GENERAL PRINCIPLES

1. On February 4, 2019, a law was enacted allowing a four-day work in a week. Its
effectivity clause provides that “it shall take effect immediately upon approval.” It was
published on February 15, 2019. On February 11, 2019, the Unyon ng Kababaihang
Manggagawa (Union) filed a complaint against their company contending that it is not
complying with the new law since the law already took effect on February 4, 2019. Is the
contention of the Union correct?

No. If the law provides that it shall take effect immediately upon its approval, it shall take effect
immediately after its complete publication in the Official Gazette or in a newspaper of general
circulation, for publication is indispensable. Here, the law allowing the four-day work in a week
became effective when it was published on February 15, 2019 and not on February 4, 2019 when it
was enacted. The legislature may not make the law effective immediately upon approval without its
previous publication. (Tañada vs. Tuvera, G.R. No. L-63915. December 29, 1986)

2. When does a law take effect?

Three possible scenarios:

(1) If the law does not provide for its own effectivity: it shall take effect “after fifteen (15) days
following the completion of its publication either in the Official Gazette, or in a newspaper of
general circulation in the Philippines.”
(2) If the law provides for its own effectivity: it shall take effect on such date, subject to the
requirement of complete publication.
(3) If the law provides that it shall become effective “immediately upon approval” : it shall take
effect immediately after its complete publication. (Art. 2, Civil Code; Tañada vs. Tuvera,
supra.; Rabuya, Civil Law Review [2017])

3. Explain briefly the following rules on conflict of laws:

(a) Generality of penal laws.

Penal laws and those of public security and safety shall be obligatory upon all who live or sojourn
in the Philippine territory, subject to the principles of public international law, treaty stipulations,
and laws of preferential application. (Art. 14, Civil Code)

(b) Nationality principle.

Laws relating to family rights and duties, or to the status, condition and legal capacity of persons
are binding upon citizens of the Philippines, even though living abroad. Prohibitive laws
concerning persons, their acts or property, and those which have for their object public order,
public policy and good customs shall not be rendered ineffective by laws or judgments
promulgated, or by determinations or conventions agreed upon in a foreign country. (Art. 15 and
17, Civil Code)

(c) Lex rei sitae.

Real property as well as personal property is subject to the law of the country where it is
stipulated. However, intestate and testamentary successions, both with respect to the order of
succession and to the amount of successional rights and to the intrinsic validity of testamentary
provisions, shall be regulated by the national law of the person whose succession is under
consideration, whatever may be the nature of the property and regardless of the country wherein
said property may be found. (Art. 16, Civil Code)
 (d) Lex loci celebrationis.

The forms and solemnities of contracts, wills, and other public instruments shall be governed by
the laws of the country in which they are executed. (Art. 17, Civil Code)

(e) Doctrine of renvoi.

The theory of the doctrine of renvoi (referring back) is that the court of the forum, in determining
the question before it, must take into account the whole law of the other jurisdiction, and also its
rules as to conflict of laws, and then apply the law to the actual question which the rules of the
other jurisdiction prescribe, e.g., the English law directs its judge to distribute the personal estate
of an Englishman who has died domiciled in Belgium in accordance with the law of his domicile,
he must first inquire whether the law of Belgium would distribute personal property upon death
in accordance with the law of domicile, and if he finds that the Belgian law would make the
distribution in accordance with the law of nationality — that is the English law — he must accept
this reference back to his own law. (In the Matter of the Testate Estate of Christensen vs. Garcia,
G.R. No. L-16749, January 31, 1963)

(f) Doctrine processual presumption.

Where a foreign law is not pleaded or, even if pleaded, is not proved, the presumption is that
foreign law is the same as the domestic law. It is also known as the doctrine of presumed-
identity approach. (EDI-Staffbuilders Int’l. vs. NLRC, G.R. No. 145587, October 26, 2007)

4. Explain briefly the following rules on human relations:

(a) Principle of abuse of rights.

Under the abuse of rights principle found in Art. 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. 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. (California Clothing, Inc. vs.
Quiñones, G.R. No. 175822, October 23, 2013)

(b) Damnum absque injuria.

Not all damages or injury results to liability for damages. One who makes use of his own legal
right does no injury. If damage results from a person’s exercising his legal rights, it is damnum
absque injuria. (Pro Line Sports Center, Inc. vs. CA, G.R. No. 118192 October 23, 1997)

(c) Acts contra bonos mores.

Not because a person does not violate a law, he/she is not liable for damages to the person
civilly wronged. Any person who wilfully causes loss or injury to another in manner that is
contrary to morals, good customs or public policy shall compensate the latter for the damage.
(Art. 21, Civil Code)

5. LWV Construction Corporation is engaged in the business of recruiting Filipino

workers for deployment to Saudi Arabia. St. Martin Polyclinic, Inc. (SMPI) is an entity
authorized to conduct medical examinations of prospective applicants for overseas
 employment. LWV referred a prospective applicant, Jonathan Raguindin, to SMPI for a
pre-deployment medical examination. Eventually, SMPI cleared Raguindin and found him
“fit for employment.” Based on the foregoing, LWV deployed Raguindin to Saudi Arabia.
Unfortunately, when Raguindin underwent another medical examination with the
General Care Dispensary of Saudi Arabia, he tested positive for Hepatitis C Virus.

LWV wants to file a complaint for damages against SMPI but it was unsure whether it
would base its cause of action on Arts. 19, 20, and 21 or Art. 2176 of the Civil Code. What
would you advice LWV?

The action for damages should be anchored on Art. Art. 2176 – instead of Arts. 19, 20 and 21 – of
the Civil Code. An action for damages due to the negligence of another may be instituted on the
basis of Art. 2176 of the Civil Code which defines a quasi-delict. However, Art. 2176 is not an all-
encompassing enumeration of all actionable wrongs which can give rise to the liability for damages.
Acts done in violation of Arts. 19, 20, and 21 will also give rise to damages. With respect to negligent
acts or omissions, it should be discerned that Art. 20 of the Civil Code concerns “violations of existing
law as basis for an injury,” whereas Art. 2176 applies when the negligent act causing damage to
another does not constitute “a breach of an existing law or a pre-existing contractual obligation.”

Here, the claimed negligent act of SMPI was not premised on the breach of any law, and not to
mention the incontestable fact that no pre-existing contractual relation was averred to exist between
the parties, Art. 2176 - instead of Arts. 19, 20 and 21 - of the Civil Code should govern. (St. Martin
Polyclinic, Inc., vs. LWV Construction Corporation, G.R. No. 217426, December 4, 2017, J. Perlas-
Bernabe)

6. Define an accion in rem verso. Distinguish it from solutio indebiti.

An accion in rem verso is an action for recovery of what has been paid without just cause. It is
enunciated in Art. 22 of the Civil Code which reads: “every person who, through an act of
performance by another, or any other means, acquires or comes into possession of something at the
expense of the latter without just or legal ground, shall return the same to him.”

An accion in rem verso is considered merely an auxiliary action, available only when there is no other
remedy on contract, quasi-contract, crime, and quasi-delict. If there is an obtainable action under any
other institution of positive law, that action must be resorted to, and the principle of accion in rem
verso will not lie. In solutio indebiti, mistake is an essential element while in an accion in rem verso, it
is not necessary that there should have been a mistake in the payment. Finally, accion in rem verso
derives its basis on law; whereas, solutio indebiti is a type of quasi-contract. (UP vs. Philab
Industries, Inc., G.R. No. 152411, September 29, 2004; Rabuya, supra.)

7. When may a criminal case for bigamy be considered as a prejudicial question?

Prejudicial question is that which arises in a case, the resolution of which is a logical antecedent of
the issue involved therein, and the cognizance of which, pertains to another tribunal. It exists when:
(i) the previously instituted civil action involves an issue similar or intimately related to the issue
raised in the subsequent criminal action; and (ii) the resolution of such issue determines whether or
not the criminal action may proceed. (People vs. Arabulo, G.R. No. 186597, June 17, 2015)

The requisites for conviction of the crime of bigamy are:

(1) That the offender has been legally married;
(2) That the first marriage has not been legally dissolved, or in case his/her spouse is absent, the
absent spouse could not yet judicially declared presumptively dead;
(3) That the offender contracts a second or subsequent marriage; and
 (4) The second or subsequent marriage has all the essential requisites for validity. (Vitangcol vs.
People, G.R. No. 207406, January 13, 2016)

When the FIRST marriage is alleged to be void . The crime of bigamy may be committed if the
subsequent marriage was entered into after the effectivity of the Family Code but without securing
first a judicial declaration of nullity of the previous marriage under Art. 40 of the Family Code. Hence,
even if a petition for declaration of nullity of the previous marriage was filed ahead of the criminal
action for bigamy, the former will not be a prejudicial question to the latter because any decision in
the civil action will not erase the fact that the accused in the bigamy case had entered into a second
marriage during the subsistence of the first marriage. This rule applies only where a marriage had
taken place although later declared void ab initio. But if no marriage ceremony at all was performed
by a duly authorized solemnizing officer, there is no marriage that took place. Hence, there is no
need to comply with the requirements of Art. 40. (Mercado vs. Tan, G.R. No. 137110, August 1,
2000; Marbella-Bobis vs. Bobis, G.R. No. 138509, July 31, 2000; Morigo vs. People, G.R. No. 145226,
February 06, 2004)

When the SECOND marriage is alleged to be void. For the accused to be convicted of bigamy, the
subsequent marriage must have all the essential requisites for validity except for the existence of a
prior marriage. Thus, if the subsequent marriage is void not because of the existence of the first
marriage but for other causes, the crime of bigamy is not committed. In such a situation, the prior
institution of a civil action for declaration of nullity of the subsequent marriage will constitute a
prejudicial question to the criminal action for bigamy. (Santiago vs. People, G.R. No. 200233, July 15,
2015; Rabuya, supra.)

PERSONS AND FAMILY RELATIONS

8. Three days after Nilda married Dante, the latter, a member of the AFP, left and went
to Jolo, Sulu where he was assigned. Since then, Nilda heard no news from Dante. She
tried to locate him, but her efforts proved futile. Thus, Nilda filed before the RTC a
petition to declare Dante as presumptively dead for the purpose of remarriage, alleging
that after the lapse of 33 years without any kind of communication from him, she firmly
believes that he is already dead. Nilda testified affirming that she exerted efforts to find
Dante by inquiring from his parents, relatives, and neighbors, who, unfortunately, were
also not aware of his whereabouts. Should Dante be declared presumptively dead?

No. Before a judicial declaration of presumptive death can be obtained, Art. 41 of the Family Code,
requires that:
(1) 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 Art. 391 of the Civil Code;
(2) The present spouse wishes to remarry;
(3) The present spouse has a well-founded belief that the absentee is dead; and
(4) The present spouse files a summary proceeding for the declaration of presumptive death of
the absentee.

Here, Nilda testified that after Dante's disappearance, she tried to locate him by making inquiries with
his parents, relatives, and neighbors as to his whereabouts, but unfortunately, they also did not know
where to find him. Other than making said inquiries, however, Nilda made no further efforts to find
her husband. She could have called or proceeded to the AFP headquarters to request information
about her husband, but failed to do so. She did not even seek the help of the authorities or the AFP
itself in finding him. Hence, Nilda failed to actively look for her missing husband, and her purported
earnest efforts to find him by asking Dante’s parents, relatives, and friends did not satisfy the strict
standard and degree of diligence required to create a “well-founded belief” of his death. Having fallen
 short of the stringent standard and degree of due diligence required by jurisprudence, such petition
for declaration of presumptive death cannot be granted. (Republic vs. Tampus, G.R. No. 214243,
March 16, 2016, J. Perlas-Bernabe)

9. May a petition whose sole objective is to declare a person presumptively dead under
Arts. 390 and 391 of the Civil Code be taken cognizance of by Philippine courts?

No. Such petition should be dismissed outright. This is because, in our jurisdiction, a petition whose
sole objective is to have a person declared presumptively dead under the Civil Code is not regarded
as a valid suit and no court has any authority to take cognizance of the same. A rule creating a
presumption of death is merely one of evidence that—while may be invoked in any action or
proceeding—cannot be the lone subject of an independent action or proceeding. Such petition
presents no actual controversy that a court could decide. In such action, there would be no actual
rights to be enforced, no wrong to be remedied nor any status to be established. Moreover, a court
action to declare a person presumptively dead under Arts. 390 and 391 of the Civil Code would be
unnecessary. The presumption in the said articles is already established by law. (Tadeo-Matias vs.
Republic, G.R. No. 230751, April 25, 2018)

10. Emma gave birth to a child who died one (1) minute immediately after its complete
delivery. Did the child acquire civil personality?

The child acquired personality, unless it had an intra-uterine life of less than seven (7) months. For
civil purposes, the fetus is considered born if it is alive at the time it is completely delivered from the
mother’s womb. However, if the fetus had an intra-uterine life of less than seven (7) months, it is not
deemed born if it dies within twenty-four (24) hours after its complete delivery from the maternal
womb. (Art. 41, Civil Code)

11. What are the rules on sex determination vis a vis (a) sex reassignment and (b)
persons who are biologically intersex?

Sex reassignment. Considering that there is no law legally recognizing sex reassignment, the
determination of a person’s sex made at the time of his or her birth, if not attended by error, is
immutable. The sex of a person is determined at birth, visually done by the birth attendant (the
physician or midwife) by examining the genitals of the infant. (Silverio vs. Republic, G.R. No. 174689,
October 22, 2007)

Intersex. However, where the person is biologically or naturally intersex (or diagnosed with
Congenital Adrenal Hyperplasia), the determining factor in his gender classification would be what
the individual, having reached the age of majority, with good reason thinks of his/her sex. Sexual
development in cases of intersex persons makes the gender classification at birth inconclusive. It is at
maturity that the gender of such persons is fixed. (Republic vs. Cagandahan, G.R. No. 166676,
September 12, 2008)

12. May the absence of real intention to establish a conjugal and family life nullify a
marriage?

No. 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. The avowed purpose of
marriage under Art. 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. (Republic
vs. Albios, G.R. No. 198780, October 16, 2013)

13. What is the status of the following marriages:

(a) A marriage between a step-brother and a step-sister.

It will depend on the date of celebration of marriage. If the marriage was celebrated during the
effectivity of the Civil Code but prior to the effectivity of the Family Code, said marriage is
expressly prohibited, therefore, void. However, if the marriage was celebrated from the time the
Family Code took effect, or on or after 3 August 1988, said marriage is no longer prohibited. (Art.
80, Civil Code)

(b) A marriage between a half-brother and a half-sister.

Void for being incestuous. Marriages between brothers and sisters, whether of the full or half
blood, are incestuous and void from the beginning, whether relationship between the parties be
legitimate or illegitimate. (Art. 35, Family Code)

(c) A marriage which took place five (5) months after the issuance of a marriage license.

Void for absence of an essential requisite. A marriage license shall be valid in any part of the
Philippines for a period of 120 days from the date of issue, and shall be deemed automatically
cancelled at the expiration of the said period if the contracting parties have not made use of it.
(Art. 20, Family Code)

(d) A marriage contracted by an 18-year old illegitimate child who obtained the parental
consent only of her putative father.

Voidable for lack of parental consent. Since illegitimate children are under the exclusive parental
authority of their mother, it is the consent of the mother that is required. (Art. 176, Family Code)

(e) A second marriage celebrated on August 3, 1984 contracted by a person whose first
husband had been missing for four (4) consecutive years, without securing a judicial
declaration of presumptive death.

Valid. The requirement of securing a judicial declaration of presumptive death for purposes of
remarriage applies only to marriages celebrated during the effectivity of the Family which took
effect on August 3, 1988. Prior thereto, the applicable law is the Civil Code which does not
impose a similar requirement. (Armas vs. Calisterio, G.R. No. 136467, April 6, 2000)

(f) A marriage where one party was afflicted with a sexually-transmissible disease found
to be serious and appears to be incurable during the marriage.

Valid. For affliction with a sexually-transmissible disease (STD) to render a marriage voidable, it
must either be (a) existing at the time of the marriage; or (b) concealed and existing at the time
of the marriage amounting to fraud in obtaining consent. (Arts. 45-46, Family Code)

(g) A marriage which took place with the presence of only three (3) persons: the
contracting parties and the solemnizing officer.
 Valid. The absence of at least two (2) witnesses of legal age is a mere irregularity that shall not
affect the validity of the marriage, but the party or parties responsible for the irregularity shall be
civilly, criminally and administratively liable. (Arts. 3-4, Family Code)

14. As a rule, all marriages solemnized outside the Philippines, in accordance with the
laws in force in the country where they were solemnized, and valid there as such, shall
also be valid in the Philippines. What are the exceptions to this rule?

Marriages under Arts. 35 (1), (4), (5) and (6), 36, 37 and 38 of the Family Code shall be void from
the beginning even if solemnized outside the Philippines, and valid there as such. More specifically:
(1) Marriages contracted by any party below 18 years of age even with the consent of parents or
guardians;
(2) Bigamous or polygamous marriages not failing under Art. 41 which provides that where
before the celebration of a subsequent marriage, a prior spouse had been absent for four
consecutive years (or four years in case of disappearance where there is danger of death)
and the spouse present has a well-founded belief that the absent spouse was already dead,
and the spouse present will institute a summary proceeding for the declaration of
presumptive death of the absentee;
(3) Marriages contracted through mistake of one contracting party as to the identity of the
other;
(4) Subsequent marriages that are void under Art. 53, i.e., when there is non-compliance with
the requirement of recording in the appropriate civil registry and registries of property the
judgment of annulment or of absolute nullity of the marriage, the partition and distribution of
the properties of the spouses and the delivery of the children’s presumptive legitimes, and
either of the former spouses marry again;
(5) A marriage contracted by any party who, at the time of the celebration, was psychologically
incapacitated to comply with the essential marital obligations of marriage, even if such
incapacity becomes manifest only after its solemnization;
(6) Incestuous marriages, whether relationship between the parties be legitimate or illegitimate:
a. between ascendants and descendants of any degree; or
b. between brothers and sisters, whether of the full or half blood; and
(7) Void marriages for reasons of public policy:
a. Between collateral blood relatives whether legitimate or illegitimate, up to the fourth
civil degree;
b. Between step-parents and step-children;
c. Between parents-in-law and children-in-law;
d. Between the adopting parent and the adopted child;
e. Between the surviving spouse of the adopting parent and the adopted child;
f. Between the surviving spouse of the adopted child and the adopter;
g. Between an adopted child and a legitimate child of the adopter;
h. Between adopted children of the same adopter; and
i. Between parties where one, with the intention to marry the other, killed that other
person's spouse, or his or her own spouse.

15. What are the instances when marriage license may be dispensed with?

The requirement of marriage license may be dispensed with in the following instances:
(1) Marriage in articulo mortis (at the point of death) even if the ailing party subsequently
survives;
(2) If the residence of either party is so located that there is no means of transportation to
enable such party to personally appear before the local civil registrar;
(3) Marriage among Muslims or among members of the ethnic cultural communities, provided
they are solemnized in accordance with their customs, rites or practices;
 (4) Marriage between a man and a woman who have lived together as husband and wife for at
least five years and without impediment to marry each other; (Art. 27, 28, 33, and 34,
Family Code)
(5) Marriages celebrated abroad and in accordance with the laws of the place of celebration
which do not require a valid marriage license (Art. 26, and 35, FC)

16. Tamano married Zorayda in 2012. When they separated in fact, Tamano married
Estrellita, her childhood sweetheart. In 2018, when Zorayda found out about the second
marriage of her husband filed a complaint for the declaration of nullity of marriage
between Estrellita and Tamano for being bigamous. In opposing the complaint, Estrellita
claims that only the husband or the wife in a void marriage can file a petition for
declaration of nullity of marriage pursuant to AM No. 02-11-10-SC. Is she correct?

No. The aggrieved spouse in the prior marriage has personality to file the petition of absolute nullity
of a subsequent marriage on the ground of bigamy. AM No. 02-11-10-SC does not preclude a spouse
of a subsisting marriage to question the validity of a subsequent marriage. On the contrary, the rule
refers to the husband or wife of the subsisting marriage because the parties to the subsequent
bigamous marriage are neither the husband or the wife under the law. (Juliano-Llave vs. Republic,
G.R. No. 169766, March 30, 2011)

17. Will a person who contracted another marriage be liable for bigamy, if the first one is
contracted only through signing a marriage contract, and without a marriage ceremony?

No, as the first marriage is not a marriage at all. The mere private act of signing a marriage contract
bears no semblance to a valid marriage and thus, needs no judicial declaration of nullity. Such act
alone, without more, cannot be deemed to constitute an ostensibly valid marriage for which a person
might be held liable for bigamy unless he first secures a judicial declaration of nullity before he
contracts a subsequent marriage. (Morigo vs. People, G.R. No. 145226, February 06, 2004)

18. Can consul-generals, consuls, or vice-consuls solemnize a marriage abroad between a

Filipino and an Alien?

No, consul-generals, consults, or vice-consuls cannot solemnize mixed marriages. Only marriages
between Filipino citizens abroad may be solemnized by a consul-general, consul or vice-consul of the
Republic of the Philippines. With this, their authority is limited to marriages of both Filipinos residing
abroad. (Art. 10, Family Code)

19. May a divorce decree obtained abroad by a Filipino married to a foreigner be

recognized as valid in the Philippines pursuant to Par. 2, Art. 26 of the Family Code?

