08 UP Bar Reviewer 2013 Civil Law PDF

PERSONS & FAMILY RELATIONS
Persons and Personality ..... 10

CAPACITY TO ACT .............................................. 10
Effect and Application of CIVIL PERSONALITY ................................................. 10
Laws ........................................ 2 RESTRICTIONS ON CAPACITY TO ACT ........................... 10
WHEN LAWS TAKE EFFECT ................................. 2 DOMICILE AND RESIDENCE OF PERSON ........... 13
FOR NATURAL PERSONS .......................................... 13
IGNORANCE OF THE LAW .................................. 2 FOR JURIDICAL PERSONS ......................................... 13
DOMICILE VS. RESIDENCE ......................................... 13
RETROACTIVITY OF LAWS .................................. 2 REQUISITES OF DOMICILE ......................................... 13
KINDS OF DOMICILE ................................................ 13
ACTS CONTRARY TO LAW ................................... 2
WAIVER OF RIGHTS ............................................ 2 Family Code ..........................13

REPEAL OF LAWS ............................................... 2
TWO KINDS OF REPEAL OF LAW ................................... 2 Marriage ...............................13
REQUISITES ....................................................... 13
JUDICIAL DECISIONS .......................................... 2 NATURE OF MARRIAGE ............................................ 13
KINDS OF REQUISITES ............................................. 13
DUTY TO RENDER JUDGMENT ............................ 3 EFFECT OF ABSENCE OF REQUISITES ........................... 13
ESSENTIAL REQUISITES ............................................ 13
PRESUMPTION AND
APPLICABILITY OF CUSTOM ............................... 3
EFFECT OF MARRIAGES CELEBRATED
LEGAL PERIODS .................................................. 3 ABROAD AND FOREIGN DIVORCE ..................... 16
MARRIAGES CELEBRATED ABROAD ............................. 16
POLICY ON LAST DAY BEING A LEGAL HOLIDAY/SUNDAY ... 3
PROOF OF FOREIGN MARRIAGE.................................. 16
FOREIGN DIVORCES ................................................ 16
APPLICABILITY OF PENAL LAWS ........................ 3
EXEMPTIONS UNDER INTERNATIONAL LAW (THEORY OF
EXTRATERRITORIALITY) ............................................ 3 VOID AND VOIDABLE MARRIAGES .................... 16
PRESUMPTION OF MARRIAGE .................................... 16
VOID MARRIAGES ................................................... 17
CONFLICT OF LAWS ............................................ 3
ACTION OR DEFENSE OF NULLITY .............................. 20
CONFLICT OF LAWS/ PRIVATE INTERNATIONAL LAW ........ 3
ANNULLABLE MARRIAGE .......................................... 21
SOURCES ............................................................... 3
EFFECT OF PENDING ACTIONS/DECREE ...................... 24
EXAMPLES OF CONFLICT OF LAW
EFFECTS OF NULLITY .............................................. 24
RULES IN THE PHILIPPINES......................................... 3
RULE ON PROPERTY ................................................. 4
RULE ON SUCCESSION............................................... 4
RULE ON EXTRINSIC VALIDITY OF CONTRACTS ................ 5
Legal Separation .................24
GROUNDS FOR LEGAL SEPARATION................ 24
ACTS OF VIOLENCE ACCORDING TO RA 9262 ............... 25
SPECIAL CONFLICT OF LAW RULES .................... 5
MARRIAGE ............................................................. 6
DIVORCE AND SEPARATION ........................................ 8
DEFENSES ........................................................ 26
GROUNDS FOR DENYING LEGAL SEPARATION .............. 26
ANNULMENT AND DECLARATION OF NULLITY ................. 8
COOLING-OFF PERIOD
Human Relations .................. 8 AND RECONCILIATION EFFORTS...................... 26
ABUSE OF RIGHT ................................................ 8
CONFESSION OF JUDGMENT ............................ 26
ACTS CONTRARY TO LAW ................................... 9
EFFECTS OF FILING PETITION .......................... 26
ACTS CONTRA BONUS MORES ........................... 9
EFFECTS OF PENDENCY ................................... 26
PRINCIPLE OF UNJUST ENRICHMENT................. 9
EFFECTS OF LEGAL SEPARATION..................... 26
THE FAMILY AS AN INSTITUTION ..................... 40
RECONCILIATION ............................................. 27 ASPECTS OF FAMILY RELATIONS ............................... 40
HOW DONE ........................................................... 27 FAMILY RELATIONS INCLUDE ................................... 40
EFFECTS OF RECONCILIATION ................................... 27 EXCEPTIONS TO THE GENERAL RULE – CANNOT BE SUBJECT
OF COMPROMISE ................................................... 40
ANNEX TO VOID AND VOIDABLE
MARRIAGES AND LEGAL SEPARATION ............ 27 THE FAMILY HOME .......................................... 40
GROUNDS ............................................................ 27 CONSTITUTED BY .................................................. 40
EFFECTS OF FILING / PENDING DECREE ....................... 27 INCLUDES ............................................................ 41
EFFECTS OF AFFIDAVIT OF REAPPEARANCE, JUDICIAL GUIDELINES .......................................................... 41
DECLARATION OF NULLITY, ANNULMENT AND LEGAL BENEFICIARIES OF THE FAMILY HOME ......................... 41
SEPARATION ........................................................ 28 REQUISITES TO BE A BENEFICIARY .............................. 41
REQUIREMENTS FOR THE SALE, ALIENATION, DONATION,
ASSIGNMENT, OR ENCUMBRANCE OF THE FAMILY HOME . 41
Rights and Obligations REQUISITES FOR CREDITOR TO AVAIL OF THE RIGHT UNDER
between ARTICLE 160 ......................................................... 41
Husband and Wife .............. 28 Paternity and Filiation .........42

ESSENTIAL OBLIGATIONS ................................ 28 KINDS OF FILIATION ........................................ 42
FAMILY DOMICILE ............................................ 28
LEGITIMATE CHILDREN .................................... 42
WHO ARE LEGITIMATE CHILDREN .............................. 42
SUPPORT .......................................................... 29
WHO ARE ILLEGITIMATE CHILDREN ............................ 42
IMPUGNING LEGITIMACY ......................................... 42
MANAGEMENT OF HOUSEHOLD ....................... 29
ACTION FOR IMPUGNING LEGITIMACY ........................ 43
EFFECT OF NEGLECT OF DUTY .......................... 29
PROOF OF FILIATION........................................ 43
EXERCISE OF PROFESSION ............................... 29 ACTION FOR CLAIMING FILIATION .............................. 44
RIGHTS OF LEGITIMATE CHILDREN ............................ 44
Property Relations of the ILLEGITIMATE CHILDREN ................................. 44

ACTION FOR CLAIMING FILIATION .............................. 44
Spouses ................................29 RIGHTS OF ILLEGITIMATE CHILD ................................ 45
MARRIAGE SETTLEMENTS ............................... 29
MARRIAGE SETTLEMENT RULES ................................ 29
LEGITIMATED CHILDREN.................................. 45
TO BE CAPABLE OF LEGITIMATION ............................. 45
PROCEDURE ........................................................ 45
DONATIONS BY REASON OF MARRIAGE .......... 30
GROUNDS FOR IMPUGNING LEGITIMATION ................. 45
DISTINGUISHED FROM ORDINARY DONATIONS .............. 31
RIGHTS ............................................................... 45
IMPUGNING LEGITIMATION ...................................... 45
ABSOLUTE COMMUNITY OF PROPERTY
AND CONJUGAL PARTNERSHIP OF GAINS ........ 31
COMPARISON OF ACP AND CPG .................................. 31 Adoption.............................. 46
SEPARATION OF PROPERTY OF THE SPOUSES RA 8552 – DOMESTIC ADOPTION LAW ............. 46
AND ADMINISTRATION OF COMMON PROPERTY WHO CAN ADOPT ................................................... 46
BY ONE SPOUSE DURING THE MARRIAGE ........ 38 WHO CAN BE ADOPTED ........................................... 46
JUDICIAL SEPARATION OF PROPERTY MAY EITHER BE PRE-ADOPTION PROCEDURES .................................. 47
VOLUNTARY OR FOR SUFFICIENT CAUSE ..................... 38 ADOPTION PROCEDURES......................................... 47
WHO MAY NOT ADOPT/ BE ADOPTED ......................... 48
PROPERTY REGIME OF UNIONS RIGHTS OF AN ADOPTED CHILD ................................. 48
WITHOUT MARRIAGE ....................................... 39 RESCISSION OF ADOPTION ....................................... 48
RECTIFICATION OF SIMULATED BIRTH......................... 49
The Family........................... 40
RA 8043 – THE LAW ON INTER-COUNTRY
ADOPTION ........................................................ 49 EFFECT OF PARENTAL AUTHORITY UPON THE
INTER-COUNTRY ADOPTION ..................................... 49 PERSONS OF THE CHILDREN............................ 54
WHO CAN ADOPT ................................................... 49 RIGHTS OF PARENTS UPON
WHO CAN BE ADOPTED ........................................... 50 THE PERSON OF THE CHILDREN ................................ 54
DUTIES OF PARENTS UPON
Support ............................... 50 THE PERSON OF THE CHILDREN ................................ 54

SUBSTITUTE REPRESENTATION ................................ 54
WHAT IT COMPRISES ....................................... 50 COURT ASSISTANCE IN THE DISCIPLINE OF THE CHILD .... 54
WHO ARE OBLIGED ........................................... 50 EFFECTS OF PARENTAL AUTHORITY UPON THE

TO SUPPORT EACH OTHER ....................................... 50 PROPERTY OF THE CHILDREN.......................... 54
PROPERTIES ANSWERABLE FOR SUPPORT ....................51 PROCEDURE IN THE APPROVAL OF THE PARENT’S BOND 54
ORDER OF SUPPORT ................................................51 OWNERSHIP OF CHILD’S ACQUISITIONS ...................... 55
STRANGER GIVES SUPPORT.......................................51 PARENT’S USUFRUCT ............................................ 55
PERSON OBLIGED REFUSES OR FAILS TO GIVE SUPPORT ..51 WHEN PARENTS ENTRUST THE MANAGEMENT OF THEIR
CONTRACTUAL SUPPORT OR THAT GIVEN BY WILL ..........51 PROPERTIES TO A CHILD ......................................... 55
SUPPORT DURING MARRIAGE LITIGATION ......51 SUSPENSION OR TERMINATION OF PARENTAL

AUTHORITY ...................................................... 55
AMOUNT .......................................................... 52
RA 7610 – CHILD ABUSE LAW ........................... 55
WHEN DEMANDABLE ....................................... 52
PARENTAL AUTHORITY PERMANENTLY TERMINATES ..... 55
TERMINATION OF PARENTAL AUTHORITY WHICH CAN BE
OPTIONS .......................................................... 52
REVIVED BY FINAL JUDGMENT .................................. 55
GROUNDS FOR SUSPENSION OF PARENTAL AUTHORITY . 55
ATTACHMENT .................................................. 52
SCOPE OF SUBSTITUTE AND
SPECIAL PARENTAL AUTHORITY ................................ 55
Parental Authority ...............52 RA 7610 – CHILD ABUSE LAW .................................. 55
GENERAL PROVISIONS ..................................... 52

PARENTAL AUTHORITY INCLUDES ............................. 52
Emancipation, as amended
PARENTAL AUTHORITY AND RESPONSIBILITY MAY NOT BE by RA 6809 ......................... 55
RENOUNCED OR TRANSFERRED EXCEPT IN THE CASES
AUTHORIZED BY LAW .............................................. 52
CASES WHEN PARENTAL AUTHORITY AND RESPONSIBILITY
MAY BE TRANSFERRED OR RENOUNCED...................... 52 Summary Judicial
RULES AS TO THE EXERCISE OF PARENTAL AUTHORITY ... 52
CHARACTERISTICS OF PARENTAL AUTHORITY............... 52
Proceedings in the Family
PARENTAL PREFERENCE RULE .................................. 52
WHO EXERCISES AUTHORITY IN CASES OF DEATH,
Law ...................................... 56
PROCEDURAL RULES PROVIDED FOR
ABSENCE, UNSUITABILITY, REMARRIAGE, OR SEPARATION
IN THIS TITLE SHALL APPLY TO ........................ 56
OF PARENTS ......................................................... 52
DESCENDANT’S PRIVILEGE OF REFUSAL TO TESTIFY ....... 53
TENDER YEARS PRESUMPTION ................................. 53
SEPARATION IN FACT ...................................... 56
SEPARATE CLAIM FOR DAMAGES............................... 56
JURISDICTION ....................................................... 56
SUBSTITUTE AND SPECIAL PARENTAL NOTIFICATION TO OTHER SPOUSE ............................. 56
AUTHORITY ...................................................... 53 PROCEDURE ......................................................... 56
PERSONS EXERCISING SUBSTITUTE PARENTAL AUTHORITY
WHEN APPEARANCE OF SPOUSES REQUIRED ............... 56
IN DEFAULT OF PARENTS OR JUDICIALLY APPOINTED
NATURE OF JUDGMENT ........................................... 56
GUARDIAN ........................................................... 53
RULES APPLICABLE FOR ADMINISTERING
SUBSTITUTE PARENTAL AUTHORITY OVER DISADVANTAGED
OR ENCUMBERING SEPARATE PROPERTY OF SPOUSE .... 56
CHILDREN ............................................................ 53
PERSONS EXERCISING SPECIAL PARENTAL AUTHORITY ... 53
LIABILITY OF THOSE EXERCISING SPECIAL PARENTAL
INCIDENTS INVOLVING
AUTHORITY OVER THE CHILD ................................... 53
PARENTAL AUTHORITY .................................... 57
PROCEDURE ......................................................... 57 PROPERTY
Retroactive Effect ................ 57 Characteristics .................... 66

RETROACTIVE EFFECT ...................................... 57
INVALIDITY OF OTHER PROVISIONS ................. 57

Classification ....................... 66
HIDDEN TREASURE .......................................... 66
Funeral ................................. 57
NATURE OF FUNERAL ............................................. 57 BASED ON MOBILITY –
GUIDELINES IN MAKING FUNERAL ARRANGEMENTS ....... 58 IMMOVABLE OR MOVABLE ............................... 66
REAL OR IMMOVABLE PROPERTY .............................. 66
PERSONAL OR MOVABLE ........................................ 68
Use of Surnames ................ 58 IMPORTANCE AND SIGNIFICANCE OF CLASSIFICATION
SURNAMES OF CHILDREN ................................ 58 UNDER THE CIVIL CODE ........................................... 68
WIFE AFTER AND DURING MARRIAGE ............. 58 BASED ON OWNERSHIP ................................... 69

PUBLIC DOMINION ................................................. 69
CONFUSION AND CHANGE OF NAMES ............. 58 PRIVATE OWNERSHIP ............................................. 70
Absence ............................... 59 BASED ON CONSUMABILITY............................. 70

CONSUMABLE ....................................................... 70
PROVISIONAL MEASURES NON-CONSUMABLE ............................................... 70
IN CASE OF ABSENCE ....................................... 59
PRESUMPTION IN THE RULES OF COURT ...................... 59 SUSCEPTIBILITY TO SUBSTITUTION ................. 70
REQUISITES ......................................................... 60 FUNGIBLES .......................................................... 70
WHO MAY BE APPOINTED AS REPRESENTATIVE ............. 60 NON-FUNGIBLES .................................................. 70
DECLARATION OF ABSENCE ............................. 60 BASED ON THE CONSTITUTION ......................... 71

WHEN MAY A DECLARATION OF ABSENCE BE DECLARED . 60
WHO MAY ASK FOR A DECLARATION OF ABSENCE ......... 60
OTHER CLASSIFICATIONS ................................. 71
BY THEIR PHYSICAL EXISTENCE .................................. 71
ADMINISTRATION OF THE BY THEIR AUTONOMY OR DEPENDENCE ....................... 71
PROPERTY OF THE ABSENTEE.......................... 60 BY SUSCEPTIBILITY TO DETERIORATION ....................... 71
WHO MAY ADMINISTER THE PROPERTY ...................... 60 BY REASON OF THEIR SUSCEPTIBILITY TO DIVISION......... 71
WHEN WILL THE ADMINISTRATION OF PROPERTY CEASE ..61 BY REASON OF DESIGNATION .................................... 71
EXISTENCE IN POINT OF TIME .................................... 71
PRESUMPTION OF DEATH .................................61
EXTRAORDINARY ABSENCE .......................................61
Ownership ............................. 71
Civil Registrar....................... 61 DEFINITION ....................................................... 71
RA 9048 AS AMENDED BY RA 10172 ................. 62
GROUNDS ............................................................ 63 RIGHT IN GENERAL ........................................... 71
RIGHTS INCLUDED IN OWNERSHIP .............................. 71
RULE 108, RULES OF COURT ............................ 63 BUNDLE OF RIGHTS ................................................. 71
CANCELLATION OR CORRECTION OF ENTRIES PROTECTING PROPERTY ................................... 71

IN THE CIVIL REGISTRY .................................... 63 BASIC DISTINCTIONS ............................................... 71
WHO MAY FILE PETITION ......................................... 64 REMEDIES.............................................................72
ENTRIES SUBJECT TO CANCELLATION ......................... 64 RIGHT TO RECOVER POSSESSION................................72
LIMITATIONS ON OWNERSHIP ..........................72

LIMITATIONS ON THE RIGHTS OF OWNERSHIP
PROVIDED BY LAW .................................................72
LAW ................................................................... 83
CONTRACTS ......................................................... 83
Accession ............................. 74 SUCCESSION......................................................... 84
CLASSIFICATION OF ACCESSION ...................... 74 TESTAMENTARY DISPOSITION
WITH RESPECT TO IMMOVABLES ................................ 74 OR DONATION INTER VIVOS ..................................... 84
WITH RESPECT TO MOVABLE PROPERTY ...................... 79 BY FORTUITOUS EVENT OR BY CHANCE ....................... 84
BY OCCUPANCY ..................................................... 84
BY ASSOCIATIONS AND
Quieting of Title or Interest in SOCIETIES WITH SECRET ARTICLES ............................ 84
and Removal or Prevention of RIGHT OF CO-OWNERS..................................... 84

RIGHT TO THE SHARE IN THE BENEFITS
Cloud over Title to or Interest AS WELL AS CHARGES ............................................ 84
RIGHT TO USE THE THING OWNED IN COMMON ............. 84
in Real Property .................. 81 RIGHT TO BRING AN ACTION IN EJECTMENT ................. 84
RIGHT TO COMPEL OTHER CO-OWNERS
IN GENERAL...................................................... 81 TO CONTRIBUTE TO THE EXPENSES
OF PRESERVATION AND TO THE TAXES ....................... 84
PURPOSE .......................................................... 81 RIGHT TO REPAIR .................................................. 84
RIGHT TO OPPOSE ALTERATIONS............................... 84
NATURE: QUASI IN REM ................................... 81 RIGHT TO FULL OWNERSHIP OF HIS PART
AND OF THE FRUITS AND BENEFITS
JUSTIFICATIONS FOR QUIETING OF TITLE ........ 81 PERTAINING THERETO ............................................ 85
RIGHT TO PARTITION ............................................. 85
THE ACTION TO RIGHT TO REDEMPTION........................................... 85
QUIET TITLE DOES NOT APPLY ......................... 81 RULES................................................................. 85
REQUIREMENT ................................................. 81 TERMINATION/EXTINGUISHMENT ................... 85

REQUISITES OF AN ACTION TO QUIET TITLE .................. 81 TOTAL DESTRUCTION OF THING OR
THERE IS A CLOUD ON TITLE TO REAL PROPERTY OR ANY LOSS OF THE PROPERTY CO-OWNED .......................... 85
INTEREST TO REAL PROPERTY .................................. 81 MERGER OF ALL INTERESTS IN ONE PERSON ................ 85
THE PLAINTIFF MUST HAVE LEGAL OR EQUITABLE TITLE TO, ACQUISITIVE PRESCRIPTION..................................... 85
OR INTEREST IN THE REAL PROPERTY ......................... 82 PARTITION OR DIVISION .......................................... 86
PLAINTIFF MUST RETURN THE BENEFITS RECEIVED FROM
THE DEFENDANT ................................................... 82
Possession........................... 86
QUIETING OF TITLE V. REMOVAL OF CLOUD..... 82 DEFINITION ...................................................... 86
REQUISITES OF AN ACTION TO PREVENT A CLOUD ......... 82
CONCEPT OF POSSESSION ............................... 86
PRESCRIPTION/NON-PRESCRIPTION
OF ACTION ........................................................ 82 CHARACTERISTICS ........................................... 86
PRESCRIPTION OF ACTION ....................................... 82 ESSENTIAL REQUISITES OF POSSESSION ..................... 86
DEGREES OF POSSESSION........................................ 86
CASES OF POSSESSION ........................................... 87
Co-ownership ..................... 82
DEFINITION ...................................................... 82 ACQUISITION OF POSSESSION ......................... 88
WAYS OF ACQUIRING POSSESSION............................. 88
REQUISITES ...................................................... 82 BY WHOM MAY POSSESSION BE ACQUIRED .................. 89
WHAT DO NOT AFFECT POSSESSION .......................... 89
WHAT GOVERNS CO-OWNERSHIP .................... 82 RULES TO SOLVE CONFLICTS OF POSSESSION ............... 89
CHARACTERISTICS OF CO-OWNERSHIP ........... 82 EFFECTS OF POSSESSION ................................ 90

THERE ARE IDEAL SHARES DEFINED RIGHT TO BE PROTECTED IN HIS POSSESSION ............... 90
BUT NOT PHYSICALLY IDENTIFIED .............................. 83 ENTITLEMENT TO FRUITS –
POSSESSOR IN GOOD FAITH/BAD FAITH...................... 90
SOURCES OF CO-OWNERSHIP .......................... 83 REIMBURSEMENT FOR EXPENSES—
POSSESSOR IN GOOD FAITH/BAD FAITH .......................91 USUFRUCT OVER FRUIT BEARING TREES
AND SPROUT AND WOODLANDS .............................. 101
LOSS OR UNLAWFUL DEPRIVATION USUFRUCT ON A RIGHT OF ACTION ........................... 101
OF A MOVABLE ................................................. 93 USUFRUCT ON MORTGAGED PROPERTY ..................... 101
POSSESSION OF MOVABLE USUFRUCT OVER AN ENTIRE PATRIMONY ................... 101
ACQUIRED IN GOOD FAITH (IN CONCEPT OF OWNER) USUFRUCT OVER DETERIORABLE PROPERTY ............... 101
IS EQUIVALENT TO TITLE .......................................... 93 USUFRUCT OVER CONSUMABLE PROPERTY ................ 101
PERIOD TO RECOVER .............................................. 93
FINDER OF LOST MOVABLE ....................................... 93 RIGHTS OF THE OWNER .................................. 101
DISTINGUISHED FROM VOIDABLE TITLE ....................... 93
EXTINGUISHMENT/TERMINATION.................. 102
EFFECTS OF POSSESSION................................. 93 DEATH OF USUFRUCTUARY ..................................... 102
EFFECTS OF POSSESSION IN THE CONCEPT OF OWNER .... 93 EXPIRATION OF PERIOD OR FULFILLMENT
OF RESOLUTORY CONDITION IMPOSED ON
RIGHTS OF POSSESSOR.................................... 94 USUFRUCT BY PERSON
PRESUMPTION IN FAVOR OF THE POSSESSOR— CONSTITUTING THE USUFRUCT ................................ 102
FOR ACQUISITIVE PRESCRIPTION ............................... 94 MERGER OF RIGHTS OF USUFRUCT
AND NAKED OWNERSHIP IN ONE PERSON .................. 102
RENUNCIATION OF USUFRUCT ................................. 102
LOSS/TERMINATION OF
EXTINCTION OR LOSS OF PROPERTY.......................... 102
POSSESSION..................................................... 94
TERMINATION OF RIGHT OF PERSON
ABANDONMENT .................................................... 94
CONSTITUTING THE USUFRUCT ............................... 103
ASSIGNMENT, EITHER ONEROUS OR GRATUITOUS ......... 94
PRESCRIPTION ..................................................... 103
POSSESSION BY ANOTHER;
IF POSSESSION HAS LASTED LONGER
THAN ONE YEAR; CONDITIONS NOT AFFECTING USUFRUCT ...... 103
REAL RIGHT OF POSSESSION EXPROPRIATION OF THING IN USUFRUCT ................... 103
NOT LOST AFTER 10 YEARS ..................................... 94 BAD USE OF THING IN USUFRUCT ............................. 103
RULES FOR LOSS OF MOVABLES ................................ 95
Easement ........................... 103

Usufruct............................... 95
CONCEPT .......................................................... 95 CHARACTERISTICS .......................................... 103
ESSENTIAL FEATURES............................................ 103
OBJECTS OF USUFRUCT.................................... 95
CLASSIFICATION .............................................104
CHARACTERISTICS ........................................... 95 AS TO RECIPIENT OF BENEFITS................................. 104
NATURAL CHARACTERISTICS .................................... 95 AS TO CAUSE OR ORIGIN......................................... 104
AS TO ITS EXERCISE............................................... 104
CLASSIFICATION ............................................... 95 AS INDICATION OF ITS EXISTENCE ............................. 105
BY ORIGIN ............................................................ 95 BY THE OBJECT OR OBLIGATION IMPOSED................... 105
BY PERSON ENJOYING RIGHT OF USUFRUCT ................. 96 GENERAL RULES .................................................. 105
BY OBJECT OF USUFRUCT ......................................... 96
BY THE EXTENT OF THE USUFRUCT ............................. 96 RELEVANCE OF CLASSIFICATIONS .................. 105
BY THE TERMS OF THE USUFRUCT .............................. 96 DETERMINES WHAT EASEMENTS
CAN BE ACQUIRED BY PRESCRIPTION ........................ 105
RIGHTS AND OBLIGATIONS DETERMINES WHAT EASEMENTS
OF USUFRUCTUARY ......................................... 97 CAN BE ACQUIRED BY TITLE .................................... 105
RIGHTS................................................................ 97 DETERMINES HOW TO COMPUTE
OBLIGATIONS........................................................ 98 THE PRESCRIPTIVE PERIOD ..................................... 105
DETERMINES HOW EASEMENT
SPECIAL CASES OF USUFRUCT ....................... 100 IS LOST BY PRESCRIPTION ...................................... 105
USUFRUCT OVER A PENSION
OR PERIODICAL INCOME ........................................ 100 CREATION ....................................................... 105
USUFRUCT OF PROPERTY OWNED IN COMMON ........... 100 BY TITLE ............................................................. 105
USUFRUCT CONSTITUTED ON A FLOCK BY LAW (LEGAL EASEMENTS) .................................. 106
OR HERD OF LIVESTOCK ......................................... 101 BY WILL OF THE OWNERS (VOLUNTARY EASEMENTS) .... 106
BY PRESCRIPTION ................................................ 106
LIABILITY IN CASE OF NUISANCE .................... 115
LEGAL EASEMENTS ........................................ 106 WHO ARE LIABLE .................................................. 115
LAW GOVERNING LEGAL EASEMENTS ....................... 106 LIABILITY OF CREATOR OF NUISANCE ........................ 115
LIABILITY OF TRANSFEREES .................................... 115
NATURE OF LIABILITY ............................................ 115
VOLUNTARY EASEMENTS............................... 106
RIGHT TO RECOVER DAMAGES ................................. 115
NO PRESCRIPTION ................................................ 115
RIGHTS AND OBLIGATIONS OF OWNERS OF
DOMINANT AND SERVIENT ESTATES ............. 106 REGULATION OF NUISANCES .......................... 115
RIGHT OF DOMINANT ESTATE OWNER ....................... 106
PUBLIC NUISANCE ................................................ 115
OBLIGATIONS OF DOMINANT ESTATE OWNER ............. 106
PRIVATE NUISANCE ............................................... 116
RIGHT OF SERVIENT ESTATE OWNER ......................... 107
OBLIGATIONS OF SERVIENT ESTATE OWNER ................ 107
Modes of Acquiring
KINDS OF LEGAL EASEMENTS .........................107
NATURAL DRAINAGE ............................................. 107 Ownership .......................... 116
RIPARIAN BANKS .................................................. 107 MODES OF ACQUIRING OWNERSHIP............... 116
DRAINAGE OF BUILDINGS ....................................... 107
DAM .................................................................. 107 OCCUPATION.................................................... 117
DRAWING WATER ................................................ 108 REQUISITES.......................................................... 117
AQUEDUCT ......................................................... 108 KINDS ................................................................. 117
SLUICE GATE....................................................... 108 SPECIAL RULES ..................................................... 117
RIGHT OF WAY..................................................... 108
PARTY WALL ....................................................... 109 DONATION ...................................................... 118
LIGHT AND VIEW .................................................... 111 OTHER INSTANCES CONSIDERED AS DONATION ........... 118
INTERMEDIATE DISTANCES ..................................... 112 NATURE ............................................................. 118
NUISANCE ........................................................... 112 WHAT MAY BE DONATED ........................................ 118
LATERAL AND SUBJACENT SUPPORT ......................... 112 WHAT MAY NOT BE DONATED .................................. 118
KINDS OF DONATIONS ........................................... 118
MODES OF ACQUIRING EASEMENT ................. 112 FORMALITIES REQUIRED ........................................ 120
BY TITLE ............................................................. 112 QUALIFICATIONS OF DONOR, DONEE......................... 120
BY PRESCRIPTION ................................................. 112 EFFECTS OF DONATION/LIMITATIONS ........................121
VOID DONATIONS ................................................. 122
EXTINGUISHMENT OF EASEMENTS ................. 112 REVOCATION AND REDUCTION ................................ 122
MERGER ............................................................. 113
BY NON-USER FOR 10 YEARS................................... 113 TRADITION ...................................................... 127
EXTINGUISHMENT BY IMPOSSIBILITY OF USE ............... 113 CONCEPT ............................................................ 127
EXPIRATION OF THE TERM OR REQUISITES......................................................... 127
FULFILLMENT OF RESOLUTORY CONDITION ................ 113 PURPOSE............................................................ 127
RENUNCIATION OF THE OWNER KINDS ................................................................ 127
OF THE DOMINANT ESTATE..................................... 113
REDEMPTION AGREED UPON
BETWEEN THE OWNERS.......................................... 113 Prescription .........................127
OTHER CAUSES NOT MENTIONED IN NCC 631 .............. 113 DEFINITION ..................................................... 127
Nuisance.............................. 114 RATIONALE ..................................................... 127
NUISANCE V. TRESPASS .................................. 114 KINDS OF PRESCRIPTION................................ 127

ACQUISITIVE PRESCRIPTION.................................... 127
NUISANCE V. NEGLIGENCE .............................. 114 EXTINCTIVE PRESCRIPTION ..................................... 128
CLASSES .......................................................... 114 NO PRESCRIPTION APPLICABLE ..................... 128

ACCORDING TO NATURE ......................................... 114
BY OFFENDER ...................................................... 128
ACCORDING TO SCOPE OF INJURIOUS EFFECTS ............ 114
REGISTERED LANDS - PD 1529 ............................... 128
RIGHTS NOT EXTINGUISHED BY PRESCRIPTION ............ 128
DOCTRINE OF ATTRACTIVE NUISANCE............ 115 ACTION TO QUIET TITLE IF PLAINTIFF IS IN POSSESSION . 128
VOID CONTRACTS .................................................128
ACTION TO DEMAND PARTITION ...............................128
PROPERTY OF PUBLIC DOMINION..............................128 Nature and Effect of
PRESCRIPTION DISTINGUISHED
Obligations.......................... 137
FROM LACHES .................................................128 OBLIGATION TO GIVE ...................................... 137
A DETERMINATE OR SPECIFIC THING ......................... 137
AN INDETERMINATE OR GENERIC THING .................... 137
PRESCRIPTION OR LIMITATION OF ACTIONS ..129
TO RECOVER MOVABLES .........................................129
TO RECOVER IMMOVABLES......................................129
OBLIGATION TO DO OR NOT TO DO................. 138
OTHER ACTIONS ...................................................129
BREACH OF OBLIGATIONS .............................. 138
COMPLETE FAILURE TO PERFORM ............................ 138
OBLIGATIONS & CONTRACTS DEFAULT, DELAY, OR MORA.................................... 138
FRAUD (DOLO) IN THE
PERFORMANCE OF OBLIGATION .............................. 139
[Obligations] ...................... 132 NEGLIGENCE (CULPA) IN THE
PERFORMANCE OF OBLIGATION ............................... 140
DILIGENCE NORMALLY REQUIRED
Definition ............................ 132 IS ORDINARY DILIGENCE OR
DILIGENCE OF A GOOD FATHER OF A FAMILY;
EXCEPTIONS ....................................................... 140
Elements of EXTENT OF DAMAGES TO BE AWARDED ..................... 140

CONTRAVENTION OF THE TENOR OF OBLIGATION ......... 141
an Obligation .................... 132 LEGAL EXCUSE FOR BREACH OF OBLIGATION –
FORTUITOUS EVENT; REQUISITES ............................. 141
ELEMENTS OF AN OBLIGATION ....................... 132
REMEDIES AVAILABLE TO CREDITOR
Different Kinds IN CASE OF BREACH ........................................ 141
SPECIFIC PERFORMANCE ........................................ 141
of Prestations .................... 132 SUBSTITUTED PERFORMANCE BY A THIRD PERSON
OF ANOTHER’S OBLIGATION TO DELIVER
A GENERIC THING OR OF AN OBLIGATION TO DO,
Classification UNLESS IT IS PURELY PERSONAL ACT ........................ 141
RESCISSION (RESOLUTION IN
of Obligations ................... 132 RECIPROCAL OBLIGATIONS) .................................... 141
FROM THE VIEWPOINT OF “SANCTION” .......... 132 DAMAGES, IN ANY EVENT ....................................... 141
SUBSIDIARY REMEDIES OF CREDITORS ...................... 142
FROM THE VIEWPOINT OF SUBJECT MATTER.. 132 ACCION SUBROGATORIA ........................................ 142
ACCION PAULIANA ............................................... 142
FROM THE AFFIRMATIVENESS OR ACCION DIRECTA ................................................. 142
NEGATIVENESS OF THE OBLIGATION .............. 132
FROM THE VIEWPOINT OF Kinds of Civil Obligations .. 143

PERSONS OBLIGED.......................................... 132 PURE ............................................................... 143
CONDITIONAL ................................................. 143

Sources of Obligations ...... 132 SUSPENSIVE CONDITION ........................................ 143
SINGLE ACT OR OMISSION CAN GIVE RISE TO RESOLUTORY CONDITION ....................................... 143
DIFFERENT CAUSES OF ACTION ...................... 132 POTESTIVE – CASUAL OR MIXED............................... 143
OBLIGATIONS SUBJECT TO POTESTATIVE SUSPENSIVE
NATURAL OBLIGATIONS ................................. 132 CONDITIONS ARE VOID .......................................... 143
EFFECT OF THE HAPPENING OF SUSPENSIVE CONDITION;
EXTRA-CONTRACTUAL OBLIGATIONS ............. 133 RESOLUTORY CONDITION ...................................... 144
QUASI-CONTRACTS ............................................... 133 EFFECT OF LOSS OF SPECIFIC THING,
OTHER QUASI-CONTRACTS ..................................... 135 OR DETERIORATION OR IMPROVEMENT OF
QUASI-DELICTS .................................................... 136 SPECIFIC THING BEFORE FULFILLMENT
OF SUSPENSIVE CONDITION;
OR IN CASE OF ARESOLUTORY CONDITION LOSS OF DETERMINATE THING DUE OR
IN AN OBLIGATION TO DO OR NOT TO DO .................. 145 IMPOSSIBILITY OR
DIFFICULTY OF PERFORMANCE ...................... 155
OBLIGATIONS WITH A PERIOD OR TERM........ 145
SUSPENSIVE PERIOD ............................................ 146 CONDONATION OR REMISSION OF DEBT ........ 156
RESOLUTORY PERIOD ........................................... 146 EXPRESS – FORMALITY OF DONATION ....................... 156
DEFINITE OR INDEFINITE PERIOD ............................. 146 IMPLIED ............................................................. 156
ALTERNATIVE OR FACULTATIVE ..................... 147 CONFUSION..................................................... 156

DIFFERENCE BETWEEN ALTERNATIVE
AND FACULTATIVE OBLIGATIONS .............................. 147 COMPENSATION ............................................. 156
EFFECT OF LOSS OF SPECIFIC THINGS KINDS ............................................................... 157
OR IMPOSSIBILITY OF PERFORMANCE OF ALTERNATIVE, OBLIGATIONS NOT COMPENSABLE ............................ 158
THROUGH FAULT OF DEBTOR/CREDITOR OR
THROUGH FORTUITOUS EVENTS ............................... 147
NOVATION....................................................... 158
Joint and [Contracts] ......................... 160

Solidary Obligation ........... 148
JOINT (DIVISIBLE) OBLIGATION ...................... 148
PRESUMPTION OF JOINT OBLIGATION ....................... 148
Essential Requisites ......... 160
PRESUMPTION OF EQUAL DIVISION .......................... 148
EFFECT OF INSOLVENCY OF A JOINT DEBTOR .............. 148 CONSENT ........................................................ 160
CONCURRENCE OF OFFER AND ACCEPTANCE .............. 160
ACCEPTANCE ....................................................... 160
JOINT (INDIVISIBLE) OBLIGATION................... 149
LEGAL CAPACITY .................................................. 160
OBLIGATION CANNOT BE PERFORMED IN PARTS BUT
VICES OF CONSENT ............................................... 161
DEBTORS ARE BOUND JOINTLY ............................... 149
IN CASE OF FAILURE OF ONE OF THE JOINT DEBTORS TO
PERFORM HIS PART (SHARE), THERE IS DEFAULT BUT ONLY OBJECT ............................................................ 162
THE GUILTY DEBTOR SHALL DEFINITION ......................................................... 162
BE LIABLE FOR DAMAGES....................................... 149 REQUISITES......................................................... 162
SOLIDARY OBLIGATION .................................. 149 CAUSE ............................................................. 162

ANYONE OF THE SOLIDARY CREDITORS MAY COLLECT OR DEFINITION ........................................................ 162
DEMAND PAYMENT OF WHOLE OBLIGATION; THERE IS REQUISITES......................................................... 162
MUTUAL AGENCY AMONG SOLIDARY DEBTORS ........... 149 CAUSE IN ............................................................ 162
ANY OF THE SOLIDARY DEBTORS MAY BE REQUIRED TO PAY
THE WHOLE OBLIGATION; THERE IS MUTUAL GUARANTY
AMONG SOLIDARY DEBTORS .................................. 149 Kinds of Contracts ............ 163
CONSENSUAL .................................................. 163
DIVISIBLE AND INDIVISIBLE............................. 151
REAL ............................................................... 163
OBLIGATIONS WITH A PENAL CLAUSE ............ 151
FORMAL OR SOLEMN ...................................... 163
DONATIONS ........................................................ 163
PARTNERSHIP WHERE REAL
Extinguishment of PROPERTY IS CONTRIBUTED ................................... 163
ANTICHRESIS ...................................................... 164
Obligations......................... 153 AGENCY TO SELL REAL PROPERTY OR AN INTEREST
PAYMENT ........................................................ 153 THEREIN ............................................................ 164
DATION IN PAYMENT ............................................. 153 STIPULATION TO CHANGE INTEREST ......................... 164
FORM OF PAYMENT .............................................. 153 STIPULATION LIMITING COMMON CARRIER’S DUTY OF
EXTRAORDINARY INFLATION OR DEFLATION .............. 153 EXTRAORDINARY DILIGENCE
APPLICATION OF PAYMENT ..................................... 153 TO ORDINARY DILIGENCE ....................................... 164
TENDER OF PAYMENT AND CONSIGNATION ................. 153 CHATTEL MORTGAGE............................................. 164
SALE OF LARGE CATTLE ......................................... 164 CONTRACT OF SALE/CONTRACT TO SELL ...... 172
Formality ........................... 164 Parties to a

STATUTORY BASIS ......................................... 164 Contract of Sale ..................172
CAPACITY OF PARTIES ................................... 172
KINDS OF INCAPACITY ........................................... 172
Defective Contracts .......... 165 ABSOLUTE INCAPACITY ................................. 172

FOUR KINDS OF DEFECTIVE CONTRACTS ........165
RELATIVE INCAPACITY: MARRIED PERSONS .. 173
RESCISSIBLE CONTRACTS ...............................165
HUSBAND AND WIFE ............................................ 173
DIFFERENCE FROM RESCISSION (RESOLUTION) UNDER
ALIENAGE .......................................................... 173
ART. 1191 ...........................................................166
TRUSTEESHIP ..................................................... 173
VOIDABLE CONTRACTS ...................................166

SPECIAL DISQUALIFICATIONS ........................ 173
SPECIFIC INCAPACITY/ SPECIAL DISQUALIFICATIONS ... 173
UNENFORCEABLE CONTRACTS .......................166
VOID CONTRACTS ............................................ 167 EFFECTS OF INCAPACITY ................................ 173
Subject Matter ....................174

Effects of Contracts ........... 169 REQUISITES OF A VALID SUBJECT MATTER ... 174
MUST BE LICIT .................................................... 174
STATUTORY BASIS ..........................................169 EXISTING, FUTURE, CONTINGENT ............................ 174
DETERMINATE OR DETERMINABLE ........................... 175
SALES PARTICULAR KINDS ....................................... 175
Introduction ....................... 171 Obligations of the Seller to

DEFINITION OF SALES .................................... 171
Transfer Ownership ............175
ESSENTIAL REQUISITES OF SALE BY A PERSON NOT THE OWNER AT TIME OF
A CONTRACT OF SALE .................................... 171 DELIVERY ........................................................ 175
ESSENTIAL ELEMENTS OF A VALID CONTRACT OF SALE .. 171
SALE BY A PERSON
STAGES OF CONTRACT OF SALE ..................... 171 HAVING A VOIDABLE TITLE ............................ 176
PHASES OF A SALE CONTRACT ................................. 171
OBLIGATIONS CREATED ................................. 171 Price ....................................176

NATURE OF OBLIGATIONS CREATED MEANING OF PRICE ....................................... 176
PER DEFINITION IN ART.1458 ................................. 171
REQUISITES FOR A VALID PRICE .................... 176
CHARACTERISTICS OF A CONTRACT OF SALE 171
HOW PRICE IS DETERMINED .......................... 176
SALE IS TITLE AND NOT MODE ....................... 171
INADEQUACY OF PRICE ................................. 176
SALE DISTINGUISHED FROM OTHER CONTRACTS
........................................................................ 171 WHEN NO PRICE AGREED .............................. 177
DONATION .......................................................... 171
BARTER ............................................................. 172 MANNER OF PAYMENT
CONTRACT FOR A PIECE OF WORK ............................ 172 MUST BE AGREED UPON ................................ 177
DACION EN PAGO ................................................. 172
EARNEST MONEY VS. OPTION MONEY .......... 177
Formation of WHEN OWNERSHIP IS TRANSFERRED .......... 183
Contract of Sale ................. 177 WHEN OWNERSHIP IS TRANSFERRED TO THE BUYER, THE
GOODS ARE AT THE BUYER’S RISK ............................ 183
PREPARATORY .............................................. 177

OFFER ............................................................... 177
OPTION CONTRACT .............................................. 177 Documents of Title ............ 183
RIGHT OF FIRST REFUSAL ....................................... 178 DEFINITION .................................................... 183
MUTUAL PROMISE TO BUY AND SELL ........................ 178
PURPOSE OF DOCUMENTS OF TITLE .............. 183
PERFECTION .................................................. 178
WHEN PERFECTED ................................................ 178 NEGOTIABLE DOCUMENTS OF TITLE .............. 183
EFFECT OF PERFECTION ......................................... 178 WHO MAY NEGOTIATE IT? ...................................... 183
FORM AND OFFER ................................................ 178 A PERSON TO WHOM A DOCUMENT HAS BEEN NEGOTIATED
ACQUIRES .......................................................... 183
FORMALITIES OF THE CONTRACT .................. 178
NON-NEGOTIABLE DOCUMENTS OF TITLE ..... 183
Transfer of Ownership ...... 179 WARRANTIES OF SELLER OF DOCUMENTS OF

TITLE .............................................................. 184
MANNER OF TRANSFER ................................. 179
A PERSON WHO NEGOTIATES A DOCUMENT OF TITLE
GENERAL CONCEPTS ............................................. 179
WARRANTS ........................................................ 184
HE DOES NOT WARRANT THAT ................................ 184
WHEN DELIVERY DOES NOT TRANSFER TITLE 179 GOODS IN THE HANDS OF THE CARRIER COVERED BY A
SALE ON APPROVAL, TRIAL, OR SATISFACTION ........... 179
NEGOTIABLE DOCUMENT CANNOT BE ATTACHED OR LEVIED
WHEN SALE NOT VALID ......................................... 180
UPON, UNLESS .................................................... 184
WHEN SELLER IS NOT THE OWNER ........................... 180
SALE BY PERSON HAVING A VOIDABLE TITLE .............. 180
RULES ON LEVY/GARNISHMENT OF GOODS . 184
KINDS OF DELIVERY ....................................... 180
ACTUAL DELIVERY ............................................... 180
CONSTRUCTIVE DELIVERY ..................................... 180 Remedies of an
DOUBLE SALES .............................................. 181
Unpaid Seller ..................... 184
RULES GOVERNING SALE OF MOVABLES, IMMOVABLES AND DEFINITION OF UNPAID SELLER .................... 184
UNREGISTERED LANDS .......................................... 181
REMEDIES OF UNPAID SELLER ....................... 184
JUDICIAL REMEDIES OF AN UNPAID SELLER ................ 184
PROPERTY REGISTRATION DECREE ...............182
ALTERNATIVE REMEDIES OF THE UNPAID SELLER UNDER
REQUISITES FOR REGISTRATION OF DEED OF SALE IN GOOD
RECTO LAW ........................................................ 185
FAITH .................................................................182
ACCOMPANIED BY VENDORS DUPLICATE CERTIFICATE OF
TITLE,PAYMENT OF CAPITAL GAINS TAX, AND
DOCUMENTARY TAX REGISTRATION FEES ...................182 Performance of Contract .. 185
DELIVERY OF THING SOLD .............................. 185
SALE OF MOVABLES .............................................. 185
Risk of Loss ....................... 182 SALE OF IMMOVABLES .......................................... 186
GENERAL RULE ..............................................182 INSPECTIONS AND ACCEPTANCE.............................. 186
WHEN LOSS OCCURRED PAYMENT OF PRICE ........................................ 186

BEFORE PERFECTION .....................................182 PAY THE PRICE OF THE THING SOLD ......................... 186
WHEN LOSS OCCURRED AT TIME OF

PERFECTION ..................................................182 Warranties .......................... 187
CONDITION V. WARRANTY .............................. 187
WHEN LOSS OCCURRED AFTER PERFECTION
BUT BEFORE DELIVERY ...................................182
EXPRESS WARRANTIES .................................. 187
EXPRESS WARRANTY DISTINGUISHED FROM FALSE EQUITABLE MORTGAGE ................................. 196
REPRESENTATION ................................................ 187
DISTINGUISHED FROM OPTION TO BUY ........ 196
IMPLIED WARRANTIES ................................. 188 PRESUMPTION THAT A CONTRACT IS AN EQUITABLE
IMPLIED WARRANTY OF TITLE ................................ 188 MORTGAGE ARISES WHEN ..................................... 196
IMPLIED WARRANTY AGAINST ENCUMBRANCE/NON- FOR THE PRESUMPTION OF AN EQUITABLE MORTGAGE TO
APPARENT SERVITUDES ....................................... 188 ARISE UNDER ART. 1602,
IMPLIED WARRANTY AGAINST HIDDEN DEFECTS ......... 188 2 REQUISITES MUST CONCUR ................................. 196
IMPLIED WARRANTY AS TO MERCHANTABLE QUALITY AND RATIONALE BEHIND
FITNESS OF GOODS .............................................. 188 PROVISION ON EQUITABLE MORTGAGE ..................... 196
IMPLIED WARRANTY AGAINST REDHIBITORY DEFECT IN THE REMEDIES OF APPARENT VENDOR ........................... 196
SALE OF ANIMALS ............................................... 189
PERIOD OF REDEMPTION ............................... 196
EFFECTS OF WARRANTIES ............................. 189
EXERCISE OF THE RIGHT TO REDEEM ............ 197
EFFECTS OF WAIVERS .................................... 189
LEGAL REDEMPTION ..................................... 197
BUYER’S OPTIONS IN CASE OF BREACH OF DEFINITION ........................................................ 197
WARRANTY ................................................... 189 MANNER ............................................................ 197
EXPRESS WARRANTY ........................................... 189 PERIOD TO REDEEM .............................................. 197
IMPLIED WARRANTY AGAINST EVICTION .................. 189 INSTANCES OF LEGAL REDEMPTION ......................... 198
IMPLIED WARRANTY AGAINST ENCUMBRANCES ......... 190
IMPLIED WARRANTY AGAINST HIDDEN DEFECTS ........ 190 AGE REDEMPTION ......................................... 199
IMPLIED WARRANTY AGAINST REDHIBITORY DEFECTS OF
ANIMALS ........................................................... 190
WARRANTY IN SALE OF CONSUMER GOODS .............. 190 The Law on Sale of
Subdivision and
Breach of Contract ............ 190 Condominium (PD 957) ... 200
REMEDIES OF THE SELLER ............................. 191 DEFINITIONS ................................................. 200
SALE OF MOVABLES .............................................. 191 DEFINITION OF "SALE" OR "SELL" .......................... 200
DEFINITION OF "BUY" OR "PURCHASE" ................... 200
RECTO LAW: SALE OF MOVABLES ON REQUIREMENTS FOR OWNERS AND DEVELOPERS ...... 200
INSTALLMENT ................................................192
SALE OF IMMOVABLES ........................................... 193

The Condominium Act (RA
4726) ................................. 202
REMEDIES OF THE BUYER ............................... 193 DEFINITION OF A CONDOMINIUM ................ 202
SALE OF MOVABLE ................................................ 193
SALE OF IMMOVABLES .......................................... 194 OTHER DEFINITIONS ..................................... 203
Extinguishment of Sale..... 194 TRANSFERS OR CONVEYANCES OF A UNIT OR

AN APARTMENT, OFFICE OR STORE, OR OTHER
CAUSES ......................................................... 194 SPACE THEREIN ............................................ 203
CONVENTIONAL REDEMPTION ..................... 195 RIGHTS OF A CONDOMINIUM UNIT OWNER

DEFINITION ........................................................ 195 (ASIDE FROM RIGHTS ARISING FROM
PERIOD ............................................................. 195 OWNERSHIP) ................................................ 203
BY WHOM EXERCISED ........................................... 195
FROM WHOM TO REDEEM ...................................... 195 PARTITION BY SALE ...................................... 203
HOW EXERCISED ................................................. 195
EFFECT OF REDEMPTION ....................................... 195 DECLARATION OF RESTRICTIONS BY OWNER OF
EFFECT OF NON-REDEMPTION ............................... 195 PROJECT –
RIGHT TO REDEEM VS. OPTION TO PURCHASE ........... 195 PRECONDITION TO CONVEYANCE ................ 203
REPUBLICATION AND REVIVAL ................................ 212
ASSESSMENT IN ACCORDANCE WITH ALLOWANCE AND DISALLOWANCE OF WILLS .............. 212
DECLARATION OF RESTRICTIONS ................. 204
INSTITUTION OF HEIRS .................................. 213
HOW LIEN ENFORCED AFTER NON-PAYMENT OF EXTENT OF GRANT .............................................. 213
ASSESSED FEES ............................................ 204 EFFECT OF PREDECEASE OF HEIR ............................ 213
IDENTIFICATION OF HEIRS, MANNER OF INSTITUTION .. 213
CONTENTS OF A DECLARATION OF FALSE CAUSE ..................................................... 213
RESTRICTIONS .............................................. 204 PRETERITION ...................................................... 213
COMPULSORY HEIRS IN THE DIRECT LINE ................... 214
INVOLUNTARY DISSOLUTION OF THE PRETERITION V. DISPOSITION LESS THAN LEGITIME ...... 214
CONDOMINIUM CORPORATION .................... 204 DISTINGUISHED FROM DISINHERITANCE .................... 214
EFFECTS OF PRETERITION ..................................... 214
POWER OF ATTORNEY HELD BY CORPORATION
IN CASE OF VOLUNTARY DISSOLUTION OF SUBSTITUTION OF HEIRS ............................... 214
CONDOMINIUM CORPORATION .................... 204 DEFINITION ........................................................ 214
KINDS ............................................................... 214
SALE, EXCHANGE, LEASE, OR DISPOSITION BY
CORPORATION OF THE COMMON AREAS ..... 204 TESTAMENTARY DISPOSITIONS WITH A
CONDITION, A TERM, AND A MODE ............... 215
STOCKHOLDER/MEMBER DEMANDING 3 KINDS OF TESTAMENTARY DISPOSITIONS ................ 215
PAYMENT FOR SHARES OR INTEREST AKA CONDITIONS ....................................................... 215
APPRAISAL RIGHT ........................................ 204
LEGITIME ....................................................... 216
REQUIREMENTS FOR REGISTRATION OF DEFINITION ........................................................ 216
CONVEYANCE WITH COMPULSORY HEIRS AND VARIOUS COMBINATIONS ..... 216
THE REGISTER OF DEEDS .............................. 204 RESERVA TRONCAL .............................................. 218
DISINHERITANCE .................................................. 219
REALTY TAX ON CONDOMINIUMS ................. 204
SUCCESSION Legal or
Intestate Succession ........ 224
General Provisions ............ 206 GENERAL PROVISIONS................................... 224
INSTANCES WHEN LEGAL OR INTESTATE SUCCESSION
DEFINITION & TRANSMISSION ....................... 206 OPERATES ......................................................... 224
THE INTESTATE OR LEGAL HEIRS ............................. 224
SUCCESSION OCCURS AT THE MOMENT OF FUNDAMENTAL PRINCIPLES IN
DEATH ........................................................... 206 INTESTATE SUCCESSION........................................ 224
KINDS ............................................................ 206 RELATIONSHIP ............................................... 225

KINDS OF SUCCESSION ......................................... 206 BASIC CONCEPTS IN RELATIONSHIP ......................... 225
KINDS OF SUCCESSORS ......................................... 206 INCAPACITY ....................................................... 225
KINDS OF HEIRS .................................................. 206 REPUDIATION .................................................... 225
ADOPTION ......................................................... 225
Testamentary RIGHT OF REPRESENTATION ......................... 225

EFFECT OF REPRESENTATION ................................. 225
Succession ........................ 206 WHEN IT OCCURS................................................. 226
WILLS ............................................................. 206 REPRESENTATION IN THE DIRECT DESCENDING LINE ... 226
IN GENERAL ....................................................... 206 REPRESENTATION IN COLLATERAL LINE ................... 226
TESTAMENTARY CAPACITY AND INTENT .................... 207 PER STIRPES ...................................................... 226
FORM................................................................ 208 THE DOUBLE HEIRSHIP TEST .................................. 226
WITNESSES ........................................................ 210 REPRESENTATION IN ADOPTION ............................. 226
CODICILS ............................................................ 211 ORDER OF CONCURRENCE IN THE CASE OF AN ADOPTED
INCORPORATION BY REFERENCE .............................. 211 CHILD .............................................................. 226
REVOCATION ....................................................... 211
ORDER OF INTESTATE SUCCESSION .............. 227
RULES OF EXCLUSION AND CONCURRENCE IN INTESTATE OBJECT OF THE CONTRACT ............................ 237
SHARES ............................................................ 227 OBJECT OF UNIVERSAL PARTNERSHIP ....................... 237
OUTLINE OF INTESTATE SHARES ............................. 227 OBJECT OF PARTICULAR PARTNERSHIP ..................... 237
Provisions Common to FORM OF THE CONTRACT ............................... 237
Testate and Intestate DURATION OF THE CONTRACT ....................... 237

COMMENCEMENT ................................................. 237
Succession ........................ 228 TERM ................................................................ 237
EXTENSION ........................................................ 237
RIGHT OF ACCRETION ................................... 228
DEFINITION AND REQUISITES ................................. 228 RULES TO DETERMINE EXISTENCE ................ 238
EFFECT OF PREDECEASE, INCAPACITY, DISINHERITANCE OR
REPUDIATION IN TESTAMENTARY AND INTESTATE RELATIONS CREATED .................................... 238
SUCCESSION ...................................................... 229
KINDS OF PARTNERSHIP ............................... 238
CAPACITY TO SUCCEED AS TO LEGALITY OF EXISTENCE ............................... 238
BY WILL OR INTESTACY ................................. 229 AS TO OBJECT .................................................... 238
PERSONS INCAPABLE OF SUCCEEDING ..................... 229 AS TO DURATION ................................................ 238
AS TO LIABILITY OF PARTNERS ............................... 238
ACCEPTANCE AND REPUDIATION OF THE AS TO PUBLICITY ................................................. 238
INHERITANCE ................................................ 230 AS TO PURPOSE .................................................. 238
CHARACTERISTICS .............................................. 230
REQUISITES ....................................................... 230 KINDS OF PARTNERS .................................... 238
ACCEPTANCE VS. REPUDIATION .............................. 230
DISTINGUISHED FROM OTHER CONTRACTS . 239
COLLATION ..................................................... 231
CONCEPT OF COLLATION ....................................... 231
OPERATIONS RELATED TO COLLATION ...................... 231
Rights and obligations of the
PERSONS OBLIGED TO COLLATE ............................... 231
WHAT TO COLLATE ............................................... 231
partnership ........................ 241
RIGHT TO CONTRIBUTION, IN GENERAL ........ 241
PROPERTIES NOT SUBJECT TO COLLATION ................. 231
OBLIGATION OF PARTNERS TO THE

PARTITION AND DISTRIBUTION OF ESTATE .. 232 PARTNERSHIP WITH RESPECT TO
PARTITION ........................................................ 232
CONTRIBUTION OF MONEY OR PROPERTY .... 241
PARTITION INTER VIVOS ........................................ 232
AMOUNT OF CONTRIBUTION ................................... 241
EFFECTS OF PARTITION ......................................... 233
DETERMINING VALUE OF CONTRIBUTION IN GOODS ..... 241
NULLIFICATION OF PARTITION ................................ 233
ADDITIONAL CAPITAL CONTRIBUTION ....................... 241
PROHIBITION AGAINST ENGAGING IN BUSINESS .......... 241
RISK OF LOSS OF THINGS CONTRIBUTED .................... 241
AGENCY & PARTNERSHIP
REMEDY IN CASE OF NON-COMPLIANCE ................... 242
Contract of Partnership .. 236 OBLIGATION OF PARTNERS TO THE

DEFINITION .................................................... 236 PARTNERSHIP WITH RESPECT TO
CONTRIBUTION OF INDUSTRY ...................... 242
ELEMENTS ..................................................... 236 PROHIBITION AGAINST ENGAGING IN BUSINESS ......... 242
ESSENTIAL FEATURES ................................... 236 RIGHT TO APPLY PAYMENT TO PARTNERSHIP

EFFECT OF UNLAWFUL OBJECT ............................... 236
CREDIT .......................................................... 242
ASSOCIATIONS WITHOUT LEGAL PERSONALITY .......... 236
RIGHT TO RETURN OF CREDIT RECEIVED ...... 242
CHARACTERISTICS ........................................ 236
RIGHT TO INDEMNITY FOR DAMAGES ........... 242
PARTIES TO THE CONTRACT .......................... 236 COMPENSATION OF LIABILITY ................................ 242
SUIT FOR DAMAGES ............................................. 243 REVOCATION OF POWER OF MANAGING PARTNER ...... 246
MANAGEMENT BY TWO OR MORE PARTNERS ............. 246
RESPONSIBILITY OF THE PARTNERSHIP TO STIPULATION ON UNANIMITY OF MANAGING PARTNERS
PARTNERS ..................................................... 243 ....................................................................... 246
MANAGEMENT WHEN MANNER NOT AGREED UPON .... 246
INSTANCES OF MUTUAL AGENCY ............................ 246
Rights and obligations of

partners inter se ............... 243 Obligations of
RIGHT TO ASSOCIATE ANOTHER IN SHARE ... 243
SUBPARTNERSHIP ............................................... 243 partnership/partners to third
RIGHT TO ACCESS PARTNERSHIP BOOKS ..... 243
persons ..............................247
BASIS OF RIGHT .................................................. 243
REASONABLE HOUR ............................................. 243 LIABILITY OF PARTNERS FOR PARTNERSHIP
CONTRACTS .................................................. 247
NATURE OF INDIVIDUAL LIABILITY ........................... 247
RIGHT TO A FORMAL ACCOUNT ..................... 243
LIABILITY OF INDUSTRIAL PARTNER ........................ 247
ACCRUAL OF RIGHT ............................................. 243
STIPULATION AGAINST INDIVIDUAL LIABILITY ............ 247
PERSON OBLIGED ................................................ 243
PRESCRIPTION OF ACTION ..................................... 243
NATURE OF ACTION ............................................. 244 LIABILITY OF PARTNERS FOR PARTNERSHIP
CONTRACTS .................................................. 247
ACTS APPARENTLY FOR THE CARRYING ON OF USUAL
PROPERTY RIGHTS OF PARTNERS ................ 244
BUSINESS ......................................................... 247
IN GENERAL ....................................................... 244
ACTS NOT APPARENTLY FOR CARRYING ON OF THE USUAL
PARTNERSHIP PROPERTY AND PARTNERSHIP CAPITAL 244
BUSINESS ......................................................... 247
OWNERSHIP OF CERTAIN PROPERTY ........................ 244
ACTS OF STRICT DOMINION ................................... 247
RIGHTS IN SPECIFIC PROPERTY ............................... 244
ACTS IN CONTRAVENTION OF RESTRICTION ............... 248
INTEREST IN THE PARTNERSHIP ............................. 244
RIGHTS OF ASSIGNEE ........................................... 244
CHARGING OF PARTNERSHIP INTEREST BY PERSONAL CONVEYANCE OF REAL PROPERTY OF
CREDITOR OF PARTNERS ...................................... 244 PARTNERSHIP ............................................... 248
CHARGING ORDER ............................................... 245 TITLE IN THE PARTNERSHIP NAME .......................... 248
TITLE IN THE NAME OF ONE OR MORE (NOT ALL) OF THE
PARTNERS AND THE RECORD DOES NOT DISCLOSE THE
RIGHT TO PROFITS AND OBLIGATION FOR
RIGHT OF THE PARTNERSHIP ................................. 248
LOSSES .......................................................... 245
TITLE IN THE NAME OF ONE OR MORE OR ALL THE
RULES FOR DISTRIBUTION OF PROFITS AND LOSSES .... 245
PARTNERS, OR IN A THIRD PERSON IN TRUST FOR THE
DESIGNATION OF SHARE BY THIRD PERSONS ............. 245
PARTNERSHIP .................................................... 248
EXCLUSION OF PARTNER FROM SHARE .................... 245
TITLE IN THE NAMES OF ALL THE PARTNERS .............. 248
OBLIGATION TO RENDER INFORMATION ...... 245

BASIS OF OBLIGATION .......................................... 245
LIABILITY OF PARTNERSHIP FOR ADMISSION BY
PARTNER ....................................................... 248
OBLIGATION TO ACCOUNT AND ACT AS LIABILITY OF PARTNERSHIP FOR WRONGFUL
TRUSTEE ........................................................ 245 ACTS OF PARTNER ........................................ 248
BASIS OF OBLIGATION .......................................... 245
LIABILITY OF THE PARTNERSHIP FOR
MISAPPLICATION OF MONEY OR PROPERTY
Operation of RECEIVED ...................................................... 248
the Partnership ................ 246 LIABILITY OF OTHER PARTNERS FOR

FIRM NAME .................................................... 246 WRONGFUL ACTS OR MISAPPLICATION ....... 248
RIGHT TO CHOOSE FIRM NAME ............................... 246
LIABILITY IN CASE OF PARTNERSHIP BY
MANAGEMENT OF THE PARTNERSHIP .......... 246 ESTOPPEL ...................................................... 248
POWERS OF A MANAGING PARTNER ........................ 246 LIABILITY OF PARTNER BY ESTOPPEL ....................... 248
NATURE OF LIABILITY ........................................... 249
EFFECTS OF ACTS OF PARTNER BY ESTOPPEL ............. 249 RIGHTS OF PARTNERS
ESTABLISHING LIABILITY ....................................... 249 IN CASE OF RESCISSION ................................. 253
LIABILITY OF INCOMING PARTNER ................ 249 SETTLING OF ACCOUNTS

BETWEEN PARTNERS..................................... 253
NOTICE TO OR KNOWLEDGE OF THE COMPOSITION OF PARTNERSHIP ASSETS .................. 253
PARTNERSHIP ............................................... 249 AMOUNT OF CONTRIBUTION FOR LIABILITIES ............. 253
ENFORCEMENT OF CONTRIBUTION .......................... 253
PREFERENCE OF PARTNERSHIP CREDITORS 249 ORDER OF APPLICATION OF ASSETS ......................... 254
DOCTRINE OF MARSHALING OF ASSETS .................... 254
DISTRIBUTION OF PROPERTY OF INSOLVENT PARTNER. 254
Dissolution RIGHTS OF CREDITORS OF DISSOLVED

and winding up ................. 250 PARTNERSHIP ................................................ 254
CONCEPTS ...................................................... 250 CREDITORS OF DISSOLVED PARTNERSHIPAS CREDITORS OF
NEW PARTNERSHIP.............................................. 254
EFFECT OF DISSOLUTION ON EXISTENCE OF LIABILITY OF A NEW PARTNER ................................ 254
PARTNERSHIP ................................................ 250 PRIORITY OF CREDITORS OF DISSOLVED PARTNERSHIP 254
EFFECT OF CONTINUING USE OF PARTNERSHIP NAME .. 254
CAUSES OF DISSOLUTION .............................. 250
WITHOUT VIOLATION OF THE AGREEMENT ................. 250 RETIRED OR REPRESENTATIVE OF DECEASED
IN CONTRAVENTION OF THE AGREEMENT .................. 250 PARTNER ....................................................... 254
BY OPERATION OF LAW ......................................... 250
BY DECREE OF COURT ............................................ 251 RIGHT TO AN ACCOUNT ................................. 254
OTHER CAUSES .................................................... 251 EXISTENCE OF RIGHT ............................................ 255
NEED FOR LIQUIDATION ........................................ 255
EFFECT OF DISSOLUTION ON AUTHORITY OF
PARTNERS.......................................................251
WITH RESPECT TO PARTNERS .................................. 251
Limited partnership .......... 255
WITH RESPECT TO THIRD PERSONS ........................... 251 DEFINITION .................................................... 255
LIABILITY OF PARTNERS IN TRANSACTIONS AFTER
DISSOLUTION....................................................... 251 CHARACTERISTICS ......................................... 255
CASES WHERE ADVANTAGES OF LIMITED PARTNERSHIP ..... 255

PARTNERSHIP IS NOT BOUND........................ 252
PARTNERSHIP BY ESTOPPEL AFTER DISSOLUTION ....... 252
GENERAL AND LIMITED PARTNER
DISTINGUISHED ............................................. 255
CONTRACTS AFTER DISSOLUTION BY SPECIFIC GENERAL AND LIMITED PARTNERSHIP
CAUSES........................................................... 252 DISTINGUISHED ............................................. 256
EFFECT OF DISSOLUTION ON EXISTING LIABILITY FORMATION OF LIMITED PARTNERSHIP ....... 256

OF PARTNERS ................................................ 252 PURPOSE OF FILING ............................................. 256
WINDING UP PARTNERS ........................................ 252 NO SUBSTANTIAL COMPLIANCE .............................. 256
WHO MAY WIND UP .............................................. 252 FIRM NAME ........................................................ 256
MANNER OF WINDING UP ...................................... 252 FALSE STATEMENT IN THE CERTIFICATE .................... 256
NATURE OF JUDICIAL LIQUIDATION .......................... 252 ADMISSION OF ADDITIONAL LIMITED PARTNERS ......... 257
POWERS OF WINDING UP PARTNER .......................... 252 GENERAL AND LIMITED PARTNER AT THE SAME TIME ... 257
RIGHTS OF PARTNERS IN MANAGEMENT OF LIMITED PARTNERSHIP.... 257

CASE OF DISSOLUTION ................................... 252 MANAGEMENT BY GENERAL PARTNERS .................... 257
DISSOLUTION WITHOUT LIABILITY OF LIMITED PARTNER FOR PARTICIPATING IN
VIOLATION OF THE AGREEMENT .............................. 252 CONTROL .......................................................... 257
DISSOLUTION IN CONTRAVENTION POWERS OF GENERAL PARTNER ............................. 257
OF THE AGREEMENT ............................................. 253
OBLIGATIONS OF A LIMITED PARTNER .......... 257 KINDS OF AGENCY, IN GENERAL .................... 264
OBLIGATIONS RELATED TO CONTRIBUTION ................ 257 AS TO MANNER OF ITS CREATION ............................ 264
LIABILITY TO PARTNERSHIP CREDITORS .................... 258 AS TO CAUSE OR CONSIDERATION ........................... 264
LIABILITY TO SEPARATE CREDITORS ......................... 258 AS TO EXTENT OF BUSINESS COVERED ...................... 265
AS TO AUTHORITY CONFERRED ............................... 265
RIGHTS OF A LIMITED PARTNER .................... 258 AS TO ITS NATURE AND EFFECTS ............................. 265
RIGHTS OF LIMITED PARTNER, IN GENERAL ............... 258 AS TO KINDS OF PRINCIPAL .................................... 265
RIGHT TO TRANSACT BUSINESS WITH PARTNERSHIP .... 258
RIGHT TO SHARE IN PROFITS .................................. 258 KINDS OF AGENCY AS TO MANNER OF
RIGHT TO RETURN OF CONTRIBUTION....................... 259 CREATION ...................................................... 265
PREFERENCE OF LIMITED PARTNERS ........................ 259 EXPRESS AGENCY ................................................ 265
RIGHT TO ASSIGN INTEREST ................................... 259 IMPLIED AGENCY ................................................. 265
RIGHT TO ASK FOR DISSOLUTION............................. 259
KINDS OF AGENCY AS TO EXTENT OF BUSINESS
CAUSES OF DISSOLUTION OF LIMITED COVERED........................................................ 265
PARTNERSHIP ................................................ 259 UNIVERSAL AGENCY ............................................. 265
GENERAL AGENCY ............................................... 265
SETTLEMENT OF ACCOUNTS .......................... 260 SPECIAL AGENCY ................................................. 265
ORDER OF PAYMENT............................................. 260
SHARE IN THE PARTNERSHIP ASSETS ....................... 260 KINDS OF AGENCY AS TO AUTHORITY
CONFERRED ................................................... 265
AMENDMENT OR CANCELLATION OF COUCHED IN GENERAL TERMS ................................ 265
CERTIFICATE................................................... 260 COUCHED IN SPECIFIC TERMS ................................. 265
WHEN CERTIFICATE IS CANCELLED ........................... 260
WHEN CERTIFICATE IS AMENDED ............................. 260 SPECIAL KINDS OF AGENCY ........................... 266
REQUIREMENTS FOR AMENDMENT OR CANCELLATION . 260 AGENCY BY ESTOPPEL........................................... 266
AGENCY WITH UNDISCLOSED PRINCIPAL ....................267
AGENCY BY OPERATION OF LAW ...............................267
Contract of agency ........... 260 IRREVOCABLE AGENCY...........................................267
DEFINITION .................................................... 260
KINDS OF AGENTS...........................................267
CHARACTERISTICS ..........................................261 AS TO NATURE AND EXTENT OF AUTHORITY ................267
SPECIAL TYPES OF AGENTS .................................... 268
CONSTITUTION OF AGENCY.............................261
ESSENTIAL ELEMENTS............................................ 261
PARTIES ............................................................. 261 Powers of the agent ......... 268
CAPACITY OF PARTIES ............................................ 261 AUTHORITY OF AN AGENT ............................. 268
INTENTION OF PARTIES .......................................... 261
CONSENT OF PARTIES ............................................ 261 KINDS OF AUTHORITY .................................... 268
POWER OF ATTORNEY ........................................... 262
FORM OF CONTRACT............................................. 262 SCOPE OF AUTHORITY ................................... 268
DESIGNATION BY THE PARTIES ................................ 262
ACTS DELEGATED ................................................ 262 POWER TO BIND THE PRINCIPAL ................... 269
PRESUMPTION OF EXISTENCE ................................. 262
COMMUNICATION OF EXISTENCE OF AGENCY .............. 262 EFFECTS OF ACTS OF AN AGENT .................... 269
DUTY OF THIRD PERSON ........................................ 262
EFFECT ........................................................... 262

Obligations of the agent .. 269
EXTENSION OF PERSONALITY ................................. 262
OBLIGATIONS, IN GENERAL ........................... 269
GOOD FAITH AND LOYALTY TO HIS TRUST .................. 269
THEORY OF IMPUTED KNOWLEDGE .......................... 262
OBEDIENCE TO PRINCIPAL'S INSTRUCTIONS .............. 269
EXERCISE OF REASONABLE CARE ............................ 269
DISTINGUISHED FROM OTHER CONTRACTS .. 263
OBLIGATION TO CARRY OUT AGENCY ............ 269
Kinds of agency................. 264
OBLIGATION IN CASE HE RATIFICATION ..................................................... 274
DECLINES AGENCY ......................................... 269 SEPARATE CONTRACTS WITH PRINCIPAL AND AGENT... 274
WHEN PRINCIPAL NOT LIABLE, IN SUMMARY.............. 274
OBLIGATION TO
ADVANCE NECESSARY FUNDS ....................... 270 OBLIGATION FOR
COMPENSATION OF AGENT ........................... 274
OBLIGATION TO ACT IN ACCORDANCE WITH AMOUNT OF COMPENSATION ................................. 275
INSTRUCTIONS ............................................... 270 COMPENSATION OF BROKER .................................. 275
OBLIGATION TO PREFER INTEREST OF LIABILITY FOR EXPENSES AND DAMAGES ..... 275
PRINCIPAL ...................................................... 270 NECESSARY FUNDS .............................................. 275
BASIS OF THE RULE .............................................. 270
WHEN PRINCIPAL NOT LIABLE FOR EXPENSES ............ 275
APPLICATION ...................................................... 270
DAMAGES .......................................................... 275
RIGHT OF RETENTION BY AGENT ............................. 275
OBLIGATION TO ACCOUNT AND TO DELIVER MULTIPLE PRINCIPALS .......................................... 275
THINGS RECEIVED ......................................... 270 LIABILITY FOR QUASI-DELICT BY AGENT .................... 275
WHAT TO DELIVER................................................. 271
LIABILITY FOR CONVERSION .................................... 271
EXEMPTING STIPULATION ....................................... 271
WHEN OBLIGATION NOT APPLICABLE......................... 271
Extinguishment
of agency ............................276
RESPONSIBILITY FOR ACTS OF SUBSTITUTE ... 271 MODES OF EXTINGUISHING AGENCY, IN
SUB-AGENCY ....................................................... 271 GENERAL.........................................................276
POWER TO APPOINT .............................................. 271
RELATIONS AMONG THE PARTIES ............................. 271
REVOCATION BY PRINCIPAL ...........................276
EFFECTS OF SUBSTITUTION ..................................... 271
MULTIPLE PRINCIPALS ...........................................276
MANNER OF REVOCATION ......................................276
RESPONSIBILITY OF TWO OR MORE AGENTS .. 271 EFFECT OF REVOCATION
IN RELATION TO THIRD PARTIES...............................276
OBLIGATION FOR SUMS APPLIED TO HIS OWN
USE ................................................................. 272 WITHDRAWAL BY AGENT ................................ 277
LIABILITY FOR DAMAGES ........................................ 277
OBLIGATIONS TO THIRD PERSONS ................ 272 OBLIGATION TO CONTINUE AGENCY .......................... 277
LIABILITY OF AGENT FOR OBLIGATIONS CONTRACTED .. 272
VOID CONTRACTS ................................................ 272
DEATH, CIVIL INTERDICTION, INSANITY OR
PRESENTATION OF POWER OF ATTORNEY.................. 272
INSOLVENCY ................................................... 277
RATIFICATION BY PRINCIPAL .................................. 272
DEATH OF PRINCIPAL ............................................ 277
IGNORANCE OF AGENT .......................................... 272
DEATH OF AGENT ................................................. 277
OBLIGATIONS OF COMMISSION AGENT.......... 273 ACCOMPLISHMENT OF OBJECT OR PURPOSE . 277

FACTOR OR COMMISSION AGENT ............................. 273
RESPONSIBILITY FOR GOODS RECEIVED .................... 273
DISSOLUTION OF FIRM OR CORPORATION ..... 277
SALE OF GOODS ON CREDIT WITHOUT AUTHORITY ....... 273
SALE OF GOODS ON CREDIT WITH AUTHORITY ............ 273
EXPIRATION OF TERM ..................................... 277
RESPONSIBILITY FOR FRAUD

AND NEGLIGENCE........................................... 273
CREDIT TRANSACTIONS
Obligations of Credit Transactions ..........279

MEANING AND SCOPE OF CREDIT
the principal .......................274 TRANSACTIONS ............................................. 279
OBLIGATIONS, IN GENERAL ........................... 274
TWO TYPES OF CREDIT
OBLIGATION TO COMPLY WITH OBLIGATIONS TRANSACTIONS/CONTRACTS OF SECURITY . 279
CONTRACTED ................................................. 274
Loan ...................................279 APPLICABLE LAW ................................................ 283
CHARACTERISTICS OF A LOAN ...................... 279
COMMODATUM V. MUTUUM .......................... 279 Guaranty and Suretyship 283

GUARANTY DISTINGUISHED
OBLIGATIONS OF BAILOR AND BAILEE .......... 279 FROM SURETYSHIP ....................................... 284
WHO MAY BE A BAILOR IN COMMODATUM? ............... 279
WHAT ARE THE TWO (2) KINDS OF COMMODATUM? .... 280 NATURE AND EXTENT OF GUARANTY ........... 284
NATURE AND EXTENT OF GUARANTY ....................... 284
OBLIGATIONS OF A BAILOR IN COMMODATUM
....................................................................... 280 NATURE AND EXTENT OF SURETYSHIP ......... 286
OBLIGATIONS OF A BAILEE IN COMMODATUM EFFECT OF GUARANTY ................................... 287

....................................................................... 280 EFFECTS OF GUARANTY BETWEEN THE GUARANTOR AND
THE CREDITOR ................................................... 287
INTEREST AND SUSPENSION OF USURY LAW 281 EFFECTS OF GUARANTY BETWEEN THE DEBTOR AND THE
KINDS OF INTEREST ..............................................281 GUARANTOR ...................................................... 288
WHEN IS COMPOUND INTEREST ALLOWED? ...............281 EFFECTS OF GUARANTY AS BETWEEN CO-GUARANTORS
REQUISITES FOR INTEREST TO BE CHARGEABLE ..........281 ....................................................................... 289
EXCEPTIONS TO REQUISITE OF EXPRESS STIPULATION ..281
RULES FOR AWARD OF INTEREST IN THE CONCEPT OF EXTINGUISHMENT OF GUARANTY ................. 289
ACTUAL AND COMPENSATORY DAMAGES ...................281
ELEMENTS OF USURY ...........................................281 LEGAL AND JUDICIAL BONDS ........................ 289
QUALIFICATIONS OF PERSONAL BONDSMAN ............. 289
PLEDGE OR MORTGAGE IN LIEU OF BOND ................. 290
Deposit ............................. 282 BONDSMAN NOT ENTITLED TO EXCUSSION ............... 290
CHARACTERISTICS ........................................ 282
CONTRACT OF DEPOSIT IS GENERALLY Pledge .............................. 290

GRATUITOUS .................................................. 282 DEFINITION ................................................... 290
ONLY MOVABLE THINGS MAY BE THE OBJECT OF PROVISIONS APPLICABLE ONLY TO PLEDGE . 290
A DEPOSIT ...................................................... 282
KINDS ............................................................ 290
OBLIGATIONS OF DEPOSITOR ....................... 282
ESSENTIAL REQUIREMENTS ......................... 290
EXTINGUISHMENT OF DEPOSIT ..................... 282 ESSENTIAL REQUISITES COMMON TO PLEDGE AND
MORTGAGE ....................................................... 290
EFFECT OF DEATH OF DEPOSITOR OR
DEPOSITARY .................................................. 282 OBLIGATION OF PLEDGEE ............................. 290
KINDS OF DEPOSIT ........................................ 282 RIGHTS OF PLEDGOR .................................... 290
VOLUNTARY DEPOSIT .................................... 282 PERFECTION .................................................. 291

REQUISITES FOR PERFECTION ................................. 291
NECESSARY DEPOSIT .................................... 282
KINDS OF NECESSARY DEPOSITS ............................. 283 FORECLOSURE .............................................. 291
DEPOSITS BY TRAVELERS IN HOTELS AND INNS........... 283 REQUIREMENTS IN SALE OF THE THING PLEDGED BY A
EXTENT OF LIABILITY UNDER ART.1998 ................... 283 CREDITOR, IF CREDIT IS NOT PAID ON TIME ............... 291
WHEN HOTEL-KEEPER LIABLE ................................ 283 EFFECT OF THE SALE OF THE THING PLEDGED ............. 291
WHEN HOTEL-KEEPER NOT LIABLE .......................... 283
HOTEL-KEEPER’S RIGHT TO RETENTION ................... 283 PLEDGE BY OPERATION OF LAW ................... 291
LEGAL PLEDGES/PLEDGE BY OPERATION OF LAW ........ 291
JUDICIAL DEPOSIT ......................................... 283
NATURE AND PURPOSE ........................................ 283 DISTINGUISHED FROM CHATTEL MORTGAGE
DEPOSITARY OF SEQUESTERED PROPERTY ................ 283 ........................................................................ 291
OBLIGATIONS OF A GESTOR ................................... 298
OBLIGATIONS OF THE OWNER OF THE PROPERTY OR
Real Mortgage ................. 292 BUSINESS ......................................................... 298
DEFINITION AND CHARACTERISTICS ............. 292 EFFECT OF RATIFICATION ...................................... 298
OBJECTS OF REAL MORTGAGE ................................ 292 EXTINGUISHMENT OF MANAGEMENT ....................... 298
CHARACTERISTICS ............................................... 292
KINDS ............................................................... 292 SOLUTIO INDEBITI (UNDUE PAYMENT) ........ 299
PRINCIPLE OF INDIVISIBILITY OF PLEDGE/MORTGAGE . 293 WHEN DEBT NOT YET DUE ..................................... 299
RESPONSIBILITY OF TWO OR MORE PAYEES ............... 299
ESSENTIAL REQUISITES ................................. 293 WHEN MONEY OR THING DELIVERED IS OWNED BY THIRD
ESSENTIAL REQUISITES COMMON TO PLEDGE AND PERSON ............................................................ 299
MORTGAGE ........................................................ 293 LIABILITY OF PAYEE ............................................ 299
EXEMPTION FROM THE OBLIGATION TO RESTORE THE
FORECLOSURE ............................................... 293 PAYMENT UNDULY MADE ...................................... 299
FORECLOSURE OF MORTGAGE ................................ 293 PRESUMPTION OF PAYMENT BY MISTAKE, DEFENSE .... 299
KINDS OF FORECLOSURE ....................................... 293
JUDICIAL FORECLOSURE ....................................... 293 OTHER QUASI-CONTRACTS ........................... 299
EXTRAJUDICIAL FORECLOSURE ............................... 293
Concurrence and Preference

Antichresis ........................ 295 of Credits .......................... 300
DEFINITION AND CHARACTERISTICS ............. 295
CHARACTERISTICS ............................................... 295 MEANING OF
SPECIAL REQUISITES ............................................ 295 CONCURRENCE AND PREFERENCE ................ 300
OBLIGATIONS OF ANTICHRETIC CREDITOR ... 295 PREFERRED CREDITS ON SPECIFIC MOVABLES

REMEDIES OF CREDITOR IN CASE OF NON-PAYMENT OF ....................................................................... 300
DEBT ................................................................ 295
PREFERRED CREDITS ON SPECIFIC IMMOVABLES
AND REAL RIGHTS .......................................... 301
Chattel Mortgage ............ 296
DEFINITION AND CHARACTERISTICS ............. 296 PREFERRED CREDITS ON OTHER PROPERTY,
CHARACTERISTICS ............................................... 296 REAL AND PERSONAL .................................... 301
REGISTRATION .............................................. 296 EXEMPT PROPERTY ....................................... 302

PERIOD WITHIN WHICH REGISTRATION SHOULD BE MADE
....................................................................... 296 CLASSIFICATION OF CREDITS ........................ 302
EFFECT OF REGISTRATION ..................................... 296
REGISTRATION OF ASSIGNMENT OF MORTGAGE NOT
ORDER OF PREFERENCE OF CREDITS ........... 302
REQUIRED ......................................................... 296
VENUE OF REGISTRATION ...................................... 296
LAND TITLES & DEEDS
VALIDITY OF CHATTEL MORTGAGE ................ 296
Torrens System ................. 304
FORMAL REQUISITES .................................... 296 THE TORRENS SYSTEM .................................. 304
DESCRIPTION OF PROPERTY .................................. 297 PURPOSE........................................................... 304
PROPERTY COVERED BY CM ................................... 297 ADVANTAGES ..................................................... 304
BACKGROUND .................................................... 304
DISPOSITION OF PROCEEDS .......................... 297
CERTIFICATE OF TITLE ................................... 304
ORIGINAL CERTIFICATE OF TITLE OR OCT ................... 304
Quasi-Contracts ...............297 TRANSFER CERTIFICATE OF TITLE OR TCT .................. 304
PATENTS .......................................................... 304
NEGOTIORUM GESTIO (UNAUTHORIZED

MANAGEMENT) ............................................. 298
THE OBLIGATION DOES NOT ARISE .......................... 298
Regalian Doctrine............. 305
EFFECTS ......................................................... 305
CONCEPT OF NATIVE TITLE, TIME IMMEMORIAL REGISTRATION OF VOLUNTARY
POSSESSION................................................... 305 INSTRUMENTS IN GENERAL .................................... 317
REGISTRATION OF DEEDS OF SALE AND TRANSFERS ..... 318
MORTGAGES AND LEASES ...................................... 318
Citizenship Doctrine ......... 305 POWERS OF ATTORNEY; TRUSTS .............................. 318
INDIVIDUALS AND CORPORATIONS ............... 305
CONSTITUTIONAL REQUIREMENTS AND LIMITATIONS... 305 INVOLUNTARY DEALINGS ............................... 319
KRIVENKO DOCTRINE............................................ 305 ATTACHMENT ...................................................... 319
EXECUTION AND TAX DELINQUENCY SALES ................ 320
Original Registration ........ 306 NOTICE OF LIS PENDENS ....................................... 320

ADVERSE CLAIM .................................................. 320
WHO MAY APPLY ............................................ 306

UNDER PD 1529 .................................................. 306 Non-registrable Properties
UNDER CA 141 .................................................... 307
UNDER RA 8371 .................................................. 307 ............................................ 321
NON-REGISTRABLE LANDS ............................. 321
REGISTRATION PROCESS
AND REQUIREMENTS ..................................... 309
WHAT LANDS ARE REGISTRABLE ............................. 309
Dealings with Unregistered
SURVEY ..............................................................310
APPLICATION .......................................................310
Lands ................................. 322
INITIAL HEARING ..................................................310
PUBLICATION .......................................................310
OPPOSITION ........................................................ 311 TORTS & DAMAGES
HEARING ............................................................ 311
JUDGMENT .......................................................... 311
ISSUANCE OF DECREE ............................................ 311
Principles of Torts ............. 324
ABUSE OF RIGHT ............................................ 324
ELEMENTS ......................................................... 324
REMEDIES........................................................ 311
GROUND FOR REOPENING AND REVIEWING THE DECREE OF
REGISTRATION ..................................................... 311 ACTS CONTRARY TO LAW .............................. 324
PERIODS ............................................................. 311 REQUISITES........................................................ 324
PROHIBITIONS ..................................................... 311
ACTS CONTRARY TO MORALS ........................ 324
IMPRESCRIPTIBLE ........................................... 312 ELEMENTS ......................................................... 324
EXAMPLES ......................................................... 324
NOT SUBJECT TO COLLATERAL ATTACK ......... 312 BREACH OF PROMISE TO MARRY, SEDUCTION AND SEXUAL
JUDICIAL CONFIRMATION OF IMPERFECT OR INCOMPLETE ASSAULT ........................................................... 324
TITLES ................................................................ 313 MALICIOUS PROSECUTION ..................................... 325
ELEMENTS ......................................................... 325
CADASTRAL REGISTRATION ...........................314 PUBLIC HUMILIATION ........................................... 325
STEPS IN CADASTRAL REGION PROCEEDINGS .............. 315 UNJUSTIFIED DISMISSAL ....................................... 325
UNJUST ENRICHMENT ................................... 325

Subsequent Registration .. 315 LIABILITY WITHOUT FAULT ..................................... 325
TWO TYPES OF DEALINGS ............................... 315 BASIS OF LIABILITY .............................................. 326
VOLUNTARY DEALINGS .......................................... 315 SCOPE OF LIABILITY ............................................. 326
INVOLUNTARY DEALINGS........................................ 315
NECESSITY AND EFFECTS OF REGISTRATION . 315 Classification of Torts ....... 326

WHEN SHOULD A PURCHASER INVESTIGATE? ACCORDING TO MANNER OF COMMISSION ... 326
........................................................................ 316
ACCORDING TO MANNER OF SCOPE ............. 326
VOLUNTARY DEALINGS ................................... 317 GENERAL ........................................................... 326
SPECIFIC ............................................................ 326
Acts of Omission and its
The Tortfeasor .................. 326 Modalities ........................... 333
THE DIRECT TORTFEASOR.............................. 326
PERSONS MADE LIABLE FOR OTHERS ........... 326

Proximate Cause ............... 333
PRINCIPLE OF VICARIOUS LIABILITY; DEFINITION ......... 326
BASIS OF VICARIOUS LIABILITY ................................ 326
CONCEPT OF PROXIMATE CAUSE.................... 333
LIABILITY OF THE ACTUAL TORTFEASOR .................... 327
2 REQUISITES ACCORDING TO CHIRONI ..................... 327 DEFINITION ..................................................... 333
PROXIMATE CAUSE ............................................... 333
PRESUMPTION OF NEGLIGENCE ON PERSONS INDIRECTLY
PROXIMATE LEGAL CAUSE ...................................... 333
RESPONSIBLE ..................................................... 327
DIFFERENTIATED FROM ................................. 333
REMOTE CAUSE .................................................... 333
PERSONS VICARIOUSLY LIABLE ..................... 327
INTERVENING CAUSE ............................................. 333
WHO ARE LIABLE FOR MINORS ................................ 327
EFFICIENT INTERVENING CAUSE .............................. 334
PARENTS AND ADOPTERS ............................. 327
BASIS OF LIABILITY ............................................... 327 TESTS TO DETERMINE PROXIMATE CAUSE .... 334
WHEN RESPONSIBILITY CEASES............................... 327 CAUSE IN FACT .................................................... 334
MEANING OF “MINORITY” ..................................... 327 EFFECTIVENESS OF THE CAUSE; “BUT FOR” RULE ....... 334
ADOPTED CHILDREN ............................................. 327 SUBSTANTIAL FACTOR TEST ................................... 334
ILLEGITIMATE CHILDREN ....................................... 327 FORESEEABILITY TEST .......................................... 334
REASON FOR VICARIOUS LIABILITY........................... 327 NATURAL AND PROBABLE CONSEQUENCE TEST .......... 334
REQUISITES FOR LIABILITY TO ATTACH...................... 328 ORDINARY AND NATURAL OR
PARENTAL AUTHORITY OVER FOUNDLINGS, ABANDONED, DIRECT CONSEQUENCE TEST .................................. 334
NEGLECTED OR ABUSED AND OTHER SIMILARLY SITUATED HINDSIGHT TEST ................................................. 334
CHILDREN .......................................................... 328 ORBIT OF THE RISK TEST ....................................... 334
GUARDIANS.................................................... 328 CAUSE V. CONDITION ..................................... 334

LIABILITY OF GUARDIANS....................................... 328
LEGAL CAUSE ................................................. 334
NATURAL AND PROBABLE CONSEQUENCES ............... 334
SCHOOL, TEACHERS AND ADMINISTRATORS 328
FORESEEABILITY ................................................. 334
OWNERS AND MANAGERS OF ESTABLISHMENTS

AND ENTERPRISES ......................................... 329 DOCTRINE OF LAST CLEAR CHANCE .............. 335
ELEMENTS ......................................................... 335
COVERS SUCCESSIVE ACTS OF NEGLIGENCE ............... 335
EMPLOYERS (IN GENERAL)............................. 329 INAPPLICABLE TO JOINT TORTFEASORS .................... 335
MEANING OF EMPLOYER ........................................ 329
INDEPENDENT CONTRACTOR.................................. 330
REQUISITES ........................................................ 330
CONTRIBUTORY NEGLIGENCE........................ 335
WHEN IS IT A BAR TO RECOVERY.............................. 335
EMPLOYER NEED NOT BE ENGAGED IN BUSINESS OR
INDUSTRY .......................................................... 330
DEFENSE OF DILIGENCE IN SELECTION AND SUPERVISION
........................................................................ 331
Legal Injury........................ 336
THE STATE ...................................................... 332 ELEMENTS ..................................................... 336
INSTANCES WHERE THE STATE GIVES ITS CONSENT TO BE
SUED ................................................................ 332 CLASSES OF INJURY ....................................... 336
INJURY TO PERSONS ............................................ 336
INJURY TO PROPERTY ........................................... 336
JOINT TORTFEASORS ..................................... 332
INJURY TO RELATIONS .......................................... 336
DEFINITION OF “JOINT TORTFEASORS”..................... 332
APPLICABILITY OF THE PROVISION ........................... 332
Intentional Torts ............... 336
CONCEPT ........................................................ 336
GOOD FATHER OF A FAMILY (BONUS PATER
VIOLATIONS OF A PERSON’S SECURITY AND FAMILIAS)....................................................... 345
PHYSICAL INJURIES ....................................... 337 WHAT CONSTITUTES THE CONDUCT OF A PRUDENT MAN IN
BATTERY (PHYSICAL INJURY) .................................. 337 A GIVEN SITUATION ............................................. 345
INTERESTS PROTECTED BY LAW .............................. 337
ASSAULT (GRAVE THREAT)..................................... 337 STANDARD OF CARE ...................................... 345
FALSE IMPRISONMENT (ILLEGAL DETENTION) ............ 337 STANDARD OF CARE REQUIRED OF BANKS ................ 345
STANDARD OF CARE OF CHILDREN .......................... 345
INTERFERENCE WITH PERSONAL PROPERTY 337 STANDARD OF CARE OF EXPERTS/PROFESSIONALS .... 345
TRESPASS TO LAND .............................................. 337 IN CASE OF INSANE PERSONS ................................. 346
TRESPASS TO CHATTELS........................................ 337 EMERGENCY RULE OR SUDDEN PERIL DOCTRINE......... 346
CONVERSION ...................................................... 337 UNREASONABLE RISK OR HARM ............................. 346
INTENTIONAL NON-PHYSICAL HARMS....................... 337
VIOLATION OF PERSONAL DIGNITY ........................... 338 EVIDENCE ....................................................... 346
INFLICTION OF EMOTIONAL DISTRESS ....................... 338 QUANTUM OF PROOF IN QUASI-DELICT VS. QUANTUM OF
VIOLATION OF PRIVACY ......................................... 338 PROOF IN BREACH OF CONTRACT ........................... 346
DISTURBANCE OF PEACE OF MIND ........................... 339
MALICIOUS PROSECUTION ..................................... 339
PRESUMPTION OF NEGLIGENCE .................... 346
PRESUMED NEGLIGENCE OR NEGLIGENCE PER SE ........347
DEFAMATION, FRAUD RES IPSA LOQUITUR ..............................................347
AND PHYSICAL INJURIES ................................ 340
DEFAMATION ...................................................... 340
DEFENSES .......................................................347
DEFENSES ......................................................... 340
DUE DILIGENCE ....................................................347
FRAUD OR MISREPRESENTATION (FORMERLY DECEIT) . 340
ACTS OF PUBLIC OFFICERS ......................................347
SEDUCTION ........................................................ 340
ACCIDENT OR FORTUITOUS EVENT ............................347
UNJUST DISMISSAL .............................................. 340
DAMNUM ABSQUE INJURIA .................................... 348
AUTHORITY OF LAW ............................................. 348
INTERFERENCE WITH RELATIONS ...................341 ASSUMPTION OF RISK (VOLENTI NON FIT INJURA) ....... 348
KINDS ................................................................ 341 LAST CLEAR CHANCE ............................................ 349
PRESCRIPTION ................................................... 349
FAMILY RELATIONS .........................................341 WAIVER ............................................................. 349
ALIENATION OF AFFECTION ..................................... 341 DOUBLE RECOVERY ............................................. 349
LIABILITY OF PARENTS, GUARDIANS OR KIN ................ 341 ACTIONS AVAILABLE TO VICTIMS OF NEGLIGENCE........ 350
LOSS OF CONSORTIUM .......................................... 342 EFFECT OF ACQUITTAL OF THE ACCUSED ON HIS CIVIL
CRIMINAL CONVERSATION (ADULTERY) .................... 342 LIABILITY ........................................................... 350
NO RESERVATION IS REQUIRED IN THE CRIMINAL CASE FOR
SOCIAL RELATIONS ........................................ 342 THE FILING OF CIVIL ACTION ARISING FROM QUASI-DELICT
MEDDLING WITH OR DISTURBING FAMILY RELATIONS .. 342 ....................................................................... 350
INTRIGUING TO CAUSE ANOTHER TO BE ALIENATED FROM
HIS FRIENDS ....................................................... 342
Special Liability in Particular
ECONOMIC RELATIONS .................................. 343
INTERFERENCE WITH CONTRACTUAL RELATIONS ........ 343
Cases ................................. 350
UNFAIR COMPETITION .......................................... 343
PRODUCTS LIABILITY ...................................... 351
REQUISITES OF LIABILITY........................................ 351
POLITICAL RELATIONS ................................... 343 BURDEN OF PROOF ............................................... 351
VIOLATION OF RIGHT TO SUFFRAGE.......................... 343
WHO MAY RECOVER .............................................. 351
VIOLATION OF OTHER POLITICAL RIGHTS (FREEDOM OF
CONSUMER ACT ................................................... 351
SPEECH, PRESS, ASSEMBLY AND PETITION, ETC.) ....... 344
NUISANCE ...................................................... 354

Negligence ........................ 344 LIABILITY FOR NEGLIGENCE VS. LIABILITY FOR NUISANCE
....................................................................... 354
ELEMENTS ...................................................... 344
NUISANCE PER SE ................................................ 354
NUISANCE PER ACCIDENCE .................................... 355
TEST OF NEGLIGENCE..................................... 344
PUBLIC NUISANCE ................................................ 355 THE DAMAGES MUST BE PROVEN BY
PRIVATE NUISANCE .............................................. 355 COMPETENT EVIDENCE (ADMISSIBLE OR
ATTRACTIVE NUISANCE ......................................... 355 PROBATIVE) ................................................... 362
VIOLATION OF CONSTITUTIONAL RIGHTS ...... 356 DEGREE OF CERTAINTY REQUIRED AS TO: FACT,
VIOLATION OF CIVIL LIBERTIES ................................ 356 CAUSE AND AMOUNT OF DAMAGES .............. 363
VIOLATIONS OF RIGHTS COMMITTED BY PUBLIC OFFICERS
....................................................................... 356 NOT SPECULATIVE ......................................... 363
PROVINCES, CITIES, AND MUNICIPALITIES ................. 357
OWNERS OF MOTOR VEHICLES ................................ 357 COMPONENTS ................................................ 363
PROPRIETOR OF BUILDING OR STRUCTURE ................ 358
HEAD OF FAMILY.................................................. 359 VALUE OF LOSS; UNREALIZED PROFIT .......... 363
ATTORNEY’S FEES AND EXPENSES OF

Strict Liability .................... 359 LITIGATION..................................................... 363
POSSESSOR AND USER OF AN ANIMAL ......... 359 INTEREST ....................................................... 364

APPLICABILITY OF PROVISION ................................. 359 INTEREST ACCRUES WHEN ..................................... 364
BASIS ................................................................ 359 COMPOUNDING OF INTEREST ................................. 364
POSSIBLE DEFENSES AGAINST THIS LIABILITY ............. 359 DETERMINATION OF LEGAL INTEREST ...................... 364
SCOPE OF PROVISION ........................................... 359
START OF DELAY ............................................ 365
NUISANCE ...................................................... 359
CLASSES ............................................................ 359 EXTENT OR SCOPE OF ACTUAL DAMAGES ..... 365
EASEMENT AGAINST NUISANCE............................... 360
IN CONTRACTS AND QUASI-CONTRACTS....... 365
PRODUCTS LIABILITY .................................... 360
IN CRIMES AND QUASI-DELICTS .................... 366
CONSUMER ACT ............................................. 360
Moral Damages ................ 366

Damages ........................... 362 WHEN AWARDED ............................................367
DEFINITION .................................................... 362
REQUISITES FOR
DAMAGES VS. INJURY..................................... 362 AWARDING MORAL DAMAGES........................367
ELEMENTS FOR RECOVERY OF DAMAGES ...... 362 GENERAL PRINCIPLES OF RECOVERY .............367
CLASSIFICATION ............................................. 362 WHEN RECOVERABLE .................................... 368
ACCORDING TO PURPOSE ...................................... 362
IN SEDUCTION, ABDUCTION, RAPE AND OTHER LASCIVIOUS
ACCORDING TO MANNER OF DETERMINATION ............ 362
ACTS ................................................................ 368
SPECIAL AND ORDINARY........................................ 362
IN ACTS REFERRED TO IN ARTS. 21, 26, 27, 28, 29, 32,
34 &35, NCC ..................................................... 368
IN CASES OF MALICIOUS PROSECUTION .................... 370
Actual and Compensatory
Damages ........................... 362 Nominal Damages ............370
REQUISITES .................................................... 362
REQUISITES AND CHARACTERISTICS............. 370
WHEN IS A PERSON ENTITLED ...................... 362
WHEN AWARDED ........................................... 370
ALLEGED AND PROVED WITH CERTAINTY...... 362
Temperate Damages ........370 EXEMPLARY WITH MORAL, TEMPERATE, LIQUIDATED OR
COMPENSATORY ..................................................375
REQUISITES ..................................................... 371 DAMAGES THAT MUST STAND ALONE ............375

NOMINAL DAMAGES ..............................................376
Liquidated Damages.......... 371

REQUISITES AND CHARACTERISTICS .............. 371
RULES GOVERNING BREACH OF CONTRACT ... 371
Exemplary Or Corrective
Damages ............................. 371
WHEN RECOVERABLE..................................... 372
IN CRIMINAL OFFENSES ........................................ 372
IN QUASI-DELICTS................................................ 372
IN CONTRACTS AND QUASI-CONTRACTS.................... 372
REQUISITES ........................................................ 372
DAMAGES IN CASE OF DEATH RE. CRIMES AND QUASI-
DELICTS............................................................. 373
Graduation of Damages ... 373

DUTY OF THE INJURED PARTY........................ 373
BURDEN OF PROOF ........................................ 374
RULES ............................................................. 374

IN CRIMES .......................................................... 374
IN QUASI-DELICTS................................................ 374
CONTRIBUTORY NEGLIGENCE ................................. 374
PLAINTIFF’S NEGLIGENCE ...................................... 374
IN CONTRACTS, QUASI-CONTRACTS AND QUASI-DELICTS
....................................................................... 374
INSTANCES OF GROUNDS FOR MITIGATION OF DAMAGES
....................................................................... 374
RULE WHEN CONTRACTING PARTIES ARE IN PARI DELICTO
....................................................................... 375
LIQUIDATED DAMAGES .................................. 375
COMPROMISE ................................................. 375
Miscellaneous Rules ......... 375

DAMAGES THAT CANNOT CO-EXIST ............... 375
NOMINAL WITH OTHER DAMAGES ............................ 375
ACTUAL AND LIQUIDATED ...................................... 375
DAMAGES THAT MUST CO-EXIST ................... 375

UP COLLEGE OF LAW INTRODUCTION BAR OPERATIONS COMMISSION
PAGE 1
Effect and Application of (b) Impairment of contract

(2) In case of remedial statutes
Laws (3) In case of curative statutes
(4) In case of laws interpreting others
(5) In case of laws creating new rights [Bona v.
The Civil Code took effect on August 30, 1950 Briones (1918)]
(6) Penal Laws favorable to the accused
WHEN LAWS TAKE EFFECT
Art. 2. Laws shall take effect after fifteen days ACTS CONTRARY TO LAW
following the completion of their publication in the
Art. 5. Acts executed against the provisions of
Official Gazette, unless it is otherwise provided. This
mandatory or prohibitory laws shall be void, except
Code shall take effect one year after such
when the law itself authorizes their validity. (4a)
publication. (1a)
WAIVER OF RIGHTS
Tañada v. Tuvera (1986):
(a) The clause "unless it is otherwise provided" refers Art. 6. Rights may be waived, unless the waiver is
to the date of effectivity and not to the contrary to law, public order, public policy, morals, or
requirement of publication itself, which cannot in good customs, or prejudicial to a third person with a
any event be omitted. right recognized by law. (4a)
(b) Publication is indispensable in every case, but the
legislature may in its discretion provide that the Waiver – the relinquishment of a known right with
usual fifteen-day period shall be shortened or both knowledge of its existence and an intention to
extended. relinquish it. [Portland v. Spillman]
(c) EXCEPTION: interpretative regulations and those
internal in nature Exceptions:
(1) If the waiver is contrary to law, public order,
IGNORANCE OF THE LAW public policy, morals or good customs
Art. 3. Ignorance of the law excuses no one from (2) If the waiver prejudices a third person
compliance therewith. (2) (3) If the alleged rights do not yet exist
(4) If the right is a natural right
(a) Conclusive Presumption – That everyone knows
the law, even if they have no actual knowledge of REPEAL OF LAWS
the law Art. 7. Laws are repealed only by subsequent ones,
(b) Mistake of Fact & Difficult Questions of Law - and their violation or non-observance shall not be
These may excuse a party from the legal excused by disuse, or custom or practice to the
consequences of his conduct; but not ignorance contrary.
of law.
(c) In specific instances provided by law, mistake as When the courts declared a law to be inconsistent
to difficult legal questions has been given the with the Constitution, the former shall be void and
same effect as a mistake of fact. (Tolentino) the latter shall govern.
(d) The laws referred to by this article are those of
the Philippines. There is no conclusive Administrative or executive acts, orders and
presumption of knowledge of foreign laws. regulations shall be valid only when they are not
(Tolentino) contrary to the laws or the Constitution. (5a)
RETROACTIVITY OF LAWS TWO KINDS OF REPEAL OF LAW [Tolentino]

Art. 4. Laws shall have no retroactive effect, unless (1) Express or Declared – contained in a special
the contrary is provided. (3) provision of a subsequent law
(2) Implied or Tacit – takes place when the provisions
General Rule: All statutes are to be construed as of the subsequent law are incompatible or
having only prospective operation inconsistent with those of an earlier law.
Exceptions JUDICIAL DECISIONS

(1) When the law itself expressly provides Art. 8. Judicial decisions applying or interpreting the
Exceptions to Exception: laws or the Constitution shall form a part of the legal
(a) Ex post facto law system of the Philippines. (n)
PAGE 2
(a) Jurisprudence cannot be considered as an APPLICABILITY OF PENAL LAWS

independent source of law; it cannot create law. Art. 14. Penal laws and those of public security and
(1 Camus 38 as cited in Tolentino) safety shall be obligatory upon all who live or sojourn
(b) But the Court’s interpretation of a statute in the Philippine territory, subject to the principles of
constitutes part of the law as of the date it was public international law and to treaty stipulations.
originally passed since the Court’s construction (8a)
merely establishes contemporaneous legislative
intent that the interpreted law carried into effect.
EXEMPTIONS UNDER INTERNATIONAL LAW (THEORY OF
[Senarillos v. Hermosisima (1956)]
EXTRATERRITORIALITY):
(1) When the offense is committed by a foreign
DUTY TO RENDER JUDGMENT
sovereign while in Philippine territory
Art. 9. No judge or court shall decline to render (2) When the offense is committed by diplomatic
judgment by reason of the silence, obscurity or representatives
insufficiency of the laws. (6) (3) When the offense is committed in a public or
armed vessel of a foreign country.
Exception:
This article does not apply to criminal prosecutions CONFLICT OF LAWS
because where there is no law punishing an act, the CONFLICT OF LAWS/ PRIVATE INTERNATIONAL LAW
case must be dismissed. [Tolentino] (a) It is a branch or part of Philippine Law which
regulates the application of foreign law within
PRESUMPTION AND APPLICABILITY OF CUSTOM Philippine jurisdiction in the resolution of cases
Art. 10. In case of doubt in the interpretation or involving foreign elements.
application of laws, it is presumed that the (b) It is that part of municipal law which governs
lawmaking body intended right and justice to prevail. cases involving a foreign element.
(n) (c) Private International Law is more commonly
known in other jurisdictions as conflict of laws
Art. 11. Customs which are contrary to law, public
order or public policy shall not be countenanced. (n) SOURCES
(1) Codes and statutes
Art. 12. A custom must be proved as a fact, according (2) Treaties and international conventions
to the rules of evidence. (n) (3) Treatises, commentaries, and studies of learned
societies
(4) Judicial decisions
LEGAL PERIODS
Art. 13. When the laws speak of years, months, days EXAMPLES OF CONFLICT OF LAW RULES IN THE PHILIPPINES
or nights, it shall be understood that years are of (1) Art. 15 CC: Lex Patriae
three hundred sixty-five days each; months, of thirty (2) Art. 1251 (par. 3) CC: Lex Domicili
days; days, of twenty-four hours; and nights from (3) Art. 16 CC: Lex Situs/ Lex Rei Sitae
sunset to sunrise. (4) Art. 17 (par. 1) CC: Lex Loci Contractus
(5) Art. 71 CC: Lex Loci Celebrationis
If months are designated by their name, they shall be (6) Art. 26 (par. 1) FC: Lex Loci Celebrationis
computed by the number of days which they (7) Art. 1306 CC: Lex Loci Intentionis
respectively have.
Art. 15. Laws relating to family rights and duties, or
In computing a period, the first day shall be to the status, condition and legal capacity of persons
excluded, and the last day included. (7a) are binding upon citizens of the Philippines, even
though living abroad. (9a)
POLICY ON LAST DAY BEING A LEGAL HOLIDAY/SUNDAY
(a) If the period arises by statute or orders by the Most civil law countries such as the Philippines
government, the last day will automatically be follow the National Law Theory:
considered the next working day It is the nationality or citizenship of the individual,
(b) If the period arises from a contractual which regulates the following:
relationship, the act will still be due on that Legal (a) Civil status
Holiday/Sunday (b) Capacity
(c) Condition
(d) Family rights and duties
PAGE 3
(e) Laws on Succession itself, governing law is the law of the state
(f) Capacity to succeed which has real interest
According to the Supreme Court, it is a conflict of RULE ON SUCCESSION

laws theory by virtue of which jurisdiction over the Extrinsic Validity [Arts. 17, 815-817, CC]
particular subject matter affecting a person is Place of
determined by the latter’s nationality. [Ellis vs. Applicable law
execution
Republic (1963)]
Philippines Philippine Law
Filipino Testator
RULE ON PROPERTY Foreign (1) Law of the place where he
Controlling Law — Lex Situs/Lex Rei Sitae Country may be (lex loci
celebrationis) [Art 815]
General Rule: Real and Personal Property is subject (2) Philippine law [see III
to the law of the country where it is situated (Art. 16) Tolentino 117]
Application of the Doctrine of Lex Situs/Lex Rei Sitae

Philippines (1) Philippine Law (Art. 17)
(1) The capacity to transfer or acquire property is
(2) Law of the country in
governed by Lex Situs.
which he is a citizen or
subject (lex nationali) [Art.
Note: Transfer of property to a foreigner who
817]
subsequently became a Filipino citizen shall be
Alien Testator
recognized [Llantino v Co Liong Chong]
Foreign (1) Law of the place in which
(2) The formalities of a contract to convey property Country he resides (lex domicilii)
are governed by Lex Situs (Arts. 816, (2) Law of his country (lex
17) nationali)
Exceptions to Lex Situs (3) Philippine law
(1) Transactions Not Affecting Transfer of Title or (4) Law of the place where
Ownership of Land: Lex Intentionis or Lex they were executed (lex
Voluntatis loci celebrationis)
(2) Contracts where Real Property Offered as Security:

The principal contract is the loan while the Note: Rule re: Joint Wills
mortgage of the land is only an accessory (1) Joint wills prohibited under Art. 818 executed by
(a) Mortgage - Lex Situs Filipinos in a foreign country shall not be valid in
(b) Loan Contract - Rules on ordinary contracts the Philippines even though authorized by the
laws of the country where they were executed.
(3) Intestate and Testamentary Succession: (Art. 819)
Intestate and testamentary successions shall be (2) Civil Code is silent as to the validity of a joint will
regulated by the national law of the decedent, executed by an alien in the Philippines. It is
with respect to the following [Art. 16(2); Art. 1039] suggested that it should not be probated if it
(a) Order of succession would affect the heirs in the Philippines.
(b) Amount of succession rights
(c) Intrinsic validity of the testamentary provisions Intrinsic Validity
(d) Capacity to succeed Intestate and testamentary successions shall be
regulated by the national law of the decedent, with
(4) Under a Policy-centered Approach: respect to the following (Art. 16(2); Art. 1039)
Forum court is not bound to look to the law of the (1) Order of succession
situs when the situs of the movable property is (2) Amount of successional rights
insignificant or accidental (3) Intrinsic validity of the testamentary provisions
(a) Questions relating to the validity and effect of (4) Capacity to succeed
the transfer of the movable property are
governed by the law of the place of principal Interpretation of Wills
use Governed by the National Law of the decedent.
(b) Where the issue involves considerations other
than the validity and effect of the transfer
PAGE 4
Revocation
Testator Applicable Law Art. 17. The forms and solemnities of contracts, wills,
and other public instruments shall be governed by
the laws of the country in which they are executed.
Philippine
Will is revoked in
the Philippines
Domiciliary
When the acts referred to are executed before the
Philippine Law diplomatic or consular officials of the Republic of the
Philippines in a foreign country, the solemnities
Non-domiciliary
established by Philippine laws shall be observed in
[Art. 829]
their execution.
(1) Philippine Law Prohibitive laws concerning persons, their acts or
Philippine (2) Law of the place of property, and those which have, for their object,
Will is revoked in a
Domiciliary revocation (lex loci

Foreign Country
public order, public policy and good customs shall

actus) not be rendered ineffective by laws or judgments
(1) law of the place where promulgated, or by determinations or conventions
the will was made agreed upon in a foreign country. (11a)
Non-domiciliary (2) law of the place in
[Art. 829] which the testator had
RULE ON EXTRINSIC VALIDITY OF CONTRACTS
his domicile at the
General Rule: Lex Loci Celebrationis
time of the revocation
The forms and solemnities of contracts xxx shall
be governed by the laws of the country in which
Probate of wills
they are executed [Art. 17]
Controlling Law:
The probate of a will being essentially procedural in
Note:
character, the law of the forum (lex fori) governs.
(1) Contracts Before Diplomatic/ Consular Officials:
The solemnities established by Philippine laws
Wills Proved and Allowed in a Foreign Country
shall be observed with respect to contracts
(1) A will proved and allowed in a foreign country in
executed before diplomatic or consular officials of
accordance with the laws of that country may be
the Republic of the Philippines in a foreign
allowed, filed, and recorded in the proper
country [Art. 17(2), FC]
Regional Trial Court in the Philippines (RULES
(2) Contracts entered Into by Letter/ Cablegram, etc.:
OF COURT, Rule 77, Sec.1)
A contract accepted by letter or cablegram is
(2) Requisites for Reprobate [Vda de Perez v Tolete,
presumed to have been entered into the place
232 SCRA 722]
where the offer was made. [Art. 1319(2)]
The following must be proved by competent
Three possible laws:
evidence:
(1) Lex Loci Contractus (Asked in 95, 02 BAR
(a) due execution of the will in accordance with the
EXAMINATIONS)
foreign laws
(a) Law of the place where the contract is made
(b) the testator had his domicile in the foreign
(b) Merits
country and not in the Philippines
(i) Relative ease in establishing
(c) the will has been admitted to probate in such
(ii) Certainty and stability
country
(c) Demerit - Unjust results when place of
(d) the laws of the foreign country on procedure and
making entirely incidental
allowance of wills
Note: To determine where the contract is made, we
Administration of Estates
look to the place where the last act is done which is
Territorial: governed by the law of the place where
necessary to bring the binding agreement into being
the administration takes place, and that is the law of
so far as the acts of the parties are concerned.
the country from which the administrator derives his
authority.
(2) Lex Loci Solutionis
(a) Law of the place of performance governs
Trusts
(b) Merit - Always connected to the contract in a
Extrinsic validity: Rule governing wills apply intrinsic
significant way
validity: lex situs since a trust involves property cf Art.
17
PAGE 5
(c) Demerit - Not helpful when the contract is

performed in 2 or more states with conflicting (2) Determination of Extrinsic Validity
laws Art. 26, FC. All marriages solemnized outside the
Philippines in accordance with the laws in force in
(3) Lex Loci Intentionis the country where they were solemnized, and valid
(a) Law intended by the parties there as such, shall also be valid in this country. Xxx
(b) Basis:
The contracting parties may establish such
stipulations, clauses, terms and conditions as Art. 2, Hague Convention. Formal requirements for
they may deem convenient, provided they are marriage are governed by the law of the state of
not contrary to law, morals, good customs, celebration.
public order, or public policy [Art. 1306]
(c) May be express or implied General Rule: Lex Loci Celebrationis
(i) Express - when the parties stipulate that the
contract be governed by a specific law, such Exceptions: The following marriages are void even if
law will be recognized unless there are valid in the country where celebrated [Art. 26, FC]:
cogent reasons for not doing so. (a) Those contracted by any party below 18 years of
(ii) Implied age even with the consent of parents or guardians
(a) Based on the contemporaneous and [Art. 35(1), FC]
subsequent acts of the parties (b) Bigamous or polygamous marriages not falling
(b) Often upheld with reference to the rule of under Art. 41, FC [Art. 35 (4), FC]
validity of contracts which presumes that (c) Those contracted thru mistake of one contracting
the parties contemplate to enter into a party as to the identity of the other [Art. 35(5), FC]
valid contract (d) Those subsequent marriage without recording in
the civil registry the judgment of annulment or
declaration of nullity, partition and distribution of
Art. 18. In matters which are governed by the Code of
properties and the delivery of the children’s
Commerce and special laws, their deficiency shall be
presumptive legitimes [Art. 35(6), FC]
supplied by the provisions of this Code.
(e) A marriage contracted by any party who, at the
time of the celebration, was psychologically
SPECIAL CONFLICT OF LAW RULES incapacitated to comply with the essential marital
MARRIAGE
obligations of marriage, even if such incapacity
becomes manifest only after solemnization [Art.
Definition: 36, FC]
Art. 1, FC. Marriage is a special contract of permanent (f) Incestuous marriages [Art. 37, FC]
union between a man and a woman entered into in (i) Marriages between ascendants and
accordance with law for the establishment of ascendants of any degree, whether legitimate
conjugal and family life. It is the foundation of the or illegitimate; and
family and an inviolable social institution whose (ii) Marriages between brothers and sisters,
nature, consequences, and incidents are governed by whether of the full or half-blood
law and not subject to stipulation, except that (g) Void marriages for reasons of public policy (Art. 38,
marriage settlements may fix the property relations FC)
during the marriage within the limits provided by this (i) Marriages between collateral blood relatives,
Code. whether legitimate or illegitimate, up to the
th
4 civil degree
Extrinsic Validity of Marriage (ii) Marriages between step-parents and step-
(1) Formal Requisites of Marriage under Philippine Law children.
[Art. 3, FC] (iii) Marriages between the adopting parent and
(a) Authority of the solemnizing officer adopted child
(b) Valid marriage license except in the cases (iv) Marriages between the surviving spouse of the
provided for in Chapter 2 of Title I adopting parent and the adopted child
(c) A marriage ceremony which takes place with (v) Marriages between the surviving spouse of the
the appearance of the contracting parties adopted child and the adopter
before the solemnizing officer and their (vi) Marriages between an adopted child and a
personal declaration that they take each other legitimate child of the adopter
as husband and wife in the presence of not (vii) Marriages between adopted children of the
less than two witnesses of legal age. same adopter
PAGE 6
(viii) Marriages between parties where one, with (2) Consular Marriages
the intention to marry the other, killed that Marriages between Filipino citizens abroad may
other person's spouse, or his or her own be solemnized by a consul-general, consul or vice
spouse. consul of the Republic of the Philippines [Art. 10,
FC].
Note: These exceptions put into issue the capacity of
the parties to enter into the marriage and therefore Effects of Marriage
relate to the substantive requirement for marriage (1) Personal relations between the spouses
and is governed by lex nationalii. (a) Governed by the national law of the parties
Intrinsic Validity of Marriage NOTE: If the spouses have different nationalities,

(refers to capacity of a person to marry) generally the national law of the husband may
(1) Intrinsic validity is determined by the parties’ prevail as long as it is not contrary to law, customs
personal law, which may be their domiciliary or and good morals of the forum.
national law.
(b) Under Philippine law, personal relations
Note: between the spouses include [Arts. 68, 70-71,
(a) Laws relating to Family rights and duties, FC]
Status, Condition or Legal capacity of persons (i) mutual fidelity
are binding on citizens of the Philippines, even (ii) respect
though living abroad [Art. 15] (iii) cohabitation
(b) When either or both of the contracting parties (iv) support
are citizens of a foreign country, it shall be (v) right of the wife to use the husband’s
necessary for them before a marriage license family name
can be obtained to submit a certificate of legal
capacity to contract marriage, issued by their (2) Property relations
respective diplomatic or consular officials [Art. (a) The Hague Convention declares that the
21, FC] governing law on matrimonial property is:
(c) Marriages enumerated under Art. 26(2), FC (i) The internal law designated by the spouses
are void even if valid in the country where before the marriage
celebrated. (ii) In the absence thereof, the internal law of
the state in which the spouses fix their
(2) Intrinsic requirements of marriage under habitual residence
Philippine Law [Art. 2, FC] (b) Rule under Philippine law [Art. 80, FC]
(3) The Hague Convention on Validity of Marriages (i) In the absence of a contrary stipulation in
allows a contracting state to refuse recognition of the marriage settlements, the property
3
the marriage in the ff. Cases (CR-M ): relations of the spouses shall be governed
(a) One of the parties did not freely Consent by Philippine laws, regardless of the place
(b) Spouses were Related, by blood or adoption of the celebration of the marriage and their
(c) One of the parties did not have the Mental residence.
capacity to consent
(d) One of the spouses was already Married (ii) Rule is inapplicable:
(e) One of the parties has not attained the (1) If both spouses are aliens
Minimum age, nor acquired the necessary (2) With respect to the extrinsic validity of
dispensation the contracts affecting property not
situated in the Philippines and executed
Note: in the country where the property is
(1) Rule on Proxy Marriages: located
(a) Proxy marriages, where permitted by the law (3) With respect to the extrinsic validity of
of the place where the proxy participates in contracts entered into in the Philippines
the marriage ceremony, are entitled to but affecting property situated in a
recognition in countries adhering to the lex foreign country whose laws require
loci celebrationis rule, at least insofar as different formalities for its extrinsic
formal validity is concerned validity.
(b) Internal Philippine law, however, does not
sanction proxy marriages.
PAGE 7
(c) Doctrine of Immutability of Matrimonial Republic v. Orbecido (2005): Paragraph 2 of Article 26

Property Regime: should be interpreted to include cases involving parties
The change of nationality on the part of the who, at the time of the celebration of the marriage
husband or wife does not affect the original were Filipino citizens, but later on, one of them
property regime EXCEPT when the law of becomes naturalized as a foreign citizen and obtains a
the original nationality itself changes the divorce decree. The Filipino spouse should likewise be
marital regime, hence, the property regime allowed to remarry as if the other party were a
has to change accordingly. foreigner at the time of the solemnization of the
marriage. The reckoning point is not the citizenship of
DIVORCE AND SEPARATION the parties at the time of the celebration of the
Rule under the Hague Convention marriage, but their citizenship at the time a valid divorce
The granting of divorce or separation must comply is obtained abroad by the alien spouse capacitating the
with the national law of the spouses and lex fori (law latter to remarry.
of the place where the application for divorce is
made). Validity of Foreign Divorce Between Foreigners
(1) A foreign divorce will be recognized in all
Divorce Decrees Obtained by Filipinos contracting states if, at the date of the institution
General Rule: Decrees of absolute divorce obtained of the proceedings (Hague Convention on the
by Filipinos abroad have no validity and are not Recognition of Divorce and Legal Separation):
recognized in Philippine Jurisdiction. (a) either spouse had his habitual residence
there;
Note: Statutory Bases (b) both spouses were nationals of that state; or
(a) Laws relating to Family rights and duties, or to (c) if only the petitioner was a national, he should
the Status, Condition and Legal capacity of have his habitual residence there
persons are binding upon citizens of the
Philippines, even though living abroad [Art. 15, (2) While there is no provision of law requiring
CC] Philippine courts to recognize a foreign divorce
(b) Prohibitive laws concerning persons, their acts decree between non-Filipinos such will be
or property, and those which have for their recognized under the principle of international
object public order, public policy and good comity, provided that it does not violate a
customs, shall not be rendered ineffective by strongly held policy of the Philippines.
laws or judgments, or by determinations or
conventions agreed upon in a foreign country. ANNULMENT AND DECLARATION OF NULLITY
[Art. 17(3), CC] Jurisdiction to Annul
(1) Vested in the court of the domicile of the parties
Exception: Art. 26(2), FC (2) Jurisdiction over the non-resident defendant is
Where a marriage between a Filipino citizen and a not essential
foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien Governing Law
spouse capacitating him or her to remarry, the (1) Lex loci celebrationis —determines the
Filipino spouse shall have capacity to remarry under consequences of any defect as to form
Philippine law (2) In general, the same applies with reference to
substantive or intrinsic validity. But with regard to
Van Dorn v. Romillo, Jr. (1985): Owing to the capacity of the parties to marry, national law is
Nationality Principle, only Philippine nationals are determinative.
covered by the policy against absolute divorces, the
same being considered contrary to our concept of
public policy and morality. However, aliens may
obtain divorces abroad, provided they are valid
according to their national law.
Human Relations
Llorente v. Court of Appeals (2000): Divorce obtained ABUSE OF RIGHT
by Petitioner from his first wife, after he was admitted Art. 19. Every person must, in the exercise of his
to US citizenship, is valid and recognized in our rights and in the performance of his duties, act with
jurisdiction as a matter of comity. justice, give everyone his due, and observe honesty
and good faith.
PAGE 8
ACTS CONTRARY TO LAW

Art. 20. Every person who, contrary to law, wilfully or
negligently causes damage to another, shall indemnify
the latter for the same.
ACTS CONTRA BONUS MORES

Art. 21. Any person who wilfully causes loss or injury to
another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter
for the damage.
Breach of promise to marry is not an actionable

wrong. [De Jesus vs. Syquia, 58 Phil., 866]
BUT damages may be recoverable
Wassmer v. Velez (1964): Mere breach of promise to

marry is not an actionable wrong. But to formally set
a wedding and go through all the above-described
preparation and publicity, only to walk out of it when
the matrimony is about to be solemnized, is quite
different. This is palpably and unjustifiably contrary
to good customs for which defendant must be held
answerable in damages in accordance with Article 21
aforesaid.
Baksh vs. Court of Appeals (1993): Article 21 may also

be applied in a breach of promise to marry where the
woman is a victim of moral seduction. Award of
damages pursuant to Article 21 is justified not
because of such promise to marry but because of the
fraud and deceit behind it and the willful injury to her
honor and reputation which followed thereafter.
Tanjanco v. Court of Appeals (1966): The conduct of a

woman of adult age, maintaining intimate sexual
relations with appellant, with repeated acts of
intercourse is incompatible with the idea of
seduction.
PRINCIPLE OF UNJUST ENRICHMENT

Art. 22. Every person who through an act of
performance by another, or any other means,
acquires or comes into possession of something at
the expense of the latter without just or legal
ground, shall return the same to him.
Art. 22 Art. 2154

(Accion in Rem Verso) (Solutio Indebiti)
Not necessarily a Payment should be
mistake in payment made by mistake
PAGE 9
UP COLLEGE OF LAW PERSONS & FAMILY RELATIONS BAR OPERATIONS COMMISSION
Persons and Personality General rule: Incapacitated persons are not exempt
from certain obligations arising from his acts or
property relations.
CAPACITY TO ACT
CIVIL PERSONALITY Minority
Art. 37. Juridical capacity, which is the fitness to be RA 6809 (1989): An act lowering the age of majority
the subject of legal relations, is inherent in every from twenty-one to eighteen years.
natural person and is lost only through death.
Capacity to act, which is the power to do acts with Effects on Contracts
legal effect, is acquired and may be lost. (1) They cannot give consent to a contract [Art. 1327
(1)]
(2) A contract where one of the parties is a minor is
Juridical Capacity Capacity to Act voidable [Art. 1390(1)]
(3) A contract is unenforceable when both of the
Fitness of man to be the Power to do acts with parties are minors (incapable of giving consent)
subject of legal relations legal effect [Art. 1403(3)]
Passive Active (4) Minority cannot be asserted by the other party in
Aptitude for the Holding Aptitude for the Exercise an action for annulment [Art. 1397]
and Enjoyment of rights of rights (5) Not obliged to make restitution except insofar as
he has been benefited [Art. 1399]
Inherent in every natural Must be acquired
(6) Minor has no right to demand the thing/price
person
voluntarily returned by him [Art. 1426]
Lost upon death Lost through death and
(7) Minor has no right to recover voluntarily paid sum
other causes
or delivered thing, if consumed in good faith [Art.
Can exist without Must exist with juridical 1427]
capacity to act capacity (8) Must pay reasonable amount for necessaries
Cannot be limited or May be restricted or delivered to him [Art. 1489]
restricted limited
Note: Juridical capacity can exist even without Mercado v. Espiritu, (1918):
capacity to act; the existence of the latter implies Estoppel works against minors who misrepresent their
that of the former. ages in a contract and are compelled to comply with
its terms. (active misrepresentation done by minors).
RESTRICTIONS ON CAPACITY TO ACT
Bambalan v. Maramba, (1928):
Art. 38. Minority, insanity or imbecility, the state of When a minor made no active misrepresentation as to
being a deaf-mute, prodigality and civil interdiction his minority and such minority is known to the other
are mere restrictions on capacity to act, and do not party, the contract is voidable (Art. 1403) as to the
exempt the incapacitated person from certain minor.
obligations, as when the latter arise from his acts or
from property relations, such as easements. Braganza v. Villa Abrille, (1959):
Minors are obliged to make restitution insofar as they
Art. 39. The following circumstances, among others, have been benefited (Art. 1399).
modify or limit capacity to act: age, insanity,
imbecility, the state of being a deaf-mute, penalty, Effects on Marriage
prodigality, family relations, alienage, absence, (1) May not yet contract marriage [Art. 5, FC].
insolvency and trusteeship. The consequences of (2) Marriages, where one of the parties is below 18,
these circumstances are governed in this Code, other even with the consent of parents/guardians, are
codes, the Rules of Court, and in special laws. VOID [Art. 35, FC]
Capacity to act is not limited on account of religious Insanity

belief or political opinion. Insanity includes many forms of mental disease,
either inherited or acquired. A person may not be
A married woman, twenty-one years of age or over, is insane but only mentally deficient (idiocy, imbecility,
qualified for all acts of civil life, except in cases feeble-mindedness).
specified by law.
PAGE 10
Effect on Contracts Civil interdiction

(1) Incapacity to give consent to a contract [Art. (1) It is an accessory penalty imposed upon persons
1327(2)] who are sentenced to a principal penalty not
(2) Contracts entered into during lucid intervals are lower than reclusion temporal (Art. 41, RPC).
valid [Art. 1328] (2) Offender is deprived of rights of parental
(3) Restitution of benefits [Art. 1399] authority, or guardianship, of marital authority, of
(4) Voidable if one of the parties is insane [Art. 1390] the right to manage his property and of the right
(5) Unenforceable if both of the parties are insane to dispose of such (Art. 34, RPC)
(Art. 1403 (3)) (3) For the validity of marriage settlements, the
participation of the guardian shall be
Effect on Crimes indispensable (Art. 123)
(1) General rule: EXEMPTED from criminal liability
(2) Exception: Acted during lucid interval Family relations
(1) Justifying circumstance if acted in defense of
Effect on Marriage person/rights of spouse, ascendants,
(1) May be annulled if either party was of unsound descendants, brothers/sisters, and other relatives
th
mind unless the such party after coming to up to the 4 civil degree [Art. 11(2), RPC]
reason, freely cohabited with the other [Art. 45(2), (2) Mitigating circumstance if acted in the immediate
FC] vindication of a grave offense/felony committed
(2) Action for annulment of marriage must be filed by against his spouse, ascendants or relatives of the
the sane spouse who had no knowledge of the same civil degree [Art. 13(5), RPC]
other’s insanity, or by any relative/guardian of the (3) Incestuous and void marriages:
insane before the death of either party; or by the (a) Between ascendants and descendants of any
insane spouse during a lucid interval or after degree;
regaining sanity [Art. 47(2), FC] (b) Between brothers and sisters, whether full or
half-blood. [Art. 37, FC]
State of Being Deaf-Mute (4) Donations/grants of gratuitous advantage
(1) Cannot give consent to a contract if he/she also between spouses during the marriage shall be
does not know how to write (Art. 1327(2), CC) VOID, except moderate gifts during family
(2) Can make a valid WILL, provided: he must occasions [Art. 87, FC]
personally read the will. The contents of the same (5) Descendants cannot be compelled to testify in a
have either been read personally by him or criminal case, against his parents and
otherwise communicated to him by 2 persons grandparents
(Art. 807, CC) (a) UNLESS: crime was against the descendant
(3) Cannot be a witness to the execution of a will (Art. OR by one parent against the other [Art. 215,
820, CC) FC]
(4) Voidable if one of the parties is deaf-mute and (6) Spouses cannot sell property to each other, except:
does not know how to write (a) Absolute separation is agreed upon in the
(5) Unenforceable if both of the parties are deaf- marriage settlements
mutes and does not know how to write (b) Judicial separation of property [Art. 1490]
Prodigality Absence
Martinez v. Martinez, (1902): Art. 390. After an absence of seven years, it being
A spendthrift or a prodigal is “a person, who, by unknown whether or not the absentee still lives, he
excessive drinking, gambling, idleness or debauchery shall be presumed dead for all purposes, except for
of any kind shall so spend, waste or lessen his estate as those of succession.
to expose himself or his family to want or suffering.”
The acts of prodigality must show a morbid state of The absentee shall not be presumed dead for the
mind. purpose of opening his succession till after an absence
of ten years. If he disappeared after the age of
Note: It is not the circumstance of prodigality, but the seventy-five years, an absence of five years shall be
fact of being under guardianship that restricts sufficient in order that his succession may be
capacity to act. opened. (n)
PAGE 11
Art. 391. The following shall be presumed dead for all Period of Conception = the first 120 days of the 300
purposes, including the division of the estate among days preceding the birth of the child.
the heirs:
A conceived child can acquire rights while still in the
1. A person on board a vessel lost during a sea voyage, mother’s womb. It can inherit by will or by intestacy.
or an aeroplane which is missing, who has not been
heard of for four years since the loss of the vessel or Geluz v CA, (1961):
aeroplane; An aborted fetus had conditional personality but never
acquired legal rights/civil personality because it was
2. A person in the armed forces who has taken part in not alive at the time of delivery from the mother’s
war, and has been missing for four years; womb. No damages can be claimed in behalf of the
unborn child.
3. A person who has been in danger of death under
other circumstances and his existence has not been Complete respiration = test/sign of independent life
known for four years.
Death
Article 124, FC: Art. 42. Civil personality is extinguished by death.
(1) Administration and enjoyment of the CPG shall The effect of death upon the rights and obligations
belong to both spouses jointly. of the deceased is determined by law, by contract
(2) In case of disagreement, husband’s decision shall and by will
prevail, subject to recourse to the court by the
wife for proper remedy (within 5 years from date
Criminal liability ends with death BUT civil liability
of contract implementing such decision)
may be charged against the estate [People v. Tirol,
(3) If one spouse is incapacitated/unable to
(1981)].
administer, sole powers of administration may be
assumed by the other spouse.
(4) General Rule: This power does not include Art. 43. If there is a doubt, as between two or more
disposition/encumbrance. persons who are called to succeed each other, as to
which of them died first, whoever alleges the death
Exception: Judicial authority or written consent of of one prior to the other, shall prove the same; in the
other spouse. absence of proof, it is presumed that they died at the
same time and there shall be no transmission of
Birth rights from one to the other.
General Rule: Birth determines personality [Art. 40].
Death extinguishes civil personality [Art. 42]. Note: Article 43 provides a statutory presumption
when there is doubt on the order of death between
Exception: A “conceived child shall be considered persons who are called to succeed each other (only).
born for all purposes that are FAVORABLE to it,
provided it be born later” [Art. 40, 2nd clause] with The statutory presumption of Article 43 was not
the following circumstances: applied due to the presence of a credible eyewitness
as to who died first [Joaquin v. Navarro, (1948)]
Intra-Uterine Life When Considered Born Compare Art. 43 with Rule 131, Sec. 3 (jj), presumption
of Survivorship.
7 months or more Alive upon delivery
Less than 7 months Alive only after
completion of 24 hours Art. 43 Rule 131, Sec. 3 (jj)
from delivery
Only use the presumptions when there are no facts
Birth = complete removal of the fetus from the to get inferences from
mother’s womb; before birth, a fetus is merely part of Only use for succession Cannot be used for
the mother’s internal organs. purposes succession purposes
In any circumstance Only during death in
Personality of Conceived Child calamities, wreck, battle
(1) Limited = only for purposes FAVORABLE to it. or conflagration
(2) Conditional = it depends upon the child being
born alive later.
PAGE 12
Presumption of Survivorship in the Rules of Court

(Rule 131, sec. 3, (jj.) Family Code
The Family Code took effect on August 3, 1988.
Age Presumed Survivor Marriage

Both under 15 Older
REQUISITES
Both above 60 Younger
NATURE OF MARRIAGE, ART. 1
One under 15, the other One under 15
above 60 Art. 1, FC. Marriage is a special contract of permanent
Both over 15 and under Male union between a man and a woman entered into in
60; different sexes accordance with law for the establishment of
conjugal and family life. It is the foundation of the
Both over 15 and under Older family and an inviolable social institution whose
60; same sex nature, consequences, and incidents are governed by
One under 15 or over One between 15 and 60 law and not subject to stipulation, except that
60, the other between marriage settlements may fix the property relations
those ages during the marriage within the limits provided by this
Code.
DOMICILE AND RESIDENCE OF PERSON
FOR NATURAL PERSONS: KINDS OF REQUISITES
The place of their habitual residence [Art. 50] (1) Essential Requisites (Art. 2)
(a) Legal Capacity of the contracting parties, who
FOR JURIDICAL PERSONS: must be a male and a female
The place where their legal representation is (b) Consent (of the parties) freely given in the
established, or where they exercise their primary presence of a solemnizing officer.
functions, unless there is a law or other provision that
fixes the domicile [Art. 51] (2) Formal Requisites (Art. 3)
(a) Authority of solemnizing officer
DOMICILE VS. RESIDENCE (b) A valid marriage license
While domicile is permanent (there is intent to (c) Except: Marriages in articulo mortis or when
remain), residence is temporary and may be changed one or both parties are at the point of death
anytime (there is no necessary intent to remain). (d) Marriage Ceremony:
(i) Appearance of contracting parties in the
REQUISITES OF DOMICILE [Callejo v. Vera] presence of a solemnizing officer
(1) Physical Presence in a fixed place (ii) Personal declaration that they take each
(2) Intent to remain permanently (animus manendi) other as husband and wife in the presence of
not less than 2 witnesses
KINDS OF DOMICILE
(1) Domicile of Origin - domicile of parents of a EFFECT OF ABSENCE OF REQUISITES
person at the time he was born.
(2) Domicile of Choice Absence Defect or Irregularity
(a) Domicile chosen by a person, changing his
domicile of origin. Effect
(b) A 3rd requisite is necessary – intention not to Void Voidable
return to one’s domicile as his permanent
place. ESSENTIAL REQUISITES
(3) Domicile by Operation of Law (i.e., Article 69,
domicile of minor) Age
(a) A married woman does not lose her domicile Legal Capacity [Art. 5]
to her husband. (Romualdez-Marcos vs. Male or female 18 years old and above, not under any
Comelec (1995)) impediments mentioned in Art. 37 (incestuous
marriage) & Art. 38 (marriage against public policy),
may contract marriage.
PAGE 13
Must be male and female Note: In a marriage in articulo mortis, when one or
Jones v Hallahan, (1973): Application for marriage both parties are unable to sign the marriage
license was denied since marriage is defined by law as certificate, it shall be sufficient for one of the
a contract entered into between a man and a woman. witnesses to write the name of said party, which shall
be attested by the solemnizing officer. (Art. 6, par. 2)
Goodridge v. Dept. of Public Health, (2003): Same-sex
couples should not be denied the same benefits as Places where marriage SHALL be publicly solemnized:
heterosexual couples; the right to marry includes the (CCO)
right to choose who to marry. (1) Chambers of the judge or in open court
(2) Church, chapel, or temple
Silverio v Republic, (2007): Changing of gender in one’s (3) Office of the consul-general, consul, or vice-
birth certificate was denied; otherwise, it would result consul [Art. 8]
in confusion and would allow marriage between
persons of the same sex which is in defiance of the law, Exceptions:
as marriage is a union between a man and a woman. (1) Marriages performed in articulo mortis or in
remote places. [Art. 29]
Note: The best source for citing the requirement (of (2) Where both parties request in writing that
male/female) is still statutory, as provided explicitly marriage be solemnized at a place designated by
in the Family Code. them.
Consent freely given Non-compliance with this requirement does not

invalidate the marriage (premise: more witnesses =
People v. Santiago, (1927): A marriage entered into by a more people can notify officer of impediments to
person whose real intent is to avoid prosecution for marriage).
rape is void for total lack of consent. The accused did
not intend to be married. He merely used such Who may solemnize marriages
marriage to escape criminal liability. Who may solemnize marriage: (JC-SPAMM)
(1) Incumbent member of the Judiciary within his
Eigenmann v. Guerra (1964): There was no reasonable jurisdiction. [Art. 7]
and well-grounded fear of an imminent and grave evil (2) Priest, Rabbi, Imam or Minister of any Church or
upon him or his property, father-in-law’s words were Religious Sect. Must be:
merely an admonition typical of concerned parents. (a) Duly authorized by his church or religious sect
(b) Registered with the civil registrar general
Ceremony (c) Acting within the limits of the written
Marriage Ceremony authority granted to him by his church or
No prescribed form or religious rite for the religious sect.
solemnization of marriage is required. (Art. 6) (d) At least one of the contracting parties belongs
to the solemnizing officer’s church or religious
The couple's written agreement where they declare sect. [Art. 7]
themselves as husband and wife, signed by them (3) Ship Captain or Airplane Chief may solemnize a
before a judge and two capable witnesses, even marriage in articulo mortis between passengers
though it was independently made by them, still or crew members [Art. 7, 31]
counts as a valid ceremony. [Martinez v Tan, (1909)] (4) A Military commander of a unit may solemnize
marriages in articulo mortis between persons
Minimum requirements prescribed by law: (AP-PMS) within the zone of military operation. (Art. 7, 32)
(1) Appearance of contracting parties personally (5) Consul-general, consul or vice-consul may
before the solemnizing officer [Art. 3] solemnize marriages between Filipino citizens
(2) Personal declaration that they take each other as abroad. (Art. 7, 10)
husband and wife. [Art. 3] (6) Municipal and City Mayors (LGC sec. 444 and
(3) Presence of at least two witnesses of legal age. 455)
[Art. 3]
(4) The declaration shall be contained in the Exceptions – Art. 35
Marriage certificate. [Art. 6] (1) Marriage is void when solemnized by any person
(5) Marriage certificate shall be Signed by the not legally authorized to perform marriages
contracting parties and their witnesses and unless either or both parties believed in good faith
attested by the solemnizing officer. [Art. 6] that the solemnizing officer had legal authority to
do so. [Art. 35 (2)]
PAGE 14
(2) Absence & Irregularity of Authority of a marry each other. [Art. 34, Ninal vs. Badayog
solemnizing officer (2000)]
Lack of valid notification of both parties desiring a Requisites for the 5-year cohabitation to be valid for the
ceremony in a remote place was held to be only a exemption from acquiring a marriage license
mere IRREGULARITY [Navarro vs. Domagtoy (1996)] (1) The man and woman must have been living
together as husband and wife for at least five
Respondent judge was faulted for solemnizing a years before the marriage;
marriage outside his territorial jurisdiction. Also, (2) The parties must have no legal impediment to
presentation of the marriage license subsequent to marry each other;
the solemnization of marriage will not cure the (3) The fact of absence of legal impediment between
defect. [Arañes v. Occiano (2002)] the parties must be present at the time of
marriage;
License required (4) The parties must execute an affidavit stating that
General Rule: License required they have lived together for at least five years
[and are without legal impediment to marry each
Article 9 - Issued by local registrar of city or other]; and
municipality where either contracting party (5) The solemnizing officer must execute a sworn
habitually resides statement that he had ascertained the
qualifications of the parties and that he had
Article 11 - Each contracting party should file found no legal impediment to their marriage.
separately. [Borja-Manzano vs. Judge Sanchez (2001)]
Article 20 - License valid in any part of the Marriage certificate

Philippines for 120 days from date of issue,
automatically cancelled at the expiration of such Absence and irregularity of marriage license and
period. contract
Republic v. CA and Castro (1994): Issuance of the Civil
Foreign National Registrar of a Certificate of Due Search and Inability to
When either or both parties are foreign nationals: Find the application of a marriage license certifies the
Certificate of legal capacity to contract marriage, license’s inexistence, thus rendering the marriage
issued by a diplomatic or consular official, shall be VOID.
submitted before a marriage license can be obtained
[Art. 21]
Moreno v. Bernabe (1995): Before a marriage can be
Stateless persons or refugees from other countries: solemnized, a valid marriage license must be
affidavit stating circumstances showing capacity to presented first, otherwise, the marriage is VOID.
contract marriage, instead of cert. of legal capacity
[Art. 21] People v. Borromeo (1984): Non-existence of a
marriage contract does not invalidate the marriage as
Exceptions long as all the requisites for its validity are properly
(1) Marriage in articulo mortis [Art. 27] complied with.
(a) The marriage may be solemnized without the
necessity of a marriage license. Things to do at the local civil registrar:
(b) It remains valid even if ailing party survives. (1) File an application of marriage license at the
(2) Between passengers or crew members in a ship proper local civil registrar. [Art. 11]
or airplane [Art. 31] (2) Present birth or baptismal certificate for proof of
(3) Persons within a military zone [Art. 32] age. [Art. 12]
(4) Marriage in Remote and inaccessible places [Art. (3) If aged 18-21 years, present parental consent.
28] [Art. 14]
(5) Marriages by Muslims and Ethnic cultural (4) If aged 21-25, present parental advice. [Art. 15]
minorities provided they are solemnized in (5) If aged 18-25, present certificate of marriage
accordance with their customs, rites or practices. counseling from your priest. [Art. 16]
[Art. 33] (6) (PD 965) Attend family planning seminar or get a
(6) Marriage by parties who have Cohabited for at brochure regarding family planning
least 5 years without any legal impediment to (7) Pay the required fees. [Art 19]
PAGE 15
(8) If foreigner, present certificate of legal capacity

issued by diplomat or consular officials. (Art. 21) Essential requisites Formal requisites
Marriage Certificate abroad (Art 15, CC) (Art. 26, CC)

Where parties declare that they take each other as Foreign marriages void Foreign marriages may
husband and wife; contains the ff: under Phil law due to lack be void under Phil law
(1) Full name, sex, age of party of an essential requisite, due to absence of a
(2) Citizenship, religion, habitual residence even if valid under foreign formal requisite under
(3) Date and precise time of celebration of laws, will not be foreign laws.
marriage recognized
(4) That marriage license was properly issued
(except in marriages exempt from ML req’t) PROOF OF FOREIGN MARRIAGE in order that it may be
(5) That parental consent was secured, when upheld:
required (1) Provisions of the foreign law
(6) That requirement as to parental advice was (2) Celebration of the marriage in accordance with
complied with, when required said provisions
(7) That parties have entered into marriage
settlements, if any [Art. 22] FOREIGN DIVORCES
(1) Those obtained by Filipino citizens are void under
Note: Not an essential or formal requisite without Philippine law.
which the marriage will be void [Madridejo v. de Leon (2) If the foreign spouse obtains a valid foreign
(1930)] divorce, the Filipino spouse shall have capacity to
remarry under Philippine law. (Art. 26)
Best evidence that a marriage does exist. [Tenebro v.
CA (2004)] Van Dorn v. Romillo (1985):
A divorce obtained by the foreign spouse in
EFFECT OF MARRIAGES CELEBRATED ABROAD accordance with the said spouse’s national law is
AND FOREIGN DIVORCE recognized in the Philippines and releases Filipino
spouse from their marriage.
MARRIAGES CELEBRATED ABROAD
General Rule: Marriages solemnized abroad in Quita v. Dandan (1998):
accordance with the laws in force in that country The citizenship of the spouses at the time of the
shall be valid in the Philippines. [Art 26] divorce determines their capacity to obtain a valid
divorce. Since the divorce and the naturalization of W
Exceptions: occurred within the same year, the case was remanded
(1) Marriage between persons below 18 years old to determine which occurred first.
[Art. 35(1)]
(2) Bigamous or polygamous marriage [Art. 35(4)] Llorente v. CA (2000):
(3) Mistake in identity [Art. 35 (5)] Citizenship at the time the divorce is obtained
(4) Marriages void under Article 53 [Art. 35 (6)] determines its validity. Since H was no longer a
(5) Psychological incapacity [Art. 36] Filipino citizen when he divorced W, the nationality
(6) Incestuous marriages [Art. 37] principle did not apply to him anymore and the divorce
(7) Marriage void for reasons of public policy [Art. 38] is valid.
Garcia v. Recio (2001):

Essential requisites Formal requisites A divorce decree obtained by the foreign spouse is
recognized under Phil law if it is executed in
Inherent in the parties, Requirements accordance with the foreigner’s national law. The
carried everywhere independent of the party must prove divorce as a fact and that said
parties divorce is obtained in conformity with the law allowing
Lex Nationalii – Laws Lex loci celebrationis- if it, before the Philippine courts can take judicial notice.
relating to family rights valid where celebrated,
and duties, or to the then valid everywhere; VOID AND VOIDABLE MARRIAGES
status, condition, and forms of contracting PRESUMPTION OF MARRIAGE
legal capacity of persons marriage are to be (1) Presumption in favor of a valid marriage [Art 220,
are binding upon Phil regulated by the law CC]
citizens even though living where it is celebrated.
PAGE 16
(2) The presumption that a man and a woman (4) Bigamous or polygamous marriages not falling
deporting themselves as husband and wife have under Article 41 (Art. 41: subsequent marriage by
entered into a lawful contract of marriage is present spouse who obtained a declaration of
satisfactory if uncontradicted. [Sec. 3 (aa), Rule presumptive death for absent spouse prior to the
131, ROC] subsequent marriage)
(3) In marriages of exceptional character, the (5) There is a mistake as to the identity of the other
existence of the marriage is presumed, even in contracting party
the TOTAL ABSENCE of a marriage license. [Vda. (6) Subsequent marriages that are void under Article
De Jacob v CA (1999)] 53 (Non-compliance with Art. 52)
(4) If a marriage certificate is missing, and all means
HAVE NOT YET BEEN EXHAUSTED to find it, Psychological incapacity
then the marriage is presumed to exist [Sevilla v Contracted by any party who, at the time of the
Cardenas (2006)] celebration, was psychologically incapacitated to
comply with the essential marital obligations of
Absence of a marriage certificate is not proof of marriage, even if such incapacity becomes manifest
absence of marriage. To prove the fact of marriage, only after its solemnization [Art. 36]
the following would constitute competent evidence:
(1) the testimony of witnesses to matrimony; (2) the Republic v. Molina, (1997):
couple’s public cohabitation; and (3) birth and (1) The burden of proof to show the nullity of the
baptismal certificates of children born during the marriage belongs to the plaintiff.
union. [Trinidad v CA (1998)] (2) The root cause of the psychological incapacity must
be: (a) medically or clinically identified, (b) alleged in
VOID MARRIAGES the complaint, (c) sufficiently proven by the experts,
Type of Void Marriages (d) clearly explained in the decision.
(1) Absence of any formal/essential requisites (3) The incapacity must be proven to be existing at
(2) Psychologically Incapacitated spouse “the time of the celebration” of the marriage.
(3) Incestuous Marriages (4) Such incapacity must also be shown to be
(4) Marriages contrary to public policy medically or clinically permanent or incurable.
(5) Void subsequent marriages (5) Such illness must be grave enough to bring about
the disability of the party to assume the essential
Absence of Requisites obligations of marriage.
Art. 4(1): The absence of any essential or formal (6) The essential marital obligations must be those
requisites shall render the marriage void ab initio, embraced by Articles 68 up to 71 of the Family Code
except as stated in Article 35 (a). as regards the husband and wife as well as Articles
220, 221, and 225 of the same Code in regard to
Art. 5: Any male or female of the age of eighteen years parents and their children.
or upwards not under any of the impediments (7) Interpretations given by the National Appellate
mentioned in Articles 37 and 38, may contract Matrimonial Tribunal of the Catholic Church in the
marriage. Philippines, while not controlling/decisive, should
be given great respect by our courts.
(8) The trial court must order the prosecuting attorney
Void from the Beginning [Art. 35]. –
or fiscal and the Solicitor General to appear as
(1) Marriage where any party is below eighteen years
counsel for the state. No decision shall be handed
of age even with the consent of parents or
down unless the Solicitor General issues a
guardians
certification.
(2) Marriage solemnized by any person not legally
authorized to perform marriages unless such
Santos v. Bedia-Santos, (1995):
marriages were contracted with either or both
Laid down 3 characteristics for determining
parties believing in good faith that the
psychological incapacity: gravity, antecedent, and
solemnizing officer had the legal authority to do
incurability.
so.
Note: One’s belief in good faith that the
Tsoi v. CA, (1997):
solemnizing officer has the required authority is a
Refusal of husband to have sex was interpreted to be
mistake of fact, and not of law.
PI. “A man who can but won’t is PI”
(3) Marriage solemnized without a valid marriage
license, except in marriages under exceptional
circumstances
PAGE 17
Marcos vs. Marcos (2000): Article 41 (Presumptive Death)

Psychological incapacity maybe established by the Failure of the present spouse to obtain a judicial
totality of the evidence presented. Personal medical declaration of presumptive death before entering a
examination could be dispensed with. subsequent marriage
Republic vs. San Jose (2007): Article 44 (Bad Faith of both spouses)
There is no requirement that the respondent be Both spouses entering a subsequent marriage after
medically examined first. presumptive death, who acted in bad faith
Antonio v. Reyes, (2006): Article 53 (Non-Recording):

“Pathological liar” considered as psychological Subsequent marriage of spouses, where the
incapacity, Molina guidelines met. requirements of recording under Art. 52 have not
have been complied with, shall be null and void.
Incestuous marriages
Article 37 (Incestuous): Art. 52. The judgment of annulment or of absolute
(1) Between ascendants and descendants of any nullity of the marriage, the partition and distribution of
degree, legitimate or illegitimate the properties of the spouses and the delivery of the
(2) Between brothers and sisters, whether of the full children's presumptive legitimes shall be recorded in
or half blood, legitimate or illegitimate the appropriate civil registry and registries of property;
otherwise, the same shall not affect third persons.
Against Public Policy
Article 38 (Against Public Policy): Previous marriage declared void ab initio or annulled
(1) Between collateral blood relatives, legitimate or
Art. 40. The absolute nullity of a previous marriage
illegitimate, up to the fourth civil degree.
may be invoked for purposes of remarriage on the
(2) Between step-parents and step-children.
basis solely of a final judgment declaring such previous
Note: Stepbrothers and stepsisters can marry
marriage void.
because marriages between them are not
among those enumerated in Article 38.
(3) Between parents-in-law and children-in-law. In order to have a subsequent marriage:
(4) Between adopting parent and adopted child. (1) The previous marriage should be judicially
(5) Between the surviving spouse of the adopting declared void or annulled (final judgment) (Terre
parent and the adopted child. v. Terre (1992), Atienza v. Brillantes (1995))
(6) Between the surviving spouse of the adopted (2) Must comply with the requirements of Art. 52
child and the adopter.
(7) Between an adopted child and a legitimate child Under the Civil Code (superseded by the Family
of the adopter. Code), there was no need for a judicial declaration of
(8) Between adopted children of the same adopter. nullity of a previous marriage for a subsequent
(9) Between parties where one, with the intention to marriage to be valid [People v. Mendoza (1954)]
marry the other, killed that other person's
spouse, or his or her own spouse. Terre v. Terre, (1998):
A lawyer was disbarred for grossly immoral conduct by
Relationships outside of Art. 37 and 38 which are not convincing the other party that a judicial declaration of
impediments to marriage: brother-in-law with sister- nullity was not required and subsequently contracting
in-law, stepbrother with stepsister, guardian with another marriage while his first marriage was
ward, adopted with illegitimate child of the adopter, subsisting.
adopted son of the husband with adopted daughter
of the wife, parties who have been convicted of If there is no Judicial Declaration of Nullity, subsequent
adultery marriage void for being bigamous.
Void subsequent marriages Atienza v. Brillantes, (1995):

Article 40 (No Judicial Declaration of Nullity) Even if the judge’s first marriage contracted in 1965
A person entered into a subsequent marriage was void for not having a marriage license, the
without first getting a judicial declaration of nullity of requirement for a judicial declaration of nullity in Art.
the first void marriage 40 still applies for his subsequent marriage contracted
in 1991.
PAGE 18
Apiag v. Cantero, (1997): Notes:

Where both marriages were contracted prior to the (1) Institution of a summary proceeding is not
effectivity of the FC, the requirement of Art. 40 does sufficient. There must also be a summary
not apply to the second marriage where a right is judgment. (Balane)
already vested and which the FC cannot have (2) Only the deserted/present spouse can file or
retroactive effect. institute a summary proceeding for the
declaration of presumptive death of the
Domingo v. CA, (1993): absentee. (Bienvenido case)
The judicial declaration of nullity can be invoked for (3) There must have been diligent efforts on the part
purposes other than remarriage. Article 40 was of the deserted spouse to locate the absent
interpreted as being a requirement for purposes of spouse. These diligent efforts correspond to the
remarriage but not limited for that purpose. requirement of the law for a well-founded belief.
Separation of property is also a valid purpose for
filing for a judicial declaration of nullity. Effect of Reappearance of Absent Spouse
General Rule: The subsequent marriage remains
The word “solely” in Art. 40 referred to validating valid.
subsequent marriages but NOT to limiting the
purposes for which a judicial declaration of nullity Exception: It is automatically terminated by the
can be invoked. recording of the affidavit of reappearance of the
absent spouse at the instance of any interested
Borja-Manzano v. Sanchez, (2001): person, with due notice to the spouses of the
Legal separation does not severe marital bonds. subsequent marriage. [Art. 42]
Cohabitation under Art. 34 merely exempts the
spouses from obtaining a marriage license, and is Note: It is the recording of the affidavit of
not met when there exists legal impediment to marry reappearance that automatically terminates the
during the period of cohabitation. subsequent marriage. Hence, if absentee spouse
reappears without recording affidavit of
Subsequent Marriage when one spouse is absent reappearance, then there is no legal effect.
Requirements for Subsequent Marriage to be Valid Meanwhile, absentee spouse cannot remarry.
When Prior Spouse is Absent [Art. 41]: (Tolentino)
(1) Subsequent marriage due to ordinary absence
where: Exception to the exception: If there is a judgment
(a) Absent spouse had been absent for 4 annulling the previous marriage or declaring it void
consecutive years; ab initio. [Art. 42]
(b) The spouse present had a well-founded belief
that absent spouse is dead; and Good Faith: PERIOD of absence for PRESUMPTIVE
(c) Judicial declaration of presumptive death was DEATH is MANDATORY thus cannot be shortened by
secured (no prejudice to the effect of the good faith and if be done so will be VOID.
reappearance of the absent spouse).
(2) Subsequent marriage due to extraordinary Burden of Proof: Two successive marriages,
nd
absence where: presumption of validity on 2 marriage and burden
ND
(a) Absent spouse had been missing for 2 on party ATTACKING VALIDITY OF 2 MARRIAGE.
consecutive years; PRESUMPTION in favor of INNOCENCE prevails over
ST
(b) There is danger of death under the PRESUMPTION of CONTINUANCE OF LIFE OF 1
circumstances set forth in the provisions of SPOUSE & MARITAL RELATIONS.
Art. 391 CC attendant to the disappearance;
(c) The spouse present had a well-founded belief Difference between Absence in the Civil Code and
that the missing person is dead; and Family Code
(d) Judicial declaration of presumptive death was Family Code Civil Code
secured (no prejudice to the effect of the
reappearance of the absent spouse). As to period
Extraordinary circumstances [Art. 391, CC]: 4 years under normal Absent for at least 7
(a) ON BOARD VESSEL lost at sea voyage, airplane, circumstances; years;
(b) ARMED FORCES in war, or
(c) DANGER OF DEATH under other circumstances, 2 years under 4 years under
existence not known extraordinary extraordinary
PAGE 19
Family Code Civil Code Family Code makes an exception for the purpose of
remarriage by limiting such requirement to 4 years.
circumstances circumstances
Article 43 and 44 (Effects of Termination of Bigamous
As to remarriage Marriage under Art. 42)
In order to remarry, Declaration of Art. 43:
summary proceeding is presumptive death is not (1) Children of subsequent marriage – conceived prior
necessary necessary to its termination considered legitimate; custody
As to who can institute the action and support decided by court in a proper
proceeding
Can be instituted by the The spouses themselves (2) Property Regime – dissolved and liquidated (party
present spouse, any in bad faith shall forfeit his/her share in favor of
interested party, and the the common children or if there are none, children
subsequent spouse of the guilty spouse by a previous marriage, and in
case there are none, to the innocent spouse)
As to effect on subsequent marriage (3) Donation propter nuptias – remains valid, (but if
the donee contracted marriage in bad faith,
Subsequent marriage is Upon reappearance, donations will be revoked)
automatically terminated judicial proceeding is (4) Insurance benefits – innocent spouse may revoke
by the recording of an necessary to declare designation of guilty party as beneficiary, even if
affidavit of reappearance marriage null and void such designation is stipulated as irrevocable
of the absent spouse (5) Succession Rights – Party in bad faith disqualified
As to ground to inherit from innocent spouse, whether testate or
intestate
Well founded belief that Generally believed to be
the absent spouse is dead dead Article 44:
Donations: If both parties of subsequent marriage
acted in bad faith, any donations and testamentary
Connected Provisions
dispositions made by one party to the other by
Art. 390, Civil Code. After an absence of 7 years, it reason of marriage will be revoked
being unknown whether or not the absentee still lives,
he shall be presumed dead for all purposes, except for ACTION OR DEFENSE OF NULLITY
those of succession. Prescription
Art. 39. The action or defense for the declaration of
The absentee shall not be presumed dead for the
absolute nullity of a marriage shall not prescribe. (as
purpose of opening his succession till after an absence
amended by RA 8533)
of 10 years. If he disappeared after the age of 75 years,
an absence of 5 years shall be sufficient in order that
his succession may be opened. It must be noted that under the new Supreme Court
Rule on Declaration of Absolute Nullity of Void
Marriages and Annulment of Voidable Marriages
Art. 391, Civil Code. The following shall be presumed A.M. No. 02-11-10-SC, effective March 15, 2003,
dead for all purposes, including the division of the nullity of the marriage can still be collaterally
estate among the heirs: (SAAD) attacked.
(1) A person on board a vessel lost during a sea
voyage, or an aeroplane which is missing, who has Who may file the petition for nullity?
not been heard of for four years since the loss of the As to the parties allowed to file the action: Only an
vessel or aeroplane; aggrieved or injured spouse may file a petition for
(2) A person in the armed forces who has taken part in annulment of voidable marriages or declaration of
war, and has been missing for four years; absolute nullity of void marriages. Such petition
(3) A person who has been in danger of death under cannot be filed by compulsory or intestate heirs of
other circumstances and his existence has not been the spouses or by the State. The Committee is of the
known for four years. belief that they do not have a legal right to file the
petition. Compulsory or intestate heirs have only
Notes: inchoate rights prior to the death of their
Although 7 years is required for the presumption of predecessor, and, hence, can only question the validity
death of an absentee in the Civil Code, Art. 41 of the of the marriage of the spouses upon the death of a
PAGE 20
spouse in a proceeding for the settlement of the estate (b) Through concealment by the wife of the fact
of the deceased spouse filed in the regular courts. that at the time of the marriage she was
(Enrico v. Heirs of Sps. Medinaceli (2007)), also pregnant by another man;
reiterated in (Carlos vs. Sandoval (2008)) (c) Through concealment of a sexually-
transmitted disease, regardless of its nature,
How to attack a void marriage? existing at the time of marriage;
General Rule: Void Marriages may be attacked (d) Through concealment of drug addiction,
collaterally or directly. habitual alcoholism or
homosexuality/lesbianism. (Art.46)
Exception: A person in a void marriage must first file (4) The consent of either party was obtained through
for a declaration of nullity in order to subsequently force, intimidation, or undue influence.
marry (5) Either party is physically incapable of
consummating the marriage (impotence; this is
ANNULLABLE MARRIAGE different from sterility, which is the inability to
(Note: Although the Supreme Court in its syllabus produce offspring).
seems to make a distinction between annullable and (6) Either party has a serious and incurable sexually-
voidable marriages by the fact that they made two transmissible disease, even if not concealed.*
separate categories for the two, Tolentino makes no
mention of any such difference.) Action to Annul: Action in rem, concerns status of
parties; res is relation between parties or marriage
Art. 14: In case either or both of the contracting tie; jurisdiction depends on nationality or domicile
parties, not having been emancipated by a previous not the place of celebration.
marriage, are between the ages of eighteen and
twenty-one, In addition to the requirements of the Grounds for Annulment explained:
preceding articles: (1) Lack of parental consent
(a) Exhibit to the local civil registrar the consent to (a) 18 ≤ x < 21 without parental consent
their marriage of their father, mother, surviving (b) Ratified by party 18 or above but below 21
parent or guardian, or persons having legal charge upon free cohabitation upon reaching 21.
of them, in the order mentioned (c) TOLENTINO: parents whose consents were
(b) Manifested in writing by the interested party, who wanting may ratify before 21; this right can be
personally appears before the proper local civil waived; however, the Code Commission
registrar, or believes that no such ratification can be made
(c) In the form of an affidavit made in the presence of by the parent.
two witnesses and attested before any official
authorized by law to administer oaths (2) Insanity
(d) The personal manifestation shall be recorded in (a) Mental incapacity or insanity is a vice of
both applications for marriage license, and the consent; insanity (1) of varying degrees, (2)
affidavit, if one is executed instead, shall be curable being an illness, capable of
attached to said applications. ratification or convalidation, (3) has lucid
intervals, (4) ground only for annulment in
Grounds for Annulment many countries
Article 4 states that “xxx A defect in any of the (b) Can be ratified by cohabitation after insanity is
essential requisites shall render the marriage cured or during a lucid interval
voidable as provided in Article 45.” (c) Mere mental weakness is not a ground for
annulment, but if found grave enough may
Article 45. Marriage may be annulled on the amount to psychological incapacity.
following grounds existing at time of marriage: (d) Intoxication, somnambulism where one had
(PIFFIS) no mental capacity to give consent is
(1) One of the parties is 18 or above but below 21 equivalent to insanity
years old, and there is no parental consent. (e) Must EXIST AT THE TIME of the celebration of
(2) Either party was of unsound mind (insanity). the marriage.
(3) The consent of either party was obtained through (f) Law presumes SANITY, burden of proof on
fraud (different from mistake in identity): party alleging insanity
(a) Through non-disclosure of a previous
conviction of a crime involving moral (3) Fraud
turpitude; (a) Only those enumerated in Art. 46:
PAGE 21
(1) Non-disclosure of previous CONVICTION when wife had been at least 6 months pregnant prior
by final judgment of a crime involving to marriage.
MORAL TURPITUDE
(2) Concealment by wife at the time of Aquino v. Delizo, (1960):
marriage, that she was pregnant by The Supreme Court granted annulment because the
another man wife concealed the fact that she was 4 months
(3) Concealment of STD regardless of nature pregnant during the time of the marriage. It argued
existing at time of marriage that since Delizo was “naturally plump,” Aquino could
(4) Concealment of drug addiction, habitual hardly be expected to know, by mere looking, whether
alcoholism, homosexuality, lesbianism or not she was pregnant at the time of the marriage.
existing at time of marriage
(b) NO other misrepresentation or deceit of Almelor v. RTC, (2008):
CHARACTER, HEALTH, RANK, FORTUNE OR It is the concealment of homosexuality, and not
CHASTITY shall constitute FRAUD. homosexuality per se, that vitiates the consent of the
(c) Conviction of Crime: requisites are innocent party. Such concealment presupposes bad
(1) Moral turpitude faith and intent to defraud the other party in giving
(2) Conviction consent to the marriage.
(d) Concealment of Pregnancy
(1) Fraud against very essence of marriage; Corpuz v. Ochoterena, (2004):
importance of procreation of children; an In a legal separation or annulment case, the
assault to the integrity of the union by prosecuting attorney must first rule out collusion as a
introducing ALIEN BLOOD condition sine qua non for further proceedings. A
(2) If husband knew of pregnancy, the certification by the prosecutor that he was present
marriage cannot be annulled on the during the hearing and even cross-examined the
ground of concealment plaintiff does not suffice to comply with the mandatory
(e) Marriage cannot be annulled on the ground requirement.
that wife concealed the fact that she had been
lewd & corrupt and had illegitimate child. (4) Force, intimidation, undue influence
(Shrady v. Logan (1896)) (a) FORCE must be one as to prevent party from
(f) Maybe ratified upon free cohabitation after acting as a free agent; will destroyed by
knowledge of fraud. fear/compulsion
(b) INTIMIDATION must be one as to compel the
party by reasonable/well-grounded fear/evil
Art. 45 STD Art. 46 STD imminent upon person/properties
(c) DEGREE OF INTIMIDATION: age, sex,
Ground for annulment The STD is a type of condition of person borne in mind
fraud which is a ground (d) Threat or intimidation as not to act as FREE
for annulment AGENT; threatened of armed demonstrations
Does not have to be Must be concealed by brother is ANNULLABLE (Tiongco v Matig-
concealed a)
Must be serious and Need not be serious nor (e) Man rapes a girl, marries her to conceal the
incurable incurable rape & has no intention to live with the girl;
The STD itself is the It is the concealment marriage is annullable (People v Santiago
ground for annulment that gives rise to the (1927))
annulment (f) Committee added “undue influence”, maybe
compelled to enter out of REVERENTIAL
Effect of Cure to Fraud in Art. 46: FEAR e.g., fear of causing distress to parents,
Recovery or rehabilitation from STD, drug addiction, grandparents, etc.
and habitual alcoholism will NOT BAR ACTION for (g) May be ratified upon cohabitation after force,
annulment; The defect is not the disease, but the intimidation, or undue influence has ceased or
FRAUD which VITIATED CONSENT. disappeared.
Buccat v. Mangonon de Buccat, (1941): (5) Impotency

Wife gave birth 3 months after marriage celebration. (a) Must exist at time of marriage, must be
Husband filed for annulment. Denied. Ground: continuous, must be incurable; thus if
Concealment of non-virginity. Court held that it was incapacity can be remedied or is removable by
unbelievable that husband could not have noticed
PAGE 22
operation, NOT ANNULLABLE (Sarao v (j) RELATIVE IMPOTENCY: may now be invoked
Guevarra(1940)) because there are cases where one is
(b) Should be unknown to the other party impotent with respect to his spouse but not
(c) Physical condition: sexual intercourse with a with other men or women.
person of the opposite sex is impossible, not (k) EXAMPLE: penile erection to other women
mere sterility possible; unusually large penis cannot fit with
(d) When both spouses are impotent, marriage abnormally small vagina
cannot be annulled because neither spouse is
aggrieved (6) Sexually-transmissible disease serious and
(e) POTENCY PRESUMED; party who alleges incurable
impotency has burden of proof (Jimenez v (a) Should exist at the time of the marriage
Canizares (1960)) (b) Should be found serious
(f) Although potency is presumed, there is a (c) Should appear to be incurable
doctrine in England called TRIENNIAL (d) Should be unknown to other party
COHABITATION that if wife remains virgin (e) Reason: danger to the health of spouse &
after 3 yrs, husband presumed impotent & has offspring/s
burden to prove otherwise (Tompkins v (f) Same as incurable impotency
Tompkins) (g) Not subject to ratification  cannot be ratified
(g) REFUSAL of wife to be examined DOES NOT or convalidated by prescription or
PRESUME impotency because Filipino women cohabitation:
are inherently shy & bashful; TC must order (a) Prior subsisting marriage; would result in
physical examination because w/o proof of anomalous relationship
impotency, she is presumed potent; to order (b) Vitiated by impotency remains as long as
her to undergo physical exam does not afflicted
infringe constitutional rights against self- (c) Vitiated by affliction of STD remains as
incrimination (Jimenez v Canizares) long as afflicted
(h) Villanueva vs. CA (2006): Absence of (d) Affliction of STD is unknown to the other
cohabitation is not a ground for annulment. spouse (Balane)
(i) NOTE: if wife continues to refuse to undergo (e) The other spouse must also be free from a
physical exam, she can be held for similar STD. (Balane)
CONTEMPT & ordered to be confined in jail (h) 2 & 3 above prescribe w/in 5 yrs by Art. 47(5)
until she does so
Who may file, Prescription, Ratification

Ground Who can file Prescription Ratification
(Art. 45) (Art. 47) (Art. 47) (Art. 45)
Lack of Under-aged party (18 or above Within 5 years after attaining Free cohabitation after
parental but below 21) 21. attaining age of 21.
consent Parent or guardian without Before party below 21 reaches
consent 21.
Insanity Sane spouse with no Any time before the death of Free cohabitation of insane
knowledge of the other’s either party party after insane party
insanity comes to reason
Legal guardian of insane party

Insane party During lucid interval or after
regaining sanity, and before
death
Fraud Injured party (defrauded party) Within 5 years after discovery Free cohabitation after having
of fraud full knowledge of fraud
Force, Injured party Within 5 years after Free cohabitation after the
intimidation, disappearance of force, undue force or intimidation or undue
undue influence, or intimidation influence has ceased or
influence disappeared
Impotence Potent spouse Within 5 years after marriage Cannot be ratified but action
prescribes
STD Healthy party Within 5 years after marriage Cannot be ratified but action
PAGE 23
Ground Who can file Prescription Ratification

(Art. 45) (Art. 47) (Art. 47) (Art. 45)
prescribes
Marriages Not Subject to Ratification/ Convalidation in the proper cases to marriages which are declared
by cohabitation ab initio or annulled by final judgment under Articles
(1) One spouse is incurably impotent (Art. 47 – 40 and 45 (Art. 50(1)).
prescription: 5 years)
(2) One spouse has an incurable STD (Art. 47 – Final judgment in such cases shall provide for the
prescription: 5 years) liquidation, partition, and distribution of the:
(3) Sane spouse marries an insane spouse w/o (1) Properties of the spouses
knowledge of insanity (2) Custody and support of the common children
(3) Delivery of their presumptive legitimes
Presence of Prosecutor (a) Unless such matters had been adjudicated
Art. 48: To prevent collusion between the parties, in previous judicial proceedings (Art. 50(2))
fabrication or suppression of evidence, the prosecuting (b) All creditors (of the spouses/property regime)
attorney or fiscal shall appear on behalf of the State. shall be notified of the proceedings for
liquidation (Art. 50(2 and 3))
EFFECT OF PENDING ACTIONS/DECREE
In the partition, the conjugal dwelling and lot shall be
Art. 49: During the pendency of the action and in the adjudicated to the spouse with whom majority of the
absence of adequate provisions in a written agreement common children remain (Art. 102 and 129) (Art.
between the spouses, the Court shall provide for the 50(4)
support of the spouses and the custody and support of
their common children. The Court shall give Presumptive legitimes, computed as of the date of
paramount consideration to the moral and material the final judgment, shall be delivered in cash,
welfare of said children and their choice of the parent property or sound securities:
with whom they wish to remain as provided for in Title (1) Unless the parties, by mutual agreement
IX. It shall also provide for appropriate visitation rights judicially approved, had already provided for such
of the other parent. (Art. 51(1))
(2) The children/guardian/trustee of property may
(1) The court shall provide for the support of the ask for the enforcement of the judgment (Art.
spouses, 51(2))
(2) The custody and support of the common children, (3) The delivery of the presumptive legitimes shall
giving paramount consideration to their moral not prejudice the ultimate successional rights,
and material welfare, their choice of parent with but the value of the properties already received
whom they wish to remain. shall be considered as advances on their legitime
(3) The court shall also provide for visitation rights of (Art. 51(3))
other parent.
Generally, children born or conceived within void
Decisions on the nullification of the marriage marriages are illegitimate.
Art. 48 (2): In the cases referred to in the preceding
paragraph, no judgment shall be based upon a Exceptions:
stipulation of facts or confession of judgment. (a) Children conceived or born before the judgment
under Article 36 has become final and executor
Stipulation of Facts: An admission by both parties (Art. 54)
after agreeing to the existence of any of the grounds (b) Children conceived or born of subsequent
or facts that would constitute a void/voidable marriages under Article 53 (Art. 54)
marriage
Confession of judgment: The admission by one party

admitting his/her fault to cause the invalidity of the
marriage.
Legal Separation
EFFECTS OF NULLITY
GROUNDS FOR LEGAL SEPARATION
The effects provided for by paragraphs (2), (3), (4) Note: The grounds for legal separation are exclusive.
and (5) of Article 43 and by Article 44 shall also apply (Article 55) (RPC Final DH BSAA)
PAGE 24
These must be filed within 5 years after occurrence of (2) Threatening to cause the woman or her child
cause (Article 57) physical harm;
(1) Repeated physical violence or grossly abusive (3) Attempting to cause the woman or her child
conduct directed against the petitioner, a physical harm;
common child, or a child of the petitioner; (4) Placing the woman or her child in fear of
(2) Physical violence or moral Pressure to compel the imminent physical harm;
petitioner to change religious or political (5) Attempting to compel or compelling the woman or
affiliation; her child to engage in conduct which the woman
(3) Attempt of respondent to Corrupt or induce the or her child has the right to desist from or desist
petitioner, a common child, or a child of the from conduct which the woman or her child has
petitioner, to engage in prostitution, or the right to engage in, or attempting to restrict or
connivance in such corruption or inducement; restricting the woman's or her child's freedom of
(4) Final judgment sentencing the respondent to movement or conduct by force or threat of force,
imprisonment of more than six years, even if physical or other harm or threat of physical or
pardoned; other harm, or intimidation directed against the
(5) Drug addiction or habitual alcoholism of the woman or child. This shall include, but not
respondent; limited to, the following acts committed with the
(6) Lesbianism or Homosexuality of the respondent; purpose or effect of controlling or restricting the
(7) Contracting by the respondent of a subsequent woman's or her child's movement or conduct:
Bigamous marriage, whether in the Philippines (a) Threatening to deprive or actually depriving
or abroad; the woman or her child of custody to her/his
(8) Sexual infidelity or perversion; family;
(9) Attempt by the respondent Against the life of the (b) Depriving or threatening to deprive the woman
petitioner; or or her children of financial support legally due
(10) Abandonment of petitioner by respondent her or her family, or deliberately providing the
without justifiable cause for more than one year. woman's children insufficient financial
support;
People v. Zapata and Bondoc (1951): (c) Depriving or threatening to deprive the woman
Adultery is not a continuing crime, but is or her child of a legal right;
consummated and exhausted at the moment of carnal (d) Preventing the woman in engaging in any
union. Each sexual act constitutes one act of adultery. legitimate profession, occupation, business or
As such, every sexual act is a ground for legal activity or controlling the victim's own money
separation. or properties, or solely controlling the
conjugal or common money, or properties;
Gandioco v. Peñaranda (1989): (6) Inflicting or threatening to inflict physical harm on
In sexual infidelity as a ground for legal separation, oneself for the purpose of controlling her actions
there is no need for prior conviction for concubinage, or decisions;
because legal separation only requires a (7) Causing or attempting to cause the woman or her
preponderance of evidence, as opposed to proof child to engage in any sexual activity which does
beyond reasonable doubt required in concubinage. not constitute rape, by force or threat of force,
physical harm, or through intimidation directed
Lapuz Sy v. Eufemio (1972): against the woman or her child or her/his
The death of one party in a legal separation case immediate family;
abates the action. This is because the death of either (8) Engaging in purposeful, knowing, or reckless
spouse automatically dissolves the marriage. An conduct, personally or through another, that
action for legal separation is also purely personal alarms or causes substantial emotional or
between the spouses. psychological distress to the woman or her child.
This shall include, but not be limited to, the
Dela Cruz. v. Dela Cruz (1968): following acts:
Abandonment is not mere physical estrangement but (a) Stalking or following the woman or her child in
also financial and moral desertion. There must be an public or private places;
absolute cessation of marital relations, duties, and (b) Peering in the window or lingering outside the
rights with the intention of perpetual separation. residence of the woman or her child;
(c) Entering or remaining in the dwelling or on the
ACTS OF VIOLENCE ACCORDING TO RA 9262
property of the woman or her child against
(1) Causing physical harm to the woman or her child; her/his will;
PAGE 25
(d) Destroying the property and personal apply in cases where violence, as used in RA 9262
belongings or inflicting harm to animals or (Anti-Violence Against Women and their Children), is
pets of the woman or her child; and alleged. The case should be heard as soon as
(e) Engaging in any form of harassment or possible by the court.
violence;
(9) Causing mental or emotional anguish, public CONFESSION OF JUDGMENT
ridicule or humiliation to the woman or her child, No decree of legal separation shall be based upon a
including, but not limited to, repeated verbal and stipulation of facts or a confession of judgment (Art.
emotional abuse, and denial of financial support 60, par. 1. FC).
or custody of minor children of access to the
woman's child/children. Note: Art. 60 par. 1 applies only if the judgment was
based solely on the stipulation of facts or solely on
DEFENSES the confession of judgment. Thus, if other grounds
GROUNDS FOR DENYING LEGAL SEPARATION (ARTICLE 56) were used, Art. 60 par. 1 is not applicable. (Balane)
(4CMPRD):
(1) Condonation by aggrieved party Ocampo v Florenciano (1960):
(2) Consent by aggrieved party to the commission of The prohibition on confession of judgment does not
the offense mean that the Court will not grant petition if one party
(3) Connivance between parties in the commission of admits to being guilty of the charges of adultery. The
the offense point of this provision is that the Court should still
(4) Mutual guilt or Recrimination between spouses in admit evidence, not decide just based on an admission
the commission of any ground for legal of guilt. Because what is prohibited is handing down a
separation decree of legal separation based solely on a confession
(5) Collusion between parties to obtain decree of of judgment.
legal separation
(6) Prescription of action for legal separation (Art. 57: EFFECTS OF FILING PETITION
5 years from occurrence of the cause of action) (1) The spouses are entitled to Live separately, but
(7) Reconciliation of parties during pendency of the marital bond is not severed. (Art. 61 (1)
action (Art. 66 par.1) (2) Administration of Community or Conjugal Property
(8) Death of either party during pendency of action – If there is no written agreement between the
(Lapuz-Sy vs. Eufemio) parties, the court shall designate one of them or a
third person to administer the ACP or CPG. (Art.
COOLING-OFF PERIOD AND RECONCILIATION 61, par. 2)
EFFORTS
Action cannot be tried before six months have EFFECTS OF PENDENCY
elapsed from the filing of the petition (Art. 58). The Court shall provide for: (Art. 62, cf. Art. 49. FC)
(a) Support of spouses
Action cannot be tried unless the court has (b) Custody of children
attempted to reconcile the spouses, and determined The court shall give custody of children to one of
that despite such efforts, reconciliation is highly them, if there is no written agreement between
improbable (Art. 59) the spouses. It shall also provide for visitation
rights of the other spouse.
Note: This is without prejudice to judicial (c) Visitation rights of the other spouse
determination of custody of children, alimony, and
support pendente lite. EFFECTS OF LEGAL SEPARATION
(1) The spouses can live separately (Art. 63) but the
Araneta vs. Concepcion, (1956): marriage bonds are not severed.
Courts can still resolve other issues, pending the (2) The ACP or CPG shall be dissolved and liquidated,
waiting period or cooling off period. In resolving issues, and the share of the guilty spouse shall be
try not to touch, as much as possible, on the main forfeited in favor the common children, previous
issue (i.e. adultery if that is the ground used). However, children, or innocent spouse, in that order (Art.
Court must still receive evidence if just to settle 63. cf. Art. 43, par. 2).
incidental issues of support and custody. (3) Custody of the minor children shall be awarded to
the innocent spouse (Art. 63, cf. Art 213)
Note: This provision of the Family Code dictating a (4) Guilty spouse shall be disqualified from Inheriting
mandatory 6-month cooling-off period does not from innocent spouse by intestate succession.
PAGE 26
The provisions in favor of the guilty party in the RECONCILIATION

will of the innocent spouse shall also be revoked HOW DONE
by operation of law. (Art. 63) Should the spouses reconcile, they should file a
(5) Donations in favor of the guilty spouse may be corresponding joint manifestation under oath of such
revoked (Art. 64) but this action prescribes after 5 reconciliation. (Art. 65)
years from the decree of legal separation.
(6) Innocent spouse may also revoke designation of EFFECTS OF RECONCILIATION
guilty spouse as beneficiary in an Insurance policy, (1) Proceedings for legal separation shall be
even if such stipulations are irrevocable. (Art. 64. terminated at whatever stage. (Art. 66)
FC, cf. PD 612, sec. 11) (2) If there is a final decree of legal separation, it
(7) Obligation for Mutual support ceases, but the shall be set aside. (Art. 66)
court may order the guilty spouse to support the (3) The separation of property and forfeiture of share
innocent spouse. (Art. 198) of guilty spouse shall subsist, unless the spouses
(8) The wife shall continue to use the Surname of the agree to revive their former property regime or to
husband even after the decree for legal institute another property regime. (Art. 66 cf. Art.
separation. (Art. 372, CC) 67)
(4) Joint custody of children is restored.
(5) The right to intestate succession by guilty spouse
from innocent spouse is restored.
The right to testamentary succession depends on

the will of the innocent spouse.
ANNEX TO VOID AND VOIDABLE MARRIAGES AND LEGAL SEPARATION

GROUNDS
Void Marriages Voidable Marriages Legal Separation
One is a minor Lack of parental consent Repeated Physical Violence

No authority to marry Insanity Pressure to compel to change religious/political
affiliations
No valid marriage license Fraud Corruption / Inducement to engage in prostitution
Bigamous and polygamous Force, Intimidation or Final judgement with sentence of more than 6 yrs.
marriages Undue Influence
Mistake of identity Impotence Drug Addiction / Habitual Alcoholism
Void subsequent marriage Serious and Incurable Homosexuality / Lesbianism
STD
Psychological incapacity Bigamous marriage (engaging in)
Incestuous Marriages Sexual Infidelity
Marriages against public Attempts against the life
policy
Abandonment without just cause for more than 1
year
EFFECTS OF FILING / PENDING DECREE
Void/Voidable Marriages Legal Separation
Support for the spouses

Custody and support for the children
Visitation rights to the other spouse
No right to live separately Spouses to live separately
Properties are still managed by both parties Designation of an administrator of the properties
PAGE 27
EFFECTS OF AFFIDAVIT OF REAPPEARANCE, JUDICIAL DECLARATION OF NULLITY, ANNULMENT AND LEGAL SEPARATION
Void Marriages Terminated Marriage (Art. Voidable Marriages Legal Separation
41)
Status of Marital ties
Severed Severed Severed Not Severed
Status of Marriage
Void ab initio Subsequent marriage is Void Valid
terminated (not
invalidated)
Status of Children born and conceived before termination
Illegitimate Legitimate Legitimate Legitimate
EXCEPT: Art. 36 and 35 conceived
and born before judgement
(legitimate)
Custody of Children
Court Proceeding Court Proceeding Court Proceeding Innocent Spouse
Property Relations
(1) Dissolution and Liquidation of properties
(a) Guilty/Bad Faith spouse will forfeit his/her share from the Net Profits to the (in order):
(i) Common children
(ii) Children of the guilty spouse
(iii) Children of the innocent spouse
(2) Notification of creditors with the proceedings for liquidation
(3) Conjugal dwelling to be adjudicated to the spouse who has majority custody of common children
(4) Insurance policy may be revoked only by the innocent spouse (Legal Separation: Only within 5 years)
(5) Spouse in bad faith/guilty shall be disqualified to inherit (testate and intestate)
Donation Propter Nuptias
Valid, but if donee contracted marriage in bad faith, revoked by operation of law May be revoked within 5
years
sexual acts. The wife refused but the husband kept

Rights and Obligations insisting. The wife left the family home. Wife petitioned
between Husband and Wife for support/ separate maintenance.
SC: Court cannot compel the woman to go back to the

ESSENTIAL OBLIGATIONS husband. The duty of the husband to support the wife
(1) Live together (cohabitation – Art. 68) is also not terminated because she left the house,
Exemption: One spouse living abroad or there are when it is the husband’s fault she left in the first place.
valid and compelling reasons (Art. 69 (2))
Exemption To Exemption: Incompatibility with the
solidarity of the family (Art. 69 (2)) Husband is compelled, in this case, to give support for
(2) Observe mutual love, respect, and fidelity separate maintenance (outside family home).
(3) Render mutual help and support (Art. 68)
Arroyo v. Vasquez de Arroyo (1921): A court cannot
Ilusorio v. Bildner (2000): A person has a purely compel a married woman to go back to her husband.
personal right to consortium (Constitutional right to
liberty). Court cannot order a man to go back to the FAMILY DOMICILE
conjugal dwelling. (Shows that what is in Family Code The husband and wife shall fix the family domicile.
is not the former spousal unity doctrine (Old (Art. 69)
England)).
In case of disagreement, the court shall decide. (Art.
Goitia v. Campos Rueda (1916): The husband 69 (1))
demanded the wife perform ‘unchaste and lewd’
PAGE 28
(2) Benefit has accrued to the family before OR

SUPPORT after the objection.
From the conjugal property; If none, income or the If BEFORE the objection, enforce resulting obligation
fruits of their separate properties; if none, from their against the separate property of the spouse who has
separate properties (liable in proportion to their not obtained consent.
properties).
MANAGEMENT OF HOUSEHOLD
This is the right and duty of both spouses.
Property Relations of the
EFFECT OF NEGLECT OF DUTY
In case the other spouse neglects his or her duties or
Spouses
commits acts which tend to bring danger, dishonor
or injury to the family, the aggrieved party may apply MARRIAGE SETTLEMENTS
to the court for relief. (Art. 72) Art. 75. Future spouses may agree upon, in the
marriage settlement, which property regime will
Injury contemplated is physical, moral, emotional or govern their marriage (ACP, CPG, complete
psychological, not financial. separation of property, other regimes). However, in
the absence of a marriage settlement, or when the
EXERCISE OF PROFESSION regime agreed upon is void, the system of absolute
Either spouse may exercise any legitimate community of property as established by this Code
profession, without need for consent of the other. shall govern.
(a) The other spouse may only object on valid,
serious, and moral grounds. Marriage settlements are considered accessory to
(b) In case of disagreement, the Court shall decide the marriage, therefore as per Art. 81, stipulations in
whether: consideration of future marriage and donations will
(1) The objection is proper, and be void if the marriage does not take place.
MARRIAGE SETTLEMENT RULES

General rule: Before marriage is celebrated [Art. 76]
Art. 63(2) – Property regime is dissolved
Arts. 66 and 67 - Reconciliation in case of legal separation
Art. 128 - When spouse leaves family without just cause
Art. 135 - Sufficient cause for judicial separation of property
When modifications can be Art. 136 - Voluntary dissolution of ACP or CPG by the spouses
made If a spouse petitions the court for:
(1) Receivership;
(2) Judicial separation of property; or,
(3) Authority to be the sole administrator of the conjugal partnership, if he or she is
abandoned by the other without just cause or fails to comply with his or her obligations to
the family [Art. 128]
Made in writing
Signed by the parties
Executed before the marriage celebration
Registered in the local civil registry where the marriage is recorded and in registries of
Requirements of marriage
property in order to prejudice third persons
settlements and any
modification thereof [Art. 77] If executed by a person below 21 y.o., valid only when persons required to give consent to the
marriage (father, mother, or guardian, respectively) are made parties to the agreement [Art.
78]
If executed by a person upon whom civil interdiction has been pronounced or who is subject
to any other disability, valid only when his guardian is made party to the agreement [Art. 79]
PAGE 29
DONATIONS BY REASON OF MARRIAGE

Solis v. Barroso (1928): In donations propter nuptias, the marriage is really a consideration, but not in the sense of
giving birth to the obligation. There can be a valid donation even if the marriage never took place, but the absence
of marriage is a ground for the revocation fo the donation.
Mateo v. Lagua (1969): Donations propter nuptias are without onerous consideration, marriage being merely the
occasion or motive for the donation, not its cause. Being liberalities, they remain subject to reduction for
inofficiousness upon the donor’s death, if they should infringe the legitime of a forced heir.
Made before the celebration of marriage

Requisites of
Made in consideration of marriage
donations propter
In favor of one or both of the future spouses
nuptias
Donor must be one of the betrothed or any third person
Ordinary wedding gifts given after the celebration of the marriage
Donations in favor of future spouses made before marriage but not in consideration
Donations excluded thereof
Donations made in favor of persons other than the spouses even if founded on the
intended marriage
Spouses to each other
Who may donate Parents of one or both spouses
Third persons to either or both spouses
Family code provisions [Arts. 82-87]
Sources of rules
Ordinary donation provisions [Art. 83; Title III of Book III, NCC]
governing donations
Provisions on testamentary succession and the formalities of wills for donations on future
propter nuptias
property [Art. 84, par. 2]
General rule: Future spouses cannot donate to each other more than 1/5 of their present
property (excess shall be considered void). [Art. 84]
Exception: If they are governed by ACP
Rules for donations Donations of property subject to encumbrances
before marriage (1) Are considered valid.
(2) In case of foreclosure:
(a) if property value < obligation, donee shall not be liable for the deficiency
(b) if property value > obligation, donee shall be entitled to the excess (Art. 85)
(1) If the marriage is not celebrated or judicially declared void ab initio, except donations
made in settlements.
(2) When the marriage takes place without the consent of the parents or guardians, as
required by law.
(3) When the marriage is annulled, and the donee acted in bad faith.
Grounds for (4) Upon legal separation, if the donee is the guilty spouse.
revocation of donation (5) If there is a resolutory condition, and it is not complied with.
propter nuptias [Art. 1. When donee has committed an act of ingratitude: [Art. 765, CC]
86] a. An offense against person or property of donor, or his wife or children under
parental authority.
b. An imputation to the donor of any criminal offense, or any act involving moral
turpitude, even if proven, unless the crime is committed against the donee, his wife
or children under his authority.
c. Refusing to support the donor, if he/she is legally required to do so.
Donations by reason of marriage shall remain valid except that if the donee contracted
marriage in bad faith, such donations made to said donee are revoked by operation of law.
[Art. 43 (3)]
Effects of judicial Revocation by operation of law - Thus, even if spouse in good faith condones the donee,
declaration of nullity the donation propter nuptias is still forfeited.
Effects provided for by Art. 43(2), (3), (4), and (5) and by Art. 44 shall also apply to
marriages that are declared void ab initio or annulled by final judgment under Article 40
(Judicial declaration of nullity) and 45 (Voidable marriages). [Art. 50]
PAGE 30
General rule: Spouses cannot donate to each other, directly or indirectly (donations made
by spouses to each other during the marriage are void). [Art. 87]
Exception: Moderate gifts on the occasion of any family rejoicing.
Harding v. Commercial Union, (1918): The prohibition on donations can only be assailed by
Rules for donations
persons who bear such relation to the parties or the property itself, that their rights are
during marriage
being interfered with. Here, the insurance company of the donated car cannot assail the
validity of the donation. In addition, the codal exception of “moderate gifts” depends on
the income class of the spouses and a car could be considered a “moderate gift” that does
not infringe the prohibition of donation between spouses.
Matabuena v Cervantes, (1971): The donation between common-law spouses falls within
Rules for donations the provision prohibiting donations between spouses during marriage.
between common-law Sumbad v. CA, (1999): The donation made by a man to a woman was held valid because no
spouses proof was shown that they were still living in a common-law relationship at the time of the
donation.
DISTINGUISHED FROM ORDINARY DONATIONS

Donations Propter Nuptias Ordinary Donations
Does not require express acceptance Express acceptance necessary
May be made by minors (Art. 78) Cannot be made by minors
May include future property Cannot include future property
If present property is donated and property is not No limit to donation of present property provided
absolute community, limited to 1/5 (Art. 84) legitimes are not impaired
Grounds for revocation - In Art. 86 Grounds for revocation - in donation laws
ABSOLUTE COMMUNITY OF PROPERTY AND CONJUGAL PARTNERSHIP OF GAINS

Art. 80. Property relations between Filipino spouses are governed by Philippine laws, regardless of the place of
marriage and their residence.
By the Nationality Rule [Art. 15], the rule that Absolute Community Property (ACP) is the default mode of property
relations absent any marriage settlement applies to all Filipinos, regardless of the place of the marriage and their
residence.
Exceptions:
(1) Where both spouses are aliens
(2) As to the extrinsic validity of contracts
(3) Contrary stipulation
Art. 81. Everything stipulated in marriage settlements in consideration of a future marriage are void if marriage
does not take place. However, stipulations that do not depend upon the celebration of marriage (e.g.: recognition
of paternity of illegitimate child) remain valid.
Art. 89. As a general rule, a waiver of rights is not allowed, except in the following cases:
(1) When there is judicial separation of property
(2) When there is legal separation
(3) When the marriage is dissolved by death of one of the spouses
(4) When the marriage is annulled
Art. 90. Co-ownership rules shall apply to ACP in matters not provided by the Family Code.
COMPARISON OF ACP AND CPG

Absolute Community Property Conjugal Partnership Of Gains
When it commences
At the precise moment of the celebration Default property regime for marriages celebrated before the Family
of the marriage [Art. 88] Code took effect (1988)
For marriages after the Family Code, if agreed to by the parties
through a marriage settlement.
PAGE 31

What it consists of
All the property owned by the spouses at Proceeds, products, fruits, and income of their separate properties
the time of the celebration of the Everything acquired by them within marriage through their own
marriage or acquired thereafter [Art. 91] efforts
Under the ACP, spouses cannot exclude Everything acquired by them by chance
specific properties from the regime. Acquired by onerous title during the marriage at the expense of the
common fund
Winnings from gambling shall accrue to Acquired through the labor, industry, work, or profession of either or
the community property [Art. 95] both spouses
Fruits from common property and net fruits of the exclusive
property of each spouse
Share of either spouse in hidden treasure, whether as finder or
owner of property where treasure was found
Acquired through occupation such as fishing or hunting
Livestock existing at dissolution of partnership in excess of what is
brought by either spouse to the marriage
Acquired by chance, such as winnings from gambling or betting
Moral damages arising from a contract paid from the CPG [Zulueta
v. Pan Am (1973)]
Loans contracted during the marriage are conjugal, and so is any
property acquired therefrom [Mendoza v. Reyes (1983)]
Property purchased by installment, paid partly with conjugal funds
and partly with exclusive funds, if full ownership was vested during
the marriage; the CPG shall reimburse the owner-spouse [Art. 118]
If a winning ticket is bought by conjugal funds, the prize is conjugal
(otherwise, the prize is exclusive property of the spouse who owns
the ticket)
Improvement on exclusive property: if original value < new value
(where new value = value of land + value of improvements + net
change in value), then land becomes conjugal property, subject to
the reimbursement of the value of the property of the owner-
spouse at the dissolution of the CPG
Property belonging to one spouse converted into another kind
totally different in nature from its original form during marriage
becomes conjugal in the absence of proof that the expenses of the
conversion were exclusively for the account of the original owner-
spouse, subject to reimbursement of the value of the original
property from the conjugal partnership
What remains exclusive property
Properties acquired before the marriage, Property brought into a marriage by each spouse as his/her own
for those with legitimate descendants with
a former marriage (to protect rights of
children by a former marriage)
Properties acquired by a gratuitous title, Property acquired by either spouse during the marriage by
i.e. donation, inheritance by testate and gratuitous title
intestate succession, including the fruits
of such properties
Except: When expressly provided by
the donor or testator that the property
shall form part of the ACP
Properties for personal use Property acquired by right of redemption, by barter, or by exchange
Except: Jewelry with property belonging to either spouse
Plata v. Yatco: Plata purchased property when she was single.
When married, she and her husband Bergosa co-signed a
mortgage on the property. Upon foreclosure, Bergosa was
PAGE 32

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

property is exclusive if ownership was vested in one spouse before
the marriage [Lorenzo v. Nicolas (1952)]
Improvement on exclusive property: if original value > new value
(where new value = value of land + value of improvements + net
change in value), then land remains exclusive property of the
owner-spouse, subject to the reimbursement of the cost of
improvement
Money received under the Social Security Act is not conjugal,
although the employee-spouse contributes to the SS with his
salaries, but belongs to the designated beneficiary under the
Social Security Law. SSA governs, not FC.
Intellectual property, like copyright or patent, should, according to
Tolentino, be considered separate property
Business property (e.g. trademarks, trade names, service marks,
business goodwill) are merely accessories to some commercial
establishment or product, so that if such establishment or product
is separate property of one spouse, then all the business property
is separate property; but all benefits or earnings derived from
these during the marriage should belong to the conjugal property
(Tolentino)
Collection of credits belonging to one spouse exclusively but the
interests shall belong to the CPG [Art. 119]
Sale of separate property of a spouse
Indemnity paid in case of expropriation of separate property or
under an insurance policy covering separate property
Presumption
All properties acquired during the All property acquired during the marriage, whether made,
marriage form part of the ACP, unless it contracted, or registered in the name of one spouse, are presumed
be proven that they are excluded. [Art. conjugal unless the contrary is prove. [Art 116]
93]
As a condition sine qua non in favor of the conjugal partnership,
the party who invokes the presumption must first prove that the
property was acquired during the marriage [Acabal v. Acabal
(2005)]
Charges and obligations
Art. 94 Arts. 121-123
Support of the following: Debts and obligations
(1) Spouses (1) Parag. 2: Debts incurred
(a) Even if not living together, except (a) By administrator-spouse for the benefit of the family
when a spouse leaves conjugal (b) By both spouses
home without just cause (c) By one spouse with the consent of the other
(b) Even during pendency of action for (2) Parag. 3: By one spouse without the consent of the other for the
legal separation/annulment of benefit of the family
PAGE 33

marriage (3) Parag. 7: Ante-nuptial debts for the benefit of the family
(2)Common children
(3) Legitimate children of previous
marriage
(4)Illegitimate children – follow the
provisions on Support and parag. 9
Debts and obligations contracted during Taxes and expenses
the marriage (1) Parag. 4: Maintenance of the CPG properties
(1) Either by both spouses or one of them, (2) Parag. 5: Mere preservation of all exclusive properties
with the consent of the other (3) Parag. 9: Litigation expenses, unless the suit is groundless
(2)In parags. 2 and 3, creditors need not
prove that the debts benefited the
family
Debts contracted by one spouse without Support
consent of the other – ACP is liable only (1) Parag. 1: Support of spouses and common children
to the extent that the debt benefited the (2) Parag. 6: Education of spouses, absolute
family (3) Parag. 8: Education of common children, only for value of
donation
Support to surviving spouse & children during liquidation is
charged against the fruits or income of their shares in the
properties. [Art. 133]
Tax, liens, repairs (both major and minor) Debts incurred in the exercise of a spouse’s profession [Javier v.
on community property Osmeña (1916)]
Taxes and expenses for mere Loan contracts signed by both spouses are conjugal, and they are
preservation of separate properties jointly liable for payment, even if only one spouse signs a
- Applies only to separate properties by subsequent promissory note [DPB v. Adil (1988)]
either spouse being used by the family,
not those that do not benefit the family
- Expenses limited to minor repairs only
Expenses for professional, vocational, or Debts incurred during the marriage are presumed to be conjugal
self-improvement courses of spouses and thus are charged to the CPG [Cobb-Perez v. Latin (1968)]
Ante-nuptial debts that benefited the
family – if the ante-nuptial debt did not
benefit the family, the applicable rule is
parag. 9
Donations by both spouses to common
legitimate children, for purposes of
professional/vocational courses or
activities for self-improvement
Ante-nuptial debts not under parag. 7, Ayala Investment v. Ching (1998):
support of illegitimate children, and The Supreme Court ruled that indirect benefits that might accrue
liabilities of either spouse arising from to a husband in signing as a surety or guarantee agreement not in
crime/quasi-delict favor of the family but in favor of his employer corporation are not
- Only if the debtor-spouse has no benefits that can be considered as giving a direct advantage
exclusive property or his/her property is accruing to the family. Hence, the creditors cannot go against the
insufficient conjugal partnership property of the husband in satisfying the
- The payments by the ACP are deemed obligation subject of the surety agreement. A contrary view would
advances to be deducted from the share put in peril the conjugal partnership by allowing it to be given
of the guilty spouse upon the gratuitously as in cases of donation of conjugal partnership
liquidation of the absolute community property, which is prohibited
Expenses of litigation between spouses,
except when suit is groundless
If community property is insufficient
except in parag. 9, the spouses are
solidarily liable for the unpaid balance
PAGE 34

from their separate properties
Gambling losses shall be borne by the
losing spouse’s separate property [Art.
95]
Ownership, administration, enjoyment, and disposition
Art. 96: Administration of property Art. 124, par. 1: Administration of property belongs to both spouses,
belongs to both spouses, jointly. If they jointly. In case of disagreement, the husband’s decision shall
disagree, the husband’s decision prevails. prevail, subject to recourse by the wife for proper remedy, which
However, the wife has 5 years to seek must be availed of within 5 years from the date of the contract
recourse from the court. Otherwise, it is implementing such decision
presumed she agreed to his decision. Sale by the husband of property belonging to the conjugal
partnership without the consent of the wife, when there is no
Exception: When the other spouse is showing that the latter is incapacitated, is void ab initio [Abalos v.
incapacitated, or unable to participate in Macatangay (2004)]
the administration, e.g. when abroad. Uy v. CA (2000):
Capacitated spouse may assume sole FC124 contemplates a situation where one spouse is absent, or
powers of administration. However, separated in fact or has abandoned the other or consent is
power is limited to administration. withheld or cannot be obtained. Such rules do not apply to cases
where the non-consenting spouse is incapacitated or incompetent
to give consent ie, in coma. The proper remedy is to file for
guardianship under the ROC. Even assuming that the rules on
summary proceedings apply, the power of the administrator is the
same as a guardian. So a spouse who desires to sell conjugal
property as administrator must still observe the procedure for the
sale of the ward’s estate required of judicial guardians under ROC
not the summary judicial proceedings under FC.
De Ansaldo v. Sheriff of Manila (1937): Spouses are not co-owners
of CPG during the marriage and cannot alienate the supposed ½
interest of each in the said properties. The interest of the spouses
in the CPG is only inchoate or a mere expectancy and does not
ripen into title until it appears after the dissolution and liquidation
of the partnership that there are net assets. [
Either spouse may, through a will, Art. 124, par. 2: Disposition or encumbrance of conjugal property
dispose of his or her interest in the requires the following:
community property. [Art. 97] However, (1) Consent or approval by both spouses, or
the will should refer only to his or her (2) Judicial authority secured in court
share in the community property.
Donation of one spouse without the Donation of CPG must be with the consent of the other spouse
consent of the other is not allowed. [Art. except moderate donations for charity, on occasions of family
98] rejoicing, or family distress [Art. 125; cf. Art. 98]
Exceptions:
(1) Moderate donations to charity due to
family rejoicing or distress
(2) Moderate gifts by each spouse to the
other due to family rejoicing
Moderation depends on the family’s
socio-economic status.
ACP allows donations in excess of one-

fifth of present property of future spouses
because the donation would form part of
the community property once the
marriage is celebrated. [Art. 84]
Mere awareness of a transaction is NOT consent [Jader-Manalo v. Camaisa (2002)]
Homeowner’s Savings & Loan Bank v. Dallo (2005):
PAGE 35

In the absence of (court) authority or written consent of the other spouse, any disposition or encumbrance of the
conjugal property shall be void.
Cheeseman v. IAC (1991):
If however, one of the spouses is an alien, the Filipino spouse may encumber or dispose of the property w/o the
consent of the former. The property is presumed to be owned exclusively by the Filipino spouse.
Dissolution of the regime
Terminates upon [Art. 99]: Terminates upon [Art. 126; cf. Art. 99]:
(1) Death of either spouse – follow rules (1) Death
in Art. 103 (2) Legal separation
(2) Legal separation – follow rules in (3) Annulment or judicial declaration of nullity
Arts. 63 and 64 (4) Judicial separation of property
(3) Annulment or judicial declaration of
nullity – follow rules in Arts. 50 and
52
(4) Judicial separation of property during
marriage – follow rules in Arts. 134 to
138
Rules on de facto separation [Art. 100] Not affected by de facto separation [Art. 128; cf. Art. 100]
De facto separation does not affect the
ACP, except that:
(1) Spouse who leaves the conjugal home
without just cause shall not be
entitled to support; however, he/she
is still required to support the other
spouse and the family
(2) If consent is necessary for transaction
but is withheld or otherwise
unobtainable, authorization may be
obtained from the court
(3) Support for family will be taken from
the ACP
(4) If ACP is insufficient, spouses shall be
solidarily liable
(5) If it is necessary to administer or
encumber separate property of
spouse who left, spouse present may
ask for judicial authority to do this
(6) If ACP is not enough and one spouse
has no separate property, spouse who
has property is liable for support,
according to provisions on support
Abandonment [Art. 101] Abandonment and absence [cf. Art. 101]
Present/aggrieved spouse may petition
the court for:
(1) Receivership
(2) Judicial separation of property Partosa-Jo v. CA (1992):
(3) Authority to be the sole administrator Physical separation of the spouses, coupled with the husband’s
of the absolute community, subject to refusal to give support to the wife, sufficed to constitute
precautionary conditions that the abandonment as a ground for an action for the judicial separation
court may impose of their conjugal property.
A spouse is deemed to have abandoned
the other when he or she has left the
conjugal dwelling without any intention
of returning.
Spouse is prima facie considered to have
PAGE 36

abandoned the other spouse and the
family if he or she has:
(1) Left for a period of 3 months
(2) Failed to inform the other spouse of
his or her whereabouts for a period of
3 months
Liquidation of assets and liabilities
Procedure [Art. 102] Procedure [Art. 129]
(a) Inventory of assets of ACP and of (1) Prepare an inventory of all properties
spouses, with market values (2) Amounts advanced by CPG in payment of personal debts and
(b) Obligations are paid with community obligations shall be credited to the CPG
property, and separate obligations not (3) Reimburse each spouse for the use if his/her exclusive funds in
charged to ACP paid by respective the acquisition of property or for the value of his or her
assets of spouses exclusive property, the ownership of which has been vested by
If obligations exceed the assets of the law in the conjugal partnership
ACP, nothing is divided. Creditors can (4) Debts and obligations of CPG shall be paid out of the conjugal
go after the separate properties of the assets, otherwise both spouses are solidarily liable with their
spouses, which are solidarily liable for exclusive property
the deficiency (5) Remains of the exclusive properties shall be delivered to
(c) Delivery of whatever remains in their respective owner-spouses
exclusive property (6) Indemnify loss/deterioration of movables belonging to either
(d) Balance, or net remainder is divided spouse, even due to fortuitous event, used for the benefit of the
equally between the spouses, family
irrespective of how much each (7) Net remainder of CPG shall constitute the profits which shall
brought into the community be divided equally between husband and wife except when:
(e) If personal obligations of a spouse (a) A different proportion or division was agreed upon in the
exceed his/her separate property, marriage settlements
creditor can go after the share of the (b) There has been a voluntary waiver or forfeiture of such share
spouse on the net remainder of the as provided in the FC
ACP, without prejudice to the (8) Presumptive legitimes are delivered to common children
provisions of law on forfeitures and (9) Conjugal dwelling goes to:
delivery of presumptive legitimes (a) Spouse with whom majority of common children choose to
(f) After covering all community remain (below 7 y.o. = deemed to have chosen the mother)
obligations and obligations of (b) Whoever the court chooses in case of lack of majority
spouses, balance of separate
properties shall be delivered to
respective spouses or their heirs, and
they will also divide into two equal
shares whatever is left of the
community assets, without prejudice
to the provisions of law on forfeitures
and delivery of presumptive legitimes
Rules in case of termination of marriage by death of one of the spouses [Art. 104]:
(1) The community property shall be liquidated in the same proceeding for the settlement of the estate of the
deceased spouse.
(2) If no such judicial settlement proceeding is instituted, surviving spouse shall liquidate the community
property either judicially or extra-judicially within one year from the death of the deceased spouse.
(a) If no liquidation is made within the period, any disposition or encumbrance involving community property of
the terminated marriage shall be void.
(b) Non-compliance with liquidation procedures would mean that a subsequently contracted marriage will
follow a regime of complete separation of property.
Procedure for liquidation of properties of two marriages [Art. 104]:
(1) Determine the capital, fruits, and income of each community upon such proof as may be considered
according to the rules of evidence.
(2) In case of doubt as to which community the existing properties belong, they shall be divided between two
communities in proportion to the capital and duration of each.
PAGE 37
SEPARATION OF PROPERTY OF THE SPOUSES AND ADMINISTRATION OF COMMON PROPERTY BY ONE

SPOUSE DURING THE MARRIAGE
Art. 134. In the absence of an express declaration in the marriage settlements, the separation of property between
spouses during the marriage shall not take place except by judicial order. Such judicial separation of property may
either be voluntary or for sufficient cause.
JUDICIAL SEPARATION OF PROPERTY MAY EITHER BE (1) VOLUNTARY OR (2) FOR SUFFICIENT CAUSE.
(a) Sufficient Causes and Grounds for Return to Previous Regime
Sufficient Causes for Judicial Separation of Property (Art. Grounds for Return to Previous Regime
135) (CALASA) (Art. 141)
(1) Spouse of petitioner has been sentenced to a (1) Termination of the civil interdiction
penalty which carries with it the penalty of civil
interdiction
(2) Spouse of petitioner is judicially declared an (2) Reappearance of absentee spouse
absentee
(3) Loss of parental authority of the spouse of (5) Restoration of parental authority to the spouse
petitioner has been decreed by the court previously deprived of it
(4) Spouse of petitioner has abandoned the latter or (4) When the spouse who left the conjugal home without
failed to comply with his or her obligations to the legal separation resumes common life with the other
family
(5) The spouse granted the power of administration in (3) When the court, being satisfied that the spouse
the marriage settlements has abused that power granted the power of administration in will not again
abuse that power, authorizes the resumption of said
administration
(6) At the time of the petition, the spouses have been (6) Reconciliation and resumption of common life of the
separated in fact for at least 1 year and spouse who have separated in fact for at least 1 year
reconciliation is highly improbable.
(7) When after voluntary dissolution of the ACP or CPG
has been judicially decreed upon the joint petition of
the spouses, they agree to the revival of the former
property regime. No voluntary separation of property
may thereafter be granted.
Separation of Property
Agreed upon in the marriage settlements by the spouses
Mandatory under Arts. 103 & 130 (subsequent marriages contracted by a surviving spouse
When it applies without judicial settlement of previous property regime)
Default property regime when there is reconciliation between spouses after judicial separation
of property
Present or future property or both
Each spouse’s earnings from his or her own profession, business, or industry
What it consists
Natural, industrial or civil fruits of spouse’s separate properties
of
May be total or partial
If partial, property not considered separate is presumed to pertain to the ACP
Family expenses: Both spouses are liable in proportion to their income; if insufficient, based on
Liabilities the current value of their separate properties
Creditors for family expenses: Spouses solidarily liable
Spouses may own, dispose, possess, and administer separate estates without the consent of the
other
Ownership, Administration of exclusive properties may be transferred between spouses when:
administration, 1. One spouse becomes the other spouse’s guardian
enjoyment, and 2. One spouse is judicially declared an absentee
disposition 3. One spouse is given the penalty of civil interdiction
4. One spouse becomes a fugitive
Conveyance between the spouses is allowed under Art. 1490, NCC.
PAGE 38
In Re: voluntary dissolution of CPG of spouses Bernas (1965):

A voluntary separation of properties is not perfected by mere consent but upon the decree of the court approving the
st nd
same. The petition for voluntary separation of property was denied because the children of the 1 and 2 marriages
were not informed; the separation of property may prejudice the rights and shares of the children.
Maquilan v. Maquilan (2007):

A compromise agreement with judicial recognition is valid, pending petition for declaration of nullity of marriage.
PROPERTY REGIME OF UNIONS WITHOUT MARRIAGE, ARTS. 147-148
Art. 147 Art. 148
Applicability
Man and woman living together as husband Man and woman living together as husband and wife, NOT
and wife, with capacity to marry (Art.5, capacitated to marry
without any legal impediment) (a) Under 18 years old
(a) at least 18 years old (b) Adulterous relationship
(b) not Art. 37 (incestuous void marriage) (c) Bigamous/polygamous marriage
(c) not Art. 38 (void marriage by reason of (d) Incestuous marriages under Art. 37
public policy) (e) Void marriages by reason of public policy under Art. 38
(d) not bigamous
Other void marriages due to absence of
formal requisite
Salaries and wages
Owned in equal shares Separately owned by parties
Properties acquired through exclusive funds
Remains exclusive, provided there is proof Remains exclusive
Villanueva v. CA (2004): Transfer of certificate Juaniza v. Jose (1979): Property acquired by a married party during
and tax declarations are not sufficient proof cohabitation with another not his spouse belongs to the CPG of
of joint contribution. the marriage, and the other party cannot be held jointly/severally
liable for it
Properties acquired by both through work and industry
Governed by rules on co-ownership Owned in common in proportion to respective contribution
Properties acquired while living together
Owned in equal shares since it is presumed to No presumption of joint acquisition. When there is evidence of
have been acquired through joint efforts joint acquisition but none as to the extent of actual contribution,
there is a presumption of equal sharing.
If one party did not participate in acquisition, Joaquina v. Reyes (2004): Prohibitions against donations between
presumed to have contributed through care spouses must likewise apply to donations between persons living
and maintenance of family and household together in illicit relations
Forfeiture
(1) In favor of their common children If one party is validly married to another his/her share in the co-
(2) In case of default of or waiver by any or all owned properties will accrue to the ACP/CPG of his/her existing
of the common children or their valid marriage
descendants, each vacant share shall
belong to the respective surviving If the party who acted in bad faith is not validly married to another,
descendants his/her share shall be forfeited in the same manner as that
In the absence of such descendants, such provided in Art 147.
share belongs to the innocent party
The same rules on forfeiture shall apply if both parties are in bad
faith.
PAGE 39
Yaptinchay v. Torres (1969):

Application of Article 148; there was no proof of actual contribution, while there was a subsisting marriage apart from
the union without marriage, therefore, the N. Forbes house goes to the CPG of subsisting marriage
Juaniza v. Jose (1979):

Property acquired by a married party during cohabitation with another not his spouse belongs to the CPG of the
marriage, and the other party cannot be held jointly/severally liable for it
Villanueva v. CA (2004):
Transfer of certificate and tax declarations are not sufficient proof of joint contribution.
Joaquino v. Reyes (2004):

Prohibitions against donations between spouses must likewise apply to donations between persons living together in
illicit relations;
Valdez vs. QC-RTC (1996):

Marriages that have been declared void come under the rules of co-ownership under FC147/148 regardless of the
reason.
The Family Except: For a suit between members of the same

family to prosper, the following are required:
(1) Earnest efforts towards a compromise have been
Art. 149. The family, being the foundation of the made
nation, is a basic social institution which public policy (2) Such efforts have failed
cherishes and protects. Consequently, family relations (3) Such earnest efforts and the fact of failure must
are governed by law and no custom, practice or be alleged
agreement destructive of the family shall be
recognized or given effect. Note: The case will be dismissed if it is shown that no
such efforts were made.
THE FAMILY AS AN INSTITUTION
ASPECTS OF FAMILY RELATIONS The rules shall not apply to cases, which may not be
(1) External Aspect the subject of compromise.
(a) Governed by law (Art. 149)
(b) Only in this aspect can third persons and the EXCEPTIONS TO THE GENERAL RULE – CANNOT BE SUBJECT
public interest be concerned OF COMPROMISE (ART 2035, CC; VJLAFF)
(2) Internal Aspect (1) Civil status of persons,
(a) Sacred to the family and inaccessible to law (2) Validity of marriage or a legal separation,
because law must respect the freedom of (3) Any ground for legal separation,
action of man (4) Future support,
(b) E.g. spiritual relations, sexual relations of (5) Jurisdiction of courts,
spouses, career or profession of spouses, (6) Future legitime
profession and career of spouses, practices
and customs of family Hontiveros v. RTC (1999):
Whenever a stranger is a party in a case involving
FAMILY RELATIONS INCLUDE: family members, the requisite showing of earnest
(1) Between husband and wife efforts to compromise is no longer mandatory, as such
(2) Between parents and children inclusion of a stranger takes the case out of the ambit
(3) Among other ascendants and descendants of Art. 151.
(4) Among brothers and sisters, full or half blood.
THE FAMILY HOME
General rule: (Art. 151): CONSTITUTED BY:
(1) Jointly by the husband and the wife
No suit between members of the same family shall (2) By an unmarried head of a family;
prosper.
PAGE 40
INCLUDES: REQUISITES TO BE A BENEFICIARY (RLD)

(1) Dwelling house where they and their family reside (1) The relationship is within those enumerated
(2) The land on which it is situated (Art. 152) (2) They live in the family home
(3) They are dependent for legal support on the head
The actual value of the family home shall not exceed, of the family
at the time of the constitution, the amount of Three
hundred thousand pesos (P300,000.00) in urban REQUIREMENTS FOR THE SALE, ALIENATION, DONATION,
areas, and Two hundred thousand pesos ASSIGNMENT, OR ENCUMBRANCE OF THE FAMILY HOME
(P200,000.00) in rural areas or such amounts as may (ART. 158)
hereafter be fixed by law. (Art. 157) (1) the written consent of the person constituting it,
(2) his/her spouse, and
A person may constitute and be the beneficiary of (3) majority of the beneficiaries of legal age
only one family home (Art. 161)
Note: If there is a conflict, the Court will decide.
The provisions of the Chapter on Family Home shall
govern existing family residences insofar as said In case of death of one or both spouses or the
provisions are inapplicable (Art. 162) unmarried head of the family (Art. 159):
The family home shall continue despite the death of
GUIDELINES: one or both spouses or of the unmarried head of the
(1) It is deemed constituted from time of actual family for a period of ten years, or as long as there is
occupation as a family residence a minor beneficiary.
(2) It must be owned by person constituting it
(3) It must be permanent The heirs cannot partition the home unless the court
(4) Rule applies to valid and voidable and even to finds compelling reasons therefore.
common-law marriages under Arts.147 and 148
(5) It continues despite death of one or more spouses REQUISITES FOR CREDITOR TO AVAIL OF THE RIGHT UNDER
or unmarried head of family for 10 years or as ARTICLE 160 (If a claim of a creditor is not among the
long as there is a minor beneficiary (Art.159) exceptions mentioned in Art. 155 and has reasonable
(6) Can only constitute one family home grounds to believe that the family home is worth
more than the amount fixed in Art. 157)
General rule: The family home is exempt from (EFA)
from the time of its constitution and so long as any of Requisites:
its beneficiaries actually resides therein (Art. 153): (1) He must be a judgment creditor;
(1) Execution (2) His claim is not among those excepted under
(2) Forced sale Article155, and
(3) Attachment (3) He has reasonable grounds to believe that the
family home is worth more than the maximum
Exceptions in the exemption of the family home from amount fixed in Art. 157.
execution (Art. 155)
(1) Nonpayment of taxes. Procedure to avail of right under Art. 160
(2) Debts incurred prior to the constitution of the (1) The creditor must file a motion in the court
family home. proceeding where he obtained a favorable
(3) Debts secured by mortgages on the premises decision for a writ of execution against the family
before or after such constitution. home.
(4) Debts due to laborers, mechanics, architects, (2) There will be a hearing on the motion where the
builders, materialmen and others who have creditor must prove that the actual value of the
rendered service or furnished material for the family home exceeds the maximum amount fixed
construction of the building. by the FC either at the time of its constitution or
BENEFICIARIES OF THE FAMILY HOME (ART. 154) as a result of improvements introduced thereafter
(1) Husband and wife, or an unmarried person who is its constitution.
the head of the family (3) If the creditor proves that the actual value
(2) Parents (may include parent-in-laws), exceeds the maximum amount the court will
ascendants, descendants, brothers and sisters order its sale in execution.
(legitimate/illegitimate), who are living in the (4) If the family home is sold for more than the value
family home and who depend on the head of the allowed, the proceeds shall be applied as follows:
family for support (a) First, the obligation enumerated in Article 157
must be paid
PAGE 41
(b) Then the judgment in favor of the creditor will (1) Executed & signed by husband and wife
be paid, plus all the costs of execution before the birth of the child.
(c) The excess, if any, shall be delivered to the (2) Recorded in the civil registry together with the
judgment debtor birth certificate of the child.
Versola v. Mandolaria (2006): [Tolentino]: Dual consent is required whether the

The proof that the house is the family home must be semen used comes from the husband or a third person
alleged against creditors; Applied the rule in Art. 160, donor
FC.
WHO ARE ILLEGITIMATE CHILDREN
Patricio v. Dario III (2006): General rule: Those conceived and born outside of a
WON the grandson of the deceased is a beneficiary valid marriage. [Art. 165]
according to Art. 154 FC. The beneficiary should satisfy
all requisites; he must be dependent on the head of the
family. Exceptions:
(1) Children of marriages void under Art. 36
Arriola v. Arriola (2008): (psychological incapacity).
This case involves half-brothers and a second wife; the (2) And under Art. 53 (the second marriage of a
family home includes the land it is built on. The rule in widow or widower who has not delivered to his or
Art. 159 of the FC regarding the 10 year period is her children by his or her first marriage the
applied, the parties involved must wait. legitime of said children). (Sempio-Dy)
De Castro v. Assidao-De Castro, (2008):

Common children born before the annulment are
legitimate, and therefore entitled to support from each
Paternity and Filiation of the spouses.
KINDS OF FILIATION (ARTS. 163, 164, 165): IMPUGNING LEGITIMACY

(1) Natural Grounds for impugning legitimacy of a child are [Art.
(a) Legitimate 166]:
(b) Illegitimate (1) Physical impossibility for the husband to have
(2) Legal Fiction (Adoption) sexual intercourse with his wife within the first
120 days of the 300 days which immediately
LEGITIMATE CHILDREN preceded the child's birth due to:
(a) Physical incapacity of the husband to have
WHO ARE LEGITIMATE CHILDREN (ART. 164) sexual intercourse with his wife
Those conceived or born during the marriage of (b) Husband and wife were living separately as to
parents either by natural means or by artificial make sexual intercourse impossible
insemination (c) Serious illness of the husband absolutely
preventing sexual intercourse
Natural/Biological (2) Other biological or scientific reasons, except
[Liyao v. Liyao (2002)]: A child conceived or born Artificial Insemination
during a valid marriage is presumed to belong to that (3) And in case of Artificial Insemination, the written
marriage, regardless of the existence of extramarital consent of either parent was vitiated through
relationships. fraud, violence, mistake, intimidation, or undue
influence
Artificial Insemination (Art. 164)
Requisites to be considered legitimate: Macadangdang v. CA (1980):
(a) Artificial insemination made on wife Mere proximate separation between the spouses is not
(b) Sperm comes from any of the following: sufficient physical separation as grounds for
(1) Husband impugning legitimacy.
(2) Third Person Donor
(3) Husband and third person donor Andal v. Macaraig (1951):
(c) In case of donor sperm, husband and wife must Serious illness of the husband which absolutely
authorize/ratify insemination in a written prevented him from having sexual intercourse with his
instrument wife, like if the husband was already in comatose or a
PAGE 42
vegetable, or sick with syphilis in the tertiary stage so (2) Within 2 years  if the husband or all heirs live in
that copulation was not possible. But tuberculosis, the Philippines but do not reside in the same city
even in its most crucial stage, does not preclude or municipality where the child's birth took place
copulation between the sick husband and his wife. or was recorded
(3) Within 3 years  if the husband or all heirs live
Jao v. CA (1987): outside the Philippines when the child's birth took
Blood-type matching is an acceptable means of place or was recorded in the Philippines
impugning legitimacy, covered by Art. 166(2), under
"biological or other scientific reasons." But this is only If the birth of the child has been concealed or was
conclusive of the fact of non-paternity. unknown to the husband, the above periods shall be
counted:
Legitimacy with regard to the mother: (1) From the discovery or knowledge of the birth of
(1) Child considered legitimate although [Art. 167]: the child, or
(a) Mother may have declared against its (2) From the discovery or knowledge of its
legitimacy registration,
(b) Mother may have been sentenced as an (3) Whichever is earlier.
adulteress (also applies to wife who was
raped) General rule: Only the husband can impugn the
(2) If the marriage is terminated and the mother legitimacy of a child. If he does not bring an action
contracted another marriage within 300 days within the prescribed periods, he cannot file such
after the termination of the former marriage, the action anymore thereafter, and this is also true with
rules shall govern in the absence of proof to the his heirs.
contrary [Art 168]:
(a) If child born before 180 days after the Exception: That the heirs of the husband may file the
solemnization of the subsequent marriage – action or continue the same within the periods
child is considered conceived during the prescribed in Art. 170 [Art. 171]:
former marriage, provided it be born within (a) If the husband died before the expiration of the
300 days after termination of the former period fixed for bringing his action
marriage (b) If he should die after the filing of the complaint
(b) If child born after 180 days following the without having desisted therefrom
celebration of the subsequent marriage – (c) If the child was born after the death of the
child is considered conceived during such husband.
marriage, even if it be born within 300 days
after the termination of the former marriage Sayson v. CA (1992): Legitimacy can only be attacked
directly.
Note: The legitimacy or illegitimacy of a child born
after 300 days following the termination of the PROOF OF FILIATION
marriage – burden of proof upon whoever alleges Legitimate children may establish their filiation by
the status. [Art. 169] any of the following [Art. 172]:
(1) Primary Evidence
[Tolentino:] If nobody asserts the legitimacy or (a) Their record of birth appearing in the civil
illegitimacy of the child described in Art. 169, the registry.
child should be considered illegitimate unless (b) An admission of his filiation (legitimate or
legitimacy is proved. Legitimacy cannot be presumed illegitimate) by his parent or parents in a
here since the birth was beyond the 300-day period public document or a private handwritten
of gestation. While it goes against the policy of law instrument and signed by said parent or
to lean in favor of legitimacy, this interpretation is parents
better than the anomalous situation created by Art.
169, which is a child without a status. (2) Secondary Evidence
(a) Proof of open and continuous possession of
ACTION FOR IMPUGNING LEGITIMACY [ARTS. 170 AND 171] status as legitimate or illegitimate child
May be brought within 1, 2, or 3 years from the (b) Any other means stated by the rules of court
knowledge of the birth, or the knowledge of or special laws
registration of birth.
(1) Within 1 year  if husband or any heirs reside in Note: Only in the absence of primary evidence can
the same city or municipality where the child was secondary evidence be admitted
born or his birth was recorded.
PAGE 43
ACTION FOR CLAIMING FILIATION [ART. 173]: reputation or tradition regarding pedigree like
(a) The child can bring the action during his or her inscriptions on tombstones, monuments, or coffin
lifetime, and once commenced such action plates.
survives even after the death of the parents. The
action does not prescribe as long as he lives. Eceta v. Eceta (2004):
(b) If the child dies during minority or in a state of Signature of the father on the birth certificate is
insanity, such action shall be transmitted to his considered as an acknowledgement of paternity and
heirs, who shall have a period of five years within mere presentation of a duly authenticated copy of such
which to institute the action. certificate will successfully establish filiations.
RIGHTS OF LEGITIMATE CHILDREN [ART. 174]: Heirs of Rodolfo Bañas v. Heirs of Bibiano Bañas
(a) To bear the surnames of the father and the (1985):
mother, in conformity with the provisions of the "Su padre [Your father]" ending in a letter is only proof
Civil Code on Surnames of paternal solicitude and not of actual paternity.
(b) To receive support from their parents, their Signature on a report card under the entry of
ascendants, and in proper cases, their brothers "Parent/Guardian" is likewise inconclusive of open
and sisters, in conformity with the provisions of admission.
this Code on Support
(c) To be entitled to the legitimate and other De Jesus v. Syquia (1933):
successional rights granted to them by the Civil By "open and continuous possession of the status of a
Code legitimate child" is meant the enjoyment by the child
of the position and privileges usually attached to the
ILLEGITIMATE CHILDREN status of a legitimate child, like bearing the paternal
Illegitimate children may establish their illegitimate surname, treatment by the parents and family of the
filiation in the same way and on the same evidence child as legitimate, constant attendance to the child's
(primary or secondary) as legitimate children. [Art. support and education, and giving the child the
175] reputation of being a child of his parents.
ACTION FOR CLAIMING FILIATION [ART. 175]: Agustin v. CA (2005):

(a) For actions based on primary evidence, the same DNA evidence can be used as proof of paternity.
periods stated in Art. 173 apply.
(b) For actions based on secondary evidence, the De Jesus v. Estate of Decedent Juan Gamboa Dizon
action may only be brought during the lifetime of (2001):
the alleged parent. The due recognition of an illegitimate child in a record
of birth, a will, a statement before a court of record, or
Mendoza v. Melia (1966): in any authentic writing, is in itself a consummated act
Baptismal certificates are given probative value only of acknowledgement of the child, and no further court
for births before 1930. Birth certificates must be signed action is required.
by the parents and sworn for it to be admitted as
evidence. Gono-Javier vs. Court of Appeals (1994):
Mere possession of status as an illegitimate child does
Baluyut v. Baluyut (1990): not make a recognized illegitimate child but is only a
Unsigned birth certificates are not evidence of ground for bringing an action to compel judicial
recognized filiation. recognition by the assumed parent.
Acebedo v. Arquero (2003): Herrera v. Alba (2005):

Baptismal certificates are only conclusive of the In assessing the probative value of DNA evidence,
sacrament administered, and cannot be used as proof therefore, courts should consider, among other things,
of filiation. the following data:
(a) How the samples were collected,
Lim v. CA (1975): (b) How they were handled,
Marriage certificates cannot be used as proof of (c) The possibility of contamination of the samples,
filiation. (d) The procedure followed in analyzing the samples,
(e) Whether the proper standards and procedures were
Jison v. CA (1998): followed in conducting the tests,
Rule 130, Sec. 40 is limited to objects commonly (f) The qualification of the analyst who conducted the
known as family possessions reflective of a family's tests.
PAGE 44
governing successional rights shall remain in

Estate of Rogelio Ong v. Diaz (2007): force.
DNA evidence can still be used even after the death of
the parent. LEGITIMATED CHILDREN
"Legitimated" children are illegitimate children who
Gotardo v. Buling (2012): because of the subsequent marriage of their parents
There are four significant procedural aspects of a are, by legal fiction, considered legitimate.
traditional paternity action that parties have to face:
a prima facie case, affirmative defenses, presumption TO BE CAPABLE OF LEGITIMATION:
of legitimacy, and physical resemblance between the (1) The child must have been conceived and born
putative father and the child. A prima facie case exists outside of wedlock; and
if a woman declares — supported by corroborative (2) General rule: The parents, at the time of the child's
proof — that she had sexual relations with the putative conception, were not disqualified by any
father; at this point, the burden of evidence shifts to impediment to marry each other (Art. 177).
the putative father. Further, the two affirmative
defenses available to the putative father are: (1) Exception: RA 9858 - Children born to parents
incapability of sexual relations with the mother due to who were so disqualified only because either or
either physical absence or impotency, or (2) that the both of them were below eighteen (18) years of
mother had sexual relations with other men at the age at the time of child’s conception may be
time of conception. legitimated.
Perla v. Baring and Perla (2012): PROCEDURE:

To prove open and continuous possession of the (a) Legitimation shall take place by a subsequent
status of an illegitimate child, there must be evidence valid marriage between the parents. The
of the manifestation of the permanent intention of the annulment of a voidable marriage shall not affect
supposed father to consider the child as his, by the legitimation. [Art. 178]
continuous and clear manifestations of parental (b) Effects of legitimation shall retroact to the time of
affection and care, which cannot be attributed to pure the child’s birth [Art. 180]
charity. (c) Legitimation of children who died before the
celebration of the marriage shall benefit their
Meanwhile, the lack of participation of the supposed descendants [Art. 181]
father in the preparation of a baptismal certificate
renders this document incompetent to prove paternity. GROUNDS FOR IMPUGNING LEGITIMATION:
Baptismal certificates are per se inadmissible in (1) The subsequent marriage of the child's parents is
evidence as proof of filiation and they cannot be void.
admitted indirectly as circumstantial evidence to prove (2) The child allegedly legitimated is not natural.
the same (3) The child is not really the child of the alleged
parents. (Sempio-Dy)
RIGHTS OF ILLEGITIMATE CHILD [ART. 176]:
(a) Use the surname and be under the parental RIGHTS:
authority of the mother The same as those of legitimate children [Art. 179]
(b) However, may use the surname of their father if
(1) Their filiation has been expressly recognized IMPUGNING LEGITIMATION [ART. 182]
by the father through the record of birth (1) May be made only by those who are prejudiced in
appearing in the civil register. their rights
(2) There is an admission in a public document or (2) Within five years from the time their cause of
private handwritten instrument made by the action accrues
father.
(3) Provided, the father has the right to institute
an action before the regular courts to prove
non-filiation during his lifetime [RA 9255]
(c) Shall be entitled to support in conformity with the
Family Code
(d) Legitime shall consist of one-half of the legitime
of a legitimate child. Except for such
modification, all other provisions of the Civil Code
PAGE 45
Adoption emergency reasons are allowed) in RP prior to

the filing of application and maintains such
residence until the decree is entered
(4) Has been certified by his/her diplomatic or
Legitimation Adoption consular office or any appropriate government
agency that he/she has the legal capacity to
Legal effect adopt in his/her country
The law merely makes The law merely creates by (5) His/her government allows the adoptee to
legal what exists by fiction a relation which enter his/her country as his/her adoptee
nature did not in fact exist (6) Has submitted all the necessary clearances
Persons affected and such certifications as may be required
Natural Children Strangers (generally)
Procedure **Items 3, 4 and 5 may be waived under the
Extrajudicial acts of Always by judicial decree following circumstances:
parents (a) Adopter is a former Filipino Citizen who seeks to
th
Who should apply adopt a relative within the 4 degree of
Both parents Both parents, but with consanguinity or affinity
exceptions allowing only (b) Adopter seeks to adopt the legitimate or
one of them to apply [RA illegitimate child of his/her Filipino spouse
85520] (c) Adopter is married to a Filipino Citizen and seeks
Effect on parent-child relationship to adopt jointly with his/her spouse a relative
th
Same status and rights Creates a relationship within the 4 degree of consanguinity or affinity
with that of a legitimate only between the child of the Filipino spouse
child not only in relation and the adopting parents
to the legitimizing (3) Guardians
parents but also to With respect to theirs ward after the termination
other relatives of the guardianship and clearance of his/her
accountabilities.
ADOPTION is a juridical act, which creates between
two persons a relationship similar to that which Husband and wife shall adopt jointly, EXCEPT:
results from legitimate paternity and filiation. (1) If one spouse seeks to adopt the legitimate child
of the other
RA 8552 – DOMESTIC ADOPTION LAW (2) If one of the spouse seeks to adopt his/her
WHO CAN ADOPT illegitimate child provided that other spouse has
(1) Filipino Citizens signified his/her consent
(a) Of legal age (3) If spouses are legally separated from each other
(b) With full civil capacity and legal rights
(c) Of good moral character Note: If spouses jointly adopt, parental authority
(d) Has not been convicted of any crime involving shall be exercised jointly
moral turpitude
(e) Emotionally and psychologically capable of WHO CAN BE ADOPTED
caring for children (a) Minor who has been administratively or judicially
(f) At least sixteen (16) years older than adoptee, declared available for adoption
except when adopter is biological parent of (b) Legitimate child of one spouse by another
the adoptee or is the spouse of the adoptee’s (c) Illegitimate child by a qualified adopter to
parent improve the child’s status to that of legitimacy
(g) In a position to support and care for his/her (d) A person of legal age if, prior to the adoption,
children in keeping with the means of the said person has been consistently considered
family and treated by the adopter(s) as his/her child
(2) Aliens since minority
Same for Filipinos provided further that: (e) A child whose previous adoption has been
(1) At least 27 years old rescinded
(2) His/her country has diplomatic relations with (f) A child whose biological or adoptive parent(s)
the Philippines has died, provided that no proceedings shall be
(3) Has been living continuously for 3 years initiated within 6 months from the time of death
(provided that absences not exceeding 60 of said parent(s)
days per 1 year for professional, business, or
PAGE 46
Persons whose written consent is necessary for Posting of the petition, then recommendation by
adoption [Sec. 9] the Regional Director of the DSWD (5 days each)
(1) The prospective adoptee if 10 years or older
(2) The prospective adoptee’s biological parents,
legal guardian or the government instrumentality Issuance of certification by DSWD Secretary
or institution that has custody of the child declaring the child legally available for adoption
(3) The prospective adopters’ legitimate and adopted
children who are 10 years or older
(4) The prospective adopters’ illegitimate children, if Notes:
any, who are 10 years or older and living with (1) Abandoned child – no proper parental
them care/guidance; or parents have deserted him/her
(5) The spouse, if any, of the person adopting or to be for at least 3 continuous months, including
adopted. foundlings
Note: A decree of adoption shall be effective as of the (2) Neglected child – his basic needs have been
date the original petition was filed. It also applies in deliberately unattended or inadequately
case the petitioner dies before the issuance of the attended within 3 continuous months either by:
decree of adoption to protect the interest of the (a) Physical Neglect – child is malnourished, ill-
adoptee. clad, without proper shelter, or without proper
provisions
PRE-ADOPTION PROCEDURES (b) Emotional Neglect – child is maltreated,
(1) Voluntary Commitment of biological mother raped, seduced, exploited, overworked, or in
wanting to put her child up for adoption moral danger
Counseling on her options other than adoption (3) Required supporting documents for a petition for
the declaration of involuntary commitment:
(a) Social Case Study Report by DSWD / LGU /
Explaining to her the implications of losing her institution charged with child’s custody
parental authority over the child (b) Proof of efforts to locate the child’s
parents/known relatives
(1) Written certification that a local/national
Continuing services shall be provided after radio/TV case was aired on 3 different
relinquishment to cope with feelings of loss, etc. occasions
and other services for his/her reintegration to the (2) Publication in 1 newspaper of general
community circulation
(3) Police report / barangay certification of
due diligence
Biological parent(s) who decide to keep the child (4) Returned registered mail to last known
shall be provided with adequate services and address of parents
assistance to fulfill their parental responsibilities (c) Birth certificate, if available
(d) Recent photo and photo upon
abandonment of child
Biological parent(s) who decide to put the child
for adoption shall sign the Deed of Voluntary ADOPTION PROCEDURES
Commitment (DVC), which shall be rescissible
within 3 months from signing of the same Inquiry of prospective adopters at DSWD
(2) Involuntary Commitment of abandoned or

Attendance of DSWD Adoption Fora and
neglected child
Seminars (include counseling)
Filing of a petition at Regional DSWD in the form
of an affidavit and with the required supporting
Application for Adoption
documents
PAGE 47
RIGHTS OF AN ADOPTED CHILD

Case Study Report (a) Parental Authority
All legal ties between biological parents and
adoptee are severed, and the same shall be
Certificate of Availability for Adoption vested on the adopter, except if the biological
parent is the spouse of the adopter. [Art. 189 as
amended]
(b) Legitimacy
Matching The adoptee shall be considered legitimate
son/daughter of the adopter for all intents and
purposes, and shall be entitled to all the rights
and obligations provided by law to legitimate
Placement children born to them without discrimination of
any kind. [Art. 189 as amended]
(c) Succession
Supervised Trial Custody Adopter and adoptee shall have reciprocal rights
of succession without distinction from legitimate
filiation, in legal and intestate succession. If
adoptee and his/her biological parents had left a
Home Study Report
will, the law on testamentary succession shall
govern. [Art. 189 as amended]
Recommendation and Consent of DSWD Art. 190 as amended. Rules on legal or intestate
succession to the estate of the adoptee:
Petition for Adoption (1) Legitimate and illegitimate children, descendants

and the surviving spouse of the adoptee shall inherit
in accordance with the ordinary rules of
legal/intestate succession
Adoption Decree
(2) When the surviving spouse OR illegitimate children
AND adopters concur, they shall inherit on a 50-50
Note: After the decree of adoption, the court may basis
also issue a travel authority, if needed; DSWD to
provide post adoption services (3) When the surviving spouse AND illegitimate
children AND adopters concur, they shall inherit on a
WHO MAY NOT ADOPT/ BE ADOPTED 1/3-/1/3-1/3 basis
Art. 184 (as amended by RA 8552)
The following may not adopt: (4) When only adopters survive, they shall inherit
(1) The guardian, with respect to the ward prior to 100% of the estate
the approval of the final accounts rendered upon
the termination of the guardianship (5) When only collateral blood relatives survive,
(2) Any person convicted of a crime of moral ordinary rules of legal or intestate succession shall
turpitude apply
Art. 187
Art. 365, NCC. An adopted child shall bear the
The following may not be adopted:
surname of the adopter.
(1) A person of legal age unless he is a natural child
of the adopter or of his/her spouse; or he was
treated as a natural child since minority RESCISSION OF ADOPTION
(2) An alien whose government has no diplomatic Adoptee may request for rescission, with the
relations with the Philippines assistance of DSWD if he/she is a minor or over 18
(3) A person already adopted unless his adoption has but incapacitated, based on the ff. grounds:
been previously revoked/rescinded (1) Repeated physical and verbal maltreatment by
adopters despite having undergone counseling
(2) Attempt on life of adoptee
(3) Sexual assault or violence
PAGE 48
(4) Abandonment or failure to comply with parental Sec. 22 (RA 8552)

obligations A person who has, prior to the effectivity of RA 8552,
simulated the birth of a child shall not be punished
Note: Adoption, being in the best interest of the for such act, PROVIDED:
child, shall not be subject to rescission by the (a) The simulation was for the child’s best interest
adopter(s). However, the adopter(s) may disinherit (b) Child has been treated consistently as his own
the adopted based on causes enumerated in Art. 919 (c) Petition filed within 5 years of RA 8552’s
of the NCC: effectivity (2003)
(1) Conviction of an attempt on the life of the
adopter Three-in-one Procedure
(2) Having accused, without grounds, the adopter of (a) Correction of entries in birth certificate
a crime punishable by imprisonment for more (b) Declaration of abandonment
than 6 years (c) Adoption decree
(3) Conviction of adultery/concubinage with the
adopter’s spouse RA 8043 – THE LAW ON INTER-COUNTRY
(4) Having caused the adopter to make or change a ADOPTION
will by force, intimidation or undue influence INTER-COUNTRY ADOPTION refers to the socio-legal
(5) Refusal without just cause to support the adopter process of adopting a Filipino child by a foreigner or
(6) Maltreatment of the adopter by word/deed a Filipino citizen permanently residing abroad where
(7) Living a dishonorable/disgraceful life the petition is filed, the supervised trial custody is
(8) Conviction of a crime which carries with it the undertaken, and the decree of adoption is issued
penalty of civil interdiction outside the Philippines
Effects of Rescission [Sec. 20]: WHO CAN ADOPT

(1) Parental authority of the adoptee's biological Any foreign national or a Filipino citizen permanently
parents, if known, OR the legal custody of the residing abroad who has the qualifications and none
DSWD shall be restored if the adoptee is still a of the disqualifications under the Act may file an
minor or incapacitated application if he/she:
(2) Reciprocal rights and obligations of the adopters (a) Is at least 27 years of age and at least 16 years
and the adoptee shall be extinguished older than the child to be adopted, at the time of
(3) Court shall order the Civil Registrar to cancel the application unless the adopter is the parent by
amended certificate of birth of the adoptee and nature of the child to be adopted or the spouse of
restore his/her original birth certificate such parent
(4) Succession rights shall revert to its status prior to (b) If married, his/her spouse must jointly file for the
adoption, but only as of the date of judgment of adoption
judicial rescission (c) Has the capacity to act and assume all rights and
(5) Vested rights prior to judicial rescission shall be responsibilities of parental authority under his
respected national laws, and has undergone the
appropriate counseling from an accredited
Note: Rescission contemplates a situation where the counselor in his/her country
adoption decree remains valid until its termination (d) Has not been convicted of a crime involving moral
turpitude
RECTIFICATION OF SIMULATED BIRTH (e) Is eligible to adopt under his/her national law
Simulation of birth is the tampering of LCR records (f) Is in a position to provide the proper care and
to make it appear that a certain child was born to a support and to give the necessary moral values
person who is not his/her biological parent, causing and example to all his children, including the
said child to lose his true identity/status child to be adopted
(g) Agrees to uphold the basic rights of the child as
Sec. 21-b (RA 8552) embodied under Philippine laws, the U.N.
Any person who shall cause the fictitious registration Convention on the Rights of the Child, and to
of the birth of a child under the name(s) of a abide by the rules and regulations issued to
person(s) who is not his/her biological parent(s) shall implement the provisions of this Act
be guilty of simulation of birth, and shall be (h) Comes from a country with whom the Philippines
punished by prision mayor in its medium period and has diplomatic relations and whose government
a fine not exceeding Fifty thousand pesos maintains a similarly authorized and accredited
(P50,000.00). agency and that adoption is allowed under
his/her national laws
PAGE 49
Landingin v. Republic (2006)

WHO CAN BE ADOPTED Consents for adoption must be written and notarized.
(a) Only a legally-free child may be the subject of
inter-country adoption. Sayson v. CA (1992):
(b) A legally-free child is one who has been Adopted children have a right to represent their
voluntarily or involuntarily committed to the adopters in successional interests. (“Although an
DSWD of the Philippines, in accordance with the adopted child shall be deemed to be a legitimate child
Child and Youth Welfare Code. and have the same rights as the latter, these rights do
(c) No child shall be matched to a foreign adoptive not include the right of representation. The
family unless it is satisfactorily shown that the relationship created by the adoption is between only
child cannot be adopted locally. the adopting parents and the adopted child. It does
(d) In order that such child may be considered for not extend to the blood relatives of either party.”)
placement, the following documents must be
submitted to the Board: Republic v. Hernandez (1996):
(a) Child study The change of surname of the adoptee as a result of
(b) Birth Certificate / Foundling Certificate the adoption and to follow that of the adopter does
(c) Deed of Voluntary Commitment/ Decree of not lawfully extend to or include the proper or given
Abandonment/ Death Certificate of parents name. The birth certificate, as it appears in the civil
(d) Medical Evaluation / History register, contains the official name. It does not matter
(e) Psychological Evaluation, as necessary if the mother, with all intention to abandon it later,
(f) Recent photo of the child named the child for the sake of naming it. If they really
want to change the name, they must institute another
Tamargo v. CA (1992): action under Rule 103 of the Rules of Court.
Where the petition for adoption was granted after the
child had shot and killed a girl, the Supreme Court did
not consider that retroactive effect may be given to the
decree of adoption so as to impose a liability upon the
adopting parents accruing at a time when adopting
Support
parents had no actual or physically custody over the
adopted child. Retroactive effect may perhaps be given WHAT IT COMPRISES
to the granting of the petition for adoption where such Consists of everything indispensable for sustenance,
is essential to permit the accrual of some benefit or dwelling, clothing, medical attendance, education
advantage in favor of the adopted child. In the instant and transportation, in keeping with the financial
case, however, to hold that parental authority had capacity of the family. [Art. 194]
been retroactively lodged in the adopting parents so as (a) Education includes a person’s schooling or
to burden them with liability for a tortuous act that training for some profession, trade or vocation.
they could not have foreseen and which they could not [Art. 194]
have prevented would be unfair and unconscionable. (b) Transportation includes expenses in going to and
from school, or to and from place of work. [Art.
Lazatin v. Campos (1979): 194]
Adoption is a juridical act, proceeding in rem. Because (c) The right and duty to support, especially the right
it is artificial, the statutory requirements in order to to education, subsists even beyond the age of
prove it must be strictly carried out. Petition must be majority. [Art. 194]
announced in publications and only those proclaimed
by the court are valid. Adoption is never presumed. WHO ARE OBLIGED
TO SUPPORT EACH OTHER:
Santos v. Aranzanso (1966): (a) Spouses;
Validity of facts behind a final adoption decree cannot (b) Legitimate ascendants and descendants;
be collaterally attacked without impinging on that (c) Parents and their children (legitimate and
court’s jurisdiction. illegitimate) and the children of the latter
(legitimate and illegitimate);
DSWD v. Belen (1997): (d) Legitimate brothers and sisters, whether of full or
Participation of the appropriate government half-blood; [Art. 195]
instrumentality in performing the necessary studies (e) Illegitimate brothers and sisters, whether of full
and precautions is important and is indispensable to or half-blood, EXCEPT when the need for support
assure the child’s welfare. of one (of age) is due to a cause imputable to
his/her fault or negligence. [Art. 196]
PAGE 50
Note: Both legitimate and illegitimate children are Lacson v. San Jose-Lacson (1968):
entitled to support. Man is still liable for support in arrears since the
mother advanced it from a stranger (the uncle of the
PROPERTIES ANSWERABLE FOR SUPPORT daughters).
From the separate property of the obligor. If no
separate property, the ACP/CPG (if financially Lacson v. Lacson (2006):
capable) shall advance the support, to be deducted Acknowledgment of and commitment to comply with
from the obligor’s share upon liquidation of such support obligation through a note in his own
regime. [Art. 197] handwriting is proof that a demand was made.
ORDER OF SUPPORT Gotardo v. Buling (2012):

If there are multiple obligors (SDAB) The amount of support is variable and, for this reason,
(1) Spouses no final judgment on the amount of
(2) Descendants, nearest in degree support is made as the amount shall be in proportion
(3) Ascendants, nearest in degree to the resources or means of the giver and the
(4) Brothers and Sisters [Art. 199] necessities of the recipient.
[Tolentino]: The order of liability among ascendants STRANGER GIVES SUPPORT

and descendants would be: (1) legitimate children When, WITHOUT THE KNOWLEDGE of the person
and descendants, (2) legitimate parents and obliged to give support, it is given by a stranger, the
ascendants, (3) illegitimate children and their stranger has the right to claim the same from the
descendants. person obliged, unless it appears that he gave it
without intention of being reimbursed. [Art. 206]
When two or more are obliged to give support, the
payment shall be divided between them IN
PROPORTION to their resources; PERSON OBLIGED REFUSES OR FAILS TO GIVE SUPPORT
When the person obliged to give support UNJUSTLY
Also, in case of URGENT NEED and by special REFUSES OR FAILS to give support when urgently
circumstances, judge may order only one obligor to needed, any third person may furnish support to the
furnish support without prejudice to reimbursement needy individual, with right of reimbursement from
from other obligors of the share due from them (Art. the person obliged to give support. This particularly
200). applies when the father or mother of a minor child
unjustly refuses to support or fails to give support to
If there are multiple recipients and only one obligor, the child when urgently needed. [Art. 207]
and the latter has no sufficient means to satisfy all
claims: CONTRACTUAL SUPPORT OR THAT GIVEN BY WILL
(1) Observe order in Article 199 (SDAB) as to whose The excess in amount beyond that required for legal
claim shall be satisfied first; support shall be subject to levy on attachment or
(2) But if the concurrent obligees are the spouse and execution. [Art. 208]
a child subject to parental authority, the child
shall be preferred. [Art. 200] Reason: The amount of support agreed upon in the
contract or given in the will can be more than what
[Tolentino]: The above preference given to a child the recipient needs (Sempio-Diy).
under parental authority over the spouse should
prevail only if the person obliged to support pays it Furthermore, contractual support shall be subject to
out of his own separate property. So if the support adjustment whenever modification is necessary due
comes from ACP or CPG, the above rule of to changes in circumstances manifestly beyond the
preference for the child does not apply. contemplation of the parties. [Art. 208]
Pelayo v. Lauron (1909): SUPPORT DURING MARRIAGE LITIGATION

Even if the parents-in-law were the ones who called for Pending legal separation or annulment, and for
the physician’s services for the childbirth of their declaration of nullity, support (pendente lite) for
daughter-in-law, it is the woman’s husband who is spouses and children will come from the ACP/CPG.
bound to pay the fees due to the physician. After final judgment granting the petition, mutual
support obligation between spouses ceases. (But in
legal separation court may order guilty spouse to
give support to innocent spouse.) [Art. 198]
PAGE 51
Note: De facto separation does not affect the ACP, PARENTAL AUTHORITY AND RESPONSIBILITY MAY NOT BE
except that the spouse who leaves the conjugal RENOUNCED OR TRANSFERRED EXCEPT IN THE CASES
home without just cause shall not be entitled to AUTHORIZED BY LAW. [ART. 210]
support. [Art. 100]
CASES WHEN PARENTAL AUTHORITY AND RESPONSIBILITY
AMOUNT MAY BE TRANSFERRED OR RENOUNCED:
The amount of support is in proportion to the means (a) Adoption;
of the provider and the needs of the receiver, and can (b) Guardianship; or
be reduced or increased if such circumstances (c) Commitment of the child in an entity or
change. [Arts. 201, 202] institution engaged in child care or in a children’s
home
WHEN DEMANDABLE
(a) The obligation to give support shall be RULES AS TO THE EXERCISE OF PARENTAL AUTHORITY:
DEMANDABLE from the time the person who has (a) Jointly exercised by the father and mother over
a right to receive the same needs it for their common children, but in case of
maintenance, but it shall not be PAYABLE except disagreement, the father's decision shall prevail,
from the date of judicial or extra-judicial demand. unless there is a judicial order to the contrary [Art.
[Art. 203] 211]
(b) Support pendente lite may be claimed in (b) Exercised by the mother if the child is illegitimate
accordance with the Rules of Court. [Art. 203] [Art.176]
(c) Payment shall be made within the first five days (c) Children under parental authority shall always
of each corresponding month. When the recipient observe respect and reverence towards their
dies, his heirs shall not be obliged to return what parents and are obliged to obey them [Art. 211]
he has received in advance. [Art. 203]
CHARACTERISTICS OF PARENTAL AUTHORITY:
OPTIONS (1) Natural right and duty of parents [Art. 209, FC]
(a) Payment of the amount; or (2) Cannot be renounced, transferred or waived,
(b) Receiving and maintaining the recipient in the except in cases authorized by law [Art 210, FC]
home of the provider, unless there is a legal or (3) Jointly exercised by the father and the mother
moral obstacle for doing so. [Art. 211, FC]
(4) Purely personal and cannot be exercised through
ATTACHMENT agents
The right to receive support as well as any money or (5) Temporary
property obtained as such support shall not be levied
upon on attachment or execution. (Art. 205) PARENTAL PREFERENCE RULE:
The natural parents, who are of good character and
[Tolentino:] This is to protect that which the law gives who can reasonably provide for the child, are
to the recipient against want and misery. ordinarily entitled to custody as against all persons.
[Santos v CA (1995)]
WHO EXERCISES AUTHORITY IN CASES OF DEATH,
Parental Authority ABSENCE, UNSUITABILITY, REMARRIAGE, OR SEPARATION

OF PARENTS:
(1) In case one parent is absent or already dead, the
GENERAL PROVISIONS present or surviving parent [Art. 212]
Parental authority is the mass of rights and - Remarriage of the surviving parent shall not
obligations which parents have in relation to the affect his/her parental authority over the
person and property of their children until their children, unless the court appoints another
emancipation, and even after this under certain person to be the guardian of the children or
circumstances (Manresa). their property [Art. 212]
(2) In case of a void/annulled marriage, and there is
PARENTAL AUTHORITY INCLUDES [ART. 209]: no agreement between spouses, the parent
(1) The caring for and rearing of children for civic designated by the court [Art. 43 par. 1; Art. 49]
consciousness and efficiency; (3) Innocent spouse gets custody of minor children in
(2) The development of the moral, mental and legal separation [Art. 63 par. 3]
physical character and well-being of said children
PAGE 52
(4) The court shall take into account all relevant SUBSTITUTE PARENTAL AUTHORITY OVER DISADVANTAGED
considerations, especially the choice of the child CHILDREN (ART. 217)
over seven years of age, unless the parent chosen Entrusted in summary judicial proceedings to:
is unfit [Art. 213 par. 1] (1) Heads of children’s homes
(5) Substitute parental authority [Art. 214] (2) Orphanages
(a) In case of death, absence or unsuitability of Similar institutions duly accredited by the proper
the parents, substitute parental authority shall government agency (such as the DSWD)
be exercised by the surviving grandparent
(b) When several grandparents survive, the one Who are disadvantaged children:
designated by the court shall exercise (1) Foundlings
parental authority, taking into account all (2) Abandoned
relevant considerations, especially the choice (3) Neglected
of the child over seven years of age, unless the (4) Abused
grandparent chosen is unfit (5) Others similarly situated
DESCENDANT’S PRIVILEGE OF REFUSAL TO TESTIFY [ART. PERSONS EXERCISING SPECIAL PARENTAL AUTHORITY
215]: No descendant shall be compelled, in a criminal [ART. 218 FC]
case, to testify against his parents and grandparents. (1) School, its administrators and teachers; or
(2) The individual, entity or institution engaged in
Exception: When such testimony is indispensable in child care
(1) a crime against the descendant, or (2) a crime by
one parent against the other. Note: Exercised over minor child while under their
supervision, instruction or custody; authorized
TENDER YEARS PRESUMPTION: activities include those conducted both within or
NO child under 7 years of age shall be separated outside the school, entity or institution
from the mother, unless the court finds compelling
reasons to order otherwise. [Art. 213 par 2; Gamboa v. Substitute Special Parental Authority
CA (2007)] Parental Authority
It is exercised in It is exercised concurrently with
Examples of compelling reasons are: case of death, the parental authority of the
(1) When the mother is insane; absence, or in parents and rests on the theory
(2) with a communicable disease that might case of that while the child is in the
endanger the life or health of the child; unsuitability of custody of the person exercising
(3) is maltreating the child; or parents. special parental authority, the
(4) has another child by another man who lives with parents temporarily relinquish
her. [Cervantes v. Fajardo (1989)] parental authority over the child
to the latter.
Note: Prostitution or infidelity to husband does not
make a mother unfit as parent. St. Mary’s Academy v. Carpitanos (2002):
The special parental authority and responsibility
SUBSTITUTE AND SPECIAL PARENTAL applies to all authorized activities, whether inside or
AUTHORITY outside the premises of the school, entity or institution.
PERSONS EXERCISING SUBSTITUTE PARENTAL AUTHORITY
LIABILITY OF THOSE EXERCISING SPECIAL PARENTAL
IN DEFAULT OF PARENTS OR JUDICIALLY APPOINTED
AUTHORITY OVER THE CHILD (ART. 219 FC)
GUARDIAN (IN THIS ORDER):
(1) Principal and solidary liability for damages
(a) The surviving grandparent [Art. 214, FC]
caused by the acts or omissions of the minor child
(b) Oldest brother or sister, over 21 years old, unless while under their special parental authority
unfit or unqualified.
(2) Subsidiary liability for the parents and judicial
(c) Child’s actual custodian, over 21 years old, unless
guardians of the minor, or those exercising
unfit or unqualified.
substitute parental authority over such minor for
his acts and omissions
Note: The same order applies to the appointment of
judicial guardian over the property of the child
Note: Both groups can use the defense that they
exercised proper diligence to avoid liability
PAGE 53
EFFECT OF PARENTAL AUTHORITY UPON THE (3) If the court finds the petition meritorious,
PERSONS OF THE CHILDREN disciplinary measures may include the
commitment of the child for not more than 30
RIGHTS OF PARENTS UPON THE PERSON OF THE CHILDREN: days in entities or institutions engaged in child
(1) To have them in their custody [Art. 220] care or in children’s homes duly accredited by the
(2) To represent them in all matters affecting their proper government agency. [Art. 224]
interests [Art. 220] (a) The parent exercising parental authority shall
(3) To demand from them respect and obedience not interfere with the case of the child
and impose necessary discipline on them [Art. whenever committed but shall provide for his
220] support. [Art. 224]
(4) To give or withhold consent to their marriage, (b) Upon proper petition or at its own instance,
their marriage settlements, their donations by the court may terminate the commitment of
reason of marriage, adoption, and employment the child whenever just and proper. [Art. 224]
(Art. 220) If the court finds the petitioner at fault, irrespective of
(5) To disinherit them for just cause (Tolentino) the merits of the petition, or when the circumstances
so warrant, the court may also order the deprivation
People v Silvano (1999): or suspension of parental authority or adopt such
Art. 220 which states that the parent has a right to other measures as it may deem just and proper. [Art.
impose necessary discipline on the child does not 223]
authorize the parent to invade or disregard the
child’s honor and dignity under the mask of EFFECTS OF PARENTAL AUTHORITY UPON THE
discipline. Such acts can never be justified as PROPERTY OF THE CHILDREN
parental punishment. (a) The father and mother shall jointly exercise legal
guardianship over the property of the minor child
DUTIES OF PARENTS UPON THE PERSON OF THE CHILDREN: without court appointment. [Art. 225]
(a) To support them, providing for their upbringing in (b) In case of disagreement, the father’s decision
accordance with their means [Art. 220] shall prevail, unless there is judicial order to the
(b) To educate, instruct, and provide them with moral contrary. [Art. 225]
and spiritual guidance and love and (c) The ordinary rules on guardianship shall be
understanding [Art. 220] merely suppletory except when the child is under
(c) To defend them against unlawful aggression [Art. special parental authority, or the guardian is a
220] stranger, or a parent has remarried, in which case
(d) To give their lawful inheritance (Tolentino) the ordinary rules on guardian ship shall apply.
(e) To perform such other duties as are imposed by [Art. 225]
law [Art. 220] (d) If the market value of the property or the annual
(f) To answer for damages caused by their fault or income of the child exceeds P50,000, the parent
negligence and for the civil liability for crimes is required to furnish a bond of not less than 10%
committed by them. [Art. 221] of the value of the child’s property or income.
[Art. 225]
SUBSTITUTE REPRESENTATION [ART. 222]
The courts may appoint a guardian of the child’s PROCEDURE IN THE APPROVAL OF THE PARENT’S BOND
property, or a guardian ad litem when the best [ART. 225]
interests of the child so requires. (a) A verified petition for approval of the bond shall
be filed in the proper court of the place where the
COURT ASSISTANCE IN THE DISCIPLINE OF THE CHILD child resides.
[ARTS. 223-224] (b) If the child resides in a foreign country, the
(1) The parents or, in their absence or incapacity, the petition shall be filed in the proper court of the
individual, entity or institution exercising parental place where the property or any part thereof is
authority, may petition the proper court of the situated.
place where the child resides, for an order (c) The petition shall be docketed as a summary
providing for disciplinary measures over the child. special proceeding. The court shall determine
[Art. 223] the amount of the bond, but shall not be less
(2) The child shall be entitled to the assistance of than 10% of the market value of the child’s
counsel, either of his choice or appointed by the property or of his annual income.
court, and a summary hearing shall be conducted
wherein the petitioner and the child shall be
heard. [Art. 223]
PAGE 54
OWNERSHIP OF CHILD’S ACQUISITIONS [ART. 226] (4) Upon final judgment of a competent court
The property of the unemancipated child earned or divesting the party concerned of parental
acquired with his work or industry or by onerous or authority.
gratuitous title shall belong to the child in ownership
and shall be devoted exclusively to the latter’s GROUNDS FOR SUSPENSION OF PARENTAL AUTHORITY
support and education, unless the title or transfer [CLEBC; ART. 230-231]
provides otherwise. (1) Conviction of parent for crime which carries with it
the penalty of civil interdiction
PARENT’S USUFRUCT [ART. 226] (2) Treats child with excessive harassment and
The right of the parents over the fruits and income cruelty
(not the property itself) of the child’s property shall (3) Gives corrupting orders, counsel, or example
be limited primarily to the child’s support and (4) Compels child to beg
secondarily to the collective daily needs of the family. (5) Subjects or allows acts of lasciviousness
WHEN PARENTS ENTRUST THE MANAGEMENT OF THEIR SCOPE OF SUBSTITUTE AND SPECIAL PARENTAL AUTHORITY
PROPERTIES TO A CHILD [ART. 227] [ART. 233]
(a) If the parents entrust the management or (a) The person exercising substitute parental
administration of any of their properties to an authority shall have the same authority over the
unemancipated child, the net proceeds of such person of the child as the parents.
property shall belong to the owner. (b) In no case shall the school administrators, teacher
(b) The child shall be given a reasonable monthly or individual engaged in child care exercising
allowance in an amount not less than that which special parental authority inflict corporal
the owner would have paid if the administrator punishment upon the child.
were a stranger, unless the owner grants the
entire proceeds to the child. RA 7610 – CHILD ABUSE LAW
(c) In any case, the proceeds thus given in whole or An ascendant, stepparent or guardian of a minor
in part shall not be charged to the child’s who shall induce, deliver or offer the minor to:
legitime. (1) Any one prohibited to keep the minor or
(2) Any one prohibited to have in his company a
SUSPENSION OR TERMINATION OF PARENTAL minor, twelve (12) years or under or who is ten (10)
AUTHORITY; years or more his junior in any public or private
RA 7610 – CHILD ABUSE LAW place, hotel, motel, beer joint, discotheque,
cabaret, pension house, sauna or massage parlor,
PARENTAL AUTHORITY PERMANENTLY TERMINATES beach and/or other tourist resort or similar places
(1) Upon death of parents [Art. 228] shall suffer penalties and imprisonment.
(2) Upon death of child [Art. 228]
(3) Upon emancipation of child [Art. 228] Note: Those not prohibited to have in his company
(4) If the parents exercising parental authority has such minor in any of the mentioned places: anyone
subjected the child or allowed him to be who is related within the fourth degree of
subjected to sexual abuse [Art. 232] consanguinity or affinity or any bond recognized by
law, local custom and tradition or acts in the
Note: In the case of death of parents, there is no performance of a social, moral or legal duty
absolute termination of parental authority because
while the child is still a minor, the grandparents,
brothers and sisters, or a guardian may exercise
substitute parental authority over the child [Art. 216]
Emancipation, as amended
TERMINATION OF PARENTAL AUTHORITY WHICH CAN BE
REVIVED BY FINAL JUDGMENT [ART. 229]
by RA 6809
(1) Upon adoption of the child;
(2) Upon the appointment of a general guardian for Art. 234. Emancipation takes place by the attainment
the child; of majority. Unless otherwise provided, majority
(3) Upon judicial declaration of commences at the age of eighteen years.
(a) Abandonment of the child in a case filed for
the purpose Art. 236. Emancipation shall terminate parental
(b) Absence or incapacity of the person exercising authority over the person and property of the child who
parental authority shall then be qualified and responsible for all acts of
PAGE 55
civil life, save the exceptions established by existing exercised by the proper court authorized to hear
laws in special cases. family cases, if one exists, or in the regional trial
court or its equivalent sitting in the place where
Contracting marriage shall require parental consent either of the spouses resides. [Art. 241]
until the age of twenty-one.
NOTIFICATION TO OTHER SPOUSE:
Nothing in this Code shall be construed to derogate (1) Upon the filing of the petition, the court shall
from the duty or responsibility of parents and notify the other spouse, whose consent to the
guardians for children and wards below twenty-one transaction is required, of said petition, ordering
years of age mentioned in the second and third said spouse to show cause why the petition
paragraphs of Article 2180 of the Civil Code. should not be granted, on or before the date set
RA 6809: in said notice for the initial conference.
By virtue of this law, emancipation can no longer (2) The notice shall be accompanied by a copy of the
take place by virtue of the minor’s marriage or by the petition and shall be served at the last known
concession of the parents to a minor in a recorded address of the spouse concerned. [Art. 242]
public instrument.
PROCEDURE:
(1) A preliminary conference shall be conducted by
the judge personally without the parties being
assisted by counsel.
Summary Judicial (2) After the initial conference, if the court deems it
Proceedings in the Family useful, the parties may be assisted by counsel at
the succeeding conferences and hearings. [Art.
Law 243]
(3) If the petition is not resolved at the initial
conference, said petition shall be decided in a
PROCEDURAL RULES PROVIDED FOR IN THIS
summary hearing. Basis of summary hearing (at
TITLE SHALL APPLY TO [ART. 238]:
the sound discretion of the court):
(1) Separation in fact between husband and wife
(a) Affidavits
(2) Abandonment by one of the other
(b) Documentary evidence
(3) Incidents involving parental authority
(c) Oral testimonies at the court’s sound
discretion. If testimony is needed, the court
SEPARATION IN FACT
shall specify the witnesses to be heard and the
A verified petition alleging the following facts is
subject-matter of their testimonies, directing
required when [Art. 239]:
the parties to present said witnesses. [Art.
(a) A husband and wife are separated in fact; or,
246(a)]
(b) One has abandoned the other
WHEN APPEARANCE OF SPOUSES REQUIRED:
Situation: Where one of them seeks judicial
(1) In case of non-appearance of the spouse whose
authorization for a transaction where the consent of
consent is sought, the court shall inquire into the
the other spouse is required by law but such consent
reasons for his failure to appear, and shall require
is withheld or cannot be obtained
such appearance, if possible. [Art. 244]
(2) If, despite all efforts, the attendance of the non-
The petition shall:
consenting spouse is not secured, the court may
(1) Attach the proposed deed, if any, embodying the
proceed ex parte and render judgment as the
transaction, if none, shall describe in detail the
facts and circumstances may warrant. In any
said transaction and state the reason why the
case, the judge shall endeavor to protect the
required consent thereto cannot be secured.
interests of the non-appearing spouse. [Art. 245]
(2) The final deed duly executed by the parties shall
be submitted to and approved by the court.
NATURE OF JUDGMENT: The judgment of the court
shall be immediately final and executory. [Art 247]
SEPARATE CLAIM FOR DAMAGES: Claims for damages by
either spouse, except costs of the proceedings, may
RULES APPLICABLE FOR ADMINISTERING OR ENCUMBERING
be litigated only in a separate action. [Art. 240]
SEPARATE PROPERTY OF SPOUSE: The petition for
judicial authority to administer or encumber specific
JURISDICTION:
Jurisdiction over the petition shall,
separate property of the abandoning spouse and to
upon proof of notice to the other spouse, be
use the fruits or proceeds thereof for the support of
PAGE 56
the family shall also be governed by these rules. [Art.

248] Retroactive Effect
INCIDENTS INVOLVING PARENTAL AUTHORITY RETROACTIVE EFFECT
PROCEDURE
(1) Such petitions shall be verified and filed in the This Code shall have retroactive effect insofar as it
proper court of the place where the child resides. does not prejudice or impair vested or acquired
[Art. 250] rights in accordance with the Civil Code or other
(2) Upon the filing of the petition, the court shall laws. [Art 256]
notify the parents or, in their absence or
incapacity, the individuals, entities or institutions INVALIDITY OF OTHER PROVISIONS
exercising parental authority over the child. [Art. If any provision is held invalid, other provisions not
251] affected shall remain valid. [Art. 255]
Note:
(a) Petitions filed under Articles 223, 225 and 235 of
this Code involving parental authority shall be
verified. [Art. 249]
Funeral, NCC Arts. 305-310
(b) The rules in Chapter 2 hereof shall also govern
summary proceedings under this Chapter insofar The duty and the right to make arrangements for the
as they are applicable [Art. 253] funeral of a relative shall be in accordance with the
(c) The foregoing rules in Chapter 2 (Separation in order established for support, under Article 294 [Art.
Fact) and (Incidents Involving Parental Authority) 305]:
hereof shall likewise govern summary (1) Spouse
proceedings filed (2) Descendants in the nearest degree. In case of
(1) Declaration of presumptive death [Art. 41] descendants of the same degree, or of brothers
(2) Delivery of presumptive legitime [Art. 51] and sisters, the oldest shall be preferred.
(3) Fixing of family domicile [Art. 69] (3) The ascendants in the nearest degree. In case of
(4) Disagreements regarding one spouse’s ascendants, the paternal shall have a better right
profession, occupation, business, or activity (4) The brothers and sisters.
[Art. 73] (5) Municipal authorities – if there are no persons
(5) Disposition or encumbrance of common who are bound to support or if such persons are
property in ACP where one spouse is without means
incapacitated or unable to participate in the
NATURE OF FUNERAL: Every funeral shall be in keeping
administration; administration of absolute
community in a disagreement and the wife with the social position of the deceased. [Art. 306]
takes recourse within five years [Art. 96]
(6) Disposition or encumbrance of common The funeral shall be:
property in CPG where one spouse is (1) In accordance with the expressed wishes of the
incapacitated or unable to participate in the deceased.
administration; administration of absolute (2) In the absence of such expression, his religious
community in a disagreement and the wife beliefs or affiliation shall determine the funeral
takes recourse within five years, [Art. 124] rites.
(3) In case of doubt, the form of the funeral shall be
When wife and husband are de facto separated and decided upon by the person obliged to make
the CPG is insufficient, the spouse present shall, arrangements for the same, after consulting the
upon a petition, be given judicial authority to other members of the family [Art. 307]
administer or encumber any specific property of the
other spouse and use the fruits and proceeds thereof Note: No human remains shall be retained, interred,
to satisfy the latter’s share. [Art. 127] disposed of or exhumed without the consent of the
persons mentioned in articles 294 and 305.
Damages: Any person who shows disrespect to the

Retroactive Effect dead, or wrongfully interferes with a funeral shall be
liable to the family of the deceased for damages,
RETROACTIVE EFFECT material and moral [Art. 309]
PAGE 57
Funeral Expenses: The construction of a tombstone or (5) Illegitimate children referred to in Article 287 shall
mausoleum shall be deemed a part of the funeral bear the surname of the mother. [Art 368]
expenses, and shall be chargeable to the conjugal (6) Children conceived before the decree annulling a
partnership property, if the deceased is one of the voidable marriage shall principally use the
spouses [Art. 310]. surname of the father. [Art. 369]
GUIDELINES IN MAKING FUNERAL ARRANGEMENTS WIFE AFTER AND DURING MARRIAGE

(1) The persons who are preferred in the right to (1) A married woman may use [Art. 370]:
make funeral arrangements may waive the right (a) Her maiden first name and surname and add
expressly or impliedly in which case the right and her husband's surname, or
duty immediately descend to the person next in (b) Her maiden first name and her husband's
the order. surname or
(2) It must be in keeping with the social position of (c) Her husband's full name, but prefixing a word
the deceased. indicating that she is his wife, such as "Mrs."
(3) Law shall prevail over the will of the persons who
have the right to control the burial of deceased – [Tolentino:] The wife cannot claim an exclusive right
exhumation, evidential purpose, disposition of to use the husband’s surname. She can’t be
corpse by deceased, mutilation of corpses and prevented from using it; but neither can she restrain
autopsies. others from using it.
(4) Corpses which are to be buried at public
expenses may also be used for scientific purposes (2) In case of annulment of marriage, and the wife is
under certain conditions. the guilty party, she shall resume her maiden
(5) Expressed wishes of the deceased is given priority name and surname. If she is the innocent spouse,
provided that it is not contrary to law and must she may resume her maiden name and surname.
not violate the legal and reglementary provisions However, she may choose to continue employing
concerning funerals and disposition of the her former husband's surname, unless [Art. 371]:
remains (time, manner, place or ceremony) (a) The court decrees otherwise, or
(6) In the absence of expressed wishes, his religious (b) She or the former husband is married again to
beliefs or affiliation shall determine the funeral another person.
rights. (3) When legal separation has been granted, the wife
(7) In case of doubt, the persons in Art. 199 shall shall continue using her name and surname
decide. employed before the legal separation. [Art. 372]
(8) Any person who disrespects the dead or interferes (4) A widow may use the deceased husband's
with the funeral shall be liable for material and surname as though he were still living, in
moral damages. accordance with Article 370. [Art 373]
CONFUSION AND CHANGE OF NAMES

In case of identity of names and surnames, the
Use of Surnames, Arts. 364- younger person shall be obliged to use such
additional name or surname as will avoid confusion.
369, 369-380 [Art. 374]
In case of identity of names and surnames between

SURNAMES OF CHILDREN ascendants and descendants, the word "Junior" can
(1) Legitimate and legitimated children shall be used only by a son. Grandsons and other direct
principally use the surname of the father. [Art. male descendants shall either [Art. 375]:
364] (a) Add a middle name or the mother's surname, or
(2) An adopted child shall bear the surname of the (b) Add the Roman Numerals II, III, and so on.
adopter. [Art. 365]
(3) A natural child acknowledged by both parents No person can change his name or surname without
shall principally use the surname of the father. If judicial authority. [Art. 376]
recognized by only one of the parents, a natural
child shall employ the surname of the Usurpation of a name and surname may be the
recognizing parent. [Art 366] subject of an action for damages and other relief.
(4) Natural children by legal fiction shall principally [Art. 377]
employ the surname of the father [Art. 367]
PAGE 58
The unauthorized or unlawful use of another

person's surname gives a right of action to the latter Note: Applicable only to two or more persons who
[Art. 378] perish in the same calamity, and it is not shown who
died first, and there are no particular circumstances
The employment of pen names or stage names is from which it can be inferred.
permitted, provided it is done in good faith and there
is no injury to third persons. Pen names and stage Article 41. A marriage contracted by any person during
names cannot be usurped. [Art. 379] subsistence of a previous marriage shall be null and
void, unless before the celebration of the subsequent
Except as provided in the preceding article, no marriage, the prior spouse had been absent for four
person shall use different names and surnames. [Art consecutive years and the spouse present has a well-
380] founded belief that the absent spouse was already
dead. In case of disappearance where there is danger
of death under the circumstances set forth in the
provisions of Article 391 of the Civil Code, an absence
Absence – Art. 43, CC; Art. 41, of only two years shall be sufficient.
FC General rule: Marriage contracted by any person

during the subsistence of a previous marriage is void.
PROVISIONAL MEASURES IN CASE OF
ABSENCE, ARTS. 381-383 Exceptions: The following subsequent marriage of
the present spouse is valid:
(1) Subsequent marriage due to ordinary absence
Art. 43. If there is a doubt, as between two or more
where:
persons who are called to succeed each other, as to
(a) The prior spouse had been absent for 4
which of them died first, whoever alleges the death of
consecutive years;
one prior to the other, shall prove the same; in the
(b) The spouse present had a well-founded belief
absence of proof, it is presumed that they died at the
that absent spouse is dead; and
same time and there shall be no transmission of rights
(c) Judicial declaration of presumptive death was
from one to the other.
secured (no prejudice to the effect of the
reappearance of the absent spouse).
Note: Article 43 provides a statutory presumption (2) Subsequent marriage due to extraordinary
when there is doubt on the order of death between absence where:
persons who are called to succeed each other (only). (a) The prior spouse had been missing for 2
consecutive years;
Joaquin v. Navarro (1948): (b) There is danger of death attendant to the
The statutory presumption of Article 43 was not disappearance [Art. 391, Civil Code];
applied due to the presence of a credible eyewitness as (c) The spouse present had a well-founded belief
to who died first. that the missing person is dead; and
(d) Judicial declaration of presumptive death was
PRESUMPTION IN THE RULES OF COURT (Rule 131, sec. 3, secured (no prejudice to the effect of the
(jj.) (presumption of survivorship) reappearance of the absent spouse).
Age Presumed Survivor Notes:

(a) Institution of a summary proceeding is not
Both under 15 Older sufficient. There must also be a summary
Both above 60 Younger judgment. (Balane)
One under 15, the other One under 15 (b) Only the deserted spouse can file or institute an
above 60 action a summary proceeding for the declaration
Both over 15 and under Male of presumptive death of the absentee.
60; different sexes (Bienvenido case)
Both over 15 and under Older (c) There must have been diligent efforts on the part
60; same sex of the deserted spouse to locate the absent
One under 15 or over 60, One between 15 and 60 spouse. These diligent efforts correspond to the
the other between those requirement of the law for a well-founded belief.
ages
PAGE 59
Exception to the Exception: (4) Those who may have over the property of the
Art. 381. When a person disappears from his domicile, absentee some right subordinated to the condition of
his whereabouts being unknown, and without leaving his death.
an agent to administer his property, the judge, at the
instance of an interested party, a relative, or a friend, Article 386. The judicial declaration of absence shall
may appoint a person to represent him in all that may not take effect until six months after its publication in
be necessary. a newspaper of general circulation.
This same rule shall be observed when under similar WHEN MAY A DECLARATION OF ABSENCE BE DECLARED?
circumstances the power conferred by the absentee (a) Two years without any news about the absentee
has expired. (b) Five years if the absentee left a person in charge
of administration of his property
Art. 382. The appointment referred to in the preceding (c) Declaration takes effect only after six months after
article having been made, the judge shall take the publication in a newspaper of general circulation
necessary measures to safeguard the rights and
interests of the absentee and shall specify the powers,
obligations and remuneration of his representative, WHO MAY ASK FOR A DECLARATION OF ABSENCE?
regulating them, according to the circumstances, by (1) Spouse present
the rules concerning guardians. (2) Heirs instituted in a will, who may present an
authentic copy of the same;
Art. 383. In the appointment of a representative, the (3) Relatives who may succeed by the law of intestacy;
spouse present shall be preferred when there is no (4) Those who may have some right over the property of
legal separation. the absentee, subordinated to the condition of his
death.
If the absentee left no spouse, or if the spouse present
is a minor, any competent person may be appointed ADMINISTRATION OF THE PROPERTY OF THE
by the court. ABSENTEE, ARTS. 387-389
Art. 387. An administrator of the absentee's property
REQUISITES: The judge may appoint a person to shall be appointed in accordance with Article 383.
represent absentee when:
(1) Person disappears from his domicile Art. 388. The wife who is appointed as an
(2) His whereabouts are unknown administratrix of the husband's property cannot
(3) No agent to administer his property alienate or encumber the husband's property, or that
(4) An interested party, a relative, or a friend files the of the conjugal partnership, without judicial authority.
action
Art. 389. The administration shall cease in any of the
WHO MAY BE APPOINTED AS REPRESENTATIVE?
following cases:
(1) Spouse present shall be preferred when there is (1) When the absentee appears personally or by means
no legal separation of an agent;
(2) If no spouse or spouse is incapacitated, any (2) When the death of the absentee is proved and his
competent person testate or intestate heirs appear;
(3) When a third person appears, showing by a proper
DECLARATION OF ABSENCE, ARTS. 384-389 document that he has acquired the absentee's
Art. 384. Two years having elapsed without any news property by purchase or other title.
about the absentee or since the receipt of the last
news, and five years in case the absentee has left a In these cases the administrator shall cease in the
person in charge of the administration of his property, performance of his office, and the property shall be at
his absence may be declared. the disposal of those who may have a right thereto.
Art. 385. The following may ask for the declaration of WHO MAY ADMINISTER THE PROPERTY?
absence: (a) Spouse present shall be preferred when there is
(1) The spouse present; no legal separation
(2) The heirs instituted in a will, who may present an (b) If no spouse or spouse is incapacitated, any
authentic copy of the same; competent person
(3) The relatives who may succeed by the law of
intestacy;
PAGE 60
WHEN WILL THE ADMINISTRATION OF PROPERTY CEASE?

Administrator shall cease in performance of his Note:
office, and property shall be disposed in favor of (1) Although 7 years is required for the presumption
those who have a right thereto when of death of an absentee in the Civil Code, Art. 41
(1) Absentee appears personally or by means of an of the Family Code makes an exception for the
agent purpose of remarriage by limiting such
(2) Testate or intestate heirs appear, upon proof of requirement to 4 years.
death of absentee (2) Art. 41 also limits the required 4 years in Art. 391
(3) Third person appears, with a proper document for absence under exceptional circumstances to
showing he has acquired absentee’s property by only 2 years.
purchase or other title
Art. 392. If the absentee appears, or without appearing
PRESUMPTION OF DEATH, ARTS. 390-392 his existence is proved, he shall recover his property in
Art. 390. After an absence of 7 years, it being unknown the condition in which it may be found, and the price
whether or not the absentee still lives, he shall be of any property that may have been alienated or the
presumed dead for all purposes, except for those of property acquired therewith; but he cannot claim either
succession. fruits or rents.
The absentee shall not be presumed dead for the
purpose of opening his succession till after an absence Republic of the Philippines v. Granada (2012):
of 10 years. If he disappeared after the age of 75 years, The petition for declaration of presumptive death of an
an absence of 5 years shall be sufficient in order that absent spouse for the purpose of contracting a
his succession may be opened. subsequent marriage under Article 41 of the Family
Code is a summary proceeding “as provided for” under
Art. 391. The following shall be presumed dead for all the Family Code, and as such, the judgment of the
purposes, including the division of the estate among court therein shall be immediately final and executor,
the heirs: (SAAD) and not subject to ordinary appeal.
voyage, or an aeroplane which is missing, who has However, the losing party in a summary proceeding for
not been heard of for four years since the loss of the declaration of presumptive death for purposes of
the vessel or aeroplane; remarriage under Art. 41 of the FC may file a petition
(8) A person in the armed forces who has taken part for certiorari with the CA on the ground that, in
in war, and has been missing for four years; rendering judgment thereon, the trial court committed
(9) A person who has been in danger of death under grave abuse of discretion amounting to lack of
other circumstances and his existence has not jurisdiction. From the decision of the CA, the aggrieved
been known for four years. party may elevate the matter to the Supreme Court via
a petition for review on certiorari under Rule 45 of the
General rule: A person shall be presumed dead for all Rules of Court.
purposes after absence for a period of 7 years.
Exception: Succession
(a) In succession, 10 years is required for
presumption of death. Civil Registrar
(b) If absentee disappeared after age 75, 5 years
shall be sufficient. ARTS. 407-413
Art. 407. Acts, events and judicial decrees concerning
EXTRAORDINARY ABSENCE the civil status of persons shall be recorded in the civil
Only 4 years is required for presumption to arise if: register.
voyage, or an aeroplane which is missing, who has Art. 408. The following shall be entered in the civil
not been heard of for four years since the loss of register:
the vessel or aeroplane; (1) Births;
(2) A person in the armed forces who has taken part (2) marriages;
in war, and has been missing for four years; (3) deaths;
(3) A person who has been in danger of death under (4) legal separations;
other circumstances and his existence has not (5) annulments of marriage;
been known for four years.
PAGE 61
(6) judgments declaring marriages void from the

beginning; Exception:
(7) legitimations; (a) Clerical or typographical errors;
(8) adoptions; (b) Change of: first name or nickname, day and
(9) acknowledgments of natural children; month in the date of birth, or sex of a person
(10) naturalization;
(11) loss, or This exception applies where it is patently clear that
(12) recovery of citizenship; there was a clerical or typographical error or mistake
(13) civil interdiction; in the entry, which can be corrected or changed by
(14) judicial determination of filiation; the concerned city or municipal civil registrar or
(15) voluntary emancipation of a minor; and consul general in accordance with the provisions of
(16) changes of name. this Act and its implementing rules and regulations
Art. 409. In cases of legal separation, adoption, Notes:

naturalization and other judicial orders mentioned in (a) Clerical or typographical error refers to a mistake
the preceding article, it shall be the duty of the clerk of committed in the performance of clerical work in
the court which issued the decree to ascertain whether writing, copying, transcribing or typing an entry in
the same has been registered, and if this has not been the civil register that is harmless and innocuous
done, to send a copy of said decree to the civil registry (i.e. misspelled name, misspelled place of birth,
of the city or municipality where the court is mistake in the entry of day and month in the date
functioning. of birth or the sex of the person or the like, which
is visible to the eyes or obvious to the
understanding, and can be corrected or changed
only by reference to other existing record or
records)
(b) Before the amendment by RA 10172, no correction
Art. 410. The books making up the civil register and all
must involve the change of sex, nationality, age or
documents relating thereto shall be considered public
status of the petitioner. After the amendment,
documents and shall be prima facie evidence of the
change of sex can now be subjected to correction
facts therein contained.
without judicial order under the rules of this Act.
(c) Civil Register refers to the various registry books
Art. 411. Every civil registrar shall be civilly responsible
and related certificates and documents kept in
for any unauthorized alteration made in any civil
the archives of the local civil registry offices,
register, to any person suffering damage thereby.
Philippine Consulates and of the Office of the
However, the civil registrar may exempt himself from
Civil Registrar General.
such liability if he proves that he has taken every
reasonable precaution to prevent the unlawful
alteration. Sec. 3. Who May File the Petition and Where. – Any
person having direct and personal interest in the
Art. 412. No entry in a civil register shall be changed or correction of a clerical or typographical error in an
corrected, without a judicial order. entry and/or change of first name or nickname in the
civil register may file, in person, a verified petition with
Art. 413. All other matters pertaining to the registration the local civil registry office of the city or municipality
of civil status shall be governed by special laws. where the record being sought to be corrected or
changed is kept.
RA 9048 AS AMENDED BY RA 10172
AN ACT AUTHORIZING THE CITY OR MUNICIPAL In case the petitioner has already migrated to another
CIVIL REGISTRAR OR THE CONSUL GENERAL TO place in the country and it would not be practical for
CORRECT A CLERICAL OR TYPOGRAPHICAL such party, in terms of transportation expenses, time
ERROR IN AN ENTRY AND/OR CHANGE OF FIRST and effort to appear in person before the local civil
NAME OR NICKNAME IN THE CIVIL REGISTER registrar keeping the documents to be corrected or
WITHOUT NEED OF A JUDICIAL ORDER, changed, the petition may be filed, in person, with the
AMENDING FOR THIS PURPOSE ARTICLES 376 local civil registrar of the place where the interested
AND 412 OF THE CIVIL CODE OF THE PHILIPPINES party is presently residing or domiciled. The two (2)
local civil registrars concerned will then communicate
General rule: No entry in a civil register shall be to facilitate the processing of the petition.
changed or corrected without a judicial order
PAGE 62
Citizens of the Philippines who are presently residing or petition and shall show affirmatively that the petitioner
domiciled in foreign countries may file their petition, in is competent to testify to the matters stated. The
person, with the nearest Philippine Consulates. petitioner shall state the particular erroneous entry or
entries, which are sought to be corrected and/or the
The petitions filed with the city or municipal civil change sought to be made.
registrar or the consul general shall be processed in
accordance with this Act and its implementing rules The petition shall be supported with the following
and regulations. documents:
All petitions for the clerical or typographical errors (1) A certified true machine copy of the certificate or of
and/or change of first names or nicknames may be the page of the registry book containing the entry or
availed of only once. entries sought to be corrected or changed.
(2) At least two (2) public or private documents
GROUNDS showing the correct entry or entries upon which the
Who may file the petition and where? correction or change shall be based; and
(1) Any person having direct personal interest in the (3) Other documents which the petitioner or the city or
correction of a clerical or typographical error in an municipal civil registrar or the consul general may
entry and/or change of first name or nickname in consider relevant and necessary for the approval of the
the civil register petition.
(2) Verified petition with the local civil registry office
of the city or municipality No petition for correction of erroneous entry
(a) where the record being sought to be corrected concerning the date of birth or the sex of a person shall
or changed is kept be entertained except if the petition is accompanied by
(b) where the interested party is presently earliest school record or earliest school documents
residing or domiciled, if it will be impractical such as, but not limited to, medical records, baptismal
to submit in the place where record is kept (i.e. certificate and other documents issued by religious
when party has migrated to another place in authorities; nor shall any entry involving change of
the country gender corrected except if the petition is accompanied
(c) nearest Philippine Consulates, if the petitioner by a certification issued by an accredited government
is presently residing or domiciled in foreign physician attesting to the fact that the petitioner has
countries not undergone sex change or sex transplant. The
petition for change of first name or nickname, or for
Note: correction of erroneous entry concerning the day and
All petitions for the clerical or typographical errors month in the date of birth or the sex of a person, as the
and/or change of first names or nicknames may be case may be, shall be published at least once a week
availed of only once. for two (2) consecutive weeks in a newspaper of
general circulation.
Sec. 4. Grounds for Change of First Name or
Furthermore, the petitioner shall submit a certification
Nickname. – The petition for change of first name or
from the appropriate law enforcements, agencies that
nickname may be allowed in any of the following
he has no pending case or no criminal record.
cases:
(1) The petitioner finds the first name or nickname to
The petition and its supporting papers shall be filed in
be ridiculous, tainted with dishonor or extremely
three (3) copies to be distributed as follows: first copy
difficult to write or pronounce.
to the concerned city or municipal civil registrar, or the
(2) The new first name or nickname has been
consul general; second copy to the Office of the Civil
habitually and continuously used by the petitioner and
Registrar General; and third copy to the petitioner.
he has been publicly known by that by that first name
or nickname in the community: or
(3) The change will avoid confusion.
RULE 108, RULES OF COURT
Sec. 5. Form and Contents of the Petition. – The CANCELLATION OR CORRECTION OF ENTRIES IN
petition for correction of a clerical or typographical THE CIVIL REGISTRY
error, or for change of first name or nickname, as the
case may be, shall be in the form of an affidavit, Sec. 1. Who may file petition. - Any person interested in
subscribed and sworn to before any person authorized any act, event, order or decree concerning the civil
by the law to administer oaths. The affidavit shall set status of persons which has been recorded in the civil
forth facts necessary to establish the merits of the register, may file a verified petition for the cancellation
PAGE 63
or correction of any entry relating thereto, with the (2) Any act, event, order or decree concerning the
Court of First Instance of the province where the civil status of persons which has been recorded in
corresponding civil registry is located. the civil register
(3) Verified petition for the cancellation or correction
Sec. 2. Entries subject to cancellation or correction. - of any entry relating thereto with the Court of
Upon good and valid grounds, the following entries in First Instance of the province where the
the civil register may be cancelled or corrected: (a) corresponding civil registry is located
births; (b) marriages; (c) deaths; (d) legal separations;
ENTRIES SUBJECT TO CANCELLATION
(e) judgments of annulments of marriage; (f)
judgments declaring marriages void from the (a) Births
beginning; (g) legitimations; (h) adoptions; (i) (b) Marriages
acknowledgments of natural children; (j) (c) Deaths
naturalization (k) election, loss or recovery of (d) Legal separations
citizenship (l) civil interdiction; (m) judicial (e) Judgments of annulments of marriage
determination of filiation; (n) voluntary emancipation (f) Judgments declaring marriages void from the
of a minor; and (o) changes of name. beginning
(g) Legitimations
Sec. 3. Parties. - When cancellation or correction of an (h) Adoptions
entry in the civil register is sought, the civil registrar (i) Acknowledgments of natural children
and all persons who have or claim any interest which (j) Naturalization
would be affected thereby shall be made parties to the (k) Election, loss or recovery of citizenship
proceeding. (l) Civil interdiction
(m) Judicial determination of filiation
Sec. 4. Notice and publication. - Upon the filing of the (n) Voluntary emancipation of a minor
petition, the court shall, by an order, fix the time and (o) Changes of name
place for the hearing of the same, and cause
reasonable notice thereof to be given to the persons
named in the petition. The court shall also cause the
order to be published once a week for three (3)
consecutive weeks in a newspaper of general
circulation in the province.
Sec. 5. Opposition. - The civil registrar and any person

having or claiming any interest under the entry whose
cancellation or correction is sought may, within fifteen
(15) days from notice of the petition, or from the last
date of publication of such notice, file his opposition
thereto.
Sec. 6. Expediting proceedings. - The court in which

the proceeding is brought may make orders expediting
the proceedings, and may also grant preliminary
injunction for the preservation of the rights of the
parties pending such proceedings.
Sec. 7. Order. - After hearing, the court may either

dismiss the petition or issue an order granting the
cancellation or correction prayed for. In either case, a
certified copy of the judgment shall be served upon the
civil registrar concerned who shall annotate the same
in his record.
WHO MAY FILE PETITION?

