Pointers for Civil Law

2015 Bar Examinations

Professor Victoria V. Loanzon
Preliminary Title:
Effect and Application of Laws
General rule when a law takes effect: 15 days after publication in a newspaper of general
circulation(Basa v. Mercado, 61 Phil. 636) ; except when the law provides another date of
effectivity; remember that a law which produces a burden on an individual must be published
to make liable (Lara v. Del Rosario, 154); even during the period of Martial Law, S.C.
required publication of issuances of President Marcos directives (Tanada v. Tuvera,
1985);interpretative in nature, internal rules (CIR v. Lhullier, 2003 - when administrative
agency goes beyond merely providing for a means for facilitating transactions but
substantially increases the burden on the affected party, then it is no longer covered) and
matters which affect reassignment and movement of personnel need not be
published(exceptions cited in Tanada v. Tuvera); Municipal ordinances shall be governed by
the Local Government Code (Hagonoy Market Vendors Assn v. Mun of Hagonay, 2002
this is the exception to the rule on publication in newspaper of general circulation and
Official Gazette)
Please note:
Nagkakaisang Maralita ng Sitio Masigasing, Inc. v. Military Shrine Services- PVAO (June 2013):
The Court held that the publication must be in full or it is no publication at all since its purpose is to
inform the public of the contents of the laws. Without publication, the note never had any legal force
and effect.
Lim v. DBP (July 1, 2013) The Court held that unless the parties stipulate, personal notice to

the mortgagor in extrajudicial foreclosure proceedings is not necessary because Section 3 of

Act 3135 only requires the posting of the notice of sale in three public places and the
publication of that notice in a newspaper of general circulation.
What is a newspaper of general circulation?
1. It is published for dissemination of local news and general information.
2. It has bonafide subscription list of paying subscribers
3. It is published at regular intervals. (Newspapers of this nature are normally
accredited by the courts)
4. It is not a newspaper devoted to the interests or published for entertainment of a
particular class, profession, trade, calling, race or religious denomination.
Waiver of Rights (Article 6) to be valid there must be:
1. A vested right
2. A voluntary relinquishment of such vested right
3. The person waiving must know of the existence of his right
General Rule: It is not possible to waive rights and obligations except:
1. When authorized by law (Read Articles 488 and 662 of the Civil Code)
2. When authorized by the holder of the correlative right
Please check distinction between substitute parental authority and special parental
authority
Liability of schools for acts done by students under the Civil Code versus those covered
under the Family Code.
Conflict of Laws: Take note of the procedure on how a foreign judgment can be recognized
in Philippine jurisdiction; Review Article 26; study the effects of mixed marriages and the
adoption of a Filipino child by aliens (Read R.A. 8043).
Fujiki v. Marinay, June 26, 2013: The Court held that the Rule on Declaration of Absolute
Nullity of Void Marriages and Annulment of Voidable Marriages (A.M. No. 02-11-10-SC)

does not apply in a petition to recognize a foreign judgment relating to the status of a
marriage where one of the parties is a citizen of a foreign country. Moreover, in JulianoLlave v. Republic, this Court held that the rule in A.M. No. 02-11-10-SC that only the
husband or wife can file a declaration of nullity or annulment of marriage "does not apply if
the reason behind the petition is bigamy."
The Court further said that for Philippine courts to recognize a foreign judgment relating to
the status of a marriage where one of the parties is a citizen of a foreign country, the
petitioner only needs to prove the foreign judgment as a fact under the Rules of Court. To be
more specific, a copy of the foreign judgment may be admitted in evidence and proven as a
fact under Rule 132, Sections 24 and 25, in relation to Rule 39, Section 48(b) of the Rules of
Court. Petitioner may prove the Japanese Family Court judgment through (1) an official
publication or (2) a certification or copy attested by the officer who has custody of the
judgment.
Roehr v. Rodriguez (2003): Divorce decrees obtained in foreign countries by foreigners
married to Filipino citizens are recognizable in our jurisdiction but the legal effects thereof
custody, care and support of children must still be determined by Philippine courts.
Van Dorn v. Romillo (1985): Owing to the nationality principle embodied in Article 15 of the
Civil Code, only Philippine nationals are covered by the policy against absolute divorces the
same being considered contrary to our concept of public police and morality. However, aliens
may obtain divorces abroad, which may be recognized in the Philippines, provided they are
valid according to their national law.

Check the facts presented in the question and take note of the effectivity of the Family
Code as the situation may call for a different ruling if marriage took place prior to the
effectivity.

Human Relations
Human Relations While there are only three (3) provisions under this topic, it is a staple
question in bar examinations. Anticipate a question which may involve a situation which may
raise issues related to differences of religion or cultural practice which may affect public
morals.
Abuse of Right
California Clothing, Inc.et al. v. Quinones (October 23, 2013): The Court held that in the
sphere of our law on human relations, the victim of a wrongful act or omission, whether done
wilfully or negligently, is not left without any remedy or recourse to obtain relief for the
damage or injury he sustained. Incorporated into our civil law are not only principles of
equity but also universal moral precepts which are designed to indicate certain norms that
spring from the fountain of good conscience and which are meant to serve as guides for
human conduct. First of these fundamental precepts is the principle commonly known as
"abuse of rights" under Article 19 of the Civil Code. It provides that 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."x x x The elements of abuse of rights are as
follows: (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.
Under the abuse of rights principle found in Article 19 of the Civil Code, a person must, in
the exercise of legal right or duty, act in good faith. He would be liable if he instead acted in
bad faith, with intent to prejudice another. Good faith refers to the state of mind which is
manifested by the acts of the individual concerned. It consists of the intention to abstain from
taking an unconscionable and unscrupulous advantage of another.35 Malice or bad faith, on

the other hand, implies a conscious and intentional design to do a wrongful act for a
dishonest purpose or moral obliquity.
Compare and contrast:
Shookat v. C.A. and Hermosisima v. C.A.: Breach of promise to marry is not actionable.
Pe v. Pe and Wassmer v. Velez: Breach of promise to marry coupled with some positive act
or event can make the party liable for damages.
Unjust Enrichment
Rivelisa Realty v. First sta. Ana Builders, Corp., January, 2014): Case law instructs that
under the principle of quantum meruit, a contractor is allowed to recover the reasonable
value of the thing or services rendered despite the lack of a written contract, in order to avoid
unjust enrichment. Quantum meruit means that, in an action for work and labor, payment
shall be made in such amount as the plaintiff reasonably deserves. The measure of recovery
should relate to the reasonable value of the services performed because the principle aims to
prevent undue enrichment based on the equitable postulate that it is unjust for a person to
retain any benefit without paying for it
Gonzalo v. Tarnate, Jr. (January 15, 2014): Unjust enrichment exists, according to Hulst v.
PR Builders, Inc., "when a person unjustly retains a benefit at the loss of another, or when a
person retains money or property of another against the fundamental principles of justice,
equity and good conscience." The prevention of unjust enrichment is a recognized public
policy of the State, for Article 22 of the Civil Code explicitly provides that "[e]very 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." It is well to note that Article 22 "is part of the chapter of the Civil Code on
Human Relations, the provisions of which were formulated as basic principles to be observed
for the rightful relationship between human beings and for the stability of the social order;
designed to indicate certain norms that spring from the fountain of good conscience; guides
for human conduct that should run as golden threads through society to the end that law may
approach its supreme ideal which is the sway and dominance of justice."
Locsin III v. Mekeni Food Corp., December 2013): There is unjust enrichment when a
person unjustly retains a benefit to the loss of another, or when a person retains money or
property of another against the fundamental principles of justice, equity and good
conscience. The principle of unjust enrichment requires two conditions: (1) that a person is
benefited without a valid basis or justification, and (2) that such benefit is derived at the
expense of another.
Note: While Article 36 on Prejudicial Question has been excluded, there might be a
possibility that facts presented may call application of the rules.
Review elements of prejudicial question
When asked about precedence of a prejudicial question,
1. Immediately determine if the two cases are criminal and civil in nature;
2. Filing of civil case prior to criminal case will allow suspension of criminal proceedings
3. Determine the elements of the offense committed in the criminal case
4. Review the reliefs sought in the civil case, if the case is decided in favor of the accused,
would it have any effect on the elements of the crime.
If civil case will have an effect on the elements of the crime, then there is a prejudicial
question. If none, then there is no prejudicial question. (Can be asked in Criminal Law)
Book I Persons
Capacity to Act:
Even if one has juridical capacity, the capacity to act is restricted and if one has a
capacity to act; it can enter into a juridical relationship.
Incapacity: natural (minority, insanity, deaf-mute, impotency); and civil (civil
interdiction, absence, insolvency, family relations, domicile)
Formalities of Marriage Review the requirements prior to celebration of marriage, the
solemnities of marriage and registration of act of marriage. Relate the vows of marriage with