Yes, Par. 2, Art. 26 of the Family Code still applies even if it is the Filipino spouse who obtained a
divorce decree, thus, it will still capacitate him or her to remarry. The purpose of Par. 2 of Article 26
is to avoid the absurd situation where the Filipino spouse remains married to the alien spouse who,
after a foreign divorce decree that is effective in the country where it was rendered, is no longer
married to the Filipino spouse. The provision is a corrective measure to address an anomaly where
the Filipino spouse is tied to the marriage while the foreign spouse is free to marry under the laws of
his or her country. Whether the Filipino spouse initiated the foreign divorce proceeding or not, a
favorable decree dissolving the marriage bond and capacitating his or her alien spouse to remarry will
have the same result: the Filipino spouse will effectively be without a husband or wife. A Filipino who
initiated a foreign divorce proceeding is in the same place and in like circumstance as a Filipino who
is at the receiving end of an alien-initiated proceeding. (Republic vs. Manalo, G.R. No. 221029, April
24, 2018)
20. A petition for declaration of nullity of marriage was filed by Restituto against his
wife, Rosita. Restituto submits that at the precise time that his marriage with Rosita was
celebrated, there was no marriage license because he and Rosita just went to the Manila
City Hall and dealt with a “fixer” who arranged everything for them. The wedding took
place at the stairs in Manila City Hall and not on a Chapel where the solemnizing officer
of the marriage belongs. He and Rosita did not go to Carmona, Cavite, to apply for a
marriage license. Assuming a marriage license from Carmona, Cavite, was issued to
them, neither he nor Rosita was a resident of the place. Restituto alleged that marriage
license with a number, procured in Carmona, Cavite, appearing on the marriage contract,
is a sham, as neither party was a resident of Carmona, and they never went to Carmona
to apply for a license with the local civil registrar of the said place. Answering the
petition, Rosita asserts the validity of their marriage and maintains that there was a
marriage license issued as evidenced by a Certification from the Office of the Civil
Registry of Carmona, Cavite.

(a) Is the marriage void on the ground of absence of a marriage license?

No. To be considered void on the ground of absence of a marriage license, the law requires that
the absence of such marriage license must be apparent on the marriage contract, or at the very
least, supported by a certification from the local civil registrar that no such marriage license was
issued to the parties. Here, the marriage contract between the Restituto and Rosita reflects a
marriage license number. A Certification to this effect was also issued by the Local Civil Registrar
of Carmona, Cavite. The Certification moreover is precise in that it specifically identified the
parties to whom the marriage license was issued, further validating the fact that a license was in
fact issued to the parties herein. This Certification enjoys the presumption that official duty has
been regularly performed and the issuance of the marriage license was done in the regular
conduct of official business.

(b) How about the issuance of the marriage license in Carmona, Cavite where neither
party was a resident of?

As to the claim that neither Restituto nor Rosita is a resident of Carmona, Cavite, even then,
there is no sufficient basis to declare the marriage void their marriage. Issuance of a marriage
license in a city or municipality, not the residence of either of the contracting parties, and
issuance of a marriage license despite the absence of publication or prior to the completion of the
10-day period for publication are considered mere irregularities that do not affect the validity of
the marriage. An irregularity in any of the formal requisites of marriage does not affect its validity
but the party or parties responsible for the irregularity are civilly, criminally and administratively
liable. (Alcantara vs. Alcantara, G.R. No. 167746, August 28, 2007)

21. Anthony and Annabelle met and became sweethearts in 1991. They planned to get
married, thus they applied for a marriage license with the Office of the Civil Registrar in
September 1994. They had their first sexual relation sometime in October 1994, and had
regularly engaged in sex thereafter. When the couple went back to the Office of the Civil
Registrar, the marriage license had already expired. Thus, in order to push through with
the plan, in lieu of a marriage license, they executed an affidavit dated 13 March 1995
stating that they had been living together as husband and wife for at least five years. The
couple got married on the same date. Nevertheless, after the ceremony, Anthony and
Annabelle went back to their respective homes and did not live together as husband and
wife. Eventually, Anthony filed a petition for annulment of marriage claiming that their
marriage is void ab initio since the marriage was facilitated by a fake affidavit. Annabelle
countered that such fake affidavit is a mere irregularity in the formal requisites of
marriage. What is the status of the marriage?
 The marriage is void. The absence of any of the essential or formal requisites shall render the
marriage void ab initio, whereas a defect in any of the essential requisites shall render the marriage
voidable.

Here, it is clear that the parties did not have a marriage license when they contracted their marriage.
Instead, they presented an affidavit stating that they had been living together for more than five
years. The falsity of the affidavit cannot be considered as a mere irregularity in the formal requisites
of marriage. The false affidavit which parties executed so they could push through with the marriage
has no value whatsoever; it is a mere scrap of paper. They were not exempt from the marriage
license requirement. Their failure to obtain and present a marriage license renders their marriage
void ab initio. What exempts contracting parties from getting a valid marriage license under Art. 34 is
not the affidavit of marital cohabitation, but the FACT of such cohabitation. (De Castro vs. Assidao-
De Castro, G.R. No. 160172, February 13, 2008)

22. Discuss the difference between bigamous marriage under Art. 40 and Art. 35 (4) of
the Family Code?

Art. 40 should refer to situations where the prior marriage is itself void but a party thereto did not
secure a judicial declaration of nullity of the prior marriage before contracting a subsequent marriage.
In such a situation, the subsequent marriage is also void because of failure to comply with Art. 40 of
the Family Code. If the prior marriage is perfectly valid, or at least voidable, and a party thereto
contracts another marriage prior to its termination, the subsequent marriage is void for being
bigamous pursuant to Article 35(4) of the Family Code. (Rabuya, supra.) The property regime in a
marriage following a void marriage under Art. 40 is ACP, while the property regime in a marriage
following a bigamous marriage under Art. 35(4) is governed by Art. 148.

23. When is declaration of nullity of marriage on the ground of psychological incapacity

warranted?

To warrant the declaration of nullity of marriage, the psychological incapacity must be characterized
by:
(1) Gravity, i.e., it must be grave and serious such that the party would be incapable of carrying
out the ordinary duties required in a marriage;
(2) Juridical antecedence i.e., it must be rooted in the history of the party antedating the
marriage, although the overt manifestations may emerge only after the marriage; and
(3) Incurability i.e., it must be incurable, or even if it were otherwise, the cure would be beyond
the means of the party involved. (Santos vs. CA, G.R. No. 112019 January 4, 1995)

24. Ellen sought for a judicial decree of presumptive death of her husband Badong which
allowed her to validly marry her childhood sweetheart, Cardoso. Later, Badong appeared.
What is the effect of Badong’s re-appearance to Ellen’s subsequent marriage?

It will have no effect on the validity of Ellen’s subsequent marriage, unless Badong files an Affidavit
of Reappearance. The second marriage shall automatically be terminated by recording Badong’s
affidavit of reappearance, unless there is a judgment annulling the previous marriage or declaring it
void ab initio. The sworn statement of the fact and circumstances of reappearance shall be recorded
in the civil registry of the residence of the parties to the subsequent marriage at the instance of any
interested person, with due notice to the spouses of the subsequent marriage and without prejudice
to Spouse the fact of reappearance being judicially determined in case such fact is disputed. (Arts.
41-42, Family Code)
25. Celerina was declared presumptively dead after her husband, Ricardo, had filed a
petition for declaration of absence or presumptive death for the purpose of remarriage
with the RTC knowing fully well that his wife is still alive. Celerina filed a petition for
annulment of judgment on the grounds of extrinsic fraud and lack of jurisdiction. The
RTC dismissed Celerina’s petition for annulment of judgment for being a wrong remedy.
According to the RTC, the proper remedy was to file a sworn statement before the civil
registry, declaring her reappearance in accordance with Art. 42 of the Family Code.

(a) Is the RTC correct?

No. The provision on reappearance in the Family Code as a remedy to effect the termination of
the subsequent marriage does not preclude the spouse who was declared presumptively dead
from availing other remedies existing in law. The Supreme Court had, in fact, recognized that a
subsequent marriage may also be terminated by filing an action in court to prove the
reappearance of the absentee and obtain a declaration of dissolution or termination of the
subsequent marriage.

(b) What are the possible consequences of filing either a petition for annulment of
judgment of the declaration of presumptive death or an affidavit of reappearance?

The choice of remedy is important because remedies carry with them certain admissions,
presumptions, and conditions. The filing of an affidavit of reappearance is an admission on the
part of the first spouse that his or her marriage to the present spouse was terminated when he
or she was declared absent or presumptively dead. Reappearance of the absent or presumptively
dead spouse will cause the termination of the subsequent marriage only when all the conditions
enumerated in the Family Code are present. Hence, the subsequent marriage may still subsist
despite the absent or presumptively dead spouse’s reappearance (1) if the first marriage has
already been annulled or has been declared a nullity; (2) if the sworn statement of the
reappearance is not recorded in the civil registry of the subsequent spouses’ residence; (3) if
there is no notice to the subsequent spouses; or (4) if the fact of reappearance is disputed in the
proper courts of law, and no judgment is yet rendered confirming, such fact of reappearance.

The choice of the proper remedy is also important for purposes of determining the status of the
second marriage and the liabilities of the spouse who, in bad faith, claimed that the other spouse
was absent. A subsequent marriage contracted in bad faith, even if it was contracted after a
court declaration of presumptive death, lacks the requirement of a well-founded belief that the
spouse is already dead. The first marriage will not be considered as validly terminated. Marriages
contracted prior to the valid termination of a subsisting marriage are generally considered
bigamous and void. Only a subsequent marriage contracted in good faith is protected by law.
Therefore, the party who contracted the subsequent marriage in bad faith is also not immune
from an action to declare his subsequent marriage void for being bigamous. The prohibition
against marriage during the subsistence of another marriage still applies.
Therefore, for the purpose of not only terminating the subsequent marriage but also of nullifying
the effects of the declaration of presumptive death and the subsequent marriage, mere filing of
an affidavit of reappearance would not suffice. (Santos vs. Santos, G.R. No. 187061, October 8,
2014)

26. State and explain briefly the applicable property regime in the following instance:

(a) A void marriage by reason of psychological incapacity.

Property regime provided in Art. 147 of the Family Code. The said property regime applies to void
marriages where the reason for the nullity of the marriage is not absence of legal capacity, such
 as void marriage by reason of psychological incapacity in Art. 36 of the Family Code. (Art. 147,
Family Code; Diño vs. Diño, G.R. No. 178044, January 19, 2011)

(b) A second marriage celebrated in 1990 without a marriage settlement but one of the
parties thereto had a prior void marriage which has not yet been judicially declared
void.

Absolute community of property. It is because the said property regime applies by default in the
absence of a marriage settlement for marriages celebrated during the effectivity of the Family
Code. Even though the second marriage is void for failure to comply with the requirements of
Article 40 of the Family Code, the latter kind of void marriage is also governed by the same rules
applicable to valid marriages for purposes of determining its property regime. (Art. 50, in relation
to Art. 43 [2], Family Code; Diño vs. Diño, supra.)

(c) A second marriage contracted by the surviving spouse during the effectivity of the
Family Code and without a marriage settlement after the prior marriage was
terminated by reason of death but the surviving spouse failed to liquidate the
conjugal partnership of said prior marriage.

Complete separation of property. Under the Family Code, if the conjugal partnership or the
absolute community of the prior marriage was terminated by reason of death and the surviving
spouse failed to liquidate the property regime within one year from the death of the deceased
spouse, the subsequent marriage shall be mandatorily governed by complete separation. (Art.
130, Family Code)

(d) A second marriage celebrated during the subsistence of a prior voidable marriage.

Property regime provided in Art. 148 of the Family Code. It is because the marriage is void for
being a bigamous marriage under Art. 35(4) of the same Code. The said property regime applies
to void marriages where the reason for the nullity of the marriage is absence of legal capacity,
like a bigamous marriage in Art. 35(4). (Art. 148, Family Code)

(e) When after the issuance of the decree of legal separation, the spouses reconciled and
obtained a decree of reconciliation from the court.

Complete separation of property. After the issuance of the decree of legal separation, the
property regime of the spouses shall be complete separation. While a decree of reconciliation
sets aside the decree of legal separation, the separation of property subsists, however, unless
the spouses have agreed to revive their former property regime. (Art. 66 [2], Family Code; Sec.
23 [d], Rule on Legal Separation)

(f) When after the issuance of the decree of reconciliation, the spouses executed an
agreement for the adoption of conjugal partnership of gains as their new property
regime and such agreement is approved by the court.

Complete separation of property. After the issuance of the decree of legal separation, the
property regime of the spouses shall be complete separation. Even when the spouses executed
an agreement for the adoption of conjugal partnership as their new property regime and the
same is approved by the court, the agreement is void because the law mandates that such
property regime can only commence at the precise moment of the celebration of the marriage.
Any agreement to the contrary, whether express or implies, is declared by law to be void. (Art.
107, in relation to Art. 88, Family Code)
27. Willem, a Dutch National, and Avelina, a Filipina, married in 1980. After several years,
the RTC declared the nullity of their marriage in 2000 on the basis of the former’s
psychological incapacity. Consequently, Willem filed a Petition for Dissolution of
Conjugal Partnership praying for the distribution of the several parcels of land in
Dumaguete City claimed to have been acquired during the subsistence of their marriage.
Willem insisted that the money used to purchase the said properties came from his own
capital funds and that they were registered in the name of his former wife only because
of the constitutional prohibition against foreign ownership. Thus, on the ground of
equity, he prayed for reimbursement of one-half (1/2) of the value of what he had paid
in the purchase of the said properties, waiving the other half in favor of his estranged ex-
wife. Should the prayer for reimbursement be granted?

No. Willem cannot seek reimbursement on the ground of equity where it is clear that he willingly and
knowingly bought the property despite the prohibition against foreign ownership of Philippine land
enshrined under Sec. 7, Art. XII of the 1987 Philippine Constitution which reads: “Save in cases of
hereditary succession, no private lands shall be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold lands of the public domain.” Undeniably,
Willem openly admitted that he “is well aware of the above-cited constitutional prohibition” and even
asseverated that, because of such prohibition, he and respondent registered the subject properties in
the latter’s name. Clearly, Willem’s actuations showed his palpable intent to skirt the constitutional
prohibition. (Beumer vs. Mores, G.R. No. 195670, December 3, 2012, J. Perlas-Bernabe)

28. What are the properties included and excluded in the absolute community of
property?

Properties Acquired Prior Properties Acquired During

to the Marriage the Marriage
GENERAL RULE
Included in the absolute community of property Included in the ACP.
(ACP).
EXCEPTIONS
a. Those excluded in the marriage settlement; a. Those acquired through gratuitous title,
b. Those for personal and exclusive use; and including fruits and income unless expressly
c. Those acquired by either spouse who has provided by the grantor that they shall form part
legitimate descendants by a former marriage, of the ACP; and
including fruits and income. b. Those for personal and exclusive use.
(Arts. 91-92, Family Code; Rabuya, supra.)

29. What are the properties included and excluded in the conjugal partnership of gains?

Properties Acquired Prior Properties Acquired During

to the Marriage the Marriage
GENERAL RULE
Not included in the conjugal partnership of gains Included in the CPG.
(CPG), but fruits and income accruing during the
marriage are included.
EXCEPTIONS
When included in the marriage settlement subject to a. If acquired through gratuitous title, but the fruits
the following limitations: and income of said properties are included in the
a. May not exceed more than 1/5 of present CPG.
property; and b. If acquired through onerous title and:
b. May not include properties acquired prior to i. Using exclusive money or funds; or
marriage if either of the future spouses has ii. Using conjugal funds but the acquisition is by
legitimate descendants in a former marriage. way of exercise of right of redemption, subject
to reimbursement.
 (Arts. 109, and 116-117, Family Code; Rabuya,
supra.)

30. Discuss the property regimes of the two kinds of unions without marriage under the
Family Code.

Article 147 Article 148

APPLICABILITY
1. Capacitated to marry each other. With legal impediment to marry ( e.g., adulterous
2. Live exclusively as husband and wife without the relationships, bigamous or polygamous marriages ,
benefit of marriage or under a void marriage incestuous marriages, void marriages by reason of
(due to absence of formal requisites). public policy under Art. 38 of the Family Code).
SALARIES & WAGES
Owned in equal shares. Separately owned by the parties.
PROPERTY ACQUIRED EXCLUSIVELY BY EITHER PARTY
Belongs to such party provided there is proof that Belongs to such party.
he/she acquired it by exclusive funds.
PROPERTY ACQUIRED BY BOTH PARTIES
Governed by the rules on co-ownership when the Owned by them in common in proportion to their
presumption of joint acquisition and equal respective contributions.
Sharing applies.
PRESUMPTION (PRIMA FACIE)
Presumption of joint acquisition and equal sharing as No presumption of joint acquisition. When there is
to property acquired while they live together. evidence of joint acquisition but none as to the extent
of actual contribution, there is a presumption of equal
sharing.
FORFEITURE
When one of the parties is bad faith his share in the 1. If one of the parties is validity married to
co-ownership shall be fortified: another, his/her share in the co-ownership shall
1. In favor of their common children; accrue to the absolute community or conjugal
2. In favor of the innocent party, in default of or in partnership existing in such valid marriage.
case of waiver by any or all of the common 2. If the party who acted in bad faith is not validly
children or their descendants. married to another or if both parties are in bad
faith, such share shall be fortified in the manner
provided in the last paragraph of Art. 147 of the
Family Code. (Arts. 147-148, Family Code)

31. In 2009, the spouses Angelica and Bernand purchased a parcel of land for ₱250,000
where they live and dwell. In 2012, Samson Corporation purchased the properties
adjacent to the house of the spouses and put up a mall. Consequently, the fair market
value of the property shoot up to ₱3 Million. Karding, a creditor filed a complaint against
the spouses to enforce collection of debt worth ₱500,000. Judgment was rendered in
favor of Karding. The judge ordered the attachment of the subject land and ordered that
it be sold at a public auction to satisfy the claim on Karding. Is the judge correct?

No. While Art. 160 of the Family Code authorizes the sale of family home pursuant to an order
obtained by a judgment creditor not listed in Art. 155 of the Code, to warrant the execution sale, the
following facts must be established:
(1) There was an increase in its actual value;
(2) The increase resulted from voluntary improvements on the property introduced by the
persons constituting the family home, its owners or any of its beneficiaries; and
(3) The increased actual value exceeded the maximum allowed under Art. 157.

Here, while the first and third requisites are present, the second requisite is wanting because the
reason for the increase in the actual value of the family home is due to involuntary improvement.
 Here, the value of the property appreciated because of the action of a third person. (Eulogio vs. Bell,
Sr., G.R. No. 186322 July 8, 2015)

32. Spouses Fortaleza obtained a loan from spouses Rolando in the amount of ₱1.2
Million. As security, spouses Fortaleza executed a Deed of Real Estate Mortgage over
their residential house and lot in Cebu City. When spouses Fortaleza failed to pay the
indebtedness including the interests and penalties, the creditors applied for extrajudicial
foreclosure of the Real Estate Mortgage. Spouses Fortaleza opposed the application
contending that the property is exempt from forced sale. Is the opposition of Spouses
Fortaleza tenable?

No. As a rule, the family home is exempt from execution, forced sale or attachment. However, Art.
155(3) of the Family Code explicitly allows the forced sale of a family home “for debts secured by
mortgages on the premises before or after such constitution.” Here, there is no doubt that spouses
Fortaleza voluntarily executed a deed of Real Estate Mortgage over the subject property. (Sps.
Fortaleza vs. Sps. Lapitan, G.R. No. 178288, August 15, 2012)

33. May the court grant “limited and temporary custody” to a parent who is deprived of
the care and custody of his/her minor child ahead of trial relating to custody of a child
under seven (7) years of age?

No. Sec. 15 of A.M. No. 03-04-04-SC (Rule on Custody of Minors and Writ of Habeas Corpus in
Relation to Custody of Minors) provides for temporary visitation rights, not temporary custody. It is
only after trial, when the court renders its judgment awarding the custody of the minor to the proper
party, that the court may likewise issue “any order that is just and reasonable permitting the parent
who is deprived of the care and custody of the minor to visit or have temporary custody.” By granting
temporary albeit limited custody ahead of trial, the trial court will overturn the tender-age
presumption with nothing but bare allegations, to which the Court cannot give its imprimatur.
(Masbate, vs. Relucio, G.R. No. 235498, July 30, 2018, J. Perlas-Bernabe)

34. When may a child conceived through artificial insemination be considered legitimate?

For a child conceived through artificial insemination to be considered legitimate, the following
conditions must be present:
(1) The artificial insemination is made on the wife, not on another woman;
(2) The artificial insemination on the wife is done with the sperm of the husband or of a donor,
or both the husband and a donor;
(3) The artificial insemination has been authorized or ratified by the spouse on a written
instrument executed and signed by them before the birth of the child; and
(4) The written instrument is recorded in the civil registry together with the birth certificate of
the child. (Art. 164, par. 2, Family Code)

35. Corazon is legally married to but living separately from Ramon for more than 10
years. Corazon cohabited with William from 2005 up to the time of William’s demise in
2015. In 2014, Corazon gave birth to Willy. Upon William’s death, Corazon, on behalf of
her child, filed an action for compulsory recognition of the latter as an illegitimate child
of William for the purpose of participating in the proceedings involving the estate of
William. Will the action prosper?

