I.

Effect and Application of Laws (Civil Code)

Laws shall take effect after fifteen days following the completion of their publication in the
Official Gazette, unless it is otherwise provided. This Code shall take effect one year after such
publication.

Ignorance of the law excuses no one from compliance therewith.

Laws shall have no retroactive effect, unless the contrary is provided.

Acts which are contrary to mandatory or prohibitory laws are void, except when the law
itself authorizes its validity.

Rights may be waived, unless the waiver is contrary to law, public order, public policy,
morals, or good customs, or prejudicial to a third person with a right recognized by law.

Laws are repealed only by subsequent ones, either expressly or impliedly. Their violation or
non-observance shall not be excused by disuse, custom or practice to the contrary.

When the courts declared a law to be inconsistent with the Constitution, the former shall be
void and the latter shall govern.
Administrative or executive acts, orders and regulations shall be valid only when they are not
contrary to the laws or the Constitution.

Judicial decisions applying or interpreting the laws or the Constitution shall form a part of
the legal system of the Philippines.

No judge or court shall decline to render judgment by reason of the silence, obscurity or
insufficiency of laws.

In case of doubt in the interpretation or application of laws, it is presumed that the

lawmaking body intended right and justice to prevail.

Customs which are contrary to law, public order or public policy shall not be countenanced.

A custom must be proved as a fact, according to the rules of evidence.

When the laws speak of years, months, days or nights, it shall be understood that years are of
three hundred sixty-five days each; months, of thirty days; days, of twenty-four hours; and nights
from sunset to sunrise.

If months are designated by their name, they shall be computed by the number of days
which they respectively have.

In computing a period, the first day shall be excluded, and the last day included
 Penal laws and those of public security and safety shall be obligatory upon all who live or
sojourn in Philippine territory, subject to the principles of public international law and to treaty
stipulations.

Laws relating to family rights and duties, or to the status, condition and legal capacity of
persons are binding upon citizens of the Philippines, even though living abroad.

Real property as well as personal property is subject to the law of the country where it is
situated.

However, intestate and testamentary successions, both with respect to the order of
succession and to the amount of successional rights and to the intrinsic validity of testamentary
provisions, shall be regulated by the national law of the person whose succession is under
consideration, whatever may be the nature of the property and regardless of the country wherein
said property may be found.
The forms and solemnities of contracts, wills, and other public instruments shall be
governed by the laws of the country in which they are executed.

When the acts referred to are executed before the diplomatic or consular officials of the
Republic of the Philippines in a foreign country, the solemnities established by Philippine laws shall
be observed in their execution.

Prohibitive laws concerning persons, their acts or property, and those which have for their
object public order, public policy and good customs shall not be rendered ineffective by laws or
judgments promulgated, or by determinations or conventions agreed upon in a foreign country.

In matters which are governed by the Code of Commerce and special laws, their deficiency
shall be supplied by the provisions of the Civil Code.

II. Human Relations

Every person must, in the exercise of his rights and in the performance of his duties, act
with justice, give everyone his due, and observe honesty and good faith.

Every person who, contrary to law, wilfully or negligently causes damage to another, shall
indemnify the latter for the same.

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.

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.

PERSONS
I. Persons and Personality

Juridical capacity, which is the fitness to be the subject of legal relations, is inherent in every
natural person and is lost only through death.

Capacity to act, which is the power to do acts with legal effect, is acquired and may be lost.

Minority, insanity or imbecility, the state of being a deaf-mute, prodigality and civil
interdiction are mere restrictions on capacity to act, and do not exempt the incapacitated person
from certain obligations, as when the latter arise from his acts or from property relations, such as
easements.

The following circumstances, among others, modify or limit capacity to act: age, insanity,
imbecility, the state of being a deaf-mute, penalty, prodigality, family relations, alienage, absence,
insolvency and trusteeship. Capacity to act is not limited on account of religious belief or political
opinion.

A married woman, eighteen (18) years of age or over, is qualified for all acts of civil life,
except in cases specified by law.

Birth determines personality; but the conceived child shall be considered born for all
purposes that are favorable to it, provided it be born later with the conditions specified in the
following article.

For civil purposes, the foetus is considered born if it is alive at the time it is completely
delivered from the mother's womb. However, if the foetus had an intrauterine life of less than seven
months, it is not deemed born if it dies within twenty-four hours after its complete delivery from the
maternal womb.

Civil personality is extinguished by death. The effect of death upon the rights and
obligations of the deceased is determined by law, by contract and by will.

II. Marriage

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

No marriage shall be valid, unless these essential requisites are present:

(1) Legal capacity of the contracting parties who must be a male and a female; and

(2) Consent freely given in the presence of the solemnizing officer.

The formal requisites of marriage are:

 (1) Authority of the solemnizing officer;

(2) A valid marriage license;

(3) A marriage ceremony which takes place with the appearance of the contracting parties
before the solemnizing officer and their personal declaration that they take each other as husband
and wife in the presence of not less than two witnesses of legal age.

The absence of any of the essential or formal requisites shall render the marriage void ab
initio, except as stated in Article 35 (2).

A defect in any of the essential requisites shall not affect the validity of the marriage but the
party or parties responsible for the irregularity shall be civilly, criminally and administratively liable.

Any male or female of the age of eighteen years or upwards not under any of the
impediments mentioned in Articles 37 and 38, may contract marriage.

No prescribed form or religious rite for the solemnization of the marriage is required. It shall
be necessary, however, for the contracting parties to appear personally before the solemnizing
officer and declare in the presence of not less than two witnesses of legal age that they take each
other as husband and wife. This declaration shall be contained in the marriage certificate which shall
be signed by the contracting parties and their witnesses and attested by the solemnizing officer.

In case of a marriage in articulo mortis, when the party at the point of death is unable to sign
the marriage certificate, it shall be sufficient for one of the witnesses to the marriage to write the
name of said party, which fact shall be attested by the solemnizing officer.

Marriage may be solemnized by:

(1) Any incumbent member of the judiciary within the court's jurisdiction;

(2) Any priest, rabbi, imam, or minister of any church or religious sect duly authorized by his
church or religious sect and registered with the civil registrar general, acting within the limits of the
written authority granted by his church or religious sect and provided that at least one of the
contracting parties belongs to the solemnizing officer's church or religious sect;

(3) Any ship captain or airplane chief only in the case mentioned in Article 31;

(4) Any military commander of a unit to which a chaplain is assigned, in the absence of the
latter, during a military operation, likewise only in the cases mentioned in Article 32;
(5) Any consul-general, consul or vice-consul in the case provided in Article 10.

The marriage shall be solemnized publicly in the chambers of the judge or in open court, in
the church, chapel or temple, or in the office the consul-general, consul or vice-consul, and not
elsewhere, except in cases of marriages contracted on the point of death or in remote places in
accordance with Article 29 of this Code, or where both of the parties request the solemnizing officer
in writing in which case the marriage may be solemnized at a house or place designated by them in a
sworn statement to that effect.
 A marriage license shall be issued by the local civil registrar of the city or municipality where
either contracting party habitually resides, except in marriages where no license is required.

The license shall be valid in any part of the Philippines for a period of one hundred twenty
(120) days from the date of issue, and shall be deemed automatically cancelled at the expiration of
the said period if the contracting parties have not made use of it. The expiry date shall be stamped in
bold characters on the face of every license issued.

Marriages between Filipino citizens abroad may be solemnized by a consul-general, consul or

vice-consul of the Republic of the Philippines. The issuance of the marriage license and the duties of
the local civil registrar and of the solemnizing officer with regard to the celebration of marriage shall
be performed by said consular official.

When either or both of the contracting parties are citizens of a foreign country, it shall be
necessary for them before a marriage license can be obtained, to submit a certificate of legal capacity
to contract marriage, issued by their respective diplomatic or consular officials.

Stateless persons or refugees from other countries shall, in lieu of the certificate of legal
capacity herein required, submit an affidavit stating the circumstances showing such capacity to
contract marriage.

In case either or both of the contracting parties are at the point of death, the marriage may
be solemnized without necessity of a marriage license and shall remain valid even if the ailing party
subsequently survives.

A marriage in articulo mortis between passengers or crew members may also be solemnized by
a ship captain or by an airplane pilot not only while the ship is at sea or the plane is in flight, but also
during stopovers at ports of call.

A military commander of a unit, who is a commissioned officer, shall likewise have authority
to solemnize marriages in articulo mortis between persons within the zone of military operation,
whether members of the armed forces or civilians.

No license shall be necessary for the marriage of a man and a woman who have lived
together as husband and wife for at least five years and without any legal impediment to marry each
other. The contracting parties shall state the foregoing facts in an affidavit before any person
authorized by law to administer oaths. The solemnizing officer shall also state under oath that he
ascertained the qualifications of the contracting parties are found no legal impediment to the
marriage

The marriage certificate, in which the parties shall declare that they take each other as
husband and wife, shall also state:

(1) The full name, sex and age of each contracting party;

(2) Their citizenship, religion and habitual residence;

 (3) The date and precise time of the celebration of the marriage;

(4) That the proper marriage license has been issued according to law;
(5) That either or both of the contracting parties have secured the parental consent in
appropriate cases;

(6) That either or both of the contracting parties have complied with the legal requirement
regarding parental advice in appropriate cases; and

(7) That the parties have entered into marriage settlement, if any, attaching a copy thereof.

All marriages solemnized outside the Philippines, in accordance with the laws in force in the
country where they were solemnized, and valid there as such, shall also be valid in this country,
except those prohibited under Articles 35 (1), (4), (5) and (6), 36, 37 and 38.

Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a
divorce is thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry,
the Filipino spouse shall have capacity to remarry under Philippine law.

The judgment of annulment or of absolute nullity of the marriage, the partition and
distribution of the properties of the spouses and the delivery of the children's presumptive legitimes
shall be recorded in the appropriate civil registry and registries of property; otherwise, the same shall
not affect third persons.

Either of the former spouses may marry again after compliance with the foregoing
requirements; otherwise, the subsequent marriage shall be null and void.

The following marriages shall be void from the beginning:

(1) Contracted by any party below eighteen (18) years of age even with the consent of
parents or guardians;

(2) Solemnized by any person not legally authorized to perform marriages unless such
marriages were contracted with either or both parties believing in good faith that the solemnizing
officer had the legal authority to do so;

(3) Solemnized without license;

(4) Bigamous or polygamous marriages not failing under Article 41;

(5) Contracted through mistake of one contracting party as to the identity of the other; and

(6) Subsequent marriages that are void under Article 53.

A marriage contracted by any party who, at the time of the celebration, was psychologically
incapacitated to comply with the essential marital obligations of marriage, even if such incapacity
becomes manifest only after its solemnization.

Whether the relationship between the parties be legitimate or illegitimate:

 (1) Between ascendants and descendants of any degree; and

(2) Between brothers and sisters, whether of the full or half blood.

For reasons of public policy:

(1) Between collateral blood relatives whether legitimate or illegitimate, up to the fourth civil
degree;

(2) Between step-parents and step-children;

(3) Between parents-in-law and children-in-law;

(4) Between the adopting parent and the adopted child;

(5) Between the surviving spouse of the adopting parent and the adopted child;

(6) Between the surviving spouse of the adopted child and the adopter;

(7) Between an adopted child and a legitimate child of the adopter;

(8) Between adopted children of the same adopter; and

(9) Between parties where one, with the intention to marry the other, killed that other
person's spouse, or his or her own spouse.

The action or defense for the declaration of absolute nullity shall not prescribe.

In case of marriage celebrated before the effectivity of this Code and falling under Article 36,
such action or defense shall prescribe in ten (10) years after this Code shall take effect.

The absolute nullity of a previous marriage may be invoked for purposes of remarriage on
the basis solely of a final judgment declaring such previous marriage void.

A marriage contracted by any person during subsistence of a previous marriage shall be null
and void, unless before the celebration of the subsequent marriage, the prior spouse had been absent
for four consecutive years and the spouse present has a well-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 of only two (2) years shall be
sufficient.

For the purpose of contracting the subsequent marriage under the preceding paragraph, the
spouse present must institute a summary proceeding for the declaration of presumptive death of the
absentee, without prejudice to the effect of reappearance of the absent spouse.
 The subsequent marriage referred to shall be automatically terminated by the recording of
the affidavit of reappearance of the absent spouse, unless there is a judgment annulling the previous
marriage or declaring it void ab initio.

A sworn statement of the fact and circumstances of reappearance shall be recorded in the
civil registry of the residence of the parties to the subsequent marriage at the instance of any
interested person, with due notice to the spouses of the subsequent marriage and without prejudice
to the fact of reappearance being judicially determined in case such fact is disputed.

Effects of termination of the subsequent marriage:

(1) The children of the subsequent marriage conceived prior to its termination shall be
considered legitimate;

(2) The absolute community of property or the conjugal partnership, as the case may be,
shall be dissolved and liquidated, but if either spouse contracted said marriage in bad faith, his or her
share of the net profits of the community property or conjugal partnership property shall be
forfeited in favor of the common children or, if there are none, the children of the guilty spouse by a
previous marriage or in default of children, the innocent spouse;

(3) Donations by reason of marriage shall remain valid, except that if the donee contracted
the marriage in bad faith, such donations made to said donee are revoked by operation of law;

(4) The innocent spouse may revoke the designation of the other spouse who acted in bad
faith as beneficiary in any insurance policy, even if such designation be stipulated as irrevocable; and

(5) The spouse who contracted the subsequent marriage in bad faith shall be disqualified to
inherit from the innocent spouse by testate and intestate succession

If both spouses of the subsequent marriage acted in bad faith, said marriage shall be void ab
initio and all donations by reason of marriage and testamentary dispositions made by one in favor of
the other are revoked by operation of law.

A marriage may be annulled for any of the following causes, existing at the time of the
marriage:

(1) The party in whose behalf it is sought to have the marriage annulled was eighteen years
of age or over but below twenty-one, and the marriage was solemnized without the consent of the
parents, guardian or person having substitute parental authority over the party, in that order, unless
after attaining the age of twenty-one, such party freely cohabited with the other and both lived
together as husband and wife;

(2) Either party was of unsound mind, unless such party after coming to reason, freely
cohabited with the other as husband and wife;
 (3) The consent of either party was obtained by fraud, unless such party afterwards, with full
knowledge of the facts constituting the fraud, freely cohabited with the other as husband and wife;

(4) The consent of either party was obtained by force, intimidation or undue influence,
unless the same having disappeared or ceased, such party thereafter freely cohabited with the other
as husband and wife;

(5) Either party was physically incapable of consummating the marriage with the other, and
such incapacity continues and appears to be incurable; or

(6) Either party was afflicted with a sexually-transmissible disease found to be serious and
appears to be incurable.

Any of the following circumstances shall constitute fraud referred to in Number 3:

(1) Non-disclosure of a previous conviction by final judgment of the other party of a crime
involving moral turpitude;

(2) Concealment by the wife of the fact that at the time of the marriage, she was pregnant by
a man other than her husband;

(3) Concealment of sexually transmissible disease, regardless of its nature, existing at the time
of the marriage; or

(4) Concealment of drug addiction, habitual alcoholism or homosexuality or lesbianism

existing at the time of the marriage.

No other misrepresentation or deceit as to character, health, rank, fortune or chastity shall

constitute such fraud as will give grounds for action for the annulment of marriage

The action for annulment of marriage must be filed by the following persons and within the
periods indicated:

(1) By the party whose parent or guardian did not give his or her consent, within five (5)
years after attaining the age of twenty-one, or by the parent or guardian or person having legal
charge of the minor, at any time before such party has reached the age of twenty-one;

(2) By the sane spouse, who had no knowledge of the other's insanity; or by any relative or
guardian or person having legal charge of the insane, at any time before the death of either party, or
by the insane spouse during a lucid interval or after regaining sanity;

(3) By the injured party, within five (5) years after the discovery of the fraud;

(4) By the injured party, within five (5) years from the time the force, intimidation or undue
influence disappeared or ceased;

(5) By the injured party, within five (5) years after the marriage.
 In all cases of annulment or declaration of absolute nullity of marriage, the Court shall order
the prosecuting attorney or fiscal assigned to it to appear on behalf of the State to take steps to
prevent collusion between the parties and to take care that evidence is not fabricated or suppressed.

No judgment shall be based upon a stipulation of facts or confession of judgment.

During the pendency of the action and in the absence of adequate provisions in a written
agreement between the spouses, the Court shall provide for the support of the spouses and the
custody and support of their common children. The Court shall give paramount consideration to the
moral and material welfare of said children and their choice of the parent with whom they wish to
remain. It shall also provide for appropriate visitation rights of the other parent.

The effects provided for by paragraphs (2), (3), (4) and (5) of Article 43 and by Article 44
shall also apply in the proper cases to marriages which are declared ab initio or annulled by final
judgment under Articles 40 and 45.

The final judgment in such cases shall provide for the liquidation, partition and distribution
of the properties of the spouses, the custody and support of the common children, and the delivery
of third presumptive legitimes, unless such matters had been adjudicated in previous judicial
proceedings.

All creditors of the spouses as well as of the absolute community or the conjugal partnership
shall be notified of the proceedings for liquidation.

In the partition, the conjugal dwelling and the lot on which it is situated, shall be adjudicated
in accordance with the provisions of Articles 102 and 129.

In said partition, the value of the presumptive legitimes of all common children, computed
as of the date of the final judgment of the trial court, shall be delivered in cash, property or sound
securities, unless the parties, by mutual agreement judicially approved, had already provided for such
matters.

The children or their guardian or the trustee of their property may ask for the enforcement
of the judgment.

The delivery of the presumptive legitimes shall in no way prejudice the ultimate successional
rights of the children accruing upon the death of either of both of the parents; but the value of the
properties already received under the decree of annulment or absolute nullity shall be considered as
advances on their legitime

The judgment of annulment or of absolute nullity of the marriage, the partition and
distribution of the properties of the spouses and the delivery of the children's presumptive legitimes
shall be recorded in the appropriate civil registry and registries of property; otherwise, the same shall
not affect third persons.

Either of the former spouses may marry again after compliance with the requirements of the
immediately preceding Article; otherwise, the subsequent marriage shall be null and void.
 Children conceived or born before the judgment of annulment or absolute nullity of the
marriage under Article 36 has become final and executory shall be considered legitimate.

Children conceived or born of the subsequent marriage under Article 53 shall likewise be
legitimate.

III. Legal Separation

A petition for legal separation may be filed on any of the following grounds:

(1) Repeated physical violence or grossly abusive conduct directed against the petitioner, a
common child, or a child of the petitioner;

(2) Physical violence or moral pressure to compel the petitioner to change religious or
political affiliation;

(3) Attempt of respondent to corrupt or induce the petitioner, a common child, or a child of
the petitioner, to engage in prostitution, or connivance in such corruption or inducement;

(4) Final judgment sentencing the respondent to imprisonment of more than six years, even
if pardoned;

(5) Drug addiction or habitual alcoholism of the respondent;

(6) Lesbianism or homosexuality of the respondent;

(7) Contracting by the respondent of a subsequent bigamous marriage, whether in the

Philippines or abroad;

(8) Sexual infidelity or perversion;

(9) Attempt by the respondent against the life of the petitioner; or

(10) Abandonment of petitioner by respondent without justifiable cause for more than one year.

