Part 1

A1

In January 2018, Mrs. A, a married woman on her sixth (6 ) month of pregnancy, was crossing a street
when she was suddenly hit by a car being recklessly driven by Me. X. As a result, Mrs. A sustained serious
injuries and further, suffered an unintentional abortion. Mrs. A was hospitalized for two (2) months,
during which she incurred P400,000.00 in medical fees. Her expenses were all duly substantiated by
official receipts. During the two (2)-month period of her confinement, she was unable to report for work
and earn salary, which was established at the rate of P50,000.00 per month. Mrs. A then filed a civil case
for damages against Mr. X.

 Based on the case filed by Mrs. A, what is the source of Mr. X’s obligation to her as a result of his
acts? Explain (2%)

 May Mrs. A claim actual damages from Mr. X? if so, how much can Mrs. A claim? Explain (2%)

 May Mrs. A claim damages on behalf of her unborn baby? Explain (3%)

 What must Mrs. A prove if she wants to recover moral damages from Mr. X? (2%)

 Assuming that Mrs. A is awarded actual and moral damages by the trail court, may she also claim
interest if the final and executory judgement award remains unpaid by Mr. X? If so, when should
the interest be reckoned and what is the rate of interest? Explain (3%)

1. The sources of Mr. X’s obligation to Mrs. A is to indemnify her for all the damages cause by his
action. As in accordance with art 20. Of the civil code, every person who willfully or negligently
cause damage to another shall indemnify the latter for the same.

2. Yes, Mrs A can claim damages from Mr. X, under the civil code, actual damages is the adequate
compensation for pecuniary loss suffered by him as he has duly proved. Mrs. A is intitled of
450,000.00 actual damages claim.

3. No, Mrs. A cannot claim for damages on behalf of her unborn baby, this is because the baby still
has no legal personality so he is not entitled to receive anything. Under the civil code, the parents
of an unborn baby may receive monetary value in favor of their unborn child only through
donation provided that the unborn child is born and alive for at least 24 hours if less than 7
months.

4. Yes, if it is stated in the final judgment that interest will incur when judgement award remains
unpaid.
A.2.

H and W were married in 1990. H, being a member of the Armed Forces of the Philippines (AFP), was
deployed to a rebel-infested area in 1992. Since then, W has not heard from her husband, H. One day, the
AFP informed W that H has been declared missing since 1995. In consequence, W diligently pursued all
available means to ascertain her husband’s whereabouts, but to no avail. Firmly believing that H had
already died, W filed a claim before the AFP in 2008 for the death benefits of missing serviceman.
However, the AFP, despite being cognizant of H’s Status would not act in the claim, contending that H
could not be presumed dead unless a judicial declaration to this effect is issued by the proper court.

In what instance/s is a judicial declaration of presumptive death necessary? In this case, is the contention
of the AFP correct? Explain (3%)

1. Presumption of death, as provided for in the civil code, begins after an absence of seven, it being
unknown whether or not the absentee still lives, he shall be presumed dead for all purposes,
except for those of succession which till after an absence of ten years.

No, the contention of the AFP is not correct. It has already been 11 years since the person is being
unknown whether or not still lives, which the AFP had already confirm with their own
investigation. The civil law provides that in all cases including succession an absence of 10 years
is needed in order for a person to be presumed dead, in the case at bar, 11 years had already pass,
hence, the contention is wrong.

A.3.

Mr. Reyes is legally married to Mrs. Reyes. During the subsistence of their marriage, Mr. Reyes cohabited
with another woman, Ms. Cruz. Out if Mr. Reyes and Ms. Cruz’s illicit relationship, a child named C was
born. In C’s birth certificate, “Cruz” appears as the child surname, although Mr. Reyes expressly
acknowledged C as his child.

In 2018, Mr. Reyes and Ms. Cruz ended their relationship. Mr. Reyes thereafter lodged a petition in court
for parental custody and change or correction of C’s surname in the child’s birth certificate from ‘Cruz” to
“Reyes.” At that time, C was only (10) years old.

