOTE: the other party must not have known it during the

b.
c.

homosexuality, lesbianism at time of marriage


No other misrepresentation is ground for fraud.
If the conviction is pending appeal, is the non-disclosure

f.

marriage
What is the doctrine of triennial cohabitation?
i. If the wife is still a virgin after three years of living

d.

fraudulent?
i. No. It must be by FINAL judgment.
What if the crime was alleged in the same annulment

g.

together, it is presumed the husband is impotent


What is relative impotency?
i. You are only impotent as to one person but not

case?
i. Cant apply because there must be previous

6.

conviction by final judgment.


Ratification?
i. Free cohabitation upon knowledge of fraud
Force, intimidation, undue influence
a. Intimidation: must be evil and imminent and based on a well-

another. It is still voidable.


Serious and incurable STD
a. Differentiate: if it is a ground for fraud, it has to be concealed,

e.

4.

b.

5.

b.
c.

grounded fear
What if intimidation has a legal basis?
i. It does not count. Ex. I will prosecute you for rape,

and the guy really committed rape anyway.


c. Prescriptive period?
i. 5 years from cessation of cause
d. Standing?
i. Injured party
e. Ratification?
i. Free cohabitation after cause ceases.
Impotency
a. Potency must be at the point of marriage. Becoming impotent
b.

c.
d.

Ground

Who can file

When

Ratification

Lack of parental
consent

Underaged party

Within 5 years
upon turning 21

Parent, guardian
who did not
consent
Sane party

Until child or
ward turns 21

Yes, but only


upon reaching
21
No

Insanity

after is not a ground for annulment.


What if both are impotent?
i. Sempio-Diy: there is no injured party
ii. Dean Del: both are injured parties and can file
Period?
i. 5 years after marriage
Cannot be ratified by cohabitation.

but it need not be serious or incurable


Who can file?
i. Injured party
Cannot be ratified by cohabitation

Insane party

Fraud

19

Parent or
guardian,
relative of insane
party
Injured party

Within 5 years of
discovery of
insanity
Within 5 years of
lucid interval
Before death of
either party

5 years from
cessation of

Yes, but only in


a lucid interval

Yes

Force,
intimidation,
undue influence
Impotence

Injured party

Serious and
incurable STD

Healthy party

Potent party

cause
5 years from
cessation of
cause
5 years from
marriage
5 years from
marriage

Yes
o
No
No

Procedure and effects of termination of marriage

For all cases of nullity or annulment:


o Court orders prosecutor or fiscal to appear on behalf of the

operation of law
3) designation of guilty spouse as beneficiary in life insurance:

may be revoked

Even if deemed irrevocable


4) spouse in BF cannot inherit from innocent spouse by testate
or intestate succession
5) if both spouses guilty, revoke by operation of law:

Donations propter nuptias to each other

Testamentary dispositions to each other

[N.B. these two provisions were just included because


Art. 43 mentions an innocent and guilty spouse; in

State
o Take steps to:

1. Prevent collusion between parties

2. Make sure evidence is not fabricated or suppressed


No judgment based on stipulation of facts or confession of judgment

Pendency of action:
o Follow written agreement between spouses
o 1. Court provides for support of spouses
o 2. Custody and support of common children

Consider mutual written agreement first

Consider best interest of children

And Tender Years Doctrine

And choice of parent

Visitation rights for other parent

Art. 44, both are guilty]


Final judgment provides:
o 1) liquidation, partition, distribution of properties of spouses

Includes adjudication of common lot


o 2) custody and support of common children
o 3) delivery of presumptive legitime

Computed based as of date of final judgment

Delivered through cash, property, or sound securities

Unless there was a judicially approved

Effects, et. al.

Procedure

Common children

If none, children of guilty spouse in previous marriage

If none, innocent spouse


2) donations propter nuptias: valid, except:

Donations in favor of guilty spouse revoked by

mutual agreement
Who may ask for enforcement of judgment:

1. Children

2. Guardian

3. Trustee of property
Will not prejudice ultimate successional rights
delivered presumptive legitimes are deemed

Effects:
o 1) share of party in BF over net profits forfeited in favor of:

advances

20

Record judgment, partition, distribution, delivery of presumptive legitime

OR ELSE, it will not affect third persons


o Register in appropriate civil registry
o Registry of properties in places where they are located
NON-COMPLIANCE with this any subsequent marriage is null and

void
Which children are legitimate:
o Those born before annulment
o Those born before Art. 36 nullity
o Those born of subsequent marriage which doesnt comply with
o

than a year

N.B.: after 3 months from initial abandonment, there


can already be judicial separation of property (JSP).

Art. 53 (registration)
Also, those who were born before reappearance of

presumptively dead spouse


SUPER DOCTRINE c/o Breakfast Club, who painstakingly
analyzed this particular provision:
o When do you not have to deliver presumptive legitime?

1. Legal separation (because marriage not dissolved)

2. Death (failure to liquidate and stuff will only make

separation of properties for marriage #2)


3. Presumptive death (which has the same effects of
death)

LEGAL SEPARATION

1. Condonation
o Forgiveness/pardon
o May be express or implied
o Sexual intercourse is implied condonation

But not when it was just to save the marriage, and it


o

was unsuccessful
Each sexual intercourse with another person is a separate act
of adultery. Forgiveness for the first does not extend to

Grounds:

When a year passes, there is a ground for LS.


Sex stuff
o 8. Lesbianism or homosexuality
o 9. Contracting bigamous marriage
o 10. Sexual infidelity or perversion

Defenses:

dispositions post-one-year void and mandate

Or connivance in such
o 4. Attempt against the life of spouse
Character stuff
o 5. Final judgment of more than 6 years in prison

Even if pardoned
o 6. Drug addiction or habitual alcoholism
o 7. Abandonment of spouse without justified cause for more

Violent stuff
o 1. Repeated physical violence or grossly abusive behavior v.
o

spouse, common child, or child of spouse


2. Physical violence or moral pressure to change

religious/political affiliation
3. Attempt to corrupt or induce to engage in prostitution:

subsequent acts
2. Consent
o Express or implied
o Prior to the act
o Agreement between spouses against law and morals may be
null and void, but it may be considered consent that would bar

spouse, common child, child of spouse

21

litigation.
3. Connivance

o Luring but not entrapment


4. Mutual guilt
o May be on different grounds
o Even when one party has pardoned the other and the other
has not
5. Collusion
o Agreement between the spouses
o Covered by proscription of legal separation based on

person
Same powers and duties as those of a

guardian
Support of spouses

Lerma v. CA: The court may make a preliminary

spouse was adulterous, the court deemed it proper to

deny him support pendente lite.


Sabalones v. CA: A decree of LS was issued, where
the husband was denied share in the profits and
denying him support from the wife. The husband
appealed. Pendente lite of the appeal, the wife filed a
petition for preliminary injunction against the husband

What is the mandatory Cooling off period after filing of the

alienating conjugal properties. The court said this


was valid to preserve the wifes rights in the pendency

filing of petition
Court must take steps towards reconciliation of the spouses, and satisfy

itself that despite such efforts, reconciliation is highly improbable


No decree of LS based on:
o Stipulation of facts
o Confession of judgment
Prosecutor or fiscal assigned to take steps to prevent collusion between
parties and ensure evidence is not fabricated or suppressed

of the appeal
o Support and custody of children
B. Effect of death of a party:
o Action is dismissed
o Since action is purely personal between the spouses
o Lapuz v. Eufemio:

Spouse died during pendency of LS case. The


o

Effects pendente lite, of death, and after finality

whether support is justified. In this case, where one

petition?
o Only try an action for LS after 6 months have elapsed since

Based on written agreement


If none, court designates either or a third

ruling of the case during its pendency, to determine

stipulation of facts
6. Prescription
o Even if not alleged, court can take judicial notice
o If there are multiple acts, count from the last separate act
o From knowledge of the ground, not just from mere hearsay
Prescription for all: within 5 years of occurrence of cause

Procedure

A. Effects of Pendency:
o After filing petition:

Spouses entitled to live separately from each other

Administration:

proceeding was dismissed.


Macadangdang v. CA:

Spouse died after the decree of LS was issued but


before liquidation. The LS was deemed final
However, now Rules say that if this happens, the decision in
the LS case, where there has been entry of judgment is final
and binding, and will be accorded such finality in the settlement
of the estate proceedings.

22

Dean Dels interpretation: Because the finding in LS case is

final, even in the settlement of estate, one may invoke forfeiture

difference between Art. 43/44 and this provision in LS

provisions.
You dont do liquidation and partition in the same LS case

donations are just revocable here]


Reconciliation

anymore when one party dies after entry of judgment. But the
decision of the LS case is already final and binding in the

settlement of estate proceedings of the deceased person.

(IMPT!!)
C. Effects of decree:
o 1. Spouses entitled to live separately
o 2. Dissolve ACP or CPG

Offending spouse not entitled to net profits

Siochi v. Gozon: what is forfeited are net profits and


o
o

not the undivided share in the community property


3. Custody of minor children to innocent spouse
4. Disqualify offending spouse from inheriting by intestate
succession AND revoke testamentary provisions by operation
of law

But if the spouse makes another will with


testamentary provisions in favor of the guilty spouse,
then the latter can inherit, obviously

Optional effects:
o 1. Innocent spouse may revoke his or her donations to

Procedure
o Joint manifestation under oath
o Signed by both
o Filed with court in same proceeding
Effects:
o If proceedings pending, terminate in whatever stage
o If final, set aside final decree
o What shall persist:

Separation of property

Forfeiture of shares
o UNLESS spouses agree to revive former property regime
Agreement to revive former property regime:
o Under oath
o Will specify:

1. Properties contributed anew to restored regime

2. What are retained as separate properties of each

offending spouse FIVE YEAR period

Record revocations in the registries of property where

[N.B. so while life insurances are still optionally revocable, the

located
Alienations, liens, encumbrances prior to recording

the revocation are respected


2. May revoke designation of spouse as beneficiary in life

spouse

3. Names of all known creditors (addresses, amounts)


Filed in the same proceeding for legal separation

Copies furnished to creditors

Creditors protected by court


Record order in proper registries of property

Will not prejudice a creditor not listed or notified

Unless debtor-spouse has sufficient separate


properties to satisfy debtors claim

insurance policy No prescription, as long as the policy exists

Takes effect upon written notification to the insured

RIGHTS AND OBLIGATIONS BETWEEN HUSBAND AND WIFE

23

Became important due to Molina doctrine (if you cannot perform these,

it can indicate psychological incapacity)


Obligations:
o 1. Live together
o 2. Mutual love, respect, fidelity
o 3. Render mutual help and support
Family residence: jointly fixed by husband and wife
o Otherwise, court decides
If you dont want to live in the same dwelling, what is the

Principle: because this is a separate endeavor by the liable


spouse and the contract cannot bind both spouses. (This is

consequence?
o As a rule, they must live together. If they cannot, they go to

the fall back analysis)


Support of the family comes from:
o 1. Community or conjugal property
o 2. Income from separate property
o 3. Separate property

Administration of community properties

court, and ask for an exemption. Can only be granted


o

exemption for valid and compelling reasons.


What are the consequences of refusal to live in the same

dwelling without valid and compelling reasons?

1. You are not going to be entitled to support

2. You can be charged with abandonment.

3. There can be transfer of administration


Respect:
o Lack thereof can lead to criminal and civil consequences
o Includes the woman being allowed to work and exercise her

Who is the admin of the community properties?


o Spouses, jointly
o Regardless of ACP or CPG
There are certain cases where it is possible for one spouse to have
admin of the community property. When does this happen?
o Before the marriage place in the marriage settlement that the
o

profession
When can a spouse object to profession?

Valid, serious, moral grounds


What happens when you incur liability pursuant to this profession

H or W alone will administer the property.


During the marriage

In case of disagreement, decision of H prevails. No

Nancy Go case: obligations charged against separate property.

need to go to court for this.


What is the relief the wife can ask for in court?

Must establish in court that it amounts to


mismanagement and it prejudices the

objected to? Who bears the liability and charges?


o RULE: no prior consent necessary
o This should be the rule:

Before any objection absolute community

After objection liabilities towards separate property


o BUT this is what was erroneously printed:

Before any objection separate property

After objection absolute community

24

community property
Can ask for receivership, transfer of admin,

or in extreme cases, separation of property


NOTE: NOT to overturn the husband, but to

get certain reliefs (stated above)


Need approval of court became guardian of the other

spouse, etc.
ONLY ground where there is no need for court approval: when

there is incapability of spouse to jointly administer


Acts of ownership:

o
o
o

Both spouses MUST give consent.

Other spouse must give written consent

Or there must be court order


Ex. selling the house.
Ex. making donation, except for small donations
What is the effect if one of the spouses does not give

before objection or not

If benefit prior to objection obligation

PROPERTY RELATIONS BETWEEN HUSBAND AND WIFE

consent and the third party.

It can be validated by the objecting spouses consent.


How much time does the non-consenting spouse have?

The law does not provide. But the parties (consenting

How governed

spouse or third party) may withdraw the offer any

time.
Rule on donations?
o General rule: cannot donate to each other
o To third party: must be a joint act

Except moderate donations for charity or family

In the ff order:
o 1. MS executed before the marriage
o 2. FC provisions
o 3. Local customs

Marriage settlements (MS)

rejoicing
What about making a donation to the children?
o As long as it is for education, etc.
o But it would need consent of the other spouse.
o Otherwise, still valid, but charged to the separate property of

When can you enter into marriage settlement?


o Anytime before you celebrate marriage.
o And as long as you have legal capacity to enter into contracts
o And as long as the marriage takes place after
Can the parents enter into a marriage settlement on behalf of minor
children?
o No, it must be the parties themselves who enter into the

the other spouse.


Management of household:
o Used to be traditional role of wife.
o Now, it is a joint role between both spouses.
On professions:
o Either spouse may exercise any legitimate profession without
o
o

enforced against community


If after enforced against separate property
of spouse who did not get consent

consent to these acts?

Its void.

Its a continuing offer from the spouse who gave

2) Court decides whether benefit accrued to family

consent of the other.


Only grounds to object: valid, serious, moral grounds
In case of disagreement:

1) Court decides whether objection is proper

25

contract.
If its 18-21, the parents must be part of the marriage

settlement.
When can there be a change of property regime?
o 1, separation of property
o 2. Legal separation
o 3. Ordinary dissolution
Is there need for judicial approval?
o No. Only need to register with the civil registrar

o To bind third persons


If the marriage doesnt take place, what happens to the MS??
o Void.
o Except for provisions not dependent on the marriage taking

system to govern?
o Determine intent of the parties. If it cannot be ascertained,
then apply local custom. When there is no local custom, apply

place (ex. recognition of children)


Formalities?
o 1. In writing

Else, unenforceablee
o 2. Registered in civil registry to have effect on third parties

sufficient ground to do so
Third person will manage conjugal properties
All properties of the wife belong to the husband
N.B. Invalidity of some provisions will not nullify valid

co-ownership.
When can modifications in MS be done?
o Any modification in marriage settlements is valid only if made
o

What are the Choices for property regime?


o 1. ACP
o 2. CPG
o 3. CSP
o 4. Other regime
When does ACP govern?
o 1. When it is expressly chosen
o 2. When none chosen
o 3. When regime chosen is void.
o Examples of void provisions:

Prohibited one party from marrying another, or a


second marriage for surviving spouse
Spouses live separately
Imposing fine on infidelity
Depriving parties from asking for LS when there is

What if the parties expressly rejected ACP but did not agree on any

before the celebration of marriage.


Exception: judicial separation of property

In any case, the only change is from ACP/CPG

CSP, with court approval


There can be no situation where CSP changes to
ACP or CPG because what is only allowed is revival

properties: void
What are the Formal requisites for MS?
o 1. In writing

What kind of document is needed?

Private/public document, but it must be

ones.
What properties are covered by the regime?
o When a regime is chosen, all properties are governed by that
regime. Cannot exclude particular properties from the regime.

of the old property regime


Extrajudicial agreement between spouses to separate their

public document for it to be registered

What if its not in writing?

Unenforceable

Can compel to be reduced to writing


2. Signed by the parties

N.B. General rule is ONLY the future spouses are

o
o

parties to the MS
3. Executed before the marriage
4. Those who need parental consent must make parents party

to the MS

Otherwise, MS is void (for lack of consent)


5. If under civil interdiction or disability, must make guardian
party to the MS

Otherwise, MS is void

26

How does a MS affect third parties?


o 1. All above requirements
o 2. MS registered in LCR where marriage contract is recorded
o

and in the property registries of property


N.B. or else, as to these third persons, ACP will be presumed

to govern
What governs property relations between the spouses?
o Philippine laws, regardless of place of celebration of marriage
o
o

and regardless of residence


In absence of contrary stipulation in MS
Exceptions:

1. Both spouses are aliens

2. Extrinsic validity of contracts affecting property

May be made by minors


Cannot be made by minors
May include future property (if done
Just present property
by either of the spouses); if done by
other persons, just present property
If present property donated by a
Only limit: non-impairment of
legitimes
spouse and regime is not ACP,
limited to 1/5. If future property
donated by a spouse, limit is on nonimpairment of legitimes.
Grounds for revocation in FC
Grounds for revocation in CC

If future spouses agree upon regime other than ACP, cannot donate to
each other in MS more than 1/5 of present property.
o Excess: considered void
o Reason: in ACP, their properties will become part of AC

located abroad, executed there


3. Extrinsic validity of contracts affecting property

located abroad, executed here


Rule if marriage does not take place:
o Everything stipulated in MS in consideration of future marriage
o

is void
Including donations between respective spouses contained

therein
Does NOT invalidate stipulations that do not depend on

celebration of the marriage

properties in MS
What is the rule on property subject to encumbrances?
o Property subject to encumbrances can be donated.
o If foreclosed to secure an obligation:

In case of deficiency, donee not liable for difference

In case of excess, donee entitled to difference

Possibilities i.e. how to resolve whether the DPN is revoked by

Donations by reason of marriage

anyway (except for some)


Donations of future property: governed by law on wills
o Therefore, these are revocable, unlike donation of present

operation of law (43, 81) or by option (86)

Requisites of a valid donation propter nuptias?


o 1. Made before marriage
o 2. In consideration of the marriage
o 3. To one or both of future spouses

Donations propter nuptias (DPN)

Ordinary donations

Does not require express


acceptance

Requires express acceptance

1: If the marriage is not celebrated

27

Under Article 81:


o If DPN is included in MS, then the DPN is considered void if
the marriage does not result
Under Article 86:
o The donation is revocable if not in MS

2: If the marriage is celebrated, but then terminated

Under Article 43:


o Revoked by operation of law if the donee is in bad faith
Under Article 86:
o Everything else covered here: if youre the spouse in GF, it

remains to be revocable due to 86

What are the grounds for revocation of DPN?


o N.B. MAY be revoked so it is not automatic.
o 1. Marriage not celebrated, declaration of nullity

Except donations in MS Automatically revoked if

not attached to marriage or its existence


6. Donee commits act of ingratitude:

1. Offense against person, honor, or property of

donor, spouse, children under parental authority


2. Donee imputes to donor criminal offense or any act
involving moral turpitude, even if proven

Except if act is against donee, spouse,

the marriage does not take place


Declaration of nullity if donor is one spouse and
donee is in bad faith, automatically revoked by

Prescriptive period:

Written 10 years

Oral 6 years
N.B. same as above the reason for termination is

operation of law
Prescriptive period?

Written donation 10 years

Oral donation 6 years

N.B. prescriptive period is such because

theres no marriage under law


2. No consent of parents or guardians to the marriage

Prescriptive period: 4 years

N.B. period is such, as specially provided


3. Marriage annulled and donee in bad faith

Again, if donor is other spouse, then donation is

children under authority


3. Donee unduly refuses to support donor when

legally or morally bound to do so


Prescriptive period: 1 year from knowledge of the

fact
Donations during marriage between spouses: VOID
o EXCEPT: moderate gifts on family rejoicing

Determined by social position of the family, and


o

customs
Same prohibition applies to persons living as spouses without

valid marriage

Ex. common law marriage

Ex. adulterous relationship


Prohibitions include grants of gratuitous advantage, direct or
indirect

Ex. donation to a child of the other spouse by another

revoked by operation of law

Prescriptive period: 4 years

N.B. same rationale


4. LS and donee is guilty spouse

Prescriptive period: 5 years

N.B. 5 year period for pretty much anything

marriage (since if the child dies, the other spouse


o

related to legal separation


5. Resolutory condition attached is complied with

inherits)
Who has standing to question:?

ONLY persons prejudiced, like the donor or his heirs

Case: husband donates a car to his wife.


The wife insured it. It was destroyed and the

28

wife sought to collect insurance. The

insurance company challenged the validity of


the donation. HELD: The insurance

company has no standing to question, since


it has no rights or interests over the car in

marriage
o Cannot exclude specific properties from the community
What are excluded?
o 1. Property acquired during marriage by gratuitous title
(donation, succession)

Exclude fruits and income as well

Except if the donor expressly provides that the

question.
Donor is included in those with standing since there
can be a case where the weaker spouse is taken
advantage of by the stronger

Absolute Community of Property (ACP)

When does ACP commence?


o Precise moment of celebration of marriage
o Any stipulation which makes the commencement at any other

time is VOID
Basic concept:
o Upon marriage, all properties brought into marriage and
o

acquired during marriage are included in ACP


Upon dissolution, the entire common mass is divided between

property is included in the AC


2. Property for personal and exclusive use by either spouse

Except jewelry
3. Property acquired before marriage of spouse with legitimate

descendants from prior marriage

Exclude fruits and income as well


What is the presumption?
o Property acquired during marriage are presumed to be
included in the AC, unless proven otherwise
o There must be strong, clear, and convincing evidence
Apply rules on co-ownership, suppletorily

Conjugal Property of Gains (CPG)

the spouses
o Contra: in CPG, only the net profits are divided between them
Waiver of rights, interests, shares, and effects of ACP:
o DISALLOWED
o Except:

1. Judicial separation of property

2. Dissolution of marriage (ex. death) or annulled


o How is this done?

1. In a public instrument

2. Recorded in LCR
o Provided: creditors of waiving spouse may petition to the court

to rescind the waiver to extent of amount sufficient to cover

All properties belonging to spouses before marriage and during

credits
What is included in AC?

29

When does CPG apply?


o 1. Chosen by the spouses in the MS
o 2. Marriages under NCC by default
What is included in COMMON FUND?
o 1. Fruits, income, proceeds, products of separate property
o 2. Acquired through their efforts
o 3. Acquired through chance
What is the rule upon dissolution of CPG?
o Divide net gains equally, unless they agreed to a different
division in the MS
What is the nature of the spouses right over conjugal property?
o Each spouse has a mere inchoate right over conjugal property:

Cannot alienate of the interest.

Cannot be attached by creditors.


Only ripens into actual title upon dissolution and liquidation of

partnership.
Apply same rules on:
o 1. Commencement: upon precise moment of marriage
o 2. No waiver of rights, shares, interest unless in JSP or

annulment, or revocation of contract


2. Acquired during marriage through gratuitous title

Includes unearned increments

Includes moral damages (but not


hospitalization expenses, medical

assistance, or loss of salary)


Property by substitution:

3. Acquired by right of redemption, barter, or

exchange of exclusive property

If money used for redemption was CP, just

owner-spouse
2. May mortgage, encumber, alienate, or dispose separate

property without consent of other spouse.


o 3. May appear in court alone to litigate it.
For joint donations of property to the spouses, who owns the
property?
o If shares therein are designated, those shares are their

reimburse CP for payments on installments)


Includes property alienated before marriage
but reacquired through rescission,

ROP, where located


Alienation of the property terminates administration by
the other spouse. Obviously, proceeds go to the

ownership vested before marriage (but

enjoyment of exclusive properties


What is the exception?

May transfer administration to other spouse (or even


another person) by public instrument recorded in

dissolution, and only in public instrument recorded in LCR


Apply rules on contract of partnership, suppletorily
o If the CP is not enough, use separate properties
o But unlike ordinary partnership (pro rata), liability is solidary
What are exclusive properties in CPG?
o Property by direct acquisition as exclusive:

1. Brought into marriage as his or her own

Includes installment-basis property, if

Who manages exclusive or separate properties?


o 1. The spouses retain ownership, possession, administration,

reimburse CP

4. Purchased with exclusive money of wife or husband


What about exclusive property that is alienated under pacto de

retro and then subsequently repurchased?


o Still exclusive. If the other spouse paid for the redemption, he

exclusive property

N.B. Because the disposition is gratuitous


o If no designation of shares, it is 50-50
o When does right of accretion exist?

1. when one spouse refuses to accept

2. incapacity to accept

3. predecease or death before perfection of donation


What about onerous donations?
o Still exclusive property of donee-spouse
o But reimburse CP for advances made
What is the presumption?
o All property acquired during marriage is presumed to be
conjugal.
o Regardless of registration.
Specific enumeration of conjugal property:
o Acquired by efforts

1. Those acquired by onerous title through common


fund, even if placed in the name of one spouse

can be reimbursed.

30

2. Obtained from labor, industry, work of either spouse


3. Acquired through occupation such as hunting or

(Must return of premiums to conjugal

fishing
Fruits of property

1. Fruits (natural, industrial, civil) of common property

2. Net fruits of exclusive property of each spouse

Net fruits only because use the income first

even if paid from conjugal funds

No obligation to return of the premiums,

to pay for administration, preservation, etc.


3. Livestock in excess of number of each kind brought

either spouse, because effort was involved


2. Acquired by chance

But losses borne exclusively by the loser

spouse
By presumption

1. All property acquired during the marriage is

donation)
On benefits, pensions, annuities, usufructs, etc.:
o General rule applies.

Gratuitous = exclusive;

Onerous = conjugal.
o Annuities:

The annuity itself (ex. purchased for P100K) is

presumed to be conjugal unless contrary is proved


Rules on life insurance:
o General rule:

The right to annuity itself is considered the exclusive

because it is deemed a reciprocal donation


If the insured is a third person, then the beneficiary
spouse owns it as separate property (deemed a

Chance

1. Share of either spouse in hidden treasure

Even if it belongs to the exclusive property of

partnership)
If both spouses are jointly insured in a single policy,
proceeds belong to the surviving spouse (obviously),

into the marriage of each spouse

Only matters upon dissolution


o

Deemed a donee of the premiums paid.

property of the purchasing spouse.

The monthly pensions are conjugal.


If the beneficiary is the insured himself or his estate:

If paid out of conjugal funds, proceeds are conjugal

If paid out of separate funds, proceeds are separate

If party conjugal, part separate, proceeds are part

conjugal
Usufruct:

The harvests or fruits of the land given as usufruct is

conjugal
What is the determining factor?

If it was given out of pure liberality, then consider it

conjugal and part separate


If the beneficiary is the other spouse

Proceeds belong to the beneficiary spouse, even if

exclusive property
Pensions from that annuity (ex. P5K a month) is

gratuitous (exclusive)
If it is a pension, which is given for services rendered,

then it is onerous (conjugal)


Special cases:
o For SSS, the beneficiary is the exclusive owner of the proceeds
o Intellectual property like copyright and patent is the exclusive
property of the creator-spouse (since it is part of ones person
and is just external manifestation of his genius)

paid out of conjugal funds

31

For loans and credit:


o Principal is exclusive property of lending spouse, if from own

reimbursements, which only happens during liquidation of the

money
Interests falling during marriage is conjugal property

partnership

Determine whether there is a change in ownership

o
On tips:
o If it is beyond the service charge, which he is entitled to, then it
is separate (gratuitous)
On damages:
o If actual damages conjugal

But can be separate if losses are based on losses


o

from separate/exclusive funds


If moral, etc. separate because these are paid for suffering,

property
Fruits from separate property net fruits (total fruits minus

principal), which doesnt care about value


If the land is separate property, in CPG, whichever is more
valuable becomes the principal

So if the conjugal house is more valuable than the


reimbursement during dissolution
When should reimbursement be made?

Not required UNTIL there is liquidation of the CP

land is always the principal)


What if the house gets destroyed prior to liquidation of the

ACP

CPG

Support of: a) spouses, b) common


children, c) LC of either spouse
Debts and obligations: a) contracted
by both spouses, or b) by one
spouse for benefit of community
Expenses, taxes, repairs: a) major or
minor upon CP; b) for mere
preservation during marriage of
separate property used by the family

Same

Expenses for: a) either spouses selfimprovement b) what both spouses


donated or promised to common
LCs self-improvement
Ante-nuptial debts of either spouse
that redounded to the benefit of the
family
Expenses of litigation between
spouses, unless found to be
groundless

separate land, then the land becomes conjugal upon


o

Charges upon the ACP/CPG

properties are always separate


Rule on improvements?
o Goes against usual rules on accession (accessory follows the
o

upon the time the improvement was made


If the land is conjugal, the usual rule on property applies (the

happens upon reimbursement during liquidation.

expenses incurred) are conjugal

Compare with ACP? There, fruits from separate

partnership?

There is no conversion because conversion only

etc. and not actual loss


Rule on fruits?
o Fruits from conjugal property gross fruits belong to conjugal
o

BUT change in ownership only vests upon respective

property.
But there is no prohibition against early
reimbursement.

32

Same

Same, except for: b) for mere


preservation during marriage of
separate property (no qualification
because the family already benefits
from the fruits of these)
Same

Same

Same

If exclusive property is insufficient,


but subject to deduction of share of
debtor-spouse upon liquidation: 1)
ante-nuptial debts not redounding to
benefit of family; 2) support for
illegitimate children; 3) liabilities due
to crime or quasi-delict

No need to prove first that


the other obligations of the
AC have been covered
(unlike in CPG where the
other charges must first be
covered), because usually
there are no separate
properties in ACP

N/A

o The spouses, jointly


What if there is disagreement?
o Husbands decision prevails
o But wife may file for proper remedy within 5 years of contract
implementing the decision
What is one spouse is unable to participate or is incapacitated?
o The other spouse may assume sole powers of administration
o

(with no need for judicial declaration)


Does not automatically include power to encumber or dispose,

unless:

1. With consent of other spouse in writing

2. With judicial authorization


Without this, deemed void. But it is a continuing offer on the
part of the offering spouse and the third person. Perfected by
other spouses consent or judicial authorization.

What is the nature of the other spouses consent

Rule for ACP: if community property insufficient to cover for expenses

that is needed?

It must be written consent because mere

(except for the last one, which has a special rule), then spouses are

participation or awareness in the negotiation

solidarily liable with separate properties for unpaid portion


o Reimbursement from AC due upon liquidation
For CPG: debts (ante-nuptial or during marriage) not redounding to

benefit of family, support of IC, and liabilities for crimes will only be

unable to participate in administration, can the other

covered by CP after covering other charges


What is the nature of one spouse acting as surety or guarantor to

spouse obtain judicial authorization to dispose?

No. The judicial recourse is available only when the

another obligation?
o It is deemed as not redounding to the benefit of the AC/CP

because while there can be incidental benefits (e.g. increase in

other spouse is incapacitated or cannot participate.


Can a spouse make donations alone?
o No. He or she cannot make donations from
community/conjugal property unless with other spouses

goodwill) the benefit is not directly redounding to the AC/CP.


Administration of property

CONJUGAL PROPERTY

is not enough.
What if the other spouse is not incapacitated or is not

Who administers conjugal property?

33

consent
Exception:

MODERATE donations for charity or family

rejoicing/distress
What may be disposed by will?

Interest in community property, but not specific properties

therein
EXCLUSIVE PROPERTY OF SPOUSES

of one spouse to the other?


o 1. One becomes the others guardian
o 2. Spouse judicially declared an absentee
o 3. Spouse sentenced to penalty carrying with it civil interdiction
o 4. Spouse becomes fugitive from justice or in hiding as

there is similar other just cause?


o The court can appoint some other person as administrator
N.B. Administrating spouse cannot dispose of other spouses separate

authorization is in summary procedure


3. In absence of sufficient community property, separate

use fruits/proceeds to cover absent spouses share.


Contra: Abandonment by one spouse, or failure to comply with familial
obligations (marital, parental, property)
o Aggrieved spouse may petition court for:

1. Receivership

2. Judicial separation of property

3. Sole administration of the AC/CP


o What is abandonment?

Left conjugal dwelling without intention of returning

Prima facie assumed if one left conjugal dwelling for 3

Dissolution of ACP/CPG same rules

specific separate property of the other spouse and

properties

right to demand support


2. When consent is needed from that spouse by law, judicial

be given judicial authority to administer or encumber

where there is no need for court approval to assume

properties of spouses are solidarily liable for support.

The present spouse, in summary proceedings, may

accused in criminal case


N.B. Distinguish this from administration of conjugal property

administration
What if the other spouse is incompetent, has conflict of interest, or

them.
Compare to: mere separation in fact. This does not affect the property
regime, except that:
o 1. Spouse who leaves conjugal home without just cause loses

What is the general rule?


o Spouses administer their exclusive properties
When can the courts transfer administration of exclusive property

What is specially required for a voluntary dissolution?

Notify all creditors. Court takes measures to protect

months or failed to give any information about his

What are the grounds to dissolve the regime?


o Where marriage is dissolved:

1. Death of one party

2. Nullity

3. Annulment
o Where marriage is not dissolved:

4. LS

5. Judicial separation of property


What is Voluntary dissolution of regime?
o May be jointly filed in a verified petition by the parties

whereabouts for same period


Compare abandonment to separation in fact?
o Separation in fact is physical separation. It can be with or
without just cause (if without just cause, no right to be
supported). It doesnt follow that when there is de facto
separation that the spouse is not complying with marital
obligations.

34

Abandonment implies failure to comply with familial obligations

too.

CP (remember the situation where an expensive

Liquidation of ACP/CPG and liabilities

Procedure for liquidation of ACP:


o 1. Inventory list community and exclusive properties
o 2. Debts and obligations of community paid from assets

If insufficient, solidarily liable with separate properties


o 3. Deliver remaining exclusive property
o 4. Deliver net assets of community (those remaining)

According to agreed division

If none, equal division

Unless there is voluntary waiver

TAKE NOTE of forfeiture of net profits (increase of

o
o

value of community property at time of dissolution


from time of marriage) for:

Termination of subsequent marriage and

o
o

spouse in BF

Void ab initio and spouse in BF

Annulment and spouse in BF

LS and spouse is offender


5. Deliver presumptive legitimes of children
6. Conjugal dwelling and lot delivered to spouse with majority

family from conjugal funds

Unless indemnified from some other source


o 7. Net remainder of CP profits:

Divide according to agreement

If none, equally

Unless there is waiver or forfeiture of share


o 8. Deliver presumptive legitimes
o 9. Conjugal home same rules as ACP
Rule on dissolution by death (ACP and CPG):
o Liquidation in judicial proceeding to settle estate of deceased
o What if there is no judicial estate settlement proceeding?

Within one year, must:

Judicially liquidate AC/CP

Or extra-judicially liquidate AC/CP

If no liquidation within 1 year period, any disposition or

court decides otherwise


If no majority, court decides based on best interest of

children
Procedure for liquidation of CPG:
o 1. Inventory list community and exclusive properties
o 2. Credit CP for amounts advanced to cover spouses personal
o

house is built on a spouses exclusive property)


4. Debts and obligations of CP paid from assets

If insufficient, solidarily liable with separate properties


5. Deliver remaining exclusive properties
6. Pay spouse for deterioration of movables used to benefit

encumbrance of the community/conjugal property is

of common children

Children below 7 deemed to choose mother unless

Use of exclusive funds for acquiring CP


For value of exclusive property which became part of

obligations and debts


3. Reimburse spouses for:

VOID
What if there is subsequent marriage without liquidation?

Mandatory regime of CSP for the subsequent

marriage
Simultaneous liquidation of two marriages contracted before FC:
o Depending on agreement
o If none, determine the capital, fruits, income of each
o

community prove by evidence


If there is doubt, divide between two communities in proportion
to capital and duration of each

35

When does this apply?

In a situation as in where H and W got married, W


died, but H did not liquidate. H gets married to W2,
and then their marriage is dissolved. Liquidation

would be simultaneous.
NOTE, however, that this will not happen under the
FC because if there is no liquidation of the first
marriage, the second marriage is under mandatory

regime of CSP.
For CPG support during liquidation:
o Taken from fruits and income pertaining to their shares in
o

properties under liquidation


If the support exceeds fruits and income pertaining to them

excess is considered advances on shares


If the liabilities of the CP exceed the assets, SS is not entitled

to any support during liquidation


Separation of properties during marriage

What is the general rule?


o Separation of property can only take place by judicial order
o Either: voluntary or for sufficient cause

1. List of sufficient causes [see below]

2. Voluntary dissolution [see above]

How to [see above]

3. Mandatory regime of CSP


Grounds for judicial separation of property: (CABPA-ABAPS)
o 1. Civil interdiction
o 2. Judicially declared an absentee
o 3. Judicial declaration of loss of parental authority
o 4. Abandonment by spouse or failure to comply with familial
o

6. At time of petition, spouses are sep-in-fact for at least 1 year

and reconciliation is highly improbable


N.B. For grounds 1, 2, and 3 enough to present judicial

declaration
Procedure for voluntary separation:
o 1. Spouses file verified joint petition to court
o 2. Petition lists all creditors
o 3. Creditors personally notified

No need for publication


o 4. Pendency: AC or CP supports spouses or children
o 5. Court enters decree to convert regime to CSP
o 6. Record in LCRs and registries of property
What are the effects of separation of property?
o ACP or CPG dissolved and liquidated and CSP will apply
o Liability of creditors spouses still solidary with separate
properties
o Mutual obligation to support still continues unless there was LS
o Rights of creditors not prejudiced
How can there be revival of prior property regime?
o File motion in court for decree of revival
o When:

1. Civil interdiction terminates

2. Absentee returns

3. Court satisfied that abusive admin will not abuse

again
4. Parental authority restored
5. Abandoner returns
6. Separated-in-fact spouses resume common life
7. Agreement, after voluntarily dissolving regime

NO voluntary separation may be granted


again

obligations
5. Administrator-spouse has abused privilege

CSP Regime

36

When does CSP apply?

o Chosen through MS
What are the kinds of separation of property?
o Extent:

1. Total

2. Partial: those not agreed upon as separate shall be

own property without others consent


Each spouse gets his earnings from profession, business, and

different from normal co-ownership)


o Until termination of cohabitation
What is the rule on termination of cohabitation if marriage is void,
and only one party is in GF?
o Share of party in BF in co-ownership forfeited in favor of:

1. Common children

2. In case of predecease of common child, to

all fruits from property


How are family expenses borne?
o Borne by both spouses, in proportion to income
o In case of insufficiency or default: in proportion to market value

descendants of that child

Repudiation leads to representation for

of separate properties
What is the rule on liability to creditors?
o Liability is solidary [note!]
o

descendants

3. If none, to innocent party


Forfeiture upon termination of cohabitation

Parties not capacitated to marry or not living together exclusively (148)

Parties capacitated to marry and living together exclusively (147)

family and household


Where does this rule not apply?

1. Gratuitous title

2. Acquired in exchange for exclusive properties


When can there be disposition of properties owned in common?
o Cannot dispose unless with consent of the other (this is
o

PROPERTY REGIME OF UNIONS WITHOUT MARRIAGE

Thus, according to shares actually put in


What is the presumption?

Party who did not participate in acquisition of property


contributed jointly, through care and maintenance of

AC property
o As to kinds of property:

1. Present property

2. Future property

3. Both
What are the rules in administration and ownership?
o Each spouse administers and owns, disposes, encumbers, etc.
o

Requisites for 147?


o 1. Man and woman capacitated to marry each other
o 2. Live exclusively with each other as husband and wife
o 3. Without marriage or under void marriage
o 4. Both have no existing valid marriage with someone else
Who owns wages and salaries?
o Owned in equal shares
Who owns property acquired jointly through work or industry?
o Governed by co-ownership (proportionate ownership)

To which does this apply to?


o 1. Bigamous marriages
o 2. Adultery or concubinage
o 3. Both man and woman are married to other persons
o 4. Multiple alliances of same married man
What properties are owned in common?
o ONLY properties actually acquired by joint contribution are
owned in common, proportionate to contributions. So:

Wages and salaries are EXCLUSIVE

37

Care by other party to home, children, etc. or moral

inspiration is not included


What is the presumption for actual contributions?

Actual contributions deemed to be equal


If one party is married to another:
o Share in co-owned properties accrue to AC or CP of prior
o

marriage
If party in BF, forfeit shares to:

1. Common children

2. Descendants of that child in case of predecease

3. Innocent party
If both are in BF rules on forfeiture still apply. [Dean Del:

members?
o Prior earnest efforts to compromise
What are exceptional cases, because they cannot be

value allowed by law


Except:

1. Non-payment of taxes

2. Debts prior to constitution of FH

3. Debts secured by mortgage on the premises before

THE FAMILY AND FAMILY HOME


Which relations fall under the family?
o 1. H and W
o 2. Parents and children
o 3. Ascendants and descendants
o 4. Brothers and sisters, whether full or half-blood
What is the special pre-requisite for suits between family

must include the land.


What is the exemption of a FH?
o It is exempt from execution, forced sale, or attachment to the
o

so magpapalitan lang sila ng property.]

Can FH be on rented land?


o No. The implication is a FH must be permanent, and hence

or after construction
4. Debts due to laborers who constructed or rendered

materials for the building


How is a FH constituted?
o Automatic, by operation of law

But this provision of the FC does not retroact to FHs


constructed prior to 3 August 1988
o Only one FH allowed
Who are the beneficiaries of a FH?
o 1. H and W or the unmarried head of family
o 2. Ascendants, descendants, brother and sisters (whether
legitimate or illegitimate) who are actually living in the FH and

compromised?
o 1. Civil status of persons
o 2. Validity of marriage/LS
o 3. Ground for LS
o 4. Future support
o 5. Future legitime
o 6. Jurisdiction of courts
Who may constitute a FH?
o Jointly by spouses
o Unmarried head of family

dependent on the head for support


How is a FH sold?
o By the owner, with written consent of person constituting it, the

latters spouse, and majority of beneficiaries of legal age


What if one of the spouses (or both) or the unmarried head die?
o The FH continues for 10 years or as long as there is still a

minor beneficiary
o Heirs cannot partition it unless there is compelling reason for it
What if the FH increases in value beyond that allowed by law?
o If it is due to voluntary improvements introduced by the owners
or beneficiaries, then the FH can be executed.

38

PATERNITY AND FILIATION

Kinds of filiation

1. By nature
o Legitimate
o illegitimate
2. Adoption

A. Legitimate:
o 1. Conceived OR born during marriage of parents:
o 2. Children conceived through artificial insemination of wife

Either with sperm of husband, of a donor, or both


o What is the special requirement for artificially inseminated

before the birth of the child


B. Illegitimate:
o Those conceived AND born outside valid marriage
o Exceptions?

1. Void marriages where solemnizing officer had no

meeting)
B and G are college sweethearts in Manila. When they graduated,
G was 7 months pregnant. Unknown to G, B promised to marry his
childhood friend C in Cebu after graduation. 2 months before B
and C married, G gave birth to W. During B and Cs marriage, C
gave birth to X. Unbeknownst to C, whenever B has a business trip
in Manila, he still sees G and because of this, G gave birth to Y.

C. Legitimated
o Who can be legitimated?

Children conceived and born outside of wedlock of

Unbeknownst to B, when hes away, C has relations with the


plumber, P. C gave birth to Z. C died. Afterwards, B and G got
married. What is the status of the children?
o 1. W is legitimated, because W was born when B and C were
not yet married, so there was no impediment. The subsequent

parents NOT disqualified by any impediment to marry


o

inheritance by heirs
From five years from time their cause of action arises

Cause of action accrues from death of


putative parent (From minutes of committee

procedure in a written instrument


Record it in the civil registry, with birth certificate

authority, but at least one spouse in GF


2. Art. 36 nullity
3. Art. 53 nullity

descendants
Who can file an action to impugn legitimation?

Only by those prejudiced in their rights

Ex. testamentary and intestate heirs

Creditors excluded because they only step


into the picture when there is repudiation of

children?

Husband and wife must both authorize or ratify

parents

N.B. Annulment of voidable marriage does not affect


What is the effect?

1. Effects retroact to time of childs birth

2. Legitimation of children who died before the


marriage benefits descendants

So it can benefit a dead child with his own

Children by nature

Through subsequent valid marriage between the

each other
How are they legitimated?

39

marriage of B and G legitimated W.


2. X is the legitimate child of B and C. G is Xs step mother.

3. Y is the illegitimate child of B and G because Y was

conceived and born outside of valid marriage.


4. Z is the legitimate child of B and C. Even if P was the real

father, Z was conceived and born within a valid marriage and

acknowledged A and B as his illegitimate children. X died.

case, its obvious that C was not the mother. Its more

On the strength of this declaration, A and B sought to

difficult in the case of fathers.

participate in the settlement of Xs estate, which the heirs


of X contested. Does the acknowledgement of illegitimacy

Actions regarding filiation

hold water?

No. Both A and B were conceived/born under a valid

A. To claim filiation
o What are the methods to claim legitimate filiation?

Primary methods:

1. Record of birth in civil registrar

2. Admission of legitimate filiation in:


o A. Public document or
o B. Private handwritten instrument

lifetime
H and W were married and during their marriage, children
A and B were born. X, in a notarized instrument,

will remain that way until or unless B impugns his legitimacy.

NOTE: the rule is different from Y, because in Ys

1. PRIMARY methods: up to childs lifetime


2. SECONDARY methods: up to alleged parents

marriage and are thus legitimate. Recognition of


illegitimacy, even through proper means, cannot
defeat presumption of legitimacy of children, which

and signed by parent concerned


Secondary methods:

1. Open and continuous possession of status

of legitimate child

2. Other means in ROC and special laws


When must action to claim legitimate filiation be filed?

1. By child, during his or her lifetime

2. Transmitted to heirs (for up to 5 years), if:

Child dies during minority

Or in state of insanity

N.B. Action filed by child survives even if either party

was not impugned by H in this case.


B. To impugn filiation
o How may the legitimacy of a child be attacked?

ONLY in a direct action or proceeding. (Sayson v. CA)


o Who may impugn a childs legitimacy?

1. Husband ONLY, by default

2. Heirs of husband, if:

A. Husband dies before expiration of period

fixed to bring action


B. Husband dies after filing complaint, and

did not desist

C. Child born after death of husband


What are the only grounds to impugn a childs legitimacy?

1. Physically impossible for H to have sexual


intercourse with W within first 120 days of 300 days

dies
What are the methods to claim illegitimate filiation?

Same way, and with the same evidence as legitimate

(first 4 months of the 10 months) which immediately


preceded birth of the child; due to:

Physical incapacity of H to have sexual

filiation
When must action to claim illegitimate filiation be filed?

intercourse with W

40

H and W living separately, and sexual

intercourse not possible


Serious illness of H preventing sexual

Or mother has been sentenced as adulteress


Mother contracting a second marriage within 300 days (10 months)
after termination of first marriage:
o Child belongs to the first marriage if:

Child born within first 180 days (6 months) after

intercourse with W
2. Proved through biological or scientific reasons, that
the child could not have been that of the H

Human Leukocyte Antigen (HLA) test

conclusive determination
Blood tests can disestablish paternity
DNA tests A.M. No. 06-11-5-SC
o CONCLUSIVE of non-paternity
o If probability of paternity value is
o

less than 99.9% = corroborative


If probability of paternity value =
99.9% or higher, then it creates a

terminated
Child belongs to the second marriage if:

Child born after 180 days after second marriage

solemnized
(Even if within 300 days after first marriage

terminated)
So the rule is: BOTH periods must concur for the first
marriage to have the child. Else, second marriage

disputable presumption of paternity


3. Artificial insemination with no written authorization

wins.
N.B. these are mere presumptions. And regardless, the child

or ratification

Or gotten through mistake, fraud, violence,

will be legitimate
What about children born after 300 days (10 months) of

intimidation, undue influence


What is the period to impugn?

A. Within 1 year from knowledge of birth or recording

termination of the first marriage?

No default status. Up to the one alleging legitimacy or


illegitimacy.

in civil register: if husband (or heirs) resides in city

where birth took place or was recorded


B. 2 years, if residing in Philippines but not in place of

birth or recording
C. 3 years, if abroad
If birth concealed or unknown, when do you start

ADOPTION
RA 8552

counting the period?

From knowledge of birth or recording,


o

second marriage is solemnized


AND MUST BE within 300 days after first marriage

whichever came first


Considered legitimate even if:

Mother declared against its legitimacy

When can a Filipino adopt: (capacity, character, age)


o 1. Legal age
o 2. Full civil capacity and legal rights
o 3. GMC, and not convicted of crime involving moral turpitude
o 4. Emotionally and psychologically capable of caring for
o

41

children
5. Can provide care/support

6. At least 16 years older than adoptee, except if:

Adopter is biological parent

Spouse of adoptees parent


Alien: (same, capacity, residence, age, no abuse)
o 1. SAME as above
o 2. Certified by diplomatic/consular office that he has legal
o

to adopt her younger minor brother. This is fine. But


if her American husband is not qualified (ex. there is
no residency requirement yet), then he cannot adopt.

capacity to adopt under his laws and that the country allows
o
o

application, and maintains residence until adoption decree


entered, except:

1. Former Filipino who seeks to adopt relative by

the brother is not the legitimate child of the wife yet.


Who may be adopted?
o 1. Person below 18 judicially or administratively declared
o
o
o

consanguinity within 4th degree


2. Adopting legitimate son/daughter of Filipino spouse
3. Married to Filipino spouse and seeks to jointly
adopt a relative by consanguinity within 4th degree of

The petition will fail.


Note: in the case above, the waiver of residency
period does not apply to the alien husband because

the adoptee to become his son/daughter


3. Country has diplomatic relations with Philippines
4. Living in Philippines at least 3 years before adoption

Ex., a former Filipina who became American wanted

Filipino spouse
5. At least 27 years old and 16 years older than adoptee at

time of application
Guardians, with respect to their wards:
o 1. After termination of guardianship
o 2. Clearance of liabilities
Who must adopt?
o By default, the husband and wife must jointly adopt
o Exceptions to this?

1. Spouse adopted legitimate child of the other

2. Spouse seeking to adopt own child

Other spouse must consent

3. Spouses legally separated


o N.B.: This rule is important. BOTH the H and W must jointly

available for adoption


2. Legitimate child of one spouse by the other spouse
3. Illegitimate child of adopter, to improve status
4. Person of legal age, if prior to adoption and since minority,

consistently treated and considered as own child by adopter


o 5. Child whose adoption has been previously rescinded
o 6. Child whose biological/adoptive parents died

But not within 6 months of death of parents


Whose consent is needed for the adoption?
o 1. Adoptee, if 10 years old or above
o 2. Biological parents of child if known or government
o

instrumentality caring for the child


3. Legitimate and adopted children of adopter and adoptee, if

over 10 years old


4. Illegitimate children, if over 10 years old and living with

adopter and spouse


o 5. Spouse of adopter or adopted, if any
What are the effects of adoption?
o 1. All legal ties between the biological parents and the adoptee
are severed

Except when it is the biological parent that is the

adopt. If one spouse is qualified but the other is not, then there
can be no adoption.

42

adopter
2. The adoptee becomes the LC of the adopter

(just them)
Who can rescind adoption?
o JUST the adopted child. Never the adopter.
Grounds to rescind?
o 1. Repeated physical or verbal abuse by adopter
o 2. Attempt on life of adoptee
o 3. Sexual assault or violence
o 4. Abandonment/failure to comply with obligations
Effects of rescission:
o 1. Restores parental authority of biological parents, if adoptee
o
o

3. Adopter and adoptee obtain reciprocal successional rights

governmental or accredited private intermediate agency in the

is still a minor/incapacitated
2. The amended birth certificate is cancelled
3. Rights to succession are restored, but not as far as there are

o
o
o
o
o
o

counseling in his country


4. Not convicted for crime involving moral turpitude
5. Eligible to adopt under national law
6. Can give proper care and support to the child
7. Agrees to uphold UNCRC, Philippine Law, and the R&R of

o
o

the Inter-country adoption act


8. Country has diplomatic relations with the Philippines
9. Possesses all qualifications and none of the disqualifications

country of the prospective adopters


What supporting documents must be filed?
o 1. Birth certificate of parents
o 2. Marriage contract if married or divorce decree
o 3. Written consent of their biological children above 10 years of
o

age (sworn statement)


4. Physical, medical, and psychological evaluation by licensed

o
o
o

physician and psychologist


5. ITRs or other documents showing financial capability
6. Police clearance
7. Character reference of local church or minister, employer,
and member of immediate community knowing the applicant

already vested rights


Who may adopt under the Inter-country Adoption Act (RA 8043)?
o 1. At least 27 years old and at least 16 years older than the
prospective adoptee

Except:

1. Adopter is biological parent

2. Adopter is spouse of biological parent


2. If married, the spouse must jointly file for adoption
3. Has capacity to act under national laws and undergone

2. With the Inter-country Adoption Board through a

for at least 5 years


8. Recent postcard-size pictures of applicant and immediate

family
What applies for judicial proceedings?
o Rules of Court

SUPPORT

under Philippine law


Where is a petition under RA 8043 filed?
o 1. RTC with jurisdiction over the child

43

What is covered by support?


o Everything necessary for sustenance
o Food, clothing, medicine, education, transportation
How long does support last?
o Support doesnt end at age of majority
o It is still the parents obligation
What is the order of support?
o There is a system of priority in support
o This is valuable if there is not much resources to provide
support with
o System of priority found in FC
Who are the persons required to support each other?

1. Ascendants and descendants

No matter how far removed

In the case of illegitimate ascendants or descendants


in the direct line:

Seems to stop at parents, and their

and their descendants, whether legitimate or


illegitimate
But the effect is really just the same. The
code just wants to make it clear that there
are no illegitimate parents or illegitimate
ascendants. But basically it is the same. So
illegitimate children can claim from their
o

illegitimate grandparents.
2. Collateral relatives: limited to brothers and sisters

No other collateral relatives

Half-brothers and sisters are considered legitimate

and are entitled to support


If the illegitimate brother or sister is a minor, you are

required to support him or her


If he or she is no longer a minor, you ask for the

reason why he needs support

E.g. he is indolent, then you are not required

E.g. he is a paraplegic, sick, and has no job

provide support to the innocent spouse.


Can you refuse to give support to a philandering

priority of support. Just give enough to everyone.


It will be prorated based on the ability of the provider to give.
So a child who earns more must support the parent more than

marriage contract. If you remove the validity of the

legal defense to deny support.


However, an unjustifiable refusal to live with

before going up. It alternates


Rule on plurality:
o When you have enough, you do not have to worry about the
o

3. Spouses

The only thing that binds them together is the


marriage, then there is no obligation to give support.
This is why the guilty spouse may still be required to

support.
Priority of support:
o 1. Spouse

Different from succession, where spouse is only #4


o 2. Nearest descendant
o 3. Nearest ascendant
o 4. Brothers/sisters
o Order:

Spouse

Children

Parents

Grandchildren

Grandparents

Etc.

N.B. Thus the rule is you do not exhaust going down

opportunities, then you are required to


o

No. Unless there is actual LS, there is no

ones spouse is a ground to refuse to give

children, whether legitimate or illegitimate,

the child who earns less.


The court can demand one person to advance, and then the

person demands from the rest.


Can the right to receive support be levied upon by attachment or
execution?
o No. Legal support is exempt from attachment and execution.
But contractual and testamentary support is NOT exempt from

spouse?

44

attachment and execution.


The latter are in excess of what one is required to give

Can judgment for support be considered final and res judicata?


o No. Its always subject to modification, depending on need and

parental or maternal line. If there is clash,

capacity to support.

PARENTAL AUTHORITY

How does the rule on parental authority differ from support?


o Parental Authority is time-bound: it only lasts until the children
o

reach age of majority


Thus, the only freak situation is the giving of consent for

marriage, even until 21 years old. This is the outlier.


What does Parental authority cover?
o 1. Custody
o 2. Discipline (proportionate to offense)
What are the concomitant obligations?
o Support
o Moral and spiritual guidance
o Provide good environment, etc. (PD 603)
Two types of PA:
o 1. Parental authority over the person

Parents

ARE ALWAYS FIRST

Parents only lose if shown to be unfit

Having more resources has never been the

they go to court

2. Eldest B/S over 21

3. Anyone with custody over the child


And concomitantly, special parental authority

Teacher, in the classroom or outside the

classroom, for recognized school activity


Implication: responsible for injury or death

over child
o Defense: due diligence
The teacher exercising special parental
authority is SOLIDARILY AND PRIMARILY
liable. The parents and those with substitute

parental authority: subsidiarily liable


2. Parental authority over property of the children

Legal guardianship

Automatic if value of childs assets are less

than P50,000
If more than P50,000: required to file a bond
and must be appointed by the court in a

summary proceeding
Even if you are granted authority by the
court, legal guardianship authorizes only
acts of administration; NOT acts of

criteria
Take note of tender years doctrine (in

custody cases, a child under 7 goes to the


mothers custody unless there are compelling

1. Grandparents no preference, whether

reasons otherwise)
If parents are gone, substitute parental authority

ownership
There is separate approval if you want to sell the
childs properties
Rules on property of minor children:

1. Properties of children (regardless of how


acquired)
o OWNED by the children. Even

(BOTH parents must be gone)

minors can own property.