The term "child" shall include a child by nature or by adoption.

The petition for legal separation shall be denied on any of the following grounds:

(1) The aggrieved party has condoned the offense or act complained of;

(2) The aggrieved party has consented to the commission of the offense or act complained
of;

(3) There is connivance between the parties in the commission of the offense or act
constituting the ground for legal separation;
 (4) Both parties have given ground for legal separation;

(5) There is collusion between the parties to obtain decree of legal separation; or

(6) The action is barred by prescription

An action for legal separation shall be filed within five (5) years from the time of the
occurrence of the cause.

An action for legal separation shall in no case be tried before six (6) months shall have
elapsed since the filing of the petition.

No legal separation may be decreed unless the Court has taken steps toward the
reconciliation of the spouses and is fully satisfied, despite such efforts, that reconciliation is highly
improbable.

No decree of legal separation shall be based upon a stipulation of facts or a confession of

judgment.

In any case, the Court shall order the prosecuting attorney or fiscal assigned to it to take
steps to prevent collusion between the parties and to take care that the evidence is not fabricated or
suppressed.

After the filing of the petition for legal separation, the spouses shall be entitled to live
separately from each other.

The court, in the absence of a written agreement between the spouses, shall designate either
of them or a third person to administer the absolute community or conjugal partnership property.
The administrator appointed by the court shall have the same powers and duties as those of a
guardian under the Rules of Court.

During the pendency of the action for legal separation, the provisions of Article 49 shall
apply to the support of the spouses and the custody and support of the common children.

The decree of legal separation shall have the following effects:

(1) The spouses shall be entitled to live separately from each other, but the marriage bonds
shall not be severed;

(2) The absolute community or the conjugal partnership shall be dissolved and liquidated but
the offending spouse shall have no right to any share of the net profits earned by the absolute
community or the conjugal partnership, which shall be forfeited in accordance with the provisions
of Article 43(2);

(3) The custody of the minor children shall be awarded to the innocent spouse, subject to
the provisions of Article 213 of this Code; and
 (4) The offending spouse shall be disqualified from inheriting from the innocent spouse by
intestate succession. Moreover, provisions in favor of the offending spouse made in the will of the
innocent spouse shall be revoked by operation of law.

After the finality of the decree of legal separation, the innocent spouse may revoke the
donations made by him or by her in favor of the offending spouse, as well as the designation of the
latter as beneficiary in any insurance policy, even if such designation be stipulated as irrevocable. The
revocation of the donations shall be recorded in the registries of property in the places where the
properties are located. Alienations, liens and encumbrances registered in good faith before the
recording of the complaint for revocation in the registries of property shall be respected. The
revocation of or change in the designation of the insurance beneficiary shall take effect upon written
notification thereof to the insured.

The action to revoke the donation must be brought within five (5) years from the time the
decree of legal separation become final.
If the spouses should reconcile, a corresponding joint manifestation under oath duly signed by them
shall be filed with the court in the same proceeding for legal separation.

The reconciliation referred to in the preceding Articles shall have the following
consequences:

(1) The legal separation proceedings, if still pending, shall thereby be terminated at whatever
stage; and

(2) The final decree of legal separation shall be set aside, but the separation of property and
any forfeiture of the share of the guilty spouse already effected shall subsist, unless the spouses agree
to revive their former property regime.

The court's order containing the foregoing shall be recorded in the proper civil registries.

The agreement to revive the former property regime shall be executed under oath and shall
specify:

(1) The properties to be contributed anew to the restored regime;

(2) Those to be retained as separated properties of each spouse; and

(3) The names of all their known creditors, their addresses and the amounts owing to each.
The agreement of revival and the motion for its approval shall be filed with the court in the
same proceeding for legal separation, with copies of both furnished to the creditors named therein.
After due hearing, the court shall, in its order, take measure to protect the interest of creditors and
such order shall be recorded in the proper registries of properties.

The recording of the ordering in the registries of property shall not prejudice any creditor
not listed or not notified, unless the debtor-spouse has sufficient separate properties to satisfy the
creditor's claim.
IV. Rights and Obligations Between Husband and Wife

The husband and wife are obliged to live together, observe mutual love, respect and fidelity,
and render mutual help and support.

The husband and wife shall fix the family domicile. In case of disagreement, the court shall
decide.

The court may exempt one spouse from living with the other if the latter should live abroad
or there are other valid and compelling reasons for the exemption. However, such exemption shall
not apply if the same is not compatible with the solidarity of the family.

The spouses are jointly responsible for the support of the family. The expenses for such
support and other conjugal obligations shall be paid from the community property and, in the
absence thereof, from the income or fruits of their separate properties. In case of insufficiency or
absence of said income or fruits, such obligations shall be satisfied from the separate properties.

The management of the household shall be the right and the duty of both spouses. The
expenses for such management shall be paid in accordance with the provisions of Article 70.

When one of the spouses neglects his or her duties to the conjugal union or commits acts
which tend to bring danger, dishonor or injury to the other or to the family, the aggrieved party may
apply to the court for relief.

Either spouse may exercise any legitimate profession, occupation, business or activity
without the consent of the other. The latter may object only on valid, serious, and moral grounds.

In case of disagreement, the court shall decide whether or not:

(1) The objection is proper, and

 (2) Benefit has occurred to the family prior to the objection or thereafter. If the benefit
accrued prior to the objection, the resulting obligation shall be enforced against the separate
property of the spouse who has not obtained consent.

V. Property Relations of the Spouses

The property relationship between husband and wife shall be governed in the following
order:

(1) By marriage settlements executed before the marriage;

(2) By the provisions of this Code; and

(3) By the local custom.

The future spouses may, in the marriage settlements, agree upon the regime of absolute
community, conjugal partnership of gains, complete separation of property, or any other regime. In
the absence of a marriage settlement, or when the regime agreed upon is void, the system of
absolute community of property as established in this Code shall govern.

In order that any modification in the marriage settlements may be valid, it must be made
before the celebration of the marriage, subject to the provisions of Articles 66, 67, 128, 135 and 136.

The marriage settlements and any modification thereof shall be in writing, signed by the
parties and executed before the celebration of the marriage. They shall not prejudice third persons
unless they are registered in the local civil registry where the marriage contract is recorded as well as
in the proper registries of properties.

A minor who according to law may contract marriage may also execute his or her marriage
settlements, but they shall be valid only if the persons designated in Article 14 to give consent to the
marriage are made parties to the agreement.

For the validity of any marriage settlement executed by a person upon whom a sentence of
civil interdiction has been pronounced or who is subject to any other disability, it shall be
indispensable for the guardian appointed by a competent court to be made a party thereto

In the absence of a contrary stipulation in a marriage settlement, the property relations of the
spouses shall be governed by Philippine laws, regardless of the place of the celebration of the
marriage and their residence.

This rule shall not apply:

(1) Where both spouses are aliens;

(2) With respect to the extrinsic validity of contracts affecting property not situated in the
Philippines and executed in the country where the property is located; and
 (3) With respect to the extrinsic validity of contracts entered into in the Philippines but
affecting property situated in a foreign country whose laws require different formalities for its
extrinsic validity.

Everything stipulated in the settlements or contracts referred to in the preceding articles in

consideration of a future marriage, including donations between the prospective spouses made
therein, shall be rendered void if the marriage does not take place. However, stipulations that do not
depend upon the celebration of the marriages shall be valid.

Donations by reason of marriage are those which are made before its celebration, in
consideration of the same, and in favor of one or both of the future spouses.

May be revoked by the donor in the following cases:

(1) If the marriage is not celebrated or judicially declared void ab initio except donations made
in the marriage settlements, which shall be governed by Article 81;

(2) When the marriage takes place without the consent of the parents or guardian, as
required by law;

(3) When the marriage is annulled, and the donee acted in bad faith;

(4) Upon legal separation, the donee being the guilty spouse;

(5) If it is with a resolutory condition and the condition is complied with;

(6) When the donee has committed an act of ingratitude as specified by the provisions of the
Civil Code on donations in general
Donations by reason of marriage shall remain valid, except that if the donee contracted the
marriage in bad faith, such donations made to said donee are revoked by operation of law;

The effects provided for by paragraphs (2), (3), (4) and (5) of Article 43 and by Article 44
shall also apply in the proper cases to marriages which are declared ab initio or annulled by final
judgment under Articles 40 and 45.

The final judgment in such cases shall provide for the liquidation, partition and distribution
of the properties of the spouses, the custody and support of the common children, and the delivery
of third presumptive legitimes, unless such matters had been adjudicated in previous judicial
proceedings.

All creditors of the spouses as well as of the absolute community or the conjugal partnership
shall be notified of the proceedings for liquidation.

In the partition, the conjugal dwelling and the lot on which it is situated, shall be adjudicated
in accordance with the provisions of Articles 102 and 129.

Every donation or grant of gratuitous advantage, direct or indirect, between the spouses
during the marriage shall be void, except moderate gifts which the spouses may give each other on
the occasion of any family rejoicing. The prohibition shall also apply to persons living together as
husband and wife without a valid marriage.

The future spouses may, in the marriage settlements, agree upon the regime of absolute
community, conjugal partnership of gains, complete separation of property, or any other regime. In
the absence of a marriage settlement, or when the regime agreed upon is void, the system of
absolute community of property as established in this Code shall govern

If the future spouses agree upon a regime other than the absolute community of property,
they cannot donate to each other in their marriage settlements more than one-fifth of their present
property. Any excess shall be considered void.

Donations of future property shall be governed by the provisions on testamentary

succession and the formalities of wills.

Donations by reason of marriage of property subject to encumbrances shall be valid. In case

of foreclosure of the encumbrance and the property is sold for less than the total amount of the
obligation secured, the donee shall not be liable for the deficiency. If the property is sold for more
than the total amount of said obligation, the donee shall be entitled to the excess.

The absolute community of property between spouses shall commence at the precise
moment that the marriage is celebrated. Any stipulation, express or implied, for the commencement
of the community regime at any other time shall be void.

No waiver of rights, shares and effects of the absolute community of property during the
marriage can be made except in case of judicial separation of property.

When the waiver takes place upon a judicial separation of property, or after the marriage has
been dissolved or annulled, the same shall appear in a public instrument and shall be recorded as
provided in Article 77. The creditors of the spouse who made such waiver may petition the court to
rescind the waiver to the extent of the amount sufficient to cover the amount of their credits.

The provisions on co-ownership shall apply to the absolute community of property between
the spouses in all matters not provided for.

Community Property consists of all the property owned by the spouses at the time of the
celebration of the marriage or acquired thereafter.

Excluded are the following:

(1) Property acquired during the marriage by gratuitous title by either spouse, and the fruits
as well as the income thereof, if any, unless it is expressly provided by the donor, testator or grantor
that they shall form part of the community property;

(2) Property for personal and exclusive use of either spouse. However, jewelry shall form
part of the community property;
 (3) Property acquired before the marriage by either spouse who has legitimate descendants
by a former marriage, and the fruits as well as the income, if any, of such property.
Property acquired during the marriage is presumed to belong to the community, unless it is
proved that it is one of those excluded therefrom.

Charges Upon and Obligations of the Community Property:

(1) The support of the spouses, their common children, and legitimate children of either
spouse; however, the support of illegitimate children shall be governed by the provisions of this
Code on Support;

(2) All debts and obligations contracted during the marriage by the designated administrator-
spouse for the benefit of the community, or by both spouses, or by one spouse with the consent of
the other;

(3) Debts and obligations contracted by either spouse without the consent of the other to
the extent that the family may have been benefited;

(4) All taxes, liens, charges and expenses, including major or minor repairs, upon the
community property;

(5) All taxes and expenses for mere preservation made during marriage upon the separate
property of either spouse used by the family;
(6) Expenses to enable either spouse to commence or complete a professional or vocational
course, or other activity for self-improvement;

(7) Antenuptial debts of either spouse insofar as they have redounded to the benefit of the
family;

(8) The value of what is donated or promised by both spouses in favor of their common
legitimate children for the exclusive purpose of commencing or completing a professional or
vocational course or other activity for self-improvement;

(9) Antenuptial debts of either spouse other than those falling under paragraph (7) of this
Article, the support of illegitimate children of either spouse, and liabilities incurred by either spouse
by reason of a crime or a quasi-delict, in case of absence or insufficiency of the exclusive property of
the debtor-spouse, the payment of which shall be considered as advances to be deducted from the
share of the debtor-spouse upon liquidation of the community; and

(10) Expenses of litigation between the spouses unless the suit is found to be groundless.

If the community property is insufficient to cover the foregoing liabilities, except those
falling under paragraph (9), the spouses shall be solidarily liable for the unpaid balance with their
separate properties.

Whatever may be lost during the marriage in any game of chance, betting, sweepstakes, or
any other kind of gambling, whether permitted or prohibited by law, shall be borne by the loser and
shall not be charged to the community but any winnings therefrom shall form part of the
community property.

The administration and enjoyment of the community property shall belong to both spouses
jointly. In case of disagreement, the husband's decision shall prevail, subject to recourse to the court
by the wife for proper remedy, which must be availed of within five years from the date of the
contract implementing such decision.

In the event that one spouse is incapacitated or otherwise unable to participate in the
administration of the common properties, the other spouse may assume sole powers of
administration. These powers do not include disposition or encumbrance without authority of the
court or the written consent of the other spouse. In the absence of such authority or consent, the
disposition or encumbrance shall be void. However, the transaction shall be construed as a
continuing offer on the part of the consenting spouse and the third person, and may be perfected as
a binding contract upon the acceptance by the other spouse or authorization by the court before the
offer is withdrawn by either or both offerors.

Either spouse may dispose by will of his or her interest in the community property.

Neither spouse may donate any community property without the consent of the other.
However, either spouse may, without the consent of the other, make moderate donations from the
community property for charity or on occasions of family rejoicing or family distress.

Dissolution of Community Regime:

(1) Upon the death of either spouse;

(2) There is a decree of legal separation;
(3) The marriage is annulled or declared void; or
(4) Judicial separation of property during the marriage under Article 134 to 138.

The separation in fact between husband and wife shall not affect the regime of absolute
community except that:

(1) The spouse who leaves the conjugal home or refuses to live therein, without just cause,
shall not have the right to be supported;

(2) When the consent of one spouse to any transaction of the other is required by law,
judicial authorization shall be obtained in a summary proceeding;

(3) In the absence of sufficient community property, the separate property of both spouses
shall be solidarily liable for the support of the family. The spouse present shall, upon proper petition
in a summary proceeding, be given judicial authority to administer or encumber any specific separate
property of the other spouse and use the fruits or proceeds thereof to satisfy the latter's share.

If a spouse without just cause abandons the other or fails to comply with his or her
obligations to the family, the aggrieved spouse may petition the court for receivership, for judicial
separation of property or for authority to be the sole administrator of the absolute community,
subject to such precautionary conditions as the court may impose.
 The obligations to the family mentioned in the preceding paragraph refer to marital, parental
or property relations.

A spouse is deemed to have abandoned the other when her or she has left the conjugal
dwelling without intention of returning. The spouse who has left the conjugal dwelling for a period
of three months or has failed within the same period to give any information as to his or her
whereabouts shall be prima facie presumed to have no intention of returning to the conjugal
dwelling.

Procedure in the liquidation of the Absolute Community Assets and Liabilities:

(1) An inventory shall be prepared, listing separately all the properties of the absolute
community and the exclusive properties of each spouse.

(2) The debts and obligations of the absolute community shall be paid out of its assets. In
case of insufficiency of said assets, the spouses shall be solidarily liable for the unpaid balance with
their separate properties in accordance with the provisions of the second paragraph of Article 94.

(3) Whatever remains of the exclusive properties of the spouses shall thereafter be delivered
to each of them.
(4) The net remainder of the properties of the absolute community shall constitute its net
assets, which shall be divided equally between husband and wife, unless a different proportion or
division was agreed upon in the marriage settlements, or unless there has been a voluntary waiver of
such share provided in this Code. For purpose of computing the net profits subject to forfeiture in
accordance with Articles 43, No. (2) and 63, No. (2), the said profits shall be the increase in value
between the market value of the community property at the time of the celebration of the marriage
and the market value at the time of its dissolution.

(5) The presumptive legitimes of the common children shall be delivered upon partition, in
accordance with Article 51.

(6) Unless otherwise agreed upon by the parties, in the partition of the properties, the
conjugal dwelling and the lot on which it is situated shall be adjudicated to the spouse with whom
the majority of the common children choose to remain. Children below the age of seven years are
deemed to have chosen the mother, unless the court has decided otherwise. In case there in no such
majority, the court shall decide, taking into consideration the best interests of said children.

Upon the termination of the marriage by death, the community property shall be liquidated
in the same proceeding for the settlement of the estate of the deceased.

If no judicial settlement proceeding is instituted, the surviving spouse shall liquidate the
community property either judicially or extra-judicially within six months from the death of the
deceased spouse. If upon the lapse of the six months period, no liquidation is made, any disposition
or encumbrance involving the community property of the terminated marriage shall be void.
 Should the surviving spouse contract a subsequent marriage without compliance with the
foregoing requirements, a mandatory regime of complete separation of property shall govern the
property relations of the subsequent marriage.

Whenever the liquidation of the community properties of two or more marriages contracted
by the same person is carried out simultaneously, the respective capital, fruits and income of each
community shall be determined upon such proof as may be considered according to the rules of
evidence. In case of doubt as to which community the existing properties belong, the same shall be
divided between the different communities in proportion to the capital and duration of each.

Conjugal partnership of gains:

In case the future spouses agree in the marriage settlements that the regime of conjugal
partnership gains shall govern their property relations during marriage, the provisions in this
Chapter shall be of supplementary application.

The provisions shall also apply to conjugal partnerships of gains already established between
spouses before the effectivity of this Code, without prejudice to vested rights already acquired in
accordance with the Civil Code or other laws, as provided in Article 256.

Under the regime of conjugal partnership of gains, the husband and wife place in a common
fund the proceeds, products, fruits and income from their separate properties and those acquired by
either or both spouses through their efforts or by chance, and, upon dissolution of the marriage or
of the partnership, the net gains or benefits obtained by either or both spouses shall be divided
equally between them, unless otherwise agreed in the marriage settlements.

The rules provided in Articles 88 and 89 shall also apply to conjugal partnership of gains.

The conjugal partnership shall be governed by the rules on the contract of partnership in all
that is not in conflict with what is expressly determined in this Chapter or by the spouses in their
marriage settlements.

Exclusive Property of Each Spouse:

(1) Brought to the marriage as his or her own;

(2) Each acquires during the marriage by gratuitous title;

(3) Acquired by right of redemption, by barter or by exchange with property belonging to

only one of the spouses; and

(4) Purchased with exclusive money of the wife or of the husband

The spouses retain the ownership, possession, administration and enjoyment of their
exclusive properties.
Either spouse may, during the marriage, transfer the administration of his or her exclusive
property to the other by means of a public instrument, which shall be recorded in the registry of
property of the place the property is located.
 A spouse of age may mortgage, encumber, alienate or otherwise dispose of his or her
exclusive property, without the consent of the other spouse, and appear alone in court to litigate
with regard to the same.