 Should Mr. Reyes be granted custody of C? Explain (2.5%)

 Can Mr. Reyes validly compel the change or correction of C’s surname from ‘Cruz” to
“Reyes”? Explain (2.5%)

1. Yes, as long as it is for the benefit of the child since the court shall take into account all relevant
consideration including the choice of the child, unless the parent chosen is unfit. What is restricted
in the civil law are those children below seven years of age which should not be separated from
the mother unless compelling reasons provides otherwise.

2. Yes, it is stated in the civil code that an illegitimate child may use the surname of their father if
their filiation has been expressly recognized by their father which is what happened in the case at
bar.
A.4. F, A Filipina married to J, Japanese, in the Philippines. After three (3) years, they had a falling out and
thus, separated. Soon after, F initiated a divorce petition in Japan which was not opposed by J because
under Japanese law, a grant of divorce will capacitate him to remarry. F’s divorce petition was then
granted by the Japanese court with finality.

 May the legal effects of the divorce decree be recognized in the Philippines, and
consequently, capacitate F to remarry here? Explain (3%)

1. Yes, according to recent jurisprudence as long as the divorce proceedings has been validly granted
in the foreign court and the spouses are a foreigner and a Filipino then the legal effects of the
divorce decree may be recognized here in the Philippines as well which would capacitate F to
remarry here.

A.5. X and y were in a live-in relationship for the longest time, and were already blessed with a child, Z.
They finally decide to get married on March 15, 2020. When X’s parent found about the news, they were
thrilled and thus, donated in favor of Z, the family heirloom, particularly, a gold ring valued a P250,000.00,
which X and Y orally accepted on behalf of their minor child. One day, X and Y got into a serious quarrel,
which resulted in them setting side their marriage plans.

 Is the donation to Z valid? Explain. (3%)

 Assuming that the donation to Z is valid, may X’s parents revoke the donation on the
ground that the marriage of X with Y did not push through? Explain. (3%)

1. Yes, the donation is still valid since there was no oral agreement or condition that marriage was
needed to fulfill the donation.

2. Yes, the donation made by X’s parents may be revoked by them on the ground that the marriage
was not push through, X’s parents may contend that the family heirloom was only given to Z in
favor of the marriage of X and Y which without such marriage would not have given the heirloom
to them.

A.6. Name at least two (2) exclusions from the following property regimes as enumerated under the Family
Code:

 Absolute community of property (2%)

 Conjugal partnership of gains (2%)

1. Gratuitous, before marriage

2. That which is brought to the marriage as his or her own, that which each acquires during the
marriage by gratuitous title,
A.7. Believing that he owned a certain parcel of land and completely unaware of any defect in his title
thereto, Mr. A started to build a house thereon. When Mr. P, the real owner of the land learned of Mr.
A’s actions, Mr. P immediately demanded Mr. A to leave the premises. However, Mr. A refused to leave,
and instead, asserted that as a builder in good faith, Mr. P is obliged to sell the land to him.

 Is the claim of Mr. A correct? Explain. (3%)

 Assuming that Mr. P all the while, knew but did not object to Mr. A’s construction of the house
on his property, may Mr. A compel Mr. P to purchase the said improvement due to Mr. P’s bad
faith? Explain. (3%)

1. No, the claim of Mr. A is incorrect. Under the civil code only the real owner of the land shall have
the remedy to sell his property to the builder, planter or sower and not the other way around
since it is within the right of ownership of the real owner of the land to sell his property. In the
case at bar, the builder, Mr. A cannot compel Mr. P to sell his property, Mr. A can only compel Mr.
P to indemnify him for the house and other improvements that he built on Mr. P’s property.

2. Yes, Mr. A can compel Mr. P to purchase the said improvement. Under the civil code a builder,
planter or sower in good faith can remove the improvements in any event or be indemnified for
damages. In the case at bar. Mr. A can compel Mr. P to pay or purchase the improvement plus
damages since Mr. A is a builder in good faith and Mr. P is an owner of the land in bad faith.