the obligations under the Civil Code and constitutional protection of the family as basic unit
of society. Anticipate a question on property relations of the spouses in the event no prenuptial agreement is executed.
Macua vda de Avenido v. Tecla Hoybia Avenido, January 22, 2014: While a marriage
certificate is considered the primary evidence of a marital union, it is not regarded as the sole
and exclusive evidence of marriage. Jurisprudence teaches that the fact of marriage may be
proven by relevant evidence other than the marriage certificate. Hence, even a persons birth
certificate may be recognized as competent evidence of the marriage between his parents. In
the present case, due execution was established by the testimonies of Adela Pilapil, who was
present during the marriage ceremony, and of petitioner herself as a party to the event. The
subsequent loss was shown by the testimony and the affidavit of the officiating priest,
Monsignor Yllana, as relevant, competent and admissible evidence. Since the due execution
and the loss of the marriage contract were clearly shown by the evidence presented,
secondary evidencetestimonial and documentarymay be admitted to prove the fact of
marriage.
Republic v. Albios, October 16, 2013: Under Article 2 of the Family Code, for consent to be
valid, it must be (1) freely given and (2) made in the presence of a solemnizing officer. A
"freely given" consent requires that the contracting parties willingly and deliberately enter
into the marriage. Consent must be real in the sense that it is not vitiated nor rendered
defective by any of the vices of consent under Articles45 and 46 of the Family Code, such as
fraud, force, intimidation, and undue influence. Consent must also be conscious or
intelligent, in that the parties must be capable of intelligently understanding the nature of, and
both the beneficial or unfavorable consequences of their act. Their understanding should not
be affected by insanity, intoxication, drugs, or hypnotism.
The avowed purpose of marriage under Article 1 of the Family Code is for the couple to
establish a conjugal and family life. The possibility that the parties in a marriage might have
no real intention to establish a life together is, however, insufficient to nullify a marriage
freely entered into in accordance with law. The same Article 1 provides that the nature,
consequences, and incidents of marriage are governed by law and not subject to stipulation.
A marriage may, thus, only be declared void or voidable under the grounds provided by law.
There is no law that declares a marriage void if it is entered into for purposes other than
what the Constitution or law declares, such as the acquisition of foreign citizenship.
Therefore, so long as all the essential and formal requisites prescribed by law are present,
and it is not void or voidable under the grounds provided by law, it shall be declared valid.
Republic v. Cantor, December 10, 2013: Before a judicial declaration of presumptive death
can be obtained, it must be shown that the prior spouse had been absent for four consecutive
years and the present spouse had a well-founded belief that the prior spouse was already
dead. Under Article 41 of the Family Code, there are four (4) essential requisites for the
declaration of presumptive death:
1.That the absent spouse has been missing for four consecutive years, or two consecutive
years if the disappearance occurred where there is danger of death under the circumstances
laid down in Article 391, Civil Code;
2. That the present spouse wishes to remarry;
3. That the present spouse has a well-founded belief that the absentee is dead; and

4. That the present spouse files a summary proceeding for the declaration of presumptive
death of the absentee.
The present spouse has the burden of proof to show that all the requisites under Art. 41,
Family Code are present. In terms of declaration of presumptive death under Art. 41, a
stricter standard is imposed.
Well-founded belief depends upon the circumstances of each case. The present spouse must
prove that his/her belief was the result of diligent and reasonable efforts and inquiries to
locate the absent spouse and that based on these efforts and inquiries, he/she believes that
under the circumstances, the absent spouse is already dead. It requires exertion of active
effort (not a mere passive one).
Recent jurisprudence on Property Relations in a regime of marriage:
Philip Matthews vs. Benjamin A. Taylor and Joselyn C. Taylor, G.R. No. 164584, June 22,
2009: The Supreme Court ruled: . . . we find and so hold that Benjamin has no right to
nullify the Agreement of Lease between Joselyn and petitioner. Benjamin, being an alien, is
absolutely prohibited from acquiring private and public lands in the Philippines. In any event,
he had and has no capacity or personality to question the subsequent lease of the Boracay
property by his wife on the theory that in so doing, he was merely exercising the prerogative
of a husband in respect of conjugal property. To sustain such a theory would countenance
indirect contraversion of the constitutional prohibition. If the property were to be declared
conjugal, this would accord the alien husband a substantial interest and right over the land, as
he would then have a decisive vote as to its transfer or disposition. This is a right that the
Constitution does not permit him to have.
The situation here can be distinguished from the situation in Borromeo vs. Descallar, G.R.
No. 159310, February 24, 2009. In Borromeo, the ex-boyfriend (who is a non-Philippine
national and who funded the purchase of the parcel of land) already sold the land to a
qualified Philippine national; thus, the Supreme Court reiterated its earlier rulings that the
while the acquisition of land by a foreigner violates the Constitution, its subsequent transfer
to a qualified Philippine national cured the defect in the original transaction.
Bobby Tan v. Grace Andrade et al (August 2013): The Court held that Article 160 of the
Civil Code provides that "[a]ll property of the marriage is presumed to belong to the conjugal
partnership; unless it be proved that it pertains exclusively to the husband or to the wife." For
this presumption to apply, the party invoking the same must, however, preliminarily prove
that the property was indeed acquired during the marriage.
Lim v. PCIB now known as BDO, January 15, 2014: the Court held that it is not unaware
that all property of the marriage is presumed to be conjugal, unless it is shown that it is
owned exclusively by the husband or the wife; that this presumption is not overcome by the
fact that the property is registered in the name of the husband or the wife alone; and that the
consent of both spouses is required before a conjugal property may be mortgaged. However,
the Court found it iniquitous to apply the foregoing presumption especially since the nature
of the mortgaged property was never raised as an issue before the RTC, the CA, and even
before this Court. In fact, petitioner never alleged in his Complaint that the said property was
conjugal in nature. Hence, respondent bank had no opportunity to rebut the said presumption.
Sevilla, Jr. v. Aguila, September 23, 2013. In Dio v. Dio, the Court held that Article 147
of the Family Code applies to the union of parties who are legally capacitated and not barred
by any impediment to contract marriage, but whose marriage is nonetheless declared void

under Article 36 of the Family Code, as in this case. The same shall be shall be governed by
the rules on co-ownership.
In the absence of proof to the contrary, properties acquired while they lived together shall be
presumed to have been obtained by their joint efforts, work or industry, and shall be owned
by them in equal shares. For purposes of this Article, a party who did not participate in the
acquisition by the other party of any property shall be deemed to have contributed jointly in
the acquisition thereof if the formers efforts consisted in the care and maintenance of the
family and of the household.
Neither party can encumber or dispose by acts inter vivos of his or her share in the property
acquired during cohabitation and owned in common, without the consent of the other, until
after the termination of their cohabitation.
Bangayan v. Bangayan, July 2013: The Court saw no inconsistency in finding the marriage
between Benjamin and Sally null and void ab initio and, at the same time, non-existent.
Under Article 35 of the Family Code, a marriage solemnized without a license, except those
covered by Article 34 where no license is necessary, "shall be void from the beginning." In
this case, the marriage between Benjamin and Sally was solemnized without a license. The
marriage between Benjamin and Sally was also non-existent. Applying the general rules on
void or inexistent contracts under Article 1409 of the Civil Code, contracts which are
absolutely simulated or fictitious are "inexistent and void from the beginning."Thus, the
Court of Appeals did not err in sustaining the trial courts ruling that the marriage between
Benjamin and Sally was null and void ab initio and non-existent.
Benjamin and Sally cohabitated without the benefit of marriage. Thus, only the properties
acquired by them through their actual joint contribution of money, property, or industry shall
be owned by them in common in proportion to their respective contributions in accordance
with Art.148 of the Family Code.

Paternity and Filiations Expect a question on filiations/parental authority/support and this

might be related parental authority and the right to succession. Check your provisions on
admissibility of DNA to prove paternity.
Grande v. Antonio, February 2014): Art. 176. Illegitimate children shall use the surname
and shall be under the parental authority of their mother, and shall be entitled to support in
conformity with this Code. However, illegitimate children may use the surname of their
father if their filiation has been expressly recognized by their father through the record of
birth appearing in the civil register, or when an admission in a public document or private
handwritten instrument is made by the father. Provided, the father has the right to institute an
action before the regular courts to prove non-filiation during his lifetime. The legitime of
each illegitimate child shall consist of one-half of the legitime of a legitimate child.
From the foregoing provisions, it is clear that the general rule is that an illegitimate child
shall use the surname of his or her mother. The exception provided by RA 9255 is, in case his
or her filiation is expressly recognized by the father through the record of birth appearing in
the civil register or when an admission in a public document or private handwritten
instrument is made by the father. In such a situation, the illegitimate child may use the
surname of the father.