(1) Any person interested
PAGE 64
UP COLLEGE OF LAW PROPERTY BAR OPERATIONS COMMISSION
PAGE 65
Property – All things which are, or may be, the object them with the intention to have them
of appropriation. [NCC 414] permanently attached to the land, and forming a
permanent part of it; the animals in these places
Characteristics (USA) are included;
(7) Fertilizer actually used on a piece of land;
(8) Mines, quarries, and slag dumps, while the
(1) Utility – capacity to satisfy human wants matter thereof forms part of the bed, and waters
(2) Substantivity and Individuality – separate and either running or stagnant;
autonomous existence (9) Docks and structures which, though floating, are
(3) Susceptibility of being appropriated – what cannot intended by their nature and object to remain at
be appropriated because of their distance, depth, a fixed place on a river, lake, or coast;
or immensity cannot be considered ‘things’ (i.e. (10) Contracts for public works, and servitudes and
stars, ocean) other real rights over immovable property.
Classification Categories of Immovables (NIDA)

(1) By nature
(2) By incorporation
HIDDEN TREASURE (3) By destination
Hidden treasure –any hidden and unknown deposit of (4) By analogy
money jewels or other precious objects, the lawful
ownership of which does not appear. [NCC 439] Immovables by Nature: cannot be moved from place
to place; their intrinsic qualities have no utility except
Owner of the land, building or other property on in a fixed place (Par. 1 & 8)
which the hidden treasure was found, also owns it, (1) Par. 1
subject to: (a) “Building” - their adherence to the land must
(1) Right of a finder by chance who is not a be permanent and substantial.
trespasser/intruder: ½ of treasure (b) Buildings have been considered as
(2) Right of a usufructuary who finds treasure: ½ of immovables, despite:
treasure (i) Treatment by the parties e.g. they
(3) Right of State to acquire things of interest to constitute a separate mortgage on the
science or the arts [NCC 438] building and the land [Punzalan v.
Lacsamana]
BASED ON MOBILITY – IMMOVABLE OR (ii) Separate Ownership i.e. a building on
MOVABLE rented land is still considered an
REAL OR IMMOVABLE PROPERTY [NCC 415]
immovable. [Tolentino]
(1) Land, buildings, roads and constructions of all (2) Par. 8
kinds adhered to the soil; (a) Mineral Deposits
(2) Trees, plants, and growing fruits, while they are (i) Minerals still deposited in the soil
attached to the land or form an integral part of (ii) When minerals have been extracted,
an immovable; they become chattel.
(3) Everything attached to an immovable in a fixed (b) Slag Dump: dirt and soil taken from a mine
manner, in such a way that it cannot be and piled upon the surface of the ground.
separated therefrom without breaking the Inside the dump can be found the minerals.
material or deterioration of the object; (c) Waters: those still attached to or running thru
(4) Statues, reliefs, paintings or other objects for use the soil or the ground.
or ornamentation, placed in buildings or on lands
by the owner of the immovable in such a manner Immovables by Incorporation: are essentially movables
that it reveals the intention to attach them but are attached to an immovable in such a way as
permanently to the tenements; to be an integral part [Par. 2, 3, 4, 6 & 7]
(5) Machinery, receptacles, instruments or (1) Par. 2
implements intended by the owner of the (a) Trees and plants: only immovables when they
tenement for an industry or works which may be are attached to the land or form an integral
carried on in a building or on a piece of land, and part of an immovable
which tend directly to meet the needs of the said (i) When they have been cut or uprooted,
industry or works; they become movables.
(6) Animal houses, pigeon-houses, beehives, fish
ponds or breeding places of similar nature, in
case their owner has placed them or preserves
PAGE 66
(b) By special treatment of Act 1508 (Chattel work in which they are utilized) they
Mortgage Law), growing crops may be subject recover their condition as movables.
of a Chattel Mortgage. (ii) If it is still needed for the industry but
(c) For the purpose of attachment: growing crops separated from the tenement
are to be attached in the same manner as temporarily, the property continues to be
realty. (Rule 59, Sec. 7) immovable.
(b) Requisites for Immovability in Par. 5:
(2) Par. 3 (i) Placed by the owner or the tenant (as
(a) Res vinta in Roman Law agent);
(b) “Attachment in a fixed manner”: breakage or (ii) Adapted to the needs of the industry or
injury in case of separation will be substantial work
e.g. wells, sewers, aqueducts and railways (c) Except: Estoppel
(i) Whether attached by the owner himself (d) Parties may, by agreement, treat as personal
or some other person property that which by nature would be real,
as long as no third parties would be
(3) Par. 7 prejudiced. That characterization is effective
Actually used (it has been spread over the land) between the parties. [Makati Leasing v.
Wearever(1983)]
Immovables by Destination: are essentially movables (e) Effect of Attachment
but by the purpose for which they have been placed (i) Machinery becomes part of the
in an immovable, partake of the nature of an immovable.
immovable [Par. 4, 5, 6 & 9] (ii) The installation of machinery and
(1) Par. 4 equipment in a mortgaged sugar central
(a) Requisites: for the purpose of carrying out the
(i) Placed by the owner or by the tenant (as industrial functions and increasing
agent); production, constitutes a permanent
(ii) With intention of attaching them improvement on said sugar central and
permanently even if adherence will not subjects said machinery and equipment
involve breakage or injury. to the mortgage constituted thereon.
(b) Where the improvement or ornaments placed [Berkenkotter v. Cu Unjieng(1935)]
by the lessee are not to pass to the owner at
the expiration of the lease, they remain (4) Par. 6
movables for chattel mortgage purposes. Requisites:
[Davao Sawmill v. Castillo(1935)] (a) Placed by the owner or the tenant (as agent);
(b) With the intention of permanent attachment;
(2) Par. 3 v. Par. 4 (c) Forming a permanent part of the immovable.
Par. 3 Par. 4
(5) Par. 9:
Cannot be separated Can be separated (a) A floating house tied to a shore and used as a
from immovable from immovable residence is considered real property,
without breaking or without breaking or considering that the waters on which it floats
deterioration deterioration are considered immovables.
Must be placed by (b) But if the floating house makes it a point to
Need not be placed by the owner, or by his journey from place to place, it assumes the
the owner agent, expressed or category of a vessel, and is considered
implied immovable
Real property by
Real property by Immovables by Analogy: Contracts for public works,
incorporation and
incorporation servitudes, other real rights over immovable property
destination
e.g. usufruct and lease of real property for a period of
(3) Par. 5 1 year and registered [Par. 10]
(a) Immovability depends upon their being
destined for use in the industry or work in the Note: Enumeration in Art. 415 not absolute
tenement; (1) Parties may by agreement treat as, but effective
(i) The moment they are separated, (from only as to them.
the immovable or from the industry or
PAGE 67
It is based, partly, upon the principle of estoppel. (c) Intellectual property – considered personal
[Evangelista vs. Alto Surety(1958)] property; it consists in the pecuniary benefit
which the owner can get by the reproduction
(2) For purposes of taxation, improvements on land or manufacture of his work.
are commonly taxed as realty, even though for
some purposes, they might be considered as (4) By forces of nature – e.g. electricity, gas, heat,
personalty. oxygen
It is a familiar phenomenon to see things IMPORTANCE AND SIGNIFICANCE OF CLASSIFICATION

classified as real property for purposes of UNDER THE CIVIL CODE
taxation, which on general principle, might be (1) In Criminal Law
considered personal property. [Manila Electric v. (a) Usurpation of property can take place only
Central Bank(1962)] with respect to real property. [RPC 312]
(b) Robbery and theft can be committed only
PERSONAL OR MOVABLE [416 & 417, CC] against personal property. [RPC 293, 308]
(1) Those movables susceptible of appropriation
which are not included in the preceding article; (2) In the Form of Contracts Involving Movables and
(2) Real property which by any special provision of Immovables
law is considered as personalty; (a) Subject matter of specific contracts:
(3) Forces of nature which are brought under control (i) Only real property can be the subject of
by science; and real mortgage [NCC 2124] and
(4) In general, all things which can be transported antichresis [NCC 2132]
from place to place without impairment of the (ii) Only personal property can be the
real property to which they are fixed. subject of voluntary deposit [NCC 1966],
(5) Obligations and actions which have for their pledge [NCC 2094] and chattel
object movables or demandable sums; and mortgage [Act 1508[
(6) Shares of stock of agricultural, commercial and (b) Donations of real property are required to be
industrial entities, although they may have real in a public instrument [NCC 749] but a
estate. donation of a movable may be made orally or
in writing [NCC 748]
Tests to Determine Movable Character
(1) By exclusion (3) For Acquisitive Prescription
(a) Everything NOT included in Article 415 (a) Real property can be acquired by prescription
(b) Parties cannot by agreement treat as in 30 years (bad faith) and 10 years (good
immovable that which is legally movable. faith). (NCC 1137, 1134)
(b) Movables can be acquired by prescription in 8
(2) By description years (bad faith) and 4 years (good faith).
(a) Ability to change location – whether it can be (NCC 1132)
carried from place to place;
(b) Without substantial injury to the immovable to (4) Actions for Recovery of Possession
which it is attached. (a) Possession of real property - recovered
through accion reivindicatoria, accion
The steel towers built by MERALCO are not buildings publiciana, forcible entry and unlawful detainer.
or constructions since they are removable and (b) Possession of movable property - recovered
merely attached to a square metal frame by means through replevin.
of bolts, which when unscrewed could easily be
dismantled and moved from place to place, without (5) Venue of actions
breaking the material or causing deterioration to the (a) Real actions - Actions concerning real property
object they are attached. [Board of Assessment are commenced in the court which has
Appeals v. Meralco] jurisdiction over the area where the real
property is situated. [Rules of Court Rule 4 Sec.
(3) By special provision of law 1]
(a) Growing crops under the Chattel Mortgage (b) Personal actions - Commenced where the
Law plaintiff or any of the principal plaintiffs, or
(b) Machinery installed by a lessee not acting as where the defendant or any of the principal
agent of the owner [Davao Sawmill v. Castillo] defendants resides, or if a non-resident
PAGE 68
defendant, where he may be found, at the

election of the plaintiff. [Rule 4 Sec. 2] May be used by everybody, even by strangers or
aliens but nobody can exercise over it the rights of
(6) The Governing Law (Private International Law) a private owner
(a) Immovables - governed by the law of the
country where they are located (2) Those intended for some public service
(b) Movables - governed by the personal laws of (a) may be used only by authorized persons but
the owner (which in some cases is the law of exists for the benefit of all
his nationality and in other cases, the law of (b) e.g. fortresses, unleased mines and civil
his domicile) buildings
(7) In affecting third persons (3) Those for the development of the national wealth
(a) In transactions involving real property – must
be recorded in the Registry of Property to Includes natural resources such as minerals, coal,
affect third persons oil and forest
(b) In transactions involving personal property –
registration is not required, except for chattel (4) Patrimonial property
mortgages [Chattel Mortgage Register, NCC (a) Owned by the State over which it has the
2140] same rights as private individuals in relation
to their own property
BASED ON OWNERSHIP (b) Subject to the administrative laws and
Either of public dominion or private ownership [NCC regulations on the procedure of exercising
419] such rights.
(c) E.g. friar lands, escheated properties and
Churches and other consecrated objects are commercial buildings
considered outside the commerce of man; they are (d) Purpose:
considered neither public nor private property (i) Enables the State to attain its economic
ends
PUBLIC DOMINION (ii) Serves as a means for the State’s
Property of public dominion is outside the commerce subsistence and preservation
of man. They cannot be the subject matter of private (iii) Enables the State to fulfill its primary
contracts, cannot be acquired by prescription and mission
they are not subject to attachment and execution nor (e) Conversion of Property of Public Dominion for
burdened with a voluntary easement. Public Use to Patrimonial Property:
(i) Property of public dominion, when no
Public As defined by NCC 420 longer intended for public use or for
Dominion public service, shall form part of the
Public Used in Art XII, Section 2, 1987 patrimonial property of the State [NCC
Domain Constitution 422, Civil Code]
(ii) Requires a Declaration by the
Public Lands Public Land Act Government (executive or legislative
departments) that it is no longer needed
Characteristics: for public use or service.
(1) Not owned by the State but pertains to it as
territorial sovereign; to hold in trust for the Administered by Municipal Corporations: [NCC 424]
interest of the community. (1) Property for public use, in the provinces, cities,
(2) Purpose: For public use, and not for use by the and municipalities, consist of the provincial
State as a juridical person roads, city streets, municipal streets, the squares,
(3) Cannot be the subject of appropriation either by fountains, public waters, promenades, and public
the State or by private persons works for public service paid for by said provinces,
cities, or municipalities.
Classifications: (2) Patrimonial property of Municipal Corporations:
Administered by the State: [NCC 420] (a) The province or municipality, as a juridical
(1) Those intended for public use (roads, canals, entity, also possesses private property to
rivers, torrents, ports and bridges constructed by answer for its economic necessities.
the State, banks, shores, roadsteads, and others
of similar character)
PAGE 69
(b) Classification of Properties of provinces, cities, acquired with its private or corporate funds, the
and municipalities [Salas v. Jarencio, (1972)] presumption is that such land came from the
(i) Properties acquired with their own funds State upon the creation of the municipality.
in their private or corporate capacity over
which the political subdivision has Conversion
ownership and control Alienable Public Land converted to Private Property
(ii) Properties of public dominion held in trust through Prescription – Alienable public land held by a
for the State’s inhabitants are subject to possessor – personally/through predecessors-in-
the control and supervision of the State interest, openly, continuously and exclusively – for
30 years is CONVERTED to private property by the
(c) A municipal corporation must prove that they mere lapse or completion of the period. The
acquired the land with their own corporate application for confirmation is mere formality,
funds because land had already been converted, giving rise
to a registrable title. [Director of Lands v. IAC]
(d) Presumption: that land comes from the State
upon the creation of the municipality. All Private Land converted to Property of Public Dominion
lands in the possession of the municipality through abandonment and reclamation – Through the
gradual encroachment or erosion by the ebb and
Except for those acquired with its private funds, flow of the tide, private property may become public
are deemed to be property of public dominion, IF the owner appears to have ABANDONED the land,
held in trust for the State for the benefit of its and permitted it to be totally destroyed so as to
inhabitants. become part of the shore. The land having
disappeared on account of the gradual erosion, and
(e) Congress has paramount power to dispose of having remained submerged until they were
lands of public dominion in a municipality, the reclaimed by the government, they are public land.
latter being a subdivision only for purposes of [Government v. Cabangis]
local administration. [Salas v. Jarencio, (1972)]
BASED ON CONSUMABILITY [NCC 418]
PRIVATE OWNERSHIP Only applies to movables, determined by nature
Can be exercised by the State in its private capacity
or by private persons CONSUMABLE
(1) Movables which cannot be used in a manner
Kinds: appropriate to their nature without their being
(1) Patrimonial property - Property owned by the consumed (e.g. food)
State and its political subdivisions in their private (2) Consumable goods cannot be the subject matter
capacity; all property of the State not included in of a commodatum unless the purpose of the
NCC 420 (on public dominion) [NCC 421-424] contract is not the consumption of the object, as
(2) Property belonging to private persons, either when it is merely for exhibition.
individually or collectively [NCC 425]
(1) Property of private ownership, besides the NON-CONSUMABLE
patrimonial property of the State, provinces, All others not falling under ‘consumable’ e.g. money
cities, and municipalities, consists of all in coin
property belonging to private persons, either
individually or collectively. SUSCEPTIBILITY TO SUBSTITUTION
(2) Refers to all property belonging to private Only applies to movables, determined by the
persons, natural or juridical, either individually intention of the parties.
or collectively (co-owned property) FUNGIBLES
Things which, because of their nature or the will of
Determination (two different views): the parties, are capable of being substituted by
(1) Determined by how the property was used: others of the same kind, not having a distinct
In Province of Zamboanga v. City of Zamboanga individuality
(1968), property was considered patrimonial for
they were not for public use. NON-FUNGIBLES
(1) Things which cannot be substituted for another
(2) Determined by how the property was acquired: (2) If the parties agreed that the same thing be
According to Salas v. Jarencio (1972), the absence returned, it is not fungible
of a title deed to any land, showing that it was
PAGE 70
BASED ON THE CONSTITUTION [ARTICLE XII,

SEC 3] Ownership
(1) Public Agricultural Land
(2) Mineral Land DEFINITION
(3) Timber Land (a) Independent right of exclusive enjoyment and
(4) National Parks control of a thing
(b) For the purpose of deriving all advantages
OTHER CLASSIFICATIONS required by the reasonable needs of the
BY THEIR PHYSICAL EXISTENCE owner/holder of right and promotion of general
(1) Corporeal - All property the existence of which welfare
can be determined by the senses (res qui tangi (c) Completely subjected to his will
possunt) (d) In everything not prohibited by public law or the
(2) Incorporeal rights of another
(a) Things having abstract existence, created by
man and representing value. RIGHT IN GENERAL
(b) Includes rights over incorporeal things, RIGHTS INCLUDED IN OWNERSHIP [NCC 428]
credits, and real rights other than ownership (1) Right to enjoy and dispose of a thing, without
over corporeal things. other limitations than those established by law
(2) Right of action against the holder and possessor
BY THEIR AUTONOMY OR DEPENDENCE of the thing in order to recover it.
(1) Principal - Those to which other things are
considered dependent or subordinated, such as BUNDLE OF RIGHTS
the land on which a house is built. (1) Jus Utendi: Right to enjoy and receive what the
(2) Accessory - Those which are dependent upon or property produces
subordinated to the principal. They are destined (2) Jus Fruendi: Right to receive fruits
to complete, enhance or ornament another (3) Jus Accessiones: Right to the accessories
property. (4) Jus Abutendi: Right to consume a thing by use
(5) Jus Disponendi: Right to alienate, encumber,
BY SUSCEPTIBILITY TO DETERIORATION transform or even destroy the thing owned
(1) Deteriorable that deteriorate through use or by (6) Jus Vindicandi: Right to recover possession of
time property based on a claim of ownership
(2) Non-deteriorable (7) Jus Possidendi: Right to possess the property
(Implied from all the other rights)
BY REASON OF THEIR SUSCEPTIBILITY TO DIVISION
(1) Divisible - Those which can be divided physically PROTECTING PROPERTY
or juridically without injury to their nature. E.g.: BASIC DISTINCTIONS
piece of land or an inheritance. (1) Real right v. Personal right
(2) Indivisible - Those which cannot be divided Real Rights - Rights that confer upon its holder an
without destroying their nature or rendering autonomous power to derive directly from a thing
impossible the fulfillment of the juridical relation certain economic advantages independently of
of which they are object. whoever the possessor of the thing
BY REASON OF DESIGNATION Personal Rights - Rights of a person to demand

(1) Generic - That which indicates its homogenous from another as a definite passive subject, the
nature, but not the individual such as a horse, fulfillment of a prestation to give, to do or not to
house, dress, without indicating it do
(2) Specific - That which indicates the specie or its
nature and the individual, such as “the white Real Rights Personal Rights
horse of X” Definite active subject Definite active subject
who has a right against (creditor) and a definite
EXISTENCE IN POINT OF TIME ALL persons generally as passive subject (debtor)
(1) Present - Those which exist in actuality, either an indefinite passive
physical or legal, such as, the erected building subject
(2) Future - Those which do not exist in actuality, but Object is generally a Subject matter is
whose existence can reasonably be expected with corporeal thing always an incorporeal
more or less probability, such as ungathered thing
fruits.
PAGE 71
Real Rights Personal Rights Distinction between forcible entry and unlawful
Generally extinguished by Personal right survives detainer
the loss or destruction of the subject matter (1) Forcible Entry: Lawful possessor deprived through
the thing over which it is FISTS:
exercised (a) FISTS (Force, Intimidation, Strategy, Threats,
Stealth)
It is directed against the It is binding or (b) Prescription: 1 year from dispossession (force,
whole world, giving rise to enforceable only intimidation, threats) or from knowledge of
rd
real actions against 3 against a particular dispossession (strategy, stealth)
persons person giving rise to
personal actions (2) Unlawful Detainer: Possessor refused to vacate
against such debtor upon demand by owner
(a) Legal possession (by permission/ tolerance)
(2) Real action v. Personal action (Rule 4 Sec 1-2) becomes unlawful upon failure to vacate
Real action – actions affecting title to or (b) Prescription of action: 1 year from last notice
possession of real property or any interest therein to vacate
Personal action – all other actions Actions for recovery of possession of movable
property
(3) Action in rem v. Action in personam v. Action Replevin
quasi in rem (1) for manual delivery of property
Action in rem – action against a property, (2) Prescription of Right: 4 years (GF) or 8 years (BF)
judgment binding against the whole world
Requisites for recovery of property [NCC 434]
Action in personam – action against a specific (1) Property must be identified
person, judgment binding against that particular Through a relocation survey and a title properly
person identifying boundaries and location
Action quasi in rem – action against a specific (2) Plaintiff must rely on the strength of his title and
property with respect to a person not on weakness of defendant’s title
(a) Right must be founded on positive title and
REMEDIES
not on lack or insufficiency of defendant’s
(1) Self-help [NCC 429-430] (b) Ei incumbit probatio qui dicit, non qui negat:
(a) The owner may use such force as may be He who asserts, not he who denied must
reasonably necessary to repel or prevent an prove
actual or threatened unlawful physical
invasion or usurpation of his property. LIMITATIONS ON OWNERSHIP
LIMITATIONS ON THE RIGHTS OF OWNERSHIP PROVIDED
(b) Every owner may enclose or fence his land or
BY LAW
tenements by any other means without
detriment to servitudes constituted thereon. General limitations – taxation, eminent domain,
(2) Actions to recover ownership and possession of police power
real property (1) Police Power: Property taken with no
compensation for general welfare
RIGHT TO RECOVER POSSESSION
(a) When any property is condemned or seized by
Immovable Property competent authority in the interest of health,
(1) Accion Reivindicatoria: Recovery of ownership of safety or security, the owner thereof shall not
real property be entitled to compensation, unless he can
(a) Including but not limited to possession show that such condemnation or seizure is
(b) Prescription of Action: 30 years unjustified. [Art. 436, Civil Code]
(2) Accion Publiciana: Recovery of a better right to (b) Requisites: To justify the exercise of police
possess (de jure) power, the following must appear:
(a) Judgment as to who has the better right of (i) The interests of the public generally,
possession require such interference (as distinguished
(b) Also, actions for ejectment not filed within 1 from those of a particular class)
year must be filed as accion publiciana (ii) The means are reasonably necessary for
(c) Prescription: 10 years the accomplishment of a purpose, and not
unduly oppressive
PAGE 72
(2) Taxation: Forced contribution to the operation of

government (3) Act in State of Necessity
(3) Eminent Domain: Property taken for public The owner of a thing has no right to prohibit the
use/purpose, but subject to due process and interference of another with the same, if the
payment of just compensation interference is necessary to avert an imminent
Requisites – To justify the exercise of the right of danger and the threatened damage, compared to
eminent domain, the following requisites must all the damage arising to the owner from the
be present: interference, is much greater. The owner may
(a) Private property as the object of the demand from the person benefited, indemnity for
expropriation; the damage to him. (NCC 432)
(b) The property is taken by the State or by
competent authority; (4) Nuisance - A nuisance is any act, omission,
(c) The purpose of the taking is for public use; establishment, business, condition of property, or
(d) The taking must be attended with due anything else which:
process of law; (a) Injures or endangers the health or safety of
(e) There is payment of just compensation others; or
(b) Annoys or offends the senses; or
Specific Limitations – imposed by law, sic utere tuo, (c) Shocks, defies or disregards decency or
nuisance, stat of necessity, easements voluntarily morality; or
imposed by owner: servitudes, mortgages imposed (d) Obstructs or interferes with the free passage
by contract of any public highway or street, or any body of
(1) Legal Servitudes: once requisites are satisfied, the water; or
servient owner may ask the Court to declare the (e) Hinders or impairs the use of property. (NCC
existence of an easement 694)
(a) Art. 644 & 678: Aqueduct
(b) Art. 679: Planting of trees
(c) Art. 670: Light and View
(d) Art. 649 & 652: Right of Way
(e) Art. 637: Passage of water from upper to
lower tenements
(f) Art. 676: Drainage of buildings
(g) Art. 684-687: Lateral and subjacent support
(2) Must not injure the rights of a third person

(a) Sic Utere Tuo Ut Alienum Non Laedas
(b) The owner of a thing cannot make use thereof
in such manner as to injure the rights of a
third person. [NCC 431]
Summary of Actions:
Action Venue Summon Prayer Basis Prescription

Forcible Entry/Unlawful Real Action In personam Possession Prior physical 1 year
Detainer possession
Real Action In personam Possession Real right of 10 years
Accion Publiciana
Possession [NCC 555(4)]
Real Action In personam Possession Ownership GF: 10 years
BF: 30 years
[NCC 1137]
Accion Reividicatoria Unless---

Torrens Title --
- Unless
laches
Reconveyance Real Action In personam Title Ownership 10 years
PAGE 73
Action Venue Summon Prayer Basis Prescription

(NCC 1456)
Real Action Quasi-in rem Quieting of Ownership Imprescriptible
Quieting of Title
Title
Personal In personam Possession Ownership GF: 4 years
Replevin
Action BF: 8 years
Accession (3) Lease

(4) Antichresis
Accession – the right by virtue of which the owner of (a) He who receives the fruits has the obligation
a thing becomes the owner of everything which is to pay the expenses made by a third person in
produced thereby, or which is incorporated or their production, gathering, and preservation.
attached thereto, either naturally or artificially. [NCC [NCC 443]
440] (b) Necessary expenses of production, gathering
and preservation must be borne by the
Accessories – things joined to or included with the receiver of the fruits
principal thing for the latter’s embellishment, better
use, or completion. Fruits – all periodical additions to a principal thing
produced by forces inherent to the thing itself
CLASSIFICATION OF ACCESSION
(1) Accession Discreta (fruits) – the right pertaining Kinds of Fruits
to the owner of a thing over everything produced (1) Natural – spontaneous products of soil and the
thereby (by internal forces) young and other products of animals [NCC 442
(1)]
(2) Accession Continua – the right pertaining to the
owner of a thing over everything that is Under the rule partus sequitur ventrem, to the
incorporated or attached thereto either naturally owner of female animals would also belong the
or artificially; by external forces (by external young of such animals although this right is lost
forces) when the owner mixes his cattle with those of
(a) Over Immovables another.
(i) Industrial
(ii) Natural (2) Industrial – produced by lands of any kind
(1) Alluvion through cultivation or labor [NCC 442 (2)]
(2) Avulsion
(3) Change of Course of River Standing trees are not fruits since they are
(4) Formation of Islands considered immovables although they produce
fruits themselves. However, they may be
(b) Over Movables considered as industrial fruits when they are
(i) Conjunction and Adjunction cultivated or exploited to carry on an industry.
(ii) Commixtion and Confusion
(iii) Specification (3) Civil Fruits – easily prorated for under NCC 544
they are deemed to accrue daily and belong to
WITH RESPECT TO IMMOVABLES:
the possessor in good faith in that proportion
Accession Discreta - Right of ownership to the fruits
[NCC 441] Note:
(a) Natural and Industrial Fruits are real property
General Rule: To the owner of the principal belongs while still ungathered
the natural, industrial and civil fruit. (b) Only such as are manifest or born are
considered as natural or industrial fruits
Exception: [PULA]
(1) Possession in good faith Principles Applicable to Accession Discreta
(2) Usufruct (1) Time of Accrual depending on kind:
PAGE 74
(a) Annuals: from the time seedlings appear on

the ground Note:
(b) Perennials: from the time fruits actually (a) Bad faith leads to liability for damages and the
appear on the plants loss of the works or the improvement without
(c) Young of animals: from the time they are in reimbursement
the womb, although unborn – beginning of (b) Bad faith of one party neutralizes the bad faith
maximum ordinary period of gestation of the other
Fowls: from the time of incubation
(2) Accession Continua Natural: Land deposits, etc.
(2) A receiver of fruits has the obligation to pay the (a) Alluvium: Soil is gradually deposited on banks
expenses incurred by a third person in the adjoining the river
production, gathering and preservation. [NCC
443] Requisites
(a) Exception: Receiver does not have to pay if (i) Deposit of soil or sediment is gradual
fruits are recovered before gathering from a and imperceptible
possessor in bad faith, receiver does NOT have (ii) As a result of the action of the currents
to pay indemnity of the waters of the river
(b) But if recovered after fruits have been (iii) Land where the accretion takes place is
gathered, receiver must pay since the fruits adjacent to the banks of the rivers
have been separated from immovable, hence (iv) Deemed to Exist: When the deposit of
accession principles will not apply the sediment has reached a level higher
than the highest level of the water
Principles Applicable to Accession Continua during the year
(1) Accession Continua Artificial or Industrial: Building,
planting or sowing on land owned by another Effect
(over immovables) (i) Land automatically owned by the
riparian owner
General Rule: Whatever is built, planted or sown (ii) BUT does not automatically become
on the land of another + improvements or repairs registered property
made thereon, belong to the owner of the land
subject to the rules on BPS. Rationale
(i) To offset the owner’s loss from possible
Presumptions: erosion due to the current of the river
(a) All works, sowing and planting are presumed (ii) Compensate for the subjection of the
made by the owner land to encumbrances and legal
(b) All works are presumed made at the owner’s easements
expense, unless the contrary is proved
(c) The owner of the principal thing owns the (b) Avulsion: A portion of land is segregated from
natural, industrial and civil fruits, except when one estate by the forceful current of a river,
the following persons exist: creek or torrent and transferred to another
(i) Possessor in Good Faith
(ii) Usufructuary Requisites
(iii) Lessee (i) Segregation and transfer of land is
(iv) Antichretic creditor sudden and abrupt
(ii) Caused by the current of the water
Meaning of bad faith (iii) Portion of land transported must be
(a) On the part of the landowner: Whenever the known and identifiable
building, planting or sowing was done with OR
the knowledge and without opposition on his (iv) Can also apply to sudden transfer by
part other forces of nature such as land
(b) On the part of owner of materials: Allows the transferred from a mountain slope
use of his materials without protest because of an earthquake
(c) On the part of the builder, planter and sower:
Knows that he does not have title to the land, Effect:
nor the right to build thereon OR no The ownership of the detached property is
permission of the owner of the materials to retained by the owner subject to removal
pay their value within 2 years from the detachment
PAGE 75
(d) Formation of Islands

(c) Change Of Course Of River They belong to the State if:
Requisites (i) Formed on the SEAS within the
(i) Change in the natural course of the jurisdiction of the Philippines
waters of the river (ii) Formed on LAKES
(ii) Such change causes the abandonment (iii) Formed on NAVIGABLE or FLOATABLE
of the river beds RIVERS
(1) Capable of affording a channel or
Natural Bed: ground covered by its waters passage for ships and vessels
during ordinary floods. (2) Must be sufficient not only to float
bancas and light boats, but also
Such change is sudden or abrupt bigger watercraft
(3) Deep enough to allow unobstructed
Results: movements of ships and vessels
(i) Owners whose lands are occupied by the (4) TEST: can be used as a highway of
new course automatically become commerce, trade and travel
owners of the old bed, in proportion to
the area they lost They belong to the Owners of the nearest
(ii) Owners of the lands adjoining the old margins or banks if
bed are given the right to acquire the (i) Formed through successive accumulation
same by paying the value of the land of alluvial deposits
(ii) On NON-NAVIGABLE and NON-
Not exceeding the value of the land FLOATABLE RIVERS
invaded by the new bed (the old property (iii) If island is in the middle: divided
of the owner) longitudinally in half.
(iii) The new bed opened by the river on a

private estate shall become of public
dominion
Landowner
Good Faith Bad Faith
Rights of Landowner [NCC 448]: Absolute Duties of Landowner [NCC

(a) Buy (only after payment of indemnity 447]:
under NCC 546 and 548 to BPS) (a) Pay damages
(b) Buy or pay for value
546 and 548 – Necessary, Useful and (c) Allow removal
Good Faith
Ornamental
Builder,
Planter, (b) Sell to BP (unless the value of the land is
Sower considerably more than that of the
[BPS] building or trees)
Remedy: Rent to BP if L does not want to

buy
(c) Rent to S
PAGE 76
Landowner
Absolute Right of Landowner [NCC 449-452]

(a) Get
Bad Faith
(b) Demolish the work of B at the SAME AS

expense of B GF: GF
(c) Removal of PS at the expense of PS
(d) Sell to BP
(e) Rent to the S
(f) Damages
Landowner
Rights of Landowner: [NCC 447] Absolute Duties of Landowner: [NCC

Good Buy unless M can remove without 447]
Material Faith damage (1) Pay damages
Man (2) Buy or pay for value
(3) Allow removal
Bad Absolute Right of Landowner [NCC 447] SAME AS

Faith Get GF: GF
Case 1: Landowner is BPS using material of another

Landowner and BPS Owner of Material
Good faith Good faith
Right to acquire the improvements after paying the (1) Limited right of removal if there would be no injury to
value of materials. work constructed, or without plantings or
constructions being destroyed. [Article 447]
(2) Right to receive payment for value of materials
Bad faith Good faith
Acquire BPS after paying its value and paying indemnity (a) Right to receive payment for value of materials
for damages [Article 447] but subject to OM’s right to (b) Absolute right of removal of the work constructed in
remove any event
(c) Right to be indemnified for damages
Good faith Bad faith
(1) Right to acquire the improvements without paying Lose materials without right to indemnity
indemnity
(2) Right to acquire indemnity for damages if there are
hidden defects known to OM
Bad faith Bad faith
Same as though acted in good faith under Article 453 Same as though acted in good faith under Article 453
PAGE 77
Case 2: BPS builds, plants, or sows on another’s ;and using his own materials
Landowner BPS and Owner of Material
Good faith Good faith
Landowner has option to: BPS has right to retain (right of retention) the land until
(a) Acquire the improvement after paying indemnity the payment of indemnity
which may be the original cost of improvement OR
increase in value of the whole brought about by the NOTE: During this period BPS is not required to pay
improvement rent.
(b) Sell the land to the BP or collect rent from sower
UNLESS value of land is more than the thing built,
planted or sown or BP shall pay rent fixed by parties
or by the court in case of disagreement.
NOTE: Landowner can be forced to choose under pain

of direct contempt or court can choose for him.
Good faith Bad faith
Landowner has right to collect damages in any case and (1) Pay damages to landowner
option to: (2) BPS lose materials without right to indemnity
(a) Acquire improvements without paying indemnity if (3) No right to refuse to buy the land
the improvements are still standing on the land (4) Recover necessary expenses for preservation of land
(b) Sell the land to BP or collect rent from the sower
unless value of the improvements in which case
there will be a forced lease
(c) Order demolition of improvements or restoration of
land to its former condition at the expense of the
BPS
Landowner must pay for necessary expenses for

preservation
Bad faith Good faith
(1) Landowner must indemnify BPS for the BPS has right to :
improvements and pay damages as if he himself did (1) Be indemnified for damages
the BPS (2) Remove all improvements in any event
(2) Landowner has no option to sell the land and cannot
compel BPS to buy the land unless BPS agrees to
Bad faith Bad faith
Same as though acted in bad faith under Article 453 Same as though acted in bad faith under Article 453
Case 3: BPS builds, plants or sows on another’s land with materials owned by third persons
Landowner BPS Owner of Material
Good faith Good faith Good faith
(a) Right to acquire improvements (1) Right of retention until necessary (1) Collect value of material
and pay indemnity to BPS; and useful expenses are paid primarily from BPS and
subsidiarily liable to OM (2)Pay value of materials to OM subsidiarily liable for landowner
(b) Has option to: if BPS is insolvent
(1) Sell land to BP except if the (2) Limited right of removal
value of the land is
considerably more
(2) Rent to sower
Good faith Good faith Bad faith
(1) Right to acquire improvements (1) Right of retention until necessary (1) Lose the material without right
and pay indemnity to BPS and useful expenses are paid. to indemnity
(2) Has option to: (2)Keep BPS without indemnity to (2) Must pay for damages to BPS
(1) Sell land to BP except if the OM and collect damages from
value of the land is him
PAGE 78
Landowner BPS Owner of Material

considerably more
(2) Rent to sower
(3) Without subsidiary liability for
cost of materials
Good faith Bad faith Bad faith
(1) Landowner has right to collect Recover necessary expenses for (1) Recover value from BPS (as if
damages in any case and option preservation of land from landowner both are in good faith)
to: unless landowner sells land (2) If BPS acquires improvement,
(1) Acquire improvements w/o remove materials if feasible w/o
paying for indemnity; or injury
(2) Demolition or restoration; or (3) No action against landowner but
(3) Sell to BP, or to rent to sower liable to landowner for damages
(2) Pay necessary expenses to BPS
Bad faith Bad faith Bad faith
Same as when all acted in good Same as when all acted in good Same as when all acted in good
faith under Article 453 faith under Article 453 faith under Article 453
Bad faith Good faith Good faith
(1) Acquire improvement after (1) May remove improvements (1) Remove materials if possible
paying indemnity and damages (2)Be indemnified for damages in w/o injury
to BPS unless latter decides to any event (2) Collect value of materials from
remove BPS; subsidiarily from landowner
(2) Subsidiarily liable to OM for
value of materials
Bad faith Bad faith Good faith
(1) Acquire improvements after (a) Right of retention until necessary (a) Collect value of materials
indemnity; subsidiarily liable to expenses are paid primarily from BPS and
OM for value of materials (b)Pay value of materials to OM and subsidiarily from landowner
(2) Has option to: pay him damages (b) Collect damages from BPS
(a) Sell the land to BP except if (c) If BPS acquires improvements,
the value of the land is remove materials in any event
considerably more
(b) Rent to sower
Good faith Bad faith Good faith
(a) Acquire improvement after (1) Right of retention until necessary - Collect value of materials
paying indemnity; subsidiarily expenses are paid primarily from BPS and
liable to OM (2)Pay value of materials to OM subsidiarily from landowner
(b) Landowner has option to: (3) Pay damages to OM - Collect damages from BPS
(a) Sell land to BP except if value - If BPS acquires improvements,
of land is considerably more absolute right of removal in any
(b) Rent to sower event
Bad faith Good faith Bad faith
Acquire improvements and pay (1) Receive indemnity for damages (1) No right to indemnity
indemnity and damages to BPS (2)Absolute right of removal of (2) Loses right to material
unless latter decides to remove improvements in any event
materials
WITH RESPECT TO MOVABLE PROPERTY (2) Mixture – the union of material where the
Three Types: components lose their identity
(1) Conjunction or Adjunction - process where 2
movables belonging to different owners are Kinds:
attached to each other to form a single object (a) Commixtion – mixture of solids
(b) Confusion – mixture of liquids and gases
PAGE 79
(3) Specification – transforming/giving of a new form

to another’s material through labor When separation allowed
(1) Separation without injury
Adjunction (2) Accessory much more precious
Requisites (a) Owner of accessory may demand separation
(1) There are 2 movables belonging to 2 different even though the principal thing may suffer
owners (b) Owner who caused the union shall bear the
(2) They are united in such a way that they form a expenses for separation even if he acted in
single object good faith
(3) They are so inseparable that their separation (3) Owner of principal in bad faith
would impair their nature or result in substantial
injury to either component Mixture
Kinds of Mixtures:
Kinds of Adjunction (1) Commixtion: mixture of solid things
(1) Inclusion or engraftment – e.g. a diamond is set (2) Confusion: mixture of liquid things
on a gold ring
(2) Soldadura or soldering – e.g. when lead is united Rules:
or fused to an object made of lead (1) Mixture by will of the owners
(a) It is ferruminacion if both the accessory and (a) First governed by their stipulations
principal objects are of the same metal; and (b) In the absence of stipulation, each owner
(b) Plumbatura, if they are of different metals acquires a right or interest in the mixture in
(3) Escritura or writing – e.g. when a person writes on proportion to the value of his material
paper belonging to another;
(4) Pintura or painting – e.g. when a person paints on (2) Mixture caused by an owner in good faith or by
canvas belonging to another; chance
(5) Tejido or weaving – e.g. when threads belonging (a) Share of each owner shall be proportional to
to different owners are used in making textile the value of the part which belonged to him
(b) If things mixed are exactly the same kind and
Ownership of new object formed by adjunction quality, divide mixture equally/proportionally
(1) If union was made in good faith, owner of (c) If things mixed are of different kind or quality,
principal thing acquires the accessory, with a co-ownership arises
obligation to indemnify the owner of the (d) If they can be separated without injury,
accessory for its value in its uncontroverted state owners may demand separation
(2) If union was in bad faith, NCC 470 applies: (e) Expenses borne by owners pro rata
(a) Owner of accessory in bad faith loses the thing (f) NOTE: Good faith does not necessarily
incorporated and has the obligation to exclude negligence, which gives rise to
indemnify the owner of the principal thing for damages
damages
(b) If owner of principal is in bad faith, owner of (3) Mixture caused by an owner in bad faith
the accessory has a right to choose between (a) Actor forfeits the thing belonging to him
the owner of principal paying him its value or (b) Actor also becomes liable for damages
that the thing belonging to him be separated,
even though for this purpose it be necessary (4) Mixture made with knowledge and without
to destroy the principal thing; and in both objection of the other owner
cases, there shall be indemnity for damages Rights to be determined as though both acted in
good faith
Test to determine the principal thing
In the order of application, the principal is that: Specification
(1) To which the other has been united as an Definition:
ornament or for its use or perfection (“Rule of Takes place when the work of a person is done on the
importance and purpose”) material of another, such material, in consequence of
(2) Of greater value the work itself, undergoes a transformation
(3) Of greater volume
(4) That of greater merits, taking into consideration Rules:
all the pertinent legal provisions, as well as the (1) Person in good faith
comparative merits, utility and volume of their General rule:
respective things
PAGE 80
Worker becomes the owner but must indemnify NATURE: QUASI IN REM
owner (who was also in good faith) for the value (a) A suit against a particular person or persons in
of the material respect to the res and the judgment will apply
only to the property in dispute.
Exception: (b) The action to quiet title is characterized as
If material is more valuable than the new thing, proceeding quasi in rem. Technically, it are
owner of material may choose: neither in rem nor in personam. In an action
(a) To take the new thing but must pay for the quasi in rem, an individual is named as defendant.
work or labor However, unlike suits in rem, a quasi in rem
(b) To demand indemnity for the material judgment is conclusive only between the parties.
[Spouses Portic v. Cristobal]
If the owner was in bad faith, maker may
appropriate the new thing without paying the JUSTIFICATIONS FOR QUIETING OF TITLE
owner OR require the owner to pay him the value (1) To prevent future or further litigation on the
of the thing or his work, with right to indemnity ownership of the property
(2) To protect the true title and possession
(2) Person in bad faith (3) To protect the real interest of both parties
General rule: (4) To determine and make known the precise state
(a) Owner may either appropriate the new thing of the title for the guidance of all
to himself without paying the maker OR
(b) Owner may demand value of material plus THE ACTION TO QUIET TITLE DOES NOT APPLY:
damages (1) To questions involving interpretation of
documents
Exception: (2) To mere written or oral assertions of claims
The first option is not available in case the value (a) Unless made in a legal proceeding
of the work, for artistic or scrientific reasons, is (b) Or asserting that an instrument or entry in
considerably more than that of the material plaintiff’s favor is not what it purports to be
(3) To boundary disputes
(3) Person made use of material with consent and (4) To deeds by strangers to the title unless
without objection of owner purporting to convey the property of the plaintiff
Rights shall be determined as though both acted (5) To instruments invalid on their face
in good faith (6) Where the validity of the instrument involves a
pure question of law
REQUIREMENT
Quieting of Title or Interest in REQUISITES OF AN ACTION TO QUIET TITLE
(1) There is a CLOUD on title to real property or any
and Removal or Prevention of interest to real property.
(2) The plaintiff must have legal or equitable title to,
Cloud over Title to or Interest or interest in the real property.
(3) Plaintiff must return the benefits received from
in Real Property the defendant.
IN GENERAL THERE IS A CLOUD ON TITLE TO REAL PROPERTY OR ANY

(1) Applicable to real property INTEREST TO REAL PROPERTY
(2) Basis: Equity comes to the aid of the plaintiff who “Cloud on title” means a semblance of title, either
would suffer if the instrument (which appear to legal or equitable, or a claim or a right in real
be valid but is in reality void, ineffective, voidable property, appearing in some legal form but which is,
or unenforceable) was to be enforced. in fact, invalid or which would be inequitable to
enforce.
PURPOSE
(1) To declare: A cloud exists if:
(a) The invalidity of a claim on a title (1) There is a claim emerging by reason of:
(b) The invalidity of an interest in property (a) Any instrument e.g. a contract, or any deed of
(2) To free the plaintiff and all those claiming under conveyance, mortgage, assignment, waiver,
him from any hostile claim on the property. etc. covering the property concerned
PAGE 81
(b) Any record, claim, encumbrance e.g. an affirmatively and within the time provided by the
attachment, lien, inscription, adverse claim, lis statute. Possession is a continuing right as is the
pendens, on a title right to defend such possession. So it has been
(c) Any proceeding e.g. an extrajudicial partition determined that an owner of real property in
of property possession has a continuing right to invoke a
(2) The claim should appear valid or effective and court of equity to remove a cloud that is a
extraneous evidence is needed to prove their continuing menace to his title. Such a menace is
validity or invalidity. compared to a continuing nuisance or trespass
(a) Test: Would the owner of the property in an which is treated as successive nuisances or
action for ejectment brought by the adverse trespasses, not barred by statute until continued
party be required to offer evidence to defeat a without interruption for a length of time sufficient
recovery? to affect a change of title as a matter of law."
(b) As a general rule, a cloud is not created by [Pingol v. CA]
mere verbal or parole assertion of ownership
or an interest in property. (2) When the plaintiff is not in possession of the
(3) Such instrument, etc. is, in truth and in fact, property, the action to quiet title may prescribe.
invalid, ineffective, voidable, or unenforceable, or (a) 10 yrs. – ordinary prescription
has been extinguished or terminated, or has been (b) 30 yrs. – extraordinary prescription
barred by extinctive prescription.
(4) Such instrument, etc. may be prejudicial to the
true owner or possessor.
THE PLAINTIFF MUST HAVE LEGAL OR EQUITABLE TITLE

TO, OR INTEREST IN THE REAL PROPERTY [NCC 477]
Co-ownership
(1) Legal title: the party is the registered owner of the DEFINITION:
property. The form of ownership when the ownership of an
(2) Equitable title: the person has the beneficial undivided thing or right belongs to different persons.
ownership of the property. [NCC 484]
PLAINTIFF MUST RETURN THE BENEFITS RECEIVED FROM
REQUISITES:
THE DEFENDANT [NCC 479]
(1) Plurality of owners
(2) Object must be an undivided thing or right
QUIETING OF TITLE V. REMOVAL OF CLOUD (3) Each co-owner’s right must be limited only to his
REQUISITES OF AN ACTION TO PREVENT A CLOUD
ideal or abstract share of the physical whole
(1) Plaintiff has a title to a real property or interest
therein WHAT GOVERNS CO-OWNERSHIP:
(2) Defendant is bent on creating a cloud on the title (1) Contracts
or interest therein. The danger must not be (2) Special provisions
merely speculative or imaginary but imminent. (3) Civil Code
(3) Unless the defendant is restrained or stopped,
the title or interest of the plaintiff will be CHARACTERISTICS OF CO-OWNERSHIP
prejudiced or adversely affected. (1) There are 2 or more co-owners
(2) There is a single object which is not materially or
PRESCRIPTION/NON-PRESCRIPTION OF physically divided and over which and his ideal
ACTION share of the whole
PRESCRIPTION OF ACTION
(3) There is no mutual representation by the co-
(1) When plaintiff is in possession of the property – owners
the action to quiet title does not prescribe. (4) It exists for the common enjoyment of the co-
owners
The rationale for this rule has been aptly stated (5) It has no distinct legal personality
thus: (6) It is governed first of all by the contract of the
parties; otherwise, by special legal provisions,
“The owner of real property who is in possession and in default of such provisions, by the
thereof may wait until his possession is invaded provisions of Title III on Co-ownership
or his title is attacked before taking steps to
vindicate his right. A person claiming title to real
property, but not in possession thereof, must act
PAGE 82
THERE ARE IDEAL SHARES DEFINED BUT NOT PHYSICALLY (b) Article 148: between a man and a woman not
IDENTIFIED [NCC 485] capacitated to marry each other
(1) The share of the co-owners, in the benefits as (c) Article 90: if matter is not provided in the FC
well as in the charges, shall be proportional to Chapter on ACP, then rules on co-ownership
their respective interests. will apply
(2) Any stipulation in a contract to the contrary shall
be void. (2) Purchase creating implied trust: co-ownership
(3) The portions belonging to the co-owners in the between persons who agree to purchase property
co-ownership shall be presumed equal, unless If two or more persons agree to purchase
the contrary is proved property and by common consent the legal title is
taken in the name of one of them for the benefit
Each co-owner has absolute control over his ideal of all, a trust is created by force of law in favor of
share the others in proportion to the interest of each
Every co-owner has absolute ownership of his [NCC 1452]
undivided interest in the co-owned property and is
free to alienate, assign or mortgage his interest (3) Easement of Party Wall: co-ownership of part-
except as to purely personal rights. While a co- owners of a party wall (NCC 658)
owner has the right to freely sell and dispose of his
undivided interest, nevertheless, as a co-owner, he (4) Condominium Law: co-ownership of the common
cannot alienate the shares of his other co-owners – areas by holders of units
nemo dat qui non habet. [Acabal v. Acabal] Sec. 6, RA 4726. The Condominium Act. Unless
otherwise expressly provided in the enabling or
Mutual respect among co-owners with regard to use, master deed or the declaration of restrictions, the
enjoyment, and preservation of the things as a whole incidents of a condominium grant are as follows:
(1) The property or thing held pro-indiviso is (a) Unless otherwise, provided, the common
impressed with a fiduciary character: each co- areas are held in common by the holders of
owner becomes a trustee for the benefit of his co- units, in equal shares, one for each unit.
owners and he may not do any act prejudicial to
the interest of his co-owners. CONTRACTS
(2) Until a judicial division is made, the respective By Agreement of Two or More Persons
part of each holder cannot be determined. The Article 494, Civil Code. No co-owner shall be obliged
effects of this would be: to remain in the co-ownership. Each co-owner may
(a) Each co-owner exercises, together with the demand at any time the partition of the thing owned
others, joint ownership over the pro indiviso in common, insofar as his share is concerned.
property, in addition to his use and enjoyment
of the same Nevertheless, an agreement to keep the thing
(b) Each co-owner may enjoy the whole property undivided for a certain period of time, not exceeding
and use it. ten years, shall be valid. This term may be extended
by a new agreement.
Only limitation: a co-owner cannot use or enjoy
the property in a manner that shall injure the A donor or testator may prohibit partition for a
interest of his other co-owners. [Pardell v. period which shall not exceed twenty years.
Bartolome]
Neither shall there be any partition when it is
SOURCES OF CO-OWNERSHIP prohibited by law.
Law, contract, succession, testamentary disposition
or donation inter vivos, fortuitous event or chance, No prescription shall run in favor of a co-owner or co-
and by occupancy heir against his co-owners or co-heirs so long as he
expressly or impliedly recognizes the co-ownership.
LAW
(1) Cohabitation: co-ownership between common (1) Two or more persons may agree to create a co-
law spouses ownership
(2) Note: there is a 10-year term limit for ownership
The Family Code, in the following provisions, by agreement; BUT: Term may be extended by a
made the rules on co-ownership apply new agreement
(a) Article 147: between a man and a woman
capacitated to marry each other
PAGE 83
By the creation of a Universal Partnership when the discovery is made on the property of
Of all present property another, or of the State or any of its subdivisions,
NCC 1778. A partnership of all present property is and by chance, one-half shall be allowed to the
that in which the partners contribute all the property finder.
which actually belongs to them to a common fund,
with the intention of dividing the same among BY OCCUPANCY
themselves, as well as all the profits which they may Harvesting and Fishing: co-ownership by two or more
acquire therewith. persons who have seized a res nullius thing
BY ASSOCIATIONS AND SOCIETIES WITH SECRET ARTICLES

NCC 1779. In a universal partnership of all present [NCC 1775]
property, the property which belonged to each of the Articles are kept secret among the members and any
partners at the time of the constitution of the one of the members may contract in his own name
partnership, becomes the common property of all with third persons:
the partners, as well as all the profits which they may (1) governed by the provisions relating to co-
acquire therewith. ownership
A stipulation for the common enjoyment of any other RIGHT OF CO-OWNERS
profits may also be made; but the property which the RIGHT TO THE SHARE IN THE BENEFITS AS WELL AS
partners may acquire subsequently by inheritance, CHARGES [NCC 485]
legacy, or donation cannot be included in such (1) Proportional to their interests
stipulation, except the fruits thereof. (2) Stipulation to the contrary is void
(3) Portions belonging to the co-owners is presumed
SUCCESSION equal
Intestate succession: co-ownership between the heirs
before partition of the estate RIGHT TO USE THE THING OWNED IN COMMON [NCC 486]
Limitation:
NCC 1078. Where there are two or more heirs, the That he use the thing in accordance with the purpose
whole estate of the decedent is, before its partition, for which it is intended
owned in common by such heirs, subject to the
payment of debts of the deceased. That he uses it in such a way as to not injure the
 For as long as the estate is left undivided the interest of the co-ownership or prevent the other co-
heirs will be considered co-owners of the owners from using it
inheritance.
 If one of the heirs dies, his heirs will in turn be co- RIGHT TO BRING AN ACTION IN EJECTMENT [NCC 487]
owners of the surviving original heirs.
RIGHT TO COMPEL OTHER CO-OWNERS TO CONTRIBUTE TO
TESTAMENTARY DISPOSITION OR DONATION INTER VIVOS THE EXPENSES OF PRESERVATION AND TO THE TAXES
(1) When a donation is made to several persons [NCC 488]
jointly, it is understood to be in equal shares, and (1) Any one of the other co-owners may exempt
there shall be no right of accretion among them, himself by renouncing so much of his undivided
unless the donor has otherwise provided [NCC interest as may be equivalent to his share of the
753] expenses and taxes.
(2) A donor or testator may prohibit partition for a (2) No waiver if it is prejudicial to the co-ownership
period which shall not exceed 20 years.
RIGHT TO REPAIR [NCC 489]
BY FORTUITOUS EVENT OR BY CHANCE (1) Repairs for preservation may be made at the will
(1) Co-ownership between owners of 2 things that of one of the co-owners but he must first notify
are mixed by chance or by will of the owners: his co-owners
(2) Expenses to improve or embellish, decided upon
Each owner shall acquire a right proportional to by a majority
the part belonging to him, bearing in mind the
value of the things mixed or confused [NCC 472] RIGHT TO OPPOSE ALTERATIONS [NCC 491]
(1) Consent of all the others is needed to make
(2) Hidden Treasure - co-ownership between finder alterations, even if the alteration benefits all.
and owner of the land [NCC 438]
PAGE 84
(2) If the withholding of the consent is clearly Repairs for preservation

prejudicial to the common interest, the courts (1) First, notify other co-owners, as far as practicable
may afford relief (2) Co-owner may advance expenses for preservation
(3) Reason for the rule: alteration is an act of even without prior consent; he is entitled to
ownership, not of mere administration. reimbursement.
RIGHT TO FULL OWNERSHIP OF HIS PART AND OF THE Embellishment or improvements

FRUITS AND BENEFITS PERTAINING THERETO [NCC 493] (1) Notify co-owners of improvements and
(1) Therefore he may alienate, assign or mortgage it, embellishments to be made
and even substitute another person in its If no notification, co-owner who advanced the
enjoyment expenses has the right to reimbursement if he
(2) Except: when personal rights are involved. proves the necessity of such repairs and the
(3) The effect of the alienation or the mortgage, with reasonableness of the expense
respect to the co-owners, shall be limited to the
portion which may be allotted to him in the Exception: If proven that had there been a
division upon the termination of the co- notification, they could have hired another who
ownership would charge less or that they know of a store
that sells the needed material at a cheaper price
RIGHT TO PARTITION [NCC 494]
(1) Each may demand at any time the partition of the Only entitled to reimbursement for the amount
thing, insofar as his share is concerned that should have been spent had he notified the
(2) An agreement to keep the thing undivided for a others, and difference shall be borne by him
certain period NOT exceeding 10 years is valid. alone
(3) Term may be extended by a new agreement
(4) Donor or testator may prohibit partition, period (2) Decision by majority must be followed
NOT to exceed 20 years
(5) No partition if prohibited by law TERMINATION/EXTINGUISHMENT
(6) Right does not prescribe TOTAL DESTRUCTION OF THING OR LOSS OF THE
PROPERTY CO-OWNED
RIGHT TO REDEMPTION [NCC 1619] Is there still co-ownership if a building is destroyed?—
(1) May exercise this in case the shares of other co- Yes, over the land and the debris.
owners are sold to a third person
(2) If 2 or more co-owners wish to exercise this right MERGER OF ALL INTERESTS IN ONE PERSON
= in proportion to their share in the thing
ACQUISITIVE PRESCRIPTION
Note: Rules on Co-Ownership Not Applicable to CPG By whom
or ACP (1) A third person [NCC 1106]
(1) These are governed by the Family Code (2) A co-owner against the other co-owners
(2) Even void marriages and cohabitation of
incapacitated persons are governed by FC 50, Requisites
147, and 148 (1) Unequivocal acts of repudiation of the rights of
the other co-owners (oust the other co-owners)
RULES: (a) Must be shown by clear and convincing
On Renunciation evidence
(1) Other co-owners may choose not to contribute to (b) Must be within the knowledge of the other co-
the expenses by renouncing so much of his owners
undivided interest as may be equivalent to his (c) Must not be a mere refusal to recognize the
share of the necessary expenses and taxes others as co-owners
(2) Must be express; thus, failure to pay is not a (2) Open and adverse possession - Not mere silent
renunciation possession
(3) Requires the consent of other co-owners because it
is a case of dacion en pago (cessation of rights) Note: there is a presumption that possession of a
involving expenses and taxes already paid (J.B.L. co-owner is NOT adverse
Reyes)
(4) Cannot renounce his share if it will be prejudicial Prescription only arises and produces all effects
to another co-owner when the acts are clearly meant to oust the rights
of the other co-owners
PAGE 85
to take part in the division presupposes the duty

to notify.
PARTITION OR DIVISION (2) If notice is not given, the partition will not be
Effect: binding on them.
(1) Confers exclusive ownership of the property (3) Once notice has been given, it is the duty of
adjudicated to him creditors and assignees to intervene and make
(2) Co-heirs shall be reciprocally bound to warrant known their stand.
the title to and the quality of each property (a) If they fail, they cannot question the division
adjudicated made, except in cases of fraud.
(3) Reciprocal obligation of warranty shall be (b) If they formulate a formal question, they can
proportionate to the respective hereditary shares contest such partition
of co-heirs
(4) An action to enforce warranty must be brought
within 10 years from the date the right accrues
(5) The co-heirs shall not be liable for the
subsequent insolvency of the debtor of the estate Possession
Unless partition is effected, each heir cannot claim DEFINITION [NCC 523]
sole ownership over a definite portion of the land. The holding of a thing or the enjoyment of a right
Heirs become the undivided owner of the whole
estate Until said partition, he cannot alienate a CONCEPT OF POSSESSION
specific part of the estate. Until then, they can only (1) To possess, in a grammatical sense, means to
sell their successional rights. [Carvaria v. CA] have, to physically and actually occupy a thing,
with or without right. (Sanchez Roman)
(2) It is the holding of a thing or a right, whether by
Rights against individual co-owners in case of material occupation or by the fact that the thing
partition [NCC 497] or the right is subjected to the action of our will.
(1) The creditors are allowed to take part in the (Manresa)
partition. (3) It is an independent right apart from ownership.
(2) Reason for the rule: They own part of the interest
of the co-owners who made the assignment or Right of Possession Right to possess
alienation. (jus possessionis) (jus possidendi)
Independent right Incident to
Partition in case co-owners cannot agree (NCC 498) ownership
Procedure for Partition (4) Possession includes the idea of occupation. It

(1) Governing rule: Rule 69 cannot exist without it. (Exceptions: NCC 537)
(2) How: By agreement of parties or by judicial
decree CHARACTERISTICS
(3) Form: Oral or Written (Statute of Frauds does not ESSENTIAL REQUISITES OF POSSESSION
operate here because it is not a conveyance of (1) Corpus possessionis: Holding (actual or
property but a mere segregation or designation of constructive) of a thing or exercise of a right, if
which parts belong to whom) right is involved.
(4) Rules of Court do not preclude agreements or (a) General Rule: Possession and cultivation of a
settlements. portion of a tract under claim of ownership of
all is a constructive possession of all, if the
Action for Partition: remainder is not in adverse possession of
(1) W/N the plaintiff is indeed a co-owner of the another. [Ramos v. Director of Lands]
property (b) Doctrine of constructive possession applies
(2) HOW will the property be divided between the when the possession is under title calling for
plaintiff and defendant. the whole. It does not apply where possession
is without title.
Intervention of creditors and assignees:
(1) The law does not expressly require previous (2) Animus possidendi: Intention to possess
notice to the creditors and assignees before a (a) There is no possession if the holder does not
partition, but the right of creditors and assignees want to exercise the rights of a possessor.
(b) Implied from the acts of the possessor.
PAGE 86
(c) May be contradicted and rebutted by evidence does not become effective unless ratified
– to prove that the person who is in by the person in whose name it is
possession does not in fact exercise power or exercised.
control and does not intend to do so.
Possession in the Concept of an Owner, and
DEGREES OF POSSESSION Possession in the Concept of a Holder with the
(1) Mere holding or possession without title and in Ownership Belonging to Another [NCC 525]
violation of the right of the owner (1) Possession in Concept of Holder:
(a) e.g. possession of a thief or usurper of land (a) One who possesses as a mere holder, not in
(b) Here, both the possessor and the public know the concept of owner, acknowledges in
that the possession is wrongful. another a superior right which he believes to
be ownership, whether his belief be right or
(2) Possession with juridical title but not that of wrong.
ownership (b) e.g. tenant, usufructuary, borrower in
(a) e.g. possession of a tenant, depository agent, commodatum.
bailee trustee, lessee, antichretic creditor.
(b) This possession is peaceably acquired. (2) Possession in Concept of Owner:
(c) This degree of possession will never ripen into (a) May be exercised by the owner himself or
full ownership as long as there is no one who claims to be so.
repudiation of concept under which property is (b) When a person claims to be the owner of a
held. thing, whether he believes so or not, acting as
an owner, and performing acts of ownership,
(3) Possession with just title or title sufficient to and he is or may be considered as the owner
transfer ownership, but not from the true owner by those who witness his exercise of
(a) e.g. possession of a vendee from a vendor who proprietary rights, then he is in the possession
pretends to be the owner. of an owner. This is the kind of possession
(b) This degree of possession ripens into full that ripens into ownership under Article 540,
ownership by lapse of time. when such possession is public, peaceful and
uninterrupted [see Art. 1118].
(4) Possession with a just title from the true owner
This is possession that springs from ownership. Effects of Possession in Concept of an Owner
(1) Converted into ownership by the lapse of time
CASES OF POSSESSION necessary for prescription
Possession for Oneself, or Possession Exercised in (2) Possessor can bring all actions necessary to
One’s Own Name and Possession in the Name of protect his possession, availing himself of any
Another [NCC 524] action which an owner can bring, except
(1) In one’s own name – the fact of possession and accion reivindicatoria which is substituted by
the right to such possession is found in the same accion publiciana.
person. (3) He can ask for the inscription of possession in
(2) In the name of another – the one in actual the registry of property
possession is without any right of his own, but is (4) Upon recovering possession from one who
merely an instrument of another in the exercise of has unlawfully deprived him of it, he can
the latter’s possession. demand fruits and damages
(5) He can do on the thing possessed everything
Kinds of possession in the name of another that the law authorizes an owner to do; he
(a) Necessary – arises by operation of law can exercise the right of pre-emption and is
e.g. representatives who exercise possession entitled to the indemnity in case of
in behalf of a conceived child, juridical appropriation.
persons, persons not sui juris and the conjugal
partnership Possession in Good Faith and Possession in Bad Faith
[NCC 526]
(b) Voluntary – effected through the mutual (1) Possessor in good faith – one who is unaware that
consent of the parties there exists a flaw which invalidates his
(i) e.g. agents or administrators appointed acquisition
by the owner or possessor. (a) Good faith – consists in the possessor’s belief
(ii) Third person may also voluntary exercise that the person from whom he received a
possession in the name of another, but it
PAGE 87
thing was the owner of the same and could

convey his title.
(b) It implies freedom from knowledge and ACQUISITION OF POSSESSION
circumstances which ought to put a person on WAYS OF ACQUIRING POSSESSION [NCC 531]
inquiry. (1) By material occupation
(c) The belief of a possessor that he is the owner (a) “Material occupation” – used in its ordinary
of the thing must be based upon the title or meaning and not in its technical meaning
mode of acquisition, such as a sale, a under NCC 712, which defines occupation as a
donation, inheritance or other means of mode of acquiring ownership.
transmitting ownership; for without this, there (b) Possession acquired by material occupation is
can be no real, well-grounded belief of one’s only possession as a fact, not the legal right of
ownership. possession.
(d) Error in the application of the law, in the legal (c) Constructive delivery is considered as an
solutions that arise from such application, in equivalent of material occupation in two
the appreciation of legal consequence of situations where such occupation is essential
certain acts, and in the interpretation of to the acquisition of possession:
doubtful provisions or doctrines, may properly (i) Tradicion brevi manu – takes place when one
serve as basis for good faith. who possess a thing by title other than
(e) A misconception of the law, no matter how ownership, continues to possess the same
honest cannot have the effect of making one a under a new title, that of ownership.
possessor in good faith when he does not (ii) Tradicion constitutum possessorium – takes
hold a title valid in form or a deed sufficient in place when the owner alienates the thing,
terms to transfer property. but continues to possess the same under a
different title.
(2) Possessor in bad faith – one who knows his title is
defective (2) By subjection to the action of one’s will
(a) Only personal knowledge of the flaw in the (a) This mode refers more to the right of
title or mode of acquisition can make him a possession than to possession as a fact. The
possessor in bad faith for bad faith is not “action of our will” must be juridical, in the
transmissible from one person to another. sense that it must be according to law.
(b) Mistake upon a doubtful or difficult question (b) Includes:
of law as a basis of good faith (i) Tradicion symbolica – by delivering
(c) Mistake or ignorance of the law, by itself, some object or symbol placing the
cannot become the basis of good faith. What thing under the control of the
makes the error or ignorance a basis of good transferee
faith is the presence of an apparent “doubt” (ii) Tradicion longa manu – by the
or “difficulty” in the law. In other words, the transferor pointing out to the transferee
law is complex, ambiguous, or vague such the things which are being transferred
that it is open to two or more interpretations.
(d) When the ignorance of the law is gross and (3) By execution of proper acts under legal formalities
inexcusable, as when a person of average (a) This mode refers to juridical acts or the
intelligence would know the law, such acquisition of possession by sufficient title
ignorance cannot be the basis of good faith. evidenced by the performance of required
Otherwise, the intendment of Article 3 which formalities.
states that, “Ignorance of the law excuses no (b) Examples:
one from compliance therewith,” will be (i) Donations
defeated. (ii) Succession
(iii) Contracts (like a sale with right to
What Things May be Possessed [NCC 530] repurchase)
Only things and rights which are susceptible of being (iv) Judicial possession
appropriated may be the object of possession. (v) Execution of judgments
(vi) Execution and registration of public
What May Not Be Possessed by Private Persons instruments
(1) Res Communes (vii) Inscription of possessory information
(2) Property of Public Dominion titles
(3) Right under discontinuous and/or non-apparent (c) The execution of the required formalities is
easement equivalent to delivery of the property
PAGE 88
BY WHOM MAY POSSESSION BE ACQUIRED [NCC 532] cannot read and write, spendthrifts and those
(1) By the same person under civil interdiction)
(2) By his legal representative (2) Object of possession – things only, not rights.
(3) By his agent (3) Method of acquisition – material occupation;
(4) By any person without any power whatsoever but acquisition by means for which the incapacitated
subject to ratification, without prejudice to person has the capacity, such as acquisition by
proper case of negotiorum gestio [Arts. 2144, 2149, succession, testate or intestate, or by donations
2150] propter nuptias, pure and simple donations
(5) Qualifiedly, minors and incapacitated persons
WHAT DO NOT AFFECT POSSESSION (NCC 537)
By the same person (1) Acts merely tolerated
Elements of personal acquisition: (a) Those which because of neighborliness or
(1) Must have the capacity to acquire possession familiarity, the owner of property allows
(2) Must have the intent to possess another person to do on the property;
(3) The possibility to acquire possession must be (b) Those services or benefits which one’s
present. property can give to another without material
injury or prejudice to the owner, who permits
By his legal representative them out of friendship or courtesy
Requisites of acquisition through another: (c) Acts of little disturbances which a person, in
(1) That the representative or agent has the intention the interest of neighborliness or friendly
to acquire the thing or exercise the right for relations permits others to do on his property,
another, and not for himself although continued for a long time, no right
(2) That the person for whom the thing has been will be acquired by prescription
acquired or the right exercised, has the intention
of possessing such thing or exercising such right Note: Permissive use merely tolerated by the
possessor cannot affect possession and cannot
Note: be the basis of acquisitive prescription.
(a) Bad faith is personal and intransmissible. Its Possession to constitute the foundation of
effects must be suffered only by the person who prescriptive right must be possession under claim
acted in bad faith; his heir should not be saddled of title; it must be adverse. [Cuaycong v.
with the consequences Benedicto]
(b) Good faith can only benefit the person who has it;
and the good faith of the heir cannot erase the (2) Acts executed clandestinely and without the
effects of bad faith of his predecessor. knowledge of the possessor [NCC 1108]
Possession has to be in the concept of an owner,
By any person without any power whatsoever but public, peaceful and uninterrupted. (UPPO)
subject to ratification, without prejudice to proper
case of negotiorum gestio [NCC 2144, 2149, 2150] (3) Acts of violence as long as the possessor objects
(1) Whoever voluntarily takes charge of the agency thereto (i.e. he files a case) [NCC 536]
or management of the business or property of (a) Possession cannot be acquired through force
another, without any power from the latter, is or intimidation.
obliged to continue until the termination of the
affair and its incidents, or to require the person Includes forcibly taking away the property
concerned to substitute him, if the owner is in a from another and also when one occupied the
position to do so. property in the property in the absence of
(2) This juridical relation does not arise in either of another, and repels the latter upon his return
these instances:
(a) When the property or business is not (b) Effect on Possession: Acts mentioned do not
neglected or abandoned; constitute true possession. They do not
(b) If in fact the manager has been tacitly interrupt the period of prescription nor affect
authorized by the owner. the rights to the fruits.
Qualifiedly, minors and incapacitated persons [NCC RULES TO SOLVE CONFLICTS OF POSSESSION (NCC 538)
535] General Rule: Possession cannot be recognized in two
(1) Incapacitated – all those who do not have the different personalities, except in cases of co-
capacity to act (insane, lunatic, deaf-mutes who possession by co-possessors without conflict of
claims of interest.
PAGE 89
(3) Accion Reivindicatoria

In case of conflicting possession – preference is given (1) Recovery of possession based on a claim of
to: ownership)
(1) Present possessor or actual possessor (2) An action setting up title and right to
(2) If there are two or more possessors, the one possession
longer in possession (3) Not barred by a judgment in an action for
(3) If the dates of possession are the same, the one forcible entry and unlawful detainer
who presents a title
(4) If all conditions are equal, the thing shall be (4) Action for Replevin
placed in judicial deposit pending determination (a) Possession or ownership for movable property
of possession or ownership through proper
proceedings Rules:
(1) Lawful possessor can employ self-help (NCC 429)
EFFECTS OF POSSESSION (2) To consolidate title by prescription, the
(1) Right to be Protected in His Possession (NCC possession must be under claim of ownership,
539) and it must be peaceful, public and
(2) Entitlement to fruits – possessor in good uninterrupted (UPPO)
faith/bad faith (Art. 544, 549) (3) It is only the conviction of ownership externally
(3) Reimbursement for Expenses—Possessor in Good manifested, which generates ownership.
Faith/Bad Faith (4) Acts of possessory character done by virtue of a
license or mere tolerance by the real owner are
RIGHT TO BE PROTECTED IN HIS POSSESSION (NCC 539) not sufficient and will not confer title by
(1) Every possessor has a right to be prescription or adverse possession.
respected in his possession; if disturbed, (5) The following cannot acquire title by prescription:
possessor has a right to be protected in or (a) Lessees, trustees, pledges, tenants on shares
restored to said possession. or planters and all those who hold in the
(2) Every possessor – includes all kinds of name or representation of another;
possession, from that of an owner to that (b) Mere holders placed in possession of the
of a mere holder, except that which property by the owner, such as agents,
constitutes a crime. employees;
(3) Reason for the rule: To prevent anyone (c) Those holding in a fiduciary character, like
from taking the administration of justice receivers, attorneys, depositaries and
into his own hands. Even the owner antichretic creditors
cannot forcibly eject the possessor, but (d) Co-owner, with regard to common property;
must resort to the courts. Except: When he holds the same adversely
against all of them with notice to them of the
Actions to Recover Possession: exclusive claim of ownership
(1) Forcible entry and Unlawful detainer (Summary (i) Possession of real property presumes
proceedings) possession of the movables therein (NCC
(a) Action by a person deprived of the 542)
possession of any land or building by force, (ii) Each co-owner is deemed to have
intimidation, strategy, threat, or stealth exclusive possession of the part which
(FISTS) at any time within 1 year after such may be allotted to him upon the division,
unlawful deprivation (Rule 70) for the entire period during which the co-
(b) May ask for writ of preliminary mandatory possession lasted.
injunction within 10 days from filing of
complaint in forcible entry (NCC 539). Interruption in the possession of the
(c) The same writ is available in unlawful whole or a part of a thing possessed in
detainer actions upon appeal. (Art. 1674) common shall be to the prejudice of all
(2) Accion Publiciana the possessors. (NCC 543)
(1) Based on superior right of possession, no
ownership ENTITLEMENT TO FRUITS – POSSESSOR IN GOOD
(2) Action for the recovery of possession of real FAITH/BAD FAITH (ART. 544, 549)
property upon mere allegation and proof of a (1) Possessor in good faith is entitled to the fruits
better title received before the possession is legally
interrupted
PAGE 90
(2) Natural and industrial fruits are considered When fruits are insufficient
received from the time they are gathered or There should only be reimbursement of expenses;
severed but each possessor should suffer a proportionate
(3) Civil fruits are deemed to accrue daily and belong reduction due to the insufficiency of the harvest.
to the possessor in good faith in that proportion
REIMBURSEMENT FOR EXPENSES—POSSESSOR IN GOOD
Provision is based on the following reasons of equity FAITH/BAD FAITH (NCC 546-552)
(1) The fruits received are generally used for the Necessary Expenses
consumption and livelihood of the possessor, and (1) Imposed by the thing itself and have no relation
his life and expenses may have been regulated in to the desire or purpose of the possessor
view of such fruits (2) They are the “cost of living” for the thing and
(2) The owner has been negligent in not discovering must be reimbursed to the one who paid them,
or contesting the possession of the possessor; it irrespective of GF or BF.
would be unjust after the possessor has been (a) Only the possessor in GF may retain the thing
thus allowed to rely on the efficacy of the title, to until he has been reimbursed therefor
require him to return the fruits he has received on (3) Those imposed for the preservation of the thing.
the basis of that title. They are not considered improvements; they do
(3) Between the owner, who has abandoned his not increase the value of the thing, but merely
property and left it unproductive, and the prevent them from becoming useless.
possessor, who has contributed to the social
wealth, by the fruits he has produced, the law Useful Expenses
leans toward the latter (1) Incurred to give greater utility or productivity to
the thing
Right of the possessor in good faith (2) e.g. Wall surrounding an estate, an irrigation
Only limited to the fruits of the thing. He must restore system, planting in an uncultivated land, a
the fruits received from the time such good faith fishpond, an elevator in the building, electric
ceased. He has no rights to the objects which do not lighting system
constitute fruits. (3) They are reimbursed only to the possessor in GF
as a compensation or reward for him. Possessor
Legal interruption of possession in good faith in BF cannot recover such expenses
Takes place when an action is filed against him— (4) If the useful improvements can be removed
from the time he learns of the complaint, from the without damage to the principal thing, the
time he is summoned to the trial. possessor in good faith may remove them, unless
the person who recovers the possession refunds
When good faith ceases (NCC 545) the expenses or pays the increase in value which
(1) If at the time the good faith ceases, there should the thing may have acquired by reason thereof
be any natural or industrial fruits, the possessor
shall have a right to a part of the expenses of Expenses for Luxury
cultivation, and to a part of the net harvest, both (1) They do not affect the existence or the substance
in proportion to the time of the possession. of the thing itself, but only the comfort,
(2) The charges divided on the same basis by the two convenience or enjoyment of the possessor.
possessors. (2) They are not the subject of reimbursement,
(a) “Charges” – Those which are incurred, not on because the law does not compensate personal
the thing itself but because of it (e.g. taxes, whims or caprices.
contributions in favor of the government) (3) e.g. Opening of a garden, placing fountains and
(3) The owner of the thing may give the possessor in statues in it, adorning the ceilings with paintings,
good faith the right to finish the cultivation and and the walls with reliefs
gathering of the growing fruits, as an indemnity
for his part of the expenses of cultivation and the Useful Expenses Expenses for Luxury
net proceeds.
(a) The possessor in good faith who refuses to Those which increased
Those which merely
accept this concession shall lose the right to the income derived from
embellished the thing
be indemnified in any other manner. the thing
Result: Increase in the Result: Benefit or
products, either advantage is only for the
absolutely, or because of convenience of definite
PAGE 91
Useful Expenses Expenses for Luxury Possessor in GF Possessor in BF

greater facilities for possessors and to a part of the net (549)
producing them harvest, in proportion to
the time of the
Includes expenses possession.
resulting in real benefit
or advantage to the Indemnity may be, at the
thing owner’s option,
Result: Benefit or The utility is for the 1. In money, OR
advantage is only for the possessor or particular 2. By allowing full
convenience of definite persons alone and is cultivation and gathering
possessors therefore accidental. of the fruits (545)
Charges
Possessor In Bad Faith Must share with the
(1) Reimburse the fruits received and those which legitimate possessor, in
the legitimate possessor could have received Same as with GF (545)
proportion to the time of
(2) Has a right only to the reimbursement of the possession (545)
necessary expenses and the production,
gathering, and preservation of fruits Necessary Expenses
(3) Does not have right to reimbursement of Right to reimbursement
expenses for luxury but may remove them as long and retention in the Reimbursement only
as the principal thing suffers no injury, or may sell meantime (546) (546)
them to the owner.
(4) Liable for deterioration or loss in every case, even
if caused by a fortuitous event Useful Expenses
a. As opposed to a possessor in good faith, not Right of retention until
liable for the deterioration or loss, except reimbursed; Owner’s
when proved that he has acted with option to reimburse him
fraudulent intent or negligence, after the either for expenses or for
judicial summons increase in value which
the thing may have
Note: No right to
acquired (546)
(1) Costs of litigation over the property shall be reimbursement and no
borne by every possessor. (NCC 550) right of removal (547)
Limited right of removal
(2) Improvements caused by nature or time shall – should not damage
always inure to the benefit of the person who has principal and owner does
succeeded in recovering possession (NCC 551) not exercise option of
(1) Includes all the natural accessions referred to paying the expenses or
by articles 457-465, and all those which do increase in value (547)
not depend upon the will of the possessor.
(e.g. widening of the streets, rising of Ornamental Expenses
fountains of fresh or mineral water, increase Limited right of removal Limited right of removal
of foliage of trees) (548) (549)
Deterioration or Loss
Possessor in GF Possessor in BF
No liability unless due to
Fruits Received fraud or negligence after Liable in every case (552)
Entitled to the fruits becoming in BF (552)
Must reimburse the
while possession is in GF Costs of Litigation
legitimate possessor
and before legal
(549) Bears cost (550) Bears cost (550)
interruption (544)
Pending Fruits
Entitled to part of the Must reimburse the
expenses of cultivation, legitimate possessor
PAGE 92
LOSS OR UNLAWFUL DEPRIVATION OF A The finder and the owner shall be obliged, as the
MOVABLE case may be, to reimburse the expenses.
POSSESSION OF MOVABLE ACQUIRED IN GOOD FAITH (IN (6) If the owner should appear in time, he shall be
CONCEPT OF OWNER) IS EQUIVALENT TO TITLE (NCC 559) obliged to pay, as a reward to the finder, one-
(1) Possessor has actual title which is defeasible only tenth of the sum or of the price of the thing found
by true owner. DISTINGUISHED FROM VOIDABLE TITLE (NCC 1506)
(1) Seller of goods with voidable title not avoided at
Requisites of Title the time of the sale: buyer acquires a good title to
(a) Possession in GF the goods, provided he buys them in good faith,
(b) The owner has voluntarily parted with the for value, and without notice of the seller's defect
possession of the thing of title
(c) The possession is in the concept of an owner (2) A movable lost or which the owner has been
unlawfully deprived acquired by a possessor in
(2) Nevertheless, one who has lost any movable or good faith at a public sale - the owner can always
has been unlawfully deprived thereof may recover recover the movable provided he reimburses the
it from the person in possession price paid.
When the owner can recover EFFECTS OF POSSESSION

(a) Has lost the thing EFFECTS OF POSSESSION IN THE CONCEPT OF OWNER
(b) Has been unlawfully deprived thereof Possession may lapse and ripen into full ownership
(3) If the current possessor has acquired it in good General Rule: Presumption of just title and cannot be
faith at a public sale, owner must reimburse the obliged to show or prove it (NCC 541)
price paid (1) Basis: Possession is presumed ownership, unless
the contrary is proved. This presumption is prima
PERIOD TO RECOVER (NCC 1140, 1132, 1133) facie and it prevails until contrary is proved.
(1) Actions to recover movables prescribe 8 years (2) Just title – that which is legally sufficient to
from the time the possession thereof is lost, transfer the ownership or the real right to which it
unless the possessor has acquired the ownership relates
by prescription for a lesser period (3) For the purposes of prescription, there is just title
(2) Ownership of movables prescribes through when the adverse claimant came into possession
uninterrupted possession for 4 years in good of the property through one of the modes
faith. recognized by law for the acquisition of
(3) Ownership of personal property also prescribes ownership or other real rights, but the grantor
through uninterrupted possession for 8 years, was not the owner or could not transmit any
without need of any other condition. right. (NCC 1129)
(4) Movables possessed through a crime can never
be acquired through prescription Exception: For the purposes of prescription, just title
must be proved; it is never presumed (NCC 1131)
FINDER OF LOST MOVABLE (NCC 719-720) (1) Possessor may bring all actions necessary to
(1) Whoever finds a movable, which is not a treasure, protect his possession except reivindicatoria
must return it to its previous possessor. (2) May employ self-help under Art. 429
(2) If the previous possessor is unknown, the finder (3) Possessor may ask for inscription of such real
shall immediately deposit it with the mayor of the right of possession in the registry of property
city or municipality where the finding has taken (4) Has right to the fruits and reimbursement of
place. expenses (assuming he is possessor in good faith)
(3) The finding shall be publicly announced by the (5) Upon recovery of possession which he was
mayor for two consecutive weeks in the way he unlawfully deprived of, may demand fruits and
deems best. damages
(4) If the movable cannot be kept without (6) Generally, he can do on the things possessed
deterioration, or without expenses which everything that the law authorizes the owner to
considerably diminish its value, it shall be sold at do until he is ousted by one who has a better
public auction eight days after the publication. right.
(5) Six months from the publication having elapsed (7) Possession in good faith and possession in bad
without the owner having appeared, the thing faith (Art. 528)
found, or its value, shall be awarded to the finder.
PAGE 93
RIGHTS OF POSSESSOR (g) In all these cases, the period of the

PRESUMPTION IN FAVOR OF THE POSSESSOR—FOR interruption shall be counted for the
ACQUISITIVE PRESCRIPTION prescription
(1) Of good faith until contrary is proved (NCC 527)
(a) Presumption is only juris tantum because (5) Other presumptions with respect to specific
possession is the outward sign of ownership. properties of property rights
Unless such proof of bad faith is presented, (a) Of extension of possession of real property to
the possessor will be held to be in good faith. all movables contained therein so long as in is
(b) So long as the possessor is not actually aware not shown that they should be excluded
of any defect invalidating his title, he is (b) Non-interruption of possession of hereditary
deemed a possessor in good faith. property (NCC 553)
(i) Possession of hereditary property is
(2) Of continuity of initial good faith in which deemed transmitted to the heir without
possession was commenced; possession in good interruption and from the moment of the
faith does not lose this character except in case death of the decedent
and from the moment possessor became aware or (c) Of just title in favor of possessor in concept of
is not unaware of improper or wrongful possession owner (NCC 541)
(NCC 528)
(a) Good faith ceases from the date of the LOSS/TERMINATION OF POSSESSION (NCC 555)
summons to appear at the trial (1) By the abandonment of the thing;
(b) Good faith ceases when there is: (2) By an assignment made to another either by
(i) Extraneous evidence onerous or gratuitous title;
(ii) Suit for recovery of the property by the (3) By the destruction or total loss of the thing, or
true owner because it goes out of commerce;
(4) By the possession of another, subject to the
(3) Of enjoyment of possession in the same character provisions of Article 537, if the new possession
in which possession was required until contrary is has lasted longer than one year. But the real
proved (NCC 529) right of possession is not lost till after the lapse of
ten years.
(4) Of non-interruption of possession in favor of
present possessor who proves possession at a ABANDONMENT
previous time until the contrary is proved (NCC (1) Includes the giving up of possession, and not
554) necessarily of ownership by every possessor.
(a) Possession is interrupted for the purposes of (2) It is the opposite of occupation. It consists of the
prescription, naturally or civilly. (NCC 1120) voluntary renunciation of all the rights which the
(b) Possession is naturally interrupted when person may have in a thing, with intent to lose
through any cause it should cease for more such a thing. To be effective, it is necessary that it
than one year (NCC 1121) be made by a possessor in the concept of an
(c) Old possession is not revived if a new owner.
possession should be exercised by the same (3) It must be clearly appear that the spes
adverse claimant (NCC 1121) recuperandi is gone and the animus revertendi is
(d) If the natural interruption is for only one year finally given up.
or less, the time elapsed shall be counted in
favor of the prescription (NCC 1122) ASSIGNMENT, EITHER ONEROUS OR GRATUITOUS
(e) Civil interruption is produced by judicial Complete transmission of ownership rights to
summons to the possessor. (NCC 1123) another person, gratuitously or onerously
(f) Judicial summons shall be deemed not to
have been issued and shall not give rise to POSSESSION BY ANOTHER; IF POSSESSION HAS LASTED
interruption (NCC 1124): LONGER THAN ONE YEAR; REAL RIGHT OF POSSESSION
(i) If it should be void for lack of legal NOT LOST AFTER 10 YEARS - (SUBJECT TO NCC 537)
solemnities; (1) Acts merely tolerated, and those executed
(ii) If the plaintiff should desist from the clandestinely and without the knowledge of the
complaint or should allow the possessor of a thing, or by violence, do not affect
proceedings to lapse; possession.
(iii) If the possessor should be absolved from (2) Possession that is lost here refers only to
the complaint possession as a fact (de facto), not the legal right
PAGE 94
of possession (de jure). It is the possession that (3) Unproductive things

the new possessor acquires. e.g. sterile or absolutely unproductive land, or
(3) Real right of possession is lost only after 10 years. things for mere pleasure, such as promenades,
(4) After one year, the actions for forcible entry and statues or paintings, even if they do not produce
unlawful detainer can no longer be brought. But any utility.
accion publiciana may still be instituted to
recover possession de jure CHARACTERISTICS
RULES FOR LOSS OF MOVABLES (1) It is a real right
(1) The possession of movables is not deemed lost so (2) Of temporary duration
long as they remain under the control of the (3) To derive all advantages from the thing due to
possessor, even though for the time being he may normal exploitation
not know their whereabouts. (NCC 556)
(2) Control – judicial control or right, or that the NATURAL CHARACTERISTICS
thing remains in one’s patrimony (1) Includes only the right to use (jus utendi) and the
(3) Wild animals are possessed only while they are right to the fruits (jus fruendi)
under one's control (NCC 560) (2) Usufructuary must preserve the form or
(a) Domesticated or tamed animals - if they retain substance of the thing
the habit of returning to the premises of the (a) Preservation is a natural requisite, not
possessor essential because the title constituting it or the
law may provide otherwise
Kinds of Animals (b) Reason for preserving form and substance –
(1) Wild—those which live naturally independent of (i) To prevent extraordinary exploitation;
man (ii) To prevent abuse, which is frequent;
(2) Domesticated—those which, being wild by nature, (iii) To prevent impairment.
have become accustomed to recognize the (c) Exception: In an abnormal usufruct, alteration
authority of man. When they observe this custom, is allowed
they are placed in the same category as domestic (3) Usufruct is extinguished by the death of the
and when they lose it, they are considered as usufructuary
wild. (a) Natural because a contrary intention may
(3) Domestic or Tame—those which are born and prevail
reared ordinarily under the control and care of
man; they are under the ownership of man, and CLASSIFICATION
do not become res nullius unless they are BY ORIGIN
abandoned. (1) Voluntary: created by the will of private persons
(a) By act inter vivos – such as contracts and
donations
Usufruct (i) By alienation of the usufruct
(ii) By retention of the usufruct
(iii) Where a usufruct is constituted inter
CONCEPT (NCC 562): vivos and for valuable consideration, the
Usufruct gives a right to enjoy the property of contract is unenforceable unless in
another with the obligation of preserving its form writing
and substance, unless the title constituting it or the (b) By act mortis causa – such as testament
law otherwise provides
(2) Legal: as provided by law
OBJECTS OF USUFRUCT Usufruct of parents over the property of
(1) Independent Rights unemancipated children (now limited to the
(a) A servitude which is dependent on the collective daily needs of the family, FC 26)
tenement to which it attaches cannot be the
object of usufruct (3) Mixed: created both by law and the acts of
persons
(2) Things (a) The rights and duties of the usufructuary
(a) Non-consumable things provided by law may be modified or
(b) Consumable things, but only as to their value eliminated by the parties.
if appraised, or on an equal quantity and (b) The title constituting the usufruct may validly
quality if they were not appraised authorize the usufructuary to alienate the
thing itself held in usufruct.
PAGE 95
(i) If the usufructuary is authorized to the return of the value or of the things of the
alienate the thing in case of necessity, it same quantity and quality (as if converted
is the usufructuary who determines the into a simple loan)
question of necessity.
BY PERSON ENJOYING RIGHT OF USUFRUCT BY THE EXTENT OF THE USUFRUCT

(1) Simple: only one usufructuary enjoys the property As to the fruits
(2) Multiple: several usufructuaries enjoy the (1) Total: all consumed by the usufruct
property (2) Partial: only on certain aspects of the usufruct’s
(a) Simultaneous: at the same time fruits
(b) Successive: one after the other
As to object
Limitations on Successive Usufruct (1) Singular: only on particular property of the owner
(1) If usufruct is by donation, ALL donees must be (2) Universal: pertains to the whole property;
alive. (NCC 756) A universal usufructuary must pay the debts of
(2) Fiduciary or first heir and the second heir must be the naked owner, if stipulated. Article 758 and
alive at the time of the death of the testator. 759 on donations apply.
(NCC 863)
(3) If by testamentary succession, there must be only NCC 758: When the donation imposes upon the
2 successive usufructuaries, and both must be donee the obligation to pay the debts of the
alive or at least already conceived at the time of donor, if the clause does not contain any
the testator’s death. (NCC 869) declaration to the contrary, the former is
understood to be liable to pay only the debts
BY OBJECT OF USUFRUCT which appear to have been previously contracted.
Usufruct may be constituted on the whole or a part In no case shall the donee be responsible for the
of the fruits of the thing or on a right, provided it is debts exceeding the value of the property
not strictly personal or intransmissible (NCC 564) donated, unless a contrary intention clearly
appears.
Rights
(1) Must not be strictly personal or intransmissible. NCC 759: There being no stipulation regarding
(2) Usufruct over a real right is by itself a real right. the payment of debts, the donee shall be
(a) Right to receive present or future support responsible therefor only when the donation has
cannot be the object of the usufruct. been made in fraud of creditors.
Things The donation is always presumed to be in fraud

(1) Normal: involves non-consummable things where of creditors, when at the time thereof the donor
the form and substance are preserved did not reserve sufficient property to pay his
(2) Abnormal or irregular: when the usufruct includes debts prior to the donation.
things which cannot be used without being
consumed BY THE TERMS OF THE USUFRUCT
(a) The usufructuary has right to make use of (1) Pure: no terms or conditions
them under the obligation of paying their (2) Conditional: either suspensive or resolutory
appraised value at the termination of the (3) With a term or period
usufruct, if they were appraised when (a) Ex die: from a certain day
delivered. (b) In diem: up to a certain day
(b) In case they were not appraised, he has the (c) Ex die in diem: from a certain day up to a
right to return the same quantity and quality, certain day
or pay their current price at the time the
usufruct ceases (NCC 574)
(c) In reality, the usufruct is not upon the
consumable things themselves, but upon the
sum representing their value or upon a
quantity of things of the same kind and
quality.
(d) The usufructuary, in effect, becomes the
owner of the things in usufruct, while the
grantor becomes a mere creditor entitled to
PAGE 96
RIGHTS AND OBLIGATIONS OF USUFRUCTUARY ungathered for no fault imputable to him, but
because of malice or an act imputable to the naked
rd
RIGHTS owner or a 3 person, or even due to force majeure
As to Thing and Its Fruits or fortuitous event.
Right to enjoy the property to the same extent as the
owner, but only with respect to its use and the receipt of Right to civil fruits
its fruits. (1) Civil fruits – deemed to accrue daily, and belong
(1) Usufructuary cannot extract products which do to the usufructuary in proportion to the time the
not constitute fruits because he is bound to usufruct may last.
preserve the form and substance of the thing. (2) Whenever a usufruct is constituted on the right to
(2) Usufructuary rights may be transferred, assigned receive a rent or periodical pension, whether in
or otherwise disposed of by the usufructuary. money or in fruits, or in the interest on bonds or
(3) Not exempt from execution and can be sold at securities payable to bearer, each payment due
public auction. shall be considered as the proceeds or fruits of
such right
As to hidden treasure, usufructuary is considered a (3) Whenever it consists in the enjoyment of benefits
stranger without a right to a share, unless he is also the accruing from a participation in any industrial or
finder of the treasure commercial enterprise, the date of the
(1) With respect to hidden treasure which may be distribution of which is not fixed, such benefits
found on the land or tenement, he shall be shall have the same character
considered a stranger (a) In either case they shall be distributed as civil
(2) Hidden treasure belongs to the owner of the fruits
land, building, or other property on which it is
found. Right to enjoy any increase through accessions and
(3) Nevertheless, when the discovery is made on the servitudes, including products of hunting and fishing
property of another, or of the State or any of its
subdivisions, and by chance, one-half thereof Right to lease the thing
shall be allowed to the finder. General rule: The usufructuary may lease the thing to
another but this shall terminate upon the expiration
Right to fruits pending at the beginning of usufruct of the usufruct, saving leases of rural lands, which
Fruits pending at the Fruits pending at the shall be considered as subsisting during the
beginning of the usufruct beginning of the usufruct agricultural year
Belong to the Belong to the naked Exceptions:
usufructuary owner (1) Legal usufructs cannot be leased.
(2) Caucion juratoria (lease would show that the
Without need to The owner shall usufructuary does not need the property badly)
reimburse the expenses to reimburse to the
the owners usufructuary ordinary Effect of the transfer of right:
cultivation expenses (1) The transfer or lease of the usufruct does NOT
from the proceeds of the terminate the relation of the usufructuary with
fruits (not to exceed the the owner
value of the fruits) (2) Death of the transferee does not terminate the
Without prejudice to the Rights of innocent 3
rd usufruct but it terminates upon the death of the
rd
right of 3 persons e.g. if parties should not be usufructuary who made the transfer.
the fruits had been prejudiced.
planted by a possessor in Rules as to Lease
good faith, the pending (1) The property in usufruct may be leased even
crop expenses and without the consent of the owner.
charges shall be prorated (2) The lease should be for the same period as the
between said possessor usufruct.
and the usufructuary (a) EXCEPT: leases of rural lands continues for
the remainder of the agricultural year
(b) A lease executed by the usufructuary before
Fruits already matured at the time of the termination the termination of the usufruct and subsisting
of the usufruct, which ordinarily would have already after the termination of the usufruct must be
been gathered by the usufructuary, may remain
PAGE 97
respected, but the rents for the remaining usufruct, he has the right to do so, and the owner
period will belong to the owner. cannot prevent him from doing so even upon
(c) If the usufructuary has leased the lands or payment of their value.
tenements given in usufruct, and the usufruct (3) This right does not involve an obligation – if the
should expire before the termination of the usufructuary does not wish to exercise it, he
lease, he or his heirs and successors shall cannot be compelled by the owner to remove the
receive only the proportionate share of the improvements.
rent that must be paid by the lessee. (Art. 568, (4) This right to remove improvements can be
Civil Code) enforced only against the owner, not against a
(3) It is the usufructuary and not the naked owner purchaser in good faith to whom a clean title has
who has the right to choose the tenant. been issued.
(a) As corollary to the right of the usufructuary to (5) Usufructuary may set off the improvements
all the rent, to choose the tenant, and to fix against any damage to the property
the amount of the rent, she necessarily has (a) The improvements should have increased the
the right to choose herself as the tenant value of the property, and that the damages
thereof; and, as long as the obligations she are imputable to the usufructuary.
had assumed towards the owner are fulfilled. (b) Increase in value and the amount of damages
(Fabie v. Gutierrez David) are set off against each other.
(4) A lease executed by the owner before the (c) If the damages exceed the increase in value,
creation of the usufruct is not extinguished by the difference should be paid by the
such usufruct. usufructuary as indemnity.
(d) If the increase in value exceeds the damages,
Limitations on the Right to Lease the Property and the improvements are of such nature that
(1) Usufructuary cannot alienate a thing in usufruct they can be removed without injury to the
(a) Cannot alienate or dispose of the objects thing in usufruct, the settlement of the
included in the usufruct difference must be agreed upon by the
(b) Cannot renounce a servitude parties.
(c) Cannot mortgage or pledge a thing (e) If the improvements cannot be removed
(d) EXCEPT: without injury, the excess in value accrues to
(i) When the right of usufruct is converted the owner.
into the right of ownership (6) Registration of improvements – to protect
rd
(ii) When the things are consumable (574); usufructuary against 3 persons
(iii) When the things by their nature are
intended for sale, such as the As to the Legal Right of Usufruct Itself
merchandise in a commercial Right to mortgage right of usufruct
establishment; and (1) The usufructuary may alienate his right of
(iv) When the things, whatever their nature, usufruct, even by a gratuitous title; but all the
are delivered under appraisal as contracts he may enter into as such usufructuary
equivalent to their sale shall terminate upon the expiration of the
(2) Future crops may be sold but such sale would be usufruct [Art. 572]
void if not ratified by the owner. (2) Does not include parental usufruct because of
(a) The buyer’s remedy is to recover from the personal and family considerations.
usufructuary.
(3) Only voluntary usufruct can be alienated. Right to alienate the usufruct except in purely personal
(4) The usufructuary-lessor is liable for the act of the usufructs or when title constituting it prohibits the
substitute. same
(a) A usufructuary who alienates or leases his Parental usufruct is inalienable
right of usufruct shall answer for any damage
which the things in usufruct may suffer OBLIGATIONS
through the fault or negligence of the person At the Beginning of Usufruct or Before Exercising the
who substitutes him. (Art. 590, Civil Code) Usufruct
(1) To make, after notice to the owner or his
Right to improve the thing, but improvement inures legitimate representative, an inventory of all the
to the benefit of the naked owner property, which shall contain an appraisal of the
(1) Usufructuary is not entitled to reimbursement. movables and a description of the condition of
(2) Whenever the usufructuary can remove the the immovables;
improvements without injury to the property in
PAGE 98
(2) To give security, binding himself to fulfill the (iv) Sworn promise
obligations imposed upon him in accordance with (c) A usufructuary under this can neither alienate
this Chapter. his right nor lease the property, for that would
mean that he does not need the dwelling or
Note: These requirements are NOT conditions the implements and furniture.
precedent to the commencement of the right of the
usufructuary but merely to the entry upon the (4) Effect of filing a bond
possession and enjoyment of the property. (a) Retroactivity: upon giving the security, the
usufructuary will be entitled to all the benefits
To Make An Inventory: accruing since the time when he should have
(1) Requisites begun to receive them.
(a) Immovables must be described (5) Effect of failure to give bond (NCC 586)
(b) Movables must be appraised because they are (a) The owner may demand that the immovables
easily lost or deteriorated. be placed under administration;
(2) Concurrence of the owner in the making of the (i) That the movables be sold;
inventory (ii) That the public bonds, instruments of
(3) Expenses for the making of the inventory are credit payable to order or to bearer be
borne by the usufructuary converted into registered certificates or
(4) Inventory may be in a private document, except deposited in a bank or public institution;
when immovables are involved (a public (iii) That the capital or sums in cash and the
rd
instrument is prescribed to affect 3 persons) proceeds of the sale of the movable
(5) Failure to make an inventory does not affect the property be invested in safe securities.
rights of the usufructuary to enjoy the property (b) Owner may, until the usufructuary gives
and its fruits. security, retain in his possession the property
(a) A prima facie presumption arises that the in usufruct as administrator, subject to the
property was received by the usufructuary in obligation to deliver to the usufructuary the
good condition net proceeds, after deducting the sums which
(b) Even if he is already in possession, he may still may be agreed upon or judicially allowed him
be required to make an inventory. for such administration.
(6) Exception to the requirement of inventory
(a) When no one will be injured , the usufructuary During the Usufruct
may be excused from this obligation (1) To take care of the thing like a good father of a
family
To give a bond for the faithful performance of duties as (2) To undertake ordinary repairs
usufructuary: (3) To notify owner of need to undertake
(1) Any kind of sufficient security is allowed, e.g. extraordinary repairs
cash, personal bond, mortgage (4) To pay for annual charges and taxes on the fruits
(2) No bond is required in the following (5) To notify owner of any act detrimental to
(a) No prejudice would result (Art. 585) ownership
(b) Usufruct is reserved by a donor (Art. 584) (6) To shoulder the costs of litigation re usufruct
(i) Gratitude on the donee’s part demands (7) To answer for fault or negligence of alienee,
that the donor be excused from filing the lessee or agent of usufructuary
bond
(c) Title constituting usufruct excused To take care of the thing like a good father of a family
usufructuary (1) When damages are caused to the property by the
(3) If usufructuary takes possession under a caucion fault or negligence of the usufructuary, the naked
juratoria (Art. 587) owner need not wait for the termination of the
(a) The security given may be by a personal bond, usufruct before bringing the action to recover
a pledge, or a mortgage. proper indemnity.
(b) It is only by way of exception that a caucion (2) The bad use of a thing, which causes
juratoria is allowed, and only under the considerable injury, entitles the owner to demand
special circumstances: the delivery and administration of the thing.
(i) Proper court petition (3) The exercise of this remedy does NOT extinguish
(ii) Necessity for delivery of furniture, the usufruct.
implements or house included in the
usufruct
(iii) Approval of the court
PAGE 99
To undertake ordinary repairs (b) The usufructuary who has made the
The usufructuary is obliged to make the ordinary extraordinary repairs necessary for
repairs needed by the thing given in usufruct (NCC preservation is entitled to recover from the
592) owner the increase in value which the
(1) Ordinary repairs: tenement acquired by reason of such works.
(a) Such as are required by the wear and tear due (c) Usufructuary may retain until he is paid.
to the natural use of the thing and are
indispensable for its preservation. To pay for annual charges and taxes on the fruits
(b) Deteriorations or defects arise from the It is well settled that a real tax, being a burden upon
natural use of the thing; the capital, should be paid by the owner of the land
(c) Repairs are necessary for the preservation of and not by a usufructuary. There is no merit in the
the thing. contention of distinguishing public lands into
alienable and indisposable. All properties owned by
(2) The usufructuary is bound to pay only for the the government, without any distinction, are exempt
repairs made during the existence of the usufruct. from taxation. (Board of Assessment Appeals of
(a) If the defects existed already at the time the Zamboanga del Sur v. Samar Mining Company, Inc.)
usufruct began, the obligation to defray the
ordinary repairs falls upon the owner. To notify owner of any act detrimental to ownership
(NCC 601)
(3) If the defects are caused by the ordinary use of
the thing, the usufructuary may exempt himself To shoulder the costs of litigation re usufruct (NCC 602)
from making the repairs by returning to the
owner the fruits received during the time that the To answer for fault or negligence of alienee, lessee or
defects took place. agent of usufructuary (NCC 590)
The usufructuary is made liable for the acts of the
Except: When the ordinary repairs are due to substitute. While the substitute answers to the
defects caused by the fault of the usufructuary usufructuary, the usufructuary answers to the naked
owner.
(4) If the usufructuary fails to make the repairs even
after demand, the owner may make them at the At the Time of the Termination of the Usufruct
expense of the usufructuary To deliver the thing in usufruct to the owner in the
condition in which he has received it, after
To notify owner of need to undertake extraordinary undertaking ordinary repairs
repairs
(1) Extraordinary repairs Exception: abnormal usufruct – return the thing of
(a) Those caused by exceptional circumstances, same kind, quantity and quality; if with appraised
whether or not they are necessary for the value, must return value appraised
preservation of the thing;
(b) Those caused by the natural use of the thing, SPECIAL CASES OF USUFRUCT
but are not necessary for its preservation. USUFRUCT OVER A PENSION OR PERIODICAL INCOME (NCC
570)
(2) General Rule: Naked owner must make the (1) Each payment due shall be considered as the
extraordinary repairs proceeds or fruits of such right
(a) Usufructuary obliged to pay legal interest on (2) Shall be distributed as civil fruits
the amount while usufruct lasts
USUFRUCT OF PROPERTY OWNED IN COMMON (NCC 582)
(3) If the extraordinary repairs are indispensable, and (1) The usufructuary takes the place of the owner as
the naked owner fails to undertake them, the to:
usufructuary may make such repairs (a) Management;
(a) Requisites: (b) Fruits; and
(i) There must be due notification to the (c) Interest
naked owner of the urgency – if it is not (2) Effect of partition:
urgent, there is no obligation to give (a) The right of the usufructuary is not affected by
notice. the division of the property in usufruct among
(ii) The naked owner failed to make them the co-owners.
(iii) The repair is needed for preservation (b) After partition, the usufruct is transferred to
the part allotted to the co-owner
PAGE 100
USUFRUCT CONSTITUTED ON A FLOCK OR HERD OF Exceptions:

LIVESTOCK (NCC 591) (1) When it is so stipulated; in which case the
(1) On sterile stock: same rules on consumable usufructuary shall be liable for the debt specified.
property govern (i.e. replacement upon (2) If there is no specification, he is liable only for
termination) debts incurred by the owner before the usufruct
(2) On fruitful stock was constituted.
(a) Must replace ordinary losses of the stock with (3) When the usufruct is constituted in fraud of
the young if: creditors
(i) Some animals die from natural causes
(ii) Some animals are lost due to rapacity of In no case shall the usufructuary be responsible for
beasts of prey debts exceeding the benefits under the usufruct.
(b) NO obligation to replace if: (except when the contrary intention appears)
(i) There is a total loss of animals because
of some unexpected or unnatural loss
(like contagious disease or any other USUFRUCT OVER DETERIORABLE PROPERTY (NCC 753)
uncommon event, provided the (1) The usufructuary shall have the right to make use
usufructuary has no fault); thereof in accordance with the purpose for which
(1) If all perish, the usufructuary should they are intended
deliver the remains to the owner. (2) It is sufficient if the usufructuary returns the
(ii) There is a partial loss things in the condition in which they may have
(1) If a part of the stock perishes, the been found at the time of the expiration of the
usufruct subsists on the remainder. usufruct despite ordinary defects caused by use
and deterioration produced by age and time.
USUFRUCT OVER FRUIT BEARING TREES AND SPROUT AND
WOODLANDS (NCC 575-576) Except: when caused by the usufructuary’s fraud
The usufructuary can: and negligence.
(1) Use dead trunks and those cut off or uprooted by
accident. (3) If usufructuary does not return the things upon
(2) Make usual cuttings that owner used to do. the expiration of the usufruct, he should pay an
(3) Cut the trees that are not useful indemnity equivalent to the value of the things at
the time of such expiration.
USUFRUCT ON A RIGHT OF ACTION (NCC 578)
(1) The action may be instituted in the usufructuary’s USUFRUCT OVER CONSUMABLE PROPERTY (NCC 574)
name. As the owner of the usufruct, he is properly (1) The usufructuary shall have the right to make use
deemed a proper party in interest. of them under the obligation of paying their
(2) If the purpose is the recovery of the property or appraised value at the termination of the
right, he is still required under 578 to obtain the usufruct, if they were appraised when delivered.
naked owner’s authority. (2) If not appraised, he shall have the right to return
(3) If the purpose is to object to or prevent at the same quantity and quality, or pay their
disturbances over the property, no special current price at the time the usufruct ceases.
authority from the naked owner is needed.
RIGHTS OF THE OWNER
USUFRUCT ON MORTGAGED PROPERTY (NCC 600) (1) At the beginning of the usufruct (see obligations of
(1) When the usufruct is universal and some objects usufructuary at the beginning of the usufruct)
are mortgaged, apply Art. 598. (2) During the usufruct
(2) If the usufructuary mortgaged the usufruct (a) Retains title to the thing or property
himself, he is liable to pay his own debt. (b) He may alienate the property: he may not
alter the form or substance of the thing; nor
USUFRUCT OVER AN ENTIRE PATRIMONY (NCC 598) do anything prejudicial to the usufructuary
Applies when: (c) He may construct buildings, make
(1) The usufruct is a universal one improvements and plantings, provided:
(2) And the naked owner – Has debts or is obliged to (1) Value of the usufruct is not impaired
make periodical payments (whether or not there (2) Rights of the usufructuary are not
be known capital) prejudiced
General rule: The usufructuary is not liable for the

owner’s debts.
PAGE 101
EXTINGUISHMENT/TERMINATION (NCC 603) association is dissolved, the usufruct shall be

(1) By the death of the usufructuary, unless a extinguished.
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contrary intention clearly appears; (2) Time that may elapse before a 3 person attains
(2) By the expiration of the period for which it was a certain age [Art. 606, CC]
constituted, or by the fulfillment of any resolutory (a) Usufruct subsists for the number of years
rd
condition provided in the title creating the specified, even if the 3 person should die
usufruct; before the period expired
(3) By merger of the usufruct and ownership in the (b) Unless the usufruct has been expressly
same person; granted only in consideration of the existence
(4) By renunciation of the usufructuary; of the person
(5) By the total loss of the thing in usufruct;
(6) By the termination of the right of the person MERGER OF RIGHTS OF USUFRUCT AND NAKED
constituting the usufruct; OWNERSHIP IN ONE PERSON
(7) By prescription. Illustration: H was the usufructuary of land owned by
X. x dies, leaving in his will, the naked ownership of
DEATH OF USUFRUCTUARY the land to H. the usufruct is extinguished because
Exceptions: now H is both the naked owner and the usufructuary.
(1) In multiple usufructs: it ends at the death of the
last survivor (NCC 611) RENUNCIATION OF USUFRUCT
(a) If simultaneously constituted: all the (1) Waiver: voluntary surrender of the rights of the
usufructuaries must be alive (or at least usufructuary, made by him with intent to
conceived) at the time of constitution. surrender them
(b) If successively constituted: (2) Limitations
(i) If by virtue of donation – all the donees- (a) Must be express: tacit renunciation is not
usufructuaries must be living at the time sufficient
of the donation; (b) Does not need the consent of naked owner
(ii) If by will – there should only be 2 (c) If made in fraud of creditors, waiver may be
successive usufructuaries and both must rescinded by them through action under
have been alive at the time of testator’s Article 1381 (accion pauliana)
death.
EXTINCTION OR LOSS OF PROPERTY (NCC 608 & 608)
(2) If the period is fixed by reference to the life of
Situation Effect
another or there is a resolutory condition
Art. 607
Death does not affect the usufruct and the right If destroyed property is not insured
is transmitted to the heirs of the usufructuary
until the expiration of the term or the fulfillment If the building forms part If the building forms part
of the condition. of an immovable under of an immovable under
usufruct usufruct
(3) When a contrary intention clearly appears If usufruct is on the Usufruct continues over
(a) If the usufructuary dies before the happening building only the land and materials
of a resolutory condition, the usufruct is (plus interests), if owner
extinguished. does not rebuild.
st
(b) 1 view: usufruct is personal and it CANNOT If owner rebuilds,
be extended beyond the lifetime of the usufructuary must allow
usufructuary. (Sanchez Roman and SC) owner to occupy the land
and to make use of
EXPIRATION OF PERIOD OR FULFILLMENT OF RESOLUTORY materials; but the owner
CONDITION IMPOSED ON USUFRUCT BY PERSON must pay interest on the
CONSTITUTING THE USUFRUCT value of both the land
(1) In favor of juridical persons [Art. 605, CC] and the materials.
(a) Usufruct cannot be constituted in favor of a Art. 608
town, corporation, or association for more If destroyed property is insured before termination of the
than fifty year usufruct
(b) If before the expiration of such period the
town is abandoned, or the corporation or When insurance premium If owner rebuilds,
paid by owner and usufruct subsists on new
PAGE 102
(2) If both the naked owner and the usufructuary

Situation Effect
were separately given indemnity, each owns the
usufructuary (par. 1) building. indemnity given to him, the usufruct being totally
If owner does not rebuild extinguished.
interest upon insurance (3) If usufructuary alone was given the indemnity, he
proceeds paid to must give it to the naked owner and compel the
usufructuary latter to return either the interest or to replace
the property. He may even deduct the interest
When the insurance taken Owner entitled to himself, if the naked owner fails to object.
by the naked owner only insurance money (no
because usufructuary interest paid to BAD USE OF THING IN USUFRUCT (NCC 610)
refuses to contribute to usufructuary). Does not extinguish the usufruct but
the premium (par. 2) If he does not rebuild, (1) Entitles the owner to demand delivery and
usufruct continues over administration of the thing.
remaining land and/or (2) The bad use must cause considerable injury not to
owner may pay interest the thing, but to the owner.
on value of both (a) Destruction of a building over which the
materials and land (607). usufruct is constituted (Arts. 607 and 608)
If owner rebuilds,
usufruct does not
continue on new
building, but owner must
pay interest on value of
land and old materials. Easement
When insurance taken by Insurance proceeds goes
usufructuary only to the usufructuary. (1) An encumbrance imposed upon an immovable
depends on value of No obligation to rebuild. for the benefit of another immovable belonging
usufructuary’s insurable Usufruct continues on to a different owner (NCC 613)
interest the land. (2) A real right which burdens a thing with a
Owner has no share in prestation of determinate servitudes for the
insurance proceeds. exclusive enjoyment of one who is NOT an owner
of a tenement
(3) A real right by virtue of which the owner has to
TERMINATION OF RIGHT OF PERSON CONSTITUTING THE
ABSTAIN from doing or ALLOW somebody else
USUFRUCT
to do something to his property for the benefit of
Example: usufructs constituted by a vendee a retro another
terminate upon redemption
Dominant Estate – the immovable in favor of which
PRESCRIPTION
the easement is established
(1) Adverse possession against the owner or the
usufructuary. Servient Estate – the immovable which is subject to
(2) It is not the non-use which extinguishes the the easement
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usufruct by prescription, but the use by a 3
person. CHARACTERISTICS
(3) There can be no prescription as long as the ESSENTIAL FEATURES:
usufructuary receives the rents from the lease of (1) It is a real right – it gives an action in rem or real
the property, or he enjoys the price of the sale of action against any possessor of the servient estate
his right. (a) Owner of the dominant estate can file a real
action for enforcement of right to an
CONDITIONS NOT AFFECTING USUFRUCT easement
EXPROPRIATION OF THING IN USUFRUCT (NCC 609)
(b) Action in rem: an action against the thing
3 Situations itself, instead of against the person.
(1) If naked owner alone was given the indemnity, he
has the option: (2) It is a right enjoyed over another property (jus in re
(a) To replace with equivalent thing aliena) – it cannot exist in one’s property (nulli res
(b) Or to pay to the usufructuary legal interest on sua servit)
the indemnity – requires security given by the When a dominant and servient estate have the
naked owner for the payment of the interest same owner, an easement is extinguished.
PAGE 103
Separate ownership is a prerequisite to an Any alienation of the property covered carries

easement. with it the servitudes affecting said property. But
this affects only the portion of the tenement with
(3) It is a right constituted over an immovable by the easement, meaning the portions unaffected
nature (land and buildings), not over movables. can be alienated without the servitude.
(Article 613)
Immovable: used in its common and not in the (9) It is indivisible (NCC 618)
legal sense, meaning only property immovable (a) If the servient estate is divided between two or
BY NATURE can have easements. more persons, the easement is not modified,
and each of them must bear it on the part
(4) It limits the servient owner’s right of ownership for which corresponds to him
the benefit of the dominant estate. (b) If the dominant estate is divided between two
(a) Right of limited use but no right to possess or more persons, each of them may use the
servient estate. easement in its entirety, without changing the
(b) There exists a limitation on ownership: the place of its use, or making it more
dominant owner is allowed to enjoy or use burdensome in any other way
part of the servient estate, or imposes on the
owner a restriction as to his enjoyment of his (10) It has permanence – once it attaches, whether
own property. used or not, it continues and may be used anytime
(i) Being an abnormal limitation of Perpetual: exists as long as property exists, unless
ownership, it cannot be presumed. it is extinguished.
(5) It creates a relation between tenements CLASSIFICATION

No transfer of ownership, but a relationship is AS TO RECIPIENT OF BENEFITS
created, depending on the easement. (1) Real or Praedial: exists for the benefit of a
particular tenement.
(6) Generally, it may consist in the owner of the (2) Personal: exists for the benefit of persons without
dominant estate demanding that the owner of the a dominant tenement e.g. usus habitatio (right to
servient estate refrain from doing something reside in a house) and operae servorum (right to
(servitus in non faciendo) or that the latter permit the labor of slaves) in Roman Law
that something be done over the servient property
(servitus in patendo), but not in the right to AS TO CAUSE OR ORIGIN
demand that the owner of the servient do (1) Legal: created by law, whether for public use or
something (servitus in faciendo) except if such act for the interest of private persons
is an accessory obligation to a praedial servitude (a) Once requisites are satisfied, the owner of the
(obligation propter rem) dominant estate may ask the Court to declare
Servient owner merely allows something to be that an easement is created.
done to his estate. (b) Example: Natural drainage of waters,
Abutment of land, Aqueduct, etc.
Exceptions: Praedial servitudes (2) Voluntary: Created by the will of the owners of the
(a) Right to place beams in an adjoining wall to estate through contract
support a structure
(b) Right to use another’s wall to support a Note: There is no such thing as a JUDICIAL
building EASEMENT. The Courts cannot create easements,
they can only declare the existence of one, if it exists
(7) It is inherent or inseparable from estate to which by virtue of the law or will of the parties.
they actively or passively belong (NCC 617)
(a) Easements are merely accessory to the AS TO ITS EXERCISE (NCC 615)
tenements, and a “quality thereof.” They (1) Continuous: Use is or may be incessant, without
cannot exist without tenements. the intervention of any man
(b) Easements exist even if they are not expressly (2) Discontinuous: Used at intervals, and dependent
stated or annotated as an encumbrance on upon the acts of man.
the titles.
Note: This classification is important in determining
(8) It is intransmissible – it cannot be alienated prescription: only continuous and apparent
separately from the tenement affected or easements can be created by prescription
benefited
PAGE 104
AS INDICATION OF ITS EXISTENCE may be acquired only by virtue of a title (NCC

(1) Apparent: Made known and continually kept in 622)
view by external signs that reveal the use and (2) The existence of an apparent sign of easement
enjoyment of the same between two estates, established or maintained
(2) Non-apparent: No external indication of their by the owner of both, shall be considered, as a
existence title in order that the easement may continue
actively and passively.
Note: Also important for purposes of prescription
Unless: At the time the ownership of the two
BY THE OBJECT OR OBLIGATION IMPOSED (NCC 616) estates is divided, the contrary should be
(1) Positive: Imposes upon the owner of the servient provided in the title of conveyance of either of
estate the obligation of allowing something to be them, or the sign aforesaid should be removed
done, or doing it himself before the execution of the deed. This provision
(2) Negative: Prohibits the owner of the servient shall also apply in case of the division of a thing
estate from doing something which he could owned in common by two or more persons. (NCC
lawfully do if the easement did not exist. 624)
e.g. Negative Easement of Light and View: An
opening is made on the wall of the dominant DETERMINES HOW TO COMPUTE THE PRESCRIPTIVE
estate, and the easement consists of imposing PERIOD (NCC 621)
upon the servient estate the obligation to not (1) In positive easements, from the day on which the
build anything that would obstruct the light owner of the dominant estate, or the person who
may have made use of the easement,
Note: Prescription starts to run from service of commenced to exercise it upon the servient
notarial prohibition estate
(2) In negative easements, from the day on which the
GENERAL RULES owner of the dominant estate forbade, by an
(1) Nulli res sua servi: No one can have a servitude instrument acknowledged before a notary public,
over one’s own property the owner of the servient estate from executing
(2) Servitus in faciendo consistere nequit: A servitude an act which would be lawful without the
cannot consist in doing easement.
(a) Although some easements seem to impose a
positive prestation upon the owner of the DETERMINES HOW EASEMENT IS LOST BY PRESCRIPTION
servient estate, in reality, the primary [NCC 631 (2)]
obligation is still negative. By nonuser for 10 years
(b) Illustration: Under Article 680: the owner of a (1) With respect to discontinuous easements, this
tree whose branches extend over to a period shall be computed from the day on which
neighboring property is required to cut off the they ceased to be used
extended branches, but the real essence of (2) With respect to continuous easements, from the
the easement is the obligation NOT TO day on which an act contrary to the same took
ALLOW the branches of the tree to extend place
beyond the land
(3) Servitus servitutes esse non potes: There can be no CREATION
servitude over another servitude BY TITLE
(4) A servitude must be exercised civiliter – in a way (1) Continuous and apparent easements may be
least burdensome to the owner of the land acquired by virtue of a title (NCC 620)
(5) A servitude must have a perpetual cause (2) Continuous nonapparent easements, and
discontinuous ones, whether apparent or not, are
RELEVANCE OF CLASSIFICATIONS acquired only by virtue of a title (NCC 622)
DETERMINES WHAT EASEMENTS CAN BE ACQUIRED BY (3) The absence of a document or proof showing the
PRESCRIPTION origin of an easement which cannot be acquired
Continuous and apparent easements may be by prescription may be cured by a deed of
acquired by prescription of 10 years (NCC 620) recognition by the owner of the servient estate or
by a final judgment (NCC 623)
DETERMINES WHAT EASEMENTS CAN BE ACQUIRED BY (4) The existence of an apparent sign of easement
TITLE between two estates, established or maintained
(1) Continuous nonapparent easements, and by the owner of both, shall be considered as a
discontinuous ones, whether apparent or not,
PAGE 105
title in order that the easement may continue established thereon without the consent of both
actively and passively. owners. (NCC 690)
(4) Consent of all co-owners is required to impose an
Unless: at the time the ownership of the two easement on an undivided tenement (NCC 691)
estates is divided, the contrary should be
provided in the title of conveyance of either of RIGHTS AND OBLIGATIONS OF OWNERS OF
them, or the sign aforesaid should be removed DOMINANT AND SERVIENT ESTATES
before the execution of the deed. This provision RIGHT OF DOMINANT ESTATE OWNER
shall also apply in case of the division of a thing (1) To use the easement and exercise all rights
owned in common by two or more persons. (NCC necessary for it (NCC 625, 626)
624) (a) Owner of the dominant estate is granted the
right to use the principal easement, and all
BY LAW (LEGAL EASEMENTS) accessory servitudes
(1) Easements imposed by law have for their object (b) Example: Easement of drawing water carries
either public use or the interest of private persons with it the easement of right of way to the
(NCC 634) place where water is drawn.
(2) These easements may be modified by agreement (c) Limitation: Only for the original immovable
of the interested parties, whenever the law does and the original purpose
not prohibit it or no injury is suffered by a third (2) To do at his expense, all necessary works for the
person (NCC 636) use and preservation of the easement (NCC 627)
Necessity of the works determine extent of such
BY WILL OF THE OWNERS (VOLUNTARY EASEMENTS) works.
Every owner of a tenement or piece of land may (3) In a right of way, to ask for change in width of
establish the easements which he may deem easement sufficient for needs (NCC 651)
suitable and best (NCC 688)
Encarnacion v. Court of Appeals: The Court
BY PRESCRIPTION granted the modification of the easement stating
Continuous and apparent easements may be that under the law, the needs of the dominant
acquired by prescription of 10 years (NCC 620) property ultimately determine the width of the
passage. And these needs may vary from time to
LEGAL EASEMENTS time.
LAW GOVERNING LEGAL EASEMENTS
For public easements OBLIGATIONS OF DOMINANT ESTATE OWNER
(1) Special laws and regulations relating thereto (ex: (1) To use the easement for the benefit of immovable
PD 1067 and PD 705) and in the manner originally established (NCC
(2) By the provisions of Chapter 2, Title VII, Book II, 626)
NCC If established for a particular purpose, the
easement cannot be used for a different one.
For private legal easements However, if established in a general way, without
(1) By agreement of the interested parties whenever specific purpose, the easement can be used for
the law does not prohibit it and no injury is all the needs of the dominant estate.
rd
suffered by a 3 person (2) To notify owner of servient before making repairs
(2) By the provisions of Chapter 2, title VII, Book II and to make repairs in a manner least
inconvenient to servient estate [NCC 627(2)]
VOLUNTARY EASEMENTS
(1) Every owner of a tenement or piece of land may (3) Not to alter easement or render it more
establish thereon the easements which he may burdensome
deem suitable, and in the manner and form (a) Owner of dominant estate may make repairs
which he may deem best (NCC 688) at his expense, but cannot alter the easement
(2) The owner of a thing, the usufruct of which or make it more burdensome. (NCC 627)
belongs to another, may impose, without the (b) Court allowed Central to use the right of way
consent of the usufructuary, any servitudes which to transport the additional sugar. This did not
will not injure the right of usufruct (NCC 689) make the easement more burdensome nor
(3) Whenever the naked ownership belongs to one did it alter it. What is prohibited is extending
person and the beneficial ownership to another, the road or repairing it or depositing
no perpetual voluntary easement may be excavations outside the area. But the
PAGE 106
additional use produced no such effects. KINDS OF LEGAL EASEMENTS

(Valderama v. North Negros) (1) Natural drainage (NCC 637)
(4) To contribute to expenses of works necessary for (2) Riparian banks (NCC 638)
use and preservation of servitude, if there are (3) Drainage of buildings (NCC 674)
several dominant estates, unless he renounces his (4) Dam (NCC 639)
interest (NCC 628) (5) Drawing water (NCC 640-41)
(a) The contribution is in proportion to the (6) Aqueduct (NCC 642-646)
benefits which each may derive from the work (7) Sluice gate (647)
(b) Anyone who does not wish to contribute may (8) Right of way (NCC 649-657)
exempt himself by renouncing the easement (9) Party wall (NCC 658-666)
for the benefit of the others (10) Light and view (NCC 667-681)
(c) If the owner of the servient estate should (11) Intermediate distances (NCC 677-681)
make use of the easement in any manner (12) Nuisance (NCC 682-683)
whatsoever, he shall also be obliged to (13)Lateral and subjacent support (684-687)
contribute to the expenses in the proportion
stated, saving an agreement to the contrary NATURAL DRAINAGE
(1) Lower estates are obliged to receive the waters
RIGHT OF SERVIENT ESTATE OWNER which naturally and without the intervention of
(1) To retain ownership and use of his property man descend from the higher estates (as well as
(a) The owner of the servient estate retains the the stones or earth which they carry with them)
ownership of the portion on which the (2) The owner of the lower estate cannot construct
easement is established, and may use the those which will impede this easement
same in such a manner as not to affect the (3) The owner of the higher estate cannot construct
exercise of the easement. (NCC 630) those which will increase the burden.
(b) Servient owner must respect the use of the
servitude, but retains ownership and use of RIPARIAN BANKS
the same, in a manner not affecting the (1) The banks of rivers and streams are subject
easement. throughout their entire length and within a zone
(2) To change the place and manner of the use of the of 3 meters along their margins, to the easement
easement (NCC 629) of public use in the general interest of navigation,
General rule: The owner of the servient estate floatage, fishing, and salvage.
cannot impair the use of the servitude (2) Estates adjoining the banks of navigable or
Exception: floatable rivers are subject to the easement of
(a) By reason of the place/manner originally towpath for the exclusive service of river
assigned, the use of such easement has navigation and floatage.
become VERY INCONVENIENT to the owner (3) If it be necessary to occupy lands of private
(b) The easement should prevent him from ownership, the proper indemnity shall first be
making any important works, repairs or paid.
improvements thereon
(c) Change must be done at his expense DRAINAGE OF BUILDINGS
(d) He offers another place or manner equally (1) The owner of a building is obliged to construct its
convenient roof or covering in such manner that the rain
(e) In such a way that no injury is caused by the water shall fall on his own land or on a street or
change to the owner of the dominant estate public place, and NOT on the land of his
or to those who may have a right to use the neighbor, even though the adjacent land may
easement belong to two or more persons, one of whom is
(3) To use the easement the owner of the roof.
May use the easement but must also contribute (2) Even if it should fall on his own land, the owner
proportionately to the expenses shall be obliged to collect the water in such a way
as not to cause damage to the adjacent land or
OBLIGATIONS OF SERVIENT ESTATE OWNER tenement.
(1) Not to impair the use of the easement [NCC
629(1)] DAM
(2) To contribute proportionately to expenses if he Whenever it should be necessary to build a dam, and
uses the easement [NCC 628(2)] the person who is to construct it is not the owner of
Unless there is an agreement to the contrary the banks, or lands which must support it, he may
PAGE 107
establish the easement of abutment of a dam, after easement to such owners and to the other
payment of the proper indemnity. irrigators.
DRAWING WATER RIGHT OF WAY

(1) Compulsory easements for drawing water or for Who may demand:
watering animals can be imposed only for (1) The owner of the dominant estate
reasons of public use in favor of a town or village, (2) Any person with the real right to cultivate or use
after payment of the proper indemnity. the immovable e.g. a usufructuary
(2) Easements for drawing water and for watering
animals carry with them the obligation of the Note: a lessee cannot demand such easement,
owners of the servient estates to allow passage to because the lessor is the one bound to maintain
persons and animals to the place where such him in the enjoyment of the property
easements are to be used, and the indemnity
shall include this service. Requisites:
(1) Dominant estate is surrounded by other
AQUEDUCT immovables owned by other persons
(1) Any person who may wish to use upon his own (2) There must absolutely be no access to a public
estate any water of which he can dispose shall highway
have the right to make it flow through the (3) Even if there is access, it is difficult or dangerous
intervening estates, with the obligation to to use, or grossly insufficient
indemnify their owners, as well as the owners of (a) Mere inconvenience in the use of an outlet
the lower estates upon which the waters may does not render the easement a necessity.
filter or descend. (b) An adequate outlet is one that is sufficient for
(2) Person desiring to make use of this right is the purpose and needs of the dominant
obliged to: owner, and can be established at a
(a) To prove that he can dispose of the water and reasonable expense.
that it is sufficient for the use for which it is (c) Does not necessarily have to be by land – an
intended; outlet through a navigable river if suitable to
(b) To show that the proposed right of way is the the needs of the tenement is sufficient.
most convenient and the least onerous to (4) Isolation of the immovable is NOT due to the
third persons; dominant owner’s own acts e.g. if he constructs
(c) To indemnify the owner of the servient estate building to others obstructing the old way
in the manner determined by the laws and (5) Payment of indemnity
regulations (a) If right of way is permanent and continuous
(3) Easement of aqueduct for private interest cannot for the needs of the dominant estate = value
be imposed on buildings, courtyards, annexes, or of the land + amount of damage caused to
outhouses, or on orchards or gardens already the servient estate
existing (b) If right of way is limited to necessary passage
(4) This easement does not prevent the owner of the for cultivation of the estate and for gathering
servient estate from closing or fencing it, or from crops, without permanent way = damage
building over the aqueduct in such manner as not caused by encumbrance.
to cause the latter any damage, or render
necessary repairs and cleanings impossible Rules For Establishing The Right Of Way
(5) This easement is considered as continuous and (1) Must be established at the point LEAST
apparent, even though the flow of the water may prejudicial to the servient estate (NCC 650)
not be continuous, or its use depends upon the (2) Insofar as consistent with the first rule, where the
needs of the dominant estate, or upon a schedule distance from the dominant estate to a public
of alternate days or hours. highway is shortest
(3) The criterion of least prejudice to the servient
SLUICE GATE estate must prevail over the criterion of shortest
(1) Constructing a stop lock or sluice gate in the bed distance although this is a matter of judicial
of the stream from which the water is to be taken, appreciation. While shortest distance may
for the purpose of improving an estate ordinarily imply least prejudice, it is not always so
(2) Such person may demand that the owners of the as when there are permanent structures
banks permit its construction, after payment of obstructing the shortest distance; while on the
damages, including those caused by the new other hand, the longest distance may be free of
PAGE 108
obstructions and the easiest or most convenient Extinguishment

to pass through. (Quimen v. CA) (1) Owner has joined the dominant estate to another
(4) The fact that LGV had other means of egress to abutting the public road
the public highway cannot extinguish the said (2) A new road is opened giving access to the
easement, being voluntary and not compulsory. isolated estate
The free ingress and egress along Mangyan Road (3) Extinguishment is NOT automatic. The owner of
created by the voluntary agreement between the the servient estate must ask for such
parties is thus legally demandable with the extinguishment
corresponding duty on the servient estate not to (4) Indemnity paid to the servient owner must be
obstruct the same. (La Vista Association v. CA) returned:
(5) Width of the easement shall be that which is (a) If easement is permanent: value of the land
sufficient for the needs of the dominant estate must be returned
(6) Easement may be changed from time to time (b) If easement is temporary: nothing to be
depending upon the needs of the dominant returned
tenement
(7) The width of the easement of right of way shall Special Rights Of Way
be that which is sufficient for the needs of the (1) Right of way to carry materials for the
dominant estate, and may accordingly be construction, repair, improvement, alteration or
changed from time to time. (NCC 651) beautification of a building through the estate of
(8) Necessary repairs for a permanent right of way another
shall be made by the DOMINANT OWNER. (2) Right of way to raise on another’s land
(9) A proportionate share of taxes shall be scaffolding or other objects necessary for the
reimbursed by the dominant owner to the work
proprietor of the servient estate (a) If it be indispensable for the construction,
(a) If the right of way is permanent, the necessary repair, improvement, alteration or
repairs shall be made by the owner of the beautification of a building, to carry materials
dominant estate. A proportionate share of the through the estate of another, or to raise
taxes shall be reimbursed by said owner to therein scaffolding or other objects necessary
the proprietor of the servient estate (NCC for the work, the owner of such estate shall be
654) obliged to permit the act, after receiving
(10) In cases where the dominant estate needing the payment of the proper indemnity for the
right of way is acquired by sale, exchange or damage caused him. (NCC 656)
partition and the Estate is surrounded by other (3) Right of way for the passage of livestock known
estates owned by the vendor, exchanger or co- as animal path, animal trail, watering places,
owner resting places, animal folds (NCC 657)
(11) Vendor, exchanger or co-owner shall grant the (a) Easements of the right of way for the passage
right of way WITHOUT INDEMNITY of livestock known as animal path, animal
(a) Granting the servitude without indemnity is a trail or any other, and those for watering
tacit condition of the sale, exchange or places, resting places and animal folds, shall
partition: each party receives something be governed by the ordinances and
(12) Donor (simple donation) must still be regulations relating thereto, and, in the
indemnified for right of way absence thereof, by the usages and customs
(a) Grantor receives nothing from the grantee, of the place.
therefore no implied condition as to a right of (b) Without prejudice to rights legally acquired,
way is constituted the animal path shall not exceed in any case
(13)If the land of the grantor is the one which the width of 75 meters, and the animal trail
becomes isolated, he may demand right of way that of 37 meters and 50 centimeters.
after paying an indemnity (c) Whenever it is necessary to establish a
(a) Whenever a piece of land acquired by sale, compulsory easement of the right of way or
exchange or partition, is surrounded by other for a watering place for animals, the
estates of the vendor, exchanger, or co-owner, provisions of this Section and those of Articles
he shall be obliged to grant a right of way 640 and 641 shall be observed. In this case
without indemnity. In case of a simple the width shall not exceed 10 meters
donation, the donor shall be indemnified by
the donee for the establishment of the right of PARTY WALL
way. (NCC 652) Refers to all those mass of rights and obligations
emanating from the existence and common
PAGE 109
enjoyment of wall, fence, enclosures or hedges, by When existence of exterior sign is presumed (NCC
the owners of adjacent buildings and estates 660)
separated by such objects (1) Whenever in the dividing wall of buildings there is
a window or opening
Nature (2) Whenever the dividing wall is, on one side,
(1) A common wall which separates two estates, straight and plumb on all its facement, and on
built by common agreement at the dividing line the other, it has similar conditions on the upper
such that it occupies a portion of both estates on part, but the lower part slants or projects
equal parts outward
(2) A party wall is a co-ownership (a kind of (3) Whenever the entire wall is built within the
compulsory co-ownership) boundaries of one of the estates
(a) Each owner owns part of the wall but it (4) Whenever the dividing wall bears the burden of
cannot be separated from the other portions the binding beams, floors and roof frame of one
belonging to the others. A party wall has a of the buildings, but not those of the others
special characteristic that makes it more of an (5) Whenever the dividing wall between courtyards,
easement as it is called by law gardens, and tenements is constructed in such a
(b) An owner may use a party wall to the extent way that the coping sheds the water upon only
of the ½ portion on his property. one of the estates
(6) Whenever the dividing wall, being built of
Co-Ownership Party Wall masonry, has stepping stones, which at certain
intervals project from the surface on one side
Before division of shares, Shares of the co-owners only, but not on the other
a co-owner cannot point cannot be physically (7) Whenever lands enclosed by fences or live
to any definite portion of segregated but they can hedges adjoin others which are not enclosed
the property as belonging be physically identified
to him Note: The deposit of earth or debris on one side
alone is an exterior sign that the owner of that
None of the co-owners No such limitation
side is the owner of the ditch or drain. The
may use the community
presumption is an addition to those enumerated
property
in NCC 660.
for his exclusive benefit
because he would be
invading the rights of the
Demolition of building supported by party wall
others
(1) An owner may also renounce his part ownership
In a co-ownership, partial Any owner may free of a party wall if he desires to demolish his
renunciation himself from contributing building supported by the wall.
is allowed to the cost of repairs and (2) He shall bear all the expenses of repairs and work
construction of a party necessary to prevent any damage which the
wall by renouncing all his demolition may cause to the party wall.
rights thereto
Increasing height of party wall
When existence of easement of party wall presumed An owner is given the right to increase the height of a
(1) In dividing walls of adjoining buildings up to the party wall subject to the following conditions:
point of common elevation (1) He must do so at his own expense;
(2) In dividing walls of gardens or yards situated in (2) He must pay for any damage which may be
cities, or towns, or in rural communities caused thereby even if the damage is temporary;
(3) In fences, walls and live hedges dividing rural (3) He must bear the cost of maintaining the portion
lands added;
(4) He must pay the increased cost of preservation of
Note: may be rebutted by a title or exterior sign, the wall
or any other proof showing that the entire wall in
controversy belongs exclusively to one of the Proportional use of party wall
adjoining property-owners The part owners share in the expenses of
maintaining a party wall in proportion to the interest
of each
PAGE 110
LIGHT AND VIEW (ii) The outer line of the openings if they
Definition project
(1) Easement of light (jus luminum) is the right to (iii) The dividing line between the two
admit light from the neighboring estate by virtue properties in cases of oblique view
of the opening of a window or the making of (d) If distances are not complied with:
certain openings (i) Windows are considered unlawful
(2) Easement of view (jus prospectus) is the right to openings
make openings or windows, to enjoy the view (ii) Owner may be ordered by the Court to
through the estate of another and the power to close them
prevent all constructions or works which would (iii) Even if the adjoining owner does not
obstruct such view or make the same difficult. object to the construction of such
(a) Necessarily includes the easement of light structures at first, he cannot be held to
(b) It is possible to have light only without view be in estoppel, except if 10-year period of
acquisitive prescription has passed.
Nature (iv) Does not give rise to prescription
(1) Positive: Opening a window through a party wall (v) Mere opening of the window in violation
When a part owner of a party wall opens a of the distances does not give rise to the
window therein, such act implies the exercise of easement of light and view by
the right of ownership by the use of the entire prescription
thickness of the wall = invasion of the right of the (3) In buildings separated by a public way or alley,
other part owners / violation of the right to not less than 3 meters wide, the distances
proportional use of the party wall. required (2 m, 60 cm) do not apply
(4) If an easement is acquired to have direct views,
(2) Negative: Formal prohibition upon the owner of balconies or belvederes, the owner of the servient
the adjoining land or tenement estate must not build at less than 3 meters from
(a) When a person opens a window on his own the boundary line of the two tenements.
building, he does nothing more than (a) The distances may be stipulated by the
exercise an act of ownership on his property. parties, but should not be less than what is
(i) Does not establish an easement prescribed by the law (2 meters and 60 cm)
(b) Coexistent is the right of the owner of the
adjacent property to build on his own land, Exception to Easement Vs. Direct View
even if such structures cover the window (1) Owners of a wall (not a party wall) adjoining a
(c) If the adjacent owner does not build tenement of another can make openings to admit
structures to obstruct the window, such is light without complying with the distance
considered mere tolerance and NOT a requirements SO LONG AS:
waiver of the right to build. (a) Openings are made at the height of the
(d) An easement is created only when the ceiling joists (horizontal beams) or
owner opens up a window, prohibits or immediately under the ceiling
restrains the adjacent owner from doing (i) Size: 30 cm square
anything, which may tend to cut off or (ii) With iron grating imbedded in the wall
interrupt the light + prescriptive period (iii) With a wire screen
(2) But owner of the adjoining estate can close the
Easement against Direct view opening if:
(1) Acquired by the person who opens the window (a) He acquires part ownership of the party wall
(2) The following structures cannot be built without (b) He constructs a building or raises a wall on his
following the prescribed distances land, unless an easement of light has been
(a) Window, apertures, balconies and other acquired
projections with a direct view upon or towards (3) If requirements are not complied with, the owner
an adjoining land must have a distance of 2 of the adjoining estate may compel the closure of
METERS between the wall and the contiguous the opening.
property. (4) The action to compel the closing of the opening
(b) For structures with a side or oblique view (at may prescribe if the opening is permitted without
an angle from the boundary line), there protest.
should be a distance of 60 centimeters. (a) BUT prescription of the action to compel the
(c) Measured from: closure of the opening DOES NOT MEAN that
(i) The outer line of the wall if the openings the servitude of light and view has been
do not project acquired.
PAGE 111
(b) Period of acquisitive prescription will only (4) Obstructs or interferes with the free passage of
start to run from the time the owner asserting any public highway or street, or any body of
the servitude has forbidden the owner of the water; or
adjoining tenement from doing something he (5) Hinders or impairs the use of property.
could lawfully do.
(c) THUS, although the action to compel the LATERAL AND SUBJACENT SUPPORT
closure might have prescribed, the owner of (1) The proprietor is prohibited from making
the adjoining estate may still build on his own dangerous excavations.
land a structure which might obstruct the (a) No proprietor shall make such excavations
view. upon his land as to deprive any adjacent land
or building of sufficient lateral or subjacent
INTERMEDIATE DISTANCES (NCC 677) support.
NCC 677, in effect, establishes an easement in favor (2) Easement of lateral and subjacent support is
of the State. The general prohibition is dictated by deemed essential to the stability of buildings
the demands of national security. (3) Support is lateral when the supported and
supporting lands are divided by a vertical plane.
The following must comply with the regulations or (4) Support is subjacent when the supported land is
customs of the place: above and the supporting land is beneath it.
(1) Construction of aqueduct, well, sewer, etc. (678)
Constructions which by reason of their nature or MODES OF ACQUIRING EASEMENT
products are dangerous or noxious BY TITLE
Juridical act which gives rise to the servitude (e.g.
(2) Planting of trees (NCC 679) law, donations, contracts or wills)
(a) No trees shall be planted near a tenement or (1) If easement has been acquired but no proof of
piece of land belonging to another except at existence of easement available, and easement is
the distance authorized by the ordinances or one that cannot be acquired by prescription
customs of the place
(b) In the absence of regulations: The defect may be cured by:
(i) At least 2 meters from the dividing line (a) Deed of recognition by owner of servient estate:
of the estates if tall trees are planted By affidavit or a formal deed acknowledging
(ii) At least 50 centimeters if shrubs or the servitude
small trees are planted (b) By final judgment: Owner of the dominant
(c) In case of violation, a landowner shall have estate must file a case in Court to have the
the right to demand the uprooting of the easement declared by proving its existence
plant even if it has grown spontaneously. through other evidence
Branches, roots, and fruits: (2) Existence of an apparent sign considered as title
(1) If the branches of any tree should extend over a Illustration: The presence of 4 windows was
neighboring estate, tenement, garden or yard, considered an apparent sign which created a
the owner of the latter shall have the right to negative easement of light and view (altius non
demand that they be cut-off tollendi) i.e. not to build a structure that will
(2) If it be the roots of a neighboring tree which cover the windows. (Amor v. Florentino)
should penetrate into the land of another, the
latter may cut them off himself within his BY PRESCRIPTION
property Requisites
(3) Fruits naturally falling upon adjacent land belong (1) Easement must be continuous and apparent.
to the owner of said land. (2) Easement must have existed for 10 years.
(3) NO NEED for good faith or just title.
NUISANCE
A nuisance is any act, omission, establishment,
business, condition of property, or anything else EXTINGUISHMENT OF EASEMENTS
which: (1) By merger in the same person of the ownership of
(1) Injures or endangers the health or safety of the dominant and servient estates
others; or (2) By nonuser for ten years
(2) Annoys or offends the senses; or (3) When either or both of the estates fall into such
(3) Shocks, defies or disregards decency or morality; condition that the easement cannot be used
or
PAGE 112
(4) By the expiration of the term or the fulfillment of RENUNCIATION OF THE OWNER OF THE DOMINANT ESTATE
the condition, if the easement is temporary or Must be specific, clear, express (distinguished from
conditional non-user)
(5) By the renunciation of the owner of the dominant
estate; REDEMPTION AGREED UPON BETWEEN THE OWNERS
(6) By the redemption agreed upon between the
owners of the dominant and servient estates OTHER CAUSES NOT MENTIONED IN NCC 631
(1) Annulment and rescission of the title constituting
MERGER the voluntary easement
Must be absolute, perfect and definite, not merely (2) Termination of the right of grantor of the
temporary voluntary easement
(1) Absolute: Ownership of the property must be (3) Abandonment of the servient estate
absolute, thus not applicable to lease, usufruct, (a) Owner of the servient estate gives up
etc. ownership of the easement (e.g. the strip of
(2) Perfect: Merger must not be subject to a land where the right of way is constituted) in
condition favor of the dominant estate.
(3) If the merger is temporary, there is at most a (b) The easement is extinguished because
suspension of the easement, but no ownership is transferred to the dominant
extinguishment. owner, who now owns both properties.
(4) Eminent domain
BY NON-USER FOR 10 YEARS (a) The government’s power to expropriate
(1) Owner of dominant estate does not exercise right property for public use, subject to the
over easement. payment of just compensation.
(2) Inaction, not outright renunciation. (5) Special cause for extinction of legal rights of way;
(3) Due to voluntary abstention by the dominant if right of way no longer necessary
owner, and not due to a fortuitous event (a) NCC 655
(4) Computation of the period (i) If the right of way granted to a
(a) Discontinuous easements: counted from the surrounded estate ceases to be
day they ceased to be used necessary because its owner has joined it
(b) Continuous easements: counted from the day to another abutting on a public road, the
an act adverse to the exercise of the easement owner of the servient estate may
took place demand that the easement be
(i) E.g. in an easement of light and view, extinguished, returning what he may
the erection of works obstructing the have received by way of indemnity. The
servitude would commence the period of interest on the indemnity shall be
prescription deemed to be in payment of rent for the
(5) Use by a co-owner of the dominant estate bars use of the easement.
prescription with respect to the others (ii) The same rule shall be applied in case a
(6) Servitudes not yet exercised cannot be new road is opened giving access to the
extinguished by non-user isolated estate.
(a) An easement must have first been used, (iii) In both cases, the public highway must
before it can be extinguished by inaction. substantially meet the needs of the
dominant estate in order that the
EXTINGUISHMENT BY IMPOSSIBILITY OF USE easement may be extinguished.
(1) Impossibility referred to must render the entire (b) Right of way ceases to be necessary:
easement unusable for all time. (i) Owner of the of the dominant estate has
(2) Impossibility of using the easement due to the joined to another abutting on a public
condition of the tenements (e.g. flooding) only road
suspends the servitude until it can be used again. (ii) A new road is opened giving access to
(3) Except: If the suspension exceeds 10 years, the the isolated estate
easement is deemed extinguished by non-user (c) Requisite: the public highway must
substantially meet the needs of the dominant
EXPIRATION OF THE TERM OR FULFILLMENT OF estate in order that the easement may be
RESOLUTORY CONDITION extinguished
Applicable only to voluntary easements (d) Owner of the servient estate may demand
that the easement be extinguished.
PAGE 113
(e) Owner of the servient estate must return

Nuisance Negligence
indemnity he received (value of the land)
where the cause of action apply where the cause of
is for continuing harm action is for harm
caused by continuing or resulting from one act
Nuisance recurrent acts which
cause discomfort or
which created
unreasonable risk of
an
annoyance to plaintiff in injury.

A nuisance is any act, omission, establishment, the use of his property.
business, condition of property, or anything else
which: CLASSES
(1) Injures or endangers the health or safety of ACCORDING TO NATURE
others; or (1) Nuisance per se or at law
(2) Annoys or offends the senses; or An act, occupation or structure which is a
(3) Shocks, defies or disregards decency or morality; nuisance at all times and under any
or circumstances, regardless of location or
(4) Obstructs or interferes with the free passage of surroundings.
any public highway or street, or any body of
water; or (2) Nuisance per accidens or in fact
(5) Hinders or impairs the use of property. (a) One that becomes a nuisance by reason of
circumstances and surroundings.
Note: To constitute a nuisance there must be an (b) It is not a nuisance by its nature but it may
arbitrary or abusive use of property or disregard of become so by reason of the locality,
commonly accepted standards set by society. surrounding, or the manner in which it is
conducted, managed, etc.
NUISANCE V. TRESPASS
Nuisance Trespass Per se Per accidence
Use of one’s own property Direct infringement of The wrong is established Proof of the act and its
in such a manner as to another’s right of by proof of the mere act. consequences.
cause injury to the property. It becomes a nuisance as
property or right or a matter of law.
interest of another, and
generally results from the
ACCORDING TO SCOPE OF INJURIOUS EFFECTS
commission of an act
Test: not the number of persons annoyed but the
beyond the limits of the
possibility of annoyance to the public by the invasion
property affected.
of its rights – the fact that it is in a public place and
Injury is consequential Injury is immediate annoying to all who come within its sphere.
(1) Public
NUISANCE V. NEGLIGENCE (a) The doing of or the failure to do something
that injuriously affects the safety, health or
Nuisance Negligence
morals of the public.
Whether it was Whether the defendant’s (b) It causes hurt, inconvenience or injury to the
unreasonable for the use of his property was public, generally, or to such part of the public
defendant to act as he unreasonable as to as necessarily comes in contact with it.
did in view of the plaintiff, without regard (2) Private
threatened danger or to foreseeability of injury. One which violates only private rights and
harm to one in plaintiff’s produces damages to but one or a few persons
position.
Liability for the resulting Liability is based on a Public Private
injury to others regardless want of proper care
of the degree of care or Affects the individual or
Affects the public at
skill exercised to avoid a limited number of
large
such injury. individuals only
Need not affect the
Principles ordinarily apply Principles ordinarily
whole community or
PAGE 114
Public Private LIABILITY OF TRANSFEREES

The grantee of land upon which there exists a
hurt and injure all
nuisance created by his predecessors in title is NOT
the public. It is
responsible therefore merely because he becomes
sufficient if it affects
the owner of the premises, or merely because he
the surrounding
permits it to remain.
community
generally or if the
He shall be liable if he knowingly continues the
injury is occasioned
nuisance. Generally, he is not liable for continuing it
to such part of the
in its original form, unless he has been notified of its
public as come in
existence and requested to remove it, or has actual
contact with it.
knowledge that it is a nuisance and injurious to the
rights of others.
(3) Mixed
NATURE OF LIABILITY
DOCTRINE OF ATTRACTIVE NUISANCE
All persons who participate in the creation or
One who maintains on his premises dangerous
maintenance of a nuisance are jointly and severally
instrumentalities or appliances of a character likely to
liable for the injury done.
attract children in play, and who fails to exercise
ordinary care to prevent children from playing
If 2 or more persons who create or maintain the
therewith or resorting thereto, is liable to a child of
nuisance act entirely independent of one another,
tender years who is injured thereby, even if the child
and without any community of interest, concert of
is technically a trespasser in the premises.
action, or common design, each is liable only so far
as his acts contribute to the injury.
Basis of liability – The attractiveness is an invitation
to children. Safeguards to prevent danger must
For joint liability, there must be some joint or
therefore be set up.
concurrent act or community of action or duty, or the
several wrongful acts done at several times must
Note: A swimming pool or water tank is not an
have concurred in their effects as one single act to
attractive nuisance, for while it is attractive, it cannot
produce the injury complained of.
be a nuisance, being merely an imitation of the work
of nature. (Hidalgo Enterprises v. Balandan)
RIGHT TO RECOVER DAMAGES
The abatement of a nuisance does not preclude the
LIABILITY IN CASE OF NUISANCE
right of any person injured to recover damages for its
WHO ARE LIABLE
past existence. (NCC 697)
Every successive owner or possessor of property who
fails or refuses to abate a nuisance in that property
Abatement and damages are cumulative remedies.
started by a former owner or possessor is liable
therefor in the same manner as the one who created
NO PRESCRIPTION
it. (NCC 696)
The action to abate a public or private nuisance is
NOT extinguished by prescription. [NCC. 1143(2)]
LIABILITY OF CREATOR OF NUISANCE
He who creates a nuisance is liable for the resulting
REGULATION OF NUISANCES
damages and his liability continues as long as the
PUBLIC NUISANCE
nuisance continues.
Remedies
(1) There must be a breach of some duty on the part
The remedies against a public nuisance are:
of the person sought to be held liable for
(1) A prosecution under the Penal Code or any local
damages resulting from a nuisance before an
ordinance: or
action will lie against him.
(2) A civil action; or
(2) No one is to be held liable for a nuisance which
(3) Abatement, without judicial proceedings.
he cannot himself physically abate without legal
(a) It must be reasonably and efficiently exercised
action against another for that purpose.
(b) Means employed must not be unduly
(3) Where several persons, acting independently,
oppressive on individuals, and
cause damage by acts which constitute a
(c) No more injury must be done to the property
nuisance, each is liable for the damage which he
or rights of individuals than is necessary to
has caused or for his proportionate share of the
accomplish the abatement.
entire damage.
PAGE 115
(d) No right to compensation if property taken or allow thereafter a reasonable time to enable the
destroyed is a nuisance. other to abate the nuisance himself.
(4) Means employed must be reasonable and for any
Action for abatement unnecessary damage or force, the actor will be
(1) The district health officer shall take care that one liable. Right to abate is not greater than the
or all of the remedies against a public nuisance necessity of the case and is limited to the removal
are availed of. of only so much of the objectionable thing as
(2) If a civil action is brought by reason of the actually causes the nuisance.
maintenance of a public nuisance, such action (5) Abatement must be approved by the district
shall be commenced by the city or municipal health officer.
mayor. (6) Property must not be destroyed unless it is
(3) The district health officer shall determine absolutely necessary to do so.
whether or not abatement, without judicial (7) Right must always be exercised with the
proceedings, is the best remedy against a public assistance of local police so as not to disturb the
nuisance. public peace.
(4) A private person may file an action on account of
a public nuisance if it is especially injurious to PRIVATE NUISANCE
himself. Remedies
The remedies against a private nuisance are:
General rule: Individual has no right of action against (1) A civil action; or
a public nuisance. The abatement proceedings must (2) Abatement, without judicial proceedings.
be instituted in the name of the State or its (a) The procedure for extrajudicial abatement of
representatives. a public nuisance by a private person be
followed
Exception: An individual who has suffered some (b) Person extrajudicially abating a nuisance
special damage different from that sustained by the liable for damages if:
general public may maintain a suit in equity for an (i) If he causes unnecessary injury
injunction to abate it, or an action for damages which (ii) If an alleged nuisance is later declared
he has sustained. by the courts to be not a real nuisance
Action becomes a tort if an individual has suffered Remedies of property owner

particular harm, in which case the nuisance is treated A person whose property is seized or destroyed as a
as a private nuisance with respect to such person. nuisance may resort to the courts to determine
whether or not it was in fact a nuisance.
Requisites of the right of a private individual to abate (1) Action for replevin
a public nuisance (2) Enjoin the sale or destruction of the property
(1) That demand be first made upon the owner or (3) Action for the proceeds of its sale and damages if
possessor of the property to abate the nuisance; it has been sold
(2) That such demand has been rejected; (4) Enjoin private parties from proceeding to abate a
(3) That the abatement be approved by the district supposed nuisance
health officer and executed with the assistance of
the local police; and
(4) That the value of the destruction does not exceed
P3000.
Modes of Acqiring Ownership
Rules:
(1) The right must be exercised only in cases of MODES OF ACQUIRING OWNERSHIP: (OLDTIPS)
urgent or extreme necessity. The thing alleged to (1) Occupation
be a nuisance must be existing at the time that it (2) Law
was alleged to be a nuisance. (3) Donation
(4) Tradition
(2) Summary abatement must be resorted to within (5) Intellectual Property
a reasonable time after knowledge of the (6) Prescription
nuisance is acquired or should have been (7) Succession
acquired by the person entitled to abate.
(3) Person who has the right to abate must give Mode is a specific cause which produces dominion
reasonable notice of his intention to do so, and and other real rights as a result of the co-existence of
PAGE 116
special status of things, capacity and intention of The owner of a swarm of bees shall have a right to
persons and fulfillment of the requisites of law. pursue them to another’s land, indemnifying the
possessor of the latter for the damage.
Title is every juridical right which gives a means to
the acquisition of real rights but in itself is If the owner has not pursued the swarm, or ceases to
insufficient to produce them. do so within 2 consecutive days, the possessor of the
land may occupy or retain the same.
Ownership is not transferred by contract merely but
by tradition or delivery. Contracts only constitute The 20 days to be counted from their occupation by
titles or rights to transfer or acquisition of ownership, another person. This period having expired, they
while delivery is the mode of accomplishing the shall pertain to him who has caught and kept them.
same.
Occupation of domesticated animals
Mode Title Wild animals are possessed only while they are
under one's control; domesticated or tamed animals
Directly and immediately Serves merely to give the are considered domestic or tame if they retain the
produces a real right occasion for its acquisition habit of returning to the premises of the possessor.
or existence
Pigeons and fish
Cause Means
Pigeons and fish which from their respective
Proximate cause Remote cause breeding places pass to another pertaining to a
Essence of the right Means whereby that different owner shall belong to the latter, provided
which is to be created or “essence” is transmitted they have not been enticed by some artifice or fraud.
transmitted
Hidden treasure
He who by chance discovers hidden treasure in
OCCUPATION
another’s property: ½ shall be allowed to the finder.
Note: Ownership of land cannot be acquired by
occupation
If the finder is a trespasser, he shall not be entitled to
any share of the treasure.
REQUISITES
(a) Corporeal personal property
If the things found be of interest to science or the
(b) Property susceptible of appropriation
arts, the State may acquire them at their just price,
(c) Seizure with intent to appropriate
which shall be divided in conformity with the rule
(d) Res nullius (no owner) or res derelict (abandoned
stated
property)
(e) Observance of conditions prescribed by law
Lost movables; procedure after finding lost movables
Whoever finds a movable, which is not treasure, must
KINDS
return it to its previous possessor.
Of Animals
(1) Wild or feral animals – seizure (hunting/fishing)
If unknown, the finder shall immediately deposit it
in open season by means NOT prohibited
with the mayor of the city or municipality where the
(2) Tamed/domesticated animals – General Rule:
finding has taken place.
belong to the tamer, but upon recovering
freedom, are susceptible to occupation UNLESS
The finding shall be publicly announced by the
claimed within 20days from seizure by another
mayor for two consecutive weeks in the way he
(3) Tame/domestic animals – not acquired by
deems best.
occupation EXCEPT when ABANDONED
If the movable cannot be kept without deterioration,
Of Other Personal Property
or without expenses which considerably diminish its
(1) Abandoned – may be acquired
value, it shall be sold at a public auction eight days
(2) Lost
after the publication.
(3) Hidden treasure – finder gets ½ by occupation;
landowner gets ½ by accession; EXCEPT in CPG
Six months from the publication having elapsed
system, share goes to the partnership
without the owner having appeared, the thing found,
or its value, shall be awarded to the finder. The finder
SPECIAL RULES
Occupation of a swarm of bees
PAGE 117
and the owner shall be obliged, as the case may be, WHAT MAY NOT BE DONATED
to reimburse the expenses. Future property
(1) Donations cannot comprehend future property.
If the owner should appear in time, he shall be (2) “Future property” is understood anything which
obliged to pay, as a reward to the finder, one-tenth the donor cannot dispose of at the time of the
of the sum or of the price of the thing found. donation.
DONATION KINDS OF DONATIONS

Donation is an act of liberality whereby a person As to its taking effect
disposes gratuitously of a thing or right in favor of (1) Donation Inter Vivos (NCC 729)
another, who accepts it. Donation which shall take effect during the
lifetime of the donor, though the property shall
OTHER INSTANCES CONSIDERED AS DONATION not be delivered till after the donor's death
(1) When a person gives to another a thing or right
on account of the latter's merits or of the services Takes effect independently of the donor’s death
rendered by him to the donor, provided they do
not constitute a demandable debt Irrevocable EXCEPT for the ff grounds:
(2) When the gift imposes upon the donee a burden (a) Subsequent birth of the donor’s children
which is less than the value of the thing given (b) Donor’s failure to comply with imposed
conditions
NATURE (c) Donee’s ingratitude
(1) BILATERAL contract creating UNILATERAL (d) Reduction of donation by reason of
obligations on the donor’s part inofficiousness
(2) Requires CONSENT of BOTH donor and donee
though it produces obligations only on the side of (2) Donation by Reason of Marriage/ Donation Propter
the DONOR Nuptias (FC 86)
Requisites
Requisites (a) Must be made BEFORE the celebration of
(1) CONSENT and CAPACITY of the parties marriage
(2) ANIMUS DONANDI (intent to donate) (b) Made in CONSIDERATION of the marriage
(3) DELIVERY of thing donated (c) Made in FAVOR of ONE or BOTH of the future
(4) FORM as prescribed by law spouses
(5) IMPOVERISHMENT of donor’s patrimony and
ENRICHMENT on part of donee Ordinary v. Propter Nuptias
Ordinary Propter Nuptias
WHAT MAY BE DONATED
All present property or part thereof of the donor Express acceptance
(1) Provided he reserves, in full ownership or
usufruct, sufficient means for support of himself Necessary Not required
and all relatives entitled to be supported by As to minors
donor at the time of acceptance
(2) Provided that no person may give or receive by Can’t be made by minors May be made by minors
way of donation, more than he may give or (FC 78)
receive by will (NCC 752); also, reserves property As to future property
sufficient to pay donor’s debts contracted before
donation, otherwise, donation is in fraud of Cannot include future May include future
creditors (NCC 759, 1387) property property (same rule as
(3) If donation exceeds the disposable or free portion wills)
of his estate, donation is inofficious Limit as to donation of present property
(4) EXCEPTIONS:
(a) Donations provided for in marriage No limit to donation of If present property is
settlements between future spouses – not present property provided donated and property
more than 1/5 of present property legitimes are not impaired regime is ACP, limited to
(b) Donation propter nuptias by an ascendant 1/5
consisting of jewelry, furniture or clothing not Grounds for revocation
to exceed 1/10 of disposable portion
Law on donations FC 86
PAGE 118
Causes for revocation of donation propter nuptias: Inter vivos Mortis causa
(1) If the marriage is not celebrated or judicially
declared void ab initio, except donations of the donor the donor, the donation
made in the marriage settlements being effective only after
(2) When the marriage takes place without the the death of donor.
consent of the parents or guardian, as Acceptance during the
required by law; donor’s lifetime is
(3) When the marriage is annulled, and the premature and
donee acted in bad faith; ineffective because there
(4) Upon legal separation, the donee being the can be no contract
guilty spouse; regarding future
(5) If it is with a resolutory condition and the inheritance
condition is complied with;
(6) When the donee has committed an act of As to transfer of ownership for right of disposition
ingratitude as specified by the provisions of Ownership is immediately
the Civil Code on donations in general. transferred. Delivery of Ownership is transferred
Donation between spouses possession is allowed after death
GENERAL RULE: Every donation or grant of after death
gratuitous advantage, direct or indirect, between
the spouses during the marriage shall be void. As to revocation
The prohibition applies to persons living together Irrevocable – may be Revocable upon the
as husband and wife without a valid marriage revoked only for the exclusive will of the donor
reasons provided in CC
EXCEPTION: Moderate gifts which the spouses 760, 764, 765
may give each other on the occasion of any family
As to reduction or suppression
rejoicing.
When it is excessive or When it is excessive or
(3) Donation Mortis Causa (NCC 728) inofficious, being inofficious, it is reduced
(a) Becomes effective upon the death of donor preferred, it is reduced first, or even suppressed
(b) Donor’s death ahead of the donee is a only after the donations
suspensive condition for the existence of the mortis causa had been
donation reduced or exhausted
Characteristics: Note:
(a) Transferor retains ownership and control of (a) NATURE of the act, whether it’s one of
the property while alive disposition or of execution, is CONTROLLING
(b) Transfer is revocable at will before his death to determine whether the donation is mortis
(c) Transfer will be VOID if the transferor should causa or inter vivos.
survive the transferee (b) What is important is the TIME of TRANSFER
of ownership even if transfer of property
Inter Vivos v. Mortis Causa donated may be subject to a condition or a
Inter vivos Mortis causa term.
(c) Whether the donation is inter vivos or mortis
As to formalities causa depends on whether the donor
Executed and accepted Must be in the form of a intended to transfer ownership over the
with formalities will, with all the properties upon the execution of the deed.
prescribed by CC formalities for the validity (Gestopa v. CA; Austria-Magat v. CA)
of wills
As to cause or consideration
As to effectivity (1) Simple - made out of pure liberality or because of
Effective during the Effective after the death the merits of the donee
lifetime of the donor of the donor (2) Remuneratory - made for services already
rendered to the donor
As to acceptance (3) Onerous - imposes a BURDEN inferior in value to
Acceptance must be Acceptance must be property donated
made during the lifetime made after the death of (a) Improper - burden EQUAL in value to property
donated
PAGE 119
(b) Sub-modo or modal - imposes a prestation QUALIFICATIONS OF DONOR, DONEE

upon donee as to how property donated will Who May Give Donations
be applied All persons who may contract and dispose of their
(c) Mixed donations – e.g. sale for price lower property may make a donation (NCC 735)
than value of property
NOTE:
As to effectivity or extinguishment (1) Donor’s capacity shall be determined as of the
(1) Pure – donation is without conditions or periods time of the making of the donation. (NCC 737)
(2) Conditional – donation is subject to suspensive or (2) Capacity to donate is required for donations inter
resolutory conditions vivos and NOT mortis causa
(3) With a term (3) Donor’s capacity determined as of the time of the
donation. Subsequent incapacity is immaterial.
FORMALITIES REQUIRED
How made and accepted Who May Receive Donations
Movables (NCC 748) (1) All who are not specially disqualified by law (NCC
(1) The donation of a movable may be made orally or 738)
in writing. (2) Minors and others who cannot enter into a
(2) Oral donation: requires the simultaneous delivery contract: acceptance made through their parents
of the thing or of the document representing the or legal representatives (NCC 741)
right donated. (3) Donations made to conceived and unborn
(3) If the value of the movable donated exceeds children: accepted by those persons who would
P5000, the donation and the acceptance should legally represent them if they were already born
be in writing, otherwise, donation is void (NCC 737)
Immovables (NCC 749) Who May Not Give or Receive Donations

(1) Must be in a public instrument specifying By reason of public policy (NCC 739)
donated property and burdens assumed by the (1) Those made between persons guilty of adultery
done or concubinage at the time of donation
(2) Acceptance must be either: (2) Those made between persons guilty of the same
(a) In the same instrument or criminal offense if the donation is made in
(b) In another public instrument notified to the consideration thereof
donor in authentic form and noted in both (3) Those made to a public officer, his spouse,
deeds descendants, and/or ascendants by reason of the
(3) Exceptions: office
(a) Donations propter nuptias – need no express
acceptance By reason of donee’s unworthiness [NCC 1032 and 1027
(b) Onerous donations – form governed by the except (4)]
rules of contracts NCC 1032:
(1) Parents who have abandoned their children or
Perfection induced their daughters to lead a corrupt or
Acceptance immoral life, or attempted against their virtue;
(1) Donation is perfected upon the donor’s learning (2) Any person who has been convicted of an
of the acceptance attempt against the life of the testator, his or her
(2) Acceptance may be made during the lifetime of spouse, descendants, or ascendants;
both donor and donee (3) Any person who has accused the testator of a
crime for which the law prescribes imprisonment
Who May Accept for six years or more, if the accusation has been
Donee: must accept personally or through an found groundless;
authorized person with special power for the purpose (4) Any heir of full age who, having knowledge of the
(NCC 745) violent death of the testator, should fail to report
it to an officer of the law within a month, unless
Time Of Acceptance the authorities have already taken action; this
During lifetime of donor and donee prohibition shall not apply to cases wherein,
according to law, there is no obligation to make
an accusation;
(5) Any person convicted of adultery or concubinage
with the spouse of the testator;
PAGE 120
(6) Any person who by fraud, violence, intimidation, (b) Donation to husband and wife jointly with
or undue influence should cause the testator to right of accretion UNLESS donor provides
make a will or to change one already made; otherwise
(7) Any person who by the same means prevents
another from making a will, or from revoking one Special Provisions
already made, or who supplants, conceals, or Reservation by donor of power to dispose (in whole or in
alters the latter's will; part) or to encumber property donated (NCC 755)
(8) Any person who falsifies or forges a supposed will (1) The right to dispose of some things donated, or of
of the decedent. some amount which shall be a charge thereon,
may be reserved by the donor
NCC 1027: (2) But if he should die without having made use of
(a) The priest who heard the confession of the this right, the property or amount reserved shall
testator during his last illness, or the minister of belong to the donee.
the gospel who extended spiritual aid to him
during the same period Donation of naked ownership to one donee and
(b) The relatives of such priest or minister of the usufruct to another (NCC 756)
gospel within the fourth degree, the church, (1) May be donated
order, chapter, community, organization, or (2) Provided all the donees are living at the time of
institution to which such priest or minister may the donation
belong
(c) A guardian with respect to testamentary Conventional reversion in favor of donor or other person
dispositions given by a ward in his favor before (NCC 757)
the final accounts of the guardianship have been (1) In favor of donor, for any case and circumstance
approved, even if the testator should die after the (2) In favor of other persons who must be living at
approval thereof; nevertheless, any provision the time of donation
made by the ward in favor of the guardian when (3) If rule is violated, reversion is void but donation is
the latter is his ascendant, descendant, brother, not nullified
sister, or spouse, shall be valid
(d) Any physician, surgeon, nurse, health officer or Payment of donor’s debt (NCC 758)
druggist who took care of the testator during his (1) If expressly stipulated - donee to pay only debts
last illness contracted before the donation unless specified
(e) Individuals, associations and corporations not otherwise. But in no case shall donee be
permitted by law to inherit responsible for debts exceeding value of property
donated unless clearly intended
By reason of prejudice to creditors or heirs (voidable) (2) if there’s no stipulation - donee answerable only
for donor’s debt only in case donation is in fraud
EFFECTS OF DONATION/LIMITATIONS of creditors
In general
(1) Donee may demand actual delivery of thing Illegal or impossible conditions (NCC 1183)
donated (1) Impossible conditions, those contrary to good
(2) Donee is SUBROGATED to rights of donor in the customs or public policy and those prohibited by
property donated law shall annul the obligation which depends
(3) Donor NOT obliged to warrant things donated upon them.
EXCEPT in onerous donations in which case (2) If the obligation is divisible, that part thereof
donor is liable for eviction up to extent of burden which is not affected by the impossible or
(ART. 754) unlawful condition shall be valid.
(4) Donor is liable for EVICTION or HIDDEN (3) The condition not to do an impossible thing shall
DEFECTS in case of BF on his part (ART. 754) be considered as not having been agreed upon.
(5) In donation propter nuptias, donor must
RELEASE property donated from mortgages and Double donations
other encumbrances UNLESS the contrary has Rule: Priority in time, priority in right
been stipulated (1) If movable – one who first took possession in
(6) Donations to several donees jointly – NO right of good faith
accretion EXCEPT: (2) If immovable – one who recorded in registry of
(a) Donor provides otherwise property in good faith
(a) no inscription, one who first took
possession in good faith
PAGE 121
(b) in absence thereof, one who can In fraud of creditors (NCC 759)
present oldest title (1) Donation is always presumed to be in fraud of
creditors, when at the time thereof the donor did
Excessive/Inofficious Donations not reserve sufficient property to pay his debts
A donation in which a person gives or receives more prior to the donation
than what he may give or receive by will (NCC 752) (2) Donee shall be responsible therefor only when
the donation has been made in fraud of creditors
Donation inter vivos, made by a person having no
children or descendants, legitimate or legitimated by VOID DONATIONS (NCC 739-740, 1027)
subsequent marriage, or illegitimate, may be (1) Those made between persons who were guilty of
revoked or reduced by the happening of any of these adultery or concubinage at the time of the
events: donation;
(1) If the donor, after the donation, should have
legitimate or legitimated or illegitimate children, NOTE: The action for declaration of nullity may
even though they be posthumous; be brought by the spouse of the donor or donee;
(2) If the child of the donor, whom the latter believed and the guilt of the donor and donee may be
to be dead when he made the donation, should proved by preponderance of evidence in the same
turn out to be living; action
(3) If the donor subsequently adopt a minor child
(2) Those made between persons found guilty of the
The donation shall be revoked or reduced insofar as same criminal offense, in consideration thereof;
it exceeds the portion that may be freely disposed of
by will, taking into account the whole estate of the (3) Those made to a public officer or his wife,
donor at the time of the birth, appearance or descendants and ascendants, by reason of his
adoption of a child office.
Inofficious Donations (4) Those made to persons incapacitated to succeed