A.8. Mr. E leased a piece of land from Mr. F to be used for his sawmill business for a period of ten (10)
years. Consequently, Mr. E placed heavy machineries thereon to be used for his aforementioned business,
with the intention of removing them after the expiration of the lease period.

 Are Mr. E’s heavy machineries considered real properties under the Civil Code? Explain. (3%)

1. Yes, Mr. E’s heavy machineries may be considered as an immovable property under the civil code.
Under the law, 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. In the case at bar, Mr. E’s
heavy machineries meets the required requisites to be classified as a real property hence, they
may be considered as a real property under the civil code.

A.9. Ms. U is a usufructuary of a piece of land owned by Mr. L. During the existence of the usufruct, Ms. U
introduced various useful improvements on the land. Upon termination of the usufruct, Mr. L requested
Ms. U to remove the said improvements, but Ms. U refused, demanding instead that Mr. L reimburse her
the value of the same.

 What is a usufruct? 2%

 Is. Ms. U’s demand proper? Explain. (3%)

1. 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.

2. No, Ms. U cannot demand that Mr. L to reimburse her the value of the improvements made.
Under the civil law, the usufructuary may make on the property held in usufruct such useful
improvements provided she does not alter its form or substance; but he shall have no right to be
 indemnified therefore. In the case at bar, Ms. U can only remove the said improvement as long as
it would not damage the property.

A.10. Village H and Village L are adjoining residential villages in a mountainous portion of Antipolo City,
Rizal, with Village L being lower in elevation than Village H. In an effort of beautify Village H, its developer,
X, Inc., constructed a clubhouse which included an Olympic-sized swimming pool and an artificial lagoon
on a portion of land overlooking Village L. During the monsoon, the continuous heavy rains caused Village
H’s swimming pool and artificial lagoon to overflow, resulting into a massive spillover that damaged
various properties in Village L. Aggrieved, the homeowners of Village L filed a complaint for damages
against X. Inc. In defense, X, Inc. contended that pursuant to the Civil Code, Village L, as the lower estate,
was obliged to receive the waters descending from Village H, the higher estate, Hence, it cannot be held
liable for damages.

 Is X, Inc.’s position tenable? Explain. (3%)

1. Yes, X, Inc.’s contention is tenable. It is a cardinal rule in statutory construction that when the law
is clear and free from any doubt or ambiguity, there is no room for construction or interpretation.
There is only room for application. As the statute is clear, plain and free from ambiguity, it must
be given its literal meaning and applied without attempted interpretation. In the case at bar, it is
clear, plain and free from ambiguity that Village L as the lower estate, was obliged by law to
receive the waters descending from Village H, the higher estate, hence X, Inc.’s contention is
tenable.
B.11 Mr. R is the registered owner of a parcel of and located in Cebu City covered by Transfer Certificate
of Title (TCT) No. 1234 issued in 1955. Since his acquisition of the lot, Mr. R and his family had been in
continuous, open, and peaceful possession thereof. Mr. R died in 1980 resulting in the land being
transferred in the name of heirs, i.e. A, B, and C who become registered owners thereof as per TCT no
5678. During the entire time, said land had never been encumbered or disposed, and its possession always
remained with them. Sometime in 1999, A, B, and C wanted to build a concrete fence around the parcel
of land, but they were opposed by Mrs. X, who started claiming ownership over the same property on the
strength of a Deed of Absolute Sale purportedly entered into by her with Mr. R during the time that he
was still alive. Aggrieved, A, B, and C intended to file a complaint for quieting of title against Mrs. X.