45

Parents only have legal


guardianship. They can administer

it, and must account in a fiduciary


o

capacity.
If LC joint admin by F and M; if
disagreement, M wins, but F can

seek court redress


2. Fruits and income of the property
o Can be used by the parents
o Not for their own; ONLY to support
o

o 6. Final judgment by court divesting parental authority


o 7. Judicial declaration of absence or incapacity
Grounds for suspension and deprivation of parental authority?
o 1. Conviction of parent that has civil interdiction

Automatically reinstated upon service of penalty,

the child
If there is excess, it can be used for

collective needs of the family


3. Properties owned by parents
o There can be minor children tasked
properties
OWNED by parents
Fruits and income go to:

Parents (but parents must

Funerals

pay the children, which


should be the same
amount they wouldve paid

a 3rd person administrator)


Children (as earnings, not
treated as advance on

of lasciviousness
3. Subjected child or allowed him to be subjected to sexual
abuse.

What is the special rule under this ground?

Deprivation of PA is permanent

to administer certain parents


o
o

pardon, or amenesty
2. Court, in action, finds that the parent:

A. compels child to beg

B. Treats child with excessive harshness or cruelty

C. Gives child corrupting orders, counsel, example

D. subjects child or allows him to be subjected to acts

legitime)
When is parental authority terminated?
o 1. Death of parents or death of child
o 2. Emancipation of child
o 3. Adoption of child
o 4. Appointment of general guardian
o 5. Judicial declaration of abandonment

Who has the duty and right to make funeral arrangements?


o 1. Spouse
o 2. Descendants of nearest degree
o 3. Ascendants of nearest degree
o 4. Brothers and sisters
o What if there are descendants of same degree or several
siblings?

Older is preferred
o Who has preference for ascendants?

Paternal side
Against what property are funeral expenses chargeable?
o Property of deceased
o If married, charge to conjugal property

Emancipation

46

When is someone emancipated?


o Just by reaching 18
Still pegged at 21:
o 1. Parental consent for marriage
o 2. Art. 2180 of NCC (respondeat superior)

Does the FC retroact?


o Yes, as long as it does not affect vested rights (ex. Illegitimate

SURNAMES

Purpose:
o 1. Interest of the State: because it seeks to prevent confusion

of identity
o 2. To prevent escaping from criminal liability
What is the legal name of a person?
o What appears in the birth certificate
To change: Rule 103 of ROC

was under that name. In renewal, she asked the DFA if she
can return to her maiden surname. But there is no annulment,
or whatever ground to revert. She claimed that she had the

What can you use as surname?

Legitimate and legitimated children:


o MUST use fathers surname
Illegitimate children:
o Only mothers surname
o Revilla law: allows use of fathers surname even if illegitimate, if

o
Rules:
o

option.
HELD: Cannot do this.
ANNULMENT

If guilty spouse, MANDATED to return to maiden

o
o

recognized in a private handwritten instrument or public

no turning back
Options:

1. Keep maiden name

Ms. Gloria Macapagal

2. Use maiden name plus husbands surname

Ms. Gloria Macapagal-Arroyo

3. Use Mrs., then husbands surname

Mrs. Jose Miguel Arroyo


Remo v. DFA
o Woman adopted legally her husbands surname. Her passport
o

children)

surname
Married women:
o Not required to use surname of the husband. Can retain
maiden name

If you change your surname to your husbands, theres

Retroactivity of the FC

If solely adopted by married woman, use married womans

document

This is not mandatory


Adopted children:
o If adopted by both H and W, use husbands surname
o If solely adopted, use sole adopters surname

47

surname
If innocent spouse, may retain husbands surname or

revert, unless she or the husband has remarried


NULLITY same
LEGAL SEPARATION

Whether guilty or not, retain since they are still


married
DEATH of husband

Can still use the husbands surname

May revert to maiden name

Or add Vda. de Surname


What is the rule on junior?
o You can only give junior to the son.
o There is no rule on giving daughters junior
What entries in the Civil Registry may be changed or corrected

of power of attorney was left with someone else, then five


o

without judicial order?


o ONLY clerical or typographical errors and first/nicknames may
be changed under the Clerical Error Law (RA 9408)
Cannot change:

Nationality

Sex

Age

Status
o NOTE: name can only be changed once
When can there be change of name under Rule 103?
o N.B. you can change surnames through Rule 103
o 1. Name is ridiculous, tainted with dishonor, extremely difficult
o

to write or pronounce
2. Consequence of change of status, such as when child is

o
o

legitimated
3. Change is necessary to avoid confusion
4. To improve social standing, as long as in doing so, there is

2. Declaration of absence
o Two years from time of disappearance, unless administration

period of time

Administrator of absentee is appointed


o If he reappears, he takes back his properties
3. Presumptive death
o Here, transfer to administrator of presumptively dead person
o If proven to be dead, then transfer to administrator or executor

no injury to the State or third persons (Caledron v. Republic)


o

ABSENCE

of estate

Then proceed to settlement of estate


Periods?

7 years of absence presume dead

10 years for purposes of succession

If over 75 years of age down to 5 years


Periods for purposes of declaration of presumptive death
for remarriage?

4 years for ordinary absence

2 years for extraordinary absence

What is the difference?

Four years there is no danger of death


If the person reappears, return his assets to him

If the spouse remarried, then follow Arts. 42 and 43 of


FC

Stages:

years
Procedure; prove that he has been missing/absent for a certain

1. Provisional absence
o An ad hoc stage, since there are certain things that have to be
o

PROPERTY

done (ex. Signing contracts, withdrawing from bank)


Legal representation: spouse is preferred

Only exception: when there is legal separation

But court can appoint someone else if there is

CLASSIFICATION OF PROPERTY

reasonable ground

48

How does the code define property?

o
o

lease agreement stated that they are considered personal property.


What are they?
o Personal property, based on stipulation between the two
o

land

Those that cannot be separated without damage


3. Immovable by destination

Ornaments

Machines

Animal houses

Loading docks

Fertilizer actually used


4. Immovable by analogy

Contracts for public works

Servitudes and other real rights over immovable

parties.
As to third persons in GF, they are real property, consistent with

the code.
What is the controlling factor for immovable by destination?
o Intention of the owner of the property in question.
Give examples of immovable properties by destination.
o Statues, etc, used for embellishment.
If a painting is embedded into the cement wall of a house, thus
becoming part of the wall, what happens to it?
o The painting becomes immovable by incorporation. Because
o

the painting will be destroyed when you try to remove it.


It doesnt matter what the intent is; the fact of incorporation is

the controlling factor.


Does ownership of the painting and the wall matter?

No. The fact of incorporation is what matters.


X constructs a building on a piece of land he is leasing from Y. Is it
o

real or personal?
o Real. It doesnt matter that who owns the land if by

property
Actually, the only one that is real property by its very nature is land.
Buildings, etc. only become immovable property because they are

incorporation. It only matters if by destination.


But if X and Y enter into a contract that deems the building as
chattel, can it be treated as such?
o Yes (Navarro v. Pineda). So while constructing the building on

incorporated/adhered to the soil.


o If the bahay kubo can easily be moved and transported, then it

Machines placed in a chocolate-making factory were subjected to a


writ of seizure, which can only apply to personal property. The

those not subject to appropriation.


o The code weirdly interchanges the use of these two words.
What are the classifications?
o Real/immovable or personal/movable properties
o Public dominion or private ownership
What are real properties?
o 1. Immovable by nature

Land
o 2. Immovable by incorporation

Buildings, constructions adhered to the soil

Trees, plants and growing fruits, while attached to the

Those subject to appropriation by man.


Things would thus be a broader concept since it covers even

leased property does not per se affect the buildings status,

is personal property, not real property.


Incorporation can be to another immovable; need not be to the soil per

coupled with the declaration, it can. (Tumalad v. Vicencio)


But as to third persons, its considered real property. So if its

se. Also, a consideration is if it cannot be separated without breaking

publicly sold, one must compl with conditions precedent for the

the material or the obect (this refers to the attached object, obviously,

sale of real property. Else, it is void. (Manarang v. Ofilada)

because even if land breaks, it still has value.)

49

When there is a chattel mortgage between two persons over a

building and a real estate mortgage over the same property

Loading docks
o This covers, for instance, a floating platform made of wood
and metal where machinery of a petroleum corporation are

towards another, the latter wins out because the CM is void as

attached. The platform was tethered to a ship, which was

regards third persons. (Associated Insurance v. Isabel Iya)


What about a CM over machinery?
o It can be valid even as to third persons, since the machine is

anchored on the seabed. Real or personal?

If intended to remain at a fixed place, real.

If it can be moved around and towed to other vessels,

only real property by destination if it directly meets the needs of


the business. If its just stored in the factory, then its personal

property.
If I hang the painting on the wall of Justitia (and I dont own
Justitia)?
o It does not become immovable by destination because it has to
found, and he intends that it be an embellishment.
Ateneo owns a St. Thomas More painting and hangs it in the walls

of Justitia. What happens?


o It is immovable property by destination, because there is intent

to make it an ornament and to keep it there indefinitely.


Machinery/equipment/receptacles placed in building or tenement where

work or industry is done. Also by destination.


o They are immobilized by intent of the owner.
o Ex. Computers used in a computer shop, and owned by the
o

owner of the building.


NOTE: does not apply to rented spaces in malls, because you

do not own the place; it is just for lease.


Ex. Sewing machines in a clothing manufacturing warehouse, if

properties.
Is a mortgage on land movable or immovable?

Immovable if registered in ROP

Movable if just between parties


What about shares of stock for real estate property?
o PERSONAL property. Shares of stock are always personal
o

be placed by the owner of the place where the painting is

personal.
Fertilizers
What are those by analogy?
o Contracts for public works, and real rights over immovable

property.
What are the tests to determine personal property?
o 1. Exclusion test

If not included in the list of immovable property, it is


o

personal property
2. Description test

Can move from one place to another without

impairment to the real property to which they are fixed


3. Considered movable properties by law

Ex. Growing fruits and plants because under Chattel

the machines and the warehouse are both owned by the

person.
Animal houses:
o If you intend to keep it there forever, then it and the animals
o

Mortgage Law, they are movables


Even if they are listed as immovable property in 415.
How to resolve: only considered as chattels under
Chattel Mortgage Law. Otherwise, immovable under

become immovable property.


Ex. Dog house in ones house, and the dog himself becomes

immovable property.

50

415
4. Considered as personal property by analogy

Contracts, choses of action (right to sue or be sued)

Radio frequencies
Shares of stock of ANY corporation, even if the

corporation owns immovable property


Classification in fungible or non-fungible/consumable or nonconsumable:
o Only applies to personal or movable properties
o Fungible/non-fungible: based on intent of the parties

Fungible: can be substituted by others of same kind or


o

o
o
o

without being consumed


Money is ALWAYS fungible

Although Arrovo bills are not fungible


Other classifications?
o Constitution:

Public domain

Private land
o Civil Code: - for purposes of ownership

A. Properties of public dominion

1. Properties intended for public use

2. Properties intended for public service


o Being used by the government to

but not open to everybody


o Ex. Police car
3. Patrimonial property
o Private property of the State; used
for entering into some business or
o

utility
Also includes those from first two

classifications that are not anymore

What are the rights of the owner?


o 1. Right to enjoy the property

Jus possidendi

Jus fruendi

Jus utendi

Jus abutendi
o 2. Right to dispose of the property (Jus disponendi)

Sell, encumber, dispose, etc.


o 3. Right of action to recover (Jus vindicandi )
Note: there is no such thing as absolute ownership. What are these
restrictions?
o 1. Those in the Constitution

Eminent domain

Police power

National economy/patrimony powers


o 2. Contractual restrictions
o 3. Provisions in the NCC

Nuisance

Right of way

Art 431: use property the way you want it, but not in

render some service to the people,

encumbrance)
3. Cannot be acquired by prescription
4. Cannot be subject to attachment or execution
5. Cannot be burdened by voluntary easement

OWNERSHIP

quality
Consumable/non-consumable: based on nature

Cannot be used in manner appropriate to their nature

What are the characteristics of property of public dominion?


o 1. Cannot be appropriated
o 2. Cannot be subject matter of contracts (no alienation or

manner injurious to others


Art 432: doctrine of incomplete privilege the greater
right of more people can prevail

for public use/service


B. Privately-owned property

51

Ex. Destroying ones fence to fervent

To whom does the property belong to, and what are the rules on

finders fee?
o Finder owns property 100%
o Finder and owner split 50/50

As long as the finder is NOT a trespasser


X owned a piece of land where treasure was believed to have been

flooding
What are means to protect ones rights?
o Doctrine of self-help Art 429: can use reasonable force to repel
actual or imminent aggression

Elements?

1. Force employed by owner or lawful

buried. He knew Y had a metal detector that could be used to find

possessor

2. Actual or threatened physical invasion

3. Invasion/usurpation is unlawful

4. Force employed is necessary to repel


When does this not apply?

When the property has already been stolen.

treasure. Y agreed and he found treasure. To whom does it


belong?
o To X.
o For there to be 50-50 split, the other person must have found
the treasure by mere chance. Here, X already knew there was
treasure buried in his land.

N.B. some commentator believe by mere chance

The provision only applies to repel the


aggressor.
What are your actions when you lose your property?

Accion publiciana

Accion reivindicatoria
Physical boundaries of property
o Horizontal aspect
o Vertical aspect

Until Rules of Aerial Navigation

Ex. If your property is near an airport, you have

can cover even mere tips, because there is no reason

to distinguish between one who finds treasure by pure


o

special requirements to comply with


What are the rules on hidden treasure?
o If you own the building, it is yours
o Unless it is deemed to have been part of national treasure
o If of interest to the science or arts, the State may acquire it at
o
o

stroke of luck and one with an unsure tip.


Remember, the requisites are:

1. Treasure is money, jewelry, precious objects

2. Hidden and unknown

3. Lawful ownership does not appear

4. Discovery is by chance

5. Discover is not a trespasser


If the thing is of interest to science or the arts, the State may
acquire it by paying just price.

their just price divided 50-50 as well


Ownership must not be indicated

Ex. Golden spoon engraved: Imelda Marcos


Only manufactured products

Because if it is gold in raw state belongs to State

Accession

Its an incident of ownership. Not a means of acquiring originally.


Two things:
o 1. Those produced from property (fruits) whether real or
personal (Accession discreta)

52

internally generated accession

Natural fruits

Industrial fruits

Civil fruits
2. Those attached or incorporated into ones property and

o
o

as far as dividends are concerned,


For civil law if you only bought the shares the day

property.
In contrast, there is NEVER a situation where a sower can be
compelled to buy the property. You can only require him to pay

rents.
What is the rule as to expenses for planting and sowing? Who
pays for cost of the seeds, labor, gathering, preservation, etc.?
o In general, these are charged to the person who receives the

the young of animals

Spontaneous they just grow, without planting,

to sowing.
How does the rule differ?
o When someone plants something in ones property, there is a

split it proportionately.
What is the difference between natural and industrial fruits?
o Natural fruits spontaneous products of the soil; products and

permanent, like trees


Sowing a one-crop harvest like rice, corn, etc.
N.B. the rules that apply to planting differ from rules applicable

situation where you can compel the person to buy your

before, you dont get all the dividends. You have to

animals.

One must cultivate, process, plant, etc.


But the difference between natural and industrial fruits is mostly
between planting and sowing?
o Planting produces something relatively long-term or

What are the kinds of fruits (accession discreta)?


o 1. Natural
o 2. Industrial
o 3. Civil
What are civil fruits?
o Income from use of property, ex. Lease, rent of buildings
o These are synthetic because it is based on income of property.
o Who gets dividends?

For corporate law whoever is the registered owner

These are mostly products of the soil. Does not cover

academic, unlike planting and sowing. What is the difference

Accession discreta

mother gets the young.


Industrial fruits products of the land through cultivation or
labor

cannot be separated without damage (Accession continua)

External forces or additions to the property

Accessory follows the principal

If there are different owners, the owner of the

effort, cultivation
Spontaneous only qualifies soil products. No need

fruits.
And as a general rule, it is the owner who gets these. But
there are instances when the law gives these fruits away to

to qualify animal products and young.


For young of animals, what is the rule?

If one person owns both father and mother,

some other person apart from the owner.


What is the exception?

Antichretic creditor (antichresis) the fruits are given


to the creditor, and the creditor deducts it from the

then it doesnt matter.

53

amount of the obligation, first to interest then the

Movable property:

-ions
Accession industrial
o Building, planting, or sowing
o Building constructions, improvements using unnatural
o

principal
Know difference of Art. 443 and 449
o 449 you dont get reimbursement if its not yet harvested

Fruits have not yet been harvested


o 443 even if youre in BF you still get compensated for

necessary expenses

Those fruits already harvested


448 planter or builder in good faith
o Gets the fruits by law, regardless of whether fruits have been

permanent or transient (ex. Slums, kubo)?

For purposes of accession, yes. Because for there to


be accession, the joining together must have some

harvested or not
o

Accession continua
General rules in accession continua:
o 1. Owner receives the extension/increase
o 2. Accessory follows the principal
o 3. The things must be so united that they cannot be separated
o

without injuring or destroying the property


4. Punitive liability attaches to the party in BF; party in GF is

1. The ideal scenario is the LO, BPS, and OM is just one person. There
is no problem here. Accessory follows the principal. The presumption

Apply the accessory follows the principal rule


There are different accessions for movable and immovable
Immovable property:

Accession industrial persons who employ industry to

degree of permanence.
How many persons are involved in the B/P/S problems?

2 or 3

There is always a land owner (LO)

Second personality is B/P/S (BPS)

Third person is the owner of the materials (OM)

LO/BPS/OM scenarios

not punished
Accession continua those external in character, forming one single
object
o
o
o

materials
Does it matter whether the building construction is

is that the LO is also the BPS and OM.


2. LO and BPS is the same person; OM is a second person
o When is the LO in GF here?

When he does not know the materials do not belong


o

make certain constructions, plantations, sowings


Accession natural brought about by forces of nature;

to him.
When is the OM in GF here?

When he does not know someone else is using it, or


he thinks the materials used by the LO+BPS belongs

no industry involved

Alluvium

Avulsion

Change in river course

Formation of islands

to the LO+BPS.
FIRST THING TO DO: determine whether accession exists. If
the materials can be removed, then there is no problem. (Ex.
Light bulbs take them out and return them)

54

Note the basic rule: when two persons are involved and both

are in GF, give preference to the LO.


If both are in GF, what are the rights of the LO?

Can acquire materials by paying indemnity to the

but pay indemnity.

This option is always present.

Building
o If necessary improvement

Measure of indemnity:

owner of the materials. Measure of expenses: cost of


o

1. LO can acquire what was built, planted, or sown,

the materials at the time of payment.


If the LO was in GF and the OM was in BF, what happens?

Anyone who is in BF loses everything. He loses the

value of the materials and the owner can acquire the


o

actual costs or plus value

materials without need for payment.


If the LO was in BF and the OM was in GF, what happens?

OM can remove the materials, whether or not this

(amount of increase of

causes damage

AND at the same time, OM is entitled to

value at the time you enter

has to pay the OM cost of materials + damages.


If both are in BF, what happens?

Both are in GF.


3. LO is one person; BPS+OM is another person
o When is the LO in GF here?

He is not aware that someone has B/P/S in his


o

acquire the property or


not. But it would have to
stay in the property
regardless, because there

property.
When is the BPS in GF here?

He doesnt know he is not the owner of the land. (So

is accession.)
2. LO can compel the BPS to purchase the land.

NOTE: you can only exercise this option


when the value of the land is not

LOs land was his.) This is why most cases involving

considerably [key word] higher than what is

this involves only portions or property and boundary


disputes.
In all likelihood, there is going to be accession here, unlike in

scenario 2 since here, he builds, plants, or sows. But if it can


o

into possession.
(Strange rule because it
gives the LO option to

he has to own land in the same area also, to think the

value in land).
If luxurious improvement

Measure of indemnity:

damages. Measure: cost of materials.


Or if OM doesnt want to remove the materials, the LO

actual costs.
If useful improvement

Measure of indemnity:

be removed without damage, just allow removal.


If both are in GF, what happens?

planted or built. (Depra v. Dumlao)


Alternative: Can ask for rentals instead.
o Value agree on a lease contract,
o

or if they cannot, court decides.


When the lease period is done,
cannot compel to renew.

55

If he cannot pay the rentals, then

Sower only pays rent. If in GF, just rentals.

you can eject him.


BPSs rights:

1. Receive indemnity

2. If there has been no indemnity given yet,

there is right of retention and no need to pay

rents.
When is there right of removal by the LO against a

BPS, if both are in GF?

Note that this is NOT a principal remedy. It is

subsidiary: you have to choose option #2,


and then the BPS is unable to pay the
o

purchase value of the land.


If the LO is in GF, and the BPS is in BF?

NOTE: EVEN IF what was built, planted, or sown can

for necessary expenses.


BPS also has no right of retention,

even if not paid.


If LO takes second option:
o BPS must purchase it. If he doesnt

pay, LO may sue.


Sulo ng Nayon v. Nayong Filipino: rights of parties in
this case not governed by these NCC rules. Instead,

be removed without damage, BPS cannot remove

the rights are governed by the lease agreement

what he built, planed, or sown.


1. LO can acquire what was built, planted, or sown,

existing between the two entities. The lease is an


acknowledgement of the rights of the parties; thus, a

BUT with different rules.

The only time he must pay indemnity is for

lessee neither a builder in GF or BF. He is just a

NECESSARY improvements.
MWSS case: for USEFUL expense can

acquire without indemnity.


LUXURIOUS improvements LO will pay, if

lessee, governed by the laws on lease.


If the LO is in BF, and the BPS is in GF?
First, ask the BPS in GF what he wants to do. He has

he wants it. If LO doesnt want it, he doesnt


have to take it. Problem is, of course, its

first dibs.
BPS can:
1. Ask for removal. It doesnt matter whether

going to be attached so LO really gets it free

If in BF, rentals and payment of damages.


3. LO can demolish/remove what was built or planted.

This is now a principal remedy in this case.


BPS:

If LO takes first option:


o Is entitled to indemnification ONLY

it causes damage or not.


2. If he doesnt want to remove it, the ball
passes to the LO, who has the following

of charge.
2. LO can always compel the BPS to purchase the

land, regardless of valuation.

For sower in BF cannot be compelled to

choice [just one valid]


LOs choice:
1. LO can acquire it, with indemnity plus
damages.

purchase the land, whether in GF or in BF.

56

2. N/A. NOTE: cannot compel the BPS to

Principal remedy is against the

purchase the land


3. N/A. NOTE: cannot compel the BPS to

BPS, since he took your materials.


Subsidiary remedy is against the

remove what was built or planted.


BPS here cannot compel the LO to sell him the land.

LO if the BPS is insolvent. (Basis:


material rent lien because in this

It is just an option available to the LO.


o If they are both BF?

Then both are in GF.


4. Three persons: LO, BPS, and OM
o When is the LO in GF?

If he did not know that some BPSed in his land.


o When is the BPS in GF?

He thought he owned the land.


o When is the OM in GF?

He did not know someone used his materials.


o As a general rule, the claims are:

OM, as against the BPS

BPS, as against the LO


o First thing to consider: Is there accession? The BPS can

case, the LO received what was


built or planted)
LO chooses OPTION #2:
o OM can choose to remove the thing
o

LO

BPS

OM

Can acquire BPS (pay

Until payment, has right

sown with payment of indemnity including for

indemnity for materials

of retention;

materials (to the OM).


2. LO can sell the land, as long as not considerably

+ labor)

Pays OM for cost of


materials

more valuable. Etc.


NOTE: These are the same rules as scenario 3.
BPS:
IF LO chooses to acquire the thing, BPS has

no right to remove the thing.

For the scenarios in BF,

Just apply the rules in scenarios #2 and #3.

Illustration of LO, BPS, OM all in GF:

choose to buy what was built, planted, or sown.


What if they are all in GF?

Primary option belongs to the LO.

1. LO can acquire was has been built, planted, or

BPS.
There is no subsidiary
remedy against LO.

remove if there is no damage to materials AND the LO did not


o

if there is no damage suffered.


If there is damage suffered

Remedy is against the

OM
LO chooses OPTION #1:

57

Cannot remove
what was
built/planted,
regardless of
whether there
would be damage
of not.
Right to receive
payment from
BPS. If BPS is
insolvent, can
subsidiarily go

Can sell land (if not

BPS pays for land.

after LO. [In latter


scenario, LO in
effect pays twice
for the same
materials]

No right of
retention in case of
non-payment
Right of removal comes

considerably more

Becomes new owner of

in (if it wouldnt cause

expensive)

the land and what was

any damage only, since

built or planted

both in GF).

Illustration of LO, BPS, OM; BPS and OM both in BF:


LO

BPS (in BF)

OM (in BF)

Can acquire BPS. No

Receive payment only

Entitled to receive

indemnity, except for

for necessary

indemnity from BPS,

necessary

improvements. No

who used his materials.

improvements.

right of retention.

[Since both in BF
becomes in GF as
regards BPS]
But no right to
subsidiarily go against

No subsidiary liability of

LO [since LO in GF]

LO.

Can sell land


regardless.

BPS

OM (in BF)

Can acquire BPS (pay

Until payment, has right

Loses everything. Not

indemnity for materials

of retention;

even subsidiary action

OM and BPS in BF
becomes in GF]

against LO.

materials
Can sell land (if not

BPS pays for land.

considerably more

Becomes new owner of

expensive)

the land and what was

removal only when it


damage. [Since both

LO

Pays OM for cost of

Can exercise right of


does not cause

Illustration of LO, BPS, OM; OM in BF:

+ labor)

Pays for land.

Loses everything

built or planted

58

When does subsidiary liability of LO occur?


o Three requisites:

1) LO chose to acquire what was built or planted

2) BPS is insolvent [not mere refusal to pay]

3) OM is in good faith
What is the basic rule on BPS liability in favor of LO?
o BPS is always liable in favor of the LO, if the LO is in GF.
o [Or both BPS and LO are in BF becomes GF]
When is there right of removal?

Only enforceable against BPS, by the OM. So the LO has to

always choose option 1.


The only modification: whether BPS is in GF or BF

If in GF must not cause damage

If in BF regardless
What are the remedies of the LO-gf if the chooses to compel the
o

BPS-gf to buy the land, and the BPS-gf fails to pay?


o 1. Leave things as they are and assume lessor-lessee relation

(Miranda v. Fadullan)
2. LO entitled to have improvement removed when the BPS-gf

fails to pay (Ignacio v. Hilario)


3. Sale of land and improvement in public auction, applying

property
For banks of inland waters (like lagoons), do not apply

deposit becomes yours, automatically.


Does this mean you are protected in this additional area?
o No. Any land in the additional area is unprotected.
o So better if you subject it to the Torrens system, or else you
o

can lose it through acquisitive prescription.


Even if the land receiving the alluvion is registered, the new
land is not yet. So it can be acquired by prescription by other
people. (Grande v. CA)

including the portion upon which the BPS-gf built his house. The
Trial Court ordered the BPS-gf to vacate and pay monthly rental

Avulsion

until the time they vacate. Correct?


o NO. First since, both are in GF, look at the options of the LO.

Since the LO doesnt want to buy the house, it looks as if the

This is abrupt. The transfer of a perceptible piece of land caused by the


current of the river, but involving a VIOLENT and SUDDEN action of the

LO chose option 2.
The TC mistakenly ordered the BPS to pay monthly rental,
because being in GF, he has the right of retention until the LO

water.
Prescription: two years to remove
o Or for uprooted trees carried by the current to another land: six

months to remove
What happens if you dont take it out after two years?
o Dean Del thinks if you dont remove it after two years, its gone.

pays for the value of the expenses incurred by the BPS.


Alluvium

alluvium
3. Deposit must be done on basis of natural current of the river

Meaning, not man-made


o 4. Right of ownership belongs to the riparian owner
No need to report, ask permission, etc. By provision of law, the gradual

excess delivered to BPS-gf


There is LO-gf, and BPS-gf. LO-gf filed an action to recover the lot,

Not applicable to seas, etc. since these are public

proceeds to payment of value of land first to LO-gf, and the

Alluvium is gradual deposit.


Four things to remember:
o 1. Gradual deposit of SOIL
o 2. Must deposit in banks of rivers (and maybe lakes and
creeks, since they empty into a larger body of water too)

59

Its not yours anymore.


It belongs to the person to whom that property is incorporated

into
BUT some commentators dont think it will belong to the

person
What about trees?

If trees were uprooted and transferred to the other side, they do

not become trees. They are just logs.


Six months to remove

nearest riparian owner near the island.

Ex. A and B on opposite river banks, are riparian


owners. If the island appears on the left side, it goes

Change of river course

to A. If on the right, to B. If in the middle, split


equidistantly

Anything beneath the river is public property. So by default, when a


river bed dries up, its public land. The change in river course

Accession in movable properties

provision is an exception.
Example, a river goes through As property. But it changed course to

Bs and Cs properties.
What happens?
o B and C, the ones who lost property, own the new dry land due
o

to the change of course.


In proportion to the land lost (ex. 2 meters of water for B, 4

meters for C, so 1:2 ratio for B and C on the new dry land)
What is As right?
o He can choose to acquire the new dry land. Pay B and C what
is due, in proper proportion.
The government may choose to redirect the water.
Under the Water Code: the owners of the affected lands may undertake

within 2 years of the change in course


If the new area is smaller or bigger than the land lost, it doesnt make a
difference. The law doesnt qualify.

How are islands formed?


o When the water goes to a lower level
What is the rule?
o If in the seas or navigable rivers, they become part of public

then just return


If it cannot be separated without damage the accessory

follows the principal


How do you know why is the principal, which is the accessory?
o First test: What property is attached to what?
o Second test: What is more valuable?

Only apply this if you cannot determine which is


o

Formation of islands

Ex. The table and the varnish


Form one single object cannot distinguish one from the other.
The two objects must belong to different owners
Who owns the single object?
o If you can separate them without injury (close to impossible)
o

have to secure a permit from DPWH, and they must commence works

N.B. Just one set of rules

1. Adjunction

to return the river/stream to its old bed at their own expense; but they

If not in seas or navigable rivers, then the island belongs to the

attached to what
Third test: Based on volume

Only apply this if values are the same or you cannot

determine what is more valuable.


In a diamond ring, which is the accessory and which is the
principal?
o The band is the principal, the diamond is the accessory. This
is notwithstanding relative values.

property.

60

But if the accessory is worth much more than the principal, owner of the

accessory can ask for separation, but he has to pay for the value of the

principal since there would be damage caused.


o Ex. Diamond ring
For art, and similar materials which employ skill:
o DIFFERENT rule.
o The work of art or intellect is the principal. The canvass or

medium is the accessory.


If one of the parties is in bad faith, how do the rules change?
o If the owner of the accessory is in BF, the owner of the

determine by proportion of contribution.


2. If not by the will of parties, but by chance:

Pro-rata sharing by both

Determine proportionate share based on VALUE,


and not anything else
3. If only one owner was the cause of the mixture determine if
in GF or BF:

In GF (thought other sack of rice was his): apply same

accessory simply loses his accessory without remuneration,


o

and he is liable for damages.


If the owner of the principal is in BF, the owner of the A has two

damage or not

2. Demand value of accessory, plus damages


Measure of indemnity:
o Of same kind and quality, or give cash equivalent based on

Mixture
The two properties must lose their respective identities, so you cannot

determine which is which.


Ex. Two piles of rice get mixed together. You cannot determine who

3.

Specification
There is a thing, and it is turned into a finished product through the labor

of another
(Labor of one + material of another)
The labor is ALWAYS the principal, and the material, the accessory

valuation.
2.

rule on co-ownership by chance


In BF: he loses whatever is his share in the mixture,
and he can be required to pay damages

choices:

1. Demand return of the accessory whether there is

They agree on the sharing. If there is none,

regardless of value
What is the rule?
o Determine whether the worker is in GF or BF.
o If in GF, he gets the appropriate the thing, but indemnify the
o

other guy for the cost of the materials


If the worker is in BF, the owner of the materials can simply get
his stuff, and charge the worker with damages

Exception: work of art or scientific work the worker

owns which grain.


Two types of mixture:
o 1. Commixtion If solids are mixed
o 2. Confusion if liquids are mixed
What is the rule on mixture?
o 1. If the mixture occurred with the will of each owner:

There is a co-ownership on the basis of the

can appropriate the whole thing:

But if with BF pay damages + value of

Quieting of title

agreement.

61

Requisites for quieting?

materials
But if with GF no damages

1. Plaintiff has legal or equitable title, or interest in the real

o
o

property
2. There is cloud on such title
3. Cloud is due some instrument, record, claim, encumbrance,

or proceeding which is apparently valid or effective but is


actually invalid, ineffective, voidable, unenforceable, and
o

prejudicial to plaintiffs title


4. Plaintiff must return to defendant all benefits he received

plaintiff
Are tax declarations conclusive evidence of ownership?
o No. Its just an indicia of possession in concept of an owner at

table.
What are the limitations on the right to use the thing owned in
common?
o 1. It must be according to the purpose for which it was intended
o 2. It must not injure the interest of the co-ownership
o 3. It must not prevent other co-owners from using it according

Co-ownership

fiduciary relationship, trust, confidence)


What is the right of a co-owner over the entire property?
o A co-owner has borderless rights; one can use the entire
thing. So an owner of one third of a table can use the whole

best, but its not considered as title to property per se.


What is the prescriptive period?
o If one possesses the property, there is no prescription.
Can it be filed against physical intruders?
o No. It must be against an instrument, record, claim,
encumbrance, proceeding

personality.
Co-ownership can be created by various ways (above), while
partnership must be based on agreement (since it is based on

from latter or reimburse defendant for expenses that benefited

4. By chance

Ex. Mixture by chance


o 5. By occupation

Ex. Getting a wild pig together


Distinguish partnership from co-ownership.
o You cannot register a co-ownership as having separate juridical
o

What are the elements of co-ownership?


o 1. Two or more owners
o 2. Unity of object
o 3. Recognition that there is a co-ownership
If I say this part is yours, this part is mine, etc. is it a co-

to their rights
Does he have right to possession?
o Yes, over the whole thing.
o You cannot prevent other co-owners from using the thing.
o One co-owner can file for a suit for ejectment, no need to bring
in the others.

If he wins the ejectment suit, it will benefit the other

ownership?
o No. Because there has to be undivided, aliquot shares.
How is co-ownership created?
o 1. By law

Ex. Party walls, etc.


o 2. By succession

Ex. Co-heirs before there is actual partition


o 3. By agreement of the parties

co-owners.
If he loses the ejectment suit, what happens?

This is a point of contention among authors.


Can a co-owner sell the entire property?
o No, not without the consent of other co-owners.
o But if one does, the sale is only over the undivided share of the

62

co-owner
What is ones right over ones aliquot share?

As far as ones share is concerned, this is aliquot so there is

no specific possession. One talks about RIGHTS. You are an


absolute owner of that right; you can sell or transfer it without
o

the others consent.


The buyer will stand in the same shoes as you did before the

thing?
o No. He acquires only his own share, and he has right to get

disposition.
Do the co-owners have a right of first refusal?
o No. They do not have right of first refusal or preemptive right to
purchase ones share, under law.
o N.B. Of course if there is an agreement otherwise, respect that.
What is the right of redemption?
o Co-owners have right to redeem.
o Upon receipt of notice of sale.
o Ratio: the law does not like co-ownership. As long as there is a

Redemption brings the thing back to the original co-owners;

thus there will be fewer co-owners.


How do you exercise this right?
o Provided the buyer is a third person (not one of the original coo
o

owners)
Within 30 days from notice of sale
Can repurchase the thing from the buyer pay amount that

was paid by the purchaser


But if one paid a value grossly excessive, pay reasonable price

reimbursement from the others.


If the others dont pay their share, the shares still do not go to

the one person he can attach over their properties:

Properties

And even the pro rata share over the co-ownership


Cabales case was a minor at time of sale. He became of age, the
court told him he had 30 days to exercise right of redemption.
How do you determine ones pro rata share in the co-ownership?
o Respective interest in the property how much the person
o

actually contributed
Can you agree over the proportionate interest of each? Or
should you fix it to the amount of contribution?

Yes, you can agree over the proportionate interest; it

as determined by courts
Is there any preference among the remaining co-owners as to who
can exercise of redemption?
o Ex. There are 5 of us, 1 sold his 1/5 share. How do you divide
o

right, what happens the other 1/20?

The 1/20 is divided into 3. It becomes 1/60.


What if one of the co-owners advances the share of the others to
the purchaser does he gain interest over the whole redeemed

means to constrict co-ownership, the law favors that.

If one does not exercise example, only 3 want to exercise his

need not correspond to amount of contribution.


Ex. A gave 1M, B gave 2M, C gave 3M. They can all

own the thing by 1/3.

If there is no agreement, it is pro rata (1/6, 1/3, 1/2)


But with respect to income and expenses, can the parties

stipulate?

Nope. The law renders it void.


So you can agree on the proportionate interest, but you cannot
stipulate on the share on income and expenses, which must

this?
Take the proportion among the remaining co-owners. So if the
other four have equal shares, each can purchase 1/20 of the

1/5th share.

63

follow the proportionate interest.


Property must be used for the purpose that it is intended for.
For an act of alteration, what is the rule?

To change the purpose of the thing, there must be unanimous

consent of the co-owners.


Same with sale, mortgage, or another act tantamount to

alteration
What is the rule on lease?

If it is either recorded in the ROP or is more than one

consent.
If neither: it is an act of administration and just

court to order measures it deems proper ex. Appointing an

of the expense, since it is for preservation.


B and C mortgaged the house and lot to secure a loan
Will only bind Bs and Cs interest, so As 1/3 is not covered by

the mortgage.
A built a concrete fence around the lot Not binding upon B
and C since expenses to improve the thing must be decided by
majority of the controlling interest.
C built a grotto in the garden Does not bind A and B, since
of the controlling interest.
A and C sold the land to X The sale does not bind Bs 1/3

share of the property. B can redeem the 2/3 share sold by A

and C to X, since X is a third person.


Distinguish:
o Preservation: may be at the will of any one co-owner; but he
o

administrator
If you want to get out of the co-ownership, what is the remedy?
o 1. Sell your undivided share.
o 2. Partition absolute right of any co-owner

No need to give a reason

It is a RIGHT by any co-owner

The other co-owners can remain to be co-owners as


to the remaining shares, after there was distribution to

it is for mere embellishment, and it was not decided by majority


o

built, and you have to restore it in its original condition.


What if a co-owner wants to make an improvement on the property
resolution is seriously prejudicial?
o At the instance of an interested co-owner, may petition the

to one side Binding upon B and C. They must contribute 2/3

can require you to undo what you have done.


The other co-owners can ask you to destroy what you have

but he cannot secure the majoritys consent, or if the majority

of the following acts?


o A repaired the foundation of the house, which was tilting

owners
If you perform an act of ownership or administration, and you do

requires a majority.
A, B, C co-own a house and lot in equal shares. What is the status

administrator; the latter becomes an agent


Alteration: only with unanimous concurrence of the other co-

not get the required number of votes, what happens?


o Your act is considered not authorized, and the other co-owners

year: it is an act of ownership and requires unanimous

But they may designate one co-owner as

must notify other co-owners first as far as practicable


Administration: only with concurrence of majority of coowners

64

the outing co-owner of his share.


Is there a way to prevent a co-owner from asking for partition?
o A provision preventing partition until a certain time is valid.
o Any prohibition for division including transfer good only for
o

TEN YEARS
Can extend again, but for another 10 year period. In the

intervals, those who want out can get out again.


N.B. For testators can stipulate a longer period (20 years) but

this is not extendable


What is the exception provided in the FC?

For family homes, there can be no partition of FH as

long as there are still minor beneficiaries.


What is the rule on party walls?
o You cannot partition party-walls, and it will continue forever.

Another way: prescription

Requisites:

1. Repudiates the rights of other co-owners

2. Repudiation is brought to the knowledge

Partitioning it would injure the building. So as long as

someone is using it, it will persist.


If partition would render the thing chop-chopped, what should one
do?
o

Sell the entire thing, and then divide the proceeds among the

co-owners.
How does a co-ownership terminate?
o 1. Consolidation of ownership in one co-owner
o 2. Destruction of the thing
o 3. Prescription in favor of a third person or a co-owner
o 4. Partition
How do you terminate the co-ownership?
o Main way: by partition.

As to the process of partition, see the ROC. There is

may acquire exclusive ownership

4. After lapse of period fixed by law


One co-owner sets up prescription against the other

co-owners, claiming the property to be entirely his.


You must have an act considered adverse to the coowners; you repudiate the co-ownership through overt
acts or express communication to the other co-

owners.
From the time of repudiation, count the period
necessary provided for by law for acquisitive
prescription. If completed without protest by the

judicial and extra-judicial partition.

No need for a reason. You can ask anytime.


What happens about total partition?

There is obligation of mutual accounting for the co-

others, a co-owner can acquire the entire property.


If you expressly start in co-ownership and you
repudiate it after, then you are surely in BF, so you

owners. This is for the benefits and profits earned by

of the other co-owners


3. Evidence is clear and conclusive that he

have to follow the 30 year period.


Spouses H and W mortgaged their house to a bank. They failed to
pay, so the bank foreclosed the property. They died and left

the co-ownership.
E.g. If one lot is divided into three equal parts (30

behind 3 heirs. One of the heirs redeemed the property within the
one year period for redemption. Is she the sole owner or a co-

sqm. Each) A, B, and C, then A loses his part to a

owner?
o Co-owner with her co-heirs. Redemption by one would benefit

real owner with title, because it wasnt actually part of


the co-ownership, he can receive 10 sqm. each from
B and C. Same if A ends up with a ravine, as

opposed to Bs and Cs flatlands. Same rule for


proceeds (150K for B, 150K for C, 0K for A, but they

the others.
What should the heir do to receive sole ownership?
o Wait for redemption period to expire, and then wait for the
mortgagee/purchaser to consolidate his title, and a new title is

agreed to equal sharing 50K each from the

issued in the mortgagee/purchasers name. Then the heir can

proceeds of Bs and Cs lands.)

offer to purchase the property from the mortgagee.

65

Condominium Act

There is an aspect of co-ownership in the Condo Act.


Art. 490 is the predecessor of the Condo Act. (Building with several

How do you register a condominium project?


o 1. Master deed

Indicates how many units, how big each is, etc.

Because in the Condo Act, 1 unit = 1 share/vote

stories, and with different owners. There are common areas, too.)
o Art. 490: You only share on the expenses of the stairs that you

actually use. So GF person spends nothing on stairs. 2nd F

1 vote, two bedroom condominiums get 2 votes,

person and up spend on the first floor stairs. And so on.


Two things in condominium system:
o 1. Interest in separate and independent unit (inside inner wall)

o
o

you get a CCT (Condominium Certificate of Title)


o 2. Interest in the common areas (elevator, lobby, gym, etc.)
NOTE: there is constitutional restriction on ownership of land (not the

before the building has been constructed.


Its hard to physical partition for common areas. So the only way you
your units), because there is no one who will just buy the common

constructed on the land.


Two options in so far as ownership of common areas:
o 1. Direct ownership unit owners own the common area in

common (1 unit, and there are 20, you own 1/20 of the
o

areas.
How do you partition if there is direct co-ownership?
o If DIRECT co-ownership: It is not like ordinary co-ownership
where a partition can be for no reason. There has to be a

common areas, including the lot)


2. Indirect ownership Condominium corporation, and the unit

ground under Sec. 8 of the Condominium Act. (ex. Destruction


or damage for period of three years; 50% damage or injury and

owner owns shares in proportion to the number of units owned

(see below)
How do you get around the restriction on land?
o Condominium Corporation: it is a corporate entity. As long as

you need any of the grounds in Sec. 13 (similar to grounds in


Sec. 8). So its vote + reason for partition.

Another difference with other corporations, where

corporation can own land.


Transfer of this land to the Condominium Corporation is not

there is a 50 year maximum life span; condominium

subject to transfer taxes (tax incentive)


Can you build a condominium on leased land?
o Not many are, but actually, in this case, there are no ownership
o

more than 30% are opposed to repairing the building, etc.)


If owned by a CONDOMINIUM CORP: Unlike Corp. Code
where 2/3 vote would lead to dissolution regardless. But here,

60% of the ownership is for Filipinos, then the condominium


o

penthouses get 3 votes, etc.


2. Deed of restrictions
Most of these documents are drawn up by the developers

can partition is to sell the entire project (the whole building, including

building). But the land is always part of the common area, since it is

regardless of the size of unit


The master deed changes this, usually: a studio gets

corporations have no life span and will exist as long

restrictions unlike if the land is owned.


But apparently, this is not marketable; some people think that

as the project exists


What are these grounds under Sec. 8?
o 1. 3 years after damage or destruction to projects which makes
a material part unfit for use, and not repaired

when the lease expires, there would be no security.

66

2. Damage to at least 50% of units and more than 30% interest

ownership of common areas are opposed to repair


3. Existing more than 50 years, or obsolete/uneconomic and

o
o

BF: 1) Same, 2) Same, 3) he is aware of it


When does possession cease to be in GF?

When facts exist which show that the possessor is

more than 50% interest in the common areas are opposed to


o

renovation
4. Material part of the condominium was expropriated and the

project is no longer viable

Or more than 70% of the interest are opposed to


o

continuation of the project after expropriation


5. Conditions for partition by sale in the deed of restrictions
have been met

Water Code

Waters are owned by the State (waters in their natural state not

commodity water)
Right to appropriate water based on beneficial use
o You have to ask for a water permit before you can draw water

summons to appear in trial


What are the modes of possession?
o 1) Actual possession
o 2) Symbolic delivery

Ex. Giving someone a key to a car its symbolic


possession of the thing the key pertains to

Ex. Pointing to a property and saying that is yours


o 3) Constructive delivery

On the basis of execution of legal formalities


What does intention to possess mean?
o Subjective element
What does own rights mean?
o Excludes those who possess something on behalf of other
people (so the principal is actually the one in possession of the

from these natural sources of water (if commercial), not small

drawings of water
For those who want to bathe/swim in the waters

POSSESSION

aware that he possesses the thing wrongly


Else, from the moment possessor receives judicial

Requisites of possession:
o 1) modes of possession
o 2) intention to possess
o 3) own rights
How do you determine GF/BF?
o GF: 1) possessor acquired thing through title or mode of

thing possessed). Example:

Agent

Guardian

Attorney-in-fact

Etc.
An agents possession could never ripen into ownership,

unless ratified by the principal


What are the kinds of possession?
o 1) Possession with no title

Has no legal right at all.

Ex. Squatter

Ex. Your phone was stolen by a thief. You took


efforts to get it back. After a week you gave up.

acquisition, 2) there is a flaw or defect in the title or mode, 3)

Does the thief gain legal possession of the

he is not aware of it

property?

67

The property becomes res nullius, because it

has been abandoned. Thus, occupation is

the mode of acquiring ownership.


Contrast: this cannot ripen into ownership

through acquisitive prescription because he

is not considered to be in legal possession of

consider him as such.


Possession acquired through violence can never ripen

person, but has turned over possession to you

Ex. A lessee
Generally, this does not and cannot ripen into
ownership.

Exception: repudiation of juridical title may

lead into acquisition of the property


Can fall under #3 under extraordinary

owner. Must be Titulo verdadero y valido.


BUT its possible that one acquires possession by some
recognized mode, but from a person who could not transfer
right of ownership yet he can still become an absolute owner.
But he has to prove acquisitive prescription, whether ordinary

in the title

Ex. The transferor has no right to transfer


Basis of just title: there is a mode of acquisition

Ex. Tradition (through sale), donation,

or extraordinary. The title here can be Titulo Colorado.


Acquisitive prescription must it be only your own possession
that could lead to this?
o No. There is principle of tacking. Those that came before

succession
4) possession with just title and there is no flaw

Titulo verdadero

In the concept of an owner, just like #3, but in this

(see below)
Rules:

1. Present possessor

2. If both are present, longer possession

3. If same length, one with a title

4. If all are equal, place the thing in judicial deposit

pending determination by court


What kind of possession can serve as title for acquiring dominion?
o ONLY possession acquired and enjoyed in the concept of an
o

acquisitive prescription (always BF)


3) Possession with a just title

Possession acquired through just title but there a flaw

years (BF)
In case of conflict between 2 persons regarding possession of a

more than 2 distinct personalities, except for co-possession

into ownership.
2) Possession with juridical title

You recognize that ownership belongs to another

(BF)
Immovables: 10 years (GF) 30

certain property, who shall be preferred?


o As a general rule, there can be no simultaneous possession of

a property, because the law does not

B) possession in the concept of an owner


o Movables: 4 years (GF) 8 years

the person claiming possession.


You have to trace your title directly to those preceding you.

There must be someone before you and you can point


at the relationship of the predecessor with you (there

case, he really is the owner


Need two things:

A) Just title

must be privity of title)

68

If all the possessors are in possession of such character (ex.


BF), just add all of the years together to figure out how many
years are left

Ex. A = 3 years, B = 3 years, C = 3 years 21 years

o
o

left
Once the line is broken, you have to start counting again.
On issue of ratio: you cannot take credit for BF possession

preceding yours. No credit, no tacking, no ratio.

While Paras says you can use ratio (ex. Credit 1 year
of possession for 3 years of BF possession), Dean
Del Castillo disagrees. If the preceding possession is
in BF, your possession is already tainted.

Inheritance

If repudiated, deemed to have never possessed it in the first place.


Transfer of possession, once accepted, is seamless. You are deemed to
have possessed it since death of decedent.

Rights of Legal Possessor:


Peaceful and uninterrupted possession

It is possible that one co-possessor is possessor in BF, and


one co-possessor is possessor in GF. Each of you will have to
take your own character of possession. If you have 3 years of
co-possession, and you are in BF, and other is GF, then the BF
doesnt affect period or number of years of GF co-possessors.
When is there interruption of possession?
o Two kinds: natural interruption and legal interruption
o How long should natural interruption be before you say
that acquisitive prescription is lost?

1 year. If gone for 6 months, but you came back and


redeemed possession, you are deemed never to have
lost possession. 6 months will be counted in favor of
acquisitive period.
o In legal interruption, there are judicial summons against you.
How do you lose possession of property, aside from interruption?
o 1. Absolute loss or destruction
o 2. Assignment
o 3. Abandonment
o 4. Possession by another
Actions in case of deprivation of possession of immovable
property:
o 1. Forcible entry/unlawful detainer within 1 year from cause of
action

Within 10 days from filing this complaint, may secure


preliminary mandatory injunction to restore
possession
o 2. Accion publiciana within 10 years after possession was
lost

Plenary action to recover possession of property


o 3. Accion reivindicatoria within 10 or 30 years, as the case
may be

Action to recover possession based on ownership of


the property
Action in case of deprivation of possession of movable property:
o Action for replevin
o

Is there such a thing as co-possession?


o Yes. But in co-possession, you dont have rights of ownership.
Can be no valid transfer of title, since there is a flaw. The
difference with co-ownership is that in there, there is right of
ownership.
Can co-possession ripen to co-ownership?
o YES. Same rules on acquisitive prescription will apply.
How is co-possession credited?
o If there is partition, before ownership is acquired, the copossessors can take credit for the years of possession before
partition, in counting acquisitive prescription,

69

If the previous possessor refuses


this concession, he loses all
indemnity

(2) sharing based on period of possession,


but possession not from the time you actually
took possession, but from time of pending
fruits.
Possessor in BF:

Only entitled to be reimbursed for necessary


expenses.
o

Fruits
Civil fruits rents, profits, and other forms of compensation for use of
property during time when you were in possession
o When do you not give the civil fruits back?

From time you start possession until time you lost


good faith

Possessor in GF gets to appropriate fruits, and there


is no need to pay rentals for possession.
o What happens when GF is lost?

Once good faith is lost, you have to give the fruits


after that to the owner, and you have to pay rent.
o What is the effect of a legal interruption?

If legal interruption, you have to allocate time when


you received summons and were still in GF. After
summons, you have to turn over fruits and pay rent.
Natural and Industrial Fruits
o What is the rule on gathered fruits?

Possessor in GF entitled to gathered fruits during


possession.

Possessor in BF is not entitled to such and he must


deliver the gathered fruits from time he lost GF or
reimburse the true owner for their value. He is also
liable also for interest.

He shall also reimburse the true owner for


fruits the true owner could have received with
exercise of due diligence.

But he can deduct expenses he incurred in


production, gathering, harvesting.
o What about pending fruits?

Pending fruits are those that have not been gathered,


and are still standing in the property.

2 options if possessor is in GF:

(1) allow previous possessor to cultivate or

Indemnity for Necessary, Useful, Luxurious Expenses

70

What is the right of a possessor who was dispossessed of his


property, from the person who defeated his possession, if he
introduced necessary improvements?
o Rights of possessor in GF:

1) Right of reimbursement

2) Right of retention
o Rights of possessor in BF:

1) Right of reimbursement only

No right of retention
What about for Useful improvements?
o Rights of possessor in GF:

1) Right of reimbursement

Either actual amount of expenses

OR the increase in value of the property

2) Right of retention

3) Limited right of removal

There must be no damage caused

And the new possessor must not have


chosen to reimburse the prior possessor
o Rights of the possessor in BF:

NONE.
What about for Luxurious improvements?

Rights of possessor in GF:

Limited right of removal.


o Rights of possessor in BF:

Limited right of removal as well.


For deterioration or loss?
o Rights of possessor in GF:

No liability

Unless due to fault or negligence after he had become


possessor in BF.
o Rights of possessor in BF:

Always liable, even if due to his fault or negligence, or


fortuitous event
Once acquired property through acquisitive prescription, all bets are off:
it is now his.
o

Special Rule re: movables


1.
2.
3.

The owner cannot recover it because possession in


GF is equivalent to title.

Two exceptions: - where the true owner can still


recover without obligation

1) True owner lost the movable

2) True owner unlawfully deprived thereof

Exception to the exceptions: when the present


possessor acquired the movable in GF in a public sale

Remedy: true owner has to reimburse the


price paid for it
Sample problem: G lost his ring. After a few days, he found it in
the possession of H who had loaned money to Z and received the
ring as security, in GF. What are the relative rights of G and H?
o Default rule: possession of movable in GF is already equivalent
to title.
o BUT in this case, G lost the ring. So he can still recover from H
without obligation.
o The exception to the exception does not apply because H
received it as pledge, and not from purchase in a public sale.
Besides, only the lawful owner can pledge a movable, so the
pledge is void.
A agreed to sell his car to B, and they registered it in the name of
B. While waiting to get paid money in Bs sala, A never saw B or
the papers again. B sold the car to C, who sold it to D, both in GF.
Can A recover the car from D?
o Yes, since A was unjustly deprived of his car. The usual
common law rule that where two people (A and D here) would
suffer from a fraud, the one whose acts enabled the fraud to be
committed should suffer does not apply by mandate of Art. 559.
What if the car above was bought in a public sale?
o The possessor is entitled to reimbursement
What if the car was bought from a merchants store?
o The possessor wins. As between a purchaser at a mechants
store and a legitimate oner of the thing who lost it, the former
wins (Art. 1505, NCC)

Rules on acquisitive prescription applies to movables and immovables.


Only that the period for immovables is longer.
Legal Interruption a suit of replevin. Still need summons, still have
rules on legal interruption.
Natural Interruption even if lose physical possession as long as it
remains under your control. As long you did not abandon property it is
still subject to your control. You are still trying to gain back possession.
a. Control means - Patrimonial Control?
b. Misplaced still have possession
c. Unlawful Deprivation still have possession but you have to recover
a. Mere physical possession, by force, intimidation, violence

What is the rule on recovery of movables?


o If the possessor is in BF:

The owner can recover it from him without any


obligation whatsoever
o If the possessor is in GF:

71

When can the owner of a movable who has lost it or who has been
unlawfully deprived thereof can no longer recover it?
o 1) Prescription
o 2) Possessor acquired thing from a person whose authority the
owner is estopped from denying
o 3) Possessor acquired the thing from a merchants store, fairs,
markets, etc.
o 4) Thing is a negotiable instrument and possessor is purchaser
in GF and for value
o 5) Possessor is owner of thing in accordance with finderskeepers principle in Art 719

This is where you find a lost item and turn it over to


the mayor. After publication for 2 weeks of
announcement of finding, and lapse of 6 months
thereafter, you become the owner.

Note; if the real owner comes forward, you get a 1/10


reward

Usufruct

Usufruct has ABSOLUTE right over fruits of property.