Persons and Personality Since the Political Law Questions did not cover the viability of a
person, check the relevant provisions on this and the S.C. ruling on the constitutionality of
the RH Bill. Review Geluz ruling on this. Review also Cagandahan and Silvestre ruling on
gender as it relates to Civil Registrar; use of surnames.
Recent jurisprudence on Annulment of Marriage:
The grounds for annulment of marriage are:
1. Absence of Parental Consent. A marriage was solemnized and one or the other party was
eighteen (18) years of age or over but below twenty-one (21) and consent was not given by
the parents, guardian or person having substitute parental authority. The Petition of
Annulment must be filed within five (5) years of having attained the age twenty-one.
However, if the parties freely cohabited with the other as husband and wife after having
reached the age of twenty-one (21) a Petition of Annulment can no longer be filed.
2. Mental Illness. One or the either party was of unsound mind at the moment of the
marriage. But if the parties freely cohabited with each other after he or she came to reason
the law prohibits the filing of a Petition.
3. Fraud. That the consent of either party was obtained by fraud, unless such party once
having knowledge of the fraud freely cohabited with the other as husband and wife. The
petition must be filed within five (5) of finding out the facts of the fraud.
4. That the consent of either party was obtained by force, intimidation or undue influence.
Except when the same has ceased and the party filing the petition freely cohabited with the
other as husband and wife. The injured party must file within five (5) years from the point in
time the force, intimidation or undue influence disappeared or came to an end.
5. One or the other party was physically incapable of consummating the marriage, and
such incapacity continues and appears to be incurable. The filing of the Petition of
Annulment must be filed within five (5) years after the marriage.
6. Either party was at the time of marriage afflicted with a sexually-transmitted-disease
(STD) found to be serious and seems to be incurable. This may also constitute fraud. The
filing of the Petition of Annulment must be filed within five (5) years after the marriage.
SEPARATION: being separated from your spouse with or without communication is not
grounds for annulment. It does not matter how many years you are separated. There is no law
that annuls or voids a marriage automatically. Only a judge in a court of law can annul, void
or nullify a marriage.

INFIDELITY: not a ground for annulment

Republic of the Philippines v. Rodolfo O. De Gracia, G.R. No. 171557. February 12, 2014:
Psychological incapacity, as a ground to nullify a marriage under Article 36 of the Family
Code, should refer to no less than a mental not merely physical incapacity that causes a
party to be truly incognitive of the basic marital covenants that concomitantly must be
assumed and discharged by the parties to the marriage which, as so expressed in Article 68 of
the Family Code, among others, include their mutual obligations to live together, observe

love, respect and fidelity and render help and support. There is hardly any doubt that the
intendment of the law has been to confine the meaning of psychological incapacity to the
most serious cases of personality disorders clearly demonstrative of an utter insensitivity or
inability to give meaning and significance to the marriage. To the Courts mind, Natividads
refusal to live with Rodolfo and to assume her duties as wife and mother as well as her
emotional immaturity, irresponsibility and infidelity do not rise to the level of psychological
incapacity that would justify the nullification of the parties marriage. Indeed, to be declared
clinically or medically incurable is one thing; to refuse or be reluctant to perform ones duties
is another. To hark back to what has been earlier discussed, psychological incapacity refers
only to the most serious cases of personality disorders clearly demonstrative of an utter
insensitivity or inability to give meaning and significance to the marriage.
Dedel v. CA: The Court held that respondents emotional immaturity and irresponsibility
could not be equated with psychological incapacity as it was not shown that these acts are
manifestations of a disordered personality which make her completely unable to discharge
the essential marital obligations of the marital state, not merely due to her youth, immaturity
or sexual promiscuity. Although expert opinions furnished by psychologists regarding the
psychological temperament of parties are usually given considerable weight by the courts,
the existence of psychological incapacity must still be proven by independent evidence.

Renato Reyes So vs. Lorna Valera, G.R. No. 150677, June 5, 2009: The spouses had a
common law relationship for 18 years and had three children before contracting marriage
which they sought to annul but the Court did not grant the annulment.
The Supreme Court noted that there was no proof that Lornas psychological disorder was
incurable since the psychologists testimony itself glaringly failed to show that the
respondents behavioral disorder was medically or clinically permanent or incurable as
established jurisprudence requires. Neither did the psychologist testify that the disorder was
grave enough to bring about the disability of the party to assume the essential obligations of
marriage. In Molina, we ruled that mild characterological peculiarities, mood changes and
occasional emotional outbursts cannot be accepted as indicative of psychological incapacity.
The illness must be shown as downright incapacity or inability, not a refusal, neglect or
difficulty, much less ill will. In other words, the root cause should be a natal or supervening
disabling factor in the person, an adverse integral element in the personality structure that
effectively incapacitates the person from really accepting and thereby complying with the
obligations essential to marriage.
Iwasawa v. Gangan et al., September 2013: As correctly pointed out by the OSG, the
documentary exhibits taken together concretely establish the nullity of the marriage of
petitioner to private respondent on the ground that their marriage is bigamous. The exhibits
directly prove the following facts: (1) that private respondent married Arambulo on June 20,
1994 in the City of Manila; (2) that private respondent contracted a second marriage this time
with petitioner on November 28, 2002 in Pasay City; (3) that there was no judicial
declaration of nullity of the marriage of private respondent with Arambulo at the time she
married petitioner; (3) that Arambulo died on July 14, 2009 and that it was only on said date
that private respondents marriage with Arambulo was deemed to have been dissolved; and
(4) that the second marriage of private respondent to petitioner is bigamous, hence null and

void, since the first marriage was still valid and subsisting when the second marriage was
contracted.
Office of the Court Administrator vs. Necessario, 694 SCRA 350): The five-year period of
cohabitation should be one of a perfect union valid under the law but rendered imperfect only by the
absence of the marriage contract. The parties should have been capacitated to marry each other
during the entire period and not only at the time of the marriage.

Book II: Property and Related Transactions (Registration of Property (Land Titles and
Deeds)/Lease/Mortgage) Basically review: Modes of acquiring property/ Registration of
Property. The significance of the Torrens system of titling of lands; classification of lands;
what lands may be available for disposition (Read Boracay Island Case penned by Justice
Ruben Reyes. Take note of the constitutional provision that it is the sole prerogative of the
President to reclassify land of public domain.); Citizenship requirement; liens,
encumbrances, annotation, attachment, foreclosure (judicial and extrajudicial), exercise of
right of redemption
Ownership and related transactions: Read on accession, accretion and reclamation;
easement of right of way; how usufruct is effected (by government and private parties); right
to possession and other contracts which may affect the exercise of the right of ownership
(lease, mortgage, legacy); foreclosure; right of redemption
Recent jurisprudence on Property:
1. On Regalian Doctrine and disposition of land of public domain
Republic of the Philippines v. Emmanuel C. Cortez, G.R. No. 186639. February 5, 2014.
The Court held that to prove that the land subject of an application for registration is
alienable; an applicant must establish the existence of a positive act of the government. The
annotation in the survey plan is not a conclusive proof.
The Civil Code makes it clear that patrimonial property of the State may be acquired by
private persons through prescription. This is brought about by Article 1113, which states that
[a]ll things which are within the commerce of man are susceptible to prescription, and that
[p]roperty of the State or any of its subdivisions not patrimonial in character shall not be the
object of prescription.Nonetheless, Article 422 of the Civil Code states that [p]roperty of
public dominion, when no longer intended for public use or for public service, shall form part
of the patrimonial property of the State. Without such express declaration, the property, even
if classified as alienable or disposable, remains property of the public dominion, pursuant to
Article 420(2), and thus incapable of acquisition by prescription. It is only when such
alienable and disposable lands are expressly declared by the State to be no longer intended
for public service or for the development of the national wealth that the period of acquisitive
prescription can begin to run. Such declaration shall be in the form of a law duly enacted by
Congress or a Presidential Proclamation in cases where the President is duly authorized by
law.
Sps. Antonio Fortuna and Erlinda Fortuna v. Republic of the Philippines,G.R. No.
173423, March 5, 2014. Jurisprudence has required that an applicant for registration of title
acquired through a public land grant must present incontrovertible evidence that the land
subject of the application is alienable or disposable by establishing the existence of a positive
act of the government. Thus, it is essential for any applicant for registration of title to
land derived through a public grant to establish foremost the alienable and disposable
nature of the land. The Public Land Act provisions on the grant and disposition of alienable
public lands, specifically, Sections 11 and 48(b), will find application only from the time that
a public land has been classified as agricultural and declared as alienable and disposable.