(a) What are the substantive requisites for the action to prosper? Do they obtain in this case?
Explain. (3%)

(b) Within what period should A, B, and C file the complaint for quieting of title? Explain. (2%)

(c) Assuming that B and C are residing abroad, may A, without the knowledge of B and C, file the
complaint for quieting of title on behalf of all the heirs? Explain. (2%)

1. An action to quiet title to prosper, two indispensable requisites must concur, namely:
(1) the plaintiff or complainant has a legal or equitable title to or interest in the real
property subject of the action; and (2) the deed, claim, encumbrance or proceeding
claimed to be casting cloud on his title must be shown to be in fact invalid or
inoperative despite its prima facie appearance of validity or legal efficacy. In the case
at bar, it was able to meet these two requisites. A, B and C are registered owners of
the property in question as per TCT no. 5678 and the family has been living in the land
since 1955 and it has taken more than 19 years for Mrs. X to claims that the property
was bought by her from Mr. R hence, the action to quiet title will prosper.

2. A, B and C can file the complaint for quieting of title anytime since it doesn’t prescribe.
The prescriptive period for bringing an action to quiet title if the plaintiff is in
possession is imprescriptible, however, it the plaintiff is not in possession then the
prescriptive period is 10 year in ordinary circumstances and 30 years for extra-
ordinary circumstances.

3. No, A may not, without knowledge of B and c file the complaint for quieting of title
on behalf of all the heirs. It is stated in the civil code that none of the co-owners shall,
without the consent of the others make any alterations in the thing owned in
common, even though benefits for all would result therefrom. This means that
consent must be sought by A in order for him to properly represent B and C and to be
able to properly file the complaint.
B.12 D, an Overseas Filipino Worker, was on his way home to the Philippines after working for so many
years in the Middle East. He saved Php 100,000.00 in his local savings account which he intended to use
to start up a business in his home country. On his flight home, tragedy struck as a suicide bomber blew up
the plane. All the passengers, including D, died. He left behind his widowed mother M; his common-law
wife, W, who is the mother of his twin sons, T and S; and his brother, B. He left no will, no debts, no other
relatives, and no other properties except the money in his savings account.

 Who are the heirs entitled to inherit D and how much should each receive? Explain. (5%)

1. The twin sons of D, T and S, are the heirs entitled to inherent D and receive The 100,000.00
that D has saved, which will be divided equally between themselves.

B.13 M, single, named his sister N in his will, as a devisee over a certain parcel of land that he owned, with
the obligation of preserving the land and transferring it, upon N’s death, to her illegitimate daughter O,
who was then only a year old.

 Is the condition imposed on N to preserve the land and to transmit it upon her death to O a valid
case of fideicommissary substitution? Explain (3%)

1. No, fideicommissary substitution occurs when the fiduciary or first heir instituted is entrusted
with the obligation to preserve and to transmit to a second heir the whole or part of the
inheritance and that the substitute does not go beyond one degree from the heir originally
instituted. In the case at bar, the condition that the substitute was the a degree beyond the
originally instituted hence, it is not a valid case of fideicommissary substitution.

B.14 Prior to his death, H married to W, with children X, Y, and Z, executed a Holographic will entirely
written, dated, and signed by him. In his will, H instituted W, X, and Y as his heirs, and consequently, made
testamentary disposition in their favor. H, however, expressly disinherited Z on the ground that the latter
once filed a civil case against him in order to collect a particular sum of money he previously owed Z.

(a) Was the disinheritance of Z proper? Explain. (3%)

(b) Assuming that the disinheritance of Z was improper, how will it affect the institution of heirs
and testamentary dispositions made in H’s will? Explain. (3%)

1. No, the disinheritance of Z was not proper. Under the succession in the civil code, only specific
criminal case like adultery or concubinage and others are sufficient causes for the
disinheritance of children and descendants. In the case at bar, the reason for the
disinheritance is a civil case which is not a proper ground for disinheritance hence the
disinheritance of Z was not proper.

