PERSONS & FAMILY RELATIONS

Effect and Application of

Laws ........................................ 2
WHEN LAWS TAKE EFFECT ................................. 2
IGNORANCE OF THE LAW .................................. 2
RETROACTIVITY OF LAWS .................................. 2
ACTS CONTRARY TO LAW ................................... 2
WAIVER OF RIGHTS ............................................ 2
REPEAL OF LAWS ............................................... 2
TWO KINDS OF REPEAL OF LAW ................................... 2
JUDICIAL DECISIONS .......................................... 2
DUTY TO RENDER JUDGMENT ............................ 3
PRESUMPTION AND
APPLICABILITY OF CUSTOM ............................... 3
LEGAL PERIODS .................................................. 3
POLICY ON LAST DAY BEING A LEGAL HOLIDAY/SUNDAY ... 3
APPLICABILITY OF PENAL LAWS ........................ 3
EXEMPTIONS UNDER INTERNATIONAL LAW (THEORY OF
EXTRATERRITORIALITY) ............................................ 3
CONFLICT OF LAWS ............................................ 3
CONFLICT OF LAWS/ PRIVATE INTERNATIONAL LAW ........ 3
SOURCES ............................................................... 3
EXAMPLES OF CONFLICT OF LAW
RULES IN THE PHILIPPINES ......................................... 3
RULE ON PROPERTY ................................................. 4
RULE ON SUCCESSION ............................................... 4
RULE ON EXTRINSIC VALIDITY OF CONTRACTS ................ 5

SPECIAL CONFLICT OF LAW RULES .................... 5

MARRIAGE ............................................................. 6
DIVORCE AND SEPARATION ........................................ 8
ANNULMENT AND DECLARATION OF NULLITY ................. 8

Human Relations .................. 8

ABUSE OF RIGHT ................................................ 8

ACTS CONTRARY TO LAW ................................... 9
ACTS CONTRA BONUS MORES ........................... 9
PRINCIPLE OF UNJUST ENRICHMENT................. 9

Persons and Personality ..... 10

CAPACITY TO ACT .............................................. 10

CIVIL PERSONALITY ................................................. 10
RESTRICTIONS ON CAPACITY TO ACT ........................... 10
DOMICILE AND RESIDENCE OF PERSON ........... 13
FOR NATURAL PERSONS .......................................... 13
FOR JURIDICAL PERSONS ......................................... 13
DOMICILE VS. RESIDENCE ......................................... 13
REQUISITES OF DOMICILE ......................................... 13
KINDS OF DOMICILE ................................................ 13

Family Code .......................... 13

Marriage ............................... 13

REQUISITES ....................................................... 13
NATURE OF MARRIAGE ............................................ 13

KINDS OF REQUISITES ............................................. 13

EFFECT OF ABSENCE OF REQUISITES ........................... 13
ESSENTIAL REQUISITES ............................................ 13

EFFECT OF MARRIAGES CELEBRATED

ABROAD AND FOREIGN DIVORCE ..................... 16
MARRIAGES CELEBRATED ABROAD ............................. 16
PROOF OF FOREIGN MARRIAGE .................................. 16
FOREIGN DIVORCES ................................................ 16
VOID AND VOIDABLE MARRIAGES .................... 16
PRESUMPTION OF MARRIAGE .................................... 16
VOID MARRIAGES ................................................... 17
ACTION OR DEFENSE OF NULLITY .............................. 20
ANNULLABLE MARRIAGE .......................................... 21
EFFECT OF PENDING ACTIONS/DECREE ...................... 24
EFFECTS OF NULLITY .............................................. 24

Legal Separation ................. 24

GROUNDS FOR LEGAL SEPARATION ................ 24

ACTS OF VIOLENCE ACCORDING TO RA 9262 ............... 25
DEFENSES ........................................................ 26
GROUNDS FOR DENYING LEGAL SEPARATION .............. 26
COOLING-OFF PERIOD
AND RECONCILIATION EFFORTS ...................... 26
CONFESSION OF JUDGMENT ............................ 26
EFFECTS OF FILING PETITION .......................... 26
EFFECTS OF PENDENCY ................................... 26
EFFECTS OF LEGAL SEPARATION ..................... 26
RECONCILIATION ............................................. 27
HOW DONE ........................................................... 27
EFFECTS OF RECONCILIATION ................................... 27
ANNEX TO VOID AND VOIDABLE
MARRIAGES AND LEGAL SEPARATION ............ 27
GROUNDS ............................................................ 27
EFFECTS OF FILING / PENDING DECREE ....................... 27
EFFECTS OF AFFIDAVIT OF REAPPEARANCE, JUDICIAL
DECLARATION OF NULLITY, ANNULMENT AND LEGAL
SEPARATION ........................................................ 28

Rights and Obligations

between
Husband and Wife .............. 28

ESSENTIAL OBLIGATIONS ................................ 28

FAMILY DOMICILE ............................................ 28
SUPPORT .......................................................... 29
MANAGEMENT OF HOUSEHOLD ....................... 29
EFFECT OF NEGLECT OF DUTY .......................... 29
EXERCISE OF PROFESSION ............................... 29

Property Relations of the

Spouses ................................29
MARRIAGE SETTLEMENTS ............................... 29
MARRIAGE SETTLEMENT RULES ................................ 29
DONATIONS BY REASON OF MARRIAGE .......... 30

.............. 31
ABSOLUTE COMMUNITY OF PROPERTY
AND CONJUGAL PARTNERSHIP OF GAINS ........ 31
COMPARISON OF ACP AND CPG .................................. 31
SEPARATION OF PROPERTY OF THE SPOUSES
AND ADMINISTRATION OF COMMON PROPERTY
BY ONE SPOUSE DURING THE MARRIAGE ........ 38
DISTINGUISHED FROM ORDINARY DONATIONS

JUDICIAL SEPARATION OF PROPERTY MAY EITHER BE

VOLUNTARY OR FOR SUFFICIENT CAUSE .....................

38
PROPERTY REGIME OF UNIONS
WITHOUT MARRIAGE ....................................... 39

The Family ........................... 40

THE FAMILY AS AN INSTITUTION ..................... 40

ASPECTS OF FAMILY RELATIONS ............................... 40
FAMILY RELATIONS INCLUDE ................................... 40
EXCEPTIONS TO THE GENERAL RULE CANNOT BE SUBJECT
OF COMPROMISE ................................................... 40
THE FAMILY HOME .......................................... 40
CONSTITUTED BY .................................................. 40
INCLUDES ............................................................ 41
GUIDELINES .......................................................... 41
BENEFICIARIES OF THE FAMILY HOME ......................... 41
REQUISITES TO BE A BENEFICIARY .............................. 41
REQUIREMENTS FOR THE SALE, ALIENATION, DONATION,
ASSIGNMENT, OR ENCUMBRANCE OF THE FAMILY HOME . 41
REQUISITES FOR CREDITOR TO AVAIL OF THE RIGHT UNDER
ARTICLE 160 .........................................................

41

Paternity and Filiation ......... 42

KINDS OF FILIATION ........................................ 42

LEGITIMATE CHILDREN .................................... 42
WHO ARE LEGITIMATE CHILDREN .............................. 42
WHO ARE ILLEGITIMATE CHILDREN ............................ 42
IMPUGNING LEGITIMACY ......................................... 42
ACTION FOR IMPUGNING LEGITIMACY ........................ 43
PROOF OF FILIATION........................................ 43
ACTION FOR CLAIMING FILIATION .............................. 44
RIGHTS OF LEGITIMATE CHILDREN ............................ 44
ILLEGITIMATE CHILDREN ................................. 44
ACTION FOR CLAIMING FILIATION .............................. 44
RIGHTS OF ILLEGITIMATE CHILD ................................ 45
LEGITIMATED CHILDREN.................................. 45
TO BE CAPABLE OF LEGITIMATION ............................. 45
PROCEDURE ........................................................ 45
GROUNDS FOR IMPUGNING LEGITIMATION ................. 45
RIGHTS ............................................................... 45
IMPUGNING LEGITIMATION ...................................... 45

Adoption .............................. 46

RA 8552 DOMESTIC ADOPTION LAW ............. 46

WHO CAN ADOPT ................................................... 46
WHO CAN BE ADOPTED ........................................... 46
PRE-ADOPTION PROCEDURES .................................. 47
ADOPTION PROCEDURES ......................................... 47
WHO MAY NOT ADOPT/ BE ADOPTED ......................... 48

RIGHTS OF AN ADOPTED CHILD ................................. 48

RESCISSION OF ADOPTION ....................................... 48
RECTIFICATION OF SIMULATED BIRTH......................... 49

RA 8043 THE LAW ON INTER-COUNTRY

ADOPTION ........................................................ 49
INTER-COUNTRY ADOPTION ..................................... 49
WHO CAN ADOPT ................................................... 49
WHO CAN BE ADOPTED ........................................... 50

Support ............................... 50

WHAT IT COMPRISES ....................................... 50

WHO ARE OBLIGED ........................................... 50
TO SUPPORT EACH OTHER ....................................... 50
PROPERTIES ANSWERABLE FOR SUPPORT ....................51
ORDER OF SUPPORT ................................................51
STRANGER GIVES SUPPORT .......................................51
PERSON OBLIGED REFUSES OR FAILS TO GIVE SUPPORT ..51
CONTRACTUAL SUPPORT OR THAT GIVEN BY WILL ..........51
SUPPORT DURING MARRIAGE LITIGATION ......51
AMOUNT .......................................................... 52
WHEN DEMANDABLE ....................................... 52
OPTIONS .......................................................... 52
ATTACHMENT .................................................. 52

Parental Authority ...............52

GENERAL PROVISIONS ..................................... 52

PARENTAL AUTHORITY INCLUDES ............................. 52
PARENTAL AUTHORITY AND RESPONSIBILITY MAY NOT BE
RENOUNCED OR TRANSFERRED EXCEPT IN THE CASES
AUTHORIZED BY LAW .............................................. 52
CASES WHEN PARENTAL AUTHORITY AND RESPONSIBILITY
MAY BE TRANSFERRED OR RENOUNCED ...................... 52
RULES AS TO THE EXERCISE OF PARENTAL AUTHORITY ... 52
CHARACTERISTICS OF PARENTAL AUTHORITY ............... 52
PARENTAL PREFERENCE RULE .................................. 52
WHO EXERCISES AUTHORITY IN CASES OF DEATH,
ABSENCE, UNSUITABILITY, REMARRIAGE, OR SEPARATION
OF PARENTS ......................................................... 52
DESCENDANTS PRIVILEGE OF REFUSAL TO TESTIFY ....... 53
TENDER YEARS PRESUMPTION ................................. 53

SUBSTITUTE AND SPECIAL PARENTAL

AUTHORITY ...................................................... 53

PERSONS EXERCISING SUBSTITUTE PARENTAL AUTHORITY

IN DEFAULT OF PARENTS OR JUDICIALLY APPOINTED
GUARDIAN ........................................................... 53
SUBSTITUTE PARENTAL AUTHORITY OVER DISADVANTAGED
CHILDREN ............................................................ 53
PERSONS EXERCISING SPECIAL PARENTAL AUTHORITY ... 53
LIABILITY OF THOSE EXERCISING SPECIAL PARENTAL
AUTHORITY OVER THE CHILD ................................... 53

EFFECT OF PARENTAL AUTHORITY UPON THE

PERSONS OF THE CHILDREN............................ 54
RIGHTS OF PARENTS UPON
THE PERSON OF THE CHILDREN ................................ 54
DUTIES OF PARENTS UPON
THE PERSON OF THE CHILDREN ................................ 54
SUBSTITUTE REPRESENTATION ................................ 54

.... 54
EFFECTS OF PARENTAL AUTHORITY UPON THE
PROPERTY OF THE CHILDREN .......................... 54
PROCEDURE IN THE APPROVAL OF THE PARENTS BOND 54
OWNERSHIP OF CHILDS ACQUISITIONS ...................... 55
PARENTS USUFRUCT ............................................ 55
COURT ASSISTANCE IN THE DISCIPLINE OF THE CHILD

WHEN PARENTS ENTRUST THE MANAGEMENT OF THEIR

PROPERTIES TO A CHILD .........................................

55
SUSPENSION OR TERMINATION OF PARENTAL
AUTHORITY ...................................................... 55
RA 7610 CHILD ABUSE LAW ........................... 55
PARENTAL AUTHORITY PERMANENTLY TERMINATES ..... 55
TERMINATION OF PARENTAL AUTHORITY WHICH CAN BE
REVIVED BY FINAL JUDGMENT .................................. 55
GROUNDS FOR SUSPENSION OF PARENTAL AUTHORITY . 55
SCOPE OF SUBSTITUTE AND
SPECIAL PARENTAL AUTHORITY ................................ 55
RA 7610 CHILD ABUSE LAW .................................. 55

Emancipation, as amended
by RA 6809 ......................... 55
Summary Judicial
Proceedings in the Family
Law ...................................... 56
PROCEDURAL RULES PROVIDED FOR
IN THIS TITLE SHALL APPLY TO ........................ 56
SEPARATION IN FACT ...................................... 56
SEPARATE CLAIM FOR DAMAGES ............................... 56
JURISDICTION ....................................................... 56
NOTIFICATION TO OTHER SPOUSE ............................. 56
PROCEDURE ......................................................... 56
WHEN APPEARANCE OF SPOUSES REQUIRED ............... 56
NATURE OF JUDGMENT ........................................... 56
RULES APPLICABLE FOR ADMINISTERING
OR ENCUMBERING SEPARATE PROPERTY OF SPOUSE

.... 56
INCIDENTS INVOLVING
PARENTAL AUTHORITY .................................... 57
PROCEDURE ......................................................... 57

Retroactive Effect ................ 57

RETROACTIVE EFFECT ...................................... 57

INVALIDITY OF OTHER PROVISIONS ................. 57

Funeral ................................. 57
NATURE OF FUNERAL ............................................. 57
GUIDELINES IN MAKING FUNERAL ARRANGEMENTS ....... 58

Use of Surnames ................ 58

SURNAMES OF CHILDREN ................................ 58

WIFE AFTER AND DURING MARRIAGE ............. 58
CONFUSION AND CHANGE OF NAMES ............. 58

Absence ............................... 59
PROVISIONAL MEASURES

IN CASE OF ABSENCE ....................................... 59

PRESUMPTION IN THE RULES OF COURT ...................... 59
REQUISITES ......................................................... 60
WHO MAY BE APPOINTED AS REPRESENTATIVE ............. 60
DECLARATION OF ABSENCE ............................. 60
WHEN MAY A DECLARATION OF ABSENCE BE DECLARED . 60
WHO MAY ASK FOR A DECLARATION OF ABSENCE ......... 60
ADMINISTRATION OF THE
PROPERTY OF THE ABSENTEE .......................... 60
WHO MAY ADMINISTER THE PROPERTY ...................... 60
WHEN WILL THE ADMINISTRATION OF PROPERTY CEASE ..61
PRESUMPTION OF DEATH .................................61
EXTRAORDINARY ABSENCE .......................................61

Civil Registrar ....................... 61

RA 9048 AS AMENDED BY RA 10172 ................. 62

GROUNDS ............................................................ 63
RULE 108, RULES OF COURT ............................ 63
CANCELLATION OR CORRECTION OF ENTRIES
IN THE CIVIL REGISTRY .................................... 63
WHO MAY FILE PETITION ......................................... 64
ENTRIES SUBJECT TO CANCELLATION ......................... 64

PROPERTY

Characteristics .................... 66
Classification ....................... 66
HIDDEN TREASURE .......................................... 66
BASED ON MOBILITY
IMMOVABLE OR MOVABLE ............................... 66
REAL OR IMMOVABLE PROPERTY .............................. 66
PERSONAL OR MOVABLE ........................................ 68
IMPORTANCE AND SIGNIFICANCE OF CLASSIFICATION
UNDER THE CIVIL CODE ...........................................

68
BASED ON OWNERSHIP ................................... 69
PUBLIC DOMINION ................................................. 69
PRIVATE OWNERSHIP ............................................. 70
BASED ON CONSUMABILITY ............................. 70
CONSUMABLE ....................................................... 70
NON-CONSUMABLE ............................................... 70
SUSCEPTIBILITY TO SUBSTITUTION ................. 70
FUNGIBLES .......................................................... 70
NON-FUNGIBLES .................................................. 70
BASED ON THE CONSTITUTION ......................... 71
OTHER CLASSIFICATIONS ................................. 71
BY THEIR PHYSICAL EXISTENCE .................................. 71
BY THEIR AUTONOMY OR DEPENDENCE ....................... 71
BY SUSCEPTIBILITY TO DETERIORATION ....................... 71
BY REASON OF THEIR SUSCEPTIBILITY TO DIVISION ......... 71
BY REASON OF DESIGNATION .................................... 71
EXISTENCE IN POINT OF TIME .................................... 71

Ownership ............................. 71
DEFINITION ....................................................... 71
RIGHT IN GENERAL ........................................... 71
RIGHTS INCLUDED IN OWNERSHIP .............................. 71

................................................. 71
PROTECTING PROPERTY ................................... 71
BASIC DISTINCTIONS ............................................... 71
REMEDIES .............................................................72
RIGHT TO RECOVER POSSESSION................................72
LIMITATIONS ON OWNERSHIP ..........................72
BUNDLE OF RIGHTS

LIMITATIONS ON THE RIGHTS OF OWNERSHIP

PROVIDED BY LAW .................................................72

Accession ............................. 74
CLASSIFICATION OF ACCESSION ...................... 74
WITH RESPECT TO IMMOVABLES ................................ 74
WITH RESPECT TO MOVABLE PROPERTY ...................... 79

Quieting of Title or Interest in

and Removal or Prevention of
Cloud over Title to or Interest
in Real Property .................. 81

IN GENERAL ...................................................... 81
PURPOSE .......................................................... 81
NATURE: QUASI IN REM ................................... 81
JUSTIFICATIONS FOR QUIETING OF TITLE ........ 81
THE ACTION TO
QUIET TITLE DOES NOT APPLY ......................... 81
REQUIREMENT ................................................. 81
REQUISITES OF AN ACTION TO QUIET TITLE .................. 81
THERE IS A CLOUD ON TITLE TO REAL PROPERTY OR ANY
INTEREST TO REAL PROPERTY .................................. 81
THE PLAINTIFF MUST HAVE LEGAL OR EQUITABLE TITLE TO,
OR INTEREST IN THE REAL PROPERTY ......................... 82
PLAINTIFF MUST RETURN THE BENEFITS RECEIVED FROM
THE DEFENDANT ................................................... 82

QUIETING OF TITLE V. REMOVAL OF CLOUD..... 82

REQUISITES OF AN ACTION TO PREVENT A CLOUD ......... 82
PRESCRIPTION/NON-PRESCRIPTION
OF ACTION ........................................................ 82
PRESCRIPTION OF ACTION ....................................... 82

Co-ownership ..................... 82

DEFINITION ...................................................... 82
REQUISITES ...................................................... 82
WHAT GOVERNS CO-OWNERSHIP .................... 82
CHARACTERISTICS OF CO-OWNERSHIP ........... 82
THERE ARE IDEAL SHARES DEFINED
BUT NOT PHYSICALLY IDENTIFIED ..............................

83
SOURCES OF CO-OWNERSHIP .......................... 83
LAW ................................................................... 83
CONTRACTS ......................................................... 83
SUCCESSION......................................................... 84
TESTAMENTARY DISPOSITION
OR DONATION INTER VIVOS ..................................... 84
BY FORTUITOUS EVENT OR BY CHANCE ....................... 84
BY OCCUPANCY ..................................................... 84
BY ASSOCIATIONS AND
SOCIETIES WITH SECRET ARTICLES ............................ 84

RIGHT OF CO-OWNERS..................................... 84
RIGHT TO THE SHARE IN THE BENEFITS
AS WELL AS CHARGES ............................................ 84
RIGHT TO USE THE THING OWNED IN COMMON ............. 84
RIGHT TO BRING AN ACTION IN EJECTMENT ................. 84
RIGHT TO COMPEL OTHER CO-OWNERS
TO CONTRIBUTE TO THE EXPENSES
OF PRESERVATION AND TO THE TAXES ....................... 84
RIGHT TO REPAIR .................................................. 84
RIGHT TO OPPOSE ALTERATIONS............................... 84
RIGHT TO FULL OWNERSHIP OF HIS PART
AND OF THE FRUITS AND BENEFITS
PERTAINING THERETO ............................................ 85
RIGHT TO PARTITION ............................................. 85
RIGHT TO REDEMPTION........................................... 85
RULES................................................................. 85

TERMINATION/EXTINGUISHMENT ................... 85

TOTAL DESTRUCTION OF THING OR

LOSS OF THE PROPERTY CO-OWNED .......................... 85
MERGER OF ALL INTERESTS IN ONE PERSON ................ 85
ACQUISITIVE PRESCRIPTION ..................................... 85
PARTITION OR DIVISION .......................................... 86

Possession ........................... 86

DEFINITION ...................................................... 86
CONCEPT OF POSSESSION ............................... 86
CHARACTERISTICS ........................................... 86
ESSENTIAL REQUISITES OF POSSESSION ..................... 86
DEGREES OF POSSESSION........................................ 86
CASES OF POSSESSION ........................................... 87
ACQUISITION OF POSSESSION ......................... 88
WAYS OF ACQUIRING POSSESSION ............................. 88
BY WHOM MAY POSSESSION BE ACQUIRED .................. 89
WHAT DO NOT AFFECT POSSESSION .......................... 89
RULES TO SOLVE CONFLICTS OF POSSESSION ............... 89
EFFECTS OF POSSESSION ................................ 90
RIGHT TO BE PROTECTED IN HIS POSSESSION ............... 90
ENTITLEMENT TO FRUITS
POSSESSOR IN GOOD FAITH/BAD FAITH ...................... 90
REIMBURSEMENT FOR EXPENSES
POSSESSOR IN GOOD FAITH/BAD FAITH .......................91
LOSS OR UNLAWFUL DEPRIVATION
OF A MOVABLE ................................................. 93
POSSESSION OF MOVABLE
ACQUIRED IN GOOD FAITH (IN CONCEPT OF OWNER)
IS EQUIVALENT TO TITLE .......................................... 93
PERIOD TO RECOVER .............................................. 93
FINDER OF LOST MOVABLE ....................................... 93
DISTINGUISHED FROM VOIDABLE TITLE ....................... 93

EFFECTS OF POSSESSION ................................. 93

EFFECTS OF POSSESSION IN THE CONCEPT OF OWNER .... 93
RIGHTS OF POSSESSOR .................................... 94
PRESUMPTION IN FAVOR OF THE POSSESSOR
FOR ACQUISITIVE PRESCRIPTION ............................... 94
LOSS/TERMINATION OF
POSSESSION ..................................................... 94
ABANDONMENT .................................................... 94

ASSIGNMENT, EITHER ONEROUS OR GRATUITOUS

POSSESSION BY ANOTHER;
IF POSSESSION HAS LASTED LONGER
THAN ONE YEAR;
REAL RIGHT OF POSSESSION

......... 94

NOT LOST AFTER 10 YEARS ..................................... 94

RULES FOR LOSS OF MOVABLES ................................ 95

Usufruct ............................... 95
CONCEPT .......................................................... 95
OBJECTS OF USUFRUCT.................................... 95
CHARACTERISTICS ........................................... 95
NATURAL CHARACTERISTICS .................................... 95
CLASSIFICATION ............................................... 95
BY ORIGIN ............................................................ 95
BY PERSON ENJOYING RIGHT OF USUFRUCT ................. 96
BY OBJECT OF USUFRUCT ......................................... 96
BY THE EXTENT OF THE USUFRUCT ............................. 96
BY THE TERMS OF THE USUFRUCT .............................. 96
RIGHTS AND OBLIGATIONS
OF USUFRUCTUARY ......................................... 97
RIGHTS ................................................................ 97
OBLIGATIONS ........................................................ 98
SPECIAL CASES OF USUFRUCT ....................... 100
USUFRUCT OVER A PENSION
OR PERIODICAL INCOME ........................................ 100
USUFRUCT OF PROPERTY OWNED IN COMMON ........... 100
USUFRUCT CONSTITUTED ON A FLOCK
OR HERD OF LIVESTOCK ......................................... 101
USUFRUCT OVER FRUIT BEARING TREES
AND SPROUT AND WOODLANDS .............................. 101
USUFRUCT ON A RIGHT OF ACTION ........................... 101
USUFRUCT ON MORTGAGED PROPERTY ..................... 101
USUFRUCT OVER AN ENTIRE PATRIMONY ................... 101
USUFRUCT OVER DETERIORABLE PROPERTY ............... 101
USUFRUCT OVER CONSUMABLE PROPERTY ................ 101

RIGHTS OF THE OWNER .................................. 101

EXTINGUISHMENT/TERMINATION .................. 102
DEATH OF USUFRUCTUARY ..................................... 102

EXPIRATION OF PERIOD OR FULFILLMENT

OF RESOLUTORY CONDITION IMPOSED ON
USUFRUCT BY PERSON
CONSTITUTING THE USUFRUCT ................................ 102
MERGER OF RIGHTS OF USUFRUCT
AND NAKED OWNERSHIP IN ONE PERSON .................. 102
RENUNCIATION OF USUFRUCT ................................. 102
EXTINCTION OR LOSS OF PROPERTY .......................... 102
TERMINATION OF RIGHT OF PERSON
CONSTITUTING THE USUFRUCT ............................... 103
PRESCRIPTION ..................................................... 103

CONDITIONS NOT AFFECTING USUFRUCT ...... 103

EXPROPRIATION OF THING IN USUFRUCT ................... 103
BAD USE OF THING IN USUFRUCT ............................. 103

Easement ........................... 103

CHARACTERISTICS .......................................... 103

ESSENTIAL FEATURES............................................ 103

CLASSIFICATION ............................................. 104

AS TO RECIPIENT OF BENEFITS ................................. 104
AS TO CAUSE OR ORIGIN ......................................... 104
AS TO ITS EXERCISE ............................................... 104
AS INDICATION OF ITS EXISTENCE ............................. 105
BY THE OBJECT OR OBLIGATION IMPOSED ................... 105
GENERAL RULES .................................................. 105
RELEVANCE OF CLASSIFICATIONS .................. 105
DETERMINES WHAT EASEMENTS
CAN BE ACQUIRED BY PRESCRIPTION ........................ 105
DETERMINES WHAT EASEMENTS
CAN BE ACQUIRED BY TITLE .................................... 105
DETERMINES HOW TO COMPUTE
THE PRESCRIPTIVE PERIOD ..................................... 105
DETERMINES HOW EASEMENT
IS LOST BY PRESCRIPTION ...................................... 105

CREATION ....................................................... 105

BY TITLE ............................................................. 105
BY LAW (LEGAL EASEMENTS) .................................. 106
BY WILL OF THE OWNERS (VOLUNTARY EASEMENTS) .... 106
BY PRESCRIPTION ................................................ 106
LEGAL EASEMENTS ........................................ 106
LAW GOVERNING LEGAL EASEMENTS ....................... 106
VOLUNTARY EASEMENTS ............................... 106
RIGHTS AND OBLIGATIONS OF OWNERS OF
DOMINANT AND SERVIENT ESTATES ............. 106
RIGHT OF DOMINANT ESTATE OWNER ....................... 106
OBLIGATIONS OF DOMINANT ESTATE OWNER ............. 106
RIGHT OF SERVIENT ESTATE OWNER ......................... 107
OBLIGATIONS OF SERVIENT ESTATE OWNER ................ 107
KINDS OF LEGAL EASEMENTS ......................... 107
NATURAL DRAINAGE ............................................. 107
RIPARIAN BANKS .................................................. 107
DRAINAGE OF BUILDINGS ....................................... 107
DAM .................................................................. 107
DRAWING WATER ................................................ 108
AQUEDUCT ......................................................... 108
SLUICE GATE ....................................................... 108
RIGHT OF WAY ..................................................... 108
PARTY WALL ....................................................... 109
LIGHT AND VIEW .................................................... 111
INTERMEDIATE DISTANCES ..................................... 112
NUISANCE ........................................................... 112
LATERAL AND SUBJACENT SUPPORT ......................... 112
MODES OF ACQUIRING EASEMENT ................. 112
BY TITLE ............................................................. 112
BY PRESCRIPTION ................................................. 112
EXTINGUISHMENT OF EASEMENTS ................. 112
MERGER ............................................................. 113
BY NON-USER FOR 10 YEARS ................................... 113
EXTINGUISHMENT BY IMPOSSIBILITY OF USE ............... 113
EXPIRATION OF THE TERM OR
FULFILLMENT OF RESOLUTORY CONDITION ................ 113
RENUNCIATION OF THE OWNER
OF THE DOMINANT ESTATE ..................................... 113
REDEMPTION AGREED UPON
BETWEEN THE OWNERS .......................................... 113

OTHER CAUSES NOT MENTIONED IN NCC

631 .............. 113

Nuisance.............................. 114

NUISANCE V. TRESPASS .................................. 114

NUISANCE V. NEGLIGENCE .............................. 114
CLASSES .......................................................... 114
ACCORDING TO NATURE ......................................... 114
ACCORDING TO SCOPE OF INJURIOUS EFFECTS ............ 114
DOCTRINE OF ATTRACTIVE NUISANCE............ 115
LIABILITY IN CASE OF NUISANCE .................... 115
WHO ARE LIABLE .................................................. 115
LIABILITY OF CREATOR OF NUISANCE ........................ 115
LIABILITY OF TRANSFEREES .................................... 115
NATURE OF LIABILITY ............................................ 115
RIGHT TO RECOVER DAMAGES ................................. 115
NO PRESCRIPTION ................................................ 115
REGULATION OF NUISANCES .......................... 115
PUBLIC NUISANCE ................................................ 115
PRIVATE NUISANCE ............................................... 116

Modes of Acquiring
Ownership .......................... 116

MODES OF ACQUIRING OWNERSHIP ............... 116

OCCUPATION.................................................... 117
REQUISITES .......................................................... 117
KINDS ................................................................. 117
SPECIAL RULES ..................................................... 117
DONATION ...................................................... 118
OTHER INSTANCES CONSIDERED AS DONATION ........... 118
NATURE ............................................................. 118
WHAT MAY BE DONATED ........................................ 118
WHAT MAY NOT BE DONATED .................................. 118
KINDS OF DONATIONS ........................................... 118
FORMALITIES REQUIRED ........................................ 120
QUALIFICATIONS OF DONOR, DONEE ......................... 120
EFFECTS OF DONATION/LIMITATIONS ........................ 121
VOID DONATIONS ................................................. 122
REVOCATION AND REDUCTION ................................ 122
TRADITION ...................................................... 127
CONCEPT ............................................................ 127
REQUISITES ......................................................... 127
PURPOSE ............................................................ 127
KINDS ................................................................ 127

Prescription ......................... 127

DEFINITION ..................................................... 127
RATIONALE ..................................................... 127
KINDS OF PRESCRIPTION ................................ 127
ACQUISITIVE PRESCRIPTION .................................... 127
EXTINCTIVE PRESCRIPTION ..................................... 128
NO PRESCRIPTION APPLICABLE ..................... 128
BY OFFENDER ...................................................... 128
REGISTERED LANDS - PD 1529 ............................... 128
RIGHTS NOT EXTINGUISHED BY PRESCRIPTION ............ 128
ACTION TO QUIET TITLE IF PLAINTIFF IS IN POSSESSION . 128

VOID CONTRACTS .................................................128

ACTION TO DEMAND PARTITION ...............................128
PROPERTY OF PUBLIC DOMINION ..............................128

PRESCRIPTION DISTINGUISHED
FROM LACHES .................................................128
PRESCRIPTION OR LIMITATION OF ACTIONS .. 129
TO RECOVER MOVABLES ......................................... 129
TO RECOVER IMMOVABLES ...................................... 129
OTHER ACTIONS ................................................... 129
OBLIGATIONS & CONTRACTS

[Obligations] ...................... 132

Definition ............................ 132
Elements of
an Obligation .................... 132
ELEMENTS OF AN OBLIGATION ....................... 132

Different Kinds
of Prestations .................... 132
Classification
of Obligations ................... 132
FROM THE VIEWPOINT OF SANCTION .......... 132
FROM THE VIEWPOINT OF SUBJECT MATTER.. 132
FROM THE AFFIRMATIVENESS OR
NEGATIVENESS OF THE OBLIGATION .............. 132
FROM THE VIEWPOINT OF
PERSONS OBLIGED .......................................... 132

Sources of Obligations ...... 132

SINGLE ACT OR OMISSION CAN GIVE RISE TO

DIFFERENT CAUSES OF ACTION ...................... 132
NATURAL OBLIGATIONS ................................. 132
EXTRA-CONTRACTUAL OBLIGATIONS ............. 133
QUASI-CONTRACTS ............................................... 133
OTHER QUASI-CONTRACTS ..................................... 135
QUASI-DELICTS .................................................... 136

Nature and Effect of

Obligations.......................... 137
OBLIGATION TO GIVE ...................................... 137
A DETERMINATE OR SPECIFIC THING ......................... 137
AN INDETERMINATE OR GENERIC THING .................... 137
OBLIGATION TO DO OR NOT TO DO ................. 138
BREACH OF OBLIGATIONS .............................. 138
COMPLETE FAILURE TO PERFORM ............................ 138
DEFAULT, DELAY, OR MORA.................................... 138
FRAUD (DOLO) IN THE
PERFORMANCE OF OBLIGATION .............................. 139
NEGLIGENCE (CULPA) IN THE
PERFORMANCE OF OBLIGATION ............................... 140
DILIGENCE NORMALLY REQUIRED

IS ORDINARY DILIGENCE OR
DILIGENCE OF A GOOD FATHER OF A FAMILY ;
EXCEPTIONS ....................................................... 140
EXTENT OF DAMAGES TO BE AWARDED ..................... 140
CONTRAVENTION OF THE TENOR OF OBLIGATION ......... 141
LEGAL EXCUSE FOR BREACH OF OBLIGATION
FORTUITOUS EVENT; REQUISITES ............................. 141

REMEDIES AVAILABLE TO CREDITOR

IN CASE OF BREACH ........................................ 141
SPECIFIC PERFORMANCE ........................................ 141
SUBSTITUTED PERFORMANCE BY A THIRD PERSON
OF ANOTHERS OBLIGATION TO DELIVER
A GENERIC THING OR OF AN OBLIGATION TO DO,
UNLESS IT IS PURELY PERSONAL ACT ........................ 141
RESCISSION (RESOLUTION IN
RECIPROCAL OBLIGATIONS) .................................... 141
DAMAGES, IN ANY EVENT ....................................... 141
SUBSIDIARY REMEDIES OF CREDITORS ...................... 142
ACCION SUBROGATORIA ........................................ 142
ACCION PAULIANA ............................................... 142
ACCION DIRECTA ................................................. 142

Kinds of Civil Obligations .. 143

PURE ............................................................... 143

CONDITIONAL ................................................. 143
SUSPENSIVE CONDITION ........................................ 143
RESOLUTORY CONDITION ....................................... 143
POTESTIVE CASUAL OR MIXED ............................... 143
OBLIGATIONS SUBJECT TO POTESTATIVE SUSPENSIVE
CONDITIONS ARE VOID .......................................... 143
EFFECT OF THE HAPPENING OF SUSPENSIVE CONDITION;
RESOLUTORY CONDITION ...................................... 144
EFFECT OF LOSS OF SPECIFIC THING,
OR DETERIORATION OR IMPROVEMENT OF
SPECIFIC THING BEFORE FULFILLMENT
OF SUSPENSIVE CONDITION;
OR IN CASE OF ARESOLUTORY CONDITION
IN AN OBLIGATION TO DO OR NOT TO DO .................. 145

OBLIGATIONS WITH A PERIOD OR TERM ........ 145

SUSPENSIVE PERIOD ............................................ 146
RESOLUTORY PERIOD ........................................... 146
DEFINITE OR INDEFINITE PERIOD ............................. 146
ALTERNATIVE OR FACULTATIVE ..................... 147
DIFFERENCE BETWEEN ALTERNATIVE
AND FACULTATIVE OBLIGATIONS .............................. 147
EFFECT OF LOSS OF SPECIFIC THINGS
OR IMPOSSIBILITY OF PERFORMANCE OF ALTERNATIVE ,
THROUGH FAULT OF DEBTOR/CREDITOR OR
THROUGH FORTUITOUS EVENTS ............................... 147

Joint and
Solidary Obligation ........... 148

JOINT (DIVISIBLE) OBLIGATION ...................... 148

PRESUMPTION OF JOINT OBLIGATION ....................... 148
PRESUMPTION OF EQUAL DIVISION .......................... 148
EFFECT OF INSOLVENCY OF A JOINT DEBTOR .............. 148

JOINT (INDIVISIBLE) OBLIGATION ................... 149

OBLIGATION CANNOT BE PERFORMED IN PARTS BUT
DEBTORS ARE BOUND JOINTLY ............................... 149
IN CASE OF FAILURE OF ONE OF THE JOINT DEBTORS TO
PERFORM HIS PART (SHARE), THERE IS DEFAULT BUT ONLY
THE GUILTY DEBTOR SHALL
BE LIABLE FOR DAMAGES....................................... 149

SOLIDARY OBLIGATION .................................. 149

ANYONE OF THE SOLIDARY CREDITORS MAY COLLECT OR
DEMAND PAYMENT OF WHOLE OBLIGATION; THERE IS
MUTUAL AGENCY AMONG SOLIDARY DEBTORS ........... 149
ANY OF THE SOLIDARY DEBTORS MAY BE REQUIRED TO PAY
THE WHOLE OBLIGATION; THERE IS MUTUAL GUARANTY
AMONG SOLIDARY DEBTORS .................................. 149

DIVISIBLE AND INDIVISIBLE............................. 151

OBLIGATIONS WITH A PENAL CLAUSE ............ 151

Extinguishment of
Obligations......................... 153

PAYMENT ........................................................ 153

DATION IN PAYMENT ............................................. 153
FORM OF PAYMENT .............................................. 153
EXTRAORDINARY INFLATION OR DEFLATION .............. 153
APPLICATION OF PAYMENT ..................................... 153
TENDER OF PAYMENT AND CONSIGNATION ................. 153
LOSS OF DETERMINATE THING DUE OR
IMPOSSIBILITY OR
DIFFICULTY OF PERFORMANCE ...................... 155
CONDONATION OR REMISSION OF DEBT ........ 156
EXPRESS FORMALITY OF DONATION ....................... 156
IMPLIED ............................................................. 156
CONFUSION ..................................................... 156
COMPENSATION ............................................. 156
KINDS ............................................................... 157
OBLIGATIONS NOT COMPENSABLE ............................ 158
NOVATION ....................................................... 158

[Contracts] ......................... 160

Essential Requisites ......... 160
CONSENT ........................................................ 160
CONCURRENCE OF OFFER AND ACCEPTANCE .............. 160
ACCEPTANCE ....................................................... 160
LEGAL CAPACITY .................................................. 160
VICES OF CONSENT ............................................... 161
OBJECT ............................................................ 162
DEFINITION ......................................................... 162
REQUISITES ......................................................... 162
CAUSE ............................................................. 162
DEFINITION ........................................................ 162
REQUISITES ......................................................... 162
CAUSE IN ............................................................ 162

Kinds of Contracts ............ 163

CONSENSUAL .................................................. 163

REAL ............................................................... 163

FORMAL OR SOLEMN ...................................... 163

DONATIONS ........................................................ 163
PARTNERSHIP WHERE REAL
PROPERTY IS CONTRIBUTED ................................... 163
ANTICHRESIS ...................................................... 164
AGENCY TO SELL REAL PROPERTY OR AN INTEREST
THEREIN ............................................................ 164
STIPULATION TO CHANGE INTEREST ......................... 164
STIPULATION LIMITING COMMON CARRIERS DUTY OF
EXTRAORDINARY DILIGENCE
TO ORDINARY DILIGENCE ....................................... 164
CHATTEL MORTGAGE ............................................. 164
SALE OF LARGE CATTLE ......................................... 164

Formality ........................... 164

STATUTORY BASIS ......................................... 164

Defective Contracts .......... 165

FOUR KINDS OF DEFECTIVE CONTRACTS ........165

RESCISSIBLE CONTRACTS ...............................165
DIFFERENCE FROM RESCISSION (RESOLUTION) UNDER
ART. 1191 ...........................................................166
VOIDABLE CONTRACTS ...................................166
UNENFORCEABLE CONTRACTS .......................166
VOID CONTRACTS ............................................ 167

Effects of Contracts ........... 169

STATUTORY BASIS ..........................................169
SALES

Introduction ....................... 171

DEFINITION OF SALES .................................... 171
ESSENTIAL REQUISITES OF
A CONTRACT OF SALE .................................... 171
ESSENTIAL ELEMENTS OF A VALID CONTRACT OF SALE .. 171
STAGES OF CONTRACT OF SALE ..................... 171
PHASES OF A SALE CONTRACT ................................. 171
OBLIGATIONS CREATED ................................. 171
NATURE OF OBLIGATIONS CREATED
PER DEFINITION IN ART.1458 .................................

171
CHARACTERISTICS OF A CONTRACT OF SALE 171
SALE IS TITLE AND NOT MODE ....................... 171
SALE DISTINGUISHED FROM OTHER CONTRACTS
........................................................................ 171
DONATION .......................................................... 171
BARTER ............................................................. 172
CONTRACT FOR A PIECE OF WORK ............................ 172
DACION EN PAGO ................................................. 172
CONTRACT OF SALE/CONTRACT TO SELL ...... 172

Parties to a
Contract of Sale .................. 172
CAPACITY OF PARTIES ................................... 172
KINDS OF INCAPACITY ........................................... 172
ABSOLUTE INCAPACITY ................................. 172
RELATIVE INCAPACITY: MARRIED PERSONS .. 173

HUSBAND AND WIFE ............................................ 173

ALIENAGE .......................................................... 173
TRUSTEESHIP ..................................................... 173

SPECIAL DISQUALIFICATIONS ........................ 173

SPECIFIC INCAPACITY/ SPECIAL DISQUALIFICATIONS ... 173
EFFECTS OF INCAPACITY ................................ 173

Subject Matter ....................174

REQUISITES OF A VALID SUBJECT MATTER ... 174
MUST BE LICIT .................................................... 174
EXISTING, FUTURE, CONTINGENT ............................ 174
DETERMINATE OR DETERMINABLE ........................... 175
PARTICULAR KINDS ....................................... 175

Obligations of the Seller to

Transfer Ownership ............175
SALE BY A PERSON NOT THE OWNER AT TIME OF

DELIVERY ........................................................ 175

SALE BY A PERSON
HAVING A VOIDABLE TITLE ............................ 176

Price .................................... 176

MEANING OF PRICE ....................................... 176
REQUISITES FOR A VALID PRICE .................... 176
HOW PRICE IS DETERMINED .......................... 176
INADEQUACY OF PRICE ................................. 176
WHEN NO PRICE AGREED .............................. 177
MANNER OF PAYMENT
MUST BE AGREED UPON ................................ 177
EARNEST MONEY VS. OPTION MONEY .......... 177

Formation of
Contract of Sale ................. 177
PREPARATORY .............................................. 177
OFFER ............................................................... 177
OPTION CONTRACT .............................................. 177
RIGHT OF FIRST REFUSAL ....................................... 178
MUTUAL PROMISE TO BUY AND SELL ........................ 178
PERFECTION .................................................. 178
WHEN PERFECTED ................................................ 178
EFFECT OF PERFECTION ......................................... 178
FORM AND OFFER ................................................ 178
FORMALITIES OF THE CONTRACT .................. 178

Transfer of Ownership ...... 179

MANNER OF TRANSFER ................................. 179

GENERAL CONCEPTS ............................................. 179
WHEN DELIVERY DOES NOT TRANSFER TITLE 179
SALE ON APPROVAL, TRIAL, OR SATISFACTION ........... 179
WHEN SALE NOT VALID ......................................... 180
WHEN SELLER IS NOT THE OWNER ........................... 180
SALE BY PERSON HAVING A VOIDABLE TITLE .............. 180
KINDS OF DELIVERY ....................................... 180
ACTUAL DELIVERY ............................................... 180
CONSTRUCTIVE DELIVERY ..................................... 180

DOUBLE SALES .............................................. 181

RULES GOVERNING SALE OF MOVABLES, IMMOVABLES AND
UNREGISTERED LANDS .......................................... 181
PROPERTY REGISTRATION DECREE ...............182
REQUISITES FOR REGISTRATION OF DEED OF SALE IN GOOD
FAITH .................................................................182
ACCOMPANIED BY VENDORS DUPLICATE CERTIFICATE OF
TITLE,PAYMENT OF CAPITAL GAINS TAX, AND
DOCUMENTARY TAX REGISTRATION FEES ...................182

Risk of Loss ....................... 182

GENERAL RULE ..............................................182

WHEN LOSS OCCURRED
BEFORE PERFECTION .....................................182
WHEN LOSS OCCURRED AT TIME OF
PERFECTION ..................................................182
WHEN LOSS OCCURRED AFTER PERFECTION
BUT BEFORE DELIVERY ...................................182
WHEN OWNERSHIP IS TRANSFERRED .......... 183
WHEN OWNERSHIP IS TRANSFERRED TO THE BUYER, THE
GOODS ARE AT THE BUYERS RISK ............................ 183

Documents of Title ............ 183

DEFINITION .................................................... 183

PURPOSE OF DOCUMENTS OF TITLE .............. 183
NEGOTIABLE DOCUMENTS OF TITLE .............. 183
WHO MAY NEGOTIATE IT? ...................................... 183
A PERSON TO WHOM A DOCUMENT HAS BEEN NEGOTIATED
ACQUIRES ..........................................................

183
NON-NEGOTIABLE DOCUMENTS OF TITLE ..... 183
WARRANTIES OF SELLER OF DOCUMENTS OF
TITLE .............................................................. 184
A PERSON WHO NEGOTIATES A DOCUMENT OF TITLE
WARRANTS ........................................................ 184
HE DOES NOT WARRANT THAT ................................ 184
GOODS IN THE HANDS OF THE CARRIER COVERED BY A
NEGOTIABLE DOCUMENT CANNOT BE ATTACHED OR LEVIED
UPON, UNLESS .................................................... 184

RULES ON LEVY/GARNISHMENT OF GOODS . 184

Remedies of an
Unpaid Seller ..................... 184
DEFINITION OF UNPAID SELLER .................... 184
REMEDIES OF UNPAID SELLER ....................... 184
JUDICIAL REMEDIES OF AN UNPAID SELLER ................ 184
ALTERNATIVE REMEDIES OF THE UNPAID SELLER UNDER
RECTO LAW ........................................................

185

Performance of Contract .. 185

DELIVERY OF THING SOLD .............................. 185

SALE OF MOVABLES .............................................. 185
SALE OF IMMOVABLES .......................................... 186
INSPECTIONS AND ACCEPTANCE .............................. 186
PAYMENT OF PRICE ........................................ 186
PAY THE PRICE OF THE THING SOLD ......................... 186

Warranties .......................... 187

CONDITION V. WARRANTY .............................. 187

EXPRESS WARRANTIES .................................. 187
EXPRESS WARRANTY DISTINGUISHED FROM FALSE
REPRESENTATION ................................................

187
IMPLIED WARRANTIES ................................. 188
IMPLIED WARRANTY OF TITLE ................................ 188
IMPLIED WARRANTY AGAINST ENCUMBRANCE/NONAPPARENT
SERVITUDES ....................................... 188
IMPLIED WARRANTY AGAINST HIDDEN DEFECTS ......... 188
IMPLIED WARRANTY AS TO MERCHANTABLE QUALITY AND
FITNESS OF GOODS .............................................. 188
IMPLIED WARRANTY AGAINST REDHIBITORY DEFECT IN THE
SALE OF ANIMALS ............................................... 189

EFFECTS OF WARRANTIES ............................. 189

EFFECTS OF WAIVERS .................................... 189
BUYERS OPTIONS IN CASE OF BREACH OF
WARRANTY ................................................... 189
EXPRESS WARRANTY ........................................... 189
IMPLIED WARRANTY AGAINST EVICTION .................. 189
IMPLIED WARRANTY AGAINST ENCUMBRANCES ......... 190
IMPLIED WARRANTY AGAINST HIDDEN DEFECTS ........ 190
IMPLIED WARRANTY AGAINST REDHIBITORY DEFECTS OF
ANIMALS ........................................................... 190
WARRANTY IN SALE OF CONSUMER GOODS .............. 190

Breach of Contract ............ 190

REMEDIES OF THE SELLER ............................. 191

SALE OF MOVABLES .............................................. 191
RECTO LAW: SALE OF MOVABLES ON
INSTALLMENT ................................................ 192
SALE OF IMMOVABLES ........................................... 193
REMEDIES OF THE BUYER ............................... 193
SALE OF MOVABLE ................................................ 193
SALE OF IMMOVABLES .......................................... 194

Extinguishment of Sale ..... 194

CAUSES ......................................................... 194

CONVENTIONAL REDEMPTION ..................... 195
DEFINITION ........................................................ 195
PERIOD ............................................................. 195
BY WHOM EXERCISED ........................................... 195
FROM WHOM TO REDEEM ...................................... 195
HOW EXERCISED ................................................. 195
EFFECT OF REDEMPTION ....................................... 195
EFFECT OF NON-REDEMPTION ............................... 195
RIGHT TO REDEEM VS. OPTION TO PURCHASE ........... 195
EQUITABLE MORTGAGE ................................. 196
DISTINGUISHED FROM OPTION TO BUY ........ 196
PRESUMPTION THAT A CONTRACT IS AN EQUITABLE
MORTGAGE ARISES WHEN ..................................... 196
FOR THE PRESUMPTION OF AN EQUITABLE MORTGAGE TO
ARISE UNDER ART. 1602,
2 REQUISITES MUST CONCUR ................................. 196
RATIONALE BEHIND
PROVISION ON EQUITABLE MORTGAGE ..................... 196
REMEDIES OF APPARENT VENDOR ........................... 196

PERIOD OF REDEMPTION ............................... 196

EXERCISE OF THE RIGHT TO REDEEM ............ 197

LEGAL REDEMPTION ..................................... 197
DEFINITION ........................................................ 197
MANNER ............................................................ 197
PERIOD TO REDEEM .............................................. 197
INSTANCES OF LEGAL REDEMPTION ......................... 198
AGE REDEMPTION ......................................... 199

The Law on Sale of

Subdivision and
Condominium (PD 957) ... 200

DEFINITIONS ................................................. 200

DEFINITION OF "SALE" OR "SELL" .......................... 200
DEFINITION OF "BUY" OR "PURCHASE" ................... 200
REQUIREMENTS FOR OWNERS AND DEVELOPERS ...... 200

The Condominium Act (RA

4726) ................................. 202
DEFINITION OF A CONDOMINIUM ................ 202
OTHER DEFINITIONS ..................................... 203
TRANSFERS OR CONVEYANCES OF A UNIT OR
AN APARTMENT, OFFICE OR STORE, OR OTHER
SPACE THEREIN ............................................ 203
RIGHTS OF A CONDOMINIUM UNIT OWNER
(ASIDE FROM RIGHTS ARISING FROM
OWNERSHIP) ................................................ 203
PARTITION BY SALE ...................................... 203
DECLARATION OF RESTRICTIONS BY OWNER OF
PROJECT
PRECONDITION TO CONVEYANCE ................ 203
ASSESSMENT IN ACCORDANCE WITH
DECLARATION OF RESTRICTIONS ................. 204
HOW LIEN ENFORCED AFTER NON-PAYMENT OF
ASSESSED FEES ............................................ 204
CONTENTS OF A DECLARATION OF
RESTRICTIONS .............................................. 204
INVOLUNTARY DISSOLUTION OF THE
CONDOMINIUM CORPORATION .................... 204
POWER OF ATTORNEY HELD BY CORPORATION
IN CASE OF VOLUNTARY DISSOLUTION OF
CONDOMINIUM CORPORATION .................... 204
SALE, EXCHANGE, LEASE, OR DISPOSITION BY
CORPORATION OF THE COMMON AREAS ..... 204
STOCKHOLDER/MEMBER DEMANDING
PAYMENT FOR SHARES OR INTEREST AKA
APPRAISAL RIGHT ........................................ 204
REQUIREMENTS FOR REGISTRATION OF
CONVEYANCE WITH
THE REGISTER OF DEEDS .............................. 204
REALTY TAX ON CONDOMINIUMS ................. 204
SUCCESSION

General Provisions ............ 206

DEFINITION & TRANSMISSION ....................... 206

SUCCESSION OCCURS AT THE MOMENT OF
DEATH ........................................................... 206
KINDS ............................................................ 206
KINDS OF SUCCESSION ......................................... 206
KINDS OF SUCCESSORS ......................................... 206
KINDS OF HEIRS .................................................. 206

Testamentary
Succession ........................ 206
WILLS ............................................................. 206
IN GENERAL ....................................................... 206
TESTAMENTARY CAPACITY AND INTENT .................... 207
FORM ................................................................ 208
WITNESSES ........................................................ 210
CODICILS ............................................................ 211
INCORPORATION BY REFERENCE .............................. 211
REVOCATION ....................................................... 211
REPUBLICATION AND REVIVAL ................................ 212
ALLOWANCE AND DISALLOWANCE OF WILLS .............. 212
INSTITUTION OF HEIRS .................................. 213
EXTENT OF GRANT .............................................. 213
EFFECT OF PREDECEASE OF HEIR ............................ 213
IDENTIFICATION OF HEIRS, MANNER OF INSTITUTION .. 213
FALSE CAUSE ..................................................... 213
PRETERITION ...................................................... 213
COMPULSORY HEIRS IN THE DIRECT LINE ................... 214
PRETERITION V. DISPOSITION LESS THAN LEGITIME ...... 214
DISTINGUISHED FROM DISINHERITANCE .................... 214
EFFECTS OF PRETERITION ..................................... 214
SUBSTITUTION OF HEIRS ............................... 214
DEFINITION ........................................................ 214
KINDS ............................................................... 214
TESTAMENTARY DISPOSITIONS WITH A
CONDITION, A TERM, AND A MODE ............... 215
3 KINDS OF TESTAMENTARY DISPOSITIONS ................ 215
CONDITIONS ....................................................... 215
LEGITIME ....................................................... 216
DEFINITION ........................................................ 216
COMPULSORY HEIRS AND VARIOUS COMBINATIONS ..... 216
RESERVA TRONCAL .............................................. 218
DISINHERITANCE .................................................. 219

Legal or
Intestate Succession ........ 224
GENERAL PROVISIONS ................................... 224
INSTANCES WHEN LEGAL OR INTESTATE SUCCESSION
OPERATES ......................................................... 224
THE INTESTATE OR LEGAL HEIRS ............................. 224
FUNDAMENTAL PRINCIPLES IN
INTESTATE SUCCESSION ........................................ 224

RELATIONSHIP ............................................... 225

BASIC CONCEPTS IN RELATIONSHIP ......................... 225
INCAPACITY ....................................................... 225

REPUDIATION .................................................... 225

ADOPTION ......................................................... 225

RIGHT OF REPRESENTATION ......................... 225

EFFECT OF REPRESENTATION ................................. 225
WHEN IT OCCURS ................................................. 226
REPRESENTATION IN THE DIRECT DESCENDING LINE ... 226
REPRESENTATION IN COLLATERAL LINE ................... 226
PER STIRPES ...................................................... 226
THE DOUBLE HEIRSHIP TEST .................................. 226
REPRESENTATION IN ADOPTION ............................. 226
ORDER OF CONCURRENCE IN THE CASE OF AN ADOPTED
CHILD ..............................................................

226
ORDER OF INTESTATE SUCCESSION .............. 227
RULES OF EXCLUSION AND CONCURRENCE IN INTESTATE
SHARES ............................................................ 227
OUTLINE OF INTESTATE SHARES ............................. 227

Provisions Common to
Testate and Intestate
Succession ........................ 228
RIGHT OF ACCRETION ................................... 228
DEFINITION AND REQUISITES ................................. 228
EFFECT OF PREDECEASE, INCAPACITY, DISINHERITANCE OR
REPUDIATION IN TESTAMENTARY AND INTESTATE
SUCCESSION ......................................................

229
CAPACITY TO SUCCEED
BY WILL OR INTESTACY ................................. 229
PERSONS INCAPABLE OF SUCCEEDING ..................... 229
ACCEPTANCE AND REPUDIATION OF THE
INHERITANCE ................................................ 230
CHARACTERISTICS .............................................. 230
REQUISITES ....................................................... 230
ACCEPTANCE VS. REPUDIATION .............................. 230
COLLATION ..................................................... 231
CONCEPT OF COLLATION ....................................... 231
OPERATIONS RELATED TO COLLATION ...................... 231
PERSONS OBLIGED TO COLLATE ............................... 231
WHAT TO COLLATE ............................................... 231
PROPERTIES NOT SUBJECT TO COLLATION ................. 231
PARTITION AND DISTRIBUTION OF ESTATE .. 232
PARTITION ........................................................ 232
PARTITION INTER VIVOS ........................................ 232
EFFECTS OF PARTITION ......................................... 233
NULLIFICATION OF PARTITION ................................ 233
AGENCY & PARTNERSHIP

Contract of Partnership .. 236

DEFINITION .................................................... 236

ELEMENTS ..................................................... 236
ESSENTIAL FEATURES ................................... 236
EFFECT OF UNLAWFUL OBJECT ............................... 236
ASSOCIATIONS WITHOUT LEGAL PERSONALITY .......... 236
CHARACTERISTICS ........................................ 236
PARTIES TO THE CONTRACT .......................... 236
OBJECT OF THE CONTRACT ............................ 237

OBJECT OF UNIVERSAL PARTNERSHIP ....................... 237

OBJECT OF PARTICULAR PARTNERSHIP ..................... 237

FORM OF THE CONTRACT ............................... 237

DURATION OF THE CONTRACT ....................... 237
COMMENCEMENT ................................................. 237
TERM ................................................................ 237
EXTENSION ........................................................ 237
RULES TO DETERMINE EXISTENCE ................ 238
RELATIONS CREATED .................................... 238
KINDS OF PARTNERSHIP ............................... 238
AS TO LEGALITY OF EXISTENCE ............................... 238
AS TO OBJECT .................................................... 238
AS TO DURATION ................................................ 238
AS TO LIABILITY OF PARTNERS ............................... 238
AS TO PUBLICITY ................................................. 238
AS TO PURPOSE .................................................. 238
KINDS OF PARTNERS .................................... 238
DISTINGUISHED FROM OTHER CONTRACTS . 239

Rights and obligations of the

partnership ........................ 241

RIGHT TO CONTRIBUTION, IN GENERAL ........ 241

OBLIGATION OF PARTNERS TO THE
PARTNERSHIP WITH RESPECT TO
CONTRIBUTION OF MONEY OR PROPERTY .... 241
AMOUNT OF CONTRIBUTION ................................... 241
DETERMINING VALUE OF CONTRIBUTION IN GOODS ..... 241
ADDITIONAL CAPITAL CONTRIBUTION ....................... 241
PROHIBITION AGAINST ENGAGING IN BUSINESS .......... 241
RISK OF LOSS OF THINGS CONTRIBUTED .................... 241
REMEDY IN CASE OF NON-COMPLIANCE ................... 242
OBLIGATION OF PARTNERS TO THE
PARTNERSHIP WITH RESPECT TO
CONTRIBUTION OF INDUSTRY ...................... 242
PROHIBITION AGAINST ENGAGING IN BUSINESS ......... 242
RIGHT TO APPLY PAYMENT TO PARTNERSHIP
CREDIT .......................................................... 242
RIGHT TO RETURN OF CREDIT RECEIVED ...... 242
RIGHT TO INDEMNITY FOR DAMAGES ........... 242
COMPENSATION OF LIABILITY ................................ 242
SUIT FOR DAMAGES ............................................. 243
RESPONSIBILITY OF THE PARTNERSHIP TO
PARTNERS ..................................................... 243

Rights and obligations of

partners inter se ............... 243

RIGHT TO ASSOCIATE ANOTHER IN SHARE ... 243

SUBPARTNERSHIP ............................................... 243
RIGHT TO ACCESS PARTNERSHIP BOOKS ..... 243
BASIS OF RIGHT .................................................. 243
REASONABLE HOUR ............................................. 243
RIGHT TO A FORMAL ACCOUNT ..................... 243
ACCRUAL OF RIGHT ............................................. 243
PERSON OBLIGED ................................................ 243

PRESCRIPTION OF ACTION .....................................

NATURE OF ACTION .............................................

243
244
PROPERTY RIGHTS OF PARTNERS ................ 244
IN GENERAL ....................................................... 244
PARTNERSHIP PROPERTY AND PARTNERSHIP CAPITAL 244
OWNERSHIP OF CERTAIN PROPERTY ........................ 244
RIGHTS IN SPECIFIC PROPERTY ............................... 244
INTEREST IN THE PARTNERSHIP ............................. 244
RIGHTS OF ASSIGNEE ........................................... 244
CHARGING OF PARTNERSHIP INTEREST BY PERSONAL
CREDITOR OF PARTNERS ...................................... 244
CHARGING ORDER ............................................... 245

RIGHT TO PROFITS AND OBLIGATION FOR

LOSSES .......................................................... 245
RULES FOR DISTRIBUTION OF PROFITS AND LOSSES .... 245
DESIGNATION OF SHARE BY THIRD PERSONS ............. 245
EXCLUSION OF PARTNER FROM SHARE .................... 245
OBLIGATION TO RENDER INFORMATION ...... 245
BASIS OF OBLIGATION .......................................... 245
OBLIGATION TO ACCOUNT AND ACT AS
TRUSTEE ........................................................ 245
BASIS OF OBLIGATION .......................................... 245

Operation of
the Partnership ................ 246

FIRM NAME .................................................... 246

RIGHT TO CHOOSE FIRM NAME ............................... 246
MANAGEMENT OF THE PARTNERSHIP .......... 246
POWERS OF A MANAGING PARTNER ........................ 246
REVOCATION OF POWER OF MANAGING PARTNER ...... 246
MANAGEMENT BY TWO OR MORE PARTNERS ............. 246
STIPULATION ON UNANIMITY OF MANAGING PARTNERS

....................................................................... 246
MANAGEMENT WHEN MANNER NOT AGREED UPON .... 246
INSTANCES OF MUTUAL AGENCY ............................ 246

Obligations of
partnership/partners to third
persons .............................. 247
LIABILITY OF PARTNERS FOR PARTNERSHIP
CONTRACTS .................................................. 247
NATURE OF INDIVIDUAL LIABILITY ........................... 247
LIABILITY OF INDUSTRIAL PARTNER ........................ 247
STIPULATION AGAINST INDIVIDUAL LIABILITY ............ 247
LIABILITY OF PARTNERS FOR PARTNERSHIP
CONTRACTS .................................................. 247
ACTS APPARENTLY FOR THE CARRYING ON OF USUAL
BUSINESS ......................................................... 247
ACTS NOT APPARENTLY FOR CARRYING ON OF THE USUAL
BUSINESS ......................................................... 247
ACTS OF STRICT DOMINION ................................... 247
ACTS IN CONTRAVENTION OF RESTRICTION ............... 248

CONVEYANCE OF REAL PROPERTY OF

PARTNERSHIP ............................................... 248

TITLE IN THE PARTNERSHIP NAME .......................... 248

TITLE IN THE NAME OF ONE OR MORE (NOT ALL) OF THE
PARTNERS AND THE RECORD DOES NOT DISCLOSE THE
RIGHT OF THE PARTNERSHIP ................................. 248
TITLE IN THE NAME OF ONE OR MORE OR ALL THE
PARTNERS, OR IN A THIRD PERSON IN TRUST FOR THE
PARTNERSHIP .................................................... 248
TITLE IN THE NAMES OF ALL THE PARTNERS .............. 248

LIABILITY OF PARTNERSHIP FOR ADMISSION BY

PARTNER ....................................................... 248
LIABILITY OF PARTNERSHIP FOR WRONGFUL
ACTS OF PARTNER ........................................ 248
LIABILITY OF THE PARTNERSHIP FOR
MISAPPLICATION OF MONEY OR PROPERTY
RECEIVED ...................................................... 248
LIABILITY OF OTHER PARTNERS FOR
WRONGFUL ACTS OR MISAPPLICATION ....... 248
LIABILITY IN CASE OF PARTNERSHIP BY
ESTOPPEL ...................................................... 248
LIABILITY OF PARTNER BY ESTOPPEL ....................... 248
NATURE OF LIABILITY ........................................... 249
EFFECTS OF ACTS OF PARTNER BY ESTOPPEL ............. 249
ESTABLISHING LIABILITY ....................................... 249
LIABILITY OF INCOMING PARTNER ................ 249
NOTICE TO OR KNOWLEDGE OF THE
PARTNERSHIP ............................................... 249
PREFERENCE OF PARTNERSHIP CREDITORS 249

Dissolution
and winding up ................. 250
CONCEPTS ...................................................... 250
EFFECT OF DISSOLUTION ON EXISTENCE OF
PARTNERSHIP ................................................ 250
CAUSES OF DISSOLUTION .............................. 250
WITHOUT VIOLATION OF THE AGREEMENT ................. 250
IN CONTRAVENTION OF THE AGREEMENT .................. 250
BY OPERATION OF LAW ......................................... 250
BY DECREE OF COURT ............................................ 251
OTHER CAUSES .................................................... 251
EFFECT OF DISSOLUTION ON AUTHORITY OF
PARTNERS ....................................................... 251
WITH RESPECT TO PARTNERS .................................. 251
WITH RESPECT TO THIRD PERSONS ........................... 251
LIABILITY OF PARTNERS IN TRANSACTIONS AFTER
DISSOLUTION .......................................................

251
CASES WHERE
PARTNERSHIP IS NOT BOUND........................ 252
PARTNERSHIP BY ESTOPPEL AFTER DISSOLUTION ....... 252
CONTRACTS AFTER DISSOLUTION BY SPECIFIC
CAUSES........................................................... 252
EFFECT OF DISSOLUTION ON EXISTING LIABILITY
OF PARTNERS ................................................ 252
WINDING UP PARTNERS ........................................ 252
WHO MAY WIND UP .............................................. 252
MANNER OF WINDING UP ...................................... 252

NATURE OF JUDICIAL LIQUIDATION .......................... 252

POWERS OF WINDING UP PARTNER .......................... 252

RIGHTS OF PARTNERS IN
CASE OF DISSOLUTION ................................... 252
DISSOLUTION WITHOUT
VIOLATION OF THE AGREEMENT .............................. 252
DISSOLUTION IN CONTRAVENTION
OF THE AGREEMENT ............................................. 253

RIGHTS OF PARTNERS
IN CASE OF RESCISSION ................................. 253
SETTLING OF ACCOUNTS
BETWEEN PARTNERS ..................................... 253
COMPOSITION OF PARTNERSHIP ASSETS .................. 253
AMOUNT OF CONTRIBUTION FOR LIABILITIES ............. 253
ENFORCEMENT OF CONTRIBUTION .......................... 253
ORDER OF APPLICATION OF ASSETS ......................... 254
DOCTRINE OF MARSHALING OF ASSETS .................... 254
DISTRIBUTION OF PROPERTY OF INSOLVENT PARTNER . 254
RIGHTS OF CREDITORS OF DISSOLVED
PARTNERSHIP ................................................ 254

CREDITORS OF DISSOLVED PARTNERSHIPAS CREDITORS OF

NEW PARTNERSHIP .............................................. 254
LIABILITY OF A NEW PARTNER ................................ 254
PRIORITY OF CREDITORS OF DISSOLVED PARTNERSHIP 254
EFFECT OF CONTINUING USE OF PARTNERSHIP NAME .. 254

RETIRED OR REPRESENTATIVE OF DECEASED

PARTNER ....................................................... 254
RIGHT TO AN ACCOUNT ................................. 254
EXISTENCE OF RIGHT ............................................ 255
NEED FOR LIQUIDATION ........................................ 255

Limited partnership .......... 255

DEFINITION .................................................... 255

CHARACTERISTICS ......................................... 255
ADVANTAGES OF LIMITED PARTNERSHIP ..... 255
GENERAL AND LIMITED PARTNER
DISTINGUISHED ............................................. 255
GENERAL AND LIMITED PARTNERSHIP
DISTINGUISHED ............................................. 256
FORMATION OF LIMITED PARTNERSHIP ....... 256
PURPOSE OF FILING ............................................. 256
NO SUBSTANTIAL COMPLIANCE .............................. 256
FIRM NAME ........................................................ 256
FALSE STATEMENT IN THE CERTIFICATE .................... 256
ADMISSION OF ADDITIONAL LIMITED PARTNERS ......... 257
GENERAL AND LIMITED PARTNER AT THE SAME TIME ... 257
MANAGEMENT OF LIMITED PARTNERSHIP.... 257
MANAGEMENT BY GENERAL PARTNERS .................... 257
LIABILITY OF LIMITED PARTNER FOR PARTICIPATING IN
CONTROL .......................................................... 257
POWERS OF GENERAL PARTNER ............................. 257

OBLIGATIONS OF A LIMITED PARTNER .......... 257

OBLIGATIONS RELATED TO CONTRIBUTION ................ 257
LIABILITY TO PARTNERSHIP CREDITORS .................... 258
LIABILITY TO SEPARATE CREDITORS ......................... 258
RIGHTS OF A LIMITED PARTNER .................... 258

RIGHTS OF LIMITED PARTNER, IN GENERAL ............... 258

RIGHT TO TRANSACT BUSINESS WITH PARTNERSHIP .... 258
RIGHT TO SHARE IN PROFITS .................................. 258
RIGHT TO RETURN OF CONTRIBUTION ....................... 259
PREFERENCE OF LIMITED PARTNERS ........................ 259
RIGHT TO ASSIGN INTEREST ................................... 259
RIGHT TO ASK FOR DISSOLUTION ............................. 259

CAUSES OF DISSOLUTION OF LIMITED

PARTNERSHIP ................................................ 259
SETTLEMENT OF ACCOUNTS .......................... 260
ORDER OF PAYMENT............................................. 260
SHARE IN THE PARTNERSHIP ASSETS ....................... 260
AMENDMENT OR CANCELLATION OF
CERTIFICATE ................................................... 260
WHEN CERTIFICATE IS CANCELLED ........................... 260
WHEN CERTIFICATE IS AMENDED ............................. 260
REQUIREMENTS FOR AMENDMENT OR CANCELLATION . 260

Contract of agency ........... 260

DEFINITION .................................................... 260

CHARACTERISTICS .......................................... 261
CONSTITUTION OF AGENCY ............................. 261
ESSENTIAL ELEMENTS............................................ 261
PARTIES ............................................................. 261
CAPACITY OF PARTIES ............................................ 261
INTENTION OF PARTIES .......................................... 261
CONSENT OF PARTIES ............................................ 261
POWER OF ATTORNEY ........................................... 262
FORM OF CONTRACT ............................................. 262
DESIGNATION BY THE PARTIES ................................ 262
ACTS DELEGATED ................................................ 262
PRESUMPTION OF EXISTENCE ................................. 262
COMMUNICATION OF EXISTENCE OF AGENCY .............. 262
DUTY OF THIRD PERSON ........................................ 262
EFFECT ........................................................... 262
EXTENSION OF PERSONALITY ................................. 262
THEORY OF IMPUTED KNOWLEDGE .......................... 262
DISTINGUISHED FROM OTHER CONTRACTS .. 263

Kinds of agency ................. 264

KINDS OF AGENCY, IN GENERAL .................... 264

AS TO MANNER OF ITS CREATION ............................ 264
AS TO CAUSE OR CONSIDERATION ........................... 264
AS TO EXTENT OF BUSINESS COVERED ...................... 265
AS TO AUTHORITY CONFERRED ............................... 265
AS TO ITS NATURE AND EFFECTS ............................. 265
AS TO KINDS OF PRINCIPAL .................................... 265
KINDS OF AGENCY AS TO MANNER OF
CREATION ...................................................... 265
EXPRESS AGENCY ................................................ 265
IMPLIED AGENCY ................................................. 265
KINDS OF AGENCY AS TO EXTENT OF BUSINESS
COVERED ........................................................ 265
UNIVERSAL AGENCY ............................................. 265
GENERAL AGENCY ............................................... 265
SPECIAL AGENCY ................................................. 265

KINDS OF AGENCY AS TO AUTHORITY

CONFERRED ................................................... 265
COUCHED IN GENERAL TERMS ................................ 265
COUCHED IN SPECIFIC TERMS ................................. 265
SPECIAL KINDS OF AGENCY ........................... 266
AGENCY BY ESTOPPEL........................................... 266
AGENCY WITH UNDISCLOSED PRINCIPAL ....................267
AGENCY BY OPERATION OF LAW ...............................267
IRREVOCABLE AGENCY ...........................................267
KINDS OF AGENTS ...........................................267
AS TO NATURE AND EXTENT OF AUTHORITY ................267
SPECIAL TYPES OF AGENTS .................................... 268

Powers of the agent ......... 268

AUTHORITY OF AN AGENT ............................. 268

KINDS OF AUTHORITY .................................... 268
SCOPE OF AUTHORITY ................................... 268
POWER TO BIND THE PRINCIPAL ................... 269
EFFECTS OF ACTS OF AN AGENT .................... 269

Obligations of the agent .. 269

OBLIGATIONS, IN GENERAL ........................... 269

GOOD FAITH AND LOYALTY TO HIS TRUST .................. 269
OBEDIENCE TO PRINCIPAL'S INSTRUCTIONS .............. 269
EXERCISE OF REASONABLE CARE ............................ 269
OBLIGATION TO CARRY OUT AGENCY ............ 269
OBLIGATION IN CASE HE
DECLINES AGENCY ......................................... 269
OBLIGATION TO
ADVANCE NECESSARY FUNDS ....................... 270
OBLIGATION TO ACT IN ACCORDANCE WITH
INSTRUCTIONS ............................................... 270
OBLIGATION TO PREFER INTEREST OF
PRINCIPAL ...................................................... 270
BASIS OF THE RULE .............................................. 270
APPLICATION ...................................................... 270
OBLIGATION TO ACCOUNT AND TO DELIVER
THINGS RECEIVED ......................................... 270
WHAT TO DELIVER ................................................. 271
LIABILITY FOR CONVERSION .................................... 271
EXEMPTING STIPULATION ....................................... 271
WHEN OBLIGATION NOT APPLICABLE ......................... 271
RESPONSIBILITY FOR ACTS OF SUBSTITUTE ... 271
SUB-AGENCY ....................................................... 271
POWER TO APPOINT .............................................. 271
RELATIONS AMONG THE PARTIES ............................. 271
EFFECTS OF SUBSTITUTION ..................................... 271
RESPONSIBILITY OF TWO OR MORE AGENTS .. 271
OBLIGATION FOR SUMS APPLIED TO HIS OWN
USE ................................................................. 272
OBLIGATIONS TO THIRD PERSONS ................ 272
LIABILITY OF AGENT FOR OBLIGATIONS CONTRACTED .. 272
VOID CONTRACTS ................................................ 272
PRESENTATION OF POWER OF ATTORNEY .................. 272
RATIFICATION BY PRINCIPAL .................................. 272
IGNORANCE OF AGENT .......................................... 272

OBLIGATIONS OF COMMISSION AGENT.......... 273

FACTOR OR COMMISSION AGENT ............................. 273
RESPONSIBILITY FOR GOODS RECEIVED .................... 273
SALE OF GOODS ON CREDIT WITHOUT AUTHORITY ....... 273
SALE OF GOODS ON CREDIT WITH AUTHORITY ............ 273
RESPONSIBILITY FOR FRAUD
AND NEGLIGENCE........................................... 273

Obligations of
the principal ....................... 274
OBLIGATIONS, IN GENERAL ........................... 274
OBLIGATION TO COMPLY WITH OBLIGATIONS
CONTRACTED ................................................. 274
RATIFICATION ..................................................... 274
SEPARATE CONTRACTS WITH PRINCIPAL AND AGENT ... 274
WHEN PRINCIPAL NOT LIABLE, IN SUMMARY.............. 274
OBLIGATION FOR
COMPENSATION OF AGENT ........................... 274
AMOUNT OF COMPENSATION ................................. 275
COMPENSATION OF BROKER .................................. 275
LIABILITY FOR EXPENSES AND DAMAGES ..... 275
NECESSARY FUNDS .............................................. 275
WHEN PRINCIPAL NOT LIABLE FOR EXPENSES ............ 275
DAMAGES .......................................................... 275
RIGHT OF RETENTION BY AGENT ............................. 275
MULTIPLE PRINCIPALS .......................................... 275
LIABILITY FOR QUASI-DELICT BY AGENT .................... 275

Extinguishment
of agency ............................ 276
MODES OF EXTINGUISHING AGENCY, IN
GENERAL .........................................................276
REVOCATION BY PRINCIPAL ...........................276
MULTIPLE PRINCIPALS ...........................................276
MANNER OF REVOCATION ......................................276
EFFECT OF REVOCATION
IN RELATION TO THIRD PARTIES

...............................276
WITHDRAWAL BY AGENT ................................ 277
LIABILITY FOR DAMAGES ........................................ 277
OBLIGATION TO CONTINUE AGENCY .......................... 277
DEATH, CIVIL INTERDICTION, INSANITY OR
INSOLVENCY ................................................... 277
DEATH OF PRINCIPAL ............................................ 277
DEATH OF AGENT ................................................. 277
ACCOMPLISHMENT OF OBJECT OR PURPOSE . 277
DISSOLUTION OF FIRM OR CORPORATION ..... 277
EXPIRATION OF TERM ..................................... 277
CREDIT TRANSACTIONS

Credit Transactions .......... 279

MEANING AND SCOPE OF CREDIT

TRANSACTIONS ............................................. 279
TWO TYPES OF CREDIT
TRANSACTIONS/CONTRACTS OF SECURITY . 279

Loan ................................... 279

CHARACTERISTICS OF A LOAN ...................... 279
COMMODATUM V. MUTUUM .......................... 279
OBLIGATIONS OF BAILOR AND BAILEE .......... 279
WHO MAY BE A BAILOR IN COMMODATUM? ............... 279
WHAT ARE THE TWO (2) KINDS OF COMMODATUM? .... 280
OBLIGATIONS OF A BAILOR IN COMMODATUM
....................................................................... 280
OBLIGATIONS OF A BAILEE IN COMMODATUM
....................................................................... 280
INTEREST AND SUSPENSION OF USURY LAW 281
KINDS OF INTEREST ..............................................281
WHEN IS COMPOUND INTEREST ALLOWED? ...............281
REQUISITES FOR INTEREST TO BE CHARGEABLE ..........281
EXCEPTIONS TO REQUISITE OF EXPRESS STIPULATION ..281
RULES FOR AWARD OF INTEREST IN THE CONCEPT OF
ACTUAL AND COMPENSATORY DAMAGES ...................281
ELEMENTS OF USURY ...........................................281

Deposit ............................. 282

CHARACTERISTICS ........................................ 282

CONTRACT OF DEPOSIT IS GENERALLY
GRATUITOUS .................................................. 282
ONLY MOVABLE THINGS MAY BE THE OBJECT OF
A DEPOSIT ...................................................... 282
OBLIGATIONS OF DEPOSITOR ....................... 282
EXTINGUISHMENT OF DEPOSIT ..................... 282
EFFECT OF DEATH OF DEPOSITOR OR
DEPOSITARY .................................................. 282
KINDS OF DEPOSIT ........................................ 282
VOLUNTARY DEPOSIT .................................... 282
NECESSARY DEPOSIT .................................... 282
KINDS OF NECESSARY DEPOSITS ............................. 283
DEPOSITS BY TRAVELERS IN HOTELS AND INNS ........... 283
EXTENT OF LIABILITY UNDER ART.1998 ................... 283
WHEN HOTEL-KEEPER LIABLE ................................ 283
WHEN HOTEL-KEEPER NOT LIABLE .......................... 283
HOTEL-KEEPERS RIGHT TO RETENTION ................... 283
JUDICIAL DEPOSIT ......................................... 283
NATURE AND PURPOSE ........................................ 283
DEPOSITARY OF SEQUESTERED PROPERTY ................ 283
APPLICABLE LAW ................................................ 283

Guaranty and Suretyship 283

GUARANTY DISTINGUISHED
FROM SURETYSHIP ....................................... 284
NATURE AND EXTENT OF GUARANTY ........... 284
NATURE AND EXTENT OF GUARANTY ....................... 284
NATURE AND EXTENT OF SURETYSHIP ......... 286
EFFECT OF GUARANTY ................................... 287
EFFECTS OF GUARANTY BETWEEN THE GUARANTOR AND
THE CREDITOR ................................................... 287
EFFECTS OF GUARANTY BETWEEN THE DEBTOR AND THE
GUARANTOR ...................................................... 288
EFFECTS OF GUARANTY AS BETWEEN CO-GUARANTORS

....................................................................... 289
EXTINGUISHMENT OF GUARANTY ................. 289
LEGAL AND JUDICIAL BONDS ........................ 289
QUALIFICATIONS OF PERSONAL BONDSMAN ............. 289
PLEDGE OR MORTGAGE IN LIEU OF BOND ................. 290
BONDSMAN NOT ENTITLED TO EXCUSSION ............... 290

Pledge .............................. 290

DEFINITION ................................................... 290

PROVISIONS APPLICABLE ONLY TO PLEDGE . 290
KINDS ............................................................ 290
ESSENTIAL REQUIREMENTS ......................... 290
ESSENTIAL REQUISITES COMMON TO PLEDGE AND
MORTGAGE .......................................................

290
OBLIGATION OF PLEDGEE ............................. 290
RIGHTS OF PLEDGOR .................................... 290
PERFECTION .................................................. 291
REQUISITES FOR PERFECTION ................................. 291
FORECLOSURE .............................................. 291
REQUIREMENTS IN SALE OF THE THING PLEDGED BY A
CREDITOR, IF CREDIT IS NOT PAID ON TIME ............... 291
EFFECT OF THE SALE OF THE THING PLEDGED ............. 291

PLEDGE BY OPERATION OF LAW ................... 291

LEGAL PLEDGES/PLEDGE BY OPERATION OF LAW ........ 291
DISTINGUISHED FROM CHATTEL MORTGAGE
........................................................................ 291

Real Mortgage ................. 292

DEFINITION AND CHARACTERISTICS ............. 292

OBJECTS OF REAL MORTGAGE ................................ 292
CHARACTERISTICS ............................................... 292
KINDS ............................................................... 292
PRINCIPLE OF INDIVISIBILITY OF PLEDGE/MORTGAGE . 293
ESSENTIAL REQUISITES ................................. 293
ESSENTIAL REQUISITES COMMON TO PLEDGE AND
MORTGAGE ........................................................

293
FORECLOSURE ............................................... 293
FORECLOSURE OF MORTGAGE ................................ 293
KINDS OF FORECLOSURE ....................................... 293
JUDICIAL FORECLOSURE ....................................... 293
EXTRAJUDICIAL FORECLOSURE ............................... 293

Antichresis ........................ 295

DEFINITION AND CHARACTERISTICS ............. 295

CHARACTERISTICS ............................................... 295
SPECIAL REQUISITES ............................................ 295
OBLIGATIONS OF ANTICHRETIC CREDITOR ... 295
REMEDIES OF CREDITOR IN CASE OF NON-PAYMENT OF
DEBT ................................................................ 295

Chattel Mortgage ............ 296

DEFINITION AND CHARACTERISTICS ............. 296

CHARACTERISTICS ............................................... 296
REGISTRATION .............................................. 296
PERIOD WITHIN WHICH REGISTRATION SHOULD BE MADE

....................................................................... 296
EFFECT OF REGISTRATION ..................................... 296

REGISTRATION OF ASSIGNMENT OF MORTGAGE NOT

REQUIRED ......................................................... 296
VENUE OF REGISTRATION ...................................... 296

VALIDITY OF CHATTEL MORTGAGE ................ 296

FORMAL REQUISITES .................................... 296
DESCRIPTION OF PROPERTY .................................. 297
PROPERTY COVERED BY CM ................................... 297
DISPOSITION OF PROCEEDS .......................... 297

Quasi-Contracts ............... 297

NEGOTIORUM GESTIO (UNAUTHORIZED

MANAGEMENT) ............................................. 298
THE OBLIGATION DOES NOT ARISE .......................... 298
OBLIGATIONS OF A GESTOR ................................... 298
OBLIGATIONS OF THE OWNER OF THE PROPERTY OR
BUSINESS ......................................................... 298
EFFECT OF RATIFICATION ...................................... 298
EXTINGUISHMENT OF MANAGEMENT ....................... 298

SOLUTIO INDEBITI (UNDUE PAYMENT) ........ 299

WHEN DEBT NOT YET DUE ..................................... 299
RESPONSIBILITY OF TWO OR MORE PAYEES ............... 299
WHEN MONEY OR THING DELIVERED IS OWNED BY THIRD
PERSON ............................................................ 299
LIABILITY OF PAYEE ............................................ 299
EXEMPTION FROM THE OBLIGATION TO RESTORE THE
PAYMENT UNDULY MADE ...................................... 299
PRESUMPTION OF PAYMENT BY MISTAKE, DEFENSE .... 299

OTHER QUASI-CONTRACTS ........................... 299

Concurrence and Preference

of Credits .......................... 300
MEANING OF
CONCURRENCE AND PREFERENCE ................ 300
PREFERRED CREDITS ON SPECIFIC MOVABLES
....................................................................... 300
PREFERRED CREDITS ON SPECIFIC IMMOVABLES
AND REAL RIGHTS .......................................... 301
PREFERRED CREDITS ON OTHER PROPERTY,
REAL AND PERSONAL .................................... 301
EXEMPT PROPERTY ....................................... 302
CLASSIFICATION OF CREDITS ........................ 302
ORDER OF PREFERENCE OF CREDITS ........... 302
LAND TITLES & DEEDS

Torrens System ................. 304

THE TORRENS SYSTEM .................................. 304

PURPOSE ........................................................... 304
ADVANTAGES ..................................................... 304
BACKGROUND .................................................... 304
CERTIFICATE OF TITLE ................................... 304
ORIGINAL CERTIFICATE OF TITLE OR OCT ................... 304
TRANSFER CERTIFICATE OF TITLE OR TCT .................. 304
PATENTS .......................................................... 304

Regalian Doctrine............. 305

EFFECTS ......................................................... 305

CONCEPT OF NATIVE TITLE, TIME IMMEMORIAL

POSSESSION ................................................... 305

Citizenship Doctrine ......... 305

INDIVIDUALS AND CORPORATIONS ............... 305

CONSTITUTIONAL REQUIREMENTS AND LIMITATIONS ... 305
KRIVENKO DOCTRINE ............................................ 305

Original Registration ........ 306

WHO MAY APPLY ............................................ 306

UNDER PD 1529 .................................................. 306
UNDER CA 141 .................................................... 307
UNDER RA 8371 .................................................. 307
REGISTRATION PROCESS
AND REQUIREMENTS ..................................... 309
WHAT LANDS ARE REGISTRABLE ............................. 309
SURVEY ..............................................................310
APPLICATION .......................................................310
INITIAL HEARING ..................................................310
PUBLICATION .......................................................310
OPPOSITION ........................................................ 311
HEARING ............................................................ 311
JUDGMENT .......................................................... 311
ISSUANCE OF DECREE ............................................ 311
REMEDIES........................................................ 311
GROUND FOR REOPENING AND REVIEWING THE DECREE OF
REGISTRATION ..................................................... 311
PERIODS ............................................................. 311
PROHIBITIONS ..................................................... 311

IMPRESCRIPTIBLE ........................................... 312

NOT SUBJECT TO COLLATERAL ATTACK ......... 312
JUDICIAL CONFIRMATION OF IMPERFECT OR INCOMPLETE
TITLES ................................................................

313
CADASTRAL REGISTRATION ........................... 314
STEPS IN CADASTRAL REGION PROCEEDINGS .............. 315

Subsequent Registration .. 315

TWO TYPES OF DEALINGS ............................... 315

VOLUNTARY DEALINGS .......................................... 315
INVOLUNTARY DEALINGS ........................................ 315
NECESSITY AND EFFECTS OF REGISTRATION . 315
WHEN SHOULD A PURCHASER INVESTIGATE?
........................................................................ 316
VOLUNTARY DEALINGS ................................... 317
REGISTRATION OF VOLUNTARY
INSTRUMENTS IN GENERAL .................................... 317
REGISTRATION OF DEEDS OF SALE AND TRANSFERS ..... 318
MORTGAGES AND LEASES ...................................... 318
POWERS OF ATTORNEY; TRUSTS .............................. 318

INVOLUNTARY DEALINGS ............................... 319

ATTACHMENT ...................................................... 319
EXECUTION AND TAX DELINQUENCY SALES ................ 320
NOTICE OF LIS PENDENS ....................................... 320
ADVERSE CLAIM .................................................. 320

Non-registrable Properties

............................................ 321
NON-REGISTRABLE LANDS ............................. 321

Dealings with Unregistered

Lands ................................. 322
TORTS & DAMAGES

Principles of Torts ............. 324

ABUSE OF RIGHT ............................................ 324

ELEMENTS ......................................................... 324
ACTS CONTRARY TO LAW .............................. 324
REQUISITES ........................................................ 324
ACTS CONTRARY TO MORALS ........................ 324
ELEMENTS ......................................................... 324
EXAMPLES ......................................................... 324
BREACH OF PROMISE TO MARRY, SEDUCTION AND SEXUAL
ASSAULT ........................................................... 324
MALICIOUS PROSECUTION ..................................... 325
ELEMENTS ......................................................... 325
PUBLIC HUMILIATION ........................................... 325
UNJUSTIFIED DISMISSAL ....................................... 325
UNJUST ENRICHMENT ................................... 325
LIABILITY WITHOUT FAULT ..................................... 325
BASIS OF LIABILITY .............................................. 326
SCOPE OF LIABILITY ............................................. 326

Classification of Torts ....... 326

ACCORDING TO MANNER OF COMMISSION ... 326

ACCORDING TO MANNER OF SCOPE ............. 326
GENERAL ........................................................... 326
SPECIFIC ............................................................ 326

The Tortfeasor .................. 326

THE DIRECT TORTFEASOR.............................. 326

PERSONS MADE LIABLE FOR OTHERS ........... 326
PRINCIPLE OF VICARIOUS LIABILITY; DEFINITION ......... 326
BASIS OF VICARIOUS LIABILITY ................................ 326
LIABILITY OF THE ACTUAL TORTFEASOR .................... 327
2 REQUISITES ACCORDING TO CHIRONI ..................... 327
PRESUMPTION OF NEGLIGENCE ON PERSONS INDIRECTLY
RESPONSIBLE ..................................................... 327
NATURE OF LIABILITY ........................................... 327

PERSONS VICARIOUSLY LIABLE ..................... 327

WHO ARE LIABLE FOR MINORS ................................ 327
PARENTS AND ADOPTERS ............................. 327
BASIS OF LIABILITY ............................................... 327
WHEN RESPONSIBILITY CEASES ............................... 327
MEANING OF MINORITY ..................................... 327
ADOPTED CHILDREN ............................................. 327
ILLEGITIMATE CHILDREN ....................................... 327
REASON FOR VICARIOUS LIABILITY ........................... 327
REQUISITES FOR LIABILITY TO ATTACH ...................... 328
PARENTAL AUTHORITY OVER FOUNDLINGS, ABANDONED,
NEGLECTED OR ABUSED AND OTHER SIMILARLY SITUATED
CHILDREN ..........................................................

328

GUARDIANS .................................................... 328

LIABILITY OF GUARDIANS ....................................... 328
SCHOOL, TEACHERS AND ADMINISTRATORS 328
OWNERS AND MANAGERS OF ESTABLISHMENTS
AND ENTERPRISES ......................................... 329
EMPLOYERS (IN GENERAL) ............................. 329
MEANING OF EMPLOYER ........................................ 329
INDEPENDENT CONTRACTOR .................................. 330
REQUISITES ........................................................ 330
EMPLOYER NEED NOT BE ENGAGED IN BUSINESS OR
INDUSTRY ..........................................................
DEFENSE OF DILIGENCE IN SELECTION AND SUPERVISION

330

........................................................................ 331
THE STATE ...................................................... 332
INSTANCES WHERE THE STATE GIVES ITS CONSENT TO BE
SUED ................................................................

332
JOINT TORTFEASORS ..................................... 332
DEFINITION OF JOINT TORTFEASORS ..................... 332
APPLICABILITY OF THE PROVISION ........................... 332
NATURE OF LIABILITY ........................................... 332

Acts of Omission and its

Modalities ........................... 333
Proximate Cause ............... 333

CONCEPT OF PROXIMATE CAUSE .................... 333

DEFINITION ..................................................... 333
PROXIMATE CAUSE ............................................... 333
PROXIMATE LEGAL CAUSE ...................................... 333
DIFFERENTIATED FROM ................................. 333
REMOTE CAUSE .................................................... 333
INTERVENING CAUSE ............................................. 333
EFFICIENT INTERVENING CAUSE .............................. 334
TESTS TO DETERMINE PROXIMATE CAUSE .... 334
CAUSE IN FACT .................................................... 334
EFFECTIVENESS OF THE CAUSE; BUT FOR RULE ....... 334
SUBSTANTIAL FACTOR TEST ................................... 334
FORESEEABILITY TEST .......................................... 334
NATURAL AND PROBABLE CONSEQUENCE TEST .......... 334
ORDINARY AND NATURAL OR
DIRECT CONSEQUENCE TEST .................................. 334
HINDSIGHT TEST ................................................. 334
ORBIT OF THE RISK TEST ....................................... 334

CAUSE V. CONDITION ..................................... 334

LEGAL CAUSE ................................................. 334
NATURAL AND PROBABLE CONSEQUENCES ............... 334
FORESEEABILITY ................................................. 334
DOCTRINE OF LAST CLEAR CHANCE .............. 335
ELEMENTS ......................................................... 335
COVERS SUCCESSIVE ACTS OF NEGLIGENCE ............... 335
INAPPLICABLE TO JOINT TORTFEASORS .................... 335
CONTRIBUTORY NEGLIGENCE ........................ 335
WHEN IS IT A BAR TO RECOVERY.............................. 335

Legal Injury........................ 336

ELEMENTS ..................................................... 336

CLASSES OF INJURY ....................................... 336

INJURY TO PERSONS ............................................ 336
INJURY TO PROPERTY ........................................... 336
INJURY TO RELATIONS .......................................... 336

Intentional Torts ............... 336

CONCEPT ........................................................ 336

VIOLATIONS OF A PERSONS SECURITY AND
PHYSICAL INJURIES ....................................... 337
BATTERY (PHYSICAL INJURY) .................................. 337
INTERESTS PROTECTED BY LAW .............................. 337
ASSAULT (GRAVE THREAT)..................................... 337
FALSE IMPRISONMENT (ILLEGAL DETENTION) ............ 337
INTERFERENCE WITH PERSONAL PROPERTY 337
TRESPASS TO LAND .............................................. 337
TRESPASS TO CHATTELS ........................................ 337
CONVERSION ...................................................... 337
INTENTIONAL NON-PHYSICAL HARMS....................... 337
VIOLATION OF PERSONAL DIGNITY ........................... 338
INFLICTION OF EMOTIONAL DISTRESS ....................... 338
VIOLATION OF PRIVACY ......................................... 338
DISTURBANCE OF PEACE OF MIND ........................... 339
MALICIOUS PROSECUTION ..................................... 339
DEFAMATION, FRAUD
AND PHYSICAL INJURIES ................................ 340
DEFAMATION ...................................................... 340
DEFENSES ......................................................... 340
FRAUD OR MISREPRESENTATION (FORMERLY DECEIT) . 340
SEDUCTION ........................................................ 340
UNJUST DISMISSAL .............................................. 340
INTERFERENCE WITH RELATIONS ................... 341
KINDS ................................................................ 341
FAMILY RELATIONS ......................................... 341
ALIENATION OF AFFECTION ..................................... 341
LIABILITY OF PARENTS, GUARDIANS OR KIN ................ 341
LOSS OF CONSORTIUM .......................................... 342
CRIMINAL CONVERSATION (ADULTERY) .................... 342
SOCIAL RELATIONS ........................................ 342
MEDDLING WITH OR DISTURBING FAMILY RELATIONS .. 342
INTRIGUING TO CAUSE ANOTHER TO BE ALIENATED FROM
HIS FRIENDS .......................................................

342
ECONOMIC RELATIONS .................................. 343
INTERFERENCE WITH CONTRACTUAL RELATIONS ........ 343
UNFAIR COMPETITION .......................................... 343
POLITICAL RELATIONS ................................... 343
VIOLATION OF RIGHT TO SUFFRAGE.......................... 343
VIOLATION OF OTHER POLITICAL RIGHTS (FREEDOM OF
SPEECH, PRESS, ASSEMBLY AND PETITION, ETC.) ....... 344

Negligence ........................ 344

ELEMENTS ...................................................... 344

TEST OF NEGLIGENCE ..................................... 344
GOOD FATHER OF A FAMILY (BONUS PATER
FAMILIAS)....................................................... 345
WHAT CONSTITUTES THE CONDUCT OF A PRUDENT MAN IN
A GIVEN SITUATION ............................................. 345

STANDARD OF CARE ...................................... 345

STANDARD OF CARE REQUIRED OF BANKS ................ 345
STANDARD OF CARE OF CHILDREN .......................... 345
STANDARD OF CARE OF EXPERTS/PROFESSIONALS .... 345
IN CASE OF INSANE PERSONS ................................. 346
EMERGENCY RULE OR SUDDEN PERIL DOCTRINE ......... 346
UNREASONABLE RISK OR HARM ............................. 346
EVIDENCE ....................................................... 346
QUANTUM OF PROOF IN QUASI-DELICT VS. QUANTUM OF
PROOF IN BREACH OF CONTRACT ........................... 346
PRESUMPTION OF NEGLIGENCE .................... 346
PRESUMED NEGLIGENCE OR NEGLIGENCE PER SE ........347
RES IPSA LOQUITUR ..............................................347
DEFENSES .......................................................347
DUE DILIGENCE ....................................................347
ACTS OF PUBLIC OFFICERS ......................................347
ACCIDENT OR FORTUITOUS EVENT ............................347
DAMNUM ABSQUE INJURIA .................................... 348
AUTHORITY OF LAW ............................................. 348
ASSUMPTION OF RISK (VOLENTI NON FIT INJURA) ....... 348
LAST CLEAR CHANCE ............................................ 349
PRESCRIPTION ................................................... 349
WAIVER ............................................................. 349
DOUBLE RECOVERY ............................................. 349
ACTIONS AVAILABLE TO VICTIMS OF NEGLIGENCE ........ 350
EFFECT OF ACQUITTAL OF THE ACCUSED ON HIS CIVIL
LIABILITY ...........................................................
NO RESERVATION IS REQUIRED IN THE CRIMINAL CASE FOR
THE FILING OF CIVIL ACTION ARISING FROM QUASI -DELICT

350

....................................................................... 350

Special Liability in Particular

Cases ................................. 350

PRODUCTS LIABILITY ...................................... 351

REQUISITES OF LIABILITY ........................................ 351
BURDEN OF PROOF ............................................... 351
WHO MAY RECOVER .............................................. 351
CONSUMER ACT ................................................... 351
NUISANCE ...................................................... 354
LIABILITY FOR NEGLIGENCE VS. LIABILITY FOR NUISANCE
....................................................................... 354
NUISANCE PER SE ................................................ 354
NUISANCE PER ACCIDENCE .................................... 355
PUBLIC NUISANCE ................................................ 355
PRIVATE NUISANCE .............................................. 355
ATTRACTIVE NUISANCE ......................................... 355
VIOLATION OF CONSTITUTIONAL RIGHTS ...... 356
VIOLATION OF CIVIL LIBERTIES ................................ 356
VIOLATIONS OF RIGHTS COMMITTED BY PUBLIC OFFICERS

....................................................................... 356
PROVINCES, CITIES, AND MUNICIPALITIES ................. 357
OWNERS OF MOTOR VEHICLES ................................ 357
PROPRIETOR OF BUILDING OR STRUCTURE ................ 358
HEAD OF FAMILY .................................................. 359

Strict Liability .................... 359

POSSESSOR AND USER OF AN ANIMAL ......... 359
APPLICABILITY OF PROVISION ................................. 359
BASIS ................................................................ 359
POSSIBLE DEFENSES AGAINST THIS LIABILITY ............. 359
SCOPE OF PROVISION ........................................... 359
NUISANCE ...................................................... 359
CLASSES ............................................................ 359
EASEMENT AGAINST NUISANCE ............................... 360
PRODUCTS LIABILITY .................................... 360
CONSUMER ACT ............................................. 360

Damages ........................... 362

DEFINITION .................................................... 362

DAMAGES VS. INJURY..................................... 362
ELEMENTS FOR RECOVERY OF DAMAGES ...... 362
CLASSIFICATION ............................................. 362
ACCORDING TO PURPOSE ...................................... 362
ACCORDING TO MANNER OF DETERMINATION ............ 362
SPECIAL AND ORDINARY........................................ 362

Actual and Compensatory

Damages ........................... 362
REQUISITES .................................................... 362
WHEN IS A PERSON ENTITLED ...................... 362
ALLEGED AND PROVED WITH CERTAINTY ...... 362
THE DAMAGES MUST BE PROVEN BY
COMPETENT EVIDENCE (ADMISSIBLE OR
PROBATIVE) ................................................... 362
DEGREE OF CERTAINTY REQUIRED AS TO: FACT,
CAUSE AND AMOUNT OF DAMAGES .............. 363
NOT SPECULATIVE ......................................... 363
COMPONENTS ................................................ 363
VALUE OF LOSS; UNREALIZED PROFIT .......... 363
ATTORNEYS FEES AND EXPENSES OF
LITIGATION..................................................... 363
INTEREST ....................................................... 364
INTEREST ACCRUES WHEN ..................................... 364
COMPOUNDING OF INTEREST ................................. 364
DETERMINATION OF LEGAL INTEREST ...................... 364
START OF DELAY ............................................ 365
EXTENT OR SCOPE OF ACTUAL DAMAGES ..... 365
IN CONTRACTS AND QUASI-CONTRACTS ....... 365
IN CRIMES AND QUASI-DELICTS .................... 366

Moral Damages ................ 366

WHEN AWARDED ............................................ 367

REQUISITES FOR
AWARDING MORAL DAMAGES ........................ 367
GENERAL PRINCIPLES OF RECOVERY ............. 367
WHEN RECOVERABLE .................................... 368
IN SEDUCTION, ABDUCTION, RAPE AND OTHER LASCIVIOUS
ACTS ................................................................ 368
IN ACTS REFERRED TO IN ARTS. 21, 26, 27, 28, 29, 32,

34 &35,

NCC ..................................................... 368

IN CASES OF MALICIOUS PROSECUTION .................... 370

Nominal Damages ............370

REQUISITES AND CHARACTERISTICS ............. 370

WHEN AWARDED ........................................... 370

Temperate Damages ........370

REQUISITES ..................................................... 371

Liquidated Damages .......... 371

REQUISITES AND CHARACTERISTICS .............. 371
RULES GOVERNING BREACH OF CONTRACT ... 371

Exemplary Or Corrective
Damages ............................. 371
WHEN RECOVERABLE ..................................... 372
IN CRIMINAL OFFENSES ........................................ 372
IN QUASI-DELICTS ................................................ 372
IN CONTRACTS AND QUASI-CONTRACTS.................... 372
REQUISITES ........................................................ 372
DAMAGES IN CASE OF DEATH RE. CRIMES AND QUASIDELICTS
............................................................. 373

Graduation of Damages ... 373

DUTY OF THE INJURED PARTY ........................ 373

BURDEN OF PROOF ........................................ 374
RULES ............................................................. 374
IN CRIMES .......................................................... 374
IN QUASI-DELICTS ................................................ 374
CONTRIBUTORY NEGLIGENCE ................................. 374
PLAINTIFFS NEGLIGENCE ...................................... 374
IN CONTRACTS, QUASI-CONTRACTS AND QUASI-DELICTS
....................................................................... 374
INSTANCES OF GROUNDS FOR MITIGATION OF DAMAGES

....................................................................... 374
RULE WHEN CONTRACTING PARTIES ARE IN PARI DELICTO

....................................................................... 375
LIQUIDATED DAMAGES .................................. 375
COMPROMISE ................................................. 375

Miscellaneous Rules ......... 375

DAMAGES THAT CANNOT CO-EXIST ............... 375

NOMINAL WITH OTHER DAMAGES ............................ 375
ACTUAL AND LIQUIDATED ...................................... 375
DAMAGES THAT MUST CO-EXIST ................... 375
EXEMPLARY WITH MORAL, TEMPERATE, LIQUIDATED OR
COMPENSATORY .................................................. 375
DAMAGES THAT MUST STAND ALONE ............ 375
NOMINAL DAMAGES .............................................. 376
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Effect and Application of

Laws
The Civil Code took effect on August 30, 1950
WHEN LAWS TAKE EFFECT
Art. 2. Laws shall take effect after fifteen days
following the completion of their publication in the
Official Gazette, unless it is otherwise provided. This
Code shall take effect one year after such
publication. (1a)
Taada v. Tuvera (1986):
(a) The clause "unless it is otherwise provided" refers
to the date of effectivity and not to the
requirement of publication itself, which cannot in
any event be omitted.
(b) Publication is indispensable in every case, but the
legislature may in its discretion provide that the
usual fifteen-day period shall be shortened or
extended.
(c) EXCEPTION: interpretative regulations and those
internal in nature
IGNORANCE OF THE LAW
Art. 3. Ignorance of the law excuses no one from
compliance therewith. (2)
(a) Conclusive Presumption That everyone knows
the law, even if they have no actual knowledge of
the law
(b) Mistake of Fact & Difficult Questions of Law These may excuse a party from the legal
consequences of his conduct; but not ignorance
of law.
(c) In specific instances provided by law, mistake as
to difficult legal questions has been given the
same effect as a mistake of fact. (Tolentino)
(d) The laws referred to by this article are those of
the Philippines. There is no conclusive
presumption of knowledge of foreign laws.
(Tolentino)
RETROACTIVITY OF LAWS
Art. 4. Laws shall have no retroactive effect, unless
the contrary is provided. (3)
General Rule: All statutes are to be construed as
having only prospective operation
Exceptions
(1) When the law itself expressly provides
Exceptions to Exception:
(a) Ex post facto law
(b) Impairment of contract
(2) In case of remedial statutes
(3) In case of curative statutes
(4) In case of laws interpreting others
(5) In case of laws creating new rights [Bona v.
Briones (1918)]
(6) Penal Laws favorable to the accused
ACTS CONTRARY TO LAW
Art. 5. Acts executed against the provisions of

mandatory or prohibitory laws shall be void, except

when the law itself authorizes their validity. (4a)
WAIVER OF RIGHTS
Art. 6. Rights may be waived, unless the waiver is
contrary to law, public order, public policy, morals, or
good customs, or prejudicial to a third person with a
right recognized by law. (4a)
Waiver the relinquishment of a known right with
both knowledge of its existence and an intention to
relinquish it. [Portland v. Spillman]
Exceptions:
(1) If the waiver is contrary to law, public order,
public policy, morals or good customs
(2) If the waiver prejudices a third person
(3) If the alleged rights do not yet exist
(4) If the right is a natural right
REPEAL OF LAWS
Art. 7. Laws are repealed only by subsequent ones,
and their violation or non-observance shall not be
excused by disuse, or custom or practice to the
contrary.
When the courts declared a law to be inconsistent
with the Constitution, the former shall be void and
the latter shall govern.
Administrative or executive acts, orders and
regulations shall be valid only when they are not
contrary to the laws or the Constitution. (5a)
TWO KINDS OF REPEAL OF LAW [Tolentino]
(1) Express or Declared contained in a special
provision of a subsequent law
(2) Implied or Tacit takes place when the provisions
of the subsequent law are incompatible or
inconsistent with those of an earlier law.
JUDICIAL DECISIONS
Art. 8. Judicial decisions applying or interpreting the
laws or the Constitution shall form a part of the legal
system of the Philippines. (n)
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(a) Jurisprudence cannot be considered as an

independent source of law; it cannot create law.
(1 Camus 38 as cited in Tolentino)
(b) But the Courts interpretation of a statute
constitutes part of the law as of the date it was
originally passed since the Courts construction
merely establishes contemporaneous legislative
intent that the interpreted law carried into effect.
[Senarillos v. Hermosisima (1956)]
DUTY TO RENDER JUDGMENT
Art. 9. No judge or court shall decline to render
judgment by reason of the silence, obscurity or
insufficiency of the laws. (6)
Exception:
This article does not apply to criminal prosecutions
because where there is no law punishing an act, the
case must be dismissed. [Tolentino]

PRESUMPTION AND APPLICABILITY OF CUSTOM

Art. 10. In case of doubt in the interpretation or
application of laws, it is presumed that the
lawmaking body intended right and justice to prevail.
(n)
Art. 11. Customs which are contrary to law, public
order or public policy shall not be countenanced. (n)
Art. 12. A custom must be proved as a fact, according
to the rules of evidence. (n)
LEGAL PERIODS
Art. 13. When the laws speak of years, months, days
or nights, it shall be understood that years are of
three hundred sixty-five days each; months, of thirty
days; days, of twenty-four hours; and nights from
sunset to sunrise.
If months are designated by their name, they shall be
computed by the number of days which they
respectively have.
In computing a period, the first day shall be
excluded, and the last day included. (7a)
POLICY ON LAST DAY BEING A LEGAL HOLIDAY/SUNDAY
(a) If the period arises by statute or orders by the
government, the last day will automatically be
considered the next working day
(b) If the period arises from a contractual
relationship, the act will still be due on that Legal
Holiday/Sunday
APPLICABILITY OF PENAL LAWS
Art. 14. Penal laws and those of public security and
safety shall be obligatory upon all who live or sojourn
in the Philippine territory, subject to the principles of
public international law and to treaty stipulations.
(8a)
EXEMPTIONS UNDER INTERNATIONAL LAW (THEORY OF
EXTRATERRITORIALITY):
(1) When the offense is committed by a foreign
sovereign while in Philippine territory
(2) When the offense is committed by diplomatic
representatives
(3) When the offense is committed in a public or
armed vessel of a foreign country.
CONFLICT OF LAWS
CONFLICT OF LAWS/ PRIVATE INTERNATIONAL LAW
(a) It is a branch or part of Philippine Law which
regulates the application of foreign law within
Philippine jurisdiction in the resolution of cases
involving foreign elements.
(b) It is that part of municipal law which governs
cases involving a foreign element.
(c) Private International Law is more commonly
known in other jurisdictions as conflict of laws
SOURCES

(1) Codes and statutes

(2) Treaties and international conventions
(3) Treatises, commentaries, and studies of learned

societies
(4) Judicial decisions
EXAMPLES OF CONFLICT OF LAW RULES IN THE PHILIPPINES

(1) Art. 15 CC: Lex Patriae

(2) Art. 1251 (par. 3) CC: Lex Domicili
(3) Art. 16 CC: Lex Situs/ Lex Rei Sitae
(4) Art. 17 (par. 1) CC: Lex Loci Contractus
(5) Art. 71 CC: Lex Loci Celebrationis
(6) Art. 26 (par. 1) FC: Lex Loci Celebrationis
(7) Art. 1306 CC: Lex Loci Intentionis
Art. 15. Laws relating to family rights and duties, or
to the status, condition and legal capacity of persons
are binding upon citizens of the Philippines, even
though living abroad. (9a)
Most civil law countries such as the Philippines
follow the National Law Theory:
It is the nationality or citizenship of the individual,
which regulates the following:
(a) Civil status
(b) Capacity
(c) Condition
(d) Family rights and duties
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(e) Laws on Succession

(f) Capacity to succeed
According to the Supreme Court, it is a conflict of
laws theory by virtue of which jurisdiction over the
particular subject matter affecting a person is
determined by the latters nationality. [Ellis vs.
Republic (1963)]
RULE ON PROPERTY

Controlling Law Lex Situs/Lex Rei Sitae

General Rule: Real and Personal Property is subject
to the law of the country where it is situated (Art. 16)
Application of the Doctrine of Lex Situs/Lex Rei Sitae
(1) The capacity to transfer or acquire property is
governed by Lex Situs.
Note: Transfer of property to a foreigner who
subsequently became a Filipino citizen shall be
recognized [Llantino v Co Liong Chong]
(2) The formalities of a contract to convey property
are governed by Lex Situs
Exceptions to Lex Situs
(1) Transactions Not Affecting Transfer of Title or
Ownership of Land: Lex Intentionis or Lex
Voluntatis
(2) Contracts where Real Property Offered as Security:
The principal contract is the loan while the
mortgage of the land is only an accessory
(a) Mortgage - Lex Situs
(b) Loan Contract - Rules on ordinary contracts
(3) Intestate and Testamentary Succession:
Intestate and testamentary successions shall be
regulated by the national law of the decedent,
with respect to the following [Art. 16(2); Art. 1039]

(a) Order of succession

(b) Amount of succession rights
(c) Intrinsic validity of the testamentary provisions
(d) Capacity to succeed
(4) Under a Policy-centered Approach:
Forum court is not bound to look to the law of the
situs when the situs of the movable property is
insignificant or accidental
(a) Questions relating to the validity and effect of
the transfer of the movable property are
governed by the law of the place of principal
use
(b) Where the issue involves considerations other
than the validity and effect of the transfer
itself, governing law is the law of the state
which has real interest
RULE ON SUCCESSION

Extrinsic Validity [Arts. 17, 815-817, CC]

Place of
execution
Applicable law
Filipino Testator
Philippines Philippine Law
Foreign
Country
(1) Law of the place where he
may be (lex loci
celebrationis) [Art 815]
(2) Philippine law [see III
Tolentino 117]
Alien Testator
Philippines (1) Philippine Law (Art. 17)
(2) Law of the country in
which he is a citizen or
subject (lex nationali) [Art.
817]
Foreign
Country
(Arts. 816,
17)
(1) Law of the place in which
he resides (lex domicilii)
(2) Law of his country (lex
nationali)
(3) Philippine law
(4) Law of the place where
they were executed (lex
loci celebrationis)
Note: Rule re: Joint Wills
(1) Joint wills prohibited under Art. 818 executed by
Filipinos in a foreign country shall not be valid in
the Philippines even though authorized by the
laws of the country where they were executed.
(Art. 819)
(2) Civil Code is silent as to the validity of a joint will

executed by an alien in the Philippines. It is

suggested that it should not be probated if it
would affect the heirs in the Philippines.
Intrinsic Validity
Intestate and testamentary successions shall be
regulated by the national law of the decedent, with
respect to the following (Art. 16(2); Art. 1039)
(1) Order of succession
(2) Amount of successional rights
(3) Intrinsic validity of the testamentary provisions
(4) Capacity to succeed
Interpretation of Wills
Governed by the National Law of the decedent.
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Revocation
Testator Applicable Law
Will is revoked in
the Philippines
Philippine
Domiciliary
Philippine Law
Non-domiciliary
[Art. 829]
Will is revoked in a
Foreign Country
Philippine
Domiciliary
(1) Philippine Law
(2) Law of the place of
revocation (lex loci
actus)
Non-domiciliary
[Art. 829]
(1) law of the place where
the will was made
(2) law of the place in
which the testator had
his domicile at the
time of the revocation
Probate of wills
Controlling Law:
The probate of a will being essentially procedural in
character, the law of the forum (lex fori) governs.
Wills Proved and Allowed in a Foreign Country
(1) A will proved and allowed in a foreign country in
accordance with the laws of that country may be
allowed, filed, and recorded in the proper
Regional Trial Court in the Philippines (RULES
OF COURT, Rule 77, Sec.1)
(2) Requisites for Reprobate [Vda de Perez v Tolete,
232 SCRA 722]
The following must be proved by competent
evidence:
(a) due execution of the will in accordance with the
foreign laws

(b) the testator had his domicile in the foreign

country and not in the Philippines
(c) the will has been admitted to probate in such
country
(d) the laws of the foreign country on procedure and
allowance of wills
Administration of Estates
Territorial: governed by the law of the place where
the administration takes place, and that is the law of
the country from which the administrator derives his
authority.
Trusts
Extrinsic validity: Rule governing wills apply intrinsic
validity: lex situs since a trust involves property cf Art.
17
Art. 17. The forms and solemnities of contracts, wills,
and other public instruments shall be governed by
the laws of the country in which they are executed.
When the acts referred to are executed before the
diplomatic or consular officials of the Republic of the
Philippines in a foreign country, the solemnities
established by Philippine laws shall be observed in
their execution.
Prohibitive laws concerning persons, their acts or
property, and those which have, for their object,
public order, public policy and good customs shall
not be rendered ineffective by laws or judgments
promulgated, or by determinations or conventions
agreed upon in a foreign country. (11a)
RULE ON EXTRINSIC VALIDITY OF CONTRACTS

General Rule: Lex Loci Celebrationis

The forms and solemnities of contracts xxx shall
be governed by the laws of the country in which
they are executed [Art. 17]
Note:
(1) Contracts Before Diplomatic/ Consular Officials:
The solemnities established by Philippine laws
shall be observed with respect to contracts
executed before diplomatic or consular officials of
the Republic of the Philippines in a foreign
country [Art. 17(2), FC]
(2) Contracts entered Into by Letter/ Cablegram, etc.:
A contract accepted by letter or cablegram is
presumed to have been entered into the place
where the offer was made. [Art. 1319(2)]
Three possible laws:
(1) Lex Loci Contractus (Asked in 95, 02 BAR
EXAMINATIONS)
(a) Law of the place where the contract is made
(b) Merits
(i) Relative ease in establishing
(ii) Certainty and stability
(c) Demerit - Unjust results when place of
making entirely incidental
Note: To determine where the contract is made, we

look to the place where the last act is done which is

necessary to bring the binding agreement into being
so far as the acts of the parties are concerned.
(2) Lex Loci Solutionis
(a) Law of the place of performance governs
(b) Merit - Always connected to the contract in a
significant way
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PAGE 6

(c) Demerit - Not helpful when the contract is

performed in 2 or more states with conflicting
laws
(3) Lex Loci Intentionis
(a) Law intended by the parties
(b) Basis:
The contracting parties may establish such
stipulations, clauses, terms and conditions as
they may deem convenient, provided they are
not contrary to law, morals, good customs,
public order, or public policy [Art. 1306]
(c) May be express or implied
(i) Express - when the parties stipulate that the
contract be governed by a specific law, such
law will be recognized unless there are
cogent reasons for not doing so.
(ii) Implied
(a) Based on the contemporaneous and
subsequent acts of the parties
(b) Often upheld with reference to the rule of
validity of contracts which presumes that
the parties contemplate to enter into a
valid contract
Art. 18. In matters which are governed by the Code of
Commerce and special laws, their deficiency shall be
supplied by the provisions of this Code.
SPECIAL CONFLICT OF LAW RULES
MARRIAGE

Definition:
Art. 1, FC. Marriage is a special contract of permanent
union between a man and a woman entered into in
accordance with law for the establishment of
conjugal and family life. It is the foundation of the
family and an inviolable social institution whose
nature, consequences, and incidents are governed by
law and not subject to stipulation, except that
marriage settlements may fix the property relations
during the marriage within the limits provided by this
Code.
Extrinsic Validity of Marriage
(1) Formal Requisites of Marriage under Philippine Law
[Art. 3, FC]
(a) Authority of the solemnizing officer
(b) Valid marriage license except in the cases
provided for in Chapter 2 of Title I
(c) A marriage ceremony which takes place with
the appearance of the contracting parties

before the solemnizing officer and their

personal declaration that they take each other
as husband and wife in the presence of not
less than two witnesses of legal age.
(2) Determination of Extrinsic Validity
Art. 26, FC. All marriages solemnized outside the
Philippines in accordance with the laws in force in
the country where they were solemnized, and valid
there as such, shall also be valid in this country. Xxx
Art. 2, Hague Convention. Formal requirements for
marriage are governed by the law of the state of
celebration.
General Rule: Lex Loci Celebrationis
Exceptions: The following marriages are void even if
valid in the country where celebrated [Art. 26, FC]:
(a) Those contracted by any party below 18 years of
age even with the consent of parents or guardians
[Art. 35(1), FC]
(b) Bigamous or polygamous marriages not falling
under Art. 41, FC [Art. 35 (4), FC]
(c) Those contracted thru mistake of one contracting
party as to the identity of the other [Art. 35(5), FC]
(d) Those subsequent marriage without recording in
the civil registry the judgment of annulment or
declaration of nullity, partition and distribution of
properties and the delivery of the childrens
presumptive legitimes [Art. 35(6), FC]
(e) A marriage contracted by any party who, at the
time of the celebration, was psychologically
incapacitated to comply with the essential marital
obligations of marriage, even if such incapacity
becomes manifest only after solemnization [Art.
36, FC]
(f) Incestuous marriages [Art. 37, FC]
(i) Marriages between ascendants and
ascendants of any degree, whether legitimate
or illegitimate; and
(ii) Marriages between brothers and sisters,
whether of the full or half-blood
(g) Void marriages for reasons of public policy (Art. 38,
FC)
(i) Marriages between collateral blood relatives,
whether legitimate or illegitimate, up to the
4th civil degree
(ii) Marriages between step-parents and stepchildren.
(iii) Marriages between the adopting parent and
adopted child
(iv) Marriages between the surviving spouse of the
adopting parent and the adopted child
(v) Marriages between the surviving spouse of the
adopted child and the adopter
(vi) Marriages between an adopted child and a
legitimate child of the adopter
(vii) Marriages between adopted children of the
same adopter
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PAGE 7

(viii) Marriages between parties where one, with

the intention to marry the other, killed that
other person's spouse, or his or her own
spouse.
Note: These exceptions put into issue the capacity of
the parties to enter into the marriage and therefore
relate to the substantive requirement for marriage
and is governed by lex nationalii.
Intrinsic Validity of Marriage
(refers to capacity of a person to marry)
(1) Intrinsic validity is determined by the parties
personal law, which may be their domiciliary or
national law.
Note:
(a) Laws relating to Family rights and duties,
Status, Condition or Legal capacity of persons
are binding on citizens of the Philippines, even
though living abroad [Art. 15]
(b) When either or both of the contracting parties
are citizens of a foreign country, it shall be
necessary for them before a marriage license
can be obtained to submit a certificate of legal
capacity to contract marriage, issued by their
respective diplomatic or consular officials [Art.
21, FC]
(c) Marriages enumerated under Art. 26(2), FC
are void even if valid in the country where
celebrated.
(2) Intrinsic requirements of marriage under
Philippine Law [Art. 2, FC]
(3) The Hague Convention on Validity of Marriages
allows a contracting state to refuse recognition of
the marriage in the ff. Cases (CR-M3):
(a) One of the parties did not freely Consent
(b) Spouses were Related, by blood or adoption
(c) One of the parties did not have the Mental
capacity to consent
(d) One of the spouses was already Married
(e) One of the parties has not attained the
Minimum age, nor acquired the necessary
dispensation
Note:
(1) Rule on Proxy Marriages:
(a) Proxy marriages, where permitted by the law
of the place where the proxy participates in
the marriage ceremony, are entitled to
recognition in countries adhering to the lex
loci celebrationis rule, at least insofar as
formal validity is concerned
(b) Internal Philippine law, however, does not
sanction proxy marriages.
(2) Consular Marriages
Marriages between Filipino citizens abroad may
be solemnized by a consul-general, consul or vice
consul of the Republic of the Philippines [Art. 10,

FC].
Effects of Marriage
(1) Personal relations between the spouses
(a) Governed by the national law of the parties
NOTE: If the spouses have different nationalities,
generally the national law of the husband may
prevail as long as it is not contrary to law, customs
and good morals of the forum.
(b) Under Philippine law, personal relations
between the spouses include [Arts. 68, 70-71,
FC]
(i) mutual fidelity
(ii) respect
(iii) cohabitation
(iv) support
(v) right of the wife to use the husbands
family name
(2) Property relations
(a) The Hague Convention declares that the
governing law on matrimonial property is:
(i) The internal law designated by the spouses
before the marriage
(ii) In the absence thereof, the internal law of
the state in which the spouses fix their
habitual residence
(b) Rule under Philippine law [Art. 80, FC]
(i) In the absence of a contrary stipulation in
the marriage settlements, the property
relations of the spouses shall be governed
by Philippine laws, regardless of the place
of the celebration of the marriage and their
residence.
(ii) Rule is inapplicable:
(1) If both spouses are aliens
(2) With respect to the extrinsic validity of
the contracts affecting property not
situated in the Philippines and executed
in the country where the property is
located
(3) With respect to the extrinsic validity of
contracts entered into in the Philippines
but affecting property situated in a
foreign country whose laws require
different formalities for its extrinsic
validity.
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(c) Doctrine of Immutability of Matrimonial

Property Regime:
The change of nationality on the part of the
husband or wife does not affect the original
property regime EXCEPT when the law of
the original nationality itself changes the
marital regime, hence, the property regime
has to change accordingly.
DIVORCE AND SEPARATION

Rule under the Hague Convention

The granting of divorce or separation must comply
with the national law of the spouses and lex fori (law
of the place where the application for divorce is
made).
Divorce Decrees Obtained by Filipinos
General Rule: Decrees of absolute divorce obtained
by Filipinos abroad have no validity and are not
recognized in Philippine Jurisdiction.
Note: Statutory Bases
(a) Laws relating to Family rights and duties, or to
the Status, Condition and Legal capacity of
persons are binding upon citizens of the
Philippines, even though living abroad [Art. 15,
CC]
(b) Prohibitive laws concerning persons, their acts
or property, and those which have for their
object public order, public policy and good
customs, shall not be rendered ineffective by
laws or judgments, or by determinations or
conventions agreed upon in a foreign country.
[Art. 17(3), CC]
Exception: Art. 26(2), FC
Where a marriage between a Filipino citizen and a
foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien
spouse capacitating him or her to remarry, the
Filipino spouse shall have capacity to remarry under
Philippine law
Van Dorn v. Romillo, Jr. (1985): Owing to the
Nationality Principle, only Philippine nationals are
covered by the policy against absolute divorces, the
same being considered contrary to our concept of
public policy and morality. However, aliens may
obtain divorces abroad, provided they are valid
according to their national law.
Llorente v. Court of Appeals (2000): Divorce obtained
by Petitioner from his first wife, after he was admitted
to US citizenship, is valid and recognized in our
jurisdiction as a matter of comity.
Republic v. Orbecido (2005): Paragraph 2 of Article 26
should be interpreted to include cases involving parties
who, at the time of the celebration of the marriage
were Filipino citizens, but later on, one of them
becomes naturalized as a foreign citizen and obtains a
divorce decree. The Filipino spouse should likewise be
allowed to remarry as if the other party were a
foreigner at the time of the solemnization of the
marriage. The reckoning point is not the citizenship of
the parties at the time of the celebration of the
marriage, but their citizenship at the time a valid divorce
is obtained abroad by the alien spouse capacitating the
latter to remarry.
Validity of Foreign Divorce Between Foreigners
(1) A foreign divorce will be recognized in all

contracting states if, at the date of the institution

of the proceedings (Hague Convention on the
Recognition of Divorce and Legal Separation):
(a) either spouse had his habitual residence
there;
(b) both spouses were nationals of that state; or
(c) if only the petitioner was a national, he should
have his habitual residence there
(2) While there is no provision of law requiring
Philippine courts to recognize a foreign divorce
decree between non-Filipinos such will be
recognized under the principle of international
comity, provided that it does not violate a
strongly held policy of the Philippines.
ANNULMENT AND DECLARATION OF NULLITY

Jurisdiction to Annul
(1) Vested in the court of the domicile of the parties
(2) Jurisdiction over the non-resident defendant is
not essential
Governing Law
(1) Lex loci celebrationis determines the
consequences of any defect as to form
(2) In general, the same applies with reference to
substantive or intrinsic validity. But with regard to
capacity of the parties to marry, national law is
determinative.

Human Relations

ABUSE OF RIGHT
Art. 19. Every person must, in the exercise of his
rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty
and good faith.
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ACTS CONTRARY TO LAW

Art. 20. Every person who, contrary to law, wilfully or
negligently causes damage to another, shall indemnify
the latter for the same.
ACTS CONTRA BONUS MORES
Art. 21. Any person who wilfully causes loss or injury to
another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter
for the damage.
Breach of promise to marry is not an actionable
wrong. [De Jesus vs. Syquia, 58 Phil., 866]
BUT damages may be recoverable
Wassmer v. Velez (1964): Mere breach of promise to
marry is not an actionable wrong. But to formally set
a wedding and go through all the above-described
preparation and publicity, only to walk out of it when
the matrimony is about to be solemnized, is quite
different. This is palpably and unjustifiably contrary
to good customs for which defendant must be held
answerable in damages in accordance with Article 21
aforesaid.

Baksh vs. Court of Appeals (1993): Article 21 may also

be applied in a breach of promise to marry where the
woman is a victim of moral seduction. Award of
damages pursuant to Article 21 is justified not
because of such promise to marry but because of the
fraud and deceit behind it and the willful injury to her
honor and reputation which followed thereafter.
Tanjanco v. Court of Appeals (1966): The conduct of a
woman of adult age, maintaining intimate sexual
relations with appellant, with repeated acts of
intercourse is incompatible with the idea of
seduction.
PRINCIPLE OF UNJUST ENRICHMENT
Art. 22. Every person who through an act of
performance by another, or any other means,
acquires or comes into possession of something at
the expense of the latter without just or legal
ground, shall return the same to him.
Art. 22
(Accion in Rem Verso)
Art. 2154
(Solutio Indebiti)
Not necessarily a
mistake in payment
Payment should be
made by mistake

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Persons and Personality

CAPACITY TO ACT
CIVIL PERSONALITY

Art. 37. Juridical capacity, which is the fitness to be

the subject of legal relations, is inherent in every
natural person and is lost only through death.
Capacity to act, which is the power to do acts with
legal effect, is acquired and may be lost.
Juridical Capacity
Capacity to Act
Fitness of man to be the
subject of legal relations
Power to do acts with
legal effect
Passive Active
Aptitude for the Holding
and Enjoyment of rights
Aptitude for the Exercise
of rights
Inherent in every natural
person
Must be acquired
Lost upon death Lost through death and
other causes
Can exist without
capacity to act
Must exist with juridical

capacity
Cannot be limited or
restricted
May be restricted or
limited
Note: Juridical capacity can exist even without
capacity to act; the existence of the latter implies
that of the former.
RESTRICTIONS ON CAPACITY TO ACT

Art. 38. Minority, insanity or imbecility, the state of

being a deaf-mute, prodigality and civil interdiction
are mere restrictions on capacity to act, and do not
exempt the incapacitated person from certain
obligations, as when the latter arise from his acts or
from property relations, such as easements.
Art. 39. The following circumstances, among others,
modify or limit capacity to act: age, insanity,
imbecility, the state of being a deaf-mute, penalty,
prodigality, family relations, alienage, absence,
insolvency and trusteeship. The consequences of
these circumstances are governed in this Code, other
codes, the Rules of Court, and in special laws.
Capacity to act is not limited on account of religious
belief or political opinion.
A married woman, twenty-one years of age or over, is
qualified for all acts of civil life, except in cases
specified by law.
General rule: Incapacitated persons are not exempt
from certain obligations arising from his acts or
property relations.
Minority
RA 6809 (1989): An act lowering the age of majority
from twenty-one to eighteen years.
Effects on Contracts
(1) They cannot give consent to a contract [Art. 1327
(1)]
(2) A contract where one of the parties is a minor is
voidable [Art. 1390(1)]
(3) A contract is unenforceable when both of the
parties are minors (incapable of giving consent)
[Art. 1403(3)]
(4) Minority cannot be asserted by the other party in
an action for annulment [Art. 1397]
(5) Not obliged to make restitution except insofar as
he has been benefited [Art. 1399]
(6) Minor has no right to demand the thing/price
voluntarily returned by him [Art. 1426]
(7) Minor has no right to recover voluntarily paid sum
or delivered thing, if consumed in good faith [Art.
1427]
(8) Must pay reasonable amount for necessaries
delivered to him [Art. 1489]
Mercado v. Espiritu, (1918):
Estoppel works against minors who misrepresent their
ages in a contract and are compelled to comply with

its terms. (active misrepresentation done by minors).

Bambalan v. Maramba, (1928):
When a minor made no active misrepresentation as to
his minority and such minority is known to the other
party, the contract is voidable (Art. 1403) as to the
minor.
Braganza v. Villa Abrille, (1959):
Minors are obliged to make restitution insofar as they
have been benefited (Art. 1399).
Effects on Marriage
(1) May not yet contract marriage [Art. 5, FC].
(2) Marriages, where one of the parties is below 18,
even with the consent of parents/guardians, are
VOID [Art. 35, FC]
Insanity
Insanity includes many forms of mental disease,
either inherited or acquired. A person may not be
insane but only mentally deficient (idiocy, imbecility,
feeble-mindedness).
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Effect on Contracts
(1) Incapacity to give consent to a contract [Art.
1327(2)]
(2) Contracts entered into during lucid intervals are
valid [Art. 1328]
(3) Restitution of benefits [Art. 1399]
(4) Voidable if one of the parties is insane [Art. 1390]
(5) Unenforceable if both of the parties are insane
(Art. 1403 (3))
Effect on Crimes
(1) General rule: EXEMPTED from criminal liability
(2) Exception: Acted during lucid interval
Effect on Marriage
(1) May be annulled if either party was of unsound
mind unless the such party after coming to
reason, freely cohabited with the other [Art. 45(2),
FC]
(2) Action for annulment of marriage must be filed by
the sane spouse who had no knowledge of the
others insanity, or by any relative/guardian of the
insane before the death of either party; or by the
insane spouse during a lucid interval or after
regaining sanity [Art. 47(2), FC]
State of Being Deaf-Mute
(1) Cannot give consent to a contract if he/she also
does not know how to write (Art. 1327(2), CC)
(2) Can make a valid WILL, provided: he must
personally read the will. The contents of the same
have either been read personally by him or
otherwise communicated to him by 2 persons
(Art. 807, CC)
(3) Cannot be a witness to the execution of a will (Art.
820, CC)
(4) Voidable if one of the parties is deaf-mute and
does not know how to write

(5) Unenforceable if both of the parties are deafmutes

and does not know how to write
Prodigality
Martinez v. Martinez, (1902):
A spendthrift or a prodigal is a person, who, by
excessive drinking, gambling, idleness or debauchery
of any kind shall so spend, waste or lessen his estate as
to expose himself or his family to want or suffering.
The acts of prodigality must show a morbid state of
mind.
Note: It is not the circumstance of prodigality, but the
fact of being under guardianship that restricts
capacity to act.
Civil interdiction
(1) It is an accessory penalty imposed upon persons
who are sentenced to a principal penalty not
lower than reclusion temporal (Art. 41, RPC).
(2) Offender is deprived of rights of parental
authority, or guardianship, of marital authority, of
the right to manage his property and of the right
to dispose of such (Art. 34, RPC)
(3) For the validity of marriage settlements, the
participation of the guardian shall be
indispensable (Art. 123)
Family relations
(1) Justifying circumstance if acted in defense of
person/rights of spouse, ascendants,
descendants, brothers/sisters, and other relatives
up to the 4th civil degree [Art. 11(2), RPC]
(2) Mitigating circumstance if acted in the immediate
vindication of a grave offense/felony committed
against his spouse, ascendants or relatives of the
same civil degree [Art. 13(5), RPC]
(3) Incestuous and void marriages:
(a) Between ascendants and descendants of any
degree;
(b) Between brothers and sisters, whether full or
half-blood. [Art. 37, FC]
(4) Donations/grants of gratuitous advantage
between spouses during the marriage shall be
VOID, except moderate gifts during family
occasions [Art. 87, FC]
(5) Descendants cannot be compelled to testify in a
criminal case, against his parents and
grandparents
(a) UNLESS: crime was against the descendant
OR by one parent against the other [Art. 215,
FC]
(6) Spouses cannot sell property to each other, except:
(a) Absolute separation is agreed upon in the
marriage settlements
(b) Judicial separation of property [Art. 1490]
Absence
Art. 390. After an absence of seven years, it being
unknown whether or not the absentee still lives, he

shall be presumed dead for all purposes, except for

those of succession.
The absentee shall not be presumed dead for the
purpose of opening his succession till after an absence
of ten years. If he disappeared after the age of
seventy-five years, an absence of five years shall be
sufficient in order that his succession may be
opened. (n)

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Art. 391. The following shall be presumed dead for all

purposes, including the division of the estate among
the heirs:
1. A person on board a vessel lost during a sea voyage,
or an aeroplane which is missing, who has not been
heard of for four years since the loss of the vessel or
aeroplane;
2. A person in the armed forces who has taken part in
war, and has been missing for four years;
3. A person who has been in danger of death under
other circumstances and his existence has not been
known for four years.
Article 124, FC:
(1) Administration and enjoyment of the CPG shall
belong to both spouses jointly.
(2) In case of disagreement, husbands decision shall
prevail, subject to recourse to the court by the
wife for proper remedy (within 5 years from date
of contract implementing such decision)
(3) If one spouse is incapacitated/unable to
administer, sole powers of administration may be
assumed by the other spouse.
(4) General Rule: This power does not include
disposition/encumbrance.
Exception: Judicial authority or written consent of
other spouse.
Birth
General Rule: Birth determines personality [Art. 40].
Death extinguishes civil personality [Art. 42].
Exception: A conceived child shall be considered
born for all purposes that are FAVORABLE to it,
provided it be born later [Art. 40, 2nd clause] with
the following circumstances:
Intra-Uterine Life
When Considered Born
7 months or more Alive upon delivery
Less than 7 months Alive only after
completion of 24 hours
from delivery
Birth = complete removal of the fetus from the
mothers womb; before birth, a fetus is merely part of
the mothers internal organs.
Personality of Conceived Child
(1) Limited = only for purposes FAVORABLE to it.
(2) Conditional = it depends upon the child being
born alive later.

Period of Conception = the first 120 days of the 300

days preceding the birth of the child.
A conceived child can acquire rights while still in the
mothers womb. It can inherit by will or by intestacy.
Geluz v CA, (1961):
An aborted fetus had conditional personality but never
acquired legal rights/civil personality because it was
not alive at the time of delivery from the mothers
womb. No damages can be claimed in behalf of the
unborn child.
Complete respiration = test/sign of independent life
Death
Art. 42. Civil personality is extinguished by death.
The effect of death upon the rights and obligations
of the deceased is determined by law, by contract
and by will
Criminal liability ends with death BUT civil liability
may be charged against the estate [People v. Tirol,
(1981)].
Art. 43. If there is a doubt, as between two or more
persons who are called to succeed each other, as to
which of them died first, whoever alleges the death
of one prior to the other, shall prove the same; in the
absence of proof, it is presumed that they died at the
same time and there shall be no transmission of
rights from one to the other.
Note: Article 43 provides a statutory presumption
when there is doubt on the order of death between
persons who are called to succeed each other (only).
The statutory presumption of Article 43 was not
applied due to the presence of a credible eyewitness
as to who died first [Joaquin v. Navarro, (1948)]
Compare Art. 43 with Rule 131, Sec. 3 (jj), presumption
of Survivorship.
Art. 43
Rule 131, Sec. 3 (jj)
Only use the presumptions when there are no facts
to get inferences from
Only use for succession
purposes
Cannot be used for
succession purposes
In any circumstance Only during death in
calamities, wreck, battle
or conflagration
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Presumption of Survivorship in the Rules of Court

(Rule 131, sec. 3, (jj.)
Age
Presumed Survivor
Both under 15 Older
Both above 60 Younger
One under 15, the other
above 60
One under 15

Both over 15 and under

60; different sexes
Male
Both over 15 and under
60; same sex
Older
One under 15 or over
60, the other between
those ages
One between 15 and 60
DOMICILE AND RESIDENCE OF PERSON
FOR NATURAL PERSONS:
The place of their habitual residence [Art. 50]
FOR JURIDICAL PERSONS:
The place where their legal representation is
established, or where they exercise their primary
functions, unless there is a law or other provision that
fixes the domicile [Art. 51]
DOMICILE VS. RESIDENCE
While domicile is permanent (there is intent to
remain), residence is temporary and may be changed
anytime (there is no necessary intent to remain).
REQUISITES OF DOMICILE [Callejo v. Vera]
(1) Physical Presence in a fixed place
(2) Intent to remain permanently (animus manendi)
KINDS OF DOMICILE

(1) Domicile of Origin - domicile of parents of a

person at the time he was born.
(2) Domicile of Choice
(a) Domicile chosen by a person, changing his
domicile of origin.
(b) A 3rd requisite is necessary intention not to
return to ones domicile as his permanent
place.
(3) Domicile by Operation of Law (i.e., Article 69,
domicile of minor)
(a) A married woman does not lose her domicile
to her husband. (Romualdez-Marcos vs.
Comelec (1995))

Family Code

The Family Code took effect on August 3, 1988.

Marriage
REQUISITES

NATURE OF MARRIAGE, ART.

1
Art. 1, FC. Marriage is a special contract of permanent
union between a man and a woman entered into in
accordance with law for the establishment of
conjugal and family life. It is the foundation of the
family and an inviolable social institution whose
nature, consequences, and incidents are governed by
law and not subject to stipulation, except that
marriage settlements may fix the property relations
during the marriage within the limits provided by this
Code.

KINDS OF REQUISITES

(1) Essential Requisites (Art. 2)

(a) Legal Capacity of the contracting parties, who
must be a male and a female
(b) Consent (of the parties) freely given in the
presence of a solemnizing officer.
(2) Formal Requisites (Art. 3)
(a) Authority of solemnizing officer
(b) A valid marriage license
(c) Except: Marriages in articulo mortis or when
one or both parties are at the point of death
(d) Marriage Ceremony:
(i) Appearance of contracting parties in the
presence of a solemnizing officer
(ii) Personal declaration that they take each
other as husband and wife in the presence of
not less than 2 witnesses
EFFECT OF ABSENCE OF REQUISITES

Absence
Defect or Irregularity
Effect
Void Voidable
ESSENTIAL REQUISITES

Age
Legal Capacity [Art. 5]
Male or female 18 years old and above, not under any
impediments mentioned in Art. 37 (incestuous
marriage) & Art. 38 (marriage against public policy),
may contract marriage.
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Must be male and female

Jones v Hallahan, (1973): Application for marriage
license was denied since marriage is defined by law as
a contract entered into between a man and a woman.
Goodridge v. Dept. of Public Health, (2003): Same-sex
couples should not be denied the same benefits as
heterosexual couples; the right to marry includes the
right to choose who to marry.
Silverio v Republic, (2007): Changing of gender in ones
birth certificate was denied; otherwise, it would result
in confusion and would allow marriage between
persons of the same sex which is in defiance of the law,
as marriage is a union between a man and a woman.
Note: The best source for citing the requirement (of
male/female) is still statutory, as provided explicitly
in the Family Code.
Consent freely given
People v. Santiago, (1927): A marriage entered into by a
person whose real intent is to avoid prosecution for
rape is void for total lack of consent. The accused did
not intend to be married. He merely used such
marriage to escape criminal liability.
Eigenmann v. Guerra (1964): There was no reasonable
and well-grounded fear of an imminent and grave evil
upon him or his property, father-in-laws words were
merely an admonition typical of concerned parents.

Ceremony
Marriage Ceremony
No prescribed form or religious rite for the
solemnization of marriage is required. (Art. 6)
The couple's written agreement where they declare
themselves as husband and wife, signed by them
before a judge and two capable witnesses, even
though it was independently made by them, still
counts as a valid ceremony. [Martinez v Tan, (1909)]
Minimum requirements prescribed by law: (AP-PMS)
(1) Appearance of contracting parties personally
before the solemnizing officer [Art. 3]
(2) Personal declaration that they take each other as
husband and wife. [Art. 3]
(3) Presence of at least two witnesses of legal age.
[Art. 3]
(4) The declaration shall be contained in the
Marriage certificate. [Art. 6]
(5) Marriage certificate shall be Signed by the
contracting parties and their witnesses and
attested by the solemnizing officer. [Art. 6]
Note: In a marriage in articulo mortis, when one or
both parties are unable to sign the marriage
certificate, it shall be sufficient for one of the
witnesses to write the name of said party, which shall
be attested by the solemnizing officer. (Art. 6, par. 2)
Places where marriage SHALL be publicly solemnized:
(CCO)
(1) Chambers of the judge or in open court
(2) Church, chapel, or temple
(3) Office of the consul-general, consul, or viceconsul
[Art. 8]
Exceptions:
(1) Marriages performed in articulo mortis or in
remote places. [Art. 29]
(2) Where both parties request in writing that
marriage be solemnized at a place designated by
them.
Non-compliance with this requirement does not
invalidate the marriage (premise: more witnesses =
more people can notify officer of impediments to
marriage).
Who may solemnize marriages
Who may solemnize marriage: (JC-SPAMM)
(1) Incumbent member of the Judiciary within his
jurisdiction. [Art. 7]
(2) Priest, Rabbi, Imam or Minister of any Church or
Religious Sect. Must be:
(a) Duly authorized by his church or religious sect
(b) Registered with the civil registrar general
(c) Acting within the limits of the written
authority granted to him by his church or
religious sect.
(d) At least one of the contracting parties belongs
to the solemnizing officers church or religious

sect. [Art. 7]
(3) Ship Captain or Airplane Chief may solemnize a
marriage in articulo mortis between passengers
or crew members [Art. 7, 31]
(4) A Military commander of a unit may solemnize
marriages in articulo mortis between persons
within the zone of military operation. (Art. 7, 32)
(5) Consul-general, consul or vice-consul may
solemnize marriages between Filipino citizens
abroad. (Art. 7, 10)
(6) Municipal and City Mayors (LGC sec. 444 and
455)
Exceptions Art. 35
(1) Marriage is void when solemnized by any person
not legally authorized to perform marriages
unless either or both parties believed in good faith
that the solemnizing officer had legal authority to
do so. [Art. 35 (2)]

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(2) Absence & Irregularity of Authority of a

solemnizing officer
Lack of valid notification of both parties desiring a
ceremony in a remote place was held to be only a
mere IRREGULARITY [Navarro vs. Domagtoy (1996)]
Respondent judge was faulted for solemnizing a
marriage outside his territorial jurisdiction. Also,
presentation of the marriage license subsequent to
the solemnization of marriage will not cure the
defect. [Araes v. Occiano (2002)]
License required
General Rule: License required
Article 9 - Issued by local registrar of city or
municipality where either contracting party
habitually resides
Article 11 - Each contracting party should file
separately.
Article 20 - License valid in any part of the
Philippines for 120 days from date of issue,
automatically cancelled at the expiration of such
period.
Foreign National
When either or both parties are foreign nationals:
Certificate of legal capacity to contract marriage,
issued by a diplomatic or consular official, shall be
submitted before a marriage license can be obtained
[Art. 21]
Stateless persons or refugees from other countries:
affidavit stating circumstances showing capacity to
contract marriage, instead of cert. of legal capacity
[Art. 21]
Exceptions
(1) Marriage in articulo mortis [Art. 27]
(a) The marriage may be solemnized without the
necessity of a marriage license.
(b) It remains valid even if ailing party survives.

(2) Between passengers or crew members in a ship

or airplane [Art. 31]
(3) Persons within a military zone [Art. 32]
(4) Marriage in Remote and inaccessible places [Art.
28]
(5) Marriages by Muslims and Ethnic cultural
minorities provided they are solemnized in
accordance with their customs, rites or practices.
[Art. 33]
(6) Marriage by parties who have Cohabited for at
least 5 years without any legal impediment to
marry each other. [Art. 34, Ninal vs. Badayog
(2000)]
Requisites for the 5-year cohabitation to be valid for the
exemption from acquiring a marriage license
(1) The man and woman must have been living
together as husband and wife for at least five
years before the marriage;
(2) The parties must have no legal impediment to
marry each other;
(3) The fact of absence of legal impediment between
the parties must be present at the time of
marriage;
(4) The parties must execute an affidavit stating that
they have lived together for at least five years
[and are without legal impediment to marry each
other]; and
(5) The solemnizing officer must execute a sworn
statement that he had ascertained the
qualifications of the parties and that he had
found no legal impediment to their marriage.
[Borja-Manzano vs. Judge Sanchez (2001)]
Marriage certificate
Absence and irregularity of marriage license and
contract
Republic v. CA and Castro (1994): Issuance of the Civil
Registrar of a Certificate of Due Search and Inability to
Find the application of a marriage license certifies the
licenses inexistence, thus rendering the marriage
VOID.
Moreno v. Bernabe (1995): Before a marriage can be
solemnized, a valid marriage license must be
presented first, otherwise, the marriage is VOID.
People v. Borromeo (1984): Non-existence of a
marriage contract does not invalidate the marriage as
long as all the requisites for its validity are properly
complied with.
Things to do at the local civil registrar:
(1) File an application of marriage license at the
proper local civil registrar. [Art. 11]
(2) Present birth or baptismal certificate for proof of
age. [Art. 12]
(3) If aged 18-21 years, present parental consent.
[Art. 14]
(4) If aged 21-25, present parental advice. [Art. 15]

(5) If aged 18-25, present certificate of marriage

counseling from your priest. [Art. 16]
(6) (PD 965) Attend family planning seminar or get a
brochure regarding family planning
(7) Pay the required fees. [Art 19]
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(8) If foreigner, present certificate of legal capacity

issued by diplomat or consular officials. (Art. 21)
Marriage Certificate
Where parties declare that they take each other as
husband and wife; contains the ff:
(1) Full name, sex, age of party
(2) Citizenship, religion, habitual residence
(3) Date and precise time of celebration of
marriage
(4) That marriage license was properly issued
(except in marriages exempt from ML reqt)
(5) That parental consent was secured, when
required
(6) That requirement as to parental advice was
complied with, when required
(7) That parties have entered into marriage
settlements, if any [Art. 22]
Note: Not an essential or formal requisite without
which the marriage will be void [Madridejo v. de Leon
(1930)]
Best evidence that a marriage does exist. [Tenebro v.
CA (2004)]
EFFECT OF MARRIAGES CELEBRATED ABROAD
AND FOREIGN DIVORCE
MARRIAGES CELEBRATED ABROAD

General Rule: Marriages solemnized abroad in

accordance with the laws in force in that country
shall be valid in the Philippines. [Art 26]
Exceptions:
(1) Marriage between persons below 18 years old
[Art. 35(1)]
(2) Bigamous or polygamous marriage [Art. 35(4)]
(3) Mistake in identity [Art. 35 (5)]
(4) Marriages void under Article 53 [Art. 35 (6)]
(5) Psychological incapacity [Art. 36]
(6) Incestuous marriages [Art. 37]
(7) Marriage void for reasons of public policy [Art. 38]
Essential requisites
Formal requisites
Inherent in the parties,
carried everywhere
Requirements
independent of the
parties
Lex Nationalii Laws
relating to family rights
and duties, or to the
status, condition, and
legal capacity of persons

are binding upon Phil

citizens even though living
Lex loci celebrationis- if
valid where celebrated,
then valid everywhere;
forms of contracting
marriage are to be
regulated by the law
where it is celebrated.
Essential requisites
Formal requisites
abroad (Art 15, CC) (Art. 26, CC)
Foreign marriages void
under Phil law due to lack
of an essential requisite,
even if valid under foreign
laws, will not be
recognized
Foreign marriages may
be void under Phil law
due to absence of a
formal requisite under
foreign laws.
PROOF OF FOREIGN MARRIAGE in order that it may be
upheld:
(1) Provisions of the foreign law
(2) Celebration of the marriage in accordance with
said provisions
FOREIGN DIVORCES

(1) Those obtained by Filipino citizens are void under

Philippine law.
(2) If the foreign spouse obtains a valid foreign
divorce, the Filipino spouse shall have capacity to
remarry under Philippine law. (Art. 26)
Van Dorn v. Romillo (1985):
A divorce obtained by the foreign spouse in
accordance with the said spouses national law is
recognized in the Philippines and releases Filipino
spouse from their marriage.
Quita v. Dandan (1998):
The citizenship of the spouses at the time of the
divorce determines their capacity to obtain a valid
divorce. Since the divorce and the naturalization of W
occurred within the same year, the case was remanded
to determine which occurred first.
Llorente v. CA (2000):
Citizenship at the time the divorce is obtained
determines its validity. Since H was no longer a
Filipino citizen when he divorced W, the nationality
principle did not apply to him anymore and the divorce
is valid.
Garcia v. Recio (2001):
A divorce decree obtained by the foreign spouse is
recognized under Phil law if it is executed in
accordance with the foreigners national law. The

party must prove divorce as a fact and that said

divorce is obtained in conformity with the law allowing
it, before the Philippine courts can take judicial notice.
VOID AND VOIDABLE MARRIAGES
PRESUMPTION OF MARRIAGE

(1) Presumption in favor of a valid marriage [Art 220,

CC]
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(2) The presumption that a man and a woman

deporting themselves as husband and wife have
entered into a lawful contract of marriage is
satisfactory if uncontradicted. [Sec. 3 (aa), Rule
131, ROC]
(3) In marriages of exceptional character, the
existence of the marriage is presumed, even in
the TOTAL ABSENCE of a marriage license. [Vda.
De Jacob v CA (1999)]
(4) If a marriage certificate is missing, and all means
HAVE NOT YET BEEN EXHAUSTED to find it,
then the marriage is presumed to exist [Sevilla v
Cardenas (2006)]
Absence of a marriage certificate is not proof of
absence of marriage. To prove the fact of marriage,
the following would constitute competent evidence:
(1) the testimony of witnesses to matrimony; (2) the
couples public cohabitation; and (3) birth and
baptismal certificates of children born during the
union. [Trinidad v CA (1998)]
VOID MARRIAGES

Type of Void Marriages

(1) Absence of any formal/essential requisites
(2) Psychologically Incapacitated spouse
(3) Incestuous Marriages
(4) Marriages contrary to public policy
(5) Void subsequent marriages
Absence of Requisites
Art. 4(1): The absence of any essential or formal
requisites shall render the marriage void ab initio,
except as stated in Article 35 (a).
Art. 5: Any male or female of the age of eighteen years
or upwards not under any of the impediments
mentioned in Articles 37 and 38, may contract
marriage.
Void from the Beginning [Art. 35].
(1) Marriage where any party is below eighteen years
of age even with the consent of parents or
guardians
(2) Marriage solemnized by any person not legally
authorized to perform marriages unless such
marriages were contracted with either or both
parties believing in good faith that the
solemnizing officer had the legal authority to do
so.
Note: Ones belief in good faith that the
solemnizing officer has the required authority is a

mistake of fact, and not of law.

(3) Marriage solemnized without a valid marriage
license, except in marriages under exceptional
circumstances
(4) Bigamous or polygamous marriages not falling
under Article 41 (Art. 41: subsequent marriage by
present spouse who obtained a declaration of
presumptive death for absent spouse prior to the
subsequent marriage)
(5) There is a mistake as to the identity of the other
contracting party
(6) Subsequent marriages that are void under Article
53 (Non-compliance with Art. 52)
Psychological incapacity
Contracted by any party who, at the time of the
celebration, was psychologically incapacitated to
comply with the essential marital obligations of
marriage, even if such incapacity becomes manifest
only after its solemnization [Art. 36]
Republic v. Molina, (1997):
(1) The burden of proof to show the nullity of the
marriage belongs to the plaintiff.
(2) The root cause of the psychological incapacity must
be: (a) medically or clinically identified, (b) alleged in
the complaint, (c) sufficiently proven by the experts,
(d) clearly explained in the decision.
(3) The incapacity must be proven to be existing at
the time of the celebration of the marriage.
(4) Such incapacity must also be shown to be
medically or clinically permanent or incurable.
(5) Such illness must be grave enough to bring about
the disability of the party to assume the essential
obligations of marriage.
(6) The essential marital obligations must be those
embraced by Articles 68 up to 71 of the Family Code
as regards the husband and wife as well as Articles
220, 221, and 225 of the same Code in regard to
parents and their children.
(7) Interpretations given by the National Appellate
Matrimonial Tribunal of the Catholic Church in the
Philippines, while not controlling/decisive, should
be given great respect by our courts.
(8) The trial court must order the prosecuting attorney
or fiscal and the Solicitor General to appear as
counsel for the state. No decision shall be handed
down unless the Solicitor General issues a
certification.
Santos v. Bedia-Santos, (1995):
Laid down 3 characteristics for determining
psychological incapacity: gravity, antecedent, and
incurability.
Tsoi v. CA, (1997):
Refusal of husband to have sex was interpreted to be
PI. A man who can but wont is PI

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Marcos vs. Marcos (2000):

Psychological incapacity maybe established by the
totality of the evidence presented. Personal medical
examination could be dispensed with.
Republic vs. San Jose (2007):
There is no requirement that the respondent be
medically examined first.
Antonio v. Reyes, (2006):
Pathological liar considered as psychological
incapacity, Molina guidelines met.
Incestuous marriages
Article 37 (Incestuous):
(1) Between ascendants and descendants of any
degree, legitimate or illegitimate
(2) Between brothers and sisters, whether of the full
or half blood, legitimate or illegitimate
Against Public Policy
Article 38 (Against Public Policy):
(1) Between collateral blood relatives, legitimate or
illegitimate, up to the fourth civil degree.
(2) Between step-parents and step-children.
Note: Stepbrothers and stepsisters can marry
because marriages between them are not
among those enumerated in Article 38.
(3) Between parents-in-law and children-in-law.
(4) Between adopting parent and adopted child.
(5) Between the surviving spouse of the adopting
parent and the adopted child.
(6) Between the surviving spouse of the adopted
child and the adopter.
(7) Between an adopted child and a legitimate child
of the adopter.
(8) Between adopted children of the same adopter.
(9) Between parties where one, with the intention to
marry the other, killed that other person's
spouse, or his or her own spouse.
Relationships outside of Art. 37 and 38 which are not
impediments to marriage: brother-in-law with sisterinlaw, stepbrother with stepsister, guardian with
ward, adopted with illegitimate child of the adopter,
adopted son of the husband with adopted daughter
of the wife, parties who have been convicted of
adultery
Void subsequent marriages
Article 40 (No Judicial Declaration of Nullity)
A person entered into a subsequent marriage
without first getting a judicial declaration of nullity of
the first void marriage
Article 41 (Presumptive Death)
Failure of the present spouse to obtain a judicial
declaration of presumptive death before entering a
subsequent marriage
Article 44 (Bad Faith of both spouses)
Both spouses entering a subsequent marriage after
presumptive death, who acted in bad faith

Article 53 (Non-Recording):
Subsequent marriage of spouses, where the
requirements of recording under Art. 52 have not
have been complied with, shall be null and void.
Art. 52. The judgment of annulment or of absolute
nullity of the marriage, the partition and distribution of
the properties of the spouses and the delivery of the
children's presumptive legitimes shall be recorded in
the appropriate civil registry and registries of property;
otherwise, the same shall not affect third persons.
Previous marriage declared void ab initio or annulled
Art. 40. The absolute nullity of a previous marriage
may be invoked for purposes of remarriage on the
basis solely of a final judgment declaring such previous
marriage void.
In order to have a subsequent marriage:
(1) The previous marriage should be judicially
declared void or annulled (final judgment) (Terre
v. Terre (1992), Atienza v. Brillantes (1995))
(2) Must comply with the requirements of Art. 52
Under the Civil Code (superseded by the Family
Code), there was no need for a judicial declaration of
nullity of a previous marriage for a subsequent
marriage to be valid [People v. Mendoza (1954)]
Terre v. Terre, (1998):
A lawyer was disbarred for grossly immoral conduct by
convincing the other party that a judicial declaration of
nullity was not required and subsequently contracting
another marriage while his first marriage was
subsisting.
If there is no Judicial Declaration of Nullity, subsequent
marriage void for being bigamous.
Atienza v. Brillantes, (1995):
Even if the judges first marriage contracted in 1965
was void for not having a marriage license, the
requirement for a judicial declaration of nullity in Art.
40 still applies for his subsequent marriage contracted
in 1991.