The alienation of any exclusive property of a spouse administered by the other automatically
terminates the administration over such property and the proceeds of the alienation shall be turned
over to the owner-spouse.

Property donated or left by will to the spouses, jointly and with designation of determinate
shares, shall pertain to the donee-spouses as his or her own exclusive property, and in the absence of
designation, share and share alike, without prejudice to the right of accretion when proper.

If the donations are onerous, the amount of the charges shall be borne by the exclusive
property of the donee spouse, whenever they have been advanced by the conjugal partnership of
gains.

Retirement benefits, pensions, annuities, gratuities, usufructs and similar benefits shall be
governed by the rules on gratuitous or onerous acquisitions as may be proper in each case.

Conjugal Partnership Property:

All property acquired during the marriage, whether the acquisition appears to have been
made, contracted or registered in the name of one or both spouses, is presumed to be conjugal
unless the contrary is proved.

The following are conjugal partnership properties:

(1) Those acquired by onerous title during the marriage at the expense of the common fund,
whether the acquisition be for the partnership, or for only one of the spouses;
(2) Those obtained from the labor, industry, work or profession of either or both of the
spouses;

(3) The fruits, natural, industrial, or civil, due or received during the marriage from the
common property, as well as the net fruits from the exclusive property of each spouse;

(4) The share of either spouse in the hidden treasure which the law awards to the finder or
owner of the property where the treasure is found;

(5) Those acquired through occupation such as fishing or hunting;

(6) Livestock existing upon the dissolution of the partnership in excess of the number of
each kind brought to the marriage by either spouse; and

(7) Those which are acquired by chance, such as winnings from gambling or betting.
However, losses therefrom shall be borne exclusively by the loser-spouse.
 Property bought on installments paid partly from exclusive funds of either or both spouses
and partly from conjugal funds belongs to the buyer or buyers if full ownership was vested before
the marriage and to the conjugal partnership if such ownership was vested during the marriage. In
either case, any amount advanced by the partnership or by either or both spouses shall be
reimbursed by the owner or owners upon liquidation of the partnership.

Whenever an amount or credit payable within a period of time belongs to one of the
spouses, the sums which may be collected during the marriage in partial payments or by installments
on the principal shall be the exclusive property of the spouse. However, interests falling due during
the marriage on the principal shall belong to the conjugal partnership.

The ownership of improvements, whether for utility or adornment, made on the separate
property of the spouses at the expense of the partnership or through the acts or efforts of either or
both spouses shall pertain to the conjugal partnership, or to the original owner-spouse, subject to
the following rules:

When the cost of the improvement made by the conjugal partnership and any resulting
increase in value are more than the value of the property at the time of the improvement, the entire
property of one of the spouses shall belong to the conjugal partnership, subject to reimbursement of
the value of the property of the owner-spouse at the time of the improvement; otherwise, said
property shall be retained in ownership by the owner-spouse, likewise subject to reimbursement of
the cost of the improvement.
In either case, the ownership of the entire property shall be vested upon the reimbursement,
which shall be made at the time of the liquidation of the conjugal partnership.

Charges upon and obligations of the Conjugal Partnership of Gains:

(1) The support of the spouse, their common children, and the legitimate children of either
spouse;

(2) All debts and obligations contracted during the marriage by the designated administrator-
spouse for the benefit of the conjugal partnership of gains, or by both spouses or by one of them
with the consent of the other;

(3) Debts and obligations contracted by either spouse without the consent of the other to
the extent that the family may have benefited;

(4) All taxes, liens, charges, and expenses, including major or minor repairs upon the
conjugal partnership property;

(5) All taxes and expenses for mere preservation made during the marriage upon the separate
property of either spouse;

(6) Expenses to enable either spouse to commence or complete a professional, vocational, or

other activity for self-improvement;

(7) Antenuptial debts of either spouse insofar as they have redounded to the benefit of the
family;
 (8) The value of what is donated or promised by both spouses in favor of their common
legitimate children for the exclusive purpose of commencing or completing a professional or
vocational course or other activity for self-improvement; and

(9) Expenses of litigation between the spouses unless the suit is found to groundless.

If the conjugal partnership is insufficient to cover the foregoing liabilities, the spouses shall
be solidarily liable for the unpaid balance with their separate properties.

The payment of personal debts contracted by the husband or the wife before or during the
marriage shall not be charged to the conjugal properties partnership except insofar as they
redounded to the benefit of the family.

Neither shall the fines and pecuniary indemnities imposed upon them be charged to the
partnership.

However, the payment of personal debts contracted by either spouse before the marriage,
that of fines and indemnities imposed upon them, as well as the support of illegitimate children of
either spouse, may be enforced against the partnership assets after the responsibilities enumerated in
the preceding Article have been covered, if the spouse who is bound should have no exclusive
property or if it should be insufficient; but at the time of the liquidation of the partnership, such
spouse shall be charged for what has been paid for the purpose above-mentioned.

Whatever may be lost during the marriage in any game of chance or in betting, sweepstakes,
or any other kind of gambling whether permitted or prohibited by law, shall be borne by the loser
and shall not be charged to the conjugal partnership but any winnings therefrom shall form part of
the conjugal partnership property.

Administration of the of the Conjugal Partnership of Gains:

The administration and enjoyment of the conjugal partnership shall belong to both spouses
jointly. In case of disagreement, the husband's decision shall prevail, subject to recourse to the court
by the wife for proper remedy, which must be availed of within five years from the date of the
contract implementing such decision.

In the event that one spouse is incapacitated or otherwise unable to participate in the
administration of the conjugal properties, the other spouse may assume sole powers of
administration. These powers do not include disposition or encumbrance without authority of the
court or the written consent of the other spouse. In the absence of such authority or consent, the
disposition or encumbrance shall be void. However, the transaction shall be construed as a
continuing offer on the part of the consenting spouse and the third person, and may be perfected as
a binding contract upon the acceptance by the other spouse or authorization by the court before the
offer is withdrawn by either or both offerors.

Neither spouse may donate any conjugal partnership property without the consent of the
other. However, either spouse may, without the consent of the other, make moderate donations
from the conjugal partnership property for charity or on occasions of family rejoicing or family
distress.

Dissolution of the regime of Conjugal Partnership of Gains:

(1) Upon the death of either spouse;

(2) There is a decree of legal separation;

(3) The marriage is annulled or declared void; or

(4) In case of judicial separation of property during the marriage under Articles 134 to 138.

The separation in fact between husband and wife shall not affect the regime of conjugal
partnership, except that:

(1) The spouse who leaves the conjugal home or refuses to live therein, without just cause,
shall not have the right to be supported;

(2) When the consent of one spouse to any transaction of the other is required by law,
judicial authorization shall be obtained in a summary proceeding;

(3) In the absence of sufficient conjugal partnership property, the separate property of both
spouses shall be solidarily liable for the support of the family. The spouse present shall, upon
petition in a summary proceeding, be given judicial authority to administer or encumber any specific
separate property of the other spouse and use the fruits or proceeds thereof to satisfy the latter's
share.

If a spouse without just cause abandons the other or fails to comply with his or her
obligation to the family, the aggrieved spouse may petition the court for receivership, for judicial
separation of property, or for authority to be the sole administrator of the conjugal partnership
property, subject to such precautionary conditions as the court may impose.

The obligations to the family mentioned in the preceding paragraph refer to marital, parental
or property relations.

A spouse is deemed to have abandoned the other when he or she has left the conjugal
dwelling without intention of returning. The spouse who has left the conjugal dwelling for a period
of three months or has failed within the same period to give any information as to his or her
whereabouts shall be prima facie presumed to have no intention of returning to the conjugal
dwelling.

Procedure in the Liquidation of the Conjugal Partnership Assets and Liabilities:

 (1) An inventory shall be prepared, listing separately all the properties of the conjugal
partnership and the exclusive properties of each spouse.

(2) Amounts advanced by the conjugal partnership in payment of personal debts and
obligations of either spouse shall be credited to the conjugal partnership as an asset thereof.

(3) Each spouse shall be reimbursed for the use of his or her exclusive funds in the
acquisition of property or for the value of his or her exclusive property, the ownership of which has
been vested by law in the conjugal partnership.

(4) The debts and obligations of the conjugal partnership shall be paid out of the conjugal
assets. In case of insufficiency of said assets, the spouses shall be solidarily liable for the unpaid
balance with their separate properties, in accordance with the provisions of paragraph (2) of Article
121.

(5) Whatever remains of the exclusive properties of the spouses shall thereafter be delivered
to each of them.

(6) Unless the owner had been indemnified from whatever source, the loss or deterioration
of movables used for the benefit of the family, belonging to either spouse, even due to fortuitous
event, shall be paid to said spouse from the conjugal funds, if any.

(7) The net remainder of the conjugal partnership properties shall constitute the profits,
which shall be divided equally between husband and wife, unless a different proportion or division
was agreed upon in the marriage settlements or unless there has been a voluntary waiver or
forfeiture of such share as provided in this Code.

(8) The presumptive legitimes of the common children shall be delivered upon the partition
in accordance with Article 51.

(9) In the partition of the properties, the conjugal dwelling and the lot on which it is situated
shall, unless otherwise agreed upon by the parties, be adjudicated to the spouse with whom the
majority of the common children choose to remain. Children below the age of seven years are
deemed to have chosen the mother, unless the court has decided otherwise. In case there is no such
majority, the court shall decide, taking into consideration the best interests of said children.

Upon the termination of the marriage by death, the conjugal partnership property shall be
liquidated in the same proceeding for the settlement of the estate of the deceased.

If no judicial settlement proceeding is instituted, the surviving spouse shall liquidate the
conjugal partnership property either judicially or extra-judicially within six months from the death of
the deceased spouse. If upon the lapse of the six-month period no liquidation is made, any
disposition or encumbrance involving the conjugal partnership property of the terminated marriage
shall be void.

Should the surviving spouse contract a subsequent marriage without compliance with the
foregoing requirements, a mandatory regime of complete separation of property shall govern the
property relations of the subsequent marriage.
 Whenever the liquidation of the conjugal partnership properties of two or more marriages
contracted by the same person is carried out simultaneously, the respective capital, fruits and income
of each partnership shall be determined upon such proof as may be considered according to the
rules of evidence. In case of doubt as to which partnership the existing properties belong, the same
shall be divided between the different partnerships in proportion to the capital and duration of each.

The Rules of Court on the administration of estates of deceased persons shall be observed in
the appraisal and sale of property of the conjugal partnership, and other matters which are not
expressly determined in this Chapter.

From the common mass of property support shall be given to the surviving spouse and to
the children during the liquidation of the inventoried property and until what belongs to them is
delivered; but from this shall be deducted that amount received for support which exceeds the fruits
or rents pertaining to them.

Separation of Property of the Spouses and Administration of Common Property by One

Spouse During the Marriage:

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.

Any of the following shall be considered sufficient cause for judicial separation of property:

(1) That the spouse of the petitioner has been sentenced to a penalty which carries with it
civil interdiction;

(2) That the spouse of the petitioner has been judicially declared an absentee;

(3) That loss of parental authority of the spouse of petitioner has been decreed by the court;

(4) That the spouse of the petitioner has abandoned the latter or failed to comply with his or
her obligations to the family as provided for in Article 101;

(5) That the spouse granted the power of administration in the marriage settlements has
abused that power; and

(6) That at the time of the petition, the spouses have been separated in fact for at least one
year and reconciliation is highly improbable.

In the cases provided for in Numbers (1), (2) and (3), the presentation of the final judgment
against the guilty or absent spouse shall be enough basis for the grant of the decree of judicial
separation of property.
 The spouses may jointly file a verified petition with the court for the voluntary dissolution of
the absolute community or the conjugal partnership of gains, and for the separation of their
common properties.

All creditors of the absolute community or of the conjugal partnership of gains, as well as
the personal creditors of the spouse, shall be listed in the petition and notified of the filing thereof.
The court shall take measures to protect the creditors and other persons with pecuniary interest.

Once the separation of property has been decreed, the absolute community or the conjugal
partnership of gains shall be liquidated in conformity with this Code.

During the pendency of the proceedings for separation of property, the absolute community
or the conjugal partnership shall pay for the support of the spouses and their children.

After dissolution of the absolute community or of the conjugal partnership, the provisions
on complete separation of property shall apply.

The petition for separation of property and the final judgment granting the same shall be
recorded in the proper local civil registries and registries of property.

The separation of property shall not prejudice the rights previously acquired by creditors.

The spouses may, in the same proceedings where separation of property was decreed, file a
motion in court for a decree reviving the property regime that existed between them before the
separation of property in any of the following instances:

(1) When the civil interdiction terminates;

(2) When the absentee spouse reappears;

(3) When the court, being satisfied that the spouse granted the power of administration in
the marriage settlements will not again abuse that power, authorizes the resumption of said
administration;

(4) When the spouse who has left the conjugal home without a decree of legal separation
resumes common life with the other;

(5) When parental authority is judicially restored to the spouse previously deprived thereof;

(6) When the spouses who have separated in fact for at least one year, reconcile and resume
common life; or

(7) When after voluntary dissolution of the absolute community of property or conjugal
partnership 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.

The revival of the former property regime shall be governed by Article 67.
 The administration of all classes of exclusive property of either spouse may be transferred by
the court to the other spouse:

(1) When one spouse becomes the guardian of the other;

(2) When one spouse is judicially declared an absentee;

(3) When one spouse is sentenced to a penalty which carries with it civil interdiction; or

(4) When one spouse becomes a fugitive from justice or is in hiding as an accused in a
criminal case.

If the other spouse is not qualified by reason of incompetence, conflict of interest, or any
other just cause, the court shall appoint a suitable person to be the administrator.

Regime of Separation of Property:

Should the future spouses agree in the marriage settlements that their property relations
during marriage shall be governed by the regime of separation of property, the provisions of this
Chapter shall be suppletory.

Separation of property may refer to present or future property or both. It may be total or
partial. In the latter case, the property not agreed upon as separate shall pertain to the absolute
community.

Each spouse shall own, dispose of, possess, administer and enjoy his or her own separate
estate, without need of the consent of the other. To each spouse shall belong all earnings from his
or her profession, business or industry and all fruits, natural, industrial or civil, due or received
during the marriage from his or her separate property.

Both spouses shall bear the family expenses in proportion to their income, or, in case of
insufficiency or default thereof, to the current market value of their separate properties.

The liabilities of the spouses to creditors for family expenses shall, however, be solidary.

Property Regime of Unions Without Marriage:

When a man and a woman who are capacitated to marry each other, live exclusively with
each other as husband and wife without the benefit of marriage or under a void marriage, their
wages and salaries shall be owned by them in equal shares and the property acquired by both of
them through their work or industry shall be governed by the rules on co-ownership.

In the absence of proof to the contrary, properties acquired while they lived together shall be
presumed to have been obtained by their joint efforts, work or industry, and shall be owned by them
in equal shares. For purposes of this Article, a party who did not participate in the acquisition by the
other party of any property shall be deemed to have contributed jointly in the acquisition thereof if
the former's efforts consisted in the care and maintenance of the family and of the household.

Neither party can encumber or dispose by acts inter vivos of his or her share in the property
acquired during cohabitation and owned in common, without the consent of the other, until after
the termination of their cohabitation.

When only one of the parties to a void marriage is in good faith, the share of the party in bad
faith in the co-ownership shall be forfeited in favor of their common children. In case of default of
or waiver by any or all of the common children or their descendants, each vacant share shall belong
to the respective surviving descendants. In the absence of descendants, such share shall belong to
the innocent party. In all cases, the forfeiture shall take place upon termination of the cohabitation.

In cases of cohabitation not falling under the preceding Article, only the properties acquired
by both of the parties through their actual joint contribution of money, property, or industry shall be
owned by them in common in proportion to their respective contributions. In the absence of proof
to the contrary, their contributions and corresponding shares are presumed to be equal. The same
rule and presumption shall apply to joint deposits of money and evidences of credit.

If one of the parties is validly married to another, his or her share in the co-ownership shall
accrue to the absolute community or conjugal partnership existing in such valid marriage. If the
party who acted in bad faith is not validly married to another, his or her shall be forfeited in the
manner provided in the last paragraph of the preceding Article.

The foregoing rules on forfeiture shall likewise apply even if both parties are in both faith.

VI. The Family

The family, being the foundation of the nation, is a basic social institution which public
policy cherishes and protects. Consequently, family relations are governed by law and no custom,
practice or agreement destructive of the family shall be recognized or given effect.

Family relations include those:

(1) Between husband and wife;

(2) Between parents and children;
(3) Among brothers and sisters, whether of the full or half-blood.

No suit between members of the same family shall prosper unless it should appear from the
verified complaint or petition that earnest efforts toward a compromise have been made, but that
the same have failed. If it is shown that no such efforts were in fact made, the same case must be
dismissed.

This rules shall not apply to cases which may not be the subject of compromise under the
Civil Code.
 The family home, constituted jointly by the husband and the wife or by an unmarried head
of a family, is the dwelling house where they and their family reside, and the land on which it is
situated.

The family home is deemed constituted on a house and lot from the time it is occupied as a
family residence. From the time of its constitution and so long as any of its beneficiaries actually
resides therein, the family home continues to be such and is exempt from execution, forced sale or
attachment except as hereinafter provided and to the extent of the value allowed by law.

Beneficiaries of a family home:

(1) The husband and wife, or an unmarried person who is the head of a family; and

(2) Their parents, ascendants, descendants, brothers and sisters, whether the relationship be
legitimate or illegitimate, who are living in the family home and who depend upon the head of the
family for legal support.

The family home shall be exempt from execution, forced sale or attachment except:

(1) For nonpayment of taxes;

(2) For debts incurred prior to the constitution of the family home;

(3) For debts secured by mortgages on the premises before or after such constitution; and

(4) For debts due to laborers, mechanics, architects, builders, materialmen and others who
have rendered service or furnished material for the construction of the building.

The family home must be part of the properties of the absolute community or the conjugal
partnership, or of the exclusive properties of either spouse with the latter's consent. It may also be
constituted by an unmarried head of a family on his or her own property.

Nevertheless, property that is the subject of a conditional sale on installments where

ownership is reserved by the vendor only to guarantee payment of the purchase price may be
constituted as a family home.

The actual value of the family home shall not exceed, at the time of its constitution, the
amount of the three hundred thousand pesos in urban areas, and two hundred thousand pesos in
rural areas, or such amounts as may hereafter be fixed by law.

In any event, if the value of the currency changes after the adoption of this Code, the value
most favorable for the constitution of a family home shall be the basis of evaluation.

Urban areas are deemed to include chartered cities and municipalities whose annual income
at least equals that legally required for chartered cities. All others are deemed to be rural areas.
 The family home may be sold, alienated, donated, assigned or encumbered by the owner or
owners thereof with the written consent of the person constituting the same, the latter's spouse, and
a majority of the beneficiaries of legal age. In case of conflict, the court shall decide.

The family home shall continue despite the death of one or both spouses or of the
unmarried head of the family for a period of ten years or for as long as there is a minor beneficiary,
and the heirs cannot partition the same unless the court finds compelling reasons therefor. This rule
shall apply regardless of whoever owns the property or constituted the family home.