2. The will is still proper, only the portion where H expressly disinherited Z would be void since
it is contrary to law on succession. Pangupya sa iba.
B.15 Mr. P offered to sell his Manila Polo Club shares to Ms. Q for Php2,500,000. Ms. Q accepted on the
condition that their agreement will not take effect until after one year. Mr. P then acceded and both of
them shook hands. Excited about the prospect of acquiring Mr. P’s shares, Ms. Q approached the former
and offered to pay him an earnest money equivalent to 1% of the purchased price, which Mr. P accepted.
After one year, Ms. Q approached Mr. P seeking thee enforcement of their agreement for Mr. P to sell his
shares to her. Mr. P refused to honor their agreement, claiming that the same was covered by the Statute
of Frauds because it was not reduced into writing and hence, unenforceable.

 Is the position of Mr. P correct? Explain. (3%)

B.16

C corp. entered into a contract with D, Inc for the construction of the latter’s production warehouse. In
the Consideration thereof, D, Inc. was obliged to pay C Corp. the amount of Php 50,000,000 within one
month from the time of the project’s completion. To secure the payment of the said sum, D, Inc. entered
into a surety agreement with S Company. After more than one month from the completion date of the
project, C Corp. remained unpaid. Claiming that it was suffering from serious financial reverses, D, Inc.
asked C Corp. for an extension of three (3) months to pay the P50,000,000.00 is still owed, to which C
Corp. agreed. However, after more than three (3) months, D, Inc. still refused to pay. Hence, C Corp.
proceeded to collect the above sum from the surety, S Company. For its part, S Company, refused the
claim and raised the defense that the extension of time granted by C Corp. to D, Inc. without its consent
released it from liability.

1. Will the defense of S Company against the claim hold water? Explain. (3%)

2. Assuming that S Company instead refused the claim on the ground that C Corp. has yet to
exhaust D, Inc.’s property to satisfy the claim before proceeding against it, will this defense
prosper? Explain. (2%)
B.17. In 2015, O, the original registered owner of a 300-square meter property covered by Original
Certificate of Title (OCT) No. O-1234, appointed F as its caretaker. A year after, while O was abroad, F
surreptitiously broke open O’s safe and stole the duplicate copy of the said OCT. F then forged a DEED of
Absolute Sale and made it appear that O sold the property to him. Consequently, F was able to have OCT
No. O-1234 cancelled and in lieu thereof, a new title, Transfer Certificate of Title (TCT) No. T-4321, was
issued in his name. A few months after, F offered the property for sale to X. After conducting the required
due diligence to verify the title of F, and finding no occupant in the property during ocular inspection, X
signed the contract of sale, and thereupon, fully paid the purchase price. A few days later, X was able to
obtain TCT No. T-5678 under his name. When O discovered F’s fraudulent acts upon his return in 2017, O
immediately filed a complaint for reconveyance against F and X, principally pointing out that F merely
forged his signature in the Deed of Absolute Sale purportedly made in F’s favor and thus, F could not have
validly transferred the title thereof to X. Consequently, he sought the return of the subject property to
him.

 Will the prayer of O for the return of the subject property prosper? Explain. (3%)

 Assuming that O could no longer recover the subject property in view of X’s registration thereof
in his name, may a claim against the Assurance Fund pursuant to the provisions of the Property
Registration Decree be instituted? Explain. (3%)

1. No, the prayer of O for the return of the subject property will not prosper. Under the civil
law in obligations and contracts, rescission cannot take place when the thing which are
the object of the contract are legally in the possession of a third person who did not act
in bad faith. In the case at bar, X being a third person in good faith and the possessor of
the thing cannot be prejudiced because of his right when he acquired the thing, O can
only go after F for the indemnification of damages. Hence, the prayer of O will not
prosper.