Preservation of substance and form of thing: only if you have
been granted possession of property in the first place. If not,
you only really get the fruits.
o Owner cannot control how usufruct uses the fruits.
What can be the subject of usufruct?
o There can be usufruct over movable, immovable properties, or
even rights, but not personal rights
o Usufruct v. easement. Easement only for immovable
properties.
What is the usufructuarys obligation?
o Preserve the form and substance of the thing lent in usufruct.

Substance: no operation, except with consent of


o
o

What is the nature of usufruct?


o A person owning right over property owned by another person
because he has been given the right to use it
o It is a real right
What is the most important aspect of usufruct?
o The right of possession over property held in usufruct is not
matter of legal necessity. What will make it usufruct, where you
are entitled to, is the right to receive fruits.
How is usufruct created?
o 1. Voluntary act of owner not possessor. Possessor can lease,
but not usufruct.
o 2. Legal usufruct. But this is no more.

If children, mere act of administration by parents.

Husband now no longer owns properties of wife.


What is the right of the one enjoying usufruct?

owner, that would prejudice the thing given

Cannot appropriate the thing subject of usufruct


o But can appropriate the fruits
What are the exceptions?
o 1. Can appropriate the thing

Abnormal usufruct
o 2. Can alter the form of the thing, leading to a slightly
deteriorated form

Quasi usufruct
What is a abonormal usufruct?
o For consumable things. So when returned, there is some or all
o

of it consumed.
Instead, you have to pay the propertys value based on
appraisal (for movable properties)

If there was appraisal at the beginning, pay that.

If there was no appraisal, replace with another object

72

of same quality and quantity


What is quasi usufruct?
o For properties that easily depreciate

Ex. Cars

You cannot really return the thing in the same form and

You want it to be in a public instrument, so that you can register

substance.
Instead, you return the object itself. As long as its normal wear

it.
NOTE: a usufruct is always a real right, and will follow the

and tear, you have no other obligation to the owner.


If a property has been encumbered, can it still be subject to

usufruct?
o Yes.
o The usufructuary does not compete with the mortgagee as far

as fruits.
o There is no inconsistency.
If the mortgagor defaults in the principal obligation, what

happens?
o The mortgagee can foreclose the property. This is his right.
If you are the usufructuary, how do you stop the foreclosure?

Should you pay the obligation?


o No need; there is no legal obligation to pay for the principal
o

obligation.
His right to usufruct continues. It is a real right and can be

possidendi]
Modes of extinguishing a usufruct?
o 1. Death of usufructuary, unless contrary intent appears
o 2. Expiration of period or fulfillment of resolutory condition
o 3. Merger of usufruct and ownership in one person
o 4. Renunciation of usufruct
o 5. Total loss of the thing
o 6. Termination of the right of the person constituting usufruct
o 7. Prescription
A sold a parcel of land to B. There were two buildings on the land.
There was a condition that 1/3 of the rents of the two buildings
should go to A. Subsequently, without Bs fault, the buildings were

enforced against any mortgagee.


Can there be usufruct over pledged properties?
o No. There is a conflict.
o Pledged property it is the pledgee who is entitled to the fruits.

totally destroyed. Did this extinguish the obligation?


o No. What was constituted was a usufruct. Rentals are not only
due from buildings, but also the land. There can be no building
without land. So the loss was not a total loss that would

The fruits stand as security as well for the obligation.


o So you cannot give the fruits to a usufructuary.
What about a leased property? Can it be given in usufruct? (Ex. A

leased to B, A gave usufructuary rights to C)


o Yes.
o Use and possession goes to the lessee.
o The usufructuary need not have use and possession; all he

extinguish the usufruct.


A is thus entitled to 1/3 of the land + materials thereon, as a

temporary measure until the buildings are reconstituted.


A owned a parcel of land and gave B usufructuary rights. The land
was still empty then. After, A constructed commercial buildings on
the lot. Is B entitled to the fruits from rentals of the buildings?
o No. The usufruct was constituted on the land, not the

needs to get are fruits. The usufructuary gets the rentals from

property. A lease is only a real right if registered.


Bottomline: the owner has parted with not of his rights over his property:
o Jus affruendi
o [And if giving use and possession: Jus utendi and jus

that property.
Requirements for usufruct?
o Form is not a matter of validity, just a matter of convenience.
o It is valid between the parties.

buildings.
But since the construction diminished the rights of the usufruct
over the land, he must be indemnified for the loss. In a case

73

(Gaboya v. Cui), the owner was made to pay monthly rentals to

the usufructuary.
Default provisions of usufruct

The other provisions in the Code: are those that apply by default, in the

absence of specific stipulations of the parties.


If the property has pending fruits, when the contract of usufruct

2. Leases of property registered in the ROD


Obligations of the usufructuary?
o 1. Make an inventory of the property
o 2. Give necessary security

Exceptions to bond requirement?

1. No one will be injured by lack thereof

2. Donor has reserved usufruct of the


property donated
3. Parents, who are usufructuaries of

was entered into, to whom do these belong?


o Growing fruits at the time usufructuary enters into the property:

unemancipated childrens property, except

belong to the usufructuary


o No indemnification
At the time the usufruct terminates, what happens to the pending

when the parents contract a second

fruits?
o Belongs to the owner
o Owner pays indemnification for expenses to plant, cultivate,

and other expenses for the fruits


Gathered fruits?
o Belong to the usufructuary.
What is the nature of the usufructuarys possession?
o Possession with juridical title
Can the usufructuary grant possession to another person (ex.

on fruits

Note: if the taxes, charges, or liens are over the

Lease)?
o Yes. Here, it is mere possession that is transferred, the right of

marriage

4. Caucion juratoria
Obligations of the usufructary during the usufruct?
o 1. Take care of the property as a GFF
o 2. Make ordinary repairs
o 3. Inform owner for extraordinary repairs
o 4. Pay annual charges and taxes and those considered as lien

which the usufructuary possesses


What is the exception to this right?
o Caution juratoria - Giving possession to a person who has

nothing
What happens if the period of the lease is longer than the period of
the usufruct?
o Rentals after termination of the usufruct belong to the owner.
o If the lease has become a real right, then the owner must

respect

1. Leases longer than 1 year

74

property itself, the owner is liable


5. Notify owner of any act of a third person that may be

prejudicial to right of ownership


6. Pay expenses, costs, liabilities in suits with regard to

usufruct
Obligations upon termination of the usufruct?
o 1. Deliver the thing to the owner
o 2. Right to retention for taxes and extraordinary expenses,
which must be reimbursed
Rights over necessary, useful, and luxurious expenses?
o Necessary expenses: right to demand reimbursement
o Useful and luxurious:

No reimbursement

But may remove these if there is no damage to

Positive the servient estate is either obliged to allow

property caused
May set-off these improvements against damage on the

someone to do something on his property, or to do it himself


Negative the servient estate is prohibited from doing

property

Easements

What is the nature of an easement?


o Also a real right. The right attaches to a specific property until

the right is extinguished. Only difference from usufruct: it is

something that attaches to personal property, while easement


only applies to real property

Further qualify: easement is applicable to land,


buildings, tenements, and not other kinds of
o

immovables
No easement over another easement, for instance, even if the

easement is also a real property. Likewise, those by analogy:

cannot receive easements.


What is an easement?
o It is an encumbrance over an immovable property, for the
o

benefit of:
Another immovable property belonging to someone else (Real

easement)
o Or a person or community (Personal easement)
Dominant estate is the one benefited.
Is there any difference between easement and servitudes?
o For purposes of the NCC, these are used interchangeably
o Servitude used in common law (personal and real
properties
Distinguish between positive and negative easements:

other people pass through his property


Tree with branch hanging out over neighbors property

required to cut
Give examples of negative easement.
o Easement of light and view cannot block neighbors view
Distinguish from continuous and discontinuous.
o Discontinuous only used in intervals, and with intervention of
man
o Continuous constant, no need for intervention of man
Apparent from non-apparent.
o Non-apparent no external signs
o Apparent made known and with external signs
Why is the classification needed?
o Positive/negative determines rights
o Continuous/discontinuous and apparent/non-apparent
determines how to acquire

Prescription only applies to apparent continuous


How to acquire easement?
o Title

Juridical act (there is a mode of acquiring ownership

easements), and they only use easement only for real

something on his property which he could otherwise do


Give examples of positive easement.
o Right of way, because the servient estate is required to let

ex. Donation, succession, etc.)

Or law
Prescription

10 years of use of servient estate

Only covers apparent continuous easements

E.g. Easement of right of way can never be


acquired by prescription, because it is
apparent, but discontinuous

75

Ex. On another note, easement over

aqueducts can never be acquired by

immovable property must be put into writing

E.g. if you acquire it through tradition, you have to put

prescription even if it is A + C, by express

provision of the Water Code.


How to count prescription of A+C?

1. Positive: Count period from actual use

2. Negative: from notarial act will contain

the prohibition. Not just sending a letter to a


neighbor. You have to have a basis; that you

Under Statute of Frauds, any transaction over real right over

are a dominant estate.


X owned a piece of property, where there was a house on the

it into writing

If not put into writing, it is unenforceable


If granted on basis of donation: it must be a public writing (both

donation and acceptance) and in writing

Otherwise, it is void
o If through succession, it must be through a will
What is the meaning of permanence as a characteristic of
easement?
o General use: non-use will not extinguish easement
o Although, non-user for ten years will also extinguish the right

E.g. drainage you are required to have neighbors

southern portion overlooking the northern portion through doors


and windows. X subdivided the property into two: the empty
northern portion and the southern portion with the house. He sold

water pass by you. You see the water and block it. It

it to Y and Z respectively. Y wanted to build a house on the

is an act contrary to the easement. Non-use kicks in

northern property. Z said that it should be not less than 3 m from


their boundary. Who wins?
o Z wins. Under the NCC, when there is an apparent sign of

easement between two properties maintained by the same

owner and these are subsequently alienated to different

registered encumbrance?
o The encumbrance exists
o But you are guilty for breach of warranty, and the buyer can sue

owners and there is no intent to the contrary the new


o
o

owners must respect the easement.


Apparent easement here is of light and view: demonstrated by
the windows and doors overlooking the northern portion.
What are the requisites for this rule to apply?

1. Apparent sign of easement in two estates originally

upon the blocking.


Inseparability?
o You cannot separate the easement from the immovable.
When you sell property, and you do not inform the buyer about the

you for not telling him about the encumbrance


When does registration of an estate without mention of
the easement extinguish the voluntary easement?

If the dominant estate is registered without annotation

owned by one owner


2. The sign was established by the owner
3. One or both are alienated
4. The contrary was not provided in the deed of

of the voluntary easement in its favor, it still exists


If the servient estate is registered without annotation
of the voluntary easement, the easement is
extinguished

conveyance
Title is there a specific form?

76

Indivisibility

Increase in number of owners does not increase the burden on

repairs, or improvements thereon, it may be changed at his

the servient estate. There is just one easement.


If servient estate partitioned or alienated, it still doesnt change

expense

He must provide another place or manner equally

anything.
Rights of the Dominant Estate
o To make all works necessary for the use and preservation of

the servitude
Obligations of the Dominant Estaete
o 1. Cant alter the easement (only for the benefit of the movable

convenient
How does an easement terminate?
o 1. Merger in the same person of ownership of both dominant
o

originally contemplated)

N.B. Check the intent. If a railroad company was

easement cannot be used

But it shall revive if the condition of either or both

given right of way over several lots to transport sugar


canes, check whether it is only sugar canes that can
be transported, or if he can transport other goods or
o

transport for other persons, etc.


2. Cant make the easement more burdensome

Villanueva v. Velasco it is the need of the dominant

o
o
o

estate that determines the width of the easement


Rights of the Servient Estate
o To register the easement, even without permission from

should again permit its use

Except if prescription has set in


4. Expiration of term or fulfillment of condition
5. Renunciation of owner of dominant estate
6. Redemption agreed upon both owners

Legal easements

dominant estate

If servient estate registers land without mentioning

easement, the voluntary easement is extinguished. If

dominant estate registers his land without mention of


o

and servient estates


2. Non-use for 10 years

For discontinuous easements: count from last use

For continuous easements: count from contrary act


3. When either or both of the estates fall into condition that the

the easement, the easement still subsists.


Retains ownership of the portion where the easement is

Not an exclusive list. There are other kinds.


o Ex. Easements for aerial navigation
1. Easements relating to waters
o What is the legal easement of drainage of waters?

Lower estates are obliged to receive waters which


naturally and without intervention of man descend
from higher estates, as well as the stones/earth

established and may use it in a manner not affecting exercise

of the easement
Obligations of the Servient Estate
o Cannot impair in any manner the easement
o But if the easement becomes very inconvenient to the owner of

carried along
The lower estate cannot construct works that impede
the flow. The higher estate cannot construct works

the servient estate, or prevents him to make important works,

77

the increase the burden


Water code governs

To extent not covered by Water code, use

Civil Code
So lower estates still obliged to receive

Requisites:

1. Dominant estate surrounded by other immovables


and there is no adequate outlet to a public highway

There must be NO outlet, not merely

waters from higher estates; and higher


estates cannot construct something to

hasten down-flow of water


Addition by Water Code: servient estate can block this
flow, but must provide an alternative method of

drainage
What is the legal easement of aqueduct?

Any person who may wish to use upon his own estate

any water which he can dispose has the right to make

it flow through intervening estates


He must indemnify the owners of those estates AND

the owners of the estates where the waters may filter

of way

It is a one-time indemnity
Exception: Isolation on account of sale/transfer or donation

is in the middle, and is isolated. You are entitled to


ask the vendor to give you a right of way. You do not

can dispose of the water and it is sufficient

most convenient and lease onerous to others


3. Indemnify the owners of the servient

estates
4. Secure a water right from the National

have to pay for that.


If the one that is isolated is the sellers property, he is
also entitled to demand right of way. But he has to

for the use for which it is intended


2. Show that the proposed right of way is the

pay
Donation: if you receive property through donation,
you can demand for right of way, but you have to pay,
because its too much to ask if you get it for free na

Water Resource Council


o IMPLICATION: cannot acquire

to the servient estate

5. Shortest distance to public highway


Generic rule: you have to pay indemnity to get road right of way

You are not paying rentals, because you have a right

[N.B. the rules on sale and donation are inverse]

If you are the buyer of the property and you property

or descend
What is the nature of this easement?

Continuous and apparent


Requisites?

1. Owner of dominant estate must prove he

inconvenient
2. Payment of proper indemnity
3. Isolation not due to acts of dominant estate
4. Right of way claimed is at the point least prejudicial

nga, you burden the donor more pa.


If its the donees property that surrounds the property
of the donor, the donor can demand right of way and

aqueduct by prescription
o Banks of rivers, etc. 3 m, etc. covered by Water code
2. Right of way
o Most common right of way: road right of way

he doesnt have to pay indemnity.


Can the width of the easement of right of way be changed?

Yes, from time to time, to suit the sufficient needs of


the dominant estate. For instance, when the

78

dominant estate used to use a tricycle to pass through

the road but changed to a jeep to suit the flourishing

of light and view

1. From opening of a window, if through a party wall

2. From time of formal prohibition upon the adjoining

plant nursery business, it can acquire from the


o

servient estate a bigger width.


What is the measure of indemnity?

1. If easement is permanent and general value of

estate, if window is through a wall of the dominant

land and damage caused

Because here, youre practically taking it


2. If easement is limited and merely temporary just

damage caused
3. No indemnity for the two above situations:

Sale of land surrounded by other estates of

vendor
Donation of land surrounding other estates of

has a right of way abutting a public road.


In this case, the servient estate returns what he may
o

the indemnity is deemed payment of rent for use of

block the view


X built a house adjoining the lot owned by Y. It had
several windows overlooking Ys half a meter away from

the easement.

the boundary line. After 15 years, Y brought an action to

3. Party walls
o Rules on co-ownership can apply
o The party wall itself is the servient estate, and the estates are

estate
What is the implication of failure to follow minimum

construction must be at least 3 meters away as to not

have received by way of indemnity. The interest on

adjoining tenement
Negative open window through wall of dominant

distances?

Cannot acquire by prescription

Distances:

2 meters from other lot if direct view

60 cm from oblique view

When the easement already exists, any other

be extinguished?

When the dominant estate joins with another, which

estate

Through a notarial instrument


When is it positive? When negative?

Positive open window through party wall or wall of

the donor
When can the servient estate demand that the right of way

How do you count prescription for acquisition of easement

close the window. Has X acquired the easement by


prescription?

No. There was no notarial prohibition, so no

dominant
You cannot open a window on a party-wall

If someone does and the other does not object, you

can acquire it after 10 years by prescription


Maam did not choose to discuss the dimensions, heights, etc.

of windows in detail.
4. Light and view

prescription can vest.


Will the action of Y prosper?

No. Because the action has prescribed after


10 years.
Doesnt this mean X acquired the easement of
light and view by prescription?

79

No. Because Y can validly build something

or raise a wall that block Xs view.


5. Drainage of buildings
o What is the rule?

Roof must be constructed in a way that the rainwater

falls on his own land or street/public place

NOT on the land of his neighbor


What is an easement on drainage of buildings?

When rainwater cannot be collected in the required


areas stated above, it can be made to pass through
contiguous lands or tenements where egress may be
easiest and it causes least damage to the servient

estate
6. Trees extending over anothers property
o Who owns the fruit on the trees?

Still the owner of the tree

But if the naturally fall on the other owners land, the


o

nuisance per se. Are they right?


o No. It is not a nuisance per se because it is not a nuisance in

cut off by the trees owner.


CANNOT cut them off himself
But for roots, he may

What is a nuisance?
o Any act, omission, establishment, business, condition of
o
o
o
o

itself and at all times it was just the venue for the illegal act.
What are the requisites before there can be summary abatement of
nuisance by a private person?
o 1. Specially injurious to him
o 2. No breach of the peace or unnecessary injury is done
o 3. Demand must first be made to owner/possessor
o 4. Demand was rejected
o 5. Abatement approved by district health officer and executed

Nuisance

even if the extent may be different

1. Criminal prosecution

2. Civil action

3. Extrajudicial abatement
o Private nuisance only a person or small number of persons

1. Civil action

2. Extrajudicial abatement
X has a small house where he sells shabu and other drugs. X was
caught by the police. The police demolished the house for being a

other owner gets them


What is the right of the adjacent lots owner?

Demand that branches extending over his property be

o 5. Hinders or impairs the use of property


Classify nuisances:
o Nuisance per se always a nuisance
o Nuisance per accidens nuisance by circumstance
o Public nuisance affects a considerable number of persons,

with assistance of local police


o 6. Value of destruction not exceeding P3000
What is the doctrine of attractive nuisance?
o A person who maintains in his premises a dangerous
instrumentality of any character which is attractive to children of

property, or anything which:


1. Injures or endangers health/safety of others
2. Annoys or offends the senses
3. Shocks, defies, or disregards decency or morality
4. Obstructs or interferes with free passage of any public

tender years at play and fails to exercise due diligence to


o

highway or street, or body of water

80

prevent them from playing therewith


Even if the child is technically trespassing

Ex. a swimming pool per se is not an attractive nuisance but if

If intangible acquired by (1) intellectual creation, or

(2) tradition
Occupation of animals
If the animal is wild a person becomes the

there is an artificial condition or feature that will add another


danger to children, it is an attractive nuisance
Modes of acquiring ownership

How do you acquire property?


o Occupation
o Law
o Donation
o Tradition
o Intellectual Creation
o Prescription
o Succession
Sale is not a mode, it is tradition
Mode:
o Process of acquiring ownership
o Mode does not need a corresponding title
Title:
o Juridical justification for a mode
o Title needs a corresponding mode
Succession is a mode, because you do not need a prior title
Occupation
Original Mode not dependent on former owner
o Occupation
Seizing of the property physically
Not owned by anyone or because there is a previous

owner upon capture.


Occupation over domesticated animals, after
20 days, unless claim has been made.
Domesticated animals are those taken from

the wild and then tamed.


Occupation over domestic animals cannot be
acquired by occupation unless they had
been abandoned. Domestic means that they

o
o

are never wild to begin with.


Intellectual creation
Acquisitive Prescription
Possession + just title (acquired through mode of

case, its really occupation)


Derivative Mode dependent on former owner or title of another
person
o
o
o
o

owner and has abandoned it


You do not occupy land; you occupy corporeal things.

Donation

Land is never without an owner the State owns it by

default. Except if land was previously owned and it


has been abandoned: this does not revert to the
State.

81

acquiring ownership) + 30 years


So valid only if acquired through res nullius (in this

Succession from whom you inherit


Donation from donor
Law
Tradition

Requisites of donation:
o 1. Decrease or reduction in the patrimony of the donor
o 2. Increase of patrimony of the donee
o 3. Animus donandi or intent to make a donation
Classes of donation:
o 1. Donations inter vivos

Simple

pure liberality
Remunerative

On account of services rendered by the

A donation provides that it will take effect after the death of the
donor, that the donor will not dispose of it or take it away from the
donee, that he had beneficial ownership while he lived. Is it inter

donee, but not a demandable debt


Conditional

Imposes a charge or burden on the donee

vivos or mortis causa?


o Inter vivos, since the donor intended to part with ownership
during his lifetime. Providing that the donor will not dispose of

less than the thing given

it or take it away means that the donation is irrevocable; thus,

Onerous

Given in consideration of demandable debt

Actually governed by rules on contract


o 2. Donations mortis causa

Actually governed by rules on wills


Distinguish between illegal and impossible conditions in a simple

inter vivos. It is also clear that he parted with naked title, while

maintaining beneficial ownership.


What does a habendum clause and a reddendum clause signify?
o Inter vivos. Habendum cause indicates a grant of the property
before death of the donor, while the reddendum, in so far as it

donation from illegal and impossible conditions in an onerous

imposes a condition on how the donees should spent some of

donation:
o In simple donation, considered not written
o In onerous donation, annul the donation (since governed by

indicates that the donor parted with ownership of the land prior

the income of the property and limits on how to dispose it

rules of contract)
Distinguish between inter vivos and mortis causa donations:

to his death.
Property is donated in a deed named donation inter vivos. It said
that the land donated shall be delivered immediately to X upon the
perfection of the donation, with all the fruits thereof, but title shall

Inter vivos

Mortis causa

Takes effect independently of

Takes effect upon death of donor

only pass to the donee upon the donors death. What is this?
o Mortis causa: the fact that no title or ownership is conveyed

donors death
Title or ownership conveyed before

Title or ownership conveyed only

death of transferor

upon death of the transferor

Valid if transferor survives transferee

Void if transferor survives transferee

Generally irrevocable

Always revocable

Comply with formalities on donations

Comply with formalities on wills

until the death of the transferor controls.


Capacity of donor and donee:
o Donor:

1. Must have capacity to enter into contracts

2. Must be able to dispose of property

3. Must not be prohibited or disqualified by law from


o

making the donation


Donee:

1. Must not be prohibited or disqualified by law from


accepting the donation

82

A, from Manila, offered B, who lived in Cebu, in writing to donate

3. Made to public officers, spouses, etc. by reason of

his office
4. Those disqualified under wills apply as well:

A. Priest who heard confession or minister

his car. Two days after , Bs letter of acceptance reached A, but


before it reached A, A has been confined in the psychiatric/mental
ward. Is the donation binding?
o No. The donors capacity is determined from the perfection of

donation. A donation is perfected the moment the donor


knows of the acceptance. Here, before he found out, he

already lost capacity.


Prohibited donations:
o By reason of relationship

1. Between husband and wife, except moderate gifts

in family rejoicing or distress


2. And those with amorous relationships, living
together as husband and wife [here, there is no

criminal act, unlike adultery/concubinage]


By reason of public policy

1. Parties guilty of adultery/concubinage at the time

the donation is made

Do they have to be convicted? No.

If they have already parted, then it is valid.


2. Guilty of committing the same crime AND in

abovementioned person, or his church/sect


C. Ward to guardian, before final accounting
o Except if guardian is ascendant,

descendant, or sibling
D. Physician, or other health officer who took

care of donor during last illness


E. Made by individuals, associations,

corporations not permitted by law to do so


Formalities of a donation:
o MOVABLE

Oral

Must have simultaneous delivery of thing

Or simultaneous delivery of document


representing the right
Writing

If the propertys value exceeds P5K

Acceptance must be in writing too


IMMOVABLE

Public document specifying the property + charges

Acceptance must be:

In same deed

Or separate public document. Here, the

consideration thereof
You dont have to be both principals

When must it be given?


o It can be given before committing a

who extended spiritual aid during last illness


B. The relatives within 4th degree of

crime (donation as the inducement)


o It can be during or after (reward)
Distinguish: for adultery/concubinage it

donor must be notified in an authentic form,

cannot be after, and it must be in


consideration of the relationship. Here, it

can be after, but it must be in consideration


of the crime.

83

and the step noted in both instruments.


Special rules on form:

Onerous donation ordinary contract

Mortis causa donation formality of wills

What is the effect of non-registration? Registration? Actual

knowledge?
o Non-registration, although the donation of immovable is in a
o
o

donation: Witnesses to the will, because there are no

public document only binds the parties thereto


Registration binds the whole world
Third party with actual knowledge bound by the donation

witnesses required to a donation


o Intestate unworthiness (Art. 1032)
Limitations on donations:
o 1. Donor must reserve sufficient means to support himself and

between the parties, even if unregistered


X wrote Y, donating in the letter a piece of land. Y accepted by

all relatives, who at the time of the acceptance of the donation,

means of public instrument. X died. His surviving son, B, wanted


to cure the defect of the donation by executing a public instrument

of ratification. Effect?
o No effect. A void contract cannot be ratified. The contract is

void because it was not in a public instrument.


X donated land to Y in a public instrument. Y accepted in a

separate public instrument. X died before the acceptance could be

donation during As lifetime and after As death?


o Valid during lifetime of A. The donee can appropriate all the

with. The donation has no effect.


X donated land to Y. Y accepted in a separate instrument, but did

not communicate it formally to the donor. Y paid taxes over the


land, since it was in the black list for non-payment of taxes. Was it

an onerous donation? Was the donation valid?


o It was a gratuitous donation, because payment of the taxes
was not a condition/burden imposed upon Y. It was just a

consequence of the donation.


Thus, since it was NOT an onerous donation, it must follow the
formal requisites of a contract. The formal requisite of
constancia autentica was not complied with; thus, the donation

settlement
o 3. No more than he may give or receive by will

Reduce what is inofficious


A donated all his property to a foundation bearing his name,
maintenance and education during their lifetime. Effects of this

authentic form) is an essential formal requisite not complied

are entitled to support

Reduce upon petition of such persons


2. Donations cannot comprehend future property

Exception: donations propter nuptias in a marriage

ignoring claims of wife and children, except for a provision for their

communicated to him. Valid?


o No. The constancia autentica (notification of the donor in

Applicable to testamentary succession, but not to

was invalid until communicated formally.


Incapacity that would prevent a person from succeeding:
o Testamentary Art. 1027

impairing the heirs legitimes, upon petition.


Is there a right of accretion in donation?
o None, by default.
o Exception: H and W jointly.
When may a donation inter vivos be revoked?
o 1. Supervening BAR
o 2. Non-fulfillment of condition
o 3. Acts of ingratitude
o 4. Inofficious donations
When may a donation inter vivos be reduced?
o 1. Donor did not reserve sufficient means to support himself
o

84

fruits.
Once A dies, it is inofficious. It must be reduced to avoid

and relatives entitled to support


2. Supervening BAR

o 3. Inofficious donations
Revocation of donations:
o As a general rule, these are irrevocable. These cover

committed to the donee, his spouse, or

donations inter vivos. Donations mortis causa are really based


o

on succession, so they are revocable.


1. BAR for those with no descendants

A. Birth

B. Adoption

C. Reappearance of child

These apply to those who have made donations

children under parental authority.


3. When donee unduly refuses to support the donor

when there is a legal or moral obligation


Prescriptive period? One year from knowledge of
the donor.

It is purely personal and thus intransmissible

thinking they will not have successors, and these

reduced to the extent that it is inofficious


Determine the legitimate at that point in time (this is
NCC), then determine if what was given exceeded.
What is the prescriptive period?

Period of four years from birth, adoption, or


filiation, or receipt of information re: missing

2. Ingratitude:

1. Donee commits an offense against person or


property of donor, spouse, or children under parental

o
o

event, etc.
3. Donee killed the donor
4. Donor died without knowing act

of ingratitude
5. Donor already instituted criminal
proceedings but died before filing

child
Cannot be renounced
Transmissible to LCs, ICs, or descendants
upon death of donor

died
2. Donor prevented from filing
action due to sickness, fortuitous

where presumptive legitime is first introduced in the

to ones heirs.
What are the exceptions to
intransmissibility?
o 1. Donor already brought action but

would affect their legitime.


Subject to reduction or revocation. This ground does
not consider the donation per se as revoked. It is only

The only time it is a defense, is if the crime is

civil case for revocation


3. Inofficiousness of the donation

When does this action accrue?

This action ONLY arises when the donor dies

Unlike supervening BAR which can be filed

authority
2. Imputation of a crime involving moral turpitude

Is veracity of the claim a defense? No.

while donor is alive


Only compulsory heirs and heirs/successors in
interest may bring action

The creditors may only bring about

rescission if it was in fraud of them


Prescription of four years is counted from the death of
the donor. So even if he donated the inofficious

85

donation in 1960, and he died in 1984, the heirs have


o

an action of assertion/vindication of possession based on

up until 1988 to challenge the donation.


4. Non-compliance with a condition imposed

This is a modal issue

The donor has discretion

Prescription?

4 years from non-compliance

Also transmissible to heirs

X donated property to Y, with a condition. Y failed

ownership.
What is transferred?
o The inheritance.
o Inheritance is defined in 776 as the transmissible rights and
o

to comply. X sold the property to Z. Valid?

No. He has to file a judicial action first within


4 years to revoke, unless there is an

automatic revocation clause in the donation.


Rule on fruits for these revoked donations?
o Based on BAR donee entitled to fruits until filing of
o

complaint
Based on non-fulfillment of condition donee must return the

fruits which he may received after failing to fulfill the condition,


o

along with the property


Based on inofficiousness donee entitled to fruits while the

parents
Give an example of a transmissible obligation.

X entered into a perfect contract to sell his


car to Y, but it has not been consummated.

donor lives

SUCCESSION
General provisions

obligations of a person
Are there intransmissible rights and obligations?

Yes.

1. Purely personal;

2. Intransmissible by stipulation

3. Intransmissible by operation of law

Are these conveyed by succession?

No.

What are examples?

A purely personal obligation or right

Ex. Right to receive support from ones

X died. This transfers to his heirs.


Is a money debt a transmissible obligation?

Yes.

But is it transmitted directly to the heirs?

No. It is paid by the estate, upon claim by

(774) A mode of acquiring ownership


o It is not delivery (tradition) that vests ownership. Succession

the creditor. (Unionbank v. Santibanez)


Does this not violate Article 774?

No. Although the creditors do not claim


directly from the heirs, the effect is the same
what the heirs would have otherwise gotten

itself is the mode. You do not need delivery of the thing to the
o

is diminished, so they are indirectly and

successors.
In due time, the successor acquires a right to possession of the
thing, which may be in the hands of someone else. But this is

ultimately paying the debt.


Does this provision on money claims affect other
claims?

86

No. They are still transmitted to the heirs.


When does transmission take place?
o (777) Transmission takes place from the moment of death
o This is legal fiction, because you dont really physically get the
o

such portion of the estate allotted to him in the

inheritance at the moment of death.


Why is it proper to say the rights to succession vest

instead of get transmitted?

Because you already have that right, albeit inchoate.

moment of death; also, what law is in effect; what portions they


will get, etc.

Uson v. Del Rosario: Decedent died during

children are excluded (unlike in the NCC, where they

what you sold is subject to the creditors claim.


Heirs of Conti v. CA (300 SCRA 345)
Reiterated Bonilla case: prior settlement of estate not
action pertaining to the estate.
Heirs of Pinchay [?] v. Del Rosario
Prevented from filing action because the plaintiffs

would get something)


2. Even before the actual partition of the estate, the heir can

have not established proof that they are the

dispose can dispose of his/her interest over the inheritance.

De Borja v. De Borja the heir was allowed to

onerously dispose of her share even if she did not

the result of the partition.


So if you end up having no share in the estate, then

necessary for heirs to commence action or continue

effectivity of the old Civil Code, so the spurious

estate, and not specific properties.


Liu v. Loi (405 SCRA 316)
An heir can sell his interest in the decedents estate,
but always subject to the rights of the creditors and

It only vests upon death of the predecessor.


What are the consequences of Art. 777?
o 1. Determination of who the heirs will be is determined at the

division of estate.
So he can only sell his ideal or undivided share in the

know how much exactly she would get.

Could she have disposed of it gratuitously?

Yes.
3. Heirs have a right to substitute their predecessor in an action

that survives.

Bonilla v. Barcena
Patrimonial right right to prosecute an action
Updates on the abovementioned jurisprudence:
o Lee v. RTC (423 SCRA 497)
An heir can sell his right/interest in property under

decedents heirs.
How to resolve: you can continue an action if you are

indisputably an heir.
What are the three kinds of succession?
o 1. Compulsory
o 2. Testamentary
o 3. Intestate
In absence or default of valid will
(781) is a WRONG provision. The heirs acquire rights to the
inheritance upon death. Any fruits/accruals after will indeed belong to
the heirs, but not through succession, but through accession discrete or

continua.
What is the importance of distinguishing between heirs and
legatees/devisees?
o This is an important distinction because of the rules on

administration. However, an heir can only alienate

preterition.

87

Heirs succeeds to an aliquot part of the estate, whether


through testate or intestate

COMPULSORY SUCCESSION

Legitimes

(886) Legitime
o A part of the testators property

An aliquot or fractional part


o Which he cannot dispose of gratuitously

Why is gratuitously underlined?

Because he can dispose of it onerously. He

cannot donate to an extent that will eat into

the value of the legitime.


But he can sell his properties. Onerous
dispositions do not impair the legitime.

(Joaquin v. CA)
So he can gratuitously dispose?

YES. But, he cannot eat into the legitime.


Manongsong v. Estimo: Sale does not affect the
value of the decedents estate. There is an exchange

Concurring compulsory heirs

Surviving spouse

Illegitimate children/descendants
What are the two principles?
o A) Exclusion and B) concurrence
o These two principles simultaneously operate to establish
o

of value.
Who are the compulsory heirs? (887)
o 1. LC and descendants
o 2. LPs and ascendants (in default of #1)
o 3. SS
o 4. ICs
Which are primary and which are secondary?
o Primary those who are never excluded

Legitimate children/descendants
o Secondary those who receive only in default of the primary

Legitimate parents/ascendants

Illegitimate parents

N.B. does not go beyond parents

combinations of compulsory heirs


Legitimary combinations [recit]

1 LC, 1 IC
1 LC, 2 IP
3 IC, 2 LP, SS

LC = ; IC =
LC =
LP = each; 3 IC = 1/12 each; SS =

2 IP; SS
2 AC; 1 LC; 1 IC
1 LC; 2 IC; SS

1/8
IP = 1/8 each; SS =
LC = 1/6 each; IC = 1/12
LC = ; SS = ; IC = 1/4 each, but

6 LC; 3 IC
5 IC; SS
1 AC; 2 LP; SS
3 LGP; SS

reduced to 1/8
LC = 1/12; IC = 1/24
SS = 1/3; IC = 1/15
AC = ; SS =1/4; LP = 0
1 LGP (one line) = ; 2 LGP (other

1 IC; SS
2 AC; 2 LP
3 LC; 2 IC; SS

line) = 1/8; SS =
IC = 1/3; SS =1/3
AC = each
LC = 1/6 each; IC = 1/12 each; SS =

2 AC; 1 LP; SS

1/6
AC = each; SS =

Legitimate children or descendants


o Get a constant

Note: There are only three cases where nobody gets


:

88

SS 1/3; IC 1/3

o
o
o

SS, exceptional circumstance of in articulo

Now, she can concur, and is in fact always an heir. But her

mortis 1/3

SS 1/4; IP 1/4
They are the primary compulsory heir
The nearer exclude the more remote. So children exclude

o
o

grandchildren.
BUT the grandchildren can inherit if representation is proper

Predecease

Disinheritance

Incapacity/Unworthiness
N.B. If all the children renounce, then the grandchildren will all

inheriting through compulsory, testamentary, or

child/children will get what is left to the exclusion of


the grandchildren
The adopted child is, for purposes of succession, in the exact

position as a LC

Must be legally, not de facto adopted


Does the adopted child retain the right to succeed his

biological parents?

This is still an open question. There is an obiter in the


Stephanie Garcia case that the adopted child does,
but it is a mere obiter, and it cites a Family Code
provision that might have been repealed by the

intestate succession.

Unless there is reconciliation.


Lapuz v. Eufemio: If pending a case for legal
separation, one of the spouses dies, the action is

inherit equally (per capita)

But if only a few renounce and not all, the remaining

share is variable.
What kind of marriage is needed to become a SS?

Valid or voidable
What is the effect of legal separation?

Final decree will disqualify the guilty spouse from

automatically extinguished and there will be no LS.


What are the prerequisites to have the SS inherit only 1/3?

1. SS inherits alone

2. The marriage was in articulo mortis

3. Decedent dies within 3 months of the marriage

4. Couple did not live together for at least 5 years

5. The decedent was the one at the point of death

upon marriage
Illegitimate Children or descendants
o
No more distinction between natural and spurious children.
o What if they concur with legitimate children?

Always get of one LCs share

Their share can be reduced pro rata if the shares


exceed 1 whole. They are less preferred than SS and

Domestic Adoption Act.


Legitimate parents or ascendants
o Nearer exclude more remote. Parents exclude grandparents.
o Equal division by line. So paternal and maternal lines split by

LC.
What if they do not concur with legitimate children?

Variable shares. If with SS, then 1/3. If with IP, then

half then divide between the parents.


Surviving spouse
o Before, in the Spanish Code, she cannot concur with LC; she

. Alone, collectively. If with LP and SS, then .


What is the rule on representation?

The illegitimate children of an illegitimate child can


represent the latter. The illegitimate children of a

would only get usufructuary right over the property of the LC.

89

legitimate child cannot represent the latter.


Illegitimate Parents

o
o

Excluded by BOTH legitimate and illegitimate children.


No succession for illegitimate ascendants beyond IPs

inheritance.
What is the mistake of the judge in Seangio?

He said that it is total omission from the will. It must

preterited?
o Not always! [ex. there was no disposition in his favor]
X has two children, A and B. X made a will giving B of his estate,
and the other half to Ateneo. X did not give A anything by way of

be total omission from the inheritance.


When is a compulsory heir completely omitted?
o When he gets nothing in the way of:

1. testamentary (institution of heir) disposition

2. legacy or devise

3. intestate succession

4. donation inter vivos


Dont forget donation inter vivos!

and he was not disinherited.


Why does it mention compulsory heirs in the direct line? Who is

donation inter vivos either. But A predeceased X. Is there


preterition?
o No. A predeceased. You only determine fact of preterition

death of the testator, not time of making the will.


What is the effect?

The entire estate is thrown open to intestacy because

there are no legacies or devises.


X said I will disinherit my son B because he took up law, not
medicine. Is this a valid disinheritance?
o No. It is not one of the grounds. It is rendered ineffective, and

only when the rights to succession vest.


What if there is something is given but is insufficient?
o Remedy is completion of legitime (906)
What is the effect of preterition?
o Annulment of the institution of heir. But legacies and devises
o

upon death of testator. (JLT Agro)


[Same facts] A, however, had a son A1. A predeceased X still. Is
there preterition?
o Yes. But not of A, but of A1.
o Does it matter than A1 was born after the will was made?

It does not matter. The reckoning point is still time of

a compulsory heir not in the direct line?


o The surviving spouse.
o So who is covered?

It can be LC, IC, and as circumstances apply, LP or IP


o How do you determine who are the compulsory heirs?

Determine only at the time of death because that is

What is preterition?
o Total omission of a compulsory heir in the direct line from the
o

Does the fact that an heir is not mentioned in the will mean that he
is preterited?
o No, if the will does not dispose of the entire estate. (Seangio)
If someone dies intestate, can there be preterition?
o No.
Does the fact that an heir is mentioned in the will mean he is not

Preterition (854)

therefore, there is no preterition.


[Same facts] But the second sentence now says, in addition, so
I give of my estate to Ateneo, and the other 1/2 to my brother Z.
What happens here?
o There was no preterition. So X will get his legitime because

are valid in so far as they are not inofficious.


If there are no legacies or devises, the entire estate is thrown

the disinheritance is ineffective. The dispositions in favor of

open to intestacy.

90

Ateneo and Z are valid but inofficious, so these will just be


o

reduced but not rendered invalid. [Take note of this scenario]


Why does it become like this? Because preterition will only
the heir being expressly disinherited). An ineffective
disinheritance, thus only results into the heir being able to
demand his rightful share. Preterition does not vest.

Disinheritance (915-923)

o
o

What is the effect of disinheritance?


o Primary effect exclusion from the legitime
o Actual effect TOTAL exclusion of the heir from all manner of

succession: exclusion of the heir from the legitime and the


is instituted in an earlier will.
Requisites?
o 1. Made in a will

Can you disinherit in a medium other than a will?

No. ONLY through a will.


o 2. Done for a cause specified by law.
o 3. Specify the cause
o 4. Must be unconditional
o 5. Must be total
o 6. Cause must true
o 7. If the truth of the cause is challenged, the truth of the cause

interdiction
What is the special requirement for the ground of refusal to give

have been unjustifiably refused.


What is maltreatment by word or deed?
o It covers a wide range of misdeeds, but it must be verbal or
physical assault of a serious nature
o No need for conviction
What is abandonment as a ground to disinherit a parent?
o Complete withholding of presence, love, care, and opportunity
to display maternal affection; total denial of support and

must be proved by the proponent

What is the policy of the law?

It is reluctant to grant disinheritance. This is

why the burden of proof is automatically with

maintenance
o See discussion below in unworthiness
Must there be conviction in Attempt against virtue?
o No.
What is giving cause for legal separation as ground to disinherit
a spouse imply?
o No need for decree of legal separation, because merely giving

the proponent of the will. The rebutting heir

ascendant
2. Adultery/concubinage with spouse of testator
3. Conviction of crime which carries with it penalty of civil

support?
o There must have been a prior demand, and the demand must

intestate portion, if any, and also from testamentary succession

not enough; there must be conviction.


But some do not need final conviction, like

Maltreatment by word or deed

Living a dishonorable life


o 2. The grounds are exclusive.
o Self-study the grounds RFB
Which grounds require conviction by final judgment?
o 1. Attempt against life of testator, spouse, descendant,

apply when there is inadvertent omission from the will (without

Example: Number 1. Mere attempt to take the life is

is not tasked to prove the denial.


Take note of the following:
o 1. Some of the requisites require conviction by final judgment.

ground is enough
Contrast this with loss of parental authority as a ground
to disinherit a parent:

91

Need actual loss of parental authority for this ground


Is there representation in disinheritance?
o Yes, if the disinherited heir is a descendant.

Also for brothers/sisters being represented by

nephews/nieces but only in intestacy and not

compulsory heirs)
No, if the disinherited heir is an ascendant.
N.B. representation does not apply to testamentary succession

Unworthiness (1032-1040)

(obviously).
What does representation cover?

Compulsory and intestate succession

See rules on representation for further distinction


Does the disinherited parent have right to usufruct or

there is need for final conviction for some, not for others, and one

guardians of the childs property does not apply to a


disinherited parent.
How can disinheritance be lifted?
o Reconciliation between the parties.
o It may be oral, in writing, or by conduct (implied).
o What must be the form of express pardon?

It must be a pardon expressly and concretely

requires exoneration.
First ground (actually three):
o 1. Abandonment of child
o 2. Inducement by parent for daughters to live a corrupt or
immoral life
o 3. Attempt against virtue of daughter
This article refers to unworthiness of compulsory heirs. Parents
who have abandoned their children. But what if the child is under
the authority of grandparents, will this apply?
o RFB thinks so. It should probably be ascendants who

extended to the offender, and not a mere general


o

1032 enumerates causes for incapacity to succeed/unworthiness and


there is a close parallel with disinheritance. As with disinheritance,

administration of the property constituting the legitime?


o No. The usual rule in the FC that the parents are legal

any left.
Does it revive testamentary dispositions in a prior will?

Yes, unless it was revoked.


What if there is reconciliation before disinheritance is
made?

The right to disinherit is extinguished

compulsory (because brothers/sisters are not


o
o

He recovers the right to the intestate portion, if there is

pardon extended to all who have offended him


What is the nature of pardon through conduct?

The intent to forgive must be clear. This is a question

abandon descendants.
Abandonment has no precise meaning. How do we understand it
here?
o

of fact.
What is the effect of reconciliation?
o It removes the disinheritance.
o Does he recover legitime?

Definitely. The heir recovers his right to the legitime.


o Does he receive anything by intestate succession?

When the parent/ascendant culpably neglects the support of


the child. Culpably means without justification.
What about giving consent to adoption, is it

abandonment?

No. It is not a culpable act. It is encouraged by law.


Re: inducement. What about grandchildren/granddaughters?
What about grandsons?
o A liberal interpretation would include all these.

92

set aside the disinheritance. But because there is no written

Attempt against virtue?


o This should include grandparents
o Does this need conviction?

No.
o What does attempt cover?

All stages of commission.

Also not limited to rape: it should cover other offenses

disinheritance that prevail, because disinheritance is


the express will of the aggrieved party. It should

against chastity.
Are the grounds exclusive?
o Yup.
Do you need actual disinheritance?
o No. The law itself excludes the heir.
What is the extent of the disqualification?
o Total, like in disinheritance no compulsory, testamentary,

prevail over unworthiness.


If the facts are the same but Y did not disinherit X,
unworthiness will apply. So there has to be a written

intestate
Is there representation here?
o Yes, in the same way as disinheritance.
How does one set aside unworthiness?
o 1. Written condonation
o 2. Execution by offended party of a will with knowledge of the

pardon.
When is capacity or incapacity determined?
o 1. In general, upon time of death of decedent
o 2. If institution is subject to a suspensive condition:

Time of decedents death AND

Happening of the condition


o 3. If judgment is a requisite of unworthiness, time of final
judgment
What if the disqualified heir makes alienations of hereditary
property and acts of administration?
o 1. As to third persons in GF, these are valid

In good faith if he acquired the thing for value (cant

cause of unworthiness
Why is the code stricter in unworthiness than disinheritance?
o This is an inconsistency, because there are many grounds

be a donation) and without knowledge of the defect of

happens when if the offended party avails himself of that

the transferors title


2. But the co-heirs can recover damages regardless from the

ground and actually disinherits.


Ex. X is the son of Y. X attempts to take Ys life. A case for

disqualified heir
3. But for necessary expenses, regardless of GF or BF, there

common between both unworthiness and disinheritance. This

pardon, the unworthiness persists.


How do we resolve this?

Commentators like Tolentino say that it is the rules on

frustrated parricide was filed, and he was convicted with final

judgment. It is a common ground in unworthiness and


disinheritance. So in this case, he is automatically unworthy.

must be indemnification of the disqualified heir


What is the nature of the possession of the disqualified heir?
o Possession in BF. Thus, must return the thing, with all its
accessions, and all the fruits he actually and could have

But Y still disinherits X, which he can do. There is no problem


here; he is just double dead. But what if X and Y reconcile?

Y admitted X back into his house, and forgave him orally.

received
What is the prescriptive period to declare incapacity and recover
property from the disqualified heir?

Under the rules on disinheritance, reconciliation is enough to

93

Five years from time of possession

Cause for LS

D of child/des

D of parent/as

D of spouse

Unworthiness

Attempt against

Attempt against

Attempt against

Attempt against

life1
Accusation of

life
Accusation of

life
Accusation of

life
Accusation of

crime2
Adultery/conc.3
Force to change

crime
Adultery/conc.
Force to change

crime

crime
Adultery/conc.
Force to change

will
Refuse to

will
Refuse to

will
Refuse to

support
Maltreatment by

support

support

Force to change

Prevent from
making will or
revoking one
Falsification or
forgery of will

Representation

will

word/deed
Dishonorable life
Crime with civil

Definition of representation?
o Article 970.
o Comment on fiction of law?

This is unnecessary. It is a right created by law, after


o

interdiction
Abandoned,

Abandoned,

induced to

induced to

corrupt life,

corrupt life,

attempt v. virtue
Loss of P.A.
Attempt by one

attempt v. virtue
Loss of P.A.

parent against
life of other

1 Of testator, spouse, ascendants, or descendants


need conviction

all.
Comment on the term representation?

Its a misnomer. Because what he gets in succession

belongs to him! He is actually subrogated.


When does representation apply?
o 1. Predecease,
o 2. Disinheritance,
o 3. Unworthiness/incapacity
o There is no representation in renunciation
In what kinds of succession does representation operate?
o 1. Compulsory
o 2. Intestate
In what lines does representation obtain?
o N.B. In both compulsory and intestate succession there is a
direct line and a collateral line. The direct line you have the
ascending and descending. Collateral are not ascendants or

2 Crime must be 6 years or more and found groundless


3 With testators spouse; Needs conviction
94

descendants, but are related to you up to the 5th degree.


For legitime operates ONLY in the descending direct line.

NEVER in ascending.
For intestacy

1. Direct descending line


2. One instance in collateral line: nephews and nieces

per capita. NOTE that this is different because in the


descending line, it will be still succession by

representing brothers and sisters of the deceased


What is the rule on adopted children?
o Cannot represent nor be represented, because the legal

heirs?

Same rule as direct line heirs: the nephews

relationship in adoption is strictly between adopter and

representation.
What if there is renunciation by all collateral

adopted.
What is the rule on representation by illegitimate children? (iron

and nieces will inherit per capita.


N.B. there is no distinction among the kinds of

curtain)
o Illegitimate child of a legitimate child cannot represent the

disqualifications in collateral representation, so as

latter.
o Illegitimate child of an illegitimate child can represent the latter.
o If the child is legitimate, he can always represent his parents.
What is the rule on shares of the succeeding representatives?
o Since they are only stepping into the shoes of the person

thing as disinheritance or unworthiness for brothers

long as all brothers/sisters die or renounce (no such

unworthiness for collateral heirs?

Its not. You cannot disinherit a brother or sister

represented, they could get unequal shares (per stirpes). Ex. A


had 2 children, B had 3. Both A and B predecease their father,

X. The 2 children of A split As share by each and the 3


o

children of B split Bs share by 1/3 each.


When does the rule change from per stirpes to per capita?

The rule changes when ALL, and not just some, of the
children renounce. The grandchildren will inherit per

and sisters), the nephews/nieces inherit per capita


Is it even relevant to talk about disinheritance or

capita.
What if all children predecease?

The grandchildren still inherit by representation, and

because hes not a compulsory heir.


What are the 3 rules on qualification?
o 1. Representative must be qualified to succeed the decedent
o

(e.g. C must be qualified to represent A)


2. Representative need not be qualified to succeed the person

represented (e.g. C need not be qualified to succeed B)


3. The person represented need not be qualified to succeed

the representative (e.g. B need not be qualified to succeed C)


What is the difference between representation OF and BY a
renouncer?
o Representation OF renouncer does not happen
o Representation BY renouncer can happen.

Illustrate this rule. ABC. C renounced Bs

not per capita.


How does the rule change for the sole case of
representation in the collateral line?

A, B, and C are brothers and sisters of X. If A and B

inheritance. But C can represent B if B predeceases

predecease X, then the children of A and B inherit per

A, because C is inheriting from A, not B.

representation.
But if ALL of A, B, and C predecease (or are

Reserva troncal

disqualified) the nieces and nephews of X will inherit

95

What is Reserva Troncal?


o See Article 891
Whats the purpose of reserve troncal?
o To keep property or return property to the line of origin.

(Sanchez Roman view)


What are the requisites of RT?
o 1. Person acquires property from ascendant or brother/sister
o
o
o

through gratuitous title


2. Dies without legitimate issue
3. Inherited by another ascendant through operation of law
4. There are relatives within the 3rd degree of consanguinity

property leaving the line. The ascendant


lines are common.4
o
o

be under the burden of RT because the law says so.


Its better to take it up as part of compulsory succession

because it can become an encumbrance on the legitime.


What are the two transmissions that have to take place?
o 1. By gratuitous title, from the origin to the prepositus

This can include donation or any kind of succession


o 2. By operation of law, from the prepositus to the reservista

ONLY compulsory or intestate succession


What if there is only one transmission?
o There is no RT. There have to be two transmissions for there
o

2. Prepositus
3. Reservista

Has to be a different ascendant from the origin

Must he be another ascendant from another line


or can it be same line?

If another line, no question he can be a

that it should pass with no burden. But if it passes as RT, it will

relationships is illegitimate, there can be no RT.

2. No further inquiry beyond the origin is required


1. The origin

Ascendant of prepositus, of any degree, of either line

Or brother/sister of prepositus, either full or half blood

If full blood, Manresa says yes. JBL says


no, because there is no possibility of the

belonging to the line from where the property came


Why is the reserva troncal included in compulsory succession?
o The RT can limit the operation of the legitime
o If that part which is reservable passes as legitime, the law says

1. All of these parties must be legitimate. If any of the

reservista. (Ex. F S M)
If same line (Ex. GF grandson F [same
line as grandfather, since he is the son of the
grandfather]), according to JBL, there is no
RT. According to Manresa and SanchezRoman, there is an RT.5

4 The difference is explained by different theories.


JBLs view is that RT is curative or remedial; if it does
not leave the line, no need for RT. Manresa says that it
is preventive, too the RT seeks to prevent the
property from leaving the line as well.

to be RT.
Solivio: there was just one transmission from the mother to the
son, by donation. When the son died, he had no ascendants at
all or descendants either. Because there was no other
ascendant, the second transmission could not happen. The

5 Again, the source of disagreement is a different in


theories on nature and purpose of RT. RFB leans
towards Manresas and Sanchez Romans view.

closest relatives are two aunts, who are not ascendants.


Who are the parties in RT?
o But first, two basic rules:

96

4. Reservatarios

They must be related within the third degree, in

B2, and have a child C. A1 donates property

relation to the prepositus, and of the line where the

to C. B1 died, when C dies, it goes to B2.

property originally came from

N.B. Of course exclude legitimate

Thus, there is an RT here. When B2 dies,


A2 survives and claims the property as

descendants, since if the prepositus had

reservataria (since she is related by 2nd

decendants, there would have been no RT


Who are these possible reservatarios?

Parent, grandparent, great grandparent, etc.

Brother, sister, nephew, nieces, uncles, aunts


Note: in the situation that JBL seeks to exclude (but

distinction since there is no change in lines.


When do you determine who the reservatarios?

When the reservista dies. They do not have

to exist when the prepositus dies.


If there are several, but of different degrees, how

basis, not integral and indiscriminate, as


Scaevola believed.
Apply the rules on intestate succession
intestacy that applies is representation of

nephews or nieces of brothers/sisters [so the


brothers/sisters do not exclude
nieces/nephews].
What is the consequence?
Gonzales: The reservista cannot choose, by
chooses for her.
Should the reservatario be related to the origin?

reservatarios present upon the reservistas death


3. The right is alienable, subject to the same resolutory

reservatarios present upon the reservistas death


3. The right is alienable, subject to the same suspensive

o
o

condition
4. The right of expectancy is registrable
Dont these two rights of registration conflict with each
other?

97

to the origin.
This is not yet established by jurisprudence,

condition
4. The right of ownership is registrable
What is the right of the reservatarios? (Sienes)
o 1. Right of expectancy
o 2. Subject to a suspensive condition, that there will be

will who the reservatarios will be. The law

relatives. A2 is not related .


So what is the majority view?
The reservatarios must be related by blood

but this is a good view point.


What is the nature of the right of the reservista? (Edroso)
o 1. Right of ownership
o 2. Subject to the resolutory condition that there will be
o

(direct over collateral). Another rule of

meets the purpose and requirements


SANCHEZ ROMAN she is not, because

do you determine who gets what?

Tolentino: Selection is made on preferential

degree to C, the prepositus).


MANRESA she is a reservataria, she

you didnt return it to A1s line and A1s

Manresa favors), there is no need to make a

A1 and A2 have a child, B1. B1 is married to

No. Theres only one title. The right of the reservista

is annotated as ownership; the right of the

reservatario is annotated as an encumbrance.


What kind of property can be reserved?
o Any type
o What is the effect of substitution (e.g. the prepositus sells

the property)?

No RT because it must be the very same property that

goes through the two transmissions for RT to arise


What is the nature of the reserved property when the reservista
dies?
o

Its not part of his estate upon death. It passes by strict

operation of law to the reservatarios.


What are the rights and obligations of the reservatarios and

benefited.
And then he may delegate to a third person: a) the
designation of persons, institutions, establishments

alienates (within 90 days from acceptance by the reservista)


o Appraise the movables
o Secure by means of mortgage
o Registration is demandable Sumaya
What are the causes for extinguishment of RT?
o 1. Death of reservista (causes it to transfer)
o 2. Death of all the reservatarios
o 3. Renunciation by all the reservatarios, and none is born
o
o
o

power.
What cannot be delegated?