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Apiag v. Cantero, (1997):

Where both marriages were contracted prior to the
effectivity of the FC, the requirement of Art. 40 does
not apply to the second marriage where a right is
already vested and which the FC cannot have
retroactive effect.
Domingo v. CA, (1993):
The judicial declaration of nullity can be invoked for
purposes other than remarriage. Article 40 was
interpreted as being a requirement for purposes of
remarriage but not limited for that purpose.
Separation of property is also a valid purpose for
filing for a judicial declaration of nullity.
The word solely in Art. 40 referred to validating
subsequent marriages but NOT to limiting the
purposes for which a judicial declaration of nullity

can be invoked.
Borja-Manzano v. Sanchez, (2001):
Legal separation does not severe marital bonds.
Cohabitation under Art. 34 merely exempts the
spouses from obtaining a marriage license, and is
not met when there exists legal impediment to marry
during the period of cohabitation.
Subsequent Marriage when one spouse is absent
Requirements for Subsequent Marriage to be Valid
When Prior Spouse is Absent [Art. 41]:
(1) Subsequent marriage due to ordinary absence
where:
(a) Absent spouse had been absent for 4
consecutive years;
(b) The spouse present had a well-founded belief
that absent spouse is dead; and
(c) Judicial declaration of presumptive death was
secured (no prejudice to the effect of the
reappearance of the absent spouse).
(2) Subsequent marriage due to extraordinary
absence where:
(a) Absent spouse had been missing for 2
consecutive years;
(b) There is danger of death under the
circumstances set forth in the provisions of
Art. 391 CC attendant to the disappearance;
(c) The spouse present had a well-founded belief
that the missing person is dead; and
(d) Judicial declaration of presumptive death was
secured (no prejudice to the effect of the
reappearance of the absent spouse).
Extraordinary circumstances [Art. 391, CC]:
(a) ON BOARD VESSEL lost at sea voyage, airplane,
(b) ARMED FORCES in war, or
(c) DANGER OF DEATH under other circumstances,
existence not known
Notes:
(1) Institution of a summary proceeding is not
sufficient. There must also be a summary
judgment. (Balane)
(2) Only the deserted/present spouse can file or
institute a summary proceeding for the
declaration of presumptive death of the
absentee. (Bienvenido case)
(3) There must have been diligent efforts on the part
of the deserted spouse to locate the absent
spouse. These diligent efforts correspond to the
requirement of the law for a well-founded belief.
Effect of Reappearance of Absent Spouse
General Rule: The subsequent marriage remains
valid.
Exception: It is automatically terminated by the
recording of the affidavit of reappearance of the
absent spouse at the instance of any interested
person, with due notice to the spouses of the

subsequent marriage. [Art. 42]

Note: It is the recording of the affidavit of
reappearance that automatically terminates the
subsequent marriage. Hence, if absentee spouse
reappears without recording affidavit of
reappearance, then there is no legal effect.
Meanwhile, absentee spouse cannot remarry.
(Tolentino)
Exception to the exception: If there is a judgment
annulling the previous marriage or declaring it void
ab initio. [Art. 42]
Good Faith: PERIOD of absence for PRESUMPTIVE
DEATH is MANDATORY thus cannot be shortened by
good faith and if be done so will be VOID.
Burden of Proof: Two successive marriages,
presumption of validity on 2nd marriage and burden
on party ATTACKING VALIDITY OF 2ND MARRIAGE.
PRESUMPTION in favor of INNOCENCE prevails over
PRESUMPTION of CONTINUANCE OF LIFE OF 1ST
SPOUSE & MARITAL RELATIONS.
Difference between Absence in the Civil Code and
Family Code
Family Code Civil Code
As to period
4 years under normal
circumstances;
2 years under
extraordinary
Absent for at least 7
years;
4 years under
extraordinary

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Family Code Civil Code

circumstances circumstances
As to remarriage
In order to remarry,
summary proceeding is
necessary
Declaration of
presumptive death is not
necessary
As to who can institute the action
Can be instituted by the
present spouse, any
interested party, and the
subsequent spouse
The spouses themselves
As to effect on subsequent marriage
Subsequent marriage is
automatically terminated
by the recording of an
affidavit of reappearance
of the absent spouse
Upon reappearance,

judicial proceeding is
necessary to declare
marriage null and void
As to ground
Well founded belief that
the absent spouse is dead
Generally believed to be
dead
Connected Provisions
Art. 390, Civil Code. After an absence of 7 years, it
being unknown whether or not the absentee still lives,
he shall be presumed dead for all purposes, except for
those of succession.
The absentee shall not be presumed dead for the
purpose of opening his succession till after an absence
of 10 years. If he disappeared after the age of 75 years,
an absence of 5 years shall be sufficient in order that
his succession may be opened.
Art. 391, Civil Code. The following shall be presumed
dead for all purposes, including the division of the
estate among the heirs: (SAAD)
(1) A person on board a vessel lost during a sea
voyage, or an aeroplane which is missing, who has
not been heard of for four years since the loss of the
vessel or aeroplane;
(2) A person in the armed forces who has taken part in
war, and has been missing for four years;
(3) A person who has been in danger of death under
other circumstances and his existence has not been
known for four years.
Notes:
Although 7 years is required for the presumption of
death of an absentee in the Civil Code, Art. 41 of the
Family Code makes an exception for the purpose of
remarriage by limiting such requirement to 4 years.
Article 43 and 44 (Effects of Termination of Bigamous
Marriage under Art. 42)
Art. 43:
(1) Children of subsequent marriage conceived prior
to its termination considered legitimate; custody
and support decided by court in a proper
proceeding
(2) Property Regime dissolved and liquidated (party
in bad faith shall forfeit his/her share in favor of
the common children or if there are none, children
of the guilty spouse by a previous marriage, and in
case there are none, to the innocent spouse)
(3) Donation propter nuptias remains valid, (but if
the donee contracted marriage in bad faith,
donations will be revoked)
(4) Insurance benefits innocent spouse may revoke
designation of guilty party as beneficiary, even if
such designation is stipulated as irrevocable
(5) Succession Rights Party in bad faith disqualified
to inherit from innocent spouse, whether testate or

intestate
Article 44:
Donations: If both parties of subsequent marriage
acted in bad faith, any donations and testamentary
dispositions made by one party to the other by
reason of marriage will be revoked
ACTION OR DEFENSE OF NULLITY

Prescription
Art. 39. The action or defense for the declaration of
absolute nullity of a marriage shall not prescribe. (as
amended by RA 8533)
It must be noted that under the new Supreme Court
Rule on Declaration of Absolute Nullity of Void
Marriages and Annulment of Voidable Marriages
A.M. No. 02-11-10-SC, effective March 15, 2003,
nullity of the marriage can still be collaterally
attacked.
Who may file the petition for nullity?
As to the parties allowed to file the action: Only an
aggrieved or injured spouse may file a petition for
annulment of voidable marriages or declaration of
absolute nullity of void marriages. Such petition
cannot be filed by compulsory or intestate heirs of
the spouses or by the State. The Committee is of the
belief that they do not have a legal right to file the
petition. Compulsory or intestate heirs have only
inchoate rights prior to the death of their
predecessor, and, hence, can only question the validity
of the marriage of the spouses upon the death of a
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spouse in a proceeding for the settlement of the estate

of the deceased spouse filed in the regular courts.
(Enrico v. Heirs of Sps. Medinaceli (2007)), also
reiterated in (Carlos vs. Sandoval (2008))
How to attack a void marriage?
General Rule: Void Marriages may be attacked
collaterally or directly.
Exception: A person in a void marriage must first file
for a declaration of nullity in order to subsequently
marry
ANNULLABLE MARRIAGE

(Note: Although the Supreme Court in its syllabus

seems to make a distinction between annullable and
voidable marriages by the fact that they made two
separate categories for the two, Tolentino makes no
mention of any such difference.)
Art. 14: In case either or both of the contracting
parties, not having been emancipated by a previous
marriage, are between the ages of eighteen and
twenty-one, In addition to the requirements of the
preceding articles:
(a) Exhibit to the local civil registrar the consent to
their marriage of their father, mother, surviving
parent or guardian, or persons having legal charge
of them, in the order mentioned

(b) Manifested in writing by the interested party, who

personally appears before the proper local civil
registrar, or
(c) In the form of an affidavit made in the presence of
two witnesses and attested before any official
authorized by law to administer oaths
(d) The personal manifestation shall be recorded in
both applications for marriage license, and the
affidavit, if one is executed instead, shall be
attached to said applications.
Grounds for Annulment
Article 4 states that xxx A defect in any of the
essential requisites shall render the marriage
voidable as provided in Article 45.
Article 45. Marriage may be annulled on the
following grounds existing at time of marriage:
(PIFFIS)
(1) One of the parties is 18 or above but below 21
years old, and there is no parental consent.
(2) Either party was of unsound mind (insanity).
(3) The consent of either party was obtained through
fraud (different from mistake in identity):
(a) Through non-disclosure of a previous
conviction of a crime involving moral
turpitude;
(b) Through concealment by the wife of the fact
that at the time of the marriage she was
pregnant by another man;
(c) Through concealment of a sexuallytransmitted
disease, regardless of its nature,
existing at the time of marriage;
(d) Through concealment of drug addiction,
habitual alcoholism or
homosexuality/lesbianism. (Art.46)
(4) The consent of either party was obtained through
force, intimidation, or undue influence.
(5) Either party is physically incapable of
consummating the marriage (impotence; this is
different from sterility, which is the inability to
produce offspring).
(6) Either party has a serious and incurable sexuallytransmissible
disease, even if not concealed.*
Action to Annul: Action in rem, concerns status of
parties; res is relation between parties or marriage
tie; jurisdiction depends on nationality or domicile
not the place of celebration.
Grounds for Annulment explained:
(1) Lack of parental consent
(a) 18 x < 21 without parental consent
(b) Ratified by party 18 or above but below 21
upon free cohabitation upon reaching 21.
(c) TOLENTINO: parents whose consents were
wanting may ratify before 21; this right can be
waived; however, the Code Commission
believes that no such ratification can be made

by the parent.
(2) Insanity
(a) Mental incapacity or insanity is a vice of
consent; insanity (1) of varying degrees, (2)
curable being an illness, capable of
ratification or convalidation, (3) has lucid
intervals, (4) ground only for annulment in
many countries
(b) Can be ratified by cohabitation after insanity is
cured or during a lucid interval
(c) Mere mental weakness is not a ground for
annulment, but if found grave enough may
amount to psychological incapacity.
(d) Intoxication, somnambulism where one had
no mental capacity to give consent is
equivalent to insanity
(e) Must EXIST AT THE TIME of the celebration of
the marriage.
(f) Law presumes SANITY, burden of proof on
party alleging insanity
(3) Fraud
(a) Only those enumerated in Art. 46:

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(1) Non-disclosure of previous CONVICTION

by final judgment of a crime involving
MORAL TURPITUDE
(2) Concealment by wife at the time of
marriage, that she was pregnant by
another man
(3) Concealment of STD regardless of nature
existing at time of marriage
(4) Concealment of drug addiction, habitual
alcoholism, homosexuality, lesbianism
existing at time of marriage
(b) NO other misrepresentation or deceit of
CHARACTER, HEALTH, RANK, FORTUNE OR
CHASTITY shall constitute FRAUD.
(c) Conviction of Crime: requisites are
(1) Moral turpitude
(2) Conviction
(d) Concealment of Pregnancy
(1) Fraud against very essence of marriage;
importance of procreation of children; an
assault to the integrity of the union by
introducing ALIEN BLOOD
(2) If husband knew of pregnancy, the
marriage cannot be annulled on the
ground of concealment
(e) Marriage cannot be annulled on the ground
that wife concealed the fact that she had been
lewd & corrupt and had illegitimate child.
(Shrady v. Logan (1896))
(f) Maybe ratified upon free cohabitation after
knowledge of fraud.
Art. 45 STD

Art. 46 STD
Ground for annulment The STD is a type of
fraud which is a ground
for annulment
Does not have to be
concealed
Must be concealed
Must be serious and
incurable
Need not be serious nor
incurable
The STD itself is the
ground for annulment
It is the concealment
that gives rise to the
annulment
Effect of Cure to Fraud in Art. 46:
Recovery or rehabilitation from STD, drug addiction,
and habitual alcoholism will NOT BAR ACTION for
annulment; The defect is not the disease, but the
FRAUD which VITIATED CONSENT.
Buccat v. Mangonon de Buccat, (1941):
Wife gave birth 3 months after marriage celebration.
Husband filed for annulment. Denied. Ground:
Concealment of non-virginity. Court held that it was
unbelievable that husband could not have noticed
when wife had been at least 6 months pregnant prior
to marriage.
Aquino v. Delizo, (1960):
The Supreme Court granted annulment because the
wife concealed the fact that she was 4 months
pregnant during the time of the marriage. It argued
that since Delizo was naturally plump, Aquino could
hardly be expected to know, by mere looking, whether
or not she was pregnant at the time of the marriage.
Almelor v. RTC, (2008):
It is the concealment of homosexuality, and not
homosexuality per se, that vitiates the consent of the
innocent party. Such concealment presupposes bad
faith and intent to defraud the other party in giving
consent to the marriage.
Corpuz v. Ochoterena, (2004):
In a legal separation or annulment case, the
prosecuting attorney must first rule out collusion as a
condition sine qua non for further proceedings. A
certification by the prosecutor that he was present
during the hearing and even cross-examined the
plaintiff does not suffice to comply with the mandatory
requirement.
(4) Force, intimidation, undue influence
(a) FORCE must be one as to prevent party from
acting as a free agent; will destroyed by
fear/compulsion
(b) INTIMIDATION must be one as to compel the
party by reasonable/well-grounded fear/evil

imminent upon person/properties

(c) DEGREE OF INTIMIDATION: age, sex,
condition of person borne in mind
(d) Threat or intimidation as not to act as FREE
AGENT; threatened of armed demonstrations
by brother is ANNULLABLE (Tiongco v Matiga)
(e) Man rapes a girl, marries her to conceal the
rape & has no intention to live with the girl;
marriage is annullable (People v Santiago
(1927))
(f) Committee added undue influence, maybe
compelled to enter out of REVERENTIAL
FEAR e.g., fear of causing distress to parents,
grandparents, etc.
(g) May be ratified upon cohabitation after force,
intimidation, or undue influence has ceased or
disappeared.
(5) Impotency
(a) Must exist at time of marriage, must be
continuous, must be incurable; thus if
incapacity can be remedied or is removable by
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operation, NOT ANNULLABLE (Sarao v

Guevarra(1940))
(b) Should be unknown to the other party
(c) Physical condition: sexual intercourse with a
person of the opposite sex is impossible, not
mere sterility
(d) When both spouses are impotent, marriage
cannot be annulled because neither spouse is
aggrieved
(e) POTENCY PRESUMED; party who alleges
impotency has burden of proof (Jimenez v
Canizares (1960))
(f) Although potency is presumed, there is a
doctrine in England called TRIENNIAL
COHABITATION that if wife remains virgin
after 3 yrs, husband presumed impotent & has
burden to prove otherwise (Tompkins v
Tompkins)
(g) REFUSAL of wife to be examined DOES NOT
PRESUME impotency because Filipino women
are inherently shy & bashful; TC must order
physical examination because w/o proof of
impotency, she is presumed potent; to order
her to undergo physical exam does not
infringe constitutional rights against selfincrimination
(Jimenez v Canizares)
(h) Villanueva vs. CA (2006): Absence of
cohabitation is not a ground for annulment.
(i) NOTE: if wife continues to refuse to undergo
physical exam, she can be held for
CONTEMPT & ordered to be confined in jail
until she does so
(j) RELATIVE IMPOTENCY: may now be invoked

because there are cases where one is

impotent with respect to his spouse but not
with other men or women.
(k) EXAMPLE: penile erection to other women
possible; unusually large penis cannot fit with
abnormally small vagina
(6) Sexually-transmissible disease serious and
incurable
(a) Should exist at the time of the marriage
(b) Should be found serious
(c) Should appear to be incurable
(d) Should be unknown to other party
(e) Reason: danger to the health of spouse &
offspring/s
(f) Same as incurable impotency
(g) Not subject to ratification cannot be ratified
or convalidated by prescription or
cohabitation:
(a) Prior subsisting marriage; would result in
anomalous relationship
(b) Vitiated by impotency remains as long as
afflicted
(c) Vitiated by affliction of STD remains as
long as afflicted
(d) Affliction of STD is unknown to the other
spouse (Balane)
(e) The other spouse must also be free from a
similar STD. (Balane)
(h) 2 & 3 above prescribe w/in 5 yrs by Art. 47(5)
Who may file, Prescription, Ratification
Ground
(Art. 45)
Who can file
(Art. 47)
Prescription
(Art. 47)
Ratification
(Art. 45)
Lack of
parental
consent
Under-aged party (18 or above
but below 21)
Within 5 years after attaining
21.
Free cohabitation after
attaining age of 21.
Parent or guardian without
consent
Before party below 21 reaches
21.
Insanity Sane spouse with no
knowledge of the others
insanity
Legal guardian of insane party

Any time before the death of

either party
Free cohabitation of insane
party after insane party
comes to reason
Insane party During lucid interval or after
regaining sanity, and before
death
Fraud Injured party (defrauded party) Within 5 years after discovery
of fraud
Free cohabitation after having
full knowledge of fraud
Force,
intimidation,
undue
influence
Injured party Within 5 years after
disappearance of force, undue
influence, or intimidation
Free cohabitation after the
force or intimidation or undue
influence has ceased or
disappeared
Impotence Potent spouse Within 5 years after marriage Cannot be ratified but action
prescribes
STD Healthy party Within 5 years after marriage Cannot be ratified but action
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Ground
(Art. 45)
Who can file
(Art. 47)
Prescription
(Art. 47)
Ratification
(Art. 45)
prescribes
Marriages Not Subject to Ratification/ Convalidation
by cohabitation
(1) One spouse is incurably impotent (Art. 47
prescription: 5 years)
(2) One spouse has an incurable STD (Art. 47
prescription: 5 years)
(3) Sane spouse marries an insane spouse w/o
knowledge of insanity
Presence of Prosecutor
Art. 48: To prevent collusion between the parties,
fabrication or suppression of evidence, the prosecuting
attorney or fiscal shall appear on behalf of the State.
EFFECT OF PENDING ACTIONS/DECREE
Art. 49: During the pendency of the action and in the
absence of adequate provisions in a written agreement
between the spouses, the Court shall provide for the
support of the spouses and the custody and support of
their common children. The Court shall give
paramount consideration to the moral and material

welfare of said children and their choice of the parent

with whom they wish to remain as provided for in Title
IX. It shall also provide for appropriate visitation rights
of the other parent.
(1) The court shall provide for the support of the
spouses,
(2) The custody and support of the common children,
giving paramount consideration to their moral
and material welfare, their choice of parent with
whom they wish to remain.
(3) The court shall also provide for visitation rights of
other parent.
Decisions on the nullification of the marriage
Art. 48 (2): In the cases referred to in the preceding
paragraph, no judgment shall be based upon a
stipulation of facts or confession of judgment.
Stipulation of Facts: An admission by both parties
after agreeing to the existence of any of the grounds
or facts that would constitute a void/voidable
marriage
Confession of judgment: The admission by one party
admitting his/her fault to cause the invalidity of the
marriage.
EFFECTS OF NULLITY

The effects provided for by paragraphs (2), (3), (4)

and (5) of Article 43 and by Article 44 shall also apply
in the proper cases to marriages which are declared
ab initio or annulled by final judgment under Articles
40 and 45 (Art. 50(1)).
Final judgment in such cases shall provide for the
liquidation, partition, and distribution of the:
(1) Properties of the spouses
(2) Custody and support of the common children
(3) Delivery of their presumptive legitimes
(a) Unless such matters had been adjudicated
in previous judicial proceedings (Art. 50(2))
(b) All creditors (of the spouses/property regime)
shall be notified of the proceedings for
liquidation (Art. 50(2 and 3))
In the partition, the conjugal dwelling and lot shall be
adjudicated to the spouse with whom majority of the
common children remain (Art. 102 and 129) (Art.
50(4)
Presumptive legitimes, computed as of the date of
the final judgment, shall be delivered in cash,
property or sound securities:
(1) Unless the parties, by mutual agreement
judicially approved, had already provided for such
(Art. 51(1))
(2) The children/guardian/trustee of property may
ask for the enforcement of the judgment (Art.
51(2))
(3) The delivery of the presumptive legitimes shall
not prejudice the ultimate successional rights,
but the value of the properties already received

shall be considered as advances on their legitime

(Art. 51(3))
Generally, children born or conceived within void
marriages are illegitimate.
Exceptions:
(a) Children conceived or born before the judgment
under Article 36 has become final and executor
(Art. 54)
(b) Children conceived or born of subsequent
marriages under Article 53 (Art. 54)

Legal Separation

GROUNDS FOR LEGAL SEPARATION

Note: The grounds for legal separation are exclusive.
(Article 55) (RPC Final DH BSAA)

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These must be filed within 5 years after occurrence of

cause (Article 57)
(1) Repeated physical violence or grossly abusive
conduct directed against the petitioner, a
common child, or a child of the petitioner;
(2) Physical violence or moral Pressure to compel the
petitioner to change religious or political
affiliation;
(3) Attempt of respondent to Corrupt or induce the
petitioner, a common child, or a child of the
petitioner, to engage in prostitution, or
connivance in such corruption or inducement;
(4) Final judgment sentencing the respondent to
imprisonment of more than six years, even if
pardoned;
(5) Drug addiction or habitual alcoholism of the
respondent;
(6) Lesbianism or Homosexuality of the respondent;
(7) Contracting by the respondent of a subsequent
Bigamous marriage, whether in the Philippines
or abroad;
(8) Sexual infidelity or perversion;
(9) Attempt by the respondent Against the life of the
petitioner; or
(10) Abandonment of petitioner by respondent
without justifiable cause for more than one year.
People v. Zapata and Bondoc (1951):
Adultery is not a continuing crime, but is
consummated and exhausted at the moment of carnal
union. Each sexual act constitutes one act of adultery.
As such, every sexual act is a ground for legal
separation.
Gandioco v. Pearanda (1989):
In sexual infidelity as a ground for legal separation,
there is no need for prior conviction for concubinage,
because legal separation only requires a
preponderance of evidence, as opposed to proof
beyond reasonable doubt required in concubinage.
Lapuz Sy v. Eufemio (1972):

The death of one party in a legal separation case

abates the action. This is because the death of either
spouse automatically dissolves the marriage. An
action for legal separation is also purely personal
between the spouses.
Dela Cruz. v. Dela Cruz (1968):
Abandonment is not mere physical estrangement but
also financial and moral desertion. There must be an
absolute cessation of marital relations, duties, and
rights with the intention of perpetual separation.
ACTS OF VIOLENCE ACCORDING TO RA 9262
(1) Causing physical harm to the woman or her child;
(2) Threatening to cause the woman or her child
physical harm;
(3) Attempting to cause the woman or her child
physical harm;
(4) Placing the woman or her child in fear of
imminent physical harm;
(5) Attempting to compel or compelling the woman or
her child to engage in conduct which the woman
or her child has the right to desist from or desist
from conduct which the woman or her child has
the right to engage in, or attempting to restrict or
restricting the woman's or her child's freedom of
movement or conduct by force or threat of force,
physical or other harm or threat of physical or
other harm, or intimidation directed against the
woman or child. This shall include, but not
limited to, the following acts committed with the
purpose or effect of controlling or restricting the
woman's or her child's movement or conduct:
(a) Threatening to deprive or actually depriving
the woman or her child of custody to her/his
family;
(b) Depriving or threatening to deprive the woman
or her children of financial support legally due
her or her family, or deliberately providing the
woman's children insufficient financial
support;
(c) Depriving or threatening to deprive the woman
or her child of a legal right;
(d) Preventing the woman in engaging in any
legitimate profession, occupation, business or
activity or controlling the victim's own money
or properties, or solely controlling the
conjugal or common money, or properties;
(6) Inflicting or threatening to inflict physical harm on
oneself for the purpose of controlling her actions
or decisions;
(7) Causing or attempting to cause the woman or her
child to engage in any sexual activity which does
not constitute rape, by force or threat of force,
physical harm, or through intimidation directed
against the woman or her child or her/his
immediate family;

(8) Engaging in purposeful, knowing, or reckless

conduct, personally or through another, that
alarms or causes substantial emotional or
psychological distress to the woman or her child.
This shall include, but not be limited to, the
following acts:
(a) Stalking or following the woman or her child in
public or private places;
(b) Peering in the window or lingering outside the
residence of the woman or her child;
(c) Entering or remaining in the dwelling or on the
property of the woman or her child against
her/his will;
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(d) Destroying the property and personal

belongings or inflicting harm to animals or
pets of the woman or her child; and
(e) Engaging in any form of harassment or
violence;
(9) Causing mental or emotional anguish, public
ridicule or humiliation to the woman or her child,
including, but not limited to, repeated verbal and
emotional abuse, and denial of financial support
or custody of minor children of access to the
woman's child/children.
DEFENSES
GROUNDS FOR DENYING LEGAL SEPARATION (ARTICLE 56)
(4CMPRD):
(1) Condonation by aggrieved party
(2) Consent by aggrieved party to the commission of
the offense
(3) Connivance between parties in the commission of
the offense
(4) Mutual guilt or Recrimination between spouses in
the commission of any ground for legal
separation
(5) Collusion between parties to obtain decree of
legal separation
(6) Prescription of action for legal separation (Art. 57:
5 years from occurrence of the cause of action)
(7) Reconciliation of parties during pendency of
action (Art. 66 par.1)
(8) Death of either party during pendency of action
(Lapuz-Sy vs. Eufemio)
COOLING-OFF PERIOD AND RECONCILIATION
EFFORTS
Action cannot be tried before six months have
elapsed from the filing of the petition (Art. 58).
Action cannot be tried unless the court has
attempted to reconcile the spouses, and determined
that despite such efforts, reconciliation is highly
improbable (Art. 59)
Note: This is without prejudice to judicial
determination of custody of children, alimony, and
support pendente lite.

Araneta vs. Concepcion, (1956):

Courts can still resolve other issues, pending the
waiting period or cooling off period. In resolving issues,
try not to touch, as much as possible, on the main
issue (i.e. adultery if that is the ground used). However,
Court must still receive evidence if just to settle
incidental issues of support and custody.
Note: This provision of the Family Code dictating a
mandatory 6-month cooling-off period does not
apply in cases where violence, as used in RA 9262
(Anti-Violence Against Women and their Children), is
alleged. The case should be heard as soon as
possible by the court.
CONFESSION OF JUDGMENT
No decree of legal separation shall be based upon a
stipulation of facts or a confession of judgment (Art.
60, par. 1. FC).
Note: Art. 60 par. 1 applies only if the judgment was
based solely on the stipulation of facts or solely on
the confession of judgment. Thus, if other grounds
were used, Art. 60 par. 1 is not applicable. (Balane)
Ocampo v Florenciano (1960):
The prohibition on confession of judgment does not
mean that the Court will not grant petition if one party
admits to being guilty of the charges of adultery. The
point of this provision is that the Court should still
admit evidence, not decide just based on an admission
of guilt. Because what is prohibited is handing down a
decree of legal separation based solely on a confession
of judgment.
EFFECTS OF FILING PETITION
(1) The spouses are entitled to Live separately, but
the marital bond is not severed. (Art. 61 (1)
(2) Administration of Community or Conjugal Property
If there is no written agreement between the
parties, the court shall designate one of them or a
third person to administer the ACP or CPG. (Art.
61, par. 2)
EFFECTS OF PENDENCY
The Court shall provide for: (Art. 62, cf. Art. 49. FC)
(a) Support of spouses
(b) Custody of children
The court shall give custody of children to one of
them, if there is no written agreement between
the spouses. It shall also provide for visitation
rights of the other spouse.
(c) Visitation rights of the other spouse
EFFECTS OF LEGAL SEPARATION
(1) The spouses can live separately (Art. 63) but the
marriage bonds are not severed.
(2) The ACP or CPG shall be dissolved and liquidated,
and the share of the guilty spouse shall be
forfeited in favor the common children, previous
children, or innocent spouse, in that order (Art.
63. cf. Art. 43, par. 2).

(3) Custody of the minor children shall be awarded to

the innocent spouse (Art. 63, cf. Art 213)
(4) Guilty spouse shall be disqualified from Inheriting
from innocent spouse by intestate succession.

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The provisions in favor of the guilty party in the

will of the innocent spouse shall also be revoked
by operation of law. (Art. 63)
(5) Donations in favor of the guilty spouse may be
revoked (Art. 64) but this action prescribes after 5
years from the decree of legal separation.
(6) Innocent spouse may also revoke designation of
guilty spouse as beneficiary in an Insurance policy,
even if such stipulations are irrevocable. (Art. 64.
FC, cf. PD 612, sec. 11)
(7) Obligation for Mutual support ceases, but the
court may order the guilty spouse to support the
innocent spouse. (Art. 198)
(8) The wife shall continue to use the Surname of the
husband even after the decree for legal
separation. (Art. 372, CC)
RECONCILIATION
HOW DONE

Should the spouses reconcile, they should file a

corresponding joint manifestation under oath of such
reconciliation. (Art. 65)
EFFECTS OF RECONCILIATION

(1) Proceedings for legal separation shall be

terminated at whatever stage. (Art. 66)
(2) If there is a final decree of legal separation, it
shall be set aside. (Art. 66)
(3) The separation of property and forfeiture of share
of guilty spouse shall subsist, unless the spouses
agree to revive their former property regime or to
institute another property regime. (Art. 66 cf. Art.
67)
(4) Joint custody of children is restored.
(5) The right to intestate succession by guilty spouse
from innocent spouse is restored.
The right to testamentary succession depends on
the will of the innocent spouse.
ANNEX TO VOID AND VOIDABLE MARRIAGES AND LEGAL SEPARATION
GROUNDS

Void Marriages
Voidable Marriages
Legal Separation
One is a minor Lack of parental consent Repeated Physical Violence
No authority to marry Insanity Pressure to compel to change religious/political
affiliations
No valid marriage license Fraud Corruption / Inducement to engage in prostitution
Bigamous and polygamous
marriages
Force, Intimidation or
Undue Influence
Final judgement with sentence of more than 6 yrs.
Mistake of identity Impotence Drug Addiction / Habitual Alcoholism

Void subsequent marriage Serious and Incurable

STD
Homosexuality / Lesbianism
Psychological incapacity Bigamous marriage (engaging in)
Incestuous Marriages Sexual Infidelity
Marriages against public
policy
Attempts against the life
Abandonment without just cause for more than 1
year
EFFECTS OF FILING / PENDING DECREE
Void/Voidable Marriages
Legal Separation
Support for the spouses
Custody and support for the children
Visitation rights to the other spouse
No right to live separately Spouses to live separately
Properties are still managed by both parties Designation of an administrator of the
properties
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EFFECTS OF AFFIDAVIT OF REAPPEARANCE, JUDICIAL DECLARATION OF NULLITY, ANNULMENT AND

LEGAL SEPARATION

Void Marriages Terminated Marriage (Art.

41)
Voidable Marriages Legal Separation
Status of Marital ties
Severed Severed Severed Not Severed
Status of Marriage
Void ab initio Subsequent marriage is
terminated (not
invalidated)
Void Valid
Status of Children born and conceived before termination
Illegitimate
EXCEPT: Art. 36 and 35 conceived
and born before judgement
(legitimate)
Legitimate Legitimate Legitimate
Custody of Children
Court Proceeding Court Proceeding Court Proceeding Innocent Spouse
Property Relations
(1) Dissolution and Liquidation of properties
(a) Guilty/Bad Faith spouse will forfeit his/her share from the Net Profits to the (in order):
(i) Common children
(ii) Children of the guilty spouse
(iii) Children of the innocent spouse
(2) Notification of creditors with the proceedings for liquidation
(3) Conjugal dwelling to be adjudicated to the spouse who has majority custody of common
children
(4) Insurance policy may be revoked only by the innocent spouse (Legal Separation: Only
within 5 years)
(5) Spouse in bad faith/guilty shall be disqualified to inherit (testate and intestate)
Donation Propter Nuptias
Valid, but if donee contracted marriage in bad faith, revoked by operation of law May be
revoked within 5

years

Rights and Obligations

between Husband and Wife
ESSENTIAL OBLIGATIONS
(1) Live together (cohabitation Art. 68)
Exemption: One spouse living abroad or there are
valid and compelling reasons (Art. 69 (2))
Exemption To Exemption: Incompatibility with the
solidarity of the family (Art. 69 (2))
(2) Observe mutual love, respect, and fidelity
(3) Render mutual help and support (Art. 68)
Ilusorio v. Bildner (2000): A person has a purely
personal right to consortium (Constitutional right to
liberty). Court cannot order a man to go back to the
conjugal dwelling. (Shows that what is in Family Code
is not the former spousal unity doctrine (Old
England)).
Goitia v. Campos Rueda (1916): The husband
demanded the wife perform unchaste and lewd
sexual acts. The wife refused but the husband kept
insisting. The wife left the family home. Wife petitioned
for support/ separate maintenance.
SC: Court cannot compel the woman to go back to the
husband. The duty of the husband to support the wife
is also not terminated because she left the house,
when it is the husbands fault she left in the first place.
Husband is compelled, in this case, to give support for
separate maintenance (outside family home).
Arroyo v. Vasquez de Arroyo (1921): A court cannot
compel a married woman to go back to her husband.
FAMILY DOMICILE
The husband and wife shall fix the family domicile.
(Art. 69)
In case of disagreement, the court shall decide. (Art.
69 (1))
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SUPPORT
From the conjugal property; If none, income or the
fruits of their separate properties; if none, from their
separate properties (liable in proportion to their
properties).
MANAGEMENT OF HOUSEHOLD
This is the right and duty of both spouses.
EFFECT OF NEGLECT OF DUTY
In case the other spouse neglects his or her duties or
commits acts which tend to bring danger, dishonor
or injury to the family, the aggrieved party may apply
to the court for relief. (Art. 72)
Injury contemplated is physical, moral, emotional or
psychological, not financial.
EXERCISE OF PROFESSION
Either spouse may exercise any legitimate
profession, without need for consent of the other.

(a) The other spouse may only object on valid,

serious, and moral grounds.
(b) In case of disagreement, the Court shall decide
whether:
(1) The objection is proper, and
(2) Benefit has accrued to the family before OR
after the objection.
If BEFORE the objection, enforce resulting obligation
against the separate property of the spouse who has
not obtained consent.

Property Relations of the

Spouses

MARRIAGE SETTLEMENTS
Art. 75. Future spouses may agree upon, in the
marriage settlement, which property regime will
govern their marriage (ACP, CPG, complete
separation of property, other regimes). However, in
the absence of a marriage settlement, or when the
regime agreed upon is void, the system of absolute
community of property as established by this Code
shall govern.
Marriage settlements are considered accessory to
the marriage, therefore as per Art. 81, stipulations in
consideration of future marriage and donations will
be void if the marriage does not take place.
MARRIAGE SETTLEMENT RULES

When modifications can be

made
General rule: Before marriage is celebrated [Art. 76]
Art. 63(2) Property regime is dissolved
Arts. 66 and 67 - Reconciliation in case of legal separation
Art. 128 - When spouse leaves family without just cause
Art. 135 - Sufficient cause for judicial separation of property
Art. 136 - Voluntary dissolution of ACP or CPG by the spouses
If a spouse petitions the court for:
(1) Receivership;
(2) Judicial separation of property; or,
(3) Authority to be the sole administrator of the conjugal partnership, if he or she is
abandoned by the other without just cause or fails to comply with his or her obligations to
the family [Art. 128]
Requirements of marriage
settlements and any
modification thereof [Art. 77]
Made in writing
Signed by the parties
Executed before the marriage celebration
Registered in the local civil registry where the marriage is recorded and in registries of
property in order to prejudice third persons
If executed by a person below 21 y.o., valid only when persons required to give consent to
the
marriage (father, mother, or guardian, respectively) are made parties to the agreement [Art.
78]
If executed by a person upon whom civil interdiction has been pronounced or who is subject
to any other disability, valid only when his guardian is made party to the agreement [Art. 79]

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DONATIONS BY REASON OF MARRIAGE

Solis v. Barroso (1928): In donations propter nuptias, the marriage is really a consideration,
but not in the sense of
giving birth to the obligation. There can be a valid donation even if the marriage never took
place, but the absence
of marriage is a ground for the revocation fo the donation.
Mateo v. Lagua (1969): Donations propter nuptias are without onerous consideration,
marriage being merely the
occasion or motive for the donation, not its cause. Being liberalities, they remain subject to
reduction for
inofficiousness upon the donors death, if they should infringe the legitime of a forced heir.
Requisites of
donations propter
nuptias
Made before the celebration of marriage
Made in consideration of marriage
In favor of one or both of the future spouses
Donor must be one of the betrothed or any third person
Donations excluded
Ordinary wedding gifts given after the celebration of the marriage
Donations in favor of future spouses made before marriage but not in consideration
thereof
Donations made in favor of persons other than the spouses even if founded on the
intended marriage
Who may donate
Spouses to each other
Parents of one or both spouses
Third persons to either or both spouses
Sources of rules
governing donations
propter nuptias
Family code provisions [Arts. 82-87]
Ordinary donation provisions [Art. 83; Title III of Book III, NCC]
Provisions on testamentary succession and the formalities of wills for donations on future
property [Art. 84, par. 2]
Rules for donations
before marriage
General rule: Future spouses cannot donate to each other more than 1/5 of their present
property (excess shall be considered void). [Art. 84]
Exception: If they are governed by ACP
Donations of property subject to encumbrances
(1) Are considered valid.
(2) In case of foreclosure:
(a) if property value < obligation, donee shall not be liable for the deficiency
(b) if property value > obligation, donee shall be entitled to the excess (Art. 85)
Grounds for
revocation of donation
propter nuptias [Art.
86]
(1) If the marriage is not celebrated or judicially declared void ab initio, except donations
made in settlements.
(2) When the marriage takes place without the consent of the parents or guardians, as
required by law.
(3) When the marriage is annulled, and the donee acted in bad faith.

(4) Upon legal separation, if the donee is the guilty spouse.

(5) If there is a resolutory condition, and it is not complied with.
1. When donee has committed an act of ingratitude: [Art. 765, CC]
a. An offense against person or property of donor, or his wife or children under
parental authority.
b. An imputation to the donor of any criminal offense, or any act involving moral
turpitude, even if proven, unless the crime is committed against the donee, his wife
or children under his authority.
c. Refusing to support the donor, if he/she is legally required to do so.
Effects of judicial
declaration of nullity
Donations by reason of marriage shall remain valid except that if the donee contracted
marriage in bad faith, such donations made to said donee are revoked by operation of law.
[Art. 43 (3)]
Revocation by operation of law - Thus, even if spouse in good faith condones the donee,
the donation propter nuptias is still forfeited.
Effects provided for by Art. 43(2), (3), (4), and (5) and by Art. 44 shall also apply to
marriages that are declared void ab initio or annulled by final judgment under Article 40
(Judicial declaration of nullity) and 45 (Voidable marriages). [Art. 50]
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Rules for donations

during marriage
General rule: Spouses cannot donate to each other, directly or indirectly (donations made
by spouses to each other during the marriage are void). [Art. 87]
Exception: Moderate gifts on the occasion of any family rejoicing.
Harding v. Commercial Union, (1918): The prohibition on donations can only be assailed by
persons who bear such relation to the parties or the property itself, that their rights are
being interfered with. Here, the insurance company of the donated car cannot assail the
validity of the donation. In addition, the codal exception of moderate gifts depends on
the income class of the spouses and a car could be considered a moderate gift that does
not infringe the prohibition of donation between spouses.
Rules for donations
between common-law
spouses
Matabuena v Cervantes, (1971): The donation between common-law spouses falls within
the provision prohibiting donations between spouses during marriage.
Sumbad v. CA, (1999): The donation made by a man to a woman was held valid because no
proof was shown that they were still living in a common-law relationship at the time of the
donation.
DISTINGUISHED FROM ORDINARY DONATIONS

Donations Propter Nuptias Ordinary Donations

Does not require express acceptance Express acceptance necessary
May be made by minors (Art. 78) Cannot be made by minors
May include future property Cannot include future property
If present property is donated and property is not
absolute community, limited to 1/5 (Art. 84)
No limit to donation of present property provided
legitimes are not impaired
Grounds for revocation - In Art. 86 Grounds for revocation - in donation laws
ABSOLUTE COMMUNITY OF PROPERTY AND CONJUGAL PARTNERSHIP OF GAINS
Art. 80. Property relations between Filipino spouses are governed by Philippine laws,
regardless of the place of
marriage and their residence.
By the Nationality Rule [Art. 15], the rule that Absolute Community Property (ACP) is the
default mode of property

relations absent any marriage settlement applies to all Filipinos, regardless of the place of
the marriage and their
residence.
Exceptions:
(1) Where both spouses are aliens
(2) As to the extrinsic validity of contracts
(3) Contrary stipulation
Art. 81. Everything stipulated in marriage settlements in consideration of a future marriage
are void if marriage
does not take place. However, stipulations that do not depend upon the celebration of
marriage (e.g.: recognition
of paternity of illegitimate child) remain valid.
Art. 89. As a general rule, a waiver of rights is not allowed, except in the following cases:
(1) When there is judicial separation of property
(2) When there is legal separation
(3) When the marriage is dissolved by death of one of the spouses
(4) When the marriage is annulled
Art. 90. Co-ownership rules shall apply to ACP in matters not provided by the Family Code.
COMPARISON OF ACP AND CPG

Absolute Community Property Conjugal Partnership Of Gains

When it commences
At the precise moment of the celebration
of the marriage [Art. 88]
Default property regime for marriages celebrated before the Family
Code took effect (1988)
For marriages after the Family Code, if agreed to by the parties
through a marriage settlement.
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Absolute Community Property Conjugal Partnership Of Gains

What it consists of
All the property owned by the spouses at
the time of the celebration of the
marriage or acquired thereafter [Art. 91]
Proceeds, products, fruits, and income of their separate properties
Everything acquired by them within marriage through their own
efforts
Under the ACP, spouses cannot exclude
specific properties from the regime.
Everything acquired by them by chance
Acquired by onerous title during the marriage at the expense of the
common fund
Winnings from gambling shall accrue to
the community property [Art. 95]
Acquired through the labor, industry, work, or profession of either or
both spouses
Fruits from common property and net fruits of the exclusive
property of each spouse
Share of either spouse in hidden treasure, whether as finder or
owner of property where treasure was found
Acquired through occupation such as fishing or hunting
Livestock existing at dissolution of partnership in excess of what is
brought by either spouse to the marriage
Acquired by chance, such as winnings from gambling or betting
Moral damages arising from a contract paid from the CPG [Zulueta
v. Pan Am (1973)]

Loans contracted during the marriage are conjugal, and so is any

property acquired therefrom [Mendoza v. Reyes (1983)]
Property purchased by installment, paid partly with conjugal funds
and partly with exclusive funds, if full ownership was vested during
the marriage; the CPG shall reimburse the owner-spouse [Art. 118]
If a winning ticket is bought by conjugal funds, the prize is conjugal
(otherwise, the prize is exclusive property of the spouse who owns
the ticket)
Improvement on exclusive property: if original value < new value
(where new value = value of land + value of improvements + net
change in value), then land becomes conjugal property, subject to
the reimbursement of the value of the property of the ownerspouse
at the dissolution of the CPG
Property belonging to one spouse converted into another kind
totally different in nature from its original form during marriage
becomes conjugal in the absence of proof that the expenses of the
conversion were exclusively for the account of the original ownerspouse,
subject to reimbursement of the value of the original
property from the conjugal partnership
What remains exclusive property
Properties acquired before the marriage,
for those with legitimate descendants with
a former marriage (to protect rights of
children by a former marriage)
Property brought into a marriage by each spouse as his/her own
Properties acquired by a gratuitous title,
i.e. donation, inheritance by testate and
intestate succession, including the fruits
of such properties
Except: When expressly provided by
the donor or testator that the property
shall form part of the ACP
Property acquired by either spouse during the marriage by
gratuitous title
Properties for personal use
Except: Jewelry
Property acquired by right of redemption, by barter, or by exchange
with property belonging to either spouse
Plata v. Yatco: Plata purchased property when she was single.
When married, she and her husband Bergosa co-signed a
mortgage on the property. Upon foreclosure, Bergosa was
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Absolute Community Property Conjugal Partnership Of Gains

sued for illegal detainer. A writ of execution on the property
was carried out but Plata refused to leave the premises. SC
ruled that Plata cannot be held in contempt. Property is not
conjugal. Her husband signing as co-mortgagor does not
convert it to CPG. She could ignore execution because the
decision was for her husband alone.
Property purchased with exclusive money of either spouse
Property purchased by installment, paid partly with conjugal funds
and partly with exclusive funds, if full ownership was vested before
the marriage [Art. 118]
Even if the installment is completed after the marriage, the
property is exclusive if ownership was vested in one spouse before

the marriage [Lorenzo v. Nicolas (1952)]

Improvement on exclusive property: if original value > new value
(where new value = value of land + value of improvements + net
change in value), then land remains exclusive property of the
owner-spouse, subject to the reimbursement of the cost of
improvement
Money received under the Social Security Act is not conjugal,
although the employee-spouse contributes to the SS with his
salaries, but belongs to the designated beneficiary under the
Social Security Law. SSA governs, not FC.
Intellectual property, like copyright or patent, should, according to
Tolentino, be considered separate property
Business property (e.g. trademarks, trade names, service marks,
business goodwill) are merely accessories to some commercial
establishment or product, so that if such establishment or product
is separate property of one spouse, then all the business property
is separate property; but all benefits or earnings derived from
these during the marriage should belong to the conjugal property
(Tolentino)
Collection of credits belonging to one spouse exclusively but the
interests shall belong to the CPG [Art. 119]
Sale of separate property of a spouse
Indemnity paid in case of expropriation of separate property or
under an insurance policy covering separate property
Presumption
All properties acquired during the
marriage form part of the ACP, unless it
be proven that they are excluded. [Art.
93]
All property acquired during the marriage, whether made,
contracted, or registered in the name of one spouse, are presumed
conjugal unless the contrary is prove. [Art 116]
As a condition sine qua non in favor of the conjugal partnership,
the party who invokes the presumption must first prove that the
property was acquired during the marriage [Acabal v. Acabal
(2005)]
Charges and obligations
Art. 94 Arts. 121-123
Support of the following:
(1) Spouses
(a) Even if not living together, except
when a spouse leaves conjugal
home without just cause
(b) Even during pendency of action for
legal separation/annulment of
Debts and obligations
(1) Parag. 2: Debts incurred
(a) By administrator-spouse for the benefit of the family
(b) By both spouses
(c) By one spouse with the consent of the other
(2) Parag. 3: By one spouse without the consent of the other for the
benefit of the family
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Absolute Community Property Conjugal Partnership Of Gains

marriage

(2) Common children

(3) Legitimate children of previous
marriage
(4) Illegitimate children follow the
provisions on Support and parag. 9
(3) Parag. 7: Ante-nuptial debts for the benefit of the family
Debts and obligations contracted during
the marriage
(1) Either by both spouses or one of them,
with the consent of the other
(2) In parags. 2 and 3, creditors need not
prove that the debts benefited the
family
Taxes and expenses
(1) Parag. 4: Maintenance of the CPG properties
(2) Parag. 5: Mere preservation of all exclusive properties
(3) Parag. 9: Litigation expenses, unless the suit is groundless
Debts contracted by one spouse without
consent of the other ACP is liable only
to the extent that the debt benefited the
family
Support
(1) Parag. 1: Support of spouses and common children
(2) Parag. 6: Education of spouses, absolute
(3) Parag. 8: Education of common children, only for value of
donation
Support to surviving spouse & children during liquidation is
charged against the fruits or income of their shares in the
properties. [Art. 133]
Tax, liens, repairs (both major and minor)
on community property
Debts incurred in the exercise of a spouses profession [Javier v.
Osmea (1916)]
Taxes and expenses for mere
preservation of separate properties
- Applies only to separate properties by
either spouse being used by the family,
not those that do not benefit the family
- Expenses limited to minor repairs only
Loan contracts signed by both spouses are conjugal, and they are
jointly liable for payment, even if only one spouse signs a
subsequent promissory note [DPB v. Adil (1988)]
Expenses for professional, vocational, or
self-improvement courses of spouses
Debts incurred during the marriage are presumed to be conjugal
and thus are charged to the CPG [Cobb-Perez v. Latin (1968)]
Ante-nuptial debts that benefited the
family if the ante-nuptial debt did not
benefit the family, the applicable rule is
parag. 9
Donations by both spouses to common
legitimate children, for purposes of
professional/vocational courses or
activities for self-improvement
Ante-nuptial debts not under parag. 7,

support of illegitimate children, and

liabilities of either spouse arising from
crime/quasi-delict
- Only if the debtor-spouse has no
exclusive property or his/her property is
insufficient
- The payments by the ACP are deemed
advances to be deducted from the share
of the guilty spouse upon the
liquidation of the absolute community
Ayala Investment v. Ching (1998):
The Supreme Court ruled that indirect benefits that might accrue
to a husband in signing as a surety or guarantee agreement not in
favor of the family but in favor of his employer corporation are not
benefits that can be considered as giving a direct advantage
accruing to the family. Hence, the creditors cannot go against the
conjugal partnership property of the husband in satisfying the
obligation subject of the surety agreement. A contrary view would
put in peril the conjugal partnership by allowing it to be given
gratuitously as in cases of donation of conjugal partnership
property, which is prohibited
Expenses of litigation between spouses,
except when suit is groundless
If community property is insufficient
except in parag. 9, the spouses are
solidarily liable for the unpaid balance
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Absolute Community Property Conjugal Partnership Of Gains

from their separate properties
Gambling losses shall be borne by the
losing spouses separate property [Art.
95]
Ownership, administration, enjoyment, and disposition
Art. 96: Administration of property
belongs to both spouses, jointly. If they
disagree, the husbands decision prevails.
However, the wife has 5 years to seek
recourse from the court. Otherwise, it is
presumed she agreed to his decision.
Exception: When the other spouse is
incapacitated, or unable to participate in
the administration, e.g. when abroad.
Capacitated spouse may assume sole
powers of administration. However,
power is limited to administration.
Art. 124, par. 1: Administration of property belongs to both spouses,
jointly. In case of disagreement, the husbands decision shall
prevail, subject to recourse by the wife for proper remedy, which
must be availed of within 5 years from the date of the contract
implementing such decision
Sale by the husband of property belonging to the conjugal
partnership without the consent of the wife, when there is no
showing that the latter is incapacitated, is void ab initio [Abalos v.
Macatangay (2004)]
Uy v. CA (2000):

FC124 contemplates a situation where one spouse is absent, or

separated in fact or has abandoned the other or consent is
withheld or cannot be obtained. Such rules do not apply to cases
where the non-consenting spouse is incapacitated or incompetent
to give consent ie, in coma. The proper remedy is to file for
guardianship under the ROC. Even assuming that the rules on
summary proceedings apply, the power of the administrator is the
same as a guardian. So a spouse who desires to sell conjugal
property as administrator must still observe the procedure for the
sale of the wards estate required of judicial guardians under ROC
not the summary judicial proceedings under FC.
De Ansaldo v. Sheriff of Manila (1937): Spouses are not co-owners
of CPG during the marriage and cannot alienate the supposed
interest of each in the said properties. The interest of the spouses
in the CPG is only inchoate or a mere expectancy and does not
ripen into title until it appears after the dissolution and liquidation
of the partnership that there are net assets. [
Either spouse may, through a will,
dispose of his or her interest in the
community property. [Art. 97] However,
the will should refer only to his or her
share in the community property.
Art. 124, par. 2: Disposition or encumbrance of conjugal property
requires the following:
(1) Consent or approval by both spouses, or
(2) Judicial authority secured in court
Donation of one spouse without the
consent of the other is not allowed. [Art.
98]
Exceptions:
(1) Moderate donations to charity due to
family rejoicing or distress
(2) Moderate gifts by each spouse to the
other due to family rejoicing
Moderation depends on the familys
socio-economic status.
ACP allows donations in excess of onefifth
of present property of future spouses
because the donation would form part of
the community property once the
marriage is celebrated. [Art. 84]
Donation of CPG must be with the consent of the other spouse
except moderate donations for charity, on occasions of family
rejoicing, or family distress [Art. 125; cf. Art. 98]
Mere awareness of a transaction is NOT consent [Jader-Manalo v. Camaisa (2002)]
Homeowners Savings & Loan Bank v. Dallo (2005):
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Absolute Community Property Conjugal Partnership Of Gains

In the absence of (court) authority or written consent of the other spouse, any disposition or
encumbrance of the
conjugal property shall be void.
Cheeseman v. IAC (1991):
If however, one of the spouses is an alien, the Filipino spouse may encumber or dispose of
the property w/o the

consent of the former. The property is presumed to be owned exclusively by the Filipino
spouse.
Dissolution of the regime
Terminates upon [Art. 99]:
(1) Death of either spouse follow rules
in Art. 103
(2) Legal separation follow rules in
Arts. 63 and 64
(3) Annulment or judicial declaration of
nullity follow rules in Arts. 50 and
52
(4) Judicial separation of property during
marriage follow rules in Arts. 134 to
138
Terminates upon [Art. 126; cf. Art. 99]:
(1) Death
(2) Legal separation
(3) Annulment or judicial declaration of nullity
(4) Judicial separation of property
Rules on de facto separation [Art. 100]
De facto separation does not affect the
ACP, except that:
(1) Spouse who leaves the conjugal home
without just cause shall not be
entitled to support; however, he/she
is still required to support the other
spouse and the family
(2) If consent is necessary for transaction
but is withheld or otherwise
unobtainable, authorization may be
obtained from the court
(3) Support for family will be taken from
the ACP
(4) If ACP is insufficient, spouses shall be
solidarily liable
(5) If it is necessary to administer or
encumber separate property of
spouse who left, spouse present may
ask for judicial authority to do this
(6) If ACP is not enough and one spouse
has no separate property, spouse who
has property is liable for support,
according to provisions on support
Not affected by de facto separation [Art. 128; cf. Art. 100]
Abandonment [Art. 101]
Present/aggrieved spouse may petition
the court for:
(1) Receivership
(2) Judicial separation of property
(3) Authority to be the sole administrator
of the absolute community, subject to
precautionary conditions that the
court may impose
A spouse is deemed to have abandoned
the other when he or she has left the

conjugal dwelling without any intention

of returning.
Spouse is prima facie considered to have
Abandonment and absence [cf. Art. 101]
Partosa-Jo v. CA (1992):
Physical separation of the spouses, coupled with the husbands
refusal to give support to the wife, sufficed to constitute
abandonment as a ground for an action for the judicial separation
of their conjugal property.
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Absolute Community Property Conjugal Partnership Of Gains

abandoned the other spouse and the
family if he or she has:
(1) Left for a period of 3 months
(2) Failed to inform the other spouse of
his or her whereabouts for a period of
3 months
Liquidation of assets and liabilities
Procedure [Art. 102]
(a) Inventory of assets of ACP and of
spouses, with market values
(b) Obligations are paid with community
property, and separate obligations not
charged to ACP paid by respective
assets of spouses
If obligations exceed the assets of the
ACP, nothing is divided. Creditors can
go after the separate properties of the
spouses, which are solidarily liable for
the deficiency
(c) Delivery of whatever remains in their
exclusive property
(d) Balance, or net remainder is divided
equally between the spouses,
irrespective of how much each
brought into the community
(e) If personal obligations of a spouse
exceed his/her separate property,
creditor can go after the share of the
spouse on the net remainder of the
ACP, without prejudice to the
provisions of law on forfeitures and
delivery of presumptive legitimes
(f) After covering all community
obligations and obligations of
spouses, balance of separate
properties shall be delivered to
respective spouses or their heirs, and
they will also divide into two equal
shares whatever is left of the
community assets, without prejudice
to the provisions of law on forfeitures
and delivery of presumptive legitimes
Procedure [Art. 129]
(1) Prepare an inventory of all properties

(2) Amounts advanced by CPG in payment of personal debts and

obligations shall be credited to the CPG
(3) Reimburse each spouse for the use if his/her exclusive funds in
the acquisition of property or for the value of his or her
exclusive property, the ownership of which has been vested by
law in the conjugal partnership
(4) Debts and obligations of CPG shall be paid out of the conjugal
assets, otherwise both spouses are solidarily liable with their
exclusive property
(5) Remains of the exclusive properties shall be delivered to
respective owner-spouses
(6) Indemnify loss/deterioration of movables belonging to either
spouse, even due to fortuitous event, used for the benefit of the
family
(7) Net remainder of CPG shall constitute the profits which shall
be divided equally between husband and wife except when:
(a) A different proportion or division was agreed upon in the
marriage settlements
(b) There has been a voluntary waiver or forfeiture of such share
as provided in the FC
(8) Presumptive legitimes are delivered to common children
(9) Conjugal dwelling goes to:
(a) Spouse with whom majority of common children choose to
remain (below 7 y.o. = deemed to have chosen the mother)
(b) Whoever the court chooses in case of lack of majority
Rules in case of termination of marriage by death of one of the spouses [Art. 104]:
(1) The community property shall be liquidated in the same proceeding for the settlement of
the estate of the
deceased spouse.
(2) If no such judicial settlement proceeding is instituted, surviving spouse shall liquidate the
community
property either judicially or extra-judicially within one year from the death of the deceased
spouse.
(a) If no liquidation is made within the period, any disposition or encumbrance involving
community property of
the terminated marriage shall be void.
(b) Non-compliance with liquidation procedures would mean that a subsequently contracted
marriage will
follow a regime of complete separation of property.
Procedure for liquidation of properties of two marriages [Art. 104]:
(1) Determine the capital, fruits, and income of each community upon such proof as may be
considered
according to the rules of evidence.
(2) In case of doubt as to which community the existing properties belong, they shall be
divided between two
communities in proportion to the capital and duration of each.
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SEPARATION OF PROPERTY OF THE SPOUSES AND ADMINISTRATION OF COMMON

PROPERTY BY ONE
SPOUSE DURING THE MARRIAGE
Art. 134. In the absence of an express declaration in the marriage settlements, the
separation of property between
spouses during the marriage shall not take place except by judicial order. Such judicial
separation of property may
either be voluntary or for sufficient cause.

(1) VOLUNTARY OR (2) FOR SUFFICIENT CAUSE.

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

Family expenses: Both spouses are liable in proportion to their income; if insufficient, based
on
the current value of their separate properties
Creditors for family expenses: Spouses solidarily liable
Ownership,
administration,
enjoyment, and
disposition
Spouses may own, dispose, possess, and administer separate estates without the consent of
the
other
Administration of exclusive properties may be transferred between spouses when:
1. One spouse becomes the other spouses guardian
2. One spouse is judicially declared an absentee
3. One spouse is given the penalty of civil interdiction
4. One spouse becomes a fugitive
Conveyance between the spouses is allowed under Art. 1490, NCC.
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In Re: voluntary dissolution of CPG of spouses Bernas (1965):

A voluntary separation of properties is not perfected by mere consent but upon the decree
of the court approving the
same. The petition for voluntary separation of property was denied because the children of
the 1st and 2nd marriages
were not informed; the separation of property may prejudice the rights and shares of the
children.
Maquilan v. Maquilan (2007):
A compromise agreement with judicial recognition is valid, pending petition for declaration
of nullity of marriage.
PROPERTY REGIME OF UNIONS WITHOUT MARRIAGE, ARTS. 147-148
Art. 147
Art. 148
Applicability
Man and woman living together as husband
and wife, with capacity to marry (Art.5,
without any legal impediment)
(a) at least 18 years old
(b) not Art. 37 (incestuous void marriage)
(c) not Art. 38 (void marriage by reason of
public policy)
(d) not bigamous
Man and woman living together as husband and wife, NOT
capacitated to marry
(a) Under 18 years old
(b) Adulterous relationship
(c) Bigamous/polygamous marriage
(d) Incestuous marriages under Art. 37
(e) Void marriages by reason of public policy under Art. 38
Other void marriages due to absence of
formal requisite
Salaries and wages
Owned in equal shares Separately owned by parties
Properties acquired through exclusive funds
Remains exclusive, provided there is proof Remains exclusive
Villanueva v. CA (2004): Transfer of certificate
and tax declarations are not sufficient proof

of joint contribution.
Juaniza v. Jose (1979): Property acquired by a married party during
cohabitation with another not his spouse belongs to the CPG of
the marriage, and the other party cannot be held jointly/severally
liable for it
Properties acquired by both through work and industry
Governed by rules on co-ownership Owned in common in proportion to respective
contribution
Properties acquired while living together
Owned in equal shares since it is presumed to
have been acquired through joint efforts
No presumption of joint acquisition. When there is evidence of
joint acquisition but none as to the extent of actual contribution,
there is a presumption of equal sharing.
If one party did not participate in acquisition,
presumed to have contributed through care
and maintenance of family and household
Joaquina v. Reyes (2004): Prohibitions against donations between
spouses must likewise apply to donations between persons living
together in illicit relations
Forfeiture
(1) In favor of their common children
(2) In case of default of or waiver by any or all
of the common children or their
descendants, each vacant share shall
belong to the respective surviving
descendants
In the absence of such descendants, such
share belongs to the innocent party
If one party is validly married to another his/her share in the coowned
properties will accrue to the ACP/CPG of his/her existing
valid marriage
If the party who acted in bad faith is not validly married to another,
his/her share shall be forfeited in the same manner as that
provided in Art 147.
The same rules on forfeiture shall apply if both parties are in bad
faith.
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Yaptinchay v. Torres (1969):

Application of Article 148; there was no proof of actual contribution, while there was a
subsisting marriage apart from
the union without marriage, therefore, the N. Forbes house goes to the CPG of subsisting
marriage
Juaniza v. Jose (1979):
Property acquired by a married party during cohabitation with another not his spouse
belongs to the CPG of the
marriage, and the other party cannot be held jointly/severally liable for it
Villanueva v. CA (2004):
Transfer of certificate and tax declarations are not sufficient proof of joint contribution.
Joaquino v. Reyes (2004):
Prohibitions against donations between spouses must likewise apply to donations between
persons living together in
illicit relations;
Valdez vs. QC-RTC (1996):

Marriages that have been declared void come under the rules of co-ownership under
FC147/148 regardless of the
reason.

The Family

Art. 149. The family, being the foundation of the

nation, is a basic social institution which public policy
cherishes and protects. Consequently, family relations
are governed by law and no custom, practice or
agreement destructive of the family shall be
recognized or given effect.
THE FAMILY AS AN INSTITUTION
ASPECTS OF FAMILY RELATIONS

(1) External Aspect

(a) Governed by law (Art. 149)
(b) Only in this aspect can third persons and the
public interest be concerned
(2) Internal Aspect
(a) Sacred to the family and inaccessible to law
because law must respect the freedom of
action of man
(b) E.g. spiritual relations, sexual relations of
spouses, career or profession of spouses,
profession and career of spouses, practices
and customs of family
FAMILY RELATIONS INCLUDE:
(1) Between husband and wife
(2) Between parents and children
(3) Among other ascendants and descendants
(4) Among brothers and sisters, full or half blood.
General rule: (Art. 151):
No suit between members of the same family shall
prosper.
Except: For a suit between members of the same
family to prosper, the following are required:
(1) Earnest efforts towards a compromise have been
made
(2) Such efforts have failed
(3) Such earnest efforts and the fact of failure must
be alleged
Note: The case will be dismissed if it is shown that no
such efforts were made.
The rules shall not apply to cases, which may not be
the subject of compromise.
EXCEPTIONS TO THE GENERAL RULE CANNOT BE SUBJECT
OF COMPROMISE (ART 2035, CC; VJLAFF)
(1) Civil status of persons,
(2) Validity of marriage or a legal separation,
(3) Any ground for legal separation,
(4) Future support,
(5) Jurisdiction of courts,
(6) Future legitime
Hontiveros v. RTC (1999):
Whenever a stranger is a party in a case involving
family members, the requisite showing of earnest
efforts to compromise is no longer mandatory, as such

inclusion of a stranger takes the case out of the ambit

of Art. 151.
THE FAMILY HOME
CONSTITUTED BY:
(1) Jointly by the husband and the wife
(2) By an unmarried head of a family;

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INCLUDES:

(1) Dwelling house where they and their family reside

(2) The land on which it is situated (Art. 152)
The actual value of the family home shall not exceed,
at the time of the constitution, the amount of Three
hundred thousand pesos (P300,000.00) in urban
areas, and Two hundred thousand pesos
(P200,000.00) in rural areas or such amounts as may
hereafter be fixed by law. (Art. 157)
A person may constitute and be the beneficiary of
only one family home (Art. 161)
The provisions of the Chapter on Family Home shall
govern existing family residences insofar as said
provisions are inapplicable (Art. 162)
GUIDELINES:
(1) It is deemed constituted from time of actual
occupation as a family residence
(2) It must be owned by person constituting it
(3) It must be permanent
(4) Rule applies to valid and voidable and even to
common-law marriages under Arts.147 and 148
(5) It continues despite death of one or more spouses
or unmarried head of family for 10 years or as
long as there is a minor beneficiary (Art.159)
(6) Can only constitute one family home
General rule: The family home is exempt from (EFA)
from the time of its constitution and so long as any of
its beneficiaries actually resides therein (Art. 153):
(1) Execution
(2) Forced sale
(3) Attachment
Exceptions in the exemption of the family home from
execution (Art. 155)
(1) Nonpayment of taxes.
(2) Debts incurred prior to the constitution of the
family home.
(3) Debts secured by mortgages on the premises
before or after such constitution.
(4) Debts due to laborers, mechanics, architects,
builders, materialmen and others who have
rendered service or furnished material for the
construction of the building.
BENEFICIARIES OF THE FAMILY HOME (ART. 154)
(1) Husband and wife, or an unmarried person who is
the head of the family
(2) Parents (may include parent-in-laws),
ascendants, descendants, brothers and sisters
(legitimate/illegitimate), who are living in the

family home and who depend on the head of the

family for support
REQUISITES TO BE A BENEFICIARY (RLD)
(1) The relationship is within those enumerated
(2) They live in the family home
(3) They are dependent for legal support on the head
of the family
REQUIREMENTS FOR THE SALE, ALIENATION, DONATION,
ASSIGNMENT, OR ENCUMBRANCE OF THE FAMILY HOME
(ART. 158)
(1) the written consent of the person constituting it,
(2) his/her spouse, and
(3) majority of the beneficiaries of legal age
Note: If there is a conflict, the Court will decide.
In case of death of one or both spouses or the
unmarried head of the family (Art. 159):
The family home shall continue despite the death of
one or both spouses or of the unmarried head of the
family for a period of ten years, or as long as there is
a minor beneficiary.
The heirs cannot partition the home unless the court
finds compelling reasons therefore.
REQUISITES FOR CREDITOR TO AVAIL OF THE RIGHT UNDER
ARTICLE 160 (If a claim of a creditor is not among the

exceptions mentioned in Art. 155 and has reasonable

grounds to believe that the family home is worth
more than the amount fixed in Art. 157)
Requisites:
(1) He must be a judgment creditor;
(2) His claim is not among those excepted under
Article155, and
(3) He has reasonable grounds to believe that the
family home is worth more than the maximum
amount fixed in Art. 157.
Procedure to avail of right under Art. 160
(1) The creditor must file a motion in the court
proceeding where he obtained a favorable
decision for a writ of execution against the family
home.
(2) There will be a hearing on the motion where the
creditor must prove that the actual value of the
family home exceeds the maximum amount fixed
by the FC either at the time of its constitution or
as a result of improvements introduced thereafter
its constitution.
(3) If the creditor proves that the actual value
exceeds the maximum amount the court will
order its sale in execution.
(4) If the family home is sold for more than the value
allowed, the proceeds shall be applied as follows:
(a) First, the obligation enumerated in Article 157
must be paid

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(b) Then the judgment in favor of the creditor will

be paid, plus all the costs of execution

(c) The excess, if any, shall be delivered to the

judgment debtor
Versola v. Mandolaria (2006):
The proof that the house is the family home must be
alleged against creditors; Applied the rule in Art. 160,
FC.
Patricio v. Dario III (2006):
WON the grandson of the deceased is a beneficiary
according to Art. 154 FC. The beneficiary should satisfy
all requisites; he must be dependent on the head of the
family.
Arriola v. Arriola (2008):
This case involves half-brothers and a second wife; the
family home includes the land it is built on. The rule in
Art. 159 of the FC regarding the 10 year period is
applied, the parties involved must wait.

Paternity and Filiation

KINDS OF FILIATION (ARTS. 163, 164, 165):

(1) Natural
(a) Legitimate
(b) Illegitimate
(2) Legal Fiction (Adoption)
LEGITIMATE CHILDREN
WHO ARE LEGITIMATE CHILDREN (ART. 164)
Those conceived or born during the marriage of
parents either by natural means or by artificial
insemination
Natural/Biological
[Liyao v. Liyao (2002)]: A child conceived or born
during a valid marriage is presumed to belong to that
marriage, regardless of the existence of extramarital
relationships.
Artificial Insemination (Art. 164)
Requisites to be considered legitimate:
(a) Artificial insemination made on wife
(b) Sperm comes from any of the following:
(1) Husband
(2) Third Person Donor
(3) Husband and third person donor
(c) In case of donor sperm, husband and wife must
authorize/ratify insemination in a written
instrument
(1) Executed & signed by husband and wife
before the birth of the child.
(2) Recorded in the civil registry together with the
birth certificate of the child.
[Tolentino]: Dual consent is required whether the
semen used comes from the husband or a third person
donor
WHO ARE ILLEGITIMATE CHILDREN

General rule: Those conceived and born outside of a

valid marriage. [Art. 165]
Exceptions:
(1) Children of marriages void under Art. 36
(psychological incapacity).

(2) And under Art. 53 (the second marriage of a

widow or widower who has not delivered to his or
her children by his or her first marriage the
legitime of said children). (Sempio-Dy)
De Castro v. Assidao-De Castro, (2008):
Common children born before the annulment are
legitimate, and therefore entitled to support from each
of the spouses.
IMPUGNING LEGITIMACY

Grounds for impugning legitimacy of a child are [Art.

166]:
(1) Physical impossibility for the husband to have
sexual intercourse with his wife within the first
120 days of the 300 days which immediately
preceded the child's birth due to:
(a) Physical incapacity of the husband to have
sexual intercourse with his wife
(b) Husband and wife were living separately as to
make sexual intercourse impossible
(c) Serious illness of the husband absolutely
preventing sexual intercourse
(2) Other biological or scientific reasons, except
Artificial Insemination
(3) And in case of Artificial Insemination, the written
consent of either parent was vitiated through
fraud, violence, mistake, intimidation, or undue
influence
Macadangdang v. CA (1980):
Mere proximate separation between the spouses is not
sufficient physical separation as grounds for
impugning legitimacy.
Andal v. Macaraig (1951):
Serious illness of the husband which absolutely
prevented him from having sexual intercourse with his
wife, like if the husband was already in comatose or a
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vegetable, or sick with syphilis in the tertiary stage so

that copulation was not possible. But tuberculosis,
even in its most crucial stage, does not preclude
copulation between the sick husband and his wife.
Jao v. CA (1987):
Blood-type matching is an acceptable means of
impugning legitimacy, covered by Art. 166(2), under
"biological or other scientific reasons." But this is only
conclusive of the fact of non-paternity.
Legitimacy with regard to the mother:
(1) Child considered legitimate although [Art. 167]:
(a) Mother may have declared against its
legitimacy
(b) Mother may have been sentenced as an
adulteress (also applies to wife who was
raped)
(2) If the marriage is terminated and the mother
contracted another marriage within 300 days
after the termination of the former marriage, the

rules shall govern in the absence of proof to the

contrary [Art 168]:
(a) If child born before 180 days after the
solemnization of the subsequent marriage
child is considered conceived during the
former marriage, provided it be born within
300 days after termination of the former
marriage
(b) If child born after 180 days following the
celebration of the subsequent marriage
child is considered conceived during such
marriage, even if it be born within 300 days
after the termination of the former marriage
Note: The legitimacy or illegitimacy of a child born
after 300 days following the termination of the
marriage burden of proof upon whoever alleges
the status. [Art. 169]
[Tolentino:] If nobody asserts the legitimacy or
illegitimacy of the child described in Art. 169, the
child should be considered illegitimate unless
legitimacy is proved. Legitimacy cannot be presumed
here since the birth was beyond the 300-day period
of gestation. While it goes against the policy of law
to lean in favor of legitimacy, this interpretation is
better than the anomalous situation created by Art.
169, which is a child without a status.
ACTION FOR IMPUGNING LEGITIMACY [ARTS. 170 AND 171]
May be brought within 1, 2, or 3 years from the
knowledge of the birth, or the knowledge of
registration of birth.
(1) Within 1 year if husband or any heirs reside in
the same city or municipality where the child was
born or his birth was recorded.
(2) Within 2 years if the husband or all heirs live in
the Philippines but do not reside in the same city
or municipality where the child's birth took place
or was recorded
(3) Within 3 years if the husband or all heirs live
outside the Philippines when the child's birth took
place or was recorded in the Philippines
If the birth of the child has been concealed or was
unknown to the husband, the above periods shall be
counted:
(1) From the discovery or knowledge of the birth of
the child, or
(2) From the discovery or knowledge of its
registration,
(3) Whichever is earlier.
General rule: Only the husband can impugn the
legitimacy of a child. If he does not bring an action
within the prescribed periods, he cannot file such
action anymore thereafter, and this is also true with
his heirs.
Exception: That the heirs of the husband may file the
action or continue the same within the periods

prescribed in Art. 170 [Art. 171]:

(a) If the husband died before the expiration of the
period fixed for bringing his action
(b) If he should die after the filing of the complaint
without having desisted therefrom
(c) If the child was born after the death of the
husband.
Sayson v. CA (1992): Legitimacy can only be attacked
directly.
PROOF OF FILIATION
Legitimate children may establish their filiation by
any of the following [Art. 172]:
(1) Primary Evidence
(a) Their record of birth appearing in the civil
registry.
(b) An admission of his filiation (legitimate or
illegitimate) by his parent or parents in a
public document or a private handwritten
instrument and signed by said parent or
parents
(2) Secondary Evidence
(a) Proof of open and continuous possession of
status as legitimate or illegitimate child
(b) Any other means stated by the rules of court
or special laws
Note: Only in the absence of primary evidence can
secondary evidence be admitted
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ACTION FOR CLAIMING FILIATION [ART.

173]:
(a) The child can bring the action during his or her
lifetime, and once commenced such action
survives even after the death of the parents. The
action does not prescribe as long as he lives.
(b) If the child dies during minority or in a state of
insanity, such action shall be transmitted to his
heirs, who shall have a period of five years within
which to institute the action.
RIGHTS OF LEGITIMATE CHILDREN [ART. 174]:
(a) To bear the surnames of the father and the
mother, in conformity with the provisions of the
Civil Code on Surnames
(b) To receive support from their parents, their
ascendants, and in proper cases, their brothers
and sisters, in conformity with the provisions of
this Code on Support
(c) To be entitled to the legitimate and other
successional rights granted to them by the Civil
Code
ILLEGITIMATE CHILDREN
Illegitimate children may establish their illegitimate
filiation in the same way and on the same evidence
(primary or secondary) as legitimate children. [Art.
175]
ACTION FOR CLAIMING FILIATION [ART. 175]:
(a) For actions based on primary evidence, the same

periods stated in Art. 173 apply.

(b) For actions based on secondary evidence, the
action may only be brought during the lifetime of
the alleged parent.
Mendoza v. Melia (1966):
Baptismal certificates are given probative value only
for births before 1930. Birth certificates must be signed
by the parents and sworn for it to be admitted as
evidence.
Baluyut v. Baluyut (1990):
Unsigned birth certificates are not evidence of
recognized filiation.
Acebedo v. Arquero (2003):
Baptismal certificates are only conclusive of the
sacrament administered, and cannot be used as proof
of filiation.
Lim v. CA (1975):
Marriage certificates cannot be used as proof of
filiation.
Jison v. CA (1998):
Rule 130, Sec. 40 is limited to objects commonly
known as family possessions reflective of a family's
reputation or tradition regarding pedigree like
inscriptions on tombstones, monuments, or coffin
plates.
Eceta v. Eceta (2004):
Signature of the father on the birth certificate is
considered as an acknowledgement of paternity and
mere presentation of a duly authenticated copy of such
certificate will successfully establish filiations.
Heirs of Rodolfo Baas v. Heirs of Bibiano Baas
(1985):
"Su padre [Your father]" ending in a letter is only proof
of paternal solicitude and not of actual paternity.
Signature on a report card under the entry of
"Parent/Guardian" is likewise inconclusive of open
admission.
De Jesus v. Syquia (1933):
By "open and continuous possession of the status of a
legitimate child" is meant the enjoyment by the child
of the position and privileges usually attached to the
status of a legitimate child, like bearing the paternal
surname, treatment by the parents and family of the
child as legitimate, constant attendance to the child's
support and education, and giving the child the
reputation of being a child of his parents.
Agustin v. CA (2005):
DNA evidence can be used as proof of paternity.
De Jesus v. Estate of Decedent Juan Gamboa Dizon
(2001):
The due recognition of an illegitimate child in a record
of birth, a will, a statement before a court of record, or
in any authentic writing, is in itself a consummated act
of acknowledgement of the child, and no further court
action is required.

Gono-Javier vs. Court of Appeals (1994):

Mere possession of status as an illegitimate child does
not make a recognized illegitimate child but is only a
ground for bringing an action to compel judicial
recognition by the assumed parent.
Herrera v. Alba (2005):
In assessing the probative value of DNA evidence,
therefore, courts should consider, among other things,
the following data:
(a) How the samples were collected,
(b) How they were handled,
(c) The possibility of contamination of the samples,
(d) The procedure followed in analyzing the samples,
(e) Whether the proper standards and procedures were
followed in conducting the tests,
(f) The qualification of the analyst who conducted the
tests.
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Estate of Rogelio Ong v. Diaz (2007):

DNA evidence can still be used even after the death of
the parent.
Gotardo v. Buling (2012):
There are four significant procedural aspects of a
traditional paternity action that parties have to face:
a prima facie case, affirmative defenses, presumption
of legitimacy, and physical resemblance between the
putative father and the child. A prima facie case exists
if a woman declares supported by corroborative
proof that she had sexual relations with the putative
father; at this point, the burden of evidence shifts to
the putative father. Further, the two affirmative
defenses available to the putative father are: (1)
incapability of sexual relations with the mother due to
either physical absence or impotency, or (2) that the
mother had sexual relations with other men at the
time of conception.
Perla v. Baring and Perla (2012):
To prove open and continuous possession of the
status of an illegitimate child, there must be evidence
of the manifestation of the permanent intention of the
supposed father to consider the child as his, by
continuous and clear manifestations of parental
affection and care, which cannot be attributed to pure
charity.
Meanwhile, the lack of participation of the supposed
father in the preparation of a baptismal certificate
renders this document incompetent to prove paternity.
Baptismal certificates are per se inadmissible in
evidence as proof of filiation and they cannot be
admitted indirectly as circumstantial evidence to prove
the same
RIGHTS OF ILLEGITIMATE CHILD [ART. 176]:
(a) Use the surname and be under the parental
authority of the mother
(b) However, may use the surname of their father if

(1) Their filiation has been expressly recognized

by the father through the record of birth
appearing in the civil register.
(2) There is an admission in a public document or
private handwritten instrument made by the
father.
(3) Provided, the father has the right to institute
an action before the regular courts to prove
non-filiation during his lifetime [RA 9255]
(c) Shall be entitled to support in conformity with the
Family Code
(d) Legitime shall consist of one-half of the legitime
of a legitimate child. Except for such
modification, all other provisions of the Civil Code
governing successional rights shall remain in
force.
LEGITIMATED CHILDREN
"Legitimated" children are illegitimate children who
because of the subsequent marriage of their parents
are, by legal fiction, considered legitimate.
TO BE CAPABLE OF LEGITIMATION:
(1) The child must have been conceived and born
outside of wedlock; and
(2) General rule: The parents, at the time of the child's
conception, were not disqualified by any
impediment to marry each other (Art. 177).
Exception: RA 9858 - Children born to parents
who were so disqualified only because either or
both of them were below eighteen (18) years of
age at the time of childs conception may be
legitimated.
PROCEDURE:
(a) Legitimation shall take place by a subsequent
valid marriage between the parents. The
annulment of a voidable marriage shall not affect
the legitimation. [Art. 178]
(b) Effects of legitimation shall retroact to the time of
the childs birth [Art. 180]
(c) Legitimation of children who died before the
celebration of the marriage shall benefit their
descendants [Art. 181]
GROUNDS FOR IMPUGNING LEGITIMATION:
(1) The subsequent marriage of the child's parents is
void.
(2) The child allegedly legitimated is not natural.
(3) The child is not really the child of the alleged
parents. (Sempio-Dy)
RIGHTS:
The same as those of legitimate children [Art. 179]
IMPUGNING LEGITIMATION [ART. 182]
(1) May be made only by those who are prejudiced in
their rights
(2) Within five years from the time their cause of
action accrues

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Adoption
Legitimation
Adoption
Legal effect
The law merely makes
legal what exists by
nature
The law merely creates by
fiction a relation which
did not in fact exist
Persons affected
Natural Children Strangers (generally)
Procedure
Extrajudicial acts of
parents
Always by judicial decree
Who should apply
Both parents Both parents, but with
exceptions allowing only
one of them to apply [RA
85520]
Effect on parent-child relationship
Same status and rights
with that of a legitimate
child not only in relation
to the legitimizing
parents but also to
other relatives
Creates a relationship
only between the child
and the adopting parents
ADOPTION is a juridical act, which creates between
two persons a relationship similar to that which
results from legitimate paternity and filiation.
RA 8552 DOMESTIC ADOPTION LAW
WHO CAN ADOPT

(1) Filipino Citizens

(a) Of legal age
(b) With full civil capacity and legal rights
(c) Of good moral character
(d) Has not been convicted of any crime involving
moral turpitude
(e) Emotionally and psychologically capable of
caring for children
(f) At least sixteen (16) years older than adoptee,
except when adopter is biological parent of
the adoptee or is the spouse of the adoptees
parent
(g) In a position to support and care for his/her
children in keeping with the means of the
family
(2) Aliens
Same for Filipinos provided further that:
(1) At least 27 years old
(2) His/her country has diplomatic relations with

the Philippines
(3) Has been living continuously for 3 years
(provided that absences not exceeding 60
days per 1 year for professional, business, or
emergency reasons are allowed) in RP prior to
the filing of application and maintains such
residence until the decree is entered
(4) Has been certified by his/her diplomatic or
consular office or any appropriate government
agency that he/she has the legal capacity to
adopt in his/her country
(5) His/her government allows the adoptee to
enter his/her country as his/her adoptee
(6) Has submitted all the necessary clearances
and such certifications as may be required
**Items 3, 4 and 5 may be waived under the
following circumstances:
(a) Adopter is a former Filipino Citizen who seeks to
adopt a relative within the 4th degree of
consanguinity or affinity
(b) Adopter seeks to adopt the legitimate or
illegitimate child of his/her Filipino spouse
(c) Adopter is married to a Filipino Citizen and seeks
to adopt jointly with his/her spouse a relative
within the 4th degree of consanguinity or affinity
of the Filipino spouse
(3) Guardians
With respect to theirs ward after the termination
of the guardianship and clearance of his/her
accountabilities.
Husband and wife shall adopt jointly, EXCEPT:
(1) If one spouse seeks to adopt the legitimate child
of the other
(2) If one of the spouse seeks to adopt his/her
illegitimate child provided that other spouse has
signified his/her consent
(3) If spouses are legally separated from each other
Note: If spouses jointly adopt, parental authority
shall be exercised jointly
WHO CAN BE ADOPTED

(a) Minor who has been administratively or judicially

declared available for adoption
(b) Legitimate child of one spouse by another
(c) Illegitimate child by a qualified adopter to
improve the childs status to that of legitimacy
(d) A person of legal age if, prior to the adoption,
said person has been consistently considered
and treated by the adopter(s) as his/her child
since minority
(e) A child whose previous adoption has been
rescinded
(f) A child whose biological or adoptive parent(s)
has died, provided that no proceedings shall be
initiated within 6 months from the time of death
of said parent(s)
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Persons whose written consent is necessary for

adoption [Sec. 9]
(1) The prospective adoptee if 10 years or older
(2) The prospective adoptees biological parents,
legal guardian or the government instrumentality
or institution that has custody of the child
(3) The prospective adopters legitimate and adopted
children who are 10 years or older
(4) The prospective adopters illegitimate children, if
any, who are 10 years or older and living with
them
(5) The spouse, if any, of the person adopting or to be
adopted.
Note: A decree of adoption shall be effective as of the
date the original petition was filed. It also applies in
case the petitioner dies before the issuance of the
decree of adoption to protect the interest of the
adoptee.
PRE-ADOPTION PROCEDURES
(1) Voluntary Commitment of biological mother
wanting to put her child up for adoption
(2) Involuntary Commitment of abandoned or
neglected child
Notes:
(1) Abandoned child no proper parental
care/guidance; or parents have deserted him/her
for at least 3 continuous months, including
foundlings
(2) Neglected child his basic needs have been
deliberately unattended or inadequately
attended within 3 continuous months either by:
(a) Physical Neglect child is malnourished, illclad,
without proper shelter, or without proper
provisions
(b) Emotional Neglect child is maltreated,
raped, seduced, exploited, overworked, or in
moral danger
(3) Required supporting documents for a petition for
the declaration of involuntary commitment:
(a) Social Case Study Report by DSWD / LGU /
institution charged with childs custody
(b) Proof of efforts to locate the childs
parents/known relatives
(1) Written certification that a local/national
radio/TV case was aired on 3 different
occasions
(2) Publication in 1 newspaper of general
circulation
(3) Police report / barangay certification of
due diligence
(4) Returned registered mail to last known
address of parents
(c) Birth certificate, if available
(d) Recent photo and photo upon
abandonment of child

ADOPTION PROCEDURES

Inquiry of prospective adopters at DSWD

Attendance of DSWD Adoption Fora and
Seminars (include counseling)
Application for Adoption
Counseling on her options other than adoption
Explaining to her the implications of losing her
parental authority over the child
Continuing services shall be provided after
relinquishment to cope with feelings of loss, etc.
and other services for his/her reintegration to the
community
Biological parent(s) who decide to keep the child
shall be provided with adequate services and
assistance to fulfill their parental responsibilities
Biological parent(s) who decide to put the child
for adoption shall sign the Deed of Voluntary
Commitment (DVC), which shall be rescissible
within 3 months from signing of the same
Filing of a petition at Regional DSWD in the form
of an affidavit and with the required supporting
documents
Posting of the petition, then recommendation by
the Regional Director of the DSWD (5 days each)
Issuance of certification by DSWD Secretary
declaring the child legally available for adoption

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Note: After the decree of adoption, the court may

also issue a travel authority, if needed; DSWD to
provide post adoption services
WHO MAY NOT ADOPT/ BE ADOPTED
Art. 184 (as amended by RA 8552)
The following may not adopt:
(1) The guardian, with respect to the ward prior to
the approval of the final accounts rendered upon
the termination of the guardianship
(2) Any person convicted of a crime of moral
turpitude
Art. 187
The following may not be adopted:
(1) A person of legal age unless he is a natural child
of the adopter or of his/her spouse; or he was
treated as a natural child since minority
(2) An alien whose government has no diplomatic
relations with the Philippines
(3) A person already adopted unless his adoption has
been previously revoked/rescinded
RIGHTS OF AN ADOPTED CHILD

(a) Parental Authority

All legal ties between biological parents and
adoptee are severed, and the same shall be
vested on the adopter, except if the biological
parent is the spouse of the adopter. [Art. 189 as
amended]
(b) Legitimacy

The adoptee shall be considered legitimate

son/daughter of the adopter for all intents and
purposes, and shall be entitled to all the rights
and obligations provided by law to legitimate
children born to them without discrimination of
any kind. [Art. 189 as amended]
(c) Succession
Adopter and adoptee shall have reciprocal rights
of succession without distinction from legitimate
filiation, in legal and intestate succession. If
adoptee and his/her biological parents had left a
will, the law on testamentary succession shall
govern. [Art. 189 as amended]
Art. 190 as amended. Rules on legal or intestate
succession to the estate of the adoptee:
(1) Legitimate and illegitimate children, descendants
and the surviving spouse of the adoptee shall inherit
in accordance with the ordinary rules of
legal/intestate succession
(2) When the surviving spouse OR illegitimate children
AND adopters concur, they shall inherit on a 50-50
basis
(3) When the surviving spouse AND illegitimate
children AND adopters concur, they shall inherit on a
1/3-/1/3-1/3 basis
(4) When only adopters survive, they shall inherit
100% of the estate
(5) When only collateral blood relatives survive,
ordinary rules of legal or intestate succession shall
apply
Art. 365, NCC. An adopted child shall bear the
surname of the adopter.
RESCISSION OF ADOPTION

Adoptee may request for rescission, with the

assistance of DSWD if he/she is a minor or over 18
but incapacitated, based on the ff. grounds:
(1) Repeated physical and verbal maltreatment by
adopters despite having undergone counseling
(2) Attempt on life of adoptee
(3) Sexual assault or violence
Matching
Placement
Case Study Report
Supervised Trial Custody
Home Study Report
Recommendation and Consent of DSWD
Petition for Adoption
Adoption Decree
Certificate of Availability for Adoption
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(4) Abandonment or failure to comply with parental

obligations
Note: Adoption, being in the best interest of the
child, shall not be subject to rescission by the
adopter(s). However, the adopter(s) may disinherit

the adopted based on causes enumerated in Art. 919

of the NCC:
(1) Conviction of an attempt on the life of the
adopter
(2) Having accused, without grounds, the adopter of
a crime punishable by imprisonment for more
than 6 years
(3) Conviction of adultery/concubinage with the
adopters spouse
(4) Having caused the adopter to make or change a
will by force, intimidation or undue influence
(5) Refusal without just cause to support the adopter
(6) Maltreatment of the adopter by word/deed
(7) Living a dishonorable/disgraceful life
(8) Conviction of a crime which carries with it the
penalty of civil interdiction
Effects of Rescission [Sec. 20]:
(1) Parental authority of the adoptee's biological
parents, if known, OR the legal custody of the
DSWD shall be restored if the adoptee is still a
minor or incapacitated
(2) Reciprocal rights and obligations of the adopters
and the adoptee shall be extinguished
(3) Court shall order the Civil Registrar to cancel the
amended certificate of birth of the adoptee and
restore his/her original birth certificate
(4) Succession rights shall revert to its status prior to
adoption, but only as of the date of judgment of
judicial rescission
(5) Vested rights prior to judicial rescission shall be
respected
Note: Rescission contemplates a situation where the
adoption decree remains valid until its termination
RECTIFICATION OF SIMULATED BIRTH

Simulation of birth is the tampering of LCR records

to make it appear that a certain child was born to a
person who is not his/her biological parent, causing
said child to lose his true identity/status
Sec. 21-b (RA 8552)
Any person who shall cause the fictitious registration
of the birth of a child under the name(s) of a
person(s) who is not his/her biological parent(s) shall
be guilty of simulation of birth, and shall be
punished by prision mayor in its medium period and
a fine not exceeding Fifty thousand pesos
(P50,000.00).
Sec. 22 (RA 8552)
A person who has, prior to the effectivity of RA 8552,
simulated the birth of a child shall not be punished
for such act, PROVIDED:
(a) The simulation was for the childs best interest
(b) Child has been treated consistently as his own
(c) Petition filed within 5 years of RA 8552s
effectivity (2003)
Three-in-one Procedure

(a) Correction of entries in birth certificate

(b) Declaration of abandonment
(c) Adoption decree
RA 8043 THE LAW ON INTER-COUNTRY
ADOPTION
INTER-COUNTRY ADOPTION refers to the socio-legal
process of adopting a Filipino child by a foreigner or
a Filipino citizen permanently residing abroad where
the petition is filed, the supervised trial custody is
undertaken, and the decree of adoption is issued
outside the Philippines
WHO CAN ADOPT

Any foreign national or a Filipino citizen permanently

residing abroad who has the qualifications and none
of the disqualifications under the Act may file an
application if he/she:
(a) Is at least 27 years of age and at least 16 years
older than the child to be adopted, at the time of
application unless the adopter is the parent by
nature of the child to be adopted or the spouse of
such parent
(b) If married, his/her spouse must jointly file for the
adoption
(c) Has the capacity to act and assume all rights and
responsibilities of parental authority under his
national laws, and has undergone the
appropriate counseling from an accredited
counselor in his/her country
(d) Has not been convicted of a crime involving moral
turpitude
(e) Is eligible to adopt under his/her national law
(f) Is in a position to provide the proper care and
support and to give the necessary moral values
and example to all his children, including the
child to be adopted
(g) Agrees to uphold the basic rights of the child as
embodied under Philippine laws, the U.N.
Convention on the Rights of the Child, and to
abide by the rules and regulations issued to
implement the provisions of this Act
(h) Comes from a country with whom the Philippines
has diplomatic relations and whose government
maintains a similarly authorized and accredited
agency and that adoption is allowed under
his/her national laws
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WHO CAN BE ADOPTED

(a) Only a legally-free child may be the subject of

inter-country adoption.
(b) A legally-free child is one who has been
voluntarily or involuntarily committed to the
DSWD of the Philippines, in accordance with the
Child and Youth Welfare Code.
(c) No child shall be matched to a foreign adoptive
family unless it is satisfactorily shown that the

child cannot be adopted locally.

(d) In order that such child may be considered for
placement, the following documents must be
submitted to the Board:
(a) Child study
(b) Birth Certificate / Foundling Certificate
(c) Deed of Voluntary Commitment/ Decree of
Abandonment/ Death Certificate of parents
(d) Medical Evaluation / History
(e) Psychological Evaluation, as necessary
(f) Recent photo of the child
Tamargo v. CA (1992):
Where the petition for adoption was granted after the
child had shot and killed a girl, the Supreme Court did
not consider that retroactive effect may be given to the
decree of adoption so as to impose a liability upon the
adopting parents accruing at a time when adopting
parents had no actual or physically custody over the
adopted child. Retroactive effect may perhaps be given
to the granting of the petition for adoption where such
is essential to permit the accrual of some benefit or
advantage in favor of the adopted child. In the instant
case, however, to hold that parental authority had
been retroactively lodged in the adopting parents so as
to burden them with liability for a tortuous act that
they could not have foreseen and which they could not
have prevented would be unfair and unconscionable.
Lazatin v. Campos (1979):
Adoption is a juridical act, proceeding in rem. Because
it is artificial, the statutory requirements in order to
prove it must be strictly carried out. Petition must be
announced in publications and only those proclaimed
by the court are valid. Adoption is never presumed.
Santos v. Aranzanso (1966):
Validity of facts behind a final adoption decree cannot
be collaterally attacked without impinging on that
courts jurisdiction.
DSWD v. Belen (1997):
Participation of the appropriate government
instrumentality in performing the necessary studies
and precautions is important and is indispensable to
assure the childs welfare.
Landingin v. Republic (2006)
Consents for adoption must be written and notarized.
Sayson v. CA (1992):
Adopted children have a right to represent their
adopters in successional interests. (Although an
adopted child shall be deemed to be a legitimate child
and have the same rights as the latter, these rights do
not include the right of representation. The
relationship created by the adoption is between only
the adopting parents and the adopted child. It does
not extend to the blood relatives of either party.)
Republic v. Hernandez (1996):
The change of surname of the adoptee as a result of

the adoption and to follow that of the adopter does

not lawfully extend to or include the proper or given
name. The birth certificate, as it appears in the civil
register, contains the official name. It does not matter
if the mother, with all intention to abandon it later,
named the child for the sake of naming it. If they really
want to change the name, they must institute another
action under Rule 103 of the Rules of Court.

Support

WHAT IT COMPRISES
Consists of everything indispensable for sustenance,
dwelling, clothing, medical attendance, education
and transportation, in keeping with the financial
capacity of the family. [Art. 194]
(a) Education includes a persons schooling or
training for some profession, trade or vocation.
[Art. 194]
(b) Transportation includes expenses in going to and
from school, or to and from place of work. [Art.
194]
(c) The right and duty to support, especially the right
to education, subsists even beyond the age of
majority. [Art. 194]
WHO ARE OBLIGED
TO SUPPORT EACH OTHER:
(a) Spouses;
(b) Legitimate ascendants and descendants;
(c) Parents and their children (legitimate and
illegitimate) and the children of the latter
(legitimate and illegitimate);
(d) Legitimate brothers and sisters, whether of full or
half-blood; [Art. 195]
(e) Illegitimate brothers and sisters, whether of full
or half-blood, EXCEPT when the need for support
of one (of age) is due to a cause imputable to
his/her fault or negligence. [Art. 196]

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Note: Both legitimate and illegitimate children are

entitled to support.
PROPERTIES ANSWERABLE FOR SUPPORT

From the separate property of the obligor. If no

separate property, the ACP/CPG (if financially
capable) shall advance the support, to be deducted
from the obligors share upon liquidation of such
regime. [Art. 197]
ORDER OF SUPPORT

If there are multiple obligors (SDAB)

(1) Spouses
(2) Descendants, nearest in degree
(3) Ascendants, nearest in degree
(4) Brothers and Sisters [Art. 199]
[Tolentino]: The order of liability among ascendants
and descendants would be: (1) legitimate children
and descendants, (2) legitimate parents and
ascendants, (3) illegitimate children and their

descendants.
When two or more are obliged to give support, the
payment shall be divided between them IN
PROPORTION to their resources;
Also, in case of URGENT NEED and by special
circumstances, judge may order only one obligor to
furnish support without prejudice to reimbursement
from other obligors of the share due from them (Art.
200).
If there are multiple recipients and only one obligor,
and the latter has no sufficient means to satisfy all
claims:
(1) Observe order in Article 199 (SDAB) as to whose
claim shall be satisfied first;
(2) But if the concurrent obligees are the spouse and
a child subject to parental authority, the child
shall be preferred. [Art. 200]
[Tolentino]: The above preference given to a child
under parental authority over the spouse should
prevail only if the person obliged to support pays it
out of his own separate property. So if the support
comes from ACP or CPG, the above rule of
preference for the child does not apply.
Pelayo v. Lauron (1909):
Even if the parents-in-law were the ones who called for
the physicians services for the childbirth of their
daughter-in-law, it is the womans husband who is
bound to pay the fees due to the physician.
Lacson v. San Jose-Lacson (1968):
Man is still liable for support in arrears since the
mother advanced it from a stranger (the uncle of the
daughters).
Lacson v. Lacson (2006):
Acknowledgment of and commitment to comply with
support obligation through a note in his own
handwriting is proof that a demand was made.
Gotardo v. Buling (2012):
The amount of support is variable and, for this reason,
no final judgment on the amount of
support is made as the amount shall be in proportion
to the resources or means of the giver and the
necessities of the recipient.
STRANGER GIVES SUPPORT

When, WITHOUT THE KNOWLEDGE of the person

obliged to give support, it is given by a stranger, the
stranger has the right to claim the same from the
person obliged, unless it appears that he gave it
without intention of being reimbursed. [Art. 206]
PERSON OBLIGED REFUSES OR FAILS TO GIVE SUPPORT

When the person obliged to give support UNJUSTLY

REFUSES OR FAILS to give support when urgently
needed, any third person may furnish support to the
needy individual, with right of reimbursement from
the person obliged to give support. This particularly
applies when the father or mother of a minor child
unjustly refuses to support or fails to give support to

the child when urgently needed. [Art. 207]

CONTRACTUAL SUPPORT OR THAT GIVEN BY WILL

The excess in amount beyond that required for legal

support shall be subject to levy on attachment or
execution. [Art. 208]
Reason: The amount of support agreed upon in the
contract or given in the will can be more than what
the recipient needs (Sempio-Diy).
Furthermore, contractual support shall be subject to
adjustment whenever modification is necessary due
to changes in circumstances manifestly beyond the
contemplation of the parties. [Art. 208]
SUPPORT DURING MARRIAGE LITIGATION
Pending legal separation or annulment, and for
declaration of nullity, support (pendente lite) for
spouses and children will come from the ACP/CPG.
After final judgment granting the petition, mutual
support obligation between spouses ceases. (But in
legal separation court may order guilty spouse to
give support to innocent spouse.) [Art. 198]

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Note: De facto separation does not affect the ACP,

except that the spouse who leaves the conjugal
home without just cause shall not be entitled to
support. [Art. 100]
AMOUNT
The amount of support is in proportion to the means
of the provider and the needs of the receiver, and can
be reduced or increased if such circumstances
change. [Arts. 201, 202]
WHEN DEMANDABLE
(a) The obligation to give support shall be
DEMANDABLE from the time the person who has
a right to receive the same needs it for
maintenance, but it shall not be PAYABLE except
from the date of judicial or extra-judicial demand.
[Art. 203]
(b) Support pendente lite may be claimed in
accordance with the Rules of Court. [Art. 203]
(c) Payment shall be made within the first five days
of each corresponding month. When the recipient
dies, his heirs shall not be obliged to return what
he has received in advance. [Art. 203]
OPTIONS
(a) Payment of the amount; or
(b) Receiving and maintaining the recipient in the
home of the provider, unless there is a legal or
moral obstacle for doing so.
ATTACHMENT
The right to receive support as well as any money or
property obtained as such support shall not be levied
upon on attachment or execution. (Art. 205)
[Tolentino:] This is to protect that which the law gives
to the recipient against want and misery.

Parental Authority
GENERAL PROVISIONS
Parental authority is the mass of rights and
obligations which parents have in relation to the
person and property of their children until their
emancipation, and even after this under certain
circumstances (Manresa).
PARENTAL AUTHORITY INCLUDES [ART. 209]:
(1) The caring for and rearing of children for civic
consciousness and efficiency;
(2) The development of the moral, mental and
physical character and well-being of said children
PARENTAL AUTHORITY AND RESPONSIBILITY MAY NOT BE
RENOUNCED OR TRANSFERRED EXCEPT IN THE CASES
AUTHORIZED BY LAW. [ART. 210]
CASES WHEN PARENTAL AUTHORITY AND RESPONSIBILITY
MAY BE TRANSFERRED OR RENOUNCED:

(a) Adoption;
(b) Guardianship; or
(c) Commitment of the child in an entity or
institution engaged in child care or in a childrens
home
RULES AS TO THE EXERCISE OF PARENTAL AUTHORITY:
(a) Jointly exercised by the father and mother over
their common children, but in case of
disagreement, the father's decision shall prevail,
unless there is a judicial order to the contrary [Art.
211]
(b) Exercised by the mother if the child is illegitimate
[Art.176]
(c) Children under parental authority shall always
observe respect and reverence towards their
parents and are obliged to obey them [Art. 211]
CHARACTERISTICS OF PARENTAL AUTHORITY:
(1) Natural right and duty of parents [Art. 209, FC]
(2) Cannot be renounced, transferred or waived,
except in cases authorized by law [Art 210, FC]
(3) Jointly exercised by the father and the mother
[Art. 211, FC]
(4) Purely personal and cannot be exercised through
agents
(5) Temporary
PARENTAL PREFERENCE RULE:
The natural parents, who are of good character and
who can reasonably provide for the child, are
ordinarily entitled to custody as against all persons.
[Santos v CA (1995)]
WHO EXERCISES AUTHORITY IN CASES OF DEATH,
ABSENCE, UNSUITABILITY, REMARRIAGE, OR SEPARATION
OF PARENTS:
(1) In case one parent is absent or already dead, the
present or surviving parent [Art. 212]
- Remarriage of the surviving parent shall not
affect his/her parental authority over the
children, unless the court appoints another

person to be the guardian of the children or

their property [Art. 212]
(2) In case of a void/annulled marriage, and there is
no agreement between spouses, the parent
designated by the court [Art. 43 par. 1; Art. 49]
(3) Innocent spouse gets custody of minor children in
legal separation [Art. 63 par. 3]
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PAGE 53

(4) The court shall take into account all relevant

considerations, especially the choice of the child
over seven years of age, unless the parent chosen
is unfit [Art. 213 par. 1]
(5) Substitute parental authority [Art. 214]
(a) In case of death, absence or unsuitability of
the parents, substitute parental authority shall
be exercised by the surviving grandparent
(b) When several grandparents survive, the one
designated by the court shall exercise
parental authority, taking into account all
relevant considerations, especially the choice
of the child over seven years of age, unless the
grandparent chosen is unfit
DESCENDANTS PRIVILEGE OF REFUSAL TO TESTIFY [ART.
215]: No descendant shall be compelled, in a criminal
case, to testify against his parents and grandparents.
Exception: When such testimony is indispensable in
(1) a crime against the descendant, or (2) a crime by
one parent against the other.
TENDER YEARS PRESUMPTION:
NO child under 7 years of age shall be separated
from the mother, unless the court finds compelling
reasons to order otherwise. [Art. 213 par 2; Gamboa v.
CA (2007)]
Examples of compelling reasons are:
(1) When the mother is insane;
(2) with a communicable disease that might
endanger the life or health of the child;
(3) is maltreating the child; or
(4) has another child by another man who lives with
her. [Cervantes v. Fajardo (1989)]
Note: Prostitution or infidelity to husband does not
make a mother unfit as parent.
SUBSTITUTE AND SPECIAL PARENTAL
AUTHORITY
PERSONS EXERCISING SUBSTITUTE PARENTAL AUTHORITY
IN DEFAULT OF PARENTS OR JUDICIALLY APPOINTED
GUARDIAN (IN THIS ORDER):

(a) The surviving grandparent [Art. 214, FC]

(b) Oldest brother or sister, over 21 years old, unless
unfit or unqualified.
(c) Childs actual custodian, over 21 years old, unless
unfit or unqualified.
Note: The same order applies to the appointment of
judicial guardian over the property of the child
SUBSTITUTE PARENTAL AUTHORITY OVER DISADVANTAGED
CHILDREN (ART. 217)

Entrusted in summary judicial proceedings to:

(1) Heads of childrens homes
(2) Orphanages
Similar institutions duly accredited by the proper
government agency (such as the DSWD)
Who are disadvantaged children:
(1) Foundlings
(2) Abandoned
(3) Neglected
(4) Abused
(5) Others similarly situated
PERSONS EXERCISING SPECIAL PARENTAL AUTHORITY
[ART. 218 FC]

(1) School, its administrators and teachers; or

(2) The individual, entity or institution engaged in
child care
Note: Exercised over minor child while under their
supervision, instruction or custody; authorized
activities include those conducted both within or
outside the school, entity or institution
Substitute
Parental Authority
Special Parental Authority
It is exercised in
case of death,
absence, or in
case of
unsuitability of
parents.
It is exercised concurrently with
the parental authority of the
parents and rests on the theory
that while the child is in the
custody of the person exercising
special parental authority, the
parents temporarily relinquish
parental authority over the child
to the latter.
St. Marys Academy v. Carpitanos (2002):
The special parental authority and responsibility
applies to all authorized activities, whether inside or
outside the premises of the school, entity or institution.
LIABILITY OF THOSE EXERCISING SPECIAL PARENTAL
AUTHORITY OVER THE CHILD (ART. 219 FC)

(1) Principal and solidary liability for damages

caused by the acts or omissions of the minor child
while under their special parental authority
(2) Subsidiary liability for the parents and judicial
guardians of the minor, or those exercising
substitute parental authority over such minor for
his acts and omissions
Note: Both groups can use the defense that they
exercised proper diligence to avoid liability

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EFFECT OF PARENTAL AUTHORITY UPON THE

PERSONS OF THE CHILDREN

RIGHTS OF PARENTS UPON THE PERSON OF THE CHILDREN:

(1) To have them in their custody [Art. 220]

(2) To represent them in all matters affecting their
interests [Art. 220]
(3) To demand from them respect and obedience
and impose necessary discipline on them [Art.
220]
(4) To give or withhold consent to their marriage,
their marriage settlements, their donations by
reason of marriage, adoption, and employment
(Art. 220)
(5) To disinherit them for just cause (Tolentino)
People v Silvano (1999):
Art. 220 which states that the parent has a right to
impose necessary discipline on the child does not
authorize the parent to invade or disregard the
childs honor and dignity under the mask of
discipline. Such acts can never be justified as
parental punishment.

DUTIES OF PARENTS UPON THE PERSON OF THE CHILDREN:

(a) To support them, providing for their upbringing in

accordance with their means [Art. 220]
(b) To educate, instruct, and provide them with moral
and spiritual guidance and love and
understanding [Art. 220]
(c) To defend them against unlawful aggression [Art.
220]
(d) To give their lawful inheritance (Tolentino)
(e) To perform such other duties as are imposed by
law [Art. 220]
(f) To answer for damages caused by their fault or
negligence and for the civil liability for crimes
committed by them. [Art. 221]
SUBSTITUTE REPRESENTATION [ART. 222]
The courts may appoint a guardian of the childs
property, or a guardian ad litem when the best
interests of the child so requires.
COURT ASSISTANCE IN THE DISCIPLINE OF THE CHILD
[ARTS. 223-224]

(1) The parents or, in their absence or incapacity, the

individual, entity or institution exercising parental
authority, may petition the proper court of the
place where the child resides, for an order
providing for disciplinary measures over the child.
[Art. 223]
(2) The child shall be entitled to the assistance of
counsel, either of his choice or appointed by the
court, and a summary hearing shall be conducted
wherein the petitioner and the child shall be
heard. [Art. 223]
(3) If the court finds the petition meritorious,
disciplinary measures may include the
commitment of the child for not more than 30
days in entities or institutions engaged in child

care or in childrens homes duly accredited by the

proper government agency. [Art. 224]
(a) The parent exercising parental authority shall
not interfere with the case of the child
whenever committed but shall provide for his
support. [Art. 224]
(b) Upon proper petition or at its own instance,
the court may terminate the commitment of
the child whenever just and proper. [Art. 224]
If the court finds the petitioner at fault, irrespective of
the merits of the petition, or when the circumstances
so warrant, the court may also order the deprivation
or suspension of parental authority or adopt such
other measures as it may deem just and proper. [Art.
223]
EFFECTS OF PARENTAL AUTHORITY UPON THE
PROPERTY OF THE CHILDREN
(a) The father and mother shall jointly exercise legal
guardianship over the property of the minor child
without court appointment. [Art. 225]
(b) In case of disagreement, the fathers decision
shall prevail, unless there is judicial order to the
contrary. [Art. 225]
(c) The ordinary rules on guardianship shall be
merely suppletory except when the child is under
special parental authority, or the guardian is a
stranger, or a parent has remarried, in which case
the ordinary rules on guardian ship shall apply.
[Art. 225]
(d) If the market value of the property or the annual
income of the child exceeds P50,000, the parent
is required to furnish a bond of not less than 10%
of the value of the childs property or income.
[Art. 225]
PROCEDURE IN THE APPROVAL OF THE PARENTS BOND
[ART. 225]
(a) A verified petition for approval of the bond shall
be filed in the proper court of the place where the
child resides.
(b) If the child resides in a foreign country, the
petition shall be filed in the proper court of the
place where the property or any part thereof is
situated.
(c) The petition shall be docketed as a summary
special proceeding. The court shall determine
the amount of the bond, but shall not be less
than 10% of the market value of the childs
property or of his annual income.

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OWNERSHIP OF CHILDS ACQUISITIONS [ART.

226]
The property of the unemancipated child earned or
acquired with his work or industry or by onerous or
gratuitous title shall belong to the child in ownership
and shall be devoted exclusively to the latters
support and education, unless the title or transfer

provides otherwise.
PARENTS USUFRUCT [ART. 226]
The right of the parents over the fruits and income
(not the property itself) of the childs property shall
be limited primarily to the childs support and
secondarily to the collective daily needs of the family.
WHEN PARENTS ENTRUST THE MANAGEMENT OF THEIR
PROPERTIES TO A CHILD [ART. 227]

(a) If the parents entrust the management or

administration of any of their properties to an
unemancipated child, the net proceeds of such
property shall belong to the owner.
(b) The child shall be given a reasonable monthly
allowance in an amount not less than that which
the owner would have paid if the administrator
were a stranger, unless the owner grants the
entire proceeds to the child.
(c) In any case, the proceeds thus given in whole or
in part shall not be charged to the childs
legitime.
SUSPENSION OR TERMINATION OF PARENTAL
AUTHORITY;
RA 7610 CHILD ABUSE LAW
PARENTAL AUTHORITY PERMANENTLY TERMINATES

(1) Upon death of parents [Art. 228]

(2) Upon death of child [Art. 228]
(3) Upon emancipation of child [Art. 228]
(4) If the parents exercising parental authority has
subjected the child or allowed him to be
subjected to sexual abuse [Art. 232]
Note: In the case of death of parents, there is no
absolute termination of parental authority because
while the child is still a minor, the grandparents,
brothers and sisters, or a guardian may exercise
substitute parental authority over the child [Art. 216]
TERMINATION OF PARENTAL AUTHORITY WHICH CAN BE
REVIVED BY FINAL JUDGMENT [ART. 229]

(1) Upon adoption of the child;

(2) Upon the appointment of a general guardian for
the child;
(3) Upon judicial declaration of
(a) Abandonment of the child in a case filed for
the purpose
(b) Absence or incapacity of the person exercising
parental authority
(4) Upon final judgment of a competent court
divesting the party concerned of parental
authority.
GROUNDS FOR SUSPENSION OF PARENTAL AUTHORITY
[CLEBC; ART. 230-231]

(1) Conviction of parent for crime which carries with it

the penalty of civil interdiction
(2) Treats child with excessive harassment and
cruelty
(3) Gives corrupting orders, counsel, or example
(4) Compels child to beg

(5) Subjects or allows acts of lasciviousness

SCOPE OF SUBSTITUTE AND SPECIAL PARENTAL AUTHORITY
[ART. 233]

(a) The person exercising substitute parental

authority shall have the same authority over the
person of the child as the parents.
(b) In no case shall the school administrators, teacher
or individual engaged in child care exercising
special parental authority inflict corporal
punishment upon the child.
RA 7610 CHILD ABUSE LAW
An ascendant, stepparent or guardian of a minor
who shall induce, deliver or offer the minor to:
(1) Any one prohibited to keep the minor or
(2) Any one prohibited to have in his company a
minor, twelve (12) years or under or who is ten (10)
years or more his junior in any public or private
place, hotel, motel, beer joint, discotheque,
cabaret, pension house, sauna or massage parlor,
beach and/or other tourist resort or similar places
shall suffer penalties and imprisonment.
Note: Those not prohibited to have in his company
such minor in any of the mentioned places: anyone
who is related within the fourth degree of
consanguinity or affinity or any bond recognized by
law, local custom and tradition or acts in the
performance of a social, moral or legal duty

Emancipation, as amended
by RA 6809
Art. 234. Emancipation takes place by the attainment
of majority. Unless otherwise provided, majority
commences at the age of eighteen years.
Art. 236. Emancipation shall terminate parental
authority over the person and property of the child who
shall then be qualified and responsible for all acts of
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civil life, save the exceptions established by existing

laws in special cases.
Contracting marriage shall require parental consent
until the age of twenty-one.
Nothing in this Code shall be construed to derogate
from the duty or responsibility of parents and
guardians for children and wards below twenty-one
years of age mentioned in the second and third
paragraphs of Article 2180 of the Civil Code.
RA 6809:
By virtue of this law, emancipation can no longer
take place by virtue of the minors marriage or by the
concession of the parents to a minor in a recorded
public instrument.

Summary Judicial
Proceedings in the Family

Law
PROCEDURAL RULES PROVIDED FOR IN THIS
TITLE SHALL APPLY TO [ART. 238]:
(1) Separation in fact between husband and wife
(2) Abandonment by one of the other
(3) Incidents involving parental authority
SEPARATION IN FACT
A verified petition alleging the following facts is
required when [Art. 239]:
(a) A husband and wife are separated in fact; or,
(b) One has abandoned the other
Situation: Where one of them seeks judicial
authorization for a transaction where the consent of
the other spouse is required by law but such consent
is withheld or cannot be obtained
The petition shall:
(1) Attach the proposed deed, if any, embodying the
transaction, if none, shall describe in detail the
said transaction and state the reason why the
required consent thereto cannot be secured.
(2) The final deed duly executed by the parties shall
be submitted to and approved by the court.
SEPARATE CLAIM FOR DAMAGES: Claims for damages by
either spouse, except costs of the proceedings, may
be litigated only in a separate action. [Art. 240]
JURISDICTION: Jurisdiction over the petition shall,
upon proof of notice to the other spouse, be
exercised by the proper court authorized to hear
family cases, if one exists, or in the regional trial
court or its equivalent sitting in the place where
either of the spouses resides. [Art. 241]
NOTIFICATION TO OTHER SPOUSE:
(1) Upon the filing of the petition, the court shall
notify the other spouse, whose consent to the
transaction is required, of said petition, ordering
said spouse to show cause why the petition
should not be granted, on or before the date set
in said notice for the initial conference.
(2) The notice shall be accompanied by a copy of the
petition and shall be served at the last known
address of the spouse concerned. [Art. 242]
PROCEDURE:
(1) A preliminary conference shall be conducted by
the judge personally without the parties being
assisted by counsel.
(2) After the initial conference, if the court deems it
useful, the parties may be assisted by counsel at
the succeeding conferences and hearings. [Art.
243]
(3) If the petition is not resolved at the initial
conference, said petition shall be decided in a
summary hearing. Basis of summary hearing (at
the sound discretion of the court):
(a) Affidavits

(b) Documentary evidence

(c) Oral testimonies at the courts sound
discretion. If testimony is needed, the court
shall specify the witnesses to be heard and the
subject-matter of their testimonies, directing
the parties to present said witnesses. [Art.
246(a)]
WHEN APPEARANCE OF SPOUSES REQUIRED:
(1) In case of non-appearance of the spouse whose
consent is sought, the court shall inquire into the
reasons for his failure to appear, and shall require
such appearance, if possible. [Art. 244]
(2) If, despite all efforts, the attendance of the nonconsenting
spouse is not secured, the court may
proceed ex parte and render judgment as the
facts and circumstances may warrant. In any
case, the judge shall endeavor to protect the
interests of the non-appearing spouse. [Art. 245]
NATURE OF JUDGMENT: The judgment of the court
shall be immediately final and executory. [Art 247]
RULES APPLICABLE FOR ADMINISTERING OR ENCUMBERING
SEPARATE PROPERTY OF SPOUSE: The petition for

judicial authority to administer or encumber specific

separate property of the abandoning spouse and to
use the fruits or proceeds thereof for the support of

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the family shall also be governed by these rules. [Art.

248]
INCIDENTS INVOLVING PARENTAL AUTHORITY
PROCEDURE

(1) Such petitions shall be verified and filed in the

proper court of the place where the child resides.
[Art. 250]
(2) Upon the filing of the petition, the court shall
notify the parents or, in their absence or
incapacity, the individuals, entities or institutions
exercising parental authority over the child. [Art.
251]
Note:
(a) Petitions filed under Articles 223, 225 and 235 of
this Code involving parental authority shall be
verified. [Art. 249]
(b) The rules in Chapter 2 hereof shall also govern
summary proceedings under this Chapter insofar
as they are applicable [Art. 253]
(c) The foregoing rules in Chapter 2 (Separation in
Fact) and (Incidents Involving Parental Authority)
hereof shall likewise govern summary
proceedings filed
(1) Declaration of presumptive death [Art. 41]
(2) Delivery of presumptive legitime [Art. 51]
(3) Fixing of family domicile [Art. 69]
(4) Disagreements regarding one spouses
profession, occupation, business, or activity
[Art. 73]

(5) Disposition or encumbrance of common

property in ACP where one spouse is
incapacitated or unable to participate in the
administration; administration of absolute
community in a disagreement and the wife
takes recourse within five years [Art. 96]
(6) Disposition or encumbrance of common
property in CPG where one spouse is
incapacitated or unable to participate in the
administration; administration of absolute
community in a disagreement and the wife
takes recourse within five years, [Art. 124]
When wife and husband are de facto separated and
the CPG is insufficient, the spouse present shall,
upon a petition, be given judicial authority to
administer or encumber any specific property of the
other spouse and use the fruits and proceeds thereof
to satisfy the latters share. [Art. 127]

Retroactive Effect
RETROACTIVE EFFECT

Retroactive Effect
RETROACTIVE EFFECT
This Code shall have retroactive effect insofar as it
does not prejudice or impair vested or acquired
rights in accordance with the Civil Code or other
laws. [Art 256]
INVALIDITY OF OTHER PROVISIONS
If any provision is held invalid, other provisions not
affected shall remain valid. [Art. 255]

Funeral, NCC Arts. 305-310

The duty and the right to make arrangements for the

funeral of a relative shall be in accordance with the
order established for support, under Article 294 [Art.
305]:
(1) Spouse
(2) Descendants in the nearest degree. In case of
descendants of the same degree, or of brothers
and sisters, the oldest shall be preferred.
(3) The ascendants in the nearest degree. In case of
ascendants, the paternal shall have a better right
(4) The brothers and sisters.
(5) Municipal authorities if there are no persons
who are bound to support or if such persons are
without means
NATURE OF FUNERAL: Every funeral shall be in keeping
with the social position of the deceased. [Art. 306]
The funeral shall be:
(1) In accordance with the expressed wishes of the
deceased.
(2) In the absence of such expression, his religious
beliefs or affiliation shall determine the funeral
rites.
(3) In case of doubt, the form of the funeral shall be

decided upon by the person obliged to make

arrangements for the same, after consulting the
other members of the family [Art. 307]
Note: No human remains shall be retained, interred,
disposed of or exhumed without the consent of the
persons mentioned in articles 294 and 305.
Damages: Any person who shows disrespect to the
dead, or wrongfully interferes with a funeral shall be
liable to the family of the deceased for damages,
material and moral [Art. 309]

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Funeral Expenses: The construction of a tombstone or

mausoleum shall be deemed a part of the funeral
expenses, and shall be chargeable to the conjugal
partnership property, if the deceased is one of the
spouses [Art. 310].
GUIDELINES IN MAKING FUNERAL ARRANGEMENTS

(1) The persons who are preferred in the right to

make funeral arrangements may waive the right
expressly or impliedly in which case the right and
duty immediately descend to the person next in
the order.
(2) It must be in keeping with the social position of
the deceased.
(3) Law shall prevail over the will of the persons who
have the right to control the burial of deceased
exhumation, evidential purpose, disposition of
corpse by deceased, mutilation of corpses and
autopsies.
(4) Corpses which are to be buried at public
expenses may also be used for scientific purposes
under certain conditions.
(5) Expressed wishes of the deceased is given priority
provided that it is not contrary to law and must
not violate the legal and reglementary provisions
concerning funerals and disposition of the
remains (time, manner, place or ceremony)
(6) In the absence of expressed wishes, his religious
beliefs or affiliation shall determine the funeral
rights.
(7) In case of doubt, the persons in Art. 199 shall
decide.
(8) Any person who disrespects the dead or interferes
with the funeral shall be liable for material and
moral damages.

Use of Surnames, Arts. 364369, 369-380

SURNAMES OF CHILDREN
(1) Legitimate and legitimated children shall
principally use the surname of the father. [Art.
364]
(2) An adopted child shall bear the surname of the
adopter. [Art. 365]
(3) A natural child acknowledged by both parents

shall principally use the surname of the father. If

recognized by only one of the parents, a natural
child shall employ the surname of the
recognizing parent. [Art 366]
(4) Natural children by legal fiction shall principally
employ the surname of the father [Art. 367]
(5) Illegitimate children referred to in Article 287 shall
bear the surname of the mother. [Art 368]
(6) Children conceived before the decree annulling a
voidable marriage shall principally use the
surname of the father. [Art. 369]
WIFE AFTER AND DURING MARRIAGE
(1) A married woman may use [Art. 370]:
(a) Her maiden first name and surname and add
her husband's surname, or
(b) Her maiden first name and her husband's
surname or
(c) Her husband's full name, but prefixing a word
indicating that she is his wife, such as "Mrs."
[Tolentino:] The wife cannot claim an exclusive right
to use the husbands surname. She cant be
prevented from using it; but neither can she restrain
others from using it.
(2) In case of annulment of marriage, and the wife is
the guilty party, she shall resume her maiden
name and surname. If she is the innocent spouse,
she may resume her maiden name and surname.
However, she may choose to continue employing
her former husband's surname, unless [Art. 371]:
(a) The court decrees otherwise, or
(b) She or the former husband is married again to
another person.
(3) When legal separation has been granted, the wife
shall continue using her name and surname
employed before the legal separation. [Art. 372]
(4) A widow may use the deceased husband's
surname as though he were still living, in
accordance with Article 370. [Art 373]
CONFUSION AND CHANGE OF NAMES
In case of identity of names and surnames, the
younger person shall be obliged to use such
additional name or surname as will avoid confusion.
[Art. 374]
In case of identity of names and surnames between
ascendants and descendants, the word "Junior" can
be used only by a son. Grandsons and other direct
male descendants shall either [Art. 375]:
(a) Add a middle name or the mother's surname, or
(b) Add the Roman Numerals II, III, and so on.
No person can change his name or surname without
judicial authority. [Art. 376]
Usurpation of a name and surname may be the
subject of an action for damages and other relief.
[Art. 377]

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The unauthorized or unlawful use of another

person's surname gives a right of action to the latter
[Art. 378]
The employment of pen names or stage names is
permitted, provided it is done in good faith and there
is no injury to third persons. Pen names and stage
names cannot be usurped. [Art. 379]
Except as provided in the preceding article, no
person shall use different names and surnames. [Art
380]

Absence Art. 43, CC; Art. 41,

FC

PROVISIONAL MEASURES IN CASE OF

ABSENCE, ARTS. 381-383
Art. 43. If there is a doubt, as between two or more
persons who are called to succeed each other, as to
which of them died first, whoever alleges the death of
one prior to the other, shall prove the same; in the
absence of proof, it is presumed that they died at the
same time and there shall be no transmission of rights
from one to the other.
Note: Article 43 provides a statutory presumption
when there is doubt on the order of death between
persons who are called to succeed each other (only).
Joaquin v. Navarro (1948):
The statutory presumption of Article 43 was not
applied due to the presence of a credible eyewitness as
to who died first.
PRESUMPTION IN THE RULES OF COURT (Rule 131, sec. 3,
(jj.) (presumption of survivorship)
Age
Presumed Survivor
Both under 15 Older
Both above 60 Younger
One under 15, the other
above 60
One under 15
Both over 15 and under
60; different sexes
Male
Both over 15 and under
60; same sex
Older
One under 15 or over 60,
the other between those
ages
One between 15 and 60
Note: Applicable only to two or more persons who
perish in the same calamity, and it is not shown who
died first, and there are no particular circumstances
from which it can be inferred.
Article 41. A marriage contracted by any person during
subsistence of a previous marriage shall be null and
void, unless before the celebration of the subsequent

marriage, the prior spouse had been absent for four

consecutive years and the spouse present has a wellfounded
belief that the absent spouse was already
dead. In case of disappearance where there is danger
of death under the circumstances set forth in the
provisions of Article 391 of the Civil Code, an absence
of only two years shall be sufficient.
General rule: Marriage contracted by any person
during the subsistence of a previous marriage is void.
Exceptions: The following subsequent marriage of
the present spouse is valid:
(1) Subsequent marriage due to ordinary absence
where:
(a) The prior spouse had been absent for 4
consecutive years;
(b) The spouse present had a well-founded belief
that absent spouse is dead; and
(c) Judicial declaration of presumptive death was
secured (no prejudice to the effect of the
reappearance of the absent spouse).
(2) Subsequent marriage due to extraordinary
absence where:
(a) The prior spouse had been missing for 2
consecutive years;
(b) There is danger of death attendant to the
disappearance [Art. 391, Civil Code];
(c) The spouse present had a well-founded belief
that the missing person is dead; and
(d) Judicial declaration of presumptive death was
secured (no prejudice to the effect of the
reappearance of the absent spouse).
Notes:
(a) Institution of a summary proceeding is not
sufficient. There must also be a summary
judgment. (Balane)
(b) Only the deserted spouse can file or institute an
action a summary proceeding for the declaration
of presumptive death of the absentee.
(Bienvenido case)
(c) There must have been diligent efforts on the part
of the deserted spouse to locate the absent
spouse. These diligent efforts correspond to the
requirement of the law for a well-founded belief.
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Exception to the Exception:

Art. 381. When a person disappears from his domicile,
his whereabouts being unknown, and without leaving
an agent to administer his property, the judge, at the
instance of an interested party, a relative, or a friend,
may appoint a person to represent him in all that may
be necessary.
This same rule shall be observed when under similar
circumstances the power conferred by the absentee
has expired.
Art. 382. The appointment referred to in the preceding

article having been made, the judge shall take the

necessary measures to safeguard the rights and
interests of the absentee and shall specify the powers,
obligations and remuneration of his representative,
regulating them, according to the circumstances, by
the rules concerning guardians.
Art. 383. In the appointment of a representative, the
spouse present shall be preferred when there is no
legal separation.
If the absentee left no spouse, or if the spouse present
is a minor, any competent person may be appointed
by the court.
REQUISITES: The judge may appoint a person to
represent absentee when:
(1) Person disappears from his domicile
(2) His whereabouts are unknown
(3) No agent to administer his property
(4) An interested party, a relative, or a friend files the
action
WHO MAY BE APPOINTED AS REPRESENTATIVE?
(1) Spouse present shall be preferred when there is
no legal separation
(2) If no spouse or spouse is incapacitated, any
competent person
DECLARATION OF ABSENCE, ARTS. 384-389
Art. 384. Two years having elapsed without any news
about the absentee or since the receipt of the last
news, and five years in case the absentee has left a
person in charge of the administration of his property,
his absence may be declared.
Art. 385. The following may ask for the declaration of
absence:
(1) The spouse present;
(2) The heirs instituted in a will, who may present an
authentic copy of the same;
(3) The relatives who may succeed by the law of
intestacy;
(4) Those who may have over the property of the
absentee some right subordinated to the condition of
his death.
Article 386. The judicial declaration of absence shall
not take effect until six months after its publication in
a newspaper of general circulation.
WHEN MAY A DECLARATION OF ABSENCE BE DECLARED?
(a) Two years without any news about the absentee
(b) Five years if the absentee left a person in charge
of administration of his property
(c) Declaration takes effect only after six months after
publication in a newspaper of general circulation
WHO MAY ASK FOR A DECLARATION OF ABSENCE?
(1) Spouse present
(2) Heirs instituted in a will, who may present an
authentic copy of the same;
(3) Relatives who may succeed by the law of intestacy;
(4) Those who may have some right over the property of

the absentee, subordinated to the condition of his

death.
ADMINISTRATION OF THE PROPERTY OF THE
ABSENTEE, ARTS. 387-389
Art. 387. An administrator of the absentee's property
shall be appointed in accordance with Article 383.
Art. 388. The wife who is appointed as an
administratrix of the husband's property cannot
alienate or encumber the husband's property, or that
of the conjugal partnership, without judicial authority.
Art. 389. The administration shall cease in any of the
following cases:
(1) When the absentee appears personally or by means
of an agent;
(2) When the death of the absentee is proved and his
testate or intestate heirs appear;
(3) When a third person appears, showing by a proper
document that he has acquired the absentee's
property by purchase or other title.
In these cases the administrator shall cease in the
performance of his office, and the property shall be at
the disposal of those who may have a right thereto.
WHO MAY ADMINISTER THE PROPERTY?
(a) Spouse present shall be preferred when there is
no legal separation
(b) If no spouse or spouse is incapacitated, any
competent person
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WHEN WILL THE ADMINISTRATION OF PROPERTY CEASE ?

Administrator shall cease in performance of his

office, and property shall be disposed in favor of
those who have a right thereto when
(1) Absentee appears personally or by means of an
agent
(2) Testate or intestate heirs appear, upon proof of
death of absentee
(3) Third person appears, with a proper document
showing he has acquired absentees property by
purchase or other title
PRESUMPTION OF DEATH, ARTS. 390-392
Art. 390. After an absence of 7 years, it being unknown
whether or not the absentee still lives, he shall be
presumed dead for all purposes, except for those of
succession.
The absentee shall not be presumed dead for the
purpose of opening his succession till after an absence
of 10 years. If he disappeared after the age of 75 years,
an absence of 5 years shall be sufficient in order that
his succession may be opened.
Art. 391. The following shall be presumed dead for all
purposes, including the division of the estate among
the heirs: (SAAD)
(7) A person on board a vessel lost during a sea
voyage, or an aeroplane which is missing, who has
not been heard of for four years since the loss of

the vessel or aeroplane;

(8) A person in the armed forces who has taken part
in war, and has been missing for four years;
(9) A person who has been in danger of death under
other circumstances and his existence has not
been known for four years.
General rule: A person shall be presumed dead for all
purposes after absence for a period of 7 years.
Exception: Succession
(a) In succession, 10 years is required for
presumption of death.
(b) If absentee disappeared after age 75, 5 years
shall be sufficient.
EXTRAORDINARY ABSENCE

Only 4 years is required for presumption to arise if:

(1) A person on board a vessel lost during a sea
voyage, or an aeroplane which is missing, who has
not been heard of for four years since the loss of
the vessel or aeroplane;
(2) A person in the armed forces who has taken part
in war, and has been missing for four years;
(3) A person who has been in danger of death under
other circumstances and his existence has not
been known for four years.
Note:
(1) Although 7 years is required for the presumption
of death of an absentee in the Civil Code, Art. 41
of the Family Code makes an exception for the
purpose of remarriage by limiting such
requirement to 4 years.
(2) Art. 41 also limits the required 4 years in Art. 391
for absence under exceptional circumstances to
only 2 years.
Art. 392. If the absentee appears, or without appearing
his existence is proved, he shall recover his property in
the condition in which it may be found, and the price
of any property that may have been alienated or the
property acquired therewith; but he cannot claim either
fruits or rents.
Republic of the Philippines v. Granada (2012):
The petition for declaration of presumptive death of an
absent spouse for the purpose of contracting a
subsequent marriage under Article 41 of the Family
Code is a summary proceeding as provided for under
the Family Code, and as such, the judgment of the
court therein shall be immediately final and executor,
and not subject to ordinary appeal.
However, the losing party in a summary proceeding for
the declaration of presumptive death for purposes of
remarriage under Art. 41 of the FC may file a petition
for certiorari with the CA on the ground that, in
rendering judgment thereon, the trial court committed
grave abuse of discretion amounting to lack of
jurisdiction. From the decision of the CA, the aggrieved
party may elevate the matter to the Supreme Court via

a petition for review on certiorari under Rule 45 of the

Rules of Court.

Civil Registrar

ARTS. 407-413
Art. 407. Acts, events and judicial decrees concerning
the civil status of persons shall be recorded in the civil
register.
Art. 408. The following shall be entered in the civil
register:
(1) Births;
(2) marriages;
(3) deaths;
(4) legal separations;
(5) annulments of marriage;

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(6) judgments declaring marriages void from the

beginning;
(7) legitimations;
(8) adoptions;
(9) acknowledgments of natural children;
(10) naturalization;
(11) loss, or
(12) recovery of citizenship;
(13) civil interdiction;
(14) judicial determination of filiation;
(15) voluntary emancipation of a minor; and
(16) changes of name.
Art. 409. In cases of legal separation, adoption,
naturalization and other judicial orders mentioned in
the preceding article, it shall be the duty of the clerk of
the court which issued the decree to ascertain whether
the same has been registered, and if this has not been
done, to send a copy of said decree to the civil registry
of the city or municipality where the court is
functioning.
Art. 410. The books making up the civil register and all
documents relating thereto shall be considered public
documents and shall be prima facie evidence of the
facts therein contained.
Art. 411. Every civil registrar shall be civilly responsible
for any unauthorized alteration made in any civil
register, to any person suffering damage thereby.
However, the civil registrar may exempt himself from
such liability if he proves that he has taken every
reasonable precaution to prevent the unlawful
alteration.
Art. 412. No entry in a civil register shall be changed or
corrected, without a judicial order.
Art. 413. All other matters pertaining to the registration
of civil status shall be governed by special laws.
RA 9048 AS AMENDED BY RA 10172
AN ACT AUTHORIZING THE CITY OR MUNICIPAL
CIVIL REGISTRAR OR THE CONSUL GENERAL TO
CORRECT A CLERICAL OR TYPOGRAPHICAL

ERROR IN AN ENTRY AND/OR CHANGE OF FIRST

NAME OR NICKNAME IN THE CIVIL REGISTER
WITHOUT NEED OF A JUDICIAL ORDER,
AMENDING FOR THIS PURPOSE ARTICLES 376
AND 412 OF THE CIVIL CODE OF THE PHILIPPINES
General rule: No entry in a civil register shall be
changed or corrected without a judicial order
Exception:
(a) Clerical or typographical errors;
(b) Change of: first name or nickname, day and
month in the date of birth, or sex of a person
This exception applies where it is patently clear that
there was a clerical or typographical error or mistake
in the entry, which can be corrected or changed by
the concerned city or municipal civil registrar or
consul general in accordance with the provisions of
this Act and its implementing rules and regulations
Notes:
(a) Clerical or typographical error refers to a mistake
committed in the performance of clerical work in
writing, copying, transcribing or typing an entry in
the civil register that is harmless and innocuous
(i.e. misspelled name, misspelled place of birth,
mistake in the entry of day and month in the date
of birth or the sex of the person or the like, which
is visible to the eyes or obvious to the
understanding, and can be corrected or changed
only by reference to other existing record or
records)
(b) Before the amendment by RA 10172, no correction
must involve the change of sex, nationality, age or
status of the petitioner. After the amendment,
change of sex can now be subjected to correction
without judicial order under the rules of this Act.
(c) Civil Register refers to the various registry books
and related certificates and documents kept in
the archives of the local civil registry offices,
Philippine Consulates and of the Office of the
Civil Registrar General.
Sec. 3. Who May File the Petition and Where. Any
person having direct and personal interest in the
correction of a clerical or typographical error in an
entry and/or change of first name or nickname in the
civil register may file, in person, a verified petition with
the local civil registry office of the city or municipality
where the record being sought to be corrected or
changed is kept.
In case the petitioner has already migrated to another
place in the country and it would not be practical for
such party, in terms of transportation expenses, time
and effort to appear in person before the local civil
registrar keeping the documents to be corrected or
changed, the petition may be filed, in person, with the
local civil registrar of the place where the interested
party is presently residing or domiciled. The two (2)

local civil registrars concerned will then communicate

to facilitate the processing of the petition.

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Citizens of the Philippines who are presently residing or

domiciled in foreign countries may file their petition, in
person, with the nearest Philippine Consulates.
The petitions filed with the city or municipal civil
registrar or the consul general shall be processed in
accordance with this Act and its implementing rules
and regulations.
All petitions for the clerical or typographical errors
and/or change of first names or nicknames may be
availed of only once.
GROUNDS

Who may file the petition and where?

(1) Any person having direct personal interest in the
correction of a clerical or typographical error in an
entry and/or change of first name or nickname in
the civil register
(2) Verified petition with the local civil registry office
of the city or municipality
(a) where the record being sought to be corrected
or changed is kept
(b) where the interested party is presently
residing or domiciled, if it will be impractical
to submit in the place where record is kept (i.e.
when party has migrated to another place in
the country
(c) nearest Philippine Consulates, if the petitioner
is presently residing or domiciled in foreign
countries
Note:
All petitions for the clerical or typographical errors
and/or change of first names or nicknames may be
availed of only once.
Sec. 4. Grounds for Change of First Name or
Nickname. The petition for change of first name or
nickname may be allowed in any of the following
cases:
(1) The petitioner finds the first name or nickname to
be ridiculous, tainted with dishonor or extremely
difficult to write or pronounce.
(2) The new first name or nickname has been
habitually and continuously used by the petitioner and
he has been publicly known by that by that first name
or nickname in the community: or
(3) The change will avoid confusion.
Sec. 5. Form and Contents of the Petition. The
petition for correction of a clerical or typographical
error, or for change of first name or nickname, as the
case may be, shall be in the form of an affidavit,
subscribed and sworn to before any person authorized
by the law to administer oaths. The affidavit shall set
forth facts necessary to establish the merits of the
petition and shall show affirmatively that the petitioner

is competent to testify to the matters stated. The

petitioner shall state the particular erroneous entry or
entries, which are sought to be corrected and/or the
change sought to be made.
The petition shall be supported with the following
documents:
(1) A certified true machine copy of the certificate or of
the page of the registry book containing the entry or
entries sought to be corrected or changed.
(2) At least two (2) public or private documents
showing the correct entry or entries upon which the
correction or change shall be based; and
(3) Other documents which the petitioner or the city or
municipal civil registrar or the consul general may
consider relevant and necessary for the approval of the
petition.
No petition for correction of erroneous entry
concerning the date of birth or the sex of a person shall
be entertained except if the petition is accompanied by
earliest school record or earliest school documents
such as, but not limited to, medical records, baptismal
certificate and other documents issued by religious
authorities; nor shall any entry involving change of
gender corrected except if the petition is accompanied
by a certification issued by an accredited government
physician attesting to the fact that the petitioner has
not undergone sex change or sex transplant. The
petition for change of first name or nickname, or for
correction of erroneous entry concerning the day and
month in the date of birth or the sex of a person, as the
case may be, shall be published at least once a week
for two (2) consecutive weeks in a newspaper of
general circulation.
Furthermore, the petitioner shall submit a certification
from the appropriate law enforcements, agencies that
he has no pending case or no criminal record.
The petition and its supporting papers shall be filed in
three (3) copies to be distributed as follows: first copy
to the concerned city or municipal civil registrar, or the
consul general; second copy to the Office of the Civil
Registrar General; and third copy to the petitioner.
RULE 108, RULES OF COURT
CANCELLATION OR CORRECTION OF ENTRIES IN
THE CIVIL REGISTRY
Sec. 1. Who may file petition. - Any person interested in
any act, event, order or decree concerning the civil
status of persons which has been recorded in the civil
register, may file a verified petition for the cancellation

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or correction of any entry relating thereto, with the

Court of First Instance of the province where the
corresponding civil registry is located.
Sec. 2. Entries subject to cancellation or correction. Upon good and valid grounds, the following entries in
the civil register may be cancelled or corrected: (a)

births; (b) marriages; (c) deaths; (d) legal separations;

(e) judgments of annulments of marriage; (f)
judgments declaring marriages void from the
beginning; (g) legitimations; (h) adoptions; (i)
acknowledgments of natural children; (j)
naturalization (k) election, loss or recovery of
citizenship (l) civil interdiction; (m) judicial
determination of filiation; (n) voluntary emancipation
of a minor; and (o) changes of name.
Sec. 3. Parties. - When cancellation or correction of an
entry in the civil register is sought, the civil registrar
and all persons who have or claim any interest which
would be affected thereby shall be made parties to the
proceeding.
Sec. 4. Notice and publication. - Upon the filing of the
petition, the court shall, by an order, fix the time and
place for the hearing of the same, and cause
reasonable notice thereof to be given to the persons
named in the petition. The court shall also cause the
order to be published once a week for three (3)
consecutive weeks in a newspaper of general
circulation in the province.
Sec. 5. Opposition. - The civil registrar and any person
having or claiming any interest under the entry whose
cancellation or correction is sought may, within fifteen
(15) days from notice of the petition, or from the last
date of publication of such notice, file his opposition
thereto.
Sec. 6. Expediting proceedings. - The court in which
the proceeding is brought may make orders expediting
the proceedings, and may also grant preliminary
injunction for the preservation of the rights of the
parties pending such proceedings.
Sec. 7. Order. - After hearing, the court may either
dismiss the petition or issue an order granting the
cancellation or correction prayed for. In either case, a
certified copy of the judgment shall be served upon the
civil registrar concerned who shall annotate the same
in his record.
WHO MAY FILE PETITION?
(1) Any person interested
(2) Any act, event, order or decree concerning the
civil status of persons which has been recorded in
the civil register
(3) Verified petition for the cancellation or correction
of any entry relating thereto with the Court of
First Instance of the province where the
corresponding civil registry is located
ENTRIES SUBJECT TO CANCELLATION

(a) Births
(b) Marriages
(c) Deaths
(d) Legal separations
(e) Judgments of annulments of marriage
(f) Judgments declaring marriages void from the

beginning
(g) Legitimations
(h) Adoptions
(i) Acknowledgments of natural children
(j) Naturalization
(k) Election, loss or recovery of citizenship
(l) Civil interdiction
(m) Judicial determination of filiation
(n) Voluntary emancipation of a minor
(o) Changes of name

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

of appropriation. [NCC 414]

Characteristics (USA)

(1) Utility capacity to satisfy human wants

(2) Substantivity and Individuality separate and
autonomous existence
(3) Susceptibility of being appropriated what cannot
be appropriated because of their distance, depth,
or immensity cannot be considered things (i.e.
stars, ocean)

Classification

HIDDEN TREASURE
Hidden treasure any hidden and unknown deposit of
money jewels or other precious objects, the lawful
ownership of which does not appear. [NCC 439]
Owner of the land, building or other property on
which the hidden treasure was found, also owns it,
subject to:
(1) Right of a finder by chance who is not a
trespasser/intruder: of treasure
(2) Right of a usufructuary who finds treasure: of
treasure
(3) Right of State to acquire things of interest to
science or the arts [NCC 438]
BASED ON MOBILITY IMMOVABLE OR
MOVABLE
REAL OR IMMOVABLE PROPERTY [NCC 415]
(1) Land, buildings, roads and constructions of all
kinds adhered to the soil;
(2) Trees, plants, and growing fruits, while they are
attached to the land or form an integral part of
an immovable;
(3) Everything attached to an immovable in a fixed
manner, in such a way that it cannot be
separated therefrom without breaking the
material or deterioration of the object;
(4) Statues, reliefs, paintings or other objects for use
or ornamentation, placed in buildings or on lands
by the owner of the immovable in such a manner
that it reveals the intention to attach them
permanently to the tenements;

(5) Machinery, receptacles, instruments or

implements intended by the owner of the
tenement for an industry or works which may be
carried on in a building or on a piece of land, and
which tend directly to meet the needs of the said
industry or works;
(6) Animal houses, pigeon-houses, beehives, fish
ponds or breeding places of similar nature, in
case their owner has placed them or preserves
them with the intention to have them
permanently attached to the land, and forming a
permanent part of it; the animals in these places
are included;
(7) Fertilizer actually used on a piece of land;
(8) Mines, quarries, and slag dumps, while the
matter thereof forms part of the bed, and waters
either running or stagnant;
(9) Docks and structures which, though floating, are
intended by their nature and object to remain at
a fixed place on a river, lake, or coast;
(10) Contracts for public works, and servitudes and
other real rights over immovable property.
Categories of Immovables (NIDA)
(1) By nature
(2) By incorporation
(3) By destination
(4) By analogy
Immovables by Nature: cannot be moved from place
to place; their intrinsic qualities have no utility except
in a fixed place (Par. 1 & 8)
(1) Par. 1
(a) Building - their adherence to the land must
be permanent and substantial.
(b) Buildings have been considered as
immovables, despite:
(i) Treatment by the parties e.g. they
constitute a separate mortgage on the
building and the land [Punzalan v.
Lacsamana]
(ii) Separate Ownership i.e. a building on
rented land is still considered an
immovable. [Tolentino]
(2) Par. 8
(a) Mineral Deposits
(i) Minerals still deposited in the soil
(ii) When minerals have been extracted,
they become chattel.
(b) Slag Dump: dirt and soil taken from a mine
and piled upon the surface of the ground.
Inside the dump can be found the minerals.
(c) Waters: those still attached to or running thru
the soil or the ground.
Immovables by Incorporation: are essentially movables
but are attached to an immovable in such a way as
to be an integral part [Par. 2, 3, 4, 6 & 7]

(1) Par. 2
(a) Trees and plants: only immovables when they
are attached to the land or form an integral
part of an immovable
(i) When they have been cut or uprooted,
they become movables.
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(b) By special treatment of Act 1508 (Chattel

Mortgage Law), growing crops may be subject
of a Chattel Mortgage.
(c) For the purpose of attachment: growing crops
are to be attached in the same manner as
realty. (Rule 59, Sec. 7)
(2) Par. 3
(a) Res vinta in Roman Law
(b) Attachment in a fixed manner: breakage or
injury in case of separation will be substantial
e.g. wells, sewers, aqueducts and railways
(i) Whether attached by the owner himself
or some other person
(3) Par. 7
Actually used (it has been spread over the land)
Immovables by Destination: are essentially movables
but by the purpose for which they have been placed
in an immovable, partake of the nature of an
immovable [Par. 4, 5, 6 & 9]
(1) Par. 4
(a) Requisites:
(i) Placed by the owner or by the tenant (as
agent);
(ii) With intention of attaching them
permanently even if adherence will not
involve breakage or injury.
(b) Where the improvement or ornaments placed
by the lessee are not to pass to the owner at
the expiration of the lease, they remain
movables for chattel mortgage purposes.
[Davao Sawmill v. Castillo(1935)]
(2) Par. 3 v. Par. 4
Par. 3 Par. 4
Cannot be separated
from immovable
without breaking or
deterioration
Can be separated
from immovable
without breaking or
deterioration
Need not be placed by
the owner
Must be placed by
the owner, or by his
agent, expressed or
implied
Real property by

incorporation
Real property by
incorporation and
destination
(3) Par. 5
(a) Immovability depends upon their being
destined for use in the industry or work in the
tenement;
(i) The moment they are separated, (from
the immovable or from the industry or
work in which they are utilized) they
recover their condition as movables.
(ii) If it is still needed for the industry but
separated from the tenement
temporarily, the property continues to be
immovable.
(b) Requisites for Immovability in Par. 5:
(i) Placed by the owner or the tenant (as
agent);
(ii) Adapted to the needs of the industry or
work
(c) Except: Estoppel
(d) Parties may, by agreement, treat as personal
property that which by nature would be real,
as long as no third parties would be
prejudiced. That characterization is effective
between the parties. [Makati Leasing v.
Wearever(1983)]
(e) Effect of Attachment
(i) Machinery becomes part of the
immovable.
(ii) The installation of machinery and
equipment in a mortgaged sugar central
for the purpose of carrying out the
industrial functions and increasing
production, constitutes a permanent
improvement on said sugar central and
subjects said machinery and equipment
to the mortgage constituted thereon.
[Berkenkotter v. Cu Unjieng(1935)]
(4) Par. 6
Requisites:
(a) Placed by the owner or the tenant (as agent);
(b) With the intention of permanent attachment;
(c) Forming a permanent part of the immovable.
(5) Par. 9:
(a) A floating house tied to a shore and used as a
residence is considered real property,
considering that the waters on which it floats
are considered immovables.
(b) But if the floating house makes it a point to
journey from place to place, it assumes the
category of a vessel, and is considered
immovable
Immovables by Analogy: Contracts for public works,

servitudes, other real rights over immovable property

e.g. usufruct and lease of real property for a period of
1 year and registered [Par. 10]
Note: Enumeration in Art. 415 not absolute
(1) Parties may by agreement treat as, but effective
only as to them.
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It is based, partly, upon the principle of estoppel.

[Evangelista vs. Alto Surety(1958)]
(2) For purposes of taxation, improvements on land
are commonly taxed as realty, even though for
some purposes, they might be considered as
personalty.
It is a familiar phenomenon to see things
classified as real property for purposes of
taxation, which on general principle, might be
considered personal property. [Manila Electric v.
Central Bank(1962)]
PERSONAL OR MOVABLE [416 & 417, CC]
(1) Those movables susceptible of appropriation
which are not included in the preceding article;
(2) Real property which by any special provision of
law is considered as personalty;
(3) Forces of nature which are brought under control
by science; and
(4) In general, all things which can be transported
from place to place without impairment of the
real property to which they are fixed.
(5) Obligations and actions which have for their
object movables or demandable sums; and
(6) Shares of stock of agricultural, commercial and
industrial entities, although they may have real
estate.
Tests to Determine Movable Character
(1) By exclusion
(a) Everything NOT included in Article 415
(b) Parties cannot by agreement treat as
immovable that which is legally movable.
(2) By description
(a) Ability to change location whether it can be
carried from place to place;
(b) Without substantial injury to the immovable to
which it is attached.
The steel towers built by MERALCO are not buildings
or constructions since they are removable and
merely attached to a square metal frame by means
of bolts, which when unscrewed could easily be
dismantled and moved from place to place, without
breaking the material or causing deterioration to the
object they are attached. [Board of Assessment
Appeals v. Meralco]
(3) By special provision of law
(a) Growing crops under the Chattel Mortgage
Law
(b) Machinery installed by a lessee not acting as

agent of the owner [Davao Sawmill v. Castillo]

(c) Intellectual property considered personal
property; it consists in the pecuniary benefit
which the owner can get by the reproduction
or manufacture of his work.
(4) By forces of nature e.g. electricity, gas, heat,
oxygen
IMPORTANCE AND SIGNIFICANCE OF CLASSIFICATION
UNDER THE CIVIL CODE

(1) In Criminal Law

(a) Usurpation of property can take place only
with respect to real property. [RPC 312]
(b) Robbery and theft can be committed only
against personal property. [RPC 293, 308]
(2) In the Form of Contracts Involving Movables and
Immovables
(a) Subject matter of specific contracts:
(i) Only real property can be the subject of
real mortgage [NCC 2124] and
antichresis [NCC 2132]
(ii) Only personal property can be the
subject of voluntary deposit [NCC 1966],
pledge [NCC 2094] and chattel
mortgage [Act 1508[
(b) Donations of real property are required to be
in a public instrument [NCC 749] but a
donation of a movable may be made orally or
in writing [NCC 748]
(3) For Acquisitive Prescription
(a) Real property can be acquired by prescription
in 30 years (bad faith) and 10 years (good
faith). (NCC 1137, 1134)
(b) Movables can be acquired by prescription in 8
years (bad faith) and 4 years (good faith).
(NCC 1132)
(4) Actions for Recovery of Possession
(a) Possession of real property - recovered
through accion reivindicatoria, accion
publiciana, forcible entry and unlawful detainer.
(b) Possession of movable property - recovered
through replevin.
(5) Venue of actions
(a) Real actions - Actions concerning real property
are commenced in the court which has
jurisdiction over the area where the real
property is situated. [Rules of Court Rule 4 Sec.
1]
(b) Personal actions - Commenced where the
plaintiff or any of the principal plaintiffs, or
where the defendant or any of the principal
defendants resides, or if a non-resident
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defendant, where he may be found, at the

election of the plaintiff. [Rule 4 Sec. 2]
(6) The Governing Law (Private International Law)

(a) Immovables - governed by the law of the

country where they are located
(b) Movables - governed by the personal laws of
the owner (which in some cases is the law of
his nationality and in other cases, the law of
his domicile)
(7) In affecting third persons
(a) In transactions involving real property must
be recorded in the Registry of Property to
affect third persons
(b) In transactions involving personal property
registration is not required, except for chattel
mortgages [Chattel Mortgage Register, NCC
2140]
BASED ON OWNERSHIP
Either of public dominion or private ownership [NCC
419]
Churches and other consecrated objects are
considered outside the commerce of man; they are
considered neither public nor private property
PUBLIC DOMINION

Property of public dominion is outside the commerce

of man. They cannot be the subject matter of private
contracts, cannot be acquired by prescription and
they are not subject to attachment and execution nor
burdened with a voluntary easement.
Public
Dominion
As defined by NCC 420
Public
Domain
Used in Art XII, Section 2, 1987
Constitution
Public Lands Public Land Act
Characteristics:
(1) Not owned by the State but pertains to it as
territorial sovereign; to hold in trust for the
interest of the community.
(2) Purpose: For public use, and not for use by the
State as a juridical person
(3) Cannot be the subject of appropriation either by
the State or by private persons
Classifications:
Administered by the State: [NCC 420]
(1) Those intended for public use (roads, canals,
rivers, torrents, ports and bridges constructed by
the State, banks, shores, roadsteads, and others
of similar character)
May be used by everybody, even by strangers or
aliens but nobody can exercise over it the rights of
a private owner
(2) Those intended for some public service
(a) may be used only by authorized persons but
exists for the benefit of all
(b) e.g. fortresses, unleased mines and civil

buildings
(3) Those for the development of the national wealth
Includes natural resources such as minerals, coal,
oil and forest
(4) Patrimonial property
(a) Owned by the State over which it has the
same rights as private individuals in relation
to their own property
(b) Subject to the administrative laws and
regulations on the procedure of exercising
such rights.
(c) E.g. friar lands, escheated properties and
commercial buildings
(d) Purpose:
(i) Enables the State to attain its economic
ends
(ii) Serves as a means for the States
subsistence and preservation
(iii) Enables the State to fulfill its primary
mission
(e) Conversion of Property of Public Dominion for
Public Use to Patrimonial Property:
(i) Property of public dominion, when no
longer intended for public use or for
public service, shall form part of the
patrimonial property of the State [NCC
422, Civil Code]
(ii) Requires a Declaration by the
Government (executive or legislative
departments) that it is no longer needed
for public use or service.
Administered by Municipal Corporations: [NCC 424]
(1) Property for public use, in the provinces, cities,
and municipalities, consist of the provincial
roads, city streets, municipal streets, the squares,
fountains, public waters, promenades, and public
works for public service paid for by said provinces,
cities, or municipalities.
(2) Patrimonial property of Municipal Corporations:
(a) The province or municipality, as a juridical
entity, also possesses private property to
answer for its economic necessities.
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(b) Classification of Properties of provinces, cities,

and municipalities [Salas v. Jarencio, (1972)]
(i) Properties acquired with their own funds
in their private or corporate capacity over
which the political subdivision has
ownership and control
(ii) Properties of public dominion held in trust
for the States inhabitants are subject to
the control and supervision of the State
(c) A municipal corporation must prove that they
acquired the land with their own corporate
funds

(d) Presumption: that land comes from the State

upon the creation of the municipality. All
lands in the possession of the municipality
Except for those acquired with its private funds,
are deemed to be property of public dominion,
held in trust for the State for the benefit of its
inhabitants.
(e) Congress has paramount power to dispose of
lands of public dominion in a municipality, the
latter being a subdivision only for purposes of
local administration. [Salas v. Jarencio, (1972)]
PRIVATE OWNERSHIP

Can be exercised by the State in its private capacity

or by private persons
Kinds:
(1) Patrimonial property - Property owned by the
State and its political subdivisions in their private
capacity; all property of the State not included in
NCC 420 (on public dominion) [NCC 421-424]
(2) Property belonging to private persons, either
individually or collectively [NCC 425]
(1) Property of private ownership, besides the
patrimonial property of the State, provinces,
cities, and municipalities, consists of all
property belonging to private persons, either
individually or collectively.
(2) Refers to all property belonging to private
persons, natural or juridical, either individually
or collectively (co-owned property)
Determination (two different views):
(1) Determined by how the property was used:
In Province of Zamboanga v. City of Zamboanga
(1968), property was considered patrimonial for
they were not for public use.
(2) Determined by how the property was acquired:
According to Salas v. Jarencio (1972), the absence
of a title deed to any land, showing that it was
acquired with its private or corporate funds, the
presumption is that such land came from the
State upon the creation of the municipality.
Conversion
Alienable Public Land converted to Private Property
through Prescription Alienable public land held by a
possessor personally/through predecessors-ininterest,
openly, continuously and exclusively for
30 years is CONVERTED to private property by the
mere lapse or completion of the period. The
application for confirmation is mere formality,
because land had already been converted, giving rise
to a registrable title. [Director of Lands v. IAC]
Private Land converted to Property of Public Dominion
through abandonment and reclamation Through the
gradual encroachment or erosion by the ebb and
flow of the tide, private property may become public
IF the owner appears to have ABANDONED the land,

and permitted it to be totally destroyed so as to

become part of the shore. The land having
disappeared on account of the gradual erosion, and
having remained submerged until they were
reclaimed by the government, they are public land.
[Government v. Cabangis]
BASED ON CONSUMABILITY [NCC 418]
Only applies to movables, determined by nature
CONSUMABLE

(1) Movables which cannot be used in a manner

appropriate to their nature without their being
consumed (e.g. food)
(2) Consumable goods cannot be the subject matter
of a commodatum unless the purpose of the
contract is not the consumption of the object, as
when it is merely for exhibition.
NON-CONSUMABLE
All others not falling under consumable e.g. money
in coin
SUSCEPTIBILITY TO SUBSTITUTION
Only applies to movables, determined by the
intention of the parties.
FUNGIBLES

Things which, because of their nature or the will of

the parties, are capable of being substituted by
others of the same kind, not having a distinct
individuality
NON-FUNGIBLES
(1) Things which cannot be substituted for another
(2) If the parties agreed that the same thing be
returned, it is not fungible
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BASED ON THE CONSTITUTION [ARTICLE XII,

SEC 3]
(1) Public Agricultural Land
(2) Mineral Land
(3) Timber Land
(4) National Parks
OTHER CLASSIFICATIONS
BY THEIR PHYSICAL EXISTENCE

(1) Corporeal - All property the existence of which

can be determined by the senses (res qui tangi
possunt)
(2) Incorporeal
(a) Things having abstract existence, created by
man and representing value.
(b) Includes rights over incorporeal things,
credits, and real rights other than ownership
over corporeal things.
BY THEIR AUTONOMY OR DEPENDENCE

(1) Principal - Those to which other things are

considered dependent or subordinated, such as
the land on which a house is built.
(2) Accessory - Those which are dependent upon or
subordinated to the principal. They are destined
to complete, enhance or ornament another

property.
BY SUSCEPTIBILITY TO DETERIORATION

(1) Deteriorable that deteriorate through use or by

time
(2) Non-deteriorable
BY REASON OF THEIR SUSCEPTIBILITY TO DIVISION

(1) Divisible - Those which can be divided physically

or juridically without injury to their nature. E.g.:
piece of land or an inheritance.
(2) Indivisible - Those which cannot be divided
without destroying their nature or rendering
impossible the fulfillment of the juridical relation
of which they are object.
BY REASON OF DESIGNATION

(1) Generic - That which indicates its homogenous

nature, but not the individual such as a horse,
house, dress, without indicating it
(2) Specific - That which indicates the specie or its
nature and the individual, such as the white
horse of X
EXISTENCE IN POINT OF TIME

(1) Present - Those which exist in actuality, either

physical or legal, such as, the erected building
(2) Future - Those which do not exist in actuality, but
whose existence can reasonably be expected with
more or less probability, such as ungathered
fruits.