No. It is settled that a child born within a valid marriage is presumed legitimate even though the
mother may have declared against its legitimacy or may have been sentenced as an adulteress. Only
the husband, or in exceptional circumstances, his heirs, could impugn the legitimacy of a child born in
a valid and subsisting marriage. The child himself cannot choose his own filiation. If the husband,
 presumed to be the father does not impugn the legitimacy of the child, then the status of the child is
fixed, and the latter cannot choose to be the child of his mother’s alleged paramour. On the other
hand, if the presumption of legitimacy is overthrown, the child cannot elect the paternity of the
husband who successfully defeated the presumption.

Here, Willy was born within the valid marriage of Ramon and Corazon, giving rise to the presumption
of his legitimacy. Thus, the general rule applies that the legitimacy of the child can be impugned only
in a direct action brought for that purpose, by the proper parties (in this case, the husband) and
within the period limited by law. (Liyao, Jr. vs. Tanhoti-Liyao, G.R. No. 138961. March 7, 2002)

36. Does a due recognition of an illegitimate child in a statement before a court of record,
or in any authentic writing (like a Social Security System Form E-1) satisfy the
requirement for proof of filiation under the Family Code?

Yes. The filiation of illegitimate children, like legitimate children, is established by (1) the record of
birth appearing in the civil register or a final judgment; or (2) an admission of legitimate filiation in a
public document or a private handwritten instrument and signed by the parent concerned. In the
absence thereof, filiation shall be proved by (1) the open and continuous possession of the status of
a legitimate child; or (2) any other means allowed by the Rules of Court and special laws. The due
recognition of an illegitimate child in a record of birth, a will, a statement before a court of record, or
in any authentic writing is, in itself, a consummated act of acknowledgment of the child, and no
further court action is required. In fact, any authentic writing is treated not just a ground for
compulsory recognition; it is in itself a voluntary recognition that does not require a separate action
for judicial approval. Where, instead, a claim for recognition is predicated on other evidence merely
tending to prove paternity, i.e., outside of a record of birth, a will, a statement before a court of
record or an authentic writing, judicial action within the applicable statute of limitations is essential in
order to establish the child’s acknowledgment. (Aguilar vs. Siasat, G.R. No. 200169, January 28,
2015)

37. Richelle filed a Complaint for Support against Policarpio alleging that while she was
still a minor, she was repeatedly sexually abused by Policarpio. As a result, she allegedly
gave birth to a child. Policarpio filed a Motion to Dismiss on the ground of lack of cause
of action for support because filiation and paternity of the child had not been previously
established and that Richelle should have first instituted filiation proceedings to
adjudicate the minor child's paternity. Is he correct?

No. To establish filiation, an action for compulsory recognition may be filed against the putative
father ahead of an action for support. In the alternative, an action for support may be directly filed,
where the matter of filiation shall be integrated and resolved. Indeed, an integrated determination of
filiation is “entirely appropriate” to the action for support filed by Richelle for her child. An action for
support may very well resolve that ineluctable issue of paternity if it involves the same parties, is
brought before a court with the proper jurisdiction, prays to impel recognition of paternal relations,
and invokes judicial intervention to do so. (Abella vs. Cabañero, G.R. No. 206647, August 9, 2017)

38. Who may adopt under R.A. No. 8552 (Domestic Adoption Act of 1998)?

The following may adopt:

(1) Any Filipino citizen –
a. of legal age,
b. in possession of full civil capacity and legal rights,
c. of good moral character,
d. has not been convicted of any crime involving moral turpitude,
e. emotionally and psychologically capable of caring for children,
 f. at least 16 years older than the adoptee, and
g. who is in a position to support and care for his children in keeping with the means of
the family; or
(2) Any alien possessing the same qualifications as above stated for Filipino nationals, provided –
a. His country has diplomatic relations with the Republic of the Philippines,
b. He has been living in the Philippines for at least three (3) continuous years prior to
the filing of the application for adoption and maintains such residence until the
adoption decree is entered,
c. He has been certified by his diplomatic or consular office or any appropriate
government agency that he has the legal capacity to adopt in his country, and
d. His government allows the adoptee to enter his country as his adopted child.
(3) The guardian with respect to the ward after the termination of the guardianship and
clearance of his financial accountabilities. (Sec. 7, RA 855)

39. When may the 16-year old age gap between the adopter and the adoptee be
dispensed with?

The requirement of 16-year difference between the age of the adopter and adoptee may be waived
when:
(1) The adopter is the biological parent of the adoptee; or
(2) The adopter is the spouse of the adoptee's parent. (Sec. 7, RA 855)

40. When may the requirements on residency and certification of the alien’s qualification
to adopt be dispensed with?

The requirements on residency and certification of the alien’s qualification to adopt in his country
may be waived for the following:
(1) A former Filipino citizen who seeks to adopt a relative within the fourth (4th) degree of
consanguinity or affinity;
(2) One who seeks to adopt the legitimate child of his Filipino spouse; or
(3) One who is married to a Filipino citizen and seeks to adopt jointly with his spouse a relative
within the fourth degree of consanguinity or affinity of the Filipino spouse. (Sec. 7, RA 855)

41. Whose consent is necessary for adoptions secured under RA 8552?

After being properly counseled and informed of his/her right to give or withhold his/her approval of
the adoption, the written consent of the following to the adoption is required:
(1) The adoptee, if 10 years of age or over;
(2) The biological parent/s of the child, if known, or the legal guardian, or the proper
government instrumentality which has legal custody of the child;
(3) The legitimate and adopted sons/daughters, 10 years of age or over, of the adopter/s and
adoptee, if any;
(4) The illegitimate sons/daughters, 10 years of age or over, of the adopter if living with said
adopter and the latter's spouse, if any; and
(5) The spouse, if any, of the person adopting or to be adopted. (Sec. 9, RA 8552)

42. Who may be adopted under RA 8552?

The following may be adopted:

(1) Any person below 18 years of age who has been administratively or judicially declared
available for adoption;
(2) The legitimate son/daughter of one spouse by the other spouse;
 (3) An illegitimate son/daughter by a qualified adopter to improve his/her status to that of
legitimacy;
(4) A person of legal age if, prior to the adoption, said person has been consistently considered
and treated by the adopter/s as his/her own child since minority;
(5) A child whose adoption has been previously rescinded; or
(6) A child whose biological or adoptive parent/s has died (provided that no proceedings shall be
initiated within 6 months from the time of death of said parent/s).

43. What are the exceptions to the rule that husband and wife must jointly adopt?

Husband and wife are not required to adopt jointly:

(1) If one spouse seeks to adopt the legitimate son/daughter of the other;
(2) If one spouse seeks to adopt his/her own illegitimate son/daughter; provided, however, that
the other spouse has signified his/her consent thereto; or
(3) If the spouses are legally separated from each other. (Sec. 7, RA 8552)

44. What are the effects of adoption?

As to parental authority, except in cases where the biological parent is the spouse of the adopter, all
legal ties between the biological parent/s and the adoptee shall be severed and the same shall then
be vested on the adopter/s.

As to legitimacy, the adoptee shall be considered the legitimate son/daughter of the adopter/s for all
intents and purposes and as such is entitled to all the rights and obligations provided by law to
legitimate children born to them without discrimination of any kind. To this end, the adoptee is
entitled to love, guidance, and support in keeping with the means of the family.

As to succession, in legal and intestate succession, the adopter/s and the adoptee shall have
reciprocal rights of succession without distinction from legitimate filiation. However, if the adoptee
and his biological parent/s had left a will, the law on testamentary succession shall govern. (Secs. 16-
18, RA 8552)

45. Who may cause the rescission of adoption? What are its effects?

Only the adoptee upon petition, with the assistance of the Department of Social Welfare and
Development (DSWD), if the adoptee is a minor or if 18 years of age but is incapacitated, as
guardian/counsel, may cause the adoption to be rescinded on valid grounds. Adoption, being in the
best interest of the child, shall not be subject to rescission by the adopter/s. However, the adopter/s
may disinherit the adoptee for causes provided in the Civil Code.

If the petition is granted, the following are the effects:

a. The parental authority of the adoptee’s biological parent/s, if known, or the legal custody of
the DSWD shall be restored if the adoptee is still a minor or incapacitated;
b. The reciprocal rights and obligations of the adopter/s and the adoptee to each other shall be
extinguished;
c. The court shall order the Civil Registrar to cancel the amended certificate of birth of the
adoptee and restore his/her original birth certificate;
d. Succession rights shall revert to its status prior to adoption, but only as of the date of
judgment of judicial rescission. Vested rights acquired prior to judicial rescission shall be
respected;
e. All the foregoing effects of rescission of adoption shall be without prejudice to the penalties
imposable under the Revised Penal Code if the criminal acts are properly proven. (Secs. 19-
20, RA 8552)
46. John was employed in Katta Shipping Company He was enrolled under the
government’s Employees’ Compensation Program (ECP). He died due to an accident
while on board the vessel of the Company. John was, at the time of his death, childless
and unmarried. Bernardina, John’s biological mother filed a claim for death benefits. SSS
denied the claim on the ground that Bernardina was no longer considered as the parent
of John since the latter was legally adopted by a certain Cornelio. According to the
records, Cornelio died during John’s minority. Is Bernardina qualified as beneficiary?

Yes. The death of an adopting parent during the minority of the adopted child automatically revives
the filial relationship of the child to his/her biological parents. State policies behind RA 8552 wherein
the paramount consideration is the best interest of the child justify such disposition. It is, after all, for
the best interest of the child that someone will remain charged for his welfare and upbringing should
his or her adopter fail or is rendered incapacitated to perform his duties as a parent at a time the
adoptee is still in his formative years, and in the absence or, as in this case, death of the adopter, no
one else could reasonably be expected to perform the role of a parent other than the adoptee’s
biological one. (Bartolome vs. Social Security System, G.R. No. 192531 November 12, 2014)

47. Who are obliged to give support?

The following are obliged to support each other:

(1) The spouses;
(2) Legitimate ascendants and descendants;
(3) Parents and their legitimate children and the legitimate and illegitimate children of the latter;
(4) Parents and their illegitimate children and the legitimate and illegitimate children of the
latter;
(5) Legitimate brothers and sisters, whether of full or half-blood; and
(6) Brothers and sisters not legitimately related, whether of the full or half-blood, except only
when the need for support of the brother or sister, being of age, is due to a cause imputable
to the claimant's fault or negligence. (Arts. 195 and 196, Family Code)

48. Norma (Filipino) and Johan (Dutch) contracted marriage in Holland, Netherlands.
They had a son. Unfortunately, after five (5) years, their marriage bond ended by virtue
of a Divorce Decree issued by the appropriate Court of Holland. Thereafter, Norma and
her son came home to the Philippines. According to Norma, since their arrival in the
Philippines, Johan never gave support to their son. Not long thereafter, Johan came to
the Philippines and remarried in Cebu, and since then, have been residing thereat. Norma
sent a letter demanding for support from Johan. Johan refused to receive the letter.
Norma contends that Johan has an obligation to support their child under Art. 195 of the
Family Code, which “equally applies to all persons in the Philippines who are obliged to
support their minor children regardless of the obligor’s nationality.” In response, Johan
merely alleged that his national law states that parents have no obligation to support
their children.

(a) Is Norma’s contention correct?

No. Norma cannot rely on Art. 195 of the Family Code in demanding support from Johan, who is
a foreign citizen, since Art. 15 of the Civil Code stresses the principle of nationality. Insofar as
Philippine laws are concerned, specifically the provisions of the Family Code on support, the same
only applies to Filipino citizens. By analogy, the same principle applies to foreigners such that
they are governed by their national law with respect to family rights and duties. The obligation to
give support to a child is a matter that falls under family rights and duties. Since Johan is a
citizen of Holland or the Netherlands, he is subject to the laws of his country, not to Philippine
 law, as to whether he is obliged to give support to his child, as well as the consequences of his
failure to do so.

(b) May Johan be obliged to support their son?

Yes. First, under the doctrine of processual presumption, if the foreign law involved is not
properly pleaded and proved, our courts will presume that the foreign law is the same as our
local or domestic or internal law. Here, Johan hastily concludes that being a national of the
Netherlands, he is governed by such laws on the matter of provision of and capacity to support.
Thus, since the law of the Netherlands as regards the obligation to support has not been properly
pleaded and proved, it is presumed to be the same with Philippine law, which enforces the
obligation of parents to support their children and penalizing the noncompliance therewith.

Second, even assuming that the national law of Johan states that parents have no obligation to
support their children, said law would still not find applicability because when the foreign law,
judgment or contract is contrary to a sound and established public policy of the forum, the said
foreign law, judgment or order shall not be applied. Applying the foregoing, even if the laws of
the Netherlands does not enforce a parent’s obligation to support his child, such obligation is still
duly enforceable in the Philippines because it would be of great injustice to the child to be denied
of financial support when the latter is entitled thereto. (Del Socorro vs. Van Wilsem, G.R. No.
193707. December 10, 2014)

49. In default of parents or a judicially appointed guardian, who have the right to
exercise parental authority over a minor child?

The following person shall exercise substitute parental authority over the child in the order indicated:
(1) Surviving grandparent;
(2) Oldest brother or sister, over 21 years of age, unless unfit or disqualified; or
(3) Actual custodian over 21 years of age unless unfit or disqualified.

Whenever the appointment or a judicial guardian over the property of the child becomes necessary,
the same order of preference shall be observed. (Art. 216, Family Code)

50. Cheryl married Edward and had three children. They resided at the house of Edward’s
parents, Sps. Lim. Edward’s family business shouldered the family expenses, as Cheryl
had no steady source of income and Edward’s income is insufficient to fully support his
family. Later, Cheryl abandoned the residence, bringing the children with her (then all
minors), after she caught Edward having sex with the Sps. Lim’s housemaid. Cheryl, for
herself and her children, then sued Sps. Lim and Edward for support. The trial court
rendered judgment ordering Edward and Sps. Lim to jointly provide support to Cheryl
and the children. Sps. Lim theorize that they will be liable for support only upon default
of parental authority, conceivably either by its termination or suspension during the
children’s minority. Because at the time Cheryl sued for support, the latter and her
husband exercised parental authority over their children, Sps. Lim submit that the
obligation to support the latter’s offspring ends with them.

(a) Is the contention of Sps. Lim correct?

No. While parental authority pertains to parents, passing to ascendants only upon its termination
or suspension, the obligation to provide legal support passes on to ascendants not only upon
default of the parents but also for the latter’s inability to provide sufficient support. Here, there is
no question that Cheryl is unable to discharge her obligation to provide sufficient legal support to
her children. It is also undisputed that the amount of support Edward is able to give to his own
 family is insufficient to meet their basic needs. This inability of Edward and Cheryl to sufficiently
provide for their children shifts a portion of their obligation to the ascendants in the nearest
degree, both in the paternal (Sps. Lim) and maternal lines, following the ordering in Art. 199 of
the Civil Code. To hold otherwise, is to sanction the anomalous scenario of tolerating extreme
material deprivation of children because of parental inability to give adequate support even if
ascendants one degree removed are more than able to fill the void.

However, Sps. Lim’s partial concurrent obligation extends only to their descendants as this word
is commonly understood to refer to relatives, by blood of lower degree. As Sps. Lim’s
grandchildren by blood, only the children of Cheryl and Edward belong to this category. Indeed,
Cheryl’s right to receive support from the Lim family extends only to her husband Edward, arising
from their marital bond.

(b) Assuming that Sps. Lim are liable for support, can they fulfill their obligation by
maintaining Cheryl and the children at their residence?

No. Art. 204 of the Civil Code provides that the person obliged to give support shall have the
option to fulfill the obligation either by paying the allowance fixed, or by receiving and
maintaining in the family dwelling the person who has a right to receive support. The latter
alternative cannot be availed of in case there is a moral or legal obstacle thereto. Here, the
persons entitled to receive support are Sps. Lim’s grandchildren and daughter-in-law. Granting
Sps. Lim’s the option in Art. 204 will secure to the grandchildren a well-provided future; however,
it will also force Cheryl to return to the house which, for her, is the scene of her husband’s
infidelity. While not rising to the level of a legal obstacle, as indeed, Cheryl’s charge against
Edward for concubinage did not prosper for insufficient evidence, her steadfast insistence on its
occurrence amounts to a moral impediment bringing the case within the ambit of the exception
clause of Art. 204, precluding its application. (Lim vs. Lim, G.R. No. 163209, October 30, 2009)

51. May a birth certificate be registered by the biological father of an illegitimate child
without the knowledge and consent of the child’s biological mother?

No. Par. 5, Sec. 5 of Act No. 3753 (Civil Registry Law) states that in case of an illegitimate child, the
birth certificate shall be signed and sworn to jointly by the parents of the infant or only the mother if
the father refuses. Thus, it is mandatory that the mother of an illegitimate child signs the birth
certificate of her child in all cases, irrespective of whether the father recognizes the child as his or
not. The only legally known parent of an illegitimate child, by the fact of illegitimacy, is the mother of
the child who conclusively carries the blood of the mother. The mother must sign and agree to the
information entered in the birth certificate because she has the parental authority and custody of the
illegitimate child. If it appears on the face of the birth certificate that the mother did not sign the
documents, the local civil registrar had no authority to register the same. Such birth certificate is void
that would warrant their cancellation for being registered against the mandatory provisions of the
Family Code requiring the use of the mother's surname for her illegitimate children and Act No. 3753
requiring the signature of the mother in her children's birth certificates. (In the Matter of Petition for
Cancellation of Certificates of Live Birth of Barcelote Tinitigan vs. Republic, G.R. No. 222095, August
7, 2017)

52. In relation to the preceding question, assuming that the biological father was able to
register the said birth certificate without the knowledge and consent of the mother, can
this birth certificate be used as a basis to allow the child to use his father’s surname?

No. The birth certificate cannot be considered as express recognition of the children's filiation by the
father because they were not duly registered in accordance with the law. (In the Matter of Petition
for Cancellation of Certificates of Live Birth of Barcelote Tinitigan vs. Republic, supra.)
53. What are the requisites in availing the provisions of R.A. No. 11222 (Simulated Birth
Rectification Act) on Administrative Adoption? [Note: RA 11222 is beyond the coverage of the
2019 Bar Exams]

(1) The petitioner/s simulated the birth of a child;

(2) The simulation must be made prior to the effectivity of the Act (March 30, 2019);
(3) The child has been consistently considered and treated by such the petitioner/s as
her/his/their own child;
(4) The child has been living with the person for at least three (3) years before the effectivity of
the Act’;
(5) The petition shall be filed within ten (10) years from the effectivity of the Act;
(6) The petitioner/s must be Filipino citizens, of legal age, possess full civil capacity and legal
rights, of good moral character, have not been convicted of any crime involving moral
turpitude, emotionally and psychologically capable of caring for children; and in a position to
support and care for the child in keeping with the means of the family. In case of adoption
by a married couple, where one of the adopters is a foreign national married to a Filipino, the
foreign national must have been residing in the Philippines for at least three (3) continuous
years prior to the filing of the petition.
(7) The written consent of the following shall be required: the adoptee, if ten (10) years of age
or over; the legitimate and adopted daughters and sons, ten (10) years of age or over, of the
adopter and adoptee, if any; the illegitimate daughters and sons, ten (10) years of age or
over, of the adopter if living with said adopter and the latter’s spouse, if any; and the spouse,
if any, of the adoptee. (Secs. 4, 5, 7, & 8, RA 11222)

PROPERTY

54. Is a land declared alienable and disposable still considered land of public domain?

Yes. It only becomes patrimonial upon express declaration of the State that it is no longer needed for
public use, public service, or the development of the national wealth. (Republic vs. City of
Paranaque, G.R. No. 191109, July 18, 2012)

55. Lots “A” and “B” were registered in the name of the Province of Bataan. The Bataan
Colleges (BC) and the Bataan School of Arts and Trades (BSAT), both State-run schools,
occupied both lots. The Congress passed a law, converting the BSAT into Bataan
Polytechnic State College (BPSC). The law provides that “all parcels of land belonging to
the government occupied by BSAT and BC are declared to be the property of the BPSC
and shall be titled under that name.” Based on this provision, Congressman Garcia wrote
to the Governor of Bataan, requesting to cause the transfer of the title of the aforesaid
lots to BPSC. The Governor refused contending that the subject lots were patrimonial
properties of the Province of Bataan, and as such, the National Government cannot take
them without due process of law and without just compensation. Is the Governor’s
contention correct?