When a creditor whose claims is not among those mentioned in Article 155 obtains a
judgment in his favor, and he has reasonable grounds to believe that the family home is actually
worth more than the maximum amount fixed in Article 157, he may apply to the court which
rendered the judgment for an order directing the sale of the property under execution. The court
shall so order if it finds that the actual value of the family home exceeds the maximum amount
allowed by law as of the time of its constitution. If the increased actual value exceeds the maximum
allowed in Article 157 and results from subsequent voluntary improvements introduced by the
person or persons constituting the family home, by the owner or owners of the property, or by any
of the beneficiaries, the same rule and procedure shall apply.

At the execution sale, no bid below the value allowed for a family home shall be considered.
The proceeds shall be applied first to the amount mentioned in Article 157, and then to the liabilities
under the judgment and the costs. The excess, if any, shall be delivered to the judgment debtor.

For purposes of availing of the benefits of a family home, a person may constitute, or be the
beneficiary of, only one family home.

The provisions in this Chapter shall also govern existing family residences insofar as said
provisions are applicable.
VII. Paternity and Filiation

Legitimate Children:

The filiation of children may be by nature or by adoption. Natural filiation may be legitimate
or illegitimate.

Children conceived or born during the marriage of the parents are legitimate.

Children conceived as a result of artificial insemination of the wife with the sperm of the
husband or that of a donor or both are likewise legitimate children of the husband and his wife,
provided, that both of them authorized or ratified such insemination in a written instrument
executed and signed by them before the birth of the child. The instrument shall be recorded in the
civil registry together with the birth certificate of the child.

Children conceived and born outside a valid marriage are illegitimate, unless otherwise
provided in this Code.

Legitimacy of a child may be impugned only on the following grounds:

 (1) That it was physically impossible for the husband to have sexual intercourse with his wife
within the first 120 days of the 300 days which immediately preceded the birth of the child because
of:

(a) the physical incapacity of the husband to have sexual intercourse with his wife;

(b) the fact that the husband and wife were living separately in such a way that sexual
intercourse was not possible; or

(c) serious illness of the husband, which absolutely prevented sexual intercourse;

(2) That it is proved that for biological or other scientific reasons, the child could not have
been that of the husband, except in the instance provided in the second paragraph of Article 164; or

(3) That in case of children conceived through artificial insemination, the written
authorization or ratification of either parent was obtained through mistake, fraud, violence,
intimidation, or undue influence.

The child shall be considered legitimate although the mother may have declared against its
legitimacy or may have been sentenced as an adulteress.

If the marriage is terminated and the mother contracted another marriage within three
hundred days after such termination of the former marriage, these rules shall govern in the absence
of proof to the contrary:

(1) A child born before one hundred eighty days after the solemnization of the subsequent
marriage is considered to have been conceived during the former marriage, provided it be born
within three hundred days after the termination of the former marriage;

(2) A child born after one hundred eighty days following the celebration of the subsequent
marriage is considered to have been conceived during such marriage, even though it be born within
the three hundred days after the termination of the former marriage.

The legitimacy or illegitimacy of a child born after three hundred days following the
termination of the marriage shall be proved by whoever alleges such legitimacy or illegitimacy.

The action to impugn the legitimacy of the child shall be brought within one year from the
knowledge of the birth or its recording in the civil register, if the husband or, in a proper case, any of
his heirs, should reside in the city or municipality where the birth took place or was recorded.

If the husband or, in his default, all of his heirs do not reside at the place of birth as defined
in the first paragraph or where it was recorded, the period shall be two years if they should reside in
the Philippines; and three years if abroad. If the birth of the child has been concealed from or was
unknown to the husband or his heirs, the period shall be counted from the discovery or knowledge
of the birth of the child or of the fact of registration of said birth, whichever is earlier.
 The heirs of the husband may impugn the filiation of the child within the period prescribed
in the preceding article only in the following cases:

(1) If the husband should die before the expiration of the period fixed for bringing his
action;

(2) If he should die after the filing of the complaint without having desisted therefrom; or

(3) If the child was born after the death of the husband.

Proof of Filiation:

By any of the following:

(1) The record of birth appearing in the civil register or a final judgment; or
(2) An admission of legitimate filiation in a public document or a private handwritten
instrument and signed by the parent concerned.

In the absence of the foregoing evidence, by:

(1) The open and continuous possession of the status of a legitimate child; or
(2) Any other means allowed by the Rules of Court and special laws.

The action to claim legitimacy may be brought by the child during his or her lifetime and
shall be transmitted to the heirs should the child die during minority or in a state of insanity. In these
cases, the heirs shall have a period of five years within which to institute the action.

Rights of legitimate children:

(1) To bear the surnames of the father and the mother, in conformity with the provisions of
the Civil Code on Surnames;

(2) To receive support from their parents, their ascendants, and in proper cases, their
brothers and sisters, in conformity with the provisions of this Code on Support; and

(3) To be entitled to the legitimate and other successional rights granted to them by the Civil
Code.
Illegitimate Children may establish their illegitimate filiation in the same way and on the
same evidence as legitimate children.

The action must be brought within the same period specified in Article 173, except when the
action is based on the second paragraph of Article 172, in which case the action may be brought
during the lifetime of the alleged parent.

Illegitimate children shall use the surname and shall be under the parental authority of their
mother, and shall be entitled to support. However, illegitimate children may use the surname of their
father if their filiation has been expressly recognized by the father through the record of birth
appearing in the civil register, or when an admission in a public document or private handwritten
instrument is made by the father. The father has the right to institute an action before the regular
courts to prove non-filiation during his lifetime.

The legitime of each illegitimate child shall consist of one-half (1/2) of the legitime of a
legitimate child.

Only children conceived and born outside of wedlock of parents who, at the time of the
conception of the former, were not disqualified by any impediment to marry each other may be
legitimated.

Legitimation shall take place by a subsequent valid marriage between parents. The
annulment of a voidable marriage shall not affect the legitimation.

Legitimated children shall enjoy the same rights as legitimate children.

The effects of legitimation shall retroact to the time of the child's birth.

The legitimation of children who died before the celebration of the marriage shall benefit
their descendants.

Legitimation may be impugned only by those who are prejudiced in their rights, within five
years from the time their cause of action accrues.

VIII. Adoption

Domestic Adoption Act of 1998 (R.A. No. 8552)

Inter- Country Adoption Act of 1995

IX. Support

Comprises everything indispensable for sustenance, dwelling, clothing, medical attendance,

education and transportation, in keeping with the financial capacity of the family.

The education of the person entitled to be supported referred to in the preceding paragraph
shall include his schooling or training for some profession, trade or vocation, even beyond the age
of majority. Transportation shall include expenses in going to and from school, or to and from place
of work.

Who are Obliged;

(1) The spouses;

(2) Legitimate ascendants and descendants;

(3) Parents and their legitimate children and the legitimate and illegitimate children of the
latter;
 (4) Parents and their illegitimate children and the legitimate and illegitimate children of the
latter; and

(5) Legitimate brothers and sisters, whether of full or half-blood

Brothers and sisters not legitimately related, whether of the full or half-blood, are likewise
bound to support each other to the full extent set forth in Article 194, except only when the need
for support of the brother or sister, being of age, is due to a cause imputable to the claimant's fault
or negligence.

In case of legitimate ascendants; descendants, whether legitimate or illegitimate; and brothers

and sisters, whether legitimately or illegitimately related, only the separate property of the person
obliged to give support shall be answerable provided that in case the obligor has no separate
property, the absolute community or the conjugal partnership, if financially capable, shall advance
the support, which shall be deducted from the share of the spouse obliged upon the liquidation of
the absolute community or of the conjugal partnership.

Whenever two or more persons are obliged to give support, the liability shall devolve upon
the following persons in the order herein provided:

(1) The spouse;

(2) The descendants in the nearest degree;
(3) The ascendants in the nearest degree; and
(4) The brothers and sisters.

When the obligation to give support falls upon two or more persons, the payment of the
same shall be divided between them in proportion to the resources of each.

However, in case of urgent need and by special circumstances, the judge may order only one
of them to furnish the support provisionally, without prejudice to his right to claim from the other
obligors the share due from them.

When two or more recipients at the same time claim support from one and the same person
legally obliged to give it, should the latter not have sufficient means to satisfy all claims, the order
established in the preceding article shall be followed, unless the concurrent obligees should be the
spouse and a child subject to parental authority, in which case the child shall be preferred.

When, without the knowledge of the person obliged to give support, it is given by a stranger,
the latter shall have a right to claim the same from the former, unless it appears that he gave it
without intention of being reimbursed.

When the person obliged to support another unjustly refuses or fails to give support when
urgently needed by the latter, any third person may furnish support to the needy individual, with
right of reimbursement from the person obliged to give support. This shall particularly apply when
the father or mother of a child under the age of majority unjustly refuses to support or fails to give
support to the child when urgently needed.
 In case of contractual support or that given by will, the excess in amount beyond that
required for legal support shall be subject to levy on attachment or execution.

Furthermore, contractual support shall be subject to adjustment whenever modification is

necessary due to changes of circumstances manifestly beyond the contemplation of the parties.

The spouses and their children shall be supported from the properties of the absolute
community or the conjugal partnership. After the final judgment granting the petition, the obligation
of mutual support between the spouses ceases. However, in case of legal separation, the court may
order that the guilty spouse shall give support to the innocent one, specifying the terms of such
order.

The amount shall be in proportion to the resources or means of the giver and to the
necessities of the recipient.

Support shall be reduced or increased proportionately, according to the reduction or increase

of the necessities of the recipient and the resources or means of the person obliged to furnish the
same.

When Demandable:

From the time the person who has a right to receive the same needs it for
maintenance, but it shall not be paid except from the date of judicial or extrajudicial
demand

Support pendente lite may be claimed in accordance with the Rules of Court.

Payment shall be made within the first five (5) days of each corresponding month or when
the recipient dies, his heirs shall not be obliged to return what he has received in advance.

The person obliged to give support shall have the option to fulfill the obligation either by
paying the allowance fixed, or by receiving and maintaining in the family dwelling the person who
has a right to receive support. The latter alternative cannot be availed of in case there is a moral or
legal obstacle thereto.

The right to receive support as well as any money or property obtained as such support shall
not be levied upon on attachment or execution.

X. Parental Authority

Pursuant to the natural right and duty of parents over the person and property of their
unemancipated children, parental authority and responsibility shall include the caring for and rearing
them for civic consciousness and efficiency and the development of their moral, mental and physical
character and well-being.
 Parental authority and responsibility may not be renounced or transferred except in the cases
authorized by law.

The father and the mother shall jointly exercise parental authority over the persons of their
common children. In case of disagreement, the father's decision shall prevail, unless there is a
judicial order to the contrary.

Children shall always observe respect and reverence towards their parents and are obliged to
obey them as long as the children are under parental authority.

In case of absence or death of either parent, the parent present shall continue exercising
parental authority. The remarriage of the surviving parent shall not affect the parental authority over
the children, unless the court appoints another person to be the guardian of the person or property
of the children.

In case of separation of the parents, parental authority shall be exercised by the parent
designated by the Court. The Court shall take into account all relevant considerations, especially the
choice of the child over seven years of age, unless the parent chosen is unfit.

In case of death, absence or unsuitability of the parents, substitute parental authority shall be
exercised by the surviving grandparent. In case several survive, the one designated by the court,
taking into account the same consideration mentioned in the preceding article, shall exercise the
authority.

No descendant shall be compelled, in a criminal case, to testify against his parents and
grandparents, except when such testimony is indispensable in a crime against the descendant or by
one parent against the other.

The following persons shall exercise substitute parental authority over the child in the order
indicated:

(1) The surviving grandparent, as provided in Art. 214;

(2) The oldest brother or sister, over twenty-one years of age, unless unfit or disqualified;
and

(3) The child's actual custodian, over twenty-one years of age, unless unfit or disqualified.

Whenever the appointment or a judicial guardian over the property of the child becomes
necessary, the same order of preference shall be observed.

In case of foundlings, abandoned neglected or abused children and other children similarly
situated, parental authority shall be entrusted in summary judicial proceedings to heads of children's
homes, orphanages and similar institutions duly accredited by the proper government agency.

The school, its administrators and teachers, or the individual, entity or institution engaged in
child are shall have special parental authority and responsibility over the minor child while under
their supervision, instruction or custody.
 Authority and responsibility shall apply to all authorized activities whether inside or outside
the premises of the school, entity or institution.

Those given the authority and responsibility under the preceding Article shall be principally
and solidarily liable for damages caused by the acts or omissions of the unemancipated minor. The
parents, judicial guardians or the persons exercising substitute parental authority over said minor
shall be subsidiarily liable.

The respective liabilities of those referred to in the preceding paragraph shall not apply if it is
proved that they exercised the proper diligence required under the particular circumstances.

All other cases not covered by this and the preceding articles shall be governed by the
provisions of the Civil Code on quasi-delicts.

The parents and those exercising parental authority shall have, with the respect to their
unemancipated children on wards, the following rights and duties:

(1) To keep them in their company, to support, educate and instruct them by right precept
and good example, and to provide for their upbringing in keeping with their means;

(2) To give them love and affection, advice and counsel, companionship and understanding;

(3) To provide them with moral and spiritual guidance, inculcate in them honesty, integrity,
self-discipline, self-reliance, industry and thrift, stimulate their interest in civic affairs, and inspire in
them compliance with the duties of citizenship;

(4) To furnish them with good and wholesome educational materials, supervise their
activities, recreation and association with others, protect them from bad company, and prevent them
from acquiring habits detrimental to their health, studies and morals;

(5) To represent them in all matters affecting their interests;

(6) To demand from them respect and obedience;

(7) To impose discipline on them as may be required under the circumstances; and

(8) To perform such other duties as are imposed by law upon parents and guardians.

Parents and other persons exercising parental authority shall be civilly liable for the injuries
and damages caused by the acts or omissions of their unemancipated children living in their
company and under their parental authority subject to the appropriate defenses provided by law.

The courts may appoint a guardian of the child's property or a guardian ad litem when the
best interests of the child so requires.

The parents or, in their absence or incapacity, the individual, entity or institution exercising
parental authority, may petition the proper court of the place where the child resides, for an order
providing for disciplinary measures over the child. The child shall be entitled to the assistance of
counsel, either of his choice or appointed by the court, and a summary hearing shall be conducted
wherein the petitioner and the child shall be heard.

However, if in the same proceeding the court finds the petitioner at fault, irrespective of the
merits of the petition, or when the circumstances so warrant, the court may also order the
deprivation or suspension of parental authority or adopt such other measures as it may deem just
and proper.

The measures referred to in the preceding article may include the commitment of the child
for not more than thirty days in entities or institutions engaged in child care or in children's homes
duly accredited by the proper government agency.

The parent exercising parental authority shall not interfere with the care of the child
whenever committed but shall provide for his support. Upon proper petition or at its own instance,
the court may terminate the commitment of the child whenever just and proper.

The father and the mother shall jointly exercise legal guardianship over the property of the
unemancipated common child without the necessity of a court appointment. In case of
disagreement, the father's decision shall prevail, unless there is a judicial order to the contrary.

Where the market value of the property or the annual income of the child exceeds P50,000,
the parent concerned shall be required to furnish a bond in such amount as the court may
determine, but not less than ten per centum (10%) of the value of the property or annual income, to
guarantee the performance of the obligations prescribed for general guardians.

A verified petition for approval of the bond shall be filed in the proper court of the place
where the child resides, or, if the child resides in a foreign country, in the proper court of the place
where the property or any part thereof is situated.

The petition shall be docketed as a summary special proceeding in which all incidents and
issues regarding the performance of the obligations referred to in the second paragraph of this
Article shall be heard and resolved.

The ordinary rules on guardianship shall be merely suppletory except when the child is under
substitute parental authority, or the guardian is a stranger, or a parent has remarried, in which case
the ordinary rules on guardianship shall apply.

The property of the unemancipated child earned or acquired with his work or industry or by
onerous or gratuitous title shall belong to the child in ownership and shall be devoted exclusively to
the latter's support and education, unless the title or transfer provides otherwise.

The right of the parents over the fruits and income of the child's property shall be limited
primarily to the child's support and secondarily to the collective daily needs of the family.

If the parents entrust the management or administration of any of their properties to an

unemancipated child, the net proceeds of such property shall belong to the owner. The child shall be
given a reasonable monthly allowance in an amount not less than that which the owner would have
paid if the administrator were a stranger, unless the owner, grants the entire proceeds to the child. In
any case, the proceeds thus give in whole or in part shall not be charged to the child's legitime.

Parental authority terminates permanently:

(1) Upon the death of the parents;

(2) Upon the death of the child; or

(3) Upon emancipation of the child.

Parental authority also terminates:

(1) Upon adoption of the child;

(2) Upon appointment of a general guardian;

(3) Upon judicial declaration of abandonment of the child in a case filed for the purpose;

(4) Upon final judgment of a competent court divesting the party concerned of parental
authority; or

(5) Upon judicial declaration of absence or incapacity of the person exercising parental
authority.

Parental authority is suspended upon conviction of the parent or the person exercising the
same of a crime which carries with it the penalty of civil interdiction. The authority is automatically
reinstated upon service of the penalty or upon pardon or amnesty of the offender.

The court in an action filed for the purpose in a related case may also suspend parental
authority if the parent or the person exercising the same:

(1) Treats the child with excessive harshness or cruelty;

(2) Gives the child corrupting orders, counsel or example;
(3) Compels the child to beg; or
(4) Subjects the child or allows him to be subjected to acts of lasciviousness.

The grounds enumerated above are deemed to include cases which have resulted from
culpable negligence of the parent or the person exercising parental authority.

If the degree of seriousness so warrants, or the welfare of the child so demands, the court
shall deprive the guilty party of parental authority or adopt such other measures as may be proper
under the circumstances.

The suspension or deprivation may be revoked and the parental authority revived in a case
filed for the purpose or in the same proceeding if the court finds that the cause therefor has ceased
and will not be repeated.
 If the person exercising parental authority has subjected the child or allowed him to be
subjected to sexual abuse, such person shall be permanently deprived by the court of such authority.

The person exercising substitute parental authority shall have the same authority over the
person of the child as the parents.

In no case shall the school administrator, teacher of individual engaged in child care
exercising special parental authority inflict corporal punishment upon the child.
Include: Child Abuse Law (R.A. No. 7610)

XI. Emancipation

Emancipation takes place by the attainment of majority.

Emancipation also takes place:

(1) By the marriage of the minor; or

(2) By the recording in the Civil Register of an agreement in a public instrument executed by
the parent exercising parental authority and the minor at least eighteen years of age. Such
emancipation shall be irrevocable.

Emancipation for any cause shall terminate parental authority over the person and property
of the child who shall then be qualified and responsible for all acts of civil life.

XII. Summary Judicial Proceedings in Family Law Cases

The procedural rules provided for shall apply as regards separation in fact between husband
and wife, abandonment by one of the other, and incidents involving parental authority.

When a husband and wife are separated in fact, or one has abandoned the other and one of
them seeks judicial authorization for a transaction where the consent of the other spouse is required
by law but such consent is withheld or cannot be obtained, a verified petition may be filed in court
alleging the foregoing facts.