Ownership

DEFINITION
(a) Independent right of exclusive enjoyment and
control of a thing
(b) For the purpose of deriving all advantages
required by the reasonable needs of the
owner/holder of right and promotion of general
welfare
(c) Completely subjected to his will
(d) In everything not prohibited by public law or the
rights of another
RIGHT IN GENERAL
RIGHTS INCLUDED IN OWNERSHIP [NCC 428]
(1) Right to enjoy and dispose of a thing, without
other limitations than those established by law
(2) Right of action against the holder and possessor
of the thing in order to recover it.
BUNDLE OF RIGHTS

(1) Jus Utendi: Right to enjoy and receive what the

property produces
(2) Jus Fruendi: Right to receive fruits
(3) Jus Accessiones: Right to the accessories
(4) Jus Abutendi: Right to consume a thing by use
(5) Jus Disponendi: Right to alienate, encumber,
transform or even destroy the thing owned
(6) Jus Vindicandi: Right to recover possession of
property based on a claim of ownership
(7) Jus Possidendi: Right to possess the property

(Implied from all the other rights)

PROTECTING PROPERTY
BASIC DISTINCTIONS

(1) Real right v. Personal right

Real Rights - Rights that confer upon its holder an
autonomous power to derive directly from a thing
certain economic advantages independently of
whoever the possessor of the thing
Personal Rights - Rights of a person to demand
from another as a definite passive subject, the
fulfillment of a prestation to give, to do or not to
do
Real Rights Personal Rights
Definite active subject
who has a right against
ALL persons generally as
an indefinite passive
subject
Definite active subject
(creditor) and a definite
passive subject (debtor)
Object is generally a
corporeal thing
Subject matter is
always an incorporeal
thing
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Real Rights Personal Rights

Generally extinguished by
the loss or destruction of
the thing over which it is
exercised
Personal right survives
the subject matter
It is directed against the
whole world, giving rise to
real actions against 3rd
persons
It is binding or
enforceable only
against a particular
person giving rise to
personal actions
against such debtor
(2) Real action v. Personal action (Rule 4 Sec 1-2)
Real action actions affecting title to or
possession of real property or any interest therein
Personal action all other actions
(3) Action in rem v. Action in personam v. Action
quasi in rem
Action in rem action against a property,
judgment binding against the whole world
Action in personam action against a specific
person, judgment binding against that particular
person

Action quasi in rem action against a specific

property with respect to a person
REMEDIES

(1) Self-help [NCC 429-430]

(a) The owner may use such force as may be
reasonably necessary to repel or prevent an
actual or threatened unlawful physical
invasion or usurpation of his property.
(b) Every owner may enclose or fence his land or
tenements by any other means without
detriment to servitudes constituted thereon.
(2) Actions to recover ownership and possession of
real property
RIGHT TO RECOVER POSSESSION

Immovable Property
(1) Accion Reivindicatoria: Recovery of ownership of
real property
(a) Including but not limited to possession
(b) Prescription of Action: 30 years
(2) Accion Publiciana: Recovery of a better right to
possess (de jure)
(a) Judgment as to who has the better right of
possession
(b) Also, actions for ejectment not filed within 1
year must be filed as accion publiciana
(c) Prescription: 10 years
Distinction between forcible entry and unlawful
detainer
(1) Forcible Entry: Lawful possessor deprived through
FISTS:
(a) FISTS (Force, Intimidation, Strategy, Threats,
Stealth)
(b) Prescription: 1 year from dispossession (force,
intimidation, threats) or from knowledge of
dispossession (strategy, stealth)
(2) Unlawful Detainer: Possessor refused to vacate
upon demand by owner
(a) Legal possession (by permission/ tolerance)
becomes unlawful upon failure to vacate
(b) Prescription of action: 1 year from last notice
to vacate
Actions for recovery of possession of movable
property
Replevin
(1) for manual delivery of property
(2) Prescription of Right: 4 years (GF) or 8 years (BF)
Requisites for recovery of property [NCC 434]
(1) Property must be identified
Through a relocation survey and a title properly
identifying boundaries and location
(2) Plaintiff must rely on the strength of his title and
not on weakness of defendants title
(a) Right must be founded on positive title and
not on lack or insufficiency of defendants
(b) Ei incumbit probatio qui dicit, non qui negat:
He who asserts, not he who denied must

prove
LIMITATIONS ON OWNERSHIP
LIMITATIONS ON THE RIGHTS OF OWNERSHIP PROVIDED
BY LAW

General limitations taxation, eminent domain,

police power
(1) Police Power: Property taken with no
compensation for general welfare
(a) When any property is condemned or seized by
competent authority in the interest of health,
safety or security, the owner thereof shall not
be entitled to compensation, unless he can
show that such condemnation or seizure is
unjustified. [Art. 436, Civil Code]
(b) Requisites: To justify the exercise of police
power, the following must appear:
(i) The interests of the public generally,
require such interference (as distinguished
from those of a particular class)
(ii) The means are reasonably necessary for
the accomplishment of a purpose, and not
unduly oppressive
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(2) Taxation: Forced contribution to the operation of

government
(3) Eminent Domain: Property taken for public
use/purpose, but subject to due process and
payment of just compensation
Requisites To justify the exercise of the right of
eminent domain, the following requisites must all
be present:
(a) Private property as the object of the
expropriation;
(b) The property is taken by the State or by
competent authority;
(c) The purpose of the taking is for public use;
(d) The taking must be attended with due
process of law;
(e) There is payment of just compensation
Specific Limitations imposed by law, sic utere tuo,
nuisance, stat of necessity, easements voluntarily
imposed by owner: servitudes, mortgages imposed
by contract
(1) Legal Servitudes: once requisites are satisfied, the
servient owner may ask the Court to declare the
existence of an easement
(a) Art. 644 & 678: Aqueduct
(b) Art. 679: Planting of trees
(c) Art. 670: Light and View
(d) Art. 649 & 652: Right of Way
(e) Art. 637: Passage of water from upper to
lower tenements
(f) Art. 676: Drainage of buildings
(g) Art. 684-687: Lateral and subjacent support
(2) Must not injure the rights of a third person

(a) Sic Utere Tuo Ut Alienum Non Laedas

(b) The owner of a thing cannot make use thereof
in such manner as to injure the rights of a
third person. [NCC 431]
(3) Act in State of Necessity
The owner of a thing has no right to prohibit the
interference of another with the same, if the
interference is necessary to avert an imminent
danger and the threatened damage, compared to
the damage arising to the owner from the
interference, is much greater. The owner may
demand from the person benefited, indemnity for
the damage to him. (NCC 432)
(4) Nuisance - A nuisance is any act, omission,
establishment, business, condition of property, or
anything else which:
(a) Injures or endangers the health or safety of
others; or
(b) Annoys or offends the senses; or
(c) Shocks, defies or disregards decency or
morality; or
(d) Obstructs or interferes with the free passage
of any public highway or street, or any body of
water; or
(e) Hinders or impairs the use of property. (NCC
694)
Summary of Actions:
Action
Venue
Summon
Prayer
Basis
Prescription
Forcible Entry/Unlawful
Detainer
Real Action In personam Possession Prior physical
possession
1 year
Accion Publiciana
Real Action In personam Possession Real right of
Possession
10 years
[NCC 555(4)]
Accion Reividicatoria
Real Action In personam Possession Ownership GF: 10 years
BF: 30 years
[NCC 1137]
Unless--Torrens Title -- Unless
laches
Reconveyance Real Action In personam Title Ownership 10 years
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Action
Venue

Summon
Prayer
Basis
Prescription
(NCC 1456)
Quieting of Title
Real Action Quasi-in rem Quieting of
Title
Ownership Imprescriptible
Replevin
Personal
Action
In personam Possession Ownership GF: 4 years
BF: 8 years

Accession

Accession the right by virtue of which the owner of

a thing becomes the owner of everything which is
produced thereby, or which is incorporated or
attached thereto, either naturally or artificially. [NCC
440]
Accessories things joined to or included with the
principal thing for the latters embellishment, better
use, or completion.
CLASSIFICATION OF ACCESSION
(1) Accession Discreta (fruits) the right pertaining
to the owner of a thing over everything produced
thereby (by internal forces)
(2) Accession Continua the right pertaining to the
owner of a thing over everything that is
incorporated or attached thereto either naturally
or artificially; by external forces (by external
forces)
(a) Over Immovables
(i) Industrial
(ii) Natural
(1) Alluvion
(2) Avulsion
(3) Change of Course of River
(4) Formation of Islands
(b) Over Movables
(i) Conjunction and Adjunction
(ii) Commixtion and Confusion
(iii) Specification
WITH RESPECT TO IMMOVABLES:
Accession Discreta - Right of ownership to the fruits
[NCC 441]
General Rule: To the owner of the principal belongs
the natural, industrial and civil fruit.
Exception: [PULA]
(1) Possession in good faith
(2) Usufruct
(3) Lease
(4) Antichresis
(a) He who receives the fruits has the obligation

to pay the expenses made by a third person in

their production, gathering, and preservation.
[NCC 443]
(b) Necessary expenses of production, gathering
and preservation must be borne by the
receiver of the fruits
Fruits all periodical additions to a principal thing
produced by forces inherent to the thing itself
Kinds of Fruits
(1) Natural spontaneous products of soil and the
young and other products of animals [NCC 442
(1)]
Under the rule partus sequitur ventrem, to the
owner of female animals would also belong the
young of such animals although this right is lost
when the owner mixes his cattle with those of
another.
(2) Industrial produced by lands of any kind
through cultivation or labor [NCC 442 (2)]
Standing trees are not fruits since they are
considered immovables although they produce
fruits themselves. However, they may be
considered as industrial fruits when they are
cultivated or exploited to carry on an industry.
(3) Civil Fruits easily prorated for under NCC 544
they are deemed to accrue daily and belong to
the possessor in good faith in that proportion
Note:
(a) Natural and Industrial Fruits are real property
while still ungathered
(b) Only such as are manifest or born are
considered as natural or industrial fruits
Principles Applicable to Accession Discreta
(1) Time of Accrual depending on kind:
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(a) Annuals: from the time seedlings appear on

the ground
(b) Perennials: from the time fruits actually
appear on the plants
(c) Young of animals: from the time they are in
the womb, although unborn beginning of
maximum ordinary period of gestation
Fowls: from the time of incubation
(2) A receiver of fruits has the obligation to pay the
expenses incurred by a third person in the
production, gathering and preservation. [NCC
443]
(a) Exception: Receiver does not have to pay if
fruits are recovered before gathering from a
possessor in bad faith, receiver does NOT have
to pay indemnity
(b) But if recovered after fruits have been
gathered, receiver must pay since the fruits
have been separated from immovable, hence
accession principles will not apply

Principles Applicable to Accession Continua

(1) Accession Continua Artificial or Industrial: Building,
planting or sowing on land owned by another
(over immovables)
General Rule: Whatever is built, planted or sown
on the land of another + improvements or repairs
made thereon, belong to the owner of the land
subject to the rules on BPS.
Presumptions:
(a) All works, sowing and planting are presumed
made by the owner
(b) All works are presumed made at the owners
expense, unless the contrary is proved
(c) The owner of the principal thing owns the
natural, industrial and civil fruits, except when
the following persons exist:
(i) Possessor in Good Faith
(ii) Usufructuary
(iii) Lessee
(iv) Antichretic creditor
Meaning of bad faith
(a) On the part of the landowner: Whenever the
building, planting or sowing was done with
the knowledge and without opposition on his
part
(b) On the part of owner of materials: Allows the
use of his materials without protest
(c) On the part of the builder, planter and sower:
Knows that he does not have title to the land,
nor the right to build thereon OR no
permission of the owner of the materials to
pay their value
Note:
(a) Bad faith leads to liability for damages and the
loss of the works or the improvement without
reimbursement
(b) Bad faith of one party neutralizes the bad faith
of the other
(2) Accession Continua Natural: Land deposits, etc.
(a) Alluvium: Soil is gradually deposited on banks
adjoining the river
Requisites
(i) Deposit of soil or sediment is gradual
and imperceptible
(ii) As a result of the action of the currents
of the waters of the river
(iii) Land where the accretion takes place is
adjacent to the banks of the rivers
(iv) Deemed to Exist: When the deposit of
the sediment has reached a level higher
than the highest level of the water
during the year
Effect
(i) Land automatically owned by the
riparian owner

(ii) BUT does not automatically become

registered property
Rationale
(i) To offset the owners loss from possible
erosion due to the current of the river
(ii) Compensate for the subjection of the
land to encumbrances and legal
easements
(b) Avulsion: A portion of land is segregated from
one estate by the forceful current of a river,
creek or torrent and transferred to another
Requisites
(i) Segregation and transfer of land is
sudden and abrupt
(ii) Caused by the current of the water
(iii) Portion of land transported must be
known and identifiable
OR
(iv) Can also apply to sudden transfer by
other forces of nature such as land
transferred from a mountain slope
because of an earthquake
Effect:
The ownership of the detached property is
retained by the owner subject to removal
within 2 years from the detachment
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(c) Change Of Course Of River

Requisites
(i) Change in the natural course of the
waters of the river
(ii) Such change causes the abandonment
of the river beds
Natural Bed: ground covered by its waters
during ordinary floods.
Such change is sudden or abrupt
Results:
(i) Owners whose lands are occupied by the
new course automatically become
owners of the old bed, in proportion to
the area they lost
(ii) Owners of the lands adjoining the old
bed are given the right to acquire the
same by paying the value of the land
Not exceeding the value of the land
invaded by the new bed (the old property
of the owner)
(iii) The new bed opened by the river on a
private estate shall become of public
dominion
(d) Formation of Islands
They belong to the State if:
(i) Formed on the SEAS within the
jurisdiction of the Philippines
(ii) Formed on LAKES

(iii) Formed on NAVIGABLE or FLOATABLE

RIVERS
(1) Capable of affording a channel or
passage for ships and vessels
(2) Must be sufficient not only to float
bancas and light boats, but also
bigger watercraft
(3) Deep enough to allow unobstructed
movements of ships and vessels
(4) TEST: can be used as a highway of
commerce, trade and travel
They belong to the Owners of the nearest
margins or banks if
(i) Formed through successive accumulation
of alluvial deposits
(ii) On NON-NAVIGABLE and NONFLOATABLE
RIVERS
(iii) If island is in the middle: divided
longitudinally in half.
Landowner
Good Faith
Bad Faith
Builder,
Planter,
Sower
[BPS]
Good Faith
Rights of Landowner [NCC 448]:
(a) Buy (only after payment of indemnity
under NCC 546 and 548 to BPS)
546 and 548 Necessary, Useful and
Ornamental
(b) Sell to BP (unless the value of the land is
considerably more than that of the
building or trees)
Remedy: Rent to BP if L does not want to
buy
(c) Rent to S
Absolute Duties of Landowner [NCC
447]:
(a) Pay damages
(b) Buy or pay for value
(c) Allow removal
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Landowner
Good Faith
Bad Faith
Bad Faith
Absolute Right of Landowner [NCC 449-452]
(a) Get
(b) Demolish the work of B at the
expense of B
(c) Removal of PS at the expense of PS
(d) Sell to BP
(e) Rent to the S

(f) Damages
SAME AS
GF: GF
Landowner
Good Faith
Bad Faith
Material
Man
Good
Faith
Rights of Landowner: [NCC 447]
Buy unless M can remove without
damage
Absolute Duties of Landowner: [NCC
447]
(1) Pay damages
(2) Buy or pay for value
(3) Allow removal
Bad
Faith
Absolute Right of Landowner [NCC 447]
Get
SAME AS
GF: GF
Case 1: Landowner is BPS using material of another
Landowner and BPS Owner of Material
Good faith
Right to acquire the improvements after paying the
value of materials.
Good faith
(1) Limited right of removal if there would be no injury to
work constructed, or without plantings or
constructions being destroyed. [Article 447]
(2) Right to receive payment for value of materials
Bad faith
Acquire BPS after paying its value and paying indemnity
for damages [Article 447] but subject to OMs right to
remove
Good faith
(a) Right to receive payment for value of materials
(b) Absolute right of removal of the work constructed in
any event
(c) Right to be indemnified for damages
Good faith
(1) Right to acquire the improvements without paying
indemnity
(2) Right to acquire indemnity for damages if there are
hidden defects known to OM
Bad faith
Lose materials without right to indemnity
Bad faith
Same as though acted in good faith under Article 453
Bad faith
Same as though acted in good faith under Article 453
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Case 2: BPS builds, plants, or sows on anothers ;and using his own materials
Landowner BPS and Owner of Material
Good faith
Landowner has option to:
(a) Acquire the improvement after paying indemnity
which may be the original cost of improvement OR
increase in value of the whole brought about by the
improvement
(b) Sell the land to the BP or collect rent from sower
UNLESS value of land is more than the thing built,
planted or sown or BP shall pay rent fixed by parties
or by the court in case of disagreement.
NOTE: Landowner can be forced to choose under pain
of direct contempt or court can choose for him.
Good faith
BPS has right to retain (right of retention) the land until
the payment of indemnity
NOTE: During this period BPS is not required to pay
rent.
Good faith
Landowner has right to collect damages in any case and
option to:
(a) Acquire improvements without paying indemnity if
the improvements are still standing on the land
(b) Sell the land to BP or collect rent from the sower
unless value of the improvements in which case
there will be a forced lease
(c) Order demolition of improvements or restoration of
land to its former condition at the expense of the
BPS
Landowner must pay for necessary expenses for
preservation
Bad faith
(1) Pay damages to landowner
(2) BPS lose materials without right to indemnity
(3) No right to refuse to buy the land
(4) Recover necessary expenses for preservation of land
Bad faith
(1) Landowner must indemnify BPS for the
improvements and pay damages as if he himself did
the BPS
(2) Landowner has no option to sell the land and cannot
compel BPS to buy the land unless BPS agrees to
Good faith
BPS has right to :
(1) Be indemnified for damages
(2) Remove all improvements in any event
Bad faith
Same as though acted in bad faith under Article 453
Bad faith
Same as though acted in bad faith under Article 453
Case 3: BPS builds, plants or sows on anothers land with materials owned by third persons
Landowner BPS Owner of Material
Good faith
(a) Right to acquire improvements

and pay indemnity to BPS;

subsidiarily liable to OM
(b) Has option to:
(1) Sell land to BP except if the
value of the land is
considerably more
(2) Rent to sower
Good faith
(1) Right of retention until necessary
and useful expenses are paid
(2) Pay value of materials to OM
Good faith
(1) Collect value of material
primarily from BPS and
subsidiarily liable for landowner
if BPS is insolvent
(2) Limited right of removal
Good faith
(1) Right to acquire improvements
and pay indemnity to BPS
(2) Has option to:
(1) Sell land to BP except if the
value of the land is
Good faith
(1) Right of retention until necessary
and useful expenses are paid.
(2) Keep BPS without indemnity to
OM and collect damages from
him
Bad faith
(1) Lose the material without right
to indemnity
(2) Must pay for damages to BPS
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Landowner BPS Owner of Material

considerably more
(2) Rent to sower
(3) Without subsidiary liability for
cost of materials
Good faith
(1) Landowner has right to collect
damages in any case and option
to:
(1) Acquire improvements w/o
paying for indemnity; or
(2) Demolition or restoration; or
(3) Sell to BP, or to rent to sower
(2) Pay necessary expenses to BPS
Bad faith
Recover necessary expenses for
preservation of land from landowner
unless landowner sells land
Bad faith
(1) Recover value from BPS (as if
both are in good faith)

(2) If BPS acquires improvement,

remove materials if feasible w/o
injury
(3) No action against landowner but
liable to landowner for damages
Bad faith
Same as when all acted in good
faith under Article 453
Bad faith
Same as when all acted in good
faith under Article 453
Bad faith
Same as when all acted in good
faith under Article 453
Bad faith
(1) Acquire improvement after
paying indemnity and damages
to BPS unless latter decides to
remove
(2) Subsidiarily liable to OM for
value of materials
Good faith
(1) May remove improvements
(2) Be indemnified for damages in
any event
Good faith
(1) Remove materials if possible
w/o injury
(2) Collect value of materials from
BPS; subsidiarily from landowner
Bad faith
(1) Acquire improvements after
indemnity; subsidiarily liable to
OM for value of materials
(2) Has option to:
(a) Sell the land to BP except if
the value of the land is
considerably more
(b) Rent to sower
Bad faith
(a) Right of retention until necessary
expenses are paid
(b) Pay value of materials to OM and
pay him damages
Good faith
(a) Collect value of materials
primarily from BPS and
subsidiarily from landowner
(b) Collect damages from BPS
(c) If BPS acquires improvements,
remove materials in any event
Good faith
(a) Acquire improvement after
paying indemnity; subsidiarily
liable to OM

(b) Landowner has option to:

(a) Sell land to BP except if value
of land is considerably more
(b) Rent to sower
Bad faith
(1) Right of retention until necessary
expenses are paid
(2) Pay value of materials to OM
(3) Pay damages to OM
Good faith
- Collect value of materials
primarily from BPS and
subsidiarily from landowner
- Collect damages from BPS
- If BPS acquires improvements,
absolute right of removal in any
event
Bad faith
Acquire improvements and pay
indemnity and damages to BPS
unless latter decides to remove
materials
Good faith
(1) Receive indemnity for damages
(2) Absolute right of removal of
improvements in any event
Bad faith
(1) No right to indemnity
(2) Loses right to material
WITH RESPECT TO MOVABLE PROPERTY

Three Types:
(1) Conjunction or Adjunction - process where 2
movables belonging to different owners are
attached to each other to form a single object
(2) Mixture the union of material where the
components lose their identity
Kinds:
(a) Commixtion mixture of solids
(b) Confusion mixture of liquids and gases
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(3) Specification transforming/giving of a new form

to anothers material through labor
Adjunction
Requisites
(1) There are 2 movables belonging to 2 different
owners
(2) They are united in such a way that they form a
single object
(3) They are so inseparable that their separation
would impair their nature or result in substantial
injury to either component
Kinds of Adjunction
(1) Inclusion or engraftment e.g. a diamond is set
on a gold ring
(2) Soldadura or soldering e.g. when lead is united

or fused to an object made of lead

(a) It is ferruminacion if both the accessory and
principal objects are of the same metal; and
(b) Plumbatura, if they are of different metals
(3) Escritura or writing e.g. when a person writes on
paper belonging to another;
(4) Pintura or painting e.g. when a person paints on
canvas belonging to another;
(5) Tejido or weaving e.g. when threads belonging
to different owners are used in making textile
Ownership of new object formed by adjunction
(1) If union was made in good faith, owner of
principal thing acquires the accessory, with
obligation to indemnify the owner of the
accessory for its value in its uncontroverted state
(2) If union was in bad faith, NCC 470 applies:
(a) Owner of accessory in bad faith loses the thing
incorporated and has the obligation to
indemnify the owner of the principal thing for
damages
(b) If owner of principal is in bad faith, owner of
the accessory has a right to choose between
the owner of principal paying him its value or
that the thing belonging to him be separated,
even though for this purpose it be necessary
to destroy the principal thing; and in both
cases, there shall be indemnity for damages
Test to determine the principal thing
In the order of application, the principal is that:
(1) To which the other has been united as an
ornament or for its use or perfection (Rule of
importance and purpose)
(2) Of greater value
(3) Of greater volume
(4) That of greater merits, taking into consideration
all the pertinent legal provisions, as well as the
comparative merits, utility and volume of their
respective things
When separation allowed
(1) Separation without injury
(2) Accessory much more precious
(a) Owner of accessory may demand separation
even though the principal thing may suffer
(b) Owner who caused the union shall bear the
expenses for separation even if he acted in
good faith
(3) Owner of principal in bad faith
Mixture
Kinds of Mixtures:
(1) Commixtion: mixture of solid things
(2) Confusion: mixture of liquid things
Rules:
(1) Mixture by will of the owners
(a) First governed by their stipulations
(b) In the absence of stipulation, each owner

acquires a right or interest in the mixture in

proportion to the value of his material
(2) Mixture caused by an owner in good faith or by
chance
(a) Share of each owner shall be proportional to
the value of the part which belonged to him
(b) If things mixed are exactly the same kind and
quality, divide mixture equally/proportionally
(c) If things mixed are of different kind or quality,
a co-ownership arises
(d) If they can be separated without injury,
owners may demand separation
(e) Expenses borne by owners pro rata
(f) NOTE: Good faith does not necessarily
exclude negligence, which gives rise to
damages
(3) Mixture caused by an owner in bad faith
(a) Actor forfeits the thing belonging to him
(b) Actor also becomes liable for damages
(4) Mixture made with knowledge and without
objection of the other owner
Rights to be determined as though both acted in
good faith
Specification
Definition:
Takes place when the work of a person is done on the
material of another, such material, in consequence of
the work itself, undergoes a transformation
Rules:
(1) Person in good faith
General rule:
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Worker becomes the owner but must indemnify

owner (who was also in good faith) for the value
of the material
Exception:
If material is more valuable than the new thing,
owner of material may choose:
(a) To take the new thing but must pay for the
work or labor
(b) To demand indemnity for the material
If the owner was in bad faith, maker may
appropriate the new thing without paying the
owner OR require the owner to pay him the value
of the thing or his work, with right to indemnity
(2) Person in bad faith
General rule:
(a) Owner may either appropriate the new thing
to himself without paying the maker OR
(b) Owner may demand value of material plus
damages
Exception:
The first option is not available in case the value
of the work, for artistic or scrientific reasons, is
considerably more than that of the material

(3) Person made use of material with consent and

without objection of owner
Rights shall be determined as though both acted
in good faith

Quieting of Title or Interest in

and Removal or Prevention of
Cloud over Title to or Interest
in Real Property
IN GENERAL
(1) Applicable to real property
(2) Basis: Equity comes to the aid of the plaintiff who
would suffer if the instrument (which appear to
be valid but is in reality void, ineffective, voidable
or unenforceable) was to be enforced.
PURPOSE
(1) To declare:
(a) The invalidity of a claim on a title
(b) The invalidity of an interest in property
(2) To free the plaintiff and all those claiming under
him from any hostile claim on the property.
NATURE: QUASI IN REM
(a) A suit against a particular person or persons in
respect to the res and the judgment will apply
only to the property in dispute.
(b) The action to quiet title is characterized as
proceeding quasi in rem. Technically, it are
neither in rem nor in personam. In an action
quasi in rem, an individual is named as defendant.
However, unlike suits in rem, a quasi in rem
judgment is conclusive only between the parties.
[Spouses Portic v. Cristobal]
JUSTIFICATIONS FOR QUIETING OF TITLE
(1) To prevent future or further litigation on the
ownership of the property
(2) To protect the true title and possession
(3) To protect the real interest of both parties
(4) To determine and make known the precise state
of the title for the guidance of all
THE ACTION TO QUIET TITLE DOES NOT APPLY:
(1) To questions involving interpretation of
documents
(2) To mere written or oral assertions of claims
(a) Unless made in a legal proceeding
(b) Or asserting that an instrument or entry in
plaintiffs favor is not what it purports to be
(3) To boundary disputes
(4) To deeds by strangers to the title unless
purporting to convey the property of the plaintiff
(5) To instruments invalid on their face
(6) Where the validity of the instrument involves a
pure question of law
REQUIREMENT

REQUISITES OF AN ACTION TO QUIET TITLE

(1) There is a CLOUD on title to real property or any

interest to real property.
(2) The plaintiff must have legal or equitable title to,
or interest in the real property.
(3) Plaintiff must return the benefits received from
the defendant.
THERE IS A CLOUD ON TITLE TO REAL PROPERTY OR ANY
INTEREST TO REAL PROPERTY

Cloud on title means a semblance of title, either

legal or equitable, or a claim or a right in real
property, appearing in some legal form but which is,
in fact, invalid or which would be inequitable to
enforce.
A cloud exists if:
(1) There is a claim emerging by reason of:
(a) Any instrument e.g. a contract, or any deed of
conveyance, mortgage, assignment, waiver,
etc. covering the property concerned
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(b) Any record, claim, encumbrance e.g. an

attachment, lien, inscription, adverse claim, lis
pendens, on a title
(c) Any proceeding e.g. an extrajudicial partition
of property
(2) The claim should appear valid or effective and
extraneous evidence is needed to prove their
validity or invalidity.
(a) Test: Would the owner of the property in an
action for ejectment brought by the adverse
party be required to offer evidence to defeat a
recovery?
(b) As a general rule, a cloud is not created by
mere verbal or parole assertion of ownership
or an interest in property.
(3) Such instrument, etc. is, in truth and in fact,
invalid, ineffective, voidable, or unenforceable, or
has been extinguished or terminated, or has been
barred by extinctive prescription.
(4) Such instrument, etc. may be prejudicial to the
true owner or possessor.
THE PLAINTIFF MUST HAVE LEGAL OR EQUITABLE TITLE
TO, OR INTEREST IN THE REAL PROPERTY [NCC 477]

(1) Legal title: the party is the registered owner of the

property.
(2) Equitable title: the person has the beneficial
ownership of the property.
PLAINTIFF MUST RETURN THE BENEFITS RECEIVED FROM
THE DEFENDANT [NCC 479]

QUIETING OF TITLE V. REMOVAL OF CLOUD

REQUISITES OF AN ACTION TO PREVENT A CLOUD

(1) Plaintiff has a title to a real property or interest

therein
(2) Defendant is bent on creating a cloud on the title
or interest therein. The danger must not be
merely speculative or imaginary but imminent.

(3) Unless the defendant is restrained or stopped,

the title or interest of the plaintiff will be
prejudiced or adversely affected.
PRESCRIPTION/NON-PRESCRIPTION OF
ACTION
PRESCRIPTION OF ACTION

(1) When plaintiff is in possession of the property

the action to quiet title does not prescribe.
The rationale for this rule has been aptly stated
thus:
The owner of real property who is in possession
thereof may wait until his possession is invaded
or his title is attacked before taking steps to
vindicate his right. A person claiming title to real
property, but not in possession thereof, must act
affirmatively and within the time provided by the
statute. Possession is a continuing right as is the
right to defend such possession. So it has been
determined that an owner of real property in
possession has a continuing right to invoke a
court of equity to remove a cloud that is a
continuing menace to his title. Such a menace is
compared to a continuing nuisance or trespass
which is treated as successive nuisances or
trespasses, not barred by statute until continued
without interruption for a length of time sufficient
to affect a change of title as a matter of law."
[Pingol v. CA]
(2) When the plaintiff is not in possession of the
property, the action to quiet title may prescribe.
(a) 10 yrs. ordinary prescription
(b) 30 yrs. extraordinary prescription

Co-ownership

DEFINITION:
The form of ownership when the ownership of an
undivided thing or right belongs to different persons.
[NCC 484]
REQUISITES:
(1) Plurality of owners
(2) Object must be an undivided thing or right
(3) Each co-owners right must be limited only to his
ideal or abstract share of the physical whole
WHAT GOVERNS CO-OWNERSHIP:
(1) Contracts
(2) Special provisions
(3) Civil Code
CHARACTERISTICS OF CO-OWNERSHIP
(1) There are 2 or more co-owners
(2) There is a single object which is not materially or
physically divided and over which and his ideal
share of the whole
(3) There is no mutual representation by the coowners
(4) It exists for the common enjoyment of the coowners
(5) It has no distinct legal personality
(6) It is governed first of all by the contract of the

parties; otherwise, by special legal provisions,

and in default of such provisions, by the
provisions of Title III on Co-ownership
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THERE ARE IDEAL SHARES DEFINED BUT NOT PHYSICALLY

IDENTIFIED [NCC 485]

(1) The share of the co-owners, in the benefits as

well as in the charges, shall be proportional to
their respective interests.
(2) Any stipulation in a contract to the contrary shall
be void.
(3) The portions belonging to the co-owners in the
co-ownership shall be presumed equal, unless
the contrary is proved
Each co-owner has absolute control over his ideal
share
Every co-owner has absolute ownership of his
undivided interest in the co-owned property and is
free to alienate, assign or mortgage his interest
except as to purely personal rights. While a coowner
has the right to freely sell and dispose of his
undivided interest, nevertheless, as a co-owner, he
cannot alienate the shares of his other co-owners
nemo dat qui non habet. [Acabal v. Acabal]
Mutual respect among co-owners with regard to use,
enjoyment, and preservation of the things as a whole
(1) The property or thing held pro-indiviso is
impressed with a fiduciary character: each coowner
becomes a trustee for the benefit of his coowners
and he may not do any act prejudicial to
the interest of his co-owners.
(2) Until a judicial division is made, the respective
part of each holder cannot be determined. The
effects of this would be:
(a) Each co-owner exercises, together with the
others, joint ownership over the pro indiviso
property, in addition to his use and enjoyment
of the same
(b) Each co-owner may enjoy the whole property
and use it.
Only limitation: a co-owner cannot use or enjoy
the property in a manner that shall injure the
interest of his other co-owners. [Pardell v.
Bartolome]
SOURCES OF CO-OWNERSHIP
Law, contract, succession, testamentary disposition
or donation inter vivos, fortuitous event or chance,
and by occupancy
LAW

(1) Cohabitation: co-ownership between common

law spouses
The Family Code, in the following provisions,
made the rules on co-ownership apply
(a) Article 147: between a man and a woman
capacitated to marry each other

(b) Article 148: between a man and a woman not

capacitated to marry each other
(c) Article 90: if matter is not provided in the FC
Chapter on ACP, then rules on co-ownership
will apply
(2) Purchase creating implied trust: co-ownership
between persons who agree to purchase property
If two or more persons agree to purchase
property and by common consent the legal title is
taken in the name of one of them for the benefit
of all, a trust is created by force of law in favor of
the others in proportion to the interest of each
[NCC 1452]
(3) Easement of Party Wall: co-ownership of partowners
of a party wall (NCC 658)
(4) Condominium Law: co-ownership of the common
areas by holders of units
Sec. 6, RA 4726. The Condominium Act. Unless
otherwise expressly provided in the enabling or
master deed or the declaration of restrictions, the
incidents of a condominium grant are as follows:
(a) Unless otherwise, provided, the common
areas are held in common by the holders of
units, in equal shares, one for each unit.
CONTRACTS

By Agreement of Two or More Persons

Article 494, Civil Code. No co-owner shall be obliged
to remain in the co-ownership. Each co-owner may
demand at any time the partition of the thing owned
in common, insofar as his share is concerned.
Nevertheless, an agreement to keep the thing
undivided for a certain period of time, not exceeding
ten years, shall be valid. This term may be extended
by a new agreement.
A donor or testator may prohibit partition for a
period which shall not exceed twenty years.
Neither shall there be any partition when it is
prohibited by law.
No prescription shall run in favor of a co-owner or coheir
against his co-owners or co-heirs so long as he
expressly or impliedly recognizes the co-ownership.
(1) Two or more persons may agree to create a coownership
(2) Note: there is a 10-year term limit for ownership
by agreement; BUT: Term may be extended by a
new agreement
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By the creation of a Universal Partnership

Of all present property
NCC 1778. A partnership of all present property is
that in which the partners contribute all the property
which actually belongs to them to a common fund,
with the intention of dividing the same among
themselves, as well as all the profits which they may
acquire therewith.
NCC 1779. In a universal partnership of all present

property, the property which belonged to each of the

partners at the time of the constitution of the
partnership, becomes the common property of all
the partners, as well as all the profits which they may
acquire therewith.
A stipulation for the common enjoyment of any other
profits may also be made; but the property which the
partners may acquire subsequently by inheritance,
legacy, or donation cannot be included in such
stipulation, except the fruits thereof.
SUCCESSION

Intestate succession: co-ownership between the heirs

before partition of the estate
NCC 1078. Where there are two or more heirs, the
whole estate of the decedent is, before its partition,
owned in common by such heirs, subject to the
payment of debts of the deceased.
For as long as the estate is left undivided the
heirs will be considered co-owners of the
inheritance.
If one of the heirs dies, his heirs will in turn be coowners
of the surviving original heirs.
TESTAMENTARY DISPOSITION OR DONATION INTER VIVOS

(1) When a donation is made to several persons

jointly, it is understood to be in equal shares, and
there shall be no right of accretion among them,
unless the donor has otherwise provided [NCC
753]
(2) A donor or testator may prohibit partition for a
period which shall not exceed 20 years.
BY FORTUITOUS EVENT OR BY CHANCE

(1) Co-ownership between owners of 2 things that

are mixed by chance or by will of the owners:
Each owner shall acquire a right proportional to
the part belonging to him, bearing in mind the
value of the things mixed or confused [NCC 472]
(2) Hidden Treasure - co-ownership between finder
and owner of the land [NCC 438]
when the discovery is made on the property of
another, or of the State or any of its subdivisions,
and by chance, one-half shall be allowed to the
finder.
BY OCCUPANCY

Harvesting and Fishing: co-ownership by two or more

persons who have seized a res nullius thing
BY ASSOCIATIONS AND SOCIETIES WITH SECRET ARTICLES

[NCC 1775]
Articles are kept secret among the members and any
one of the members may contract in his own name
with third persons:
(1) governed by the provisions relating to coownership
RIGHT OF CO-OWNERS
RIGHT TO THE SHARE IN THE BENEFITS AS WELL AS
CHARGES [NCC 485]

(1) Proportional to their interests

(2) Stipulation to the contrary is void

(3) Portions belonging to the co-owners is presumed

equal
RIGHT TO USE THE THING OWNED IN COMMON [NCC 486]
Limitation:
That he use the thing in accordance with the purpose
for which it is intended
That he uses it in such a way as to not injure the
interest of the co-ownership or prevent the other coowners
from using it
RIGHT TO BRING AN ACTION IN EJECTMENT [NCC 487]
RIGHT TO COMPEL OTHER CO-OWNERS TO CONTRIBUTE TO
THE EXPENSES OF PRESERVATION AND TO THE TAXES

[NCC 488]
(1) Any one of the other co-owners may exempt
himself by renouncing so much of his undivided
interest as may be equivalent to his share of the
expenses and taxes.
(2) No waiver if it is prejudicial to the co-ownership
RIGHT TO REPAIR [NCC 489]
(1) Repairs for preservation may be made at the will
of one of the co-owners but he must first notify
his co-owners
(2) Expenses to improve or embellish, decided upon
by a majority
RIGHT TO OPPOSE ALTERATIONS [NCC 491]
(1) Consent of all the others is needed to make
alterations, even if the alteration benefits all.
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(2) If the withholding of the consent is clearly

prejudicial to the common interest, the courts
may afford relief
(3) Reason for the rule: alteration is an act of
ownership, not of mere administration.
RIGHT TO FULL OWNERSHIP OF HIS PART AND OF THE
FRUITS AND BENEFITS PERTAINING THERETO [NCC 493]
(1) Therefore he may alienate, assign or mortgage it,

and even substitute another person in its

enjoyment
(2) Except: when personal rights are involved.
(3) The effect of the alienation or the mortgage, with
respect to the co-owners, shall be limited to the
portion which may be allotted to him in the
division upon the termination of the coownership
RIGHT TO PARTITION [NCC 494]
(1) Each may demand at any time the partition of the
thing, insofar as his share is concerned
(2) An agreement to keep the thing undivided for a
certain period NOT exceeding 10 years is valid.
(3) Term may be extended by a new agreement
(4) Donor or testator may prohibit partition, period
NOT to exceed 20 years
(5) No partition if prohibited by law
(6) Right does not prescribe
RIGHT TO REDEMPTION [NCC 1619]
(1) May exercise this in case the shares of other coowners

are sold to a third person

(2) If 2 or more co-owners wish to exercise this right
= in proportion to their share in the thing
Note: Rules on Co-Ownership Not Applicable to CPG
or ACP
(1) These are governed by the Family Code
(2) Even void marriages and cohabitation of
incapacitated persons are governed by FC 50,
147, and 148
RULES:
On Renunciation
(1) Other co-owners may choose not to contribute to
the expenses by renouncing so much of his
undivided interest as may be equivalent to his
share of the necessary expenses and taxes
(2) Must be express; thus, failure to pay is not a
renunciation
(3) Requires the consent of other co-owners because it
is a case of dacion en pago (cessation of rights)
involving expenses and taxes already paid (J.B.L.
Reyes)
(4) Cannot renounce his share if it will be prejudicial
to another co-owner
Repairs for preservation
(1) First, notify other co-owners, as far as practicable
(2) Co-owner may advance expenses for preservation
even without prior consent; he is entitled to
reimbursement.
Embellishment or improvements
(1) Notify co-owners of improvements and
embellishments to be made
If no notification, co-owner who advanced the
expenses has the right to reimbursement if he
proves the necessity of such repairs and the
reasonableness of the expense
Exception: If proven that had there been a
notification, they could have hired another who
would charge less or that they know of a store
that sells the needed material at a cheaper price
Only entitled to reimbursement for the amount
that should have been spent had he notified the
others, and difference shall be borne by him
alone
(2) Decision by majority must be followed
TERMINATION/EXTINGUISHMENT
TOTAL DESTRUCTION OF THING OR LOSS OF THE
PROPERTY CO-OWNED

Is there still co-ownership if a building is destroyed?

Yes, over the land and the debris.
MERGER OF ALL INTERESTS IN ONE PERSON
ACQUISITIVE PRESCRIPTION

By whom
(1) A third person [NCC 1106]
(2) A co-owner against the other co-owners
Requisites
(1) Unequivocal acts of repudiation of the rights of

the other co-owners (oust the other co-owners)

(a) Must be shown by clear and convincing
evidence
(b) Must be within the knowledge of the other coowners
(c) Must not be a mere refusal to recognize the
others as co-owners
(2) Open and adverse possession - Not mere silent
possession
Note: there is a presumption that possession of a
co-owner is NOT adverse
Prescription only arises and produces all effects
when the acts are clearly meant to oust the rights
of the other co-owners
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PARTITION OR DIVISION

Effect:
(1) Confers exclusive ownership of the property
adjudicated to him
(2) Co-heirs shall be reciprocally bound to warrant
the title to and the quality of each property
adjudicated
(3) Reciprocal obligation of warranty shall be
proportionate to the respective hereditary shares
of co-heirs
(4) An action to enforce warranty must be brought
within 10 years from the date the right accrues
(5) The co-heirs shall not be liable for the
subsequent insolvency of the debtor of the estate
Unless partition is effected, each heir cannot claim
sole ownership over a definite portion of the land.
Heirs become the undivided owner of the whole
estate Until said partition, he cannot alienate a
specific part of the estate. Until then, they can only
sell their successional rights. [Carvaria v. CA]
Rights against individual co-owners in case of
partition [NCC 497]
(1) The creditors are allowed to take part in the
partition.
(2) Reason for the rule: They own part of the interest
of the co-owners who made the assignment or
alienation.
Partition in case co-owners cannot agree (NCC 498)
Procedure for Partition
(1) Governing rule: Rule 69
(2) How: By agreement of parties or by judicial
decree
(3) Form: Oral or Written (Statute of Frauds does not
operate here because it is not a conveyance of
property but a mere segregation or designation of
which parts belong to whom)
(4) Rules of Court do not preclude agreements or
settlements.
Action for Partition:
(1) W/N the plaintiff is indeed a co-owner of the
property

(2) HOW will the property be divided between the

plaintiff and defendant.
Intervention of creditors and assignees:
(1) The law does not expressly require previous
notice to the creditors and assignees before a
partition, but the right of creditors and assignees
to take part in the division presupposes the duty
to notify.
(2) If notice is not given, the partition will not be
binding on them.
(3) Once notice has been given, it is the duty of
creditors and assignees to intervene and make
known their stand.
(a) If they fail, they cannot question the division
made, except in cases of fraud.
(b) If they formulate a formal question, they can
contest such partition

Possession
DEFINITION [NCC 523]
The holding of a thing or the enjoyment of a right
CONCEPT OF POSSESSION
(1) To possess, in a grammatical sense, means to
have, to physically and actually occupy a thing,
with or without right. (Sanchez Roman)
(2) It is the holding of a thing or a right, whether by
material occupation or by the fact that the thing
or the right is subjected to the action of our will.
(Manresa)
(3) It is an independent right apart from ownership.
Right of Possession
(jus possessionis)
Right to possess
(jus possidendi)
Independent right Incident to
ownership
(4) Possession includes the idea of occupation. It
cannot exist without it. (Exceptions: NCC 537)
CHARACTERISTICS
ESSENTIAL REQUISITES OF POSSESSION

(1) Corpus possessionis: Holding (actual or

constructive) of a thing or exercise of a right, if
right is involved.
(a) General Rule: Possession and cultivation of a
portion of a tract under claim of ownership of
all is a constructive possession of all, if the
remainder is not in adverse possession of
another. [Ramos v. Director of Lands]
(b) Doctrine of constructive possession applies
when the possession is under title calling for
the whole. It does not apply where possession
is without title.
(2) Animus possidendi: Intention to possess
(a) There is no possession if the holder does not
want to exercise the rights of a possessor.

(b) Implied from the acts of the possessor.

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(c) May be contradicted and rebutted by evidence

to prove that the person who is in
possession does not in fact exercise power or
control and does not intend to do so.
DEGREES OF POSSESSION

(1) Mere holding or possession without title and in

violation of the right of the owner
(a) e.g. possession of a thief or usurper of land
(b) Here, both the possessor and the public know
that the possession is wrongful.
(2) Possession with juridical title but not that of
ownership
(a) e.g. possession of a tenant, depository agent,
bailee trustee, lessee, antichretic creditor.
(b) This possession is peaceably acquired.
(c) This degree of possession will never ripen into
full ownership as long as there is no
repudiation of concept under which property is
held.
(3) Possession with just title or title sufficient to
transfer ownership, but not from the true owner
(a) e.g. possession of a vendee from a vendor who
pretends to be the owner.
(b) This degree of possession ripens into full
ownership by lapse of time.
(4) Possession with a just title from the true owner
This is possession that springs from ownership.
CASES OF POSSESSION

Possession for Oneself, or Possession Exercised in

Ones Own Name and Possession in the Name of
Another [NCC 524]
(1) In ones own name the fact of possession and
the right to such possession is found in the same
person.
(2) In the name of another the one in actual
possession is without any right of his own, but is
merely an instrument of another in the exercise of
the latters possession.
Kinds of possession in the name of another
(a) Necessary arises by operation of law
e.g. representatives who exercise possession
in behalf of a conceived child, juridical
persons, persons not sui juris and the conjugal
partnership
(b) Voluntary effected through the mutual
consent of the parties
(i) e.g. agents or administrators appointed
by the owner or possessor.
(ii) Third person may also voluntary exercise
possession in the name of another, but it
does not become effective unless ratified
by the person in whose name it is
exercised.

Possession in the Concept of an Owner, and

Possession in the Concept of a Holder with the
Ownership Belonging to Another [NCC 525]
(1) Possession in Concept of Holder:
(a) One who possesses as a mere holder, not in
the concept of owner, acknowledges in
another a superior right which he believes to
be ownership, whether his belief be right or
wrong.
(b) e.g. tenant, usufructuary, borrower in
commodatum.
(2) Possession in Concept of Owner:
(a) May be exercised by the owner himself or
one who claims to be so.
(b) When a person claims to be the owner of a
thing, whether he believes so or not, acting as
an owner, and performing acts of ownership,
and he is or may be considered as the owner
by those who witness his exercise of
proprietary rights, then he is in the possession
of an owner. This is the kind of possession
that ripens into ownership under Article 540,
when such possession is public, peaceful and
uninterrupted [see Art. 1118].
Effects of Possession in Concept of an Owner
(1) Converted into ownership by the lapse of time
necessary for prescription
(2) Possessor can bring all actions necessary to
protect his possession, availing himself of any
action which an owner can bring, except
accion reivindicatoria which is substituted by
accion publiciana.
(3) He can ask for the inscription of possession in
the registry of property
(4) Upon recovering possession from one who
has unlawfully deprived him of it, he can
demand fruits and damages
(5) He can do on the thing possessed everything
that the law authorizes an owner to do; he
can exercise the right of pre-emption and is
entitled to the indemnity in case of
appropriation.
Possession in Good Faith and Possession in Bad Faith
[NCC 526]
(1) Possessor in good faith one who is unaware that
there exists a flaw which invalidates his
acquisition
(a) Good faith consists in the possessors belief
that the person from whom he received a
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thing was the owner of the same and could

convey his title.
(b) It implies freedom from knowledge and
circumstances which ought to put a person on
inquiry.

(c) The belief of a possessor that he is the owner

of the thing must be based upon the title or
mode of acquisition, such as a sale, a
donation, inheritance or other means of
transmitting ownership; for without this, there
can be no real, well-grounded belief of ones
ownership.
(d) Error in the application of the law, in the legal
solutions that arise from such application, in
the appreciation of legal consequence of
certain acts, and in the interpretation of
doubtful provisions or doctrines, may properly
serve as basis for good faith.
(e) A misconception of the law, no matter how
honest cannot have the effect of making one a
possessor in good faith when he does not
hold a title valid in form or a deed sufficient in
terms to transfer property.
(2) Possessor in bad faith one who knows his title is
defective
(a) Only personal knowledge of the flaw in the
title or mode of acquisition can make him a
possessor in bad faith for bad faith is not
transmissible from one person to another.
(b) Mistake upon a doubtful or difficult question
of law as a basis of good faith
(c) Mistake or ignorance of the law, by itself,
cannot become the basis of good faith. What
makes the error or ignorance a basis of good
faith is the presence of an apparent doubt
or difficulty in the law. In other words, the
law is complex, ambiguous, or vague such
that it is open to two or more interpretations.
(d) When the ignorance of the law is gross and
inexcusable, as when a person of average
intelligence would know the law, such
ignorance cannot be the basis of good faith.
Otherwise, the intendment of Article 3 which
states that, Ignorance of the law excuses no
one from compliance therewith, will be
defeated.
What Things May be Possessed [NCC 530]
Only things and rights which are susceptible of being
appropriated may be the object of possession.
What May Not Be Possessed by Private Persons
(1) Res Communes
(2) Property of Public Dominion
(3) Right under discontinuous and/or non-apparent
easement
ACQUISITION OF POSSESSION
WAYS OF ACQUIRING POSSESSION [NCC 531]
(1) By material occupation
(a) Material occupation used in its ordinary
meaning and not in its technical meaning
under NCC 712, which defines occupation as a

mode of acquiring ownership.

(b) Possession acquired by material occupation is
only possession as a fact, not the legal right of
possession.
(c) Constructive delivery is considered as an
equivalent of material occupation in two
situations where such occupation is essential
to the acquisition of possession:
(i) Tradicion brevi manu takes place when one
who possess a thing by title other than
ownership, continues to possess the same
under a new title, that of ownership.
(ii) Tradicion constitutum possessorium takes
place when the owner alienates the thing,
but continues to possess the same under a
different title.
(2) By subjection to the action of ones will
(a) This mode refers more to the right of
possession than to possession as a fact. The
action of our will must be juridical, in the
sense that it must be according to law.
(b) Includes:
(i) Tradicion symbolica by delivering
some object or symbol placing the
thing under the control of the
transferee
(ii) Tradicion longa manu by the
transferor pointing out to the transferee
the things which are being transferred
(3) By execution of proper acts under legal formalities
(a) This mode refers to juridical acts or the
acquisition of possession by sufficient title
evidenced by the performance of required
formalities.
(b) Examples:
(i) Donations
(ii) Succession
(iii) Contracts (like a sale with right to
repurchase)
(iv) Judicial possession
(v) Execution of judgments
(vi) Execution and registration of public
instruments
(vii) Inscription of possessory information
titles
(c) The execution of the required formalities is
equivalent to delivery of the property
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532]
(1) By the same person
(2) By his legal representative
(3) By his agent
(4) By any person without any power whatsoever but
subject to ratification, without prejudice to
proper case of negotiorum gestio [Arts. 2144, 2149,
BY WHOM MAY POSSESSION BE ACQUIRED [NCC

2150]
(5) Qualifiedly, minors and incapacitated persons
By the same person
Elements of personal acquisition:
(1) Must have the capacity to acquire possession
(2) Must have the intent to possess
(3) The possibility to acquire possession must be
present.
By his legal representative
Requisites of acquisition through another:
(1) That the representative or agent has the intention
to acquire the thing or exercise the right for
another, and not for himself
(2) That the person for whom the thing has been
acquired or the right exercised, has the intention
of possessing such thing or exercising such right
Note:
(a) Bad faith is personal and intransmissible. Its
effects must be suffered only by the person who
acted in bad faith; his heir should not be saddled
with the consequences
(b) Good faith can only benefit the person who has it;
and the good faith of the heir cannot erase the
effects of bad faith of his predecessor.
By any person without any power whatsoever but
subject to ratification, without prejudice to proper
case of negotiorum gestio [NCC 2144, 2149, 2150]
(1) Whoever voluntarily takes charge of the agency
or management of the business or property of
another, without any power from the latter, is
obliged to continue until the termination of the
affair and its incidents, or to require the person
concerned to substitute him, if the owner is in a
position to do so.
(2) This juridical relation does not arise in either of
these instances:
(a) When the property or business is not
neglected or abandoned;
(b) If in fact the manager has been tacitly
authorized by the owner.
Qualifiedly, minors and incapacitated persons [NCC
535]
(1) Incapacitated all those who do not have the
capacity to act (insane, lunatic, deaf-mutes who
cannot read and write, spendthrifts and those
under civil interdiction)
(2) Object of possession things only, not rights.
(3) Method of acquisition material occupation;
acquisition by means for which the incapacitated
person has the capacity, such as acquisition by
succession, testate or intestate, or by donations
propter nuptias, pure and simple donations
WHAT DO NOT AFFECT POSSESSION (NCC 537)
(1) Acts merely tolerated
(a) Those which because of neighborliness or

familiarity, the owner of property allows

another person to do on the property;
(b) Those services or benefits which ones
property can give to another without material
injury or prejudice to the owner, who permits
them out of friendship or courtesy
(c) Acts of little disturbances which a person, in
the interest of neighborliness or friendly
relations permits others to do on his property,
although continued for a long time, no right
will be acquired by prescription
Note: Permissive use merely tolerated by the
possessor cannot affect possession and cannot
be the basis of acquisitive prescription.
Possession to constitute the foundation of
prescriptive right must be possession under claim
of title; it must be adverse. [Cuaycong v.
Benedicto]
(2) Acts executed clandestinely and without the
knowledge of the possessor [NCC 1108]
Possession has to be in the concept of an owner,
public, peaceful and uninterrupted. (UPPO)
(3) Acts of violence as long as the possessor objects
thereto (i.e. he files a case) [NCC 536]
(a) Possession cannot be acquired through force
or intimidation.
Includes forcibly taking away the property
from another and also when one occupied the
property in the property in the absence of
another, and repels the latter upon his return
(b) Effect on Possession: Acts mentioned do not
constitute true possession. They do not
interrupt the period of prescription nor affect
the rights to the fruits.
RULES TO SOLVE CONFLICTS OF POSSESSION (NCC 538)
General Rule: Possession cannot be recognized in two
different personalities, except in cases of copossession
by co-possessors without conflict of
claims of interest.
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In case of conflicting possession preference is given

to:
(1) Present possessor or actual possessor
(2) If there are two or more possessors, the one
longer in possession
(3) If the dates of possession are the same, the one
who presents a title
(4) If all conditions are equal, the thing shall be
placed in judicial deposit pending determination
of possession or ownership through proper
proceedings
EFFECTS OF POSSESSION
(1) Right to be Protected in His Possession (NCC
539)
(2) Entitlement to fruits possessor in good

faith/bad faith (Art. 544, 549)

(3) Reimbursement for ExpensesPossessor in Good
Faith/Bad Faith
RIGHT TO BE PROTECTED IN HIS POSSESSION (NCC 539)
(1) Every possessor has a right to be
respected in his possession; if disturbed,
possessor has a right to be protected in or
restored to said possession.
(2) Every possessor includes all kinds of
possession, from that of an owner to that
of a mere holder, except that which
constitutes a crime.
(3) Reason for the rule: To prevent anyone
from taking the administration of justice
into his own hands. Even the owner
cannot forcibly eject the possessor, but
must resort to the courts.
Actions to Recover Possession:
(1) Forcible entry and Unlawful detainer (Summary
proceedings)
(a) Action by a person deprived of the
possession of any land or building by force,
intimidation, strategy, threat, or stealth
(FISTS) at any time within 1 year after such
unlawful deprivation (Rule 70)
(b) May ask for writ of preliminary mandatory
injunction within 10 days from filing of
complaint in forcible entry (NCC 539).
(c) The same writ is available in unlawful
detainer actions upon appeal. (Art. 1674)
(2) Accion Publiciana
(1) Based on superior right of possession, no
ownership
(2) Action for the recovery of possession of real
property upon mere allegation and proof of a
better title
(3) Accion Reivindicatoria
(1) Recovery of possession based on a claim of
ownership)
(2) An action setting up title and right to
possession
(3) Not barred by a judgment in an action for
forcible entry and unlawful detainer
(4) Action for Replevin
(a) Possession or ownership for movable property
Rules:
(1) Lawful possessor can employ self-help (NCC 429)
(2) To consolidate title by prescription, the
possession must be under claim of ownership,
and it must be peaceful, public and
uninterrupted (UPPO)
(3) It is only the conviction of ownership externally
manifested, which generates ownership.
(4) Acts of possessory character done by virtue of a
license or mere tolerance by the real owner are

not sufficient and will not confer title by

prescription or adverse possession.
(5) The following cannot acquire title by prescription:
(a) Lessees, trustees, pledges, tenants on shares
or planters and all those who hold in the
name or representation of another;
(b) Mere holders placed in possession of the
property by the owner, such as agents,
employees;
(c) Those holding in a fiduciary character, like
receivers, attorneys, depositaries and
antichretic creditors
(d) Co-owner, with regard to common property;
Except: When he holds the same adversely
against all of them with notice to them of the
exclusive claim of ownership
(i) Possession of real property presumes
possession of the movables therein (NCC
542)
(ii) Each co-owner is deemed to have
exclusive possession of the part which
may be allotted to him upon the division,
for the entire period during which the copossession
lasted.
Interruption in the possession of the
whole or a part of a thing possessed in
common shall be to the prejudice of all
the possessors. (NCC 543)
ENTITLEMENT TO FRUITS POSSESSOR IN GOOD
FAITH/BAD FAITH (ART. 544, 549)
(1) Possessor in good faith is entitled to the fruits
received before the possession is legally
interrupted
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(2) Natural and industrial fruits are considered

received from the time they are gathered or
severed
(3) Civil fruits are deemed to accrue daily and belong
to the possessor in good faith in that proportion
Provision is based on the following reasons of equity
(1) The fruits received are generally used for the
consumption and livelihood of the possessor, and
his life and expenses may have been regulated in
view of such fruits
(2) The owner has been negligent in not discovering
or contesting the possession of the possessor; it
would be unjust after the possessor has been
thus allowed to rely on the efficacy of the title, to
require him to return the fruits he has received on
the basis of that title.
(3) Between the owner, who has abandoned his
property and left it unproductive, and the
possessor, who has contributed to the social
wealth, by the fruits he has produced, the law
leans toward the latter

Right of the possessor in good faith

Only limited to the fruits of the thing. He must restore
the fruits received from the time such good faith
ceased. He has no rights to the objects which do not
constitute fruits.
Legal interruption of possession in good faith
Takes place when an action is filed against him
from the time he learns of the complaint, from the
time he is summoned to the trial.
When good faith ceases (NCC 545)
(1) If at the time the good faith ceases, there should
be any natural or industrial fruits, the possessor
shall have a right to a part of the expenses of
cultivation, and to a part of the net harvest, both
in proportion to the time of the possession.
(2) The charges divided on the same basis by the two
possessors.
(a) Charges Those which are incurred, not on
the thing itself but because of it (e.g. taxes,
contributions in favor of the government)
(3) The owner of the thing may give the possessor in
good faith the right to finish the cultivation and
gathering of the growing fruits, as an indemnity
for his part of the expenses of cultivation and the
net proceeds.
(a) The possessor in good faith who refuses to
accept this concession shall lose the right to
be indemnified in any other manner.
When fruits are insufficient
There should only be reimbursement of expenses;
but each possessor should suffer a proportionate
reduction due to the insufficiency of the harvest.
REIMBURSEMENT FOR EXPENSESPOSSESSOR IN GOOD
FAITH/BAD FAITH (NCC 546-552)
Necessary Expenses
(1) Imposed by the thing itself and have no relation
to the desire or purpose of the possessor
(2) They are the cost of living for the thing and
must be reimbursed to the one who paid them,
irrespective of GF or BF.
(a) Only the possessor in GF may retain the thing
until he has been reimbursed therefor
(3) Those imposed for the preservation of the thing.
They are not considered improvements; they do
not increase the value of the thing, but merely
prevent them from becoming useless.
Useful Expenses
(1) Incurred to give greater utility or productivity to
the thing
(2) e.g. Wall surrounding an estate, an irrigation
system, planting in an uncultivated land, a
fishpond, an elevator in the building, electric
lighting system
(3) They are reimbursed only to the possessor in GF
as a compensation or reward for him. Possessor

in BF cannot recover such expenses

(4) If the useful improvements can be removed
without damage to the principal thing, the
possessor in good faith may remove them, unless
the person who recovers the possession refunds
the expenses or pays the increase in value which
the thing may have acquired by reason thereof
Expenses for Luxury
(1) They do not affect the existence or the substance
of the thing itself, but only the comfort,
convenience or enjoyment of the possessor.
(2) They are not the subject of reimbursement,
because the law does not compensate personal
whims or caprices.
(3) e.g. Opening of a garden, placing fountains and
statues in it, adorning the ceilings with paintings,
and the walls with reliefs
Useful Expenses Expenses for Luxury
Those which increased
the income derived from
the thing
Those which merely
embellished the thing
Result: Increase in the
products, either
absolutely, or because of
Result: Benefit or
advantage is only for the
convenience of definite
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Useful Expenses Expenses for Luxury

greater facilities for
producing them
Includes expenses
resulting in real benefit
or advantage to the
thing
possessors
Result: Benefit or
advantage is only for the
convenience of definite
possessors
The utility is for the
possessor or particular
persons alone and is
therefore accidental.
Possessor In Bad Faith
(1) Reimburse the fruits received and those which
the legitimate possessor could have received
(2) Has a right only to the reimbursement of
necessary expenses and the production,
gathering, and preservation of fruits
(3) Does not have right to reimbursement of
expenses for luxury but may remove them as long
as the principal thing suffers no injury, or may sell

them to the owner.

(4) Liable for deterioration or loss in every case, even
if caused by a fortuitous event
a. As opposed to a possessor in good faith, not
liable for the deterioration or loss, except
when proved that he has acted with
fraudulent intent or negligence, after the
judicial summons
Note:
(1) Costs of litigation over the property shall be
borne by every possessor. (NCC 550)
(2) Improvements caused by nature or time shall
always inure to the benefit of the person who has
succeeded in recovering possession (NCC 551)
(1) Includes all the natural accessions referred to
by articles 457-465, and all those which do
not depend upon the will of the possessor.
(e.g. widening of the streets, rising of
fountains of fresh or mineral water, increase
of foliage of trees)
Possessor in GF Possessor in BF
Fruits Received
Entitled to the fruits
while possession is in GF
and before legal
interruption (544)
Must reimburse the
legitimate possessor
(549)
Pending Fruits
Entitled to part of the
expenses of cultivation,
Must reimburse the
legitimate possessor
Possessor in GF Possessor in BF
and to a part of the net
harvest, in proportion to
the time of the
possession.
Indemnity may be, at the
owners option,
1. In money, OR
2. By allowing full
cultivation and gathering
of the fruits (545)
(549)
Charges
Must share with the
legitimate possessor, in
proportion to the time of
the possession (545)
Same as with GF (545)
Necessary Expenses
Right to reimbursement
and retention in the

meantime (546)
Reimbursement only
(546)
Useful Expenses
Right of retention until
reimbursed; Owners
option to reimburse him
either for expenses or for
increase in value which
the thing may have
acquired (546)
Limited right of removal
should not damage
principal and owner does
not exercise option of
paying the expenses or
increase in value (547)
No right to
reimbursement and no
right of removal (547)
Ornamental Expenses
Limited right of removal
(548)
Limited right of removal
(549)
Deterioration or Loss
No liability unless due to
fraud or negligence after
becoming in BF (552)
Liable in every case (552)
Costs of Litigation
Bears cost (550) Bears cost (550)

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LOSS OR UNLAWFUL DEPRIVATION OF A

MOVABLE

POSSESSION OF MOVABLE ACQUIRED IN GOOD FAITH (IN

CONCEPT OF OWNER) IS EQUIVALENT TO TITLE (NCC 559)

(1) Possessor has actual title which is defeasible only

by true owner.
Requisites of Title
(a) Possession in GF
(b) The owner has voluntarily parted with the
possession of the thing
(c) The possession is in the concept of an owner
(2) Nevertheless, one who has lost any movable or
has been unlawfully deprived thereof may recover
it from the person in possession
When the owner can recover
(a) Has lost the thing
(b) Has been unlawfully deprived thereof
(3) If the current possessor has acquired it in good
faith at a public sale, owner must reimburse the
price paid
PERIOD TO RECOVER (NCC 1140, 1132, 1133)
(1) Actions to recover movables prescribe 8 years

from the time the possession thereof is lost,

unless the possessor has acquired the ownership
by prescription for a lesser period
(2) Ownership of movables prescribes through
uninterrupted possession for 4 years in good
faith.
(3) Ownership of personal property also prescribes
through uninterrupted possession for 8 years,
without need of any other condition.
(4) Movables possessed through a crime can never
be acquired through prescription
FINDER OF LOST MOVABLE (NCC 719-720)
(1) Whoever finds a movable, which is not a treasure,
must return it to its previous possessor.
(2) If the previous possessor is unknown, the finder
shall immediately deposit it with the mayor of the
city or municipality where the finding has taken
place.
(3) The finding shall be publicly announced by the
mayor for two consecutive weeks in the way he
deems best.
(4) If the movable cannot be kept without
deterioration, or without expenses which
considerably diminish its value, it shall be sold at
public auction eight days after the publication.
(5) Six months from the publication having elapsed
without the owner having appeared, the thing
found, or its value, shall be awarded to the finder.
The finder and the owner shall be obliged, as the
case may be, to reimburse the expenses.
(6) If the owner should appear in time, he shall be
obliged to pay, as a reward to the finder, onetenth
of the sum or of the price of the thing found
DISTINGUISHED FROM VOIDABLE TITLE (NCC 1506)
(1) Seller of goods with voidable title not avoided at
the time of the sale: buyer acquires a good title to
the goods, provided he buys them in good faith,
for value, and without notice of the seller's defect
of title
(2) A movable lost or which the owner has been
unlawfully deprived acquired by a possessor in
good faith at a public sale - the owner can always
recover the movable provided he reimburses the
price paid.
EFFECTS OF POSSESSION
EFFECTS OF POSSESSION IN THE CONCEPT OF OWNER

Possession may lapse and ripen into full ownership

General Rule: Presumption of just title and cannot be
obliged to show or prove it (NCC 541)
(1) Basis: Possession is presumed ownership, unless
the contrary is proved. This presumption is prima
facie and it prevails until contrary is proved.
(2) Just title that which is legally sufficient to
transfer the ownership or the real right to which it
relates

(3) For the purposes of prescription, there is just title

when the adverse claimant came into possession
of the property through one of the modes
recognized by law for the acquisition of
ownership or other real rights, but the grantor
was not the owner or could not transmit any
right. (NCC 1129)
Exception: For the purposes of prescription, just title
must be proved; it is never presumed (NCC 1131)
(1) Possessor may bring all actions necessary to
protect his possession except reivindicatoria
(2) May employ self-help under Art. 429
(3) Possessor may ask for inscription of such real
right of possession in the registry of property
(4) Has right to the fruits and reimbursement of
expenses (assuming he is possessor in good faith)
(5) Upon recovery of possession which he was
unlawfully deprived of, may demand fruits and
damages
(6) Generally, he can do on the things possessed
everything that the law authorizes the owner to
do until he is ousted by one who has a better
right.
(7) Possession in good faith and possession in bad
faith (Art. 528)
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RIGHTS OF POSSESSOR

PRESUMPTION IN FAVOR OF THE POSSESSORFOR

ACQUISITIVE PRESCRIPTION

(1) Of good faith until contrary is proved (NCC 527)

(a) Presumption is only juris tantum because
possession is the outward sign of ownership.
Unless such proof of bad faith is presented,
the possessor will be held to be in good faith.
(b) So long as the possessor is not actually aware
of any defect invalidating his title, he is
deemed a possessor in good faith.
(2) Of continuity of initial good faith in which
possession was commenced; possession in good
faith does not lose this character except in case
and from the moment possessor became aware or
is not unaware of improper or wrongful possession
(NCC 528)
(a) Good faith ceases from the date of the
summons to appear at the trial
(b) Good faith ceases when there is:
(i) Extraneous evidence
(ii) Suit for recovery of the property by the
true owner
(3) Of enjoyment of possession in the same character
in which possession was required until contrary is
proved (NCC 529)
(4) Of non-interruption of possession in favor of
present possessor who proves possession at a
previous time until the contrary is proved (NCC

554)
(a) Possession is interrupted for the purposes of
prescription, naturally or civilly. (NCC 1120)
(b) Possession is naturally interrupted when
through any cause it should cease for more
than one year (NCC 1121)
(c) Old possession is not revived if a new
possession should be exercised by the same
adverse claimant (NCC 1121)
(d) If the natural interruption is for only one year
or less, the time elapsed shall be counted in
favor of the prescription (NCC 1122)
(e) Civil interruption is produced by judicial
summons to the possessor. (NCC 1123)
(f) Judicial summons shall be deemed not to
have been issued and shall not give rise to
interruption (NCC 1124):
(i) If it should be void for lack of legal
solemnities;
(ii) If the plaintiff should desist from the
complaint or should allow the
proceedings to lapse;
(iii) If the possessor should be absolved from
the complaint
(g) In all these cases, the period of the
interruption shall be counted for the
prescription
(5) Other presumptions with respect to specific
properties of property rights
(a) Of extension of possession of real property to
all movables contained therein so long as in is
not shown that they should be excluded
(b) Non-interruption of possession of hereditary
property (NCC 553)
(i) Possession of hereditary property is
deemed transmitted to the heir without
interruption and from the moment of the
death of the decedent
(c) Of just title in favor of possessor in concept of
owner (NCC 541)
LOSS/TERMINATION OF POSSESSION (NCC 555)
(1) By the abandonment of the thing;
(2) By an assignment made to another either by
onerous or gratuitous title;
(3) By the destruction or total loss of the thing, or
because it goes out of commerce;
(4) By the possession of another, subject to the
provisions of Article 537, if the new possession
has lasted longer than one year. But the real
right of possession is not lost till after the lapse of
ten years.
ABANDONMENT

(1) Includes the giving up of possession, and not

necessarily of ownership by every possessor.
(2) It is the opposite of occupation. It consists of the

voluntary renunciation of all the rights which the

person may have in a thing, with intent to lose
such a thing. To be effective, it is necessary that it
be made by a possessor in the concept of an
owner.
(3) It must be clearly appear that the spes
recuperandi is gone and the animus revertendi is
finally given up.
ASSIGNMENT, EITHER ONEROUS OR GRATUITOUS
Complete transmission of ownership rights to
another person, gratuitously or onerously
POSSESSION BY ANOTHER; IF POSSESSION HAS LASTED
LONGER THAN ONE YEAR; REAL RIGHT OF POSSESSION
NOT LOST AFTER 10 YEARS - (SUBJECT TO NCC 537)
(1) Acts merely tolerated, and those executed
clandestinely and without the knowledge of the
possessor of a thing, or by violence, do not affect
possession.
(2) Possession that is lost here refers only to
possession as a fact (de facto), not the legal right
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PAGE 95

of possession (de jure). It is the possession that

the new possessor acquires.
(3) Real right of possession is lost only after 10 years.
(4) After one year, the actions for forcible entry and
unlawful detainer can no longer be brought. But
accion publiciana may still be instituted to
recover possession de jure
RULES FOR LOSS OF MOVABLES

(1) The possession of movables is not deemed lost so

long as they remain under the control of the
possessor, even though for the time being he may
not know their whereabouts. (NCC 556)
(2) Control judicial control or right, or that the
thing remains in ones patrimony
(3) Wild animals are possessed only while they are
under one's control (NCC 560)
(a) Domesticated or tamed animals - if they retain
the habit of returning to the premises of the
possessor
Kinds of Animals
(1) Wildthose which live naturally independent of
man
(2) Domesticatedthose which, being wild by nature,
have become accustomed to recognize the
authority of man. When they observe this custom,
they are placed in the same category as domestic
and when they lose it, they are considered as
wild.
(3) Domestic or Tamethose which are born and
reared ordinarily under the control and care of
man; they are under the ownership of man, and
do not become res nullius unless they are
abandoned.

Usufruct
CONCEPT (NCC 562):
Usufruct gives a right to enjoy the property of
another with the obligation of preserving its form
and substance, unless the title constituting it or the
law otherwise provides
OBJECTS OF USUFRUCT
(1) Independent Rights
(a) A servitude which is dependent on the
tenement to which it attaches cannot be the
object of usufruct
(2) Things
(a) Non-consumable things
(b) Consumable things, but only as to their value
if appraised, or on an equal quantity and
quality if they were not appraised
(3) Unproductive things
e.g. sterile or absolutely unproductive land, or
things for mere pleasure, such as promenades,
statues or paintings, even if they do not produce
any utility.
CHARACTERISTICS
(1) It is a real right
(2) Of temporary duration
(3) To derive all advantages from the thing due to
normal exploitation
NATURAL CHARACTERISTICS

(1) Includes only the right to use (jus utendi) and the
right to the fruits (jus fruendi)
(2) Usufructuary must preserve the form or
substance of the thing
(a) Preservation is a natural requisite, not
essential because the title constituting it or the
law may provide otherwise
(b) Reason for preserving form and substance
(i) To prevent extraordinary exploitation;
(ii) To prevent abuse, which is frequent;
(iii) To prevent impairment.
(c) Exception: In an abnormal usufruct, alteration
is allowed
(3) Usufruct is extinguished by the death of the
usufructuary
(a) Natural because a contrary intention may
prevail
CLASSIFICATION
BY ORIGIN

(1) Voluntary: created by the will of private persons

(a) By act inter vivos such as contracts and
donations
(i) By alienation of the usufruct
(ii) By retention of the usufruct
(iii) Where a usufruct is constituted inter
vivos and for valuable consideration, the
contract is unenforceable unless in
writing

(b) By act mortis causa such as testament

(2) Legal: as provided by law
Usufruct of parents over the property of
unemancipated children (now limited to the
collective daily needs of the family, FC 26)
(3) Mixed: created both by law and the acts of
persons
(a) The rights and duties of the usufructuary
provided by law may be modified or
eliminated by the parties.
(b) The title constituting the usufruct may validly
authorize the usufructuary to alienate the
thing itself held in usufruct.
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(i) If the usufructuary is authorized to

alienate the thing in case of necessity, it
is the usufructuary who determines the
question of necessity.
BY PERSON ENJOYING RIGHT OF USUFRUCT

(1) Simple: only one usufructuary enjoys the property

(2) Multiple: several usufructuaries enjoy the
property
(a) Simultaneous: at the same time
(b) Successive: one after the other
Limitations on Successive Usufruct
(1) If usufruct is by donation, ALL donees must be
alive. (NCC 756)
(2) Fiduciary or first heir and the second heir must be
alive at the time of the death of the testator.
(NCC 863)
(3) If by testamentary succession, there must be only
2 successive usufructuaries, and both must be
alive or at least already conceived at the time of
the testators death. (NCC 869)
BY OBJECT OF USUFRUCT

Usufruct may be constituted on the whole or a part

of the fruits of the thing or on a right, provided it is
not strictly personal or intransmissible (NCC 564)
Rights
(1) Must not be strictly personal or intransmissible.
(2) Usufruct over a real right is by itself a real right.
(a) Right to receive present or future support
cannot be the object of the usufruct.
Things
(1) Normal: involves non-consummable things where
the form and substance are preserved
(2) Abnormal or irregular: when the usufruct includes
things which cannot be used without being
consumed
(a) The usufructuary has right to make use of
them under the obligation of paying their
appraised value at the termination of the
usufruct, if they were appraised when
delivered.
(b) In case they were not appraised, he has the

right to return the same quantity and quality,

or pay their current price at the time the
usufruct ceases (NCC 574)
(c) In reality, the usufruct is not upon the
consumable things themselves, but upon the
sum representing their value or upon a
quantity of things of the same kind and
quality.
(d) The usufructuary, in effect, becomes the
owner of the things in usufruct, while the
grantor becomes a mere creditor entitled to
the return of the value or of the things of the
same quantity and quality (as if converted
into a simple loan)
BY THE EXTENT OF THE USUFRUCT

As to the fruits
(1) Total: all consumed by the usufruct
(2) Partial: only on certain aspects of the usufructs
fruits
As to object
(1) Singular: only on particular property of the owner
(2) Universal: pertains to the whole property;
A universal usufructuary must pay the debts of
the naked owner, if stipulated. Article 758 and
759 on donations apply.
NCC 758: When the donation imposes upon the
donee the obligation to pay the debts of the
donor, if the clause does not contain any
declaration to the contrary, the former is
understood to be liable to pay only the debts
which appear to have been previously contracted.
In no case shall the donee be responsible for the
debts exceeding the value of the property
donated, unless a contrary intention clearly
appears.
NCC 759: There being no stipulation regarding
the payment of debts, the donee shall be
responsible therefor only when the donation has
been made in fraud of creditors.
The donation is always presumed to be in fraud
of creditors, when at the time thereof the donor
did not reserve sufficient property to pay his
debts prior to the donation.
BY THE TERMS OF THE USUFRUCT

(1) Pure: no terms or conditions

(2) Conditional: either suspensive or resolutory
(3) With a term or period
(a) Ex die: from a certain day
(b) In diem: up to a certain day
(c) Ex die in diem: from a certain day up to a
certain day
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RIGHTS AND OBLIGATIONS OF USUFRUCTUARY

RIGHTS

As to Thing and Its Fruits

Right to enjoy the property to the same extent as the

owner, but only with respect to its use and the receipt of
its fruits.
(1) Usufructuary cannot extract products which do
not constitute fruits because he is bound to
preserve the form and substance of the thing.
(2) Usufructuary rights may be transferred, assigned
or otherwise disposed of by the usufructuary.
(3) Not exempt from execution and can be sold at
public auction.
As to hidden treasure, usufructuary is considered a
stranger without a right to a share, unless he is also the
finder of the treasure
(1) With respect to hidden treasure which may be
found on the land or tenement, he shall be
considered a stranger
(2) Hidden treasure belongs to the owner of the
land, building, or other property on which it is
found.
(3) Nevertheless, when the discovery is made on the
property of another, or of the State or any of its
subdivisions, and by chance, one-half thereof
shall be allowed to the finder.
Right to fruits pending at the beginning of usufruct
Fruits pending at the
beginning of the usufruct
Fruits pending at the
beginning of the usufruct
Belong to the
usufructuary
Belong to the naked
owner
Without need to
reimburse the expenses to
the owners
The owner shall
reimburse to the
usufructuary ordinary
cultivation expenses
from the proceeds of the
fruits (not to exceed the
value of the fruits)
Without prejudice to the
right of 3rd persons e.g. if
the fruits had been
planted by a possessor in
good faith, the pending
crop expenses and
charges shall be prorated
between said possessor
and the usufructuary
Rights of innocent 3rd
parties should not be
prejudiced.
Fruits already matured at the time of the termination
of the usufruct, which ordinarily would have already

been gathered by the usufructuary, may remain

ungathered for no fault imputable to him, but
because of malice or an act imputable to the naked
owner or a 3rd person, or even due to force majeure
or fortuitous event.
Right to civil fruits
(1) Civil fruits deemed to accrue daily, and belong
to the usufructuary in proportion to the time the
usufruct may last.
(2) Whenever a usufruct is constituted on the right to
receive a rent or periodical pension, whether in
money or in fruits, or in the interest on bonds or
securities payable to bearer, each payment due
shall be considered as the proceeds or fruits of
such right
(3) Whenever it consists in the enjoyment of benefits
accruing from a participation in any industrial or
commercial enterprise, the date of the
distribution of which is not fixed, such benefits
shall have the same character
(a) In either case they shall be distributed as civil
fruits
Right to enjoy any increase through accessions and
servitudes, including products of hunting and fishing
Right to lease the thing
General rule: The usufructuary may lease the thing to
another but this shall terminate upon the expiration
of the usufruct, saving leases of rural lands, which
shall be considered as subsisting during the
agricultural year
Exceptions:
(1) Legal usufructs cannot be leased.
(2) Caucion juratoria (lease would show that the
usufructuary does not need the property badly)
Effect of the transfer of right:
(1) The transfer or lease of the usufruct does NOT
terminate the relation of the usufructuary with
the owner
(2) Death of the transferee does not terminate the
usufruct but it terminates upon the death of the
usufructuary who made the transfer.
Rules as to Lease
(1) The property in usufruct may be leased even
without the consent of the owner.
(2) The lease should be for the same period as the
usufruct.
(a) EXCEPT: leases of rural lands continues for
the remainder of the agricultural year
(b) A lease executed by the usufructuary before
the termination of the usufruct and subsisting
after the termination of the usufruct must be
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respected, but the rents for the remaining

period will belong to the owner.
(c) If the usufructuary has leased the lands or

tenements given in usufruct, and the usufruct

should expire before the termination of the
lease, he or his heirs and successors shall
receive only the proportionate share of the
rent that must be paid by the lessee. (Art. 568,
Civil Code)
(3) It is the usufructuary and not the naked owner
who has the right to choose the tenant.
(a) As corollary to the right of the usufructuary to
all the rent, to choose the tenant, and to fix
the amount of the rent, she necessarily has
the right to choose herself as the tenant
thereof; and, as long as the obligations she
had assumed towards the owner are fulfilled.
(Fabie v. Gutierrez David)
(4) A lease executed by the owner before the
creation of the usufruct is not extinguished by
such usufruct.
Limitations on the Right to Lease the Property
(1) Usufructuary cannot alienate a thing in usufruct
(a) Cannot alienate or dispose of the objects
included in the usufruct
(b) Cannot renounce a servitude
(c) Cannot mortgage or pledge a thing
(d) EXCEPT:
(i) When the right of usufruct is converted
into the right of ownership
(ii) When the things are consumable (574);
(iii) When the things by their nature are
intended for sale, such as the
merchandise in a commercial
establishment; and
(iv) When the things, whatever their nature,
are delivered under appraisal as
equivalent to their sale
(2) Future crops may be sold but such sale would be
void if not ratified by the owner.
(a) The buyers remedy is to recover from the
usufructuary.
(3) Only voluntary usufruct can be alienated.
(4) The usufructuary-lessor is liable for the act of the
substitute.
(a) A usufructuary who alienates or leases his
right of usufruct shall answer for any damage
which the things in usufruct may suffer
through the fault or negligence of the person
who substitutes him. (Art. 590, Civil Code)
Right to improve the thing, but improvement inures
to the benefit of the naked owner
(1) Usufructuary is not entitled to reimbursement.
(2) Whenever the usufructuary can remove the
improvements without injury to the property in
usufruct, he has the right to do so, and the owner
cannot prevent him from doing so even upon
payment of their value.

(3) This right does not involve an obligation if the

usufructuary does not wish to exercise it, he
cannot be compelled by the owner to remove the
improvements.
(4) This right to remove improvements can be
enforced only against the owner, not against a
purchaser in good faith to whom a clean title has
been issued.
(5) Usufructuary may set off the improvements
against any damage to the property
(a) The improvements should have increased the
value of the property, and that the damages
are imputable to the usufructuary.
(b) Increase in value and the amount of damages
are set off against each other.
(c) If the damages exceed the increase in value,
the difference should be paid by the
usufructuary as indemnity.
(d) If the increase in value exceeds the damages,
and the improvements are of such nature that
they can be removed without injury to the
thing in usufruct, the settlement of the
difference must be agreed upon by the
parties.
(e) If the improvements cannot be removed
without injury, the excess in value accrues to
the owner.
(6) Registration of improvements to protect
usufructuary against 3rd persons
As to the Legal Right of Usufruct Itself
Right to mortgage right of usufruct
(1) The usufructuary may alienate his right of
usufruct, even by a gratuitous title; but all the
contracts he may enter into as such usufructuary
shall terminate upon the expiration of the
usufruct [Art. 572]
(2) Does not include parental usufruct because of
personal and family considerations.
Right to alienate the usufruct except in purely personal
usufructs or when title constituting it prohibits the
same
Parental usufruct is inalienable
OBLIGATIONS

At the Beginning of Usufruct or Before Exercising the

Usufruct
(1) To make, after notice to the owner or his
legitimate representative, an inventory of all the
property, which shall contain an appraisal of the
movables and a description of the condition of
the immovables;
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(2) To give security, binding himself to fulfill the

obligations imposed upon him in accordance with
this Chapter.
Note: These requirements are NOT conditions

precedent to the commencement of the right of the

usufructuary but merely to the entry upon the
possession and enjoyment of the property.
To Make An Inventory:
(1) Requisites
(a) Immovables must be described
(b) Movables must be appraised because they are
easily lost or deteriorated.
(2) Concurrence of the owner in the making of the
inventory
(3) Expenses for the making of the inventory are
borne by the usufructuary
(4) Inventory may be in a private document, except
when immovables are involved (a public
instrument is prescribed to affect 3rd persons)
(5) Failure to make an inventory does not affect the
rights of the usufructuary to enjoy the property
and its fruits.
(a) A prima facie presumption arises that the
property was received by the usufructuary in
good condition
(b) Even if he is already in possession, he may still
be required to make an inventory.
(6) Exception to the requirement of inventory
(a) When no one will be injured , the usufructuary
may be excused from this obligation
To give a bond for the faithful performance of duties as
usufructuary:
(1) Any kind of sufficient security is allowed, e.g.
cash, personal bond, mortgage
(2) No bond is required in the following
(a) No prejudice would result (Art. 585)
(b) Usufruct is reserved by a donor (Art. 584)
(i) Gratitude on the donees part demands
that the donor be excused from filing the
bond
(c) Title constituting usufruct excused
usufructuary
(3) If usufructuary takes possession under a caucion
juratoria (Art. 587)
(a) The security given may be by a personal bond,
a pledge, or a mortgage.
(b) It is only by way of exception that a caucion
juratoria is allowed, and only under the
special circumstances:
(i) Proper court petition
(ii) Necessity for delivery of furniture,
implements or house included in the
usufruct
(iii) Approval of the court
(iv) Sworn promise
(c) A usufructuary under this can neither alienate
his right nor lease the property, for that would
mean that he does not need the dwelling or
the implements and furniture.

(4) Effect of filing a bond

(a) Retroactivity: upon giving the security, the
usufructuary will be entitled to all the benefits
accruing since the time when he should have
begun to receive them.
(5) Effect of failure to give bond (NCC 586)
(a) The owner may demand that the immovables
be placed under administration;
(i) That the movables be sold;
(ii) That the public bonds, instruments of
credit payable to order or to bearer be
converted into registered certificates or
deposited in a bank or public institution;
(iii) That the capital or sums in cash and the
proceeds of the sale of the movable
property be invested in safe securities.
(b) Owner may, until the usufructuary gives
security, retain in his possession the property
in usufruct as administrator, subject to the
obligation to deliver to the usufructuary the
net proceeds, after deducting the sums which
may be agreed upon or judicially allowed him
for such administration.
During the Usufruct
(1) To take care of the thing like a good father of a
family
(2) To undertake ordinary repairs
(3) To notify owner of need to undertake
extraordinary repairs
(4) To pay for annual charges and taxes on the fruits
(5) To notify owner of any act detrimental to
ownership
(6) To shoulder the costs of litigation re usufruct
(7) To answer for fault or negligence of alienee,
lessee or agent of usufructuary
To take care of the thing like a good father of a family
(1) When damages are caused to the property by the
fault or negligence of the usufructuary, the naked
owner need not wait for the termination of the
usufruct before bringing the action to recover
proper indemnity.
(2) The bad use of a thing, which causes
considerable injury, entitles the owner to demand
the delivery and administration of the thing.
(3) The exercise of this remedy does NOT extinguish
the usufruct.
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To undertake ordinary repairs

The usufructuary is obliged to make the ordinary
repairs needed by the thing given in usufruct (NCC
592)
(1) Ordinary repairs:
(a) Such as are required by the wear and tear due
to the natural use of the thing and are
indispensable for its preservation.

(b) Deteriorations or defects arise from the

natural use of the thing;
(c) Repairs are necessary for the preservation of
the thing.
(2) The usufructuary is bound to pay only for the
repairs made during the existence of the usufruct.
(a) If the defects existed already at the time the
usufruct began, the obligation to defray the
ordinary repairs falls upon the owner.
(3) If the defects are caused by the ordinary use of
the thing, the usufructuary may exempt himself
from making the repairs by returning to the
owner the fruits received during the time that the
defects took place.
Except: When the ordinary repairs are due to
defects caused by the fault of the usufructuary
(4) If the usufructuary fails to make the repairs even
after demand, the owner may make them at the
expense of the usufructuary
To notify owner of need to undertake extraordinary
repairs
(1) Extraordinary repairs
(a) Those caused by exceptional circumstances,
whether or not they are necessary for the
preservation of the thing;
(b) Those caused by the natural use of the thing,
but are not necessary for its preservation.
(2) General Rule: Naked owner must make the
extraordinary repairs
(a) Usufructuary obliged to pay legal interest on
the amount while usufruct lasts
(3) If the extraordinary repairs are indispensable, and
the naked owner fails to undertake them, the
usufructuary may make such repairs
(a) Requisites:
(i) There must be due notification to the
naked owner of the urgency if it is not
urgent, there is no obligation to give
notice.
(ii) The naked owner failed to make them
(iii) The repair is needed for preservation
(b) The usufructuary who has made the
extraordinary repairs necessary for
preservation is entitled to recover from the
owner the increase in value which the
tenement acquired by reason of such works.
(c) Usufructuary may retain until he is paid.
To pay for annual charges and taxes on the fruits
It is well settled that a real tax, being a burden upon
the capital, should be paid by the owner of the land
and not by a usufructuary. There is no merit in the
contention of distinguishing public lands into
alienable and indisposable. All properties owned by
the government, without any distinction, are exempt
from taxation. (Board of Assessment Appeals of

Zamboanga del Sur v. Samar Mining Company, Inc.)

To notify owner of any act detrimental to ownership
(NCC 601)
To shoulder the costs of litigation re usufruct (NCC 602)
To answer for fault or negligence of alienee, lessee or
agent of usufructuary (NCC 590)
The usufructuary is made liable for the acts of the
substitute. While the substitute answers to the
usufructuary, the usufructuary answers to the naked
owner.
At the Time of the Termination of the Usufruct
To deliver the thing in usufruct to the owner in the
condition in which he has received it, after
undertaking ordinary repairs
Exception: abnormal usufruct return the thing of
same kind, quantity and quality; if with appraised
value, must return value appraised
SPECIAL CASES OF USUFRUCT
USUFRUCT OVER A PENSION OR PERIODICAL INCOME (NCC
570)
(1) Each payment due shall be considered as the
proceeds or fruits of such right
(2) Shall be distributed as civil fruits
USUFRUCT OF PROPERTY OWNED IN COMMON (NCC 582)
(1) The usufructuary takes the place of the owner as
to:
(a) Management;
(b) Fruits; and
(c) Interest
(2) Effect of partition:
(a) The right of the usufructuary is not affected by
the division of the property in usufruct among
the co-owners.
(b) After partition, the usufruct is transferred to
the part allotted to the co-owner
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USUFRUCT CONSTITUTED ON A FLOCK OR HERD OF

LIVESTOCK (NCC 591)

(1) On sterile stock: same rules on consumable

property govern (i.e. replacement upon
termination)
(2) On fruitful stock
(a) Must replace ordinary losses of the stock with
the young if:
(i) Some animals die from natural causes
(ii) Some animals are lost due to rapacity of
beasts of prey
(b) NO obligation to replace if:
(i) There is a total loss of animals because
of some unexpected or unnatural loss
(like contagious disease or any other
uncommon event, provided the
usufructuary has no fault);
(1) If all perish, the usufructuary should
deliver the remains to the owner.

(ii) There is a partial loss

(1) If a part of the stock perishes, the
usufruct subsists on the remainder.
USUFRUCT OVER FRUIT BEARING TREES AND SPROUT AND
WOODLANDS (NCC 575-576)

The usufructuary can:

(1) Use dead trunks and those cut off or uprooted by
accident.
(2) Make usual cuttings that owner used to do.
(3) Cut the trees that are not useful
USUFRUCT ON A RIGHT OF ACTION (NCC 578)
(1) The action may be instituted in the usufructuarys
name. As the owner of the usufruct, he is properly
deemed a proper party in interest.
(2) If the purpose is the recovery of the property or
right, he is still required under 578 to obtain the
naked owners authority.
(3) If the purpose is to object to or prevent
disturbances over the property, no special
authority from the naked owner is needed.
USUFRUCT ON MORTGAGED PROPERTY (NCC 600)
(1) When the usufruct is universal and some objects
are mortgaged, apply Art. 598.
(2) If the usufructuary mortgaged the usufruct
himself, he is liable to pay his own debt.
USUFRUCT OVER AN ENTIRE PATRIMONY (NCC 598)
Applies when:
(1) The usufruct is a universal one
(2) And the naked owner Has debts or is obliged to
make periodical payments (whether or not there
be known capital)
General rule: The usufructuary is not liable for the
owners debts.
Exceptions:
(1) When it is so stipulated; in which case the
usufructuary shall be liable for the debt specified.
(2) If there is no specification, he is liable only for
debts incurred by the owner before the usufruct
was constituted.
(3) When the usufruct is constituted in fraud of
creditors
In no case shall the usufructuary be responsible for
debts exceeding the benefits under the usufruct.
(except when the contrary intention appears)
USUFRUCT OVER DETERIORABLE PROPERTY (NCC 753)
(1) The usufructuary shall have the right to make use
thereof in accordance with the purpose for which
they are intended
(2) It is sufficient if the usufructuary returns the
things in the condition in which they may have
been found at the time of the expiration of the
usufruct despite ordinary defects caused by use
and deterioration produced by age and time.
Except: when caused by the usufructuarys fraud
and negligence.

(3) If usufructuary does not return the things upon

the expiration of the usufruct, he should pay an
indemnity equivalent to the value of the things at
the time of such expiration.
USUFRUCT OVER CONSUMABLE PROPERTY (NCC 574)
(1) The usufructuary shall have the right to make use
of them under the obligation of paying their
appraised value at the termination of the
usufruct, if they were appraised when delivered.
(2) If not appraised, he shall have the right to return
at the same quantity and quality, or pay their
current price at the time the usufruct ceases.
RIGHTS OF THE OWNER
(1) At the beginning of the usufruct (see obligations of
usufructuary at the beginning of the usufruct)
(2) During the usufruct
(a) Retains title to the thing or property
(b) He may alienate the property: he may not
alter the form or substance of the thing; nor
do anything prejudicial to the usufructuary
(c) He may construct buildings, make
improvements and plantings, provided:
(1) Value of the usufruct is not impaired
(2) Rights of the usufructuary are not
prejudiced
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EXTINGUISHMENT/TERMINATION (NCC 603)

(1) By the death of the usufructuary, unless a
contrary intention clearly appears;
(2) By the expiration of the period for which it was
constituted, or by the fulfillment of any resolutory
condition provided in the title creating the
usufruct;
(3) By merger of the usufruct and ownership in the
same person;
(4) By renunciation of the usufructuary;
(5) By the total loss of the thing in usufruct;
(6) By the termination of the right of the person
constituting the usufruct;
(7) By prescription.
DEATH OF USUFRUCTUARY

Exceptions:
(1) In multiple usufructs: it ends at the death of the
last survivor (NCC 611)
(a) If simultaneously constituted: all the
usufructuaries must be alive (or at least
conceived) at the time of constitution.
(b) If successively constituted:
(i) If by virtue of donation all the doneesusufructuaries
must be living at the time
of the donation;
(ii) If by will there should only be 2
successive usufructuaries and both must
have been alive at the time of testators
death.

(2) If the period is fixed by reference to the life of

another or there is a resolutory condition
Death does not affect the usufruct and the right
is transmitted to the heirs of the usufructuary
until the expiration of the term or the fulfillment
of the condition.
(3) When a contrary intention clearly appears
(a) If the usufructuary dies before the happening
of a resolutory condition, the usufruct is
extinguished.
(b) 1st view: usufruct is personal and it CANNOT
be extended beyond the lifetime of the
usufructuary. (Sanchez Roman and SC)
EXPIRATION OF PERIOD OR FULFILLMENT OF RESOLUTORY
CONDITION IMPOSED ON USUFRUCT BY PERSON
CONSTITUTING THE USUFRUCT

(1) In favor of juridical persons [Art. 605, CC]

(a) Usufruct cannot be constituted in favor of a
town, corporation, or association for more
than fifty year
(b) If before the expiration of such period the
town is abandoned, or the corporation or
association is dissolved, the usufruct shall be
extinguished.
(2) Time that may elapse before a 3rd person attains
a certain age [Art. 606, CC]
(a) Usufruct subsists for the number of years
specified, even if the 3rd person should die
before the period expired
(b) Unless the usufruct has been expressly
granted only in consideration of the existence
of the person
MERGER OF RIGHTS OF USUFRUCT AND NAKED
OWNERSHIP IN ONE PERSON

Illustration: H was the usufructuary of land owned by

X. x dies, leaving in his will, the naked ownership of
the land to H. the usufruct is extinguished because
now H is both the naked owner and the usufructuary.
RENUNCIATION OF USUFRUCT

(1) Waiver: voluntary surrender of the rights of the

usufructuary, made by him with intent to
surrender them
(2) Limitations
(a) Must be express: tacit renunciation is not
sufficient
(b) Does not need the consent of naked owner
(c) If made in fraud of creditors, waiver may be
rescinded by them through action under
Article 1381 (accion pauliana)
EXTINCTION OR LOSS OF PROPERTY (NCC 608 & 608)
Situation Effect
Art. 607
If destroyed property is not insured
If the building forms part
of an immovable under
usufruct

If the building forms part

of an immovable under
usufruct
If usufruct is on the
building only
Usufruct continues over
the land and materials
(plus interests), if owner
does not rebuild.
If owner rebuilds,
usufructuary must allow
owner to occupy the land
and to make use of
materials; but the owner
must pay interest on the
value of both the land
and the materials.
Art. 608
If destroyed property is insured before termination of the
usufruct
When insurance premium
paid by owner and
If owner rebuilds,
usufruct subsists on new
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Situation Effect
usufructuary (par. 1) building.
If owner does not rebuild
interest upon insurance
proceeds paid to
usufructuary
When the insurance taken
by the naked owner only
because usufructuary
refuses to contribute to
the premium (par. 2)
Owner entitled to
insurance money (no
interest paid to
usufructuary).
If he does not rebuild,
usufruct continues over
remaining land and/or
owner may pay interest
on value of both
materials and land (607).
If owner rebuilds,
usufruct does not
continue on new
building, but owner must
pay interest on value of
land and old materials.
When insurance taken by
usufructuary only
depends on value of

usufructuarys insurable
interest
Insurance proceeds goes
to the usufructuary.
No obligation to rebuild.
Usufruct continues on
the land.
Owner has no share in
insurance proceeds.
TERMINATION OF RIGHT OF PERSON CONSTITUTING THE
USUFRUCT

Example: usufructs constituted by a vendee a retro

terminate upon redemption
PRESCRIPTION

(1) Adverse possession against the owner or the

usufructuary.
(2) It is not the non-use which extinguishes the
usufruct by prescription, but the use by a 3rd
person.
(3) There can be no prescription as long as the
usufructuary receives the rents from the lease of
the property, or he enjoys the price of the sale of
his right.
CONDITIONS NOT AFFECTING USUFRUCT
EXPROPRIATION OF THING IN USUFRUCT (NCC 609)
3 Situations
(1) If naked owner alone was given the indemnity, he
has the option:
(a) To replace with equivalent thing
(b) Or to pay to the usufructuary legal interest on
the indemnity requires security given by the
naked owner for the payment of the interest
(2) If both the naked owner and the usufructuary
were separately given indemnity, each owns the
indemnity given to him, the usufruct being totally
extinguished.
(3) If usufructuary alone was given the indemnity, he
must give it to the naked owner and compel the
latter to return either the interest or to replace
the property. He may even deduct the interest
himself, if the naked owner fails to object.
BAD USE OF THING IN USUFRUCT (NCC 610)
Does not extinguish the usufruct but
(1) Entitles the owner to demand delivery and
administration of the thing.
(2) The bad use must cause considerable injury not to
the thing, but to the owner.
(a) Destruction of a building over which the
usufruct is constituted (Arts. 607 and 608)

Easement

(1) An encumbrance imposed upon an immovable

for the benefit of another immovable belonging
to a different owner (NCC 613)
(2) A real right which burdens a thing with a
prestation of determinate servitudes for the

exclusive enjoyment of one who is NOT an owner

of a tenement
(3) A real right by virtue of which the owner has to
ABSTAIN from doing or ALLOW somebody else
to do something to his property for the benefit of
another
Dominant Estate the immovable in favor of which
the easement is established
Servient Estate the immovable which is subject to
the easement
CHARACTERISTICS
ESSENTIAL FEATURES:
(1) It is a real right it gives an action in rem or real
action against any possessor of the servient estate
(a) Owner of the dominant estate can file a real
action for enforcement of right to an
easement
(b) Action in rem: an action against the thing
itself, instead of against the person.
(2) It is a right enjoyed over another property (jus in re
aliena) it cannot exist in ones property (nulli res
sua servit)
When a dominant and servient estate have the
same owner, an easement is extinguished.
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Separate ownership is a prerequisite to an

easement.
(3) It is a right constituted over an immovable by
nature (land and buildings), not over movables.
(Article 613)
Immovable: used in its common and not in the
legal sense, meaning only property immovable
BY NATURE can have easements.
(4) It limits the servient owners right of ownership for
the benefit of the dominant estate.
(a) Right of limited use but no right to possess
servient estate.
(b) There exists a limitation on ownership: the
dominant owner is allowed to enjoy or use
part of the servient estate, or imposes on the
owner a restriction as to his enjoyment of his
own property.
(i) Being an abnormal limitation of
ownership, it cannot be presumed.
(5) It creates a relation between tenements
No transfer of ownership, but a relationship is
created, depending on the easement.
(6) Generally, it may consist in the owner of the
dominant estate demanding that the owner of the
servient estate refrain from doing something
(servitus in non faciendo) or that the latter permit
that something be done over the servient property
(servitus in patendo), but not in the right to
demand that the owner of the servient do
something (servitus in faciendo) except if such act

is an accessory obligation to a praedial servitude

(obligation propter rem)
Servient owner merely allows something to be
done to his estate.
Exceptions: Praedial servitudes
(a) Right to place beams in an adjoining wall to
support a structure
(b) Right to use anothers wall to support a
building
(7) It is inherent or inseparable from estate to which
they actively or passively belong (NCC 617)
(a) Easements are merely accessory to the
tenements, and a quality thereof. They
cannot exist without tenements.
(b) Easements exist even if they are not expressly
stated or annotated as an encumbrance on
the titles.
(8) It is intransmissible it cannot be alienated
separately from the tenement affected or
benefited
Any alienation of the property covered carries
with it the servitudes affecting said property. But
this affects only the portion of the tenement with
the easement, meaning the portions unaffected
can be alienated without the servitude.
(9) It is indivisible (NCC 618)
(a) If the servient estate is divided between two or
more persons, the easement is not modified,
and each of them must bear it on the part
which corresponds to him
(b) If the dominant estate is divided between two
or more persons, each of them may use the
easement in its entirety, without changing the
place of its use, or making it more
burdensome in any other way
(10) It has permanence once it attaches, whether
used or not, it continues and may be used anytime
Perpetual: exists as long as property exists, unless
it is extinguished.
CLASSIFICATION
AS TO RECIPIENT OF BENEFITS

(1) Real or Praedial: exists for the benefit of a

particular tenement.
(2) Personal: exists for the benefit of persons without
a dominant tenement e.g. usus habitatio (right to
reside in a house) and operae servorum (right to
the labor of slaves) in Roman Law
AS TO CAUSE OR ORIGIN

(1) Legal: created by law, whether for public use or

for the interest of private persons
(a) Once requisites are satisfied, the owner of the
dominant estate may ask the Court to declare
that an easement is created.
(b) Example: Natural drainage of waters,
Abutment of land, Aqueduct, etc.
(2) Voluntary: Created by the will of the owners of the

estate through contract

Note: There is no such thing as a JUDICIAL
EASEMENT. The Courts cannot create easements,
they can only declare the existence of one, if it exists
by virtue of the law or will of the parties.
AS TO ITS EXERCISE (NCC 615)
(1) Continuous: Use is or may be incessant, without
the intervention of any man
(2) Discontinuous: Used at intervals, and dependent
upon the acts of man.
Note: This classification is important in determining
prescription: only continuous and apparent
easements can be created by prescription
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AS INDICATION OF ITS EXISTENCE

(1) Apparent: Made known and continually kept in

view by external signs that reveal the use and
enjoyment of the same
(2) Non-apparent: No external indication of their
existence
Note: Also important for purposes of prescription
BY THE OBJECT OR OBLIGATION IMPOSED (NCC 616)
(1) Positive: Imposes upon the owner of the servient
estate the obligation of allowing something to be
done, or doing it himself
(2) Negative: Prohibits the owner of the servient
estate from doing something which he could
lawfully do if the easement did not exist.
e.g. Negative Easement of Light and View: An
opening is made on the wall of the dominant
estate, and the easement consists of imposing
upon the servient estate the obligation to not
build anything that would obstruct the light
Note: Prescription starts to run from service of
notarial prohibition
GENERAL RULES

(1) Nulli res sua servi: No one can have a servitude

over ones own property
(2) Servitus in faciendo consistere nequit: A servitude
cannot consist in doing
(a) Although some easements seem to impose a
positive prestation upon the owner of the
servient estate, in reality, the primary
obligation is still negative.
(b) Illustration: Under Article 680: the owner of a
tree whose branches extend over to a
neighboring property is required to cut off the
extended branches, but the real essence of
the easement is the obligation NOT TO
ALLOW the branches of the tree to extend
beyond the land
(3) Servitus servitutes esse non potes: There can be no
servitude over another servitude
(4) A servitude must be exercised civiliter in a way
least burdensome to the owner of the land

(5) A servitude must have a perpetual cause

RELEVANCE OF CLASSIFICATIONS
DETERMINES WHAT EASEMENTS CAN BE ACQUIRED BY
PRESCRIPTION

Continuous and apparent easements may be

acquired by prescription of 10 years (NCC 620)
DETERMINES WHAT EASEMENTS CAN BE ACQUIRED BY
TITLE

(1) Continuous nonapparent easements, and

discontinuous ones, whether apparent or not,
may be acquired only by virtue of a title (NCC
622)
(2) The existence of an apparent sign of easement
between two estates, established or maintained
by the owner of both, shall be considered, as a
title in order that the easement may continue
actively and passively.
Unless: At the time the ownership of the two
estates is divided, the contrary should be
provided in the title of conveyance of either of
them, or the sign aforesaid should be removed
before the execution of the deed. This provision
shall also apply in case of the division of a thing
owned in common by two or more persons. (NCC
624)
DETERMINES HOW TO COMPUTE THE PRESCRIPTIVE
PERIOD (NCC 621)

(1) In positive easements, from the day on which the

owner of the dominant estate, or the person who
may have made use of the easement,
commenced to exercise it upon the servient
estate
(2) In negative easements, from the day on which the
owner of the dominant estate forbade, by an
instrument acknowledged before a notary public,
the owner of the servient estate from executing
an act which would be lawful without the
easement.
DETERMINES HOW EASEMENT IS LOST BY PRESCRIPTION
[NCC 631 (2)]

By nonuser for 10 years

(1) With respect to discontinuous easements, this
period shall be computed from the day on which
they ceased to be used
(2) With respect to continuous easements, from the
day on which an act contrary to the same took
place
CREATION
BY TITLE

(1) Continuous and apparent easements may be

acquired by virtue of a title (NCC 620)
(2) Continuous nonapparent easements, and
discontinuous ones, whether apparent or not, are
acquired only by virtue of a title (NCC 622)
(3) The absence of a document or proof showing the
origin of an easement which cannot be acquired
by prescription may be cured by a deed of

recognition by the owner of the servient estate or

by a final judgment (NCC 623)
(4) The existence of an apparent sign of easement
between two estates, established or maintained
by the owner of both, shall be considered as a
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title in order that the easement may continue

actively and passively.
Unless: at the time the ownership of the two
estates is divided, the contrary should be
provided in the title of conveyance of either of
them, or the sign aforesaid should be removed
before the execution of the deed. This provision
shall also apply in case of the division of a thing
owned in common by two or more persons. (NCC
624)
BY LAW (LEGAL EASEMENTS)
(1) Easements imposed by law have for their object
either public use or the interest of private persons
(NCC 634)
(2) These easements may be modified by agreement
of the interested parties, whenever the law does
not prohibit it or no injury is suffered by a third
person (NCC 636)
BY WILL OF THE OWNERS (VOLUNTARY EASEMENTS)
Every owner of a tenement or piece of land may
establish the easements which he may deem
suitable and best (NCC 688)
BY PRESCRIPTION

Continuous and apparent easements may be

acquired by prescription of 10 years (NCC 620)
LEGAL EASEMENTS
LAW GOVERNING LEGAL EASEMENTS

For public easements

(1) Special laws and regulations relating thereto (ex:
PD 1067 and PD 705)
(2) By the provisions of Chapter 2, Title VII, Book II,
NCC
For private legal easements
(1) By agreement of the interested parties whenever
the law does not prohibit it and no injury is
suffered by a 3rd person
(2) By the provisions of Chapter 2, title VII, Book II
VOLUNTARY EASEMENTS
(1) Every owner of a tenement or piece of land may
establish thereon the easements which he may
deem suitable, and in the manner and form
which he may deem best (NCC 688)
(2) The owner of a thing, the usufruct of which
belongs to another, may impose, without the
consent of the usufructuary, any servitudes which
will not injure the right of usufruct (NCC 689)
(3) Whenever the naked ownership belongs to one
person and the beneficial ownership to another,
no perpetual voluntary easement may be

established thereon without the consent of both

owners. (NCC 690)
(4) Consent of all co-owners is required to impose an
easement on an undivided tenement (NCC 691)
RIGHTS AND OBLIGATIONS OF OWNERS OF
DOMINANT AND SERVIENT ESTATES
RIGHT OF DOMINANT ESTATE OWNER

(1) To use the easement and exercise all rights

necessary for it (NCC 625, 626)
(a) Owner of the dominant estate is granted the
right to use the principal easement, and all
accessory servitudes
(b) Example: Easement of drawing water carries
with it the easement of right of way to the
place where water is drawn.
(c) Limitation: Only for the original immovable
and the original purpose
(2) To do at his expense, all necessary works for the
use and preservation of the easement (NCC 627)
Necessity of the works determine extent of such
works.
(3) In a right of way, to ask for change in width of
easement sufficient for needs (NCC 651)
Encarnacion v. Court of Appeals: The Court
granted the modification of the easement stating
that under the law, the needs of the dominant
property ultimately determine the width of the
passage. And these needs may vary from time to
time.
OBLIGATIONS OF DOMINANT ESTATE OWNER

(1) To use the easement for the benefit of immovable

and in the manner originally established (NCC
626)
If established for a particular purpose, the
easement cannot be used for a different one.
However, if established in a general way, without
specific purpose, the easement can be used for
all the needs of the dominant estate.
(2) To notify owner of servient before making repairs
and to make repairs in a manner least
inconvenient to servient estate [NCC 627(2)]
(3) Not to alter easement or render it more
burdensome
(a) Owner of dominant estate may make repairs
at his expense, but cannot alter the easement
or make it more burdensome. (NCC 627)
(b) Court allowed Central to use the right of way
to transport the additional sugar. This did not
make the easement more burdensome nor
did it alter it. What is prohibited is extending
the road or repairing it or depositing
excavations outside the area. But the
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additional use produced no such effects.

(Valderama v. North Negros)

(4) To contribute to expenses of works necessary for

use and preservation of servitude, if there are
several dominant estates, unless he renounces his
interest (NCC 628)
(a) The contribution is in proportion to the
benefits which each may derive from the work
(b) Anyone who does not wish to contribute may
exempt himself by renouncing the easement
for the benefit of the others
(c) If the owner of the servient estate should
make use of the easement in any manner
whatsoever, he shall also be obliged to
contribute to the expenses in the proportion
stated, saving an agreement to the contrary
RIGHT OF SERVIENT ESTATE OWNER

(1) To retain ownership and use of his property

(a) The owner of the servient estate retains the
ownership of the portion on which the
easement is established, and may use the
same in such a manner as not to affect the
exercise of the easement. (NCC 630)
(b) Servient owner must respect the use of the
servitude, but retains ownership and use of
the same, in a manner not affecting the
easement.
(2) To change the place and manner of the use of the
easement (NCC 629)
General rule: The owner of the servient estate
cannot impair the use of the servitude
Exception:
(a) By reason of the place/manner originally
assigned, the use of such easement has
become VERY INCONVENIENT to the owner
(b) The easement should prevent him from
making any important works, repairs or
improvements thereon
(c) Change must be done at his expense
(d) He offers another place or manner equally
convenient
(e) In such a way that no injury is caused by the
change to the owner of the dominant estate
or to those who may have a right to use the
easement
(3) To use the easement
May use the easement but must also contribute
proportionately to the expenses
OBLIGATIONS OF SERVIENT ESTATE OWNER

(1) Not to impair the use of the easement [NCC

629(1)]
(2) To contribute proportionately to expenses if he
uses the easement [NCC 628(2)]
Unless there is an agreement to the contrary
KINDS OF LEGAL EASEMENTS
(1) Natural drainage (NCC 637)
(2) Riparian banks (NCC 638)
(3) Drainage of buildings (NCC 674)

(4) Dam (NCC 639)

(5) Drawing water (NCC 640-41)
(6) Aqueduct (NCC 642-646)
(7) Sluice gate (647)
(8) Right of way (NCC 649-657)
(9) Party wall (NCC 658-666)
(10) Light and view (NCC 667-681)
(11) Intermediate distances (NCC 677-681)
(12) Nuisance (NCC 682-683)
(13) Lateral and subjacent support (684-687)
NATURAL DRAINAGE

(1) Lower estates are obliged to receive the waters

which naturally and without the intervention of
man descend from the higher estates (as well as
the stones or earth which they carry with them)
(2) The owner of the lower estate cannot construct
those which will impede this easement
(3) The owner of the higher estate cannot construct
those which will increase the burden.
RIPARIAN BANKS

(1) The banks of rivers and streams are subject

throughout their entire length and within a zone
of 3 meters along their margins, to the easement
of public use in the general interest of navigation,
floatage, fishing, and salvage.
(2) Estates adjoining the banks of navigable or
floatable rivers are subject to the easement of
towpath for the exclusive service of river
navigation and floatage.
(3) If it be necessary to occupy lands of private
ownership, the proper indemnity shall first be
paid.
DRAINAGE OF BUILDINGS

(1) The owner of a building is obliged to construct its

roof or covering in such manner that the rain
water shall fall on his own land or on a street or
public place, and NOT on the land of his
neighbor, even though the adjacent land may
belong to two or more persons, one of whom is
the owner of the roof.
(2) Even if it should fall on his own land, the owner
shall be obliged to collect the water in such a way
as not to cause damage to the adjacent land or
tenement.
DAM

Whenever it should be necessary to build a dam, and

the person who is to construct it is not the owner of
the banks, or lands which must support it, he may
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establish the easement of abutment of a dam, after

payment of the proper indemnity.
DRAWING WATER

(1) Compulsory easements for drawing water or for

watering animals can be imposed only for
reasons of public use in favor of a town or village,
after payment of the proper indemnity.

(2) Easements for drawing water and for watering

animals carry with them the obligation of the
owners of the servient estates to allow passage to
persons and animals to the place where such
easements are to be used, and the indemnity
shall include this service.
AQUEDUCT

(1) Any person who may wish to use upon his own
estate any water of which he can dispose shall
have the right to make it flow through the
intervening estates, with the obligation to
indemnify their owners, as well as the owners of
the lower estates upon which the waters may
filter or descend.
(2) Person desiring to make use of this right is
obliged to:
(a) To prove that he can dispose of the water and
that it is sufficient for the use for which it is
intended;
(b) To show that the proposed right of way is the
most convenient and the least onerous to
third persons;
(c) To indemnify the owner of the servient estate
in the manner determined by the laws and
regulations
(3) Easement of aqueduct for private interest cannot
be imposed on buildings, courtyards, annexes, or
outhouses, or on orchards or gardens already
existing
(4) This easement does not prevent the owner of the
servient estate from closing or fencing it, or from
building over the aqueduct in such manner as not
to cause the latter any damage, or render
necessary repairs and cleanings impossible
(5) This easement is considered as continuous and
apparent, even though the flow of the water may
not be continuous, or its use depends upon the
needs of the dominant estate, or upon a schedule
of alternate days or hours.
SLUICE GATE

(1) Constructing a stop lock or sluice gate in the bed

of the stream from which the water is to be taken,
for the purpose of improving an estate
(2) Such person may demand that the owners of the
banks permit its construction, after payment of
damages, including those caused by the new
easement to such owners and to the other
irrigators.
RIGHT OF WAY

Who may demand:

(1) The owner of the dominant estate
(2) Any person with the real right to cultivate or use
the immovable e.g. a usufructuary
Note: a lessee cannot demand such easement,
because the lessor is the one bound to maintain
him in the enjoyment of the property

Requisites:
(1) Dominant estate is surrounded by other
immovables owned by other persons
(2) There must absolutely be no access to a public
highway
(3) Even if there is access, it is difficult or dangerous
to use, or grossly insufficient
(a) Mere inconvenience in the use of an outlet
does not render the easement a necessity.
(b) An adequate outlet is one that is sufficient for
the purpose and needs of the dominant
owner, and can be established at a
reasonable expense.
(c) Does not necessarily have to be by land an
outlet through a navigable river if suitable to
the needs of the tenement is sufficient.
(4) Isolation of the immovable is NOT due to the
dominant owners own acts e.g. if he constructs
building to others obstructing the old way
(5) Payment of indemnity
(a) If right of way is permanent and continuous
for the needs of the dominant estate = value
of the land + amount of damage caused to
the servient estate
(b) If right of way is limited to necessary passage
for cultivation of the estate and for gathering
crops, without permanent way = damage
caused by encumbrance.
Rules For Establishing The Right Of Way
(1) Must be established at the point LEAST
prejudicial to the servient estate (NCC 650)
(2) Insofar as consistent with the first rule, where the
distance from the dominant estate to a public
highway is shortest
(3) The criterion of least prejudice to the servient
estate must prevail over the criterion of shortest
distance although this is a matter of judicial
appreciation. While shortest distance may
ordinarily imply least prejudice, it is not always so
as when there are permanent structures
obstructing the shortest distance; while on the
other hand, the longest distance may be free of
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obstructions and the easiest or most convenient

to pass through. (Quimen v. CA)
(4) The fact that LGV had other means of egress to
the public highway cannot extinguish the said
easement, being voluntary and not compulsory.
The free ingress and egress along Mangyan Road
created by the voluntary agreement between the
parties is thus legally demandable with the
corresponding duty on the servient estate not to
obstruct the same. (La Vista Association v. CA)
(5) Width of the easement shall be that which is
sufficient for the needs of the dominant estate

(6) Easement may be changed from time to time

depending upon the needs of the dominant
tenement
(7) The width of the easement of right of way shall
be that which is sufficient for the needs of the
dominant estate, and may accordingly be
changed from time to time. (NCC 651)
(8) Necessary repairs for a permanent right of way
shall be made by the DOMINANT OWNER.
(9) A proportionate share of taxes shall be
reimbursed by the dominant owner to the
proprietor of the servient estate
(a) If the right of way is permanent, the necessary
repairs shall be made by the owner of the
dominant estate. A proportionate share of the
taxes shall be reimbursed by said owner to
the proprietor of the servient estate (NCC
654)
(10) In cases where the dominant estate needing the
right of way is acquired by sale, exchange or
partition and the Estate is surrounded by other
estates owned by the vendor, exchanger or coowner
(11) Vendor, exchanger or co-owner shall grant the
right of way WITHOUT INDEMNITY
(a) Granting the servitude without indemnity is a
tacit condition of the sale, exchange or
partition: each party receives something
(12) Donor (simple donation) must still be
indemnified for right of way
(a) Grantor receives nothing from the grantee,
therefore no implied condition as to a right of
way is constituted
(13) If the land of the grantor is the one which
becomes isolated, he may demand right of way
after paying an indemnity
(a) Whenever a piece of land acquired by sale,
exchange or partition, is surrounded by other
estates of the vendor, exchanger, or co-owner,
he shall be obliged to grant a right of way
without indemnity. In case of a simple
donation, the donor shall be indemnified by
the donee for the establishment of the right of
way. (NCC 652)
Extinguishment
(1) Owner has joined the dominant estate to another
abutting the public road
(2) A new road is opened giving access to the
isolated estate
(3) Extinguishment is NOT automatic. The owner of
the servient estate must ask for such
extinguishment
(4) Indemnity paid to the servient owner must be
returned:
(a) If easement is permanent: value of the land
must be returned

(b) If easement is temporary: nothing to be

returned
Special Rights Of Way
(1) Right of way to carry materials for the
construction, repair, improvement, alteration or
beautification of a building through the estate of
another
(2) Right of way to raise on anothers land
scaffolding or other objects necessary for the
work
(a) If it be indispensable for the construction,
repair, improvement, alteration or
beautification of a building, to carry materials
through the estate of another, or to raise
therein scaffolding or other objects necessary
for the work, the owner of such estate shall be
obliged to permit the act, after receiving
payment of the proper indemnity for the
damage caused him. (NCC 656)
(3) Right of way for the passage of livestock known
as animal path, animal trail, watering places,
resting places, animal folds (NCC 657)
(a) Easements of the right of way for the passage
of livestock known as animal path, animal
trail or any other, and those for watering
places, resting places and animal folds, shall
be governed by the ordinances and
regulations relating thereto, and, in the
absence thereof, by the usages and customs
of the place.
(b) Without prejudice to rights legally acquired,
the animal path shall not exceed in any case
the width of 75 meters, and the animal trail
that of 37 meters and 50 centimeters.
(c) Whenever it is necessary to establish a
compulsory easement of the right of way or
for a watering place for animals, the
provisions of this Section and those of Articles
640 and 641 shall be observed. In this case
the width shall not exceed 10 meters
PARTY WALL

Refers to all those mass of rights and obligations

emanating from the existence and common
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enjoyment of wall, fence, enclosures or hedges, by

the owners of adjacent buildings and estates
separated by such objects
Nature
(1) A common wall which separates two estates,
built by common agreement at the dividing line
such that it occupies a portion of both estates on
equal parts
(2) A party wall is a co-ownership (a kind of
compulsory co-ownership)
(a) Each owner owns part of the wall but it

cannot be separated from the other portions

belonging to the others. A party wall has a
special characteristic that makes it more of an
easement as it is called by law
(b) An owner may use a party wall to the extent
of the portion on his property.
Co-Ownership Party Wall
Before division of shares,
a co-owner cannot point
to any definite portion of
the property as belonging
to him
Shares of the co-owners
cannot be physically
segregated but they can
be physically identified
None of the co-owners
may use the community
property
for his exclusive benefit
because he would be
invading the rights of the
others
No such limitation
In a co-ownership, partial
renunciation
is allowed
Any owner may free
himself from contributing
to the cost of repairs and
construction of a party
wall by renouncing all his
rights thereto
When existence of easement of party wall presumed
(1) In dividing walls of adjoining buildings up to the
point of common elevation
(2) In dividing walls of gardens or yards situated in
cities, or towns, or in rural communities
(3) In fences, walls and live hedges dividing rural
lands
Note: may be rebutted by a title or exterior sign,
or any other proof showing that the entire wall in
controversy belongs exclusively to one of the
adjoining property-owners
When existence of exterior sign is presumed (NCC
660)
(1) Whenever in the dividing wall of buildings there is
a window or opening
(2) Whenever the dividing wall is, on one side,
straight and plumb on all its facement, and on
the other, it has similar conditions on the upper
part, but the lower part slants or projects
outward
(3) Whenever the entire wall is built within the
boundaries of one of the estates

(4) Whenever the dividing wall bears the burden of

the binding beams, floors and roof frame of one
of the buildings, but not those of the others
(5) Whenever the dividing wall between courtyards,
gardens, and tenements is constructed in such a
way that the coping sheds the water upon only
one of the estates
(6) Whenever the dividing wall, being built of
masonry, has stepping stones, which at certain
intervals project from the surface on one side
only, but not on the other
(7) Whenever lands enclosed by fences or live
hedges adjoin others which are not enclosed
Note: The deposit of earth or debris on one side
alone is an exterior sign that the owner of that
side is the owner of the ditch or drain. The
presumption is an addition to those enumerated
in NCC 660.
Demolition of building supported by party wall
(1) An owner may also renounce his part ownership
of a party wall if he desires to demolish his
building supported by the wall.
(2) He shall bear all the expenses of repairs and work
necessary to prevent any damage which the
demolition may cause to the party wall.
Increasing height of party wall
An owner is given the right to increase the height of a
party wall subject to the following conditions:
(1) He must do so at his own expense;
(2) He must pay for any damage which may be
caused thereby even if the damage is temporary;
(3) He must bear the cost of maintaining the portion
added;
(4) He must pay the increased cost of preservation of
the wall
Proportional use of party wall
The part owners share in the expenses of
maintaining a party wall in proportion to the interest
of each
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LIGHT AND VIEW

Definition
(1) Easement of light (jus luminum) is the right to
admit light from the neighboring estate by virtue
of the opening of a window or the making of
certain openings
(2) Easement of view (jus prospectus) is the right to
make openings or windows, to enjoy the view
through the estate of another and the power to
prevent all constructions or works which would
obstruct such view or make the same difficult.
(a) Necessarily includes the easement of light
(b) It is possible to have light only without view
Nature
(1) Positive: Opening a window through a party wall

When a part owner of a party wall opens a

window therein, such act implies the exercise of
the right of ownership by the use of the entire
thickness of the wall = invasion of the right of the
other part owners / violation of the right to
proportional use of the party wall.
(2) Negative: Formal prohibition upon the owner of
the adjoining land or tenement
(a) When a person opens a window on his own
building, he does nothing more than
exercise an act of ownership on his property.
(i) Does not establish an easement
(b) Coexistent is the right of the owner of the
adjacent property to build on his own land,
even if such structures cover the window
(c) If the adjacent owner does not build
structures to obstruct the window, such is
considered mere tolerance and NOT a
waiver of the right to build.
(d) An easement is created only when the
owner opens up a window, prohibits or
restrains the adjacent owner from doing
anything, which may tend to cut off or
interrupt the light + prescriptive period
Easement against Direct view
(1) Acquired by the person who opens the window
(2) The following structures cannot be built without
following the prescribed distances
(a) Window, apertures, balconies and other
projections with a direct view upon or towards
an adjoining land must have a distance of 2
METERS between the wall and the contiguous
property.
(b) For structures with a side or oblique view (at
an angle from the boundary line), there
should be a distance of 60 centimeters.
(c) Measured from:
(i) The outer line of the wall if the openings
do not project
(ii) The outer line of the openings if they
project
(iii) The dividing line between the two
properties in cases of oblique view
(d) If distances are not complied with:
(i) Windows are considered unlawful
openings
(ii) Owner may be ordered by the Court to
close them
(iii) Even if the adjoining owner does not
object to the construction of such
structures at first, he cannot be held to
be in estoppel, except if 10-year period of
acquisitive prescription has passed.
(iv) Does not give rise to prescription
(v) Mere opening of the window in violation

of the distances does not give rise to the

easement of light and view by
prescription
(3) In buildings separated by a public way or alley,
not less than 3 meters wide, the distances
required (2 m, 60 cm) do not apply
(4) If an easement is acquired to have direct views,
balconies or belvederes, the owner of the servient
estate must not build at less than 3 meters from
the boundary line of the two tenements.
(a) The distances may be stipulated by the
parties, but should not be less than what is
prescribed by the law (2 meters and 60 cm)
Exception to Easement Vs. Direct View
(1) Owners of a wall (not a party wall) adjoining a
tenement of another can make openings to admit
light without complying with the distance
requirements SO LONG AS:
(a) Openings are made at the height of the
ceiling joists (horizontal beams) or
immediately under the ceiling
(i) Size: 30 cm square
(ii) With iron grating imbedded in the wall
(iii) With a wire screen
(2) But owner of the adjoining estate can close the
opening if:
(a) He acquires part ownership of the party wall
(b) He constructs a building or raises a wall on his
land, unless an easement of light has been
acquired
(3) If requirements are not complied with, the owner
of the adjoining estate may compel the closure of
the opening.
(4) The action to compel the closing of the opening
may prescribe if the opening is permitted without
protest.
(a) BUT prescription of the action to compel the
closure of the opening DOES NOT MEAN that
the servitude of light and view has been
acquired.
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(b) Period of acquisitive prescription will only

start to run from the time the owner asserting
the servitude has forbidden the owner of the
adjoining tenement from doing something he
could lawfully do.
(c) THUS, although the action to compel the
closure might have prescribed, the owner of
the adjoining estate may still build on his own
land a structure which might obstruct the
view.
INTERMEDIATE DISTANCES (NCC 677)
NCC 677, in effect, establishes an easement in favor
of the State. The general prohibition is dictated by
the demands of national security.

The following must comply with the regulations or

customs of the place:
(1) Construction of aqueduct, well, sewer, etc. (678)
Constructions which by reason of their nature or
products are dangerous or noxious
(2) Planting of trees (NCC 679)
(a) No trees shall be planted near a tenement or
piece of land belonging to another except at
the distance authorized by the ordinances or
customs of the place
(b) In the absence of regulations:
(i) At least 2 meters from the dividing line
of the estates if tall trees are planted
(ii) At least 50 centimeters if shrubs or
small trees are planted
(c) In case of violation, a landowner shall have
the right to demand the uprooting of the
plant even if it has grown spontaneously.
Branches, roots, and fruits:
(1) If the branches of any tree should extend over a
neighboring estate, tenement, garden or yard,
the owner of the latter shall have the right to
demand that they be cut-off
(2) If it be the roots of a neighboring tree which
should penetrate into the land of another, the
latter may cut them off himself within his
property
(3) Fruits naturally falling upon adjacent land belong
to the owner of said land.
NUISANCE

A nuisance is any act, omission, establishment,

business, condition of property, or anything else
which:
(1) Injures or endangers the health or safety of
others; or
(2) Annoys or offends the senses; or
(3) Shocks, defies or disregards decency or morality;
or
(4) Obstructs or interferes with the free passage of
any public highway or street, or any body of
water; or
(5) Hinders or impairs the use of property.
LATERAL AND SUBJACENT SUPPORT

(1) The proprietor is prohibited from making

dangerous excavations.
(a) No proprietor shall make such excavations
upon his land as to deprive any adjacent land
or building of sufficient lateral or subjacent
support.
(2) Easement of lateral and subjacent support is
deemed essential to the stability of buildings
(3) Support is lateral when the supported and
supporting lands are divided by a vertical plane.
(4) Support is subjacent when the supported land is
above and the supporting land is beneath it.
MODES OF ACQUIRING EASEMENT

BY TITLE

Juridical act which gives rise to the servitude (e.g.

law, donations, contracts or wills)
(1) If easement has been acquired but no proof of
existence of easement available, and easement is
one that cannot be acquired by prescription
The defect may be cured by:
(a) Deed of recognition by owner of servient estate:
By affidavit or a formal deed acknowledging
the servitude
(b) By final judgment: Owner of the dominant
estate must file a case in Court to have the
easement declared by proving its existence
through other evidence
(2) Existence of an apparent sign considered as title
Illustration: The presence of 4 windows was
considered an apparent sign which created a
negative easement of light and view (altius non
tollendi) i.e. not to build a structure that will
cover the windows. (Amor v. Florentino)
BY PRESCRIPTION

Requisites
(1) Easement must be continuous and apparent.
(2) Easement must have existed for 10 years.
(3) NO NEED for good faith or just title.
EXTINGUISHMENT OF EASEMENTS
(1) By merger in the same person of the ownership of
the dominant and servient estates
(2) By nonuser for ten years
(3) When either or both of the estates fall into such
condition that the easement cannot be used
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(4) By the expiration of the term or the fulfillment of

the condition, if the easement is temporary or
conditional
(5) By the renunciation of the owner of the dominant
estate;
(6) By the redemption agreed upon between the
owners of the dominant and servient estates
MERGER

Must be absolute, perfect and definite, not merely

temporary
(1) Absolute: Ownership of the property must be
absolute, thus not applicable to lease, usufruct,
etc.
(2) Perfect: Merger must not be subject to a
condition
(3) If the merger is temporary, there is at most a
suspension of the easement, but no
extinguishment.
BY NON-USER FOR 10 YEARS
(1) Owner of dominant estate does not exercise right
over easement.
(2) Inaction, not outright renunciation.
(3) Due to voluntary abstention by the dominant
owner, and not due to a fortuitous event

(4) Computation of the period

(a) Discontinuous easements: counted from the
day they ceased to be used
(b) Continuous easements: counted from the day
an act adverse to the exercise of the easement
took place
(i) E.g. in an easement of light and view,
the erection of works obstructing the
servitude would commence the period of
prescription
(5) Use by a co-owner of the dominant estate bars
prescription with respect to the others
(6) Servitudes not yet exercised cannot be
extinguished by non-user
(a) An easement must have first been used,
before it can be extinguished by inaction.
EXTINGUISHMENT BY IMPOSSIBILITY OF USE

(1) Impossibility referred to must render the entire

easement unusable for all time.
(2) Impossibility of using the easement due to the
condition of the tenements (e.g. flooding) only
suspends the servitude until it can be used again.
(3) Except: If the suspension exceeds 10 years, the
easement is deemed extinguished by non-user
EXPIRATION OF THE TERM OR FULFILLMENT OF
RESOLUTORY CONDITION

Applicable only to voluntary easements

RENUNCIATION OF THE OWNER OF THE DOMINANT ESTATE

Must be specific, clear, express (distinguished from

non-user)
REDEMPTION AGREED UPON BETWEEN THE OWNERS
OTHER CAUSES NOT MENTIONED IN NCC 631

(1) Annulment and rescission of the title constituting

the voluntary easement
(2) Termination of the right of grantor of the
voluntary easement
(3) Abandonment of the servient estate
(a) Owner of the servient estate gives up
ownership of the easement (e.g. the strip of
land where the right of way is constituted) in
favor of the dominant estate.
(b) The easement is extinguished because
ownership is transferred to the dominant
owner, who now owns both properties.
(4) Eminent domain
(a) The governments power to expropriate
property for public use, subject to the
payment of just compensation.
(5) Special cause for extinction of legal rights of way;
if right of way no longer necessary
(a) NCC 655
(i) If the right of way granted to a
surrounded estate ceases to be
necessary because its owner has joined it
to another abutting on a public road, the
owner of the servient estate may

demand that the easement be

extinguished, returning what he may
have received by way of indemnity. The
interest on the indemnity shall be
deemed to be in payment of rent for the
use of the easement.
(ii) The same rule shall be applied in case a
new road is opened giving access to the
isolated estate.
(iii) In both cases, the public highway must
substantially meet the needs of the
dominant estate in order that the
easement may be extinguished.
(b) Right of way ceases to be necessary:
(i) Owner of the of the dominant estate has
joined to another abutting on a public
road
(ii) A new road is opened giving access to
the isolated estate
(c) Requisite: the public highway must
substantially meet the needs of the dominant
estate in order that the easement may be
extinguished
(d) Owner of the servient estate may demand
that the easement be extinguished.
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(e) Owner of the servient estate must return

indemnity he received (value of the land)

Nuisance

A nuisance is any act, omission, establishment,

business, condition of property, or anything else
which:
(1) Injures or endangers the health or safety of
others; or
(2) Annoys or offends the senses; or
(3) Shocks, defies or disregards decency or morality;
or
(4) Obstructs or interferes with the free passage of
any public highway or street, or any body of
water; or
(5) Hinders or impairs the use of property.
Note: To constitute a nuisance there must be an
arbitrary or abusive use of property or disregard of
commonly accepted standards set by society.
NUISANCE V. TRESPASS
Nuisance Trespass
Use of ones own property
in such a manner as to
cause injury to the
property or right or
interest of another, and
generally results from the
commission of an act
beyond the limits of the

property affected.
Direct infringement of
anothers right of
property.
Injury is consequential Injury is immediate
NUISANCE V. NEGLIGENCE
Nuisance Negligence
Whether it was
unreasonable for the
defendant to act as he
did in view of the
threatened danger or
harm to one in plaintiffs
position.
Whether the defendants
use of his property was
unreasonable as to
plaintiff, without regard
to foreseeability of injury.
Liability for the resulting
injury to others regardless
of the degree of care or
skill exercised to avoid
such injury.
Liability is based on a
want of proper care
Principles ordinarily apply Principles ordinarily
Nuisance Negligence
where the cause of action
is for continuing harm
caused by continuing or
recurrent acts which
cause discomfort or
annoyance to plaintiff in
the use of his property.
apply where the cause of
action is for harm
resulting from one act
which created an
unreasonable risk of
injury.
CLASSES
ACCORDING TO NATURE

(1) Nuisance per se or at law

An act, occupation or structure which is a
nuisance at all times and under any
circumstances, regardless of location or
surroundings.
(2) Nuisance per accidens or in fact
(a) One that becomes a nuisance by reason of
circumstances and surroundings.
(b) It is not a nuisance by its nature but it may
become so by reason of the locality,
surrounding, or the manner in which it is
conducted, managed, etc.

Per se Per accidence

The wrong is established
by proof of the mere act.
It becomes a nuisance as
a matter of law.
Proof of the act and its
consequences.
ACCORDING TO SCOPE OF INJURIOUS EFFECTS

Test: not the number of persons annoyed but the

possibility of annoyance to the public by the invasion
of its rights the fact that it is in a public place and
annoying to all who come within its sphere.
(1) Public
(a) The doing of or the failure to do something
that injuriously affects the safety, health or
morals of the public.
(b) It causes hurt, inconvenience or injury to the
public, generally, or to such part of the public
as necessarily comes in contact with it.
(2) Private
One which violates only private rights and
produces damages to but one or a few persons
Public Private
Affects the public at
large
Affects the individual or
a limited number of
individuals only
Need not affect the
whole community or
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Public Private
hurt and injure all
the public. It is
sufficient if it affects
the surrounding
community
generally or if the
injury is occasioned
to such part of the
public as come in
contact with it.
(3) Mixed
DOCTRINE OF ATTRACTIVE NUISANCE
One who maintains on his premises dangerous
instrumentalities or appliances of a character likely to
attract children in play, and who fails to exercise
ordinary care to prevent children from playing
therewith or resorting thereto, is liable to a child of
tender years who is injured thereby, even if the child
is technically a trespasser in the premises.
Basis of liability The attractiveness is an invitation
to children. Safeguards to prevent danger must
therefore be set up.
Note: A swimming pool or water tank is not an

attractive nuisance, for while it is attractive, it cannot

be a nuisance, being merely an imitation of the work
of nature. (Hidalgo Enterprises v. Balandan)
LIABILITY IN CASE OF NUISANCE
WHO ARE LIABLE

Every successive owner or possessor of property who

fails or refuses to abate a nuisance in that property
started by a former owner or possessor is liable
therefor in the same manner as the one who created
it. (NCC 696)
LIABILITY OF CREATOR OF NUISANCE

He who creates a nuisance is liable for the resulting

damages and his liability continues as long as the
nuisance continues.
(1) There must be a breach of some duty on the part
of the person sought to be held liable for
damages resulting from a nuisance before an
action will lie against him.
(2) No one is to be held liable for a nuisance which
he cannot himself physically abate without legal
action against another for that purpose.
(3) Where several persons, acting independently,
cause damage by acts which constitute a
nuisance, each is liable for the damage which he
has caused or for his proportionate share of the
entire damage.
LIABILITY OF TRANSFEREES

The grantee of land upon which there exists a

nuisance created by his predecessors in title is NOT
responsible therefore merely because he becomes
the owner of the premises, or merely because he
permits it to remain.
He shall be liable if he knowingly continues the
nuisance. Generally, he is not liable for continuing it
in its original form, unless he has been notified of its
existence and requested to remove it, or has actual
knowledge that it is a nuisance and injurious to the
rights of others.
NATURE OF LIABILITY

All persons who participate in the creation or

maintenance of a nuisance are jointly and severally
liable for the injury done.
If 2 or more persons who create or maintain the
nuisance act entirely independent of one another,
and without any community of interest, concert of
action, or common design, each is liable only so far
as his acts contribute to the injury.
For joint liability, there must be some joint or
concurrent act or community of action or duty, or the
several wrongful acts done at several times must
have concurred in their effects as one single act to
produce the injury complained of.
RIGHT TO RECOVER DAMAGES

The abatement of a nuisance does not preclude the

right of any person injured to recover damages for its
past existence. (NCC 697)

Abatement and damages are cumulative remedies.

NO PRESCRIPTION

The action to abate a public or private nuisance is

NOT extinguished by prescription. [NCC. 1143(2)]
REGULATION OF NUISANCES
PUBLIC NUISANCE

Remedies
The remedies against a public nuisance are:
(1) A prosecution under the Penal Code or any local
ordinance: or
(2) A civil action; or
(3) Abatement, without judicial proceedings.
(a) It must be reasonably and efficiently exercised
(b) Means employed must not be unduly
oppressive on individuals, and
(c) No more injury must be done to the property
or rights of individuals than is necessary to
accomplish the abatement.
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(d) No right to compensation if property taken or

destroyed is a nuisance.
Action for abatement
(1) The district health officer shall take care that one
or all of the remedies against a public nuisance
are availed of.
(2) If a civil action is brought by reason of the
maintenance of a public nuisance, such action
shall be commenced by the city or municipal
mayor.
(3) The district health officer shall determine
whether or not abatement, without judicial
proceedings, is the best remedy against a public
nuisance.
(4) A private person may file an action on account of
a public nuisance if it is especially injurious to
himself.
General rule: Individual has no right of action against
a public nuisance. The abatement proceedings must
be instituted in the name of the State or its
representatives.
Exception: An individual who has suffered some
special damage different from that sustained by the
general public may maintain a suit in equity for an
injunction to abate it, or an action for damages which
he has sustained.
Action becomes a tort if an individual has suffered
particular harm, in which case the nuisance is treated
as a private nuisance with respect to such person.
Requisites of the right of a private individual to abate
a public nuisance
(1) That demand be first made upon the owner or
possessor of the property to abate the nuisance;
(2) That such demand has been rejected;
(3) That the abatement be approved by the district
health officer and executed with the assistance of

the local police; and

(4) That the value of the destruction does not exceed
P3000.
Rules:
(1) The right must be exercised only in cases of
urgent or extreme necessity. The thing alleged to
be a nuisance must be existing at the time that it
was alleged to be a nuisance.
(2) Summary abatement must be resorted to within
a reasonable time after knowledge of the
nuisance is acquired or should have been
acquired by the person entitled to abate.
(3) Person who has the right to abate must give
reasonable notice of his intention to do so, and
allow thereafter a reasonable time to enable the
other to abate the nuisance himself.
(4) Means employed must be reasonable and for any
unnecessary damage or force, the actor will be
liable. Right to abate is not greater than the
necessity of the case and is limited to the removal
of only so much of the objectionable thing as
actually causes the nuisance.
(5) Abatement must be approved by the district
health officer.
(6) Property must not be destroyed unless it is
absolutely necessary to do so.
(7) Right must always be exercised with the
assistance of local police so as not to disturb the
public peace.
PRIVATE NUISANCE

Remedies
The remedies against a private nuisance are:
(1) A civil action; or
(2) Abatement, without judicial proceedings.
(a) The procedure for extrajudicial abatement of
a public nuisance by a private person be
followed
(b) Person extrajudicially abating a nuisance
liable for damages if:
(i) If he causes unnecessary injury
(ii) If an alleged nuisance is later declared
by the courts to be not a real nuisance
Remedies of property owner
A person whose property is seized or destroyed as a
nuisance may resort to the courts to determine
whether or not it was in fact a nuisance.
(1) Action for replevin
(2) Enjoin the sale or destruction of the property
(3) Action for the proceeds of its sale and damages if
it has been sold
(4) Enjoin private parties from proceeding to abate a
supposed nuisance

Modes of Acqiring Ownership

MODES OF ACQUIRING OWNERSHIP: (OLDTIPS)

(1) Occupation

(2) Law
(3) Donation
(4) Tradition
(5) Intellectual Property
(6) Prescription
(7) Succession
Mode is a specific cause which produces dominion
and other real rights as a result of the co-existence of
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special status of things, capacity and intention of

persons and fulfillment of the requisites of law.
Title is every juridical right which gives a means to
the acquisition of real rights but in itself is
insufficient to produce them.
Ownership is not transferred by contract merely but
by tradition or delivery. Contracts only constitute
titles or rights to transfer or acquisition of ownership,
while delivery is the mode of accomplishing the
same.
Mode Title
Directly and immediately
produces a real right
Serves merely to give the
occasion for its acquisition
or existence
Cause Means
Proximate cause Remote cause
Essence of the right
which is to be created or
transmitted
Means whereby that
essence is transmitted
OCCUPATION
Note: Ownership of land cannot be acquired by
occupation
REQUISITES

(a) Corporeal personal property

(b) Property susceptible of appropriation
(c) Seizure with intent to appropriate
(d) Res nullius (no owner) or res derelict (abandoned
property)
(e) Observance of conditions prescribed by law
KINDS

Of Animals
(1) Wild or feral animals seizure (hunting/fishing)
in open season by means NOT prohibited
(2) Tamed/domesticated animals General Rule:
belong to the tamer, but upon recovering
freedom, are susceptible to occupation UNLESS
claimed within 20days from seizure by another
(3) Tame/domestic animals not acquired by
occupation EXCEPT when ABANDONED
Of Other Personal Property
(1) Abandoned may be acquired
(2) Lost

(3) Hidden treasure finder gets by occupation;

landowner gets by accession; EXCEPT in CPG
system, share goes to the partnership
SPECIAL RULES

Occupation of a swarm of bees

The owner of a swarm of bees shall have a right to
pursue them to anothers land, indemnifying the
possessor of the latter for the damage.
If the owner has not pursued the swarm, or ceases to
do so within 2 consecutive days, the possessor of the
land may occupy or retain the same.
The 20 days to be counted from their occupation by
another person. This period having expired, they
shall pertain to him who has caught and kept them.
Occupation of domesticated animals
Wild animals are possessed only while they are
under one's control; domesticated or tamed animals
are considered domestic or tame if they retain the
habit of returning to the premises of the possessor.
Pigeons and fish
Pigeons and fish which from their respective
breeding places pass to another pertaining to a
different owner shall belong to the latter, provided
they have not been enticed by some artifice or fraud.
Hidden treasure
He who by chance discovers hidden treasure in
anothers property: shall be allowed to the finder.
If the finder is a trespasser, he shall not be entitled to
any share of the treasure.
If the things found be of interest to science or the
arts, the State may acquire them at their just price,
which shall be divided in conformity with the rule
stated
Lost movables; procedure after finding lost movables
Whoever finds a movable, which is not treasure, must
return it to its previous possessor.
If unknown, the finder shall immediately deposit it
with the mayor of the city or municipality where the
finding has taken place.
The finding shall be publicly announced by the
mayor for two consecutive weeks in the way he
deems best.
If the movable cannot be kept without deterioration,
or without expenses which considerably diminish its
value, it shall be sold at a public auction eight days
after the publication.
Six months from the publication having elapsed
without the owner having appeared, the thing found,
or its value, shall be awarded to the finder. The finder
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and the owner shall be obliged, as the case may be,

to reimburse the expenses.
If the owner should appear in time, he shall be
obliged to pay, as a reward to the finder, one-tenth
of the sum or of the price of the thing found.