No, because the lands are not patrimonial. Properties of local governments are either (a) properties
for public use, or (b) patrimonial properties. The capacity in which the property is held by a local
government is dependent on the use to which it is intended and for which it is devoted. If the
property is owned by the municipal corporation in its public and governmental capacity, it is public
and Congress has absolute control over it; but if the property is owned in its private or proprietary
capacity, then it is patrimonial and Congress has no absolute control, in which case, the municipality
cannot be deprived of it without due process and payment of just compensation.
 Here, the subject lots were not patrimonial properties of the Province of Bataan. In the absence of
proof that the Province of Bataan acquired them with its own private or corporate funds, the lots
must be presumed to belong to the State. Hence, the lands are public and Congress has absolute
control over it. (Sanggunian Panlalawigan of Bataan vs. Cong. Garcia, G.R. No. 174964, October 5,
2016)

56. Atty. Cruz, identifying himself as the Dean of Arellano Law, placed an order with
EDCA Publishing for 406 books, payable on delivery. EDCA prepared the corresponding
invoice and delivered the books as ordered, for which Atty. Cruz issued a personal check.
Atty. Cruz sold 120 of the books to Santos who, after verifying the seller's ownership
from the invoice he showed her, paid Atty. Cruz. Later, EDCA made inquiries with
Arellano Law and was informed that there was no such person in its employ. EDCA also
found out that Atty. Cruz had no more account or deposit with the bank, against which
he had drawn the payment check. With the assistance of the NBI, EDCA traced the books
and found them in the store of Santos. Can EDCA recover the books from Santos because
it was unlawfully deprived of them in accordance with Art. 559?

No. EDCA has not been unlawfully deprived of the subject books within the scope of Art. 559. It has
voluntarily parted with them pursuant to a contract of purchase and sale. The circumstance that the
price was not subsequently paid did not render illegal a transaction which was valid and legal at the
beginning. Here, actual delivery of the books having been made, Cruz acquired ownership over the
books which he could then validly transfer to Santos. The fact that he had not yet paid for them to
EDCA was a matter between him and EDCA and did not impair the title acquired by Santos to the
books. (EDCA Publishing & Distributing Corp. vs. Sps. Santos, G.R. No. 80298, April 26, 1990)

57. Jose purchased a parcel of land through a notarized Deed of Absolute Sale. He placed
the land in his brother’s (Manuel) care, in exchange for which, the latter and his son,
Marlon, will deliver the produce of said land. Unfortunately, Manuel and Marlon
continuously refused to deliver the produce of the land or vacate the same despite his
repeated demands. Hence, Jose filed an action for recovery of possession of the land.
Manuel and Marlon contend that Jose failed to establish legal and equitable title over the
land, observing that the notarized deed executed in Jose’s favor did not transfer the
land’s ownership to him given that he was never placed in possession and control
thereof. Is the contention correct?

No. Art. 1477 of the Civil Code recognizes that the ownership of the thing sold shall be transferred to
the vendee upon the actual or constructive delivery thereof. Art. 1498 lays down the general rule that
the execution of a public instrument shall be equivalent to the delivery of the thing which is the
object of the contract, if from the deed the contrary does not appear or cannot clearly be inferred.
However, the execution of a public instrument gives rise only to a prima facie presumption of
delivery, which is negated by the failure of the vendee to take actual possession of the land sold. A
person who does not have actual possession of the thing sold cannot transfer constructive possession
by the execution and delivery of a public instrument.

Here, the prima facie presumption of constructive delivery to Jose was not successfully negated by
proof that the land was not actually placed in the latter’s control and possession. Jose exercised
possession of the subject land through Manuel and eventually, his son, Marlon whom he allowed to
stay and care for the land in exchange for the delivery of the produce thereof. (Heirs of Jose
Extremadura vs. Extremadura, G.R. No. 211065, June 15, 2016, J. Perlas-Bernabe)

58. In industrial succession, what are the rights, liabilities and remedies available to a
landowner, builder, planter, sower, and owner of the materials?
 Landowner (LO); Builder, Planter, Sower (B, P, S); Owner of the Materials (OM)
BUILDING, PLANTING, OR SOWING
ON ONE’S OWN LAND WITH MATERIALS BELONGING TO ANOTHER
If both the LO and the If both the LO and the If LO acted in bad If LO acted in good
OM acted in good OM acted in bad faith faith and OM acted in faith and OM acted in
faith good faith bad faith
(1) LO may appropriate The bad faith of one (1) LO is liable for OM loses his materials
what he has built, neutralizes the bad faith damages. without any right
planted or sown, but of the other. Hence, they (2) OM may: whatsoever and is liable
must pay the value must be treated as if a. Demand the to the LO for damages.
of the materials; OR both of them acted in value of his (Arts. 447, 449, and 455,
(2) LO may return the good faith. materials plus Civil Code)
materials to the OM, damages; OR
if it can be made b. Demand the
without damage to return of the
the materials. materials, even
if injury is
caused to the
land, plus
damages.

BUILDING, PLANTING, OR SOWING

WITH ONE’S OWN MATERIALS ON THE LAND BELONGING TO ANOTHER
If both the LO and the If both the LO and the If the LO acted in If the LO acted in bad
BPS-OM acted in good BPS-OM acted in bad good faith and the faith and the BPS-OM
faith faith BPS-OM acted in bad acted in good faith
faith
(1) LO may appropriate The bad faith of one (1) LO may appropriate (1) BPS-OM may:
as his own the neutralizes the bad faith as his own the a. Demand the
works, sowing, or of the other. Hence, they works, sowing, or value of his
planting, but must must be treated as if planting, without materials plus
pay the BPS-OM the both of them acted in need of paying damages; OR
necessary and useful good faith. indemnity, plus b. Demand the
expenses, and in damages; OR return of the
proper cases, (2) LO may demand the materials, even
expenses for pure demolition of if injury is
luxury; OR whatever has been caused to the
(2) LO may oblige the built, planted, or land, plus
BP to pay the price sown even if injury is damages. (Arts.
of the land, if the caused to the land, 448-454, Civil
value of the land is plus damages; OR Code)
not considerably (3) LO may compel the
more than that of BP to pay the price
the building or trees; of the land, even if
and the S, the the land is
proper rent. considerably more
than that of the
(3) LO is entitled to building or trees,
remove the works, plus damages.
sowing, or planting
when, after having (4) BPS-OM is entitled to
chosen to sell his reimbursement of
land, the BPS-OM necessary expenses
fails to pay for the for the preservation
same; of the land.

(4) Pending
 reimbursement, the
BPS-OM has the
right of retention.

BUILDING, PLANTING, OR SOWING

ON THE LAND OF ANOTHER WITH MATERIALS BELONGING TO A THIRD PERSON
OM acted in good faith OM acted in bad faith
(1) OM must be paid the value of the materials; (1) OM loses his materials without any right
(2) BPS is primarily liable to make such payment to whatsoever and is liable for damages;
the OM (with damages if BPS acted in bad faith); (2) LO can claim what has been built, planted, or
(3) If BPS pays, he becomes the OM and the case sown on his land without any obligation to
would be the same as that of building, planting, indemnify the OM;
or sowing with one’s own materials on the land (3) BPS who acted in good faith may claim from the
of another (refer to the table above); LO a reasonable compensation for his labor;
(4) LO is subsidiarily for the payment of the value of (4) BPS who acted in bad faith is not entitled to
the materials. It will attach only when: the BPS is anything, he is instead liable for damages. (Arts.
insolvent; and the LO chooses to appropriate the 447-454, Civil Code)
building, planting, or sowing. However, if the LO
pays for the value of the materials, he becomes
the OM, who may: demand damages from the
BPS; or pay the BPS a reasonable compensation
if the latter acted in good faith.

59. When is a donation one of mortis causa and when is it inter vivos?

If the donation is made in contemplation of the donor's death, meaning that the full or naked
ownership of the donated properties will pass to the donee only because of the donor's death, then it
is at that time that the donation takes effect, and it is a donation mortis causa  which should be
embodied in a last will and testament.

But if the donation takes effect during the donor's lifetime or independently of the donor's death,
meaning that the full or naked ownership of the donated properties passes to the donee during the
donor's lifetime, not by reason of his death but because of the deed of donation, then the donation
is inter vivos. (Alejandro vs. Geraldez, G.R. No. L-33849 August 18, 1977)

60. What are the requisites of accretion as a mode of acquiring property?

Accretion as a mode of acquiring property under Article 457 of the Civil Code requires the
concurrence of the following requisites:
(1) The deposition of soil or sediment be gradual and imperceptible;
(2) It be resulted of the action of the waters of the river; and
(3) The land where accretion takes place is adjacent to the banks of rivers.

Thus, it is not enough to be a riparian owner in order to enjoy the benefits of accretion. One who
claims the right of accretion must show by preponderant evidence that he has met all the conditions
provided by law. (New Regent Sources, Inc. vs. Tanjuatco Jr., G.R. No. 168800, April 16, 2009)

61. Rody is the riparian owner of a parcel of land adjacent to the Pasig River. Unknown to
Rody who migrated as an OFW to New Zealand, an accretion developed in 1980 by force
of nature, which Dany immediately took actual possession and control as owner, but only
registered it in his name in 1991. Later, a second accretion developed in 1992 adjacent
to the first accretion registered in Dany’s name, which Dany immediately took actual
possession and control by building a rest house, but neglected to register it in his name.
Thus, his driver, Pepe, registered the second accretion in his name in 1995. Upon Rody’s
 return to Manila in 2015, he discovered what transpired while he was overseas and a
legal battle ensued.

(a) Rody filed an action for Reconveyance and Cancellation of Title against Dany and
Pepe on the ground that he is the riparian owner. In his defense, Dany claimed that
the action for reconveyance has prescribed. Will Rody’s action prosper?

No. The action for reconveyance has prescribed by virtue of Dany’s registration of the Title in
1991. Alluvial property automatically belongs to the owner of the estate to which it may have
been added, but the owner of the adjoining property must register the same under the Torrens
System; otherwise, the alluvial property may be subject to acquisition by prescription by third
persons. (Heirs of Narvasa vs. Imbornal, G.R. No. 182908, August 8, 2014)

(b) Dany also filed a similar action against Pepe, on the ground that he is the riparian
owner of the First Accretion. In his defense, Pepe claimed that Dany’s action has
prescribed as 20 years have lapsed since he registered the Second Accretion in his
name. Decide.

The case filed by Dany against Pepe will prosper because Dany was able to take actual
possession and control of the Second Accretion. There is no prescription when, in an action for
reconveyance, the claimant is in actual possession of the property because this, in effect, is an
action for quieting of title. And, an action for quieting of title is imprescriptible. (PNB vs.
Jumamoy, G.R. No. 169901, August 3, 2011)

(c) Suppose Rody returned in 2000 and initiated a case in the same year. With Dany
raising the defense that the action has prescribed as he has been in actual possession
and control in the concept of an owner over the First Accretion since 1980, how
would you then decide?

If Rody had returned in 2000, I will decide in his favor. An action for reconveyance of a parcel of
land based on implied constructive trust prescribes in 10 years, the point of reference being the
date of the deed or the date of the issuance of the certificate of title of the property.
(Villanueva-Mijares vs. Court of Appeals, G.R. No. 108921, April 12, 2000)

62. In usufruct, who bears the expenses for ordinary and extraordinary repairs?

Ordinary repairs. The usufructuary is obliged to make the ordinary repairs needed by the thing given
in usufruct. Should the usufructuary fail to make them after demand by the owner, the latter may
make them at the expense of the usufructuary. By ordinary repairs are understood such as are
required by the wear and tear due to the natural use of the thing and are indispensable for its
preservation.

Extraordinary repairs. Extraordinary repairs shall be at the expense of the owner. The usufructuary is
obliged to notify the owner when the need for such repairs is urgent. If the owner should make the
extraordinary repairs, he shall have a right to demand of the usufructuary the legal interest on the
amount expended for the time that the usufruct lasts. Should he not make them when they are
indispensable for the preservation of the thing, the usufructuary may make them; but he shall have a
right to demand of the owner, at the termination of the usufruct, the increase in value which the
immovable may have acquired by reason of the repairs. (Arts. 592-595, Civil Code)

63. What are the requisites of a legal or compulsory right of way?

 Legal easement of right of way is an easement which has been imposed by law and not by the
parties and it has “for its object either public use or the interest of private persons.” To be entitled to
a legal easement of right of way, the following requisites must concur:
(1) The dominant estate is surrounded by other immovable and has no adequate outlet to a
public highway;
(2) Payment of proper indemnity;
(3) The isolation was not due to acts of the proprietor of the dominant estate; and
(4) The right of way claimed is at the point least prejudicial to the servient estate, and insofar as
consistent with this rule, where the distance of the dominant estate to a public highway may
be the shortest. (Woodridge School, Inc. vs. ARB Construction Co., Inc., G.R. No. 157 285,
February 16, 2007)

64. May a Punong Barangay determine the propriety of a summary abatement of a public
nuisance?

No. Under Article 700 of the Civil Code, the abatement, including one without judicial proceedings, of
a public nuisance is the responsibility of the district health officer. Under Article 702 of the Code, the
district health officer is also the official who shall determine whether or not abatement, without
judicial proceedings, is the best remedy against a public nuisance. The two articles do not mention
that the chief executive of the local government, like the Punong Barangay, is authorized as the
official who can determine the propriety of a summary abatement. (Cruz vs. Pandacan Hiker’s Club,
G.R. No. 188213, Jan. 11, 2016)

65. Does the issuance of the certificate of title constitute an “open and clear repudiation”
of trust?

Yes. In such a case, an action to demand partition among co-owners prescribes in 10 years, the
point of reference being the date of the issuance of certificate of title over the property. But this rule
applies only when the plaintiff is not in possession of the property, since if a person claiming to be
the owner thereof is in actual possession of the property, the right to demand partition does not
prescribe. (Heirs of Yambao vs. Heirs of Yambao G.R. No. 194260 April 13, 2016)

SUCCESSION

66. Arturito, a citizen of Argentina and domiciled in the Philippines, died testate. He gave
his property located in Australia to his illegitimate son, Bogart. During probate, his
legitimate son, Coco, also a citizen of Argentina opposed the probate, contending that
the law of Argentina prohibits an illegitimate child to succeed. Decide.

Bogart will not succeed because the national law of the decedent prohibits an illegitimate child from
succeeding. Intestate and testamentary successions, both with respect to the order of succession,
the amount of successional rights, and instrinsic validity of testamentary provisions, shall be
regulated by the national law of the decedent, regardless of whatever the nature of the property and
wherever the property may be found. (Art. 16(2), Civil Code)

67. Pao obtained a loan from Fred secured by a chattel mortgage on Pao’s Isuzu Jeep in
favor of Fred. Upon Fred’s death, his heirs sought to collect from Pao the amount on the
loan, but to no avail. Fred’s heirs authorized Cassie to act as their attorney-in-fact
through a Special Power of Attorney. Pao questioned the authority of Cassie to represent
her co-heirs because Fred’s estate had a personality of its own. May Fred’s heirs, through
Cassie, and on behalf of the estate of the deceased, sue Pao for collection of the proceeds
of the loan?
 Yes. Unpaid loans are considered assets of the estate of the creditor-decedent. While it is true that
Fred’s estate has a different juridical personality than that of the heirs, the latter certainly have an
interest in the preservation of the estate and the recovery of its properties for at the moment of
Fred’s death, the heirs start to own the property, subject to the decedent’s liabilities. This is
consistent with Art. 777 of the Civil Code which provides that “the rights to the succession are
transmitted from the moment of the death of the decedent.” Nonetheless, the proceeds of the loan
should be released to Fred’s heirs only upon settlement of her estate because to allow the release of
the funds directly to the heirs would amount to distribution of the estate, which distribution and
delivery should be made only after, not before, the payment of all debts, charges, expenses, and
taxes of the estate have been paid. (Pasco vs. De Guzman, G.R. No. 165554, July 26, 2010)

68. What are the requisites of a valid notarial will?

For a notarial will to be valid, the following must concur:

(1) It must be in writing;
(2) It must be subscribed at the end thereof by the testator himself or by the testator’s name
written by some other person in his presence, and by his express direction;
(3) It must be attested and subscribed by three or more credible witnesses in the presence of
the testator and of one another;
(4) It must be signed by the testator or the person requested by him to write his name and the
instrumental witnesses of the will in each and every page thereof, except the last, on the left
margin;
(5) The Attestation shall state the number of pages used upon which the will is written, and the
fact that the testator signed the will and every page thereof, or caused some other person to
write his name, under his express direction, in the presence of the instrumental witnesses,
and that the latter witnessed and signed the will and all the pages thereof in the presence of
the testator and one another;
(6) All the pages shall be numbered correlatively in letters placed on the upper part of each
page; and
(7) It must be executed in the language known to the testator. (Art. 805, Civil Code)

69. During the proceedings for the probate of the will of Andy, it was established that
while he and two (2) of the instrumental witnesses, Baby and Carlos, were signing the
will and all of the pages thereof in the sala of Andy’s house, the third witness, Donald,
was resting in the adjoining room which was separated from the sala by a curtain. The
oppositors contend that since Andy, Baby and Carlos did not sign the will and all of the
pages thereof in the presence of Donald, the will cannot be admitted for probate. Decide.

Andy’s will cannot be admitted to probate. The true test of presence of the testator and the
witnesses in the execution of the will is not whether they actually saw each other sign, but whether
they might have seen each other sign, had they chosen to do so, considering their mental and
physical condition and position with relation to each other at the moment of inscription of each
signature. Here, it is clear that the curtain separating the adjoining room from the sala impeded the
line of vision of Donald; consequently, it would not have been possible for Donald to see the actual
signing of the will by the others had he chosen to do so. Hence, Andy, Baby and Carlos did not sign
the will and all of the pages thereof in the presence of Donald. There is, therefore, non-compliance
with a mandatory requirement of the law. (Neyra vs Neyra, C.A. No. 8075, March 25, 1946; Jurado,
Civil Law Reviewer, 2009)

70. Enrique died leaving a will. In the will, while the acknowledgment portion stated that
it consists of seven (7) pages including the page on which the ratification and
 acknowledgment are written, the will actually has eight (8) pages including the
acknowledgment portion. May the probate of the will be allowed?

No. The statement in the acknowledgment portion of the will that it “consists of seven (7) pages
including the page on which the ratification and acknowledgment are written” cannot be deemed
substantial compliance. The will actually consists of eight (8) pages including its acknowledgment
which discrepancy cannot be explained by mere examination of the will itself but through the
presentation of evidence aliunde. The rule must be limited to disregarding those defects that can be
supplied by an examination of the will itself: whether all the pages are consecutively numbered;
whether the signatures appear in each and every page; whether the subscribing witnesses are three
or the will was notarized. All these are facts that the will itself can reveal, and defects or even
omissions concerning them in the attestation clause can be safely disregarded. But the total number
of pages, and whether all persons required to sign did so in the presence of each other must
substantially appear in the attestation clause, being the only check against perjury in the probate
proceedings. (In the Matter of the Petition for the Probate of the Last Will and Testament of Enrique
Lopez, Richard Lopez, vs. Lopez, G.R. No. 189984, November 12, 2012, J. Perlas-Bernabe)

71. May a blind person make a notarial will?

Yes, provided that he is of legal age and of sound and disposing mind, the will shall be read to him
twice; once, by one of the subscribing witnesses, and again, by the notary public before whom the
will is acknowledged. (Arts. 797, 798, 808, Civil Code)

72. What are the additional, special requirements of a valid will if the testator is deaf or
mute?

(1) If the testator is able to read, he must personally read the will, or
(2) If unable to read, he must designate two persons to read it and communicate to him, in some
particular manner, the contents thereof. (Art. 807, Civil Code)

73. Are joint wills executed in a country where joint wills are allowed enforceable in the
Philippines?

Joint wills executed by Filipinos in a foreign country shall not be valid in the Philippines, even though
authorized by the laws of the country where they may have been executed. However, by virtue of
the nationality principle, this prohibition does not cover joint wills executed by foreigners. (Art. 819,
Civil Code)

74. What is a holographic will? What are its requirements for probate?

It is a written will which must be entirely written, dated and signed by the hand of the testator
himself, without the necessity of any witness. (Art. 810, Civil Code) In case of probate, at least one
witness who knows the handwriting and signature of the testator must explicitly declare that the will
and the signature are the handwriting of the testator. If the will is contested, at least 3 of such
witnesses shall be required. (Art. 811, Civil Code)

75. What is a fideicommissary substitution?

By a fideicommissary substitution, 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. It shall be valid and
shall take effect, provided such substitution does not go beyond one degree from the heir originally
instituted, and provided further, that the fiduciary or first heir and the second heir are living at the
time of the death of the testator.
 Broken down into requisites, fideicommissary substitution requires the concurrence of the following:
(1) A first heir (fiduciary) primarily called to the enjoyment of the estate;
(2) An obligation clearly imposed upon the heir to preserve and transmit to a third person the
whole or a part of the estate;
(3) A second heir (fideicommissary) to whom the property is transmitted;
(4) The substitution must not go beyond one degree from the heir originally instituted;
(5) The first heir and the second heir are living at the time of the death of the testator;
(6) The substitution is imposed on the free portion, and not on the legitime;
(7) The substitution must be expressly made.