1. Designation of heirs, legatees, devisees

2. Duration or efficacy of the designation

3. Determination of the portions they get


What is the exception to non-delegation?

The testator must determine: a) property or amount of


money given, and b) the class or cause to be

reservistas?
o Reservista prepares inventory
o Right of reservatarios to annotate in case the reservista

What is the nature of making of a will?


o It is a strictly personal act. It cannot be delegated.
o The mechanical aspect is delegable but not the disposing

within the class or cause, or b) manner of distribution


Testamentary succession can never impair the legitime
What is a will?
o An act whereby a person is permitted, with the formalities
prescribed by law, to control to a certain degree the disposition
of his estate to take effect after his death
Why is this inaccurate?

Act is too broad. Instrument is a better word.


What are the two kinds of wills?
o Holographic and attested/notarial
What are the three common requisites (first two, textual; one is
o

non-textual)?
o 1. It must be in writing (textual requirement)
o 2. Executed in a language or dialect understood by the

subsequently
4. Total fortuitous loss of the property
5. Merger or confusion of rights
6. Prescription or adverse possession

testator(textual requirement)

Is this rule mandatory?

Definitely.

So can the will be translated to the testator?

TESTAMENTARY SUCCESSION
In general

98

No. It must be written in a language known

to him. Do not confuse this with the

not just a presumption of sanity.

attestation clause, which can be translated.


Must the will state it was written in a language

known to the testator?

No. It can be shown by extraneous


o

evidence/evidence aliunde.
3. Testamentary capacity

Who can make a will?

Natural person (juridical person cannot make

years old or above and of sound mind.


What must you know to establish a sound mind?

1. Character of estate

2. Proper objects of your bounty

3. Nature of the testamentary act


Is there a presumption?

Yes, a rebuttable presumption of

infirm or ill.
o Is a cross allowed (Garcia v. Lacuesta)?

No, in general.

THE EXCEPTION: If that is his usual way of signing.


There are two ways of interpreting the word the end, where the

in the will
Must the signing always be at the left margin?
o No. It can be any margin.
o Why is there no requirement for marginal signing on the
last page?

Because it would be superfluous. He also signs at the

before the making of the will, was


publicly known to be of unsound

mind
2. When the testator has been

end.
The testator must sign in the presence of the witnesses. The
witnesses must also sign in the presence of the testator and of one

placed under guardianship for

the left hand margin, except the last.


How can the testator usually sign?
o He writes his name
What are the other recognized ways?
o Affixing thumbmark (Matias v. Salud)

Is the thumbmark for the testator always a valid

testators signature should be. What are these?


o 1. The physical end, where the writing stops
o 2. The logical end, if there are non-dispositive portions written

testamentary capacity
When is there no presumption?
o 1. If the testator, 1 month or less

Again, this is rebuttable


A requirement is that the testator must sign the will and every page at

way to sign the will?

Yes. Under all circumstances, even if not

a will)
Who are the two classes of disqualified persons?

Those below 18 years old

Those of unsound mind


Putting it positively, one must be a natural person 18

There is a presumption of insanity,

another. What does the law mean by in the presence?


o Nera: The requirement of presence does not mandate that the

insanity
What is the presumption then?

person must actually see the other party signing; what is

99

required is that he could have seen, by casting his eyes in the

proper direction (without changing his physical position).


One of the options given to the testator is that he/she may ask
someone else to sign for him, provided some conditions are

or have any particular reason to get an agent?

No.
o What should the agent write?

He must write the testators name

It must be in the agents own handwriting


o Must the agent write his own name?

It is not required.
Must the attestation clause be signed?
o Yes.
o By whom?

The witnesses.
o What about the testator?

No. The attestation clause is purely an affair of the

dated anyway.
Who certifies?

The notary public as required by the notarial law.


Should a holographic will be dated?
o Yes.
What if the notary public acted outside his notarial jurisdiction?
o It is void and tantamount to not being notarized.
If the will was notarized by one of the witnesses, who was also a
notary public, will this make the will void?
o No, if there are three other witnesses apart from the notary.
o If there are less than three witnesses including him?

The will is void. There is a failure to meet the required


o

too. For the latter, you are undermining the notary

publics impartiality.
What is the requirement if the testator is blind?
o Two readings by the notary public and by one of the attesting
o

witnesses.
Is this mandatory?

Yes. Non compliance makes the will void.

Should this mandatory nature extend to illiterate


deaf mutes?

Yes.

Of course, the two persons need not be the

thereof, or caused some other person to write his name under


his express direction, and in the presence of the instrumental

number of witnesses.
But can a notary public be a witness?

Definitely. But the notary public cannot be counted as


a witness, and the witness cannot be the notary public

witnesses.
Where should the witnesses sign the attestation?
o At the end of the attestation clause.
o Can they sign at the margin or elsewhere (beside)?

No. The attestation clause is deemed unsigned.


What must the attestation clause state?
o 1. Number of pages of the will
o 2. Fact that the testator signed the will and all the pages

The certification of the acknowledgement will be

present (1. Express direction; 2. In his presence).


o Should the testator be physically prevented from signing

Why?

witnesses
3. That the witnesses signed the will and all the pages thereof

notary and one witness; it can be whoever


can practicably communicate the wills

in the presence of the testator and of one another


Must the attested will bear a date?
o No.

contents to him
Must the will or attestation clause mention compliance
with this mandatory requirement?

100

No. It can be established by extrinsic evidence.


Garcia: The lawyer who assisted the testator read the will.

also made in Feb/61, which could have possibly repealed it. In

It was read only once. The lawyer, however, read it aloud

a very liberal decision, it was upheld.


Where should the date be?

There was no mention where it should be. It could be

in the body.
Can you sign by a thumbmark, as in an attested will?

Seems unlikely. It must be written by the hand not

in the presence of the attesting witnesses and the notary


public, who had their own copies of the will. The testator
was also listening. Art. 808 was hence not complied with.
But is this valid?

This is valid, because there was substantial

a thumbmark. Though there is no jurisprudence on

compliance. The intent of the law was achieved to


o

prevent fraud upon the testator.


Alvarado: Invalid because it was done by the lawyer who
drafted the will who read it aloud, so it wasnt even one of the

this.
813-4 dispositions after the signature
o Some commentators say that this implies that the signature
o

two parties enumerated. And he read it out loud only once.


Art 809 is the provision on substantial compliance with respect to the

attestation clause, which needs three things (# of pages, fact that the
testator signed at the end in the presence of the witnesses, and that the
witnesses did the same in the presence of the testator and of one
another). How strict must this be in light of Art. 809?
o In the code itself, there is no clear rule about how liberal
o

alterations in holographic wills?


o It must be authenticated by the testator through his signature
o Kalaw v. Relova: Cancellation of the name of the original heir

interpretation could be.


Caneda: defect was failure to state that the witnesses signed

and writing above it of the name of another heir invalid

was a fatal defect. Adopting JBL Reyess suggested standard,


it could not be remedied by visually examining the will.
Azuela: Deficiency was failure of the clause to state the

because it was not validated, because it was not signed.


But the court weirdly held that the cancellation was valid! But it
was not signed. This is an odd decision, because it had an

number of pages, which was left blank. HELD: valid omission,

signed by the testator.


If there are several, what is the rule?

1. Dated and signed

2. Or each additional disposition may be signed,

provided the last one is dated and signed


What is required for insertions, cancellations, erasures, or

in the presence of the testator and of one another. HELD: This

must be at the bottom of the holographic will.


If there is only one additional disposition, it must be written and

because it can be supplied by a visual examination of the will.


Requirements of a Holographic will?
o Completely written, dated, and signed by the testator
o Roxas v. de Jesus: Feb/61 was held as a sufficient date this

is a problematic decision. Fortunately, there was no other will

internal contradiction.
Are joint wills allowed?
o No.
o But for aliens, if they execute their will abroad and their national
o

law allows it, then its valid.


If aliens execute it locally, there are two views: its either valid
because national law allows it, or it is void due to public policy.

101

second will.

If it makes an independent disposition, it is a second

805?
o
o
o
o
o
o

will.

If it alters, modifies, changes, it is a codicil.


But honestly, this distinction is academic, because the

requirements of a codicil and a will are just the same.


827 An incorporated document. It is attached to a will and

1. Of sound mind
2. At least 18 years old
3. Not blind, deaf, dumb
4. Able to read and write
5. Domiciled in the Philippines
6. Not convicted for falsification of document, perjury, or false

is intended to explain. It cannot make a testamentary


disposition because otherwise, it has to comply with the

testimony
What do these qualifications establish?

Competence only, but not credibility per se


When is competence of the witnesses needed?

During attestation only. If they become incompetent

requisites and form of a will.

Requisites?

1. It must predate the will

2. It must be signed on every page by the


testator and witnesses, except if it is

after, it has no effect.


When is a witness to a will disqualified to succeed?
o When he is a witness to a will where something is given to him,
o
o

his spouse, parent, or child


What is the effect?

The will is valid but the witness can succeed to the will
How many witnesses are needed for this provision to

voluminous
3. It must be clearly referred to in the will
4. It must be referred to in probate as that

document
So since it requires witnesses, can you not have
an incorporated document with holographic wills?

Some say you cannot because there are no

apply?

Only three witnesses. If there are at least three other

witnesses. RFB says that you must interpret


it liberally, and since there are no witnesses,

competent witnesses, there is no disqualification


What kind of succession is affected?

Only the testamentary dispositions, but not legitime or

then it just means its just the testator that

intestate share because this is not affected by the

Sometimes its hard to determine whether it is a codicil or a

the Filipino.
What are the requisites to become a witness to a will executed in

If a Filipino and alien execute a joint will, its always void as to

witnessing (i.e. if the witness is a son of the testator)


Codicils and incorporation by reference (825 and 827)
o Article 825 defines a codicil. This is exam material. It assumes

signs.
Two modes of testamentary succession:
o 1. Institution of an heir
o 2. Institution of devisee or legatee
What is the permissible form of instituting a successor, whether
heir, devisee, or legatee?

the existence of a prior will. You cannot have a codicil without


a prior will. It can explain or alter the prior will.

102

Only thing required is that the identity of the successor is

the estate?
o Solidarily liable for loss or destruction of the thing devised or

adequately determined in the will. No need to mention by

name, as long as the successors identity is determinable.


I institute my brothers and sisters to of the share of my estate.

What does this mean?


o Siblings, whether legitimate, illegitimate, or half, inherit in equal
o

shares.
This is different from intestacy, where whole, half, and

illegitimate siblings inherit in 2:1:0 ratio. (You cannot inherit

from your illegitimate sibiling)


What is the rule on statement of false causes on a will?
o In general, it is deemed not written.
o Exception requisites:

1. Cause must be false

2. It must be shown to be false

3. It must appear on the face of the will that the

bequeathed, even if only one is negligent


Who is liable for eviction?
o In general, the estate
o For subsidiary legacy or devise the heir, legatee, or devisee
charged
929-937 outline:
o 1. General rule: you give away what your interest covers. No
more, no less. If you own the whole thing, you give the whole
thing.

the monetary equivalent is given.

Exception 2 you give less than you own.


2. Legacy or devise of a thing belonging to another under the
ff rules, you can:

A) if the testator gives an order to acquire it, the estate

known of the falsity of the cause


If heirs are given different fractions each, and the total is less than
the free portion, what happens? (852/3)
o The rest of the free portion goes into intestacy.
o But what if it is shown that the testator intended to

tries. If the owner refuses to sell, the estate gives the

dispose the entire free portion?

If the disposition is less than the portion, you increase

monetary equivalent.
B) If the testator wrongfully believed he owned the
thing, the disposition is void.

Exception if subsequent to making the

proportionately. If more, you decrease

disposition, the testator acquires the thing

proportionately.

924-959 Legacies and devises

Exception you can give more than you own. This


estate will attempt to acquire it, but if the estate fails,

testator would not have made the institution had he

What is the liability of two or more heirs who take possession of

Some provisions are inaccurate. It is estate that is liable for legacies

gratuitously or onerously.
C) If he knew he did not own it, but did not order for its

acquisition there is an implied order to acquire.


3. The legacy or devise of a thing already belongs to the
devisee or legatee

A) If a thing given already belongs to the legatee or

and devises, not compulsory heirs as 925 says. You cannot charge the
compulsory heir for the legacies and devises. Exception: indirect legacy

devisee, the disposition is void

103

Subsequent alienation is not validated,

unless as Manresa says, the alienation is to

was made. Ex. X owed Y 2 debts in 1999. Y, in his

the testator himself


B) If the thing belongs to somebody else when the will

will, gave Z the debts X owed Y. X owed Y 3 more

was made, and he erroneously believed it belong to

him, and later, the legatee or devisee acquired the


thing

It is still void, because the testator was in

debts in 2001. Y died. What debts transfer?

Just the 2 existing when the will was made.


What is the treatment of a legacy/devise to a creditor?
o It will be treated like any other legacy or devise and will not be
o

error
C) If the testator knew it did not belong to him, and the

imputed to the debt.


What is the exception?

Imputed to the debt if the testator provides so. If the


debt exceeds the legacy/devise, the remainder may

thing was acquired onerously by the devisee/legatee,


the estate pays

Except if acquired gratuitously, then there

is nothing else to be done


D) If the thing was owned by the testator at the

be demanded as an obligation of the estate


When are there alternative legacies or devises?
o It exists if one provides that among several things mentioned
o

making of the will, but the legatee/devisee acquired


the thing from the testator after, the disposition is void

only one is given.


Who has right of choice?

1. In general, the estate, through the executor or

(because subsequent disposition, even to the


o

recipient himself, renders the legacy/devise useless)


4. Legacy/devise directing the estate to remove the

encumbrance of property of another the estate pays for it

Pledge/mortgage estate must pay for it first

Any other kind of encumbrance like easement or


o

encumbrance passes with the things


5. Legacy of credit or remission

i.e. giving to the recipient the debt owed to me by

upon the testator when he dies


If the testator sues after making the disposition

ipso facto the legacy is revoked. Mere filing revokes

the disposition. Extrajudicial demand does not revoke


the disposition. It must be a complaint for collection.

administrator in a direct legacy or devise

If he dies, the successor E/A chooses


2. In a subsidiary legacy or devise, the heir, legatee,

or devise charged

If he dies, his heirs choose

3. If so provided, the legatee or devisee


o What is the nature of the choice?

Irrevocable
What is the rule on validity of generic legacies/devises?
o 1. Generic legacy valid even if no such movables exist in the

another person effective as to remaining debt owed

If generic, on the debts existing when the disposition

testators estate upon his death (estate just acquires it)


2. Generic devise valid only if there exists such an immovable
in his estate upon death
Who chooses?

The executor or administrator

Except if the choice is expressly given to someone


else

104

What is the limitation?

Neither superior nor inferior in quality


o What is the nature of the choice?

Irrevocable
Legacy of education, support, or periodical pension:
o A. Education

Lasts until age of majority or completion of the course,

o
o

partly gratuitous, the recipient cannot accept the

unless disproportionate to the estate value; tertiarily,


social standing or value of the disposable portion of
the estate
C. Legacy of a periodical pension

Demandable upon the testators death, and

succeeding ones at the beginning of the period


without duty to reimburse should the legatee die

vivos, so the remaining parts are all free portion.


What is the rule on acceptance and repudiation of legacies and
devises?
o Acceptance may be total or partial

Except: if the legacy/devise is partly onerous and

provides otherwise
Amount as fixed by the testator; secondarily, that
which the testator used to give when he was alive

mathematical necessity. Rule 950 is followed.


Or maybe the testator already covered for the
compulsory heirs legitimes through donations inter

of disposable portion of the estate


B. Support

Lasts until the legatees lifetime, unless the testator

in 911.
If the reason for reduction is something else, use Rule 950.
What other reasons could exist?

A testator has no compulsory heirs, but he gave away


too many legacies and devises, by sheer

whichever comes later


Amount as fixed by the testator; secondarily, that
which is proper, depending on social standing or value

When do you use which?


o If the reason for reduction is impairment of legitimes, use Rule

before the lapse of the period


What is the order in 950 for reduction?
o 1. Remuneratory
o 2. Preferred
o 3. Legacy for support
o 4. Education
o 5. Specific
o 6. All other, pro rata
What is the rule in 911?
o 1. Reduce pro rata non-preferred legacies and devises
o 2. Reduce pro rata preferred legacies and devises

gratuitous part and renounce the onerous part

Other combinations are allowed


In case of repudiation or incapacity of the legatee/devisee, what
are the applicable rules (in order)?
o 1. Substitution
o 2. Accretion
o 3. Intestacy
When is a legacy or devise without effect?
o 1. Transformation

Converted the thing


o 2. Alienation

Either onerous or gratuitous, and even if the thing

reverts to the testator


Exceptions?

1. Reversion was caused by annulment of


alienation because there was vitiated
consent

105

2. Reversion due to redemption in a pacto de

retro sale
3. Total loss before the testators death

Rules common to heirs, legatees, and devisees

Capacity to succeed:
o In fact, the basic rules are common to all kinds of succession
There is no exception here.)
Art 1025 The heir, legatee, or devisee must be living when the testator
dies. There is NO exception, contrary to what this provision suggests.
o Representation is not an exception because the representative
o

during last illness


1028 only applies to testamentary succession: extend to prohibited

donations in 739
What if the disposition is for prayers and pious works for the

benefit of his soul and no specifications are given?


o to the church/denomination of testator
o to the State
1032 disqualifications (unworthiness) these are general; these bar the
DQ heir from compulsory, testamentary, or intestate succession

must at least be conceived already.


For juridical persons, it must exist juridically when the testator

Substitutions (857-870)

dies.
1027 First 5 paragraphs are important because they enumerate
instances where one is incapacitated to succeed in testamentary

succession. It does not apply to other kinds of succession.


o 1. Priest who heard confession of testator during last illness or
minister of gospel extending spiritual aid in this period.
Requisites:

A. Will executed during last illness

B. Spiritual ministration extended during last illness

C. Will executed during or after the spiritual


o
o

ministration
2. Relatives of priest/minister within 4th degree or his institution
3. Guardian, from ward before final accounts of guardianship

approved

Except if guardian is A/D/sibling/spouse


4. Attesting witness to the execution of a will, spouse, parents,

competent witnesses to the will, under here too


5. Physician or health officer who took care of the testator

(Alive + qualified to succeed at the time succession opens.

Put in the exception, where there are three other

children, or anyone claiming under that witness, spouse,


parent, or children

106

For what kind of succession does this apply?


o Only testamentary succession. You cannot have substitution in
compulsory and intestate succession.
What are the two kinds of substitutions?
o 1. Vulgar
o 2. Fideicomissary
o The code seems to enumerate two more:

1. Reciprocal

2. Compendious

(Several heirs one substitute)

but these actually are just variations. They go into


mode.
What is substitution vulgar?
o Instituting an heir in default of the one instituted

Predecease, incapacity, renouncement


o How do you make it?

Enumerate all the three causes


o Can you restrict vulgar to 1 or 2 grounds?

Yes. Just specify.


What are the requisites for fideicomissary?

1. First heir takes the inheritance


2. Second heir takes the thing after tenure of the first heir
3. The second heir must be one degree from the first heir

What does first degree mean?

It refers to relationship.
4. The first heir must have absolute obligation to preserve and

transmit
5. Both heirs are alive and capacitated at the death of the

o
o
o

must also in turn make a disposition in favor of the


testator or another person?

The entire disposition is void. Take note of this. The


purpose is to prevent the whole system from being

testator
What is the tenure of the first heir?
o What is specified by the testator
o If not specified, it is the lifetime of the testator
Does the first heir have a right to alienate?
o NO. This rule is unlike the reserva troncal.

These all burdens in succession, especially since the testator has free
disposal of his property.
What are the types of conditions?
o Suspensive
o Resolutory
What are the special rules on suspensive conditions?
o An impossible condition (873) considered not imposed. The
o
o

corrupt.
When does a suspensive condition take effect?
o If both conditions exist: 1) the heir is alive when the testator
dies, 2) the heir is alive when the condition happens
What happens while waiting for the suspensive condition to
happen?
o Place the property under administration of

Conditions, terms, modes

A disposition on condition that the heir/legatee/devisee

executor/administrator
What is the difference between a term and condition?
o A term is certain, a condition is not.
What are the two types of terms?
o Suspensive term
o Resolutory term
When does an institution based on a term vest?
o A disposition with a term vests upon the death of the testator,
unlike a conditional disposition (esp. suspensive) which only
vests upon the happening of the condition. Since a term is
certain to happen, it follows the general rule in 777 that it vests

disposition is valid and becomes pure.


What about condition not to contract first marriage?

ALWAYS considered not written


What about subsequent marriages?

Generally void, unless imposed by the deceased

upon death.

So must the heir be alive when the term arrives?

No. Just when the testator dies.

So he can transfer his vested right upon his

spouse or the latters ascendants/descendants


BUT what is allowed is to impose a usufruct or some personal

prestation as long as one remains unmarried or a widow is


valid.

107

own successors.
What do you do as you wait for a suspensive term to arrive?
o Governed by 885. While you wait for the term to arrive, you
give it to the legal heirs (intestate heirs).
For resolutory terms?

After the testators death, you give it to the instituted heirs, and

when the term arrives, they turn it over to the legal heirs.
A condition suspends, but not obligates. A term obligates, but does not

inheritance or portion thereof pro indiviso

What does pro indiviso here mean?

Some commentators say they must have

suspend. A term does not delay the efficacy of the disposition, but it

places an obligation upon the instituted heir (even suspensive, since the

equal shares (like Tolentino), but this is

instituted heirs have an obligation to turn the property over to the

wrong. Theres no requirement of equality,

instituted heir when the term arrives).


What is a mode?
o You have to do something alongside the disposition.
What if the heir fails or refuses to perform the act required?
o The beneficiary can ask for the performance of the obligation.
o The legal heirs can ask for the forfeiture of the disposition.
How must a mode be stated?
o It must be a clear command, not just a request.
When is a caucion muciana needed?
o 1. In a potestative suspensive condition (879)

It is under the sole control of the heir (ex. I give X my

just as long as they have aliquot shares.

predeceases. Is there accretion?


o No. The shares are earmarked.
X gives of his estate to A, 1/3 to B, 1/6 to C. C predeceases. Is
there accretion?
o Yes, because they got aliquot shares. A and B receive Cs

will then be entitled to the property upon violation of


the condition, then X has to put up a bond the
caucion muciana).
2. Resolutory term, before the term arrives

The legal heirs have the right to enjoin disposition of

shares according to the proportion they received their shares.


In testamentary disposition, what wins out, accretion or

substitution?
o Substitution
In intestate disposition, what wins out, accretion or
representation?
o Representation, when proper
o So if the intestate decedent has three brothers (X, Y, and Z)

the property, but they have to put up a caucion


o

muciana
3. In case of a mode (882)

As security for compliance with the testators wishes

and X has X1 and X2, if X dies, representation applies. If X


has no children and X dies, accretion applies.

Accretion (1015-23)

earmarked.
2. One or more must predecease the testator, become

incapacitated, or renounce the inheritance.


X gives his BPI account to A, Citibank account to B, PNB to C. C

den. In order to guarantee that the legal heirs, who

This means even the shares can be unequal.


There is no accretion is the shares are

house and lot, as long as he doesnt use it as a drug

1. Two or more heirs, legatees, devisees, called to the same

Revocation of wills (828-834)

To which kinds of succession does it apply?


o Applies only to testamentary and intestate succession.
Requisites?

There is no such thing as an irrevocable will. It only becomes


irrevocable when the testator dies.

108

Republication and revival

What are the three ways of revoking a will, whether total or partial?
o 1. By operation of law

Legal separation (offending party is instituted as a

beneficiary in a will)
Preterition
Where the testator disposes property that is given as

legacy or devise in a will (the legacy/devise is


o

revoked)
2. Subsequent will/codicil

1. The will must comply with the requirements of wills

2. Testamentary capacity

3. Either an express revocatory clause or

835 and 836 are inconsistent with each other.


Republication/revival is giving efficacy to a will which somehow lost its
efficacy
o Ex. it has been revoked, and now you want to revive it.
If it is defective as to form?
o You have to reproduce it in the form of a valid will or codicil.
o You cannot revive it by reference.
What if it is inoperative by some other reason other than form?
o You can merely revive it by reference.

Executors and administrators (1058-1060)

incompatibility in the dispositions

4. The will must be admitted to probate


3. Physical destruction

Either by the testator personally or in the case of

What if the decedent dies with a will? With no will?


o It has to be probated, and if the will has appointed someone to

attested wills, it can be done by his agent acting under

his express direction and in his presence


Molo: There must be both a) corpus (actual
Probate

subjective
2. It must be false
3. The testator must not know of its falsity
4. It must appear in the will that the testator is

revoking because of the cause which is false


What if the revocation was unauthorized?
o If it is an attested will, it can be proved, if there are people
o

take care of the estate, then he becomes the executor.


If there is none appointed or no will, then the court appoints an
administrator.

destruction), and b) animus (intent)


What if a will is revoked based on a false cause?
o The revocation is null and void.
o What are the requisites for this situation to apply?

1. Cause must be concrete, factual, and not purely

Two aspects of validity of a will?


o Formal (Extrinsic validity)

including capacity of witnesses


o Substantive (intrinsic validity)

Ex. impairment of legitimes, preterition, capacity of


heirs, legality or possibility of conditions
What is probate?
o Mandatory proceeding to determine only the formal validity of
o
o

available who can attest to the contents of the will


If it is a holographic will, too bad if no copies survive. Theres

the will
There is no substitute for probate.
Guevarra v. Guevarra, Seangio v. Reyes, Heirs of Lasam:
All lay down the rule that probate is mandatory.

no way of probating it.

109

Probate is determinative or conclusive of the validity and due execution

of the will.
How does it become final?
o Just like any decision of court.
o Once it becomes final, it becomes res judicata it becomes

unassailable as to matters of form of the will.


o Even if the decision is wrong.
What cannot be assailed after finality of probate decree?
o 1. Testamentary capacity
o 2. That he acted freely
o 3. Followed all the requirements of the will, as to witnesses,

INTESTATE SUCCESSION

etc.
o 4. It is genuine and not forged
For probate of holographic wills, what must one remember?
o 1. You have to present the will itself (Gan v. Yap)

Except there is a photocopy that survives (Rodella v.


o

In general

Aranza)
2. If the holographic will is contested as probate, three

witnesses who can identify the will and attest to its validity must
be presented.

Is this mandatory?

The leading case of Azaola says that it is

Substantive validity?
o Time law as of time of death
o Place law of citizenship of decedent
Formal validity?
o There are always five choices:
o 1. Law of citizenship
o 2. Philippine law
o 3. Law of residence
o 4. Law of place of execution
o 5. Law of domicile

only directory
Godoy: Says that it is mandatory, although it

is criticized
When is it deemed contested?

If it is challenged as a forgery. If it is

admitted as genuine but admitted on other

grounds such as mistake, fraud, or duress, it


is not a contest under 811 and you do not
need three witnesses.
Conflicts rules

110

What is intestate succession?


o Takes place by operation of law in default of a valid will
Look at the instances in 960 where total or partial intestacy occur:
o 1. No will, void will, or ineffectual will
o 2. Does not dispose of all property (partial intestacy)
o 3. Suspensive condition did not occur, predecease, repudiation

And there is no substitution (testate)

And there is no accretion (testate/intestate)


o 4. Heir is incapacitated/unworthy
o 5. Resolutory condition happens
o 6. Resolutory term expires
o 7. Preterition
What are the principles of intestacy?
o Exclusion and concurrence, just like compulsory succession
What is the rule of relationship?
o The intestate heir must be related to the decedent
o Jus familiae (ascendant/descendant)
o Jus sanguinis (collaterals up to fifth degree)
o Jus xxx (husband and wife)
o Jus imperii (decedent and State)

Just familiae and sanguinis requires blood relationship. What is


the exception?
o Legally adopted children and legally adoptive parent
What are the limits?
o Going down, there is no limit
o Going up, there is no limit
o Collateral line, the limit is up to the fifth degree
How do you count degrees?
o For direct line, count degrees
o For collaterals, count up to the nearest ancestor

2nd brothers, sisters

3rd nephews, nieces, uncles, aunts

And so on
Rule of preference of lines?
o Direct excludes collaterals
o As a general rule, descending excludes ascending

Except: legitimate ascendants not excluded by


o
o
o

ex. legitimate direct descendant of 1 degree


excludes legitimate direct ascendant of 1

degree
2. In collateral relationships, full blood and half-blood

distinction

Siblings

Nephews and nieces

3. Representation
See the combinations in the book.
Can the adopted succeed to his biological parents?
o This is the same problem as in compulsory succession so see
the discussion above.
Combinations 2 and 4 in the book are dangerous, so take note that
here (children and illegitimate children) each legitimate child gets
double what the illegitimate children will get. What is the usual
pitfall?
o If you observe the 2:1 ratio intestacy, remember that you still

illegitimate descendants
Is there representation in the direct line?

Yes, only in the descending


Collateral nearer excludes more remote
Is there representation if the collateral line?

Nephews and nieces exclude predeceased or

have the legitimes. You might end up impairing the legitime of


the legitimate children, which cannot be impaired. The
illegitimate children can suffer impairment if there are a lot of
o

unworthy brothers/sisters of decedent


What is the nature of the spouse?
o Concurs with both direct and collateral (up to third degree)
What is the rule of proximity of degree?
o Nearer exclude the more remote
o What is the exception?

Representation (see above direct descending and

them, but never the legitimate children.


This problem doesnt apply in any other instance apart from

these two cases.


What is the successional bar?
o Art. 992. An illegitimate child has no right to inherit ab intestato
from the legitimate children and relatives of his father or
mother; nor shall such children or relatives inherit in the same

nephews/nieces only for collateral)


What is rule of equality of relatives of the same degree?
o Relatives of equal degree inherit equally
o Exceptions?

1. Preference of lines

manner from the illegitimate child.


Situations to take note of:
o In case of the concurrence of the SS and 1 LC, the SS will get
o

, and the LC gets .


SS, brothers, sisters, nephews, nieces SS gets , brothers
sisters nephews nieces get .

111

According to the rules of division.


Nephews and nieces concurring with aunts/uncles of the

What is the difference in form?


o Laxer rules in acceptance, and stricter rules in renunciation,
because it is prejudicial

There is need for judicial approval for renunciation of

decedent nephews and nieces exclude the aunts/uncles even

if they are in the same degree.


What is the difference in rules for brothers/sisters in testate and
intestate succession?
o TESTACY: Difference in the rule of brothers and sisters if they
are instituted indiscriminately, they receive equal shares
o

whether full or half blood.


INTESTACY: Take note of the 2:1 ratio [for full and half blood]

and the successional bar.


Is partial intestacy possible?
o Yes, there is a will but it doesnt dispose of the entire free

incapacitated person. For acceptance, no need.


Acceptance there can be express acceptance in writing, oral,

or there can be tacit acceptance (by doing nothing).


Renunciation you have to do it in writing or by judicial

approval.
What is the retroactivity rule?
o Acceptance as if the property passed at the moment of death
o

the property (the substitute, co-heir, or intestate heir receives it

portion.
Give an example of the difference between total and partial
intestacy.
o Full intestacy:

Legitimes to LC, to SS

Thus, to LC, to SS (entire free portion went to


o

(Art 777)
Renunciation as if the renouncer never owned or possessed

the SS)
Partial intestacy: Ex. I gave 1/8 of my estate to Ateneo.
Note that the legitimes are to LC, to SS.

to legitimate children, 1/8 to Ateneo, 3/8 to spouse

Note: the entire remaining free portion of 1/8 went to

condition happens later


What is the rule for public official establishments?
o Can neither accept nor repudiate an inheritance without the

approval of the government


When is there deemed acceptance?
o 1. Heir disposes onerously or gratuitously his right to one or
o
o

the SS.

at the moment of death)


Conditional institutions retroactivity still applies even if the

more co-heirs or stranger


2. Heir renounces it gratuitously to one or more co-heirs
3. Heir renounces it onerously to all co-heirs indiscriminately

What about a gratuitous disposition to all co-heirs

Acceptance and repudiation of the inheritance (1041-57)

Acceptance and repudiation are always free acts. A person may always

accept or reject, whether compulsory, testatamentary, intestate.


Exception: accion pauliana
o If there are creditors and the decedent does not have enough

indiscriminately?

This is a true renunciation and thus there is

no acceptance
What about a gratuitous disposition to all co-heirs
but in different portions?

Still a conveyance and is thus tacit

property to pay the creditors, the creditors can compel the heir

acceptance

to accept to the extent of the credit

112

What if an heir dies without have accepted or repudiated the

inheritance?
o The right passes on to his heirs
What if a renouncing person is both a testamentary and interstate
heir?
o
o

partially inofficious donation some to compulsory

the final recipient?

Necessary expenses full extent

Useful expenses full extent as long as

A. If he renounces the testamentary disposition he impliedly


renounces the intestate share too
B. If he renounces as intestate heir without knowledge of being

a testamentary heir, he can still accept the disposition


o N.B. this doesnt affect compulsory succession
What is the nature of acceptance/renunciation?
o Final, except:

1. Vitiated consent

2. Appearance of an unknown will

What is the effect upon death of the decedent?


o The immediate effect of death is the vesting of successional
rights. But at this point, nobody knows what part of the estate

improvement still exists


You have to collate:
o 1. Inventory

What results are his gross assets


o 2. Deduct debts

This is where the Santibanez and Hemady doctrines


come in. The estate, after all pays money debts, prior

Collation and partition

o
o

either to the donees legitime or against the disposable portion


3. Return donations inter vivos is found to be inofficious and

to the heirs receiving their shares.

What results: available assets


3. Add the value of donations inter vivos

Net hereditary estate results.

What are not included?

Support, education, medical attendance,


customary gifts, etc. (since these are

goes to whom.
o The heirs co-own the mass of properties.
What are the three ways by which collation is understood?
o 1. Computation simple accounting process where value of
donation inter vivos is added to the available assets
2. Imputation donations inter vivos by decedent are charged

heir and some to donee)


For return, what expenses must be reimbursed by

impractical to calculate)
What about expenses for professional,
vocational, or other career expenses of
the child, as given by the parents?
o Charged against the free portion,

the inofficious value is actually returned to the estate to satisfy

legitimes

N.B. if property is to be returned, following Art. 777,

unless:

1. Provided otherwise

2. Inofficious
If imputable (the two above), deduct
what the parents would have spent
on the child had he stayed home

the fruits will pertain to the proper person (ex. entirely

and loafed

inofficious donation fruits go to compulsory heir;

113

What is the measure of the value of the property

the dispositions?
o Reduce testamentary dispositions
o First to be reduced are the non preferred testamentary

donated?

Value when the donation was made, since


this was when it was perfected. Any
subsequent increase inures to the benefit of

the donee.
What if the recipients of the donations are the

have received as donations inter vivos.


Exceptions?
o 1. Donor provides otherwise
o 2. The donee renounces the

inheritance, because he gives up

the status as compulsory heir


What if the donation to the compulsory
heir exceeds his legitime?
o The excess is taken out of the free

portion
What if the recipients of the donations are

strangers?

You impute it against the free portion.


What if the free portion can accommodate all

those donations?

You take it all out from there


What is the special rule for grandchildren

heirs considered strangers


How do you reduce?

NOT pro rata but in reverse order. The latest donation

gets reduced first.


Afterwards, the heirs can agree on a partition or go to settlement
proceedings. Partition here is the physical division of the estate.
How is partition done?
o 1. Extrajudicial agreement by the heirs or
o 2. Judicial order in settlement proceedings
What are the kinds of partition?
o 1. Actual physical division of the thing
o 2. Constructive any act other than physical division that
terminates the co-ownership (e.g. sale to third person)
What are the characteristics of partition made by the decedent
himself?
o 1. It only takes effect upon death
o 2. It is revocable as long as he is still alive
o How can the decedent/causante make partition?

1. Will

2. Act inter vivos

Must be in writing and in public document

It must be accompanied by a prior will

inheriting by representation, concurrently with


their uncles/aunts and other grandchildren?

Compute both: a) what their parents would


have been obliged to collate and b) whatever

dispositions
After reducing them to zero, what if the legitimes are still
impaired?
o Reduce the donations to strangers or donations to compulsory

compulsory heirs?

You impute against their legitimes what they

If he died with a will and the free portion cannot accommodate all

because disposal of property mortis causa

they themselves are obliged to collate.


Does collation mean you have to physically obtain the assets?
o No. Collating means a purely mathematical computation.

can only be done through a will


N.B. unless the partition through act inter
vivos conforms strictly to intestate

114

succession portions, so it does not make a


o

disposition
What is partition to keep an enterprise intact?

A parent can keep an enterprise intact by covering for

his compulsory heirs legitimes through cash or other

property
Who can the decedent designate as a mandatary?
o One who is not a co-heir can be chosen. He is designated to

make the partition after death.


What is the nature of the right to demand partition?
o Generally, it is a mater of right, so any co-heir may demand
o

partition at any time.


Exception:

A. Partition forbidden by testator for period not

one entitled to the warranty


3. Co-heirs warrant solvency of debtor of the estate whose
credit is assigned to a co-heir

But they only warrant against insolvency during

of partnership
2. Court finds compelling reasons

partition and not subsequent insolvency

Period: 5 years from partition


When is there no mutual warranty?

1. Partition by the testator himself, except when the

for partition
B. Co-heirs agree on indivision for period not

legitime has been impaired


2. Agreement among co-heirs to suppress the

exceeding 10 years, renewable for like periods


What about heirs upon whom some suspensive condition

warranty
3. Supervening events causing loss or diminution in

has been imposed?

Cannot demand partition since he has no rights yet.

But the other co-heirs can demand partition but must

issue a security to protect the inchoate right of the

some say that it can be replaced by actual knowledge.


Effects of partition:
o 1. Absolute ownership over share
o 2. Each co-heir warrants the share of the others

Period: within 10 years from date of right to action

What is the liability for co-warranty?

Proportional liability of co-heirs

If one of the obligors is insolvent, his portion


are borne proportionally by all, including the

exceeding 20 years

Exceptions to this exception:


o 1. Any of the causes for dissolution

N.B. some decisions say written notice is mandatory, while

conditional heir.
What if an heir sells his undivided share prior to partition to a

value

4. Fault of the co-heir

5. Waiver
What are the causes to annul or rescind a partition?
o Same as causes for voidable and rescissible contracts
o N.B. the special provision on lesion in partition, however,
provides that it must be at least rather than the usual more

stranger?
o The other heirs may exercise right to redemption within one

than value.
When is the partition not subject to rescission due to
lesion?

When it was the testator who made the partition

month from written notice of the sale and prior to partition.

himself, except:

115

1. Impairment of the legitime, even if the

Before: you enter into a K and the creditor can pursue all your

lesion was less than


2. Mistake by the testator or vitiation of his

properties to exact fulfillment of the obligation


Now: In the interest of social justice, there are many things that

intent
What are the options of the co-heir who is sued for

the creditor cannot levy upon, although the principle is still


good the creditor csan pursue the property of the debtor to

rescission?

1. Have a re-partition

2. Indemnify the co-heir the amount of lesion suffered

OBLIGATIONS

Trends in Obligations and Contracts:

minds, in general, there is a K.


2. The principle of autonomy of will, which is still the general rule in K
law, has been restricted.
o There are prohibited obligations from being entered into
o Art. 1306 Contracting parties may establish clauses and

order, good customs, or public policy


There are five categories of restrictions. They restrict

freedom but promote the greater good.


Ex. labor contract with consideration less than the

minimum wage.
Ex. Those that violate environmental considerations,

responsible. Ex. if you are guilty of driving recklessly.


Ex. employer can be responsible for employees wages if not

paid
5. Unity in modern legislation
o This is especially important in global commerce
o Ex. Bills of Lading, Trust Receipts, Intellectual Property, etc.

Essential requisites of obligations

terms as they may deem convenient

Provided they are not contrary to law, morals, public

attachment, for instance:

1. The Family Home

2. What you receive from support

Etc.
4. Weakening of the principle that liability results from responsibility
o In general, under the law, you are only liable if you are
o

1. Obligations have been progressively spiritualized


o There is very little requirement as to form. Upon meeting of the

exact fulfillment of the obligation


In the Rules of Court, there is a list of properties exempt from

social justice, gender issues, etc.


3. Mitigation of the principle that the debtor must answer with all his

What are the requisites of obligations?


o Four generally accepted requisites:
o 1. Active subject

A.K.A. Creditor (to give) or obligee (to do)

Has right to demand that the obligation be performed


o 2. Passive subject

A.K.A. Debtor or obligor

Has to perform the obligation (reciprocal obligations)

Note: In a sale of a thing, both parties are


debtors and creditors of each other, with
correlative obligations (as to the thing; and

property

as to the money)

116

o 3. Object
o 4. Vinculum juris
For both the active and passive subject, what is required?
o They must be determined or determinable.
What are the types of determined/determinable subjects?
o 1. Obligations where subjects are completely and absolutely

the obligation of sale is the act of delivering to X the ownership


o
o

determined at the birth of the obligation

Most common type


2. One of the parties is determined, but one is determinable
with a previously-established criterion

Ex. Negotiable instrument: I promise to pay X or

is determinable, because X can negotiate it. The


instrument lays down the criterion.
3. Subject/s is/are determined in accordance with their relation

to a thing. (Real contracts)

The subject/s may change at the thing passes from


one person to another.
Ex. X borrowed 3M from Y, and placed his house and

mortgage, which is registered. X sold his house and


lot to Z, who registered the property in her name. The
mortgage in favor of Y is still annotated. X doesnt
pay by the due date. Y sought to foreclose the
mortgage, and Z cannot deny the mortgage, because

Z is the mortgagor now.


What is the object of the obligation?
o Its the prestation. It consists of conduct or an activity to be
o

because the object of the prestation is illicit.


2. Possible

Cannot deliver Mount Apo


3. Determinate or determinable

Cannot enter into a K with no defined

prestation

4. With pecuniary value


What is the vinculum juris?
o The compulsive element; the obligatory element in an
o
o

lot as security. There is a K of loan and a K of

NCC.
What are the requisites for the prestation?

1. Licit

Cannot enter into contract of sale for shabu,

One of the parties (i.e., me) is determined. The other

the car (tradition). The car is the object of the prestation.


This distinction is, not, however always observed even by the

order the amount of P5000, on November 15, 2011.

Ex. Y has to deliver a car to X on Feb 15, 2011. The object of

obligation. It makes an obligation an obligation.


This is why an obligation dependent solely on ones will is void.
Ex. X tells Y, I will sell my car to you when I feel like it. Here,

there is no obligatory force.


Yu v. Asuncion: Enumerated requisites of an obligation.
o 1. Vinculum juris, the efficient cause of the obligation
o 2. The object (prestation/conduct to be observed)
o 3. Subject persons, the active and passive subject

Combined #s 1 and 2 into one.


What is the fifth element, according to Castan?
o The causa. It is the why of the contract.
o Ex. Why is Y bound to deliver the car to X? Because X will
deliver P400000 to Y. Why is X bound to give P400000 to X?

performed by the debtor or obligor.


Its not the physical thing to be delivered in an obligation to

give. That is merely the object of the prestation.


o

117

Because Y will deliver the car to X.


What is the causa for a gratuitous contract?

Liberality.
What is the causa for a quasi-delict?

Causing an injury to the other.


What is the sixth requisite?
o The form. But it does not refer to a specific form, like putting it

person who by public notice advertises an award in exchange


for a particular result is bound to grant this award.

Ex. Proctor and Gamble announces on TV: For 30

in writing. It refers to the outward or external manifestation of

wrappers of Tide, you get a glass imported from

the obligation.

Switzerland. Offer good until Feb 28, 2011 only! X


saw this advertisement, and on Feb 27, 2011,

Sources of obligations

presents 30 wrappers to the P&G office. Issue: is


there an obligation here? Held: yes. There is a public

Art 1157 Obligations arise from:


o 1. Law
o 2. Contracts
o 3. Quasi-contracts
o 4. Crimes
o 5. Quasi-delicts
Arts. 1158-62 regulate these five sources
Is this list exclusive?
o Sagrada Orden v. NACOCO: The Japanese during the war

advertised that whoever returns his papers will get a

seized the Sagrada Ordens property during the war. Upon

P20000 reward. There is a public offer here.


Some commentators say there are only two sources: law and contract.
Some say: laws and acts of persons (whether voluntary or involuntary).
What is the nature of a contract as a source of obligation?
o What the contracting parties establish has the force of law
between them, and must be complied with in GF. They are free

liberation, the US seized enemy property, which included

to enter into any contract, provided the stipulations do not

Sagradas property. The US entered into a custodianship


agreement with NACOCO. Sagrada Orden wanted to collect

rentals from NACOCO. Issue: is there an obligation to pay

violate Art. 1306. In general, there is no specific form needed.


How must compliance be done?

1. It must be complied with according to its terms (ius

rentals to Sagrada? HELD: No obligation to pay rentals. The


court, to arrive at this answer, the court looked at the five

sources of obligations there was no contract, quasi-delict, no

provision of law that requires payment of rental, crime, or

civile pacta sunt servanda)


2. And according to good faith (ius gentium bona

fide).
What is the general rule for obligations arising from delicts
(crimes)?
o If you commit a crime, you are liable both criminally and civilly,

quasi-contract. The implication the court forwarded is that this

offer here.
Ex. X left his important papers inside a cab. X

is a closed list.
But is it, really? Or should it, really?
o Many commentators believe it is not exclusive.
What are the other obligations?
o Public offer is a sixth source of obligation, for instance

except if there is no private offended party.


Distinguish a quasi-delict from a contractual obligation:
o Quasi-delict only arises when there is a violation. The breach
o

(auslobung in the German code or the unaccepted offer). A

itself gives rise to the obligation.


In contractual obligations, the obligation precedes breach and
is not dependent on one in order to exist.

118

Are quasi-delicts and contracts mutually exclusive?


o No.
o They can co-exist separately.

Ex. a bus and car collided, and a bus passenger

damage, there is no question he can sue under contract. But can


he also sue under quasi-delict?
o There is an old line of SC decisions in this country which says
that you cannot sue under quasi-delict if there is a contract.

suffered injuries. The cars driver was a minor and

There is some basis for this, because Art. 2176 says that the

incompetent driver. The passenger sued them all.

act or omission must occur when there is no pre-existing

The liability of the owner of the bus and bus driver


rests on contract. The fathers responsibility for his
o

childs act is based on quasi-delict.


They can also overlap.

Ex. A bus driver drives recklessly and the bus hits a

circle of contract is always within the bigger circle of quasidelict). So if you sue under quasi-delict, you are disregarding

tree. A passenger is injured and sues. The bus driver

is liable based on quasi-delict or crime (criminal

itself constitute the source of a quasi-delictual liability had there

contract of carriage or quasi-delict (negligence is


selection and supervision of driver).
You are driving a car. Your car gets into an accident with a bus.

Who do you sue? What are your options?


o 1. Bus driver
o 2. Bus company
o 3. Sue both because theyre joint tortfeasors, and thus

solidarily liable
Do you have to prove negligence when you sue under quasi-delict?
o Yes, you have to prove negligence of the bus driver. It is not

presumed.
Do you also have to prove the negligence of the bus company?
o Yes, in the selection and supervision of the bus driver. (Culpa
o

the contract between the parties. This is valid.


You can sue under quasi-delict if it is the tort breaches the
contract. If an act that constitutes breach of contract would in

negligence). The bus company is liable based on

contractual relation between the parties.


There is, however, the theory of concentric circles (the smaller

been no contract, then there is breach of contract through tort.


o So you can choose to sue under quasi-delict or contract.
Theory of vicarious liability:
o If you sue under quasi-delict and you choose to sue the
company and not the employee, you are really suing under Art.
o

2180.
This is actually a wrong term because vicarious means you are

answering for the liability of someone else.


But the theory under 2180 is that the company/employer itself
is negligent as well.

Nature and effect of obligations

in eligiendo, culpa in vigilando)


This is a rebuttable/disputable presumption.

As opposed to conclusive and quasi-conclusive

presumptions
In a situation where damage or injury is caused to a party, and
there is a contract between him and the person who caused the

119

What are the kinds of prestations?


o 1. To give

To give a determinate thing

To give a generic thing


o 2. To do
o 3. To not do

What is the primary obligation in giving a determinate thing? The

accessory obligations?
o Primary obligations give what must be given
o Accessory obligations:

1. After constitution of obligation and before delivery:

performance
Rules on improvement, deterioration, and loss
o When do these rules apply requisites?

1. Obligation has suspensive condition (1189),

take care of the thing with diligence of GFF

Except when law or stipulation requires

Either exclusively or in addition to specific

another standard
If the thing is damaged, debtor is liable for

damages
2. Account and deliver to creditor the fruits of the thing

from the time of obligation to deliver

What is the nature of the right of the


creditor?
o Before delivery, merely personal
o Upon delivery, real
o A sold B a mango orchard to be

delivered Jan 1. A did not deliver


on Jan 1, and instead sold fruits
to C, a buyer in GF. B sued for
specific performance and won.

Can B recover the fruits?

As against A, yes.

But as against C, no
because Bs right is merely
personal, not real. He can

resolutory condition (1190), or a term (1194)


2. Obligor is obligated to deliver a determinate thing
3. There is improvement, loss, or deterioration before

the fulfillment of the condition or arrival of the period

4. The condition is fulfilled or period arrives


What are the rules on loss?

Without fault of debtor:

Extinguish obligation

With fault of debtor:

Pay damages
What are the rules on deterioration?

Without fault of debtor:

Creditor must accept the thing (bear loss)

With fault of debtor, either:

1. Resolution and damages

2. Fulfill obligation and damages


What are the rules on improvement?

Improved by time or nature:

Creditor benefits

Improved by debtors expense:

Same rights as a usufructuary


o (579) he can remove improvements
if no damage is caused to the

sue A for the fruits value.

3. To deliver accessories
What are the creditors remedies for an obligation to give a

property
(580) he may set-off the
improvements he made against any

determinate thing?
o 1. Specific performance
o 2. Equivalent performance damages

damage to the same


What are the creditors remedies if the obligation is to give a
generic thing?

120

1. Specific performance
2. Substitute performance

Done by someone else at the debtors expense


o 3. Equivalent performance

Damages, by itself

Damages in addition to #1 and #2


What are the creditors remedies if the obligation is to do?
o Something only the obligor can do (personal):

Equivalent performance (damages)


o Anyone else can do it:

1. Substitute performance

2. Equivalent performance
What are the creditors remedies if the obligation is not to do?
o 1. Substitute performance
o 2. Equivalent performance

Exclusive or in addition

I. Culpable (1170)

1. Malice (fraud)

2. Negligence

3. Delay
o II. Non-culpable

Fortuitous event/force majeure


MALICE (FRAUD):
o Responsibility arising from fraud is demandable in all

o
o

SPECIFIC

EQUIVALENT

SUBSTITUTE

PERFORMANC

PERFORMANC

PERFORMANC

o
o

Yes

Yes

No

thing
Determinable

Yes

Yes

Yes

(through insidious words or machinations without


which the other party would not be induced to enter
o

thing
To do

into the contract).


Is there a difference in effect?

Yes.

Deceit makes the obligation annullable, because it

Very personal
Not very

No
No

Yes
Yes

No
Yes

personal
Not to do

No

Yes

Yes

preceded the obligation.


Malice only succeeds the obligation. The creditor may
insist on performance (specific or substitute),

resolution, and in either case, damages.


What are the effects of malice?

1. Creditor may insist on specific/substitute

NEGLIGENCE:

Irregularity in performance

evasion of the normal fulfillment of an obligation.)


Differentiate this from the other kind of fraud mentioned in
Obligations and Contracts (1338).

Deceit. This refers to vitiation of consent by a party

To give
Determinate

obligations. Any waiver of an action for future fraud is void.


What about waiver of malice already committed?

This can be waived.


What is another word for fraud?

Malice (This means it is intentional or deliberate

What are the types of irregularity of performance?

121

performance, whichever applies


2. Resolution [for reciprocal obligations]
3. Damages, either way

Always refers to the omission of something that should be there

required degree of diligence. This differs depending on


o

attendant circumstances.
What are the kinds of negligence?

Simple

Gross/wanton if it is so reckless, that it practically

amounts to malice, and is treated as such


What is the default standard of diligence required?

The fictional standard of a good father of a family.

Non-performance with respect to time, whereas

malice and negligence are with respect to quality.


What are the requisites?

1. Obligation is liquidated and demandable

2. Debtor delays in the performance due to dolo or

culpa (thus, w/o justifiable reason)


3. The creditor requires performance, judicially or
extra-judicially (demand)

General rule: demand is required prior to

(In common law, they refer to it as diligence of a


o

mora solvendi applying (this requirement is

prudent businessman.)
Is waiver of future negligence allowed?

Accepted view: waiver of future gross negligence is

called mora solvendi ex persona. If demand


is not required mora solvendi ex re).
o N.B. Jurado defines these

not allowed, because its tantamount to malice

Waiver of future simple negligence is allowed


Effects of negligence?

1. Creditor may insist on specific/substitute

differently his ex persona is delay


in obligation to do, and his ex re is

performance, whichever applies

2. Resolution [for reciprocal obligations]

3. Damages, either way


DELAY/DEFAULT (MORA)
o What are the three kinds of mora?

1. Solvendi

Delay in performance

This applies here, in this provision

2. Accipiendi

Delay of creditor in accepting performance.

This applies in payment/performance

delay is obligation to give


When is demand not required?
o 1. The obligation/law expressly so
declares.

It is not enough that the


contract states specific
dates. Mere setting of
date is not enough. Need
o

to demand still.
2. Time is of the essence.

Look at intent of the


parties and attendant

(particularly, consignation).
3. Compensatio morae

Reciprocal delay. (Taken alongside mora

solvendi)
What is mora solvendi?

circumstances.
o 3. Demand is useless
N.B. under the law on partnership, a promise
to make contributions on a particular date,
and then failing to do so, would make the

122

person a debtor of the partnership and is


o
o

liable for interest and damages


Can you have mora solvendi in negative obligations?

You cannot have mora in negative obligations


What are the effects of mora solvendi?

Obligations to deliver a determinate thing: place the

risk on the debtor

Liable for damages

Basic remedy: performance or resolution


The provision also mentions contravene the tenor of the

Other provisions

o
o

avoid
3. Impossible for the debtor to fulfill his obligation in

the normal manner


4. Obligor must be free from participation in the

paid
o N.B. these are rebuttable presumptions
What are the four types by which creditors can satisfy their
claims?
o 1. Levy and execution on debtors non-exempt property
o 2. Accion subrogatoria

Creditor sues on behalf of his debtor, against his

obligation, delay by the other begins


FORCE MAJEURE
o What are the requisites of casa fortuito?

1. The cause was unforeseen and unexpected and

presume the interest has been paid


2. If later installment has been received without reservation re:
prior installments presume the prior installments have been

above.
What is compensatio morae?
o If both sides are in delay, these cancel out.
o But when one party complies or is ready to comply with his

was independent of human will


2. Impossible to foresee, or if foreseen, impossible to

What are the presumptions re: interest and debt?


o 1. If principal has been received without reservation re: interest
o

violations. But actually nothing will get through the three

assumption of risk
o Ex. insurance
Are defective brakes, blown tires, and other similar
problems fortuitous events?

Our SC is consistent in denying such claim.

obligation. What is this?


o Just as all-around term that encapsulates all the culpable

3. Nature of the obligation requires

debtors debtor
Requisites?

1. Creditor has credit against the debtor

2. Credit is due and demandable

3. Failure of debtor to collect his own credit


from a third person (through malice or

aggravation of the injury to the creditor


If any of the four is not present, there is no fortuitous event
If there is a fortuitous event, what is the effect?

As a general rule, the debtor is free from liability

What are the exceptions?

1. If the parties agree

2. If the law so declares (ex. in delay)

negligence)
4. Insufficiency of assets of debtor to satisfy

creditors credit

5. Right is not intuit personae


3. Accion pauliana

Right of creditors to rescind alienations by their


debtors to defraud them

123

Requisites?

1. There is credit in favor of plaintiff

2. Debtor performed an act subsequent to

the contract giving advantage to other

persons

3. Creditor is prejudiced by the debtors act

4. Creditor has no other legal remedy

5. Debtors acts are fraudulent


4. Accion directa

Direct action by the creditor against his debtors

o
o

independent contractor)
3. Principal against subagent (skip agent)
4. Vendor-a-retro against transferee of
vendee (skip vendee)

Types of obligations

sole will of the creditor?


o Ex. I will sell you my car when you feel like it.
o Its VALID. In fact, it becomes pure.
Obligation that depends on an impossible or illegal suspensive condition
o What is contemplated by this provision, original or
supervening impossibility?