DONATION
Donation is an act of liberality whereby a person
disposes gratuitously of a thing or right in favor of
another, who accepts it.
OTHER INSTANCES CONSIDERED AS DONATION

(1) When a person gives to another a thing or right

on account of the latter's merits or of the services
rendered by him to the donor, provided they do
not constitute a demandable debt
(2) When the gift imposes upon the donee a burden
which is less than the value of the thing given
NATURE

(1) BILATERAL contract creating UNILATERAL

obligations on the donors part
(2) Requires CONSENT of BOTH donor and donee
though it produces obligations only on the side of
the DONOR
Requisites
(1) CONSENT and CAPACITY of the parties
(2) ANIMUS DONANDI (intent to donate)
(3) DELIVERY of thing donated
(4) FORM as prescribed by law
(5) IMPOVERISHMENT of donors patrimony and
ENRICHMENT on part of donee
WHAT MAY BE DONATED

All present property or part thereof of the donor

(1) Provided he reserves, in full ownership or
usufruct, sufficient means for support of himself
and all relatives entitled to be supported by
donor at the time of acceptance
(2) Provided that no person may give or receive by
way of donation, more than he may give or
receive by will (NCC 752); also, reserves property
sufficient to pay donors debts contracted before
donation, otherwise, donation is in fraud of
creditors (NCC 759, 1387)
(3) If donation exceeds the disposable or free portion
of his estate, donation is inofficious
(4) EXCEPTIONS:
(a) Donations provided for in marriage
settlements between future spouses not
more than 1/5 of present property
(b) Donation propter nuptias by an ascendant
consisting of jewelry, furniture or clothing not
to exceed 1/10 of disposable portion
WHAT MAY NOT BE DONATED

Future property
(1) Donations cannot comprehend future property.
(2) Future property is understood anything which
the donor cannot dispose of at the time of the
donation.
KINDS OF DONATIONS

As to its taking effect

(1) Donation Inter Vivos (NCC 729)
Donation which shall take effect during the
lifetime of the donor, though the property shall

not be delivered till after the donor's death

Takes effect independently of the donors death
Irrevocable EXCEPT for the ff grounds:
(a) Subsequent birth of the donors children
(b) Donors failure to comply with imposed
conditions
(c) Donees ingratitude
(d) Reduction of donation by reason of
inofficiousness
(2) Donation by Reason of Marriage/ Donation Propter
Nuptias (FC 86)
Requisites
(a) Must be made BEFORE the celebration of
marriage
(b) Made in CONSIDERATION of the marriage
(c) Made in FAVOR of ONE or BOTH of the future
spouses
Ordinary v. Propter Nuptias
Ordinary Propter Nuptias
Express acceptance
Necessary Not required
As to minors
Cant be made by minors May be made by minors
(FC 78)
As to future property
Cannot include future
property
May include future
property (same rule as
wills)
Limit as to donation of present property
No limit to donation of
present property provided
legitimes are not impaired
If present property is
donated and property
regime is ACP, limited to
1/5
Grounds for revocation
Law on donations FC 86
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Causes for revocation of donation propter nuptias:

(1) If the marriage is not celebrated or judicially
declared void ab initio, except donations
made in the marriage settlements
(2) When the marriage takes place without the
consent of the parents or guardian, as
required by law;
(3) When the marriage is annulled, and the
donee acted in bad faith;
(4) Upon legal separation, the donee being the
guilty spouse;
(5) If it is with a resolutory condition and the
condition is complied with;
(6) When the donee has committed an act of

ingratitude as specified by the provisions of

the Civil Code on donations in general.
Donation between spouses
GENERAL RULE: Every donation or grant of
gratuitous advantage, direct or indirect, between
the spouses during the marriage shall be void.
The prohibition applies to persons living together
as husband and wife without a valid marriage
EXCEPTION: Moderate gifts which the spouses
may give each other on the occasion of any family
rejoicing.
(3) Donation Mortis Causa (NCC 728)
(a) Becomes effective upon the death of donor
(b) Donors death ahead of the donee is a
suspensive condition for the existence of the
donation
Characteristics:
(a) Transferor retains ownership and control of
the property while alive
(b) Transfer is revocable at will before his death
(c) Transfer will be VOID if the transferor should
survive the transferee
Inter Vivos v. Mortis Causa
Inter vivos Mortis causa
As to formalities
Executed and accepted
with formalities
prescribed by CC
Must be in the form of a
will, with all the
formalities for the validity
of wills
As to effectivity
Effective during the
lifetime of the donor
Effective after the death
of the donor
As to acceptance
Acceptance must be
made during the lifetime
Acceptance must be
made after the death of
Inter vivos Mortis causa
of the donor the donor, the donation
being effective only after
the death of donor.
Acceptance during the
donors lifetime is
premature and
ineffective because there
can be no contract
regarding future
inheritance
As to transfer of ownership for right of disposition
Ownership is immediately

transferred. Delivery of
possession is allowed
after death
Ownership is transferred
after death
As to revocation
Irrevocable may be
revoked only for the
reasons provided in CC
760, 764, 765
Revocable upon the
exclusive will of the donor
As to reduction or suppression
When it is excessive or
inofficious, being
preferred, it is reduced
only after the donations
mortis causa had been
reduced or exhausted
When it is excessive or
inofficious, it is reduced
first, or even suppressed
Note:
(a) NATURE of the act, whether its one of
disposition or of execution, is CONTROLLING
to determine whether the donation is mortis
causa or inter vivos.
(b) What is important is the TIME of TRANSFER
of ownership even if transfer of property
donated may be subject to a condition or a
term.
(c) Whether the donation is inter vivos or mortis
causa depends on whether the donor
intended to transfer ownership over the
properties upon the execution of the deed.
(Gestopa v. CA; Austria-Magat v. CA)
As to cause or consideration
(1) Simple - made out of pure liberality or because of
the merits of the donee
(2) Remuneratory - made for services already
rendered to the donor
(3) Onerous - imposes a BURDEN inferior in value to
property donated
(a) Improper - burden EQUAL in value to property
donated
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(b) Sub-modo or modal - imposes a prestation

upon donee as to how property donated will
be applied
(c) Mixed donations e.g. sale for price lower
than value of property
As to effectivity or extinguishment
(1) Pure donation is without conditions or periods
(2) Conditional donation is subject to suspensive or
resolutory conditions

(3) With a term

FORMALITIES REQUIRED

How made and accepted

Movables (NCC 748)
(1) The donation of a movable may be made orally or
in writing.
(2) Oral donation: requires the simultaneous delivery
of the thing or of the document representing the
right donated.
(3) If the value of the movable donated exceeds
P5000, the donation and the acceptance should
be in writing, otherwise, donation is void
Immovables (NCC 749)
(1) Must be in a public instrument specifying
donated property and burdens assumed by the
done
(2) Acceptance must be either:
(a) In the same instrument or
(b) In another public instrument notified to the
donor in authentic form and noted in both
deeds
(3) Exceptions:
(a) Donations propter nuptias need no express
acceptance
(b) Onerous donations form governed by the
rules of contracts
Perfection
Acceptance
(1) Donation is perfected upon the donors learning
of the acceptance
(2) Acceptance may be made during the lifetime of
both donor and donee
Who May Accept
Donee: must accept personally or through an
authorized person with special power for the purpose
(NCC 745)
Time Of Acceptance
During lifetime of donor and donee
QUALIFICATIONS OF DONOR, DONEE
Who May Give Donations
All persons who may contract and dispose of their
property may make a donation (NCC 735)
NOTE:
(1) Donors capacity shall be determined as of the
time of the making of the donation. (NCC 737)
(2) Capacity to donate is required for donations inter
vivos and NOT mortis causa
(3) Donors capacity determined as of the time of the
donation. Subsequent incapacity is immaterial.
Who May Receive Donations
(1) All who are not specially disqualified by law (NCC
738)
(2) Minors and others who cannot enter into a
contract: acceptance made through their parents
or legal representatives (NCC 741)

(3) Donations made to conceived and unborn

children: accepted by those persons who would
legally represent them if they were already born
(NCC 737)
Who May Not Give or Receive Donations
By reason of public policy (NCC 739)
(1) Those made between persons guilty of adultery
or concubinage at the time of donation
(2) Those made between persons guilty of the same
criminal offense if the donation is made in
consideration thereof
(3) Those made to a public officer, his spouse,
descendants, and/or ascendants by reason of the
office
By reason of donees unworthiness [NCC 1032 and 1027
except (4)]
NCC 1032:
(1) Parents who have abandoned their children or
induced their daughters to lead a corrupt or
immoral life, or attempted against their virtue;
(2) Any person who has been convicted of an
attempt against the life of the testator, his or her
spouse, descendants, or ascendants;
(3) Any person who has accused the testator of a
crime for which the law prescribes imprisonment
for six years or more, if the accusation has been
found groundless;
(4) Any heir of full age who, having knowledge of the
violent death of the testator, should fail to report
it to an officer of the law within a month, unless
the authorities have already taken action; this
prohibition shall not apply to cases wherein,
according to law, there is no obligation to make
an accusation;
(5) Any person convicted of adultery or concubinage
with the spouse of the testator;
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(6) Any person who by fraud, violence, intimidation,

or undue influence should cause the testator to
make a will or to change one already made;
(7) Any person who by the same means prevents
another from making a will, or from revoking one
already made, or who supplants, conceals, or
alters the latter's will;
(8) Any person who falsifies or forges a supposed will
of the decedent.
NCC 1027:
(a) The priest who heard the confession of the
testator during his last illness, or the minister of
the gospel who extended spiritual aid to him
during the same period
(b) The relatives of such priest or minister of the
gospel within the fourth degree, the church,
order, chapter, community, organization, or
institution to which such priest or minister may

belong
(c) A guardian with respect to testamentary
dispositions given by a ward in his favor before
the final accounts of the guardianship have been
approved, even if the testator should die after the
approval thereof; nevertheless, any provision
made by the ward in favor of the guardian when
the latter is his ascendant, descendant, brother,
sister, or spouse, shall be valid
(d) Any physician, surgeon, nurse, health officer or
druggist who took care of the testator during his
last illness
(e) Individuals, associations and corporations not
permitted by law to inherit
By reason of prejudice to creditors or heirs (voidable)
EFFECTS OF DONATION/LIMITATIONS
In general
(1) Donee may demand actual delivery of thing
donated
(2) Donee is SUBROGATED to rights of donor in the
property donated
(3) Donor NOT obliged to warrant things donated
EXCEPT in onerous donations in which case
donor is liable for eviction up to extent of burden
(ART. 754)
(4) Donor is liable for EVICTION or HIDDEN
DEFECTS in case of BF on his part (ART. 754)
(5) In donation propter nuptias, donor must
RELEASE property donated from mortgages and
other encumbrances UNLESS the contrary has
been stipulated
(6) Donations to several donees jointly NO right of
accretion EXCEPT:
(a) Donor provides otherwise
(b) Donation to husband and wife jointly with
right of accretion UNLESS donor provides
otherwise
Special Provisions
Reservation by donor of power to dispose (in whole or in
part) or to encumber property donated (NCC 755)
(1) The right to dispose of some things donated, or of
some amount which shall be a charge thereon,
may be reserved by the donor
(2) But if he should die without having made use of
this right, the property or amount reserved shall
belong to the donee.
Donation of naked ownership to one donee and
usufruct to another (NCC 756)
(1) May be donated
(2) Provided all the donees are living at the time of
the donation
Conventional reversion in favor of donor or other person
(NCC 757)
(1) In favor of donor, for any case and circumstance
(2) In favor of other persons who must be living at

the time of donation

(3) If rule is violated, reversion is void but donation is
not nullified
Payment of donors debt (NCC 758)
(1) If expressly stipulated - donee to pay only debts
contracted before the donation unless specified
otherwise. But in no case shall donee be
responsible for debts exceeding value of property
donated unless clearly intended
(2) if theres no stipulation - donee answerable only
for donors debt only in case donation is in fraud
of creditors
Illegal or impossible conditions (NCC 1183)
(1) Impossible conditions, those contrary to good
customs or public policy and those prohibited by
law shall annul the obligation which depends
upon them.
(2) If the obligation is divisible, that part thereof
which is not affected by the impossible or
unlawful condition shall be valid.
(3) The condition not to do an impossible thing shall
be considered as not having been agreed upon.
Double donations
Rule: Priority in time, priority in right
(1) If movable one who first took possession in
good faith
(2) If immovable one who recorded in registry of
property in good faith
(a) no inscription, one who first took
possession in good faith
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(b) in absence thereof, one who can

present oldest title
Excessive/Inofficious Donations
A donation in which a person gives or receives more
than what he may give or receive by will (NCC 752)
Donation inter vivos, made by a person having no
children or descendants, legitimate or legitimated by
subsequent marriage, or illegitimate, may be
revoked or reduced by the happening of any of these
events:
(1) If the donor, after the donation, should have
legitimate or legitimated or illegitimate children,
even though they be posthumous;
(2) If the child of the donor, whom the latter believed
to be dead when he made the donation, should
turn out to be living;
(3) If the donor subsequently adopt a minor child
The donation shall be revoked or reduced insofar as
it exceeds the portion that may be freely disposed of
by will, taking into account the whole estate of the
donor at the time of the birth, appearance or
adoption of a child
Inofficious Donations
(1) Shall be reduced with regard to the excess;

(2) But this reduction shall not prevent the donations

from taking effect during the life of the donor, nor
shall it bar the donee from appropriating the
fruits
(3) Only those who at the time of the donor's death
have a right to the legitime and their heirs and
successors in interest may ask for the reduction
or inofficious donations
(4) If, there being two or more donations, the
disposable portion is not sufficient to cover all of
them, those of the more recent date shall be
suppressed or reduced with regard to the excess.
Scope of amount (NCC 750-752)
(1) The donations may comprehend all the present
property of the donor, or part thereof
Provided he reserves, in full ownership or in
usufruct, sufficient means for the support of
himself, and of all relatives who, at the time of
the acceptance of the donation, are by law
entitled to be supported by the donor
(2) Donations cannot comprehend future property.
Future property is understood anything which the
donor cannot dispose of at the time of the
donation
In fraud of creditors (NCC 759)
(1) Donation is always presumed to be in fraud of
creditors, when at the time thereof the donor did
not reserve sufficient property to pay his debts
prior to the donation
(2) Donee shall be responsible therefor only when
the donation has been made in fraud of creditors
VOID DONATIONS (NCC

739-740, 1027)

(1) Those made between persons who were guilty of

adultery or concubinage at the time of the
donation;
NOTE: The action for declaration of nullity may
be brought by the spouse of the donor or donee;
and the guilt of the donor and donee may be
proved by preponderance of evidence in the same
action
(2) Those made between persons found guilty of the
same criminal offense, in consideration thereof;
(3) Those made to a public officer or his wife,
descendants and ascendants, by reason of his
office.
(4) Those made to persons incapacitated to succeed
by will [Art 1027]
REVOCATION AND REDUCTION

Revocation Reduction
Total, whether the
legitime is impaired or
not
Made insofar as the
legitime is prejudiced
Benefits the donor

Benefits the donors heirs

(except when made on
the ground of the
appearance of a child)
Reduction
(1) Inofficiousness
A donation in which a person gives or receives
more than what he may give or receive by will is
inofficious (NCC 752)
(2) Subsequent birth, reappearance of child or
adoption of minor by donor
Effects:
(1) Donation is VALID if not exceeding the free part
computed as of the birth, adoption or
reappearance of the child
(2) Donee must return the property or its value at the
time of the donation
(3) Fruits to be returned from the filing of the action
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(4) Mortgages by the donee are valid but may be

discharged subject to reimbursement from the
donee
Extent of revocation only to the extent of the
presumptive legitime of the child
Prescription 4yrs
Revocation
Ingratitude
In the following cases:
(1) If the donee should commit some offense against
the person, the honor or the property of the
donor, or of his wife or children under his parental
authority;
(2) If the donee imputes to the donor any criminal
offense, or any act involving moral turpitude,
even though he should prove it, unless the crime
or the act has been committed against the donee
himself, his wife or children under his authority;
(3) If he unduly refuses him support when the donee
is legally or morally bound to give support to the
donor.
Applies to all donations EXCEPT:
(1) Mortis causa
(2) Propter nuptias
(3) Onerous
Founded on moral duty one who received a
donation must be grateful to his benefactor
Conviction NOT necessary
Time to file action for revocation within 1yr from
knowledge of the offense
Who may file
Donor must bring action himself; not transmissible
to his heirs
Effect of revocation on alienations and encumbrances
(NCC 766)
(1) Alienations and mortgages effected before the

notation of the complaint for revocation in the

Registry of Property shall subsist
(2) Later ones shall be void
Effect as to fruits (NCC 768)
When the donation is revoked for any of the causes
stated in NCC 760, or by reason of ingratitude, or
when it is reduced because it is inofficious, donee
shall not return the fruits except from the filing of the
complaint
(1) If the revocation is based upon noncompliance
with any of the conditions imposed in the
donation, the donee shall return not only the
property but also the fruits thereof which he may
have received after having failed to fulfill the
condition
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What may be donated

All present property of the donor or part thereof Limitation:
(1) He reserves in full ownership or in usufruct,
sufficient means for his support and for all
relatives who are at the time of the acceptance of
the donation are, by law, entitled to be supported
Effect of non-reservation: reduction of the
donation
(2) He reserves sufficient property at the time of the
donation for the full settlement of his debts
Effect of non-reservation: considered to be a
donation in fraud of creditors, and donee may be
liable for damages
What may not be donated
(1) Future property; those which the donor cannot
dispose of at the time of the donation (Article 751)
(2) More than what he may give or receive by will
(Article 752)
If exceeds: inofficious
Donations made to several persons jointly
No accretion one donee does not get the share of
the other donees who did not accept (Article 753)
Exception: those given to husband and wife, except
when the donor otherwise provides
Donor
Who are allowed: All persons who may contract (of
legal age) and dispose of their property (Article 735)
Donors capacity is determined at the time of the
making of donation (Article 737)
Who are not allowed:
(1) Guardians and trustees with respect to the
property entrusted to them (Article 736)
(2) Made between person who are guilty of adultery
or concubinage (Article 739)
Made between persons found guilty of the same
criminal offense, in consideration thereof (Article 739)
Donee
Who are allowed to accept donations: Those who are
not specifically disqualified by law (Article 738)

Those who are allowed, with qualifications:

(1) Minors and others who are incapacitated (see
Article 38), provided that their acceptance is done
through their parents or legal representatives
(Article 741)
(2) Conceived and unborn children, provided that the
donation is accepted by those who would legally
represent them if they were already born
Who are not allowed:
(1) Made between person who are guilty of adultery
or concubinage (Article 739)
(2) Made between persons found guilty of the same
criminal offense, in consideration thereof (Article
739)
(3) Made to a public officer or his wife, descendant
and ascendants, by reason of his office (Article
739)
(4) Those who cannot succeed by will (Article 740)
Those made to incapacitated persons, although
simulated under the guise of another contract (Article
743)
Acceptance of the donation
Who may accept (Article 745):
(1) Donee personally
When to accept: during the lifetime of the donor or
donee (Article 746)
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(2) Authorized person with a special power for the

purpose or with a general sufficient power
What the donee acquires with the thing
He shall be subrogated to all the rights and actions
that would pertain to the donor in case of eviction
(Article 754)
Obligation of the donor
No obligation to warrant (Article 754) Exception: when the donation is onerous
Obligation of the donee
If the donation so states, the donee may be obliged to
pay the debts previously contracted by the donor and
in no case shall he be responsible for the debts
exceeding the value of the thing donated (Article 758)
Exception: when contrary intention appears
What may be reserved by the donor
Right to dispose of some of the things donated, or of
some amount which shall be a charge thereon
If the donor dies without exercising this right
Reversion
The property donated may be restored or returned to
(1) Donor or his estate; or
(2) Another person
Limitation to (2): the third person would be living at
the time of the donation
Revocation/Reduction
Time of Action Transmissibility Effect Liability (Fruits)
Birth, appearance, adoption
Within 4 years from birth,

legitimation and adoption

Transmitted to children
and descendants upon
the death of donor
Property returned/ value
(if sold)/ redeem
mortgage with right to
recover
Fruits returned from the
filing of the complaint
Non-compliance with condition
Within 4 years from noncompliance
May be transmitted to
donors heirs and may be
exercised against donees
heirs
Property returned,
alienations and
mortgages void subject to
rights of third persons in
good faith
Fruits received after
having failed to fulfill
condition returned
Ingratitude
Within 1 year after
knowledge of the fact
Generally not transmitted
to heirs of donor/ donee
Property returned, but
alienations and
mortgages effected
before the notation of the
complaint for revocation
in the registry of property
subsist
Fruits received from the
filing of the complaint
returned
Failure to reserve sufficient means for support
At any time, by the donor
or relatives entitled to
support
Not transmissible
Reduced to the extent
necessary to provide
support
Donee entitled
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Time of Action Transmissibility Effect Liability (Fruits)

Inofficiousness for being in excess of what the donor can give by will
Within 5 years from the
death of the donor
Transmitted to donors
heirs

Donation takes effect on

the lifetime of donor.
Reduction only upon his
death with regard to the
excess
Donee entitled
Fraud against creditors
Rescission within 4 years
from the perfection of
donation/ knowledge of
the donation
Transmitted to creditors
heirs or successors-ininterest
Returned for the benefit
of the creditor who
brought the action
Fruits returned/ if
impossible, indemnify
creditor for damages
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TRADITION
CONCEPT

It is a derivative mode of acquiring ownership and

other real rights by virtue of which, there being
intention and capacity on the part of the grantor and
grantee and the pre-existence of said rights in the
estate of the grantor, they are transmitted to the
grantee through a just title.
REQUISITES

(1) Pre-existence in the estate of the grantor of the

right to be transmitted
(2) Just cause or title for the transmission
(3) Intention on the part of the grantor to grant and
on the part of the grantees to acquire
(4) Capacity to transmit and to acquire
(5) An act which gives it outward form, physically,
symbolically, or legally
PURPOSE

(1) Ownership is transferred, among other means, by

tradition.
(2) The delivery of a thing constitutes a necessary
and indispensable requisite for the purpose of
acquiring the ownership of the same by virtue of
a contract
KINDS

(1) Real Tradition: physical delivery

(2) Constructive Tradition: when the delivery of the
thing is not real or material but consists merely in
certain facts indicative of the same
(a) Symbolical Tradition: done through the
delivery of signs or things which represent
that which is being transmitted (e.g. keys or
title itself)
(b) Tradition by public instrument: consists in the
substitution of real delivery of possession by a
public writing with the delivery of a document

which evidences the transaction

(c) Tradicio longa manu: made by the grantor
pointing out to the grantee the thing to be
delivered
(d) Tradicio brevi manu: takes place when the
grantee is already in possession of the thing
(e.g. when the lessee buys the thing leased to
him)
(e) Tradicion constitutum possessorium: similar to
brevi manu but in the opposite sense when
the owner alienates a thing but remains in
possession in another concept as lesee or
depositary
(3) Quasi tradition: delivery of incorporeal things or
rights by the use by the grantee of his rights with
the grantors consent
(4) Tradicion by operation of law: delivery which is not
included in the foregoing modes of delivery and
where the delivery is effected solely by virtue of
an express provision of law

Prescription

DEFINITION
By prescription, one acquires ownership and other
real rights through the lapse of time in the manner
and under the conditions laid down by law.
In the same way, rights and conditions are lost by
prescription.
It is a means of acquiring ownership and other real
rights or losing rights or actions to enforce such
rights through the lapse of time
RATIONALE
It is purely statutory in origin. It is founded on
grounds of public policy which requires for the peace
of society, that juridical relations susceptible of
doubt and which may give rise to disputes, be fixed
and established after the lapse of a determinate time
so that ownership and other rights may be certain for
those who have claim in them
KINDS OF PRESCRIPTION
(1) Acquisitive prescription
(2) Extinctive prescription
ACQUISITIVE PRESCRIPTION

(1) The acquisition of ownership and other real rights

through possession of a thing in the manner and

condition provided by law
(2) May be ordinary or extraordinary
(a) Ordinary: requires possession of things in
good faith and with just title for the time fixed
by law.
(b) Extraordinary: acquisition of ownership and
other real rights without need of title or of
good faith or any other condition
Prescription where possession in good faith converted
into possession in bad faith:

Ordinary
(1) Movables- 4 years
(2) Immovables- 10 years
Extraordinary:
(1) Movables- 8 years
(2) Immovables- 30 years
Note: Since the period of extraordinary prescription
for movables is two times longer than ordinary
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prescription (8:4) than ordinary prescription for

movables and three times longer (30:10) than that
for immovables, the period of possession in good
faith should be computed twice or thrice, as the case
may be, when tacked to the possession in bad faith.
As a mode of acquisition, prescription requires
existence of following:
(1) Capacity of the claimant to acquire by
prescription;
(2) A thing capable of acquisition by prescription;
(3) Adverse possession of the thing under certain
conditions; and
(4) Lapse of time provided by law
(5) Good faith of the possessor
(6) Proof of just title
Note:
(1) For extraordinary prescription, only first 4 are
required
(2) Possession has to be in the concept of an owner,
public, peaceful, and uninterrupted (UPPO)
EXTINCTIVE PRESCRIPTION

The loss or extinguishment of property rights or

actions through the possession by another of a thing
for the period provided by law or through failure to
bring the necessary action to enforce ones right
within the period fixed by law
Acquisitive Prescription Extinctive Prescription
Requires positive action of
the possessor (a claimant)
who is not the
Owner
Requires inaction of the
owner out of possession
or neglect of one with a
right to bring his action
Applicable to ownership
and other real rights
Applicable to all kinds of
rights, whether real or
personal
Vests the property and
raise a new title in the
occupant
Vests the property and
raise a new title in the
occupant

Results in the acquisition

of ownership or other real
rights in a person as well
as the loss of said
ownership or real rights in
another
Merely results in the loss
of a real or personal right,
or bars the cause of action
to enforce said right
Can be proven under the
general issue without its
being affirmatively
pleaded
Should be affirmatively
pleaded and proved to
bar the action or claim of
the adverse party
NO PRESCRIPTION APPLICABLE
BY OFFENDER

Movables possessed through a crime can never be

acquired through prescription by the offender
REGISTERED LANDS - PD 1529 (AMENDING AND
CODIFYING THE LAWS RELATIVE TO REGISTRATION OF
PROPERTY AND FOR OTHER PURPOSES)

No title to registered land in derogation of the title of

the registered owner shall be acquired by
prescription or adverse possession
RIGHTS NOT EXTINGUISHED BY PRESCRIPTION (NCC 1143)
(1) To demand a right of way, regulated in NCC 649
(2) To bring an action to abate a public or private
nuisance
ACTION TO QUIET TITLE IF PLAINTIFF IS IN POSSESSION

(1) When plaintiff is in possession of the property:

the action to quiet title does not prescribe

(2) The reason is that the owner of the property or
right may wait until his possession is disturbed or
his title is assailed before taking steps to
vindicate his right
VOID CONTRACTS

(1) The action or defense for the declaration of the

inexistence of a contract does not prescribe (NCC
1410)
(2) The title is susceptible to direct as well as to
collateral attack (Ferrer v. Bautista, 1994)
ACTION TO DEMAND PARTITION

No prescription shall run in favor of a co-owner or coheir

against his co-owners or co-heirs so long as he
expressly or impliedly recognizes the co-ownership
(NCC 494)
PROPERTY OF PUBLIC DOMINION

Prescription, both acquisitive and extinctive, does not

run against the State in the exercise of its sovereign
function to protect its interest EXCEPT with respect
to its patrimonial property which may be the object
of prescription (NCC 1113)

PRESCRIPTION DISTINGUISHED FROM LACHES

Prescription Laches
Concerned with the fact of
delay
Concerned with the effect
of delay
A question or a matter of
time
Principally a question of
inequity of permitting a
claim to be enforced, this
inequity being founded on
some subsequent change
in the condition or the
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Prescription Laches
relation of the parties
Statutory NOT statutory
Applies at law Applies at equity
Cannot be availed of
unless it is especially
pleaded as an affirmative
allegation
Being a defense of equity,
need not be specifically
pleaded
Based on a fixed time NOT based on a fixed
time
PRESCRIPTION OR LIMITATION OF ACTIONS
TO RECOVER MOVABLES

(1) Prescribe 8 years from the time the possession

thereof is lost (NCC 1140)

(2) However, the action shall not prosper if it is
brought after 4 years when the possessor has
already acquired title by ordinary acquisitive
prescription (NCC 1132)
(3) If the possessor acquired the movable in good
faith at a public sale, the owner cannot obtain its
return without reimbursing the price paid
TO RECOVER IMMOVABLES

(1) Real actions prescribe after 30 years (NCC 1141)

(2) UNLESS the possessor has acquired ownership of

the immovable by ordinary acquisitive

prescription through possession of 10 years (NCC
1134)
(3) Action for reconveyance
(a) Based on fraud: prescribes 4 years from the
discovery of fraud
(b) Based on implied or constructive trust: 10 years
from the alleged fraudulent registration or
date of issuance of certificate of title over the
property
OTHER ACTIONS

(1) Action to foreclose mortgage: prescribes after 10

years from the time the obligation secured by the
mortgage becomes due and demandable

(2) Actions that Prescribe in 10 Years (NCC 1144)

(a) Upon a written contract
(b) Upon an obligation created by law
(c) Upon a judgment
The computation of the period of prescription of
any cause or right of action, which is the same as
saying prescription of the action, should start
from the date the cause of action accrues or from
the day the right of the plaintiff is violated.
(Nabus v. CA, 1991)
(3) Actions that Prescribe in 6 Years (NCC 1145)
(a) Upon an oral contract
(b) Upon a quasi-contract
(4) Actions that Prescribe in 4 Years (NCC 1145)
(a) Upon an injury to the rights of the plaintiff
(b) Upon a quasi-delict
BUT when the action arises from any act of any
public officer involving the exercise of powers
arising from Martial Law including the arrest,
detention and/or trial of the plaintiff, the same
must be brought within 1 year.
(5) Actions that Prescribe in One Year or Less (NCC
1147)
(a) For forcible entry or unlawful detainer
(b) For defamation
(6) Other Actions that Prescribe in 1 Year under the
Civil Code
(a) To recover possession de facto (NCC 554 (4)]
(b) To revoke a donation on the ground of
ingratitude (NCC 769)
(c) To rescind or recover damages if immovable is
sold with non-apparent burden or servitude
[NCC 1560 (3,4)]
(d) To enforce warranty of solvency in assignment
credits (NCC 629)
(7) Where Periods of Other Actions Not Fixed in the
Civil Code and in Other Laws
All other actions whose periods are not fixed in
the Civil Code or in other laws must be brought
within 5 years from the time the right of action
accrues (NCC 1149)
(8) Interruption (NCC 1155)
The prescription of actions is interrupted when:
(a) They are filed before the court
(b) When there is a written extrajudicial demand
by the creditors
(c) When there is any written acknowledgment of
the debt by the debtor
Civil actions are deemed commenced from the
date of the filing and docketing of the complaint
with the Clerk of Court [Cabrera v. Riano (1963)]
A written extrajudicial demand wipes out the
period that has already elapsed and starts anew
the prescriptive period [The Overseas Bank of
Manila v. Geraldez, (1979)]

Not all acts of acknowledgement of a debt

interrupt prescription. To produce such effect, the
acknowledgment must be written, so that the
payment, if not coupled with the communication
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signed by the payor would interrupt the running

of the period of prescription [PNB v. Osete (1968)]
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Definition

1156
Art. 1156. An obligation is a juridical necessity to give,
to do or not to do.
ARTICLE

Elements of an Obligation

ELEMENTS OF AN OBLIGATION [De Leon, 2003]

(1) ACTIVE SUBJECT (Obligee/Creditor): The person
who has the right or power to demand the
prestation.
(2) PASSIVE SUBJECT (Obligor/Debtor): The person
bound to perform the prestation.
(3) PRESTATION (Object): The conduct required to
be observed by the debtor/obligor (to give, to do,
or not to do).
(4) VINCULUM JURIS (Juridical or Legal Tie; Efficient
Cause): That which binds or connects the parties
to the obligation.

Different Kinds of Prestations

(1) TO GIVE: real obligation; to deliver either (1) a
specific or determinate thing, or (2) a generic or
indeterminate thing.
(2) TO DO: positive personal obligation; includes all
kinds of work or service.
(3) NOT TO DO: negative personal obligation; to
abstain from doing an act; includes the obligation
not to give.

Classification of Obligations

FROM THE VIEWPOINT OF SANCTION:

(1) Civil obligation (or perfect obligation) the
sanction is judicial process
(2) Natural obligation the sanction is the law
(3) Moral obligation (or imperfect obligation) the
sanction is conscience or morality
FROM THE VIEWPOINT OF SUBJECT MATTER:
(1) Real obligation obligation to give
(2) Personal obligation obligation to do or not to
do
FROM THE AFFIRMATIVENESS OR
NEGATIVENESS OF THE OBLIGATION:
(1) Positive/affirmative - obligation to give or to do
(2) Negative obligation not to do or not to give
FROM THE VIEWPOINT OF PERSONS OBLIGED:

(1) Unilateral only one of the parties is bound

(2) Bilateral both parties are bound
(a) Reciprocal performance by one is
dependent on the other
(b) Non-reciprocal performance by one is
independent of the other [Paras, 2008]

Sources of Obligations, Arts.

1156-1157

SINGLE ACT OR OMISSION CAN GIVE RISE TO

DIFFERENT CAUSES OF ACTION
Barredo vs Garcia (1942):
[A] concurrence of scope in regard to negligent
acts does not destroy the distinction between the
civil liability arising from a crime and the
responsibility for cuasi-delitos or culpa extracontractual.
The same negligent act causing
damages may produce civil liability arising from a
crime... or create an action for cuasi-delito or culpa
extra-contractual.
NATURAL OBLIGATIONS
ARTICLE 1423
Art. 1423. Obligations are civil or natural. Civil
obligations give a right of action to compel their
performance. Natural obligations, not being based
on positive law but on equity and natural law, do not
grant a right of action to enforce their performance,
but after voluntary fulfillment by the obligor, they
authorize the retention of what has been delivered or
rendered by reason thereof. Some natural
obligations are set forth in the following articles.
ARTICLE 1424
Art. 1424. When a right to sue upon a civil obligation
has lapsed by extinctive prescription, the obligor who
voluntarily performs the contract cannot recover
what he has delivered or the value of the service he
has rendered.
ARTICLE 1425
Art. 1425. When without the knowledge or against
the will of the debtor, a third person pays a debt
which the obligor is not legally bound to pay because
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the action thereon has prescribed, but the debtor

later voluntarily reimburses the third person, the
obligor cannot recover what he has paid.
ARTICLE 1426
Art. 1426. When a minor between eighteen and
twenty-one years of age who has entered into a
contract without the consent of the parent or
guardian, after the annulment of the contract
voluntarily returns the whole thing or price received,
notwithstanding the fact the he has not been
benefited thereby, there is no right to demand the
thing or price thus returned.

1427
Art. 1427. When a minor between eighteen and
twenty-one years of age, who has entered into a
contract without the consent of the parent or
guardian, voluntarily pays a sum of money or delivers
a fungible thing in fulfillment of the obligation, there
shall be no right to recover the same from the
obligee who has spent or consumed it in good faith.
ARTICLE 1428
Art. 1428. When, after an action to enforce a civil
obligation has failed the defendant voluntarily
performs the obligation, he cannot demand the
return of what he has delivered or the payment of the
value of the service he has rendered.
ARTICLE 1429
Art. 1429. When a testate or intestate heir voluntarily
pays a debt of the decedent exceeding the value of the
property which he received by will or by the law of
intestacy from the estate of the deceased, the
payment is valid and cannot be rescinded by the
payer.
ARTICLE 1430
Art. 1430. When a will is declared void because it has
not been executed in accordance with the formalities
required by law, but one of the intestate heirs, after
the settlement of the debts of the deceased, pays a
legacy in compliance with a clause in the defective
will, the payment is effective and irrevocable.
EXTRA-CONTRACTUAL OBLIGATIONS
QUASI-CONTRACTS
ARTICLE 2142
Art. 2142. Certain lawful, voluntary and unilateral
acts give rise to the juridical relation of quasicontract
to the end that no one shall be unjustly
enriched or benefited at the expense of another.
ARTICLE 2143
Art. 2143. The provisions for quasi-contracts in this
Chapter do not exclude other quasi-contracts which
may come within the purview of the preceding article.
Negotiorum Gestio
ARTICLE 2144
Art. 2144. Whoever voluntarily takes charge of the
agency or management of the business or property
of another, without any power from the latter, is
obliged to continue the same until the termination of
the affair and its incidents, or to require the person
concerned to substitute him, if the owner is in a
position to do so. This juridical relation does not arise
in either of these instances:
(1)When the property or business is not neglected or
abandoned;
(2) If in fact the manager has been tacitly authorized
by the owner.
In the first case, the provisions of Articles 1317, 1403,
No. 1, and 1404 regarding unauthorized contracts
ARTICLE

shall govern.
In the second case, the rules on agency in Title X of
this Book shall be applicable.
ARTICLE 2145
Art. 2145. The officious manager shall perform his
duties with all the diligence of a good father of a
family, and pay the damages which through his fault
or negligence may be suffered by the owner of the
property or business under management.
The courts may, however, increase or moderate the
indemnity according to the circumstances of each
case.
ARTICLE 2146
Art. 2146. If the officious manager delegates to
another person all or some of his duties, he shall be
liable for the acts of the delegate, without prejudice
to the direct obligation of the latter toward the
owner of the business.
The responsibility of two or more officious managers
shall be solidary, unless the management was
assumed to save the thing or business from
imminent danger.
ARTICLE 2147
Art. 2147. The officious manager shall be liable for
any fortuitous event:
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(1) If he undertakes risky operations which the owner

was not accustomed to embark upon;
(2) If he has preferred his own interest to that of the
owner;
(3) If he fails to return the property or business after
demand by the owner;
(4) If he assumed the management in bad faith.
ARTICLE 2148
Art. 2148. Except when the management was
assumed to save property or business from imminent
danger, the officious manager shall be liable for
fortuitous events:
(1) If he is manifestly unfit to carry on the
management;
(2) If by his intervention he prevented a more
competent person from taking up the
management.
ARTICLE 2149
Art. 2149. The ratification of the management by the
owner of the business produces the effects of an
express agency, even if the business may not have
been successful.
ARTICLE 2150
Art. 2150. Although the officious management may
not have been expressly ratified, the owner of the
property or business who enjoys the advantages of
the same shall be liable for obligations incurred in
his interest, and shall reimburse the officious
manager for the necessary and useful expenses and

for the damages which the latter may have suffered

in the performance of his duties.
The same obligation shall be incumbent upon him
when the management had for its purpose the
prevention of an imminent and manifest loss,
although no benefit may have been derived.
ARTICLE 2151
Art. 2151. Even though the owner did not derive any
benefit and there has been no imminent and
manifest danger to the property or business, the
owner is liable as under the first paragraph of the
preceding article, provided:
(1) The officious manager has acted in good faith,
and
(2) The property or business is intact, ready to be
returned to the owner.
ARTICLE 2152
Art. 2152. The officious manager is personally liable
for contracts which he has entered into with third
persons, even though he acted in the name of the
owner, and there shall be no right of action between
the owner and third persons. These provisions shall
not apply:
(1) If the owner has expressly or tacitly ratified the
management, or
(2) When the contract refers to things pertaining to
the owner of the business.
ARTICLE 2153
Art. 2153. The management is extinguished:
(1) When the owner repudiates it or puts an end
thereto;
(2) When the officious manager withdraws from the
management, subject to the provisions of Article
2144;
(3) By the death, civil interdiction, insanity or
insolvency of the owner or the officious manager.
Solutio Indebiti
ARTICLE 2154
Art. 2154. If something is received when there is no
right to demand it, and it was unduly delivered
through mistake, the obligation to return it arises.
ARTICLE 2155
Art. 2155. Payment by reason of a mistake in the
construction or application of a doubtful or difficult
question of law may come within the scope of the
preceding article.
ARTICLE 2156
Art. 2156. If the payer was in doubt whether the debt
was due, he may recover if he proves that it was not
due.
ARTICLE 2157
Art. 2157. The responsibility of two or more payees,
when there has been payment of what is not due, is
solidary.
ARTICLE 2158

Art. 2158. When the property delivered or money paid

belongs to a third person, the payee shall comply
with the provisions of Article 1984.
ARTICLE 2159
Art. 2159. Whoever in bad faith accepts an undue
payment, shall pay legal interest if a sum of money is
involved, or shall be liable for fruits received or which
should have been received if the thing produces
fruits.
He shall furthermore be answerable for any loss or
impairment of the thing from any cause, and for
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damages to the person who delivered the thing, until

it is recovered.
ARTICLE 2160
Art. 2160. He who in good faith accepts an undue
payment of a thing certain and determinate shall
only be responsible for the impairment or loss of the
same or its accessories and accessions insofar as he
has thereby been benefited. If he has alienated it, he
shall return the price or assign the action to collect
the sum.
ARTICLE 2161
Art. 2161. As regards the reimbursement for
improvements and expenses incurred by him who
unduly received the thing, the provisions of Title V of
Book II shall govern.
ARTICLE 2162
Art. 2162. He shall be exempt from the obligation to
restore who, believing in good faith that the payment
was being made of a legitimate and subsisting claim,
destroyed the document, or allowed the action to
prescribe, or gave up the pledges, or cancelled the
guaranties for his right. He who paid unduly may
proceed only against the true debtor or the
guarantors with regard to whom the action is still
effective.
ARTICLE 2163
Art. 2163. It is presumed that there was a mistake in
the payment if something which had never been due
or had already been paid was delivered; but he from
whom the return is claimed may prove that the
delivery was made out of liberality or for any other
just cause.
OTHER QUASI-CONTRACTS
ARTICLE 2164
Art. 2164. When, without the knowledge of the
person obliged to give support, it is given by a
stranger, the latter shall have a right to claim the
same from the former, unless it appears that he gave
it out of piety and without intention of being repaid.
ARTICLE 2165
Art. 2165. When funeral expenses are borne by a
third person, without the knowledge of those
relatives who were obliged to give support to the

deceased, said relatives shall reimburse the third

person, should the latter claim reimbursement.
ARTICLE 2166
Art. 2166. When the person obliged to support an
orphan, or an insane or other indigent person
unjustly refuses to give support to the latter, any
third person may furnish support to the needy
individual, with right of reimbursement from the
person obliged to give support. The provisions of this
article apply when the father or mother of a child
under eighteen years of age unjustly refuses to
support him.
ARTICLE 2167
Art. 2167. When through an accident or other cause a
person is injured or becomes seriously ill, and he is
treated or helped while he is not in a condition to
give consent to a contract, he shall be liable to pay
for the services of the physician or other person
aiding him, unless the service has been rendered out
of pure generosity.
ARTICLE 2168
Art. 2168. When during a fire, flood, storm, or other
calamity, property is saved from destruction by
another person without the knowledge of the owner,
the latter is bound to pay the former just
compensation.
ARTICLE 2169
Art. 2169. When the government, upon the failure of
any person to comply with health or safety
regulations concerning property, undertakes to do
the necessary work, even over his objection, he shall
be liable to pay the expenses.
ARTICLE 2170
Art. 2170. When by accident or other fortuitous event,
movables separately pertaining to two or more
persons are commingled or confused, the rules on
co-ownership shall be applicable.
ARTICLE 2171
Art. 2171. The rights and obligations of the finder of
lost personal property shall be governed by Articles
719 and 720.
ARTICLE 2172
Art. 2172. The right of every possessor in good faith to
reimbursement for necessary and useful expenses is
governed by Article 546.
ARTICLE 2173
Art. 2173. When a third person, without the
knowledge of the debtor, pays the debt, the rights of
the former are governed by Articles 1236 and 1237.
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PAGE 136

2174
Art. 2174. When in a small community a nationality of
the inhabitants of age decide upon a measure for
protection against lawlessness, fire, flood, storm or
other calamity, any one who objects to the plan and
ARTICLE

refuses to contribute to the expenses but is benefited

by the project as executed shall be liable to pay his
share of said expenses.
ARTICLE 2175
Art. 2175. Any person who is constrained to pay the
taxes of another shall be entitled to reimbursement
from the latter.
QUASI-DELICTS
ARTICLE 2176
Art. 2176. Whoever by act or omission causes damage
to another, there being fault or negligence, is obliged
to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict
and is governed by the provisions of this Chapter.
ARTICLE 2177
Art. 2177. Responsibility for fault or negligence under
the preceding article is entirely separate and distinct
from the civil liability arising from negligence under
the Penal Code. But the plaintiff cannot recover
damages twice for the same act or omission of the
defendant.
ARTICLE 2178
Art. 2178. The provisions of Articles 1172 to 1174 are
also applicable to a quasi-delict.
ARTICLE 2179
Art. 2179. When the plaintiff's own negligence was
the immediate and proximate cause of his injury, he
cannot recover damages. But if his negligence was
only contributory, the immediate and proximate
cause of the injury being the defendant's lack of due
care, the plaintiff may recover damages, but the
courts shall mitigate the damages to be awarded.
ARTICLE 2180
Art. 2180. The obligation imposed by Article 2176 is
demandable not only for one's own acts or
omissions, but also for those of persons for whom
one is responsible.
The father and, in case of his death or incapacity, the
mother, are responsible for the damages caused by
the minor children who live in their company.
Guardians are liable for damages caused by the
minors or incapacitated persons who are under their
authority and live in their company.
The owners and managers of an establishment or
enterprise are likewise responsible for damages
caused by their employees in the service of the
branches in which the latter are employed or on the
occasion of their functions.
Employers shall be liable for the damages caused by
their employees and household helpers acting within
the scope of their assigned tasks, even though the
former are not engaged in any business or industry.
The State is responsible in like manner when it acts
through a special agent; but not when the damage

has been caused by the official to whom the task

done properly pertains, in which case what is
provided in Article 2176 shall be applicable.
Lastly, teachers or heads of establishments of arts
and trades shall be liable for damages caused by
their pupils and students or apprentices, so long as
they remain in their custody.
The responsibility treated of in this article shall cease
when the persons herein mentioned prove that they
observed all the diligence of a good father of a family
to prevent damage.
ARTICLE 2181
Art. 2181. Whoever pays for the damage caused by his
dependents or employees may recover from the
latter what he has paid or delivered in satisfaction of
the claim.
ARTICLE 2182
Art. 2182. If the minor or insane person causing
damage has no parents or guardians, the minor or
insane person shall be answerable with his own
property in an action against him where a guardian
ad litem shall be appointed.
ARTICLE 2183
Art. 2183. The possessor of an animal or whoever
may make use of the same is responsible for the
damage which it may cause, although it may escape
or be lost. This responsibility shall cease only in case
the damage should come from force majeure or from
the fault of the person who has suffered damage.
ARTICLE 2184
Art. 2184. In motor vehicle mishaps, the owner is
solidarily liable with his driver, if the former, who was
in the vehicle, could have, by the use of the due
diligence, prevented the misfortune. It is disputably
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PAGE 137

presumed that a driver was negligent, if he had been

found guilty or reckless driving or violating traffic
regulations at least twice within the next preceding
two months.
If the owner was not in the motor vehicle, the
provisions of Article 2180 are applicable.
ARTICLE 2185
Art. 2185. Unless there is proof to the contrary, it is
presumed that a person driving a motor vehicle has
been negligent if at the time of the mishap, he was
violating any traffic regulation.
ARTICLE 2186
Art. 2186. Every owner of a motor vehicle shall file
with the proper government office a bond executed
by a government-controlled corporation or office, to
answer for damages to third persons. The amount of
the bond and other terms shall be fixed by the
competent public official.
ARTICLE 2187
Art. 2187. Manufacturers and processors of

foodstuffs, drinks, toilet articles and similar goods

shall be liable for death or injuries caused by any
noxious or harmful substances used, although no
contractual relation exists between them and the
consumers.
ARTICLE 2188
Art. 2188. There is prima facie presumption of
negligence on the part of the defendant if the death
or injury results from his possession of dangerous
weapons or substances, such as firearms and poison,
except when the possession or use thereof is
indispensable in his occupation or business.
ARTICLE 2189
Art. 2189. Provinces, cities and municipalities shall be
liable for damages for the death of, or injuries
suffered by, any person by reason of the defective
condition of roads, streets, bridges, public buildings,
and other public works under their control or
supervision.
ARTICLE 2190
Art. 2190. The proprietor of a building or structure is
responsible for the damages resulting from its total
or partial collapse, if it should be due to the lack of
necessary repairs.
ARTICLE 2191
Art. 2191. Proprietors shall also be responsible for
damages caused:
(1) By the explosion of machinery which has not been
taken care of with due diligence, and the
inflammation of explosive substances which have
not been kept in a safe and adequate place;
(2) By excessive smoke, which may be harmful to
persons or property;
(3) By the falling of trees situated at or near
highways or lanes, if not caused by force majeure;
(4) By emanations from tubes, canals, sewers or
deposits of infectious matter, constructed without
precautions suitable to the place.
ARTICLE 2192
Art. 2192. If damage referred to in the two preceding
articles should be the result of any defect in the
construction mentioned in Article 1723, the third
person suffering damages may proceed only against
the engineer or architect or contractor in accordance
with said article, within the period therein fixed.
ARTICLE 2193
Art. 2193. The head of a family that lives in a building
or a part thereof, is responsible for damages caused
by things thrown or falling from the same.
ARTICLE 2194
Art. 2194. The responsibility of two or more persons
who are liable for quasi-delict is solidary.

Nature and Effect of

Obligations

OBLIGATION TO GIVE
A DETERMINATE OR SPECIFIC THING
AN INDETERMINATE OR GENERIC THING

Specific Thing
Generic Thing
Limited Generic
Thing
Particularly
designated or
physically
segregated from
all other of the
same class;
identified by
individuality.
Object is
designated only
by its class/
genus/ species.
Debtor can give
anything of the
same class as
long as it is of
the same kind.
When the
generic objects
are confined to
a particular
class.
Cannot be
substituted.
Can be
substituted by
any of the same
class and same
kind.

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Duties of the Debtor

Rights of the creditor
To Give Specific Thing
(1) To preserve or take
care of the thing due
(2) To deliver the thing
itself
(3) To deliver the fruits of
the thing
(4) To deliver the
accessions and
accessories
(5) To pay for damages in
case of breach
(1) To compel specific
performance
(2) To recover damages
in case of breach of

the obligation,
exclusive or in
addition to specific
performance
(3) Entitlement to fruits
and interests from
the time the
obligation to deliver
arises
To Give Generic Thing
(1) To deliver a thing of
the quality intended by
the parties taking into
consideration the
purpose of the
obligation and other
circumstances
(2) Creditor cannot
demand a thing of
superior quality
neither can the debtor
deliver a thing of
inferior quality
(3) To be liable for
damages in case of
breach
(1) To ask for
performance of the
obligation
(2) To ask that the
obligation be
complied with by a
third person at the
expense of the
debtor
(3) To recover damages
in case of breach of
obligation
OBLIGATION TO DO OR NOT TO DO
Duties of the Debtor
Rights of the creditor
To do
(1) To do it
(2) To shoulder the
cost of having
someone else do it
(3) To undo what has
been poorly done
(4) To pay for
damages in case
of breach
(1) To compel
performance
(2) To recover damages
where personal

qualifications of the
debtor are involved
Not to do
(1) Not to do what should
not be done
(2) To shoulder the cost
of undoing what
should not have been
done
(1) To ask to undo what
should not be done
(2) To recover damages,
where it would be
physically or legally
impossible to undo
Duties of the Debtor
Rights of the creditor
(3) To pay for damages in
case of breach
what should not
have been done,
because of :
(a) the very nature of
the act itself;
(b) rights acquired by
third persons who
acted in good
faith;
(c) when the effects
of the acts
prohibited are
definite in
character and will
not cease even if
the thing
prohibited be
undone.
BREACH OF OBLIGATIONS
COMPLETE FAILURE TO PERFORM

Substantial Breach
Slight or Casual Breach
(1) Total breach
(2) Amounts to nonperformance;
basis for
rescission (resolution)
under Art. 1191 and for
payment of damages.
(1) Partial breach
(2) Obligation is partially
performed, or
substantial
performance in good
faith
(3) Gives rise to liability
for damages only

DEFAULT, DELAY, OR MORA

DEFAULT or DELAY (MORA): failure to perform an

obligation on time which constitutes breach of the
obligation [De Leon, 2003].
Rules on Mora, Delay or Default
Unilateral Obligations
Reciprocal Obligations
General Rule:
No demand, no delay.
The mere expiration of
the period fixed by the
parties is not enough in
order that the debtor
may incur in delay.
Those obliged to deliver
or to do something incur
General Rule:
Delay occurs from the
moment one party
fulfills his undertaking,
while the other does not
comply or is not ready to
comply in a proper
manner with what is
incumbent upon him.
No delay if neither party
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Unilateral Obligations
Reciprocal Obligations
in delay from the time
the obligee judicially or
extrajudicially demands
from them the
fulfillment of their
obligation [Art. 1169 par.
1].
performs his
undertaking [Art. 1169,
par. 2].
Exceptions:
ARTICLE 1169
Art. 1169. par 2-3:
xxx
However, the demand by the creditor shall not be
necessary in order that delay may exist:
(1) When the obligation or the law expressly so
declares; or
(2) When from the nature and the circumstances of
the obligation it appears that the designation of
the time when the thing is to be delivered or the
service is to be rendered was a controlling motive
for the establishment of the contract; (time is of
the essence) or
(3) When demand would be useless, as when the
obligor has rendered it beyond his power to

perform.
In reciprocal obligations, neither party incurs in delay
if the other does not comply or is not ready to comply
in a proper manner with what is incumbent upon
him. From the moment one of the parties fulfills his
obligation, delay by the other begins.
(1) Mora solvendi- Delay on the part of the debtor to
fulfill his obligation either to give (ex re) or to do
(ex persona)
No Mora Solvendi in:
(a) Negative obligations because delay is
impossible [De Leon, 2003]
(b) Natural obligations [Tolentino, 1987]
(2) Mora accipiendi- Delay on the part of the creditor
to accept the performance of the obligation.
(3) Compensatio morae- Delay of both parties in
reciprocal obligations. Effect: As if there is no
default.
Mora Solvendi
Mora Accipiendi
Requisites
(1) Obligation must be
liquidated, due and
demandable.
(2) Non-performance by
(1) Debtor offers
performance.
(2) Offer must be in
compliance with the
Mora Solvendi
Mora Accipiendi
the debtor within the
period agreed upon.
(3) Demand, judicial or
extra-judicial, by the
creditor.
prestation.
(3) Creditor refuses the
performance without
just cause.
Effects
(1) The debtor is liable for
damages.
(2) The debtor is liable
even if the loss is due
to fortuitous events.
(3) For determinate
objects, the debtor
shall bear the risk of
loss.
(1) The responsibility of
the debtor is reduced
to fraud and gross
negligence.
(2) The debtor is

exempted from risk of

loss of the thing
which is borne by the
creditor.
(3) The expenses
incurred by the
debtor for the
preservation of the
thing after the mora
shall be chargeable
to the creditor.
(4) If the obligation bears
interest, the debtor
does not have to pay
from the time of
delay.
(5) The creditor is liable
for damages.
(6) The debtor may
relieve himself of the
obligation by
consigning the thing.
FRAUD (DOLO) IN THE PERFORMANCE OF OBLIGATION
Fraud (dolo): deliberate or intentional evasion of the
normal fulfillment of an obligation [De Leon, 2003].
Waiver of future fraud is void. [Art. 1171]
Past Fraud: Can be subject of a valid waiver by the
aggrieved party. [De Leon, 2003]
Woodhouse vs. Halili (1953):
...[I]n order that fraud may vitiate consent, it must
be the dolo causante and not merely the dolo
incidente, inducement to the making of the contract.
The false representation was used by plaintiff to get
from defendant a bigger share of net profits. This is
just incidental to the matter in agreement. Because
despite plaintiffs deceit, respondent would have still
entered into the contract.
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NEGLIGENCE (CULPA) IN THE PERFORMANCE OF

OBLIGATION

Negligence or fault (culpa): Omission of that diligence

which is required by the nature of the obligation and
corresponds with the circumstances of the person, of
the time and of the place. [Art. 1173]
DILIGENCE NORMALLY REQUIRED IS ORDINARY DILIGENCE
OR DILIGENCE OF A GOOD FATHER OF A FAMILY;
EXCEPTIONS IN ARTS. 1998-2002.

Diligence Required [De Leon, 2003]

(a) By stipulation: that agreed upon by the parties.
(b) By law: in the absence of stipulation, that required
by law in the particular case.
(c) Diligence of a good father of a family: if both the
contract and law are silent.
(d) Future Negligence: may be waived except in cases
where the nature of the obligation or the public

requires another standard of care (i.e.

extraordinary diligence as for a common carrier)
Exceptions:
ARTICLE 1733
Art. 1733. Common carriers, from the nature of their
business and for reasons of public policy, are bound
to observe extraordinary diligence in the vigilance
over the goods and for the safety of the passengers
transported by them, according to all the
circumstances of each case.
Such extraordinary diligence in the vigilance over the
goods is further expressed in Articles 1734, 1735, and
1745, Nos. 5, 6, and 7, while the extraordinary
diligence for the safety of the passengers is further
set forth in Articles 1755 and 1756.
ARTICLE 1998
Art. 1998. The deposit of effects made by the
travelers in hotels or inns shall also be regarded as
necessary. The keepers of hotels or inns shall be
responsible for them as depositaries, provided that
notice was given to them, or to their employees, of
the effects brought by the guests and that, on the
part of the latter, they take the precautions which
said hotel-keepers or their substitutes advised
relative to the care and vigilance of their effects.
ARTICLE 1999
Art. 1999. The hotel-keeper is liable for the vehicles,
animals and articles which have been introduced or
placed in the annexes of the hotel.
ARTICLE 2000
Art. 2000. The responsibility referred to in the two
preceding articles shall include the loss of, or injury
to the personal property of the guests caused by the
servants or employees of the keepers of hotels or
inns as well as strangers; but not that which may
proceed from any force majeure. The fact that
travelers are constrained to rely on the vigilance of
the keeper of the hotels or inns shall be considered
in determining the degree of care required of him.
ARTICLE 2001
Art. 2001. The act of a thief or robber, who has
entered the hotel is not deemed force majeure,
unless it is done with the use of arms or through an
irresistible force.
ARTICLE 2002
Art. 2002. The hotel-keeper is not liable for
compensation if the loss is due to the acts of the
guest, his family, servants or visitors, or if the loss
arises from the character of the things brought into
the hotel.
Mandarin Villa Inc. v. CA (1996):
Test of negligence: Did the defendant in doing the
alleged negligent act use the reasonable care and
caution, which an ordinary and prudent person
would have used in the same situation? If not, then

he is guilty of negligence.
EXTENT OF DAMAGES TO BE AWARDED

Bad Faith Good Faith

Debtor is liable for all
damages, which can be
reasonably attributed to
the non-performance of
the obligation. Any waiver
or renunciation made in
anticipation of such
liability is null and void.
Debtor is liable only for
the natural and probable
consequences of the
breach of obligation and
fortuitous events.
Culpa Contractual Culpa Aquiliana
Negligence is merely
incidental in the
performance of an
obligation.
Negligence is
substantive and
independent.
There is always a preexisting
contractual
relation.
There may or may not be
a pre-existing
contractual obligation.
The source of obligation
of defendant to pay
damages is the breach or
non-fulfillment of the
The source of obligation
is the defendants
negligence itself.
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PAGE 141

Culpa Contractual Culpa Aquiliana

contract.
Proof of the existence of
the contract and of its
breach or non-fulfillment
is sufficient prima facie
to warrant recovery.
The negligence of the
defendant must be
proved.
Proof of diligence in the
selection and supervision
of the employees is NOT
available as defense.
Proof of diligence in the
selection and
supervision of the

employee is a defense.
CONTRAVENTION OF THE TENOR OF OBLIGATION

Contravention of the tenor of obligation: Violation of

the terms and conditions stipulated in the obligation,
which must not be due to a fortuitous event or force
majeure [De Leon, 2003].
In any manner contravenes the tenor means any
illicit act, which impairs the strict and faithful
fulfillment of the obligation, or every kind of
defective performance [Tolentino, 1987].
LEGAL EXCUSE FOR BREACH OF OBLIGATION FORTUITOUS EVENT; REQUISITES
Fortuitous event (force majeure): Any event which
could not be foreseen, or which though foreseen is
inevitable [Art. 1174].
A happening independent of the will of the debtor
and which makes the normal fulfillment of the
obligation impossible [De Leon, 2003].
(1) Act of God: An accident, due directly or exclusively
to natural causes without human intervention,
which by no amount of foresight, pains or care,
reasonably to have been expected, could have
been prevented.
(2) Act of Man: Force majeure is a superior or
irresistible force, which is essentially an act of
man; includes unavoidable accidents, even if
there has been an intervention of human
element, provided that no fault or negligence can
be imputed to the debtor.
Liability in case of Fortuitous Event
No person shall be responsible for fortuitous events,
UNLESS:
(a) expressly specified by law [Arts. 552 (2), 1942,
2147, 2148, 2159]
(b) liability specified by stipulation
(c) the nature of the obligations requires assumption
of risk [Art. 1174]
(d) debtor is guilty of concurrent or contributory
negligence
(e) debtor has promised to deliver the same thing to
two or more persons who do not have the same
interest [Art. 1165 par. 3]
(f) the thing is lost due to the obligors fraud,
negligence, delay or contravention of the tenor of
the obligation [Art. 1170]
(g) the obligation to deliver a specific thing arises
from a crime [Art. 1268]
(h) the object is a generic thing, i.e. the genus never
perishes
Requisites for Exemption
(a) The event must be independent of the debtors
will (fraud or negligence).
(b) The event must be unforeseeable or inevitable.
(c) The event renders it impossible for debtor to
fulfill his obligation in a normal manner.

(d) The debtor must be free from any participation in

the aggravation of the injury to the creditor
[Tolentino, 1987; De Leon, 2003].
(e) It must be the only and sole cause, not merely a
proximate cause.
REMEDIES AVAILABLE TO CREDITOR IN CASE
OF BREACH
SPECIFIC PERFORMANCE

Performance by the debtor of the prestation itself.

SUBSTITUTED PERFORMANCE BY A THIRD PERSON OF
ANOTHERS OBLIGATION TO DELIVER A GENERIC THING OR
OF AN OBLIGATION TO DO, UNLESS IT IS PURELY PERSONAL
ACT.

Substituted performance: Someone else performs or

something else is performed at the debtors expense.
RESCISSION (RESOLUTION IN RECIPROCAL OBLIGATIONS)
Right to rescind or cancel the contract.
Rescission / Resolution
[Art. 1191]
Rescission [Art. 1380]
Based on non-performance
or non-fulfillment of
obligation.
Based on lesion or fraud
upon creditors.
Action is instituted only by
the injured party.
Action is instituted by
either party or by a third
person.
In some cases, court may
grant a term.
Court cannot grant a
period or term within
which one must comply.
Nonperformance by the
other party is important.
Nonperformance by the
other party is
immaterial.
DAMAGES, IN ANY EVENT
ARTICLE 1170
Art. 1170. Those who in the performance of their
obligations are guilty of fraud, negligence, or delay,
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PAGE 142

and those who in any manner contravene the tenor

thereof, are liable for damages.
SUBSIDIARY REMEDIES OF CREDITORS [ART. 1177]
General rule: Contracts are binding only between the
parties thereto, their heirs, assignees, and the estate
[Art. 1311].
Exceptions: Accion subrogatoria and accion pauliana
ACCION SUBROGATORIA
Right of creditor to exercise all of the rights and
bring all of the actions which his debtor may have

against third persons; novation by change of debtor

[Art. 1291, par. 3].
Requisites:
(1) Debtor to whom the right of action properly
pertains must be indebted to the creditor
(2) The debt is due and demandable
(3) The creditor must be prejudiced by the failure of
the debtor to collect his own debt from third
persons, either through malice or negligence
(4) The debtors assets are insufficient (debtor is
insolvent)
(5) The right of action is not purely personal to the
debtor
ACCION PAULIANA
Rescission, which involves the right of the creditor to
attack or impugn by means of a rescissory action any
act of the debtor which is in fraud and to the
prejudice of his rights as creditor.
Rescinds the contract entered into in fraud of
creditors.
Requisites: (CASAL)
(1) There is a credit in favor of plaintiff prior to
alienation.
(2) The debtor has performed a subsequent contract
conveying a patrimonial benefit to third person(s).
(3) The creditor has no other legal remedy to satisfy
his claim.
(4) The debtors acts are fraudulent to the prejudice
of the creditor.
(5) The third person who received the property is an
accomplice in the fraud.
Accion Subrogatoria
Accion Pauliana
Not necessary that
creditors claim is prior to
the acquisition of the right
by the debtor
Credit must exist before
the fraudulent act
No need for fraudulent
intent
Fraudulent intent is
required if the contract
rescinded is onerous
No period for prescription Prescribes in 4 years
from the discovery of the
fraud
ACCION DIRECTA [ARTS. 1652, 1608, 1729, 1893]
ARTICLE 1652
Art. 1652. The sublessee is subsidiarily liable to the
lessor for any rent due from the lessee. However, the
sublessee shall not be responsible beyond the
amount of rent due from him, in accordance with the
terms of the sublease, at the time of the extrajudicial
demand by the lessor.

Payments of rent in advance by the sublessee shall

be deemed not to have been made, so far as the
lessors claim is concerned, unless said payment
were effected in virtue of the custom of the place.
ARTICLE 1608
Art. 1608. The vendor may bring his action against
every possessor whose right is derived from the vendee,
even if in the second contract no mention should have
been made of the right to repurchase, without
prejudice to the provisions of the Mortgage Law and
the Land Registration Law with respect to third
persons.
ARTICLE 1729
Art. 1729. Those who put their labor upon or furnish
materials for a piece of work undertaken by the
contractor have an action against the owner up to the
amount owing from the latter to the contractor at the
time the claim is made. However, the following shall
not prejudice the laborers, employees and furnishers
of materials:
1. Payments made by the owner to the contractor
before they are due
2. Renunciation by the contractor of any amount
due him from the owner
This article is subject to the provisions of special
laws.
ARTICLE 1893
Art. 1893. In the cases mentioned in Nos. 1 and 2 of
the preceding article, the principal may furthermore
bring an action against the substitute with respect to
the obligations which the latter has contracted under
the substitution.
Siguan v. Lim (1999):
Petitioner cannot invoke the credit of a different
creditor to justify the rescission of the subject deed of
donation, because the only creditor who may benefit
from the rescission is the creditor who brought the
action; those who are strangers to the action cannot
benefit from its effects.
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PAGE 143

Kinds of Civil Obligations

PURE, ARTS. 1179-1180

ARTICLE 1179
Art. 1179. Every obligation, whose performance does
not depend upon a future or uncertain event, or upon
a past event unknown to the parties, is demandable
at once.
Every obligation which contains a resolutory
condition shall also be demandable, without
prejudice to the effects of the happening of the
event.
ARTICLE 1180
Art. 1180. When the debtor binds himself to pay when
his means permit him to do so, the obligation shall

be deemed to be one with a period, subject to the

provisions of Article 1197.
Pure Obligation
Its effectivity or extinguishment does not depend
upon the fulfillment or non-fulfillment of a condition
or upon the expiration of a term or period and
characterized by the quality of its being
IMMEDIATELY DEMANDABLE.
CONDITIONAL, ART. 1181
ARTICLE 1180
Art. 1181. In conditional obligations, the acquisition of
rights, as well as the extinguishment or loss of those
already acquired, shall depend upon the happening
of the event which constitutes the condition.
Conditional Obligation
Its effectivity is subject to the fulfillment or nonfulfillment
of a condition, which is characterized to
be a FUTURE and UNCERTAIN event.
SUSPENSIVE CONDITION

Obligation shall only be effective upon the

fulfillment of the condition [Art.1181]. What is
acquired by the obligee upon the constitution of the
obligation is mere hope or expectancy, but is
protected by law.
RESOLUTORY CONDITION

Obligation becomes demandable immediately after

its establishment or constitution. The rights are
immediately vested to the creditor, but always
subject to the threat or danger of extinction by the
happening of the resolutory condition [Tolentino,
1987].
POTESTIVE CASUAL OR MIXED
Casual Condition: The fulfillment of the condition
depends upon chance and/or upon the will of a third
person [Art. 1182].
Mixed Condition: The fulfillment of the condition
depends partly upon the will of a party to the
obligation and partly upon chance and/or will of a
third person.
OBLIGATIONS SUBJECT TO POTESTATIVE SUSPENSIVE
CONDITIONS ARE VOID [ART. 1182].
ARTICLE 1182

Art. 1182. When the fulfillment of the condition

depends upon the sole will of the debtor, the
conditional obligation shall be void. If it depends
upon chance or upon will of a third person, the
obligation shall take effect in conformity with the
provisions of this Code.
Exclusively upon
the Creditors
Will
Exclusively upon
the Debtors Will
in case of a
Suspensive
Condition

[Art. 1182]
Exclusively upon
the Debtors Will
in case of a
Resolutory
Condition
[Art. 1179, par.
2]
Condition and
obligation are
valid.
Condition and
obligation are
void because to
allow such
condition would
be equivalent to
sanctioning
obligations
which are
illusory. It also
constitutes a
direct
contravention of
the principle of
mutuality of
contracts. There
is nothing to
demand until
the debtor
wishes to.
Condition and
obligation are
valid because in
such situation,
the position of
the debtor is
exactly the
same as the
position of the
creditor when
the condition is
suspensive. It
does not render
the obligation
illusory.
Osmea v. Rama (1909):
Defendant executed an endorsement saying that
shell pay her debt if the house in which she lives is
sold. Such condition depended upon her exclusive
will; thus, it is void.
Hermosa v. Longara (1953):
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The condition that payment should be made by

Hermosa as soon as he receives funds from the sale

of his property in Spain is a mixed condition. The

condition implies that the obligor already decided to
sell the house and all that was needed to make the
obligation demandable is that the sale be
consummated and the price thereof remitted to the
islands. There were still other conditions that had to
concur to effect the sale, mainly that of the presence
of a buyer, ready, able and willing to purchase the
property under the conditions set by the intestate.
EFFECT OF THE HAPPENING OF SUSPENSIVE CONDITION
(ART. 1187); RESOLUTORY CONDITION
ARTICLE 1187
Art. 1187. The effects of a conditional obligation to
give, once the condition has been fulfilled, shall
retroact to the day of the constitution of the
obligation. Nevertheless, when the obligation
imposes reciprocal prestations upon the parties, the
fruits and interests during the pendency of the
condition shall be deemed to have been mutually
compensated. If the obligation is unilateral, the
debtor shall appropriate the fruits and interests
received, unless from the nature and circumstances
of the obligation it should be inferred that the
intention of the person constituting the same was
different.
In obligations to do and not to do, the courts shall
determine, in each case, the retroactive effect of the
condition that has been complied with.

Suspensive Condition

Before Fulfillment
After Fulfillment
The demandability and
acquisition or effectivity of
the rights arising from the
obligation is suspended.
Anything paid by mistake
during such time may be
recovered.
The obligation arises or
becomes effective.
The obligor can be
compelled to comply
with what is incumbent
upon him.
Doctrine of Constructive Fulfillment of Suspensive
Conditions
Art. 1186: The condition shall be deemed fulfilled
when the obligor actually prevented the obligee from
complying with the condition, and that such
prevention must have been voluntary or willful in
character.
(1) Applicable to suspensive conditions but not to
resolutory conditions.
(2) The article can have no application to an external
contingency which is lawfully within the control of

the obligor.
(3) The mere intention of the debtor to prevent,
without actually preventing fulfillment is not
sufficient. Constructive fulfillment will not hold
when the debtor acts pursuant to a right. There is
constructive fulfillment when:
(a) Intent of the obligor is to prevent fulfillment;
and
(b) There is actual prevention of compliance.
Principle of Retroactivity in Suspensive Conditions
Art.1187, par.1: Once the condition is fulfilled, its
effects must logically retroact to the moment when
the essential elements, which gave birth to the
obligation have taken place. The condition which is
imposed is only accidental, not an essential element
of the obligation. (This is applied only to consensual
contracts. No application to real contracts which can
only be perfected by delivery.)
To Give
To Do/Not To Do
If reciprocal, the fruits and
interests shall be deemed
to have been mutually
compensated as a matter
of justice and convenience
[Art. 1187, par. 1].
In obligations to do or
not to do, the court shall
determine the retroactive
effect of the condition
that has been complied
with
[Art. 1187, par. 2].
If unilateral, the debtor
shall appropriate the
fruits and interests
received, unless from the
nature and circumstance
it should be inferred that
the intention of the
persons constituting the
same was different.
The power of the court
includes the
determination of whether
or not there will be any
retroactive effect. This
rule shall likewise apply
in obligations with a
resolutory condition [Art.
1190 par. 3].
Resolutory Condition
Before Fulfillment
After Fulfillment
Preservation of creditors

rights (Art. 1188, par. 1)

also applies to obligations
with a resolutory
condition.
Whatever may have been
paid or delivered by one
or both of the parties
upon the constitution of
the obligation shall have
to be returned upon the
fulfillment of the
condition. There is no
return to the status quo.
However, when the
condition is not fulfilled,
rights are consolidated
and they become
absolute in character.

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PAGE 145

EFFECT OF LOSS OF SPECIFIC THING, OR DETERIORATION

OR IMPROVEMENT OF SPECIFIC THING BEFORE
FULFILLMENT OF SUSPENSIVE CONDITION [ART. 1189];
OR IN CASE OF A RESOLUTORY CONDITION IN AN
OBLIGATION TO DO OR NOT TO DO [ART. 1190, PAR. 3]
ARTICLE 1189

Art. 1189. When the conditions have been imposed

with the intention of suspending the efficacy of an
obligation to give, the following rules shall be observed
in case of the improvement, loss or deterioration of the
thing during the pendency of the condition:
(1) If the thing is lost without the fault of the debtor,
the obligation shall be extinguished;
(2) If the thing is lost through the fault of the debtor,
he shall be obliged to pay damages; it is
understood that the thing is lost when it perishes,
or goes out of commerce, or disappears in such a
way that its existence is unknown or it cannot be
recovered;
(3) When the thing deteriorates without the fault of
the debtor, the impairment is to be borne by the
creditor;
(4) If it deteriorates through the fault of the debtor,
the creditor may choose between the rescission of
the obligation and its fulfillment, with indemnity
for damages in either case;
(5) If the thing is improved by its nature, or by time,
the improvement shall inure to the benefit of the
creditor;
(6) If it is improved at the expense of the debtor, he
shall have no other right than that granted to the
usufructuary.
ARTICLE 1190
Art. 1190, par. 3. As for the obligations to do and not to
do, the provisions of the second paragraph of Article
1187 shall be observed as regards the effect of the

extinguishment of the obligation.

Without Debtors
Fault/Act
With Debtors Fault/Act
Loss
Obligation is
extinguished.
Obligation is converted
into one of indemnity for
damages.
Deterioration
Impairment to be borne
by the creditor.
Creditor may choose
between bringing an
action for rescission of
the obligation OR
bringing an action for
specific performance,
with damages in either
case.
Improvement
mprovement at the
debtors expense, the
debtor shall ONLY have
usufructuary rights.
Improvement by the
things nature or by time
shall inure to the benefit
of the creditor.
Loss, defined: when [the thing] perishes, or goes out
of commerce, or disappears in such a way that its
existence is unknown or it cannot be recovered [Art.
1189, no. 2].
OBLIGATIONS WITH A PERIOD OR TERM
ARTICLE 1193
Art. 1193. Obligations for whose fulfillment a day
certain has been fixed, shall be demandable only when
that day comes.
Obligations with a resolutory period take effect at once,
but terminate upon arrival of the day certain.
A day certain is understood to be that which must
necessarily come, although it may not be known when.
If the uncertainty consists in whether the day will come
or not, the obligation is conditional, and it shall be
regulated by the rules of the preceding Section.
Period or Term: Interval of time, which either
suspends demandability or produces
extinguishment.
The period must be: future, certain, and possible
[Tolentino, 1987].
A fortuitous event does not interrupt the running of
the period. It only relieves the contracting parties
from the fulfillment of their respective obligations
during the period.

Kinds of Period [Art. 1193]:

(1) Ex die - period with a suspensive effect.
Obligation becomes demandable after the lapse
of the period.
(2) In diem - period with a resolutory effect.
Obligation is demandable at once but is
extinguished upon the lapse of the period.
ARTICLE 1180
Art. 1180. When the debtor binds himself to pay when
his means permit him to do so, the obligation shall be
deemed to be one with a period, subject to the
provisions of Article 1197.
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Term/Period and Condition Distinguished

Term/Period
Condition
Interval of time which is
future and certain
Fact or event which is
future and uncertain
Must necessarily come,
although it may not be
known when
May or may not happen
Exerts an influence upon
the time of demandability
or extinguishment of an
obligation
Exerts an influence upon
the very existence of the
obligation itself
No retroactive effect
unless there is an
agreement to the contrary
Has retroactive effect
When it is left exclusively
to the will of the debtor,
the existence of the
obligation is not affected
When it is left exclusively
to the will of the debtor,
the very existence of the
obligation is affected
SUSPENSIVE PERIOD

Benefit of the Period

Presumption: The period in an obligation is
presumed to be established for the benefit of both
the creditor and debtor, UNLESS from the tenor of
the obligation or other circumstances, it shall appear
that the period has been established in favor of
either the creditor or debtor [Art. 1196].
Period for the Benefit of either Creditor or Debtor
Creditor Debtor
Creditor may demand the
fulfillment or

performance of the
obligation at any time
but the obligor cannot
compel him to accept
payment before the
expiration of the period.
Debtor may oppose any
premature demand on the
part of the obligee for the
performance of the
obligation, or if he so
desires, he may renounce
the benefit of the period
by performing his
obligation in advance.
If Period Given for the Benefit of Debtor Alone
When Debtor Loses Right to Use Period
Art.1198: I GIV A LA
(1) Debtor becomes Insolvent, unless he gives a
guaranty or security for his debt, after obligation
is contracted
(2) Debtor fails to furnish the Guaranties or securities
promised
(3) Debtor by his own acts Impaired said guaranties
or securities after their establishment, and when
through a fortuitous event they disappear, unless
he immediately gives new ones equally
satisfactory
(4) Debtor Violates any undertaking, in consideration
of which the creditor agreed to the period
(5) Debtor attempts to Abscond
(6) By Law or stipulation
(7) Parties stipulate an Acceleration Clause
In the cases provided, the obligation becomes
immediately due and demandable even if the period
has not yet expired. The obligation is thus converted
into a pure obligation [Tolentino, 1987].
RESOLUTORY PERIOD

Obligation is demandable at once but is

extinguished upon the lapse of the period.
DEFINITE OR INDEFINITE PERIOD
(1) INSTANCES WHEN COURTS MAY FIX THE PERIOD (ART.
1197)
Art. 1197: As a general rule, the court is not
authorized to fix a period for the parties [De Leon,
2003].
Araneta v. Phil. Sugar Estates, provides
First, the Court shall determine:
(a) If the obligation does not fix a period, but from its
nature and circumstances, it can be inferred that
a period was intended.
(b) If the period is void, such as when it depends
upon the will of the debtor.
(c) If the debtor binds himself when his means
permit him to do so.

Second, it must decide what period was probably

contemplated by the parties.
Art. 1197 does not apply to contract of services and to
pure obligations.
The court, however, to prevent unreasonable
interpretations of the immediate demandability of
pure obligations, may fix a reasonable time in which
the debtor may pay [Tolentino, 1987].
(2) CREDITOR MUST ASK COURT TO SET THE PERIOD,
BEFORE HE CAN DEMAND PAYMENT.
THE ONLY ACTION THAT CAN BE MAINTAINED BY THE
CREDITOR UNDER ART. 1197 IS THE ACTION TO ASK THE
COURTS TO FIX THE TERM WITHIN WHICH THE DEBTOR
MUST COMPLY WITH HIS OBLIGATION. THE FULFILLMENT OF
THE OBLIGATION ITSELF CANNOT BE DEMANDED UNTIL
AFTER THE COURT HAS FIXED THE PERIOD FOR
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COMPLIANCE THEREWITH, AND SUCH PERIOD HAS

ARRIVED.

ALTERNATIVE OR FACULTATIVE

DIFFERENCE BETWEEN ALTERNATIVE AND FACULTATIVE

OBLIGATIONS

Alternative Obligations
Facultative Obligations
Several objects are due. Only one object is due.
May be complied with by
delivery of one of the
objects or by performance
of one of the prestations
which are alternatively
due.
May be complied with by
the delivery of another
object or by the
performance of another
prestation in substitution
of that which is due.
Choice may pertain to
debtor, creditor, or third
person.
Choice pertains only to
the debtor.
Loss/impossibility of all
object/prestation due to
fortuitous event shall
extinguish the obligation.
The loss/impossibility of
one of the things does not
extinguish the obligation.
Loss/impossibility of the
object/prestation due to
fortuitous event is
sufficient to extinguish
the obligation.
Culpable loss of any of
the objects alternatively

due before the choice is

made may give rise to
liability on the part of the
debtor.
Culpable loss of the
object which the debtor
may deliver in
substitution before the
substitution is effected
does not give rise to any
liability on the part of the
debtor.
Alternative Obligations
Several prestations are due but the performance of
one is sufficient [De Leon, 2003].
Right of Choice:
Art. 1200: Belongs to the debtor, UNLESS:
(1) when it is expressly granted to the creditor
(2) when it is expressly granted to a third person
Limitations to the right of choice:
(1) impossible prestations
(2) unlawful prestations
(3) those which could not have been the object of the
obligation
(4) only one prestation is practicable [Art. 1202; De
Leon, 2003]
When choice shall produce effect
Art. 1201: Choice shall produce no effect except from
the time it has been communicated.
The effect of the notice is to limit the obligation to
the object or prestation selected. Notice of selection
or choice may be in any form provided it is sufficient
to make the other party know that the selection has
been made. It can be:
(a) oral
(b) in writing
(c) tacit
(d) any other equivocal means
Choice of the debtor when communicated to the
creditor does not require the latters concurrence.
When the choice is rendered impossible through the
creditors fault, the debtor may bring an action to
rescind the contract with damages [Art. 1203].
Obligation is converted into a simple obligation
when:
(a) The person with the right of choice has
communicated his choice [Art. 1201].
(b) Only one prestation is practicable [Art. 1202].
Facultative Obligation
Only one prestation has been agreed upon but the
debtor may render another in substitution [De Leon,
2003]. Debtor always has the right of choice.
Effect of Loss of Substitute
Before Substitution is
Made

After Substitution is
Made
If due to bad faith or fraud
of obligor: obligor is liable.
If due to the negligence of
the obligor: obligor is not
liable.
The loss or deterioration
of the substitute on
account of the obligors
delay, negligence, or
fraud, renders the
obligor liable because
once the substitution is
made, the obligation is
converted into a simple
one with the substituted
thing as the object of
the obligation.
EFFECT OF LOSS OF SPECIFIC THINGS OR IMPOSSIBILITY OF
PERFORMANCE OF ALTERNATIVE, THROUGH FAULT OF
DEBTOR/CREDITOR OR THROUGH FORTUITOUS EVENTS

Art. 1204: Debtors Choice

Fortuitous Event
Debtors Fault
All Lost

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PAGE 148

Debtor is released from

the obligation.
Creditor shall have a
right to indemnity for
damages based on the
value of the last thing
which disappeared or
service which become
impossible.
Some
Debtor to deliver that
which he shall choose
from among the
remainder.
Debtor to deliver that
which the creditor shall
choose from among the
remainder without
damages.
One Remains
Debtor to deliver that
which remains.
Debtor to deliver that
which remains.
Art. 1205: Creditors Choice
Fortuitous Event
Debtors Fault
All Lost

Debtor is released from

the obligation.
Creditor may claim the
price/value of any of
them with indemnity for
damages.
Some
Debtor to deliver that
which he shall choose
from among the
remainder.
Creditor may claim any
of those subsisting
without a right to
damages OR price/value
of the thing lost with
right to damages.
One Remains
Creditor may claim the
remaining thing without
a right to damages OR
the price/value of the
thing lost with right to
damages.
Creditor may claim the
remaining thing without
a right to damages OR
the price/value of the
thing lost with right to
damages.

Joint and Solidary Obligation

JOINT (DIVISIBLE) OBLIGATION
One where a concurrence of several creditors, or of
several debtors, or of several creditors and debtors,
by virtue of which, each of the creditors has a right to
demand, and each of the debtors is bound to render
compliance with his proportionate part of the
prestation which constitute the object of the
obligation (obligacion mancomunada).
PRESUMPTION OF JOINT OBLIGATION

Presumption: Obligation is presumed joint if there is

a concurrence of several creditors, of several debtors,
or of several creditors and debtors in one and the
same obligation (Art. 1207).
Exceptions:
(1) When the obligation expressly states that there is
solidarity
(2) When the law requires solidarity i.e. quasi-delicts
(3) When the nature of the obligation requires
solidarity
(4) When the nature or condition is imposed upon
heirs or legatees, and the testament expressly
makes the charge or condition in solidum
(5) When the solidary responsibility is imputed by a
final judgment upon several defendants

PRESUMPTION OF EQUAL DIVISION

Presumption: Credit or debt shall be presumed to be

divided into as many equal shares as there are
creditors or debtors.
Joint creditor cannot act in representation of the
others, neither can a joint debtor be compelled to
answer for the liability of others.
EACH CREDIT IS DISTINCT FROM ONE ANOTHER,
THEREFORE A JOINT DEBTOR CANNOT BE REQUIRED TO PAY
THE SHARE OF ANOTHER DEBTOR, ALTHOUGH HE MAY PAY
IF HE WANTS TO [ART. 1208].
EFFECT OF INSOLVENCY OF A JOINT DEBTOR [ART. 1209].

Each creditor can demand only for the payment of

his proportionate share of the credit, while each
debtor can be liable only for the payment of his
proportionate share of the debt.
Principal Effects of Joint Liability
(1) Demand by one creditor upon the debtor,
produces the effects of default only with respect
to the creditor who demanded and the debtor on
whom the demand was made, but not with
respect to others.
(2) Interruption of prescription by the judicial
demand of one creditor upon a debtor does not
benefit the other creditors nor interrupt the
prescription as to other debtors.
(3) Vices of each obligation arising from the personal
defect of a particular debtor or creditor do not
affect the obligation or right of the others.
(4) Insolvency of a debtor does not increase the
responsibility of his co-debtors, nor does it
authorize a creditor to demand anything from his
co-debtors.
(5) Defense of res judicata is not extended from one
debtor to another.
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JOINT (INDIVISIBLE) OBLIGATION

OBLIGATION CANNOT BE PERFORMED IN PARTS BUT
DEBTORS ARE BOUND JOINTLY
ARTICLE 1209

Art. 1209. If the division is impossible, the right of the

creditors may be prejudiced only by their collective
acts, and the debt can be enforced only by
proceeding against all the debtors. If one of the
latter should be insolvent, the others shall not be
liable for his share.
Art. 1209: No creditor can act in representation of the
other; no debtor can be compelled to answer for the
liability of the others.
If there are two or more debtors, the fulfillment of or
compliance with the obligation requires the
concurrence of all the debtors, although each for his
own share and for the enforcement of the obligation
Plurality of Creditors: If one or some of the creditors
demands the prestation, the debtor may legally
refuse to deliver to them, he can insist that all the

creditors together receive the thing, and if any of

them refuses to join the others, the debtor may
deposit the thing in court by way of consignation
[Tolentino, 1987].
IN CASE OF FAILURE OF ONE OF THE JOINT DEBTORS TO
PERFORM HIS PART (SHARE), THERE IS DEFAULT BUT
ONLY THE GUILTY DEBTOR SHALL BE LIABLE FOR DAMAGES

In case of breach where one of the joint debtors fails

to comply with his undertaking, the obligation can no
longer be fulfilled or performed.
Consequently, it is converted into one of indemnity
for damages.
In case of insolvency of one of the debtors, the others
shall not be liable for his share. To hold otherwise
would destroy the joint character of the obligation.
Joint Divisible Obligations
Joint Indivisible
Obligations
In case of breach of
obligation by one of the
debtors, damages due
must be borne by him
alone.
In case of breach where
one of the joint debtors
fails to comply with his
undertaking, the
obligation can no longer
be fulfilled or performed.
Thus, the action must be
converted into one for
indemnity for damages.
SOLIDARY OBLIGATION
An obligation where there is concurrence of several
creditors, or of several debtors, or of several creditors
and several debtors, by virtue of which, each of the
creditors has the right to demand, and each of the
debtors is bound to render, entire compliance with the
prestation which constitutes the object of the
obligation (obligacion solidaria).
ANYONE OF THE SOLIDARY CREDITORS MAY COLLECT OR
DEMAND PAYMENT OF WHOLE OBLIGATION; THERE IS
MUTUAL AGENCY AMONG SOLIDARY DEBTORS (ARTS.

1214, 1215)
ARTICLE 1214
Art. 1214. The debtor may pay any one of the solidary
creditors; but if any demand, judicial or extrajudicial,
has been made by one of them, payment should be
made to him.
ARTICLE 1215
Art. 1215. Novation, compensation, confusion or
remission of the debt, made by any of the solidary
creditors or with any of the solidary debtors, shall
extinguish the obligation, without prejudice to the
provisions of Article 1219.
Active solidary obligation (solidarity among creditors):

Each creditor has the authority to claim and enforce

the rights of all, with the resulting obligation of
paying everyone of what belongs to him.
Creation of a relationship of mutual agency among
co-creditors.
A solidary creditor cannot assign his rights without
the consent of the others [Art. 1213].
Each debtor may pay to any solidary creditor, but if
any demand, judicial or extrajudicial, has been made
by one of them, payment must be made to him [Art.
1214]
Mixed solidary obligation (solidarity among creditors
and debtors): Solidarity is not destroyed by the fact
that the obligation of each debtor is subject to
different conditions or periods. The creditor can
commence an action against anyone of the debtors
for the compliance with the entire obligation minus
the portion or share which corresponds to the debtor
affected by the condition or period.
ANY OF THE SOLIDARY DEBTORS MAY BE REQUIRED TO
PAY THE WHOLE OBLIGATION; THERE IS MUTUAL
GUARANTY AMONG SOLIDARY DEBTORS [ARTS.

1216,

1217, 1222]
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1216
Art. 1216. The creditor may proceed against any one of
the solidary debtors or some or all of them
simultaneously. The demand made against one of
them shall not be an obstacle to those which may
subsequently be directed against the others, so long as
the debt has not been fully collected.
ARTICLE 1217
Art. 1217. Payment made by one of the solidary debtors
extinguishes the obligation. If two or more solidary
debtors offer to pay, the creditor may choose which
offer to accept.
He who made the payment may claim from his codebtors
only the share which corresponds to each, with
the interest for the payment already made. If the
payment is made before the debt is due, no interest for
the intervening period may be demanded.
When one of the solidary debtors cannot, because of
his insolvency, reimburse his share to the debtor
paying the obligation, such share shall be borne by all
his co-debtors, in proportion to the debt of each.
ARTICLE 1222
Art. 1222. A solidary debtor may, in actions filed by
the creditor, avail himself of all defenses which are
derived from the nature of the obligation and of
those which are personal to him, or pertain to his
own share. With respect to those which personally
belong to the others, he may avail himself thereof
only as regards that part of the debt for which the
latter are responsible.
Passive solidary obligation (solidarity among debtors):
ARTICLE

Each debtor can be made to answer for the others,

with the right on the part of the debtor-payor to
recover from the others their respective shares.
Creation of a relationship of mutual guaranty among
co-debtors.
The total remission of the debt in favor of a debtor
releases all the debtors.
All the debtors are liable for the loss of the thing
due, even if such loss is caused by the fault of only
one of them, and for delay, even if it is caused by just
one of them.
The interruption of prescription as to one debtor
affects all the others; but the renunciation by one
debtor of prescription already had does not prejudice
the others.
Defenses Available to a Solidary Debtor [Art. 1222]
(1) Those derived from the nature of the obligation
(2) Those personal to him
(3) Those pertaining to his own share
(4) Those personally belonging to other co-debtors
but only as regards that part of the debt for which
the latter are responsible.
Demand Upon a Solidary
Debtor
Payment by a Debtor
The demand made
against one of them shall
not be an obstacle to
those which may
subsequently be directed
against the others so long
as the debt has not been
fully collected [Art. 1216].
Full payment made by
one of the solidary
debtors extinguishes the
obligation [Art. 1217].
The creditor may proceed
against any one of the
solidary debtors or all
simultaneously [Art. 1216].
If two or more solidary
debtors offer to pay, the
creditor may choose
which offer to accept
[Art. 1217].
A creditors right to
proceed against the
surety exists
independently of his right
to proceed against the
principal
The solidary debtor who
made the payment shall
have the right to claim

from his co-debtors the

share which corresponds
to them with interest,
UNLESS barred by
prescription or illegality
[Art. 1218].
When a solidary debtor pays the entire obligation,
the resulting obligation of the co-debtors to
reimburse him becomes joint.
If payment was made before the debt became due,
no interest during the intervening period may be
demanded [Art. 1217 par. 2].
When one of the solidary debtors cannot reimburse
his share to the debtor paying the obligation due to
insolvency, such share shall be borne by all his codebtors,
in proportion to the debt of each [Art. 1217,
par. 2].
Inchausti v. Yulo (1914):
Debtors obligated themselves solidarily, so creditor can
bring its action against any of them. Remission of any
part of the debt, made by the creditor in favor of one of
the solidary debtors, inures to the benefit of the rest of
them.
Each one of the solidary creditors may do whatever
maybe useful to the others, but not anything
prejudicial to them [Art. 1212]; however, any novation,
compensation, confusion or remission of debt
executed by any solidary creditor shall extinguish the
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obligation without prejudice to his liability for the

shares of the other solidary creditors
ARTICLE 1212
Art. 1212. Each one of the solidary creditors may do
whatever may be useful to the others, but not
anything which may be prejudicial to the latter.
ARTICLE 1215
Art. 1215. Novation, compensation, confusion or
remission of the debt, made by any of the solidary
creditors or with any of the solidary debtors, shall
extinguish the obligation, without prejudice to the
provisions of Article 1219.
ARTICLE 1219
Art. 1219. The remission made by the creditor of the
share which affects one of the solidary debtors does
not release the latter from his responsibility towards
the co-debtors, in case the debt had been totally
paid by anyone of them before the remission was
effected.
Effects of Prejudicial and Beneficial Acts [Art.1212]
(1) Each one of the solidary creditors may do
whatever may be useful or beneficial to the
others, but not anything which may be prejudicial
to the latter.
(2) As far as the debtors are concerned, a prejudicial
act performed by a solidary creditor is binding.

(3) As between the solidary creditors, the creditor

who performed such act shall incur the obligation
of indemnifying the others for damages.
Indivisibility
Solidarity
It refers to the prestation
which constitutes the
object of the obligation.
It refers to the legal tie
or vinculum, and
consequently, to the
subjects or parties of
the obligation.
Plurality of subjects is not
required.
Plurality of subjects is
indispensable.
In case of breach,
obligation is converted into
indemnity for damages
because the indivisibility of
the obligation is
terminated.
When there is liability
on the part of the
debtors because of the
breach, the solidarity
among the debtors
remains.
The indivisibility of an obligation does not necessarily
give rise to solidarity. Nor does solidarity itself imply
indivisibility [Art. 1211].
DIVISIBLE AND INDIVISIBLE, ART. 1225
Divisible Obligations
Ones which are susceptible to partial performance,
that is, the debtor can legally perform the obligation
by parts and the creditor cannot demand a single
performance of the entire obligation [Tolentino,
1987].
Indivisible Obligations
Ones which cannot be validly performed in parts
[Tolentino, 1987].
(a) Divisibility/indivisibility refers to the performance
of the prestation and not to the thing which is the
object thereof. The thing may be divisible, yet the
obligation may be indivisible.
(b) When the obligation has for its object the
execution of a certain number of days of work, the
accomplishment of work by metrical units, or
analogous things which by their nature are
susceptible of partial performance, it shall be
divisible [Art.1225, par. 2].
(c) Even though the object or service may be
physically divisible, an obligation is indivisible if
so provided by law or intended by the parties.

(d) In obligations not to do, divisibility or indivisibility

shall be determined by the character of the
prestation in each particular case.
(e) When there is plurality of debtors and creditors,
the effect of divisibility/indivisibility of the
obligation depend upon whether the obligation is
joint or solidary.
(f) A joint indivisible obligation gives rise to
indemnity for damages from the time any one of
the debtors does not comply with his undertaking
[Art. 1224].
Effect
Creditor cannot be compelled to receive partially the
prestation in which the obligation consists; neither
may the debtor be required to make the partial
payment [Art. 1248], UNLESS:
(1) The obligation expressly stipulates the contrary.
(2) The different prestations constituting the objects
of the obligation are subject to different terms
and conditions.
(3) The obligation is in part liquidated and in part
unliquidated.
OBLIGATIONS WITH A PENAL CLAUSE, ARTS.
1226, 1228-1230
ARTICLE 1226
Art. 1226. In obligations with a penal clause, the
penalty shall substitute the indemnity for damages
and the payment of interests in case of
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noncompliance, if there is no stipulation to the

contrary. Nevertheless, damages shall be paid if the
obligor refuses to pay the penalty or is guilty of fraud in
the fulfillment of the obligation.
The penalty may be enforced only when it is
demandable in accordance with the provisions of this
Code.
ARTICLE 1228
Art. 1228. Proof of actual damages suffered by the
creditor is not necessary in order that the penalty may
be demanded.
ARTICLE 1229
Art. 1229. The judge shall equitably reduce the penalty
when the principal obligation has been partly or
irregularly complied with by the debtor.
Even if there has been no performance, the penalty
may also be reduced by the courts if it is iniquitous or
unconscionable.
ARTICLE 1230
Art. 1230. The nullity of the penal clause does not carry
with it that of the principal obligation.
The nullity of the principal obligation carries with it
that of the penal clause.
Penal Clause: An accessory undertaking to assume
greater liability in case of breach [De Leon, 2003]. It
is attached to an obligation in order to ensure

performance. The enforcement of the penalty can be

demanded by the creditor only when the nonperformance
is due to the fault or fraud of the
debtor.
If the principal obligation is void, the penal clause
shall also be void. However, the nullity of the penal
clause does not carry with it the nullity of the
principal obligation [Art.1230].
Purposes of Penalty
(1) Funcion coercitiva de garantia - to insure the
performance of the obligation.
(2) Funcion liquidatoria - to liquidate the amount of
damages to be awarded to the injured party in
case of breach of the principal obligation
(compensatory).
(3) Function estrictamente penal - to punish the
obligor in case of breach of the principal
obligation (punitive).
Chartacteristics of Penalty
(1) The penalty shall substitute the indemnity for
damages and payment of interest in case of noncompliance
[Art. 1226], UNLESS:
(a) There is a stipulation to the contrary
(b) The obligor refuses to pay the penalty
(c) The obligor is guilty of fraud
(2) Debtor cannot exempt himself from the
performance of the principal obligation by paying
the stipulated penalty unless this right has been
expressly reserved for him [Art. 1227].
(3) Creditor cannot demand the fulfillment of the
principal obligation and demanding the
satisfaction of the penalty at the same time
unless the right has been clearly granted to him
[Art. 1227]. Tacit or implied grant is admissible.
(a) If the creditor has chosen fulfillment of the
principal obligation and the performance
thereof becomes impossible without his fault,
he may still demand the satisfaction of the
penalty.
(b) If there was fault on the part of the debtor,
creditor may demand not only the satisfaction
of the penalty but also the payment of
damages.
(c) If the creditor chooses to demand the
satisfaction of the penalty, he cannot
afterwards demand the fulfillment of the
obligation.
Proof of Actual Damage
Art. 1228: That proof of actual damages is not
necessary is applicable only to the general rule
stated in Art. 1226, but not to the exceptions. The
penalty is exactly identical with what is known as
liquidated damages in Art. 2226.
When Penalty may be Reduced [Art. 1229]:
(1) If the principal obligation has been partly

complied with.
(2) If the principal obligation has been irregularly
complied with.
(3) If the penalty is iniquitous or unsconscionable
even if there has been no performance.
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Extinguishment of
Obligations

PAYMENT, ARTS. 1236-1238

ARTICLE 1236
Art. 1236. The creditor is not bound to accept payment
or performance by a third person who has no interest
in the fulfillment of the obligation, unless there is a
stipulation to the contrary.
Whoever pays for another may demand from the
debtor what he has paid, except that if he paid without
the knowledge or against the will of the debtor, he can
recover only insofar as the payment has been
beneficial to the debtor.
ARTICLE 1237
Art. 1237. Whoever pays on behalf of the debtor
without the knowledge or against the will of the latter,
cannot compel the creditor to subrogate him in his
rights, such as those arising from a mortgage,
guaranty, or penalty.
ARTICLE 1238
Art. 1238. Payment made by a third person who does
not intend to be reimbursed by the debtor is deemed
to be a donation, which requires the debtor's consent.
But the payment is in any case valid as to the creditor
who has accepted it.
DATION IN PAYMENT
ARTICLE 1245

[ART. 1245]

Art. 1245. Dation in payment, whereby property is

alienated to the creditor in satisfaction of a debt in
money, shall be governed by the law of sales.
Delivery and transmission of ownership of a thing by
the debtor to the creditor as an accepted equivalent
of the performance of the obligation (dacion en
pago).
FORM OF PAYMENT
ARTICLE 1249

[ART. 1249]

Art. 1249. The payment of debts in money shall be

made in the currency stipulated, and if it is not
possible to deliver such currency, then in the currency
which is legal tender in the Philippines.
The delivery of promissory notes payable to order, or
bills of exchange or other mercantile documents shall
produce the effect of payment only when they have
been cashed, or when through the fault of the creditor
they have been impaired.
In the meantime, the action derived from the original
obligation shall be held in the abeyance.

EXTRAORDINARY INFLATION OF DEFLATION

ARTICLE 1236

[ART. 1250]

Art. 1250. In case an extraordinary inflation or

deflation of the currency stipulated should
supervene, the value of the currency at the time of
the establishment of the obligation shall be the basis
of payment, unless there is an agreement to the
contrary.
APPLICATION OF PAYMENT [ART. 1252-1254]
Application of Payment [Art. 1252]
Designation of the debt to which should be applied a
payment made by a debtor who owes several debts
to the same creditor.
Rules on Application
(1) Preferential right of debtor - debtor has the right
to select which of his debts he is paying.
(2) The debtor makes the designation at the time he
makes the payment.
(3) If not, the creditor makes the application, by so
stating in the receipt that he issues, unless there
is cause for invalidating the contract.
(4) If neither the creditor nor debtor exercises the
right to apply, or if the application is not valid, the
application is made by operation of law.
(5) If debt produces interest, the payment is not to be
applied to the principal unless the interests are
covered.
(6) When no application can be inferred from the
circumstances of payment, it is applied: (a) to the
most onerous debt of the debtor; or (b) if debts
due are of the same nature and burden, to all the
debts in proportion
(7) Rules of application of payment may not be
invoked by a surety or solidary guarantor.
Reparations Commission vs. Universal Deep Sea
Fishing Corp. (1978):
Rules on application of payment cannot be made
applicable to a person whose obligation as a mere
surety is both contingent and singular. There must
be full and faithful compliance with the terms of the
contract.
TENDER OF PAYMENT AND CONSIGNATION [ARTS.

12561261]
Tender of payment: Manifestation made by the
debtor to the creditor of his desire to comply with his
obligation, with offer of immediate performance.
(1) Preparatory act to consignation
(2) Extrajudicial in character
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Consignation: Deposit of the object of obligation in a

competent court in accordance with the rules
prescribed by law whenever the creditor unjustly
refuses payment or because of some circumstances
which render direct payment to the creditor
impossible or inadvisable.

(1) Principal act which constitutes a form of payment

(2) Judicial in character
When Tender and Refusal Not Required [Art. 1259]
(1) Creditor is absent or unknown, or does not
appear at the place of payment.
(2) Creditor is incapacitated to receive the thing due
at the time of payment.
(3) Without just cause, creditor refuses to give
receipt.
(4) Two or more persons claim the same right to
collect.
(5) Title of the obligation has been lost.
Effects of Withdrawal by Debtor [Arts. 1260- 1261]
(1) Before approval of the court - Obligation remains
in force.
(2) After approval of the court or acceptance by the
creditor, with the consent of the latter Obligation remains in force, but guarantors and
co-debtors are liberated. Preference of the
creditor over the thing is lost.
(3) After approval of the court or acceptance by the
creditor, and without creditors consent Obligation subsists, without change in the liability
of guarantors and co-debtors, or the creditors
right of preference.
What constitutes valid consignation
In order that the consignation of the thing due may
release the obligor, it must first be announced to the
persons interested in the fulfilment of the obligation.
The consignation shall be ineffectual if it is not made
strictly in consonance with the provisions which
regulate payment. [Art. 1257].
How consignation is made
Consignation shall be made by depositing the things
due at the disposal of judicial authority, before whom
the tender of payment shall be proved, in a proper
case, and the announcement of the consignation in
other cases.
The consignation having been made, the interested
parties shall also be notified thereof.
Who bears the expenses
The expenses of consignation, when properly made,
shall be charged against the creditor. [Art. 1259]
Requisites and Effects
Application of
Payment
Dation
Tender and
Consignation
Requisites
(1) Plurality of
debts
(2) Debts are of
the same
kind

(3) Debts are

owed to the
same creditor
and by the
same debtor
(4) All debts
must be due
(5) Payment
made is not
sufficient to
cover all
debts
(1) Should not
be prejudicial
to other
creditors
(2) Should not
constitute a
pactum
commissoriu
m
(1) There is a
debt due
(2) Consignation
is made
because of
some legal
cause
(3) Previous
notice of
consignation
was given to
those
persons
interested in
the
performance
of the
obligation
(4) Amount or
thing due
was placed
at the
disposal of
the court
(5) After the
consignation
has been
made, the
persons
interested
were notified
thereof
Effects
Payment of debt

designated as to
corresponding
amount
Extinguishment
of debt as an
equivalent of the
performance of
the obligation
If accepted by
the creditor or
declared
properly made
by the Court:
(1) Debtor is
released in
same manner
as if he had
performed the
obligation at
the time of
consignation
(2) Accrual of
interest is
suspended

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Application of
Payment
Dation
Tender and
Consignation
from the
moment of
consignation.
(3) Deterioration
or loss of the
thing or
amount
consigned,
occurring
without the
fault of
debtor, must
be borne by
creditor from
the moment
of deposit
Any increment
or increase in
the value of the
thing after
consignation
inures to the
benefit of the
creditor.
Payment by Cession [Art. 1255]

The debtor may cede or assign his property to his

creditors in payment of his debts. This cession,
unless there is stipulation to the contrary, shall only
release the debtor from responsibility for the net
proceeds of the things assigned. The agreements
which, on the effect of the cession, are made
between the debtor and his creditors shall be
governed by special laws.
Cession or assignment of rights in favor of creditors
(1) Process by which debtor transfers property to his
creditors so that the latter may sell them and
thus apply the proceeds to their credits.
(2) What is given to creditors is not ownership (as
distinguished from dacion en pago) but only
authority to sell.
(3) Debtor is released only for the net proceeds
unless there is a stipulation to the contrary.
LOSS OF DETERMINATE THING DUE OR
IMPOSSIBILITY OR DIFFICULTY OF
PERFORMANCE, ARTS. 1262, 1266-1267
Loss
A thing is lost when it perishes, goes out of
commerce or disappears in such a way that its
existence is unknown or it cannot be recovered [Art.
1189, no. 2]
Effects of Loss
Obligation to Deliver a
Specific Thing
Obligation to Deliver a
Generic Thing
Extinguishment of the
obligation if the thing was
destroyed without fault of
the debtor and before he
has incurred delay.
Loss of a generic thing
does not extinguish an
obligation, EXCEPT in
case of delimited generic
things, where the kind or
class is limited itself, and
the whole class perishes.
Action against third persons - creditor shall have all
the rights of action the debtor may have against
third persons by reason of the loss.
Presumption: The loss was due to the debtors fault,
UNLESS there is proof to the contrary.
Other cases where loss is attributed to debtor:
(1) Law provides that the debtor shall be liable even
if the loss is due to fortuitous events [Arts. 1942,
1979, 2147, 2159].
(2) Obligor is made liable by express stipulation.
(3) Nature of the obligation requires an assumption
of risk.
(4) Fault or negligence concurs with the fortuitous

event.
(5) Loss occurs after delay.
(6) Debtor has promised to deliver the same thing to
two or more different parties.
(7) Obligation arises from a criminal act.
(8) Borrower in commodatum: saves his own things
and not the thing of the creditor during a
fortuitous event.
In Reciprocal Obligations
Extinguishment of the obligation due to loss of the
thing or impossibility of performance affects both the
creditor and debtor; the entire juridical relation is
extinguished.
Partial loss
Art. 1264: Partial loss due to a fortuitous event does
not extinguish the obligation; thing due shall be
delivered in its present condition, without any liability
on the part of the debtor, UNLESS the obligation is
extinguished when the part lost was of such extent
as to make the thing useless.
Loss of the thing when in possession of the debtor:
Loss was due to the debtors fault. Burden of
explaining the loss of the thing falls upon him,
UNLESS due to a natural calamity: earthquake, flood,
storm, etc.
Subjective impossibility: Where there is no physical or
legal loss, but the thing belongs to another, the
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performance by the debtor becomes impossible. The

debtor must indemnify the creditor for damages.
Impossibility of Performance [Arts. 1266-1267]
When prestation becomes legally or physically
impossible (by fortuitous event or force majeure), the
debtor is released. Impossibility must have occurred
without fault of debtor, and after the obligation has
been constituted.
Partial Impossibility
(1) Courts shall determine whether it is so important
as to extinguish the obligation.
(2) If debtor has performed part of the obligation
when impossibility occurred, creditor must pay
the part done as long as he benefits from it.
(3) If debtor received full payment from creditor, he
must return excess amount corresponding to part
which was impossible to perform.
Doctrine of Unforeseen Events
When the service has become so difficult as to be
manifestly beyond the contemplation of all the
parties, the obligor may be released in whole or in
part [De Leon, 2003].
Requisites
(1) Event could not have been foreseen at the time of
the constitution of the contract.
(2) Event makes performance extremely difficult but
not impossible.

(3) Event not due to any act of the parties.

(4) Contract is for future prestation.
CONDONATION OR REMISSION OF DEBT, ART.
1270
ARTICLE 1270
Art. 1270. Condonation or remission is essentially
gratuitous, and requires the acceptance by the obligor.
It may be made expressly or impliedly.
One and the other kind shall be subject to the rules
which govern inofficious donations. Express
condonation shall, furthermore, comply with the forms
of donation.
Condonation
An act of liberality, by virtue of which, without
receiving any equivalent, creditor renounces the
enforcement of the obligation. The obligation is
extinguished either in whole or in such part of the
same to which remission refers.
Requisites:
(1) Debt must be existing and demandable.
(2) Renunciation must be gratuitous; without any
consideration.
(3) Debtor must accept the remission.
Effect
Art. 1273: Renunciation of the principal debt shall
extinguish the accessory obligations, but remission
of the latter leaves the principal obligation in force.
EXPRESS FORMALITY OF DONATION [ART. 1270]
Made formally; in accordance with forms of ordinary
donations.
IMPLIED [ARTS. 1271, 1272, 1274]
Presumptions [Arts. 1271, 1272, 1274]
(1) Whenever the private document in which the debt
is found is in the possession of the debtor, it shall
be presumed that the creditor delivered it
voluntarily, unless the contrary is proved.
(2) Delivery of a private document evidencing credit
made voluntarily by the creditor to the debtor
implies the renunciation of the action of creditor
against the latter.
(3) Accessory obligation of pledge has been remitted
when thing after its delivery is found in the
possession of the debtor or third person.
CONFUSION, ARTS. 1275-1272
Confusion - The meeting in one person of the
qualities of creditor and debtor of the same
obligation.
Requisites
(1) It should take place between principal debtor and
creditor.
(2) It must be complete and definite Parties must
meet all the qualities of creditor and debtor in the
obligation/ in the part affected.
Effects [Arts. 1275- 1277]:
(1) The obligation is extinguished from the time the

characters of the debtor and creditor are merged

in the same person.
(2) In joint obligations, confusion does not extinguish
the obligation except as regards the
corresponding share of the creditor or debtor in
whom the two characters concur.
(3) In solidary obligations, confusion in one of the
solidary debtors extinguishes the entire
obligation.
Obligation is not extinguished when confusion takes
place in the person of subsidiary debtor (e.g.
guarantor), but merger in the person of the principal
debtor shall benefit the former.
COMPENSATION
Compensation - Offsetting of two obligations which
are reciprocally extinguished if they are of the same
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value, or extinguished to the concurrent amount if of

different values.
Compensation
Confusion
There must always be
two obligations.
Involves only one
obligation.
There are two persons
who are mutually
debtors and creditors of
each other in two
separate obligations,
each arising from the
same cause.
There is only one person
whom the characters of
the creditor and debtor
meet.
Compensation:
Requisites
Effects
(1) Each obligor is bound
principally, and at the
same time a principal
creditor of the other
(2) Both debts must
consist in a sum of
money, or if the things
due are FUNGIBLE, of
the same kind &
quality
(3) Both debts are due
(4) Debts are liquidated
and demandable
(5) There must be no
retention or
controversy over either

of the debts,
commenced by third
persons and
communicated in due
time to the debtor
(6) Compensation is not
prohibited by law
(1) Effects rise from the
moment all the
requisites concur.
(2) Debtor claiming its
benefits must prove
compensation; once
proven, effects
retroact from the
moment when the
requisites concurred.
(3) Both debts are
extinguished to the
concurrent amount,
even though the
creditors and debtors
are not aware of the
compensation.
(4) Accessory obligations
are also extinguished.
KINDS
(1) LEGAL COMPENSATION

[ARTS. 1286-1290]
Takes place by operation of law
ARTICLE 1286
Art. 1286. Compensation takes place by operation of
law, even though the debts may be payable at different
places, but there shall be an indemnity for expenses of
exchange or transportation to the place of payment.
ARTICLE 1287
Art. 1287. Compensation shall not be proper when one
of the debts arises from a depositum or from the
obligations of a depositary or of a bailee in
commodatum.
Neither can compensation be set up against a creditor
who has a claim for support due by gratuitous title,
without prejudice to the provisions of paragraph 2 of
Article 301.
ARTICLE 1288
Art. 1288. Neither shall there be compensation if one of
the debts consists in civil liability arising from a penal
offense.
ARTICLE 1289
Art. 1289. If a person should have against him several
debts which are susceptible of compensation, the rules
on the application of payments shall apply to the order
of the compensation.
ARTICLE 1290
Art. 1290. When all the requisites mentioned in Article
1279 are present, compensation takes effect by

operation of law, and extinguishes both debts to the

concurrent amount, even though the creditors and
debtors are not aware of the compensation.
(2) AGREEMENT [ART. 1282]
Parties agree to compensate their mutual
obligations even when some requisite in Art. 1279 is
lacking.
(3) VOLUNTARY [ART. 1282]
ARTICLE 1282
Art. 1282. The parties may agree upon the
compensation of debts which are not yet due.
(4) JUDICIAL [ART. 1283]
Decreed by court when there is counterclaim;
effective upon final judgment
ARTICLE 1283
Art. 1283. If one of the parties to a suit over an
obligation has a claim for damages against the
other, the former may set it off by proving his right to
said damages and the amount thereof.
(5) FACULTATIVE
When it can be claimed by one of the parties who,
however, has the right to object to it.
Compensation which can only be set up at the option
of a creditor, when legal compensation cannot take
place because some legal requisites in favor of the
creditor are lacking. Creditor may renounce his right
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to compensation, and he himself may set it up. As

opposed to conventional compensation, facultative
compensation is unilateral and does not depend
upon the agreement of the parties.
OBLIGATIONS NOT COMPENSABLE [ARTS. 1287-1288]
Compensation is prohibited in:
(1) Contracts of depositum
(2) Contracts of commodatum
(3) Future support due by gratuitous title
(4) Civil liability arising from a penal offense
(5) Obligations due to the government
(6) Damage caused to the partnership by a partner
NOVATION, [ARTS. 1291-1304]
Extinguishment of an obligation by the substitution
or change of the obligation by a subsequent one
which extinguishes or modifies the first either by
changing the object or principal conditions, or by
substituting the person of the debtor, or by
subrogating a third person in the rights of the
creditor. A juridical act of dual functionit
extinguishes an obligation, and at the same time, it
creates a new one in lieu of the old.
Requisites
(1) A previous valid obligation
(2) Agreement of all the parties to the new obligation
(3) Extinguishment of the old obligation
(4) Validity of the new obligation
Novation is not presumed.

Express novation: Parties must expressly disclose

their intent to extinguish the old obligation by
creating a new one.
Implied novation: No specific form is required. There
must be incompatibility between the old and new
obligation or contract.
California Bus Line v. State Investment [2003]:
In the absence of an unequivocal declaration of
extinguishment of the pre-existing obligation, only
proof of incompatibility between the old and new
obligation would warrant a novation by implication.
Test of Incompatibility
Whether or not the old and new obligation can stand
together, each one having an independent existence.
No incompatibility exists when they can stand
together. Hence, there is no novation. Incompatibility
exists when they cannot stand together. Hence, there
is novation.
Effects
In General If Original
Obligation is Void
If New Obligation
is Void
Old
obligation is
extinguished
and replaced
by the new
one
stipulated.
Novation is void if
the original
obligation was
void, except when
annulment may
be claimed only
by the debtor, or
when ratification
validates acts that
are voidable [Art.
1298]
1. Original
obligation is void:
No novation
2. Original
obligation
voidable: Effective
if contract is
ratified before
novation.
New obligation is
void, the old
obligation
subsists, unless
the parties

intended that the

former relations
shall be
extinguished in
any event [Art.
1297]
1. New obligation
void: No novation
2. New obligation
voidable:
Novation is
effective
Accessory obligations are also extinguished, but may
subsist only insofar as they may benefit third persons
who did not give their consent to the novation OR
those who may be affected, upon agreement
between the parties.
Original or new obligation with suspensive or resolutory
condition
Art. 1299: If original obligation was subject to a
suspensive or resolutory condition, the new
obligation shall be under the same condition, unless
it is otherwise stipulated.
Compatible Conditions Incompatible
Conditions
(a) Fulfillment of both
conditions: new obligation
becomes demandable
(b) Fulfillment of condition
concerning the original
obligation: old obligation
is revived; new obligation
loses force
(c) Fulfillment of condition
concerning the new
obligation: no novation;
requisite of a previous
valid and effective
obligation lacking
(a) Original
obligation is
extinguished,
while new
obligation exists
(b) Demandability
shall be subject
to fulfillment/
nonfulfillment of
the condition
affecting it
Objective Novation
(1) Change of the subject matter
(2) Change of cause or consideration
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(3) Change of the principal conditions or terms

Subjective Novation
(1) Substitution of the Debtor: Consent of creditor is
an indispensable requirement both in
expromision and delegacion.
Expromision Delegacion
Initiative for change does
not emanate from the
debtor, and may
even be made without
his knowledge.
Debtor (delegante)
offers or initiates the
change, and the creditor
(delegatorio) accepts a
third person (delegado)
as consenting to the
substitution.
Requisites
(1) Consent of the
creditor and the new
debtor
(2) Knowledge or
consent of the old
debtor is not required
Consent of old debtor,
new debtor, and creditor
Effects
(1) Old debtor is
released
(2) Insolvency of the new
debtor does not
revive the old
obligation in case the
old debtor did not
agree to expromision
(3) If with knowledge
and consent of old
debtor, new debtor
can demand
reimbursement of the
entire amount paid
and with subrogation
of creditors rights.
(4) If without knowledge
of the old debtor, new
debtor can demand
reimbursement only
up to the extent that
the latter has been
benefited without
subrogation of
creditors rights.
(1) Insolvency of the new
debtor revives the
obligation of the old

debtor if it was
anterior and public,
and known to the old
debtor.
(2) New debtor can
demand
reimbursement of the
entire amount he has
paid from the original
debtor. He may
compel creditor to
subrogate him to all
of his rights.
(2) Subrogation of a third person in the rights of the
creditor
(a) Conventional subrogation: by agreement of
the parties;
Requisites: the consent of the third person, and of the
original parties (Art. 1301).
Conventional
subrogation
Assignment of credit
Debtors consent is
necessary.
Debtors consent is not
required.
Extinguishes an
obligation and gives
rise to a new one.
Refers to the same right
which passes from one
person to another, without
modifying or extinguishing
the obligation.
Defects/vices in the
old obligation are
cured.
Defects/vices in the old
obligation are not cured.
(b) Legal subrogation: by operation of law
Legal subrogation is not presumed, except in the
following circumstances:
(1) When creditor pays another creditor who is
preferred, even without the debtors knowledge
(2) When a third person not interested in the
obligation pays with the express or tacit approval
of the debtor
(3) When, even without the knowledge of the debtor,
a person interested in the fulfillment of the
obligation pays, without prejudice to the effects of
confusion as to the latters share
Effects
Total Partial
(1) Transfers to the person
subrogated the credit

with all the rights

thereto appertaining,
either against the debtor
or third persons.
(2) Obligation is not
extinguished, even if the
intention is to pay it.
(3) Defenses against the old
creditor are retained,
unless waived by the
debtor.
(1) A creditor, to whom
partial payment
has been made,
may exercise his
right for the
remainder, and
shall be preferred
to the person
subrogated in his
place in virtue of
the partial
payment.
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Essential Requisites

1318
Art. 1318. There is no contract unless the following
requisites concur:
(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the
contract;
(3) Cause of the obligation which is established.
CONSENT
(a) The meeting of the minds between the parties on
the subject matter and the cause of the contract.
(b) The manifestation of the meeting of the offer and
the acceptance upon the thing and the cause
which are to constitute the contract.
Requisites of Consent:
(1) It must be manifested by the concurrence of the
offer and acceptance [Arts. 1319-1326].
(2) The contracting parties must possess the
necessary legal capacity [Arts. 1327-1329].
(3) It must be intelligent, free, spontaneous, and real
(not vitiated) [Arts. 1330-1346].
ARTICLE

CONCURRENCE OF OFFER AND ACCEPTANCE

Offer: a unilateral proposition which one party makes

to the other for the celebration of the contract
[Tolentino].
Requisites:
(a) Definite
(b) Intentional
(c) Complete
Invitation to make offers (advertisements)

(a) Business advertisements of things for sale are

NOT definite offers, just invitations to make an
offer, UNLESS the contrary appears (Art. 1325).
(b) Advertisements for bidders are invitations to
make proposals, the advertiser is NOT bound to
accept the lowest or highest bid; UNLESS the
contrary appears. The bidder is the offeror (Art.
1326).
(c) Statements of intention: no contract results even
if accepted.
Rosenstock v. Burke (1924):
FACTS: Elser, in a letter, informed Burke that he was
in a position and is willing to entertain the
purchase of the yacht under some terms.
HELD: The word entertain applied to an act does
not mean the resolution to perform said act, but
simply a position to deliberate for deciding to
perform or not to perform said act. It was merely a
position to deliberate whether or not he would
purchase the yacht and invitation to a proposal being
made to him, which might be accepted by him or
not
OFFER TERMINATES upon:
(a) Rejection by the offeree
(b) Incapacity (death, civil interdiction, insanity, or
insolvency) of the offeror or offeree before
acceptance is conveyed
(c) Counter-offer
(d) Lapse of the time stated in the offer without
acceptance being conveyed
(e) Revocation of the offer before learning of
acceptance
(f) Supervening illegality before acceptance [J.B.L.
Reyes]
ACCEPTANCE

Requisites:
(a) Unqualified and unconditional, i.e. it must
conform with all the terms of the offer, otherwise
it is a counter-offer (Art. 1319)
(b) Communicated to the offeror and learned by him
(Arts. 1319, 1322). If made through an agent, the
offer is accepted from the time the acceptance is
communicated to such agent.
(c) Express/implied, but is not presumed.
OPTION CONTRACT: A preparatory contract in which
one party grants to the other, for a fixed period, the
option to decide whether or not to enter into a
principal contract [Art. 1324].
With consideration
Without consideration
Offeror cannot
unilaterally withdraw his
offer.
Offeror may withdraw by
communicating

withdrawal to the offeree

before acceptance.
LEGAL CAPACITY

Persons Incapacitated to Give Consent

(a) Minors, UNLESS, the minors consent is operative
in contracts:
(1) For necessaries [Art.1427]
(2) Where the minor actively misrepresents his
age (estoppel)
Mercado v. Espiritu, 1917: Minors held in estoppel
through active misrepresentation.
Bambalan v. Maramba, 1928: There is no estoppel if
the minority was known by the other party.
(b) Insane or demented persons, UNLESS they
contract during a lucid interval.
(c) Deaf-mutes who do not know how to read AND
write.
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Disqualified to contract [art. 1329]:

(a) Those under civil interdiction for transactions inter
vivos [RPC Art. 34].
(b) Undischarged insolvents [Insolvency Law, Sec.
24].
(c) Husband and wife cannot donate to each other
[Art. 123, FC], nor sell if the marriage is under ACP
[Art.1490].
(d) The ff. cannot purchase [Art. 1491]:
(1) The guardian: his wards property
(2) The agent: the principals property
(3) Executors and administrators: property under
administration
(4) Public officers-state: property under their
administration
(5) Justices, judges, prosecutors, clerks of court,
lawyers: property attached in litigation.
VICES OF CONSENT

(1) Mistake
Inadvertent and excusable disregard of a
circumstance material to the contract [J.B.L. Reyes].
In order that mistake may invalidate consent, it
should refer to the substance of the thing which is
the object of the contract, or to those conditions
which have principally moved one or both parties to
enter into the contract [Art.1331].
Mistake which vitiates consent is an error of fact, and
not an error of law. Ignorance of the law excuses no
one from compliance therewith (Art. 3); but the
modern tendency is to allow an excusable mistake of
law to be invoked as vitiating consent (Tolentino).
Mistake of Fact Mistake of Law Mutual Mistake
When one or
both contracting
parties believe
that a fact exists
when in reality it

does not, or vice

versa.
When one or
both parties
arrive at an
erroneous
conclusion on
the
interpretation of
a question of
law or its legal
effects.
(1) Must be as
to the legal
effect of an
agreement
(2) Must be
mutual
(3) Real
purpose of
the parties
must have
been
frustrated
(2) Intimidation
When one of the contracting parties is compelled by
a reasonable and well-grounded fear of an imminent
and grave evil upon his person or property, or upon
the person or property of his spouse, descendants or
ascendants, to give his consent [Art. 1335].
Martinez v. HSBC (1910):
The conveyance of several properties by the wife to her
husbands creditors, though reluctant, is still consent.
She assented to the requirements of the defendants in
order that the civil and criminal actions against them
would be dropped. A contract is valid even though one
of the parties entered into it against his wishes and
desires, or even against his better judgment.
(3) Violence
Irresistible force used to extort consent (J.B.L. Reyes).
(4) Undue Influence
When a person takes improper advantage of his
power over the will of another, depriving the latter of
a reasonable freedom of choice [Art. 1337].
Circumstances:
(a) Relationship of the parties (family, spiritual,
confidential etc.)
(b) That the person unduly influenced was suffering
from infirmity (mental weakness, ignorance etc.)
(Art.1337).
(5) Fraud
When through insidious words or machinations of
one of the contracting parties, the other is induced to
enter into a contract which, without them, he would
not have agreed to [Art. 1338].

1339
Art. 1339. Failure to disclose facts, when there is a
duty to reveal them, as when the parties are bound
by confidential relations, constitutes fraud.
ARTICLE 1340
Art. 1340. The usual exaggerations in trade, when the
other party had an opportunity to know the facts, are
not in themselves fraudulent.
ARTICLE 1341
Art. 1341. A mere expression of an opinion does not
signify fraud, unless made by an expert and the other
party has relied on the former's special knowledge,
ARTICLE 1342
Art. 1342. Misrepresentation by a third person does
not vitiate consent, unless, such misrepresentation
has created substantial mistake and the same is
mutual.
ARTICLE 1343
Art. 1343. Misrepresentation made in good faith is
not fraudulent but may constitute error.
ARTICLE

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SIMULATION OF CONTRACTS takes place when the

parties do not really want the contract they have
executed to produce the legal effects expressed by
its wordings. It may be absolute or relative [Arts.
1345-1346].
Absolute Simulation
Relative Simulation
No real transaction is
intended.
Real transaction is hidden.
Fictitious contract. Disguised contract.
Void. Bound as to hidden
agreement, so long as it
does not prejudice a third
person and is not contrary
to law, morals, good
customs, public order or
public policy.
OBJECT
DEFINITION:
The subject matter; the thing, right or service which
is the subject matter of the obligation arising from
the contract [Tolentino].
REQUISITES:
(a) Must be within the commerce of men [Art. 1347]
(b) Must not be impossible, legally or physically
[Art.1348]
(c) For things as object of contract, must be in
existence or capable of coming into existence
[See Arts. 1461, 1493, 1495]
(d) Must be determinate or determinable, without
the need of a new contract between the parties
[Arts. 1349, 1460, par.2]
All things or services may be the object of contracts,

EXCEPT:
(a) Things which are outside the commerce of men
(b) Intransmissible rights
(c) Future inheritance except in cases authorized by
law
(d) Impossible things or services
(e) Objects which are indeterminable as to their kind,
the genus should be expressed
In order that a thing, right, or service, may be the
object of a contract, it should be in existence at the
moment of the celebration of the contract, or at
least, it can exist subsequently or in the future.
A FUTURE THING may be the object of a contract,
such contract may be interpreted as a:
(a) Conditional contract, where 3its efficacy should
depend upon the future existence of the thing.
(b) Aleatory contract, where one of the contracting
parties assumes the risk that the thing will never
come into existence, e.g. insurance.
CAUSE
DEFINITION

The essential and impelling reason why a party

assumes an obligation (Manresa). Motive, on the
other hand, is the particular reason for a contracting
party which does not affect the other.
REQUISITES:
1. Must exist at the time of the contract is entered
into [Arts. 1352, 1409, par. 3].
2. Must be lawful (ibid).
3. Must be true or real [Art.1353].
CAUSE IN

Onerous
Contracts
Renumeratory
Contracts
Pure
Beneficence
The undertaking
or the promise
of the thing or
service by the
other party
The service or
benefit which is
remunerated
Mere
liberality of
the
benefactor
In Villaroel v. Estrada (1940), where a moral
obligation is based upon a previous civil obligation,
which has already been barred by the statute of
limitations at the time the contract is entered into, it
constitutes a sufficient cause or consideration to
support a contract (natural obligation).
BUT,

In Fisher v. Robb (1939), if the moral obligation arises

wholly from ethical consideration, it cannot
constitute a sufficient cause to support an onerous
contract, as when the promise is made on the
erroneous belief that one was morally responsible for
the failure of an enterprise (moral obligation).
Cause
Effect
Lack of Cause
absence or total lack
of cause
If there is no cause
whatsoever, contract is VOID;
a fictitious sale is VOID.
NOTE: Cause must exist at
the time of the perfection of
the contract; it need not exist
later.
Contrary to law,
morals, good
customs, public policy
If cause is unlawful,
transaction is VOID.
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Cause
Effect
and public order If parts of a contract are
illegal but the rest are
supported by lawful cause,
claimant of such has the
burden of showing proof;
otherwise, the whole contract
is VOID.
Contract with illegal cause
may still produce effect in
certain cases where parties
are not of equal guilt: (1)
innocent party cant be
compelled to perform his
obligation and he may
recover what has already
been given; (2) if both parties
are guilty, neither can sue the
other, the law leaving them
as they are (in pari delicto).
Falsity of cause
cause is stated but is
untrue
Contract with a false cause is
merely revocable/voidable.
Parties are given a chance to
show that a cause really
exists, and that said cause is
true and lawful.
Lesion or inadequacy

of cause cause is
not proportionate to
object
Inadequacy of cause shall not
invalidate the contract except
when: (1) there is fraud,
mistake, undue influence (2)
when parties intended a
donation
Liguez v. CA (1957):
In making the donation in question, Lopez was not
moved exclusively by the desire to benefit Liguez, but
also to secure her cohabiting with him, so that he
could gratify his sexual impulses. The donation was
an onerous transaction and clearly predicated upon
an illicit causa.

Kinds of Contracts

CONSENSUAL
Contracts which are perfected by mere consent of
the parties regarding the subject matter and the
cause of the contract [Art.1315].
REAL
Contracts which are perfected not merely by consent
but by delivery, actual or constructive, of the object of
the obligation [Art.1316]. Example: contract of
pledge, commodatum, mutuum.
FORMAL OR SOLEMN
Contracts for which a special form is necessary for its
perfection [Art. 1356].
DONATIONS (ARTS. 748-749)
ARTICLE 748
Art. 748. The donation of a movable may be made
orally or in writing.
An oral donation requires the simultaneous delivery
of the thing or of the document representing the
right donated.
If the value of the personal property donated exceeds
five thousand pesos, the donation and the
acceptance shall be made in writing, otherwise, the
donation shall be void.
ARTICLE 749
Art. 749. In order that the donation of an immovable
may be valid, it must be made in a public document,
specifying therein the property donated and the
value of the charges which the donee must satisfy.
The acceptance may be made in the same deed of
donation or in a separate public document, but it
shall not take effect unless it is done during the
lifetime of the donor.
If the acceptance is made in a separate instrument,
the donor shall be notified thereof in an authentic
form, and this step shall be noted in both
instruments.
PARTNERSHIP WHERE REAL PROPERTY IS CONTRIBUTED
(ARTS. 1771, 1773)

1771
Art. 1771. A partnership may be constituted in any
form, except where immovable property or real rights
are contributed thereto, in which case a public
instrument shall be necessary.
ARTICLE 1773
Art. 1773. A contract of partnership is void, whenever
immovable property is contributed thereto, if an
inventory of said property is not made, signed by the
parties, and attached to the public instrument.
ARTICLE

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ANTICHRESIS (ART.
ARTICLE 2134

2134)

Art. 2134. The amount of the principal and of the

interest shall be specified in writing; otherwise, the
contract of antichresis shall be void.
AGENCY TO SELL REAL PROPERTY OR AN INTEREST
THEREIN (ART. 1874)
ARTICLE 1874

Art. 1874. When a sale of a piece of land or any

interest therein is through an agent, the authority of
the latter shall be in writing; otherwise, the sale shall
be void.
STIPULATION TO CHANGE INTEREST (ART. 1956)
ARTICLE 1956
Art. 1956. No interest shall be due unless it has been
expressly stipulated in writing.
STIPULATION LIMITING COMMON CARRIERS DUTY OF
EXTRAORDINARY DILIGENCE TO ORDINARY DILIGENCE
(ART. 1744)
ARTICLE 1744

Art. 1744. A stipulation between the common carrier

and the shipper or owner limiting the liability of the
former for the loss, destruction, or deterioration of
the goods to a degree less than extraordinary
diligence shall be valid, provided it be:
(1) In writing, signed by the shipper or owner;
(2) Supported by a valuable consideration other than
the service rendered by the common carrier; and
(3) Reasonable, just and not contrary to public policy.
CHATTEL MORTGAGE
ARTICLE 2140

Art. 2140. By a chattel mortgage, personal property is

recorded in the Chattel Mortgage Register as a
security for the performance of an obligation. If the
movable, instead of being recorded, is delivered to
the creditor or a third person, the contract is a pledge
and not a chattel mortgage.
SALE OF LARGE CATTLE

Summary of Formal or Solemn Contracts

Formal/Solemn Contract Special Form Required
by Law
(1) Donations of real
property
Must be in a public
instrument (Art.749).

(2) Donations of personal

property
Must be in a written
contract if the
donation exceeds
Formal/Solemn Contract Special Form Required
by Law
P500 (Art. 748).
(3) Partnerships where real
property contributed
Must be in public
instrument; otherwise
the contract of
partnership is void
(Art.1771, 1773).
(4) Contracts of antichresis The principal loan and
the interest, if any,
must be specified in
writing; otherwise, the
contract of antichresis
is void (Art. 2134).
(5) Agency to sell real
property or any interest
therein
Authority of the agent
must be in writing;
otherwise, the sale is
null and void
(Art.1874).
(6) Stipulation to pay
interest on loans, interest
for the use of money
Must be expressly
made in writing
(Art.1956).
(7) Stipulation limiting
common carriers duty of
extraordinary diligence to
ordinary diligence
Must be (1) in writing,
signed by the shipper
or owner; (2)
supported by a
valuable consideration;
and (3) reasonable,
just and not contrary
to public policy.
(8) Chattel mortgage Must be recorded in
the Chattel Mortgage
Register (Art. 2140).
(9) Transfer of large cattle Requires transfer of
the certificate of
registration (Rev. Adm.
Code, Sec. 523).

Formality
STATUTORY BASIS
ARTICLE 1356
Art. 1356. Contracts shall be obligatory, in whatever
form they may have been entered into, provided all
the essential requisites for their validity are present.
However, when the law requires that a contract be in
some form in order that it may be valid or
enforceable, or that a contract be proved in a certain
way, that requirement is absolute and indispensable.
In such cases, the right of the parties stated in the
following article cannot be exercised.

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GENERALLY, form is not required. It is enough that

there be consent, subject matter and cause
(Art.1318).
EXCEPTIONS:
(1) Formal contracts and
(2) Real contracts
When Form is Important:
(a) For Validity e.g. for formal or solemn contracts
(b) For Enforceability e.g. for agreements
enumerated under the Statute of Frauds
(Art.1403)
(c) For Convenience e.g. for contracts enumerated
in Art. 1385
ARTICLE 1357
Art. 1357. If the law requires a document or other
special form, as in the acts and contracts
enumerated in the following article, the contracting
parties may compel each other to observe that form,
once the contract has been perfected. This right may
be exercised simultaneously with the action upon the
contract. (1279a)
This article applies only when form is needed for
convenience, not for validity or enforceability. Thus,
before the contracting parties may be compelled to
execute the needed form, it is essential that the
contract be: (1) perfected or valid (Art.1357) and (2)
enforceable under the Statute of Frauds (Art.1356).
ARTICLE 1358
Art. 1358. The following must appear in a public
document:
(1) Acts and contracts which have for their object the
creation, transmission, modification or
extinguishment of real rights over immovable
property; sales of real property or of an interest
therein a governed by Articles 1403, No. 2, and 1405;
(2) The cession, repudiation or renunciation of
hereditary rights or of those of the conjugal
partnership of gains;
(3) The power to administer property, or any other
power which has for its object an act appearing or
which should appear in a public document, or should

prejudice a third person;

(4) The cession of actions or rights proceeding from
an act appearing in a public document.
All other contracts where the amount involved
exceeds five hundred pesos must appear in writing,
even a private one. But sales of goods, chattels or
things in action are governed by Articles, 1403, No. 2
and 1405.
The necessity for the public document in the
contracts enumerated under this article is only for
convenience, not for validity or enforceability.
Fule v. Court of Appeals (1998):
Article 1358, which requires the embodiment of
certain contracts in a public instrument, is only for
convenience, and registration of the instrument only
adversely affects third parties.

Defective Contracts

FOUR KINDS OF DEFECTIVE CONTRACTS

(PARAS):
(a) RESCISSIBLE: Valid until rescinded. All essential
requisites of a contract exist but there is injury or
damage to one of the parties or to third persons
external or extrinsic defect consisting of an
economic damage or lesion.
(b) VOIDABLE: Valid until annulled, unless ratified.
Defect is more or less intrinsic, as in the case of
vitiated consent.
(c) UNENFORCEABLE: Cannot be sued upon or
enforced, unless it is ratified. Intermediate ground
between voidable and void contracts.
(d) VOID: No legal effect at all and cannot be ratified
or validated.
RESCISSIBLE CONTRACTS (ART. 1381)
ARTICLE 1381
Art. 1381. The following contracts are rescissible:
Those which are entered into by guardians whenever
the wards whom they represent suffer lesion by more
than one-fourth of the value of the things which are
the object thereof;
Those agreed upon in representation of absentees, if
the latter suffer the lesion stated in the preceding
number;
Those undertaken in fraud of creditors when the
latter cannot in any other manner collect the claims
due them;
Those which refer to things under litigation if they
have been entered into by the defendant without the
knowledge and approval of the litigants or of
competent judicial authority;
All other contracts specially declared by law to be
subject to rescission.
ARTICLE 1382
Art. 1382. Payments made in a state of insolvency for
obligations to whose fulfillment the debtor could not

be compelled at the time they were effected, are also

rescissible.

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Definition
(1) Process designated to render inefficacious a
contract validly entered into and normally
binding, by reason of external conditions, causing
an economic prejudice to a party or to his
creditors (Scaevola).
(2) Remedy granted by law to the contracting parties
and to third persons in order to secure reparation
for damages caused them by a contract, even if
the contract is valid, by means of the restoration
of things to their condition prior to the
celebration of said contract (Manresa)
(3) Relief to protect one of the parties or a third
person from all injury and damages which the
contract may cause, to protect some preferential
right [Aquino v. Taedo (1919)].
DIFFERENCE FROM RESCISSION (RESOLUTION) UNDER
ART. 1191
ARTICLE 1191
Art. 1191. The power to rescind obligations is implied
in reciprocal ones, in case one of the obligors should
not comply with what is incumbent upon him.
The injured party may choose between the
fulfillment and the rescission of the obligation, with
the payment of damages in either case. He may also
seek rescission, even after he has chosen fulfillment,
if the latter should become impossible.
The court shall decree the rescission claimed, unless
there be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the
rights of third persons who have acquired the thing,
in accordance with Articles 1385 and 1388 and the
Mortgage Law.
Congregation of the Religious Virgin Mary v. Orola
(2008):
Art. 1191 Rescission or
Resolution
Art. 1381 Rescission by
reason of lesion
Applies only to
reciprocal obligations,
such that a partys
breach thereof partakes
of a tacit resolutory
condition which entitles
the injured party to
rescission.
Does not apply to
reciprocal obligation, and
therefore, action is not
based on a breach of an
obligation.

Predicated on breach of
faith.
Predicated on injury to
economic interests of the
party plaintiff/lesion.
Principal action that is
retaliatory in character.
Subsidiary action.
The reparation of The cause of action is
Art. 1191 Rescission or
Resolution
Art. 1381 Rescission by
reason of lesion
damages for the breach
is purely secondary.
subordinated to the
existence of an economic
prejudice. Hence, where
the defendant makes
good the damages
caused, the action cannot
be maintained or
continued.
VOIDABLE CONTRACTS
ARTICLE 1390
Art. 1390. The following contracts are voidable or
annullable, even though there may have been no
damage to the contracting parties:
(1) Those where one of the parties is incapable of
giving consent to a contract;
(2) Those where the consent is vitiated by mistake,
violence, intimidation, undue influence or fraud.
These contracts are binding, unless they are
annulled by a proper action in court. They are
susceptible of ratification.
Three Ways or Modes of Convalidating a Voidable
Contract [Jurado]
(1) By prescription of the action for annulment
(Art.1391)
(2) By ratification or confirmation (Art. 1392-1396)
(3) By loss of the thing which is the object of the
contract through the fraud or fault of the person
who is entitled to institute the action for the
annulment (Art.1401)
ARTICLE 1391
Art. 1391. The action for annulment shall be brought
within four years.
This period shall begin:
In cases of intimidation, violence or undue influence,
from the time the defect of the consent ceases.
In case of mistake or fraud, from the time of the
discovery of the same.
And when the action refers to contracts entered into
by minors or other incapacitated persons, from the
time the guardianship ceases.

UNENFORCEABLE CONTRACTS
ARTICLE 1403
Art. 1403. The following contracts are unenforceable,
unless they are ratified:

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(1) Those entered into in the name of another person

by one who has been given no authority or legal
representation, or who has acted beyond his
powers;
(2) Those that do not comply with the Statute of
Frauds as set forth in this number. In the
following cases an agreement hereafter made
shall be unenforceable by action, unless the
same, or some note or memorandum, thereof, be
in writing, and subscribed by the party charged,
or by his agent; evidence, therefore, of the
agreement cannot be received without the
writing, or a secondary evidence of its contents:
(a) An agreement that by its terms is not to be
performed within a year from the making
thereof;
(b) A special promise to answer for the debt,
default, or miscarriage of another;
(c) An agreement made in consideration of
marriage, other than a mutual promise to
marry;
(d) An agreement for the sale of goods, chattels
or things in action, at a price not less than five
hundred pesos, unless the buyer accept and
receive part of such goods and chattels, or the
evidences, or some of them, of such things in
action or pay at the time some part of the
purchase money; but when a sale is made by
auction and entry is made by the auctioneer in
his sales book, at the time of the sale, of the
amount and kind of property sold, terms of
sale, price, names of the purchasers and
person on whose account the sale is made, it
is a sufficient memorandum;
(e) An agreement of the leasing for a longer
period than one year, or for the sale of real
property or of an interest therein;
(f) A representation as to the credit of a third
person.
(3) Those where both parties are incapable of giving
consent to a contract.
Definition of Unenforceable Contracts
Those that cannot be enforced in court or sued upon
by reason of certain defects provided by law until and
unless they are ratified according to law [De Leon].
Kinds of Unenforceable Contracts:
(1) Unauthorized contracts those entered into by
one who has no authority or legal representation
or who has acted beyond his powers [Art.1403,
par.1].

(2) Those which did not comply with the Statute of

Frauds [Art.1403, par.2].
(3) Those where both parties are incapable of giving
consent to a contract [Art.1403, par.3].
General Rules of Application of Statute of Frauds
(a) The Statute of Frauds is a Rule of Exclusion, i.e.
oral evidence might be relevant to the
agreements enumerated therein and might
therefore be admissible were it not for the fact
that the law excludes said oral evidence.
(b) The defense of the Statute of Frauds may be
waived [Art.1405].
(c) Applies only to executory contracts, not partially
or completely executed (consummated)
contracts.
(d) The Statute of Frauds cannot apply if the action is
neither for damages because of the violation of an
agreement nor for the specific performance of said
agreement [Lim vs. Lim, 10 Phil 635].
(e) The Statute of Frauds is exclusive, that is, it
applies only to the agreements or contracts
enumerated therein [See Quintos v. Morata
(1930)].
(f) The Statute of Frauds is a personal defense, that
is, a contract infringing it cannot be assailed by
third persons [Art.1408].
(g) Contracts infringing the Statute of Frauds are not
void, they are merely unenforceable [Art.1403].
(h) The Statute of Frauds does not determine the
credibility or weight of evidence. It merely
concerns itself with the admissibility thereof.
(i) The Statute of Frauds does not apply if it is
claimed that the contract does not express the
true agreement of the parties. As long as the true
or real agreement is not covered by the Statute of
Frauds, it is provable by oral evidence [Cayuga v.
Santos].
VOID CONTRACTS
ARTICLE 1409
Art. 1409. The following contracts are inexistent and
void from the beginning:
Those whose cause, object or purpose is contrary to
law, morals, good customs, public order or public
policy;
Those which are absolutely simulated or fictitious;
Those whose cause or object did not exist at the time
of the transaction;
Those whose object is outside the commerce of men;
Those which contemplate an impossible service;
Those where the intention of the parties relative to
the principal object of the contract cannot be
ascertained;
Those expressly prohibited or declared void by law.
These contracts cannot be ratified. Neither can the
right to set up the defense of illegality be waived.

Definition of Void Contract [De Leon]

Those which, because of certain defects, generally
produce no effect at all. They are considered as
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inexistent from its inception or from the very

beginning.
Special Classification of Void Contracts (Paras)
(1)INEXISTENT CONTRACTS: like those where
essential formalities are not complied with
(a) Example: A donation of land in a private
instrument
(b) This produces no effect whatsoever.
(2) ILLEGAL OR ILLICIT CONTRACTS:
(a) Example: A donation made because of an
immoral condition, such as illicit sexual
intercourse
(b) In some way, the donation produces some
effect in that that he who gave the donation
cannot get back what he has given.
Non-Existing Cause or Object [Paras]
Paragraph 3 speaks of contracts whose object or
cause did not exist at the time of the transaction.
This is not exactly correct because there can be valid
contracts involving future property; example, sale of
future or after-acquired property. Thus, Mr. Justice J.
B. L. Reyes notes: Did not exist at the time of the
transaction should be Could not come into
existence because the object may legally be a future
thing.
ARTICLE 1346
Art. 1346. An absolutely simulated or fictitious
contract is void. A relative simulation, when it does
not prejudice a third person and is not intended for
any purpose contrary to law, morals, good customs,
public order or public policy binds the parties to their
real agreement.
Effect of Simulated Contract
(a) If ABSOLUTELY simulated, the contract is void for
utter lack of consent.
(b) If RELATIVELY simulated, the hidden or intended
contract is generally binding (Onglengco v.
Ozaeta).
Stipulations must not be contrary to MANDATORY
AND PROHIBITIVE LAWS.
(1) Pactum commissorium [Arts. 2088, 2130, 1390]
A stipulation in a contract of mortgage or pledge
which provides that the mortgagee will
automatically own the property mortgaged in case
the mortgagor fails to pay the loan is VOID [Art.
2088]
(2) Pactum de non alienando [Art. 2130]
A stipulation forbidding the owner from alienating
the immovable mortgaged shall be VOID [Art.2130].
(3) Pactum leonina [Art. 1799]
A stipulation which excludes one or more partners

from any share in the profits or losses is VOID

[Art.1799]
Rescissible Voidable Unenforceable Void
Defect
Damage to a party or to a third
person.
Vitiation of
consent
Without or in excess of
authority, or doesnt
comply with Statute of
Fraud, or both parties are
incapacitated.
Absolute lack of essential
requisite in fact or in law.
Effect
Valid until rescinded. Valid until
annulled.
Cannot be enforced by
court action.
Does not produce any
effect.
Grounds
1381 1382 1390 1403 1409
Necessity of Damage
Necessary. Not necessary.
Ratification
Cant be ratified. May be ratified. Cant be ratified.
Prescription
Prescriptible. - Imprescriptible.
Assailability by third persons
Assailable by a party or by a third
party who is damaged.
Assailable only by a party. Assailable by a party or by a
third party who is damaged.
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Effects of Contracts

STATUTORY BASIS
ARTICLE 1311
Art. 1311. Contracts take effect only between the
parties, their assigns and heirs, except in case where
the rights and obligations arising from the contract
are not transmissible by their nature, or by
stipulation or by provision of law. The heir is not
liable beyond the value of the property he received
from the decedent.
If a contract should contain some stipulation in favor
of a third person, he may demand its fulfillment
provided he communicated his acceptance to the
obligor before its revocation. A mere incidental
benefit or interest of a person is not sufficient. The
contracting parties must have clearly and
deliberately conferred a favor upon a third person.
GENERAL RULE: Contracts are generally effective

only between the parties, their assigns and their

heirs (principle of relativity).
EXCEPTIONS
(a) Obligations arising from the contract are not
transmissible by nature, stipulation or law
[Art.1311].
(b) Where there is a stipulation pour autrui.
STIPULATION POUR AUTRUI (definition):
stipulation in favor of a third person conferring
clear and deliberate favor which is merely art of
the contract entered into by parties, neither of
whom acted as agent of third person.
(c) Third person induces another to violate his
contract (Art. 1314).
(d) Where third persons may be adversely affected by
a contract where they did not participate [see
Arts. 1312, 2150, 2151].
(e) Where law authorizes creditor to sue on a
contract entered into by his debtor [accion
directa, Art. 1313]
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Introduction

DEFINITION OF SALES ARTS. 1458, 1470

Art. 1458. By the contract of sale one of the
contracting parties obligates himself to transfer the
ownership and to deliver a determinate thing, and
the other to pay therefor a price certain in money or
its equivalent.
A contract of sale may be absolute or conditional.
ESSENTIAL REQUISITES OF A CONTRACT OF
SALE ART. 1505
ESSENTIAL ELEMENTS OF A VALID CONTRACT OF SALE

[CORONEL V. COURT OF APPEALS, 1996]:

(4) Consent or meeting of the minds to transfer
ownership in exchange for the price
(a) Being a consensual contract, the contract of
sale is perfected at the moment there is a
meeting of the minds upon the thing which
is the object of the contract and upon the
price. [Art. 1475]
(b) Requisites: (1) Capacity, (2) Offer and
acceptance, and (3) No vitiation of consent
(5) Determinate subject matter
(6) Price certain in money or its equivalent
STAGES OF CONTRACT OF SALE
PHASES OF A SALE CONTRACT [VILLANUEVA]:
(1) Preparation, conception or generation stage
period of negotiation and bargaining, ending at
the moment of agreement of the parties.
(2) Perfection or birth of the contract moment
when the parties come to agree on the terms of
the contract; and
(3) Consummation or death of the contract

process of fulfillment or performance of the terms

agreed upon in the contract.
OBLIGATIONS CREATED ART. 1165
Art. 1165. When what is to be delivered is a
determinate thing, the creditor, in addition to the
right granted him by Article 1170, may compel the
debtor to make the delivery.
If the thing is indeterminate or generic, he may ask
that the obligation be complied with at the expense
of the debtor.
If the obligor delays, or has promised to deliver the
same thing to two or more persons who do not have
the same interest, he shall be responsible for any
fortuitous event until he has effected the delivery.
(1) Specific or Determinate Thing capable of
particular designation, e.g. this car, the car with
plate no. XNY 200
(2) Generic or Indeterminate Thing refers only to a
class, to a genus, and cannot be pointed out with
particularity, e.g. a car (GENUS NUNQUAM
PERIT)
NATURE OF OBLIGATIONS CREATED PER DEFINITION IN

ART.1458 [VILLANUEVA]:

(1) For the SELLER:

(a) To transfer ownership and
(b) To deliver possession of the subject matter
(2) For the BUYER: To pay the price
CHARACTERISTICS OF A CONTRACT OF SALE
(1) Consensual perfected by mere consent.
(2) Bilateral and Reciprocal imposes obligations on
both parties to the relationship. Consequently,
power to rescind is implied.
(3) Principal can stand on its own and does not
depend on another contract for validity, as
contrasted from an accessory contract.
(4) Onerous imposes valuable consideration as
prestation, as distinguished from a gratuitous
contract.
(5) Commutative because a thing for value is
exchanged for equal value, as contrasted from an
aleatory contract.
(6) Nominate given a particular name by law
SALE IS TITLE AND NOT MODE
Delivery or Tradition is the mode to transfer
ownership and possession to the buyer.
When a contract of sale is perfected, the seller is
merely obligated to transfer ownership and to deliver
the property. Transfer of ownership is effected only
upon delivery.
Equatorial Realty Dev. v. Mayfair Theater (2001): Sale
is merely title that creates the obligation on the part
of the seller to transfer ownership and deliver
possession, but on its own, sale is not a mode that
transfers ownership.
SALE DISTINGUISHED FROM OTHER

CONTRACTS
DONATION

Sale Donation
Onerous Gratuitous
Perfected by mere
consent
Must comply with the
formalities required by
law. [Art 745, CC]
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When the price of the contract of sale is simulated,

the sale may be void but the act may be shown to
have been in reality a donation or some other
contract. [Art.1471, CC]
BARTER

Sale Barter
Consideration is price in
money or its equivalent
Consideration is
another thing
Barter is a contract where one of the parties binds
himself to give one thing in consideration of the
others promise to give another thing [Art.1638, CC]
If consideration consists partly in money and partly in
another thing, the intention of the parties determines
whether the contract is one of sale or barter:
If manifest intention is not clear: Barter when
the value of thing is more than the amount of
money or its equivalent; otherwise, sale.
[Art.1468]
CONTRACT FOR A PIECE OF WORK

Sale
Contract for a Piece of
Work
Goods are
manufactured or
procured in the ordinary
course of business
Goods are
manufactured for
customer upon his
special order
For the general market,
whether on hand or not
For a specific
customer
The fact that the object were made by the seller only
when customers placed their orders, does not alter
the nature of the contract of sale, for it only accepted
such orders as called for the employment of such
materials as it ordinarily manufactured or was in a
position habitually to manufacture such. [Celestino
Co & Co vs. Collector, 1956]
When each product or system executed is always
UNIQUE and could not mass-produce the product
because of its very nature, such is a contract for a

piece of work. [Commissioner vs. Engineering

Equipment and Supply Co., 1975]
DACION EN PAGO

Sale Dacion en pago

No pre-existing debt Pre-existing debt
Creates an obligation Extinguishes the
obligation (mode of
payment)
Price is more freely
agreed upon, fixed by
the parties
Price is value of the
thing given
There is a novation of the contract of loan into a
contract of sale when the creditor agrees to accept a
thing in payment of the debt. Hence, if the thing
given in payment turns out to belong to another, the
creditors remedy should be governed by the law on
sales, not loan. [Baviera]
Bilateral promise to buy and sell [Asked in 80, 91]
A promise to buy and sell a determinate thing for a
price certain is reciprocally demandable. [Art 479,
CC]
Like a sale, the thing must be determinate and the
price, certain.
CONTRACT OF SALE/CONTRACT TO SELL
Contract of Sale Contract to sell
Ownership is
transferred upon
delivery
Ownership is only
transferred upon full
payment of price
Non-payment is a
resolutory condition
Full payment is a
positive suspensive
condition, hence nonpayment
would not
give rise to the
obligation to transfer
ownership
Conditional Contract of
Sale
Contract to sell
Sale is already
perfected
No perfected sale yet
A subsequent buyer is
presumed to be a buyer
in bad faith
A subsequent buyer is
presumed to be a
buyer in good faith

Parties to a Contract of Sale

CAPACITY OF PARTIES ARTS. 1489-1492

All persons who have capacity to enter into
obligations may enter into a contract of sale [Art
1489, CC]
KINDS OF INCAPACITY

(1) Absolute incapacity

(2) Relative incapacity
(3) Specific incapacity/Special disqualifications
ABSOLUTE INCAPACITY ARTS. 1327, 1397, 1399
(MIND-CI) [ART. 1327, CC]
(1) Minors
(2) Insane or Demented
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(3) Deaf-mutes who do not know how to write

(4) Civil Interdiction
(5) Judicially-declared Incompetents (Art. 39)
(a) Prodigals
(b) Imbeciles
(c) Absence & presumption of death
(d) Persons not of unsound mind but by reason of
age, disease, weak mind, and other similar
causes, cannot take care of themselves and
manage their property without outside aid
(Easy prey for deceit and exploitation)
RELATIVE INCAPACITY: MARRIED PERSONS
(1) HUSBAND AND WIFE [ART. 1490, CC]
General Rule: Cannot sell property to each other
Exceptions:
(1) Separation of property in marriage settlement,
OR
(2) Judicial separation of property.
(2) ALIENAGE [ART. 39, CC]
General Rule: Aliens are disqualified from
purchasing or acquiring real property.
Exception: If acquisition is through hereditary
succession
(3) TRUSTEESHIP [ART. 39]
SPECIAL DISQUALIFICATIONS ARTS. 1491-1492
SPECIFIC INCAPACITY/ SPECIAL DISQUALIFICATIONS (ART.
1491, CC) (AGE-PLJ)
(1) Agents
Cannot purchase or acquire property whose
administration or sale was entrusted to them
Exception: Principal gives consent.
(2) Guardian
Cannot purchase property of person under his
guardianship
Rationale: Guardianship is a trust of the highest
order, and the trustee cannot be allowed to have
any inducement or neglect his wards interest.
[Phil Trust Co v Roldan, 1956]
(3) Executors and Administrators
Cannot acquire or purchase property of estate
under their administration
(4) Public Officers and Employees

Cannot acquire or purchase property of State/any

of its subdivisions, GOCC or administration, the
administration of which was entrusted to them.
Includes judges and government experts who, in
any manner whatsoever take part in the sale.
(5) Lawyers
Cannot acquire or purchase property or rights in
litigation in which they take part by virtue of their
profession
Rationale: Lawyers may have undue influence
over client; greed may get the better of the
sentiments of loyalty and disinterestedness.
[Valencia v Cabanting, 1991]
Prohibition is definite and permanent and cannot
be cured by ratification. [Rubias v Batiller, 1973]
Exceptions: An assignment to a lawyer by his
client of an interest in the property does not
violate Art 1491, where:
(1) A judgment has been rendered and has
become final; and
(2) In case of contingency fee arrangements: the
interest of the lawyer may be annotated as an
adverse claim on the property awarded to his
client [Director of Lands v Ababa, 1979]
(6) Justices, Judges, prosecuting attorneys, clerks and
other officers and employees connected with the
administration of justice
Cannot acquire or purchase property or rights in
litigation or levied upon on execution before the
court within whose jurisdiction or territory they
exercise their respective functions.
Rationale: to prevent fraud and to surround their
profession with prestige.
Prohibition applies only on sales or assignment
during the pendency of litigation involving the
property. [Macariola v Asuncion, 1963]
Art 1492: The prohibitions in the two preceding
articles (Arts. 1490, 1491) are applicable to sales in
legal redemption, compromises and renunciations.
EFFECTS OF INCAPACITY
(1) Absolute Incapacity
(a) If both parties are incapacitated:
UNENFORCABLE [Art. 1403 (3)]
(b) If only 1 party is incapacitated: VOIDABLE
(c) If necessaries are sold and delivered to an
incapacitated person: pay a reasonable price
therefor. [Art 1489, CC]
Necessaries those which are indispensable for
sustenance, dwelling, clothing, medical
attendance, education and transportation. [Art
194, Family Code]
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(2) Relative Incapacity

Sale between spouses is VOID.
Rationale:

(1) To protect 3rd persons who may have

contracted with the spouse
(2) To avoid undue advantage of the dominant
spouse over the weaker spouse.
(3) To avoid circumvention of the prohibition
against donations between spouses. [Medina v
CIR, 1961]
Such prohibition shall likewise apply to common
law spouses. [Calimlim-Canulas v Fortun, 1984]
BUT if already sold to a third person who relied
on the title of his immediate seller, reconveyance
to the seller spouse is no longer available [Cruz v
CA, 1997]
(3) Specific Incapacity/ Special Disqualifications
Contracts expressly prohibited by law are void
and cannot be ratified. Neither can the right to
set-up the defense of illegality be waived. [Art.
1409 (7), CC]
Sales entered into by guardians, administrators,
and agents (specific incapacities) in violation of
Art. 1491 may be ratified by means of and in the
form of a new contract when the cause of nullity
has ceased to exist. Ratification is valid only from
date of execution of the new contract and does
not retroact.
Those entered into by public officers/employees,
justices and judges, and lawyers in violation of
Art. 1491 are inexistent and void from the
beginning. [Rubias v Batiller, 1973].

Subject Matter

REQUISITES OF A VALID SUBJECT MATTER

ARTS. 1459-1465
(1) Licit
(2) Existing, Future, Contingent
(3) Determinate or determinable
MUST BE LICIT [ART. 1459]
The thing is licit when
(1) Within the commerce of man [Art 1347, CC]
Example of properties that are not within the
commerce of man:
(a) Those belonging to the State or its political
subdivisions intended for public use or public
service. (Art 420, CC).
(b) Church
(c) Narcotics or dangerous drugs except upon
prescription (RA 6425, the dangerous drugs
act of 1972)
(2) When right is not intransmissible [Art 1347, CC]
Sale of future inheritance is void. [Art. 1347, CC]
The rights to succession are transmitted from the
moment of the death of the decedent [Art. 777, CC].
Thus, one cannot sell or promise to sell what he
expects to inherit from a living person. [Rivero v.
Serrano, 1950]

When the subject matter is illicit, the contract of sale

is void [Art. 1409 (7)]
EXISTING, FUTURE, CONTINGENT
The goods which form the subject of a contract of sale
may either be
(1) EXISTING goods owned or possessed by the
seller;
(2) Goods to be manufactured, raised, OR acquired
by the seller FUTURE GOODS;
(3) Goods whose acquisition by the seller depends
upon a CONTINGENCY which may or may not
happen. [Art 1462, CC]
(4) Things having POTENTIAL existence may be the
object of a contract of sale. [Art 1461, CC]
Sale of MERE hope or
expectancy
Sale of VAIN hope or
expectancy
Valid BUT subject to
condition that the thing
will come into existence
Example: Next catch
of a fisherman.
Void
Example: Sale of a
falsified raffle ticket
which will never win.
Valid BUT subject to
condition that the thing
will come into existence
Example: Next catch
of a fisherman.
Void
Example: Sale of a
falsified raffle ticket
which will never win.
Emptio Rei Speratei Emptio Spei
Valid Void
Contract is dependent
upon the existence of
the thing
(a) If the thing does not
come into existence:
contract is
considered as not
made and there is no
obligation to pay the
price
Parties intend the
contract to exist at all
events
(a) Buyer will have to
pay the price even
if the thing does
not actually come

into existence
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PAGE 175

Emptio Rei Speratei Emptio Spei

In case of doubt, the presumption is in favor of
emptio rei speratae since it is more in keeping
with the commutative character of the contract.
DETERMINATE OR DETERMINABLE

A thing is DETERMINATE when it is particularly

designated or physically segregated from all others
of the same class. [Art 1460, CC]
A thing is DETERMINABLE when it is capable of
being made determinate at the time the contract
was entered into without the necessity of a new or
further agreement between the parties. [Art 1460, CC]
Failure to state the exact location of the land does
not make the subject matter indeterminate, so long
as it can be located. [Camacho v CA, 2007]
The fact that the exact area of the land specified in
the contract of sale is subject to the result of a survey
does not render the subject matter indeterminate.
[Heirs of Juan San Andres v. Rodriguez, 2000]
PARTICULAR KINDS
(1) Future Goods
Sale of future goods or those goods which are to
be manufactured, raised, or acquired by seller
after the perfection of the sale is valid (Art 1462,
CC). Future goods are those capable of future
existence.
(2) Sale of Undivided Interest or Share
(a) Sole owner of a thing may sell an undivided
interest therein. [Art 1463, CC] e.g.: a fraction
() or percentage (50%), or my share in the
property.
(b) The sale of an undivided share in a specific
mass of fungible goods makes the buyer a coowner
of the entire mass in proportion to the
amount he bought. [Art 1464,CC]
(c) Co-owner cannot sell more than his share
[Yturralde v CA, 1972]
(3) Sale of Things in Litigation
(a) Sale of things under litigation entered into by
defendant, without the approval of the
litigants or the court is rescissible. [Art 1381
(4)]
(b) NO RESCISSION where the thing is legally in
the possession of 3rd persons who did not act
in bad faith [Art 1385 (2)]
(4) Things Subject to Resolutory Condition
Sale of things subject to a resolutory condition
may be the object of a contract of sale. [Art 1465,
CC]
Examples:
(a) things acquired under legal or conventional
right of redemption; or
(b) subject to reserva troncal,

(5) Quantity of Subject Matter not determinate

The fact that the quantity is not determinate shall
not be an obstacle to the existence of the
contract provided it is possible to determine the
same, without the need of a new contract
between the parties. [Art. 1349, CC]

Obligations of the Seller to

Transfer Ownership

SALE BY A PERSON NOT THE OWNER AT TIME

OF DELIVERY ARTS. 1462, 1505, 1459
General Rule: Ownership is not acquired by the buyer.
One cannot give what one does not have. NEMO
DAT QUOD NON HABET [Art 1505, CC]
Exceptions: (RE-ROM)
(1) Seller has a Right to transfer ownership
(a) Seller need not be the owner of the thing at
the time of perfection of the contract. It is
sufficient that seller has a right to transfer
ownership thereof at the time it is delivered.
[Art. 1459]
(b) One who sells something he does not own yet
is bound by the sale when he acquires the
thing later [Bucton vs Gabar, 1974]
(2) Estoppel: Owner is, by his conduct, precluded
from denying the sellers authority to sell. [Art.
1434]
(3) Registered land bought in good faith
(a) General rule: Buyer need not go beyond the
Torrens title
(b) Exception: When he has actual knowledge of
facts and circumstances that would impel a
reasonably cautious man to make further
inquiry
(4) Order of courts; Statutory Sale
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PAGE 176

(a) In execution sale, the buyer merely steps into

the shoes of the judgment debtor [Rule 39,
sec. 33, ROC]
(5) When goods are purchased in Merchants store,
Fair, or Market [Art 1505, CC]
(a) The policy of the law has always been that
where the rights and interest of the vendor
clash with that of an innocent buyer for value,
the latter must be protected. [Sun Brothers
and Co. vs. Velasco, 1958]
SALE BY A PERSON HAVING A VOIDABLE TITLE
ARTS. 1506, 559
(1) True owner may recover the thing when the ff.
requisites concur:
(a) Subject matter is movable
(b) Owner has either lost the thing or has been
unlawfully deprived. [Art 559, CC]
(2) Reimbursement is necessary before owner can

recover when:
(a) Buyer acted in good faith
(b) Acquired at a public auction [Art 559, CC]
(3) Recovery no longer possible when:
(a) Buyer in good faith
(b) Acquired it at a merchants store, fair or
market. [Art 1506, CC]

Price
MEANING OF PRICE ARTS. 1469-1474
Price signifies the sum stipulated as the equivalent
of the thing sold and also every incident taken into
consideration for the fixing of the price put to the
debit of the buyer and agreed to by him [Inchausti v.
Cromwell, 1911]
REQUISITES FOR A VALID PRICE
(Ce-MoRe)
(1) Certain or ascertainable at the time of perfection
(2) In Money or its equivalent
(a) Example of equivalent: Letters of credit
(b) If price is partly in money and partly in another
thing: Determine manifest intention of the
parties to see whether it was barter or sale.
[Art 1468,CC]
(c) If intention does not clearly appear, it shall be
considered a barter if the value of the thing
exceed the amount of money or its equivalent.
[Art 1468,CC]
(3) Real
When buyer has an intention to pay and the seller
has an expectation to receive the price
(a) If simulated: Sale is VOID; BUT act may be
shown to have been a donation or some other
act or contract. [Art 1471, CC]
(b) An admission of non-payment of any centavo
in exchange of a property in a contract of sale
renders the sale VOID. [Labagala vs. Santiago,
2001]
(c) If Price is false when the real consideration
is not the price stated in the contract:
i. Sale is void
ii. UNLESS proved to be founded on another
true and lawful price [Art 1353, CC]
HOW PRICE IS DETERMINED
(1) Fixed by agreement of the parties
(a) Fixing of price cannot be left to the discretion
of one of the parties
(b) BUT if such is accepted by the other, sale is
perfected. [Art 1473, CC]
(2) Determination is left to the judgment of a
specified person
(a) If unable or unwilling: Sale is inefficacious
UNLESS parties subsequently agree about the
price.
(b) If in bad faith/by mistake: Courts may fix price

(c) If 3rd person is prevented from fixing price by

fault of seller or buyer: Innocent party may
avail of remedies.
(3) The price is made in reference to another thing, or
when the price fixed is the price of the commodity
on a definite day, or in a particular exchange or
market, OR when the amount fixed is above or
below the price on such day, exchange or market.
[Art 1472, CC]
INADEQUACY OF PRICE ARTS. 1355, 1470
General Rule: Does not affect a contract of sale. [Art.
1470, CC]
The stipulation in a contract of sale which states that
the consideration is P1 and other valuable
considerations does not make the contract void.
Gross inadequacy of price does not affect the
contract of sale except that it may indicate a defect
in consent. [Bagnas v. C.A., 1989]
Exceptions:
(1) It may indicate a defect in consent such as fraud,
mistake, or undue influence
(2) It may indicate that the contract was in reality a
donation or some other act or contract
(3) Inadequacy would make the contract of sale
rescissible where a contract was entered into by
the guardian of a ward or a representative of an
absentee, without the courts approval, and the
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PAGE 177

owner suffers lesion by more than of the value

of the thing sold. [Art 1381 (1) (2), CC]
WHEN NO PRICE AGREED ART. 1474
(1) Sale is inefficacious [Art. 1474, CC]
(2) But if the thing or part thereof has been delivered
and appropriated by the buyer, he must pay a
reasonable price therefor.
(a) What is a reasonable price is a question of fact
dependent on the circumstances of each
particular case. [Art 1474, CC]
(b) The reasonableness of a price may be
determined on the basis of a companys
balance sheet showing the book value or fair
market value of its shares. [Philippine Free
Press vs. CA, 2005]
MANNER OF PAYMENT MUST BE AGREED UPON
Disagreement on the manner of payment is
tantamount to a failure to agree on the price. [Toyota
Shaw vs. CA, 1995]
EARNEST MONEY VS. OPTION MONEY ART.