Republic of the Philippines represented by Aklan National Colleges of Fisheries (ANCF)

and Dr. Elenita R. Adrade, in her capacity as ANCF Superintendent v. Heirs of Maxima
Lachica Sin, namely: Salvacion L. Sin, Rosario S. Enriquez, Francisco L. Sin, Maria S.
Yuchintat, Manuel L. Sin, Jaime Cardinal Sin, Ramon L. Sin, and Ceferina S. Vita,G.R.
No. 157485, March 26, 2014.The requirements for judicial confirmation of imperfect title
are found in Section 48(b) of the Public Land Act, as amended by Presidential Decree No.
1073. The two requisites for judicial confirmation of imperfect or incomplete title under CA
No. 141, namely: (1) open, continuous, exclusive, and notorious possession and occupation
of the subject land by himself or through his predecessors-in-interest under a bona fide claim
of ownership since time immemorial or from June 12, 1945; and (2) the classification of the
land as alienable and disposable land of the public domain.
Republic of the Philippines v. Remman Enterprises, Inc. represented by Ronnie P.
Inocencio, G.R. No. 199310. February 19, 2014. Section 14(1) of P.D. No. 1529 refers to
the judicial confirmation of imperfect or incomplete titles to public land acquired under
Section 48(b) of Commonwealth Act (C.A.) No. 141, or the Public Land Act, as amended by
P.D. No. 1073. Under Section 14(1) of P.D. No. 1529, applicants for registration of title must
sufficiently establish: first, that the subject land forms part of the disposable and alienable
lands of the public domain; second, that the applicant and his predecessors-in-interest have
been in open, continuous, exclusive, and notorious possession and occupation of the same;
and third, that it is under a bona fide claim of ownership since June 12, 1945, or earlier.
2. Cases on Co-ownership:
Teodoro S. Teodoro, et al. v. Danilo Espino, et al., G.R. No. 189248, February 5, 2014. The Court
held that there is co-ownership whenever the ownership of an undivided thing or right belongs to
different persons. Art. 1078. When 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..
Neither party can exclude the other from possession.

Raul V. Arambulo and Teresita Dela Cruz v. Genaro Nolasco and Jeremy Spencer Nolasco,
G.R. No. 189420, March 26, 2014. The Court held that Article 493 of the Code defines the
ownership of the co-owner, clearly establishing that each co-owner shall have full ownership
of his part and of its fruits and benefits. Pertinent to this case, Article 493 dictates that each
one of the parties herein as co-owners with full ownership of their parts can sell their fully
owned part. The sale by the petitioners of their parts shall not affect the full ownership by the
respondents of the part that belongs to them. Their part which petitioners will sell shall be
that which may be apportioned to them in the division upon the termination of the coownership. The sale may be resorted to (a) when the right to partition the property is invoked
by any of the co-owners but because of the nature of the property, it cannot be
subdivided or its subdivision would prejudice the interests of the co-owners, and (b) the coowners are not in agreement as to who among them shall be allotted or assigned the entire
property upon proper reimbursement of the co-owners.
3. Cases on Purchaser in Good Faith:
Vallido vs. Pono, 696 SCRA 381: Although it is a recognized principle that a person dealing on a
registered land need not go beyond its certificate of title, it is also a firmly settled rule that where
there are circumstances which would put a party on guard and prompt him to investigate or inspect
the property being sold to him, as the presence of occupants/tenants thereon, it is expected from the
purchaser of a piece of land to inquire first into the status or nature of possession of the occupants.

The failure of a prospective buyer to take such precautionary steps would mean negligence on his
part and would preclude him from claiming or invoking the rights of a purchaser in good faith.

Homeowners Savings and Loan Bank v. Asuncion P. Felonia and Lydia C. De Guzman,
represented by Maribel Frias, et al., G.R. No. 189477. February 26, 2014. The Court held
that.when a prospective buyer is faced with facts and circumstances as to arouse his
suspicion, he must take precautionary steps to qualify as a purchaser in good faith. In
Spouses Mathay v. CA, we determined the duty of a prospective buyer: Although it is a
recognized principle that a person dealing on a registered land need not go beyond its
certificate of title, it is also a firmly settled rule that where there are circumstances which
would put a party on guard and prompt him to investigate or inspect the property being sold
to him, such as the presence of occupants/tenants thereon, it is of course, expected from the
purchaser of a valued piece of land to inquire first into the status or nature of possession of
the occupants, i.e., whether or not the occupants possess the land en concepto de dueo, in
the concept of the owner.. The failure of a prospective buyer to take such precautionary steps
would mean negligence on his part and would thereby preclude him from claiming or
invoking the rights of a purchaser in good faith.
Homeowners Savings and Loan Bank v. Asuncion P. Felonia and Lydia C. De Guzman,
rep. by Maribel Frias, et al., G.R. No. 189477. February 26, 2014. The Court said that lis
pendens is a Latin term which literally means, a pending suit or a pending litigation while a
notice of lis pendens is an announcement to the whole world that a real property is in
litigation, serving as a warning that anyone who acquires an interest over the property does
so at his own risk, or that he/she gambles on the result of the litigation over the property. It is
a warning to prospective buyers to take precautions and investigate the pending litigation.

Bank of Commerce v. Spouses San Pablo, Jr., 550 Phil. 805, 821 (2007): The Court has in
the past declared that a mortgagee has a right to rely in good faith on the certificate of title of
the mortgagor of the property offered as security, and in the absence of any sign that might
arouse suspicion, the mortgagee has no obligation to undertake further investigation. The
Court also ruled that [i]n cases where the mortgagee does not directly deal with the
registered owner of real property, the law requires that a higher degree of prudence be
exercised by the mortgagee. Specifically, the court cited Abad v. Sps. Guimba (503 Phil.
321, 331-332 (2005)), where it held: x x x While one who buys from the registered owner
does not need to look behind the certificate of title, one who buys from one who is not the
registered owner is expected to examine not only the certificate of title but all factual
circumstances necessary for [one] to determine if there are any flaws in the title of the
transferor, or in [the] capacity to transfer the land.
4. Cases involving Mortgage over Property
Martires vs. Chua, 694 SCRA 50: While indeed a notarized document enjoys the presumption of
regularity, the fact that a deed is notarized is not a guarantee of the validity of its contents. The
presumption is not absolute and may be rebutted by clear and convincing evidence to the contrary. In
the present case, the presumption cannot be made to apply, because aside from the regularity of its
notarization, the validity of the contents and execution of the subject Deed of Transfer was (sic)
challenged in the proceedings below where its prima facie validity was subsequently overthrown by
the questionable circumstances attendant in its supposed execution. These circumstances include: (1)
the alleged agreement between the parties that the ownership of the subject property be simply
assigned to petitioners instead of foreclosure of the contract of mortgage which was earlier entered
into by them; (2) the Deed of Transfer was executed by reason of the loan extended by petitioners to
respondent, the amount of the latter's outstanding obligation being the same as the amount of the
consideration for the assignment of ownership over the subject property; (3) the inadequacy of the

consideration; and (4) the claim of respondent that she had no intention of transferring ownership
of the subject property to petitioners.

Darcen vs. V.R. Gonzales Credit Ent., Inc. 695 SCRA 218: To accentuate the writs ministerial
character, the Court has consistently disallowed injunction to prohibit its issuance despite a pending
action for annulment of mortgage or the foreclosure itself.