ORIGINAL impossibility.

The supervening impossibility does not annul the

debtor the creditor acts in his own name


Exception to relativity of contracts
Give examples:

1. Lessor against sublessee (skip lessee)

2. Laborer against principal (skip

o Ex. I will sell you my car when I feel like it.


o Because there is no juridical tie here.
What if its a suspensive, potestative condition dependent on the

Classes of obligations?
o Pure
o Conditional

Happening gives birth/death to the obligation


o With a term

Happening makes it demandable


What is a potestative condition?
o Something that depends solely on one of the parties
What is casual?
o Depends solely on chance or a third partys will.
What condition will make obligation void?
o Suspensive, potestative, and is dependent on the sole will of

the debtor the obligation is void.

124

obligation; it just extinguishes it.


A positive obligation to do an impossible thing:

Both the condition and obligation are void.


Negative obligation not to do an impossible thing:

Condition is disregarded. The obligation is valid.

Ex. X sells Y his house and lot on condition that Y


does not transfer the house and lot to California.
Negative condition not to do an illegal thing:

Both the condition and obligation are valid.

Ex. X sells Y his house and lot on condition that Y

does not turn the house into a shabu den.


Obligations with supensive conditions:
o That X will happen by a certain time

Extinguished when time passes

Or indubitable that it will happen


o That X will not happen by a certain time

Take effect when time passes

Or indubitable that it will not happen


What are the requisites of constructive compliance/fulfillment?
o 1. Intent of the obligor to prevent fulfillment of the obligation
o 2. Actual prevention
o What is the effect?

The condition is deemed complied with.


o To which does constructive compliance apply?

Only to potestative conditions or mixed conditions with

potestative conditions.
Ex. X sells Y a lot, if Y builds a road from the lot to the

happening of the condition: not covered by the rule on

highway. The only road Y can build must go through

Xs property, but X refuses to allow.


X sells Y a piece of land in year 2000, subject to the condition that

Y pass the Bar examinations. Y passes the Bar in 2005. What is

the effect?
o The condition is deemed to have arisen in year 2000.
o But not fruits.

X sold the land to Z in 2001, when the condition had


not yet happened. Y sold the land to W in 2002. Ys
sale wins out because the sale of X to Y retroacted to
o

If it would cause damage, no compensation


Rule on fruits:
o Those produced from the constitution of the obligation to the

2000.
What is the right of the creditor in the mean time?

The creditor can take any action that protects his

rights.

Ex. He can put an adverse annotation on the title.


When can the debtor recover due to payment by mistake?
o 1. Performance by mistake
o 2. Action for recovery is brought before condition happened or

retroactivity
Resolution in 1191 what is the effect?
o Mutual restitution. They are returned to status quo ante.
1191
o Compare rescission and resolution:

Resolution primary remedy

Rescission subsidiary

There must be no other remedy

It has to be a last recourse


o Compare the basis:

Resolution non-fulfillment of obligation

Rescission based on economic prejudice (lesion)


o Resolution can be extrajudicial or judicial. Either is valid, but
extrajudicial resolution is always subject to court checks and
o

balance, so its at the risk of the party who resolves.


Is an express provision allowing extra-judicial resolution
mandatory?

No. Parties can resolve even without an express

its apparent the condition will not happen


What are the rules re: deterioration and improvement and loss

before the happening of the suspensive condition?


o 1. Fortuitous loss obligation is extinguished
o 2. Culpable loss debtor liable for damages
o 3. Fortuitous deterioration borne by creditor
o 4. Culpable deterioration creditor chooses:

A) rescission with damages

B) fulfillment with damages


o 5. Fortuitous improvement benefit to the creditor
o 6. Intentional improvement governed by Art. 579 of the

provision allowing so.


Outline of 1191 (resolution):
o 1. Only applies to reciprocal obligations

Elements:

1. 2 prestations arising from same source

2. Each prestation designed to be the

o
o

counterpart or equivalent of the other

Ex. Contract of sale


2. There is a tacit resolutory condition: breach
3. The party seeking to rescind must be ready to comply with
the obligation, otherwise he is in BF

usufruct

Can take it out if it does not lead to damage

125

4. The injured party can elect resolution even without court

2. The obligation is a loan where the debtor is bound to pay

action
5. Effect: mutual restitution

What if the other party does not want to return

o
o

interest
3. When the period is exclusively for the benefit of the creditor
4. When the debtor, aware that the period has not yet arrived,

what you have given him, after resolution?

Go to the court to recover. The action is not

for resolution, but recovery, because

resolution does not need court action.


Obligations with a term/period what is the difference from a
condition?
o Term is certain, condition is uncertain. They are alike in the

sense that theyre both future.


o Only demandable when the day arrives.
In case of loss, deterioration, or improvement before the day

certain, what do you follow?


o Follow the same rules as in suspensive conditions.
Anything paid before the day arrives
o If made consciously, what is the implication?

Nothing can be recovered, because the term was


o

insist on pre-payment
If it is for the benefit of the debtor:

I promise to pay you on or before March 2011 this

is for the benefit of the debtor.

This is an example of a term benefit for the debtor


When can the court fix the duration of the period?
o 1. If it does not fix a period but a term is assumed to have
o
o

effectively waived.
What if it was made out of mistake?

Old code: only fruits and interests can be recovered

Now: The thing and the fruits and interests can be

been intended
2. If the period entirely depends upon the will of the debtor
Two requisites for the application of this article?

1. Parties did not fix the period but from the nature of
the circumstances, it can be inferred that the period
was intended by them

OR there was a period, but it was made

recovered.
Who is entitled to the fruits received from the constitution of the

dependent on the will of the debtor


2. The court must decide what period the parties
probably intended. The court cannot decide for itself,

obligation until the arrival of the term?


o One view: fruits belong to the debtor
o Other view: fruits belong to the creditor, even if they should not

pays anyway
When is a term for the benefit of the debtor? For the creditor?
o Presumption: a term is beneficial for both
o What is the consequence of this?

The creditor cannot demand, and the debtor cannot

be delivered til the term arrives


o RFBs view: The debtor keeps the fruits in the interim.
What are the instances when the fruits cannot be recovered

it must infer the parties intent


Action for 1197 can only be for the fixing of the period. It
cannot be for fixing of the period and specific performance at
the same time, because the period is presumed not to have

notwithstanding premature delivery?


o 1. When the obligation is reciprocal and there is pre-payment

arrived yet.
Exception: if a separate action for performance would be only
dilatory (i.e. whatever the period was, it already has passed)

on both sides (so both things are fruit producing)

126

When can the court fix the period for an obligation?


o 1. 1197, par. 1 (above): Parties did not fix the period but from
the nature of the circumstances, it can be inferred they
intended a period

Exceptions:

A. 1682, 1687 these are leases payable

o
o

of the month/year (the K fixed the period)


B. Pacto de retro under 1606 the law fixes

the period of redemption for four years


C. Contracts of service for indefinite period

promised
3. By his own acts, he impaired said guarantees/securities, and

with securities just as good.


4. He violates undertaking in consideration of which the

o
o

creditor agreed to a period.


5. He attempts to abscond.
6. Article 2109 Creditor is deceived as to the substance or
quality of the thing

(involuntary servitude)
2. 1197, par. 2 (above): Period entirely depends on the will of
the debtor
3. 1191, par. 3

This is resolution instead of decreeing the

resolution, the court decides to fix a period instead


o

2. He does not furnish to the creditor the guarantees/securities

by fortuitous event, they are lost. UNLESS he replaces them

monthly or yearly; these terminate at the end

4. 1687

Contracts of lease falling under the 2nd-4th sentences


5. 1180

If the debtor binds himself to pay when his means

Classification according to number of prestations.


o Conjunctions 2 or more prestations, all of which must be
performed. No special rules apply here.
o Alternative 1199-1205
o Facultative 1206
What is an alternative obligation?
o Two or more obligations are agreed upon but one, some, or not
o

allow him to do so

Deemed to be one with a term


Supposing the court fixes a period, can the parties agree to extend

it further?
o Yes, it is contractual freedom. It is a novation there has to be

an agreement between the parties, however.


When does the debtor lose right to avail of the period? these

all have to be performed.


Who has the choice?

Depending on whom the parties name as having to


make that choice.

If there is no choice, the debtor chooses.


How must a choice be made?

Any form writing, oral, or implied/passive


Why must a choice be communicated?

If it depends on the creditor, duh, because the debtor

obligations become pure


o 1. After the obligation have been contracted, he becomes

is not a mind reader.


Ong: But even if it depends on the debtor, it gives the
creditor the chance to consent to or impugn the
choice. RFB does not agree with this, because the

insolvent, unless he gives security/guarantee for the debt

This is not limited to judicial insolvency

creditor has no right to impugn because the debtor is

127

acting within his right.


What is the real reason?

1. To give the creditor the chance to prepare

for acceptance.
2. Because once the choice is

fortuitous event?

The debtor has no choice but to perform it


What if is limitation of choice left due to the

fault?

Creditor entitled to damages


If some of the things are lost due to the debtors

the right to substitution.


What is the difference from alternative obligation?

If one or some of the obligations are impossible or


illegal, then there can still be performance of the

fault?

Can perform what remains


3. All lost

If all are lost due to fortuitous event?

Obligation is extinguished

If all but one are lost due to fortuitous event, and

damages
If all lost due to fortuitous event?

Obligation extinguished

If all lost due to creditors fault?

Obligation extinguished
What is a facultative obligation?
o There is only one obligation agreed upon, but the debtor has

creditors acts?

Right to resolution, with damages.


2. Own fault

If all of the things are lost due to the debtors

obligation ceases to be alternative


Implications when debtor has right of choice?
o 1. Limitation of choice

What if there is one choice left due to the

them or value of one of them + damages


If some are lost due to creditors fault?

Creditor can choose from remainder


2. All lost

If all are lost due to debtors fault?

Creditor can choose value of any of them +

communicated, it is irrevocable and the

Creditor can ask for performance of any of

o
o

others.
In facultative, if the principal obligation is impossible

or illegal, then the obligation is extinguished


Who has the right to substitution?

Always the debtor.


What if through the debtors fault, the principal prestation
is lost? Can you compel him to perform the substitute

the last one lost due to debtors fault?

Creditor can demand damages.


If all but one are lost due to debtors fault, and the

obligation?

No. You cannot compel substitution it always

last one lost due to fortuitous event?

Obligation is extinguished
Implications when creditor has right of choice?
o 1. Some lost

If some lost due to fortuitous event?

Perform what remains

If some are lost due to debtors fault?

belongs to the debtor as a choice. But you can ask


o

for damages.
What if the substitute prestation is lost due to the debtors
fault, and then before the due date, the main prestation is
lost due to fortuitous event?

You cannot, unless there is abuse of right. Because


even if the substitute prestation has not been lost, loss

128

of the main prostation due to fortuitous event will


extinguish the obligation anyway.

What is a joint obligation? (or mancomunada or pro rata)


o The debtors are liable only for a proportionate part of the debt
o Or the creditors are entitled only for a proportionate part of the

o 2. When parties stipulate


o 3. When the nature of the obligation demands solidarity
What is the effect of demand by any of the solidary creditors?
o The debtor may pay any of the creditors, but if any demand,
judicial or extrajudicial, is made on him, he must pay only the

debt
What is a solitary obligation? (or joint and several, in solidum, or

solidaria)
o Debtors can be held liable for the entire part of the debt
o Or the creditors can demand the entire part of the debt
o What does individually and jointly mean?

Solidary
o Where there are several debtors and the obligation

on it, the rest cannot demand anymore. The debtor


o

minus the share of the creditor whom he paid. In


effect, the debtor pays a little less than twice the

signed by several people, what does this mean?

Solidary
What is the essential nature of jointness?
o Active joint (many creditors, one debtor) You have as many

what is not his. So its not complete agency because he keeps

amount minus the share of the creditor whom he had paid.


What if there are multiple creditors (A B C) and debtors (X
Y Z), and A demanded Z. Can B demand X?

Yes, and X can pay B. As demand on Z is moot and

if there are multiple creditors, and one collects, he must deliver

amount
Commentary: if the debtor paid the share of the wrong creditor,
this is fine. The demanding creditor can still recover the whole

obligations as creditors multiplied by debtors


o Passive joint (many debtors, one creditor)
o Mixed joint (many debtors, many creditors)
What is the essential nature of solidarity?
o Active There is mutual agency, up to a certain point (because

will get off scot-free.


What if the debtor paid the wrong creditor (non-demanding
creditor)? Can the demanding creditor still demand?

He can only recover the amount the whole obligation

mentions a singular (I or notice to me) and then

one demanding payment


What is the problem here?

If one of the creditors demands, but fails to follow up

some for himself)


Passive There is mutual guarantee among the multiple

academic.
What is the conflict between 1212 and 1215?
o According to 1212, in the case of active solidarity, the solidary
o

creditors can do what is beneficial but not prejudicial


Whereas in 1215, the creditor can perform acts like remission,
novation, compensation, or confusion and this extinguishes the

debtors, as to the single creditor


o Mixed solidary
What is the presumption?
o In favor of joint obligations.
When is there soldarity?
o 1. When the law so states (ex. joint tortfeasors)

debt
Ex. (A B and C) are soldiary creditors, X is the debtor. Can
B remit Xs debt?

1212 disallows this because Bs remission is


prejudicial to A and C.

129

1215 seems to allow it.


How do you reconcile these?

The remission was a true remission. The debt is

extinguished. But B will be liable for A and C for their

shares.
A remits one of the solidary debtors shares.
o Can A go against one of the other debtors for the

remaining amount?

Yes.
Can A go against the debtor whose share he remitted for

anyway.
One of the other solidary debtors becomes insolvent. Will
the debtor whose share was remitted share in covering for
the insolvent debtors share?

Yes. The remission only extended to that debtors


original shares, and not to that insolvent debtors

shares which has to be covered for now.


What defenses are available to a solidary co-debtor?
o 1. From nature of obligation
o 2. Personal to him
o 3. Personal to a co-debtor
What is the effect of each of these defenses?
o Nature of the obligation total defense (ex. the obligation is
o

void because the prestation is illegal)


Person to him partial (ex. there is a special term or condition

as to him)
Person as to a co-debtor partial (ex. when the co-debtor

divisible that the obligation is also divisible


What is the general rule?
o Obligations are indivisible, as a general rule because the law
says so
When are obligations divisible?
o 1. Parties provide so
o 2. Nature of the obligation necessarily entails performance in
o

the remaining amount?

Yes, because that debtor can recover from the rest

It does not follow that because the object of the prestation is

parts (Ex. 1225, par. 2 first clause)


3. The law provides otherwise

See these in payment or performance under the

topic of indivisibility of payment


Obligations with a penal clause:
o This is especially common in construction projects
o Sometimes there is an incentive too
o What is the nature of the punishment?

Civil punishment. Usually a penalty or a fine.


o Purposes?

1. To provide for liquidated damages, saving him the

o
o

trouble of having to prove damages

2. To strengthen the coercive force of the obligation


What is the safeguard?

The courts can reduce it if unconscionable


Characteristics?

1. Subsidiary

Only upon non-performance can the penalty

entered into the obligation, he was insane)

be demanded, nothing else


Debtor cannot save himself from performing

the obligation by paying the clause


Exception: cumulative, when both the
principal obligation and the penalty can be

What is a divisible obligation?


o One susceptible of partial performance

130

demanded
2. Exclusive

It takes the place of liquidated damages.

When are the cases when both the

penalty and actual damages can be


o

demanded?
o 1. Express stipulation
o 2. Debtor refuses to pay the penalty
o 3. Debtor is guilty of fraud in the

o
o
o
o

fulfillment of the obligation (fraud as


o

malice)
Pamintuan: There was an obligation with a penalty clause.

PAYMENT

It called for liquidated damages or penalty in the form of


100K. There was fraud in the fulfillment of the obligation.

The aggrieved party was able to prove actual damages in


the amount of 190K. HELD: Since the amount of actual
damages is bigger (190K), it absorbs the 100K. So if greater, it
o

absorbs the penalty. BUT this is wrong.


Country Bankers: interpreted the rule correctly. The
aggrieved party can collect BOTH, without absorption.

Extinguishment of obligations

5. Mutual desistance/dissent

Ex. Landlord and lessee agree to cut short the lease


6. Unilateral withdrawal

Ex. partnership
7. Change of civil status
8. Rebus sic stantibus
9. [spaced out]
10. Judicial insolvency

What are enumerated?


o 1. Payment
o 2. Loss
o 3. Condonation/remission
o 4. Confusion/merger
o 5. Compensation/set-off
o 6. Novation
Is this an exclusive enumeration?
o Its not.
What else are there?
o 1. Death, for certain obligations (purely personal)
o 2. Renunciation by the creditor
o 3. Compromise
o 4. Arrival of resolutory term

131

Payment or performance: (1232-1251)


o This is the normal way of extinguishing an obligation
o Distinguish payment from performance.

Payment is the proper term for obligations to give

Performance is the proper term for obligations to do


o Outline this provision:

I. As to prestation

Identity

Integrity

Indivisibility

II. As to parties

Payer

Payee

III. As to time/place
o Special forms of payment:

A. Dacion en pago

B. Imputacion

C. Cession

D. Consignation
Requisites of payment?
o For the prestation:

1. Identity

2. Integrity

3. Indivisibility

What does identity mean?


o The very thing itself must be done or delivered
o If its a specific thing?

Cannot compel the creditor to receive some other

because if it was Y who impaired, X can just issue

thing, even if its the same value


Cathay Pacific: Business class has been fully
booked, so X was being upgraded to first class, but X

refused. Cathay bumped them off. X sued for


damages. HELD: Won, because you can demand the

very thing to be done or delivered even if the


o

alternative was superior.


If its a generic obligation?

Cannot demand what is superior and cannot be given

what is inferior.
What is the special rule on money debts?
o Made in the currency stipulated
o If not possible, whatever is legal tender in the Philippines
o There was a time when you cannot stipulate currency other

than peso, but now you can.


What about payment in negotiable paper?
o General rule: payment of money debt must be in legal tender
o Seneris: Managers check same as legal tender

Corrected in subsequent cases which said that

o
o

only provisional.
X issued a check to Y or order. Y endorsed it to Z. Z lets it go

again.
Rule on inflation or deflation?
o It must be extraordinary there must be a declaration from the
Bangko Sentral.
What are the exceptions to the requirement of identity?
o 1. Dacion en pago
o 2. Novation
What does integrity mean?
o One must deliver the whole prestation
o Exceptions to integrity?

1. Substantial performance in good faith

2. Waiver by the debtor/obligee

3. Application of payments/imputacion (several debts


are equally onerous)
What does indivisibility mean?
o Performance must be in one act
o Exceptions to indivisibility?

1. Waiver/agreement between the parties

2. Prestations that necessarily entail partial

managers, cashiers, or certified check is not legal


tender and can be rejected by the creditor
BUT the creditor can accept, and if he does, this payment is

Namarco: Impairment has to be by someone else,

performance
3. Cases when the law itself provides for divisibility:

A. Debt is liquidated in part and unliquidated

in part (1248)
B. Joint divisible obligation (you have as
many obligations as creditors divided by

stale and he goes to the depositary bank and gets refused.


This is the case where due to the creditors fault, there was
prejudice.

132

debtors)
C. Solidary obligation where the debtors are

bound under different terms and conditions


D. Compensation, where there is a balance

left
E. Work is to be delivered partially

F. Where there are several guarantors that

demand division (2065)


G. Impossibility or difficulty of single

benefit, and the payment is good

performance
o This is an equity measure

creditors rights
2. Creditor ratifies payment

to the third person


3. By creditors conduct,
debtor was led to believe
third person had authority

to receive payment
5. Anyone in possession of the credit
o Ex. NIL
What if the debt has been garnished?

The payment is no good, provided that the

subrogation. The one who pays becomes the creditor

and he can go after the debtor.

Exception: if the third person intended it as

notice of garnishment has been served on

a donation.
What if it is without the debtors consent?

Payment, but only to the extent of the benefit.

Ex. X has a debt to Y for P70K. Y reduced

the payee. This is because the funds are

the debt to P50K. Z did not know about this,


so Z paid Y P70K on Xs behalf. How much
can Z demand from X?
o Only P50K.
o [Beyond topic: Z can demand as the

1. After payment, the third


person acquires the

(ex. guarantor)
Who can the payor be with the payees consent?

Anyone.
What is effect of payment by a third person, if accepted?

If it is done with the debtors consent, then there is

only to the extent of the benefit


When is the benefit deemed to be
total?

The payor (1236-8)


o Who can the payor be (and the payee cannot refuse)?

The debtor/obligor himself

Debtors heir or assignee

Debtors agent (provided there is proof of agency)

Anyone interested in the fulfillment of the obligation


o

It redounded to the creditors

held in escrow on behalf of another person.


When is time/place of payment?
o Time when it is due

Generally, when there is judicial or extra-judicial

P20K from Y as solution indebiti]


Who can you pay?

1. Creditor/obligee

2. His successor or transferee

3. Agent

4. Third person, as long as:

demand

Except the three exceptions on mora solvendi ex re


Place

Primary rule: stipulated place

Secondary rule: place where the thing was located at


the time of constitution of obligation (only if the

obligation is to deliver a determinate thing)


Tertiary rule: (for instance, if it is a generic thing, or
an obligation to do) debtors domicile

133

1. Dacion en pago (dation in payment)


o Filinvest: The delivery and transmission of the ownership of a

debt is extinguished by the performance of the

thing by the debtor to the creditor as an accepted equivalent of


o

the performance of an obligation.


Go: A special form of payment by virtue of which the debtor

offers another thing to the creditor who accepts it as the


o
o

substitute prestation
2. Imputacion (application of payment)
o What is it?
Designation of debt which is being paid by the debtor
who has several debts of the same kind to the creditor

equivalent of payment for an outstanding debt.


Note: There is no requirement that it must be to satisfy a
money debt. It can be for some other obligation.
What is the legal effect, as stated before?

The debtor becomes the seller, the creditor becomes

the buyer, and the debt becomes the purchase price


Since it is governed by the law of sales, there are

implications: warranty against eviction, etc.

This has been criticized precisely because of this.


What is the other point of view?
Dacion en pago is a novation.
This has also been criticized because in a novation,

takes its place. Here, there is no new obligation that

o
o

who is paid
Give an example.
X owes Y four debts: 10k, 20k, 30k, 40k. They are all
due. X remits 100k to Y. No need to apply the rules

the original obligation is extinguished and a new one

3. Agreement between the debtor and creditor that the

takes the place of the old one.


So what is it, really (Castan)?
Its a special form of payment.
Because it departs from the rule on identity
To what extent is the obligation extinguished?
To the extent of the value of the thing given
Unless the parties agree on total extinguishment

he owes in total. How is the payment applied?


What are needed?
1. Debtor
2. Creditor
3. Several debts which are due
4. Remittance of a payment which is less than the
total
How do you apply the amount paid to the several debts?

Primary rule apply according to the agreement of

generally the parties do


What is the essential requirement?
Both parties must consent
What are the requisites of dacion en pago?
1. Performance of a prestation in lieu of payment
2. Some difference between the prestation due and

that which is given

134

on imputacion.
X remits 90k to Y. In this case, this is less than what

the parties (1)


Next the debtor may apply if there is no agreement,
subject to rules on indivisibility of performance (2)
What if the debtor does not apply?

The creditor may apply (3)


What if neither the debtor nor creditor applies?

Apply to the most onerous first. (4)

Ex. interest-bearing debt > non-interest


bearing debt

Ex. secure debt > non-secure debt

Ex. debt with penal clause > without one


What if there are equally onerous?


Apply proportionally to all (5)
What makes imputacion a special form of payment?

It departs from the rule on indivisibility and integrity


3. Payment by cession
o When does it apply?

When there is one debtor and many creditors.


o What happens?

The debtor turns over all his assets to the creditors,

payment
Requisites?

1. There must be a debt due

2. Consignation was made due to some legal cause

There was a prior tender which was unjustly

allows them to sell the assets, and then the creditors


o
o

o
o

divide the proceeds proportionally


Does cession require creditors acceptance?

Yes.
Does ownership over the thing pass to the creditors?

No, they just receive authority to sell.

As opposed to dacion en pago, where ownership

transfers.
What is the extent of extinguishment of the debts?

Only to the extent of the proceeds.

Unless there is an agreement that the entire debt is

extinguished.
Why is it a special form of payment?

Departs from integrity and indivisibility


Does this contemplate voluntary or legal cession?

Voluntary. It is extra-judicial.

It is legal if the debtor goes to court and applies for


public auction and receives an acquittal (under

Insolvency Law)
4. Consignation
o N.B. Tender of payment on consignation is not the correct
o

It generally presupposes or requires prior tender of

o
o

term
What is this?

Act of depositing the thing due with the court or

refused
Or there exist circumstances that make a

prior tender unnecessary or impossible


3. First notice of consignation given to interested

parties

4. Actual deposit with court

5. Second notice given after consignation


What is a tender?

Manifestation made by debtor of his desire/willingness


and ability to make immediate payment
When is prior tender dispensed with?

1. Creditor is absent or unknown or does not appear

in place of payment
2. Creditor incapacitated during time of payment
3. When without just cause, he refuses to give a

receipt

Odd: this still presupposes tender of payment


4. When two or more persons claim the same right to

collect

5. Title of the obligation has been lost


Why is consignation a special form of payment?

Departs from requisite of parties


What if it is a case of mora accipiendi, where the creditor
unjustifiably refuses payment?

Go to court and consign it there. (The French and


German Codes just provide that the obligation is

judicial authorities whenever the creditor cannot

extinguished. This is probably better and easier.)

accept or refuses to accept payment

135

LOSS/IMPOSSIBILITY (fortuitous event)

When is it loss, when is it impossibility?


o Loss, if to give
o Impossibility, if to do
What happens when loss occurs in an obligation to give a

impossible.
What do all of these presuppose?
o That when the obligation was entered into, the obligation was
o

burden
Other view (Romanic view) Y still has to pay the money

Res perit creditori the creditor in effect bears the

burden
Exceptions:
o 1504 sales of goods: just look at the provisions
o 1655 destruction of the thing leased
o 1717 contract for a piece of work, where the contractor
furnishes the material
What is another mode of extinguishment hidden in the folds of this

to be manifestly beyond the contemplation of the parties, the

perished. X just has to buy rice.


What about a limited generic thing?
o The obligation can be extinguished.
o Ex. X entered into an agreement to sell Y one of his cars. If he

Res perit domino the debtor in effect bears the

provision?
o Rebus sic stantibus When the services become so difficult as

delivery, so the genus perished


Ex. X had an obligation to deliver a sack of rice, and the stocks

lost all of them in a fortuitous event, the obligation perishes.


What about obligations to do? (1266)
o Released from the obligation is the prestation becomes

determinate thing (1262)?


o The obligation is extinguished
Does it apply to an obligation to give a generic thing? (1263)
o No.
o Genus nunquam perit- the genus never perishes

Except: if the thing is deemed contraband before


o

obligor is excused
Contracts which have stipulations on successive performances

(several prestations) or dependent on the future


Must interpreted in accordance with the situation that existed

when the obligation was entered into


Requisites?

1. The event of change could not have been foreseen

at the time of the agreement


2. Makes the performance extremely difficult, but not
impossible

What if it makes it impossible?


o You can invoke impossibility of

possible. The loss or impossibility simply supervened.


If the obligation was initially impossible, there is no obligation to

begin with.
In a reciprocal obligation, one of the prestations is lost under

fortuitous event. Does it affect the other obligation? (Ex. X


promised to sell Y his Innova for P1M. It was then lost. Does Y still

have the obligation to give the money?)


o One view (Germanic view) the entire obligation is
extinguished

136

performance
You do not need to invoke rebus sic

stantibus
3. The event was not due to the act of any of the

parties

4. The K of the obligation was a future prestation


To what kind of obligation does it apply?

Only to do, but not to give


But in the Philippines, it has evolved into including

presumption above?

If the debtor has the instrument in his possession, it is

even obligations to give, see Naga Telephone

Because it just says obligations in general

presumed the creditor delivered it to him

CONDONATION/REMISSION

MERGER/CONFUSION

What is this?
o Act of liberality wherein without receiving any equivalent, the

creditor renounces the debt


o Extinguishes the debt in whole or in part
Requisites?
o 1. Debt existing at the time the remission is made

No need for the debt to be due, as long as it exists


o 2. The remission or the waiver must be gratuitous
o 3. Acceptance by the debtor
o 4. Capacity between the parties to enter into a contract of

person
Requisites?
o 1. Takes place between the creditor and the principal debtor
o 2. The very same obligation is involved
What is the most common cause of merger?
o Intestate succession, where you inherit your own debt/credit.
X receives the credit, so there is confusion.
Y has a debt to X. The debt is guaranteed by Z. X assigns the debt
to Z. Did remission happen?
o No. Z is not the principal debtor, he was just a guarantor.
o The guaranty is extinguished, and Z can go after Y.

as to form
If it is an implied remission, and thus not governed by any form.

COMPENSATION/SET-OFF

(Here, the creditor just does not collect)


In case there is a debt evidenced by a private document and then
later on, it is voluntarily surrendered by the creditor to the debtor,

what is the implication?


o The creditor is impliedly remitting the obligation

Because he will lose his proof to collect


o It does not apply to a public document because there will be a

What is this?
o When the debtor and the creditor in the obligation is the same

Ex. X owes his brother Y a sum of money. Y dies intestate and

donation
What is the form?
o If it is express remission, it must follow the rules on donations
o

What is the presumption that gives rise to this

copy of the document in the notarial archives


What if there is delivery by mistake?

The creditor can claim this and rebut the presumption

What is the debtors defense in this case?

He can claim that he actually paid the debt

137

What is this?
o Concurrent amount of two persons who in their own right are
reciprocal debtors and creditors of each other
How similar is this to merger?
o There are at least two debts in both, but in merger, it is
concentrated in one person. In compensation, in two persons.
What are the kinds of compensation?
o 1. Legal compensation (1279)

Automatically when all requisites are present


o 2. Facultative compensation

Can only be claimed by one party, but not the other

In any other case, when both debts fall due, there is automatic

(READ 1287-8)
3. Conventional/contractual compensation

Parties agree to compensate, even if the requisites

are not complete (1282)


4. Judicial compensation

By means of court order/decree


What is legal compensation?
o 1. Parties are mutually debtors and creditors of each other

as principals

and in their own right

X owed Y 10,000. X lent Ys son 5,000 which the

compensation. This is not the concern of 1285.


But now, before legal compensation takes place, X
assigns to A credit 1. So for credit 1, A becomes the new

Y owes a debt to X (credit 1). X owes a debt to Y (credit 2).

creditor. There are three possibilities:

1. The assignment was with Ys consent

A goes against Y when the assigned


credit becomes due. Can Y set up
against A credit 2 (what X owes Y)?
o No, because Y consented to the

son used for nightclubbing. When the debt was

due, X only gave 5,000 claiming compensation.

without his consent

A goes against Y. Can Y set up against A

Correct?

No. Compensation must be between two

credit 2?
o Yes, as long as credit 2 existed by

parties who are mutually creditors and


debtors of each other. Regardless of how the
o

the time credit 1 was assigned.

son spent the money, hes not part of the K.


2. Both debts consist of sum of money, or fungible goods of the

same kind/quality

Note: it must be fungible the code wrongly says

assignment.
2. The assignment was with Ys knowledge, but

Does not cover subsequent debts.


3. The assignment was without Ys knowledge

A goes against Y. Can Y set up against A


credit 2?
o Yes, as long as it arose before he

consumable
o 3. The two debts are due
o 4. They be liquidated and demandable

Liquidated the amount is determined already


o 5. Neither of the debts must be garnished
o 6. Must not be prohibited by law
Conventional requisites?
o 1. Each of the parties
o 2. The parties agree to mutually extinguish the credit
(See 1285) Assignment of credits confusing wording in the

learned of the assignment


Facultative compensation
o 1287 when legal compensation does not automatically take
place

1. Deposit

X deposited 1000kg rice with Y (depositary).


In another unrelated transaction, Y owes X
1000kg rice. There is no legal
compensation here because one of the

provision, so heres the explanation

contracts is a contract of deposit.

138

But the depositor can claim in his favor

compensation. (Facultative in his favor)

2. Commodatum

3. Support
1288 one of the debts arises from civil liability from a crime

The victim of the crime from which the liability arises

can invoke this


When do the modes of compensation take place?
o 1. Legal when all the requisites concur
o 2. Conventional upon agreement of the parties
o 3. Facultative when the creditor entitled to the option

communicates his decision


o 4. Judicial final judgment
Not covered by compensation:
o 1. From deposit K
o 2. From commodatum K
o 3. From support due by gratuitous title
o 4. Obligations from criminal offense
o 5. Taxes, fees, duties due to government
o N.B. what is common is that these are not debts per se

NOVATION

Change in the object or in the principal conditions


o 3. Mixed novation
Requisites of novation?
o 1. Previous valid obligation

Includes voidable
o 2. Agreement by the parties to the new obligation
o 3. Extinguishment of the old obligation

This is actually a consequence


o 4. Validity of new
Two types of novation?
o 1. Express
o 2. Implied

The two obligations must be incompatible


What is expromission?
o The consent of the creditor and the new debtor are required,

When does it arise?


o 1. Changing object or principal conditions
o 2. Changing the debtor
o 3. Subrogating third person to rights of the creditor
Types?
o 1. Subjective/personal novation

Change in one or more parties

Active subjective change in person of creditor

Passive subjective change in person of debtor

Expromission

Delegacion
o 2. Objective/real novation

pay the debt. Is this valid?

Yes.
Consequence?

The release of the old debtor is absolute, even if the

new debtor becomes insolvent.


What is delegacion? (conventional subrogation)
o The consent of all three creditor, original debtor, new debtor

139

but the consent of the old debtor is not required


X owes Y 50000. Z approaches Y and tells him that he will

are all required. The initiative comes from the old debtor.

Delegante old debtor

Delegatario creditor

Delegado new debtor


X owes Y 50000. X approaches Z to ask him to pay for his
debt. Y agreed. Is this valid?

Yes.
Consequence?

The old debtor is absolved, in general. Exceptions:

1. If the new debtor was already insolvent at

the time of the novation AND


2. Such insolvency was known to the old

transmission of rights. Any vice in the


o

debtor or public knowledge


What about assignment of credit, do you need the consent

obligation carries over


Legal by operation of law due to acts of the new creditor

When is legal subrogation presumed?

1. Creditor pays another creditor who is

of all three parties too?

No. Just the old creditor and the new creditor. The

fulfillment of the obligation pays the debt with

consent of the debtor is not required. He must just be

notified.
When the principal obligation is extinguished, are the accessory

obligation pays without prejudice to


confusion as to the latters share

extinguished.
Exception?

When there is benefit for a third person (stipulations

CONTRACTS

pour autrui)
What is problem, as to subrogation?

In subrogation, Art. 1303, the guarantors, sureties,

mortgagors, etc. continue to be bound.


How to resolve the conflict Art. 1303 is the exception
to 1296. It only refers to one kind of novation: active

one creditor to another.)


Distinguish conventional subrogation from legal subrogation:
o Conventional with consent of original creditor, new creditor,

and debtor

Distinguish from assignment of rights:

In assignment, no need for consent of the

Definition of contract?
o Meeting of the minds between two or more parties
o Can one contract with oneself?

Yes, an auto-contract one person acting as two


parties. (Ex. an agency to borrow money: he can also

subjective novation. (When the change is just from

the debtors express or tacit approval


3. Even without knowledge of the debtor,
person interested in the fulfillment of the

oligations extinguished too?


o As a general rule, yes. (Art. 1296)
o So pledge, mortgage, antichresis, guaranty, etc. are

preferred even without debtors consent


2. Third person not interested in the

debtor
Assignment doesnt extinguish the old
obligation and create a new one; it is just a

140

act as the lender)

This is why party is the proper term.


Characteristics of obligations?
o 1. Obligatory force
o 2. Mutuality

Performance cannot be left to the will of one of the


parties
o 3. Relativity
o 4. Autonomy of parties
Elements of contract?
o A. Essential

1. Consent

2. Subject matter

3. Cause
B. Natural

Those incorporated by law into the contract

automatically

Ex. Warranties in sales (against eviction, of

fitness, etc.)
Ex. Right to resolve in reciprocal contracts

C. Accidental

Need to be stipulated by the parties

Ex. Purchase price in sales

Ex. Conditions for performance of the

contract
Classification of contracts?
o A. Degree of dependence

1. Preparatory

One intended to lead into another K (ex. K of

For instance a gratuitous deposit requires

less diligence
G. According to risk

1. Commutative

Exchange of value, so there is no risk

2. Aleatory

Contract of risk/chance/hazard
o Ex. buying a lotto ticket
o H. According to name

1. Nominate

Ex. sales, lease, etc.

2. Innominate

Do ut des I give, you give

Do ut facias I give, you do

Facio ut des I do, you give

Facio ut facias I do, you do


What is autonomy of will?
o Generally, you can enter into contracts depending on what you
o

agency)
2. Principal

Complete in themselves

3. Accessory

Cannot exist alone (ex. mortgage)


B. According to perfection

1. Consensual

Most Ks are consensual


o Ex. Sales

2. Real

Perfected by consent + delivery of the

1. Transfer of ownership

2. Conveyance of use

3. Rendition of service
D. According to subject matter

1. Involving things

2. To render service
E. According to the nature of the obligation produced

1. Bilateral

2. Unilateral

Ex. commodatum
F. According to cause

1. Onerous

2. Gratuitous/lucrative

Implication?

Can determine degree of diligence required.

property
o Ex. deposit, pledge, commodatum

3. Formal

Need form for validity


o Ex. donation of property
C. According to purpose [just theoretical]

141

want
This principle, however yields to various restrictions:

1. Law

2. Public policy

3. Public order

4. Morals

5. Good customs
What is the rule on usury?
o Its now not a crime anymore.
o The only limit is that it is not unconscionable
o When is it unconscionable?

It changes from decision to decision. Some decisions

say that 5.5%/month is invalid, while some say

7%/month is valid
Latest Macalinaw v. BPI: Interest rate of the credit
card is 3%/month (36%/annum). HELD: Any interest
of 3%/month and above is invalid, and will be reduced

to 1%.
What is mutuality of contracts?
o The K must bind both contracting parties. The legal tie must
o

2. Accion pauliana
3. Accion directa
4. Contracts involving real rights

Ex. mortgages, etc.


What is a stipulation pour autrui requisites?
o 1. Contracting parties clearly and deliberately conferred a

favor/benefit to a third person

Not merely incidental


2. The stipulation in favor of a third person is a part, not the

o
o

whole of the entire contract


3. It must not be compensated by any obligation whatsoever
4. Neither of the contracting parties must bear the legal

representation of the third party


5. The third party communicated his acceptance to the obligor

before the revocation by the original parties


Give examples showing/not showing stipulations pour autrui.
o There were squatters living in Krus na Ligas, near UP. For
humanitarian considerations, UP entered into a contract with

be mutual.
What about contracts with escalation clause (adjustment

the QC government to develop the area. The contracting

of interest)?

It is valid as long as it is tied to a factor not entirely

parties. Later on, there were snags in the arrangements, so

parties are QC and UP. The informal settlers were third


the squatters filed a suit under the contract to carry out the

dependent on the will of the creditor (purely

project. HELD: it is a stipulation pour autrui

N.B. the most important element is the clear and

potestative)
What is relativity of contracts?
o Acts between two persons cannot affect, positively or
o

negatively, a third person


Third persons neither can sue or be sued for the benefits of the

contract
What if the contract is transmissible?

If the contract is transmissible, it can pass on to heirs,

assignees, or successors-in-interest
When do contracts affect third parties?

1. Stipulation pour autrui

deliberate benefit conferred


There was a sale of two parcels of property which was on a
precipice. The sale was eventually rescinded because the land
was unsuitable. The commission agents protested, saying that
their commissions must be paid nonetheless, suing under the
contract. HELD: not a stipulation pour autrui because there

was no deliberate benefit intended for the agents.


When can you sue a third party for damages due to tortuous
interference?

142

o
o
o

1. There is a valid contract


2. Knowledge by the third party of the existence of that contract
3. Interference by that third person on the contractual

delivers rice to A and B, who own rice stalls. X


delivers rice to A every Sunday, and when A is not

relationship without legal justification

Is it required that third person act malicious?

No. As long as it was deliberate.

For instance, in an old case, the Augustinian

there, his employee takes the rice. There is no such


prior arrangement with B. If both As and Bs
employees were silent when X delivered rice to them,

fathers thought an old lady was being

cheated in a contract so they induced her to

break it.
What if one enters into a contract in the name of another without

A is deemed to have accepted, and B not.


What is the cognition theory of acceptance?
o Offer and acceptance take effect only from the time knowledge
is acquired by the other person. If during the intervening time,
the party dies or becomes insane, the acceptance (or offer)

authority or beyond the scope of his authority?


o The contract is unenforceable

has no effect.
X made an offer in Davao on Feb 1, through mail to Y, who
received it Feb 5. Y accepted the offer Feb 5 through mail

Consent

Depends on the circumstances. For instance, X

to X. On Feb 8 Y becomes insane. The mail reaches X on

What are the elements of consent?


o 1. Plurality of subjects
o 2. Capacity
o 3. Intelligent and free will
o 4. Express/tacit manifestation of the will
o 5. Conformity of the internal will and its manifestation
What are the requisites of a valid offer?
o 1. Definite
o 2. Complete
o 3. Intentional
What are the requisites of acceptance?
o 1. Unequivocal
o 2. Unconditional

If it is qualified, it is a counter-offer

What about an amplified acceptance?

It may or may not be an acceptance. It


o

Feb 13. Is the offer accepted?

No, under the cognition theory.


X made an offer in Davao on Mar 1, through mail to Y, who
received in Mar 3. On Mar 4, Y sent his acceptance to X.
On Mar 5, X countermanded the offer. Both the
acceptance and countermand are in the mail. Which

prevails?

Whichever reaches the other party first.


Can an offeror withdraw his offer even if he gave the offeree a
certain time to accept?
o In general, yes.
What is the exception?
o When there is an option contract, which is supported by a
o

depends on the circumstances


Is silence acceptance?

separate consideration.
Give an example.

S is offering to sell B a car. B asked for 30 days to


think about it and paid S P5000 for this period. This is
a distinct contract an option contract.

143

What if S sells the car to someone before the

period is done?

S is guilty of contractual breach.


What if there is no consideration given?

S can withdraw the offer anytime.

Does S still have to communicate the

the holder of the RFR at the price which he bought it for.


o Contrast: not allowed for option contracts.
What if the one with the RFR refuses to exercise his option?
o If the one with the RTFR refuses to exercise his option, the
seller cannot sell the property to another person on better

withdrawal?
o No. There is no separate option

Yes. The actual vendee may be required to sell the property to

contract that requires him to do so.


Original facts (B gave consideration). Within the
30 day period, B told S that he wanted to buy the

terms. It has to be equal or more onerous.


Who cannot give consent to a contract?
o 1. Minors

Only the minor can sue to annul the contract.

What about a minor who actively misrepresents


himself as a non-minor? Can the minor still sue

car. S refused. What is Bs remedy?

Specific performance.

What if S had already sold the car to X

to annul the contract?

He still can. If he is too young to enter into a

when B communicated his acceptance

contract, he is also too young to be held in

what is Bs remedy?
o Recover damages from S.
o He cannot sue for specific

performance because X is an

innocent purchaser.
Differentiate an option contract from the Right of First Refusal

(RFR):
o RFR is the right to have first opportunity to purchase, or the

right to meet any other offer.


An option contract limits the offerors power to revoke the offer.
What is determined in an RFR? What is undetermined?

The object is determined.

The terms are not.


Does RFR need separate consideration?
o Equatorial v. Mayfair says no. RFB disagrees with this.
o Lintonjua v. CA says that the consideration for the loan or
o
o

estoppel.
2. Insane or demented persons, and illiterate deaf-mutes

N.B. Different from insanity of in testamentary law

Being a deaf-mute is not enough; you have to be


illiterate too.
What is the exception to the insanity rule?

When he entered into the contract during a

lucid interval
What are the situations where there is vitiation of consent?
o 1. Mistake

When is mistake as to legal effect a vitiation of


consent?

If the mistake is mutual and it frustrates the

mortgage is already the consideration for the RFR.


Does RFR allow actions for specific performance?

real intent of the parties


To which must the mistake of fact refer to?

1. Substance of the thing which is the object

of the contract
2. Conditions which principally moved either
or both parties to enter into the contract

144

What if mistake is as to identity?

Generally, not a ground to annul a contract.

EXCEPT if the identity or qualifications is the

consent
2. Threat is unjust and unlawful
o What if the threatened act is

principal cause of the contract


What about mistake as to accounting?

It only gives rise to correction

lawful, for instance, You, Mr. X


from Surigao Institute of Law, got

my daughter pregnant. You


better marry her, or I will report
to the SC that you got her

effect on the giving of consent


Requisites:

1. Employed by one party against the other

2. Induced the other to enter into the contract

3. It must have been serious


What if both parties employ fraud?

No annulment.
Compare with dolo incidente?

Does not annul the contract because it did

pregnant?

This is a lawful threat, so it


o

does not vitiate consent.


When will there be intimidation
even if the threatened act is
lawful?

When there is no
connection between the

not induce the giving of consent


The consequence of incidental fraud is

threatened act and the


situation behind it (ex. sell

merely damages
What about dolus bonus?

This is tolerable fraud and does not lead to

me your house or else I


will report the crime I saw

damages
(Usual exaggerations in trade, when the

other party had an opportunity to know the


facts) Art.1340

1. Threat is determining factor to give

2. Fraud

Different from fraud in 1170

It must be dolo causante, or one that has a decisive

3. Violence

Requisites of violence?

1. Physical force is irresistible

2. It is the determining factor to give consent


4. Intimidation

Requisites?

you did).
3. Threat is real and serious
4. Threat produces a well-grounded fear that

the person making it can and will inflict harm


5. Undue influence

What do you consider for undue influence?

Consider both the person invoking influence

and one being influenced


Consider:
o Confidentiality, family, relations
If the person was mentally weak, ignorant, or
financially distressed

145

It must be influence that deprives one of freedom. So

it cant be lawful or due influence (ex. parental

guidance).
What is the effect of violence if perpetrated by a third person (Art.
1336)?
o It still makes it voidable. The contract is still voidable even if

employed by a third person who did not take part in the


contract.
What about undue influence by a third person?

By analogy, same rule.


o What about fraud by a third person (Art. 1342)?

Does not vitiate consent

Unless it led to substantial mistake and it is mutual


What are the two kinds of simulation of contract?
o 1. Absolute

There is no underlying contract, and no intent to be

agreement

Ex. making a donation to a son seem like a


sale as to not make siblings jealous
What is the effect?

It will be treated in accordance with the rules

of the concealed contract


Object

What is the causa in onerous reciprocal obligation, like a contract


of sale?
o For the seller, the payment of the money to him
o For the buyer, the delivery of the thing bought
What about a remuneratory obligation?
o The service performed
For donations?
o Gratuity or liberality
Distinguish object form causa:
o Object is what is owed?
o Causa the proximate why of the contract.

Not the ultimate why, which is motive


Requisites?
o 1. It must exist
o 2. It must be real
o 3. It must be licit
Is there any instance when failure of the motive will lead the
contract to fail?
o Yes.
o 1. When the motive is stipulated to be a suspensive condition
o 2. The realization of the motive is the cause of the contract and

Requisites of object of contract?


o 1. It must be within the commerce of man, whether existing or
o

contract?
Extinguishes the obligation
4. It must be determinate as to its kind and determinable as to

Causa

bound
What is the effect?

It is void, because there is no consent


2. Relative

They intend to be bound, but concealing the real

prestation does not exist


What if it becomes impossible in the middle of the

quantity

3. It must be possible

At the time of perfection of the contract

What if it is impossible from the very start?


The contract does not exist because the

in potency
2. It must be licit

there is an intervening serious mistake of fact

146

Form

General rule: no specific form required


When is it required?
o 1. Donation of property
o 2. Sale of large cattle
o 3. Antichresis

Requires statement of the principal and interest in


o
o
o
o
o
o

diligence to ordinary diligence


Can one party require the other to follow the correct form?

No, because that would presuppose a valid contract.

property, EXCEPT sales of real property or interest

which:

Should appear in a public document

Or should prejudice a third person


4. Cession of actions or rights from a public document

What are the types of defective contracts?


o 1. Rescissible
o 2. Voidable
o 3. Unenforceable
o 4. Void/inexistent
When is it rescissible?
o When there is particular economic damage to one of the
parties or a third person
How does the law treat the contract?
o It is intrinsically valid but external factors allow it to be

registration. What are these?


o Those in Art. 1358

1. Acts and contracts for real rights over immovable

rights or those in CPG


3. Power to administer property or any other power

be registered
Can one party require the other to follow the correct form?

Yes. One party can require the other party to follow

rescinded
When is it voidable?
o Defect in consent in one of the parties

How does the law see it?


o Valid until annulled
When is it unenforceable?
o For lack of authority, or writing, or incompetence of parties
How does the law see it?
o Cannot be given effect unless ratified

When is it void?
o Lack of requisites

Which can be cured?


o Voidable and unenforceable

There is none here for failure of form.


There are cases when form is required but not for validity but for

Defective contracts

therein, which is governed by the statute of frauds


2. Cession, repudiation, renunciation or hereditary

Failure to follow form makes it valid and enforceable but cannot

the correct form needed (since they are valid)

writing
4. Partnership where real property is contributed
5. Interests in mutuum

Must be expressly stipulated


6. Sale of land by an agent

Else, sale is void


7. Chattel mortgage
8. Stipulation limiting common carriers duty of extraordinary

Rescissible

147

What is rescission?

A process or remedy designated to render inefficacious a


o

What is the extent of rescission?

Only to the extent of creditor prejudice


4. Refer to things under litigation if entered into without

o
o

knowledge of litigants or consent of judicial authority

Rescissible at plaintiffs instance


5. By special provision of law
(1382) 6. Payments made under state of insolvency for

contract validly entered into and normally binding by reason of


external conditions creating an economic prejudice, either to a

party or to his creditors


What are the requisites for rescission?
o 1. The contract must be rescissible under 1381-2
o 2. Last resort for plaintiff
o 3. Plaintiff must be able to return what he would be obliged to

obligations to whose fulfillment the debtor would not be

return if rescission takes effect

Sometimes, there is nothing to return, like a creditor in


o

action pauliana
4. The object of the contract must not have passed to an

innocent third person


What are the rescissible contracts?
o 1. Entered into by guardians when wards suffer lesion by more

nothing to return

than of the value of the thing

Ex. the guardian of a ward who owns harvest with

Voidable contract

value of P100K sells it for P80K.

Is there lesion?
o Yes.

Is there rescissible lesion?


o No, because P20K is less than of

the harvests property.


A guardian is judicially appointed. If the sale is

made with court consent, what is the effect?

There can be no rescission.


Sale of fruits and personalties are acts of

What are the characteristics of voidable contracts?


o 1. Effective unless set aside
o 2. It may be assailed only for an action specifically for that

administration. These do not need judicial approval,

so lesion can result. But for sale of real property, for

instance, where there must be court approval, there


o
o

compelled at the time they were effected

Does this require judicial insolvency?

No, just actual insolvency


What is the effect?
o Return what he may be obliged to return
o When does it apply?

Only instances #3 and 4 since for the rest there is

can be no rescission.
2. Same, but for representatives of absentees
3. Disposition in favor of third person in fraud of creditors

148

purpose

Cannot attack it collaterally


3. It can be confirmed

N.B. the law uses ratify confirm is a better term

Ratification is for 1403 par. 1

Acknowledgement is for 1403 par. 2


4. May be assailed only by the party with vitiated consent, his

heirs, or subsidiaries
What are the requisites of confirmation?
o 1. Contract is voidable
o 2. Confirmation made with knowledge of voidability
o 3. The cause for voidabilty has been removed

4. The one who is doing so if the one whose consent is

And if the other does so too?

Becomes valid
3. Falling under the Statute of frauds

A. Agreement whereby its terms, cannot be begun

defective
When will action for annulment not prosper?
o 1. If it has been confirmed
o 2. Prescription
o 3. Loss of the thing due to fraud or fault of person with right to

institute proceedings
o 4. Estoppel
1400 and 1401 In a voidable contract, upon annulment, there

within one year from the agreement

Refers to commencement, not completion


B. Special promise to answer for debt, default, or

must be mutual restitution (just like resolution and rescission).

miscarriage of others

Contract of guaranty or suretyship


C. Agreement made in consideration of marriage

except mutual promise to marry


D. Sale of chattel/goods/things in action for price

Are there any instances when the duty of mutual restitution is not
present?
o The thing is lost due to defendants fault or fraud

Return the fruits, value of the thing at the time of the

P500 or more

Unless there is payment of price or delivery

loss, interest
What if it is lost fortuitously?

Return fruits and value of the thing at the


time of the loss, but no interest
What if the thing the plaintiff must return is lost
through fault or fraud?

Action is extinguished
What if it is lost fortuitously?

Tolentino: action is extinguished unless the

plaintiff offers to pay the value of the thing


Caguioa: plaintiff can still recover

or sale of real property/interest therein

Amount is immaterial for real property


F. Representation as to the credit of a third person
G. (Art. 1443) no express trust concerning an

parol evidence
What are the rules re: Statute of frauds?
o 1. Only applies to actions which are for specific performance or
o

breach
2. Does not make void the contracts falling under the
enumeration if not in writing. It just bars action for specific

What are the kinds?


o 1. Entered into in the name of another by one with no authority
o

of goods
E. Agreement for leasing for period longer than 1 year

immovable or any interest therein may be proved by

Unenforceable

performance or breach
3. Applies only to executory, and not executed contracts in
whole or in part

Executory one where there is no performance in

or legal representation, or acting beyond powers


2. Both parties are incapable of giving consent

What if one becomes capacitated and confirms it?

It becomes voidable

either side

149

If either side has performed, then it gets out of SOF

(1405 acceptance of benefit)


o 4. Cannot be proved by parol evidence.
How do you resist a claim on an unenforceable contract?
o File a motion to dismiss
o Or use SOF as affirmative defense
o Or object to presentation of parol evidence during trial

Void

order
o 5. Right to set-up defense of nullity cannot be waived
What are the special instances of void contracts?
o 1490, 1491 ex. contract between husband and wife
What is the pari delicto rule (1411-2)?
o It literally means in equal fault.
If the act constitutes a criminal offense, its a void contract which
happens to constitute a criminal offense. If they are in pari delicto, there

What is it?
o No force and effect, as if never entered into
o Never validated, either by time or ratification
See enumeration in 1409
o See #3 it says those whose cause or object did not exist at

the time of the transaction. This is wrong, because there can


be a contract over a future thing. It must be cause or object

4. If performed, the restoration of what has been given is in

could not exist original impossibility.


1. Cause, object, or purpose is against law, morals, GC, PP,

o
o
o
o
o

PO
2. Absolutely simulated
3. Cause or object could not exist at the time of the transaction
4. Object is outside commerce of men
5. Contemplates an impossible service
6. Intent of the parties relative to the principal object of the

performance. Restitution depends on guilt/innocence.


Article 1412-19: exceptions to pari delicto rule
o N.B. The parties are in pari delicto, but despite that, due to

contract cannot be ascertained


o 7. Expressly prohibited or declared void by law
Characteristics?
o 1. No effect whatsoever
o 2. No action for annulment necessary because the nullity exists

can be no action for specific performance, nor restitution on either side


o What if only one party is guilty?

For the guilty party, no action for restitution

For the innocent party, there can be


What if the object/cause is unlawful but not criminal?
o There can be no specific performance or restitution.
o What if only one party is guilty?

For the guilty party, no action for restitution

For the innocent party, there can be


N.B. So whether criminal offense or not, no action for specific

o
o

social considerations, allows one of the parties recovery:


1. Interest paid in excess of allowable by usury laws
2. Money paid for illegal purpose, but before it was

o
o

accomplished or damage has been caused to third persons


3. One of the parties to the illegal contract was incapacitated
4. Agreement is not illegal per se but merely prohibited, and
prohibition is to protect the part seeking recovery of the money

ipso jure

Judgment of nullity is merely declaratory


3. It cannot be confirmed, ratified, or acknowledge

paid
5. Payment of price beyond maximum price allowed by law for
a commodity

150

6. Employer and employee voluntarily agreeing on wages


below the minimum wage or more hours than allowable

working hours (can ask for OT pay)


What is pactum commissorium?
o The creditor cannot appropriate the things given by way pledge

or mortgage, or dispose of them.


Contrary stipulation is null and void.
What is pactum de non alienado?
o There can be no stipulation prohibiting the mortgagor from
alienating his own property.
What is pactum leonina?
o A stipulation which excludes one or more partners from any
share in the profits or losses of the partnership is void.