(1) Shall be reduced with regard to the excess; by will [Art 1027]
(2) But this reduction shall not prevent the donations
from taking effect during the life of the donor, nor REVOCATION AND REDUCTION
shall it bar the donee from appropriating the
fruits Revocation Reduction
(3) Only those who at the time of the donor's death
Total, whether the
have a right to the legitime and their heirs and Made insofar as the
legitime is impaired or
successors in interest may ask for the reduction legitime is prejudiced
not
or inofficious donations
(4) If, there being two or more donations, the Benefits the donor’s heirs
disposable portion is not sufficient to cover all of (except when made on
Benefits the donor
them, those of the more recent date shall be the ground of the
suppressed or reduced with regard to the excess. appearance of a child)
Scope of amount (NCC 750-752) Reduction

(1) The donations may comprehend all the present (1) Inofficiousness
property of the donor, or part thereof A donation in which a person gives or receives
more than what he may give or receive by will is
Provided he reserves, in full ownership or in inofficious (NCC 752)
usufruct, sufficient means for the support of (2) Subsequent birth, reappearance of child or
himself, and of all relatives who, at the time of adoption of minor by donor
the acceptance of the donation, are by law
entitled to be supported by the donor Effects:
(1) Donation is VALID if not exceeding the free part
(2) Donations cannot comprehend future property. computed as of the birth, adoption or
reappearance of the child
Future property is understood anything which the (2) Donee must return the property or its value at the
donor cannot dispose of at the time of the time of the donation
donation (3) Fruits to be returned from the filing of the action
PAGE 122
(4) Mortgages by the donee are valid but may be Effect as to fruits (NCC 768)
discharged subject to reimbursement from the When the donation is revoked for any of the causes
donee stated in NCC 760, or by reason of ingratitude, or
when it is reduced because it is inofficious, donee
Extent of revocation – only to the extent of the shall not return the fruits except from the filing of the
presumptive legitime of the child complaint
(1) If the revocation is based upon noncompliance
Prescription – 4yrs with any of the conditions imposed in the
donation, the donee shall return not only the
Revocation property but also the fruits thereof which he may
Ingratitude have received after having failed to fulfill the
In the following cases: condition
(1) If the donee should commit some offense against
the person, the honor or the property of the
donor, or of his wife or children under his parental
authority;
(2) If the donee imputes to the donor any criminal
offense, or any act involving moral turpitude,
even though he should prove it, unless the crime
or the act has been committed against the donee
himself, his wife or children under his authority;
(3) If he unduly refuses him support when the donee
is legally or morally bound to give support to the
donor.
Applies to all donations EXCEPT:

(1) Mortis causa
(2) Propter nuptias
(3) Onerous
Founded on moral duty – one who received a

donation must be grateful to his benefactor
Conviction NOT necessary
Time to file action for revocation – within 1yr from

knowledge of the offense
Who may file

Donor must bring action himself; not transmissible
to his heirs
Effect of revocation on alienations and encumbrances

(NCC 766)
(1) Alienations and mortgages effected before the
notation of the complaint for revocation in the
Registry of Property shall subsist
(2) Later ones shall be void
PAGE 123
What may be donated

All present property of the donor or part thereof Limitation:
(1) He reserves in full ownership or in usufruct,
sufficient means for his support and for all
relatives who are at the time of the acceptance of
the donation are, by law, entitled to be supported
Effect of non-reservation: reduction of the
donation
(2) He reserves sufficient property at the time of the

donation for the full settlement of his debts
Effect of non-reservation: considered to be a
donation in fraud of creditors, and donee may be
liable for damages
What may not be donated
(1) Future property; those which the donor cannot
dispose of at the time of the donation (Article 751)
(2) More than what he may give or receive by will
(Article 752)
If exceeds: inofficious
Donations made to several persons jointly
No accretion – one donee does not get the share of Exception: those given to husband and wife, except
the other donees who did not accept (Article 753) when the donor otherwise provides
Donor
Who are allowed: All persons who may contract (of Who are not allowed:
legal age) and dispose of their property (Article 735)
(1) Guardians and trustees with respect to the
property entrusted to them (Article 736)
Donor’s capacity is determined at the time of the (2) Made between person who are guilty of adultery
making of donation (Article 737) or concubinage (Article 739)
Made between persons found guilty of the same

criminal offense, in consideration thereof (Article 739)
Donee
Who are allowed to accept donations: Those who are Who are not allowed:
not specifically disqualified by law (Article 738) (1) Made between person who are guilty of adultery
or concubinage (Article 739)
Those who are allowed, with qualifications: (2) Made between persons found guilty of the same
(1) Minors and others who are incapacitated (see criminal offense, in consideration thereof (Article
Article 38), provided that their acceptance is done 739)
through their parents or legal representatives (3) Made to a public officer or his wife, descendant
(Article 741) and ascendants, by reason of his office (Article
(2) Conceived and unborn children, provided that the 739)
donation is accepted by those who would legally (4) Those who cannot succeed by will (Article 740)
represent them if they were already born
Those made to incapacitated persons, although
simulated under the guise of another contract (Article
743)
Acceptance of the donation
Who may accept (Article 745): When to accept: during the lifetime of the donor or
(1) Donee personally donee (Article 746)
PAGE 124
(2) Authorized person with a special power for the

purpose or with a general sufficient power
What the donee acquires with the thing
He shall be subrogated to all the rights and actions
that would pertain to the donor in case of eviction
(Article 754)
Obligation of the donor
No obligation to warrant (Article 754) Exception: when the donation is onerous
Obligation of the donee
If the donation so states, the donee may be obliged to Exception: when contrary intention appears
pay the debts previously contracted by the donor and
in no case shall he be responsible for the debts
exceeding the value of the thing donated (Article 758)
What may be reserved by the donor
Right to dispose of some of the things donated, or of If the donor dies without exercising this right
some amount which shall be a charge thereon
Reversion
The property donated may be restored or returned to Limitation to (2): the third person would be living at
(1) Donor or his estate; or the time of the donation
(2) Another person
Revocation/Reduction
Time of Action Transmissibility Effect Liability (Fruits)
Birth, appearance, adoption
Within 4 years from birth, Transmitted to children Property returned/ value Fruits returned from the
legitimation and adoption and descendants upon (if sold)/ redeem filing of the complaint
the death of donor mortgage with right to
recover
Non-compliance with condition
Within 4 years from non- May be transmitted to Property returned, Fruits received after
compliance donor’s heirs and may be alienations and having failed to fulfill
exercised against donee’s mortgages void subject to condition returned
heirs rights of third persons in
good faith
Ingratitude
Within 1 year after Generally not transmitted Property returned, but Fruits received from the
knowledge of the fact to heirs of donor/ donee alienations and filing of the complaint
mortgages effected returned
before the notation of the
complaint for revocation
in the registry of property
subsist
Failure to reserve sufficient means for support
At any time, by the donor Reduced to the extent Donee entitled
or relatives entitled to Not transmissible necessary to provide
support support
PAGE 125
Time of Action Transmissibility Effect Liability (Fruits)

Inofficiousness for being in excess of what the donor can give by will
Within 5 years from the Transmitted to donor’s Donation takes effect on Donee entitled
death of the donor heirs the lifetime of donor.
Reduction only upon his
death with regard to the
excess
Fraud against creditors
Rescission within 4 years Transmitted to creditor’s Returned for the benefit Fruits returned/ if
from the perfection of heirs or successors-in- of the creditor who impossible, indemnify
donation/ knowledge of interest brought the action creditor for damages
the donation
PAGE 126
TRADITION where the delivery is effected solely by virtue of

CONCEPT an express provision of law
It is a derivative mode of acquiring ownership and
other real rights by virtue of which, there being
intention and capacity on the part of the grantor and
grantee and the pre-existence of said rights in the
estate of the grantor, they are transmitted to the Prescription
grantee through a just title.
DEFINITION
REQUISITES By prescription, one acquires ownership and other
(1) Pre-existence in the estate of the grantor of the real rights through the lapse of time in the manner
right to be transmitted and under the conditions laid down by law.
(2) Just cause or title for the transmission
(3) Intention on the part of the grantor to grant and In the same way, rights and conditions are lost by
on the part of the grantees to acquire prescription.
(4) Capacity to transmit and to acquire
(5) An act which gives it outward form, physically, It is a means of acquiring ownership and other real
symbolically, or legally rights or losing rights or actions to enforce such
rights through the lapse of time
PURPOSE
(1) Ownership is transferred, among other means, by RATIONALE
tradition. It is purely statutory in origin. It is founded on
(2) The delivery of a thing constitutes a necessary grounds of public policy which requires for the peace
and indispensable requisite for the purpose of of society, that juridical relations susceptible of
acquiring the ownership of the same by virtue of doubt and which may give rise to disputes, be fixed
a contract and established after the lapse of a determinate time
so that ownership and other rights may be certain for
KINDS those who have claim in them
(1) Real Tradition: physical delivery
(2) Constructive Tradition: when the delivery of the KINDS OF PRESCRIPTION
thing is not real or material but consists merely in (1) Acquisitive prescription
certain facts indicative of the same (2) Extinctive prescription
(a) Symbolical Tradition: done through the
delivery of signs or things which represent ACQUISITIVE PRESCRIPTION
that which is being transmitted (e.g. keys or (1) The acquisition of ownership and other real rights
title itself) through possession of a thing in the manner and
(b) Tradition by public instrument: consists in the condition provided by law
substitution of real delivery of possession by a (2) May be ordinary or extraordinary
public writing with the delivery of a document (a) Ordinary: requires possession of things in
which evidences the transaction good faith and with just title for the time fixed
(c) Tradicio longa manu: made by the grantor by law.
pointing out to the grantee the thing to be (b) Extraordinary: acquisition of ownership and
delivered other real rights without need of title or of
(d) Tradicio brevi manu: takes place when the good faith or any other condition
grantee is already in possession of the thing
(e.g. when the lessee buys the thing leased to Prescription where possession in good faith converted
him) into possession in bad faith:
(e) Tradicion constitutum possessorium: similar to Ordinary
brevi manu but in the opposite sense – when (1) Movables- 4 years
the owner alienates a thing but remains in (2) Immovables- 10 years
possession in another concept as lesee or
depositary Extraordinary:
(3) Quasi tradition: delivery of incorporeal things or (1) Movables- 8 years
rights by the use by the grantee of his rights with (2) Immovables- 30 years
the grantor’s consent
(4) Tradicion by operation of law: delivery which is not Note: Since the period of extraordinary prescription
included in the foregoing modes of delivery and for movables is two times longer than ordinary
PAGE 127
prescription (8:4) than ordinary prescription for NO PRESCRIPTION APPLICABLE

movables and three times longer (30:10) than that BY OFFENDER
for immovables, the period of possession in good Movables possessed through a crime can never be
faith should be computed twice or thrice, as the case acquired through prescription by the offender
may be, when tacked to the possession in bad faith.
REGISTERED LANDS - PD 1529 (AMENDING AND
As a mode of acquisition, prescription requires CODIFYING THE LAWS RELATIVE TO REGISTRATION OF
existence of following: PROPERTY AND FOR OTHER PURPOSES)
(1) Capacity of the claimant to acquire by No title to registered land in derogation of the title of
prescription; the registered owner shall be acquired by
(2) A thing capable of acquisition by prescription; prescription or adverse possession
(3) Adverse possession of the thing under certain
conditions; and RIGHTS NOT EXTINGUISHED BY PRESCRIPTION (NCC 1143)
(4) Lapse of time provided by law (1) To demand a right of way, regulated in NCC 649
(5) Good faith of the possessor (2) To bring an action to abate a public or private
(6) Proof of just title nuisance
Note: ACTION TO QUIET TITLE IF PLAINTIFF IS IN POSSESSION

(1) For extraordinary prescription, only first 4 are (1) When plaintiff is in possession of the property:
required the action to quiet title does not prescribe
(2) Possession has to be in the concept of an owner, (2) The reason is that the owner of the property or
public, peaceful, and uninterrupted (UPPO) right may wait until his possession is disturbed or
his title is assailed before taking steps to
EXTINCTIVE PRESCRIPTION vindicate his right
The loss or extinguishment of property rights or
actions through the possession by another of a thing VOID CONTRACTS
for the period provided by law or through failure to (1) The action or defense for the declaration of the
bring the necessary action to enforce one’s right inexistence of a contract does not prescribe (NCC
within the period fixed by law 1410)
(2) The title is susceptible to direct as well as to
Acquisitive Prescription Extinctive Prescription collateral attack (Ferrer v. Bautista, 1994)
Requires positive action of Requires inaction of the ACTION TO DEMAND PARTITION

the possessor (a claimant) owner out of possession No prescription shall run in favor of a co-owner or co-
who is not the or neglect of one with a heir against his co-owners or co-heirs so long as he
Owner right to bring his action expressly or impliedly recognizes the co-ownership
(NCC 494)
Applicable to all kinds of
Applicable to ownership
rights, whether real or
and other real rights PROPERTY OF PUBLIC DOMINION
personal
Prescription, both acquisitive and extinctive, does not
Vests the property and Vests the property and run against the State in the exercise of its sovereign
raise a new title in the raise a new title in the function to protect its interest EXCEPT with respect
occupant occupant to its patrimonial property which may be the object
Results in the acquisition Merely results in the loss of prescription (NCC 1113)
of ownership or other real of a real or personal right,
rights in a person as well or bars the cause of action PRESCRIPTION DISTINGUISHED FROM LACHES
as the loss of said to enforce said right Prescription Laches
ownership or real rights in
another Concerned with the fact of Concerned with the effect
delay of delay
Can be proven under the Should be affirmatively
general issue without its pleaded and proved to A question or a matter of Principally a question of
being affirmatively bar the action or claim of time inequity of permitting a
pleaded the adverse party claim to be enforced, this
inequity being founded on
some subsequent change
in the condition or the
PAGE 128
Prescription Laches (3) Actions that Prescribe in 6 Years (NCC 1145)

(a) Upon an oral contract
relation of the parties (b) Upon a quasi-contract
Statutory NOT statutory
(4) Actions that Prescribe in 4 Years (NCC 1145)
Applies at law Applies at equity (a) Upon an injury to the rights of the plaintiff
Cannot be availed of Being a defense of equity, (b) Upon a quasi-delict
unless it is especially need not be specifically BUT when the action arises from any act of any
pleaded as an affirmative pleaded public officer involving the exercise of powers
allegation arising from Martial Law including the arrest,
detention and/or trial of the plaintiff, the same
Based on a fixed time NOT based on a fixed must be brought within 1 year.
time
(5) Actions that Prescribe in One Year or Less (NCC
1147)
PRESCRIPTION OR LIMITATION OF ACTIONS (a) For forcible entry or unlawful detainer
TO RECOVER MOVABLES (b) For defamation
(1) Prescribe 8 years from the time the possession
thereof is lost (NCC 1140) (6) Other Actions that Prescribe in 1 Year under the
(2) However, the action shall not prosper if it is Civil Code
brought after 4 years when the possessor has (a) To recover possession de facto (NCC 554 (4)]
already acquired title by ordinary acquisitive (b) To revoke a donation on the ground of
prescription (NCC 1132) ingratitude (NCC 769)
(3) If the possessor acquired the movable in good (c) To rescind or recover damages if immovable is
faith at a public sale, the owner cannot obtain its sold with non-apparent burden or servitude
return without reimbursing the price paid [NCC 1560 (3,4)]
(d) To enforce warranty of solvency in assignment
TO RECOVER IMMOVABLES credits (NCC 629)
(1) Real actions prescribe after 30 years (NCC 1141)
(2) UNLESS the possessor has acquired ownership of (7) Where Periods of Other Actions Not Fixed in the
the immovable by ordinary acquisitive Civil Code and in Other Laws
prescription through possession of 10 years (NCC All other actions whose periods are not fixed in
1134) the Civil Code or in other laws must be brought
(3) Action for reconveyance within 5 years from the time the right of action
(a) Based on fraud: prescribes 4 years from the accrues (NCC 1149)
discovery of fraud
(b) Based on implied or constructive trust: 10 years (8) Interruption (NCC 1155)
from the alleged fraudulent registration or The prescription of actions is interrupted when:
date of issuance of certificate of title over the (a) They are filed before the court
property (b) When there is a written extrajudicial demand
OTHER ACTIONS by the creditors
(1) Action to foreclose mortgage: prescribes after 10 (c) When there is any written acknowledgment of
years from the time the obligation secured by the the debt by the debtor
mortgage becomes due and demandable
(2) Actions that Prescribe in 10 Years (NCC 1144) Civil actions are deemed commenced from the
(a) Upon a written contract date of the filing and docketing of the complaint
(b) Upon an obligation created by law with the Clerk of Court [Cabrera v. Riano (1963)]
(c) Upon a judgment
A written extrajudicial demand wipes out the
The computation of the period of prescription of period that has already elapsed and starts anew
any cause or right of action, which is the same as the prescriptive period [The Overseas Bank of
saying prescription of the action, should start Manila v. Geraldez, (1979)]
from the date the cause of action accrues or from
the day the right of the plaintiff is violated. Not all acts of acknowledgement of a debt
(Nabus v. CA, 1991) interrupt prescription. To produce such effect, the
acknowledgment must be “written”, so that the
payment, if not coupled with the communication
PAGE 129
signed by the payor would interrupt the running

of the period of prescription [PNB v. Osete (1968)]
PAGE 130
UP COLLEGE OF LAW OBLIGATIONS BAR OPERATIONS COMMISSION
PAGE 131
Definition FROM THE AFFIRMATIVENESS OR

NEGATIVENESS OF THE OBLIGATION:
ARTICLE 1156 (1) Positive/affirmative - obligation to give or to do
Art. 1156. An obligation is a juridical necessity to give, (2) Negative – obligation not to do or not to give
to do or not to do.
FROM THE VIEWPOINT OF PERSONS OBLIGED:
(1) Unilateral – only one of the parties is bound
(2) Bilateral – both parties are bound
(a) Reciprocal – performance by one is
Elements of an Obligation dependent on the other
(b) Non-reciprocal – performance by one is
ELEMENTS OF AN OBLIGATION [De Leon, 2003] independent of the other [Paras, 2008]
(1) ACTIVE SUBJECT (Obligee/Creditor): The person
who has the right or power to demand the
prestation.
(2) PASSIVE SUBJECT (Obligor/Debtor): The person
bound to perform the prestation.
Sources of Obligations, Arts.
(3) PRESTATION (Object): The conduct required to
be observed by the debtor/obligor (to give, to do,
1156-1157
or not to do).
SINGLE ACT OR OMISSION CAN GIVE RISE TO
(4) VINCULUM JURIS (Juridical or Legal Tie; Efficient
Cause): That which binds or connects the parties DIFFERENT CAUSES OF ACTION
to the obligation. Barredo vs Garcia (1942):
“…[A] concurrence of scope in regard to negligent
acts does not destroy the distinction between the
civil liability arising from a crime and the
responsibility for cuasi-delitos or culpa extra-
Different Kinds of Prestations contractual. The same negligent act causing
damages may produce civil liability arising from a
(1) TO GIVE: real obligation; to deliver either (1) a crime... or create an action for cuasi-delito or culpa
specific or determinate thing, or (2) a generic or extra-contractual.”
indeterminate thing.
(2) TO DO: positive personal obligation; includes all NATURAL OBLIGATIONS
kinds of work or service. ARTICLE 1423
(3) NOT TO DO: negative personal obligation; to Art. 1423. Obligations are civil or natural. Civil
abstain from doing an act; includes the obligation obligations give a right of action to compel their
not to give. performance. Natural obligations, not being based
on positive law but on equity and natural law, do not
grant a right of action to enforce their performance,
but after voluntary fulfillment by the obligor, they
Classification of Obligations authorize the retention of what has been delivered or
rendered by reason thereof. Some natural
obligations are set forth in the following articles.
FROM THE VIEWPOINT OF “SANCTION”:
(1) Civil obligation (or perfect obligation) – the
sanction is judicial process ARTICLE 1424
(2) Natural obligation – the sanction is the law Art. 1424. When a right to sue upon a civil obligation
(3) Moral obligation (or imperfect obligation) – the has lapsed by extinctive prescription, the obligor who
sanction is conscience or morality voluntarily performs the contract cannot recover
what he has delivered or the value of the service he
FROM THE VIEWPOINT OF SUBJECT MATTER: has rendered.
(1) Real obligation – obligation to give
(2) Personal obligation – obligation to do or not to ARTICLE 1425
do Art. 1425. When without the knowledge or against
the will of the debtor, a third person pays a debt
which the obligor is not legally bound to pay because
PAGE 132
the action thereon has prescribed, but the debtor

later voluntarily reimburses the third person, the ARTICLE 2143
obligor cannot recover what he has paid. Art. 2143. The provisions for quasi-contracts in this
Chapter do not exclude other quasi-contracts which
ARTICLE 1426 may come within the purview of the preceding article.
Art. 1426. When a minor between eighteen and
twenty-one years of age who has entered into a Negotiorum Gestio
contract without the consent of the parent or ARTICLE 2144
guardian, after the annulment of the contract Art. 2144. Whoever voluntarily takes charge of the
voluntarily returns the whole thing or price received, agency or management of the business or property
notwithstanding the fact the he has not been of another, without any power from the latter, is
benefited thereby, there is no right to demand the obliged to continue the same until the termination of
thing or price thus returned. the affair and its incidents, or to require the person
concerned to substitute him, if the owner is in a
ARTICLE 1427 position to do so. This juridical relation does not arise
Art. 1427. When a minor between eighteen and in either of these instances:
twenty-one years of age, who has entered into a
contract without the consent of the parent or (1)When the property or business is not neglected or
guardian, voluntarily pays a sum of money or delivers abandoned;
a fungible thing in fulfillment of the obligation, there (2) If in fact the manager has been tacitly authorized
shall be no right to recover the same from the by the owner.
obligee who has spent or consumed it in good faith.
In the first case, the provisions of Articles 1317, 1403,
ARTICLE 1428 No. 1, and 1404 regarding unauthorized contracts
shall govern.
Art. 1428. When, after an action to enforce a civil
obligation has failed the defendant voluntarily
In the second case, the rules on agency in Title X of
performs the obligation, he cannot demand the
this Book shall be applicable.
return of what he has delivered or the payment of the
value of the service he has rendered.
ARTICLE 2145
Art. 2145. The officious manager shall perform his
duties with all the diligence of a good father of a
ARTICLE 1429 family, and pay the damages which through his fault
or negligence may be suffered by the owner of the
Art. 1429. When a testate or intestate heir voluntarily
property or business under management.
pays a debt of the decedent exceeding the value of the
property which he received by will or by the law of
The courts may, however, increase or moderate the
intestacy from the estate of the deceased, the
indemnity according to the circumstances of each
payment is valid and cannot be rescinded by the
case.
payer.
ARTICLE 2146
ARTICLE 1430
Art. 2146. If the officious manager delegates to
Art. 1430. When a will is declared void because it has
another person all or some of his duties, he shall be
not been executed in accordance with the formalities
liable for the acts of the delegate, without prejudice
required by law, but one of the intestate heirs, after
to the direct obligation of the latter toward the
the settlement of the debts of the deceased, pays a
owner of the business.
legacy in compliance with a clause in the defective
The responsibility of two or more officious managers
will, the payment is effective and irrevocable.
shall be solidary, unless the management was
assumed to save the thing or business from
EXTRA-CONTRACTUAL OBLIGATIONS imminent danger.
QUASI-CONTRACTS
ARTICLE 2142
ARTICLE 2147
Art. 2142. Certain lawful, voluntary and unilateral
Art. 2147. The officious manager shall be liable for
acts give rise to the juridical relation of quasi-
any fortuitous event:
contract to the end that no one shall be unjustly
enriched or benefited at the expense of another.
PAGE 133
(1) If he undertakes risky operations which the owner owner, and there shall be no right of action between
was not accustomed to embark upon; the owner and third persons. These provisions shall
(2) If he has preferred his own interest to that of the not apply:
owner; (1) If the owner has expressly or tacitly ratified the
(3) If he fails to return the property or business after management, or
demand by the owner; (2) When the contract refers to things pertaining to
(4) If he assumed the management in bad faith. the owner of the business.
ARTICLE 2148 ARTICLE 2153

Art. 2148. Except when the management was Art. 2153. The management is extinguished:
assumed to save property or business from imminent (1) When the owner repudiates it or puts an end
danger, the officious manager shall be liable for thereto;
fortuitous events: (2) When the officious manager withdraws from the
(1) If he is manifestly unfit to carry on the management, subject to the provisions of Article
management; 2144;
(2) If by his intervention he prevented a more (3) By the death, civil interdiction, insanity or
competent person from taking up the insolvency of the owner or the officious manager.
management.
Solutio Indebiti
Art. 2149. The ratification of the management by the Art. 2154. If something is received when there is no
owner of the business produces the effects of an right to demand it, and it was unduly delivered
express agency, even if the business may not have through mistake, the obligation to return it arises.
been successful.
ARTICLE 2155
ARTICLE 2150 Art. 2155. Payment by reason of a mistake in the
Art. 2150. Although the officious management may construction or application of a doubtful or difficult
not have been expressly ratified, the owner of the question of law may come within the scope of the
property or business who enjoys the advantages of preceding article.
the same shall be liable for obligations incurred in
his interest, and shall reimburse the officious ARTICLE 2156
manager for the necessary and useful expenses and Art. 2156. If the payer was in doubt whether the debt
for the damages which the latter may have suffered was due, he may recover if he proves that it was not
in the performance of his duties. due.
The same obligation shall be incumbent upon him
ARTICLE 2157
when the management had for its purpose the
prevention of an imminent and manifest loss, Art. 2157. The responsibility of two or more payees,
although no benefit may have been derived. when there has been payment of what is not due, is
solidary.
ARTICLE 2151
ARTICLE 2158
Art. 2151. Even though the owner did not derive any
benefit and there has been no imminent and Art. 2158. When the property delivered or money paid
manifest danger to the property or business, the belongs to a third person, the payee shall comply
owner is liable as under the first paragraph of the with the provisions of Article 1984.
preceding article, provided:
(1) The officious manager has acted in good faith, ARTICLE 2159
and Art. 2159. Whoever in bad faith accepts an undue
(2) The property or business is intact, ready to be payment, shall pay legal interest if a sum of money is
returned to the owner. involved, or shall be liable for fruits received or which
should have been received if the thing produces
ARTICLE 2152 fruits.
Art. 2152. The officious manager is personally liable
for contracts which he has entered into with third He shall furthermore be answerable for any loss or
persons, even though he acted in the name of the impairment of the thing from any cause, and for
PAGE 134
damages to the person who delivered the thing, until Art. 2166. When the person obliged to support an
it is recovered. orphan, or an insane or other indigent person
unjustly refuses to give support to the latter, any
ARTICLE 2160 third person may furnish support to the needy
Art. 2160. He who in good faith accepts an undue individual, with right of reimbursement from the
payment of a thing certain and determinate shall person obliged to give support. The provisions of this
only be responsible for the impairment or loss of the article apply when the father or mother of a child
same or its accessories and accessions insofar as he under eighteen years of age unjustly refuses to
has thereby been benefited. If he has alienated it, he support him.
shall return the price or assign the action to collect
the sum. ARTICLE 2167
Art. 2167. When through an accident or other cause a
ARTICLE 2161 person is injured or becomes seriously ill, and he is
Art. 2161. As regards the reimbursement for treated or helped while he is not in a condition to
improvements and expenses incurred by him who give consent to a contract, he shall be liable to pay
unduly received the thing, the provisions of Title V of for the services of the physician or other person
Book II shall govern. aiding him, unless the service has been rendered out
of pure generosity.
ARTICLE 2162
ARTICLE 2168
Art. 2162. He shall be exempt from the obligation to
restore who, believing in good faith that the payment Art. 2168. When during a fire, flood, storm, or other
was being made of a legitimate and subsisting claim, calamity, property is saved from destruction by
destroyed the document, or allowed the action to another person without the knowledge of the owner,
prescribe, or gave up the pledges, or cancelled the the latter is bound to pay the former just
guaranties for his right. He who paid unduly may compensation.
proceed only against the true debtor or the
guarantors with regard to whom the action is still ARTICLE 2169
effective. Art. 2169. When the government, upon the failure of
any person to comply with health or safety
ARTICLE 2163 regulations concerning property, undertakes to do
Art. 2163. It is presumed that there was a mistake in the necessary work, even over his objection, he shall
the payment if something which had never been due be liable to pay the expenses.
or had already been paid was delivered; but he from
whom the return is claimed may prove that the ARTICLE 2170
delivery was made out of liberality or for any other Art. 2170. When by accident or other fortuitous event,
just cause. movables separately pertaining to two or more
persons are commingled or confused, the rules on
OTHER QUASI-CONTRACTS co-ownership shall be applicable.
ARTICLE 2164
Art. 2164. When, without the knowledge of the ARTICLE 2171
person obliged to give support, it is given by a Art. 2171. The rights and obligations of the finder of
stranger, the latter shall have a right to claim the lost personal property shall be governed by Articles
same from the former, unless it appears that he gave 719 and 720.
it out of piety and without intention of being repaid.
ARTICLE 2172
ARTICLE 2165
Art. 2172. The right of every possessor in good faith to
Art. 2165. When funeral expenses are borne by a reimbursement for necessary and useful expenses is
third person, without the knowledge of those governed by Article 546.
relatives who were obliged to give support to the
deceased, said relatives shall reimburse the third ARTICLE 2173
person, should the latter claim reimbursement.
Art. 2173. When a third person, without the
knowledge of the debtor, pays the debt, the rights of
ARTICLE 2166
the former are governed by Articles 1236 and 1237.
PAGE 135
ARTICLE 2174 Guardians are liable for damages caused by the

Art. 2174. When in a small community a nationality of minors or incapacitated persons who are under their
the inhabitants of age decide upon a measure for authority and live in their company.
protection against lawlessness, fire, flood, storm or The owners and managers of an establishment or
other calamity, any one who objects to the plan and enterprise are likewise responsible for damages
refuses to contribute to the expenses but is benefited caused by their employees in the service of the
by the project as executed shall be liable to pay his branches in which the latter are employed or on the
share of said expenses. occasion of their functions.
ARTICLE 2175
Employers shall be liable for the damages caused by
their employees and household helpers acting within
Art. 2175. Any person who is constrained to pay the the scope of their assigned tasks, even though the
taxes of another shall be entitled to reimbursement former are not engaged in any business or industry.
from the latter.
The State is responsible in like manner when it acts
QUASI-DELICTS through a special agent; but not when the damage
ARTICLE 2176 has been caused by the official to whom the task
Art. 2176. Whoever by act or omission causes damage done properly pertains, in which case what is
to another, there being fault or negligence, is obliged provided in Article 2176 shall be applicable.
to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual Lastly, teachers or heads of establishments of arts
relation between the parties, is called a quasi-delict and trades shall be liable for damages caused by
and is governed by the provisions of this Chapter. their pupils and students or apprentices, so long as
they remain in their custody.
ARTICLE 2177
The responsibility treated of in this article shall cease
Art. 2177. Responsibility for fault or negligence under when the persons herein mentioned prove that they
the preceding article is entirely separate and distinct observed all the diligence of a good father of a family
from the civil liability arising from negligence under to prevent damage.
the Penal Code. But the plaintiff cannot recover
damages twice for the same act or omission of the ARTICLE 2181
defendant.
Art. 2181. Whoever pays for the damage caused by his
dependents or employees may recover from the
ARTICLE 2178
latter what he has paid or delivered in satisfaction of
Art. 2178. The provisions of Articles 1172 to 1174 are the claim.
also applicable to a quasi-delict.
ARTICLE 2182
ARTICLE 2179
Art. 2182. If the minor or insane person causing
Art. 2179. When the plaintiff's own negligence was damage has no parents or guardians, the minor or
the immediate and proximate cause of his injury, he insane person shall be answerable with his own
cannot recover damages. But if his negligence was property in an action against him where a guardian
only contributory, the immediate and proximate ad litem shall be appointed.
cause of the injury being the defendant's lack of due
care, the plaintiff may recover damages, but the ARTICLE 2183
courts shall mitigate the damages to be awarded.
Art. 2183. The possessor of an animal or whoever
may make use of the same is responsible for the
ARTICLE 2180
damage which it may cause, although it may escape
Art. 2180. The obligation imposed by Article 2176 is or be lost. This responsibility shall cease only in case
demandable not only for one's own acts or the damage should come from force majeure or from
omissions, but also for those of persons for whom the fault of the person who has suffered damage.
one is responsible.
ARTICLE 2184
The father and, in case of his death or incapacity, the
mother, are responsible for the damages caused by Art. 2184. In motor vehicle mishaps, the owner is
the minor children who live in their company. solidarily liable with his driver, if the former, who was
in the vehicle, could have, by the use of the due
diligence, prevented the misfortune. It is disputably
PAGE 136
presumed that a driver was negligent, if he had been (1) By the explosion of machinery which has not been
found guilty or reckless driving or violating traffic taken care of with due diligence, and the
regulations at least twice within the next preceding inflammation of explosive substances which have
two months. not been kept in a safe and adequate place;
(2) By excessive smoke, which may be harmful to
If the owner was not in the motor vehicle, the persons or property;
provisions of Article 2180 are applicable. (3) By the falling of trees situated at or near
highways or lanes, if not caused by force majeure;
ARTICLE 2185 (4) By emanations from tubes, canals, sewers or
Art. 2185. Unless there is proof to the contrary, it is deposits of infectious matter, constructed without
presumed that a person driving a motor vehicle has precautions suitable to the place.
been negligent if at the time of the mishap, he was
violating any traffic regulation. ARTICLE 2192
ARTICLE 2186 Art. 2192. If damage referred to in the two preceding
Art. 2186. Every owner of a motor vehicle shall file articles should be the result of any defect in the
with the proper government office a bond executed construction mentioned in Article 1723, the third
by a government-controlled corporation or office, to person suffering damages may proceed only against
answer for damages to third persons. The amount of the engineer or architect or contractor in accordance
the bond and other terms shall be fixed by the with said article, within the period therein fixed.
competent public official.
ARTICLE 2193
ARTICLE 2187 Art. 2193. The head of a family that lives in a building
Art. 2187. Manufacturers and processors of or a part thereof, is responsible for damages caused
foodstuffs, drinks, toilet articles and similar goods by things thrown or falling from the same.
shall be liable for death or injuries caused by any
noxious or harmful substances used, although no ARTICLE 2194
contractual relation exists between them and the Art. 2194. The responsibility of two or more persons
consumers. who are liable for quasi-delict is solidary.
ARTICLE 2188
Art. 2188. There is prima facie presumption of
negligence on the part of the defendant if the death
or injury results from his possession of dangerous
Nature and Effect of
weapons or substances, such as firearms and poison, Obligations
except when the possession or use thereof is
indispensable in his occupation or business.
OBLIGATION TO GIVE
A DETERMINATE OR SPECIFIC THING
ARTICLE 2189
AN INDETERMINATE OR GENERIC THING
Art. 2189. Provinces, cities and municipalities shall be
liable for damages for the death of, or injuries Specific Thing Generic Thing Limited Generic
suffered by, any person by reason of the defective Thing
condition of roads, streets, bridges, public buildings, Particularly Object is When the
and other public works under their control or designated or designated only generic objects
supervision. physically by its class/ are confined to
segregated from genus/ species. a particular
ARTICLE 2190 all other of the Debtor can give class.
Art. 2190. The proprietor of a building or structure is same class; anything of the
responsible for the damages resulting from its total identified by same class as
or partial collapse, if it should be due to the lack of individuality. long as it is of
necessary repairs. the same kind.
Cannot be Can be
ARTICLE 2191 substituted. substituted by
any of the same
Art. 2191. Proprietors shall also be responsible for
class and same
damages caused:
kind.
PAGE 137
Duties of the Debtor Rights of the creditor

Duties of the Debtor Rights of the creditor
To Give Specific Thing (3) To pay for damages in what should not
(1) To preserve or take (1) To compel specific case of breach have been done,
care of the thing due performance because of :
(2) To deliver the thing (2) To recover damages (a) the very nature of
itself in case of breach of the act itself;
(3) To deliver the fruits of the obligation, (b) rights acquired by
the thing exclusive or in third persons who
(4) To deliver the addition to specific acted in good
accessions and performance faith;
accessories (3) Entitlement to fruits (c) when the effects
(5) To pay for damages in and interests from of the acts
case of breach the time the prohibited are
obligation to deliver definite in
arises character and will
not cease even if
To Give Generic Thing
the thing
(1) To deliver a thing of (1) To ask for
prohibited be
the quality intended by performance of the
undone.
the parties taking into obligation
consideration the (2) To ask that the
purpose of the obligation be
BREACH OF OBLIGATIONS
obligation and other complied with by a
COMPLETE FAILURE TO PERFORM
circumstances third person at the
(2) Creditor cannot expense of the
Substantial Breach Slight or Casual Breach
demand a thing of debtor
superior quality (3) To recover damages (1) Total breach (1) Partial breach
neither can the debtor in case of breach of (2) Amounts to non- (2) Obligation is partially
deliver a thing of obligation performance; basis for performed, or
inferior quality rescission (resolution) substantial
(3) To be liable for under Art. 1191 and for performance in good
damages in case of payment of damages. faith
breach (3) Gives rise to liability
for damages only
OBLIGATION TO DO OR NOT TO DO
DEFAULT, DELAY, OR MORA
Duties of the Debtor Rights of the creditor DEFAULT or DELAY (MORA): failure to perform an
obligation on time which constitutes breach of the
To do obligation [De Leon, 2003].
(1) To do it (1) To compel
Rules on Mora, Delay or Default
(2) To shoulder the performance
cost of having (2) To recover damages
someone else do it where personal Unilateral Obligations Reciprocal Obligations
(3) To undo what has qualifications of the
been poorly done debtor are involved General Rule: General Rule:
(4) To pay for “No demand, no delay.” Delay occurs from the
damages in case moment one party
of breach The mere expiration of fulfills his undertaking,
Not to do the period fixed by the while the other does not
parties is not enough in comply or is not ready to
(1) Not to do what should (1) To ask to undo what
order that the debtor comply in a proper
not be done should not be done
may incur in delay. manner with what is
(2) To shoulder the cost (2) To recover damages,
incumbent upon him.
of undoing what where it would be
Those obliged to deliver
should not have been physically or legally
or to do something incur No delay if neither party
done impossible to undo
PAGE 138
Unilateral Obligations Reciprocal Obligations Mora Solvendi Mora Accipiendi
in delay from the time performs his the debtor within the prestation.
the obligee judicially or undertaking [Art. 1169, period agreed upon. (3) Creditor refuses the
extrajudicially demands par. 2]. (3) Demand, judicial or performance without
from them the extra-judicial, by the just cause.
fulfillment of their creditor.
obligation [Art. 1169 par.
1]. Effects
(1) The debtor is liable for (1) The responsibility of
Exceptions: damages. the debtor is reduced
ARTICLE 1169 (2) The debtor is liable to fraud and gross
Art. 1169. par 2-3: even if the loss is due negligence.
xxx to fortuitous events. (2) The debtor is
However, the demand by the creditor shall not be (3) For determinate exempted from risk of
necessary in order that delay may exist: objects, the debtor loss of the thing
(1) When the obligation or the law expressly so shall bear the risk of which is borne by the
declares; or loss. creditor.
(2) When from the nature and the circumstances of (3) The expenses
the obligation it appears that the designation of incurred by the
the time when the thing is to be delivered or the debtor for the
service is to be rendered was a controlling motive preservation of the
for the establishment of the contract; (time is of thing after the mora
the essence) or shall be chargeable
(3) When demand would be useless, as when the to the creditor.
obligor has rendered it beyond his power to (4) If the obligation bears
perform. interest, the debtor
does not have to pay
In reciprocal obligations, neither party incurs in delay from the time of
if the other does not comply or is not ready to comply delay.
in a proper manner with what is incumbent upon (5) The creditor is liable
him. From the moment one of the parties fulfills his for damages.
obligation, delay by the other begins. (6) The debtor may
relieve himself of the
obligation by
(1) Mora solvendi- Delay on the part of the debtor to consigning the thing.
fulfill his obligation either to give (ex re) or to do
(ex persona)
FRAUD (DOLO) IN THE PERFORMANCE OF OBLIGATION
No Mora Solvendi in:
Fraud (dolo): deliberate or intentional evasion of the
(a) Negative obligations because delay is
normal fulfillment of an obligation [De Leon, 2003].
impossible [De Leon, 2003]
(b) Natural obligations [Tolentino, 1987]
Waiver of future fraud is void. [Art. 1171]
(2) Mora accipiendi- Delay on the part of the creditor
Past Fraud: Can be subject of a valid waiver by the
to accept the performance of the obligation.
aggrieved party. [De Leon, 2003]
(3) Compensatio morae- Delay of both parties in
reciprocal obligations. Effect: As if there is no
default. Woodhouse vs. Halili (1953):
“...[I]n order that fraud may vitiate consent, it must
be the dolo causante and not merely the dolo
Mora Solvendi Mora Accipiendi incidente, inducement to the making of the contract.
The false representation was used by plaintiff to get
Requisites from defendant a bigger share of net profits. This is
(1) Obligation must be (1) Debtor offers just incidental to the matter in agreement. Because
liquidated, due and performance. despite plaintiff’s deceit, respondent would have still
demandable. (2) Offer must be in entered into the contract.”
(2) Non-performance by compliance with the
PAGE 139
NEGLIGENCE (CULPA) IN THE PERFORMANCE OF ARTICLE 2000

OBLIGATION Art. 2000. The responsibility referred to in the two
Negligence or fault (culpa): Omission of that diligence preceding articles shall include the loss of, or injury
which is required by the nature of the obligation and to the personal property of the guests caused by the
corresponds with the circumstances of the person, of servants or employees of the keepers of hotels or
the time and of the place. [Art. 1173] inns as well as strangers; but not that which may
proceed from any force majeure. The fact that
DILIGENCE NORMALLY REQUIRED IS ORDINARY DILIGENCE travelers are constrained to rely on the vigilance of
OR DILIGENCE OF A GOOD FATHER OF A FAMILY; the keeper of the hotels or inns shall be considered
EXCEPTIONS IN ARTS. 1998-2002. in determining the degree of care required of him.
Diligence Required [De Leon, 2003] ARTICLE 2001
(a) By stipulation: that agreed upon by the parties.
(b) By law: in the absence of stipulation, that required Art. 2001. The act of a thief or robber, who has
by law in the particular case. entered the hotel is not deemed force majeure,
(c) Diligence of a good father of a family: if both the unless it is done with the use of arms or through an
contract and law are silent. irresistible force.
(d) Future Negligence: may be waived except in cases
where the nature of the obligation or the public ARTICLE 2002
requires another standard of care (i.e. Art. 2002. The hotel-keeper is not liable for
extraordinary diligence as for a common carrier) compensation if the loss is due to the acts of the
guest, his family, servants or visitors, or if the loss
Exceptions: arises from the character of the things brought into
ARTICLE 1733 the hotel.
Art. 1733. Common carriers, from the nature of their
business and for reasons of public policy, are bound Mandarin Villa Inc. v. CA (1996):
to observe extraordinary diligence in the vigilance Test of negligence: Did the defendant in doing the
over the goods and for the safety of the passengers alleged negligent act use the reasonable care and
transported by them, according to all the caution, which an ordinary and prudent person
circumstances of each case. would have used in the same situation? If not, then
he is guilty of negligence.
Such extraordinary diligence in the vigilance over the
goods is further expressed in Articles 1734, 1735, and
EXTENT OF DAMAGES TO BE AWARDED
1745, Nos. 5, 6, and 7, while the extraordinary
diligence for the safety of the passengers is further Bad Faith Good Faith
set forth in Articles 1755 and 1756. Debtor is liable for all Debtor is liable only for
damages, which can be the natural and probable
ARTICLE 1998 reasonably attributed to consequences of the
the non-performance of breach of obligation and
Art. 1998. The deposit of effects made by the
the obligation. Any waiver fortuitous events.
travelers in hotels or inns shall also be regarded as
or renunciation made in
necessary. The keepers of hotels or inns shall be
anticipation of such
responsible for them as depositaries, provided that
liability is null and void.
notice was given to them, or to their employees, of
the effects brought by the guests and that, on the
part of the latter, they take the precautions which Culpa Contractual Culpa Aquiliana
said hotel-keepers or their substitutes advised Negligence is merely Negligence is
relative to the care and vigilance of their effects. incidental in the substantive and
performance of an independent.
ARTICLE 1999 obligation.
Art. 1999. The hotel-keeper is liable for the vehicles, There is always a pre- There may or may not be
animals and articles which have been introduced or existing contractual a pre-existing
placed in the annexes of the hotel. relation. contractual obligation.
The source of obligation The source of obligation
of defendant to pay is the defendant’s
damages is the breach or negligence itself.
non-fulfillment of the
PAGE 140
Culpa Contractual Culpa Aquiliana (e) debtor has promised to deliver the same thing to
two or more persons who do not have the same
contract.
interest [Art. 1165 par. 3]
Proof of the existence of The negligence of the (f) the thing is lost due to the obligor’s fraud,
the contract and of its defendant must be negligence, delay or contravention of the tenor of
breach or non-fulfillment proved. the obligation [Art. 1170]
is sufficient prima facie (g) the obligation to deliver a specific thing arises
to warrant recovery. from a crime [Art. 1268]
Proof of diligence in the Proof of diligence in the (h) the object is a generic thing, i.e. the genus never
selection and supervision selection and perishes
of the employees is NOT supervision of the
available as defense. employee is a defense. Requisites for Exemption
(a) The event must be independent of the debtor’s
CONTRAVENTION OF THE TENOR OF OBLIGATION will (fraud or negligence).
Contravention of the tenor of obligation: Violation of (b) The event must be unforeseeable or inevitable.
the terms and conditions stipulated in the obligation, (c) The event renders it impossible for debtor to
which must not be due to a fortuitous event or force fulfill his obligation in a normal manner.
majeure [De Leon, 2003]. (d) The debtor must be free from any participation in
the aggravation of the injury to the creditor
“In any manner contravenes the tenor” means any [Tolentino, 1987; De Leon, 2003].
illicit act, which impairs the strict and faithful (e) It must be the only and sole cause, not merely a
fulfillment of the obligation, or every kind of proximate cause.
defective performance [Tolentino, 1987].
LEGAL EXCUSE FOR BREACH OF OBLIGATION - REMEDIES AVAILABLE TO CREDITOR IN CASE

FORTUITOUS EVENT; REQUISITES OF BREACH
Fortuitous event (force majeure): Any event which SPECIFIC PERFORMANCE
could not be foreseen, or which though foreseen is Performance by the debtor of the prestation itself.
inevitable [Art. 1174].
SUBSTITUTED PERFORMANCE BY A THIRD PERSON OF
A happening independent of the will of the debtor ANOTHER’S OBLIGATION TO DELIVER A GENERIC THING OR
and which makes the normal fulfillment of the OF AN OBLIGATION TO DO, UNLESS IT IS PURELY PERSONAL
obligation impossible [De Leon, 2003]. ACT.
Substituted performance: Someone else performs or
(1) Act of God: An accident, due directly or exclusively something else is performed at the debtor’s expense.
to natural causes without human intervention,
which by no amount of foresight, pains or care, RESCISSION (RESOLUTION IN RECIPROCAL OBLIGATIONS)
reasonably to have been expected, could have Right to rescind or cancel the contract.
been prevented. Rescission / Resolution Rescission [Art. 1380]
(2) Act of Man: Force majeure is a superior or [Art. 1191]
irresistible force, which is essentially an act of
Based on non-performance Based on lesion or fraud
man; includes unavoidable accidents, even if
or non-fulfillment of upon creditors.
there has been an intervention of human
obligation.
element, provided that no fault or negligence can
be imputed to the debtor. Action is instituted only by Action is instituted by
the injured party. either party or by a third
person.
Liability in case of Fortuitous Event
No person shall be responsible for fortuitous events, In some cases, court may Court cannot grant a
UNLESS: grant a term. period or term within
(a) expressly specified by law [Arts. 552 (2), 1942, which one must comply.
2147, 2148, 2159] Nonperformance by the Nonperformance by the
(b) liability specified by stipulation other party is important. other party is
(c) the nature of the obligations requires assumption immaterial.
DAMAGES, IN ANY EVENT
of risk [Art. 1174]
ARTICLE 1170
(d) debtor is guilty of concurrent or contributory
negligence Art. 1170. Those who in the performance of their
obligations are guilty of fraud, negligence, or delay,
PAGE 141
and those who in any manner contravene the tenor

thereof, are liable for damages. ACCION DIRECTA [ARTS. 1652, 1608, 1729, 1893]
SUBSIDIARY REMEDIES OF CREDITORS [ART. 1177] ARTICLE 1652
General rule: Contracts are binding only between the Art. 1652. The sublessee is subsidiarily liable to the
parties thereto, their heirs, assignees, and the estate lessor for any rent due from the lessee. However, the
[Art. 1311]. sublessee shall not be responsible beyond the
Exceptions: Accion subrogatoria and accion pauliana amount of rent due from him, in accordance with the
terms of the sublease, at the time of the extra-
ACCION SUBROGATORIA judicial demand by the lessor.
Right of creditor to exercise all of the rights and
bring all of the actions which his debtor may have Payments of rent in advance by the sublessee shall
against third persons; novation by change of debtor be deemed not to have been made, so far as the
[Art. 1291, par. 3]. lessor’s claim is concerned, unless said payment
Requisites: were effected in virtue of the custom of the place.
(1) Debtor to whom the right of action properly
pertains must be indebted to the creditor ARTICLE 1608
(2) The debt is due and demandable
(3) The creditor must be prejudiced by the failure of Art. 1608. The vendor may bring his action against
the debtor to collect his own debt from third every possessor whose right is derived from the vendee,
persons, either through malice or negligence even if in the second contract no mention should have
(4) The debtor’s assets are insufficient (debtor is been made of the right to repurchase, without
insolvent) prejudice to the provisions of the Mortgage Law and
(5) The right of action is not purely personal to the the Land Registration Law with respect to third
debtor persons.
ACCION PAULIANA ARTICLE 1729

Rescission, which involves the right of the creditor to Art. 1729. Those who put their labor upon or furnish
attack or impugn by means of a rescissory action any materials for a piece of work undertaken by the
act of the debtor which is in fraud and to the contractor have an action against the owner up to the
prejudice of his rights as creditor. amount owing from the latter to the contractor at the
time the claim is made. However, the following shall
Rescinds the contract entered into in fraud of not prejudice the laborers, employees and furnishers
creditors. of materials:
Requisites: (CASAL) 1. Payments made by the owner to the contractor
(1) There is a credit in favor of plaintiff prior to before they are due
alienation. 2. Renunciation by the contractor of any amount
(2) The debtor has performed a subsequent contract due him from the owner
conveying a patrimonial benefit to third person(s). This article is subject to the provisions of special
(3) The creditor has no other legal remedy to satisfy laws.
his claim.
(4) The debtor’s acts are fraudulent to the prejudice ARTICLE 1893
of the creditor. Art. 1893. In the cases mentioned in Nos. 1 and 2 of
(5) The third person who received the property is an the preceding article, the principal may furthermore
accomplice in the fraud. bring an action against the substitute with respect to
the obligations which the latter has contracted under
the substitution.
Accion Subrogatoria Accion Pauliana
Not necessary that Credit must exist before
Siguan v. Lim (1999):
creditor’s claim is prior to the fraudulent act
“Petitioner cannot invoke the credit of a different
the acquisition of the right
creditor to justify the rescission of the subject deed of
by the debtor
donation, because the only creditor who may benefit
No need for fraudulent Fraudulent intent is from the rescission is the creditor who brought the
intent required if the contract action; those who are strangers to the action cannot
rescinded is onerous benefit from its effects.”
No period for prescription Prescribes in 4 years
from the discovery of the
fraud
PAGE 142
Kinds of Civil Obligations POTESTIVE – CASUAL OR MIXED

Casual Condition: The fulfillment of the condition
depends upon chance and/or upon the will of a third
PURE, ARTS. 1179-1180 person [Art. 1182].
ARTICLE 1179
Art. 1179. Every obligation, whose performance does Mixed Condition: The fulfillment of the condition
not depend upon a future or uncertain event, or upon depends partly upon the will of a party to the
a past event unknown to the parties, is demandable obligation and partly upon chance and/or will of a
at once. third person.
Every obligation which contains a resolutory OBLIGATIONS SUBJECT TO POTESTATIVE SUSPENSIVE

condition shall also be demandable, without CONDITIONS ARE VOID [ART. 1182].
prejudice to the effects of the happening of the ARTICLE 1182
event. Art. 1182. When the fulfillment of the condition
depends upon the sole will of the debtor, the
ARTICLE 1180 conditional obligation shall be void. If it depends
Art. 1180. When the debtor binds himself to pay when upon chance or upon will of a third person, the
his means permit him to do so, the obligation shall obligation shall take effect in conformity with the
be deemed to be one with a period, subject to the provisions of this Code.
provisions of Article 1197.
Exclusively upon Exclusively upon Exclusively upon
Pure Obligation the Creditor’s the Debtor’s Will the Debtor’s Will
Its effectivity or extinguishment does not depend Will in case of a in case of a
upon the fulfillment or non-fulfillment of a condition Suspensive Resolutory
or upon the expiration of a term or period and Condition Condition
characterized by the quality of its being [Art. 1182] [Art. 1179, par.
IMMEDIATELY DEMANDABLE. 2]
Condition and Condition and Condition and
CONDITIONAL, ART. 1181 obligation are obligation are obligation are
ARTICLE 1180 valid. void because to valid because in
Art. 1181. In conditional obligations, the acquisition of allow such such situation,
rights, as well as the extinguishment or loss of those condition would the position of
already acquired, shall depend upon the happening be equivalent to the debtor is
of the event which constitutes the condition. sanctioning exactly the
obligations same as the
which are position of the
Conditional Obligation
illusory. It also creditor when
Its effectivity is subject to the fulfillment or non-
constitutes a the condition is
fulfillment of a condition, which is characterized to
direct suspensive. It
be a FUTURE and UNCERTAIN event.
contravention of does not render
the principle of the obligation
SUSPENSIVE CONDITION
mutuality of illusory.
Obligation shall only be effective upon the
contracts. There
fulfillment of the condition [Art.1181]. What is
is nothing to
acquired by the obligee upon the constitution of the
demand until
obligation is mere hope or expectancy, but is
the debtor
protected by law.
wishes to.
RESOLUTORY CONDITION
Obligation becomes demandable immediately after Osmeña v. Rama (1909):
its establishment or constitution. The rights are Defendant executed an endorsement saying that
immediately vested to the creditor, but always she’ll pay her debt if the house in which she lives is
subject to the threat or danger of extinction by the sold. Such condition depended upon her exclusive
happening of the resolutory condition [Tolentino, will; thus, it is void.
1987].
Hermosa v. Longara (1953):
PAGE 143
The condition that payment should be made by (3) The mere intention of the debtor to prevent,
Hermosa as soon as he receives funds from the sale without actually preventing fulfillment is not
of his property in Spain is a mixed condition. The sufficient. Constructive fulfillment will not hold
condition implies that the obligor already decided to when the debtor acts pursuant to a right. There is
sell the house and all that was needed to make the constructive fulfillment when:
obligation demandable is that the sale be (a) Intent of the obligor is to prevent fulfillment;
consummated and the price thereof remitted to the and
islands. There were still other conditions that had to (b) There is actual prevention of compliance.
concur to effect the sale, mainly that of the presence
of a buyer, ready, able and willing to purchase the Principle of Retroactivity in Suspensive Conditions
property under the conditions set by the intestate. Art.1187, par.1: Once the condition is fulfilled, its
effects must logically retroact to the moment when
the essential elements, which gave birth to the
EFFECT OF THE HAPPENING OF SUSPENSIVE CONDITION
obligation have taken place. The condition which is
(ART. 1187); RESOLUTORY CONDITION
imposed is only accidental, not an essential element
ARTICLE 1187
of the obligation. (This is applied only to consensual
Art. 1187. The effects of a conditional obligation to contracts. No application to real contracts which can
give, once the condition has been fulfilled, shall only be perfected by delivery.)
retroact to the day of the constitution of the
obligation. Nevertheless, when the obligation
imposes reciprocal prestations upon the parties, the To Give To Do/Not To Do
fruits and interests during the pendency of the
condition shall be deemed to have been mutually If reciprocal, the fruits and In obligations to do or
compensated. If the obligation is unilateral, the interests shall be deemed not to do, the court shall
debtor shall appropriate the fruits and interests to have been mutually determine the retroactive
received, unless from the nature and circumstances compensated as a matter effect of the condition
of the obligation it should be inferred that the of justice and convenience that has been complied
intention of the person constituting the same was [Art. 1187, par. 1]. with
different. [Art. 1187, par. 2].
If unilateral, the debtor The power of the court
In obligations to do and not to do, the courts shall shall appropriate the includes the
determine, in each case, the retroactive effect of the fruits and interests determination of whether
condition that has been complied with. received, unless from the or not there will be any
nature and circumstance retroactive effect. This
it should be inferred that rule shall likewise apply
Suspensive Condition the intention of the in obligations with a
persons constituting the resolutory condition [Art.
Before Fulfillment After Fulfillment same was different. 1190 par. 3].
The demandability and The obligation arises or Resolutory Condition
acquisition or effectivity of becomes effective.
the rights arising from the The obligor can be Before Fulfillment After Fulfillment
obligation is suspended. compelled to comply Preservation of creditor’s Whatever may have been
Anything paid by mistake with what is incumbent rights (Art. 1188, par. 1) paid or delivered by one
during such time may be upon him. also applies to obligations or both of the parties
recovered. with a resolutory upon the constitution of
condition. the obligation shall have
Doctrine of Constructive Fulfillment of Suspensive to be returned upon the
Conditions fulfillment of the
Art. 1186: The condition shall be deemed fulfilled condition. There is no
when the obligor actually prevented the obligee from return to the status quo.
complying with the condition, and that such However, when the
prevention must have been voluntary or willful in condition is not fulfilled,
character. rights are consolidated
(1) Applicable to suspensive conditions but not to and they become
resolutory conditions. absolute in character.
(2) The article can have no application to an external
contingency which is lawfully within the control of
the obligor.
PAGE 144
EFFECT OF LOSS OF SPECIFIC THING, OR DETERIORATION the obligation OR

OR IMPROVEMENT OF SPECIFIC THING BEFORE bringing an action for
FULFILLMENT OF SUSPENSIVE CONDITION [ART. 1189]; specific performance,
OR IN CASE OF A RESOLUTORY CONDITION IN AN with damages in either
OBLIGATION TO DO OR NOT TO DO [ART. 1190, PAR. 3] case.
Improvement
ARTICLE 1189 mprovement at the Improvement by the
Art. 1189. When the conditions have been imposed debtor’s expense, the thing’s nature or by time
with the intention of suspending the efficacy of an debtor shall ONLY have shall inure to the benefit
obligation to give, the following rules shall be observed usufructuary rights. of the creditor.
in case of the improvement, loss or deterioration of the
thing during the pendency of the condition: Loss, defined: “when [the thing] perishes, or goes out
of commerce, or disappears in such a way that its
(1) If the thing is lost without the fault of the debtor, existence is unknown or it cannot be recovered” [Art.
the obligation shall be extinguished; 1189, no. 2].
(2) If the thing is lost through the fault of the debtor, OBLIGATIONS WITH A PERIOD OR TERM
he shall be obliged to pay damages; it is ARTICLE 1193
understood that the thing is lost when it perishes, Art. 1193. Obligations for whose fulfillment a day
or goes out of commerce, or disappears in such a certain has been fixed, shall be demandable only when
way that its existence is unknown or it cannot be that day comes.
recovered;
Obligations with a resolutory period take effect at once,
(3) When the thing deteriorates without the fault of but terminate upon arrival of the day certain.
the debtor, the impairment is to be borne by the
creditor; A day certain is understood to be that which must
necessarily come, although it may not be known when.
(4) If it deteriorates through the fault of the debtor,
the creditor may choose between the rescission of If the uncertainty consists in whether the day will come
the obligation and its fulfillment, with indemnity or not, the obligation is conditional, and it shall be
for damages in either case; regulated by the rules of the preceding Section.
(5) If the thing is improved by its nature, or by time, Period or Term: Interval of time, which either
the improvement shall inure to the benefit of the suspends demandability or produces
creditor; extinguishment.
(6) If it is improved at the expense of the debtor, he The period must be: future, certain, and possible
shall have no other right than that granted to the [Tolentino, 1987].
usufructuary.
A fortuitous event does not interrupt the running of
ARTICLE 1190 the period. It only relieves the contracting parties
Art. 1190, par. 3. As for the obligations to do and not to from the fulfillment of their respective obligations
do, the provisions of the second paragraph of Article during the period.
1187 shall be observed as regards the effect of the
extinguishment of the obligation. Kinds of Period [Art. 1193]:
(1) Ex die - period with a suspensive effect.
Obligation becomes demandable after the lapse
Without Debtor’s With Debtor’s Fault/Act of the period.
Fault/Act (2) In diem - period with a resolutory effect.
Loss Obligation is demandable at once but is
Obligation is Obligation is converted extinguished upon the lapse of the period.
extinguished. into one of indemnity for
damages. ARTICLE 1180
Deterioration Art. 1180. When the debtor binds himself to pay when
Impairment to be borne Creditor may choose his means permit him to do so, the obligation shall be
by the creditor. between bringing an deemed to be one with a period, subject to the
action for rescission of provisions of Article 1197.
PAGE 145
(3) Debtor by his own acts Impaired said guaranties

Term/Period and Condition Distinguished or securities after their establishment, and when
through a fortuitous event they disappear, unless
Term/Period Condition he immediately gives new ones equally
Interval of time which is Fact or event which is satisfactory
future and certain future and uncertain (4) Debtor Violates any undertaking, in consideration
of which the creditor agreed to the period
(5) Debtor attempts to Abscond
Must necessarily come, May or may not happen (6) By Law or stipulation
although it may not be (7) Parties stipulate an Acceleration Clause
known when
In the cases provided, the obligation becomes
Exerts an influence upon Exerts an influence upon
immediately due and demandable even if the period
the time of demandability the very existence of the
has not yet expired. The obligation is thus converted
or extinguishment of an obligation itself
into a pure obligation [Tolentino, 1987].
obligation
No retroactive effect Has retroactive effect
RESOLUTORY PERIOD
unless there is an
Obligation is demandable at once but is
agreement to the contrary
extinguished upon the lapse of the period.
When it is left exclusively When it is left exclusively
to the will of the debtor, to the will of the debtor,
the existence of the the very existence of the DEFINITE OR INDEFINITE PERIOD
obligation is not affected obligation is affected (1) INSTANCES WHEN COURTS MAY FIX THE PERIOD (ART.
1197)
SUSPENSIVE PERIOD Art. 1197: As a general rule, the court is not
Benefit of the Period authorized to fix a period for the parties [De Leon,
Presumption: The period in an obligation is 2003].
presumed to be established for the benefit of both
the creditor and debtor, UNLESS from the tenor of Araneta v. Phil. Sugar Estates, provides—
the obligation or other circumstances, it shall appear First, the Court shall determine:
that the period has been established in favor of (a) If the obligation does not fix a period, but from its
either the creditor or debtor [Art. 1196]. nature and circumstances, it can be inferred that
a period was intended.
(b) If the period is void, such as when it depends
upon the will of the debtor.
(c) If the debtor binds himself when his means
permit him to do so.
Period for the Benefit of either Creditor or Debtor
Second, it must decide what period was “probably
Creditor Debtor
contemplated by the parties”.
Creditor may demand the Debtor may oppose any
fulfillment or premature demand on the Art. 1197 does not apply to contract of services and to
performance of the part of the obligee for the pure obligations.
obligation at any time performance of the
but the obligor cannot obligation, or if he so The court, however, to prevent unreasonable
compel him to accept desires, he may renounce interpretations of the immediate demandability of
payment before the the benefit of the period pure obligations, may fix a reasonable time in which
expiration of the period. by performing his the debtor may pay [Tolentino, 1987].
obligation in advance.
(2) CREDITOR MUST ASK COURT TO SET THE PERIOD,
If Period Given for the Benefit of Debtor Alone BEFORE HE CAN DEMAND PAYMENT.
When Debtor Loses Right to Use Period
Art.1198: I GIV A LA— THE ONLY ACTION THAT CAN BE MAINTAINED BY THE
(1) Debtor becomes Insolvent, unless he gives a CREDITOR UNDER ART. 1197 IS THE ACTION TO ASK THE
guaranty or security for his debt, after obligation COURTS TO FIX THE TERM WITHIN WHICH THE DEBTOR
is contracted MUST COMPLY WITH HIS OBLIGATION. THE FULFILLMENT OF
(2) Debtor fails to furnish the Guaranties or securities THE OBLIGATION ITSELF CANNOT BE DEMANDED UNTIL
promised AFTER THE COURT HAS FIXED THE PERIOD FOR
PAGE 146
COMPLIANCE THEREWITH, AND SUCH PERIOD HAS The effect of the notice is to limit the obligation to
ARRIVED. the object or prestation selected. Notice of selection
or choice may be in any form provided it is sufficient
ALTERNATIVE OR FACULTATIVE to make the other party know that the selection has
DIFFERENCE BETWEEN ALTERNATIVE AND FACULTATIVE been made. It can be:
OBLIGATIONS (a) oral
(b) in writing
Alternative Obligations Facultative Obligations (c) tacit
Several objects are due. Only one object is due. (d) any other equivocal means
May be complied with by May be complied with by
delivery of one of the the delivery of another Choice of the debtor when communicated to the
objects or by performance object or by the creditor does not require the latter’s concurrence.
of one of the prestations performance of another
which are alternatively prestation in substitution When the choice is rendered impossible through the
due. of that which is due. creditor’s fault, the debtor may bring an action to
Choice may pertain to Choice pertains only to rescind the contract with damages [Art. 1203].
debtor, creditor, or third the debtor.
person. Obligation is converted into a simple obligation
when:
(a) The person with the right of choice has
Loss/impossibility of all Loss/impossibility of the
communicated his choice [Art. 1201].
object/prestation due to object/prestation due to
(b) Only one prestation is practicable [Art. 1202].
fortuitous event shall fortuitous event is
extinguish the obligation. sufficient to extinguish
Facultative Obligation
The loss/impossibility of the obligation.
Only one prestation has been agreed upon but the
one of the things does not
debtor may render another in substitution [De Leon,
extinguish the obligation.
2003]. Debtor always has the right of choice.
Culpable loss of any of Culpable loss of the
the objects alternatively object which the debtor
Effect of Loss of Substitute
due before the choice is may deliver in
made may give rise to substitution before the
liability on the part of the substitution is effected Before Substitution is After Substitution is
debtor. does not give rise to any Made Made
liability on the part of the If due to bad faith or fraud The loss or deterioration
debtor. of obligor: obligor is liable. of the substitute on
account of the obligor’s
delay, negligence, or
If due to the negligence of fraud, renders the
Alternative Obligations
the obligor: obligor is not obligor liable because
Several prestations are due but the performance of
liable. once the substitution is
one is sufficient [De Leon, 2003].
made, the obligation is
converted into a simple
Right of Choice:
one with the substituted
Art. 1200: Belongs to the debtor, UNLESS:
thing as the object of
(1) when it is expressly granted to the creditor
the obligation.
(2) when it is expressly granted to a third person
Limitations to the right of choice: EFFECT OF LOSS OF SPECIFIC THINGS OR IMPOSSIBILITY OF

(1) impossible prestations PERFORMANCE OF ALTERNATIVE, THROUGH FAULT OF
(2) unlawful prestations DEBTOR/CREDITOR OR THROUGH FORTUITOUS EVENTS
(3) those which could not have been the object of the Art. 1204: Debtor’s Choice
obligation
(4) only one prestation is practicable [Art. 1202; De Fortuitous Event Debtor’s Fault
Leon, 2003] All Lost
When choice shall produce effect
Art. 1201: Choice shall produce no effect except from
the time it has been communicated.
PAGE 147
Debtor is released from Creditor shall have a PRESUMPTION OF JOINT OBLIGATION

the obligation. right to indemnity for Presumption: Obligation is presumed joint if there is
damages based on the a concurrence of several creditors, of several debtors,
value of the last thing or of several creditors and debtors in one and the
which disappeared or same obligation (Art. 1207).
service which become Exceptions:
impossible. (1) When the obligation expressly states that there is
Some solidarity
Debtor to deliver that Debtor to deliver that (2) When the law requires solidarity i.e. quasi-delicts
which he shall choose which the creditor shall (3) When the nature of the obligation requires
from among the choose from among the solidarity
remainder. remainder without (4) When the nature or condition is imposed upon
damages. heirs or legatees, and the testament expressly
One Remains makes the charge or condition in solidum
Debtor to deliver that Debtor to deliver that (5) When the solidary responsibility is imputed by a
which remains. which remains. final judgment upon several defendants
PRESUMPTION OF EQUAL DIVISION

Art. 1205: Creditor’s Choice Presumption: Credit or debt shall be presumed to be
divided into as many equal shares as there are
creditors or debtors.
Fortuitous Event Debtor’s Fault
Joint creditor cannot act in representation of the
All Lost others, neither can a joint debtor be compelled to
Debtor is released from Creditor may claim the answer for the liability of others.
the obligation. price/value of any of
them with indemnity for EACH CREDIT IS DISTINCT FROM ONE ANOTHER,
damages. THEREFORE A JOINT DEBTOR CANNOT BE REQUIRED TO PAY
Some THE SHARE OF ANOTHER DEBTOR, ALTHOUGH HE MAY PAY
Debtor to deliver that Creditor may claim any IF HE WANTS TO [ART. 1208].
which he shall choose of those subsisting
from among the without a right to EFFECT OF INSOLVENCY OF A JOINT DEBTOR [ART. 1209].
remainder. damages OR price/value Each creditor can demand only for the payment of
of the thing lost with his proportionate share of the credit, while each
right to damages. debtor can be liable only for the payment of his
One Remains proportionate share of the debt.
Creditor may claim the Creditor may claim the
remaining thing without remaining thing without Principal Effects of Joint Liability
a right to damages OR a right to damages OR (1) Demand by one creditor upon the debtor,
the price/value of the the price/value of the produces the effects of default only with respect
thing lost with right to thing lost with right to to the creditor who demanded and the debtor on
damages. damages. whom the demand was made, but not with
respect to others.
(2) Interruption of prescription by the judicial
demand of one creditor upon a debtor does not
benefit the other creditors nor interrupt the
Joint and Solidary Obligation prescription as to other debtors.
(3) Vices of each obligation arising from the personal
JOINT (DIVISIBLE) OBLIGATION defect of a particular debtor or creditor do not
One where a concurrence of several creditors, or of affect the obligation or right of the others.
several debtors, or of several creditors and debtors, (4) Insolvency of a debtor does not increase the
by virtue of which, each of the creditors has a right to responsibility of his co-debtors, nor does it
demand, and each of the debtors is bound to render authorize a creditor to demand anything from his
compliance with his proportionate part of the co-debtors.
prestation which constitute the object of the (5) Defense of res judicata is not extended from one
obligation (obligacion mancomunada). debtor to another.
PAGE 148
JOINT (INDIVISIBLE) OBLIGATION SOLIDARY OBLIGATION

OBLIGATION CANNOT BE PERFORMED IN PARTS BUT An obligation where there is concurrence of several
DEBTORS ARE BOUND JOINTLY creditors, or of several debtors, or of several creditors
ARTICLE 1209 and several debtors, by virtue of which, each of the
Art. 1209. If the division is impossible, the right of the creditors has the right to demand, and each of the
creditors may be prejudiced only by their collective debtors is bound to render, entire compliance with the
acts, and the debt can be enforced only by prestation which constitutes the object of the
proceeding against all the debtors. If one of the obligation (obligacion solidaria).
latter should be insolvent, the others shall not be
liable for his share. ANYONE OF THE SOLIDARY CREDITORS MAY COLLECT OR
DEMAND PAYMENT OF WHOLE OBLIGATION; THERE IS
Art. 1209: No creditor can act in representation of the MUTUAL AGENCY AMONG SOLIDARY DEBTORS (ARTS.
other; no debtor can be compelled to answer for the 1214, 1215)
liability of the others. ARTICLE 1214
Art. 1214. The debtor may pay any one of the solidary
If there are two or more debtors, the fulfillment of or creditors; but if any demand, judicial or extrajudicial,
compliance with the obligation requires the has been made by one of them, payment should be
concurrence of all the debtors, although each for his made to him.
own share and for the enforcement of the obligation
ARTICLE 1215
Plurality of Creditors: If one or some of the creditors
Art. 1215. Novation, compensation, confusion or
demands the prestation, the debtor may legally
remission of the debt, made by any of the solidary
refuse to deliver to them, he can insist that all the
creditors or with any of the solidary debtors, shall
creditors together receive the thing, and if any of
extinguish the obligation, without prejudice to the
them refuses to join the others, the debtor may
provisions of Article 1219.
deposit the thing in court by way of consignation
[Tolentino, 1987].
Active solidary obligation (solidarity among creditors):
Each creditor has the authority to claim and enforce
IN CASE OF FAILURE OF ONE OF THE JOINT DEBTORS TO
the rights of all, with the resulting obligation of
PERFORM HIS PART (SHARE), THERE IS DEFAULT BUT
paying everyone of what belongs to him.
ONLY THE GUILTY DEBTOR SHALL BE LIABLE FOR DAMAGES
In case of breach where one of the joint debtors fails Creation of a relationship of mutual agency among
to comply with his undertaking, the obligation can no co-creditors.
longer be fulfilled or performed.
A solidary creditor cannot assign his rights without
Consequently, it is converted into one of indemnity the consent of the others [Art. 1213].
for damages.
Each debtor may pay to any solidary creditor, but if
In case of insolvency of one of the debtors, the others any demand, judicial or extrajudicial, has been made
shall not be liable for his share. To hold otherwise by one of them, payment must be made to him [Art.
would destroy the joint character of the obligation. 1214]
Mixed solidary obligation (solidarity among creditors

Joint Divisible Obligations Joint Indivisible and debtors): Solidarity is not destroyed by the fact
Obligations that the obligation of each debtor is subject to
In case of breach of In case of breach where different conditions or periods. The creditor can
obligation by one of the one of the joint debtors commence an action against anyone of the debtors
debtors, damages due fails to comply with his for the compliance with the entire obligation minus
must be borne by him undertaking, the the portion or share which corresponds to the debtor
alone. obligation can no longer affected by the condition or period.
be fulfilled or performed.
Thus, the action must be
ANY OF THE SOLIDARY DEBTORS MAY BE REQUIRED TO
converted into one for
PAY THE WHOLE OBLIGATION; THERE IS MUTUAL
indemnity for damages.
GUARANTY AMONG SOLIDARY DEBTORS [ARTS. 1216,
1217, 1222]
PAGE 149
ARTICLE 1216 (2) Those personal to him

Art. 1216. The creditor may proceed against any one of (3) Those pertaining to his own share
the solidary debtors or some or all of them (4) Those personally belonging to other co-debtors
simultaneously. The demand made against one of but only as regards that part of the debt for which
them shall not be an obstacle to those which may the latter are responsible.
subsequently be directed against the others, so long as
the debt has not been fully collected. Demand Upon a Solidary Payment by a Debtor
Debtor
ARTICLE 1217 The demand made Full payment made by
against one of them shall one of the solidary
Art. 1217. Payment made by one of the solidary debtors
not be an obstacle to debtors extinguishes the
extinguishes the obligation. If two or more solidary
those which may obligation [Art. 1217].
debtors offer to pay, the creditor may choose which
subsequently be directed
offer to accept.
against the others so long
as the debt has not been
He who made the payment may claim from his co-
fully collected [Art. 1216].
debtors only the share which corresponds to each, with
The creditor may proceed If two or more solidary
the interest for the payment already made. If the
against any one of the debtors offer to pay, the
payment is made before the debt is due, no interest for
solidary debtors or all creditor may choose
the intervening period may be demanded.
simultaneously [Art. 1216]. which offer to accept
[Art. 1217].
When one of the solidary debtors cannot, because of
A creditor’s right to The solidary debtor who
his insolvency, reimburse his share to the debtor
proceed against the made the payment shall
paying the obligation, such share shall be borne by all
surety exists have the right to claim
his co-debtors, in proportion to the debt of each.
independently of his right from his co-debtors the
to proceed against the share which corresponds
ARTICLE 1222
principal to them with interest,
Art. 1222. A solidary debtor may, in actions filed by UNLESS barred by
the creditor, avail himself of all defenses which are prescription or illegality
derived from the nature of the obligation and of [Art. 1218].
those which are personal to him, or pertain to his
own share. With respect to those which personally When a solidary debtor pays the entire obligation,
belong to the others, he may avail himself thereof the resulting obligation of the co-debtors to
only as regards that part of the debt for which the reimburse him becomes joint.
latter are responsible.
If payment was made before the debt became due,
Passive solidary obligation (solidarity among debtors): no interest during the intervening period may be
Each debtor can be made to answer for the others, demanded [Art. 1217 par. 2].
with the right on the part of the debtor-payor to When one of the solidary debtors cannot reimburse
recover from the others their respective shares. his share to the debtor paying the obligation due to
insolvency, such share shall be borne by all his co-
Creation of a relationship of mutual guaranty among debtors, in proportion to the debt of each [Art. 1217,
co-debtors. par. 2].
The total remission of the debt in favor of a debtor
releases all the debtors. Inchausti v. Yulo (1914):
Debtors obligated themselves solidarily, so creditor can
All the debtors are liable for the loss of the thing bring its action against any of them. Remission of any
due, even if such loss is caused by the fault of only part of the debt, made by the creditor in favor of one of
one of them, and for delay, even if it is caused by just the solidary debtors, inures to the benefit of the rest of
one of them. them.
The interruption of prescription as to one debtor
affects all the others; but the renunciation by one Each one of the solidary creditors may do whatever
debtor of prescription already had does not prejudice maybe useful to the others, but not anything
the others. prejudicial to them [Art. 1212]; however, any novation,
Defenses Available to a Solidary Debtor [Art. 1222] compensation, confusion or remission of debt
(1) Those derived from the nature of the obligation executed by any solidary creditor shall extinguish the
PAGE 150
obligation without prejudice to his liability for the

shares of the other solidary creditors DIVISIBLE AND INDIVISIBLE, ART. 1225
Divisible Obligations
ARTICLE 1212 Ones which are susceptible to partial performance,
Art. 1212. Each one of the solidary creditors may do that is, the debtor can legally perform the obligation
whatever may be useful to the others, but not by parts and the creditor cannot demand a single
anything which may be prejudicial to the latter. performance of the entire obligation [Tolentino,
1987].
ARTICLE 1215
Indivisible Obligations
Art. 1215. Novation, compensation, confusion or Ones which cannot be validly performed in parts
remission of the debt, made by any of the solidary [Tolentino, 1987].
creditors or with any of the solidary debtors, shall
extinguish the obligation, without prejudice to the (a) Divisibility/indivisibility refers to the performance
provisions of Article 1219. of the prestation and not to the thing which is the
object thereof. The thing may be divisible, yet the
ARTICLE 1219 obligation may be indivisible.
Art. 1219. The remission made by the creditor of the (b) When the obligation has for its object the
share which affects one of the solidary debtors does execution of a certain number of days of work, the
not release the latter from his responsibility towards accomplishment of work by metrical units, or
the co-debtors, in case the debt had been totally analogous things which by their nature are
paid by anyone of them before the remission was susceptible of partial performance, it shall be
effected. divisible [Art.1225, par. 2].
(c) Even though the object or service may be
Effects of Prejudicial and Beneficial Acts [Art.1212] physically divisible, an obligation is indivisible if
(1) Each one of the solidary creditors may do so provided by law or intended by the parties.
whatever may be useful or beneficial to the (d) In obligations not to do, divisibility or indivisibility
others, but not anything which may be prejudicial shall be determined by the character of the
to the latter. prestation in each particular case.
(2) As far as the debtors are concerned, a prejudicial (e) When there is plurality of debtors and creditors,
act performed by a solidary creditor is binding. the effect of divisibility/indivisibility of the
(3) As between the solidary creditors, the creditor obligation depend upon whether the obligation is
who performed such act shall incur the obligation joint or solidary.
of indemnifying the others for damages. (f) A joint indivisible obligation gives rise to
indemnity for damages from the time any one of
the debtors does not comply with his undertaking
[Art. 1224].
Effect
Indivisibility Solidarity
Creditor cannot be compelled to receive partially the
It refers to the prestation It refers to the legal tie prestation in which the obligation consists; neither
which constitutes the or vinculum, and may the debtor be required to make the partial
object of the obligation. consequently, to the payment [Art. 1248], UNLESS:
subjects or parties of (1) The obligation expressly stipulates the contrary.
the obligation. (2) The different prestations constituting the objects
Plurality of subjects is not Plurality of subjects is of the obligation are subject to different terms
required. indispensable. and conditions.
In case of breach, When there is liability (3) The obligation is in part liquidated and in part
obligation is converted into on the part of the unliquidated.
indemnity for damages debtors because of the
because the indivisibility of breach, the solidarity OBLIGATIONS WITH A PENAL CLAUSE, ARTS.
the obligation is among the debtors 1226, 1228-1230
terminated. remains. ARTICLE 1226
The indivisibility of an obligation does not necessarily Art. 1226. In obligations with a penal clause, the
give rise to solidarity. Nor does solidarity itself imply penalty shall substitute the indemnity for damages
indivisibility [Art. 1211]. and the payment of interests in case of
PAGE 151
noncompliance, if there is no stipulation to the Chartacteristics of Penalty

contrary. Nevertheless, damages shall be paid if the (1) The penalty shall substitute the indemnity for
obligor refuses to pay the penalty or is guilty of fraud in damages and payment of interest in case of non-
the fulfillment of the obligation. compliance [Art. 1226], UNLESS:
(a) There is a stipulation to the contrary
The penalty may be enforced only when it is (b) The obligor refuses to pay the penalty
demandable in accordance with the provisions of this (c) The obligor is guilty of fraud
Code.
(2) Debtor cannot exempt himself from the
ARTICLE 1228 performance of the principal obligation by paying
Art. 1228. Proof of actual damages suffered by the the stipulated penalty unless this right has been
creditor is not necessary in order that the penalty may expressly reserved for him [Art. 1227].
be demanded.
(3) Creditor cannot demand the fulfillment of the
principal obligation and demanding the
ARTICLE 1229
satisfaction of the penalty at the same time
Art. 1229. The judge shall equitably reduce the penalty unless the right has been clearly granted to him
when the principal obligation has been partly or [Art. 1227]. Tacit or implied grant is admissible.
irregularly complied with by the debtor. (a) If the creditor has chosen fulfillment of the
Even if there has been no performance, the penalty principal obligation and the performance
may also be reduced by the courts if it is iniquitous or thereof becomes impossible without his fault,
unconscionable. he may still demand the satisfaction of the
penalty.
ARTICLE 1230 (b) If there was fault on the part of the debtor,
Art. 1230. The nullity of the penal clause does not carry creditor may demand not only the satisfaction
with it that of the principal obligation. of the penalty but also the payment of
damages.
The nullity of the principal obligation carries with it (c) If the creditor chooses to demand the
that of the penal clause. satisfaction of the penalty, he cannot
afterwards demand the fulfillment of the
Penal Clause: An accessory undertaking to assume obligation.
greater liability in case of breach [De Leon, 2003]. It
is attached to an obligation in order to ensure Proof of Actual Damage
performance. The enforcement of the penalty can be Art. 1228: That proof of actual damages is not
demanded by the creditor only when the non- necessary is applicable only to the general rule
performance is due to the fault or fraud of the stated in Art. 1226, but not to the exceptions. The
debtor. penalty is exactly identical with what is known as
“liquidated damages” in Art. 2226.
If the principal obligation is void, the penal clause
shall also be void. However, the nullity of the penal
clause does not carry with it the nullity of the
principal obligation [Art.1230]. When Penalty may be Reduced [Art. 1229]:
(1) If the principal obligation has been partly
Purposes of Penalty complied with.
(1) Funcion coercitiva de garantia - to insure the (2) If the principal obligation has been irregularly
performance of the obligation. complied with.
(2) Funcion liquidatoria - to liquidate the amount of (3) If the penalty is iniquitous or unsconscionable
damages to be awarded to the injured party in even if there has been no performance.
case of breach of the principal obligation
(compensatory).
(3) Function estrictamente penal - to punish the
obligor in case of breach of the principal
obligation (punitive).
PAGE 152
Extinguishment of In the meantime, the action derived from the original

obligation shall be held in the abeyance.
Obligations EXTRAORDINARY INFLATION OF DEFLATION [ART. 1250]
ARTICLE 1236
PAYMENT, ARTS. 1236-1238
Art. 1250. In case an extraordinary inflation or
ARTICLE 1236
deflation of the currency stipulated should
Art. 1236. The creditor is not bound to accept payment supervene, the value of the currency at the time of
or performance by a third person who has no interest the establishment of the obligation shall be the basis
in the fulfillment of the obligation, unless there is a of payment, unless there is an agreement to the
stipulation to the contrary. contrary.
Whoever pays for another may demand from the
debtor what he has paid, except that if he paid without APPLICATION OF PAYMENT [ART. 1252-1254]
the knowledge or against the will of the debtor, he can Application of Payment [Art. 1252]
recover only insofar as the payment has been Designation of the debt to which should be applied a
beneficial to the debtor. payment made by a debtor who owes several debts
to the same creditor.
ARTICLE 1237
Rules on Application
Art. 1237. Whoever pays on behalf of the debtor (1) Preferential right of debtor - debtor has the right
without the knowledge or against the will of the latter, to select which of his debts he is paying.
cannot compel the creditor to subrogate him in his (2) The debtor makes the designation at the time he
rights, such as those arising from a mortgage, makes the payment.
guaranty, or penalty. (3) If not, the creditor makes the application, by so
stating in the receipt that he issues, unless there
ARTICLE 1238 is cause for invalidating the contract.
Art. 1238. Payment made by a third person who does (4) If neither the creditor nor debtor exercises the
not intend to be reimbursed by the debtor is deemed right to apply, or if the application is not valid, the
to be a donation, which requires the debtor's consent. application is made by operation of law.
But the payment is in any case valid as to the creditor (5) If debt produces interest, the payment is not to be
who has accepted it. applied to the principal unless the interests are
covered.
DATION IN PAYMENT [ART. 1245] (6) When no application can be inferred from the
ARTICLE 1245 circumstances of payment, it is applied: (a) to the
most onerous debt of the debtor; or (b) if debts
Art. 1245. Dation in payment, whereby property is due are of the same nature and burden, to all the
alienated to the creditor in satisfaction of a debt in debts in proportion
money, shall be governed by the law of sales. (7) Rules of application of payment may not be
invoked by a surety or solidary guarantor.
Delivery and transmission of ownership of a thing by
the debtor to the creditor as an accepted equivalent
Reparations Commission vs. Universal Deep Sea
of the performance of the obligation (dacion en
Fishing Corp. (1978):
pago).
Rules on application of payment cannot be made
applicable to a person whose obligation as a mere
FORM OF PAYMENT [ART. 1249] surety is both contingent and singular. There must
ARTICLE 1249 be full and faithful compliance with the terms of the
Art. 1249. The payment of debts in money shall be contract.
made in the currency stipulated, and if it is not
possible to deliver such currency, then in the currency TENDER OF PAYMENT AND CONSIGNATION [ARTS. 1256-
which is legal tender in the Philippines. 1261]
The delivery of promissory notes payable to order, or Tender of payment: Manifestation made by the
bills of exchange or other mercantile documents shall debtor to the creditor of his desire to comply with his
produce the effect of payment only when they have obligation, with offer of immediate performance.
been cashed, or when through the fault of the creditor (1) Preparatory act to consignation
they have been impaired. (2) Extrajudicial in character
PAGE 153
Consignation: Deposit of the object of obligation in a Requisites and Effects

competent court in accordance with the rules Application of Tender and
prescribed by law whenever the creditor unjustly Dation
Payment Consignation
refuses payment or because of some circumstances Requisites
which render direct payment to the creditor (1) Plurality of (1) Should not (1) There is a
impossible or inadvisable. debts be prejudicial debt due
(1) Principal act which constitutes a form of payment (2) Debts are of to other (2) Consignation
(2) Judicial in character the same creditors is made
kind (2) Should not because of
When Tender and Refusal Not Required [Art. 1259] (3) Debts are constitute a some legal
(1) Creditor is absent or unknown, or does not owed to the pactum cause
appear at the place of payment. same creditor commissoriu (3) Previous
(2) Creditor is incapacitated to receive the thing due and by the m notice of
at the time of payment. same debtor consignation
(3) Without just cause, creditor refuses to give (4) All debts was given to
receipt. must be due those
(4) Two or more persons claim the same right to (5) Payment persons
collect. made is not interested in
(5) Title of the obligation has been lost. sufficient to the
cover all performance
Effects of Withdrawal by Debtor [Arts. 1260- 1261] debts of the
(1) Before approval of the court - Obligation remains obligation
in force. (4) Amount or
(2) After approval of the court or acceptance by the thing due
creditor, with the consent of the latter - was placed
Obligation remains in force, but guarantors and at the
co-debtors are liberated. Preference of the disposal of
creditor over the thing is lost. the court
(3) After approval of the court or acceptance by the (5) After the
creditor, and without creditor’s consent - consignation
Obligation subsists, without change in the liability has been
of guarantors and co-debtors, or the creditor’s made, the
right of preference. persons
interested
What constitutes valid consignation were notified
In order that the consignation of the thing due may thereof
release the obligor, it must first be announced to the
persons interested in the fulfilment of the obligation.
The consignation shall be ineffectual if it is not made

strictly in consonance with the provisions which Effects
regulate payment. [Art. 1257]. Payment of debt Extinguishment If accepted by
designated as to of debt as an the creditor or
How consignation is made corresponding equivalent of the declared
Consignation shall be made by depositing the things amount performance of properly made
due at the disposal of judicial authority, before whom the obligation by the Court:
the tender of payment shall be proved, in a proper (1) Debtor is
case, and the announcement of the consignation in released in
other cases. same manner
as if he had
The consignation having been made, the interested performed the
parties shall also be notified thereof. obligation at
the time of
Who bears the expenses consignation
The expenses of consignation, when properly made, (2) Accrual of
shall be charged against the creditor. [Art. 1259] interest is
suspended
PAGE 154
Application of Tender and Effects of Loss

Dation
Payment Consignation Obligation to Deliver a Obligation to Deliver a
from the Specific Thing Generic Thing
moment of Extinguishment of the Loss of a generic thing
consignation. obligation if the thing was does not extinguish an
(3) Deterioration destroyed without fault of obligation, EXCEPT in
or loss of the the debtor and before he case of delimited generic
thing or has incurred delay. things, where the kind or
amount class is limited itself, and
consigned, the whole class perishes.
occurring
without the Action against third persons - creditor shall have all
fault of the rights of action the debtor may have against
debtor, must third persons by reason of the loss.
be borne by
creditor from Presumption: The loss was due to the debtor’s fault,
the moment UNLESS there is proof to the contrary.
of deposit
Any increment Other cases where loss is attributed to debtor:
or increase in (1) Law provides that the debtor shall be liable even
the value of the if the loss is due to fortuitous events [Arts. 1942,
thing after 1979, 2147, 2159].
consignation (2) Obligor is made liable by express stipulation.
inures to the (3) Nature of the obligation requires an assumption
benefit of the of risk.
creditor. (4) Fault or negligence concurs with the fortuitous
event.
Payment by Cession [Art. 1255] (5) Loss occurs after delay.
The debtor may cede or assign his property to his (6) Debtor has promised to deliver the same thing to
creditors in payment of his debts. This cession, two or more different parties.
unless there is stipulation to the contrary, shall only (7) Obligation arises from a criminal act.
release the debtor from responsibility for the net (8) Borrower in commodatum: saves his own things
proceeds of the things assigned. The agreements and not the thing of the creditor during a
which, on the effect of the cession, are made fortuitous event.
between the debtor and his creditors shall be
governed by special laws. In Reciprocal Obligations
Extinguishment of the obligation due to loss of the
Cession or assignment of rights in favor of creditors thing or impossibility of performance affects both the
(1) Process by which debtor transfers property to his creditor and debtor; the entire juridical relation is
creditors so that the latter may sell them and extinguished.
thus apply the proceeds to their credits.
(2) What is given to creditors is not ownership (as Partial loss
distinguished from dacion en pago) but only Art. 1264: Partial loss due to a fortuitous event does
authority to sell. not extinguish the obligation; thing due shall be
(3) Debtor is released only for the net proceeds delivered in its present condition, without any liability
unless there is a stipulation to the contrary. on the part of the debtor, UNLESS the obligation is
extinguished when the part lost was of such extent
as to make the thing useless.
LOSS OF DETERMINATE THING DUE OR
IMPOSSIBILITY OR DIFFICULTY OF Loss of the thing when in possession of the debtor:
PERFORMANCE, ARTS. 1262, 1266-1267 Loss was due to the debtor’s fault. Burden of
Loss explaining the loss of the thing falls upon him,
A thing is lost when it perishes, goes out of UNLESS due to a natural calamity: earthquake, flood,
commerce or disappears in such a way that its storm, etc.
existence is unknown or it cannot be recovered [Art.
1189, no. 2] Subjective impossibility: Where there is no physical or
legal loss, but the thing belongs to another, the
PAGE 155
performance by the debtor becomes impossible. The

debtor must indemnify the creditor for damages. Effect
Art. 1273: Renunciation of the principal debt shall
Impossibility of Performance [Arts. 1266-1267] extinguish the accessory obligations, but remission
When prestation becomes legally or physically of the latter leaves the principal obligation in force.
impossible (by fortuitous event or force majeure), the
debtor is released. Impossibility must have occurred EXPRESS – FORMALITY OF DONATION [ART. 1270]
without fault of debtor, and after the obligation has Made formally; in accordance with forms of ordinary
been constituted. donations.
Partial Impossibility IMPLIED [ARTS. 1271, 1272, 1274]
(1) Courts shall determine whether it is so important Presumptions [Arts. 1271, 1272, 1274]
as to extinguish the obligation. (1) Whenever the private document in which the debt
(2) If debtor has performed part of the obligation is found is in the possession of the debtor, it shall
when impossibility occurred, creditor must pay be presumed that the creditor delivered it
the part done as long as he benefits from it. voluntarily, unless the contrary is proved.
(3) If debtor received full payment from creditor, he (2) Delivery of a private document evidencing credit
must return excess amount corresponding to part made voluntarily by the creditor to the debtor
which was impossible to perform. implies the renunciation of the action of creditor
against the latter.
Doctrine of Unforeseen Events (3) Accessory obligation of pledge has been remitted
When the service has become so difficult as to be when thing after its delivery is found in the
manifestly beyond the contemplation of all the possession of the debtor or third person.
parties, the obligor may be released in whole or in
part [De Leon, 2003]. CONFUSION, ARTS. 1275-1272
Requisites Confusion - The meeting in one person of the
(1) Event could not have been foreseen at the time of qualities of creditor and debtor of the same
the constitution of the contract. obligation.
(2) Event makes performance extremely difficult but
not impossible. Requisites
(3) Event not due to any act of the parties. (1) It should take place between principal debtor and
(4) Contract is for future prestation. creditor.
(2) It must be complete and definite – Parties must
CONDONATION OR REMISSION OF DEBT, ART. meet all the qualities of creditor and debtor in the
1270 obligation/ in the part affected.
ARTICLE 1270
Art. 1270. Condonation or remission is essentially Effects [Arts. 1275- 1277]:
gratuitous, and requires the acceptance by the obligor. (1) The obligation is extinguished from the time the
It may be made expressly or impliedly. characters of the debtor and creditor are merged
in the same person.
One and the other kind shall be subject to the rules (2) In joint obligations, confusion does not extinguish
which govern inofficious donations. Express the obligation except as regards the
condonation shall, furthermore, comply with the forms corresponding share of the creditor or debtor in
of donation. whom the two characters concur.
(3) In solidary obligations, confusion in one of the
Condonation solidary debtors extinguishes the entire
An act of liberality, by virtue of which, without obligation.
receiving any equivalent, creditor renounces the
enforcement of the obligation. The obligation is Obligation is not extinguished when confusion takes
extinguished either in whole or in such part of the place in the person of subsidiary debtor (e.g.
same to which remission refers. guarantor), but merger in the person of the principal
debtor shall benefit the former.
Requisites:
(1) Debt must be existing and demandable. COMPENSATION
(2) Renunciation must be gratuitous; without any Compensation - Offsetting of two obligations which
consideration. are reciprocally extinguished if they are of the same
(3) Debtor must accept the remission.
PAGE 156
value, or extinguished to the concurrent amount if of obligations of a depositary or of a bailee in

different values. commodatum.
Neither can compensation be set up against a creditor

Compensation Confusion who has a claim for support due by gratuitous title,
There must always be Involves only one without prejudice to the provisions of paragraph 2 of
two obligations. obligation. Article 301.
There are two persons There is only one person ARTICLE 1288
who are mutually whom the characters of Art. 1288. Neither shall there be compensation if one of
debtors and creditors of the creditor and debtor the debts consists in civil liability arising from a penal
each other in two meet. offense.
separate obligations,
each arising from the ARTICLE 1289
same cause.
Art. 1289. If a person should have against him several
Compensation: debts which are susceptible of compensation, the rules
on the application of payments shall apply to the order
Requisites Effects of the compensation.
(1) Each obligor is bound (1) Effects rise from the
ARTICLE 1290
principally, and at the moment all the
same time a principal requisites concur. Art. 1290. When all the requisites mentioned in Article
creditor of the other (2) Debtor claiming its 1279 are present, compensation takes effect by
(2) Both debts must benefits must prove operation of law, and extinguishes both debts to the
consist in a sum of compensation; once concurrent amount, even though the creditors and
money, or if the things proven, effects debtors are not aware of the compensation.
due are FUNGIBLE, of retroact from the
the same kind & moment when the (2) AGREEMENT [ART. 1282]
quality requisites concurred. Parties agree to compensate their mutual
(3) Both debts are due (3) Both debts are obligations even when some requisite in Art. 1279 is
(4) Debts are liquidated extinguished to the lacking.
and demandable concurrent amount,
(5) There must be no even though the (3) VOLUNTARY [ART. 1282]
retention or creditors and debtors ARTICLE 1282
controversy over either are not aware of the Art. 1282. The parties may agree upon the
of the debts, compensation. compensation of debts which are not yet due.
commenced by third (4) Accessory obligations
persons and are also extinguished. (4) JUDICIAL [ART. 1283]
communicated in due Decreed by court when there is counterclaim;
time to the debtor effective upon final judgment
(6) Compensation is not
prohibited by law
KINDS
ARTICLE 1283
(1) LEGAL COMPENSATION [ARTS. 1286-1290]
Takes place by operation of law Art. 1283. If one of the parties to a suit over an
obligation has a claim for damages against the
ARTICLE 1286
other, the former may set it off by proving his right to
said damages and the amount thereof.
Art. 1286. Compensation takes place by operation of
law, even though the debts may be payable at different
(5) FACULTATIVE
places, but there shall be an indemnity for expenses of
When it can be claimed by one of the parties who,
exchange or transportation to the place of payment.
however, has the right to object to it.
ARTICLE 1287
Compensation which can only be set up at the option
Art. 1287. Compensation shall not be proper when one of a creditor, when legal compensation cannot take
of the debts arises from a depositum or from the place because some legal requisites in favor of the
creditor are lacking. Creditor may renounce his right
PAGE 157
to compensation, and he himself may set it up. As Effects

opposed to conventional compensation, facultative In General If Original If New Obligation
compensation is unilateral and does not depend Obligation is Void is Void
upon the agreement of the parties. Old Novation is void if New obligation is
obligation is the original void, the old
OBLIGATIONS NOT COMPENSABLE [ARTS. 1287-1288] extinguished obligation was obligation
Compensation is prohibited in: and replaced void, except when subsists, unless
(1) Contracts of depositum by the new annulment may the parties
(2) Contracts of commodatum one be claimed only intended that the
(3) Future support due by gratuitous title stipulated. by the debtor, or former relations
(4) Civil liability arising from a penal offense when ratification shall be
(5) Obligations due to the government validates acts that extinguished in
(6) Damage caused to the partnership by a partner are voidable [Art. any event [Art.
1298] 1297]
NOVATION, [ARTS. 1291-1304] 1. Original 1. New obligation
Extinguishment of an obligation by the substitution obligation is void: void: No novation
or change of the obligation by a subsequent one No novation 2. New obligation
which extinguishes or modifies the first either by 2. Original voidable:
changing the object or principal conditions, or by obligation Novation is
substituting the person of the debtor, or by voidable: Effective effective
subrogating a third person in the rights of the if contract is
creditor. A juridical act of dual function—it ratified before
extinguishes an obligation, and at the same time, it novation.
creates a new one in lieu of the old.
Accessory obligations are also extinguished, but may
Requisites subsist only insofar as they may benefit third persons
(1) A previous valid obligation who did not give their consent to the novation OR
(2) Agreement of all the parties to the new obligation those who may be affected, upon agreement
(3) Extinguishment of the old obligation between the parties.
(4) Validity of the new obligation
Original or new obligation with suspensive or resolutory
Novation is not presumed. condition
Express novation: Parties must expressly disclose Art. 1299: If original obligation was subject to a
their intent to extinguish the old obligation by suspensive or resolutory condition, the new
creating a new one. obligation shall be under the same condition, unless
Implied novation: No specific form is required. There it is otherwise stipulated.
must be incompatibility between the old and new
obligation or contract. Compatible Conditions Incompatible
Conditions
California Bus Line v. State Investment [2003]: (a) Fulfillment of both (a) Original
In the absence of an unequivocal declaration of conditions: new obligation obligation is
extinguishment of the pre-existing obligation, only becomes demandable extinguished,
proof of incompatibility between the old and new (b) Fulfillment of condition while new
obligation would warrant a novation by implication. concerning the original obligation exists
obligation: old obligation (b) Demandability
is revived; new obligation shall be subject
Test of Incompatibility loses force to fulfillment/
Whether or not the old and new obligation can stand
(c) Fulfillment of condition nonfulfillment of
together, each one having an independent existence.
concerning the new the condition
No incompatibility exists when they can stand obligation: no novation; affecting it
together. Hence, there is no novation. Incompatibility requisite of a previous
exists when they cannot stand together. Hence, there
valid and effective
is novation.
obligation lacking
Objective Novation
(1) Change of the subject matter
(2) Change of cause or consideration
PAGE 158
(3) Change of the principal conditions or terms Conventional Assignment of credit

subrogation
Subjective Novation Debtor’s consent is Debtor’s consent is not
(1) Substitution of the Debtor: Consent of creditor is necessary. required.
an indispensable requirement both in Extinguishes an Refers to the same right
expromision and delegacion. obligation and gives which passes from one
rise to a new one. person to another, without
Expromision Delegacion modifying or extinguishing
Initiative for change does Debtor (delegante) the obligation.
not emanate from the offers or initiates the Defects/vices in the Defects/vices in the old
debtor, and may change, and the creditor old obligation are obligation are not cured.
even be made without (delegatorio) accepts a cured.
his knowledge. third person (delegado)
as consenting to the (b) Legal subrogation: by operation of law
substitution. Legal subrogation is not presumed, except in the
Requisites following circumstances:
(1) Consent of the Consent of old debtor, (1) When creditor pays another creditor who is
creditor and the new new debtor, and creditor preferred, even without the debtor’s knowledge
debtor (2) When a third person not interested in the
(2) Knowledge or obligation pays with the express or tacit approval
consent of the old of the debtor
debtor is not required (3) When, even without the knowledge of the debtor,
Effects a person interested in the fulfillment of the
(1) Old debtor is (1) Insolvency of the new obligation pays, without prejudice to the effects of
released debtor revives the confusion as to the latter’s share
(2) Insolvency of the new obligation of the old
debtor does not debtor if it was Effects
revive the old anterior and public, Total Partial
obligation in case the and known to the old
(1) Transfers to the person (1) A creditor, to whom
old debtor did not debtor.
subrogated the credit partial payment
agree to expromision (2) New debtor can
with all the rights has been made,
(3) If with knowledge demand
thereto appertaining, may exercise his
and consent of old reimbursement of the
either against the debtor right for the
debtor, new debtor entire amount he has
or third persons. remainder, and
can demand paid from the original
(2) Obligation is not shall be preferred
reimbursement of the debtor. He may
extinguished, even if the to the person
entire amount paid compel creditor to
intention is to pay it. subrogated in his
and with subrogation subrogate him to all
(3) Defenses against the old place in virtue of
of creditor’s rights. of his rights.
creditor are retained, the partial
(4) If without knowledge
unless waived by the payment.
of the old debtor, new
debtor.
debtor can demand
reimbursement only
up to the extent that
the latter has been
benefited without
subrogation of
creditor’s rights.
(2) Subrogation of a third person in the rights of the

creditor
(a) Conventional subrogation: by agreement of
the parties;
Requisites: the consent of the third person, and of the

original parties (Art. 1301).
PAGE 159
UP COLLEGE OF LAW OBLIGATIONS & CONTRACTS BAR OPERATIONS COMMISSION
Essential Requisites position to deliberate whether or not he would

purchase the yacht and invitation to a proposal being
made to him, which might be accepted by him or
ARTICLE 1318 not”
Art. 1318. There is no contract unless the following
requisites concur: OFFER TERMINATES upon:
(1) Consent of the contracting parties; (a) Rejection by the offeree
(2) Object certain which is the subject matter of the (b) Incapacity (death, civil interdiction, insanity, or
contract; insolvency) of the offeror or offeree before
(3) Cause of the obligation which is established. acceptance is conveyed
(c) Counter-offer
(d) Lapse of the time stated in the offer without
CONSENT
acceptance being conveyed
(a) The meeting of the minds between the parties on
(e) Revocation of the offer before learning of
the subject matter and the cause of the contract.
acceptance
(b) The manifestation of the meeting of the offer and
(f) Supervening illegality before acceptance [J.B.L.
the acceptance upon the thing and the cause
Reyes]
which are to constitute the contract.
Requisites of Consent:
ACCEPTANCE
(1) It must be manifested by the concurrence of the
Requisites:
offer and acceptance [Arts. 1319-1326].
(a) Unqualified and unconditional, i.e. it must
(2) The contracting parties must possess the
conform with all the terms of the offer, otherwise
necessary legal capacity [Arts. 1327-1329].
it is a counter-offer (Art. 1319)
(3) It must be intelligent, free, spontaneous, and real
(b) Communicated to the offeror and learned by him
(not vitiated) [Arts. 1330-1346].
(Arts. 1319, 1322). If made through an agent, the
offer is accepted from the time the acceptance is
CONCURRENCE OF OFFER AND ACCEPTANCE
communicated to such agent.
Offer: a unilateral proposition which one party makes (c) Express/implied, but is not presumed.
to the other for the celebration of the contract
[Tolentino]. OPTION CONTRACT: A preparatory contract in which
one party grants to the other, for a fixed period, the
Requisites: option to decide whether or not to enter into a
(a) Definite principal contract [Art. 1324].
(b) Intentional
(c) Complete
With consideration Without consideration
Invitation to make offers (advertisements)
(a) Business advertisements of things for sale are
Offeror cannot Offeror may withdraw by
NOT definite offers, just invitations to make an
unilaterally withdraw his communicating
offer, UNLESS the contrary appears (Art. 1325).
offer. withdrawal to the offeree
(b) Advertisements for bidders are invitations to
before acceptance.
make proposals, the advertiser is NOT bound to
accept the lowest or highest bid; UNLESS the
contrary appears. The bidder is the offeror (Art. LEGAL CAPACITY
1326). Persons Incapacitated to Give Consent
(c) Statements of intention: no contract results even (a) Minors, UNLESS, the minor’s consent is operative
if accepted. in contracts:
(1) For necessaries [Art.1427]
(2) Where the minor actively misrepresents his
Rosenstock v. Burke (1924):
age (estoppel)
FACTS: Elser, in a letter, informed Burke that he was
Mercado v. Espiritu, 1917: Minors held in estoppel
“in a position and is willing to entertain” the
through active misrepresentation.
purchase of the yacht under some terms.
Bambalan v. Maramba, 1928: There is no estoppel if
the minority was known by the other party.
HELD: “The word “entertain” applied to an act does
(b) Insane or demented persons, UNLESS they
not mean the resolution to perform said act, but
contract during a lucid interval.
simply a position to deliberate for deciding to
(c) Deaf-mutes who do not know how to read AND
perform or not to perform said act. It was merely a
write.
PAGE 160
Disqualified to contract [art. 1329]:

(a) Those under civil interdiction for transactions inter Martinez v. HSBC (1910):
vivos [RPC Art. 34]. The conveyance of several properties by the wife to her
(b) Undischarged insolvents [Insolvency Law, Sec. husband’s creditors, though reluctant, is still consent.
24]. She assented to the requirements of the defendants in
(c) Husband and wife cannot donate to each other order that the civil and criminal actions against them
[Art. 123, FC], nor sell if the marriage is under ACP would be dropped. A contract is valid even though one
[Art.1490]. of the parties entered into it against his wishes and
(d) The ff. cannot purchase [Art. 1491]: desires, or even against his better judgment.
(1) The guardian: his ward’s property
(2) The agent: the principal’s property (3) Violence
(3) Executors and administrators: property under Irresistible force used to extort consent (J.B.L. Reyes).
administration
(4) Public officers-state: property under their (4) Undue Influence
administration When a person takes improper advantage of his
(5) Justices, judges, prosecutors, clerks of court, power over the will of another, depriving the latter of
lawyers: property attached in litigation. a reasonable freedom of choice [Art. 1337].
Circumstances:
VICES OF CONSENT (a) Relationship of the parties (family, spiritual,
(1) Mistake confidential etc.)
Inadvertent and excusable disregard of a (b) That the person unduly influenced was suffering
circumstance material to the contract [J.B.L. Reyes]. from infirmity (mental weakness, ignorance etc.)
(Art.1337).
In order that mistake may invalidate consent, it
should refer to the substance of the thing which is (5) Fraud
the object of the contract, or to those conditions When through insidious words or machinations of
which have principally moved one or both parties to one of the contracting parties, the other is induced to
enter into the contract [Art.1331]. enter into a contract which, without them, he would
not have agreed to [Art. 1338].
Mistake which vitiates consent is an error of fact, and
not an error of law. Ignorance of the law excuses no ARTICLE 1339
one from compliance therewith (Art. 3); but the
Art. 1339. Failure to disclose facts, when there is a
modern tendency is to allow an excusable mistake of
duty to reveal them, as when the parties are bound
law to be invoked as vitiating consent (Tolentino).
by confidential relations, constitutes fraud.
Mistake of Fact Mistake of Law Mutual Mistake
ARTICLE 1340
When one or When one or (1) Must be as
both contracting both parties to the legal Art. 1340. The usual exaggerations in trade, when the
parties believe arrive at an effect of an other party had an opportunity to know the facts, are
that a fact exists erroneous agreement not in themselves fraudulent.
when in reality it conclusion on (2) Must be
does not, or vice the mutual ARTICLE 1341
versa. interpretation of (3) Real Art. 1341. A mere expression of an opinion does not
a question of purpose of signify fraud, unless made by an expert and the other
law or its legal the parties party has relied on the former's special knowledge,
effects. must have
been ARTICLE 1342
frustrated
Art. 1342. Misrepresentation by a third person does
not vitiate consent, unless, such misrepresentation
(2) Intimidation
has created substantial mistake and the same is
When one of the contracting parties is compelled by
mutual.
a reasonable and well-grounded fear of an imminent
and grave evil upon his person or property, or upon
the person or property of his spouse, descendants or ARTICLE 1343
ascendants, to give his consent [Art. 1335]. Art. 1343. Misrepresentation made in good faith is
not fraudulent but may constitute error.
PAGE 161
SIMULATION OF CONTRACTS takes place when the (b) Aleatory contract, where one of the contracting
parties do not really want the contract they have parties assumes the risk that the thing will never
executed to produce the legal effects expressed by come into existence, e.g. insurance.
its wordings. It may be absolute or relative [Arts.
1345-1346]. CAUSE
DEFINITION
The essential and impelling reason why a party
Absolute Simulation Relative Simulation assumes an obligation (Manresa). Motive, on the
other hand, is the particular reason for a contracting
No real transaction is Real transaction is hidden. party which does not affect the other.
intended.
Fictitious contract. Disguised contract. REQUISITES:
Void. Bound as to hidden 1. Must exist at the time of the contract is entered
agreement, so long as it into [Arts. 1352, 1409, par. 3].
does not prejudice a third 2. Must be lawful (ibid).
person and is not contrary 3. Must be true or real [Art.1353].
to law, morals, good
customs, public order or CAUSE IN
public policy. Onerous Renumeratory Pure
Contracts Contracts Beneficence
OBJECT The undertaking The service or Mere
DEFINITION: or the promise benefit which is liberality of
The subject matter; the thing, right or service which of the thing or remunerated the
is the subject matter of the obligation arising from service by the benefactor
the contract [Tolentino]. other party
REQUISITES: In Villaroel v. Estrada (1940), where a moral

(a) Must be within the commerce of men [Art. 1347] obligation is based upon a previous civil obligation,
(b) Must not be impossible, legally or physically which has already been barred by the statute of
[Art.1348] limitations at the time the contract is entered into, it
(c) For things as object of contract, must be in constitutes a sufficient cause or consideration to
existence or capable of coming into existence support a contract (natural obligation).
[See Arts. 1461, 1493, 1495]
(d) Must be determinate or determinable, without BUT,
the need of a new contract between the parties In Fisher v. Robb (1939), if the moral obligation arises
[Arts. 1349, 1460, par.2] wholly from ethical consideration, it cannot
constitute a sufficient cause to support an onerous
All things or services may be the object of contracts, contract, as when the promise is made on the
EXCEPT: erroneous belief that one was morally responsible for
(a) Things which are outside the commerce of men the failure of an enterprise (moral obligation).
(b) Intransmissible rights
(c) Future inheritance except in cases authorized by
law Cause Effect
(d) Impossible things or services
(e) Objects which are indeterminable as to their kind, Lack of Cause – If there is no cause
the genus should be expressed absence or total lack whatsoever, contract is VOID;
of cause a fictitious sale is VOID.
In order that a thing, right, or service, may be the
object of a contract, it should be in existence at the NOTE: Cause must exist at
moment of the celebration of the contract, or at the time of the perfection of
least, it can exist subsequently or in the future. the contract; it need not exist
later.
A FUTURE THING may be the object of a contract,
such contract may be interpreted as a: Contrary to law, If cause is unlawful,
(a) Conditional contract, where 3its efficacy should morals, good transaction is VOID.
depend upon the future existence of the thing. customs, public policy
PAGE 162
Cause Effect REAL

Contracts which are perfected not merely by consent
and public order If parts of a contract are but by delivery, actual or constructive, of the object of
illegal but the rest are the obligation [Art.1316]. Example: contract of
supported by lawful cause, pledge, commodatum, mutuum.
claimant of such has the
burden of showing proof; FORMAL OR SOLEMN
otherwise, the whole contract Contracts for which a special form is necessary for its
is VOID. perfection [Art. 1356].
Contract with illegal cause DONATIONS (ARTS. 748-749)

may still produce effect in ARTICLE 748
certain cases where parties
Art. 748. The donation of a movable may be made
are not of equal guilt: (1)
orally or in writing.
innocent party can’t be
compelled to perform his
An oral donation requires the simultaneous delivery
obligation and he may
of the thing or of the document representing the
recover what has already
right donated.
been given; (2) if both parties
are guilty, neither can sue the
If the value of the personal property donated exceeds
other, the law leaving them
five thousand pesos, the donation and the
as they are (in pari delicto).
acceptance shall be made in writing, otherwise, the
donation shall be void.
Falsity of cause – Contract with a false cause is
cause is stated but is merely revocable/voidable.
ARTICLE 749
untrue
Parties are given a chance to Art. 749. In order that the donation of an immovable
show that a cause really may be valid, it must be made in a public document,
exists, and that said cause is specifying therein the property donated and the
true and lawful. value of the charges which the donee must satisfy.
Lesion or inadequacy Inadequacy of cause shall not The acceptance may be made in the same deed of
of cause – cause is invalidate the contract except donation or in a separate public document, but it
not proportionate to when: (1) there is fraud, shall not take effect unless it is done during the
object mistake, undue influence (2) lifetime of the donor.
when parties intended a
donation If the acceptance is made in a separate instrument,
the donor shall be notified thereof in an authentic
form, and this step shall be noted in both
Liguez v. CA (1957):
instruments.
In making the donation in question, Lopez was not
moved exclusively by the desire to benefit Liguez, but
also to secure her cohabiting with him, so that he PARTNERSHIP WHERE REAL PROPERTY IS CONTRIBUTED
could gratify his sexual impulses. The donation was (ARTS. 1771, 1773)
an onerous transaction and clearly predicated upon ARTICLE 1771
an illicit causa. Art. 1771. A partnership may be constituted in any
form, except where immovable property or real rights
are contributed thereto, in which case a public
instrument shall be necessary.
Kinds of Contracts ARTICLE 1773
CONSENSUAL Art. 1773. A contract of partnership is void, whenever

Contracts which are perfected by mere consent of immovable property is contributed thereto, if an
the parties regarding the subject matter and the inventory of said property is not made, signed by the
cause of the contract [Art.1315]. parties, and attached to the public instrument.
PAGE 163
ANTICHRESIS (ART. 2134) Formal/Solemn Contract Special Form Required

ARTICLE 2134 by Law
Art. 2134. The amount of the principal and of the P500 (Art. 748).
interest shall be specified in writing; otherwise, the (3) Partnerships where real Must be in public
contract of antichresis shall be void. property contributed instrument; otherwise
the contract of
partnership is void
AGENCY TO SELL REAL PROPERTY OR AN INTEREST
(Art.1771, 1773).
THEREIN (ART. 1874)
(4) Contracts of antichresis The principal loan and
ARTICLE 1874
the interest, if any,
Art. 1874. When a sale of a piece of land or any must be specified in
interest therein is through an agent, the authority of writing; otherwise, the
the latter shall be in writing; otherwise, the sale shall contract of antichresis
be void. is void (Art. 2134).
(5) Agency to sell real Authority of the agent
STIPULATION TO CHANGE INTEREST (ART. 1956) property or any interest must be in writing;
ARTICLE 1956 therein otherwise, the sale is
Art. 1956. No interest shall be due unless it has been null and void
expressly stipulated in writing. (Art.1874).
(6) Stipulation to pay Must be expressly
interest on loans, interest made in writing
STIPULATION LIMITING COMMON CARRIER’S DUTY OF for the use of money (Art.1956).
EXTRAORDINARY DILIGENCE TO ORDINARY DILIGENCE
(ART. 1744) (7) Stipulation limiting Must be (1) in writing,
ARTICLE 1744
common carrier’s duty of signed by the shipper
Art. 1744. A stipulation between the common carrier extraordinary diligence to or owner; (2)
and the shipper or owner limiting the liability of the ordinary diligence supported by a
former for the loss, destruction, or deterioration of valuable consideration;
the goods to a degree less than extraordinary and (3) reasonable,
diligence shall be valid, provided it be: just and not contrary
to public policy.
(1) In writing, signed by the shipper or owner; (8) Chattel mortgage Must be recorded in
the Chattel Mortgage
(2) Supported by a valuable consideration other than Register (Art. 2140).
the service rendered by the common carrier; and (9) Transfer of large cattle Requires transfer of
the certificate of
(3) Reasonable, just and not contrary to public policy. registration (Rev. Adm.
Code, Sec. 523).
CHATTEL MORTGAGE
ARTICLE 2140
Art. 2140. By a chattel mortgage, personal property is
recorded in the Chattel Mortgage Register as a
security for the performance of an obligation. If the
Formality
movable, instead of being recorded, is delivered to STATUTORY BASIS
the creditor or a third person, the contract is a pledge ARTICLE 1356
and not a chattel mortgage.
Art. 1356. Contracts shall be obligatory, in whatever
form they may have been entered into, provided all
SALE OF LARGE CATTLE the essential requisites for their validity are present.
Summary of Formal or Solemn Contracts However, when the law requires that a contract be in
Formal/Solemn Contract Special Form Required some form in order that it may be valid or
by Law enforceable, or that a contract be proved in a certain
(1) Donations of real Must be in a public way, that requirement is absolute and indispensable.
property instrument (Art.749). In such cases, the right of the parties stated in the
(2) Donations of personal Must be in a written following article cannot be exercised.
property contract if the
donation exceeds
PAGE 164
GENERALLY, form is not required. It is enough that The necessity for the public document in the
there be consent, subject matter and cause contracts enumerated under this article is only for
(Art.1318). convenience, not for validity or enforceability.
EXCEPTIONS:
(1) Formal contracts and Fule v. Court of Appeals (1998):
(2) Real contracts Article 1358, which requires the embodiment of
certain contracts in a public instrument, is only for
When Form is Important: convenience, and registration of the instrument only
(a) For Validity – e.g. for formal or solemn contracts adversely affects third parties.
(b) For Enforceability – e.g. for agreements
enumerated under the Statute of Frauds
(Art.1403)
(c) For Convenience – e.g. for contracts enumerated
in Art. 1385 Defective Contracts
ARTICLE 1357 FOUR KINDS OF DEFECTIVE CONTRACTS
Art. 1357. If the law requires a document or other (PARAS):
special form, as in the acts and contracts (a) RESCISSIBLE: Valid until rescinded. All essential
enumerated in the following article, the contracting requisites of a contract exist but there is injury or
parties may compel each other to observe that form, damage to one of the parties or to third persons –
once the contract has been perfected. This right may external or extrinsic defect consisting of an
be exercised simultaneously with the action upon the economic damage or lesion.
contract. (1279a) (b) VOIDABLE: Valid until annulled, unless ratified.
Defect is more or less intrinsic, as in the case of
This article applies only when form is needed for vitiated consent.
convenience, not for validity or enforceability. Thus, (c) UNENFORCEABLE: Cannot be sued upon or
before the contracting parties may be compelled to enforced, unless it is ratified. Intermediate ground
execute the needed form, it is essential that the between voidable and void contracts.
contract be: (1) perfected or valid (Art.1357) and (2) (d) VOID: No legal effect at all and cannot be ratified
enforceable under the Statute of Frauds (Art.1356). or validated.
RESCISSIBLE CONTRACTS (ART. 1381)
Art. 1358. The following must appear in a public Art. 1381. The following contracts are rescissible:
document: Those which are entered into by guardians whenever
(1) Acts and contracts which have for their object the the wards whom they represent suffer lesion by more
creation, transmission, modification or than one-fourth of the value of the things which are
extinguishment of real rights over immovable the object thereof;
property; sales of real property or of an interest Those agreed upon in representation of absentees, if
therein a governed by Articles 1403, No. 2, and 1405; the latter suffer the lesion stated in the preceding
(2) The cession, repudiation or renunciation of number;
hereditary rights or of those of the conjugal Those undertaken in fraud of creditors when the
partnership of gains; latter cannot in any other manner collect the claims
(3) The power to administer property, or any other due them;
power which has for its object an act appearing or Those which refer to things under litigation if they
which should appear in a public document, or should have been entered into by the defendant without the
prejudice a third person; knowledge and approval of the litigants or of
(4) The cession of actions or rights proceeding from competent judicial authority;
an act appearing in a public document. All other contracts specially declared by law to be
All other contracts where the amount involved subject to rescission.
exceeds five hundred pesos must appear in writing,
even a private one. But sales of goods, chattels or ARTICLE 1382
things in action are governed by Articles, 1403, No. 2 Art. 1382. Payments made in a state of insolvency for
and 1405. obligations to whose fulfillment the debtor could not
be compelled at the time they were effected, are also
rescissible.
PAGE 165
Definition Art. 1191 – Rescission or Art. 1381 – Rescission by

(1) Process designated to render inefficacious a Resolution reason of lesion
contract validly entered into and normally damages for the breach subordinated to the
binding, by reason of external conditions, causing is purely secondary. existence of an economic
an economic prejudice to a party or to his prejudice. Hence, where
creditors (Scaevola). the defendant makes
(2) Remedy granted by law to the contracting parties good the damages
and to third persons in order to secure reparation caused, the action cannot
for damages caused them by a contract, even if be maintained or
the contract is valid, by means of the restoration continued.
of things to their condition prior to the
celebration of said contract (Manresa) VOIDABLE CONTRACTS
(3) Relief to protect one of the parties or a third ARTICLE 1390
person from all injury and damages which the Art. 1390. The following contracts are voidable or
contract may cause, to protect some preferential annullable, even though there may have been no
right [Aquino v. Tañedo (1919)]. damage to the contracting parties:
(1) Those where one of the parties is incapable of
DIFFERENCE FROM RESCISSION (RESOLUTION) UNDER giving consent to a contract;
ART. 1191 (2) Those where the consent is vitiated by mistake,
ARTICLE 1191 violence, intimidation, undue influence or fraud.
Art. 1191. The power to rescind obligations is implied
in reciprocal ones, in case one of the obligors should These contracts are binding, unless they are
not comply with what is incumbent upon him. annulled by a proper action in court. They are
susceptible of ratification.
The injured party may choose between the
fulfillment and the rescission of the obligation, with Three Ways or Modes of Convalidating a Voidable
the payment of damages in either case. He may also Contract [Jurado]
seek rescission, even after he has chosen fulfillment, (1) By prescription of the action for annulment
if the latter should become impossible. (Art.1391)
(2) By ratification or confirmation (Art. 1392-1396)
The court shall decree the rescission claimed, unless (3) By loss of the thing which is the object of the
there be just cause authorizing the fixing of a period. contract through the fraud or fault of the person
who is entitled to institute the action for the
This is understood to be without prejudice to the annulment (Art.1401)
rights of third persons who have acquired the thing,
in accordance with Articles 1385 and 1388 and the ARTICLE 1391
Mortgage Law.
Art. 1391. The action for annulment shall be brought
within four years.
Congregation of the Religious Virgin Mary v. Orola
(2008): This period shall begin:
Art. 1191 – Rescission or Art. 1381 – Rescission by
Resolution reason of lesion In cases of intimidation, violence or undue influence,
Applies only to Does not apply to from the time the defect of the consent ceases.
reciprocal obligations, reciprocal obligation, and
such that a party’s therefore, action is not In case of mistake or fraud, from the time of the
breach thereof partakes based on a breach of an discovery of the same.
of a tacit resolutory obligation.
condition which entitles And when the action refers to contracts entered into
the injured party to by minors or other incapacitated persons, from the
rescission. time the guardianship ceases.
Predicated on breach of Predicated on injury to
faith. economic interests of the UNENFORCEABLE CONTRACTS
party plaintiff/lesion. ARTICLE 1403
Principal action that is Subsidiary action.
retaliatory in character. Art. 1403. The following contracts are unenforceable,
unless they are ratified:
The reparation of The cause of action is
PAGE 166
(1) Those entered into in the name of another person General Rules of Application of Statute of Frauds
by one who has been given no authority or legal (a) The Statute of Frauds is a Rule of Exclusion, i.e.
representation, or who has acted beyond his oral evidence might be relevant to the
powers; agreements enumerated therein and might
(2) Those that do not comply with the Statute of therefore be admissible were it not for the fact
Frauds as set forth in this number. In the that the law excludes said oral evidence.
following cases an agreement hereafter made (b) The defense of the Statute of Frauds may be
shall be unenforceable by action, unless the waived [Art.1405].
same, or some note or memorandum, thereof, be (c) Applies only to executory contracts, not partially
in writing, and subscribed by the party charged, or completely executed (consummated)
or by his agent; evidence, therefore, of the contracts.
agreement cannot be received without the (d) The Statute of Frauds cannot apply if the action is
writing, or a secondary evidence of its contents: neither for damages because of the violation of an
(a) An agreement that by its terms is not to be agreement nor for the specific performance of said
performed within a year from the making agreement [Lim vs. Lim, 10 Phil 635].
thereof; (e) The Statute of Frauds is exclusive, that is, it
(b) A special promise to answer for the debt, applies only to the agreements or contracts
default, or miscarriage of another; enumerated therein [See Quintos v. Morata
(c) An agreement made in consideration of (1930)].
marriage, other than a mutual promise to (f) The Statute of Frauds is a personal defense, that
marry; is, a contract infringing it cannot be assailed by
(d) An agreement for the sale of goods, chattels third persons [Art.1408].
or things in action, at a price not less than five (g) Contracts infringing the Statute of Frauds are not
hundred pesos, unless the buyer accept and void, they are merely unenforceable [Art.1403].
receive part of such goods and chattels, or the (h) The Statute of Frauds does not determine the
evidences, or some of them, of such things in credibility or weight of evidence. It merely
action or pay at the time some part of the concerns itself with the admissibility thereof.
purchase money; but when a sale is made by (i) The Statute of Frauds does not apply if it is
auction and entry is made by the auctioneer in claimed that the contract does not express the
his sales book, at the time of the sale, of the true agreement of the parties. As long as the true
amount and kind of property sold, terms of or real agreement is not covered by the Statute of
sale, price, names of the purchasers and Frauds, it is provable by oral evidence [Cayuga v.
person on whose account the sale is made, it Santos].
is a sufficient memorandum;
(e) An agreement of the leasing for a longer VOID CONTRACTS
period than one year, or for the sale of real ARTICLE 1409
property or of an interest therein; Art. 1409. The following contracts are inexistent and
(f) A representation as to the credit of a third void from the beginning:
person. Those whose cause, object or purpose is contrary to
(3) Those where both parties are incapable of giving law, morals, good customs, public order or public
consent to a contract. policy;
Those which are absolutely simulated or fictitious;
Definition of Unenforceable Contracts Those whose cause or object did not exist at the time
Those that cannot be enforced in court or sued upon of the transaction;
by reason of certain defects provided by law until and Those whose object is outside the commerce of men;
unless they are ratified according to law [De Leon]. Those which contemplate an impossible service;
Those where the intention of the parties relative to
Kinds of Unenforceable Contracts: the principal object of the contract cannot be
(1) Unauthorized contracts – those entered into by ascertained;
one who has no authority or legal representation Those expressly prohibited or declared void by law.
or who has acted beyond his powers [Art.1403, These contracts cannot be ratified. Neither can the
par.1]. right to set up the defense of illegality be waived.
(2) Those which did not comply with the Statute of
Frauds [Art.1403, par.2]. Definition of Void Contract [De Leon]
(3) Those where both parties are incapable of giving Those which, because of certain defects, generally
consent to a contract [Art.1403, par.3]. produce no effect at all. They are considered as
PAGE 167
inexistent from its inception or from the very ARTICLE 1346

beginning. Art. 1346. An absolutely simulated or fictitious
contract is void. A relative simulation, when it does
Special Classification of Void Contracts (Paras) not prejudice a third person and is not intended for
(1)INEXISTENT CONTRACTS: like those where any purpose contrary to law, morals, good customs,
essential formalities are not complied with public order or public policy binds the parties to their
(a) Example: A donation of land in a private real agreement.
instrument
(b) This produces no effect whatsoever. Effect of Simulated Contract
(a) If ABSOLUTELY simulated, the contract is void for
(2) ILLEGAL OR ILLICIT CONTRACTS: utter lack of consent.
(a) Example: A donation made because of an (b) If RELATIVELY simulated, the hidden or intended
immoral condition, such as illicit sexual contract is generally binding (Onglengco v.
intercourse Ozaeta).
(b) In some way, the donation produces some
effect in that that he who gave the donation Stipulations must not be contrary to MANDATORY
cannot get back what he has given. AND PROHIBITIVE LAWS.
(1) Pactum commissorium [Arts. 2088, 2130, 1390]
Non-Existing Cause or Object [Paras] A stipulation in a contract of mortgage or pledge
Paragraph 3 speaks of contracts “whose object or which provides that the mortgagee will
cause did not exist at the time of the transaction.” automatically own the property mortgaged in case
This is not exactly correct because there can be valid the mortgagor fails to pay the loan is VOID [Art.
contracts involving future property; example, sale of 2088]
future or after-acquired property. Thus, Mr. Justice J. (2) Pactum de non alienando [Art. 2130]
B. L. Reyes notes: “Did not exist at the time of the A stipulation forbidding the owner from alienating
transaction” should be “Could not come into the immovable mortgaged shall be VOID [Art.2130].
existence because the object may legally be a future (3) Pactum leonina [Art. 1799]
thing.” A stipulation which excludes one or more partners
from any share in the profits or losses is VOID
[Art.1799]
Rescissible Voidable Unenforceable Void

Defect
Damage to a party or to a third Vitiation of Without or in excess of Absolute lack of essential
person. consent authority, or doesn’t requisite in fact or in law.
comply with Statute of
Fraud, or both parties are
incapacitated.
Effect
Valid until rescinded. Valid until Cannot be enforced by Does not produce any
annulled. court action. effect.
Grounds
1381 – 1382 1390 1403 1409
Necessity of Damage
Necessary. Not necessary.
Ratification
Can’t be ratified. May be ratified. Can’t be ratified.
Prescription
Prescriptible. - Imprescriptible.
Assailability by third persons
Assailable by a party or by a third Assailable only by a party. Assailable by a party or by a
party who is damaged. third party who is damaged.
PAGE 168
UP LAW BAR OPERATIONS COMMISSION CONTRACTS CIVIL LAW REVIEWER
Effects of Contracts
STATUTORY BASIS
ARTICLE 1311
Art. 1311. Contracts take effect only between the
parties, their assigns and heirs, except in case where
the rights and obligations arising from the contract
are not transmissible by their nature, or by
stipulation or by provision of law. The heir is not
liable beyond the value of the property he received
from the decedent.
If a contract should contain some stipulation in favor

of a third person, he may demand its fulfillment
provided he communicated his acceptance to the
obligor before its revocation. A mere incidental
benefit or interest of a person is not sufficient. The
contracting parties must have clearly and
deliberately conferred a favor upon a third person.
GENERAL RULE: Contracts are generally effective

only between the parties, their assigns and their
heirs (principle of relativity).
EXCEPTIONS
(a) Obligations arising from the contract are not
transmissible by nature, stipulation or law
[Art.1311].
(b) Where there is a stipulation pour autrui.
STIPULATION POUR AUTRUI (definition):
stipulation in favor of a third person conferring
clear and deliberate favor which is merely art of
the contract entered into by parties, neither of
whom acted as agent of third person.
(c) Third person induces another to violate his
contract (Art. 1314).
(d) Where third persons may be adversely affected by
a contract where they did not participate [see
Arts. 1312, 2150, 2151].
(e) Where law authorizes creditor to sue on a
contract entered into by his debtor [accion
directa, Art. 1313]
PAGE 169
UP COLLEGE OF LAW SALES BAR OPERATIONS COMMISSION
PAGE 170
Introduction (1) Specific or Determinate Thing – capable of

particular designation, e.g. this car, the car with
plate no. XNY 200
DEFINITION OF SALES – ARTS. 1458, 1470 (2) Generic or Indeterminate Thing – refers only to a
Art. 1458. By the contract of sale one of the class, to a genus, and cannot be pointed out with
contracting parties obligates himself to transfer the particularity, e.g. a car (GENUS NUNQUAM
ownership and to deliver a determinate thing, and PERIT)
the other to pay therefor a price certain in money or
its equivalent. NATURE OF OBLIGATIONS CREATED PER DEFINITION IN
ART.1458 [VILLANUEVA]:
A contract of sale may be absolute or conditional. (1) For the SELLER:
(a) To transfer ownership and
ESSENTIAL REQUISITES OF A CONTRACT OF (b) To deliver possession of the subject matter
SALE – ART. 1505 (2) For the BUYER: To pay the price
ESSENTIAL ELEMENTS OF A VALID CONTRACT OF SALE
[CORONEL V. COURT OF APPEALS, 1996]: CHARACTERISTICS OF A CONTRACT OF SALE
(4) Consent or meeting of the minds to transfer (1) Consensual – perfected by mere consent.
ownership in exchange for the price (2) Bilateral and Reciprocal – imposes obligations on
(a) Being a consensual contract, the contract of both parties to the relationship. Consequently,
sale is perfected at the moment there is a power to rescind is implied.
“meeting of the minds” upon the thing which (3) Principal – can stand on its own and does not
is the object of the contract and upon the depend on another contract for validity, as
price. [Art. 1475] contrasted from an accessory contract.
(b) Requisites: (1) Capacity, (2) Offer and (4) Onerous – imposes valuable consideration as
acceptance, and (3) No vitiation of consent prestation, as distinguished from a gratuitous
(5) Determinate subject matter contract.
(6) Price certain in money or its equivalent (5) Commutative – because a thing for value is
exchanged for equal value, as contrasted from an
STAGES OF CONTRACT OF SALE aleatory contract.
PHASES OF A SALE CONTRACT [VILLANUEVA]: (6) Nominate – given a particular name by law
(1) Preparation, conception or generation stage –
period of negotiation and bargaining, ending at SALE IS TITLE AND NOT MODE
the moment of agreement of the parties. Delivery or Tradition is the mode to transfer
(2) Perfection or “birth” of the contract – moment ownership and possession to the buyer.
when the parties come to agree on the terms of
the contract; and When a contract of sale is perfected, the seller is
(3) Consummation or “death” of the contract – merely obligated to transfer ownership and to deliver
process of fulfillment or performance of the terms the property. Transfer of ownership is effected only
agreed upon in the contract. upon delivery.
OBLIGATIONS CREATED – ART. 1165 Equatorial Realty Dev. v. Mayfair Theater (2001): Sale
Art. 1165. When what is to be delivered is a is merely title that creates the obligation on the part
determinate thing, the creditor, in addition to the of the seller to transfer ownership and deliver
right granted him by Article 1170, may compel the possession, but on its own, sale is not a mode that
debtor to make the delivery. transfers ownership.
If the thing is indeterminate or generic, he may ask SALE DISTINGUISHED FROM OTHER
that the obligation be complied with at the expense CONTRACTS
DONATION
of the debtor.
Sale Donation
If the obligor delays, or has promised to deliver the Onerous Gratuitous
same thing to two or more persons who do not have
the same interest, he shall be responsible for any Perfected by mere Must comply with the
fortuitous event until he has effected the delivery. consent formalities required by
law. [Art 745, CC]
PAGE 171
When the price of the contract of sale is simulated, There is a novation of the contract of loan into a
the sale may be void but the act may be shown to contract of sale when the creditor agrees to accept a
have been in reality a donation or some other thing in payment of the debt. Hence, if the thing
contract. [Art.1471, CC] given in payment turns out to belong to another, the
creditor’s remedy should be governed by the law on
BARTER sales, not loan. [Baviera]
Sale Barter
Bilateral promise to buy and sell [Asked in 80, 91]
Consideration is price in Consideration is A promise to buy and sell a determinate thing for a
money or its equivalent another thing price certain is reciprocally demandable. [Art 479,
CC]
Barter is a contract where one of the parties binds
himself to give one thing in consideration of the Like a sale, the thing must be determinate and the
other’s promise to give another thing [Art.1638, CC] price, certain.
If consideration consists partly in money and partly in CONTRACT OF SALE/CONTRACT TO SELL
another thing, the intention of the parties determines
whether the contract is one of sale or barter: Contract of Sale Contract to sell
If manifest intention is not clear: Barter when Ownership is Ownership is only
the value of thing is more than the amount of transferred upon transferred upon full
money or its equivalent; otherwise, sale. delivery payment of price
[Art.1468] Non-payment is a Full payment is a
resolutory condition positive suspensive
condition, hence non-
CONTRACT FOR A PIECE OF WORK payment would not
Contract for a Piece of give rise to the
Sale
Work obligation to transfer
Goods are Goods are ownership
manufactured or manufactured for
procured in the ordinary customer upon his Conditional Contract of
course of business special order Contract to sell
Sale
For the general market, For a specific Sale is already No perfected sale yet
whether on hand or not customer perfected
A subsequent buyer is A subsequent buyer is
The fact that the object were made by the seller only presumed to be a buyer presumed to be a
when customers placed their orders, does not alter in bad faith buyer in good faith
the nature of the contract of sale, for it only accepted
such orders as called for the employment of such
materials as it ordinarily manufactured or was in a
position habitually to manufacture such. [Celestino
Co & Co vs. Collector, 1956] Parties to a Contract of Sale
When each product or system executed is always
CAPACITY OF PARTIES – ARTS. 1489-1492
UNIQUE and could not mass-produce the product
All persons who have capacity to enter into
because of its very nature, such is a contract for a obligations may enter into a contract of sale [Art
piece of work. [Commissioner vs. Engineering
1489, CC]
Equipment and Supply Co., 1975]
KINDS OF INCAPACITY
DACION EN PAGO
(1) Absolute incapacity
Sale Dacion en pago (2) Relative incapacity
No pre-existing debt Pre-existing debt (3) Specific incapacity/Special disqualifications
Creates an obligation Extinguishes the
obligation (mode of ABSOLUTE INCAPACITY – ARTS. 1327, 1397, 1399
payment)
Price is more freely Price is value of the (MIND-CI) [ART. 1327, CC]
agreed upon, fixed by thing given (1) Minors
the parties (2) Insane or Demented
PAGE 172
(3) Deaf-mutes who do not know how to write (5) Lawyers

(4) Civil Interdiction Cannot acquire or purchase property or rights in
(5) Judicially-declared Incompetents (Art. 39) litigation in which they take part by virtue of their
(a) Prodigals profession
(b) Imbeciles
(c) Absence & presumption of death Rationale: Lawyers may have undue influence
(d) Persons not of unsound mind but by reason of over client; greed may get the better of the
age, disease, weak mind, and other similar sentiments of loyalty and disinterestedness.
causes, cannot take care of themselves and [Valencia v Cabanting, 1991]
manage their property without outside aid
(Easy prey for deceit and exploitation) Prohibition is definite and permanent and cannot
be cured by ratification. [Rubias v Batiller, 1973]
RELATIVE INCAPACITY: MARRIED PERSONS
(1) HUSBAND AND WIFE [ART. 1490, CC] Exceptions: An assignment to a lawyer by his
General Rule: Cannot sell property to each other client of an interest in the property does not
Exceptions: violate Art 1491, where:
(1) Separation of property in marriage settlement, (1) A judgment has been rendered and has
OR become final; and
(2) Judicial separation of property. (2) In case of contingency fee arrangements: the
interest of the lawyer may be annotated as an
(2) ALIENAGE [ART. 39, CC] adverse claim on the property awarded to his
General Rule: Aliens are disqualified from client [Director of Lands v Ababa, 1979]
purchasing or acquiring real property.
Exception: If acquisition is through hereditary (6) Justices, Judges, prosecuting attorneys, clerks and
succession other officers and employees connected with the
administration of justice
(3) TRUSTEESHIP [ART. 39] Cannot acquire or purchase property or rights in
litigation or levied upon on execution before the
SPECIAL DISQUALIFICATIONS – ARTS. 1491-1492 court within whose jurisdiction or territory they
SPECIFIC INCAPACITY/ SPECIAL DISQUALIFICATIONS (ART. exercise their respective functions.
1491, CC) (AGE-PLJ)
(1) Agents Rationale: to prevent fraud and to surround their
Cannot purchase or acquire property whose profession with prestige.
administration or sale was entrusted to them
Prohibition applies only on sales or assignment
Exception: Principal gives consent. during the pendency of litigation involving the
property. [Macariola v Asuncion, 1963]
(2) Guardian
Cannot purchase property of person under his
guardianship Art 1492: The prohibitions in the two preceding
articles (Arts. 1490, 1491) are applicable to sales in
Rationale: Guardianship is a trust of the highest legal redemption, compromises and renunciations.
order, and the trustee cannot be allowed to have
any inducement or neglect his ward’s interest. EFFECTS OF INCAPACITY
[Phil Trust Co v Roldan, 1956] (1) Absolute Incapacity
(a) If both parties are incapacitated:
(3) Executors and Administrators UNENFORCABLE [Art. 1403 (3)]
Cannot acquire or purchase property of estate (b) If only 1 party is incapacitated: VOIDABLE
under their administration (c) If necessaries are sold and delivered to an
incapacitated person: pay a reasonable price
therefor. [Art 1489, CC]
(4) Public Officers and Employees
“Necessaries” – those which are indispensable for
Cannot acquire or purchase property of State/any
sustenance, dwelling, clothing, medical
of its subdivisions, GOCC or administration, the
attendance, education and transportation. [Art
administration of which was entrusted to them.
194, Family Code]
Includes judges and government experts who, in
any manner whatsoever take part in the sale.
PAGE 173
(2) Relative Incapacity (b) Church

Sale between spouses is VOID. (c) Narcotics or dangerous drugs except upon
Rationale: prescription (RA 6425, the dangerous drugs
(1) To protect 3rd persons who may have act of 1972)
contracted with the spouse (2) When right is not intransmissible [Art 1347, CC]
(2) To avoid undue advantage of the dominant
spouse over the weaker spouse. Sale of future inheritance is void. [Art. 1347, CC]—
(3) To avoid circumvention of the prohibition The rights to succession are transmitted from the
against donations between spouses. [Medina v moment of the death of the decedent [Art. 777, CC].
CIR, 1961] Thus, one cannot sell or promise to sell what he
expects to inherit from a living person. [Rivero v.
Such prohibition shall likewise apply to common Serrano, 1950]
law spouses. [Calimlim-Canulas v Fortun, 1984]
BUT if already sold to a third person who relied When the subject matter is illicit, the contract of sale
on the title of his immediate seller, reconveyance is void [Art. 1409 (7)]
to the seller spouse is no longer available [Cruz v
CA, 1997] EXISTING, FUTURE, CONTINGENT
The goods which form the subject of a contract of sale
(3) Specific Incapacity/ Special Disqualifications may either be—
Contracts expressly prohibited by law are void (1) EXISTING goods owned or possessed by the
and cannot be ratified. Neither can the right to seller;
set-up the defense of illegality be waived. [Art. (2) Goods to be manufactured, raised, OR acquired
1409 (7), CC] by the seller – “FUTURE GOODS”;
(3) Goods whose acquisition by the seller depends
Sales entered into by guardians, administrators, upon a CONTINGENCY which may or may not
and agents (specific incapacities) in violation of happen. [Art 1462, CC]
Art. 1491 may be ratified by means of and in the (4) Things having POTENTIAL existence may be the
form of a new contract when the cause of nullity object of a contract of sale. [Art 1461, CC]
has ceased to exist. Ratification is valid only from
date of execution of the new contract and does Sale of MERE hope or Sale of VAIN hope or
not retroact. expectancy expectancy
Valid BUT subject to Void
Those entered into by public officers/employees, condition that the thing
justices and judges, and lawyers in violation of will come into existence Example: Sale of a
Art. 1491 are inexistent and void from the falsified raffle ticket
beginning. [Rubias v Batiller, 1973]. Example: “Next catch” which will never win.
of a fisherman.
Valid BUT subject to Void
condition that the thing
will come into existence Example: Sale of a
Subject Matter Example: “Next catch”
falsified raffle ticket
which will never win.
of a fisherman.
REQUISITES OF A VALID SUBJECT MATTER –
ARTS. 1459-1465
(1) Licit Emptio Rei Speratei Emptio Spei
(2) Existing, Future, Contingent Valid Void
(3) Determinate or determinable Contract is dependent Parties intend the
upon the existence of contract to exist at all
MUST BE LICIT [ART. 1459] the thing events
The thing is licit when— (a) If the thing does not (a) Buyer will have to
(1) Within the commerce of man [Art 1347, CC] come into existence: pay the price even
Example of properties that are not within the contract is if the thing does
commerce of man: considered as not not actually come
(a) Those belonging to the State or its political made and there is no into existence
subdivisions intended for public use or public obligation to pay the
service. (Art 420, CC). price
PAGE 174
Emptio Rei Speratei Emptio Spei (4) Things Subject to Resolutory Condition
Sale of things subject to a resolutory condition
In case of doubt, the presumption is in favor of may be the object of a contract of sale. [Art 1465,
emptio rei speratae since it is more in keeping CC]
with the commutative character of the contract.
Examples:
DETERMINATE OR DETERMINABLE
(a) things acquired under legal or conventional
A thing is DETERMINATE when it is particularly right of redemption; or
designated or physically segregated from all others (b) subject to reserva troncal,
of the same class. [Art 1460, CC]
(5) Quantity of Subject Matter not determinate
A thing is DETERMINABLE when it is capable of
The fact that the quantity is not determinate shall
being made determinate at the time the contract
not be an obstacle to the existence of the
was entered into without the necessity of a new or
contract provided it is possible to determine the
further agreement between the parties. [Art 1460, CC]
same, without the need of a new contract
between the parties. [Art. 1349, CC]
Failure to state the exact location of the land does
not make the subject matter indeterminate, so long
as it can be located. [Camacho v CA, 2007]
The fact that the exact area of the land specified in

the contract of sale is subject to the result of a survey
Obligations of the Seller to
does not render the subject matter indeterminate. Transfer Ownership
[Heirs of Juan San Andres v. Rodriguez, 2000]
PARTICULAR KINDS SALE BY A PERSON NOT THE OWNER AT TIME

(1) Future Goods OF DELIVERY – ARTS. 1462, 1505, 1459
Sale of future goods or those goods which are to General Rule: Ownership is not acquired by the buyer.
be manufactured, raised, or acquired by seller One cannot give what one does not have. NEMO
after the perfection of the sale is valid (Art 1462, DAT QUOD NON HABET [Art 1505, CC]
CC). “Future goods” are those capable of future
existence. Exceptions: (RE-ROM)
(1) Seller has a Right to transfer ownership
(2) Sale of Undivided Interest or Share (a) Seller need not be the owner of the thing at
(a) Sole owner of a thing may sell an undivided the time of perfection of the contract. It is
interest therein. [Art 1463, CC] e.g.: a fraction sufficient that seller has a right to transfer
(½) or percentage (50%), or “my share in the ownership thereof at the time it is delivered.
property.” [Art. 1459]
(b) The sale of an undivided share in a specific (b) One who sells something he does not own yet
mass of fungible goods makes the buyer a co- is bound by the sale when he acquires the
owner of the entire mass in proportion to the thing later [Bucton vs Gabar, 1974]
amount he bought. [Art 1464,CC]
(c) Co-owner cannot sell more than his share (2) Estoppel: Owner is, by his conduct, precluded
[Yturralde v CA, 1972] from denying the seller’s authority to sell. [Art.
1434]
(3) Sale of Things in Litigation
(a) Sale of things under litigation entered into by (3) Registered land bought in good faith
defendant, without the approval of the (a) General rule: Buyer need not go beyond the
litigants or the court is rescissible. [Art 1381 Torrens title
(4)] (b) Exception: When he has actual knowledge of
(b) NO RESCISSION where the thing is legally in facts and circumstances that would impel a
the possession of 3rd persons who did not act reasonably cautious man to make further
in bad faith [Art 1385 (2)] inquiry
(4) Order of courts; Statutory Sale
PAGE 175
(a) In execution sale, the buyer merely steps into When buyer has an intention to pay and the seller
the shoes of the judgment debtor [Rule 39, has an expectation to receive the price
sec. 33, ROC] (a) If simulated: Sale is VOID; BUT act may be
shown to have been a donation or some other
(5) When goods are purchased in Merchant’s store, act or contract. [Art 1471, CC]
Fair, or Market [Art 1505, CC] (b) An admission of non-payment of any centavo
(a) The policy of the law has always been that in exchange of a property in a contract of sale
where the rights and interest of the vendor renders the sale VOID. [Labagala vs. Santiago,
clash with that of an innocent buyer for value, 2001]
the latter must be protected. [Sun Brothers (c) If Price is false – when the real consideration
and Co. vs. Velasco, 1958] is not the price stated in the contract:
i. Sale is void
SALE BY A PERSON HAVING A VOIDABLE TITLE ii. UNLESS proved to be founded on another
– ARTS. 1506, 559 true and lawful price [Art 1353, CC]
(1) True owner may recover the thing when the ff.
requisites concur: HOW PRICE IS DETERMINED
(a) Subject matter is movable (1) Fixed by agreement of the parties
(b) Owner has either lost the thing or has been (a) Fixing of price cannot be left to the discretion
unlawfully deprived. [Art 559, CC] of one of the parties
(b) BUT if such is accepted by the other, sale is
(2) Reimbursement is necessary before owner can perfected. [Art 1473, CC]
recover when: (2) Determination is left to the judgment of a
(a) Buyer acted in good faith specified person
(b) Acquired at a public auction [Art 559, CC] (a) If unable or unwilling: Sale is inefficacious
UNLESS parties subsequently agree about the
(3) Recovery no longer possible when: price.
(a) Buyer in good faith (b) If in bad faith/by mistake: Courts may fix price
(b) Acquired it at a merchant’s store, fair or (c) If 3rd person is prevented from fixing price by
market. [Art 1506, CC] fault of seller or buyer: Innocent party may
avail of remedies.
(3) The price is made in reference to another thing, or
when the price fixed is the price of the commodity
Price on a definite day, or in a particular exchange or
market, OR when the amount fixed is above or
below the price on such day, exchange or market.
MEANING OF PRICE – ARTS. 1469-1474 [Art 1472, CC]
Price signifies the sum stipulated as the equivalent
of the thing sold and also every incident taken into INADEQUACY OF PRICE – ARTS. 1355, 1470
consideration for the fixing of the price put to the General Rule: Does not affect a contract of sale. [Art.
debit of the buyer and agreed to by him [Inchausti v. 1470, CC]
Cromwell, 1911]
The stipulation in a contract of sale which states that
REQUISITES FOR A VALID PRICE the consideration is “P1 and other valuable
(Ce-MoRe) considerations” does not make the contract void.
(1) Certain or ascertainable at the time of perfection Gross inadequacy of price does not affect the
(2) In Money or its equivalent contract of sale except that it may indicate a defect
(a) Example of “equivalent”: Letters of credit in consent. [Bagnas v. C.A., 1989]
(b) If price is partly in money and partly in another
thing: Determine manifest intention of the Exceptions:
parties to see whether it was barter or sale. (1) It may indicate a defect in consent such as fraud,
[Art 1468,CC] mistake, or undue influence
(c) If intention does not clearly appear, it shall be (2) It may indicate that the contract was in reality a
considered a barter if the value of the thing donation or some other act or contract
exceed the amount of money or its equivalent. (3) Inadequacy would make the contract of sale
[Art 1468,CC] rescissible where a contract was entered into by
(3) Real the guardian of a ward or a representative of an
absentee, without the court’s approval, and the
PAGE 176
owner suffers lesion by more than ¼ of the value (a) The contract of sale is perfected at the
of the thing sold. [Art 1381 (1) (2), CC] moment there is meeting of the minds upon
the thing which is the object of the contract
WHEN NO PRICE AGREED – ART. 1474 and upon the price. [Art. 1475, par.1, CC]
(1) Sale is inefficacious [Art. 1474, CC] (b) From that moment, the parties may
(2) But if the thing or part thereof has been delivered reciprocally demand performance, subject to
and appropriated by the buyer, he must pay a the provisions of law governing the form of
reasonable price therefor. contracts. [Art. 1475, par. 2, CC]
(a) What is a reasonable price is a question of fact (c) A private instrument signed by the defendant
dependent on the circumstances of each reciting that he bought from the plaintiff a
particular case. [Art 1474, CC] property at a specific address for a specific
(b) The reasonableness of a price may be price to be paid as soon as a bill of sale is
determined on the basis of a company’s signed is not a mere draft but a perfected
balance sheet showing the book value or fair agreement and hence, obligatory, even if there
market value of its shares. [Philippine Free was no statement as to area or price per
Press vs. CA, 2005] meter. [Goyena v. Tambunting, 1902]
General Rule: Offer may be withdrawn at any time
MANNER OF PAYMENT MUST BE AGREED UPON without even communicating such withdrawal to the
Disagreement on the manner of payment is interested buyer.
tantamount to a failure to agree on the price. [Toyota
Shaw vs. CA, 1995] Exception: When the offerer has allowed the offeree a
certain period to accept, the offer may be withdrawn
EARNEST MONEY VS. OPTION MONEY – ART. at any time before acceptance by communicating
1482 such withdrawal. [Art 1324, CC]
Earnest Money Definition: paid in advance of the
purchase price agreed upon by the parties in a Exception to the exception: Cannot be withdrawn
contract of sale, given by the buyer to the seller, to within a certain period if offer is founded upon a
bind the latter to the bargain. [Asked in 93, 02] consideration. [Art 1324 and 1479, CC]
Option Money vs. Earnest Money [Limson vs. CA, (2) OPTION CONTRACT – ARTS. 1479, 1324
2001] (a) Definition
Option Money Earnest Money i. An accepted unilateral promise to buy or
sell supported by a consideration distinct
Separate and distinct Part of purchase price from the price (Art 1479, CC)
consideration from the [Art 1482, CC] ii. An option contract is a privilege existing in
purchase price one person, for which he had paid a
Given when sale is not Given only when there consideration, which gives him the right to
yet perfected is already a sale buy, for example, certain merchandise or
When given, the would- When given, the buyer certain specified property, if he chooses, at
be-buyer is not required is bound to pay the any time within the agreed period, at a fixed
to buy, but may even balance price. [De la Cavada vs. Diaz, 1918]
forfeit it depending on iii. An option is not of itself a purchase, but
the terms of the option merely secures the privilege to buy.
Grantee of option is still Buyer manifests his iv. A consideration for an optional contract is
undecided whether or earnest desire to buy just as important as the consideration for
not to buy or sell the the property any other kind of contract. If there was no
property [Baviera] consideration for the option, then it cannot
be enforced any more than any other
contract where no consideration exists.
[Baviera]
Formation of Contract of Sale (b) Difference from Sale