Macaria Arguelles and the Heirs of the Deceased Petronio Arguelles v. Malarayat Rural
Bank, Inc., G.R. No. 200468, March 19, 2014. The Court said that although the instant case
does not involve a sale but only a mortgage, the same rule applies inasmuch as the law itself
includes a mortgagee in the term purchaser. Thus, where the mortgagor is not the registered
owner of the property but is merely an attorney-in-fact of the same, it is incumbent upon the
mortgagee to exercise greater care and a higher degree of prudence in dealing with such
mortgagor..
Ursal v. Court of Appeals (509 Phil. 628, 642 (2005)), The Court held that where the
mortgagee is a bank, it cannot rely merely on the certificate of title offered by the mortgagor
in ascertaining the status of mortgaged properties. Since its business is impressed with public
interest, the mortgagee-bank is duty-bound to be more cautious even in dealing with
registered lands. Indeed, the rule that person dealing with registered lands can rely solely on
the certificate of title does not apply to banks.
Homeowners Savings and Loan Bank v. Asuncion P. Felonia and Lydia C. De Guzman,
represented by Maribel Frias, et al., G.R. No. 189477. February 26, 2014. The Court held
the mortgagor be the absolute owner of the thing mortgaged is an essential requisite of a contract of
mortgage. Article 2085 (2) of the Civil Code specifically says so: Art. 2085. The following requisites
are essential to the contracts of pledge and mortgage: x x x (2) That the pledgor or mortagagor be the
absolute owner of the thing pledged or mortgaged. Succinctly, for a valid mortgage to exist,
ownership of the property is an essential requisite. Reyes v. De Leon cited the case of Philippine
National Bank v. Rocha where it was pronounced that a mortgage of real property executed by one
who is not an owner thereof at the time of the execution of the mortgage is without legal existence.
Such that, according to DBP v. Prudential Bank, there being no valid mortgage, there could also be no
valid foreclosure or valid auction sale.
Darcen vs.V.R. Gonzales Credit Enterprises, Inc. 695 SCRA 219 : If no redemption be made
within one (1) year from the date of the registration of the certificate of sale, the purchaser is entitled
to a conveyance and possession of the property, or, if so redeemed whenever sixty (60) days have
elapsed and no other redemption has been made, and notice thereof given, and the time for
redemption has expired, the last redemptioner is entitled to the conveyance and possession; but in all
cases the judgment obligor shall have the entire period of one (1) year from the date of the
registration of the sale to redeem the property. (Sec. 33, Rule 39, Rules of Court)
Ingles vs. Estrada, 695 SCRA 315: Proceedings for the extra-judicial foreclosure of mortgages are
also not adversarial. An executive judge has the administrative duty in extra-judicial proceedings to
ensure that all the conditions of the law have been complied with before authorizing the public
auction of any mortgaged property and this duty, by necessity, includes facially examining the
mortgage agreement as to whether it adequately identified the land to be auctioned or whatever it
contains sufficient authorization on the part of the mortgagee to push forth, with an extra-judicial sale.
Goldenway Merchandising Corp. vs. Equitable PCI Bank, 693 SCRA 439-440): The oneyear period of redemption is counted from the date of the registration of the certificate of sale.

Tolosa vs. UCPB, 695 SCRA 145 : Under Section 7 of Act No. 3135, as amended, a writ of
possession may be issued in favor of a purchaser in a foreclosure sale either: (1) within the
one-year redemption period, upon the filing of a bond; or (2) after the lapse of the
redemption period, without need of a bond. Within the one-year redemption period, the
purchaser may apply for a writ of possession by filing a petition in the form of an ex parte
motion under oath in the registration or cadastral proceedings of the registered property. The
law requires only that the proper motion be filed, the bond approved and no third person is
involved. After the consolidation of title in the buyers name for failure of the mortgagor to
redeem the property, entitlement to the writ of possession becomes a matter of right. In the

latter case, the right of possession becomes absolute because the basis thereof is the
purchasers ownership of the property.
Rural Bank of Sta. Barbara Iloilo, Inc. vs. Centeno, 693 SCRA 114): It is well-established
that after consolidation of title in the purchasers name for failure of the mortgagor to redeem the
property, the purchasers right to possession ripens into the absolute right of a confirmed owner. At
that point, the issuance of a writ of possession, upon proper application and proof of title, to a
purchaser in an extrajudicial foreclosure sale becomes merely a ministerial function, unless it appears
that the property is in possession of a third party claiming a right adverse to that of the mortgagor.

Solid Builders, Inc. vs. China Banking Corp., 695 SCRA 120: Moreover, in extra-judicial
foreclosures, mortgagors have the right to receive any surplus in the selling price. Thus, if
the mortgagee is retaining more of the proceeds of the sale than he is entitled to, this fact
alone will not affect the validity of the sale but will give the mortgagor a cause of action to
recover such surplus.

5. Action for Quieting of Title

Heirs of Pacifico Pocido, et al. v. Arsenia Avila and Emelinda Chua, G.R. No. 199146, March 19,
2014. Having established that the disputed property is public land, the trial court was therefore correct
in dismissing the complaint to quiet title for lack of jurisdiction. The trial court had no jurisdiction to
determine who among the parties have better right over the disputed property which is admittedly still
part of the public. In an action for quieting of title, the complainant is seeking for an adjudication
that a claim of title or interest in property adverse to the claimant is invalid, to free him from the
danger of hostile claim, and to remove a cloud upon or quiet title to land where stale or unenforceable
claims or demands exist.

6. Cases on Recovery of Possession of Real Property

Carmencita Suarez v. Mr. and Mrs. Felix E. Emboy, Jr. and Marilou P. Emboy-Delantar,
G.R. No. 187944, March 12, 2014 . Citing, Sps. Bonifacio R. Valdez, Jr. et al. vs. Hon.
Court of Appeals, et al. (523 Phil. 39 (2006)), the Court is instructive anent the three kinds of
actions available to recover possession of real property, viz: (a) accion interdictal; (b) accion
publiciana; and (c) accion reivindicatoria.
(1). Accion interdictal comprises two distinct causes of action, namely, forcible entry
(detentacion) and unlawful detainer (desahuico) [sic]. In forcible entry, one is deprived of
physical possession of real property by means of force, intimidation, strategy, threats, or
stealth whereas in unlawful detainer, one illegally withholds possession after the expiration
or termination of his right to hold possession under any contract, express or implied. The two
are distinguished from each other in that in forcible entry, the possession of the defendant is
illegal from the beginning, and that the issue is which party has prior de facto possession
while in unlawful detainer, possession of the defendant is originally legal but became illegal
due to the expiration or termination of the right to possess.
The jurisdiction of these two actions, which are summary in nature, lies in the proper
municipal trial court or metropolitan trial court. Both actions must be brought within one
year from the date of actual entry on the land, in case of forcible entry, and from the date of
last demand, in case of unlawful detainer. The issue in said cases is the right to physical
possession.

(2). Accion publiciana is the plenary action to recover the right of possession which should
be brought in the proper regional trial court when dispossession has lasted for more than one
year. It is an ordinary civil proceeding to determine the better right of possession of realty
independently of title. In other words, if at the time of the filing of the complaint more than
one year had elapsed since defendant had turned plaintiff out of possession or defendants
possession had become illegal, the action will be, not one of the forcible entry or illegal
detainer, but an accion publiciana.
(3). Accion reivindicatoria is an action to recover ownership also brought in the proper
regional trial court in an ordinary civil proceeding.
Spouses Eulogio N. Antazo and Nelia C. Antazo vs. Leonides Doblada, et al., G.R. No.
178908, February 4, 2010. In ejectment cases, possession means nothing more than actual
physical possession, not legal possession in the sense contemplated in civil law. Prior
physical possession is the primary consideration in a forcible entry case. A party who can
prove prior possession can recover such possession even against the owner himself.
Whatever may be the character of his possession, if he has in his favor prior possession in
time, he has the security that entitles him to remain on the property until a person with a
better right lawfully ejects him. The party in peaceable quiet possession shall not be thrown
out by a strong hand, violence or terror. We are convinced that respondents were in prior
possession of the property and that petitioners deprived them of such possession by means of
force.
Nelson Lagazo vs. Gerald B. Soriano and Galileo B. Soriano, G.R. No. 170864, February
16, 2010. The Court held that prior physical possession is an indispensable element in
forcible entry cases. Thus, the ultimate question in a case of this nature is who had prior
physical possession of the disputed land.
8. Easement
Pilar Dev. Corp. vs. Dumadag, 693 SCRA 97: While Article 630 of the Code provides for the
general rule that 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, Article 635 thereof is specific in saying that [all] matters concerning easements
established for public or communal use shall be governed by the special laws and regulations
relating thereto, and, in the absence thereof, by the provisions of this Title (Title VII on
Easements or Servitudes)
A private party can never have a right or title over it over public land. Squatters have no possessory
rights over the land intruded upon. The length of time that they may have physically occupied the
land is immaterial; they are deemed to have entered the same in bad faith, such that the nature of their
possession is presumed to have retained the same character throughout their occupancy. Only the
Republic of the Philippines, through the OSG and the local government unit may file an action
depending on the purposes sought to be achieved.
Catedrilla vs. Lauron, 696 SCRA 341: A person who occupies the land of another at the latters
tolerance or permission, without any contract between them, is bound by an implied promise that he
will vacate the same upon demand, failing which a summary action for ejectment is the property
remedy against him.
Chingkoe vs. Chingkoe, 696 SCRA 729: In unlawful detainer cases, the possession of the
defendant was originally legal, as his possession, was permitted by the plaintiff on account of an
express or implied contract between them. However, defendants possession became illegal when the
plaintiff demanded that defendant vacate the subject property due to the expiration or termination of
the right to possess under their contract, and the defendant refused to heed such demand.