LAND TITLES

What are the purpose and advantages of the Torrens system?


o 1. Make a title indefeasible
o 2. Make it imprescriptible
o 3. Make it immune to collateral attacks

When is an attack direct?

When the object is to annul or set aside the

o
o

C. Existing:

public highways, government irrigation canal;

legal right of way under private law;

and the like

D. Limitations on disposition or use, under law


But is registration a mode of acquiring title?
o No, its not. There has to underlying basis for title before

registration.
o Such as?

1. Possession

2. Succession

3. Donation

4. Accretion

5. Sale

6. Acquisitive prescription (10/30 years)


Can land registered under the Torrens system and for which a
certificate of title has been issued be taken?
o No.
o What is the exception?

If taken by the Dept. of Agrarian Reform (CARL)

Police Power, Eminent Domain, Taxation


Who can register under PD 1529?
o 1. Those with open, continuous, exclusive, and notorious
(OCEAN) possession and occupation

Of what?

Alienable and disposable lands of public

decree of title
Can a counter-claim be considered a direct attack

on the title?

Yes. (Erman v. Erman)


4. Conclusive (after lapse of period for remedies)
5. Declares the titled property free from liens and

domain
What if the land is not alienable (ex. forest
or park reservation)?
o It cannot be registered. The

encumbrances not annotated, except:

A. Those not required to be annotated

B. Unpaid real estate taxes within 2 years prior to

purchase (the taxes pre-2 years are paid by the

delinquent taxpayer alone)

151

certificate of title is void.


Since when?

June 12, 1945 or earlier


By whom?

o
o

The registrant or his predecessors-in-interest


2. Acquired ownership of private lands by prescription
3. Accretion

What can be acquired?

Private lands

Or abandoned river beds

When is there accretion (requisites)?

1. The deposit is gradual and imperceptible

2. Made through effects of water current

3. Land is adjacent to river banks

What does registration do?

To confirm and make the title imprescriptible


4. Acquired ownership of land in any other manner provided by

cause notice through publication and subsequent

ownership under the NCC?

No.
What is the relationship of A.D. registration with existing

property rights?

Existing property rights prevail.


What is the priority as re: natural resources in these
Ancestral Domains?

The IP groups possess priority rights in using such.

Non members of the IP group may develop and use


these resources for agreements not exceeding 25

law
Who can register under RA 8371 (IPRA)?
o Individual members of IP communities, as to ancestral lands

(not domain), which they continuously possessed and occupied


in the concept of an owner since time immemorial or at least 30

agreement
Extractions must be used to facilitate
development and improvement of ancestral

community
Which lands are treated as alienable and
disposable agricultural lands?

Those ancestral lands which are agricultural


in character and actually used for

agricultural, residential, pasture, and tree

years, renewable for not more than 25 years


What is specially required?

There must be a formal and written

years before 29 Oct 1997 (approval of IPRA)

What else is required?

It must not be contested by fellow IPs in the

survey.
Is this communal ownership the same as co-

domains
Can a corporation register public land?
o No. It can only lease public lands.
o But can a corporation acquire private land?

Yes, as long as it is a Philippine corporation (60%


rule).
N.B. If land is held by an individual from June 12, 1945 or ealier, it ipso
jure becomes private land (akin to #1 in the enumeration)
o THUS, if a corporation has personally possessed or is claiming

farming purposes

Including those with a slope 18% or more

Until when can this right be exercised?

Unless extended, until 29 Oct 2017


What is the rule on Ancestral Domains?

It is communally owned. Registration is with the

under a predecessor-in-interest who has possessed the


property since June 12, 1945, the land is ipso facto converted
o

Ancestral Domains Office of the NCIP, which shall

152

to private land, which it can own.


Is forest land registrable?

No, it cannot be registered.

o
o

Who can declassify it?

Executive branch of government


Is payment of land taxes sufficient?

No. It must be couple with possession in the concept

of an owner
If it is not held since June 12, 1945, then what is required
apart from adverse possession for the proper period?

The claimant must prove, by government act, that the

land was classified as public and alienable lands.


What is the status of reclaimed lands?
o Lands reclaimed by government are not available for sale to
private parties unlike other alienable public lands. (Chavez v.
o

PEA)
The general rule that the grant of patent or certificate of title
makes alienable land of the public domain automatically
become private land does not apply to government units and

entities like the PEA.


When then can it become private land?

When it is transferred to qualified private parties or


government entities not tasked to dispose public lands

(unlike the PEA)


What properties cannot be registered?
o [public lands]
o 1. Forest lands
o 2. Mineral lands
o 3. Grazing lands
o 4. Mangroves
o 5. Manmade alluvial deposits along a river

N.B. contrast with accretion


o [public waters]
o 1. Rivers
o 2. Lakes
o 3. Water sheds
o
[reservations]

o 1. Military reservations
o 2. Other reservations
o [previously titled]
o 1. Previously titled lands
What is the process of land registration?
o 1. Survey

Who performs this step?

Survey plan is signed by geodetic engineer

Approved by Director of Lands

Is this an essential requisite?

YES.
o 2. File application for registration

Where?

In RTC where the land is actually situated

What to identify?

1. Basis of ownership

2. Identity of Land

3. Adjacent owners

4. Occupants/tenants

5. Encumbrances
o 3. Set date of initial hearing
o 4. Publication/posting

What is the time frame?

It must precede the initial hearing or else the


o

court has no jurisdiction


5. Oppositor files verified opposition

When?

On or before hearing
6. Otherwise, court issues order of general default

What if the oppositor attends hearing but does not


file an opposition?

1. Can be declared in default

2. Or can be given extension, after which,

153

failure to comply leads to default


7. Ocular inspection

What is checked?

1. Improvements

2. Lot owners

3. Adjacent owners

What happens after?

The court prepares a report


8. Hearing/trial

What must the applicant prove?

1. Proof of publication (jurisdictional matter)

2. Proof of ownership

3. Proof of identity of land

What can the oppositors introduce?

Rebuttal evidence
9. Decision

What are the 3 situations?

1. In favor of applicant

2. In favor of oppositor/s

3. Dismiss case because nobody proved

o
o

Within 15 days from receipt of decision


What are the remedies from a Final Judgment?
o (N.B. decision becomes final after lapse of 15 days)
o A. When a decree has not been issued

1. Petition for relief under ROC Rule 38

What grounds?
o FAME

What are the requirements?


o 1. Verified
o 2. Filed 60 days from notice but no
more than 6 months from entry of
o

decision
B. When a decree has been issued

1. Petition for review under PD 1529, Sec. 32

What grounds?
o Deprivation of dominical rights

ownership
10. Court issues order for Decree
11. Issuance of Decree

Becomes incontrovertible after 1 year from issue

based on actual and extrinsic fraud


When may it be filed?
o Within 1 year from issuance of

decree
Exception?
o When there is an innocent

(because the law allows the remedy of Petition for

Review within this period, under PD 1529)


o 12. ROD issues OCT
What are the remedies from an Order of Default?
o 1. Before decision

Motion to lift order of default based on FAME


o 2. After decision

Petition for relief based on FAME


What are the remedies from a Decision?
o 1. MR on ground that decision is contrary to law/evidence
o 2. MNT on grounds of FAME or newly discovered evidence
o 3. Appeal, on ground that it is contrary to law/evidence
o When must any of these be filed?

154

purchaser for value


When is there an IPV?
o 1. No knowledge of defect in title
o 2. Payment of just price
o 3. Examined sellers duplicate

certificate of title
2. Action for reconveyance

When do you file this?


o If more than 1 year has elapsed

Ground?

Loss of dominical rights over


property based on extrinsic fraud or

breach of trust
Exception?
o When there is an IPV
o What is the remedy then?

Action for damages

value of land + damages


o Within what period?

4 years
When can it be filed?
o 1. Within 4 years of discovery of

fraudulent deed
2. Within 10 years from breach of

in possession of the land


3. Imprescriptible from breach of

implied trust if aggrieved party is in

Torrens system
How many copies of the certificate?

Original with the ROD

Duplicate with the registered owner


o What happens when there are conflicting certificates?

Earlier one prevails unless it is defective


Compare cadastral registration with ordinary land registration:
o In cadastral registration, it is the government, through the
Director of Lands, that commences the petition and NOT the

implied trust if aggrieved party is not


o

decree?

Ejectment suit
What is a certificate of title?
o It is evidence of title, that the land is registered under the
o

fraud when there is need to annul


o

Writ of possession from the court


What about those who entered after the issuance of the

possession of the land

Akin to a quieting of title


4. Imprescriptible from breach of

persons claiming.
Those claiming are merely compelled to go to court to make a

claim or make known their interest in the land.


What is the procedure in cadastral registration?
o 1. Survey conducted

President tells Director of Lands to conduct the survey

Notice and publication to those with interest and


general public

Official Gazette

Conspicuous place on municipal building

express trust
3. Action for damages

Requisites for award of damages?


o 1. Unlawful deprivation of land
o 2. No negligence of the party

deprived
o 3. Reconveyance is not possible
o 4. Action filed within 4 years
What is the effect of a final decision with publication?
o It binds all parties in rem (binds the whole world)
o How can oppositors and squatters who entered before the

decree be evicted thereafter?

155

bulletin board
Copy sent to mayor, barangay captain, and

Sanggunian
Persons claiming interest inform the geodetic

engineers of boundaries of claimed land

Parcels are designated as lots


2. Petition

Filed by Director of Lands (represented by Sol-Gen),

2. Clerical error in certificate

3. No serious dispute as to error or change of status

4. Not amount to reopening

5. Not impair rights of IPV


o What if there is substantial change in the CT?

It must go through ordinary registration proceeding


2. Reconstitution
o `What if the duplicate OCT is lost?

File action for replacement


o What if the original OCT is lost?

File action for reconstitution

What is the requirement for this?


Petition that notifies occupants, adjacent

filed with RTC, and showing public interest involved.


o

Describe the land and the plan.


3. Notice given (same as usual)

Publication

Mailing

Posting
4. Answer to petition filed by claimant

1. Identity of claimant

2. What is the lot claimed and what is the interest

therein or time of possession/manner of acquisition


3. Provide adjoining owners and encumbrances or

adverse claims, if any


When is a MTD allowed?

Already subject to prior patent

Or res judicata applies


5. Hearing, judgment, and issuance of decree

What are the possible results?

1. Judgment of ownership
o Usual remedies allowed
o If no appeal performed, court orders

owners, adverse claimants by publication,

titles?

If a title has been reconstituted the buyer must

exercise extraordinary diligence to be deemed an IPV


X pretends to be owner of land, files, for reconstitution,

LRA to issue certificate of title


o Registration of decree by the LRA
2. Declare land as public
3. Order correction of technical description of

obtains reconstituted certificate, and mortgages to Z. Y,

the land or resolve overlapping titles


o For both, as long as no impairment

the true owner, still has his TCT copy.


When is notice to owners or adjacent lots or actual

the true owner, still has his TCT copy. Does Z have a right
through the mortgage?

No. Z has no better right than X, especially where Y,


o

of substantive rights of owners

occupants NOT needed for reconstitution?

When the source of reconstitution is the owners

Actions, dealings, and subsequent registration

posting, and personal notices


Otherwise, the reconstituted title is void
What is the special requirement re: IPVs on reconstituted

duplicate copy thereof


3. Double sale
o In a double sale situation, to whom does ownership

1. Amendments of CT
o When can amendment be done summarily?

1. Registered interest has terminated

passes?

The buyer in GF who first records the sale in the ROP

156

What is a notice of adverse claim?

A measure to protect interest of person dealing over a

how does it affect the double sale situation?

The party seeking to register cannot invoke

piece of land, and to warn third persons dealing with

that property
What is specially required in the notice?

It must state how and under whom the right

was acquired
When is a notice of adverse claim effective?

Upon entry in the day book, even if the

good faith when there is an annotation at the

appropriation
Chain of title

registrant surrenders the owners duplicate of title, and

pays fees
Example of voluntary transactions?

Sale and mortgage


When is mortgage deemed registered?

Entry in the day book, even if it is not annotated at the

Can the buyer have title even if the seller does not?
o Yes, on certain situations. This is an exception to the civil law
doctrine that the stream cannot be higher than the source.
In general, what is the effect of a forged deed?
o It is a nullity and cannot serve as just title.
Situation 1: X is the registered owner of TCT 12345. X goes to the

back of the title


NOTE: for involuntary dealings, entry in the day book

US and gives title to Y in trust. Y forges Xs signature in the deed

is enough, even if the title is not surrendered. The

registers the land and gets TCT 12347.


o Does Y have a valid title?

No, its void.


o Does Z have a valid title?

Yes.
o X returns from the US and learns of the sale. Can X

of sale in Ys favor. Y gets TCT 12346. Y sells land to Z as IPV. Z

reason is obvious: the owner is likely not to surrender


his title in an involuntary dealing, unlike a voluntary
o

back of the title


Can a private individual bring an action for reversion?
o No he cannot.
o What is the prescriptive period for reversion?

None, because its the right of the State to recover


properties registered but are not capable of private

owners duplicate has not been surrendered


What is subsequent registration?
o When the land is already titled and you deal with it
o When is there registration of voluntary transactions?

Once the deed is entered into the day book, the

If there is a notice of lis pendens or adverse claim,

one.
How long is the life of an adverse claim?

30 days, after which it lapses

What must be done and what is the effect?

The affidavit of adverse claim must be

recover from Z?

No.

What is Xs remedy?

Go after Y for damages.

When can X recover from Z?

If Z had not yet obtained his TCT.

entered into the day book, so the subsequent


buyer is constructively bound

157

Hypothetically, could Y have mortgaged the land in favor

of Z, and would it have been valid?

Yes and yes. While legally Y is not the owner of the


land and cannot mortgage it, as far as Z is concerned,

Y is the registered owner. X must respect the

What are the characteristics of a loan contract?


o 1. Real Contract, because delivery of the thing loaned is

mortgage.
Situation 2: X is the registered owner of TCT 12345. Y
misrepresents to Z that he is X and sells the land to Z. Z gets title

perfection
What are the kinds of Loan?
o 1. Commodatum (hiram)

The bailor delivers to the bailee a non-consumable


thing and the bailee may use it for a certain time and

TCT 12345.
o Does Z have a valid title?

No. Z is negligent because he has the duty to find out

if the seller is the registered owner. (This duty also

return the same thing


2. Mutuum (utang)

The bailor delivers to the bailee money or some


consumable thing and the latter will pay the same

applies if the price is suspiciously low.)


Note that there is no chain of title, since Y did not get

title in his name. Thus, Z has no title either.


What is Xs remedy?

Since the title is void, X can recover the property from

Z.
Situation 3: Y forges the deed of sale but does not register it to get
a new title. Y shows it to Z, and Z buys. Y makes deed of title in

necessary to perfect the K


2. Unilateral Contract only the borrower has obligations upon

favor of Z.
o Can X recover the property from Z?

Yes, he can. There is no chain of title.


o Who should shoulder the loss?

The one who is negligent. In this case, it was Z.


What is the requirement of diligence for those dealing with
property covered by a Torrens title?
o Not required to go beyond what appears on the face of title.

CREDIT TRANSACTIONS

Commodatum

Mutuum

SM is non-consumable
Ownership retained by bailor
Essentially gratuitous
Return same thing

SM is consumable
Ownership transferred to bailee
Gratuitous or onerous
Pay same amount or same

Real or personal property


Loan for use or temporary

kind/quality
Personal property only
Loan for consumption

possession
Right to demand return of the thing

No right to demand return before

in case of urgent need, even before

lapse of term agreed upon

expiration of term
Loss shouldered by bailor

Loss shouldered by bailee even if

Loan Contracts

158

amount or the same kind/quality


Distinguish the two.

the loss is caused by fortuitous event


Distinguish between commodatum and lease.

Commodatum

Lease

Real contract

Consensual contract

requirement. Y would be tasked to return it after a

SM is non-consumable thing
SM can be even work or service
Essentially gratuitous
Onerous

Distinguish between commodatum and usufruct.


Commodatum

Usufruct

By law or by contract

By law, contract, testamentary

Purely personal right to use

succession, or prescription
Real right to the fruits of anothers

anothers property
Essentially gratuitous
Real contract
Bailee only acquires use of thing, but

property
May be onerous
Consensual contract
Usufructuary acquires right to both

not fruits
Consumable goods may be the SM

use and fruits of the property


May be over consumables like

only when the purpose of the K is for

money

month. What is the contract?

Commodatum, even if the SM was


consumable goods. The purpose was
merely to show requisite capitalization, not
o
o

What are the characteristics of commodatum?


o 1. Essentially gratuitous

What if its not?

Its a lease.
o 2. Purpose: temporary use of the thing loaned

Can acquisitive prescription in favor of the bailee

inherited.
Cf. for usufruct, this is not the rule because
usufruct is a real right over the property. It

vest?

interest
6. Personal contract

What if one of the parties dies?

The contract is extinguished; it doesnt get

mere exhibition

for consumption.
5. Bailor need not be the owner, as long as he has possessory

No. There is no just title. The duty to return

attaches.
7. Bailee cannot lend or lease the SM of the contract to a third

person

What is the exception?

Member of the bailees household

What are the exceptions to the exception?

1. Stipulated to the contrary

2. Nature of the thing forbids its use


What are the obligations of the bailee?
o 1. Liable for ordinary expenses for use and preservation of the
thing

prevails.
3. Use is limited to the thing, but not the fruits

Exception?

If stipulated otherwise
4. SM is generally non-consumables unless the purpose of the

Is the bailee liable for ordinary wear and tear of


the thing due to use?

No.

What are the exceptions?


o 1. If done with fault or negligence
o 2. Devoted the thing to a different

contract is exhibition of consumable things

X lent Y P200000 to deposit in Ys corporations


bank account to meet the minimum capitalization

159

purpose from what was stipulated


2. Bailee not liable for loss due to fortuitous event

What are the exceptions?

1. Bailee devoted thing to different purpose


2. Bailee kept thing longer than period

stipulated
3. Thing was delivered with appraisal of its

value
o Unless stipulated otherwise
4. Balee lent the thing to a third person

outside his household


5. Bailee, given a choice to save either the

expenses were incurred


What is the exception to this?

Urgent need to repair


3. Refund 50% of extraordinary expenses from actual use of

thing loaned

What is the exception?

Contrary stipulation
4. Pay damages to bailee for known hidden flaws in the thing

hospital. On the way back, Y took on paying


passengers who paid money. The jeep then was
struck by lahar and was destroyed. Is Y liable?

Yes. The contract is commodatum, and Y

devoted the jeep to a purpose different from

what it was lent for.


3. Bailees are solidarily liable when the thing is loaned to 2 or

more bailees in the same contract


Can the bailee retain the thing loaned as security for

loaned
What are the characteristics of mutuum?
o 1. Borrower acquires ownership of the thing and can dispose of
o

it
2. If the thing loaned is money, it must be in legal tender and in
case of extraordinary inflation or deflation, basis of payment

claims against the bailor?

No, not even due to extraordinary expenses incurred


What are the obligations of the bailor?
o 1. Allow the bailee the use of the thing loaned for the period

stipulated, or until accomplishment of the purpose

What are the exceptions?

1. Urgent need, which suspends the

returned?

Acts of ingratitude by the bailee


2. Refund extraordinary expenses for preservation of the thing

What is the notice requirement?

The bailor must be notified before the

thing or his own thing, chose the latter


X lent Y his jeep to bring Ys sick wife the

When else can the bailor demand the thing to be

commodatum
2. Precarium:
o A. Duration not stipulated
o B. Use or purpose not stipulated
o C. Use of thing merely tolerated by

may be value of the currency at time of creation of obligation


3. If consumable thing is loaned, borrower must return thing of

same kind/quality
Distinguish between mutuum and lease:

Mutuum

Lease

SM is money or consumable thing


Ownership is transferred
Relationship is creditor-debtor

Anything
Ownership is retained by lessor
Relationship is landlord-tenant or
lessor-lessee

the bailor

160

What are the rules on interest?


o 1. Interest must be expressly stipulated in writing

What are the exceptions?

1. Debtor is in delay liable to pay legal

interest as indemnity, even in the absence of

stipulation that the rate of interest shall be reduced in

stipulation of interest
2. Interest due shall earned interest from the

the event that the maximum rate of interest is reduced

time its judicially demanded (interest on the


o

interest)
2. Usury Law has been suspended

But in case the interest rate is too exorbitant, the


reduced
What is the legal interest?

12% for loan or forbearance of money

6% for other obligations

Ex. damages for personal injury, unearned

profits, etc.
But it becomes 12% from the time when

demand
But when the demand is established with
reasonable certainty, the interest begins to
run from when judicial or extrajudicial claim

is made (from default)


What are examples of SC rulings re: interest rate?

5.5%/month is excessive and unconscionable (E and

contracts.
Can a debtor be made liable for both stipulated monthly

interest and the stipulated penalty charge?

Yes.
Can there be compounding of the penalty or

Deposit

until payment of such


From whence can legal interest be counted?

Usually, from rendition of judgment, not

compensatory interest (adding to the principal)?

Yes, and this shall earn new interest.

judgment becomes final and executory

by law or the Monetary Board


Can an escalation clause stipulate that escalation
is dependent on one of the parties?

No. That would violate mutuality of

obligation is still valid although the interest may be


o

Yes, if it also includes a de-escalation clause or a

What are the characteristics of deposit?


o 1. Real contract
o 2. If gratuitous, unilateral. If onerous, bilateral.
o 3. Principal purpose is safekeeping of the thing delivered
o 4. Essentially gratuitous

Exceptions?

1. Contrary stipulation

2. Depositary is in business of storing goods

3. Property saved from destruction during


calamity without owners knowledge (must

U)
6%/month (72% per annum) is E and U
3%/month (36% per annum) reduced to 1%/month

(12% per annum)

Penalty charge of 5%/month is E and U


Is an escalation clause valid?

161

compensate depositary)
Distinguish deposit from mutuum.

Deposit

Mutuum

Purpose is safekeeping
Depositor can demand return at will
SM is movables (extra-judicial) and

Purpose is consumption of SM
Lender must wait for period to expire
SM is money or consumable thing

immovables (judicial)

Distinguish between deposit and commodatum.

Deposit

Commodatum

Purpose is safekeeping
May be gratuitous

Purpose is transfer of use


Always gratuitous

Judicial

By will of the parties


SM is movables
Purpose is safekeeping

By order of court
SM may be immovable or movables
Purpose is to secure or protect

Essentially gratuitous
Return upon demand by depositor

owners right
Always onerous
Thing delivered only upon court

condition, if delivered closed and sealed


2. Pay for damages if the seal or lock is

broken through his fault (which is presumed)


3. Keep secret of the deposit when the

seal/lock is broken
When can the depositary open the thing

delivered)

2. In case of necessity
2. Liable for loss if through fault or negligence

What is the presumption?

If lost while in the possession of depositary,

o
o

order

1. Return the thing deposited in the same

deposited, even if locked and sealed?

1. Presumed authority (ex. keys were

What are the kinds of deposit?


o 1. Judicial
o 2. Extra-judicial

Voluntary

necessary
Distinguish between judicial and extra-judicial deposits.

Extra-judicial

What are the characteristics of voluntary deposit?


o 1. Delivery made upon will of depositor
o 2. Depositor need not be the owner of the thing, although thats

required is less than for onerous deposit


3. Cannot deposit the thing to a third person
4. Liable for loss of the thing deposited, if:

1. Transferred to a third person without authority

Negligence need not be proved

2. Transferred to a third person, with authority, but the

usually the case


o 3. May be oral or in writing
What are the obligations of the depositary?
o 1. Keep the thing safely and return it when required, even if a

there is presumption of fault


How does the degree of negligence differ?

For gratuitous deposit, the standard of care

third person is manifestly careless or unfit

Negligence need not be proved


3. Thing is lost due to negligence of own employees
When is the depositary not liable?

Loss of the thing without negligence of the


third person, if transfer was authorized, and
the person was not manifestly careless or

specific term was stipulated

What are the special requirements in return if it is

unfit
5. Notify the depositor and wait for decision if he will change
the way or manner of deposit

Exception?

locked or sealed?

162

If the delay will cause danger


6. If the thing earns interest, must 1) collect interest as it

becomes due, and 2) take steps as may be necessary to


o

preserve its value and the rights corresponding to it


7. Not to commingle things deposited if so stipulated, even if
they are the same kind/quality

So usually he can commingle?

Yes.
8. Not to make use of the thing, otherwise, liable for damages.

Exceptions?

1. Express permission of depositor

2. Preservation of the thing requires its use

What if the thing is non-consumable and the

depositary has permission to use it?

It becomes commodatum
What if it is money or consumable thing?

It becomes mutuum

But what if the principal purpose is still

depositary who transferred the thing


Who shoulders transportation costs?

The depositor
When must the thing be returned?
o Generally, upon demand or at will, regardless of period
o

deposit
When is the depositary liable even if loss is due to

stipulated
Exceptions?

1. Thing is judicially attached while in depositarys

possession
2. Depositary was notified of the opposition of a third

person to the return or removal of the thing


When can the depositary return the thing deposited at his will

(Requisites)?
o 1. The deposit must be gratuitous
o 2. Justifiable reasons exist
What are the rules on alteration by the depositarys heir (i.e. heir of
the depositary sold the thing deposited)?
o 1. If in GF, the heir may either return the price he received or

himself may be authorized to use it


To whom can return of the thing deposited be made?
o 1. To the depositor, heirs, or successors, or to the person
o

where the original deposit was made


Exception?

When there is malice on the part of the

fortuitous event?

1. Stipulated

2. Used the thing without depositors permission

3. Delays in return

4. Allows others to use it, although the depositary

his guardian/legal representative


Where must it be returned?
o 1. Place agreed upon
o 2. If no stipulation, place where the thing deposited is

Even if it was transferred?

Yes, even if it should not be the same place

safekeeping?
o Then it becomes an irregular
o

Or the depositor himself if he acquires capacity


3. If the depositor was capacitated, but he lost it, then return to

assign his right of action against the buyer in case the price

designated in the contract


2. If the depositor was incapacitated when the deposit was
made (ex. minor):

Return to his guardian or administrator

163

was not yet paid


o 2. If in BF, heir liable for damages and may be sued for estafa
What is the relationship between a bank and depositor?
o The depositor is the creditor, and the bank is the debtor

It is NOT a deposit contract, but a mutuum

So what is the legal effect of failure to pay

given in usufruct, when the usufructuary does not give

deposited money?

Its failure of debtor to pay a loan, and not

proper security for their conservation


C. Deposit of thing pledged when the creditor uses it

breach of trust from depositarys failure to

without authority of the owner or misuses the thing


D. In suits, when provided by the ROC
E. Constituted to guarantee contracts with the

return the SM
When does the obligation of a bank to pay interest
on a deposit cease?

When the operations of the bank are

o
o

completely suspended by the C.B.


What are the obligations of the depositor?
o 1. Pay expenses for preservation of the thing if deposit is
o

gratuitous
2. Pay for losses incurred due to character of the thing

government
2. Made during a calamity
3. By travelers, in hotels and inns

What are the required actions of the depositor?

1. Depositary is informed about the effects

amount of care exercised?

1. Loss or injury is caused by servants,

deposited

What are the exceptions?

1. Depositor was unaware

2. Depositor was not expected to know the

employees, or strangers [if the two requisites

dangerous character of the thing


3. Depositor notified the depositary about it
4. Depositary was aware, even without

depositors advice
Can the depositary retain the thing deposited in pledge
until full payment of what is due him by reason of deposit?

Yes, he may.

Cf. The rule is different from commodatum, which

does not allow retention


When is there necessary deposit?
o 1. In compliance with legal obligation

A. judicial deposit of thing where multiple persons

brought by the guests

2. Guests took precautions for safekeeping


When is the hotelkeeper liable, regardless of

dispute possession of such


B. deposit with bank or public institution of public

concur above]
2. Loss is caused by robber or thief acting

without irresistible force


When is the hotelkeeper not liable?

1. Loss is caused by force majeure or

theft/robbery attended by irresistible force


2. Loss is due to acts of guests, his family,

servants/visitors
3. Loss due to character of the things

brought into the hotel


Can a hotelkeeper stipulate absolute exemption

from liability?

No. This is void.


Can the hotelkeeper retain the things of guests as
security for unpaid lodging expenses and

bonds/instruments of credit [payable to order/bearer]

supplies?

164

Yes.
See the usual rule on deposits, with which

Differentiate insurer of debtors insolvency (G) and insurer of


the debt:
o 1. Surety promises to pay the principals debt if the principal will

this is consistent.

Contra commodatum cant do this.


Judicial deposit: see above table for distinction vis--vis extra-judicial

not pay.

Must a surety be notified of the principals default

deposits

first?

Guaranty and Suretyship

No. In fact, no prior demand is needed;


direct suit against the principal is the demand

Distinguish between guaranty and suretyship

in itself.
Is there need to demand the principal to pay first?

No, especially where demand would be

Guaranty

Suretyship

G is secondarily liable

S is primarily liable and not entitled

useless. A suretyship is a direct contract to


pay the debt of another. The surety is

G binds himself to pay only when

to benefit of excussion
S assumes liability as a regular party

absolutely liable as soon as default is made,

principal cannot pay

to the undertaking and promises to

without need for demand from the principal

G is insurer of debtors insolvency


Usually embodied in a separate

pay if the principal does not pay


S is an insurer of the debt
Usually embodied in the same

agreement before or after the

instrument as the principal

principal obligation

cannot pay. So this requires due diligence and exhaustion of

obligation; thus, the surety is a party

Can Y Corp. proceed against Z?


o Yes. The suspension only applies to X Corp, and as surety,

Is there need for a separate consideration which the surety must

there is no need to exhaust X corp.s property before going

receive?
o No. The surety is bound by the same consideration that makes

remedies against the debtor.


X Corp is liable to Y Corp for P5M. Z is X corp.s surety. X Corp
defaulted and was placed in a state of suspension of payments.

to the contract

or notice of default.
2. Guarantor promises to pay the principals debt if the principal

the contract effective between the primary parties.


If there is doubt, what is presumed, guaranty or suretyship?
o Guaranty. Suretyship is never presumed.
o Is an unconditional guaranty a suretyship?

No. It just means that unlike a conditional guaranty, it

against Z.
H and W are spouses. H signed a suretyship agreement to cover
for the liabilities of XYZ corp. Can the conjugal partnership be
made liable when XYZ defaults?
o No. This act did not redound to the benefit of the partnership

needs no other extraneous event to trigger the

guarantors liability. But the principle remains that the


principal must first default.

165

and is thus borne alone by H.


What is the nature and extent of guaranty?
o 1. Guarantee is generally gratuitous

What is the exception?

Contrary stipulation
2. Accessory contract

What if the principal obligation is void?

The guaranty cannot exist.


3. Guarantors liability cannot exceed the principal obligation

But does this provision include interest and other


costs?

No. The liability for interest and other costs


does not stem from contract but from the
default. So the guarantor can technically pay

[nature of obligation]
4. Suretyship
5. He is a judicial bondsman and sub-surety
6. Pledge or mortgage has been given by the G as

special security
[debtor clearly insolvent]
7. Debtor is insolvent
8. Presumed that execution of debtors property will

not satisfy the obligation


[absconding]
9. G absconded or cannot be sued in the Philippines

Unless he left a manager/representative


2. Compromise between the creditor and principal can

more than the obligation secured.


o 4. Doubt must be resolved in favor of the guarantor or surety

What is the exception?

Compensated sureties
What are the qualifications of a guarantor?
o 1. Possesses integrity
o 2. Capacity to bind himself
o 3. Sufficient property to answer for obligation
o What if the creditor required and stipulated a specific

benefit but not prejudice the guarantor, otherwise, he would be


o

released
3. If there are several guarantors and only one debtor, the
guarantors are entitled to benefit of division. Their liability is
joint.

person should be the guarantor, can there be


substitution?

No. The selection of the guarantor is part of the terms

place
o

of agreement.
What are the effects of guaranty between the guarantor and
creditor?
o 1. Guarantor has right to benefit of excussion
o Exceptions?

[waiver]

1. G expressly renounced excussion

2. G fails to set-up benefit of excussion and fails to

A. A guarantor is convicted of crime

involving dishonesty
o B. Becomes insolvent
When can a guarantor who paid the entire debt
seek reimbursement from co-guarantors?

1. He paid by virtue of judicial demand

2. AND because the principal debtor was

point out to the creditor available property of the

Exceptions?

1. Solidarity

2. Any of the circumstances in 2057 taking

debtor in the Philippines


3. G fails to interpose it as defense before judgment is

insolvent
What is a continuing guaranty or suretyship?

One that is constituted to cover even future debts, the


amount of which is not yet known.

rendered against him

166

What are the effects of guaranty between the debtor and


guarantor?
o A. Guarantor who pays for a debtor must be indemnified by the
latter.

What does the indemnity cover?

1. Amount of debt

2. Legal interest from the time payment was

abscond
[Insolvency]
3. Insolvency of debtor
4. Debtor is in imminent danger of insolvency
[Expiration of period, etc.]
5. Debtor bound himself to relieve him from the

debtor was benefited.


2. Guaranty did not intend to be paid back

the creditor who has accepted it

3. Waiver
Can the guarantor demand more than what he has

enforce the indemnity


C. Guarantor can proceed (see below what proceed means)

payment has expired


7. After lapse of 10 years when the principal obligation

period longer than 10 years


In all these cases under #3, what are the options of the
mean)?

1. Obtain release from the guaranty

2. Demand security to protect him against creditors

acceptance is needed
o In any case, payment is valid as to

guarantor (what does proceed against the debtor

(donation) although in this case, debtors

expired
6. Debt has become demandable because period for

that it cannot be extinguished except for a

the guarantor can only recover to extent

paid?

No.
B. Guarantor has right to be subrogated against the debtor to

has no fixed period for maturity

Unless the nature of the obligation is such

against the will of the debtor. In this case,

guaranty within a specific period, and this period has

demanded of him

4. Damages, if due
What are the exceptions to indemnity rule?

1. Guaranty constituted without knowledge or

2. Reasonable grounds to fear the debtor intends to

made known to the debtor


3. Expenses incurred by guarantor after
notifying debtor that payment has been

claims or insolvency of the debtor


How is guaranty extinguished?
o 1. When the principal obligation is terminated (the usual ways
see oblicon)

Also, material alterations (where there is additional


o

obligation, new burden, etc.)


2. Release of one guarantor by the creditor

What is the effect if it is without the consent of the


other guarantors?

Then they benefit to the extent of the share

against debtor even before payment when:

[Just causes for guarantor]

1. He is sued for payment

of the released guarantor

167

3. Extension of term granted by the creditor to the debtor

o
o

without guarantors consent

What if theres a continuing guaranty allowing for

2. Accessory contract
3. Unilateral contract

Because the obligation solely rests on the part of the


creditor: to return the thing upon fulfillment of the

extensions?

Then extension of term does not extinguish

the guaranty.
Does the creditors neglect to immediately sue the

principal constitute an extension of term?

No. There has to be a separate agreement

for a definite period without the consent of


o

the guarantor.
4. If there can be no subrogation because of the fault of the

principal obligation
X borrowed 400K from Y, pledging shares of stock worth 800K to
value of the stocks to 100K. Can Y demand X surrender other
shares worth 700K?
o No. There is no showing the fall in value was due to Xs fault.

a mortgage
What if the guarantors are solidary?

Same effect.

Does this provision apply to sureties?

No. (Zobel v. CA)


What about legal and judicial bonds?
o They are not entitled to the benefit of excussion because they

Likewise, there was no showing Y was deceived as to the

substance or quality of the shares, where would have the right


to claim another thing in their place or immediate payment of
o

are guarantors but sureties whose liability is primary and

solidary.
Pledge

What is a pledge?
o It is a contract by virtue of which the debtor delivers to the
creditor or third person a movable or document evincing

default?

No. This is pactum commissorium


4. Subsidiary contract

Obligation does not arise until fulfillment of the

secure the obligation. An economic crisis occurred, plunging the

creditor

What is an example of this?

When the creditor releases or fails to register

principal obligation
Can the pledgee keep the thing for himself after

the obligation.
And more importantly, the right of a pledgee is to just sell the

pledged share at a public sale.


May the pledge secure future advancements that the pledgor may
procure from the pledge?
o Yes.
What are the essential requirements of pledge?
o 1. Constituted to secure fulfillment of principal obligation
o 2. Pledgor or mortgagor is absolute owner of the thing

What if the thing is conjugal property of spouses


and only one acted as pledgor?

The pledge is only over of the property

incorporeal rights
o Purpose is to secure a principal obligation
Characteristics of pledge?
o 1. Real contract thing must be delivered

168

What if the property is covered by certificate of

title (this actually applies more to REM, not

destroyed, the pledgor can substitute it with a thing of

pledge)?

The innocent pledgee or mortgagee for value


can rely on the certificate, if there is no

reason to further inquire, and is protected


3. Person has free disposal of the property, or legally

authorized to do so
4. Thing pledged is delivered to the creditor or third person by

REM

Movable property
Delivery of object pledged
Pledge not valid against third

Immovable property
Delivery of the thing NOT necessary
REM not valid against third persons

persons unless description of the

if not registered

thing pledged + date of pledge is in

Who has ownership of the thing pledged?


o Still the pledgor
o Can he sell the thing pledged?

Yes, as long as the pledgee assents


o Does this sale extinguish the pledge?

No, it survives and follows the thing, even if ownership


o

delay, or violation of terms of contract


Is a pledgee authorized to transfer possession of the thing to

o
o

to do this.
Can the pledgee use the thing pledged?

None. He needs authority, again.


X borrowed P10K from Y, payable Dec. 1. X pledged his
car to Y, allowing Y to use it by express stipulation. X
wanted to pay his debt on June 1, demanding that Y
accept the money and return the car. Can X compel Y to

is transferred
What happens then?

1. The pledgee still possesses the thing until the

has been extinguished too?

No.
What is the obligation of the pledgee?
o Take care of the thing pledged with the diligence of a GFF
o When is he entitled to reimbursement?

Expenses incurred for preservation


o When is he liable?

Loss or deterioration by reason of fraud, negligence,

another?
o No. Remember, hes not the owner. He has to be authorized

public instrument

the same kind and quality


What presumption arises upon return of the thing
pledged?

That the pledge has been extinguished

Is there a presumption that the main obligation

common agreement
Distinguish pledge from REM:

Pledge

What is the exception?

If the thing is in danger of being impaired or

accept?

No. The debt was due Dec. 1. When a period is

obligation is paid
2. The pledgee may still sell the thing in case of

stipulated, it is presumed to be for the benefit of both


the debtor and creditor. In fact here, Y is authorized

default
Can the debtor demand its return before the debt is paid?
o No, possession is the security of the creditor.

to use the car, which is the presumed benefit. X


cannot pre-pay.

169

When can the pledgor request the thing pledged be deposited

judicially or extra-judicially?
o 1. Creditor used the thing without authority
o 2. Creditor misused the thing
o 3. Thing is in danger of being lost or impaired due to

negligence or willful act of the pledgee


What is the effect of sale of the thing pledged upon default of the

o
o

entitled to excess
2. If the price is less than the amount due, the creditor is not

Real Estate Mortgage (REM)

security immovable property or real rights in case the principal

demandable

(Take note of Recto Law, however)


What are examples of legal pledges under the law?
o 1. Possessor in GF exercising right of retention for necessary
o
o
o

the capital and for extraordinary expenses


3. Mechanics lien
4. Agent exercising right of retention for necessary expenses

What is a REM?
o A contract where the debtor secures to the creditor the
fulfillment of a principal obligation, by subjecting to such

entitled to recover the deficiency


Differentiate from CM:

In CM, the excess is returned, and the deficiency is

and useful expenses


2. Usufructuary exercising right of retention for taxes paid on

obligation is not complied with.


What are the characteristics of a REM?
o 1. Accessory and subsidiary contract
o 2. Unilateral because the only obligation is for the creditor to
o

o
o
o

for execution of agency and for damages which execution of


o

agency caused him


5. Bailee exercising right of retention for damage caused by

free the property from encumbrance upon payment


3. Mortgagor retains possession of the property in general

Remember: pactum non alienando is void (prohibition


for the mortgagor to dispose the property)
4. Over immovable or alienable real rights over immovables
5. REM must appear in a public document recorded in the ROP

If not registered, just binding between the parties


6. REM is a real right that attaches to the property

So the REM is both a real right and real property by


itself
7. Mortgagor must be the absolute owner of the property,
otherwise, it is void

flaws in the thing loaned where the bailor knew about it but did
o

lodging
How does the pledgee/creditor exercise his remedy?

But must first demand payment of the amount due

Have the thing retained sold at public auction, within 1


month after demand

debtor?
o The principal obligation is extinguished whether the price of
sale is more or less than the amount due
1. If the price is more than the amount due, the debtor is not

7. Hotel-keeper, over guests things for unpaid board and

not inform the bailee


6. Depository exercising right of retention for necessary
expenses if deposit is gratuitous or for fortuitous damages
caused him by the character of the thing deposited

170

REM

Pacto de retro sale

Accessory contract
No transfer of title
No transfer of possession

Principal contract
Conditional title
Conditional transfer of possession

Creditor has no right to fruits


Upon default, creditor is not the

Vendee entitled to fruits


Upon consolidation, vendee is the

owner (no pactum commissorium)

owner

period after the judgment becomes final OR after the


o

foreclosure sale but before confirmation.


There is redemption, however, if the mortgagee is a banking
institution (1 year for natural person mortgagors and 3

months/before registration whichever comes first for juridical

What is the effect of REM?


o It subsists until after payment of obligation.
o The right of the mortgagee in case of non-payment is

person mortgagors)
2. Extrajudicial foreclosure under Act 3135.
o When does this apply?

When the mortgagee is given specific power or

foreclosure of the REM. Pactum commissorium is against

public policy.
What is the extent of the mortgage?
o REM is not limited to the property itself, but also its accessions,

improvements, growing fruits, rents, income, proceeds of


insurance in case it perishes, or expropriation value if

condemned.
o EXCEPT: contrary stipulation.
Can the mortgage be alienated or assigned?
o Yes and the assignee or transferee is entitled to foreclose the
mortgage in case of non-payment of the obligation. If the

express authority to foreclose.

If there is none, there can be no EJ foreclosure.


Where must auction be conducted?

Province where the property is found


What is the requirement of notice?

1. Posting of notice of sale in 3 public places therein

2. Publication in newspaper of GC once a week for 3

transferee becomes the owner of the property this is a void

pactum commissorium.
What if the mortgagor transfers the property?
o 1. It does not relieve him from his obligation to pay the debt to
o

the creditor, in the absence of novation.


2. Creditor must make demand against the debtor. If the latter

cannot pay, then the creditor can demand payment of the credit

consecutive weeks

If the sale is postponed, republish.


Is personal notice to the mortgagor required?

No. Unless, of course, the contract provides


for it.
Can these notice requirements be waived?

No, its for the benefit of the public, not the

parties.
How long does the mortgagor have to redeem?

Within 1 year from date of sale. If the land is


registered property, then from registration of certificate

from the possessor of the property (transferee), and foreclose


thereafter if there is non-payment.
1. Judicial foreclosure under Rule 68 of the ROC.
o Is there redemption here?

No, just equity of redemption where the mortgagor is

of sale.
But if the mortgagor is a juridical person and the
mortgagee is a bank, quasi-bank, or trust entity, then
redemption is only within 3 months from foreclosure or
registration of certificate of sale with ROD, whichever

given the chance to pay the debt within the 90 days

is first.

171

What is required for a valid redemption?

1. Within proper period

2. Payment of purchase price of property plus 1%

court must issue a writ of possession. It is a matter of course

interest per month

Taxes with same 1% interest if paid by

purchaser
3. Written notice of redemption served on officer who

made the sale, and duplicate filed with ROD


What if the purchaser contends the right of the redeeming
his heirs that is redeeming)?

The sheriff cannot usurp judicial functions. He cannot

absolute owner already.


Can an ex-parte writ of possession be enforced against a third
not in privity with the mortgagor?
o No, it cannot. Under Art. 433 of the NCC, one who claims to

parties.
Does the mortgagee have a right to recover deficiency post-

be owner of a property possessed by another must bring

foreclosure?
o Yes, he may. The action to recover the deficiency prescribes

appropriate judicial action in this case, it must be an action

after 10 years from right of action.


If a mortgagor dies, what are the 3 mutually exclusive options of

o
o

if any as an ordinary claim against the estate


3. Rely on the mortgage exclusively (e.g. EJ foreclosure),

proceedings to issue a writ of possession are ex parte.


What are the remedies of such third party claimants to property
involved in a foreclosure sale, when the third party was not part of
the foreclosure and there is no privity?
o Two options: a) terceria where he serves upon the sheriff an
affidavit of his title and a copy is given to the judgment

without right to file claim for deficiency


What if the mortgagor files a collection suit?
o It bars foreclosure of mortgage. The creditor cannot avail both

creditors; in this case, the officer is not bound to keep the


property; b) independent separate action, to recover ownership
and possession of the contested property (Rule 39, Sec. 16 of

remedies because it is in essence a splitting of his cause of

for ejectment.
To rule otherwise would unduly prejudice the third person who
did not have a chance to oppose the claim, since the

the mortgagee?
o 1. Waive mortgage and pursue claim against estate as an
ordinary claim
2. Judicial foreclosure of the mortgage, and recover deficiency,

end of the redemption period.


The bond is no longer necessary in this case because he is the

party who is in actual possession of the foreclosed property and is

decide, so he must advice judicial redress to the

and not a matter of discretion.


Since, its ex parte, any questions regarding the validity of the

sale, the mortgage, etc. must be tried in separate proceedings.


When else may the purchaser file for a writ of possession?
o When ownership has been consolidated upon himself, at the
o

person to do so (e.g. it was not the mortgagor but one of

He files a bond. Upon approval of the bond thereafter, the

action into two.


What is the nature of a writ of possession?
o The purchaser may petition for a writ of possession within the

the ROC)
Is a purchaser in a foreclosure sale who hasnt turned over the
excess of the proceeds of sale to the mortgagor entitled to a writ of
possession?

redemption period by filing an ex parte motion under oath.

172

o In a case, the SC ruled that hes not entitled.


Can a REM cover future loans or advancements?
o Yes, if stipulated by the parties in the contract.

expenses on the property

Where does he take the funds?

From the fruits of the property

Failure to do so damages in favor of debtor

There can be contrary stipulation as re: payment of

Antichresis

What is a contract of antichresis?


o A contract where the creditor acquires right to receive the fruits
of an immovable of his debtor, with the obligation to apply the

proceeds to the payment of interest (if there is), and then to the
o

1. Pay taxes and charges of the estate and necessary

principal of the credit


What if the loan does not earn interest?

There can still be a contract of antichresis. The

taxes and charges


o 2. Apply fruits to the interest, and then the principal of the debt
What are the creditors remedies in case of default?
o 1. Bring action for specific performance
o 2. Petition for sale of real property in foreclosure sale under
Rule 68 of the ROC, or if the parties agreed upon it, extrajudicial foreclosure under Act 3135

payments are applied directly to the principal, then.


o Again, take note that pactum commissorium is void.
What are its characteristics?
o 1. Accessory contract
o 2. Formal contract because the amount of the principal and

Antichresis

Pledge

Real property
Formal contract

Personal property
Real contract

Antichresis

REM

Property delivered to creditor


Creditor acquires only the right to

Debtor usually retains the property


No right over fruits, but it is a real

receive fruits of the property. It is

right that attaches to the property

NOT a real right.


Creditor pays taxes and charges

Creditor has no such obligation

unless stipulated otherwise


Creditor given possession of the

Mortgagee has no such obligation

of the interest must be in writing or else the antichresis contract

is void
Is delivery of the property a requisite for the contracts validity (i.e.
is it a real contract)?
o NO. The delivery is only to allow the creditor to receive the

fruits and apply them, and not to make the contract valid.
o But note, it is a formal contract.
What is the requirement of appraisal?
o The fruits of the immovable must be appraised at their actual
market value at the time of application (to know how much is

deducted).
Can the debtor demand the return of the property before the debt

is totally paid?
o No. It stands as security.
What are the obligations of the antichretic creditor?

property must apply the fruits to the


interest then the principal

Chattel Mortgage

173

What are the characteristics of a CM contract?

o
o

1. Accessory contract
2. Formal, because it must be registered in the CM Registry to

applies

be valid

What if its not registered?

Its not null and void, but it only binds the

parties.
3. Unilateral only the creditor has obligation: to free the thing

from encumbrance upon fulfillment of the obligation


4. It must be constituted by the absolute owner of the thing with

What are the offenses involving CM?


o 1. Knowingly removing personal property covered by CM to any
o

of the mortgagee written on the back of the mortgage and

free disposal of the property


X went abroad and left his car with its certificate of registration

with Y. Y falsified Xs signature and sold it to Z. Z, in order to pay


for the amount, executed a CM over the car in favor of a savings
and loan association which lent money to him. Z failed to pay and

the car was sold at a public auction where the SLA won. X
returned to the country and sought to recover possession of the
car. Can he?
o Yes. A CM can only be constituted by the absolute owner with
no title over the car. Since X was unlawfully deprived of

o
o

possession of a movable, he can recover possession.


However, since Z purchased the car from a public sale, X must
reimburse the SLA for the price at which it was bought for.

CM

Pledge

Delivery is not necessary (to get it,

Delivery is necessary

recorded in CM Registry
What if the mortgagor thereafter pays the debt anyway or

informs the mortgagee post-sale?

He is still criminally liable under the RPC.


o Is the sale valid?

Yes, but the mortgagor is liable criminally.


What is valid subject matter of CM?
o 1. Shares of stock in corporation
o 2. Interest in business
o 3. Machinery and house of mixed materials treated by the

free disposal thereof, which Z was not since the seller, Y, had

other province or city without written consent of the mortgagee


2. Selling or pledging such personal property without consent

parties as personal property

And no third party will be prejudiced thereby


4. Vessels, if the mortgage is recorded with MARINA
5. Motor vehicles, if mortgage is recorded with both the LTO

and the CM Registry


o 6. House intended to be demolished
o 7. Growing crops and large cattle
What is the rule when the parties constitute a CM over a building?
o In general, this cannot be done, but the parties are estopped
from questioning it. Thus, the CM is valid. But if it will be

one can file for replevin)


Registration in CM Registry is

Registration in ROP not necessary

foreclosed, follow procedure for foreclosure of REM, because

necessary to be valid beyond the

for validity

third parties are not bound by the constitution of a CM over

parties
If foreclosed, excess goes to debtor

If sold, excess and deficiency are not

and deficiency can be recovered by

recoverable in general

immovables.
What if the property is found in a place other than where the
mortgagor resides?

the creditor. EXCEPT: if Recto Law

174

Register it in both registers in both provinces. Otherwise, the

CM is void as to third parties.


But again, the CM is valid as between the parties this is

always the rule if there is some infirmity: valid between the

parties, but not against the world.


What is the effect of registration?
o Makes the CM effective against third parties. It creates a

o
o

lien/real right which follows the chattel wherever.


What if the mortgage is assigned to another?
o 1. No need to record the assignment in the registry
o 2. The assignee is subrogated to the rights of the transferee to

discharge the obligation


Is there right of redemption after sale?

No, there is none, unlike in a REM.


Can the mortgagee recover deficiency post-sale?

Yes, unlike in a pledge.

Action accrues within 10 years from sale.

What is the exception?

Recto Law, if it is a sale of personal property

in installments.
So if it is foreclosed, no deficiency. But
under the Recto Law, after specific
performance which leads to execution sale,

purpose of securing the obligation specified therein

there can be recovery of deficiency because

and for no other purpose


and that it is a just and valid obligation and not one

it is not a foreclosure.

entered for fraud


If it is not appended, same rule as above: it cannot bind third

o
o

persons without notice or subsequent creditors.


In effect: an Affidavit of GF gives the CM preferred status.
What is the implication of the Affidavit of GF which has

Quasi-contracts

When does negotiorum gestio arise?


o When one voluntarily takes charge of the management of
business or property of another, without any power from the

then become doctrinal in CMs?

Because it only secures the obligation specified, a CM

purpose of the sale


N.B. the 30 day period is a grace period to help the mortgagor

the CM
What is an Affidavit of GF?
o It is an oath in a contract of CM that the parties:

severally swear that the mortgage is made for the

2. Posting of public notice of time, place, and

cannot cover future debts, unlike a REM.


What are the options in foreclosure?
o 1. Public sale
o 2. Private sale needs express stipulation in the contract

EXCEPT: a) fraud or b) duress


o When can a CM be foreclosed?

After 30 days from time that the condition is broken

After there is 10 day notice:

1. Given to the mortgagor

latter
What is he obliged to do?

Continue such management until termination of the


affair and its incidents, or the owner is in a position to

175

substitute him
o When does negotiorum not arise?

1. Property or business has been abandoned

2. Manager has been tacitly authorized


What are the obligations of the officious manager?
o 1. Perform duties with diligence of GFF
o 2. Liable for damages through fault or negligence

o
o

3. Liable for acts of a delegate, if he appoints one


4. Liable for fortuitous event if:

A. He undertakes risky operations

B. Prefers own interest to that of the owner

C. Fails to return the property or business upon

demand of owner
D. Assumption of management in BF
E. He is manifestly unfit to carry on the management,

it was given through mistake


What is the obligation of the recipient?
o He must return it.
o What if he accepted it in BF?

1. He must pay legal interest if a sum of money is

unless done to save the property or business from

imminent danger
F. His intervention prevented a more competent

manager from taking over, unless done to save the

property or business from imminent danger


o 5. Liable for contracts entered into with third persons, unless:

A. owner ratified

B. the contract refers to things pertaining to the owner


What are the obligations of the owner?
o If he derived benefit or the property was saved from imminent

has benefited him


2. If he already alienated it, return the price or assign

the action to collect the sum


3. Exempt from returning/restoring it if in GF, he

Concurrence and Preference of Credits

have suffered
If he did not derive benefit:

Still liable as above if: a) the manager acted in GF,


and b) property or business is intact and ready to be

been received if it bears fruits

3. Answerable for loss or impairment


What if he accepted it in GF?

1. Answerable for loss or impairment only so far as it

prescribe, gave up pledges, or cancelled guaranties

useful expenses, and damages the manager may

involved
2. Liable for fruits received or fruits that should have

already destroyed the document, allowed action to

danger:

1. Liable for obligations incurred in his interest

2. Reimburse officious manager for necessary and

Something is received when there is no right to demand it and

returned to the owner


When does negotiorum end?
o 1. Owner repudiates it or ends it
o 2. Manager withdraws from management
o 3. Death, civil interdiction, insanity, or insolvency of owner or

What are properties exempt from liability for obligations?


o Survival necessities
o 1. Family Home, except for:

A. non-payment of taxes

B. debts prior to constitution of FH

C. debts secured by mortgage on premises of the FH

D. debts due to laborer, mechanics, architects, etc. for


o
o
o
o

manager
When does solutio indebiti arise?

176

the construction of the FH


2. Clothing and necessaries of the family
3. Furniture and household things not exceeding 1K
4. Provisions for family for 3 months
Money received for support

1. Right to receive support and things procured from such

o
o
o

support
2. Earnings within the month to support the family
3. Proceeds of life insurance
4. Right to receive legal support from government or those

exists have been wrongfully taken?