The petition shall attach the proposed deed, if any, embodying the transaction, and, if none,
shall describe in detail the said transaction and state the reason why the required consent thereto
cannot be secured. In any case, the final deed duly executed by the parties shall be submitted to and
approved by the court.

Claims for damages by either spouse, except costs of the proceedings, may be litigated only
in a separate action.
 Jurisdiction over the petition shall, upon proof of notice to the other spouse, be exercised by
the proper court authorized to hear family cases, if one exists, or in the regional trial court or its
equivalent sitting in the place where either of the spouses resides.

Upon the filing of the petition, the court shall notify the other spouse, whose consent to the
transaction is required, of said petition, ordering said spouse to show cause why the petition should
not be granted, on or before the date set in said notice for the initial conference. The notice shall be
accompanied by a copy of the petition and shall be served at the last known address of the spouse
concerned.

A preliminary conference shall be conducted by the judge personally without the parties
being assisted by counsel. After the initial conference, if the court deems it useful, the parties may be
assisted by counsel at the succeeding conferences and hearings.

In case of non-appearance of the spouse whose consent is sought, the court shall inquire
into the reasons for his failure to appear, and shall require such appearance, if possible.

If, despite all efforts, the attendance of the non-consenting spouse is not secured, the court
may proceed ex parte and render judgment as the facts and circumstances may warrant. In any case,
the judge shall endeavor to protect the interests of the non-appearing spouse.

If the petition is not resolved at the initial conference, said petition shall be decided in a
summary hearing on the basis of affidavits, documentary evidence or oral testimonies at the sound
discretion of the court. If testimony is needed, the court shall specify the witnesses to be heard and
the subject-matter of their testimonies, directing the parties to present said witnesses.

The judgment of the court shall be immediately final and executory.

The petition for judicial authority to administer or encumber specific separate property of
the abandoning spouse and to use the fruits or proceeds thereof for the support of the family shall
also be governed by these rules.

Petitions filed under Articles 223, 225 and 235 of this Code involving parental authority shall
be verified.

Such petitions shall be verified and filed in the proper court of the place where the child
resides.

Upon the filing of the petition, the court shall notify the parents or, in their absence or
incapacity, the individuals, entities or institutions exercising parental authority over the child.

The rules in Chapter 2 hereof shall also govern summary proceedings under this Chapter
insofar as they are applicable.

XIII. Retroactivity of the Family Code

 Insofar as it does not prejudice or impair vested or acquired rights in accordance with the
Civil Code or other laws.

XIV. Funerals

The duty and the right to make arrangements for the funeral of a relative shall be in
accordance with the order established for support, under article 294. In case of descendants of the
same degree, or of brothers and sisters, the oldest shall be preferred. In case of ascendants, the
paternal shall have a better right.

Every funeral shall be in keeping with the social position of the deceased.

The funeral shall be in accordance with the expressed wishes of the deceased. In the absence
of such expression, his religious beliefs or affiliation shall determine the funeral rites. In case of
doubt, the form of the funeral shall be decided upon by the person obliged to make arrangements
for the same, after consulting the other members of the family.

No human remains shall be retained, interred, disposed of or exhumed without the consent
of the persons mentioned in articles 294 and 305.

Any person who shows disrespect to the dead, or wrongfully interferes with a funeral shall
be liable to the family of the deceased for damages, material and moral.

The construction of a tombstone or mausoleum shall be deemed a part of the funeral

expenses, and shall be chargeable to the conjugal partnership property, if the deceased is one of the
spouses.

XV. Use of Surnames

Legitimate and legitimated children shall principally use the surname of the father.

An adopted child shall bear the surname of the adopter.

A natural child acknowledged by both parents shall principally use the surname of the father.
If recognized by only one of the parents, a natural child shall employ the surname of the recognizing
parent.

Natural children by legal fiction shall principally employ the surname of the father.

Illegitimate children referred to in article 287 shall bear the surname of the mother.

Children conceived before the decree annulling a voidable marriage shall principally use the
surname of the father.

A married woman may use:

(1) Her maiden first name and surname and add her husband's surname, or
(2) Her maiden first name and her husband's surname or
 (3) Her husband's full name, but prefixing a word indicating that she is his wife, such as
"Mrs."

In case of annulment of marriage, and the wife is the guilty party, she shall resume her
maiden name and surname. If she is the innocent spouse, she may resume her maiden name and
surname. However, she may choose to continue employing her former husband's surname, unless:

(1) The court decrees otherwise, or

(2) She or the former husband is married again to another person.

When legal separation has been granted, the wife shall continue using her name and surname
employed before the legal separation.

A widow may use the deceased husband's surname as though he were still living, in
accordance with article 370.

In case of identity of names and surnames, the younger person shall be obliged to use such
additional name or surname as will avoid confusion.

In case of identity of names and surnames between ascendants and descendants, the word
"Junior" can be used only by a son. Grandsons and other direct male descendants shall either:

(1) Add a middle name or the mother's surname, or

(2) Add the Roman numerals II, III, and so on.

No person can change his name or surname without judicial authority.

Usurpation of a name and surname may be the subject of an action for damages and other
relief.

The unauthorized or unlawful use of another person's surname gives a right of action to the
latter.
The employment of pen names or stage names is permitted, provided it is done in good faith
and there is no injury to third persons. Pen names and stage names cannot be usurped.

Except as provided in the preceding article, no person shall use different names and
surnames.

XVI. Absence

If there is a doubt, as between two or more persons who are called to succeed each other, as
to which of them died first, whoever alleges the death of one prior to the other, shall prove the
same; in the absence of proof, it is presumed that they died at the same time and there shall be no
transmission of rights from one to the other.

A marriage contracted by any person during subsistence of a previous marriage shall be null
and void, unless before the celebration of the subsequent marriage, the prior spouse had been absent
for four consecutive years and the spouse present has a well-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 of only two years shall be
sufficient.

For the purpose of contracting the subsequent marriage, the spouse present must institute a
summary proceeding as provided in this Code for the declaration of presumptive death of the
absentee, without prejudice to the effect of reappearance of the absent spouse.

XVII. Civil Registrar

Acts, events and judicial decrees concerning the civil status of persons shall be recorded in
the civil register.

The following shall be entered in the civil register:

(1) Births;
(2) marriages;
(3) deaths;
(4) legal separations;
(5) annulments of marriage;
(6) judgments declaring marriages void from the beginning;
(7) legitimations;
(8) adoptions;
(9) acknowledgments of natural children;
(10) naturalization;
(11) loss, or
(12) recovery of citizenship;
(13) civil interdiction;
(14) judicial determination of filiation;
(15) voluntary emancipation of a minor; and
(16) changes of name.

In cases of legal separation, adoption, naturalization and other judicial orders mentioned in
the preceding article, it shall be the duty of the clerk of the court which issued the decree to ascertain
whether the same has been registered, and if this has not been done, to send a copy of said decree to
the civil registry of the city or municipality where the court is functioning.

The books making up the civil register and all documents relating thereto shall be considered
public documents and shall be prima facie evidence of the facts therein contained.

Every civil registrar shall be civilly responsible for any unauthorized alteration made in any
civil register, to any person suffering damage thereby. However, the civil registrar may exempt
himself from such liability if he proves that he has taken every reasonable precaution to prevent the
unlawful alteration.

No entry in a civil register shall be changed or corrected, without a judicial order.

 All other matters pertaining to the registration of civil status shall be governed by special
laws.

PROPERTY

I. Characteristics

Utility for the satisfaction of moral and economic wants

Susceptibility of appropriation
Individuality or substantivity

II. Classification

Immovables or real Movables

a) By nature those which cannot be General Rule: All things which can be
carried from place to place. transported from place to place without
impairment of the real property to which
1. Lands, buildings, roads and they are fixed.
constructions (adhered to the soil).
Exclusions: those movables susceptible of
2. Mines, quarries and slag dumps, appropriation which are not included in the
while the matter thereof forms part of the enumeration of immovables.
bed, and waters either running or stagnant.
a. Special: real property which by any
b) By incorporation essentially movables special provisions of law is considered as
but are attached to an immovable in a fixed personalty.
manner to be an integral part thereof.
b. In parts: forces of nature which are
1. Trees, plants and growing fruits brought under control by science.
while they are attached to the land or form
an integral part of an immovable. c. Obligations and actions which have
for their object movables or demandable
2. Everything attached to an immovable sums.
in a fixed manner in such a way that it
cannot be separated therefrom without d. Shares of stocks or interests in
breaking the material or deterioration of the juridical entities.
object.
 3. Fertilizers actually used on a piece of
land.

c) By destination essentially movables but

are placed in an immovable as an added
utility.

1. Statutes, reliefs painting or other

objects for use or ornamentation, placed in
a building or on lands, by the owner of the
immovable in such a manner that it reveals
the intention to attach them permanently to
the tenements.

2. Machinery, instruments or implements

intended by the owner of the tenement for
an industry or works which may be carried
on in a building or land, and which tend
directly to meet the needs of such industry
or works.
3. Animal houses or breeding places, in
case the owner has placed or preserved
them with the intention to attach them
permanently to the land, and the animals in
these places.

4. Docks and structures which, though

floating, are intended by their nature and
object to remain at a fixed place on a river,
lake or coast.

d) By analogy - classified by express

provision of law because it is regarded as
united to the immovable property.

Contracts for public works.

Servitudes.
Real rights over immovable
property.

III. Ownership

Ownership may be exercised over things or rights.

The owner has the right to enjoy and dispose of a thing, without other limitations than those
established by law.
 The owner has also a right of action against the holder and possessor of the thing in order to
recover it.

The owner or lawful possessor of a thing has the right to exclude any person from the
enjoyment and disposal thereof. For this purpose, he may use such force as may be reasonably
necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of his
property.

Every owner may enclose or fence his land or tenements by means of walls, ditches, live or
dead hedges, or by any other means without detriment to servitudes constituted thereon.

The owner of a thing cannot make use thereof in such manner as to injure the rights of a
third person.

The owner of a thing has no right to prohibit the interference of another with the same, if
the interference is necessary to avert an imminent danger and the threatened damage, compared to
the damage arising to the owner from the interference, is much greater. The owner may demand
from the person benefited indemnity for the damage to him.

Actual possession under claim of ownership raises disputable presumption of ownership.

The true owner must resort to judicial process for the recovery of the property.

In an action to recover, the property must be identified, and the plaintiff must rely on the
strength of his title and not on the weakness of the defendant's claim.

No person shall be deprived of his property except by competent authority and for public
use and always upon payment of just compensation.

Should this requirement be not first complied with, the courts shall protect and, in a proper
case, restore the owner in his possession.

When any property is condemned or seized by competent authority in the interest of health,
safety or security, the owner thereof shall not be entitled to compensation, unless he can show that
such condemnation or seizure is unjustified.

The owner of a parcel of land is the owner of its surface and of everything under it, and he
can construct thereon any works or make any plantations and excavations which he may deem
proper, without detriment to servitudes and subject to special laws and ordinances. He cannot
complain of the reasonable requirements of aerial navigation.

Hidden treasure belongs to the owner of the land, building, or other property on which it is
found.

Nevertheless, when the discovery is made on the property of another, or of the State or any
of its subdivisions, and by chance, one-half thereof shall be allowed to the finder. If the finder is a
trespasser, he shall not be entitled to any share of the treasure.
 If the things found be of interest to science of the arts, the State may acquire them at their
just price, which shall be divided in conformity with the rule stated.

By treasure is understood, for legal purposes, any hidden and unknown deposit of money,
jewelry, or other precious objects, the lawful ownership of which does not appear.

IV. Accession

The ownership of property gives the right by accession to everything which is produced
thereby, or which is incorporated or attached thereto, either naturally or artificially.

To the owner belongs:

(1) The natural fruits;

(2) The industrial fruits;
(3) The civil fruits.

Natural fruits are the spontaneous products of the soil, and the young and other products of
animals.

Industrial fruits are those produced by lands of any kind through cultivation or labor.

Civil fruits are the rents of buildings, the price of leases of lands and other property and the
amount of perpetual or life annuities or other similar income.

He who receives the fruits has the obligation to pay the expenses made by a third person in
their production, gathering, and preservation.

Only such as are manifest or born are considered as natural or industrial fruits. With respect
to animals, it is sufficient that they are in the womb of the mother, although unborn.

Whatever is built, planted or sown on the land of another and the improvements or repairs
made thereon, belong to the owner of the land, subject to the provisions of the following articles.

All works, sowing, and planting are presumed made by the owner and at his expense, unless
the contrary is proved.

The owner of the land who makes thereon, personally or through another, plantings,
constructions or works with the materials of another, shall pay their value; and, if he acted in bad
faith, he shall also be obliged to the reparation of damages. The owner of the materials shall have the
right to remove them only in case he can do so without injury to the work constructed, or without
the plantings, constructions or works being destroyed. However, if the landowner acted in bad faith,
the owner of the materials may remove them in any event, with a right to be indemnified for
damages.

The owner of the land on which anything has been built, sown or planted in good faith, shall
have the right to appropriate as his own the works, sowing or planting, after payment of the
indemnity provided for in Articles 546 and 548, or to oblige the one who built or planted to pay the
price of the land, and the one who sowed, the proper rent.

However, the builder or planter cannot be obliged to buy the land if its value is considerably
more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the
land does not choose to appropriate the building or trees after proper indemnity. The parties shall
agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof.

He who builds, plants or sows in bad faith on the land of another, loses what is built, planted
or sown without right to indemnity.

The owner of the land on which anything has been built, planted or sown in bad faith may
demand the demolition of the work, or that the planting or sowing be removed, in order to replace
things in their former condition at the expense of the person who built, planted or sowed; or he may
compel the builder or planter to pay the price of the land, and the sower the proper rent.

In the cases of the two preceding articles, the landowner is entitled to damages from the
builder, planter or sower.

The builder, planter or sower in bad faith is entitled to reimbursement for the necessary
expenses of preservation of the land.

If there was bad faith, not only on the part of the person who built, planted or sowed on the
land of another, but also on the part of the owner of such land, the rights of one and the other shall
be the same as though both had acted in good faith.

It is understood that there is bad faith on the part of the landowner whenever the act was
done with his knowledge and without opposition on his part.

When the landowner acted in bad faith and the builder, planter or sower proceeded in good
faith, the provisions of article 447 shall apply.

If the materials, plants or seeds belong to a third person who has not acted in bad faith, the
owner of the land shall answer subsidiarily for their value and only in the event that the one who
made use of them has no property with which to pay.

This provision shall not apply if the owner makes use of the right granted by article 450. If
the owner of the materials, plants or seeds has been paid by the builder, planter or sower, the latter
may demand from the landowner the value of the materials and labor.

In the cases regulated in the preceding articles, good faith does not necessarily exclude
negligence, which gives right to damages under article 2176.

To the owners of lands adjoining the banks of rivers belong the accretion which they
gradually receive from the effects of the current of the waters.

The owners of estates adjoining ponds or lagoons do not acquire the land left dry by the
natural decrease of the waters, or lose that inundated by them in extraordinary floods.
 Whenever the current of a river, creek or torrent segregates from an estate on its bank a
known portion of land and transfers it to another estate, the owner of the land to which the
segregated portion belonged retains the ownership of it, provided that he removes the same within
two years.

Trees uprooted and carried away by the current of the waters belong to the owner of the
land upon which they may be cast, if the owners do not claim them within six months. If such
owners claim them, they shall pay the expenses incurred in gathering them or putting them in a safe
place.

River beds which are abandoned through the natural change in the course of the waters ipso
facto belong to the owners whose lands are occupied by the new course in proportion to the area
lost. However, the owners of the lands adjoining the old bed shall have the right to acquire the same
by paying the value thereof, which value shall not exceed the value of the area occupied by the new
bed.

Whenever a river, changing its course by natural causes, opens a new bed through a private
estate, this bed shall become of public dominion.

Whenever the current of a river divides itself into branches, leaving a piece of land or part
thereof isolated, the owner of the land retains his ownership. He also retains it if a portion of land is
separated from the estate by the current.

Islands which may be formed on the seas within the jurisdiction of the Philippines, on lakes,
and on navigable or floatable rivers belong to the State.

Islands which through successive accumulation of alluvial deposits are formed in non-
navigable and non-floatable rivers, belong to the owners of the margins or banks nearest to each of
them, or to the owners of both margins if the island is in the middle of the river, in which case it
shall be divided longitudinally in halves. If a single island thus formed be more distant from one
margin than from the other, the owner of the nearer margin shall be the sole owner thereof.

Whenever two movable things belonging to different owners are, without bad faith, united
in such a way that they form a single object, the owner of the principal thing acquires the accessory,
indemnifying the former owner thereof for its value.

The principal thing, as between two things incorporated, is deemed to be that to which the
other has been united as an ornament, or for its use or perfection.

If it cannot be determined by the rule given in the preceding article which of the two things
incorporated is the principal one, the thing of the greater value shall be so considered, and as
between two things of equal value, that of the greater volume.
In painting and sculpture, writings, printed matter, engraving and lithographs, the board,
metal, stone, canvas, paper or parchment shall be deemed the accessory thing.

Whenever the things united can be separated without injury, their respective owners may
demand their separation.
 Nevertheless, in case the thing united for the use, embellishment or perfection of the other,
is much more precious than the principal thing, the owner of the former may demand its separation,
even though the thing to which it has been incorporated may suffer some injury.

Whenever the owner of the accessory thing has made the incorporation in bad faith, he shall
lose the thing incorporated and shall have the obligation to indemnify the owner of the principal
thing for the damages he may have suffered.

If the one who has acted in bad faith is the owner of the principal thing, the owner of the
accessory thing shall have a right to choose between the former paying him its value or that the
thing belonging to him be separated, even though for this purpose it be necessary to destroy the
principal thing; and in both cases, furthermore, there shall be indemnity for damages.

If either one of the owners has made the incorporation with the knowledge and without the
objection of the other, their respective rights shall be determined as though both acted in good faith.

Whenever the owner of the material employed without his consent has a right to an
indemnity, he may demand that this consist in the delivery of a thing equal in kind and value, and in
all other respects, to that employed, or else in the price thereof, according to expert appraisal.

If by the will of their owners two things of the same or different kinds are mixed, or if the
mixture occurs by chance, and in the latter case the things are not separable without injury, each
owner shall acquire a right proportional to the part belonging to him, bearing in mind the value of
the things mixed or confused.

If by the will of only one owner, but in good faith, two things of the same or different kinds
are mixed or confused, the rights of the owners shall be determined by the provisions of the
preceding article.

If the one who caused the mixture or confusion acted in bad faith, he shall lose the thing
belonging to him thus mixed or confused, besides being obliged to pay indemnity for the damages
caused to the owner of the other thing with which his own was mixed.

One who in good faith employs the material of another in whole or in part in order to make
a thing of a different kind, shall appropriate the thing thus transformed as his own, indemnifying the
owner of the material for its value.

If the material is more precious than the transformed thing or is of more value, its owner
may, at his option, appropriate the new thing to himself, after first paying indemnity for the value of
the work, or demand indemnity for the material.