76. What is the effect of the nullity of the fideicommissary substitution?

The nullity of the fideicommissary substitution does not prejudice the validity of the institution of the
heirs first designated; the fideicommissary clause shall simply be considered as not written. The
second heir shall acquire a right to the succession from the time of the testator's death, even though
he should die before the fiduciary. The right of the second heir shall pass to his heirs. However, the
following shall not take effect:
(1) Fideicommissary substitutions which are not made in an express manner, either by giving
them this name, or imposing upon the fiduciary the absolute obligation to deliver the
property to a second heir;
(2) Provisions which contain a perpetual prohibition to alienate, and even a temporary one,
beyond the limit fixed in Art. 863;
(3) Those which impose upon the heir the charge of paying to various persons successively,
beyond the limit prescribed in Art. 863, a certain income or pension;
(4) Those which leave to a person the whole or part of the hereditary property in order that he
may apply or invest the same according to secret instructions communicated to him by the
testator. (Art. 863-868, Civil Code; De Perez vs. Garchitorena G.R. No. L-31703, February 13,
1930; Rabuya, supra.)

77. What is preterition? When does it apply?

Preterition consists in the omission of a compulsory heir in the direct line from the will, either
because he is not named or, although he is named, he is neither instituted as an heir nor assigned
any part of the estate without expressly being disinherited – tacitly depriving the heir of his legitime.
Preterition requires that the omission is total, meaning the heir did not also receive any legacies,
devises, or advances on his legitime. (Morales vs. Olondriz, G.R. No. 198994, February 3, 2016)

Preterition annuls the institution of heir, but the devises and legacies shall be valid insofar as they are
not inofficious, i.e., impairs or diminishes the legitime of the compulsory heirs. It applies when:
(1) There is omission of one, some, or all of the compulsory heirs in the direct line, whether
living at the time of the execution of the will or born after the death of the testator;
(2) The omission must be total; and
(3) The omitted compulsory heirs should survive the testator. (Art. 854 and 907, Civil Code;
Morales vs. Olondriz, supra.; Rabuya, supra.)

78. What is reserva troncal? What are the rules for its application?

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 the relatives of the inheriting ascendant. The principle of reserva troncal
is provided in Art. 891 of the Civil Code. Pursuant to the said provision, in order that a property may
be impressed with a reservable character the following requisites must exist, to wit:
 (1) That the property was acquired by a descendant from an ascendant or from a brother or
sister by gratuitous title;
(2) That said descendant died without an issue;
(3) That the property is inherited by another ascendant by operation of law; and
(4) That there are relatives within the third degree belonging to the line from which said
property came.

The persons involved in reserva troncal are:

(1) Origin. The ascendant or brother or sister from whom the property was received by the
descendant by lucrative or gratuitous title;
(2) Prepositus. The descendant or prepositus who received the property;
(3) Reservista. The reservor, the other ascendant who obtained the property from the prepositus
by operation of law; and
(4) Reservatario. The reservee who is within the third degree from the prepositus and who
belongs to the linea o tronco from which the property came and for whom the property
should be reserved by the r eservor.

There are three (3) lines of transmission in reserva troncal:

(1) First transmission is by gratuitous title, whether by inheritance or donation, from an
ascendant/brother/sister to a descendant called the prepositus;
(2) Second transmission is by operation of law from the prepositus to the other ascendant or
reservor, also called the reservista.
(3) Third and last transmission is from the reservista to the reservees or reservatarios who must
be relatives within the third degree from which the property came. (Mendoza vs. Delos
Santos, G.R. No. 176422, March 20, 2013; Chua vs. CFI, G.R. No. L-29901 August 31, 1977)

79. What is the Iron Curtain Rule?

As provided under Art. 992 of the Civil Code, an illegitimate child has no right to inherit ab intestato
from the legitimate children and relatives of his father or mother; nor shall such children or relatives
inherit in the same manner from the illegitimate child. This is otherwise known as the “Iron Curtain
Rule.” The right of representation is not available to illegitimate descendants of legitimate children in
the inheritance of a legitimate grandparent. (Arado vs. Alcoran, G.R. No. 163362, July 8, 2015)

80. When does the right of representation take place?

Right of representation takes place:

(1) In testamentary succession, in case some, but not all, of the compulsory heir in the direct
descending line (a) dies before the testator; (b) becomes incapacitated to succeed from the
testator; or (c) is disinherited, and he is survived by his children or descendants. But not when
the compulsory heir repudiates his share. (Art. 856, 923, and 1035, Civil Code)
(2) In intestate succession, in case some, but not all, of the legal heir in the direct descending line
(a) dies before; or (b) becomes incapacitated to succeed from, the decedent, and he is survived
by his children or descendant, or in the absence of other heirs which can exclude them from the
succession, a brother or sister dies before the decedent survived by his or her own children.
(Arts. 972, 975, 981, 982, and 1035; Civil Code; Jurado, supra.)

81. Spouses Diaz, as represented by their daughter Reina, obtained from Pedro a loan
secured by a real estate mortgage over a parcel of land covered by TCT No. RT-66049.
Reina also issued to Pedro postdated checks to secure payment of said loan. Reina, for a
valuable consideration of the amount of the secured loan, executed in favor of Pedro a
“Waiver of Hereditary Rights and Interests Over a Real Property (Still Undivided)”
waiving all her hereditary rights and interests as an heir of the spouses in favor of Pedro,
 his heirs and assigns over the said parcel of land. On the basis of said Waiver, Pedro
executed an Affidavit of Adverse Claim which he caused to be annotated at the back of
the TCT. Later, Spouses Diaz reneged on their obligation as the checks issued by Reina
were dishonored upon presentment. Despite repeated demands, spouses Diaz still failed
and refused to settle the loan. Thus, Pedro filed a Complaint for Collection of Sum of
Money against the spouses and Reina.

(a) Is Reina’s waiver of hereditary rights valid?

No. Pursuant to the second paragraph of Art. 1347 of the Civil Code, no contract may be entered
into upon a future inheritance except in cases expressly authorized by law. For the inheritance to
be considered “future,” the succession must not have been opened at the time of the contract. A
contract may be classified as a contract upon future inheritance, prohibited under the second
paragraph of Art. 1347, where the following requisites concur:
(1) That the succession has not yet been opened.
(2) That the object of the contract forms part of the inheritance; and
(3) That the promissor has, with respect to the object, an expectancy of a right which is
purely hereditary in nature.

Here, it appears that at the time of execution of Reina’s Waiver, succession to either of her
parent’s properties has not yet been opened since both of them are still living as they even
answered the complaint against them. With respect to the other two requisites, both are likewise
present considering that the property subject matter of Reina’s waiver concededly forms part of
the properties that she expect to inherit from her parents upon their death and, such expectancy
of a right, as shown by the facts, is undoubtedly purely hereditary in nature. From the foregoing,
it is clear that Reina and Pedro entered into a contract involving the former’s future inheritance
as embodied in the Waiver. Thus, the Waiver executed by Reina in favor of Pedro is invalid and
same cannot be the source of any right or create any obligation between them for being violative
of the second paragraph of Art. 1347 of the Civil Code.

(b) Is Pedro’s adverse claim based on such waiver likewise valid and effective?

No. It is provided in Sec. 70 of PD 1529 (Property Registration Decree), that it is necessary that
the claimant has a right or interest in the registered land adverse to the registered owner and
that it must arise subsequent to registration. Here, as no right or interest on the subject property
flows from Reina’s invalid waiver of hereditary rights upon Pedro, the latter is thus not entitled to
the registration of his adverse claim. Therefore, Pedro’s adverse claim is without any basis and
must consequently be adjudged invalid and ineffective and perforce be cancelled. (Ferrer vs. Sps.
Diaz, G.R. No. 165300, April 23, 2010)

82. What are the rules on the amount of legitime of compulsory heirs?

Surviving spouse (SS)

Legitimate child or descendant/s (LC)
Illegitimate child (ILC)
Legitimate parent/s or ascendant/s (LP)
Illegitimate parent/s (ILP)
Free portion (FP)

Three kinds of compulsory heirs:

(1) Primary: Those who have precedence over and exclude other compulsory heirs.
(2) Secondary: Those who succeed only in the absence of the primary heirs.
 (3) Concurring: Those who succeed together with the primary or secondary compulsory heirs.
(Arellano vs. Pascual, G.R. No. 189776, December 15, 2010)

Primary and Secondary Compulsory Heirs . If the person whose succession is under consideration is a
legitimate child, his legitimate children and descendants will exclude his legitimate parents and
ascendants. In other words, the legitimate parents and ascendant are compulsory heirs only in the
absence of legitimate children or descendants. The former are secondary compulsory heirs while the
latter are primary compulsory heirs. If the person whose succession is under consideration is an
illegitimate child, his illegitimate or their descendants will exclude the illegitimate parent. In other
words, the illegitimate parents are compulsory heirs only when the deceased does not have children,
whether legitimate or illegitimate, or descendants. (Art. 887, Civil Code)

Concurring Compulsory Heirs. The surviving spouse and illegitimate children are concurring heirs. In
relation, however, to the illegitimate parents, the illegitimate children of the decedent shall be
considered as primary compulsory heirs in the absence of legitimate children and descendants. (Art.
903, Civil Code)

When surviving alone

Compulsory heirs of the same kind,
without concurrence of other kinds
of compulsory heirs.
½
Except: 1/3 for SS when the marriage was solemnized in articulo mortis
and the deceased died within 3 months from the time of the marriage.
Exception: ½ for SS when the spouses have been living as husband and
wife for more than five years prior to the marriage. (Arts. 888-901 and
903, Civil Code)

When primary concurs with concurring compulsory heirs

One LC concurs with SS LC: ½
SS: ¼
FP: ¼
Several LC concur with SS LC: ½ in equal portions for each
SS: equal to the share of one LC
FP: ¼
One LC concurs with ILC LC: ½
ILC: ½ of the share of an LC

If the FP is not sufficient, the ILC shall divide the FP among themselves.
Several LC concur with ILC LC: ½ in equal portions for each
ILC: ½ of the share of an LC

If the FP is not sufficient, the ILC shall divide the FP among themselves.
One LC concur with SS and ILC LC: ½
SS: ¼
ILC: ½ of the share of an LC

Several LC concur with SS and ILC
If the FP is not sufficient to cover the legitime of the SS and ILC, the
share of the former shall have preference over the latter, whose may
suffer reduction pro rata.
LC: ½ in equal portions for each
SS: ¼
ILC: ½ of the share of an LC

If the FP is not sufficient to cover the legitime of the SS and ILC, the
share of the former shall have preference over the latter, whose may
suffer reduction pro rata. (Arts. 888, 892, and 895, Civil Code; Art. 176,
Family Code)
 When secondary concurs with concurring compulsory heirs
LP concur with SS LP: ½
SS: ¼
FP: ¼
LP concur with ILC LP: ½
ILC: ¼ in equal shares
LP concur with SS and ILC LP: ½
ILC: ¼ in equal shares
SS: 1/8
FP: 1/8
ILP concur with SS ILP: ¼
SS: ¼
FP: ½ (Arts. 889, 893, and 896, Civil Code)

Concurrence among concurring compulsory heirs

SS concurs with ILC SS: 1/3
ILC: 1/3 in equal shares
FP: 1/3
(Art. 894, Civil Code)

83. Discuss the rules in intestate succession.

Surviving spouse (SS)

Legitimate child or descendant/s (LC)
Illegitimate child (ILC)
Legitimate parent/s or ascendant/s (LP)
Legitimate ascendant/s (LA)
Brothers and sisters (BS)
Nephews and nieces (NN)

Intestate succession in the direct descending line

LC survive with ILC
LC survive with SS
LC survive with ILC and SS
LC: double that of the ILC
SS: same share as that of each LC
SS: same share as that of each LC
ILC: ½ of the share of an LC
(Art. 983, Civil Code; Art. 176, Family Code)

Intestate succession in the direct ascending line

LA survive with ILC LA: ½
ILC: ½
SS survives with LP SS: ½
LP: ½
LA survive with SS and ILC LA: ½
SS: ¼
ILC: ¼
(Arts. 983 and 999, Civil Code; Art. 176, Family Code)

Illegitimate children
SS survives with ILC SS: ½
ILC: ½
(Art. 998, Civil Code)

Collateral blood relatives

BS survive with SS BS: ½
SS: ½
 (Art. 1001, Civil Code)

Note: The presence of brothers, sisters, nephews or nieces shall result in the exclusion of the other
collateral relatives. As a consequence, the decedent’s uncles and aunts are excluded by the decedent’s
nephews and nieces, even if they are all within the same degree. (Art. 1009[1], Civil Code)

OBLIGATIONS AND CONTRACTS

84. On January 8, 2012, Sps. Lam and Kodak Philippines, Ltd. executed a Letter
Agreement for the sale of three (3) units of the Kodak Minilab System 22XL (Minilab) in
the amount of ₱1,796,000 per unit, with the following terms: “ (1) Said Minilab
Equipment packages will avail a total of 19% multiple order discount based on prevailing
equipment price provided said equipment packages will be purchased not later than June
30, 2012; (2) 19% Multiple Order Discount shall be applied in the form of merchandise
and delivered in advance immediately after signing of the contract; (3) No down
payment; (4) Minilab Equipment Package shall be payable in 48 monthly installments at
₱35,000 inclusive of 24% interest rate for the first 12 months; the balance shall be re-
amortized for the remaining 36 months and the prevailing interest shall be applied.” Is
the obligation divisible or indivisible?

It is indivisible. An obligation is indivisible when it cannot be validly performed in parts, whatever may
be the nature of the thing which is the object thereof. The indivisibility refers to the prestation and
not to the object thereof. Here, based on the Letter Agreement, the intention of the parties is for
there to be a single transaction covering all three (3) units of Minilab. Kodak’s obligation was to
deliver all products purchased under a “package,” and, in turn, Sps. Lam’s obligation was to pay for
the total purchase price, payable in installments. The intention of the parties to bind themselves to
an indivisible obligation can be further discerned through their direct acts in relation to the package
deal. There was only one agreement covering all three (3) units of Minilab and their accessories. If
the intention of the parties were to have a divisible contract, then separate agreements could have
been made for each unit instead of covering all three in one package deal. Furthermore, the 19%
multiple order discount as contained in the Letter Agreement was applied to all three acquired units.
The “no downpayment” term contained in the Letter Agreement was also applicable to all units.
Lastly, the Letter Agreement clearly referred to the object of the contract as “Minilab Equipment
Package.” (Sps. Lam vs. Kodak Philippines, Ltd., G.R. No. 167615, January 11, 2016)

85. Sps. Benjamin and Sonia Mamaril park their jeepneys at the BSP compound for a fee.
One of these jeepneys went missing and was never recovered. According to the security
guards of AIB Security Agency, with whom BSP had contracted for its security and
protection, a male person who looked familiar to them took the subject vehicle out of the
compound. Sps. Mamaril filed a Complaint for Damages against BSP. BSP denied any
liability contending that not only did Sps. Mamaril directly deal with AIB with respect to
the manner by which the parked vehicles would be handled. It also claimed that Sps.
Mamaril erroneously relied on the Guard Service Contract. Apart from not being parties
thereto, its provisions cover only the protection of BSP’s properties, its officers, and
employees. Sps. Mamaril insist that BSP should be held liable for their loss on the basis of
a stipulation pour autrui on the Guard Service Contract.

(a) Explain the concept of stipulation pour autrui.

Contracts take effect only between the parties, their assigns and heirs, except in case where the
rights and obligations arising from the contract are not transmissible by their nature, or by
stipulation or by provision of law. Par. 2, Art. 1311 of the Civil Code states that if a contract
 should contain some stipulation in favor of a third person, he may demand its fulfillment provided
he communicated his acceptance to the obligor before its revocation. Thus, in order that a third
person benefited by this provision, referred to as a stipulation pour autrui, may demand its
fulfillment, the following requisites must concur:
(1) There is a stipulation in favor of a third person;
(2) The stipulation is a part, not the whole, of the contract;
(3) The contracting parties clearly and deliberately conferred a favor to the third person―the
favor is not merely incidental;
(4) The favor is unconditional and uncompensated;
(5) The third person communicated his or her acceptance of the favor before its revocation;
and
(6) The contracting parties do not represent, or are not authorized, by the third party.

(b) Is BSP liable for damages on the basis of stipulation pour autrui under the Guard
Service Contract?

No. None of the elements of a stipulation pour autrui obtains in this case. It is undisputed that
Sps. Mamaril are not parties to the Guard Service Contract. Neither did the subject agreement
contain any stipulation pour autrui. And even if there was, Sps. Mamaril did not convey any
acceptance thereof. Thus, under the principle of relativity of contracts, they cannot validly claim
any rights or favor under the said agreement. The Guard Service Contract between BSP and AIB
is purely between the parties therein. BSP sought the services of AIB for the purpose of the
security and protection of its properties, as well as that of its officers and employees, so much so
that in case of loss or damage suffered by it as a result of any act or negligence of the guards,
the security agency would then be held responsible therefor. There is absolutely nothing in the
said contract that would indicate any obligation and/or liability the part of the parties therein in
favor of third persons such as Sps. Mamaril. (Sps. Mamaril vs. The Boy Scout of the Philippines,
G.R. No. 179382, January 14, 2013, J. Perlas-Bernabe)

86. Define and distinguish from each other an option contract and a right of first refusal.

Option Contract Right of First Refusal

NATURE
A grant, for a fixed period and under specified A grant of a first priority to another in the event the
conditions, of the power to decide, whether or not to grantor decides to enter into a contract (usually an
enter into a principal contract. offer to sell, but not the sale itself).
CONSIDERATION
To be binding, the promise must be supported by a Need not be supported by a consideration distinct
consideration distinct from the price. from the price.
TERMS
The option granted to the offeree is for a fixed period While the object might be made determinate, the
and at a determined price. exercise of the right of first refusal would be
dependent not only on the owner’s eventual intention
to enter into a binding juridical relation with another
but also on terms, including the price, that are yet to
be firmed up. (Carceller vs. CA, G.R. No. 124791,
February 10, 1999; PUP vs. Golden Horizon Realty,
G.R. No. 183612, March 15, 2010; Tuazon vs. Del
Rosario-Suarez, G.R. No. 168325, December 8, 2010)

87. Anthony and Bobby executed a Contract of Lease over a parcel of land for a period of
three years. During the effectivity of the lease, Anthony offered to sell to Bobby the
subject parcel of land for P5 Million. Further, Bobby was given two years from January 1,
2018 to decide on the said offer. Around July 2018, Bobby learned that Anthony sold the
land to the latter’s daughter for a lesser price of P1 Million. Bobby claims that Anthony
 violated his right to buy subject property under the principle of right of first refusal by
not giving him notice and the opportunity to buy the property under the same terms and
conditions or specifically based on the much lower price paid by the Anthony’s daughter.
Is Bobby correct in stating that the offer of Anthony entitles him to a right of first
refusal?

No. What is involved here is an option contract. An option contract is entirely different and distinct
from a right of first refusal in that in the former, the option granted to the offeree is for a fixed period
and at a determined price. Lacking these two essential requisites, what is involved is only a right of
first refusal. Here, what was granted to Bobby is an option contract, and not a right of first refusal. It
is undisputed that Bobby did not accept the terms stated in the letter of Anthony. There is therefore
no contract that was perfected between them. Bobby, thus, does not have any right to demand that
the property be sold to him at the price for which it was sold to Anthony’s daughter neither does he
have the right to demand that said sale to the daughter be annulled. (Tuazon vs. Del Rosario-Suarez,
supra.)

88. PIRRA entered into two (2) contracts with the PSHS for the construction of academic
buildings (Project A), and dormitories and school canteen (Project B). In Project A,
PIRRA requested for its payment and sent a letter to PSHS requesting for substantial
acceptance and completion of the Project, as the accomplishment for Project A was
already 94.09%. PSHS replied without any objection, and merely stated that payment
could not be made because of certain defects found on the Project pursuant to a
Commission on Audit (COA) Report. In Project B, after 25.5% accomplishment, PIRRA
requested the suspension of the construction of the canteen because of certain
difficulties, which PSHS granted. Later, another request for suspension was made
because of affected footings, columns, and time beams. This request was left unheeded.
PSHS found out that PIRRA suspended work on Project B without its approval, hence, it
informed PIRRA that it was terminating the Project C contract because of the latter’s
delay, default, and abandonment. PIRRA demanded from PSHS payment for the
constructions made on Projects A and B.

(a) Can PIRRA demand payment for the constructions made on Project A?

Yes. Art. 1234 of the Civil Code provides that if the obligation is substantially performed in good
faith, the obligor, may recover as if it had strictly and completely fulfilled its obligation, less
damages suffered by the obligee. Here, PSHS acknowledged the substantial compliance of PIRRA
on Project A. In fact, PSHS initially expressed its willingness to pay only to put it on hold because
of a COA Report which found the existence of defects and undelivered items. Such Report,
however, cannot affect PSHS’ obligation to pay because the payment was due on the performed
items that were completed or were otherwise already performed, save for the defects.

(b) Is PIRRA entitled to payment despite the non-completion of Project B?