The creditor can demand them from any possessor,

procured from such


o Employment/trade necessities
o 1. Tools and implements for trade/employment
o 2. 2 beasts of burden used in occupation
o 3. Professional libraries
o 4. One fishing boat and net for fishermen
o Specially enumerated
o 1. Lettered gravestones
o 2. Copyrights and other properties exempted by law
o 3. Property in custodia legis, and of public dominion
What are preferred credits as to specific movable property? (2241)
o 1. Taxes on the movable
o 2. Malversation by public officials of such movables
o 3. Vendors lien

As long as debtor still possesses it

if resold, on the proceeds of sale


o 4. Credits secured by pledge, chattel mortgage
o 5. Mechanics or repairmans lien, on the thing
o 6. Laborers wages, on the thing
o 7. Salvage, on the goods saved
o 8. Tenancy, on the share of fruits/harvest
o 9. Carriers lien, on the goods carries
o 10. Hotels lien

On movables belonging to guests, but not for money


o
o

loaned to guests
11. Crop loan, over the fruits harvested
12. Rentals for one year, on the movables in the property

leased
13. Claim of depositor, on goods wrongfully sold by the

For these cases, what if he movables on which the lien

within 30 days from unlawful seizure


What are preferred credits over specific immovable property?
(2242)
o
o
o
o
o
o

1. Taxes, on the immovable


2. Vendors lien, for sale of real property
3. Contractors lien, over the property
4. Lien of material-men, when material was used for property
5. Mortgages recorded in ROP
6. Expenses of preservation, when the law authorizes

o
o
o

reimbursement (see property law and oblicon)


7. Recorded attachments, by virtue of judicial order
8. Warranty in partition of co-heirs of property
9. Conditional donations, on the immovable donated as to

pecuniary charges and other conditions


10. Premiums for 2 years in favor of insurers, on the insured

property
What is the order of preference as to other properties of the
debtor? (2244)
o 1. Funeral expenses
o 2. Wages of employees for one year
o 3. Expenses of last illness
o 4. Workmens compensation
o 5. Support for one year
o 6. Support during insolvency
o 7. Fines in crimes
o 8. Legal expenses for administration of insolvents estate
o 9. Taxes other than those over specific property

National government first

Then to province

Then to city or municipality


o 10. Torts

depositary

177

o
o

property of dates of instruments or judgments


What is the order of preference of credits?
o 1. Credits which enjoy preference as to specific movables
o

o
o
o

11. Donations
12. Credits in public instrument or covered by final judgment

Have preference among themselves in order of

When does the preference of workers to wages apply?


o When there is a declaration of bankruptcy or judicial liquidation
of the company
What happens when there is a distressed corporation that asks for
rehabilitation and suspension of payments?
o Preferred creditors cannot assert preference anymore, and

exclude all others to the extent of the value of the movable


2. If there are two or more credits as to the same movable,

stand in equal footing with other creditors. This allows the

claims are pro rata (meaning, the enumeration is not in order)

Except for payment of taxes due the State; this always

might hinder rescue of the company.

receiver to exercise discretion free from legal interference that

goes first
3. APPLY SAME RULES TO SPECIFIC IMMOVABLES
4. For enumeration in 2244, follow the order
5. For common credits, no preference; just apply property pro

Insolvency Law

What is the difference between suspension of payments and


insolvency?
o In suspension, purpose is to delay payments; in insolvency,

rata regardless of dates


X purchased an aircraft in cash, and had outstanding balance of
P500K. He incurred indebtedness of P300K for repairs with a

creditors receive less than their credits (or where there are

repair company over the aircraft. He borrowed P1M from a bank


for additional capital and constituted a CM on the aircraft. During
a flight, a passenger was injured and was awarded P200K in

damages. The aircraft was sold for 1M. The following claims thus
exist
o
o
o
o
o

purpose is to discharge debtor from debts


In suspension, amount of debt is not changed; in insolvency,

preferences, some may not receive at all)

N.B. correlate with concurrence and preference


What is suspension of payments?
o It applies to situations where a debtor has properties, but not
enough to pay debts as they fall due. He is still solvent, but not

A. Vendors lien on movable


B. Repairmans lien on movable
C. CM lien on bank loan
D. Tort claim
What is the order of preference?

C CM lien on bank loan prevails over the tort claim.

The liens of the vendor and repairman do not exist

liquid.
What is the effect of suspension of payments?
o 1. No disposition of property of debtor except in ordinary
o
o

anymore because the property has been sold and


thus the debtor is not in possession of the thing. The

claims become ordinary claims that are defeated by


the CM lien of the bank.

course of business
2. No payment except in ordinary course of business
3. Upon request to court, all pending executions against debtor

shall be suspended

Except those covered by mortgage


Which creditors are not affected by suspension of payments?
o 1. Those with claims within 60 days immediately preceding
filing of petition:

178

A. claims for personal labor

B. claims for maintenance

C. expenses of last illness of debtor

D. Funeral of spouse or children of debtor


o 2. Those possessing legal or contractual mortgages
What is the procedure to petition for suspension of payments?
o 1. File petition in RTC where debtor resides 6 months prior.
o 2. Along with the petition, file:

A. Verified list of creditors

B. Debts and liabilities

C. Statement of assets and liabilities

D. Proposed agreement/schedule
o 3. Court issues order calling all creditors to a meeting (2-8

insolvency proceedings because he will

pursue the mortgage lien


What if there is an existing claim being filed in
court?

The case will only determine how much is

debtor
5. Creditors approve the proposition

Need double majority vote to approve:

A. 2/3 of creditors

B. 2/3 of 60% of the liabilities


6. Objections can be made within 10 days of meeting

A. Defects in call for meeting or the meeting itself

B. Fraudulent connivance between one or some

due the creditor, but he has to join the other

creditors when he takes what is due him


What attachments and judgments shall be set
aside?

Those levied or secured within 30 days


before insolvency proceeding (again, there is

creditors and the debtor to vote in favor of the

property
What if someone has a mortgage over the
property?

File a motion to be excluded from the

weeks from order)

Publication and notice


4. Meeting of creditors

Quorum: represent at least 60% of liabilities of the

B. verified inventory of properties


2. Court issues order of adjudication

Publication and service of order to creditors

Is hearing needed?

No, not in voluntary insolvency


3. Meeting of all creditors to elect assignee of debtors property

Clerk of court conveys property to him

What is the effect?

The assignee gets legal title over the

agreement
C. Fraudulent conveyance of claims to obtain a

badge of fraud)
SAME RULE for dispositions within 30 days
before insolvency proceedings, unless there

majority
o 7. Court issues order directing the agreement to be carried out
What is the procedure for voluntary insolvency?
o 1. Debtor files petition that he is insolvent and cannot pay debts

o
o

is value received in GF for the property


4. Liquidation of assets and payment of debts
5. Composition

Offer of terms of composition is made after filing of


schedule of liabilities and creditors

in full, accompanied by:

A. verified schedule of liabilities

179

The offer must be accepted in writing by the same

double majority of creditors


It is made after depositing the consideration to be paid

and the cost of proceedings

The court must approve the terms of composition


What is the effect?

The debtor is discharged from debts, except if

PRESCRIPTION

corporation
o What are available remedies?

Objection

Appeal to SC
What is the procedure for involuntary insolvency?
o 1. Three or more creditors file petition

When should they have been creditors?

More than 30 days prior to petition, to avoid

o
o
o
o
o

What are available remedies?

Objection

Appeal to SC

What are the kinds of prescription?


o 1. Acquisitive

What are the requisites of acquisitive


prescription?

1. Capacity to acquire by prescription

2. Thing is capable of acquisition by

fraudulent conveyance

The creditors must be residents of the Philippines


2. Court issues order requiring debtor to show cause why he
must not be declared insolvent

Debtor files MTD or answer


3. Hearing of the case

Issuance of order declaring debtor insolvent

Then he will be required to submit schedule of assets

and liabilities

Publication and service of order


(N.B. procedure from this point is the same as voluntary
insolvency including commentaries)
4. Meeting of all creditors to elect assignee of debtors property

Clerk of court conveys property to him


5. Liquidation of assets and payment of debts
6. Composition
What is the effect?

The debtor is discharged from debts, except if

corporation

180

prescription
3. Possession of the thing under certain

conditions

4. Lapse of required time under law


o 2. Extinctive or statute of limitations
Who may acquire by prescription?
o 1. Person capable of acquiring property through other modes
o 2. State
o 3. Minors through guardians or personally
Against whom may prescription run?
o 1. Incapacitated person/minors with guardians
o 2. Absentees with administrators
o 3. Persons abroad with administrators
o 4. Juridical persons except the state as to non-patrimonial
property
When does prescription not run?
o 1. Between husband and wife even if there is CSP or JSP
o 2. Between parents and children, during minority/insanity
o 3. Between guardian and ward, during guardianship
Which are subject to prescription?

All things within the commerce of men private property and

patrimonial property of State


What are not subject to prescription?

1. Public domain

2. Intransmissible rights

3. Movables possessed through crime

4. Registered land
What is the rule on renunciation of prescription?
o Person may renounce prescription already obtained, but not
o

right to prescribe in the future


How is renunciation done?

Express or tacit. Tacit is when acts imply

abandonment of the right acquired


Who may impugn renunciation?

Creditors and other persons interested in making

extraordinary prescription?
o Reasonable belief by the person that he is the owner and could

prescription effective notwithstanding renunciation


X borrowed money from Y on November 29, 1933 as

validly transmit ownership


o Must exist through the entire period required for prescription
What does just title mean?
o Titulo Colorado where there was a mode of transferring
ownership but something is wrong because the grantor was not

evidenced by a PN. Y said that he waives prescription and

the owner

Had the grantor been the owner, the mode would

may still collect even after the 10 year period under law. X
failed to pay after repeated demands so X sued him on
January 7, 1953. Can X collect?

Yes. What happened here was not an actual waiver

of prescription (which cannot be done) but since there

have transferred ownership


How does this differ from titulo putative?

Here, there was no mode of acquiring


ownership, although the person believes he

was a 10 year grace period, the period only started


running from November 29, 1943. So the 10 year

period ends on November 29, 1953. January 7, 1953

10 years immovables

4. In concept of owner

5. Public, peaceful, uninterrupted


o Extra-ordinary

1. Just title

2. Within time fixed by law

8 years movables

30 years immovables

3. In concept of owner

4. Public, peaceful, uninterrupted


What is the concept of good faith that differentiates ordinary from

is within the period.


What are the kinds of acquisitive prescription and their requisites?
o Ordinary

1. Possession in GF

2. Just title

3. Within time fixed by law

4 years movables

has obtained title


What is in concept of owner?
o It not out of mere tolerance of the owner, but is actually
adverse to the latter. It is a claim that the acquirer owns the

181

property.
What is public, peaceful, uninterrupted?
o Known to the owner of the thing
o Not acquired through violence
o And continuous enjoyment of the property
o When is there an interruption?

1. If natural

If through any cause, possession ceases for


more than 1 year.

If 1 year or less, as if no interruption.


2. If civil (judicial summons)

interrupts, by default

Exceptions?
o 1. Lack of legal solemnities
o 2. Plaintiff desists from complaint,
o

law
4. action upon judgment
1. Action to recover movables (count

6 years

from loss of possession)


1. action upon oral contract

5 years
4 years

2. action upon quasi-contract


Where period not fixed by law
1. action upon injury to rights of
plaintiff

or allows lapse of proceedings


3. Possessor is absolved from

1 year

complaint

3. Renunciation by possessor

4. Possession during wartime


What are the rules in computing the period?
o Tacking is allowed to predecessor-in-interest

When does this happen?

There must be privity; possible when there is

8 years

2. action upon quasi-delict


1. Forcible entry/unlawful detainer
2. defamation

succession of rights
What if the character of possession
differs?
o Predecessor in bad faith, possessor

Which actions are not extinguished by prescription?


o 1. Demand right of way
o 2. Abate public or private nuisance
o 3. Declare a contract void
o 4. Recover property under express trust
o 5. Probate of will
o 6. Quieting of title

in GF use extraordinary
o

SALES

acquisition
Presumed to be in possession in intervening periods unless

disproved
o Exclude first day, include last
Periods for prescription of actions:

30 years

Action over immovables (count from

10 years

time possession was lost)


1. Mortgage action

Introduction

2. action upon written contract


3. action upon obligation created by

182

What are the obligations created by a contract of sale?


o Seller:

Transfer ownership

Deliver possession of the subject matter


o Buyer:

To pay the price


What are the elements of a contract of sale?

o
o

1. Consent
2. Subject matter

Upon perfection: determinable

Capable of being made determinate without

further agreement between the parties


Is a generic-determinable subject matter

subject to loss?
o No.
Upon consummation: determinate (requires physical

other partys, cannot be compelled to deliver what he

segregation or particular designation)


o 3. Price
What are the stages in the life of sale?
o 1. Negotiation
o 2. Perfection

A contract to sell (CTS) is already perfected, but has a

person in GF
Special rules for sales:

1. SOF

2. Right of legal redemption to adjoining owners of

urban lands
Distinguish from piece-of-work:
o 1. Check if it is possible to produce the product ahead of any
special order

POW if it can only be made upon receipt of

perfection of the contract?

No. Only upon consummation.


3. Bilateral and reciprocal

Obligation of one party is the cause of the other

Recall:

Compensation morae

Resolution for failure to comply with

o
o

reciprocal obligation
o
o

promised
2. If he lost by eviction the thing received in barter, he
may recover what he gave in exchange, with damages

As long as it didnt fall in the hands of a third

suspensive condition payment of full price


o 3. Consummation
What are the characteristics of a sale contract?
o 1. Nominate, principal
o 2. Consensual

Non-performance does not void the contract

Does the seller need to own the thing during

6. Title, not a mode

Tradition is the mode to transfer ownership

Sale just creates the obligation to transfer and deliver


Distinguish from barter:
o Barter is thing-for-thing; sale is thing-for-money
o Special rules for barter:

1. If the thing received in barter is found not to be the


o

4. Onerous
5. Commutative

Inadequate price does not invalidate sale, but may be

a badge of vitiated consent

specifications (ex. A/C specially fitting building space)


Otherwise, sale (ex. window sashes that can be

customized)
2. POW is unique and always different from other orders
3. Essence of sale is object; essence of sale is service

Service takes into account the plan and the labor.

Sale just requires that an object be delivered at some


future date.
Is research output POW?

No. There is no transfer of ownership.


Why is it important to distinguish?

Sale is obligation to give. POW is obligation to do.


Remedies differ.

183

Parties

Distinguish from agency to sell:


o There is sale, not agency, if the middle man had to pay the

price for the thing, and then sell it thereafter. There are two

contracts of sale here.


o Agency is fiduciary, and the agent must act with loyalty.
Distinguish Contract of Sale (COS) from Contract to Sell (CTS):
o CTS, upon perfection, must:

Have a stipulation that the SM remains with the seller

until full payment of the price


Specific right granted to the seller to extra-judicially

rescind the contract in case of default

If missing, its a COS


OR, there is a stipulation that upon payment of full

necessaries to minor?

If perfected and delivered, it is a valid

price, the seller executes a deed of sale in favor of the


o

buyer
Upon consummation:

COS title passes upon delivery

Non-payment is a substantial breach

CTS title not passed to the buyer until payment of

full purchase price

Payment of the full purchase price is a


o

suspensive condition
Remedies:

COS need to rescind to recover ownership

There can be forfeiture of payments already

contract.
If just perfected, it is voidable, as per usual

rule.
What do prohibited sales here include?
o Also legal redemption, compromises, and renunciations
Can spouses sell to each other?
o In general, no.
o Exceptions?

1. CSP

2. JSP
o N.B. prohibition also applies to common law spouses
What are the special disqualifications?
o 1. Agents over principals property

Unless the principal consented. This is the only


relationship that can be validated by the principal by
o
o

made as long as its provided for in the

Who has capacity to enter into a sale contract?


o Anyone with capacity to enter into a normal contract.
o For minors, follow usual rule.

What is the status of a Contract for sale of

contract and its not unconscionable


CTS ownership retained, so the contract is

consent.
2. Guardian over wards property
3. Executor or administrator over estate property

What if the executor or administrator bought the


property after administration ceased?

Generally, valid.

But void if there was an agreement entered

automatically extinguished

Only action is for recovery of possession

Return payments made

But there can be decision based on equity if

into with the heir during administration.


Short gap of time between termination of
administration and sale is a badge of fraud.

there were sufficient payments already made

184

4. Public officers and employees over property of the State,

subdivision, or GOCC entrusted to them


5. Officers of the court over property under litigation or levy in

perfect of the sale contract, and only during delivery must he

the court they function in

What is the rule on sale of property after litigation

after.

If its just the first time, its valid.


6. Lawyers over property and rights under litigation

Are contingency fees valid?

Yes. Transfer of property only happens after

impossible thing.
What is emptio rae speratae"?
o A sale based on the suspensive condition that the thing comes

into existence.
What is emptio spae?
o Sale of a vain hope or expectancy. It is void. (Under Jurado, it

favorable judgment.
Courts may only nullify it if the lawyer

says that its valid and perfected because what was sold was

exercises undue influence.


Can there be ratification?
o No. These are void contracts.
o But there can be a new contract entered into, applying to:

Agent

Guardian

Executor/administrator
o The following cannot ratify through new contracts:

Public officers and employees

Officers of court

Lawyers

hope itself)
What are examples of illicit subject matters?
o Sale of intransmissible rights, sale of future inheritance, etc.
What is determinable and what is determinate?
o Determinable upon perfection of the contract, the thing is
capable of being made determinate, without necessity for a

Subject matter

have a right to do so
Possible means that it may not exist at the moment but it can
definitely exist.

So you cannot sell a fountain of youth, because its an

or levy?

If it was offered before, it cannot be ratified

The person need not be the owner of the subject matter upon

What are the requisites for a valid subject matter?


o 1. Possible subject matter
o 2. Licit
o 3. Determinate or at least, determinable
What does possible subject matter mean?

already
o If neither determinable nor determinate, no contract.
What is essential for perfection as re: quantity and quality?
o Identity and quality of the subject matter is ESSENTIAL for
o
o

185

new agreement between the parties.

Ex. a contract refers to an existing document


Determinate particularly designated or physically segregated

perfection.
Quantity is not as important, but the standard is that there is no
need to enter into a new contract to determine it.
What is the status of generic things sold?

Upon perfection, they are determinable.

They are not subject to loss.

Upon consummation, they are determinate.


What about sale of undivided interest in property?

Co-ownership comes about


What about sale of undivided share in mass of fungible

o
o

goods?

Proportional co-ownership over the mass

If mass is less than the measure both, the buyer owns


the entire mass and the seller must make up the

consideration but valuable consideration, so if it is

minor differences in measure


What is the effect of failure to deliver the subject matter?
o It does not affect the validity of the contract.
o If the person sold something not his, the buyer does not obtain
o

found out that there is none, the price is invalid

better right over the goods, unless the real owner is estopped.
What is the exception to this rule?

Judicial sale. This is why the mortgagor must be the

It passes to the buyer by operation of law.


But of course, there must be physical delivery.

suspensive condition.
What if the third party refuses or cannot fix the
price? Or what if the price cannot be determined

What are requisites of valid price?


o 1. Real
o 2. Must be in money or its equivalent

Note: there can be post-perfection agreements like

through the thing certain?

The contract is inefficacious because of

dacion en pago to give something else other than

donation.
What is certain or ascertainable?
o Certain if it is in a definite amount.
o Ascertainable if reference can be made to another thing certain
or judgment of another person.

Can a third party fix the price?

Yes, it is valid. The third partys act is a

Price

(because it might actually be a donation).


So gross inadequacy in itself does not invalidate the
contract but it may indicate vitiation or that its a

absolute owner at the time of the sale.


What if the seller subsequently obtains title over the thing
sold?

of the parties.
What if the price indicated is only nominal/meager (ex. P1),
is it valid?

If it masks the true price given, its valid.

But note that Philippine law requires not just

deficiency
But if a specific mass is sold without weighing, the
subject matter is a definite object even if there are

Take note of absolutely or relatively simulated contracts.


What if the price indicated is false but not simulated?

The contract is valid.

The contract may be reformed to reflect the true intent

money
o 3. Certain or ascertainable at the time of perfection
What is real?
o When the buyer has every intention to pay and seller has every
intention to receive.

186

failure of suspensive condition.

So there is a valid contract at one point.

Can either party fix the price?

No.

When can the courts fix the price?

1. Third party in BF

2. Mistake
What is the rule for sales where there is no price agreed upon?

First, attempt to determine the price in any other matter.

Most of the time, it becomes an inefficacious contract

(because for instance, the thing certain cannot

determine the price, or a third person designated to do


o

so does not or cannot).


If there is already delivery by the seller and appropriation by
the buyer, then its an unjust enrichment and estoppel situation.

point?

No, because that would violate mutuality of


contract, since the buyer already

o
o

demandable at once.
But if the intent clearly shows some other manner apart from

absentees, under OBLICON, which can lead to rescission.


What if a sale with right to repurchase has a deficient

mortgage. The remedy for the seller is to reform the


contract, while the buyer can foreclose the equitable
mortgage.
Formation of contract of sale

there is no contract because there is no price.


X wanted to buy a car from ABC Company, on the

condition that X would procure a loan from DEF Finance,


there a void contract for lack of manner of payment?

No. There is a valid contract, but with a suspensive

condition that did not come into fruition.


For an executory contract of sale, how is it taken out of the SOF?
o The written memorandum must evince all the essential
o

What is the rule on offers and acceptance?


o See OBLICON notes.
What is the difference of Contract to Sell (CTS) from an option
contract (OC)?
o CTS promise to buy and sell a determinate thing for a price

as stipulated on the agreement. The loan was denied. Is

back
Take note of lesion in sales of guardians and representatives of

price?

There is a presumption that it is an equitable

immediate payment but the contract does not provide for it,

appropriated it. There is also estoppel.


What is the rule on manner of payment?
o It must also be certain or ascertainable. It is essential, being
part of the prestation of the contract.
The presumption is immediate payment and that it is

vitiated consent or that it is a donation contract.


For a judicial sale, inadequacy can avoid a sale if:

1. Price is shocking to the conscience

2. And one can get a better price

3. And there is no right to redeem

Because if there is right to redeem, the low


price would make it easier to get the property

So the buyer must pay a reasonable price.

Can the seller ask for return of the thing at this

Does not affect validity of the sale contract, but may indicate

requisites of a contract of sale.


Of course if it has been partially executed or is executed, it is

taken out of the Statute of Frauds.


What is the effect of deficiency of price?

187

certain
OC contracted offer, securing the privilege to buy, so the

other party cannot enter into a contract with another


What is their similarity?
o Both contracts are subject of specific performance.
o Both are perfected contracts, but not the COS per se
What is required for an OC to be valid?
o 1. Agreed time
o 2. Determined price

3. Separate consideration

Need not be in cash. It can be a mortgage, buying

the lands in half a property, etc., as long as its an

undertaking of value.
Does the OC fall under the SOF?
o No. But the resulting sale contract will.
What if the requisites for an OC are not complete?
o Its a VALID offer but a VOID option contract.
o So it can be withdrawn with no consequence. But if its

price of the sale yet upon exercise of the option.


What is the rule and remedy when an option contract is perfected?
o The optionee has the right to exercise the option anytime

during the period, and this will bring about a valid contract of
sale.
If the offeror withdraws the offer during the period, it is void.

breach of the option contract, but the offer cannot be


accepted anymore. CLV finds this problematic.
If the offeror withdraws the offer and sells the thing it to a third
person in BF, the optionee can exercise the option and compel
o

same terms and conditions as the prior offer.


Take note of the usual rule offer must be certain, acceptance must be
absolute, otherwise its a counter-offer.
What is the nature of earnest money?
o Its part of the purchase price.
o Its given only when there is already a sale.
o Buyer is bound to pay the balance. When there is failure to pay
the balance, the earnest money is returned upon resolution; it

The offeree can still accept the offer.

BUT in Ang Yu: the withdrawal here only results in a

of payment.
What if a RFR is not honored?
o Damages only, no specific performance
Must there be a consideration?
o Yes, but need not be separate from the main contract.
Must it be in a written contract?
o Yes, otherwise it is unenforceable. (SOF)
What if the property is offered to a third person after being offered
to one with a RFR?
o The offered price to the third person must at least be under the

accepted before withdrawal, a contract of sale ensues.


How is the option exercised?
o Merely advising the offering party. No need to pay stipulated

specific performance from the third person.


If the offeror withdraws the offer and sells the thing to a third

is not forfeited.
What are the rules on form that you must take note of?
o 1. Sale of real property by an agent (must be in SPA)
o 2. Sale of large cattle (in writing and registered w/ municipal
o
o

treasurer)
3. Sale of land by non-Christians
4. Transactions involving rights over real property must be in

public document to be registrable (1358)

But not a requirement for perfection


5. SOF

person in GF, the optionee can recover damages from breach

Just the object of the contract. NOT YET the price and manner

of contract of sale, and not just breach of the option contract.


What is the Right of First Refusal (RFR)?
o A promise on the part of the owner that he will sell it first to the

Transfer of ownership/performance of sale contract

promisee should he decide to sell the thing.


What is certain among perfection of the RFR?

188

When is there tradition?

When the thing sold is placed in the control and possession of

the vendee
o With intent to deliver
What are the types?
o 1. Actual
o 2. Constructive any manner signifying transfer of possession

Constitutum Possessorium: sold as owner, continue to

possess as lessee
Traditio Brevi Manu: bought as lessee, and become

that the buyer will take steps to obtain


material possession of the thing from a third
person
3. Seller did not have control or ability to transfer

physical possession of the property for a reasonable


length of time after execution of the public instrument
What is the rule on delivery by carrier?
o GENERALLY, delivery to carrier is delivery to buyer
o Exceptions:

1. FAS sales (Free Alongside Ship)

Delivery when goods placed alongside

upon reaching destination


o Seller must pay freight
3. CIF sales (Costs, Freight, Insurance)

The buyer pays fixed price while seller pays

destination
In delivery of movables, what if the seller delivered less goods than

of execution of the instrument

Except: when there is express agreement

delivery to buyer
o Buyer must pay freight
FOB destination delivered to buyer only

what he contracted to sell?


o Buyer may reject.
o If buyer accepts and retains the goods knowing the contract

of the thing, unless the contrary can be inferred.


What are the exceptions to this rule?

1. Contrary stipulation in the instrument

2. Seller did not control the subject matter at the time

FOB shipping point delivery to carrier is

insurance and freight up to the point of

owner

Traditio Longa Manu: delivery by agreement


o 3. Symbolic ex. delivery of keys to a car
What is the effect of execution of public instrument?
o For both movables and immovables, it is equivalent to delivery
o

wont be performed in full, he must pay at contract rate.


If buyer used or disposed the goods before he knew the

contract wont be performed in full, he just pays fair value.


What if the seller delivered more than what he contracted to?
o Buyer may reject the excess.
o If its indivisible subject matter, he may reject the whole.
o If he accepts the whole, he still pays contract rate.
o Same rule if the seller delivers goods where some match the
contract specifications and some do not.
What is the rule for sale of immovables where the area is stated?
o The seller must deliver all that is stated in the contract.
o If the area is less or the quality is different:

1. Proportional reduction of price OR

2. Resolution of contract (as long as the lack is more


than 1/10 of the area)

But if the buyer would not have bought the


property had he known the smaller area or
inferior quality, he can still resolve even if

vessel
2. FOB sales (Free On Board)
o

189

less than 1/10


If area is more than stated:

o
o
o
o

here is registration of the land in the ROP (Torrens)


(This rule applies for: 1. Two valid sales, 2. Of the exact same
subject matter, 3. From the same person, 4. And there are

that sale is on sale or return or sale on acceptance


3. Reservation of ownership
4. Sale is not valid
5. Seller is not owner

What are the exceptions?

1. True owner is estopped

2. Sale made by registered or apparent

under order of court


4. Purchased in merchants store, fairs,

rule that first-registrant-wins applies)


If the land was unregistered, the unregistered sale wins (there

are no rights to step into for the second buyer)


What is the rule for movables?
o First person to take possession of it in GF wins
What is the rule for immovables?
o NOTE: this pertains to unregistered lands, and registration
o

goods without notice of rejection


N.B. for #1 and 2, there must be clear and written agreement

the latter prevails.


What if there was a prior unregistered sale and a subsequent
judicial sale?
o If the land was registered, the judicial sale wins (because the

goods within the time stipulated/reasonable time


2. Sale on acceptance (or on approval or on trial)

Delivery is transfer only, until:

Buyer signifies approval

Buyer does not signify approval but retains

owner according to registration laws


3. Sale pursuant to statutory power of sale or

When one buyer bought the land as registered under Act 3344,
and another bought the land as registered under Torrens title,

than what is in the contract.

Usually indicated by lack of price-per-unit


When does delivery not transfer title?
o 1. On sale or return

Buyer has option to return instead of paying the price

Delivery vests ownership but the buyer may return the


o

1. Reject excess OR

2. Accept all, but pay contract price


What if the sale of property is by lump sum?

No change in the price even if the area is less or more

conflicting interests)
o 1. First person who registers the land in the ROP in GF
o 2. If none, the first person who possessed it in GF
o 3. If none, the person who presents older title in GF
What is the subsidiary rule?
o Primus tempore, potior jure (First in time, first in right). This
applies when the above rule doesnt apply for lack of requisites,
o

or if one is a CTs and one is a COS.


If one is a CTS and one is a COS, the CTS wins if the CTS
buyer fulfilled all the conditions already and there was a

markets
What is the general rule for double sales?
o The Torrens system prevails in setting priorities.
o When the property is covered by two different titles, the earlier
one prevails.

190

subsequent COS after.


What does purchaser in GF mean?
o No notice of other persons right or interest. Paid full and fair
o

price upon purchase, and before notice.


If the circumstances call for an investigation and he did not,

hes in BF (ex. lis pendens or annotated adverse claim).


So what is required for second person:

Second buyer must show continuing GF until full

If the buyer refuses to receive the goods, the seller

ownership vests.
The first buyer can simply defeat this continuing GF

becomes a bailee for the buyer.


The seller can ask for specific performance for the

by registering.
As soon as he second buyer obtains knowledge of the

specific performance for the price regardless of delivery

The buyer can launch as a defense the sellers

first sale, its akin to registration in favor of buyer #1,


because second buyer loses GF.
Risk of loss

incapability to perform his obligation


What are the special remedies for an unpaid seller? (Note: these
are special because they are self-help remedies and can be done

Recall OBLICON notes

as long as there is no physical intrusion)


o 1. Possessory lien over the goods

When ownership has been transferred, seller has lien

Documents of title

price.
3. If price is payable on a certain day, the seller can ask for

on goods or right to retain goods if he still possesses

Recall WAREHOUSE RECEIPTS notes, esp. on warranties and how to

them.
When ownership has not been transferred, seller has

right to withhold delivery.


Buyers disposition of the goods does not terminate

garnish/levy a negotiable document or title and a non-negotiable


document of title
o Ex. need to surrender receipt, can ask help from court for
injunction, conflict between assignment of document and levy

lien, except:

1. If seller assents

2. What was sold was a negotiable

of the same document and the rule on notice, etc.


Remedies of unpaid seller

What is an unpaid seller?


o 1. Whole price has not been paid or tendered
o 2. Negotiable instrument received as conditional payment and

the condition was broken due to dishonor, insolvency, etc.


What are the ordinary remedies of an unpaid seller?
o 1. If ownership has been transferred to the buyer, specific
o

performance for price


2. If ownership has not yet been transferred to the buyer, it can

instrument held by a possessor in GF


When can possessory lien be exercised?

1. Goods sold without credit stipulation or


term of credit has expired already OR

2. Buyer has become insolvent


When does the possessory lien terminate?

1. Seller delivers goods to carrier or bailee

be resold for a reasonable price. The seller can also offer to


deliver to the buyer.
o

191

without reservation of ownership


2. Buyer lawfully obtains possession of

goods

3. Waiver
2. Stoppage in transitu

Right to stop goods in transit


Buyers disposition of the goods does not affect

difference for the price, if the subsequent

stoppage, except:

1. If seller assents

2. What was sold was a negotiable

instrument held by a possessor in GF


When are the goods in transit?

Carrier/bailee has them before buyer takes

delivery of the goods


Goods rejected by buyer and carrier/bailee

continues in possession
BUT if the goods are being carried on behalf

refuses to deliver goods to the buyer, they


are deemed NOT in transit
How is this right exercised?

1. Actual possession

2. Notice to carrier

3. If there is negotiable document of title,

has been for unreasonable time period


Warranties

case of default
3. Buyer has been in default for

unreasonable time
What is the prerequisite?

The unpaid seller should have a right of lien

or should have stopped the goods in transitu


What is the effect?

Seller may resell even without rescinding the

or should have stopped the goods in transitu


Buyer is liable for breach
Give notice to buyer of rescission, not in order to
exercise the right, but to determine whether default

goods back to seller


3. Special right of resale

In what instances does this right apply?

1. Perishable goods

2. Seller expressly reserves right of resale in

time

Otherwise, no need for notice

Seller cannot buy the goods for himself.


4. Special right to rescind

When may this right be exercised?

1. Express reservation of right to do so

2. Default for unreasonable time

What is the prerequisite?

The unpaid seller should have a right of lien

need to cancel it first before carrier gives


o

sale is for a lower price


When does seller have to give notice?

When the goods are not perishable, to see if


the default has been for an unreasonable

of the buyer already or the carrier wrongfully

Buyer is liable for damages and the

What are express warranties?


o Those provided in the contract
What are implied warranties?
o 1. Implied warranty by seller that he has a right to sell the thing
at the time ownership is to pass and that the buyer from that
o

time will have legal and peaceful possession of the thing


2. Implied warranty that the thing is free from any hidden faults

or defects, or any undeclared charges/encumbrances


BUT this cannot hold liable a pledgee, mortgagee, sheriff,
auctioneer, with authority under fact or law, for the sale of a
thing where a third person has legal or equitable interest

original sale contract

192

What are the buyers remedies for breach of warranty by the


seller?
o
o
o
o

particular purpose for which the goods were acquired and the

1. Accept the goods but recoup price or have it reduced


2. Accept the goods and file for damages
3. Refuse to accept the goods and file for damages
4. Rescind COS and refuse to accept the goods OR have

buyer relies on the sellers judgment or skill implied warranty


o

accepted goods without protest


Failed to notify the seller within reasonable

time
If he fails to return the goods or offer to

return them
If the goods are not in good condition

the whole or part of a thing purchased by FJ based on a right


prior to the sale by the vendor, the vendor is answerable for the
o

The buyer becomes a bailee


With lien to secure price which has already
been paid
With no prejudice to sellers right to enforce

eviction
What are the requisites?

1. Deprivation of the vendee of the whole/part of the

thing bought
2. By virtue of final judgment
3. Based on a right prior to the sale or an act

imputable to the vendor


4. Vendor must be summoned in the suit for eviction

at the vendees instance


What can the vendee demand of the vendor in case of
breach of warranty against eviction?

1. Return value of the thing when sold

2. Income or fruits if he has been ordered to deliver

liens of an unpaid seller


Are these remedies mutually exclusive?

Yes

Except: may seek rescission even after

choosing fulfillment if it becomes impossible


5. If there is breach of warranty of quality, the loss is the
difference between the actual value of the goods and the value

of merchantable quality
What is warranty in case of eviction?
o It is an implied warranty wherein if the vendee is deprived of

anymore due to the buyers fault


What if the seller refuses to accept the goods
back?

that the goods are suited for the purpose


2. Goods are bought by description from a seller who deals in
goods of that description implied warranty that the goods are

mutual restitution, if applicable

When can the buyer not rescind?

If he knew of breach of warranty but

1. Buyer expressly/impliedly makes known to the seller the

of the goods had they complied with the warranty


When is there an implied warranty on quality or fitness of the
goods?

them to the party who won the suit


3. Cost of suit which caused eviction (or suit brought

against vendor)
4. Expenses of the contract if vendee paid
5. Damages and interests, and ornamental expenses

if sale was in BF
When can the vendee demand the rescission of
the contract?

193

1. If due to the eviction a part of the thing

movables?
o 1. If ownership has been transferred to the buyer, specific

sold was so important that the vendee would

What are the remedies of the seller for breach of contract of sale of

not have bought it without said part


2. Two or more things jointly sold for lump
sum (or for separate price for each if it is

be resold for a reasonable price. The seller can also offer to

clear the vendee would not have purchased


o

deliver to the buyer.

If the buyer refuses to receive the goods, the seller

one without the other)


What are the two kinds of waiver of warranty against
eviction?

1. Consciente voluntary renunciation made by the

vendee of the right

Effect: liability of the vendor in case of

value of the thing sold


2. Intencionada voluntary renunciation by the

vendee of the right to warranty against eviction with


consequences

Effect: no liability whatsoever for the vendor


What is an accion redhibitoria?
o Actions instituted by the vendee against the vendor to avoid a
sale on account of some vice or defect in the thing which

price.
3. If price is payable on a certain day, the seller can ask for

incapability to perform his obligation


What is the remedy for sale of movables on installment (RECTO
LAW)?
o Three options:

1. Exact fulfillment of the obligation, if buyer fails to

knowledge of the risk of eviction and assuming its

becomes a bailee for the buyer.


The seller can ask for specific performance for the

specific performance for the price regardless of delivery

The buyer can launch as a defense the sellers

eviction only extends to the payment of the

performance for price


2. If ownership has not yet been transferred to the buyer, it can

renders it unfit for the use intended


What is accion quanti minoris?
o Action to procure return of a part of the purchase price paid by

pay an installment

Can there be recovery of deficiency?


o Yes.
2. Cancel the sale, if buyer fails to pay 2 or more
installments

Is there return of price?


o Usually, none, to compensate for

the vendee to the vendor due to the defect


What is the prescriptive period for either?
o 6 months from date of delivery
o Except redhibitory actions based on faults/defects of animals,
which is 40 days from date of delivery

Breach of contract

194

deterioration
What is the validity of an agreement not

to return price already paid?


o Valid as long as not unconscionable
What is the nature of rescission?

It does not bar the transfer of ownership or nullify the

is returned)
3. Foreclose CM on the thing, if buyer fails to pay 2 or

sale K
But he can rescind it through judicial or notarial

more installments

NO ACTION to recover unpaid balance

Does this bar foreclosure on another

It bars further recovery (because


payments are returned and the SM

guarantee and another security?


o Yes.
What if the seller forecloses on additional

securities instead of the CM?


o Loses lien on the CM.
What is the effect of taking back the SM

price leads to rescission, there has to be a


demand for rescission first, to grant the buyer
of every opportunity to comply with the

by the seller?
o Its tantamount to foreclosure
What if property is sold for two installments only?

There can be no failure to pay 2 or more installments,

still be recovered (exception to 1484)


What else is deemed a purchase of movables on

installment?

1. Financing agreements

2. Lease with option purchase


o Are the remedies mutually exclusive?

Yes.

But if the chosen remedy fails, can choose another.


Remedies of seller for sale of immovables? (if not covered by

act, the buyer can still pay what is due


When does Art. 1592 apply?
o Ordinary sale of real property transferring ownership
simultaneously with the delivery of the real property sold
What is the remedy for seller of immovable on installment

unit (not commercial, industrial, or agrarian reform

Maceda Law)
o 1. For anticipatory breach

If the seller has reasonable fear of breach or loss,

obligation
So if there is no judicial demand or notarial

(MACEDA LAW)?
o When ML applies:

1. Sale in installments AND

2. The immovable is residential real estate or condo

so even if CM is foreclosed, the unpaid balance can


o

demand
What does Art. 1592 provide?

Even if it is stipulated that failure to pay the

land) AND
3. Either a CTS (notice of cancellation) or COS

(demand for rescission)

Even applies to financing transactions


If buyer has paid at least 2 years of installments:

1. Grace period of 1 month for every 1 year of


installment payments to pay (without interest)
Can only be availed once every 5 years

What if there is a stipulation that there is

may immediately sue for rescission of sale

Or else, he can only rely on substantial breach


2. For failure to pay the price

no grace period or there is payment of


interest?
o INVALID.

195

2. If the seller cancels the contract, he must refund to

the buyer the cash surrender value of payments


already made: 50% + 5% for every year beyond 5

years of installments (not exceeding 90% total)


When does actual cancellation take place?

AFTER expiration of grace period, the seller


gives:
o
o
o

1. Cash surrender value


2. Notarial demand for rescission
3. And there is lapse of 30 days

The buyer does not get it back.


What are the remedies of the buyer in a sale of movables?
o 1. Specific performance
o 2. See four actions above for breach of warranty
o 3. Suspension of payments in anticipation of breach

If buyer has a reasonable fear of disturbance,

from receipt of notarial demand


What if the lot has been sold to an innocent
purchaser for value at this time?

Option 1: Buyer can demand return of actual

notarial demand?

It, in fact, is a 2nd 30 day grace period for

which payment can be made.


But in this grace period, there are interests

and penalties.
Can there be judicial rescission under the ML?

No. The law requires notarial rescission. If a

pay nonetheless
Is trespassing considered as a valid ground to

disturbance or danger

Unless the seller gives security for return of price


2. Subdivision or condominium projects (PD 957)

No forfeiture of payments where there is failure to


develop condominium projects or subdivisions and

will dismiss it.


If buyer has paid less than 2 years of installments:

1. Grace period: only 60 days from date the

price
3. There is stipulation that the buyer must

suspend payments?

No.
What are the remedies of the buyer in a sale of immovables?
o 1. Suspension of payment if there is reasonable fear of

judicial rescission is filed instead, the court


o

vindicatory action, or foreclosure


Until when must suspension last?

1. Seller has caused disturbance to stop

2. Seller issues a security for return of the

market value + 12% interest

Option 2: Buyer may demand substitute lot


What is the nature of this 30 day period after

What about the cash surrender value?


o It doesnt apply to this situation.

installment became due


2. After grace period, the seller may either cancel the

then the buyer stopped payments


Buyer can ask for refund of what he paid notice and

demand can be simultaneous


NOTE: distinguish against between RESOLUTION ad RESCISSION.
Both these remedies apply. Remember that:
o Resolution is for breach of reciprocal obligation (common in

contract (CTS) by giving notarial notice of rescission


(COS). There is another 30 day period before the

cancellation or rescission takes effect.

196

sales)
Rescission is for lesion

Note again if the situation involves Maceda Law, then judicial

The period of the conventional redemption cannot exceed 10

years, while an option contract may exceed this period.


Option contract need to just give notice that you are

exercising the option.


Conventional redemption give notice AND tender payment

rescission (actually, resolution), does not apply because the


o

action must be a notarial rescission


If Art. 1592 and not the ML applies:

Either judicial or notarial rescission.

Rescission cannot be extra-judicial; buyer can


otherwise still continue paying.

Extinguishment of sale

What are the causes to extinguish a contract of sale?


o 1. Ordinary causes to extinguish an obligation
o 2. Breach (discussed directly before)
o 3. Conventional or legal redemption
What is conventional redemption?
o When the seller expressly reserves the right to repurchase the

declaring a contract one with conventional right to redeem and


o

prescription. But mere failure to pay the price does

instrument of sale.

Once consummated, cannot make pahabol the

stipulation in a separate document. In fact, it cannot


be in a separate document (unless its something else

o
o

like an option to buy).


It MUST be in the same sale instrument and stipulated

before consummation.
It does not prevent the consummation of the sale.
Can enforce the right from third persons or possessors deriving

right from the buyer, even if the subsequent sale contract did
not mention the conventional redemption.

Of course, respect laws on Mortgage and Property

not something else (ex. Equitable mortgage)


When is the period suspended?

Pendency of action in GF questioning the validity of


the underlying sale contract suspends the

thing sold. It must be reserved by the seller in the same

with consignation
What is the period for redemption?
o 1. If none agreed upon, 4 years
o 2. If there is a period agreed upon, cannot exceed 10 years
o 3. 30 days from judgment of the court, if there is judgment

Registration Decree.
Compare with option contract?
o Conventional redemption need not have separate and distinct

consideration to be valid.

197

not suspend it.


What is the effect of the agreement?
o It is a valid contract of sale with a resolutory condition that the
seller exercising right to redeem.
What must be returned to the buyer by the seller?
o 1. Price
o 2. Expenses of the contract
o 3. Necessary and useful improvements/expenses
When is a contract presumed to be an Equitable Mortgage (EM)?
o 1. Price of sale with right to repurchase is unusually inadequate
o 2. The seller remains in possession of the property as lessee
or otherwise
o 3. The period of redemption is extended in another instrument
o 4. The buyer retains for himself a part of the purchase price
o 5. The seller binds himself to pay for the taxes of the thing sold
o 6. Any other similar case
In case of doubt, what is the rule?

A sale purporting to be pacto de retro (with conventional

redemption) is deemed an EM.


Same with absolute sales, but the real intent is to secure an

prefer the one with the smaller lot. If equal,

obligation.
What is the consequence if a contract is declared an EM, and not

pacto de retro?
o Title of buyer cannot ripen into full ownership because his

possession is not in the concept of an owner.


There can be no consolidation of title in the buyers hands

(otherwise its pactum).


The seller can redeem as long as the buyer hasnt foreclosed

for mere speculation (sold when prices go

but also preemption. It means if the


resale has not yet been perfected,
the adjoining owner can preclude

sale to stranger

Applies only to hereditary rights (co-heirs)


2. Among co-owners

Selling to a stranger of a co-owners share

If two or more co-owners decide to redeem, they

sale because he is preferred.


o 4. Sale of credit in litigation by the creditor
When does legal redemption start to run?
o Within 30 days of receipt of notice in writing by the prospective
o
o

acquire in proportion to their existing shares


3. Adjoining owners of:

A. Rural land

Sale of land which does not exceed 1

urban area
What is the special rule for sale of
adjoining urban land?
o The right is not just of redemption

i.e. those with interest must be impleaded)


What is legal redemption and when does it apply?
o Mechanism of law to minimize co-ownership.
o 1. Among co-heirs

Selling to a stranger prior to partition

Can redeem within 1 month from receipt of notice of

up)
Purpose: prevent speculation in real estate
when there is housing problem already in

yet.
How is consolidation of ownership in the vendee by failure of the

prefer the first requestor to redeem.

Purpose: maximize use of rural lands


B. Urban land

ONLY applies when there is sale of a small


piece of land which was bought by a seller

vendor to exercise option in a pacto de retro done?


o Through an ordinary civil action (so all indispensable parties

If two or more are requesting redemption,

seller or seller
Written notice is indispensable even if the redeemer gains
knowledge of the sale some other way
Exceptions?

1. Suit in court to eject or collect rentals from co

hectare
Not applicable to lands separated by

owners
2. Laches by redeemers
3. The co-owner himself acted as middleman or
intermediary in the sale to the third party

servitudes

198

PARTNERSHIP

2. Rentals paid to landlord


3. Annuity of surviving spouse or

Contract of partnership

representative of deceased partner


4. Consideration for sale of goodwill or other

What are the elements of a Partnership contract?


o 1. Meeting of the minds to form a partnership

A partnership is consensual contract

You cannot add a new person to the partnership

unless everyone consents

Mere co-ownership does not make a partnership


2. Agreement to contribute to common fund with joint interest in

the profits or losses thereof

Share of profits must come from the equity position


o

property
Key attributes of Partnership:
o 1. Consensual, but weak juridical personality

Arises even if the partnership is not registered

Can be extended beyond term if the partnership is not

o
o

and not some other role (ex. creditor, employee)


3. Consideration: promised contributions

Partners are debtors to the partnership to the extent

public
2. Mutual agency
3. Delectus personae

There is special fiduciary relationship between


partners. There is utmost trust. When it is breached,
any partner can dissolve the partnership midstream,

of promised contribution. They pay damages and

interest for failing to do so.


Industrial partners contribute their service, so they

property, or industry to a common fund

N.B. mere co-ownership does not per se constitute a

partnership
2. Intention by the partners to divide the profits amongst

damages.
The moment one partner is gone, the partnership is

dissolved.
4. Subject to unlimited liability

Partners are liable pro rata with their separate


property after all partnership assets have been

themselves

What is the presumption?

Receipt of share in net profits is prima facie

even before stated period.


In fact, even if there is bad faith, a partner may
dissolve the partnership midstream, but with

cannot engage in a business for themselves.


What are the two essential requisites of any partnership contract?
o 1. Two or more persons bind themselves to contribute money,

liquidated or settled at end of term


Really merely for convenience of transacting with the

evidence that the person is a partner


What are the cases where this rule does not

exhausted
Does this include even industrial partners?

Yes
Can there be a contractual stipulation denying
unlimited liability?

No. But it can be valid only as an internal

apply?

1. Wages of an employee

agreement among partners.

199

Characteristics of a partnership contract:


o 1. Nominate and principal
o 2. Consensual

Failure to register and provide a public instrument is

exercise of profession or vocation


Why is the distinction important?

Those who cannot donate to each other cannot enter

into contract of universal partnership


Can spouses enter into a partnership?

No. This would indirectly change their property

o
o

turn it into a partnership at will


Even if there is specific duration or purpose, any

damages
2. Partnership at will

Any partner may dissolve it at will, but if there is BF,

damages
What is the extent of a general partners liability?
o 1. Liable pro rata when partnership properties have been
o

exhausted
2. Solidarily liable with the partnership for wrongful acts or
omissions causing injury to third persons when the partner acts

relations.
What is the default rule?

Particular partnership
X and Y are partners in real estate projects. X was abroad and

in the ordinary course of business


3. Also solidarily liable with the partnership when a partner
acting with apparent authority receives money from a third

Y stumbled upon a potentially lucrative piece of property. Y


was convincing X to commit to the new venture but X refused.

Y initially temporarily used partnership property to secure the


new property but returned it and used his own property when X
refused. The property earned big profits. X is claiming part of
the earnings. Is X entitled?

HELD: No. They are not universal partners, and only


particular partners. Without sufficient basis, the law
cannot presume a partnership between X and Y as to

But partners may choose to continue after, which will

partner may choose to dissolve the partnership

But if there is no cause or there is BF,

not fatal to the existence of the partnership


o 3. Onerous and bilateral
o 4. Preparatory and progressive
Distinguish universal from general partnership:
o Universal partner contributes all his property
o Particular determinate things, or specific undertaking, or
o

the new property.


Term of partnership:
o 1. Fixed term or particular undertaking

person and misappropriates it


What about a subsequent partner?

He is not personally responsible for liabilities arising

prior to his joining the partnership


Distinguish a capitalist partner from an industrial partner:
o Capitalist:

Contributes money or property

Liable for losses (cannot stipulate otherwise)

Cannot engage in competing business or venture


o Industrial:

Contributes services

Not liable for losses (except when all the partnership

assets have been exhausted)

Cannot engage in any other business at all


Terms of a partnership contract provide Participation: A
40%, B 40%, C 20%. Both A and B provide the entire

200

capital and C was industrial partner. The partnership went

bankrupt. Can a creditor hold C liable for losses?

Yes, because third parties are not subject to internal

provision of law. But this cannot prejudice

agreements between the partners as to losses. So

the creditor can hold C liable for 20% since that is his

here because third parties cannot be


prejudiced by failure to register, and as
among the partners, there are still

third parties to believe so. He is liable as a regular partner as


to these creditors.

Pro rata with other partners who consented to the

document and registered with SEC

What is the consequence of failure to register?

None. It has no adverse legal consequence.

properties
B. Separate creditors over separate

properties
Can a corporation enter into a partnership? What about a JV?
o Cannot enter into partnership.
o But can become a limited partner because there is no unlimited
liability in this case and it will not participate in the

It does not affect partnership liability to third

contractually bound (consensual agreement).


Priority rules if registered

A. Partnership creditors over partnership

representation.
The partnership itself is only liable as the partnership

per se if all the partners acceded to the representation


What is the registration requirement?
o 1. If capital contributed is 3K or more, must be in a public

just jointly and subsidiarily liable.


N.B. But under CLVs blog discussion, failure
to register really has no adverse effect even

losses.
What is a partner by estoppel?
o He is not really a partner, but because of his acts, he has led

liability towards third parties.


N.B. The partners lose the benefit of
excussion. They are solidarily liable, and not

participation.
C, in turn, can ask for reimbursement from A and B
because of their agreement that C does not share in

The partnership is void, under express

persons.
Purpose of registration:

Prevent tax evasion by large partnerships

Allow public to determine nature of the

management of the partnership.


Can enter into a JV (because there is a particular purpose

only)
What is the rule on liabilities as regards the firm name?
o If a non partner has his name in the firm name, he is subject to
the liability of a partner.

partnership more accurately


2. For partnerships where real rights or immovable properties

Rights and powers of the partners

are contributed there must be a public document, inventory,

and registration with the SEC

What is the consequence of failing to register this

What are the three general rights of the partners?


o 1. Right to participate in management of the partnership
(manager)

public document?

201

2. Right over specific property of the partnership (agent of

What is the rule as to acts NOT within ordinary course of


business?
o NOT valid unless approved by all the partners.
o Examples:

Assigning partnership property in trust, mortgaging, or

other partners)
o 3. Interest in the partnership (equity holder)
What is the management right of the partners?
o Presumption is that there is mutual agency acts of one can
bind the partnership. But what is stipulated in the partnership
o

articles is what prevails.


BUT the doctrine of apparent authority prevails. Third persons

cannot be prejudiced; they are not expected to look up the

articles of partnership, even if registered.


What is the rule as to acts within the ordinary course of business?
o Representations by partners bind the partnership, if acting
o

within scope of his authority.


Wrongful acts in ordinary course of business:

Solidarily liable with the partnership for wrongful acts


partner acts in the ordinary course of business
Also solidarily liable with the partnership when a

from a third person and misappropriates it


What are the other acts exhibiting that the partners generally act

concerning partnership affairs within scope of authority:


evidence against the partnership
2. Notice to any partner regarding partnership affairs,

knowledge acquired by a partner while a partner, and


knowledge of a partner who reasonably could and should have

the partnership.
What is the nature of power of alteration (ownership/control)?
o Cannot be done without consent of all other partners, even if
o

communicated it to the acting partner operate as notice to the


o

partnership, it is essentially revocable.


What if management is stipulated in favor of 2 or more partners?
o If there is opposition, majority wins.
o If there is a tie, controlling interest prevails.
What if it is stipulated that none of the managing partners should
act without consent of the others?
o Follow the rule, then.
o Exception is if there is imminent danger or irreparable injury to

as agents for the partnership?


o 1. Admission or representation made by any partnership

other parties.
If stipulated in the articles of partnership, it is irrevocable
except for just or lawful cause. If not stipulated in the articles of

partner acting with apparent authority receives money

arbitration
What if management is stipulated in favor of one partner?
o He may execute all acts of administration despite opposition by
o

or omissions causing injury to third persons when the

pledging it
Disposing of the goodwill of the business
Confession of judgment
Entering into compromise as to liability or claim
Renouncing claims by partnership or submitting it to

partnership
3. See the two rules on solidary liability as re: wrongful acts or

omission in ordinary course of business and misapplication of

useful
But if the refusal is manifestly prejudicial to the partnership,

court intervention may be sought


What is the rule on sale of real property?
o If the title is in the name of the partnership,

Conveyance in the name of the partnership, done


with authority valid

property received from third person

202

Conveyance in the name of the partnership, done

by a partner without authority partnership may

recover it unless the purchaser is in GF and for value


Conveyance in the name of a partner, done with

authority only equitable interest is passed


Conveyance in the name of a partner, done

without authority no effect


If title is in the name of a partner,

Conveyance by a partner with authority (whether

only equitable interest is passed


Conveyance by a partner without authority no

effect
If title is in the name of some but not all of the partners:

If the records disclose partnership interests

partnership may recover if they acted without

authority, except for purchaser in GF and for value


If the records do not disclose partnership
interests partners named in the title may convey

right of the assignor to receive profits.


Does this dissolve the partnership?

No. The rights are separable.


o Does this give the transferee management rights?

No. The rights are separable.


When can separate creditors attach and publicly sell the shares of

partnership creditors.
What is the share of the partners in profits and losses?
o It is done according to agreement.
o A. If only shares are mentioned, losses follow the same

title over property, but the partnership may recover if

they acted without authority


If title is in the name of all of the partners:

Conveyance done by all the partners passes all their

rights over the property


What is the nature of their co-ownership interests over the

partnership property?
o Partner has equal right to posses the partnership property only
for partnership purposes

Compare with normal co-ownership: can use the


o

on claim against the partnership

2. Legal support
What is the rule on equity rights?
o These can be transferred or assigned. What is passed is the

a partner on assets?
o It must be during dissolution only, and after satisfaction of

partners named in the title can convey title, but the

property
Partners right over the property is not subject to:

1. Attachment or execution on personal claims, unless

in the name of the partnership or own name)

except in assignment of rights of all partners over the

property as long as non-injurious to other co-owners


Partners right over partnership property is non-assignable

proportion
B. In absence of stipulation, follow proportion of contribution

But industrial partners do not share in losses


Can designation of profits and losses be left to one of the
partners?

No.
Can it be left up to a third person?

Yes, but it can be impugned if manifestly inequitable.

Unless it has been executed or more than 3 months

have passed.
What are the other rights?
o 1. Right to inspect partnership books at reasonable hour
o 2. Right to demand true and full information of all things
regarding the partnership

203

3. Right to demand accounting

Partner who receives partnership profits holds it in

obliged to sell their interest to the other

trust for everyone


When can there be demand for formal

partners, except of course for industrial

accounting?

1. Excluded from partnership business or

property

2. Right is stipulated in articles

3. When it is just/reasonable
4. Right to dissolve the partnership

Can be done whenever

But there are damages if done in bad faith

1. Obligation to contribute to the common fund


o The partners are debtors to the partnership to the extent of

up to appraised value, or if fungible and

business in hopes of improvement.


2. Fiduciary duties to partners
o A. Duty to account

What is the rule on secret profits/benefits?

Only held in trust for the partnership.

Other partners can seek recovery or dissolve


o

cannot be used without deteriorating, or

restitution (will prejudice business)


What is unlimited liability?

When the partnership is insolvent

It is pro rata and subsidiary

BUT insolvency does not automatically dissolve the


partnership. The partners can continue to pursue the

what was promised.

MONEY: incurs damages and interest for delay

PROPERTY:

Liable for breach of warranty against eviction

Liable for fruits from date of obligation

Risk is borne by the partnership if appraised,

partners.
What if there is default of obligation to contribute what
are the remedies?

1. Specific performance with damages

2. Dissolution of the partnership

NOT rescission, because you cannot have mutual

Duties and obligations of the partners

Still no compulsion to contribute.