1482
Earnest Money Definition: paid in advance of the
purchase price agreed upon by the parties in a
contract of sale, given by the buyer to the seller, to
bind the latter to the bargain. [Asked in 93, 02]
Option Money vs. Earnest Money [Limson vs. CA,
2001]

Option Money Earnest Money

Separate and distinct
consideration from the
purchase price
Part of purchase price
[Art 1482, CC]
Given when sale is not
yet perfected
Given only when there
is already a sale
When given, the wouldbebuyer is not required
to buy, but may even
forfeit it depending on
the terms of the option
When given, the buyer
is bound to pay the
balance
Grantee of option is still
undecided whether or
not to buy or sell the
property [Baviera]
Buyer manifests his
earnest desire to buy
the property

Formation of Contract of Sale

PREPARATORY ART. 1479
(1) OFFER ART. 1475
In General:
(a) The contract of sale is perfected at the
moment there is meeting of the minds upon
the thing which is the object of the contract
and upon the price. [Art. 1475, par.1, CC]
(b) From that moment, the parties may
reciprocally demand performance, subject to
the provisions of law governing the form of
contracts. [Art. 1475, par. 2, CC]
(c) A private instrument signed by the defendant
reciting that he bought from the plaintiff a
property at a specific address for a specific
price to be paid as soon as a bill of sale is
signed is not a mere draft but a perfected
agreement and hence, obligatory, even if there
was no statement as to area or price per
meter. [Goyena v. Tambunting, 1902]
General Rule: Offer may be withdrawn at any time
without even communicating such withdrawal to the
interested buyer.
Exception: When the offerer has allowed the offeree a
certain period to accept, the offer may be withdrawn
at any time before acceptance by communicating
such withdrawal. [Art 1324, CC]
Exception to the exception: Cannot be withdrawn
within a certain period if offer is founded upon a

consideration. [Art 1324 and 1479, CC]

(2) OPTION CONTRACT ARTS. 1479, 1324
(a) Definition
i. An accepted unilateral promise to buy or
sell supported by a consideration distinct
from the price (Art 1479, CC)
ii. An option contract is a privilege existing in
one person, for which he had paid a
consideration, which gives him the right to
buy, for example, certain merchandise or
certain specified property, if he chooses, at
any time within the agreed period, at a fixed
price. [De la Cavada vs. Diaz, 1918]
iii. An option is not of itself a purchase, but
merely secures the privilege to buy.
iv. A consideration for an optional contract is
just as important as the consideration for
any other kind of contract. If there was no
consideration for the option, then it cannot
be enforced any more than any other
contract where no consideration exists.
[Baviera]
(b) Difference from Sale
Sale Option Contract
Bilateral Unilateral: gives a right
to buy or to sell, but
imposes no obligation
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Sale Option Contract

on the part of the
option-holder, aside
from the consideration
for the offer
Sale of property Sale of right to
purchase
(3) RIGHT OF FIRST REFUSAL
As to enforceability
If the right to the first offer is embodied in the
contract, it should be executed according to the
terms stipulated. The right should be enforced
according to the law on contracts and not on the
panoramic and indefinite rule on human relations.
This juridical relation is not amorphous nor is it
merely preparatory. [Equatorial Realty Development
vs. Mayfair, 1996]
When the grantee fails to exercise the right
Only after the grantee fails to exercise its right of 1st
priority under the same terms and conditions within
the period agreed upon, could the grantor validly
offer to sell the property to a 3rd person under the
same terms as offered to the grantee. [Paranaque
Kings vs. CA, 1997]
As to the effects of the violation of the right
(a) A sale made in violation of a right of first refusal is
valid but rescissible, and may be the subject of an

action for specific performance. [Rosencor Devt.

Corp. Vs. Inquing, 2001]
(b) However, before the sale to the 3rd person may
be rescinded, he must have been actually or
constructively aware of the right of 1st refusal at
the time he bought it.
(c) The sanction for the enforcement of the right of
first refusal against third persons is based on Art.
19 of NCC, as no real right was created on the
property.
Difference from Sale
Sale Right of 1st Refusal
Bilateral Unilateral
Price and other terms of
payment are certain
Price and other terms
are yet to be agreed
upon
The thing to be sold must be determinate
Distinction from Option Contract
Option Contract Right of 1st Refusal
Separate consideration
is necessary
No need for a separate
consideration
Grantee has the right to No right to buy or sell,
Option Contract Right of 1st Refusal
buy or sell only a right to match
the 1st offer to buy
should the grantor
decide to sell
(4) MUTUAL PROMISE TO BUY AND SELL ART. 1479
A promise to buy and sell a determinate thing for a
price certain is reciprocally demandable. [Art 1479]
The promise made by one party is the consideration
for the promise made by the other. [Baviera]
PERFECTION ARTS. 1475, 1319, 1325, 1326
WHEN PERFECTED

(1) Contract of sale is a consensual contract, hence

perfected at the moment of the meeting of the
minds of the parties as to the object of the
contract and the price. [Art 1475,CC]
(2) It is the proof of all the essential elements of the
contract of sale, and not the mere giving of
earnest money, which establishes the existence of
a perfected sale. [Platinum Plans Phils. vs.
Cucueco, 2006]
EFFECT OF PERFECTION

From the moment of the perfection of the contract of

sale, the parties may reciprocally demand
performance, subject to the provisions of the Statute
of Frauds. [Art 1475, CC]
FORM AND OFFER

(a) Offer must be certain as to the object and price

[Art. 1319, CC]
(b) Business advertisements of things for sale are not

offers but mere invitations to make an offer

Exception: If otherwise provided [Art. 1325, CC]
(c) Advertisements for bidders are simply invitations
to make proposals (Asked in 80)
Advertiser is not bound to accept the highest or
lowest bid.
Exception: Unless the contrary appears [Art. 1326,
CC]
FORMALITIES OF THE CONTRACT ART. 1403

(D) (E)
General rule: No form required as to validity since sale
is perfected by consent of the parties.
The sale may be [Art.1483, CC]:
(1) Written
(2) Oral
(3) Partly written and partly oral
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(4) Inferred from the conduct of the parties

Exceptions:
(1) Statute of Frauds [Art,1403 (2),CC]
(a) Contract or some memorandum thereof must
be in writing and subscribed by the party or his
agent, otherwise contract is unenforceable;
unless ratified by failure to object to oral
evidence or acceptance of benefits under the
contract
(b) Statute of Frauds covers:
i. Sale of goods, chattels, or things in action at
a price not less than P500
ii. Sale not to be performed within 1 year
iii. Sale of real property or an interest therein
[Art 1358, CC]
(c) Applies only to executory contracts, not to
contracts either totally or partially performed.
[Iigo v. Estate of Maloto, 1967]
(2) Sale of realty by an agent
Agents authority must be in writing, otherwise the
sale is void [Art.1874, CC]
(3) Sale of large cattle
To be valid, transfer of large cattle must be
registered with the municipal treasurer [Sec. 529,
Revised Administrative Code]

Transfer of Ownership
MANNER OF TRANSFER ARTS. 1477, 1496-1501
Obligation to transfer ownership and to deliver is
implied in every contract of sale [Arts. 1458-1459]
Transfer of ownership requires delivery [Art. 1495]
GENERAL CONCEPTS

Delivery comprises 2 obligations in Art. 1495:

(1) Actual duty to deliver
(2) Transfer of ownership can only be
accomplished via delivery
What to Deliver
(1) Thing sold [Art. 1495]

(2) Fruits [Art. 1164 & 1537]

(3) Accessions and accessories [Art. 1166 & 1537]
(a) Improvements by seller at his expense grants
him a usufructuary right.
(b) No indemnification
(c) But he may remove it to the extent that there
is no damage [Art. 1538]
Where to Deliver
(1) A hierarchy is followed (STOR):
(a) Stipulation
(b) Usage of trade
(c) Sellers place of business (office)
(d) Sellers residence
(2) In case of specific goods, which the parties knew
to be at some other place when the contract was
perfected, that place is the place of delivery
(3) If goods are at the time of sale possessed by a
third person, then there is no delivery until he
acknowledges to the buyer that he holds the
goods for the buyer.
When to Deliver
Absent a stipulation as to time, delivery must be
made within a reasonable time; demand or tender of
delivery shall be made at a reasonable hour.
WHEN DELIVERY DOES NOT TRANSFER TITLE
(1) SALE ON APPROVAL, TRIAL, OR SATISFACTION
General Rule: Title remains with the seller
Exceptions:
(a) Buyer signifies his approval or acceptance to
the seller or does any other act adopting the
transaction
(b) Retains the goods without giving notice of
rejection after the time fixed has expired; if no
time has been fixed, after the expiration of a
reasonable time [Art 1502, CC]
Difference between Sale on Approval and Sale on
Return
Sale on Approval Sale on Return
Ownership does not
pass upon delivery
Ownership passes
upon delivery, but
buyer may revest
ownership in the seller
by returning or
tendering the goods
within the time fixed in
the contract
Depends on the
character or quality of
goods
Depends on the will of
the buyer
Subject to a suspensive
condition

Subject to a resolutory
condition
Risk of loss remains
with the seller
Risk of loss remains
with the buyer
Express Reservation
If it was stipulated that ownership in the thing shall
not pass to the purchaser until he has fully paid the
price [Art 1478, CC]
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Implied Reservation
The following are instances when there is an implied
reservation of ownership:
(a) Goods are shipped, but by the bill of lading
goods are deliverable to the seller or his
agent, or to the order of the seller or his agent
(b) Bill of lading is retained by the seller or his
agent.
(c) When the seller of the goods draws on the
buyer for the price and transmits the bill of
exchange and bill of lading to the buyer, and
the latter does not honor the bill of exchange
by returning the bill of lading to the seller.
(2) WHEN SALE NOT VALID
eg. When the thing sold is a public property
(3) WHEN SELLER IS NOT THE OWNER
General Rule: Ownership is not acquired by the
buyer. One cannot give what one does not have.
[Art 1505, CC]
Exceptions: (RE-ROM)
(a) Seller has a Right to transfer ownership
i. Seller need not be the owner of the thing at
the time of perfection of the contract. It is
sufficient that seller has a right to transfer
ownership thereof at the time it is delivered.
[Art. 1459]
ii. One who sells something he does not own
yet is bound by the sale when he acquires
the thing later [Bucton vs Gabar, 1974]
(b) Estoppel: Owner is, by his conduct, precluded
from denying the sellers authority to sell. [Art.
1434]
(c) Registered land bought in good faith
i. General rule: Buyer need not go beyond the
Torrens title
iii. Exception: When he has actual knowledge
of facts and circumstances that would impel
a reasonably cautious man to make further
inquiry
(d) Order of courts; Statutory Sale
In execution sale, the buyer merely steps into
the shoes of the judgment debtor [Rule 39,
sec. 33, ROC]
(e) When goods are purchased in Merchants

store, Fair, or Market [Art 1505, CC]

The policy of the law has always been that
where the rights and interest of the vendor
clash with that of an innocent buyer for value,
the latter must be protected. [Sun Brothers
and Co. vs. Velasco, 1958]
(4) SALE BY PERSON HAVING A VOIDABLE TITLE
(a) True owner may recover the thing when the ff.
requisites concur:
i. Subject matter is movable
ii. Owner has either lost the thing or has been
unlawfully deprived. [Art 559, CC]
(b) Reimbursement is necessary before owner can
recover when:
i. Buyer acted in good faith
ii. Acquired at a public auction [Art 559, CC]
(c) Recovery no longer possible when:
i. Buyer in good faith
ii. Acquired it at a merchants store, fair or
market. [Art 1506, CC]
KINDS OF DELIVERY
(1) ACTUAL DELIVERY
(a) When deemed made: when the thing sold is
placed in the control and possession of the
vendee [Art. 1497]
(b) Not always essential to passing of title [Art.
1475]
(c) Parties may agree when and on what
conditions the ownership shall pass to the
buyer [E.g.: Art 1478 where ownership will only
pass after full payment of the price]
(2) CONSTRUCTIVE DELIVERY
(a) Execution of public instrument [Art 1498, par.
1]
General rule: produces the same legal effects of
actual delivery.
Exceptions:
i. The intention of the parties is otherwise.
ii. At the time of execution, the subject
matter was not subject to the control of
the seller which must subsist for a
reasonable length of time after execution.
[Pasagui v Villablanca, 1975]
Control over thing sold must be such that seller is
capable of physically transferring it to buyer
(b) Symbolic Delivery
i. Delivery of keys of the place or depositary
where the movable is stored or kept. [Art
1498, CC]
ii. Unless otherwise agreed, when symbolic
delivery has been made, the seller is not
obliged to remove tenants to place the
buyer in actual possession of the property
as he has already complied with his
obligation to transfer ownership of and

deliver the thing sold. [Power Commercial

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PAGE 181

and Industrial Corp. v. CA, 1997; Sabio v. The

International Corporate Bank, Inc., 2001]
(c) Tradition Longa Manu (Long Hand)
i. Delivery of thing by mere agreement.
ii. Example: Seller points to the property
without actually transferring physical
possession thereof.
iii. When an employer assigned all its rights
and title to all surplus property salvaged by
the contractor, tradition longa manu takes
place. Delivery is upon the moment a thing
is salvaged. [Board of Liquidators v. Floro,
1960]
(d) Tradition Brevi Manu (Short Hand)
MOVABLE is delivered when the buyer had the
thing already in his possession before the sale
took place, not as owner but as lessee,
borrower, or depositary.
(e) Tradition Constitutum Possessorium
Seller continues to be in possession of the
property sold, by virtue of a lease contract
agreement with the vendee.
(f) Delivery to a Common Carrier
General Rule: Delivery to the courier or carrier
is tantamount to delivery to buyer.
Exceptions
i. Seller reserved title by the form of the bill of
lading, with intent to remain the owner, not
merely for the purpose of securing payment,
OR
ii. Contrary intention appears in the contract
(i.e. seller is required to deliver goods to
buyer at the point of destination)
iii. F.O.B. (Free on Board or Freight on Board):
When seller bears the expenses of
transportation up to the F.O.B. point.
iv. C.I.F. (Cost, Insurance, Freight): Price quoted
includes the costs of the goods, insurance,
and freight charges on the goods up to the
point of destination.
v. F.A.S. (Free Alongside): Seller bears the
expenses of transportation until he delivers
the goods alongside a vessel at a named
port.
DOUBLE SALES ART. 1544
General Rule: Prior tempore, potior jure (he who is
first in time is preferred in right) applies.
Requisites [Cheng v Genato, 1998]:
(1) 2 or more valid sales;
(2) Same subject matter;
(3) 2 or more buyers with conflicting interests at
odds over the rightful ownership of the thing sold;
(4) Same seller

RULES GOVERNING SALE OF MOVABLES, IMMOVABLES AND

UNREGISTERED LANDS

(1) Sale of Movables

Ownership shall be transferred to the person who
may have first taken possession in good faith.
(2) Immovables
(a) Ownership belongs to the person who:
i. In good faith first recorded it in the Registry
of Property; OR
ii. If there is no inscription, ownership passes
to the person who in good faith was first in
possession; OR
iii. In the absence thereof, to the person who
presents the oldest title, PROVIDED there is
good faith.
Oldest Title any public document showing
acquisition of the land in good faith. To
constitute title, the transmission of
ownership must appear in a public document
[Art. 1358 (1)]
Examples: Deed of Sale, Deed of Donation,
Deed of Trust
(b) Registration includes any entry made in the
Primary Entry Book of the registry, including
both registration in its ordinary and strict
sense and cancellation, annotation, and even
marginal notes. [Cheng v. Genato, 1998]
i. Pencilled entries on the title are not
considered registration [AFPMBAI v. Court of
Appeals, 1999].
(3) Sale by Virtue of Execution and Attachment
Art. 1544 does NOT apply to the sale of
unregistered land at an execution sale because a
buyer of unregistered land at an execution sale
only steps into the shoes of the judgment debtor,
and merely acquires the latter's interest in the
property sold as of the time the property was
levied upon. [Carumba v. CA, 1970]
(4) Sale of Unregistered Land
(a) Instrument or deeds establishing,
transmitting, acknowledging, modifying or
extinguishing rights with respect to lands not
registered under the Land Registration Act or
the Spanish Mortgage Law, are required to be
registered in the Registry of Property to
prejudice 3rd persons, although such
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PAGE 182

registration is understood to be w/o

prejudice to a 3rd party with a better right.
[PD 1528 Sec 113]
(b) Art. 1544 applies to unregistered land subject to
a conventional sale (because of Art. 1358) but
NOT to unregistered land subject to judicial
sale.
PROPERTY REGISTRATION DECREE

(1)

REQUISITES FOR REGISTRATION OF DEED OF SALE IN

GOOD FAITH

Purchaser in good faith

(a) General Characteristics
i. One who buys the property of another,
without notice that some other person has a
right to or interest in such property, and
who pays a full and fair price for the sale, at
the time of the purchase or before he has
notice of the claim/interest of some other
person in the property. [Agricultural and
Home Extension Development Group v CA,
1992]
(b) Presumption
General Rule: As a rule, he who asserts the
status of a purchaser in good faith and for
value has the burden of proving such
assertion. This onus probandi cannot be
discharged by mere invocation of the legal
presumption of good faith, i.e., that everyone
is presumed to act in good faith [Mathay v CA,
1998]
When buyer is presumed to be in bad faith:
i. Annotation of adverse claim: Places any
subsequent buyer of the registered land in
bad faith. [Balatbat v CA, 1996]
ii. Annotation of Lis Pendens: Buyer cannot be
considered an innocent purchaser for value
where it ignored the lis pendens on the title.
iii. A purchaser of a parcel of land cannot close
his eyes to facts which should put a
reasonable man upon his guard, such as
when the property subject of the purchase is
in the possession of persons other than the
seller. A buyer who could not have failed to
know or discover that the land sold to him
was in the adverse possession of another is
a buyer in bad faith. (Heirs of Ramon
Durano v Uy, 2010)
Lis Pendens
Annotation of Adverse
Claim
May be cancelled even
before the action is
finally terminated for
May be cancelled only
in one instance, i.e.,
after the claim is
Lis Pendens
Annotation of Adverse
Claim
causes which may not
be attributable to the
claimant
adjudged invalid or

unmeritorious by the
Court
Both are intended to protect the interest of a
claimant by notifying and cautioning other
persons that said property is subject to a claim.
The two are not contradictory or repugnant to one
another; nor does the existence of one automatically
nullify the other, and if any of the registrations
should be considered unnecessary or superfluous, it
would be the notice of lis pendens [A. Doronila
Resources Development Inc v CA, 1988]
(2) ACCOMPANIED BY VENDORS DUPLICATE CERTIFICATE
OF TITLE, PAYMENT OF CAPITAL GAINS TAX, AND
DOCUMENTARY TAX REGISTRATION FEES

Must be accompanied by:

(a) Vendors duplicate certificate of title
(b) Payment of capital gains tax 6% of the
selling price or zonal value, whichever is
higher
(c) Documentary tax registration fees 1.5% of the
selling price or zonal value, whichever is
higher

Risk of Loss

GENERAL RULE ARTS. 1263, 1189

Res perit domino: Owner bears risk of loss
BASIS: Ownership is not transferred until delivery.
WHEN LOSS OCCURRED BEFORE PERFECTION
Such loss is borne by seller
WHEN LOSS OCCURRED AT TIME OF
PERFECTION ARTS. 1493 AND 1494
Loss must have occurred before the contract was
entered into, without the knowledge of both parties
Total Loss
Partial Loss (Or loss
which results in
substantial change in
character)
Contract is ineffective.
Because there can
be no contract without
an object
Buyer may withdraw
from the contract
OR
Buy the remainder at a
proportionate price
WHEN LOSS OCCURRED AFTER PERFECTION
BUT BEFORE DELIVERY
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PAGE 183

Seller bears risk of loss

Buyer does not bear risk of loss until goods are
delivered to him
WHEN OWNERSHIP IS TRANSFERRED ART.

1504

WHEN OWNERSHIP IS TRANSFERRED TO THE BUYER, THE

GOODS ARE AT THE BUYERS RISK

(1) Where delivery of the goods has been made to

the buyer or to a bailee for the buyer, in
pursuance of the contract and the ownership in
the goods has been retained by the seller merely
to secure performance by the buyer of his
obligations under the contract, the goods are at
the buyers risk from the time of such delivery
(2) Where actual delivery has been delayed through
the fault of either the buyer or seller the goods
are at the risk of the party in fault. [Art 1504, CC]

Documents of Title

DEFINITION ART. 1636

A document used in the ordinary course of business
in the sale or transfer of goods, as proof of the
possession or control of the goods, or authorizing or
purporting to authorize the possessor of the
document to transfer or receive, either by
endorsement or by delivery, goods represented by
such document. [Art. 1636]
Examples: bill of lading, quedan, warehouse receipts,
trust receipts
PURPOSE OF DOCUMENTS OF TITLE
(1) As evidence of possession or control of goods
described therein
(2) As a medium of transferring title and possession
over the goods described therein without having
to effect actual delivery thereof [Villanueva]
(3) The custody of a negotiable warehouse receipts
issued to the order of the owner, or to bearer, is a
representation of title upon which bona fide
purchasers for value are entitled to rely, despite
breaches of trust or violations of agreement on
the part of the apparent owner. [Siy Cong Bieng
vs. HSBC, 56 Phil 598]
NEGOTIABLE DOCUMENTS OF TITLE
Definition: A document of title which states that the
goods referred to therein will be delivered to the
bearer, or to the order of any person named in such
document [Art. 1508, CC]
Terms of the Document How negotiated
Goods are deliverable
to bearer
Endorsed in blank by
the person to whose
order the goods were
supposed to be
delivered
By delivery of the
document to another
Goods are deliverable
to the order of a
specified person

By indorsement of
such person [Art. 1509,
CC]
WHO MAY NEGOTIATE IT? [ART.1512, CC]
(1) Owner
(2) Person to whom the possession or custody of the
document has been entrusted by the owner
(a) If bailee undertakes to deliver the goods to
such person
(b) If document is in such form that it may be
negotiated by delivery
A PERSON TO WHOM A DOCUMENT HAS BEEN NEGOTIATED
ACQUIRES

(1) Rights of the vendor

(2) Rights of the original consignee
NON-NEGOTIABLE DOCUMENTS OF TITLE
Goods described in a non-negotiable document of
title are deliverable only to a specified person.
Carrier will not deliver the goods to any holder of the
document or to whom such document may have
been endorsed by the consignee.
Must present the deed of sale or donation in his
favor.
Negotiation [negotiable document of title] VS.
Transfer [non-negotiable document of title]:
Negotiation (Art. 1508) Transfer
Delivery of a negotiable
document of title to
another if by the terms
thereof, the goods are
deliverable to bearer, or
when the document
was endorsed in blank
by the person to whose
order the goods are
deliverable.
In a negotiable
document of title, the
buyer may acquire a
better title than his
transferor.
The assignment of
rights of the consignee
of a non-negotiable
document of title to
another; or
Document of title was
ordered sold or
assigned, without
indorsement.
Transferee does not
acquire a better title
than his transferor
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PAGE 184

WARRANTIES OF SELLER OF DOCUMENTS OF

TITLE ART. 1516

A PERSON WHO NEGOTIATES A DOCUMENT OF TITLE
WARRANTS

(1) Genuineness of document

(2) Legal right to negotiate or transfer
(3) No knowledge of fact which would impair the
validity or worth of the document
(4) Right to transfer the title to the goods and
merchantability or fitness for a particular
purpose, whenever such warranties would have
been implied
HE DOES NOT WARRANT THAT
(1) Common carrier will fulfill its obligation to deliver
the goods
(2) Previous indorsers will fulfill their obligation [Art.
1516-1517, CC]
GOODS IN THE HANDS OF THE CARRIER COVERED BY A
NEGOTIABLE DOCUMENT CANNOT BE ATTACHED OR LEVIED
UPON, UNLESS

(1) Document is first surrendered to the carrier; or

(2) Impounded by the court; or
(3) Its negotiation is enjoined. [Art. 1519-1520,CC]
RULES ON LEVY/GARNISHMENT OF GOODS
ARTS. 1514, 1519, 1520
Goods in the hands of the carrier covered by a
negotiable document cannot be attached or levied
upon, UNLESS
(1) Document is first surrendered to the carrier; or
(2) Impounded by the court; or
(3) Its negotiation is enjoined. [Art. 1519-1520,CC]
The levy of an attachment of execution upon the
goods by a creditor of the transferor may defeat the
title of the transferee and the right to acquire the
obligation of such bailee when:
(1) It was done prior to the notification to such bailee
by the transferor of a non-negotiable document
of title or
(2) By a notification to such bailee by the transferor
or a subsequent purchaser from the transferor of
a subsequent sale of the goods by the transferor.
[Art 1514 (3rd par)]
A creditor whose debtor is the owner of a negotiable
document of title shall be entitled to such aid from
courts in regard to property which cannot be readily
attached or levied by ordinary legal process [Art
1520]

Remedies of an Unpaid Seller

DEFINITION OF UNPAID SELLER ART. 1525
A seller is considered to be an unpaid seller if the
whole price has not been paid or tendered, or when
check received as a conditional payment was
dishonored by non-payment or insolvency of the
buyer [Baviera]
Term also includes:

(1) The agent of the seller to whom the bill of lading

was endorsed,
(2) The consignor or agent who had paid the price or
is responsible for the price
(3) Any other person who is in the position of a seller
(i.e. buyer who paid the price and had a right to
return the goods). [Baviera]
REMEDIES OF UNPAID SELLER
JUDICIAL REMEDIES OF AN UNPAID SELLER

(1) Action for the price or specific performance [Art.

1595]
Conditions:
(a) The goods has passed to the buyer
(b) Price is payable on a certain day, irrespective
of delivery of the goods
(c) Buyer can set up the defense that seller could
not or did not intend to deliver the goods
(d) Seller was notified by the buyer of his
repudiation of the contract after the seller has
completed the manufacture of the goods or
had procured the goods to be delivered and
the goods could not readily be resold for a
reasonable price
(2) Action for damages for non-acceptance, if buyer
wrongfully neglects or refuses to accept and pay
for the goods (Art. 1596)
Measure of damages: Estimated loss directly and
naturally resulting in the ordinary course of
events from the buyers breach
(a) Where there is available market for goods:
Difference between the contract price and the
market price at the time the goods ought to
have been accepted or if no time was fixed, at
the time of refusal to accept
(b) If the resale was made with diligence: resale
price is evidence of market value, taking into
account whether or not the goods could be
readily sold
(c) Where labor/expense was necessary for seller to
fulfill his obligation: Labor performed and
expenses made by seller before receiving
notice of buyers repudiation or countermand
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PAGE 185

(d) Profit that the seller would have made if sale

had been fully performed
(3) Rescission by giving the buyer notice of the
election to rescind [Art. 1597]
Under this rule, rescission would bar an action on
the contract because it means cancellation of the
contractual obligations between the parties.
[Baviera]
(4) Special rule for sale of movables by installments
Recto Law [Arts. 1484, 1485]
Applies in cases of:
(a) Sale of movables in installment

i. The rule is intended to apply to sales of

movables, the price of which is payable in
two or more installments, but not to
straight-term sales where the price is
payable in full, after making a down
payment because the law aims to protect
improvident buyers who may be tempted to
buy beyond their means. [Levy Hermanos vs.
Gervacio, 1939]
(b) Lease of personal property with option to buy
i. When lessor has deprived the lessee of the
possession or enjoyment of the thing (Ex.:
When lessor files a complaint for replevin
against lessee)
ii. Also applies when seller assigns his credit
to someone else
ALTERNATIVE REMEDIES OF THE UNPAID SELLER UNDER
RECTO LAW

(a) Specific Performance

(b) Cancellation of sale: If vendee fails to pay 2 or
more installments
i. When the seller cancels the sale by
repossessing the property sold, he is barred
from exacting payment for its price.
(c) Foreclosure of Chattel Mortgage: If vendee fails
to pay 2 or more installments
i. If seller chooses this remedy, he shall have no
further action to recover any unpaid balance,
and any stipulation to the contrary shall be void
ii. What Art 1484 (3) prohibits is further action
against the purchaser to recover any unpaid
balance of the price; and although this Court
has construed the word action to mean any
judicial or extrajudicial proceeding by virtue of
which the vendor may lawfully be enabled to
exact recovery of the supposed unsatisfied
balance of the purchase price from the
purchaser or his privy, there is no occasion at
this stage to apply the restrictive provision of
the said article because there has not yet been
a foreclosure sale resulting in a deficiency. The
payment of the sum of P1,250 of Sapinoso was
a voluntary act on his part and did not result
from a further action instituted by Northern
Motors. [Motors vs. Sapinoso, 1970]
iii. The purpose of the law is to remedy the abuses
committed in foreclosure of chattel
mortgages. It prevents mortgagees from
seizing the mortgaged property, buying it at
foreclosure sale for a low price and then
bringing the suit against the mortgagor for a
deficiency judgment. The almost invariable
result of this procedure was that the mortgagor
found himself minus the property and still
owing practically the full amount of his original
indebtedness. [Bachrach Motor Co., Inc. v.

Millan, 1935]
iv. Remedies are ALTERNATIVE, not cumulative,
i.e. exercise of one bars exercise of the others.
[Nonato vs. IAC, 1985]

Performance of Contract

DELIVERY OF THING SOLD

(1) SALE OF MOVABLES ARTS. 1522, 1537, 1480
(a) When Quantity less than expected
i. Buyer may reject all
ii. Buyer accepts with knowledge of sellers
inability to deliver the rest buyer pays at
contract price
iii. Buyer has used or disposed prior to knowing
sellers inability to deliver the rest buyer
pays fair value
(b) Quantity more than expected
i. If divisible, buyer may reject excess
ii. If indivisible, buyer may reject all
(c) Quality different or different goods
i. If divisible, buyer may accept the goods
compliant with contract and reject those
that are not
ii. If indivisible, buyer may reject all [Art. 1522]
(d) Sale of specific mass of goods
i. In the sale of fungibles where the measure
or weight has not been agreed upon nor is
there a fixed rate based upon a
measurement, the subject matter of the
sale is a determinate object the specific
mass; seller is merely required to deliver
such mass even if actual quantity falls short
of parties estimate [Art. 1480]
(e) Delivery by installments
i. By default, buyer is not bound to accept
delivery of goods by installments
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PAGE 186

ii. In a contract of delivery by installment to be

paid by installment as well, delay or breach
may not necessarily mean breach of the
entire contract; depending on the
circumstances, breach may be severable and
the aggrieved party is entitled to damages
and not rescission. [Art. 1583]
(2) SALE OF IMMOVABLES ARTS. 1539, 1543
(a) Sale at a fixed rate per unit of measure
i. Seller bound to deliver entire land
ii. If the area is less than that stated, buyer
may rescind or demand a proportionate
reduction in price
iii. If a part of the land is not of the quality
stated in the contract, buyer may rescind or
demand a proportionate reduction in price
iv. Buyer may only avail of rescission if the area
deficiency is 10% or more of total area or if

the inferior value of the part of the land

exceeds 10% of the price agreed upon. [Art.
1539]
v. If the area turns out to be greater than that
stated, buyer may accept area included and
reject the excess or accept all and pay a
proportionate increase in price [Art. 1540]
(b) Sale for a lump sum
i. Follows the same rule as the sale of a
specific mass which is explained above
ii. There is no change in price even if area or
number turns out to be greater or lesser
than that stated [Art. 1542]
iii. Exception: when the excess or deficiency is
no longer reasonable [Asian v Jalandoni,
1923: 644 m2 was unreasonable]
iv. Exception to the exception: when buyer
expressly assumes risk on actual area of the
land. [Garcia v Veloso, 1941]
v. If the price per unit or measure is not
provided for in the contract, then the rules
of lump sum sale should prevail. [Sta. Ana v
Hernandez, 1966]
(3) INSPECTIONS AND ACCEPTANCE
Inspections
Right of Inspection: The buyer has reasonable
opportunity to examine the goods upon delivery.
If there is a stipulation that delivery is
preconditioned on payment, then buyer has no
right of inspection until he has paid. [Art.1584]
Exception: in case such right of inspection is
permitted by agreement or usage of trade.
Acceptance
Accept Delivery
(1) Form
(a) Express: buyer intimates acceptance
(b) Implied:
i. Goods are delivered to the buyer and he
does any act in relation to the goods
delivered that is inconsistent with the
ownership of the seller.
ii. After the lapse of a reasonable time, the
buyer retains the goods without
intimating to the seller that he has
rejected them. [Art.1585]
(2) Effect of Refusal to accept
(a) If buyer refuses to accept goods, having
the right to do so, he is not bound to return
them to the seller, it being sufficient that
he notifies the seller of his refusal to
accept
i. If he voluntarily constitutes himself a
depositary of the goods, he shall be
liable as such. [Art.1587]
ii. Unjust refusal to accept still results to

transfer of ownership. In such case, title

to the goods passes to the buyer from
the moment they are placed at his
disposal, except if ownership has been
reserved by the seller [Art.1588]
PAYMENT OF PRICE
PAY THE PRICE OF THE THING SOLD (ART. 1582)
Payment of interest:
Buyer is liable for interest when: (SFD)
(1) Interest is stipulated;
(2) Thing sold produces fruits or income;
(3) Buyer is in default - interest accrues from the
time of judicial or extrajudicial demand for
payment
Suspension of payments:
Buyer may suspend payment when:
(1) His ownership or possession of the thing is
disturbed; OR
(2) He has reasonable grounds to fear such
disturbance by a vindicatory action or a
foreclosure of mortgage
Exceptions: buyer cannot suspend payment
when:
(1) Seller gives security for the return of the price in a
proper case
(2) It has been stipulated that, notwithstanding any
such contingency, the buyer shall be bound to
pay [Art. 1590]
(a) Suspension may continue until the seller has
caused the disturbance or danger to cease
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PAGE 187

(b) However, a mere act of trespass shall not

authorize the suspension of the payment.
[Art.1590]
Sale of real property
(1) In the sale of immovable property, buyer may pay
even beyond the expiration of the period agreed
upon, as long as no demand for rescission of the
contract has been made upon him either
judicially or by a notarial act, despite a stipulation
providing for ipso jure rescission [Art.1592]
(2) After demand, court may not grant him a new
term [Heirs of Escanlar, et.al. v. CA, 1997]
(3) R.A. 6552 (Maceda Law) applies to sale or
financing of real estate on installment [Rillo v.
Court of Appeals,1997]
(a) Buyer is awarded a grace period of 1 month
per year of installments paid or 60 days,
whichever is higher, within which he may pay
without additional interest
i. May be used once every 5 years of the life of
the contract or any of its extensions
(b) If contract is to be cancelled, seller must first:
i. Give a 30-day notice of cancellation, and
ii. Refund cash surrender value to buyer;

iii. CSV is equivalent to 50% of total payments

made including deposits, options and
down-payments plus 5% for every year in
excess of 5 years of the life of the contract
or any of its extensions.

Warranties

Definition: A statement or representation made by

the seller contemporaneously and as part of the
contract of sale, having reference to the character,
quality, or title of the goods, and by which he
promises or undertakes to ensure that certain facts
are or shall be as he then represents.
CONDITION V. WARRANTY
Condition Warranty
Pertains to and affects
the existence of the
obligation
Goes into the
performance of an
obligation and may, in
itself, be an obligation
Non-happening does
not amount to breach
of contract
Non-fulfillment
constitutes breach of
contract
Must be stipulated Stipulation or
operation of law
May attach either to the
sellers duty to deliver
Always relates to the
subject matter or the
Condition Warranty
thing or some other
circumstance
sellers obligations as
to the subject matter
If seller has promised that the condition should
happen or be performed, the buyer may treat the
nonperformance of the condition as a breach of
warranty. [Art.1545]
EXPRESS WARRANTIES
For there to be express warranty, the following
requisites must concur: (APIR)
(1) An affirmation of fact or any promise relating to
the thing sold;
(2) The natural tendency of such affirmation or
promise is to induce the buyer to buy;
(3) The buyer buys the thing relying thereon. [Art.
1546]
(4) Made before the sale not upon delivery or any
other point
An express warranty can be made by and also be

binding on the seller even in the sale of a second

hand article. [Moles v. IAC, 1989]
Express Warranty
Dealers or Traders
Talk
What is specifically
represented as true in
said document cannot
be considered as mere
dealer's talk. [Moles v.
IAC, 1989]
(a) Affirmation of the
value of the thing
or statement of the
sellers opinion only
is not a warranty
unless:
i. The seller made
it as an expert;
ii. It was relied
upon by the
buyer. [Art.1546]
(b) Ordinarily, what
does not appear
on the face of the
written instrument
[Moles v. IAC, 1989]
EXPRESS WARRANTY DISTINGUISHED FROM FALSE
REPRESENTATION

Express Warranty False Representation

Concealment of facts
does not necessarily
amount to false
representation
When concealment of
facts comes with an
active misstatement of
fact or a partial
statement of fact such
that withholding of
that unsaid portion
makes that which is
stated absolutely false
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Express Warranty False Representation

However, buyer who
fails to inspect
condition of property
despite ample
opportunity to do so
when there is no
opposition on the part
of seller to inspect
cannot later on allege
false representation.

[Phil Mftg Co. v Go

Jucco, 1926]
Reason: buyers duty
to inspect remains
despite false
representation by the
seller; he has the duty
to exercise due
diligence.
IMPLIED WARRANTIES ART. 1547
(TODS)
(1) Implied Warranty of Title
(2) Implied Warranty against Encumbrance/NonApparent Servitudes
(3) Implied Warranty against Hidden Defects [Art.
1547]
(a) Implied warranty as to Merchantable Quality
and Fitness of Goods
(b) Implied warranty against Redhibitory Defect
in the Sale of Animals [Art. 1572]
(c) Quality and Fitness of Goods in Sale by
Sample or Description
(4) Other Warranties
IMPLIED WARRANTY OF TITLE

(1) Implied warranty arises by operation of law and

need not be stipulated in the contract of sale.
(2) Warranty of Sellers Right to Sell: Seller warrants
his right to sell at the time the ownership is to
pass.
(a) Inapplicable to a sheriff, auctioneer, mortgagee,
pledgee, or other person professing to sell by
virtue of authority in fact or law. [Art. 1547]
(3) Warranty against Eviction: seller warrants that
buyer, from the time ownership passes, shall have
and enjoy legal and peaceful possession of the
thing. Its requisites are:
(a) Buyer is deprived of the whole or a part of the
thing sold;
(b) Eviction is by final judgment
(c) Final judgment based on a right prior to the
sale or an act imputable to the vendor
(d) Seller is summoned and made co-defendant in
the suit for eviction at the instance of the
buyer. [Power Commercial and Industrial Corp.
v. CA, 1997]
IMPLIED WARRANTY AGAINST ENCUMBRANCE/NONAPPARENT
SERVITUDES

Requisites for breach:

(1) Thing sold is an immovable
(2) Burden or servitude encumbering the thing sold
is:
(a) Non-apparent to the naked eye
(b) Not mentioned in the agreement
(c) Of such nature that it must be presumed that
the buyer would not have bought it had he

been aware of it
(d) Not recorded in the Registry of Property unless
there is an express warranty that the thing is
free from all burdens and encumbrances
[Art.1560]
IMPLIED WARRANTY AGAINST HIDDEN DEFECTS

Requisites for breach:

(1) The defect renders the thing sold unfit for the use
for which it was intended OR diminishes its
fitness for such use to such an extent that had the
buyer been aware thereof, he would not have
bought it or would have paid a lower price;
(2) The defect is not patent or visible;
(3) The buyer is not an expert who, by reason of his
trade or profession, should have known the defect
(4) The seller is aware of the hidden fault or defect,
OR even if he is not aware thereof, if there is no
stipulation to the contrary [Arts.1561 &1566]
IMPLIED WARRANTY AS TO MERCHANTABLE QUALITY AND
FITNESS OF GOODS

Merchantable Quality:
(1) Where the goods are brought by description from
a seller who deals in goods of that description
[Art.1562]
(2) In a sale by sample, if the seller is a dealer in
goods of that kind and the defect is not apparent
on reasonable examination of the sample
[Art.1566]
Fitness for a particular purpose:
(1) Where the buyer expressly or impliedly makes
known to the seller the particular purpose for
which the goods are acquired AND it appears
that the buyer relied on the sellers skill or
judgment [Art.1562(1)]
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PAGE 189

IMPLIED WARRANTY AGAINST REDHIBITORY DEFECT IN THE

SALE OF ANIMALS (ART. 1572)

Redhibitory defect- a hidden defect of animals of

such nature that expert knowledge is not sufficient to
discover it, even in a case where a professional
inspection has been made
No warranty in case of [Art. 1574]:
(a) Animals sold at fairs or public auctions
(b) Livestock sold as condemned
The following sales are void [Art. 1575]:
(a) Sale of animals suffering from contagious
diseases
(b) Sale of animals unfit for the purpose for which
they are acquired as stated in the contract
Veterinarian liable if he fails to discover or disclose
the hidden defect through ignorance or bad faith [Art
1576]
Seller liable if animal dies within 3 days after its
purchase due to a disease that existed at the time of
sale. [Art 1578]
EFFECTS OF WARRANTIES

(1) Natural tendency is to induce buyer to purchase

the subject matter
(2) Buyer purchases subject matter relying thereon
(3) Seller liable for damages in case of breach
EFFECTS OF WAIVERS
Only applicable to waiver of warranty against
eviction; parties may increase or decrease warranty
against eviction but the effect depends on good/bad
faith of the seller:
(1) Seller in bad faith and there is warranty against
eviction null and void
(2) Buyer without knowledge of a particular risk and
made general renunciation of warranty not
waiver but merely limits liability of seller in case
of eviction (pay value of subject matter at the
time of eviction)
(3) Buyer with knowledge of risk of eviction assumed
its consequences and made a waiver vendor not
liable
(4) Waiver to a specific case of eviction wipes out
warranty as to that specific risk but not as to
eviction caused by other reasons
BUYERS OPTIONS IN CASE OF BREACH OF
WARRANTY ART. 1599
EXPRESS WARRANTY

(1) Prescriptive period: Period specified in express

warranty OR 4 years, if no period is specified
(following the general rule on rescission of
contracts)
(2) Remedies:
(a) Accept goods + demand diminution/
extinction of price
(b) Accept goods + damages
(c) Refuse to accept goods + damages
(d) Rescind (Refuse to accept or return or offer to
return) + recover price paid
(3) Rescission not available when buyer:
(a) Knew of breach of warranty when he accepted
the goods without protest
(b) Fails to notify the seller about election to
rescind within a reasonable period of time
(c) Fails to return or offer to return the goods to
the seller in substantially a good condition as
they were when delivered, unless deterioration
was due to breach of warranty
(4) Measure of damages: Difference between value
of goods at the time of delivery and the value they
would have had if they had answered to the
warranty
(5) Effects of rescission:
(a) Buyer no longer liable for price
i. Entitled to the return of any part of price
paid, concurrently with or immediately after
an offer to return the goods
(b) If seller refuses to accept offer to return

goods: buyer deemed as bailee for seller and

has right of lien to secure payment of part of
price paid
IMPLIED WARRANTY AGAINST EVICTION [ARTS. 1555,
1556]
Total Eviction Partial Eviction
Enforce liability for
eviction
Demand from seller:
(VICED)
(a) Value of thing sold
at time of eviction
(b) Income or fruits, if
he has been
ordered to deliver
them to the party
who won the
eviction suit
(c) Costs of eviction
suit and in a proper
case, suit against
seller for warranty
(d) Expenses of the
contract, if buyer
has paid them
(e) Damages and
Enforce liability
(demand VICED)
OR
Rescind
(a) If he would not
have bought the
thing sold without
the part lost;
(b) BUT he must
return the thing
without other
encumbrances
than those which it
had when he
acquired it
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Total Eviction Partial Eviction

interests, and
ornamental
expenses, IF sale
was made in bad
faith
(1) Rules:
(a) Buyer need not appeal from decision to hold
seller liable for eviction
(b) When adverse possession commenced before
sale, but prescription period completed after
transfer: seller is not liable
(c) If property sold for nonpayment of taxes due

and not made known to the buyer before the

sale: seller liable
(d) Judgment debtor also responsible for eviction
in judicial sales, unless it is otherwise decreed
in the judgment
(2) If there is waiver of warranty:
(a) Seller acted in bad faith: Waiver is void, seller
liable for eviction
(b) Buyer made waiver without knowledge of risks
of eviction: Seller liable only for the value of
the thing sold at time of eviction
(c) Buyer made waiver with knowledge of risks:
Seller not liable; buyer assumed the
consequences
IMPLIED WARRANTY AGAINST ENCUMBRANCES [ART.
1560]
(1) Rescission: Within 1 year from execution of deed
of sale OR
(2) Damages: Within 1 year from execution of deed of
sale or discovery of the burden or servitude
IMPLIED WARRANTY AGAINST HIDDEN DEFECTS [ARTS.
1567-1571]
(1) If thing is not lost:
(a) Withdraw from contract (accion redhibitoria) +
damages
(b) Demand a proportionate reduction of the
price (accion quanti minoris) + damages
(2) If thing is lost:
Due to hidden fault
Due to fortuitous event
or fault of buyer
If seller aware of
defect, buyer may
demand:
(a) Return of price
(b) Refund of expenses
(c) Damages
Demand:
(a) Price paid minus
value of thing
when it was lost
(b) Damages, if seller
acted in bad faith
If seller not aware of
defect:
Due to hidden fault
Due to fortuitous event
or fault of buyer
(a) Buyer may demand
price and expenses
BUT NOT damages
Prescriptive period: 6 months from delivery
IMPLIED WARRANTY AGAINST REDHIBITORY DEFECTS OF
ANIMALS

(1) Remedies

(a) Withdraw from contract + damages

(b) Demand a proportionate reduction of the
price + damages
(2) If sale is rescinded:
(a) Buyer must return animal in the condition in
which it was sold and delivered
(b) Buyer shall be liable for injury due to his
negligence.
(3) Prescriptive period: 40 days from delivery
WARRANTY IN SALE OF CONSUMER GOODS [RA 7394,
SEC.68]
If implied warranty accompanies express warranty,
both will be of equal duration.
Express Warranty Implied Warranty
(1) Demand repair
within 30 days
(a) Extendible for
causes beyond
the control of
the warrantor
(2) Demand refund of
price minus
amount directly
attributable to the
use of the
consumer prior to
the discovery of the
non-conformity
(1) Retain the goods
and recover
damages
OR
(2) Reject the goods,
cancel contract
and recover from
seller so much of
the purchase price
as has been paid +
damages

Breach of Contract

General Remedies [Art. 1191, CC]

The following remedies arise from the bilateral
nature of the contract of sale:
(1) Specific performance
(2) Rescission
General rule: Rescission of a contract will not be
permitted for a slight or casual breach, but only
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PAGE 191

for such substantial and fundamental breach as

would defeat the very object of the parties in
making the agreement. [Song Fo & Co. vs.
Hawaiian-Philippine Co., 1925]
(3) Damages
Neither party incurs in delay if the other does not

comply or is not ready to comply in a proper

manner with what is incumbent upon him [Art
1169, CC]
Prescriptive periods
(1) 10 years if based on written contract
(2) 6 years if based on oral contract
REMEDIES OF THE SELLER ARTS. 1636, 1594
(1) SALE OF MOVABLES
Extrajudicial or Self-Help Remedies- No need to
resort to the courts as long as possession of the
goods has not yet passed to the buyer
(a) Possessory lien over the goods
Right to retain possession of goods until
payment or tender of the whole price, or
unless he agrees to sell on credit [Arts. 15261529, 1503, 1535]
When available:
(1) Goods are sold without stipulation as to
credit
(2) Goods are sold on credit, but term of credit
has expired
(3) Buyer becomes INSOLVENT
When lost:
(1) Seller delivers goods to carrier or other
bailee for transmission to the buyer under
a straight or non-negotiable bill of lading
(2) Buyer/his agent lawfully obtains
possession of goods
(3) Seller waives it
(a) But it is not lost with respect to the
remainder of the goods when only
partial delivery is made (unless such is
symbolic delivery of the whole)
(b) It is not lost by the mere fact that seller
obtained a judgment for the price
When revived:
Goods are returned by the buyer in a wrongful
repudiation of the contract
(b) Right of stoppage in transitu
An extension of the lien for the price; entitles
unpaid seller to resume possession of the
goods while they are in transit before the
goods come in possession of the vendee [Arts.
1530-1532, 1535, 1636[2]]
Available when: Vendee becomes INSOLVENT
When are goods in transit?
(1) From the time of delivery to the carrier or
other bailee by the seller, for the purpose
of transmission to the buyer, until the
buyer or his agent takes such delivery from
the carrier.
(2) Even when goods have reached their
ultimate destination, if buyer rejects them
and carrier retains possession
(a) To terminate transit by delivery to a

middleman, delivery must be to keep,

not to transport.
When are goods no longer in transit?
(1) Buyer obtained delivery of the goods
before they have reached their ultimate
destination
(2) Goods have arrived at ultimate destination,
but carrier refuses to deliver
(3) Carrier enters into a new contract with the
buyer upon arrival of the goods at their
ultimate destination
How exercised?
(1)By obtaining actual possession of the
goods
(2) By giving notice of his claim to the
carrier/other bailee who has possession of
the goods
(a) Carrier must redeliver goods to seller,
or according to his instructions
(b) Carrier not obliged to redeliver until the
negotiable document of title, if any, has
been surrendered for cancellation
Sellers right to stoppage in transitu is not
affected even if buyer has sold or disposed of
the goods unless the seller has given his
assent thereto.
(c) Special right of resale
Available to unpaid seller who has a right of
lien or who has stopped the goods in transitu
[Art. 1533]
Purpose: For seller to liquidate his damages
(1) He must do so within a reasonable time
and in such manner as to obtain the best
price possible.
(2) Resale is deemed to be a fair sale if it is
undertaken in accordance with
established business practices, with no
attempt to take advantage of the original
buyer.
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(3) Resale may be in a private or public sale,

but seller cannot buy directly or indirectly.
(4) For resale to be valid, buyer need not be
notified of an intention to resell or the
time and place of the resale.
Effects:
(1) Seller is no longer liable to the original
buyer upon the contract of sale or for any
profit made by the resale
(2) Buyer at resale acquires good title as
against the original owner
(3) In case resale is at a loss, seller is entitled
to recover the difference from the original
buyer
(4) Seller may recover damages from original

buyer for breach of contract

(d) Special right to rescind:
RETURN of the title over the undelivered
goods to the seller, and right to recover
DAMAGES for breach of contract [Art. 1534]
Available to unpaid seller who has a right of
lien or who has stopped the goods in transitu
When available:
(1) Seller expressly reserved his right to
rescind in case buyer defaults
(2) Buyer has been in default in payment for
an unreasonable time
Transfer of title shall not be held to have been
rescinded by the unpaid seller until he
manifests by notice to the buyer or some other
overt act an intention to rescind.
(e) When the whole of the price has not been paid
or tendered;
(f) When a bill of exchange or other negotiable
instrument has been received as conditional
payment and the condition on which it was
received has been broken by reason of the
dishonor of the instrument, the insolvency of
the buyer, or otherwise.
RECTO LAW: SALE OF MOVABLES ON
INSTALLMENT ARTS. 1484-1486
Applies in cases of:
(1) Sale of movables in installment
(a) The rule is intended to apply to sales of
movables, the price of which is payable in 2 or
more installments, but not to straight-term
sales where the price is payable in full, after
making a down payment because the law
aims to protect improvident buyers who may
be tempted to buy beyond their means. [Levy
Hermanos vs. Gervacio, 1939]
(2) Lease of personal property with option to buy
(a) When lessor has deprived the lessee of the
possession or enjoyment of the thing (Ex.:
When lessor files a complaint for replevin
against lessee)
(b) Also applies when seller assigns his credit to
someone else
Alternative Remedies of the unpaid seller under Recto
Law
(1) Specific Performance
(2) Cancellation of sale: If vendee fails to pay 2 or
more installments
(a) When the seller cancels the sale by
repossessing the property sold, he is barred
from exacting payment for its price.
(3) Foreclosure of Chattel Mortgage: If vendee fails
to pay 2 or more installments
(a) If seller chooses this remedy, he shall have no
further action to recover any unpaid balance,

and any stipulation to the contrary shall be

void
(b) What Art 1484 (3) prohibits is further action
against the purchaser to recover any unpaid
balance of the price; and although this Court
has construed the word action to mean any
judicial or extrajudicial proceeding by virtue of
which the vendor may lawfully be enabled to
exact recovery of the supposed unsatisfied
balance of the purchase price from the
purchaser or his privy, there is no occasion at
this stage to apply the restrictive provision of
the said article because there has not yet been
a foreclosure sale resulting in a deficiency.
The payment of the sum of P1,250 of Sapinoso
was a voluntary act on his part and did not
result from a further action instituted by
Northern Motors. [Motors vs. Sapinoso, 1970]
(c) The purpose of the law is to remedy the
abuses committed in foreclosure of chattel
mortgages. It prevents mortgagees from
seizing the mortgaged property, buying it at
foreclosure sale for a low price and then
bringing the suit against the mortgagor for a
deficiency judgment. The almost invariable
result of this procedure was that the
mortgagor found himself minus the property
and still owing practically the full amount of
his original indebtedness. [Bachrach Motor
Co., Inc. v. Millan, 1935]
(d) Remedies are ALTERNATIVE, not cumulative,
i.e. exercise of one bars exercise of the others.
[Nonato vs. IAC, 1985]
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PAGE 193

(1) SALE OF IMMOVABLES

(a) PD 957, sec. 23, 24
Non-forfeiture of payments
(1) No installment payment made by the buyer
shall be forfeited in favor of the owner or
developer of the condominium or subdivision
project, after due notice, when the buyer
desists from paying due to the failure of the
developer or owner to develop the project
according to the approved plans or within the
time limit stated.
(2) Buyers Remedy: At his option, he may
reimburse the total amount paid including
amortization interest with interest thereon at
the legal rate
(3) If the buyer fails to pay the installments for
reasons other than the failure of the owner or
developer to develop the project, his rights
shall be governed by RA 6552.
(b) Maceda Law: Sale of Immovables on
Installment

RA 6552: An Act To Provide Protection for Buyers

of Real Estate on Installment Payments
DOES not apply to:
(1) Industrial lots
(2) Commercial buildings
(3) Sale to tenants under Agricultural Reform
Code [RA 3844]
Imposes ADDITIONAL REQUIREMENTS FOR A
VALID RESCISSION:
(1) If buyer has paid at least 2 years of
installments: (GRN)
(a) Grace period: 1 month per year of
installment payments made. BUT buyer
may only avail of it only once in every 5
years
(b) Refund of Cash Surrender Value (CSV):
50% of total amount paid + 5% for every
year after the 1st 5 years of installments
i. BUT not greater than 90% of total
amount paid
(c) Notice of cancellation of demand for
rescission by notarial act is effective 30
days from the buyers receipt thereof and
upon full payment of CSV
(2) If buyer has paid less than 2 years: (GN)
(a) Grace period: at least 60 days
(b) Notice of cancellation or demand for
rescission by notarial act, effective 30 days
upon receipt thereof
(3) Down payments, deposits, or options on the
contract shall be included in the total number
of installments made
(4) Seller may go to court for judicial rescission in
lieu of a notarial act of rescission
(5) During the grace period, buyer shall have the
right:
(a) To sell or assign his rights, to be evidenced
in a notarial instrument
(b) To update his account
(c) To pay in advance any installment, or the
full unpaid balance of the price, without
any interest
In the sale of immovables
(1) Rescission for Anticipatory Breach [Art. 1591]
(a) Available when seller has reasonable
grounds to fear the loss of the immovable
property sold and its price
(b) Example: Buyer destroys the building sold,
there being no security therefor, and buyer
becomes insolvent
(c) Court has no discretion to compel the
seller to wait for the expiration of the
period to pay, or to grant the buyer more
time to pay
(2) Specific Performance + Damages [Art. 1191]

(a) Seller may choose between specific

performance and rescission, with damages
in either case
(b) Court has discretion, for a just cause, to
give the buyer more time to pay even if the
seller chooses rescission
(3) Rescission + Damages [Art. 1191]
(a) If seller chose specific performance, and
such becomes impossible, he may still
avail of rescission
(b) If absolute sale, seller must make a
demand for rescission
i. Judicially, OR
ii. By a notarial act
(c) Necessary even if automatic rescission is
stipulated
(d) Effect of lack of demand: Buyer can still pay
(e) Effect of demand: Court may not grant
buyer a new term
REMEDIES OF THE BUYER
General rule: Courts will refuse to decree specific
performance with respect to chattels, because
damages are a sufficient remedy
Exception: Buyer is entitled to the specific thing
which to him has special value and which he cannot
readily obtain in the market OR where damages
would not furnish a complete and adequate remedy
[Baviera]
(1) SALE OF MOVABLE
(1) Remedy for breach of obligation to preserve
If thing is lost
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PAGE 194

(1) Without fault of seller: No breach; Obligation

is extinguished
(2) Through fault of seller (or through fortuitous
event, if seller is liable): Damages
A thing is lost when it
(1) Perishes
(2) Goes out of commerce
(3) Disappears in such a way that its existence is
unknown or it cannot be recovered
If thing deteriorates
Without fault of seller Through fault of seller
NO BREACH.
Impairment shall be
borne by buyer
Rescission + damages
OR
Specific performance +
damages
(2) Remedy for breach of obligation to deliver
Delivery of wrong quantity [Art. 1522]
Goods are less than
what was contracted
More

Reject the goods

OR
Accept and pay
(a) At contract rate if
buyer accepts
knowing that
seller wont
perform in full
(b) At fair value: If
goods were used
before knowing
that seller wont
be able to perform
in full
Reject the excess (Or
the whole, if indivisible)
OR
Accept the whole and
pay at contract rate
Art. 1464. Civil Code. In the sale of an undivided
share of a specific mass of fungible goods, if the
mass contains less than the number, weight, or
measure bought, the buyer becomes the owner of
the whole mass and the seller is bound to make
good the deficiency from goods of the same kind and
quality, UNLESS a contrary intent appears.
(2) SALE OF IMMOVABLES
Real Estate [Arts. 1539-1543]
(a) If at the rate of a certain price per unit of
measure or number:
Less (in area or quality)
than what was agreed
upon:
More
Proportional reduction Reject the excess
of price
OR
Rescission, if:
(a) Lack in area is at
least 1/10 of what is
stated, or inferior
value of thing sold
exceeds 1/10 of
price
(b) Buyer would not
have bought the
property has he
been aware of the
inferior quality or
smaller area
OR
Accept the whole and
pay at contract rate
This rule also applies to judicial sales [Art. 1541]
(b) If for a lump sum:

Everything is within
boundaries, even if less or
more than stated area
Not everything is within
boundaries
No remedy
Where both the area and
the boundaries of the
immovable are declared,
the area covered within
the boundaries of the
immovable prevails over
the stated area. (Rudolf
Lietz, Inc. v. CA, 2005)
Proportional reduction in
price
OR
Rescission
Prescriptive period: 6 months, counted from date of
delivery

Extinguishment of Sale

CAUSES ARTS. 1600, 1231

Generally, extinguished by the same causes as all
other obligations [Arts.1600, 1231]
(P-PLAN-C3-R3)
(1) Payment/performance
(2) Prescription
(3) Loss of thing due
(4) Annulment
(5) Novation
(6) Condonation/remission
(7) Confusion/merger
(8) Compensation
(9) Rescission
(10) Resolutory condition fulfilled
(11) Redemption (Conventional or Legal)
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CONVENTIONAL REDEMPTION ART. 1601

DEFINITION

(1) Vendor reserves the right to repurchase the thing

sold, with the obligation to comply with the
provisions of Article 1616 and other stipulations
which may have been agreed upon. [Art 1601,CC]
(2) Available when the seller reserves the right to
repurchase the thing sold in the same instrument
of sale as one of the stipulations of the contract
[Villarica v CA, 1968]
PERIOD

General Rule: Follow period stipulated in contract,

but should not exceed 10 years.
(1) If no period stipulated, then it shall be four years
from the execution of the contract
(2) But vendor may still exercise the right to
repurchase within thirty days from the time final

judgment was rendered in a civil action on the

basis that the contract was a true sale with right
to repurchase
BY WHOM EXERCISED

(1) Vendor
(2) His heirs, assigns or agents
(3) Creditor, if he has exhausted the property of the
vendor
(4) Co-owners of an immovable, if they sold their
interests to the same person, may only redeem
their respective shares
(a) Vendee cannot be compelled to agree to a
partial redemption
(b) If the co-owners sold their interest to the same
person who previously bought the share of a
co-owner subject to a right of redemption,
then the latter may be compelled to redeem
the whole property
FROM WHOM TO REDEEM

(1) Vendee a retro

(2) His heirs, assigns or agents
(3) Subsequent purchaser of property, even if the
right to redeem was not mentioned in the
subsequent contract; except if registered land,
where the right to redeem must be annotated on
the title
(4) If several heirs, then the right of redemption can
be exercised against each heir for his share of the
property
HOW EXERCISED

(1) By returning the ff. to the buyer: (PEN)

(a) Price of the sale;
(b) Expenses of the contract and other legitimate
payments made by reason of the sale;
(c) Necessary and useful expenses made on the
thing sold
(2) Complying with any other stipulation agreed
upon, if any.
The general rule in redemption is that it is not
sufficient that a person offering to redeem manifests
his desire to do so. The statement of intention must
be accompanied by an actual and simultaneous
tender of payment for the full amount of the
repurchase price. [BPI Family Savings Bank, Inc. v.
Veloso, 2004]
Tender of payment is enough (i.e., consignation is
not necessary), if made on time, as a basis for action
against the buyer to compel him to resell. But that
tender does not in itself relieve the buyer from his
obligation to pay the price when redemption is
allowed by the court. [Paez v. Magno, 1949]
EFFECT OF REDEMPTION

(1) The seller shall receive the thing free from all
charges or mortgages constituted by the buyer
BUT he shall respect leases executed by the
buyer in good faith and in accordance with local

custom.
(2) If there are growing fruits at the time of sale and at
the time of redemption: no reimbursement or
prorating if the buyer did not pay indemnity at the
time of sale
(3) If there were no growing fruits at the time of sale,
but some exist at the time of redemption: fruits
prorated (buyer entitled to part corresponding to
time he possessed the land in the last year,
counted from the anniversary of the date of sale)
EFFECT OF NON-REDEMPTION
Ownership is consolidated in the buyer BUT the
consolidation shall not be recorded in the Registry of
property without a judicial order, after the vendor has
been duly heard.
RIGHT TO REDEEM VS. OPTION TO PURCHASE (VILLANUEVA)
Right to Redeem Option to Purchase
Not a separate contract
but part of a main
contract of sale, and
cannot exist unless
reserved at the time of
the perfection of the
main contract of sale
Generally a principal
contract and may be
created independent of
another contract
Does not need its
separate consideration
to be valid and effective
Must have a
consideration separate
and distinct from the
purchase price to be
valid and effective [Arts.
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Right to Redeem Option to Purchase

1324 and 1479]
The maximum period for
the exercise of the right
to repurchase cannot
exceed 10 years
The period of the option
contract may be beyond
the 10-year period
Requires in addition a
tender of payment of the
amount required by law,
including consignment
thereof if tender of
payment cannot be
made effectively on the
buyer
May be exercised by

notice of its exercise to

the offeror
EQUITABLE MORTGAGE ARTS. 1602-1604
Definition: An equitable mortgage is defined as one
which, although lacking in some formality, or form or
words, or other requisites demanded by a statute,
nevertheless reveals the intention of the parties to
charge real property as security for a debt, and
contains nothing impossible or contrary to law.
[Molina v. CA, 2003]
The Valdehuezas having remained in possession of
the land and the realty taxes having been paid by
them, the contracts which purported to be pacto de
retro transactions are presumed to be equitable
mortgages, whether registered or not, there being no
third parties involved. [Tan v. Valdehueza, 2003]
A pactum commissorium is a stipulation enabling the
mortgagee to acquire ownership of the mortgaged
properties without need of foreclosure proceedings
which is a nullity being contrary to the provisions of
Article 2088 of the Civil Code. The inclusion of such
stipulation in the deed shows the intention to
mortgage rather than to sell. [Legaspi v. Spouses
Ong, 2005]
A pactum commissorium is contrary to the nature of
a true pacto de retro sale since ownership of the
property sold is immediately transferred to the
vendee a retro upon execution of the sale, subject
only to the repurchase of a vendor a retro within the
stipulated period.
DISTINGUISHED FROM OPTION TO BUY ART.

1602

PRESUMPTION THAT A CONTRACT IS AN EQUITABLE

MORTGAGE ARISES WHEN (5P-R) ART. 1602

(1) Price unusually inadequate;

(2) Possession retained by the seller as lessee or
otherwise;
(3) Period of redemption extended (or granted anew)
upon or after the expiration of the right to
repurchase;
(4) Part of the purchase price retained by the seller;
(5) Payment of taxes on the thing sold borne by the
seller;
(6) Any other case where it may be fairly inferred that
the Real intention of the parties is for the
transaction to secure a debt or other obligation.
FOR THE PRESUMPTION OF AN EQUITABLE MORTGAGE TO
ARISE UNDER ART. 1602, 2 REQUISITES MUST CONCUR
(MOLINA V. CA, 2003)

(1) That the parties entered into a contract

denominated as a contract of sale, and
(2) That their intention was to secure an existing
debt by way of a mortgage.
In case of doubt, a contract purporting to be a sale
with right to repurchase shall be construed as an

equitable mortgage [Art. 1603]

RATIONALE BEHIND PROVISION ON EQUITABLE MORTGAGE

(1) Circumvention of usury law

(2) Circumvention of prohibition against pactum
commissorium creditor cannot appropriate the
things given by way of pledge or mortgage since
remedy is foreclosure.
REMEDIES OF APPARENT VENDOR

(1) If the instrument does not reflect the true

agreement: remedy is reformation
(2) If decreed to be an equitable mortgage: any
money, fruits or other benefit to be received by
the buyer as rent or otherwise considered as
interest.
(3) If decreed as a true sale with right to purchase:
seller may redeem within 30 days from finality of
judgment, even if the period for redemption has
expired.
PERIOD OF REDEMPTION ART. 1606
Art. 1606. The right referred to in Article 1601, in the
absence of an express agreement, shall last four
years from the date of the contract.
Should there be an agreement, the period cannot
exceed ten years.
However, the vendor may still exercise the right to
repurchase within thirty days from the time final
judgment was rendered in a civil action on the basis
that the contract was a true sale with right to
repurchase.
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PAGE 197

Period of Redemption
(a) No stipulation: 4 years from the date of contract
(b) When there is agreement: Period not to exceed
10 years
(c) General Rule: Period starts to run from the date
of the execution of the contract
(d) Exception: When the efficacy of the sale is
subject to a suspensive condition, period
should be counted not from the date appearing
on the instrument, but from the date when the
condition is fulfilled, marking the
consummation of the sale [Tolentino citing
Manresa].
Additional 30 days for Repurchase
The last paragraph of Art. 1606 giving the vendor the
right to repurchase within 30 days from the time of
the rendition of final judgment applies only where
the nature and the character of the transaction,
whether as a pacto de retro or an equitable
mortgage, was put in issue before the court
[Gonzales v. De Leon, 4 SCRA 332].
EXERCISE OF THE RIGHT TO REDEEM ART.

1616
The seller can avail himself of the right of repurchase
by returning to the buyer:

(a) the price of the sale

(b) the expenses of the contract and any other
legitimate payments made by reason of the
sale
(c) the necessary and useful expenses made on
the thing sold [Art.1616].
How redemption is exercised
(a) The vendor de retro must complete the
repurchase before the expiration of the
redemption period [Panganiban v. Cuevas, 7
Phil 477].
(b) A sincere or genuine tender of payment is
enough. The deposit of the amount of the
repurchase money with the Clerk of Court was
simply and additional security [Legazpi v. Court
of Appeals, 1986]
(c) When tender of payment cannot be validly
made because the buyer cannot be located, it
becomes imperative for the seller a retro to file
a suit for consignation with the courts of the
redemption price [Catangcatang v. Legayada,
1978].
(d) If the offer or tender of payment for repurchase
is refused, it is not necessary for the vendor a
retro to consign in court or make judicial
deposit of the repurchase price [Rosales v.
Reyes, 25 Phil 495].
LEGAL REDEMPTION ART. 1619
DEFINITION

(1) Right to be subrogated:

(a) upon the same terms and conditions
stipulated in the contract,
(b) in the place of one who acquires a thing by
purchase or dation in payment, or by any other
transaction whereby ownership is transmitted
by onerous title [Art 1619, CC]
(2) Applies to transfers of ownership by onerous title
where subrogation is possible. Hence, it cannot
apply to barter or to transfer by gratuitous title or
hereditary succession.
(3) Applies to sales with pacto de retro [Baviera citing
MANRESA]
MANNER

(1) a formal offer to redeem or

(2) filing of an action in court together with the
consignation of the redemption price within the
reglementary period
PERIOD TO REDEEM

To whom granted Period

(a) Co-owner [Art 1620]
(b) Adjoining owner of
Rural Land [Art 1621]
(c) Adjoining owner of
urban land [Art. 1622]
30 days from notice
(a) In writing

(b) By the seller

(c) Of the actual
execution and
delivery of the deed
of sale
Actual knowledge of the
sale is immaterial ,
absent any showing that
the co-owner has been
shown a copy of the
deed of sale through a
written communication.
[Doromal v. CA, 1975]
The law did not provide
for a particular mode of
written notice, thus any
compliance with written
notice should suffice,
including the giving of a
copy of the deed of sale.
[Conejero v. CA, 1966]
Debtor in case a credit or
incorporeal right in
litigation is sold
[Art.1634]
30 days from the date
the assignee demands
payment from debtor
Taxpayer in case of tax
sale [Sec. 215, NIRC]
1 year from date of
forfeiture
Judgment debtor, 1 year from the date of
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To whom granted Period

successorin- interest, or
creditor with subsequent
lien, in case of execution
sale [Rule 39, Sec.27,
ROC]
registration of the
certificate of sale
Debtor-mortgagor,
successors-in- interest,
judicial/judgment
creditor, any person
having a lien on the
property, in case of
extrajudicial foreclosure
of mortgage [Act No.
3135. Sec. 6.]
1 year from the date of
the sale
Debtor-mortgagor in
case of judicial

foreclosure of real estate

mortgage IF the
mortgagee is a bank or a
banking institution. [The
General Banking Law of
2000]
90 days from finality of
judgment
Agricultural lessee w/o
knowledge of sale of
landholding [Agrarian
Land
Reform Code, Sec.12]
2 years from the
registration of the sale
INSTANCES OF LEGAL REDEMPTION

(1) Redemption by Co-owners [Art. 1621]

A co-owner of a thing may exercise the right of
redemption in case the shares of all the coowners
or any of them are sold to a third person
(a) Third person refers to all persons who are
not heirs of the vendor, by will or intestate
succession
(b) The right is available not only to original coowners,
but to those who had later acquired
the share of the co-owner
(c) But the right of redemption may be exercised
by a co-owner only when part of the
community property is sold to a stranger.
When the portion is sold to another co-owner,
the right does not arise because a new
participant is not added to the co-ownership
[Fernandez v. Tarun, 2002]
If the price of the alienation is grossly excessive,
the redemptioner shall pay only a reasonable
one.
Should two or more co-owners desire to exercise
the right, they may also do so in proportion to the
share they may respectively have in the thing
owned in common.
Rationale: Public Policy, since co-ownership is a
hindrance to the development and administration
of the property. [Baviera]
(2) Redemption by Adjoining Land-owners of rural
land [Art. 1621]
The ff. Requisites must concur:
(a) A piece of rural land is alienated
(b) Area does not exceed one hectare
When not applicable:
(a) The grantee does not own any rural land
(b) Adjacent lands are separated by brooks,
drains, roads and other apparent servitudes
for the benefit of other estates
Order of preference if two or more wishes to
exercise the right:

(a) Owner with smaller land area

(b) If same land area, then the one who first
requested the redemption
What constitutes rural or urban is to be
determined from the character of the community
or vicinity in which it is found, and NOT from the
nature of the land itself nor the purpose to which
it is devoted. [Ortega v. Orcine, 1971]
(3) Redemption by adjoining land-owners of urban
land (applies only to small portions of urban land)
[Art. 1621]
Right of Pre-emption Right of Redemption
Owner of any adjoining
land has a right of preemption
at a reasonable
price when:
(a) Urban land is so
small and so situated
that a major portion
of it cannot be used
for any practical
purpose w/in a
reasonable time;
(b) Was bought merely
for speculation;
(c) Was resold
If the resale has been
perfected, the owner of
the adjoining land shall
have a right of
redemption, also at a
reasonable price
Priority if 2 or more
adjoining owners want to
redeem: owner whose
intended use of the land
appears to be best
justified
Arises before sale Arises after sale
No rescission because no
sale exists yet
There can be rescission
of the original sale
The action is directed
against prospective
seller
Action is directed against
buyer
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(4) Redemption of Credit

Available when it is sold while in litigation (From
the time the complaint is answered)
NOT available when the assignment is in favor of:
(a) Co-heir/co-owner of right assigned
(b) Creditor in payment of his credit

(c) Possessor of a tenement or piece of land

which is subject to the right assigned
How exercised: reimburse the assignee for the:
(a) Price paid
(b) Judicial expenses incurred
(c) Interest on the price from date of payment
(5) Under the Public Land Act
Coverage:
(a) Every conveyance of land acquired under a
free patent or homestead
(b) The ownership of the land must have been
transferred to another. If the transaction is a
mere promise to sell, there is no right yet to
redeem
(c) This refers to conveyances made after the
prohibited 5 years from the issuance of the
patent or grant
Period:
(a) Within 5 years from the date of conveyance
(b) If pacto de retro sale, the period to redeem
cannot be less than 5 years
Who may redeem:
(a) General Rule: Applicant, widow, or heirs
(b) Exception: land is sold to another member of
the family of the applicant, or his direct
descendant or heir
(c) From whom: Subsequent purchasers
(6) Redemption in Foreclosure and Execution Sales
Who may redeem
In extra judicial
foreclosure
(a) Debtor
(b) Successor in interest
(c) Judicial or judgment
creditor of said
debtor
(d) - Junior
encumbrancer
In execution sales
(a) Judgment debtor
(b) Successor in interest
(c) Creditor having a lien
on the property sold
by attachment,
judgment or
mortgage on the
property subsequent
to the judgment
Period to redeem
Extra judicial
foreclosure
Execution sale
(a) within 12
If land is
mortgaged in

Who may redeem

(a) within 1 year
from the
date of the
sale
months
after the
sale
favor of a bank
(a) within 1 year
after the
sale (not
available in
case of a
corporate
mortgagor)
Amount of redemption
(a) Amount of the purchase
(b) Interest at 1% per month from the time of the sale
up to the time of redemption
(c) Any assessment or taxes which the purchaser
may have paid
(7) Under the Agrarian Land Reform Code
Lessees right of pre-emption
(a) The agricultural lessee shall have the
preferential right to buy under the same
reasonable terms and conditions, in case the
lessor decides to hold the landholding
(b) Conditions:
i. The landholding must be pre-empted by
the DAR
ii. When two or more lessees, each shall have
preferential right only to the extent of the
area cultivated by him
(c) Period: 180 days from notice in writing
Lessees right of redemption
(a) Sec. 12 RA 3844: In case landholding is sold to
3rd person without the knowledge of the
lessee, the latter shall have the right to
redeem the same at a reasonable price and
consideration
(b) Period: within 180 days from notice in writing
AGE REDEMPTION ART. 1619
Art. 1619. Legal redemption is the right to be
subrogated, upon the same terms and conditions
stipulated in the contract, in the place of one who
acquires a thing by purchase or dation in payment, or
by any other transaction whereby ownership is
transmitted by onerous title.
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The Law on Sale of

Subdivision and

Condominium (PD 957)

DEFINITIONS
DEFINITION OF "SALE" OR "SELL"
(a) include every disposition, or attempt to dispose,
for a valuable consideration, of a subdivision lot,
including the building and other improvements
thereof, if any, in a subdivision project or a
condominium unit in a condominium project.
(b) also include a contract to sell, a contract of
purchase and sale, an exchange, an attempt to
sell, an option of sale or purchase, a solicitation of
a sale, or an offer to sell, directly or by an agent,
or by a circular, letter, advertisement or
otherwise.
(c) privilege given to a member of a cooperative,
corporation, partnership, or any association
and/or the issuance of a certificate or receipt
evidencing or giving the right of participation in,
or right to, any land in consideration of payment
of the membership fee or dues, shall be deemed
a sale within the meaning of this definition.
DEFINITION OF "BUY" OR "PURCHASE"
(a) include any contract to buy, purchase, or
otherwise acquire for a valuable consideration a
subdivision lot, including the building and other
improvements, if any, in a subdivision project or a
condominium unit in a condominium project.
"Owner" shall refer to the registered owner of the
land subject of a subdivision or a condominium
project.
"Developer" shall mean the person who develops or
improves the subdivision project or condominium
project for and in behalf of the owner thereof.
"Dealer" shall mean any person directly engaged as
principal in the business of buying, selling or
exchanging real estate whether on a full-time or
part-time basis.
"Broker" shall mean any person who, for commission
or other compensation, undertakes to sell or
negotiate the sale of a real estate belonging to
another.
"Salesman" shall refer to the person regularly
employed by a broker to perform, for and in his
behalf, any or all functions of a real estate broker.
REQUIREMENTS FOR OWNERS AND DEVELOPERS
(1) Registration of projects
(subdivision/condominium) with the NHA
(2) Registration of the owner
(3) License to sell of owner or dealer with
performance bond [PB, exceptions in Section 7]
Registration of projects [Section 4, PD 957]
The registered owner of a parcel of land who wishes
to convert the same into a subdivision project shall
submit his subdivision plan to the National Housing

Authority. The same procedure shall be followed in

the case of a plan for a condominium project except
that NHA also approves the building thereon in
accordance with the National Building Code.
Registration of owner [Section 4, PD 957]
The owner or the real estate dealer interested in the
sale of lots or units, respectively, in such subdivision
project or condominium project shall register the
project with the Authority by filing therewith a sworn
registration statement.
Publication and issuance of registration certificate
[Section 4, PD 957]
A notice of the filing of the registration statement at
the expense of the applicant-owner or dealer, in two
newspapers general circulation, one published in
English and another in Pilipino, once a week for two
consecutive weeks. Notice shall state that
subdivision lots or condominium units are open to
inspection during business hours by interested
parties. The project shall be deemed registered upon
completion of the publication requirement. The fact
of registration shall be evidenced by a registration
certificate issued to the applicant-owner or dealer.
License to sell [Section 5, PD 957]
The registration certificate does NOT authorize the
owner or dealer to sell any unit. They must first
obtain a license to sell within two weeks from the
registration of the project. The license to sell is
issued upon examination of the registration
statement filed by the owner or dealer showing that:
(1) the owner or dealer is of good repute
(2) that his business is financially stable
(3) that the proposed sale of subdivision lots or
condominium units to the public would not be
fraudulent
Performance bond [Section 6, PD 957]
A license to sell can only be issued by the NHA if the
owner or dealer files a performance bond
guaranteeing the construction and maintenance of
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the roads, gutters, drainage, sewerage, water system,

lighting systems, and full development of the
subdivision project or the condominium project and
the compliance by the owner or dealer with the
applicable laws and rules and regulations. The bond
shall be executed in favor of the Republic of the
Philippines and shall authorize the Authority to use
the proceeds thereof for the purposes of its
undertaking in case of forfeiture as provided in this
Decree.
When license to sell and performance bond not
required [Section 7, PD 957]
A license to sell and performance bond shall not be
required in any of the following transactions:
(a) Sale of a subdivision lot resulting from the

partition of land among co-owners and co-heirs.

(b) Sale or transfer of a subdivision lot by the original
purchaser thereof and any subsequent sale of the
same lot.
(c) Sale of a subdivision lot or a condominium unit by
or for the account of a mortgagee in the ordinary
course of business when necessary to liquidate a
bona fide debt.
Grounds for suspension of license to sell [Section 8,
PD 957]
(1) misleading, incorrect, inadequate, or incomplete
information in registration statement
(2) fraud upon prospective buyers on the sale or
offering for a sale
Note: suspension is confidential unless orer of
suspension has been violated.
Grounds for revocation of registration certificate and
license to sell [Section 9, PD 957]
(1) Insolvency of owner/dealer
(2) Violation of owner of PD 957 or its IRR or any
undertaking of his/its performance bond
(3) Has been or is engaged or is about to engage in
fraudulent transactions
(4) Misrepresentation in any prospectus, brochure,
circular or other literature about the subdivision
project or condominium project that has been
distributed to prospective buyers
(5) Bad business repute of owner/dealer
(6) Does not conduct his business in accordance with
law or sound business principles
Requirement for Dealers, Brokers, and Salesmen
(DBS)
Registration
Dealers, brokers, and salesmen (DBS) must be
registered (Section 11, PD 957)
Requisites of registration:
(1) Good reputation and compliance with NHA rules
(2) Payment of prescribed fee
(3) Filing of bond or other security (amount fixed by
NHA) conditioned upon his faithful compliance
with provisions of PD 957
When registration of DBS terminates
(1) Termination of employment with dealer or broker
(2) Expiration (31st day of Dec each year)
Registration of DBS may be renewed not less than
30 nor more than 60 days before Jan 1 and by
payment of fee. If renewal is not within said period, it
shall be treated as an original application.
Revocation of registration as DBS [Section 12, PD 957]
Grounds
(1) Has violated any provision of this Decree or any
rule or regulation made hereunder; or
(2) Has made a material false statement in his
application for registration; or
(3) Has been guilty of a fraudulent act in connection

with any sale of a subdivision lot or condominium

unit; or
(4) Has demonstrated his unworthiness to transact
the business of dealer, broker, or salesman, as
the case may be.
The NHA may suspend the DBS' registration pending
hearing of the case. The suspension or revocation of
the registration of a dealer or broker (DB) shall carry
with it all the suspension or revocation of the
registration of all his salesmen (S).
Characteristics of sale of a condominium or
subdivision unit and similar contracts
(1) Contracts to sell, deeds of sale, and other similar
instruments must be registered with the Register
of Deeds
(2) Mortgages on unit or lot by owner/developer
needs prior written approval by NHA for the
protection of buyers
(3) Advertisements by owner of developer become
part of sales warranties enforceable against
owner or developer
(4) No forfeiture of installments already paid by
buyer if buyer stops paying because of failure by
owner or developer to develop subdivision or
condominium
(5) Failure to pay installments governed by Maceda
Law [RA 6552]
(6) Title is issued to the buyer upon full payment
(7) Realty tax is paid by owner or developer while not
fully paid; but if the buyer occupies the unit/lot,
the owner/developer may recover the taxes from
the buyer
(8) Owner or developer cannot demand any other
charges allegedly for community benefit (may be
done by homeowner's association)
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Registration of sale, etc [Section 17, PD 957]

All contracts to sell, deeds of sale and other similar
instruments relative to the sale or conveyance of the
subdivision lots and condominium units, whether or
not the purchase price is paid in full, shall be
registered by the seller in the Office of the Register
of Deeds of the province or city where the property is
situated.
Mortgages on unit or lot by owner or developer
[Section 18, PD 957]
(a) Need prior written approval of the NHA
(b) Must show that proceeds of mortgage will be
used for development of the condominium or
subdivision
(c) Value of each lot or unit determined by the buyer
(if there is one) and the buyer shall be notified
before release of loan
(d) Buyer may pay directly to mortgagee
Advertisements by the owner or developer [Section 19,

PD 957]
(a) Must reflect real facts, must not mislead or
deceive public
(b) Owner or developer shall be liable for any
misrepresentation as to facilities, etc.
(c) Advertisements shall form part of the sales
warranties enforceable against the owner or
developer
(d) Failure to comply with sales warranties is
punishable under PD 957
Non-forfeiture of payments (Section 23, PD 957)
No installment payment made by a buyer in a
subdivision or condominium project for the lot or unit
he contracted to buy shall be forfeited in favor of the
owner or developer when the buyer, after due notice
to the owner or developer, desists from further
payment due to the failure of the owner or developer
to develop the subdivision or condominium project
according to the approved plans and within the time
limit for complying with the same. Such buyer may,
at his option, be reimbursed the total amount paid
including amortization interests but excluding
delinquency interests, with interest thereon at the
legal rate.
Failure to pay installments [Section 24, PD 957]
The rights of the buyer in the event of this failure to
pay the installments due for reasons other than the
failure of the owner or developer to develop the
project shall be governed by Republic Act No. 6552
[Maceda Law].
Issuance of title [Section 25, PD 957]
The owner or developer shall deliver the title of the
lot or unit to the buyer upon full payment of the lot
or unit. No fee, except those required for the
registration of the deed of sale in the Registry of
Deeds, shall be collected for the issuance of such
title. In the event a mortgage over the lot or unit is
outstanding at the time of the issuance of the title to
the buyer, the owner or developer shall redeem the
mortgage or the corresponding portion thereof
within six months from such issuance in order that
the title over any fully paid lot or unit may be secured
and delivered to the buyer in accordance herewith.
Realty tax [Section 26, PD 957]
Real estate tax and assessment on a lot or unit shall
de paid by the owner or developer without recourse
to the buyer for as long as the title has not passed
the buyer; Provided, however, that if the buyer has
actually taken possession of and occupied the lot or
unit, he shall be liable to the owner or developer for
such tax and assessment effective the year following
such taking of possession and occupancy.
No other charges [Section 27, PD 957]
No owner or developer shall levy upon any lot or
buyer a fee for an alleged community benefit. Fees to

finance services for common comfort, security and

sanitation may be collected only by a properly
organized homeowners association and only with the
consent of a majority of the lot or unit buyers actually
residing in the subdivision or condominium project.

The Condominium Act (RA

4726)
DEFINITION OF A CONDOMINIUM
Sec. 2. A condominium is an interest in real property
consisting of separate interest in a unit in a
residential, industrial or commercial building and an
undivided interest in common, directly or indirectly,
in the land on which it is located and in other
common areas of the building. A condominium may
include, in addition, a separate interest in other
portions of such real property. Title to the common
areas, including the land, or the appurtenant
interests in such areas, may be held by a corporation
specially formed for the purpose (hereinafter known
as the "condominium corporation") in which the
holders of separate interest shall automatically be
members or shareholders, to the exclusion of others,
in proportion to the appurtenant interest of their
respective units in the common areas.
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(a) separate interest in a unit in a residential,

industrial or commercial building
(b) undivided interest in the land on which the
building is located and other common areas
i. common areas may not be partitioned even by
judicial decree [Section 7]
(c) title to land and common areas held by
condominium corporation - owners of separate
interest are automatically
members/shareholders, exclusively.
OTHER DEFINITIONS
Sec. 3. As used in this Act, unless the context
otherwise requires:
(a) "Condominium" means a condominium as
defined in Section 2.
(b) "Unit" means a part of the condominium
project intended for any type of independent use
or ownership, including one or more rooms or
spaces located in one or more floors (or part or
parts of floors) in a building or buildings and such
accessories as may be appended thereto.
(c) "Project" means the entire parcel of real property
divided or to be divided in condominiums,
including all structures thereon,
(d) "Common areas" means the entire project
excepting all units separately granted or held or
reserved.
(e) "To divide" real property means to divide the

ownership thereof or other interest therein by

conveying one or more condominiums therein but
less than the whole thereof.
TRANSFERS OR CONVEYANCES OF A UNIT OR
AN APARTMENT, OFFICE OR STORE, OR OTHER
SPACE THEREIN [SECTION 5, RA 4726]
(a) Transfer or conveyance of a unit or a space therein
includes the transfer or conveyance of the
i. undivided interests in common areas
ii. membership or shareholding in the
condominium corporation
(b) Proviso: only Filipino citizens or corporations at
least 60% of the capital stock are owned by
Filipino citizens may be the transferee of common
areas in cases where the common areas are owned
by the owners of separate units as co-owners (not
by condominium corporation)
(c) Exception to proviso: hereditary succession
RIGHTS OF A CONDOMINIUM UNIT OWNER
(ASIDE FROM RIGHTS ARISING FROM
OWNERSHIP) [SECTION 6]
(1) Absolute right to sell or dispose of his
condominium unless the master deed unless
there is a right of first refusal in favor of
condominium owners
(2) Exclusive right to mortgage, pledge or encumber
his condominium and to have the same appraised
independently of the other condominiums but
any obligation incurred by such condominium
owner is personal to him
PARTITION BY SALE [SECTION 8]
This is an action that may be brought by one or more
persons owning condominiums in a condominium
project for the partition of the project by the sale
thereof. The effect is as if the owners of all the
condominiums in such project were co-owners of the
entire project in the same proportion as their
interests as their interests in the common areas.
A partition by sale can only be done upon showing
any of the following:
(1) That three years after damage or destruction to
the project which renders material part thereof
unfit for its use prior thereto, the project has not
been rebuilt or repaired substantially to its state
prior to its damage or destruction
(2) That damage or destruction to the project has
rendered one-half or more of the units therein
untenantable and that condominium owners
holding in aggregate more than thirty percent
interest in the common areas are opposed to
repair or restoration of the project
(3) That the project has been in existence in excess of
fifty years, that it is obsolete and uneconomic,
and that condominium owners holding in
aggregate more than fifty percent interest in the

common areas are opposed to repair or

restoration or remodeling or modernizing of the
project
(4) That the project or a material part thereof has
been condemned or expropriated and that the
project is no longer viable, or that the
condominium owners holding in aggregate more
than seventy percent interest in the common
areas are opposed to continuation of the
condominium regime after expropriation or
condemnation of a material portion thereof
(5) That the conditions for such partition by sale set
forth in the declaration of restrictions, duly
registered in accordance with the terms of the
Condominium Act, have been met
DECLARATION OF RESTRICTIONS BY OWNER OF
PROJECT - PRECONDITION TO CONVEYANCE
[SECTION 9]
(a) The owner must register with the Register of
Deeds a declaration of restrictions before the
conveyance of any condominium in the project
(b) The restrictions constitute a lien upon each
condominium in the project and shall insure to
and bind all condominium owners in the project
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(c) The lien may be enforced by any condominium

owner or by the management body of the project
ASSESSMENT IN ACCORDANCE WITH
DECLARATION OF RESTRICTIONS [SECTION 20]
This is the "tax imposition power" of the
condominium corporation. If unpaid, the
management body may cause a notice of
assessment to be registered with the Register of
Deeds, which may be released only upon payment of
the assessed fees. This lien is superior to all other
subsequent liens except real property taxes liens and
other liens provided for in the declaration of
restrictions.
HOW LIEN ENFORCED AFTER NON-PAYMENT
OF ASSESSED FEES [SECTION 20]
Judicial or extra-judicial foreclosure of real property
mortgages, where the management body may bid
unless disallowed by the declaration of restrictions.
CONTENTS OF A DECLARATION OF
RESTRICTIONS [SECTION 9]
(1) Provisions for the management of the project by
any of the ff bodies:
(a) Condominium corporation
(b) Association of condominium owners
(c) Board of governors elected by condominium
owners
(d) Management agent elected by the owners or
by the board named in the declaration
(2) Provisions for voting majorities quorums, notices,
meeting date, and other rules governing such

body or bodies
(3) Powers of the management body
(4) Maintenance of insurance policies (fire, casualty,
workmen's compensation, etc)
(5) Maintenance, utility, gardening and other services
for the common areas
(6) Amendment of the restrictions
(7) Reasonable assessment to meet expenditures
(8) And many other provisions - the common thread
is the management and maintenance of the
common areas and the manner of exercise of the
management body's powers
INVOLUNTARY DISSOLUTION OF THE
CONDOMINIUM CORPORATION [SECTION 12]
In case of involuntary dissolution, the common areas
held by the corporation shall be transferred proindiviso
and in proportion to their interest to the
members/stockholders of the corporation, subject to
the rights of creditors of the corporation. The
common areas remain in undivided co-ownership.
POWER OF ATTORNEY HELD BY CORPORATION
IN CASE OF VOLUNTARY DISSOLUTION OF
CONDOMINIUM CORPORATION [SECTION 15]
The condominium corporation is deemed to hold a
power of attorney from all members/stockholders to
sell and dispose of their separate interests in the
project. To liquidate, the condominium corporation
will sell the entire project as if it owned the whole
project itself, subject to the corporate and individual
condominium creditors.
SALE, EXCHANGE, LEASE, OR DISPOSITION BY
CORPORATION OF THE COMMON AREAS
[SECTION 16]
Generally not allowed unless authorized by
affirmative vote of all of the stockholders/members.
STOCKHOLDER/MEMBER DEMANDING
PAYMENT FOR SHARES OR INTEREST AKA
APPRAISAL RIGHT [SECTION 17]
By-laws of the condominium corporation shall
provide that any shareholder/member demanding
payment for his share or interest must also consent to
sell his separate interest in the project to the
corporation or any buyer of the corporation's choice.
REQUIREMENTS FOR REGISTRATION OF
CONVEYANCE WITH THE REGISTER OF DEEDS
[SECTION 18]
(1) Certificate of the management body of the
project that the conveyance is in accordance with
the declaration of restrictions
REALTY TAX ON CONDOMINIUMS [SECTION 25]
Each condominium separately owned shall be
separately assessed, for purposes of real property
taxation and other tax purposes to the owners
thereof and the tax on each such condominium shall
constitute a lien solely thereon.

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General Provisions

DEFINITION & TRANSMISSION

Succession - a mode of acquisition by virtue of which
the property, rights and obligations to the extent of
the value of the inheritance, of a person are
transmitted through his death to another or others
either by his will or by operation of law. [Art 774, CC]
Decedent - person whose property is transmitted
through succession, whether or not he left a will. [Art
775, CC]
Testator a decedent who left a will [Art 775, CC]
Inheritance includes:
(a) All the property, rights and obligations of a
person which are not extinguished by his death
[Art 776, CC]
(b) Not only the property and the transmissible rights
and obligations existing at the time of his death,
but also those which have accrued thereto since
the opening of the succession [Art 781, CC]
What are transmitted?
(a) Rights and obligations which are not strictly
personal (intuit personae) [Balane, 2010]
(b) Money debts of the decedent are not transmitted
to the heirs nor paid by them. The estate pays
them. [Balane, 2010]
General Rule: All property rights which have accrued
to the hereditary estate since the opening of
succession are transmitted to the heirs
Exception: Property acquired after the making of a
will shall not pass to the heirs unless it should
expressly appear in the will that such was the
intention of the testator. [Art 793, CC]
SUCCESSION OCCURS AT THE MOMENT OF
DEATH
General Rule: The rights to succession are
transmitted from the moment of the death of the
decedent. [Art 777, CC]
Exception: A person may be presumed dead for the
purpose of opening his succession. In this case,
succession is only of provisional character because
there is always a chance that the absentee may still
be alive. [Arts. 390-391, CC].
KINDS
KINDS OF SUCCESSION

(1) Testamentary that which results from the

designation of an heir, made in a will executed in
the form prescribed by law. [Art. 779, CC]
(2) Legal or Intestate that which takes place by
operation of law in the absence of a valid will.
(3) Mixed that which is effected partly by will and
partly by operation of law. [Art. 780, CC]
(4) Compulsory succession to the legitime and

prevails over all other kinds of succession [Balane,

2010]
KINDS OF SUCCESSORS

(1) Heirs those who are called to the whole or an

aliquot portion of the inheritance either by will or
by operation of law [Art 782, CC]
(2) Devisees persons to whom gifts of real property
are given by virtue of a will
(3) Legatees persons to whom gifts of personal
property are given by virtue of a will
Note: The distinction is significant in case of
preterition and imperfect disinheritance
KINDS OF HEIRS

(1) Compulsory Heirs those who succeed by force of

law to some portion of the inheritance, in an
amount predetermined by law known as the
legitime, of which they cannot be deprived by the
testator, except by a valid disinheritance. They
succeed regardless of a will.
(2) Voluntary or Testamentary Heirs those who are
instituted by the testator in his will, to succeed to
the portion of the inheritance of which the
testator can freely dispose. They succeed by
reason of a will.
(3) Legal or Intestate Heirs those who succeed to
the estate of the decedent who dies without a
valid will, or to the portion of such estate not
disposed of by will, or when certain grounds are
met

Testamentary Succession
WILLS

IN GENERAL

Will - 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. [Art 783, CC]
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Kinds of Wills
(5) Notarial an ordinary or attested will, which must
comply with the requirements of the law [Articles
804-808, CC]
(6) Holographic a will entirely written, dated and
signed by the hand of the testator [Art. 810, CC]
Characteristics of Wills
(1) Purely personal will-making is non-delegable
(a) making of a will cannot be left in whole or in
part of the discretion of a third person, or
accomplished through the instrumentality of
an agent or attorney [Art 784, CC]
(b) testator may not make a testamentary
disposition in such manner that another
person has to determine whether or not it is to
be operative [Art 787, CC]
What cannot be
delegated to 3rd persons

What may be entrusted to

3rd persons
(a) designation of heirs,
devisees and
legatees
(b) duration/efficacy of
designation
(c) determination of
portions, when
referred to by name
[Art 785, CC]
(a) designation of
person/institution
falling under a class
specified by testator
(b) manner of
distribution of
property specified by
testator [Art 786, CC]
Note: testator must first
specify the class and the
amount of property for
proper delegation
(2) Free and intelligent [Art 839, CC]
(3) Solemn and formal - if the form is defective, the
will is void
(4) Revocable and ambulatory will can be revoked
at any time before the testators death [Art 828,
CC]
(5) Mortis causa - takes effect upon the testators
death
(6) Individual prohibition against joint wills [Art.
818, CC]
(7) Executed with animus testandi intent to dispose
of the property
(8) Executed with testamentary capacity
(9) Unilateral act - does not involve an exchange of
values or depend on simultaneous offer and
acceptance
(10) Dispositive disposes of property
General Rule: Wills contain disposition of the
testators estate mortis causa.
Exceptions: (non-dispositive wills)
(a) will recognizing an illegitimate child
(b) will disinheriting a compulsory heir
(11) Statutory grant permitted only by law, not a
constitutional right [Balane (2004)]
Rules of Construction and Interpretation [Art. 788-795]
All rules are designed to ascertain and give effect to
the intention of the testator.
Reason: testamentary succession is preferred to
intestacy.
(1) Different interpretations, in case of doubt, that
which would make the will operative [Art 788, CC]
(2) Words to be taken in their ordinary and

grammatical sense unless there is a clear

intention to use them in another sense [Art 790,
CC]
(3) Technical words are to be taken in their technical
sense unless there is a contrary intention or when
testator was unacquainted with such technical
sense [Art 790, CC]
(4) Words must be of an interpretation to give effect to
every expression. To make it operative rather than
inoperative; that which will prevent intestacy [Art
791, CC]
(5) Invalidity of one of several dispositions does not
result in invalidity of others unless the testator
would not have made such dispositions if the first
invalid disposition had not been made [Art 792,
CC]
(6) Every devise and legacy shall convey all the interest
unless it clearly appears the intention was to
convey a less interest [Art 794, CC]
(7) Imperfect description, no person or property
exactly answers to the description, mistakes,
omissions [Art 790, CC]
Kinds of Ambiguities
Patent or Extrinsic
Ambiguity
Latent or Intrinsic
Ambiguity
(a) one which appears
upon the face of the
instrument
(a) one which cannot be
seen from the reading
of the will but which
appears only upon
consideration of
extrinsic
circumstances
Note: There is no distinction between patent and
latent ambiguities in so far as the admissibility of
parol or extrinsic evidence to aid testamentary
disposition is concerned.
Resolving Ambiguities:
General Rule: Intrinsic or extrinsic evidence may be
used to ascertain the intention of the testator
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Exception: Oral declarations of the testator as to his

intention must be excluded
TESTAMENTARY CAPACITY AND INTENT

(a) Testamentary capacity must exist at the time of

the execution of the will

(b) Supervening incapacity does not invalidate an
effective will nor is the will of an incapable
validated by a supervening of capacity [Art 801,
CC]
Requisites - (SAP)

(a) Testator is of Sound mind at the time of execution

[Art. 798, CC]

(b) Not under 18 years of Age [Art. 797, CC]
(c) Not expressly Prohibited by law to make a will
[Art. 796, CC]
Age Requirement
Art 797, CC. Persons of either sex under the age of 18
cannot make a will.
Year shall be understood to be 12 calendar months
[Sec 31, Book 1, Admin Code]
Soundness of Mind of the Testator
Negatively Stated
(a) Not necessary that the testator be in full
possession of reasoning faculties
(b) Not necessary that the testators mind be wholly
unbroken, unimpaired, unshattered by disease,
injury or other cause [Art 799, CC]
Positively Stated: It is sufficient that the testator
(NPC)
(a) Knew the Nature of the estate to be disposed of;
(b) The Proper objects of his bounty;
(c) Character of the testamentary act [Art. 799, CC]
General Rule: Soundness of mind is presumed
[Art. 800, CC]
Exception: When the testator, one month or less,
before the execution of the will was publicly known
to be insane
FORM

Governing Law
Formal Validity Rules
Forms and solemnities of will are governed by the law
of the country in which the will was executed [Art 17,
CC]
Filipino in a foreign country can make a will according
to:
(1) Forms established by the law of the country in
which he may be
(2) Form according to Philippine law [Art 815]
Alien who is abroad may make the will according to:
(1) The law of the place where he resides
(2) Laws observed in his country
(3) According to those which the Civil Code
prescribes [Art 816]
(a) Prohibited wills executed by Filipinos in a foreign
country shall not be valid in the Philippines even
though authorized by the laws of the country of
execution. [Art 819, CC]
(b) Joint wills are prohibited even though they are
valid in the foreign country where the Filipino
wrote his will
Governing Law as to Place of Execution of Will
Testator
Place of
Execution of
Will

Governing Law
Filipino
Philippines Philippine Law (Art. 16,
CC)
Outside of
the
Philippines
(1) Law of the country
in which it is
executed (Art. 17,
CC); or
(2) Philippine Law (Art.
815, CC)
Alien
Philippines (1) Philippine Law; or
(2) Law of the country
of which testator is
a citizen or subject
(Art. 817, CC)
Outside of
the
Philippines
(1) Law of the place
where the will is
executed (Art. 17,
CC); or
(2) Law of the place
where the testator
resides; or
(3) Law of the testators
country; or
(4) Philippine Law (Art.
816, CC)
Aspect of the
Will
Governing Law
Formal Validity
Law in force at the time the will
was executed [Art. 795, CC]
Intrinsic Validity
Law of decedents nationality at
the time of his death [Art. 16 and
2263, CC]
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Aspects of the Will Governed by the National Law of

the Decedent
(1) Order of succession;
(2) Amount of successional rights;
(3) Intrinsic validity of testamentary provisions; and
(4) Capacity to succeed
Common Requirements [Art 804, CC]
(1) In writing
(2) In a language or dialect known to the testator
Notarial Wills
Special Requirements for Notarial Wills.

(1) SUBSCRIPTION: Subscribed to, at the end [Art.

805, CC]
(a) By the testator himself; or
(b) By the testators name written by a
representative in his presence and under his
express direction.
(2) ATTESTATION: Attested and subscribed by 3 or
more credible witnesses in the presence of the
testator and of one another [Art. 805, CC]
Attestation
Subscription
Mental act (act of the
senses)
Mechanical (act of the
hand)
Purpose is to render
available proof during
probate of will, not only
of the authenticity of the
will but also of its due
execution
Purpose of identification
The attestation clause shall state the following:
(a) Number of pages;
(b) The fact that the testator or his representative
under his express direction signed the will and
every page in the presence of instrumental
witnesses
(c) That the witnesses signed the will and all its
pages in the presence of the testator and of one
another.
Cagro v Cagro (1953): The signatures of the witnesses
must be at the bottom of the attestation clause
Cruz v Villasor (1973): The notary public cannot be
counted as an attesting witness
Test of presence
Not whether they actually saw each other sign, but
whether they might have seen each other sign had
they chosen to do so considering their mental and
physical condition and position with relation to each
other at the moment of inscription of each signature.
[Jaboneta vs. Gustilo (1906)]
(3) MARGINAL SIGNATURES
General Rule: Testator or his representative shall
write his name, and the witnesses shall sign each
and every page except the last page [Art. 805, CC]
Exceptions:
(a) When the will consists of only one page
(b) When the will consists of only two pages, the first
of which contains all dispositions and is signed at
the bottom by the testator and the witnesses, and
the second page contains only the attestation
clause duly signed at the bottom by the
witnesses. [Abangan vs. Abangan (1919)]
Matias vs. Salud (1957): the use of thumbprint was

allowed
Icasiano vs. Icasiano (1964): The inadvertent failure of
one witness to affix his signature to one page of a
testament, due to the simultaneous lifting of two
pages in the course of signing, is not per se sufficient
to justify denial of probate.
(4) PAGE NUMBERINGS - Numbered correlatively in
letters placed on the upper part of each page.
[Art. 805, CC]
(a) i.e., Page One of Five pages
(b) Mandatory part: pagination by means of a
conventional system
(c) Directory part: pagination in letters on the
upper part of each page [Balane (2010)]
(5) ACKNOWLEDGED before a notary public by the
testator and the witnesses [Art. 806, CC]
(a) Notary public cannot be considered a third
witness. He cannot acknowledge before
himself his having signed the will. To allow
such would have the effect of having only two
attesting witnesses to the will [Cruz v
Villasor(1973)]
(b) The certification of acknowledgement need
not be signed by the notary in the presence of
the testator and the witnesses. [Javellana v
Ledesma 1955)]
Special Rules for Handicapped
Deaf Mute [Art. 807, CC]
(a) Testator must personally read the will; or
(b) Testator shall personally designate two persons
to read the contents and communicate it to him
in some practicable manner.
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Blind [Art. 808, CC]

(a) The will shall be read to the testator twice - By
one of the subscribing witnesses and by the
notary public acknowledging the will.
(b) A testator suffering from glaucoma is considered
as legally blind [Garcia vs. Vasquez (1970)]
Substantial Compliance
Art. 809, CC. In the absence of bad faith, forgery, or
fraud, or undue and improper pressure and
influence, defects and imperfections in the form of
attestation or in the language used therein shall not
render the will invalid if it is proved that the will was
in fact executed and attested in substantial
compliance with all the requirements of Article 805.
Substantial compliance rule applies only in cases
when such defects and imperfections can be
supplied by an examination of the will itself
Examples:
(a) Whether all pages are consecutively numbered
(b) Whether the signatures appear in each and every
page
(c) Whether the subscribing witnesses are three

(d) Whether the will was notarized [Caneda v CA]

WITNESSES

Qualifications [Art. 820, CC]

(1) Of sound mind
(2) Aged 18 years or over
(3) Not blind, deaf or dumb
(4) Able to read and write
Disqualifications [Art. 821, CC]
(1) Person not domiciled in the Philippines
(2) Those who have been convicted of falsification,
perjury, or false testimony.
Interested witness [Art. 823, CC]
General Rule
Exception
Devises or legacies in
favor of a spouse, parent
or child who also attests
to the will as a witness
shall be void
If there are three other
competent witnesses,
the device or legacy shall
be valid and the
interested witness shall
be treated as a mere
surplusage
(a) Creditors are not incompetent to be witnesses
[Art. 824, CC]
(b) Supervening incompetency shall not prevent the
allowance of the will [Art. 822, CC]
Holographic Wills
Requisites
(1) In writing [Art. 804, CC]
(2) In a language known to the testator [Art. 804, CC]
(3) Entirely written, dated and signed in the hand of
the testator himself [Art. 810, CC]
Advantages
Disadvantages
(a) Simple and easy to
make
(b) Induces foreigners in
this jurisdiction to set
down their last
wishes
(c) Guarantees the
absolute secrecy of
the testamentary
dispositions
(a) No guarantee as to
the capacity of the
testator
(b) No protection against
violence, intimidation
or undue influence
(c) May not faithfully

express the will of the

testator due to faulty
expressions
(d) Can be easily falsified
and concealed
Witnesses Required for Probate [Art. 811]
(a) At least one witness who knows the handwriting
and signature of the testator; explicitly declare
that it is the testators
(b) If contested at least 3 of such witnesses
(c) In the absence of a competent witness, expert
testimony may be resorted to
General Rule: The holographic will itself must be
presented for probate [Gan v Yap (1958)]
Exception: If there is a photostatic copy or xerox copy
of the holographic will, it may be presented for
probate [Rodelas v Aranza (1982)]
Notarial Will v. Holographic Will
Notarial Will
Holographic Will
NOTARIAL codicil ONLY Notarial Codicil; or
Holographic Codicil; or
Additional dispositions
below the signature,
dated and signed in the
hand of the testator.
Insertion, Cancellation, Erasure or Alteration
(a) Testator must authenticate by his FULL
SIGNATURE
(b) Full signature does not necessarily mean the
testators full name; it rather means his usual and
customary signature. [Balane (2010)]
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Effect of insertion written by another person on the

validity of a holographic will
When made
Effect
After the execution,
without consent of
testator
Insertion considered not
written. Validity cannot
be defeated by the
malice or caprice of a
third person
After execution, with
consent
Will is valid, insertion is
void.
After execution,
validated by testators
signature
Insertion becomes part
of the will. Entire will
becomes void because it

is not wholly written by

the testator.
Contemporaneous to the
execution of the will
Will is void because it is
not written entirely by
the testator
Joint Wills
Art. 818, CC. Two or more persons cannot make a will
jointly, or in the same instrument, either for their
reciprocal benefit or for the benefit of a third person.
Art. 819, CC Wills, prohibited by the preceding article,
executed by Filipinos in a foreign country shall not be
valid in the Philippines, even though authorized by
the laws of the country where they may have been
executed.
Joint Will
(1) A single testamentary instrument,
(2) Which contains the wills of two or more persons,
(3) Jointly executed by them,
(4) Either for their reciprocal benefit or for the benefit
of a third person.
Mutual Wills
(1) Executed pursuant to an agreement between two
or more persons,
(2) Jointly executed by them,
(3) Either for their reciprocal benefit or for the benefit
of a third person.
Reciprocal Wills
(1) Testators name each other as beneficiaries in
their own wills,
(2) under similar testamentary plans
Note: A will that is both joint and mutual is one
executed jointly by two or more persons, the
provisions of which are reciprocal and which shows
on its face the devises are made in consideration of
each other. Such is prohibited under Art. 819, CC.
Prohibition is applicable only to joint wills executed by
Filipinos.
CODICILS

Codicil [Arts. 825-826, CC]

(1) It is a supplement or addition to a will,
(2) made after the execution of a will,
(3) and annexed to be taken as a part of the will,
(4) by which any disposition made in the original will
is explained, added to, or altered.
(5) in order that it may be effective, it shall be
executed as in the case of a will.
INCORPORATION BY REFERENCE

Requisites [Art 827, CC]

(1) The document or paper referred to in the will
must be in existence at the time of the execution
of the will.
(2) The will must clearly describe and identify the
same, stating among other things the number of
pages thereof.

(3) It must be identified by clear and satisfactory

proof as the document or paper referred to
therein; and
(4) It must be signed by the testator and the witnesses
on each and every page, except in case of
voluminous books of account or inventories.
REVOCATION

Modes of Revocation [Art. 830, CC]

(1) By implication of law; or
(2) By the execution of a will, codicil or other writing
executed as provided in the case of wills; or
(3) By burning, tearing, canceling, or obliterating the
will with the intention of revoking it, by the testator
himself, or by some other person in his presence,
and by his express direction.
Note: The act contemplating revocation must be
done at any time before the death of the testator. The
right of revocation cannot be waived or restricted.
(Art. 828, CC)
Law Governing Revocation (Art. 829, CC)
Place of
Revocation
Testators
Domicile
Governing Law
Philippines
Philippines, or
some other
country
Philippine Law
Philippines Philippine Law
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Place of
Revocation
Testators
Domicile
Governing Law
Outside the
Philippines
Foreign Country
(1) Law of the
place where
the will was
made; or
(2) Law of the
place in which
the testator
had his
domicile at the
time of
revocation
Doctrine of Dependent Relative Revocation
The rule that where the act of destruction is
connected with the making of another will so as to
fairly raise the inference that the testator meant the

revocation of the old to depend upon the efficacy of

the new disposition intended to be substituted, the
revocation will be conditional and dependent upon the
efficacy of the new disposition; and if for any reason,
the new will intended to be made as a substitute is
inoperative, the revocation fails and the original will
remain in full force. [Molo vs. Molo, 1951]
The failure of the new testamentary disposition upon
whose validity the revocation depends is equivalent
to the non-fulfillment of a suspensive condition and
hence prevents the revocation of the original will.
Revocation vs. Nullity
Revocation
Nullity
(a) By the act of the
testator
(b) Presupposes a valid
act
(c) Takes place during
the lifetime of the
testator
(d) Testator cannot
renounce the right to
revoke
(a) Proceeds from law
(b) Inherent in the
testament, be it an
intrinsic or an
extrinsic defect
(c) Invoked after the
testators death by
his heirs
(d) Nullity of a will can
be disregarded by
the heirs through
voluntary
compliance
therewith
REPUBLICATION AND REVIVAL

(a) The execution of a codicil referring to a previous

will has the effect of republishing the will as
modified by the codicil [Art. 836, CC].
(b) The testator cannot republish without
reproducing in a subsequent will, the dispositions
contained in a previous one which is void as to its
form [Art. 835, CC].
(1) Tolentino: Reproduction in the codicil is
required only when the original will is void as
to it form; in all other cases, reference to the
original will suffices to republish it through the
codicil.
(c) If after making a will, the testator makes a second
will expressly revoking the first, the revocation of
the second will does not revive the first will, which
can be revived only by another will or codicil.

(1) PRINCIPLE OF INSTANTER: Revoking clause

in the 2nd will is NOT TESTAMENTARY in
character but operates to revoke the prior will
INSTANTER upon the execution of the will
containing it. The revocation of the 2nd will
does not revive the 1st will which has already
become a NULLITY.
Republication vs. Revival
Republication
Revival
(a) Takes place by an act
of the testator
(b) Corrects extrinsic
and intrinsic defects
(a) Takes place by
operation of law
(b) Restores a revoked
will
ALLOWANCE AND DISALLOWANCE OF WILLS

Probate Requirement
Probate a Special Proceeding required to establish
the validity of a will and in order to pass real or
personal property [Art. 838, CC]
Matters to be proved in probate
(1) Whether the instrument which is offered for
probate is the last will and testament of the
decedent
(2) Whether the will has been executed in
accordance with the formalities prescribed by law
(3) Whether the testator had testamentary capacity
at the time of execution of the will
Issues to be resolved in probate proceedings [Art.
839]
General Rule: the probate court cannot inquire into
the intrinsic validity of testamentary provisions. Only
the extrinsic validity of such wills may be examined.
Exceptions: when practical considerations demand
the intrinsic validity of the will be resolved
(a) Acain vs Diongson (1987): When the will is
intrinsically void on its face such that to rule on its
formal validity would be a futile exercise
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(b) Valera vs. Inserto (1987): Claimants are all heirs

and they consent either, expressly or impliedly, to
the submission of the question of intrinsic validity
to the court.
(c) Pastor vs. CA (1983): Probate court may pass
upon the title thereto, but such determination is
provisional and not conclusive, and is subject to
the final decision in a separate action to resolve
title.
Revocation v. Disallowance
Revocation
Disallowance
Voluntary Act of the

Testator
Given by Judicial Decree
With or Without Cause Must always be for a
legal cause
May be partial or total Always total, except
when the ground of
fraud of influence for
example affects only
certain portions of the
will
Effect of Final Decree of Probate, Res Judicata on
Formal Validity
The probate of a will by the probate court having
jurisdiction thereof is usually considered as
conclusive as to its due execution and validity, and is
also conclusive that the testator was of sound and
disposing mind at the time when he executed the
will, and was not acting under duress, menace, fraud,
or undue influence, and that the will is genuine and
not a forgery. [Mercado vs. Santos, 1938]
Grounds for Denying Probate (SUM IFF)
(1) If the Signature of the testator was procured by
fraud;
(2) If it was procured by Undue and improper
pressure and influence, on the part of the
beneficiary or some other person;
(3) If the testator acted by Mistake or did not intend
that the instrument he signed should be his will
at the time affixing his signature thereto;
(4) If the testator was Insane or otherwise mentally
incapable of making a will at the time of its
execution;
(5) If the Formalities required by law have not been
complied with; or
(6) If it was executed through Force or under duress,
or the influence of fear, or threats.
INSTITUTION OF HEIRS
Institution of Heirs an act by virtue of which the
testator designates in his will the person or persons
who are to succeed him in his property and
transmissible rights and obligation [Art 840, CC]
A will shall be VALID even though it (1) should not
contain an institution of an heir or (2) such institution
should not comprise the entire estate or (3) the
person so instituted should not accept the
inheritance or be incapacitated to succeed.
In such cases, the testamentary dispositions made in
accordance with law shall be complied with and the
remainder of the estate shall pass to the legal heirs
[Art. 841, CC].
EXTENT OF GRANT [ART. 842, CC]:
Freedom of disposition depends upon the existence,
kind and number of compulosry heirs.
(1) No compulsory heirs Full power of disposition
(2) One with compulsory heirs cannot disregard the

rights of the latter (i.e. legitime)

EFFECT OF PREDECEASE OF HEIR (ART. 856, CC):
Any heir who dies before the testator or is
incapacitated to succeed or renounces the
inheritance transmits no rights of the testator to his
own heirs. This is without prejudice to the rights of
representation. [Tolentino]
IDENTIFICATION OF HEIRS, MANNER OF INSTITUTION [ART.
843-849; 851-853]
FALSE CAUSE [ART. 850]:
The statement of a false cause for the institution of
an heir shall be considered as not written unless it
appears from the will that the testator would not
have made such institution if he had known the
falsity of such cause.
PRETERITION

The preterition or omission of one, some, or all of the

compulsory heirs in the direct line, whether living at
the time of the execution of the will or born after the
death of the testator, shall annul the institution of
heir; but the devises and legacies shall be valid
insofar as they are not inofficious.
If the omitted compulsory heirs should die before the
testator, the institution shall be effectual, without
prejudice to the right of representation. [Art. 854, CC]
Concept [Art. 854, CC]
(a) There must be a total omission of one, some or all
of the heir/s from the inheritance. [Balane citing
Seangio vs Reyes (2006)]
(b) The omission must be that of a compulsory heir.
(c) The compulsory heir omitted must be of the direct
line.
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(d) The omitted compulsory heir must be living at the

time of the testators death or must at least have
been conceived before the testators death.
COMPULSORY HEIRS IN THE DIRECT LINE

A direct line is that constituted by the series of

degrees among ascendants and descendants
(ascending and descending). [Art 964 par.2]
PRETERITION V. DISPOSITION LESS THAN LEGITIME
BALANE:
(a) If the heir in question is instituted in the will but
the portion given to him by the will is less than his
legitime there is no preterition. [Reyes vs
Barretto-Datu (1967)]
(b) If the heir is given a legacy or devise there is no
preterition. [Aznar vs Duncan (1966)]
(c) If the heir had received a donation inter vivos from
the testator the better view is that there is no
preterition. The donation inter vivos is treated as
an advance on the legitime under Articles 906,
909, 910 and 1062
(d) The remedy, if the value of inheritance, legacy or
devise, or donation inter vivos is only for

completion of his legitime under Articles 906 and

907
DISTINGUISHED FROM DISINHERITANCE

Preterition
Disinheritance
(a) Tacit deprivation of a
compulsory heir of
his legitime
(b) May be voluntary but
the presumption of
law is that it is
involuntary
(c) Law presumes there
has been merely
oversight or mistake
on the part of the
testator
(d) Omitted heir gets not
only his legitime but
also his share in the
free portion not
disposed of by way of
legacies and devises
(a) Express deprivation of
a compulsory heir of
his legitime
(b) Always voluntary
(c) For some legal cause
(d) If the disinheritance is
valid, the compulsory
heir disinheritied is
totally excluded from
the inheritance. In
case of unlawful
disinheritance, the
compulsory heir is
merely restored to his
legitime
EFFECTS OF PRETERITION [ART. 854, CC]
(a) The institution of the heir is annulled.
(b) Devises and legacies shall remain valid as long as
they are not inofficious.
(c) If the omitted compulsory heir should die before
the testator, the institution shall be effective,
without prejudice to the right of representation.
(1) Neri vs. Akutin (1941): When there are no
devises and legacies, preterition will result in
the annulment of the will and give rise to
intestate succession.
SUBSTITUTION OF HEIRS
DEFINITION

Substitution - is the appointment of another heir, so

that he may enter into the inheritance in default of
the heir originally instituted. [Art 857, CC]
KINDS

Brief or Compendious [Art. 860, CC]

(a) Brief Two or more persons were designated by

the testator to substitute for only one heir
(b) Compendious One person is designated to take
the place of two or more heirs
Reciprocal
If the heirs instituted in unequal shares should be
reciprocally substituted, the substitute shall acquire
the share of the heir who dies, renounces, or is
incapacitated, unless it clearly appears that the
intention of the testator was otherwise. If there is
more than one substitute, they shall have the same
share in the substitution as the institution.
Example (only 1 substitute): If two heirs are
reciprocally substituted, then if one of them dies
before the testator dies, renounces, or turns out to be
incapacitated, the other will get his share, regardless
of whether or not their shares are equal.
Example (more than 1 substitute): A is instituted to 1/3,
B to 1/6, and C to . If C dies before the testator,
renounces or turns out to be incapacitated, then the
other two will get his shares in the same proportion
as in the institution. A will get twice as much as B
(because his share of 1/3 in the institution is twice the
size of Bs share of 1/6)
Simple Substitution [Art. 859, CC]. The testator may
designate one or more persons to substitute the
heir/s instituted in case the heirs should:
(1) die before him (predecease),
(2) should not wish to accept the inheritance
(repudiation), or
(3) should be incapacitated to accept the inheritance
(incapacitated). [Art. 859, CC]
Fideicommisary Substitution. The testator institutes
an heir with an obligation to preserve and to deliver
to another the property so inherited. The heir
instituted to such condition is called the First Heir or
the Fiduciary Heir; the one to receive the property is
the fideicommissary or the second heir. [Art 863, CC]
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Requisites of a Fideicommisary Substitution [Arts. 863865, CC]

(1) A Fiduciary or First Heir instituted is entrusted
with the obligation to preserve and to transmit to a
Fideicommissary Substitute or Second Heir the
whole or part of the inheritance.
(2) The substitution must not go beyond one degree
from the heir originally instituted.
(3) The Fiduciary Heir and the Fideicommissary are
living at the time of the death of the testator.
(4) The fideicommissary substitution must be
expressly made.
(5) The fideicommissary substitution is imposed on
the free portion of the estate and never on the
legitime
Note:

(a) Palacios vs. Ramirez (1982): Degree refers to

degree of relationship.
(b) PCIB vs. Escolin (1974): In the absence of an
obligation on the part of the first heir to preserve
the property for the second heir, there is no
fideicommissary substitution.
Effects of predecease of the first heir/fiduciary or the
second heir/fideicommisary
(a) Legend:
(1) T Testator
(2) FH First Heir / Fiduciary
(3) SH Second Heir / Fideicommissary
Substitute
(b) Situation 1: If the following is the sequence of
death of the three parties: FH SH T, who will
inherit? The legal heirs. There is no
fideicommissary substitution because FH and
SH are not living at the time of the testators
death. (Art 863, CC)
(c) Situation 2: T SH FH, who will inherit? The
SH and his heirs under Art. 866, CC. This is
because the SH passes his rights to his own
heirs when he dies before FH.
(d) Situation 3: FH T SH, who will inherit? No
specific provision in law, but SH inherits because
the T intended him to inherit.
TESTAMENTARY DISPOSITIONS WITH A
CONDITION, A TERM, AND A MODE
3 KINDS OF TESTAMENTARY DISPOSITIONS
(1) Conditional (obliquely defined in Article 1179, par.
1)
(2) Dispositions with a term (obliquely defined in
Article 1193, pars. 1 and 3)
(3) Dispositions with a mode/modal dispositions
(obliquely defined in Article 882)
CONDITIONS

Basis of testators right to impose conditions, terms or

modes: Testamentary freedom
Prohibited conditions: (considered as not imposed)
(1) Any charge, condition or substitution whatsoever
upon the legitimes. [Art. 872]
(2) Impossible and illegal conditions. [Art 873]
(3) Absolute condition not to contract a first or
subsequent marriage unless imposed on the
widow or widower by the deceased spouse, or by
the latters ascendants or descendants. [Art. 874]
(4) Scriptura captatoria or legacy-hunting
dispositions* [Art. 875]
Scriptura captatoria/ Legacy-Hunting Dispositions
(a) Reasons for prohibition
(1) The captatoria converts the testamentary
grants into contractual transactions;
(2) It deprives the heirs of testamentary freedom;
(3) It gives the testator the power to dispose
mortis causa not only of his property but also

of his heirs.
(b) Effect : Entire disposition is void
Potestative, Casual and Mixed Conditions
(a) Potestative Conditions
General Rule: Must be fulfilled as soon as the heir
learns of the testators death
Exception: If the condition was already complied with
at the time the heir learns of the testators death; or
if the condition is of such a nature that it cannot be
fulfilled again.
Constructive Compliance: deemed fulfilled
(b) Casual or mixed
General Rule: May be fulfilled at any time (before or
after testators death), unless testator provides
otherwise.
Exception: If already fulfilled at the time of execution
of will:
(1) if testator unaware of the fact of fulfillment
deemed fulfilled
(2) if testator aware:
(a) can no longer be fulfilled again: deemed
fulfilled
(b) can be fulfilled again: must be fulfilled again.
Constructive Compliance:
(a) if casual not applicable
(b) if mixed applicable only if dependent partly on
the will of a third party not interested.
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Mode [Art. 882, CC]

Definition an obligation imposed upon the heir,
without suspending, as a condition does, the
effectivity of the institution
(a) Must be clearly imposed as an obligation in order
to be considered as one. Mere preferences or
wishes expressed by the testator are not modes.
(b) A mode functions similarly to a resolutory
condition.
Caucin Muciana
DEFINITION: A security to guarantee the return of
the value of property, fruits, and interests, in case of
contravention of condition, term or mode
Instances when it is needed:
(1) Suspensive term [Art. 885]
(2) Negative potestative condition - when the
condition imposed upon the heir is negative, or
consists in not doing or not giving something [Art
879]
(3) Mode [Art 882, par 2]
LEGITIME
DEFINITION [ART. 886]
(a) It is that part of the testators property which he
cannot dispose of,
(b) Because the law has reserved it for his
compulsory heirs.
COMPULSORY HEIRS AND VARIOUS COMBINATIONS

Classes of Compulsory Heirs [Art. 887, CC]

(1) Primary: Those who have precedence over and
exclude other compulsory heirs:
Legitimate Children and Legitimate Descendants
with respect to their Legitimate Parents and
Ascendants
(2) Secondary: Those who succeed only in the absence
of the Primary compulsory heirs:
(a) Legitimate Parents and Legitimate
Ascendants, with respect to their Legitimate
Children and Descendants. (They will inherit
only in default of legitimate children and their
descendants)
(b) Illegitimate Parents with respect to their
Illegitimate Children. (They will inherit only in
default of the illegitimate and legitimate
children and their respective descendants).
Note that other illegitimate ascendants are
not included.
(3) Concurring: Those who succeed together with the
primary or the secondary compulsory heirs:
(a) Widow or Widower / Surviving Spouse
(Legitimate)
(b) Illegitimate Children and Illegitimate
Descendants
If the testator is a
LEGITIMATE CHILD:
If the testator is an
ILLEGITIMATE CHILD:
(1) LC and descendants (1) LC and descendants
(2) In default of No. 1, LP
and ascendants
(2) ILC and descendants
(3) SS (3) In default of Nos. 1-2.
ILP only
(4) IC and descendants (4) SS
Specific Rules on Legitimes
Direct Descending Line
(a) Rule of Preference between lines [Art 978 and
985, CC]
(1) Those in the direct descending line shall
exclude those in the direct ascending and
collateral lines; and
(2) Those in the direct ascending line shall, in
turn, exclude those in the collateral line.
(3) Rule of Proximity [Art 926, CC] The relative
nearest in degree excludes the farther one
(b) Right or representation ad infinitum in case of
predecease, incapacity, or disinheritance [Art 972
and 992, CC]
(1) For decedents who are Legitimate Children,
only the Legitimate Descendants are entitled
to right of representation.
(2) For decedents who are Illegitimate Children,
both the Legitimate and the Illegitimate

Descendants can represent, only with respect

to the decedents illegitimate parents.
(c) If all the Legitimate Children repudiate their
legitime, the next generation of Legitimate
Descendants may succeed in their own right.
Direct Ascending Line
(a) Rule of division between lines
(1) The father and the mother shall inherit
equally if both living. One succeeds to the
entire estate of the child if the other is dead.
[Art. 986, CC]
(2) In default of the mother and the father, the
ascendants nearest in degree will inherit. [Art.
987]
(3) If there is more than one relative of the same
degree but of different lines, one half will go
to the paternal ascendants and the other half
to the maternal ascendants. [Art. 987]
(b) Rule of equal division
(1) The relatives who are in the same degree shall
inherit in equal shares. [Art 987]
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Summary of Legitimes of Compulsory Heirs

Surviving Relatives
Legitimate Children
[LC] & Descendants
Surviving
Spouse [SS]
Illegitimate
Children [ILC]
Legitimat
e Parents
[LP] &
Ascendant
s
Illegitimate
Parents
[ILP]
1 LC alone 1/2 of the estate in
equal portions
2 1 LC, SS
3 LC, SS 1/2 in equal portions Same portion as 1
LC
4 LC, ILC in equal portions 1/2 share of 1
LC (for reach
ILC)
5 1 LC, SS, ILC 1/4 (preferred) 1/2 share of 1
LC (for each
child)
N.B. The share
of the ILC may
suffer reduction
pro rata
because spouse
is given

preference
6 2 or more LC, SS, ILC 1/2 in equal portions Same as share of
1 LC
1/2 share of 1
LC (for each
child)
7 LP alone 1/2
8 LP, ILC in equal
portions
1/2
9 LP, SS 1/2
1
0
LP, SS, ILC 1/8 1/2
11 ILC alone 1/2 in equal
portions
12 ILC, SS 1/3 1/3 in equal
portions
13 SS alone 1/2
*SS alone where
marriage is in
articulo mortis
and testator dies
within 3 months
from marriage
1/3
But if they have
been living
together as
husband and wife
for more than 5
years 1/2
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Surviving Relatives
Legitimate Children
[LC] & Descendants
Surviving
Spouse [SS]
Illegitimate
Children [ILC]
Legitimat
e Parents
[LP] &
Ascendant
s
Illegitimate
Parents
[ILP]
14 ILP alone 1/2
15 ILP, SS 1/4
16 Adopter, ILC, SS 1/3 1/3 1/3
(adopter)
Steps in Determining the Legitime of Compulsory
Heirs
(1) Determine the gross value of the estate at the

time of the death of the testator.

(2) Determine all debts and charges which are
chargeable against the estate.
(3) Determine the net value of the estate by
deducting all the debts and charges from the
gross value of the estate.
(4) Collate or add the value of all donations inter
vivos to the net value of the estate.
(5) Determine the amount of the legitime from the
total thus found.
(6) Impute the value of all donations inter vivos made
to strangers against the disposable free portion
and restore it to the estate if the donation is
inofficious.
(7) Distribute the residue of the estate in accordance
with the will of the testator.
Remedy of a Compulsory Heir in case of Impairment
of Legitime
Extent and Nature of
Impairment
Remedy
Total omission of a
compulsory heir who is a
direct descendant or
ascendant (preterition)
Annulment of institution
and reduction of legacies
and devises [Art. 854,
CC]
Testamentary
dispositions impairing or
diminishing the legitime
Reduction of the
disposition insofar as
they may be inofficious
or excessive [Art. 907,
CC]
Partial impairment Completion of the
legitime [Art. 906, CC]
Impairment by
inofficious donations
Collation reduction of
donations [Arts. 771 and
911, CC]
RESERVA TRONCAL

Art. 891. The ascendant who inherits from his

descendant any property which the latter may have
acquired by gratuitous title from another ascendant,
or a brother or sister, is obliged to reserve such
property as he may have acquired by operation of
law for the benefit of relatives who are within the
third degree and who belong to the line from which
said property came.
Concept of Reserva Troncal [Art. 891, CC]
(1) A descendant (prepositus) inherits or acquires

property from an ascendant (origin or mediate

source) by gratuitous title or from a brother or
sister
(2) The same property is inherited by another
ascendant (reservista) or is otherwise acquired by
him by operation of law from the said descendant
(prepositus)
(3) The said ascendant (reservista) must reserve the
property for the benefit of the relatives of the
deceased descendant within the third civil degree
and who belong to the line from which the said
property came (reservatarios).
Parties: [Balane (2010)]
(1) Origin or Mediate Source either an ascendant of
any degree of ascent or a brother or sister of the
Prepositus; responsible for the 1st transfer
(2) Prepositus the first transferee of the reserved
property
(3) Reservista an ascendant of the Prepositus other
than the Origin or Mediate Source; the one
obligated to reserve the property
(4) Reservatarios within the 3rd degree of
consanguinity from the Prepositus [Cabardo v.
Villanueva (1922)] belonging to the line from
which the property came
Requisites for Reserva Troncal [Chua vs. CFI(1977)]
(1) That the property was acquired by a descendant
(Prepositus) from an ascendant or from a brother
or sister (Origin or Mediate Source) by gratuitous
title,
(2) That the Prepositus died without (legitimate*)
issue,
(3) That the property is inherited by another
ascendant (Reservista) by operation of law, and
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(4) That there are relatives within the 3rd degree

(Reservatarios) belonging to the line from which
said property came.
Note: Only legitimate descendants will prevent the
property from being inherited by the legitimate
ascending line by operation of law [Balane]
3 transmissions involved: [Balane (2010)]
(a) 1st transfer by gratuitous title, from a person to
his descent, brother or sister
(b) 2nd transfer by operation of law, from the
transferee in the 1st transfer to another ascendant.
This creates the reserve.
(c) 3rd transfer from the transferee in the second
transfer to the relatives
Juridical Nature of Rights
Nature of the reservistas right: [Balane citing Edroso v
Sablan]
(a) The reservistas right over the reserved property is
one of ownership
(b) The right of ownership is subject to a resolutory

condition, i.e. the existence of reservatarios at the

time
(c) The right of ownership is alienable, but subject to
the same resolutory condition.
(d) The reservistas right of ownership is registrable.
Nature of reservatarios right: [Balane citing Sienes v
Esparcia]
(a) The reservatarios have a right of expectancy over
the property.
(b) The right is subject to a suspensive condition, i.e.
the expectancy ripens into ownership if the
reservatarios survive the reservistas.
(c) The right is alienable but subject to the same
suspensive condition.
(d) The right is registrable.
Reserva Minima v. Reserva Maxima
(1) The prepositus acquired property gratuitously
from an ascendant, a brother or sister
(2) In his will, he institutes as his heir his ascendant
(who is also a compulsory heir) such that the
ascendant receives half of the estate by operation
of law as legitime and the other half by
testamentary disposition
Problem: Will the property acquired gratuitiously by
the prepositus from the source be treated as
acquired by the ascendant-heir by operation of law
(legitime) and therefore reservable or by
testamentary disposition?
Two Views
(1) Reserva Maxima: The entire property will be
considered acquired as legitime and therefore
wholly reservable
(2) Reserva Minima: One half is reservable, the other
half is not subject to reserva troncal [Tolentino, p.
284]
Extinguishment of the Reserva) (LDD-RRP)
(1) Loss of the reservable property
(2) Death of the reservista
(3) Death of all the relatives within the third degree
belonging to the line from which the property
came
(4) Renunciation by the reservatarios
(5) Registration of the reservable property under the
Torrens system as free
(6) Prescription, when the reservista holds the
property adversely against the reservatarios, as
free from reservation
DISINHERITANCE

Definition of Disinheritance [Art. 915, CC]

(1) It is the act by which the testator
(2) For just cause
(3) Deprives a compulsory heir of his right to the
legitime.
Requisites of a Valid Disinheritance
(1) Heir disinherited must be designated by name or

in such a manner as to leave no room for doubt

as to who is intended to be disinherited.
(2) It must be for a cause designated by law.
(3) It must be made in a valid will.
(4) It must be made expressly, stating the cause in
the will itself.
(5) The cause must be certain and true, and must be
proved by the interested heir if the person should
deny it.
(6) It must be unconditional.
(7) It must be total.
Disinheritance for cause
Disinheritance of children and descendants
Article 919. The following shall be sufficient causes
for the disinheritance of children and descendants,
legitimate as well as illegitimate:
(1) When a child or descendant has been found
guilty of an attempt against the life of the
testator, his or her spouse, descendants, or
ascendants;
(2) When a child or descendant has been convicted
of adultery or concubinage with the spouse of the
testator;
(3) When a child or descendant by fraud, violence,
intimidation, or undue influence causes the
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testator to make a will or to change one already

made;
(4) A refusal without justifiable cause to support the
parent or ascendant who disinherits such child or
descendant;
(5) Maltreatment of the testator by word or deed, by
the child or descendant;
(6) When a child or descendant leads a dishonorable
or disgraceful life;
(7) Conviction of a crime which carries with it the
penalty of civil interdiction.
Disinheritance of parents and ascendants
Article 920. The following shall be sufficient causes
for the disinheritance of parents or ascendants,
whether legitimate or illegitimate:
(1) When the parents have abandoned their children
or induced their daughters to live a corrupt or
immoral life, or attempted against their virtue;
(2) When the parent or ascendant has been
convicted of an attempt against the life of the
testator, his or her spouse, descendants, or
ascendants;
(3) When the parent or ascendant has accused the
testator of a crime for which the law prescribes
imprisonment for six years or more, if the
accusation has been found to be false;
(4) When the parent or ascendant has been
convicted of adultery or concubinage with the
spouse of the testator;

(5) When the parent or ascendant by fraud, violence,

intimidation, or undue influence causes the
testator to make a will or to change one already
made;
(6) The loss of parental authority for causes specified
in this Code;
(7) The refusal to support the children or
descendants without justifiable cause;
(8) An attempt by one of the parents against the life
of the other, unless there has been a
reconciliation between them.
Disinheritance of a spouse [Article 921, CC]
Article 921. The following shall be sufficient causes
for disinheriting a spouse:
(1) When the spouse has been convicted of an
attempt against the life of the testator, his or her
descendants, or ascendants;
(2) When the spouse has accused the testator of a
crime for which the law prescribes imprisonment
of six years or more, and the accusation has been
found to be false;
(3) When the spouse by fraud, violence, intimidation,
or undue influence cause the testator to make a
will or to change one already made;
(4) When the spouse has given cause for legal
separation;
(5) When the spouse has given grounds for the loss
of parental authority;
(6) Unjustifiable refusal to support the children or
the other spouse.
Summary of Causes of Disinheritance
Grounds for Disinheritance
[CC 919]
Children &
Descendants
[CC 920]
Parents &
Ascendants
[CC 921]
Spouse
[CC 1032]
Unworthiness
1 Guilty or Convicted of Attempt Against the
Life of the Testator, Spouse, Ascendant or
Descendant
*
*
*
*
2 Accused Testator or Decedent of Crime
Punishable by Imprisonment of 6 years or
more, and Found Groundless or False
*
*
*

*
3 Causes testator or decedent to Make a Will or
Change one by Fraud, Violence, Intimidation,
or Undue Influence
*
*
*
*
4 Unjustified Refusal to Support Testator * * *
5 Convicted of Adultery or Concubinage with
Spouse of Testator or Decedent
*
*
*
6 Maltreatment of testator by Word and Deed *
7 Leading a Dishonorable or Disgraceful Life *
8 Conviction of Crime which carries the penalty
of Civil Interdiction
*
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Grounds for Disinheritance

[CC 919]
Children &
Descendants
[CC 920]
Parents &
Ascendants
[CC 921]
Spouse
[CC 1032]
Unworthiness
9 Abandonment of Children or Inducing
Children to Live Corrupt and Immoral Life or
Against Attempted Virtue
**
10 Loss of Parental Authority * *
11 Attempt by One Parent Against the Life of the
Other UNLESS there is Reconciliation
Between Parents
*
12 Spouse Has Given Cause for Legal Separation *
13 Failure to Report Violent Death of Decedent
Within One Month UNLESS Authorities Have
Already Taken Action
*
14 Force, Violence, Intimidation, or Undue
Influence to Prevent Another from Making a
Will or Revoking One Already Made or Who
Supplants or Alters the Latters Will
*
15 Falsifies or Forges Supposed Will of Decedent *
Reconciliation [Art. 922]
Art. 922. A subsequent reconciliation between the
offender and the offended person deprives the latter
of the right to disinherit, and renders ineffectual any

disinheritance that may have been made.

Rights of descendants of person disinherited [Art.
923]
Art. 923. The children and descendants of the person
disinherited shall take his or her place and shall
preserve the rights of compulsory heirs with respect
to the legitime; but the disinherited parent shall not
have the usufruct or administration of the property
which constitutes the legitime.
Balane: This is inconsistent with Art. 1033. In
disinheritance, reconciliation is sufficient. It need not
be in writing. In unworthiness, however, it needs to
be in writing.
Revocation
Modes of Revocation.
(1) Reconciliation [Art 922, CC]
(2) Subsequent institution of the disinherited heir
(3) Nullity of the will which contains the
disinheritance.
Note: The moment that testator uses one of the acts
of unworthiness as a cause for disinheritance; he
thereby submits it to the rules on disinheritance.
Thus, reconciliation renders the disinheritance
ineffective.
Disinheritance without cause [Art. 918]
Art. 918. Disinheritance without a specification of the
cause, or for a cause the truth of which, if
contradicted, is not proved, or which is not one of
those set forth in this Code, shall annul the
institution of heirs insofar as it may prejudice the
person disinherited; but the devises and legacies and
other testamentary dispositions shall be valid to
such extent as will not impair the legitime.
Ineffective Disinheritance if the disinheritance lacks
one or other of the requisites mentioned in this
article, the heir in question gets his legitime. [Balane
(2010)]
Ineffective Disinheritance
Preterition
Person disinherited may
be any compulsory heir
Person omitted must
be a compulsory heir in
the direct line
Only annuls the
institution in so far as it
prejudices the person
disinherited
Annuls the entire
institution of heirs
Legacies and Devisees
Legacy
Devise
A gift of personal property
given in a will

A gift of real property

given in a will
It is bequeathed It is devised
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Persons Charged With the Duty to Give Legacies and

Devises in a Will
(1) Compulsory heir, provided, their legitimes are not
impaired (Art. 925, CC)
(2) Voluntary heir
(3) Legatee or devisee can be charged with the duty of
giving a sub-legacy or sub-devisee but only to the
extent of the value of the legacy or devise given
him (Art. 925, CC)
(4) The estate represented by the executor or
administrator, if no one is charged with this duty
to pay or deliver the legacy or devise in the will
(a) If there is an administration proceeding, it
constitutes a charge upon the estate.
(b) If there is no administration proceeding, it is a
charge upon the heirs.
Validity and Effect of Legacy or Devise
Legacy or devise of a thing belonging to another [Art.
930, CC]
Status of property given by
legacy/devise
Effect on the
legacy/devise
Testator erroneously believed
that the property belonged to
him
Void
The thing bequeathed
afterwards becomes his by
whatever title
Effective
Legacy or devise of thing already belonging to the
legatee or devisee
Status of property given by
legacy/devise
Effect on the
legacy/devise
The thing already belongs to
the legatee or devisee at the
time of the execution of the will
(Art. 932, CC)
Ineffective
The thing is subject to an Valid only as to
Status of property given by
legacy/devise
Effect on the
legacy/devise
encumbrance or interest of
another person (Art. 932, CC)
the interest or
encumbrance

Legatee or devisee
subsequently alienates the
thing (Art. 933,CC)
Ineffective
After alienating the thing, the
legatee or devisee
subsequently reacquires it
gratuitously (Art. 933, CC)
Ineffective
Status of property given by
legacy/devise
Effect on the
legacy/devise
After alienating the thing, the
legatee or devisee acquires it
by onerous title (Art. 933, CC)
Legatee or
devisee can
demand
reimbursement
from the heir or
estate
Different Objects of Legacies and Devises (Art. 934944, CC)
(1) Legacy of a thing pledged or mortgaged to
secure a debt [Art 934, CC]
(2) Legacy of credit, or remission or release of a debt
[Art 935 CC]
(3) Legacy to the debtor of thing pledged by him [Art
936, CC]
(4) Legacy or devise to a creditor if the testator
orders the payment of a debt [Art 939, CC]
(5) Alternative legacies and devises [Art 940, CC]
(6) Legacy of generic personal property or
indeterminate real property [Art 941, CC]
(7) Legacy of education [Art 944, CC]
(8) Legacy of support [Art 944, CC]
Objects of Legacy or Devise
Effect
Thing pledged or mortgaged
to secure a debt
(a) Estate is obliged to pay the debt
(b) Other charges pass to the legatee or devisee
Credit or remission or release
of a debt
(a) Effective only as regards the credit or debt existing at the time of the testators death
(b) Legacy lapses if the testator later brings action against the debtor
(c) If generic, comprises all credits/debts existing at time of execution of will
Thing pledged by debtor Only the pledge is extinguished; the debt remains
To a creditor Shall not be applied to his credit unless the testator so declares
Order of payment of a debt (a) If testator does not really owe the debt, the disposition is
void
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Objects of Legacy or Devise

Effect

(b) If the order is to pay more that the debt, the excess is not due
(c) This is without prejudice to the payment of natural obligations
Alternative legacies and
devises
(a) The choice is with the heir, or the executor or administrator
(b) If the heir, legatee or devisee dies the right passes to their heirs
(c) Once made, the choice is irrevocable
Legacy of generic personal
property or indeterminate
real property
(a) Legacy is valid even if there are no things of the same kind in the estate
(b) Devise of indeterminate real property valid only if there are immovable property of
the same kind in the estate
(c) The choice belongs to the heir, legatee or devisee or the executor or administrator
Legacy of education (a) Lasts until the legatee is of age or beyond the age of majority in
order that he may
finish some professional, vocational or general course provided he pursues his course
diligently
(b) If testator did not fix the amount, it is fixed in accordance with the social standing
and circumstances of the legatee and the value of the estate
Legacy of support (a) Lasts during lifetime of legatee
(b) If the testator used to give the legatee a sum of money for support, give the same
amount unless it is markedly disproportionate to the estate
(c) If testator did not fix the amount, it is fixed in accordance with the social standing
and circumstances of the legatee and the value of the estate
Order of Payment in Case the Estate Is Not Sufficient to Cover All the Legacies and Devises
ART. 911
ART. 950
Order of Preference
LIPO
(a) Legitime of compulsory heirs
(b) Donations Inter vivos
(c) Preferential legacies or devises
(d) All Other legacies or devises pro rata
RPSESO
(a) Remuneratory legacy/devise
(b) Preferential legacy/devise
(c) Legacy for Support
(d) Legacy for Education
(e) Legacy/devise of Specific, determinate thing which forms
a part of the estate
(f) All Others pro rata
Application
(a) When the reduction is necessary to preserve the
legitime of compulsory heirs from impairment whether
there are donations inter vivos or not; or
(b) When, although, the legitime has been preserved by
the testator himself there are donations inter vivos.
NOTE: Art. 911, CC governs when there is a conflict
between compulsory heirs and the devisees and legatees.
(a) When there are no compulsory heirs and the entire estate
is distributed by the testator as legacies or devises; or
(b) When there are compulsory heirs but their legitime has
already been provided for by the testator and there are
no donations inter vivos.

Note: Art. 950, CC governs when the question of reduction is

exclusively among legatees and devisees themselves.
How Legacy or Devise Delivered [Art. 951, CC]
(1) The very thing bequeathed shall be delivered and
not its value
(2) With all its accessions and accessories
(3) In the condition in which it may be upon the death
of the testator
(4) Legacies of money must be paid in cash
Effect of ineffective legacies or devises [Art. 956, CC]
In case of repudiation, revocation or incapacity of the
legatee or devisee, the legacy or devise shall
bemerged with the mass of the hereditary estate,
except in cases of substitution or accretion.
Ground for Revocation of Legacies and Devises [Art.
957, CC] - (TALO)
(1) Testator Transforms the thing such that it does
not retain its original form or denomination
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(2) Testator Alienates the thing by any title or for any

cause. Reacquisition of the thing by the testator
does not make the legacy or devise valid, unless it is
effected by right of repurchase.
(3) Thing is totally Lost during the lifetime or after
the death of the testator
(4) Other causes: nullity of will, non-compliance with
suspensive condition, sale of the thing to pay the
debts of the deceased during the settlement of
his estate.

Legal or Intestate Succession

GENERAL PROVISIONS
Intestacy that which takes place by operation of law
in default of compulsory and testamentary
succession. Not defined in the Civil Code.
INSTANCES WHEN LEGAL OR INTESTATE SUCCESSION
OPERATES: [ART. 960, CC]

(1) If a person dies without a will, or with a void will,

or one which has subsequently lost its validity
(2) When the will does not institute an heir
(3) Upon the expiration of term, or period of
institution of heir [Balane, 426]
(4) Upon fulfillment of a resolutory condition
attached to the institution of heir, rendering the
will ineffective [Balane, 426]
(5) When the will does not dispose of all the property
belonging to the testator. Legal succession shall
take place only with respect to the property which
the testator has not disposed (mixed succession)
(6) If the suspensive condition attached to the
institution of the heir does not happen or is not
fulfilled
(7) If the heir dies before the testator
(8) If the heir repudiates the inheritance, there being
no substitution, and no right of accretion takes

place
(9) When the heir instituted is incapable of
succeeding, except in cases provided in the Civil
Code
(10) Preterition Intestacy may be total or partial
depending on whether or not there are legacies
or devises [Balane, 426]
Note: In all cases where there has been an institution
of heirs, follow the ISRAI order:
(a) If the Institution fails, Substitution occurs.
(b) If there is no substitute, the right of
Representation applies in the direct descending
line to the legitime if the vacancy is caused by
predecease, incapacity, or disinheritance.
(c) The right of Accretion applies to the free portion
when the requisites in Art. 1016 are present.
(d) If there is no substitute, and the right of
Representation or Accretion are not proper, the
rules on Intestate succession shall apply.
THE INTESTATE OR LEGAL HEIRS

(1) Relatives
(a) Legitimate ascendants
(b) Illegitimate parents
(c) Legitimate children
(d) Illegitimate children
(e) Surviving Spouse
(f) Brothers, sisters, nephews and nieces (BSNN)
(g) Other collateral relatives
(2) Surviving spouse
(3) State (through escheat proceedings)
Intestate succession is based on the presumed will of
the decedent. That is, to distribute the estate in
accordance with the love and affection he has for his
family, and in default of these persons, the presumed
desire to promote charitable and humanitarian
activities [Balane].
FUNDAMENTAL PRINCIPLES IN INTESTATE SUCCESSION:
Rule of Preference between Lines
(a) Those in the direct descending line shall exclude
those in the direct ascending and collateral lines;
(b) Those in the direct ascending line shall, in turn,
exclude those in the collateral line.
Rule of Proximity
The relative nearest in degree excludes the farther
one. [Art. 962[1], CC], saving the right of
representation when it properly takes place.
Rule of Equal Division
The relatives who are in the same degree shall
inherit in equal shares. [Arts. 962[2], 987 and 1006,
CC]
Exceptions: [Balane, 427-428]
(a) Rule of preference between Lines
(b) Distinction between legitimate and illegitimate
filiation. The ratio under present law is 2:1. [Art
983, in relation to Article 895 as amended by

Article. 176, FC]

(c) Rule of division by line in the ascending line [Art.
987 [2], CC]
(d) Distinction between full-blood and half-blood
relationship among brothers and sisters, as well
as nephews and nieces. [Art. 1006 and 1008, CC]
(e) Right of representation.
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Rule of Barrier between the legitimate family and the

illegitimate family (the iron-curtain rule)
The illegitimate family cannot inherit by intestate
succession from the legitimate family and vice-versa.
[Art. 992, CC]
Rule of Double Share for full blood collaterals
When full and half-blood brothers or sisters,
nephews or nieces, survive, the full blood shall take a
portion in the inheritance double that of the halfblood.
[Arts. 895 and 983, CC]
Note:
(1) If one of the legitimate ascendants, illegitimate
parents, legitimate children or illegitimate
children survives, the brother, sisters, nephews,
and nieces (BSNN) are excluded.
(2) If one of the legitimate ascendants, illegitimate
parents, legitimate children, illegitimate children
or surviving spouse survives, the other collateral
relatives and the state are excluded.
(3) If any of the heirs concur in legitimes, then they
also concur in intestacy.
RELATIONSHIP
BASIC CONCEPTS IN RELATIONSHIP

The number of generations determines the proximity

of the relationship. Each generation forms one
degree. [Art 963, CC]
A series of degrees forms a line. This line may either
by direct or collateral. [Art. 964, CC]
(a) A direct line is that constituted by the series of
degrees among ascendants and descendants.
(b) The direct line is either ascending (brings a
person with those from whom he descends) and
descending (connecting the head of the family
with those who descend from him). [Art. 965, CC]
(c) A collateral line is that constituted by the series of
degrees among persons who are not ascendants
or descendants, but who come from a common
ancestor.
Note: It is important to distinguish between direct
and collateral as the direct has preference over the
collateral.
In a line, as many degrees are counted as there are
generations. [Art. 966, CC]
(a) In the direct line, ascent is made up to the
common ancestor or progenitor.
(b) In the collateral line, ascent is made to the
common ancestor. Then descent to the person

with whom the computation is to be made.

Note: Descending line is preferred over ascending.
Blood relationship is either full or half-blood. [Art.
967, CC]
Note: As among brothers and sisters and nephews
and nieces, there is a 2:1 ratio for full-blood and halfblood
relatives. Direct relatives are preferred. But
this distinction does not apply with respect to other
collateral relatives.
INCAPACITY [ART. 968, CC]
General Rule: If there are several relatives of the
same degree, and one or some of them are unwilling
or incapacitated to succeed, his portion shall accrue
to the others of the same degree.
Exception: When the right of representation should
take place.
Note: This accretion in intestacy takes place in case
of predecease, incapacity, or renunciation among
heirs of the same degree. The relatives must be in
the same relationship because of the Rule of
Preference of Lines.
REPUDIATION [ARTS. 968-969, CC]
(a) There is no right of representation in repudiation.
If the nearest relative/s repudiates the
inheritance, those of the following degree shall
inherit in their own right.
(b) In case of repudiation by all in the same degree,
the right of succession passes on the heirs in
succeeding degrees: descending line first,
ascending line next, and collateral line next.
[Balane]
ADOPTION [ART. 189, FC]
In adoption, the legal filiation is personal and exists
only between the adopter and the adopted. The
adopted is deemed a legitimate child of the adopter,
but still remains as an intestate heir of his natural
parents and other blood relatives.
RIGHT OF REPRESENTATION
Representation right created by fiction of law, by
virtue of which the representative is raised to the
place and the degree of the person represented, and
acquires the rights which the latter would have if he
were living or if he could have inherited (Art. 970, CC)
EFFECT OF REPRESENTATION

The representative heir acquires the rights which the

represented would have if he were living or if he
could have inherited.
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WHEN IT OCCURS

(a) Representation is allowed with respect to

inheritance conferred by law (legitime and
intestate based on Art. 923)
(b) It occurs only in the following instances:
(1) predecease of an heir
(2) incapacity or unworthiness

(3) disinheritance [Art. 923, CC]

(c) There is no representation in testamentary
succession. [Art 856, CC]
(d) There is no representation in repudiation.
A renouncer can represent, but cannot be
represented. Rationale is found in Art. 971 which
states that The representative does not succeed the
person represented but the one whom the person
represented would have succeeded.
REPRESENTATION IN THE DIRECT DESCENDING LINE

Representation takes place ad infinitum in the direct

descending line but never in the direct ascending line.
[Art. 972, CC]
General Rule: Grandchildren inherit from the
grandparents by right of representation, if proper.
Exception: Whenever all the children repudiate, the
grandchildren inherit in their own right because
representation is not proper. [Art. 969, CC]
REPRESENTATION IN COLLATERAL LINE

(a) In the collateral line, representation takes place

only in favor of the children of the brothers or
sisters (i.e., nephews and nieces) whether of the
full or half-blood [Art. 972, CC] and only if they
concur with at least one uncle or aunt. In this
case, they share in the inheritance per stirpes.
(b) If the children survive alone, they inherit in their
own right and share in equal proportions or per
capita. [Art. 975, CC]
(c) Right of representation in the collateral line is
only possible in INTESTATE succession. It cannot
take place in testamentary succession.
PER STIRPES

(a) Inheritance per stirpes means that the

representative/s shall receive only what the
person represented would have received, if he
were living or could inherit. [Art.975, CC]
(b) If there are more than one representative in the
same degree, then it shall be divided equally,
without prejudice to the distinction between
legitimate and illegitimate, if applicable.
THE DOUBLE HEIRSHIP TEST

(a) In determining whether or not representation is

proper, it is necessary that the representative
must be a legal heir of both the person he is
representing and the decedent. [Art. 973, CC]
(b) BUT the representative need not be qualified to
succeed the person represented. [Art. 971, CC] In
the same manner, the person represented need
not be qualified to succeed the decedent, as it is
his disqualification which gives rise for
representation to apply.
(c) Implication: Illegitimate children can represent
illegitimate parents in inheritance from
illegitimate grandparents. (Rationale: Iron-curtain
rule under Art. 992, CC)
(d) On the other hand, a legitimate child may

represent either a legitimate or illegitimate

parent in the inheritance of either a legitimate or
illegitimate grandparents. [Arts. 902, 989 and
990, CC]
REPRESENTATION IN ADOPTION

If the adopting parent should die before the adopted

child, the latter cannot represent the former in the
inheritance of the parents or ascendants of the
adopter. The adopted child is not related to the
deceased in that case, because filiation created by
fiction of law is exclusively between the adopter and
the adopted. [Tolentino, 448-449]
ORDER OF CONCURRENCE IN THE CASE OF AN ADOPTED
CHILD (ART. 190, FC)

Survivors
Share
LC, ILC, SS As in the case of ordinary
intestate succession
LP/ILP, or legitimate
ascendants
Adopter

SS/ILC
Adopters

LP or ascendants
Adopter
ILC or descendants

Adopters
SS
ILC
1/3
1/3
1/3
Adopter alone Entire estate
Collateral blood relatives
alone
As in the case of ordinary
intestate succession

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ORDER OF INTESTATE SUCCESSION

Decedent is a Legitimate Child
Decedent is an Illegitimate Child
Decedent is an Adopted Child
1 Legitimate children or
descendants (LCD)
Legitimate children or
descendants (LCD)
Legitimate children or
descendants (LCD)
2 Legitimate parents or ascendants

(LPA)
Illegitimate children or
descendants (LPA)
Illegitimate children or
descendants (ICD)
3 Illegitimate children or
descendants (ICD)
Illegitimate parents (IP) Legitimate or illegitimate parents,
or legitimate ascendants, adoptive
parents
4 Surviving spouse (SS) Surviving spouse (SS) Surviving spouse (SS)
5 Brothers and sisters,
nephews, nieces (BS/NN)
Illegitimate brothers and sisters,
nephews, nieces (IBS/NN)
Brothers and sisters, nephews,
nieces (BS/NN)
6 Legitimate collateral relatives
within the 5th degree (C5)
State State
7 State
RULES OF EXCLUSION AND CONCURRENCE IN INTESTATE SHARES

Intestate Heirs
Excludes
Excluded By
Concurs With
LC + LD Ascendants,
Collaterals and
State
No one SS + ILC
ILC + D ILP,
Collaterals and
State
No one SS, LC, LP
LP + LA Collaterals and
State
LC ILC + SS
ILP Collaterals and
State
LC and ILC SS
SS Collaterals other than
siblings, nephews and
nieces, State
No one LC, ILC, LP, ILP
Siblings
Nephews
Nieces
Siblings,
Nephews
Nieces
All other collaterals and
State
LC, ILC, LP, ILP SS
Other collaterals within 5th
degree

Collateral more remote in

degree and
State
LC, ILC, LP, ILP and
SS
Collaterals in the same
degree
State No one Everyone No one
OUTLINE OF INTESTATE SHARES

Legitimate children only

(a) Divide entire estate equally among all legitimate
children [Art. 979, CC]
(b) Legitimate children include an adopted child.
Legitimate children and Illegitimate children
Divide entire estate such that each illegitimate child
gets of what a legitimate child gets [Art. 983, CC
and Art. 176, FC]
Legitimate children and surviving spouse
(a) Divide entire estate equally between the
legitimate children and the surviving spouse, the
latter deemed as one child. The same rule holds
where there is only one child.
(b) Children as used in Art. 996 is interpreted to
include a situation where there is only one child.
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Legitimate children. Surviving spouse, and

Illegitimate children
Divide the entire estate such that the surviving
spouse is deemed one legitimate child and each
illegitimate child getting of what the legitimate
child gets. [Art. 996, CC and Art. 176, FC]
Legitimate parents only
Divide the entire estate equally. [Art. 985, CC]
Legitimate ascendants only (excluding parents)
Divide the entire estate equally but with the
observance of the rule of division by line. [Art. 987,
CC]
Legitimate parents and illegitimate children
Legitimate parents get of the estate, illegitimate
children get the other . [Art. 991, CC]
Legitimate parents and surviving spouse
Legitimate parents get of the estate; The surviving
spouse gets the other . [Art. 997,CC]
Legitimate parents, surviving spouse and illegitimate
children
Legitimate parents get of the estate; surviving
spouse and the illegitimate child each get each,
the latter to share among themselves if more than
one. [Art. 1000, CC]
Illegitimate children only
Divide the entire estate equally. [Art. 988, CC]
Illegitimate children and surviving spouse
Illegitimate children get of the estate; the
surviving spouse gets the other . [Art. 998, CC]
Surviving spouse only

Entire estate goes to the surviving spouse. [Art.