If in the making of the thing bad faith intervened, the owner of the material shall have the
right to appropriate the work to himself without paying anything to the maker, or to demand of the
latter that he indemnify him for the value of the material and the damages he may have suffered.
However, the owner of the material cannot appropriate the work in case the value of the latter, for
artistic or scientific reasons, is considerably more than that of the material.
 In the preceding articles, sentimental value shall be duly appreciated.

V. Quieting of Title to or Interest in and Removal or Prevention of Cloud over

Title to or Interest in Real Property

Whenever there is a cloud on title to real property or any interest therein, by reason of any
instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is in
truth and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title,
an action may be brought to remove such cloud or to quiet the title.

An action may also be brought to prevent a cloud from being cast upon title to real property
or any interest therein.

The plaintiff must have legal or equitable title to, or interest in the real property which is the
subject matter of the action. He need not be in possession of said property.

There may also be an action to quiet title or remove a cloud therefrom when the contract,
instrument or other obligation has been extinguished or has terminated, or has been barred by
extinctive prescription.
The plaintiff must return to the defendant all benefits he may have received from the latter,
or reimburse him for expenses that may have redounded to the plaintiff's benefit.

VI. Co-ownership

There is co-ownership whenever the ownership of an undivided thing or right belongs to

different persons.

In default of contracts, or of special provisions, co-ownership shall be governed by the

provisions of this Title.

The share of the co-owners, in the benefits as well as in the charges, shall be proportional to
their respective interests. Any stipulation in a contract to the contrary shall be void.

The portions belonging to the co-owners in the co-ownership shall be presumed equal,
unless the contrary is proved.

Each co-owner may use the thing owned in common, provided he does so in accordance
with the purpose for which it is intended and in such a way as not to injure the interest of the co-
ownership or prevent the other co-owners from using it according to their rights. The purpose of
the co-ownership may be changed by agreement, express or implied.

Any one of the co-owners may bring an action in ejectment.

Each co-owner shall have a right to compel the other co-owners to contribute to the
expenses of preservation of the thing or right owned in common and to the taxes. Any one of the
latter may exempt himself from this obligation by renouncing so much of his undivided interest as
may be equivalent to his share of the expenses and taxes. No such waiver shall be made if it is
prejudicial to the co-ownership.
 Repairs for preservation may be made at the will of one of the co-owners, but he must, if
practicable, first notify his co-owners of the necessity for such repairs. Expenses to improve or
embellish the thing shall be decided upon by a majority as determined in Article 492.

Whenever the different stories of a house belong to different owners, if the titles of
ownership do not specify the terms under which they should contribute to the necessary expenses
and there exists no agreement on the subject, the following rules shall be observed:

(1) The main and party walls, the roof and the other things used in common, shall be
preserved at the expense of all the owners in proportion to the value of the story belonging to each;

(2) Each owner shall bear the cost of maintaining the floor of his story; the floor of the
entrance, front door, common yard and sanitary works common to all, shall be maintained at the
expense of all the owners pro rata;

(3) The stairs from the entrance to the first story shall be maintained at the expense of all the
owners pro rata, with the exception of the owner of the ground floor; the stairs from the first to the
second story shall be preserved at the expense of all, except the owner of the ground floor and the
owner of the first story; and so on successively.

None of the co-owners shall, without the consent of the others, make alterations in the thing
owned in common, even though benefits for all would result therefrom.

However, if the withholding of the consent by one or more of the co-owners is clearly
prejudicial to the common interest, the courts may afford adequate relief.

For the administration and better enjoyment of the thing owned in common, the resolutions
of the majority of the co-owners shall be binding.

There shall be no majority unless the resolution is approved by the co-owners who represent
the controlling interest in the object of the co-ownership.

Should there be no majority, or should the resolution of the majority be seriously prejudicial
to those interested in the property owned in common, the court, at the instance of an interested
party, shall order such measures as it may deem proper, including the appointment of an
administrator.

Whenever a part of the thing belongs exclusively to one of the co-owners, and the remainder
is owned in common, the preceding provision shall apply only to the part owned in common.

Each co-owner shall have the full ownership of his part and of the fruits and benefits
pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another
person in its enjoyment, except when personal rights are involved. But the effect of the alienation or
the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to
him in the division upon the termination of the co-ownership.
 No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at
any time the partition of the thing owned in common, insofar as his share is concerned.

Nevertheless, an agreement to keep the thing undivided for a certain period of time, not
exceeding ten years, shall be valid. This term may be extended by a new agreement.

A donor or testator may prohibit partition for a period which shall not exceed twenty years.

Neither shall there be any partition when it is prohibited by law.

No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs
so long as he expressly or impliedly recognizes the co-ownership.

Notwithstanding the provisions of the preceding article, the co-owners cannot demand a
physical division of the thing owned in common, when to do so would render it unserviceable for
the use for which it is intended. But the co-ownership may be terminated in accordance with Article
498.

Partition may be made by agreement between the parties or by judicial proceedings. Partition
shall be governed by the Rules of Court insofar as they are consistent with this Code.

The creditors or assignees of the co-owners may take part in the division of the thing owned
in common and object to its being effected without their concurrence. But they cannot impugn any
partition already executed, unless there has been fraud, or in case it was made notwithstanding a
formal opposition presented to prevent it, without prejudice to the right of the debtor or assignor to
maintain its validity.

Whenever the thing is essentially indivisible and the co-owners cannot agree that it be
allotted to one of them who shall indemnify the others, it shall be sold and its proceeds distributed.

The partition of a thing owned in common shall not prejudice third persons, who shall retain
the rights of mortgage, servitude or any other real rights belonging to them before the division was
made. Personal rights pertaining to third persons against the co-ownership shall also remain in force,
notwithstanding the partition.

Upon partition, there shall be a mutual accounting for benefits received and reimbursements
for expenses made. Likewise, each co-owner shall pay for damages caused by reason of his
negligence or fraud.

Every co-owner shall, after partition, be liable for defects of title and quality of the portion
assigned to each of the other co-owners.

VII. Possession

Possession is the holding of a thing or the enjoyment of a right.

Possession may be exercised in one's own name or in that of another.

 The possession of things or rights may be had in one of two concepts: either in the concept
of owner, or in that of the holder of the thing or right to keep or enjoy it, the ownership pertaining
to another person.

He is deemed a possessor in good faith who is not aware that there exists in his title or mode
of acquisition any flaw which invalidates it.

He is deemed a possessor in bad faith who possesses in any case contrary to the foregoing.

Mistake upon a doubtful or difficult question of law may be the basis of good faith.

Good faith is always presumed, and upon him who alleges bad faith on the part of a
possessor rests the burden of proof.

Possession acquired in good faith does not lose this character except in the case and from
the moment facts exist which show that the possessor is not unaware that he possesses the thing
improperly or wrongfully.

It is presumed that possession continues to be enjoyed in the same character in which it was
acquired, until the contrary is proved.

Only things and rights which are susceptible of being appropriated may be the object of
possession.

Possession is acquired by the material occupation of a thing or the exercise of a right, or by

the fact that it is subject to the action of our will, or by the proper acts and legal formalities
established for acquiring such right.

Possession may be acquired by the same person who is to enjoy it, by his legal
representative, by his agent, or by any person without any power whatever: but in the last case, the
possession shall not be considered as acquired until the person in whose name the act of possession
was executed has ratified the same, without prejudice to the juridical consequences of negotiorum gestio
in a proper case.

The possession of hereditary property is deemed transmitted to the heir without

interruption and from the moment of the death of the decedent, in case the inheritance is accepted.

One who validly renounces an inheritance is deemed never to have possessed the same.

On who succeeds by hereditary title shall not suffer the consequences of the wrongful
possession of the decedent, if it is not shown that he was aware of the flaws affecting it; but the
effects of possession in good faith shall not benefit him except from the date of the death of the
decedent.

Minors and incapacitated persons may acquire the possession of things; but they need the
assistance of their legal representatives in order to exercise the rights which from the possession
arise in their favor.
 In no case may possession be acquired through force or intimidation as long as there is a
possessor who objects thereto. He who believes that he has an action or a right to deprive another
of the holding of a thing, must invoke the aid of the competent court, if the holder should refuse to
deliver the thing.

Acts merely tolerated, and those executed clandestinely and without the knowledge of the
possessor of a thing, or by violence, do not affect possession.

Possession as a fact cannot be recognized at the same time in two different personalities
except in the cases of co-possession. Should a question arise regarding the fact of possession, the
present possessor shall be preferred; if there are two possessors, the one longer in possession; if the
dates of the possession are the same, the one who presents a title; and if all these conditions are
equal, the thing shall be placed in judicial deposit pending determination of its possession or
ownership through proper proceedings.

Every possessor has a right to be respected in his possession; and should he be disturbed
therein he shall be protected in or restored to said possession by the means established by the laws
and the Rules of Court.

A possessor deprived of his possession through forcible entry may within ten days from the
filing of the complaint present a motion to secure from the competent court, in the action for
forcible entry, a writ of preliminary mandatory injunction to restore him in his possession. The court
shall decide the motion within thirty (30) days from the filing thereof.

Only the possession acquired and enjoyed in the concept of owner can serve as a title for
acquiring dominion.

A possessor in the concept of owner has in his favor the legal presumption that he possesses
with a just title and he cannot be obliged to show or prove it.
The possession of real property presumes that of the movables therein, so long as it is not
shown or proved that they should be excluded.

Each one of the participants of a thing possessed in common shall be deemed to have
exclusively possessed the part which may be allotted to him upon the division thereof, for the entire
period during which the co-possession lasted. Interruption in the possession of the whole or a part
of a thing possessed in common shall be to the prejudice of all the possessors. However, in case of
civil interruption, the Rules of Court shall apply.

A possessor in good faith is entitled to the fruits received before the possession is legally
interrupted.

Natural and industrial fruits are considered received from the time they are gathered or
severed.

Civil fruits are deemed to accrue daily and belong to the possessor in good faith in that
proportion.
 If at the time the good faith ceases, there should be any natural or industrial fruits, the
possessor shall have a right to a part of the expenses of cultivation, and to a part of the net harvest,
both in proportion to the time of the possession.

The charges shall be divided on the same basis by the two possessors.

The owner of the thing may, should he so desire, give the possessor in good faith the right
to finish the cultivation and gathering of the growing fruits, as an indemnity for his part of the
expenses of cultivation and the net proceeds; the possessor in good faith who for any reason
whatever should refuse to accept this concession, shall lose the right to be indemnified in any other
manner.

Necessary expenses shall be refunded to every possessor; but only the possessor in good
faith may retain the thing until he has been reimbursed therefor.

Useful expenses shall be refunded only to the possessor in good faith with the same right of
retention, the person who has defeated him in the possession having the option of refunding the
amount of the expenses or of paying the increase in value which the thing may have acquired by
reason thereof.

If the useful improvements can be removed without damage to the principal thing, the
possessor in good faith may remove them, unless the person who recovers the possession exercises
the option under paragraph 2 of the preceding article.

Expenses for pure luxury or mere pleasure shall not be refunded to the possessor in good
faith; but he may remove the ornaments with which he has embellished the principal thing if it
suffers no injury thereby, and if his successor in the possession does not prefer to refund the
amount expended.

The possessor in bad faith shall reimburse the fruits received and those which the legitimate
possessor could have received, and shall have a right only to the expenses mentioned in paragraph 1
of Article 546 and in Article 443. The expenses incurred in improvements for pure luxury or mere
pleasure shall not be refunded to the possessor in bad faith, but he may remove the objects for
which such expenses have been incurred, provided that the thing suffers no injury thereby, and that
the lawful possessor does not prefer to retain them by paying the value they may have at the time he
enters into possession.

The costs of litigation over the property shall be borne by every possessor.

Improvements caused by nature or time shall always insure to the benefit of the person who
has succeeded in recovering possession.

A possessor in good faith shall not be liable for the deterioration or loss of the thing
possessed, except in cases in which it is proved that he has acted with fraudulent intent or
negligence, after the judicial summons.

A possessor in bad faith shall be liable for deterioration or loss in every case, even if caused
by a fortuitous event.
 One who recovers possession shall not be obliged to pay for improvements which have
ceased to exist at the time he takes possession of the thing.

A present possessor who shows his possession at some previous time, is presumed to have
held possession also during the intermediate period, in the absence of proof to the contrary.
A possessor may lose his possession:

(1) By the abandonment of the thing;

(2) By an assignment made to another either by onerous or gratuitous title;

(3) By the destruction or total loss of the thing, or because it goes out of commerce;

(4) By the possession of another, subject to the provisions of Article 537, if the new
possession has lasted longer than one year. But the real right of possession is not lost till after the
lapse of ten years.

The possession of movables is not deemed lost so long as they remain under the control of
the possessor, even though for the time being he may not know their whereabouts.

The possession of immovables and of real rights is not deemed lost, or transferred for
purposes of prescription to the prejudice of third persons, except in accordance with the provisions
of the Mortgage Law and the Land Registration laws.

Acts relating to possession, executed or agreed to by one who possesses a thing belonging to
another as a mere holder to enjoy or keep it, in any character, do not bind or prejudice the owner,
unless he gave said holder express authority to do such acts, or ratifies them subsequently.

The possession of movable property acquired in good faith is equivalent to a title.

Nevertheless, one who has lost any movable or has been unlawfully deprived thereof may
recover it from the person in possession of the same.

If the possessor of a movable lost or which the owner has been unlawfully deprived, has
acquired it in good faith at a public sale, the owner cannot obtain its return without reimbursing the
price paid therefor.

Wild animals are possessed only while they are under one's control; domesticated or tamed
animals are considered domestic or tame if they retain the habit of returning to the premises of the
possessor.
One who recovers, according to law, possession unjustly lost, shall be deemed for all
purposes which may redound to his benefit, to have enjoyed it without interruption.

VIII. Usufruct

Usufruct gives a right to enjoy the property of another with the obligation of preserving its
form and substance, unless the title constituting it or the law otherwise provides.
 Usufruct is constituted by law, by the will of private persons expressed in acts inter vivos or
in a last will and testament, and by prescription.

Usufruct may be constituted on the whole or a part of the fruits of the thing, in favor of one
more persons, simultaneously or successively, and in every case from or to a certain day, purely or
conditionally. It may also be constituted on a right, provided it is not strictly personal or
intransmissible.

The rights and obligations of the usufructuary shall be those provided in the title constituting
the usufruct; in default of such title, or in case it is deficient, the provisions contained in the two
following Chapters shall be observed.

The usufructuary shall be entitled to all the natural, industrial and civil fruits of the property
in usufruct. With respect to hidden treasure which may be found on the land or tenement, he shall
be considered a stranger.

Natural or industrial fruits growing at the time the usufruct begins, belong to the
usufructuary.

Those growing at the time the usufruct terminates, belong to the owner.

In the preceding cases, the usufructuary, at the beginning of the usufruct, has no obligation
to refund to the owner any expenses incurred; but the owner shall be obliged to reimburse at the
termination of the usufruct, from the proceeds of the growing fruits, the ordinary expenses of
cultivation, for seed, and other similar expenses incurred by the usufructuary.

The provisions of this article shall not prejudice the rights of third persons, acquired either at
the beginning or at the termination of the usufruct.
If the usufructuary has leased the lands or tenements given in usufruct, and the usufruct
should expire before the termination of the lease, he or his heirs and successors shall receive only
the proportionate share of the rent that must be paid by the lessee.

Civil fruits are deemed to accrue daily, and belong to the usufructuary in proportion to the
time the usufruct may last.

Whenever a usufruct is constituted on the right to receive a rent or periodical pension,

whether in money or in fruits, or in the interest on bonds or securities payable to bearer, each
payment due shall be considered as the proceeds or fruits of such right.

Whenever it consists in the enjoyment of benefits accruing from a participation in any

industrial or commercial enterprise, the date of the distribution of which is not fixed, such benefits
shall have the same character.

In either case they shall be distributed as civil fruits, and shall be applied in the manner
prescribed in the preceding article.
 The usufructuary shall have the right to enjoy any increase which the thing in usufruct may
acquire through accession, the servitudes established in its favor, and, in general, all the benefits
inherent therein.

The usufructuary may personally enjoy the thing in usufruct, lease it to another, or alienate
his right of usufruct, even by a gratuitous title; but all the contracts he may enter into as such
usufructuary shall terminate upon the expiration of the usufruct, saving leases of rural lands, which
shall be considered as subsisting during the agricultural year.

Whenever the usufruct includes things which, without being consumed, gradually deteriorate
through wear and tear, the usufructuary shall have the right to make use thereof in accordance with
the purpose for which they are intended, and shall not be obliged to return them at the termination
of the usufruct except in their condition at that time; but he shall be obliged to indemnify the owner
for any deterioration they may have suffered by reason of his fraud or negligence.

Whenever the usufruct includes things which cannot be used without being consumed, the
usufructuary shall have the right to make use of them under the obligation of paying their appraised
value at the termination of the usufruct, if they were appraised when delivered. In case they were not
appraised, he shall have the right to return at the same quantity and quality, or pay their current price
at the time the usufruct ceases.

The usufructuary of fruit-bearing trees and shrubs may make use of the dead trunks, and
even of those cut off or uprooted by accident, under the obligation to replace them with new plants.

If in consequence of a calamity or extraordinary event, the trees or shrubs shall have

disappeared in such considerable number that it would not be possible or it would be too
burdensome to replace them, the usufructuary may leave the dead, fallen or uprooted trunks at the
disposal of the owner, and demand that the latter remove them and clear the land.

The usufructuary of woodland may enjoy all the benefits which it may produce according to
its nature.

If the woodland is a copse or consists of timber for building, the usufructuary may do such
ordinary cutting or felling as the owner was in the habit of doing, and in default of this, he may do
so in accordance with the custom of the place, as to the manner, amount and season.

In any case the felling or cutting of trees shall be made in such manner as not to prejudice
the preservation of the land.

In nurseries, the usufructuary may make the necessary thinnings in order that the remaining
trees may properly grow.

With the exception of the provisions of the preceding paragraphs, the usufructuary cannot
cut down trees unless it be to restore or improve some of the things in usufruct, and in such case
shall first inform the owner of the necessity for the work.

The usufructuary of an action to recover real property or a real right, or any movable
property, has the right to bring the action and to oblige the owner thereof to give him the authority
for this purpose and to furnish him whatever proof he may have. If in consequence of the
enforcement of the action he acquires the thing claimed, the usufruct shall be limited to the fruits,
the dominion remaining with the owner.
The usufructuary may make on the property held in usufruct such useful improvements or
expenses for mere pleasure as he may deem proper, provided he does not alter its form or
substance; but he shall have no right to be indemnified therefor. He may, however, remove such
improvements, should it be possible to do so without damage to the property.

The usufructuary may set off the improvements he may have made on the property against
any damage to the same.

The owner of property the usufruct of which is held by another, may alienate it, but he
cannot alter its form or substance, or do anything thereon which may be prejudicial to the
usufructuary.

The usufructuary of a part of a thing held in common shall exercise all the rights pertaining
to the owner thereof with respect to the administration and the collection of fruits or interest.
Should the co-ownership cease by reason of the division of the thing held in common, the usufruct
of the part allotted to the co-owner shall belong to the usufructuary.

The usufructuary, before entering upon the enjoyment of the property, is obliged:

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

(2) To give security, binding himself to fulfill the obligations imposed upon him in
accordance with this Chapter.