Sale Option Contract
PREPARATORY – ART. 1479
Bilateral Unilateral: gives a right
(1) OFFER – ART. 1475
to buy or to sell, but
In General:
imposes no obligation
PAGE 177
st
Sale Option Contract Option Contract Right of 1 Refusal
on the part of the buy or sell only a right to match
option-holder, aside the 1st offer to buy
from the consideration should the grantor
for the offer decide to sell
Sale of property Sale of right to
purchase (4) MUTUAL PROMISE TO BUY AND SELL – ART. 1479
A promise to buy and sell a determinate thing for a
(3) RIGHT OF FIRST REFUSAL price certain is reciprocally demandable. [Art 1479]
As to enforceability The promise made by one party is the consideration

If the right to the first offer is embodied in the for the promise made by the other. [Baviera]
contract, it should be executed according to the
terms stipulated. The right should be enforced PERFECTION – ARTS. 1475, 1319, 1325, 1326
according to the law on contracts and not on the
panoramic and indefinite rule on human relations. WHEN PERFECTED
This juridical relation is not amorphous nor is it (1) Contract of sale is a consensual contract, hence
merely preparatory. [Equatorial Realty Development perfected at the moment of the meeting of the
vs. Mayfair, 1996] minds of the parties as to the object of the
contract and the price. [Art 1475,CC]
When the grantee fails to exercise the right (2) It is the proof of all the essential elements of the
Only after the grantee fails to exercise its right of 1st contract of sale, and not the mere giving of
priority under the same terms and conditions within earnest money, which establishes the existence of
the period agreed upon, could the grantor validly a perfected sale. [Platinum Plans Phils. vs.
offer to sell the property to a 3rd person under the Cucueco, 2006]
same terms as offered to the grantee. [Paranaque
Kings vs. CA, 1997] EFFECT OF PERFECTION
From the moment of the perfection of the contract of
As to the effects of the violation of the right sale, the parties may reciprocally demand
(a) A sale made in violation of a right of first refusal is performance, subject to the provisions of the Statute
valid but rescissible, and may be the subject of an of Frauds. [Art 1475, CC]
action for specific performance. [Rosencor Devt.
Corp. Vs. Inquing, 2001] FORM AND OFFER
(b) However, before the sale to the 3rd person may (a) Offer must be certain as to the object and price
be rescinded, he must have been actually or [Art. 1319, CC]
constructively aware of the right of 1st refusal at
the time he bought it. (b) Business advertisements of things for sale are not
(c) The sanction for the enforcement of the right of offers but mere invitations to make an offer
first refusal against third persons is based on Art. Exception: If otherwise provided [Art. 1325, CC]
19 of NCC, as no real right was created on the
property. (c) Advertisements for bidders are simply invitations
to make proposals (Asked in 80)
Difference from Sale Advertiser is not bound to accept the highest or
Sale
st
Right of 1 Refusal lowest bid.
Exception: Unless the contrary appears [Art. 1326,
Bilateral Unilateral CC]
Price and other terms of Price and other terms
payment are certain are yet to be agreed FORMALITIES OF THE CONTRACT – ART. 1403
upon (D) (E)
The thing to be sold must be determinate General rule: No form required as to validity since sale
is perfected by consent of the parties.
Distinction from Option Contract
st
Option Contract Right of 1 Refusal The sale may be [Art.1483, CC]:
Separate consideration No need for a separate (1) Written
is necessary consideration (2) Oral
(3) Partly written and partly oral
Grantee has the right to No right to buy or sell,
PAGE 178
(4) Inferred from the conduct of the parties Where to Deliver

(1) A hierarchy is followed (STOR):
Exceptions: (a) Stipulation
(1) Statute of Frauds [Art,1403 (2),CC] (b) Usage of trade
(a) Contract or some memorandum thereof must (c) Seller’s place of business (office)
be in writing and subscribed by the party or his (d) Seller’s residence
agent, otherwise contract is unenforceable;
unless ratified by failure to object to oral (2) In case of specific goods, which the parties knew
evidence or acceptance of benefits under the to be at some other place when the contract was
contract perfected, that place is the place of delivery
(b) Statute of Frauds covers: (3) If goods are at the time of sale possessed by a
i. Sale of goods, chattels, or things in action at third person, then there is no delivery until he
a price not less than P500 acknowledges to the buyer that he holds the
ii. Sale not to be performed within 1 year goods for the buyer.
iii. Sale of real property or an interest therein
[Art 1358, CC] When to Deliver
(c) Applies only to executory contracts, not to Absent a stipulation as to time, delivery must be
contracts either totally or partially performed. made within a reasonable time; demand or tender of
[Iñigo v. Estate of Maloto, 1967] delivery shall be made at a reasonable hour.
(2) Sale of realty by an agent WHEN DELIVERY DOES NOT TRANSFER TITLE
Agent’s authority must be in writing, otherwise the (1) SALE ON APPROVAL, TRIAL, OR SATISFACTION
sale is void [Art.1874, CC] General Rule: Title remains with the seller
(3) Sale of large cattle Exceptions:

To be valid, transfer of large cattle must be (a) Buyer signifies his approval or acceptance to
registered with the municipal treasurer [Sec. 529, the seller or does any other act adopting the
Revised Administrative Code] transaction
(b) Retains the goods without giving notice of
rejection after the time fixed has expired; if no
time has been fixed, after the expiration of a
Transfer of Ownership reasonable time [Art 1502, CC]
Difference between Sale on Approval and Sale on

MANNER OF TRANSFER – ARTS. 1477, 1496-1501 Return
Obligation to transfer ownership and to deliver is
Sale on Approval Sale on Return
implied in every contract of sale [Arts. 1458-1459]
Ownership does not Ownership passes
Transfer of ownership requires delivery [Art. 1495] pass upon delivery upon delivery, but
buyer may revest
GENERAL CONCEPTS ownership in the seller
by returning or
Delivery comprises 2 obligations in Art. 1495: tendering the goods
(1) Actual duty to deliver within the time fixed in
(2) Transfer of ownership – can only be the contract
accomplished via delivery Depends on the Depends on the will of
character or quality of the buyer
What to Deliver goods
(1) Thing sold [Art. 1495] Subject to a suspensive Subject to a resolutory
(2) Fruits [Art. 1164 & 1537] condition condition
(3) Accessions and accessories [Art. 1166 & 1537] Risk of loss remains Risk of loss remains
(a) Improvements by seller at his expense grants with the seller with the buyer
him a usufructuary right.
(b) No indemnification Express Reservation
(c) But he may remove it to the extent that there If it was stipulated that ownership in the thing shall
is no damage [Art. 1538] not pass to the purchaser until he has fully paid the
price [Art 1478, CC]
PAGE 179
the latter must be protected. [Sun Brothers

and Co. vs. Velasco, 1958]
Implied Reservation (4) SALE BY PERSON HAVING A VOIDABLE TITLE
The following are instances when there is an implied (a) True owner may recover the thing when the ff.
reservation of ownership: requisites concur:
(a) Goods are shipped, but by the bill of lading i. Subject matter is movable
goods are deliverable to the seller or his ii. Owner has either lost the thing or has been
agent, or to the order of the seller or his agent unlawfully deprived. [Art 559, CC]
(b) Bill of lading is retained by the seller or his (b) Reimbursement is necessary before owner can
agent. recover when:
(c) When the seller of the goods draws on the i. Buyer acted in good faith
buyer for the price and transmits the bill of ii. Acquired at a public auction [Art 559, CC]
exchange and bill of lading to the buyer, and (c) Recovery no longer possible when:
the latter does not honor the bill of exchange i. Buyer in good faith
by returning the bill of lading to the seller. ii. Acquired it at a merchant’s store, fair or
market. [Art 1506, CC]
(2) WHEN SALE NOT VALID
eg. When the thing sold is a public property KINDS OF DELIVERY
(1) ACTUAL DELIVERY
(3) WHEN SELLER IS NOT THE OWNER (a) When deemed made: when the thing sold is
General Rule: Ownership is not acquired by the placed in the control and possession of the
buyer. One cannot give what one does not have. vendee [Art. 1497]
[Art 1505, CC] (b) Not always essential to passing of title [Art.
1475]
Exceptions: (RE-ROM) (c) Parties may agree when and on what
(a) Seller has a Right to transfer ownership conditions the ownership shall pass to the
i. Seller need not be the owner of the thing at buyer [E.g.: Art 1478 where ownership will only
the time of perfection of the contract. It is pass after full payment of the price]
sufficient that seller has a right to transfer
ownership thereof at the time it is delivered. (2) CONSTRUCTIVE DELIVERY
[Art. 1459] (a) Execution of public instrument [Art 1498, par.
ii. One who sells something he does not own 1]
yet is bound by the sale when he acquires General rule: produces the same legal effects of
the thing later [Bucton vs Gabar, 1974] actual delivery.
(b) Estoppel: Owner is, by his conduct, precluded Exceptions:

from denying the seller’s authority to sell. [Art. i. The intention of the parties is otherwise.
1434] ii. At the time of execution, the subject
matter was not subject to the control of
(c) Registered land bought in good faith the seller which must subsist for a
i. General rule: Buyer need not go beyond the reasonable length of time after execution.
Torrens title [Pasagui v Villablanca, 1975]
iii. Exception: When he has actual knowledge “Control” over thing sold must be such that seller is
of facts and circumstances that would impel capable of physically transferring it to buyer
a reasonably cautious man to make further
inquiry (b) Symbolic Delivery
i. Delivery of keys of the place or depositary
(d) Order of courts; Statutory Sale where the movable is stored or kept. [Art
In execution sale, the buyer merely steps into 1498, CC]
the shoes of the judgment debtor [Rule 39, ii. Unless otherwise agreed, when symbolic
sec. 33, ROC] delivery has been made, the seller is not
obliged to remove tenants to place the
(e) When goods are purchased in Merchant’s buyer in actual possession of the property
store, Fair, or Market [Art 1505, CC] as he has already complied with his
The policy of the law has always been that obligation to transfer ownership of and
where the rights and interest of the vendor deliver the thing sold. [Power Commercial
clash with that of an innocent buyer for value,
PAGE 180
and Industrial Corp. v. CA, 1997; Sabio v. The (3) 2 or more buyers with conflicting interests at
International Corporate Bank, Inc., 2001] odds over the rightful ownership of the thing sold;
(4) Same seller
(c) Tradition Longa Manu (Long Hand)
i. Delivery of thing by mere agreement. RULES GOVERNING SALE OF MOVABLES, IMMOVABLES AND
ii. Example: Seller points to the property UNREGISTERED LANDS
without actually transferring physical
possession thereof. (1) Sale of Movables
iii. When an employer assigned all its rights Ownership shall be transferred to the person who
and title to all surplus property salvaged by may have first taken possession in good faith.
the contractor, tradition longa manu takes
place. Delivery is upon the moment a thing (2) Immovables
is salvaged. [Board of Liquidators v. Floro, (a) Ownership belongs to the person who:
1960] i. In good faith first recorded it in the Registry
of Property; OR
(d) Tradition Brevi Manu (Short Hand) ii. If there is no inscription, ownership passes
MOVABLE is delivered when the buyer had the to the person who in good faith was first in
thing already in his possession before the sale possession; OR
took place, not as owner but as lessee, iii.In the absence thereof, to the person who
borrower, or depositary. presents the oldest title, PROVIDED there is
good faith.
(e) Tradition Constitutum Possessorium
Seller continues to be in possession of the “Oldest Title” – any public document showing
property sold, by virtue of a lease contract acquisition of the land in good faith. To
agreement with the vendee. constitute “title,” the transmission of
ownership must appear in a public document
(f) Delivery to a Common Carrier [Art. 1358 (1)]
General Rule: Delivery to the courier or carrier
is tantamount to delivery to buyer. Examples: Deed of Sale, Deed of Donation,
Exceptions Deed of Trust
i. Seller reserved title by the form of the bill of
lading, with intent to remain the owner, not (b) Registration includes any entry made in the
merely for the purpose of securing payment, Primary Entry Book of the registry, including
OR both registration in its ordinary and strict
ii. Contrary intention appears in the contract sense and cancellation, annotation, and even
(i.e. seller is required to deliver goods to marginal notes. [Cheng v. Genato, 1998]
buyer at the point of destination) i. Pencilled entries on the title are not
iii. F.O.B. (Free on Board or Freight on Board): considered registration [AFPMBAI v. Court of
When seller bears the expenses of Appeals, 1999].
transportation up to the F.O.B. point.
iv. C.I.F. (Cost, Insurance, Freight): Price quoted (3) Sale by Virtue of Execution and Attachment
includes the costs of the goods, insurance, Art. 1544 does NOT apply to the sale of
and freight charges on the goods up to the unregistered land at an execution sale because a
point of destination. buyer of unregistered land at an execution sale
v. F.A.S. (Free Alongside): Seller bears the only steps into the shoes of the judgment debtor,
expenses of transportation until he delivers and merely acquires the latter's interest in the
the goods alongside a vessel at a named property sold as of the time the property was
port. levied upon. [Carumba v. CA, 1970]
DOUBLE SALES – ART. 1544 (4) Sale of Unregistered Land

General Rule: Prior tempore, potior jure (“he who is (a) Instrument or deeds establishing,
first in time is preferred in right”) applies. transmitting, acknowledging, modifying or
extinguishing rights with respect to lands not
Requisites [Cheng v Genato, 1998]: registered under the Land Registration Act or
(1) 2 or more valid sales; the Spanish Mortgage Law, are required to be
(2) Same subject matter; registered in the Registry of Property to
prejudice 3rd persons, although such
PAGE 181
registration is understood to be “w/o Annotation of Adverse

Lis Pendens
prejudice to a 3rd party with a better right”. Claim
[PD 1528 Sec 113] causes which may not adjudged invalid or
(b) Art. 1544 applies to unregistered land subject to be attributable to the unmeritorious by the
a conventional sale (because of Art. 1358) but claimant Court
NOT to unregistered land subject to judicial Both are intended to protect the interest of a
sale. claimant by notifying and cautioning other
persons that said property is subject to a claim.
PROPERTY REGISTRATION DECREE
(1) REQUISITES FOR REGISTRATION OF DEED OF SALE IN The two are not contradictory or repugnant to one
GOOD FAITH another; nor does the existence of one automatically
nullify the other, and if any of the registrations
Purchaser in good faith should be considered unnecessary or superfluous, it
(a) General Characteristics would be the notice of lis pendens [A. Doronila
i. One who buys the property of another, Resources Development Inc v CA, 1988]
without notice that some other person has a
right to or interest in such property, and (2) ACCOMPANIED BY VENDORS DUPLICATE CERTIFICATE
who pays a full and fair price for the sale, at OF TITLE, PAYMENT OF CAPITAL GAINS TAX, AND
the time of the purchase or before he has DOCUMENTARY TAX REGISTRATION FEES
notice of the claim/interest of some other Must be accompanied by:
person in the property. [Agricultural and (a) Vendor’s duplicate certificate of title
Home Extension Development Group v CA, (b) Payment of capital gains tax – 6% of the
1992] selling price or zonal value, whichever is
higher
(b) Presumption (c) Documentary tax registration fees – 1.5% of the
General Rule: As a rule, he who asserts the selling price or zonal value, whichever is
status of a purchaser in good faith and for higher
value has the burden of proving such
assertion. This onus probandi cannot be
discharged by mere invocation of the legal
presumption of good faith, i.e., that everyone
is presumed to act in good faith [Mathay v CA, Risk of Loss
1998]
GENERAL RULE – ARTS. 1263, 1189
When buyer is presumed to be in bad faith: Res perit domino: Owner bears risk of loss
i. Annotation of adverse claim: Places any BASIS: Ownership is not transferred until delivery.
subsequent buyer of the registered land in
bad faith. [Balatbat v CA, 1996] WHEN LOSS OCCURRED BEFORE PERFECTION
ii. Annotation of Lis Pendens: Buyer cannot be Such loss is borne by seller
considered an innocent purchaser for value
where it ignored the lis pendens on the title. WHEN LOSS OCCURRED AT TIME OF
iii.A purchaser of a parcel of land cannot close PERFECTION – ARTS. 1493 AND 1494
his eyes to facts which should put a Loss must have occurred before the contract was
reasonable man upon his guard, such as entered into, without the knowledge of both parties
when the property subject of the purchase is
in the possession of persons other than the Partial Loss (Or loss
seller. A buyer who could not have failed to which results in
know or discover that the land sold to him Total Loss
substantial change in
was in the adverse possession of another is character)
a buyer in bad faith. (Heirs of Ramon Contract is ineffective. Buyer may withdraw
Durano v Uy, 2010) from the contract
 Because there can OR
Annotation of Adverse be no contract without Buy the remainder at a
Lis Pendens
Claim an object proportionate price
May be cancelled even May be cancelled only
before the action is in one instance, i.e., WHEN LOSS OCCURRED AFTER PERFECTION
finally terminated for after the claim is BUT BEFORE DELIVERY
PAGE 182
Seller bears risk of loss Goods are deliverable By delivery of the

Buyer does not bear risk of loss until goods are to bearer document to another
delivered to him
Endorsed in blank by
WHEN OWNERSHIP IS TRANSFERRED – ART. the person to whose
1504 order the goods were
WHEN OWNERSHIP IS TRANSFERRED TO THE BUYER, THE supposed to be
GOODS ARE AT THE BUYER’S RISK delivered
(1) Where delivery of the goods has been made to Goods are deliverable By indorsement of
the buyer or to a bailee for the buyer, in to the order of a such person [Art. 1509,
pursuance of the contract and the ownership in specified person CC]
the goods has been retained by the seller merely
to secure performance by the buyer of his WHO MAY NEGOTIATE IT? [ART.1512, CC]
obligations under the contract, the goods are at (1) Owner
the buyer’s risk from the time of such delivery (2) Person to whom the possession or custody of the
(2) Where actual delivery has been delayed through document has been entrusted by the owner
the fault of either the buyer or seller the goods (a) If bailee undertakes to deliver the goods to
are at the risk of the party in fault. [Art 1504, CC] such person
(b) If document is in such form that it may be
negotiated by delivery
Documents of Title A PERSON TO WHOM A DOCUMENT HAS BEEN NEGOTIATED

ACQUIRES—
(1) Rights of the vendor
DEFINITION – ART. 1636 (2) Rights of the original consignee
A document used in the ordinary course of business
in the sale or transfer of goods, as proof of the NON-NEGOTIABLE DOCUMENTS OF TITLE
possession or control of the goods, or authorizing or Goods described in a non-negotiable document of
purporting to authorize the possessor of the title are deliverable only to a specified person.
document to transfer or receive, either by
endorsement or by delivery, goods represented by Carrier will not deliver the goods to any holder of the
such document. [Art. 1636] document or to whom such document may have
been endorsed by the consignee.
Examples: bill of lading, quedan, warehouse receipts,
trust receipts Must present the deed of sale or donation in his
favor.
PURPOSE OF DOCUMENTS OF TITLE
(1) As evidence of possession or control of goods
“Negotiation” [negotiable document of title] VS.
described therein
“Transfer” [non-negotiable document of title]:
(2) As a medium of transferring title and possession
over the goods described therein without having Negotiation (Art. 1508) Transfer
to effect actual delivery thereof [Villanueva] Delivery of a negotiable The assignment of
(3) The custody of a negotiable warehouse receipts document of title to rights of the consignee
issued to the order of the owner, or to bearer, is a another if by the terms of a non-negotiable
representation of title upon which bona fide thereof, the goods are document of title to
purchasers for value are entitled to rely, despite deliverable to bearer, or another; or
breaches of trust or violations of agreement on when the document
the part of the apparent owner. [Siy Cong Bieng was endorsed in blank Document of title was
vs. HSBC, 56 Phil 598] by the person to whose ordered sold or
order the goods are assigned, without
NEGOTIABLE DOCUMENTS OF TITLE deliverable. indorsement.
Definition: A document of title which states that the
goods referred to therein will be delivered to the In a negotiable Transferee does not
bearer, or to the order of any person named in such document of title, the acquire a better title
document [Art. 1508, CC] buyer may acquire a than his transferor
better title than his
Terms of the Document How negotiated transferor.
PAGE 183
WARRANTIES OF SELLER OF DOCUMENTS OF Remedies of an Unpaid Seller

TITLE – ART. 1516
DEFINITION OF UNPAID SELLER – ART. 1525
A PERSON WHO NEGOTIATES A DOCUMENT OF TITLE A seller is considered to be an unpaid seller if the
WARRANTS— whole price has not been paid or tendered, or when
(1) Genuineness of document check received as a conditional payment was
(2) Legal right to negotiate or transfer dishonored by non-payment or insolvency of the
(3) No knowledge of fact which would impair the buyer [Baviera]
validity or worth of the document
(4) Right to transfer the title to the goods and Term also includes:
merchantability or fitness for a particular (1) The agent of the seller to whom the bill of lading
purpose, whenever such warranties would have was endorsed,
been implied (2) The consignor or agent who had paid the price or
is responsible for the price
HE DOES NOT WARRANT THAT— (3) Any other person who is in the position of a seller
(1) Common carrier will fulfill its obligation to deliver (i.e. buyer who paid the price and had a right to
the goods return the goods). [Baviera]
(2) Previous indorsers will fulfill their obligation [Art.
1516-1517, CC] REMEDIES OF UNPAID SELLER
JUDICIAL REMEDIES OF AN UNPAID SELLER
GOODS IN THE HANDS OF THE CARRIER COVERED BY A (1) Action for the price or specific performance [Art.
NEGOTIABLE DOCUMENT CANNOT BE ATTACHED OR LEVIED 1595]—
UPON, UNLESS— Conditions:
(1) Document is first surrendered to the carrier; or (a) The goods has passed to the buyer
(2) Impounded by the court; or (b) Price is payable on a certain day, irrespective
(3) Its negotiation is enjoined. [Art. 1519-1520,CC] of delivery of the goods
(c) Buyer can set up the defense that seller could
RULES ON LEVY/GARNISHMENT OF GOODS – not or did not intend to deliver the goods
ARTS. 1514, 1519, 1520 (d) Seller was notified by the buyer of his
Goods in the hands of the carrier covered by a repudiation of the contract after the seller has
negotiable document cannot be attached or levied completed the manufacture of the goods or
upon, UNLESS— had procured the goods to be delivered and
(1) Document is first surrendered to the carrier; or the goods could not readily be resold for a
(2) Impounded by the court; or reasonable price
(3) Its negotiation is enjoined. [Art. 1519-1520,CC]
(2) Action for damages for non-acceptance, if buyer
The levy of an attachment of execution upon the wrongfully neglects or refuses to accept and pay
goods by a creditor of the transferor may defeat the for the goods (Art. 1596)
title of the transferee and the right to acquire the
obligation of such bailee when: Measure of damages: Estimated loss directly and
(1) It was done prior to the notification to such bailee naturally resulting in the ordinary course of
by the transferor of a non-negotiable document events from the buyer’s breach
of title or (a) Where there is available market for goods:
(2) By a notification to such bailee by the transferor Difference between the contract price and the
or a subsequent purchaser from the transferor of market price at the time the goods ought to
a subsequent sale of the goods by the transferor. have been accepted or if no time was fixed, at
[Art 1514 (3rd par)] the time of refusal to accept
(b) If the resale was made with diligence: resale
price is evidence of market value, taking into
A creditor whose debtor is the owner of a negotiable
account whether or not the goods could be
document of title shall be entitled to such aid from
readily sold
courts in regard to property which cannot be readily
(c) Where labor/expense was necessary for seller to
attached or levied by ordinary legal process [Art
fulfill his obligation: Labor performed and
1520]
expenses made by seller before receiving
notice of buyer’s repudiation or countermand
PAGE 184
(d) Profit that the seller would have made if sale a foreclosure sale resulting in a deficiency. The
had been fully performed payment of the sum of P1,250 of Sapinoso was
a voluntary act on his part and did not result
(3) Rescission by giving the buyer notice of the from a “further action” instituted by Northern
election to rescind [Art. 1597] Motors. [Motors vs. Sapinoso, 1970]
iii.The purpose of the law is to remedy the abuses
Under this rule, rescission would bar an action on committed in foreclosure of chattel
the contract because it means cancellation of the mortgages. It prevents mortgagees from
contractual obligations between the parties. seizing the mortgaged property, buying it at
[Baviera] foreclosure sale for a low price and then
bringing the suit against the mortgagor for a
(4) Special rule for sale of movables by installments – deficiency judgment. The almost invariable
Recto Law [Arts. 1484, 1485] result of this procedure was that the mortgagor
found himself minus the property and still
Applies in cases of: owing practically the full amount of his original
(a) Sale of movables in installment indebtedness. [Bachrach Motor Co., Inc. v.
i. The rule is intended to apply to sales of Millan, 1935]
movables, the price of which is payable in iv.Remedies are ALTERNATIVE, not cumulative,
two or more installments, but not to i.e. exercise of one bars exercise of the others.
straight-term sales where the price is [Nonato vs. IAC, 1985]
payable in full, after making a down
payment because the law aims to protect
improvident buyers who may be tempted to
buy beyond their means. [Levy Hermanos vs.
Gervacio, 1939] Performance of Contract
(b) Lease of personal property with option to buy
i. When lessor has deprived the lessee of the DELIVERY OF THING SOLD
possession or enjoyment of the thing (Ex.: (1) SALE OF MOVABLES – ARTS. 1522, 1537, 1480
When lessor files a complaint for replevin (a) When Quantity less than expected
against lessee) i. Buyer may reject all
ii. Also applies when seller assigns his credit ii. Buyer accepts with knowledge of seller’s
to someone else inability to deliver the rest – buyer pays at
contract price
ALTERNATIVE REMEDIES OF THE UNPAID SELLER UNDER iii.Buyer has used or disposed prior to knowing
RECTO LAW seller’s inability to deliver the rest – buyer
(a) Specific Performance pays fair value
(b) Cancellation of sale: If vendee fails to pay 2 or (b) Quantity more than expected
more installments i. If divisible, buyer may reject excess
i. When the seller cancels the sale by ii. If indivisible, buyer may reject all
repossessing the property sold, he is barred (c) Quality different or different goods
from exacting payment for its price. i. If divisible, buyer may accept the goods
(c) Foreclosure of Chattel Mortgage: If vendee fails compliant with contract and reject those
to pay 2 or more installments that are not
i. If seller chooses this remedy, he shall have no ii. If indivisible, buyer may reject all [Art. 1522]
further action to recover any unpaid balance, (d) Sale of specific mass of goods
and any stipulation to the contrary shall be void i. In the sale of fungibles where the measure
ii. What Art 1484 (3) prohibits is “further action or weight has not been agreed upon nor is
against the purchaser to recover any unpaid there a fixed rate based upon a
balance of the price;” and although this Court measurement, the subject matter of the
has construed the word “action” to mean “any sale is a determinate object – the specific
judicial or extrajudicial proceeding by virtue of mass; seller is merely required to deliver
which the vendor may lawfully be enabled to such mass even if actual quantity falls short
exact recovery of the supposed unsatisfied of parties’ estimate [Art. 1480]
balance of the purchase price from the (e) Delivery by installments
purchaser or his privy,” there is no occasion at i. By default, buyer is not bound to accept
this stage to apply the restrictive provision of delivery of goods by installments
the said article because there has not yet been
PAGE 185
ii. In a contract of delivery by installment to be (a) Express: buyer intimates acceptance

paid by installment as well, delay or breach (b) Implied:
may not necessarily mean breach of the i. Goods are delivered to the buyer and he
entire contract; depending on the does any act in relation to the goods
circumstances, breach may be severable and delivered that is inconsistent with the
the aggrieved party is entitled to damages ownership of the seller.
and not rescission. [Art. 1583] ii. After the lapse of a reasonable time, the
buyer retains the goods without
(2) SALE OF IMMOVABLES – ARTS. 1539, 1543 intimating to the seller that he has
(a) Sale at a fixed rate per unit of measure rejected them. [Art.1585]
i. Seller bound to deliver entire land
ii. If the area is less than that stated, buyer (2) Effect of Refusal to accept
may rescind or demand a proportionate (a) If buyer refuses to accept goods, having
reduction in price the right to do so, he is not bound to return
iii.If a part of the land is not of the quality them to the seller, it being sufficient that
stated in the contract, buyer may rescind or he notifies the seller of his refusal to
demand a proportionate reduction in price accept
iv.Buyer may only avail of rescission if the area i. If he voluntarily constitutes himself a
deficiency is 10% or more of total area or if depositary of the goods, he shall be
the inferior value of the part of the land liable as such. [Art.1587]
exceeds 10% of the price agreed upon. [Art. ii. Unjust refusal to accept still results to
1539] transfer of ownership. In such case, title
v. If the area turns out to be greater than that to the goods passes to the buyer from
stated, buyer may accept area included and the moment they are placed at his
reject the excess or accept all and pay a disposal, except if ownership has been
proportionate increase in price [Art. 1540] reserved by the seller [Art.1588]
(b) Sale for a lump sum
i. Follows the same rule as the sale of a PAYMENT OF PRICE
specific mass which is explained above PAY THE PRICE OF THE THING SOLD (ART. 1582)—
ii. There is no change in price even if area or
number turns out to be greater or lesser Payment of interest:
than that stated [Art. 1542] Buyer is liable for interest when: (SFD)
iii.Exception: when the excess or deficiency is (1) Interest is stipulated;
no longer reasonable [Asian v Jalandoni, (2) Thing sold produces fruits or income;
1923: 644 m2 was unreasonable] (3) Buyer is in default - interest accrues from the
iv.Exception to the exception: when buyer time of judicial or extrajudicial demand for
expressly assumes risk on actual area of the payment
land. [Garcia v Veloso, 1941]
v. If the price per unit or measure is not Suspension of payments:
provided for in the contract, then the rules Buyer may suspend payment when:
of lump sum sale should prevail. [Sta. Ana v (1) His ownership or possession of the thing is
Hernandez, 1966] disturbed; OR
(2) He has reasonable grounds to fear such
(3) INSPECTIONS AND ACCEPTANCE disturbance by a vindicatory action or a
Inspections foreclosure of mortgage
Right of Inspection: The buyer has reasonable
opportunity to examine the goods upon delivery. Exceptions: buyer cannot suspend payment
If there is a stipulation that delivery is when:
preconditioned on payment, then buyer has no (1) Seller gives security for the return of the price in a
right of inspection until he has paid. [Art.1584] proper case
(2) It has been stipulated that, notwithstanding any
Exception: in case such right of inspection is such contingency, the buyer shall be bound to
permitted by agreement or usage of trade. pay [Art. 1590]
(a) Suspension may continue until the seller has
Acceptance caused the disturbance or danger to cease
Accept Delivery—
(1) Form
PAGE 186
(b) However, a mere act of trespass shall not Condition Warranty

authorize the suspension of the payment.
[Art.1590] thing or some other seller’s obligations as
circumstance to the subject matter
Sale of real property
(1) In the sale of immovable property, buyer may pay If seller has promised that the condition should
even beyond the expiration of the period agreed happen or be performed, the buyer may treat the
upon, as long as no demand for rescission of the nonperformance of the condition as a breach of
contract has been made upon him either warranty. [Art.1545]
judicially or by a notarial act, despite a stipulation
providing for ipso jure rescission [Art.1592] EXPRESS WARRANTIES
(2) After demand, court may not grant him a new For there to be express warranty, the following
term [Heirs of Escanlar, et.al. v. CA, 1997] requisites must concur: (APIR)
(3) R.A. 6552 (Maceda Law) applies to sale or (1) An affirmation of fact or any promise relating to
financing of real estate on installment [Rillo v. the thing sold;
Court of Appeals,1997] (2) The natural tendency of such affirmation or
(a) Buyer is awarded a grace period of 1 month promise is to induce the buyer to buy;
per year of installments paid or 60 days, (3) The buyer buys the thing relying thereon. [Art.
whichever is higher, within which he may pay 1546]
without additional interest (4) Made before the sale not upon delivery or any
i. May be used once every 5 years of the life of other point
the contract or any of its extensions
(b) If contract is to be cancelled, seller must first: An express warranty can be made by and also be
i. Give a 30-day notice of cancellation, and binding on the seller even in the sale of a second
ii. Refund cash surrender value to buyer; hand article. [Moles v. IAC, 1989]
iii. CSV is equivalent to 50% of total payments
made including deposits, options and Dealer’s or Trader’s
Express Warranty
down-payments plus 5% for every year in Talk
excess of 5 years of the life of the contract What is specifically (a) Affirmation of the
or any of its extensions. represented as true in value of the thing
said document cannot or statement of the
be considered as mere seller’s opinion only
dealer's talk. [Moles v. is not a warranty
IAC, 1989] unless:
Warranties i. The seller made
it as an expert;
Definition: A statement or representation made by ii. It was relied
the seller contemporaneously and as part of the upon by the
contract of sale, having reference to the character, buyer. [Art.1546]
quality, or title of the goods, and by which he (b) Ordinarily, what
promises or undertakes to ensure that certain facts does not appear
are or shall be as he then represents. on the face of the
written instrument
CONDITION V. WARRANTY [Moles v. IAC, 1989]
Condition Warranty EXPRESS WARRANTY DISTINGUISHED FROM FALSE
Pertains to and affects Goes into the REPRESENTATION
the existence of the performance of an Express Warranty False Representation
obligation obligation and may, in
itself, be an obligation Concealment of facts When concealment of
Non-happening does Non-fulfillment does not necessarily facts comes with an
not amount to breach constitutes breach of amount to false active misstatement of
of contract contract representation fact or a partial
Must be stipulated Stipulation or statement of fact such
operation of law that withholding of
that unsaid portion
May attach either to the Always relates to the
makes that which is
seller’s duty to deliver subject matter or the
stated absolutely false
PAGE 187
Express Warranty False Representation (c) Final judgment based on a right prior to the
sale or an act imputable to the vendor
(d) Seller is summoned and made co-defendant in
However, buyer who the suit for eviction at the instance of the
fails to inspect buyer. [Power Commercial and Industrial Corp.
condition of property v. CA, 1997]
despite ample
opportunity to do so IMPLIED WARRANTY AGAINST ENCUMBRANCE/NON-
when there is no APPARENT SERVITUDES
opposition on the part Requisites for breach:
of seller to inspect (1) Thing sold is an immovable
cannot later on allege (2) Burden or servitude encumbering the thing sold
false representation. is:
[Phil Mftg Co. v Go (a) Non-apparent to the naked eye
Jucco, 1926] (b) Not mentioned in the agreement
(c) Of such nature that it must be presumed that
Reason: buyer’s duty the buyer would not have bought it had he
to inspect remains been aware of it
despite false (d) Not recorded in the Registry of Property unless
representation by the there is an express warranty that the thing is
seller; he has the duty free from all burdens and encumbrances
to exercise due [Art.1560]
diligence.
IMPLIED WARRANTY AGAINST HIDDEN DEFECTS
IMPLIED WARRANTIES – ART. 1547
Requisites for breach:
(1) The defect renders the thing sold unfit for the use
(TODS)
for which it was intended OR diminishes its
(1) Implied Warranty of Title
fitness for such use to such an extent that had the
(2) Implied Warranty against Encumbrance/Non-
buyer been aware thereof, he would not have
Apparent Servitudes
bought it or would have paid a lower price;
(3) Implied Warranty against Hidden Defects [Art.
(2) The defect is not patent or visible;
1547]
(3) The buyer is not an expert who, by reason of his
(a) Implied warranty as to Merchantable Quality
trade or profession, should have known the defect
and Fitness of Goods
(4) The seller is aware of the hidden fault or defect,
(b) Implied warranty against Redhibitory Defect
OR even if he is not aware thereof, if there is no
in the Sale of Animals [Art. 1572]
stipulation to the contrary [Arts.1561 &1566]
(c) Quality and Fitness of Goods in Sale by
Sample or Description
IMPLIED WARRANTY AS TO MERCHANTABLE QUALITY AND
(4) Other Warranties
FITNESS OF GOODS
IMPLIED WARRANTY OF TITLE
Merchantable Quality:
(1) Implied warranty arises by operation of law and (1) Where the goods are brought by description from
need not be stipulated in the contract of sale. a seller who deals in goods of that description
(2) Warranty of Seller’s Right to Sell: Seller warrants [Art.1562]
his right to sell at the time the ownership is to (2) In a sale by sample, if the seller is a dealer in
pass. goods of that kind and the defect is not apparent
(a) Inapplicable to a sheriff, auctioneer, mortgagee, on reasonable examination of the sample
pledgee, or other person professing to sell by [Art.1566]
virtue of authority in fact or law. [Art. 1547]
(3) Warranty against Eviction: seller warrants that Fitness for a particular purpose:
buyer, from the time ownership passes, shall have (1) Where the buyer expressly or impliedly makes
and enjoy legal and peaceful possession of the known to the seller the particular purpose for
thing. Its requisites are: which the goods are acquired AND it appears
(a) Buyer is deprived of the whole or a part of the that the buyer relied on the seller’s skill or
thing sold; judgment [Art.1562(1)]
(b) Eviction is by final judgment
PAGE 188
IMPLIED WARRANTY AGAINST REDHIBITORY DEFECT IN THE (following the general rule on rescission of
SALE OF ANIMALS (ART. 1572) contracts)
(2) Remedies:
Redhibitory defect- a hidden defect of animals of (a) Accept goods + demand diminution/
such nature that expert knowledge is not sufficient to extinction of price
discover it, even in a case where a professional (b) Accept goods + damages
inspection has been made (c) Refuse to accept goods + damages
(d) Rescind (Refuse to accept or return or offer to
No warranty in case of [Art. 1574]: return) + recover price paid
(a) Animals sold at fairs or public auctions (3) Rescission not available when buyer:
(b) Livestock sold as condemned (a) Knew of breach of warranty when he accepted
the goods without protest
The following sales are void [Art. 1575]: (b) Fails to notify the seller about election to
(a) Sale of animals suffering from contagious rescind within a reasonable period of time
diseases (c) Fails to return or offer to return the goods to
(b) Sale of animals unfit for the purpose for which the seller in substantially a good condition as
they are acquired as stated in the contract they were when delivered, unless deterioration
was due to breach of warranty
Veterinarian liable if he fails to discover or disclose (4) Measure of damages: Difference between value
the hidden defect through ignorance or bad faith [Art of goods at the time of delivery and the value they
1576] would have had if they had answered to the
warranty
Seller liable if animal dies within 3 days after its (5) Effects of rescission:
purchase due to a disease that existed at the time of (a) Buyer no longer liable for price
sale. [Art 1578] i. Entitled to the return of any part of price
paid, concurrently with or immediately after
EFFECTS OF WARRANTIES an offer to return the goods
(1) Natural tendency is to induce buyer to purchase (b) If seller refuses to accept offer to return
the subject matter goods: buyer deemed as bailee for seller and
(2) Buyer purchases subject matter relying thereon has right of lien to secure payment of part of
(3) Seller liable for damages in case of breach price paid
EFFECTS OF WAIVERS IMPLIED WARRANTY AGAINST EVICTION [ARTS. 1555,

Only applicable to waiver of warranty against 1556]
eviction; parties may increase or decrease warranty Total Eviction Partial Eviction
against eviction but the effect depends on good/bad
Enforce liability for Enforce liability
faith of the seller:
eviction (demand VICED)
(1) Seller in bad faith and there is warranty against
OR
eviction – null and void
Demand from seller: Rescind
(2) Buyer without knowledge of a particular risk and
(VICED) (a) If he would not
made general renunciation of warranty – not
(a) Value of thing sold have bought the
waiver but merely limits liability of seller in case
at time of eviction thing sold without
of eviction (pay value of subject matter at the
(b) Income or fruits, if the part lost;
time of eviction)
he has been (b) BUT he must
(3) Buyer with knowledge of risk of eviction assumed
ordered to deliver return the thing
its consequences and made a waiver – vendor not
them to the party without other
liable
who won the encumbrances
(4) Waiver to a specific case of eviction – wipes out
eviction suit than those which it
warranty as to that specific risk but not as to
(c) Costs of eviction had when he
eviction caused by other reasons
suit and in a proper acquired it
case, suit against
BUYER’S OPTIONS IN CASE OF BREACH OF
seller for warranty
WARRANTY – ART. 1599
(d) Expenses of the
contract, if buyer
EXPRESS WARRANTY has paid them
(1) Prescriptive period: Period specified in express (e) Damages and
warranty OR 4 years, if no period is specified
PAGE 189
Total Eviction Partial Eviction Due to fortuitous event

Due to hidden fault
or fault of buyer
interests, and (a) Buyer may demand
ornamental price and expenses
expenses, IF sale BUT NOT damages
was made in bad
faith
Prescriptive period: 6 months from delivery
(1) Rules:
IMPLIED WARRANTY AGAINST REDHIBITORY DEFECTS OF
(a) Buyer need not appeal from decision to hold
ANIMALS
seller liable for eviction
(1) Remedies
(b) When adverse possession commenced before
sale, but prescription period completed after (a) Withdraw from contract + damages
transfer: seller is not liable (b) Demand a proportionate reduction of the
(c) If property sold for nonpayment of taxes due price + damages
and not made known to the buyer before the
sale: seller liable (2) If sale is rescinded:
(d) Judgment debtor also responsible for eviction (a) Buyer must return animal in the condition in
in judicial sales, unless it is otherwise decreed which it was sold and delivered
in the judgment (b) Buyer shall be liable for injury due to his
negligence.
(2) If there is waiver of warranty:
(a) Seller acted in bad faith: Waiver is void, seller (3) Prescriptive period: 40 days from delivery
liable for eviction
(b) Buyer made waiver without knowledge of risks WARRANTY IN SALE OF CONSUMER GOODS [RA 7394,
of eviction: Seller liable only for the value of SEC.68]
the thing sold at time of eviction If implied warranty accompanies express warranty,
(c) Buyer made waiver with knowledge of risks: both will be of equal duration.
Seller not liable; buyer assumed the
consequences Express Warranty Implied Warranty
(1) Demand repair (1) Retain the goods
IMPLIED WARRANTY AGAINST ENCUMBRANCES [ART. within 30 days and recover
1560] (a) Extendible for damages
(1) Rescission: Within 1 year from execution of deed causes beyond OR
of sale OR the control of (2) Reject the goods,
(2) Damages: Within 1 year from execution of deed of the warrantor cancel contract
sale or discovery of the burden or servitude (2) Demand refund of and recover from
price minus seller so much of
IMPLIED WARRANTY AGAINST HIDDEN DEFECTS [ARTS. amount directly the purchase price
1567-1571] attributable to the as has been paid +
(1) If thing is not lost: use of the damages
(a) Withdraw from contract (accion redhibitoria) + consumer prior to
damages the discovery of the
(b) Demand a proportionate reduction of the non-conformity
price (accion quanti minoris) + damages
(2) If thing is lost:

Due to fortuitous event
Due to hidden fault
If seller aware of
or fault of buyer
Demand:
Breach of Contract
defect, buyer may (a) Price paid minus
General Remedies [Art. 1191, CC]
demand: value of thing
The following remedies arise from the bilateral
(a) Return of price when it was lost
nature of the contract of sale:
(b) Refund of expenses (b) Damages, if seller
(1) Specific performance
(c) Damages acted in bad faith
(2) Rescission
If seller not aware of
General rule: Rescission of a contract will not be
defect:
permitted for a slight or casual breach, but only
PAGE 190
for such substantial and fundamental breach as

would defeat the very object of the parties in Available when: Vendee becomes INSOLVENT
making the agreement. [Song Fo & Co. vs.
Hawaiian-Philippine Co., 1925] When are goods in transit?
(3) Damages (1) From the time of delivery to the carrier or
Neither party incurs in delay if the other does not other bailee by the seller, for the purpose
comply or is not ready to comply in a proper of transmission to the buyer, until the
manner with what is incumbent upon him [Art buyer or his agent takes such delivery from
1169, CC] the carrier.
(2) Even when goods have reached their
Prescriptive periods ultimate destination, if buyer rejects them
(1) 10 years if based on written contract and carrier retains possession
(2) 6 years if based on oral contract (a) To terminate transit by delivery to a
middleman, delivery must be to keep,
REMEDIES OF THE SELLER – ARTS. 1636, 1594 not to transport.
(1) SALE OF MOVABLES When are goods no longer in transit?

Extrajudicial or Self-Help Remedies- No need to (1) Buyer obtained delivery of the goods
resort to the courts as long as possession of the before they have reached their ultimate
goods has not yet passed to the buyer destination
(2) Goods have arrived at ultimate destination,
(a) Possessory lien over the goods but carrier refuses to deliver
Right to retain possession of goods until (3) Carrier enters into a new contract with the
payment or tender of the whole price, or buyer upon arrival of the goods at their
unless he agrees to sell on credit [Arts. 1526- ultimate destination
1529, 1503, 1535]
How exercised?
When available: (1)By obtaining actual possession of the
(1) Goods are sold without stipulation as to goods
credit (2) By giving notice of his claim to the
(2) Goods are sold on credit, but term of credit carrier/other bailee who has possession of
has expired the goods
(3) Buyer becomes INSOLVENT (a) Carrier must redeliver goods to seller,
When lost: or according to his instructions
(1) Seller delivers goods to carrier or other (b) Carrier not obliged to redeliver until the
bailee for transmission to the buyer under negotiable document of title, if any, has
a straight or non-negotiable bill of lading been surrendered for cancellation
(2) Buyer/his agent lawfully obtains
possession of goods Seller’s right to stoppage in transitu is not
(3) Seller waives it affected even if buyer has sold or disposed of
(a) But it is not lost with respect to the the goods unless the seller has given his
remainder of the goods when only assent thereto.
partial delivery is made (unless such is
symbolic delivery of the whole) (c) Special right of resale
(b) It is not lost by the mere fact that seller Available to unpaid seller who has a right of
obtained a judgment for the price lien or who has stopped the goods in transitu
[Art. 1533]
When revived:
Goods are returned by the buyer in a wrongful Purpose: For seller to liquidate his damages
repudiation of the contract (1) He must do so within a reasonable time
and in such manner as to obtain the best
(b) Right of stoppage in transitu price possible.
An extension of the lien for the price; entitles (2) Resale is deemed to be a fair sale if it is
unpaid seller to resume possession of the undertaken in accordance with
goods while they are in transit before the established business practices, with no
goods come in possession of the vendee [Arts. attempt to take advantage of the original
1530-1532, 1535, 1636[2]] buyer.
PAGE 191
(3) Resale may be in a private or public sale, making a down payment because the law
but seller cannot buy directly or indirectly. aims to protect improvident buyers who may
(4) For resale to be valid, buyer need not be be tempted to buy beyond their means. [Levy
notified of an intention to resell or the Hermanos vs. Gervacio, 1939]
time and place of the resale. (2) Lease of personal property with option to buy
(a) When lessor has deprived the lessee of the
Effects: possession or enjoyment of the thing (Ex.:
(1) Seller is no longer liable to the original When lessor files a complaint for replevin
buyer upon the contract of sale or for any against lessee)
profit made by the resale (b) Also applies when seller assigns his credit to
(2) Buyer at resale acquires good title as someone else
against the original owner Alternative Remedies of the unpaid seller under Recto
(3) In case resale is at a loss, seller is entitled Law
to recover the difference from the original (1) Specific Performance
buyer (2) Cancellation of sale: If vendee fails to pay 2 or
(4) Seller may recover damages from original more installments
buyer for breach of contract (a) When the seller cancels the sale by
repossessing the property sold, he is barred
(d) Special right to rescind: from exacting payment for its price.
RETURN of the title over the undelivered (3) Foreclosure of Chattel Mortgage: If vendee fails
goods to the seller, and right to recover to pay 2 or more installments
DAMAGES for breach of contract [Art. 1534] (a) If seller chooses this remedy, he shall have no
further action to recover any unpaid balance,
Available to unpaid seller who has a right of and any stipulation to the contrary shall be
lien or who has stopped the goods in transitu void
(b) What Art 1484 (3) prohibits is “further action
When available: against the purchaser to recover any unpaid
(1) Seller expressly reserved his right to balance of the price;” and although this Court
rescind in case buyer defaults has construed the word “action” to mean “any
(2) Buyer has been in default in payment for judicial or extrajudicial proceeding by virtue of
an unreasonable time which the vendor may lawfully be enabled to
exact recovery of the supposed unsatisfied
Transfer of title shall not be held to have been balance of the purchase price from the
rescinded by the unpaid seller until he purchaser or his privy,” there is no occasion at
manifests by notice to the buyer or some other this stage to apply the restrictive provision of
overt act an intention to rescind. the said article because there has not yet been
a foreclosure sale resulting in a deficiency.
(e) When the whole of the price has not been paid The payment of the sum of P1,250 of Sapinoso
or tendered; was a voluntary act on his part and did not
result from a “further action” instituted by
(f) When a bill of exchange or other negotiable Northern Motors. [Motors vs. Sapinoso, 1970]
instrument has been received as conditional (c) The purpose of the law is to remedy the
payment and the condition on which it was abuses committed in foreclosure of chattel
received has been broken by reason of the mortgages. It prevents mortgagees from
dishonor of the instrument, the insolvency of seizing the mortgaged property, buying it at
the buyer, or otherwise. foreclosure sale for a low price and then
bringing the suit against the mortgagor for a
deficiency judgment. The almost invariable
RECTO LAW: SALE OF MOVABLES ON result of this procedure was that the
INSTALLMENT – ARTS. 1484-1486 mortgagor found himself minus the property
and still owing practically the full amount of
Applies in cases of: his original indebtedness. [Bachrach Motor
(1) Sale of movables in installment Co., Inc. v. Millan, 1935]
(a) The rule is intended to apply to sales of (d) Remedies are ALTERNATIVE, not cumulative,
movables, the price of which is payable in 2 or i.e. exercise of one bars exercise of the others.
more installments, but not to straight-term [Nonato vs. IAC, 1985]
sales where the price is payable in full, after
PAGE 192
(1) SALE OF IMMOVABLES (4) Seller may go to court for judicial rescission in
(a) PD 957, sec. 23, 24 lieu of a notarial act of rescission
Non-forfeiture of payments (5) During the grace period, buyer shall have the
(1) No installment payment made by the buyer right:
shall be forfeited in favor of the owner or (a) To sell or assign his rights, to be evidenced
developer of the condominium or subdivision in a notarial instrument
project, after due notice, when the buyer (b) To update his account
desists from paying due to the failure of the (c) To pay in advance any installment, or the
developer or owner to develop the project full unpaid balance of the price, without
according to the approved plans or within the any interest
time limit stated.
(2) Buyer’s Remedy: At his option, he may In the sale of immovables
reimburse the total amount paid including (1) Rescission for Anticipatory Breach [Art. 1591]
amortization interest with interest thereon at (a) Available when seller has reasonable
the legal rate grounds to fear the loss of the immovable
(3) If the buyer fails to pay the installments for property sold and its price
reasons other than the failure of the owner or (b) Example: Buyer destroys the building sold,
developer to develop the project, his rights there being no security therefor, and buyer
shall be governed by RA 6552. becomes insolvent
(c) Court has no discretion to compel the
(b) Maceda Law: Sale of Immovables on seller to wait for the expiration of the
Installment period to pay, or to grant the buyer more
time to pay
RA 6552: An Act To Provide Protection for Buyers (2) Specific Performance + Damages [Art. 1191]
of Real Estate on Installment Payments (a) Seller may choose between specific
performance and rescission, with damages
DOES not apply to: in either case
(1) Industrial lots (b) Court has discretion, for a just cause, to
(2) Commercial buildings give the buyer more time to pay even if the
(3) Sale to tenants under Agricultural Reform seller chooses rescission
Code [RA 3844] (3) Rescission + Damages [Art. 1191]
Imposes ADDITIONAL REQUIREMENTS FOR A (a) If seller chose specific performance, and
VALID RESCISSION: such becomes impossible, he may still
(1) If buyer has paid at least 2 years of avail of rescission
installments: (GRN) (b) If absolute sale, seller must make a
(a) Grace period: 1 month per year of demand for rescission
installment payments made. BUT buyer i. Judicially, OR
may only avail of it only once in every 5 ii. By a notarial act
years (c) Necessary even if automatic rescission is
(b) Refund of Cash Surrender Value (CSV): stipulated
50% of total amount paid + 5% for every (d) Effect of lack of demand: Buyer can still pay
year after the 1st 5 years of installments (e) Effect of demand: Court may not grant
i. BUT not greater than 90% of total buyer a new term
amount paid
(c) Notice of cancellation of demand for REMEDIES OF THE BUYER
rescission by notarial act is effective 30 General rule: Courts will refuse to decree specific
days from the buyer’s receipt thereof and performance with respect to chattels, because
upon full payment of CSV damages are a sufficient remedy
(2) If buyer has paid less than 2 years: (GN) Exception: Buyer is entitled to the specific thing
(a) Grace period: at least 60 days which to him has special value and which he cannot
(b) Notice of cancellation or demand for readily obtain in the market OR where damages
rescission by notarial act, effective 30 days would not furnish a complete and adequate remedy
upon receipt thereof [Baviera]
(3) Down payments, deposits, or options on the
contract shall be included in the total number (1) SALE OF MOVABLE
of installments made (1) Remedy for breach of obligation to preserve
If thing is lost—
PAGE 193
(1) Without fault of seller: No breach; Obligation of price OR

is extinguished OR Accept the whole and
(2) Through fault of seller (or through fortuitous Rescission, if: pay at contract rate
event, if seller is liable): Damages (a) Lack in area is at
least 1/10 of what is
A thing is lost when it— stated, or inferior
(1) Perishes value of thing sold
(2) Goes out of commerce exceeds 1/10 of
(3) Disappears in such a way that its existence is price
unknown or it cannot be recovered (b) Buyer would not
have bought the
If thing deteriorates property has he
been aware of the
Without fault of seller Through fault of seller inferior quality or
NO BREACH. Rescission + damages smaller area
Impairment shall be OR
borne by buyer Specific performance + This rule also applies to judicial sales [Art. 1541]
damages (b) If for a lump sum:
Everything is within
Not everything is within
(2) Remedy for breach of obligation to deliver boundaries, even if less or
boundaries
more than stated area
No remedy Proportional reduction in
Delivery of wrong quantity [Art. 1522]—
Goods are less than Where both the area and price
More the boundaries of the OR
what was contracted
immovable are declared, Rescission
Reject the goods Reject the excess (Or
the area covered within
OR the whole, if indivisible)
the boundaries of the
Accept and pay OR
immovable prevails over
(a) At contract rate if Accept the whole and
the stated area. (Rudolf
buyer accepts pay at contract rate
Lietz, Inc. v. CA, 2005)
knowing that
seller won’t
Prescriptive period: 6 months, counted from date of
perform in full
delivery
(b) At fair value: If
goods were used
before knowing
that seller won’t
be able to perform
in full
Extinguishment of Sale
CAUSES – ARTS. 1600, 1231
Art. 1464. Civil Code. In the sale of an undivided Generally, extinguished by the same causes as all
share of a specific mass of fungible goods, if the other obligations [Arts.1600, 1231]
mass contains less than the number, weight, or
measure bought, the buyer becomes the owner of (P-PLAN-C3-R3)
the whole mass and the seller is bound to make (1) Payment/performance
good the deficiency from goods of the same kind and (2) Prescription
quality, UNLESS a contrary intent appears. (3) Loss of thing due
(4) Annulment
(2) SALE OF IMMOVABLES (5) Novation
Real Estate [Arts. 1539-1543] (6) Condonation/remission
(a) If at the rate of a certain price per unit of (7) Confusion/merger
measure or number: (8) Compensation
(9) Rescission
Less (in area or quality) (10) Resolutory condition fulfilled
than what was agreed More (11) Redemption (Conventional or Legal)
upon:
Proportional reduction Reject the excess
PAGE 194
CONVENTIONAL REDEMPTION – ART. 1601 (c) Necessary and useful expenses made on the
thing sold
DEFINITION (2) Complying with any other stipulation agreed
(1) Vendor reserves the right to repurchase the thing upon, if any.
sold, with the obligation to comply with the
provisions of Article 1616 and other stipulations The general rule in redemption is that it is not
which may have been agreed upon. [Art 1601,CC] sufficient that a person offering to redeem manifests
(2) Available when the seller reserves the right to his desire to do so. The statement of intention must
repurchase the thing sold in the same instrument be accompanied by an actual and simultaneous
of sale as one of the stipulations of the contract tender of payment for the full amount of the
[Villarica v CA, 1968] repurchase price. [BPI Family Savings Bank, Inc. v.
Veloso, 2004]
PERIOD
General Rule: Follow period stipulated in contract, Tender of payment is enough (i.e., consignation is
but should not exceed 10 years. not necessary), if made on time, as a basis for action
(1) If no period stipulated, then it shall be four years against the buyer to compel him to resell. But that
from the execution of the contract tender does not in itself relieve the buyer from his
(2) But vendor may still exercise the right to obligation to pay the price when redemption is
repurchase within thirty days from the time final allowed by the court. [Paez v. Magno, 1949]
judgment was rendered in a civil action on the
basis that the contract was a true sale with right EFFECT OF REDEMPTION
to repurchase (1) The seller shall receive the thing free from all
charges or mortgages constituted by the buyer
BY WHOM EXERCISED BUT he shall respect leases executed by the
(1) Vendor buyer in good faith and in accordance with local
(2) His heirs, assigns or agents custom.
(3) Creditor, if he has exhausted the property of the (2) If there are growing fruits at the time of sale and at
vendor the time of redemption: no reimbursement or
(4) Co-owners of an immovable, if they sold their prorating if the buyer did not pay indemnity at the
interests to the same person, may only redeem time of sale
their respective shares (3) If there were no growing fruits at the time of sale,
(a) Vendee cannot be compelled to agree to a but some exist at the time of redemption: fruits
partial redemption prorated (buyer entitled to part corresponding to
(b) If the co-owners sold their interest to the same time he possessed the land in the last year,
person who previously bought the share of a counted from the anniversary of the date of sale)
co-owner subject to a right of redemption,
then the latter may be compelled to redeem EFFECT OF NON-REDEMPTION
the whole property Ownership is consolidated in the buyer BUT the
consolidation shall not be recorded in the Registry of
FROM WHOM TO REDEEM property without a judicial order, after the vendor has
(1) Vendee a retro been duly heard.
(2) His heirs, assigns or agents
(3) Subsequent purchaser of property, even if the RIGHT TO REDEEM VS. OPTION TO PURCHASE (VILLANUEVA)
right to redeem was not mentioned in the Right to Redeem Option to Purchase
subsequent contract; except if registered land,
where the right to redeem must be annotated on Not a separate contract Generally a principal
the title but part of a main contract and may be
(4) If several heirs, then the right of redemption can contract of sale, and created independent of
be exercised against each heir for his share of the cannot exist unless another contract
property reserved at the time of
the perfection of the
HOW EXERCISED
main contract of sale
(1) By returning the ff. to the buyer: (PEN) Does not need its Must have a
(a) Price of the sale; separate consideration consideration separate
(b) Expenses of the contract and other legitimate to be valid and effective and distinct from the
payments made by reason of the sale; purchase price to be
valid and effective [Arts.
PAGE 195
Right to Redeem Option to Purchase (3) Period of redemption extended (or granted anew)
upon or after the expiration of the right to
1324 and 1479] repurchase;
(4) Part of the purchase price retained by the seller;
The maximum period for The period of the option (5) Payment of taxes on the thing sold borne by the
the exercise of the right contract may be beyond seller;
to repurchase cannot the 10-year period (6) Any other case where it may be fairly inferred that
exceed 10 years the Real intention of the parties is for the
Requires in addition a May be exercised by transaction to secure a debt or other obligation.
tender of payment of the notice of its exercise to
amount required by law, the offeror FOR THE PRESUMPTION OF AN EQUITABLE MORTGAGE TO
including consignment ARISE UNDER ART. 1602, 2 REQUISITES MUST CONCUR
thereof if tender of (MOLINA V. CA, 2003)
payment cannot be (1) That the parties entered into a contract
made effectively on the denominated as a contract of sale, and
buyer (2) That their intention was to secure an existing
debt by way of a mortgage.
EQUITABLE MORTGAGE – ARTS. 1602-1604
Definition: An equitable mortgage is defined as one In case of doubt, a contract purporting to be a sale
which, although lacking in some formality, or form or with right to repurchase shall be construed as an
words, or other requisites demanded by a statute, equitable mortgage [Art. 1603]
nevertheless reveals the intention of the parties to
charge real property as security for a debt, and RATIONALE BEHIND PROVISION ON EQUITABLE MORTGAGE
contains nothing impossible or contrary to law. (1) Circumvention of usury law
[Molina v. CA, 2003] (2) Circumvention of prohibition against pactum
commissorium – creditor cannot appropriate the
The Valdehuezas having remained in possession of things given by way of pledge or mortgage since
the land and the realty taxes having been paid by remedy is foreclosure.
them, the contracts which purported to be pacto de
retro transactions are presumed to be equitable
REMEDIES OF APPARENT VENDOR
mortgages, whether registered or not, there being no
(1) If the instrument does not reflect the true
third parties involved. [Tan v. Valdehueza, 2003]
agreement: remedy is reformation
(2) If decreed to be an equitable mortgage: any
A pactum commissorium is a stipulation enabling the
money, fruits or other benefit to be received by
mortgagee to acquire ownership of the mortgaged
the buyer as rent or otherwise considered as
properties without need of foreclosure proceedings
interest.
which is a nullity being contrary to the provisions of
(3) If decreed as a true sale with right to purchase:
Article 2088 of the Civil Code. The inclusion of such
seller may redeem within 30 days from finality of
stipulation in the deed shows the intention to
judgment, even if the period for redemption has
mortgage rather than to sell. [Legaspi v. Spouses
expired.
Ong, 2005]
PERIOD OF REDEMPTION – ART. 1606
A pactum commissorium is contrary to the nature of
a true pacto de retro sale since ownership of the Art. 1606. The right referred to in Article 1601, in the
property sold is immediately transferred to the absence of an express agreement, shall last four
vendee a retro upon execution of the sale, subject years from the date of the contract.
only to the repurchase of a vendor a retro within the
stipulated period. Should there be an agreement, the period cannot
exceed ten years.
DISTINGUISHED FROM OPTION TO BUY – ART.
1602 However, the vendor may still exercise the right to
repurchase within thirty days from the time final
PRESUMPTION THAT A CONTRACT IS AN EQUITABLE judgment was rendered in a civil action on the basis
MORTGAGE ARISES WHEN (5P-R)— ART. 1602 that the contract was a true sale with right to
(1) Price unusually inadequate; repurchase.
(2) Possession retained by the seller as lessee or
otherwise;
PAGE 196
Period of Redemption LEGAL REDEMPTION – ART. 1619

(a) No stipulation: 4 years from the date of contract DEFINITION
(b) When there is agreement: Period not to exceed (1) Right to be subrogated:
10 years (a) upon the same terms and conditions
(c) General Rule: Period starts to run from the date stipulated in the contract,
of the execution of the contract (b) in the place of one who acquires a thing by
(d) Exception: When the efficacy of the sale is purchase or dation in payment, or by any other
subject to a suspensive condition, period transaction whereby ownership is transmitted
should be counted not from the date appearing by onerous title [Art 1619, CC]
on the instrument, but from the date when the (2) Applies to transfers of ownership by onerous title
condition is fulfilled, marking the where subrogation is possible. Hence, it cannot
consummation of the sale [Tolentino citing apply to barter or to transfer by gratuitous title or
Manresa]. hereditary succession.
(3) Applies to sales with pacto de retro [Baviera citing
Additional 30 days for Repurchase MANRESA]
The last paragraph of Art. 1606 giving the vendor the
right to repurchase within 30 days from the time of MANNER
the rendition of final judgment applies only where (1) a formal offer to redeem or
the nature and the character of the transaction, (2) filing of an action in court together with the
whether as a pacto de retro or an equitable consignation of the redemption price within the
mortgage, was put in issue before the court reglementary period
[Gonzales v. De Leon, 4 SCRA 332].
PERIOD TO REDEEM
EXERCISE OF THE RIGHT TO REDEEM – ART. To whom granted Period
1616
The seller can avail himself of the right of repurchase (a) Co-owner [Art 1620] 30 days from notice
by returning to the buyer: (a) In writing
(a) the price of the sale (b) Adjoining owner of (b) By the seller
(b) the expenses of the contract and any other Rural Land [Art 1621] (c) Of the actual
legitimate payments made by reason of the execution and
sale (c) Adjoining owner of delivery of the deed
(c) the necessary and useful expenses made on urban land [Art. 1622] of sale
the thing sold [Art.1616].
Actual knowledge of the
How redemption is exercised sale is immaterial ,
(a) The vendor de retro must complete the absent any showing that
repurchase before the expiration of the the co-owner has been
redemption period [Panganiban v. Cuevas, 7 shown a copy of the
Phil 477]. deed of sale through a
(b) A sincere or genuine tender of payment is written communication.
enough. The deposit of the amount of the [Doromal v. CA, 1975]
repurchase money with the Clerk of Court was
simply and additional security [Legazpi v. Court The law did not provide
of Appeals, 1986] for a particular mode of
(c) When tender of payment cannot be validly written notice, thus any
made because the buyer cannot be located, it compliance with “written
becomes imperative for the seller a retro to file notice” should suffice,
a suit for consignation with the courts of the including the giving of a
redemption price [Catangcatang v. Legayada, copy of the deed of sale.
1978]. [Conejero v. CA, 1966]
(d) If the offer or tender of payment for repurchase Debtor in case a credit or 30 days from the date
is refused, it is not necessary for the vendor a incorporeal right in the assignee demands
retro to consign in court or make judicial litigation is sold payment from debtor
deposit of the repurchase price [Rosales v. [Art.1634]
Reyes, 25 Phil 495]. Taxpayer in case of tax 1 year from date of
sale [Sec. 215, NIRC] forfeiture
Judgment debtor, 1 year from the date of
PAGE 197
To whom granted Period

Rationale: Public Policy, since co-ownership is a
successor–in- interest, or registration of the hindrance to the development and administration
creditor with subsequent certificate of sale of the property. [Baviera]
lien, in case of execution
sale [Rule 39, Sec.27, (2) Redemption by Adjoining Land-owners of rural
ROC] land [Art. 1621]
Debtor-mortgagor, 1 year from the date of
successors-in- interest, the sale The ff. Requisites must concur:
judicial/judgment (a) A piece of rural land is alienated
creditor, any person (b) Area does not exceed one hectare
having a lien on the
property, in case of
extrajudicial foreclosure When not applicable:
of mortgage [Act No. (a) The grantee does not own any rural land
3135. Sec. 6.] (b) Adjacent lands are separated by brooks,
drains, roads and other apparent servitudes
Debtor-mortgagor in 90 days from finality of
for the benefit of other estates
case of judicial judgment
foreclosure of real estate
mortgage IF the Order of preference if two or more wishes to
mortgagee is a bank or a exercise the right:
banking institution. [The (a) Owner with smaller land area
General Banking Law of (b) If same land area, then the one who first
2000] requested the redemption
Agricultural lessee w/o 2 years from the
knowledge of sale of registration of the sale What constitutes “rural” or “urban” is to be
landholding [Agrarian determined from the character of the community
Land or vicinity in which it is found, and NOT from the
Reform Code, Sec.12] nature of the land itself nor the purpose to which
it is devoted. [Ortega v. Orcine, 1971]
INSTANCES OF LEGAL REDEMPTION
(3) Redemption by adjoining land-owners of urban
(1) Redemption by Co-owners [Art. 1621] land (applies only to small portions of urban land)
A co-owner of a thing may exercise the right of [Art. 1621]
redemption in case the shares of all the co-
owners or any of them are sold to a third person Right of Pre-emption Right of Redemption
(a) “Third person” refers to all persons who are
not heirs of the vendor, by will or intestate Owner of any adjoining If the resale has been
succession land has a right of pre- perfected, the owner of
(b) The right is available not only to original co- emption at a reasonable the adjoining land shall
owners, but to those who had later acquired price when: have a right of
the share of the co-owner (a) Urban land is so redemption, also at a
(c) But the right of redemption may be exercised small and so situated reasonable price
by a co-owner only when part of the that a major portion
community property is sold to a stranger. of it cannot be used Priority if 2 or more
When the portion is sold to another co-owner, for any practical adjoining owners want to
the right does not arise because a new purpose w/in a redeem: owner whose
participant is not added to the co-ownership reasonable time; intended use of the land
[Fernandez v. Tarun, 2002] (b) Was bought merely appears to be best
for speculation; justified
If the price of the alienation is grossly excessive, (c) Was resold
the redemptioner shall pay only a reasonable Arises before sale Arises after sale
one. No rescission because no There can be rescission
Should two or more co-owners desire to exercise sale exists yet of the original sale
the right, they may also do so in proportion to the The action is directed Action is directed against
share they may respectively have in the thing against prospective buyer
owned in common. seller
PAGE 198
Who may redeem

(4) Redemption of Credit
Available when it is sold while in litigation (From (a) within 1 year months favor of a bank
the time the complaint is answered) from the after the (a) within 1 year
date of the sale after the
NOT available when the assignment is in favor of: sale sale (not
(a) Co-heir/co-owner of right assigned available in
(b) Creditor in payment of his credit case of a
(c) Possessor of a tenement or piece of land corporate
which is subject to the right assigned mortgagor)
Amount of redemption
How exercised: reimburse the assignee for the: (a) Amount of the purchase
(a) Price paid (b) Interest at 1% per month from the time of the sale
(b) Judicial expenses incurred up to the time of redemption
(c) Interest on the price from date of payment (c) Any assessment or taxes which the purchaser
may have paid
(5) Under the Public Land Act
Coverage: (7) Under the Agrarian Land Reform Code
(a) Every conveyance of land acquired under a Lessees right of pre-emption
free patent or homestead (a) The agricultural lessee shall have the
(b) The ownership of the land must have been preferential right to buy under the same
transferred to another. If the transaction is a reasonable terms and conditions, in case the
mere promise to sell, there is no right yet to lessor decides to hold the landholding
redeem (b) Conditions:
(c) This refers to conveyances made after the i. The landholding must be pre-empted by
prohibited 5 years from the issuance of the the DAR
patent or grant ii. When two or more lessees, each shall have
preferential right only to the extent of the
Period: area cultivated by him
(a) Within 5 years from the date of conveyance (c) Period: 180 days from notice in writing
(b) If pacto de retro sale, the period to redeem
cannot be less than 5 years Lessees right of redemption
(a) Sec. 12 RA 3844: In case landholding is sold to
Who may redeem: 3rd person without the knowledge of the
(a) General Rule: Applicant, widow, or heirs lessee, the latter shall have the right to
(b) Exception: land is sold to another member of redeem the same at a reasonable price and
the family of the applicant, or his direct consideration
descendant or heir (b) Period: within 180 days from notice in writing
(c) From whom: Subsequent purchasers
AGE REDEMPTION – ART. 1619
(6) Redemption in Foreclosure and Execution Sales
Art. 1619. Legal redemption is the right to be
Who may redeem subrogated, upon the same terms and conditions
In extra judicial In execution sales stipulated in the contract, in the place of one who
foreclosure (a) Judgment debtor acquires a thing by purchase or dation in payment, or
(a) Debtor (b) Successor in interest by any other transaction whereby ownership is
(b) Successor in interest (c) Creditor having a lien transmitted by onerous title.
(c) Judicial or judgment on the property sold
creditor of said by attachment,
debtor judgment or
(d) - Junior mortgage on the
encumbrancer property subsequent
to the judgment
Period to redeem
Extra judicial Execution sale If land is
foreclosure (a) within 12 mortgaged in
PAGE 199
The Law on Sale of REQUIREMENTS FOR OWNERS AND DEVELOPERS

Subdivision and (1) Registration of projects
(subdivision/condominium) with the NHA
Condominium (PD 957) (2) Registration of the owner
(3) License to sell of owner or dealer with
performance bond [PB, exceptions in Section 7]
DEFINITIONS
DEFINITION OF "SALE" OR "SELL" Registration of projects [Section 4, PD 957]
(a) include every disposition, or attempt to dispose, The registered owner of a parcel of land who wishes
for a valuable consideration, of a subdivision lot, to convert the same into a subdivision project shall
including the building and other improvements submit his subdivision plan to the National Housing
thereof, if any, in a subdivision project or a Authority. The same procedure shall be followed in
condominium unit in a condominium project. the case of a plan for a condominium project except
(b) also include a contract to sell, a contract of that NHA also approves the building thereon in
purchase and sale, an exchange, an attempt to accordance with the National Building Code.
sell, an option of sale or purchase, a solicitation of
a sale, or an offer to sell, directly or by an agent,
or by a circular, letter, advertisement or Registration of owner [Section 4, PD 957]
otherwise. The owner or the real estate dealer interested in the
(c) privilege given to a member of a cooperative, sale of lots or units, respectively, in such subdivision
corporation, partnership, or any association project or condominium project shall register the
and/or the issuance of a certificate or receipt project with the Authority by filing therewith a sworn
evidencing or giving the right of participation in, registration statement.
or right to, any land in consideration of payment
of the membership fee or dues, shall be deemed
Publication and issuance of registration certificate
a sale within the meaning of this definition.
[Section 4, PD 957]
A notice of the filing of the registration statement at
DEFINITION OF "BUY" OR "PURCHASE"
the expense of the applicant-owner or dealer, in two
(a) include any contract to buy, purchase, or newspapers general circulation, one published in
otherwise acquire for a valuable consideration a English and another in Pilipino, once a week for two
subdivision lot, including the building and other consecutive weeks. Notice shall state that
improvements, if any, in a subdivision project or a subdivision lots or condominium units are open to
condominium unit in a condominium project. inspection during business hours by interested
parties. The project shall be deemed registered upon
"Owner" shall refer to the registered owner of the completion of the publication requirement. The fact
land subject of a subdivision or a condominium of registration shall be evidenced by a registration
project. certificate issued to the applicant-owner or dealer.
"Developer" shall mean the person who develops or License to sell [Section 5, PD 957]
improves the subdivision project or condominium The registration certificate does NOT authorize the
project for and in behalf of the owner thereof. owner or dealer to sell any unit. They must first
obtain a license to sell within two weeks from the
"Dealer" shall mean any person directly engaged as registration of the project. The license to sell is
principal in the business of buying, selling or issued upon examination of the registration
exchanging real estate whether on a full-time or statement filed by the owner or dealer showing that:
part-time basis. (1) the owner or dealer is of good repute
(2) that his business is financially stable
"Broker" shall mean any person who, for commission (3) that the proposed sale of subdivision lots or
or other compensation, undertakes to sell or condominium units to the public would not be
negotiate the sale of a real estate belonging to fraudulent
another.
Performance bond [Section 6, PD 957]
"Salesman" shall refer to the person regularly
A license to sell can only be issued by the NHA if the
employed by a broker to perform, for and in his
owner or dealer files a performance bond
behalf, any or all functions of a real estate broker.
guaranteeing the construction and maintenance of
PAGE 200
the roads, gutters, drainage, sewerage, water system, (2) Payment of prescribed fee
lighting systems, and full development of the (3) Filing of bond or other security (amount fixed by
subdivision project or the condominium project and NHA) conditioned upon his faithful compliance
the compliance by the owner or dealer with the with provisions of PD 957
applicable laws and rules and regulations. The bond
shall be executed in favor of the Republic of the When registration of DBS terminates
Philippines and shall authorize the Authority to use (1) Termination of employment with dealer or broker
the proceeds thereof for the purposes of its (2) Expiration (31st day of Dec each year)
undertaking in case of forfeiture as provided in this
Decree. Registration of DBS may be renewed not less than
30 nor more than 60 days before Jan 1 and by
When license to sell and performance bond not payment of fee. If renewal is not within said period, it
required [Section 7, PD 957] shall be treated as an original application.
A license to sell and performance bond shall not be
required in any of the following transactions: Revocation of registration as DBS [Section 12, PD 957]
(a) Sale of a subdivision lot resulting from the Grounds
partition of land among co-owners and co-heirs. (1) Has violated any provision of this Decree or any
(b) Sale or transfer of a subdivision lot by the original rule or regulation made hereunder; or
purchaser thereof and any subsequent sale of the (2) Has made a material false statement in his
same lot. application for registration; or
(c) Sale of a subdivision lot or a condominium unit by (3) Has been guilty of a fraudulent act in connection
or for the account of a mortgagee in the ordinary with any sale of a subdivision lot or condominium
course of business when necessary to liquidate a unit; or
bona fide debt. (4) Has demonstrated his unworthiness to transact
the business of dealer, broker, or salesman, as
Grounds for suspension of license to sell [Section 8, the case may be.
PD 957] The NHA may suspend the DBS' registration pending
(1) misleading, incorrect, inadequate, or incomplete hearing of the case. The suspension or revocation of
information in registration statement the registration of a dealer or broker (DB) shall carry
(2) fraud upon prospective buyers on the sale or with it all the suspension or revocation of the
offering for a sale registration of all his salesmen (S).
Note: suspension is confidential unless orer of
suspension has been violated. Characteristics of sale of a condominium or
subdivision unit and similar contracts
Grounds for revocation of registration certificate and (1) Contracts to sell, deeds of sale, and other similar
license to sell [Section 9, PD 957] instruments must be registered with the Register
(1) Insolvency of owner/dealer of Deeds
(2) Violation of owner of PD 957 or its IRR or any (2) Mortgages on unit or lot by owner/developer
undertaking of his/its performance bond needs prior written approval by NHA for the
(3) Has been or is engaged or is about to engage in protection of buyers
fraudulent transactions (3) Advertisements by owner of developer become
(4) Misrepresentation in any prospectus, brochure, part of sales warranties enforceable against
circular or other literature about the subdivision owner or developer
project or condominium project that has been (4) No forfeiture of installments already paid by
distributed to prospective buyers buyer if buyer stops paying because of failure by
(5) Bad business repute of owner/dealer owner or developer to develop subdivision or
(6) Does not conduct his business in accordance with condominium
law or sound business principles (5) Failure to pay installments governed by Maceda
Law [RA 6552]
Requirement for Dealers, Brokers, and Salesmen (6) Title is issued to the buyer upon full payment
(DBS) (7) Realty tax is paid by owner or developer while not
Registration fully paid; but if the buyer occupies the unit/lot,
the owner/developer may recover the taxes from
Dealers, brokers, and salesmen (DBS) must be the buyer
registered (Section 11, PD 957) (8) Owner or developer cannot demand any other
Requisites of registration: charges allegedly for community benefit (may be
(1) Good reputation and compliance with NHA rules done by homeowner's association)
PAGE 201
Issuance of title [Section 25, PD 957]

Registration of sale, etc [Section 17, PD 957] The owner or developer shall deliver the title of the
All contracts to sell, deeds of sale and other similar lot or unit to the buyer upon full payment of the lot
instruments relative to the sale or conveyance of the or unit. No fee, except those required for the
subdivision lots and condominium units, whether or registration of the deed of sale in the Registry of
not the purchase price is paid in full, shall be Deeds, shall be collected for the issuance of such
registered by the seller in the Office of the Register title. In the event a mortgage over the lot or unit is
of Deeds of the province or city where the property is outstanding at the time of the issuance of the title to
situated. the buyer, the owner or developer shall redeem the
mortgage or the corresponding portion thereof
Mortgages on unit or lot by owner or developer within six months from such issuance in order that
[Section 18, PD 957] the title over any fully paid lot or unit may be secured
(a) Need prior written approval of the NHA and delivered to the buyer in accordance herewith.
(b) Must show that proceeds of mortgage will be
used for development of the condominium or Realty tax [Section 26, PD 957]
subdivision Real estate tax and assessment on a lot or unit shall
(c) Value of each lot or unit determined by the buyer de paid by the owner or developer without recourse
(if there is one) and the buyer shall be notified to the buyer for as long as the title has not passed
before release of loan the buyer; Provided, however, that if the buyer has
(d) Buyer may pay directly to mortgagee actually taken possession of and occupied the lot or
unit, he shall be liable to the owner or developer for
Advertisements by the owner or developer [Section 19, such tax and assessment effective the year following
PD 957] such taking of possession and occupancy.
(a) Must reflect real facts, must not mislead or
deceive public No other charges [Section 27, PD 957]
(b) Owner or developer shall be liable for any No owner or developer shall levy upon any lot or
misrepresentation as to facilities, etc. buyer a fee for an alleged community benefit. Fees to
(c) Advertisements shall form part of the sales finance services for common comfort, security and
warranties enforceable against the owner or sanitation may be collected only by a properly
developer organized homeowners association and only with the
(d) Failure to comply with sales warranties is consent of a majority of the lot or unit buyers actually
punishable under PD 957 residing in the subdivision or condominium project.
Non-forfeiture of payments (Section 23, PD 957)

No installment payment made by a buyer in a
subdivision or condominium project for the lot or unit
he contracted to buy shall be forfeited in favor of the The Condominium Act (RA
owner or developer when the buyer, after due notice
to the owner or developer, desists from further 4726)
payment due to the failure of the owner or developer
to develop the subdivision or condominium project DEFINITION OF A CONDOMINIUM
according to the approved plans and within the time Sec. 2. A condominium is an interest in real property
limit for complying with the same. Such buyer may, consisting of separate interest in a unit in a
at his option, be reimbursed the total amount paid residential, industrial or commercial building and an
including amortization interests but excluding undivided interest in common, directly or indirectly,
delinquency interests, with interest thereon at the in the land on which it is located and in other
legal rate. common areas of the building. A condominium may
include, in addition, a separate interest in other
Failure to pay installments [Section 24, PD 957] portions of such real property. Title to the common
The rights of the buyer in the event of this failure to areas, including the land, or the appurtenant
pay the installments due for reasons other than the interests in such areas, may be held by a corporation
failure of the owner or developer to develop the specially formed for the purpose (hereinafter known
project shall be governed by Republic Act No. 6552 as the "condominium corporation") in which the
[Maceda Law]. holders of separate interest shall automatically be
members or shareholders, to the exclusion of others,
in proportion to the appurtenant interest of their
respective units in the common areas.
PAGE 202
(2) Exclusive right to mortgage, pledge or encumber

(a) separate interest in a unit in a residential, his condominium and to have the same appraised
industrial or commercial building independently of the other condominiums but
(b) undivided interest in the land on which the any obligation incurred by such condominium
building is located and other common areas owner is personal to him
i. common areas may not be partitioned even by
judicial decree [Section 7] PARTITION BY SALE [SECTION 8]
(c) title to land and common areas held by This is an action that may be brought by one or more
condominium corporation - owners of separate persons owning condominiums in a condominium
interest are automatically project for the partition of the project by the sale
members/shareholders, exclusively. thereof. The effect is as if the owners of all the
condominiums in such project were co-owners of the
OTHER DEFINITIONS entire project in the same proportion as their
Sec. 3. As used in this Act, unless the context interests as their interests in the common areas.
otherwise requires:
(a) "Condominium" means a condominium as A partition by sale can only be done upon showing
defined in Section 2. any of the following:
(b) "Unit" means a part of the condominium (1) That three years after damage or destruction to
project intended for any type of independent use the project which renders material part thereof
or ownership, including one or more rooms or unfit for its use prior thereto, the project has not
spaces located in one or more floors (or part or been rebuilt or repaired substantially to its state
parts of floors) in a building or buildings and such prior to its damage or destruction
accessories as may be appended thereto. (2) That damage or destruction to the project has
(c) "Project" means the entire parcel of real property rendered one-half or more of the units therein
divided or to be divided in condominiums, untenantable and that condominium owners
including all structures thereon, holding in aggregate more than thirty percent
(d) "Common areas" means the entire project interest in the common areas are opposed to
excepting all units separately granted or held or repair or restoration of the project
reserved. (3) That the project has been in existence in excess of
(e) "To divide" real property means to divide the fifty years, that it is obsolete and uneconomic,
ownership thereof or other interest therein by and that condominium owners holding in
conveying one or more condominiums therein but aggregate more than fifty percent interest in the
less than the whole thereof. common areas are opposed to repair or
restoration or remodeling or modernizing of the
TRANSFERS OR CONVEYANCES OF A UNIT OR project
AN APARTMENT, OFFICE OR STORE, OR OTHER (4) That the project or a material part thereof has
SPACE THEREIN [SECTION 5, RA 4726] been condemned or expropriated and that the
(a) Transfer or conveyance of a unit or a space therein project is no longer viable, or that the
includes the transfer or conveyance of the condominium owners holding in aggregate more
i. undivided interests in common areas than seventy percent interest in the common
ii. membership or shareholding in the areas are opposed to continuation of the
condominium corporation condominium regime after expropriation or
(b) Proviso: only Filipino citizens or corporations at condemnation of a material portion thereof
least 60% of the capital stock are owned by (5) That the conditions for such partition by sale set
Filipino citizens may be the transferee of common forth in the declaration of restrictions, duly
areas in cases where the common areas are owned registered in accordance with the terms of the
by the owners of separate units as co-owners (not Condominium Act, have been met
by condominium corporation)
(c) Exception to proviso: hereditary succession DECLARATION OF RESTRICTIONS BY OWNER OF
PROJECT - PRECONDITION TO CONVEYANCE
RIGHTS OF A CONDOMINIUM UNIT OWNER [SECTION 9]
(ASIDE FROM RIGHTS ARISING FROM (a) The owner must register with the Register of
OWNERSHIP) [SECTION 6] Deeds a declaration of restrictions before the
(1) Absolute right to sell or dispose of his conveyance of any condominium in the project
condominium unless the master deed unless (b) The restrictions constitute a lien upon each
there is a right of first refusal in favor of condominium in the project and shall insure to
condominium owners and bind all condominium owners in the project
PAGE 203
(c) The lien may be enforced by any condominium POWER OF ATTORNEY HELD BY CORPORATION
owner or by the management body of the project IN CASE OF VOLUNTARY DISSOLUTION OF
CONDOMINIUM CORPORATION [SECTION 15]
ASSESSMENT IN ACCORDANCE WITH The condominium corporation is deemed to hold a
DECLARATION OF RESTRICTIONS [SECTION 20] power of attorney from all members/stockholders to
This is the "tax imposition power" of the sell and dispose of their separate interests in the
condominium corporation. If unpaid, the project. To liquidate, the condominium corporation
management body may cause a notice of will sell the entire project as if it owned the whole
assessment to be registered with the Register of project itself, subject to the corporate and individual
Deeds, which may be released only upon payment of condominium creditors.
the assessed fees. This lien is superior to all other
subsequent liens except real property taxes liens and SALE, EXCHANGE, LEASE, OR DISPOSITION BY
other liens provided for in the declaration of CORPORATION OF THE COMMON AREAS
restrictions. [SECTION 16]
Generally not allowed unless authorized by
HOW LIEN ENFORCED AFTER NON-PAYMENT affirmative vote of all of the stockholders/members.
OF ASSESSED FEES [SECTION 20]
Judicial or extra-judicial foreclosure of real property STOCKHOLDER/MEMBER DEMANDING
mortgages, where the management body may bid PAYMENT FOR SHARES OR INTEREST AKA
unless disallowed by the declaration of restrictions. APPRAISAL RIGHT [SECTION 17]
By-laws of the condominium corporation shall
CONTENTS OF A DECLARATION OF provide that any shareholder/member demanding
RESTRICTIONS [SECTION 9] payment for his share or interest must also consent to
(1) Provisions for the management of the project by sell his separate interest in the project to the
any of the ff bodies: corporation or any buyer of the corporation's choice.
(a) Condominium corporation
(b) Association of condominium owners REQUIREMENTS FOR REGISTRATION OF
(c) Board of governors elected by condominium CONVEYANCE WITH THE REGISTER OF DEEDS
owners [SECTION 18]
(d) Management agent elected by the owners or (1) Certificate of the management body of the
by the board named in the declaration project that the conveyance is in accordance with
(2) Provisions for voting majorities quorums, notices, the declaration of restrictions
meeting date, and other rules governing such
body or bodies REALTY TAX ON CONDOMINIUMS [SECTION 25]
(3) Powers of the management body Each condominium separately owned shall be
(4) Maintenance of insurance policies (fire, casualty, separately assessed, for purposes of real property
workmen's compensation, etc) taxation and other tax purposes to the owners
(5) Maintenance, utility, gardening and other services thereof and the tax on each such condominium shall
for the common areas constitute a lien solely thereon.
(6) Amendment of the restrictions
(7) Reasonable assessment to meet expenditures
(8) And many other provisions - the common thread
is the management and maintenance of the
common areas and the manner of exercise of the
management body's powers
INVOLUNTARY DISSOLUTION OF THE

CONDOMINIUM CORPORATION [SECTION 12]
In case of involuntary dissolution, the common areas
held by the corporation shall be transferred pro-
indiviso and in proportion to their interest to the
members/stockholders of the corporation, subject to
the rights of creditors of the corporation. The
common areas remain in undivided co-ownership.
PAGE 204
UP COLLEGE OF LAW SUCCESSION BAR OPERATIONS COMMISSION
PAGE 205
General Provisions KINDS

KINDS OF SUCCESSION
(1) Testamentary – that which results from the
DEFINITION & TRANSMISSION designation of an heir, made in a will executed in
Succession - a mode of acquisition by virtue of which the form prescribed by law. [Art. 779, CC]
the property, rights and obligations to the extent of (2) Legal or Intestate – that which takes place by
the value of the inheritance, of a person are operation of law in the absence of a valid will.
transmitted through his death to another or others (3) Mixed – that which is effected partly by will and
either by his will or by operation of law. [Art 774, CC] partly by operation of law. [Art. 780, CC]
(4) Compulsory – succession to the legitime and
Decedent - person whose property is transmitted prevails over all other kinds of succession [Balane,
through succession, whether or not he left a will. [Art 2010]
775, CC]
KINDS OF SUCCESSORS
Testator – a decedent who left a will [Art 775, CC] (1) Heirs – those who are called to the whole or an
aliquot portion of the inheritance either by will or
Inheritance includes: by operation of law [Art 782, CC]
(a) All the property, rights and obligations of a (2) Devisees – persons to whom gifts of real property
person which are not extinguished by his death are given by virtue of a will
[Art 776, CC] (3) Legatees – persons to whom gifts of personal
(b) Not only the property and the transmissible rights property are given by virtue of a will
and obligations existing at the time of his death,
but also those which have accrued thereto since Note: The distinction is significant in case of
the opening of the succession [Art 781, CC] preterition and imperfect disinheritance
What are transmitted? KINDS OF HEIRS

(a) Rights and obligations which are not strictly (1) Compulsory Heirs – those who succeed by force of
personal (intuit personae) [Balane, 2010] law to some portion of the inheritance, in an
(b) Money debts of the decedent are not transmitted amount predetermined by law known as the
to the heirs nor paid by them. The estate pays legitime, of which they cannot be deprived by the
them. [Balane, 2010] testator, except by a valid disinheritance. They
succeed regardless of a will.
General Rule: All property rights which have accrued (2) Voluntary or Testamentary Heirs – those who are
to the hereditary estate since the opening of instituted by the testator in his will, to succeed to
succession are transmitted to the heirs the portion of the inheritance of which the
testator can freely dispose. They succeed by
Exception: Property acquired after the making of a reason of a will.
will shall not pass to the heirs unless it should (3) Legal or Intestate Heirs – those who succeed to
expressly appear in the will that such was the the estate of the decedent who dies without a
intention of the testator. [Art 793, CC] valid will, or to the portion of such estate not
disposed of by will, or when certain grounds are
SUCCESSION OCCURS AT THE MOMENT OF met
DEATH
General Rule: The rights to succession are
transmitted from the moment of the death of the
decedent. [Art 777, CC]
Testamentary Succession
Exception: A person may be “presumed” dead for the
purpose of opening his succession. In this case, WILLS
succession is only of provisional character because IN GENERAL
there is always a chance that the absentee may still Will - an act whereby a person is permitted, with the
be alive. [Arts. 390-391, CC]. formalities prescribed by law to control to a certain
degree the disposition of his estate to take effect
after his death. [Art 783, CC]
PAGE 206
Kinds of Wills (b) will disinheriting a compulsory heir

(5) Notarial – an ordinary or attested will, which must
comply with the requirements of the law [Articles (11) Statutory grant – permitted only by law, not a
804-808, CC] constitutional right [Balane (2004)]
(6) Holographic – a will entirely written, dated and
signed by the hand of the testator [Art. 810, CC] Rules of Construction and Interpretation [Art. 788-795]
All rules are designed to ascertain and give effect to
Characteristics of Wills the intention of the testator.
(1) Purely personal – will-making is non-delegable
(a) making of a will cannot be left in whole or in Reason: testamentary succession is preferred to
part of the discretion of a third person, or intestacy.
accomplished through the instrumentality of (1) Different interpretations, in case of doubt, that
an agent or attorney [Art 784, CC] which would make the will operative [Art 788, CC]
(b) testator may not make a testamentary (2) Words to be taken in their ordinary and
disposition in such manner that another grammatical sense unless there is a clear
person has to determine whether or not it is to intention to use them in another sense [Art 790,
be operative [Art 787, CC] CC]
(3) Technical words are to be taken in their technical
What cannot be What may be entrusted to sense unless there is a contrary intention or when
rd rd
delegated to 3 persons 3 persons testator was unacquainted with such technical
(a) designation of heirs, (a) designation of sense [Art 790, CC]
devisees and person/institution (4) Words must be of an interpretation to give effect to
legatees falling under a class every expression. To make it operative rather than
(b) duration/efficacy of specified by testator inoperative; that which will prevent intestacy [Art
designation (b) manner of 791, CC]
(c) determination of distribution of (5) Invalidity of one of several dispositions does not
portions, when property specified by result in invalidity of others unless the testator
referred to by name testator [Art 786, CC] would not have made such dispositions if the first
[Art 785, CC] invalid disposition had not been made [Art 792,
Note: testator must first CC]
specify the class and the (6) Every devise and legacy shall convey all the interest
amount of property for unless it clearly appears the intention was to
proper delegation convey a less interest [Art 794, CC]
(7) Imperfect description, no person or property
(2) Free and intelligent [Art 839, CC] exactly answers to the description, mistakes,
(3) Solemn and formal - if the form is defective, the omissions [Art 790, CC]
will is void
(4) Revocable and ambulatory – will can be revoked Kinds of Ambiguities
at any time before the testator’s death [Art 828, Patent or Extrinsic Latent or Intrinsic
CC] Ambiguity Ambiguity
(5) Mortis causa - takes effect upon the testator’s (a) one which appears (a) one which cannot be
death upon the face of the seen from the reading
(6) Individual – prohibition against joint wills [Art. instrument of the will but which
818, CC] appears only upon
(7) Executed with animus testandi – intent to dispose consideration of
of the property extrinsic
(8) Executed with testamentary capacity circumstances
(9) Unilateral act - does not involve an exchange of
values or depend on simultaneous offer and
acceptance Note: There is no distinction between patent and
(10) Dispositive – disposes of property latent ambiguities in so far as the admissibility of
parol or extrinsic evidence to aid testamentary
General Rule: Wills contain disposition of the disposition is concerned.
testator’s estate mortis causa.
Resolving Ambiguities:
Exceptions: (non-dispositive wills) General Rule: Intrinsic or extrinsic evidence may be
(a) will recognizing an illegitimate child used to ascertain the intention of the testator
PAGE 207
Exception: Oral declarations of the testator as to his FORM

intention must be excluded
Governing Law
TESTAMENTARY CAPACITY AND INTENT Formal Validity Rules
(a) Testamentary capacity must exist at the time of Forms and solemnities of will are governed by the law
the execution of the will of the country in which the will was executed [Art 17,
(b) Supervening incapacity does not invalidate an CC]
effective will nor is the will of an incapable
validated by a supervening of capacity [Art 801, Filipino in a foreign country can make a will according
CC] to:
(1) Forms established by the law of the country in
Requisites - (SAP) which he may be
(a) Testator is of Sound mind at the time of execution (2) Form according to Philippine law [Art 815]
[Art. 798, CC]
(b) Not under 18 years of Age [Art. 797, CC] Alien who is abroad may make the will according to:
(c) Not expressly Prohibited by law to make a will (1) The law of the place where he resides
[Art. 796, CC] (2) Laws observed in his country
(3) According to those which the Civil Code
Age Requirement prescribes [Art 816]
Art 797, CC. Persons of either sex under the age of 18
cannot make a will. (a) Prohibited wills executed by Filipinos in a foreign
country shall not be valid in the Philippines even
though authorized by the laws of the country of
“Year” shall be understood to be 12 calendar months
execution. [Art 819, CC]
[Sec 31, Book 1, Admin Code]
(b) Joint wills are prohibited even though they are
valid in the foreign country where the Filipino
Soundness of Mind of the Testator
wrote his will
Negatively Stated
(a) Not necessary that the testator be in full
Governing Law as to Place of Execution of Will
possession of reasoning faculties
Place of
(b) Not necessary that the testator’s mind be wholly
Testator Execution of Governing Law
unbroken, unimpaired, unshattered by disease,
Will
injury or other cause [Art 799, CC]
Philippines Philippine Law (Art. 16,
CC)
Positively Stated: It is sufficient that the testator –
(NPC) Outside of (1) Law of the country
(a) Knew the Nature of the estate to be disposed of; the in which it is
Filipino
(b) The Proper objects of his bounty; Philippines executed (Art. 17,
(c) Character of the testamentary act [Art. 799, CC] CC); or
(2) Philippine Law (Art.
General Rule: Soundness of mind is presumed 815, CC)
[Art. 800, CC] Philippines (1) Philippine Law; or
(2) Law of the country
Exception: When the testator, one month or less, of which testator is
before the execution of the will was publicly known a citizen or subject
to be insane (Art. 817, CC)
Outside of (1) Law of the place
the where the will is
Aspect of the Governing Law Philippines executed (Art. 17,
Will Alien CC); or
Law in force at the time the will (2) Law of the place
Formal Validity
was executed [Art. 795, CC] where the testator
Law of decedent’s nationality at resides; or
Intrinsic Validity the time of his death [Art. 16 and (3) Law of the testator’s
2263, CC] country; or
(4) Philippine Law (Art.
816, CC)
PAGE 208
physical condition and position with relation to each

Aspects of the Will Governed by the National Law of other at the moment of inscription of each signature.
the Decedent [Jaboneta vs. Gustilo (1906)]
(1) Order of succession;
(2) Amount of successional rights; (3) MARGINAL SIGNATURES
(3) Intrinsic validity of testamentary provisions; and General Rule: Testator or his representative shall
(4) Capacity to succeed write his name, and the witnesses shall sign each
and every page except the last page [Art. 805, CC]
Common Requirements [Art 804, CC]
(1) In writing Exceptions:
(2) In a language or dialect known to the testator (a) When the will consists of only one page
(b) When the will consists of only two pages, the first
Notarial Wills of which contains all dispositions and is signed at
Special Requirements for Notarial Wills. – the bottom by the testator and the witnesses, and
(1) SUBSCRIPTION: Subscribed to, at the end [Art. the second page contains only the attestation
805, CC] clause duly signed at the bottom by the
(a) By the testator himself; or witnesses. [Abangan vs. Abangan (1919)]
(b) By the testator’s name written by a
representative in his presence and under his Matias vs. Salud (1957): the use of thumbprint was
express direction. allowed
(2) ATTESTATION: Attested and subscribed by 3 or Icasiano vs. Icasiano (1964): The inadvertent failure of
more credible witnesses in the presence of the one witness to affix his signature to one page of a
testator and of one another [Art. 805, CC] testament, due to the simultaneous lifting of two
pages in the course of signing, is not per se sufficient
to justify denial of probate.
Attestation Subscription
(4) PAGE NUMBERINGS - Numbered correlatively in
Mental act (act of the Mechanical (act of the letters placed on the upper part of each page.
senses) hand) [Art. 805, CC]
Purpose is to render Purpose of identification (a) i.e., Page One of Five pages
available proof during (b) Mandatory part: pagination by means of a
probate of will, not only conventional system
of the authenticity of the (c) Directory part: pagination in letters on the
will but also of its due upper part of each page [Balane (2010)]
execution
(5) ACKNOWLEDGED before a notary public by the
The attestation clause shall state the following: testator and the witnesses [Art. 806, CC]
(a) Number of pages; (a) Notary public cannot be considered a third
(b) The fact that the testator or his representative witness. He cannot acknowledge before
under his express direction signed the will and himself his having signed the will. To allow
every page in the presence of instrumental such would have the effect of having only two
witnesses attesting witnesses to the will [Cruz v
(c) That the witnesses signed the will and all its Villasor(1973)]
pages in the presence of the testator and of one (b) The certification of acknowledgement need
another. not be signed by the notary in the presence of
the testator and the witnesses. [Javellana v
Cagro v Cagro (1953): The signatures of the witnesses Ledesma 1955)]
must be at the bottom of the attestation clause
Special Rules for Handicapped
Cruz v Villasor (1973): The notary public cannot be Deaf Mute [Art. 807, CC]
counted as an attesting witness (a) Testator must personally read the will; or
(b) Testator shall personally designate two persons
to read the contents and communicate it to him
Test of presence
in some practicable manner.
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
PAGE 209
Blind [Art. 808, CC] Holographic Wills

(a) The will shall be read to the testator twice - By Requisites
one of the subscribing witnesses and by the (1) In writing [Art. 804, CC]
notary public acknowledging the will. (2) In a language known to the testator [Art. 804, CC]
(b) A testator suffering from glaucoma is considered (3) Entirely written, dated and signed in the hand of
as legally blind [Garcia vs. Vasquez (1970)] the testator himself [Art. 810, CC]
Substantial Compliance
Art. 809, CC. In the absence of bad faith, forgery, or Advantages Disadvantages
fraud, or undue and improper pressure and
influence, defects and imperfections in the form of (a) Simple and easy to (a) No guarantee as to
attestation or in the language used therein shall not make the capacity of the
render the will invalid if it is proved that the will was (b) Induces foreigners in testator
in fact executed and attested in substantial this jurisdiction to set (b) No protection against
compliance with all the requirements of Article 805. down their last violence, intimidation
wishes or undue influence
Substantial compliance rule applies only in cases (c) Guarantees the (c) May not faithfully
when such defects and imperfections can be absolute secrecy of express the will of the
supplied by an examination of the will itself the testamentary testator due to faulty
dispositions expressions
Examples: (d) Can be easily falsified
(a) Whether all pages are consecutively numbered and concealed
(b) Whether the signatures appear in each and every
page
(c) Whether the subscribing witnesses are three Witnesses Required for Probate – [Art. 811]
(d) Whether the will was notarized [Caneda v CA] (a) At least one witness who knows the handwriting
and signature of the testator; explicitly declare
WITNESSES
that it is the testator’s
Qualifications [Art. 820, CC] (b) If contested – at least 3 of such witnesses
(1) Of sound mind (c) In the absence of a competent witness, expert
(2) Aged 18 years or over testimony may be resorted to
(3) Not blind, deaf or dumb
(4) Able to read and write General Rule: The holographic will itself must be
presented for probate [Gan v Yap (1958)]
Disqualifications [Art. 821, CC]
(1) Person not domiciled in the Philippines Exception: If there is a photostatic copy or xerox copy
(2) Those who have been convicted of falsification, of the holographic will, it may be presented for
perjury, or false testimony. probate [Rodelas v Aranza (1982)]
Interested witness [Art. 823, CC] Notarial Will v. Holographic Will
General Rule Exception Notarial Will Holographic Will

Devises or legacies in If there are three other NOTARIAL codicil ONLY Notarial Codicil; or
favor of a spouse, parent competent witnesses, Holographic Codicil; or
or child who also attests the device or legacy shall Additional dispositions
to the will as a witness be valid and the below the signature,
shall be void interested witness shall dated and signed in the
be treated as a mere hand of the testator.
surplusage
Insertion, Cancellation, Erasure or Alteration –
(a) Creditors are not incompetent to be witnesses (a) Testator must authenticate by his FULL
[Art. 824, CC] SIGNATURE
(b) Supervening incompetency shall not prevent the (b) Full signature does not necessarily mean the
allowance of the will [Art. 822, CC] testator’s full name; it rather means his usual and
customary signature. [Balane (2010)]
PAGE 210
Effect of insertion written by another person on the Prohibition is applicable only to joint wills executed by
validity of a holographic will Filipinos.
When made Effect CODICILS

Codicil [Arts. 825-826, CC]
After the execution, Insertion considered not (1) It is a supplement or addition to a will,
without consent of written. Validity cannot (2) made after the execution of a will,
testator be defeated by the (3) and annexed to be taken as a part of the will,
malice or caprice of a (4) by which any disposition made in the original will
third person is explained, added to, or altered.
After execution, with Will is valid, insertion is (5) in order that it may be effective, it shall be
consent void. executed as in the case of a will.
After execution, Insertion becomes part
validated by testator’s of the will. Entire will INCORPORATION BY REFERENCE
signature becomes void because it Requisites [Art 827, CC]
is not wholly written by (1) The document or paper referred to in the will
the testator. must be in existence at the time of the execution
Contemporaneous to the Will is void because it is of the will.
execution of the will not written entirely by (2) The will must clearly describe and identify the
the testator same, stating among other things the number of
pages thereof.
Joint Wills (3) It must be identified by clear and satisfactory
Art. 818, CC. Two or more persons cannot make a will proof as the document or paper referred to
jointly, or in the same instrument, either for their therein; and
reciprocal benefit or for the benefit of a third person. (4) It must be signed by the testator and the witnesses
on each and every page, except in case of
voluminous books of account or inventories.
Art. 819, CC Wills, prohibited by the preceding article,
executed by Filipinos in a foreign country shall not be REVOCATION
valid in the Philippines, even though authorized by Modes of Revocation [Art. 830, CC]
the laws of the country where they may have been (1) By implication of law; or
executed. (2) By the execution of a will, codicil or other writing
executed as provided in the case of wills; or
Joint Will (3) By burning, tearing, canceling, or obliterating the
(1) A single testamentary instrument, will with the intention of revoking it, by the testator
(2) Which contains the wills of two or more persons, himself, or by some other person in his presence,
(3) Jointly executed by them, and by his express direction.
(4) Either for their reciprocal benefit or for the benefit
of a third person. Note: The act contemplating revocation must be
done at any time before the death of the testator. The
Mutual Wills right of revocation cannot be waived or restricted.
(1) Executed pursuant to an agreement between two (Art. 828, CC)
or more persons,
(2) Jointly executed by them, Law Governing Revocation (Art. 829, CC)
(3) Either for their reciprocal benefit or for the benefit Place of Testator’s Governing Law
of a third person. Revocation Domicile
Philippines, or Philippine Law
Reciprocal Wills Philippines some other
(1) Testators name each other as beneficiaries in country
their own wills, Philippines Philippine Law
(2) under similar testamentary plans
Note: A will that is both joint and mutual is one

executed jointly by two or more persons, the
provisions of which are reciprocal and which shows
on its face the devises are made in consideration of
each other. Such is prohibited under Art. 819, CC.
PAGE 211
Place of Testator’s Governing Law contained in a previous one which is void as to its
Revocation Domicile form [Art. 835, CC].
(1) Law of the (1) Tolentino: Reproduction in the codicil is
place where required only when the original will is void as
the will was to it form; in all other cases, reference to the
Foreign Country made; or original will suffices to republish it through the
(2) Law of the codicil.
Outside the place in which (c) If after making a will, the testator makes a second
Philippines the testator will expressly revoking the first, the revocation of
had his the second will does not revive the first will, which
domicile at the can be revived only by another will or codicil.
time of (1) PRINCIPLE OF INSTANTER: Revoking clause
nd
revocation in the 2 will is NOT TESTAMENTARY in
character but operates to revoke the prior will
Doctrine of Dependent Relative Revocation— INSTANTER upon the execution of the will
nd
The rule that where the act of destruction is containing it. The revocation of the 2 will
st
connected with the making of another will so as to does not revive the 1 will which has already
fairly raise the inference that the testator meant the become a NULLITY.
revocation of the old to depend upon the efficacy of
the new disposition intended to be substituted, the Republication vs. Revival
revocation will be conditional and dependent upon the
efficacy of the new disposition; and if for any reason, Republication Revival
the new will intended to be made as a substitute is
inoperative, the revocation fails and the original will (a) Takes place by an act (a) Takes place by
remain in full force. [Molo vs. Molo, 1951] of the testator operation of law
(b) Corrects extrinsic (b) Restores a revoked
The failure of the new testamentary disposition upon and intrinsic defects will
whose validity the revocation depends is equivalent
to the non-fulfillment of a suspensive condition and
hence prevents the revocation of the original will.
ALLOWANCE AND DISALLOWANCE OF WILLS
Revocation vs. Nullity Probate Requirement
Probate –a Special Proceeding required to establish
Revocation Nullity the validity of a will and in order to pass real or
personal property [Art. 838, CC]
(a) By the act of the (a) Proceeds from law
testator (b) Inherent in the Matters to be proved in probate
(b) Presupposes a valid testament, be it an (1) Whether the instrument which is offered for
act intrinsic or an probate is the last will and testament of the
(c) Takes place during extrinsic defect decedent
the lifetime of the (c) Invoked after the (2) Whether the will has been executed in
testator testator’s death by accordance with the formalities prescribed by law
(d) Testator cannot his heirs (3) Whether the testator had testamentary capacity
renounce the right to (d) Nullity of a will can at the time of execution of the will
revoke be disregarded by
the heirs through Issues to be resolved in probate proceedings – [Art.
voluntary 839]
compliance General Rule: the probate court cannot inquire into
therewith the intrinsic validity of testamentary provisions. Only
the extrinsic validity of such wills may be examined.
REPUBLICATION AND REVIVAL Exceptions: when practical considerations demand

(a) The execution of a codicil referring to a previous the intrinsic validity of the will be resolved
will has the effect of republishing the will as (a) Acain vs Diongson (1987): When the will is
modified by the codicil [Art. 836, CC]. intrinsically void on its face such that to rule on its
(b) The testator cannot republish without formal validity would be a futile exercise
reproducing in a subsequent will, the dispositions
PAGE 212
(b) Valera vs. Inserto (1987): Claimants are all heirs who are to succeed him in his property and
and they consent either, expressly or impliedly, to transmissible rights and obligation [Art 840, CC]
the submission of the question of intrinsic validity
to the court. A will shall be VALID even though it (1) should not
(c) Pastor vs. CA (1983): Probate court may pass contain an institution of an heir or (2) such institution
upon the title thereto, but such determination is should not comprise the entire estate or (3) the
provisional and not conclusive, and is subject to person so instituted should not accept the
the final decision in a separate action to resolve inheritance or be incapacitated to succeed.
title.
In such cases, the testamentary dispositions made in
Revocation v. Disallowance accordance with law shall be complied with and the
remainder of the estate shall pass to the legal heirs
Revocation Disallowance [Art. 841, CC].
Voluntary Act of the Given by Judicial Decree EXTENT OF GRANT [ART. 842, CC]:
Testator Freedom of disposition depends upon the existence,
With or Without Cause Must always be for a kind and number of compulosry heirs.
legal cause (1) No compulsory heirs  Full power of disposition
May be partial or total Always total, except (2) One with compulsory heirs cannot disregard the
when the ground of rights of the latter (i.e. legitime)
fraud of influence for
example affects only EFFECT OF PREDECEASE OF HEIR (ART. 856, CC):
certain portions of the Any heir who dies before the testator or is
will incapacitated to succeed or renounces the
inheritance transmits no rights of the testator to his
Effect of Final Decree of Probate, Res Judicata on own heirs. This is without prejudice to the rights of
Formal Validity representation. [Tolentino]
The probate of a will by the probate court having
jurisdiction thereof is usually considered as IDENTIFICATION OF HEIRS, MANNER OF INSTITUTION [ART.
conclusive as to its due execution and validity, and is 843-849; 851-853]
also conclusive that the testator was of sound and
disposing mind at the time when he executed the FALSE CAUSE [ART. 850]:
will, and was not acting under duress, menace, fraud, The statement of a false cause for the institution of
or undue influence, and that the will is genuine and an heir shall be considered as not written unless it
not a forgery. [Mercado vs. Santos, 1938] appears from the will that the testator would not
have made such institution if he had known the
Grounds for Denying Probate (SUM IFF) falsity of such cause.
(1) If the Signature of the testator was procured by
fraud; PRETERITION
(2) If it was procured by Undue and improper The preterition or omission of one, some, or all of the
pressure and influence, on the part of the compulsory heirs in the direct line, whether living at
beneficiary or some other person; the time of the execution of the will or born after the
(3) If the testator acted by Mistake or did not intend death of the testator, shall annul the institution of
that the instrument he signed should be his will heir; but the devises and legacies shall be valid
at the time affixing his signature thereto; insofar as they are not inofficious.
(4) If the testator was Insane or otherwise mentally
incapable of making a will at the time of its If the omitted compulsory heirs should die before the
execution; testator, the institution shall be effectual, without
(5) If the Formalities required by law have not been prejudice to the right of representation. [Art. 854, CC]
complied with; or
(6) If it was executed through Force or under duress, Concept [Art. 854, CC]
or the influence of fear, or threats. (a) There must be a total omission of one, some or all
of the heir/s from the inheritance. [Balane citing
INSTITUTION OF HEIRS Seangio vs Reyes (2006)]
Institution of Heirs – an act by virtue of which the (b) The omission must be that of a compulsory heir.
testator designates in his will the person or persons (c) The compulsory heir omitted must be of the direct
line.
PAGE 213
(d) The omitted compulsory heir must be living at the (1) Neri vs. Akutin (1941): When there are no
time of the testator’s death or must at least have devises and legacies, preterition will result in
been conceived before the testator’s death. the annulment of the will and give rise to
intestate succession.
COMPULSORY HEIRS IN THE DIRECT LINE
A direct line is that constituted by the series of SUBSTITUTION OF HEIRS
degrees among ascendants and descendants DEFINITION
(ascending and descending). [Art 964 par.2] Substitution - is the appointment of another heir, so
that he may enter into the inheritance in default of
PRETERITION V. DISPOSITION LESS THAN LEGITIME the heir originally instituted. [Art 857, CC]
BALANE:
(a) If the heir in question is instituted in the will but KINDS
the portion given to him by the will is less than his Brief or Compendious [Art. 860, CC]
legitime – there is no preterition. [Reyes vs (a) Brief – Two or more persons were designated by
Barretto-Datu (1967)] the testator to substitute for only one heir
(b) If the heir is given a legacy or devise – there is no (b) Compendious – One person is designated to take
preterition. [Aznar vs Duncan (1966)] the place of two or more heirs
(c) If the heir had received a donation inter vivos from
the testator – the better view is that there is no Reciprocal
preterition. The donation inter vivos is treated as If the heirs instituted in unequal shares should be
an advance on the legitime under Articles 906, reciprocally substituted, the substitute shall acquire
909, 910 and 1062 the share of the heir who dies, renounces, or is
(d) The remedy, if the value of inheritance, legacy or incapacitated, unless it clearly appears that the
devise, or donation inter vivos is only for intention of the testator was otherwise. If there is
completion of his legitime under Articles 906 and more than one substitute, they shall have the same
907 share in the substitution as the institution.
DISTINGUISHED FROM DISINHERITANCE Example (only 1 substitute): If two heirs are

reciprocally substituted, then if one of them dies
Preterition Disinheritance before the testator dies, renounces, or turns out to be
incapacitated, the other will get his share, regardless
(a) Tacit deprivation of a (a) Express deprivation of of whether or not their shares are equal.
compulsory heir of a compulsory heir of
his legitime his legitime Example (more than 1 substitute): A is instituted to 1/3,
(b) May be voluntary but (b) Always voluntary B to 1/6, and C to ½. If C dies before the testator,
the presumption of (c) For some legal cause renounces or turns out to be incapacitated, then the
law is that it is (d) If the disinheritance is other two will get his shares in the same proportion
involuntary valid, the compulsory as in the institution. A will get twice as much as B
(c) Law presumes there heir disinheritied is (because his share of 1/3 in the institution is twice the
has been merely totally excluded from size of B’s share of 1/6)
oversight or mistake the inheritance. In
on the part of the case of unlawful Simple Substitution [Art. 859, CC]. – The testator may
testator disinheritance, the designate one or more persons to substitute the
(d) Omitted heir gets not compulsory heir is heir/s instituted in case the heirs should:
only his legitime but merely restored to his (1) die before him (predecease),
also his share in the legitime (2) should not wish to accept the inheritance
free portion not (repudiation), or
disposed of by way of (3) should be incapacitated to accept the inheritance
legacies and devises (incapacitated). [Art. 859, CC]
EFFECTS OF PRETERITION [ART. 854, CC] Fideicommisary Substitution. – The testator institutes
(a) The institution of the heir is annulled. an heir with an obligation to preserve and to deliver
(b) Devises and legacies shall remain valid as long as to another the property so inherited. The heir
they are not inofficious. instituted to such condition is called the First Heir or
(c) If the omitted compulsory heir should die before the Fiduciary Heir; the one to receive the property is
the testator, the institution shall be effective, the fideicommissary or the second heir. [Art 863, CC]
without prejudice to the right of representation.
PAGE 214
Requisites of a Fideicommisary Substitution [Arts. 863- CONDITIONS

865, CC] Basis of testator’s right to impose conditions, terms or
(1) A Fiduciary or First Heir instituted is entrusted modes: Testamentary freedom
with the obligation to preserve and to transmit to a
Fideicommissary Substitute or Second Heir the Prohibited conditions: (considered as not imposed)
whole or part of the inheritance. (1) Any charge, condition or substitution whatsoever
(2) The substitution must not go beyond one degree upon the legitimes. [Art. 872]
from the heir originally instituted. (2) Impossible and illegal conditions. [Art 873]
(3) The Fiduciary Heir and the Fideicommissary are (3) Absolute condition not to contract a first or
living at the time of the death of the testator. subsequent marriage unless imposed on the
(4) The fideicommissary substitution must be widow or widower by the deceased spouse, or by
expressly made. the latter’s ascendants or descendants. [Art. 874]
(5) The fideicommissary substitution is imposed on (4) Scriptura captatoria or legacy-hunting
the free portion of the estate and never on the dispositions* [Art. 875]
legitime
Scriptura captatoria/ Legacy-Hunting Dispositions
Note: (a) Reasons for prohibition
(a) Palacios vs. Ramirez (1982): “Degree” refers to (1) The captatoria converts the testamentary
degree of relationship. grants into contractual transactions;
(b) PCIB vs. Escolin (1974): In the absence of an (2) It deprives the heirs of testamentary freedom;
obligation on the part of the first heir to preserve (3) It gives the testator the power to dispose
the property for the second heir, there is no mortis causa not only of his property but also
fideicommissary substitution. of his heir’s.
(b) Effect : Entire disposition is void
Effects of predecease of the first heir/fiduciary or the
second heir/fideicommisary Potestative, Casual and Mixed Conditions
(a) Legend: (a) Potestative Conditions
(1) T – Testator General Rule: Must be fulfilled as soon as the heir
(2) FH – First Heir / Fiduciary learns of the testator’s death
(3) SH – Second Heir / Fideicommissary
Substitute Exception: If the condition was already complied with
(b) Situation 1: If the following is the sequence of at the time the heir learns of the testator’s death; or
death of the three parties: FH – SH – T, who will if the condition is of such a nature that it cannot be
inherit? The legal heirs. There is no fulfilled again.
fideicommissary substitution because FH and
SH are not living at the time of the testator’s Constructive Compliance: deemed fulfilled
death. (Art 863, CC)
(c) Situation 2: T – SH – FH, who will inherit? The (b) Casual or mixed
SH and his heirs under Art. 866, CC. This is General Rule: May be fulfilled at any time (before or
because the SH passes his rights to his own after testator’s death), unless testator provides
heirs when he dies before FH. otherwise.
(d) Situation 3: FH – T – SH, who will inherit? No
specific provision in law, but SH inherits because Exception: If already fulfilled at the time of execution
the T intended him to inherit. of will:
(1) if testator unaware of the fact of fulfillment –
TESTAMENTARY DISPOSITIONS WITH A deemed fulfilled
CONDITION, A TERM, AND A MODE (2) if testator aware:
3 KINDS OF TESTAMENTARY DISPOSITIONS (a) can no longer be fulfilled again: deemed
(1) Conditional (obliquely defined in Article 1179, par. fulfilled
1) (b) can be fulfilled again: must be fulfilled again.
(2) Dispositions with a term (obliquely defined in Constructive Compliance:
Article 1193, pars. 1 and 3) (a) if casual – not applicable
(3) Dispositions with a mode/modal dispositions (b) if mixed – applicable only if dependent partly on
(obliquely defined in Article 882) the will of a third party not interested.
PAGE 215
Mode [Art. 882, CC] (a) Widow or Widower / Surviving Spouse

Definition – an obligation imposed upon the heir, (Legitimate)
without suspending, as a condition does, the (b) Illegitimate Children and Illegitimate
effectivity of the institution Descendants
(a) Must be clearly imposed as an obligation in order
to be considered as one. Mere preferences or If the testator is a If the testator is an
wishes expressed by the testator are not modes. LEGITIMATE CHILD: ILLEGITIMATE CHILD:
(b) A mode functions similarly to a resolutory (1) LC and descendants (1) LC and descendants
condition. (2) In default of No. 1, LP (2) ILC and descendants
and ascendants
Caución Muciana (3) SS (3) In default of Nos. 1-2.
DEFINITION: A security to guarantee the return of ILP only
the value of property, fruits, and interests, in case of (4) IC and descendants (4) SS
contravention of condition, term or mode
Specific Rules on Legitimes
Instances when it is needed: Direct Descending Line
(1) Suspensive term [Art. 885] (a) Rule of Preference between lines [Art 978 and
(2) Negative potestative condition - when the 985, CC]
condition imposed upon the heir is negative, or (1) Those in the direct descending line shall
consists in not doing or not giving something [Art exclude those in the direct ascending and
879] collateral lines; and
(3) Mode [Art 882, par 2] (2) Those in the direct ascending line shall, in
turn, exclude those in the collateral line.
LEGITIME (3) Rule of Proximity [Art 926, CC] The relative
DEFINITION [ART. 886] nearest in degree excludes the farther one
(a) It is that part of the testator’s property which he (b) Right or representation ad infinitum in case of
cannot dispose of, predecease, incapacity, or disinheritance [Art 972
(b) Because the law has reserved it for his and 992, CC]
compulsory heirs. (1) For decedents who are Legitimate Children,
only the Legitimate Descendants are entitled
COMPULSORY HEIRS AND VARIOUS COMBINATIONS to right of representation.
Classes of Compulsory Heirs [Art. 887, CC] (2) For decedents who are Illegitimate Children,
(1) Primary: Those who have precedence over and both the Legitimate and the Illegitimate
exclude other compulsory heirs: Descendants can represent, only with respect
to the decedent’s illegitimate parents.
Legitimate Children and Legitimate Descendants (c) If all the Legitimate Children repudiate their
with respect to their Legitimate Parents and legitime, the next generation of Legitimate
Ascendants Descendants may succeed in their own right.
(2) Secondary: Those who succeed only in the absence Direct Ascending Line
of the Primary compulsory heirs: (a) Rule of division between lines
(a) Legitimate Parents and Legitimate (1) The father and the mother shall inherit
Ascendants, with respect to their Legitimate equally if both living. One succeeds to the
Children and Descendants. (They will inherit entire estate of the child if the other is dead.
only in default of legitimate children and their [Art. 986, CC]
descendants) (2) In default of the mother and the father, the
(b) Illegitimate Parents with respect to their ascendants nearest in degree will inherit. [Art.
Illegitimate Children. (They will inherit only in 987]
default of the illegitimate and legitimate (3) If there is more than one relative of the same
children and their respective descendants). degree but of different lines, one half will go
Note that other illegitimate ascendants are to the paternal ascendants and the other half
not included. to the maternal ascendants. [Art. 987]
(b) Rule of equal division
(3) Concurring: Those who succeed together with the (1) The relatives who are in the same degree shall
primary or the secondary compulsory heirs: inherit in equal shares. [Art 987]
PAGE 216
Summary of Legitimes of Compulsory Heirs

Legitimat
Surviving Relatives Legitimate Children Surviving Illegitimate e Parents Illegitimate
[LC] & Descendants Spouse [SS] Children [ILC] [LP] & Parents
Ascendant [ILP]
s
1 LC alone 1/2 of the estate in
equal portions
2 1 LC, SS ½ ¼
3 LC, SS 1/2 in equal portions Same portion as 1

LC
4 LC, ILC ½ in equal portions 1/2 share of 1
LC (for reach
ILC)
5 1 LC, SS, ILC ½ 1/4 (preferred) 1/2 share of 1
LC (for each
child)
N.B. The share

of the ILC may
suffer reduction
pro rata
because spouse
is given
preference
6 2 or more LC, SS, ILC 1/2 in equal portions Same as share of 1/2 share of 1
1 LC LC (for each
child)
7 LP alone 1/2
8 LP, ILC ¼ in equal 1/2

portions
9 LP, SS ¼ 1/2
1 LP, SS, ILC 1/8 ¼ 1/2

0
11 ILC alone 1/2 in equal
portions
12 ILC, SS 1/3 1/3 in equal
portions
13 SS alone 1/2
*SS alone where

marriage is in
articulo mortis
and testator dies
within 3 months
from marriage –
1/3
But if they have

been living
together as
husband and wife
for more than 5
years – 1/2
PAGE 217
Legitimat
Surviving Relatives Legitimate Children Surviving Illegitimate e Parents Illegitimate
[LC] & Descendants Spouse [SS] Children [ILC] [LP] & Parents
Ascendant [ILP]
s
14 ILP alone 1/2
15 ILP, SS ¼ 1/4
16 Adopter, ILC, SS 1/3 1/3 1/3

(adopter)
Steps in Determining the Legitime of Compulsory or a brother or sister, is obliged to reserve such
Heirs property as he may have acquired by operation of
(1) Determine the gross value of the estate at the law for the benefit of relatives who are within the
time of the death of the testator. third degree and who belong to the line from which
(2) Determine all debts and charges which are said property came.
chargeable against the estate.
(3) Determine the net value of the estate by Concept of Reserva Troncal [Art. 891, CC]
deducting all the debts and charges from the (1) A descendant (prepositus) inherits or acquires
gross value of the estate. property from an ascendant (origin or mediate
(4) Collate or add the value of all donations inter source) by gratuitous title or from a brother or
vivos to the net value of the estate. sister
(5) Determine the amount of the legitime from the (2) The same property is inherited by another
total thus found. ascendant (reservista) or is otherwise acquired by
(6) Impute the value of all donations inter vivos made him by operation of law from the said descendant
to strangers against the disposable free portion (prepositus)
and restore it to the estate if the donation is (3) The said ascendant (reservista) must reserve the
inofficious. property for the benefit of the relatives of the
(7) Distribute the residue of the estate in accordance deceased descendant within the third civil degree
with the will of the testator. and who belong to the line from which the said
property came (reservatarios).
Remedy of a Compulsory Heir in case of Impairment
of Legitime Parties: [Balane (2010)]
Extent and Nature of Remedy (1) Origin or Mediate Source – either an ascendant of
Impairment any degree of ascent or a brother or sister of the
st
Total omission of a Annulment of institution Prepositus; responsible for the 1 transfer
compulsory heir who is a and reduction of legacies (2) Prepositus – the first transferee of the reserved
direct descendant or and devises [Art. 854, property
ascendant (preterition) CC] (3) Reservista – an ascendant of the Prepositus other
Testamentary Reduction of the than the Origin or Mediate Source; the one
dispositions impairing or disposition insofar as obligated to reserve the property
rd
diminishing the legitime they may be inofficious (4) Reservatarios – within the 3 degree of
or excessive [Art. 907, consanguinity from the Prepositus [Cabardo v.
CC] Villanueva (1922)] belonging to the line from
Partial impairment Completion of the which the property came
legitime [Art. 906, CC]
Impairment by Collation – reduction of Requisites for Reserva Troncal [Chua vs. CFI(1977)]
inofficious donations donations [Arts. 771 and (1) That the property was acquired by a descendant
911, CC] (Prepositus) from an ascendant or from a brother
or sister (Origin or Mediate Source) by gratuitous
RESERVA TRONCAL title,
Art. 891. The ascendant who inherits from his (2) That the Prepositus died without (legitimate*)
descendant any property which the latter may have issue,
acquired by gratuitous title from another ascendant, (3) That the property is inherited by another
ascendant (Reservista) by operation of law, and
PAGE 218
rd
(4) That there are relatives within the 3 degree Two Views
(Reservatarios) belonging to the line from which (1) Reserva Maxima: The entire property will be
said property came. considered acquired as legitime and therefore
wholly reservable
Note: Only legitimate descendants will prevent the (2) Reserva Minima: One half is reservable, the other
property from being inherited by the legitimate half is not subject to reserva troncal [Tolentino, p.
ascending line by operation of law [Balane] 284]
3 transmissions involved: [Balane (2010)] Extinguishment of the Reserva) (LDD-RRP)

st
(a) 1 transfer – by gratuitous title, from a person to (1) Loss of the reservable property
his descent, brother or sister (2) Death of the reservista
nd
(b) 2 transfer – by operation of law, from the (3) Death of all the relatives within the third degree
st
transferee in the 1 transfer to another ascendant. belonging to the line from which the property
This creates the reserve. came
rd
(c) 3 transfer – from the transferee in the second (4) Renunciation by the reservatarios
transfer to the relatives (5) Registration of the reservable property under the
Torrens system as free
Juridical Nature of Rights (6) Prescription, when the reservista holds the
Nature of the reservista’s right: [Balane citing Edroso v property adversely against the reservatarios, as
Sablan] free from reservation
(a) The reservista’s right over the reserved property is
one of ownership DISINHERITANCE
(b) The right of ownership is subject to a resolutory Definition of Disinheritance [Art. 915, CC]
condition, i.e. the existence of reservatarios at the (1) It is the act by which the testator
time (2) For just cause
(c) The right of ownership is alienable, but subject to (3) Deprives a compulsory heir of his right to the
the same resolutory condition. legitime.
(d) The reservista’s right of ownership is registrable.
Requisites of a Valid Disinheritance
Nature of reservatarios’ right: [Balane citing Sienes v (1) Heir disinherited must be designated by name or
Esparcia] in such a manner as to leave no room for doubt
(a) The reservatarios have a right of expectancy over as to who is intended to be disinherited.
the property. (2) It must be for a cause designated by law.
(b) The right is subject to a suspensive condition, i.e. (3) It must be made in a valid will.
the expectancy ripens into ownership if the (4) It must be made expressly, stating the cause in
reservatarios survive the reservistas. the will itself.
(c) The right is alienable but subject to the same (5) The cause must be certain and true, and must be
suspensive condition. proved by the interested heir if the person should
(d) The right is registrable. deny it.
(6) It must be unconditional.
Reserva Minima v. Reserva Maxima (7) It must be total.
(1) The prepositus acquired property gratuitously
from an ascendant, a brother or sister Disinheritance for cause
(2) In his will, he institutes as his heir his ascendant Disinheritance of children and descendants
(who is also a compulsory heir) such that the Article 919. The following shall be sufficient causes
ascendant receives half of the estate by operation for the disinheritance of children and descendants,
of law as legitime and the other half by legitimate as well as illegitimate:
testamentary disposition (1) When a child or descendant has been found
guilty of an attempt against the life of the
Problem: Will the property acquired gratuitiously by testator, his or her spouse, descendants, or
the prepositus from the source be treated as ascendants;
acquired by the ascendant-heir by operation of law (2) When a child or descendant has been convicted
(legitime) and therefore reservable or by of adultery or concubinage with the spouse of the
testamentary disposition? testator;
(3) When a child or descendant by fraud, violence,
intimidation, or undue influence causes the
PAGE 219
testator to make a will or to change one already testator to make a will or to change one already
made; made;
(4) A refusal without justifiable cause to support the (6) The loss of parental authority for causes specified
parent or ascendant who disinherits such child or in this Code;
descendant; (7) The refusal to support the children or
(5) Maltreatment of the testator by word or deed, by descendants without justifiable cause;
the child or descendant; (8) An attempt by one of the parents against the life
(6) When a child or descendant leads a dishonorable of the other, unless there has been a
or disgraceful life; reconciliation between them.
(7) Conviction of a crime which carries with it the
penalty of civil interdiction. Disinheritance of a spouse – [Article 921, CC]
Article 921. The following shall be sufficient causes
Disinheritance of parents and ascendants for disinheriting a spouse:
Article 920. The following shall be sufficient causes (1) When the spouse has been convicted of an
for the disinheritance of parents or ascendants, attempt against the life of the testator, his or her
whether legitimate or illegitimate: descendants, or ascendants;
(1) When the parents have abandoned their children (2) When the spouse has accused the testator of a
or induced their daughters to live a corrupt or crime for which the law prescribes imprisonment
immoral life, or attempted against their virtue; of six years or more, and the accusation has been
(2) When the parent or ascendant has been found to be false;
convicted of an attempt against the life of the (3) When the spouse by fraud, violence, intimidation,
testator, his or her spouse, descendants, or or undue influence cause the testator to make a
ascendants; will or to change one already made;
(3) When the parent or ascendant has accused the (4) When the spouse has given cause for legal
testator of a crime for which the law prescribes separation;
imprisonment for six years or more, if the (5) When the spouse has given grounds for the loss
accusation has been found to be false; of parental authority;
(4) When the parent or ascendant has been (6) Unjustifiable refusal to support the children or
convicted of adultery or concubinage with the the other spouse.
spouse of the testator;
(5) When the parent or ascendant by fraud, violence,
intimidation, or undue influence causes the
Summary of Causes of Disinheritance

[CC 919] [CC 920] [CC 921] [CC 1032]
Grounds for Disinheritance Children & Parents & Spouse Unworthi-
Descendants Ascendants ness
1 Guilty or Convicted of Attempt Against the
Life of the Testator, Spouse, Ascendant or * * * *
Descendant
2 Accused Testator or Decedent of Crime
Punishable by Imprisonment of 6 years or * * * *
more, and Found Groundless or False
3 Causes testator or decedent to Make a Will or
Change one by Fraud, Violence, Intimidation, * * * *
or Undue Influence
4 Unjustified Refusal to Support Testator * * *
5 Convicted of Adultery or Concubinage with
Spouse of Testator or Decedent * * *
6 Maltreatment of testator by Word and Deed *

7 Leading a Dishonorable or Disgraceful Life *
8 Conviction of Crime which carries the penalty *
of Civil Interdiction
PAGE 220
[CC 919] [CC 920] [CC 921] [CC 1032]

Grounds for Disinheritance Children & Parents & Spouse Unworthi-
Descendants Ascendants ness
9 Abandonment of Children or Inducing * *
Children to Live Corrupt and Immoral Life or
Against Attempted Virtue
10 Loss of Parental Authority * *
11 Attempt by One Parent Against the Life of the *
Other UNLESS there is Reconciliation
Between Parents
12 Spouse Has Given Cause for Legal Separation *
13 Failure to Report Violent Death of Decedent *

Within One Month UNLESS Authorities Have
Already Taken Action
14 Force, Violence, Intimidation, or Undue *
Influence to Prevent Another from Making a
Will or Revoking One Already Made or Who
Supplants or Alters the Latter’s Will
15 Falsifies or Forges Supposed Will of Decedent *
Reconciliation – [Art. 922] Disinheritance without cause – [Art. 918]

Art. 922. A subsequent reconciliation between the Art. 918. Disinheritance without a specification of the
offender and the offended person deprives the latter cause, or for a cause the truth of which, if
of the right to disinherit, and renders ineffectual any contradicted, is not proved, or which is not one of
disinheritance that may have been made. those set forth in this Code, shall annul the
institution of heirs insofar as it may prejudice the
Rights of descendants of person disinherited – [Art. person disinherited; but the devises and legacies and
923] other testamentary dispositions shall be valid to
Art. 923. The children and descendants of the person such extent as will not impair the legitime.
disinherited shall take his or her place and shall
preserve the rights of compulsory heirs with respect Ineffective Disinheritance – if the disinheritance lacks
to the legitime; but the disinherited parent shall not one or other of the requisites mentioned in this
have the usufruct or administration of the property article, the heir in question gets his legitime. [Balane
which constitutes the legitime. (2010)]
Balane: This is inconsistent with Art. 1033. In

disinheritance, reconciliation is sufficient. It need not Ineffective Disinheritance Preterition
be in writing. In unworthiness, however, it needs to Person disinherited may Person omitted must
be in writing. be any compulsory heir be a compulsory heir in
the direct line
Revocation Only annuls the Annuls the entire
Modes of Revocation. – institution in so far as it institution of heirs
(1) Reconciliation [Art 922, CC] prejudices the person
(2) Subsequent institution of the disinherited heir disinherited
(3) Nullity of the will which contains the
disinheritance. Legacies and Devisees
Note: The moment that testator uses one of the acts Legacy Devise
of unworthiness as a cause for disinheritance; he
thereby submits it to the rules on disinheritance. A gift of personal property A gift of real property
Thus, reconciliation renders the disinheritance given in a will given in a will
ineffective. It is bequeathed It is devised
PAGE 221
Persons Charged With the Duty to Give Legacies and

Devises in a Will Status of property given by Effect on the
(1) Compulsory heir, provided, their legitimes are not legacy/devise legacy/devise
impaired (Art. 925, CC) encumbrance or interest of the interest or
(2) Voluntary heir another person (Art. 932, CC) encumbrance
(3) Legatee or devisee can be charged with the duty of Legatee or devisee Ineffective
giving a sub-legacy or sub-devisee but only to the subsequently alienates the
extent of the value of the legacy or devise given thing (Art. 933,CC)
him (Art. 925, CC)
After alienating the thing, the Ineffective
(4) The estate represented by the executor or
legatee or devisee
administrator, if no one is charged with this duty
subsequently reacquires it
to pay or deliver the legacy or devise in the will
gratuitously (Art. 933, CC)
(a) If there is an administration proceeding, it
constitutes a charge upon the estate.
(b) If there is no administration proceeding, it is a
charge upon the heirs.
Status of property given by Effect on the
Validity and Effect of Legacy or Devise
legacy/devise legacy/devise
Legacy or devise of a thing belonging to another [Art.
930, CC] After alienating the thing, the Legatee or
legatee or devisee acquires it devisee can
by onerous title (Art. 933, CC) demand
Status of property given by Effect on the reimbursement
legacy/devise legacy/devise from the heir or
estate
Testator erroneously believed Void
that the property belonged to
him Different Objects of Legacies and Devises (Art. 934-
The thing bequeathed Effective 944, CC)
afterwards becomes his by (1) Legacy of a thing pledged or mortgaged to
whatever title secure a debt [Art 934, CC]
(2) Legacy of credit, or remission or release of a debt
Legacy or devise of thing already belonging to the [Art 935 CC]
legatee or devisee (3) Legacy to the debtor of thing pledged by him [Art
936, CC]
(4) Legacy or devise to a creditor if the testator
Status of property given by Effect on the orders the payment of a debt [Art 939, CC]
legacy/devise legacy/devise (5) Alternative legacies and devises [Art 940, CC]
(6) Legacy of generic personal property or
The thing already belongs to Ineffective indeterminate real property [Art 941, CC]
the legatee or devisee at the
(7) Legacy of education [Art 944, CC]
time of the execution of the will
(8) Legacy of support [Art 944, CC]
(Art. 932, CC)
The thing is subject to an Valid only as to
Objects of Legacy or Devise Effect

Thing pledged or mortgaged (a) Estate is obliged to pay the debt
to secure a debt (b) Other charges pass to the legatee or devisee
Credit or remission or release (a) Effective only as regards the credit or debt existing at the time of the testator’s death
of a debt (b) Legacy lapses if the testator later brings action against the debtor
(c) If generic, comprises all credits/debts existing at time of execution of will
Thing pledged by debtor Only the pledge is extinguished; the debt remains
To a creditor Shall not be applied to his credit unless the testator so declares
Order of payment of a debt (a) If testator does not really owe the debt, the disposition is void
PAGE 222
Objects of Legacy or Devise Effect

(b) If the order is to pay more that the debt, the excess is not due
(c) This is without prejudice to the payment of natural obligations
Alternative legacies and (a) The choice is with the heir, or the executor or administrator
devises (b) If the heir, legatee or devisee dies the right passes to their heirs
(c) Once made, the choice is irrevocable
Legacy of generic personal (a) Legacy is valid even if there are no things of the same kind in the estate
property or indeterminate (b) Devise of indeterminate real property valid only if there are immovable property of
real property the same kind in the estate
(c) The choice belongs to the heir, legatee or devisee or the executor or administrator
Legacy of education (a) Lasts until the legatee is of age or beyond the age of majority in order that he may
finish some professional, vocational or general course provided he pursues his course
diligently
(b) If testator did not fix the amount, it is fixed in accordance with the social standing
and circumstances of the legatee and the value of the estate
Legacy of support (a) Lasts during lifetime of legatee
(b) If the testator used to give the legatee a sum of money for support, give the same
amount unless it is markedly disproportionate to the estate
(c) If testator did not fix the amount, it is fixed in accordance with the social standing
and circumstances of the legatee and the value of the estate
Order of Payment in Case the Estate Is Not Sufficient to Cover All the Legacies and Devises
ART. 911 ART. 950
Order of Preference
LIPO RPSESO
(a) Legitime of compulsory heirs (a) Remuneratory legacy/devise
(b) Donations Inter vivos (b) Preferential legacy/devise
(c) Preferential legacies or devises (c) Legacy for Support
(d) All Other legacies or devises pro rata (d) Legacy for Education
(e) Legacy/devise of Specific, determinate thing which forms
a part of the estate
(f) All Others pro rata
Application
(a) When the reduction is necessary to preserve the (a) When there are no compulsory heirs and the entire estate
legitime of compulsory heirs from impairment whether is distributed by the testator as legacies or devises; or
there are donations inter vivos or not; or (b) When there are compulsory heirs but their legitime has
(b) When, although, the legitime has been preserved by already been provided for by the testator and there are
the testator himself there are donations inter vivos. no donations inter vivos.
NOTE: Art. 911, CC governs when there is a conflict Note: Art. 950, CC governs when the question of reduction is
between compulsory heirs and the devisees and legatees. exclusively among legatees and devisees themselves.
How Legacy or Devise Delivered [Art. 951, CC] Effect of ineffective legacies or devises [Art. 956, CC]
(1) The very thing bequeathed shall be delivered and In case of repudiation, revocation or incapacity of the
not its value legatee or devisee, the legacy or devise shall
(2) With all its accessions and accessories bemerged with the mass of the hereditary estate,
(3) In the condition in which it may be upon the death except in cases of substitution or accretion.
of the testator
(4) Legacies of money must be paid in cash Ground for Revocation of Legacies and Devises [Art.
957, CC] - (TALO)
(1) Testator Transforms the thing such that it does
not retain its original form or denomination
PAGE 223
(2) Testator Alienates the thing by any title or for any (c) The right of Accretion applies to the free portion
cause. Reacquisition of the thing by the testator when the requisites in Art. 1016 are present.
does not make the legacy or devise valid, unless it is (d) If there is no substitute, and the right of
effected by right of repurchase. Representation or Accretion are not proper, the
(3) Thing is totally Lost during the lifetime or after rules on Intestate succession shall apply.
the death of the testator
(4) Other causes: nullity of will, non-compliance with THE INTESTATE OR LEGAL HEIRS
suspensive condition, sale of the thing to pay the (1) Relatives
debts of the deceased during the settlement of (a) Legitimate ascendants
his estate. (b) Illegitimate parents
(c) Legitimate children
(d) Illegitimate children
(e) Surviving Spouse
Legal or Intestate Succession (f) Brothers, sisters, nephews and nieces (BSNN)
(g) Other collateral relatives
(2) Surviving spouse
GENERAL PROVISIONS (3) State (through escheat proceedings)
Intestacy – that which takes place by operation of law
in default of compulsory and testamentary Intestate succession is based on the presumed will of
succession. Not defined in the Civil Code. the decedent. That is, to distribute the estate in
accordance with the love and affection he has for his
INSTANCES WHEN LEGAL OR INTESTATE SUCCESSION family, and in default of these persons, the presumed
OPERATES: [ART. 960, CC] desire to promote charitable and humanitarian
(1) If a person dies without a will, or with a void will, activities [Balane].
or one which has subsequently lost its validity
(2) When the will does not institute an heir FUNDAMENTAL PRINCIPLES IN INTESTATE SUCCESSION:
(3) Upon the expiration of term, or period of Rule of Preference between Lines
institution of heir [Balane, 426] (a) Those in the direct descending line shall exclude
(4) Upon fulfillment of a resolutory condition those in the direct ascending and collateral lines;
attached to the institution of heir, rendering the (b) Those in the direct ascending line shall, in turn,
will ineffective [Balane, 426] exclude those in the collateral line.
(5) When the will does not dispose of all the property
belonging to the testator. Legal succession shall Rule of Proximity
take place only with respect to the property which The relative nearest in degree excludes the farther
the testator has not disposed (mixed succession) one. [Art. 962[1], CC], saving the right of
(6) If the suspensive condition attached to the representation when it properly takes place.
institution of the heir does not happen or is not
fulfilled Rule of Equal Division
(7) If the heir dies before the testator The relatives who are in the same degree shall
(8) If the heir repudiates the inheritance, there being inherit in equal shares. [Arts. 962[2], 987 and 1006,
no substitution, and no right of accretion takes CC]
place
(9) When the heir instituted is incapable of Exceptions: [Balane, 427-428]
succeeding, except in cases provided in the Civil (a) Rule of preference between Lines
Code (b) Distinction between legitimate and illegitimate
(10) Preterition – Intestacy may be total or partial filiation. The ratio under present law is 2:1. [Art
depending on whether or not there are legacies 983, in relation to Article 895 as amended by
or devises [Balane, 426] Article. 176, FC]
(c) Rule of division by line in the ascending line [Art.
Note: In all cases where there has been an institution 987 [2], CC]
of heirs, follow the ISRAI order: (d) Distinction between full-blood and half-blood
(a) If the Institution fails, Substitution occurs. relationship among brothers and sisters, as well
(b) If there is no substitute, the right of as nephews and nieces. [Art. 1006 and 1008, CC]
Representation applies in the direct descending (e) Right of representation.
line to the legitime if the vacancy is caused by
predecease, incapacity, or disinheritance.
PAGE 224
Rule of Barrier between the legitimate family and the Blood relationship is either full or half-blood. [Art.
illegitimate family (the iron-curtain rule) 967, CC]
The illegitimate family cannot inherit by intestate
succession from the legitimate family and vice-versa. Note: As among brothers and sisters and nephews
[Art. 992, CC] and nieces, there is a 2:1 ratio for full-blood and half-
blood relatives. Direct relatives are preferred. But
Rule of Double Share for full blood collaterals this distinction does not apply with respect to other
When full and half-blood brothers or sisters, collateral relatives.
nephews or nieces, survive, the full blood shall take a
portion in the inheritance double that of the half- INCAPACITY [ART. 968, CC]
blood. [Arts. 895 and 983, CC] General Rule: If there are several relatives of the
same degree, and one or some of them are unwilling
Note: or incapacitated to succeed, his portion shall accrue
(1) If one of the legitimate ascendants, illegitimate to the others of the same degree.
parents, legitimate children or illegitimate
children survives, the brother, sisters, nephews, Exception: When the right of representation should
and nieces (BSNN) are excluded. take place.
(2) If one of the legitimate ascendants, illegitimate
parents, legitimate children, illegitimate children Note: This accretion in intestacy takes place in case
or surviving spouse survives, the other collateral of predecease, incapacity, or renunciation among
relatives and the state are excluded. heirs of the same degree. The relatives must be in
(3) If any of the heirs concur in legitimes, then they the same relationship because of the Rule of
also concur in intestacy. Preference of Lines.
RELATIONSHIP REPUDIATION [ARTS. 968-969, CC]

BASIC CONCEPTS IN RELATIONSHIP (a) There is no right of representation in repudiation.
The number of generations determines the proximity If the nearest relative/s repudiates the
of the relationship. Each generation forms one inheritance, those of the following degree shall
degree. [Art 963, CC] inherit in their own right.
(b) In case of repudiation by all in the same degree,
A series of degrees forms a line. This line may either the right of succession passes on the heirs in
by direct or collateral. [Art. 964, CC] succeeding degrees: descending line first,
(a) A direct line is that constituted by the series of ascending line next, and collateral line next.
degrees among ascendants and descendants. [Balane]
(b) The direct line is either ascending (brings a
person with those from whom he descends) and ADOPTION [ART. 189, FC]
descending (connecting the head of the family In adoption, the legal filiation is personal and exists
with those who descend from him). [Art. 965, CC] only between the adopter and the adopted. The
(c) A collateral line is that constituted by the series of adopted is deemed a legitimate child of the adopter,
degrees among persons who are not ascendants but still remains as an intestate heir of his natural
or descendants, but who come from a common parents and other blood relatives.
ancestor.
RIGHT OF REPRESENTATION
Note: It is important to distinguish between direct Representation – right created by fiction of law, by
and collateral as the direct has preference over the virtue of which the representative is raised to the
collateral. place and the degree of the person represented, and
acquires the rights which the latter would have if he
In a line, as many degrees are counted as there are were living or if he could have inherited (Art. 970, CC)
generations. [Art. 966, CC]
(a) In the direct line, ascent is made up to the EFFECT OF REPRESENTATION
common ancestor or progenitor. The representative heir acquires the rights which the
(b) In the collateral line, ascent is made to the represented would have if he were living or if he
common ancestor. Then descent to the person could have inherited.
with whom the computation is to be made.
Note: Descending line is preferred over ascending.
PAGE 225
WHEN IT OCCURS must be a legal heir of both the person he is

(a) Representation is allowed with respect to representing and the decedent. [Art. 973, CC]
inheritance conferred by law (legitime and (b) BUT the representative need not be qualified to
intestate based on Art. 923) succeed the person represented. [Art. 971, CC] In
(b) It occurs only in the following instances: the same manner, the person represented need
(1) predecease of an heir not be qualified to succeed the decedent, as it is
(2) incapacity or unworthiness his disqualification which gives rise for
(3) disinheritance [Art. 923, CC] representation to apply.
(c) There is no representation in testamentary (c) Implication: Illegitimate children can represent
succession. [Art 856, CC] illegitimate parents in inheritance from
(d) There is no representation in repudiation. illegitimate grandparents. (Rationale: Iron-curtain
rule under Art. 992, CC)
A renouncer can represent, but cannot be (d) On the other hand, a legitimate child may
represented. Rationale is found in Art. 971 which represent either a legitimate or illegitimate
states that “The representative does not succeed the parent in the inheritance of either a legitimate or
person represented but the one whom the person illegitimate grandparents. [Arts. 902, 989 and
represented would have succeeded.” 990, CC]
REPRESENTATION IN THE DIRECT DESCENDING LINE REPRESENTATION IN ADOPTION

Representation takes place ad infinitum in the direct If the adopting parent should die before the adopted
descending line but never in the direct ascending line. child, the latter cannot represent the former in the
[Art. 972, CC] inheritance of the parents or ascendants of the
adopter. The adopted child is not related to the
General Rule: Grandchildren inherit from the deceased in that case, because filiation created by
grandparents by right of representation, if proper. fiction of law is exclusively between the adopter and
the adopted. [Tolentino, 448-449]
Exception: Whenever all the children repudiate, the
grandchildren inherit in their own right because ORDER OF CONCURRENCE IN THE CASE OF AN ADOPTED
representation is not proper. [Art. 969, CC] CHILD (ART. 190, FC)
REPRESENTATION IN COLLATERAL LINE Survivors Share

(a) In the collateral line, representation takes place
LC, ILC, SS As in the case of ordinary
only in favor of the children of the brothers or
intestate succession
sisters (i.e., nephews and nieces) whether of the
LP/ILP, or legitimate ½
full or half-blood [Art. 972, CC] and only if they
ascendants
concur with at least one uncle or aunt. In this
Adopter ½
case, they share in the inheritance per stirpes.
(b) If the children survive alone, they inherit in their SS/ILC ½
own right and share in equal proportions or per Adopters ½
capita. [Art. 975, CC] LP or ascendants ½
(c) Right of representation in the collateral line is Adopter
only possible in INTESTATE succession. It cannot ILC or descendants ½
take place in testamentary succession. Adopters 1/3
SS 1/3
PER STIRPES ILC 1/3
(a) Inheritance per stirpes means that the Adopter alone Entire estate
representative/s shall receive only what the Collateral blood relatives As in the case of ordinary
person represented would have received, if he alone intestate succession
were living or could inherit. [Art.975, CC]
(b) If there are more than one representative in the
same degree, then it shall be divided equally,
without prejudice to the distinction between
legitimate and illegitimate, if applicable.
THE DOUBLE HEIRSHIP TEST

(a) In determining whether or not representation is
proper, it is necessary that the representative
PAGE 226
ORDER OF INTESTATE SUCCESSION
Decedent is a Legitimate Child Decedent is an Illegitimate Child Decedent is an Adopted Child

1 Legitimate children or Legitimate children or Legitimate children or
descendants (LCD) descendants (LCD) descendants (LCD)
2 Legitimate parents or ascendants Illegitimate children or Illegitimate children or
(LPA) descendants (LPA) descendants (ICD)
3 Illegitimate children or Illegitimate parents (IP) Legitimate or illegitimate parents,
descendants (ICD) or legitimate ascendants, adoptive
parents
4 Surviving spouse (SS) Surviving spouse (SS) Surviving spouse (SS)
5 Brothers and sisters, Illegitimate brothers and sisters, Brothers and sisters, nephews,
nephews, nieces (BS/NN) nephews, nieces (IBS/NN) nieces (BS/NN)
6 Legitimate collateral relatives State State

th
within the 5 degree (C5)
7 State
RULES OF EXCLUSION AND CONCURRENCE IN INTESTATE SHARES
Intestate Heirs Excludes Excluded By Concurs With

LC + LD Ascendants, No one SS + ILC
Collaterals and
State
ILC + D ILP, No one SS, LC, LP
Collaterals and
State
LP + LA Collaterals and LC ILC + SS
State
ILP Collaterals and LC and ILC SS
State
SS Collaterals other than No one LC, ILC, LP, ILP
siblings, nephews and Siblings
nieces, State Nephews
Nieces
Siblings, All other collaterals and LC, ILC, LP, ILP SS
Nephews State
Nieces
th
Other collaterals within 5 Collateral more remote in LC, ILC, LP, ILP and Collaterals in the same
degree degree and SS degree
State
State No one Everyone No one
OUTLINE OF INTESTATE SHARES Legitimate children and surviving spouse

Legitimate children only (a) Divide entire estate equally between the
(a) Divide entire estate equally among all legitimate legitimate children and the surviving spouse, the
children [Art. 979, CC] latter deemed as one child. The same rule holds
(b) Legitimate children include an adopted child. where there is only one child.
(b) “Children” as used in Art. 996 is interpreted to
Legitimate children and Illegitimate children include a situation where there is only one child.
Divide entire estate such that each illegitimate child
gets ½ of what a legitimate child gets [Art. 983, CC
and Art. 176, FC]
PAGE 227
Legitimate children. Surviving spouse, and the other relatives should be “illegitimate” because
Illegitimate children of the iron-curtain rule. [Art. 994, CC]
Divide the entire estate such that the surviving
spouse is deemed one legitimate child and each Illegitimate parents only
illegitimate child getting ½ of what the legitimate Entire estate goes to the illegitimate parents. [Art
child gets. [Art. 996, CC and Art. 176, FC] 993, CC]
Legitimate parents only Illegitimate parents and children of any kind (whether
Divide the entire estate equally. [Art. 985, CC] legitimate or illegitimate child)
Illegitimate parents are excluded and do not inherit;
Legitimate ascendants only (excluding parents) For the rule on the respective shares of the children,
Divide the entire estate equally but with the see numbers 1, 2 or 10, whichever is applicable.
observance of the rule of division by line. [Art. 987,
CC] Legitimate brothers and sisters only
Divide the entire estate such that full-blood
Legitimate parents and illegitimate children brothers/sisters gets a share double the amount of a
Legitimate parents get ½ of the estate, illegitimate half-blood brother or sister. [Art. 1004 and 1006, CC]
children get the other ½. [Art. 991, CC]
Legitimate brothers and sisters, nephews and nieces
Legitimate parents and surviving spouse Divide the entire estate observing the 2 is to 1 ratio
Legitimate parents get ½ of the estate; The surviving for full and half-blood relationships with respect to
spouse gets the other ½. [Art. 997,CC] the brothers and sisters, with the nephews and
nieces inheriting by representation, if proper. [Art.
Legitimate parents, surviving spouse and illegitimate 1005 & 1008, CC]
children
Legitimate parents get ½ of the estate; surviving Nephews and nieces only
spouse and the illegitimate child each get ¼ each, Divide the entire estate per capita, observing the 2 is
the latter to share among themselves if more than to 1 ratio. [Arts. 975 and 1008, CC]
one. [Art. 1000, CC]
Other collaterals (Arts. 1009 and 1010)
Illegitimate children only (a) Divide entire estate per capita.
th
Divide the entire estate equally. [Art. 988, CC] (b) Collateral relatives must be with the 5 degree of
consanguinity.
Illegitimate children and surviving spouse
Illegitimate children get ½ of the estate; the Note: the nearer relative excludes the more remote
surviving spouse gets the other ½. [Art. 998, CC] relatives.
Surviving spouse only State