Yes. Although PIRRA was guilty of delay, suspension of work without any approval from PSHS,
and abandonment of the project, PSHS should still pay PIRRA for the value of the work done as it
was found there had already been a 25.5% accomplishment on Project B. To deny payment
thereof would result in unjust enrichment of PSHS at the expense of PIRRA. (Philippine Science
High School-Cagayan Valley Campus vs. PIRRA Construction Enterprises, G.R. No. 204423,
September 14, 2016)

89. Joey, Jovy and Jojo are solidary debtors under a loan obligation of P300,000 which
has fallen due. The creditor has, however, condoned Jojo's entire share in the debt. Since
Jovy has become insolvent, the creditor made a demand on Joey to pay the debt.
 (a) How much, if any, may Joey be compelled to pay?

Joey can be compelled to pay only the remaining balance of P200,000, in view of the remission
of Jojo's share by the creditor. (Art. 1219, Civil Code)

(b) To what extent, if at all, can Jojo be compelled by Joey to contribute to such
payment?

Jojo can be compelled by Joey to contribute P50,000. Since the insolvent debtor's share which
Joey paid was P100,000, and there are only two remaining debtors - namely Joey and Jojo -
these two shall share equally the burden of reimbursement. Jojo may thus be compelled by Joey
to contribute P50,000. (Art. 1217. par. 3, Civil Code)

90. When may legal compensation set in?

Compensation is defined as a mode of extinguishing obligations whereby two persons in their

capacity as principals are mutual debtors and creditors of each other with respect to equally
liquidated and demandable obligations to which no retention or controversy has been timely
commenced and communicated by third parties. Art. 1279 of the Civil Code requires that:
(1) each one of the obligors be bound principally, and that he be at the same time a principal
creditor of the other;
(2) both debts consist in a sum of money, or if the things due are consumable, they be of the
same kind, and also of the same quality if the latter has been stated;
(3) the two debts be due;
(4) they be liquidated and demandable; and
(5) over neither of them there be any retention or controversy, commenced by third persons and
communicated in due time to the debtor.

When all the requisites mentioned are present, compensation takes effect by operation of law, and
extinguishes both debts to the concurrent amount, even though the creditors and debtors are not
aware of the compensation. (Union Bank Of The Philippines vs. Development Bank of the Philippines,
G.R. No. 191555, January 20, 2014, J. Perlas-Bernabe)

91. May a separate non-drawing savings account for the benefit of the rightful party
amount to a valid judicial consignation?

No. For consignation to be valid, the debtor must comply with the following requirements under the
law:
(1) There was a debt due;
(2) Valid prior tender of payment, unless the consignation was made because of some legal
cause provided in Art. 1256 of the Civil Code;
(3) Previous notice of the consignation has been given to the persons interested in the
performance of the obligation;
(4) The amount or thing due was placed at the disposal of the court; and
(5) After the consignation had been made, the persons interested were notified thereof.

Failure to strictly comply with any of the requirements is enough ground to render a consignation
ineffective. Further, consignation is necessarily judicial; it is not allowed in venues other than the
courts. Thus, a non-drawing savings account is not the consignation contemplated by law, precisely
because it does not place the same at the disposal of the court. (PNB vs. Chan, G.R. No. 206037,
March 13, 2017)
92. Does a manifestation of a desire to answer for the debt of another amount to
novation by substitution of the debtor so as to release the original debtor from his
obligation?

No. To constitute novation by substitution of debtor, the former debtor must be expressly released
from the obligation and the third person or new debtor must assume the former’s place in the
contractual relations. Moreover, the fact that the creditor accepts payments from a third person, who
has assumed the obligation, will result merely in the addition of debtors and not novation. At its core,
novation is never presumed, and the animus novandi, whether totally or partially, must appear by
express agreement of the parties, or by their acts that are too clear and unequivocal to be mistaken.
(Odiamar vs. Valencia, G.R. No. 213582, June 28, 2016, J. Perlas-Bernabe)

93. Peter, a trader from Manila, accumulated an indebtedness of P500,000.00 with Allied
Commodities. Upon demand by its agent in Manila, Peter paid Allied Commodities by
check the amount owed. Upon deposit in the payee’s account in Manila, the check was
dishonored for insufficiency of funds. Meanwhile, Allied Commodities assigned the credit
to Hadji who brought suit against Peter in the RTC of Manila for recovery of the amount
owed. Peter moved to dismiss the complaint against him on the ground that Hadji was
not a real party in interest and, therefore, without legal capacity to sue because he had
not agreed to a subrogation of creditor. Rule on Peter’s defense.

Peter’s defense is untenable. This is not a case of subrogation, but an assignment of credit.
Assignment of credit is the process of transferring the right of the assignor to the assignee. As a
result of the assignment, the assignee acquires all the rights of the assignor including the right to sue
in his own name as the legal assignee. In assignment, the debtor’s consent is not essential for the
validity of the assignment.

Here, Allied Commodities merely assigned the credit to Hadji. Hadji, being an assignee, therefore,
acquired the rights of the assignor, Allied Commodities, including the right to sue. Being an
assignment, Peter’s consent as debtor is not required. (Rodriguez vs. CA, G.R. No. 84220, March 25,
1992)

94. May a compromise agreement be simply disregarded by an aggrieved party in case of

breach thereof without resorting to an action for rescission?

Yes. Under Art. 2041 of the Civil Code, if one of the parties fails or refuses to abide by the
compromise, the other party may either enforce the compromise or regard it as rescinded and insist
upon his original demand. The language of this Article denotes that no action for rescission is
required, and that the party aggrieved by the breach of a compromise agreement may, if he chooses,
bring the suit contemplated or involved in his original demand, as if there had never been any
compromise agreement, without bringing an action for rescission thereof. He need not seek a judicial
declaration of rescission, for he may “regard” the compromise agreement already “rescinded.”
(Sonley vs. Anchor Savings Bank/Equicom Savings Bank, G.R. No. 205623, August 10, 2016)

95. Distinguish an action for rescission (resolution) under Art. 1191 from an action for
rescission under Art. 1381 of the Civil Code.

Art. 1191 Art. 1381

NATURE OF REMEDY
Principal remedy based on breach of faith by the Subsidiary action limited to cases of rescission for
other party that violates the reciprocity. lesion enumerated under Art. 1381.
BASIS
Not predicated on injury to economic interests of the The cause of action is subordinated to the existence
party-plaintiff but on the breach of faith by the party- of that prejudice.
 defendant.
APPLICABILITY
Applies exclusively to reciprocal obligations. Applies to all kinds of obligations arising from
contracts.
INJURED PARTY
Can only be availed of only by the parties to the May be availed of even by third party, as in the case
contract. of accion pauliana.
PRESCRIPTIVE PERIOD
Six (6) years or ten (10) years for oral or written Four (4) years from accrual of the cause of action.
contracts, respectively.
EXTENT OF POWER OF THE COURT
The court has discretion not to grant the rescission if The court has no discretionary power not to grant the
there be just cause for the fixing of the period of rescission so long as any of the grounds exists.
performance of the obligation.
NATURE OF THE SUBJECT CONTRACT
The contract is valid. The contract is defective. (Arts. 1191, 1381, 1389,
1144(1), & 1145(1), Civil Code; Cannu vs. Galang,
G.R. No. 139523, May 26, 2005; Congregation of the
Religious of the Virgin Mary vs. Orola, G.R. No.
169790, April 30, 2008; Rabuya, supra.)

96. What are fixed-lump sum contracts?

Fixed-lump sum contracts are governed by Art. 1724 of the Civil Code. In a fixed lump sum contract,
the project owner agrees to pay the contractor a specified amount for completing a scope of work
involving a variety of unspecified items of work without requiring a cost breakdown. The contractor
estimates the project cost based on the scope of work and schedule and considers probable errors in
measurement and changes in the price of materials.

97. May contractors recover from project owners additional costs in a fixed-lump sum
contract?

Yes. Art. 1724 allows contractors to recover from project owners additional costs in fixed lump sum
contracts, as well as the increase in price for any additional work due to a subsequent change in the
original plans and specifications, provided that there exists: (i) a written authority from the developer
or project owner ordering or allowing the written changes in work; and (ii) written agreement of the
parties with regard to the increase in price or cost due to the change in work or design modification.
Jurisprudence instructs that compliance with these two requisites is a condition precedent for
recovery. (The President of the Church of Jesus Christ of Latter Day Saints vs. BTL Construction
Corporation, G.R. No. 176439, January 15, 2014, J. Perlas-Bernabe)

98. Under Art. 1357 of the Civil Code, if the law requires a document or other special
form, the contracting parties may compel each other to observe that form. What are the
requisites for this remedy to be available?

For the remedy under Art. 1357 of the Civil Code to be available, the following must concur:
(1) The contract must have been perfected;
(2) The contract must have already been valid as to form; and
(3) The contract must be enforceable under the Statute of Frauds. (Arts. 1356-1358)

Illustration where it is applicable : Ana and Ben entered into an oral contract of real estate mortgage
to secure a loan previously incurred by Ana. Since said contract is one which creates a real right over
an immovable property, Ben may avail of the remedy under Art. 1357 considering that the contract is
perfected; the contract is valid as to form, a real estate mortgage not being required to in writing to
be valid; and the contract is not covered by the Statute of Frauds. (Arts. 1356-1358)
 Illustration where it is not applicable: Ana and Ben entered into an oral contract of sale of a parcel of
land. Prior to the execution of the contract, Ben cannot avail of the remedy under Art. 1357
considering that the contract is an agreement for the sale of real property which must be, or some
note or memorandum, thereof, be in writing, and subscribed by the party charged, which is covered
by the Statute of Frauds. Since the contract is executed orally, it does not comply with the
requirements of Statute of Frauds under Art. 1403 of the Civil Code, hence, one of the requisites for
Art. 1357 to apply is lacking. (Arts. 1356-1358)

99. Sps. Aguinaldo are the registered owners of three parcels of land in Tanza, Cavite.
They sold these parcels of land to Artemino through a Deed of Absolute Sale. However,
the Deed was signed by Artemino and the witness, John, in Makati City, and by Sps.
Aguinaldo in the USA, but notarized in Tanza, Cavite; as such, the same could not be
properly registered by the Register of Deeds.

(a) Was the contract of sale void?

No. The improper notarization did not affect the validity of the sale. The only effect of the
improper notarization was that the Deed was stripped of its public character and reduced it
to a private instrument.

(b) What is the remedy available to Artemino?

His remedy is to compel Sps. Aguinaldo to observe the form prescribed by law. The improper
notarization of the Deed rendered the said deed unregistrable. Bearing in mind that the legal
requirement that the sale of real property must appear in a public instrument is merely a
coercive means granted to the contracting parties to enable them to reciprocally compel the
observance of the prescribed form, the spouses should execute a registrable deed of
conveyance in Artemino’s favor in accordance with the prescribed form under Arts. 1357 and
1358(1) of the Civil Code, viz: “If the law requires a document or other special form, the
contracting parties may compel each other to observe that form, once the contract has been
perfected. This right may be exercised simultaneously with the action upon the contract.”
(Sps. Aguinaldo vs. Torres, Jr., G.R. No. 225808, September 11, 2017, J. Perlas-Bernabe)

100. Banco Filipino found the necessity of acquiring real properties in order to open new
branch sites. In view, however, of the restriction imposed by the General Banking Act
limiting a bank’s real estate investments to only 50% of its capital assets, Banco Filipino,
through its board of directors, decided to “warehouse” several of its properties. Major
stockholders of Banco Filipino organized and incorporated Tala Realty Corporation to
purchase and hold the real properties owned by Banco Filipino in trust. Banco Filipino
entered into and, thereafter, proceeded to implement a certain trust agreement with Tala
by selling to the latter some of its properties. In turn, Tala leased these properties to
Banco Filipino. However, Tala repudiated the trust agreement, asserted ownership and
claimed full title over the properties, prompting Banco Filipino to institute complaints for
the reconveyance of the said properties against Tala. Did the “warehousing” of a Bank’s
property created an implied trust?

No. The implied trust agreement between Banco Filipino and Tala is inexistent and void for being
contrary to law. As such, Banco Filipino cannot demand the reconveyance of the properties; neither
can any affirmative relief be accorded to one party against the other since they have been found to
have acted in pari delicto. The Bank was well aware of the limitations on its real estate holdings
under the General Banking Act and that its “warehousing agreement” with Tala was a scheme to
circumvent the limitation. This arrangement which the Bank claims to be an implied trust is contrary
 to law. Thus, while the sale and lease of the property is genuine and binding upon the parties, the
implied trust cannot be enforced even assuming the parties intended to create it. The courts will not
assist the payor in achieving his improper purpose by enforcing a resultant trust for him in
accordance with the ‘clean hands’ doctrine. (Banco Filipino Savings and Mortgage Bank vs. Tala
Realty Services Corporation, G.R. No. 158866, September 9, 2013, J. Perlas-Bernabe)

101. What are real contracts?

Under Art. 1316 of the Civil Code, real contracts are contracts that are not perfected until the delivery
of the object of the obligation, as opposed to consensual contracts that are perfected by mere
meeting of the minds. The Civil Code names deposit, pledge, commodatum, and mutuum as real
contracts. These contracts are more specifically described and defined by the Civil Code as follows,
viz:
(1) Deposit. A deposit is constituted from the moment a person receives a thing belonging to
another, with the obligation of safely keeping it and of returning the same. If the safekeeping
of the thing delivered is not the principal purpose of the contract, there is no deposit but
some other contract. (Art. 1962, Civil Code)
(2) Pledge. A contract of pledge is one constituted to secure the fulfillment of a principal
obligation by the pledgor who is the absolute owner of a movable thing, or by a third person
pledging his own movable called an accommodation/third-party pledgor, who has the free
disposal of his property, or in the absence thereof, when legally authorized for the purpose.
(Art. 2085, Civil Code)
(3) Commodatum. By the contract of commodatum, one of the parties delivers to another, either
something not consumable so that the latter may use the same for a certain time and return
it. (Art. 1933, Civil Code)
(4) Mutuum. By the contract of mutuum, one of the parties delivers to another, either money or
other consumable thing, upon the condition that the same amount of the same kind and
quality shall be paid. (Art. 1933, Civil Code)

102. What is a contract of adhesion?

A contract of adhesion is one wherein one party imposes a ready-made form of contract on the
other. It is a contract whereby almost all of its provisions are drafted by one party, with the
participation of the other party being limited to affixing his or her signature or “adhesion” to the
contract. However, contracts of adhesion are not invalid per se as they are binding as ordinary
contracts. While the Court has occasionally struck down contracts of adhesion as void, it did so when
the weaker party has been imposed upon in dealing with the dominant bargaining party and reduced
to the alternative of taking it or leaving it, completely deprived of the opportunity to bargain on equal
footing. (Encarnacion Construction & Industrial Corporation vs. Phoenix Ready Mix Concrete
Development & Construction, Inc., G.R. No. 225402, September 4, 2017, J. Perlas-Bernabe)

103. Distinguish culpa contractual, culpa aquiliana, and culpa criminal from each other.

Culpa Contractual Culpa Aquiliana Culpa Criminal

CHARACTER OF NEGLIGENCE
Negligence is merely incidental to Negligence is independent, direct, Negligence is independent, direct,
the performance of an obligation and substantive. and substantive.
already existing because of a
contract
RELATIONSHIP OF PARTIES
The contractual relation is pre- There may or may not be a pre- There is no pre-existing
existing. existing contractual relation. contractual relation.
SOURCE OF OBLIGATION
Contract. Quasi-delict. Law.
 PROOF REQUIRED
Proof by preponderance of
Proof by preponderance of Proof beyond reasonable doubt.
evidence. evidence.
DEFENSE OF A GOOD FATHER OF A FAMILY
IN THE SELECTION AND SUPERVISION OF EMPLOYEES
Not a proper or complete defense, A proper or complete defense. Not a proper defense. The
though it may mitigate damages. employer becomes subsidiarily
liable if its employee becomes
insolvent. (Jurado, Comments and
Jurisprudence on Obligations and
Contracts [2010]; Rabuya, supra.)

104. What are the distinctions among defective contracts?

Rescissible Voidable Unenforceable Void or Inexistent

Those validly agreed
upon because all the
essential dements exist
and, therefore legally
effective, but in the
cases established by law,
the remedy of rescission
is granted in the interest
of equity.
Injury or damage either
to one of the contracting
parties or to third
persons.
DEFINITION
Those which possess all Those that cannot be Those which, because of
the essential requisites of enforced in court or sued certain defects, generally
a valid contract but one upon by reason of produce no effect at all.
of the parties is legally defects provided by law
incapable of giving until and unless they are
consent, or consent is ratified according to law.
vitiated by mistake,
violence, intimidation,
undue influence, or
fraud.
DEFECTS
Vitiation of consent or Entered into in excess or VOID: All requisites
legal incapacity of one of without any authority, prescribed by law for
the contracting parties. non-compliance with the contracts are present,
Statute of Frauds, or but because, object, or
incapacity of both purpose is contrary to
contracting parties. law, morals, good
customs, public order or
public policy, or contracts
prohibited by law or
declared by law to be
void.

INEXISTENT: Lacking
absolutely either in fact
or in law one or some of
the elements of a valid
contract.
GROUNDS
(1) Those which are (1) Those where one of (1) Those entered into (1) Those whose cause,
entered into by the parties is in the name of object or purpose is
guardians incapable of giving another person by contrary to law,
whenever the consent to a one who has been morals, good
wards whom they contract; given no authority or customs, public
represent suffer (2) Those where the legal representation, order or public
lesion by more than consent is vitiated by or who has acted policy;
¼ of the value of mistake, violence, beyond his powers; (2) Those which are
the things which intimidation, undue (2) Those that do not absolutely simulated
are the object influence or fraud. comply with the or fictitious;
thereof; Statute of Frauds; (3) Those whose cause
(2) Those agreed upon (3) Those where both or object did not
in representation of parties are incapable exist at the time of
 absentees, if the of giving consent to the transaction;
latter suffer the a contract. (4) Those whose object
lesion stated in the is outside the
preceding number; commerce of men;
(3) Those undertaken (5) Those which
in fraud of creditors contemplate an
when the latter impossible service;
cannot in any other (6) Those where the
manner collect the intention of the
claims due them; parties relative to the
(4) Those which refer principal object of
to things under the contract cannot
litigation if they be ascertained;
have been entered (7) Those expressly
into by the prohibited or
defendant without declared void by law.
the knowledge and
approval of the
litigants or of
competent judicial
authority;
(5) All other contracts
specially declared
by law to be
subject to
rescission.
NECESSITY OF DAMAGE
Necessary. Not necessary. Not necessary. Not necessary.
WHO MAY ASSAIL
One of the contracting One of the contracting Any of the contracting One of the contracting
parties or third person parties (but not the parties. , including heirs, parties or third person
injured or defrauded, guilty one) or third assigns, or successors-in- whose interest is directly
including heirs, assigns, persons whose rights are interest. affected, including heirs,
or successors-in-interest. prejudiced with respect assigns, or successors-in-
to one of the contracting interest.
parties, including heirs,
assigns, or successors-in-
interest.
HOW ASSAILED
Direct action only. Directly and collaterally Collaterally (by way of Directly or collaterally.
(by way of defense to an defense to an action
action under the under the contract)
contract).
VALIDITY
Valid until rescinded. Valid until annulled. Valid if the elements of a Void from the beginning.
contract are complete,
but still unenforceable
unless ratified.
PRESCRIPTIVE PERIOD
Four (4) years. Four (4) years. N/A. Imprescriptible.

SALES

105. Bella offered to sell a laptop computer for the sum of P15,000 to Anita. Since Anita
was undecided, Bella left the laptop with Anita for two days. The following day, Anita
told Bella that she was willing to buy the laptop on installment. Bella agreed; thus, Anita
gave P5,000 as initial payment and promised to pay on installments the balance. Anita
 then gave her second installment of P3,000 to Bella. But when Bella returned to get the
remaining balance, Anita offered to pay only P2,000 claiming that the laptop was only
worth P10,000. Due to the refusal of Anita to pay the remaining balance, Bella instituted
a collection suit against Anita. Anita, however, contended that under the Statute of
Frauds, a contract of sale to be enforceable must be in writing. Is Anita’s contention
correct?

No. A contract of sale is perfected the moment the parties agree upon the object of the sale, the
price, and the terms of payment. Once perfected, the parties are bound by it whether the contract is
verbal or in writing because no form is required. The Statute of Frauds does not apply in the present
case as this provision applies only to executory, and not to completed, executed or partially executed
contracts. In this case, the contract of sale had been partially executed because the possession of the
laptop was already transferred to Anita and the partial payments had been made by her. Thus, the
absence of a written contract is not fatal to Bella’s case. (Duarte vs. Duran, G.R. No. 173038,
September 14, 2011)

106. Rosalinda Palces sought a loan from Equitable Savings Bank for the purchase of a
Hyundai Starex GRX Jumbo from a third party. In connection therewith, Palces executed
a Promissory Note with Chattel Mortgage in favor of the Bank stating that a default in
the payment of any installment renders the remaining balance due and payable. Palces
failed to pay certain monthly installments, which prompted the Bank to send a demand
letter for the payment of the remaining balance of the loan. As the demand went
unheeded, the Bank filed a Complaint to recover possession of the subject vehicle or in
the alternative, to render judgment ordering Palces to pay the remaining balance of the
loan. The trial court ruled in favor of the Bank and confirmed its right to possess the
subject vehicle. It, however, ruled that the bank, pursuant to Art. 1484 of the Civil Code,
waived its right to recover any unpaid installments by choosing to recover the subject
vehicle. Was the trial court correct in applying Art. 1484 of the Civil Code?