But all those who do not contribute are

meant to be sold
REAL PROPERTY: need registration, as stated above
SERVICE OR INDUSTRY:

No specific performance (obviously), so only

the partnership.
B. Duty of diligence

Liable for damages to the partnership through own

fault.
Can he compensate liability for damages with
profits/benefits he might have earned for the
partnership?

No.

BUT he may equitably lessen his liability if

damages for failure to perform


Is there obligation to make additional contributions?

None, generally.

What if there is imminent loss or danger to the

his extraordinary efforts have led to unusual


profits for the partnership.

firm?

204

all the losses to the partnership

When can the acts of a designated managing

partner be opposed?

If done in BF.

And his power may be revoked.


C. Duty of loyalty

Liable to partnership if he took partnership funds or

partnership prior to joining with partnership property


o

property and applied them to his own use with

interest and damages


What if there is a debtor to both the partnership
and a partner?

1. If he pays debt to partner alone split

proportionately between partnership and

Obligations of the partnership

partners credit
2. If he pays debt to partnership alone

apply entirely to the partnership


Exception?
o If the debtor provides otherwise and

business, regardless of nature

Remedies of other partners:


o Exclude industrial partner from the
o

1. To the partners
o A. For amounts disbursed for and in behalf of the partnership

With interest
o B. For contracts entered into for and in behalf of the
o

onerous
D. Separate fiduciary duties of an partner

1. Industrial partner cannot engage in any other

(not personally)
When are non-partners liable?

1. Names appear in firm name

2. Estoppel, as to third persons

Bind the partners who consented or acted under the


representation as well

the debt to the partner is more


o

because of the competing business


3. Subsequent partner only liable for obligations of

partnership
C. Keeping of books at principal place of business, accessible

at reasonable hour
2. To third persons
o A. From firm name: for anyone represented as partner therein
o B. Partners are assumed to be mutual agents for the
partnership, and their acts generally bind the partnership
except:

1. Act is not in ordinary course of business and the

firm, with damages


Avail of benefits derived by the

industrial partner, with damages


2. Capitalist partner cannot engage in competing

business

Remedies of other partners:


o Have that partner give all benefits

one acting has no authority


2. The third person knows the partner acting has no

authority
NOTE: intra-partnership problems cannot prejudice third parties in good
faith, who have expectations that the contract will push through
o Third persons have no duty to know what is stipulated in the

accrued to the partnership and bear

articles of partnership. They can rely on normal right and


authority of the partners to bind the partnership.

205

Dissolution, winding up, termination

What is the effect of dissolution?


o It breaks up the vinculum juris between the partners but does
o

not terminate it until there is full winding up.


But not all dissolution leads to winding up and termination. The

partners can choose to continue on the business.


What are the effects of dissolution?
o Extinguishes the right and power of the partners to represent

o
o
o

each other in the partnership as a going concern.

1. Except winding up and completion of pending

transactions
2. And except acts that would have bound the
partnership had it not been dissolved, when the third

person is not aware of the dissolution, such fact not

Business became unlawful

Death, insolvency, civil interdiction of any partner


What dissolves the partnership with need for court decree?
o [loss of capacity]
o 1. Partner became insane in judicial proceeding
o 2. Partner became incapacitated in performing his part in the

contract
o [equity]
o 5. Partnership business can only be carried out with a loss
o 6. Other equitable grounds
What is the effect of dissolution not in violation of partnership
agreement?
o No damages. Any of the partners can participate in the

advertised in a newspaper of GC.


What are the exceptions to these exceptions?

1. When the partnership purpose was

declared illegal

2. When the partner acting was insolvent

3. The partner has no authority to wind up


But since the partners can choose to continue with the

winding up.
Except, of course, when a partner is expelled in good faith.

The one expelled is disqualified.


The remaining partners have no choice but to wind-up, if the
withdrawing partner insists.

They cannot force continuation of the business,

partnership even after dissolution, and so contracts entered

unless they agree to settle the equity interests of the

into by the partnership after dissolution are not void. In a case,


there was no termination and there was no publication to warn

third persons: creditors can fully expect transactions to push

contract
[wrongful acts]
3. Partner guilty of conduct prejudicial to the business
4. Partner willfully and persistently breached the partnership

withdrawing partner.
What is the effect of dissolution in violation of partnership
agreement?
o The partners seeking dissolution are liable for damages. They

through.
What are the grounds that dissolve the partnership without need
for court decree?
o 1. Dissolution without violation of partnership agreement
o 2. Dissolution with violation of partnership agreement
o 3. Dissolution by force majeure

Loss of specific thing to be contributed

cannot participate in continuation of the business.


Right of the partners who did not dissolve the
partnership?

If the business is discontinued, right to share in net


assets + damages from erring partners.

206

May decide to continue the business. They may

creditors are given priority.

possess the partnership property by either paying a


bond in court or paying the erring partner the value of
o

Limited partnership

his interest in the partnership.


Right of the partners who dissolved the partnership?

If the business is discontinued, right to share in net

assets, less damages.


If the business is continued:

Released from liabilities

Have value of his interest in the partnership


secured by a bond in court or paid in cash,

No. Go through dissolution. This way, the partnership

What are the requirements to form a limited partnership?


o 1. Execute a certificate of limited partnership

Provide who are general, and who are limited partners

Provide their contributions and when these are

less damages.
What is the right of the partner with lawful/just cause to ask for the
judicial dissolution of the partnership due to

returned.

Limited partners cannot be industrial partners.


2. File certificate with the SEC

N.B. Regardless of compliance, who are limited and

fraud/misrepresentation by other partners (see enumeration

certificate?

Those who knew of the falsity are liable to

above)?
o He has a lien on:

1. Surplus of partnership property after satisfying

who are general partners are binding inter se.


What is the rule on false statements in the

third persons prejudiced. (So if the third


person was not prejudiced by the falsity, no

liabilities to third persons


2. Any sum of money paid to purchase interest in the

liability.)
3. Name of the partnership must have LTD.
When can there be cancellation of the certificate?

Dissolution of the partnership

Or all limited partners cease to be such


o How can a certificate be amended?

Signed and sworn by all members


What are the powers of general partners?
o Same as in a normal non-limited partnership.
o But the following acts need consent of limited partners:

[prejudice to the partnership]

1. Any act in contravention of the certificate

2. Act that would make the business impossible to


o
o

partnership

3. Any capital or advances contributed by him


He can stand in the creditors place for payments made by him

for partnership liabilities


o He should be indemnified by the guilty party
What are the priority rules in winding up of partnership?
o 1. To non-partner creditors
o 2. To partners, other than capital or profits
o 3. To partners, for capital
o 4. To partners, for profits
When a partner dissolves the partnership, can he demand for the

return of his shares, contributions, etc.?

207

carry on
3. Confession of judgment against the partnership

4. Use of partnership property other than for

partnership purpose
[expansion of participants]

5. Admitting another person as GP

6. Admitting another person as LP


What is the relationship of general and limited partners?

Not mutual agency, but business trust.

The limited partners thus can engage in other

o
o

businesses.
What are the rights and obligations of limited partners?
o [as to contribution]
o 1. Limited liability only to extent of contribution

What if they interfere with management?

A. They become general partners as to third

o
o
o
o

persons
B. But not as to co-partners, who must

respect the contractual agreement inter se


2. Return of contribution

What are prerequisites to return of contribution?

1. All partnership liabilities to third persons

o
o

paid
o

If there is premature return of

unless there is consent and amendment of certificate


[fringe acts]
5. To inspect books
6. To demand accounting
7. To loan money and transact other business, but should not:

Receive partnership property as collateral

Receive payment if there are not enough partnership


assets to discharge other obligations
[to dissolve]
8. To dissolve the partnership

ONLY when he demands rightfully for his

contributions but he did not get them or


partnership does not have enough properties to return
his contributions whence it also it has not paid

demand for return of contribution

contributions (if no return date stated)


What is returned to him?

Cash, regardless of what he contributed.

Unless, of course, there is agreement

otherwise.
[as to income]
3. Receive share by way of income

After liabilities to creditors have been settled


4. To assign equity interest

Only gets profits, but does not become limited partner

contributions, these are liable for


the obligations to third persons
2. Consent of all members obtained
o Except when there can be legal

3. After six months notice for return of

liabilities
Can limited partners be compelled to contribute to assets of
partnership in case there is imminent loss?
o No, unless if provided in the contract.
o BUT the usual provision that there is forced sale of partnership

(see below)
3. Certificate cancelled or amended to allow

for withdrawal or reduction of members


When can there be legal demand for return of

interest to other partners for failure to contribute does not apply

contribution?

1. Dissolution of partnership

2. Date for return had arrived

208

to LPs.
Does death of a limited partner dissolve the partnership?

No. Only a general partners death (of course, the others can

choose to continue)
The limited partners estate can simply settle liabilities and

in the relationship when they choose to have it

claims of the limited partner.


What is the order of payment of liabilities?
o 1. To third party creditors
o 2. To LPs, for profits
o 3. To LPs, for capital contribution
o 4. To GPs, other than capital or profits
o 5. To GPs, for profits
o 6. To GPs, for capital (N.B. 5 and 6 deviate from usual rule)

Agency is where a person binds himself to render service or to

agency is terminated
Doctrines flowing from preparatory and representative character of
agency:
o 1. Agent is stranger to the contract between the principal and

consent or authority
Elements of contract of agency?

the detriment of the principal


C. Cannot acquire for himself property of the
principal entrusted for disposition
o Unless the principal consents
o Or if the agent purchases after

do something in representation of another, with the latters

to the principal
B. Must choose best course of action for the
principal, and not one that favors himself to

Define agency:

terminated
Consequences:

A. Agent is estopped from asserting adverse


title over subject matter of agency belonging

AGENCY

Neither the principal or agent can be forced to remain

o
o

1. Consent of the principal and agent to form an agency

relationship representative relationship


o 2. Object is execution of a juridical act in relation to third parties
o 3. The agent acts as a representative and not for himself
o 4. Agent acts within scope of his authority
o 5. Consideration: either commission or liberality
Characteristics of agency contract?
o 1. Nominate, principal
o 2. Consensual
o 3. Unilateral and generally onerous
o 4. Preparatory and representative
o 5. Fiduciary and revocable

209

third party no rights, obligations, or legal standing


2. Liabilities pertain to the principal
3. All the acts the principal can do in person, he may do
through an agent except those strictly personal
4. Agent not liable to a contract, except:

A. if he binds himself to the contract expressly

B. if he exceeds limits of powers without giving the


other party sufficient notice of his powers
5. Knowledge of agent is knowledge of principal, except:

A. where agents interests are adverse to the principal

B. agents duty is not to disclose the information

C. person claiming benefit of the rule colludes with the

agent to defraud the principal


Differentiate from a broker:

A broker is just a middleman between two parties, and he does

not represent either and cannot bind either to the transaction.


Not prohibited from purchasing property of the primary party,

constitution of agency, the agent is duly authorized as to any

unlike an agent.
What is the form needed for a contract of agency?
o None in particular; its a consensual contract
o But sometimes a written SPA is needed.
Differentiate an express from an implied agency:
o Express agency there is actual acceptance
o Implied agency implied from:

1. Acts of principal

2. Silence or lack of action

3. His failure to repudiate the agency, knowing that a

person is acting on his behalf without authority


4. Principal delivers power of attorney to the agent

he had full powers.


Elements:

1. Principal manifested a representation of the agents

same place, physically present


N.B. But if not physically present in the same place,

is not implied acceptance


Exceptions to this?

1. Principal transmits power of attorney to the

agent who receives it without objection


2. Principal entrusts to the agent by letter or

authority
2. Third person in GF relied on the representation
3. Third person changed his position, to his detriment,

relying on the representation


Differentiate a general from special agency?
o General agency is one that encompasses all of the business of
o

the principal. (Universal agency)


Special agency is to cover only one or more specific

transactions. (Particular agency)


What is the general obligation of the agent who accepts the
agency?
o Legally bound to carry out the terms of the agency
o Breach: principal can sue for damages, but not compel specific

telegram a power of attorney with respect to


the business in which the latter is habitually

it was given
What is agency by estoppel?
o Even when the agent has exceeded his powers, the principal

as when the power is delivered through mail, silence

person
How long does this power last?

Until notice is rescinded in the same manner in which

should be made liable if he allowed the agent to act as though

and he accepts it without objection if both are in the

B. If the principal states by public advertisement the

engaged in, and he did not reply


How can the agent be duly authorized as to particular third

performance because it doesnt apply to obligations to do


The general rule is that death of the principal terminates the
agency. What is the narrow exception?
o The agent must finish business already began prior to the

persons?
o A. If the principal informs another person that he has given
power of attorney to an agent, the latter becomes a duly

authorized agent as to that third person

principals death, should delay entail any danger


What is the measure of damages?

Based on the prejudice the principal suffered due to


non-performance of the act required

210

What is the obligation of an agent who declines the agency?


o Bound to observe diligence of GFF in the custody of the goods

until the owner appoints an agent or takes charge of the goods


Is the agent liable for contracts he enters?
o Generally, no.
o UNLESS:

1. He exceeds authority

2. He binds himself to the contract personally


o What if the agent exceeds his powers?

1. The principal may ratify.

Can the third party still invoke the agent

ratified the act already.


2. If the principal does not ratify, the contract is

the contract is binding between the agent and third

judgment
o What if the agent breaches this duty?

Liable for damages to the principal


If an agent is empowered to sell his principals property, may he
purchase it for himself?
o No, he cannot. This is provided in Art. 1491. Of course, the

party.
3. But if the third person was aware that the agent
exceeded his powers, the contract is unenforceable

even between the agent and the third person.


What if the agent acts within the scope of his authority as

principal may ratify the sale.


If an agent is empowered to borrow or lend money, may he
transact with himself?
o 1. If empowered to borrow, he may be the lender at the current

written but contrary to a personal understanding between


him and the principal?

The act will bind the principal as to a third party who

in loss or damage to the principal.


N.B. the word is manifestly because the agent does not
guarantee against small loses in the exercise of business

party did not know the extent of the agents powers,

agency
2. Agent possesses a beneficial interest in the subject matter of

agency (ex. selling under a del credere commission)


o 3. Third party commits tort against the agent
What is the duty of diligence of the agent?
o Cannot carry out an agency if its execution will manifestly result
o

unenforceable as against principal. But if the third

also the nature and extent of the authority of the agent


When is the third party directly liable to the agent himself?
o 1. Agent contracts in own name on matter within scope of
o

exceeding his authority?


o No, because the principal has

What is the obligation of one dealing with an agent?


o Must discover, upon his peril, not only the fact of agency but

relies on the power of the agent as written.


Private or secret orders will not prejudice a third party

relying on written powers of agent.


What if the agent acts in a manner more advantageous to

the principal?

He is deemed to have acted within the scope of his

interest

Else, liable for return difference


2. If empowered to lend, he may not borrow without the

principals consent

Else, liable for damages


What if the agent acts in his own name?
o The principal has no right of action against the third persons,
neither do the third persons have right of action against the

authority.

211

principal.
Exceptions to this rule?

1. When the transaction involves the things of the

principal. In this case, the principal is bound.


2. When the principal ratifies the contract or derives

the object of the agency until the principal reimburses


and pays indemnity in 1912 (agent advancing costs of

benefit from it.


What is the remedy of the principal?

The principal can file action as against the agent for

agency) and 1913 (damage caused to agent through

damages.
What if the agent enters into a contract in his own name
on a matter that falls within the scope of the agency?

He is bound to render an account of his transactions

no fault of his)
When can the agent appoint a sub-agent?
o If the principal did not prohibit him from doing so.
o What is the main effect?

Sub-agent is agent of principal too


o When is the agent responsible for the acts of the subagent?

1. When he was not given power to appoint one

2. When he was allowed, but the one chosen was

and deliver to the principal what he received by virtue


of the agency even if it may not be owing to the

principal

This is based on the duty of loyalty and Art. 1891


What if the agent uses the principals own funds?

The agent owes interest from the day he borrowed the

money
This presumes the transaction was not one in breach

effect is not payment of interest on the loan but an


accounting and turn-over in favor of the principal
What is the rule as bonuses or profits derived by the agent through

deliver to the principal what he may have received by virtue of


the agency, even though it may not be owing to the principal
(ex. excess price). Any agreement or stipulation to the contrary
is void.
An agent who derives secret benefit from the contract of
agency is liable to the principal for breach of duty of loyalty, and
o

contracts entered into by the sub-agent


What is the scope of the powers of an agent in general?
o General powers: Only acts of administration
o Even if the principal provides that the agency may do whatever
he deems appropriate, or even if the agency authorizes general

the agency, but not owing to the principal?


o He must account it to the principal. Every agent is bound to

notoriously incompetent/insolvent
What if the principal expressly prohibited appointment of a
subagent?

1. All acts of sub-agent are void as to the principal

2. The agent is responsible personally for the

of the duty of loyalty (scope of agency) or else, the

The agent may retain in pledge the things which are

and unlimited management


What needs a SPA?
o N.B. these are acts of strict dominion
o 1. Making payments not considered as acts of administration
o 2. Effect novation of obligations
o 3. Compromise, submit to arbitration, renounce right to appeal,
o
o
o
o

will forfeit his commissions.


When does the duty to account not apply?

212

waive objections, renounce prescription


4. Waive obligations gratuitously
5. Transfer of immovable (whether onerous or gratuitous)
6. Make non-customary gifts
7. Loan or borrow money


o
o
o
o
o
o
o
o
o

Unless urgently needed to preserve a thing under

administration
8. Lease for more than 1 year
9. Contract for principal to perform service without

3. Cannot sell on credit without principals authorization

If pre-authorized to sell on credit, inform principal with


the names of buyers or else, deemed sold on cash

compensation
10. Bind principal in partnership contract
11. Obligate principal as guarantor or surety
12. Convey or create rights over real property
13. Accept or repudiate inheritance
14. Ratify or recognize obligations contracted before agency
15. Other acts of strict dominion
Must a SPA be in writing?

Technically no, but if its not the contract is virtually

basis
4. Bear risks of collection of proceeds of the transaction under

del credere commission set-up


5. Collect credits for principal

Else, liable for damages


o 6. Take responsibility for fraud and negligence
What are the rights and obligations of the principal?
o 1. The principal is NOT bound by contracts entered into by the
o

agent without or outside scope of authority, EXCEPT:

1. If he ratified it expressly or tacitly

2. Principal allowed agent to act as if he had full

unenforceable. The principal may however pursue


the resulting contract, while the third-party is estopped
from refusing to comply with a contract he willingly

entered into absent written authority of the agent.


Except sale of piece of land (see below)
For the power of an agent to sell a piece of land, what is required?
o It must be in writing, or else it is void.
o What does this provision really mean in light of Ocfemia?

Its void to the extent that a third person cannot

in GF without such notice of revocation


2. Principal is liable for torts committed by the agent within

scope of authority
3. Principal must advance sums necessary for the agency if the
agent requests. If the agent paid for it first, the principal must

enforce the obligation against a principal if the

authority of the agent is not placed in writing.


But if the principal wants the sale to push through,
then it can push through. So its an odd void

authority
3. Principal revoked agency but the third party acted

contract because its subject to ratification.


Does special authority to sell property include authority to

mortgage it?

No, by express provision of Art. 1879.


What are the obligations of a commission agent?
o 1. Take custody of goods
o 2. Not to commingle similar goods belonging to different

reimburse
4. Principal NOT liable for expenses of agent if:

A. Outside scope of authority

B. Incurred due to agents fault

C. Agent incurred them with knowledge of unfavorable

result, if the principal was not aware thereof

D. Express stipulation
5. Must indemnify agent for damages sustained without agents

o
o

fault
6. Pay agent for his services
7. If two or more principals constituted the same agent for a
common undertaking, they are solidarily liable

principals

213

As opposed to constituting two agents by the same

persons, the usual rule is joint liability, not solidary

liability as between the agents


What is the power given to the agent if the principal has not

reimbursed or indemnified the former?


o He may return things which are the subject of agency in pledge
A constituted B as an agent to sell a piece of property for 30K, and

years, Y would appoint X the agent of the vessel. Y


o

cannot revoke the agency at will.


Otherwise, when can an agent withdraw?

He just gives due notice to the principal.

If the principal suffers damage due to the withdrawal,


the agent must indemnify the principal, unless the

B will get 5% commission. B found a buyer, C, but A said that he is

agents basis for withdrawing is impossibility to

no longer interested in selling and terminated Bs authority.

continue performance of obligation without grave

Thereafter, A sold the land to C. Can B ask for commission?


o Yes, A acted in bad faith, so B is entitled to his commission.

The termination of Bs contract of agency is clearly to evade


o

constitute a new agency. EVEN IF the

the agency was for him to sell the property for P10/SQM. The

reason for withdrawing is valid.


When will an agency persist even after death of the
principal?

1. Constituted for common interest of principal and

agents authority was terminated, but when he asked for an


extension, he was given it. Three months after, the seller sold

agent (agency with an interest)


2. There is stipulation pour autrui which a third person

accepted
3. When the agent did not know the death of the

the land to the same buyer the agent found. There was no
badge of bad faith here.
What is an irrevocable agency?
o An agency cannot be revoked if:

1. A bilateral contract depends upon it

2. It is the means of fulfilling an obligation already

detriment to himself.
What happens in the meantime?

The agent continues to act as such for the


meantime until the principal is able to

paying commission.
CONTRAST this to another case where the agent found a
buyer, but the buyer was willing to pay only P9/SQM whereas

X sold Y a vessel on the condition that for the first five

contracted
3. A partner is appointed managing partner and there

principal and the third party was acting in GF


When is agency extinguished?
o 1. Revocation

Even if it is constituted as irrevocable for a definite


term or period the principal just pays damages to

is no just cause
What are examples of agency coupled with an interest?

X sold Y a parcel of land and to help Y pay for the

agent for damages caused if any


There can be implied revocation such as appointing a

purchase price, constituted Y as an agent to subdivide

new agent for the same business, or if the principal

and sell the parcels of land. X cannot revoke the

directly manages the business

agency at will.

214

Or by granting a SPA as regard the same business to

another agent, where he previously granted a GPA to

one agent.
Principal must give notice:

To particular third parties

Or the world, through publication

N.B. a third party with no notice of

agency
o 5. Accomplishment of purpose or object of agency
o 6. Expiration of period of agency
What is the obligation of the agent even after the agency was
terminated?
o Keep confidential matters learned during course of agency, if
confidential

revocation, acting in GF, can still pursue the

contract entered with an agent


When is an agency irrevocable?

1. Coupled with an interest (a bilateral

contract depends upon it)


2. Means of fulfilling an obligation already

contracted
3. Partner is appointed manager of a

COMPROMISE

partnership and removal from management


o
o

is unjustifiable
2. Withdrawal of agent
3. Death, civil interdiction, insanity, or insolvency of principal or
agent

When does agency remain in full force


notwithstanding death of the principal?

A. Constituted in common interest of the

principal and agent


B. There is stipulation pour autrui which has

What is a compromise?
o It is a contract where parties make reciprocal concessions to
put an end to litigation or avoid it altogether.
What matters cannot be compromised?
o 1. Civil status of persons
o 2. Validity of marriage or legal separation
o 3. Ground for legal separation
o 4. Future support
o 5. Jurisdiction of courts
o 6. Future legitime
What is the effect of compromise?
o It has the effect of res judicata between the parties.
o If the one party does not want to comply with the compromise,
the other party may:

Enforce the compromise

OR rescind the compromise and insist on his original

been accepted
What is the effect of transactions entered into by
the agent after death of the principal without

demand

knowing the principal is dead?

If the third party was also in GF, then

4. Dissolution of juridical entity which entrusted or accepted the

LEASE

contract is valid
If the third party was in BF, void for lack of
consent, an essential element

215

What is lease?
o Lease is a consensual, bilateral, onerous, and commutative

lessors consent?
o No. The lessee may not assign the lease without the lessors

contract where one person binds himself to grant temporary


use of a thing or render some service to another, who pays

May the lessee assign the lease to a third person without the

compensation.
Define lease of services and lease of things:
o Lease of things one party binds himself to give to another the

consent.
May the lessee sublease the property to a third person without the
lessors consent?
o Yes. The lessee may sublease the property even without the

enjoyment or use of a thing for a price certain, whether for a

lessors consent. But the lessee must still comply with his

definite or indefinite period

What is the ceiling for the period?

Ninety-nine years
Lease of service one party binds himself to execute a piece

be held liable beyond the amount due from him under the

of work or render some service for a price certain

Without an agency relationship


Distinguish the two kinds of lease:
o In things, the object is a thing, and in services the object is
o

some service
In things, the principal obligation of the lessor is to deliver the

sublease.
What is the nature of the sublease agreement?
o It must comply with the lease agreement as to the manner of
o

use and preservation of the thing.


And so, if the lease agreement provides that the property must
only be residential, the sublease cannot be for the use of the

thing leased to the lessee, and in series the principal obligation


o

responsibility to perform the contract toward the lessor.


May the lessor hold the sublessee for rent due from the lessee?
o Yes, there can be an accion directa. But the sublessee cannot

is to perform some service


In things, specific performance is a remedy, in service, only

property as a commercial area.


Is a lessor responsible for hidden defects in the property that is
leased to a lessee?
o Yes. The warranties applicable to sale also apply to lease,

damages
Is a boundary-based contract between the owner of a jeep and the
driver a lease?
o No. The driver does not spend anything to acquire the jeep.

The boundary and gas obligation which must be covered by the

even if the lessor was not aware of such defects.


What are the obligations of the lessor?
o 1. Deliver the thing, which must be fit for the use intended
o 2. To make necessary repairs on the thing to keep it fit for such
use

driver and the keeping of excess earnings is just a system of


compensation. Instead, there is an employer-employee
o

relationship.
Lease of rural and urban lands

216

Unless provided otherwise


3. Maintain the lessee in peaceful and adequate enjoyment of

the lease during the contract


What are the obligations of the lessee?
o 1. Pay the price of lease

2. Use the thing leased with diligence of GFF, devoting it to use

extended, the option to purchase is not renewed (it is a

stipulated (or according to nature of the thing if none is

stipulated)
o 3. Pay expenses for deed of lease
What is the remedy for breach by either party?
o 1. Rescission with damages
o 2. Damages alone
What if the thing leased is lost fortuitously?
o The lease is terminated.
o If the thing is reconstructed, there is no automatic renewal of

the end of the lease contract, the lessee continues enjoying the
lease for 15 days, with acquiescence of the lessor and no
notice to contrary provided by lessor.
Period of the new lease is according to provisions of law:

A. for rural lands, duration is what is necessary to

stipulated or its nature


What are the different instances where the purchaser of the thing
leased cannot terminate the lease?
o 1. When the lease is recorded in the ROP
o 2. There is a stipulation in the contract of sale that the

the lease contract, if there is no BF involved.


What is tacit renewal of a contract of lease (tacita reconduccion)?
o A new contract of lease is impliedly created or established if at

separate contract, and is not a mere clause/term).


What are the grounds to eject a lessee judicially?
o 1. Period has expired
o 2. Lack of payment of price
o 3. Violation of conditions of contract
o 4. Lessee devotes the thing leased to use other than what was

purchaser will respect the lease


o 3. The purchaser actually knows of the existence of the lessee
o 4. The sale is fictitious
o 5. The sale is pacto de retro
What is the rule as to improvements introduced by the lessee on
the property, upon termination of the lease?
o For useful improvements

PREMISE: these are suitable to the purpose of the

gather fruits it may yield for a year


B. for urban lands, duration is depending on rent paid

lease and did not alter the form/substance of the

(yearly if monthly rent; monthly if weekly rent, etc.)

But if lessee has stayed more than 1 year,

the courts may fix a longer term than the

usual monthly rent


If lessee has stayed more than 6 months, the

courts may fix a longer term than the usual

weekly rent
If lessee has stayed more than 1 month, the

courts may fix a longer term than the usual


o
o

daily rent
But all other terms of the contract are the same.
Of course, if there is an option to purchase the leased property

property
The lessor must pay the lessee of the value of
improvement
What if the lessor refuses?

The lessee can remove the thing, even if it

causes damage
For ornamental improvements

Lessee not entitled to reimbursement

But the lessee may remove it if it doesnt cause any

damage
But the lessor may choose to pay the value of the
thing, which terminates the lessees right to remove

within the original lease period, and it expires, and only tacitly

the improvement

217

Do the rules for builders in GF under property law apply to

Principles of torts and classification

lessees?

No, lessees are not builders or possessors in GF

because they know their right and occupancy of the

connected or unconnected with but independent from any

land is based on the contract of lease.


If the period of the lease is not fixed, what is the period?
o A. for rural lands, duration is what is necessary to gather fruits
o

it may yield for a year


B. for urban lands, duration is depending on rent paid (yearly if

monthly rent; monthly if weekly rent, etc.)

But if lessee has stayed more than 1 year, the courts

may fix a longer term than the usual monthly rent


If lessee has stayed more than 6 months, the courts

may fix a longer term than the usual weekly rent


If lessee has stayed more than 1 month, the courts

may fix a longer term than the usual daily rent

separate action for quasi-delict (Art. 2176 of NCC). When he


has recovered from one action, the injured party is barred from
the other remedy because he cannot recover damages twice

What is a contract for piece of work?


o One where the contractor binds himself to execute a piece of

work for the employer, in consideration of a certain price or


o

compensation.
The contractor may either employ only his skill/labor, or furnish

for the same act.


Differentiate between double recovery and double remedy?
o Double recovery is not allowed; double remedies are allowed.
o An aggrieved party may resort to both remedies simultaneously
or successively, but may only recover the bigger amount. So if

the material himself.


What is the rule on loss if the contractor bound himself to

he successively files the cases, he can only recover from the


2nd if the amount adjudged is larger and only to the extent of

purchase the material?


o If the loss occurs before the delivery, the contractor bears the
o

contractual relation, causes damage to another person


o Whether punishable or not punishable by law
o Whether criminal in character or not
Classify torts:
o Whether intentional, voluntary, or negligent
o Key element: it must cause damage to another
Can an act that breaks a contract also be a tort?
o Yes.
What is the rule prohibiting double recovery?
o The injured party cannot recover damages twice.
o Ex. in negligence cases, the aggrieved party can either enforce
civil liability under culpa criminal (Art. 100 of RPC) or file a

Contract for piece of work

Define quasi-delicts:
o Fault or negligence of a person, who by his act or omission,

loss
EXCEPT: if there is delay in receiving it (mora accipiendi)

the excess.
What are the elements in an action based on quasi-delict?
o 1. Fault or negligence of the defendant
o 2. Damage suffered by the plaintiff
o 3. The relation of cause and effect between the
fault/negligence of the defendant and the damage incurred by

TORTS

plaintiff

218

Recall: that for a collision of cars, the passenger has remedies:


o 1. Culpa contractual against employer car wherein he is

riding, because there is a contract of transportation

Defense of ER is extraordinary diligence


2. Culpa aquliana against either driver and their companies

supervision
3. Culpa criminal against either driver, with the employers liable
subsidiarily if the drivers are insolvent

Defense of ER is solvency of the EE

in the formers custody


Differentiate claim for employers liability under Art. 2180 of the

their company

What is the definition of Minor here?

Still 21, and not 18, because RA 6809 has

complete emancipation of one who has


reached 18 years old.
2. Guardians, as re: damage caused by minors or
incapacitated persons under their authority and living in their
o
o

damage caused by employees on occasion of their functions


4. Employers, as re: damage caused by employees and

supervision of the employee


The employee need not be insolvent, because the
employee and employer are both primarily liable (joint

excepted marriage and torts from the

company
3. Owners and managers of establishment/enterprise, as re:

job foreign to his usual duties


6. Teachers or heads of establishments of arts and trade, as

NCc and Art. 103 of the RPC.


o Under the NCC, in quasi-delicts:

Only requires preponderance of evidence

Employers liability is direct and primary

Defense available: due diligence in the selection and

Who are possible tortfeasors?


o 1. Direct tortfeasor
o 2. Persons made responsible for others
Who are the persons who can be made responsible for others?
o 1. Parents, as re: damage caused by minor children who live in

the official alone is responsible.


What is a special agent?

A government employee who is performing a

re: damage caused by students or apprentices when they are

The tortfeasor

owner of a vehicle for acts of his driver


5. State, when it acts through a special agent

But not when the damage is caused by the official to


whom the task done properly pertains. In this case,

(joint tortfeasors)

Defense of ER is diligence of GFF is selection and


o

N.B. this thus covers responsibility of the registered

tortfeasors)
Under the RPC, in civil liability for crimes:

Employers liability is subsidiary; so the employee has

to be found insolvent
The felony committed by the employee must be in the

discharge of his duty


Requisites for subsidiary civil liability of
employer?

1. ER-EE relationship

2. ER is engaged in some industry

household helpers acting within scope of duties

Even if the employer is not engaged in


business/industry

219

3. EE committed criminal act in the discharge

negligence of an employee?
o There s a presumption that the employer is also negligent and

of his duties (not necessarily *while* in the

discharge of duties)

4. EE is insolvent
What if the felony was committed by a minor?

Then it is an exception to the general rule,

because under Art. 101 of the RPC, the

selection and supervision of the employee


X sold his car to Y and Y failed to register it. Y ended up being
registration was still under Xs name, can X be sued?
o Yes, the suit can prosper against the registered owner, but it is

children is also primary, and not subsidiary


Does the ER need to be impleaded?

No. Enforcing liability subsidiarily is just an

the actual owner who is ultimately liable. The purpose of car

enforcement issue. Therefore, neither can

registration is to reduce the difficulty in identifying the party

there be modification or relitigation. The


enforcement motion, however may be

liable in accidents.
What is the rule if the owner of the vehicle is inside the vehicle with
his driver when the accident happened?
o Art. 2154: if the owner was in the vehicle and could have,

conveniently litigated within the same

proceeding at that which held the EE liable.


Is a hospital liable for the negligence of an independent contractor

through due diligence, prevented the misfortune, then he is

physician?
o Generally, hospitals are not liable under the Schloendorff

doctrine, which deems physicians as professionals and


beyond the control of the hospital.
Exceptions to this rule?

1. Apparent authority

If the hospitals actions as principal misleads

supervision of employees.
What is the difference in liability?

If the owner is in the car, he can demand


reimbursement of of the amount from his driver

the public into believing that the relationship

solidarily liable with the driver


Thus, his defense is different from the employer who is not in
the car, who can use diligence of GFF in selection and

independent contractors whose performance of duties are


o

is thus solidarily liable


Rebuttable by showing exercise of diligence of GFF in

responsible for a car accident due to negligence. Since the

liability of parents for felonies of minor

What is the presumption when an injury is caused by the

or authority exists
2. Corporate negligence

If the hospitals fail to give reasonable effort

after paying
If the owner was not in the car, he can demand
reimbursement of the whole amount from his driver

in monitoring or overseeing the treatment

after paying
When is a driver presumed negligent?

1. Guilty of reckless driving at least twice in the

prescribed and administered by the


physicians practicing in their premises

preceding two months


2. Violation of traffic regulations at least twice in the
preceding two months

220

3. Violating a traffic regulation during the mishap


What is the liability of joint tortfeasors (Art. 2194)?
o If two or more persons are liable for a quasi-delict, their
o

defendants acts, then the amount recoverable by the plaintiff is

responsibility is solidary.
The responsibility is solidary so long as the accident causing

mitigated by the courts.


What is imputed negligence?
o The negligence of a certain person in a transaction or act
which gave rise to the injury complained of is imputable or

the injury was due to the concurrent acts of two or more

chargeable against the person for whom he was acting or

persons: whether quasi-delict, intentional tort, strict liability (or


arising from criminal offenses or even if there is an underlying

doctrine)?
o Where both parties are negligent in such a way that it would be

contract).
When can the State be a tortfeasor?
o 1. Performance of proprietary functions
o 2. State enters into contract with private person
o 3. Imputed liability under Art. 2180 for acts of special agents

impossible to determine whose negligence was the proximate


cause, then the party with the last clear opportunity to avoid the
accident through proper care and failed to do so is the party

Proximate cause

What is proximate cause?


o That cause which, in natural and continuous sequence,
unbroken by any efficient intervening cause, produces the
o

injury and without which the result would not have occurred
Remote cause:

One that is removed or separate from the proximate

cause of the injury


Immediate cause:

Final act in the series of causes leading to a particular

solely responsible for the injury.


Elements of last clear chance?

1. Prior negligence of the plaintiff

2. Defendant knew the plaintiffs negligence

3. Defendant had last clear chance to avoid the peril

but failed to do so
4. Accident occurs due to the negligence of the
defendant

Intentional torts

result or event, directly producing the result


(Stricter that proximate cause in torts, only

proximate cause is needed)


What is contributory negligence?
o If the negligence of the plaintiff cooperated with the negligence

What are the elements of abuse of right?


o 1. Legal right or duty
o 2. Exercised in bad faith
o 3. For the sole intent of injuring or prejudicing another
o Ex. creditors already discussed pari passu division of claims
against insolvent person, then one creditor assigned his claim

of the defendant in bringing about the injury, such negligence


o

against his associates.


What is last clear chance (or discovered peril or humanitarian

of the plaintiff would be an absolute bar to recovery.


If the negligence of the plaintiff was merely contributory, the

immediate and proximate cause to the injury still being the

221

to a third person so the latter can recover in full


What are the elements of acts contrary to law?
o 1. Act is willful or negligent
o 2. It is contrary to law

o
o

3. Damages suffered by the injured party


When does this apply?

When there is no specific law providing for indemnity

o
o
o

for the violation of such and damage is caused


What are the elements of acts contrary to morals?
o 1. Legal act
o 2. Contrary to morals, good customs, public order, or public

the officer thought in GF that the plaintiff is not entitled to some

policy
o 3. Done with intent to injure
What the elements of unjust enrichment?
o 1. No just or legal ground for defendants enrichment
o 2. Enrichment on the part of the defendant
o 3. Enrichment is at the expense of the plaintiff
o 4. Damage or loss suffered by the plaintiff
o When does this claim apply?

When there is no other remedy in contract, quasi

contract, crime, or quasi-delict.


And so if there is failure to pay for services, but there

o
o
o

plaintiffs constitutional rights and liberties

This is an independent civil action.

Can have exemplary or moral damages.


What is the required evidence?

Preponderance of evidence.
Is good faith a defense?

No.
Differentiate this from the Bill of Rights:

Under the Bill of Rights, the act complained of must


be committed by public officers. Under the NCC, it

a private charitable institution


What is meddling with social relations?
o 1. Prying into anothers residence
o 2. Meddling or disturbing the private life or family relations of

another
3. Intriguing to cause another to be alienated from his friends
4. Vexing or humiliating another on account of beliefs, lowly

can be by public officers or private individuals.


Under the NCC, there can be indirect or direct

violations.
What kind of duty is contemplated here?

Duty that is owed to an individual particularly, and


there is particular injury to him. It does not cover

station in life, place of birth, physical defect, or other personal

method
o Applies to agricultural, industrial, and commercial enterprises
What is violation of civil/political rights as a tort?
o When public officers or employees or a private individual
directly or indirectly obstructs, violates, or impedes/impairs the

enrichment.
What is thoughtless extravagance?
o If done during period of acute public want or emergency
o May be stopped by the courts at the instance of government or

o
o

relief or service.
What is unfair competition as a tort?
o It must be through the use of force, intimidation, deceit,
machinations, or other unjust, oppressive, or highhanded

is a contract, file under the contract and not unjust

2. Neglect or refusal to perform a duty owing the plaintiff


3. Damage to plaintiff
Note: it must be done with bad faith. This does not apply when

condition
What are the elements of dereliction of duty?
o 1. Public servent defendant exercises ministerial duty

222

duties owing in general to the public, collectively.


What are the elements of interference in contractual relations?
o 1. Valid contract
o 2. Outsider knew the existence of the contract

3. The third party induces one party to breach the contract

1. Accident would not ordinarily occur in the absence

o
o

without valid justification or excuse


4. Damage
What are the defenses by the one charged with tortuous

of negligence
2. Caused by an agency or instrumentality under the

exclusive control of the defendant


3. Not due to any voluntary action or contribution of

interference?

1. Business competition and lawful means are used

2. Honest advice in GF, in his duty as an adviser

3. Lack of inducement

4. If the interest protected is superior to the interest


o

broken in social importance


What is the liability of the party induced to break the
contract?

In bad faith: liable for all the natural and probable

the plaintiff
What are the defenses against negligence?
o 1. Contributory negligence

See above for discussion.

Remember that this is only a partial defense that


o

mitigates damages.
2. Assumption of risk

But note: even if there is an assumption of risk,

consequences of his act or omission, whether

measures must be taken by the defendant to minimize

foreseen or unforeseen
In good faith: only liable for foreseen consequences

Negligence

When is there presumption of negligence?


o 1. Res ipsa loquitur
o 2. If the death or injury results from possession of dangerous

weapon or substances, except when possession of such is

indispensable to his occupation or business


o 3. Violation of traffic rules
o 4. Common carriers
o 5. Repondeat superior
What is res ipsa loquitur?
o Where a thing is shown to be under the management of the

risk
3. Last clear chance
See above discussion
NOTE: that this doctrine will not apply as a defense
for breach of contract of carriage. Neither can one
negligent party use this as a defense against liability
to a third person, by pointing at the negligence of
another. It must be between two parties in a situation
where it is impossible to determine whose negligence

defendant or his employees, and the accident in the ordinary

course of events would not have occurred had there been


proper care, it gives rise to evidence that the accident was due
o

risk to the injured party


Elements?

1. Plaintiff knew the risk is present

2. He understood its nature

3. He freely and voluntarily chose to incur the

to the fault of the defendant, unless rebutted


What are the elements of res ipsa loquitur?

it was that was the proximate cause of the accident.


4. Prescription

What is the usual prescription?


4 years from discovery of the act (discovery
rule)

223

1 year if from the act of a public officer

They are liable for injuries caused by defective condition of

involving exercise of powers/duties


What are the prescriptive periods under the

roads and streets.


This special liability trumps provisions on liability arising from

charters and general laws.


The road or street need not necessarily be owned by the LGU

Consumer Act?

4 years from purchase for apparent defects

2 years from knowledge or purchase for


o
o

o
o

the control of supervision of the said road/street.


What is the responsibility of a proprietor of a building/structure?
o He is responsible for injuries caused by its total or partial
o

supervision of employees
7. Mistake and waiver

See Oblicon discussion


8. Damnum absque injuria

What is this?

Damage without injury, arising from a

(thus it can be a national road). What matters is that it is under

hidden defects
5. Fortuitous events

See Oblicon discussion


6. Diligence

For employers: diligence of a GFF is selection and

persons exercise of his legal rights.


If the injury arises from abuse of right, then damnum

absque injuria does not apply.


9. Emergency rule

What is this?

One who suddenly finds himself in danger

v. CA)
Proprietors likewise are responsible for:

1. Explosion of machinery not taken care of with due

diligence
2. Excessive smoke harmful to persons/property
3. Falling trees situated near highways or lanes, if not

due to force majeure


4. Emanations from tubes, canals, sewers, or deposits

of infectious matter constructed without precautions


What is the responsibility of manufacturers and processors?
o In general, manufacturers and processors of foodstuffs, drinks,
toilet articles, and similar goods are liable for damages for

and is required to act without time to

death and injuries caused by noxious or harmful substances

consider the best means to avoid the danger

used, even if there is no contractual relation with the

is not guilty of negligence for failing to

collapse, if it be due to lack of necessary repairs


The doctrine of last clear chance does not apply here (De Roy

choose the best option, in hindsight


Unless the emergency in which he finds himself in is

consumers.
When is a product defective under the Consumer
Protection Act (CPA)?

When it does not offer the safety rightfully expected of

of his own doing

it, taking into account: a) presentation of the product,

Special liability in particular activities

b) use and hazards reasonably expected out of it, and

What is the special liability of provinces, cities, municipalities as to


roads and streets?

224

c) time it was put into circulation


NOT simply because a better product is on the market

When is the manufacturer or producer not liable?

1. It did not place the product in the market

2. It placed it in the market but it was not defective

3. Consumer or third party is solely at fault


When is the seller liable?

1. When it is not possible to identify the manufacturer

or producer or importer
2. The product supplied does not clearly identify the

manufacturer or producer or importer

3. He does not adequately preserve perishable goods


What is the liability for product or service imperfection?

If the products are unfit or inadequate for

construction?

He is solidarily liable with the contractor


What is the effect of accepting the building?

It is not a waiver of action on these claims


What is the prescriptive period?

Within 10 years of collapse of building


Can the owner of the building demand reconstruction
thereof if the building collapses due to the fault of the
engineer, architect, or contractor?

Yes, he may. The obligation is an obligation to do. If

consumption, or there is inconsistency with

a person is obliged to do something in contravention

information in the container


The provider must correct the imperfection within 30

days of demand by the consumer (parties can change

Strict liability
Who are instances that fall under the doctrine of strict liability?
o 1. Possessors and users of animals
o 2. Nuisance
o 3. Product liability/violations of Consumer Act
What is the liability of possessors and users of animals?
o The possessor, and not just the owner, of the offending animal

paid

3. Proportionate price reduction


When can an engineer, architect, or contractor be liable for
collapse of a building?
o The engineer or architect who drew up plans and specifications

is liable even if the animal escapes or becomes lost. It does

is liable for damages if within 15 years from completion, if it

of an obligation, it may be executed at his own cost.


Or what has been poorly done can be undone, and
then reconstructed.

period to 7-180 days, min and max)


What are the options of the consumer if the
provider fails to correct it?

1. Replacement of the product

2. Immediate reimbursement of the amount

3. violation of terms of contract


What if the engineer/architect supervises

collapses due to:

1. defects in the plans OR

2. defects in the ground


The contractor is liable for damages if within 15 years the

edifice falls due to:

1. defects in construction

2. use of inferior materials

225

not matter that the dog was tame and was merely provoked.
The owner/possessor is liable as long as the animal causes

injury.
Nuisance: see Property Law
Manufacturers and processors: See above discussion

DAMAGES

o
o

What are the different kinds of damages?


o 1. Actual or compensatory
o 2. Moral
o 3. Nominal
o 4. Temperate or moderate
o 5. Liquidated
o 6. Exemplary or corrective
What are the general principles applied to damages?
o 1. Amount must be fair, just, and commensurate to the damage
o 2. Damage and amount proven by competent evidence
o 3. Only proximate damages, not remote or speculative, may be

position as he would have been if he had not sustained the

injury
What is the recoverable value in the following instances
o Damage to property value of the property at the time of
o

recovered
What must be proved so that damages may be recovered?
o 1. Injury (legal invasion of a right)
o 2. Breach of duty (wrongful act, not just hurtful)
o 3. Breach must be the proximate cause of the injury

destruction
Personal injury and death

1. Reasonable expenses incurred to treat his or her

relatives injury

2. Future medical expenses

3. In case of death, for wake and funeral expenses

N.B. Expenses after burial are NOT compensable


Differentiate recoverable damages based on breach of contract or
quasi-contract, depending on GF or BF:
o Defendant in GF liable for natural and probable
consequences of the breach which the parties could have

What are actual damages?


o Compensation for pecuniary loss actually suffered and proved

by the plaintiff.
What is the general rule?
o One is entitled to adequate compensation only for pecuniary
o

have pertained to him


What is restitutio in integrum?
o Amount awarded to the plaintiff must be that sum which will put
the party who was injured or who has suffered in the same

Actual or compensatory damages

1. Cano emergente loss of what a person already possesses


2. Lucro cesante failure to receive as a benefit that would

loss suffered by him as has been proved.


Measure is not defendants gain, but plaintiffs loss.

Except in certain cases like in the IP Code (measured

foreseen when the obligation was entered into


Defendant in BF liable for all damages reasonably

attributable to the obligation


What about recoverable damages from quasi delicts?
o Defendant is liable for all damages which are the natural and
probable consequences of the act or omission. It need not

by benefit of defendant)
What is the exception that recovery is limited to proven loss?
o 1. Stipulation
o 2. Provided by law (ex. fixed indemnity)
What are the kinds of actual damages?

have been foreseen or reasonably foreseen by the defendant.


A. What are covered by cano emergente?
o Court only gives credence to those expenses supported by a
receipt and which appear to have been incurred in connection
o

226

with the wake, death, or burial of the victim.


The following cannot be recovered:

1. Incurred after considerable lapse of time from burial

or with no relation death, wake, or burial


2. Incurred for purely aesthetic or social purpose
3. Receipt appears to have been modified
4. Incurred before date of slaying of victim
5. Not in fact shouldered by heirs

Ex. plane tickets of relatives or in-laws

6. Merely incidental

7. Cannot reasonably be itemized


B. What is disability/commercial credit?
o 1. Actual damages for loss or impairment of earning capacity

by law may demand support from the person causing


death for a period not beyond 5 years (court sets the

for personal injury (temporary or permanent)


2. Actual damages for injury to business standing or

length of time)
E. Interest
o 1. If there is a stipulation as to rate, apply it, unless it is
o

reasonable certainty
B. Obligation involving loan or forbearance of money:
12%

o
o

deceased
Exceptions when non-availability of

documentary evidence is fine:

1. Victim was self-employed earning less

can be established with reasonable certainty


Compute from date of judgment of trial court,
if indemnities cannot be established with

death])
How are net earnings proved?

Sufficient evidence to prove net earnings of the

unconscionable and excessive apply legal rate


2. If interest is imposed, but no rate stipulated, apply legal rate

A. Obligation involving payment of damages: 6%

Compute from date of demand if indemnities

income necessary living expenses)

Note: Life expectancy: (2/3 x [80 age at time of

proof of amount of living expenses


What if the deceased was obliged to give support
according to law?

The recipient who is not an heir called to inheritance

commercial credit
C. What is fixed indemnity?
o It does not replace the loss of earning capacity
o P50K payment to heirs of deceased
o P75K payment for qualified rape
D. What is the loss of earning capacity?
o Loss of earning capacity = Life expectancy x (Gross annual

Fixed at 50% of the gross income in the absence of

than minimum wage


2. Victim was employed as a daily wage

worker earning less than minimum wage


How are living expenses proved?

227

Compute from date of default (extrajudicial or

judicial demand)
3. Once there is finality of judgment , interest becomes 12%
Can there be interest for unliquidated damages?

No. There must be certainty of amount of damages

before interest is demanded.


F. Attorneys fees
o What is the general rule?

Attorneys fees cannot be recovered


o What are the exceptions?

1. Exemplary damages are awarded

2. Defendants acts/omissions compelled plaintiff to

litigate with third persons or incur expenses to protect

his interests
3. Malicious prosecution
4. Clearly unfounded civil actions against plaintiff
5. Defendant grossly acted in BF in refusing to satisfy

a plainly valid claim


6. Action for legal support
7. Action for recovery of wages
8. Indemnity under ECSIF and employers liability

laws
9. Separate civil action to recover culpa criminal

by reason of the defendants culpable action


What are the requisites of moral damages?
o 1. Injury sustained by claimant (physical, mental, or
o
o

liability

10. Double judicial costs awarded

11. Any other case where the court deems it equitable


What are the rules in awarding attorneys fees?

Plaintiff must clearly state basis in the complaint

Court must state basis for the award, or else its null
and void

As fees go to lawyer

As damages go to client
When can there be attorneys lien?

There can be none, over real property subject of

What are moral damages?


o To alleviate the moral suffering the injured party has undergone

litigation
If the action is for damages, can claim a lien on the

award
What is the basis of the amount?

That which is stipulated in the retainer agreement

If there is none stipulated, it is fixed on the basis of

psychological)
2. Culpable action or omission established
3. It is the proximate cause of the tortuous act (fraud or bad

faith)
o 4. Award of damages predicated on:

Physical injuries (criminal or tortuous)

Lascivious acts (seduction, rape, etc.)

Adultery or concubinage

Arbitrary or illegal detention or arrest

Illegal search

Libel, slander, or other defamation

Malicious prosecution

Disrespect for the dead or interference with funeral

Acts or omissions in Human Relations chapter


o 5. Testimony or evidence proves the suffering caused
When is moral suffering presumed?
o 1. Rape
o 2. Murder
o 3. Homicide
When may moral damages be awarded?
o Culpa aquiliana Physical injuries or intentional tort
o Culpa contractual bad faith or gross negligence involved

Except for banks: no need to prove bad faith


o Culpa criminal physical injuries, lascivious acts, adultery or
concubinage, illegal or arbitrary arrest, illegal search,

quantum meruit the reasonable worth of his


services
Moral damages

228

defamation
o Contract of carriage death of passenger, or fraud/BF
o Labor cases if there is bad faith or oppression against labor
Who may recover moral damages?
o Only the party who suffered.

Except: parents of the child seduced, abducted, raped, or

abused
What are the factors in determining amount of moral damages?
o 1. Sentimental value
o 2. Extent of humiliation
o 3. Extent of pain and suffering
o 4. Standing of the offender and offended
o 5. Age of the claimant
What are the elements of malicious prosecution in criminal case?
o 1. Fact of prosecution and the action terminated with an

has to just prove breach of right no need to prove bad faith,

may be valid
Act of bank which merely relied on entries in a deed of
mortgage without checking or adjusting its records, leading to

acquittal
o 2. Prosecutor acted without probable cause
o 3. There was legal malice
What are the elements of malicious prosecution in civil case?
o 1. False allegation
o 2. Lack of probable cause
o 3. Malice or bad faith
o 4. Injury
o 5. Action terminated
Can corporations and other artificial beings be entitled to moral

prejudice to plaintiff
Can nominal damages co-exist with actual damages or any other
kind of damages for that matter?
o No. Nominal damages ALWAYS stand alone.

Temperate damages

What are temperate or moderate damages?


o These are more than nominal, but less than actual. These are
awarded when the court finds some pecuniary loss has been
suffered but the amount, from the nature of the case, cannot be

established with certainty.


Ex. NAPOCORs construction of geothermal plants resulted into
damages to a nearby resort. There is pecuniary loss, but it cannot be
ascertained so temperate damages were awarded.

corporate reputation)

Liquidated damages

Nominal damages

fraud, or malice.
Examples of violation of nominal damages:
o Violation of due process in labor cases, although dismissal
o

damages?
o No.
o EXCEPT libel or slander against the corporation (damage of

Assessment of nominal damages up to the court. The plaintiff

What are nominal damages?


o In order that a right of the plaintiff, which has been violated or
invaded by the defendant, may be vindicated or recognized
o Not for the purpose of indemnifying the plaintiff for loss suffered
What is the nature of nominal damages?
o If there is absence of proof of actual damages, only nominal

damages are awarded

229

What are liquidated damages?


o Those agreed upon by the parties in a contract, in case of
breach thereof.
Can these co-exist with actual damages?
o No. Liquidated and actual damages are mutually exclusive.
What is the general rule?
o Liquidated damages substitute for damages and interest.
Exceptions?

o
o
o

1. Stipulated otherwise
2. Interest was not paid
3. Fraud

Exemplary or corrective damages

What are exemplary damages?


o Those imposed by way of example or correction for the public
good.
o In addition to moral, temperate, liquidated, or actual damages
Who determines when exemplary damages are given?
o The courts, on its discretion. It cannot be:

demanded

alleged

waived
What must be established first?
o Claimant must first establish its right to actual, moral,

o
o

exemplary damages being awarded


7. Loss would have resulted anyway
8. Defendant has done his best to lessen the plaintiffs loss or

injury since the filing of the action


What is the duty of the party suffering loss or injury?
o Must exercise diligence of GFF to minimize damages arising

from the act or omission in question


What is the doctrine of avoidable consequences?
o A party cannot recover damages from consequences which the
party could reasonably have avoided
These are acts or omissions of the plaintiff after the
defendants act or omission (as opposed to contributory
negligence, which precedes the act or omission)

Damages in case of death

or malevolent manner
Culpa criminal attended by aggravating circumstances

1. Indemnity for death: fixed at 50K


2. Indemnity for loss of earning capacity
o Unless the deceased had no earning capacity at said time
o If deceased obliged to give support, the recipient who is not an
heir may demand support from the accused for a period not

Mitigation of damages

6. When defendant acted upon advice of counsel which led to

temperate, or liquidated damages


When is it awarded?
o Culpa aquiliana attended by gross negligence
o Culpa contractual wanton, fraudulent, reckless, oppressive,
o

What are the factors that mitigate liability?


o [defenses]
o 1. Diligence of a GFF
o 2. Mitigating circumstances
o [acts of other party]
o 3. Contributory negligence of the other party
o 4. Plaintiff himself contravened terms of the contract
o 5. Plaintiff derived some benefit from the contract
o [equity]

230

exceeding 5 years, in a period set by court


3. Moral damages for mental anguish
o ONLY spouse, legitimate or illegitimate descendants and
ascendants (SAD)
o Not brothers/sisters
4. Exemplary damages
o If crime attended by aggravating circumstances
5. Attorneys fees and expenses of litigation
o When a separate civil action to recover civil liability from a
o

crime is filed
Or there are exemplary damages awarded

6. Interests, if proper