Entire estate goes to the surviving spouse. [Art. If there are no other intestate heirs, the State inherits
994/995, CC] the entire estate through escheat proceedings. [Art.
1011, CC]
Surviving spouse and illegitimate parents
Illegitimate parents get ½ and the spouse gets the
other ½. [by analogy with Art. 997, CC]
Surviving spouse and legitimate brothers and sisters, Provisions Common to estate
nephews and nieces
Surviving spouse gets ½ of the estate, while the rest
and Intestate Succession
gets the other ½ with the nephews and nieces
inheriting by representation if proper. [Art. 1001, CC] RIGHT OF ACCRETION
Surviving spouse and illegitimate brothers and sisters, DEFINITION AND REQUISITES – [ARTS. 1015-1016]
nephews and nieces Definition of Accretion [Art. 1015, CC]
Surviving spouse gets ½ of the estate while the rest It is a right by virtue of which, when two or more
gets the other ½ with the nephews and nieces persons are called to the same inheritance, devise or
inheriting by representation, if proper; Note that all legacy, the part assigned to one who renounces or
cannot receive his share or who died before the
PAGE 228
testator is added or incorporated to that of his co- Cause Of Testamentary Succession Intestate
heirs, co-devisees, or co-legatees. Vacancy Legitime Free Portion Succession
Successio n Succession
Requisites [Tolentino p. 497-499]: n
(1) Unity of object and plurality of subjects (two or
more persons are called to the same inheritance Incapacity Represent Accretion Representa
or same portion thereof) -ation Intestate -
(2) Vacancy of share (one of the heirs dies before the Intestate Succession tion
testator, or renounces the inheritance, or is Successio Intestate
incapacitated) n Succession
(a) Accretion happens when there is repudiation, Disinheritan Represent - -

incapacity, or predecease of an heir. ce -ation
(b) It is the mechanism where the share of an heir is Intestate
increased by vacant shares vacated by heirs who Successio
cannot inherit for various reasons. (RATIONALE: n
the decedent intended to give the property to Repudiation Intestate Accretion Accretion
nobody but the co-heirs.) Successio
(c) There can only be accretion if there is an n
institution of heirs with respect to specific
properties. [Art 1016, CC] CAPACITY TO SUCCEED BY WILL OR INTESTACY
(d) Among compulsory heirs, there can only be PERSONS INCAPABLE OF SUCEEDING
accretion with respect to the free portion. There Requisites for Capacity to Succeed by Will or by
can be no accretion with respect to the legitimes. Intestacy [Art. 1024 – 1025, CC]
[Arts. 1021 and 1018, CC] (a) The heir, legatee or devisee must be living or in
(e) The heirs to whom the portion goes by the right existence at the moment the succession opens;
of accretion take it in the same proportion that (Art 1025) and
they inherit. [Art. 1019, CC] (b) He must not be incapacitated or disqualified by
law to succeed. (Art 1024, par.1)
Exceptions [Balane]:
(1) In testamentary succession, if the testator PERSONS INCAPABLE OF SUCCEEDING – ARTS. 1027, 739,
provides otherwise 1032
(2) If the obligation is purely personal, and hence Based on Undue Influence or Interest [Art. 1027, CC]
intransmissible (PIGRAP)
(a) Priest who heard the last confession of the
(a) The heirs to whom the inheritance accrues shall testator during his last illness, or the minister of
succeed to all the rights and obligations which the gospel who extended spiritual aid to him
the heir who renounced or could not receive it during the same period;
would have had. [Art. 1020, CC] (b) Individuals, associations and corporations not
(b) In testamentary succession, when the right of permitted by law to inherit;
accretion does not take place, the vacant portion (c) Guardian with respect to testamentary
of the instituted heirs, if no substitute has been dispositions given by a ward in his favor before
designated, shall pass to the legal heirs of the the final accounts of the guardianship have been
testator, who shall receive it with the same approved, even if the testator should die after the
charges and obligations. [Art 1022, CC] approval thereof; except if the guardian is his
(c) Accretion shall also take place among devisees, ascendant, descendant, brother, sister, or spouse;
legatees and usufructuaries under the same (d) Relatives of the priest or minister of the gospel
conditions established for heirs. [Art 1023, CC] within the fourth degree, the church, order,
chapter, community, organization, or institution
EFFECT OF PREDECEASE, INCAPACITY, DISINHERITANCE OR to which such priest or minister may belong;
REPUDIATION IN TESTAMENTARY AND INTESTATE (e) Attesting witness to the execution of a will, the
SUCCESSION spouse, parents, or children, or any one claiming
Cause Of Testamentary Succession Intestate under such witness, spouse, parents, or children;
Vacancy Legitime Free Portion Succession (f) Physician, surgeon, nurse, health officer or
Predecease Represent Accretion Represent- druggist who took care of the testator during his
-ation Intestate ation last illness.
Intestate Successio Intestate
PAGE 229
testator revokes the will

or the institution
Based on Morality or Public Policy [Arts. 739 and 1028, Unworthiness vs. Disinheritance
CC] (CAP) Unworthiness renders a Disinheritance is the act
(1) Those made in favor of a person with whom the person incapable of by which a testator, for
testator was guilty of adultery or concubinage at succeeding to the just cause, deprives a
the time of the making of the will. succession, whether compulsory heir of his
(2) Those made in consideration of a crime of which testate or intestate right to the legitime [Art.
both the testator and the beneficiary have been 815, CC]
found guilty.
(3) Those made in favor of a public officer or his Determination of Capacity [Tolentino p. 539]
spouse, descendants and ascendants, by reason
of his public office. General Rule: At the death of the decedent [Art. 1034,
CC]
Based on Acts of Unworthiness (Art. 1032, Cc)
(A3F3P2) Exceptions:
The following are incapable of succeeding by reason (1) Those falling under 2, 3, and 5 of Art. 1032 – when
of unworthiness: the final judgment is rendered
(1) Parents who have abandoned their children or (2) Those falling under 4 of Art. 1032 – when the
induced their daughters to lead a corrupt or month allowed for the report expired
immoral life, or attempted against their virtue; (3) If the institution is conditional – when the
(2) Any person who has been convicted of an condition is complied with
attempt against the life of the testator, his or her
spouse, descendants, or ascendants; ACCEPTANCE AND REPUDIATION OF THE
(3) Any person who has accused the testator of a INHERITANCE
crime for which the law prescribes imprisonment CHARACTERISTICS (VIR) (ARTS. 1041 – 1042, 1056, CC)
for six years or more, if the accusation has been (1) Voluntary and free [Art 1041, CC]
found groundless; (2) Irrevocable except if there is vitiation of consent
(4) Any heir of full age who, having knowledge of the or an unknown will appears [Art 1056, CC]
violent death of the testator, should fail to report (3) Retroactive [Art 1042, CC]
it to an officer of the law within a month, unless
the authorities have already taken action; this REQUISITES (ART. 1043, CC)
prohibition shall not apply to cases wherein, (1) Certainty of death of the decedent
according to law, there is no obligation to make (2) Certainty of the right to the inheritance
an accusation;
(5) Any person convicted of adultery or concubinage ACCEPTANCE VS. REPUDIATION
with the spouse of the testator;
(6) Any person who by fraud, violence, intimidation, Acceptance Repudiation
or undue influence should cause the testator to
make a will or to change one already made; Involves the confirmation (a) Renders the
(7) Any person who by the same means prevents of transmission of transmission of
another from making a will, or from revoking one successional rights successional rights
already made, or who supplants, conceals, or ineffective
alters the latter's will; (b) Equivalent to an act
(8) Any person who falsifies or forges a supposed will of disposition or
of the decedent. alienation
(c) Publicity
Pardon of Acts of Unworthiness requirement is
necessary for the
Express Implied protection of other
heirs and creditors
Made by the execution of Effected when the
a document or any testator makes a will Forms of Acceptance [Arts. 1049 – 1050, CC]
writing in which the instituting the unworthy (1) Express Acceptance – one made in a public or
decedent condones the heir with knowledge of private document. [Art. 1049 par. 1]
cause of incapacity the cause of incapacity (2) Tacit Acceptance – one resulting from acts by
Cannot be revoked Revoked when the which the intention to accept is necessarily
PAGE 230
implied or from acts which one would have no (b) Imputing or Charging – crediting the donation as
right to do except in the capacity of an heir. an advance on the legitime (if the donee is a
(3) Implied acceptance - Within thirty days after the compulsory heir) or on the free portion (if the
court has issued an order for the distribution of donee is a stranger). [Balane p 522]
the estate in accordance with the Rules of Court, (c) Reduction – determining to what extent the
the heirs, devisees and legatees shall signify to donation will remain and to what extent it is
the court having jurisdiction whether they accept excessive or inofficious.
or repudiate the inheritance; if they do not do so (d) Restitution – returning or the act of payment of
within that time, they are deemed to have the excess to the mass of hereditary estate.
accepted the inheritance. [Art 1057, CC]
PERSONS OBLIGED TO COLLATE
Forms of Repudiation [Art. 1051, CC] General Rule: Compulsory heirs
(1) in a public instrument acknowledged before a Exceptions:
notary public; or (a) when the testator should have so expressly
(2) in an authentic document – equivalent of an provided [Art. 1062, CC]
indubitable writing or a writing whose (b) when the compulsory heir should have
authenticity is admitted or proved; or repudiated his inheritance [Art 1062, CC]
(3) by petition presented to the court having
jurisdiction over the testamentary or intestate Grandchildren who survive with their uncles, aunts,
proceeding or first cousins and inherit by right of representation
[Art 1064, CC]
Heirs in Two Capacities [Art. 1055, CC]
(1) If a person is called to the same inheritance as an Note: Grandchildren may inherit from their
heir by will and by law and he repudiates the grandparents in their own right, i.e., as heirs next in
inheritance in his capacity as a testamentary heir, degree, and not by right of representation if their
he will be considered to have also repudiated the parent repudiates the inheritance of the
inheritance as a legal heir. grandparent, as no living person can be represented
(2) If he repudiates it as a legal heir, without his except in cases of disinheritance and incapacity. In
being a testamentary heir, he may still accept it in this case, the grandchildren are not obliged to bring
the latter capacity. to collation what their parent has received
gratuitously from their grandparent.
COLLATION
CONCEPT OF COLLATION
Surviving spouse NOT obliged to collate.
(a) To collate is to bring back or to return to the
WHAT TO COLLATE
hereditary mass in fact or by fiction property
which came from the estate of the decedent, (a) Any property or right received by gratuitous title
during his lifetime by donation or other during the testator’s lifetime [Art 1061, CC]
gratuitous title but which the law considers as (b) All that they may have received from the
an advance from the inheritance. (Art 1061, CC) decedent during his lifetime. [Art 1061, CC]
(b) It is the act by virtue of which, the compulsory (c) Expenses incurred by the parents in giving their
heir who concurs with other compulsory heirs in children a professional, vocational or other career
the inheritance bring back to the common shall not be brought to collation unless the
hereditary mass the property which they may parents so provide, or unless they impair the
have received from the testator so that a division legitime; but when their collation is required, the
may be effected according to law and the will of sum which the child would have spent if he had
the testator. lived in the house and company of his parents
(c) In reducing inofficious donations, the last to be shall be deducted therefrom. [Art 1068, CC]
donated should be the first to be reduced. (d) Any sums paid by a parent in satisfaction of the
(d) Rationale for collation: If donations inter vivos will debts of his children, election expenses, fines, and
not be collated, then the rule on legitimes shall similar expenses shall be brought to collation.
be circumvented or disregarded. [Art 1069, CC]
OPERATIONS RELATED TO COLLATION

Note: Only the value of the thing donated shall be
(a) Collation – adding to the mass of the hereditary brought to collation.
estate the value of the donation or gratuitous
disposition. PROPERTIES NOT SUBJECT TO COLLATION
Absolutely no collation
PAGE 231
Expenses for support, education (only elementary (a) Judicial – Partition done by Court pursuant to an
and secondary), medical attendance, even in Order of Distribution which may or may not be
extraordinary illness, apprenticeship, ordinary based on a project of partition.
equipment, or customary gifts [Art. 1067, CC] (b) Extra-judicial – partition made by the decedent
himself by an act inter vivos or by will or by a third
Generally not imputable to legitime/ cannot be person entrusted by the decedent or by the heirs
collected, subject to exceptions themselves. [Paras]
(a) Expenses incurred by parents in giving their
children professional, vocational or other career PARTITION INTER VIVOS (ASKED IN ‘85)
unless the parents so provide, or unless they It is one that merely allocates specific items or pieces
impair the legitime. [Art. 1067, CC] of property on the basis of the pro-indiviso shares
(b) Wedding gifts by parents and ascendants, fixed by law or given under the will to heirs or
consisting jewelry, clothing and outfit, except successors. (Art. 1080, cc)
when they exceed 1/10 of the sum disposable by
will. [Art. 1070, CC] Who may effect partition
(c) Neither shall donations to the spouse of the child (1) The Decedent, during his lifetime by an act inter
be brought to collation; but if they have been vivos or by will [Art.1080, CC]
given by the parent to the spouses jointly, the (2) The decedent’s heirs [Art.1083, CC]
child shall be obliged to bring to collation one- (3) A competent court [Art. 1083,CC]
half of the thing donated. [Art. 1066, CC] (4) A third person not an heir designated by the
decedent [Art.1081, CC]
Note: Parents are not obliged to bring to collation in
the inheritance of their ascendants any property Who Can Demand Partition
which may have been donated by the latter to their (1) Compulsory heir
children. [Art 1065, CC] (2) Voluntary heir upon fulfillment of condition if any
[Art 1084, CC]
PARTITION AND DISTRIBUTION OF ESTATE (3) Legatee or devisee
PARTITION (4) Any person who has acquired interest in the
Concept estate
(a) Separate, Divide, Assign. Partition is the
separation, division and assignment of a thing When Partition Cannot Be Demanded
held in common among those to whom it may (1) When expressly Prohibited by the testator for a
belong. The thing itself or its value may be period not exceeding 20 years [Art 1083, CC]
divided. [Art. 1079, CC] (2) When the co-heirs Agreed that the estate shall
(b) Owned in common. Before partition, the whole not be divided for a period not exceeding 10
estate of the decedent is owned in common by years, renewable for another 10 years
the heirs. [Art 1078, CC] (3) When Prohibited by law
(c) Thing or value may be divided. [Art 1079] (4) When to partition the estate would render it
(d) Acts deemed partition. Every act which is intended unserviceable for the use for which it is intended
to put an end to indivision among heirs and
legatees or devisees is deemed a parition, Prohibition To Partition
although it should purport to be a sale, an (1) The prohibition to partition for a period not
exchange, a compromise, or any other exceeding 20 years can be imposed on the
transaction. [Art 1082, CC] legitime.
(2) If the prohibition to the partition is for more than
A void partition may be valid if: 20 years, the excess is void.
(1) the will was in fact a partition (3) Even if a prohibition is imposed, the heirs by
(2) the beneficiaries of the void will were legal heirs mutual agreement can still make the partition.
The titles of acquisition or ownership of each Effects of Inclusion of Intruder in Partition [Art 1108,
property shall be delivered to the co-heir to whom CC]
said property has been adjudicated. [Art. 1089 CC] (1) Between a true heir and several mistaken heirs –
partition is void.
PARTITION INTER VIVOS (2) Between several true heirs and a mistaken heir –
Judicial v. Extrajudicial Partition transmission to mistaken heir is void
(3) Through error or mistake, share of true heir is
allotted to mistaken heir – partition shall not be
PAGE 232
rescinded unless there is bad faith or fraud on the proportionately among the heirs. [Art. 1095
part of the other persons interested, but the latter CC]
shall be proportionately obliged to pay the true
heir of his share. The partition with respect to the
mistaken heir is void. [Sempio-Dy] End of Warranty
The obligation of warranty among co-heirs shall
Right of Redemption in Partition cease in the ff. cases:
(a) Should any of the heirs sell his hereditary rights (a) The testator himself has made the partition
to a stranger before the partition, any or all of the (1) Unless it appears, or it may be reasonably
co-heirs may be subrogated to the rights of the presumed, that his intention was otherwise,
purchaser by reimbursing him for the price of the but the legitime shall always remain
sale, provided they do so within the period of one unimpaired.
month from the time they were notified in writing (b) When it has been so expressly stipulated in the
of the sale by the vendor [Art. 1088, CC] agreement of partition
(b) Strangers – those who are not heirs on the (1) Unless there has been bad faith
succession. (c) When the eviction is due to a cause subsequent to
the partition, or has been caused by the fault of
EFFECTS OF PARTITION the distributee of the property. (Art. 1096, CC)
Effect
A partition legally made confers upon each heir the NULLIFICATION OF PARTITION
exclusive ownership of the property adjudicated to Causes for Rescission or Annulment
him [Art 1091, CC] (a) A partition may be rescinded or annulled for the
same causes as contracts. [Art 1097, CC]
Warranty (b) A partition, judicial or extra-judicial, may also be
(a) After the partition has been made, the co-heirs rescinded on account of lesion, when any one of
shall be reciprocally bound to warrant the title to, the co-heirs received things whose value is less by
and the quality of, each property adjudicated at least one-fourth, than the share to which he is
[Art. 1092 CC] entitled, considering the value of the things at the
(b) The reciprocal obligation of warranty referred to time they were adjudicated [Art. 1098, CC]
in the preceding article shall be proportionate to (1) This article applies only to cases of partition
the respective hereditary shares of the co-heirs; among-coheirs
(1) But if any one of them should be insolvent, the (2) Lesion is the injury suffered in consequence of
other co-heirs shall be liable for his part in the inequality of situation by one party who does
same proportion, deducting the part not receive the full equivalent for what she
corresponding to the one who should be gives in a sale or any commutative contract
indemnified. (c) The partition made by the testator cannot be
(2) Those who pay for the insolvent heir shall impugned on the ground of lesion, except when
have a right of action against him for the legitime of the compulsory heirs is thereby
reimbursement, should his financial condition prejudiced, or when it appears or may be
improve [Art. 1093 CC] reasonably be presumed, that the intention of the
(c) An action to enforce the warranty among the co- testator was otherwise. [Art. 1099, CC]
heirs must be brought within ten years from the (d) Preterition of a compulsory heir in the partition
date the right of action accrues. [Art. 1094 CC] [Art 1104, CC]:
(d) If a credit should be assigned as collectible, the (1) Partition shall not be rescinded unless bad
co-heirs shall not be liable for the subsequent faith or fraud on the part of other heirs is
insolvency of the debtor of the estate, but only for proved.
his insolvency at the time the partition is made. [Art (2) The culpable heirs shall share in the damages
1095, CC] of the prejudiced compulsory heir
(e) The warranty of the solvency of the debtor can proportionately.
only be enforced during the five years following (e) A partition which includes a person believed to be
the partition. an heir, but who is not, shall be void only with
(f) Co-heirs do not warrant bad debts, if so known to, respect to such person. [Art. 1105 CC]
and accepted by the distributee.
(1) But if such debts are not assigned to a co-heir, (a) The action for rescission on account of lesion shall
and should be collected, in whole or in part, prescribe after four years from the time the
the amount collected shall be distributed partition was made. [Art. 1100, CC]
PAGE 233
(b) The heir who is sued shall have the option of 5 years from To enforce warranty of solvency
indemnifying the plaintiff for the loss, or partition of debtor of the estate at the
consenting to a new partition time partition is made
(c) Indemnity may be made: 4 years form Action for rescission of partition
(1) By payment in cash or partition on account of lesion
(2) By the delivery of a thing of the same kind
and quality as that awarded to the plaintiff.
(d) If a new partition is made, it shall affect neither
those who have not been prejudiced nor those
who have not received more than their just share
[Art. 1101, CC]
(e) An heir who has alienated the whole or a
considerable part of the real property adjudicated
to him cannot maintain an action for rescission on
the ground of lesion, but he shall have a right to
be indemnified in cash [Art. 1102, CC]
(f) The omission of one or more objects or securities
of the inheritance shall not cause the rescission of
the partition on the ground of lesion, but the
partition shall be completed by the distribution of
the objects or securities which have been omitted.
[Art. 1103, CC]
Difference of Nullity from Rescission

Nullity is not the same as Rescission:
(1) Nullity - the act is supposed to never have existed
(2) Rescission - the act is valid at the origin though it
afterwards became ineffective
Important Periods in Partition

1 month or less Testator, if publicly known to be
before making a insane, burden of proof is on the
will one claiming validity of the will
20 years Maximum period testator can
prohibit alienation of
dispositions
5 years from To claim property escheated to
delivery to the the State
State
1 month To report knowledge of violent
death of decedent lest he be
considered unworthy
5 years from the Action for declaration of
time disqualified incapacity & for recovery of the
person took inheritance, devise or legacy
possession
30 days from Must signify
issuance of order acceptance/repudiation
of distribution otherwise, deemed accepted
1 month form Right to repurchase hereditary
written notice of rights sold to a stranger by a co-
sale heir
10 years To enforce warranty of
title/quality of property
adjudicated to co-heir from the
time right of action accrues
PAGE 234
UP COLLEGE OF LAW AGENCY & PARTNERSHIP BAR OPERATIONS COMMISSION
PAGE 235
Contract of Partnership Note: A partnership is dissolved by operation of law

(even without judicial decree) when the business
becomes unlawful.
DEFINITION
By the contract of partnership two or more persons ASSOCIATIONS WITHOUT LEGAL PERSONALITY
bind themselves to contribute money, property, or Associations and societies with the following
industry to a common fund, with the intention of characteristics has no legal personality and is
dividing the profits among themselves. governed by the provisions of co-ownership:
Two or more persons may also form a partnership for (1) The articles are kept secret among the members;
the exercise of a profession. [Article 1767] and
(2) Any one of the members may contract in his own
Article 1767 defines partnership from the viewpoint of name with third persons. [Article 1775]
a contract. From the contract arises the partnership It may, however, be sued by third persons under the
relation. As a form of business organization, common name it uses. [Section 15, Rule 3, Rules of
partnership falls between two extremes – single Court]
proprietorship and corporation. [De Leon, Comments
and Cases on Partnership, Agency and Trusts (2010), CHARACTERISTICS
hereinafter referred to as "De Leon (2010)"] The contract of partnership is:
(1) Consensual, because it is perfected by mere
ELEMENTS consent.
There is a contract of partnership when: (2) Nominate, because it has a specific name.
(1) There is a meeting of the minds; (3) Bilateral or multilateral, because it is entered into
(2) To form a common fund; between two or more persons.
(3) With intention that profits and losses will be (4) Principal, because its existence does not depend
divided among the contracting parties. on another contract.
(5) Onerous, because money, property or industry are
ESSENTIAL FEATURES contributed by the parties.
A partnership contract has the following essential (6) Preparatory, because it is entered into to carry out
features: a business or specific venture.
(1) There must be a valid contract. (7) Commutative, because the undertaking of each is
(2) The parties must have legal capacity. considered as equivalent of that of the others.
(3) There must be a mutual contribution of money,
property, or industry to a common fund. PARTIES TO THE CONTRACT
(4) The object must be lawful. General rule: Any person capacitated to contract may
(5) The primary purpose must be to obtain profits enter into a contract of partnership.
and to divide the same among the parties. As such, the following persons cannot enter into a
(6) The partnership has a juridical personality contract of partnership:
separate from individual partners [Article 1768]. (1) Those suffering from civil interdiction;
As such, "Any immovable property or an interest (2) Minors;
therein may be acquired in the partnership name. (3) Insane or demented persons;
Title so acquired can be conveyed only in the (4) Deaf-mutes who do not know how to write;
partnership name." [Article 1774] (5) Incompetents who are under guardianship.
EFFECT OF UNLAWFUL OBJECT Exceptions: The capacity of the following persons to

If the partnership has an unlawful object or purpose: enter into a contract of partnership, though
(1) The contract is void ab initio. [Article 1409(1)] capacitated to contract generally, are limited:
(2) Once dissolved by judicial decree: (1) Those who are prohibited from giving each other
(a) The profits shall be confiscated by favor of any donation or advantage cannot enter into a
the State; universal partnership. [Article 1782]
(b) The instruments or tools and proceeds of (2) A corporation cannot enter into a partnership in
the crime shall also be forfeited in favor of the the absence of express authorization by statute or
State. [Article 1770] charter.
(c) The contributions of partners shall not be
confiscated unless they are instruments or tools Ratio: Otherwise, as a result of the mutual agency
of the crime. [De Leon (2010)] between partners, a corporation would be bound by
the acts of persons other than its duly appointed or
authorized officers or agents. This is inconsistent
PAGE 236
with the policy of the law that a corporation should Exceptions: (1) Where immovable property or real
manage its own affairs. rights are contributed:
(a) The contract must appear in a public instrument;
Also, the arrangement would allow corporate and
property to be subject to risks not contemplated by (b) Attached to such instrument must be an
the stockholders when they originally invested. inventory, signed by the parties, of the property
[Mendiola v. CA (2006)] contributed. [Articles 1771 and 1773]
Although a corporation cannot enter into a (2) Where the capital is at least P3,000, in money or
partnership contract, it may, however, engage in a property:
joint venture with others [Auerbach vs. Sanitary (a) The contract must appear in a public
Wares Manufacturing Corp. (1989)]. instrument; and
(b) It must be recorded in the SEC. Failure to
There is no prohibition against a partnership being a comply with these requirements, however,
partner in another partnership. [De Leon (2010)] does not affect the liability of the partnership
and the partners to third persons. [Articles
OBJECT OF THE CONTRACT 1768 and 1772]
OBJECT OF UNIVERSAL PARTNERSHIP
A universal partnership may refer to: DURATION OF THE CONTRACT
(1) All present property: COMMENCEMENT
(a) The partners contribute all the property A partnership begins from the moment of the
which belongs to them to a common fund, execution of the contract, unless it is otherwise
with the intention of dividing the same stipulated. [Article 1784]
among themselves, as well as the profits they
may acquire therewith. [Article 1778] TERM
(b) The property contributed includes all those As to period, a partnership may either be:
belonging to the partners at the time of the (1) For a fixed term or particular undertaking; or
constitution of the partnership. (2) At will, the formation and dissolution of which
(c) A stipulation for the common enjoyment of depend on the mutual desire and consent of the
any other profits may also be made. parties. Any one of the partners may, at his sole
However, the property which the partners pleasure, dictate the dissolution of the
may acquire subsequently by inheritance, partnership, even in bad faith, subject to liability
legacy or donation cannot be included in for damages. [Ortega v. CA (1995)]
such stipulation, except the fruits thereof.
[Article 1779] EXTENSION
(2) All the profits: A partnership term may be extended by:
(a) It comprises all that the partners may acquire (1) Express renewal of the agreement; or
by their industry or work during the existence (2) Implied renewal, when the requisites concur:
of the partnership. (a) The partnership is for a fixed term or
(b) Only the usufruct over the property of the particular undertaking;
partners passes to the partnership. [Article (b) It is continued after the termination of the
1780] fixed term or particular undertaking without
When the articles of universal partnership any express agreement.
does not specify its nature (all present
property or all the profits), the partnership A continuation of the business by the partners or
will be considered as one only of all the such of them as habitually acted therein during the
profits. [Article 1781] term, without any settlement or liquidation of the
partnership affairs, is prima facie evidence of a
OBJECT OF PARTICULAR PARTNERSHIP continuation of the partnership. The effect of such
A particular partnership has for its object determinate continuation is that the right and duties of the
things, their use or fruits, or a specific undertaking, or partners remain the same as they were at such
the exercise of a profession or vocation. [Article 1783] termination of the period, but this time, the
partnership is considered to be at will. [Article 1785]
FORM OF THE CONTRACT
General rule: The contract may be constituted in any
form. [Article 1771]
PAGE 237
RULES TO DETERMINE EXISTENCE AS TO LIABILITY OF PARTNERS

When the intent of the parties is clear, it shall (1) General partnership, consisting of general partners
govern. When it does not clearly appear, the only, who are liable pro rata for partnership
following rules apply: obligations with all their after exhaustion of
(1) Persons who are not partners to each other are partnership assets;
not partners as to third persons. (2) Limited partnership, includes, aside from general
Exception: A person not a partner may be considered partner/s, limited partners, who are not
a partner by estoppel. personally liable for partnership obligations.
(2) Co-ownership or co-possession does not of itself
establish a partnership, even when there is AS TO PUBLICITY
sharing of profits in the use of the property. (1) Secret partnership, where the existence of certain
(3) Sharing of gross returns does not of itself persons as partners is not made known by the
establish a partnership, even when the parties partners;
have joint or common interest in any property (2) Open or notorious partnership, the existence of
from which the returns are derived. which is made known to the public by the
(4) The receipt by a person of a share in the profits of partners.
a business is prima facie evidence that he is a
partner. AS TO PURPOSE
(1) Commercial or trading partnership, for transaction
Exceptions: No such inference is drawn if the profits of business;
are received in payment: (2) Professional or non-trading, for exercise of a
(a) As a debt by installments or otherwise; profession.
(b) As wages of an employee of rent to a landlord;
(c) As an annuity to a widow or representative of a A profession has been defined as "a group of men
deceased partner; pursuing a learned art as a common calling in the
(d) As interest on a loan, though the amount of spirit of public service — no less a public service
payment vary with the profits of the business;
because it may incidentally be a means of
(e) As the consideration for the sale of a goodwill of a
livelihood." [In the Matter of the Petition for Authority
business or other property by installments or
to Continue Use of Firm name "Sycip, Salazar,
otherwise. [Article 1769]
etc."/"Ozaeta, Romulo, etc." (1979)]
RELATIONS CREATED
A professional partnership is a particular
(1) Among the partners themselves.
partnership. [Article 1783]
(2) Between the partners and the partnership.
(3) Between the partnership and third persons with
KINDS OF PARTNERS
whom it contracts.
(1) Capitalist, whose contribution is money or
(4) Between the partners and such third persons.
property;
(2) Industrial, whose contribution is only his industry;
KINDS OF PARTNERSHIP
(3) General, whose liability to third persons extends
AS TO LEGALITY OF EXISTENCE
to his separate property;
(1) Partnership de jure is one which has complied with
(4) Limited, whose liability to third persons is limited
all the requisites for its lawful establishment.
to his capital contribution;
(2) Partnership de facto is one which failed to so
(5) Managing, designated to manage the affairs or
comply.
business of the partnership;
(6) Liquidating, takes charge of the winding up of
AS TO OBJECT
partnership affairs;
(1) Universal partnership:
(7) By estoppel, who is not really a partner but is
(a) Of all present property;
liable as such for the protection of innocent third
(b) Of profits;
persons;
(2) Particular partnership.
(8) Continuing, who continues the business after
dissolution of the partnership by admission of a
AS TO DURATION
new partner, or retirement, death or expulsion of
(1) For a fixed term or particular undertaking;
existing partners.
(2) At will.
(9) Surviving, who remains a partner after dissolution
by death of any partner;
(10)Subpartner, who is not a member of the
partnership but contracts with a partner with
PAGE 238
regard to the share of the latter in the DISTINGUISHED FROM OTHER CONTRACTS
partnership; Partnership Joint Venture
(11) Ostensible, who takes active part in the business
of the partnership and is known by the public; Operates with firm name Operates with no firm
(12)Secret, who takes active part in the business, but and legal personality name and legal
is unknown to the third persons as a partner; personality
(13) Silent, who does not take active part in the business, but may be known to be a partner by third persons;
(14)Dormant, who does not take active part in the Generally relates to a Usually limited to a single
business and is not known or held out as a continuing business of transaction
partner; various transactions of a
(15)Original, who has been a partner since the certain king
constitution of the partnership;
(16)Incoming, who is about to be taken as a member Corporations may not Corporations may enter
into an existing partnership; enter into a partnership into joint ventures
(17) Retiring, who is withdrawing from the
partnership. It would seem therefore that under Philippine law, a
joint venture is a form of partnership and should thus
Industrial Partner Capitalist Partner be governed by the laws of partnership. [Auerbach vs.
Sanitary Wares Manufacturing Corp. (1989)]
Form of contribution
Partnership Co-Ownership
Industry Money or property
Generally created by Generally created by law,
Share in profits either express or implied and may exist even
contract without a contract
Just and equitable share According to agreement;
if none, in proportion to Has a separate juridical Has no separate juridical
contribution personality personality
Share in losses Generally, the purpose is The purpose is common

to obtain profits enjoyment of a thing or
Exempted as to losses as According to agreement; if right
between partners, but none, in proportion to
liable to third persons, agreed share in the Duration has no limitation An agreement to keep a
without prejudice to profits; thing undivided for more
reimbursement from if none, in proportion to than 10 years is not
capitalist partners contribution allowed
Engaging in business There is mutual agency There is no mutual

between partners representation among co-
Cannot engage in Cannot engage, for his owners
business for himself, own account, in the same
unless the partnership kind of business as that of Death or incapacity of a Death or incapacity of a
expressly permits him to the partnership, unless partner dissolves the co-owner does not
do so; should he do so there is a stipulation to partnership dissolve the co-ownership
without permission, the the contrary; should he do
capitalist partners (as well so, he shall bring to the Partner cannot dispose of Co-owner can dispose of
as industrial partners [De common fund any profits his interest so as to make his share without consent
Leon (2010)]) may (a) accruing to him from his the assignee a partner, of others
exclude him from the firm, transactions and shall without consent of others
or (b) avail themselves of personally bear all the
the benefits obtained in losses [Article 1808]
violation of the Partnership Corporation
prohibition, with right to
damages in either case Has juridical personality separate and distinct from
[Article 1789] its individual members
Can only act through agents
PAGE 239
Partnership Corporation Conjugal

Partnership
Partnership of Gains
Composed of an aggregate of individuals
Has juridical personality Has no juridical
Distributes its profits to those who contributed personality
capital to the business
Commencement date Commencement is on the
Can only be organized where there is a law may be stipulated date of the celebration of
authorizing its organization the marriage, and any
Taxable as a corporation stipulation to the contrary
is void
Created by agreement Created by law (with SEC
approval) Share in profits may be Share in profits is equal
stipulated; otherwise, in
Involves at least 2 persons Except for a corporation proportion to contribution
sole, requires at least 5
incorporators Management shared by Administration belongs to
all partners, unless the spouses jointly, but
Personality commences Personality commences otherwise agreed upon decision of husband
from the moment of from the issuance of prevails in disagreement
execution of the contract certificate of incorporation
Partner can dispose of Spouse cannot dispose of
Can exercise any power Can exercise only powers Interest even without interest during marriage,
authorized by partners granted by law or those consent of others even with consent
incidental to its existence
When management is not Management is vested in
agreed upon, every the board of directors of Partnership Voluntary Association
partner may act for the trustees
partnership Has juridical personality Has no juridical
personality
Partners are generally Stockholders are liable
liable for partnership only to the extent of their Organized for profit Not always organized for
debts shares profit
Partner cannot dispose of Stockholder has the right Capital is contributed Capital is not contributed,
his interest so as to make to transfer his shares although fees are
the assignee a partner, without consent of others collected from members
without consent of others
Partnership is primarily The members are liable
Duration has no limitation The term is 50 years, but liable; the partners are individually for debts
may be extended liable only subsidiarily which they authorized or
ratified
May be dissolved at any May only be dissolved with
time by one or all of the the consent of the state Share in profits may be Share in profits is equal
partners stipulated; otherwise, in
proportion to contribution
Management shared by Administration belongs to

Conjugal all partners, unless the spouses jointly, but
Partnership
Partnership of Gains otherwise agreed upon decision of husband
prevails in disagreement
Created by voluntary Arises in case the spouses,
agreement of 2 or more of opposite sex, agree Partner can dispose of Spouse cannot dispose of
partners of either sex before marriage Interest even without interest during marriage,
consent of others even with consent
Governed by agreement Governed by law
PAGE 240
Exception: When there is an agreement to the

Rights and obligations contrary, the contribution shall follow such
agreement [Article 1790].
of the partnership DETERMINING VALUE OF CONTRIBUTION IN GOODS
To determine the value when the contribution
RIGHT TO CONTRIBUTION, IN GENERAL consists, in whole or in part, of goods, their appraisal
The mutual contribution to a common fund is the must be made:
essence of the contract of partnership [De Leon (1) In the manner prescribed in the partnership
(2010)]. As such, the partnership has a right to the contract;
contribution (or partners are obliged to contribute). (2) In the absence thereof, by experts chosen by the
The money or property thus contributed, or their use partners and according to current prices.
or fruits, becomes a property of the partnership.
Subsequent changes in the price will be for the
To complement this right of the partnership and as benefit or will be suffered by the partnership [Article
an incident of its separate and distinct juridical 1787].
personality, it is allowed by law to acquire any
immovable property or an interest therein. Title so ADDITIONAL CAPITAL CONTRIBUTION
acquired can be conveyed only in the partnership In case of an imminent loss of the business of the
name [Article 1774]. partnership, any partner who refuses to contribute
an additional share to the capital, except an industrial
OBLIGATION OF PARTNERS TO THE partner, to save the venture, shall be obliged to sell
PARTNERSHIP his interest to the other partners, unless there is an
WITH RESPECT TO CONTRIBUTION OF MONEY OR agreement to the contrary [Article 1791].
PROPERTY
With respect to contribution of property, a partner is Requisites:
obliged to: (1) There is an imminent loss of the business of the
(1) To contribute, at the beginning of the partnership partnership;
or at the stipulated time, the money, property or (2) The majority of the capitalist partners are of the
industry which he undertook to contribute; opinion that an additional contribution to the
(2) In case a specific and determinate thing is to be common fund would save the business;
contributed: (3) The capitalist partner refuses deliberately (not
(a) To warrant against eviction in the same because of financial inability) to contribute an
manner as a vendor; and additional share to the capital; and
(b) To deliver to the partnership the fruits of the (4) There is no agreement that even in case of
property promised to be contributed, from imminent loss of the business, the partners are not
the time they should have been delivered, obliged to contribute.
without need of demand [Article 1786];
(3) In case a sum of money is to be contributed, or in PROHIBITION AGAINST ENGAGING IN BUSINESS
case he took any amount from the partnership General rule: A capitalist partner cannot engage for
coffers, to indemnify the partnership for: his own account in any operation which is of the kind
(a) Interest; and of business in which the partnership is engaged.
(b) Damages, from the time he should have Should he do so, he shall bring to the common fund
complied with his obligation, or from the time he any profit accruing to him from his transactions,
converted the amount to his own use, respectively while personally bearing all the losses.
[Article 1788].
Exception: The rule does not apply when there is a
Article 1788 is an exception to the general rule that in stipulation to the contrary [Article 1808].
obligations consisting in the payment of a sum of
money, the indemnity for damages consists only in RISK OF LOSS OF THINGS CONTRIBUTED
the payment of interest [Article 2209]. In case the contribution consists in the use and fruits
of specific and determinate things, which are not
AMOUNT OF CONTRIBUTION
fungible, the risk of loss shall be borne by the partner
General rule: The partners are obliged to contribute who owns them.
equal shares to the capital of the partnership. The partnership bears the risk if the things:
(1) Are fungible;
(2) Cannot be kept without deterioration;
PAGE 241
(3) Were contributed to be sold; or Exceptions:

(4) Were brought and appraised in the inventory. (1) In case the receipt was issued for the account of
In the last case, the claim is limited to the the partnership credit only, however, the sum
appraised value of the things [Article 1795]. shall be applied to the partnership credit alone.
(2) When the debtor declares, pursuant to Article
REMEDY IN CASE OF NON-COMPLIANCE 1252, at the time of making the payment, to which
A partner is guilty of estafa if he misappropriates debt the sum must be applied, it shall be so
partnership money or property received by him for a applied [Article 1792].
specific purpose of the partnership [Liwanag v. CA
(1997)]. The law, through this rule, safeguards the interests
of the partnership by preventing the possibility of
However, mere failure on the part of an industrial their being subordinated by the managing partner to
partner to return to the capitalist partner the capital his own interest, by intentionally failing to collect
brought by him into the partnership is not an act partnership credits to collect his own, to the
constituting estafa. The action that may be brought prejudice of the other partners. This possibility does
to recover the money is a civil one [US v. Clarin not exist in case the partner is not authorized to
(1910)]. manage [De Leon (2010)].
OBLIGATION OF PARTNERS TO THE RIGHT TO RETURN OF CREDIT RECEIVED

PARTNERSHIP A partner, who is authorized to manage or not, is
WITH RESPECT TO CONTRIBUTION OF INDUSTRY obliged to bring to the partnership capital what he
With respect to contribution of industry, a partner is received when:
also obliged to contribute it at the stipulated time. (1) He has received, in whole or in part, his share of
the partnership credit;
PROHIBITION AGAINST ENGAGING IN BUSINESS (2) The other partners have not collected their
General rule: An industrial partner cannot engage in shares; and
business for himself. Should he do so, the capitalist (3) The partnership debtor has become insolvent.
partners, as well as industrial partners [De Leon This obligation exists even when he issued a
(2010)], may either: receipt for his share only. [Article 1793]
(1) Exclude him from the firm; or
(2) Avail themselves of the benefit which he may Ratio: In this case, the debt becomes a bad debt. It
have obtained. would be unfair for the partner who already collected
not to share in the loss of the other partners.
Exception: He may engage in business for himself
when the partnership expressly permits him to do so. RIGHT TO INDEMNITY FOR DAMAGES
[Article 1789] Every partner is responsible to the partnership for
damages suffered by it through his fault.
RIGHT TO APPLY PAYMENT TO PARTNERSHIP
CREDIT COMPENSATION OF LIABILITY
General rule: A partner authorized to manage, who General rule: The liability for damages cannot be set-
collects a demandable sum owed to him in his own off or compensated by profits or benefits which the
name from a person who also owes the partnership a partner may have earned for the partnership by his
demandable sum, is obliged to apply the sum industry.
collected to both credits pro rata, even if he issued a
receipt for his own credit only. Ratio: The partner has the obligation to secure the
benefits for the partnership. As such, the
Requisites: requirement for compensation, that the partner be
(1) There exist at least two debts, one where the both a creditor and a debtor of the partnership at the
collecting partner is creditor, and the other, same time, is not complied with [Article 1278; De Leon
where the partnership is the creditor; (2010)].
(2) Both debts are demandable; and
(3) The partner who collects is authorized to manage Exception: The court may equitably lessen the
and actually manages the partnership. liability if, through his extraordinary efforts in other
activities of the partnership, unusual profits were
realized [Article 1794].
Note, however, that there is still no compensation.
PAGE 242
SUIT FOR DAMAGES Without such agreement, they shall be kept at the
Before a partner may sue another for alleged principal place of business of the partnership.
fraudulent management and resultant damages,
liquidation must first be effected to determine the Every partner shall, at any reasonable hour, have
extent of the damage. Without liquidation of access to and may inspect and copy any of them.
partnership affairs, a partner cannot claim damages [Article 1805]
[Soncuya v. De Luna (1939)].
BASIS OF RIGHT
RESPONSIBILITY OF THE PARTNERSHIP TO Since a partner is a co-owner of partnership
PARTNERS properties, which include the books, and has a right
In the absence of any stipulation to the contrary, to participate in the management of its affairs, the
every partner is an agent of the partnership for the books should not be in the exclusive custody or
purpose of its business. As such, it is responsible to control of any one partner [De Leon (2010)].
every partner:
(1) For amounts, and the corresponding interest REASONABLE HOUR
from the time the expenses were made, which he "Any reasonable hour" has been interpreted to mean
may have disbursed on behalf of the partnership; reasonable hours on business days throughout the
(2) For obligations he may have contracted in good year, not merely during some arbitrary period of a
faith in the interest of the partnership business; few days chosen by the managing partner [Pardo v.
and Lumber Co., (1925)].
(3) For risks in consequence of the management of
the partnership. [Article 1796] RIGHT TO A FORMAL ACCOUNT
Any partner shall have the right to a formal account
as to partnership affairs:
(1) If he is wrongfully excluded from the partnership
business or possession of its property by his co-
partners;
Rights and obligations (2) If the right exists under the terms of any
agreement;
of partners inter se (3) If, without his consent, a partner has derived
profits from any transaction connected with the
RIGHT TO ASSOCIATE ANOTHER IN SHARE formation, conduct, or liquidation of the
Every partner may associate another person with him partnership or from any use of partnership
in his share. property;
(4) Whenever other circumstances render it just and
The admission of the associate to the partnership, reasonable [Article 1809].
however, requires the consent of all the other
partners, even if the partner having an associate is a ACCRUAL OF RIGHT
managing partner [Article 1804]. General rule: The right to a formal account of
partnership affairs accrues only when the
SUBPARTNERSHIP partnership is dissolved. Ample protection is already
The arrangement refers to a contract of provided.
subpartnership, which is a partnership within a
partnership, distinct and separate from the main Exceptions: In special and unusual cases under
partnership [De Leon (2010)]. The associate is Article 1809, formal accounting may be demanded
sometimes referred to as a subpartner. even before dissolution.
Since admission of the subpartner as a new partner PERSON OBLIGED

in the main partnership amounts to a modification of The obligation to account rests on the managing or
the original contract, it requires the unanimous active partner (or, after dissolution, in the liquidating
consent of the partners. or surviving partner).
RIGHT TO ACCESS PARTNERSHIP BOOKS PRESCRIPTION OF ACTION

The partnership books shall be kept at the place The right, on the part of the other partners, to
agreed upon by the partners. demand an accounting exists while the partnership
exists. The prescriptive period begins to run only
PAGE 243
upon the dissolution when the final accounting is (b) Dissolution by judicial decree [Article 1831].
done [Fue Leung v. IAC (1989)]. (2) A partner's right in such property is not
assignable, except when all the partners assign
NATURE OF ACTION their rights in the same property.
The action for accounting is an action in personam, (3) The right is not subject to attachment or
regardless of the incidental fact that some of the execution, except on claim against the
assets of the partnership are real property [Emnace v. partnership. Also, in case of such attachment, the
CA (2001)]. partners, or any of them, or the representatives of
a deceased partner, cannot claim any right under
PROPERTY RIGHTS OF PARTNERS the homestead or exemption laws;
IN GENERAL (4) The right is also not subject to legal support
The property rights of a partner are: under Article 291 [Article 1811].
(1) Rights in specific partnership property;
(2) Interest in the partnership; and A partner's right in specific property cannot be
(3) Right to participate in the management [Article separately assigned, since it is impossible to
1810]. determine the extent of his beneficial interest in the
property until after the liquidation of partnership
PARTNERSHIP PROPERTY AND PARTNERSHIP CAPITAL affairs.
Capital Property
It is also not subject to support precisely because it is
With constant value Value varies with market a property of the partnership and not of the
conditions individual partners.
Includes only actually Includes the contributions INTEREST IN THE PARTNERSHIP

contributed and promised and property acquired by A partner's interest in the partnership is his share of
capital the partnership the profits and surplus [Article 1812]. This interest is
subject to support and may be assigned.
OWNERSHIP OF CERTAIN PROPERTY RIGHTS OF ASSIGNEE

(1) The ownership of property used by the partnership Assignment by a partner of his whole interest in the
depends on the intention of the parties, which partnership does not, of itself:
may be drawn from an express agreement or (1) Dissolve the partnership; or
their conduct. (2) Entitle the assignee to:
(a) A partner may allow the property to be used (a) Interfere in the management or
by the partnership without transfer of administration of the partnership business or
ownership, contributing only the use or affairs;
enjoyment thereof. (b) Require information or account of
(b) He may also hold title to partnership property, partnership; or
without acquiring ownership thereof [Article (c) Inspect the partnership books.
1819].
(2) Property acquired by a partner with partnership It merely entitles the assignee to:
funds is presumed to be partnership property. (1) Receive the profits to which the assigning partner
(3) The same presumption also arises when the was entitled;
property is indicated in the partnership books as (2) In case of fraud in management, avail himself of
partnership asset. the usual remedies;
(4) Other factors may be considered to determine (3) In case of dissolution:
ownership of the property. (a) Receive his assignor's interest; and
(b) Require an accounting from the date only of
RIGHTS IN SPECIFIC PROPERTY the last account agreed to by all the partners
The partners are co-owners of specific partnership [Article 1813].
property. As such:
(1) A partner has an equal right with his partners to CHARGING OF PARTNERSHIP INTEREST BY PERSONAL
possess such property for partnership purposes. CREDITOR
For other purposes, the consent of his partners is OF PARTNERS
necessary. If the partner is excluded, he may ask Partnership creditors are preferred over the personal
for: creditors of the partners as regards partnership
(a) Formal accounting [Article 1809]; or property [Article 1827].
PAGE 244
(d) The industrial partner, who did not contribute

However, on due application by any judgment capital, is not liable for losses [Article 1797].
creditor of a partner, a competent court may:
(1) Charge the interest of the partner for the DESIGNATION OF SHARE BY THIRD PERSONS
satisfaction of the judgment debt; The designation of the share of each one in the
(2) Appoint a receiver of the share of the profits and profits and losses can be delegated to a third person,
of any other money due or to fall due to the in which case, it cannot be impugned:
partner; and (a) Unless it is manifestly inequitable;
(3) Make all other orders, directions, accounts and (b) The partner impugning it has begun to execute
inquiries, which the debtor partner might have the designation; or
made, or which the circumstances may require. (c) The partner has not impugned it within 3 months
from the time he had knowledge thereof.
The interest charged may be redeemed before
foreclosure or, in case of sale directed by the court, The designation cannot be delegated to one of the
may be purchased without causing dissolution: partners [Article 1798].
(1) With separate property, by one or more of the
partners; or EXCLUSION OF PARTNER FROM SHARE
(2) With partnership property, by one or more of the A stipulation excluding one or more partners from
partners, will consent of all, except the debtor any share in the profits or losses is void [Article 1799].
partner. With reference to the industrial partner, since the law
itself excludes him from losses, a stipulation
The partner debtor is not deprived of his right under exempting him from the losses is naturally valid
exemption laws. [Article 1814] since if the partnership fails to realize profits, he can
no longer withdraw his work or labor. He cannot but
CHARGING ORDER share in the loss.
A charging order subjects the interest in the
partnership of the debtor partner with the payment OBLIGATION TO RENDER INFORMATION
of an unsatisfied amount of a judgment debt against Partners shall render on demand true and full
him, with the least interference with the partnership information of all things affecting the partnership to
business and the rights of the partners. By virtue of any partner or the legal representative of any
the order, any amount or portion thereof which the deceased partner or of any partner under legal
partnership would otherwise pay to the debtor disability [Article 1806].
partner is instead given to the judgment creditor [De
Leon (2010)]. BASIS OF OBLIGATION
This obligation arises from the mutual trust and
RIGHT TO PROFITS AND OBLIGATION FOR confidence among partners. Thus, there must be no
LOSSES concealment between them in all matters affecting
RULES FOR DISTRIBUTION OF PROFITS AND LOSSES the partnership [De Leon (2010].
The distribution of profits and losses shall be in
accordance with the following rules OBLIGATION TO ACCOUNT AND ACT AS TRUSTEE
(1) They shall be distributed in conformity with the Every partner must account to the partnership for
agreement. any benefit, and hold as a trustee for it any profits
(2) If only the share in profits has been stipulated, the derived by him without the consent of the other
share in the losses shall be in the same partners from any transaction connected with the
proportion. formation, conduct, or liquidation of the partnership
(3) In the absence of any stipulation: or from any use by him of its property [Article 1807].
(a) The share in the profits of the capitalist
partners shall be in proportion to their BASIS OF OBLIGATION
contributions. This obligation also arises from the fiduciary nature
(b) The losses shall be borne by the capitalist of the partnership relation, and operates to prevent a
partners, also in proportion to the partner from making a secret profit out of the
contributions; partnership. Note that the obligation extends from
(c) The share of the industrial partners in the the formation to the liquidation of the partnership.
profits is that share as may be just and
equitable. If he also contributed capital, he
will receive a share of the profits in proportion
to his contribution; and
PAGE 245
Operation of the Partnership

MANAGEMENT BY TWO OR MORE PARTNERS
FIRM NAME When there are two or more managing partners
Every partnership shall operate under a firm name, appointed, without specification of their duties or
which may or may not include the name of one or without a stipulation on how each one will act:
more of the partners. (1) Each one may separately execute all acts of
administration.
Those who, not being members of the partnership, (2) If any of them opposes the acts of the others, the
include their names in the firm name, shall be decision of the majority prevails.
subject to the liability of a partner [Article 1815]. (3) In case of a tie, the partners owning the
controlling interest will decide [Article 1801].
RIGHT TO CHOOSE FIRM NAME
General rule: The partners may adopt any firm name Requisites:
desired. (1) Two or more partners have been appointed as
Exceptions: managers;
(1) They cannot use a name that is "identical or (2) There is no specification of their respective duties;
deceptively or confusingly similar to an existing and
[partnership] or corporation or to any other name (3) There is no stipulation that one of them shall not
already protected by law or is patently deceptive, act without the consent of all the others.
confusing or contrary to existing laws" [Section 18,
Corporation Code]. STIPULATION ON UNANIMITY OF MANAGING PARTNERS
(2) Use of names of deceased partner in law firms is In case there is a stipulation that none of the
"permissible provided that the firm indicates in all managing partners shall act without the consent of
its communications that said partner is others, the concurrence of all is necessary for the
deceased" [Rule 3.02, Code of Professional validity of the acts.
Responsibility]. The absence or disability of one cannot be alleged,
unless there is imminent danger of grave or
MANAGEMENT OF THE PARTNERSHIP irreparable injury to the partnership. [Article 1802]
Management of the partnership is primarily
governed by the agreement of the partners in the MANAGEMENT WHEN MANNER NOT AGREED UPON
articles of partnership. It may be managed by: When there is no agreement as to the manner of
(1) All the partners; or management, the following rules apply:
(2) A number of partners appointed as managers, (1) All the partners are considered agents (mutual
which may be appointed: agency). Whatever any one does alone binds the
(a) In the articles of partnership; or partnership, unless there is a timely opposition to
(b) After constitution of the partnership. the act, under Article 1801.
(2) Any important alteration in the immovable
POWERS OF A MANAGING PARTNER property of the partnership, even if useful to the
General rule: The partner designated as manager in partnership, requires unanimity. If the alteration
the articles may execute all acts of administration is necessary for the preservation of the property,
despite opposition by the other partners. however, consent of the others is not required [De
Exception: He cannot do so when he acts in bad faith. Leon (2010)].
REVOCATION OF POWER OF MANAGING PARTNER If the refusal is manifestly prejudicial to the

The powers of the managing partner may be partnership, court intervention may be sought [Article
revoked: 1803].
(1) If appointed in the articles of partnership, when:
(a) There is just or lawful cause for revocation; INSTANCES OF MUTUAL AGENCY
and (1) Partners can dispose of partnership property even
(b) The partners representing the controlling when in partnership name [Article 1819].
interest revoke such power. (2) An admission or representation made by any
(2) If appointed after the constitution of the partner concerning partnership affairs is evidence
partnership, at any time and for any cause [Article against the partnership [Article 1820].
1800]. (3) Notice to any partner of any matter relating to
partnership affairs is notice to the partnership
[Article 1821].
PAGE 246
(4) Wrongful act or omission of any partner acting for (2) A person admitted as a partner into an existing
partnership affairs makes the partnership liable partnership is liable for all the obligations of the
[Article 1822]. partnership arising before his admission, except
(5) Partnership is bound to make good losses for that his liability shall be satisfied only out of
wrongful acts or misapplications of partners partnership property, unless there is a stipulation
[Article 1823]. to the contrary.
LIABILITY OF INDUSTRIAL PARTNER

An industrial partner, who is not liable for losses, is
Obligations of partnership/ not exempt from this liability. However, he can
recover the amount he has paid from the capitalist
partners to third persons partners, unless there is a stipulation to the contrary.
[Cia. Maritima v. Muñoz (1907)].
LIABILITY OF PARTNERS FOR PARTNERSHIP
CONTRACTS STIPULATION AGAINST INDIVIDUAL LIABILITY
The partnership is primarily liable for contracts Any stipulation against this liability is void and does
entered into in its name and for its account, under its not affect third persons. The stipulation, however, is
signature and by a person authorized to act for it. valid only as among the partners [Article 1817].
Upon exhaustion of its assets, all partners are liable LIABILITY OF PARTNERS FOR PARTNERSHIP
pro rata with all their property. CONTRACTS
ACTS APPARENTLY FOR THE CARRYING ON OF USUAL
Any partner may enter into a separate obligation to BUSINESS
perform a partnership contract [Article 1816]. General rule: Every partner is an agent of the
partnership for the purpose of its business and any
NATURE OF INDIVIDUAL LIABILITY act of a partner which is apparently for the carrying
The pro-rating should be understood to mean on of the usual business of the partnership binds the
equally or jointly, not proportionally [De Leon (2010), latter, including the execution of any instrument in
citing Article 1839(4); note, however, that this the partnership name [1st par., Article 1818].
conclusion does not find textual support in Article
1816]. Exception: The partnership is not bound when:
(1) The partner has in fact no authority to act; AND
The fact that a partner has left the country and the (2) The person with whom he deals has knowledge of
payment of his share of the liability cannot be such fact.
enforced [Co-Pitco v. Yulo (1907)] or his liability is
condoned by the creditor [Island Sales v. United ACTS NOT APPARENTLY FOR CARRYING ON OF THE USUAL
Pioneers (1975)] cannot increase the liability of the BUSINESS
other partners. General rule: Acts of a partner which is not apparently
for carrying on of the usual business does not bind
The liability is subsidiary or secondary. It only arises the partnership.
upon exhaustion of partnership assets. However,
they may be joined as party defendants in the action Exception: The partnership is bound if the other
against the partnership, subject to their right to prior partners authorized him to do the act.
exhaustion of partnership assets [Cia. Maritima v.
ACTS OF STRICT DOMINION
Muñoz (1907)].
General rule: One or some of the partners have no
authority to do the following acts of strict dominion:
General rule: The partners are liable pro-rata and (a) Assign the partnership property in trust for
subsidiarily, with all their property. creditors or on the assignee's promise to pay the
debts of the partnership;
Exceptions: (b) Dispose of the goodwill of the business;
(1) A third person who transacted with the (c) Do any other act which makes it impossible to
partnership can hold the partners solidarily liable carry on the ordinary business of the partnership;
for the whole obligation if the case falls under (d) Confess a judgment;
Articles 1822 or 1823 [Muñasque v. CA (1985)]. (e) Enter into a compromise concerning a
partnership claim or liability;
PAGE 247
(f) Submit a partnership claim or liability to

arbitration; LIABILITY OF PARTNERSHIP FOR ADMISSION BY
(g) Renounce a claim of the partnership. PARTNER
An admission or representation by any partner
Exception: They may do so if: concerning partnership affairs within the scope of his
(1) Authorized by all the partners; OR authority may be used as evidence against the
(2) The other partners have abandoned the business. partnership [Article 1820].
ACTS IN CONTRAVENTION OF RESTRICTION LIABILITY OF PARTNERSHIP FOR WRONGFUL

Any act of a partner in contravention of a restriction ACTS OF PARTNER
on authority does not bind the partnership to The partnership is solidarily liable with the partner
persons having knowledge of the restriction [Article who causes loss or injury, or incurs any penalty
1818]. through any wrongful act or omission:
(1) In the ordinary course of the business of the
CONVEYANCE OF REAL PROPERTY OF partnership; or
PARTNERSHIP (2) Not in such ordinary course of business, but with
TITLE IN THE PARTNERSHIP NAME the authority of his co-partners [Article 1822].
Any partner may convey the property in the name of
the partnership. LIABILITY OF THE PARTNERSHIP FOR
MISAPPLICATION OF MONEY
The partnership can recover it, except when: OR PROPERTY RECEIVED
(1) The act of the partner binds the partnership The partnership is liable for losses suffered by a third
under 1st par., Article 1818 (i.e., for the carrying on of person whose money or property was:
the usual business of the partnership); or (1) Received by a partner, acting within the scope of
(2) If not so authorized, the property has been his apparent authority, who also misapplied it; or
conveyed by the grantee, or a person claiming under (2) Received by the partnership, in the course of its
him, to a holder for value and without knowledge business, but is misapplied by any partner while it
that the partner exceeded his authority. is in the custody of the partnership [Article 1823].
TITLE IN THE PARTNERSHIP NAME LIABILITY OF OTHER PARTNERS

A partner, authorized to act under 1st par., Article FOR WRONGFUL ACTS OR MISAPPLICATION
1818, may convey, in his own name, the equitable All partners are solidarily liable with the partnership
interest of the partnership. for its liabilities under Articles 1822 and 1823 [Article
1824].
TITLE IN THE NAME OF ONE OR MORE (NOT ALL) OF THE
PARTNERS This is without prejudice to the guilty partner being
AND THE RECORD DOES NOT DISCLOSE THE RIGHT liable to the other partners. However, as far as third
OF THE PARTNERSHIP persons are concerned, the partnership is
The partners having title may convey title. answerable.
The partnership may recover it if the act does not LIABILITY IN CASE OF PARTNERSHIP BY
bind it under 1st par., Article 1818, unless the ESTOPPEL
purchaser or his assignee is: PARTNER BY ESTOPPEL
(1) A holder for value; AND A person, not a partner, may become a partner by
(2) Without knowledge that the act exceeded estoppel, and be liable as a partner, when, by words,
authority. spoken or written, or conduct, he:
(1) Directly represents himself to anyone as a partner
TITLE IN THE NAME OF ONE OR MORE OR ALL THE in an existing or non-existing partnership; or
PARTNERS, (2) Indirectly represents himself by consenting to
OR IN A THIRD PERSON IN TRUST FOR THE PARTNERSHIP another representing him as such partner. [Article
A partner may convey equitable title in the 1825]
partnership name or in his own name, when the act
is authorized under 1st par., Article 1818. LIABILITY OF PARTNER BY ESTOPPEL
A partner by estoppel is liable:
TITLE IN THE NAMES OF ALL THE PARTNERS (1) To any person who extended credit to the
The conveyance must be executed by all of them to partnership, actual or apparent, relying on his
pass all their rights in the property [Article 1819]. representation; and
PAGE 248
(2) In case the representation was made publicly, to the plaintiff might have learned of the truth or
any person, who extended such credit, whether or untruth of the representations.
not the communication to said creditor was made
with the knowledge of the partner. Persons who knowingly assume to act as a
corporation without authority to do so are liable as
NATURE OF LIABILITY general partners for all debts, liabilities and
He is liable in the following manner: damages incurred. [Section 21, Corporation Code] A
(1) When there is an existing partnership and all the partnership de facto is created.
partners consented to the representation, a
partnership liability results, and the partner by LIABILITY OF INCOMING PARTNER
estoppel is liable as though he were a partner; A person admitted as a partner is liable as the other
(2) When there is an existing partnership and not all partners for obligations subsequent to his admission.
the partners consented, or when there is no
existing partnership and all those represented as He is also liable for obligations incurred before his
partners consented to the representation, he is admission, but will be satisfied only out of the
liable jointly and pro rata with those who partnership property, unless otherwise stipulated.
consented to the representation; (Article 1826)
(3) When there is an existing partnership but none of
the partners consented, or when there is no Ratio:
existing partnership and not all of those (1) The new partner partakes of the benefits of the
represented as partners consented to the partnership property and an already established
representation, he is liable separately. business.
(2) He has every means of obtaining full knowledge
EFFECTS OF ACTS OF PARTNER BY ESTOPPEL of the debts of the partnership and remedies that
The acts of a partner by estoppel have the following amply protect his interest [De Leon (2010)].
effects:
(1) A person, thus representing himself as a partner However, an incoming partner may fully assume the
of other persons, becomes an agent of the latter, obligations of a retiring partner.
in the same manner as though he were a partner
in fact, with respect to persons who rely upon the NOTICE TO OR KNOWLEDGE OF THE
representation. PARTNERSHIP
(2) When all the members of the existing partnership The following operate as notice to or knowledge of
consent to the representation, a partnership act the partnership:
or obligation results. (1) Notice to any partner of any matter relating to
(3) In all other cases, only a joint act or obligation partnership affairs;
results. [Article 1825] (2) Knowledge of the partner acting in the particular
matter acquired while a partner;
No real partnership is created by estoppel. It is only (3) Knowledge of the partner acting in the particular
with respect to third persons that partnership by matter then present to his mind; and
estoppel is recognized. (4) Knowledge of any other partner who reasonably
could and should have communicated it to the
ESTABLISHING LIABILITY acting partner.
The basic elements in connection with establishment
of liability as a partner if based on the doctrine of These do not apply in case of fraud on the
estoppel must encompass: partnership committed by or with the consent of the
(1) Proof by plaintiff that he was individually aware of partner [Article 1821].
the defendant's representations as to his being a
partner or that such representations were made PREFERENCE OF PARTNERSHIP CREDITORS
by others and not denied or refuted by the Partnership creditors are preferred over personal
defendant; creditors of the partners with respect to partnership
(2) Reliance on such representations by the plaintiff; property.
and
(3) Lack of any denial or refutation of the statements However, personal creditors may ask the attachment
by the defendant; such denial need not precede and public sale of the share of the partner debtor in
plaintiff's acting therein if the denial was the partnership assets. [Article 1827]
forthcoming promptly upon hearing of the
representations, and if, by prudence and diligence
PAGE 249
Ratio: The partnership, as a legal entity distinct from or after the termination of any specified term or
its members, should apply its property to the particular undertaking;
payment of its debts in preference to the claim of any (4) By the expulsion of any partner from the business
partner or his individual creditors. bona fide in accordance with such a power
conferred by the agreement between the
partners.
If, after the expiration of the definite term or

Dissolution and winding up particular undertaking, the partners continue the
partnership without making a new agreement, the
firm becomes a partnership at will. [Article 1785]
CONCEPTS
Dissolution is the change in the relation of the Verily, any one of the partners may, at his sole
partners caused by any partner ceasing to be pleasure, dictate a dissolution of the partnership at
associated in the carrying on of the business. It is will. He must, however, act in good faith, not that the
different from the winding-up of the business [Article attendance of bad faith can prevent the dissolution
1828]. of the partnership but that it can result in a liability
for damages. [Ortega v. CA (1995)]
Winding up is the actual process of settling the
partnership business or affairs after dissolution. It Bad faith, in the context here used, is no different
involves collection and distribution of partnership from its normal concept of a conscious and
assets, payment of debts, and determination of the intentional design to do a wrongful act for a
value of the interest of the partners in the dishonest purpose or moral obliquity. [Ortega v. CA
partnership. (1995)]
Termination is the point in time when all partnership IN CONTRAVENTION OF THE AGREEMENT
affairs are completely wound up and finally settled. It In contravention of the agreement between the
signifies the end of the partnership life. partners, where the circumstances do not permit a
dissolution under any other provision of this article,
EFFECT OF DISSOLUTION ON EXISTENCE OF by the express will of any partner at any time.
PARTNERSHIP
Dissolution does not terminate the existence of the [E]ven if there is a specified term, one partner can
partnership, which continues until the winding up of cause its dissolution by expressly withdrawing even
partnership affairs is completed. [Article 1829]. before the expiration of the period, with or without
justifiable cause. Of course, if the cause is not
The dissolution of a partnership must not be justified or no cause was given, the withdrawing
understood in the absolute and strict sense so that partner is liable for damages but in no case can he
at the termination of the object for which it was be compelled to remain in the firm. With his
created the partnership is extinguished, pending the withdrawal, the number of members is decreased,
winding up of some incidents and obligations of the hence, the dissolution. [Rojas v. Maglana (1990)]
partnership, but in such case, the partnership will be
reputed as existing until the juridical relations arising BY OPERATION OF LAW
out of the contract are dissolved [Testate Estate of (1) By any event which makes it unlawful for the
Mota v. Serra (1926)]. business of the partnership to be carried on or for
the members to carry it on in partnership;
CAUSES OF DISSOLUTION (2) When a specific thing which a partner had
WITHOUT VIOLATION OF THE AGREEMENT
promised to contribute to the partnership,
Without violation of the partnership agreement perishes before the delivery; in any case by the
between the partners: loss of the thing, when the partner who
(1) By the termination of the definite term or contributed it having reserved the ownership
particular undertaking specified in the thereof, has only transferred to the partnership
agreement; the use or enjoyment of the same; but the
(2) By the express will of any partner, who must act partnership shall not be dissolved by the loss of
in good faith, when no definite term or particular the thing when it occurs after the partnership has
is specified; acquired the ownership thereof;
(3) By the express will of all the partners who have (3) By the death of any partner;
not assigned their interests or suffered them to
be charged for their separate debts, either before
PAGE 250
(4) By the insolvency of any partner or of the WITH RESPECT TO PARTNERS

partnership; The authority of partners to act for the partnership is
(5) By the civil interdiction of any partner; terminated, with respect to partners:
(1) When the dissolution is not by the act, insolvency
BY DECREE OF COURT or death of a partner; or
(1) A partner may apply in court for dissolution when: (2) When the dissolution is by such act, insolvency or
(a) A partner has been declared insane in any death, when the partner acting for the
judicial proceeding or is shown to be of partnership has knowledge or notice of the cause.
unsound mind; Otherwise, each co-partner is still liable for his
(b) A partner becomes in any other way incapable share in the liability created by the partner acting
of performing his part of the partnership for the partnership, as if there was no dissolution.
contract; [Article 1832]
(c) A partner has been guilty of such conduct as
tends to affect prejudicially the carrying on of WITH RESPECT TO THIRD PERSONS
the business; With respect to persons not partners:
(d) A partner willfully or persistently commits a (1) After dissolution, a partner can bind the
breach of the partnership agreement, or partnership by any act appropriate for winding up
otherwise so conducts himself in matters partnership affairs or completing transactions
relating to the partnership business that it is unfinished at dissolution.
not reasonably practicable to carry on the (2) He can also bind it by any transaction which
business in partnership with him; would bind the partnership as if dissolution had
(e) The business of the partnership can only be not taken place, provided the other party to the
carried on at a loss; transaction:
(f) Other circumstances render a dissolution (a) Had extended credit to the partnership prior
equitable. to dissolution and had no knowledge or notice
(2) A person who acquires the interest of a partner thereof; or
may likewise apply: (b) Had not so extended credit, but had known of
(a) After the termination of the specified term or the partnership prior to dissolution, and,
particular undertaking; having no knowledge or notice of dissolution,
(b) At any time if the partnership was a the fact had not been advertised in a
partnership at will when the interest was newspaper of general circulation in the place
assigned or when the charging order was (or in each place if more than one) at which
issued. [Articles 1830 and 1831] the partnership business was regularly carried
on.
Judicial determination as to dissolution may be
resorted to when the facts which may cause such Note the character of notice required. As to persons
dissolution are open to dispute. who extended credit to the partnership prior to
dissolution, notice must be actual. As to persons who
OTHER CAUSES merely knew of the existence of the partnership,
(1) When a new partner is admitted into an existing publication in a newspaper of general circulation in
partnership; the place of business of the partnership is sufficient.
(2) When any partner retires;
(3) When the other partners assign their rights to the LIABILITY OF PARTNERS IN TRANSACTIONS AFTER
sole remaining partner; DISSOLUTION
(4) When all the partners assign their rights in the General rule: The liability of a partner, in general, is
partnership property to third persons. [Article the same as in ordinary contracts (pro rata and
1840] subsidiary).
Exceptions: In the following cases, however, the
The statutory enumeration of the causes of liability shall be satisfied out of the partnership assets
dissolution is exclusive. [De Leon (2010)] alone:
(1) When the partner had been, prior to the
EFFECT OF DISSOLUTION ON AUTHORITY OF dissolution, unknown as a partner to the person
PARTNERS with whom the contract is made;
Upon dissolution, the authority of the partners to (2) When the partner had been, prior to the
represent the partnership is confined only to acts dissolution, so far unknown or inactive in
necessary to wind up partnership affairs or to partnership affairs that the business reputation of
complete transactions begun but not then finished. the partnership could not be said to have been in
PAGE 251
any degree due to his connection with it. [Article (3) The person or partnership continuing the
1834] business.
CASES WHERE PARTNERSHIP IS NOT BOUND Such agreement may be inferred from the course of
Any act of a partner after dissolution in no case binds dealing between the creditor having knowledge of
the partnership in the following cases: the dissolution and the person or partnership
(1) Where the partnership is dissolved because it is continuing the business.
unlawful to carry on the business, unless the act
is appropriate for winding up partnership affairs; In case of dissolution by death, the individual
(2) Where the partner has become insolvent; or property of a deceased partner is liable for
(3) Where the partner has no authority to wind up obligations of the partnership incurred while he was
partnership affairs, except by a transaction with a partner, after payment of his separate debts.
one who: [Article 1835]
(a) Had extended credit to the partnership prior to
dissolution and had no knowledge or notice of his WINDING UP PARTNERS
want of authority; or WHO MAY WIND UP
(b) Had not extended credit to the partnership prior The following partners have the right to wind up the
to dissolution, and, having no knowledge or partnership affairs:
notice of his want of authority, the fact of his want (1) Those designated in an agreement;
of authority has not been advertised. (2) Those who have not wrongfully dissolved the
partnership; or
PARTNERSHIP BY ESTOPPEL AFTER DISSOLUTION (3) The legal representative of the last surviving
Article 1834 does not affect the liability under Article partner, who was not insolvent.
1825 of any person who, after dissolution, represents
himself or consents to another representing him as a However, any partner or his legal representative or
partner in a partnership engaged in carrying on assignee may obtain winding up by the court, upon
business [Article 1834]. cause shown. [Article 1836]
CONTRACTS AFTER DISSOLUTION BY SPECIFIC MANNER OF WINDING UP

CAUSES Thus, winding up of partnership affairs may be done:
General rule: A contract entered into by a partner (1) Extrajudicially, by the partners themselves; or
acting for the partnership after dissolution by act, (2) Judicially, under the control and direction of the
death or insolvency of a partner binds the other proper court.
partners.
NATURE OF JUDICIAL LIQUIDATION
Exceptions: The action for liquidation of the partnership is
(1) The dissolution being by act of any partner, the personal. The fact that sale of assets, including real
partner acting for the partnership had knowledge property, is involved does not change its character,
of the dissolution; or such sale being merely a necessary incident of the
(2) The dissolution being by death or insolvency of a liquidation of the partnership, which should precede
partner, the partner acting for the partnership and/or is part of its process of dissolution.
had knowledge or notice of the death or [Claridades v. Mercader (1966)]
insolvency. [Article 1833]
POWERS OF WINDING UP PARTNER
The general rule assumes that the partner acting for In general, the liquidating partner may perform acts
the partnership has no knowledge or notice of the appropriate for the winding up of partnership affairs.
specific cause of dissolution.
RIGHTS OF PARTNERS IN CASE OF DISSOLUTION
EFFECT OF DISSOLUTION ON EXISTING LIABILITY DISSOLUTION WITHOUT VIOLATION OF THE AGREEMENT
OF PARTNERS Unless otherwise agreed, when dissolution is caused
General rule: Dissolution does not of itself discharge in any way, except in contravention of the
the existing liability of any partner. partnership agreement, each partner, as against his
co-partners and all partners claiming through them
Exception: A partner may be so relieved when there is in respect of their interests in the partnership, may
an agreement to that effect between: have the partnership property applied to discharge
(1) Himself; the partnership liabilities, and the surplus applied in
(2) The partnership creditor; and cash to the net amount owing to the respective
PAGE 252
partners [referred to as the right under 1st par., Article Where a partnership contract is rescinded on such
1837]. grounds, the party entitled to rescind, without
prejudice to any other right, is entitled:
In case of dissolution by bona fide expulsion of a (1) After satisfying partnership liabilities to third
partner, and the expelled partner is discharged from persons, to a lien on, or right of retention of, to
all partnership liabilities, either by payment or the surplus of the partnership property:
agreement to that effect (Article 1835), he shall (a) For any sum of money paid by him for the
receive only the net amount due him from the purchase of an interest in the partnership; and
partnership. (b) For any capital or advances contributed by
him.
DISSOLUTION IN CONTRAVENTION OF THE AGREEMENT (2) After satisfying partnership liabilities to third
Rights of partner who has not caused the dissolution persons, to stand in the place of partnership
wrongfully: creditors for any payments made by him in
(a) To demand the right under 1st par., Article 1837; respect of the partnership liabilities; and
(b) To be indemnified for damages for breach of the (3) To be indemnified by the person guilty of the
agreement against the partner who caused the fraud or making the representation against all
dissolution wrongfully; debts and liabilities of the partnership. [Article
(c) To continue the business in the same name, by 1838]
themselves or jointly with others, during the
agreed term for the partnership and for that SETTLING OF ACCOUNTS BETWEEN PARTNERS
purpose may possess the partnership property Subject to any agreement to the contrary, the
provided they: following rules shall be observed in settling accounts
(i) Secure the payment by bond approved by the between partners after dissolution.
court; or
(ii) Pay any partner who has caused the COMPOSITION OF PARTNERSHIP ASSETS
dissolution wrongfully the value of his interest The assets of the partnership are:
in the partnership, less any damages (1) The partnership property; and
recoverable, and indemnity against all present (2) The contributions of the partners necessary for
or future partnership liabilities. the payment of all the liabilities.
Rights of partner who has caused the dissolution In accordance with the subsidiary liability of the
wrongfully: partners, the partnership property shall be applied
(a) If the business is not continued, all the rights 1st first to satisfy any liability of the partnership.
par., Article 1837, subject to liability for damages;
(b) If the business is continued, the right, as against AMOUNT OF CONTRIBUTION FOR LIABILITIES
his co-partners and all claiming through them, to: The rules on distribution of losses [Article 1979] shall
(i) Ascertainment, without considering the value determine the contributions of the partners. As such:
of the goodwill of the business, and payment to (1) The contribution shall be in conformity with the
him in cash the value of his partnership agreement.
interest, less any damage, or have the (2) If only the share in profits has been stipulated, the
payment secured by a bond approved by the contribution shall be in the same proportion.
court; and (3) In the absence of any stipulation, the contribution
(ii) Be released from all existing liabilities of the shall be in proportion to the capital contribution.
partnership. [Article 1837]
ENFORCEMENT OF CONTRIBUTION
The goodwill of a business may be defined to be the The following persons have the right to enforce the
advantage which it has from its establishment or contributions:
from the patronage of its customers, over and above (1) An assignee for the benefit of creditors;
the mere value of its property and capital. The (2) Any person appointed by the court; or
goodwill (which includes the firm name) is part of the (3) To the extent of the amount which he has paid in
partnership assets and may be subject of sale. [De excess of his share of the partnership liability, any
Leon (2010)] partner or his legal representative.
RIGHTS OF PARTNERS IN CASE OF RESCISSION The individual property of a deceased partner shall
A partner, induced by fraud or misrepresentation to be liable for the contributions.
become a partner, may rescind the contract.
PAGE 253
ORDER OF APPLICATION OF ASSETS with the consent of the retired partner or the
The partnership liabilities shall rank, in order of representative of the deceased partner, without
payment, as follows: assignment of their rights to partnership
(a) Those owing to creditors other than partners; property.
(b) Those owing to partners other than for capital (3) When the cause of dissolution is the assignment
and profits; by all the partners or their representatives of their
(c) Those owing to partners in respect of capital; rights in partnership property to one or more third
(d) Those owing to partners in respect of profits. persons who promise to pay the debts and who
continue the business of the partnership.
DOCTRINE OF MARSHALING OF ASSETS
When partnership property and the individual LIABILITY OF A NEW PARTNER
properties of the partners are in possession of a court The liability to the creditors of the dissolved
for distribution: partnership of a new partner in the partnership
(1) Partnership creditors shall have priority on continuing the business shall be satisfied out of the
partnership property; and partnership property alone. However, he may,
(2) Separate creditors on individual property, saving through agreement, assume individual liability.
the rights of lien of secured creditors.
(3) Anything left from either shall be applied to PRIORITY OF CREDITORS OF DISSOLVED PARTNERSHIP
satisfy the other. The creditors of dissolved partnership have prior
right to any claim of the retired partner or the
DISTRIBUTION OF PROPERTY OF INSOLVENT PARTNER representative of the deceased partner against the
Where a partner has become insolvent or his estate person or partnership continuing the business.
is insolvent, the claims against his separate property
shall rank in the following order: Nothing in this article shall be held to modify any
(1) Those owing to separate creditors; right of creditors to set aside any assignment on the
(2) Those owing to partnership creditors; ground of fraud.
(3) Those owing to partners by way of contribution.
[Article 1839] EFFECT OF CONTINUING USE OF PARTNERSHIP NAME
The use by the person or partnership continuing the
RIGHTS OF CREDITORS OF DISSOLVED business of the partnership name, or the name of a
PARTNERSHIP deceased partner as part thereof, shall not of itself
CREDITORS OF DISSOLVED PARTNERSHIP make the individual property of the deceased partner
AS CREDITORS OF NEW PARTNERSHIP liable for any debts contracted by such person or
In the following cases, creditors of the dissolved partnership. [Article 1840]
partnership are also creditors of the person or
partnership continuing the business: RETIRED OR REPRESENTATIVE OF DECEASED
(1) When the business is continued without PARTNER
liquidation, and the cause of dissolution is: Unless otherwise agreed upon, when any partner
(a) Admission of a new partner into the existing retires or dies, and the business is continued without
partnership; any settlement of accounts as between him or his
(b) Retirement or death of any partner, and his estate and the person or partnership continuing the
rights to partnership property are assigned to: business, he or his legal representative as against
(i) Two or more of the partners; or such person or partnership, subject to the prior rights
(ii) One or more of the partners and one or of creditors of the dissolved partnership:
more third persons. (1) May have the value of his interest at the date of
(c) Retirement of all but one partner, and their dissolution ascertained; and
rights to partnership property are assigned to (2) Shall receive as an ordinary creditor:
the remaining partner, who continues the (a) An amount equal to the value of his interest in
business, either alone or with others; the dissolved partnership with interest; or
(d) Wrongful dissolution by any partner, and the (b) At his option or at the option of his legal
remaining partners continue the business, representative, in lieu of interest, the profits
either alone or with others; attributable to the use of his right in the property of
(e) Expulsion of a partner, and the remaining the dissolved partnership. [Article 1841]
partners continue the business, either alone or
with others. RIGHT TO AN ACCOUNT
(2) When the cause of dissolution is the retirement or The right to an account of his interest shall accrue to
death of any partner, and business is continued any partner, or his legal representative, at the date of
PAGE 254
dissolution, in the absence of any agreement to the

contrary, as against: ADVANTAGES OF LIMITED PARTNERSHIP
(1) The winding up partners; (1) For general partners, to secure capital from
(2) The surviving partners; or others while retaining control and supervision for
(3) The person or partnership continuing the the business;
business [Article 1842]. (2) For limited partners, to have a share in the profits
without risk of personal liability.
EXISTENCE OF RIGHT
[T]he right to demand an accounting exists as long GENERAL AND LIMITED PARTNER
as the partnership exists. Prescription begins to run DISTINGUISHED
only upon the dissolution of the partnership when General Partner Limited Partner
the final accounting is done. [Fue Leung v. IAC
(1989)] Extent of liability
NEED FOR LIQUIDATION Personally, but Only to the extent of his

The profits of the business cannot be determined by subsidiarily, liable for capital contributions
taking into account the result of one particular obligations of the
transaction instead of all the transactions had. partnership
Hence, the need for a general liquidation before a
member of a partnership may claim a specific sum as Right to participate in management
his share of the profits. [Sison v. McQuaid (1953)] Unless otherwise agreed No right to participate in
upon, all general partners management
However, no liquidation is necessary when there is have an equal right to
already a settlement or an agreement as to what he manage the partnership
shall receive [De Leon (2010)].
Nature of contribution
Cash, property or industry Cash or property only, not
industry
Limited partnership
Property party in proceedings by or against partnership
DEFINITION
A limited partnership is one formed by two or more Proper party Not proper party, unless:
persons under the provisions of the following article, (1) He is also a general
having as members one or more general partners partner; or
and one or more limited partners. The limited (2) Where the object of
partners as such shall not be bound by the the proceedings is to
obligations of the partnership. [Article 1843] enforce his right against
or liability to the
CHARACTERISTICS partnership
(1) A limited partnership is formed by compliance Name in firm name
with the statutory requirements [Article 1844].
(2) The business is controlled or managed by one or Name may appear in the Name must not appear in
more general partners, who are personally liable firm name the firm name
to creditors [Articles 1848 and 1850].
(3) One or more limited partners contribute to the Prohibition to engage in other business
capital and share in the profits but do not
manage the business and are not personally Prohibited (qualified) Not prohibited
liable for partnership obligations beyond their
capital contributions [Articles 1845, 1848 and Effect of retirement, death, insanity or insolvency
1856].
(4) Obligations or debts are paid out of the Dissolves partnership Does not dissolve; rights
partnership assets and the individual property of transferred to executor or
the general partners. administrator for selling
(5) The limited partners may have their contributions his estate
back subject to conditions prescribed by law Assignability of interest
[Articles 1844 and 1957].
PAGE 255
General Partner Limited Partner A limited partnership is formed if there has been
substantial compliance in good faith with the
Not assignable Assignable requirements.
A partnership cannot become a limited partner. A

general partnership may be changed into a limited
GENERAL AND LIMITED PARTNERSHIP one. A partner in the former general partnership may
DISTINGUISHED become a limited partner in the limited partnership
General Partnership Limited Partnership formed [De Leon (2010)].
Creation PURPOSE OF FILING

The purpose of the requirement of filing the
May be constituted in any Partners must: certificate is to give actual or constructive notice to
form, with exceptions (1) Sign and swear to a potential creditors or persons dealing with the
certificate in compliance partnership to acquaint them with its essential
with Article 1844; and features, including the limited liability of limited
(2) File the certificate for partners.
record in the SEC
NO SUBSTANTIAL COMPLIANCE
Composition When there is failure to substantially comply with the
Only general partners One or more general, and requirements:
one or more limited (1) In relation to third persons, the partnership is
partners general, unless they recognized that the firm as a
limited partnership;
Firm name (2) As between the partners, the partnership remains
limited, since they are bound by their agreement
Must contain the word Must include the word [De Leon (2010)].
"Company" (SEC Memo "Limited" (SEC Memo Circ
Circ No. 14-00), except for No. 14-00) FIRM NAME
professional partnerships The surname of a limited partner shall not appear in
the partnership name unless:
May or may not include Must not include name of (1) It is also the surname of a general partner; or
the name of one or more limited partners, unless: (2) Prior to the time when the limited partner
of the partners (1) It is also the surname became such, the business had been carried on
of a general partner; or under a name in which his surname appeared.
(2) Prior to the time when
the limited partner A limited partner whose surname appears in a
became such, the partnership name contrary to this prohibition is liable
business has been carried as a general partner to partnership creditors who
on under a name in which extend credit without actual knowledge that he is not
his surname appeared. a general partner.
Rules governing dissolution and winding up FALSE STATEMENT IN THE CERTIFICATE
Articles 1828-1842 Articles 1860-1863 If the certificate contains a false statement, one who
suffers loss by reliance thereon may hold liable any
party to the certificate who knew the statement to be
false:
FORMATION OF LIMITED PARTNERSHIP (1) At the time he signed the certificate; or
Two or more persons desiring to form a limited (2) Subsequently, but within a sufficient time before
partnership shall: the statement was relied upon to enable him to
(1) Sign and swear to a certificate stating the items cancel or amend the certificate, or to file a
in Article 1844; and petition for its cancellation or amendment.
(2) File for record the certificate in the Office of the
Securities and Exchange Commission. Requisites:
(1) The partner knew the statement to be false at the
time he signed the certificate, or subsequently,
but having sufficient time to cancel or amend it,
PAGE 256
or file a petition for its cancellation or

amendment, and he failed to do so; Thus, a general partner is vested with the entire
(2) The person seeking to enforce liability has relied control of the business. It is in consideration of his
upon the false statement in transacting business unlimited personal liability for the obligation of the
with the partnership; and partnership that he is granted the general authority
(3) The person suffered loss as a result of reliance to manage.
upon such false statement.
Qualification: Written consent or ratification of the
ADMISSION OF ADDITIONAL LIMITED PARTNERS specific act by all the limited partners is necessary to
After the formation of a limited partnership, authorize the general partners to:
additional limited partners may be admitted upon (1) Do any act in contravention of the certificate;
filing an amendment to the original certificate. (2) Do any act which would make it impossible to
carry on the ordinary business of the partnership;
GENERAL AND LIMITED PARTNER AT THE SAME TIME (3) Confess a judgment against the partnership;
A person may be a general and a limited partner in (4) Possess partnership property, or assign their
the same partnership at the same time, provided rights in specific property, for other than a
that this fact shall be stated in the certificate. partnership purpose;
(5) Admit a person as a general partner;
A person who is a general, and also at the same time (6) Admit a person as a limited partner, unless the
a limited partner, shall have all the rights and right to do so is given in the certificate;
powers and be subject to all the restrictions of a (7) Continue the business with partnership property
general partner; except that, in respect to his on the death, retirement, insanity, civil
contribution, he shall have the rights against the interdiction or insolvency of a general partner,
other members which he would have had if he were unless the right so to do is given in the certificate.
not also a general partner. [Article 1853] [Article 1851]
MANAGEMENT OF LIMITED PARTNERSHIP The acts enumerated are acts of strict dominion.
A limited partner shall not become liable as a
general partner unless, in addition to the exercise of OBLIGATIONS OF A LIMITED PARTNER
his rights and powers as a limited partner, he takes OBLIGATIONS RELATED TO CONTRIBUTION
part in the control of the business [Article 1848]. The contributions of a limited partner may be cash or
property, but not services [Article 1845].
MANAGEMENT BY GENERAL PARTNERS
Only the general partners have the right to manage A limited partner is liable for partnership obligations
the partnership. The limited partners are not so when he contributes services instead of only money
entitled. or property to the partnership [De Leon (2010)].
LIABILITY OF LIMITED PARTNER FOR PARTICIPATING IN A limited partner is liable to the partnership:
CONTROL (1) For the difference between his actual contribution
A limited partner is liable as a general partner (i.e., and that stated in the certificate as having been
subsidiarily liable) for the obligations of the made;
partnership if he takes part in the control of the (2) For any unpaid contribution which he agreed in
business. The control contemplated is active the certificate to make in the future at the time
participation in the management of the business. It and on the conditions stated in the certificate. [1st
does not contemplate mere giving of advice to par., Article 1858]
general partners which may be followed or not.
He holds as trustee for the partnership:
The abstinence of the limited partner from (1) Specific property stated in the certificate as
participation in the transaction of the business of the contributed by him, but which was not
firm is essential to his exemption from personal contributed or which has been wrongfully
liability. [De Leon (2010)]. returned; and
(2) Money or other property wrongfully paid or
POWERS OF GENERAL PARTNER conveyed to him on account of his contribution.
General rule: A general partner shall have the rights [2nd par., Article 1858]
and powers and be subject to all restrictions and
liabilities of a partner in a partnership without The liabilities under Article 1858 can be waived or
limited partners. compromised only by the consent of all members.
PAGE 257
Such waiver or compromise, however, shall not affect

the right to enforce said liabilities of a creditor: Note: In a general partnership, the interest may be
(1) Who extended credit, or redeemed with partnership property with the
(2) Whose claim arose, after the filing or before a consent of all the partners whose interests are not
cancellation or amendment of the certificate, to charged [Article 1814].
enforce such liabilities.
RIGHTS OF A LIMITED PARTNER
Even after a limited partner has rightfully received RIGHTS OF LIMITED PARTNER, IN GENERAL
the return in whole or in part of his capital A limited partner shall have the same rights as a
contribution, he is still liable to the partnership for general partner to:
any sum, not in excess of such return with interest, (1) Require that the partnership books be kept at the
necessary to discharge its liabilities to all creditors: principal place of business of the partnership;
(1) Who extended credit, or (2) To inspect and copy any of them at a reasonable
(2) Whose claims arose, before such return. [Article hour;
1858] (3) To demand true and full information of all things
affecting the partnership;
A person who has contributed capital to a (4) To demand a formal account of partnership
partnership, erroneously believing that he has affairs whenever circumstances render it just and
become a limited partner, but his name appears in reasonable; and
the certificate as a general partner or he is not (5) To ask for dissolution and winding up by decree
designated as a limited partner, is not personally of court;
liable as a general partner by reason of his exercise (6) To receive a share of the profits or other
of the rights of a limited partner, provided: compensation by way of income; and
(1) On ascertaining the mistake, he promptly (7) To receive the return of his contribution provided
renounces his interest in the profits of the the partnership assets are in excess of all its
business or other compensation by way of income liabilities.
[Article 1852];
(2) He does not participate in the management of RIGHT TO TRANSACT BUSINESS WITH PARTNERSHIP
the business [Article 1848]; and A limited partner may:
(3) His surname does not appear in the partnership (1) Loan money to the partnership;
name [Article 1846]. (2) Transact other business with the partnership; and
(3) Receive a pro rata share of the partnership assets
LIABILITY TO PARTNERSHIP CREDITORS with general creditors if he is not also a general
General rule: A limited partner is not liable as a partner.
general partner. His liability is limited to the extent of
his contributions. Limitations: A limited partner, with respect to his
transactions with the partnership, cannot:
Exceptions: The limited partner is liable as a general (1) Receive or hold as collateral security any
partner when: partnership property; or
(1) His surname appears in the partnership name, (2) Receive any payment, conveyance, or release
with certain exceptions. from liability if it will prejudice the right of third
(2) He takes part in the control of the business. persons.
LIABILITY TO SEPARATE CREDITORS Violation of the prohibition is considered a fraud on

On due application to a court of competent the creditors of the partnership. [Article 1854]
jurisdiction by any separate creditor of a limited
partner, the court may: RIGHT TO SHARE IN PROFITS
(1) Charge his interest with payment of the A limited partner may receive from the partnership
unsatisfied amount of such claim; the share of the profits or the compensation by way
(2) Appoint a receiver; and of income stipulated for in the certificate.
(3) Make all other orders, directions and inquiries
which the circumstances of the case may require. This right is subject to the condition that partnership
assets will still be in excess of partnership liabilities
The interest so charged may be redeemed with the after such payment.
separate property of any general partner, but may
not be redeemed with partnership property. [Article Ratio: Otherwise, he will receive a share to the
1862] prejudice of third-party creditors.
PAGE 258
RIGHT TO ASSIGN INTEREST

In determining the partnership liabilities, the The interest of a limited partner is assignable. The
liabilities to the limited partners (for their assignee may become:
contributions) and to general partners (whether for (1) A substituted limited partner; or
contributions or not) are not included. (2) A mere assignee.
RIGHT TO RETURN OF CONTRIBUTION A substituted limited partner is a person admitted to

A limited partner may have his contributions all the rights of a limited partner who has died or has
withdrawn or reduced when: assigned his interest in a partnership. He has all the
(1) All the liabilities of the partnership, except rights and powers, and is subject to all the
liabilities to general partners and to limited restrictions and liabilities of his assignor, except
partners on account of their contributions, have those liabilities which:
been paid or there remains property of the (1) The assignee was ignorant of; and
partnership sufficient to pay them; (2) Cannot be ascertained from the certificate.
(2) The consent of all members is had, unless the
return may be demanded as a matter of right; An assignee is only entitled to receive the share of the
and profits or other compensation by way of income, or
(3) The certificate is cancelled or so amended as to the return of contribution, to which the assignor
set forth the withdrawal or reduction. would otherwise be entitled. He has no right:
(1) To require any information or account of the
The return of his contributions may be demanded, as partnership transactions;
a matter of right (even when not all the other (2) To inspect the partnership books.
partners consent), the return of his contribution
when (1) and (2) above are complied with: An assignee has the right to become a substituted
(1) On the dissolution of the partnership; limited partner if:
(2) Upon the arrival of the date specified in the (1) All the partners consent thereto;
certificate for the return; or (2) The assignor, being empowered to do so by the
(3) After the expiration of a 6-month notice in writing certificate, gives him that right.
given by him to the other partners, if no time is
fixed in the certificate for: An assignee becomes a substituted limited partner
(a) the return of the contribution; or when the certificate is appropriately amended.
(b) the dissolution of the partnership. [Article 1859]
General rule: A limited partner, irrespective of the RIGHT TO ASK FOR DISSOLUTION
nature of his contribution has only the right to A limited partner may have the partnership dissolved
demand and receive cash in return for his and its affairs wound up:
contribution. (1) When his demand for the return of his
contribution is denied although he has a right to
Exceptions: He may receive his contribution in a form such return;
other than cash when: (2) When he has such right, but his contribution is
(1) There is a statement in the certificate to the not paid because the partnership property is
contrary; or insufficient to pay its liabilities. [Article 1857]
(2) All the members of the partnership consent.
CAUSES OF DISSOLUTION OF LIMITED
PREFERENCE OF LIMITED PARTNERS PARTNERSHIP
General rule: The limited partners stand on equal A limited partnership is dissolved in much the same
footing as to their: way and causes as an ordinary partnership [De Leon
(1) Compensation by way of income; (2010)].
(2) Return of contribution; or
(3) Any other matter. General rule: The retirement, death, insolvency,
insanity or civil interdiction of a general partner
Exception: By an agreement of all the partners dissolves the partnership.
(general and limited) in the certificate, priority or
preference may be given to some limited partners Exception: It is not so dissolved when the business is
over others with respect to the matters enumerated. continued by the remaining general partners:
[Article 1855] (1) Under a right to do so stated in the certificate; or
(2) With the consent of all members. [Article 1860]
PAGE 259
On the death of a limited partner, his executor or (3) An additional limited partner is admitted;
administrator shall have: (4) A person is admitted as a general partner;
(1) All the rights of a limited partner for the purpose (5) A general partner retires, dies, becomes insolvent
of settling his estate; and or insane, or is sentenced to civil interdiction and
(2) The power to constitute an assignee as a the business is continued;
substituted limited partner, if the deceased was (6) There is a change in the character of the business
so empowered in the certificate. of the partnership;
(7) There is a false or erroneous statement in the
The estate of a deceased limited partner shall be certificate;
liable for all his liabilities as a limited partner. [Article (8) There is a change in the time as stated in the
1861] certificate for the dissolution of the partnership or
for the return of a contribution;
SETTLEMENT OF ACCOUNTS (9) A time is fixed for the dissolution of the
ORDER OF PAYMENT partnership, or the return of a contribution, no
In settling accounts after dissolution, the liabilities of time having been specified in the certificate; or
the partnership shall be entitled to payment in the (10) The members desire to make a change in any
following order: other statement in the certificate in order that it
(1) Those to creditors, including limited partners shall accurately represent the agreement among
except those on account of their contributions, in them.
the order of priority as provided by law;
(2) Those to limited partners in respect to their share REQUIREMENTS FOR AMENDMENT OR CANCELLATION
of the profits and other compensation by way of To amend or cancel a certificate:
income in their contributions; (1) The amendment or cancellation must be in
(3) Those to limited partners in respect to the capital writing;
of their contributions; (2) It must be signed and sworn to by all the
(4) Those to general partners other than for capital members including the new members, and the
and profits; assigning limited partner in case of substitution
(5) Those to general partners in respect to profits; or addition of a limited or general partner; and
(6) Those to general partners in respect to capital. (3) The writing to amend (with the certificate, as
amended) or to cancel must be filed for record in
Note: In settling accounts of a general partnership, the SEC.
those owing to partners in respect to capital enjoy
preference over those in respect to profits. From the moment the amended certificate/writing or
a certified copy of a court order granting the petition
SHARE IN THE PARTNERSHIP ASSETS for amendment has been filed, such amended
The share of limited partners in respect to their certificate shall thereafter be the certificate of
claims for capital, profits, or for compensation by way partnership. [Article 1865]
of income, is in proportion of their contribution,
unless:
(1) There is a statement in the certificate as to their
share in the profits; or Contract of agency
(2) There is a subsequent agreement fixing their
share. [Article 1863] DEFINITION
By the contract of agency, a person binds himself to
AMENDMENT OR CANCELLATION OF render some service or to do something in
CERTIFICATE representation or on behalf of another, with the
WHEN CERTIFICATE IS CANCELLED consent or authority of the latter [Article 1868].
The certificate shall be cancelled when:
(1) The partnership is dissolved; or Agency may refer to both a contract, as defined in
(2) All limited partners cease to be such. the provision, and the representative relation
created.
WHEN CERTIFICATE IS AMENDED
A certificate shall be amended when: As a relation, agency is fiduciary (based on trust and
(1) There is a change in the name of the partnership confidence), which implies a power in an agent to
or in the amount or character of the contribution contract with a third person on behalf of a principal.
of any limited partner;
(2) A person is substituted as a limited partner;
PAGE 260
The basis of agency is representation [Victorias Ratio: One who acts through an agent in law does
Milling v. CA (2000)]. the act himself. As such, the capacity to act by an
agent depends in general on the capacity of the
In an agent-principal relationship, the personality of principal to do the act himself as if he were present.
the principal is extended through the facility of the
agent. In so doing, the agent, by legal fiction, INTENTION OF PARTIES
becomes the principal, authorized to perform all acts On the part of the principal, there must be an actual
which the latter would have him do. Such a intention to appoint or an intention naturally
relationship can only be effected with the consent of inferable from his words or actions; and on the part of
the principal, which must not, in any way, be the agent, there must be an intention to accept the
compelled by law or by any court. [Orient Air v. CA appointment and act on it. [Victorias Milling v. CA
(1991)] (2000)]
CHARACTERISTICS General rule: In the absence of such intent, there is

The contract of agency is: generally no agency.
(1) Consensual, perfected by mere consent;
(2) Nominate, has its own name; Exceptions:
(3) Preparatory, entered into as a means to enter into (1) Agency by estoppel; and
other contracts; (2) Agency by operation of law.
(4) Principal, does not depend on another contract
for existence and validity; CONSENT OF PARTIES
(5) Bilateral, if for compensation, giving rise to An agency is either express or implied. This is true on
reciprocal rights and obligations, but unilateral, if the part of the principal as well as on the part of the
gratuitous, creating obligations only for the agent. It does not require express appointment and
agent. acceptance.
CONSTITUTION OF AGENCY As to the principal, the appointment of an agent may

ESSENTIAL ELEMENTS be express, or implied:
(1) There is consent, express or implied, of the parties (1) From his acts;
to establish the relationship; (2) From his silence or lack of action; or
(2) The object is the execution of a juridical act in (3) From his failure to repudiate the agency, knowing
relation to third persons; that another person is acting on his behalf
(3) The agent acts as a representative and not for without authority.
himself; and
(4) The agent acts within the scope of his authority. The appointment may be oral, unless the law
[Rallos v. Felix Go Chan (1978)] requires a specific form. [Article 1869]
PARTIES As to the agent, acceptance may also be express, or

(1) Principal, one whom the agent represents and implied.
from whom he derives his authority; and (1) From his acts which carry out the agency;
(2) Agent, who acts for and represents the principal, (2) From his silence or inaction according to the
having derivative authority in carrying out the circumstances [Article 1870];
business of the latter. (3) Both the principal and the agent being present if:
(a) The principal delivers his power of attorney to
Juridical persons such as corporations and the agent; and
partnerships can be principals and agents [Article (b) The agent receives it without any objection
1919(4)]. [Article 1871];
(4) Both the principal and the agent being
CAPACITY OF PARTIES absent, when:
(1) A principal must have legal capacity to enter into (a) The principal transmits his power of attorney
contract in his own right. to the agent, who receives it without any
(2) An agent must have legal capacity to enter into objection; or
the contract of agency, although he may not have (b) When the principal entrusts to him by letter or
capacity to enter into the particular contract telegram a power of attorney with respect to
subject of agency. the business in which he is habitually engaged
as an agent, and he did not reply to the letter
or telegram.
PAGE 261
PRESUMPTION OF EXISTENCE
In other cases between persons who are absent, General rule: It [agency] must exist as a fact. The law
acceptance cannot be implied from the silence of the makes no presumption thereof. The person alleging
agent. [Article 1872] it has the burden of proof to show, not only the fact
of its existence, but also its nature and extent.
POWER OF ATTORNEY [People v. Yabut (1977)]
A power of attorney is an instrument in writing by
which one person, as principal, appoints another as Exceptions: A presumption of agency may arise:
his agent and confers upon him the authority to (1) Where an agency may arise by operation of law
perform certain specified acts of kinds of acts on his (e.g., all the partners being considered agents of
behalf. The written authorization itself is the power the partnership when the manner of
of attorney. It has also been called a "letter of management has not been agreed upon); or
attorney." (2) To prevent unjust enrichment. [De Leon (2010)]
Its primary purpose is not to define the authority of COMMUNICATION OF EXISTENCE OF AGENCY
the agent, but to evidence the authority of the agent There are two ways of giving notice of agency (that a
to third parties with whom the agent deals. The person has given a power of attorney to a third
person holding the power of attorney is designated person), with different effects:
as an "attorney-in-fact." (1) If a person specially informs another (e.g., by
letter), the person appointed as agent is
FORM OF CONTRACT considered such with respect to the person
General rule: There are no formal requirements specially informed;
governing the appointment of an agent. (2) If a person states by public advertisement, the
person appointed as agent is considered such
Exceptions: with regard to any person.
(1) When the law requires a specific form [2nd par.,
Article 1869]; In either case, the power of the agent continues in
(2) When a sale of piece of land or any interest full force until the notice is rescinded in the same
therein is through an agent, in which case the manner in which it was given. [Article 1873]
authority shall be in writing; otherwise the sale is
void [Article 1874]; DUTY OF THIRD PERSON
(3) When the law requires a special power of attorney The person dealing with the agent must act with
[Article 1878]. ordinary prudence and reasonable diligence.
Obviously, if he knows or has good reason to believe
DESIGNATION BY THE PARTIES that the agent is exceeding his authority, he cannot
The manner in which the parties designate the claim protection. [Keeler Electric v. Rodriguez (1922)]
relationship is not controlling. The use of this term
("agent") in one clause of the contract cannot EFFECT
dominate the real nature of the agreement as EXTENSION OF PERSONALITY
revealed in other clauses, no less than in the caption It bears stressing that in an agent-principal
["agency agreement"] of the agreement itself. relationship, the personality of the principal is
[Albadejo y Cia v. Phil. Refining (1923)] extended through the facility of the agent. In so
doing, the agent, by legal fiction, becomes the
ACTS DELEGATED principal, authorized to perform all acts which the
General rule: What a person may do in person, he latter would have him do. [Litonjua v. Eternit Corp.
may do through another. (2006)]
Exceptions: THEORY OF IMPUTED KNOWLEDGE

(1) Personal acts, which the law or public policy An important implication of this extension of
requires to be performed personally (e.g., to vote, personality is the general rule that knowledge of the
make a will, make statements under oath, or agent is imputed to the principal even though the
attend board meetings as director or trustee of a agent never communicated such knowledge to the
corporation); principal.
(2) Criminal acts;
(3) Acts not allowed by law to be done by the Requisites:
principal. (1) Actual notice to the agent;
PAGE 262
(2) Notice must pertain to a matter of fact and not of Agency Independent Contractor
law;
(3) The fact must be within the scope of the agent's Control
authority.
An agent acts under the An independent
Thus, it is only logical that the agent is required to control and instruction of contractor is not subject to
notify the principal of all matters that came to his the principal control, except insofar as
attention that are material to the subject matter of the result of the work is
the agency. concerned
Exceptions: Liability for tort

(1) Where the agent's interests are adverse to those Principal is liable for torts Employer is not liable for
of the principal; committed by the agent torts committed by the
(2) Where the agent's duty is not to disclose the with the scope of his independent contractor
information (e.g., he is informed by way of authority
confidential information);
(3) Where the person claiming the benefit of the rule Sub-agents
colludes with the agent to defraud the principal.
Agents of the agent is still Employees of
DISTINGUISHED FROM OTHER CONTRACTS subject to the control of independent contractor
the principal are not subject to control
Agency Partnership
of his employer
Representation
An agent acts only for the A partner acts for the Agency Lease of Service
principal other partners, the
Basis
partnership and himself
Representation Employment
Control
Purpose
An agent's power to bind A partner's power to bind
the principal is subject to his co-partners is not Execution of juridical acts Execution of piece of work
the latter's control subject to their control in relation to third persons or rendition of service
Personal liability Authorized acts
An agent does not A partner is personally Juridical acts (creation, Material acts only
assume personal liability, liable with all his property, modification, extinction of
if he acts within the scope after exhaustion of the relations with third
of his authority partnership properties parties)
Share in profits Discretion
An agent is not entitled to A partner is entitled to a An agent is authorized to Ordinarily, lessor performs
profits, only compensation share in the profits of the exercise discretion only ministerial functions
partnership
Parties
Three parties are involved Two parties are involved
One factor which most clearly distinguishes agency
from other legal concepts is control; one person – the
agent – agrees to act under the control or direction
of another – the principal. Indeed, the very word Agency Lease of Property
"agency" has come to connote control by the
principal. The control factor, more than any other, Control
has caused the courts to put contracts between
principal and agent in a separate category. [Victorias An agent acts under the A lessee is not subject to
Milling v. CA (2000)] control and instruction of the control of the lessor
the principal
PAGE 263
Agency Lease of Property Agency Guardianship

Things involved Person represented
Agency may involve things Lease of property involves An agent represents a A guardian represents an
other than property property only capacitated person incapacitated person
Binding power Source of authority
An agent can bind the Lessee cannot bind the An agent is appointed by A guardian is appointed
principal lessor the principal by the court
Control
Agency to Sell Sale An agent is subject to the A guardian is not subject

control of the principal to the control of the ward
Ownership of goods
Binding power
Principal retains Buyer acquires ownership
ownership An agent can make the A guardian has no power
principal principally liable to impose personal
Payment liability on the ward
An agent delivers the A buyer pays the purchase
proceeds of the sale to the price
principal Agency Trust
Return of goods Title and control of property
Generally, an agent can Generally, a buyer cannot Title passes to the trustee Title retained by principal
return goods unsold return the goods bought
Control
Dealing with the goods
An agent is subject to the A trustee is only subject to
An agent deals with the A buyer, being the owner, control of the principal the stipulated guidance of
goods according to the can deal with the goods as the cestui
instructions of the he pleases
principal Termination
In general, an agency may In general, a trust may be
be revoked at any time terminated only when its
Agency to Buy Sale purpose is fulfilled
Ownership of goods
Ownership is acquired in Ownership is transferred
behalf of the principal to the buyer
Changes in price
Kinds of agency
Generally, any change in A buyer cannot adjust the KINDS OF AGENCY, IN GENERAL
the price is borne by the price already agreed upon AS TO MANNER OF ITS CREATION
principal (1) Express;
(2) Implied.
Payment
AS TO CAUSE OR CONSIDERATION
Price is paid in behalf of Price is paid by the buyer (1) Gratuitous; or
the principal (2) Compensated or onerous.
Agency is presumed to be for a compensation, unless

there is proof to the contrary [Article 1875].
PAGE 264
AS TO EXTENT OF BUSINESS COVERED GENERAL AGENCY

(1) Universal; General agency comprises all the business of the
(2) General; or principal.
(3) Special.
SPECIAL AGENCY
AS TO AUTHORITY CONFERRED Special agency comprises one or more specific
(1) Couched in general terms; or transactions.
(2) Couched in specific terms.
General Agency Special Agency
AS TO ITS NATURE AND EFFECTS
(1) Ostensible or representative, where the agent Scope of authority
acts in the name and representation of the
principal [Article 1868]; All acts connected with Only specific authorized
(2) Simple or commission, where the agent acts in the business or acts or those necessarily
his own name but for the account of the principal. employment in which implied
agent is engaged
AS TO KINDS OF PRINCIPAL
(1) With a disclosed principal, where, at the time the Nature of service authorized
transaction was contracted by the agent, the Involves continuous Usually involves a single
other party thereto has known: service transaction
(a) that the agent is acting for a principal; and
(b) the principal's identity; Extent to which agent may bind principal
(2) Partially disclosed, where the other party knows
or has reason to know that the agent is or may be Acts within the scope of Acts beyond authority
acting for a principal but is unaware of the authority, even in conflict given cannot bind
principal's identity; or with special instructions, principal
(3) Undisclosed, where the party has no notice of the may bind principal
fact that the agent is acting as such for a
principal. Termination of authority
Notice to third persons No notice required, since
KINDS OF AGENCY AS TO MANNER OF CREATION required to terminate third parties are required
EXPRESS AGENCY
apparent authority to inquire as to authority
An express agency is one where the agent has been
actually authorized by the principal, either: Construction of instructions
(a) Orally; or
(b) In writing. [Article 1869] Notice to third persons The instructions, in so far
required as they grant authority,
IMPLIED AGENCY are strictly construed
The creation of implied agency is implied:
(1) As to the appointment of an agent by the KINDS OF AGENCY AS TO AUTHORITY
principal: CONFERRED
(a) From his acts; COUCHED IN GENERAL TERMS
(b) From his silence or lack of action; or An agency couched in general terms is one created in
(c) From his failure to repudiate the agency general terms and is deemed to comprise only acts
knowing that another person is acting on his of administration, even if:
behalf without authority. [Article 1869] (1) The principal should state that he withholds no
(2) As to the acceptance of the agency by the agent: power;
(a) From his acts which carry out the agency; (2) He should state that the agent may execute such
(b) From his silence or inaction according to the acts as he may consider appropriate; or
circumstances (i.e., presence or absence of the (3) Even though the agency should authorize a
parties) [Articles 1870, 1871 and 1872] general and unlimited management [Article 1877].
KINDS OF AGENCY AS TO EXTENT OF BUSINESS COUCHED IN SPECIFIC TERMS
COVERED An agency couched in specific terms authorizes only
UNIVERSAL AGENCY the performance of specific acts [Article 1878].
Universal agency comprises all acts which the Certain specific acts, however, require special powers
principal can lawfully delegate to an agent; of attorney.
PAGE 265
(3) A special power to sell excludes the power to

A special power of attorney is an instrument in writing mortgage; and a special power to mortgage does
by which one person, as principal, appoints another not include the power to sell [Article 1879].
as his agent and confers upon him the authority to (4) A special power to compromise does not
perform certain specified acts or kinds of acts on authorize submission to arbitration [Article 1880].
behalf of the principal. (5) The power to "exact the payment" of sums of
money "by legal means" include the power to
The following acts of strict dominion require special institute suits for their recovery [Germann & Co., v.
powers of attorney: Donaldson, Sim & Co. (1901)].
(1) To make such payments as are not usually (6) A power of attorney “to loan and borrow money”
considered as acts of administration; and to mortgage the principal’s property does not
(2) To effect novations which put an end to carry with it or imply that that the agent has a
obligations already in existence at the time the legal right to make the principal liable for the
agency was constituted; personal debts of the agent [BPI v. De Coster
(3) To compromise, to submit questions to (1925)].
arbitration, to renounce the right to appeal from a (7) Unless the contrary appears, the authority of an
judgment, to waive objections to the venue of an agent must be presumed to include all the
action or to abandon a prescription already necessary and usual means of carrying the
acquired; agency into effect [Macke v. Camps (1907)].
(4) To waive any obligation gratuitously;
(5) To enter into any contract by which the ownership However, although the Civil Code expressly requires a
of an immovable is transmitted or acquired either special power of attorney in order that one may
gratuitously or for a valuable consideration; compromise an interest of another, it is neither
(6) To make gifts, except customary ones for charity accurate nor correct to conclude that its absence
or those made to employees in the business renders the compromise agreement void. In such a
managed by the agent; case, the compromise is merely unenforceable.
(7) To loan or borrow money, unless the latter act be [Duñgo v. Lopena (1962)]
urgent and indispensable for the preservation of
the things which are under administration;
SPECIAL KINDS OF AGENCY
(8) To lease any real property to another person for
AGENCY BY ESTOPPEL
more than one year;
Through estoppel, an admission or representation is
(9) To bind the principal to render some service
rendered conclusive upon the person making it, and
without compensation;
cannot be denied or disproved as against the person
(10)To bind the principal in a contract of partnership;
relying thereon [Article 1431].
(11) To obligate the principal as a guarantor or surety;
(12)To create or convey real rights over immovable
property; Ratification Estoppel
(13)To accept or repudiate an inheritance;
(14)To ratify or recognize obligations contracted Rests on intention Rests on prejudice
before the agency; Retroacts as if originally Affects only relevant parts
(15)Any other act of strict dominion. [Article 1878] authorized of the transaction
Notes: Substance is confirmation Substance is the
(1) The requirement of special power of attorney in of unauthorized acts after principal's inducement for
Article 1878 refers to the nature of the it has been done third party to act to his
authorization, not to its form. Even if a document prejudice
is titled as a general power of attorney, the
requirement of a special power of attorney is met
For an agency by estoppel to exist, the following must
if there is a clear mandate from the principal
be established:
specifically authorizing the performance of the
(1) The principal manifested a representation of the
act [Bravo-Guerrero v. Bravo (2005)].
agent’s authority or knowingly allowed the agent
(2) A special power of attorney can be included in the
to assume such authority;
general power when it is specified therein the act
(2) The third person, in good faith, relied upon such
or transaction for which the special power is
representation;
required [Veloso v. CA (1996)].
(3) Relying upon such representation, such third
person has changed his position to his detriment.
PAGE 266
An agency by estoppel, which is similar to the doctrine Qualification: The exception only applies if the agent
of apparent authority, requires proof of reliance upon contracts with the properties of the principal within
the representations, and that, in turn, needs proof the scope of his authority [PNB v. Agudelo (1933)].
that the representations predated the action taken in
reliance. [Litonjua v. Eternit Corp. (2006)] AGENCY BY OPERATION OF LAW
An agency may exist by operation of law, such as in
Implied Agency Agency by Estoppel the following cases:
(1) Every partner is an agent of the partnership for
Principal is liable Person who is in bad faith the purpose of its business [Article 1818];
is liable (2) When the principal's actions would reasonably
lead a third person to conclude that an agency
exists, an agency by estoppel is created by
One who clothes another with apparent authority as
operation law [Black's Law Dictionary (9th)];
his agent, and holds him out to the public as such,
(3) In case of certain necessity or emergency, an
cannot be permitted to deny the authority of such
agency by necessity may arise.
person to act as his agent, to the prejudice of
innocent third parties dealing with such person in
IRREVOCABLE AGENCY
good faith.
Article 1927 (on agency coupled with an interest)
mentions three instances where the sole will of the
Note: Article 1911 states that: "Even when the agent
principal cannot terminate (revoke) an agency:
has exceeded his authority, the principal is solidarily
(1) A bilateral contract depends upon it;
liable with the agent if the former allowed the latter
(2) It is the means of fulfilling an obligation already
to act as though he had full powers." In this case,
contracted; or
there is a duly formed agency and estoppel only
(3) A partner is appointed manager of a partnership
applies to the excess of authority. This is an
in the contract of partnership and his removal
application of the doctrine of apparent authority
from the management is unjustifiable.
Under the doctrine of apparent authority, the
Qualifications:
question in every case is whether the principal has, by
(1) Coupled with interest or not, the authority
his voluntary act, placed the agent in such a situation
certainly can be revoked for a just cause, such as
that a person of ordinary prudence, conversant with
when the attorney-in-fact betrays the interest of
business usages and the nature of the particular
the principal, xxx. It is not open to serious doubt
business, is justified in presuming that such agent
that the irrevocability of the power of attorney
has authority to perform the particular act in
may not be used to shield the perpetration of acts
question. [Professional Services v. Agana (2008)]
in bad faith, breach of confidence, or betrayal of
trust, by the agent for that would amount to
In agency by estoppel, there is no agency. The alleged
holding that a power coupled with an interest
agent seemed to have apparent or ostensible
authorizes the agent to commit frauds against
authority, but not real authority to represent another.
the principal. [Coleongco v. Claparols (1964)]
AGENCY WITH UNDISCLOSED PRINCIPAL
(2) A mere statement in the power of attorney that it
General rule: If an agent acts in his own name (the
is coupled with an interest is not enough. In what
principal is undisclosed), the agent is the one directly
does such interest consist must be stated in the
bound in favor of the person with whom he has
power of attorney. [Del Rosario v. Abad (1958)]
contracted, as if the transaction were his own.
(3) An agency couple with an interest cannot affect
Ratio: There is no representation of the principal
third persons. They are obligatory only on the
when the agent acts in his own name. The third
principal who executed the agency. [New Manila
person cannot allege that he was misled by any
Lumber v. Republic (1960)]
representation since he did not know of the existence
of the undisclosed principal.
KINDS OF AGENTS
AS TO NATURE AND EXTENT OF AUTHORITY
Exception: The principal is bound when the contract
According to the nature and extent of their authority,
involves things belonging to him [Article 1883]. In this
agents have been classified into:
case, the contract is considered as one between the
(1) Universal agents are authorized to do all acts for
principal and the third person.
his principal which can lawfully be delegated to
an agent. So far as such a condition is possible,
PAGE 267
such an agent may be said to have universal

authority. Powers of the agent
(2) General agents are authorized to do all acts
pertaining to a business of a certain kind or at a AUTHORITY OF AN AGENT
particular place, or all acts pertaining to a Authority is the power of the agent to affect the legal
business of a particular class or series. He has relations of his principal by acts done in accordance
usually authority either expressly conferred in with the principal’s manifestations of consent.
general terms or in effect made general by the
usages, customs or nature of the business which An agent can make the principal legally responsible
he is authorized to transact. An agent, therefore, only when he is authorized by the principal to act the
who is empowered to transact all the business of way he did.
his principal of a particular kind or in a particular
place, would, for this reason, be ordinarily KINDS OF AUTHORITY
deemed a general agent. (1) Actual, when it is actually granted, and it may be
(3) Special agents are authorized to do some express or implied. It is the authority that the
particular act or to act upon some particular agent does, in fact, have. It results from what the
occasion (i.e., acts usually in accordance with principal indicates to the agent;
specific instructions or under limitations (2) Express, when it is directly conferred by words;
necessarily implied from the nature of the act to (3) Implied, when it is incidental to the transaction or
be done). [Siasat v. IAC (1985)] reasonably necessary to accomplish the main
purpose of the agency;
SPECIAL TYPES OF AGENTS (4) Apparent or ostensible, when it arises by the acts
(1) Attorney-at-law is one whose business is to or conduct of the principal giving rise to an
represent clients in legal proceedings; appearance of authority. It makes the principal
(2) Auctioneer is one whose business is to sell responsible to third persons for certain actions of
property for others to the highest bidder at a the agent that were not really authorized;
public sale; (5) General, when it refers to all the business of the
(3) Broker is one whose business is to act as principal;
intermediary between two other parties such as (6) Special, when it is limited only to one or more
insurance broker and real estate broker; specific transactions; and
(4) Factor or commission merchant is one whose (7) By necessity or by operation of law, when it is
business is to receive and sell goods for a demanded by necessity or by virtue of the
commission, being entrusted with the possession existence of an emergency. The agency
of the goods involved in the transaction. terminates when the emergency passes.
(5) Cashier in bank is one whose business is to
represent a banking institution in its financial SCOPE OF AUTHORITY
transactions; and General rule: The scope of the authority of the agent
(5) Attorney-in-fact is one who is given authority by is what appears in the terms of the power of attorney
his principal to do a particular act not of a legal [Siredy Enterprises v. CA (2002)].
character. In its strict legal sense, it means an
agent having a special authority. Exceptions: An agent is considered acting within the
scope of his authority when:
Attorneys have authority to bind their clients in any (1) He performs acts which are conducive to the
case by any agreement in relation thereto made in accomplishment of the purpose of the agency
writing, and in taking appeals, and in all matters of [Article 1881];
ordinary judicial procedure. But they cannot, without (2) He performed the agency in a manner more
special authority, compromise their client's litigation, advantageous to the principal than that specified
or receive anything in discharge of a client's claim by said principal [Article 1881];
but the full amount in cash. [Section 23, Rule 138, (3) The principal ratifies the act, expressly or tacitly
Rules of Court] [Article 1910].
So far as third persons are concerned, an act is

deemed to have been performed within the scope of
the agent's authority if such act is within the terms of
the power of attorney, as written, even if the agent
has in fact exceeded the limits of his authority
PAGE 268
according to an understanding between the principal demands that the agent look out for the best
and the agent. [Article 1901] interests of the principal as against his own or those
of third parties. [See Article 1889]
While third persons are bound to inquire into the
extent or scope of the agent’s authority, they are not Thus, an act of the agent which tends to violate his
required to go beyond the terms of the written power fiduciary duty is not only invalid as to the principal,
of attorney. Third persons cannot be adversely but is also against public policy.
affected by an understanding between the principal
and his agent as to the limits of the latter’s authority. Presumption: Until proven otherwise, however, the
In the same way, third persons need not concern presumption arises that an agent has performed his
themselves with instructions given by the principal to duty in good faith, and the principal, until notice is
his agent outside of the written power of attorney. received of a breach of relational duties, may rely
[Siredy Enterprises v. CA (2002)] upon his agent's faithfulness.
POWER TO BIND THE PRINCIPAL Exception: The presumption does not arise when
Requisites: there is no relation of trust or confidence between
(1) The agent must act within the scope of his the parties (e.g., the agent is bound merely as an
authority; and instrument/servant, or there is no agency
(2) The agent must act in behalf of the principal. relationship). [De Leon (2010)]
Even when the agent acts in his own name, however, OBEDIENCE TO PRINCIPAL'S INSTRUCTIONS
the principal is still bound, when the contract General rule: An agent must obey all lawful orders
involves things belonging to the principal [Article and instructions of the principal within the scope of
1883] or when the principal ratifies the contract, the agency. If he fails to do so, he becomes liable for
expressly or tacitly [Article 1910]. any loss the principal incurs even though he can
show that he acted in good faith or exercised
EFFECTS OF ACTS OF AN AGENT reasonableness. [See Article 1887]
In summary, when the agent acts:
(1) With authority of the principal: EXERCISE OF REASONABLE CARE
(a) If done in the name of the principal, the By accepting an employment whose requirements he
principal is bound to comply with the knows, without stipulating otherwise, the agent
obligations contracted [Article 1910] and the impliedly undertakes that he possesses a degree of
agent is not personally liable to the party with skill reasonably and ordinarily competent for the
whom he contracts [Article 1897]; performance of the service, and that in performing
(b) If done in the name of the agent, the agent is his undertaking, he will exercise reasonable care,
the one directly bound in favor of the person skill and diligence. [De Leon (2010)]
with whom he has contracted, except when
the contract involves things belonging to the The specific obligations of the parties to each other
principal; are merely specific applications of the general
(2) Without authority or beyond the authority granted fiduciary obligation [De Leon (2010)].
by the principal:
(a) If done in the name of the principal, it is OBLIGATION TO CARRY OUT AGENCY
unenforceable against him, unless he ratifies General rule: The agent is:
it expressly or tacitly [Article 1910]. (1) Bound by his acceptance to carry out the agency;
(b) If done in the name of the agent, he is (2) Liable for damages, which the principal may
personally liable. suffer, in case of non-performance;
(3) Bound to finish the business already begun on
the death of the principal should delay entail
danger. [Article 1884]
Obligations of the agent Exception: An agent shall not carry out an agency if
its execution would manifestly result in loss or
OBLIGATIONS, IN GENERAL damage to the principal [Article 1888].
GOOD FAITH AND LOYALTY TO HIS TRUST
The duty of good faith is also called the fiduciary OBLIGATION IN CASE HE DECLINES AGENCY
duty, which imposes upon the agent the obligation of In case a person declines an agency, he is bound to
faithful service. The duty to be loyal to the principal observe the diligence of a good father of a family in
PAGE 269
the custody and preservation of the goods forwarded Authority Instructions

to him.
Relates to the transaction Refers to the manner or
The obligation lasts until the owner, as soon as or business with which the mode of agent's action
practicable: agent is empowered to act with respect to matters
(1) Appoints an agent; or within the permitted
(2) Takes charge of the goods. [Article 1886] scope of authority
The case treated in this provision is different from Binds third parties Does not bind third
withdrawal. In this case, no agency was formed. parties
Withdrawal presupposes an existing agency.
The obligation of the agent, in case of withdrawal, is OBLIGATION TO PREFER INTEREST OF

to continue to act as such agent until the principal PRINCIPAL
has had reasonable opportunity to take the General rule: The agent shall be liable for damages if,
necessary steps to meet the situation. [Article 1929] there being a conflict between his interest and those
of the principal, he should prefer his own [Article
OBLIGATION TO ADVANCE NECESSARY FUNDS 1889].
General rule: The agent is not bound to advance the
necessary funds. The principal is obliged to advance Exceptions: The agent is not liable for giving
to the agent, should the latter so request, the sums preference to his own when:
necessary for the execution of the agency. (1) The principal waives the benefit of this rule, with
full knowledge of the facts; or
Exception: He shall be bound to do so should there (2) When the interest of the agent is superior.
be a stipulation to that effect, subject to the
obligation of the principal to reimburse the agent. An example of the latter is where the agent has
security interest in goods of the principal in his
Exception to the exception: He is not bound to do so, possession, he may protect his interest even if in
even when there is a stipulation, when the principal is doing so, he disobeys the principal's orders or injures
insolvent. [Article 1886] his interest [De Leon (2010)].
Note: Insolvency of the principal is also a ground for BASIS OF THE RULE
extinguishment. The underlying basis of the rule, which precludes an
agent from engaging in self-dealing, is to shut the
OBLIGATION TO ACT IN ACCORDANCE WITH door against temptation and keep the agent's eye
INSTRUCTIONS single to the rights and welfare of the principal.
In the execution of the agency, the agent shall act in
accordance with the instructions of the principal. APPLICATION
(1) A specific application of this subordination of
In the absence of such instructions, he shall do all interests is found in Article 1890: If the agent has
that a good father of a family would do, as required been empowered to borrow money, he may
by the nature of the business. [Article 1887] himself be the lender at the current rate of
interest. If he has been authorized to lend money
Note: The limits of the agent's authority shall not be at interest, he cannot borrow it without the
considered exceeded should it have been performed consent of the principal.
in a manner more advantageous to the principal (2) An agent authorized to sell merchandise cannot
than that specified by him [Article 1882]. bind the principal by selling to himself directly or
indirectly, unless the principal consented or
Authority Instructions ratified the purchase.
Sum total of the powers Private rule of guidance to OBLIGATION TO ACCOUNT AND TO DELIVER
committed or permitted to the agent THINGS RECEIVED
the agent Every agent is bound to:
(1) Render an account of his transactions; and
(2) Deliver to the principal whatever he may have
received by virtue of the agency, even though it
may not be owing to the principal.
PAGE 270
The agent is a principal with respect to the sub-

WHAT TO DELIVER agent.
What has to be delivered include all money and
property which may have come into his hands or in POWER TO APPOINT
that of a sub-agent. This includes gifts from third General rule: The agent may appoint a sub-agent.
parties in connection with the agency.
Ratio: The law allows such substitution for reasons of
It is immaterial whether such money or property is convenience and practicality.
the result of the performance or violation of the
agent's duty, if it be the fruit of the agency. Exceptions:
(1) The appointment is prohibited by the principal
LIABILITY FOR CONVERSION [Article 1892];
If the agent fails to deliver and instead converts or (2) The work entrusted to the agent requires special
appropriates for his own use the money or property knowledge, skill, or competence, unless
belonging to the principal, he is liable for estafa. authorized to do so by the principal [De Leon
(2010)].
EXEMPTING STIPULATION
Every stipulation exempting the agent to render an RELATIONS AMONG THE PARTIES
account shall be void. [Article 1891] (1) When the sub-agent has been employed for own
account of the agent, to assist him, the sub-agent
WHEN OBLIGATION NOT APPLICABLE is a stranger to the principal.
(1) If the agent or broker acted only as a middleman (2) When the appointment was authorized by the
with the task of merely bringing together the principal, a fiduciary relationship is created
vendor and the vendee [Domingo v. Domingo between and among the principal, agent, and
(1971)]. sub-agent, such that neither the agent nor the
(2) If the agent had informed the principal of the gift substitute can be held personally liable so long
or bonus or profit he received from the purchaser as they act within the scope of their authority
and the principal did not object thereto; [Macias & Co. v. Warner, Barnes & Co. (1922)].
(3) When a right of lien exists in favor of the agent.
EFFECTS OF SUBSTITUTION
RESPONSIBILITY FOR ACTS OF SUBSTITUTE (1) When substitution was prohibited by the principal,
The agent may appoint a substitute if the principal appointment by the agent is an act in excess of
has not prohibited him from doing so. the limits of his authority. All acts of the
substitute are void [Article 1892].
The agent is responsible for the acts of the (2) When substitution was authorized, the agent is
substitute: only liable when he appointed one who is
(1) When he was not given the power to appoint one; notoriously incompetent or insolvent, unless the
(2) When he was given such power, but: person was designated by the principal.
(a) Without designating the person; and (3) When substitution was not authorized, but also
(b) The person appointed was notoriously not prohibited, the appointment is valid, but the
incompetent or insolvent. agent is liable for damage caused by the
substitution to the principal.
All acts of the substitute appointed against the (4) When substitution was authorized and the sub-
prohibition of the principal shall be void. [Article agent was designated by the principal, the agent
1892] is released from any liability for the acts of the
sub-agent.
The principal may bring an action against the
substitute with respect to the obligations which the RESPONSIBILITY OF TWO OR MORE AGENTS
latter contracted under the substitution [Article General rule: The responsibility of two or more agents
1893]. is not solidary, even though they have been
appointed simultaneously. They are liable jointly.
SUB-AGENCY
A sub-agent or substitute is a person employed or Exception: They are solidarily liable if solidarity has
appointed by an agent as his agent, to assist him in been expressly stipulated [Article 1894].
the performance of an act for the principal, which the
agent has been empowered to perform. If solidarity has been thus agreed upon, each of the
agents is responsible for:
PAGE 271
(1) The non-fulfillment of agency, even when the (4) The party with whom the agent contracted is
fellow agents acted beyond the scope of their aware of the limits of the powers granted by the
authority; and principal.
(2) The fault or negligence of his fellow agents,
except when the fellow agents acted beyond their The agent, however, is liable if he undertook to
authority. secure the principal's ratification.
OBLIGATION FOR SUMS APPLIED TO HIS OWN PRESENTATION OF POWER OF ATTORNEY

USE A third person with whom the agent wishes to
The agent owes interest: contract on behalf of the principal may require the
(1) On the sums applied to his own use from the day presentation of the power of attorney, or the
on which he did so; and instructions as regards the agency. Private or secret
(2) On the sums which he still owes after the agency orders and instructions of the principal do not
is extinguished. [Article 1896] prejudice third persons who have relied upon the
power of attorney or instructions shown them.
The liability of the agent for interest for sums [Article 1902]
converted to his own use is without prejudice to a
criminal action that may be brought against him [De So far as third persons are concerned, an act is
Leon (2010)]. deemed to have been performed within the scope of
the agent's authority, if such act is within the terms
The sums referred to as still owing to the principal of the power of attorney, as written, even if the agent
after extinguishment of the agency are those which has in fact exceeded the limits of his authority
were not misapplied by the agent, but were found to according to an understanding between the principal
be owing to the principal after such extinguishment. and the agent. [Article 1900]
OBLIGATIONS TO THIRD PERSONS RATIFICATION BY PRINCIPAL

LIABILITY OF AGENT FOR OBLIGATIONS CONTRACTED A third person, who contracts with the agent
General rule: The agent who acts as such is not (thereby recognizing the authority of the agent),
personally liable to the party with whom he cannot later disaffirm his contract based on the fact
contracts. that the agent has exceeded his powers, if the
principal has:
The principal is responsible for such acts done within (1) Ratified the acts of the agent; or
the scope of the authority granted to the agent, and (2) Signified his willingness to ratify said acts. [Article
should bear any damage caused to third persons. 1901]
[Article 1910]
Thus, the third person can be compelled to abide by
Exceptions: He is personally liable when: the contract in this case.
(1) He acts in his own name [Article 1883];
(2) He expressly binds himself; or The ratification has retroactive effect, relating back
(3) He exceeds the limits of his authority without to the time of the act or contract ratified and is
giving such party sufficient notice of his powers. equivalent to original authority [Board of Liquidators
[Article 1897] v. Kalaw].
Note: If the agent acts in his own name, he is directly A principal may not accept the benefits of a
bound in favor of the person with whom he transaction and repudiate its burdens. Thus, a
contracted, as if the transaction were his own, except principal who seeks to enforce a sale made by the
when the contract involves things belonging to the agent cannot ordinarily allege that the agent
principal. exceeded his authority.
VOID CONTRACTS Before ratification, however, the third person may

The contract entered into by an agent on behalf of repudiate the contract.
the principal shall be void when:
(1) The agent contracts in the name of the principal; IGNORANCE OF AGENT
(2) He exceeded the scope of his authority; If a duly authorized agent acts in accordance with
(3) The principal does not ratify the contract; and the orders of the principal, said principal cannot set
up the ignorance of the agent as to circumstances
PAGE 272
whereof he himself was, or ought to have been, SALE OF GOODS ON CREDIT WITHOUT AUTHORITY
aware. [Article 1899] General rule: The commission agent cannot sell on
credit. Should he do so, the principal may:
Thus, if the principal appoints an agent who is (1) Demand from him payment in cash, in which case
ignorant, the fault is his alone. He is bound by the the commission agent shall be entitled to any
acts of the agent. The agent is not liable to third interest or benefit, which may result from such
persons in this case. sale [Article 1905]; or
(2) Ratify the sale on credit, in which case the
OBLIGATIONS OF COMMISSION AGENT principal will have all the risks and advantages to
FACTOR OR COMMISSION AGENT him [De Leon (2010)].
A factor or commission agent is one whose business
is to receive and sell goods for a commission (also Exception: The commission agent can sell on credit
called factorage) and who is entrusted by the with the express or implied consent of the principal.
principal with the possession of goods to be sold,
and usually selling in his own name. SALE OF GOODS ON CREDIT WITH AUTHORITY
If the commission agent was authorized to sell on
He may act in his own name or in that of the credit and should he so sell on credit, he shall inform
principal. the principal of such sale, with a statement of the
names of the buyers.
An ordinary agent need not have possession of the
goods of the principal, while the commission agent Should he fail to inform the principal, the sale is
must be in possession. [De Leon (2010)] deemed to have been made for cash as far as the
principal is concerned. [Article 1906] As such, as to
Ordinary Agent Commission Agent the buyer, the sale may be on credit, but the principal
may demand the payment in cash from the agent.
Acts for and in behalf of Acts in his own name or
the principal that of his principal Should the commission agent receive a guarantee
commission (del credere commission) on a sale, in
Need not have possession Must have possession of addition to the ordinary commission, he shall:
of the goods the goods (1) Bear the risk of collection; and
(2) Pay the principal the proceeds of the sale on the
terms agreed upon with the purchaser.
Broker Commission Agent In case of a sale on credit, the commission agent is
Has no custody of the Has custody or possession obliged to collect the credits of his principal when
thing to be disposed of, of the things to be sold they become due and demandable.
only acts as intermediary
between seller and buyer General rule: Failing to so collect, the agent shall be
liable for damages
Maintains no relations Maintains relations with
with things to be the thing, the buyer and Exception: He is not liable if he proves that he
sold/bought the seller exercised due diligence for that purpose.
RESPONSIBILITY FOR FRAUD AND NEGLIGENCE

In the fulfillment of his obligation, the agent is
RESPONSIBILITY FOR GOODS RECEIVED
(1) The commission agent shall be responsible for responsible for:
goods received by him in the terms and (1) Fraud; and
(2) Negligence
conditions and as described in the consignment,
unless upon receiving them he should make a
written statement of the damage and The circumstance that the agency is or is not
deterioration suffered by the same [Article 1903]. gratuitous will be considered by the courts in fixing
the liability for negligence only.
(2) The commission agent who handles goods of the
same kind and mark, which belong to different
owners, shall distinguish them by countermarks, The liability may be to the principal or to third
and designate the merchandise respectively persons.
belonging to each principal [Article 1904].
PAGE 273
The principal is solidarily liable if quasi-delict was The effects of ratification are:
committed by the agent while performing his duties (1) With respect to the agent, it relieves him of
in furtherance of the principal's business. liability. He may thus recover compensation from
the principal.
(2) With respect to the principal, he assumes
responsibility for the unauthorized act as fully as
if the agent had acted under an original authority.
Obligations of the principal But he is not liable for acts outside the authority
affirmed by his ratification.
OBLIGATIONS, IN GENERAL (3) With respect to third persons, they are bound by
In addition to his duties specified under the contract the ratification and cannot set up the fact that the
itself, the principal is under obligation to deal fairly agent has exceeded his powers [Article 1901].
and in good faith with his agent, who owes the same
to his principal. SEPARATE CONTRACTS WITH PRINCIPAL AND AGENT
When two persons contract with regard to the same
OBLIGATION TO COMPLY WITH OBLIGATIONS thing, one of them with the agent and the other with
CONTRACTED the principal, and the two contracts are incompatible
General rule: The principal must comply with all the with each other, that of prior date shall be preferred,
obligations which the agent may have contracted subject to the rules on double sales [Article 1916].
within the scope of his authority. As for any obligation
where in the agent has exceeded his power, the The rules on double sales (Article 1544) provide:
principal is not bound. (1) If the same movable property is sold to different
persons, ownership is transferred to whoever first
Exceptions: The principal is: took possession in good faith.
(1) Bound by the obligation entered into by the (2) If it be immovable:
agent in excess of his power, when he ratifies it (a) Ownership belongs to the person who in good
expressly or tacitly [Article 1910]; faith first recorded it in the Registry of
(2) Solidarily liable with the agent if the principal Property.
allowed the agent to act as though he had full (b) If there is no inscription, ownership shall
powers [Article 1911]. belong to the person who, in good faith was
first in possession; and in the absence of such,
Note: If the agent acts in his own name, but the to the one who presents the oldest title,
contract involves things belonging to the principal, provided there is good faith.
the contract must be considered as entered into
between the principal and the third person [Sy-Juco The liability for damages suffered by the third person
and Viardo v. Sy-Juco (1920)]. whose contract must be rejected shall be borne by:
(1) The principal, if the agent acted in good faith; or
RATIFICATION
(2) The agent, if he acted in bad faith. [Article 1918]
Ratification is the adoption or affirmance by a person
of a prior act which did not bind him, but which was WHEN PRINCIPAL NOT LIABLE, IN SUMMARY
done or professed to be done on his account, thus (1) Void or inexistent contracts [Article 1409];
giving effect to the acts as if originally authorized. (2) Sale of a piece of land or any interest therein
when the authority of the agent is not in writing
Aside from the intent to ratify, the following [Article 1874];
conditions must be fulfilled for ratification to be (3) Acts of the substitute appointed against the
effective: prohibition of the principal [Article 1892];
(1) The principal must have the capacity and power (4) Acts done in excess of the scope of the agent's
to ratify; authority [Articles 1898 and 1910];
(2) He must have had knowledge or had reason to (5) When the agent acts in his own name, except
know of material or essential facts about the when the contract involves things belonging to the
transaction; principal [Article 1883];
(3) He must ratify the acts entirely; (6) Unenforceable contracts [Article 1403].
(4) The act must be capable of ratification; and
(5) The act must be done in behalf of the principal. OBLIGATION FOR COMPENSATION OF AGENT
[De Leon (2010)] Agency is presumed to be for a compensation, unless
there is proof to the contrary [Article 1875].
PAGE 274
AMOUNT OF COMPENSATION (b) Provided that the agent is free from all fault.
The principal must pay the agent the compensation [Article 1912]
agreed upon, or the reasonable value of the agent's
services if no compensation was specified. The reimbursement shall include the interest on the
sums advanced from the day the advances were
This obligation presupposes that the agent complied made.
with his obligation to the principal.
WHEN PRINCIPAL NOT LIABLE FOR EXPENSES
COMPENSATION OF BROKER The principal is not liable for the expenses incurred
A broker is entitled to the usual commissions by the agent in the following cases:
whenever he brings to his principal a party who is (1) If the agent acted in contravention of the
able and willing to take the property and enter into a principal's instructions, unless the latter should
valid contract upon the terms named by the wish to avail himself of the benefits derived from
principal, although the terms may be arranged and the contract;
the matter negotiated and consummated between (2) When the expenses were due to the fault of the
the principal and the purchaser directly. agent;
(3) When the agent incurred them with knowledge
A broker is never entitled to commission for that an unfavorable result would ensue, if the
unsuccessful efforts. principal was not aware thereof;
(4) When it was stipulated that:
The governing rule is that the agent must prove that (a) The expenses would be borne by the agent; or
he was the procuring cause of the transaction. (b) That the latter would be allowed only a
Otherwise, he is not entitled to the stipulated certain sum. [Article 1918]
broker's commission [Inland Realty v. CA (1997)].
DAMAGES
Procuring cause refers to a cause originating a series The principal must also indemnify the agent for all
of events which, without break in their continuity, the damages which the execution of the agency may
result in the accomplishment of the prime objective have caused the latter, without fault or negligence or
of the employment of the broker – producing a his part. [Article 1913]
purchaser ready, willing and able to buy on the
RIGHT OF RETENTION BY AGENT
owner's terms.
The agent may retain in pledge the things which are
the object of the agency until the principal effects:
Since the broker’s only job is to bring together the (1) Reimbursement of necessary funds advanced;
parties to a transaction, it follows that if the broker and
does not succeed in bringing the mind of the (2) Payment of indemnity for damages. [Article 1914]
purchaser and the vendor to an agreement with
reference to the terms of a sale, he is not entitled to This is a case of legal pledge. However, the agent is
a commission [Rocha v. Prats (1922)]. not entitled to the excess in case the things are sold
to satisfy his claims.
If the principal breaks off from negotiations with a
buyer brought by the agent in order to deliberately MULTIPLE PRINCIPALS
deal later with the buyer personally, this is evident If there are two or more principals who appointed the
bad faith. In such case, justice demands agent for a common transaction or undertaking, they
compensation for the agent. [Infante v. Cunanan shall be solidarily liable for all the consequences of
(1953)] the agency [Article 1915].
LIABILITY FOR EXPENSES AND DAMAGES Requisites:

NECESSARY FUNDS (1) There are two or more principals;
(1) The principal must advance to the agent, should (2) The principals have all concurred in the
the latter so request, the sums necessary for the appointment of the same agent; and
execution of the agency. (3) The agent is appointed for a common transaction
(2) In case the agent already advanced them, the or undertaking.
principal must reimburse him therefor:
(a) Even if the business or undertaking was not LIABILITY FOR QUASI-DELICT BY AGENT
successful; The principal is solidarily liable to third persons for
torts of an agent committed:
PAGE 275
(1) At the principal's direction; or Exception: Agency cannot be revoked if it is coupled

(2) In the course and within the scope of the agent's with an interest, such that:
employment. (1) A bilateral contract depends upon it;
(2) It is the means of fulfilling an obligation already
contracted; or
(3) A partner is appointed manager of a partnership
Extinguishment of agency in the contract of partnership and his removal
from the management is unjustifiable.
MODES OF EXTINGUISHING AGENCY, IN MULTIPLE PRINCIPALS

GENERAL When two or more principals have granted a power
Agency is extinguished: of attorney for a common transaction, any one of
(1) By its revocation; them may revoke the same without the consent of
(2) By the withdrawal of the agent; the others. [Article 1925]
(3) By the death, civil interdiction, insanity or
insolvency of the principal or of the agent; MANNER OF REVOCATION
(4) By the dissolution of the firm or corporation which Revocation may be express or implied.
entrusted or accepted the agency;
(5) By the accomplishment of the object or purpose There is express revocation when the principal clearly
of the agency; and directly makes a cancellation of the authority of
(6) By the expiration of the period for which the the agent orally or in writing.
agency was constituted. [Article 1919]
There is implied revocation in the following cases:
The provision enumerates only those which are (1) The appointment of a new agent for the same
peculiar to agency and is, therefore, not exclusive. business or transaction revokes the previous
Agency may also be extinguished by the modes of agency from the day on which notice thereof was
extinguishment of obligations in general. given to the former agent, without prejudice to
the requirement of notice to third persons [Article
The modes of extinguishment may be classified into 1923].
three: (2) The agency is revoked if the principal directly
(1) By agreement (Nos. 5 and 6); manages the business entrusted to the agent,
(2) By subsequent acts of the parties: dealing directly with third persons [Article 1924].
(a) By the act of both parties or by mutual (3) A general power of attorney is revoked by a
consent; or special one granted to another agent, as regards
(b) By the unilateral act of one of them (Nos. 1 the special matter involved in the latter [Article
and 2) 1926].
(3) By operation of law (Nos. 3 and 4)
There is implied revocation only where the new
In the absence of anything to show its termination, appointment is incompatible with the previous one.
the agency relation will be presumed to have
continued. The burden of proving termination is on EFFECT OF REVOCATION IN RELATION TO THIRD PARTIES
the party asserting it. If the agency has been entrusted for the purpose of
contracting with specified persons, its revocation
REVOCATION BY PRINCIPAL shall not prejudice the latter if they were not given
General rule: The principal may: notice thereof [Article 1921].
(1) Revoke the agency at will; and
(2) Compel the agent to return the document If the agent had general powers, revocation of the
evidencing the agency. agency does not prejudice third persons who acted:
(1) In good faith; and
Qualifications: The right of the principal to terminate (2) Without knowledge of the revocation.
the authority of his agent is absolute and
unrestricted, except that he is liable for damages in Notice of the revocation in a newspaper of general
case: circulation is a sufficient warning to third persons.
(1) He revokes the agency in bad faith [Danon v. [Article 1922]
Brimo (1921)]; or
(2) He revokes the agency before the expiration of
the period stipulated in the agency contract.
PAGE 276
WITHDRAWAL BY AGENT accomplished, the agency continues indefinitely for

The agent may withdraw from the agency by giving as long as the intent to continue is manifested
due notice to the principal. through words or actions of the parties.
LIABILITY FOR DAMAGES DISSOLUTION OF FIRM OR CORPORATION

General rule: If the principal should suffer any The dissolution of a partnership or corporation which
damage by reason of the withdrawal, the agent must entrusted (principal) or accepted (agent) the agency
indemnify him therefor. extinguishes its juridical existence, except for the
purpose of winding up its affairs. It is equivalent to its
Exception: The agent is not liable for damages if he death.
should base his withdrawal upon the impossibility of
continuing the performance of the agency without EXPIRATION OF TERM
grave detriment to himself. [Article 1928] If created for fixed period, expiration of the period
extinguishes agency even if the purpose was not
OBLIGATION TO CONTINUE AGENCY accomplished.
The agent, even if he should withdraw from the
agency for a valid reason, must continue to act until If no time is specified, the courts may fix the period
the principal has had reasonable opportunity to take as under the circumstances have been probably
the necessary steps to meet the situation [Article contemplated by the parties [Article 1197]. Otherwise,
1929]. the agency terminates at the end of a reasonable
period of time. Either party can terminate the
DEATH, CIVIL INTERDICTION, INSANITY OR relationship at will by giving notice to the other. [De
INSOLVENCY Leon (2010)]
DEATH OF PRINCIPAL
General rule: Death extinguishes agency. Period may be implied from terms of agreement,
purpose of agency, and the circumstances of the
Exceptions: parties.
(1) The agency remains in full force and effect even
after the death of the principal, if it has been
constituted:
(a) In the common interest of the principal and
agent; or
(b) In the interest of a third person who has
accepted the stipulation in his favor. [Article
1930]
(2) Anything done by the agent, without knowledge
of the death of the principal or of any other cause
which extinguishes the agency, is valid and shall
be fully effective with respect to third persons
who may have contracted with him in good faith
[Article 1931].
(3) The agent must finish business already begun on
the death of the principal, should delay entail any
danger [Article 1884].
DEATH OF AGENT
If the agent dies, his heirs must:
(1) Notify the principal thereof; and
(2) In the meantime adopt such measures as the
circumstances may demand in the interest of the
latter. [Article 1932]
ACCOMPLISHMENT OF OBJECT OR PURPOSE

Between principal and agent, the fulfillment of the
purpose for which agency was created ipso facto
terminates agency, even though it was expressly
made irrevocable. If the purpose has not been
PAGE 277
UP COLLEGE OF LAW CREDIT TRANSACTIONS BAR OPERATIONS COMMISSION
PAGE 278
Credit Transactions Upon delivery of the object of the contract of loan (in
this case the money received by the debtor when the
MEANING AND SCOPE OF CREDIT checks were encashed) the debtor acquires
TRANSACTIONS ownership of such money or loan proceeds and is
Credit transactions include all transactions involving bound to pay the creditor an equal amount. [Garcia
the purchase or loan of goods, services, or money in v. Thio, G.R. No. 154878]
the present with a promise to pay or deliver in the
future. COMMODATUM V. MUTUUM
TWO TYPES OF CREDIT Commodatum Mutuum

TRANSACTIONS/CONTRACTS OF SECURITY
Ordinarily involves Involves money or other
(1) Secured transactions or contracts of real security
something not consumable thing
– supported by a collateral or an encumbrance
consumable* (Art.1936)
of property
(2) Unsecured transactions or contracts of personal Ownership of the thing Ownership is transferred to
security – fulfillment by the debtor is supported loaned is retained by the borrower
only by a promise to pay or the personal lender (Art.1933)
commitment of another Essentially gratuitous May be gratuitous or
(Art.1933) onerous, i.e. with stipulated
Examples of credit transactions interest
(1) Bailment contracts Borrower must return Borrower need only pay an
(2) Contracts of guaranty and suretyship the same thing loaned equal amount of the same
(3) Mortgage (Art.1933) kind and quality (Art. 1953)
(4) Antichresis May involve real or Refers only to personal
(5) Concurrence and preference of credits personal property property
(Art.1937)
Loan for use or Loan for consumption
temporary possession
Loan (Art.1935)
Bailor may demand the Lender may not demand its
[A] contract by which one of the parties delivers to return of the thing return before the lapse of
another, either something not consumable so that loaned before the the term agreed upon
the latter may use the same for a certain time and expiration of the term in
return it, in which case the contract is called case of urgent need
commodatum; or money or other consumable thing, (Art.1946)
upon the condition that the same amount of the Bailor suffers the loss of Borrower suffers the loss
same kind and quality shall be paid, in which case the subject matter since even if caused exclusively by
the contract is called a simple loan or mutuum. he is the owner a fortuitous event and he is
[Art.1933] (Art.1942; Art.1174) not, therefore, discharged
from his duty to pay
CHARACTERISTICS OF A LOAN Purely personal in Not purely personal in
(1) Real contract character (Art 1939) character
(a) Delivery is essential for perfection of the
contract of loan. If consumable goods are loaned only for purposes of
(b) An accepted promise to loan, is nevertheless exhibition, or when the intention of the parties is to
binding on the parties, it being a consensual lend consumable goods and to have the very same
contract. goods returned at the end of the period agreed upon,
the loan is a commodatum and not a mutuum.
(2) Unilateral contract [Producers Bank v. CA, Feb. 19, 2003]
(a) creates obligations on only one party, i.e., the
borrower OBLIGATIONS OF BAILOR AND BAILEE
WHO MAY BE A BAILOR IN COMMODATUM?
In a contract of loan, the cause is, as to the borrower, (a) Anyone. The bailor in commodatum need not be
the acquisition of the thing, and as to the lender, the the owner of the thing loaned. [Art.1938]
right to demand its return or its equivalent. [Monte (b) But the bailee himself may not lend nor lease the
de Piedad v. Javier] thing loaned to him to a third person [Art 1939(2)]
PAGE 279
(4) To pay damages to bailee for known hidden flaws

WHAT ARE THE TWO (2) KINDS OF COMMODATUM? in the thing loaned [Art. 1951]
(a) Ordinary commodatum [Art. 1933]
(b) Precarium - bailor may demand the thing loaned (NOTE: Bailor has no right of abandonment; he
at will [Art. 1947] cannot exempt himself from payment of expenses or
damages to the bailee by abandoning the thing to
the latter. [Art. 1952])
OBLIGATIONS OF A BAILOR IN COMMODATUM OBLIGATIONS OF A BAILEE IN COMMODATUM
(1) To allow the bailee the use of the thing loaned for (1) Obligation to pay for the ordinary expenses for
the duration of period stipulated or until the the use and preservation of the thing loaned [Art.
accomplishment of the purpose for which 1941]
commodatum was constituted. (2) Obligation to take good care of the thing with the
diligence of a good father of a family [Art. 1163]
Exceptions: (3) Liability for loss, even if loss through fortuitous
(a) Urgent need of the thing, during which time event, under certain circumstances [Art. 1942]
he may demand its return or temporary use (4) Liability for deterioration of thing loaned, except
(Art.1946) under certain circumstances [Art. 1943]
(b) Precarium (Art.1947) (5) Obligation to return the thing upon expiration of
(i) If duration of the contract has not been term or upon demand in case of urgent need [Art.
stipulated 1946]
(ii) If use or purpose of the thing has not been (6) Solidary obligation where there are 2 or more
stipulated bailees to whom a thing was loaned in the same
(iii) If use of thing is merely tolerated by the contract [Art.1945]
bailor
(c) Bailee commits an act of ingratitude specified General Rule: Bailee is not liable for loss or damage
in Art. 765 [Art. 1948]: due to a fortuitous event [Art. 1174], since the bailor
(1) Commission of offenses against the retains ownership of the thing
person, the honor, or the property of the
bailor, or of his wife or children under his Exception: Bailee is liable for loss even if due to a
parental authority fortuitous event when: [Art. 1942]
(2) Imputing to the bailor any criminal offense, (1) He devotes the thing to any purpose different
or any act involving moral turpitude, even from that for which it was loaned
though he should prove it, unless the crime (2) He keeps it longer than the period stipulated, or
or the act has been committed against the after the accomplishment of the use for which the
bailee himself, his wife, or children under commodatum has been constituted
his authority (3) The thing loaned has been delivered with
(3) Undue refusal to give the bailor support appraisal of its value, unless there is stipulation
when the bailee is legally or morally bound exempting the bailee from responsibility in case
to do so of a fortuitous event
(4) He lends or leases the thing to a third person who
(NOTE: Article 765 is applicable, because like is a not a member of his household
donation, commodatum is essentially gratuitous. (5) Being able to save either the thing borrowed or
[Art.1933, par.2] his own thing, he chose to save the latter.
(2) To refund extraordinary expenses for the General Rule [1]: Bailee is liable for deterioration of
preservation of the thing loaned provided bailor is thing loaned.
notified before the expenses were incurred. [Art.
1949] Exception [1]: The deterioration of the thing is due
(a) Exception: Urgent need such that reply to the only to the use thereof and without his fault [Art.
notification cannot be awaited without 1943]
danger, hence no notice is necessary.
General Rule [2]: Bailee has no right of retention of
(3) To bear 50% of the extraordinary expenses the thing loaned, on the ground that the bailor owes
arising from actual use of bailee of the thing him something. [Art. 1944]
loaned [Art. 1949]
(a) Exception: Contrary stipulation Exception [2]: Bailee has a right of retention for
damages for known hidden flaws mentioned in Art
PAGE 280
1951. [Art. 1944] forbearance of money, the interest due should be

that which may have been stipulated in writing.
INTEREST AND SUSPENSION OF USURY LAW Furthermore, the interest due shall itself earn
Interest – is the compensation allowed by law or fixed legal interest from the time it is judicially
by the parties for the loan or forbearance of money, demanded. In the absence of stipulation, the rate
goods or credits of interest shall be 12% per annum to be
computed from default, i.e., from judicial or
KINDS OF INTEREST extrajudicial demand under and subject to the
(1) Simple interest – Paid for the principal at a certain provisions of Art.1169.
rate fixed or stipulated by the parties.
(2) Compound Interest – that which is imposed upon (2) When an obligation, not constituting a loan or
interest due and unpaid. forbearance of money, is breached, an interest on
(3) Legal Interest – that which the law directs to be the amount of damages awarded may be
charged in the absence of any agreement as to imposed at the discretion of the court at the rate
the rate between the parties. of 6% per annum. No interest, however, shall be
(4) Lawful Interest – that which the laws allow or do adjudged on unliquidated claims or damages
not prohibit except when or until the demand can be
(5) Unlawful or Usurious Interest – paid or stipulated established with reasonable certainty.
to be paid beyond the maximum fixed by law. Accordingly, where the demand is established
However, by virtue of CB Circular 905, usury has with reasonable certainty, the interest shall begin
become “legally inexistent.” to run from the time the claim is made judicially
or extrajudicially (Art. 1169) but when such
WHEN IS COMPOUND INTEREST ALLOWED? certainty cannot be so reasonably established at
(1) When there is an express written stipulation to the time the demand is made, the interest shall
that effect [Art. 1956] begin to run only from the date the judgment of
(2) Upon judicial demand. HOWEVER, debtor is not the court is made (at which time the
liable to pay compound interest even after quantification of damages may be deemed to
judicial demand when there is no stipulation for have been reasonably ascertained). The actual
payment of interest. [Art. 2212] base for the computation of legal interest shall, in
any case, be on the amount finally adjudged.
REQUISITES FOR INTEREST TO BE CHARGEABLE
(1) Must be expressly stipulated [Art 1956] (3) When the judgment of the court awarding a sum
(2) Agreement must be in writing [Art.1956] of money becomes final and executory, the rate of
(3) Must be lawful legal interest, whether the case falls under
paragraph 1 or paragraph 2, above, shall be 12%
While it is true that under Article 1956 of the Civil per annum from such finality until its satisfaction,
Code no interest shall be due unless it has been this interim period being deemed to be by then
expressly stipulated in writing, this applies only to an equivalent to a forbearance of credit.
interest for the use of money. It does not
comprehend interest paid as damages. [Integrated Forbearance is defined, within the context of usury
Realty Corporation v. Philippine National Bank, 174 law, as a contractual obligation of lender or creditor
SCRA 295] to refrain, during given period of time, from requiring
borrower or debtor to repay loan or debt then due
EXCEPTIONS TO REQUISITE OF EXPRESS STIPULATION and payable (Bataan Seedling v. Republic, 383 SCRA
(1) The debtor in delay is liable to pay legal interest 590)
(6% or 12% per annum) as indemnity for
damages [Art. 2209] THE USURY LAW (Act No.2566) is an act fixing rates
(2) Interest accruing from unpaid interest – Interest of interests upon loans and declaring the effect of
demanded shall earn interest from the time it is receiving or taking usurious rates and for other
judicially demanded [Art. 2212] or where there is purposes. (Arevalo v. Dimayuga, 49 Phil 894)
an express stipulation [Art. 1959]
CB Circular No. 905 – abolished interest rate ceilings.
RULES FOR AWARD OF INTEREST IN THE CONCEPT OF With the promulgation of such circular, usury has
ACTUAL AND COMPENSATORY DAMAGES (Eastern become “legally inexistent” as the parties can now
Shipping Lines v. CA, 234 SCRA 78) legally agree on any interest that may be charged on
(1) When the obligation breached consists in the the loan.
payment of a sum of money, i.e., a loan or
PAGE 281
ELEMENTS OF USURY OBLIGATIONS OF DEPOSITOR