No. Art. 1484 of the Civil Code states that in a contract of sale of personal property in installments,
the vendor may exercise any of the following remedies:
(1) Exact fulfillment of the obligation, should the vendee fail to pay;
(2) Cancel the sale, should the vendee's failure to pay cover two or more installments;
(3) Foreclose the chattel mortgage on the thing sold, if one has been constituted, should the
vendee's failure to pay cover two or more installments.

Here, there was no vendor-vendee relationship between Palces and the Bank. The Promissory Note
with Chattel Mortgage was executed in order to document the loan transaction. It is not a contract of
sale of personal property in installments. Indubitably, what was entered into by Palces and the bank
is a loan contract with the accessory chattel mortgage contract; hence, it is not covered by Art. 1484
of the Civil Code. (Equitable Savings Bank, vs. Palces, G.R. No. 214752, March 9, 2016, J. Perlas-
Bernabe)

107. ABC Union is a duly registered labor organization engaged in a Shelter Program. It
entered into a contract with one of its members, Noriel Decena, wherein the latter was
allowed to take possession of a house and lot in Dasmariñas, Cavite, with the obligation
to reimburse the former the cost or the value of the house and lot in 180 equal monthly
payments. In the contract, it was stipulated that the Union shall execute a Deed of
Transfer in favor of Decena upon his full payment of the value of the house and lot. When
Decena failed to pay 25 monthly payments, the Union cancelled the contract and treated
all his payments as rental payments for his occupancy of the house and lot. The Union
also sent a notice of final demand, requiring Decena to fulfill his obligation within a 30-
day grace period. For failure of Decena to heed the notice, the Union thereafter sent a
 notice to vacate the premises. It also filed a Complaint for Unlawful Detainer on the
ground that the contract is akin to a contract of lease with the monthly reimbursements
as rentals. In Decena’s defense, he averred that the case is covered by RA 6552 (Maceda
Law), as the contract is not a contract of lease, but a contract to sell.

(a) Is the contract a contract to sell or a contract of lease?

It is a contract to sell. 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 itself to sell the said property exclusively to
the prospective buyer upon fulfillment of the condition agreed upon, that is, full payment of
the purchase price. Here, it cannot be denied that the Union and Decena entered into a
contract to sell in the guise of a reimbursement scheme. The monthly reimbursement
payments required of Decena are, in actuality, installment payments for the value of the
house and lot. While Decena occupied the premises, title nonetheless remained with the
Union. Considering, therefore, that the basis for such occupation is a contract to sell the
premises on installment, the contractual relations between the Union and Decena are more
than that of a lessor-lessee.

(b) Did the Union properly cancel the contract?

No. RA 6552 recognizes in conditional sales of all kinds of real estate (industrial, commercial,
residential) the right of the seller to cancel the contract upon non-payment of an installment
by the buyer, which is simply an event that prevents the obligation of the vendor to convey
title from acquiring binding force. While the cancellation of a contract to sell may be done
outside of court, however, the cancellation by the seller must be in accordance with Sec. 3(b)
of RA 6552, which requires a notarial act of rescission and the refund to the buyer of the full
payment of the cash surrender value of the payments on the property. Here, the Union failed
to prove that the contract had been cancelled in accordance with RA 6552. (Associated
Marine Officers and Seamen’s Union of the Philippines PTGWO-ITF, vs. Decena, G.R. No.
178584, October 8, 2012, J. Perlas-Bernabe)

108. Does a stipulation stating “as soon as the total amount of the property has been paid
and the Certificate of Title has been issued, an Absolute Deed of Sale shall be executed
accordingly” partake the nature of a conditional contract of sale?

No. Where the seller promises to execute a deed of absolute sale upon the completion by the buyer
of the payment of the purchase price, the contract is only a contract to sell even if their agreement is
denominated as a Deed of Conditional Sale. In a contract to sell, ownership is retained by the vendor
and is not to pass to the vendee until full payment of the purchase price. In contracts to sell, the
obligation of the seller to sell becomes demandable only upon the happening of the suspensive
condition, that is, the full payment of the purchase price by the buyer. It is only upon the existence
of the contract of sale that the seller becomes obligated to transfer the ownership of the thing sold to
the buyer. Prior to the existence of the contract of sale, the seller is not obligated to transfer the
ownership to the buyer, even if there is a contract to sell between them. (Sps. Roque vs. Aguado,
G.R. No. 193787, April 7, 2014, J. Perlas-Bernabe)

109. In 1992, Zeek as buyer, entered into a Contract to Sell with Bliss Corp. involving a
house and lot. Barely a year after, Zeek, this time as the seller, entered into another
Contract to Sell with Yee concerning the same property. Immediately after the execution
of the said second contract, Yee took possession of the property. However, except for the
down payment, Yee failed to pay any of the stipulated subsequent amortization
 payments. Zeek filed before the RTC a Complaint for Rescission of Contract and Damages
against Yee pursuant to Art. 1191 of the Civil Code. Is remedy availed of proper?

No. The contract between the parties is a contract to sell, as such, rescission is not the proper
remedy. In a contract to sell, payment of the price is a positive suspensive condition, failure of which
is not a breach of contract warranting rescission under Art. 1191 of the Civil Code but rather just an
event that prevents the supposed seller from being bound to convey title to the supposed buyer.
Also, Art. 1191 cannot be applied to sales of real property on installment since they are governed by
the Maceda Law. (Sps. Bonrostro vs. Sps. Luna, G.R. No. 172346, July 24, 2013)

110. What are the rules on double sales?

Art. 1544 of the Civil Code provides: if the same thing should have been sold to different vendees,
the ownership shall be transferred to the person who may have first taken possession thereof in good
faith, if it should be movable property. Should it be immovable property, the ownership shall belong
to the person acquiring it who in good faith first recorded it in the Registry of Property. Should there
be no inscription, the ownership shall pertain to the person who in good faith was first in possession;
and in the absence thereof, to the person who presents the oldest title, provided there is good faith.

The following circumstances must concur in order to determine the applicability of Art. 1544:
(a) The two (or more) sales transactions in issue must pertain to exactly the same subject
matter, and must be valid sales transactions;
(b) The two (or more) buyers at odds over the rightful ownership of the subject matter must
each represent conflicting interests; and
(c) The two (or more) buyers at odds over the rightful ownership of the subject matter must
each have bought from the same seller.

The rule exacted by Art. 1544 for the second buyer to be able to displace the first buyer are:
(1) That the second buyer must show that he acted in good faith ( i.e., in ignorance of the first
sale and of the first buyer’s rights) from the time of acquisition until title is transferred to him
by registration or failing registration, by delivery of possession;
(2) The second buyer must show continuing good faith and innocence or lack of knowledge of
the first sale until his contract ripens into full ownership through prior registration as provided
by law. (Cheng vs. Genato, G.R. No. 129760, December 29, 1998)

111. Distinguish Pacto de Retro Sale from Equitable Mortgage.

In a pacto de retro, ownership of the property sold is immediately transferred to the vendee a retro,
subject only to the repurchase by the vendor a retro within the stipulated period. The vendor a
retro’s failure to exercise the right of repurchase within the agreed time vests upon the vendee a
retro, by operation of law, absolute title to the property. Such title is not impaired even if the vendee
a retro fails to consolidate title under Art. 1607 of the Civil Code.

On the other hand, an equitable mortgage is a contract that, although lacking the formality, the form
or words, or other requisites demanded by a statute, nevertheless reveals the intention of the parties
to burden a piece or pieces of real property as security for a debt. The essential requisites of such a
contract are as follows: (1) the parties enter into what appears to be a contract of sale, but (2) their
intention is to secure an existing debt by way of a mortgage. The nonpayment of the debt when due
gives the mortgagee the right to foreclose the mortgage, sell the property, and apply the proceeds of
the sale to the satisfaction of the loan obligation.

The nomenclature used by the contracting parties to describe a contract does not determine its
nature. The decisive factor is their intention – as shown by their conduct, words, actions and deeds –
 prior to, during, and after executing the agreement. (Ramos vs. Sarao, G.R. No. 149756, February
11, 2005)

LEASE

112. What are the obligations of a lessor?

The lessor is obliged:

(1) To deliver the thing which is the object of the contract in such a condition as to render it fit
for the use intended;
(2) To make on the same during the lease 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; and
(3) To maintain the lessee in the peaceful and adequate enjoyment of the lease for the entire
duration of the contract. (Art. 1654, Civil Code)

113. What are the obligations of a lessee?

The lessee is obliged:

(1) To pay the price of the lease according to the terms stipulated;
(2) To use the thing leased as a diligent father of a family, devoting it to the use stipulated; and
in the absence of stipulation, to that which may be inferred from the nature of the thing
leased, according to the custom of the place; and
(3) To pay expenses for the deed of lease. (Art. 1657, Civil Code)

114. State the rule on the assignment of lease to a third person and the subleasing of the
premises to a third person.

The lessee of real property may not assign the lease to a third person without the lessor’s consent,
unless there is a stipulation in the contract of lease to the contrary. On the other hand, the lessee
may sublease the premises to a third person without the consent of the lessor, unless there is an
express prohibition in the contract of lease. (Arts. 1649-1650, Civil Code)

PARTNERSHIP

115. Assuming that there is a mutual contribution of money, property, or industry to a

common fund, is the receipt by a person of a share of the profits of a business conclusive
evidence that he is a partner in the business?

No. It is merely prima facie evidence that he is a partner. This inference, however, cannot be drawn
if such profits are payments for the following:
(1) Debt payable by installments or otherwise;
(2) Wages of an employee or rent to a landlord;
(3) Annuity to a widow or to a legal representative of a deceased partner;
(4) Interest on a loan;
(5) Sale of the goodwill of a business or other property by installments or otherwise. (Art. 1769,
Civil Code)

116. What are the formalities required by law for the organization or constitution of a
partnership?
 A partnership may be constituted in any form, except where immovable property or real rights are
contributed to the common fund, in which case a public instrument, to which is attached an inventory
of said property, signed by any of the partners, shall be necessary for validity. Furthermore, if it has a
capital of P3,000 or more, it must appear in a public instrument, which shall be recorded in the Office
of the Securities and Exchange Commission. However, this is not necessary for its validity.

If the partnership is limited, it is required that the contracting parties, in addition to the formalities
prescribed for the organization of a general partnership, shall execute a certificate of limited
partnership which must be recorded in the Office of the Securities and Exchange Commission. These
formalities must be complied with, otherwise, the partnership is not limited but general. (Arts. 1771-
1773, and 1843, Civil Code)

117. Can a limited partner be held liable for partnership obligations?

As a general rule, a limited partner cannot be held personally liable for partnership obligations.
However, in the following instances, a limited partner may be held liable up to his personal property:
(1) If he participates in the management of the business;
(2) If his surname appears in the partnership or firm name except when a) a surname of a
general partner is the same as that of the limited partner and b) such surname was already
in the firm name prior to his entry in the partnership; and
(3) When he is a general partner and a limited partner at the same time. (Arts. 1843, 1846, and
1848, Civil Code)

118. What is pactum leonina? Is it valid?

Pactum leonina is a stipulation which excludes one or more partners from any share in the profits or
losses. It is a void stipulation. (Art. 1799, Civil Code)

119. Xyreen, Yna and Zendaya are engaged in the buying and selling of clothing. In order
to gain additional funds for their plan to expand their business venture, Zendaya sold a
building owned by the partnership. Will Zendaya’s act bind the partnership?

No. An act of a partner which is not apparently for the carrying on of the business of the partnership
in the usual way, does not bind the partnership unless authorized by the other partners. Here, since
80. Xyreen, Yna and Zendaya are engaged in the buying and selling of clothing, the sale of a building
would not bind the partnership as the same is not for the carrying on of the partnership in the usual
way. The same can only bind the partnership when authorized by Yna and Zendaya. (Art. 1818, Civil
Code)

AGENCY

120. Aaron is the owner of a parcel of land in Cagayan de Oro City. Kath borrowed the title
on the pretext that she was going to show it to an interested buyer. Kath then obtained a
loan in the amount of P30,000.00 from ABC bank. As security for the loan, Kath
mortgaged Aaron’s house and lot to ABC bank using a Special Power of Attorney (SPA)
allegedly executed by Aaron in favor of Kath. The Deed of Real Estate Mortgage was
signed by Kath in her own name. Upon failure to pay the loan, Aaron’s house and lot
were foreclosed. Aaron filed with the RTC a case for Annulment of Mortgage,
Foreclosure, and SPA against Kath. Will the suit prosper?

Yes. The authorized agent failed to indicate in the mortgage that she was acting for and on behalf of
her principal. The Deed was signed by Kath in her own name and in her own personal capacity.
 There is nothing in the document to show that she was acting or signing as an agent of Aaron. Thus,
consistent with the law on agency and established jurisprudence, Aaron cannot be bound by the acts
of Kath. (Bucton vs. Rural Bank of El Salvador, Inc., G.R. No. 179625, February 24, 2014)

CREDIT TRANSACTIONS

121. Annie entered into a contract with Boyet to purchase a parcel of land. They agreed
that the title will pass upon full payment of the price, and that meanwhile, the Certificate
of Title would be deposited in a safety deposit box of Louts Bank. When Annie and Boyet
rented from the Bank a safety deposit box, they signed a stipulation that the Bank is not
a depositary of the contents of the said box and therefore not liable for such, and that
the Bank has neither control nor possession of the same. The Bank gave two (2) different
keys to Annie and Boyet while the Bank retained one key. The safety deposit box would
not be opened without the three (3) keys. Consequently, Carol wanted to purchase the
land from Annie, prompting Annie and Boyet to open the safety deposit box. However,
when Annie, Boyet, and an employee of the Bank opened the same, the Certificate of
Title cannot be found.

(a) Is the rent of safety deposit boxes governed by the rules on lease or deposit?

Neither. It is not a contract of lease, nor is it a contract of deposit. The contract was a special
kind of deposit. Hence, it is not to be strictly governed by the provisions on deposit. It cannot be
characterized as an ordinary contract of lease under Art. 1643 of the Civil Code because the full
and absolute possession and control of the safety deposit box was not given to the joint renters.
Here, the guard key of the box remained with the Bank. Without this key, neither of the renters
could open the box. The Bank could not likewise open the box without the renter’s key. The
consensus of authority is that the relationship between Annie, Boyet, and the Bank is that of
bailor and bailee under a bailment contract for hire and mutual benefit.

(b) Is the stipulation void?

Yes, the stipulation made by the Bank is void. The truth is that the safety deposit box is located
within the Bank. It has possession and control over the said box. Also, the stipulation exempting
the Bank from liability is void for being contrary to public policy. (CA-Agro Industrial
Development Corp. vs. CA, G.R. No. 90027, March 3, 1993)

122. What are the contracts of security? Define each.

Contracts of security are either personal or real. In contracts of personal security, such as a guaranty
or a suretyship, the faithful performance of the obligation by the principal debt or is secured by the
personal commitment of another (the guarantor or surety). In contracts of real security, such as a
pledge, a mortgage or an antichresis, that fulfillment is secured by an encumbrance of property
upon the essential condition that if the obligation becomes due and the debtor defaults, then the
property encumbered can be alienated for the payment of the obligation, but that should the
obligation be duly paid, then the contract is automatically extinguished proceeding from the
accessory character of the agreement. (Acme Shoe, Rubber & Plastic vs. CA, G.R. No. 103576
August 22, 1996)

(1) Contracts of personal security.

a. Guaranty. 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. (Art.
2047, Civil Code)
 b. Suretyship. By a contract of suretyship, a person binds himself solidarily with the
principal debtor. (Art. 2047, Civil Code)

(2) Contracts of real security.

a. Pledge. A contract of pledge is one constituted to secure the fulfillment of a principal
obligation by the pledgor who is the absolute owner of a movable thing, or by a third
person pledging his own movable called an accommodation/third-party pledgor, who
has the free disposal of his property, or in the absence thereof, when legally
authorized for the purpose. (Art. 2085, Civil Code)
b. Real Estate Mortgage. A contract of real estate mortgage is one constituted to secure
the fulfillment of a principal obligation by the mortgagor who is the absolute owner
of a real property, or by a third person pledging his own real property called an
accommodation/third-party, who has the free disposal of his property, or in the
absence thereof, when legally authorized for the purpose. (Art. 2085, Civil Code)
c. Chattel mortgage. By a chattel mortgage, personal property is recorded in the
Chattel Mortgage Register as a security for the performance of an obligation. If the
movable, instead of being recorded, is delivered to the creditor or a third person, the
contract is a pledge and not a chattel mortgage. (Art. 2140, Civil Code)
d. Antichresis. By the contract of antichresis the creditor acquires the right to receive
the fruits of an immovable of his debtor, with the obligation to apply them to the
payment of the interest, if owing, and thereafter to the principal of his credit. (Art.
2132, Civil Code)

123. Denver mortgaged a parcel of land owned by him and his siblings, Tala and Jessa.
Such mortgage was constituted without the consent of Tala and Jessa. Tala assailed the
mortgaged, contending that a co-owner cannot mortgage a property without the consent
of the other owners. Denver, on the other hand, asserted that the mortgage is valid.
Decide.

The mortgage is valid up to the extent of Denver’s share in the property. It is invalid as to Tala and
Jessa’s shares. An essential requisite of a contract of mortgage is that the mortgagor be the absolute
owner of the thing mortgaged. The effect of a mortgage by a co-owner shall be limited to the portion
that may be allotted to that person upon the termination of the co-ownership. ( Ocampo vs. Ocampo,
G.R. No. 150707, April 14, 2004)

124. What is the benefit of excussion? When can it and cannot take place?

By the benefit of excussion, a guarantor cannot be compelled to pay the creditor unless the latter has
exhausted all the property of the debtor and resorted to all the legal remedies against the debtor.
(Art. 2058, Civil Code)

In order that the guarantor may make use of the benefit of excussion, he must set it up against the
creditor upon the latter’s demand for payment from him, and point out to the creditor available
property of the debtor within Philippines, sufficient to cover the amount of the debt. If, despite
having been served a demand, the guarantor still failed to point out to creditor the properties of the
principal debtor sufficient to cover its debt, such failure on the guarantor’s part forecloses his right to
set up the defense of excussion. (Art. 2060, Civil Code; Bitanga vs. Pyramid Construction Engineering
G.R. No. 173526, August 28, 2008)

The excussion shall not take place:

(1) If the guarantor has expressly renounced it;
(2) If he has bound himself solidarily with the debtor;
(3) In case of insolvency of the debtor;
 (4) When he has absconded, or cannot be sued within the Philippines unless he has left a
manager or representative;
(5) If it may be presumed that an execution on the property of the principal debtor would not
result in the satisfaction of the obligation. (Art. 2059, Civil Code)

125. Benjamin owns a parcel of land. During his lifetime, he obtained from Magtalas
sisters a loan as evidenced by a Kasulatan ng Ukol sa Utang. Under the Kasulatan, the
Magtalas sisters shall have the right to the fruits of the subject property for six (6) years
or until the loan is fully paid. Magtalas sisters then took possession of the land. After
Benjamin passed away, his siblings inspected the subject land and discovered that the
Magtalas sisters were cultivating the same on the basis of the Kasulatan. Doubting the
authenticity of the said Kasulatan, the heirs of Benjamin filed a Complaint for Recovery
of Possession, and Declaration of Nullity of the Kasulatan.

(a) What kind of contract did the parties entered into?

The parties entered into a contract of antichresis. Art. 2132 of the Civil Code provides that in
a contract of antichresis, the creditor acquires the right to receive the fruits of an immovable
of his debtor, with the obligation to apply them to the payment of the interest, if owing, and
thereafter to the principal of his credit. Antichresis involves an express agreement between
the parties whereby:
(1) The creditor will have the possession of the debtor’s real property given as security;
(2) Such creditor will apply the fruits of the said property to the interest owed by the
debtor, if any, then to the principal amount;
(3) The creditor retains enjoyment of such property until the debtor has totally paid what
he owes; and
(4) Should the obligation be duly paid, then the contract is automatically extinguished
proceeding from the accessory character of the agreement.

Here, the parties intended to enter into a contract of antichresis. While the Kasulatan did not
provide for the transfer of possession of the subject land, the contemporaneous and
subsequent acts of the parties show that such possession was intended to be transferred.
While the Kasulatan only shows that the harvest and the fruits shall answer for Benjamin’s
indebtedness, the parties agreed among themselves that the lenders would be the one to
take possession of the subject land in order for them to get the harvest.

(b) Are the Magtalas sisters entitled to retain possession of the land?