2. Yes, O may claim against the assurance fund pursuant to the provision of the property
registration decree. Under the law, a person who, without negligence on his part, sustain
loss or damage, or is deprived of land under the operation of Torrens system, through
fraud in any certificate of title may bring an action in any court of competent jurisdiction
for recovery of damages to be paid out of Assurance Fund. In the case at bar, O as a person
who, without negligence on his part suffered loss can avail the legal remedy to an action
for compensation against the assurance fund since the prescription for this action is
within six (6) years from the time the right to bring such action first occurred.
B.18. In light of a new business venture. Mr. A entered into a lease contract with Mr. B involving one of
the latter warehouses. One day, Mr. B, who was then encountering financial difficulties, approached Mr.
A and sought for a loan, which Mr. A readily granted to him. In order to secure the loan obligation, MR B
mortgaged the leased warehouse in favor or of Mr. A. In addition, Mr. B executed a promissory note in a
favor of A. wherein prior demand was waived by him. When Mr. B defaulted on his loan obligation, Mr. A
simply stopped paying rentals due to Mr. B on the ground that legal compensation had already set in up
to the concurrent amount. Furthermore. Since there was still a balance due on the promissory note, Mr.
A foreclosed the real estate mortgage over Mr. B’s property without demand furnished to Mr. B.
Aggrieved, Mr. B. opposed the foreclosure due to the lack of prior demand contending that the waiver of
prior demand was stipulated in the promissory note and not in the mortgage instrument. Mr. B likewise
argued that when Mr. A invoked legal compensation between the unpaid rentals and the loan arrearages,
it amounted to a novation that resulted in the extinguishment of the loan contract between them. As such
the real estate mortgage, being a mere accessory contract to the principal loan. Was necessarily
extinguished.

(a) May Mr. A validly claim legal compensation? Explain (2%)

(b) May Mr. A validly foreclose on the real estate mortgage even without prior demand to Mr. B?
Explain (2%)

(c) Is Mr. B’s claim of novation correct? Explain. (2%)

1. Yes, Mr. A can validly claim legal compensation. A creditor or a lender is protected by the law
upon the contract or the mere agreement between the parties, in this case Mr. B is bound by law
to pay to the creditor, Mr. A, an equal amount of the loan he made to Mr. A.

2. No, Mr. A cannot validly foreclose on the real estate without prior demand to Mr. B since Mr. B is
the owner of the property and it is within his right as an owner to be informed if his property is
going to be foreclosed.

3. No, Mr. B’s claim of novation is not correct. Under the civil code when the principal obligation is
extinguished in consequence of a novation, accessory obligation will also be extinguished except
for the benefit of third party. In the case at bar, the principal obligation which is the loan of Mr. B
was not yet extinguished as there was still a balance due and demandable on the promissory note.
Hence, Mr. B’s claim of novation is not correct. (check if mortgage can stand alone even if it is an
accessory contract.
B.19. Mr. A entered into a lease contract covering one of his commercial buildings with XYZ Company, a
partnership composed of X, Y and Z, as lessee, for use as an office space. Upon failure to receive the rental
payments when they fell due, Mr. A immediately sought payment of the same from with the partnership
for its debts. X, Y and Z disagreed with Mr. A’s contention, arguing further that in any event, rentals should
not be paid up until Mr. A makes the necessary arrangements for the repair of the defective electrical
wirings in the office that caused power outages and hence, made it difficult if not impossible, for them to
conduct their usual business operations.

 Rule on the parties’ respective arguments. (5%)

1. Under the civil code, if the lessor or the lessee should not comply with the obligations set forth
under the civil code, the aggrieve party may ask for the rescission of the contract and
indemnification for damages, or only the latter, allowing the contract to remain in force. The
obligation mentioned under the civil code for the lessor is to make all the necessary repairs in
order to keep it suitable for the use to which it has been devoted, unless there is a stipulation to
the contrary. While one of the obligation of a lessee is to pay the price of the lease according to
the terms stipulated. Both the lessee and the lessor are in violation of the obligation that are
provided for in the civil code

B.20 Distinguish the following

(a) Contract of Sale and contract to sell (2%)

- an agreement between a seller and buyer in which the seller promises to sell something to the
buyer and the buyer also promises the seller to buy the property. However, the contract does not instantly
transfer the right to the buyer as the condition still has to be fulfilled.

(b) Interruption and tolling of prescription of action (2%)