(1) A loan or forbearance of money (1) Depositor is obliged to reimburse the depositary
(2) An understanding between parties that the loan for expenses incurred for preservation – if deposit
shall and may be returned is gratuitous. [Art. 1992]
(3) An unlawful intent to take more than the legal (2) Depositor is obliged to pay losses incurred due to
rate for the use of money or its equivalent character of thing deposited. [Art. 1993]
(4) The taking or agreeing to take for the use of the
loan of something in excess of what is allowed by General Rule: The depositor shall reimburse the
law. depositary for any loss arising from the character of
the thing deposited [Art. 1993]
A usurious loan transaction is not a complete nullity
but defective only with respect to the agreed interest. Exceptions
(Carpo v. Chua, G.R. Nos. 150773 and 153599) (1) Depositor was not aware of the danger;
(2) Depositor was not expected to know the
dangerous character of the thing;
(3) Depositor notified the depositary of such
Deposit dangerous character;
(4) Depositary was aware of the danger without
Deposit is constituted from the moment a person advice from the depositor.
receives a thing belonging to another, with the
obligation of safely keeping it and of returning the EXTINGUISHMENT OF DEPOSIT
A DEPOSIT IS EXTINGUISHED:
same. If the safekeeping of the thing delivered is not
the principal purpose of the contract, there is no (1) Upon the loss or deterioration of the thing
deposit but some other contract. [Art.1962] deposited;
(2) Upon the death of either the depositor or the
CHARACTERISTICS depositary, ONLY in gratuitous deposits;
(1) Real Contract because it is perfected by the (3) By other modes provided in the Civil Code, e.g.
delivery of the subject matter. novation, merger, etc. [See Art. 1231]
(2) Principal purpose of the contract of deposit is the
safekeeping of the thing delivered. EFFECT OF DEATH OF DEPOSITOR OR
(3) If gratuitous, it is unilateral because only the DEPOSITARY [Art. 1995]
depository has an obligation. If onerous, it is (1) Where deposit gratuitous – death of either of the
bilateral. depositor or depositary extinguishes the deposit
(personal in nature). By the word “extinguished,”
The principal purpose is safekeeping of the thing the law really means that the depositary is not
delivered, so that if it is only an accessory or obliged to continue with the contract of deposit.
secondary obligation, deposit is not constituted but (2) Where deposit for compensation – not
some other contract. extinguished by the death of either party.
CONTRACT OF DEPOSIT IS GENERALLY KINDS OF DEPOSIT

GRATUITOUS [Art. 1965], subject to the following (1) Judicial
exceptions: (2) Extrajudicial
(1) There is a contrary stipulation (a) Voluntary
(2) Depository is in the business of storing goods (b) Necessary
(3) Property saved from destruction during calamity
without owner’s knowledge; just compensation VOLUNTARY DEPOSIT
should be given to the depository. [Art. 1996(2) Voluntary Deposit - delivery is made by the will of the
and Art. 1997, par.2] depositor or by two or more persons each of whom
believes himself entitled to the thing deposited [Art.
ONLY MOVABLE THINGS MAY BE THE OBJECT 1968]
OF A DEPOSIT [Art. 1966] if the deposit is either
voluntary [Art. 1968] or necessary [Art. 1996]. NECESSARY DEPOSIT
HOWEVER, a judicial deposit may cover movable as Necessary Deposit - made in compliance with a legal
well an immovable property, its purpose being to obligation, or on the occasion of any calamity, or by
protect the rights of parties to the suit [Art. 2006]. travelers in hotels and inns [Arts. 1996-2004] or by
travelers with common carriers [Arts. 1734-1735]
PAGE 282
KINDS OF NECESSARY DEPOSITS

(1) It is made in compliance with a legal obligation, (Note: The hotel-keeper cannot free himself from
in which case it is governed by the law responsibility by posting notices to the effect that he
establishing it, and in case of deficiency, the rules is not liable for the articles brought by the guest.
on voluntary deposit e.g. Arts. 538, 586 and 2104 Such kind of stipulation shall be VOID. [Art. 2003])
(2) It takes place on the occasion of any calamity,
such as fire, storm, flood, pillage, shipwreck, or Triple-V Food Services v. Filipino Merchants Insurance
other similar events. There must be a causal Company: Regarding the legal deposit of a vehicle
relation between the calamity and the that was stolen while parked with Saisaki restaurant,
constitution of the deposit. In this case the “the depositary may not exempt itself from
deposit is governed by the rules on voluntary responsibility for loss or damage of the thing
deposit and Art. 2168 deposited with it, by exclusionary stipulation. Such
(3) Made by passengers with common carriers. [Art. stipulations are void for being contrary to law.”
1754]
(4) Made by travelers in hotels or inns. [Art. 1998] HOTEL-KEEPER’S RIGHT TO RETENTION
(1) The hotel-keeper has a right to retain the things
DEPOSITS BY TRAVELERS IN HOTELS AND INNS brought into the hotel by the guest, as a security
Before keepers of hotels or inns may be held for credits on account of
responsible as depositaries with regard to the effects (a) lodging, and
of their guests, the following must concur: (b) supplies usually furnished to hotel guests (Art.
(1) They have been previously informed about the 2004)
effects brought by the guests; and (2) NOTE: The right of retention recognized in this
(2) The latter have taken the precautions prescribed article is in the nature of a pledge created by
regarding their safekeeping. operation of law.
EXTENT OF LIABILITY UNDER ART.1998 JUDICIAL DEPOSIT

(1) Those in hotel rooms which come under the Judicial Deposit – takes place when an attachment or
term “baggage” or articles such as clothing as seizure of property in litigation is ordered [Arts.
are ordinarily used by travelers 2005-2009]
(2) Include those lost or damaged in hotel annexes
such as vehicles in the hotel’s garage. NATURE AND PURPOSE
It is auxiliary to a case pending in court. The purpose
WHEN HOTEL-KEEPER LIABLE is to maintain the status quo during pendency of the
Regardless of the amount of care exercised: litigation or to insure the right of the parties to the
(1) The loss or injury to personal property is caused property in case of a favorable judgment.
by his servants or employees as well as by
strangers [Art. 2000]. DEPOSITARY OF SEQUESTERED PROPERTY
(2) The loss is caused by the act of a thief or robber A person is appointed by the court [Art. 2007] with
done without the use of arms and irresistible the obligations:
force. [Art. 2001] (1) To take care of the property with the diligence of
a good father of the family. [Art. 2008]
WHEN HOTEL-KEEPER NOT LIABLE (2) To continue in his responsibility until the
(1) The loss or injury is caused by force majeure, like controversy which give rise thereto is ended
flood, fire, [Art. 2000] theft or robbery by a unless the court so orders. [Art. 2007]
stranger - not the hotel-keeper’s servant or
employee with the use of firearms or irresistible APPLICABLE LAW
force [Art. 2001] (1) The law on judicial deposit is remedial or
procedural in nature.
Exception: Hotel-keeper is guilty of fault or (2) Rules of Court shall govern matters not provided
negligence in failing to provide against the loss or for in the Civil Code. [Art. 2009]
injury from his cause. [Arts. 1170 and 1174]
(2) The loss is due to the acts of the guests, his

family, servants, visitors [Art.2002] Guaranty and Suretyship
(3) The loss arises from the character of the things Guaranty is a contract whereby a person, called the
brought into the hotel (Ibid.) guarantor, binds himself to the creditor to fulfill the
PAGE 283
obligation of the principal debtor in case the latter

should fail to do so. [Art. 2047] (a) Presence of cause which supports principal
obligation: Cause of the contract is the same
While a surety undertakes to pay if the principal does cause which supports the obligation as to the
not pay, the guarantor only binds himself to pay if principal debtor. The consideration which
the principal cannot pay [See benefit of excussion, Art. supports the obligation as to the principal
2058]. debtor is a sufficient consideration to support
the obligation of a guarantor or surety.
Suretyship is a relation which exists where one (b) Absence of direct consideration or benefit to
person (principal) has undertaken an obligation and guarantor: Guaranty or surety agreement is
another person (surety) is also under a direct and regarded valid despite the absence of any
primary obligation or other duty to a third person direct consideration received by the guarantor
(oblige), who is entitled to but one performance, and or surety, such consideration need not pass
as between the two who are bound, the one rather directly to the guarantor or surety; a
than the other should perform. consideration moving to the principal will
suffice.
If a person binds himself solidarily with the principal
debtor, the contract is called suretyship and the (3) A married woman who is a guarantor binds only
guarantor is called a surety. her separate property, generally [2049]
GUARANTY DISTINGUISHED FROM SURETYSHIP Exceptions

(a) With her husband’s consent, bind the
Guaranty Suretyship community or conjugal partnership property
Guarantor’s liability Surety assumes liability (b) Without husband’s consent, in cases provided
depends upon an as a regular party to the by law, such as when the guaranty has
independent agreement undertaking redounded to the benefit of the family.
to pay the obligation
Guarantor’s engagement Surety is an original (4) A guaranty need not be undertaken with the
is a collateral promissory knowledge of the debtor [2050]
undertaking (a) Guaranty is unilateral – exists for the benefit
of the creditor and not for the benefit of the
Guarantor is subsidiarily Surety is primarily liable
principal debtor
liable i.e. only obliged to i.e. bound to pay if the
(b) Creditor has every right to take all possible
pay if the principal principal does not pay
measures to secure payment of his credit –
cannot pay
guaranty can be constituted even against the
Guarantor not bound to Surety ordinarily held to
will of the principal debtor
take notice of default of know every default of his
his principal principal
However, as regards payment made by a third
Guarantor often Surety not discharged person:
discharged by the mere either by the mere (a) Payment without the knowledge or against
indulgence of the indulgence of the the will of the debtor:
creditor and is usually creditor or by want of (i) Guarantor can recover only insofar as the
not liable unless notified notice of default of the payment has been beneficial to the debtor
of the principal’s default principal [Art. 1236]
(ii) Guarantor cannot compel the creditor to
NATURE AND EXTENT OF GUARANTY subrogate him in his rights [Art. 1237]
NATURE AND EXTENT OF GUARANTY (b) Payment with knowledge or consent of the
(1) A guaranty is generally gratuitous [2048] debtor: Subrogated to all the rights which the
(a) General Rule: Guaranty is gratuitous creditor had against the debtor
(b) Exception: When there is a stipulation to the
contrary (5) The guaranty must be founded on a valid principal
obligation [2052(1)]
(2) On the cause of a guaranty contract
A guarantor or surety is bound by the same Guaranty is an accessory contract: It is an
consideration that makes the contract effective indispensable condition for its existence that
between the principal parties thereto. [Severino v. there must be a principal obligation. Hence, if the
Severino] principal obligation is void, it is also void.
PAGE 284
condition precedent are valid and binding

(6) A guaranty may secure the performance of a before the occurrence of the condition
voidable, unenforceable, and natural obligation precedent.
[2052(2)]
A guaranty may secure the performance of a: A continuing guaranty is one which is not limited to a
(a) Voidable contract – such contract is binding, single transaction, but which contemplates a future
unless it is annulled by a proper court action course of dealing, covering a series of transactions,
(b) Unenforceable contract – because such generally for an indefinite time or until revoked. It is
contract is not void prospective in its operation and is generally intended
(c) Natural obligation – the creditor may proceed to provide security with respect to future transactions
against the guarantor although he has no within certain limits, and contemplates a succession
right of action against the principal debtor for of liabilities, for which, as they accrue, the guarantor
the reason that the latter’s obligation is not becomes liable.
civilly enforceable. When the debtor himself
offers a guaranty for his natural obligation, he A continuing guaranty is one which covers all
impliedly recognizes his liability, thereby transactions, including those arising in the future,
transforming the obligation from a natural which are within the description or contemplation of
into a civil one. the contract of guaranty, until the expiration or
termination thereof. A guaranty shall be construed
(7) A guaranty may secure a future debt [2053] as continuing when by the terms thereof it is evident
Continuing Guaranty or Suretyship: that the object is to give a standing credit to the
(a) Under the Civil Code, a guaranty may be given principal debtor to be used from time to time either
to secure even future debts, the amount of indefinitely or until a certain period, especially if the
which may not be known at the time the right to recall the guaranty is expressly reserved.
guaranty is executed. This is the basis for
contracts denominated as continuing Where the contract of guaranty states that the same
guaranty or suretyship. [Diño v. CA] is to secure advances to be made "from time to time"
(b) Future debts, even if the amount is not yet the guaranty will be construed to be a continuing
known, may be guaranteed but there can be one.”
no claim against the guarantor until the
amount of the debt is ascertained or fixed and (8) A guaranty may secure the performance of a
demandable conditional obligation [2053]
(a) Principal obligation subject to a suspensive
Rationale: A contract of guaranty is subsidiary. condition – the guarantor is liable only after
(a) To secure the payment of a loan at maturity – the fulfillment of the condition.
surety binds himself to guarantee the (b) Principal obligation subject to a resolutory
punctual payment of a loan at maturity and condition – the happening of the condition
all other obligations of indebtedness which extinguishes both the principal obligation and
may become due or owing to the principal by the guaranty
the borrower.
(b) To secure payment of any debt to be (9) A guarantor’s liability cannot exceed the principal
subsequently incurred – a guaranty shall be obligation [2054]
construed as continuing when by the terms
thereof it is evident that the object is to give a General Rule:
standing credit to the principal debtor to be Guaranty is a subsidiary and accessory contract –
used from time to time either indefinitely or guarantor cannot bind himself for more than the
until a certain period, especially if the right to principal debtor and even if he does, his liability
recall the guaranty is expressly reserved. shall be reduced to the limits of that of the
(c) To secure existing unliquidated debts – refers debtor. But the guarantor may bind himself for
to debts existing at the time of the less than that of the principal.
constitution of the guaranty but the amount
thereof is unknown and not to debts not yet Exceptions
incurred and existing at that time. (a) Interest, judicial costs, and attorney’s fees as
(d) The surety agreement itself is valid and part of damages may be recovered – creditors
binding even before the principal obligation suing on a suretyship bond may recover from
intended to be secured thereby is born, just the surety as part of their damages, interest at
like obligations which are subject to a the legal rate, judicial costs, and attorney’s
PAGE 285
fees when appropriate, even without NATURE AND EXTENT OF SURETYSHIP

stipulation and even if the surety would (1) Liability is contractual and accessory but direct
thereby become liable to pay more than the (2) Liability is limited by the terms of the contract
total amount stipulated in the bond. (3) Liability arises only if principal debtor is held liable
(a) In the absence of collusion, the surety is
Interest runs from: bound by a judgment against the principal
(1) Filing of the complaint (upon judicial even though he was not a party to the
demand); or proceedings;
(2) The time demand was made upon the surety (b) The creditor may sue, separately or together,
until the principal obligation is fully paid the principal debtor and the surety;
(upon extra-judicial demand) (c) A demand or notice of default is not required
to fix the surety’s liability
Rationale: Surety is made to pay, not by Exception: Where required by the provisions of
reason of the contract, but by reason of his the contract of suretyship
failure to pay when demanded and for having (d) A surety bond is void where there is no
compelled the creditor to resort to the courts principal debtor because such an undertaking
to obtain payment. presupposes that the obligation is to be
enforceable against someone else besides the
(b) Penalty may be provided – a surety may be surety, and the latter can always claim that it
held liable for the penalty provided for in a was never his intention to be the sole person
bond for violation of the condition therein. obligated thereby.
Principal’s liability may exceed guarantor’s Note: Surety is not entitled to exhaustion
obligations
The amount specified in a surety bond as the (1) The undertaking is to the creditor, not the debtor
surety’s obligation does not limit the extent of the The surety makes no covenant or agreement with
damages that may be recovered from the the principal that it will fulfill the obligation
principal, the latter’s liability being governed by guaranteed for the benefit of the principal. The
the obligations he assumed under his contract surety’s undertaking is that the principal shall
fulfill his obligation and that the surety shall be
(10) The existence of a guaranty is not presumed relieved of liability when the obligation secured is
[2055] performed.
Guaranty requires the expression of consent on
the part of the guarantor to be bound. It cannot Exception: Unless otherwise expressly provided.
be presumed because of the existence of a
contract or principal obligation. (2) Prior demand by the creditor upon principal not
required. Surety is not exonerated by neglect of
Rationale: creditor to sue principal.
(a) There be assurance that the guarantor had
the true intention to bind himself; Strictissimi juris rule applicable only to
(b) To make certain that on making it, the accommodation surety
guarantor proceeded with consciousness of Reason: An accommodation surety acts without
what he was doing. motive of pecuniary gain and hence, should be
protected against unjust pecuniary impoverishment
(11) Contract of guaranty is covered by the Statute of by imposing on the principal, duties akin to those of
Frauds [See Art. 1403(2)(b)] a fiduciary. This rule will apply only after it has been
Guaranty must not only be expressed but must so definitely ascertained that the contract is one of
be reduced into writing. Hence, it shall be suretyship or guaranty.
unenforceable by action, unless the same or
some note or memorandum thereof be in writing, Strictissimi juris rule NOT applicable to compensated
and subscribed by the party charged, or by his sureties
agent; evidence, therefore, of the agreement Reasons:
cannot be received without the writing, or a (1) Compensated corporate sureties are business
secondary evidence of its contents. However, it associations organized for the purpose of
need not appear in a public document assuming classified risks in large numbers, for
profit and on an impersonal basis.
(2) They are secured from all possible loss by
PAGE 286
adequate counter-bonds or indemnity the satisfaction of the obligation –

agreements. If such judicial action including
execution would not satisfy the
Such corporations are in fact insurers and in obligation, the guarantor can no
determining their rights and liabilities, the rules longer require the creditor to resort
peculiar to suretyship do not apply. to all such remedies against the
debtor as the same would be but a
The stipulation in the indemnity agreement allowing useless formality. It is not
the surety to recover even before it paid the creditor necessary that the debtor be
is enforceable. In accordance therewith, the surety judicially declared insolvent.
may demand from the indemnitors even before
paying the creditors. [Mercantile Insurance Company Southern Motors, Inc. v. Barbosa: “The right of
v. Ysmael, 169 SCRA 66] guarantors…to demand exhaustion of the property of
the principal debtor, exists only when a pledge or a
EFFECT OF GUARANTY mortgage has not been given as special security for
EFFECTS OF GUARANTY BETWEEN THE GUARANTOR AND the payment of the principal obligation.”
THE CREDITOR
(1) The guarantor has the right to benefit from Luzon Steel Corp. v. Sia: “The surety in the present
excussion/ exhaustion [2058] case bound itself "jointly and severally" (in solidum)
with the defendant; and excussion (previous
The guarantor cannot be compelled to pay the exhaustion of the property of the debtor) shall not
creditor unless the latter has: take place "if he (the guarantor) has bound himself
(a) Exhausted all of the property of the debtor; solidarily with the debtor".
and
(b) Resorted to all the legal remedies against the (b) In order that the guarantor may make use of
debtor. the benefit of excussion, he must:
(i) Set it up against the creditor upon
Exceptions to the benefit of excussion (2059) the latter’s demand for payment
(a) As provided in Art. 2059: from him;
(i) If the guarantor has expressly (ii) Point out to the creditor:
renounced it. (a) Available property of the debtor – the
(ii) If he has bound himself solidarily guarantor should facilitate the
with the debtor. Here, the liability realization of the excussion since he is
assumed is that of a surety. The the most interested in its benefit.
guarantor becomes primarily liable (b) Within the Philippine territory –
as a solidary co- debtor. In effect, excussion of property located abroad
he renounces in the contract itself would be a lengthy and extremely
the benefit of exhaustion. difficult proceeding and would not
(iii) In case of insolvency of the debtor conform with the purpose of the
– guarantor guarantees the guaranty to provide the creditor with the
solvency of the debtor. If the means of obtaining the fulfillment of the
debtor becomes insolvent, the obligation.
liability of the guarantor arises as (c) Sufficient to cover the amount of the
the debtor cannot fulfill his debt
obligation (c) If he is a judicial bondsman and sub- surety
(iv) When the debtor has absconded, (2084)
or cannot be sued within the (d) Where a pledge or mortgage has been given
Philippines – the creditor is not by him as a special security
required to go after a debtor who is (e) If he fails to interpose it as a defense before
hiding or cannot be sued in our judgment is rendered against him.
courts, and to incur the delays and
expenses incident thereto. (2) The creditor has the right to secure a judgment
Exception: When the debtor has against the guarantor prior to the excussion
left a manager or representative
(v) If it may be presumed that an General Rule: An ordinary personal guarantor
execution on the property of the (NOT a pledgor or mortgagor), may demand
principal debtor would not result in exhaustion of all the property of the debtor
PAGE 287
before he can be compelled to pay. (8) Co-guarantors are entitled to the benefit of division
Exception: The creditor may, prior thereto, secure [2065]
a judgment against the guarantor, who shall be The benefit of division applies only when there
entitled, however, to a deferment of the execution are several guarantors and one debtor for a
of said judgment against him, until after the single debt. Except when solidarity has been
properties of the principal debtor shall have been stipulated, a co-guarantor is liable only to the
exhausted, to satisfy the latter’s obligation. extent of his share in the obligation as divided
among all the co-guarantors.
(3) The creditor has the duty to make prior demand for
payment from the guarantor 2060) EFFECTS OF GUARANTY BETWEEN THE DEBTOR AND THE
(a) The demand is to be made only after GUARANTOR
judgment on the debt (1) The guarantor who pays has the right to be
(b) Joining the guarantor in the suit against the subrogated to the rights of the creditor [2067]
principal debtor is not the demand intended A guarantor who pays the debt is entitled to every
by law. Actual demand has to be made. remedy which the creditor has against the
principal debtor, to enforce every security and all
(4) The guarantor has the duty to set up the benefit of means of payments; to stand in the place of the
excussion [2060] creditor not only through the medium of the
As soon as he is required to pay, guarantor must contract, but even by means of the securities
also point out to the creditor available property entered into w/out the knowledge of the surety;
(not in litigation or encumbered) of the debtor having the right to have those securities
within the Philippines. transferred to him though there was no
stipulation for it, and to avail himself of all
(5) The creditor has the duty to resort to all legal securities against the debtor
remedies [2058, 2061]
After the guarantor has fulfilled the conditions The need to enforce the provisions on indemnity
required for making use of the benefit of in Article 2066 forms the basis for the
excussion, it becomes the duty of the creditor to: subrogation clause of Article 2067. The
(a) Exhaust all the property of the debtor pointed assumption, however, is that the guarantor who is
out by the guarantor; subrogated to the rights of the creditor, has the
(b) If he fails to do so, he shall suffer the loss for right to be reimbursed for his answering for the
the insolvency of the debtor, but only to the obligation of the debtor. Absent this right of
extent of the value of the said property reimbursement, subrogation will not be proper.
(6) The creditor has the duty to notify the guarantor in (2) The guarantor has the duty to notify the debtor
the action against the debtor [2062] before paying the creditor [2068].
Notice to the guarantor is mandatory in the
action against the principal debtor. The Should payment be made without notification,
guarantor, however, is not duty bound to appear and supposing the debtor has already made a
in the case, and his non- appearance shall not prior payment, the debtor would be justified in
constitute default, w/ its consequential effects. setting up the defense that the obligation has
already been extinguished by the time the
Rationale: To give the guarantor the opportunity guarantor made the payment. The guarantor will
to allege and substantiate whatever defenses he then lose the right of reimbursement and
may have against the principal obligation, and consequently the right of subrogation.
chances to set up such defenses as are afforded
him by law (3) The guarantor cannot demand reimbursement for
payment made by him before the obligation has
(7) A compromise shall not prejudice the person not become due [2069].
party to it [2063]
(a) A compromise between creditor and principal General Rule: Since a contract of guaranty is only
debtor benefits the guarantor but does not subsidiary, the guarantor cannot be liable for the
prejudice him. obligation before the period on which the
(b) A compromise between guarantor and the debtor’s Liability will accrue. Any payment made
creditor benefits but does not prejudice the by the guarantor before the obligation is due
principal debtor. cannot be indemnified by the debtor.
PAGE 288
Exception: Prior consent or subsequent (b) By judicial demand

ratification by the debtor (3) The paying guarantor seeks to be indemnified
only to the extent of his proportionate share in
(4) The guarantor may proceed against the debtor the total obligation.
even before payment has been made [2071]
General Rule: Guarantor has no cause of action EXTINGUISHMENT OF GUARANTY

against the debtor until after the former has paid (1) Once the obligation of the debtor is extinguished
the obligation. in any manner provided in the Civil Code, the
obligation of the guarantor is also extinguished
Exceptions (Art. 2071) [2076]. However, there may be instances when,
(a) When he is sued for the payment; after the extinguishment of the guarantor’s
(b) In case of insolvency of the principal debtor; obligation (as in the case of a release from the
(c) When the debtor has bound himself to relieve guaranty), the obligation of the debtor still
him from the guaranty within a specified subsists.
period, and this period has expired; (2) Although the guarantor generally has to make
(d) When the debt has become demandable, by payment in money, any other thing of value, if
reason of the expiration of the period for accepted by the creditor, is valid payment and
payment; therefore releases the guarantor [dacion en pago]
(e) After the lapse of 10 years, when the principal [2077].
obligation has no fixed period for its maturity, (3) If one guarantor is released without the consent
unless it be of such nature that it cannot be of the others, the release would benefit the co-
extinguished except within a period longer guarantors to the extent of the proportionate
than 10 years; share of the guarantor released [2078].
(f) If there are reasonable grounds to fear that (4) A guarantor is released if the creditor, without the
the principal debtor intends to abscond; guarantor’s consent, extends the time within
(g) If the principal debtor is in imminent danger of which the debtor may perform his obligation
becoming insolvent. [2079]. This is to protect the interest of the
guarantor should the debtor be insolvent during
Rationale: To enable the guarantor to take the period of extension and deprive the guarantor
measures for the protection of his interest in view of his right to reimbursement.
of the probability that he would be called upon to (5) The guarantors are released if by some act of the
pay the debt. As such, he may, in the alternative, creditor they cannot be subrogated to the rights,
obtain release from the guaranty; or demand mortgages and preferences of the latter. [2080]
security that shall protect him from any
proceeding by the creditor, and against the In order to constitute an extension discharging the
insolvency of the debtor. surety, it should appear that the extension was for (1)
a definite period, (2) pursuant to an enforceable
EFFECTS OF GUARANTY AS BETWEEN CO-GUARANTORS agreement between the principal and the creditor,
When there are two or more guarantors, one debtor and (3) that it was made without the consent of the
and one debt: surety or with a reservation of rights with respect to
(a) The one who pays may demand from each of the him. (Filipinas Textile Mills v. CA, November 12, 2003)
others the share proportionally owing to him
(b) If any of the guarantors is insolvent, his share LEGAL AND JUDICIAL BONDS
shall be borne by the others, including the payer, Bond – an undertaking that is sufficiently secured,
in the same proportion [Art. 2073] and not cash or currency.
For purposes of proportionate reimbursement, the Bondsman – a surety offered in virtue of a provision
other guarantors may interpose such defenses of law or a judicial order.
against the paying guarantor as are available to the
debtor against the creditor, except those that are QUALIFICATIONS OF PERSONAL BONDSMAN [2082 IN
personal to the debtor [Art. 2074] RELATION TO ART. 2056]
(1) He possesses integrity;
Requisites for the applicability of Art. 2073: (2) He has capacity to bind himself;
(1) Payment has been made by one guarantor; (3) He has sufficient property to answer for the
(2) The payment was made because obligation which he guarantees.
(a) Of the insolvency of the debtor, or
PAGE 289
PLEDGE OR MORTGAGE IN LIEU OF BOND [2083] (6) Creditor has the right to retain the thing in his
(a) Guaranty or suretyship is a personal security. possession or in that of a third person to whom it
(b) Pledge or mortgage is a property or real security. has been delivered, until the debt is paid [2098].
If the person required to give a legal or judicial (7) Special Laws apply to pawnshops and
bond should not be able to do so, a pledge or establishments engaged in making loans secured
mortgage sufficient to cover the obligation shall by pledges. Provisions of the Civil Code shall
be admitted in lieu thereof. apply subsidiarily to them.
BONDSMAN NOT ENTITLED TO EXCUSSION [2084] In case of doubt as to whether a transaction is a

A judicial bondsman and the sub-surety are not pledge or a dation in payment, the presumption is in
entitled to the benefit of excussion. favor of pledge, the latter being the lesser
(a) Reason: They are not mere guarantors, but transmission of rights and interests. (Manila Banking
sureties whose liability is primary and solidary. Corp. v. Teodoro, 169 SCRA 95)
(b) Effect of negligence of creditor: Mere negligence
on the part of the creditor in collecting from the KINDS
debtor will not relieve the surety from liability. (1) Voluntary or conventional – Created by agreement
of parties.
(2) Legal – Created by operation of law.
Pledge ESSENTIAL REQUIREMENTS

ESSENTIAL REQUISITES COMMON TO PLEDGE AND
MORTGAGE [ART. 2085]
DEFINITION
(1) Constituted to secure the fulfillment of a principal
Pledge is a contract by virtue of which the debtor
obligation.
delivers to the creditor or to a third person a movable
(2) Pledgor or mortgagor must be the absolute
or document evidencing incorporeal rights for the
owner of the thing pledged or mortgaged.
purpose of securing the fulfillment of a principal
(3) The persons constituting the pledge or mortgage
obligation with the understanding that when the
have the free disposal of their property, and in the
obligation is fulfilled, the thing delivered shall be
absence thereof, that they be legally authorized
returned with all its fruits and accessions. [Art.2085
for the purpose.
in relation to 2093]
(4) Cannot exist without a valid obligation.
(5) Debtor retains the ownership of the thing given
PROVISIONS APPLICABLE ONLY TO PLEDGE
as a security.
(1) Transfer of possession to the creditor or to third
(6) When the principal obligation becomes due, the
person by common agreement is essential
thing pledged or mortgaged may be alienated for
[2093].
the payment to the creditor. [Art. 2087]
(a) Actual delivery is important.
(b) Constructive or symbolic delivery of the key to
OBLIGATION OF PLEDGEE
the warehouse is sufficient to show that the
(1) The pledgee cannot deposit the thing pledged
depositary appointed by common consent of
with a 3rd person, unless there is a contrary
the parties was legally placed in possession.
stipulation [2100].
(2) All movables within the commerce of man may
(2) Is responsible for the acts of his agents or
be pledged as long as they are susceptible of
employees with respect to the thing pledged
possession [2094].
[2100].
(3) Incorporeal rights may be pledged. The
(3) Has no right to use the thing or to appropriate its
instruments representing the pledged rights shall
fruits without authority from the owner [2104]
be delivered to the creditor; if negotiable, they
(4) May cause the public sale of the thing pledged if,
must be indorsed [2095].
without fault on his part, there is danger of
(4) Pledge shall take effect against 3rd persons only
destruction, impairment or dimunition in value of
if the following appear in a public instrument:
the thing. The proceeds of the auction shall be a
(a) Description of the thing pledged.
security for the principal obligation [2108].
(b) Date of the pledge [2096].
(5) The thing pledged may be alienated by the
RIGHTS OF PLEDGOR
pledgor or owner only with the consent of the
(1) Takes responsibility for the flaws of the thing
pledgee. Ownership of the thing pledged is
pledged [2101 in relation to Art. 1951].
transmitted to the vendee or transferee as soon
(2) Cannot ask for the return of the thing against the
as the pledgee consents to the alienation, but the
will of the creditor, unless and until he has paid
latter shall continue to have possession [2097].
PAGE 290
the debt and its interest, with expenses in a EFFECT OF THE SALE OF THE THING PLEDGED [Art 2115]
proper case [2105]. (1) Extinguishes the principal obligation, whether the
proceeds of the sale is more or less than the
Yuliongsiu vs. PNB: There is authority supporting the amount due.
proposition that the pledgee can temporarily entrust (2) If the price of sale is more than amount due, the
the physical possession of the chattels pledged to debtor is not entitled to the excess unless the
the pledgor without invalidating the pledge. In such contrary is provided.
a case, the pledgor is regarded as holding the (3) If the price of sale is less, the creditor is not
pledged property merely as trustee for the pledgee. entitled to recover the deficiency. A contrary
The type of delivery will depend upon the nature and stipulation is void.
the peculiar circumstances of each case.
PLEDGE BY OPERATION OF LAW – ART. 2121-
PNB vs. Atendido: according to law, a pledgee cannot 2122
become the owner of, nor appropriate to himself, the LEGAL PLEDGES/PLEDGE BY OPERATION OF LAW [Art.
thing given in pledge. If by the contract of pledge the 2121]
pledgor continues to be the owner of the thing (1) Necessary expenses shall be refunded to every
pledged during the pendency of the obligation, it possessor, but only a possessor in good faith may
stands to reason that in case of loss of the property, retain the thing until he has been reimbursed.
the loss should be borne by the pledgor. (a) Useful expenses shall be refunded only to the
possessor in good faith with the same right of
(3) Subject to the right of the pledgee under article retention, the person who has defeated him in
2108, pledgor is allowed to substitute the thing the possession having the option of refunding
which is in danger of destruction or impairment the amount of the expenses or of paying the
without any fault on the part of the pledgee with increase in value which the thing may have
another thing of the same kind and quality [2107]. acquired and by reason thereof [Art. 546]
(4) May require that the thing be deposited with a (2) He who has executed work upon a movable has a
3rd person, if through the negligence or willful right to retain it by way of pledge until he is paid.
act of the pledgee the thing is in danger of being This is called the mechanic’s lien. [Art. 1731]
lost or impaired [2106]. (3) The agent may retain the things which are the
objects of agency until the principal effects the
PERFECTION – ARTS. 2093, 2096 reimbursement and pays the indemnity. This is
REQUISITES FOR PERFECTION called the agent’s lien. [Art. 1914]
(1) The thing pledged is placed in the possession of (4) The laborer’s wages shall be a lien on the goods
the creditor or a third person [2093] manufactured or the work done. [Art. 1707]
(2) For the pledge to take effect as against third
persons, a description of the thing pledged and Note:
the date of the pledge should appear in a public (1) In legal pledges, the remainder of the price of the
instrument [2096] sale shall be delivered to the obligor.
(2) Public auction of legal pledges may only be
FORECLOSURE ARTS. 2112, 2115 executed after demand of the amount for which
REQUIREMENTS IN SALE OF THE THING PLEDGED BY A the thing is retained. It shall take place within one
CREDITOR, IF CREDIT IS NOT PAID ON TIME (ART 2112) month after the demand, otherwise the pledgor
(1) Debt is due and unpaid. may demand the return of the thing pledged,
(2) Sale must be at a public auction. provided s/he is able to show that the creditor did
(3) Notice to the pledgor and owner, stating the not cause the public sale without justifiable
amount due. grounds. [Article 2122]
(4) Sale must be made with the intervention of a
notary public. DISTINGUISHED FROM CHATTEL MORTGAGE –
(5) If at the first auction the thing is not sold, a ARTS. 2140, 1484
second one with the same formalities shall be Chattel Mortgager Pledge
held.
(6) If at the second auction, there is no sale either, Delivery of Personal Property
the creditor may appropriate the thing pledged
but he shall give an acquittance (release) for his Not required Delivery is required for the
entire claim. validity of the pledge
Registration in the Chattel Mortgage Register
PAGE 291
Chattel Mortgager Pledge property, but ownership of the property is not

parted with. It merely restricts the mortgagor’s
Necessary for validity of Not necessary; jus disponendi over the property. The mortgagor
the CM against third Public document is may still sell the property, and any stipulation to
persons enough to bind third the contrary is void [Art. 2130]
persons (4) Mortgage extends to the natural accessions, to
the improvements of growing fruits and the rents
Right to Excess of Proceeds of Sale or income NOT YET RECEIVED when the
The excess goes to the The excess goes to the obligation becomes DUE, including indemnity
debtor/ mortgagor pledgee/creditor, unless from insurance, and/or amount received from
otherwise stipulated expropriation for public use [Art. 2127]
(a) Applies only when the accessions and
Right to Recover Deficiency accessories subsequently introduced belongs
Creditor/ mortgagee can Creditor/ mortgagee is to the mortgagor.
recover from the debtor/ not entitled to recover any (b) To exclude them, there must be an express
mortgagor, except if deficiency after the stipulation, or the fruits must be collected
covered by Recto Law property is sold, before the obligation becomes due.
notwithstanding contrary (c) Third persons who introduce improvements
stipulation upon the mortgaged property may remove
them at any time
Note: The provisions of the Civil Code on pledge,
insofar as they are not in conflict with the Chattel The consideration of the accessory contract of real
Mortgage Law shall be applicable to chattel estate mortgage is the same as that of the principal
mortgages [Art. 2141] contract. [Central Bank v. CA, 139 SCRA 46]
KINDS
Real Mortgage (1) Voluntary – constituted by the will of the owner of
the property on which it is created
DEFINITION AND CHARACTERISTICS
Mortgage is a contract whereby the debtor secures to (2) Legal – required by law to be executed in favor of
the creditor the fulfillment of a principal obligation, certain persons:
immediately making immovable property or real (a) Persons in whose favor the law establishes a
rights answerable to the principal obligation in case mortgage have no other right than to demand
it is not complied with at the time stipulated. the execution and recording of the document
in which the mortgage is formalized [Article
OBJECTS OF REAL MORTGAGE [Art. 2124] 2125]
(1) Immovables (b) The bondsman who is to be offered in virtue of
(2) Alienable real rights over immovables. a provision of law or of a judicial order shall
(a) Future property cannot be an object of have the qualifications prescribed in Art 2056
mortgage; however, a stipulation subjecting to (integrity, capacity to bind himself, and
the mortgage improvements which the sufficient property to answer for the
mortgagor may subsequently acquire, install obligation), and in other laws [Article 2082]
or use in connection with real property already (c) If the person bound to give a bond should not
mortgaged belonging to the mortgagor is be able to do so, a pledge or mortgage
valid. considered sufficient to recover his obligation
shall be admitted in lieu thereof [Article 2083]
CHARACTERISTICS
(1) As a general rule, the mortgagor retains (3) Equitable – One which, although lacking the
possession of the property. He may deliver said proper formalities of a mortgage, shows the
property to the mortgagee without altering the intention of the parties to make the property a
nature of the contract of mortgage. security for the debt.
(2) It is not an essential requisite that the principal of (a) lien created through equitable mortgage
the credit bears interest, or that the interest as ought not to be defeated by requiring
compensation for the use of the principal and the compliance with formalities necessary to the
enjoyment of its fruits be in the form of a certain validity of a voluntary real estate mortgage.
percentage thereof. Ex.: Pacto de retro
(3) Mortgage creates an encumbrance over the (b) provisions governing equitable mortgage:
PAGE 292
Arts. 1365, 1450, 1454, 1602, 1603, 1604 and (4) Cannot exist without a valid obligation.
1607. (5) Debtor retains the ownership of the thing given
as a security.
(6) When the principal obligation becomes due, the
PRINCIPLE OF INDIVISIBILITY OF PLEDGE/MORTGAGE thing pledged or mortgaged may be alienated for
[ART. 2089 TO 2090] the payment to the creditor. [Art. 2087]
(a) Dayrit v. CA: A mortgage directly and immediately (7) Must be recorded in the Registry of Property in
subjects the property upon which it is imposed. It order to be validly constituted.
is indivisible even though the debt may be Note: The mortgage would still be binding
divided, and such indivisibility is likewise between the parties even if the instrument is not
unaffected by the fact that the debtors are not recorded.
solidarity liable.
(b) Central Bank v. CA: Where only a portion of the FORECLOSURE
loan is released, the mortgage becomes FORECLOSURE OF MORTGAGE
enforceable only as to the proportionate value of It is the remedy available to the mortgagee by which
the loan he subjects the mortgaged property to the
satisfaction of the obligation secured by the
Indivisibility applies only as to pledgors/mortgagors mortgage.
who are themselves debtors in the principal (a) In General: An action for foreclosure of a
obligation, and not to accommodation pledgors/ mortgage is limited to the amount mentioned in
mortgagors the mortgage, EXCEPT when the mortgage
contract intends to secure future loans or
"When several things are pledged or mortgaged, advancements
each thing for a determinate portion of the debt, the (b) BLANKET mortgage/DRAGNET– mortgage that
pledges or mortgage, are considered separate from subsumes all debts of past or future origin
each other. But when the several things are given to (c) Mortgage may be used as a “continuing security”
secure the same debt in its entirety, all of them are which secures future advancements and is not
liable for the debt, and the creditor does not have to discharged by the repayment of the amount in
divide his action by distributing the debt among the the mortgage
various things pledged or mortgaged. Even when (d) Alienation or assignment of mortgage credit is
only a part of the debt remains unpaid, all the things valid even if it is not registered
are still liable for such balance." [Tolentino]
Acceleration Clause, or the stipulation stating that on
The question is whether or not the written the occasion of the mortgagor’s default, the whole
instrument in controversy was a mortgage OR a sum remaining unpaid automatically becomes due
conditional sale. The correct test, where it can be and demandable, is ALLOWED
applied, is the continued existence of a debt or
liability between the parties. If such exists, the KINDS OF FORECLOSURE
conveyance may be held to be merely a security for (1) Judicial Foreclosure
the debt or an indemnity against the liability. (Reyes (2) Extrajudicial Foreclosure
v. Sierra, 93 SCRA 473)
JUDICIAL FORECLOSURE
ESSENTIAL REQUISITES Rule 68, ROC:
ESSENTIAL REQUISITES COMMON TO PLEDGE AND (a) May be availed of by bringing an action in the
MORTGAGE proper court which has jurisdiction over the area
(1) Constituted to secure the fulfillment of a principal wherein the real or personal (in case of chattel
obligation. mortgage) property involved or a portion thereof
(2) Pledgor or mortgagor must be the absolute is situated.
owner of the thing pledged or mortgaged. (b) If the court finds the complaint to be well-
(3) The persons constituting the pledge or mortgage founded, it shall order the mortgagor to pay the
have the free disposal of their property, and in the amount due with interest and other charges
absence thereof, that they be legally authorized within a period of not less than 90 days nor more
for the purpose. than 120 days from the entry of judgment. If the
Note: Third persons who are not parties to the mortgagor fails to pay at the time directed, the
principal obligation may secure the latter by court, upon motion, shall order the property to be
pledging or mortgaging their own property. [Art. sold to the highest bidder at a public auction.
2085] (c) Upon confirmation of the sale by the court, it
PAGE 293
shall operate to divest the rights of all parties to to the buyer, which is similar to the equity of
the action and to vest their rights to the redemption. The TCT must be registered
purchaser subject to such rights of redemption as within THREE MONTHS after the foreclosure.
may be allowed by law. (b) The mortgagor can only legally transfer the
(d) Before the confirmation, the court retains control right to redeem and the use of the property
of the proceedings during the period of redemption.
(e) Execution of judgment subject to APPEAL but not (7) Remedy of party aggrieved by foreclosure is a
annulment petition to set aside sale and the cancellation of
(f) The foreclosure of the property is completed only writ of possession. However, if the mortgagee is a
when the sheriff’s certificate is executed, bank, the mortgagor is required to post a bond
acknowledged and recorded equal to the value of the mortgagee’s claim.
(8) Republication of the notice of sale is necessary for
The Proceeds of the Sale shall be applied to the the validity of the postponed extrajudicial sale
Payment of the: (9) In foreclosure of real estate mortgage under Act
(a) Costs of the sale; 3135, the buyer at auction may petition the land
(b) Amount due the mortgagee; registration court for a writ of possession pending
(c) Claims of junior encumbrancers or persons the one-year period of redemption of the
holding subsequent mortgages in the order of foreclosed property.
their priority; and
(d) Balance, if any shall be paid to the mortgagor. Nature of Power of Foreclosure by Extrajudicial Sale
(1) Conferred for mortgagee’s protection.
Nature of Judicial Foreclosure Proceedings (2) An ancillary stipulation.
(1) Quasi in rem action. Hence, jurisdiction may be (3) A prerogative of the mortgagee.
acquired through publication.
(2) Foreclosure is only the result or incident of the Note:
failure to pay debt. (a) Both should be distinguished from execution sale
(3) Survives death of mortgagor. governed by Rule 39, ROC.
(b) Foreclosure retroacts to the date of registration of
EXTRAJUDICIAL FORECLOSURE [ACT NO. 3135] mortgage.
(1) Applies to mortgages where the authority to (c) A stipulation of upset price, or the minimum price
foreclose is granted to the mortgagee. at which the property shall be sold to become
(2) Authority is not extinguished by death of operative in the event of a foreclosure sale at
mortgagor or mortgagee. This is an agency public auction, is null and void.
coupled with interest.
(3) Public sale should be made after proper notice to Right of mortgagee to recover deficiency
the public, otherwise it is a jurisdictional defect (1) Mortgagee is entitled to recover deficiency.
which could render the sale voidable. (2) If the deficiency is embodied in a judgment, it is
(4) There is no need to notify the mortgagor, where referred to as deficiency judgment.
there is no contractual stipulation therefor. (3) Action for recovery of deficiency may be filed even
during redemption period.
Proper notice consists of: (4) Action to recover prescribes after 10 years from
(a) posting notice in three public places and/or the time the right of action accrues.
(b) publication in newspaper of general
circulation Effect of inadequacy of price in foreclosure sale
(1) Where there is right to redeem, inadequacy of
Purpose of notice is to obtain the best bid for the price is immaterial because the judgment debtor
foreclosed property may redeem the property.
(a) Exception: Where the price is so inadequate as
(5) Surplus proceeds of foreclosure sale belong to to shock the conscience of the court, taking
the mortgagor. into consideration the peculiar circumstances.
(6) Debtor (who must be a NATURAL PERSON) has (2) Property may be sold for less than its fair market
the right to redeem the property sold within 1 year value, upon the theory that the lesser the price
from and after the date of sale. the easier it is for the owner to redeem.
(a) If the mortgagee is a bank and the debtor is a (3) The value of the mortgaged property has no
juridical person, then there is no right of bearing on the bid price at the public auction,
redemption. However, it may redeem the provided that the public auction was regularly
property BEFORE the registration of the TCT and honestly conducted.
PAGE 294
A suit for the recovery of the deficiency after the

foreclosure of a mortgage is in the nature of a
Antichresis
mortgage action because its purpose is precisely to
enforce the mortgage contract. [Caltex v. IAC, 176 DEFINITION AND CHARACTERISTICS
SCRA 741] Antichresis is a contract whereby the creditor
acquires the right to receive the fruits of an
Waiver of security by creditor immovable of the debtor, with the obligation to
(1) Mortgagee may waive the right to foreclose his apply then to the payment of the interest, if owing,
mortgage and maintain a personal action for and thereafter to the principal of the credit [Art 2132]
recovery of the indebtedness.
(2) Mortgagee cannot have both remedies. This is CHARACTERISTICS
because he only has one cause of action, the non- (1) Accessory contract – it secures the performance
payment of the mortgage debt. of a principal obligation
(2) Formal contract – it must be in a specified form
Redemption to be valid [Art. 2134]
(1) It is a transaction by which the mortgagor
reacquires the property which may have passed SPECIAL REQUISITES:
under the mortgage or divests the property of the (1) It can cover only the fruits of an immovable
lien which the mortgage may have created property
(2) Kinds: (2) Delivery of the immovable is necessary for the
(a) Equity of redemption: in judicial foreclosure of creditor to receive the fruits, not to make the
real estate mortgage under the ROC, it is the contract binding
right of the mortgagor to redeem the (3) Amount of principal and interest must be
mortgaged property by paying the secured specified in writing [Art. 2134]
debt within the 120 day period from entry of (4) Express agreement that debtor will give
judgment or after the foreclosure sale, but possession of the property to creditor and that
before the sale of the mortgaged property or the latter will apply the fruits to the interest, if
confirmation of sale any, then to the principal of his credit
(i) formal offer to redeem preserves the right of
redemption, e.g., by filing an action to NOTE: The obligation to pay interest is not the
enforce the right to redeem essence of the contract of antichresis; there being
(b) Right of redemption: in extrajudicial nothing in the Code to show that antichresis is only
foreclosure of real estate mortgage, the right applicable to securing the payment of interest-
of the mortgagor to redeem the property bearing loans. On the contrary, antichresis is
within a certain period after it was sold for the susceptible of guaranteeing all kinds of obligations,
satisfaction of the debt. pure or conditional
(ii) For natural persons – one year from the
registration of the TCT OBLIGATIONS OF ANTICHRETIC CREDITOR
(iii) For juridical persons – three months from (1) To pay taxes and charges on the estate, including
the foreclosure necessary expenses [Art. 2135].
(iv) Formal offer to redeem must be with Creditor may avoid said obligation by:
tender of redemption price to preserve (a) compelling the debtor to reacquire enjoyment
right of redemption of the property
(b) by stipulation to the contrary
Note: There is no right of redemption in pledge and (2) To apply all the fruits, after receiving them, to the
chattel mortgage. payment of interest, if owing, and thereafter to
the principal
Medida v. CA: The rule up to now is that the right of a (3) To render an account of the fruits to the debtor
purchaser at a foreclosure sale is merely inchoate (4) To bear the expenses necessary for its
until after the period of redemption has expired preservation and repair
without the right being exercised. The title to land
sold under mortgage foreclosure remains, in the REMEDIES OF CREDITOR IN CASE OF NON-PAYMENT OF
mortgagor or his grantee until the expiration of the DEBT
redemption period and conveyance by the master's (1) Action for specific performance
deed (2) Petition for the sale of the real property as in a
foreclosure of mortgage under Rule 68 of the
PAGE 295
Rules of Court [Art. 2137] REGISTRATION OF ASSIGNMENT OF MORTGAGE NOT

(a) The parties, however, may agree on an REQUIRED
extrajudicial foreclosure in the same manner (a) A chattel mortgage may be alienated or assigned
as they are allowed in contracts of mortgage to a third person
and pledge [Tavera v. El Hogar Filipino, Inc. 68 (b) The debtor is protected if he pays his creditor
Phil 712] without actual knowledge that the debt has been
(b) A stipulation authorizing the antichretic assigned
creditor to appropriate the property upon the (c) Affidavit of good faith is required.
non-payment of the debt within the agreed AFFIDAVIT OF GOOD FAITH is an oath in a
period is void [Art. 2088] contract of chattel mortgage wherein the parties
“severally swear that the mortgage is made for
the purpose of securing the obligation specified in
the conditions thereof and for no other purposes
Chattel Mortgage and that the same is a just and valid obligation
and one not entered into for the purpose of
fraud.”
DEFINITION AND CHARACTERISTICS
Chattel Mortgage is a conditional sale of personal Effect of Absence: Mortgage is vitiated only as against
property as security for the payment of a debt, or the third persons without notice.
performance of some other obligation specified
therein, the condition being that the sale shall be VENUE OF REGISTRATION
void upon the seller paying to the purchaser a sum of (a) If he resides in the Philippines, in the office of the
money or doing some other act named. If the register of deeds of the province in which the
condition is performed according to its terms, the mortgagor resides at the time of the making of
mortgage and sale immediately become void, and the chattel mortgage
the mortgagee is thereby divested of his title. (b) If he does not reside in the Philippines, in the
[Section 3, Act 1508] province in which the property is situated
(c) If the property is situated in a province different
CHARACTERISTICS from that in which the mortgagor resides, the
(1) It is an accessory contract because it secures mortgage shall be recorded in both provinces.
performance of a principal obligation [Sec. 4, Act 1508]
(2) It is a formal contract because it requires
registration in the Chattel Mortgage Register for When a corporation is a party to a chattel mortgage,
its validity (but only as against third persons) the affidavit may be made and subscribed by a
(3) It is a unilateral contract because it produces only director, trustee, cashier, treasurer, or manager
obligations on the part of the creditor to free the thereof, or by a person authorized to make or receive
thing from the encumbrance on fulfillment of the such mortgage.
obligation.
(4) The excess of the proceeds of the sale goes to the When a partnership is a party, the affidavit may be
debtor/mortgagor made and subscribed by one member thereof.
(5) Creditor/mortgagee can recover deficiency from
the debtor/mortgagor, except if covered by the VALIDITY OF CHATTEL MORTGAGE
Recto Law Chattel mortgage shall not be valid against any
person except the mortgagor, his executors or
REGISTRATION administrators unless:
PERIOD WITHIN WHICH REGISTRATION SHOULD BE MADE (1) The possession of the property is delivered to and
The law is substantially and sufficiently complied retained by the mortgagee or
with where the registration is made by the (2) The mortgage is recorded. (Sec. 4, Act 1508)
mortgagee before the mortgagor has complied with
his principal obligation and no right of innocent third FORMAL REQUISITES
persons is prejudiced. (a) It should substantially comply with the form
prescribed by law
EFFECT OF REGISTRATION (b) It should be signed by the person/s executing the
(1) Creates real rights same in the presence of two witnesses who shall
(2) Adds nothing to mortgage sign the mortgage as witnesses to the execution
thereof and
PAGE 296
(c) Each mortgagor and mortgagee or, in the does not within ten days after being requested
absence of the mortgagee, his agent or attorney, thereto by any person entitled to redeem, discharge
shall make and subscribe an affidavit in the form the mortgage in the manner provided by law, the
prescribed by law, which affidavit, signed by the person entitled to redeem may recover of the person
parties to the mortgage and the two witnesses whose duty it is to discharge the same, twenty pesos
and the certificate of the oath signed by the for his neglect and all damages occasioned thereby
person authorized to administer an oath shall be in an action in any court having jurisdiction of the
appended to such mortgage and recorded subject-matter thereof. [Sec. 8]
therewith. [Sec. 5, Act 1508]
When the condition of the chattel mortgage is
DESCRIPTION OF PROPERTY broken, a mortgagor or person holding a subsequent
The mortgaged property should be described such mortgage, or a subsequent attaching creditor may
as to enable the parties to the mortgage, or any redeem the same by paying or delivering to the
other person, after reasonable inquiry and mortgagee the amount due on such mortgage and
investigation, to identify the same. the reasonable costs and expenses incurred by such
breach of condition before the sale thereof. An
Large cattle as chattel mortgage attaching creditor who so redeems shall be
The description in the mortgage shall contain the subrogated to the rights of the mortgagee and
brands, class, sex, age, knots of radiated hair entitled to foreclose the mortgage in the same
commonly known as remolinos or cowlicks, and manner that the mortgagee could foreclose it
other marks of ownership as described and set forth Foreclosure
in the certificate of ownership of said animal/s, The mortgagee, his executor, administrator or assign
together with the number and place of issue of such may cause the mortgaged property or any part
certificates of ownership. thereof to be sold at a public auction by a public
officer:
Growing crops as chattel mortgage (1) After 30 days from the time of condition broken
The mortgage may contain an agreement stipulating (2) At a public place in the municipality where the
that the mortgagor binds himself properly to tend, mortgagor resides, or where the property is
care for and protect the crop while growing, and situated
faithfully and without delay to harvest the same, and (3) Provided at least 10 day-notice of the time, place,
that in default of the performance of such duties, the and purpose of such sale has been posted at 2 or
mortgagee may enter upon the premises, take all the more public places in such municipality, and
necessary measures for the protection of said crop, (4) The mortgagee, his executor, administrator, or
and retain possession thereof and sell the same, and assign shall notify the mortgagor or person
from the proceeds of such sale pay all expenses holding under him and the persons holding
incurred in caring for, harvesting, and selling the subsequent mortgages of the time and place of
crop and the amount of the indebtedness or sale at least 10 days previous to the sale:
obligation secured by the mortgage, and the surplus, (a) either by notice in writing directed to him or
if any, shall be paid to the mortgagor or those left at his abode, if within the municipality, or
entitled to the same. (b) sent by mail if he does not reside in such
municipality
PROPERTY COVERED BY CM
It is deemed to cover only the property described DISPOSITION OF PROCEEDS
therein and not like or substituted property The proceeds of the sale shall be applied to the
thereafter acquired by the mortgagor and placed in payment:
the same depository as the property originally (1) first, to the costs and expenses of mortgage
mortgaged, anything in the mortgage to the contrary (2) the residue shall be paid to persons holding
notwithstanding. [Sec. 8, Act 1508] subsequent mortgages in their order
(3) the balance, after paying the mortgages, shall be
Breaches paid to the mortgagor or person holding under
Failure of mortgagee to discharge the mortgage him on demand
If the mortgagee, assign, administrator, executor, or
either of them,
(1) after performance of the condition before or after
the breach thereof, or
(2) after tender of the performance of the condition,
Quasi-Contracts
at or after the time fixed for the performance,
A quasi-contract is that juridical relation resulting
PAGE 297
from a lawful, voluntary and unilateral act, and (5) Be personally liable for contracts which he
which has for its purpose the payment of indemnity entered into with third persons, even though he
to the end that no one shall be unjustly enriched or acted in the name of the owner, and there shall
benefited at the expense of another [Art. 2142] be no right of action between the owner and third
persons.
NEGOTIORUM GESTIO
(UNAUTHORIZED MANAGEMENT) The gestor shall not be personally liable for such
This takes place when a person voluntarily takes contracts, provided:
charge of another’s abandoned business or property (a) The owner has expressly or tacitly ratified the
without the owner’s authority [Art. 2144]. management, or
Reimbursement must be made to the gestor (i.e. one (b) When the contract refers to things pertaining
who carried out the business) for necessary and to the owner of the business. [Art. 2152]
useful expenses, as a rule.
Note: The responsibility of two or more gestors
THE OBLIGATION DOES NOT ARISE: shall be solidary, unless the management was
(1) When the property or business is not neglected or assumed to save the thing or business from
abandoned; imminent danger.
(2) If in fact the manager has been tacitly authorized
by the owner. OBLIGATIONS OF THE OWNER OF THE PROPERTY OR
BUSINESS
In the first case, the provisions of Articles 1317, 1403, Although the management was not expressly
No. 1, and 1404 regarding unauthorized contracts ratified, the owner who enjoys the advantages of the
shall govern. same shall:
(a) Be liable for the obligations incurred in his
In the second case, the rules on agency in Title X of interest
this Book shall be applicable. [Art. 2144] (b) Reimburse the gestor for the necessary and
useful expenses and for the damages the latter
OBLIGATIONS OF A GESTOR may have suffered in the performance of his
(1) Perform his duties with all the diligence of a good duties
father of a family
(2) Pay the damages which through his fault and The above obligations shall be incumbent upon the
negligence may be suffered by the owner of the owner if the management had for its purpose the
property/business under his management [Art. prevention of an imminent and manifest loss,
2145] although no benefit may have been derived. [Art.
(3) Be liable for the acts of the persons to whom he 2150]
delegated all or some of his duties. This is
without prejudice to the direct obligation of the If the owner did not derive any benefit and there was
delegate to the owner of the business. [Art. 2146] no imminent and manifest danger to the property or
(4) Be liable for any fortuitous event under the business, the owner would still be liable for the
following conditions: abovementioned obligations and expenses,
(a) If he undertakes risky operations which the provided:
owner was not accustomed to embark upon (a) The gestor has acted in good faith; AND
(b) If he has preferred his own interest to that of (b) The property or business is intact, ready to be
the owner returned to the owner. [Art. 2151]
(c) If he fails to return the property or business
after demand of the owner EFFECT OF RATIFICATION
(d) If he assumed management in bad faith [Art. The ratification of the management by the owner of
2147] the business produces the effects of an express
(e) If he is manifestly unfit to carry on the agency, even if the business may not have been
management successful. [Art. 2149]
(f) If by his intervention he prevented a more
competent person from taking up the EXTINGUISHMENT OF MANAGEMENT
management. [Art. 2148] (1) When the owner repudiates or puts an end
thereto
Note: The gestor shall not be liable for “e” and “f” (2) When the gestor withdraws from the
if the management was assumed to save the management, subject to [Art. 2144]
property or business from imminent danger.
PAGE 298
(3) By the death, civil interdiction, insanity or (2) For the return of the price or assign the action to
insolvency of the owner or the gestor. [Art. 2153] collect the sum if he has alienated the same. [Art.
2160]
SOLUTIO INDEBITI (UNDUE PAYMENT)
This takes place when something is received when EXEMPTION FROM THE OBLIGATION TO RESTORE THE
there is no right to demand it, and it was unduly PAYMENT UNDULY MADE
delivered through mistake. The recipient has the A person who, believing in good faith that the
duty to return it [Art. 2154]. payment was being made of a legitimate and
subsisting claim,
This situation covers payment by reason of a mistake (1) destroyed the document, or
in the construction or application of a doubtful or (2) allowed the action to prescribe, or
difficult question of law [Art. 2155] (3) gave up the pledges, or
(4) cancelled the guaranties for his right shall be
WHEN DEBT NOT YET DUE exempt from the obligation to restore.
If the payer was in doubt whether the debt was due,
he may recover if he proves that it was not due. [Art. The person who paid unduly may proceed only
2156] against the true debtor or the guarantors with regard
to whom the action is still effective. [Art. 2162]
RESPONSIBILITY OF TWO OR MORE PAYEES
When there has been payment of what is not due, PRESUMPTION OF PAYMENT BY MISTAKE, DEFENSE
their responsibility is solidary. The presumption arises if something which had
never been due or had already been paid was
WHEN MONEY OR THING DELIVERED IS OWNED BY THIRD delivered; but he from whom the return is claimed
PERSON may prove that the delivery was made out of
The payee cannot demand that the payor prove his liberality or for any other just cause.
ownership of the thing delivered.
Nevertheless, should he discover that the thing has OTHER QUASI-CONTRACTS
been stolen and who its true owner is, he must (1) When, without the knowledge of the person
advise the latter. obliged to give support, it is given by a stranger,
the latter shall have a right to claim the same
If the owner, in spite of such information, does not from the former, unless it appears that he gave it
claim it within the period of one month, the payee out of piety and without intention of being repaid.
shall be relieved of all responsibility by returning the [Art. 2164]
thing deposited to the payor. (2) When funeral expenses are borne by a third
person, without the knowledge of those relatives
If the payee has reasonable grounds to believe that who were obliged to give support to the
the thing has not been lawfully acquired by the deceased, said relatives shall reimburse the third
payor, the former may return the same. [Art. 2158] person, should the latter claim reimbursement.
[Art. 2165]
LIABILITY OF PAYEE (3) When the person obliged to support an orphan,
If in bad faith, he shall be liable: or an insane or other indigent person unjustly
(1) For legal interest if a sum of money is involved, or refuses to give support to the latter, any third
(2) For the fruits received or which should have been person may furnish support to the needy
received if the thing produces fruits individual, with right of reimbursement from the
AND person obliged to give support. The provisions of
(3) For any loss or impairment of the thing for any this article apply when the father or mother of a
cause, and child under eighteen years of age unjustly refuses
(4) For damages to the person who delivered the to support him. [Art. 2166]
thing, until it is recovered. [Art. 2159] (4) When through an accident or other cause a
person is injured or becomes seriously ill, and he
If in good faith, he shall be liable: is treated or helped while he is not in a condition
(1) For the impairment or loss of the thing certain to give consent to a contract, he shall be liable to
and determinable or its accessories and pay for the services of the physician or other
accessions insofar as he has thereby been person aiding him, unless the service has been
benefited. rendered out of pure generosity. [Art. 2167]
(5) When during a fire, flood, storm, or other
calamity, property is saved from destruction by
PAGE 299
another person without the knowledge of the (2) Claims arising from misappropriation, breach of
owner, the latter is bound to pay the former just trust, or malfeasance by public officials
compensation. [Art. 2168] committed in the performance of their duties, on
(6) When the government, upon the failure of any the movables, money or securities obtained by
person to comply with health or safety them;
regulations concerning property, undertakes to
do the necessary work, even over his objection, he (3) Claims for the unpaid price of movables sold, on
shall be liable to pay the expenses. [Art. 2169] said movables, so long as they are in the
(7) When by accident or other fortuitous event, possession of the debtor, up to the value of the
movables separately pertaining to two or more same; and if the movable has been resold by the
persons are commingled or confused, the rules debtor and the price is still unpaid, the lien may
on co-ownership shall be applicable. [Art. 2170] be enforced on the price; this right is not lost by
(8) The rights and obligations of the finder of lost the immobilization of the thing by destination,
personal property shall be governed by Articles provided it has not lost its form, substance and
719 and 720. [Art. 2171] identity; neither is the right lost by the sale of the
(9) The right of every possessor in good faith to thing together with other property for a lump
reimbursement for necessary and useful sum, when the price thereof can be determined
expenses is governed by Article 546. [Art. 2172] proportionally;
(10) When a third person, without the knowledge of
the debtor, pays the debt, the rights of the former (4) Credits guaranteed with a pledge so long as the
are governed by Articles 1236 and 1237. [Art. 2173] things pledged are in the hands of the creditor, or
(11) When in a small community a nationality of the those guaranteed by a chattel mortgage, upon
inhabitants of age decide upon a measure for the things pledged or mortgaged, up to the value
protection against lawlessness, fire, flood, storm thereof;
or other calamity, any one who objects to the plan
and refuses to contribute to the expenses but is (5) Credits for the making, repair, safekeeping or
benefited by the project as executed shall be preservation of personal property, on the
liable to pay his share of said expenses. [Art. 2174] movable thus made, repaired, kept or possessed;
(12) Any person who is constrained to pay the taxes
of another shall be entitled to reimbursement (6) Claims for laborers' wages, on the goods
from the latter. [Art. 2175] manufactured or the work done;
(7) For expenses of salvage, upon the goods

salvaged;
Concurrence and Preference (8) Credits between the landlord and the tenant,
of Credits arising from the contract of tenancy on shares, on
the share of each in the fruits or harvest;
MEANING OF CONCURRENCE AND PREFERENCE
Concurrence of Credit implies possession by two or (9) Credits for transportation, upon the goods
more creditors of equal right or privileges over the carried, for the price of the contract and
same property or all of the property of a debtor. incidental expenses, until their delivery and for
thirty days thereafter;
Preference of Credit is the right held by a creditor to
be preferred in the payment of his claim above (10) Credits for lodging and supplies usually
others out of the debtor’s assets. furnished to travelers by hotel keepers, on the
movables belonging to the guest as long as such
PREFERRED CREDITS ON SPECIFIC MOVABLES movables are in the hotel, but not for money
[ART. 2241] loaned to the guests;
With reference to specific movable property of the
debtor, the following claims or liens shall be (11) Credits for seeds and expenses for cultivation and
preferred: harvest advanced to the debtor, upon the fruits
harvested;
(1) Duties, taxes and fees due thereon to the State or
any subdivision thereof; (12) Credits for rent for one year, upon the personal
property of the lessee existing on the immovable
PAGE 300
leased and on the fruits of the same, but not on (9) Claims of donors or real property for pecuniary
money or instruments of credit; charges or other conditions imposed upon the
donee, upon the immovable donated;
(13) Claims in favor of the depositor if the depositary
has wrongfully sold the thing deposited, upon the (10) Credits of insurers, upon the property insured,
price of the sale. for the insurance premium for two years.
In the foregoing cases, if the movables to which the PREFERRED CREDITS ON OTHER PROPERTY,
lien or preference attaches have been wrongfully REAL AND PERSONAL [ART. 2244]
taken, the creditor may demand them from any With reference to other property, real and personal,
possessor, within thirty days from the unlawful of the debtor, the following claims or credits shall be
seizure. preferred in the order named:
PREFERRED CREDITS ON SPECIFIC i. Proper funeral expenses for the debtor, or

IMMOVABLES AND REAL RIGHTS [ART. 2242] children under his or her parental authority who
With reference to specific immovable property and have no property of their own, when approved by
real rights of the debtor, the following claims, the court;
mortgages and liens shall be preferred, and shall
constitute an encumbrance on the immovable or real ii. Credits for services rendered the insolvent by
right: employees, laborers, or household helpers for one
year preceding the commencement of the
(1) Taxes due upon the land or building; proceedings in insolvency;
(2) For the unpaid price of real property sold, upon iii. Expenses during the last illness of the debtor or
the immovable sold; of his or her spouse and children under his or her
parental authority, if they have no property of
(3) Claims of laborers, masons, mechanics and other their own;
workmen, as well as of architects, engineers and
contractors, engaged in the construction, iv. Compensation due the laborers or their
reconstruction or repair of buildings, canals or dependents under laws providing for indemnity
other works, upon said buildings, canals or other for damages in cases of labor accident, or illness
works; resulting from the nature of the employment;
(4) Claims of furnishers of materials used in the v. Credits and advancements made to the debtor
construction, reconstruction, or repair of for support of himself or herself, and family,
buildings, canals or other works, upon said during the last year preceding the insolvency;
buildings, canals or other works;
vi. Support during the insolvency proceedings, and
(5) Mortgage credits recorded in the Registry of for three months thereafter;
Property, upon the real estate mortgaged;
vii. Fines and civil indemnification arising from a
(6) Expenses for the preservation or improvement of criminal offense;
real property when the law authorizes
reimbursement, upon the immovable preserved viii. Legal expenses, and expenses incurred in the
or improved; administration of the insolvent's estate for the
common interest of the creditors, when properly
(7) Credits annotated in the Registry of Property, in authorized and approved by the court;
virtue of a judicial order, by attachments or
executions, upon the property affected, and only ix. Taxes and assessments due the national
as to later credits; government, other than those mentioned in
Articles 2241, No. 1, and 2242, No. 1;
(8) Claims of co-heirs for warranty in the partition of
an immovable among them, upon the real x. Taxes and assessments due any province, other
property thus divided; than those referred to in Articles 2241, No. 1, and
2242, No. 1;
PAGE 301
xi. Taxes and assessments due any city or thereof [Art. 2247]
municipality, other than those indicated in Articles (3) Those credits which enjoy preference in relation
2241, No. 1, and 2242, No. 1; to specific real property or real rights exclude all
others to the extent of the value of the
xii. Damages for death or personal injuries caused by immovable or real right to which the preference
a quasi-delict; refers [Art. 2248].
(4) If there are 2 or more credits with respect to the
xiii. Gifts due to public and private institutions of same specific real property or real rights, they shall
charity or beneficence; be satisfied pro rata, after the payment of the
taxes and assessment of the taxes and
xiv. Credits which, without special privilege, appear in assessments upon the immovable property or
(a) a public instrument; or (b) in a final judgment, real right [Art. 2249].
if they have been the subject of litigation. These (5) The excess, if any, after the payment of the
credits shall have preference among themselves credits which enjoy preference with respect to
in the order of priority of the dates of the specific property, real or personal, shall be
instruments and of the judgments, respectively. added to the free property which the debtor may
have, for the payment of other credits [Art.
EXEMPT PROPERTY 2250].
(1) Present property: (6) Those credits which do not enjoy any preference
(a) Family home. [Arts. 152, 153 and 155, CC] with respect to specific property, and those
(b) Right to receive support, as well as money or which enjoy preference, as to the amount not
property obtained by such support, shall not paid, shall be satisfied according to the
be levied upon on attachment or execution. following rules:
[Art. 205, CC] (a) Order established by Art 2244
(c) Sec. 13, Rule 39, ROC. (b) Common credits referred to in Art 2245 shall
(d) Sec 118, Public Land Act. [CA 141, as be paid pro rata regardless of dates [Art.
amended] 2251].
(2) Future property:
A debtor who obtains a discharge from his debts
on account of insolvency, is not liable for the
unsatisfied claims of his creditors with said
property. [Sec. 68 and 69, Insolvency Law, Act
1956]
(3) Property in custodia legis and of public dominion.
CLASSIFICATION OF CREDITS
(1) Special preferred credits. [Art. 2241 and 2242, CC]
(a) Considered as mortgages or pledges of real or
personal property or liens within the purview
of legal provisions governing insolvency.
(b) Taxes due to the State shall first be satisfied.
(2) Ordinary preferred credits [Art. 2244] – Preferred
in the order given by law.
(3) Common credits [Art. 2245] – Credits of any other
kind or class, or by any other right or title not
comprised in Arts. 2241- 2244 shall enjoy no
preference.
ORDER OF PREFERENCE OF CREDITS

(1) Credits which enjoy preference with respect to
specific movables exclude all others to the extent
of the value of the personal property to which the
preference refers [Art. 2246].
(2) If there are 2 or more credits with respect to the
same specific movable property, they shall be
satisfied pro rata, after the payment of duties,
taxes and fees due the State or any subdivision
PAGE 302
UP COLLEGE OF LAW LAND TITLES & DEEDS BAR OPERATIONS COMMISSION
PAGE 303
Torrens System with the delay, uncertainty, and expense of the old
conveyancing system.
THE TORRENS SYSTEM: By "Torrens" system generally are meant those
A system for registration of land under which, upon systems of registration of transactions with interest
landowner’s application, the court may, after in land whose declared object… is, under
appropriate proceedings, direct the issuance of a governmental authority, to establish and certify to
certificate of title. (Black’s Law Dictionary) the ownership of an absolute and indefeasible title to
realty, and to simplify its transfer. (Grey-Alba v. Dela
The underlying principle of the Torrens system is Cruz, GR No. L-524)
security with facility in dealing with land. This is
made possible by defining the absolute status of a CERTIFICATE OF TITLE
given property in a certificate of title with a
governmental and universal guaranty. This ORIGINAL CERTIFICATE OF TITLE OR OCT
certificate of title should better be known as It is the first certificate of title issued in the name of a
certificate of title and encumbrances. In the words of registered owner by the Register of Deeds covering a
torrens himself the main objects are “to simplify, parcel of land which had been registered under the
quicken, and cheapen the transfer of real estate and Torrens System, by virtue of judicial or administrative
to render title safe and indefeasible.” (The Philippine proceedings.
Torrens System by Florencio Ponce 1964)
TRANSFER CERTIFICATE OF TITLE OR TCT
PURPOSE: The subsequent certificate of title pursuant to any
The real purpose of that system is to quiet title to deed of transfer or conveyance to another person.
land; to put a stop forever to any question of the The Register of Deeds shall make a new certificate of
legality of the title, except claims which were noted title and given him an owner’s duplicate certificate.
at the time of registration, in the certificate, or which The previous certificate (need not be an OCT) shall
may arise subsequent thereto. (Legarda v Saleeby, be stamped “cancelled”.
GR No. 8936)
Avoid possible conflicts of title in and to real property PATENTS
ADVANTAGES:
PD 1529, Sec. 103. Certificates of title pursuant to
(a) Secures title patents. Whenever public land is by the Government
(b) Protection against fraud alienated, granted or conveyed to any person, the
(c) Simplified dealings same shall be brought forthwith under the operation
(d) Restoration of the estates to its just value, whose of this Decree.
depreciation is cause by some blur, technical
defect It shall be the duty of the official issuing the
(e) Barred the recurrence of faults in the title (See instrument of alienation, grant, patent or conveyance
Legarda v. Saleeby) in behalf of the Government to cause such
instrument to be filed with the Register of Deeds of
BACKGROUND:
the province or city where the land lies, and to be
The boldest effort to grapple with the problem of there registered like other deeds and conveyance,
simplification of title to land was made by Mr. whereupon a certificate of title shall be entered as in
(afterwards Sir Robert) Torrens, a layman, in South other cases of registered land, and an owner's
Australia in 1857. . . . In the Torrens system title by duplicate issued to the grantee.
registration takes the place of "title by deeds" of the
system under the "general" law. A sale of land, for The deed, grant, patent or instrument of conveyance
example, is effected by a registered transfer, upon from the Government to the grantee shall not take
which a certificate of title is issued. The certificate is effect as a conveyance or bind the land but shall
guaranteed by statute, and, with certain exceptions, operate only as a contract between the Government
constitutes indefeasible title to the land mentioned and the grantee and as evidence of authority to the
therein. Under the old system the same sale would Register of Deeds to make registration.
be effected by a conveyance, depending for its
validity, apart from intrinsic flaws, on the correctness It is the act of registration that shall be the operative
of a long series of prior deeds, wills, etc. . . . The act to affect and convey the land, and in all cases
object of the Torrens system, them, is to do away under this Decree, registration shall be made in the
office of the Register of Deeds of the province or city
where the land lies. The fees for registration shall be
PAGE 304
paid by the grantee. After due registration and been held prior the Spanish conquest and never to
issuance of the certificate of title, such land shall be have been public land.
deemed to be registered land to all intents and
purposes under this Decree. EFFECTS
All lands of public domain belong to the state, and
Note: that the State is the source of any asserted right to
(a) Patents only involve public lands which are ownership in land and charged with the conservation
alienated by the Government, pursuant to the of such patrimony (Republic v IAC, GR No. 71285)
Public Land Act.
(b) The patent (even if denominated as deed of Any applicant for judicial confirmation of an
conveyance) is not really a conveyance but a imperfect title has the burden of proving, by
contract between the grantee and the incontrovertible evidence, that the (a) land applied
Government and evidence of authority to the for is alienable and disposable public land; and, (b)
Register of Deeds to make registration. the applicant, by himself or through his
(c) The act of registration is the operative act to affect predecessors-in-interest had occupied and
and convey the land. possessed the land, in the concept of owner, openly,
continuously, exclusively, and adversely since June
General Rule: A Torrens Certificate of Title is valid 12, 1945, or earlier. (Pelbel Manufacturing Corp. v. CA,
and enforceable against the whole world. GR No. 141325)
A Torrens title, once registered, cannot be defeated, CONCEPT OF NATIVE TITLE, TIME IMMEMORIAL
even by adverse, open and notorious possession. A POSSESSION
registered title under the Torrens system cannot be A recognized exception to the theory of jura regalia,
defeated by prescription. The title, once registered, the ruling in Carino v Insular Government
is notice to the whole world. All persons must take institutionalized the recognition of the existence of
notice. No one can plead ignorance of the native title to land, or ownership of land by Filipinos
registration. (Egao vs. CA, 1989) by virtue of possession under a claim of ownership
since time immemorial and independent of any grant
from the Spanish Crown (Agcaoli)
Regalian Doctrine Lands under native title are not part of public
domain, “lands possessed by an occupant and his
predecessors since time immemorial, such
A western legal concept that was first introduced by possession would justify the presumption that the
the Spaniards into the country through the laws of land had never been part of the public domain or
the Indies and the Royal Cedulas. Whereby the that it had been private property even before the
Philippines passed to Spain by virtue of “discovery” Spanish conquest (Republic v CA, GR No. 130174)
and conquest. Consequently, all lands became the
exclusive patrimony and dominion of the Spanish
Crown. (Agcaoli)
Enshrined in the Constitution (Art 12, Sec 2 & 3), it

states that all lands of public domain belong to the
Citizenship Doctrine
state, thus private title to land must be traced to INDIVIDUALS AND CORPORATIONS
some grant, express or implied, from the state, i.e.
The Spanish Crown or its successors, the American
CONSTITUTIONAL REQUIREMENTS AND LIMITATIONS
Colonial government and thereafter the Philippine
Only Filipino citizens (Art. XII, Sec. 3, 1987
Republic
Constitution)
It does not negate native title to lands held in private
KRIVENKO DOCTRINE
ownership since time immemorial (Cruz vs. Sec. of
The capacity to acquire private land is made
Environment and Natural Resources)
dependent upon the capacity to acquire or hold
lands of public domain. Private land may be
It recognized ownership of land by Filipinos
transferred or conveyed only to individuals or entities
independent of any grant from the Spanish crown on
‘qualified to acquire lands of public domain’ (II
the basis of possession since time immemorial (cf:
Bernas)
Carino v Insular Government), it is presumed to have
PAGE 305
The 1935 Constitution reserved the right xxx for Where the land is Owned in common, all the
Filipino citizens or corporations at least sixty percent co-owners shall file the application jointly.
of the capital of which was owned by Filipinos.
Aliens, whether individuals or corporations, have Where the land has been sold under Pacto de
been disqualified from acquiring public lands; hence retro, the vendor a retro may file an
they have also been disqualified from acquiring application for the original registration of the
private lands. (Krivenko v ROD, GR No. L-630: Ong land, provided, however, that should the
Ching Po v CA, GR. No. 113427) period for redemption expire during the
pendency of the registration proceedings and
Non-Filipinos cannot acquire or hold title to private ownership to the property consolidated in the
lands of public domain, except only by way of legal vendee a retro, the latter shall be substituted
succession (Halili v CA, GR No. 113539); BASIS Sec 2, for the applicant and may continue the
5 Art XII Constitution proceedings.
Exceptions: A trustee on behalf of his principal may apply

(a) Aliens by way of hereditary succession for original registration of any land held in
(b) Natural born citizens who have lost their trust by him, unless prohibited by the
citizenship- limited to 5,000 sq. m. for urban instrument creating the trust. (PD 1529, Sec.
land and 3 hectares for rural land (RA No. 7042 14)
as amended by RA No. 8179)
A corporation sole may acquire and register private
Aliens, although disqualified to acquire lands of agricultural land (RC Apostolic Administrator of
public domain, may lease private land for a Davao v LRC GR No. L-8415): A corporation sole,
reasonable period provided, that such lease does not which consists of one person only, is vested with the
amount to a virtual transfer of ownership. They may right to purchase and hold real estate and register
also be given an option to buy property on the the same in trust for the faithful or members of the
condition that he is granted Philippine citizenship. religious society or church for which the corporation
(Llantino v Co liong Chong, GR No. 29663) was organized
Private corporations may not hold alienable lands of Lands acquired by an American citizen prior the
the public domain except by lease for a period not proclamation of Philippine Independence on July 4,
exceeding twenty-five years, renewable for not more 1946 but after the passage of the 1935 Constitution
than twenty-five years, and not to exceed one may be registered, based on the ordinance
thousand hectares in area. (1987 Constitution, Art. XII, appended to the 1935 Constitution (See: Moss v
Sec. 3) Director of Lands, GR No. L-27170)
Private lands may be owned for as long as the Land sold to an alien which is now in the hands of a
corporation is at least 60% Filipino: naturalized citizen can no longer be annulled (De
(a) Provided that at the time the corporation Castro v Tan, GR No. L-31956). The litigated property
acquired the land, it is under private ownership. is now in the hands of a naturalized Filipino. It is no
(b) Additional Requirements: (OCEN-PAAL) longer owned by a disqualified vendee. The purpose
(1) Those who by themselves or through their of the prohibition ceases to be applicable. (Barsobia v
predecessors-in-interest have been in Open, Cuenco, GR No. L-33048)
continuous, exclusive and notorious
possession and occupation of alienable and
disposable lands of the public domain under a
bona fide claim of ownership since June 12,
1945, or earlier.
Original Registration
(2) Those who have acquired ownership of private
WHO MAY APPLY
lands by Prescription under the provision of
existing laws.
(3) Those who have acquired ownership of private under pd 1529
lands or abandoned river beds by right of The following persons may file an application for
Accession or accretion under the existing laws. registration of title to land:
(4) Those who have acquired ownership of land in
any other manner provided for by Law. (1) Those who by themselves or through their
predecessors-in-interest have been in open,
PAGE 306
continuous, exclusive and notorious possession slope of eighteen percent (18%) or more, are hereby
and occupation of alienable and disposable lands classified as alienable and disposable agricultural
of the public domain under a bona fide claim of lands.
ownership since June 12, 1945, or earlier.
The option granted under this Section shall be
(2) Those who have acquired ownership of private exercised within twenty (20) years from the approval
lands by prescription under the provision of of this Act.
existing laws.
Sec. 51. Delineation and Recognition of Ancestral
(3) Those who have acquired ownership of private Domains. Self-delineation shall be the guiding
lands or abandoned river beds by right of principle in the identification and delineation of
accession or accretion under the existing laws. ancestral domains. As such, the ICCs/IPs concerned
shall have a decisive role in all the activities pertinent
(4) Those who have acquired ownership of land in thereto. The Sworn Statement of the Elders as to the
any other manner provided for by law. Scope of the territories and agreements/pacts made
with neighboring ICCs/IPs, if any, will be essential to
UNDER CA 141
the determination of these traditional territories. The
Sec. 12. Any citizen of the Philippines over the age of Government shall take the necessary steps to
eighteen years, or the head of a family, who does not identify lands which the ICCs/IPs concerned
own more than twenty-four hectares of land in the traditionally occupy and guarantee effective
Philippines or has not had the benefit of any protection of their rights of ownership and
gratuitous allotment of more than twenty-four possession thereto. Measures shall be taken in
hectares of land since the occupation of the appropriate cases to safeguard the rights of the
Philippines by the United States, may enter a ICCs/IPs concerned to land which may no longer be
homestead of not exceeding twenty-four hectares of exclusively occupied by them, but to which they have
agricultural land of the public domain. traditionally had access for their subsistence and
traditional activities, particularly of ICCs/IPs who are
UNDER RA 8371 still nomadic and/or shifting cultivators.
Sec. 11. Recognition of Ancestral Domain Rights. The
rights of ICCs/IPs to their ancestral domains by Sec. 52. Delineation Process.- The identification and
virtue of Native Title shall be recognized and delineation of ancestral domains shall be done in
respected. Formal recognition, when solicited by accordance with the following procedures:
ICCs/IPs concerned, shall be embodied in a (a) Ancestral Domains Delineated Prior to this Act -
Certificate of Ancestral Domain Title (CADT), which The provisions hereunder shall not apply to
shall recognize the title of the concerned ICCs/IPs ancestral domains/lands already delineated
over the territories identified and delineated. according to DENR Administrative Order No. 2,
series of 1993, nor to ancestral lands and
Sec. 12. Option to Secure Certificate of Title under domains delineated under any other
Commonwealth Act 141, as amended, or the Land community/ancestral domain program prior to
Registration Act 496. Individual members of cultural the enactment of his law. ICCs/IPs enactment of
communities, with respect to individually-owned this law shall have the right to apply for the
ancestral lands who, by themselves or through their issuance of a Certificate of Ancestral Domain
predecessors-in -interest, have been in continuous Title (CADT) over the area without going
possession and occupation of the same in the through the process outlined hereunder;
concept of owner since time immemorial or for a (b) Petition for Delineation - The process of
period of not less than thirty (30) years immediately delineating a specific perimeter may be initiated
preceding the approval of this Act and uncontested by the NCIP with the consent of the ICC/IP
by the members of the same ICCs/IPs shall have the concerned, or through a Petition for Delineation
option to secure title to their ancestral lands under filed with the NCIP, by a majority of the
the provisions of Commonwealth Act 141, as members of the ICCs/IPs;
amended, or the Land Registration Act 496. (c) Delineation Paper - The official delineation of
ancestral domain boundaries including census
For this purpose, said individually-owned ancestral of all community members therein, shall be
lands, which are agricultural in character and immediately undertaken by the Ancestral
actually used for agricultural, residential, pasture, Domains Office upon filing of the application by
and tree farming purposes, including those with a the ICCs/IPs concerned. Delineation will be
PAGE 307
done in coordination with the community publication: Provided, That in areas where no
concerned and shall at all times include genuine such newspaper exists, broadcasting in a radio
involvement and participation by the members station will be a valid substitute: Provided,
of the communities concerned; further, That mere posting shall be deemed
(d) Proof required - Proof of Ancestral Domain sufficient if both newspaper and radio station
Claims shall include the testimony of elders or are not available;
community under oath, and other documents (h) Endorsement to NCIP - Within fifteen (15) days
directly or indirectly attesting to the possession from publication, and of the inspection process,
or occupation of the area since time immemorial the Ancestral Domains Office shall prepare a
by such ICCs/IPs in the concept of owners which report to the NCIP endorsing a favorable action
shall be any one (1) of the following authentic upon a claim that is deemed to have sufficient
documents: proof. However, if the proof is deemed
(1) Written accounts of the ICCs/IPs customs insufficient, the Ancestral Domains Office shall
and traditions; require the submission of additional evidence:
(2) Written accounts of the ICCs/IPs political Provided, That the Ancestral Domains Office
structure and institution; shall reject any claim that is deemed patently
(3) Pictures showing long term occupation such false or fraudulent after inspection and
as those of old improvements, burial verification: Provided, further, That in case of
grounds, sacred places and old villages; rejection, the Ancestral Domains Office shall
(4) Historical accounts, including pacts and give the applicant due notice, copy furnished all
agreements concerning boundaries entered concerned, containing the grounds for denial.
into by the ICCs/IPs concerned with other The denial shall be appealable to the NCIP:
ICCs/IPs; Provided, furthermore, That in cases where there
(5) Survey plans and sketch maps; are conflicting claims, the Ancestral Domains
(6) Anthropological data; Office shall cause the contending parties to
(7) Genealogical surveys; meet and assist them in coming up with a
(8) Pictures and descriptive histories of preliminary resolution of the conflict, without
traditional communal forests and hunting prejudice to its full adjudication according to the
grounds; selection below.
(9) Pictures and descriptive histories of (i) Turnover of Areas Within Ancestral Domains
traditional landmarks such as mountains, Managed by Other Government Agencies - The
rivers, creeks, ridges, hills, terraces and the Chairperson of the NCIP shall certify that the
like; and area covered is an ancestral domain. The
(10) Write-ups of names and places derived from secretaries of the Department of Agrarian
the native dialect of the community. Reform, Department of Environment and
(e) Preparation of Maps - On the basis of such Natural Resources, Department of the Interior
investigation and the findings of fact based and Local Government, and Department of
thereon, the Ancestral Domains Office of the Justice, the Commissioner of the National
NCIP shall prepare a perimeter map, complete Development Corporation, and any other
with technical descriptions, and a description of government agency claiming jurisdiction over
the natural features and landmarks embraced the area shall be notified thereof. Such
therein; notification shall terminate any legal basis for
(f) Report of Investigation and Other Documents - A the jurisdiction previously claimed;
complete copy of the preliminary census and a (j) Issuance of CADT - ICCs/IPs whose ancestral
report of investigation, shall be prepared by the domains have been officially delineated and
Ancestral Domains Office of the NCIP; determined by the NCIP shall be issued a CADT
(g) Notice and Publication - A copy of each in the name of the community concerned,
document, including a translation in the native containing a list of all those identified in the
language of the ICCs/IPs concerned shall be census; and
posted in a prominent place therein for at least (k) Registration of CADTs - The NCIP shall register
fifteen (15) days. A copy of the document shall issued certificates of ancestral domain titles and
also be posted at the local, provincial and certificates of ancestral lands titles before the
regional offices of the NCIP, and shall be Register of Deeds in the place where the
published in a newspaper of general circulation property is situated.
once a week for two (2) consecutive weeks to
allow other claimants to file opposition thereto Sec. 53. Identification, Delineation and Certification of
within fifteen (15) days from the date of such
Ancestral Lands.
PAGE 308
(a) The allocation of lands within any ancestral meritorious, shall cause a parcellary survey of the
domain to individual or indigenous corporate area being claimed. The Ancestral Domains office
(family or clan) claimants shall be left to the shall reject any claim that is deemed patently
ICCs/IPs concerned to decide in accordance with false or fraudulent after inspection and
customs and traditions; verification. In case of rejection, the Ancestral
Domains office shall give the applicant due
(b) Individual and indigenous corporate claimants of notice, copy furnished all concerned, containing
ancestral lands which are not within ancestral the grounds for denial. The denial shall be
domains, may have their claims officially appealable to the NCIP. In case of conflicting
established by filing applications for the claims among individual or indigenous corporate
identification and delineation of their claims with claimants, the Ancestral domains Office shall
the Ancestral Domains Office. An individual or cause the contending parties to meet and assist
recognized head of a family or clan may file such them in coming up with a preliminary resolution
application in his behalf or in behalf of his family of the conflict, without prejudice to its full
or clan, respectively; adjudication according to Sec. 62 of this Act. In
all proceedings for the identification or
(c) Proofs of such claims shall accompany the delineation of the ancestral domains as herein
application form which shall include the provided, the Director of Lands shall represent
testimony under oath of elders of the community the interest of the Republic of the Philippines;
and other documents directly or indirectly and
attesting to the possession or occupation of the
areas since time immemorial by the individual or (g) The Ancestral Domains Office shall prepare and
corporate claimants in the concept of owners submit a report on each and every application
which shall be any of the authentic documents surveyed and delineated to the NCIP, which shall,
enumerated under Sec. 52 (d) of this act, in turn, evaluate or corporate (family or clan)
including tax declarations and proofs of payment claimant over ancestral lands.
of taxes;
Sec. 54. Fraudulent Claims.- The Ancestral Domains
(d) The Ancestral Domains Office may require from Office may, upon written request from the ICCs/IPs,
each ancestral claimant the submission of such review existing claims which have been fraudulently
other documents, Sworn Statements and the like, acquired by any person or community. Any claim
which in its opinion, may shed light on the found to be fraudulently acquired by, and issued to,
veracity of the contents of the application/claim; any person or community may be cancelled by the
NCIP after due notice and hearing of all parties
(e) Upon receipt of the applications for delineation concerned.
and recognition of ancestral land claims, the
Ancestral Domains Office shall cause the
publication of the application and a copy of each Sec. 55. Communal Rights.- Subject to Section 56
document submitted including a translation in hereof, areas within the ancestral domains, whether
the native language of the ICCs/IPs concerned in delineated or not, shall be presumed to be
a prominent place therein for at least fifteen (15) communally held: Provide, That communal rights
days. A copy of the document shall also be under this Act shall not be construed as co-
posted at the local, provincial, and regional ownership as provided in Republic Act. No. 386,
offices of the NCIP and shall be published in a otherwise known as the New Civil Code.
newspaper of general circulation once a week for
two (2) consecutive weeks to allow other REGISTRATION PROCESS AND REQUIREMENTS
claimants to file opposition thereto within fifteen (1) Survey
(15) days from the date of such publication: (2) Application
Provided, That in areas where no such newspaper (3) Initial Hearing
exists, broadcasting in a radio station will be a (4) Publication
valid substitute: Provided, further, That mere (5) Opposition
posting shall be deemed sufficient if both (6) Hearing
newspapers and radio station are not available. (7) Judgment
(8) Issuance of Decree
(f) Fifteen (15) days after such publication, the
Ancestral Domains Office shall investigate and WHAT LANDS ARE REGISTRABLE:
inspect each application, and if found to be (a) Private Lands
PAGE 309
(b) Agricultural Lands factual proof of possession are unavailing. The

deeds in its favor only proved possession of its
If in the public domain, the land must be classified as predecessors-in-interest as early as 1948. (The
alienable and disposable. It must be classified as such law now stands that a mere showing of
at the time of filing the application for registration. possession for 30 years is not sufficient. OCEN
(Republic vs. CA and Naguit, 2005) possession must be shown to have stated on June
12, 1945 or earlier.)
SURVEY
The survey may be done by a public or private INITIAL HEARING
surveyor. When done by a private surveyor it has to The court shall issue an order setting the date and
be approved by the Land Management Bureau. PD hour of the initial hearing within five days from filing
239 withdrew the authority of the Land Registration of the application. The initial hearing shall be 45-90
Authority to approve original survey plans. days from the date of the order. (Sec. 23, PD 1529)
APPLICATION PUBLICATION
The application for land registration shall be: The public shall be given notice of the initial hearing
(a) in writing of the application for land registration by means of
(b) signed and sworn to by the applicant/duly (1) publication; (2) mailing; and (3) posting. (PD 1529,
authorized person, and if more than one Sec. 23)
applicant, it shall be signed and sworn to by and
in behalf of each By publication
The Commissioner of Land Registration shall cause
It shall contain: it to be published: once in the Official Gazette
(a) a description of the land (sufficient to confer jurisdiction) and once in a
(b) citizenship and civil status of the applicant newspaper of general circulation in the Philippines
(c) if married, the name of the wife or husband
(d) if the marriage has been legally dissolved, when and The notice is addressed to:
how (a) all persons appearing to have an interest in the
(e) full names and addresses of all occupants and land the adjoining owners so far as known "to all
those of the adjoining owners, if known whom it may concern"
(f) if not known, it shall state the extent of the search
made to find them. (Sec. 15, PD 1529) By mailing
Within 7 days from publication in the OG, the
Note: It must be accompanied by the original tracing Commissioner of Land Registration (CLR) shall mail a
cloth plan, white or blue copies thereof, the original copy of the notice to:
and copies of the technical description and geodetic (a) Every person named in the notice whose address
engineer’s certification. is known.
(b) the Secretary of Public Highways, to the
Special Cases: Provincial Governor, and to the Mayor of the
(a) If the land bounded by a road, the applicant must municipality or city, in which the land lies, if the
state in his application if he claims any portion of applicant requests to have the line of a public
the land within the limits of the road, or if he likes way or road determined
to have the boundaries determined. (Sec. 20, PD (c) Secretary of Agrarian Reform, the Solicitor
1529) General, the Director of Lands, the Director of
(b) If the applicant is a non-resident, he shall appoint Mines and/or the Director of Fisheries and
an agent or representative who is a Philippine Aquatic Resources, (as appropriate) if the land
resident. (Sec. 16, PD 1529) borders on a river, navigable stream or shore, or
(c) Intestate Estate of Don Mariano San Pedro vs. CA on an arm of the sea where a river or harbor line
(1996): A person claiming ownership of real has been established, or on a lake, or if it
property must clearly identify the land claimed by otherwise appears from the application or the
him. proceedings that a tenant-farmer or the national
(d) In re: Application for Land Registration vs. Republic government may have a claim adverse to that of
(2008, Nachura): An applicant in a land the applicant
registration case must prove the facts and
circumstances evidencing the alleged ownership By posting
of the land applied for. General statements CLR shall cause the sheriff or his deputy to post the
which are mere conclusions of law and not notice at least 14 days before the hearing: in a
PAGE 310
conspicuous place on each parcel of land included in Forms of Judgment

the application and in a conspicuous place on the Writ of possession
bulletin board of the municipal building of the Vencilao vs. Vano, (1990): The writ may be issued not
municipality or city in which the land or portion only against the person defeated in the registration
thereof is situated. case but also against any one adversely occupying
the land during the proceedings.
The court may also cause notice to be served to such
other persons and in such manner as it may deem Bernas vs. Nuevo, (1984): The writ does not lie against
proper. a person who entered the land after the issuance of
the decree and who was not a party in the case. He
OPPOSITION can only be proceeded against in a separate action
Who may file? Any person claiming an interest, for ejectment or reinvindicatory action.
whether named in the notice or not
Writ of demolition
When to file? On or before the date of initial hearing, Gawaran vs. IAC, (1988): This writ is a complement of
or within such further time as may be allowed by the the writ of possession.
court.
ISSUANCE OF DECREE
Preparation of the Decree
What shall it contain? It shall state all the objections
(1) Court directs the Land Registration Authority to
and the interest claimed by the party the remedy
issue a decree of registration and certificate of
desired.
Title within 15 days from entry of judgment.
(a) Appeal reckoned from the Solicitor General’s
How shall it be made? It shall be signed and sworn to
receipt of the decision
by him or by some other duly authorized person.
(b) Becomes final 15 days from receipt
(2) Commissioner signs the decree
Note:
(3) Decree is entered and filed with the LRC
(a) If no one appears/files an answer, upon motion,
(4) OCT and owner’s duplicate certificate are sent to
the court shall order a default to be recorded.
the Register of Deeds where property is situated.
(b) By the description in the notice "To all Whom It
(5) Register of Deeds enters the information in his
May Concern", all the world are made parties
registration book.
defendant and shall be concluded by the default
(6) Register of Deeds sends notice by mail to owner
order.
that his duplicate is ready for delivery upon
(c) Where an appearance has been entered and an
payment of legal fees.
answer filed, a default order shall be entered
against persons who did not appear and answer.
Gomez vs. CA (1988): Court retains jurisdiction over
(d) Director of Lands vs. Agustin, (1921): Absence of
the case until after the expiration of 1 year from the
opposition does not justify outright registration.
issuance of the decree of registration.
HEARING
REMEDIES
Proof of ownership
GROUND FOR REOPENING AND REVIEWING THE DECREE
Municipality of Santiago vs. CA (1983): Tax
OF REGISTRATION: actual fraud
declaration and receipts are not conclusive but have
strong probative value when accompanied by proof
PERIODS:
of actual possession.
Must be reopened not later than 1 year from and
after the date of the entry of such decree.
Republic vs. Tayag (1984): Payment in one lump sum
Upon the expiration of said period of one year, the
to cover all past taxes is “irregular” and affects the
decree of registration and the certificate of title
validity of the applicant’s claim of ownership
issued shall become incontrovertible. The only
remedy left is an action for damages.
Spanish titles are no longer admissible.
PROHIBITIONS:
JUDGMENT
(a) Cannot be reopened because of absence,
Judgment becomes final upon expiration of 30 days
minority, or other disability of any person
from receipt of notice of judgment
adversely affected thereby
(b) Cannot be reopened where an innocent
purchaser for value may be prejudiced (includes
PAGE 311
an innocent lessee, mortgagee, or other not among the grounds for forcible entry and
encumbrancer for value.) unlawful detainer, or when possession has been lost
for more than one year and can no longer be
Arguelles vs. Timbancaya (1976): The rule on the maintained under Rule 70 of the Rules of Court.
incontrovertible nature of a certificate of title applies
when what is involved is the validity of the OCT, not The objective of the plaintiffs in accion publiciana is
when it concerns that of the TCT. to recover possession only, not ownership. The
Velascos were able to establish lawful possession of
IMPRESCRIPTIBLE the land when the Padillas occupied the property.
PD 1529, Sec 47. Registered land not subject to The OCT was issued to the original owners who then
prescriptions. No title to registered land in derogation sold the land to Artemio.
of the title of the registered owner shall be acquired
by prescription or adverse possession. From then on, he was in continuous possession of
the land until his death. It was only in 1987, when
the Padillas occupied the property. The argument
Barcelona vs. Barcelona (1956): Prescription is
that the lots are one and the same is a collateral attack
unavailing not only against the registered owner but
on the title over the property which is registered in the
also against his hereditary successors because the
name of Artemio, which cannot be countenanced.
latter merely step into the shoes of the decedent by
operation of law and are merely the continuation of
the personality of their predecessor-in-interest. Remedies of the Aggrieved Party
Motion for New 15 days from notice of judgment
NOT SUBJECT TO COLLATERAL ATTACK Trial
Grounds:
PD 1529, Sec 48. Certificate not subject to collateral
(a) Fraud, accident, mistake,
attack. A certificate of title shall not be subject to
excusable negligence
collateral attack. It cannot be altered, modified, or
(b) Newly discovered evidence
canceled except in a direct proceeding in accordance
(c) Awarded excessive
with law.
damages, or insufficiency of
evidence, or that the
Spouses Padilla vs. Velasco, et. al, G.R. No. 169956 decision is against law
(2009, Nachura) Appeal (d) 15 days from notice
Facts: Velasco et al (respondents) are the heirs of (e) appealable to the CA or to
Artemio who died, leaving a parcel of land. He the SC in the same manner
acquired it by virtue of a deed of sale in his favor. as in ordinary actions
The Padilla sps (petitioners) entered the land as Relief from (f) 60 days after petitioner
trustees by virtue of a deed of sale executed by a Judgment learns of judgment, but not
bank in favor of the Solomon sps. Velascos more than 6 months after
demanded that the Padillas vacate the property. judgment was entered
(g) Grounds: Fraud, accident,
Padillas cut trees, built a house and harvested crops. mistake, excusable
Velascos filed a complaint for accion publiciana negligence
before the RTC. Velascos presented deed of sale in Petition for Requisites: (Walstrom vs. Mapa,
favor of Artemio, while Padillas presented deed of Review 1990)
sale between bank and Solomons. (h) petitioner must have an
estate or interest in the land
The Padillas also argue that the Solomon sps (i) he must show actual fraud
acquired the land in good faith and for value and (j) petition must be filed within
that they argue that Lot 2161 (the one they are one year form the issuance
occupying) and Lot 76-pt (the lot the Solomon of the decree by LRA
spouses bought) are one and the same. (k) property has not yet passed
to an innocent purchaser for
Held: The Velascos have a better right to the land. value.
The instant case is for accion publiciana, or for Grounds:
recovery of the right to possess. (l) extrinsic fraud,
(m)void decision for want of
Accion publiciana is also used to refer to an due process
ejectment suit where the cause of dispossession is (n) lack of jurisdiction
PAGE 312
Calalang vs. Register of Deeds,

1992: Under the Torrens system And is barred from bringing an
of registration, the Torrens still action for recovery of the land.
becomes indefeasible and
incontrovertible one year from the The action has not prescribed. It
issuance of the final decree and is must be instituted within 6 years
generally conclusive evidence of from the time the right to bring
the ownership such action first occurred--> date
of issue of the certificate of title
Iglesia ni Cristo vs. CFI, 1983: This
applies as well to title acquired Against whom filed: against the
through homestead or free Register of Deeds and the
patents National Treasurer if FEMOM is
Action for (o) before issuance of decree, caused by court personnel,
Reconveyance or within/after 1 year from Register of Deeds, his deputy or
entry other employees of the Registry
(p) if based on implied trust, 10
years; If other than those above
(q) if based on expressed trust mentioned: the Register of
and void contract, Deeds, the National Treasurer
imprescriptible and other person or persons, as
(r) if based on fraud, 4 years co-defendants.
from the discovery Annulment of Grounds: extrinsic fraud and lack
(s) not available if the property Judgment of jurisdiction.
has already been
transferred to an innocent Galicia vs. Marquez (2007):
purchaser for value. Ordinary remedies of appeal,
Esconde vs. Barlongay, 1987: It motion for new trial etc should no
does not reopen proceedings but longer be available. If based on
a mere transfer of the land from extrinsic fraud, file 4 within years
registered owner to the rightful from discovery.
owner
Huang vs. CA,1994: It is available If based on lack of jurisdiction,
in case of fraud thereby creating a before it is barred by laches or
constructive trust between parties estoppel
Ching vs. CA, 1990: It can be Reversion Instituted by the government,
Damages availed of when reconveyance is thru Solgen in all cases where
no longer possible as when the lands of public domain are held in
land has been transferred to an violation of the Constitution or
innocent purchaser for value were fraudulently conveyed.
Action for Requisites:
Compensation A person sustains loss or damage Indefeasibility of title,
from the or is deprived by any estate or prescription, laches, and estoppel
1
Assurance Fund interest in land do not bar reversion suits.
Criminal Action Perjury, Forgery, Others involving
On account of bringing of land fraud
under the Torrens system
JUDICIAL CONFIRMATION OF IMPERFECT OR INCOMPLETE
Through (FEMOM) fraud, error, TITLES
mistake, omission, or General Rule
misdescription in the certificate of No title or right to, or equity in, any lands of the
entry in the registration book public domain may be acquired by prescription or by
Without negligence on his part adverse possession or occupancy except as expressly
provided by law. (CA 141, Sec 57) The Public Land
1
Upon registration, there shall be paid to the Register of Deeds ¼ Act recognizes the concept of ownership under the
of 1% of the assessed value of the real estate on the basis of the civil law. This ownership is based on adverse
last assessment for taxation purposes, as contribution to the possession and the right of acquisition is governed
Assurance Fund.
PAGE 313
by the Chapter on judicial confirmation of imperfect CADASTRAL REGISTRATION

or incomplete titles.
Unlike other kinds of registration, this is compulsory
This applies only to alienable and disposable as it is initiated by the government.
agricultural lands of the public domain. Under Sec. 6
of CA 141, the classification of public lands into PD 1529, Sec 35. Cadastral Survey preparatory to filing
alienable and disposable forest lands, or mineral of petition.
lands is the prerogative of the Executive Department. (a) When in the opinion of the President of the
Philippines public interest so requires that title to
Bracewell vs. CA, (2000): The rule on confirmation of any unregistered lands be settled and
imperfect title does not apply unless and until the adjudicated, he may to this end direct and order
land classified as, say, forest land, is released in an the Director of Lands to cause to be made a
official proclamation to that effect so that if may cadastral survey of the lands involved and the
form part of the disposable agricultural lands of the plans and technical description thereof prepared
public domain. in due form.
Period of filing (b) Thereupon, the Director of Lands shall give notice
RA No. 9176 extended the period to file an to persons claiming any interest in the lands as
application for judicial confirmation of imperfect or well as to the general public, of the day on which
incomplete title to December 31, 2020. It further such survey will begin, giving as fully and
limited the area applied for to 12 hectares. accurately as possible the description of the lands
to be surveyed. Such notice shall be punished
Requisites once in the Official Gazette, and a copy of the
(a) Filipino citizen notice in English or the national language shall
(b) He must have, by himself, or thru his be posted in a conspicuous place on the bulletin
predecessors – in - interest, possessed and board of the municipal building of the
occupied an alienable and disposable municipality in which the lands or any portion
agricultural portion of the public domain thereof is situated. A copy of the notice shall also
(c) Such possession and occupation must have be sent to the mayor of such municipality as well
been OCEN and in the concept of owner since as to the barangay captain and likewise to the
June 12, 1945 Sangguniang Panlalawigan and the
(d) Application filed with proper court Sangguniang Bayan concerned.
Private corporations (c) The Geodetic Engineers or other employees of the
Where at the time the corporation acquired the land, Bureau of Lands in charge of the survey shall give
its predecessor-in-interest had been in possession notice reasonably in advance of the date on which
and occupation thereof in the manner and for the the survey of any portion of such lands is to begin,
period prescribed by law as to entitle him to which notice shall be posted in the bulletin board
registration in his name, then the proscription of the municipal building of the municipality or
against corporation acquiring alienable lands of the barrio in which the lands are situated, and shall
public domain does not apply for the land was no mark the boundaries of the lands by monuments
longer public land but private property. Since the set up in proper places thereon. It shall be lawful
land is private, the corporation can institute for such Geodetic Engineers and other employees
confirmation proceedings. (Director of Lands vs. IAC to enter upon the lands whenever necessary for
and Acme Plywood and Veneer Co., 1986) the purposes of such survey or the placing of
monuments.
NOTE:
(a) MAXIMUM LAND THAT CAN BE APPLIED FOR: (d) It shall be the duty of every person claiming an
144 hectares interest in the lands to be surveyed, or in any
(b) In case of foreigner, it sufficient that he is already parcel thereof, to communicate with the Geodetic
Filipino citizen at the time of his application. Engineer upon his request therefor all
(c) Corporation which has less than 60% Filipino information possessed by such person concerning
ownership cannot apply confirmation of imperfect the boundary lines of any lands to which he
title; can only lease claims title or in which he claims any interest.
(d) PERSONS COMPETENT TO QUESTION LAND
GRANT: Persons who obtained title from State or (e) Any person who shall willfully obstruct the
thru persons who obtained title from State. making of any survey undertaken by the Bureau of
PAGE 314
Lands or by a licensed Geodetic Engineer duly STEPS IN CADASTRAL REGION PROCEEDINGS

authorized to conduct the survey under this Section, (1) Determination of the President that public
or shall maliciously interfere with the placing of any interest requires title to unregistered lands be
monument or remove such monument, or shall settled
destroy or remove any notice of survey posted on the (2) Director of lands shall make a cadastral survey
land pursuant to law, shall be punished by a fine of (3) Director of Lands gives notice to interested
not more than one thousand pesos or by persons
imprisonment for not more than one year, or both. (4) Publication of notice
(5) A copy of the notice shall also be sent to the
PD 1529, Sec 36. Petition for registration. When the mayor and the sanggunian
lands have been surveyed or plotted, the Director of (6) Geodetic engineers/ Bureau of Land employees
Lands, represented by the Solicitor General, shall shall notify (re: survey) by posting at the
institute original registration proceedings by filing municipal building
the necessary petition in the Court of First Instance (7) Interested persons should communicate with
of the place where the land is situated against the the geodetic engineer if he requests for any
holders, claimants, possessors, or occupants of such information about the land
lands or any part thereof, stating in substance that (8) Actual survey/ plotting of the land
public interest requires that the title to such lands be (9) Director of Lands represented by Solicitor
settled and adjudicated and praying that such titles General shall institute original registration
be so settled and adjudicated: proceedings
(10) Publication, mailing posting
The petition shall contain a description of the lands (11) Hearing
and shall be accompanied by a plan thereof, and (12) Decision
may contain such other data as may serve to furnish (13) Issuance of the decree and certificate of title
full notice to the occupants of the lands and to all
persons who may claim any right or interest therein. Note: In voluntary registration proceedings, there is
no res judicata when the applicant fails to prove his
Where the land consists of two or more parcels held title. In cadastral registration, if the applicant cannot
or occupied by different persons, the plan shall prove that he is entitled to the land, the land
indicate the boundaries or limits of the various becomes public land. There is res judicata.
parcels as accurately as possible. The parcels shall
be known as "lots" and shall on the plan filed in the
case be given separate numbers by the Director of Subsequent Registration
Lands, which numbers shall be known as "cadastral
lot numbers". TWO TYPES OF DEALINGS
VOLUNTARY DEALINGS
The lots situated within each municipality shall, as Deeds, instruments, documents which are the results
far as practicable, be numbered consecutively of free and voluntary acts of parties thereto.
beginning with number "one", and only one series of
numbers shall be used for that purpose in each INVOLUNTARY DEALINGS
municipality. However in cities or townsites, a Writ, order, or process issued by the court of record
designation of the landholdings by blocks and lot affecting registered land, also other instruments
numbers may be employed instead of the which are not willful acts of the registered owner,
designation by cadastral lot numbers. executed without his knowledge or consent.
The cadastral number of a lot shall not be changed NECESSITY AND EFFECTS OF REGISTRATION
after final decision has been entered decreasing the
registration thereof, except by order of court. Future PD 1529, Sec 51. Conveyance and other dealings by
subdivisions of any lot shall be designated by a letter registered owner. An owner of registered land may
or letters of the alphabet added to the cadastral convey, mortgage, lease, charge or otherwise deal
number of the lot to which the respective with the same in accordance with existing laws. He
subdivisions pertain. The letter with which a may use such forms of deeds, mortgages, leases or
subdivision is designated shall be known as its other voluntary instruments as are sufficient in law.
"cadastral letter": Provided, however, that the
subdivisions of cities or townsites may be designated But no deed, mortgage, lease, or other voluntary
by blocks and lot numbers. instrument, except a will purporting to convey or
affect registered land shall take effect as a
PAGE 315
conveyance or bind the land, but shall operate only

as a contract between the parties and as evidence of Voluntary Dealings Involuntary Dealings
authority to the Register of Deeds to make
registration. deed of sale and the
same is entered in the
The act of registration shall be the operative act to day book and at the
convey or affect the land insofar as third persons are same time he
concerned, and in all cases under this Decree, the surrenders or presents
registration shall be made in the office of the the owner’s duplicate
Register of Deeds for the province or city where the certificate of title
land lies. covering the land sold
and pays the
Note: The deed, mortgage, lease, or other voluntary registration fees.
instrument, except a will shall ONLY operate as: Villasor vs. Camon, Dir. Of Lands vs. Reyes,
(1) A contract between the parties and (1951): It is necessary to (1976): Entry in the day
(2) Evidence of authority to the Register of Deeds to register the deed or book is sufficient notice to
make registration. instrument in the entry all persons of an adverse
book and a claim without the same
(a) The act of registration shall be the operative act to memorandum thereof being annotated at the
convey or affect the land insofar as third persons shall also be made in back of the certificate of
are concerned. the owner’s duplicate title
(b) A forged deed is an absolute nullity and conveys certificate and its
no title. original
(c) EXCEPTION: If there is good faith, a TCT has Spouses Labayen vs. AFP Mutual Benefit
already been issued to the purchaser, the latter Leonardo Serafica, Association vs. Santiago,
being an innocent purchaser for value according (2008, Nachura): At (2008, Nachura): Entry of
to Sec. 39, PD 1529, then the title is good. the time of the filing of the attachment in the
the petition for books is sufficient notice to
PD 1529, Sec 52. Constructive notice upon registration. cancellation of all persons. Hence, the
Every conveyance, mortgage, lease, lien, attachment, encumbrance, the fact that the deed of sale
order, judgment, instrument or entry affecting lease contract already was already annotated is of
registered land shall, if registered, filed or entered in lost its efficacy. Thus, no moment with regard to
the office of the Register of Deeds for the province or there is no basis to third persons. The
city where the land to which it relates lies, be save its annotation on preference created by the
constructive notice to all persons from the time of defendant’s title. The levy on attachment is not
such registering, filing or entering. fact that the diminished by the
cancellation of the subsequent registration of
lease contract was the deed of sale.
Voluntary Dealings Involuntary Dealings forged is of no
moment, for there was
Sale, mortgage, lease, Attachment, injunction, no violation of a right.
patent, powers of mandamus, levy on
General Rule:
attorney, trusts execution, notice of lis
pendens (a) Campillo vs. PNB, 1969: A person dealing with
registered property need not go beyond, but only has
Presentation of the Entry in the day book is
to rely on, the title.
owner’s duplicate sufficient notice to all
(b) He is charged with notice only of such burdens and
certificate of title is persons
claims which are annotated on the title, for
required to notify;
registration is the operative act that binds the
mere entry insufficient
property.
An innocent purchaser Lenin vs. Bass, (1952): Entry
for value of registered thereof in the day book of
WHEN SHOULD A PURCHASER INVESTIGATE?
land becomes the the ROD is sufficient notice
(c) Banks are required to exercise more care and
registered owner the to all persons even if the
prudence in dealing with registered lands for their
moment he presents owner’s duplicate
business is one affected with public interest. The
and files a duly certificate of title is not
general rule does not apply.
notarized and valid presented to the ROD.
PAGE 316
(d) Leung Yee vs. Strong Machinery, (1918): When party whether such person resides within or without the
concerned has actual knowledge of facts and Philippines, but the court may, in its discretion,
circumstances that would impel a reasonably require further or other notice to be given in any
cautious man to make inquiry. case, if in its opinion the interest of justice so
(e) Jamoc vs. CA, (1991): When purchaser is in bad faith; requires.
e.g. he had full knowledge of a previous sale.
(f) Quiniano vs. CA, (1971): When a person buys land from PD 1529, Sec 56. Primary Entry Book; fees; certified
one whose rights over the land is evidenced only by a copies. Each Register of Deeds shall keep a primary
deed of sale and an annotation in the certificate of entry book in which, upon payment of the entry fee,
title but no TCT. he shall enter, in the order of their reception, all
instruments including copies of writs and processes
VOLUNTARY DEALINGS filed with him relating to registered land.
REGISTRATION OF VOLUNTARY INSTRUMENTS IN GENERAL He shall, as a preliminary process in registration,

PD 1529, Sec 54. Dealings less than ownership, how note in such book the date, hour and minute of
registered. No new certificate shall be entered or reception of all instruments, in the order in which
issued pursuant to any instrument which does not they were received. They shall be regarded as
divest the ownership or title from the owner or from registered from the time so noted, and the
the transferee of the registered owners. memorandum of each instrument, when made on
the certificate of title to which it refers, shall bear the
All interests in registered land less than ownership same date:
shall be registered by filing with the Register of
Deeds the instrument which creates or transfers or Provided, that the national government as well as
claims such interests and by a brief memorandum the provincial and city governments shall be exempt
thereof made by the Register of Deeds upon the from the payment of such fees in advance in order to
certificate of title, and signed by him. be entitled to entry and registration.
A similar memorandum shall also be made on the Every deed or other instrument, whether voluntary or
owner's duplicate. The cancellation or involuntary, so filed with the Register of Deeds shall
extinguishment of such interests shall be registered be numbered and indexed and endorsed with a
in the same manner. reference to the proper certificate of title. All records
and papers relative to registered land in the office of
PD 1529, Sec 55. Grantee's name, nationality, etc., to the Register of Deeds shall be open to the public in
be stated. Every deed or other voluntary instrument the same manner as court records, subject to such
presented for registration shall contain or have reasonable regulations as the Register of Deeds,
endorsed upon it the full name, nationality, under the direction of the Commissioner of Land
residence and postal address of the grantee or other Registration, may prescribe.
person acquiring or claiming an interest under such
instrument, and every deed shall also state whether All deeds and voluntary instruments shall be
the grantee is married or unmarried, and if married, presented with their respective copies and shall be
the name in full of the husband or wife. attested and sealed by the Register of Deeds,
endorsed with the file number, and copies may be
If the grantee is a corporation or association, the delivered to the person presenting them.
instrument must contain a recital to show that such
corporation or association is legally qualified to Certified copies of all instruments filed and
acquire private lands. Any change in the residence or registered may also be obtained from the Register of
postal address of such person shall be endorsed by Deeds upon payment of the prescribed fees.
the Register of Deeds on the original copy of the
corresponding certificate of title, upon receiving a Process of registration
sworn statement of such change. All names and (1) File instrument creating or transferring interest
addresses shall also be entered on all certificates. and certificate of title with Register of Deeds
together with:
Notices and processed issued in relation to (a) Owner’s duplicate
registered land in pursuance of this Decree may be (b) Payment of fees & documentary stamp tax
served upon any person in interest by mailing the (c) Evidence of full payment of real estate tax
same to the addresses given, and shall be binding, (d) Document of transfer – 1 copy additional for
city/provincial assessor
PAGE 317
(2) Register of Deeds shall make a memorandum on If there are subsisting encumbrances and annotations
the certificate of title, signed by him They shall be carried over in the new certificate or
(3) TCT shall then be issued certificates; except when they have been
simultaneously discharged.
Note:
(a) If the grantee is a corporation or association, it MORTGAGES AND LEASES
must show that it is qualified to acquire private PD 1529, Sec 60. Mortgage or lease of registered land.
lands. Mortgage and leases shall be registered in the
(b) PNB vs. Fernandez (1935): The issuance of a new manner provided in Section 54 of this Decree.
transfer certificate without presentation of an
owner’s duplicate is unwarranted and confers no The owner of registered land may mortgage or lease
right on the purchaser it by executing the deed in a form sufficient in law.
(c) RA 456 prohibits registration of documents Such deed of mortgage or lease and all instruments
affecting real property which is delinquent in the which assign, extend, discharge or otherwise deal
payment of real estate taxes. Further, if evidence with the mortgage or lease shall be registered, and
of such payment is not presented with 15 days shall take effect upon the title only from time of
from the date of entry of said document in the registration.
primary entry book of the register of deeds the
entry shall be deemed cancelled. No mortgagee's or lessee's duplicate certificate of
(d) Pay fees and DST (government is exempt) title shall hereafter be issued by the Registers of
(e) The instruments are regarded as registered from Deeds, and those issued prior to the effectivity of this
the time ROD enters them in his book. Decree are hereby deemed canceled and the holders
thereof shall immediately surrender the same to the
REGISTRATION OF DEEDS OF SALE AND TRANSFERS Register of Deeds concerned.
If entire property is subject (PD 1529, Sec 57)
(a) Owner executes and registers the deed which
must be sufficient in form. PD 1529, Sec 61. Registration. Upon presentation for
(b) A new certificate of title is issued and Register of registration of the deed of mortgage or lease
Deeds prepares and delivers to grantee his together with the owner's duplicate, the Register of
owner's duplicate certificate Deeds shall enter upon the original of the certificate
(c) Register of Deeds notes upon the OCT and the of title and also upon the owner's duplicate
duplicate certificate the date of transfer, the certificate a memorandum thereof, the date and
volume and page of the registration book where time of filing and the file number assigned to the
the new certificate is registered deed, and shall sign the said memorandum.
(d) The original and the owner's duplicate of the
grantor's certificate shall be stamped "canceled". He shall also note on the deed the date and time of
(e) The deed of conveyance shall be filed and filing and a reference to the volume and page of the
indorsed with the number and the place of registration book in which it is registered.
registration of the certificate of title of the land
conveyed. Mortgage and leases shall be registered in the
manner provided for in Section 54.
If only a portion of property is subject (PD 1529, Sec When a deed of mortgage or lease is presented, ROD
58) will enter upon the OCT and upon the owner’s
(a) Include a plan which shows all the portions duplicate a memorandum thereof and shall sign.
already subdivided with verified and approved
technical description. POWERS OF ATTORNEY; TRUSTS
(b) That plan with the certified copy of the technical PD 1529, Sec 64. Power of attorney. Any person may,
descriptions shall be filed with the Register of by power of attorney, convey or otherwise deal with
Deeds for annotation in the TCT. registered land and the same shall be registered
(c) Register of Deeds shall issue a TCT and cancel with the Register of Deeds of the province or city
the grantor's certificate partially OR it may be where the land lies. Any instrument revoking such
canceled totally and a new one issued describing power of attorney shall be registered in like manner.
therein the remaining portion
PD 1529, Sec 65. Trusts in registered land. If a deed or
other instrument is filed in order to transfer
registered land in trust, or upon any equitable
condition or limitation expressed therein, or to create
PAGE 318
or declare a trust or other equitable interests in such claim doesn’t affect the title of a purchaser for
land without transfer, the particulars of the trust, value and in good faith before its registration.
condition, limitation or other equitable interest shall
not be entered on the certificate; but only a INVOLUNTARY DEALINGS
memorandum thereof shall be entered by the words
"in trust", or "upon condition", or other apt words, ATTACHMENT
and by a reference by number to the instrument A writ issued at the institution or during progress of
authorizing or creating the same. an action commanding the sheriff to attach the
property, rights, credits or effects of the defendant to
A similar memorandum shall be made upon the satisfy demands of the plaintiff
original instrument creating or declaring the trust or
other equitable interest with a reference by number Kinds
to the certificate of title to which it relates and to the (a) Preliminary
volume and page in the registration book in which it (b) Garnishment
is registered. (c) Levy on execution
PD 1529, Sec 66. Trust with power of sale, etc., how Registration of attachment/other liens
expressed. If the instrument creating or declaring a (a) Copy of writ in order to preserve any lien, right or
trust or other equitable interest contains an express attachment upon registered land shall be filed
power to sell, mortgage or deal with the land in any with the Register of Deeds where the land lies,
manner, such power shall be stated in the certificate containing number of certificate of title of land to
of title by the words "with power to sell", or "power to be affected or description of land (PD 1529, Sec
mortgage", or by apt words of description in case of 69)
other powers. (b) Register of Deeds to index attachment in names
of both plaintiff & defendant or name of person
No instrument which transfers, mortgages or in any whom property is held or in whose name stands
way deals with registered land in trust shall be in the records
registered, unless the enabling power thereto is (c) If duplicate of certificate of title is not presented:
expressly conferred in the trust instrument, or unless (1) Register of Deeds shall within 36 hours send
a final judgment or order of a court of competent notice to registered owner by mail stating that
jurisdiction has construed the instrument in favor of there has been registration & requesting him
the power, in which case a certified copy of such to produce duplicate so that memorandum be
judgment or order may be registered. made
(2) If owner neglects or refuses – Register of
Deeds shall report matter to court.
PD 1529, Sec 68. Implied, trusts, how established. (3) Court after notice shall enter an order to
Whoever claims an interest in registered land by owner to surrender certificate at time & place
reason of any implied or constructive trust shall file to be named therein.
for registration with the Register of Deeds a sworn (d) Although notice of attachment is not noted in
statement thereof containing a description of the duplicate, notation in book of entry of Register of
land, the name of the registered owner and a Deeds produces effect of registration already
reference to the number of the certificate of title.
Such claim shall not affect the title of a purchaser for Effect of registration of attachment
value and in good faith before its registration. (a) Creates real right
(b) Has priority over execution sale
(a) Powers of attorney and revocations shall be (c) But between 2 attachments – one that is earlier
registered with the Register of Deeds of the in registration is preferred
province or city where the land lies.
(b) To transfer registered land in trust without Duty of Register of Deeds
transfer, the particulars of the trust shall not be Ministerial but may refuse registration in the
entered on the certificate. Only a memorandum following circumstances:
shall be entered by the words "in trust", or "upon (1) Title to land is not in the name of defendant
condition". (2) No evidence is submitted to show that he has
(c) Power must be expressly conferred in the trust present or possible future interest in land
instrument.
(d) If implied or constructive trust, person claiming Exception: If petitioner is an heir
such must execute a sworn statement. But such
PAGE 319
EXECUTION AND TAX DELINQUENCY SALES sale) is made: cancellation of title & issuance of a
Execution sale new one
(a) To enforce a lien of any description on registered (e) Before cancellation, notice shall be sent to
land, any execution or affidavit to enforce such registered owner: to surrender title & show cause
lien shall be filed with Register of Deeds where why it shall not be cancelled
the land lies
(b) Register in the registration book & memorandum NOTE: Actual knowledge is equivalent to registration.
upon proper certificate of title as adverse claim or
as an encumbrance NOTICE OF LIS PENDENS
(c) To determine preferential rights between 2 liens: PD 1529, Sec. 76. Notice of lis pendens. No action to
priority of registration of attachment recover possession of real estate, or to quiet title
thereto, or to remove clouds upon the title thereof, or
Tax sale for partition, or other proceedings of any kind in court
(a) Sale of land for collection of delinquent taxes and directly affecting the title to land or the use or
penalties due the Government occupation thereof or the buildings thereon, and no
(b) In personam (all persons interested shall be judgment, and no proceeding to vacate or reverse
notified so that they are given opportunity to be any judgment, shall have any effect upon registered
heard) land as against persons other than the parties
(c) Notice to be given to delinquent tax payer at last thereto, unless a memorandum or notice stating the
known address institution of such action or proceeding and the court
(d) Publication of notice must also be made in wherein the same is pending, as well as the date of
English, Spanish & local dialect & posted in a the institution thereof, together with a reference to
public & conspicuous place in place wherein the number of the certificate of title, and an
property is situated & at the main entrance of the adequate description of the land affected and the
provincial building registered owner thereof, shall have been filed and
(e) Sale cannot affect rights of other lien holders registered.
unless they are given the right to defend their
rights: due process must be strictly observed Purpose
(f) Tax lien superior to attachment To keep the subject matter within the power of the
(g) No need to register tax lien because it is court until the entry of final judgment. It therefore
automatically registered once the tax accrues creates merely a contingency & not a lien.
(h) But sale of registered land to foreclose a tax lien
need to be registered. Effect of registration
(a) Impossibility of alienating the property in dispute
PD 1529, Sec 74. Enforcement of liens on registered during the pendency of the suit – may be
land. Whenever registered land is solved on alienated but purchaser is subject to final
execution, or taken or sold for taxes or for any outcome of pending suit
assessment or to enforce a lien of any character, or (b) Register of Deeds is duty bound to carry over
for any costs and charges incident to such liens, any notice of lis pendens on all new titles to be issued
execution or copy of execution, any officer's return, or
any deed, demand, certificate, or affidavit, or other Cancellation of lis pendens (PD 1529, Sec. 77)
instrument made in the course of the proceedings to (a) Before final judgment – court may order
enforce such liens and required by law to be cancellation after showing that notice is only for
recorded, shall be filed with the Register of Deeds of the purpose of molesting an adverse party or it is
the province or city where the land lies and not necessary to protect the rights of the party
registered in the registration book, and a who caused it to be registered
memorandum made upon the proper certificate of (b) Register of Deeds may also cancel upon verified
title in each case as lien or encumbrance. petition of the party who caused such registration
(c) Deemed cancelled when certificate of clerk of
Procedure of registration of tax sale court stating manner of disposal of proceeding is
(a) Officer’s return shall be submitted to Register of registered
Deeds together with duplicate title
(b) Register in the registration book Other parties who need to register
(c) Memorandum shall be entered in the certificate Assignee in involuntary proceeding for insolvency
as an adverse claim or encumbrance (a) Duty of the officer serving notice to file a copy of
(d) After the period of redemption has expired & no the notice to the Register of Deeds where the
redemption (2 years from registration of auction property of debtor lies
PAGE 320
(b) Assignee elected or appointed by court shall be thirty days, the claimant may withdraw his adverse
entitled to entry of new certificate of registered claim by filing with the Register of Deeds a sworn
land upon presentment of copy of assignment petition to that effect.
with bankrupt’s certificate of title (duplicate)
(c) New certificate shall note that it is entered to him When is a claim adverse?
as assignee or trustee in insolvency proceedings When a person claims any part or interest in
registered land adverse to the registered owner, after
Government in eminent domain date of the original registration
(a) Copy of judgment shall be filed in the Register of
Deeds which states description of property, Duration of an adverse claim
certificate number, interest expropriated, nature 30 days from the date of registration. After that the
of public use annotation of adverse claim may be cancelled upon
(b) Memorandum shall be made or new certificate of filing of a verified petition by the party in interest.
title shall be issued When cancelled, no second adverse claim based on
the same ground may be registered by the same
ADVERSE CLAIM claimant.
Sec. 70. Adverse claim. Whoever claims any part or
interest in registered land adverse to the registered Requisites
owner, arising subsequent to the date of the original The adverse claimant must give a statement, signed
registration, may, if no other provision is made in this and sworn before a notary public, of the following in
Decree for registering the same, make a statement in writing:
writing setting forth fully his alleged right or interest, (a) his alleged right or interest
and how or under whom acquired, a reference to the (b) how and under whom such alleged right or
number of the certificate of title of the registered interest is acquired
owner, the name of the registered owner, and a (c) the description of the land in which the right or
description of the land in which the right or interest interest is claimed and
is claimed. (d) the number of the certificate of title
(e) his residence or the place to which all notices may
The statement shall be signed and sworn to, and be served upon him.
shall state the adverse claimant's residence, and a
place at which all notices may be served upon him. NOTE: Non-compliance with the above requisites
This statement shall be entitled to registration as an renders the adverse claim non-registrable and
adverse claim on the certificate of title. The adverse ineffective.
claim shall be effective for a period of thirty days
from the date of registration. After the lapse of said
period, the annotation of adverse claim may be
canceled upon filing of a verified petition therefor by
the party in interest: Provided, however, that after
Non-registrable Properties
cancellation, no second adverse claim based on the NON-REGISTRABLE LANDS
same ground shall be registered by the same
claimant. 1987 Constitution, Art. XII, Sec. 2
All lands of the public domain, waters, minerals, coal,
Before the lapse of thirty days aforesaid, any party in petroleum, and other mineral oils, all forces of potential
interest may file a petition in the Court of First energy, fisheries, forests or timber, wildlife, flora and fauna,
Instance where the land is situated for the and other natural resources are owned by the State. xxx
cancellation of the adverse claim, and the court shall
grant a speedy hearing upon the question of the Civil Code, Art. 420
validity of such adverse claim, and shall render The following things are property of public dominion:
judgment as may be just and equitable. If the (1) Those intended for public use, such as roads,
adverse claim is adjudged to be invalid, the canals, rivers, torrents, ports and bridges
registration thereof shall be ordered canceled. constructed by the State, banks, shores,
roadsteads, and others of similar character;
If, in any case, the court, after notice and hearing, (2) Those which belong to the State, without being
shall find that the adverse claim thus registered was for public use, and are intended for some public
frivolous, it may fine the claimant in an amount not service or for the development of the national
less than one thousand pesos nor more than five wealth.
thousand pesos, in its discretion. Before the lapse of
PAGE 321
The following lands cannot be registered: the duplicate of the instrument, with appropriate
(a) Forest or timberlands annotation, certifying that he has recorded the
(b) Lands for public use: roads, ports and bridges, instrument after reserving one copy thereof to be
etc. furnished the provincial or city assessor as
(c) Lands which are owned by the State for public required by existing law.
service or development of national wealth
(d) Tax sale, attachment and levy, notice of lis
pendens, adverse claim and other instruments in
the nature of involuntary dealings with respect to
unregistered lands, if made in the form sufficient
Dealings with in law, shall likewise be admissible to record
under this section.
Unregistered Lands
(e) For the services to be rendered by the Register of
PD 1529, Sec 113. Recording of instruments relating to Deeds under this section, he shall collect the
unregistered lands. No deed, conveyance, mortgage, same amount of fees prescribed for similar
lease, or other voluntary instrument affecting land services for the registration of deeds or
not registered under the Torrens system shall be instruments concerning registered lands.
valid, except as between the parties thereto, unless
such instrument shall have been recorded in the Key points
manner herein prescribed in the office of the Register (1) The system of registration for unregistered land is
of Deeds for the province or city where the land lies. under the Torrens system.
(2) Before: covers voluntary dealings, now includes
(a) The Register of Deeds for each province or city involuntary dealings
shall keep a Primary Entry Book and a (3) Effect if prospective; binds 3rd persons after
Registration Book. The Primary Entry Book shall registration but yields to better rights of 3rd
contain, among other particulars, the entry person prior to registration (limited effect to 3rd
number, the names of the parties, the nature of parties) reason: no strict investigation involved
the document, the date, hour and minute it was (4) Subsequent dealings – also valid if recorded
presented and received. The recording of the (5) Register of deeds keeps day book & a register;
deed and other instruments relating to index system is also kept
unregistered lands shall be effected by any of
annotation on the space provided therefor in the Procedure
Registration Book, after the same shall have been (1) Presentment of instrument dealing in
entered in the Primary Entry Book. unregistered land
(2) If found in order – registered
(b) If, on the face of the instrument, it appears that it (3) If found defective – registration is refused writing
is sufficient in law, the Register of Deeds shall his reason for refusal
forthwith record the instrument in the manner
provided herein. In case the Register of Deeds
refuses its administration to record, said official
shall advise the party in interest in writing of the
ground or grounds for his refusal, and the latter
may appeal the matter to the Commissioner of
Land Registration in accordance with the
provisions of Section 117 of this Decree. It shall be
understood that any recording made under this
section shall be without prejudice to a third party
with a better right.
(c) After recording on the Record Book, the Register

of Deeds shall endorse among other things, upon
the original of the recorded instruments, the file
number and the date as well as the hour and
minute when the document was received for
recording as shown in the Primary Entry Book,
returning to the registrant or person in interest
PAGE 322
UP COLLEGE OF LAW TORTS & DAMAGES BAR OPERATIONS COMMISSION
PAGE 323
Principles of Torts The provision is intended to provide a remedy in

cases where the law declares an act illegal but fails
to provide for a relief to the party injured. (Jarencio)
ABUSE OF RIGHT
Art. 19. Every person must, in the exercise of his NCC 20 does not distinguish, and the act may be
rights and in the performance of his duties, act with done wilfully or negligently.
justice, give everyone his due, and observe honesty
and good faith. REQUISITES
(1) The act must be wilful or negligent;
Generally, the exercise of any right must be in (2) It must be contrary to law;
accordance with the purpose for which it was (3) Damages must be suffered by the injured party.
established. It must not be excessive or unduly
harsh; there must be no intention to injure another. ACTS CONTRARY TO MORALS
Art. 21. Any person who wilfully causes loss or injury
There is abuse of right when: to another in a manner that is contrary to morals,
(a) The right is exercised for the only purpose of good customs or public policy shall compensate the
prejudicing or injuring another latter for the damage.
(b) The objective of the act is illegitimate
(c) There is an absence of good faith This article is designed to fill in the “countless gaps”
in the statutes which would otherwise leave victims
ELEMENTS: of moral wrongs helpless.
(1) There is a legal right or duty;
(2) Which is exercised in bad faith; ELEMENTS:
(3) For the sole intent of prejudicing or injuring (1) Legal action;
another. (2) Contrary to morals, public policy, good customs;
(3) Intent to injure.
Velayo vs. Shell (1959): The standards in NCC 19 are
implemented by NCC 21. EXAMPLES:
BREACH OF PROMISE TO MARRY, SEDUCTION AND SEXUAL
ASSAULT
Globe vs. CA (1989): When a right is exercised in a
manner which does not conform with the norms in Wassmer vs. Velez (1964): Mere breach of promise to
NCC 19, and results in damage to another, a legal marry is not an actionable wrong. But to formally set
wrong is thereby committed. a wedding and go through all the above-described
preparation and publicity, only to walk out of it when
the matrimony is about to be solemnized, is quite
University of the East vs. Jader (2000): The conscious different. This is palpably and unjustifiably contrary
indifference of a person to the rights or welfare of the to good customs xxx.
others who may be affected by his act or omission
can support a claim for damages.
Baksh vs. CA (1993): Where a man's promise to marry
is in fact the proximate cause of the acceptance of
Nikko Hotel Manila Garden vs. Reyes (2005): Article his love by a woman and his representation to fulfill
19, known to contain what is commonly referred to as that promise thereafter becomes the proximate
the principle of abuse of rights, is not a panacea for cause of the giving of herself unto him in a sexual
all human hurts and social grievances. The object of congress, proof that he had, in reality, no intention of
this article is to set certain standards which must be marrying her and that the promise was only a subtle
observed not only in the exercise of one’s rights but scheme or deceptive device to entice or inveigle her
also in the performance of one’s duties. to accept him and to obtain her consent to the
sexual act, could justify the award of damages
ACTS CONTRARY TO LAW pursuant to Article 21 not because of such promise to
Art. 20. Every person who, contrary to law, willfully or marry but because of the fraud and deceit behind it
negligently causes damage to another, shall and the willful injury to her honor and reputation. It
indemnify the latter for the same. is essential, however, that such injury should have
been committed in a manner contrary to morals,
good customs or public policy.
PAGE 324
Tanjanco v. CA (1966): However, when for one whole negligence of the defendant, the latter shall be liable
year, the plaintiff, a woman of legal age, maintained for indemnity if through the act or event he was
sexual relations with the defendant, with repeated benefited.
acts of intercourse, there is here voluntariness. No
case under Article 21 is made. Art. 2142. Certain lawful, voluntary and unilateral
acts give rise to the juridical relation of quasi-
MALICIOUS PROSECUTION contract to the end that no one shall be unjustly
Malicious prosecution is the institution of any action enriched or benefited at the expense of another.
or proceeding, either civil or criminal, maliciously and
without probable cause.
Art. 2143. The provisions for quasi contracts in this
Chapter do not exclude other quasi-contracts which
ELEMENTS:
may come within the purview of the preceding
(1) The fact of the prosecution and that the
article.
defendant was himself the prosecutor, and that
the action was finally terminated with an
acquittal One person should not be permitted to unjustly
(2) The prosecutor acted without probable cause enrich himself at the expense of another, but should
(3) The prosecutor was impelled by legal malice. be required to make restitution of, or for property or
benefits received, retained, or appropriated where it
is just and equitable that such restitution be made,
Que vs. IAC (1989): To constitute malicious and where much action involves no violation or
prosecution, there must be proof that the frustration of law or opposition to public policy,
prosecution was prompted by a sinister design to vex either directly or indirectly.
and humiliate a person and that it was initiated
deliberately by the defendant knowing that his While neither Art. 22 nor Art. 23 expressly provides
charges were false and groundless. Concededly, the for the effects of unjust enrichment, the Chapter on
mere act of submitting a case to the authorities for Quasi-Contracts (Articles 2159-2163), which
prosecution does not make one liable for malicious complements or supplements and should be so
prosecution. considered in appropriate cases, does.
PUBLIC HUMILIATION Enrichment at the expense of another is not per se

Grand Union vs. Espino: It is against morals, good forbidden. It is such enrichment without just or legal
customs and public policy to humiliate, embarrass cause that is contemplated here.
and degrade the dignity of a person. Everyone must
respect the dignity, personality, privacy and peace of Just and legal cause is always presumed, and the
mind of his neighbors and other persons (Article 26, plaintiff has the burden of proving its absence.
Civil Code).
The restitution must cover the loss suffered by the
plaintiff but it can never exceed the amount of unjust
UNJUSTIFIED DISMISSAL
enrichment of the defendant if it is less than the loss
The right of an employer to dismiss an employee is
not to be confused with the manner in which this of the plaintiff.
right is to be exercised.
Requisites:
(1) That the defendant has been enriched;
When the manner in which the company exercised its
right to dismiss was abusive, oppressive and (2) That the plaintiff has suffered a loss;
malicious, it is liable for damages. (3) That the enrichment of the defendant is without
just or legal ground; and
(4) That the plaintiff has no other action based on
UNJUST ENRICHMENT
contract, crime or quasi-delict
Art. 22. Every person who through an act of
performance by another, or any other means, LIABILITY WITHOUT FAULT
acquires or comes into possession of something at
the expense of the latter without just or legal Art. 23. Even when an act or event causing damage
to another’s party was not due to the fault or
ground, shall return the same to him.
negligence of the defendant, the latter shall be liable
for indemnity if through the act or event he was
Art. 23. Even when an act or event causing damage benefited.
to another’s property was not due to the fault or
PAGE 325
BASIS OF LIABILITY
Equity. An involuntary act, because of its character, The Tortfeasor
cannot generally create an obligation; but when by Worcester vs. Ocampo (1958): Tortfeasor refers to all
such act its author has been enriched, it is only just persons who command, instigate, promote,
that he should indemnify for the damages caused to encourage, advise, countenance, cooperate in, aid or
the extent of this enrichment. abet the commission of a tort, or who approve of it
after it is done, if done for their benefit.
SCOPE OF LIABILITY
The indemnity does not include unrealized profits of THE DIRECT TORTFEASOR
the injured party, because the defendant’s
Art. 2176. Whoever by act or omission causes damage
enrichment is the limit of his liability.
to another, there being fault or negligence, is obliged
to pay for the damage done.
The tortfeasor may be a natural or juridical person.