994/995, CC]
Surviving spouse and illegitimate parents
Illegitimate parents get and the spouse gets the
other . [by analogy with Art. 997, CC]
Surviving spouse and legitimate brothers and sisters,
nephews and nieces
Surviving spouse gets of the estate, while the rest
gets the other with the nephews and nieces
inheriting by representation if proper. [Art. 1001, CC]
Surviving spouse and illegitimate brothers and sisters,
nephews and nieces
Surviving spouse gets of the estate while the rest
gets the other with the nephews and nieces
inheriting by representation, if proper; Note that all
the other relatives should be illegitimate because
of the iron-curtain rule. [Art. 994, CC]
Illegitimate parents only
Entire estate goes to the illegitimate parents. [Art
993, CC]
Illegitimate parents and children of any kind (whether
legitimate or illegitimate child)
Illegitimate parents are excluded and do not inherit;
For the rule on the respective shares of the children,
see numbers 1, 2 or 10, whichever is applicable.
Legitimate brothers and sisters only
Divide the entire estate such that full-blood
brothers/sisters gets a share double the amount of a
half-blood brother or sister. [Art. 1004 and 1006, CC]
Legitimate brothers and sisters, nephews and nieces
Divide the entire estate observing the 2 is to 1 ratio
for full and half-blood relationships with respect to
the brothers and sisters, with the nephews and
nieces inheriting by representation, if proper. [Art.
1005 & 1008, CC]
Nephews and nieces only
Divide the entire estate per capita, observing the 2 is
to 1 ratio. [Arts. 975 and 1008, CC]
Other collaterals (Arts. 1009 and 1010)
(a) Divide entire estate per capita.
(b) Collateral relatives must be with the 5th degree of
consanguinity.
Note: the nearer relative excludes the more remote
relatives.
State
If there are no other intestate heirs, the State inherits
the entire estate through escheat proceedings. [Art.
1011, CC]

Provisions Common to estate

and Intestate Succession
RIGHT OF ACCRETION

[ARTS. 1015-1016]
Definition of Accretion [Art. 1015, CC]
It is a right by virtue of which, when two or more
DEFINITION AND REQUISITES

persons are called to the same inheritance, devise or

legacy, the part assigned to one who renounces or
cannot receive his share or who died before the
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testator is added or incorporated to that of his coheirs,

co-devisees, or co-legatees.
Requisites [Tolentino p. 497-499]:
(1) Unity of object and plurality of subjects (two or
more persons are called to the same inheritance
or same portion thereof)
(2) Vacancy of share (one of the heirs dies before the
testator, or renounces the inheritance, or is
incapacitated)
(a) Accretion happens when there is repudiation,
incapacity, or predecease of an heir.
(b) It is the mechanism where the share of an heir is
increased by vacant shares vacated by heirs who
cannot inherit for various reasons. (RATIONALE:
the decedent intended to give the property to
nobody but the co-heirs.)
(c) There can only be accretion if there is an
institution of heirs with respect to specific
properties. [Art 1016, CC]
(d) Among compulsory heirs, there can only be
accretion with respect to the free portion. There
can be no accretion with respect to the legitimes.
[Arts. 1021 and 1018, CC]
(e) The heirs to whom the portion goes by the right
of accretion take it in the same proportion that
they inherit. [Art. 1019, CC]
Exceptions [Balane]:
(1) In testamentary succession, if the testator
provides otherwise
(2) If the obligation is purely personal, and hence
intransmissible
(a) The heirs to whom the inheritance accrues shall
succeed to all the rights and obligations which
the heir who renounced or could not receive it
would have had. [Art. 1020, CC]
(b) In testamentary succession, when the right of
accretion does not take place, the vacant portion
of the instituted heirs, if no substitute has been
designated, shall pass to the legal heirs of the
testator, who shall receive it with the same
charges and obligations. [Art 1022, CC]
(c) Accretion shall also take place among devisees,
legatees and usufructuaries under the same
conditions established for heirs. [Art 1023, CC]
EFFECT OF PREDECEASE, INCAPACITY, DISINHERITANCE OR
REPUDIATION IN TESTAMENTARY AND INTESTATE
SUCCESSION

Cause Of
Vacancy
Testamentary Succession Intestate
Legitime Free Portion Succession

Predecease Represent
-ation
Intestate
Accretion
Intestate
Successio
Representation
Intestate
Cause Of
Vacancy
Testamentary Succession Intestate
Legitime Free Portion Succession
Successio
n
n Succession
Incapacity Represent
-ation
Intestate
Successio
n
Accretion
Intestate
Succession
Representa
tion
Intestate
Succession
Disinheritan
ce
Represent
-ation
Intestate
Successio
n
-Repudiation Intestate
Successio
n
Accretion Accretion
CAPACITY TO SUCCEED BY WILL OR INTESTACY
PERSONS INCAPABLE OF SUCEEDING

Requisites for Capacity to Succeed by Will or by

Intestacy [Art. 1024 1025, CC]
(a) The heir, legatee or devisee must be living or in
existence at the moment the succession opens;
(Art 1025) and
(b) He must not be incapacitated or disqualified by
law to succeed. (Art 1024, par.1)
PERSONS INCAPABLE OF SUCCEEDING ARTS. 1027, 739,

1032
Based on Undue Influence or Interest [Art. 1027, CC]
(PIGRAP)
(a) Priest who heard the last confession of the
testator during his last illness, or the minister of

the gospel who extended spiritual aid to him

during the same period;
(b) Individuals, associations and corporations not
permitted by law to inherit;
(c) Guardian with respect to testamentary
dispositions given by a ward in his favor before
the final accounts of the guardianship have been
approved, even if the testator should die after the
approval thereof; except if the guardian is his
ascendant, descendant, brother, sister, or spouse;
(d) Relatives of the priest or minister of the gospel
within the fourth degree, the church, order,
chapter, community, organization, or institution
to which such priest or minister may belong;
(e) Attesting witness to the execution of a will, the
spouse, parents, or children, or any one claiming
under such witness, spouse, parents, or children;
(f) Physician, surgeon, nurse, health officer or
druggist who took care of the testator during his
last illness.
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Based on Morality or Public Policy [Arts. 739 and 1028,

CC] (CAP)
(1) Those made in favor of a person with whom the
testator was guilty of adultery or concubinage at
the time of the making of the will.
(2) Those made in consideration of a crime of which
both the testator and the beneficiary have been
found guilty.
(3) Those made in favor of a public officer or his
spouse, descendants and ascendants, by reason
of his public office.
Based on Acts of Unworthiness (Art. 1032, Cc)

(A3F3P2)
The following are incapable of succeeding by reason
of unworthiness:
(1) Parents who have abandoned their children or
induced their daughters to lead a corrupt or
immoral life, or attempted against their virtue;
(2) Any person who has been convicted of an
attempt against the life of the testator, his or her
spouse, descendants, or ascendants;
(3) Any person who has accused the testator of a
crime for which the law prescribes imprisonment
for six years or more, if the accusation has been
found groundless;
(4) Any heir of full age who, having knowledge of the
violent death of the testator, should fail to report
it to an officer of the law within a month, unless
the authorities have already taken action; this
prohibition shall not apply to cases wherein,
according to law, there is no obligation to make
an accusation;
(5) Any person convicted of adultery or concubinage
with the spouse of the testator;

(6) Any person who by fraud, violence, intimidation,

or undue influence should cause the testator to
make a will or to change one already made;
(7) Any person who by the same means prevents
another from making a will, or from revoking one
already made, or who supplants, conceals, or
alters the latter's will;
(8) Any person who falsifies or forges a supposed will
of the decedent.
Pardon of Acts of Unworthiness
Express
Implied
Made by the execution of
a document or any
writing in which the
decedent condones the
cause of incapacity
Effected when the
testator makes a will
instituting the unworthy
heir with knowledge of
the cause of incapacity
Cannot be revoked Revoked when the
testator revokes the will
or the institution
Unworthiness vs. Disinheritance
Unworthiness renders a
person incapable of
succeeding to the
succession, whether
testate or intestate
Disinheritance is the act
by which a testator, for
just cause, deprives a
compulsory heir of his
right to the legitime [Art.
815, CC]
Determination of Capacity [Tolentino p. 539]
General Rule: At the death of the decedent [Art. 1034,
CC]
Exceptions:
(1) Those falling under 2, 3, and 5 of Art. 1032 when
the final judgment is rendered
(2) Those falling under 4 of Art. 1032 when the
month allowed for the report expired
(3) If the institution is conditional when the
condition is complied with
ACCEPTANCE AND REPUDIATION OF THE
INHERITANCE
CHARACTERISTICS (VIR) (ARTS. 1041 1042, 1056, CC)
(1) Voluntary and free [Art 1041, CC]
(2) Irrevocable except if there is vitiation of consent
or an unknown will appears [Art 1056, CC]
(3) Retroactive [Art 1042, CC]
REQUISITES (ART. 1043, CC)

(1) Certainty of death of the decedent

(2) Certainty of the right to the inheritance
ACCEPTANCE VS. REPUDIATION
Acceptance
Repudiation
Involves the confirmation
of transmission of
successional rights
(a) Renders the
transmission of
successional rights
ineffective
(b) Equivalent to an act
of disposition or
alienation
(c) Publicity
requirement is
necessary for the
protection of other
heirs and creditors
Forms of Acceptance [Arts. 1049 1050, CC]
(1) Express Acceptance one made in a public or
private document. [Art. 1049 par. 1]
(2) Tacit Acceptance one resulting from acts by
which the intention to accept is necessarily
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implied or from acts which one would have no

right to do except in the capacity of an heir.
(3) Implied acceptance - Within thirty days after the
court has issued an order for the distribution of
the estate in accordance with the Rules of Court,
the heirs, devisees and legatees shall signify to
the court having jurisdiction whether they accept
or repudiate the inheritance; if they do not do so
within that time, they are deemed to have
accepted the inheritance. [Art 1057, CC]
Forms of Repudiation [Art. 1051, CC]
(1) in a public instrument acknowledged before a
notary public; or
(2) in an authentic document equivalent of an
indubitable writing or a writing whose
authenticity is admitted or proved; or
(3) by petition presented to the court having
jurisdiction over the testamentary or intestate
proceeding
Heirs in Two Capacities [Art. 1055, CC]
(1) If a person is called to the same inheritance as an
heir by will and by law and he repudiates the
inheritance in his capacity as a testamentary heir,
he will be considered to have also repudiated the
inheritance as a legal heir.
(2) If he repudiates it as a legal heir, without his
being a testamentary heir, he may still accept it in
the latter capacity.
COLLATION

CONCEPT OF COLLATION

(a) To collate is to bring back or to return to the

hereditary mass in fact or by fiction property
which came from the estate of the decedent,
during his lifetime by donation or other
gratuitous title but which the law considers as
an advance from the inheritance. (Art 1061, CC)
(b) It is the act by virtue of which, the compulsory
heir who concurs with other compulsory heirs in
the inheritance bring back to the common
hereditary mass the property which they may
have received from the testator so that a division
may be effected according to law and the will of
the testator.
(c) In reducing inofficious donations, the last to be
donated should be the first to be reduced.
(d) Rationale for collation: If donations inter vivos will
not be collated, then the rule on legitimes shall
be circumvented or disregarded.
OPERATIONS RELATED TO COLLATION

(a) Collation adding to the mass of the hereditary

estate the value of the donation or gratuitous
disposition.
(b) Imputing or Charging crediting the donation as
an advance on the legitime (if the donee is a
compulsory heir) or on the free portion (if the
donee is a stranger). [Balane p 522]
(c) Reduction determining to what extent the
donation will remain and to what extent it is
excessive or inofficious.
(d) Restitution returning or the act of payment of
the excess to the mass of hereditary estate.
PERSONS OBLIGED TO COLLATE

General Rule: Compulsory heirs

Exceptions:
(a) when the testator should have so expressly
provided [Art. 1062, CC]
(b) when the compulsory heir should have
repudiated his inheritance [Art 1062, CC]
Grandchildren who survive with their uncles, aunts,
or first cousins and inherit by right of representation
[Art 1064, CC]
Note: Grandchildren may inherit from their
grandparents in their own right, i.e., as heirs next in
degree, and not by right of representation if their
parent repudiates the inheritance of the
grandparent, as no living person can be represented
except in cases of disinheritance and incapacity. In
this case, the grandchildren are not obliged to bring
to collation what their parent has received
gratuitously from their grandparent.
Surviving spouse NOT obliged to collate.
WHAT TO COLLATE

(a) Any property or right received by gratuitous title

during the testators lifetime [Art 1061, CC]
(b) All that they may have received from the

decedent during his lifetime. [Art 1061, CC]

(c) Expenses incurred by the parents in giving their
children a professional, vocational or other career
shall not be brought to collation unless the
parents so provide, or unless they impair the
legitime; but when their collation is required, the
sum which the child would have spent if he had
lived in the house and company of his parents
shall be deducted therefrom. [Art 1068, CC]
(d) Any sums paid by a parent in satisfaction of the
debts of his children, election expenses, fines, and
similar expenses shall be brought to collation.
[Art 1069, CC]
Note: Only the value of the thing donated shall be
brought to collation.
PROPERTIES NOT SUBJECT TO COLLATION

Absolutely no collation
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Expenses for support, education (only elementary

and secondary), medical attendance, even in
extraordinary illness, apprenticeship, ordinary
equipment, or customary gifts [Art. 1067, CC]
Generally not imputable to legitime/ cannot be
collected, subject to exceptions
(a) Expenses incurred by parents in giving their
children professional, vocational or other career
unless the parents so provide, or unless they
impair the legitime. [Art. 1067, CC]
(b) Wedding gifts by parents and ascendants,
consisting jewelry, clothing and outfit, except
when they exceed 1/10 of the sum disposable by
will. [Art. 1070, CC]
(c) Neither shall donations to the spouse of the child
be brought to collation; but if they have been
given by the parent to the spouses jointly, the
child shall be obliged to bring to collation onehalf
of the thing donated. [Art. 1066, CC]
Note: Parents are not obliged to bring to collation in
the inheritance of their ascendants any property
which may have been donated by the latter to their
children. [Art 1065, CC]
PARTITION AND DISTRIBUTION OF ESTATE
PARTITION

Concept
(a) Separate, Divide, Assign. Partition is the
separation, division and assignment of a thing
held in common among those to whom it may
belong. The thing itself or its value may be
divided. [Art. 1079, CC]
(b) Owned in common. Before partition, the whole
estate of the decedent is owned in common by
the heirs. [Art 1078, CC]
(c) Thing or value may be divided. [Art 1079]
(d) Acts deemed partition. Every act which is intended
to put an end to indivision among heirs and

legatees or devisees is deemed a parition,

although it should purport to be a sale, an
exchange, a compromise, or any other
transaction. [Art 1082, CC]
A void partition may be valid if:
(1) the will was in fact a partition
(2) the beneficiaries of the void will were legal heirs
The titles of acquisition or ownership of each
property shall be delivered to the co-heir to whom
said property has been adjudicated. [Art. 1089 CC]
PARTITION INTER VIVOS

Judicial v. Extrajudicial Partition

(a) Judicial Partition done by Court pursuant to an
Order of Distribution which may or may not be
based on a project of partition.
(b) Extra-judicial partition made by the decedent
himself by an act inter vivos or by will or by a third
person entrusted by the decedent or by the heirs
themselves. [Paras]
PARTITION INTER VIVOS (ASKED IN 85)
It is one that merely allocates specific items or pieces
of property on the basis of the pro-indiviso shares
fixed by law or given under the will to heirs or
successors. (Art. 1080, cc)
Who may effect partition
(1) The Decedent, during his lifetime by an act inter
vivos or by will [Art.1080, CC]
(2) The decedents heirs [Art.1083, CC]
(3) A competent court [Art. 1083,CC]
(4) A third person not an heir designated by the
decedent [Art.1081, CC]
Who Can Demand Partition
(1) Compulsory heir
(2) Voluntary heir upon fulfillment of condition if any
[Art 1084, CC]
(3) Legatee or devisee
(4) Any person who has acquired interest in the
estate
When Partition Cannot Be Demanded
(1) When expressly Prohibited by the testator for a
period not exceeding 20 years [Art 1083, CC]
(2) When the co-heirs Agreed that the estate shall
not be divided for a period not exceeding 10
years, renewable for another 10 years
(3) When Prohibited by law
(4) When to partition the estate would render it
unserviceable for the use for which it is intended
Prohibition To Partition
(1) The prohibition to partition for a period not
exceeding 20 years can be imposed on the
legitime.
(2) If the prohibition to the partition is for more than
20 years, the excess is void.
(3) Even if a prohibition is imposed, the heirs by
mutual agreement can still make the partition.

Effects of Inclusion of Intruder in Partition [Art 1108,

CC]
(1) Between a true heir and several mistaken heirs
partition is void.
(2) Between several true heirs and a mistaken heir
transmission to mistaken heir is void
(3) Through error or mistake, share of true heir is
allotted to mistaken heir partition shall not be
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rescinded unless there is bad faith or fraud on the

part of the other persons interested, but the latter
shall be proportionately obliged to pay the true
heir of his share. The partition with respect to the
mistaken heir is void. [Sempio-Dy]
Right of Redemption in Partition
(a) Should any of the heirs sell his hereditary rights
to a stranger before the partition, any or all of the
co-heirs may be subrogated to the rights of the
purchaser by reimbursing him for the price of the
sale, provided they do so within the period of one
month from the time they were notified in writing
of the sale by the vendor [Art. 1088, CC]
(b) Strangers those who are not heirs on the
succession.
EFFECTS OF PARTITION

Effect
A partition legally made confers upon each heir the
exclusive ownership of the property adjudicated to
him [Art 1091, CC]
Warranty
(a) After the partition has been made, the co-heirs
shall be reciprocally bound to warrant the title to,
and the quality of, each property adjudicated
[Art. 1092 CC]
(b) The reciprocal obligation of warranty referred to
in the preceding article shall be proportionate to
the respective hereditary shares of the co-heirs;
(1) But if any one of them should be insolvent, the
other co-heirs shall be liable for his part in the
same proportion, deducting the part
corresponding to the one who should be
indemnified.
(2) Those who pay for the insolvent heir shall
have a right of action against him for
reimbursement, should his financial condition
improve [Art. 1093 CC]
(c) An action to enforce the warranty among the coheirs
must be brought within ten years from the
date the right of action accrues. [Art. 1094 CC]
(d) If a credit should be assigned as collectible, the
co-heirs shall not be liable for the subsequent
insolvency of the debtor of the estate, but only for
his insolvency at the time the partition is made. [Art
1095, CC]
(e) The warranty of the solvency of the debtor can

only be enforced during the five years following

the partition.
(f) Co-heirs do not warrant bad debts, if so known to,
and accepted by the distributee.
(1) But if such debts are not assigned to a co-heir,
and should be collected, in whole or in part,
the amount collected shall be distributed
proportionately among the heirs. [Art. 1095
CC]
End of Warranty
The obligation of warranty among co-heirs shall
cease in the ff. cases:
(a) The testator himself has made the partition
(1) Unless it appears, or it may be reasonably
presumed, that his intention was otherwise,
but the legitime shall always remain
unimpaired.
(b) When it has been so expressly stipulated in the
agreement of partition
(1) Unless there has been bad faith
(c) When the eviction is due to a cause subsequent to
the partition, or has been caused by the fault of
the distributee of the property. (Art. 1096, CC)
NULLIFICATION OF PARTITION

Causes for Rescission or Annulment

(a) A partition may be rescinded or annulled for the
same causes as contracts. [Art 1097, CC]
(b) A partition, judicial or extra-judicial, may also be
rescinded on account of lesion, when any one of
the co-heirs received things whose value is less by
at least one-fourth, than the share to which he is
entitled, considering the value of the things at the
time they were adjudicated [Art. 1098, CC]
(1) This article applies only to cases of partition
among-coheirs
(2) Lesion is the injury suffered in consequence of
inequality of situation by one party who does
not receive the full equivalent for what she
gives in a sale or any commutative contract
(c) The partition made by the testator cannot be
impugned on the ground of lesion, except when
the legitime of the compulsory heirs is thereby
prejudiced, or when it appears or may be
reasonably be presumed, that the intention of the
testator was otherwise. [Art. 1099, CC]
(d) Preterition of a compulsory heir in the partition
[Art 1104, CC]:
(1) Partition shall not be rescinded unless bad
faith or fraud on the part of other heirs is
proved.
(2) The culpable heirs shall share in the damages
of the prejudiced compulsory heir
proportionately.
(e) A partition which includes a person believed to be
an heir, but who is not, shall be void only with

respect to such person. [Art. 1105 CC]

(a) The action for rescission on account of lesion shall
prescribe after four years from the time the
partition was made. [Art. 1100, CC]
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(b) The heir who is sued shall have the option of

indemnifying the plaintiff for the loss, or
consenting to a new partition
(c) Indemnity may be made:
(1) By payment in cash or
(2) By the delivery of a thing of the same kind
and quality as that awarded to the plaintiff.
(d) If a new partition is made, it shall affect neither
those who have not been prejudiced nor those
who have not received more than their just share
[Art. 1101, CC]
(e) An heir who has alienated the whole or a
considerable part of the real property adjudicated
to him cannot maintain an action for rescission on
the ground of lesion, but he shall have a right to
be indemnified in cash [Art. 1102, CC]
(f) The omission of one or more objects or securities
of the inheritance shall not cause the rescission of
the partition on the ground of lesion, but the
partition shall be completed by the distribution of
the objects or securities which have been omitted.
[Art. 1103, CC]
Difference of Nullity from Rescission
Nullity is not the same as Rescission:
(1) Nullity - the act is supposed to never have existed
(2) Rescission - the act is valid at the origin though it
afterwards became ineffective
Important Periods in Partition
1 month or less
before making a
will
Testator, if publicly known to be
insane, burden of proof is on the
one claiming validity of the will
20 years Maximum period testator can
prohibit alienation of
dispositions
5 years from
delivery to the
State
To claim property escheated to
the State
1 month To report knowledge of violent
death of decedent lest he be
considered unworthy
5 years from the
time disqualified
person took
possession
Action for declaration of

incapacity & for recovery of the

inheritance, devise or legacy
30 days from
issuance of order
of distribution
Must signify
acceptance/repudiation
otherwise, deemed accepted
1 month form
written notice of
sale
Right to repurchase hereditary
rights sold to a stranger by a coheir
10 years To enforce warranty of
title/quality of property
adjudicated to co-heir from the
time right of action accrues
5 years from
partition
To enforce warranty of solvency
of debtor of the estate at the
time partition is made
4 years form
partition
Action for rescission of partition
on account of lesion

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Contract of Partnership

DEFINITION
By the contract of partnership two or more persons
bind themselves to contribute money, property, or
industry to a common fund, with the intention of
dividing the profits among themselves.
Two or more persons may also form a partnership for
the exercise of a profession. [Article 1767]
Article 1767 defines partnership from the viewpoint of
a contract. From the contract arises the partnership
relation. As a form of business organization,
partnership falls between two extremes single
proprietorship and corporation. [De Leon, Comments
and Cases on Partnership, Agency and Trusts (2010),
hereinafter referred to as "De Leon (2010)"]
ELEMENTS
There is a contract of partnership when:
(1) There is a meeting of the minds;
(2) To form a common fund;
(3) With intention that profits and losses will be
divided among the contracting parties.
ESSENTIAL FEATURES
A partnership contract has the following essential
features:
(1) There must be a valid contract.
(2) The parties must have legal capacity.

(3) There must be a mutual contribution of money,

property, or industry to a common fund.
(4) The object must be lawful.
(5) The primary purpose must be to obtain profits
and to divide the same among the parties.
(6) The partnership has a juridical personality
separate from individual partners [Article 1768].
As such, "Any immovable property or an interest
therein may be acquired in the partnership name.
Title so acquired can be conveyed only in the
partnership name." [Article 1774]
EFFECT OF UNLAWFUL OBJECT

If the partnership has an unlawful object or purpose:

(1) The contract is void ab initio. [Article 1409(1)]
(2) Once dissolved by judicial decree:
(a) The profits shall be confiscated by favor of
the State;
(b) The instruments or tools and proceeds of
the crime shall also be forfeited in favor of the
State. [Article 1770]
(c) The contributions of partners shall not be
confiscated unless they are instruments or tools
of the crime. [De Leon (2010)]
Note: A partnership is dissolved by operation of law
(even without judicial decree) when the business
becomes unlawful.
ASSOCIATIONS WITHOUT LEGAL PERSONALITY

Associations and societies with the following

characteristics has no legal personality and is
governed by the provisions of co-ownership:
(1) The articles are kept secret among the members;
and
(2) Any one of the members may contract in his own
name with third persons. [Article 1775]
It may, however, be sued by third persons under the
common name it uses. [Section 15, Rule 3, Rules of
Court]
CHARACTERISTICS
The contract of partnership is:
(1) Consensual, because it is perfected by mere
consent.
(2) Nominate, because it has a specific name.
(3) Bilateral or multilateral, because it is entered into
between two or more persons.
(4) Principal, because its existence does not depend
on another contract.
(5) Onerous, because money, property or industry are
contributed by the parties.
(6) Preparatory, because it is entered into to carry out
a business or specific venture.
(7) Commutative, because the undertaking of each is
considered as equivalent of that of the others.
PARTIES TO THE CONTRACT
General rule: Any person capacitated to contract may
enter into a contract of partnership.
As such, the following persons cannot enter into a

contract of partnership:
(1) Those suffering from civil interdiction;
(2) Minors;
(3) Insane or demented persons;
(4) Deaf-mutes who do not know how to write;
(5) Incompetents who are under guardianship.
Exceptions: The capacity of the following persons to
enter into a contract of partnership, though
capacitated to contract generally, are limited:
(1) Those who are prohibited from giving each other
any donation or advantage cannot enter into a
universal partnership. [Article 1782]
(2) A corporation cannot enter into a partnership in
the absence of express authorization by statute or
charter.
Ratio: Otherwise, as a result of the mutual agency
between partners, a corporation would be bound by
the acts of persons other than its duly appointed or
authorized officers or agents. This is inconsistent
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with the policy of the law that a corporation should

manage its own affairs.
Also, the arrangement would allow corporate
property to be subject to risks not contemplated by
the stockholders when they originally invested.
[Mendiola v. CA (2006)]
Although a corporation cannot enter into a
partnership contract, it may, however, engage in a
joint venture with others [Auerbach vs. Sanitary
Wares Manufacturing Corp. (1989)].
There is no prohibition against a partnership being a
partner in another partnership. [De Leon (2010)]
OBJECT OF THE CONTRACT
OBJECT OF UNIVERSAL PARTNERSHIP

A universal partnership may refer to:

(1) All present property:
(a) The partners contribute all the property
which belongs to them to a common fund,
with the intention of dividing the same
among themselves, as well as the profits they
may acquire therewith. [Article 1778]
(b) The property contributed includes all those
belonging to the partners at the time of the
constitution of the partnership.
(c) A stipulation for the common enjoyment of
any other profits may also be made.
However, the property which the partners
may acquire subsequently by inheritance,
legacy or donation cannot be included in
such stipulation, except the fruits thereof.
[Article 1779]
(2) All the profits:
(a) It comprises all that the partners may acquire
by their industry or work during the existence
of the partnership.

(b) Only the usufruct over the property of the

partners passes to the partnership. [Article
1780]
When the articles of universal partnership
does not specify its nature (all present
property or all the profits), the partnership
will be considered as one only of all the
profits. [Article 1781]
OBJECT OF PARTICULAR PARTNERSHIP

A particular partnership has for its object determinate

things, their use or fruits, or a specific undertaking, or
the exercise of a profession or vocation. [Article 1783]
FORM OF THE CONTRACT
General rule: The contract may be constituted in any
form. [Article 1771]
Exceptions: (1) Where immovable property or real
rights are contributed:
(a) The contract must appear in a public instrument;
and
(b) Attached to such instrument must be an
inventory, signed by the parties, of the property
contributed. [Articles 1771 and 1773]
(2) Where the capital is at least P3,000, in money or
property:
(a) The contract must appear in a public
instrument; and
(b) It must be recorded in the SEC. Failure to
comply with these requirements, however,
does not affect the liability of the partnership
and the partners to third persons. [Articles
1768 and 1772]
DURATION OF THE CONTRACT
COMMENCEMENT

A partnership begins from the moment of the

execution of the contract, unless it is otherwise
stipulated. [Article 1784]
TERM

As to period, a partnership may either be:

(1) For a fixed term or particular undertaking; or
(2) At will, the formation and dissolution of which
depend on the mutual desire and consent of the
parties. Any one of the partners may, at his sole
pleasure, dictate the dissolution of the
partnership, even in bad faith, subject to liability
for damages. [Ortega v. CA (1995)]
EXTENSION

A partnership term may be extended by:

(1) Express renewal of the agreement; or
(2) Implied renewal, when the requisites concur:
(a) The partnership is for a fixed term or
particular undertaking;
(b) It is continued after the termination of the
fixed term or particular undertaking without
any express agreement.
A continuation of the business by the partners or
such of them as habitually acted therein during the

term, without any settlement or liquidation of the

partnership affairs, is prima facie evidence of a
continuation of the partnership. The effect of such
continuation is that the right and duties of the
partners remain the same as they were at such
termination of the period, but this time, the
partnership is considered to be at will. [Article 1785]
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RULES TO DETERMINE EXISTENCE

When the intent of the parties is clear, it shall
govern. When it does not clearly appear, the
following rules apply:
(1) Persons who are not partners to each other are
not partners as to third persons.
Exception: A person not a partner may be considered
a partner by estoppel.
(2) Co-ownership or co-possession does not of itself
establish a partnership, even when there is
sharing of profits in the use of the property.
(3) Sharing of gross returns does not of itself
establish a partnership, even when the parties
have joint or common interest in any property
from which the returns are derived.
(4) The receipt by a person of a share in the profits of
a business is prima facie evidence that he is a
partner.
Exceptions: No such inference is drawn if the profits
are received in payment:
(a) As a debt by installments or otherwise;
(b) As wages of an employee of rent to a landlord;
(c) As an annuity to a widow or representative of a
deceased partner;
(d) As interest on a loan, though the amount of
payment vary with the profits of the business;
(e) As the consideration for the sale of a goodwill of a
business or other property by installments or
otherwise. [Article 1769]
RELATIONS CREATED
(1) Among the partners themselves.
(2) Between the partners and the partnership.
(3) Between the partnership and third persons with
whom it contracts.
(4) Between the partners and such third persons.
KINDS OF PARTNERSHIP
AS TO LEGALITY OF EXISTENCE

(1) Partnership de jure is one which has complied with

all the requisites for its lawful establishment.
(2) Partnership de facto is one which failed to so
comply.
AS TO OBJECT

(1) Universal partnership:

(a) Of all present property;
(b) Of profits;
(2) Particular partnership.
AS TO DURATION

(1) For a fixed term or particular undertaking;

(2) At will.
AS TO LIABILITY OF PARTNERS

(1) General partnership, consisting of general partners

only, who are liable pro rata for partnership
obligations with all their after exhaustion of
partnership assets;
(2) Limited partnership, includes, aside from general
partner/s, limited partners, who are not
personally liable for partnership obligations.
AS TO PUBLICITY

(1) Secret partnership, where the existence of certain

persons as partners is not made known by the
partners;
(2) Open or notorious partnership, the existence of
which is made known to the public by the
partners.
AS TO PURPOSE

(1) Commercial or trading partnership, for transaction

of business;
(2) Professional or non-trading, for exercise of a
profession.
A profession has been defined as "a group of men
pursuing a learned art as a common calling in the
spirit of public service no less a public service
because it may incidentally be a means of
livelihood." [In the Matter of the Petition for Authority
to Continue Use of Firm name "Sycip, Salazar,
etc."/"Ozaeta, Romulo, etc." (1979)]
A professional partnership is a particular
partnership. [Article 1783]
KINDS OF PARTNERS
(1) Capitalist, whose contribution is money or
property;
(2) Industrial, whose contribution is only his industry;
(3) General, whose liability to third persons extends
to his separate property;
(4) Limited, whose liability to third persons is limited
to his capital contribution;
(5) Managing, designated to manage the affairs or
business of the partnership;
(6) Liquidating, takes charge of the winding up of
partnership affairs;
(7) By estoppel, who is not really a partner but is
liable as such for the protection of innocent third
persons;
(8) Continuing, who continues the business after
dissolution of the partnership by admission of a
new partner, or retirement, death or expulsion of
existing partners.
(9) Surviving, who remains a partner after dissolution
by death of any partner;
(10)Subpartner, who is not a member of the
partnership but contracts with a partner with
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regard to the share of the latter in the

partnership;

(11) Ostensible, who takes active part in the business

of the partnership and is known by the public;
(12)Secret, who takes active part in the business, but
is unknown to the third persons as a partner;
(13) Silent, who does not take active part in the business, but may be known to be a partner
by third persons;
(14)Dormant, who does not take active part in the
business and is not known or held out as a
partner;
(15)Original, who has been a partner since the
constitution of the partnership;
(16)Incoming, who is about to be taken as a member
into an existing partnership;
(17) Retiring, who is withdrawing from the
partnership.
Industrial Partner Capitalist Partner
Form of contribution
Industry Money or property
Share in profits
Just and equitable share According to agreement;
if none, in proportion to
contribution
Share in losses
Exempted as to losses as
between partners, but
liable to third persons,
without prejudice to
reimbursement from
capitalist partners
According to agreement; if
none, in proportion to
agreed share in the
profits;
if none, in proportion to
contribution
Engaging in business
Cannot engage in
business for himself,
unless the partnership
expressly permits him to
do so; should he do so
without permission, the
capitalist partners (as well
as industrial partners [De
Leon (2010)]) may (a)
exclude him from the firm,
or (b) avail themselves of
the benefits obtained in
violation of the
prohibition, with right to
damages in either case
[Article 1789]
Cannot engage, for his
own account, in the same
kind of business as that of

the partnership, unless

there is a stipulation to
the contrary; should he do
so, he shall bring to the
common fund any profits
accruing to him from his
transactions and shall
personally bear all the
losses [Article 1808]
DISTINGUISHED FROM OTHER CONTRACTS
Partnership Joint Venture
Operates with firm name
and legal personality
Operates with no firm
name and legal
personality
Generally relates to a
continuing business of
various transactions of a
certain king
Usually limited to a single
transaction
Corporations may not
enter into a partnership
Corporations may enter
into joint ventures
It would seem therefore that under Philippine law, a
joint venture is a form of partnership and should thus
be governed by the laws of partnership. [Auerbach vs.
Sanitary Wares Manufacturing Corp. (1989)]
Partnership Co-Ownership
Generally created by
either express or implied
contract
Generally created by law,
and may exist even
without a contract
Has a separate juridical
personality
Has no separate juridical
personality
Generally, the purpose is
to obtain profits
The purpose is common
enjoyment of a thing or
right
Duration has no limitation An agreement to keep a
thing undivided for more
than 10 years is not
allowed
There is mutual agency
between partners
There is no mutual
representation among coowners
Death or incapacity of a

partner dissolves the

partnership
Death or incapacity of a
co-owner does not
dissolve the co-ownership
Partner cannot dispose of
his interest so as to make
the assignee a partner,
without consent of others
Co-owner can dispose of
his share without consent
of others
Partnership Corporation
Has juridical personality separate and distinct from
its individual members
Can only act through agents

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Partnership Corporation
Composed of an aggregate of individuals
Distributes its profits to those who contributed
capital to the business
Can only be organized where there is a law
authorizing its organization
Taxable as a corporation
Created by agreement Created by law (with SEC
approval)
Involves at least 2 persons Except for a corporation
sole, requires at least 5
incorporators
Personality commences
from the moment of
execution of the contract
Personality commences
from the issuance of
certificate of incorporation
Can exercise any power
authorized by partners
Can exercise only powers
granted by law or those
incidental to its existence
When management is not
agreed upon, every
partner may act for the
partnership
Management is vested in
the board of directors of
trustees
Partners are generally
liable for partnership
debts
Stockholders are liable
only to the extent of their
shares
Partner cannot dispose of
his interest so as to make

the assignee a partner,

without consent of others
Stockholder has the right
to transfer his shares
without consent of others
Duration has no limitation The term is 50 years, but
may be extended
May be dissolved at any
time by one or all of the
partners
May only be dissolved with
the consent of the state
Partnership
Conjugal
Partnership of Gains
Created by voluntary
agreement of 2 or more
partners of either sex
Arises in case the spouses,
of opposite sex, agree
before marriage
Governed by agreement Governed by law
Partnership
Conjugal
Partnership of Gains
Has juridical personality Has no juridical
personality
Commencement date
may be stipulated
Commencement is on the
date of the celebration of
the marriage, and any
stipulation to the contrary
is void
Share in profits may be
stipulated; otherwise, in
proportion to contribution
Share in profits is equal
Management shared by
all partners, unless
otherwise agreed upon
Administration belongs to
the spouses jointly, but
decision of husband
prevails in disagreement
Partner can dispose of
Interest even without
consent of others
Spouse cannot dispose of
interest during marriage,
even with consent
Partnership Voluntary Association
Has juridical personality Has no juridical
personality
Organized for profit Not always organized for

profit
Capital is contributed Capital is not contributed,
although fees are
collected from members
Partnership is primarily
liable; the partners are
liable only subsidiarily
The members are liable
individually for debts
which they authorized or
ratified
Share in profits may be
stipulated; otherwise, in
proportion to contribution
Share in profits is equal
Management shared by
all partners, unless
otherwise agreed upon
Administration belongs to
the spouses jointly, but
decision of husband
prevails in disagreement
Partner can dispose of
Interest even without
consent of others
Spouse cannot dispose of
interest during marriage,
even with consent

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Rights and obligations

of the partnership

RIGHT TO CONTRIBUTION, IN GENERAL

The mutual contribution to a common fund is the
essence of the contract of partnership [De Leon
(2010)]. As such, the partnership has a right to the
contribution (or partners are obliged to contribute).
The money or property thus contributed, or their use
or fruits, becomes a property of the partnership.
To complement this right of the partnership and as
an incident of its separate and distinct juridical
personality, it is allowed by law to acquire any
immovable property or an interest therein. Title so
acquired can be conveyed only in the partnership
name [Article 1774].
OBLIGATION OF PARTNERS TO THE
PARTNERSHIP
WITH RESPECT TO CONTRIBUTION OF MONEY OR
PROPERTY
With respect to contribution of property, a partner is
obliged to:
(1) To contribute, at the beginning of the partnership
or at the stipulated time, the money, property or
industry which he undertook to contribute;

(2) In case a specific and determinate thing is to be

contributed:
(a) To warrant against eviction in the same
manner as a vendor; and
(b) To deliver to the partnership the fruits of the
property promised to be contributed, from
the time they should have been delivered,
without need of demand [Article 1786];
(3) In case a sum of money is to be contributed, or in
case he took any amount from the partnership
coffers, to indemnify the partnership for:
(a) Interest; and
(b) Damages, from the time he should have
complied with his obligation, or from the time he
converted the amount to his own use, respectively
[Article 1788].
Article 1788 is an exception to the general rule that in
obligations consisting in the payment of a sum of
money, the indemnity for damages consists only in
the payment of interest [Article 2209].
AMOUNT OF CONTRIBUTION

General rule: The partners are obliged to contribute

equal shares to the capital of the partnership.
Exception: When there is an agreement to the
contrary, the contribution shall follow such
agreement [Article 1790].
DETERMINING VALUE OF CONTRIBUTION IN GOODS

To determine the value when the contribution

consists, in whole or in part, of goods, their appraisal
must be made:
(1) In the manner prescribed in the partnership
contract;
(2) In the absence thereof, by experts chosen by the
partners and according to current prices.
Subsequent changes in the price will be for the
benefit or will be suffered by the partnership [Article
1787].
ADDITIONAL CAPITAL CONTRIBUTION

In case of an imminent loss of the business of the

partnership, any partner who refuses to contribute
an additional share to the capital, except an industrial
partner, to save the venture, shall be obliged to sell
his interest to the other partners, unless there is an
agreement to the contrary [Article 1791].
Requisites:
(1) There is an imminent loss of the business of the
partnership;
(2) The majority of the capitalist partners are of the
opinion that an additional contribution to the
common fund would save the business;
(3) The capitalist partner refuses deliberately (not
because of financial inability) to contribute an
additional share to the capital; and
(4) There is no agreement that even in case of
imminent loss of the business, the partners are not
obliged to contribute.

PROHIBITION AGAINST ENGAGING IN BUSINESS

General rule: A capitalist partner cannot engage for

his own account in any operation which is of the kind
of business in which the partnership is engaged.
Should he do so, he shall bring to the common fund
any profit accruing to him from his transactions,
while personally bearing all the losses.
Exception: The rule does not apply when there is a
stipulation to the contrary [Article 1808].
RISK OF LOSS OF THINGS CONTRIBUTED

In case the contribution consists in the use and fruits

of specific and determinate things, which are not
fungible, the risk of loss shall be borne by the partner
who owns them.
The partnership bears the risk if the things:
(1) Are fungible;
(2) Cannot be kept without deterioration;
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(3) Were contributed to be sold; or

(4) Were brought and appraised in the inventory.
In the last case, the claim is limited to the
appraised value of the things [Article 1795].
REMEDY IN CASE OF NON-COMPLIANCE
A partner is guilty of estafa if he misappropriates
partnership money or property received by him for a
specific purpose of the partnership [Liwanag v. CA
(1997)].
However, mere failure on the part of an industrial
partner to return to the capitalist partner the capital
brought by him into the partnership is not an act
constituting estafa. The action that may be brought
to recover the money is a civil one [US v. Clarin
(1910)].
OBLIGATION OF PARTNERS TO THE
PARTNERSHIP
WITH RESPECT TO CONTRIBUTION OF INDUSTRY
With respect to contribution of industry, a partner is
also obliged to contribute it at the stipulated time.
PROHIBITION AGAINST ENGAGING IN BUSINESS

General rule: An industrial partner cannot engage in

business for himself. Should he do so, the capitalist
partners, as well as industrial partners [De Leon
(2010)], may either:
(1) Exclude him from the firm; or
(2) Avail themselves of the benefit which he may
have obtained.
Exception: He may engage in business for himself
when the partnership expressly permits him to do so.
[Article 1789]
RIGHT TO APPLY PAYMENT TO PARTNERSHIP
CREDIT
General rule: A partner authorized to manage, who
collects a demandable sum owed to him in his own
name from a person who also owes the partnership a
demandable sum, is obliged to apply the sum
collected to both credits pro rata, even if he issued a

receipt for his own credit only.

Requisites:
(1) There exist at least two debts, one where the
collecting partner is creditor, and the other,
where the partnership is the creditor;
(2) Both debts are demandable; and
(3) The partner who collects is authorized to manage
and actually manages the partnership.
Exceptions:
(1) In case the receipt was issued for the account of
the partnership credit only, however, the sum
shall be applied to the partnership credit alone.
(2) When the debtor declares, pursuant to Article
1252, at the time of making the payment, to which
debt the sum must be applied, it shall be so
applied [Article 1792].
The law, through this rule, safeguards the interests
of the partnership by preventing the possibility of
their being subordinated by the managing partner to
his own interest, by intentionally failing to collect
partnership credits to collect his own, to the
prejudice of the other partners. This possibility does
not exist in case the partner is not authorized to
manage [De Leon (2010)].
RIGHT TO RETURN OF CREDIT RECEIVED
A partner, who is authorized to manage or not, is
obliged to bring to the partnership capital what he
received when:
(1) He has received, in whole or in part, his share of
the partnership credit;
(2) The other partners have not collected their
shares; and
(3) The partnership debtor has become insolvent.
This obligation exists even when he issued a
receipt for his share only. [Article 1793]
Ratio: In this case, the debt becomes a bad debt. It
would be unfair for the partner who already collected
not to share in the loss of the other partners.
RIGHT TO INDEMNITY FOR DAMAGES
Every partner is responsible to the partnership for
damages suffered by it through his fault.
COMPENSATION OF LIABILITY

General rule: The liability for damages cannot be setoff

or compensated by profits or benefits which the
partner may have earned for the partnership by his
industry.
Ratio: The partner has the obligation to secure the
benefits for the partnership. As such, the
requirement for compensation, that the partner be
both a creditor and a debtor of the partnership at the
same time, is not complied with [Article 1278; De Leon
(2010)].
Exception: The court may equitably lessen the
liability if, through his extraordinary efforts in other
activities of the partnership, unusual profits were

realized [Article 1794].

Note, however, that there is still no compensation.

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SUIT FOR DAMAGES

Before a partner may sue another for alleged

fraudulent management and resultant damages,
liquidation must first be effected to determine the
extent of the damage. Without liquidation of
partnership affairs, a partner cannot claim damages
[Soncuya v. De Luna (1939)].
RESPONSIBILITY OF THE PARTNERSHIP TO
PARTNERS
In the absence of any stipulation to the contrary,
every partner is an agent of the partnership for the
purpose of its business. As such, it is responsible to
every partner:
(1) For amounts, and the corresponding interest
from the time the expenses were made, which he
may have disbursed on behalf of the partnership;
(2) For obligations he may have contracted in good
faith in the interest of the partnership business;
and
(3) For risks in consequence of the management of
the partnership. [Article 1796]

Rights and obligations

of partners inter se
RIGHT TO ASSOCIATE ANOTHER IN SHARE
Every partner may associate another person with him
in his share.
The admission of the associate to the partnership,
however, requires the consent of all the other
partners, even if the partner having an associate is a
managing partner [Article 1804].
SUBPARTNERSHIP

The arrangement refers to a contract of

subpartnership, which is a partnership within a
partnership, distinct and separate from the main
partnership [De Leon (2010)]. The associate is
sometimes referred to as a subpartner.
Since admission of the subpartner as a new partner
in the main partnership amounts to a modification of
the original contract, it requires the unanimous
consent of the partners.
RIGHT TO ACCESS PARTNERSHIP BOOKS
The partnership books shall be kept at the place
agreed upon by the partners.
Without such agreement, they shall be kept at the
principal place of business of the partnership.
Every partner shall, at any reasonable hour, have
access to and may inspect and copy any of them.
[Article 1805]
BASIS OF RIGHT

Since a partner is a co-owner of partnership

properties, which include the books, and has a right

to participate in the management of its affairs, the

books should not be in the exclusive custody or
control of any one partner [De Leon (2010)].
REASONABLE HOUR

"Any reasonable hour" has been interpreted to mean

reasonable hours on business days throughout the
year, not merely during some arbitrary period of a
few days chosen by the managing partner [Pardo v.
Lumber Co., (1925)].
RIGHT TO A FORMAL ACCOUNT
Any partner shall have the right to a formal account
as to partnership affairs:
(1) If he is wrongfully excluded from the partnership
business or possession of its property by his copartners;
(2) If the right exists under the terms of any
agreement;
(3) If, without his consent, a partner has derived
profits from any transaction connected with the
formation, conduct, or liquidation of the
partnership or from any use of partnership
property;
(4) Whenever other circumstances render it just and
reasonable [Article 1809].
ACCRUAL OF RIGHT

General rule: The right to a formal account of

partnership affairs accrues only when the
partnership is dissolved. Ample protection is already
provided.
Exceptions: In special and unusual cases under
Article 1809, formal accounting may be demanded
even before dissolution.
PERSON OBLIGED

The obligation to account rests on the managing or

active partner (or, after dissolution, in the liquidating
or surviving partner).
PRESCRIPTION OF ACTION

The right, on the part of the other partners, to

demand an accounting exists while the partnership
exists. The prescriptive period begins to run only
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upon the dissolution when the final accounting is

done [Fue Leung v. IAC (1989)].
NATURE OF ACTION

The action for accounting is an action in personam,

regardless of the incidental fact that some of the
assets of the partnership are real property [Emnace v.
CA (2001)].
PROPERTY RIGHTS OF PARTNERS
IN GENERAL

The property rights of a partner are:

(1) Rights in specific partnership property;
(2) Interest in the partnership; and
(3) Right to participate in the management [Article
1810].
PARTNERSHIP PROPERTY AND PARTNERSHIP CAPITAL

Capital Property

With constant value Value varies with market

conditions
Includes only actually
contributed and promised
capital
Includes the contributions
and property acquired by
the partnership
OWNERSHIP OF CERTAIN PROPERTY

(1) The ownership of property used by the partnership

depends on the intention of the parties, which
may be drawn from an express agreement or
their conduct.
(a) A partner may allow the property to be used
by the partnership without transfer of
ownership, contributing only the use or
enjoyment thereof.
(b) He may also hold title to partnership property,
without acquiring ownership thereof [Article
1819].
(2) Property acquired by a partner with partnership
funds is presumed to be partnership property.
(3) The same presumption also arises when the
property is indicated in the partnership books as
partnership asset.
(4) Other factors may be considered to determine
ownership of the property.
RIGHTS IN SPECIFIC PROPERTY

The partners are co-owners of specific partnership

property. As such:
(1) A partner has an equal right with his partners to
possess such property for partnership purposes.
For other purposes, the consent of his partners is
necessary. If the partner is excluded, he may ask
for:
(a) Formal accounting [Article 1809]; or
(b) Dissolution by judicial decree [Article 1831].
(2) A partner's right in such property is not
assignable, except when all the partners assign
their rights in the same property.
(3) The right is not subject to attachment or
execution, except on claim against the
partnership. Also, in case of such attachment, the
partners, or any of them, or the representatives of
a deceased partner, cannot claim any right under
the homestead or exemption laws;
(4) The right is also not subject to legal support
under Article 291 [Article 1811].
A partner's right in specific property cannot be
separately assigned, since it is impossible to
determine the extent of his beneficial interest in the
property until after the liquidation of partnership
affairs.
It is also not subject to support precisely because it is
a property of the partnership and not of the
individual partners.

INTEREST IN THE PARTNERSHIP

A partner's interest in the partnership is his share of

the profits and surplus [Article 1812]. This interest is
subject to support and may be assigned.
RIGHTS OF ASSIGNEE

Assignment by a partner of his whole interest in the

partnership does not, of itself:
(1) Dissolve the partnership; or
(2) Entitle the assignee to:
(a) Interfere in the management or
administration of the partnership business or
affairs;
(b) Require information or account of
partnership; or
(c) Inspect the partnership books.
It merely entitles the assignee to:
(1) Receive the profits to which the assigning partner
was entitled;
(2) In case of fraud in management, avail himself of
the usual remedies;
(3) In case of dissolution:
(a) Receive his assignor's interest; and
(b) Require an accounting from the date only of
the last account agreed to by all the partners
[Article 1813].
CHARGING OF PARTNERSHIP INTEREST BY PERSONAL
CREDITOR
OF PARTNERS

Partnership creditors are preferred over the personal

creditors of the partners as regards partnership
property [Article 1827].
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However, on due application by any judgment

creditor of a partner, a competent court may:
(1) Charge the interest of the partner for the
satisfaction of the judgment debt;
(2) Appoint a receiver of the share of the profits and
of any other money due or to fall due to the
partner; and
(3) Make all other orders, directions, accounts and
inquiries, which the debtor partner might have
made, or which the circumstances may require.
The interest charged may be redeemed before
foreclosure or, in case of sale directed by the court,
may be purchased without causing dissolution:
(1) With separate property, by one or more of the
partners; or
(2) With partnership property, by one or more of the
partners, will consent of all, except the debtor
partner.
The partner debtor is not deprived of his right under
exemption laws. [Article 1814]
CHARGING ORDER

A charging order subjects the interest in the

partnership of the debtor partner with the payment
of an unsatisfied amount of a judgment debt against

him, with the least interference with the partnership

business and the rights of the partners. By virtue of
the order, any amount or portion thereof which the
partnership would otherwise pay to the debtor
partner is instead given to the judgment creditor [De
Leon (2010)].
RIGHT TO PROFITS AND OBLIGATION FOR
LOSSES
RULES FOR DISTRIBUTION OF PROFITS AND LOSSES

The distribution of profits and losses shall be in

accordance with the following rules
(1) They shall be distributed in conformity with the
agreement.
(2) If only the share in profits has been stipulated, the
share in the losses shall be in the same
proportion.
(3) In the absence of any stipulation:
(a) The share in the profits of the capitalist
partners shall be in proportion to their
contributions.
(b) The losses shall be borne by the capitalist
partners, also in proportion to the
contributions;
(c) The share of the industrial partners in the
profits is that share as may be just and
equitable. If he also contributed capital, he
will receive a share of the profits in proportion
to his contribution; and
(d) The industrial partner, who did not contribute
capital, is not liable for losses [Article 1797].
DESIGNATION OF SHARE BY THIRD PERSONS

The designation of the share of each one in the

profits and losses can be delegated to a third person,
in which case, it cannot be impugned:
(a) Unless it is manifestly inequitable;
(b) The partner impugning it has begun to execute
the designation; or
(c) The partner has not impugned it within 3 months
from the time he had knowledge thereof.
The designation cannot be delegated to one of the
partners [Article 1798].
EXCLUSION OF PARTNER FROM SHARE

A stipulation excluding one or more partners from

any share in the profits or losses is void [Article 1799].
With reference to the industrial partner, since the law
itself excludes him from losses, a stipulation
exempting him from the losses is naturally valid
since if the partnership fails to realize profits, he can
no longer withdraw his work or labor. He cannot but
share in the loss.
OBLIGATION TO RENDER INFORMATION
Partners shall render on demand true and full
information of all things affecting the partnership to
any partner or the legal representative of any
deceased partner or of any partner under legal
disability [Article 1806].

BASIS OF OBLIGATION

This obligation arises from the mutual trust and

confidence among partners. Thus, there must be no
concealment between them in all matters affecting
the partnership [De Leon (2010].
OBLIGATION TO ACCOUNT AND ACT AS TRUSTEE
Every partner must account to the partnership for
any benefit, and hold as a trustee for it any profits
derived by him without the consent of the other
partners from any transaction connected with the
formation, conduct, or liquidation of the partnership
or from any use by him of its property [Article 1807].
BASIS OF OBLIGATION

This obligation also arises from the fiduciary nature

of the partnership relation, and operates to prevent a
partner from making a secret profit out of the
partnership. Note that the obligation extends from
the formation to the liquidation of the partnership.
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Operation of the Partnership

FIRM NAME
Every partnership shall operate under a firm name,
which may or may not include the name of one or
more of the partners.
Those who, not being members of the partnership,
include their names in the firm name, shall be
subject to the liability of a partner [Article 1815].
RIGHT TO CHOOSE FIRM NAME

General rule: The partners may adopt any firm name

desired.
Exceptions:
(1) They cannot use a name that is "identical or
deceptively or confusingly similar to an existing
[partnership] or corporation or to any other name
already protected by law or is patently deceptive,
confusing or contrary to existing laws" [Section 18,
Corporation Code].
(2) Use of names of deceased partner in law firms is
"permissible provided that the firm indicates in all
its communications that said partner is
deceased" [Rule 3.02, Code of Professional
Responsibility].
MANAGEMENT OF THE PARTNERSHIP
Management of the partnership is primarily
governed by the agreement of the partners in the
articles of partnership. It may be managed by:
(1) All the partners; or
(2) A number of partners appointed as managers,
which may be appointed:
(a) In the articles of partnership; or
(b) After constitution of the partnership.
POWERS OF A MANAGING PARTNER

General rule: The partner designated as manager in

the articles may execute all acts of administration
despite opposition by the other partners.

Exception: He cannot do so when he acts in bad faith.

REVOCATION OF POWER OF MANAGING PARTNER

The powers of the managing partner may be

revoked:
(1) If appointed in the articles of partnership, when:
(a) There is just or lawful cause for revocation;
and
(b) The partners representing the controlling
interest revoke such power.
(2) If appointed after the constitution of the
partnership, at any time and for any cause [Article
1800].
MANAGEMENT BY TWO OR MORE PARTNERS

When there are two or more managing partners

appointed, without specification of their duties or
without a stipulation on how each one will act:
(1) Each one may separately execute all acts of
administration.
(2) If any of them opposes the acts of the others, the
decision of the majority prevails.
(3) In case of a tie, the partners owning the
controlling interest will decide [Article 1801].
Requisites:
(1) Two or more partners have been appointed as
managers;
(2) There is no specification of their respective duties;
and
(3) There is no stipulation that one of them shall not
act without the consent of all the others.
STIPULATION ON UNANIMITY OF MANAGING PARTNERS

In case there is a stipulation that none of the

managing partners shall act without the consent of
others, the concurrence of all is necessary for the
validity of the acts.
The absence or disability of one cannot be alleged,
unless there is imminent danger of grave or
irreparable injury to the partnership. [Article 1802]
MANAGEMENT WHEN MANNER NOT AGREED UPON

When there is no agreement as to the manner of

management, the following rules apply:
(1) All the partners are considered agents (mutual
agency). Whatever any one does alone binds the
partnership, unless there is a timely opposition to
the act, under Article 1801.
(2) Any important alteration in the immovable
property of the partnership, even if useful to the
partnership, requires unanimity. If the alteration
is necessary for the preservation of the property,
however, consent of the others is not required [De
Leon (2010)].
If the refusal is manifestly prejudicial to the
partnership, court intervention may be sought [Article
1803].
INSTANCES OF MUTUAL AGENCY

(1) Partners can dispose of partnership property even

when in partnership name [Article 1819].

(2) An admission or representation made by any

partner concerning partnership affairs is evidence
against the partnership [Article 1820].
(3) Notice to any partner of any matter relating to
partnership affairs is notice to the partnership
[Article 1821].

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(4) Wrongful act or omission of any partner acting for

partnership affairs makes the partnership liable
[Article 1822].
(5) Partnership is bound to make good losses for
wrongful acts or misapplications of partners
[Article 1823].

Obligations of partnership/
partners to third persons

LIABILITY OF PARTNERS FOR PARTNERSHIP

CONTRACTS
The partnership is primarily liable for contracts
entered into in its name and for its account, under its
signature and by a person authorized to act for it.
Upon exhaustion of its assets, all partners are liable
pro rata with all their property.
Any partner may enter into a separate obligation to
perform a partnership contract [Article 1816].
NATURE OF INDIVIDUAL LIABILITY

The pro-rating should be understood to mean

equally or jointly, not proportionally [De Leon (2010),
citing Article 1839(4); note, however, that this
conclusion does not find textual support in Article
1816].
The fact that a partner has left the country and the
payment of his share of the liability cannot be
enforced [Co-Pitco v. Yulo (1907)] or his liability is
condoned by the creditor [Island Sales v. United
Pioneers (1975)] cannot increase the liability of the
other partners.
The liability is subsidiary or secondary. It only arises
upon exhaustion of partnership assets. However,
they may be joined as party defendants in the action
against the partnership, subject to their right to prior
exhaustion of partnership assets [Cia. Maritima v.
Muoz (1907)].
General rule: The partners are liable pro-rata and
subsidiarily, with all their property.
Exceptions:
(1) A third person who transacted with the
partnership can hold the partners solidarily liable
for the whole obligation if the case falls under
Articles 1822 or 1823 [Muasque v. CA (1985)].
(2) A person admitted as a partner into an existing
partnership is liable for all the obligations of the
partnership arising before his admission, except
that his liability shall be satisfied only out of

partnership property, unless there is a stipulation

to the contrary.
LIABILITY OF INDUSTRIAL PARTNER

An industrial partner, who is not liable for losses, is

not exempt from this liability. However, he can
recover the amount he has paid from the capitalist
partners, unless there is a stipulation to the contrary.
[Cia. Maritima v. Muoz (1907)].
STIPULATION AGAINST INDIVIDUAL LIABILITY

Any stipulation against this liability is void and does

not affect third persons. The stipulation, however, is
valid only as among the partners [Article 1817].
LIABILITY OF PARTNERS FOR PARTNERSHIP
CONTRACTS
ACTS APPARENTLY FOR THE CARRYING ON OF USUAL
BUSINESS

General rule: Every partner is an agent of the

partnership for the purpose of its business and any
act of a partner which is apparently for the carrying
on of the usual business of the partnership binds the
latter, including the execution of any instrument in
the partnership name [1st par., Article 1818].
Exception: The partnership is not bound when:
(1) The partner has in fact no authority to act; AND
(2) The person with whom he deals has knowledge of
such fact.
ACTS NOT APPARENTLY FOR CARRYING ON OF THE USUAL
BUSINESS

General rule: Acts of a partner which is not apparently

for carrying on of the usual business does not bind
the partnership.
Exception: The partnership is bound if the other
partners authorized him to do the act.
ACTS OF STRICT DOMINION

General rule: One or some of the partners have no

authority to do the following acts of strict dominion:
(a) Assign the partnership property in trust for
creditors or on the assignee's promise to pay the
debts of the partnership;
(b) Dispose of the goodwill of the business;
(c) Do any other act which makes it impossible to
carry on the ordinary business of the partnership;
(d) Confess a judgment;
(e) Enter into a compromise concerning a
partnership claim or liability;
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(f) Submit a partnership claim or liability to

arbitration;
(g) Renounce a claim of the partnership.
Exception: They may do so if:
(1) Authorized by all the partners; OR
(2) The other partners have abandoned the business.
ACTS IN CONTRAVENTION OF RESTRICTION

Any act of a partner in contravention of a restriction

on authority does not bind the partnership to
persons having knowledge of the restriction [Article

1818].
CONVEYANCE OF REAL PROPERTY OF
PARTNERSHIP
TITLE IN THE PARTNERSHIP NAME

Any partner may convey the property in the name of

the partnership.
The partnership can recover it, except when:
(1) The act of the partner binds the partnership
under 1st par., Article 1818 (i.e., for the carrying on of
the usual business of the partnership); or
(2) If not so authorized, the property has been
conveyed by the grantee, or a person claiming under
him, to a holder for value and without knowledge
that the partner exceeded his authority.
TITLE IN THE PARTNERSHIP NAME

A partner, authorized to act under 1st par., Article

1818, may convey, in his own name, the equitable
interest of the partnership.
TITLE IN THE NAME OF ONE OR MORE (NOT ALL) OF THE
PARTNERS
AND THE RECORD DOES NOT DISCLOSE THE RIGHT
OF THE PARTNERSHIP

The partners having title may convey title.

The partnership may recover it if the act does not
bind it under 1st par., Article 1818, unless the
purchaser or his assignee is:
(1) A holder for value; AND
(2) Without knowledge that the act exceeded
authority.
TITLE IN THE NAME OF ONE OR MORE OR ALL THE
PARTNERS,
OR IN A THIRD PERSON IN TRUST FOR THE PARTNERSHIP

A partner may convey equitable title in the

partnership name or in his own name, when the act
is authorized under 1st par., Article 1818.
TITLE IN THE NAMES OF ALL THE PARTNERS

The conveyance must be executed by all of them to

pass all their rights in the property [Article 1819].
LIABILITY OF PARTNERSHIP FOR ADMISSION BY
PARTNER
An admission or representation by any partner
concerning partnership affairs within the scope of his
authority may be used as evidence against the
partnership [Article 1820].
LIABILITY OF PARTNERSHIP FOR WRONGFUL
ACTS OF PARTNER
The partnership is solidarily liable with the partner
who causes loss or injury, or incurs any penalty
through any wrongful act or omission:
(1) In the ordinary course of the business of the
partnership; or
(2) Not in such ordinary course of business, but with
the authority of his co-partners [Article 1822].
LIABILITY OF THE PARTNERSHIP FOR
MISAPPLICATION OF MONEY
OR PROPERTY RECEIVED
The partnership is liable for losses suffered by a third

person whose money or property was:

(1) Received by a partner, acting within the scope of
his apparent authority, who also misapplied it; or
(2) Received by the partnership, in the course of its
business, but is misapplied by any partner while it
is in the custody of the partnership [Article 1823].
LIABILITY OF OTHER PARTNERS
FOR WRONGFUL ACTS OR MISAPPLICATION
All partners are solidarily liable with the partnership
for its liabilities under Articles 1822 and 1823 [Article
1824].
This is without prejudice to the guilty partner being
liable to the other partners. However, as far as third
persons are concerned, the partnership is
answerable.
LIABILITY IN CASE OF PARTNERSHIP BY
ESTOPPEL
PARTNER BY ESTOPPEL

A person, not a partner, may become a partner by

estoppel, and be liable as a partner, when, by words,
spoken or written, or conduct, he:
(1) Directly represents himself to anyone as a partner
in an existing or non-existing partnership; or
(2) Indirectly represents himself by consenting to
another representing him as such partner. [Article
1825]
LIABILITY OF PARTNER BY ESTOPPEL

A partner by estoppel is liable:

(1) To any person who extended credit to the
partnership, actual or apparent, relying on his
representation; and
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(2) In case the representation was made publicly, to

any person, who extended such credit, whether or
not the communication to said creditor was made
with the knowledge of the partner.
NATURE OF LIABILITY

He is liable in the following manner:

(1) When there is an existing partnership and all the
partners consented to the representation, a
partnership liability results, and the partner by
estoppel is liable as though he were a partner;
(2) When there is an existing partnership and not all
the partners consented, or when there is no
existing partnership and all those represented as
partners consented to the representation, he is
liable jointly and pro rata with those who
consented to the representation;
(3) When there is an existing partnership but none of
the partners consented, or when there is no
existing partnership and not all of those
represented as partners consented to the
representation, he is liable separately.
EFFECTS OF ACTS OF PARTNER BY ESTOPPEL

The acts of a partner by estoppel have the following

effects:

(1) A person, thus representing himself as a partner

of other persons, becomes an agent of the latter,
in the same manner as though he were a partner
in fact, with respect to persons who rely upon the
representation.
(2) When all the members of the existing partnership
consent to the representation, a partnership act
or obligation results.
(3) In all other cases, only a joint act or obligation
results. [Article 1825]
No real partnership is created by estoppel. It is only
with respect to third persons that partnership by
estoppel is recognized.
ESTABLISHING LIABILITY

The basic elements in connection with establishment

of liability as a partner if based on the doctrine of
estoppel must encompass:
(1) Proof by plaintiff that he was individually aware of
the defendant's representations as to his being a
partner or that such representations were made
by others and not denied or refuted by the
defendant;
(2) Reliance on such representations by the plaintiff;
and
(3) Lack of any denial or refutation of the statements
by the defendant; such denial need not precede
plaintiff's acting therein if the denial was
forthcoming promptly upon hearing of the
representations, and if, by prudence and diligence
the plaintiff might have learned of the truth or
untruth of the representations.
Persons who knowingly assume to act as a
corporation without authority to do so are liable as
general partners for all debts, liabilities and
damages incurred. [Section 21, Corporation Code] A
partnership de facto is created.
LIABILITY OF INCOMING PARTNER
A person admitted as a partner is liable as the other
partners for obligations subsequent to his admission.
He is also liable for obligations incurred before his
admission, but will be satisfied only out of the
partnership property, unless otherwise stipulated.
(Article 1826)
Ratio:
(1) The new partner partakes of the benefits of the
partnership property and an already established
business.
(2) He has every means of obtaining full knowledge
of the debts of the partnership and remedies that
amply protect his interest [De Leon (2010)].
However, an incoming partner may fully assume the
obligations of a retiring partner.
NOTICE TO OR KNOWLEDGE OF THE
PARTNERSHIP
The following operate as notice to or knowledge of

the partnership:
(1) Notice to any partner of any matter relating to
partnership affairs;
(2) Knowledge of the partner acting in the particular
matter acquired while a partner;
(3) Knowledge of the partner acting in the particular
matter then present to his mind; and
(4) Knowledge of any other partner who reasonably
could and should have communicated it to the
acting partner.
These do not apply in case of fraud on the
partnership committed by or with the consent of the
partner [Article 1821].
PREFERENCE OF PARTNERSHIP CREDITORS
Partnership creditors are preferred over personal
creditors of the partners with respect to partnership
property.
However, personal creditors may ask the attachment
and public sale of the share of the partner debtor in
the partnership assets. [Article 1827]
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Ratio: The partnership, as a legal entity distinct from

its members, should apply its property to the
payment of its debts in preference to the claim of any
partner or his individual creditors.

Dissolution and winding up

CONCEPTS
Dissolution is the change in the relation of the
partners caused by any partner ceasing to be
associated in the carrying on of the business. It is
different from the winding-up of the business [Article
1828].
Winding up is the actual process of settling the
partnership business or affairs after dissolution. It
involves collection and distribution of partnership
assets, payment of debts, and determination of the
value of the interest of the partners in the
partnership.
Termination is the point in time when all partnership
affairs are completely wound up and finally settled. It
signifies the end of the partnership life.
EFFECT OF DISSOLUTION ON EXISTENCE OF
PARTNERSHIP
Dissolution does not terminate the existence of the
partnership, which continues until the winding up of
partnership affairs is completed. [Article 1829].
The dissolution of a partnership must not be
understood in the absolute and strict sense so that
at the termination of the object for which it was
created the partnership is extinguished, pending the
winding up of some incidents and obligations of the
partnership, but in such case, the partnership will be
reputed as existing until the juridical relations arising
out of the contract are dissolved [Testate Estate of

Mota v. Serra (1926)].

CAUSES OF DISSOLUTION
WITHOUT VIOLATION OF THE AGREEMENT

Without violation of the partnership agreement

between the partners:
(1) By the termination of the definite term or
particular undertaking specified in the
agreement;
(2) By the express will of any partner, who must act
in good faith, when no definite term or particular
is specified;
(3) By the express will of all the partners who have
not assigned their interests or suffered them to
be charged for their separate debts, either before
or after the termination of any specified term or
particular undertaking;
(4) By the expulsion of any partner from the business
bona fide in accordance with such a power
conferred by the agreement between the
partners.
If, after the expiration of the definite term or
particular undertaking, the partners continue the
partnership without making a new agreement, the
firm becomes a partnership at will. [Article 1785]
Verily, any one of the partners may, at his sole
pleasure, dictate a dissolution of the partnership at
will. He must, however, act in good faith, not that the
attendance of bad faith can prevent the dissolution
of the partnership but that it can result in a liability
for damages. [Ortega v. CA (1995)]
Bad faith, in the context here used, is no different
from its normal concept of a conscious and
intentional design to do a wrongful act for a
dishonest purpose or moral obliquity. [Ortega v. CA
(1995)]
IN CONTRAVENTION OF THE AGREEMENT

In contravention of the agreement between the

partners, where the circumstances do not permit a
dissolution under any other provision of this article,
by the express will of any partner at any time.
[E]ven if there is a specified term, one partner can
cause its dissolution by expressly withdrawing even
before the expiration of the period, with or without
justifiable cause. Of course, if the cause is not
justified or no cause was given, the withdrawing
partner is liable for damages but in no case can he
be compelled to remain in the firm. With his
withdrawal, the number of members is decreased,
hence, the dissolution. [Rojas v. Maglana (1990)]
BY OPERATION OF LAW

(1) By any event which makes it unlawful for the

business of the partnership to be carried on or for
the members to carry it on in partnership;
(2) When a specific thing which a partner had
promised to contribute to the partnership,
perishes before the delivery; in any case by the

loss of the thing, when the partner who

contributed it having reserved the ownership
thereof, has only transferred to the partnership
the use or enjoyment of the same; but the
partnership shall not be dissolved by the loss of
the thing when it occurs after the partnership has
acquired the ownership thereof;
(3) By the death of any partner;

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(4) By the insolvency of any partner or of the

partnership;
(5) By the civil interdiction of any partner;
BY DECREE OF COURT

(1) A partner may apply in court for dissolution when:

(a) A partner has been declared insane in any
judicial proceeding or is shown to be of
unsound mind;
(b) A partner becomes in any other way incapable
of performing his part of the partnership
contract;
(c) A partner has been guilty of such conduct as
tends to affect prejudicially the carrying on of
the business;
(d) A partner willfully or persistently commits a
breach of the partnership agreement, or
otherwise so conducts himself in matters
relating to the partnership business that it is
not reasonably practicable to carry on the
business in partnership with him;
(e) The business of the partnership can only be
carried on at a loss;
(f) Other circumstances render a dissolution
equitable.
(2) A person who acquires the interest of a partner
may likewise apply:
(a) After the termination of the specified term or
particular undertaking;
(b) At any time if the partnership was a
partnership at will when the interest was
assigned or when the charging order was
issued. [Articles 1830 and 1831]
Judicial determination as to dissolution may be
resorted to when the facts which may cause such
dissolution are open to dispute.
OTHER CAUSES

(1) When a new partner is admitted into an existing

partnership;
(2) When any partner retires;
(3) When the other partners assign their rights to the
sole remaining partner;
(4) When all the partners assign their rights in the
partnership property to third persons. [Article
1840]
The statutory enumeration of the causes of
dissolution is exclusive. [De Leon (2010)]

EFFECT OF DISSOLUTION ON AUTHORITY OF

PARTNERS
Upon dissolution, the authority of the partners to
represent the partnership is confined only to acts
necessary to wind up partnership affairs or to
complete transactions begun but not then finished.
WITH RESPECT TO PARTNERS

The authority of partners to act for the partnership is

terminated, with respect to partners:
(1) When the dissolution is not by the act, insolvency
or death of a partner; or
(2) When the dissolution is by such act, insolvency or
death, when the partner acting for the
partnership has knowledge or notice of the cause.
Otherwise, each co-partner is still liable for his
share in the liability created by the partner acting
for the partnership, as if there was no dissolution.
[Article 1832]
WITH RESPECT TO THIRD PERSONS

With respect to persons not partners:

(1) After dissolution, a partner can bind the
partnership by any act appropriate for winding up
partnership affairs or completing transactions
unfinished at dissolution.
(2) He can also bind it by any transaction which
would bind the partnership as if dissolution had
not taken place, provided the other party to the
transaction:
(a) Had extended credit to the partnership prior
to dissolution and had no knowledge or notice
thereof; or
(b) Had not so extended credit, but had known of
the partnership prior to dissolution, and,
having no knowledge or notice of dissolution,
the fact had not been advertised in a
newspaper of general circulation in the place
(or in each place if more than one) at which
the partnership business was regularly carried
on.
Note the character of notice required. As to persons
who extended credit to the partnership prior to
dissolution, notice must be actual. As to persons who
merely knew of the existence of the partnership,
publication in a newspaper of general circulation in
the place of business of the partnership is sufficient.
LIABILITY OF PARTNERS IN TRANSACTIONS AFTER
DISSOLUTION

General rule: The liability of a partner, in general, is

the same as in ordinary contracts (pro rata and
subsidiary).
Exceptions: In the following cases, however, the
liability shall be satisfied out of the partnership assets
alone:
(1) When the partner had been, prior to the
dissolution, unknown as a partner to the person
with whom the contract is made;

(2) When the partner had been, prior to the

dissolution, so far unknown or inactive in
partnership affairs that the business reputation of
the partnership could not be said to have been in

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any degree due to his connection with it. [Article

1834]
CASES WHERE PARTNERSHIP IS NOT BOUND
Any act of a partner after dissolution in no case binds
the partnership in the following cases:
(1) Where the partnership is dissolved because it is
unlawful to carry on the business, unless the act
is appropriate for winding up partnership affairs;
(2) Where the partner has become insolvent; or
(3) Where the partner has no authority to wind up
partnership affairs, except by a transaction with
one who:
(a) Had extended credit to the partnership prior to
dissolution and had no knowledge or notice of his
want of authority; or
(b) Had not extended credit to the partnership prior
to dissolution, and, having no knowledge or
notice of his want of authority, the fact of his want
of authority has not been advertised.
PARTNERSHIP BY ESTOPPEL AFTER DISSOLUTION

Article 1834 does not affect the liability under Article

1825 of any person who, after dissolution, represents
himself or consents to another representing him as a
partner in a partnership engaged in carrying on
business [Article 1834].
CONTRACTS AFTER DISSOLUTION BY SPECIFIC
CAUSES
General rule: A contract entered into by a partner
acting for the partnership after dissolution by act,
death or insolvency of a partner binds the other
partners.
Exceptions:
(1) The dissolution being by act of any partner, the
partner acting for the partnership had knowledge
of the dissolution; or
(2) The dissolution being by death or insolvency of a
partner, the partner acting for the partnership
had knowledge or notice of the death or
insolvency. [Article 1833]
The general rule assumes that the partner acting for
the partnership has no knowledge or notice of the
specific cause of dissolution.
EFFECT OF DISSOLUTION ON EXISTING LIABILITY
OF PARTNERS
General rule: Dissolution does not of itself discharge
the existing liability of any partner.
Exception: A partner may be so relieved when there is
an agreement to that effect between:
(1) Himself;
(2) The partnership creditor; and

(3) The person or partnership continuing the

business.
Such agreement may be inferred from the course of
dealing between the creditor having knowledge of
the dissolution and the person or partnership
continuing the business.
In case of dissolution by death, the individual
property of a deceased partner is liable for
obligations of the partnership incurred while he was
a partner, after payment of his separate debts.
[Article 1835]
WINDING UP PARTNERS
WHO MAY WIND UP

The following partners have the right to wind up the

partnership affairs:
(1) Those designated in an agreement;
(2) Those who have not wrongfully dissolved the
partnership; or
(3) The legal representative of the last surviving
partner, who was not insolvent.
However, any partner or his legal representative or
assignee may obtain winding up by the court, upon
cause shown. [Article 1836]
MANNER OF WINDING UP

Thus, winding up of partnership affairs may be done:

(1) Extrajudicially, by the partners themselves; or
(2) Judicially, under the control and direction of the
proper court.
NATURE OF JUDICIAL LIQUIDATION

The action for liquidation of the partnership is

personal. The fact that sale of assets, including real
property, is involved does not change its character,
such sale being merely a necessary incident of the
liquidation of the partnership, which should precede
and/or is part of its process of dissolution.
[Claridades v. Mercader (1966)]
POWERS OF WINDING UP PARTNER

In general, the liquidating partner may perform acts

appropriate for the winding up of partnership affairs.
RIGHTS OF PARTNERS IN CASE OF DISSOLUTION
DISSOLUTION WITHOUT VIOLATION OF THE AGREEMENT

Unless otherwise agreed, when dissolution is caused

in any way, except in contravention of the
partnership agreement, each partner, as against his
co-partners and all partners claiming through them
in respect of their interests in the partnership, may
have the partnership property applied to discharge
the partnership liabilities, and the surplus applied in
cash to the net amount owing to the respective
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partners [referred to as the right under 1st par., Article

1837].
In case of dissolution by bona fide expulsion of a
partner, and the expelled partner is discharged from
all partnership liabilities, either by payment or
agreement to that effect (Article 1835), he shall

receive only the net amount due him from the

partnership.
DISSOLUTION IN CONTRAVENTION OF THE AGREEMENT

Rights of partner who has not caused the dissolution

wrongfully:
(a) To demand the right under 1st par., Article 1837;
(b) To be indemnified for damages for breach of the
agreement against the partner who caused the
dissolution wrongfully;
(c) To continue the business in the same name, by
themselves or jointly with others, during the
agreed term for the partnership and for that
purpose may possess the partnership property
provided they:
(i) Secure the payment by bond approved by the
court; or
(ii) Pay any partner who has caused the
dissolution wrongfully the value of his interest
in the partnership, less any damages
recoverable, and indemnity against all present
or future partnership liabilities.
Rights of partner who has caused the dissolution
wrongfully:
(a) If the business is not continued, all the rights 1st
par., Article 1837, subject to liability for damages;
(b) If the business is continued, the right, as against
his co-partners and all claiming through them, to:
(i) Ascertainment, without considering the value
of the goodwill of the business, and payment to
him in cash the value of his partnership
interest, less any damage, or have the
payment secured by a bond approved by the
court; and
(ii) Be released from all existing liabilities of the
partnership. [Article 1837]
The goodwill of a business may be defined to be the
advantage which it has from its establishment or
from the patronage of its customers, over and above
the mere value of its property and capital. The
goodwill (which includes the firm name) is part of the
partnership assets and may be subject of sale. [De
Leon (2010)]
RIGHTS OF PARTNERS IN CASE OF RESCISSION
A partner, induced by fraud or misrepresentation to
become a partner, may rescind the contract.
Where a partnership contract is rescinded on such
grounds, the party entitled to rescind, without
prejudice to any other right, is entitled:
(1) After satisfying partnership liabilities to third
persons, to a lien on, or right of retention of, to
the surplus of the partnership property:
(a) For any sum of money paid by him for the
purchase of an interest in the partnership; and
(b) For any capital or advances contributed by
him.

(2) After satisfying partnership liabilities to third

persons, to stand in the place of partnership
creditors for any payments made by him in
respect of the partnership liabilities; and
(3) To be indemnified by the person guilty of the
fraud or making the representation against all
debts and liabilities of the partnership. [Article
1838]
SETTLING OF ACCOUNTS BETWEEN PARTNERS
Subject to any agreement to the contrary, the
following rules shall be observed in settling accounts
between partners after dissolution.
COMPOSITION OF PARTNERSHIP ASSETS

The assets of the partnership are:

(1) The partnership property; and
(2) The contributions of the partners necessary for
the payment of all the liabilities.
In accordance with the subsidiary liability of the
partners, the partnership property shall be applied
first to satisfy any liability of the partnership.
AMOUNT OF CONTRIBUTION FOR LIABILITIES

The rules on distribution of losses [Article 1979] shall

determine the contributions of the partners. As such:
(1) The contribution shall be in conformity with the
agreement.
(2) If only the share in profits has been stipulated, the
contribution shall be in the same proportion.
(3) In the absence of any stipulation, the contribution
shall be in proportion to the capital contribution.
ENFORCEMENT OF CONTRIBUTION

The following persons have the right to enforce the

contributions:
(1) An assignee for the benefit of creditors;
(2) Any person appointed by the court; or
(3) To the extent of the amount which he has paid in
excess of his share of the partnership liability, any
partner or his legal representative.
The individual property of a deceased partner shall
be liable for the contributions.
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ORDER OF APPLICATION OF ASSETS

The partnership liabilities shall rank, in order of

payment, as follows:
(a) Those owing to creditors other than partners;
(b) Those owing to partners other than for capital
and profits;
(c) Those owing to partners in respect of capital;
(d) Those owing to partners in respect of profits.
DOCTRINE OF MARSHALING OF ASSETS

When partnership property and the individual

properties of the partners are in possession of a court
for distribution:
(1) Partnership creditors shall have priority on
partnership property; and
(2) Separate creditors on individual property, saving
the rights of lien of secured creditors.

(3) Anything left from either shall be applied to

satisfy the other.
DISTRIBUTION OF PROPERTY OF INSOLVENT PARTNER

Where a partner has become insolvent or his estate

is insolvent, the claims against his separate property
shall rank in the following order:
(1) Those owing to separate creditors;
(2) Those owing to partnership creditors;
(3) Those owing to partners by way of contribution.
[Article 1839]
RIGHTS OF CREDITORS OF DISSOLVED
PARTNERSHIP
CREDITORS OF DISSOLVED PARTNERSHIP
AS CREDITORS OF NEW PARTNERSHIP

In the following cases, creditors of the dissolved

partnership are also creditors of the person or
partnership continuing the business:
(1) When the business is continued without
liquidation, and the cause of dissolution is:
(a) Admission of a new partner into the existing
partnership;
(b) Retirement or death of any partner, and his
rights to partnership property are assigned to:
(i) Two or more of the partners; or
(ii) One or more of the partners and one or
more third persons.
(c) Retirement of all but one partner, and their
rights to partnership property are assigned to
the remaining partner, who continues the
business, either alone or with others;
(d) Wrongful dissolution by any partner, and the
remaining partners continue the business,
either alone or with others;
(e) Expulsion of a partner, and the remaining
partners continue the business, either alone or
with others.
(2) When the cause of dissolution is the retirement or
death of any partner, and business is continued
with the consent of the retired partner or the
representative of the deceased partner, without
assignment of their rights to partnership
property.
(3) When the cause of dissolution is the assignment
by all the partners or their representatives of their
rights in partnership property to one or more third
persons who promise to pay the debts and who
continue the business of the partnership.
LIABILITY OF A NEW PARTNER

The liability to the creditors of the dissolved

partnership of a new partner in the partnership
continuing the business shall be satisfied out of the
partnership property alone. However, he may,
through agreement, assume individual liability.
PRIORITY OF CREDITORS OF DISSOLVED PARTNERSHIP

The creditors of dissolved partnership have prior

right to any claim of the retired partner or the

representative of the deceased partner against the

person or partnership continuing the business.
Nothing in this article shall be held to modify any
right of creditors to set aside any assignment on the
ground of fraud.
EFFECT OF CONTINUING USE OF PARTNERSHIP NAME

The use by the person or partnership continuing the

business of the partnership name, or the name of a
deceased partner as part thereof, shall not of itself
make the individual property of the deceased partner
liable for any debts contracted by such person or
partnership. [Article 1840]
RETIRED OR REPRESENTATIVE OF DECEASED
PARTNER
Unless otherwise agreed upon, when any partner
retires or dies, and the business is continued without
any settlement of accounts as between him or his
estate and the person or partnership continuing the
business, he or his legal representative as against
such person or partnership, subject to the prior rights
of creditors of the dissolved partnership:
(1) May have the value of his interest at the date of
dissolution ascertained; and
(2) Shall receive as an ordinary creditor:
(a) An amount equal to the value of his interest in
the dissolved partnership with interest; or
(b) At his option or at the option of his legal
representative, in lieu of interest, the profits
attributable to the use of his right in the property of
the dissolved partnership. [Article 1841]
RIGHT TO AN ACCOUNT
The right to an account of his interest shall accrue to
any partner, or his legal representative, at the date of
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dissolution, in the absence of any agreement to the

contrary, as against:
(1) The winding up partners;
(2) The surviving partners; or
(3) The person or partnership continuing the
business [Article 1842].
EXISTENCE OF RIGHT

[T]he right to demand an accounting exists as long

as the partnership exists. Prescription begins to run
only upon the dissolution of the partnership when
the final accounting is done. [Fue Leung v. IAC
(1989)]
NEED FOR LIQUIDATION

The profits of the business cannot be determined by

taking into account the result of one particular
transaction instead of all the transactions had.
Hence, the need for a general liquidation before a
member of a partnership may claim a specific sum as
his share of the profits. [Sison v. McQuaid (1953)]
However, no liquidation is necessary when there is
already a settlement or an agreement as to what he
shall receive [De Leon (2010)].

Limited partnership
DEFINITION
A limited partnership is one formed by two or more
persons under the provisions of the following article,
having as members one or more general partners
and one or more limited partners. The limited
partners as such shall not be bound by the
obligations of the partnership. [Article 1843]
CHARACTERISTICS
(1) A limited partnership is formed by compliance
with the statutory requirements [Article 1844].
(2) The business is controlled or managed by one or
more general partners, who are personally liable
to creditors [Articles 1848 and 1850].
(3) One or more limited partners contribute to the
capital and share in the profits but do not
manage the business and are not personally
liable for partnership obligations beyond their
capital contributions [Articles 1845, 1848 and
1856].
(4) Obligations or debts are paid out of the
partnership assets and the individual property of
the general partners.
(5) The limited partners may have their contributions
back subject to conditions prescribed by law
[Articles 1844 and 1957].
ADVANTAGES OF LIMITED PARTNERSHIP
(1) For general partners, to secure capital from
others while retaining control and supervision for
the business;
(2) For limited partners, to have a share in the profits
without risk of personal liability.
GENERAL AND LIMITED PARTNER
DISTINGUISHED
General Partner Limited Partner
Extent of liability
Personally, but
subsidiarily, liable for
obligations of the
partnership
Only to the extent of his
capital contributions
Right to participate in management
Unless otherwise agreed
upon, all general partners
have an equal right to
manage the partnership
No right to participate in
management
Nature of contribution
Cash, property or industry Cash or property only, not
industry
Property party in proceedings by or against partnership
Proper party Not proper party, unless:

(1) He is also a general

partner; or
(2) Where the object of
the proceedings is to
enforce his right against
or liability to the
partnership
Name in firm name
Name may appear in the
firm name
Name must not appear in
the firm name
Prohibition to engage in other business
Prohibited (qualified) Not prohibited
Effect of retirement, death, insanity or insolvency
Dissolves partnership Does not dissolve; rights
transferred to executor or
administrator for selling
his estate
Assignability of interest

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General Partner Limited Partner

Not assignable Assignable
GENERAL AND LIMITED PARTNERSHIP
DISTINGUISHED
General Partnership Limited Partnership
Creation
May be constituted in any
form, with exceptions
Partners must:
(1) Sign and swear to a
certificate in compliance
with Article 1844; and
(2) File the certificate for
record in the SEC
Composition
Only general partners One or more general, and
one or more limited
partners
Firm name
Must contain the word
"Company" (SEC Memo
Circ No. 14-00), except for
professional partnerships
May or may not include
the name of one or more
of the partners
Must include the word
"Limited" (SEC Memo Circ
No. 14-00)
Must not include name of
limited partners, unless:
(1) It is also the surname
of a general partner; or
(2) Prior to the time when

the limited partner

became such, the
business has been carried
on under a name in which
his surname appeared.
Rules governing dissolution and winding up
Articles 1828-1842 Articles 1860-1863
FORMATION OF LIMITED PARTNERSHIP
Two or more persons desiring to form a limited
partnership shall:
(1) Sign and swear to a certificate stating the items
in Article 1844; and
(2) File for record the certificate in the Office of the
Securities and Exchange Commission.
A limited partnership is formed if there has been
substantial compliance in good faith with the
requirements.
A partnership cannot become a limited partner. A
general partnership may be changed into a limited
one. A partner in the former general partnership may
become a limited partner in the limited partnership
formed [De Leon (2010)].
PURPOSE OF FILING

The purpose of the requirement of filing the

certificate is to give actual or constructive notice to
potential creditors or persons dealing with the
partnership to acquaint them with its essential
features, including the limited liability of limited
partners.
NO SUBSTANTIAL COMPLIANCE

When there is failure to substantially comply with the

requirements:
(1) In relation to third persons, the partnership is
general, unless they recognized that the firm as a
limited partnership;
(2) As between the partners, the partnership remains
limited, since they are bound by their agreement
[De Leon (2010)].
FIRM NAME

The surname of a limited partner shall not appear in

the partnership name unless:
(1) It is also the surname of a general partner; or
(2) Prior to the time when the limited partner
became such, the business had been carried on
under a name in which his surname appeared.
A limited partner whose surname appears in a
partnership name contrary to this prohibition is liable
as a general partner to partnership creditors who
extend credit without actual knowledge that he is not
a general partner.
FALSE STATEMENT IN THE CERTIFICATE

If the certificate contains a false statement, one who

suffers loss by reliance thereon may hold liable any
party to the certificate who knew the statement to be
false:
(1) At the time he signed the certificate; or

(2) Subsequently, but within a sufficient time before

the statement was relied upon to enable him to
cancel or amend the certificate, or to file a
petition for its cancellation or amendment.
Requisites:
(1) The partner knew the statement to be false at the
time he signed the certificate, or subsequently,
but having sufficient time to cancel or amend it,
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or file a petition for its cancellation or

amendment, and he failed to do so;
(2) The person seeking to enforce liability has relied
upon the false statement in transacting business
with the partnership; and
(3) The person suffered loss as a result of reliance
upon such false statement.
ADMISSION OF ADDITIONAL LIMITED PARTNERS

After the formation of a limited partnership,

additional limited partners may be admitted upon
filing an amendment to the original certificate.
GENERAL AND LIMITED PARTNER AT THE SAME TIME

A person may be a general and a limited partner in

the same partnership at the same time, provided
that this fact shall be stated in the certificate.
A person who is a general, and also at the same time
a limited partner, shall have all the rights and
powers and be subject to all the restrictions of a
general partner; except that, in respect to his
contribution, he shall have the rights against the
other members which he would have had if he were
not also a general partner. [Article 1853]
MANAGEMENT OF LIMITED PARTNERSHIP
A limited partner shall not become liable as a
general partner unless, in addition to the exercise of
his rights and powers as a limited partner, he takes
part in the control of the business [Article 1848].
MANAGEMENT BY GENERAL PARTNERS

Only the general partners have the right to manage

the partnership. The limited partners are not so
entitled.
LIABILITY OF LIMITED PARTNER FOR PARTICIPATING IN
CONTROL

A limited partner is liable as a general partner (i.e.,

subsidiarily liable) for the obligations of the
partnership if he takes part in the control of the
business. The control contemplated is active
participation in the management of the business. It
does not contemplate mere giving of advice to
general partners which may be followed or not.
The abstinence of the limited partner from
participation in the transaction of the business of the
firm is essential to his exemption from personal
liability. [De Leon (2010)].
POWERS OF GENERAL PARTNER

General rule: A general partner shall have the rights

and powers and be subject to all restrictions and

liabilities of a partner in a partnership without

limited partners.
Thus, a general partner is vested with the entire
control of the business. It is in consideration of his
unlimited personal liability for the obligation of the
partnership that he is granted the general authority
to manage.
Qualification: Written consent or ratification of the
specific act by all the limited partners is necessary to
authorize the general partners to:
(1) Do any act in contravention of the certificate;
(2) Do any act which would make it impossible to
carry on the ordinary business of the partnership;
(3) Confess a judgment against the partnership;
(4) Possess partnership property, or assign their
rights in specific property, for other than a
partnership purpose;
(5) Admit a person as a general partner;
(6) Admit a person as a limited partner, unless the
right to do so is given in the certificate;
(7) Continue the business with partnership property
on the death, retirement, insanity, civil
interdiction or insolvency of a general partner,
unless the right so to do is given in the certificate.
[Article 1851]
The acts enumerated are acts of strict dominion.
OBLIGATIONS OF A LIMITED PARTNER
OBLIGATIONS RELATED TO CONTRIBUTION

The contributions of a limited partner may be cash or

property, but not services [Article 1845].
A limited partner is liable for partnership obligations
when he contributes services instead of only money
or property to the partnership [De Leon (2010)].
A limited partner is liable to the partnership:
(1) For the difference between his actual contribution
and that stated in the certificate as having been
made;
(2) For any unpaid contribution which he agreed in
the certificate to make in the future at the time
and on the conditions stated in the certificate. [1st
par., Article 1858]
He holds as trustee for the partnership:
(1) Specific property stated in the certificate as
contributed by him, but which was not
contributed or which has been wrongfully
returned; and
(2) Money or other property wrongfully paid or
conveyed to him on account of his contribution.
[2nd par., Article 1858]
The liabilities under Article 1858 can be waived or
compromised only by the consent of all members.
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Such waiver or compromise, however, shall not affect

the right to enforce said liabilities of a creditor:
(1) Who extended credit, or

(2) Whose claim arose, after the filing or before a

cancellation or amendment of the certificate, to
enforce such liabilities.
Even after a limited partner has rightfully received
the return in whole or in part of his capital
contribution, he is still liable to the partnership for
any sum, not in excess of such return with interest,
necessary to discharge its liabilities to all creditors:
(1) Who extended credit, or
(2) Whose claims arose, before such return. [Article
1858]
A person who has contributed capital to a
partnership, erroneously believing that he has
become a limited partner, but his name appears in
the certificate as a general partner or he is not
designated as a limited partner, is not personally
liable as a general partner by reason of his exercise
of the rights of a limited partner, provided:
(1) On ascertaining the mistake, he promptly
renounces his interest in the profits of the
business or other compensation by way of income
[Article 1852];
(2) He does not participate in the management of
the business [Article 1848]; and
(3) His surname does not appear in the partnership
name [Article 1846].
LIABILITY TO PARTNERSHIP CREDITORS

General rule: A limited partner is not liable as a

general partner. His liability is limited to the extent of
his contributions.
Exceptions: The limited partner is liable as a general
partner when:
(1) His surname appears in the partnership name,
with certain exceptions.
(2) He takes part in the control of the business.
LIABILITY TO SEPARATE CREDITORS

On due application to a court of competent

jurisdiction by any separate creditor of a limited
partner, the court may:
(1) Charge his interest with payment of the
unsatisfied amount of such claim;
(2) Appoint a receiver; and
(3) Make all other orders, directions and inquiries
which the circumstances of the case may require.
The interest so charged may be redeemed with the
separate property of any general partner, but may
not be redeemed with partnership property. [Article
1862]
Note: In a general partnership, the interest may be
redeemed with partnership property with the
consent of all the partners whose interests are not
charged [Article 1814].
RIGHTS OF A LIMITED PARTNER
RIGHTS OF LIMITED PARTNER, IN GENERAL
A limited partner shall have the same rights as a
general partner to:

(1) Require that the partnership books be kept at the

principal place of business of the partnership;
(2) To inspect and copy any of them at a reasonable
hour;
(3) To demand true and full information of all things
affecting the partnership;
(4) To demand a formal account of partnership
affairs whenever circumstances render it just and
reasonable; and
(5) To ask for dissolution and winding up by decree
of court;
(6) To receive a share of the profits or other
compensation by way of income; and
(7) To receive the return of his contribution provided
the partnership assets are in excess of all its
liabilities.
RIGHT TO TRANSACT BUSINESS WITH PARTNERSHIP

A limited partner may:

(1) Loan money to the partnership;
(2) Transact other business with the partnership; and
(3) Receive a pro rata share of the partnership assets
with general creditors if he is not also a general
partner.
Limitations: A limited partner, with respect to his
transactions with the partnership, cannot:
(1) Receive or hold as collateral security any
partnership property; or
(2) Receive any payment, conveyance, or release
from liability if it will prejudice the right of third
persons.
Violation of the prohibition is considered a fraud on
the creditors of the partnership. [Article 1854]
RIGHT TO SHARE IN PROFITS

A limited partner may receive from the partnership

the share of the profits or the compensation by way
of income stipulated for in the certificate.
This right is subject to the condition that partnership
assets will still be in excess of partnership liabilities
after such payment.
Ratio: Otherwise, he will receive a share to the
prejudice of third-party creditors.
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In determining the partnership liabilities, the

liabilities to the limited partners (for their
contributions) and to general partners (whether for
contributions or not) are not included.
RIGHT TO RETURN OF CONTRIBUTION

A limited partner may have his contributions

withdrawn or reduced when:
(1) All the liabilities of the partnership, except
liabilities to general partners and to limited
partners on account of their contributions, have
been paid or there remains property of the
partnership sufficient to pay them;
(2) The consent of all members is had, unless the
return may be demanded as a matter of right;

and
(3) The certificate is cancelled or so amended as to
set forth the withdrawal or reduction.
The return of his contributions may be demanded, as
a matter of right (even when not all the other
partners consent), the return of his contribution
when (1) and (2) above are complied with:
(1) On the dissolution of the partnership;
(2) Upon the arrival of the date specified in the
certificate for the return; or
(3) After the expiration of a 6-month notice in writing
given by him to the other partners, if no time is
fixed in the certificate for:
(a) the return of the contribution; or
(b) the dissolution of the partnership.
General rule: A limited partner, irrespective of the
nature of his contribution has only the right to
demand and receive cash in return for his
contribution.
Exceptions: He may receive his contribution in a form
other than cash when:
(1) There is a statement in the certificate to the
contrary; or
(2) All the members of the partnership consent.
PREFERENCE OF LIMITED PARTNERS

General rule: The limited partners stand on equal

footing as to their:
(1) Compensation by way of income;
(2) Return of contribution; or
(3) Any other matter.
Exception: By an agreement of all the partners
(general and limited) in the certificate, priority or
preference may be given to some limited partners
over others with respect to the matters enumerated.
[Article 1855]
RIGHT TO ASSIGN INTEREST

The interest of a limited partner is assignable. The

assignee may become:
(1) A substituted limited partner; or
(2) A mere assignee.
A substituted limited partner is a person admitted to
all the rights of a limited partner who has died or has
assigned his interest in a partnership. He has all the
rights and powers, and is subject to all the
restrictions and liabilities of his assignor, except
those liabilities which:
(1) The assignee was ignorant of; and
(2) Cannot be ascertained from the certificate.
An assignee is only entitled to receive the share of the
profits or other compensation by way of income, or
the return of contribution, to which the assignor
would otherwise be entitled. He has no right:
(1) To require any information or account of the
partnership transactions;
(2) To inspect the partnership books.
An assignee has the right to become a substituted

limited partner if:

(1) All the partners consent thereto;
(2) The assignor, being empowered to do so by the
certificate, gives him that right.
An assignee becomes a substituted limited partner
when the certificate is appropriately amended.
[Article 1859]
RIGHT TO ASK FOR DISSOLUTION

A limited partner may have the partnership dissolved

and its affairs wound up:
(1) When his demand for the return of his
contribution is denied although he has a right to
such return;
(2) When he has such right, but his contribution is
not paid because the partnership property is
insufficient to pay its liabilities. [Article 1857]
CAUSES OF DISSOLUTION OF LIMITED
PARTNERSHIP
A limited partnership is dissolved in much the same
way and causes as an ordinary partnership [De Leon
(2010)].
General rule: The retirement, death, insolvency,
insanity or civil interdiction of a general partner
dissolves the partnership.
Exception: It is not so dissolved when the business is
continued by the remaining general partners:
(1) Under a right to do so stated in the certificate; or
(2) With the consent of all members. [Article 1860]
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On the death of a limited partner, his executor or

administrator shall have:
(1) All the rights of a limited partner for the purpose
of settling his estate; and
(2) The power to constitute an assignee as a
substituted limited partner, if the deceased was
so empowered in the certificate.
The estate of a deceased limited partner shall be
liable for all his liabilities as a limited partner. [Article
1861]
SETTLEMENT OF ACCOUNTS
ORDER OF PAYMENT

In settling accounts after dissolution, the liabilities of

the partnership shall be entitled to payment in the
following order:
(1) Those to creditors, including limited partners
except those on account of their contributions, in
the order of priority as provided by law;
(2) Those to limited partners in respect to their share
of the profits and other compensation by way of
income in their contributions;
(3) Those to limited partners in respect to the capital
of their contributions;
(4) Those to general partners other than for capital
and profits;
(5) Those to general partners in respect to profits;

(6) Those to general partners in respect to capital.

Note: In settling accounts of a general partnership,
those owing to partners in respect to capital enjoy
preference over those in respect to profits.
SHARE IN THE PARTNERSHIP ASSETS

The share of limited partners in respect to their

claims for capital, profits, or for compensation by way
of income, is in proportion of their contribution,
unless:
(1) There is a statement in the certificate as to their
share in the profits; or
(2) There is a subsequent agreement fixing their
share. [Article 1863]
AMENDMENT OR CANCELLATION OF
CERTIFICATE
WHEN CERTIFICATE IS CANCELLED

The certificate shall be cancelled when:

(1) The partnership is dissolved; or
(2) All limited partners cease to be such.
WHEN CERTIFICATE IS AMENDED

A certificate shall be amended when:

(1) There is a change in the name of the partnership
or in the amount or character of the contribution
of any limited partner;
(2) A person is substituted as a limited partner;
(3) An additional limited partner is admitted;
(4) A person is admitted as a general partner;
(5) A general partner retires, dies, becomes insolvent
or insane, or is sentenced to civil interdiction and
the business is continued;
(6) There is a change in the character of the business
of the partnership;
(7) There is a false or erroneous statement in the
certificate;
(8) There is a change in the time as stated in the
certificate for the dissolution of the partnership or
for the return of a contribution;
(9) A time is fixed for the dissolution of the
partnership, or the return of a contribution, no
time having been specified in the certificate; or
(10) The members desire to make a change in any
other statement in the certificate in order that it
shall accurately represent the agreement among
them.
REQUIREMENTS FOR AMENDMENT OR CANCELLATION

To amend or cancel a certificate:

(1) The amendment or cancellation must be in
writing;
(2) It must be signed and sworn to by all the
members including the new members, and the
assigning limited partner in case of substitution
or addition of a limited or general partner; and
(3) The writing to amend (with the certificate, as
amended) or to cancel must be filed for record in
the SEC.
From the moment the amended certificate/writing or

a certified copy of a court order granting the petition

for amendment has been filed, such amended
certificate shall thereafter be the certificate of
partnership. [Article 1865]

Contract of agency

DEFINITION
By the contract of agency, a person binds himself to
render some service or to do something in
representation or on behalf of another, with the
consent or authority of the latter [Article 1868].
Agency may refer to both a contract, as defined in
the provision, and the representative relation
created.
As a relation, agency is fiduciary (based on trust and
confidence), which implies a power in an agent to
contract with a third person on behalf of a principal.
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The basis of agency is representation [Victorias

Milling v. CA (2000)].
In an agent-principal relationship, the personality of
the principal is extended through the facility of the
agent. In so doing, the agent, by legal fiction,
becomes the principal, authorized to perform all acts
which the latter would have him do. Such a
relationship can only be effected with the consent of
the principal, which must not, in any way, be
compelled by law or by any court. [Orient Air v. CA
(1991)]
CHARACTERISTICS
The contract of agency is:
(1) Consensual, perfected by mere consent;
(2) Nominate, has its own name;
(3) Preparatory, entered into as a means to enter into
other contracts;
(4) Principal, does not depend on another contract
for existence and validity;
(5) Bilateral, if for compensation, giving rise to
reciprocal rights and obligations, but unilateral, if
gratuitous, creating obligations only for the
agent.
CONSTITUTION OF AGENCY
ESSENTIAL ELEMENTS

(1) There is consent, express or implied, of the parties

to establish the relationship;
(2) The object is the execution of a juridical act in
relation to third persons;
(3) The agent acts as a representative and not for
himself; and
(4) The agent acts within the scope of his authority.
[Rallos v. Felix Go Chan (1978)]
PARTIES

(1) Principal, one whom the agent represents and

from whom he derives his authority; and
(2) Agent, who acts for and represents the principal,
having derivative authority in carrying out the

business of the latter.

Juridical persons such as corporations and
partnerships can be principals and agents [Article
1919(4)].
CAPACITY OF PARTIES

(1) A principal must have legal capacity to enter into

contract in his own right.
(2) An agent must have legal capacity to enter into
the contract of agency, although he may not have
capacity to enter into the particular contract
subject of agency.
Ratio: One who acts through an agent in law does
the act himself. As such, the capacity to act by an
agent depends in general on the capacity of the
principal to do the act himself as if he were present.
INTENTION OF PARTIES

On the part of the principal, there must be an actual

intention to appoint or an intention naturally
inferable from his words or actions; and on the part of
the agent, there must be an intention to accept the
appointment and act on it. [Victorias Milling v. CA
(2000)]
General rule: In the absence of such intent, there is
generally no agency.
Exceptions:
(1) Agency by estoppel; and
(2) Agency by operation of law.
CONSENT OF PARTIES

An agency is either express or implied. This is true on

the part of the principal as well as on the part of the
agent. It does not require express appointment and
acceptance.
As to the principal, the appointment of an agent may
be express, or implied:
(1) From his acts;
(2) From his silence or lack of action; or
(3) From his failure to repudiate the agency, knowing
that another person is acting on his behalf
without authority.
The appointment may be oral, unless the law
requires a specific form. [Article 1869]
As to the agent, acceptance may also be express, or
implied.
(1) From his acts which carry out the agency;
(2) From his silence or inaction according to the
circumstances [Article 1870];
(3) Both the principal and the agent being present if:
(a) The principal delivers his power of attorney to
the agent; and
(b) The agent receives it without any objection
[Article 1871];
(4) Both the principal and the agent being
absent, when:
(a) The principal transmits his power of attorney
to the agent, who receives it without any
objection; or

(b) When the principal entrusts to him by letter or

telegram a power of attorney with respect to
the business in which he is habitually engaged
as an agent, and he did not reply to the letter
or telegram.
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In other cases between persons who are absent,

acceptance cannot be implied from the silence of the
agent. [Article 1872]
POWER OF ATTORNEY

A power of attorney is an instrument in writing by

which one person, as principal, appoints another as
his agent and confers upon him the authority to
perform certain specified acts of kinds of acts on his
behalf. The written authorization itself is the power
of attorney. It has also been called a "letter of
attorney."
Its primary purpose is not to define the authority of
the agent, but to evidence the authority of the agent
to third parties with whom the agent deals. The
person holding the power of attorney is designated
as an "attorney-in-fact."
FORM OF CONTRACT

General rule: There are no formal requirements

governing the appointment of an agent.
Exceptions:
(1) When the law requires a specific form [2nd par.,
Article 1869];
(2) When a sale of piece of land or any interest
therein is through an agent, in which case the
authority shall be in writing; otherwise the sale is
void [Article 1874];
(3) When the law requires a special power of attorney
[Article 1878].
DESIGNATION BY THE PARTIES

The manner in which the parties designate the

relationship is not controlling. The use of this term
("agent") in one clause of the contract cannot
dominate the real nature of the agreement as
revealed in other clauses, no less than in the caption
["agency agreement"] of the agreement itself.
[Albadejo y Cia v. Phil. Refining (1923)]
ACTS DELEGATED

General rule: What a person may do in person, he

may do through another.
Exceptions:
(1) Personal acts, which the law or public policy
requires to be performed personally (e.g., to vote,
make a will, make statements under oath, or
attend board meetings as director or trustee of a
corporation);
(2) Criminal acts;
(3) Acts not allowed by law to be done by the
principal.
PRESUMPTION OF EXISTENCE

General rule: It [agency] must exist as a fact. The law

makes no presumption thereof. The person alleging

it has the burden of proof to show, not only the fact
of its existence, but also its nature and extent.
[People v. Yabut (1977)]
Exceptions: A presumption of agency may arise:
(1) Where an agency may arise by operation of law
(e.g., all the partners being considered agents of
the partnership when the manner of
management has not been agreed upon); or
(2) To prevent unjust enrichment. [De Leon (2010)]
COMMUNICATION OF EXISTENCE OF AGENCY

There are two ways of giving notice of agency (that a

person has given a power of attorney to a third
person), with different effects:
(1) If a person specially informs another (e.g., by
letter), the person appointed as agent is
considered such with respect to the person
specially informed;
(2) If a person states by public advertisement, the
person appointed as agent is considered such
with regard to any person.
In either case, the power of the agent continues in
full force until the notice is rescinded in the same
manner in which it was given. [Article 1873]
DUTY OF THIRD PERSON

The person dealing with the agent must act with

ordinary prudence and reasonable diligence.
Obviously, if he knows or has good reason to believe
that the agent is exceeding his authority, he cannot
claim protection. [Keeler Electric v. Rodriguez (1922)]
EFFECT
EXTENSION OF PERSONALITY

It bears stressing that in an agent-principal

relationship, the personality of the principal is
extended through the facility of the agent. In so
doing, the agent, by legal fiction, becomes the
principal, authorized to perform all acts which the
latter would have him do. [Litonjua v. Eternit Corp.
(2006)]
THEORY OF IMPUTED KNOWLEDGE

An important implication of this extension of

personality is the general rule that knowledge of the
agent is imputed to the principal even though the
agent never communicated such knowledge to the
principal.
Requisites:
(1) Actual notice to the agent;
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(2) Notice must pertain to a matter of fact and not of

law;
(3) The fact must be within the scope of the agent's
authority.
Thus, it is only logical that the agent is required to
notify the principal of all matters that came to his
attention that are material to the subject matter of
the agency.

Exceptions:
(1) Where the agent's interests are adverse to those
of the principal;
(2) Where the agent's duty is not to disclose the
information (e.g., he is informed by way of
confidential information);
(3) Where the person claiming the benefit of the rule
colludes with the agent to defraud the principal.
DISTINGUISHED FROM OTHER CONTRACTS
Agency Partnership
Representation
An agent acts only for the
principal
A partner acts for the
other partners, the
partnership and himself
Control
An agent's power to bind
the principal is subject to
the latter's control
A partner's power to bind
his co-partners is not
subject to their control
Personal liability
An agent does not
assume personal liability,
if he acts within the scope
of his authority
A partner is personally
liable with all his property,
after exhaustion of the
partnership properties
Share in profits
An agent is not entitled to
profits, only compensation
A partner is entitled to a
share in the profits of the
partnership
One factor which most clearly distinguishes agency
from other legal concepts is control; one person the
agent agrees to act under the control or direction
of another the principal. Indeed, the very word
"agency" has come to connote control by the
principal. The control factor, more than any other,
has caused the courts to put contracts between
principal and agent in a separate category. [Victorias
Milling v. CA (2000)]
Agency Independent Contractor
Control
An agent acts under the
control and instruction of
the principal
An independent
contractor is not subject to
control, except insofar as

the result of the work is

concerned
Liability for tort
Principal is liable for torts
committed by the agent
with the scope of his
authority
Employer is not liable for
torts committed by the
independent contractor
Sub-agents
Agents of the agent is still
subject to the control of
the principal
Employees of
independent contractor
are not subject to control
of his employer
Agency Lease of Service
Basis
Representation Employment
Purpose
Execution of juridical acts
in relation to third persons
Execution of piece of work
or rendition of service
Authorized acts
Juridical acts (creation,
modification, extinction of
relations with third
parties)
Material acts only
Discretion
An agent is authorized to
exercise discretion
Ordinarily, lessor performs
only ministerial functions
Parties
Three parties are involved Two parties are involved
Agency Lease of Property
Control
An agent acts under the
control and instruction of
the principal
A lessee is not subject to
the control of the lessor

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Agency Lease of Property

Things involved
Agency may involve things
other than property
Lease of property involves
property only
Binding power
An agent can bind the

principal
Lessee cannot bind the
lessor
Agency to Sell Sale
Ownership of goods
Principal retains
ownership
Buyer acquires ownership
Payment
An agent delivers the
proceeds of the sale to the
principal
A buyer pays the purchase
price
Return of goods
Generally, an agent can
return goods unsold
Generally, a buyer cannot
return the goods bought
Dealing with the goods
An agent deals with the
goods according to the
instructions of the
principal
A buyer, being the owner,
can deal with the goods as
he pleases
Agency to Buy Sale
Ownership of goods
Ownership is acquired in
behalf of the principal
Ownership is transferred
to the buyer
Changes in price
Generally, any change in
the price is borne by the
principal
A buyer cannot adjust the
price already agreed upon
Payment
Price is paid in behalf of
the principal
Price is paid by the buyer
Agency Guardianship
Person represented
An agent represents a
capacitated person
A guardian represents an
incapacitated person
Source of authority
An agent is appointed by
the principal
A guardian is appointed
by the court
Control

An agent is subject to the

control of the principal
A guardian is not subject
to the control of the ward
Binding power
An agent can make the
principal principally liable
A guardian has no power
to impose personal
liability on the ward
Agency Trust
Title and control of property
Title passes to the trustee Title retained by principal
Control
An agent is subject to the
control of the principal
A trustee is only subject to
the stipulated guidance of
the cestui
Termination
In general, an agency may
be revoked at any time
In general, a trust may be
terminated only when its
purpose is fulfilled

Kinds of agency

KINDS OF AGENCY, IN GENERAL

AS TO MANNER OF ITS CREATION

(1) Express;
(2) Implied.
AS TO CAUSE OR CONSIDERATION

(1) Gratuitous; or
(2) Compensated or onerous.
Agency is presumed to be for a compensation, unless
there is proof to the contrary [Article 1875].
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AS TO EXTENT OF BUSINESS COVERED

(1) Universal;
(2) General; or
(3) Special.
AS TO AUTHORITY CONFERRED

(1) Couched in general terms; or

(2) Couched in specific terms.
AS TO ITS NATURE AND EFFECTS

(1) Ostensible or representative, where the agent

acts in the name and representation of the
principal [Article 1868];
(2) Simple or commission, where the agent acts in
his own name but for the account of the principal.
AS TO KINDS OF PRINCIPAL

(1) With a disclosed principal, where, at the time the

transaction was contracted by the agent, the
other party thereto has known:
(a) that the agent is acting for a principal; and
(b) the principal's identity;

(2) Partially disclosed, where the other party knows

or has reason to know that the agent is or may be
acting for a principal but is unaware of the
principal's identity; or
(3) Undisclosed, where the party has no notice of the
fact that the agent is acting as such for a
principal.
KINDS OF AGENCY AS TO MANNER OF CREATION
EXPRESS AGENCY

An express agency is one where the agent has been

actually authorized by the principal, either:
(a) Orally; or
(b) In writing. [Article 1869]
IMPLIED AGENCY

The creation of implied agency is implied:

(1) As to the appointment of an agent by the
principal:
(a) From his acts;
(b) From his silence or lack of action; or
(c) From his failure to repudiate the agency
knowing that another person is acting on his
behalf without authority. [Article 1869]
(2) As to the acceptance of the agency by the agent:
(a) From his acts which carry out the agency;
(b) From his silence or inaction according to the
circumstances (i.e., presence or absence of the
parties) [Articles 1870, 1871 and 1872]
KINDS OF AGENCY AS TO EXTENT OF BUSINESS
COVERED
UNIVERSAL AGENCY

Universal agency comprises all acts which the

principal can lawfully delegate to an agent;
GENERAL AGENCY

General agency comprises all the business of the

principal.
SPECIAL AGENCY

Special agency comprises one or more specific

transactions.
General Agency Special Agency
Scope of authority
All acts connected with
the business or
employment in which
agent is engaged
Only specific authorized
acts or those necessarily
implied
Nature of service authorized
Involves continuous
service
Usually involves a single
transaction
Extent to which agent may bind principal
Acts within the scope of
authority, even in conflict
with special instructions,

may bind principal

Acts beyond authority
given cannot bind
principal
Termination of authority
Notice to third persons
required to terminate
apparent authority
No notice required, since
third parties are required
to inquire as to authority
Construction of instructions
Notice to third persons
required
The instructions, in so far
as they grant authority,
are strictly construed
KINDS OF AGENCY AS TO AUTHORITY
CONFERRED
COUCHED IN GENERAL TERMS

An agency couched in general terms is one created in

general terms and is deemed to comprise only acts
of administration, even if:
(1) The principal should state that he withholds no
power;
(2) He should state that the agent may execute such
acts as he may consider appropriate; or
(3) Even though the agency should authorize a
general and unlimited management [Article 1877].
COUCHED IN SPECIFIC TERMS

An agency couched in specific terms authorizes only

the performance of specific acts [Article 1878].
Certain specific acts, however, require special powers
of attorney.
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A special power of attorney is an instrument in writing

by which one person, as principal, appoints another
as his agent and confers upon him the authority to
perform certain specified acts or kinds of acts on
behalf of the principal.
The following acts of strict dominion require special
powers of attorney:
(1) To make such payments as are not usually
considered as acts of administration;
(2) To effect novations which put an end to
obligations already in existence at the time the
agency was constituted;
(3) To compromise, to submit questions to
arbitration, to renounce the right to appeal from a
judgment, to waive objections to the venue of an
action or to abandon a prescription already
acquired;
(4) To waive any obligation gratuitously;
(5) To enter into any contract by which the ownership
of an immovable is transmitted or acquired either

gratuitously or for a valuable consideration;

(6) To make gifts, except customary ones for charity
or those made to employees in the business
managed by the agent;
(7) To loan or borrow money, unless the latter act be
urgent and indispensable for the preservation of
the things which are under administration;
(8) To lease any real property to another person for
more than one year;
(9) To bind the principal to render some service
without compensation;
(10)To bind the principal in a contract of partnership;
(11) To obligate the principal as a guarantor or surety;
(12)To create or convey real rights over immovable
property;
(13)To accept or repudiate an inheritance;
(14)To ratify or recognize obligations contracted
before the agency;
(15)Any other act of strict dominion. [Article 1878]
Notes:
(1) The requirement of special power of attorney in
Article 1878 refers to the nature of the
authorization, not to its form. Even if a document
is titled as a general power of attorney, the
requirement of a special power of attorney is met
if there is a clear mandate from the principal
specifically authorizing the performance of the
act [Bravo-Guerrero v. Bravo (2005)].
(2) A special power of attorney can be included in the
general power when it is specified therein the act
or transaction for which the special power is
required [Veloso v. CA (1996)].
(3) A special power to sell excludes the power to
mortgage; and a special power to mortgage does
not include the power to sell [Article 1879].
(4) A special power to compromise does not
authorize submission to arbitration [Article 1880].
(5) The power to "exact the payment" of sums of
money "by legal means" include the power to
institute suits for their recovery [Germann & Co., v.
Donaldson, Sim & Co. (1901)].
(6) A power of attorney to loan and borrow money
and to mortgage the principals property does not
carry with it or imply that that the agent has a
legal right to make the principal liable for the
personal debts of the agent [BPI v. De Coster
(1925)].
(7) Unless the contrary appears, the authority of an
agent must be presumed to include all the
necessary and usual means of carrying the
agency into effect [Macke v. Camps (1907)].
However, although the Civil Code expressly requires a
special power of attorney in order that one may
compromise an interest of another, it is neither
accurate nor correct to conclude that its absence

renders the compromise agreement void. In such a

case, the compromise is merely unenforceable.
[Dugo v. Lopena (1962)]
SPECIAL KINDS OF AGENCY
AGENCY BY ESTOPPEL

Through estoppel, an admission or representation is

rendered conclusive upon the person making it, and
cannot be denied or disproved as against the person
relying thereon [Article 1431].
Ratification Estoppel
Rests on intention Rests on prejudice
Retroacts as if originally
authorized
Affects only relevant parts
of the transaction
Substance is confirmation
of unauthorized acts after
it has been done
Substance is the
principal's inducement for
third party to act to his
prejudice
For an agency by estoppel to exist, the following must
be established:
(1) The principal manifested a representation of the
agents authority or knowingly allowed the agent
to assume such authority;
(2) The third person, in good faith, relied upon such
representation;
(3) Relying upon such representation, such third
person has changed his position to his detriment.
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An agency by estoppel, which is similar to the doctrine

of apparent authority, requires proof of reliance upon
the representations, and that, in turn, needs proof
that the representations predated the action taken in
reliance. [Litonjua v. Eternit Corp. (2006)]
Implied Agency Agency by Estoppel
Principal is liable Person who is in bad faith
is liable
One who clothes another with apparent authority as
his agent, and holds him out to the public as such,
cannot be permitted to deny the authority of such
person to act as his agent, to the prejudice of
innocent third parties dealing with such person in
good faith.
Note: Article 1911 states that: "Even when the agent
has exceeded his authority, the principal is solidarily
liable with the agent if the former allowed the latter
to act as though he had full powers." In this case,
there is a duly formed agency and estoppel only
applies to the excess of authority. This is an
application of the doctrine of apparent authority
Under the doctrine of apparent authority, the
question in every case is whether the principal has, by

his voluntary act, placed the agent in such a situation

that a person of ordinary prudence, conversant with
business usages and the nature of the particular
business, is justified in presuming that such agent
has authority to perform the particular act in
question. [Professional Services v. Agana (2008)]
In agency by estoppel, there is no agency. The alleged
agent seemed to have apparent or ostensible
authority, but not real authority to represent another.
AGENCY WITH UNDISCLOSED PRINCIPAL

General rule: If an agent acts in his own name (the

principal is undisclosed), the agent is the one directly
bound in favor of the person with whom he has
contracted, as if the transaction were his own.
Ratio: There is no representation of the principal
when the agent acts in his own name. The third
person cannot allege that he was misled by any
representation since he did not know of the existence
of the undisclosed principal.
Exception: The principal is bound when the contract
involves things belonging to him [Article 1883]. In this
case, the contract is considered as one between the
principal and the third person.
Qualification: The exception only applies if the agent
contracts with the properties of the principal within
the scope of his authority [PNB v. Agudelo (1933)].
AGENCY BY OPERATION OF LAW

An agency may exist by operation of law, such as in

the following cases:
(1) Every partner is an agent of the partnership for
the purpose of its business [Article 1818];
(2) When the principal's actions would reasonably
lead a third person to conclude that an agency
exists, an agency by estoppel is created by
operation law [Black's Law Dictionary (9th)];
(3) In case of certain necessity or emergency, an
agency by necessity may arise.
IRREVOCABLE AGENCY

Article 1927 (on agency coupled with an interest)

mentions three instances where the sole will of the
principal cannot terminate (revoke) an agency:
(1) A bilateral contract depends upon it;
(2) It is the means of fulfilling an obligation already
contracted; or
(3) A partner is appointed manager of a partnership
in the contract of partnership and his removal
from the management is unjustifiable.
Qualifications:
(1) Coupled with interest or not, the authority
certainly can be revoked for a just cause, such as
when the attorney-in-fact betrays the interest of
the principal, xxx. It is not open to serious doubt
that the irrevocability of the power of attorney
may not be used to shield the perpetration of acts
in bad faith, breach of confidence, or betrayal of
trust, by the agent for that would amount to

holding that a power coupled with an interest

authorizes the agent to commit frauds against
the principal. [Coleongco v. Claparols (1964)]
(2) A mere statement in the power of attorney that it
is coupled with an interest is not enough. In what
does such interest consist must be stated in the
power of attorney. [Del Rosario v. Abad (1958)]
(3) An agency couple with an interest cannot affect
third persons. They are obligatory only on the
principal who executed the agency. [New Manila
Lumber v. Republic (1960)]
KINDS OF AGENTS
AS TO NATURE AND EXTENT OF AUTHORITY

According to the nature and extent of their authority,

agents have been classified into:
(1) Universal agents are authorized to do all acts for
his principal which can lawfully be delegated to
an agent. So far as such a condition is possible,
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such an agent may be said to have universal

authority.
(2) General agents are authorized to do all acts
pertaining to a business of a certain kind or at a
particular place, or all acts pertaining to a
business of a particular class or series. He has
usually authority either expressly conferred in
general terms or in effect made general by the
usages, customs or nature of the business which
he is authorized to transact. An agent, therefore,
who is empowered to transact all the business of
his principal of a particular kind or in a particular
place, would, for this reason, be ordinarily
deemed a general agent.
(3) Special agents are authorized to do some
particular act or to act upon some particular
occasion (i.e., acts usually in accordance with
specific instructions or under limitations
necessarily implied from the nature of the act to
be done). [Siasat v. IAC (1985)]
SPECIAL TYPES OF AGENTS

(1) Attorney-at-law is one whose business is to

represent clients in legal proceedings;
(2) Auctioneer is one whose business is to sell
property for others to the highest bidder at a
public sale;
(3) Broker is one whose business is to act as
intermediary between two other parties such as
insurance broker and real estate broker;
(4) Factor or commission merchant is one whose
business is to receive and sell goods for a
commission, being entrusted with the possession
of the goods involved in the transaction.
(5) Cashier in bank is one whose business is to
represent a banking institution in its financial
transactions; and

(5) Attorney-in-fact is one who is given authority by

his principal to do a particular act not of a legal
character. In its strict legal sense, it means an
agent having a special authority.
Attorneys have authority to bind their clients in any
case by any agreement in relation thereto made in
writing, and in taking appeals, and in all matters of
ordinary judicial procedure. But they cannot, without
special authority, compromise their client's litigation,
or receive anything in discharge of a client's claim
but the full amount in cash. [Section 23, Rule 138,
Rules of Court]

Powers of the agent

AUTHORITY OF AN AGENT
Authority is the power of the agent to affect the legal
relations of his principal by acts done in accordance
with the principals manifestations of consent.
An agent can make the principal legally responsible
only when he is authorized by the principal to act the
way he did.
KINDS OF AUTHORITY
(1) Actual, when it is actually granted, and it may be
express or implied. It is the authority that the
agent does, in fact, have. It results from what the
principal indicates to the agent;
(2) Express, when it is directly conferred by words;
(3) Implied, when it is incidental to the transaction or
reasonably necessary to accomplish the main
purpose of the agency;
(4) Apparent or ostensible, when it arises by the acts
or conduct of the principal giving rise to an
appearance of authority. It makes the principal
responsible to third persons for certain actions of
the agent that were not really authorized;
(5) General, when it refers to all the business of the
principal;
(6) Special, when it is limited only to one or more
specific transactions; and
(7) By necessity or by operation of law, when it is
demanded by necessity or by virtue of the
existence of an emergency. The agency
terminates when the emergency passes.
SCOPE OF AUTHORITY
General rule: The scope of the authority of the agent
is what appears in the terms of the power of attorney
[Siredy Enterprises v. CA (2002)].
Exceptions: An agent is considered acting within the
scope of his authority when:
(1) He performs acts which are conducive to the
accomplishment of the purpose of the agency
[Article 1881];
(2) He performed the agency in a manner more
advantageous to the principal than that specified
by said principal [Article 1881];

(3) The principal ratifies the act, expressly or tacitly

[Article 1910].
So far as third persons are concerned, an act is
deemed to have been performed within the scope of
the agent's authority if such act is within the terms of
the power of attorney, as written, even if the agent
has in fact exceeded the limits of his authority
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according to an understanding between the principal

and the agent. [Article 1901]
While third persons are bound to inquire into the
extent or scope of the agents authority, they are not
required to go beyond the terms of the written power
of attorney. Third persons cannot be adversely
affected by an understanding between the principal
and his agent as to the limits of the latters authority.
In the same way, third persons need not concern
themselves with instructions given by the principal to
his agent outside of the written power of attorney.
[Siredy Enterprises v. CA (2002)]
POWER TO BIND THE PRINCIPAL
Requisites:
(1) The agent must act within the scope of his
authority; and
(2) The agent must act in behalf of the principal.
Even when the agent acts in his own name, however,
the principal is still bound, when the contract
involves things belonging to the principal [Article
1883] or when the principal ratifies the contract,
expressly or tacitly [Article 1910].
EFFECTS OF ACTS OF AN AGENT
In summary, when the agent acts:
(1) With authority of the principal:
(a) If done in the name of the principal, the
principal is bound to comply with the
obligations contracted [Article 1910] and the
agent is not personally liable to the party with
whom he contracts [Article 1897];
(b) If done in the name of the agent, the agent is
the one directly bound in favor of the person
with whom he has contracted, except when
the contract involves things belonging to the
principal;
(2) Without authority or beyond the authority granted
by the principal:
(a) If done in the name of the principal, it is
unenforceable against him, unless he ratifies
it expressly or tacitly [Article 1910].
(b) If done in the name of the agent, he is
personally liable.

Obligations of the agent

OBLIGATIONS, IN GENERAL

GOOD FAITH AND LOYALTY TO HIS TRUST

The duty of good faith is also called the fiduciary

duty, which imposes upon the agent the obligation of

faithful service. The duty to be loyal to the principal
demands that the agent look out for the best
interests of the principal as against his own or those
of third parties. [See Article 1889]
Thus, an act of the agent which tends to violate his
fiduciary duty is not only invalid as to the principal,
but is also against public policy.
Presumption: Until proven otherwise, however, the
presumption arises that an agent has performed his
duty in good faith, and the principal, until notice is
received of a breach of relational duties, may rely
upon his agent's faithfulness.
Exception: The presumption does not arise when
there is no relation of trust or confidence between
the parties (e.g., the agent is bound merely as an
instrument/servant, or there is no agency
relationship). [De Leon (2010)]
OBEDIENCE TO PRINCIPAL'S INSTRUCTIONS
General rule: An agent must obey all lawful orders
and instructions of the principal within the scope of
the agency. If he fails to do so, he becomes liable for
any loss the principal incurs even though he can
show that he acted in good faith or exercised
reasonableness. [See Article 1887]
EXERCISE OF REASONABLE CARE

By accepting an employment whose requirements he

knows, without stipulating otherwise, the agent
impliedly undertakes that he possesses a degree of
skill reasonably and ordinarily competent for the
performance of the service, and that in performing
his undertaking, he will exercise reasonable care,
skill and diligence. [De Leon (2010)]
The specific obligations of the parties to each other
are merely specific applications of the general
fiduciary obligation [De Leon (2010)].
OBLIGATION TO CARRY OUT AGENCY
General rule: The agent is:
(1) Bound by his acceptance to carry out the agency;
(2) Liable for damages, which the principal may
suffer, in case of non-performance;
(3) Bound to finish the business already begun on
the death of the principal should delay entail
danger. [Article 1884]
Exception: An agent shall not carry out an agency if
its execution would manifestly result in loss or
damage to the principal [Article 1888].
OBLIGATION IN CASE HE DECLINES AGENCY
In case a person declines an agency, he is bound to
observe the diligence of a good father of a family in
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the custody and preservation of the goods forwarded

to him.
The obligation lasts until the owner, as soon as
practicable:

(1) Appoints an agent; or

(2) Takes charge of the goods. [Article 1886]
The case treated in this provision is different from
withdrawal. In this case, no agency was formed.
Withdrawal presupposes an existing agency.
The obligation of the agent, in case of withdrawal, is
to continue to act as such agent until the principal
has had reasonable opportunity to take the
necessary steps to meet the situation. [Article 1929]
OBLIGATION TO ADVANCE NECESSARY FUNDS
General rule: The agent is not bound to advance the
necessary funds. The principal is obliged to advance
to the agent, should the latter so request, the sums
necessary for the execution of the agency.
Exception: He shall be bound to do so should there
be a stipulation to that effect, subject to the
obligation of the principal to reimburse the agent.
Exception to the exception: He is not bound to do so,
even when there is a stipulation, when the principal is
insolvent. [Article 1886]
Note: Insolvency of the principal is also a ground for
extinguishment.
OBLIGATION TO ACT IN ACCORDANCE WITH
INSTRUCTIONS
In the execution of the agency, the agent shall act in
accordance with the instructions of the principal.
In the absence of such instructions, he shall do all
that a good father of a family would do, as required
by the nature of the business. [Article 1887]
Note: The limits of the agent's authority shall not be
considered exceeded should it have been performed
in a manner more advantageous to the principal
than that specified by him [Article 1882].
Authority Instructions
Sum total of the powers
committed or permitted to
the agent
Private rule of guidance to
the agent
Authority Instructions
Relates to the transaction
or business with which the
agent is empowered to act
Refers to the manner or
mode of agent's action
with respect to matters
within the permitted
scope of authority
Binds third parties Does not bind third
parties
OBLIGATION TO PREFER INTEREST OF
PRINCIPAL
General rule: The agent shall be liable for damages if,
there being a conflict between his interest and those
of the principal, he should prefer his own [Article

1889].
Exceptions: The agent is not liable for giving
preference to his own when:
(1) The principal waives the benefit of this rule, with
full knowledge of the facts; or
(2) When the interest of the agent is superior.
An example of the latter is where the agent has
security interest in goods of the principal in his
possession, he may protect his interest even if in
doing so, he disobeys the principal's orders or injures
his interest [De Leon (2010)].
BASIS OF THE RULE

The underlying basis of the rule, which precludes an

agent from engaging in self-dealing, is to shut the
door against temptation and keep the agent's eye
single to the rights and welfare of the principal.
APPLICATION

(1) A specific application of this subordination of

interests is found in Article 1890: If the agent has
been empowered to borrow money, he may
himself be the lender at the current rate of
interest. If he has been authorized to lend money
at interest, he cannot borrow it without the
consent of the principal.
(2) An agent authorized to sell merchandise cannot
bind the principal by selling to himself directly or
indirectly, unless the principal consented or
ratified the purchase.
OBLIGATION TO ACCOUNT AND TO DELIVER
THINGS RECEIVED
Every agent is bound to:
(1) Render an account of his transactions; and
(2) Deliver to the principal whatever he may have
received by virtue of the agency, even though it
may not be owing to the principal.
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WHAT TO DELIVER

What has to be delivered include all money and

property which may have come into his hands or in
that of a sub-agent. This includes gifts from third
parties in connection with the agency.
It is immaterial whether such money or property is
the result of the performance or violation of the
agent's duty, if it be the fruit of the agency.
LIABILITY FOR CONVERSION

If the agent fails to deliver and instead converts or

appropriates for his own use the money or property
belonging to the principal, he is liable for estafa.
EXEMPTING STIPULATION

Every stipulation exempting the agent to render an

account shall be void. [Article 1891]
WHEN OBLIGATION NOT APPLICABLE

(1) If the agent or broker acted only as a middleman

with the task of merely bringing together the
vendor and the vendee [Domingo v. Domingo
(1971)].

(2) If the agent had informed the principal of the gift

or bonus or profit he received from the purchaser
and the principal did not object thereto;
(3) When a right of lien exists in favor of the agent.
RESPONSIBILITY FOR ACTS OF SUBSTITUTE
The agent may appoint a substitute if the principal
has not prohibited him from doing so.
The agent is responsible for the acts of the
substitute:
(1) When he was not given the power to appoint one;
(2) When he was given such power, but:
(a) Without designating the person; and
(b) The person appointed was notoriously
incompetent or insolvent.
All acts of the substitute appointed against the
prohibition of the principal shall be void. [Article
1892]
The principal may bring an action against the
substitute with respect to the obligations which the
latter contracted under the substitution [Article
1893].
SUB-AGENCY
A sub-agent or substitute is a person employed or
appointed by an agent as his agent, to assist him in
the performance of an act for the principal, which the
agent has been empowered to perform.
The agent is a principal with respect to the subagent.
POWER TO APPOINT

General rule: The agent may appoint a sub-agent.

Ratio: The law allows such substitution for reasons of
convenience and practicality.
Exceptions:
(1) The appointment is prohibited by the principal
[Article 1892];
(2) The work entrusted to the agent requires special
knowledge, skill, or competence, unless
authorized to do so by the principal [De Leon
(2010)].
RELATIONS AMONG THE PARTIES

(1) When the sub-agent has been employed for own

account of the agent, to assist him, the sub-agent
is a stranger to the principal.
(2) When the appointment was authorized by the
principal, a fiduciary relationship is created
between and among the principal, agent, and
sub-agent, such that neither the agent nor the
substitute can be held personally liable so long
as they act within the scope of their authority
[Macias & Co. v. Warner, Barnes & Co. (1922)].
EFFECTS OF SUBSTITUTION

(1) When substitution was prohibited by the principal,

appointment by the agent is an act in excess of
the limits of his authority. All acts of the
substitute are void [Article 1892].
(2) When substitution was authorized, the agent is
only liable when he appointed one who is

notoriously incompetent or insolvent, unless the

person was designated by the principal.
(3) When substitution was not authorized, but also
not prohibited, the appointment is valid, but the
agent is liable for damage caused by the
substitution to the principal.
(4) When substitution was authorized and the subagent
was designated by the principal, the agent
is released from any liability for the acts of the
sub-agent.
RESPONSIBILITY OF TWO OR MORE AGENTS
General rule: The responsibility of two or more agents
is not solidary, even though they have been
appointed simultaneously. They are liable jointly.
Exception: They are solidarily liable if solidarity has
been expressly stipulated [Article 1894].
If solidarity has been thus agreed upon, each of the
agents is responsible for:
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(1) The non-fulfillment of agency, even when the

fellow agents acted beyond the scope of their
authority; and
(2) The fault or negligence of his fellow agents,
except when the fellow agents acted beyond their
authority.
OBLIGATION FOR SUMS APPLIED TO HIS OWN
USE
The agent owes interest:
(1) On the sums applied to his own use from the day
on which he did so; and
(2) On the sums which he still owes after the agency
is extinguished. [Article 1896]
The liability of the agent for interest for sums
converted to his own use is without prejudice to a
criminal action that may be brought against him [De
Leon (2010)].
The sums referred to as still owing to the principal
after extinguishment of the agency are those which
were not misapplied by the agent, but were found to
be owing to the principal after such extinguishment.
OBLIGATIONS TO THIRD PERSONS
LIABILITY OF AGENT FOR OBLIGATIONS CONTRACTED

General rule: The agent who acts as such is not

personally liable to the party with whom he
contracts.
The principal is responsible for such acts done within
the scope of the authority granted to the agent, and
should bear any damage caused to third persons.
[Article 1910]
Exceptions: He is personally liable when:
(1) He acts in his own name [Article 1883];
(2) He expressly binds himself; or
(3) He exceeds the limits of his authority without
giving such party sufficient notice of his powers.
[Article 1897]

Note: If the agent acts in his own name, he is directly

bound in favor of the person with whom he
contracted, as if the transaction were his own, except
when the contract involves things belonging to the
principal.
VOID CONTRACTS

The contract entered into by an agent on behalf of

the principal shall be void when:
(1) The agent contracts in the name of the principal;
(2) He exceeded the scope of his authority;
(3) The principal does not ratify the contract; and
(4) The party with whom the agent contracted is
aware of the limits of the powers granted by the
principal.
The agent, however, is liable if he undertook to
secure the principal's ratification.
PRESENTATION OF POWER OF ATTORNEY

A third person with whom the agent wishes to

contract on behalf of the principal may require the
presentation of the power of attorney, or the
instructions as regards the agency. Private or secret
orders and instructions of the principal do not
prejudice third persons who have relied upon the
power of attorney or instructions shown them.
[Article 1902]
So far as third persons are concerned, an act is
deemed to have been performed within the scope of
the agent's authority, if such act is within the terms
of the power of attorney, as written, even if the agent
has in fact exceeded the limits of his authority
according to an understanding between the principal
and the agent. [Article 1900]
RATIFICATION BY PRINCIPAL

A third person, who contracts with the agent

(thereby recognizing the authority of the agent),
cannot later disaffirm his contract based on the fact
that the agent has exceeded his powers, if the
principal has:
(1) Ratified the acts of the agent; or
(2) Signified his willingness to ratify said acts. [Article
1901]
Thus, the third person can be compelled to abide by
the contract in this case.
The ratification has retroactive effect, relating back
to the time of the act or contract ratified and is
equivalent to original authority [Board of Liquidators
v. Kalaw].
A principal may not accept the benefits of a
transaction and repudiate its burdens. Thus, a
principal who seeks to enforce a sale made by the
agent cannot ordinarily allege that the agent
exceeded his authority.
Before ratification, however, the third person may
repudiate the contract.
IGNORANCE OF AGENT

If a duly authorized agent acts in accordance with

the orders of the principal, said principal cannot set

up the ignorance of the agent as to circumstances

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whereof he himself was, or ought to have been,

aware. [Article 1899]
Thus, if the principal appoints an agent who is
ignorant, the fault is his alone. He is bound by the
acts of the agent. The agent is not liable to third
persons in this case.
OBLIGATIONS OF COMMISSION AGENT
FACTOR OR COMMISSION AGENT

A factor or commission agent is one whose business

is to receive and sell goods for a commission (also
called factorage) and who is entrusted by the
principal with the possession of goods to be sold,
and usually selling in his own name.
He may act in his own name or in that of the
principal.
An ordinary agent need not have possession of the
goods of the principal, while the commission agent
must be in possession. [De Leon (2010)]
Ordinary Agent Commission Agent
Acts for and in behalf of
the principal
Acts in his own name or
that of his principal
Need not have possession
of the goods
Must have possession of
the goods
Broker Commission Agent
Has no custody of the
thing to be disposed of,
only acts as intermediary
between seller and buyer
Has custody or possession
of the things to be sold
Maintains no relations
with things to be
sold/bought
Maintains relations with
the thing, the buyer and
the seller
RESPONSIBILITY FOR GOODS RECEIVED

(1) The commission agent shall be responsible for

goods received by him in the terms and
conditions and as described in the consignment,
unless upon receiving them he should make a
written statement of the damage and
deterioration suffered by the same [Article 1903].
(2) The commission agent who handles goods of the
same kind and mark, which belong to different
owners, shall distinguish them by countermarks,
and designate the merchandise respectively
belonging to each principal [Article 1904].
SALE OF GOODS ON CREDIT WITHOUT AUTHORITY

General rule: The commission agent cannot sell on

credit. Should he do so, the principal may:
(1) Demand from him payment in cash, in which case
the commission agent shall be entitled to any
interest or benefit, which may result from such
sale [Article 1905]; or
(2) Ratify the sale on credit, in which case the
principal will have all the risks and advantages to
him [De Leon (2010)].
Exception: The commission agent can sell on credit
with the express or implied consent of the principal.
SALE OF GOODS ON CREDIT WITH AUTHORITY

If the commission agent was authorized to sell on

credit and should he so sell on credit, he shall inform
the principal of such sale, with a statement of the
names of the buyers.
Should he fail to inform the principal, the sale is
deemed to have been made for cash as far as the
principal is concerned. [Article 1906] As such, as to
the buyer, the sale may be on credit, but the principal
may demand the payment in cash from the agent.
Should the commission agent receive a guarantee
commission (del credere commission) on a sale, in
addition to the ordinary commission, he shall:
(1) Bear the risk of collection; and
(2) Pay the principal the proceeds of the sale on the
terms agreed upon with the purchaser.
In case of a sale on credit, the commission agent is
obliged to collect the credits of his principal when
they become due and demandable.
General rule: Failing to so collect, the agent shall be
liable for damages
Exception: He is not liable if he proves that he
exercised due diligence for that purpose.
RESPONSIBILITY FOR FRAUD AND NEGLIGENCE
In the fulfillment of his obligation, the agent is
responsible for:
(1) Fraud; and
(2) Negligence
The circumstance that the agency is or is not
gratuitous will be considered by the courts in fixing
the liability for negligence only.
The liability may be to the principal or to third
persons.
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The principal is solidarily liable if quasi-delict was

committed by the agent while performing his duties
in furtherance of the principal's business.

Obligations of the principal

OBLIGATIONS, IN GENERAL
In addition to his duties specified under the contract
itself, the principal is under obligation to deal fairly
and in good faith with his agent, who owes the same
to his principal.
OBLIGATION TO COMPLY WITH OBLIGATIONS

CONTRACTED
General rule: The principal must comply with all the
obligations which the agent may have contracted
within the scope of his authority. As for any obligation
where in the agent has exceeded his power, the
principal is not bound.
Exceptions: The principal is:
(1) Bound by the obligation entered into by the
agent in excess of his power, when he ratifies it
expressly or tacitly [Article 1910];
(2) Solidarily liable with the agent if the principal
allowed the agent to act as though he had full
powers [Article 1911].
Note: If the agent acts in his own name, but the
contract involves things belonging to the principal,
the contract must be considered as entered into
between the principal and the third person [Sy-Juco
and Viardo v. Sy-Juco (1920)].
RATIFICATION

Ratification is the adoption or affirmance by a person

of a prior act which did not bind him, but which was
done or professed to be done on his account, thus
giving effect to the acts as if originally authorized.
Aside from the intent to ratify, the following
conditions must be fulfilled for ratification to be
effective:
(1) The principal must have the capacity and power
to ratify;
(2) He must have had knowledge or had reason to
know of material or essential facts about the
transaction;
(3) He must ratify the acts entirely;
(4) The act must be capable of ratification; and
(5) The act must be done in behalf of the principal.
[De Leon (2010)]
The effects of ratification are:
(1) With respect to the agent, it relieves him of
liability. He may thus recover compensation from
the principal.
(2) With respect to the principal, he assumes
responsibility for the unauthorized act as fully as
if the agent had acted under an original authority.
But he is not liable for acts outside the authority
affirmed by his ratification.
(3) With respect to third persons, they are bound by
the ratification and cannot set up the fact that the
agent has exceeded his powers [Article 1901].
SEPARATE CONTRACTS WITH PRINCIPAL AND AGENT

When two persons contract with regard to the same

thing, one of them with the agent and the other with
the principal, and the two contracts are incompatible
with each other, that of prior date shall be preferred,
subject to the rules on double sales [Article 1916].
The rules on double sales (Article 1544) provide:
(1) If the same movable property is sold to different
persons, ownership is transferred to whoever first

took possession in good faith.

(2) If it be immovable:
(a) Ownership belongs to the person who in good
faith first recorded it in the Registry of
Property.
(b) If there is no inscription, ownership shall
belong to the person who, in good faith was
first in possession; and in the absence of such,
to the one who presents the oldest title,
provided there is good faith.
The liability for damages suffered by the third person
whose contract must be rejected shall be borne by:
(1) The principal, if the agent acted in good faith; or
(2) The agent, if he acted in bad faith. [Article 1918]
WHEN PRINCIPAL NOT LIABLE, IN SUMMARY
(1) Void or inexistent contracts [Article 1409];
(2) Sale of a piece of land or any interest therein
when the authority of the agent is not in writing
[Article 1874];
(3) Acts of the substitute appointed against the
prohibition of the principal [Article 1892];
(4) Acts done in excess of the scope of the agent's
authority [Articles 1898 and 1910];
(5) When the agent acts in his own name, except
when the contract involves things belonging to the
principal [Article 1883];
(6) Unenforceable contracts [Article 1403].
OBLIGATION FOR COMPENSATION OF AGENT
Agency is presumed to be for a compensation, unless
there is proof to the contrary [Article 1875].
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AMOUNT OF COMPENSATION

The principal must pay the agent the compensation

agreed upon, or the reasonable value of the agent's
services if no compensation was specified.
This obligation presupposes that the agent complied
with his obligation to the principal.
COMPENSATION OF BROKER

A broker is entitled to the usual commissions

whenever he brings to his principal a party who is
able and willing to take the property and enter into a
valid contract upon the terms named by the
principal, although the terms may be arranged and
the matter negotiated and consummated between
the principal and the purchaser directly.
A broker is never entitled to commission for
unsuccessful efforts.
The governing rule is that the agent must prove that
he was the procuring cause of the transaction.
Otherwise, he is not entitled to the stipulated
broker's commission [Inland Realty v. CA (1997)].
Procuring cause refers to a cause originating a series
of events which, without break in their continuity,
result in the accomplishment of the prime objective
of the employment of the broker producing a

purchaser ready, willing and able to buy on the

owner's terms.
Since the brokers only job is to bring together the
parties to a transaction, it follows that if the broker
does not succeed in bringing the mind of the
purchaser and the vendor to an agreement with
reference to the terms of a sale, he is not entitled to
a commission [Rocha v. Prats (1922)].
If the principal breaks off from negotiations with a
buyer brought by the agent in order to deliberately
deal later with the buyer personally, this is evident
bad faith. In such case, justice demands
compensation for the agent. [Infante v. Cunanan
(1953)]
LIABILITY FOR EXPENSES AND DAMAGES
NECESSARY FUNDS

(1) The principal must advance to the agent, should

the latter so request, the sums necessary for the
execution of the agency.
(2) In case the agent already advanced them, the
principal must reimburse him therefor:
(a) Even if the business or undertaking was not
successful;
(b) Provided that the agent is free from all fault.
[Article 1912]
The reimbursement shall include the interest on the
sums advanced from the day the advances were
made.
WHEN PRINCIPAL NOT LIABLE FOR EXPENSES

The principal is not liable for the expenses incurred

by the agent in the following cases:
(1) If the agent acted in contravention of the
principal's instructions, unless the latter should
wish to avail himself of the benefits derived from
the contract;
(2) When the expenses were due to the fault of the
agent;
(3) When the agent incurred them with knowledge
that an unfavorable result would ensue, if the
principal was not aware thereof;
(4) When it was stipulated that:
(a) The expenses would be borne by the agent; or
(b) That the latter would be allowed only a
certain sum. [Article 1918]
DAMAGES

The principal must also indemnify the agent for all

the damages which the execution of the agency may
have caused the latter, without fault or negligence or
his part. [Article 1913]
RIGHT OF RETENTION BY AGENT

The agent may retain in pledge the things which are

the object of the agency until the principal effects:
(1) Reimbursement of necessary funds advanced;
and
(2) Payment of indemnity for damages. [Article 1914]
This is a case of legal pledge. However, the agent is

not entitled to the excess in case the things are sold

to satisfy his claims.
MULTIPLE PRINCIPALS

If there are two or more principals who appointed the

agent for a common transaction or undertaking, they
shall be solidarily liable for all the consequences of
the agency [Article 1915].
Requisites:
(1) There are two or more principals;
(2) The principals have all concurred in the
appointment of the same agent; and
(3) The agent is appointed for a common transaction
or undertaking.
LIABILITY FOR QUASI-DELICT BY AGENT
The principal is solidarily liable to third persons for
torts of an agent committed:
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(1) At the principal's direction; or

(2) In the course and within the scope of the agent's
employment.

Extinguishment of agency

MODES OF EXTINGUISHING AGENCY, IN

GENERAL
Agency is extinguished:
(1) By its revocation;
(2) By the withdrawal of the agent;
(3) By the death, civil interdiction, insanity or
insolvency of the principal or of the agent;
(4) By the dissolution of the firm or corporation which
entrusted or accepted the agency;
(5) By the accomplishment of the object or purpose
of the agency;
(6) By the expiration of the period for which the
agency was constituted. [Article 1919]
The provision enumerates only those which are
peculiar to agency and is, therefore, not exclusive.
Agency may also be extinguished by the modes of
extinguishment of obligations in general.
The modes of extinguishment may be classified into
three:
(1) By agreement (Nos. 5 and 6);
(2) By subsequent acts of the parties:
(a) By the act of both parties or by mutual
consent; or
(b) By the unilateral act of one of them (Nos. 1
and 2)
(3) By operation of law (Nos. 3 and 4)
In the absence of anything to show its termination,
the agency relation will be presumed to have
continued. The burden of proving termination is on
the party asserting it.
REVOCATION BY PRINCIPAL
General rule: The principal may:
(1) Revoke the agency at will; and

(2) Compel the agent to return the document

evidencing the agency.
Qualifications: The right of the principal to terminate
the authority of his agent is absolute and
unrestricted, except that he is liable for damages in
case:
(1) He revokes the agency in bad faith [Danon v.
Brimo (1921)]; or
(2) He revokes the agency before the expiration of
the period stipulated in the agency contract.
Exception: Agency cannot be revoked if it is coupled
with an interest, such that:
(1) A bilateral contract depends upon it;
(2) It is the means of fulfilling an obligation already
contracted; or
(3) A partner is appointed manager of a partnership
in the contract of partnership and his removal
from the management is unjustifiable.
MULTIPLE PRINCIPALS

When two or more principals have granted a power

of attorney for a common transaction, any one of
them may revoke the same without the consent of
the others. [Article 1925]
MANNER OF REVOCATION

Revocation may be express or implied.

There is express revocation when the principal clearly
and directly makes a cancellation of the authority of
the agent orally or in writing.
There is implied revocation in the following cases:
(1) The appointment of a new agent for the same
business or transaction revokes the previous
agency from the day on which notice thereof was
given to the former agent, without prejudice to
the requirement of notice to third persons [Article
1923].
(2) The agency is revoked if the principal directly
manages the business entrusted to the agent,
dealing directly with third persons [Article 1924].
(3) A general power of attorney is revoked by a
special one granted to another agent, as regards
the special matter involved in the latter [Article
1926].
There is implied revocation only where the new
appointment is incompatible with the previous one.
EFFECT OF REVOCATION IN RELATION TO THIRD PARTIES

If the agency has been entrusted for the purpose of

contracting with specified persons, its revocation
shall not prejudice the latter if they were not given
notice thereof [Article 1921].
If the agent had general powers, revocation of the
agency does not prejudice third persons who acted:
(1) In good faith; and
(2) Without knowledge of the revocation.
Notice of the revocation in a newspaper of general
circulation is a sufficient warning to third persons.
[Article 1922]

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WITHDRAWAL BY AGENT
The agent may withdraw from the agency by giving
due notice to the principal.
LIABILITY FOR DAMAGES

General rule: If the principal should suffer any

damage by reason of the withdrawal, the agent must
indemnify him therefor.
Exception: The agent is not liable for damages if he
should base his withdrawal upon the impossibility of
continuing the performance of the agency without
grave detriment to himself. [Article 1928]
OBLIGATION TO CONTINUE AGENCY

The agent, even if he should withdraw from the

agency for a valid reason, must continue to act until
the principal has had reasonable opportunity to take
the necessary steps to meet the situation [Article
1929].
DEATH, CIVIL INTERDICTION, INSANITY OR
INSOLVENCY
DEATH OF PRINCIPAL

General rule: Death extinguishes agency.

Exceptions:
(1) The agency remains in full force and effect even
after the death of the principal, if it has been
constituted:
(a) In the common interest of the principal and
agent; or
(b) In the interest of a third person who has
accepted the stipulation in his favor. [Article
1930]
(2) Anything done by the agent, without knowledge
of the death of the principal or of any other cause
which extinguishes the agency, is valid and shall
be fully effective with respect to third persons
who may have contracted with him in good faith
[Article 1931].
(3) The agent must finish business already begun on
the death of the principal, should delay entail any
danger [Article 1884].
DEATH OF AGENT

If the agent dies, his heirs must:

(1) Notify the principal thereof; and
(2) In the meantime adopt such measures as the
circumstances may demand in the interest of the
latter. [Article 1932]
ACCOMPLISHMENT OF OBJECT OR PURPOSE
Between principal and agent, the fulfillment of the
purpose for which agency was created ipso facto
terminates agency, even though it was expressly
made irrevocable. If the purpose has not been
accomplished, the agency continues indefinitely for
as long as the intent to continue is manifested
through words or actions of the parties.
DISSOLUTION OF FIRM OR CORPORATION
The dissolution of a partnership or corporation which

entrusted (principal) or accepted (agent) the agency

extinguishes its juridical existence, except for the
purpose of winding up its affairs. It is equivalent to its
death.
EXPIRATION OF TERM
If created for fixed period, expiration of the period
extinguishes agency even if the purpose was not
accomplished.
If no time is specified, the courts may fix the period
as under the circumstances have been probably
contemplated by the parties [Article 1197]. Otherwise,
the agency terminates at the end of a reasonable
period of time. Either party can terminate the
relationship at will by giving notice to the other. [De
Leon (2010)]
Period may be implied from terms of agreement,
purpose of agency, and the circumstances of the
parties.
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Credit Transactions

MEANING AND SCOPE OF CREDIT

TRANSACTIONS
Credit transactions include all transactions involving
the purchase or loan of goods, services, or money in
the present with a promise to pay or deliver in the
future.
TWO TYPES OF CREDIT
TRANSACTIONS/CONTRACTS OF SECURITY
(1) Secured transactions or contracts of real security
supported by a collateral or an encumbrance
of property
(2) Unsecured transactions or contracts of personal
security fulfillment by the debtor is supported
only by a promise to pay or the personal
commitment of another
Examples of credit transactions
(1) Bailment contracts
(2) Contracts of guaranty and suretyship
(3) Mortgage
(4) Antichresis
(5) Concurrence and preference of credits

Loan

[A] contract by which one of the parties delivers to

another, either something not consumable so that
the latter may use the same for a certain time and
return it, in which case the contract is called
commodatum; or money or other consumable thing,
upon the condition that the same amount of the
same kind and quality shall be paid, in which case
the contract is called a simple loan or mutuum.
[Art.1933]
CHARACTERISTICS OF A LOAN

(1) Real contract

(a) Delivery is essential for perfection of the
contract of loan.
(b) An accepted promise to loan, is nevertheless
binding on the parties, it being a consensual
contract.
(2) Unilateral contract
(a) creates obligations on only one party, i.e., the
borrower
In a contract of loan, the cause is, as to the borrower,
the acquisition of the thing, and as to the lender, the
right to demand its return or its equivalent. [Monte
de Piedad v. Javier]
Upon delivery of the object of the contract of loan (in
this case the money received by the debtor when the
checks were encashed) the debtor acquires
ownership of such money or loan proceeds and is
bound to pay the creditor an equal amount. [Garcia
v. Thio, G.R. No. 154878]
COMMODATUM V. MUTUUM

Commodatum
Mutuum
Ordinarily involves
something not
consumable* (Art.1936)
Involves money or other
consumable thing
Ownership of the thing
loaned is retained by
lender (Art.1933)
Ownership is transferred to
the borrower
Essentially gratuitous
(Art.1933)
May be gratuitous or
onerous, i.e. with stipulated
interest
Borrower must return
the same thing loaned
(Art.1933)
Borrower need only pay an
equal amount of the same
kind and quality (Art. 1953)
May involve real or
personal property
(Art.1937)
Refers only to personal
property
Loan for use or
temporary possession
(Art.1935)
Loan for consumption
Bailor may demand the
return of the thing
loaned before the

expiration of the term in

case of urgent need
(Art.1946)
Lender may not demand its
return before the lapse of
the term agreed upon
Bailor suffers the loss of
the subject matter since
he is the owner
(Art.1942; Art.1174)
Borrower suffers the loss
even if caused exclusively by
a fortuitous event and he is
not, therefore, discharged
from his duty to pay
Purely personal in
character (Art 1939)
Not purely personal in
character
If consumable goods are loaned only for purposes of
exhibition, or when the intention of the parties is to
lend consumable goods and to have the very same
goods returned at the end of the period agreed upon,
the loan is a commodatum and not a mutuum.
[Producers Bank v. CA, Feb. 19, 2003]
OBLIGATIONS OF BAILOR AND BAILEE
WHO MAY BE A BAILOR IN COMMODATUM?
(a) Anyone. The bailor in commodatum need not be
the owner of the thing loaned. [Art.1938]
(b) But the bailee himself may not lend nor lease the
thing loaned to him to a third person [Art 1939(2)]
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(2) KINDS OF COMMODATUM?