Martires vs. Chua, 694 SCRA 57: Under Article 444 and 1942 of the old Civil Code, possession
of real property is not affected by acts of a possessory character which are merely tolerated by the
possessor, or which are due to his license. Granted that long, continued occupation, accompanied by
acts of a possessory character, affords some evidence that possession has been exerted in the character

of owner and under claim of right, this inference is unavailing since continued possession of the
property after his defeat in the ejectment suit was clearly upon the tolerance of respondents
predecessor-in-interest.

9. Case on Prescription of Action over Real Property

Spouses Morris Carpo and Socorro Carpo vs. Ayala Land, Incorporated, G.R. No. 166577,
February 3, 2010. By laches is meant the negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party entitled to assert it either has
abandoned it or declined to assert it. It does not involve mere lapse or passage of time, but is
principally an impediment to the assertion or enforcement of a right, which has become
under the circumstances inequitable or unfair to permit.
10. Sale of Property on Installment
Garcia vs. Court of Appeals, 619 SCRA 280: The Maceda Law applies to contracts of sale of
real estate on installment payments, including residential condominium apartments, but excluding:
(a) industrial lots, (b) commercial buildings, and (c) sales to tenants.
Philippine National Bank v. Teresita Tan Dee, et al., G.R. No. 182128, February 19, 2014. The
Court held that a bank dealing with a property that is already subject of a contract to sell and is
protected by the provisions of P.D. No. 957 It is bound by the contract to sell. intended to be the
subject of any other contract involving buyers or potential buyers. In granting the loan, [the Bank]
should not have been content merely with a clean title, considering the presence of circumstances
indicating the need for a thorough investigation of the existence of buyers x x x. Wanting in care and
prudence, the [Bank] cannot be deemed to be an innocent mortgagee. x x x

Prescription/ Compromise
Prescription based on written agreement; statute of limitations; estoppel (by action and
waiver); what may be compromised; effect of a compromise
Book III: Different Modes of acquiring Ownership; Succession
Reserva Troncal: Mendoza vs. de los Santos, 694 SCRA 83:There are three (3) lines of
transmission in reserva troncal. The first transmission is by gratuitous title, whether by inheritance
or donation, from an ascendant/brother/sister to a descendant called the prepositus
The second transmission is by operation of law from the prepositus to the other ascendant or
reservor, also called the reservista .
The third and last transmission is from the reservista to the reservees or reservatarious who must be
relatives within the third degree from which the property came.

Pabalan et al v. The Heirs of Simeon A.B. Maamo, March 20, 1013.Reserva troncal is a
special rule designed primarily to assure the return of a reservable property to the third
degree relatives belonging to the line from which the property originally came, and avoid its
being dissipated into and by relatives of the inheriting ascendant. The reservoir has the legal
title and dominion to the reservable property but subject to the resolutory condition that such
title is extinguished if the reservoir predeceased the reserve. The reservoir is a usufructuary to
the reservable property. He may alienate it subject to reservation. The transfree gets the
revocable and conditional ownership of the reservoir. The transferees rights are revoked
upon the survival of the reserves at the time of the death of the reservoir but become
indefeasible when reservees predecease the reservoir.
Advance Inheritance: Bangayan v. Bangayan, July 3, 2013. In a common law relationship,
the spouse cannot claim any benefit on advance inheritance given by the other spouses father
to the children born out of the common law relationship as advance inheritance of the said
grandchildren.
Effect of Act of the Deceased prior to death: Inocencion v. Hospicio de San Jose,
September 25, 2013. A lease contract is not essentially personal in character. Thus, the rights and

obligations therein are transmissible to the heirs. The general rule, therefore, is that heirs are

bound by contracts entered into by their predecessors-in-interest except when the rights and
obligations arising therefrom are not transmissible by (1) their nature, (2) stipulation or (3)
provision of law. In the subject Contract of Lease, not only were there no stipulations
prohibiting any transmission of rights, but its very terms and conditions explicitly provided
for the transmission of the rights of the lessor and of the lessee to their respective heirs and
successors. The contract is the law between the parties. The death of a party does not excuse
non performance of a contract, which involves a property right, and the rights and obligations
thereunder pass to the successors or representatives of the deceased. Similarly, non
performance is not excused by the death of the party when the other party has a property
interest in the subject matter of the contract.
Constantino et al v. Heirs of Pedro Constantino October 2, 2013. Section 23, Rule 130 of
the Rules of Court provides: Sec. 23. Disqualification by reason of death or insanity of
adverse party. Parties or assignors of parties to a case, or persons in whose behalf a case is
prosecuted, against an executor or administrator or other representative of a deceased person,
or against a person of unsound mind, upon a claim or demand against the estate of such
deceased person or against such person of unsound mind, cannot testify as to any matter of
fact occurring before the death of such deceased person or before such person became of
unsound mind.
chay

chanro

Ventura v. Heirs of Endaya, October 2, 2013: A contract to sell is defined as a bilateral

contract whereby the prospective seller, while expressly reserving the ownership of the
subject property despite delivery thereof to the prospective buyer, binds himself to sell the
said property exclusively to the latter upon his fulfillment of the conditions agreed upon, i.e.,
the full payment of the purchase price50 and/or compliance with the other obligations stated
in the contract to sell. Given its contingent nature, the failure of the prospective buyer to
make full payment and/or abide by his commitments stated in the contract to sell prevents the
obligation of the prospective seller to execute the corresponding deed of sale to effect the
transfer of ownership to the buyer from arising. As discussed in Sps. Serrano and Herrera v.
Caguiat:
A contract to sell is akin to a conditional sale where the efficacy or obligatory force of the
vendor's obligation to transfer title is subordinated to the happening of a future and uncertain
event, so that if the suspensive condition does not take place, the parties would stand as if the
conditional obligation had never existed. x x x.
V

alawlibrary

6. Obligations and Contracts

- Elements of a contract; enforcement of rights/warranties under a contract; what may be the
subject matter of contracts
- What are the sources of obligation; what is joint and solidary obligation and under what
circumstances may parties be held jointly and solidarily liable; Read Articles 141 and 142 of
the Revised Penal Code in conjunction of liabilities of innkeepers, etc; and employers and
teachers.
- Extinguishment of Obligations; manner voluntary and involuntary.
Philippine National Bank v. Teresita Tan Dee, et al., G.R. No. 182128, February 19, 2014.
The basic principle of relativity of contracts is that contracts can only bind the parties who
entered into it, and cannot favor or prejudice a third person, even if he is aware of such
contract and has acted with knowledge thereof Where there is no privity of contract, there is
likewise no obligation or liability to speak about. Article 1308 of the Civil Code; principle
of mutuality of contracts. The credit agreement executed succinctly stipulated that the loan
would be subjected to interest at a rate determined by the Bank to be its prime rate plus
applicable spread, prevailing at the current month. This stipulation was carried over to or
adopted by the subsequent renewals of the credit agreement. PNB thereby arrogated unto
itself the sole prerogative to determine and increase the interest rates imposed on the Spouses