The provisions of No. 2 of the preceding article shall not apply to the donor who has
reserved the usufruct of the property donated, or to the parents who are usufructuaries of their
children's property, except when the parents contract a second marriage.

The usufructuary, whatever may be the title of the usufruct, may be excused from the
obligation of making an inventory or of giving security, when no one will be injured thereby.

Should the usufructuary fail to give security in the cases in which he is bound to give it, the
owner may demand that the immovables be placed under administration, that the movables be sold,
that the public bonds, instruments of credit payable to order or to bearer be converted into
registered certificates or deposited in a bank or public institution, and that the capital or sums in
cash and the proceeds of the sale of the movable property be invested in safe securities.

The interest on the proceeds of the sale of the movables and that on public securities and
bonds, and the proceeds of the property placed under administration, shall belong to the
usufructuary.

Furthermore, the owner may, if he so prefers, until the usufructuary gives security or is
excused from so doing, retain in his possession the property in usufruct as administrator, subject to
the obligation to deliver to the usufructuary the net proceeds thereof, after deducting the sums
which may be agreed upon or judicially allowed him for such administration.

If the usufructuary who has not given security claims, by virtue of a promise under oath, the
delivery of the furniture necessary for his use, and that he and his family be allowed to live in a
house included in the usufruct, the court may grant this petition, after due consideration of the facts
of the case.

The same rule shall be observed with respect to implements, tools and other movable
property necessary for an industry or vocation in which he is engaged.

If the owner does not wish that certain articles be sold because of their artistic worth or
because they have a sentimental value, he may demand their delivery to him upon his giving security
for the payment of the legal interest on their appraised value.

After the security has been given by the usufructuary, he shall have a right to all the proceeds
and benefits from the day on which, in accordance with the title constituting the usufruct, he should
have commenced to receive them.

The usufructuary shall take care of the things given in usufruct as a good father of a family.

A usufructuary who alienates or leases his right of usufruct shall answer for any damage
which the things in usufruct may suffer through the fault or negligence of the person who
substitutes him.

If the usufruct be constituted on a flock or herd of livestock, the usufructuary shall be

obliged to replace with the young thereof the animals that die each year from natural causes, or are
lost due to the rapacity of beasts of prey.
If the animals on which the usufruct is constituted should all perish, without the fault of the
usufructuary, on account of some contagious disease or any other uncommon event, the
usufructuary shall fulfill his obligation by delivering to the owner the remains which may have been
saved from the misfortune.

Should the herd or flock perish in part, also by accident and without the fault of the
usufructuary, the usufruct shall continue on the part saved.
Should the usufruct be on sterile animals, it shall be considered, with respect to its effects, as though
constituted on fungible things.

The usufructuary is obliged to make the ordinary repairs needed by the thing given in
usufruct.

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

Extraordinary repairs shall be at the expense of the owner. The usufructuary is obliged to
notify the owner when the need for such repairs is urgent.
 If the owner should make the extraordinary repairs, he shall have a right to demand of the
usufructuary the legal interest on the amount expended for the time that the usufruct lasts.

Should he not make them when they are indispensable for the preservation of the thing, the
usufructuary may make them; but he shall have a right to demand of the owner, at the termination
of the usufruct, the increase in value which the immovable may have acquired by reason of the
repairs.

The owner may construct any works and make any improvements of which the immovable
in usufruct is susceptible, or make new plantings thereon if it be rural, provided that such acts do
not cause a diminution in the value of the usufruct or prejudice the right of the usufructuary.

The payment of annual charges and taxes and of those considered as a lien on the fruits,
shall be at the expense of the usufructuary for all the time that the usufruct lasts.

The taxes which, during the usufruct, may be imposed directly on the capital, shall be at the
expense of the owner.

If the latter has paid them, the usufructuary shall pay him the proper interest on the sums
which may have been paid in that character; and, if the said sums have been advanced by the
usufructuary, he shall recover the amount thereof at the termination of the usufruct.

If the usufruct be constituted on the whole of a patrimony, and if at the time of its
constitution the owner has debts, the provisions of Articles 758 and 759 relating to donations shall
be applied, both with respect to the maintenance of the usufruct and to the obligation of the
usufructuary to pay such debts.

The same rule shall be applied in case the owner is obliged, at the time the usufruct is
constituted, to make periodical payments, even if there should be no known capital.

The usufructuary may claim any matured credits which form a part of the usufruct if he has
given or gives the proper security. If he has been excused from giving security or has been able to
give it, or if that given is not sufficient, he shall need the authorization of the owner, or of the court
in default thereof, to collect such credits.

The usufructuary who has given security may use the capital he has collected in any manner
he may deem proper. The usufructuary who has not given security shall invest the said capital at
interest upon agreement with the owner; in default of such agreement, with judicial authorization;
and, in every case, with security sufficient to preserve the integrity of the capital in usufruct.

The usufructuary of a mortgaged immovable shall not be obliged to pay the debt for the
security of which the mortgage was constituted.

Should the immovable be attached or sold judicially for the payment of the debt, the owner
shall be liable to the usufructuary for whatever the latter may lose by reason thereof.
 The usufructuary shall be obliged to notify the owner of any act of a third person, of which
he may have knowledge, that may be prejudicial to the rights of ownership, and he shall be liable
should he not do so, for damages, as if they had been caused through his own fault.

The expenses, costs and liabilities in suits brought with regard to the usufruct shall be borne
by the usufructuary.

Usufruct is extinguished:

(1) By the death of the usufructuary, unless a contrary intention clearly appears;

(2) By the expiration of the period for which it was constituted, or by the fulfillment of any
resolutory condition provided in the title creating the usufruct;

(3) By merger of the usufruct and ownership in the same person;

(4) By renunciation of the usufructuary;

(5) By the total loss of the thing in usufruct;

(6) By the termination of the right of the person constituting the usufruct;

(7) By prescription.

If the thing given in usufruct should be lost only in part, the right shall continue on the
remaining part.

Usufruct cannot be constituted in favor of a town, corporation, or association for more

than fifty years. If it has been constituted, and before the expiration of such period the town is
abandoned, or the corporation or association is dissolved, the usufruct shall be extinguished by
reason thereof.

A usufruct granted for the time that may elapse before a third person attains a certain age,
shall subsist for the number of years specified, even if the third person should die before the period
expires, unless such usufruct has been expressly granted only in consideration of the existence of
such person.

If the usufruct is constituted on immovable property of which a building forms part, and the
latter should be destroyed in any manner whatsoever, the usufructuary shall have a right to make use
of the land and the materials.

The same rule shall be applied if the usufruct is constituted on a building only and the same
should be destroyed. But in such a case, if the owner should wish to construct another building, he
shall have a right to occupy the land and to make use of the materials, being obliged to pay to the
usufructuary, during the continuance of the usufruct, the interest upon the sum equivalent to the
value of the land and of the materials.
 If the usufructuary shares with the owner the insurance of the tenement given in usufruct,
the former shall, in case of loss, continue in the enjoyment of the new building, should one be
constructed, or shall receive the interest on the insurance indemnity if the owner does not wish to
rebuild.

Should the usufructuary have refused to contribute to the insurance, the owner insuring the
tenement alone, the latter shall receive the full amount of the insurance indemnity in case of loss,
saving always the right granted to the usufructuary in the preceding article.

Should the thing in usufruct be expropriated for public use, the owner shall be obliged either
to replace it with another thing of the same value and of similar conditions, or to pay the
usufructuary the legal interest on the amount of the indemnity for the whole period of the usufruct.
If the owner chooses the latter alternative, he shall give security for the payment of the interest.

A usufruct is not extinguished by bad use of the thing in usufruct; but if the abuse should
cause considerable injury to the owner, the latter may demand that the thing be delivered to him,
binding himself to pay annually to the usufructuary the net proceeds of the same, after deducting the
expenses and the compensation which may be allowed him for its administration.

A usufruct constituted in favor of several persons living at the time of its constitution shall
not be extinguished until death of the last survivor.

Upon the termination of the usufruct, the thing in usufruct shall be delivered to the owner,
without prejudice to the right of retention pertaining to the usufructuary or his heirs for taxes and
extraordinary expenses which should be reimbursed. After the delivery has been made, the security
or mortgage shall be cancelled.

IX. Easements

An easement or servitude is an encumbrance imposed upon an immovable for the benefit of

another immovable belonging to a different owner.

The immovable in favor of which the easement is established is called the dominant estate;
that which is subject thereto, the servient estate.

Servitudes may also be established for the benefit of a community, or of one or more
persons to whom the encumbered estate does not belong.

Easements may be continuous or discontinuous, apparent or non-apparent.

Continuous easements are those the use of which is or may be incessant, without the
intervention of any act of man.
 Discontinuous easements are those which are used at intervals and depend upon the acts of
man.

Apparent easements are those which are made known and are continually kept in view by
external signs that reveal the use and enjoyment of the same.

Nonapparent easements are those which show no external indication of their existence.

Easements are also positive or negative.

A positive easement is one which imposes upon the owner of the servient estate the
obligation of allowing something to be done or of doing it himself, and a negative easement, that
which prohibits the owner of the servient estate from doing something which he could lawfully do if
the easement did not exist.

Easements are inseparable from the estate to which they actively or passively belong.

Easements are indivisible. If the servient estate is divided between two or more persons, the
easement is not modified, and each of them must bear it on the part which corresponds to him.

If it is the dominant estate that is divided between two or more persons, each of them may
use the easement in its entirety, without changing the place of its use, or making it more
burdensome in any other way.

Easements are established either by law or by the will of the owners. The former are called
legal and the latter voluntary easements.

Continuous and apparent easements are acquired either by virtue of a title or by prescription
of ten years.

In order to acquire by prescription the easements referred to in the preceding article, the
time of possession shall be computed thus: in positive easements, from the day on which the owner
of the dominant estate, or the person who may have made use of the easement, commenced to
exercise it upon the servient estate; and in negative easements, from the day on which the owner of
the dominant estate forbade, by an instrument acknowledged before a notary public, the owner of
the servient estate, from executing an act which would be lawful without the easement.

Continuous nonapparent easements, and discontinuous ones, whether apparent or not, may
be acquired only by virtue of a title.

The absence of a document or proof showing the origin of an easement which cannot be
acquired by prescription may be cured by a deed of recognition by the owner of the servient estate
or by a final judgment.

The existence of an apparent sign of easement between two estates, established or

maintained by the owner of both, shall be considered, should either of them be alienated, as a title in
order that the easement may continue actively and passively, unless, at the time the ownership of the
two estates is divided, the contrary should be provided in the title of conveyance of either of them,
or the sign aforesaid should be removed before the execution of the deed. This provision shall also
apply in case of the division of a thing owned in common by two or more persons.

Upon the establishment of an easement, all the rights necessary for its use are considered
granted.

The owner of the dominant estate cannot use the easement except for the benefit of the
immovable originally contemplated. Neither can he exercise the easement in any other manner than
that previously established.

Easements are extinguished:

(1) By merger in the same person of the ownership of the dominant and servient estates;

(2) By nonuser for ten years; with respect to discontinuous easements, this period shall be
computed from the day on which they ceased to be used; and, with respect to continuous easements,
from the day on which an act contrary to the same took place;

(3) When either or both of the estates fall into such condition that the easement cannot be
used; but it shall revive if the subsequent condition of the estates or either of them should again
permit its use, unless when the use becomes possible, sufficient time for prescription has elapsed, in
accordance with the provisions of the preceding number;

(4) By the expiration of the term or the fulfillment of the condition, if the easement is
temporary or conditional;

(5) By the renunciation of the owner of the dominant estate;

(6) By the redemption agreed upon between the owners of the dominant and servient
estates.

The form or manner of using the easement may prescribe as the easement itself, and in the
same way.

If the dominant estate belongs to several persons in common, the use of the easement by
any one of them prevents prescription with respect to the others.

Easements imposed by law have for their object either public use or the interest of private
persons.

All matters concerning easements established for public or communal use shall be governed
by the special laws and regulations relating thereto, and, in the absence thereof, by the provisions of
this Title.
Easements established by law in the interest of private persons or for private use shall be
governed by the provisions of this Title, without prejudice to the provisions of general or local laws
and ordinances for the general welfare.
 These easements may be modified by agreement of the interested parties, whenever the law
does not prohibit it or no injury is suffered by a third person.

Lower estates are obliged to receive the waters which naturally and without the intervention
of man descend from the higher estates, as well as the stones or earth which they carry with them.

The owner of the lower estate cannot construct works which will impede this easement;
neither can the owner of the higher estate make works which will increase the burden.

The banks of rivers and streams, even in case they are of private ownership, are subject
throughout their entire length and within a zone of three meters along their margins, to the
easement of public use in the general interest of navigation, floatage, fishing and salvage.

Estates adjoining the banks of navigable or floatable rivers are, furthermore, subject to the
easement of towpath for the exclusive service of river navigation and floatage.

If it be necessary for such purpose to occupy lands of private ownership, the proper
indemnity shall first be paid.

Whenever for the diversion or taking of water from a river or brook, or for the use of any
other continuous or discontinuous stream, it should be necessary to build a dam, and the person
who is to construct it is not the owner of the banks, or lands which must support it, he may
establish the easement of abutment of a dam, after payment of the proper indemnity.

Compulsory easements for drawing water or for watering animals can be imposed only for
reasons of public use in favor of a town or village, after payment of the proper indemnity.

Easements for drawing water and for watering animals carry with them the obligation of the
owners of the servient estates to allow passage to persons and animals to the place where such
easements are to be used, and the indemnity shall include this service.

Any person who may wish to use upon his own estate any water of which he can dispose
shall have the right to make it flow through the intervening estates, with the obligation to indemnify
their owners, as well as the owners of the lower estates upon which the waters may filter or descend.

One desiring to make use of the right granted in the preceding article is obliged:

(1) To prove that he can dispose of the water and that it is sufficient for the use for which it
is intended;

(2) To show that the proposed right of way is the most convenient and the least onerous to
third persons;

(3) To indemnify the owner of the servient estate in the manner determined by the laws and
regulations.

The easement of aqueduct for private interest cannot be imposed on buildings, courtyards,
annexes, or outhouses, or on orchards or gardens already existing.
 The easement of aqueduct does not prevent the owner of the servient estate from closing or
fencing it, or from building over the aqueduct in such manner as not to cause the latter any damage,
or render necessary repairs and cleanings impossible.

For legal purposes, the easement of aqueduct shall be considered as continuous and
apparent, even though the flow of the water may not be continuous, or its use depends upon the
needs of the dominant estate, or upon a schedule of alternate days or hours.

One who for the purpose of irrigating or improving his estate, has to construct a stop lock
or sluice gate in the bed of the stream from which the water is to be taken, may demand that the
owners of the banks permit its construction, after payment of damages, including those caused by
the new easement to such owners and to the other irrigators.

The establishment, extent, form and conditions of the servitudes of waters, to which this
section refers, shall be governed by the special laws relating thereto insofar as no provision therefor
is made in this Code.

The owner, or any person who by virtue of a real right may cultivate or use any immovable,
which is surrounded by other immovables pertaining to other persons and without adequate outlet
to a public highway, is entitled to demand a right of way through the neighboring estates, after
payment of the proper indemnity.

Should this easement be established in such a manner that its use may be continuous for all
the needs of the dominant estate, establishing a permanent passage, the indemnity shall consist of
the value of the land occupied and the amount of the damage caused to the servient estate.

In case the right of way is limited to the necessary passage for the cultivation of the estate
surrounded by others and for the gathering of its crops through the servient estate without a
permanent way, the indemnity shall consist in the payment of the damage caused by such
encumbrance.

This easement is not compulsory if the isolation of the immovable is due to the proprietor's
own acts.

The easement of right of way shall be established at the point least prejudicial to the servient
estate, and, insofar as consistent with this rule, where the distance from the dominant estate to a
public highway may be the shortest.

The width of the easement of right of way shall be that which is sufficient for the needs of
the dominant estate, and may accordingly be changed from time to time.

Whenever a piece of land acquired by sale, exchange or partition, is surrounded by other

estates of the vendor, exchanger, or co-owner, he shall be obliged to grant a right of way without
indemnity.

In case of a simple donation, the donor shall be indemnified by the donee for the
establishment of the right of way.
 In the case of the preceding article, if it is the land of the grantor that becomes isolated, he
may demand a right of way after paying a indemnity. However, the donor shall not be liable for
indemnity.

If the right of way is permanent, the necessary repairs shall be made by the owner of the
dominant estate. A proportionate share of the taxes shall be reimbursed by said owner to the
proprietor of the servient estate.

If the right of way granted to a surrounded estate ceases to be necessary because its owner
has joined it to another abutting on a public road, the owner of the servient estate may demand that
the easement be extinguished, returning what he may have received by way of indemnity. The
interest on the indemnity shall be deemed to be in payment of rent for the use of the easement.

The same rule shall be applied in case a new road is opened giving access to the isolated
estate.

In both cases, the public highway must substantially meet the needs of the dominant estate
in order that the easement may be extinguished.

If it be indispensable for the construction, repair, improvement, alteration or beautification

of a building, to carry materials through the estate of another, or to raise therein scaffolding or other
objects necessary for the work, the owner of such estate shall be obliged to permit the act, after
receiving payment of the proper indemnity for the damage caused him.

Easements of the right of way for the passage of livestock known as animal path, animal trail
or any other, and those for watering places, resting places and animal folds, shall be governed by the
ordinances and regulations relating thereto, and, in the absence thereof, by the usages and customs
of the place.

Without prejudice to rights legally acquired, the animal path shall not exceed in any case the
width of 75 meters, and the animal trail that of 37 meters and 50 centimeters.

Whenever it is necessary to establish a compulsory easement of the right of way or for a

watering place for animals, the provisions of this Section and those of Articles 640 and 641 shall be
observed. In this case the width shall not exceed 10 meters.

The easement of party wall shall be governed by the provisions of this Title, by the local
ordinances and customs insofar as they do not conflict with the same, and by the rules of co-
ownership.

The existence of an easement of party wall is presumed, unless there is a title, or exterior
sign, or proof to the contrary:

(1) In dividing walls of adjoining buildings up to the point of common elevation;

(2) In dividing walls of gardens or yards situated in cities, towns, or in rural communities;
 (3) In fences, walls and live hedges dividing rural lands.

It is understood that there is an exterior sign, contrary to the easement of party wall:

(1) Whenever in the dividing wall of buildings there is a window or opening;

(2) Whenever the dividing wall is, on one side, straight and plumb on all its facement, and on
the other, it has similar conditions on the upper part, but the lower part slants or projects outward;

(3) Whenever the entire wall is built within the boundaries of one of the estates;

(4) Whenever the dividing wall bears the burden of the binding beams, floors and roof frame
of one of the buildings, but not those of the others;

(5) Whenever the dividing wall between courtyards, gardens, and tenements is constructed in
such a way that the coping sheds the water upon only one of the estates;

(6) Whenever the dividing wall, being built of masonry, has stepping stones, which at certain
intervals project from the surface on one side only, but not on the other;

(7) Whenever lands inclosed by fences or live hedges adjoin others which are not inclosed.