(a) Ordinary commodatum [Art. 1933]
(b) Precarium - bailor may demand the thing loaned
at will [Art. 1947]
OBLIGATIONS OF A BAILOR IN COMMODATUM
(1) To allow the bailee the use of the thing loaned for
the duration of period stipulated or until the
accomplishment of the purpose for which
commodatum was constituted.
Exceptions:
(a) Urgent need of the thing, during which time
he may demand its return or temporary use
(Art.1946)
(b) Precarium (Art.1947)
(i) If duration of the contract has not been
stipulated
(ii) If use or purpose of the thing has not been
stipulated
(iii) If use of thing is merely tolerated by the
bailor
(c) Bailee commits an act of ingratitude specified
in Art. 765 [Art. 1948]:
(1) Commission of offenses against the
WHAT ARE THE TWO

person, the honor, or the property of the

bailor, or of his wife or children under his
parental authority
(2) Imputing to the bailor any criminal offense,
or any act involving moral turpitude, even
though he should prove it, unless the crime
or the act has been committed against the
bailee himself, his wife, or children under
his authority
(3) Undue refusal to give the bailor support
when the bailee is legally or morally bound
to do so
(NOTE: Article 765 is applicable, because like
donation, commodatum is essentially gratuitous.
[Art.1933, par.2]
(2) To refund extraordinary expenses for the
preservation of the thing loaned provided bailor is
notified before the expenses were incurred. [Art.
1949]
(a) Exception: Urgent need such that reply to the
notification cannot be awaited without
danger, hence no notice is necessary.
(3) To bear 50% of the extraordinary expenses
arising from actual use of bailee of the thing
loaned [Art. 1949]
(a) Exception: Contrary stipulation
(4) To pay damages to bailee for known hidden flaws
in the thing loaned [Art. 1951]
(NOTE: Bailor has no right of abandonment; he
cannot exempt himself from payment of expenses or
damages to the bailee by abandoning the thing to
the latter. [Art. 1952])
OBLIGATIONS OF A BAILEE IN COMMODATUM
(1) Obligation to pay for the ordinary expenses for
the use and preservation of the thing loaned [Art.
1941]
(2) Obligation to take good care of the thing with the
diligence of a good father of a family [Art. 1163]
(3) Liability for loss, even if loss through fortuitous
event, under certain circumstances [Art. 1942]
(4) Liability for deterioration of thing loaned, except
under certain circumstances [Art. 1943]
(5) Obligation to return the thing upon expiration of
term or upon demand in case of urgent need [Art.
1946]
(6) Solidary obligation where there are 2 or more
bailees to whom a thing was loaned in the same
contract [Art.1945]
General Rule: Bailee is not liable for loss or damage
due to a fortuitous event [Art. 1174], since the bailor
retains ownership of the thing
Exception: Bailee is liable for loss even if due to a
fortuitous event when: [Art. 1942]
(1) He devotes the thing to any purpose different
from that for which it was loaned

(2) He keeps it longer than the period stipulated, or

after the accomplishment of the use for which the
commodatum has been constituted
(3) The thing loaned has been delivered with
appraisal of its value, unless there is stipulation
exempting the bailee from responsibility in case
of a fortuitous event
(4) He lends or leases the thing to a third person who
is a not a member of his household
(5) Being able to save either the thing borrowed or
his own thing, he chose to save the latter.
General Rule [1]: Bailee is liable for deterioration of
thing loaned.
Exception [1]: The deterioration of the thing is due
only to the use thereof and without his fault [Art.
1943]
General Rule [2]: Bailee has no right of retention of
the thing loaned, on the ground that the bailor owes
him something. [Art. 1944]
Exception [2]: Bailee has a right of retention for
damages for known hidden flaws mentioned in Art
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PAGE 281

1951. [Art. 1944]

INTEREST AND SUSPENSION OF USURY LAW
Interest is the compensation allowed by law or fixed
by the parties for the loan or forbearance of money,
goods or credits
KINDS OF INTEREST

(1) Simple interest Paid for the principal at a certain

rate fixed or stipulated by the parties.
(2) Compound Interest that which is imposed upon
interest due and unpaid.
(3) Legal Interest that which the law directs to be
charged in the absence of any agreement as to
the rate between the parties.
(4) Lawful Interest that which the laws allow or do
not prohibit
(5) Unlawful or Usurious Interest paid or stipulated
to be paid beyond the maximum fixed by law.
However, by virtue of CB Circular 905, usury has
become legally inexistent.
WHEN IS COMPOUND INTEREST ALLOWED?
(1) When there is an express written stipulation to
that effect [Art. 1956]
(2) Upon judicial demand. HOWEVER, debtor is not
liable to pay compound interest even after
judicial demand when there is no stipulation for
payment of interest. [Art. 2212]
REQUISITES FOR INTEREST TO BE CHARGEABLE

(1) Must be expressly stipulated [Art 1956]

(2) Agreement must be in writing [Art.1956]
(3) Must be lawful
While it is true that under Article 1956 of the Civil
Code no interest shall be due unless it has been
expressly stipulated in writing, this applies only to

interest for the use of money. It does not

comprehend interest paid as damages. [Integrated
Realty Corporation v. Philippine National Bank, 174
SCRA 295]
EXCEPTIONS TO REQUISITE OF EXPRESS STIPULATION

(1) The debtor in delay is liable to pay legal interest

(6% or 12% per annum) as indemnity for
damages [Art. 2209]
(2) Interest accruing from unpaid interest Interest
demanded shall earn interest from the time it is
judicially demanded [Art. 2212] or where there is
an express stipulation [Art. 1959]
RULES FOR AWARD OF INTEREST IN THE CONCEPT OF
ACTUAL AND COMPENSATORY DAMAGES (Eastern

Shipping Lines v. CA, 234 SCRA 78)

(1) When the obligation breached consists in the
payment of a sum of money, i.e., a loan or
forbearance of money, the interest due should be
that which may have been stipulated in writing.
Furthermore, the interest due shall itself earn
legal interest from the time it is judicially
demanded. In the absence of stipulation, the rate
of interest shall be 12% per annum to be
computed from default, i.e., from judicial or
extrajudicial demand under and subject to the
provisions of Art.1169.
(2) When an obligation, not constituting a loan or
forbearance of money, is breached, an interest on
the amount of damages awarded may be
imposed at the discretion of the court at the rate
of 6% per annum. No interest, however, shall be
adjudged on unliquidated claims or damages
except when or until the demand can be
established with reasonable certainty.
Accordingly, where the demand is established
with reasonable certainty, the interest shall begin
to run from the time the claim is made judicially
or extrajudicially (Art. 1169) but when such
certainty cannot be so reasonably established at
the time the demand is made, the interest shall
begin to run only from the date the judgment of
the court is made (at which time the
quantification of damages may be deemed to
have been reasonably ascertained). The actual
base for the computation of legal interest shall, in
any case, be on the amount finally adjudged.
(3) When the judgment of the court awarding a sum
of money becomes final and executory, the rate of
legal interest, whether the case falls under
paragraph 1 or paragraph 2, above, shall be 12%
per annum from such finality until its satisfaction,
this interim period being deemed to be by then
an equivalent to a forbearance of credit.
Forbearance is defined, within the context of usury
law, as a contractual obligation of lender or creditor
to refrain, during given period of time, from requiring

borrower or debtor to repay loan or debt then due

and payable (Bataan Seedling v. Republic, 383 SCRA
590)
THE USURY LAW (Act No.2566) is an act fixing rates
of interests upon loans and declaring the effect of
receiving or taking usurious rates and for other
purposes. (Arevalo v. Dimayuga, 49 Phil 894)
CB Circular No. 905 abolished interest rate ceilings.
With the promulgation of such circular, usury has
become legally inexistent as the parties can now
legally agree on any interest that may be charged on
the loan.
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ELEMENTS OF USURY

(1) A loan or forbearance of money

(2) An understanding between parties that the loan
shall and may be returned
(3) An unlawful intent to take more than the legal
rate for the use of money or its equivalent
(4) The taking or agreeing to take for the use of the
loan of something in excess of what is allowed by
law.
A usurious loan transaction is not a complete nullity
but defective only with respect to the agreed interest.
(Carpo v. Chua, G.R. Nos. 150773 and 153599)

Deposit

Deposit is constituted from the moment a person

receives a thing belonging to another, with the
obligation of safely keeping it and of returning the
same. If the safekeeping of the thing delivered is not
the principal purpose of the contract, there is no
deposit but some other contract. [Art.1962]
CHARACTERISTICS
(1) Real Contract because it is perfected by the
delivery of the subject matter.
(2) Principal purpose of the contract of deposit is the
safekeeping of the thing delivered.
(3) If gratuitous, it is unilateral because only the
depository has an obligation. If onerous, it is
bilateral.
The principal purpose is safekeeping of the thing
delivered, so that if it is only an accessory or
secondary obligation, deposit is not constituted but
some other contract.
CONTRACT OF DEPOSIT IS GENERALLY
GRATUITOUS [Art. 1965], subject to the following
exceptions:
(1) There is a contrary stipulation
(2) Depository is in the business of storing goods
(3) Property saved from destruction during calamity
without owners knowledge; just compensation
should be given to the depository. [Art. 1996(2)
and Art. 1997, par.2]
ONLY MOVABLE THINGS MAY BE THE OBJECT

OF A DEPOSIT [Art. 1966] if the deposit is either

voluntary [Art. 1968] or necessary [Art. 1996].
HOWEVER, a judicial deposit may cover movable as
well an immovable property, its purpose being to
protect the rights of parties to the suit [Art. 2006].
OBLIGATIONS OF DEPOSITOR
(1) Depositor is obliged to reimburse the depositary
for expenses incurred for preservation if deposit
is gratuitous. [Art. 1992]
(2) Depositor is obliged to pay losses incurred due to
character of thing deposited. [Art. 1993]
General Rule: The depositor shall reimburse the
depositary for any loss arising from the character of
the thing deposited [Art. 1993]
Exceptions
(1) Depositor was not aware of the danger;
(2) Depositor was not expected to know the
dangerous character of the thing;
(3) Depositor notified the depositary of such
dangerous character;
(4) Depositary was aware of the danger without
advice from the depositor.
EXTINGUISHMENT OF DEPOSIT
A DEPOSIT IS EXTINGUISHED:
(1) Upon the loss or deterioration of the thing
deposited;
(2) Upon the death of either the depositor or the
depositary, ONLY in gratuitous deposits;
(3) By other modes provided in the Civil Code, e.g.
novation, merger, etc. [See Art. 1231]
EFFECT OF DEATH OF DEPOSITOR OR
DEPOSITARY [Art. 1995]
(1) Where deposit gratuitous death of either of the
depositor or depositary extinguishes the deposit
(personal in nature). By the word extinguished,
the law really means that the depositary is not
obliged to continue with the contract of deposit.
(2) Where deposit for compensation not
extinguished by the death of either party.
KINDS OF DEPOSIT
(1) Judicial
(2) Extrajudicial
(a) Voluntary
(b) Necessary
VOLUNTARY DEPOSIT
Voluntary Deposit - delivery is made by the will of the
depositor or by two or more persons each of whom
believes himself entitled to the thing deposited [Art.
1968]
NECESSARY DEPOSIT
Necessary Deposit - made in compliance with a legal
obligation, or on the occasion of any calamity, or by
travelers in hotels and inns [Arts. 1996-2004] or by
travelers with common carriers [Arts. 1734-1735]
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KINDS OF NECESSARY DEPOSITS

(1) It is made in compliance with a legal obligation,

in which case it is governed by the law
establishing it, and in case of deficiency, the rules
on voluntary deposit e.g. Arts. 538, 586 and 2104
(2) It takes place on the occasion of any calamity,
such as fire, storm, flood, pillage, shipwreck, or
other similar events. There must be a causal
relation between the calamity and the
constitution of the deposit. In this case the
deposit is governed by the rules on voluntary
deposit and Art. 2168
(3) Made by passengers with common carriers. [Art.
1754]
(4) Made by travelers in hotels or inns. [Art. 1998]
DEPOSITS BY TRAVELERS IN HOTELS AND INNS

Before keepers of hotels or inns may be held

responsible as depositaries with regard to the effects
of their guests, the following must concur:
(1) They have been previously informed about the
effects brought by the guests; and
(2) The latter have taken the precautions prescribed
regarding their safekeeping.
EXTENT OF LIABILITY UNDER ART.1998
(1) Those in hotel rooms which come under the
term baggage or articles such as clothing as
are ordinarily used by travelers
(2) Include those lost or damaged in hotel annexes
such as vehicles in the hotels garage.
WHEN HOTEL-KEEPER LIABLE
Regardless of the amount of care exercised:
(1) The loss or injury to personal property is caused
by his servants or employees as well as by
strangers [Art. 2000].
(2) The loss is caused by the act of a thief or robber
done without the use of arms and irresistible
force. [Art. 2001]
WHEN HOTEL-KEEPER NOT LIABLE
(1) The loss or injury is caused by force majeure, like
flood, fire, [Art. 2000] theft or robbery by a
stranger - not the hotel-keepers servant or
employee with the use of firearms or irresistible
force [Art. 2001]
Exception: Hotel-keeper is guilty of fault or
negligence in failing to provide against the loss or
injury from his cause. [Arts. 1170 and 1174]
(2) The loss is due to the acts of the guests, his
family, servants, visitors [Art.2002]
(3) The loss arises from the character of the things
brought into the hotel (Ibid.)
(Note: The hotel-keeper cannot free himself from
responsibility by posting notices to the effect that he
is not liable for the articles brought by the guest.
Such kind of stipulation shall be VOID. [Art. 2003])
Triple-V Food Services v. Filipino Merchants Insurance
Company: Regarding the legal deposit of a vehicle

that was stolen while parked with Saisaki restaurant,

the depositary may not exempt itself from
responsibility for loss or damage of the thing
deposited with it, by exclusionary stipulation. Such
stipulations are void for being contrary to law.
HOTEL-KEEPERS RIGHT TO RETENTION
(1) The hotel-keeper has a right to retain the things
brought into the hotel by the guest, as a security
for credits on account of
(a) lodging, and
(b) supplies usually furnished to hotel guests (Art.
2004)
(2) NOTE: The right of retention recognized in this
article is in the nature of a pledge created by
operation of law.
JUDICIAL DEPOSIT
Judicial Deposit takes place when an attachment or
seizure of property in litigation is ordered [Arts.
2005-2009]
NATURE AND PURPOSE

It is auxiliary to a case pending in court. The purpose

is to maintain the status quo during pendency of the
litigation or to insure the right of the parties to the
property in case of a favorable judgment.
DEPOSITARY OF SEQUESTERED PROPERTY

A person is appointed by the court [Art. 2007] with

the obligations:
(1) To take care of the property with the diligence of
a good father of the family. [Art. 2008]
(2) To continue in his responsibility until the
controversy which give rise thereto is ended
unless the court so orders. [Art. 2007]
APPLICABLE LAW

(1) The law on judicial deposit is remedial or

procedural in nature.
(2) Rules of Court shall govern matters not provided
for in the Civil Code. [Art. 2009]

Guaranty and Suretyship

Guaranty is a contract whereby a person, called the

guarantor, binds himself to the creditor to fulfill the
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obligation of the principal debtor in case the latter

should fail to do so. [Art. 2047]
While a surety undertakes to pay if the principal does
not pay, the guarantor only binds himself to pay if
the principal cannot pay [See benefit of excussion, Art.
2058].
Suretyship is a relation which exists where one
person (principal) has undertaken an obligation and
another person (surety) is also under a direct and
primary obligation or other duty to a third person
(oblige), who is entitled to but one performance, and
as between the two who are bound, the one rather
than the other should perform.
If a person binds himself solidarily with the principal

debtor, the contract is called suretyship and the

guarantor is called a surety.
GUARANTY DISTINGUISHED FROM SURETYSHIP
Guaranty
Suretyship
Guarantors liability
depends upon an
independent agreement
to pay the obligation
Surety assumes liability
as a regular party to the
undertaking
Guarantors engagement
is a collateral
undertaking
Surety is an original
promissory
Guarantor is subsidiarily
liable i.e. only obliged to
pay if the principal
cannot pay
Surety is primarily liable
i.e. bound to pay if the
principal does not pay
Guarantor not bound to
take notice of default of
his principal
Surety ordinarily held to
know every default of his
principal
Guarantor often
discharged by the mere
indulgence of the
creditor and is usually
not liable unless notified
of the principals default
Surety not discharged
either by the mere
indulgence of the
creditor or by want of
notice of default of the
principal
NATURE AND EXTENT OF GUARANTY
NATURE AND EXTENT OF GUARANTY

(1) A guaranty is generally gratuitous [2048]

(a) General Rule: Guaranty is gratuitous
(b) Exception: When there is a stipulation to the
contrary
(2) On the cause of a guaranty contract
A guarantor or surety is bound by the same
consideration that makes the contract effective
between the principal parties thereto. [Severino v.
Severino]
(a) Presence of cause which supports principal
obligation: Cause of the contract is the same

cause which supports the obligation as to the

principal debtor. The consideration which
supports the obligation as to the principal
debtor is a sufficient consideration to support
the obligation of a guarantor or surety.
(b) Absence of direct consideration or benefit to
guarantor: Guaranty or surety agreement is
regarded valid despite the absence of any
direct consideration received by the guarantor
or surety, such consideration need not pass
directly to the guarantor or surety; a
consideration moving to the principal will
suffice.
(3) A married woman who is a guarantor binds only
her separate property, generally [2049]
Exceptions
(a) With her husbands consent, bind the
community or conjugal partnership property
(b) Without husbands consent, in cases provided
by law, such as when the guaranty has
redounded to the benefit of the family.
(4) A guaranty need not be undertaken with the
knowledge of the debtor [2050]
(a) Guaranty is unilateral exists for the benefit
of the creditor and not for the benefit of the
principal debtor
(b) Creditor has every right to take all possible
measures to secure payment of his credit
guaranty can be constituted even against the
will of the principal debtor
However, as regards payment made by a third
person:
(a) Payment without the knowledge or against
the will of the debtor:
(i) Guarantor can recover only insofar as the
payment has been beneficial to the debtor
[Art. 1236]
(ii) Guarantor cannot compel the creditor to
subrogate him in his rights [Art. 1237]
(b) Payment with knowledge or consent of the
debtor: Subrogated to all the rights which the
creditor had against the debtor
(5) The guaranty must be founded on a valid principal
obligation [2052(1)]
Guaranty is an accessory contract: It is an
indispensable condition for its existence that
there must be a principal obligation. Hence, if the
principal obligation is void, it is also void.
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(6) A guaranty may secure the performance of a

voidable, unenforceable, and natural obligation
[2052(2)]
A guaranty may secure the performance of a:
(a) Voidable contract such contract is binding,
unless it is annulled by a proper court action

(b) Unenforceable contract because such

contract is not void
(c) Natural obligation the creditor may proceed
against the guarantor although he has no
right of action against the principal debtor for
the reason that the latters obligation is not
civilly enforceable. When the debtor himself
offers a guaranty for his natural obligation, he
impliedly recognizes his liability, thereby
transforming the obligation from a natural
into a civil one.
(7) A guaranty may secure a future debt [2053]
Continuing Guaranty or Suretyship:
(a) Under the Civil Code, a guaranty may be given
to secure even future debts, the amount of
which may not be known at the time the
guaranty is executed. This is the basis for
contracts denominated as continuing
guaranty or suretyship. [Dio v. CA]
(b) Future debts, even if the amount is not yet
known, may be guaranteed but there can be
no claim against the guarantor until the
amount of the debt is ascertained or fixed and
demandable
Rationale: A contract of guaranty is subsidiary.
(a) To secure the payment of a loan at maturity
surety binds himself to guarantee the
punctual payment of a loan at maturity and
all other obligations of indebtedness which
may become due or owing to the principal by
the borrower.
(b) To secure payment of any debt to be
subsequently incurred a guaranty shall be
construed as continuing when by the terms
thereof it is evident that the object is to give a
standing credit to the principal debtor to be
used from time to time either indefinitely or
until a certain period, especially if the right to
recall the guaranty is expressly reserved.
(c) To secure existing unliquidated debts refers
to debts existing at the time of the
constitution of the guaranty but the amount
thereof is unknown and not to debts not yet
incurred and existing at that time.
(d) The surety agreement itself is valid and
binding even before the principal obligation
intended to be secured thereby is born, just
like obligations which are subject to a
condition precedent are valid and binding
before the occurrence of the condition
precedent.
A continuing guaranty is one which is not limited to a
single transaction, but which contemplates a future
course of dealing, covering a series of transactions,
generally for an indefinite time or until revoked. It is

prospective in its operation and is generally intended

to provide security with respect to future transactions
within certain limits, and contemplates a succession
of liabilities, for which, as they accrue, the guarantor
becomes liable.
A continuing guaranty is one which covers all
transactions, including those arising in the future,
which are within the description or contemplation of
the contract of guaranty, until the expiration or
termination thereof. A guaranty shall be construed
as continuing when by the terms thereof it is evident
that the object is to give a standing credit to the
principal debtor to be used from time to time either
indefinitely or until a certain period, especially if the
right to recall the guaranty is expressly reserved.
Where the contract of guaranty states that the same
is to secure advances to be made "from time to time"
the guaranty will be construed to be a continuing
one.
(8) A guaranty may secure the performance of a
conditional obligation [2053]
(a) Principal obligation subject to a suspensive
condition the guarantor is liable only after
the fulfillment of the condition.
(b) Principal obligation subject to a resolutory
condition the happening of the condition
extinguishes both the principal obligation and
the guaranty
(9) A guarantors liability cannot exceed the principal
obligation [2054]
General Rule:
Guaranty is a subsidiary and accessory contract
guarantor cannot bind himself for more than the
principal debtor and even if he does, his liability
shall be reduced to the limits of that of the
debtor. But the guarantor may bind himself for
less than that of the principal.
Exceptions
(a) Interest, judicial costs, and attorneys fees as
part of damages may be recovered creditors
suing on a suretyship bond may recover from
the surety as part of their damages, interest at
the legal rate, judicial costs, and attorneys
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PAGE 286

fees when appropriate, even without

stipulation and even if the surety would
thereby become liable to pay more than the
total amount stipulated in the bond.
Interest runs from:
(1) Filing of the complaint (upon judicial
demand); or
(2) The time demand was made upon the surety
until the principal obligation is fully paid
(upon extra-judicial demand)
Rationale: Surety is made to pay, not by

reason of the contract, but by reason of his

failure to pay when demanded and for having
compelled the creditor to resort to the courts
to obtain payment.
(b) Penalty may be provided a surety may be
held liable for the penalty provided for in a
bond for violation of the condition therein.
Principals liability may exceed guarantors
obligations
The amount specified in a surety bond as the
suretys obligation does not limit the extent of the
damages that may be recovered from the
principal, the latters liability being governed by
the obligations he assumed under his contract
(10) The existence of a guaranty is not presumed
[2055]
Guaranty requires the expression of consent on
the part of the guarantor to be bound. It cannot
be presumed because of the existence of a
contract or principal obligation.
Rationale:
(a) There be assurance that the guarantor had
the true intention to bind himself;
(b) To make certain that on making it, the
guarantor proceeded with consciousness of
what he was doing.
(11) Contract of guaranty is covered by the Statute of
Frauds [See Art. 1403(2)(b)]
Guaranty must not only be expressed but must so
be reduced into writing. Hence, it shall be
unenforceable by action, unless the same or
some note or memorandum thereof be in writing,
and subscribed by the party charged, or by his
agent; evidence, therefore, of the agreement
cannot be received without the writing, or a
secondary evidence of its contents. However, it
need not appear in a public document
NATURE AND EXTENT OF SURETYSHIP
(1) Liability is contractual and accessory but direct
(2) Liability is limited by the terms of the contract
(3) Liability arises only if principal debtor is held liable
(a) In the absence of collusion, the surety is
bound by a judgment against the principal
even though he was not a party to the
proceedings;
(b) The creditor may sue, separately or together,
the principal debtor and the surety;
(c) A demand or notice of default is not required
to fix the suretys liability
Exception: Where required by the provisions of
the contract of suretyship
(d) A surety bond is void where there is no
principal debtor because such an undertaking
presupposes that the obligation is to be
enforceable against someone else besides the

surety, and the latter can always claim that it

was never his intention to be the sole person
obligated thereby.
Note: Surety is not entitled to exhaustion
(1) The undertaking is to the creditor, not the debtor
The surety makes no covenant or agreement with
the principal that it will fulfill the obligation
guaranteed for the benefit of the principal. The
suretys undertaking is that the principal shall
fulfill his obligation and that the surety shall be
relieved of liability when the obligation secured is
performed.
Exception: Unless otherwise expressly provided.
(2) Prior demand by the creditor upon principal not
required. Surety is not exonerated by neglect of
creditor to sue principal.
Strictissimi juris rule applicable only to
accommodation surety
Reason: An accommodation surety acts without
motive of pecuniary gain and hence, should be
protected against unjust pecuniary impoverishment
by imposing on the principal, duties akin to those of
a fiduciary. This rule will apply only after it has been
definitely ascertained that the contract is one of
suretyship or guaranty.
Strictissimi juris rule NOT applicable to compensated
sureties
Reasons:
(1) Compensated corporate sureties are business
associations organized for the purpose of
assuming classified risks in large numbers, for
profit and on an impersonal basis.
(2) They are secured from all possible loss by
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PAGE 287

adequate counter-bonds or indemnity

agreements.
Such corporations are in fact insurers and in
determining their rights and liabilities, the rules
peculiar to suretyship do not apply.
The stipulation in the indemnity agreement allowing
the surety to recover even before it paid the creditor
is enforceable. In accordance therewith, the surety
may demand from the indemnitors even before
paying the creditors. [Mercantile Insurance Company
v. Ysmael, 169 SCRA 66]
EFFECT OF GUARANTY
EFFECTS OF GUARANTY BETWEEN THE GUARANTOR AND
THE CREDITOR

(1) The guarantor has the right to benefit from

excussion/ exhaustion [2058]
The guarantor cannot be compelled to pay the
creditor unless the latter has:
(a) Exhausted all of the property of the debtor;
and
(b) Resorted to all the legal remedies against the

debtor.
Exceptions to the benefit of excussion (2059)
(a) As provided in Art. 2059:
(i) If the guarantor has expressly
renounced it.
(ii) If he has bound himself solidarily
with the debtor. Here, the liability
assumed is that of a surety. The
guarantor becomes primarily liable
as a solidary co- debtor. In effect,
he renounces in the contract itself
the benefit of exhaustion.
(iii) In case of insolvency of the debtor
guarantor guarantees the
solvency of the debtor. If the
debtor becomes insolvent, the
liability of the guarantor arises as
the debtor cannot fulfill his
obligation
(iv) When the debtor has absconded,
or cannot be sued within the
Philippines the creditor is not
required to go after a debtor who is
hiding or cannot be sued in our
courts, and to incur the delays and
expenses incident thereto.
Exception: When the debtor has
left a manager or representative
(v) If it may be presumed that an
execution on the property of the
principal debtor would not result in
the satisfaction of the obligation
If such judicial action including
execution would not satisfy the
obligation, the guarantor can no
longer require the creditor to resort
to all such remedies against the
debtor as the same would be but a
useless formality. It is not
necessary that the debtor be
judicially declared insolvent.
Southern Motors, Inc. v. Barbosa: The right of
guarantorsto demand exhaustion of the property of
the principal debtor, exists only when a pledge or a
mortgage has not been given as special security for
the payment of the principal obligation.
Luzon Steel Corp. v. Sia: The surety in the present
case bound itself "jointly and severally" (in solidum)
with the defendant; and excussion (previous
exhaustion of the property of the debtor) shall not
take place "if he (the guarantor) has bound himself
solidarily with the debtor".
(b) In order that the guarantor may make use of
the benefit of excussion, he must:
(i) Set it up against the creditor upon

the latters demand for payment

from him;
(ii) Point out to the creditor:
(a) Available property of the debtor the
guarantor should facilitate the
realization of the excussion since he is
the most interested in its benefit.
(b) Within the Philippine territory
excussion of property located abroad
would be a lengthy and extremely
difficult proceeding and would not
conform with the purpose of the
guaranty to provide the creditor with the
means of obtaining the fulfillment of the
obligation.
(c) Sufficient to cover the amount of the
debt
(c) If he is a judicial bondsman and sub- surety
(2084)
(d) Where a pledge or mortgage has been given
by him as a special security
(e) If he fails to interpose it as a defense before
judgment is rendered against him.
(2) The creditor has the right to secure a judgment
against the guarantor prior to the excussion
General Rule: An ordinary personal guarantor
(NOT a pledgor or mortgagor), may demand
exhaustion of all the property of the debtor

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PAGE 288

before he can be compelled to pay.

Exception: The creditor may, prior thereto, secure
a judgment against the guarantor, who shall be
entitled, however, to a deferment of the execution
of said judgment against him, until after the
properties of the principal debtor shall have been
exhausted, to satisfy the latters obligation.
(3) The creditor has the duty to make prior demand for
payment from the guarantor 2060)
(a) The demand is to be made only after
judgment on the debt
(b) Joining the guarantor in the suit against the
principal debtor is not the demand intended
by law. Actual demand has to be made.
(4) The guarantor has the duty to set up the benefit of
excussion [2060]
As soon as he is required to pay, guarantor must
also point out to the creditor available property
(not in litigation or encumbered) of the debtor
within the Philippines.
(5) The creditor has the duty to resort to all legal
remedies [2058, 2061]
After the guarantor has fulfilled the conditions
required for making use of the benefit of
excussion, it becomes the duty of the creditor to:
(a) Exhaust all the property of the debtor pointed

out by the guarantor;

(b) If he fails to do so, he shall suffer the loss for
the insolvency of the debtor, but only to the
extent of the value of the said property
(6) The creditor has the duty to notify the guarantor in
the action against the debtor [2062]
Notice to the guarantor is mandatory in the
action against the principal debtor. The
guarantor, however, is not duty bound to appear
in the case, and his non- appearance shall not
constitute default, w/ its consequential effects.
Rationale: To give the guarantor the opportunity
to allege and substantiate whatever defenses he
may have against the principal obligation, and
chances to set up such defenses as are afforded
him by law
(7) A compromise shall not prejudice the person not
party to it [2063]
(a) A compromise between creditor and principal
debtor benefits the guarantor but does not
prejudice him.
(b) A compromise between guarantor and the
creditor benefits but does not prejudice the
principal debtor.
(8) Co-guarantors are entitled to the benefit of division
[2065]
The benefit of division applies only when there
are several guarantors and one debtor for a
single debt. Except when solidarity has been
stipulated, a co-guarantor is liable only to the
extent of his share in the obligation as divided
among all the co-guarantors.
EFFECTS OF GUARANTY BETWEEN THE DEBTOR AND THE
GUARANTOR

(1) The guarantor who pays has the right to be

subrogated to the rights of the creditor [2067]
A guarantor who pays the debt is entitled to every
remedy which the creditor has against the
principal debtor, to enforce every security and all
means of payments; to stand in the place of the
creditor not only through the medium of the
contract, but even by means of the securities
entered into w/out the knowledge of the surety;
having the right to have those securities
transferred to him though there was no
stipulation for it, and to avail himself of all
securities against the debtor
The need to enforce the provisions on indemnity
in Article 2066 forms the basis for the
subrogation clause of Article 2067. The
assumption, however, is that the guarantor who is
subrogated to the rights of the creditor, has the
right to be reimbursed for his answering for the
obligation of the debtor. Absent this right of
reimbursement, subrogation will not be proper.
(2) The guarantor has the duty to notify the debtor

before paying the creditor [2068].

Should payment be made without notification,
and supposing the debtor has already made a
prior payment, the debtor would be justified in
setting up the defense that the obligation has
already been extinguished by the time the
guarantor made the payment. The guarantor will
then lose the right of reimbursement and
consequently the right of subrogation.
(3) The guarantor cannot demand reimbursement for
payment made by him before the obligation has
become due [2069].
General Rule: Since a contract of guaranty is only
subsidiary, the guarantor cannot be liable for the
obligation before the period on which the
debtors Liability will accrue. Any payment made
by the guarantor before the obligation is due
cannot be indemnified by the debtor.
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Exception: Prior consent or subsequent

ratification by the debtor
(4) The guarantor may proceed against the debtor
even before payment has been made [2071]
General Rule: Guarantor has no cause of action
against the debtor until after the former has paid
the obligation.
Exceptions (Art. 2071)
(a) When he is sued for the payment;
(b) In case of insolvency of the principal debtor;
(c) When the debtor has bound himself to relieve
him from the guaranty within a specified
period, and this period has expired;
(d) When the debt has become demandable, by
reason of the expiration of the period for
payment;
(e) After the lapse of 10 years, when the principal
obligation has no fixed period for its maturity,
unless it be of such nature that it cannot be
extinguished except within a period longer
than 10 years;
(f) If there are reasonable grounds to fear that
the principal debtor intends to abscond;
(g) If the principal debtor is in imminent danger of
becoming insolvent.
Rationale: To enable the guarantor to take
measures for the protection of his interest in view
of the probability that he would be called upon to
pay the debt. As such, he may, in the alternative,
obtain release from the guaranty; or demand
security that shall protect him from any
proceeding by the creditor, and against the
insolvency of the debtor.
EFFECTS OF GUARANTY AS BETWEEN CO-GUARANTORS
When there are two or more guarantors, one debtor
and one debt:

(a) The one who pays may demand from each of the
others the share proportionally owing to him
(b) If any of the guarantors is insolvent, his share
shall be borne by the others, including the payer,
in the same proportion [Art. 2073]
For purposes of proportionate reimbursement, the
other guarantors may interpose such defenses
against the paying guarantor as are available to the
debtor against the creditor, except those that are
personal to the debtor [Art. 2074]
Requisites for the applicability of Art. 2073:
(1) Payment has been made by one guarantor;
(2) The payment was made because
(a) Of the insolvency of the debtor, or
(b) By judicial demand
(3) The paying guarantor seeks to be indemnified
only to the extent of his proportionate share in
the total obligation.
EXTINGUISHMENT OF GUARANTY
(1) Once the obligation of the debtor is extinguished
in any manner provided in the Civil Code, the
obligation of the guarantor is also extinguished
[2076]. However, there may be instances when,
after the extinguishment of the guarantors
obligation (as in the case of a release from the
guaranty), the obligation of the debtor still
subsists.
(2) Although the guarantor generally has to make
payment in money, any other thing of value, if
accepted by the creditor, is valid payment and
therefore releases the guarantor [dacion en pago]
[2077].
(3) If one guarantor is released without the consent
of the others, the release would benefit the coguarantors
to the extent of the proportionate
share of the guarantor released [2078].
(4) A guarantor is released if the creditor, without the
guarantors consent, extends the time within
which the debtor may perform his obligation
[2079]. This is to protect the interest of the
guarantor should the debtor be insolvent during
the period of extension and deprive the guarantor
of his right to reimbursement.
(5) The guarantors are released if by some act of the
creditor they cannot be subrogated to the rights,
mortgages and preferences of the latter. [2080]
In order to constitute an extension discharging the
surety, it should appear that the extension was for (1)
a definite period, (2) pursuant to an enforceable
agreement between the principal and the creditor,
and (3) that it was made without the consent of the
surety or with a reservation of rights with respect to
him. (Filipinas Textile Mills v. CA, November 12, 2003)
LEGAL AND JUDICIAL BONDS
Bond an undertaking that is sufficiently secured,

and not cash or currency.

Bondsman a surety offered in virtue of a provision
of law or a judicial order.
QUALIFICATIONS OF PERSONAL BONDSMAN [2082 IN
RELATION TO ART. 2056]
(1) He possesses integrity;
(2) He has capacity to bind himself;
(3) He has sufficient property to answer for the
obligation which he guarantees.
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PAGE 290

[2083]
(a) Guaranty or suretyship is a personal security.
(b) Pledge or mortgage is a property or real security.
If the person required to give a legal or judicial
bond should not be able to do so, a pledge or
mortgage sufficient to cover the obligation shall
be admitted in lieu thereof.
BONDSMAN NOT ENTITLED TO EXCUSSION [2084]
A judicial bondsman and the sub-surety are not
entitled to the benefit of excussion.
(a) Reason: They are not mere guarantors, but
sureties whose liability is primary and solidary.
(b) Effect of negligence of creditor: Mere negligence
on the part of the creditor in collecting from the
debtor will not relieve the surety from liability.
PLEDGE OR MORTGAGE IN LIEU OF BOND

Pledge

DEFINITION
Pledge is a contract by virtue of which the debtor
delivers to the creditor or to a third person a movable
or document evidencing incorporeal rights for the
purpose of securing the fulfillment of a principal
obligation with the understanding that when the
obligation is fulfilled, the thing delivered shall be
returned with all its fruits and accessions. [Art.2085
in relation to 2093]
PROVISIONS APPLICABLE ONLY TO PLEDGE
(1) Transfer of possession to the creditor or to third
person by common agreement is essential
[2093].
(a) Actual delivery is important.
(b) Constructive or symbolic delivery of the key to
the warehouse is sufficient to show that the
depositary appointed by common consent of
the parties was legally placed in possession.
(2) All movables within the commerce of man may
be pledged as long as they are susceptible of
possession [2094].
(3) Incorporeal rights may be pledged. The
instruments representing the pledged rights shall
be delivered to the creditor; if negotiable, they
must be indorsed [2095].
(4) Pledge shall take effect against 3rd persons only
if the following appear in a public instrument:
(a) Description of the thing pledged.

(b) Date of the pledge [2096].

(5) The thing pledged may be alienated by the
pledgor or owner only with the consent of the
pledgee. Ownership of the thing pledged is
transmitted to the vendee or transferee as soon
as the pledgee consents to the alienation, but the
latter shall continue to have possession [2097].
(6) Creditor has the right to retain the thing in his
possession or in that of a third person to whom it
has been delivered, until the debt is paid [2098].
(7) Special Laws apply to pawnshops and
establishments engaged in making loans secured
by pledges. Provisions of the Civil Code shall
apply subsidiarily to them.
In case of doubt as to whether a transaction is a
pledge or a dation in payment, the presumption is in
favor of pledge, the latter being the lesser
transmission of rights and interests. (Manila Banking
Corp. v. Teodoro, 169 SCRA 95)
KINDS
(1) Voluntary or conventional Created by agreement
of parties.
(2) Legal Created by operation of law.
ESSENTIAL REQUIREMENTS
ESSENTIAL REQUISITES COMMON TO PLEDGE AND
MORTGAGE [ART. 2085]

(1) Constituted to secure the fulfillment of a principal

obligation.
(2) Pledgor or mortgagor must be the absolute
owner of the thing pledged or mortgaged.
(3) The persons constituting the pledge or mortgage
have the free disposal of their property, and in the
absence thereof, that they be legally authorized
for the purpose.
(4) Cannot exist without a valid obligation.
(5) Debtor retains the ownership of the thing given
as a security.
(6) When the principal obligation becomes due, the
thing pledged or mortgaged may be alienated for
the payment to the creditor. [Art. 2087]
OBLIGATION OF PLEDGEE
(1) The pledgee cannot deposit the thing pledged
with a 3rd person, unless there is a contrary
stipulation [2100].
(2) Is responsible for the acts of his agents or
employees with respect to the thing pledged
[2100].
(3) Has no right to use the thing or to appropriate its
fruits without authority from the owner [2104]
(4) May cause the public sale of the thing pledged if,
without fault on his part, there is danger of
destruction, impairment or dimunition in value of
the thing. The proceeds of the auction shall be a
security for the principal obligation [2108].
RIGHTS OF PLEDGOR

(1) Takes responsibility for the flaws of the thing

pledged [2101 in relation to Art. 1951].
(2) Cannot ask for the return of the thing against the
will of the creditor, unless and until he has paid
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the debt and its interest, with expenses in a

proper case [2105].
Yuliongsiu vs. PNB: There is authority supporting the
proposition that the pledgee can temporarily entrust
the physical possession of the chattels pledged to
the pledgor without invalidating the pledge. In such
a case, the pledgor is regarded as holding the
pledged property merely as trustee for the pledgee.
The type of delivery will depend upon the nature and
the peculiar circumstances of each case.
PNB vs. Atendido: according to law, a pledgee cannot
become the owner of, nor appropriate to himself, the
thing given in pledge. If by the contract of pledge the
pledgor continues to be the owner of the thing
pledged during the pendency of the obligation, it
stands to reason that in case of loss of the property,
the loss should be borne by the pledgor.
(3) Subject to the right of the pledgee under article
2108, pledgor is allowed to substitute the thing
which is in danger of destruction or impairment
without any fault on the part of the pledgee with
another thing of the same kind and quality [2107].
(4) May require that the thing be deposited with a
3rd person, if through the negligence or willful
act of the pledgee the thing is in danger of being
lost or impaired [2106].
PERFECTION ARTS. 2093, 2096
REQUISITES FOR PERFECTION

(1) The thing pledged is placed in the possession of

the creditor or a third person [2093]
(2) For the pledge to take effect as against third
persons, a description of the thing pledged and
the date of the pledge should appear in a public
instrument [2096]
FORECLOSURE ARTS. 2112, 2115
REQUIREMENTS IN SALE OF THE THING PLEDGED BY A
CREDITOR, IF CREDIT IS NOT PAID ON TIME (ART 2112)

(1) Debt is due and unpaid.

(2) Sale must be at a public auction.
(3) Notice to the pledgor and owner, stating the
amount due.
(4) Sale must be made with the intervention of a
notary public.
(5) If at the first auction the thing is not sold, a
second one with the same formalities shall be
held.
(6) If at the second auction, there is no sale either,
the creditor may appropriate the thing pledged
but he shall give an acquittance (release) for his
entire claim.

[Art 2115]
(1) Extinguishes the principal obligation, whether the
proceeds of the sale is more or less than the
amount due.
(2) If the price of sale is more than amount due, the
debtor is not entitled to the excess unless the
contrary is provided.
(3) If the price of sale is less, the creditor is not
entitled to recover the deficiency. A contrary
stipulation is void.
PLEDGE BY OPERATION OF LAW ART. 2121EFFECT OF THE SALE OF THE THING PLEDGED

2122

LEGAL PLEDGES/PLEDGE BY OPERATION OF LAW

[Art.
2121]
(1) Necessary expenses shall be refunded to every
possessor, but only a possessor in good faith may
retain the thing until he has been reimbursed.
(a) Useful expenses shall be refunded only to the
possessor in good faith with the same right of
retention, the person who has defeated him in
the possession having the option of refunding
the amount of the expenses or of paying the
increase in value which the thing may have
acquired and by reason thereof [Art. 546]
(2) He who has executed work upon a movable has a
right to retain it by way of pledge until he is paid.
This is called the mechanics lien. [Art. 1731]
(3) The agent may retain the things which are the
objects of agency until the principal effects the
reimbursement and pays the indemnity. This is
called the agents lien. [Art. 1914]
(4) The laborers wages shall be a lien on the goods
manufactured or the work done. [Art. 1707]
Note:
(1) In legal pledges, the remainder of the price of the
sale shall be delivered to the obligor.
(2) Public auction of legal pledges may only be
executed after demand of the amount for which
the thing is retained. It shall take place within one
month after the demand, otherwise the pledgor
may demand the return of the thing pledged,
provided s/he is able to show that the creditor did
not cause the public sale without justifiable
grounds. [Article 2122]
DISTINGUISHED FROM CHATTEL MORTGAGE
ARTS. 2140, 1484
Chattel Mortgager Pledge
Delivery of Personal Property
Not required Delivery is required for the
validity of the pledge
Registration in the Chattel Mortgage Register
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Chattel Mortgager Pledge

Necessary for validity of
the CM against third

persons
Not necessary;
Public document is
enough to bind third
persons
Right to Excess of Proceeds of Sale
The excess goes to the
debtor/ mortgagor
The excess goes to the
pledgee/creditor, unless
otherwise stipulated
Right to Recover Deficiency
Creditor/ mortgagee can
recover from the debtor/
mortgagor, except if
covered by Recto Law
Creditor/ mortgagee is
not entitled to recover any
deficiency after the
property is sold,
notwithstanding contrary
stipulation
Note: The provisions of the Civil Code on pledge,
insofar as they are not in conflict with the Chattel
Mortgage Law shall be applicable to chattel
mortgages [Art. 2141]

Real Mortgage

DEFINITION AND CHARACTERISTICS

Mortgage is a contract whereby the debtor secures to
the creditor the fulfillment of a principal obligation,
immediately making immovable property or real
rights answerable to the principal obligation in case
it is not complied with at the time stipulated.
OBJECTS OF REAL MORTGAGE [Art. 2124]
(1) Immovables
(2) Alienable real rights over immovables.
(a) Future property cannot be an object of
mortgage; however, a stipulation subjecting to
the mortgage improvements which the
mortgagor may subsequently acquire, install
or use in connection with real property already
mortgaged belonging to the mortgagor is
valid.
CHARACTERISTICS

(1) As a general rule, the mortgagor retains

possession of the property. He may deliver said
property to the mortgagee without altering the
nature of the contract of mortgage.
(2) It is not an essential requisite that the principal of
the credit bears interest, or that the interest as
compensation for the use of the principal and the
enjoyment of its fruits be in the form of a certain
percentage thereof.
(3) Mortgage creates an encumbrance over the
property, but ownership of the property is not

parted with. It merely restricts the mortgagors

jus disponendi over the property. The mortgagor
may still sell the property, and any stipulation to
the contrary is void [Art. 2130]
(4) Mortgage extends to the natural accessions, to
the improvements of growing fruits and the rents
or income NOT YET RECEIVED when the
obligation becomes DUE, including indemnity
from insurance, and/or amount received from
expropriation for public use [Art. 2127]
(a) Applies only when the accessions and
accessories subsequently introduced belongs
to the mortgagor.
(b) To exclude them, there must be an express
stipulation, or the fruits must be collected
before the obligation becomes due.
(c) Third persons who introduce improvements
upon the mortgaged property may remove
them at any time
The consideration of the accessory contract of real
estate mortgage is the same as that of the principal
contract. [Central Bank v. CA, 139 SCRA 46]
KINDS

(1) Voluntary constituted by the will of the owner of

the property on which it is created
(2) Legal required by law to be executed in favor of
certain persons:
(a) Persons in whose favor the law establishes a
mortgage have no other right than to demand
the execution and recording of the document
in which the mortgage is formalized [Article
2125]
(b) The bondsman who is to be offered in virtue of
a provision of law or of a judicial order shall
have the qualifications prescribed in Art 2056
(integrity, capacity to bind himself, and
sufficient property to answer for the
obligation), and in other laws [Article 2082]
(c) If the person bound to give a bond should not
be able to do so, a pledge or mortgage
considered sufficient to recover his obligation
shall be admitted in lieu thereof [Article 2083]
(3) Equitable One which, although lacking the
proper formalities of a mortgage, shows the
intention of the parties to make the property a
security for the debt.
(a) lien created through equitable mortgage
ought not to be defeated by requiring
compliance with formalities necessary to the
validity of a voluntary real estate mortgage.
Ex.: Pacto de retro
(b) provisions governing equitable mortgage:
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Arts. 1365, 1450, 1454, 1602, 1603, 1604 and

1607.

PRINCIPLE OF INDIVISIBILITY OF PLEDGE/MORTGAGE

[ART. 2089 TO 2090]

(a) Dayrit v. CA: A mortgage directly and immediately
subjects the property upon which it is imposed. It
is indivisible even though the debt may be
divided, and such indivisibility is likewise
unaffected by the fact that the debtors are not
solidarity liable.
(b) Central Bank v. CA: Where only a portion of the
loan is released, the mortgage becomes
enforceable only as to the proportionate value of
the loan
Indivisibility applies only as to pledgors/mortgagors
who are themselves debtors in the principal
obligation, and not to accommodation pledgors/
mortgagors
"When several things are pledged or mortgaged,
each thing for a determinate portion of the debt, the
pledges or mortgage, are considered separate from
each other. But when the several things are given to
secure the same debt in its entirety, all of them are
liable for the debt, and the creditor does not have to
divide his action by distributing the debt among the
various things pledged or mortgaged. Even when
only a part of the debt remains unpaid, all the things
are still liable for such balance." [Tolentino]
The question is whether or not the written
instrument in controversy was a mortgage OR a
conditional sale. The correct test, where it can be
applied, is the continued existence of a debt or
liability between the parties. If such exists, the
conveyance may be held to be merely a security for
the debt or an indemnity against the liability. (Reyes
v. Sierra, 93 SCRA 473)
ESSENTIAL REQUISITES
ESSENTIAL REQUISITES COMMON TO PLEDGE AND
MORTGAGE

(1) Constituted to secure the fulfillment of a principal

obligation.
(2) Pledgor or mortgagor must be the absolute
owner of the thing pledged or mortgaged.
(3) The persons constituting the pledge or mortgage
have the free disposal of their property, and in the
absence thereof, that they be legally authorized
for the purpose.
Note: Third persons who are not parties to the
principal obligation may secure the latter by
pledging or mortgaging their own property. [Art.
2085]
(4) Cannot exist without a valid obligation.
(5) Debtor retains the ownership of the thing given
as a security.
(6) When the principal obligation becomes due, the
thing pledged or mortgaged may be alienated for
the payment to the creditor. [Art. 2087]

(7) Must be recorded in the Registry of Property in

order to be validly constituted.

Note: The mortgage would still be binding
between the parties even if the instrument is not
recorded.
FORECLOSURE
FORECLOSURE OF MORTGAGE

It is the remedy available to the mortgagee by which

he subjects the mortgaged property to the
satisfaction of the obligation secured by the
mortgage.
(a) In General: An action for foreclosure of a
mortgage is limited to the amount mentioned in
the mortgage, EXCEPT when the mortgage
contract intends to secure future loans or
advancements
(b) BLANKET mortgage/DRAGNET mortgage that
subsumes all debts of past or future origin
(c) Mortgage may be used as a continuing security
which secures future advancements and is not
discharged by the repayment of the amount in
the mortgage
(d) Alienation or assignment of mortgage credit is
valid even if it is not registered
Acceleration Clause, or the stipulation stating that on
the occasion of the mortgagors default, the whole
sum remaining unpaid automatically becomes due
and demandable, is ALLOWED
KINDS OF FORECLOSURE

(1) Judicial Foreclosure

(2) Extrajudicial Foreclosure
JUDICIAL FORECLOSURE

Rule 68, ROC:

(a) May be availed of by bringing an action in the
proper court which has jurisdiction over the area
wherein the real or personal (in case of chattel
mortgage) property involved or a portion thereof
is situated.
(b) If the court finds the complaint to be wellfounded,
it shall order the mortgagor to pay the
amount due with interest and other charges
within a period of not less than 90 days nor more
than 120 days from the entry of judgment. If the
mortgagor fails to pay at the time directed, the
court, upon motion, shall order the property to be
sold to the highest bidder at a public auction.
(c) Upon confirmation of the sale by the court, it
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shall operate to divest the rights of all parties to

the action and to vest their rights to the
purchaser subject to such rights of redemption as
may be allowed by law.
(d) Before the confirmation, the court retains control
of the proceedings
(e) Execution of judgment subject to APPEAL but not
annulment

(f) The foreclosure of the property is completed only

when the sheriffs certificate is executed,
acknowledged and recorded
The Proceeds of the Sale shall be applied to the
Payment of the:
(a) Costs of the sale;
(b) Amount due the mortgagee;
(c) Claims of junior encumbrancers or persons
holding subsequent mortgages in the order of
their priority; and
(d) Balance, if any shall be paid to the mortgagor.
Nature of Judicial Foreclosure Proceedings
(1) Quasi in rem action. Hence, jurisdiction may be
acquired through publication.
(2) Foreclosure is only the result or incident of the
failure to pay debt.
(3) Survives death of mortgagor.
EXTRAJUDICIAL FORECLOSURE [ACT NO. 3135]
(1) Applies to mortgages where the authority to
foreclose is granted to the mortgagee.
(2) Authority is not extinguished by death of
mortgagor or mortgagee. This is an agency
coupled with interest.
(3) Public sale should be made after proper notice to
the public, otherwise it is a jurisdictional defect
which could render the sale voidable.
(4) There is no need to notify the mortgagor, where
there is no contractual stipulation therefor.
Proper notice consists of:
(a) posting notice in three public places and/or
(b) publication in newspaper of general
circulation
Purpose of notice is to obtain the best bid for the
foreclosed property
(5) Surplus proceeds of foreclosure sale belong to
the mortgagor.
(6) Debtor (who must be a NATURAL PERSON) has
the right to redeem the property sold within 1 year
from and after the date of sale.
(a) If the mortgagee is a bank and the debtor is a
juridical person, then there is no right of
redemption. However, it may redeem the
property BEFORE the registration of the TCT
to the buyer, which is similar to the equity of
redemption. The TCT must be registered
within THREE MONTHS after the foreclosure.
(b) The mortgagor can only legally transfer the
right to redeem and the use of the property
during the period of redemption.
(7) Remedy of party aggrieved by foreclosure is a
petition to set aside sale and the cancellation of
writ of possession. However, if the mortgagee is a
bank, the mortgagor is required to post a bond
equal to the value of the mortgagees claim.
(8) Republication of the notice of sale is necessary for

the validity of the postponed extrajudicial sale

(9) In foreclosure of real estate mortgage under Act
3135, the buyer at auction may petition the land
registration court for a writ of possession pending
the one-year period of redemption of the
foreclosed property.
Nature of Power of Foreclosure by Extrajudicial Sale
(1) Conferred for mortgagees protection.
(2) An ancillary stipulation.
(3) A prerogative of the mortgagee.
Note:
(a) Both should be distinguished from execution sale
governed by Rule 39, ROC.
(b) Foreclosure retroacts to the date of registration of
mortgage.
(c) A stipulation of upset price, or the minimum price
at which the property shall be sold to become
operative in the event of a foreclosure sale at
public auction, is null and void.
Right of mortgagee to recover deficiency
(1) Mortgagee is entitled to recover deficiency.
(2) If the deficiency is embodied in a judgment, it is
referred to as deficiency judgment.
(3) Action for recovery of deficiency may be filed even
during redemption period.
(4) Action to recover prescribes after 10 years from
the time the right of action accrues.
Effect of inadequacy of price in foreclosure sale
(1) Where there is right to redeem, inadequacy of
price is immaterial because the judgment debtor
may redeem the property.
(a) Exception: Where the price is so inadequate as
to shock the conscience of the court, taking
into consideration the peculiar circumstances.
(2) Property may be sold for less than its fair market
value, upon the theory that the lesser the price
the easier it is for the owner to redeem.
(3) The value of the mortgaged property has no
bearing on the bid price at the public auction,
provided that the public auction was regularly
and honestly conducted.
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A suit for the recovery of the deficiency after the

foreclosure of a mortgage is in the nature of a
mortgage action because its purpose is precisely to
enforce the mortgage contract. [Caltex v. IAC, 176
SCRA 741]
Waiver of security by creditor
(1) Mortgagee may waive the right to foreclose his
mortgage and maintain a personal action for
recovery of the indebtedness.
(2) Mortgagee cannot have both remedies. This is
because he only has one cause of action, the nonpayment
of the mortgage debt.
Redemption

(1) It is a transaction by which the mortgagor

reacquires the property which may have passed
under the mortgage or divests the property of the
lien which the mortgage may have created
(2) Kinds:
(a) Equity of redemption: in judicial foreclosure of
real estate mortgage under the ROC, it is the
right of the mortgagor to redeem the
mortgaged property by paying the secured
debt within the 120 day period from entry of
judgment or after the foreclosure sale, but
before the sale of the mortgaged property or
confirmation of sale
(i) formal offer to redeem preserves the right of
redemption, e.g., by filing an action to
enforce the right to redeem
(b) Right of redemption: in extrajudicial
foreclosure of real estate mortgage, the right
of the mortgagor to redeem the property
within a certain period after it was sold for the
satisfaction of the debt.
(ii) For natural persons one year from the
registration of the TCT
(iii) For juridical persons three months from
the foreclosure
(iv) Formal offer to redeem must be with
tender of redemption price to preserve
right of redemption
Note: There is no right of redemption in pledge and
chattel mortgage.
Medida v. CA: The rule up to now is that the right of a
purchaser at a foreclosure sale is merely inchoate
until after the period of redemption has expired
without the right being exercised. The title to land
sold under mortgage foreclosure remains, in the
mortgagor or his grantee until the expiration of the
redemption period and conveyance by the master's
deed

Antichresis

DEFINITION AND CHARACTERISTICS

Antichresis is a contract whereby the creditor
acquires the right to receive the fruits of an
immovable of the debtor, with the obligation to
apply then to the payment of the interest, if owing,
and thereafter to the principal of the credit [Art 2132]
CHARACTERISTICS

(1) Accessory contract it secures the performance

of a principal obligation
(2) Formal contract it must be in a specified form
to be valid [Art. 2134]
SPECIAL REQUISITES:
(1) It can cover only the fruits of an immovable
property
(2) Delivery of the immovable is necessary for the
creditor to receive the fruits, not to make the

contract binding
(3) Amount of principal and interest must be
specified in writing [Art. 2134]
(4) Express agreement that debtor will give
possession of the property to creditor and that
the latter will apply the fruits to the interest, if
any, then to the principal of his credit
NOTE: The obligation to pay interest is not the
essence of the contract of antichresis; there being
nothing in the Code to show that antichresis is only
applicable to securing the payment of interestbearing
loans. On the contrary, antichresis is
susceptible of guaranteeing all kinds of obligations,
pure or conditional
OBLIGATIONS OF ANTICHRETIC CREDITOR
(1) To pay taxes and charges on the estate, including
necessary expenses [Art. 2135].
Creditor may avoid said obligation by:
(a) compelling the debtor to reacquire enjoyment
of the property
(b) by stipulation to the contrary
(2) To apply all the fruits, after receiving them, to the
payment of interest, if owing, and thereafter to
the principal
(3) To render an account of the fruits to the debtor
(4) To bear the expenses necessary for its
preservation and repair
REMEDIES OF CREDITOR IN CASE OF NON-PAYMENT OF
DEBT

(1) Action for specific performance

(2) Petition for the sale of the real property as in a
foreclosure of mortgage under Rule 68 of the

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Rules of Court [Art. 2137]

(a) The parties, however, may agree on an
extrajudicial foreclosure in the same manner
as they are allowed in contracts of mortgage
and pledge [Tavera v. El Hogar Filipino, Inc. 68
Phil 712]
(b) A stipulation authorizing the antichretic
creditor to appropriate the property upon the
non-payment of the debt within the agreed
period is void [Art. 2088]

Chattel Mortgage

DEFINITION AND CHARACTERISTICS

Chattel Mortgage is a conditional sale of personal
property as security for the payment of a debt, or the
performance of some other obligation specified
therein, the condition being that the sale shall be
void upon the seller paying to the purchaser a sum of
money or doing some other act named. If the
condition is performed according to its terms, the
mortgage and sale immediately become void, and
the mortgagee is thereby divested of his title.

[Section 3, Act 1508]

CHARACTERISTICS

(1) It is an accessory contract because it secures

performance of a principal obligation
(2) It is a formal contract because it requires
registration in the Chattel Mortgage Register for
its validity (but only as against third persons)
(3) It is a unilateral contract because it produces only
obligations on the part of the creditor to free the
thing from the encumbrance on fulfillment of the
obligation.
(4) The excess of the proceeds of the sale goes to the
debtor/mortgagor
(5) Creditor/mortgagee can recover deficiency from
the debtor/mortgagor, except if covered by the
Recto Law
REGISTRATION
PERIOD WITHIN WHICH REGISTRATION SHOULD BE MADE

The law is substantially and sufficiently complied

with where the registration is made by the
mortgagee before the mortgagor has complied with
his principal obligation and no right of innocent third
persons is prejudiced.
EFFECT OF REGISTRATION

(1) Creates real rights

(2) Adds nothing to mortgage
REGISTRATION OF ASSIGNMENT OF MORTGAGE NOT
REQUIRED

(a) A chattel mortgage may be alienated or assigned

to a third person
(b) The debtor is protected if he pays his creditor
without actual knowledge that the debt has been
assigned
(c) Affidavit of good faith is required.
AFFIDAVIT OF GOOD FAITH is an oath in a
contract of chattel mortgage wherein the parties
severally swear that the mortgage is made for
the purpose of securing the obligation specified in
the conditions thereof and for no other purposes
and that the same is a just and valid obligation
and one not entered into for the purpose of
fraud.
Effect of Absence: Mortgage is vitiated only as against
third persons without notice.
VENUE OF REGISTRATION

(a) If he resides in the Philippines, in the office of the

register of deeds of the province in which the
mortgagor resides at the time of the making of
the chattel mortgage
(b) If he does not reside in the Philippines, in the
province in which the property is situated
(c) If the property is situated in a province different
from that in which the mortgagor resides, the
mortgage shall be recorded in both provinces.
[Sec. 4, Act 1508]
When a corporation is a party to a chattel mortgage,

the affidavit may be made and subscribed by a

director, trustee, cashier, treasurer, or manager
thereof, or by a person authorized to make or receive
such mortgage.
When a partnership is a party, the affidavit may be
made and subscribed by one member thereof.
VALIDITY OF CHATTEL MORTGAGE
Chattel mortgage shall not be valid against any
person except the mortgagor, his executors or
administrators unless:
(1) The possession of the property is delivered to and
retained by the mortgagee or
(2) The mortgage is recorded. (Sec. 4, Act 1508)
FORMAL REQUISITES
(a) It should substantially comply with the form
prescribed by law
(b) It should be signed by the person/s executing the
same in the presence of two witnesses who shall
sign the mortgage as witnesses to the execution
thereof and
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(c) Each mortgagor and mortgagee or, in the

absence of the mortgagee, his agent or attorney,
shall make and subscribe an affidavit in the form
prescribed by law, which affidavit, signed by the
parties to the mortgage and the two witnesses
and the certificate of the oath signed by the
person authorized to administer an oath shall be
appended to such mortgage and recorded
therewith. [Sec. 5, Act 1508]
DESCRIPTION OF PROPERTY

The mortgaged property should be described such

as to enable the parties to the mortgage, or any
other person, after reasonable inquiry and
investigation, to identify the same.
Large cattle as chattel mortgage
The description in the mortgage shall contain the
brands, class, sex, age, knots of radiated hair
commonly known as remolinos or cowlicks, and
other marks of ownership as described and set forth
in the certificate of ownership of said animal/s,
together with the number and place of issue of such
certificates of ownership.
Growing crops as chattel mortgage
The mortgage may contain an agreement stipulating
that the mortgagor binds himself properly to tend,
care for and protect the crop while growing, and
faithfully and without delay to harvest the same, and
that in default of the performance of such duties, the
mortgagee may enter upon the premises, take all the
necessary measures for the protection of said crop,
and retain possession thereof and sell the same, and
from the proceeds of such sale pay all expenses
incurred in caring for, harvesting, and selling the
crop and the amount of the indebtedness or

obligation secured by the mortgage, and the surplus,

if any, shall be paid to the mortgagor or those
entitled to the same.
PROPERTY COVERED BY CM

It is deemed to cover only the property described

therein and not like or substituted property
thereafter acquired by the mortgagor and placed in
the same depository as the property originally
mortgaged, anything in the mortgage to the contrary
notwithstanding. [Sec. 8, Act 1508]
Breaches
Failure of mortgagee to discharge the mortgage
If the mortgagee, assign, administrator, executor, or
either of them,
(1) after performance of the condition before or after
the breach thereof, or
(2) after tender of the performance of the condition,
at or after the time fixed for the performance,
does not within ten days after being requested
thereto by any person entitled to redeem, discharge
the mortgage in the manner provided by law, the
person entitled to redeem may recover of the person
whose duty it is to discharge the same, twenty pesos
for his neglect and all damages occasioned thereby
in an action in any court having jurisdiction of the
subject-matter thereof. [Sec. 8]
When the condition of the chattel mortgage is
broken, a mortgagor or person holding a subsequent
mortgage, or a subsequent attaching creditor may
redeem the same by paying or delivering to the
mortgagee the amount due on such mortgage and
the reasonable costs and expenses incurred by such
breach of condition before the sale thereof. An
attaching creditor who so redeems shall be
subrogated to the rights of the mortgagee and
entitled to foreclose the mortgage in the same
manner that the mortgagee could foreclose it
Foreclosure
The mortgagee, his executor, administrator or assign
may cause the mortgaged property or any part
thereof to be sold at a public auction by a public
officer:
(1) After 30 days from the time of condition broken
(2) At a public place in the municipality where the
mortgagor resides, or where the property is
situated
(3) Provided at least 10 day-notice of the time, place,
and purpose of such sale has been posted at 2 or
more public places in such municipality, and
(4) The mortgagee, his executor, administrator, or
assign shall notify the mortgagor or person
holding under him and the persons holding
subsequent mortgages of the time and place of
sale at least 10 days previous to the sale:
(a) either by notice in writing directed to him or

left at his abode, if within the municipality, or

(b) sent by mail if he does not reside in such
municipality
DISPOSITION OF PROCEEDS
The proceeds of the sale shall be applied to the
payment:
(1) first, to the costs and expenses of mortgage
(2) the residue shall be paid to persons holding
subsequent mortgages in their order
(3) the balance, after paying the mortgages, shall be
paid to the mortgagor or person holding under
him on demand

Quasi-Contracts

A quasi-contract is that juridical relation resulting

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from a lawful, voluntary and unilateral act, and

which has for its purpose the payment of indemnity
to the end that no one shall be unjustly enriched or
benefited at the expense of another [Art. 2142]

NEGOTIORUM GESTIO
(UNAUTHORIZED MANAGEMENT)
This takes place when a person voluntarily takes
charge of anothers abandoned business or property
without the owners authority [Art. 2144].
Reimbursement must be made to the gestor (i.e. one
who carried out the business) for necessary and
useful expenses, as a rule.
THE OBLIGATION DOES NOT ARISE:
(1) When the property or business is not neglected or
abandoned;
(2) If in fact the manager has been tacitly authorized
by the owner.
In the first case, the provisions of Articles 1317, 1403,
No. 1, and 1404 regarding unauthorized contracts
shall govern.
In the second case, the rules on agency in Title X of
this Book shall be applicable. [Art. 2144]
OBLIGATIONS OF A GESTOR

(1) Perform his duties with all the diligence of a good

father of a family
(2) Pay the damages which through his fault and
negligence may be suffered by the owner of the
property/business under his management [Art.
2145]
(3) Be liable for the acts of the persons to whom he
delegated all or some of his duties. This is
without prejudice to the direct obligation of the
delegate to the owner of the business. [Art. 2146]
(4) Be liable for any fortuitous event under the
following conditions:
(a) If he undertakes risky operations which the
owner was not accustomed to embark upon
(b) If he has preferred his own interest to that of
the owner

(c) If he fails to return the property or business

after demand of the owner
(d) If he assumed management in bad faith [Art.
2147]
(e) If he is manifestly unfit to carry on the
management
(f) If by his intervention he prevented a more
competent person from taking up the
management. [Art. 2148]
Note: The gestor shall not be liable for e and f
if the management was assumed to save the
property or business from imminent danger.
(5) Be personally liable for contracts which he
entered into with third persons, even though he
acted in the name of the owner, and there shall
be no right of action between the owner and third
persons.
The gestor shall not be personally liable for such
contracts, provided:
(a) The owner has expressly or tacitly ratified the
management, or
(b) When the contract refers to things pertaining
to the owner of the business. [Art. 2152]
Note: The responsibility of two or more gestors
shall be solidary, unless the management was
assumed to save the thing or business from
imminent danger.
OBLIGATIONS OF THE OWNER OF THE PROPERTY OR
BUSINESS

Although the management was not expressly

ratified, the owner who enjoys the advantages of the
same shall:
(a) Be liable for the obligations incurred in his
interest
(b) Reimburse the gestor for the necessary and
useful expenses and for the damages the latter
may have suffered in the performance of his
duties
The above obligations shall be incumbent upon the
owner if the management had for its purpose the
prevention of an imminent and manifest loss,
although no benefit may have been derived. [Art.
2150]
If the owner did not derive any benefit and there was
no imminent and manifest danger to the property or
business, the owner would still be liable for the
abovementioned obligations and expenses,
provided:
(a) The gestor has acted in good faith; AND
(b) The property or business is intact, ready to be
returned to the owner. [Art. 2151]
EFFECT OF RATIFICATION

The ratification of the management by the owner of

the business produces the effects of an express
agency, even if the business may not have been
successful. [Art. 2149]

EXTINGUISHMENT OF MANAGEMENT

(1) When the owner repudiates or puts an end

thereto
(2) When the gestor withdraws from the
management, subject to [Art. 2144]
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(3) By the death, civil interdiction, insanity or

insolvency of the owner or the gestor. [Art. 2153]
SOLUTIO INDEBITI (UNDUE PAYMENT)
This takes place when something is received when
there is no right to demand it, and it was unduly
delivered through mistake. The recipient has the
duty to return it [Art. 2154].
This situation covers payment by reason of a mistake
in the construction or application of a doubtful or
difficult question of law [Art. 2155]
WHEN DEBT NOT YET DUE

If the payer was in doubt whether the debt was due,

he may recover if he proves that it was not due. [Art.
2156]
RESPONSIBILITY OF TWO OR MORE PAYEES

When there has been payment of what is not due,

their responsibility is solidary.
WHEN MONEY OR THING DELIVERED IS OWNED BY THIRD
PERSON

The payee cannot demand that the payor prove his

ownership of the thing delivered.
Nevertheless, should he discover that the thing has
been stolen and who its true owner is, he must
advise the latter.
If the owner, in spite of such information, does not
claim it within the period of one month, the payee
shall be relieved of all responsibility by returning the
thing deposited to the payor.
If the payee has reasonable grounds to believe that
the thing has not been lawfully acquired by the
payor, the former may return the same. [Art. 2158]
LIABILITY OF PAYEE

If in bad faith, he shall be liable:

(1) For legal interest if a sum of money is involved, or
(2) For the fruits received or which should have been
received if the thing produces fruits
AND
(3) For any loss or impairment of the thing for any
cause, and
(4) For damages to the person who delivered the
thing, until it is recovered. [Art. 2159]
If in good faith, he shall be liable:
(1) For the impairment or loss of the thing certain
and determinable or its accessories and
accessions insofar as he has thereby been
benefited.
(2) For the return of the price or assign the action to
collect the sum if he has alienated the same. [Art.
2160]
EXEMPTION FROM THE OBLIGATION TO RESTORE THE

PAYMENT UNDULY MADE

A person who, believing in good faith that the

payment was being made of a legitimate and
subsisting claim,
(1) destroyed the document, or
(2) allowed the action to prescribe, or
(3) gave up the pledges, or
(4) cancelled the guaranties for his right shall be
exempt from the obligation to restore.
The person who paid unduly may proceed only
against the true debtor or the guarantors with regard
to whom the action is still effective. [Art. 2162]
PRESUMPTION OF PAYMENT BY MISTAKE, DEFENSE
The presumption arises if something which had
never been due or had already been paid was
delivered; but he from whom the return is claimed
may prove that the delivery was made out of
liberality or for any other just cause.
OTHER QUASI-CONTRACTS
(1) When, without the knowledge of the person
obliged to give support, it is given by a stranger,
the latter shall have a right to claim the same
from the former, unless it appears that he gave it
out of piety and without intention of being repaid.
[Art. 2164]
(2) When funeral expenses are borne by a third
person, without the knowledge of those relatives
who were obliged to give support to the
deceased, said relatives shall reimburse the third
person, should the latter claim reimbursement.
[Art. 2165]
(3) When the person obliged to support an orphan,
or an insane or other indigent person unjustly
refuses to give support to the latter, any third
person may furnish support to the needy
individual, with right of reimbursement from the
person obliged to give support. The provisions of
this article apply when the father or mother of a
child under eighteen years of age unjustly refuses
to support him. [Art. 2166]
(4) When through an accident or other cause a
person is injured or becomes seriously ill, and he
is treated or helped while he is not in a condition
to give consent to a contract, he shall be liable to
pay for the services of the physician or other
person aiding him, unless the service has been
rendered out of pure generosity. [Art. 2167]
(5) When during a fire, flood, storm, or other
calamity, property is saved from destruction by
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another person without the knowledge of the

owner, the latter is bound to pay the former just
compensation. [Art. 2168]
(6) When the government, upon the failure of any
person to comply with health or safety

regulations concerning property, undertakes to

do the necessary work, even over his objection, he
shall be liable to pay the expenses. [Art. 2169]
(7) When by accident or other fortuitous event,
movables separately pertaining to two or more
persons are commingled or confused, the rules
on co-ownership shall be applicable. [Art. 2170]
(8) The rights and obligations of the finder of lost
personal property shall be governed by Articles
719 and 720. [Art. 2171]
(9) The right of every possessor in good faith to
reimbursement for necessary and useful
expenses is governed by Article 546. [Art. 2172]
(10) When a third person, without the knowledge of
the debtor, pays the debt, the rights of the former
are governed by Articles 1236 and 1237. [Art. 2173]
(11) When in a small community a nationality of the
inhabitants of age decide upon a measure for
protection against lawlessness, fire, flood, storm
or other calamity, any one who objects to the plan
and refuses to contribute to the expenses but is
benefited by the project as executed shall be
liable to pay his share of said expenses. [Art. 2174]
(12) Any person who is constrained to pay the taxes
of another shall be entitled to reimbursement
from the latter. [Art. 2175]

Concurrence and Preference

of Credits

MEANING OF CONCURRENCE AND PREFERENCE

Concurrence of Credit implies possession by two or
more creditors of equal right or privileges over the
same property or all of the property of a debtor.
Preference of Credit is the right held by a creditor to
be preferred in the payment of his claim above
others out of the debtors assets.
PREFERRED CREDITS ON SPECIFIC MOVABLES
[ART. 2241]
With reference to specific movable property of the
debtor, the following claims or liens shall be
preferred:
(1) Duties, taxes and fees due thereon to the State or
any subdivision thereof;
(2) Claims arising from misappropriation, breach of
trust, or malfeasance by public officials
committed in the performance of their duties, on
the movables, money or securities obtained by
them;
(3) Claims for the unpaid price of movables sold, on
said movables, so long as they are in the
possession of the debtor, up to the value of the
same; and if the movable has been resold by the
debtor and the price is still unpaid, the lien may
be enforced on the price; this right is not lost by

the immobilization of the thing by destination,

provided it has not lost its form, substance and
identity; neither is the right lost by the sale of the
thing together with other property for a lump
sum, when the price thereof can be determined
proportionally;
(4) Credits guaranteed with a pledge so long as the
things pledged are in the hands of the creditor, or
those guaranteed by a chattel mortgage, upon
the things pledged or mortgaged, up to the value
thereof;
(5) Credits for the making, repair, safekeeping or
preservation of personal property, on the
movable thus made, repaired, kept or possessed;
(6) Claims for laborers' wages, on the goods
manufactured or the work done;
(7) For expenses of salvage, upon the goods
salvaged;
(8) Credits between the landlord and the tenant,
arising from the contract of tenancy on shares, on
the share of each in the fruits or harvest;
(9) Credits for transportation, upon the goods
carried, for the price of the contract and
incidental expenses, until their delivery and for
thirty days thereafter;
(10) Credits for lodging and supplies usually
furnished to travelers by hotel keepers, on the
movables belonging to the guest as long as such
movables are in the hotel, but not for money
loaned to the guests;
(11) Credits for seeds and expenses for cultivation and
harvest advanced to the debtor, upon the fruits
harvested;
(12) Credits for rent for one year, upon the personal
property of the lessee existing on the immovable
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leased and on the fruits of the same, but not on

money or instruments of credit;
(13) Claims in favor of the depositor if the depositary
has wrongfully sold the thing deposited, upon the
price of the sale.
In the foregoing cases, if the movables to which the
lien or preference attaches have been wrongfully
taken, the creditor may demand them from any
possessor, within thirty days from the unlawful
seizure.
PREFERRED CREDITS ON SPECIFIC
IMMOVABLES AND REAL RIGHTS [ART. 2242]
With reference to specific immovable property and
real rights of the debtor, the following claims,
mortgages and liens shall be preferred, and shall
constitute an encumbrance on the immovable or real
right:
(1) Taxes due upon the land or building;
(2) For the unpaid price of real property sold, upon

the immovable sold;

(3) Claims of laborers, masons, mechanics and other
workmen, as well as of architects, engineers and
contractors, engaged in the construction,
reconstruction or repair of buildings, canals or
other works, upon said buildings, canals or other
works;
(4) Claims of furnishers of materials used in the
construction, reconstruction, or repair of
buildings, canals or other works, upon said
buildings, canals or other works;
(5) Mortgage credits recorded in the Registry of
Property, upon the real estate mortgaged;
(6) Expenses for the preservation or improvement of
real property when the law authorizes
reimbursement, upon the immovable preserved
or improved;
(7) Credits annotated in the Registry of Property, in
virtue of a judicial order, by attachments or
executions, upon the property affected, and only
as to later credits;
(8) Claims of co-heirs for warranty in the partition of
an immovable among them, upon the real
property thus divided;
(9) Claims of donors or real property for pecuniary
charges or other conditions imposed upon the
donee, upon the immovable donated;
(10) Credits of insurers, upon the property insured,
for the insurance premium for two years.
PREFERRED CREDITS ON OTHER PROPERTY,
REAL AND PERSONAL [ART. 2244]
With reference to other property, real and personal,
of the debtor, the following claims or credits shall be
preferred in the order named:
i. Proper funeral expenses for the debtor, or
children under his or her parental authority who
have no property of their own, when approved by
the court;
ii. Credits for services rendered the insolvent by
employees, laborers, or household helpers for one
year preceding the commencement of the
proceedings in insolvency;
iii. Expenses during the last illness of the debtor or
of his or her spouse and children under his or her
parental authority, if they have no property of
their own;
iv. Compensation due the laborers or their
dependents under laws providing for indemnity
for damages in cases of labor accident, or illness
resulting from the nature of the employment;
v. Credits and advancements made to the debtor
for support of himself or herself, and family,
during the last year preceding the insolvency;
vi. Support during the insolvency proceedings, and
for three months thereafter;

vii. Fines and civil indemnification arising from a

criminal offense;
viii. Legal expenses, and expenses incurred in the
administration of the insolvent's estate for the
common interest of the creditors, when properly
authorized and approved by the court;
ix. Taxes and assessments due the national
government, other than those mentioned in
Articles 2241, No. 1, and 2242, No. 1;
x. Taxes and assessments due any province, other
than those referred to in Articles 2241, No. 1, and
2242, No. 1;

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PAGE 302

xi. Taxes and assessments due any city or

municipality, other than those indicated in Articles
2241, No. 1, and 2242, No. 1;
xii. Damages for death or personal injuries caused by
a quasi-delict;
xiii. Gifts due to public and private institutions of
charity or beneficence;
xiv. Credits which, without special privilege, appear in
(a) a public instrument; or (b) in a final judgment,
if they have been the subject of litigation. These
credits shall have preference among themselves
in the order of priority of the dates of the
instruments and of the judgments, respectively.
EXEMPT PROPERTY
(1) Present property:
(a) Family home. [Arts. 152, 153 and 155, CC]
(b) Right to receive support, as well as money or
property obtained by such support, shall not
be levied upon on attachment or execution.
[Art. 205, CC]
(c) Sec. 13, Rule 39, ROC.
(d) Sec 118, Public Land Act. [CA 141, as
amended]
(2) Future property:
A debtor who obtains a discharge from his debts
on account of insolvency, is not liable for the
unsatisfied claims of his creditors with said
property. [Sec. 68 and 69, Insolvency Law, Act
1956]
(3) Property in custodia legis and of public dominion.
CLASSIFICATION OF CREDITS
(1) Special preferred credits. [Art. 2241 and 2242, CC]
(a) Considered as mortgages or pledges of real or
personal property or liens within the purview
of legal provisions governing insolvency.
(b) Taxes due to the State shall first be satisfied.
(2) Ordinary preferred credits [Art. 2244] Preferred
in the order given by law.
(3) Common credits [Art. 2245] Credits of any other
kind or class, or by any other right or title not
comprised in Arts. 2241- 2244 shall enjoy no
preference.

ORDER OF PREFERENCE OF CREDITS

(1) Credits which enjoy preference with respect to
specific movables exclude all others to the extent
of the value of the personal property to which the
preference refers [Art. 2246].
(2) If there are 2 or more credits with respect to the
same specific movable property, they shall be
satisfied pro rata, after the payment of duties,
taxes and fees due the State or any subdivision
thereof [Art. 2247]
(3) Those credits which enjoy preference in relation
to specific real property or real rights exclude all
others to the extent of the value of the
immovable or real right to which the preference
refers [Art. 2248].
(4) If there are 2 or more credits with respect to the
same specific real property or real rights, they shall
be satisfied pro rata, after the payment of the
taxes and assessment of the taxes and
assessments upon the immovable property or
real right [Art. 2249].
(5) The excess, if any, after the payment of the
credits which enjoy preference with respect to
specific property, real or personal, shall be
added to the free property which the debtor may
have, for the payment of other credits [Art.
2250].
(6) Those credits which do not enjoy any preference
with respect to specific property, and those
which enjoy preference, as to the amount not
paid, shall be satisfied according to the
following rules:
(a) Order established by Art 2244
(b) Common credits referred to in Art 2245 shall
be paid pro rata regardless of dates [Art.
2251].
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Torrens System

THE TORRENS SYSTEM:

A system for registration of land under which, upon
landowners application, the court may, after
appropriate proceedings, direct the issuance of a
certificate of title. (Blacks Law Dictionary)
The underlying principle of the Torrens system is
security with facility in dealing with land. This is
made possible by defining the absolute status of a
given property in a certificate of title with a
governmental and universal guaranty. This
certificate of title should better be known as
certificate of title and encumbrances. In the words of
torrens himself the main objects are to simplify,
quicken, and cheapen the transfer of real estate and
to render title safe and indefeasible. (The Philippine

Torrens System by Florencio Ponce 1964)

PURPOSE:
The real purpose of that system is to quiet title to
land; to put a stop forever to any question of the
legality of the title, except claims which were noted
at the time of registration, in the certificate, or which
may arise subsequent thereto. (Legarda v Saleeby,
GR No. 8936)
Avoid possible conflicts of title in and to real property
ADVANTAGES:
(a) Secures title
(b) Protection against fraud
(c) Simplified dealings
(d) Restoration of the estates to its just value, whose
depreciation is cause by some blur, technical
defect
(e) Barred the recurrence of faults in the title (See
Legarda v. Saleeby)
BACKGROUND:
The boldest effort to grapple with the problem of
simplification of title to land was made by Mr.
(afterwards Sir Robert) Torrens, a layman, in South
Australia in 1857. . . . In the Torrens system title by
registration takes the place of "title by deeds" of the
system under the "general" law. A sale of land, for
example, is effected by a registered transfer, upon
which a certificate of title is issued. The certificate is
guaranteed by statute, and, with certain exceptions,
constitutes indefeasible title to the land mentioned
therein. Under the old system the same sale would
be effected by a conveyance, depending for its
validity, apart from intrinsic flaws, on the correctness
of a long series of prior deeds, wills, etc. . . . The
object of the Torrens system, them, is to do away
with the delay, uncertainty, and expense of the old
conveyancing system.
By "Torrens" system generally are meant those
systems of registration of transactions with interest
in land whose declared object is, under
governmental authority, to establish and certify to
the ownership of an absolute and indefeasible title to
realty, and to simplify its transfer. (Grey-Alba v. Dela
Cruz, GR No. L-524)
CERTIFICATE OF TITLE
ORIGINAL CERTIFICATE OF TITLE OR OCT

It is the first certificate of title issued in the name of a

registered owner by the Register of Deeds covering a
parcel of land which had been registered under the
Torrens System, by virtue of judicial or administrative
proceedings.
TRANSFER CERTIFICATE OF TITLE OR TCT

The subsequent certificate of title pursuant to any

deed of transfer or conveyance to another person.
The Register of Deeds shall make a new certificate of
title and given him an owners duplicate certificate.
The previous certificate (need not be an OCT) shall

be stamped cancelled.
PATENTS

PD 1529, Sec. 103. Certificates of title pursuant to

patents. Whenever public land is by the Government
alienated, granted or conveyed to any person, the
same shall be brought forthwith under the operation
of this Decree.
It shall be the duty of the official issuing the
instrument of alienation, grant, patent or conveyance
in behalf of the Government to cause such
instrument to be filed with the Register of Deeds of
the province or city where the land lies, and to be
there registered like other deeds and conveyance,
whereupon a certificate of title shall be entered as in
other cases of registered land, and an owner's
duplicate issued to the grantee.
The deed, grant, patent or instrument of conveyance
from the Government to the grantee shall not take
effect as a conveyance or bind the land but shall
operate only as a contract between the Government
and the grantee and as evidence of authority to the
Register of Deeds to make registration.
It is the act of registration that shall be the operative
act to affect and convey the land, and in all cases
under this Decree, registration shall be made in the
office of the Register of Deeds of the province or city
where the land lies. The fees for registration shall be
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paid by the grantee. After due registration and

issuance of the certificate of title, such land shall be
deemed to be registered land to all intents and
purposes under this Decree.
Note:
(a) Patents only involve public lands which are
alienated by the Government, pursuant to the
Public Land Act.
(b) The patent (even if denominated as deed of
conveyance) is not really a conveyance but a
contract between the grantee and the
Government and evidence of authority to the
Register of Deeds to make registration.
(c) The act of registration is the operative act to affect
and convey the land.
General Rule: A Torrens Certificate of Title is valid
and enforceable against the whole world.
A Torrens title, once registered, cannot be defeated,
even by adverse, open and notorious possession. A
registered title under the Torrens system cannot be
defeated by prescription. The title, once registered,
is notice to the whole world. All persons must take
notice. No one can plead ignorance of the
registration. (Egao vs. CA, 1989)

Regalian Doctrine

A western legal concept that was first introduced by

the Spaniards into the country through the laws of

the Indies and the Royal Cedulas. Whereby the
Philippines passed to Spain by virtue of discovery
and conquest. Consequently, all lands became the
exclusive patrimony and dominion of the Spanish
Crown. (Agcaoli)
Enshrined in the Constitution (Art 12, Sec 2 & 3), it
states that all lands of public domain belong to the
state, thus private title to land must be traced to
some grant, express or implied, from the state, i.e.
The Spanish Crown or its successors, the American
Colonial government and thereafter the Philippine
Republic
It does not negate native title to lands held in private
ownership since time immemorial (Cruz vs. Sec. of
Environment and Natural Resources)
It recognized ownership of land by Filipinos
independent of any grant from the Spanish crown on
the basis of possession since time immemorial (cf:
Carino v Insular Government), it is presumed to have
been held prior the Spanish conquest and never to
have been public land.
EFFECTS
All lands of public domain belong to the state, and
that the State is the source of any asserted right to
ownership in land and charged with the conservation
of such patrimony (Republic v IAC, GR No. 71285)
Any applicant for judicial confirmation of an
imperfect title has the burden of proving, by
incontrovertible evidence, that the (a) land applied
for is alienable and disposable public land; and, (b)
the applicant, by himself or through his
predecessors-in-interest had occupied and
possessed the land, in the concept of owner, openly,
continuously, exclusively, and adversely since June
12, 1945, or earlier. (Pelbel Manufacturing Corp. v. CA,
GR No. 141325)
CONCEPT OF NATIVE TITLE, TIME IMMEMORIAL
POSSESSION
A recognized exception to the theory of jura regalia,
the ruling in Carino v Insular Government
institutionalized the recognition of the existence of
native title to land, or ownership of land by Filipinos
by virtue of possession under a claim of ownership
since time immemorial and independent of any grant
from the Spanish Crown (Agcaoli)
Lands under native title are not part of public
domain, lands possessed by an occupant and his
predecessors since time immemorial, such
possession would justify the presumption that the
land had never been part of the public domain or
that it had been private property even before the
Spanish conquest (Republic v CA, GR No. 130174)

Citizenship Doctrine

INDIVIDUALS AND CORPORATIONS

CONSTITUTIONAL REQUIREMENTS AND LIMITATIONS

Only Filipino citizens (Art. XII, Sec. 3, 1987

Constitution)
KRIVENKO DOCTRINE

The capacity to acquire private land is made

dependent upon the capacity to acquire or hold
lands of public domain. Private land may be
transferred or conveyed only to individuals or entities
qualified to acquire lands of public domain (II
Bernas)
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The 1935 Constitution reserved the right xxx for

Filipino citizens or corporations at least sixty percent
of the capital of which was owned by Filipinos.
Aliens, whether individuals or corporations, have
been disqualified from acquiring public lands; hence
they have also been disqualified from acquiring
private lands. (Krivenko v ROD, GR No. L-630: Ong
Ching Po v CA, GR. No. 113427)
Non-Filipinos cannot acquire or hold title to private
lands of public domain, except only by way of legal
succession (Halili v CA, GR No. 113539); BASIS Sec 2,
5 Art XII Constitution
Exceptions:
(a) Aliens by way of hereditary succession
(b) Natural born citizens who have lost their
citizenship- limited to 5,000 sq. m. for urban
land and 3 hectares for rural land (RA No. 7042
as amended by RA No. 8179)
Aliens, although disqualified to acquire lands of
public domain, may lease private land for a
reasonable period provided, that such lease does not
amount to a virtual transfer of ownership. They may
also be given an option to buy property on the
condition that he is granted Philippine citizenship.
(Llantino v Co liong Chong, GR No. 29663)
Private corporations may not hold alienable lands of
the public domain except by lease for a period not
exceeding twenty-five years, renewable for not more
than twenty-five years, and not to exceed one
thousand hectares in area. (1987 Constitution, Art. XII,
Sec. 3)
Private lands may be owned for as long as the
corporation is at least 60% Filipino:
(a) Provided that at the time the corporation
acquired the land, it is under private ownership.
(b) Additional Requirements: (OCEN-PAAL)
(1) Those who by themselves or through their
predecessors-in-interest have been in Open,
continuous, exclusive and notorious
possession and occupation of alienable and
disposable lands of the public domain under a
bona fide claim of ownership since June 12,
1945, or earlier.

(2) Those who have acquired ownership of private

lands by Prescription under the provision of
existing laws.
(3) Those who have acquired ownership of private
lands or abandoned river beds by right of
Accession or accretion under the existing laws.
(4) Those who have acquired ownership of land in
any other manner provided for by Law.
Where the land is Owned in common, all the
co-owners shall file the application jointly.
Where the land has been sold under Pacto de
retro, the vendor a retro may file an
application for the original registration of the
land, provided, however, that should the
period for redemption expire during the
pendency of the registration proceedings and
ownership to the property consolidated in the
vendee a retro, the latter shall be substituted
for the applicant and may continue the
proceedings.
A trustee on behalf of his principal may apply
for original registration of any land held in
trust by him, unless prohibited by the
instrument creating the trust. (PD 1529, Sec.
14)
A corporation sole may acquire and register private
agricultural land (RC Apostolic Administrator of
Davao v LRC GR No. L-8415): A corporation sole,
which consists of one person only, is vested with the
right to purchase and hold real estate and register
the same in trust for the faithful or members of the
religious society or church for which the corporation
was organized
Lands acquired by an American citizen prior the
proclamation of Philippine Independence on July 4,
1946 but after the passage of the 1935 Constitution
may be registered, based on the ordinance
appended to the 1935 Constitution (See: Moss v
Director of Lands, GR No. L-27170)
Land sold to an alien which is now in the hands of a
naturalized citizen can no longer be annulled (De
Castro v Tan, GR No. L-31956). The litigated property
is now in the hands of a naturalized Filipino. It is no
longer owned by a disqualified vendee. The purpose
of the prohibition ceases to be applicable. (Barsobia v
Cuenco, GR No. L-33048)

Original Registration

WHO MAY APPLY

under pd 1529
The following persons may file an application for
registration of title to land:
(1) Those who by themselves or through their
predecessors-in-interest have been in open,
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continuous, exclusive and notorious possession

and occupation of alienable and disposable lands
of the public domain under a bona fide claim of
ownership since June 12, 1945, or earlier.
(2) Those who have acquired ownership of private
lands by prescription under the provision of
existing laws.
(3) Those who have acquired ownership of private
lands or abandoned river beds by right of
accession or accretion under the existing laws.
(4) Those who have acquired ownership of land in
any other manner provided for by law.
UNDER CA 141
Sec. 12. Any citizen of the Philippines over the age of
eighteen years, or the head of a family, who does not
own more than twenty-four hectares of land in the
Philippines or has not had the benefit of any
gratuitous allotment of more than twenty-four
hectares of land since the occupation of the
Philippines by the United States, may enter a
homestead of not exceeding twenty-four hectares of
agricultural land of the public domain.
UNDER RA 8371
Sec. 11. Recognition of Ancestral Domain Rights. The
rights of ICCs/IPs to their ancestral domains by
virtue of Native Title shall be recognized and
respected. Formal recognition, when solicited by
ICCs/IPs concerned, shall be embodied in a
Certificate of Ancestral Domain Title (CADT), which
shall recognize the title of the concerned ICCs/IPs
over the territories identified and delineated.
Sec. 12. Option to Secure Certificate of Title under
Commonwealth Act 141, as amended, or the Land
Registration Act 496. Individual members of cultural
communities, with respect to individually-owned
ancestral lands who, by themselves or through their
predecessors-in -interest, have been in continuous
possession and occupation of the same in the
concept of owner since time immemorial or for a
period of not less than thirty (30) years immediately
preceding the approval of this Act and uncontested
by the members of the same ICCs/IPs shall have the
option to secure title to their ancestral lands under
the provisions of Commonwealth Act 141, as
amended, or the Land Registration Act 496.
For this purpose, said individually-owned ancestral
lands, which are agricultural in character and
actually used for agricultural, residential, pasture,
and tree farming purposes, including those with a
slope of eighteen percent (18%) or more, are hereby
classified as alienable and disposable agricultural
lands.
The option granted under this Section shall be
exercised within twenty (20) years from the approval
of this Act.

Sec. 51. Delineation and Recognition of Ancestral

Domains. Self-delineation shall be the guiding
principle in the identification and delineation of
ancestral domains. As such, the ICCs/IPs concerned
shall have a decisive role in all the activities pertinent
thereto. The Sworn Statement of the Elders as to the
Scope of the territories and agreements/pacts made
with neighboring ICCs/IPs, if any, will be essential to
the determination of these traditional territories. The
Government shall take the necessary steps to
identify lands which the ICCs/IPs concerned
traditionally occupy and guarantee effective
protection of their rights of ownership and
possession thereto. Measures shall be taken in
appropriate cases to safeguard the rights of the
ICCs/IPs concerned to land which may no longer be
exclusively occupied by them, but to which they have
traditionally had access for their subsistence and
traditional activities, particularly of ICCs/IPs who are
still nomadic and/or shifting cultivators.
Sec. 52. Delineation Process.- The identification and
delineation of ancestral domains shall be done in
accordance with the following procedures:
(a) Ancestral Domains Delineated Prior to this Act The provisions hereunder shall not apply to
ancestral domains/lands already delineated
according to DENR Administrative Order No. 2,
series of 1993, nor to ancestral lands and
domains delineated under any other
community/ancestral domain program prior to
the enactment of his law. ICCs/IPs enactment of
this law shall have the right to apply for the
issuance of a Certificate of Ancestral Domain
Title (CADT) over the area without going
through the process outlined hereunder;
(b) Petition for Delineation - The process of
delineating a specific perimeter may be initiated
by the NCIP with the consent of the ICC/IP
concerned, or through a Petition for Delineation
filed with the NCIP, by a majority of the
members of the ICCs/IPs;
(c) Delineation Paper - The official delineation of
ancestral domain boundaries including census
of all community members therein, shall be
immediately undertaken by the Ancestral
Domains Office upon filing of the application by
the ICCs/IPs concerned. Delineation will be
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done in coordination with the community

concerned and shall at all times include genuine
involvement and participation by the members
of the communities concerned;
(d) Proof required - Proof of Ancestral Domain
Claims shall include the testimony of elders or
community under oath, and other documents

directly or indirectly attesting to the possession

or occupation of the area since time immemorial
by such ICCs/IPs in the concept of owners which
shall be any one (1) of the following authentic
documents:
(1) Written accounts of the ICCs/IPs customs
and traditions;
(2) Written accounts of the ICCs/IPs political
structure and institution;
(3) Pictures showing long term occupation such
as those of old improvements, burial
grounds, sacred places and old villages;
(4) Historical accounts, including pacts and
agreements concerning boundaries entered
into by the ICCs/IPs concerned with other
ICCs/IPs;
(5) Survey plans and sketch maps;
(6) Anthropological data;
(7) Genealogical surveys;
(8) Pictures and descriptive histories of
traditional communal forests and hunting
grounds;
(9) Pictures and descriptive histories of
traditional landmarks such as mountains,
rivers, creeks, ridges, hills, terraces and the
like; and
(10) Write-ups of names and places derived from
the native dialect of the community.
(e) Preparation of Maps - On the basis of such
investigation and the findings of fact based
thereon, the Ancestral Domains Office of the
NCIP shall prepare a perimeter map, complete
with technical descriptions, and a description of
the natural features and landmarks embraced
therein;
(f) Report of Investigation and Other Documents - A
complete copy of the preliminary census and a
report of investigation, shall be prepared by the
Ancestral Domains Office of the NCIP;
(g) Notice and Publication - A copy of each
document, including a translation in the native
language of the ICCs/IPs concerned shall be
posted in a prominent place therein for at least
fifteen (15) days. A copy of the document shall
also be posted at the local, provincial and
regional offices of the NCIP, and shall be
published in a newspaper of general circulation
once a week for two (2) consecutive weeks to
allow other claimants to file opposition thereto
within fifteen (15) days from the date of such
publication: Provided, That in areas where no
such newspaper exists, broadcasting in a radio
station will be a valid substitute: Provided,
further, That mere posting shall be deemed
sufficient if both newspaper and radio station

are not available;

(h) Endorsement to NCIP - Within fifteen (15) days
from publication, and of the inspection process,
the Ancestral Domains Office shall prepare a
report to the NCIP endorsing a favorable action
upon a claim that is deemed to have sufficient
proof. However, if the proof is deemed
insufficient, the Ancestral Domains Office shall
require the submission of additional evidence:
Provided, That the Ancestral Domains Office
shall reject any claim that is deemed patently
false or fraudulent after inspection and
verification: Provided, further, That in case of
rejection, the Ancestral Domains Office shall
give the applicant due notice, copy furnished all
concerned, containing the grounds for denial.
The denial shall be appealable to the NCIP:
Provided, furthermore, That in cases where there
are conflicting claims, the Ancestral Domains
Office shall cause the contending parties to
meet and assist them in coming up with a
preliminary resolution of the conflict, without
prejudice to its full adjudication according to the
selection below.
(i) Turnover of Areas Within Ancestral Domains
Managed by Other Government Agencies - The
Chairperson of the NCIP shall certify that the
area covered is an ancestral domain. The
secretaries of the Department of Agrarian
Reform, Department of Environment and
Natural Resources, Department of the Interior
and Local Government, and Department of
Justice, the Commissioner of the National
Development Corporation, and any other
government agency claiming jurisdiction over
the area shall be notified thereof. Such
notification shall terminate any legal basis for
the jurisdiction previously claimed;
(j) Issuance of CADT - ICCs/IPs whose ancestral
domains have been officially delineated and
determined by the NCIP shall be issued a CADT
in the name of the community concerned,
containing a list of all those identified in the
census; and
(k) Registration of CADTs - The NCIP shall register
issued certificates of ancestral domain titles and
certificates of ancestral lands titles before the
Register of Deeds in the place where the
property is situated.
Sec. 53. Identification, Delineation and Certification of
Ancestral Lands.
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(a) The allocation of lands within any ancestral

domain to individual or indigenous corporate
(family or clan) claimants shall be left to the

ICCs/IPs concerned to decide in accordance with

customs and traditions;
(b) Individual and indigenous corporate claimants of
ancestral lands which are not within ancestral
domains, may have their claims officially
established by filing applications for the
identification and delineation of their claims with
the Ancestral Domains Office. An individual or
recognized head of a family or clan may file such
application in his behalf or in behalf of his family
or clan, respectively;
(c) Proofs of such claims shall accompany the
application form which shall include the
testimony under oath of elders of the community
and other documents directly or indirectly
attesting to the possession or occupation of the
areas since time immemorial by the individual or
corporate claimants in the concept of owners
which shall be any of the authentic documents
enumerated under Sec. 52 (d) of this act,
including tax declarations and proofs of payment
of taxes;
(d) The Ancestral Domains Office may require from
each ancestral claimant the submission of such
other documents, Sworn Statements and the like,
which in its opinion, may shed light on the
veracity of the contents of the application/claim;
(e) Upon receipt of the applications for delineation
and recognition of ancestral land claims, the
Ancestral Domains Office shall cause the
publication of the application and a copy of each
document submitted including a translation in
the native language of the ICCs/IPs concerned in
a prominent place therein for at least fifteen (15)
days. A copy of the document shall also be
posted at the local, provincial, and regional
offices of the NCIP and shall be published in a
newspaper of general circulation once a week for
two (2) consecutive weeks to allow other
claimants to file opposition thereto within fifteen
(15) days from the date of such publication:
Provided, That in areas where no such newspaper
exists, broadcasting in a radio station will be a
valid substitute: Provided, further, That mere
posting shall be deemed sufficient if both
newspapers and radio station are not available.
(f) Fifteen (15) days after such publication, the
Ancestral Domains Office shall investigate and
inspect each application, and if found to be
meritorious, shall cause a parcellary survey of the
area being claimed. The Ancestral Domains office
shall reject any claim that is deemed patently
false or fraudulent after inspection and
verification. In case of rejection, the Ancestral
Domains office shall give the applicant due

notice, copy furnished all concerned, containing

the grounds for denial. The denial shall be
appealable to the NCIP. In case of conflicting
claims among individual or indigenous corporate
claimants, the Ancestral domains Office shall
cause the contending parties to meet and assist
them in coming up with a preliminary resolution
of the conflict, without prejudice to its full
adjudication according to Sec. 62 of this Act. In
all proceedings for the identification or
delineation of the ancestral domains as herein
provided, the Director of Lands shall represent
the interest of the Republic of the Philippines;
and
(g) The Ancestral Domains Office shall prepare and
submit a report on each and every application
surveyed and delineated to the NCIP, which shall,
in turn, evaluate or corporate (family or clan)
claimant over ancestral lands.
Sec. 54. Fraudulent Claims.- The Ancestral Domains
Office may, upon written request from the ICCs/IPs,
review existing claims which have been fraudulently
acquired by any person or community. Any claim
found to be fraudulently acquired by, and issued to,
any person or community may be cancelled by the
NCIP after due notice and hearing of all parties
concerned.
Sec. 55. Communal Rights.- Subject to Section 56
hereof, areas within the ancestral domains, whether
delineated or not, shall be presumed to be
communally held: Provide, That communal rights
under this Act shall not be construed as coownership
as provided in Republic Act. No. 386,
otherwise known as the New Civil Code.
REGISTRATION PROCESS AND REQUIREMENTS
(1) Survey
(2) Application
(3) Initial Hearing
(4) Publication
(5) Opposition
(6) Hearing
(7) Judgment
(8) Issuance of Decree
WHAT LANDS ARE REGISTRABLE:
(a) Private Lands
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(b) Agricultural Lands

If in the public domain, the land must be classified as
alienable and disposable. It must be classified as such
at the time of filing the application for registration.
(Republic vs. CA and Naguit, 2005)
SURVEY

The survey may be done by a public or private

surveyor. When done by a private surveyor it has to
be approved by the Land Management Bureau. PD

239 withdrew the authority of the Land Registration

Authority to approve original survey plans.
APPLICATION

The application for land registration shall be:

(a) in writing
(b) signed and sworn to by the applicant/duly
authorized person, and if more than one
applicant, it shall be signed and sworn to by and
in behalf of each
It shall contain:
(a) a description of the land
(b) citizenship and civil status of the applicant
(c) if married, the name of the wife or husband
(d) if the marriage has been legally dissolved, when and
how
(e) full names and addresses of all occupants and
those of the adjoining owners, if known
(f) if not known, it shall state the extent of the search
made to find them. (Sec. 15, PD 1529)
Note: It must be accompanied by the original tracing
cloth plan, white or blue copies thereof, the original
and copies of the technical description and geodetic
engineers certification.
Special Cases:
(a) If the land bounded by a road, the applicant must
state in his application if he claims any portion of
the land within the limits of the road, or if he likes
to have the boundaries determined. (Sec. 20, PD
1529)
(b) If the applicant is a non-resident, he shall appoint
an agent or representative who is a Philippine
resident. (Sec. 16, PD 1529)
(c) Intestate Estate of Don Mariano San Pedro vs. CA
(1996): A person claiming ownership of real
property must clearly identify the land claimed by
him.
(d) In re: Application for Land Registration vs. Republic
(2008, Nachura): An applicant in a land
registration case must prove the facts and
circumstances evidencing the alleged ownership
of the land applied for. General statements
which are mere conclusions of law and not
factual proof of possession are unavailing. The
deeds in its favor only proved possession of its
predecessors-in-interest as early as 1948. (The
law now stands that a mere showing of
possession for 30 years is not sufficient. OCEN
possession must be shown to have stated on June
12, 1945 or earlier.)
INITIAL HEARING

The court shall issue an order setting the date and

hour of the initial hearing within five days from filing
of the application. The initial hearing shall be 45-90
days from the date of the order. (Sec. 23, PD 1529)
PUBLICATION

The public shall be given notice of the initial hearing

of the application for land registration by means of

(1) publication; (2) mailing; and (3) posting. (PD 1529,
Sec. 23)
By publication
The Commissioner of Land Registration shall cause
it to be published: once in the Official Gazette
(sufficient to confer jurisdiction) and once in a
newspaper of general circulation in the Philippines
The notice is addressed to:
(a) all persons appearing to have an interest in the
land the adjoining owners so far as known "to all
whom it may concern"
By mailing
Within 7 days from publication in the OG, the
Commissioner of Land Registration (CLR) shall mail a
copy of the notice to:
(a) Every person named in the notice whose address
is known.
(b) the Secretary of Public Highways, to the
Provincial Governor, and to the Mayor of the
municipality or city, in which the land lies, if the
applicant requests to have the line of a public
way or road determined
(c) Secretary of Agrarian Reform, the Solicitor
General, the Director of Lands, the Director of
Mines and/or the Director of Fisheries and
Aquatic Resources, (as appropriate) if the land
borders on a river, navigable stream or shore, or
on an arm of the sea where a river or harbor line
has been established, or on a lake, or if it
otherwise appears from the application or the
proceedings that a tenant-farmer or the national
government may have a claim adverse to that of
the applicant
By posting
CLR shall cause the sheriff or his deputy to post the
notice at least 14 days before the hearing: in a
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conspicuous place on each parcel of land included in

the application and in a conspicuous place on the
bulletin board of the municipal building of the
municipality or city in which the land or portion
thereof is situated.
The court may also cause notice to be served to such
other persons and in such manner as it may deem
proper.
OPPOSITION

Who may file? Any person claiming an interest,

whether named in the notice or not
When to file? On or before the date of initial hearing,
or within such further time as may be allowed by the
court.
What shall it contain? It shall state all the objections
and the interest claimed by the party the remedy
desired.

How shall it be made? It shall be signed and sworn to

by him or by some other duly authorized person.
Note:
(a) If no one appears/files an answer, upon motion,
the court shall order a default to be recorded.
(b) By the description in the notice "To all Whom It
May Concern", all the world are made parties
defendant and shall be concluded by the default
order.
(c) Where an appearance has been entered and an
answer filed, a default order shall be entered
against persons who did not appear and answer.
(d) Director of Lands vs. Agustin, (1921): Absence of
opposition does not justify outright registration.
HEARING

Proof of ownership
Municipality of Santiago vs. CA (1983): Tax
declaration and receipts are not conclusive but have
strong probative value when accompanied by proof
of actual possession.
Republic vs. Tayag (1984): Payment in one lump sum
to cover all past taxes is irregular and affects the
validity of the applicants claim of ownership
Spanish titles are no longer admissible.
JUDGMENT

Judgment becomes final upon expiration of 30 days

from receipt of notice of judgment
Forms of Judgment
Writ of possession
Vencilao vs. Vano, (1990): The writ may be issued not
only against the person defeated in the registration
case but also against any one adversely occupying
the land during the proceedings.
Bernas vs. Nuevo, (1984): The writ does not lie against
a person who entered the land after the issuance of
the decree and who was not a party in the case. He
can only be proceeded against in a separate action
for ejectment or reinvindicatory action.
Writ of demolition
Gawaran vs. IAC, (1988): This writ is a complement of
the writ of possession.
ISSUANCE OF DECREE

Preparation of the Decree

(1) Court directs the Land Registration Authority to
issue a decree of registration and certificate of
Title within 15 days from entry of judgment.
(a) Appeal reckoned from the Solicitor Generals
receipt of the decision
(b) Becomes final 15 days from receipt
(2) Commissioner signs the decree
(3) Decree is entered and filed with the LRC
(4) OCT and owners duplicate certificate are sent to
the Register of Deeds where property is situated.
(5) Register of Deeds enters the information in his
registration book.
(6) Register of Deeds sends notice by mail to owner

that his duplicate is ready for delivery upon

payment of legal fees.
Gomez vs. CA (1988): Court retains jurisdiction over
the case until after the expiration of 1 year from the
issuance of the decree of registration.
REMEDIES
GROUND FOR REOPENING AND REVIEWING THE DECREE
OF REGISTRATION: actual fraud
PERIODS:

Must be reopened not later than 1 year from and

after the date of the entry of such decree.
Upon the expiration of said period of one year, the
decree of registration and the certificate of title
issued shall become incontrovertible. The only
remedy left is an action for damages.
PROHIBITIONS:
(a) Cannot be reopened because of absence,
minority, or other disability of any person
adversely affected thereby
(b) Cannot be reopened where an innocent
purchaser for value may be prejudiced (includes
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an innocent lessee, mortgagee, or other

encumbrancer for value.)
Arguelles vs. Timbancaya (1976): The rule on the
incontrovertible nature of a certificate of title applies
when what is involved is the validity of the OCT, not
when it concerns that of the TCT.
IMPRESCRIPTIBLE
PD 1529, Sec 47. Registered land not subject to
prescriptions. No title to registered land in derogation
of the title of the registered owner shall be acquired
by prescription or adverse possession.
Barcelona vs. Barcelona (1956): Prescription is
unavailing not only against the registered owner but
also against his hereditary successors because the
latter merely step into the shoes of the decedent by
operation of law and are merely the continuation of
the personality of their predecessor-in-interest.
NOT SUBJECT TO COLLATERAL ATTACK
PD 1529, Sec 48. Certificate not subject to collateral
attack. A certificate of title shall not be subject to
collateral attack. It cannot be altered, modified, or
canceled except in a direct proceeding in accordance
with law.
Spouses Padilla vs. Velasco, et. al, G.R. No. 169956
(2009, Nachura)
Facts: Velasco et al (respondents) are the heirs of
Artemio who died, leaving a parcel of land. He
acquired it by virtue of a deed of sale in his favor.
The Padilla sps (petitioners) entered the land as
trustees by virtue of a deed of sale executed by a
bank in favor of the Solomon sps. Velascos
demanded that the Padillas vacate the property.
Padillas cut trees, built a house and harvested crops.

Velascos filed a complaint for accion publiciana

before the RTC. Velascos presented deed of sale in
favor of Artemio, while Padillas presented deed of
sale between bank and Solomons.
The Padillas also argue that the Solomon sps
acquired the land in good faith and for value and
that they argue that Lot 2161 (the one they are
occupying) and Lot 76-pt (the lot the Solomon
spouses bought) are one and the same.
Held: The Velascos have a better right to the land.
The instant case is for accion publiciana, or for
recovery of the right to possess.
Accion publiciana is also used to refer to an
ejectment suit where the cause of dispossession is
not among the grounds for forcible entry and
unlawful detainer, or when possession has been lost
for more than one year and can no longer be
maintained under Rule 70 of the Rules of Court.
The objective of the plaintiffs in accion publiciana is
to recover possession only, not ownership. The
Velascos were able to establish lawful possession of
the land when the Padillas occupied the property.
The OCT was issued to the original owners who then
sold the land to Artemio.
From then on, he was in continuous possession of
the land until his death. It was only in 1987, when
the Padillas occupied the property. The argument
that the lots are one and the same is a collateral attack
on the title over the property which is registered in the
name of Artemio, which cannot be countenanced.
Remedies of the Aggrieved Party
Motion for New
Trial
15 days from notice of judgment
Grounds:
(a) Fraud, accident, mistake,
excusable negligence
(b) Newly discovered evidence
(c) Awarded excessive
damages, or insufficiency of
evidence, or that the
decision is against law
Appeal (d) 15 days from notice
(e) appealable to the CA or to
the SC in the same manner
as in ordinary actions
Relief from
Judgment
(f) 60 days after petitioner
learns of judgment, but not
more than 6 months after
judgment was entered
(g) Grounds: Fraud, accident,
mistake, excusable
negligence

Petition for
Review
Requisites: (Walstrom vs. Mapa,
1990)
(h) petitioner must have an
estate or interest in the land
(i) he must show actual fraud
(j) petition must be filed within
one year form the issuance
of the decree by LRA
(k) property has not yet passed
to an innocent purchaser for
value.
Grounds:
(l) extrinsic fraud,
(m) void decision for want of
due process
(n) lack of jurisdiction

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Calalang vs. Register of Deeds,

1992: Under the Torrens system
of registration, the Torrens still
becomes indefeasible and
incontrovertible one year from the
issuance of the final decree and is
generally conclusive evidence of
the ownership
Iglesia ni Cristo vs. CFI, 1983: This
applies as well to title acquired
through homestead or free
patents
Action for
Reconveyance
(o) before issuance of decree,
or within/after 1 year from
entry
(p) if based on implied trust, 10
years;
(q) if based on expressed trust
and void contract,
imprescriptible
(r) if based on fraud, 4 years
from the discovery
(s) not available if the property
has already been
transferred to an innocent
purchaser for value.
Esconde vs. Barlongay, 1987: It
does not reopen proceedings but
a mere transfer of the land from
registered owner to the rightful
owner
Huang vs. CA,1994: It is available
in case of fraud thereby creating a
constructive trust between parties

Damages
Ching vs. CA, 1990: It can be
availed of when reconveyance is
no longer possible as when the
land has been transferred to an
innocent purchaser for value
Action for
Compensation
from the
Assurance Fund1
Requisites:
A person sustains loss or damage
or is deprived by any estate or
interest in land
On account of bringing of land
under the Torrens system
Through (FEMOM) fraud, error,
mistake, omission, or
misdescription in the certificate of
entry in the registration book
Without negligence on his part
Upon registration, there shall be paid to the Register of Deeds
of 1% of the assessed value of the real estate on the basis of the
last assessment for taxation purposes, as contribution to the
Assurance Fund.
1

And is barred from bringing an

action for recovery of the land.
The action has not prescribed. It
must be instituted within 6 years
from the time the right to bring
such action first occurred--> date
of issue of the certificate of title
Against whom filed: against the
Register of Deeds and the
National Treasurer if FEMOM is
caused by court personnel,
Register of Deeds, his deputy or
other employees of the Registry
If other than those above
mentioned: the Register of
Deeds, the National Treasurer
and other person or persons, as
co-defendants.
Annulment of
Judgment
Grounds: extrinsic fraud and lack
of jurisdiction.
Galicia vs. Marquez (2007):
Ordinary remedies of appeal,
motion for new trial etc should no
longer be available. If based on
extrinsic fraud, file 4 within years
from discovery.
If based on lack of jurisdiction,
before it is barred by laches or
estoppel

Reversion Instituted by the government,

thru Solgen in all cases where
lands of public domain are held in
violation of the Constitution or
were fraudulently conveyed.
Indefeasibility of title,
prescription, laches, and estoppel
do not bar reversion suits.
Criminal Action Perjury, Forgery, Others involving
fraud
JUDICIAL CONFIRMATION OF IMPERFECT OR INCOMPLETE
TITLES

General Rule
No title or right to, or equity in, any lands of the
public domain may be acquired by prescription or by
adverse possession or occupancy except as expressly
provided by law. (CA 141, Sec 57) The Public Land
Act recognizes the concept of ownership under the
civil law. This ownership is based on adverse
possession and the right of acquisition is governed
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by the Chapter on judicial confirmation of imperfect

or incomplete titles.
This applies only to alienable and disposable
agricultural lands of the public domain. Under Sec. 6
of CA 141, the classification of public lands into
alienable and disposable forest lands, or mineral
lands is the prerogative of the Executive Department.
Bracewell vs. CA, (2000): The rule on confirmation of
imperfect title does not apply unless and until the
land classified as, say, forest land, is released in an
official proclamation to that effect so that if may
form part of the disposable agricultural lands of the
public domain.
Period of filing
RA No. 9176 extended the period to file an
application for judicial confirmation of imperfect or
incomplete title to December 31, 2020. It further
limited the area applied for to 12 hectares.
Requisites
(a) Filipino citizen
(b) He must have, by himself, or thru his
predecessors in - interest, possessed and
occupied an alienable and disposable
agricultural portion of the public domain
(c) Such possession and occupation must have
been OCEN and in the concept of owner since
June 12, 1945
(d) Application filed with proper court
Private corporations
Where at the time the corporation acquired the land,
its predecessor-in-interest had been in possession
and occupation thereof in the manner and for the
period prescribed by law as to entitle him to
registration in his name, then the proscription

against corporation acquiring alienable lands of the

public domain does not apply for the land was no
longer public land but private property. Since the
land is private, the corporation can institute
confirmation proceedings. (Director of Lands vs. IAC
and Acme Plywood and Veneer Co., 1986)
NOTE:
(a) MAXIMUM LAND THAT CAN BE APPLIED FOR:
144 hectares
(b) In case of foreigner, it sufficient that he is already
Filipino citizen at the time of his application.
(c) Corporation which has less than 60% Filipino
ownership cannot apply confirmation of imperfect
title; can only lease
(d) PERSONS COMPETENT TO QUESTION LAND
GRANT: Persons who obtained title from State or
thru persons who obtained title from State.
CADASTRAL REGISTRATION
Unlike other kinds of registration, this is compulsory
as it is initiated by the government.
PD 1529, Sec 35. Cadastral Survey preparatory to filing
of petition.
(a) When in the opinion of the President of the
Philippines public interest so requires that title to
any unregistered lands be settled and
adjudicated, he may to this end direct and order
the Director of Lands to cause to be made a
cadastral survey of the lands involved and the
plans and technical description thereof prepared
in due form.
(b) Thereupon, the Director of Lands shall give notice
to persons claiming any interest in the lands as
well as to the general public, of the day on which
such survey will begin, giving as fully and
accurately as possible the description of the lands
to be surveyed. Such notice shall be punished
once in the Official Gazette, and a copy of the
notice in English or the national language shall
be posted in a conspicuous place on the bulletin
board of the municipal building of the
municipality in which the lands or any portion
thereof is situated. A copy of the notice shall also
be sent to the mayor of such municipality as well
as to the barangay captain and likewise to the
Sangguniang Panlalawigan and the
Sangguniang Bayan concerned.
(c) The Geodetic Engineers or other employees of the
Bureau of Lands in charge of the survey shall give
notice reasonably in advance of the date on which
the survey of any portion of such lands is to begin,
which notice shall be posted in the bulletin board
of the municipal building of the municipality or
barrio in which the lands are situated, and shall
mark the boundaries of the lands by monuments
set up in proper places thereon. It shall be lawful

for such Geodetic Engineers and other employees

to enter upon the lands whenever necessary for
the purposes of such survey or the placing of
monuments.
(d) It shall be the duty of every person claiming an
interest in the lands to be surveyed, or in any
parcel thereof, to communicate with the Geodetic
Engineer upon his request therefor all
information possessed by such person concerning
the boundary lines of any lands to which he
claims title or in which he claims any interest.
(e) Any person who shall willfully obstruct the
making of any survey undertaken by the Bureau of
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Lands or by a licensed Geodetic Engineer duly

authorized to conduct the survey under this Section,
or shall maliciously interfere with the placing of any
monument or remove such monument, or shall
destroy or remove any notice of survey posted on the
land pursuant to law, shall be punished by a fine of
not more than one thousand pesos or by
imprisonment for not more than one year, or both.
PD 1529, Sec 36. Petition for registration. When the
lands have been surveyed or plotted, the Director of
Lands, represented by the Solicitor General, shall
institute original registration proceedings by filing
the necessary petition in the Court of First Instance
of the place where the land is situated against the
holders, claimants, possessors, or occupants of such
lands or any part thereof, stating in substance that
public interest requires that the title to such lands be
settled and adjudicated and praying that such titles
be so settled and adjudicated:
The petition shall contain a description of the lands
and shall be accompanied by a plan thereof, and
may contain such other data as may serve to furnish
full notice to the occupants of the lands and to all
persons who may claim any right or interest therein.
Where the land consists of two or more parcels held
or occupied by different persons, the plan shall
indicate the boundaries or limits of the various
parcels as accurately as possible. The parcels shall
be known as "lots" and shall on the plan filed in the
case be given separate numbers by the Director of
Lands, which numbers shall be known as "cadastral
lot numbers".
The lots situated within each municipality shall, as
far as practicable, be numbered consecutively
beginning with number "one", and only one series of
numbers shall be used for that purpose in each
municipality. However in cities or townsites, a
designation of the landholdings by blocks and lot
numbers may be employed instead of the
designation by cadastral lot numbers.
The cadastral number of a lot shall not be changed

after final decision has been entered decreasing the

registration thereof, except by order of court. Future
subdivisions of any lot shall be designated by a letter
or letters of the alphabet added to the cadastral
number of the lot to which the respective
subdivisions pertain. The letter with which a
subdivision is designated shall be known as its
"cadastral letter": Provided, however, that the
subdivisions of cities or townsites may be designated
by blocks and lot numbers.
STEPS IN CADASTRAL REGION PROCEEDINGS

(1) Determination of the President that public

interest requires title to unregistered lands be
settled
(2) Director of lands shall make a cadastral survey
(3) Director of Lands gives notice to interested
persons
(4) Publication of notice
(5) A copy of the notice shall also be sent to the
mayor and the sanggunian
(6) Geodetic engineers/ Bureau of Land employees
shall notify (re: survey) by posting at the
municipal building
(7) Interested persons should communicate with
the geodetic engineer if he requests for any
information about the land
(8) Actual survey/ plotting of the land
(9) Director of Lands represented by Solicitor
General shall institute original registration
proceedings
(10) Publication, mailing posting
(11) Hearing
(12) Decision
(13) Issuance of the decree and certificate of title
Note: In voluntary registration proceedings, there is
no res judicata when the applicant fails to prove his
title. In cadastral registration, if the applicant cannot
prove that he is entitled to the land, the land
becomes public land. There is res judicata.

Subsequent Registration
TWO TYPES OF DEALINGS
VOLUNTARY DEALINGS

Deeds, instruments, documents which are the results

of free and voluntary acts of parties thereto.
INVOLUNTARY DEALINGS

Writ, order, or process issued by the court of record

affecting registered land, also other instruments
which are not willful acts of the registered owner,
executed without his knowledge or consent.
NECESSITY AND EFFECTS OF REGISTRATION
PD 1529, Sec 51. Conveyance and other dealings by
registered owner. An owner of registered land may
convey, mortgage, lease, charge or otherwise deal
with the same in accordance with existing laws. He
may use such forms of deeds, mortgages, leases or

other voluntary instruments as are sufficient in law.

But no deed, mortgage, lease, or other voluntary
instrument, except a will purporting to convey or
affect registered land shall take effect as a
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conveyance or bind the land, but shall operate only

as a contract between the parties and as evidence of
authority to the Register of Deeds to make
registration.
The act of registration shall be the operative act to
convey or affect the land insofar as third persons are
concerned, and in all cases under this Decree, the
registration shall be made in the office of the
Register of Deeds for the province or city where the
land lies.
Note: The deed, mortgage, lease, or other voluntary
instrument, except a will shall ONLY operate as:
(1) A contract between the parties and
(2) Evidence of authority to the Register of Deeds to
make registration.
(a) The act of registration shall be the operative act to
convey or affect the land insofar as third persons
are concerned.
(b) A forged deed is an absolute nullity and conveys
no title.
(c) EXCEPTION: If there is good faith, a TCT has
already been issued to the purchaser, the latter
being an innocent purchaser for value according
to Sec. 39, PD 1529, then the title is good.
PD 1529, Sec 52. Constructive notice upon registration.
Every conveyance, mortgage, lease, lien, attachment,
order, judgment, instrument or entry affecting
registered land shall, if registered, filed or entered in
the office of the Register of Deeds for the province or
city where the land to which it relates lies, be
constructive notice to all persons from the time of
such registering, filing or entering.
Voluntary Dealings
Involuntary Dealings
Sale, mortgage, lease,
patent, powers of
attorney, trusts
Attachment, injunction,
mandamus, levy on
execution, notice of lis
pendens
Presentation of the
owners duplicate
certificate of title is
required to notify;
mere entry insufficient
Entry in the day book is
sufficient notice to all
persons
An innocent purchaser

for value of registered

land becomes the
registered owner the
moment he presents
and files a duly
notarized and valid
Lenin vs. Bass, (1952): Entry
thereof in the day book of
the ROD is sufficient notice
to all persons even if the
owners duplicate
certificate of title is not
presented to the ROD.
Voluntary Dealings
Involuntary Dealings
deed of sale and the
same is entered in the
day book and at the
same time he
surrenders or presents
the owners duplicate
certificate of title
covering the land sold
and pays the
registration fees.
Villasor vs. Camon,
(1951): It is necessary to
register the deed or
instrument in the entry
book and a
memorandum thereof
shall also be made in
the owners duplicate
certificate and its
original
Dir. Of Lands vs. Reyes,
(1976): Entry in the day
book is sufficient notice to
all persons of an adverse
claim without the same
being annotated at the
back of the certificate of
title
Spouses Labayen vs.
Leonardo Serafica,
(2008, Nachura): At
the time of the filing of
the petition for
cancellation of
encumbrance, the
lease contract already
lost its efficacy. Thus,
there is no basis to
save its annotation on
defendants title. The

fact that the

cancellation of the
lease contract was
forged is of no
moment, for there was
no violation of a right.
AFP Mutual Benefit
Association vs. Santiago,
(2008, Nachura): Entry of
the attachment in the
books is sufficient notice to
all persons. Hence, the
fact that the deed of sale
was already annotated is of
no moment with regard to
third persons. The
preference created by the
levy on attachment is not
diminished by the
subsequent registration of
the deed of sale.
General Rule:
(a) Campillo vs. PNB, 1969: A person dealing with
registered property need not go beyond, but only has
to rely on, the title.
(b) He is charged with notice only of such burdens and
claims which are annotated on the title, for
registration is the operative act that binds the
property.
WHEN SHOULD A PURCHASER INVESTIGATE?
(c) Banks are required to exercise more care and
prudence in dealing with registered lands for their
business is one affected with public interest. The
general rule does not apply.
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(d) Leung Yee vs. Strong Machinery, (1918): When party

concerned has actual knowledge of facts and
circumstances that would impel a reasonably
cautious man to make inquiry.
(e) Jamoc vs. CA, (1991): When purchaser is in bad faith;
e.g. he had full knowledge of a previous sale.
(f) Quiniano vs. CA, (1971): When a person buys land from
one whose rights over the land is evidenced only by a
deed of sale and an annotation in the certificate of
title but no TCT.
VOLUNTARY DEALINGS
REGISTRATION OF VOLUNTARY INSTRUMENTS IN GENERAL

PD 1529, Sec 54. Dealings less than ownership, how

registered. No new certificate shall be entered or
issued pursuant to any instrument which does not
divest the ownership or title from the owner or from
the transferee of the registered owners.
All interests in registered land less than ownership
shall be registered by filing with the Register of
Deeds the instrument which creates or transfers or

claims such interests and by a brief memorandum

thereof made by the Register of Deeds upon the
certificate of title, and signed by him.
A similar memorandum shall also be made on the
owner's duplicate. The cancellation or
extinguishment of such interests shall be registered
in the same manner.
PD 1529, Sec 55. Grantee's name, nationality, etc., to
be stated. Every deed or other voluntary instrument
presented for registration shall contain or have
endorsed upon it the full name, nationality,
residence and postal address of the grantee or other
person acquiring or claiming an interest under such
instrument, and every deed shall also state whether
the grantee is married or unmarried, and if married,
the name in full of the husband or wife.
If the grantee is a corporation or association, the
instrument must contain a recital to show that such
corporation or association is legally qualified to
acquire private lands. Any change in the residence or
postal address of such person shall be endorsed by
the Register of Deeds on the original copy of the
corresponding certificate of title, upon receiving a
sworn statement of such change. All names and
addresses shall also be entered on all certificates.
Notices and processed issued in relation to
registered land in pursuance of this Decree may be
served upon any person in interest by mailing the
same to the addresses given, and shall be binding,
whether such person resides within or without the
Philippines, but the court may, in its discretion,
require further or other notice to be given in any
case, if in its opinion the interest of justice so
requires.
PD 1529, Sec 56. Primary Entry Book; fees; certified
copies. Each Register of Deeds shall keep a primary
entry book in which, upon payment of the entry fee,
he shall enter, in the order of their reception, all
instruments including copies of writs and processes
filed with him relating to registered land.
He shall, as a preliminary process in registration,
note in such book the date, hour and minute of
reception of all instruments, in the order in which
they were received. They shall be regarded as
registered from the time so noted, and the
memorandum of each instrument, when made on
the certificate of title to which it refers, shall bear the
same date:
Provided, that the national government as well as
the provincial and city governments shall be exempt
from the payment of such fees in advance in order to
be entitled to entry and registration.
Every deed or other instrument, whether voluntary or
involuntary, so filed with the Register of Deeds shall
be numbered and indexed and endorsed with a

reference to the proper certificate of title. All records

and papers relative to registered land in the office of
the Register of Deeds shall be open to the public in
the same manner as court records, subject to such
reasonable regulations as the Register of Deeds,
under the direction of the Commissioner of Land
Registration, may prescribe.
All deeds and voluntary instruments shall be
presented with their respective copies and shall be
attested and sealed by the Register of Deeds,
endorsed with the file number, and copies may be
delivered to the person presenting them.
Certified copies of all instruments filed and
registered may also be obtained from the Register of
Deeds upon payment of the prescribed fees.
Process of registration
(1) File instrument creating or transferring interest
and certificate of title with Register of Deeds
together with:
(a) Owners duplicate
(b) Payment of fees & documentary stamp tax
(c) Evidence of full payment of real estate tax
(d) Document of transfer 1 copy additional for
city/provincial assessor
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(2) Register of Deeds shall make a memorandum on

the certificate of title, signed by him
(3) TCT shall then be issued
Note:
(a) If the grantee is a corporation or association, it
must show that it is qualified to acquire private
lands.
(b) PNB vs. Fernandez (1935): The issuance of a new
transfer certificate without presentation of an
owners duplicate is unwarranted and confers no
right on the purchaser
(c) RA 456 prohibits registration of documents
affecting real property which is delinquent in the
payment of real estate taxes. Further, if evidence
of such payment is not presented with 15 days
from the date of entry of said document in the
primary entry book of the register of deeds the
entry shall be deemed cancelled.
(d) Pay fees and DST (government is exempt)
(e) The instruments are regarded as registered from
the time ROD enters them in his book.
REGISTRATION OF DEEDS OF SALE AND TRANSFERS

If entire property is subject (PD 1529, Sec 57)

(a) Owner executes and registers the deed which
must be sufficient in form.
(b) A new certificate of title is issued and Register of
Deeds prepares and delivers to grantee his
owner's duplicate certificate
(c) Register of Deeds notes upon the OCT and the
duplicate certificate the date of transfer, the

volume and page of the registration book where

the new certificate is registered
(d) The original and the owner's duplicate of the
grantor's certificate shall be stamped "canceled".
(e) The deed of conveyance shall be filed and
indorsed with the number and the place of
registration of the certificate of title of the land
conveyed.
If only a portion of property is subject (PD 1529, Sec
58)
(a) Include a plan which shows all the portions
already subdivided with verified and approved
technical description.
(b) That plan with the certified copy of the technical
descriptions shall be filed with the Register of
Deeds for annotation in the TCT.
(c) Register of Deeds shall issue a TCT and cancel
the grantor's certificate partially OR it may be
canceled totally and a new one issued describing
therein the remaining portion
If there are subsisting encumbrances and annotations
They shall be carried over in the new certificate or
certificates; except when they have been
simultaneously discharged.
MORTGAGES AND LEASES

PD 1529, Sec 60. Mortgage or lease of registered land.

Mortgage and leases shall be registered in the
manner provided in Section 54 of this Decree.
The owner of registered land may mortgage or lease
it by executing the deed in a form sufficient in law.
Such deed of mortgage or lease and all instruments
which assign, extend, discharge or otherwise deal
with the mortgage or lease shall be registered, and
shall take effect upon the title only from time of
registration.
No mortgagee's or lessee's duplicate certificate of
title shall hereafter be issued by the Registers of
Deeds, and those issued prior to the effectivity of this
Decree are hereby deemed canceled and the holders
thereof shall immediately surrender the same to the
Register of Deeds concerned.
PD 1529, Sec 61. Registration. Upon presentation for
registration of the deed of mortgage or lease
together with the owner's duplicate, the Register of
Deeds shall enter upon the original of the certificate
of title and also upon the owner's duplicate
certificate a memorandum thereof, the date and
time of filing and the file number assigned to the
deed, and shall sign the said memorandum.
He shall also note on the deed the date and time of
filing and a reference to the volume and page of the
registration book in which it is registered.
Mortgage and leases shall be registered in the
manner provided for in Section 54.
When a deed of mortgage or lease is presented, ROD

will enter upon the OCT and upon the owners

duplicate a memorandum thereof and shall sign.
POWERS OF ATTORNEY; TRUSTS
PD 1529, Sec 64. Power of attorney. Any person may,
by power of attorney, convey or otherwise deal with
registered land and the same shall be registered
with the Register of Deeds of the province or city
where the land lies. Any instrument revoking such
power of attorney shall be registered in like manner.
PD 1529, Sec 65. Trusts in registered land. If a deed or
other instrument is filed in order to transfer
registered land in trust, or upon any equitable
condition or limitation expressed therein, or to create
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or declare a trust or other equitable interests in such

land without transfer, the particulars of the trust,
condition, limitation or other equitable interest shall
not be entered on the certificate; but only a
memorandum thereof shall be entered by the words
"in trust", or "upon condition", or other apt words,
and by a reference by number to the instrument
authorizing or creating the same.
A similar memorandum shall be made upon the
original instrument creating or declaring the trust or
other equitable interest with a reference by number
to the certificate of title to which it relates and to the
volume and page in the registration book in which it
is registered.
PD 1529, Sec 66. Trust with power of sale, etc., how
expressed. If the instrument creating or declaring a
trust or other equitable interest contains an express
power to sell, mortgage or deal with the land in any
manner, such power shall be stated in the certificate
of title by the words "with power to sell", or "power to
mortgage", or by apt words of description in case of
other powers.
No instrument which transfers, mortgages or in any
way deals with registered land in trust shall be
registered, unless the enabling power thereto is
expressly conferred in the trust instrument, or unless
a final judgment or order of a court of competent
jurisdiction has construed the instrument in favor of
the power, in which case a certified copy of such
judgment or order may be registered.
PD 1529, Sec 68. Implied, trusts, how established.
Whoever claims an interest in registered land by
reason of any implied or constructive trust shall file
for registration with the Register of Deeds a sworn
statement thereof containing a description of the
land, the name of the registered owner and a
reference to the number of the certificate of title.
Such claim shall not affect the title of a purchaser for
value and in good faith before its registration.
(a) Powers of attorney and revocations shall be
registered with the Register of Deeds of the

province or city where the land lies.

(b) To transfer registered land in trust without
transfer, the particulars of the trust shall not be
entered on the certificate. Only a memorandum
shall be entered by the words "in trust", or "upon
condition".
(c) Power must be expressly conferred in the trust
instrument.
(d) If implied or constructive trust, person claiming
such must execute a sworn statement. But such
claim doesnt affect the title of a purchaser for
value and in good faith before its registration.
INVOLUNTARY DEALINGS
ATTACHMENT

A writ issued at the institution or during progress of

an action commanding the sheriff to attach the
property, rights, credits or effects of the defendant to
satisfy demands of the plaintiff
Kinds
(a) Preliminary
(b) Garnishment
(c) Levy on execution
Registration of attachment/other liens
(a) Copy of writ in order to preserve any lien, right or
attachment upon registered land shall be filed
with the Register of Deeds where the land lies,
containing number of certificate of title of land to
be affected or description of land (PD 1529, Sec
69)
(b) Register of Deeds to index attachment in names
of both plaintiff & defendant or name of person
whom property is held or in whose name stands
in the records
(c) If duplicate of certificate of title is not presented:
(1) Register of Deeds shall within 36 hours send
notice to registered owner by mail stating that
there has been registration & requesting him
to produce duplicate so that memorandum be
made
(2) If owner neglects or refuses Register of
Deeds shall report matter to court.
(3) Court after notice shall enter an order to
owner to surrender certificate at time & place
to be named therein.
(d) Although notice of attachment is not noted in
duplicate, notation in book of entry of Register of
Deeds produces effect of registration already
Effect of registration of attachment
(a) Creates real right
(b) Has priority over execution sale
(c) But between 2 attachments one that is earlier
in registration is preferred
Duty of Register of Deeds
Ministerial but may refuse registration in the
following circumstances:

(1) Title to land is not in the name of defendant

(2) No evidence is submitted to show that he has
present or possible future interest in land
Exception: If petitioner is an heir

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EXECUTION AND TAX DELINQUENCY SALES

Execution sale
(a) To enforce a lien of any description on registered
land, any execution or affidavit to enforce such
lien shall be filed with Register of Deeds where
the land lies
(b) Register in the registration book & memorandum
upon proper certificate of title as adverse claim or
as an encumbrance
(c) To determine preferential rights between 2 liens:
priority of registration of attachment
Tax sale
(a) Sale of land for collection of delinquent taxes and
penalties due the Government
(b) In personam (all persons interested shall be
notified so that they are given opportunity to be
heard)
(c) Notice to be given to delinquent tax payer at last
known address
(d) Publication of notice must also be made in
English, Spanish & local dialect & posted in a
public & conspicuous place in place wherein
property is situated & at the main entrance of the
provincial building
(e) Sale cannot affect rights of other lien holders
unless they are given the right to defend their
rights: due process must be strictly observed
(f) Tax lien superior to attachment
(g) No need to register tax lien because it is
automatically registered once the tax accrues
(h) But sale of registered land to foreclose a tax lien
need to be registered.
PD 1529, Sec 74. Enforcement of liens on registered
land. Whenever registered land is solved on
execution, or taken or sold for taxes or for any
assessment or to enforce a lien of any character, or
for any costs and charges incident to such liens, any
execution or copy of execution, any officer's return, or
any deed, demand, certificate, or affidavit, or other
instrument made in the course of the proceedings to
enforce such liens and required by law to be
recorded, shall be filed with the Register of Deeds of
the province or city where the land lies and
registered in the registration book, and a
memorandum made upon the proper certificate of
title in each case as lien or encumbrance.
Procedure of registration of tax sale
(a) Officers return shall be submitted to Register of
Deeds together with duplicate title
(b) Register in the registration book

(c) Memorandum shall be entered in the certificate

as an adverse claim or encumbrance
(d) After the period of redemption has expired & no
redemption (2 years from registration of auction
sale) is made: cancellation of title & issuance of a
new one
(e) Before cancellation, notice shall be sent to
registered owner: to surrender title & show cause
why it shall not be cancelled
NOTE: Actual knowledge is equivalent to registration.
NOTICE OF LIS PENDENS

PD 1529, Sec. 76. Notice of lis pendens. No action to

recover possession of real estate, or to quiet title
thereto, or to remove clouds upon the title thereof, or
for partition, or other proceedings of any kind in court
directly affecting the title to land or the use or
occupation thereof or the buildings thereon, and no
judgment, and no proceeding to vacate or reverse
any judgment, shall have any effect upon registered
land as against persons other than the parties
thereto, unless a memorandum or notice stating the
institution of such action or proceeding and the court
wherein the same is pending, as well as the date of
the institution thereof, together with a reference to
the number of the certificate of title, and an
adequate description of the land affected and the
registered owner thereof, shall have been filed and
registered.
Purpose
To keep the subject matter within the power of the
court until the entry of final judgment. It therefore
creates merely a contingency & not a lien.
Effect of registration
(a) Impossibility of alienating the property in dispute
during the pendency of the suit may be
alienated but purchaser is subject to final
outcome of pending suit
(b) Register of Deeds is duty bound to carry over
notice of lis pendens on all new titles to be issued
Cancellation of lis pendens (PD 1529, Sec. 77)
(a) Before final judgment court may order
cancellation after showing that notice is only for
the purpose of molesting an adverse party or it is
not necessary to protect the rights of the party
who caused it to be registered
(b) Register of Deeds may also cancel upon verified
petition of the party who caused such registration
(c) Deemed cancelled when certificate of clerk of
court stating manner of disposal of proceeding is
registered
Other parties who need to register
Assignee in involuntary proceeding for insolvency
(a) Duty of the officer serving notice to file a copy of
the notice to the Register of Deeds where the
property of debtor lies
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(b) Assignee elected or appointed by court shall be

entitled to entry of new certificate of registered
land upon presentment of copy of assignment
with bankrupts certificate of title (duplicate)
(c) New certificate shall note that it is entered to him
as assignee or trustee in insolvency proceedings
Government in eminent domain
(a) Copy of judgment shall be filed in the Register of
Deeds which states description of property,
certificate number, interest expropriated, nature
of public use
(b) Memorandum shall be made or new certificate of
title shall be issued
ADVERSE CLAIM

Sec. 70. Adverse claim. Whoever claims any part or

interest in registered land adverse to the registered
owner, arising subsequent to the date of the original
registration, may, if no other provision is made in this
Decree for registering the same, make a statement in
writing setting forth fully his alleged right or interest,
and how or under whom acquired, a reference to the
number of the certificate of title of the registered
owner, the name of the registered owner, and a
description of the land in which the right or interest
is claimed.
The statement shall be signed and sworn to, and
shall state the adverse claimant's residence, and a
place at which all notices may be served upon him.
This statement shall be entitled to registration as an
adverse claim on the certificate of title. The adverse
claim shall be effective for a period of thirty days
from the date of registration. After the lapse of said
period, the annotation of adverse claim may be
canceled upon filing of a verified petition therefor by
the party in interest: Provided, however, that after
cancellation, no second adverse claim based on the
same ground shall be registered by the same
claimant.
Before the lapse of thirty days aforesaid, any party in
interest may file a petition in the Court of First
Instance where the land is situated for the
cancellation of the adverse claim, and the court shall
grant a speedy hearing upon the question of the
validity of such adverse claim, and shall render
judgment as may be just and equitable. If the
adverse claim is adjudged to be invalid, the
registration thereof shall be ordered canceled.
If, in any case, the court, after notice and hearing,
shall find that the adverse claim thus registered was
frivolous, it may fine the claimant in an amount not
less than one thousand pesos nor more than five
thousand pesos, in its discretion. Before the lapse of
thirty days, the claimant may withdraw his adverse
claim by filing with the Register of Deeds a sworn
petition to that effect.

When is a claim adverse?

When a person claims any part or interest in
registered land adverse to the registered owner, after
date of the original registration
Duration of an adverse claim
30 days from the date of registration. After that the
annotation of adverse claim may be cancelled upon
filing of a verified petition by the party in interest.
When cancelled, no second adverse claim based on
the same ground may be registered by the same
claimant.
Requisites
The adverse claimant must give a statement, signed
and sworn before a notary public, of the following in
writing:
(a) his alleged right or interest
(b) how and under whom such alleged right or
interest is acquired
(c) the description of the land in which the right or
interest is claimed and
(d) the number of the certificate of title
(e) his residence or the place to which all notices may
be served upon him.
NOTE: Non-compliance with the above requisites
renders the adverse claim non-registrable and
ineffective.

Non-registrable Properties

NON-REGISTRABLE LANDS
1987 Constitution, Art. XII, Sec. 2
All lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential
energy, fisheries, forests or timber, wildlife, flora and fauna,
and other natural resources are owned by the State. xxx
Civil Code, Art. 420
The following things are property of public dominion:
(1) Those intended for public use, such as roads,
canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores,
roadsteads, and others of similar character;
(2) Those which belong to the State, without being
for public use, and are intended for some public
service or for the development of the national
wealth.
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The following lands cannot be registered:

(a) Forest or timberlands
(b) Lands for public use: roads, ports and bridges,
etc.
(c) Lands which are owned by the State for public
service or development of national wealth

Dealings with
Unregistered Lands

PD 1529, Sec 113. Recording of instruments relating to

unregistered lands. No deed, conveyance, mortgage,
lease, or other voluntary instrument affecting land
not registered under the Torrens system shall be
valid, except as between the parties thereto, unless
such instrument shall have been recorded in the
manner herein prescribed in the office of the Register
of Deeds for the province or city where the land lies.
(a) The Register of Deeds for each province or city
shall keep a Primary Entry Book and a
Registration Book. The Primary Entry Book shall
contain, among other particulars, the entry
number, the names of the parties, the nature of
the document, the date, hour and minute it was
presented and received. The recording of the
deed and other instruments relating to
unregistered lands shall be effected by any of
annotation on the space provided therefor in the
Registration Book, after the same shall have been
entered in the Primary Entry Book.
(b) If, on the face of the instrument, it appears that it
is sufficient in law, the Register of Deeds shall
forthwith record the instrument in the manner
provided herein. In case the Register of Deeds
refuses its administration to record, said official
shall advise the party in interest in writing of the
ground or grounds for his refusal, and the latter
may appeal the matter to the Commissioner of
Land Registration in accordance with the
provisions of Section 117 of this Decree. It shall be
understood that any recording made under this
section shall be without prejudice to a third party
with a better right.
(c) After recording on the Record Book, the Register
of Deeds shall endorse among other things, upon
the original of the recorded instruments, the file
number and the date as well as the hour and
minute when the document was received for
recording as shown in the Primary Entry Book,
returning to the registrant or person in interest
the duplicate of the instrument, with appropriate
annotation, certifying that he has recorded the
instrument after reserving one copy thereof to be
furnished the provincial or city assessor as
required by existing law.
(d) Tax sale, attachment and levy, notice of lis
pendens, adverse claim and other instruments in
the nature of involuntary dealings with respect to
unregistered lands, if made in the form sufficient
in law, shall likewise be admissible to record
under this section.
(e) For the services to be rendered by the Register of
Deeds under this section, he shall collect the
same amount of fees prescribed for similar
services for the registration of deeds or

instruments concerning registered lands.

Key points
(1) The system of registration for unregistered land is
under the Torrens system.
(2) Before: covers voluntary dealings, now includes
involuntary dealings
(3) Effect if prospective; binds 3rd persons after
registration but yields to better rights of 3rd
person prior to registration (limited effect to 3rd
parties) reason: no strict investigation involved
(4) Subsequent dealings also valid if recorded
(5) Register of deeds keeps day book & a register;
index system is also kept
Procedure
(1) Presentment of instrument dealing in
unregistered land
(2) If found in order registered
(3) If found defective registration is refused writing
his reason for refusal
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Principles of Torts

ABUSE OF RIGHT
Art. 19. Every person must, in the exercise of his
rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty
and good faith.
Generally, the exercise of any right must be in
accordance with the purpose for which it was
established. It must not be excessive or unduly
harsh; there must be no intention to injure another.
There is abuse of right when:
(a) The right is exercised for the only purpose of
prejudicing or injuring another
(b) The objective of the act is illegitimate
(c) There is an absence of good faith
ELEMENTS:
(1) There is a legal right or duty;
(2) Which is exercised in bad faith;
(3) For the sole intent of prejudicing or injuring
another.
Velayo vs. Shell (1959): The standards in NCC 19 are
implemented by NCC 21.
Globe vs. CA (1989): When a right is exercised in a
manner which does not conform with the norms in
NCC 19, and results in damage to another, a legal
wrong is thereby committed.
University of the East vs. Jader (2000): The conscious
indifference of a person to the rights or welfare of the
others who may be affected by his act or omission
can support a claim for damages.
Nikko Hotel Manila Garden vs. Reyes (2005): Article
19, known to contain what is commonly referred to as
the principle of abuse of rights, is not a panacea for

all human hurts and social grievances. The object of

this article is to set certain standards which must be
observed not only in the exercise of ones rights but
also in the performance of ones duties.
ACTS CONTRARY TO LAW
Art. 20. Every person who, contrary to law, willfully or
negligently causes damage to another, shall
indemnify the latter for the same.
The provision is intended to provide a remedy in
cases where the law declares an act illegal but fails
to provide for a relief to the party injured. (Jarencio)
NCC 20 does not distinguish, and the act may be
done wilfully or negligently.
REQUISITES

(1) The act must be wilful or negligent;

(2) It must be contrary to law;
(3) Damages must be suffered by the injured party.
ACTS CONTRARY TO MORALS
Art. 21. Any person who wilfully causes loss or injury
to another in a manner that is contrary to morals,
good customs or public policy shall compensate the
latter for the damage.
This article is designed to fill in the countless gaps
in the statutes which would otherwise leave victims
of moral wrongs helpless.
ELEMENTS:
(1) Legal action;
(2) Contrary to morals, public policy, good customs;
(3) Intent to injure.
EXAMPLES:
BREACH OF PROMISE TO MARRY, SEDUCTION AND SEXUAL
ASSAULT

Wassmer vs. Velez (1964): Mere breach of promise to

marry is not an actionable wrong. But to formally set
a wedding and go through all the above-described
preparation and publicity, only to walk out of it when
the matrimony is about to be solemnized, is quite
different. This is palpably and unjustifiably contrary
to good customs xxx.
Baksh vs. CA (1993): Where a man's promise to marry
is in fact the proximate cause of the acceptance of
his love by a woman and his representation to fulfill
that promise thereafter becomes the proximate
cause of the giving of herself unto him in a sexual
congress, proof that he had, in reality, no intention of
marrying her and that the promise was only a subtle
scheme or deceptive device to entice or inveigle her
to accept him and to obtain her consent to the
sexual act, could justify the award of damages
pursuant to Article 21 not because of such promise to
marry but because of the fraud and deceit behind it
and the willful injury to her honor and reputation. It
is essential, however, that such injury should have
been committed in a manner contrary to morals,
good customs or public policy.
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Tanjanco v. CA (1966): However, when for one whole

year, the plaintiff, a woman of legal age, maintained
sexual relations with the defendant, with repeated
acts of intercourse, there is here voluntariness. No
case under Article 21 is made.
MALICIOUS PROSECUTION

Malicious prosecution is the institution of any action

or proceeding, either civil or criminal, maliciously and
without probable cause.
ELEMENTS:
(1) The fact of the prosecution and that the
defendant was himself the prosecutor, and that
the action was finally terminated with an
acquittal
(2) The prosecutor acted without probable cause
(3) The prosecutor was impelled by legal malice.
Que vs. IAC (1989): To constitute malicious
prosecution, there must be proof that the
prosecution was prompted by a sinister design to vex
and humiliate a person and that it was initiated
deliberately by the defendant knowing that his
charges were false and groundless. Concededly, the
mere act of submitting a case to the authorities for
prosecution does not make one liable for malicious
prosecution.
PUBLIC HUMILIATION

Grand Union vs. Espino: It is against morals, good

customs and public policy to humiliate, embarrass
and degrade the dignity of a person. Everyone must
respect the dignity, personality, privacy and peace of
mind of his neighbors and other persons (Article 26,
Civil Code).
UNJUSTIFIED DISMISSAL

The right of an employer to dismiss an employee is

not to be confused with the manner in which this
right is to be exercised.
When the manner in which the company exercised its
right to dismiss was abusive, oppressive and
malicious, it is liable for damages.
UNJUST ENRICHMENT
Art. 22. Every person who through an act of
performance by another, or any other means,
acquires or comes into possession of something at
the expense of the latter without just or legal
ground, shall return the same to him.
Art. 23. Even when an act or event causing damage
to anothers property was not due to the fault or
negligence of the defendant, the latter shall be liable
for indemnity if through the act or event he was
benefited.
Art. 2142. Certain lawful, voluntary and unilateral
acts give rise to the juridical relation of quasicontract
to the end that no one shall be unjustly
enriched or benefited at the expense of another.
Art. 2143. The provisions for quasi contracts in this

Chapter do not exclude other quasi-contracts which

may come within the purview of the preceding
article.
One person should not be permitted to unjustly
enrich himself at the expense of another, but should
be required to make restitution of, or for property or
benefits received, retained, or appropriated where it
is just and equitable that such restitution be made,
and where much action involves no violation or
frustration of law or opposition to public policy,
either directly or indirectly.
While neither Art. 22 nor Art. 23 expressly provides
for the effects of unjust enrichment, the Chapter on
Quasi-Contracts (Articles 2159-2163), which
complements or supplements and should be so
considered in appropriate cases, does.
Enrichment at the expense of another is not per se
forbidden. It is such enrichment without just or legal
cause that is contemplated here.
Just and legal cause is always presumed, and the
plaintiff has the burden of proving its absence.
The restitution must cover the loss suffered by the
plaintiff but it can never exceed the amount of unjust
enrichment of the defendant if it is less than the loss
of the plaintiff.
Requisites:
(1) That the defendant has been enriched;
(2) That the plaintiff has suffered a loss;
(3) That the enrichment of the defendant is without
just or legal ground; and
(4) That the plaintiff has no other action based on
contract, crime or quasi-delict
LIABILITY WITHOUT FAULT

Art. 23. Even when an act or event causing damage

to anothers party was not due to the fault or
negligence of the defendant, the latter shall be liable
for indemnity if through the act or event he was
benefited.
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BASIS OF LIABILITY

Equity. An involuntary act, because of its character,

cannot generally create an obligation; but when by
such act its author has been enriched, it is only just
that he should indemnify for the damages caused to
the extent of this enrichment.
SCOPE OF LIABILITY

The indemnity does not include unrealized profits of

the injured party, because the defendants
enrichment is the limit of his liability.

Classification of Torts

ACCORDING TO MANNER OF COMMISSION

(1) Negligent Tort consists in the failure to act
according to the standard of diligence required
under the attendant circumstances. It is a
voluntary act or omission which results in injury to

others, without intending to cause the same.

(2) Intentional Tort perpetrated by one who intends
to do that which the law has declared to be
wrong. It is conduct where the actor desires to
cause the consequences of the act, or that he
believes that the consequences are substantially
certain to result therefrom.
Note: Article 2176 where it refers to fault or
negligence covers not only acts not punishable by
law but also acts criminal in character, whether
intentional and voluntary or negligent. (Elcano vs Hill
(1977))
(3) Strict Liability one is liable independent of fault
or negligence. It only requires proof of a certain
set of facts. Liability here is based on the breach
of an absolute duty to make something safe. It
most often applies to ultra-hazardous activities or
in product liability cases. It is also known as
absolute liability or liability without fault.
Strict liability is imposed by articles 1314, 1711, 1712,
1723, 2183, 2187, 2189, 2190, 2191, 2192, 2193.
ACCORDING TO SCOPE
GENERAL

Tort liability is based on any of the three categories:

intentional, negligent, strict liability
SPECIFIC

Includes trespass, assault, battery, negligence,

products liability, and intentional infliction of
emotional distress

The Tortfeasor

Worcester vs. Ocampo (1958): Tortfeasor refers to all

persons who command, instigate, promote,
encourage, advise, countenance, cooperate in, aid or
abet the commission of a tort, or who approve of it
after it is done, if done for their benefit.
THE DIRECT TORTFEASOR
Art. 2176. Whoever by act or omission causes damage
to another, there being fault or negligence, is obliged
to pay for the damage done.
The tortfeasor may be a natural or juridical person.
PERSONS MADE LIABLE FOR OTHERS
Art. 2180 (1). The obligation imposed by Article 2176
is demandable not only for ones own acts or
omissions, but also for those of persons for whom
one is responsible.
PRINCIPLE OF VICARIOUS LIABILITY; DEFINITION
A person who has not committed the act or omission
which caused damage or injury to another may
nevertheless be held civilly liable to the latter either
directly or subsidiarily under certain circumstances.
This is also known as the doctrine of imputed
negligence.
Art. 2180, par. 8. The responsibility treated of in this
article shall cease when the persons herein
mentioned prove that they observed all the diligence

of a good father of a family to prevent damage.