Manalo. Such a unilateral determination of the interest rates contravened the principle of
mutuality of contracts embodied in Article 1308 of the Civil Code.
Philippine National Bank v. Sps. Enrique Manalo & Rosalinda Jacinto, et al., G.R. No.
174433, February 24, 2014: The Court has declared that a contract where there is no
mutuality between the parties partakes of the nature of a contract of adhesion, and any
obscurity will be construed against the party who prepared the contract, the latter being
presumed the stronger party to the agreement, and who caused the obscurity. PNB should
then suffer the consequences of its failure to specifically indicate the rates of interest in the
credit agreement.
We spoke clearly on this in Philippine Savings Bank v. Castillo, to wit: The unilateral
determination and imposition of the increased rates is violative of the principle of mutuality
of contracts under Article 1308 of the Civil Code, which provides that [t]he contract must
bind both contracting parties; its validity or compliance cannot be left to the will of one of
them. A perusal of the Promissory Note will readily show that the increase or decrease of
interest rates hinges solely on the discretion of petitioner. It does not require the conformity
of the maker before a new interest rate could be enforced. Any contract which appears to be
heavily weighed in favor of one of the parties so as to lead to an unconscionable result, thus
partaking of the nature of a contract of adhesion, is void. Any stipulation regarding the
validity or compliance of the contract left solely to the will of one of the parties is likewise
invalid.
Bignay EX-IM Philippines, Inc. v. Union Bank of the Philippines / Union Bank of the
Philippines v. Bignay EX-IM Philippines, Inc., G.R. No. 171590 & G.R. No. 171598,
February 12, 2014: In culpa contractual or breach of contract, gross negligence of a party
amounting to bad faith is a ground for the recovery of damages by the injured party.
Metropolitan Fabrics, Inc., et al. v. Prosperity Credit Resources, Inc. et al., G.R. No.
154390, March 17, 2014: According to Article 1338 of the Civil Code, there is fraud when
one of the contracting parties, through insidious words or machinations, induces the other to
enter into the contract that, without the inducement, he would not have agreed to. Yet, fraud,
to vitiate consent, must be the causal (dolo causante), not merely the incidental (dolo
incidente), inducement to the making of the contract. In Samson v. Court of Appeals (G.R.
No. 108245, November 25, 1994, 238 SCRA 397), causal fraud is defined as a deception
employed by one party prior to or simultaneous to the contract in order to secure the consent
of the other.
Fraud cannot be presumed but must be proved by clear and convincing evidence. Whoever
alleges fraud affecting a transaction must substantiate his allegation, because a person is
always presumed to take ordinary care of his concerns, and private transactions are similarly
presumed to have been fair and regular. To be remembered is that mere allegation is
definitely not evidence; hence, it must be proved by sufficient evidence..
Article 1390, in relation to Article 1391 of the Civil Code, provides that if the consent of the
contracting parties was obtained through fraud, the contract is considered voidable and may
be annulled within four years from the time of the discovery of the fraud.
Iglesia Felipina Independiente v. Heirs of Bernardino Taeza,G.R. No. 179597, February
3, 2014: Under Article 1403 of the Civil Code. The following contracts are unenforceable,
unless they are ratified: (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; In
Mercado v. Allied Banking Corporation, the Court explained that: x x x Unenforceable
contracts are those which cannot be enforced by a proper action in court, unless they are
ratified, because either they are entered into without or in excess of authority or they do not

comply with the statute of frauds or both of the contracting parties do not possess the
required legal capacity. x x x..
Closely analogous cases of unenforceable contracts are those where a person signs a deed of
extrajudicial partition in behalf of co-heirs without the latters authority; where a mother as
judicial guardian of her minor children, executes a deed of extrajudicial partition wherein she
favors one child by giving him more than his share of the estate to the prejudice of her other
children; and where a person, holding a special power of attorney, sells a property of his
principal that is not included in said special power of attorney.
Philippine National Bank v. Teresita Tan Dee, et al., G.R. No. 182128, February 19, 2014:
Dacion en pago is a mode of extinguishing an existing obligation and partakes the nature of
sale as the creditor is really buying the thing or property of the debtor, the payment for which
is to be charged against the debtors debt. Dation in payment extinguishes the obligation to
the extent of the value of the thing delivered, either as agreed upon by the parties or as may
be proved, unless the parties by agreement express or implied, or by their silence consider
the thing as equivalent to the obligation, in which case the obligation is totally extinguished.
However, the Court held that where the bank with undue haste when it granted and
released the loan in less than three days, it also acted negligently in preparing the Real Estate
Mortgage as it failed to indicate that Concepcion was signing it for and on behalf of
petitioner. We need not belabor that the words as attorney-in-fact of, as agent of, or for
and on behalf of, are vital in order for the principal to be bound by the acts of his agent.
Without these words, any mortgage, although signed by the agent, cannot bind the principal
as it is considered to have been signed by the agent in his personal capacity.
Flordeliza Emilio vs. Bilma Rapal, G.R. No. 181855, March 30, 2010: For an action for
reformation of instrument to prosper, the following requisites must concur: (1) there must
have been a meeting of the minds of the parties to the contract; (2) the instrument does not
express the true intention of the parties; and (3) the failure of the instrument to express the
true intention of the parties is due to mistake, fraud, inequitable conduct or accident.
7. Sales
Essential Elements of a Contract of Sale; enforceable and unenforceable contracts; who
bears the loss; how ownership is transferred; how may defective contracts be reformed;
liability for breach of contracts
Philippine National Bank v. Teresita Tan Dee, et al., G.R. No. 182128, February 19, 2014.
[P.D.] No. 957 cannot totally prevent the owner or developer from mortgaging the
subdivision lot or condominium unit when the title thereto still resides in the owner or
developer awaiting the full payment of the purchase price by the instalment buyer.

Partnership/Agency/Insolvency
Who may form partnerships; what are the rights of partners; how partnership may be
dissolved; what are the rights of creditors in case of insolvency; how assets may be assigned
Appointment of Agents; powers under a general power of attorney and those in special power
of attorney; how agency is revoked
Credit Transactions
What is suretyship; obligations of a surety; liabilities of parties under suretyship; review
provisions on antichresis (have not been asked in recent bar exams)

Trade and Investment Development Corporation of the Philippines (Formerly Philippine

Export and Foreign Loan Guarantee Corporation) v. Asia Paces Corporation, et al., G.R.
No. 187403. February 12, 2014: The fundamental reason therefore is that a contract of
suretyship effectively binds the surety as a solidary debtor. This is provided under Article
2047 of the Civil Code which states: By guaranty a person, called the guarantor, binds
himself to the creditor to fulfill the obligation of the principal debtor in case the latter should
fail to do so. Thus, since the surety is a solidary debtor, it is not necessary that the original
debtor first failed to pay before the surety could be made liable; it is enough that a demand
for payment is made by the creditor for the suretys liability to attach.
Comparing a suretys obligations with that of a guarantor, the Court, in the case of Palmares
v. CA, illumined that a surety is responsible for the debts payment at once if the principal
debtor makes default, whereas a guarantor pays only if the principal debtor is unable to pay,
viz.: A surety is an insurer of the debt, whereas a guarantor is an insurer of the solvency of
the debtor. A suretyship is an undertaking that the debt shall be paid; a guaranty, an
undertaking that the debtor shall pay. Stated differently, a surety promises to pay the
principals debt if the principal will not pay, while a guarantor agrees that the creditor, after
proceeding against the principal, may proceed against the guarantor if the principal is unable
to pay. A surety binds himself to perform if the principal does not, without regard to his
ability to do so. A guarantor, on the other hand, does not contract that the principal will pay,
but simply that he is able to do so. In other words, a surety undertakes directly for the
payment and is so responsible at once if the principal debtor makes default, while a guarantor
contracts to pay if, by the use of due diligence, the debt cannot be made out of the principal.
Iglesia Felipina Independiente v. Heirs of Bernardino Taeza,G.R. No. 179597, February
3, 2014: A deeper analysis of Article 1456 reveals that it is not a trust in the technical sense
for in a typical trust, confidence is reposed in one person who is named a trustee for the
benefit of another who is called the cestui que trust, respecting property which is held by the
trustee for the benefit of the cestui que trust. A constructive trust, unlike an express trust,
does not emanate from, or generate a fiduciary relation. While in an express trust, a
beneficiary and a trustee are linked by confidential or fiduciary relations, in a constructive
trust, there is neither a promise nor any fiduciary relation to speak of and the so-called trustee
neither accepts any trust nor intends holding the property for the beneficiary.
A constructive trust having been constituted by law between respondents as trustees and
petitioner as beneficiary of the subject property, may respondents acquire ownership over the
said property? The Court held in the same case of Aznar, that unlike in express trusts and
resulting implied trusts where a trustee cannot acquire by prescription any property entrusted
to him unless he repudiates the trust, in constructive implied trusts, the trustee may acquire
the property through prescription even if he does not repudiate the relationship.
Mariano Lim v. Security Bank Corporation,G.R. No. 188539, March 12, 2014: The
essence of a continuing surety has been highlighted in the case of Totanes v. China Banking
Corporation in this wise: Comprehensive or continuing surety agreements are, in fact, quite
commonplace in present day financial and commercial practice. A bank or financing
company which anticipates entering into a series of credit transactions with a particular
company, normally requires the projected principal debtor to execute a continuing surety
agreement along with its sureties. By executing such an agreement, the principal places itself
in a position to enter into the projected series of transactions with its creditor; with such
suretyship agreement, there would be no need to execute a separate surety contract or bond
for each financing or credit accommodation extended to the principal debtor..