Yes. As anthichresis creditors, the Magtalas sisters are entitled to retain enjoyment of the
subject land until the debt has been totally paid. Here, the debt not having been totally paid,
the Magtalas sisters are entitled to retain the enjoyment of the subject land. (Sps. Reyes vs.
Heirs of Malance, G.R. No. 219071, August 24, 2016, J. Perlas-Bernabe)

126. Spouses Roque and Susana Magsano, the parents of Magsano sisters, purportedly
executed in favor of PS Bank a Real Estate Mortgage over a house and lot, as security for
the payment of their loan. When the spouses defaulted in the payment of their loan
obligation, the Bank extrajudicially foreclosed the mortgaged property, and in the
process, the Bank emerged as the highest bidder in the public auction sale. When the
spouses failed to redeem the property, a new TCT was issued in the name of the Bank.
The latter subsequently sold the same to Sps. Manuel.

The Magsana sisters assail the validity of the Real Estate Mortgage and the
corresponding foreclosure sale and the subsequent sale to Sps. Manuel. They were able
 to establish (1) that Roque had already passed away prior to the execution of the Real
Estate Mortgage and (2) that Sps. Manuel were aware that Magsano sisters were in
possession of the property when they purchased it.

(a) Is the Real Estate Mortgage valid?

Yes, but not in its entirety. At the time the Real Estate Mortgage was constituted, Roque was
already deceased. Upon his death, the conjugal partnership between him and his spouse,
Susana, was dissolved pursuant to Art. 126(1) of the Family Code, and an implied ordinary co-
ownership arose among Susana and the other heirs of Roque with respect to his share in the
assets of the conjugal partnership pending liquidation. Pertinent thereto, Art. 493 of the Civil
Code provides that the effect of the alienation or the mortgage, with respect to the co-owners,
shall be limited to the portion which may be allotted to him in the division upon the termination
of the co-ownership. Thus, although Susana as a co-owner had the right to mortgage or even sell
her undivided interest in the subject property, she could not mortgage or otherwise dispose of
the same in its entirety without the consent of the other co-owners. Consequently, the validity of
the subject Real Estate Mortgage and the subsequent foreclosure proceedings therefor conducted
in favor of the Bank should be limited only to the portion which may be allotted to it, as Susana’s
successor-in-interest, in the event of partition, thereby making it a co-owner with the Magsano
sisters pending partition.

(b) Are Sps. Manuel innocent purchasers for value?

No. While the rule is that every person dealing with registered land may safely rely on the
correctness of the certificate of title issued therefor and the law will in no way oblige him to go
beyond the certificate to determine the condition of the property, where the land sold is in the
possession of a person other than the vendor, as in this case, the purchaser must go beyond the
certificate of title and make inquiries concerning the actual possessor. Here, the Magsano sisters
were in possession of the subject property when Sps. Manuel bought the same. However, Sps.
Manuel never inspected the property and inquired into the nature of Magsano sisters’ possession
and/or the extent of their possessory rights as a measure of precaution which may reasonably be
required of a prudent man in a similar situation, and thereby discover the irregularity in the
acquisition of title by the Bank. Sps. Manuel, therefore, failed to exercise the diligence required in
protecting their rights; as such, good faith cannot ascribe to them. (Magsano vs. Pangasinan
Savings and Loan Bank, Inc., G.R. No. 215038, October 17, 2016, J. Perlas-Bernabe)

127. Are accommodation mortgagors required to be furnished with loan documents and
notice of the borrower’s default?

No. Accommodation mortgagors are not entitled to the proceeds of the loan, nor were required to be
furnished with the loan documents or notice of the borrower’s default in paying the principal,
interests, penalties, and other charges on due date, or of the extrajudicial foreclosure proceedings,
unless stipulated in the deed. An accommodation mortgagor is a third person who is not a debtor to
a principal obligation but merely secures it by mortgaging his or her own property. Like an
accommodation party to a negotiable instrument, the accommodation mortgagor in effect becomes a
surety to enable the accommodated debtor to obtain credit. (Sps. Sierra vs. Paic Savings and
Mortgage Bank, Inc., G.R. No. 197857, September 10, 2014, J. Perlas-Bernabe)

128. What are the types of interest?

There are two (2) types of interest, namely, monetary interest and compensatory interest. Monetary
interest is the compensation fixed by the parties for the use or forbearance of money. On the other
hand, compensatory interest is that imposed by law or by the courts as penalty or indemnity for
 damages. In other words, the right to recover interest arises only either by virtue of a contract
(monetary interest) or as damages for the delay or failure to pay the principal loan on which the
interest is demanded (compensatory interest). (Odiamar vs. Valencia, supra.)

129. May interest be imposed even in the absence of stipulation in a contract?

Yes. Interest may be imposed even in the absence of stipulation in the contract. Art. 2210 of the Civil
Code expressly provides that “interest may, in the discretion of the court, be allowed upon damages
awarded for breach of contract.” In this relation, Art. 2209 of the same Code provides that “if the
obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity
for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed
upon, and in the absence of stipulation, the legal interest, which is six per cent per annum.” (Estores
vs. Sps. Supangan, G.R. No. 175139, April 18, 2012)

130. Is a proviso in loans with banks that interest rate would be made “to depend on the
prevailing market value” valid?

Yes. Such provision does not signify an automatic increase in the interest. It simply means that the
bank may adjust the interest according to the prevailing market rate. This may result to either an
increase or a decrease in the interest. (Lotto Restaurant, Corp. vs. BPI Family Savings Bank, Inc., GR
177260, March 30, 2011)

LAND TITLES AND DEEDS

131. Laura Paraguya claims that she is the lawful heir to certain parcel of lands left by her
paternal grandfather. She purports that Alma Crucillo, the administrator, obtained an
OCT covering said properties, issued on August 24, 1979, through fraud and deceit. Thus,
on December 19, 1990, Paraguya filed a Complaint against Crucillo and the Register of
Deeds for the annulment of the OCT, with prayer for receivership and damages. Sps.
Crucillo filed their Answer with Motion to Dismiss, averring that Paraguya’s Complaint
had already been barred by prescription. The parties stipulated the fact that Sps. Crucillo
are in actual possession of the subject properties.

(a) Is Paraguya’s Complaint already been barred by prescription?

Yes. It is an established rule that a Torrens certificate of title is not conclusive proof of
ownership. Verily, a party may seek its annulment on the basis of fraud or misrepresentation.
However, such action must be seasonably filed; else the same would be barred. In this relation,
Sec. 32 of PD 1529 provides that the period to contest a decree of registration shall be one (1)
year from the date of its entry and that, after the lapse of the said period, the Torrens Certificate
of Title issued thereon becomes incontrovertible and indefeasible. Here, Paraguya’s Complaint for
Annulment of the OCT was filed only on December 19, 1990, or more than eleven (11) years
from the title’s date of entry on August 24, 1979. Based on Sec. 32 of PD 1529, said title had
become incontrovertible and indefeasible after the lapse of one (1) year from the date of its
entry, thus barring Paraguya’s action for annulment of title.

(b) Suppose the Complaint is an action for reconveyance praying to order Sps. Crucillo to
surrender ownership and possession of the properties in question to Paraguya,
vacating them altogether, will your answer be the same?

Yes. Despite this, Paraguya’s Complaint remains dismissible on the same ground because the
prescriptive period for actions for reconveyance is ten (10) years reckoned from the date of
 issuance of the certificate of title, except when the owner is in possession of the property, in
which case the action for reconveyance becomes imprescriptible. Such exception is, however,
inapplicable in this case because as stipulated by the parties herein, it is Sps. Crucillo, and not
Paraguya, who are in possession of the land covered by the OCT. (Paraguya vs. Sps. Crucillo,
G.R. No. 200265, December 02, 2013, J. Perlas-Bernabe)

132. Hilaria Bagayas claims that Rogelio and Orlando intended to exclude her from
inheriting from the estate of her legally adoptive parents, Maximino and Eligia, by
falsifying a deed of absolute sale purportedly executed by the deceased spouses
transferring two parcels of land registered in their names to Rogelio and Orlando. Said
deed bore the signature of Eligia who could not have affixed her signature thereon as she
had long been dead. By virtue of the same instrument, however, Rogelio and Orlando
were able to secure in their favor TCTs over the subject lands. Hilaria then filed a
Complaint for Annulment of sale and Partition. In opposition, Rogelio and Orlando
contend that Hilaria’s petition for annulment of sale constitute a collateral attack upon
their title. Is the contention correct?

No. In an action for partition premised on the existence or non-existence of co-ownership, between
the parties, a resolution on the issue of ownership does not subject the Torrens title issued over the
disputed realties to a collateral attack. It must be borne in mind that what cannot be collaterally
attacked is the certificate of title and not the title itself. Thus, Bagayas’ petition for annulment of sale
on the ground that it constituted a collateral attack must not be dismissed since she was actually
assailing Rogelio and Orlando’s title to the subject lands and not any Torrens certificate of title over
the same. (Bagayas vs. Bagayas, G.R. No. 187308 & 187517, September 18, 2013, J. Perlas-
Bernabe)

133. Is a reconstitution proceeding proper even in the absence of an Original Certificate of

Title having been previously issued?

No. RA 26 governs the process by which a judicial reconstitution of Torrens Certificates of Title may
be done. Specifically, Sec. 2 thereof enumerates in the following order the competent and exclusive
sources from which reconstitution of an OCT may be based, viz:
(1) The owner’s duplicate of the certificate of title;
(2) The co-owner’s, mortgagee’s, or lessee’s duplicate of the certificate of title;
(3) A certified copy of the certificate of title, previously issued by the register of deeds or by a
legal custodian thereof;
(4) An authenticated copy of the decree of registration or patent, as the case may be, pursuant
to which the original certificate of title was issued;
(5) A document, on file in the registry of deeds, by which the property, the description of which
is given in said document, is mortgaged, leased or encumbered, or an authenticated copy of
said document showing that its original had been registered; and
(6) Any other document which, in the judgment of the court, is sufficient and proper basis for
reconstituting the lost or destroyed certificate of title.

RA 26 presupposes that the property whose title is sought to be reconstituted has already been
brought under the provisions of the Torrens System. (Republic vs. Dagondon, G.R. No. 210540, April
19, 2016, J. Perlas-Bernabe)

134. What is the Assurance Fund? When may a person recover from the Assurance Fund?

The Assurance Fund is a feature of property registration system which is intended to relieve innocent
persons from the harshness of the doctrine that a certificate is conclusive evidence of an indefeasible
title to land. A person may bring an action for the recovery of damages to be paid out of the
 Assurance Fund, provided the following conditions under Sec. 95 of PD 1529 (Property Registration
Decree) are met:
(1) the individual must sustain loss or damage, or the individual is deprived of land or any estate
or interest;
(2) The individual must not be negligent;
(3) The loss, damage, or deprivation is the consequence of either (a) fraudulent registration
under the Torrens system after the land’s original registration, or (b) any error, omission,
mistake, or misdescription in any certificate of title or in any entry or memorandum in the
registration book; and
(4) The individual must be barred or otherwise precluded under the provision of any law from
bringing an action for the recovery of such land or the estate or interest therein.

An action for compensation against the Assurance Fund is a separate and distinct remedy, apart from
review of decree of registration or reconveyance of title, which can be availed of when there is an
unjust deprivation of property. It is a condition sine qua non that the person who brings an action for
damages against the assurance fund be the registered owner, and, as to holders of transfer
certificates of title, that they be innocent purchasers in good faith and for value. If such action is
brought to recover for loss or damage or for deprivation of land or of any estate or interest therein
arising wholly through fraud, negligence, omission, mistake or misfeasance of the court personnel,
Register of Deeds (RD), his deputy, or other employees of the RD in the performance of their
respective duties, the action shall be brought against the RD of the province or city where the land is
situated and the National Treasurer as defendants. But if such action is brought to recover for loss or
damage or for deprivation of land or of any interest therein arising through fraud, negligence,
omission, mistake or misfeasance of person other than court personnel, the RD, his deputy or other
employees of the Registry, such action shall be brought against the RD, the National Treasurer and
other person or persons, as co-defendants. However, nothing in the Decree shall be construed to
deprive the plaintiff of any right of action which he may have against any person for such loss or
damage or deprivation without joining the National Treasurer as party defendant.

To recover against the Assurance Fund, however, it must appear that the execution against “such
defendants other than the National Treasurer and the Register of Deeds” is “returned unsatisfied in
whole and in part.” Only then shall the court, upon proper showing, order the amount of the
execution and costs, or so much thereof as remains unpaid, to be paid by the National Treasurer out
of the Assurance Fund. (Sps. Stilianopoulos vs. Register of Deeds for Legazpi City, G.R. No. 224678,
July 03, 2018, J. Perlas-Bernabe)

135. What is the prescriptive period in filing an action for compensation against the
Assurance Fund?

Sec. 102 of PD 1529 sets a six (6)-year prescriptive period “from the time the right to bring such
action first occurred” within which one may proceed to file an action for compensation against the
Assurance Fund. In actions for compensation against the Assurance Fund grounded on fraud,
registration of the innocent purchaser for value’s title should only be considered as a condition sine
qua non to file such an action and not as a form of constructive notice for the purpose of reckoning
prescription. The constructive notice rule on registration should not be made to apply to title holders
who have been unjustly deprived of their land without their negligence. As such, prescription, for
purposes of determining the right to bring an action against the Assurance Fund, should be reckoned
from the moment the innocent purchaser for value registers his or her title and upon actual
knowledge thereof of the original title holder/claimant. The registration of the innocent purchaser for
value’s title is a prerequisite for a claim against the Assurance Fund on the ground of fraud to
proceed, while actual knowledge of the registration is tantamount to the discovery of the fraud. (Sps.
Stilianopoulos vs. Register of Deeds for Legazpi City, supra.)
136. What is the remedy in case a property is wrongfully registered under another’s name?

(1) An ordinary action for reconveyance . The remedy of one who has established his ownership over
a property but which property was wrongfully or erroneously registered through fraud or mistake
in another’s name is, after the lapse of one year from the date of issuance of the questioned
decree is not to set aside the decree, it having become incontrovertible and no longer open to
review, but to institute an ordinary action in the ordinary court of justice for reconveyance.
(2) Action for Damages. If the property, however, has already passed into the hands of an innocent
purchaser for value, the remedy is to file an action for damages from the person who allegedly
registered the property through fraud.
(3) Action for Recovery against the Assurance Fund. If the person who allegedly registered the
property through fraud had become insolvent or if the action is barred by prescription, the
remedy is to file an action for recovery against the Assurance Fund under Sec. 95 of PD 1529
within a period of six years from the time the right to bring such action accrues.

Notwithstanding the indefeasibility of the Torrens title, the registered owner may still be compelled to
reconvey the registered property to its true owner. The rationale for the rule is that reconveyance
does not set aside or re-subject to review the findings of fact of the Bureau of Lands. In an action for
reconveyance, the decree of registration is respected as incontrovertible. What is sought instead is
the transfer of the property or its title which has been wrongfully or erroneously registered in another
person’s name, to its rightful or legal owner, or to the one with a better right. (Naval vs. CA, G.R. No.
167412, February 22, 2006)

TORTS AND DAMAGES

137. How should the Registered-Owner Rule and the rule on Employer’s Vicarious Liability
under Article 2180 of the Civil Code be harmonized in cases where both rules apply?

In cases where both the registered-owner rule and Article 2180 apply, the plaintiff may first prove
the employer’s ownership of the vehicle involved in a mishap by presenting the vehicle’s registration
in evidence. Thereafter, a disputable presumption that the requirements for an employer’s liability
under Article 2180 of the Civil Code have been satisfied will arise. The burden of evidence then shifts
to the defendant to show that no liability under Article 2180 has ensued. (Caravan Travel and Tours
International, Inc. vs. Abejar, G.R. No. 170631, February 10, 2016)

138. On September 8, 2011, a vehicle collision between a truck and a passenger van
happened in North Luzon Expressway (NLEX), resulting in the death of all the passengers
in the van. An action for damages based on quasi-delict was filed against the driver,
Badong, as well as the operator and registered owner of the truck, Zenaida. Zenaida
interposed that it is not the actual owner of the truck and contended that the children
had no cause of action against it because on September 7, 2011, it sold the truck to MMO
Trucking owned by Carmina. The latter being the alleged owner at the time of the
collision, Zenaida filed a Third Party Complaint against Carmina. Is the contention of
Zenaida tenable?

No. Zenaida as the operator on record of the truck is liable to the heirs of the victims of the mishap.
Zenaida cannot point fingers at the alleged real owner to exculpate itself from vicarious liability under
Art. 2180 of the Civil Code, which states that the obligation imposed by Art. 2176 is demandable not
only for one’s own acts or omissions, but also for those of persons for whom one is responsible.
Employers shall be liable for the damages caused by their employees and household helpers acting
within the scope of their assigned tasks, even though the former are not engaged in any business or
industry. Regardless of whoever Zenaida claims to be the actual owner of the truck by reason of a
 contract of sale, it is nevertheless primarily liable for the damages or injury caused by the truck
registered under his name. (Orix Metro Leasing and Finance Corporation vs. Mangalinao, G.R. No.
174089, January 25, 2012)

139. What is the doctrine of res ipsa loquitur? When is it applied?

Res ipsa loquitur literally means “the thing or the transaction speaks for itself.” It is a maxim for the
rule that the fact of the occurrence of an injury, taken with the surrounding circumstances, may
permit an inference or raise a presumption of negligence, or make out a plaintiff's prima facie case,
and present a question of fact for defendant to meet with an explanation. For the doctrine to apply,
the following requirements must be shown to exist, namely:
(1) The accident is of a kind that ordinarily does not occur in the absence of someone’s
negligence;
(2) It is caused by an instrumentality within the exclusive control of the defendant or
defendants; and
(3) The possibility of contributing conduct that would make the plaintiff responsible is eliminated.

However, res ipsa loquitur is not a rule of substantive law and does not constitute an independent or
separate ground for liability. Instead, it is considered as merely evidentiary, a mode of proof, or a
mere procedural convenience, since it furnishes a substitute for, and relieves a plaintiff of, the burden
of producing a specific proof of negligence. (Tan vs. Jam Transit, Inc., G.R. No. 183198, November
25, 2009)

140. What is the doctrine of last clear chance? When is it applied?

The doctrine of last clear chance provides that where both parties are negligent but the negligent act
of one is appreciably later in point of time than that of the other, or where it is impossible to
determine whose fault or negligence brought about the occurrence of the incident, the one who had
the last clear opportunity to avoid the impending harm but failed to do so, is chargeable with the
consequences arising therefrom. Stated differently, the rule is that the antecedent negligence of a
person does not preclude recovery of damages caused by the supervening negligence of the latter,
who had the last fair chance to prevent the impending harm by the exercise of due diligence.
(Philippine National Railways vs. Vizcara, G.R. No. 190022, February 15, 2012)

141. A complaint for damages was filed by Adworld against Transworld. Adworld is an
owner of a billboard structure which was misaligned and its foundation impaired when
the adjacent billboard structure owned by Transworld collapsed and crashed against it.
Transworld averred that the collapse of its billboard structure was due to extraordinarily
strong winds that occurred instantly and unexpectedly. Transworld filed a Third-Party
Complaint against Ruks, the company which built the collapsed billboard structure in the
former’s favor. It was alleged therein that the structure constructed by Ruks had a weak
and poor foundation not suited for billboards, thus, prone to collapse, and as such, Ruks
should ultimately be held liable for the damages caused to Adworld’s billboard structure.
Ruks denied liability for the damages caused by its collapse and contended that when
Transworld hired its services, there was already an existing foundation for the billboard
and that it merely finished the structure according to the terms and conditions of its
contract with the latter.

(a) Are Transworld and Ruks guilty of negligence?

Yes. Negligence is the omission to do something which a reasonable man, guided by those
considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of
something which a prudent and reasonable man would not do. It is the failure to observe for the
 protection of the interest of another person that degree of care, precaution, and vigilance which
the circumstances justly demand, whereby such other person suffers injury.

Here, both Transworld and Ruks were fully aware that the foundation for the former’s billboard
was weak; yet, neither of them took any positive step to reinforce the same. They merely relied
on each other’s word that repairs would be done to such foundation, but none was done at all.
Clearly, this circumstance shows that both Transworld and Ruks are guilty of negligence in the
construction of the former’s billboard, and perforce, should be held liable for its collapse and the
resulting damage to Adworld’s billboard structure.

(b) What is the nature of their liability as joint tortfeasors?

As joint tortfeasors, they are solidarily liable to Adworld. Under Art. 2194 of the Civil Code, joint
tortfeasors are solidarily liable for the resulting damage. Where several causes producing an
injury are concurrent and each is an efficient cause without which the injury would not have
happened, the injury may be attributed to all or any of the causes and recovery may be had
against any or all of the responsible persons although under the circumstances of the case, it
may appear that one of them was more culpable, and that the duty owed by them to the injured
person was not same. No actor’s negligence ceases to be a proximate cause merely because it
does not exceed the negligence of other actors. Each wrongdoer is responsible for the entire
result and is liable as though his acts were the sole cause of the injury. There is no contribution
between joint tortfeasors whose liability is solidary since both of them are liable for the total
damage. Where the concurrent or successive negligent acts or omissions of two or more persons,
although acting independently, are in combination the direct and proximate cause of a single
injury to a third person, it is impossible to determine in what proportion each contributed to the
injury and either of them is responsible for the whole injury. (Ruks Konsult and Construction vs.
Adworld Sign and Advertising, G.R. No. 204866, January 21, 2015, J. Perlas-Bernabe)