General Rule: proper defense is the exercise of the
diligence of a good father of a family (bonus
paterfamilias)
Exception: common carriers, and all others subject to
extraordinary diligence.
BASIS OF VICARIOUS LIABILITY

The basis of vicarious liability is NOT respondeat

superior; rather, it is the principle of pater familias.
Respondeat
superior
Under American jurisprudence, it
means that the negligence of the
servant is conclusively the negligence
of the master.
Bonus pater
familias
Under the principle of pater familias,
the basis of the masters liability is
the negligence in the supervision of his
subordinates. The master will be
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freed from liability if he can prove that

he had observed all the diligence of a
good father of the family to prevent the
damage.
LIABILITY OF THE ACTUAL TORTFEASOR

The author of the act is not exempted from personal

liability. He may be sued alone or with the person
responsible for him.
2 REQUISITES ACCORDING TO CHIRONI
(1) The duty of supervision
(2) The possibility of making such supervision
effective
PRESUMPTION OF NEGLIGENCE ON PERSONS INDIRECTLY
RESPONSIBLE

Liability arises by virtue of a presumption juris

tantum of negligence on the part of the persons made
responsible under the article, derived from their failure
to exercise due care and vigilance over the acts of the
subordinates to prevent them from causing damage.
The non-performance of certain duties of precaution
and prudence imposed upon the persons who
become responsible by civil bond uniting the actor to
them.
Tamargo v. CA (1992): The basis of this vicarious,
although primary, liability is, as in Article 2176, fault
or negligence, which is presumed from that which
accompanied the causative act or omission. The
presumption is merely prima facie and may therefore
be rebutted.
NATURE OF LIABILITY

The liability of the vicarious obligor is PRIMARY and

DIRECT (solidarily liable with the tortfesor), not
subsidiary. His responsibility is not conditioned upon
the insolvency of or prior recourse against the

negligent tortfeasor.
PERSONS VICARIOUSLY LIABLE (ART. 2180)
WHO ARE LIABLE FOR MINORS?
(a) Parents (the father, and in case of his death or
incapacity, the mother)
(b) Adopters
(c) Court-appointed guardians
(d) Substitute Parental Authorities
(1) Grandparents
(2) Oldest qualified sibling over 21 years old
(3) Childs actual custodian, provided he is
qualified and over 21 years old.
(e) Special Parental Authorities
(1) School
(2) Administrators
(3) Teachers
(4) Individual, entity, or institution engaged in
child care
PARENTS AND ADOPTERS
BASIS OF LIABILITY

It is based on the presumption of failure on their part

to properly exercise their parental authority for the
good education of their children and exert adequate
vigilance over them.
It is imposed only when children are living with the
parents.
If there is just cause for separation, the responsibility
ceases.
Note: The responsibility of the father and mother is
not simultaneous but alternate.
WHEN RESPONSIBILITY CEASES

When parent is not in the position to exercise

authority and supervision over the child
MEANING OF MINORITY
Par. 2 and 3 of Art. 2180 speak of minors. Minors
here refer to those who are below 21 years of age,
NOT below 18 years. The law reducing the majority
age from 21 to 18 years old did not amend these
pars.
Art. 236, par. 3 of the FC, as amended by RA 6809,
provides:
Nothing in this Code shall be construed to
derogate from the duty or responsibility of
parents and guardians for children and wards
below 21 years of age mentioned in the second
and third paragraphs of 2180 of the Civil Code.
ADOPTED CHILDREN

Judicially adopted children are considered legitimate

children of their adopting parents. Thus, adopters
are civilly liable for their tortious/ criminal acts if the
children live with them and are below 21 years of
age.
ILLEGITIMATE CHILDREN

Responsibility is with the mother whom the law vests

parental authority.
REASON FOR VICARIOUS LIABILITY

Exconde vs. Capuno (1957): The civil liability which the law

imposes upon the father and, in case of his death or

incapacity, the mother, for any damages that may be
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caused by the minor children who live with them, is

obvious. This is a necessary consequence of the
parental authority they exercise over them which
imposes upon the parents the 'duty of supporting
them, keeping them in their company, educating
them in proportion to their means', while, on the
other hand, gives them the 'right to correct and
punish them in moderation.'
Tamargo vs. CA (1992): The basis of parental
authority for the torts of a minor child is the
relationship existing between the parents and the
minor child living with them and over whom, the law
presumes, the parents exercise supervision and
control. To hold that parental authority had been
retroactively lodged in the adoptive parents so as to
burden them with the liability for a tortious act that
they could not have foreseen and prevented would
be unfair.
Parental liability is, in other words, anchored upon
parental authority coupled with presumed parental
dereliction in the discharge of the duties
accompanying such authority. The parental
dereliction is, of course, only presumed and the
presumption can be overturned under Article 2180 of
the Civil Code by proof that the parents had
exercised all the diligence of a good father of a
family to prevent the damage
(NOTE: Art 2180, par 2 of the Civil Code which holds
the father liable for damages has been modified by
the Family Code and PD 603. Art. 211 of the FC
declares joint parental authority of the mother and
father over common children. The parent(s)
exercising parental authority are liable for the torts
of their children.
Libi vs. IAC (1992): The parent's liability under 2180
should be primary and not subsidiary. If it were
subsidiary, the parents cannot invoke due diligence
as a defense. Such interpretation reconciles 2180
with 2194 which calls for solidary liability of joint
tortfeasors.
REQUISITES FOR LIABILITY TO ATTACH

(1) The child is below 21 years old

(2) The child is under the parental authority of the
parents
The child is living in the company of the parents
PARENTAL AUTHORITY OVER FOUNDLINGS, ABANDONED,
NEGLECTED OR ABUSED AND OTHER SIMILARLY SITUATED
CHILDREN

In case of foundlings, abandoned, neglected or

abused children and other children similarly
situated, parental authority shall be entrusted in
summary judicial proceedings to heads of children's

homes, orphanages and similar institutions duly

accredited by the proper government agency. (FC
Art. 217)
GUARDIANS
LIABILITY OF GUARDIANS

Guardians are liable for damages caused by the

minors or incapacitated persons who are under their
authority and live in their company. [Art. 2180, par. 3]
(a) The liability of guardians with respect to their
wards is governed by the same rule as in the
liability of parents with respect to their children
below 21 years and who live with them
(b) Incompetent includes
(1) those suffering the penalty of civil interdiction,
or
(2) prodigals,
(3) deaf and dumb who are unable to read and
write
(4) unsound mind, even though they have lucid
intervals
(5) being of sound mind, but by reason of age,
disease, weak mind, and other similar causes,
cannot take care of themselves or manage
their property [Rule 92, ROC]
Liability of minor or insane tortfeasor without a parent
or guardian
He shall be answerable with his own property in an
action against him where a guardian ad litem shall
be appointed. [Art. 2182]
SCHOOL, TEACHERS AND ADMINISTRATORS
Teachers or heads of establishments of arts and
trades shall be liable for damages caused by their
pupils and students or apprentices, so long as they
remain in their custody. [Art. 2180, par. 7]
Who are liable For whose Acts
Requisite for
Liability to
Attach
Teacher-incharge
(the
one
designated to
exercise
supervision
over students)
Pupils and
students
Pupils and
students
remain in
teachers
custody
regardless of
the age
Head of

establishment
Apprentices Custody
regardless of
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Who are liable For whose Acts

Requisite for
Liability to
Attach
of arts and
trades
the age
School
(generally not
held liable)
If the tortfeasor is a
student of the
school (Art 218 FC)
If the tortfeasor is a
teacher/ employee
of the school, it is
liable as employer
under 2180 (5) of
CC (St. Francis vs.
CA)
If the tortfeasor is a
stranger, it is liable
for breach of
contract. (PSBA vs.
CA)
Must be
below 18
Parental Authority of Special Parental Authorities
may only be exercised while under their supervision,
instruction, or custody. This attaches to all
authorized activities, whether inside or outside the
school, entity, or institution.
Palisoc v. Brillantes: Custody means the protective
and supervisory custody that the school, its head and
teachers exercise over the pupils, for as long as they
are in attendance in school, which includes recess
time.
There is nothing in the law that requires that for such
liability to attach, the pupil or student who commits
the tortious act must live and board in the school, as
erroneously held by the lower court, and in the dicta
in Mercado (as well as in Exconde) on which it relied,
must now be deemed to have been set aside by this
decision.
Amadora v. CA: As long as it is shown that the
student is in the school premises pursuant to a
legitimate student objective, in the exercise of a
legitimate right, or the enjoyment of a legitimate
student privilege, the responsibility of the school
authorities over the student continues.
Salvosa v. IAC (1988): A student not at attendance in

the school cannot be in recess thereat. A recess,

as the concept is embraced in the phrase at
attendance in the school, contemplates a situation
of temporary adjournment of school activities where
the student still remains within call of his mentor
and is not permitted to leave the school premises, or
the area within which the school activity is
conducted. Recess by its nature does not include
dismissal.
Mere fact of being enrolled or being in the premises
of a school without more does not constitute
attending school or being in the protective and
supervisory custody of the school, as concemplated
by law.
Ylarde vs. Aquino (1988): The principal of the school
cannot be held liable for the reason that the school
he leads is an academic school and not a school of
arts and trades.
OWNERS AND MANAGERS OF
ESTABLISHMENTS AND ENTERPRISES
The owners and managers of an establishment or
enterprise are likewise responsible for damages
caused by their employees in the service of the
branches in which the latter are employed or on the
occasion of their functions. (Art. 2180, par. 4)
Who are liable
For whose
acts
Requisites for
liability to attach
Owners and
managers of an
establishment
or enterprise
Their
employees
The damage was
caused in the
service of the
branches in which
the employees are
employed
-ORThe
damage was
caused on the
occasion of their
functions
Philippine Rabbit vs. Philam Forwarders (1975):
Owners and managers of an establishment or
enterprise does not include a manager of a
corporation. (Spanish term directores connotes
employer. But manager of a corporation is not an
employer, but rather merely an employee of the
owner.)
EMPLOYERS (in general)

Employers shall be liable for the damages caused by

their employees and household helpers acting within
the scope of their assigned tasks, even though the
former are not engaged in any business or industry.
(Art 2180, par. 5)
MEANING OF EMPLOYER:
Art. 97 (b) (Labor Code). "Employer" includes any
person acting directly or indirectly in the interest of
an employer in relation to an employee and shall
include the government and all its branches,
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subdivisions and instrumentalities, all governmentowned

or controlled corporations and institutions, as
well as non-profit private institutions, or
organizations.
Professional Services vs. CA and Agana (2010): This
Court still employs the "control test" to determine
the existence of an employer-employee relationship
between hospital and doctor. Under the "control
test", an employment relationship exists between a
physician and a hospital if the hospital controls both
the means and the details of the process by which
the physician is to accomplish his task.
INDEPENDENT CONTRACTOR

General Rule: Master not generally liable for the fault

or negligence of an independent contractor
performing some work for him
Exception: One who hires an independent contractor,
but controls the latters work is also responsible for
the independent contractors negligence.
The existence of the employer-employee relationship
must first be established before an employer may be
made vicariously liable under Art. 2180, CC.
REQUISITES:
(1) Employee chosen by employer or through
another
(2) Services rendered in accordance with orders
which employer has authority to give
(3) Illicit act of employee was on the occasion or by
reason of the functions entrusted to him
(4) Presumption of negligence
To make the employer liable, it must be established
that the injurious or tortious act was committed at
the time that the employee was performing his
functions.
Filamer vs. IAC (1992): Within the scope of their
assigned task in Art. 2180 includes any act done by
an employee in furtherance of the interests, or for the
account of the employer at the time of the infliction
of the injury or damage.
De Leon Brokerage vs. CA (1962): Employer need not
be riding in the vehicle to become liable for a drivers
negligence. Article 2184 mandating that the owner is
only held solidarily liable if he is riding in the vehicle
at the time of the mishap, only applies to those

owners of vehicles, who do not come within the

ambit of Article 2180 (as owners of an establishment
or enterprise.)
Basis of liability
Employers negligence in
(1) The selection of their employees (culpa in
eligiendo)
(2) The supervision over their employees (culpa in
vigilando)
Cuison vs. Norton & Harrison (1930): Basis for civil
liability of employers is pater familias.
Presumption of Negligence
The presentation of proof of the negligence of its
employee gives rise to the presumption that the
defendant employer did not exercise the diligence of
a good father of a family in the selection and
supervision of its employees.
Ramos vs. C.O.L. Realty Corp. (2009): For the
employer to avoid the solidary liability for a tort
committed by his employee, an employer must rebut
the presumption by presenting adequate and
convincing proof that in the selection and supervision
of his employee, he or she exercised the care and
diligence of a good father of a family. Employers
must submit concrete proof, including documentary
evidence, that they complied with everything that
was incumbent on them.
Necessity of presumption of negligence
It is difficult for any person injured to prove the
employers negligence as they would be proving
negative facts.
EMPLOYER NEED NOT BE ENGAGED IN BUSINESS OR
INDUSTRY

Castilex Industrial Corp. vs. Vasquez (1999): The

phrase "even though the former are not engaged in
any business or industry" found in the fifth
paragraph should be interpreted to mean that it is
not necessary for the employer to be engaged in any
business or industry to be liable for the negligence of
his employee who is acting within the scope of his
assigned task.
A distinction must be made between the two
provisions to determine what is applicable. Both
provisions apply to employers: the fourth paragraph,
to owners and managers of an establishment or
enterprise; and the fifth paragraph, to employers in
general, whether or not engaged in any business or
industry. The fourth paragraph covers negligent acts
of employees committed either in the service of the
branches or on the occasion of their functions, while
the fifth paragraph encompasses negligent acts of
employees acting within the scope of their assigned
task. The latter is an expansion of the former in both
employer coverage and acts included. Negligent acts
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of employees, whether or not the employer is

engaged in a business or industry, are covered so
long as they were acting within the scope of their
assigned task, even though committed neither in the
service of the branches nor on the occasion of their
functions. For, admittedly, employees oftentimes
wear different hats. They perform functions which
are beyond their office, title or designation but which,
nevertheless, are still within the call of duty.
Under the fifth paragraph of Article 2180, whether or
not engaged in any business or industry, an
employer is liable for the torts committed by
employees within the scope of his assigned tasks.
But it is necessary to establish the employeremployee
relationship; once this is done, the plaintiff
must show, to hold the employer liable, that the
employee was acting within the scope of his
assigned task when the tort complained of was
committed. It is only then that the employer may find
it necessary to interpose the defense of due diligence
in the selection and supervision of the employee.
Distinction between 4th and 5th paragraph of 2180
4th paragraph 5th paragraph
Liable persons Owners and
managers of an
establishment or an
enterprise
Employers in
general,
whether or not
engaged in
business or
industry
Covered acts Negligent acts of
employees
committed either in
the service of the
branches or on the
occasion of their
functions
Negligent acts
of employees
acting within
the scope of
their assigned
task
DEFENSE OF DILIGENCE IN SELECTION AND SUPERVISION

Metro Manila Transit vs. CA (1993): Due diligence in

the SUPERVISION of employees includes the
formulation of suitable rules and regulations for the
guidance of employees and the issuance of proper
instructions intended for the protection of the public
and persons with whom the employer has relations
through his or her employees and the imposition of
necessary disciplinary measures upon employees in

case of breach or as may be warranted to ensure

performance of acts as indispensable to the business
of and beneficial to their employee.
Due diligence in the SELECTION of employees
require that the employer carefully examined the
applicant for employment as to his qualifications, his
experience and record of service.
Metro Manila Transit vs. CA (1998): The responsibility
of employers for the negligence of their employees in
the performance of their duties is primary, that is, the
injured party may recover from the employers
directly, regardless of the solvency of their
employees. The rationale for the rule on vicarious
liability of the employer for the torts of the
employees is that this is a required cost of doing
business. They are placed upon the employer
because, having engaged in the enterprise, which
will on the basis of all past experience involve harm
to others through the tort of employees, and sought
to profit by it, it is just that he, rather than the
innocent plaintiff, should bear them; and because he
is better able to absorb them, through prices, rates
or liability or insurance, and so to shift them to
society, to the community at large.
Nature of Employers Liability
The employer is PRIMARILY and SOLIDARILY liable
for the tortious act of the employee. The employer
may recover from the employee, the amount it will
have to pay the offended partys claim.
Such recovery, however, is NOT for the entire
amount. To allow such would be as if to say that the
employer was not negligent.
Philtranco vs. CA (1997): The liability of the registered
owner and driver is solidary, primary and direct.
Criminal Negligence
Fernando v. Franco: The vicarious liability of the
employer for criminal negligence of his employee is
governed by RPC 103. Conviction of the employee
conclusively binds the employer. Defense of due
diligence in the selection and supervision of the
employee is NOT available. The employer cannot
appeal the conviction.
Soliman v. Tuazon (1992): Liability for illegal or
harmful acts committed by security guards attaches
to the employer agency, not to the clients or
customers of such agency.
Registered Owner Rule
(1) The registered owner of the vehicle is primarily
responsible to the public for whatever damage or
injury the vehicle may have caused, even if he had
already sold the same to someone else. The
policy is the easy identification of the owner who
can be held responsible so as not to
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inconvenience or prejudice the third party injured.

(Cadiente v. Macas, 2008)

(2) This rule applies even if the vehicle is leased to
third persons.
Remedy of the registered owner
His liability is subject to his right of recourse against
the transferee or buyer.
THE STATE
The State may not be sued without its consent. (Sec
3, Art XVI, 1987 Constitution)
The State is responsible in like manner when it acts
through a special agent; but not when the damage
has been caused by the official to whom the task
done properly pertains, in which case what is
provided in Article 2176 shall be applicable. (Art
2180, par. 6)
Merritt vs. Government of the Philippine Islands (1960):
A special agent is one who receives a definite and
fixed order or commission, foreign to the exercise of
the duties of his office if he is a special official.
This concept does not apply to any executive agent
who is an employee of the active administration and
who on his own responsibility performs the functions
which are inherent in and naturally pertain to his
office.
The responsibility of the state is limited to that which
it contracts through a special agent, duly
empowered by a definite order or commission to
perform some act or charged with some definite
purpose which gives rise to the claim.
General Rule: The State cannot be sued.
Exceptions:
(1) There is express legislative consent
(2) The State filed the case (because here, it is
deemed to have waived its immunity.)
INSTANCES WHERE THE STATE GIVES ITS CONSENT TO BE
SUED

(1) Art. 2180 (6) is an example of an express

legislative consent. Here, the State assumes a
limited liability for the acts of its special agents.
(2) Art. 2189 provides for state liability for damages
caused by defective condition of public works.
(3) Local Government Code provides for the liability
of local government units for wrongful exercise of
its proprietary (as opposed to its governmental)
functions. The latter is the same as that of a
private corporation or individual. (Mendoza vs. De
Leon, 1916)
The State agencies or subdivisions, in the pursuance
of proprietary functions, are akin to any other private
corporation. They may be sued for:
(1) Torts committed by them (Art. 2176) or
(2) Torts committed by their employees (art 2180).
As long as it is performing proprietary functions, it
can be held liable for the acts of its employees, both
regular and special.
Notes:

(a) As a governmental entity: Liable only for acts of

its special agents
(b) As a corporate entity: May be held liable just as
any other employer for the acts of its employees
(c) Special Agent: One duly empowered by a definite
order or commission to perform some act or one
charged with some definite purpose which give
rise to the claim; if he is a government employee
or official, he must be acting under a definite and
fixed order or commission, foreign to the exercise
of the duties of his office
JOINT TORTFEASORS
The responsibility of two or more persons who are
liable for quasi-delict is solidary. (Art. 2194)
DEFINITION OF JOINT TORTFEASORS
Filipinas Broadcasting Network vs. AMEC-BCCM
(2005): They are all persons who command,
instigate, promote, encourage, advise, countenance,
cooperate in, aid or abet in the commission of a tort,
or who approve of it after it is done, if done for their
benefit.
APPLICABILITY OF THE PROVISION

The provision applies when there are 2 or more

persons who have participated in the commission of
a single quasi-delict.
The injury must be indivisible.
NATURE OF LIABILITY

Solidary The person injured may sue all of them, or

any number less than all, and they are all together
solidarily liable for the whole damage.
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Acts of Omission and its

Modalities

Human conduct can be described alternatively as

acts or omission. In relation to the existence of a
legal duty, conduct may be described in terms of
action or inaction, or misfeasance or
nonfeasance.
Manresa; liability for personal acts or omission is
founded on that indisputable principle of justice
recognized by all legislators that when a person by
his act or omission causes damage or prejudice to
another, a juridical relation is created by virtue of
which the injured person acquires a right to be
indemnified and the person causing the damage is
charged with the corresponding duty of repairing the
damage. The reason for this is found in the obvious
truth that man should subordinate his acts to the
precepts of prudence and if he fails to observe them
and cause damage to another, he must repair the
damage.

Proximate Cause

CONCEPT OF PROXIMATE CAUSE

In order that civil liability for negligence may arise,

there must be a direct causal connection between
the damage suffered by the plaintiff and the act or
omission of the defendant. In other words, the act or
omission of the defendant must be the proximate
cause of the loss or damage of the plaintiff.
DEFINITION
Bataclan v. Medina:
PROXIMATE CAUSE: that cause, which, in natural and
continuous sequence, unbroken by any efficient
intervening cause, produces the injury, and without
which the result would not have occurred.
PROXIMATE LEGAL CAUSE: that acting first and
producing the injury, either immediately or by setting
other events in motion, all constituting a natural and
continuous chain of events, each having a close
causal connection with its immediate predecessor,
the final event in the chain immediately effecting the
injury as a natural and probable result of the cause
which first acted, under such circumstances that the
person responsible for the first event should, as an
ordinary prudent and intelligent person, have
reasonable ground to expect at the moment of his
act or default that an injury to some person might
probably result therefrom
Quezon City vs. Dacara (2005): Proximate cause is
determined from the facts of each case, upon a
combined consideration of logic, common sense,
policy or precedent.
DIFFERENTIATED FROM:
REMOTE CAUSE

Manila Electric v. Remonquillo: A prior and remote

cause cannot be made the basis of an action if such
remote cause did nothing more than furnish the
condition or give rise to the occasion by which the
injury was made possible, if there intervened
between such prior or remote cause and the injury a
distinct, successive, unrelated, and efficient cause of
the injury, even though such injury would not have
happened but for such condition or occasion.
Concurrent Cause Several causes producing the
injury, and each is an efficient cause without which
the injury would not have happened. The injury is
attributed to any or all the causes, and recovery may
be had against any or all of those responsible.
Far Eastern Shipping v. CA: Where the concurrent or
successive negligent acts or omissions of two or
more persons, although acting independently, are in
combination the direct and proximate cause of a
single injury to a third person, it is impossible to
determine in what proportion each contributed to
the injury and either of them is responsible for the
whole injury. Where their concurring negligence
resulted in injury or damage to a third party, they
become joint tortfeasors and are solidarily liable for

the resulting damage.

INTERVENING CAUSE

Phoenix Construction v. IAC: If the intervening cause

is one which in ordinary human experience is
reasonably to be anticipated, or one which the
defendant has reason to anticipate under the
particular circumstances. The defendant may be
negligent, among other reasons, because of failure
to guard against it.
There is an intervening cause combining with the
defendants conduct to produce the result, and the
defendants negligence consists in failure to protect
the plaintiff against that very risk.
Foreseeable intervening forces are within the scope
of the original risk, and hence of the defendants
negligence.
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EFFICIENT INTERVENING CAUSE

Teague vs. Fernandez (1973): The test is not in the

number of intervening causes, but in their character
and in the natural and probable connection between
the wrong done and the injurious consequence.
TESTS TO DETERMINE PROXIMATE CAUSE
CAUSE IN FACT: The first step is to determine whether
the defendants conduct, in point of fact, was a factor
in causing plaintiffs damage.
EFFECTIVENESS OF THE CAUSE; BUT FOR RULE: whether
such negligent conduct is a cause without which the
injury would not have taken place (sine qua non rule)
or is the efficient cause which set in motion the chain
of circumstances leading to the injury. (Bataclan v.
Medina)
SUBSTANTIAL FACTOR TEST: If the actors conduct is a
substantial factor in bringing about harm to another,
the fact that the actor neither foresees nor should
have foreseen the harm or the manner in which it
occurred, does not prevent him from being liable.
(Philippine Rabit v. IAC)
FORESEEABILITY TEST: Anticipation of consequence is a
necessary element in determining not only whether a
particular act or omission was negligent, but also
whether the injury complained of was proximately
caused by such act or omission.
NATURAL AND PROBABLE CONSEQUENCE TEST: A natural
consequence of an act is the consequence which
ordinarily follows it. A probable consequence is one
that is more likely to follow than fail to follow its
supposed cause but it need not be one which
necessarily follows such cause.
ORDINARY AND NATURAL OR DIRECT CONSEQUENCE TEST :
If negligence is a cause in fact of the injury, the
liability of the wrongdoer extends to all the injurious
consequences.
HINDSIGHT TEST: A party guilty of negligence or
omission of duty is responsible for all the

consequences which a prudent and experienced

party, fully acquainted with all the circumstances
which in fact exist, whether they could have been
ascertained by reasonable diligence, or not, would
have thought at the time of the negligent act as
reasonably possible to follow, if they had been
suggested to his mind.
ORBIT OF THE RISK TEST: If the foreseeable risk to
plaintiff created a duty which the defendant
breached, liability is imposed for any resulting injury
within the orbit or scope of such injury. It is not the
unusual nature of the act resulting in injury to
plaintiff that is the test of foreseeability, but whether
the result of the act is within the ambit of the
hazards covered by the duty imposed upon the
defendant.
CAUSE V. CONDITION
Many courts have sought to distinguish between the
active cause of the harm and the existing
conditions upon which that cause operated. If the
defendant has created only a passive, static
condition which made the damage possible, he is
said not to be liable.
Phoenix Construction vs. IAC (1987): The distinction
between cause and condition has already been
almost entirely discredited. Prosser and Keeton: So
far as the fact of causation is concerned, in the sense
of necessary antecedents which could have played
an important part in producing the result, it is quite
impossible to distinguish between active forces and
passive situations, particularly since the latter are the
result of other active forces which have gone before.
(NOTE: active force is the cause while the passive
situation is the condition)
It is not the distinction which is important but the
nature of the risk and the character of the
intervening cause.
LEGAL CAUSE
NATURAL AND PROBABLE CONSEQUENCES

A natural consequence of an act is the consequence

which ordinarily follows it. A probable consequence
is one that is more likely to follow than fail to follow
its supposed cause but it need not be one which
necessarily follows such cause.
FORESEEABILITY

Anticipation of consequence is a necessary element

in determining not only whether a particular act or
omission was negligent, but also whether the injury
complained of was proximately caused by such act or
omission.
Jarencio: Where the particular harm sustained was
reasonably foreseeable at the time of the
defendants misconduct, his act or omission is the
legal cause thereof.
Foreseeability is the fundamental basis of the law of
negligence. To be negligent, the defendant must

have acted or failed to act in such a way that an

ordinary reasonable man would have realized that
certain interests of certain persons were reasonably
subjected to a general but definite class of risks.
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DOCTRINE OF LAST CLEAR CHANCE

Also known as: "doctrine of discovered peril or
doctrine of supervening negligence or
humanitarian doctrine
The negligence of the plaintiff does not preclude a
recovery for the negligence of the defendant where it
appears that the defendant by exercising reasonable
care and prudence, might have avoided injurious
consequences to the plaintiff notwithstanding the
plaintiffs (own) negligence. (Sangco, Torts and
Damages.)
Consolidated Bank v. CA: The doctrine of last clear
chance states that where both parties are negligent
but the negligent act of one is appreciably later than
that of the other, or where it is impossible to
determine whose fault or negligence caused the loss,
the one who had the last clear opportunity to avoid
the loss but failed to do so, is chargeable with the
loss. The antecedent negligence of the plaintiff does
not preclude him from recovering damages caused
by the supervening negligence of the defendant, who
had the last fair chance to prevent the impending
harm by the exercise of due diligence.
Picart v. Smith: If both parties are found to be
negligent; but, their negligence are not
contemporaneous, the person who has the last fair
chance to avoid the impending harm and fails to do
so is chargeable with the consequences, without
reference to the prior negligence of the other party.
ELEMENTS:
(1) Plaintiffs own negligence puts himself in a
dangerous situation;
(2) Defendant saw or discovered, by exercising
reasonable care, the perilous position of plaintiff;
(3) In due time to avoid injuring him
(4) Despite notice and imminent peril, defendant
failed to employ care to avoid injury; and
(5) Injury of plaintiff resulted.
COVERS SUCCESSIVE ACTS OF NEGLIGENCE

Primary negligence of the defendant contributory

negligence of the plaintiff subsequent negligence
of the defendant in failing to avoid the injury to the
plaintiff
INAPPLICABLE TO JOINT TORTFEASORS

However, the doctrine cannot be extended into the

field of joint tortfeasors as a test of whether only one
of them should be held liable to the injured person
by reason of his discovery of the latters peril, and it
cannot be invoked as between defendants
concurrently negligent.

Note:
(a) If plaintiff is the proximate cause: NO RECOVERY
can be made.
(b) If plaintiff is NOT the proximate cause: Recovery
can be made but such will be mitigated.
(c) If negligence of parties is equal in degree, then
each bears his own loss.)
Pantranco vs. Baesa (1989): Last clear chance applies
only if the person who allegedly had the last
opportunity to avert the accident was aware of the
existence of peril or should, with exercise of due care,
have been aware of it.
Ong vs. Metropolitan (1958): Last clear chance does
not apply where the party charged is required to act
instantaneously, and if the injury cannot be avoided
by the application of all means at hand after the peril
is or should have been discovered.
Bustamante vs. CA (1991): The doctrine of last clear
chance, as enunciated in Anuran v. Buno, applies in a
suit between the owners and drivers of colliding
vehicles. It does not arise where a passenger
demands responsibility from the carrier to enforce its
contractual obligations. It will be inequitable to
exempt the negligent driver of the jeepney and its
owners on the ground that the other driver was
likewise guilty of negligence.
Phoenix vs. IAC (1987): Doctrine of last clear chance
does not seem to have a role to play in a jurisdiction
where the common law concept of contributory
negligence as an absolute bar to recovery by the
plaintiff, has itself been rejected, as it has been in
2179 of CC.
CONTRIBUTORY NEGLIGENCE
Valenzuela v. CA: Conduct on the part of the injured
party, which contributed as a legal cause to the harm
he has suffered, which falls below the standard to
which he is required to conform for his own
protection.
MH Rakes v. Atlantic: Contributory negligence does
not defeat an action if it can be shown that the
defendant might, by the exercise of reasonable care
and prudence, have avoided the consequences of the
injured party's negligence. Petitioners negligence
contributed only to his own injury and not to the
principal occurrence it was merely an element to
the damage caused upon him.
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WHEN IS IT A BAR TO RECOVERY?

Only when the proximate cause is on the part of the

plaintiff. Where the plaintiff contributes to the
principal occurrence, as one of its determining
factors, he cannot recover. Where, in conjunction
with the occurrence, he contributes only to his own
injury, he may recover the amount that the
defendant responsible for the event should pay for

such injury, less a sum deemed a suitable equivalent

for his own imprudence.

Legal Injury

Injury is the illegal invasion of a legal right.

Legal Right A legal claim enforced by sanctions
Legal Duty That which the law requires to be done
to a determinate person
ELEMENTS:
(1) Legal right in favor of a person
(2) Correlative legal duty on the part of another
(3) Wrong in the form of an act or omission or
violation of said legal right and duty with
consequent injury or damage
Custodio vs. CA (1996): To warrant recovery of
damages, there must be both a right of action for a
legal wrong inflicted by the defendant, and damage
resulting to the plaintiff therefrom.
The underlying basis for the award of tort damages is
the premise that an individual was injured in
contemplation of law. The law affords no remedy for
damages resulting from an act which does not
amount to a legal injury or wrong. The act must not
only be hurtful, but wrongful (damnum et injuria).
Amonoy vs. Gutierrez (2001): The exercise of a right
ends when the right disappears, and it disappears
when it is abused, especially to the prejudice of
others. The mask of a right without the spirit of
justice which gives it life, is repugnant to the modern
concept of social law. It cannot be said that a person
exercises a right when he unnecessarily prejudices
another xxx. Over and above the specific precepts of
positive law are the supreme norms of justice; and he
who violates them violates the law. For this reason it
is not permissible to abuse our rights to prejudice
others.
CLASSES OF INJURY
INJURY TO PERSONS

Art. 19. Every person must, in the exercise of his

rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty
and good faith.
Art. 20. Every person who, contrary to law, willfully
or negligently causes damage to another shall
indemnify the latter for the same.
Art. 21. Any person who willfully causes loss or injury
to another in a manner that is contrary to morals,
good customs or public policy shall compensate the
latter for the damage.
INJURY TO PROPERTY

Art. 23. Even when an act or event causing damage

to anothers property was not due to the fault or
negligence of the defendant, the latter shall be liable
for indemnity if through the act or event he was
benefited.
INJURY TO RELATIONS

Art. 26. Every person shall respect the dignity,

personality, privacy and peace of mind of his
neighbors and other persons. The following and
similar acts, though they may not constitute a
criminal offense, shall produce a cause of action for
damages, prevention and other relief;
(1) Prying into the privacy of anothers residence;
(2) Meddling with 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 his
religious beliefs, lowly station in life, place of
birth, physical defect, or other personal
condition.
Art. 33. In cases of defamation, fraud, and physical
injuries, a civil action for damages, entirely separate
and distinct from the criminal action, may be
brought by the injured party. Such civil action shall
proceed independently of the criminal prosecution,
and shall require only a preponderance of evidence.

Intentional Torts

CONCEPT
Under Article 2176, a person is also held liable for
intentional and malicious acts. The liability is
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founded on the indisputable principle of justice

recognized by all legislations that when a person, by
his act or omission, causes damage or prejudice to
another, a juridical relation is created by virtue of
which the injured person acquires a right to be
indemnified and the person causing the damage is
charged with the corresponding duty of repairing the
damage.
PNB v. CA, 1978: (NCC 21-36) serve as catch all
provisions or dragnet clauses. They cover any
imaginable tort action, because these articles were
intended to expand the concept of torts in out
jurisdiction. It grants adequate legal remedies for the
(otherwise) untold number of moral wrongs, which is
impossible for human foresight to provide in our
statutes.
VIOLATIONS OF A PERSONS SECURITY AND
PHYSICAL INJURIES (NCC 33)
BATTERY (PHYSICAL INJURY)
The actual infliction of any unlawful or unauthorized
violence on the person of another, irrespective of its
degree.
The least touching of another in anger, or in any
manner which amounts to an unlawful setting upon
his person, may subject one to an action for battery.
INTERESTS PROTECTED BY LAW:
(1) Interest of the individual in freedom from bodily
harm or any impairment whatever of the physical

integrity of the body

(2) Interest in freedom from offensive bodily touching
although no actual harm is done.
Carandang vs. Santiago and Valenton (1955):
Defamation and fraud (in Art. 33) are used in their
ordinary sense because there are no specific
provisions in the Revised Penal Code using these
terms as names of offenses defined therein, so that
these two terms defamation and fraud must have
been used not to impart to them any technical
meaning in the laws of the Philippines, but in their
generic sense. With these apparent circumstances in
mind, it is evident that the term physical injuries
could not have been used in its specific sense as a
crime defined in the Revised Penal Code, for it is
difficult to believe that the Code Commission would
have used terms in same articlesome in this
general and others in its technical sense. In other
words, the term physical injuries should be
understood to mean bodily injury, not the crime of
physical injuries, because the terms used with the
latter are general terms.
ASSAULT (GRAVE THREAT)
An intentional, unlawful offer of physical injury to
another by force unlawfully directed toward the
person of another, under such circumstances as to
create a well-founded fear of imminent peril,
coupled with the apparent present ability to
effectuate the attempt if not prevented.
The wrong is committed when unreasonable fear is
inspired in the plaintiff by threatening gestures,
especially when these are connected with unlawful,
sinister, and wicked conduct on the part of the
defendant.
FALSE IMPRISONMENT (ILLEGAL DETENTION)
Art. 32. Any public officer or employee, or any private
individual, who directly or indirectly obstructs,
defeats, violates or in any manner impedes or
impairs any of the following rights and liberties of
another person shall be liable to the latter for
damages:
(1) Freedom from arbitrary or illegal detention
xxx
INTERFERENCE WITH PERSONAL PROPERTY
TRESPASS TO LAND

Any intentional use of anothers real property,

without authorization and without a privilege by law
to do so, is actionable as a trespass without regard to
harm. (Prosser and Keeton, p. 70)
Elements
An invasion
(1) which interfered with the right of exclusive
possession of the land, and
(2) which was a direct result of some act committed
by the defendant. (Prosser and Keeton, p. 67)
TRESPASS TO CHATTELS

Any direct and immediate intentional interference

with a chattel in the possession of another. (Prosser
and Keeton, p. 85)
CONVERSION

Major interferences with the chattel, or with the

plaintiffs rights in it, which are so serious, and so
important, as to justify the forced judicial sale to the
defendant. (Prosser and Keeton, p. 90)
INTENTIONAL NON-PHYSICAL HARMS
Art. 26. Every person shall respect the dignity,
personality, privacy and peace of mind of his
neighbors and other persons. The following and
similar acts, though they may not constitute a
criminal offense, shall produce a cause of action for
damages, prevention and other relief;
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(1) Prying into the privacy of anothers residence;

(2) Meddling with 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 his
religious beliefs, lowly station in life, place of
birth, physical defect, or other personal
condition.
The principal rights protected under this provision
are the following:
(1) The right to personal dignity
(2) The right to personal security
(3) The right to family relations
(4) The right to social intercourse
(5) The right to privacy
(6) The right to peace of mind
VIOLATION OF PERSONAL DIGNITY

In order to be actionable it is not necessary that the

act constitutes a criminal offense. The remedy
afforded by the law is not only the recovery of
damages. Prevention and other relief is also
available. In other words, injunction and other
appropriate reliefs may also be obtained by the
aggrieved party.
St. Louis Realty Corporation vs. CA (Illustration of a
similar act): The acts and omissions of the firm fall
under Article 26. Persons who know the residence of
Doctor Aramil were confused by the distorted,
lingering impression that he was renting his
residence from Arcadio or that Arcadio had leased it
from him. Either way, his private life was mistakenly
and unnecessarily exposed.
INFLICTION OF EMOTIONAL DISTRESS

MVRS Publications vs. Islamic Da'wah Council (2003):

Article 26 specifically applies to intentional acts
which fall short of being criminal offenses. It itself
expressly refers to tortious conduct which "may not
constitute criminal offenses." The purpose is
precisely to fill a gap or lacuna in the law where a

person who suffers injury because of a wrongful act

not constituting a crime is left without any redress.
Under Article 26, the person responsible for such act
becomes liable for "damages, prevention and other
relief." In short, to preserve peace and harmony in
the family and in the community, Article 26 seeks to
eliminate cases of damnum absque injuria in human
relations.
Consequently, the elements that qualify the same
acts as criminal offenses do not apply in determining
responsibility for tortious conduct under Article 26.
In intentional infliction of mental distress, the
gravamen of the tort is not the injury to plaintiff's
reputation, but the harm to plaintiff's mental and
emotional state. In libel, the gist of the action is the
injury to plaintiff's reputation. Reputation is the
community's opinion of what a person is. In
intentional infliction of mental distress, the opinion
of the community is immaterial to the existence of
the action although the court can consider it in
awarding damages. What is material is the
disturbance on the mental or emotional state of the
plaintiff who is entitled to peace of mind.
VIOLATION OF PRIVACY

It is the right to be let alone, or to be free from

unwarranted publicity, or to live without
unwarranted interference by the public in matters in
which the public is not necessarily concerned.
Reasonableness of Expectation of Privacy
(The 2-prong test)
(1) Whether by ones conduct, the individual has
exhibited an expectation of privacy
(2) Whether this expectation is one that society
recognizes and accepts as reasonable
Note:
Coverage of Art. 26 is not limited to those
enumerated therein, the enumeration being merely
examples of acts violative of a persons rights to
dignity, personality, privacy and peace of mind. Other
similar acts are also covered within the scope of
the article.
Persons who can invoke privacy
General Rule: The right to privacy may only be
invoked by natural persons. Juridical persons cannot
invoke this because the basis to this right is an injury
to the feelings and sensibilities of the injured party,
and a corporation has none of those
Exception: The right to privacy may be invoked along
with the right against unreasonable searches and
seizures.
General Rule: The right to privacy is purely personal in
nature:
(1) It can be invoked only by the person actually
injured
(2) It is subject to a proper waiver

(3) It ceases upon death

Exception: The privilege may be given to the heirs of
a deceased to protect his memory, but this privilege
exists for the benefit of the living. It enables the
protection of their feelings, and prevents the
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violation of their own rights regarding the character

and memory of the deceased.
Invasion of Privacy
Types:
(1) Publication of embarrassing private facts The
interest here is the right to be free from
unwarranted publicity, wrongful publicizing of
private affairs and activities, as these are outside
the ambit of legitimate public concern.
Ayer v. Capulong (1988): Public figures enjoy a limited
right to privacy as compared to ordinary individuals.
(2) Intrusion upon plaintiffs private affairs This is
not limited to situations where the wrongdoer
physically trespasses into ones property.
(a) Generally, there is no invasion of privacy
when journalists report something that
occurs in the public realm, except when the
acts of the journalist are to an extent that it
constitutes harassment.
(b) RA 4200: it is illegal for any person not
authorized by both parties to any private
communication to secretly record such
communication.
(c) Limitations to Right to Information v. Right
to Privacy:
(i) Must be of public interest
(ii) Must not be excluded by law
(3) Publicity which puts one in a false light in the
public eye To protect the interest of one in not
being made or forced to appear before the public
in an objectionable false light or position.
Tort of putting in false
light
Defamation
The embarrassment of a
person being portrayed
as something he is not
Concerns the reputational
harm to a person
Statement should be
actually made in public
Publication is satisfied
even if communicated to
only one specific third
person
(4) Commercial appropriation of likeness of image
It consists of appropriation, for the defendants
benefit or advantage (ex. It was used in the
defendants advertisement), of the plaintiffs name or

likeness (picture or portrait).

DISTURBANCE OF PEACE OF MIND

The disturbance of the mental and emotional

tranquility of the plaintiff by the defendant is a legal
injury in itself and, therefore, a sufficient cause of
action for damages, injunction, and other relief.
A person, however, cannot be held liable for
damages for the mental or emotional disturbance of
the plaintiff which was due to the latters
susceptibility to such disturbance, where the
defendant had no knowledge of such peculiar
susceptibility. The tendency of the law is to secure an
interest in mental comfort only to the extent of the
ordinary sensibilities of men.
MALICIOUS PROSECUTION

Art. 2219. Moral damages may be recovered in the

following and analogous cases:
xxx
(8) Malicious prosecution
Art. 21. Any person who wilfully causes loss or injury
to another in manner that is contrary to morals, good
customs or public policy shall compensate the latter
for the damage.
Malicious prosecution is the institution of any action
or proceeding either civil or criminal against another,
maliciously and without probable cause.
Elements:
(1) That the defendant was himself the prosecutor
or that he instigated its commencement
(2) That the action was finally terminated with an
acquittal
(3) That in bringing the action, the prosecutor acted
without probable cause
(4) That he was actuated or impelled by legal
malice, that is, by improper and sinister motives.
(Lao v. CA)
Drilon vs. CA (1997): Malicious Prosecution defined:
An action for damages brought by one against whom
a criminal prosecution, civil suit, or other legal
proceeding has been instituted maliciously and
without probable cause, after the termination of such
prosecution, suit or other proceeding in favor of the
defendant herein. The gist of the action is the putting
of legal process in force, regularly, for the mere
purpose of vexation or injury.
Buenaventura vs. Domingo and Ignacio (1958): The
provisions of the Civil Code in taking reference to
malicious prosecutions must necessarily imply that
the person to be held liable to pay moral damages
should have acted deliberately and with knowledge
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that his accusation of the person subject to such

malicious prosecution, was false and groundless.
xxx Proof and motive that the prosecution or
institution of the action was prompted by a sinister

design to vex and humiliate a person and to cast

dishonor and disgrace must be clearly and
preponderantly established to entitle the victims to
damages and other rights granted by law; otherwise,
there would always be a civil action for damages
after every prosecution's failure to prove its cause
resulting in the consequent, acquittal of the accused
therein.
DEFAMATION, FRAUD AND PHYSICAL INJURIES
Art. 33. In case of defamation, fraud, and physical
injuries, a civil action for damages, entirely separate
and distinct from the criminal action, may be
brought by the injured party. Such civil action shall
proceed independently of the criminal prosecution,
and shall require only a preponderance of evidence.
DEFAMATION

Cojuangco vs. CA (1991): Separate civil action may be

consolidated with the criminal action.
MVRS vs. Islamic Da'wah (2003): Defamation is that
which tends to injure reputation or diminish esteem,
respect, good will, or confidence of the plaintiff, or
excite derogatory feelings about him. It must be
personal. (What is definitive is not the level of hurt,
but the effect of the statement on the reputation or
standing of the person.)
Arafiles vs. Philippine Journalists (2004): In actions for
damages for libel, it is axiomatic that the published
work alleged to contain libelous material must be
examined and viewed as a whole.
The article must be construed in its entirety including
the headlines, as they may enlarge, explain, or
restrict or be enlarged, explained or strengthened or
restricted by the context. Whether or not it is
libelous, depends upon the scope, spirit and motive
of the publication taken in its entirety.
A publication claimed to be defamatory must be
read and construed in the sense in which the readers
to whom it is addressed would ordinarily understand
it.
DEFENSES:
(1) Absence of elements
(2) Privilege
FRAUD OR MISREPRESENTATION (FORMERLY DECEIT)
Salta vs. De Veyra (1982): Independent civil actions
are permitted to be filed separately regardless of the
result of the criminal action.
Samson vs. Daway (2004): Unfair competition under
the Intellectual Property Code and fraud under Art.
33 are independent actions. Art. 33 does not operate
as a prejudicial question to justify the suspension of
the criminal cases at bar.
SEDUCTION

Sangco: Seduction is sexual intercourse with an

unmarried woman of chaste character whose
consent was obtained through abuse of confidence
or through deceit.

Seduction under the RPC (criminal seduction) is

different from seduction under the NCC (civil
seduction, Art. 21)
(a) In criminal seduction, either qualified or simple,
the offended woman must be less than 18 years
of age.
(b) In civil seduction, the offended woman may be
over 18 years of age.
Tanjanco vs. CA (1966): The essential feature is
seduction, that in law is more than mere sexual
intercourse, or a breach of a promise of marriage; it
connotes essentially the idea of deceit, enticement,
superior power or abuse of confidence on the part of
the seducer to which the woman has yielded.
To constitute seduction there must in all cases be
some sufficient promise or inducement and the
woman must yield because of the promise or other
inducement. If she consents merely from carnal lust
and the intercourse is from mutual desire, there is no
seduction.
UNJUST DISMISSAL

The employers right to dismiss his employee differs

from, and should not be confused with the manner in
which the right is exercised. When the manner in
which the company exercised its right to dismiss was
abusive, oppressive or malicious, it is liable for
damages.
Quisaba vs. Sta. Ines-Melale Veneer & Plywood (1974):
Although the acts complained of seemingly appear
to constitute "matters involving employee-employer
relations" as Quisaba's dismissal was the severance
of a pre-existing employee-employer relation, his
complaint is grounded not on his dismissal per se as
in fact he does not ask for reinstatement or
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backwages, but on the manner of his dismissal and

the consequent effects of such dismissal.
The case at bar is intrinsically concerned with a civil
(not a labor) dispute; it has to do with an alleged
violation of Quisaba's rights as a member of society,
and does not involve an existing employee-employer
relation within the meaning of section 2(1) of
Presidential Decree No. 21. The complaint is thus
properly and exclusively cognizable by the regular
courts of justice, not by the National Labor Relations
Commission.
Note:
The foregoing decision thus states that where the
employee does not seek reinstatement or expressly
or impliedly accepts the employers right to
terminate the contract of employment but questions
the manner in which said right was exercised and
predicates thereon his claim for moral and
exemplary damages, the claim is one for tort under
the Civil Code and not one arising from employeremployee

relation under the Labor Code even if he

also demands in the action therefor payment of
termination pay which unquestionably derives from
their prior employer-employee relation.
INTERFERENCE WITH RELATIONS
An interference with the continuance of unimpaired
interests founded upon the relation in which the
plaintiff stands toward one or more third persons.
(Prosser and Keeton, p. 915)
KINDS

(1) Family relations

(2) Social relations
(3) Economic relations
(4) Political relations
FAMILY RELATIONS
The three causes of action enumerated below are
offenses against marital relations.
ALIENATION OF AFFECTION

This is a cause of action in favor of a husband against

one who wrongfully alienates the affection of his
wife, depriving him of his conjugal rights to her
consortium, that is, her society, affection, and
assistance.
Elements:
(1) Wrongful conduct of the defendant: intentional
and malicious enticing of a spouse away from
the other spouse
Note: Where the alienation or separation of the
spouses is caused by the plaintiffs own conduct
and not by reason of the wrongful conduct of the
defendant, there is no liability on the defendant.
However, if the defendant interferes and by his
wrongful conduct prevents a reconciliation
between the spouses, or destroys the possibility
thereof, the defendant is liable for alienation of
affection.
(2) Loss of affection or consortium
Note: Complete absence of affection between
the spouses is not a defense.
(3) Causal connection between such conduct and
loss
Tenchavez vs. Escao (1965): There is no evidence
that the parents of Vicenta, out of improper motives,
aided and abetted her original suit for annulment, or
her subsequent divorce; she appears to have acted
independently, and being of age, she was entitled to
judge what was best for her and ask that her
decisions be respected. Her parents, in so doing,
certainly cannot be charged with alienation of
affections in the absence of malice or unworthy
motives, which have not been shown, good faith
being always presumed until the contrary is proved.
LIABILITY OF PARENTS, GUARDIANS OR KIN
The law distinguishes between the right of a parent
to interest himself in the marital affairs of his child
and the absence of rights in a stranger to

intermeddle in such affairs. However, such

distinction between the liability of parents and that
of strangers is only in regard to what will justify
interference. A parent is liable for alienation of
affections resulting from his own malicious conduct,
as where he wrongfully entices his son or daughter to
leave his or her spouse, but he is not liable unless he
acts maliciously, without justification and from
unworthy motives. He is not liable where he acts and
advises his child in good faith with respect to his
child's marital relations in the interest of his child as
he sees it, the marriage of his child not terminating
his right and liberty to interest himself in, and be
extremely solicitous for, his child's welfare and
happiness even where his conduct and advice
suggest or result in the separation of the spouses or
the obtaining of a divorce or annulment, or where he
acts under mistake or misinformation, or where his
advice or interference are indiscreet or unfortunate,
although it has been held that the parent is liable for
consequences resulting from recklessness. He may in
good faith take his child into his home and afford
him or her protection and support, so long as he has
not maliciously enticed his child away, or does not
maliciously entice or cause him or her to stay away,
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from his or her spouse. This rule has more frequently

been applied in the case of advice given to a married
daughter, but it is equally applicable in the case of
advice given to a son.
LOSS OF CONSORTIUM

Lilius vs. Manila Railroad Company (1934): The

plaintiff Aleko E. Lilius also seeks to recover the sum
of P2,500 for the loss of what is called Anglo-Saxon
common law "consortium" of his wife, that is, "her
services, society and conjugal companionship", as a
result of personal injuries which she had received
from the accident now under consideration.
In the case of Goitia vs. Campos Rueda, this court,
interpreting the provisions of the Civil Marriage Law
of 1870, in force in these Islands with reference to the
mutual rights and obligations of the spouses,
contained in articles 44-48 thereof, said as follows:
The above quoted provisions of the Law of Civil
Marriage and the Civil Code fix the duties and
obligations of the spouses. The spouses must be
faithful to, assist, and support each other. The
husband must live with and protect his wife. The
wife must obey and live with her husband and
follow him when he changes his domicile or
residence, except when he removes to a foreign
country. . . .
Therefore, under the law and the doctrine of this
court, one of the husband's rights is to count on his
wife's assistance. This assistance comprises the

management of the home and the performance of

household duties, including the care and education
of the children and attention to the husband upon
whom primarily devolves the duty of supporting the
family of which he is the head. When the wife's
mission was circumscribed to the home, it was not
difficult to assume, by virtue of the marriage alone,
that she performed all the said tasks and her
physical incapacity always redounded to the
husband's prejudice inasmuch as it deprived him of
her assistance. However, nowadays when women, in
their desire to be more useful to society and to the
nation, are demanding greater civil rights and are
aspiring to become man's equal in all the activities of
life, commercial and industrial, professional and
political, many of them spending their time outside
the home, engaged in their businesses, industry,
profession and within a short time, in politics, and
entrusting the care of their home to a housekeeper,
and their children, if not to a nursemaid, to public or
private institutions which take charge of young
children while their mothers are at work, marriage
has ceased to create the presumption that a woman
complies with the duties to her husband and
children, which the law imposes upon her, and he
who seeks to collect indemnity for damages resulting
from deprivation of her domestic services must prove
such services.
Furthermore, inasmuch as a wife's domestic
assistance and conjugal companionship are purely
personal and voluntary acts which neither of the
spouses may be compelled to render, it is necessary
for the party claiming indemnity for the loss of such
services to prove that the person obliged to render
them had done so before he was injured and that he
would be willing to continue rendering them had he
not been prevented from so doing.
CRIMINAL CONVERSATION (ADULTERY)
Interference with the marital relations by committing
adultery with one of the spouses. This is obvious
enough in the case of rape but also applies where
the adulterous spouse consented to or initiated the
intercourse. (Prosser and Keeton, p. 917)
SOCIAL RELATIONS
MEDDLING WITH OR DISTURBING FAMILY RELATIONS

Art. 26. Every person shall respect the dignity,

personality, privacy and peace of mind of his
neighbors and other persons. The following and
similar acts, though they may not constitute a
criminal offense, shall produce a cause of action for
damages, prevention and other relief;
xxx
2) Meddling with or disturbing the private life or
family relations of another;
Developed as an offshoot of the action for enticing

away a servant and depriving the master of the

proprietary interest in [the servants] services until
there has been a gradual shift of emphasis away
from services and toward a recognition of more
intangible elements in the domestic relations, such
as companionship and affection. (Prosser and
Keeton, p. 916)
INTRIGUING TO CAUSE ANOTHER TO BE ALIENATED FROM
HIS FRIENDS

A person who committed affirmative acts intended to

alienate the existing friendship of one with his
friends is liable for damages. A man is a social being
and for being so, he needs friends to socialize with
and to depend upon in case of need. To alienate him
wrongfully or with malice from his friends is to cause
him suffering for which he is entitled to damages.
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ECONOMIC RELATIONS
INTERFERENCE WITH CONTRACTUAL RELATIONS

Art 1314. Any third person who induces another to

violate his contract shall be liable for damages to the
other contracting party.
Gilchrist vs. Cuddy (1915): Everyone has a right to
enjoy the fruits of his enterprise. He has no right to
be protected from competition, but he has the right
to be free from malicious and wanton interference. If
the injury is a result of competition, it is a case of
damnum absque injuria, unless superior right by
contract is interfered with.
Injunction is the proper remedy to prevent wrongful
interference with contracts by strangers, where other
legal remedies are insufficient and the resulting
injury is irreparable.
So Ping Bun vs. CA (1999): Bad faith/Malice is
required to make the defendant liable for DAMAGES
in cases of tortuous interference.
Elements of Interference
(1) Existence of a valid contract;
(2) Knowledge of the third person of the existence
of such contract; and
(3) Interference without legal justification or excuse.
Lagon vs. CA (2005): If there is no bad faith, there is
no tortious interference; Actual knowledge of the
contract is not required so long as there are facts
leading one to investigate.
Proper business interest provides a legal justification
to negate the presence of the third element.
UNFAIR COMPETITION

Art. 28. Unfair competition in agricultural,

commercial or industrial enterprises or in labor
through the use of force, intimidation, deceit,
machination or any other unjust, oppressive or
highhanded method shall give rise to a right of
action by the person who thereby suffers damage.
Free competition in agricultural, commercial or
industrial enterprises and in labor is essential in a

democracy and should be encouraged. Monopolies,

generally speaking, are prejudicial to public interest.
However, the right of free competition is not
unlimited.
Permissible competition
There is a privilege to interfere with prospects of
advantageous economic relations of others when:
(1) The defendants purpose is justifiable, and
(2) He employs no means which may be regarded as
unfair.
Prohibited competition
In order to qualify as unfair, it must have 2
characteristics:
(1) It must involve an injury to a trade or rival
(2) It must involve acts which are characterized as
contrary to good conscience, or shocking to
judicial sensibilities, or otherwise unlawful
Note:
Jarencio: Unfair competition dealt with in Art. 28 is
different from the unfair competition under Sec. 29
of RA 166. Unfair competition under Sec. 29 of Rep.
Act 166 consists in giving the same general
appearance to the goods manufactured or dealt in or
the services rendered by one person as the goods or
services of another who has already acquired a
public goodwill for such goods or services. Unfair
competition under Art. 28 of the Civil Code refers to
unfair competition in agricultural, commercial or
industrial enterprises or in labor through the use of
force, intimidation, deceit, machination or any other
unjust, oppressive or high- handed method. Unfair
competition under the Civil Code covers a broader
area than Rep. Act 166.
POLITICAL RELATIONS
VIOLATION OF RIGHT TO SUFFRAGE (NCC, ART. 32)
Art 32. Any public officer or employee, or any private
individual, who directly or indirectly obstructs,
defeats, violates or in any manner impedes or
impairs any of the following rights and liberties of
another person shall be liable to the latter for
damages:
(1) Freedom of religion
(2) Freedom of speech
(3) Freedom to write for the press or to maintain a
periodical publication
(4) Freedom from arbitrary or illegal detention
(5) Freedom of suffrage
(6) The right against deprivation of property without
due process of law
(7) The right to just compensation when property is
taken for public use
(8) The right to equal protection of the laws
(9) The right to be secure in ones person, house,
papers and effects against unreasonable
searches and seizures

(10) The liberty of abode and of changing the same

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(11) The right to privacy of communication and

correspondence
(12) The right to become a member of associations
and societies for purposes not contrary to law
(13) The right to take part in a peaceable assembly
and petition the government for redress of
grievances
(14) The right to be free from involuntary servitude in
any form
(15) The right of the accused against excessive bail
(16) The right of the accused to be heard by himself
and counsel, to be informed of the nature and
the cause of the accusation against him, to have
a speedy and public trial, to meet the witnesses
face to face, to have compulsory process to
secure the attendance of witnesses on is behalf;
(17) Freedom form being compelled to be a witness
against ones self, or from being forced to
confess his guilt, or from being induced by a
promise of immunity or reward to make such
confession, except when the person confessing
becomes a State witness.
(18) Freedom from excessive fines, or cruel and
unusual punishment, unless the same is
imposed or inflicted in accordance with a statute
which has not been judicially declared
unconstitutional;
(19) Freedom of access to the courts
In any of the cases referred to in this article, whether
or not the defendants act or omission constitutes a
criminal offense, the aggrieved party has a right to
commence an entirely separate and distinct civil
action for damages, and for other relief. Such civil
action shall proceed independently of any criminal
prosecution (if the latter be instituted) and may be
proved by a preponderance of evidence.
The indemnity shall include moral damages.
Exemplary damages may also be adjudicated.
The responsibility herein set forth is not demandable
from a judge unless his act or omission constitutes a
violation of the Penal code or any other penal
statute.
VIOLATION OF OTHER POLITICAL RIGHTS (FREEDOM OF
SPEECH, PRESS, ASSEMBLY AND PETITION, ETC.)
Jarencio: Article 32 of the Civil Code holds any public
officer, employee or private individual civilly liable for
the violation of civil liberties, political liberties and
other basic rights under the Constitution. The
aggrieved party may recover actual, moral and
exemplary damages and other relief. The civil action
is separate and distinct and shall proceed
independently of a criminal prosecution if one is
instituted. Only a preponderance of evidence is

required. If the violation of the civil or political rights

constitutes a crime and a criminal action is instituted
the civil action is also deemed instituted with the
criminal action unless the same is reserved.
Cojuangco vs. CA (1999): The purpose of article 32 is
to remind us that basic rights are immutable. Thus,
absence of bad faith or malice is not a defense.
Vinzons-Chato vs. Fortune (2007): A public officer
may be sued under Art. 32 even if his acts were not
so tainted with malice, as long as there is a violation
of a constitutional right. Its precise object is to put an
end to official abuse, done on the plea of good faith.

Negligence

Art. 1173. The fault or negligence of the obligor

consists in the omission of that diligence which is
required by the nature of the obligation and
corresponds with the circumstances of the persons,
of the time and of the place. When negligence shows
bad faith, the provisions of Articles 1171 and 2201,
paragraph 2, shall apply.
If the law or contract does not state the diligence
which is to be observed in the performance, that
which is expected of a good father of a family shall
be required.
ELEMENTS
(1) Legal duty
(2) Breach
(3) Causation
(4) Damages
Layugan vs. IAC (1988): Negligence is the omission to
do something which a reasonable man, guided by
those considerations which ordinarily regulate the
conduct of human affairs, would do, or the doing of
something which a prudent and reasonable man
would not do.
TEST OF NEGLIGENCE
Philippine National Railways vs. Brunty (2006): Did
defendant, in doing the alleged negligent act, use
that reasonable care and caution which an ordinarily
prudent person would have used in the same
situation? If not, the person is guilty of negligence.
The law, in effect, adopts the standard supposed to
be supplied by the imaginary conduct of the discreet
pater familias of the Roman law.
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GOOD FATHER OF A FAMILY (BONUS PATER

FAMILIAS)
A standard man does not mean an ideal or perfect
man, but an ordinary member of the community. He
is usually spoken of as an ordinarily reasonable,
careful, and prudent man.
WHAT CONSTITUTES THE CONDUCT OF A PRUDENT MAN IN
A GIVEN SITUATION?

Picart vs. Smith (1918): Conduct determined in the

light of human experience and in view of the facts

involved in the particular case. Abstract speculations
cannot be of much value here; instead, reasonable
men govern their conduct by the circumstances
which are known before them. They are not
supposed to be omniscient of the future.
STANDARD OF CARE
Picart vs. Smith (1918): Test: Did the defendant in
doing the alleged negligent act use that reasonable
care and caution which an ordinarily prudent man
would have used in the same situation? If not, then he
is negligent. Negligence in a given case is not
determined by reference to the personal judgment of
the actor in the situation before him, but is
determined in the light of human experience and the
facts involved in the particular case.
Conduct is said to be negligent when a prudent man
in the position of the tortfeasor would have foreseen
that an effect harmful to another was sufficiently
probable to warrant his foregoing the conduct or
guarding against its consequences.
Note:
Only the KIND of injury needs to be foreseen, NOT
the actual specific injury.
STANDARD OF CARE REQUIRED OF BANKS

Philippine Bank of Commerce vs. CA (1997): In the

case of banks, however, the degree of diligence
required is more than that of a good father of a
family. Considering the fiduciary nature of their
relationship with their depositors, banks are duty
bound to treat the accounts of their clients with the
highest degree of care.
Simex International (Manila), Inc. v. CA: In every case,
the depositor expects the bank to treat his account
with the utmost fidelity, whether such account
consists only of a few hundred pesos or of millions.
xxx A blunder on the part of the bank, such as the
failure to duly credit him his deposits as soon as they
are made, can cause the depositor not a little
embarrassment if not financial loss and perhaps
even civil and criminal litigation.
The point is that as a business affected with public
interest and because of the nature of its functions,
the bank is under obligation to treat the accounts of
its depositors with meticulous care, always having in
mind the fiduciary nature of their relationship.
STANDARD OF CARE OF CHILDREN

Taylor vs. Manila Railroad (1910): Children must be

expected to act upon childlike instincts and impulses
and others chargeable with a duty of care and
caution toward them must take precautions
accordingly. If they leave exposed to the observation
of children anything which would be tempting to
them, and which they in their immature judgment
might naturally suppose they were at liberty to play
with, they should expect that liberty to be taken. (But

the child in this case was still negligent because of

his experience).
Jarco v. CA (1999): The rule, therefore, is that a child
under nine years of age must be conclusively
presumed incapable of contributory negligence as a
matter of law. The presumption of lack of
discernment or incapacity for negligence in the case
of a child over nine but under fifteen years of age is a
rebuttable one.
Ylarde vs. Aquino (1988): The degree of care required
to be exercised must vary with the capacity of the
person endangered to care for himself. A minor should
not be held to the same degree of care as an adult,
but his conduct should be judged according to the
average conduct of persons of his age and
experience: that degree of care ordinarily exercised
by children of the same age, capacity, discretion,
knowledge and experience under the same or similar
circumstances.
STANDARD OF CARE OF EXPERTS/PROFESSIONALS
Culion vs. Philippine (1930): When a person holds
himself out as being competent to do things
requiring professional skill, he will be held liable for
negligence if he fails to exhibit the care and skill of
one ordinarily skilled in the particular work which he
attempts to do.
Cruz vs. CA (1997): Whether or not a physician has
committed an "inexcusable lack of precaution" in the
treatment of his patient is to be determined
according to the standard of care observed by other
members of the profession in good standing under
similar circumstances bearing in mind the advanced
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state of the profession at the time of treatment or

the present state of medical science.
IN CASE OF INSANE PERSONS

Art. 2180. Guardians are liable for damages caused

by the minors or incapacitated persons who are
under their authority and live in their company
Art. 2182. If the minor or insane person causing
damage has no parents or guardian, the minor or
insane person shall be answerable with his own
property in an action against him where a guardian
ad litem shall be appointed.
US vs. Baggay (1911): A lunatic or insane person who,
in spite of his irresponsibility on account of the
deplorable condition of his deranged mind, is still
reasonably and justly liable with his property for the
consequences of his acts.
EMERGENCY RULE OR SUDDEN PERIL DOCTRINE

Valenzuela vs. CA (1996): An individual, who suddenly

finds himself in a situation of danger and is required
to act without much time to consider the best means
that may be adopted to avoid the impending danger,
is not guilty of negligence if he fails to undertake

what subsequently and upon reflection may appear

to be a better solution, unless the emergency was
brought by his own negligence.
UNREASONABLE RISK OR HARM

Art 1711. Owners of enterprises and other employers

are obliged to pay compensation for the death of or
injuries to their laborers, workmen, mechanics or
other employees even though the event may have
been purely accidental or entirely due to fortuitous
cause, if the death or personal injury arose out of and
in the course of employment. The employer is also
liable for compensation if the employee contracts
any illness or disease caused by such employment or
as a result of the nature of the employment. If the
mishap was due to the employees own notorious
negligence, or voluntary act, or drunkenness, the
employer shall not be liable for compensation.
When the employees lack of due care contributed to
his death or injury, the compensation shall be
equitably reduced
Art. 1712. If the death or injury is due to the
negligence of a fellow-worker, the latter and the
employer shall be solidarily liable for compensation.
If a fellow-workers intentional or malicious act is the
only cause of the death or injury, the employer shall
not be answerable, unless it should be shown that
the latter did not exercise due diligence in the
selection or supervision of the plaintiffs fellowworker.
Amedo vs. Rio (1954): By jumping into the sea, the
employee failed to exercise even slight care and
diligence and displayed a reckless disregard of the
safety of his person. His death was caused by his
notorious negligence. Notorious negligence has
been held to be tantamount to gross negligence
which is want of even slight care and diligence.
EVIDENCE
QUANTUM OF PROOF IN QUASI-DELICT VS. QUANTUM OF
PROOF IN BREACH OF CONTRACT

Calalas vs. CA: In quasi-delict, the negligence or fault

should be clearly established because it is the basis
of action, whereas in breach of contract, the action
can be prosecuted merely by proving the existence of
a contract and the fact that the obligor, in this case a
common carrier, failed to transport his passenger
safely to his destination.
PRESUMPTION OF NEGLIGENCE
Art. 2184. In motor vehicle mishaps, the owner is
solidarily liable with his driver, if the former, who was
in the vehicle, could have, by the use of due
diligence, prevented the misfortune. It is disputable
presumed that the driver was negligent, if he had
been found guilty of reckless driving or violating
traffic regulations at least twice within the next
preceding two months.
Art. 2185. Unless there is proof to the contrary, it is
presumed that a person driving a motor vehicle has

been negligent if at the time of the mishap, he was

violating any traffic regulation.
Art. 2188. There is prima facie presumption of
negligence if the death or injury results from his
possession of dangerous weapons or substances,
such as firearms and poison, except when the use or
possession thereof is indispensable in his occupation
or business.
Art. 1735. In all cases other than those mentioned in
Nos. 1, 2, 3, 4, and 5 of the preceding article
(calamity, act of public enemy in war, act of owner of
the goods, character of the goods, order of
competent public authority), if the goods are lost
destroyed or deteriorated, common carriers are
presumed to have been at fault or to have acted
negligently, unless they prove that they observed
extraordinary diligence as required under Art. 1733.
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PRESUMED NEGLIGENCE OR NEGLIGENCE PER SE

Teague vs. Fernandez (1973): Violation of a statute or

ordinance constitutes negligence as a matter of law
or negligence per se because non-observance of
what the law provides as a suitable precaution is
failure to observe that care which an ordinarily
prudent man would observe.
When the standard of care is fixed by law, failure
conform to such standard is negligence, negligence
per se or negligence in and of itself, in the absence of
a legal excuse.
RES IPSA LOQUITUR

The doctrine of res ipsa loquitur (the thing speaks

for itself) is a rule of evidence (not of substantive
law) peculiar to the law of negligence.
3 conditions for applicability:
F.F. Cruz vs. CA (1988): Res ipsa loquitur is applicable
when:
(1) The thing causing the injury is under the control
of the defendant or his servant;
(2) In the ordinary cause of things, the accident does
not happen if those who have control used proper
care;
(3) In the absence of explanation from the
defendant, a presumption of negligence results.
Layugan vs. IAC 1988): Where the thing which causes
injury is shown to be under the management of the
defendant, and the accident is such as in the
ordinary course of things does not happen if those
who have the management use proper care, it
affords reasonable evidence, in the absence of an
explanation by the defendant, that the accident
arose from want of care.
Ramos vs. CA (1999): The injury itself, taken together
with the circumstances, raises the presumption of
negligence that the defendant must meet with an
explanation.

Elements
(1) The accident is such that it would not have
happened in the ordinary course of events
without the negligence of someone;
(2) The defendant exercises control and
management.
(3) There is no contributory negligence on the part of
the plaintiff.
DM Consunji vs. CA (2001): The res ipsa loquitur
doctrine is based in part upon the theory that the
defendant in charge of the instrumentality which
causes the injury either knows the cause of the
accident or has the best opportunity of ascertaining
it and that the plaintiff has no such knowledge, and
therefore is compelled to allege negligence in
general terms and to rely upon the proof of the
happening of the accident in order to establish
negligence.
Note: For the res ipsa loquitur doctrine to apply, it
must appear that the injured party had no
knowledge as to the cause of the accident, or that
the party to be charged with negligence has superior
knowledge or opportunity for explanation of the
accident.
DEFENSES
DUE DILIGENCE

Art. 2180. The obligation imposed by Article 2176 is

demandable not only for ones own acts or
omissions, but also for those of persons for whom
one is responsible.
xxx
Par. 8. The responsibility treated of in this article
shall cease when the persons herein mentioned
prove that they observed all the diligence of a good
father of a family to prevent damage.
Ramos vs. PEPSI (1967): The presumption of
negligence on the part of the master or employer,
either in the selection of servant/employee or in the
supervision, when an injury is caused by the
negligence of a servant/employee may be rebutted if
the employer shows to the satisfaction of the court
that in the selection and supervision, he has
exercised the care and diligence of a good father of a
family
Metro Manila vs. CA (1993): The defense of due
diligence is plausible when defendant has presented
enough evidence to overcome the presumption of
negligence. It is not enough that it is alleged.
ACTS OF PUBLIC OFFICERS

Vinzons-Chato vs. Fortune (2008): When what is

involved is a duty owing to the public in general, an
individual cannot have a cause of action against the
public officer although he may have been injured by
the action or inaction of the officer, except when the
individual suffers a particular or special injury.
ACCIDENT OR FORTUITOUS EVENT

Art. 1174. Except in cases expressly specified by the

law, or when it is otherwise declared by stipulation,
or when the nature of the obligation requires the
assumption of risk, no person shall be seen
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responsible for those events which, could not

foreseen, or which, though foreseen, were inevitable.
Elements
Juntilla vs. Fontanar (1985): The elements of caso
fortuito are:
(1) The cause of the unforeseen and unexpected
occurrence, or of the failure of the debtor to
comply with his obligation, must be independent
of the human will;
(2) It must be impossible to foresee the event or if it
can be foreseen, it must be impossible to avoid;
(3) The occurrence must be such as to render it
impossible for the debtor to fulfill his obligation
in a normal manner; and
(4) The obligor must be free from any participation in
the aggravation of the injury resulting to the
creditor.
Hernandez vs. COA (1984): The robbery that
happened to him cannot be said to be the result of
his imprudence and negligence. This was
undoubtedly a fortuitous event covered by the said
provisions, something that could not have been
reasonably foreseen although it could have
happened.
DAMNUM ABSQUE INJURIA

Custodio vs. CA (1996): Right to recover damages

does not arise from the mere fact that the plaintiff
suffered losses. To warrant the recovery of damages,
there must be both a right of action for a legal wrong
inflicted by the defendant, and damage resulting to
the plaintiff therefrom. Wrong without damage, or
damage without wrong, does not constitute a cause
of action, since damages are merely part of the
remedy allowed for the injury caused by a breach or
wrong.
Injury Damage Damages
Illegal
invasion of a
legal right
Loss, hurt, harm
resulting from
the injury
Recompense or
compensation
awarded
Damnum absque injuria. There can be damage
without injury in those instances in which the loss or
harm was not the result of a violation of a legal duty.
In order that the law will give redress for an act
causing damage, that act must be not only hurtful,

but wrongful. There must be damnum et injuria. If,

as may happen in many cases, a person sustains
actual damage, that is, harm or loss to his person or
property, without sustaining any legal injury, that is,
an act or omission which the law does not deem an
injury, the damage is regarded as damnum absque
injuria.
AUTHORITY OF LAW

Art. 5. Acts executed against the provisions of

mandatory or prohibitory laws shall be void, except
when the law itself authorizes their validity.
Art. 11. (RPC) The following do not incur any criminal
liability:
(5) Any person who acts in the fulfillment of a duty
or in the lawful exercise of a right or office
(8) Any person who acts in obedience to an order
issued by a superior for some lawful purpose
ASSUMPTION OF RISK (VOLENTI NON FIT INJURA)
General rule:
One who voluntarily assumed the risk of injury from a
known danger is debarred from recovery. A plaintiff
who, by his conduct, brought himself within the
operation of the maxim, volenti non fit injuria (that
to which a person assents is not presumed in law an
injury), cannot recover on the basis of the
defendants negligence.
One who knows, appreciates, and deliberately
exposes himself to a danger assumes the risk
thereof.
Where the defense of assumption of risk is based on
this principle, it negates negligence or liability on the
part of the defendant, even though his conduct
would otherwise have constituted actionable
negligence, and without regard to the fact that the
plaintiff may have acted with due care.
The defense bars recovery without regard to whether
the plaintiffs conduct was reasonable, because, in
theory, the plaintiffs acceptance of the risk has
wiped out the defendants duty, and as to the
plaintiff the defendants negligence is not a legal
wrong.
Afialda vs. Hisole (1958): It is the caretaker's business
to try to prevent the animal from causing injury or
damage to anyone, including himself. It was a risk he
voluntarily assumed.
Requisites
(1) That the plaintiff had actual knowledge of the
danger;
(2) That he understood and appreciated the risk from
the danger
(3) That he voluntarily exposed himself to such risk
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Exception:
Ilocos Norte vs. CA (1989): A person is excused from
the force of the rule (volenti non fit injuria), that

when he voluntarily assents to a known danger he

must abide by the consequences, if an emergency is
found to exist or if the life or property of another is in
peril or when he seeks to rescue his endangered
property.
LAST CLEAR CHANCE

The doctrine is also known as:

(1) The doctrine of discovered peril;
(2) The doctrine of supervening negligence;
(3) Humanitarian doctrine
A negligent defendant is liable to a negligent
plaintiff, or even to a plaintiff who has been grossly
negligent in placing himself in peril, if the defendant,
aware of the plaintiffs peril, had in fact a later
opportunity than the plaintiff to avoid the accident.
Picart vs. Smith (1918): The person who has the last
fair chance to avoid the impending harm and fails to
do so is chargeable with the consequences, without
reference to the prior negligence of the other party.
Bustamante vs. CA (1991): Negligence of the plaintiff
does not preclude a recovery for the negligence of
the defendant where it appears that the defendant,
by exercising reasonable care and prudence, might
have avoided injurious consequences to the plaintiff
notwithstanding the plaintiffs negligence.
Consolidated Bank vs. CA (2003): This is a case of
culpa contractual where neither contributory
negligence nor last clear chance will exonerate
defendant from liability. (NOTE: This means that
Last Clear Chance is not a defense in culpa
contractual.)
PRESCRIPTION NCC, ART. 1144, 1146, AND 1150
Art. 1144. The following actions must be brought
within ten years from the time the right of action
accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
Art. 1146. The following actions must be instituted
within four years:
(1) Upon an injury to the rights of the plaintiff;
(2) Upon a quasi-delict;
However, when the action arises from or out of any
act, activity, or conduct of any public officer involving
the exercise of powers or authority arising from
Martial Law including the arrest, detention and/or
trial of the plaintiff, the same must be brought within
one (1) year.
Art. 1150. The time for prescription for all kinds of
actions, when there is no special provision which
ordains otherwise, shall be counted from the day
they may be brought.
Prescription periods:
(a) years for QD
(b) 1 year for defamation

Kramer vs. CA (1989): It is clear that the prescriptive

period must be counted from the time of the
commission of an act or omission violative of the
right of the plaintiff, which is the time when the
cause of action arises.
Allied Banking vs. CA (1989): Relations Back Doctrine
(footnote 17 of Allied Banking case): That principle of
law by which an act done at one time is considered
by a fiction of law to have been done at some
antecedent period.
WAIVER

Art. 6. Rights may be waived, unless the waiver is

contrary to law, public order, public policy, morals, or
good customs or prejudicial to a third person with a
right recognized by law.
Art. 1171. Responsibility arising from fraud is
demandable in all obligations. Any waiver of an
action for future fraud is void.
DOUBLE RECOVERY NCC ART. 2177
Art. 2177. Responsibility for fault or negligence under
the preceding article is entirely separate and distinct
from the civil liability arising from negligence under
the Penal Code. But the plaintiff cannot recover
damages twice for the same act or omission of the
defendant.
Art. 100 (RPC). Civil liability of a person guilty of
felony. - Every person criminally liable for a felony is
also civilly liable.
Art. 2177 distinguishes 2 kinds of negligence:
(1) Civil and
(2) Criminal.
The same negligence causing damage may produce
liability arising from crime, if the act or omission is
punished by the RPC, or may create an action for
quasi-delict under the NCC.
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ACTIONS AVAILABLE TO VICTIMS OF NEGLIGENCE

(1) An action to enforce the civil liability arising from

culpa criminal under Art. 100 of the RPC
(2) An action for quasi-delict under Art. 2176-2194 of
the NCC.
The only limitation is that the injured party cannot
recover twice for the same act or omission.
EFFECT OF ACQUITTAL OF THE ACCUSED ON HIS CIVIL
LIABILITY

Art. 29. When the accused in a criminal prosecution

is acquitted on the ground that his guilt has not been
proved beyond reasonable doubt, a civil action for
damages for the same act or omission may be
instituted. Such action requires only a
preponderance of evidence. Upon motion of the
defendant, the court may require the plaintiff to file a
bond to answer for damages in case the complaint
should be found to be malicious.
The acquittal of the accused in the criminal case will
not necessarily exonerate him from civil liability.

The judgment of acquittal does not necessarily

extinguish the civil liability of the accused EXCEPT:
(1) When it declares that the facts from which the
civil liability might arise did not exist;
(2) When it declares that the accused is not the
author of the crime;
(3) When the judgment expressly declares that the
liability is only civil in nature;
(4) Where the civil liability is not derived or based on
the criminal act of which the accused was
acquitted;
(5) Where the acquittal is based on reasonable
doubt;
(6) Where the civil action has prescribed.
NO RESERVATION IS REQUIRED IN THE CRIMINAL CASE FOR
THE FILING OF CIVIL ACTION ARISING FROM QUASI -DELICT

Rule 111, Sec. 3, ROC. When civil action may

proceeded independently. In the cases provided
for in Articles 32, 33, 34 and 2176 of the Civil Code of
the Philippines, the independent civil action may be
brought by the offended party. It shall proceed
independently of the criminal action and shall
require only a preponderance of evidence. In no case,
however, may the offended party recover damages
twice for the same act or omission charged in the
criminal action.
Question
As a result of a collision between a taxicab owned by
A and another taxicab owned by B, X, a passenger of
the first taxicab, was seriously injured. X later filed a
criminal action against both drivers.
(a) Is it necessary for X to reserve his right to institute
a civil action for damages against both taxicab
owners before he can file a civil action for damages
against them? Why?
(b) May both taxicab owners raise the defense of due
diligence in the selection and supervision of their
drivers to be absolved from liability for damages to
X? Reason.
Suggested Answer:
It depends. If the separate civil action is to recover
damages arising from the criminal act, reservation is
necessary. If the civil action against the taxicab
owners is based on culpa contractual or on quasidelict,
there is no need for reservation.
It depends. If the civil action is based on quasi-delict,
the taxicab owners may raise the defense of
diligence of a good father of a family in the selection
and supervision of the driver; if the action against
them is based on culpa contractual or civil liability
arising from a crime, they cannot raise the defense.
Alternative Answer:
No such reservation is necessary. Under Section 1
Rule 111 of the 2000 Rules on Criminal Procedure,
what is deemed instituted with the criminal action

is only the action to recover civil liability arising from

the crime or ex delicto. All the other civil actions
under Articles 32, 33, 34, 2176 of the New Civil Code
are no longer deemed instituted, and may be filed
separately and prosecuted independently even
without any reservation in the criminal action
(Section 3, Rule 111, 2000 Rules on Criminal
Procedure). The failure to make a reservation of the
criminal action is not a waiver of the right to file a
separate and independent civil action based on
these articles of the New Civil Code (Casupanan vs.
Laroya, G.R. No. 145391, August 26, 2002)

Special Liability in Particular

Cases

In some cases tort law imposes liability on

defendants who are neither negligent nor guilty of
intentional wrongdoing. Known as Strict Liability, or
liability without fault, this branch of torts seeks to
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regulate those activities that are useful and

necessary but that create abnormally dangerous
risks to society.
PRODUCTS LIABILITY
Art. 2187. Manufacturers and processors of
foodstuffs, drinks, toilet articles and similar goods
shall be liable for death or injuries caused by any
noxious or harmful substances used, although no
contractual relation exists between them and the
consumers.
Under the foregoing provision, liability is not made to
depend upon fault or negligence of the
manufacturer or processor. The provision likewise
dispensed with any contractual relation between the
manufacturer and the consumer, thereby clearly
implying that liability is imposed by law as a matter
of PUBLIC POLICY.
Proof of negligence under this provision is not
necessary; as such, traditional contract and warranty
defenses as (1) lack of privity; (2) lack of reliance on a
warranty; (3) lack of notice to the defendant of the
breach of warranty; and (4) disclaimer of implied
warranties are INAPPLICABLE.
REQUISITES OF LIABILITY

(1) Defendant is a manufacturer or possessor of

foodstuff, drinks, toilet articles and similar
goods;
(2) He used noxious or harmful substances in the
manufacture or processing of the foodstuff,
drinks or toilet articles consumed or used by the
plaintiff;
(3) Plaintiffs death or injury was caused by the
product so consumed or used; and
(4) The damages sustained and claimed by the
plaintiff and the amount thereof.

BURDEN OF PROOF

The burden of proof that the product was in a

defective condition at the time it left the hands of the
manufacturer and particular seller is upon the
INJURED PLAINTIFF.
WHO MAY RECOVER

Although the article used the term consumer, such

term includes a user and purchaser of the
injuriously defective food product or toilet article. The
person who may recover NEED NOT BE THE
PURCHASER of the foodstuff or toilet article.
CONSUMER ACT RA 7394, SECS. 92-107 (CH. 1)
Consumer Act Provisions
Article 4. Definition of Terms.
(n) "Consumer" means a natural person who is a
purchaser, lessee, recipient or prospective purchaser,
lessor or recipient of consumer products, services or
credit.
(as) "Manufacturer" means any person who
manufactures, assembles or processes consumer
products, except that if the goods are manufactured,
assembled or processed for another person who
attaches his own brand name to the consumer
products, the latter shall be deemed the
manufacturer. In case of imported products, the
manufacturer's representatives or, in his absence, the
importer, shall be deemed the manufacturer.
Article 92. Exemptions. If the concerned
department finds that for good or sufficient reasons,
full compliance with the labeling requirements
otherwise applicable under this Act is impracticable
or is not necessary for the adequate protection of
public health and safety, it shall promulgate
regulations exempting such substances from these
requirements to the extent it deems consistent with
the objective of adequately safeguarding public
health and safety, and any hazardous substance
which does not bear a label in accordance with such
regulations shall be deemed mislabeled hazardous
substance.
Article 93. Grounds for Seizure and Condemnation of
Mislabeled Hazardous Substances.
(a) Any mislabeled hazardous substance when
introduced into commerce or while held for sale
shall be liable to be proceeded against and
condemned upon order of the concerned
department in accordance with existing
procedure for seizure and condemnation of
articles in commerce: Provided, That this Article
shall not apply to a hazardous substance
intended for export to any foreign country if:
(1) it is in a package labeled in accordance with
the specifications of the foreign purchaser;
(2) it is labeled in accordance with the laws of
the foreign country;
(3) it is labeled on the outside of the shipping

package to show that it is intended for

export; and
(4) it is so exported,
(b) any hazardous substance condemned under this
Article shall after entry of order of condemnation
be disposed of by destruction or sale as the
concerned department may direct, and the
proceeds thereof, if sold, less the legal cost and
charges, shall be paid into the treasury of the
Philippines; but such hazardous substance shall
not be sold under any order which is contrary to
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the provisions of this Act; Provided, That, after

entry of the order and upon the payment of the
costs of such proceedings and the execution of a
good and sufficient bond conditioned that such
hazardous substance shall not be sold or
disposed of contrary to the provisions of this Act,
the concerned department may direct that such
hazardous substance be delivered to or retained
by the owner thereof for destruction or for
alteration to comply with the provisions of this
Act under the supervision of an officer or
employee duly designated by the concerned
department. The expenses for such supervision
shall be paid by the person obtaining release of
the hazardous substance under bond.
(c) all expenses in connection with the destruction
provided for in paragraphs (a) and (b) of this
Article and all expenses in connection with the
storage and labor with respect to such
hazardous substance shall be paid by the owner
or consignee, and default in such payment shall
constitute a lien against any importation by such
owner or consignee.
Article 94. Labeling Requirements of Cigarettes. All
cigarettes for sale or distribution within the country
shall be contained in a package which shall bear the
following statement or its equivalent in Filipino:
"Warning" Cigarette Smoking is Dangerous to Your
Health". Such statement shall be located in
conspicuous place on every cigarette package and
shall appear in conspicuous and legible type in
contrast by typography, layout or color with other
printed matter on the package. Any advertisement of
cigarette shall contain the name warning as
indicated in the label.
Article 95. Penalties.
(a) Any person who shall violate the provisions of
Title III, Chapter IV of this Act, or its
implementing rules and regulations, except
Articles 81 to 83 of the same Chapter, shall be
subject to a fine of not less than Five hundred
pesos (P500.00) but not more than Twenty
thousand pesos (P20,000.00) or imprisonment

of not less than three (3) months but not more

than two (2) years or both, at the discretion of
the court: Provided, That, if the consumer
product is one which is not a food, cosmetic,
drug, device or hazardous substance, the
penalty shall be a fine of not less than Two
hundred pesos (P200.00) but not more than
Five thousand pesos (P5,000.00) or
imprisonment of not less than one (1) month but
not more than one (1) year or both, at the
discretion of the court.
(b) Any person who violates the provisions of Article
81 to 83 for the first time shall be subject to a
fine of not less than Two hundred pesos
(P200.00) but not more than Five thousand
pesos (P5,000.00) or by imprisonment of not
less than one (1) month but not more than six (6)
months or both, at the discretion of the court. A
second conviction under this paragraph shall
also carry with it the penalty of revocation of
business permit and license.
Article 96. Implementing Agency. The Department
of Trade and Industry shall enforce the provisions of
this Chapter and its implementing rules and
regulations.
Article 97. Liability for the Defective Products. Any
Filipino or foreign manufacturer, producer, and any
importer, shall be liable for redress, independently of
fault, for damages caused to consumers by defects
resulting from design, manufacture, construction,
assembly and erection, formulas and handling and
making up, presentation or packing of their products,
as well as for the insufficient or inadequate
information on the use and hazards thereof.
A product is defective when it does not offer the
safety rightfully expected of it, taking relevant
circumstances into consideration, including but not
limited to:
(a) presentation of product
(b) use and hazards reasonably expected of it;
(c) the time it was put into circulation.
A product is not considered defective because
another better quality product has been placed in
the market. The manufacturer, builder, producer or
importer shall not be held liable when it evidences:
(a) that it did not place the product on the market;
(b) that although it did place the product on the
market such product has no defect;
(c) that the consumer or a third party is solely at
fault.
Article 98. Liability of Tradesman or Seller. The
tradesman/seller is likewise liable, pursuant to the
preceding article when:
(a) it is not possible to identify the manufacturer,
builder, producer or importer;

(b) the product is supplied, without clear

identification of the manufacturer, producer,
builder or importer;
(c) he does not adequately preserve perishable
goods. The party making payment to the
damaged party may exercise the right to recover
a part of the whole of the payment made
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against the other responsible parties, in

accordance with their part or responsibility in the
cause of the damage effected.
Article 99. Liability for Defective Services. The
service supplier is liable for redress, independently of
fault, for damages caused to consumers by defects
relating to the rendering of the services, as well as
for insufficient or inadequate information on the
fruition and hazards thereof.
The service is defective when it does not provide the
safety the consumer may rightfully expect of it,
taking the relevant circumstances into consideration,
including but not limited to:
(a) the manner in which it is provided;
(b) the result of hazards which may reasonably be
expected of it;
(c) the time when it was provided.
A service is not considered defective because of the
use or introduction of new techniques.
The supplier of the services shall not be held liable
when it is proven:
(a) that there is no defect in the service rendered;
(b) that the consumer or third party is solely at
fault.
Article 100. Liability for Product and Service
Imperfection. The suppliers of durable or
nondurable consumer products are jointly liable for
imperfections in quality that render the products
unfit or inadequate for consumption for which they
are designed or decrease their value, and for those
resulting from inconsistency with the information
provided on the container, packaging, labels or
publicity messages/advertisement, with due regard
to the variations resulting from their nature, the
consumer being able to demand replacement to the
imperfect parts.
If the imperfection is not corrected within thirty (30)
days, the consumer may alternatively demand at his
option:
a) the replacement of the product by another of
the same kind, in a perfect state of use;
b) the immediate reimbursement of the amount
paid, with monetary updating, without prejudice
to any losses and damages;
c) a proportionate price reduction.
The parties may agree to reduce or increase the term
specified in the immediately preceding paragraph;

but such shall not be less than seven (7) nor more
than one hundred and eighty (180) days.
The consumer may make immediate use of the
alternatives under the second paragraph of this
Article when by virtue of the extent of the
imperfection, the replacement of the imperfect parts
may jeopardize the product quality or characteristics,
thus decreasing its value.
If the consumer opts for the alternative under subparagraph
(a) of the second paragraph of this Article,
and replacement of the product is not possible, it
may be replaced by another of a different kind, mark
or model: Provided, That any difference in price may
result thereof shall be supplemented or reimbursed
by the party which caused the damage, without
prejudice to the provisions of the second, third and
fourth paragraphs of this Article.
Article 101. Liability for Product Quantity
Imperfection. Suppliers are jointly liable for
imperfections in the quantity of the product when, in
due regard for variations inherent thereto, their net
content is less than that indicated on the container,
packaging, labeling or advertisement, the consumer
having powers to demand, alternatively, at his own
option:
a) the proportionate price
b) the supplementing of weight or measure
differential;
c) the replacement of the product by another of
the same kind, mark or model, without said
imperfections;
d) the immediate reimbursement of the amount
paid, with monetary updating without prejudice
to losses and damages if any.
The provisions of the fifth paragraph of Article 99
shall apply to this Article.
The immediate supplier shall be liable if the
instrument used for weighing or measuring is not
gauged in accordance with official standards.
Article 102. Liability for Service Quality Imperfection.
The service supplier is liable for any quality
imperfections that render the services improper for
consumption or decrease their value, and for those
resulting from inconsistency with the information
contained in the offer or advertisement, the
consumer being entitled to demand alternatively at
his option:
a) the performance of the services, without any
additional cost and when applicable;
b) the immediate reimbursement of the amount
paid, with monetary updating without prejudice
to losses and damages, if any;
c) a proportionate price reduction.
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Reperformance of services may be entrusted to duly

qualified third parties, at the supplier's risk and cost.

Improper services are those which prove to be
inadequate for purposes reasonably expected of
them and those that fail to meet the provisions of
this Act regulating service rendering.
Article 103. Repair Service Obligation. When
services are provided for the repair of any product,
the supplier shall be considered implicitly bound to
use adequate, new, original replacement parts, or
those that maintain the manufacturer's technical
specifications unless, otherwise authorized, as
regards to the latter by the consumer.
Article 104. Ignorance of Quality Imperfection. The
supplier's ignorance of the quality imperfections due
to inadequacy of the products and services does not
exempt him from any liability.
Article 105. Legal Guarantee of Adequacy. The
legal guarantee of product or service adequacy does
not require an express instrument or contractual
exoneration of the supplier being forbidden.
Article 106. Prohibition in Contractual Stipulation.
The stipulation in a contract of a clause preventing,
exonerating or reducing the obligation to indemnify
for damages effected, as provided for in this and in
the preceding Articles, is hereby prohibited, if there is
more than one person responsible for the cause of
the damage, they shall be jointly liable for the
redress established in the pertinent provisions of this
Act. However, if the damage is caused by a
component or part incorporated in the product or
service, its manufacturer, builder or importer and the
person who incorporated the component or part are
jointly liable.
Article 107. Penalties. Any person who shall violate
any provision of this Chapter or its implementing
rules and regulations with respect to any consumer
product which is not food, cosmetic, or hazardous
substance shall upon conviction, be subject to a fine
of not less than Five thousand pesos (P5,000.00)
and by imprisonment of not more than one (1) year or
both upon the discretion of the court.
In case of juridical persons, the penalty shall be
imposed upon its president, manager or head. If the
offender is an alien, he shall, after payment of fine
and service of sentence, be deported without further
deportation proceedings.
NUISANCE
Art. 694. A nuisance is any act, omission,
establishment, business, condition of property, or
anything else which:
(1) Injures or endangers the health or safety of
others; or
(2) Annoys or offends the senses; or
(3) Shocks, defies or disregards decency or morality;
or

(4) Obstructs or interferes with the free passage of

any public highway or street, or any body of

water; or
(5) Hinders or impairs the use of property.
Art. 696. Every successive owner or possessor of
property who fails or refuses to abate a nuisance in
that property started by a former owner or possessor
is liable therefor in the same manner as the one who
created it.
Art. 697. The abatement of a nuisance does not
preclude the right of any person injured to recover
damages for its past existence.
Art. 698. Lapse of time cannot legalize any nuisance,
whether public or private.
LIABILITY FOR NEGLIGENCE VS. LIABILITY FOR NUISANCE
Negligence Nuisance
Basis
Liability is based on lack
of proper care and
diligence
Liability attaches
regardless of the skill
exercised to avoid the
injury
Condition of the Act
Act complained of is
already done which
caused injury to the
plaintiff
There is continuing harm
being suffered by the
aggrieved party by the
maintenance of the act
or thing which
constitutes the nuisance
Remedy
Action for damages Abatement
NUISANCE PER SE

It is recognized as a nuisance under any and all

circumstances because it constitutes a direct menace
to public health and safety and, for that reason, may
be abated summarily under the undefined law of
necessity.
To become a nuisance per se, the thing must, of
itself, because of its inherent qualities, without
complement, be productive of injury, or, by reason of
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the matter of its use or exposure, threaten or be

dangerous to life or property.
NUISANCE PER ACCIDENCE

It becomes a nuisance depending upon certain

conditions and circumstances, and its existence
being a question of fact, it cannot be abated without
due hearing thereon in a tribunal authorized to
decide whether such a thing does in law constitute a

nuisance.
PUBLIC NUISANCE

Art. 695. Nuisance is either public or private. A public

nuisance affects a community or neighborhood or
any considerable number of persons, although the
extent of the annoyance, danger or damage upon
individuals may be unequal. A private nuisance is
one that is not included in the foregoing definition.
A public nuisance is the doing of or the failure to do
something that injuriously affects safety, health, or
morals of the public, or works some substantial
annoyance, inconvenience or injury to the public. It
causes hurt, inconvenience, or damage to the public
generally, or such part of the public as necessarily
comes in contact with it in the exercise of a public or
common right.
Art. 699. The remedies against a public nuisance are:
(1) A prosecution under the Penal Code or any local
ordinance: or
(2) A civil action; or
(3) Abatement, without judicial proceedings.
Art. 700. The district health officer shall take care
that one or all of the remedies against a public
nuisance are availed of.
Art. 701. If a civil action is brought by reason of the
maintenance of a public nuisance, such action shall
be commenced by the city or municipal mayor.
Art. 702. The district health officer shall determine
whether or not abatement, without judicial
proceedings, is the best remedy against a public
nuisance.
Art. 703. A private person may file an action on
account of a public nuisance, if it is specially injurious
to himself.
Art. 704. Any private person may abate a public
nuisance which is specially injurious to him by
removing, or if necessary, by destroying the thing
which constitutes the same, without committing a
breach of the peace, or doing unnecessary injury. But
it is necessary:
(1) That demand be first made upon the owner or
possessor of the property to abate the nuisance;
(2) That such demand has been rejected;
(3) That the abatement be approved by the district
health officer and executed with the assistance
of the local police; and
(4) That the value of the destruction does not
exceed three thousand pesos.
PRIVATE NUISANCE

It is one which violates only private rights and

produces damage to but one or a few persons, and
cannot be said to be public.
Art. 705. The remedies against a private nuisance
are:
(1) A civil action; or
(2) Abatement, without judicial proceedings.

Art. 706. Any person injured by a private nuisance

may abate it by removing, or if necessary, by
destroying the thing which constitutes the nuisance,
without committing a breach of the peace or doing
unnecessary injury. However, it is indispensable that
the procedure for extrajudicial abatement of a public
nuisance by a private person be followed.
Art. 707. A private person or a public official
extrajudicially abating a nuisance shall be liable for
damages:
(1) If he causes unnecessary injury; or
(2) If an alleged nuisance is later declared by the
courts to be not a real nuisance.
ATTRACTIVE NUISANCE

Contributory negligence of a minor does not bar

recovery, where his immaturity and natural curiosity
impelled him to act to his injury; but discretion
shown by the child is the decisive factor.
Del Rosario vs. Manila Electric Co. (1932): It is doubtful
whether contributory negligence can properly be
imputed to the deceased, owing to his immature
years and the natural curiosity which a child would
feel to do something out of the ordinary, and the
mere fact that the deceased ignored the caution of a
companion of the age of 8 years does not, in our
opinion, alter the case.
Hidalgo Enterprises vs. Balandan (1952): One who
maintains on his premises dangerous
instrumentalities or appliances of a character likely
to attract children in play, and who fails to exercise
ordinary care to prevent children from playing
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therewith or resorting thereto, is liable to a child of

tender years who is injured thereby, even if the child
is technically a trespasser in the premises.
The principle reason for the doctrine is that the
condition or appliance in question although its
danger is apparent to those of age, is so enticing or
alluring to children of tender years as to induce them
to approach, get on or use it, and this attractiveness
is an implied invitation to such children
VIOLATION OF CONSTITUTIONAL RIGHTS
VIOLATION OF CIVIL LIBERTIES

Art 32. Any public officer or employee, or any private

individual, who directly or indirectly obstructs,
defeats, violates or in any manner impedes or
impairs any of the following rights and liberties of
another person shall be liable to the latter for
damages:
(1) Freedom of religion
(2) Freedom of speech
(3) Freedom to write for the press or to maintain a
periodical publication
(4) Freedom from arbitrary or illegal detention
(5) Freedom of suffrage

(6) The right against deprivation of property without

due process of law
(7) The right to just compensation when property is
taken for public use
(8) The right to equal protection of the laws
(9) The right to be secure in ones person, house,
papers and effects against unreasonable
searches and seizures
(10) The liberty of abode and of changing the same
(11) The right to privacy of communication and
correspondence
(12) The right to become a member of associations
and societies for purposes not contrary to law
(13) The right to take part in a peaceable assembly
and petition the government for redress of
grievances
(14) The right to be free from involuntary servitude in
any form
(15) The right of the accused against excessive bail
(16) The right of the accused to be heard by himself
and counsel, to be informed of the nature and
the cause of the accusation against him, to have
a speedy and public trial, to meet the witnesses
face to face, to have compulsory process to
secure the attendance of witnesses on is behalf;
(17) Freedom form being compelled to be a witness
against ones self, or from being forced to
confess his guilt, or from being induced by a
promise of immunity or reward to make such
confession, except when the person confessing
becomes a State witness.
(18) Freedom from excessive fines, or cruel and
unusual punishment, unless the same is
imposed or inflicted in accordance with a statute
which has not been judicially declared
unconstitutional;
(19) Freedom of access to the courts
In any of the cases referred to in this article, whether
or not the defendants act or omission constitutes a
criminal offense, the aggrieved party has a right to
commence an entirely separate and distinct civil
action for damages, and for other relief. Such civil
action shall proceed independently of any criminal
prosecution (if the latter be instituted) and may be
proved by a preponderance of evidence.
The indemnity shall include moral damages.
Exemplary damages may also be adjudicated.
The responsibility herein set forth is not demandable
from a judge unless his act or omission constitutes a
violation of the Penal code or any other penal
statute.
Aberca, et al. vs. Ver, et al. (1988): It is obvious that
the purpose of the above codal provision (Art. 32) is
to provide a sanction to the deeply cherished rights
and freedoms enshrined in the Constitution. Its

message is clear; no man may seek to violate those

sacred rights with impunity. In times of great
upheaval or of social and political stress, when the
temptation is strongest to yield borrowing the
words of Chief Justice Claudio Teehankee to the
law of force rather than the force of law, it is
necessary to remind ourselves that certain basic
rights and liberties are immutable and cannot be
sacrificed to the transient needs or imperious
demands of the ruling power. The rule of law must
prevail, or else liberty will perish.
VIOLATIONS OF RIGHTS COMMITTED BY PUBLIC OFFICERS

Art. 27. Any person suffering material or moral loss

because a public servant or employee refuses or
neglects, without just cause, to perform his official
duty may file an action for damages and other relief
against the latter, without prejudice to any
disciplinary administrative action that may be taken.
Art. 32, supra.
Dereliction of Duty
Amaro vs. Samanguit: Requisites:
(1) Defendant is a public officer charged with a
performance of a duty in favor of the plaintiff;
(2) He refused or neglected without just cause to
perform the duty;
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(3) Plaintiff sustained material or moral loss as a

consequence of such non-performance;
(4) The amount of such damages, if material.
Coverage
Applies only to acts of nonfeasance or the
nonperformance of some acts which a person is
obliged or has responsibility to perform.
The duty of the public servant must be ministerial in
character. If the duty is discretionary, he is not liable
unless he acted in a notoriously arbitrary manner.
Defense of Good Faith is not available
The reason of its unavailability is that an officer is
under constant obligation to discharge the duties of
his office, and it is not necessary to show that his
failure to act was due to malice or willfulness.
Art. 34. When a member of a city or municipal police
force refuses or fails to render aid or protection to
any person in case of danger to life or property, such
peace officer shall be primarily liable for damages,
and the city or municipality shall be subsidiarily
responsible therefor. The civil action herein
recognized shall be independent of any criminal
proceedings, and a preponderance of evidence shall
suffice to support such action.
Art. 34 covers a situation where:
(a) There is danger to the life or property of person;
(b) A member of a city or municipal police force who
is present in the scene refused or failed to render
aid or protection to the person; and

(c) Damages are caused wither to the person and/or

property of the victim.
Nature of liability
(1) Of the police officer Primary
(2) City or municipality - Susidiary
The defense of having observed the diligence of a
good father of a family to prevent the damage is not
available to the city/municipality.
PROVINCES, CITIES, AND MUNICIPALITIES
Art. 2189. Provinces, cities and municipalities shall be
liable for damages for the death of, or injuries
suffered by, any person by reason of the defective
condition of roads, streets, bridges, public buildings,
and other public works under their control or
supervision.
Ownership of Roads, etc. is not required
City of Manila vs. Teotico (1968): It is not necessary for
the liability therein established to attach that the
defective roads or streets belong to the province, city
or municipality. What said article requires is that the
province, city or municipality have either "control or
supervision" over said street or road.
OWNERS OF MOTOR VEHICLES

Art. 2184. In motor vehicle mishaps, the owner is

solidarily liable with his driver, if the former, who was
in the vehicle, could have, by the use of the due
diligence, prevented the misfortune. It is disputably
presumed that a driver was negligent, if he had been
found guilty of reckless driving or violating traffic
regulations at least twice within the next preceding
two months.
If the owner was not in the motor vehicle, the
provisions of article 2180 are applicable.
Art. 2185. Unless there is proof to the contrary, it is
presumed that a person driving a motor vehicle has
been negligent if at the time of the mishap, he was
violating any traffic regulation.
Art. 2186. Every owner of a motor vehicle shall file
with the proper government office a bond executed
by a government-controlled corporation or office, to
answer for damages to third persons. The amount of
the bond and other terms shall be fixed by the
competent public official.
The owner is SOLIDARILY liable with the driver for
motor vehicle mishaps when:
(1) The owner was IN the vehicle at the time, AND
(2) The owner could have, by the use of due
diligence, prevented the misfortune.
Owner of the vehicle
Owner shall mean the actual legal owner of the
motor vehicle, in whose name such vehicle is duly
registered with the LTO.
Registration of motor vehicles is required not
because it is the operative act which transfers
ownership in vehicles, but because it is the means by

which the owner can be identified so that if any

accident occurs, or damage or injury is caused in the
operation of the vehicle, responsibility can be fixed.
As held in Vargas vs. Langcay, the registered
owner/operator of a passenger vehicle is jointly and
severally liable with the driver for damages incurred
by passengers or third persons as a consequence of
injuries or death sustained in the operation of said
vehicles. Regardless of who the actual owner of a
vehicle is, the operator of record continues to be the
operator of the vehicle as regards the public and
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third persons and as such is directly and primarily

responsible for the consequences incident to its
operation, so that in contemplation of law, such
owner/operator of record is the employer of the
driver, the actual operator and employer being
considered merely as his agent.
The registered owner of a motor vehicle is primarily
liable for the damage or injury caused to another,
but he has a right to be indemnified by the real
owner of the amount he was required to pay
(Tamayo vs, Aquino) This rule applies both to private
and to common carriers with respect to their
passengers.
Note:
If the owner was NOT inside the vehicle, Art. 2180
applies.
The presumption is AGAINST the owner of the motor
vehicle. He has the burden of proving due diligence.
Thus, once a driver is proven negligent in causing
damage, the law presumes the vehicle owner equally
negligent and imposes upon the latter the burden of
proving proper selection of employee as a defense.
Summary:
Owner PRESENT in the
Vehicle
Owner NOT PRESENT in
the Vehicle
Owner is liable if he could
have prevented the
mishap by the exercise of
due diligence.
Owner may be held
liable under Art. 2180,
par. 5.
Caedo vs. Yu Khe Tai (1968): Car owners are not held
to a uniform and inflexible standard of diligence as
are professional drivers. In many cases they refrain
from driving their own cars and instead hire other
persons to drive for them precisely because they are
not trained or endowed with sufficient discernment
to know the rules of traffic or to appreciate the
relative dangers posed by the different situations
that are continually encountered on the road. What

would be a negligent omission under aforesaid

Article on the part of a car owner who is in the prime
of age and knows how to handle a motor vehicle is
not necessarily so on the part, say, of an old and
infirm person who is not similarly equipped.
The law does not require that a person must possess
a certain measure of skill or proficiency either in the
mechanics of driving or in the observance of traffic
rules before he may own a motor vehicle. The test of
his negligence, within the meaning of Article 2184, is
his omission to do that which the evidence of his own
senses tells him he should do in order to avoid the
accident. And as far as perception is concerned,
absent a minimum level imposed by law, a maneuver
that appears to be fraught with danger to one
passenger may appear to be entirely safe and
commonplace to another. Were the law to require a
uniform standard of perceptiveness, employment of
professional drivers by car owners who, by their very
inadequacies, have real need of drivers' services,
would be effectively proscribed.
Duavit vs. CA (1989): An owner of a vehicle cannot be
held liable for an accident involving the said vehicle if
the same was driven without his consent or
knowledge and by a person not employed by him.
PROPRIETOR OF BUILDING OR STRUCTURE

Art. 2190. The proprietor of a building or structure is

responsible for the damages resulting from its total
or partial collapse, if it should be due to the lack of
necessary repairs.
Art. 2191. Proprietors shall also be responsible for
damages caused:
(1) By the explosion of machinery which has not
been taken care of with due diligence, and the
inflammation of explosive substances which
have not been kept in a safe and adequate
place;
(2) By excessive smoke, which may be harmful to
persons or property;
(3) By the falling of trees situated at or near
highways or lanes, if not caused by force
majeure;
(4) By emanations from tubes, canals, sewers or
deposits of infectious matter, constructed
without precautions suitable to the place.
Art. 2192. If damage referred to in the two preceding
articles should be the result of any defect in the
construction mentioned in article 1723, the third
person suffering damages may proceed only against
the engineer or architect or contractor in accordance
with said article, within the period therein fixed.
Ownership of a building imposes on the proprietor
thereof the duty to maintain it in good condition at
all times to the end that it may not collapse either
totally or partially as to cause damage or injury to

anothers person or property.

This duty obtains whether the building is leased or
held in usufruct.
Considering, however, that the lessee or usufructuary
has direct and immediate control of the building, the
law imposes on him the duty to notify the proprietor
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of such urgent or extra-ordinary repairs AND where

the proprietors failure to make the necessary repairs
was due to the failure of the lessee or usufructuary to
notify him, the proprietor is entitled to
indemnification for damages he may have been
required to pay to the parties.
Gotesco Investment Corp. vs. Chatto (1992): The
owner or proprietor of a place of public amusement
impliedly warrants that the premises, appliances and
amusement devices are safe for the purpose for
which they are designed, the doctrine being subject
to no other exception or qualification than that he
does not contract against unknown defects not
discoverable by ordinary or reasonable means.
HEAD OF FAMILY

Art 2193. The head of a family that lives in a building

or a part thereof, is responsible for damages caused
by things thrown or falling from the same.
Purpose of the law
To relieve the injured party of the difficulty of
determining and proving who threw the thing or
what caused it to fall, or that either was due to the
fault or negligence of any particular individual.
Dingcong vs. Kanaan (1941): Lessee is considered as
the head of the family. It is enough that he lives in
and has control over it.

Strict Liability

POSSESSOR AND USER OF AN ANIMAL

Art. 2183. The possessor of an animal or whoever
may make use of the same is responsible for the
damage which it may cause, although it may escape
or be lost. This responsibility shall cease only in case
the damage should come from force majeure or from
the fault of the person who has suffered damage.
APPLICABILITY OF PROVISION

Since the law makes no distinction, this is applicable

to both wild (in case the wild animal is kept) and
domestic animals. It is enough that defendant is the
possessor, owner, or user of the animal at the time it
caused the damage complained of, to hold him
liable therefor.
BASIS

Vestil vs. IAC (1989): Possession of the animal, not

ownership, is determinative of liability under Art.
2183. The obligation imposed by said article is not
based on the negligence or on the presumed lack of
vigilance of the possessor or user of the animal
causing damage. It is based on natural equity and on

the principle of social interest that he who possesses

animals for his utility, pleasure, or service, must
answer for any damage which such animal may
cause.
POSSIBLE DEFENSES AGAINST THIS LIABILITY

(1) Force Majeure

(2) Fault of person suffering damage
(3) Act of third persons
SCOPE OF PROVISION

Contention that the defendant could not be

expected to exercise remote control of the animal is
not acceptable. In fact, Art. 2183 holds the possessor
liable even if the animal should escape or be lost
and so be removed from his control.
It is likewise immaterial that the animal was tame
and was merely provoked by the victim. The law does
not speak only of vicious animals but covers even
tame ones as long as they cause injury.
NUISANCE
Sangco: A person who creates or maintains a
nuisance is liable for the resulting injury to others
regardless of the degree of care or skill exercised to
avoid the injury. The creation or maintenance of a
nuisance is a violation of an absolute duty.
Nuisance is a condition and not an act or failure to
act, so that if a wrongful condition exists, the person
responsible for its existence is responsible for the
resulting damages to others.
CLASSES

(1) Nuisance per se; Nuisance per accidence

(2) Public nuisance; private nuisance
Iloilo Ice and Cold Storage Co. vs. Municipal Council
(1913): A nuisance is, according to Blackstone, "Any
thing that worketh hurt, inconvenience, or damages."
They arise from pursuing particular trades or
industries in populous neighborhoods; from acts of
public indecency, keeping disorderly houses, and
houses of ill fame, gambling houses, etc. Nuisances
have been divided into two classes: Nuisances per se,
and nuisances per accidens. To the first belong those
which are unquestionably and under all
circumstances nuisances, such as gambling houses,
houses of ill fame, etc. The number of such
nuisances is necessarily limited, and by far the
greater number of nuisances are such because of
particular facts and circumstances surrounding the
otherwise harmless cause of the nuisance. For this
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reason, it will readily be seen that whether a

particular thing is a nuisance is generally a question
of fact, to be determined in the first instance before
the term nuisance can be applied to it.
Salao and Lucas vs. Santos (1939): Nuisances are of
two kinds: nuisance per se and nuisance per
accidens. The first is recognized as a nuisance under
any and all circumstances because it constitutes a

direct menace to public health or safety and, for that

reason, may be abated summarily under the
undefined law of necessity. The second is that which
depends upon certain conditions and circumstances,
and its existence being a question of fact, it cannot
be abated without due hearing thereon in a tribunal
authorized to decide whether such a thing does in
law constitute a nuisance.
EASEMENT AGAINST NUISANCE

Art. 682. Every building or piece of land is subject to

the easement which prohibits the proprietor or
possessor from committing nuisance through noise,
jarring, offensive odor, smoke, heat, dust, water,
glare and other causes.
Art. 683. Subject to zoning, health, police and other
laws and regulations, factories and shops may be
maintained provided the least possible annoyance is
caused to the neighborhood.
The provisions impose a prohibition upon owners of
buildings of land from committing therein a nuisance
or using such buildings or lands in a manner as will
constitute a nuisance. It is based on the maxim sic
utere tuo ut alienum non laedas (so use your own as
not to injure anothers property).
Velasco vs. Manila Electric Co. (1971): The general rule
is that everyone is bound to bear the habitual or
customary inconveniences that result from the
proximity of others, and so long as this level is not
surpassed, he may not complain against them. But if
the prejudice exceeds the inconveniences that such
proximity habitually brings, the neighbor who causes
such disturbances is held responsible for the
resulting damage, being guilty of causing nuisance.
While no previous adjudications on the specific issue
have been made in the Philippines, our law of
nuisances is of American origin, and a review of
authorities clearly indicates the rule to be that the
causing or maintenance of disturbing noise or sound
may constitute an actionable nuisance.
There can be no doubt that commercial and
industrial activities which are lawful in themselves
may become nuisances if they are so offensive to the
senses that they render the enjoyment of life and
property uncomfortable. It is no defense that skill
and care have been exercised and the most improved
methods and appliances employed to prevent such
result.
PRODUCTS LIABILITY (SUPRA)
Art 2187. Manufacturers and processors of foodstuffs,
drinks, toilet articles and similar goods shall be liable
for death or injuries caused by any noxious or
harmful substances used, although no contractual
relation exists between them and the consumers.
CONSUMER ACT
Consumer Act Provisions (supra)

Coca-Cola v. CA (1993): While it may be true that the

pre-existing contract between the parties may, as a
general rule, bar the applicability of the law on
quasi-delict, the liability may itself be deemed to
arise from quasi-delict if the act which breaks the
contract is also a quasi-delict.
Summary:
Person Strictly
Liable
For What Defenses or
Exceptions
Possessor of an
animal or
whoever makes
use of them
even if the
animal is lost or
escaped
For the damage
it may cause
Force majeure
Fault of the
person who
suffered
damage
Owner of Motor
Vehicle
Motor vehicle
mishaps
Solidary liability
only if the
owner was in
the vehicle and
if he could have
prevented it
thru due
diligence
If not in vehicle
2180
Manufacturers
and Processors
of foodstuffs,
drinks, toilet
articles and
similar goods
(FDTAS)
Death and
injuries caused
by any noxious
or harmful
substances used
Absence on
contractual
relation NOT a
defense

Defendant in
possession of
dangerous
Death or injury
results from
such possession
possession or
use thereof is
indispensable in
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Person Strictly
Liable
For What Defenses or
Exceptions
weapons/
substances
such as firearms
and poison
his occupation
or business
Provinces, Cities
and
Municipalities
The death or
injuries suffered
by any person by
reason of the
defective
condition of
roads, streets,
bridges, public
buildings, and
other public
works
Public works
must be under
their
supervisions
Proprietor of
building/
structure
a) Total or partial
collapse of
building or
structure if due
to lack of
necessary repair
s
b) Explosion of
machinery
which has not
been taken
cared of with
due diligence,
and the

inflammation of
explosive
substances
which have not
been kept in a
safe and
adequate place
c) By excessive
smoke, which
may be harmful
to persons or
property
d) By falling of
trees situated at
or near
highways or
lanes, if not
caused by force
majeure
e) By emanations
from tubes,
canals, sewers
or deposits of
infectious
matter,
constructed
Responsibility
for collapse
should be due
to the lack of
necessary
repairs
Person Strictly
Liable
For What Defenses or
Exceptions
without
precautions
suitable to the
place
Engineer,
Architect or
Contractor
if damage of
building or
structure is
caused by defect
in construction
which happens
within 15 years
from
construction;
action must be
brought within
10 years from

collapse
Head of the
Family that lives
in a building or
any part thereof
Liable for
damages
caused by
things thrown or
falling from the
same
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Damages

DEFINITION
People vs. Ballesteros: Damages may be defined as
the pecuniary compensation, recompense, or
satisfaction for an injury sustained, or as otherwise
expressed, the pecuniary consequences which the
law imposes for the breach of some duty or the
violation of some right.
DAMAGES VS. INJURY
Custodio v. CA (1996): Injury is the illegal invasion of
a legal right. Damage is the loss, hurt, or harm which
results from the injury. Damages are the recompense
or compensation awarded for the damage suffered.
Ocena vs. Icamina: The obligation to repair the
damages exists whether done intentionally or
negligently and whether or not punishable by law.
ELEMENTS FOR RECOVERY OF DAMAGES
(1) Right of action
(2) For a wrong inflicted by the defendant
(3) Damage resulting to the plaintiff
CLASSIFICATION
Art. 2197. Damages may be:
(1) Actual or compensatory;
(2) Moral;
(3) Nominal;
(4) Temperate or moderate;
(5) Liquidated; or
(6) Exemplary or corrective.
ACCORDING TO PURPOSE

(1) For adequate reparation of the injury

a) Compensatory (reparation of pecuniary
losses)
b) Moral (reparation for non-pecuniary losses:
injury to feelings; physical suffering, etc.)
(2) For vindication of the right violated: Nominal
(3) For less than adequate reparation: Moderate
(4) For deterring future violations: Exemplary or
corrective
ACCORDING TO MANNER OF DETERMINATION

(1) Conventional (or liquidated)

(2) Non-conventional, which may either be:
(a) Statutory (fixed by law, as in moratory
interest)

(b) Judicial (determined by the courts)

SPECIAL AND ORDINARY

General damages
Those which are the natural and necessary result of
the wrongful act or omission asserted as the
foundation of liability, and include those which
follow as a conclusion of law from the statement of
the facts of the injury.
Special damages
Damages that arise from the special circumstance of
the case, which, if properly pleaded, may be added to
the general damages which the law presumes or
implies from the mere invasion of the plaintiffs
rights. Special damages are the natural, but NOT the
necessary result of an injury. These are not implied
by law.

Actual and Compensatory

Damages

Compensatory damages are damages in satisfaction

of, or in recompense for, loss or injury sustained. The
phrase actual damages is sometimes used as
synonymous with compensatory damages.
REQUISITES
Asilio, Jr. v. People and Sps. Bombasi (2011): To seek
recovery of actual damages, it is necessary to prove
the actual amount of loss with a reasonable degree
of certainty, premised upon competent proof and on
the best evidence obtainable.
WHEN IS A PERSON ENTITLED?
(1) When there is a pecuniary loss suffered by him;
(2) When he has alleged and prayed for such relief
(Manchester Devt Corp vs. CA);
(3) When he has duly proved it;
(4) When provided by law or by stipulation.
No proof of pecuniary loss is necessary for: moral,
nominal, temperate, liquidated or exemplary damages.
The assessment of such damages is discretionary
upon the court, except liquidated ones. (Art. 2216)
ALLEGED AND PROVED WITH CERTAINTY
Art. 2199. Except as provided by law or by stipulation,
one is entitled to an adequate compensation only for
such pecuniary loss suffered by him as he has duly
proved. Such compensation is referred to as actual
or compensatory damages.
THE DAMAGES MUST BE PROVEN BY
COMPETENT EVIDENCE (ADMISSIBLE OR
PROBATIVE)
Integrated Packaging Corp. vs. CA; Fuentes vs. CA: It
is necessary to prove with a reasonable degree of
certainty, premised upon competent proof and on
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PAGE 363

the best evidence obtainable by the injured party, the

actual amount of loss.
Damages must be proved and cannot be presumed.

It must be established by clear evidence.

Valencia vs. Tantoco (1956): Damages must be
proved with reasonable accuracy, even when not
denied.
DEGREE OF CERTAINTY REQUIRED AS TO: FACT,
CAUSE AND AMOUNT OF DAMAGES
Damages are not rendered uncertain just because
they cannot be calculated with absolute exactness or
because the consequences of the wrong are not
precisely definite in pecuniary amount.
The principle which will disallow recovery of
damages when their existence rests solely on
speculation applies both to the fact and cause of
damages.
(1) The requirement of certainty does not prevent the
drawing of reasonable inferences from the fact
and circumstance in evidence.
(2) Events which occur after the wrong complained
of may serve to render the damage sufficiently
certain.
(3) The damages must be susceptible of
ascertainment in some manner other than by
mere speculation, conjecture or surmise and by
reference to some fairly definite standard, such as
market value, established experience or direct
inference from known circumstances.
Talisay-Silay vs. Associacion: Where, however, it is
reasonably certain that injury consisting of failure to
realize otherwise reasonably expected profits had
been incurred, uncertainty as to the precise amount
of such unrealized profits will not prevent recovery or
the award of damages.
NOT SPECULATIVE
Actual damages to be compensable must be proved
by clear evidence, a court cannot rely on speculation,
conjectures or guesswork as to the fact and amount
of damages, but must depend on actual proof that
damages has been suffered and on evidence of the
actual amount.
COMPONENTS
Actual damage covers the following:
(1) Value of loss; unrealized profit
(2) Attorneys fees and expenses of litigation
(3) Interest
VALUE OF LOSS; UNREALIZED PROFIT
Art. 2200. Indemnification for damages shall
comprehend not only the value of the loss suffered,
but also that of the profits which the obligee failed to
obtain.
In other words, indemnification for damages is not
limited to damnum emergens (actual loss) but
extends to lucrum cessans (a cession of gain or
amount of profit lost).
ATTORNEYS FEES AND EXPENSES OF
LITIGATION

Art. 2208. In the absence of stipulation, attorney's

fees and expenses of litigation, other than judicial
costs, cannot be recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has
compelled the plaintiff to litigate with third
persons or to incur expenses to protect his
interest;
(3) In criminal cases of malicious prosecution
against the plaintiff;
(4) In case of a clearly unfounded civil action or
proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident
bad faith in refusing to satisfy the plaintiff's
plainly valid, just and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household
helpers, laborers and skilled workers;
(8) In actions for indemnity under workmen's
compensation and employer's liability laws;
(9) In a separate civil action to recover civil liability
arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just
and equitable that attorney's fees and expenses
of litigation should be recovered.
In all cases, the attorney's fees and expenses of
litigation must be reasonable.
General Rule
Attorneys fees and costs of litigation are recoverable
IF stipulated.
Exceptions
If there is no stipulation, they are recoverable only in
the following cases:
(1) By reason of malice or bad faith
(a) When exemplary damages are awarded
(b) In case of a clearly unfounded civil action
(c) Where defendant acted in gross and evident
bad faith
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PAGE 364

(d) When at least double judicial costs are

awarded
(2) By reason of plaintiffs indigence in
(a) Actions for legal support
(b) Actions for recovery of wages of laborers,
etc.
(c) Actions for workmens compensation
(3) By reason of crimes in
(a) Criminal cases of malicious prosecution
(b) Separate actions to recover civil liability
arising from crime
(4) By reason of equity
(a) Where the defendants act compelled
plaintiff to litigate with third persons
(b) Where the Court deems it just and equitable

Note:
In all cases, attorneys fees and costs of litigation
must be reasonable.
Even if expressly stipulated, attorneys fees are
subject to control by the Courts.
INTEREST
Art. 2209. If the obligation consists in the payment of
a sum of money, and the debtor incurs in delay, the
indemnity for damages, there being no stipulation to
the contrary, shall be the payment of the interest
agreed upon, and in the absence of stipulation, the
legal interest, which is six per cent per annum.
Art. 2210. Interest may, in the discretion of the court,
be allowed upon damages awarded for breach of
contract.
Art. 2211. In crimes and quasi-delicts, interest as a
part of the damages may, in a proper case, be
adjudicated in the discretion of the court.
Art. 2212. Interest due shall earn legal interest from
the time it is judicially demanded, although the
obligation may be silent upon this point.
Art. 2213. Interest cannot be recovered upon
unliquidated claims or damages, except when the
demand can be established with reasonable
certainty.
INTEREST ACCRUES WHEN:
(1) The obligation consists in the payment of a sum
of money
(2) Debtor incurs in delay
(3) There being no stipulation to the contrary
No interest may be recovered on unliquidated (not
fixed in amount) claims or damages, except when
the demand can be established with reasonable
certainty at the Courts discretion.
COMPOUNDING OF INTEREST

Interest due shall earn legal interest from the time it

is judicially demanded, although the obligation may
be silent on the point.
Note that interest due can earn only at 6%, whether
the rate of interest of the principal is greater than
6%.
DETERMINATION OF LEGAL INTEREST

(1) When an obligation, regardless of its source (i.e.,

law, contracts, quasi-contracts, delicts or quasidelicts)
is breached, the contravenor can be held
liable for damages.
(2) With regard particularly to an AWARD OF
INTEREST in the concept of actual and
compensatory damages, the RATE of interest, as
well as the ACCRUAL thereof, is imposed, as
follows (Eastern Shipping Lines vs. CA, 1994):
Base
Rate
Accrual
(a) When the
obligation is

breached, and it
consists in the
PAYMENT OF A
SUM OF
MONEY, i.e., a
loan or
forbearance of
money, the
interest due
should be
(a) That which
may have
been
stipulated in
writing.
b) In the
absence of
stipulation,
the rate of
interest shall
be 12% per
annum (legal
interest)
to be computed
from default, i.e.,
from JUDICIAL or
EXTRAJUDICIAL
demand under
and subject to the
provisions of
Article 1169 of the
Civil Code.
(b) Furthermore,
the INTEREST
DUE shall itself
earn
legal interest from the time it is
JUDICIALLY
demanded.
(c) When an
obligation, NOT
constituting a
loan or
forbearance of
money, is
breached, an
interest on the
AMOUNT OF
DAMAGES
awarded may
be imposed at
at the rate of
6% per
annum.
If claim or

damages are
LIQUIDATED,
from default, i.e.,
from judicial or
extrajudicial
demand. (Art.
1169, Civil Code)
If UNLIQUIDATED,
from the time the
demand can be

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PAGE 365

Base
Rate
Accrual
the discretion of
the court.
The actual base
for the
computation of
legal interest
shall be on the
amount finally
adjudged.
established with
reasonable
certainty. Hence,
the interest shall
begin to run only
FROM THE DATE
THE JUDGMENT
OF THE COURT IS
MADE (at which
time the
quantification of
damages may be
deemed to have
been reasonably
ascertained).
(d) When the
JUDGMENT of
the court
awarding a sum
of money
becomes final
and executory,
the rate of
legal interest,
whether the
case falls
under a,b, or
c, above, shall
be 12% per
annum
from FINALITY
UNTIL ITS

SATISFACTION,
this period being
deemed to be an
equivalent to a
forbearance of
credit.
START OF DELAY
(1) Extrajudicial: demand letter
(2) Judicial: Filing of complaint
(3) Award
EXTENT OR SCOPE OF ACTUAL DAMAGES
Art.
2201
Contracts
and quasi
contracts
Liability extends
to those:
(1) natural and
probable
consequences
of the breach
(2) those that
have been
foreseen
(3) those that
could have
been
reasonably
foreseen
Provided: obligor
in good faith
Note:
Liability
extends to
all damages
which may
be
reasonably
attributed to
the nonperformance
of the
obligation in
case of
fraud, bad
faith, malice
or wanton
attitude
(FBM-WA).
Art.
2202 Crimes
and
quasidelicts
Liability extends
to all damages

which are the

natural and
probable
consequence
Note:
WON
damage is
foreseen is
irrelevant
IN CONTRACTS AND QUASI-CONTRACTS
Art. 2201. In contracts and quasi-contracts, the
damages for which the obligor who acted in good
faith is liable shall be those that are the natural and
probable consequences of the breach of the
obligation, and which the parties have foreseen or
could have reasonably foreseen at the time the
obligation was constituted.
In case of fraud, bad faith, malice or wanton attitude,
the obligor shall be responsible for all damages
which may be reasonably attributed to the nonperformance
of the obligation.
Art. 2214. In quasi-delicts, the contributory
negligence of the plaintiff shall reduce the damages
that he may recover.
Art. 2215. In contracts, quasi-contracts, and quasidelicts,
the court may equitably mitigate the
damages under circumstances other than the case
referred to in the preceding article, as in the
following instances:
(1) That the plaintiff himself has contravened the
terms of the contract;
(2) That the plaintiff has derived some benefit as a
result of the contract;
(3) In cases where exemplary damages are to be
awarded, that the defendant acted upon the
advice of counsel;
(4) That the loss would have resulted in any event;
(5) That since the filing of the action, the defendant
has done his best to lessen the plaintiff's loss or
injury.
(a) The obligor IN GOOD FAITH is liable for such
damages
(1) That are the natural and probable
consequences of the breach of the
obligation; and
(2) That the parties have foreseen (or could
have reasonably foreseen) such damages at
the time the obligation was constituted
Natural and probable consequence
requires:
(1) Causality: That the damage would not
have resulted without fault or
negligence of the defendant (but for
rule)
(2) Adequacy: That the fault of the obligor

would normally (ordinarily) result in the

damage suffered by the obligee
(b) In case of FRAUD, BAD FAITH, MALICE OR
WANT OF ATTITUDE, the obligor answers for
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PAGE 366

(1) All damages which may be reasonably

attributed to the non-performance of the
obligation, whether foreseen or not
(2) Exemplary or corrective damages
Note:
Interest may be allowed on damages awarded, in the
discretion of the court.
Daywalt vs. Recoletos et al.: The damages
recoverable upon breach of contract are, primarily,
the ordinary, natural and in a sense the necessary
damages resulting from the breach. Other damages,
known as special damages, are recoverable where it
appears that the particular conditions which made
such damages a probable consequence of the
breach were known to the delinquent party at the
time the contract was made.
IN CRIMES AND QUASI-DELICTS
Art. 2202. In crimes and quasi-delicts, the defendant
shall be liable for all damages which are the natural
and probable consequences of the act or omission
complained of. It is not necessary that such damages
have been foreseen or could have reasonably been
foreseen by the defendant.
Art. 2206. The amount of damages for death caused
by a crime or quasi-delict shall be at least three
thousand pesos, even though there may have been
mitigating circumstances. In addition:
(1) The defendant shall be liable for the loss of the
earning capacity of the deceased, and the
indemnity shall be paid to the heirs of the latter;
such indemnity shall in every case be assessed
and awarded by the court, unless the deceased
on account of permanent physical disability not
caused by the defendant, had no earning
capacity at the time of his death;
(2) If the deceased was obliged to give support
according to the provisions of article 291, the
recipient who is not an heir called to the
decedent's inheritance by the law of testate or
intestate succession, may demand support from
the person causing the death, for a period not
exceeding five years, the exact duration to be
fixed by the court;
(3) The spouse, legitimate and illegitimate
descendants and ascendants of the deceased
may demand moral damages for mental
anguish by reason of the death of the deceased.
Defendant is liable for all damages which are the
natural and probable consequences of the act or
omission complained of; it is not necessary that such

damages were foreseen, or reasonably foreseeable

by the defendant.
Algarra vs. Sandejas: Actual damages for a negligent
act or omission are confined to those which "were
foreseen or might have been foreseen," or those
which were "the natural and probable
consequences" or "the direct and immediate
consequences" of the act or omission.
Note:
Damages are to be increased or decreased (in case of
crimes only) according to aggravating or mitigating
circumstances present.
Interest, as part of damages, may be adjudicated in a
proper case, in the Courts discretion.
Contributory negligence of the plaintiff, in case of
quasi-delicts, shall reduce the damages to which he
may be entitled.
Note:
In crimes, no mitigation for contributory negligence.

Moral Damages

Art. 2217. Moral damages include physical suffering,

mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social
humiliation, and similar injury. Though incapable of
pecuniary computation, moral damages may be
recovered if they are the proximate result of the
defendant's wrongful act for omission.
Art. 2218. In the adjudication of moral damages, the
sentimental value of property, real or personal, may
be considered.
Visayan Sawmill vs. CA: Moral damages are
emphatically not intended to enrich a complainant
at the expense of the defendant. Its award is aimed
at the restoration, within the limits of the possible, of
the spiritual status quo ante, and it must be
proportional to the suffering inflicted.
Bagumbayan Corp. vs. IAC (1984): Mental suffering
means distress or serious pain as distinguished from
annoyance, regret or vexation.
Mental anguish is intense mental suffering.
Generally, damages for mental anguish are limited
to cases in which there has been a personal physical
injury or where the defendant willfully, wantonly,
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PAGE 367

recklessly, or intentionally caused the mental

anguish.
WHEN AWARDED
Awarded when injury consists of: (PBMF-MWSSS)
(a) Physical suffering
(b) Besmirched reputation
(c) Mental anguish
(d) Fright
(e) Moral shock
(f) Wounded feelings

(g) Social humiliation

(h) Serious anxiety
(i) Similar injury
(1) Though incapable of pecuniary computation
(2) If such is the proximate result of defendants act
or omission.
REQUISITES FOR AWARDING MORAL DAMAGES
Villanueva vs. Salvador: Requisites for awarding
moral damages:
(1) there must be an injury, whether physical, mental
or psychological, clearly sustained by the
claimant;
(2) there must be a culpable act or omission factually
established;
(3) the wrongful act or omission of the defendant
must be the proximate cause of the injury
sustained by the claimant; and
(4) the award of damages is predicated on any of the
cases stated in ART. 2219 NCC.
GENERAL PRINCIPLES OF RECOVERY:
(1) Moral damages must somehow be proportional
to the suffering inflicted.
(2) In culpa contractual or breach of contract, moral
damages may be recovered when the defendant
acted in bad faith or was guilty of gross
negligence (amounting to bad faith) or in
wanton disregard of his contractual obligation
and, exceptionally, when the act of breach of
contract itself is constitutive of tort resulting in
physical injuries.
(3) By special rule in Article 1764, in relation to
Article 2206, moral damages may also be
awarded in case the death of a passenger
results from a breach of carriage.
(4) In culpa aquiliana or quasi-delict,
(a) when an act or omission causes physical
injuries, or
(b) where the defendant is guilty of intentional
tort, moral damages may aptly be
recovered. This rule also applies to
contracts when breached by tort.
(5) In culpa criminal, moral damages could be
lawfully due when the accused is found guilty of
physical injuries, lascivious acts, adultery or
concubinage, illegal or arbitrary detention,
illegal arrest, illegal search, or defamation.
(6) Malicious prosecution can also give rise to a
claim for moral damages. The term "analogous
cases," referred to in Article 2219, following the
ejusdem generis rule, must be held similar to
those expressly enumerated by the law.
(7) Although the institution of a clearly unfounded
civil suit can at times be a legal justification for
an award of attorney's fees, such filing, however,
has almost invariably been held not to be a

ground for an award of moral damages.

(Expertravel& Tours vs. CA, 1 to 7)
(8) The burden rests on the person claiming moral
damages to show convincing evidence for good
faith is presumed. In a case involving simple
negligence, moral damages cannot be
recovered. (Villanueva vs. Salvador)
(9) Failure to use the precise legal terms or
"sacramental phrases" of "mental anguish,
fright, serious anxiety, wounded feelings or
moral shock" does not justify the denial of the
claim for damages. It is sufficient that these
exact terms have been pleaded in the complaint
and evidence has been adduced (MirandaRibaya vs. Bautista)
(10) Even if the allegations regarding the amount of
damages in the complaint are not specifically
denied in the answer, such damages are not
deemed admitted. (Raagas, et al. vs. Traya et al).
(11) An appeal in a criminal case opens the whole
case for review and this 'includes the review of
the penalty, indemnity and damages. Even if the
offended party had not appealed from said
award, and the only party who sought a review
of the decision of said court was the accused, the
court can increase damages awarded.
(Sumalpong vs. CA)
(12) It can only be awarded to natural persons.
ABS-CBN vs. CA: The award of moral damages
cannot be granted in favor of a corporation because,
being an artificial person and having existence only
in legal contemplation, it has no feelings, no
emotions, no senses, It cannot, therefore, experience
UP COLLEGE OF LAW DAMAGES BAR OPERATIONS COMMISSION
PAGE 368

physical suffering and mental anguish, which can be

experienced only by one having a nervous system.
The statement in People vs. Manero and Mambulao
Lumber Co. vs. PNB that a corporation may recover
moral damages if it "has a good reputation that is
debased, resulting in social humiliation" is an obiter
dictum.
NAPOCOR vs. Philipp Brothers: While it is true that
besmirched reputation is included in moral
damages, it cannot cause mental anguish to a
corporation, unlike in the case of a natural person,
for a corporation has no reputation in the sense that
an individual has, and besides, it is inherently
impossible for a corporation to suffer mental
anguish.
Question
Ortillo contracts Fabricato, Inc. to supply and install
tile materials in a building he is donating to his
province. Ortillo pays 50% of the contract price as
per agreement. It is also agreed that the balance
would be payable periodically after every 10%

performance until completed. After performing

about 93% of the contract, for which it has been paid
an additional 40% as per agreement, Fabricato, Inc.
did not complete the project due to its sudden
cessation of operations. Instead, Fabricato, Inc.
demands payment of the last 10% of the contract
despite its non-completion of the project. Ortillo
refuses to pay, invoking the stipulation that payment
of the last amount of 10% shall be upon completion.
Fabricato, Inc. brings suit for the entire 10% plus
damages. Ortillo counters with claims for (a) moral
damages for Fabricato, Inc.s unfounded suit which
has damaged his reputation as a philanthropist and
respected businessman in his community, and (b)
attorneys fees.
(a) Does Ortillo have a legal basis for his claim for
moral damages?
(b) How about his claim for attorneys fees, having
hired a lawyer to defend him?
Suggested Answer:
(a) There is no legal basis to Ortillos claim for
moral damages. It does not fall under the
coverage of Article 2219 of the New Civil Code.
(b) Ortillo is entitled to attorneys fees because
Fabricatos complaint is a case of malicious
prosecution or a clearly unfounded civil action
(Art. 2208 [4] and [11], NCC).
WHEN RECOVERABLE
Art. 2219. Moral damages may be recovered in the
following and analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious
acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in article 309;
(10) Acts and actions referred to in articles 21, 26, 27,
28, 29, 30, 32, 34, and 35.
The parents of the female seduced, abducted, raped,
or abused, referred to in No. 3 of this article, may
also recover moral damages.
The spouse, descendants, ascendants, and brothers
and sisters may bring the action mentioned in No. 9
of this article, in the order named.
Art. 2220. Willful injury to property may be a legal
ground for awarding moral damages if the court
should find that, under the circumstances, such
damages are justly due. The same rule applies to
breaches of contract where the defendant acted
fraudulently or in bad faith.
IN SEDUCTION, ABDUCTION, RAPE AND OTHER LASCIVIOUS

ACTS

People vs. Calongui: Anent the award of damages,

civil indemnity ex delicto is mandatory upon finding
of the fact of rape while moral damages is awarded
upon such finding without need of further proof
because it is assumed that a rape victim has actually
suffered moral injuries entitling the victim to such
award. If without factual and legal bases, no award
of exemplary damages should be allowed.
Note:
Recovery may be had by the offended party and also
by her parents.
IN ACTS REFERRED TO IN ARTS. 21, 26, 27, 28, 29, 32,
34 &35, NCC
Art. 21. Any person who wilfully causes loss or injury
to another in a manner that is contrary to morals,
good customs or public policy shall compensate the
latter for the damage.
Art. 26. Every person shall respect the dignity,
personality, privacy and peace of mind of his
neighbors and other persons. The following and
similar acts, though they may not constitute a
criminal offense, shall produce a cause of action for
damages, prevention and other relief:
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PAGE 369

(1) Prying into the privacy of another's residence:

(2) Meddling with 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 his
religious beliefs, lowly station in life, place of
birth, physical defect, or other personal
condition.
Art. 27. Any person suffering material or moral loss
because a public servant or employee refuses or
neglects, without just cause, to perform his official
duty may file an action for damages and other relief
against he latter, without prejudice to any
disciplinary administrative action that may be taken.
Art. 28. Unfair competition in agricultural,
commercial or industrial enterprises or in labor
through the use of force, intimidation, deceit,
machination or any other unjust, oppressive or
highhanded method shall give rise to a right of
action by the person who thereby suffers damage.
Art. 29. When the accused in a criminal prosecution
is acquitted on the ground that his guilt has not been
proved beyond reasonable doubt, a civil action for
damages for the same act or omission may be
instituted. Such action requires only a
preponderance of evidence. Upon motion of the
defendant, the court may require the plaintiff to file a
bond to answer for damages in case the complaint
should be found to be malicious.

If in a criminal case the judgment of acquittal is

based upon reasonable doubt, the court shall so
declare. In the absence of any declaration to that
effect, it may be inferred from the text of the decision
whether or not the acquittal is due to that ground.
Art. 32. Any public officer or employee, or any private
individual, who directly or indirectly obstructs,
defeats, violates or in any manner impedes or
impairs any of the following rights and liberties of
another person shall be liable to the latter for
damages:
(1) Freedom of religion;
(2) Freedom of speech;
(3) Freedom to write for the press or to maintain a
periodical publication;
(4) Freedom from arbitrary or illegal detention;
(5) Freedom of suffrage;
(6) The right against deprivation of property without
due process of law;
(7) The right to a just compensation when private
property is taken for public use;
(8) The right to the equal protection of the laws;
(9) The right to be secure in one's person, house,
papers, and effects against unreasonable
searches and seizures;
(10) The liberty of abode and of changing the same;
(11) The privacy of communication and
correspondence;
(12) The right to become a member of associations
or societies for purposes not contrary to law;
(13) The right to take part in a peaceable assembly
to petition the government for redress of
grievances;
(14) The right to be free from involuntary servitude in
any form;
(15) The right of the accused against excessive bail;
(16) The right of the accused to be heard by himself
and counsel, to be informed of the nature and
cause of the accusation against him, to have a
speedy and public trial, to meet the witnesses
face to face, and to have compulsory process to
secure the attendance of witness in his behalf;
(17) Freedom from being compelled to be a witness
against one's self, or from being forced to
confess guilt, or from being induced by a
promise of immunity or reward to make such
confession, except when the person confessing
becomes a State witness;
(18) Freedom from excessive fines, or cruel and
unusual punishment, unless the same is
imposed or inflicted in accordance with a statute
which has not been judicially declared
unconstitutional; and
(19) Freedom of access to the courts.
In any of the cases referred to in this article, whether

or not the defendant's act or omission constitutes a

criminal offense, the aggrieved party has a right to
commence an entirely separate and distinct civil
action for damages, and for other relief. Such civil
action shall proceed independently of any criminal
prosecution (if the latter be instituted), and mat be
proved by a preponderance of evidence.
The indemnity shall include moral damages.
Exemplary damages may also be adjudicated.
The responsibility herein set forth is not demandable
from a judge unless his act or omission constitutes a
violation of the Penal Code or other penal statute.
Art. 34. When a member of a city or municipal police
force refuses or fails to render aid or protection to
any person in case of danger to life or property, such
peace officer shall be primarily liable for damages,
and the city or municipality shall be subsidiarily
responsible therefor. The civil action herein
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PAGE 370

recognized shall be independent of any criminal

proceedings, and a preponderance of evidence shall
suffice to support such action.
Art. 35. When a person, claiming to be injured by a
criminal offense, charges another with the same, for
which no independent civil action is granted in this
Code or any special law, but the justice of the peace
finds no reasonable grounds to believe that a crime
has been committed, or the prosecuting attorney
refuses or fails to institute criminal proceedings, the
complaint may bring a civil action for damages
against the alleged offender. Such civil action may
be supported by a preponderance of evidence. Upon
the defendant's motion, the court may require the
plaintiff to file a bond to indemnify the defendant in
case the complaint should be found to be malicious.
If during the pendency of the civil action, an
information should be presented by the prosecuting
attorney, the civil action shall be suspended until the
termination of the criminal proceedings.
Please refer to previous discussions on the
provisions.
IN CASES OF MALICIOUS PROSECUTION

Mijares vs. CA: Moral damages cannot be recovered

from a person who has filed a complaint against
another in good faith, or without malice or bad faith.
If damage results from the filing of the complaint, it
is damnum absque injuria.
Castillo vs. Castillo: The adverse result of an action
does not per se make the act wrongful and subject
the actor to the payment of moral damages. The law
could not have meant to impose a penalty on the right
to litigate; such right is so precious that moral
damages may not be charged on those who may
exercise it erroneously.

Nominal Damages
Nominal damages consist in damages awarded, not
for purposes of indemnifying the plaintiff for any loss
suffered, but for the vindication or recognition of a
right violated by the defendant.
REQUISITES AND CHARACTERISTICS
(1) Invasion or violation of any legal or property right.
(2) No proof of loss is required.
(3) The award is to vindicate the right violated.
WHEN AWARDED
Art. 2221. Nominal damages are adjudicated in order
that a right of the plaintiff, which has been violated
or invaded by the defendant, may be vindicated or
recognized, and not for the purpose of indemnifying
the plaintiff for any loss suffered by him.
Art. 2222. The court may award nominal damages in
every obligation arising from any source enumerated
in article 1157, or in every case where any property
right has been invaded.
Art. 2223. The adjudication of nominal damages
shall preclude further contest upon the right
involved and all accessory questions, as between the
parties to the suit, or their respective heirs and
assigns.
General Rule: One does not ask for nominal
damages, and it is in lieu of the actual, moral,
temperate, or liquidated damages.
Nominal damages are incompatible with: actual,
temperate and exemplary damages.
Armovit vs. CA: Nominal damages cannot co-exist
with actual or compensatory damages.
Francisco v. Ferrer: No moral or exemplary damages
was awarded. Nevertheless, when confronted with
their failure to deliver on the wedding day the
wedding cake ordered and paid for, petitioners gave
the lame excuse that delivery was probably delayed
because of the traffic, when in truth, no cake could
be delivered because the order slip got lost. For such
prevarication, petitioners must be held liable for
nominal damages for insensitivity, inadvertence or
inattention to their customer's anxiety and need of
the hour.

Temperate Damages

Art. 2224. Temperate or moderate damages, which

are more than nominal but less than compensatory
damages, may be recovered when the court finds
that some pecuniary loss has been suffered but its
amount cannot, from the nature of the case, be
provided with certainty.
Art. 2225. Temperate damages must be reasonable
under the circumstances.
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PAGE 371

These damages are awarded for pecuniary loss, in an

amount that, from the nature of the case, cannot be

proved with certainty.
REQUISITES
(1) Actual existence of pecuniary loss
(2) The nature and circumstances of the loss
prevents proof of the exact amount
(3) They are more than nominal and less than
compensatory.
(4) Causal connection between the loss and the
defendants act or omission.
(5) Amount must be reasonable.
In cases where the resulting injury might be
continuing and possible future complications directly
arising from the injury, while certain to occur are
difficult to predict, temperate damages can and
should be awarded on top of actual or compensatory
damages; in such cases there is no incompatibility
between actual and temperate damages.
Citytrust Bank vs. IAC: Temperate damages are
incompatible with nominal damages hence, cannot
be granted concurrently.
Pleno vs. CA: Temperate damages are included
within the context of compensatory damages (RCPI
vs. CA).
There are cases where from the nature of the case,
definite proof of pecuniary loss cannot be offered,
although the court is convinced that there has been
such loss. For instance, injury to one's commercial
credit or to the goodwill of a business firm is often
hard to show certainty in terms of money. (NOTE: In
this case actual and temperate damages were
awarded. It is postulated that the actual damages is
for the car while the temperate damages is for the lost
actual income not sufficiently proved.)

Liquidated Damages

Art. 2226. Liquidated damages are those agreed

upon by the parties to a contract, to be paid in case
of breach thereof.
Art. 2227. Liquidated damages, whether intended as
an indemnity or a penalty, shall be equitably reduced
if they are iniquitous or unconscionable.
Liquidated damages are those damages agreed
upon by the parties to a contract to be paid in case of
breach thereof.
It differs from a penal clause in that in the latter case
the amount agreed to be paid may bear no relation
to the probable damages resulting from the breach.
Basically, a penalty is ad terrorem, while liquidated
damages are ad reparationem.
REQUISITES AND CHARACTERISTICS
(1) Liquidated damages must be validly stipulated.
(2) There is no need to prove the amount of actual
damages.
(3) Breach of the principal contract must be proved.

RULES GOVERNING BREACH OF CONTRACT

Art. 2228. When the breach of the contract
committed by the defendant is not the one
contemplated by the parties in agreeing upon the
liquidated damages, the law shall determine the
measure of damages, and not the stipulation.
(a) These damages are agreed upon in a contract in
case of breach thereof.
(b) There is no need to prove the amount, only the
fact of the breach.
(c) The amount can be reduced if:
(1) unconscionable as determined by the court
(2) partial or irregular performance.
General Rule: The penalty shall substitute the
indemnity for damages and the payment of the
interests in case or breach.
Exceptions
(1) When there is a stipulation to the contrary.
(2) When the obligor is sued for refusal to pay the
agreed penalty.
(3) When the obligor is guilty of fraud.

Exemplary Or Corrective
Damages
Art. 2229. Exemplary or corrective damages are
imposed, by way of example or correction for the
public good, in addition to the moral, temperate,
liquidated or compensatory damages.
In common law, these damages were termed
punitive.
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PAGE 372

PNB vs. CA: However, the award of P1,000,000

exemplary damages is also far too excessive and
should likewise be reduced to an equitable level.
Exemplary damages are imposed not to enrich one
party or impoverish another but to serve as a
deterrent against or as a negative incentive to curb
socially deleterious actions.
WHEN RECOVERABLE
IN CRIMINAL OFFENSES; NCC ART. 2230
Art. 2230. In criminal offenses, exemplary damages
as a part of the civil liability may be imposed when
the crime was committed with one or more
aggravating circumstances. Such damages are
separate and distinct from fines and shall be paid to
the offended party.
Award of exemplary damages is part of the civil
liability, not of the penalty.
Damages are paid to the offended party separately
from the fines.
IN QUASI-DELICTS; NCC ART. 2231
Art. 2231. In quasi-delicts, exemplary damages may
be granted if the defendant acted with gross
negligence.

IN CONTRACTS AND QUASI-CONTRACTS; NCC ART.

2232
Art. 2232. In contracts and quasi-contracts, the court
may award exemplary damages if the defendant
acted in a wanton, fraudulent, reckless, oppressive,
or malevolent manner.
REQUISITES
ARTS. 2233,

2234
Art. 2233. Exemplary damages cannot be recovered
as a matter of right; the court will decide whether or
not they should be adjudicated.
Art. 2234. While the amount of the exemplary
damages need not be proved, the plaintiff must
show that he is entitled to moral, temperate or
compensatory damages before the court may
consider the question of whether or not exemplary
damages should be awarded. In case liquidated
damages have been agreed upon, although no proof
of loss is necessary in order that such liquidated
damages may be recovered, nevertheless, before the
court may consider the question of granting
exemplary in addition to the liquidated damages, the
plaintiff must show that he would be entitled to
moral, temperate or compensatory damages were it
not for the stipulation for liquidated damages.
Art. 2235. A stipulation whereby exemplary damages
are renounced in advance shall be null and void.
Requisites to recover exemplary damages and
liquidated damages agreed upon
The plaintiff must show that he/she is entitled to
moral, temperate or compensatory damages:
If arising from
When exemplary
damages are granted
Art.
2230
Crimes
the crime was
committed with an
aggravating
circumstance/s
Art.
2231
Quasi-delicts
defendant acted with
gross negligence
Art.
2232
Contracts and
Quasi- contracts
defendant acted in a
wanton, fraudulent,
reckless, oppressive, or
malevolent manner
(WFROMM)
General Principles

(1) Exemplary damages cannot be awarded alone:

they must be awarded IN ADDITION to moral,
temperate, liquidated or compensatory
damages.
(2) The purpose of the award is to deter the
defendant (and others in a similar condition)
from a repetition of the acts for which exemplary
damages were awarded; hence, they are not
recoverable as a matter of right.
(3) The defendant must be guilty of other malice or
else negligence above the ordinary.
(4) Plaintiff is not required to prove the amount of
exemplary damages.
a. But plaintiff must show that he is entitled to
moral, temperate, or compensatory
damage; that is, substantial damages, not
purely nominal ones. This requirement
applies even if the contract stipulates
liquidated damages.
b. The amount of exemplary damage need not
be pleaded in the complaint because the
same cannot be proved. It is merely
incidental or dependent upon what the
court may award as compensatory
damages.
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DAMAGES IN CASE OF DEATH

RE. CRIMES AND QUASI-DELICTS

Art. 2206. The amount of damages for death caused

by a crime or quasi-delict shall be at least three
thousand pesos, even though there may have been
mitigating circumstances. In addition:
(1) The defendant shall be liable for the loss of the
earning capacity of the deceased, and the
indemnity shall be paid to the heirs of the latter;
such indemnity shall in every case be assessed
and awarded by the court, unless the deceased
on account of permanent physical disability not
caused by the defendant, had no earning
capacity at the time of his death;
(2) If the deceased was obliged to give support
according to the provisions of article 291, the
recipient who is not an heir called to the
decedent's inheritance by the law of testate or
intestate succession, may demand support from
the person causing the death, for a period not
exceeding five years, the exact duration to be
fixed by the court;
(3) The spouse, legitimate and illegitimate
descendants and ascendants of the deceased
may demand moral damages for mental
anguish by reason of the death of the deceased.
In death caused by breach of conduct by a common
crime
Heirs of Raymundo Castro vs. Bustos (1969): when

death occurs as a result of a crime, the heirs of the

deceased are entitled to the following items of
damages:
(1) As indemnity for the death of the victim of the
offense P12,000.00, without the need of any
evidence or proof of damages, and even though
there may have been mitigating circumstances
attending the commission of the offense.
(2) As indemnity for loss of earning capacity of the
deceased an amount to be fixed by the Court
according to the circumstances of the deceased
related to his actual income at the time of death
and his probable life expectancy, the said
indemnity to be assessed and awarded by the
court as a matter of duty, unless the deceased
had no earning capacity at said time on account
of permanent disability not caused by the
accused. If the deceased was obliged to give
support, under Art. 291, Civil Code, the recipient
who is not an heir, may demand support from
the accused for not more than five years, the
exact duration to be fixed by the court.
(3) As moral damages for mental anguish, an
amount to be fixed by the court. This may be
recovered even by the illegitimate descendants
and ascendants of the deceased.
(4) As exemplary damages, when the crime is
attended by one or more aggravating
circumstances, an amount to be fixed in the
discretion of the court, the same to be
considered separate from fines.
(5) As attorney's fees and expresses of litigation,
the actual amount thereof, (but only when a
separate civil action to recover civil liability has
been filed or when exemplary damages are
awarded).
(6) Interests in the proper cases.
(7) It must be emphasized that the indemnities for
loss of earning capacity of the deceased and for
moral damages are recoverable separately from
and in addition to the fixed sum of P12,000.00
corresponding to the indemnity for the sole fact
of death, and that these damages may, however,
be respectively increased or lessened according
to the mitigating or aggravating circumstances,
except items 1 and 4 above, for obvious reasons.
Formula for the net earning capacity
People vs. Aringue (1997):
Net earning capacity = Life expectancy * (Gross
annual income Reasonable living expenses)
Where:
Life expectancy = 2/3 * (80 age of victim at the
time of death)
Tan, et al. vs. OMC Carriers, Inc. (2011): As a rule,
documentary evidence should be presented to

substantiate the claim for loss of earning capacity.

By way of exception, damages for loss of earning
capacity may be awarded despite the absence of
documentary evidence when: (1) the deceased is selfemployed
and earning less than the minimum wage
under current labor laws, in which case, judicial
notice may be taken of the fact that in the deceased's
line of work, no documentary evidence is available; or
(2) the deceased is employed as a daily wage worker
earning less than the minimum wage under current
labor laws.

Graduation of Damages

DUTY OF THE INJURED PARTY

Art. 2203. The party suffering loss or injury must
exercise the diligence of a good father of a family to
minimize the damages resulting from the act or
omission in question.
Lim and Gunnaban vs. CA (2002): Article 2203 of the
Civil Code exhorts parties suffering from loss or injury
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to exercise the diligence of a good father of a family

to minimize the damages resulting from the act or
omission in question. One who is injured then by the
wrongful or negligent act of another should exercise
reasonable care and diligence to minimize the
resulting damage. Anyway, he can recover from the
wrongdoer money lost in reasonable efforts to
preserve the property injured and for injuries incurred
in attempting to prevent damage to it.
BURDEN OF PROOF
The DEFENDANT has the burden of proof to
establish that the victim, by the exercise of the
diligence of a good father of a family, could have
mitigated the damages. In the absence of such
proof, the amount of damages cannot be reduced.
Note:
The victim is required only to take such steps as an
ordinary prudent man would reasonably adopt for
his own interest.
RULES
IN CRIMES

Art. 2204. In crimes, the damages to be adjudicated

may be respectively increased or lessened according
to the aggravating or mitigating circumstances.
IN QUASI-DELICTS
Art. 2214. In quasi-delicts, the contributory
negligence of the plaintiff shall reduce the damages
that he may recover.
CONTRIBUTORY NEGLIGENCE

Genobiagon vs. CA (1989): The alleged contributory

negligence of the victim, if any, does not exonerate
the accused in criminal cases committed through
reckless imprudence, since one cannot allege the
negligence of another to evade the effects of his own
negligence.

Rakes vs. Atlantic (1907): If so, the disobedience of

the plaintiff in placing himself in danger contributed
in some degree to the injury as a proximate,
although not as its primary cause.
(Supreme Court in this case cited numerous foreign
precedents, mostly leaning towards the doctrine that
contributory negligence on the part of the plaintiff
did not exonerate defendant from liability, but it led
to the reduction of damages awarded to the plantiff.)
Cangco vs. Manila Railroad Co. (1918): In determining
the question of contributory negligence in
performing such act that is to say, whether the
passenger acted prudently or recklessly the age,
sex, and physical condition of the passenger are
circumstances necessarily affecting the safety of the
passenger, and should be considered.
PLAINTIFFS NEGLIGENCE
Manila Electric vs. Remonquillo (1956): Even if Manila
Electric is negligent, in order that it may be held
liable, its negligence must be the proximate and
direct cause of the accident.
Bernardo vs. Legaspi (1914): Both of the parties
contributed to the proximate cause; hence, they
cannot recover from one another.
IN CONTRACTS, QUASI-CONTRACTS AND QUASI-DELICTS
Art. 2215 In contracts, quasi-contracts, and quasidelicts,
the court may equitably mitigate the
damages under circumstances other than the case
referred to in the preceding article, as in the
following instances:
(1) That the plaintiff himself has contravened the
terms of the contract;
(2) That the plaintiff has derived some benefit as a
result of the contract;
(3) In cases where exemplary damages are to be
awarded, that the defendant acted upon the
advice of counsel;
(4) That the loss would have resulted in any event;
(5) That since the filing of the action, the defendant
has done his best to lessen the plaintiff's loss or
injury.
INSTANCES OF GROUNDS FOR MITIGATION OF DAMAGES

(a) For Contracts:

(1) Violation of terms of the contract by the
plaintiff himself;
(2) Obtention or enjoyment of benefit under the
contract by the plaintiff himself;
(3) Defendant acted upon advice of counsel in
cases where exemplary damages are to be
awarded such as under Articles 2230, 2231,
and 2232;
(4) Defendant has done his best to lessen the
plaintiffs injury or loss.
(b) For Quasi-Contracts:
(1) In cases where exemplary damages are to

be awarded such as in Art. 2232;

(2) Defendant has done his best to lessen the
plaintiffs injury or loss.
(c) For Quasi-Delicts:
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(1) That the loss would have resulted in any

event because of the negligence or omission
of another, and where such negligence or
omission is the immediate and proximate
cause of the damage or injury;
(2) Defendant has done his best to lessen the
plaintiffs injury or loss.
RULE WHEN CONTRACTING PARTIES ARE IN PARI DELICTO

Generally, parties to a void agreement cannot expect

the aid of the law; the courts leave them as they are,
because they are deemed in pari delicto or "in equal
fault." In pari delicto is "a universal doctrine which
holds that no action arises, in equity or at law, from
an illegal contract; no suit can be maintained for its
specific performance, or to recover the property
agreed to be sold or delivered, or the money agreed
to be paid, or damages for its violation; and where
the parties are in pari delicto, no affirmative relief of
any kind will be given to one against the other."
This rule, however, is subject to exceptions that
permit the return of that which may have been given
under a void contract to:
(a) the innocent party (Arts. 1411-1412, Civil Code);
(b) the debtor who pays usurious interest (Art. 1413,
Civil Code);
(c) the party repudiating the void contract before
the illegal purpose is accomplished or before
damage is caused to a third person and if public
interest is subserved by allowing recovery (Art.
1414, Civil Code);
(d) the incapacitated party if the interest of justice
so demands (Art. 1415, Civil Code);
(e) the party for whose protection the prohibition by
law is intended if the agreement is not illegal
per se but merely prohibited and if public policy
would be enhanced by permitting recovery (Art.
1416, Civil Code); and
(f) the party for whose benefit the law has been
intended such as in price ceiling laws (Art. 1417,
Civil Code) and labor laws (Arts. 1418-1419, Civil
Code).
LIQUIDATED DAMAGES
Art. 2227. Liquidated damages, whether intended as
an indemnity or a penalty, shall be equitably reduced
if they are iniquitous or unconscionable.
COMPROMISE
Art. 2031. The courts may mitigate the damages to
be paid by the losing party who has shown a sincere
desire for a compromise.

Miscellaneous Rules
DAMAGES THAT CANNOT CO-EXIST
NOMINAL WITH OTHER DAMAGES

Art. 2223. The adjudication of nominal damages

shall preclude further contest upon the right
involved and all accessory questions, as between the
parties to the suit, or their respective heirs and
assigns.
Vda. De Medina vs. Cresencia (1956): The propriety of
the damages awarded has not been questioned,
Nevertheless, it is patent upon the record that the
award of P10,000 by way of nominal damages is
untenable as a matter of law, since nominal
damages cannot co-exist with compensatory
damages. The purpose of nominal damages is to
vindicate or recognize a right that has been violated,
in order to preclude further contest thereon; and
not for the purpose of indemnifying the Plaintiff for
any loss suffered by him (Articles 2221, 2223, new
Civil Code.) Since the court below has already
awarded compensatory and exemplary damages
that are in themselves a judicial recognition that
Plaintiffs right was violated, the award of nominal
damages is unnecessary and improper. Anyway, ten
thousand pesos cannot, in common sense, be
deemed nominal.
ACTUAL AND LIQUIDATED

Art. 2226. Liquidated damages are those agreed

upon by the parties to a contract, to be paid in case
of breach thereof.
DAMAGES THAT MUST CO-EXIST
EXEMPLARY WITH MORAL, TEMPERATE, LIQUIDATED OR
COMPENSATORY

Francisco vs. GSIS (1963): There is no basis for

awarding exemplary damages either, because this
species of damages is only allowed in addition to
moral, temperate, liquidated, or compensatory
damages, none of which have been allowed in this
case, for reasons herein before discussed.
Scott Consultants & Resource Development Corp. vs.
CA (1995): There was, therefore, no legal basis for the
award of exemplary damages since the private
respondent was not entitled to moral, temperate, or
compensatory damages and there was no
agreement on stipulated damages.
DAMAGES THAT MUST STAND ALONE
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NOMINAL DAMAGES

Art. 2223. The adjudication of nominal damages

shall preclude further contest upon the right
involved and all accessory questions, as between the
parties to the suit, or their respective heirs and
assigns.