Philippine National Bank v. Sps. Enrique Manalo & Rosalinda Jacinto, et al., G.R. No.
174433, February 24, 2014: Indeed, the Court said in Eastern Shipping Lines, Inc. v. Court
of Appeals that interest should be computed from the time of the judicial or extrajudicial
demand. However, this case presents a peculiar situation, the peculiarity being that the
Spouses Manalo did not demand interest either judicially or extrajudicially. Spouses
Manalo made no judicial or extrajudicial demand from which to reckon the interest on any
amount to be refunded to them. Such demand could only be reckoned from the promulgation
of the CAs decision because it was there that the right to the refund was first judicially
recognized. Nevertheless, pursuant to Eastern Shipping Lines, Inc. v. Court of Appeals, the
amount to be refunded and the interest thereon should earn interest to be computed from the
finality of the judgment until the full refund has been made.
Anent the correct rates of interest to be applied on the amount to be refunded by PNB, the
Court, in Nacar v. Gallery Frames and S.C. Megaworld Construction v. Parada, already
applied Monetary Board Circular No. 799 by reducing the interest rates allowed in judgments
from 12% per annum to 6% per annum
Book V: Torts and Damages
- What is tort; quasi-delict; when liability attaches; definition of proximate cause; chain of
events leading to injury; negligence, how proved;
- How act of omission may lead to tort; special liability for tort of local governments or other
persons
- Damages; what may damages may be awarded please note that the court may not award
damages if not included in the prayer (may be asked as part of Legal Ethics question in Civil
Law)-; proofs needed to award damages; when may the Court reduce or increase the award;
nature of liquidated damages under contract.
Oriental Petroleum & Minerals Corp. vs. Tuscan Realty, Inc., 701 SCRA 95 & 97: The
term "procuring cause" refers to a cause which starts a series of events and results, without
break in their continuity, in the accomplishment of a brokers prime objective of producing a
purchaser who is ready, willing, and able to buy on the owners terms. This is similar to the
concept of proximate cause in Torts, without which the injury would not have occurred. To
be regarded as the procuring cause of a sale, a brokers efforts must have been the foundation
of the negotiations which subsequently resulted in a sale. The Court has always recognized
the brokers right to his commission, although the owner revoked his authority and directly
negotiated with the buyer whom he met through the brokers efforts. It would be unfair not
to give the broker the reward he had earned for helping the owner find a buyer who would
pay the price.
BJDC Construction, Inc represented by its Manager/Proprieto Janet S. Dela Cruz v. Nena
E. Lanuzo, et al., G.R. No. 161151, March 24, 2014: Negligence, the Court said in
Layugan v. Intermediate Appellate Court (G.R. No. L-73998, November 14, 1988), 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, or as Judge Cooley defines it, (t)he failure to
observe for the protection of the interests of another person, that degree of care, precaution,
and vigilance which the circumstances justly demand, whereby such other person suffers
injury. In order that a party may be held liable for damages for any injury brought about by
the negligence of another, the claimant must prove that the negligence was the immediate and
proximate cause of the injury.
For the doctrine to apply, the following requirements must be shown to exist, namely: (a) the accident
is of a kind that ordinarily does not occur in the absence of someones negligence; (b) it is

caused by an instrumentality within the exclusive control of the defendant or defendants; and (c) the
possibility of contributing conduct that would make the plaintiff responsible is eliminated.

Dr. Fernando P. Solidum v. People of the Philippines, G.R. No. 192123, March 10, 2014:
An action upon medical negligence whether criminal, civil or administrative calls for the
plaintiff to prove by competent evidence each of the following four elements, namely: (a) the
duty owed by the physician to the patient, as created by the physician-patient relationship, to
act in accordance with the specific norms or standards established by his profession; (b) the
breach of the duty by the physicians failing to act in accordance with the applicable standard
of care; (3) the causation, i.e., there must be a reasonably close and causal connection
between the negligent act or omission and the resulting injury; and (4) the damages suffered
by the patient.
The Court aptly explained in Cruz v. Court of Appeals that: 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 state of the
profession at the time of treatment or the present state of medical science. In the recent case
of Leonila Garcia-Rueda v. Wilfred L. Pacasio,et. al., this Court stated that in accepting a
case, a doctor in effect represents that, having the needed training and skill possessed by
physicians and surgeons practicing in the same field, he will employ such training, care and
skill in the treatment of his patients. He therefore has a duty to use at least the same level of
care that any other reasonably competent doctor would use to treat a condition under the
same circumstances. It is in this aspect of medical malpractice that expert testimony is
essential to establish not only the standard of care of the profession but also that the
physicians conduct in the treatment and care falls below such standard. Further, inasmuch as
the causes of the injuries involved in malpractice actions are determinable only in the light of
scientific knowledge, it has been recognized that expert testimony is usually necessary to
support the conclusion as to causation
The applicability of the doctrine of res ipsa loquitur in medical negligence cases was significantly
and exhaustively explained in Ramos v. Court of Appeals, where the Court saidMedical malpractice
cases do not escape the application of this doctrine. Thus, res ipsa loquitur has been applied when the
circumstances attendant upon the harm are themselves of such a character as to justify an inference of
negligence as the cause of that harm. The application of res ipsa loquitur in medical negligence cases
presents a question of law since it is a judicial function to determine whether a certain set of
circumstances does, as a matter of law, permit a given inference. Resort to res ipsa loquitur is allowed
because there is no other way, under usual and ordinary conditions, by which the patient can obtain
redress for injury suffered by him.

International Container Terminal Services, Inc. v. Celeste M. Chua, G.R. No. 195031,
March 26, 2014: Article 2199 of the Civil Code states that [e]xcept as provided by law or
by stipulation, one is entitled to an adequate compensation only for such pecuniary loss
suffered by him a he has duly proved. Such compensation is referred to as actual or
compensatory damages. Actual damages are compensation for an injury that will put the
injured party in the position where it was before the injury. They pertain to such injuries or
losses that are actually sustained and susceptible of measurement. Except as provided by law
or by stipulation, a party is entitled to adequate compensation only for such pecuniary loss as
is duly proven. Basic is the rule that to recover actual damages, not only must the amount of
loss be capable of proof; it must also be actually proven with a reasonable degree of
certainty, premised upon competent proof or the best evidence obtainable..
Mariano Lim v. Security Bank Corporation, G.R. No. 188539, March 12, 2014: Article
2208 of the Civil Code does not prohibit recovery of attorneys fees if there is a stipulation in
the contract for payment of the same. Thus, in Asian Construction and Development
Corporation v. Cathay Pacific SteelCorporation (CAPASCO), the Court, citing Titan

Construction Corporation v. Uni-Field Enterprises, Inc., noted that the law allows a party
to recover attorneys fees under a written agreement. In Barons Marketing Corporation v.
Court of Appeals, the Court ruled that attorneys fees are in the nature of liquidated damages
and the stipulation therefor is aptly called a penal clause. It has been said that so long as such
stipulation does not contravene law, morals, or public order, it is strictly binding upon
defendant. The attorneys fees so provided are awarded in favor of the litigant, not his
counsel. On the other hand, the law also allows parties to a contract to stipulate on liquidated
damages to be paid in case of breach. A stipulation on liquidated damages is a penalty clause
where the obligor assumes greater liability in case of breach of an obligation. The obligor is
bound today the stipulated amount without need for proof on the existence and on the
measure of damages caused by the breach. However, even if such attorneys fees are allowed
by law, the courts still have the power to reduce the same if it is unreasonable.
International Container Terminal Services, Inc. v. Celeste M. Chua, G.R. No. 195031,
March 26, 2014: An award of attorneys fees has always been the exception rather than the
rule and there must be some compelling legal reason to bring the case within the exception
and justify the award. The policy of the Court is that no premium should be placed on the
right to litigate. Even when a claimant is compelled to litigate with third persons or to incur
expenses to protect his rights, still, attorneys fees may not be awarded where no sufficient
showing of bad faith could be reflected in a partys persistence in a case other than an
erroneous conviction of the righteousness of his cause. Certainly, an award of moral
damages must be anchored on a clear showing that the party claiming the same actually
experienced mental anguish, besmirched reputation, sleepless nights, wounded feelings,
or similar injury.
In the absence of competent proof on the amount of actual damages suffered, a party is
entitled to receive temperate damages. Article 2224 of the New Civil Code provides that:
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 proved with
certainty. The amount thereof is usually left to the sound discretion of the courts but the
same should be reasonable, bearing in mind that temperate damages should be more than
nominal but less than compensatory.
One Network Rural Bank, Inc. v. Danilo G. Baric, G.R. No. 193684, March 5, 2014:.
Nominal damages are recoverable under article 2221 of the Civil Code where a legal right is
technically violated and must be vindicated against an invasion that has produced no actual
present loss of any kind or where there has been a breach of contract and no substantial
injury or actual damages whatsoever have been or can be shown. .