Classification of Torts
PERSONS MADE LIABLE FOR OTHERS
ACCORDING TO MANNER OF COMMISSION Art. 2180 (1). The obligation imposed by Article 2176
(1) Negligent Tort – consists in the failure to act is demandable not only for one’s own acts or
according to the standard of diligence required omissions, but also for those of persons for whom
under the attendant circumstances. It is a one is responsible.
voluntary act or omission which results in injury to
others, without intending to cause the same.
PRINCIPLE OF VICARIOUS LIABILITY; DEFINITION
A person who has not committed the act or omission
(2) Intentional Tort – perpetrated by one who intends
which caused damage or injury to another may
to do that which the law has declared to be
nevertheless be held civilly liable to the latter either
wrong. It is conduct where the actor desires to
directly or subsidiarily under certain circumstances.
cause the consequences of the act, or that he
believes that the consequences are substantially
This is also known as the “doctrine of imputed
certain to result therefrom.
negligence.”
Note: Article 2176 where it refers to “fault or
negligence” covers not only acts “not punishable by Art. 2180, par. 8. The responsibility treated of in this
law” but also acts criminal in character, whether article shall cease when the persons herein
intentional and voluntary or negligent. (Elcano vs Hill mentioned prove that they observed all the diligence
(1977)) of a good father of a family to prevent damage.
(3) Strict Liability – one is liable independent of fault General Rule: proper defense is the exercise of the
or negligence. It only requires proof of a certain diligence of a good father of a family (bonus
set of facts. Liability here is based on the breach paterfamilias)
of an absolute duty to make something safe. It
most often applies to ultra-hazardous activities or Exception: common carriers, and all others subject to
in product liability cases. It is also known as extraordinary diligence.
“absolute liability” or liability without fault.”
Strict liability is imposed by articles 1314, 1711, 1712, BASIS OF VICARIOUS LIABILITY
1723, 2183, 2187, 2189, 2190, 2191, 2192, 2193. The basis of vicarious liability is NOT respondeat
superior; rather, it is the principle of pater familias.
ACCORDING TO SCOPE
GENERAL Respondeat Under American jurisprudence, it
Tort liability is based on any of the three categories: superior means that the negligence of the
intentional, negligent, strict liability servant is conclusively the negligence
of the master.
SPECIFIC
Includes trespass, assault, battery, negligence, Bonus pater Under the principle of pater familias,
products liability, and intentional infliction of familias the basis of the “master’s” liability is
emotional distress the negligence in the supervision of his
subordinates. The “master” will be
PAGE 326
(1) School
freed from liability if he can prove that
he had observed all the diligence of a (2) Administrators
good father of the family to prevent the (3) Teachers
(4) Individual, entity, or institution engaged in
damage.
child care
LIABILITY OF THE ACTUAL TORTFEASOR PARENTS AND ADOPTERS

The author of the act is not exempted from personal BASIS OF LIABILITY
liability. He may be sued alone or with the person It is based on the presumption of failure on their part
responsible for him. to properly exercise their parental authority for the
good education of their children and exert adequate
2 REQUISITES ACCORDING TO CHIRONI vigilance over them.
(1) The duty of supervision
(2) The possibility of making such supervision It is imposed only when children are living with the
effective parents.
PRESUMPTION OF NEGLIGENCE ON PERSONS INDIRECTLY If there is just cause for separation, the responsibility
RESPONSIBLE ceases.
Liability arises by virtue of a presumption juris Note: The responsibility of the father and mother is
tantum of negligence on the part of the persons made not simultaneous but alternate.
responsible under the article, derived from their failure
to exercise due care and vigilance over the acts of the WHEN RESPONSIBILITY CEASES
subordinates to prevent them from causing damage. When parent is not in the position to exercise
authority and supervision over the child
The non-performance of certain duties of precaution
and prudence imposed upon the persons who MEANING OF “MINORITY”
become responsible by civil bond uniting the actor to Par. 2 and 3 of Art. 2180 speak of minors. Minors
them. here refer to those who are below 21 years of age,
NOT below 18 years. The law reducing the majority
age from 21 to 18 years old did not amend these
Tamargo v. CA (1992): The basis of this vicarious, pars.
although primary, liability is, as in Article 2176, fault
or negligence, which is presumed from that which Art. 236, par. 3 of the FC, as amended by RA 6809,
accompanied the causative act or omission. The provides:
presumption is merely prima facie and may therefore
be rebutted. “Nothing in this Code shall be construed to
derogate from the duty or responsibility of
NATURE OF LIABILITY parents and guardians for children and wards
The liability of the vicarious obligor is PRIMARY and below 21 years of age mentioned in the second
DIRECT (solidarily liable with the tortfesor), not and third paragraphs of 2180 of the Civil Code.”
subsidiary. His responsibility is not conditioned upon
ADOPTED CHILDREN
the insolvency of or prior recourse against the
negligent tortfeasor. Judicially adopted children are considered legitimate
children of their adopting parents. Thus, adopters
PERSONS VICARIOUSLY LIABLE (ART. 2180) are civilly liable for their tortious/ criminal acts if the
WHO ARE LIABLE FOR MINORS?
children live with them and are below 21 years of
(a) Parents (the father, and in case of his death or age.
incapacity, the mother)
ILLEGITIMATE CHILDREN
(b) Adopters
Responsibility is with the mother whom the law vests
(c) Court-appointed guardians
parental authority.
(d) Substitute Parental Authorities
(1) Grandparents REASON FOR VICARIOUS LIABILITY
(2) Oldest qualified sibling over 21 years old
Exconde vs. Capuno (1957): The civil liability which the law
(3) Child’s actual custodian, provided he is
qualified and over 21 years old. imposes upon the father and, in case of his death or
(e) Special Parental Authorities incapacity, the mother, for any damages that may be
PAGE 327
caused by the minor children who live with them, is PARENTAL AUTHORITY OVER FOUNDLINGS, ABANDONED,
obvious. This is a necessary consequence of the NEGLECTED OR ABUSED AND OTHER SIMILARLY SITUATED
parental authority they exercise over them which CHILDREN
imposes upon the parents the 'duty of supporting In case of foundlings, abandoned, neglected or
them, keeping them in their company, educating abused children and other children similarly
them in proportion to their means', while, on the situated, parental authority shall be entrusted in
other hand, gives them the 'right to correct and summary judicial proceedings to heads of children's
punish them in moderation.' homes, orphanages and similar institutions duly
accredited by the proper government agency. (FC
Tamargo vs. CA (1992): The basis of parental Art. 217)
authority for the torts of a minor child is the
GUARDIANS
relationship existing between the parents and the
LIABILITY OF GUARDIANS
minor child living with them and over whom, the law
Guardians are liable for damages caused by the
presumes, the parents exercise supervision and
minors or incapacitated persons who are under their
control. To hold that parental authority had been
authority and live in their company. [Art. 2180, par. 3]
retroactively lodged in the adoptive parents so as to
(a) The liability of guardians with respect to their
burden them with the liability for a tortious act that
wards is governed by the same rule as in the
they could not have foreseen and prevented would
liability of parents with respect to their children
be unfair.
below 21 years and who live with them
(b) “Incompetent” includes
Parental liability is, in other words, anchored upon
(1) those suffering the penalty of civil interdiction,
parental authority coupled with presumed parental
or
dereliction in the discharge of the duties
(2) prodigals,
accompanying such authority. The parental
(3) deaf and dumb who are unable to read and
dereliction is, of course, only presumed and the
write
presumption can be overturned under Article 2180 of
(4) unsound mind, even though they have lucid
the Civil Code by proof that the parents had
intervals
exercised all the diligence of a good father of a
(5) being of sound mind, but by reason of age,
family to prevent the damage
disease, weak mind, and other similar causes,
cannot take care of themselves or manage
(NOTE: Art 2180, par 2 of the Civil Code which holds
their property [Rule 92, ROC]
the father liable for damages has been modified by
the Family Code and PD 603. Art. 211 of the FC
Liability of minor or insane tortfeasor without a parent
declares joint parental authority of the mother and
or guardian
father over common children. The parent(s)
He shall be answerable with his own property in an
exercising parental authority are liable for the torts
action against him where a guardian ad litem shall
of their children.
be appointed. [Art. 2182]
Libi vs. IAC (1992): The parent's liability under 2180 SCHOOL, TEACHERS AND ADMINISTRATORS
should be primary and not subsidiary. If it were Teachers or heads of establishments of arts and
subsidiary, the parents cannot invoke due diligence trades shall be liable for damages caused by their
as a defense. Such interpretation reconciles 2180 pupils and students or apprentices, so long as they
with 2194 which calls for solidary liability of joint remain in their custody. [Art. 2180, par. 7]
tortfeasors.
Requisite for
REQUISITES FOR LIABILITY TO ATTACH Who are liable For whose Acts Liability to
(1) The child is below 21 years old Attach
(2) The child is under the parental authority of the Teacher-in- Pupils and Pupils and
parents charge (the students students
The child is living in the company of the parents one remain in
designated to teacher’s
exercise custody
supervision regardless of
over students) the age
Head of Apprentices Custody
establishment regardless of
PAGE 328
Requisite for conducted. Recess by its nature does not include

Who are liable For whose Acts Liability to dismissal.
Attach
of arts and the age Mere fact of being enrolled or being in the premises
trades of a school without more does not constitute
School  If the tortfeasor is a Must be “attending school” or being in the “protective and
(generally not student of the below 18 supervisory custody” of the school, as concemplated
held liable) school (Art 218 FC) by law.
 If the tortfeasor is a
teacher/ employee Ylarde vs. Aquino (1988): The principal of the school
of the school, it is cannot be held liable for the reason that the school
liable as employer he leads is an academic school and not a school of
under 2180 (5) of arts and trades.
CC (St. Francis vs.
CA) OWNERS AND MANAGERS OF
 If the tortfeasor is a ESTABLISHMENTS AND ENTERPRISES
stranger, it is liable The owners and managers of an establishment or
for breach of enterprise are likewise responsible for damages
contract. (PSBA vs. caused by their employees in the service of the
CA) branches in which the latter are employed or on the
occasion of their functions. (Art. 2180, par. 4)
Parental Authority of Special Parental Authorities
may only be exercised while under their supervision, For whose Requisites for
instruction, or custody. This attaches to all Who are liable
acts liability to attach
authorized activities, whether inside or outside the Owners and Their The damage was
school, entity, or institution. managers of an employees caused in the
establishment service of the
Palisoc v. Brillantes: “Custody” means the protective or enterprise branches in which
and supervisory custody that the school, its head and the employees are
teachers exercise over the pupils, for as long as they employed
are in attendance in school, which includes recess -OR-
time. The damage was
caused on the
There is nothing in the law that requires that for such occasion of their
liability to attach, the pupil or student who commits functions
the tortious act must live and board in the school, as
erroneously held by the lower court, and in the dicta Philippine Rabbit vs. Philam Forwarders (1975):
in Mercado (as well as in Exconde) on which it relied, “Owners and managers of an establishment or
must now be deemed to have been set aside by this enterprise” does not include a manager of a
decision. corporation. (Spanish term “directores” connotes
“employer.” But manager of a corporation is not an
Amadora v. CA: As long as it is shown that the employer, but rather merely an employee of the
student is in the school premises pursuant to a owner.)
legitimate student objective, in the exercise of a
legitimate right, or the enjoyment of a legitimate EMPLOYERS (in general)
student privilege, the responsibility of the school Employers shall be liable for the damages caused by
authorities over the student continues. 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.
Salvosa v. IAC (1988): A student not “at attendance in (Art 2180, par. 5)
the school” cannot be in “recess” thereat. A “recess,”
as the concept is embraced in the phrase “at MEANING OF EMPLOYER:
attendance in the school,” contemplates a situation Art. 97 (b) (Labor Code). "Employer" includes any
of temporary adjournment of school activities where person acting directly or indirectly in the interest of
the student still remains within call of his mentor an employer in relation to an employee and shall
and is not permitted to leave the school premises, or include the government and all its branches,
the area within which the school activity is
PAGE 329
subdivisions and instrumentalities, all government- Basis of liability

owned or controlled corporations and institutions, as Employer’s negligence in
well as non-profit private institutions, or (1) The selection of their employees (culpa in
organizations. eligiendo)
(2) The supervision over their employees (culpa in
Professional Services vs. CA and Agana (2010): This vigilando)
Court still employs the "control test" to determine
the existence of an employer-employee relationship Cuison vs. Norton & Harrison (1930): Basis for civil
between hospital and doctor. Under the "control liability of employers is pater familias.
test", an employment relationship exists between a
physician and a hospital if the hospital controls both Presumption of Negligence
the means and the details of the process by which The presentation of proof of the negligence of its
the physician is to accomplish his task. employee gives rise to the presumption that the
defendant employer did not exercise the diligence of
INDEPENDENT CONTRACTOR a good father of a family in the selection and
General Rule: Master not generally liable for the fault supervision of its employees.
or negligence of an independent contractor
performing some work for him Ramos vs. C.O.L. Realty Corp. (2009): For the
employer to avoid the solidary liability for a tort
Exception: One who hires an independent contractor, committed by his employee, an employer must rebut
but controls the latter’s work is also responsible for the presumption by presenting adequate and
the independent contractor’s negligence. convincing proof that in the selection and supervision
of his employee, he or she exercised the care and
The existence of the employer-employee relationship diligence of a good father of a family. Employers
must first be established before an employer may be must submit concrete proof, including documentary
made vicariously liable under Art. 2180, CC. evidence, that they complied with everything that
was incumbent on them.
REQUISITES:
(1) Employee chosen by employer or through Necessity of presumption of negligence
another It is difficult for any person injured to prove the
(2) Services rendered in accordance with orders employer’s negligence as they would be proving
which employer has authority to give negative facts.
(3) Illicit act of employee was on the occasion or by
reason of the functions entrusted to him EMPLOYER NEED NOT BE ENGAGED IN BUSINESS OR
(4) Presumption of negligence INDUSTRY
Castilex Industrial Corp. vs. Vasquez (1999): The
To make the employer liable, it must be established phrase "even though the former are not engaged in
that the injurious or tortious act was committed at any business or industry" found in the fifth
the time that the employee was performing his paragraph should be interpreted to mean that it is
functions. not necessary for the employer to be engaged in any
business or industry to be liable for the negligence of
Filamer vs. IAC (1992): “Within the scope of their his employee who is acting within the scope of his
assigned task” in Art. 2180 includes any act done by assigned task.
an employee in furtherance of the interests, or for the
account of the employer at the time of the infliction A distinction must be made between the two
of the injury or damage. provisions to determine what is applicable. Both
provisions apply to employers: the fourth paragraph,
De Leon Brokerage vs. CA (1962): Employer need not to owners and managers of an establishment or
be riding in the vehicle to become liable for a driver’s enterprise; and the fifth paragraph, to employers in
negligence. Article 2184 mandating that the owner is general, whether or not engaged in any business or
only held solidarily liable if he is riding in the vehicle industry. The fourth paragraph covers negligent acts
at the time of the mishap, only applies to those of employees committed either in the service of the
owners of vehicles, who do not come within the branches or on the occasion of their functions, while
ambit of Article 2180 (as owners of an establishment the fifth paragraph encompasses negligent acts of
or enterprise.) employees acting within the scope of their assigned
task. The latter is an expansion of the former in both
employer coverage and acts included. Negligent acts
PAGE 330
of employees, whether or not the employer is applicant for employment as to his qualifications, his
engaged in a business or industry, are covered so experience and record of service.
long as they were acting within the scope of their
assigned task, even though committed neither in the Metro Manila Transit vs. CA (1998): The responsibility
service of the branches nor on the occasion of their of employers for the negligence of their employees in
functions. For, admittedly, employees oftentimes the performance of their duties is primary, that is, the
wear different hats. They perform functions which injured party may recover from the employers
are beyond their office, title or designation but which, directly, regardless of the solvency of their
nevertheless, are still within the call of duty. employees. The rationale for the rule on vicarious
liability of the employer for the torts of the
Under the fifth paragraph of Article 2180, whether or employees is that this is a required cost of doing
not engaged in any business or industry, an business. They are placed upon the employer
employer is liable for the torts committed by because, having engaged in the enterprise, which
employees within the scope of his assigned tasks. will on the basis of all past experience involve harm
But it is necessary to establish the employer- to others through the tort of employees, and sought
employee relationship; once this is done, the plaintiff to profit by it, it is just that he, rather than the
must show, to hold the employer liable, that the innocent plaintiff, should bear them; and because he
employee was acting within the scope of his is better able to absorb them, through prices, rates
assigned task when the tort complained of was or liability or insurance, and so to shift them to
committed. It is only then that the employer may find society, to the community at large.
it necessary to interpose the defense of due diligence
in the selection and supervision of the employee. Nature of Employer’s Liability
th th The employer is PRIMARILY and SOLIDARILY liable
Distinction between 4 and 5 paragraph of 2180 for the tortious act of the employee. The employer
4th paragraph 5th paragraph may recover from the employee, the amount it will
have to pay the offended party’s claim.
Liable persons Owners and Employers in
managers of an general, Such recovery, however, is NOT for the entire
establishment or an whether or not amount. To allow such would be as if to say that the
enterprise engaged in employer was not negligent.
business or
industry
Philtranco vs. CA (1997): The liability of the registered
Covered acts Negligent acts of Negligent acts owner and driver is solidary, primary and direct.
employees of employees
committed either in acting within Criminal Negligence
the service of the the scope of Fernando v. Franco: The vicarious liability of the
branches or on the their assigned employer for criminal negligence of his employee is
occasion of their task governed by RPC 103. Conviction of the employee
functions conclusively binds the employer. Defense of due
diligence in the selection and supervision of the
DEFENSE OF DILIGENCE IN SELECTION AND SUPERVISION employee is NOT available. The employer cannot
appeal the conviction.
Metro Manila Transit vs. CA (1993): Due diligence in
the SUPERVISION of employees includes the Soliman v. Tuazon (1992): Liability for illegal or
formulation of suitable rules and regulations for the harmful acts committed by security guards attaches
guidance of employees and the issuance of proper to the employer agency, not to the clients or
instructions intended for the protection of the public customers of such agency.
and persons with whom the employer has relations
through his or her employees and the imposition of Registered Owner Rule
necessary disciplinary measures upon employees in (1) The registered owner of the vehicle is primarily
case of breach or as may be warranted to ensure responsible to the public for whatever damage or
performance of acts as indispensable to the business injury the vehicle may have caused, even if he had
of and beneficial to their employee. already sold the same to someone else. The
policy is the easy identification of the owner who
Due diligence in the SELECTION of employees can be held responsible so as not to
require that the employer carefully examined the
PAGE 331
inconvenience or prejudice the third party injured. private corporation or individual. (Mendoza vs. De
(Cadiente v. Macas, 2008) Leon, 1916)
(2) This rule applies even if the vehicle is leased to The State agencies or subdivisions, in the pursuance
third persons. of proprietary functions, are akin to any other private
corporation. They may be sued for:
Remedy of the registered owner (1) Torts committed by them (Art. 2176) or
His liability is subject to his right of recourse against (2) Torts committed by their employees (art 2180).
the transferee or buyer.
As long as it is performing proprietary functions, it
THE STATE can be held liable for the acts of its employees, both
The State may not be sued without its consent. (Sec regular and special.
3, Art XVI, 1987 Constitution)
Notes:
The State is responsible in like manner when it acts (a) As a governmental entity: Liable only for acts of
through a special agent; but not when the damage its special agents
has been caused by the official to whom the task (b) As a corporate entity: May be held liable just as
done properly pertains, in which case what is any other employer for the acts of its employees
provided in Article 2176 shall be applicable. (Art (c) Special Agent: One duly empowered by a definite
2180, par. 6) order or commission to perform some act or one
charged with some definite purpose which give
Merritt vs. Government of the Philippine Islands (1960): rise to the claim; if he is a government employee
A special agent is one who receives a definite and or official, he must be acting under a definite and
fixed order or commission, foreign to the exercise of fixed order or commission, foreign to the exercise
the duties of his office if he is a special official. of the duties of his office
This concept does not apply to any executive agent JOINT TORTFEASORS
who is an employee of the active administration and The responsibility of two or more persons who are
who on his own responsibility performs the functions liable for quasi-delict is solidary. (Art. 2194)
which are inherent in and naturally pertain to his
DEFINITION OF “JOINT TORTFEASORS”
office.
Filipinas Broadcasting Network vs. AMEC-BCCM
The responsibility of the state is limited to that which (2005): They are all persons who command,
it contracts through a special agent, duly instigate, promote, encourage, advise, countenance,
empowered by a definite order or commission to cooperate in, aid or abet in the commission of a tort,
perform some act or charged with some definite or who approve of it after it is done, if done for their
purpose which gives rise to the claim. benefit.
General Rule: The State cannot be sued. APPLICABILITY OF THE PROVISION

The provision applies when there are 2 or more
Exceptions: persons who have participated in the commission of
(1) There is express legislative consent a single quasi-delict.
(2) The State filed the case (because here, it is
deemed to have waived its immunity.) The injury must be indivisible.
INSTANCES WHERE THE STATE GIVES ITS CONSENT TO BE NATURE OF LIABILITY

SUED Solidary – The person injured may sue all of them, or
(1) Art. 2180 (6) is an example of an express any number less than all, and they are all together
legislative consent. Here, the State assumes a solidarily liable for the whole damage.
limited liability for the acts of its special agents.
(2) Art. 2189 provides for state liability for damages
caused by defective condition of public works.
(3) Local Government Code provides for the liability
of local government units for wrongful exercise of
its proprietary (as opposed to its governmental)
functions. The latter is the same as that of a
PAGE 332
Acts of Omission and its Quezon City vs. Dacara (2005): Proximate cause is
Modalities determined from the facts of each case, upon a
combined consideration of logic, common sense,
Human conduct can be described alternatively as policy or precedent.
acts or omission. In relation to the existence of a
legal duty, conduct may be described in terms of DIFFERENTIATED FROM:
action or inaction, or “misfeasance” or REMOTE CAUSE
“nonfeasance.” Manila Electric v. Remonquillo: A prior and remote
cause cannot be made the basis of an action if such
Manresa; “liability for personal acts or omission is remote cause did nothing more than furnish the
founded on that indisputable principle of justice condition or give rise to the occasion by which the
recognized by all legislators that when a person by injury was made possible, if there intervened
his act or omission causes damage or prejudice to between such prior or remote cause and the injury a
another, a juridical relation is created by virtue of distinct, successive, unrelated, and efficient cause of
which the injured person acquires a right to be the injury, even though such injury would not have
indemnified and the person causing the damage is happened but for such condition or occasion.
charged with the corresponding duty of repairing the Concurrent Cause – Several causes producing the
damage. The reason for this is found in the obvious injury, and each is an efficient cause without which
truth that man should subordinate his acts to the the injury would not have happened. The injury is
precepts of prudence and if he fails to observe them attributed to any or all the causes, and recovery may
and cause damage to another, he must repair the be had against any or all of those responsible.
damage.”
Far Eastern Shipping v. CA: Where the concurrent or
successive negligent acts or omissions of two or
more persons, although acting independently, are in
Proximate Cause combination the direct and proximate cause of a
single injury to a third person, it is impossible to
CONCEPT OF PROXIMATE CAUSE determine in what proportion each contributed to
In order that civil liability for negligence may arise, the injury and either of them is responsible for the
there must be a direct causal connection between whole injury. Where their concurring negligence
the damage suffered by the plaintiff and the act or resulted in injury or damage to a third party, they
omission of the defendant. In other words, the act or become joint tortfeasors and are solidarily liable for
omission of the defendant must be the proximate the resulting damage.
cause of the loss or damage of the plaintiff.
INTERVENING CAUSE
DEFINITION
Phoenix Construction v. IAC: If the intervening cause
Bataclan v. Medina:
is one which in ordinary human experience is
PROXIMATE CAUSE: that cause, which, in natural and
reasonably to be anticipated, or one which the
continuous sequence, unbroken by any efficient
defendant has reason to anticipate under the
intervening cause, produces the injury, and without
particular circumstances. The defendant may be
which the result would not have occurred.
negligent, among other reasons, because of failure
to guard against it.
PROXIMATE LEGAL CAUSE: that acting first and
producing the injury, either immediately or by setting
There is an intervening cause combining with the
other events in motion, all constituting a natural and
defendant’s conduct to produce the result, and the
continuous chain of events, each having a close
defendant’s negligence consists in failure to protect
causal connection with its immediate predecessor,
the plaintiff against that very risk.
the final event in the chain immediately effecting the
injury as a natural and probable result of the cause
Foreseeable intervening forces are within the scope
which first acted, under such circumstances that the
of the original risk, and hence of the defendant’s
person responsible for the first event should, as an
negligence.
ordinary prudent and intelligent person, have
reasonable ground to expect at the moment of his
act or default that an injury to some person might
probably result therefrom
PAGE 333
EFFICIENT INTERVENING CAUSE unusual nature of the act resulting in injury to

Teague vs. Fernandez (1973): The test is not in the plaintiff that is the test of foreseeability, but whether
number of intervening causes, but in their character the result of the act is within the ambit of the
and in the natural and probable connection between hazards covered by the duty imposed upon the
the wrong done and the injurious consequence. defendant.
TESTS TO DETERMINE PROXIMATE CAUSE CAUSE V. CONDITION

CAUSE IN FACT: The first step is to determine whether
Many courts have sought to distinguish between the
the defendant’s conduct, in point of fact, was a factor active “cause” of the harm and the existing
in causing plaintiff’s damage. “conditions” upon which that cause operated. If the
defendant has created only a passive, static
EFFECTIVENESS OF THE CAUSE; “BUT FOR” RULE: whether
condition which made the damage possible, he is
such negligent conduct is a cause without which the said not to be liable.
injury would not have taken place (sine qua non rule)
or is the efficient cause which set in motion the chain Phoenix Construction vs. IAC (1987): The distinction
of circumstances leading to the injury. (Bataclan v. between cause and condition has already been
Medina) almost entirely discredited. Prosser and Keeton: So
far as the fact of causation is concerned, in the sense
SUBSTANTIAL FACTOR TEST: If the actor’s conduct is a of necessary antecedents which could have played
substantial factor in bringing about harm to another, an important part in producing the result, it is quite
the fact that the actor neither foresees nor should impossible to distinguish between active forces and
have foreseen the harm or the manner in which it passive situations, particularly since the latter are the
occurred, does not prevent him from being liable. result of other active forces which have gone before.
(Philippine Rabit v. IAC) (NOTE: active force is the cause while the passive
situation is the condition)
FORESEEABILITY TEST: Anticipation of consequence is a
necessary element in determining not only whether a It is not the distinction which is important but the
particular act or omission was negligent, but also nature of the risk and the character of the
whether the injury complained of was proximately intervening cause.
caused by such act or omission.
LEGAL CAUSE
NATURAL AND PROBABLE CONSEQUENCE TEST: A natural NATURAL AND PROBABLE CONSEQUENCES
consequence of an act is the consequence which A natural consequence of an act is the consequence
ordinarily follows it. A probable consequence is one which ordinarily follows it. A probable consequence
that is more likely to follow than fail to follow its is one that is more likely to follow than fail to follow
supposed cause but it need not be one which its supposed cause but it need not be one which
necessarily follows such cause. necessarily follows such cause.
ORDINARY AND NATURAL OR DIRECT CONSEQUENCE TEST: FORESEEABILITY

If negligence is a cause in fact of the injury, the Anticipation of consequence is a necessary element
liability of the wrongdoer extends to all the injurious in determining not only whether a particular act or
consequences. omission was negligent, but also whether the injury
complained of was proximately caused by such act or
HINDSIGHT TEST: A party guilty of negligence or omission.
omission of duty is responsible for all the
consequences which a prudent and experienced Jarencio: Where the particular harm sustained was
party, fully acquainted with all the circumstances reasonably foreseeable at the time of the
which in fact exist, whether they could have been defendant’s misconduct, his act or omission is the
ascertained by reasonable diligence, or not, would legal cause thereof.
have thought at the time of the negligent act as
reasonably possible to follow, if they had been Foreseeability is the fundamental basis of the law of
suggested to his mind. negligence. To be negligent, the defendant must
have acted or failed to act in such a way that an
ORBIT OF THE RISK TEST: If the foreseeable risk to ordinary reasonable man would have realized that
plaintiff created a duty which the defendant certain interests of certain persons were reasonably
breached, liability is imposed for any resulting injury subjected to a general but definite class of risks.
within the orbit or scope of such injury. It is not the
PAGE 334
DOCTRINE OF LAST CLEAR CHANCE Note:

Also known as: "doctrine of discovered peril” or (a) If plaintiff is the proximate cause: NO RECOVERY
“doctrine of supervening negligence” or can be made.
“humanitarian doctrine” (b) If plaintiff is NOT the proximate cause: Recovery
can be made but such will be mitigated.
The negligence of the plaintiff does not preclude a (c) If negligence of parties is equal in degree, then
recovery for the negligence of the defendant where it each bears his own loss.)
appears that the defendant by exercising reasonable
care and prudence, might have avoided injurious Pantranco vs. Baesa (1989): Last clear chance applies
consequences to the plaintiff notwithstanding the only if the person who allegedly had the last
plaintiff’s (own) negligence. (Sangco, Torts and opportunity to avert the accident was aware of the
Damages.) existence of peril or should, with exercise of due care,
have been aware of it.
Consolidated Bank v. CA: The doctrine of last clear
chance states that where both parties are negligent Ong vs. Metropolitan (1958): Last clear chance does
but the negligent act of one is appreciably later than not apply where the party charged is required to act
that of the other, or where it is impossible to instantaneously, and if the injury cannot be avoided
determine whose fault or negligence caused the loss, by the application of all means at hand after the peril
the one who had the last clear opportunity to avoid is or should have been discovered.
the loss but failed to do so, is chargeable with the
loss. The antecedent negligence of the plaintiff does
not preclude him from recovering damages caused Bustamante vs. CA (1991): The doctrine of last clear
by the supervening negligence of the defendant, who chance, as enunciated in Anuran v. Buno, applies in a
had the last fair chance to prevent the impending suit between the owners and drivers of colliding
harm by the exercise of due diligence. vehicles. It does not arise where a passenger
demands responsibility from the carrier to enforce its
contractual obligations. It will be inequitable to
Picart v. Smith: If both parties are found to be exempt the negligent driver of the jeepney and its
negligent; but, their negligence are not owners on the ground that the other driver was
contemporaneous, the person who has the last fair likewise guilty of negligence.
chance to avoid the impending harm and fails to do
so is chargeable with the consequences, without
reference to the prior negligence of the other party. Phoenix vs. IAC (1987): Doctrine of last clear chance
does not seem to have a role to play in a jurisdiction
ELEMENTS: where the common law concept of contributory
(1) Plaintiff’s own negligence puts himself in a negligence as an absolute bar to recovery by the
dangerous situation; plaintiff, has itself been rejected, as it has been in
(2) Defendant saw or discovered, by exercising 2179 of CC.
reasonable care, the perilous position of plaintiff;
(3) In due time to avoid injuring him CONTRIBUTORY NEGLIGENCE
(4) Despite notice and imminent peril, defendant Valenzuela v. CA: Conduct on the part of the injured
failed to employ care to avoid injury; and party, which contributed as a legal cause to the harm
(5) Injury of plaintiff resulted. he has suffered, which falls below the standard to
which he is required to conform for his own
COVERS SUCCESSIVE ACTS OF NEGLIGENCE protection.
Primary negligence of the defendant  contributory
negligence of the plaintiff  subsequent negligence MH Rakes v. Atlantic: Contributory negligence – does
of the defendant in failing to avoid the injury to the not defeat an action if it can be shown that the
plaintiff defendant might, by the exercise of reasonable care
and prudence, have avoided the consequences of the
INAPPLICABLE TO JOINT TORTFEASORS
injured party's negligence. Petitioner’s negligence
However, the doctrine cannot be extended into the contributed only to his own injury and not to the
field of joint tortfeasors as a test of whether only one principal occurrence — it was merely an element to
of them should be held liable to the injured person the damage caused upon him.
by reason of his discovery of the latter’s peril, and it
cannot be invoked as between defendants
concurrently negligent.
PAGE 335
WHEN IS IT A BAR TO RECOVERY? CLASSES OF INJURY

Only when the proximate cause is on the part of the INJURY TO PERSONS
plaintiff. Where the plaintiff contributes to the Art. 19. Every person must, in the exercise of his
principal occurrence, as one of its determining rights and in the performance of his duties, act with
factors, he cannot recover. Where, in conjunction justice, give everyone his due, and observe honesty
with the occurrence, he contributes only to his own and good faith.
injury, he may recover the amount that the
defendant responsible for the event should pay for
such injury, less a sum deemed a suitable equivalent Art. 20. Every person who, contrary to law, willfully
for his own imprudence. or negligently causes damage to another shall
indemnify the latter for the same.
Art. 21. Any person who willfully causes loss or injury

Legal Injury to another in a manner that is contrary to morals,
good customs or public policy shall compensate the
Injury is the illegal invasion of a legal right. latter for the damage.
Legal Right – A legal claim enforced by sanctions INJURY TO PROPERTY

Art. 23. Even when an act or event causing damage
Legal Duty – That which the law requires to be done to another’s property was not due to the fault or
to a determinate person negligence of the defendant, the latter shall be liable
for indemnity if through the act or event he was
ELEMENTS: benefited.
(1) Legal right in favor of a person
(2) Correlative legal duty on the part of another INJURY TO RELATIONS
(3) Wrong in the form of an act or omission or
Art. 26. Every person shall respect the dignity,
violation of said legal right and duty with
personality, privacy and peace of mind of his
consequent injury or damage
neighbors and other persons. The following and
similar acts, though they may not constitute a
Custodio vs. CA (1996): To warrant recovery of criminal offense, shall produce a cause of action for
damages, there must be both a right of action for a damages, prevention and other relief;
legal wrong inflicted by the defendant, and damage (1) Prying into the privacy of another’s residence;
resulting to the plaintiff therefrom. (2) Meddling with or disturbing the private life or
family relations of another;
The underlying basis for the award of tort damages is (3) Intriguing to cause another to be alienated from
the premise that an individual was injured in his friends;
contemplation of law. The law affords no remedy for (4) Vexing or humiliating another on account of his
damages resulting from an act which does not religious beliefs, lowly station in life, place of
amount to a legal injury or wrong. The act must not birth, physical defect, or other personal
only be hurtful, but wrongful (damnum et injuria). condition.
Amonoy vs. Gutierrez (2001): The exercise of a right Art. 33. In cases of defamation, fraud, and physical
ends when the right disappears, and it disappears injuries, a civil action for damages, entirely separate
when it is abused, especially to the prejudice of and distinct from the criminal action, may be
others. The mask of a right without the spirit of brought by the injured party. Such civil action shall
justice which gives it life, is repugnant to the modern proceed independently of the criminal prosecution,
concept of social law. It cannot be said that a person and shall require only a preponderance of evidence.
exercises a right when he unnecessarily prejudices
another xxx. Over and above the specific precepts of
positive law are the supreme norms of justice; and he
who violates them violates the law. For this reason it
is not permissible to abuse our rights to prejudice Intentional Torts
others.
CONCEPT
Under Article 2176, a person is also held liable for
intentional and malicious acts. The liability is
PAGE 336
founded on the indisputable principle of justice ASSAULT (GRAVE THREAT)

recognized by all legislations that when a person, by An intentional, unlawful offer of physical injury to
his act or omission, causes damage or prejudice to another by force unlawfully directed toward the
another, a juridical relation is created by virtue of person of another, under such circumstances as to
which the injured person acquires a right to be create a well-founded fear of imminent peril,
indemnified and the person causing the damage is coupled with the apparent present ability to
charged with the corresponding duty of repairing the effectuate the attempt if not prevented.
damage.
The wrong is committed when unreasonable fear is
PNB v. CA, 1978: (NCC 21-36) serve as catch all inspired in the plaintiff by threatening gestures,
provisions or dragnet clauses. They cover any especially when these are connected with unlawful,
imaginable tort action, because these articles were sinister, and wicked conduct on the part of the
intended to expand the concept of torts in out defendant.
jurisdiction. It grants adequate legal remedies for the
(otherwise) untold number of moral wrongs, which is FALSE IMPRISONMENT (ILLEGAL DETENTION)
impossible for human foresight to provide in our Art. 32. Any public officer or employee, or any private
statutes. individual, who directly or indirectly obstructs,
defeats, violates or in any manner impedes or
VIOLATIONS OF A PERSON’S SECURITY AND impairs any of the following rights and liberties of
PHYSICAL INJURIES (NCC 33) another person shall be liable to the latter for
BATTERY (PHYSICAL INJURY) damages:
The actual infliction of any unlawful or unauthorized (1) Freedom from arbitrary or illegal detention
violence on the person of another, irrespective of its xxx
degree.
INTERFERENCE WITH PERSONAL PROPERTY
The least touching of another in anger, or in any TRESPASS TO LAND
manner which amounts to an unlawful setting upon Any intentional use of another’s real property,
his person,” may subject one to an action for battery. without authorization and without a privilege by law
to do so, is actionable as a trespass without regard to
INTERESTS PROTECTED BY LAW: harm. (Prosser and Keeton, p. 70)
(1) Interest of the individual in freedom from bodily
harm or any impairment whatever of the physical Elements
integrity of the body An invasion
(2) Interest in freedom from offensive bodily touching (1) which interfered with the right of exclusive
although no actual harm is done. possession of the land, and
(2) which was a direct result of some act committed
Carandang vs. Santiago and Valenton (1955): by the defendant. (Prosser and Keeton, p. 67)
Defamation and fraud (in Art. 33) are used in their
ordinary sense because there are no specific TRESPASS TO CHATTELS
provisions in the Revised Penal Code using these Any direct and immediate intentional interference
terms as names of offenses defined therein, so that with a chattel in the possession of another. (Prosser
these two terms defamation and fraud must have and Keeton, p. 85)
been used not to impart to them any technical
meaning in the laws of the Philippines, but in their CONVERSION
generic sense. With these apparent circumstances in Major interferences with the chattel, or with the
mind, it is evident that the term “physical injuries” plaintiff’s rights in it, which are so serious, and so
could not have been used in its specific sense as a important, as to justify the forced judicial sale to the
crime defined in the Revised Penal Code, for it is defendant. (Prosser and Keeton, p. 90)
difficult to believe that the Code Commission would
have used terms in same article—some in this INTENTIONAL NON-PHYSICAL HARMS
general and others in its technical sense. In other Art. 26. Every person shall respect the dignity,
words, the term “physical injuries” should be personality, privacy and peace of mind of his
understood to mean bodily injury, not the crime of neighbors and other persons. The following and
physical injuries, because the terms used with the similar acts, though they may not constitute a
latter are general terms. criminal offense, shall produce a cause of action for
damages, prevention and other relief;
PAGE 337
(1) Prying into the privacy of another’s residence; In intentional infliction of mental distress, the
(2) Meddling with or disturbing the private life or gravamen of the tort is not the injury to plaintiff's
family relations of another; reputation, but the harm to plaintiff's mental and
(3) Intriguing to cause another to be alienated from emotional state. In libel, the gist of the action is the
his friends; injury to plaintiff's reputation. Reputation is the
(4) Vexing or humiliating another on account of his community's opinion of what a person is. In
religious beliefs, lowly station in life, place of intentional infliction of mental distress, the opinion
birth, physical defect, or other personal of the community is immaterial to the existence of
condition. the action although the court can consider it in
awarding damages. What is material is the
The principal rights protected under this provision disturbance on the mental or emotional state of the
are the following: plaintiff who is entitled to peace of mind.
(1) The right to personal dignity
(2) The right to personal security VIOLATION OF PRIVACY
(3) The right to family relations It is the right to be let alone, or to be free from
(4) The right to social intercourse unwarranted publicity, or to live without
(5) The right to privacy unwarranted interference by the public in matters in
(6) The right to peace of mind which the public is not necessarily concerned.
VIOLATION OF PERSONAL DIGNITY Reasonableness of Expectation of Privacy

In order to be actionable it is not necessary that the (The 2-prong test)
act constitutes a criminal offense. The remedy (1) Whether by one’s conduct, the individual has
afforded by the law is not only the recovery of exhibited an expectation of privacy
damages. “Prevention and other relief” is also (2) Whether this expectation is one that society
available. In other words, injunction and other recognizes and accepts as reasonable
appropriate reliefs may also be obtained by the
aggrieved party. Note:
Coverage of Art. 26 is not limited to those
St. Louis Realty Corporation vs. CA (Illustration of a enumerated therein, the enumeration being merely
“similar act”): The acts and omissions of the firm fall examples of acts violative of a person’s rights to
under Article 26. Persons who know the residence of dignity, personality, privacy and peace of mind. Other
Doctor Aramil were confused by the distorted, “similar acts” are also covered within the scope of
lingering impression that he was renting his the article.
residence from Arcadio or that Arcadio had leased it
from him. Either way, his private life was mistakenly Persons who can invoke privacy
and unnecessarily exposed. General Rule: The right to privacy may only be
invoked by natural persons. Juridical persons cannot
INFLICTION OF EMOTIONAL DISTRESS invoke this because the basis to this right is an injury
MVRS Publications vs. Islamic Da'wah Council (2003): to the feelings and sensibilities of the injured party,
Article 26 specifically applies to intentional acts and a corporation has none of those
which fall short of being criminal offenses. It itself
expressly refers to tortious conduct which "may not Exception: The right to privacy may be invoked along
constitute criminal offenses." The purpose is with the right against unreasonable searches and
precisely to fill a gap or lacuna in the law where a seizures.
person who suffers injury because of a wrongful act
not constituting a crime is left without any redress. General Rule: The right to privacy is purely personal in
Under Article 26, the person responsible for such act nature:
becomes liable for "damages, prevention and other (1) It can be invoked only by the person actually
relief." In short, to preserve peace and harmony in injured
the family and in the community, Article 26 seeks to (2) It is subject to a proper waiver
eliminate cases of damnum absque injuria in human (3) It ceases upon death
relations.
Exception: The privilege may be given to the heirs of
Consequently, the elements that qualify the same a deceased to protect his memory, but this privilege
acts as criminal offenses do not apply in determining exists for the benefit of the living. It enables the
responsibility for tortious conduct under Article 26. protection of their feelings, and prevents the
PAGE 338
violation of their own rights regarding the character DISTURBANCE OF PEACE OF MIND
and memory of the deceased. The disturbance of the mental and emotional
tranquility of the plaintiff by the defendant is a legal
Invasion of Privacy injury in itself and, therefore, a sufficient cause of
Types: action for damages, injunction, and other relief.
(1) Publication of embarrassing private facts – The
interest here is the right to be free from A person, however, cannot be held liable for
unwarranted publicity, wrongful publicizing of damages for the mental or emotional disturbance of
private affairs and activities, as these are outside the plaintiff which was due to the latter’s
the ambit of legitimate public concern. susceptibility to such disturbance, where the
defendant had no knowledge of such peculiar
Ayer v. Capulong (1988): Public figures enjoy a limited susceptibility. The tendency of the law is to secure an
right to privacy as compared to ordinary individuals. interest in mental comfort only to the extent of the
ordinary sensibilities of men.
(2) Intrusion upon plaintiff’s private affairs – This is
not limited to situations where the wrongdoer MALICIOUS PROSECUTION
physically trespasses into one’s property. Art. 2219. Moral damages may be recovered in the
(a) Generally, there is no invasion of privacy following and analogous cases:
when journalists report something that xxx
occurs in the public realm, except when the (8) Malicious prosecution
acts of the journalist are to an extent that it
constitutes harassment.
(b) RA 4200: it is illegal for any person not Art. 21. Any person who wilfully causes loss or injury
authorized by both parties to any private to another in manner that is contrary to morals, good
communication to secretly record such customs or public policy shall compensate the latter
communication. for the damage.
(c) Limitations to Right to Information v. Right
to Privacy: Malicious prosecution is the institution of any action
(i) Must be of public interest or proceeding either civil or criminal against another,
(ii) Must not be excluded by law maliciously and without probable cause.
(3) Publicity which puts one in a false light in the Elements:

public eye – To protect the interest of one in not (1) That the defendant was himself the prosecutor
being made or forced to appear before the public or that he instigated its commencement
in an objectionable false light or position. (2) That the action was finally terminated with an
acquittal
(3) That in bringing the action, the prosecutor acted
Tort of putting in false Defamation without probable cause
light (4) That he was actuated or impelled by legal
The embarrassment of a Concerns the reputational malice, that is, by improper and sinister motives.
person being portrayed harm to a person (Lao v. CA)
as something he is not
Drilon vs. CA (1997): Malicious Prosecution defined:
Statement should be Publication is satisfied An action for damages brought by one against whom
actually made in public even if communicated to a criminal prosecution, civil suit, or other legal
only one specific third proceeding has been instituted maliciously and
person without probable cause, after the termination of such
prosecution, suit or other proceeding in favor of the
(4) Commercial appropriation of likeness of image defendant herein. The gist of the action is the putting
of legal process in force, regularly, for the mere
It consists of appropriation, for the defendant’s purpose of vexation or injury.
benefit or advantage (ex. It was used in the
defendant’s advertisement), of the plaintiff’s name or Buenaventura vs. Domingo and Ignacio (1958): The
likeness (picture or portrait). provisions of the Civil Code in taking reference to
malicious prosecutions must necessarily imply that
the person to be held liable to pay moral damages
should have acted deliberately and with knowledge
PAGE 339
that his accusation of the person subject to such FRAUD OR MISREPRESENTATION (FORMERLY DECEIT)
malicious prosecution, was false and groundless. Salta vs. De Veyra (1982): Independent civil actions
are permitted to be filed separately regardless of the
xxx Proof and motive that the prosecution or result of the criminal action.
institution of the action was prompted by a sinister
design to vex and humiliate a person and to cast Samson vs. Daway (2004): Unfair competition under
dishonor and disgrace must be clearly and the Intellectual Property Code and fraud under Art.
preponderantly established to entitle the victims to 33 are independent actions. Art. 33 does not operate
damages and other rights granted by law; otherwise, as a prejudicial question to justify the suspension of
there would always be a civil action for damages the criminal cases at bar.
after every prosecution's failure to prove its cause
resulting in the consequent, acquittal of the accused SEDUCTION
therein. Sangco: Seduction is sexual intercourse with an
unmarried woman of chaste character whose
DEFAMATION, FRAUD AND PHYSICAL INJURIES consent was obtained through abuse of confidence
Art. 33. In case of defamation, fraud, and physical or through deceit.
injuries, a civil action for damages, entirely separate
and distinct from the criminal action, may be Seduction under the RPC (criminal seduction) is
brought by the injured party. Such civil action shall different from seduction under the NCC (civil
proceed independently of the criminal prosecution, seduction, Art. 21)
and shall require only a preponderance of evidence. (a) In criminal seduction, either qualified or simple,
the offended woman must be less than 18 years
of age.
DEFAMATION
(b) In civil seduction, the offended woman may be
Cojuangco vs. CA (1991): Separate civil action may be over 18 years of age.
consolidated with the criminal action.
Tanjanco vs. CA (1966): The essential feature is
MVRS vs. Islamic Da'wah (2003): Defamation is that seduction, that in law is more than mere sexual
which tends to injure reputation or diminish esteem, intercourse, or a breach of a promise of marriage; it
respect, good will, or confidence of the plaintiff, or connotes essentially the idea of deceit, enticement,
excite derogatory feelings about him. It must be superior power or abuse of confidence on the part of
personal. (What is definitive is not the level of hurt, the seducer to which the woman has yielded.
but the effect of the statement on the reputation or
standing of the person.) To constitute seduction there must in all cases be
some sufficient promise or inducement and the
Arafiles vs. Philippine Journalists (2004): In actions for woman must yield because of the promise or other
damages for libel, it is axiomatic that the published inducement. If she consents merely from carnal lust
work alleged to contain libelous material must be and the intercourse is from mutual desire, there is no
examined and viewed as a whole. seduction.
The article must be construed in its entirety including UNJUST DISMISSAL

the headlines, as they may enlarge, explain, or The employer’s right to dismiss his employee differs
restrict or be enlarged, explained or strengthened or from, and should not be confused with the manner in
restricted by the context. Whether or not it is which the right is exercised. When the manner in
libelous, depends upon the scope, spirit and motive which the company exercised its right to dismiss was
of the publication taken in its entirety. abusive, oppressive or malicious, it is liable for
damages.
A publication claimed to be defamatory must be
read and construed in the sense in which the readers Quisaba vs. Sta. Ines-Melale Veneer & Plywood (1974):
to whom it is addressed would ordinarily understand Although the acts complained of seemingly appear
it. to constitute "matters involving employee-employer
relations" as Quisaba's dismissal was the severance
DEFENSES: of a pre-existing employee-employer relation, his
(1) Absence of elements complaint is grounded not on his dismissal per se as
(2) Privilege in fact he does not ask for reinstatement or
PAGE 340
backwages, but on the manner of his dismissal and and not by reason of the wrongful conduct of the
the consequent effects of such dismissal. defendant, there is no liability on the defendant.
However, if the defendant interferes and by his
The case at bar is intrinsically concerned with a civil wrongful conduct prevents a reconciliation
(not a labor) dispute; it has to do with an alleged between the spouses, or destroys the possibility
violation of Quisaba's rights as a member of society, thereof, the defendant is liable for alienation of
and does not involve an existing employee-employer affection.
relation within the meaning of section 2(1) of
Presidential Decree No. 21. The complaint is thus (2) Loss of affection or consortium
properly and exclusively cognizable by the regular
courts of justice, not by the National Labor Relations Note: Complete absence of affection between
Commission. the spouses is not a defense.
Note: (3) Causal connection between such conduct and

The foregoing decision thus states that where the loss
employee does not seek reinstatement or expressly
or impliedly accepts the employer’s right to Tenchavez vs. Escaño (1965): There is no evidence
terminate the contract of employment but questions that the parents of Vicenta, out of improper motives,
the manner in which said right was exercised and aided and abetted her original suit for annulment, or
predicates thereon his claim for moral and her subsequent divorce; she appears to have acted
exemplary damages, the claim is one for tort under independently, and being of age, she was entitled to
the Civil Code and not one arising from employer- judge what was best for her and ask that her
employee relation under the Labor Code even if he decisions be respected. Her parents, in so doing,
also demands in the action therefor payment of certainly cannot be charged with alienation of
termination pay which unquestionably derives from affections in the absence of malice or unworthy
their prior employer-employee relation. motives, which have not been shown, good faith
being always presumed until the contrary is proved.
INTERFERENCE WITH RELATIONS
An interference with the continuance of unimpaired LIABILITY OF PARENTS, GUARDIANS OR KIN
interests founded upon the relation in which the The law distinguishes between the right of a parent
plaintiff stands toward one or more third persons. to interest himself in the marital affairs of his child
(Prosser and Keeton, p. 915) and the absence of rights in a stranger to
intermeddle in such affairs. However, such
KINDS distinction between the liability of parents and that
(1) Family relations of strangers is only in regard to what will justify
(2) Social relations interference. A parent is liable for alienation of
(3) Economic relations affections resulting from his own malicious conduct,
(4) Political relations as where he wrongfully entices his son or daughter to
leave his or her spouse, but he is not liable unless he
FAMILY RELATIONS acts maliciously, without justification and from
The three causes of action enumerated below are unworthy motives. He is not liable where he acts and
offenses against marital relations. advises his child in good faith with respect to his
child's marital relations in the interest of his child as
ALIENATION OF AFFECTION he sees it, the marriage of his child not terminating
This is a cause of action in favor of a husband against his right and liberty to interest himself in, and be
one who wrongfully alienates the affection of his extremely solicitous for, his child's welfare and
wife, depriving him of his conjugal rights to her happiness even where his conduct and advice
consortium, that is, her society, affection, and suggest or result in the separation of the spouses or
assistance. the obtaining of a divorce or annulment, or where he
acts under mistake or misinformation, or where his
Elements: advice or interference are indiscreet or unfortunate,
(1) Wrongful conduct of the defendant: intentional although it has been held that the parent is liable for
and malicious enticing of a spouse away from consequences resulting from recklessness. He may in
the other spouse good faith take his child into his home and afford
him or her protection and support, so long as he has
Note: Where the alienation or separation of the not maliciously enticed his child away, or does not
spouses is caused by the plaintiff’s own conduct maliciously entice or cause him or her to stay away,
PAGE 341
from his or her spouse. This rule has more frequently who seeks to collect indemnity for damages resulting
been applied in the case of advice given to a married from deprivation of her domestic services must prove
daughter, but it is equally applicable in the case of such services.
advice given to a son.
Furthermore, inasmuch as a wife's domestic
LOSS OF CONSORTIUM assistance and conjugal companionship are purely
Lilius vs. Manila Railroad Company (1934): The personal and voluntary acts which neither of the
plaintiff Aleko E. Lilius also seeks to recover the sum spouses may be compelled to render, it is necessary
of P2,500 for the loss of what is called Anglo-Saxon for the party claiming indemnity for the loss of such
common law "consortium" of his wife, that is, "her services to prove that the person obliged to render
services, society and conjugal companionship", as a them had done so before he was injured and that he
result of personal injuries which she had received would be willing to continue rendering them had he
from the accident now under consideration. not been prevented from so doing.
In the case of Goitia vs. Campos Rueda, this court,
interpreting the provisions of the Civil Marriage Law CRIMINAL CONVERSATION (ADULTERY)
of 1870, in force in these Islands with reference to the Interference with the marital relations by committing
mutual rights and obligations of the spouses, adultery with one of the spouses. This is obvious
contained in articles 44-48 thereof, said as follows: enough in the case of rape but also applies where
the adulterous spouse consented to or initiated the
The above quoted provisions of the Law of Civil intercourse. (Prosser and Keeton, p. 917)
Marriage and the Civil Code fix the duties and
obligations of the spouses. The spouses must be SOCIAL RELATIONS
faithful to, assist, and support each other. The
husband must live with and protect his wife. The MEDDLING WITH OR DISTURBING FAMILY RELATIONS
wife must obey and live with her husband and Art. 26. Every person shall respect the dignity,
follow him when he changes his domicile or personality, privacy and peace of mind of his
residence, except when he removes to a foreign neighbors and other persons. The following and
country. . . . similar acts, though they may not constitute a
criminal offense, shall produce a cause of action for
Therefore, under the law and the doctrine of this damages, prevention and other relief;
court, one of the husband's rights is to count on his xxx
wife's assistance. This assistance comprises the 2) Meddling with or disturbing the private life or
management of the home and the performance of family relations of another;
household duties, including the care and education
of the children and attention to the husband upon Developed as an offshoot of the action for enticing
whom primarily devolves the duty of supporting the away a servant and depriving the master of the
family of which he is the head. When the wife's proprietary interest in [the servant’s] services until
mission was circumscribed to the home, it was not there has been a gradual shift of emphasis away
difficult to assume, by virtue of the marriage alone, from “services” and toward a recognition of more
that she performed all the said tasks and her intangible elements in the domestic relations, such
physical incapacity always redounded to the as companionship and affection. (Prosser and
husband's prejudice inasmuch as it deprived him of Keeton, p. 916)
her assistance. However, nowadays when women, in
their desire to be more useful to society and to the INTRIGUING TO CAUSE ANOTHER TO BE ALIENATED FROM
nation, are demanding greater civil rights and are HIS FRIENDS
aspiring to become man's equal in all the activities of A person who committed affirmative acts intended to
life, commercial and industrial, professional and alienate the existing friendship of one with his
political, many of them spending their time outside friends is liable for damages. A man is a social being
the home, engaged in their businesses, industry, and for being so, he needs friends to socialize with
profession and within a short time, in politics, and and to depend upon in case of need. To alienate him
entrusting the care of their home to a housekeeper, wrongfully or with malice from his friends is to cause
and their children, if not to a nursemaid, to public or him suffering for which he is entitled to damages.
private institutions which take charge of young
children while their mothers are at work, marriage
has ceased to create the presumption that a woman
complies with the duties to her husband and
children, which the law imposes upon her, and he
PAGE 342
ECONOMIC RELATIONS Permissible competition

There is a privilege to interfere with prospects of
INTERFERENCE WITH CONTRACTUAL RELATIONS advantageous economic relations of others when:
Art 1314. Any third person who induces another to (1) The defendant’s purpose is justifiable, and
violate his contract shall be liable for damages to the (2) He employs no means which may be regarded as
other contracting party. unfair.
Prohibited competition
Gilchrist vs. Cuddy (1915): Everyone has a right to In order to qualify as “unfair,” it must have 2
enjoy the fruits of his enterprise. He has no right to characteristics:
be protected from competition, but he has the right (1) It must involve an injury to a trade or rival
to be free from malicious and wanton interference. If (2) It must involve acts which are characterized as
the injury is a result of competition, it is a case of “contrary to good conscience,” or “shocking to
damnum absque injuria, unless superior right by judicial sensibilities,” or otherwise unlawful
contract is interfered with.
Note:
Injunction is the proper remedy to prevent wrongful Jarencio: Unfair competition dealt with in Art. 28 is
interference with contracts by strangers, where other different from the unfair competition under Sec. 29
legal remedies are insufficient and the resulting of RA 166. Unfair competition under Sec. 29 of Rep.
injury is irreparable. Act 166 consists in giving the same general
appearance to the goods manufactured or dealt in or
So Ping Bun vs. CA (1999): Bad faith/Malice is the services rendered by one person as the goods or
required to make the defendant liable for DAMAGES services of another who has already acquired a
in cases of tortuous interference. public goodwill for such goods or services. Unfair
competition under Art. 28 of the Civil Code refers to
Elements of Interference unfair competition in agricultural, commercial or
(1) Existence of a valid contract; industrial enterprises or in labor through the use of
(2) Knowledge of the third person of the existence force, intimidation, deceit, machination or any other
of such contract; and unjust, oppressive or highhanded method. Unfair
(3) Interference without legal justification or excuse. competition under the Civil Code covers a broader
area than Rep. Act 166.
Lagon vs. CA (2005): If there is no bad faith, there is
no tortious interference; Actual knowledge of the POLITICAL RELATIONS
contract is not required so long as there are facts
leading one to investigate. VIOLATION OF RIGHT TO SUFFRAGE (NCC, ART. 32)
Art 32. Any public officer or employee, or any private
Proper business interest provides a legal justification individual, who directly or indirectly obstructs,
to negate the presence of the third element. defeats, violates or in any manner impedes or
impairs any of the following rights and liberties of
UNFAIR COMPETITION another person shall be liable to the latter for
damages:
Art. 28. Unfair competition in agricultural,
(1) Freedom of religion
commercial or industrial enterprises or in labor
(2) Freedom of speech
through the use of force, intimidation, deceit,
(3) Freedom to write for the press or to maintain a
machination or any other unjust, oppressive or
periodical publication
highhanded method shall give rise to a right of
(4) Freedom from arbitrary or illegal detention
action by the person who thereby suffers damage.
(5) Freedom of suffrage
(6) The right against deprivation of property without
Free competition in agricultural, commercial or due process of law
industrial enterprises and in labor is essential in a (7) The right to just compensation when property is
democracy and should be encouraged. Monopolies, taken for public use
generally speaking, are prejudicial to public interest. (8) The right to equal protection of the laws
However, the right of free competition is not (9) The right to be secure in one’s person, house,
unlimited. papers and effects against unreasonable
searches and seizures
(10) The liberty of abode and of changing the same
PAGE 343
(11) The right to privacy of communication and required. If the violation of the civil or political rights
correspondence constitutes a crime and a criminal action is instituted
(12) The right to become a member of associations the civil action is also deemed instituted with the
and societies for purposes not contrary to law criminal action unless the same is reserved.
(13) The right to take part in a peaceable assembly
and petition the government for redress of Cojuangco vs. CA (1999): The purpose of article 32 is
grievances to remind us that basic rights are immutable. Thus,
(14) The right to be free from involuntary servitude in absence of bad faith or malice is not a defense.
any form
(15) The right of the accused against excessive bail Vinzons-Chato vs. Fortune (2007): A public officer
(16) The right of the accused to be heard by himself may be sued under Art. 32 even if his acts were not
and counsel, to be informed of the nature and so tainted with malice, as long as there is a violation
the cause of the accusation against him, to have of a constitutional right. Its precise object is to put an
a speedy and public trial, to meet the witnesses end to official abuse, done on the plea of good faith.
face to face, to have compulsory process to
secure the attendance of witnesses on is behalf;
(17) Freedom form being compelled to be a witness
against one’s self, or from being forced to
confess his guilt, or from being induced by a
Negligence
promise of immunity or reward to make such
confession, except when the person confessing Art. 1173. The fault or negligence of the obligor
becomes a State witness. consists in the omission of that diligence which is
(18) Freedom from excessive fines, or cruel and required by the nature of the obligation and
unusual punishment, unless the same is corresponds with the circumstances of the persons,
imposed or inflicted in accordance with a statute of the time and of the place. When negligence shows
which has not been judicially declared bad faith, the provisions of Articles 1171 and 2201,
unconstitutional; paragraph 2, shall apply.
(19) Freedom of access to the courts
If the law or contract does not state the diligence
In any of the cases referred to in this article, whether which is to be observed in the performance, that
or not the defendant’s act or omission constitutes a which is expected of a good father of a family shall
criminal offense, the aggrieved party has a right to be required.
commence an entirely separate and distinct civil
action for damages, and for other relief. Such civil ELEMENTS
action shall proceed independently of any criminal (1) Legal duty
prosecution (if the latter be instituted) and may be (2) Breach
proved by a preponderance of evidence. (3) Causation
(4) Damages
The indemnity shall include moral damages.
Exemplary damages may also be adjudicated. Layugan vs. IAC (1988): Negligence is the omission to
do something which a reasonable man, guided by
The responsibility herein set forth is not demandable those considerations which ordinarily regulate the
from a judge unless his act or omission constitutes a conduct of human affairs, would do, or the doing of
violation of the Penal code or any other penal something which a prudent and reasonable man
statute. would not do.
VIOLATION OF OTHER POLITICAL RIGHTS (FREEDOM OF TEST OF NEGLIGENCE

SPEECH, PRESS, ASSEMBLY AND PETITION, ETC.) Philippine National Railways vs. Brunty (2006): Did
Jarencio: Article 32 of the Civil Code holds any public defendant, in doing the alleged negligent act, use
officer, employee or private individual civilly liable for that reasonable care and caution which an ordinarily
the violation of civil liberties, political liberties and prudent person would have used in the same
other basic rights under the Constitution. The situation? If not, the person is guilty of negligence.
aggrieved party may recover actual, moral and The law, in effect, adopts the standard supposed to
exemplary damages and other relief. The civil action be supplied by the imaginary conduct of the discreet
is separate and distinct and shall proceed pater familias of the Roman law.
independently of a criminal prosecution if one is
instituted. Only a preponderance of evidence is
PAGE 344
embarrassment if not financial loss and perhaps

GOOD FATHER OF A FAMILY (BONUS PATER even civil and criminal litigation.
FAMILIAS)
A standard man does not mean an ideal or perfect The point is that as a business affected with public
man, but an ordinary member of the community. He interest and because of the nature of its functions,
is usually spoken of as an ordinarily reasonable, the bank is under obligation to treat the accounts of
careful, and prudent man. its depositors with meticulous care, always having in
mind the fiduciary nature of their relationship.
WHAT CONSTITUTES THE CONDUCT OF A PRUDENT MAN IN
A GIVEN SITUATION? STANDARD OF CARE OF CHILDREN
Picart vs. Smith (1918): Conduct determined in the Taylor vs. Manila Railroad (1910): Children must be
light of human experience and in view of the facts expected to act upon childlike instincts and impulses
involved in the particular case. Abstract speculations and others chargeable with a duty of care and
cannot be of much value here; instead, reasonable caution toward them must take precautions
men govern their conduct by the circumstances accordingly. If they leave exposed to the observation
which are known before them. They are not of children anything which would be tempting to
supposed to be omniscient of the future. them, and which they in their immature judgment
might naturally suppose they were at liberty to play
STANDARD OF CARE with, they should expect that liberty to be taken. (But
Picart vs. Smith (1918): Test: Did the defendant in the child in this case was still negligent because of
doing the alleged negligent act use that reasonable his experience).
care and caution which an ordinarily prudent man
would have used in the same situation? If not, then he Jarco v. CA (1999): The rule, therefore, is that a child
is negligent. Negligence in a given case is not under nine years of age must be conclusively
determined by reference to the personal judgment of presumed incapable of contributory negligence as a
the actor in the situation before him, but is matter of law. The presumption of lack of
determined in the light of human experience and the discernment or incapacity for negligence in the case
facts involved in the particular case. of a child over nine but under fifteen years of age is a
rebuttable one.
Conduct is said to be negligent when a prudent man
in the position of the tortfeasor would have foreseen
Ylarde vs. Aquino (1988): The degree of care required
that an effect harmful to another was sufficiently
to be exercised must vary with the capacity of the
probable to warrant his foregoing the conduct or
person endangered to care for himself. A minor should
guarding against its consequences.
not be held to the same degree of care as an adult,
but his conduct should be judged according to the
Note: average conduct of persons of his age and
Only the KIND of injury needs to be foreseen, NOT experience: that degree of care ordinarily exercised
the actual specific injury. by children of the same age, capacity, discretion,
knowledge and experience under the same or similar
STANDARD OF CARE REQUIRED OF BANKS
circumstances.
Philippine Bank of Commerce vs. CA (1997): In the
case of banks, however, the degree of diligence STANDARD OF CARE OF EXPERTS/PROFESSIONALS
required is more than that of a good father of a
Culion vs. Philippine (1930): When a person holds
family. Considering the fiduciary nature of their
himself out as being competent to do things
relationship with their depositors, banks are duty
requiring professional skill, he will be held liable for
bound to treat the accounts of their clients with the
negligence if he fails to exhibit the care and skill of
highest degree of care.
one ordinarily skilled in the particular work which he
attempts to do.
Simex International (Manila), Inc. v. CA: In every case,
the depositor expects the bank to treat his account
Cruz vs. CA (1997): Whether or not a physician has
with the utmost fidelity, whether such account
committed an "inexcusable lack of precaution" in the
consists only of a few hundred pesos or of millions.
treatment of his patient is to be determined
xxx A blunder on the part of the bank, such as the
according to the standard of care observed by other
failure to duly credit him his deposits as soon as they
members of the profession in good standing under
are made, can cause the depositor not a little
similar circumstances bearing in mind the advanced
PAGE 345
state of the profession at the time of treatment or selection or supervision of the plaintiff’s fellow-
the present state of medical science. worker.
IN CASE OF INSANE PERSONS Amedo vs. Rio (1954): By jumping into the sea, the
Art. 2180. …Guardians are liable for damages caused employee failed to exercise even slight care and
by the minors or incapacitated persons who are diligence and displayed a reckless disregard of the
under their authority and live in their company… safety of his person. His death was caused by his
notorious negligence. Notorious negligence has
Art. 2182. If the minor or insane person causing been held to be tantamount to gross negligence
damage has no parents or guardian, the minor or which is want of even slight care and diligence.
insane person shall be answerable with his own
property in an action against him where a guardian EVIDENCE
ad litem shall be appointed. QUANTUM OF PROOF IN QUASI-DELICT VS. QUANTUM OF
PROOF IN BREACH OF CONTRACT
US vs. Baggay (1911): A lunatic or insane person who, Calalas vs. CA: In quasi-delict, the negligence or fault
in spite of his irresponsibility on account of the should be clearly established because it is the basis
deplorable condition of his deranged mind, is still of action, whereas in breach of contract, the action
reasonably and justly liable with his property for the can be prosecuted merely by proving the existence of
consequences of his acts. a contract and the fact that the obligor, in this case a
common carrier, failed to transport his passenger
safely to his destination.
EMERGENCY RULE OR SUDDEN PERIL DOCTRINE
Valenzuela vs. CA (1996): An individual, who suddenly PRESUMPTION OF NEGLIGENCE
finds himself in a situation of danger and is required
to act without much time to consider the best means Art. 2184. In motor vehicle mishaps, the owner is
that may be adopted to avoid the impending danger, solidarily liable with his driver, if the former, who was
is not guilty of negligence if he fails to undertake in the vehicle, could have, by the use of due
what subsequently and upon reflection may appear diligence, prevented the misfortune. It is disputable
to be a better solution, unless the emergency was presumed that the driver was negligent, if he had
brought by his own negligence. been found guilty of reckless driving or violating
traffic regulations at least twice within the next
preceding two months.
UNREASONABLE RISK OR HARM
Art 1711. Owners of enterprises and other employers
are obliged to pay compensation for the death of or Art. 2185. Unless there is proof to the contrary, it is
injuries to their laborers, workmen, mechanics or presumed that a person driving a motor vehicle has
other employees even though the event may have been negligent if at the time of the mishap, he was
been purely accidental or entirely due to fortuitous violating any traffic regulation.
cause, if the death or personal injury arose out of and
in the course of employment. The employer is also Art. 2188. There is prima facie presumption of
liable for compensation if the employee contracts negligence if the death or injury results from his
any illness or disease caused by such employment or possession of dangerous weapons or substances,
as a result of the nature of the employment. If the such as firearms and poison, except when the use or
mishap was due to the employee’s own notorious possession thereof is indispensable in his occupation
negligence, or voluntary act, or drunkenness, the or business.
employer shall not be liable for compensation.
When the employee’s lack of due care contributed to Art. 1735. In all cases other than those mentioned in
his death or injury, the compensation shall be Nos. 1, 2, 3, 4, and 5 of the preceding article
equitably reduced (calamity, act of public enemy in war, act of owner of
the goods, character of the goods, order of
Art. 1712. If the death or injury is due to the competent public authority), if the goods are lost
negligence of a fellow-worker, the latter and the destroyed or deteriorated, common carriers are
employer shall be solidarily liable for compensation. presumed to have been at fault or to have acted
If a fellow-worker’s intentional or malicious act is the negligently, unless they prove that they observed
only cause of the death or injury, the employer shall extraordinary diligence as required under Art. 1733.
not be answerable, unless it should be shown that
the latter did not exercise due diligence in the
PAGE 346
PRESUMED NEGLIGENCE OR NEGLIGENCE PER SE accident or has the best opportunity of ascertaining
Teague vs. Fernandez (1973): Violation of a statute or it and that the plaintiff has no such knowledge, and
ordinance constitutes negligence as a matter of law therefore is compelled to allege negligence in
or negligence per se because non-observance of general terms and to rely upon the proof of the
what the law provides as a suitable precaution is happening of the accident in order to establish
failure to observe that care which an ordinarily negligence.
prudent man would observe.
Note: For the res ipsa loquitur doctrine to apply, it
When the standard of care is fixed by law, failure must appear that the injured party had no
conform to such standard is negligence, negligence knowledge as to the cause of the accident, or that
per se or negligence in and of itself, in the absence of the party to be charged with negligence has superior
a legal excuse. knowledge or opportunity for explanation of the
accident.
RES IPSA LOQUITUR
The doctrine of res ipsa loquitur (“the thing speaks DEFENSES
for itself”) is a rule of evidence (not of substantive DUE DILIGENCE
law) peculiar to the law of negligence. Art. 2180. The obligation imposed by Article 2176 is
demandable not only for one’s own acts or
3 conditions for applicability: omissions, but also for those of persons for whom
F.F. Cruz vs. CA (1988): Res ipsa loquitur is applicable one is responsible.
when: xxx
(1) The thing causing the injury is under the control Par. 8. The responsibility treated of in this article
of the defendant or his servant; shall cease when the persons herein mentioned
(2) In the ordinary cause of things, the accident does prove that they observed all the diligence of a good
not happen if those who have control used proper father of a family to prevent damage.
care;
(3) In the absence of explanation from the
defendant, a presumption of negligence results. Ramos vs. PEPSI (1967): The presumption of
negligence on the part of the master or employer,
either in the selection of servant/employee or in the
Layugan vs. IAC 1988): Where the thing which causes supervision, when an injury is caused by the
injury is shown to be under the management of the negligence of a servant/employee may be rebutted if
defendant, and the accident is such as in the the employer shows to the satisfaction of the court
ordinary course of things does not happen if those that in the selection and supervision, he has
who have the management use proper care, it exercised the care and diligence of a good father of a
affords reasonable evidence, in the absence of an family
explanation by the defendant, that the accident
arose from want of care.
Metro Manila vs. CA (1993): The defense of due
diligence is plausible when defendant has presented
Ramos vs. CA (1999): The injury itself, taken together enough evidence to overcome the presumption of
with the circumstances, raises the presumption of negligence. It is not enough that it is alleged.
negligence that the defendant must meet with an
explanation.
ACTS OF PUBLIC OFFICERS
Elements Vinzons-Chato vs. Fortune (2008): When what is

(1) The accident is such that it would not have involved is a duty owing to the public in general, an
happened in the ordinary course of events individual cannot have a cause of action against the
without the negligence of someone; public officer although he may have been injured by
(2) The defendant exercises control and the action or inaction of the officer, except when the
management. individual suffers a particular or special injury.
(3) There is no contributory negligence on the part of
the plaintiff. ACCIDENT OR FORTUITOUS EVENT
Art. 1174. Except in cases expressly specified by the
DM Consunji vs. CA (2001): The res ipsa loquitur law, or when it is otherwise declared by stipulation,
doctrine is based in part upon the theory that the or when the nature of the obligation requires the
defendant in charge of the instrumentality which assumption of risk, no person shall be seen
causes the injury either knows the cause of the
PAGE 347
responsible for those events which, could not injury, the damage is regarded as damnum absque
foreseen, or which, though foreseen, were inevitable. injuria.
Elements AUTHORITY OF LAW

Juntilla vs. Fontanar (1985): The elements of caso Art. 5. Acts executed against the provisions of
fortuito are: mandatory or prohibitory laws shall be void, except
(1) The cause of the unforeseen and unexpected when the law itself authorizes their validity.
occurrence, or of the failure of the debtor to
comply with his obligation, must be independent Art. 11. (RPC) The following do not incur any criminal
of the human will; liability:
(2) It must be impossible to foresee the event or if it (5) Any person who acts in the fulfillment of a duty
can be foreseen, it must be impossible to avoid; or in the lawful exercise of a right or office
(3) The occurrence must be such as to render it (8) Any person who acts in obedience to an order
impossible for the debtor to fulfill his obligation issued by a superior for some lawful purpose
in a normal manner; and
(4) The obligor must be free from any participation in
ASSUMPTION OF RISK (VOLENTI NON FIT INJURA)
the aggravation of the injury resulting to the
creditor.
General rule:
One who voluntarily assumed the risk of injury from a
Hernandez vs. COA (1984): The robbery that
known danger is debarred from recovery. A plaintiff
happened to him cannot be said to be the result of
who, by his conduct, brought himself within the
his imprudence and negligence. This was
operation of the maxim, “volenti non fit injuria” (that
undoubtedly a fortuitous event covered by the said
to which a person assents is not presumed in law an
provisions, something that could not have been
injury), cannot recover on the basis of the
reasonably foreseen although it could have
defendant’s negligence.
happened.
One who knows, appreciates, and deliberately
DAMNUM ABSQUE INJURIA
exposes himself to a danger assumes the risk
Custodio vs. CA (1996): Right to recover damages thereof.
does not arise from the mere fact that the plaintiff
suffered losses. To warrant the recovery of damages, Where the defense of assumption of risk is based on
there must be both a right of action for a legal wrong this principle, it negates negligence or liability on the
inflicted by the defendant, and damage resulting to part of the defendant, even though his conduct
the plaintiff therefrom. Wrong without damage, or would otherwise have constituted actionable
damage without wrong, does not constitute a cause negligence, and without regard to the fact that the
of action, since damages are merely part of the plaintiff may have acted with due care.
remedy allowed for the injury caused by a breach or
wrong. The defense bars recovery without regard to whether
the plaintiff’s conduct was reasonable, because, in
Injury Damage Damages theory, the plaintiff’s acceptance of the risk has
wiped out the defendant’s duty, and as to the
Illegal Loss, hurt, harm Recompense or plaintiff the defendant’s negligence is not a legal
invasion of a resulting from compensation wrong.
legal right the injury awarded
Afialda vs. Hisole (1958): It is the caretaker's business
Damnum absque injuria. There can be damage to try to prevent the animal from causing injury or
without injury in those instances in which the loss or damage to anyone, including himself. It was a risk he
harm was not the result of a violation of a legal duty. voluntarily assumed.
In order that the law will give redress for an act Requisites
causing damage, that act must be not only hurtful, (1) That the plaintiff had actual knowledge of the
but wrongful. There must be damnum et injuria. If, danger;
as may happen in many cases, a person sustains (2) That he understood and appreciated the risk from
actual damage, that is, harm or loss to his person or the danger
property, without sustaining any legal injury, that is, (3) That he voluntarily exposed himself to such risk
an act or omission which the law does not deem an
PAGE 348
Exception: Martial Law including the arrest, detention and/or

Ilocos Norte vs. CA (1989): A person is excused from trial of the plaintiff, the same must be brought within
the force of the rule (volenti non fit injuria), that one (1) year.
when he voluntarily assents to a known danger he
must abide by the consequences, if an emergency is Art. 1150. The time for prescription for all kinds of
found to exist or if the life or property of another is in actions, when there is no special provision which
peril or when he seeks to rescue his endangered ordains otherwise, shall be counted from the day
property. they may be brought.
LAST CLEAR CHANCE
Prescription periods:
The doctrine is also known as:
(a) years for QD
(1) The doctrine of discovered peril;
(b) 1 year for defamation
(2) The doctrine of supervening negligence;
(3) Humanitarian doctrine
Kramer vs. CA (1989): It is clear that the prescriptive
A negligent defendant is liable to a negligent period must be counted from the time of the
plaintiff, or even to a plaintiff who has been grossly commission of an act or omission violative of the
negligent in placing himself in peril, if the defendant, right of the plaintiff, which is the time when the
aware of the plaintiff’s peril, had in fact a later cause of action arises.
opportunity than the plaintiff to avoid the accident.
Allied Banking vs. CA (1989): Relations Back Doctrine
Picart vs. Smith (1918): The person who has the last (footnote 17 of Allied Banking case): That principle of
fair chance to avoid the impending harm and fails to law by which an act done at one time is considered
do so is chargeable with the consequences, without by a fiction of law to have been done at some
reference to the prior negligence of the other party. antecedent period.
Bustamante vs. CA (1991): Negligence of the plaintiff WAIVER

does not preclude a recovery for the negligence of
the defendant where it appears that the defendant, Art. 6. Rights may be waived, unless the waiver is
by exercising reasonable care and prudence, might contrary to law, public order, public policy, morals, or
have avoided injurious consequences to the plaintiff good customs or prejudicial to a third person with a
notwithstanding the plaintiff’s negligence. right recognized by law.
Consolidated Bank vs. CA (2003): This is a case of Art. 1171. Responsibility arising from fraud is
culpa contractual where neither contributory demandable in all obligations. Any waiver of an
negligence nor last clear chance will exonerate action for future fraud is void.
defendant from liability. (NOTE: This means that
Last Clear Chance is not a defense in culpa DOUBLE RECOVERY – NCC ART. 2177
contractual.) Art. 2177. Responsibility for fault or negligence under
the preceding article is entirely separate and distinct
PRESCRIPTION – NCC, ART. 1144, 1146, AND 1150 from the civil liability arising from negligence under
Art. 1144. The following actions must be brought the Penal Code. But the plaintiff cannot recover
within ten years from the time the right of action damages twice for the same act or omission of the
accrues: defendant.
(1) Upon a written contract;
(2) Upon an obligation created by law; Art. 100 (RPC). Civil liability of a person guilty of
(3) Upon a judgment. felony. - Every person criminally liable for a felony is
also civilly liable.
Art. 1146. The following actions must be instituted
within four years: Art. 2177 distinguishes 2 kinds of negligence:
(1) Upon an injury to the rights of the plaintiff; (1) Civil and
(2) Upon a quasi-delict; (2) Criminal.
The same negligence causing damage may produce
However, when the action arises from or out of any liability arising from crime, if the act or omission is
act, activity, or conduct of any public officer involving punished by the RPC, or may create an action for
the exercise of powers or authority arising from quasi-delict under the NCC.
PAGE 349
ACTIONS AVAILABLE TO VICTIMS OF NEGLIGENCE Question

(1) An action to enforce the civil liability arising from As a result of a collision between a taxicab owned by
culpa criminal under Art. 100 of the RPC A and another taxicab owned by B, X, a passenger of
(2) An action for quasi-delict under Art. 2176-2194 of the first taxicab, was seriously injured. X later filed a
the NCC. criminal action against both drivers.
The only limitation is that the injured party cannot (a) Is it necessary for X to reserve his right to institute
recover twice for the same act or omission. a civil action for damages against both taxicab
owners before he can file a civil action for damages
EFFECT OF ACQUITTAL OF THE ACCUSED ON HIS CIVIL against them? Why?
LIABILITY
Art. 29. When the accused in a criminal prosecution (b) May both taxicab owners raise the defense of due
is acquitted on the ground that his guilt has not been diligence in the selection and supervision of their
proved beyond reasonable doubt, a civil action for drivers to be absolved from liability for damages to
damages for the same act or omission may be X? Reason.
instituted. Such action requires only a
preponderance of evidence. Upon motion of the Suggested Answer:
defendant, the court may require the plaintiff to file a It depends. If the separate civil action is to recover
bond to answer for damages in case the complaint damages arising from the criminal act, reservation is
should be found to be malicious. necessary. If the civil action against the taxicab
owners is based on culpa contractual or on quasi-
The acquittal of the accused in the criminal case will delict, there is no need for reservation.
not necessarily exonerate him from civil liability.
It depends. If the civil action is based on quasi-delict,
The judgment of acquittal does not necessarily the taxicab owners may raise the defense of
extinguish the civil liability of the accused EXCEPT: diligence of a good father of a family in the selection
(1) When it declares that the facts from which the and supervision of the driver; if the action against
civil liability might arise did not exist; them is based on culpa contractual or civil liability
(2) When it declares that the accused is not the arising from a crime, they cannot raise the defense.
author of the crime;
(3) When the judgment expressly declares that the Alternative Answer:
liability is only civil in nature; No such reservation is necessary. Under Section 1
(4) Where the civil liability is not derived or based on Rule 111 of the 2000 Rules on Criminal Procedure,
the criminal act of which the accused was what is “deemed instituted” with the criminal action
acquitted; is only the action to recover civil liability arising from
(5) Where the acquittal is based on reasonable the crime or ex delicto. All the other civil actions
doubt; under Articles 32, 33, 34, 2176 of the New Civil Code
(6) Where the civil action has prescribed. are no longer “deemed instituted,” and may be filed
separately and prosecuted independently even
NO RESERVATION IS REQUIRED IN THE CRIMINAL CASE FOR
without any reservation in the criminal action
THE FILING OF CIVIL ACTION ARISING FROM QUASI-DELICT
(Section 3, Rule 111, 2000 Rules on Criminal
Procedure). The failure to make a reservation of the
Rule 111, Sec. 3, ROC. When civil action may criminal action is not a waiver of the right to file a
proceeded independently. — In the cases provided separate and independent civil action based on
for in Articles 32, 33, 34 and 2176 of the Civil Code of these articles of the New Civil Code (Casupanan vs.
the Philippines, the independent civil action may be Laroya, G.R. No. 145391, August 26, 2002)
brought by the offended party. It shall proceed
independently of the criminal action and shall
require only a preponderance of evidence. In no case,
however, may the offended party recover damages
twice for the same act or omission charged in the Special Liability in Particular
criminal action.
Cases
In some cases tort law imposes liability on
defendants who are neither negligent nor guilty of
intentional wrongdoing. Known as Strict Liability, or
liability without fault, this branch of torts seeks to
PAGE 350
regulate those activities that are useful and (n) "Consumer" means a natural person who is a
necessary but that create abnormally dangerous purchaser, lessee, recipient or prospective purchaser,
risks to society. lessor or recipient of consumer products, services or
credit.
PRODUCTS LIABILITY
Art. 2187. Manufacturers and processors of (as) "Manufacturer" means any person who
foodstuffs, drinks, toilet articles and similar goods manufactures, assembles or processes consumer
shall be liable for death or injuries caused by any products, except that if the goods are manufactured,
noxious or harmful substances used, although no assembled or processed for another person who
contractual relation exists between them and the attaches his own brand name to the consumer
consumers. products, the latter shall be deemed the
manufacturer. In case of imported products, the
Under the foregoing provision, liability is not made to manufacturer's representatives or, in his absence, the
depend upon fault or negligence of the importer, shall be deemed the manufacturer.
manufacturer or processor. The provision likewise
dispensed with any contractual relation between the Article 92. Exemptions. – If the concerned
manufacturer and the consumer, thereby clearly department finds that for good or sufficient reasons,
implying that liability is imposed by law as a matter full compliance with the labeling requirements
of PUBLIC POLICY. otherwise applicable under this Act is impracticable
or is not necessary for the adequate protection of
Proof of negligence under this provision is not public health and safety, it shall promulgate
necessary; as such, traditional contract and warranty regulations exempting such substances from these
defenses as (1) lack of privity; (2) lack of reliance on a requirements to the extent it deems consistent with
warranty; (3) lack of notice to the defendant of the the objective of adequately safeguarding public
breach of warranty; and (4) disclaimer of implied health and safety, and any hazardous substance
warranties are INAPPLICABLE. which does not bear a label in accordance with such
regulations shall be deemed mislabeled hazardous
REQUISITES OF LIABILITY
substance.
(1) Defendant is a manufacturer or possessor of
foodstuff, drinks, toilet articles and similar Article 93. Grounds for Seizure and Condemnation of
goods; Mislabeled Hazardous Substances. –
(2) He used noxious or harmful substances in the (a) Any mislabeled hazardous substance when
manufacture or processing of the foodstuff, introduced into commerce or while held for sale
drinks or toilet articles consumed or used by the shall be liable to be proceeded against and
plaintiff; condemned upon order of the concerned
(3) Plaintiff’s death or injury was caused by the department in accordance with existing
product so consumed or used; and procedure for seizure and condemnation of
(4) The damages sustained and claimed by the articles in commerce: Provided, That this Article
plaintiff and the amount thereof. shall not apply to a hazardous substance
intended for export to any foreign country if:
BURDEN OF PROOF
(1) it is in a package labeled in accordance with
The burden of proof that the product was in a the specifications of the foreign purchaser;
defective condition at the time it left the hands of the (2) it is labeled in accordance with the laws of
manufacturer and particular seller is upon the the foreign country;
INJURED PLAINTIFF. (3) it is labeled on the outside of the shipping
package to show that it is intended for
WHO MAY RECOVER
export; and
Although the article used the term “consumer”, such (4) it is so exported,
term includes a “user” and “purchaser” of the
injuriously defective food product or toilet article. The (b) any hazardous substance condemned under this
person who may recover NEED NOT BE THE Article shall after entry of order of condemnation
PURCHASER of the foodstuff or toilet article. be disposed of by destruction or sale as the
concerned department may direct, and the
CONSUMER ACT –RA 7394, SECS. 92-107 (CH. 1)
proceeds thereof, if sold, less the legal cost and
charges, shall be paid into the treasury of the
Consumer Act Provisions Philippines; but such hazardous substance shall
Article 4. Definition of Terms. not be sold under any order which is contrary to
PAGE 351
the provisions of this Act; Provided, That, after

entry of the order and upon the payment of the (b) Any person who violates the provisions of Article
costs of such proceedings and the execution of a 81 to 83 for the first time shall be subject to a
good and sufficient bond conditioned that such fine of not less than Two hundred pesos
hazardous substance shall not be sold or (P200.00) but not more than Five thousand
disposed of contrary to the provisions of this Act, pesos (P5,000.00) or by imprisonment of not
the concerned department may direct that such less than one (1) month but not more than six (6)
hazardous substance be delivered to or retained months or both, at the discretion of the court. A
by the owner thereof for destruction or for second conviction under this paragraph shall
alteration to comply with the provisions of this also carry with it the penalty of revocation of
Act under the supervision of an officer or business permit and license.
employee duly designated by the concerned
department. The expenses for such supervision Article 96. Implementing Agency. – The Department
shall be paid by the person obtaining release of of Trade and Industry shall enforce the provisions of
the hazardous substance under bond. this Chapter and its implementing rules and
regulations.
(c) all expenses in connection with the destruction
provided for in paragraphs (a) and (b) of this Article 97. Liability for the Defective Products. – Any
Article and all expenses in connection with the Filipino or foreign manufacturer, producer, and any
storage and labor with respect to such importer, shall be liable for redress, independently of
hazardous substance shall be paid by the owner fault, for damages caused to consumers by defects
or consignee, and default in such payment shall resulting from design, manufacture, construction,
constitute a lien against any importation by such assembly and erection, formulas and handling and
owner or consignee. making up, presentation or packing of their products,
as well as for the insufficient or inadequate
Article 94. Labeling Requirements of Cigarettes. – All information on the use and hazards thereof.
cigarettes for sale or distribution within the country
shall be contained in a package which shall bear the A product is defective when it does not offer the
following statement or its equivalent in Filipino: safety rightfully expected of it, taking relevant
"Warning" Cigarette Smoking is Dangerous to Your circumstances into consideration, including but not
Health". Such statement shall be located in limited to:
conspicuous place on every cigarette package and (a) presentation of product
shall appear in conspicuous and legible type in (b) use and hazards reasonably expected of it;
contrast by typography, layout or color with other (c) the time it was put into circulation.
printed matter on the package. Any advertisement of
cigarette shall contain the name warning as A product is not considered defective because
indicated in the label. another better quality product has been placed in
the market. The manufacturer, builder, producer or
Article 95. Penalties. – importer shall not be held liable when it evidences:
(a) Any person who shall violate the provisions of (a) that it did not place the product on the market;
Title III, Chapter IV of this Act, or its (b) that although it did place the product on the
implementing rules and regulations, except market such product has no defect;
Articles 81 to 83 of the same Chapter, shall be (c) that the consumer or a third party is solely at
subject to a fine of not less than Five hundred fault.
pesos (P500.00) but not more than Twenty
thousand pesos (P20,000.00) or imprisonment Article 98. Liability of Tradesman or Seller. – The
of not less than three (3) months but not more tradesman/seller is likewise liable, pursuant to the
than two (2) years or both, at the discretion of preceding article when:
the court: Provided, That, if the consumer (a) it is not possible to identify the manufacturer,
product is one which is not a food, cosmetic, builder, producer or importer;
drug, device or hazardous substance, the (b) the product is supplied, without clear
penalty shall be a fine of not less than Two identification of the manufacturer, producer,
hundred pesos (P200.00) but not more than builder or importer;
Five thousand pesos (P5,000.00) or (c) he does not adequately preserve perishable
imprisonment of not less than one (1) month but goods. The party making payment to the
not more than one (1) year or both, at the damaged party may exercise the right to recover
discretion of the court. a part of the whole of the payment made
PAGE 352
against the other responsible parties, in The consumer may make immediate use of the
accordance with their part or responsibility in the alternatives under the second paragraph of this
cause of the damage effected. Article when by virtue of the extent of the
imperfection, the replacement of the imperfect parts
Article 99. Liability for Defective Services. – The may jeopardize the product quality or characteristics,
service supplier is liable for redress, independently of thus decreasing its value.
fault, for damages caused to consumers by defects
relating to the rendering of the services, as well as If the consumer opts for the alternative under sub-
for insufficient or inadequate information on the paragraph (a) of the second paragraph of this Article,
fruition and hazards thereof. and replacement of the product is not possible, it
may be replaced by another of a different kind, mark
The service is defective when it does not provide the or model: Provided, That any difference in price may
safety the consumer may rightfully expect of it, result thereof shall be supplemented or reimbursed
taking the relevant circumstances into consideration, by the party which caused the damage, without
including but not limited to: prejudice to the provisions of the second, third and
(a) the manner in which it is provided; fourth paragraphs of this Article.
(b) the result of hazards which may reasonably be
expected of it; Article 101. Liability for Product Quantity
(c) the time when it was provided. Imperfection. – Suppliers are jointly liable for
imperfections in the quantity of the product when, in
A service is not considered defective because of the due regard for variations inherent thereto, their net
use or introduction of new techniques. content is less than that indicated on the container,
packaging, labeling or advertisement, the consumer
The supplier of the services shall not be held liable having powers to demand, alternatively, at his own
when it is proven: option:
(a) that there is no defect in the service rendered; a) the proportionate price
(b) that the consumer or third party is solely at b) the supplementing of weight or measure
fault. differential;
c) the replacement of the product by another of
Article 100. Liability for Product and Service the same kind, mark or model, without said
Imperfection. – The suppliers of durable or imperfections;
nondurable consumer products are jointly liable for d) the immediate reimbursement of the amount
imperfections in quality that render the products paid, with monetary updating without prejudice
unfit or inadequate for consumption for which they to losses and damages if any.
are designed or decrease their value, and for those
resulting from inconsistency with the information The provisions of the fifth paragraph of Article 99
provided on the container, packaging, labels or shall apply to this Article.
publicity messages/advertisement, with due regard
to the variations resulting from their nature, the The immediate supplier shall be liable if the
consumer being able to demand replacement to the instrument used for weighing or measuring is not
imperfect parts. gauged in accordance with official standards.
If the imperfection is not corrected within thirty (30) Article 102. Liability for Service Quality Imperfection.
days, the consumer may alternatively demand at his – The service supplier is liable for any quality
option: imperfections that render the services improper for
a) the replacement of the product by another of consumption or decrease their value, and for those
the same kind, in a perfect state of use; resulting from inconsistency with the information
b) the immediate reimbursement of the amount contained in the offer or advertisement, the
paid, with monetary updating, without prejudice consumer being entitled to demand alternatively at
to any losses and damages; his option:
c) a proportionate price reduction. a) the performance of the services, without any
additional cost and when applicable;
The parties may agree to reduce or increase the term b) the immediate reimbursement of the amount
specified in the immediately preceding paragraph; paid, with monetary updating without prejudice
but such shall not be less than seven (7) nor more to losses and damages, if any;
than one hundred and eighty (180) days. c) a proportionate price reduction.
PAGE 353
Reperformance of services may be entrusted to duly NUISANCE

qualified third parties, at the supplier's risk and cost. Art. 694. A nuisance is any act, omission,
establishment, business, condition of property, or
Improper services are those which prove to be anything else which:
inadequate for purposes reasonably expected of (1) Injures or endangers the health or safety of
them and those that fail to meet the provisions of others; or
this Act regulating service rendering. (2) Annoys or offends the senses; or
(3) Shocks, defies or disregards decency or morality;
Article 103. Repair Service Obligation. – When or
services are provided for the repair of any product, (4) Obstructs or interferes with the free passage of
the supplier shall be considered implicitly bound to any public highway or street, or any body of
use adequate, new, original replacement parts, or water; or
those that maintain the manufacturer's technical (5) Hinders or impairs the use of property.
specifications unless, otherwise authorized, as
regards to the latter by the consumer.
Art. 696. Every successive owner or possessor of
property who fails or refuses to abate a nuisance in
Article 104. Ignorance of Quality Imperfection. – The
that property started by a former owner or possessor
supplier's ignorance of the quality imperfections due
is liable therefor in the same manner as the one who
to inadequacy of the products and services does not
created it.
exempt him from any liability.
Article 105. Legal Guarantee of Adequacy. – The Art. 697. The abatement of a nuisance does not
legal guarantee of product or service adequacy does preclude the right of any person injured to recover
not require an express instrument or contractual damages for its past existence.
exoneration of the supplier being forbidden.
Art. 698. Lapse of time cannot legalize any nuisance,
Article 106. Prohibition in Contractual Stipulation. – whether public or private.
The stipulation in a contract of a clause preventing,
exonerating or reducing the obligation to indemnify
LIABILITY FOR NEGLIGENCE VS. LIABILITY FOR NUISANCE
for damages effected, as provided for in this and in
Negligence Nuisance
the preceding Articles, is hereby prohibited, if there is
Basis
more than one person responsible for the cause of
Liability is based on lack Liability attaches
the damage, they shall be jointly liable for the
redress established in the pertinent provisions of this of proper care and regardless of the skill
diligence exercised to avoid the
Act. However, if the damage is caused by a
injury
component or part incorporated in the product or
service, its manufacturer, builder or importer and the Condition of the Act
person who incorporated the component or part are Act complained of is There is continuing harm
jointly liable. already done which being suffered by the
Article 107. Penalties. – Any person who shall violate caused injury to the aggrieved party by the
any provision of this Chapter or its implementing plaintiff maintenance of the act
rules and regulations with respect to any consumer or thing which
product which is not food, cosmetic, or hazardous constitutes the nuisance
substance shall upon conviction, be subject to a fine Remedy
of not less than Five thousand pesos (P5,000.00) Action for damages Abatement
and by imprisonment of not more than one (1) year or
both upon the discretion of the court. NUISANCE PER SE
It is recognized as a nuisance under any and all
In case of juridical persons, the penalty shall be circumstances because it constitutes a direct menace
imposed upon its president, manager or head. If the to public health and safety and, for that reason, may
offender is an alien, he shall, after payment of fine be abated summarily under the undefined law of
and service of sentence, be deported without further necessity.
deportation proceedings.
To become a nuisance per se, the thing must, of
itself, because of its inherent qualities, without
complement, be productive of injury, or, by reason of
PAGE 354
the matter of its use or exposure, threaten or be breach of the peace, or doing unnecessary injury. But
dangerous to life or property. it is necessary:
(1) That demand be first made upon the owner or
NUISANCE PER ACCIDENCE possessor of the property to abate the nuisance;
It becomes a nuisance depending upon certain (2) That such demand has been rejected;
conditions and circumstances, and its existence (3) That the abatement be approved by the district
being a question of fact, it cannot be abated without health officer and executed with the assistance
due hearing thereon in a tribunal authorized to of the local police; and
decide whether such a thing does in law constitute a (4) That the value of the destruction does not
nuisance. exceed three thousand pesos.
PUBLIC NUISANCE PRIVATE NUISANCE

Art. 695. Nuisance is either public or private. A public It is one which violates only private rights and
nuisance affects a community or neighborhood or produces damage to but one or a few persons, and
any considerable number of persons, although the cannot be said to be public.
extent of the annoyance, danger or damage upon
individuals may be unequal. A private nuisance is Art. 705. The remedies against a private nuisance
one that is not included in the foregoing definition. are:
A public nuisance is the doing of or the failure to do (2) Abatement, without judicial proceedings.
something that injuriously affects safety, health, or
morals of the public, or works some substantial Art. 706. Any person injured by a private nuisance
annoyance, inconvenience or injury to the public. It may abate it by removing, or if necessary, by
causes hurt, inconvenience, or damage to the public destroying the thing which constitutes the nuisance,
generally, or such part of the public as necessarily without committing a breach of the peace or doing
comes in contact with it in the exercise of a public or unnecessary injury. However, it is indispensable that
common right. the procedure for extrajudicial abatement of a public
nuisance by a private person be followed.
Art. 699. The remedies against a public nuisance are:
(1) A prosecution under the Penal Code or any local
Art. 707. A private person or a public official
ordinance: or
extrajudicially abating a nuisance shall be liable for
damages:
(3) Abatement, without judicial proceedings.
(1) If he causes unnecessary injury; or
(2) If an alleged nuisance is later declared by the
Art. 700. The district health officer shall take care courts to be not a real nuisance.
that one or all of the remedies against a public
nuisance are availed of. ATTRACTIVE NUISANCE
Contributory negligence of a minor does not bar
Art. 701. If a civil action is brought by reason of the recovery, where his immaturity and natural curiosity
maintenance of a public nuisance, such action shall impelled him to act to his injury; but discretion
be commenced by the city or municipal mayor. shown by the child is the decisive factor.
Art. 702. The district health officer shall determine Del Rosario vs. Manila Electric Co. (1932): It is doubtful
whether or not abatement, without judicial whether contributory negligence can properly be
proceedings, is the best remedy against a public imputed to the deceased, owing to his immature
nuisance. years and the natural curiosity which a child would
feel to do something out of the ordinary, and the
mere fact that the deceased ignored the caution of a
Art. 703. A private person may file an action on companion of the age of 8 years does not, in our
account of a public nuisance, if it is specially injurious opinion, alter the case.
to himself.
Hidalgo Enterprises vs. Balandan (1952): One who
Art. 704. Any private person may abate a public maintains on his premises dangerous
nuisance which is specially injurious to him by instrumentalities or appliances of a character likely
removing, or if necessary, by destroying the thing to attract children in play, and who fails to exercise
which constitutes the same, without committing a ordinary care to prevent children from playing
PAGE 355
therewith or resorting thereto, is liable to a child of (18) Freedom from excessive fines, or cruel and
tender years who is injured thereby, even if the child unusual punishment, unless the same is
is technically a trespasser in the premises. imposed or inflicted in accordance with a statute
which has not been judicially declared
The principle reason for the doctrine is that the unconstitutional;
condition or appliance in question although its (19) Freedom of access to the courts
danger is apparent to those of age, is so enticing or
alluring to children of tender years as to induce them In any of the cases referred to in this article, whether
to approach, get on or use it, and this attractiveness or not the defendant’s act or omission constitutes a
is an implied invitation to such children criminal offense, the aggrieved party has a right to
commence an entirely separate and distinct civil
VIOLATION OF CONSTITUTIONAL RIGHTS action for damages, and for other relief. Such civil
VIOLATION OF CIVIL LIBERTIES action shall proceed independently of any criminal
Art 32. Any public officer or employee, or any private prosecution (if the latter be instituted) and may be
individual, who directly or indirectly obstructs, proved by a preponderance of evidence.
impairs any of the following rights and liberties of The indemnity shall include moral damages.
another person shall be liable to the latter for Exemplary damages may also be adjudicated.
damages:
(1) Freedom of religion The responsibility herein set forth is not demandable
(2) Freedom of speech from a judge unless his act or omission constitutes a
(3) Freedom to write for the press or to maintain a violation of the Penal code or any other penal
periodical publication statute.
(4) Freedom from arbitrary or illegal detention
(5) Freedom of suffrage Aberca, et al. vs. Ver, et al. (1988): It is obvious that
(6) The right against deprivation of property without the purpose of the above codal provision (Art. 32) is
due process of law to provide a sanction to the deeply cherished rights
(7) The right to just compensation when property is and freedoms enshrined in the Constitution. Its
taken for public use message is clear; no man may seek to violate those
(8) The right to equal protection of the laws sacred rights with impunity. In times of great
(9) The right to be secure in one’s person, house, upheaval or of social and political stress, when the
papers and effects against unreasonable temptation is strongest to yield — borrowing the
searches and seizures words of Chief Justice Claudio Teehankee — to the
(10) The liberty of abode and of changing the same law of force rather than the force of law, it is
(11) The right to privacy of communication and necessary to remind ourselves that certain basic
correspondence rights and liberties are immutable and cannot be
(12) The right to become a member of associations sacrificed to the transient needs or imperious
and societies for purposes not contrary to law demands of the ruling power. The rule of law must
(13) The right to take part in a peaceable assembly prevail, or else liberty will perish.
and petition the government for redress of
grievances VIOLATIONS OF RIGHTS COMMITTED BY PUBLIC OFFICERS
(14) The right to be free from involuntary servitude in Art. 27. Any person suffering material or moral loss
any form because a public servant or employee refuses or
(15) The right of the accused against excessive bail neglects, without just cause, to perform his official
(16) The right of the accused to be heard by himself duty may file an action for damages and other relief
and counsel, to be informed of the nature and against the latter, without prejudice to any
the cause of the accusation against him, to have disciplinary administrative action that may be taken.
a speedy and public trial, to meet the witnesses
face to face, to have compulsory process to Art. 32, supra.
secure the attendance of witnesses on is behalf;
(17) Freedom form being compelled to be a witness
Dereliction of Duty
against one’s self, or from being forced to
Amaro vs. Samanguit: Requisites:
confess his guilt, or from being induced by a
(1) Defendant is a public officer charged with a
promise of immunity or reward to make such
performance of a duty in favor of the plaintiff;
confession, except when the person confessing
(2) He refused or neglected without just cause to
becomes a State witness.
perform the duty;
PAGE 356
(3) Plaintiff sustained material or moral loss as a defective roads or streets belong to the province, city
consequence of such non-performance; or municipality. What said article requires is that the
(4) The amount of such damages, if material. province, city or municipality have either "control or
supervision" over said street or road.
Coverage
Applies only to acts of nonfeasance or the OWNERS OF MOTOR VEHICLES
nonperformance of some acts which a person is Art. 2184. In motor vehicle mishaps, the owner is
obliged or has responsibility to perform. solidarily liable with his driver, if the former, who was
in the vehicle, could have, by the use of the due
The duty of the public servant must be ministerial in diligence, prevented the misfortune. It is disputably
character. If the duty is discretionary, he is not liable presumed that a driver was negligent, if he had been
unless he acted in a notoriously arbitrary manner. found guilty of reckless driving or violating traffic
regulations at least twice within the next preceding
Defense of Good Faith is not available two months.
The reason of its unavailability is that an officer is
under constant obligation to discharge the duties of If the owner was not in the motor vehicle, the
his office, and it is not necessary to show that his provisions of article 2180 are applicable.
failure to act was due to malice or willfulness.
Art. 2185. Unless there is proof to the contrary, it is
Art. 34. When a member of a city or municipal police presumed that a person driving a motor vehicle has
force refuses or fails to render aid or protection to been negligent if at the time of the mishap, he was
any person in case of danger to life or property, such violating any traffic regulation.
peace officer shall be primarily liable for damages,
and the city or municipality shall be subsidiarily
responsible therefor. The civil action herein Art. 2186. Every owner of a motor vehicle shall file
recognized shall be independent of any criminal with the proper government office a bond executed
proceedings, and a preponderance of evidence shall by a government-controlled corporation or office, to
suffice to support such action. answer for damages to third persons. The amount of
the bond and other terms shall be fixed by the
Art. 34 covers a situation where: competent public official.
(a) There is danger to the life or property of person;
(b) A member of a city or municipal police force who The owner is SOLIDARILY liable with the driver for
is present in the scene refused or failed to render motor vehicle mishaps when:
aid or protection to the person; and (1) The owner was IN the vehicle at the time, AND
(c) Damages are caused wither to the person and/or (2) The owner could have, by the use of due
property of the victim. diligence, prevented the misfortune.
Nature of liability Owner of the vehicle

(1) Of the police officer – Primary “Owner” shall mean the actual legal owner of the
(2) City or municipality - Susidiary motor vehicle, in whose name such vehicle is duly
registered with the LTO.
The defense of having observed the diligence of a
good father of a family to prevent the damage is not Registration of motor vehicles is required not
available to the city/municipality. because it is the operative act which transfers
ownership in vehicles, but because it is the means by
PROVINCES, CITIES, AND MUNICIPALITIES which the owner can be identified so that if any
accident occurs, or damage or injury is caused in the
Art. 2189. Provinces, cities and municipalities shall be
operation of the vehicle, responsibility can be fixed.
liable for damages for the death of, or injuries
suffered by, any person by reason of the defective
As held in Vargas vs. Langcay, “the registered
condition of roads, streets, bridges, public buildings,
owner/operator of a passenger vehicle is jointly and
and other public works under their control or
severally liable with the driver for damages incurred
supervision.
by passengers or third persons as a consequence of
injuries or death sustained in the operation of said
Ownership of Roads, etc. is not required vehicles. Regardless of who the actual owner of a
City of Manila vs. Teotico (1968): It is not necessary for vehicle is, the operator of record continues to be the
the liability therein established to attach that the operator of the vehicle as regards the public and
PAGE 357
third persons and as such is directly and primarily accident. And as far as perception is concerned,
responsible for the consequences incident to its absent a minimum level imposed by law, a maneuver
operation, so that in contemplation of law, such that appears to be fraught with danger to one
owner/operator of record is the employer of the passenger may appear to be entirely safe and
driver, the actual operator and employer being commonplace to another. Were the law to require a
considered merely as his agent.” uniform standard of perceptiveness, employment of
professional drivers by car owners who, by their very
The registered owner of a motor vehicle is primarily inadequacies, have real need of drivers' services,
liable for the damage or injury caused to another, would be effectively proscribed.
but he has a right to be indemnified by the real
owner of the amount he was required to pay Duavit vs. CA (1989): An owner of a vehicle cannot be
(Tamayo vs, Aquino) This rule applies both to private held liable for an accident involving the said vehicle if
and to common carriers with respect to their the same was driven without his consent or
passengers. knowledge and by a person not employed by him.
Note: PROPRIETOR OF BUILDING OR STRUCTURE
If the owner was NOT inside the vehicle, Art. 2180
applies. Art. 2190. The proprietor of a building or structure is
responsible for the damages resulting from its total
The presumption is AGAINST the owner of the motor or partial collapse, if it should be due to the lack of
vehicle. He has the burden of proving due diligence. necessary repairs.
Thus, once a driver is proven negligent in causing Art. 2191. Proprietors shall also be responsible for
damage, the law presumes the vehicle owner equally damages caused:
negligent and imposes upon the latter the burden of (1) By the explosion of machinery which has not
proving proper selection of employee as a defense. been taken care of with due diligence, and the
inflammation of explosive substances which
Summary: have not been kept in a safe and adequate
Owner PRESENT in the Owner NOT PRESENT in place;
Vehicle the Vehicle (2) By excessive smoke, which may be harmful to
Owner is liable if he could Owner may be held persons or property;
have prevented the liable under Art. 2180, (3) By the falling of trees situated at or near
mishap by the exercise of par. 5. highways or lanes, if not caused by force
due diligence. majeure;
(4) By emanations from tubes, canals, sewers or
Caedo vs. Yu Khe Tai (1968): Car owners are not held deposits of infectious matter, constructed
to a uniform and inflexible standard of diligence as without precautions suitable to the place.
are professional drivers. In many cases they refrain
from driving their own cars and instead hire other Art. 2192. If damage referred to in the two preceding
persons to drive for them precisely because they are articles should be the result of any defect in the
not trained or endowed with sufficient discernment construction mentioned in article 1723, the third
to know the rules of traffic or to appreciate the person suffering damages may proceed only against
relative dangers posed by the different situations the engineer or architect or contractor in accordance
that are continually encountered on the road. What with said article, within the period therein fixed.
would be a negligent omission under aforesaid
Article on the part of a car owner who is in the prime Ownership of a building imposes on the proprietor
of age and knows how to handle a motor vehicle is thereof the duty to maintain it in good condition at
not necessarily so on the part, say, of an old and all times to the end that it may not collapse either
infirm person who is not similarly equipped. totally or partially as to cause damage or injury to
another’s person or property.
The law does not require that a person must possess
a certain measure of skill or proficiency either in the This duty obtains whether the building is leased or
mechanics of driving or in the observance of traffic held in usufruct.
rules before he may own a motor vehicle. The test of
his negligence, within the meaning of Article 2184, is Considering, however, that the lessee or usufructuary
his omission to do that which the evidence of his own has direct and immediate control of the building, the
senses tells him he should do in order to avoid the law imposes on him the duty to notify the proprietor
PAGE 358
of such urgent or extra-ordinary repairs AND where based on the negligence or on the presumed lack of
the proprietor’s failure to make the necessary repairs vigilance of the possessor or user of the animal
was due to the failure of the lessee or usufructuary to causing damage. It is based on natural equity and on
notify him, the proprietor is entitled to the principle of social interest that he who possesses
indemnification for damages he may have been animals for his utility, pleasure, or service, must
required to pay to the parties. answer for any damage which such animal may
cause.
Gotesco Investment Corp. vs. Chatto (1992): The
owner or proprietor of a place of public amusement POSSIBLE DEFENSES AGAINST THIS LIABILITY
impliedly warrants that the premises, appliances and (1) Force Majeure
amusement devices are safe for the purpose for (2) Fault of person suffering damage
which they are designed, the doctrine being subject (3) Act of third persons
to no other exception or qualification than that he
does not contract against unknown defects not SCOPE OF PROVISION
discoverable by ordinary or reasonable means. Contention that the defendant could not be
expected to exercise remote control of the animal is
HEAD OF FAMILY
not acceptable. In fact, Art. 2183 holds the possessor
liable even if the animal should “escape or be lost”
Art 2193. The head of a family that lives in a building and so be removed from his control.
or a part thereof, is responsible for damages caused
by things thrown or falling from the same. It is likewise immaterial that the animal was tame
and was merely provoked by the victim. The law does
Purpose of the law not speak only of vicious animals but covers even
To relieve the injured party of the difficulty of tame ones as long as they cause injury.
determining and proving who threw the thing or
what caused it to fall, or that either was due to the NUISANCE
fault or negligence of any particular individual. Sangco: A person who creates or maintains a
nuisance is liable for the resulting injury to others
Dingcong vs. Kanaan (1941): Lessee is considered as regardless of the degree of care or skill exercised to
the head of the family. It is enough that he lives in avoid the injury. The creation or maintenance of a
and has control over it. nuisance is a violation of an absolute duty.
Nuisance is a condition and not an act or failure to

act, so that if a wrongful condition exists, the person
Strict Liability responsible for its existence is responsible for the
resulting damages to others.
POSSESSOR AND USER OF AN ANIMAL CLASSES
Art. 2183. The possessor of an animal or whoever (1) Nuisance per se; Nuisance per accidence
may make use of the same is responsible for the (2) Public nuisance; private nuisance
damage which it may cause, although it may escape
or be lost. This responsibility shall cease only in case Iloilo Ice and Cold Storage Co. vs. Municipal Council
the damage should come from force majeure or from (1913): A nuisance is, according to Blackstone, "Any
the fault of the person who has suffered damage. thing that worketh hurt, inconvenience, or damages."
They arise from pursuing particular trades or
APPLICABILITY OF PROVISION industries in populous neighborhoods; from acts of
Since the law makes no distinction, this is applicable public indecency, keeping disorderly houses, and
to both wild (in case the wild animal is kept) and houses of ill fame, gambling houses, etc. Nuisances
domestic animals. It is enough that defendant is the have been divided into two classes: Nuisances per se,
possessor, owner, or user of the animal at the time it and nuisances per accidens. To the first belong those
caused the damage complained of, to hold him which are unquestionably and under all
liable therefor. circumstances nuisances, such as gambling houses,
houses of ill fame, etc. The number of such
BASIS nuisances is necessarily limited, and by far the
Vestil vs. IAC (1989): Possession of the animal, not greater number of nuisances are such because of
ownership, is determinative of liability under Art. particular facts and circumstances surrounding the
2183. The obligation imposed by said article is not otherwise harmless cause of the nuisance. For this
PAGE 359
reason, it will readily be seen that whether a There can be no doubt that commercial and
particular thing is a nuisance is generally a question industrial activities which are lawful in themselves
of fact, to be determined in the first instance before may become nuisances if they are so offensive to the
the term nuisance can be applied to it. senses that they render the enjoyment of life and
property uncomfortable. It is no defense that skill
Salao and Lucas vs. Santos (1939): Nuisances are of and care have been exercised and the most improved
two kinds: nuisance per se and nuisance per methods and appliances employed to prevent such
accidens. The first is recognized as a nuisance under result.
any and all circumstances because it constitutes a
direct menace to public health or safety and, for that PRODUCTS LIABILITY (SUPRA)
reason, may ‘be abated summarily under the Art 2187. Manufacturers and processors of foodstuffs,
undefined law of necessity. The second is that which drinks, toilet articles and similar goods shall be liable
depends upon certain conditions and circumstances, for death or injuries caused by any noxious or
and its existence being a question of fact, it cannot harmful substances used, although no contractual
be abated without due hearing thereon in a tribunal relation exists between them and the consumers.
authorized to decide whether such a thing does in
law constitute a nuisance. CONSUMER ACT
Consumer Act Provisions (supra)
EASEMENT AGAINST NUISANCE
Art. 682. Every building or piece of land is subject to Coca-Cola v. CA (1993): While it may be true that the
the easement which prohibits the proprietor or pre-existing contract between the parties may, as a
possessor from committing nuisance through noise, general rule, bar the applicability of the law on
jarring, offensive odor, smoke, heat, dust, water, quasi-delict, the liability may itself be deemed to
glare and other causes. arise from quasi-delict if the act which breaks the
contract is also a quasi-delict.
Art. 683. Subject to zoning, health, police and other
laws and regulations, factories and shops may be Summary:
maintained provided the least possible annoyance is Person Strictly For What Defenses or
caused to the neighborhood. Liable Exceptions
Possessor of an For the damage Force majeure
The provisions impose a prohibition upon owners of animal or it may cause Fault of the
buildings of land from committing therein a nuisance whoever makes person who
or using such buildings or lands in a manner as will use of them suffered
constitute a nuisance. It is based on the maxim sic even if the damage
utere tuo ut alienum non laedas (so use your own as animal is lost or
not to injure another’s property). escaped
Owner of Motor Motor vehicle Solidary liability
Velasco vs. Manila Electric Co. (1971): The general rule Vehicle mishaps only if the
is that everyone is bound to bear the habitual or owner was in
customary inconveniences that result from the the vehicle and
proximity of others, and so long as this level is not if he could have
surpassed, he may not complain against them. But if prevented it
the prejudice exceeds the inconveniences that such thru due
proximity habitually brings, the neighbor who causes diligence
such disturbances is held responsible for the If not in vehicle
resulting damage, being guilty of causing nuisance. 2180
Manufacturers Death and Absence on
While no previous adjudications on the specific issue and Processors injuries caused contractual
have been made in the Philippines, our law of of foodstuffs, by any noxious relation NOT a
nuisances is of American origin, and a review of drinks, toilet or harmful defense
authorities clearly indicates the rule to be that the articles and substances used
causing or maintenance of disturbing noise or sound similar goods
may constitute an actionable nuisance. (FDTAS)
Defendant in Death or injury possession or
possession of results from use thereof is
dangerous such possession indispensable in
PAGE 360
Person Strictly For What Defenses or Person Strictly For What Defenses or
Liable Exceptions Liable Exceptions
weapons/ his occupation without
substances or business precautions
such as firearms suitable to the
and poison place
Provinces, Cities The death or Public works Engineer, if damage of
and injuries suffered must be under Architect or building or
Municipalities by any person by their Contractor structure is
reason of the supervisions caused by defect
defective in construction
condition of which happens
roads, streets, within 15 years
bridges, public from
buildings, and construction;
other public action must be
works brought within
Proprietor ofa) Total or partial Responsibility 10 years from
building/ collapse of for collapse collapse
structure building or should be due Head of the Liable for
structure if due to the lack of Family that lives damages
to lack of necessary in a building or caused by
necessary repair repairs any part thereof things thrown or
s falling from the
b) Explosion of same
machinery
which has not
been taken
cared of with
due diligence,
and the
inflammation of
explosive
substances
which have not
been kept in a
safe and
adequate place
c) By excessive
smoke, which
may be harmful
to persons or
property
d) By falling of
trees situated at
or near
highways or
lanes, if not
caused by force
majeure
e) By emanations
from tubes,
canals, sewers
or deposits of
infectious
matter,
constructed
PAGE 361
UP COLLEGE OF LAW DAMAGES BAR OPERATIONS COMMISSION
Damages foundation of liability, and include those which

follow as a conclusion of law from the statement of
the facts of the injury.
DEFINITION
People vs. Ballesteros: Damages may be defined as Special damages
the pecuniary compensation, recompense, or Damages that arise from the special circumstance of
satisfaction for an injury sustained, or as otherwise the case, which, if properly pleaded, may be added to
expressed, the pecuniary consequences which the the general damages which the law presumes or
law imposes for the breach of some duty or the implies from the mere invasion of the plaintiff’s
violation of some right. rights. Special damages are the natural, but NOT the
necessary result of an injury. These are not implied
DAMAGES VS. INJURY by law.
Custodio v. CA (1996): Injury is the illegal invasion of
a legal right. Damage is the loss, hurt, or harm which
results from the injury. Damages are the recompense
or compensation awarded for the damage suffered.
Actual and Compensatory
Ocena vs. Icamina: The obligation to repair the
damages exists whether done intentionally or Damages
negligently and whether or not punishable by law.
Compensatory damages are damages in satisfaction
ELEMENTS FOR RECOVERY OF DAMAGES of, or in recompense for, loss or injury sustained. The
(1) Right of action phrase “actual damages” is sometimes used as
(2) For a wrong inflicted by the defendant synonymous with compensatory damages.
(3) Damage resulting to the plaintiff
REQUISITES
CLASSIFICATION Asilio, Jr. v. People and Sps. Bombasi (2011): To seek
Art. 2197. Damages may be: recovery of actual damages, it is necessary to prove
(1) Actual or compensatory; the actual amount of loss with a reasonable degree
(2) Moral; of certainty, premised upon competent proof and on
(3) Nominal; the best evidence obtainable.
(4) Temperate or moderate;
(5) Liquidated; or WHEN IS A PERSON ENTITLED?
(6) Exemplary or corrective. (1) When there is a pecuniary loss suffered by him;
(2) When he has alleged and prayed for such relief
ACCORDING TO PURPOSE (Manchester Dev’t Corp vs. CA);
(1) For adequate reparation of the injury (3) When he has duly proved it;
a) Compensatory (reparation of pecuniary (4) When provided by law or by stipulation.
losses)
b) Moral (reparation for non-pecuniary losses: No proof of pecuniary loss is necessary for: moral,
injury to feelings; physical suffering, etc.) nominal, temperate, liquidated or exemplary damages.
(2) For vindication of the right violated: Nominal The assessment of such damages is discretionary
(3) For less than adequate reparation: Moderate upon the court, except liquidated ones. (Art. 2216)
(4) For deterring future violations: Exemplary or
corrective ALLEGED AND PROVED WITH CERTAINTY
Art. 2199. Except as provided by law or by stipulation,
ACCORDING TO MANNER OF DETERMINATION one is entitled to an adequate compensation only for
(1) Conventional (or liquidated) such pecuniary loss suffered by him as he has duly
(2) Non-conventional, which may either be: proved. Such compensation is referred to as actual
(a) Statutory (fixed by law, as in moratory or compensatory damages.
interest)
(b) Judicial (determined by the courts) THE DAMAGES MUST BE PROVEN BY
COMPETENT EVIDENCE (ADMISSIBLE OR
SPECIAL AND ORDINARY PROBATIVE)
General damages Integrated Packaging Corp. vs. CA; Fuentes vs. CA: It
Those which are the natural and necessary result of is necessary to prove with a reasonable degree of
the wrongful act or omission asserted as the certainty, premised upon competent proof and on
PAGE 362
the best evidence obtainable by the injured party, the VALUE OF LOSS; UNREALIZED PROFIT
actual amount of loss. Art. 2200. Indemnification for damages shall
comprehend not only the value of the loss suffered,
Damages must be proved and cannot be presumed. but also that of the profits which the obligee failed to
It must be established by clear evidence. obtain.
Valencia vs. Tantoco (1956): Damages must be In other words, indemnification for damages is not
proved with reasonable accuracy, even when not limited to damnum emergens (actual loss) but
denied. extends to lucrum cessans (a cession of gain or
amount of profit lost).
DEGREE OF CERTAINTY REQUIRED AS TO: FACT,
CAUSE AND AMOUNT OF DAMAGES ATTORNEY’S FEES AND EXPENSES OF
Damages are not rendered uncertain just because LITIGATION
they cannot be calculated with absolute exactness or Art. 2208. In the absence of stipulation, attorney's
because the consequences of the wrong are not fees and expenses of litigation, other than judicial
precisely definite in pecuniary amount. costs, cannot be recovered, except:
(1) When exemplary damages are awarded;
The principle which will disallow recovery of (2) When the defendant's act or omission has
damages when their existence rests solely on compelled the plaintiff to litigate with third
speculation applies both to the fact and cause of persons or to incur expenses to protect his
damages. interest;
(3) In criminal cases of malicious prosecution
(1) The requirement of certainty does not prevent the against the plaintiff;
drawing of reasonable inferences from the fact (4) In case of a clearly unfounded civil action or
and circumstance in evidence. proceeding against the plaintiff;
(2) Events which occur after the wrong complained (5) Where the defendant acted in gross and evident
of may serve to render the damage sufficiently bad faith in refusing to satisfy the plaintiff's
certain. plainly valid, just and demandable claim;
(3) The damages must be susceptible of (6) In actions for legal support;
ascertainment in some manner other than by (7) In actions for the recovery of wages of household
mere speculation, conjecture or surmise and by helpers, laborers and skilled workers;
reference to some fairly definite standard, such as (8) In actions for indemnity under workmen's
market value, established experience or direct compensation and employer's liability laws;
inference from known circumstances. (9) In a separate civil action to recover civil liability
arising from a crime;
Talisay-Silay vs. Associacion: Where, however, it is (10) When at least double judicial costs are awarded;
reasonably certain that injury consisting of failure to (11) In any other case where the court deems it just
realize otherwise reasonably expected profits had and equitable that attorney's fees and expenses
been incurred, uncertainty as to the precise amount of litigation should be recovered.
of such unrealized profits will not prevent recovery or
the award of damages. In all cases, the attorney's fees and expenses of
litigation must be reasonable.
NOT SPECULATIVE
Actual damages to be compensable must be proved General Rule
by clear evidence, a court cannot rely on speculation, Attorney’s fees and costs of litigation are recoverable
conjectures or guesswork as to the fact and amount IF stipulated.
of damages, but must depend on actual proof that
damages has been suffered and on evidence of the Exceptions
actual amount. If there is no stipulation, they are recoverable only in
the following cases:
COMPONENTS (1) By reason of malice or bad faith
Actual damage covers the following: (a) When exemplary damages are awarded
(1) Value of loss; unrealized profit (b) In case of a clearly unfounded civil action
(2) Attorney’s fees and expenses of litigation (c) Where defendant acted in gross and evident
(3) Interest bad faith
PAGE 363
(d) When at least double judicial costs are No interest may be recovered on unliquidated (not
awarded fixed in amount) claims or damages, except when
(2) By reason of plaintiff’s indigence in the demand can be established with reasonable
(a) Actions for legal support certainty at the Court’s discretion.
(b) Actions for recovery of wages of laborers,
etc. COMPOUNDING OF INTEREST
(c) Actions for workmen’s compensation Interest due shall earn legal interest from the time it
(3) By reason of crimes in is judicially demanded, although the obligation may
(a) Criminal cases of malicious prosecution be silent on the point.
(b) Separate actions to recover civil liability
arising from crime Note that interest due can earn only at 6%, whether
(4) By reason of equity the rate of interest of the principal is greater than
(a) Where the defendant’s act compelled 6%.
plaintiff to litigate with third persons
(b) Where the Court deems it just and equitable DETERMINATION OF LEGAL INTEREST
(1) When an obligation, regardless of its source (i.e.,
Note: law, contracts, quasi-contracts, delicts or quasi-
In all cases, attorney’s fees and costs of litigation delicts) is breached, the contravenor can be held
must be reasonable. liable for damages.
(2) With regard particularly to an AWARD OF
Even if expressly stipulated, attorney’s fees are INTEREST in the concept of actual and
subject to control by the Courts. compensatory damages, the RATE of interest, as
well as the ACCRUAL thereof, is imposed, as
INTEREST follows (Eastern Shipping Lines vs. CA, 1994):
Art. 2209. If the obligation consists in the payment of
a sum of money, and the debtor incurs in delay, the
indemnity for damages, there being no stipulation to Base Rate Accrual
the contrary, shall be the payment of the interest
agreed upon, and in the absence of stipulation, the (a) When the (a) That which to be computed
legal interest, which is six per cent per annum. obligation is may have from default, i.e.,
breached, and it been from JUDICIAL or
consists in the stipulated in EXTRAJUDICIAL
Art. 2210. Interest may, in the discretion of the court, PAYMENT OF A writing. demand under
be allowed upon damages awarded for breach of SUM OF b) In the and subject to the
contract. MONEY, i.e., a absence of provisions of
loan or stipulation, Article 1169 of the
Art. 2211. In crimes and quasi-delicts, interest as a forbearance of the rate of Civil Code.
part of the damages may, in a proper case, be money, the interest shall
adjudicated in the discretion of the court. interest due be 12% per
should be annum (legal
Art. 2212. Interest due shall earn legal interest from interest)
the time it is judicially demanded, although the (b) Furthermore, legal interest from the time it is
obligation may be silent upon this point. the INTEREST JUDICIALLY
DUE shall itself demanded.
earn
Art. 2213. Interest cannot be recovered upon (c) When an at the rate of If claim or
unliquidated claims or damages, except when the obligation, NOT 6% per damages are
demand can be established with reasonable constituting a annum. LIQUIDATED,
certainty. loan or from default, i.e.,
forbearance of from judicial or
INTEREST ACCRUES WHEN: money, is extrajudicial
(1) The obligation consists in the payment of a sum breached, an demand. (Art.
of money interest on the 1169, Civil Code)
(2) Debtor incurs in delay AMOUNT OF
(3) There being no stipulation to the contrary DAMAGES If UNLIQUIDATED,
awarded may from the time the
be imposed at demand can be
PAGE 364
IN CONTRACTS AND QUASI-CONTRACTS

Base Rate Accrual Art. 2201. In contracts and quasi-contracts, the
damages for which the obligor who acted in good
the discretion of established with faith is liable shall be those that are the natural and
the court. reasonable probable consequences of the breach of the
certainty. Hence, obligation, and which the parties have foreseen or
The actual base the interest shall could have reasonably foreseen at the time the
for the begin to run only obligation was constituted.
computation of FROM THE DATE
legal interest THE JUDGMENT In case of fraud, bad faith, malice or wanton attitude,
shall be on the OF THE COURT IS the obligor shall be responsible for all damages
amount finally MADE (at which which may be reasonably attributed to the non-
adjudged. time the performance of the obligation.
quantification of
damages may be
deemed to have Art. 2214. In quasi-delicts, the contributory
been reasonably negligence of the plaintiff shall reduce the damages
ascertained). that he may recover.
(d) When the the rate of from FINALITY
JUDGMENT of legal interest, UNTIL ITS Art. 2215. In contracts, quasi-contracts, and quasi-
the court whether the SATISFACTION, delicts, the court may equitably mitigate the
awarding a sum case falls this period being damages under circumstances other than the case
of money under a,b, or deemed to be an referred to in the preceding article, as in the
becomes final c, above, shall equivalent to a following instances:
and executory, be 12% per forbearance of (1) That the plaintiff himself has contravened the
annum credit. terms of the contract;
(2) That the plaintiff has derived some benefit as a
START OF DELAY result of the contract;
(1) Extrajudicial: demand letter (3) In cases where exemplary damages are to be
(2) Judicial: Filing of complaint awarded, that the defendant acted upon the
(3) Award advice of counsel;
(4) That the loss would have resulted in any event;
EXTENT OR SCOPE OF ACTUAL DAMAGES (5) That since the filing of the action, the defendant
Art. Liability extends Note: has done his best to lessen the plaintiff's loss or
2201 to those: Liability injury.
(1) natural and extends to
probable all damages (a) The obligor IN GOOD FAITH is liable for such
consequences which may damages
of the breach be (1) That are the natural and probable
(2) those that reasonably consequences of the breach of the
have been attributed to obligation; and
Contracts
foreseen the non- (2) That the parties have foreseen (or could
and quasi
(3) those that performance have reasonably foreseen) such damages at
contracts
could have of the the time the obligation was constituted
been obligation in
reasonably case of “Natural and probable” consequence
foreseen fraud, bad requires:
Provided: obligor faith, malice (1) Causality: That the damage would not
in good faith or wanton have resulted without fault or
attitude negligence of the defendant (but for
(FBM-WA). rule)
Art. Liability extends Note: (2) Adequacy: That the fault of the obligor
2202 Crimes to all damages WON would normally (ordinarily) result in the
and which are the damage is damage suffered by the obligee
quasi- natural and foreseen is
delicts probable irrelevant (b) In case of FRAUD, BAD FAITH, MALICE OR
consequence WANT OF ATTITUDE, the obligor answers for
PAGE 365
(1) All damages which may be reasonably damages were foreseen, or reasonably foreseeable
attributed to the non-performance of the by the defendant.
obligation, whether foreseen or not
(2) Exemplary or corrective damages Algarra vs. Sandejas: Actual damages for a negligent
act or omission are confined to those which "were
Note: foreseen or might have been foreseen," or those
Interest may be allowed on damages awarded, in the which were "the natural and probable
discretion of the court. consequences" or "the direct and immediate
consequences" of the act or omission.
Daywalt vs. Recoletos et al.: The damages
recoverable upon breach of contract are, primarily, Note:
the ordinary, natural and in a sense the necessary Damages are to be increased or decreased (in case of
damages resulting from the breach. Other damages, crimes only) according to aggravating or mitigating
known as special damages, are recoverable where it circumstances present.
appears that the particular conditions which made
such damages a probable consequence of the Interest, as part of damages, may be adjudicated in a
breach were known to the delinquent party at the proper case, in the Court’s discretion.
time the contract was made.
Contributory negligence of the plaintiff, in case of
IN CRIMES AND QUASI-DELICTS quasi-delicts, shall reduce the damages to which he
may be entitled.
Art. 2202. In crimes and quasi-delicts, the defendant
shall be liable for all damages which are the natural
Note:
and probable consequences of the act or omission
In crimes, no mitigation for contributory negligence.
complained of. It is not necessary that such damages
have been foreseen or could have reasonably been
foreseen by the defendant.
Art. 2206. The amount of damages for death caused Moral Damages
by a crime or quasi-delict shall be at least three
thousand pesos, even though there may have been Art. 2217. Moral damages include physical suffering,
mitigating circumstances. In addition: mental anguish, fright, serious anxiety, besmirched
(1) The defendant shall be liable for the loss of the reputation, wounded feelings, moral shock, social
earning capacity of the deceased, and the humiliation, and similar injury. Though incapable of
indemnity shall be paid to the heirs of the latter; pecuniary computation, moral damages may be
such indemnity shall in every case be assessed recovered if they are the proximate result of the
and awarded by the court, unless the deceased defendant's wrongful act for omission.
on account of permanent physical disability not
caused by the defendant, had no earning
Art. 2218. In the adjudication of moral damages, the
capacity at the time of his death;
sentimental value of property, real or personal, may
(2) If the deceased was obliged to give support
be considered.
according to the provisions of article 291, the
recipient who is not an heir called to the
decedent's inheritance by the law of testate or Visayan Sawmill vs. CA: Moral damages are
intestate succession, may demand support from emphatically not intended to enrich a complainant
the person causing the death, for a period not at the expense of the defendant. Its award is aimed
exceeding five years, the exact duration to be at the restoration, within the limits of the possible, of
fixed by the court; the spiritual status quo ante, and it must be
(3) The spouse, legitimate and illegitimate proportional to the suffering inflicted.
descendants and ascendants of the deceased
may demand moral damages for mental Bagumbayan Corp. vs. IAC (1984): Mental suffering
anguish by reason of the death of the deceased. means distress or serious pain as distinguished from
annoyance, regret or vexation.
Defendant is liable for all damages which are the
Mental anguish is intense mental suffering.
natural and probable consequences of the act or
Generally, damages for mental anguish are limited
omission complained of; it is not necessary that such
to cases in which there has been a personal physical
injury or where the defendant willfully, wantonly,
PAGE 366
recklessly, or intentionally caused the mental contracts when breached by tort.

anguish.
(5) In culpa criminal, moral damages could be
WHEN AWARDED lawfully due when the accused is found guilty of
Awarded when injury consists of: (PBMF-MWSSS) physical injuries, lascivious acts, adultery or
(a) Physical suffering concubinage, illegal or arbitrary detention,
(b) Besmirched reputation illegal arrest, illegal search, or defamation.
(c) Mental anguish
(d) Fright (6) Malicious prosecution can also give rise to a
(e) Moral shock claim for moral damages. The term "analogous
(f) Wounded feelings cases," referred to in Article 2219, following the
(g) Social humiliation ejusdem generis rule, must be held similar to
(h) Serious anxiety those expressly enumerated by the law.
(i) Similar injury
(7) Although the institution of a clearly unfounded
(1) Though incapable of pecuniary computation civil suit can at times be a legal justification for
(2) If such is the proximate result of defendant’s act an award of attorney's fees, such filing, however,
or omission. has almost invariably been held not to be a
ground for an award of moral damages.
REQUISITES FOR AWARDING MORAL DAMAGES (Expertravel& Tours vs. CA, 1 to 7)
Villanueva vs. Salvador: Requisites for awarding
moral damages: (8) The burden rests on the person claiming moral
(1) there must be an injury, whether physical, mental damages to show convincing evidence for good
or psychological, clearly sustained by the faith is presumed. In a case involving simple
claimant; negligence, moral damages cannot be
(2) there must be a culpable act or omission factually recovered. (Villanueva vs. Salvador)
established;
(3) the wrongful act or omission of the defendant (9) Failure to use the precise legal terms or
must be the proximate cause of the injury "sacramental phrases" of "mental anguish,
sustained by the claimant; and fright, serious anxiety, wounded feelings or
(4) the award of damages is predicated on any of the moral shock" does not justify the denial of the
cases stated in ART. 2219 NCC. claim for damages. It is sufficient that these
exact terms have been pleaded in the complaint
GENERAL PRINCIPLES OF RECOVERY: and evidence has been adduced (Miranda-
(1) Moral damages must somehow be proportional Ribaya vs. Bautista)
to the suffering inflicted.
(10) Even if the allegations regarding the amount of
(2) In culpa contractual or breach of contract, moral damages in the complaint are not specifically
damages may be recovered when the defendant denied in the answer, such damages are not
acted in bad faith or was guilty of gross deemed admitted. (Raagas, et al. vs. Traya et al).
negligence (amounting to bad faith) or in
wanton disregard of his contractual obligation (11) An appeal in a criminal case opens the whole
and, exceptionally, when the act of breach of case for review and this 'includes the review of
contract itself is constitutive of tort resulting in the penalty, indemnity and damages. Even if the
physical injuries. offended party had not appealed from said
award, and the only party who sought a review
(3) By special rule in Article 1764, in relation to of the decision of said court was the accused, the
Article 2206, moral damages may also be court can increase damages awarded.
awarded in case the death of a passenger (Sumalpong vs. CA)
results from a breach of carriage.
(12) It can only be awarded to natural persons.
(4) In culpa aquiliana or quasi-delict,
(a) when an act or omission causes physical ABS-CBN vs. CA: The award of moral damages
injuries, or cannot be granted in favor of a corporation because,
(b) where the defendant is guilty of intentional being an artificial person and having existence only
tort, moral damages may aptly be in legal contemplation, it has no feelings, no
recovered. This rule also applies to emotions, no senses, It cannot, therefore, experience
PAGE 367
physical suffering and mental anguish, which can be (1) A criminal offense resulting in physical injuries;
experienced only by one having a nervous system. (2) Quasi-delicts causing physical injuries;
The statement in People vs. Manero and Mambulao (3) Seduction, abduction, rape, or other lascivious
Lumber Co. vs. PNB that a corporation may recover acts;
moral damages if it "has a good reputation that is (4) Adultery or concubinage;
debased, resulting in social humiliation" is an obiter (5) Illegal or arbitrary detention or arrest;
dictum. (6) Illegal search;
(7) Libel, slander or any other form of defamation;
NAPOCOR vs. Philipp Brothers: While it is true that (8) Malicious prosecution;
besmirched reputation is included in moral (9) Acts mentioned in article 309;
damages, it cannot cause mental anguish to a (10) Acts and actions referred to in articles 21, 26, 27,
corporation, unlike in the case of a natural person, 28, 29, 30, 32, 34, and 35.
for a corporation has no reputation in the sense that
an individual has, and besides, it is inherently The parents of the female seduced, abducted, raped,
impossible for a corporation to suffer mental or abused, referred to in No. 3 of this article, may
anguish. also recover moral damages.
The spouse, descendants, ascendants, and brothers

Question
and sisters may bring the action mentioned in No. 9
Ortillo contracts Fabricato, Inc. to supply and install
of this article, in the order named.
tile materials in a building he is donating to his
province. Ortillo pays 50% of the contract price as
per agreement. It is also agreed that the balance Art. 2220. Willful injury to property may be a legal
would be payable periodically after every 10% ground for awarding moral damages if the court
performance until completed. After performing should find that, under the circumstances, such
about 93% of the contract, for which it has been paid damages are justly due. The same rule applies to
an additional 40% as per agreement, Fabricato, Inc. breaches of contract where the defendant acted
did not complete the project due to its sudden fraudulently or in bad faith.
cessation of operations. Instead, Fabricato, Inc.
demands payment of the last 10% of the contract IN SEDUCTION, ABDUCTION, RAPE AND OTHER LASCIVIOUS
despite its non-completion of the project. Ortillo ACTS
refuses to pay, invoking the stipulation that payment People vs. Calongui: Anent the award of damages,
of the last amount of 10% shall be upon completion. civil indemnity ex delicto is mandatory upon finding
Fabricato, Inc. brings suit for the entire 10% plus of the fact of rape while moral damages is awarded
damages. Ortillo counters with claims for (a) moral upon such finding without need of further proof
damages for Fabricato, Inc.’s unfounded suit which because it is assumed that a rape victim has actually
has damaged his reputation as a philanthropist and suffered moral injuries entitling the victim to such
respected businessman in his community, and (b) award. If without factual and legal bases, no award
attorney’s fees. of exemplary damages should be allowed.
(a) Does Ortillo have a legal basis for his claim for Note:
moral damages? Recovery may be had by the offended party and also
(b) How about his claim for attorney’s fees, having by her parents.
hired a lawyer to defend him?
IN ACTS REFERRED TO IN ARTS. 21, 26, 27, 28, 29, 32,
Suggested Answer: 34 &35, NCC
(a) There is no legal basis to Ortillo’s claim for
moral damages. It does not fall under the Art. 21. Any person who wilfully causes loss or injury
coverage of Article 2219 of the New Civil Code. to another in a manner that is contrary to morals,
(b) Ortillo is entitled to attorney’s fees because good customs or public policy shall compensate the
Fabricato’s complaint is a case of malicious latter for the damage.
prosecution or a clearly unfounded civil action
(Art. 2208 [4] and [11], NCC). Art. 26. Every person shall respect the dignity,
personality, privacy and peace of mind of his
WHEN RECOVERABLE neighbors and other persons. The following and
Art. 2219. Moral damages may be recovered in the similar acts, though they may not constitute a
following and analogous cases: criminal offense, shall produce a cause of action for
damages, prevention and other relief:
PAGE 368
(1) Prying into the privacy of another's residence: (7) The right to a just compensation when private
(2) Meddling with or disturbing the private life or property is taken for public use;
family relations of another; (8) The right to the equal protection of the laws;
(3) Intriguing to cause another to be alienated from (9) The right to be secure in one's person, house,
his friends; papers, and effects against unreasonable
(4) Vexing or humiliating another on account of his searches and seizures;
religious beliefs, lowly station in life, place of (10) The liberty of abode and of changing the same;
birth, physical defect, or other personal (11) The privacy of communication and
condition. correspondence;
(12) The right to become a member of associations
or societies for purposes not contrary to law;
Art. 27. Any person suffering material or moral loss
(13) The right to take part in a peaceable assembly
because a public servant or employee refuses or
to petition the government for redress of
neglects, without just cause, to perform his official
grievances;
duty may file an action for damages and other relief
(14) The right to be free from involuntary servitude in
against he latter, without prejudice to any
any form;
disciplinary administrative action that may be taken.
(15) The right of the accused against excessive bail;
(16) The right of the accused to be heard by himself
Art. 28. Unfair competition in agricultural, and counsel, to be informed of the nature and
commercial or industrial enterprises or in labor cause of the accusation against him, to have a
through the use of force, intimidation, deceit, speedy and public trial, to meet the witnesses
machination or any other unjust, oppressive or face to face, and to have compulsory process to
highhanded method shall give rise to a right of secure the attendance of witness in his behalf;
action by the person who thereby suffers damage. (17) Freedom from being compelled to be a witness
against one's self, or from being forced to
Art. 29. When the accused in a criminal prosecution confess guilt, or from being induced by a
is acquitted on the ground that his guilt has not been promise of immunity or reward to make such
proved beyond reasonable doubt, a civil action for confession, except when the person confessing
damages for the same act or omission may be becomes a State witness;
instituted. Such action requires only a (18) Freedom from excessive fines, or cruel and
preponderance of evidence. Upon motion of the unusual punishment, unless the same is
defendant, the court may require the plaintiff to file a imposed or inflicted in accordance with a statute
bond to answer for damages in case the complaint which has not been judicially declared
should be found to be malicious. unconstitutional; and
(19) Freedom of access to the courts.
If in a criminal case the judgment of acquittal is
based upon reasonable doubt, the court shall so In any of the cases referred to in this article, whether
declare. In the absence of any declaration to that or not the defendant's act or omission constitutes a
effect, it may be inferred from the text of the decision criminal offense, the aggrieved party has a right to
whether or not the acquittal is due to that ground. commence an entirely separate and distinct civil
action for damages, and for other relief. Such civil
action shall proceed independently of any criminal
Art. 32. Any public officer or employee, or any private prosecution (if the latter be instituted), and mat be
individual, who directly or indirectly obstructs, proved by a preponderance of evidence.
impairs any of the following rights and liberties of The indemnity shall include moral damages.
another person shall be liable to the latter for Exemplary damages may also be adjudicated.
damages: The responsibility herein set forth is not demandable
(1) Freedom of religion; from a judge unless his act or omission constitutes a
(2) Freedom of speech; violation of the Penal Code or other penal statute.
(3) Freedom to write for the press or to maintain a
periodical publication;
(4) Freedom from arbitrary or illegal detention; Art. 34. When a member of a city or municipal police
(5) Freedom of suffrage; force refuses or fails to render aid or protection to
(6) The right against deprivation of property without any person in case of danger to life or property, such
due process of law; peace officer shall be primarily liable for damages,
and the city or municipality shall be subsidiarily
responsible therefor. The civil action herein
PAGE 369
recognized shall be independent of any criminal Art. 2221. Nominal damages are adjudicated in order
proceedings, and a preponderance of evidence shall that a right of the plaintiff, which has been violated
suffice to support such action. or invaded by the defendant, may be vindicated or
recognized, and not for the purpose of indemnifying
Art. 35. When a person, claiming to be injured by a the plaintiff for any loss suffered by him.
criminal offense, charges another with the same, for
which no independent civil action is granted in this Art. 2222. The court may award nominal damages in
Code or any special law, but the justice of the peace every obligation arising from any source enumerated
finds no reasonable grounds to believe that a crime in article 1157, or in every case where any property
has been committed, or the prosecuting attorney right has been invaded.
refuses or fails to institute criminal proceedings, the
complaint may bring a civil action for damages
Art. 2223. The adjudication of nominal damages
against the alleged offender. Such civil action may
shall preclude further contest upon the right
be supported by a preponderance of evidence. Upon
involved and all accessory questions, as between the
the defendant's motion, the court may require the
parties to the suit, or their respective heirs and
plaintiff to file a bond to indemnify the defendant in
assigns.
case the complaint should be found to be malicious.
If during the pendency of the civil action, an General Rule: One does not ask for nominal
information should be presented by the prosecuting damages, and it is in lieu of the actual, moral,
attorney, the civil action shall be suspended until the temperate, or liquidated damages.
termination of the criminal proceedings.
Nominal damages are incompatible with: actual,
temperate and exemplary damages.
Please refer to previous discussions on the
provisions.
Armovit vs. CA: Nominal damages cannot co-exist
with actual or compensatory damages.
IN CASES OF MALICIOUS PROSECUTION
Mijares vs. CA: Moral damages cannot be recovered Francisco v. Ferrer: No moral or exemplary damages
from a person who has filed a complaint against was awarded. Nevertheless, when confronted with
another in good faith, or without malice or bad faith. their failure to deliver on the wedding day the
If damage results from the filing of the complaint, it wedding cake ordered and paid for, petitioners gave
is damnum absque injuria. the lame excuse that delivery was probably delayed
because of the traffic, when in truth, no cake could
Castillo vs. Castillo: The adverse result of an action be delivered because the order slip got lost. For such
does not per se make the act wrongful and subject prevarication, petitioners must be held liable for
the actor to the payment of moral damages. The law nominal damages for insensitivity, inadvertence or
could not have meant to impose a penalty on the right inattention to their customer's anxiety and need of
to litigate; such right is so precious that moral the hour.
damages may not be charged on those who may
exercise it erroneously.
Temperate Damages
Nominal Damages Art. 2224. Temperate or moderate damages, which
are more than nominal but less than compensatory
Nominal damages consist in damages awarded, not damages, may be recovered when the court finds
for purposes of indemnifying the plaintiff for any loss that some pecuniary loss has been suffered but its
suffered, but for the vindication or recognition of a amount cannot, from the nature of the case, be
right violated by the defendant. provided with certainty.
REQUISITES AND CHARACTERISTICS
(1) Invasion or violation of any legal or property right. Art. 2225. Temperate damages must be reasonable
(2) No proof of loss is required. under the circumstances.
(3) The award is to vindicate the right violated.
WHEN AWARDED
PAGE 370
These damages are awarded for pecuniary loss, in an Liquidated damages are those damages agreed
amount that, from the nature of the case, cannot be upon by the parties to a contract to be paid in case of
proved with certainty. breach thereof.
REQUISITES It differs from a penal clause in that in the latter case

(1) Actual existence of pecuniary loss the amount agreed to be paid may bear no relation
(2) The nature and circumstances of the loss to the probable damages resulting from the breach.
prevents proof of the exact amount Basically, a penalty is “ad terrorem,” while liquidated
(3) They are more than nominal and less than damages are “ad reparationem.”
compensatory.
(4) Causal connection between the loss and the REQUISITES AND CHARACTERISTICS
defendant’s act or omission. (1) Liquidated damages must be validly stipulated.
(5) Amount must be reasonable. (2) There is no need to prove the amount of actual
damages.
In cases where the resulting injury might be (3) Breach of the principal contract must be proved.
continuing and possible future complications directly
arising from the injury, while certain to occur are RULES GOVERNING BREACH OF CONTRACT
difficult to predict, temperate damages can and Art. 2228. When the breach of the contract
should be awarded on top of actual or compensatory committed by the defendant is not the one
damages; in such cases there is no incompatibility contemplated by the parties in agreeing upon the
between actual and temperate damages. liquidated damages, the law shall determine the
measure of damages, and not the stipulation.
Citytrust Bank vs. IAC: Temperate damages are
incompatible with nominal damages hence, cannot (a) These damages are agreed upon in a contract in
be granted concurrently. case of breach thereof.
(b) There is no need to prove the amount, only the
Pleno vs. CA: Temperate damages are included fact of the breach.
within the context of compensatory damages (RCPI (c) The amount can be reduced if:
vs. CA). (1) unconscionable as determined by the court
(2) partial or irregular performance.
There are cases where from the nature of the case,
definite proof of pecuniary loss cannot be offered, General Rule: The penalty shall substitute the
although the court is convinced that there has been indemnity for damages and the payment of the
such loss. For instance, injury to one's commercial interests in case or breach.
credit or to the goodwill of a business firm is often
hard to show certainty in terms of money. (NOTE: In Exceptions
this case actual and temperate damages were (1) When there is a stipulation to the contrary.
awarded. It is postulated that the actual damages is (2) When the obligor is sued for refusal to pay the
for the car while the temperate damages is for the lost agreed penalty.
actual income not sufficiently proved.) (3) When the obligor is guilty of fraud.
Liquidated Damages Exemplary Or Corrective

Damages
Art. 2226. Liquidated damages are those agreed
upon by the parties to a contract, to be paid in case Art. 2229. Exemplary or corrective damages are
of breach thereof. imposed, by way of example or correction for the
public good, in addition to the moral, temperate,
liquidated or compensatory damages.
Art. 2227. Liquidated damages, whether intended as
an indemnity or a penalty, shall be equitably reduced In common law, these damages were termed
if they are iniquitous or unconscionable. “punitive.”
PAGE 371
PNB vs. CA: However, the award of P1,000,000 plaintiff must show that he would be entitled to
exemplary damages is also far too excessive and moral, temperate or compensatory damages were it
should likewise be reduced to an equitable level. not for the stipulation for liquidated damages.
Exemplary damages are imposed not to enrich one
party or impoverish another but to serve as a Art. 2235. A stipulation whereby exemplary damages
deterrent against or as a negative incentive to curb are renounced in advance shall be null and void.
socially deleterious actions.
Requisites to recover exemplary damages and
liquidated damages agreed upon
The plaintiff must show that he/she is entitled to
moral, temperate or compensatory damages:
WHEN RECOVERABLE
IN CRIMINAL OFFENSES; NCC ART. 2230

When exemplary
If arising from
damages are granted
Art. 2230. In criminal offenses, exemplary damages the crime was
as a part of the civil liability may be imposed when Art. committed with an
the crime was committed with one or more Crimes
2230 aggravating
aggravating circumstances. Such damages are circumstance/s
separate and distinct from fines and shall be paid to Art. defendant acted with
the offended party. Quasi-delicts
2231 gross negligence
defendant acted in a
Award of exemplary damages is part of the civil wanton, fraudulent,
liability, not of the penalty. Art. Contracts and
reckless, oppressive, or
2232 Quasi- contracts
malevolent manner
Damages are paid to the offended party separately (WFROMM)
from the fines.
General Principles
IN QUASI-DELICTS; NCC ART. 2231 (1) Exemplary damages cannot be awarded alone:
Art. 2231. In quasi-delicts, exemplary damages may they must be awarded IN ADDITION to moral,
be granted if the defendant acted with gross temperate, liquidated or compensatory
negligence. damages.
(2) The purpose of the award is to deter the
IN CONTRACTS AND QUASI-CONTRACTS; NCC ART. 2232 defendant (and others in a similar condition)
Art. 2232. In contracts and quasi-contracts, the court from a repetition of the acts for which exemplary
may award exemplary damages if the defendant damages were awarded; hence, they are not
acted in a wanton, fraudulent, reckless, oppressive, recoverable as a matter of right.
or malevolent manner. (3) The defendant must be guilty of other malice or
else negligence above the ordinary.
(4) Plaintiff is not required to prove the amount of
REQUISITES
exemplary damages.
ARTS. 2233, 2234
a. But plaintiff must show that he is entitled to
Art. 2233. Exemplary damages cannot be recovered moral, temperate, or compensatory
as a matter of right; the court will decide whether or damage; that is, substantial damages, not
not they should be adjudicated. purely nominal ones. This requirement
applies even if the contract stipulates
Art. 2234. While the amount of the exemplary liquidated damages.
damages need not be proved, the plaintiff must b. The amount of exemplary damage need not
show that he is entitled to moral, temperate or be pleaded in the complaint because the
compensatory damages before the court may same cannot be proved. It is merely
consider the question of whether or not exemplary incidental or dependent upon what the
damages should be awarded. In case liquidated court may award as compensatory
damages have been agreed upon, although no proof damages.
of loss is necessary in order that such liquidated
damages may be recovered, nevertheless, before the
court may consider the question of granting
exemplary in addition to the liquidated damages, the
PAGE 372
DAMAGES IN CASE OF DEATH (4) As exemplary damages, when the crime is

RE. CRIMES AND QUASI-DELICTS attended by one or more aggravating
Art. 2206. The amount of damages for death caused circumstances, — an amount to be fixed in the
by a crime or quasi-delict shall be at least three discretion of the court, the same to be
thousand pesos, even though there may have been considered separate from fines.
mitigating circumstances. In addition: (5) As attorney's fees and expresses of litigation, —
(1) The defendant shall be liable for the loss of the the actual amount thereof, (but only when a
earning capacity of the deceased, and the separate civil action to recover civil liability has
indemnity shall be paid to the heirs of the latter; been filed or when exemplary damages are
such indemnity shall in every case be assessed awarded).
and awarded by the court, unless the deceased (6) Interests in the proper cases.
on account of permanent physical disability not (7) It must be emphasized that the indemnities for
caused by the defendant, had no earning loss of earning capacity of the deceased and for
capacity at the time of his death; moral damages are recoverable separately from
(2) If the deceased was obliged to give support and in addition to the fixed sum of P12,000.00
according to the provisions of article 291, the corresponding to the indemnity for the sole fact
recipient who is not an heir called to the of death, and that these damages may, however,
decedent's inheritance by the law of testate or be respectively increased or lessened according
intestate succession, may demand support from to the mitigating or aggravating circumstances,
the person causing the death, for a period not except items 1 and 4 above, for obvious reasons.
exceeding five years, the exact duration to be
fixed by the court; Formula for the net earning capacity
(3) The spouse, legitimate and illegitimate People vs. Aringue (1997):
descendants and ascendants of the deceased Net earning capacity = Life expectancy * (Gross
may demand moral damages for mental annual income – Reasonable living expenses)
anguish by reason of the death of the deceased.
Where:
In death caused by breach of conduct by a common Life expectancy = 2/3 * (80 – age of victim at the
crime time of death)
Heirs of Raymundo Castro vs. Bustos (1969): when Tan, et al. vs. OMC Carriers, Inc. (2011): As a rule,
death occurs as a result of a crime, the heirs of the documentary evidence should be presented to
deceased are entitled to the following items of substantiate the claim for loss of earning capacity.
damages:
(1) As indemnity for the death of the victim of the By way of exception, damages for loss of earning
offense — P12,000.00, without the need of any capacity may be awarded despite the absence of
evidence or proof of damages, and even though documentary evidence when: (1) the deceased is self-
there may have been mitigating circumstances employed and earning less than the minimum wage
attending the commission of the offense. under current labor laws, in which case, judicial
(2) As indemnity for loss of earning capacity of the notice may be taken of the fact that in the deceased's
deceased — an amount to be fixed by the Court line of work, no documentary evidence is available; or
according to the circumstances of the deceased (2) the deceased is employed as a daily wage worker
related to his actual income at the time of death earning less than the minimum wage under current
and his probable life expectancy, the said labor laws.
indemnity to be assessed and awarded by the
court as a matter of duty, unless the deceased
had no earning capacity at said time on account
of permanent disability not caused by the
accused. If the deceased was obliged to give
Graduation of Damages
support, under Art. 291, Civil Code, the recipient DUTY OF THE INJURED PARTY
who is not an heir, may demand support from
the accused for not more than five years, the Art. 2203. The party suffering loss or injury must
exact duration to be fixed by the court. exercise the diligence of a good father of a family to
(3) As moral damages for mental anguish, — an minimize the damages resulting from the act or
amount to be fixed by the court. This may be omission in question.
recovered even by the illegitimate descendants
and ascendants of the deceased. Lim and Gunnaban vs. CA (2002): Article 2203 of the
Civil Code exhorts parties suffering from loss or injury
PAGE 373
to exercise the diligence of a good father of a family Cangco vs. Manila Railroad Co. (1918): In determining
to minimize the damages resulting from the act or the question of contributory negligence in
omission in question. One who is injured then by the performing such act — that is to say, whether the
wrongful or negligent act of another should exercise passenger acted prudently or recklessly — the age,
reasonable care and diligence to minimize the sex, and physical condition of the passenger are
resulting damage. Anyway, he can recover from the circumstances necessarily affecting the safety of the
wrongdoer money lost in reasonable efforts to passenger, and should be considered.
preserve the property injured and for injuries incurred
in attempting to prevent damage to it. PLAINTIFF’S NEGLIGENCE
Manila Electric vs. Remonquillo (1956): Even if Manila
BURDEN OF PROOF Electric is negligent, in order that it may be held
The DEFENDANT has the burden of proof to liable, its negligence must be the proximate and
establish that the victim, by the exercise of the direct cause of the accident.
diligence of a good father of a family, could have
mitigated the damages. In the absence of such Bernardo vs. Legaspi (1914): Both of the parties
proof, the amount of damages cannot be reduced. contributed to the proximate cause; hence, they
cannot recover from one another.
Note:
The victim is required only to take such steps as an IN CONTRACTS, QUASI-CONTRACTS AND QUASI-DELICTS
ordinary prudent man would reasonably adopt for Art. 2215 In contracts, quasi-contracts, and quasi-
his own interest. delicts, the court may equitably mitigate the
damages under circumstances other than the case
RULES referred to in the preceding article, as in the
following instances:
IN CRIMES
(1) That the plaintiff himself has contravened the
Art. 2204. In crimes, the damages to be adjudicated terms of the contract;
may be respectively increased or lessened according (2) That the plaintiff has derived some benefit as a
to the aggravating or mitigating circumstances. result of the contract;
(3) In cases where exemplary damages are to be
IN QUASI-DELICTS awarded, that the defendant acted upon the
advice of counsel;
Art. 2214. In quasi-delicts, the contributory (4) That the loss would have resulted in any event;
negligence of the plaintiff shall reduce the damages (5) That since the filing of the action, the defendant
that he may recover. has done his best to lessen the plaintiff's loss or
injury.
CONTRIBUTORY NEGLIGENCE
INSTANCES OF GROUNDS FOR MITIGATION OF DAMAGES
Genobiagon vs. CA (1989): The alleged contributory
negligence of the victim, if any, does not exonerate (a) For Contracts:
the accused in criminal cases committed through (1) Violation of terms of the contract by the
reckless imprudence, since one cannot allege the plaintiff himself;
negligence of another to evade the effects of his own (2) Obtention or enjoyment of benefit under the
negligence. contract by the plaintiff himself;
(3) Defendant acted upon advice of counsel in
cases where exemplary damages are to be
Rakes vs. Atlantic (1907): If so, the disobedience of
awarded such as under Articles 2230, 2231,
the plaintiff in placing himself in danger contributed
and 2232;
in some degree to the injury as a proximate,
(4) Defendant has done his best to lessen the
although not as its primary cause.
plaintiff’s injury or loss.
(Supreme Court in this case cited numerous foreign (b) For Quasi-Contracts:
precedents, mostly leaning towards the doctrine that (1) In cases where exemplary damages are to
contributory negligence on the part of the plaintiff be awarded such as in Art. 2232;
did not exonerate defendant from liability, but it led (2) Defendant has done his best to lessen the
to the reduction of damages awarded to the plantiff.) plaintiff’s injury or loss.
(c) For Quasi-Delicts:
PAGE 374
(1) That the loss would have resulted in any

event because of the negligence or omission Miscellaneous Rules
of another, and where such negligence or
omission is the immediate and proximate DAMAGES THAT CANNOT CO-EXIST
cause of the damage or injury;
(2) Defendant has done his best to lessen the NOMINAL WITH OTHER DAMAGES
plaintiff’s injury or loss. Art. 2223. The adjudication of nominal damages
RULE WHEN CONTRACTING PARTIES ARE IN PARI DELICTO involved and all accessory questions, as between the
Generally, parties to a void agreement cannot expect parties to the suit, or their respective heirs and
the aid of the law; the courts leave them as they are, assigns.
because they are deemed in pari delicto or "in equal
fault." In pari delicto is "a universal doctrine which
Vda. De Medina vs. Cresencia (1956): The propriety of
holds that no action arises, in equity or at law, from
the damages awarded has not been questioned,
an illegal contract; no suit can be maintained for its
Nevertheless, it is patent upon the record that the
specific performance, or to recover the property
award of P10,000 by way of nominal damages is
agreed to be sold or delivered, or the money agreed
untenable as a matter of law, since nominal
to be paid, or damages for its violation; and where
damages cannot co-exist with compensatory
the parties are in pari delicto, no affirmative relief of
damages. The purpose of nominal damages is to
any kind will be given to one against the other."
vindicate or recognize a right that has been violated,
in order to preclude further contest thereon; “and
This rule, however, is subject to exceptions that
not for the purpose of indemnifying the Plaintiff for
permit the return of that which may have been given
any loss suffered by him” (Articles 2221, 2223, new
under a void contract to:
Civil Code.) Since the court below has already
(a) the innocent party (Arts. 1411-1412, Civil Code);
awarded compensatory and exemplary damages
(b) the debtor who pays usurious interest (Art. 1413,
that are in themselves a judicial recognition that
Civil Code);
Plaintiff’s right was violated, the award of nominal
(c) the party repudiating the void contract before
damages is unnecessary and improper. Anyway, ten
the illegal purpose is accomplished or before
thousand pesos cannot, in common sense, be
damage is caused to a third person and if public
deemed “nominal”.
interest is subserved by allowing recovery (Art.
1414, Civil Code);
ACTUAL AND LIQUIDATED
(d) the incapacitated party if the interest of justice
so demands (Art. 1415, Civil Code); Art. 2226. Liquidated damages are those agreed
(e) the party for whose protection the prohibition by upon by the parties to a contract, to be paid in case
law is intended if the agreement is not illegal of breach thereof.
per se but merely prohibited and if public policy
would be enhanced by permitting recovery (Art. DAMAGES THAT MUST CO-EXIST
1416, Civil Code); and
(f) the party for whose benefit the law has been EXEMPLARY WITH MORAL, TEMPERATE, LIQUIDATED OR
intended such as in price ceiling laws (Art. 1417, COMPENSATORY
Civil Code) and labor laws (Arts. 1418-1419, Civil Francisco vs. GSIS (1963): There is no basis for
Code). awarding exemplary damages either, because this
species of damages is only allowed in addition to
LIQUIDATED DAMAGES moral, temperate, liquidated, or compensatory
Art. 2227. Liquidated damages, whether intended as damages, none of which have been allowed in this
an indemnity or a penalty, shall be equitably reduced case, for reasons herein before discussed.
if they are iniquitous or unconscionable.
Scott Consultants & Resource Development Corp. vs.
COMPROMISE CA (1995): There was, therefore, no legal basis for the
Art. 2031. The courts may mitigate the damages to award of exemplary damages since the private
be paid by the losing party who has shown a sincere respondent was not entitled to moral, temperate, or
desire for a compromise. compensatory damages and there was no
agreement on stipulated damages.
DAMAGES THAT MUST STAND ALONE
PAGE 375
NOMINAL DAMAGES
Art. 2223. The adjudication of nominal damages
involved and all accessory questions, as between the
parties to the suit, or their respective heirs and
assigns.
PAGE 376

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PERSONS & FAMILY RELATIONS

Persons and Personality ..... 10

Laws ........................................ 2 RESTRICTIONS ON CAPACITY TO ACT ........................... 10

WAIVER OF RIGHTS ............................................ 2 Family Code ..........................13

between ARTICLE 160 ......................................................... 41

Husband and Wife .............. 28 Paternity and Filiation .........42

Property Relations of the ILLEGITIMATE CHILDREN ................................. 44

Support ............................... 50 THE PERSON OF THE CHILDREN ................................ 54

WHO ARE OBLIGED ........................................... 50 EFFECTS OF PARENTAL AUTHORITY UPON THE

SUPPORT DURING MARRIAGE LITIGATION ......51 SUSPENSION OR TERMINATION OF PARENTAL

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

Retroactive Effect ................ 57 Characteristics .................... 66

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

WIFE AFTER AND DURING MARRIAGE ............. 58 BASED ON OWNERSHIP ................................... 69

Absence ............................... 59 BASED ON CONSUMABILITY............................. 70

DECLARATION OF ABSENCE ............................. 60 BASED ON THE CONSTITUTION ......................... 71

CANCELLATION OR CORRECTION OF ENTRIES PROTECTING PROPERTY ................................... 71

LIMITATIONS ON OWNERSHIP ..........................72

Quieting of Title or Interest in SOCIETIES WITH SECRET ARTICLES ............................ 84

and Removal or Prevention of RIGHT OF CO-OWNERS..................................... 84

REQUIREMENT ................................................. 81 TERMINATION/EXTINGUISHMENT ................... 85

CHARACTERISTICS OF CO-OWNERSHIP ........... 82 EFFECTS OF POSSESSION ................................ 90

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

Nuisance.............................. 114 RATIONALE ..................................................... 127

NUISANCE V. TRESPASS .................................. 114 KINDS OF PRESCRIPTION................................ 127

CLASSES .......................................................... 114 NO PRESCRIPTION APPLICABLE ..................... 128

Elements of EXTENT OF DAMAGES TO BE AWARDED ..................... 140

FROM THE VIEWPOINT OF Kinds of Civil Obligations .. 143

CONDITIONAL ................................................. 143

ALTERNATIVE OR FACULTATIVE ..................... 147 CONFUSION..................................................... 156

Joint and [Contracts] ......................... 160

SOLIDARY OBLIGATION .................................. 149 CAUSE ............................................................. 162

Formality ........................... 164 Parties to a

Defective Contracts .......... 165 ABSOLUTE INCAPACITY ................................. 172

VOIDABLE CONTRACTS ...................................166

VOID CONTRACTS ............................................ 167 EFFECTS OF INCAPACITY ................................ 173

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

SALES PARTICULAR KINDS ....................................... 175

Introduction ....................... 171 Obligations of the Seller to

OBLIGATIONS CREATED ................................. 171 Price ....................................176

PREPARATORY .............................................. 177

Transfer of Ownership ...... 179 WARRANTIES OF SELLER OF DOCUMENTS OF

WHEN LOSS OCCURRED PAYMENT OF PRICE ........................................ 186

WHEN LOSS OCCURRED AT TIME OF

SALE OF IMMOVABLES ........................................... 193

Extinguishment of Sale..... 194 TRANSFERS OR CONVEYANCES OF A UNIT OR

CONVENTIONAL REDEMPTION ..................... 195 RIGHTS OF A CONDOMINIUM UNIT OWNER

KINDS ............................................................ 206 RELATIONSHIP ............................................... 225

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

Provisions Common to FORM OF THE CONTRACT ............................... 237

Testate and Intestate DURATION OF THE CONTRACT ....................... 237

OBLIGATION OF PARTNERS TO THE

Contract of Partnership .. 236 OBLIGATION OF PARTNERS TO THE

ESSENTIAL FEATURES ................................... 236 RIGHT TO APPLY PAYMENT TO PARTNERSHIP

Rights and obligations of

OBLIGATION TO RENDER INFORMATION ...... 245

the Partnership ................ 246 LIABILITY OF OTHER PARTNERS FOR

LIABILITY OF INCOMING PARTNER ................ 249 SETTLING OF ACCOUNTS

Dissolution RIGHTS OF CREDITORS OF DISSOLVED

CASES WHERE ADVANTAGES OF LIMITED PARTNERSHIP ..... 255

EFFECT OF DISSOLUTION ON EXISTING LIABILITY FORMATION OF LIMITED PARTNERSHIP ....... 256

RIGHTS OF PARTNERS IN MANAGEMENT OF LIMITED PARTNERSHIP.... 257

EFFECT ........................................................... 262