In all these cases, the ownership of the walls, fences or hedges shall be deemed to belong
exclusively to the owner of the property or tenement which has in its favor the presumption based
on any one of these signs.

Ditches or drains opened between two estates are also presumed as common to both, if
there is no title or sign showing the contrary.

There is a sign contrary to the part-ownership whenever the earth or dirt removed to open
the ditch or to clean it is only on one side thereof, in which case the ownership of the ditch shall
belong exclusively to the owner of the land having this exterior sign in its favor.

The cost of repairs and construction of party walls and the maintenance of fences, live
hedges, ditches, and drains owned in common, shall be borne by all the owners of the lands or
tenements having the party wall in their favor, in proportion to the right of each.

Nevertheless, any owner may exempt himself from contributing to this charge by
renouncing his part-ownership, except when the party wall supports a building belonging to him.

If the owner of a building, supported by a party wall desires to demolish the building, he may
also renounce his part-ownership of the wall, but the cost of all repairs and work necessary to
prevent any damage which the demolition may cause to the party wall, on this occasion only, shall be
borne by him.

Every owner may increase the height of the party wall, doing at his own expense and paying
for any damage which may be caused by the work, even though such damage be temporary.
 The expenses of maintaining the wall in the part newly raised or deepened at its foundation
shall also be paid for by him; and, in addition, the indemnity for the increased expenses which may
be necessary for the preservation of the party wall by reason of the greater height or depth which
has been given it.

If the party wall cannot bear the increased height, the owner desiring to raise it shall be
obliged to reconstruct it at his own expense and, if for this purpose it be necessary to make it
thicker, he shall give the space required from his own land.

The other owners who have not contributed in giving increased height, depth or thickness to
the wall may, nevertheless, acquire the right of part-ownership therein, by paying proportionally the
value of the work at the time of the acquisition and of the land used for its increased thickness.

Every part-owner of a party wall may use it in proportion to the right he may have in the co-
ownership, without interfering with the common and respective uses by the other co-owners.

No part-owner may, without the consent of the others, open through the party wall any
window or aperture of any kind.

The period of prescription for the acquisition of an easement of light and view shall be
counted:

(1) From the time of the opening of the window, if it is through a party wall; or

(2) From the time of the formal prohibition upon the proprietor of the adjoining land or
tenement, if the window is through a wall on the dominant estate.

When the distances in Article 670 are not observed, the owner of a wall which is not party
wall, adjoining a tenement or piece of land belonging to another, can make in it openings to admit
light at the height of the ceiling joints or immediately under the ceiling, and of the size of thirty
centimeters square, and, in every case, with an iron grating imbedded in the wall and with a wire
screen.

Nevertheless, the owner of the tenement or property adjoining the wall in which the
openings are made can close them should he acquire part-ownership thereof, if there be no
stipulation to the contrary.

He can also obstruct them by constructing a building on his land or by raising a wall thereon
contiguous to that having such openings, unless an easement of light has been acquired.

No windows, apertures, balconies, or other similar projections which afford a direct view
upon or towards an adjoining land or tenement can be made, without leaving a distance of two
meters between the wall in which they are made and such contiguous property.

Neither can side or oblique views upon or towards such conterminous property be had,
unless there be a distance of sixty centimeters.

The nonobservance of these distances does not give rise to prescription.

 The distance referred to in the preceding article shall be measured in cases of direct views
from the outer line of the wall when the openings do not project, from the outer line of the latter
when they do, and in cases of oblique view from the dividing line between the two properties.

The provisions of Article 670 are not applicable to buildings separated by a public way or
alley, which is not less than three meters wide, subject to special regulations and local ordinances.

Whenever by any title a right has been acquired to have direct views, balconies or belvederes
overlooking an adjoining property, the owner of the servient estate cannot build thereon at less than
a distance of three meters to be measured in the manner provided in
Article 671. Any stipulation permitting distances less than those prescribed in Article 670 is void.

Every owner of a tenement or piece of land may establish thereon the easements which he
may deem suitable, and in the manner and form which he may deem best, provided he does not
contravene the laws, public policy or public order.

The owner of a tenement or piece of land, the usufruct of which belongs to another, may
impose thereon, without the consent of the usufructuary, any servitudes which will not injure the
right of usufruct.

Whenever the naked ownership of a tenement or piece of land belongs to one person and
the beneficial ownership to another, no perpetual voluntary easement may be established thereon
without the consent of both owners.

In order to impose an easement on an undivided tenement, or piece of land, the consent of

all the co-owners shall be required.

The consent given by some only, must be held in abeyance until the last one of all the co-
owners shall have expressed his conformity.

But the consent given by one of the co-owners separately from the others shall bind the
grantor and his successors not to prevent the exercise of the right granted.

The title and, in a proper case, the possession of an easement acquired by prescription shall
determine the rights of the dominant estate and the obligations of the servient estate. In default
thereof, the easement shall be governed by such provisions of this Title as are applicable thereto.

If the owner of the servient estate should have bound himself, upon the establishment of the
easement, to bear the cost of the work required for the use and preservation thereof, he may free
himself from this obligation by renouncing his property to the owner of the dominant estate.

X. Nuisance

A nuisance is any act, omission, establishment, business, condition of property, or anything

else which:

(1) Injures or endangers the health or safety of others; or

 (2) Annoys or offends the senses; or

(3) Shocks, defies or disregards decency or morality; or

(4) Obstructs or interferes with the free passage of any public highway or street, or any body
of water; or

(5) Hinders or impairs the use of property.

Nuisance is either public or private. A public nuisance affects a community or neighborhood

or any considerable number of persons, although the extent of the annoyance, danger or damage
upon individuals may be unequal. A private nuisance is one that is not included in the foregoing
definition.

Every successive owner or possessor of property who fails or refuses to abate a nuisance in
that property started by a former owner or possessor is liable therefor in the same manner as the
one who created it.

The abatement of a nuisance does not preclude the right of any person injured to recover
damages for its past existence.

Lapse of time cannot legalize any nuisance, whether public or private.

The remedies against a public nuisance are:

(1) A prosecution under the Penal Code or any local ordinance: or

(2) A civil action; or
(3) Abatement, without judicial proceedings.

The district health officer shall take care that one or all of the remedies against a public
nuisance are availed of.

If a civil action is brought by reason of the maintenance of a public nuisance, such action
shall be commenced by the city or municipal mayor.

The district health officer shall determine whether or not abatement, without judicial
proceedings, is the best remedy against a public nuisance.

A private person may file an action on account of a public nuisance, if it is specially injurious
to himself.

Any private person may abate a public nuisance which is specially injurious to him by
removing, or if necessary, by destroying the thing which constitutes the same, without committing a
breach of the peace, or doing unnecessary injury. But it is necessary:

(1) That demand be first made upon the owner or possessor of the property to abate the
nuisance;
 (2) That such demand has been rejected;

(3) That the abatement be approved by the district health officer and executed with the
assistance of the local police; and

(4) That the value of the destruction does not exceed three thousand pesos.

The remedies against a private nuisance are:

(1) A civil action; or

(2) Abatement, without judicial proceedings.

Any person injured by a private nuisance may abate it by removing, or if necessary, by

destroying the thing which constitutes the nuisance, without committing a breach of the peace or
doing unnecessary injury. However, it is indispensable that the procedure for extrajudicial abatement
of a public nuisance by a private person be followed.

A private person or a public official extrajudicially abating a nuisance shall be liable for
damages:

(1) If he causes unnecessary injury; or

(2) If an alleged nuisance is later declared by the courts to be not a real nuisance.

XI. Modes of Acquiring Ownership

Ownership is acquired by occupation and by intellectual creation.

Ownership and other real rights over property are acquired and transmitted by law, by
donation, by testate and intestate succession, and in consequence of certain contracts, by tradition.

They may also be acquired by means of prescription.

The ownership of a piece of land cannot be acquired by occupation.

Things appropriable by nature which are without an owner are acquired by occupation.

PRESCRIPTION
I. Definition

By prescription, one acquires ownership and other real rights through the lapse of time in
the manner and under the conditions laid down by law.

In the same way, rights and conditions are lost by prescription.

II. No prescription applicable

Movables possessed through a crime can never be acquired through prescription by the
offender.

III. Prescription or limitation of actions

Actions prescribe by the mere lapse of time fixed by law.

Actions to recover movables shall prescribe eight years from the time the possession thereof
is lost, unless the possessor has acquired the ownership by prescription for a less period, according
to Articles 1132, and without prejudice to the provisions of Articles 559, 1505, and 1133.

Real actions over immovables prescribe after thirty years.

This provision is without prejudice to what is established for the acquisition of ownership
and other real rights by prescription.

A mortgage action prescribes after ten years.

The following rights, among others specified elsewhere in this Code, are not extinguished by
prescription:

(1) To demand a right of way, regulated in Article 649;

(2) To bring an action to abate a public or private nuisance.

The following actions must be brought within ten years from the time the right of action
accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;
(3) Upon a judgment.

The following actions must be commenced within six years:

(1) Upon an oral contract;

(2) Upon a quasi-contract.

The following actions must be instituted within four years:

(1) Upon an injury to the rights of the plaintiff;

 (2) Upon a quasi-delict;

However, when the action arises from or out of any act, activity, or conduct of any public
officer involving the exercise of powers or authority arising from Martial Law including the arrest,
detention and/or trial of the plaintiff, the same must be brought within one (1) year.

The following actions must be filed within one year:

(1) For forcible entry and detainer;

(2) For defamation.

The limitations of action mentioned in Articles 1140 to 1142, and 1144 to 1147 are without
prejudice to those specified in other parts of this Code, in the Code of Commerce, and in special
laws.

All other actions whose periods are not fixed in this Code or in other laws must be brought
within five years from the time the right of action accrues.

The time for prescription for all kinds of actions, when there is no special provision which
ordains otherwise, shall be counted from the day they may be brought.

The time for the prescription of actions which have for their object the enforcement of
obligations to pay principal with interest or annuity runs from the last payment of the annuity or of
the interest.

The period for prescription of actions to demand the fulfillment of obligation declared by a
judgment commences from the time the judgment became final.

The period for prescription of actions to demand accounting runs from the day the persons
who should render the same cease in their functions.

The period for the action arising from the result of the accounting runs from the date when
said result was recognized by agreement of the interested parties.

The period during which the obligee was prevented by a fortuitous event from enforcing his
right is not reckoned against him.

The prescription of actions is interrupted when they are filed before the court, when there is
a written extrajudicial demand by the creditors, and when there is any written acknowledgment of
the debt by the debtor.

OBLIGATIONS

I. Definition

A juridical necessity to give, to do or not to do, one impressed with the character of
enforceability.
II. Elements of an Obligation

1. Active subject The possessor of a right; he in

whose favor the obligation is
constituted;

2. Passive subject He who has the duty of giving,

doing or not doing;

3. Object or prestation May consist of giving a thing, or

doing or not doing a certain actand

4. Efficient cause The reason why the obligation

exists

III. Different Kinds of Prestations

1. To give Consists in the delivery of a movable or an

immovable thing, in order to create a real
right or for the use of the recipient or for
its simple possession or in order to return
to its owner

2. To do All kinds of work or services, whether

mental or physical

3. Not to do Consists in abstaining from some act,

includes not to give, both being negative
obligations

IV. Classification of Obligations

1. Criteria of demandability: a. Pure - one w/c is not subject to a
condition or a term.

b. Conditional - the acquisition of

rights, as well as the extinguishment
or loss of those already acquired,
shall depend upon the happening of
the event which constitutes the
condition.

c. W/ a term -

2. Plurality of objects a. Single

3. Plurality of subjects b. Alternative - where the debtor

must perform any of the prestations

c. Facultative - where only one thing

is due but the debtor has reserved
the right to substitute it w/ another

d. Joint - one in w/c each of the

debtors is liable only for a
proportionate part of the debt or
each creditor is entitled only to a
proportionate part of the credit.

e. Solidary - one in w/c the debtor

is liable for the entire obligation or
each creditor is entitled to demand
the whole obligation. There is only
one obligation is a solidary
obligation.

4. Performance a. Divisible - one susceptible of

partial performance.

b. Indivisible - one that must be

performed in one act.
 5. Sanctions for Breach a. Simple

b. W/ a penal clause - an accessory

undertaking to assume greater
liability in case of breach.

V. Sources of Obligations

Obligations arise from:

(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts.

A single act or omission can give rise to different causes of action:

It is a source of obligation because of the provision in Article 100 of the Revised code that
every person criminally liable is also civilly liable.

Natural Obligations:

They are real obligations to which the law denies an action, but which the debtor may
perform voluntarily.

Extra-contractual Obligations:

1. Quasi-contract - That juridical relation resulting from a lawful, voluntary and unilateral
act, and which has for its purpose, the payment of indemnity to the end that no one shall be unjustly
enriched or benefited at the expense of another

2 kinds:

Negotiorum gestio - unauthorized management

Solutio indebiti - undue payment

2. Quasi-delict/torts - It is a fault or act of negligence ( or omission of care ) which causes

damage to another, there being no pre-existing contractual relations between the parties.
VI. Nature and Effect of Obligations

Every person obliged to give something is also obliged to take care of it with the proper
diligence of a good father of a family, unless the law or the stipulation of the parties requires another
standard of care.

The creditor has a right to the fruits of the thing from the time the obligation to deliver it
arises. However, he shall acquire no real right over it until the same has been delivered to him.

When what is to be delivered is a determinate thing, the creditor, in addition to the right
granted him by Article 1170, may compel the debtor to make the delivery.

If the thing is indeterminate or generic, he may ask that the obligation be complied with at
the expense of the debtor.

If the obligor delays, or has promised to deliver the same thing to two or more persons who
do not have the same interest, he shall be responsible for any fortuitous event until he has effected
the delivery.

The obligation to give a determinate thing includes that of delivering all its accessions and
accessories, even though they may not have been mentioned.

If a person obliged to do something fails to do it, the same shall be executed at his cost.

This same rule shall be observed if he does it in contravention of the tenor of the obligation.
Furthermore, it may be decreed that what has been poorly done be undone.

When the obligation consists in not doing, and the obligor does what has been forbidden
him, it shall also be undone at his expense.

Those obliged to deliver or to do something incur in delay from the time the obligee
judicially or extrajudicially demands from them the fulfillment of their obligation.

However, the demand by the creditor shall not be necessary in order that delay may exist:

(1) When the obligation or the law expressly so declare; or

 (2) When from the nature and the circumstances of the obligation it appears that the
designation of the time when the thing is to be delivered or the service is to be rendered was a
controlling motive for the establishment of the contract; or

(3) When demand would be useless, as when the obligor has rendered it beyond his power to
perform.

In reciprocal obligations, neither party incurs in delay if the other does not comply or is not
ready to comply in a proper manner with what is incumbent upon him. From the moment one of
the parties fulfills his obligation, delay by the other begins.

Those who in the performance of their obligations are guilty of fraud, negligence, or delay,
and those who in any manner contravene the tenor thereof, are liable for damages.

Responsibility arising from fraud is demandable in all obligations. Any waiver of an action
for future fraud is void.

Responsibility arising from negligence in the performance of every kind of obligation is also
demandable, but such liability may be regulated by the courts, according to the circumstances.

The fault or negligence of the obligor consists in the omission of that diligence which is
required by the nature of the obligation and corresponds with the circumstances of the persons, of
the time and of the place. When negligence shows bad faith, the provisions of Articles 1171 and
2201, paragraph 2, shall apply.

If the law or contract does not state the diligence which is to be observed in the
performance, that which is expected of a good father of a family shall be required.

Except in cases expressly specified by the law, or when it is otherwise declared by

stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be
responsible for those events which could not be foreseen, or which, though foreseen, were
inevitable.

The receipt of the principal by the creditor without reservation with respect to the interest,
shall give rise to the presumption that said interest has been paid.
The receipt of a later installment of a debt without reservation as to prior installments, shall
likewise raise the presumption that such installments have been paid.

The creditors, after having pursued the property in possession of the debtor to satisfy their
claims, may exercise all the rights and bring all the actions of the latter for the same purpose, save
those which are inherent in his person; they may also impugn the acts which the debtor may have
done to defraud them.
 Subject to the laws, all rights acquired in virtue of an obligation are transmissible, if there has
been no stipulation to the contrary.

VII. Kinds of Civil Obligations

Pure

The performance does not depend upon a future or uncertain event, or upon a past event
unknown to the parties, which is demandable at once.

Conditional

The acquisition of rights, as well as the extinguishment or loss of those already acquired,
shall depend upon the happening of the event which constitutes the condition.

1. Suspensive condition

The happening of the event gives birth to an obligation

2. Resolutory condition

The happening of the event will extinguish the obligation.

3. Potestative, casual or mixed

Potestative Casual Mixed

One w/c depends solely on One where the condition is One w/c depends partly
the will of either one party. made to depend upon a upon the will of one of the
third person or upon parties and partly on either
chance. chance or the will of a third
person.

VIII. Joint and Solidary Obligation

The concurrence of two or more creditors or of two or more debtors in one and the same
obligation does not imply that each one of the former has a right to demand, or that each one of the
latter is bound to render, entire compliance with the prestation. There is a solidary liability only
when the obligation expressly so states, or when the law or the nature of the obligation requires
solidarity.

If from the law, or the nature or the wording of the obligations to which the preceding
article refers the contrary does not appear, the credit or debt shall be presumed to be divided into as
many shares as there are creditors or debtors, the credits or debts being considered distinct from one
another, subject to the Rules of Court governing the multiplicity of suits.

If the division is impossible, the right of the creditors may be prejudiced only by their
collective acts, and the debt can be enforced only by proceeding against all the debtors. If one of the
latter should be insolvent, the others shall not be liable for his share.

The indivisibility of an obligation does not necessarily give rise to solidarity. Nor does
solidarity of itself imply indivisibility.

Solidarity may exist although the creditors and the debtors may not be bound in the same
manner and by the same periods and conditions.

Each one of the solidary creditors may do whatever may be useful to the others, but not
anything which may be prejudicial to the latter.

A solidary creditor cannot assign his rights without the consent of the others.

The debtor may pay any one of the solidary creditors; but if any demand, judicial or
extrajudicial, has been made by one of them, payment should be made to him.

Novation, compensation, confusion or remission of the debt, made by any of the solidary
creditors or with any of the solidary debtors, shall extinguish the obligation, without prejudice to the
provisions of Article 1219.

The creditor who may have executed any of these acts, as well as he who collects the debt,
shall be liable to the others for the share in the obligation corresponding to them.

The creditor may proceed against any one of the solidary debtors or some or all of them
simultaneously. The demand made against one of them shall not be an obstacle to those which may
subsequently be directed against the others, so long as the debt has not been fully collected.

Payment made by one of the solidary debtors extinguishes the obligation. If two or more
solidary debtors offer to pay, the creditor may choose which offer to accept.
 He who made the payment may claim from his co-debtors only the share which corresponds
to each, with the interest for the payment already made. If the payment is made before the debt is
due, no interest for the intervening period may be demanded.
When one of the solidary debtors cannot, because of his insolvency, reimburse his share to the
debtor paying the obligation, such share shall be borne by all his co-debtors, in proportion to the
debt of each.

Payment by a solidary debtor shall not entitle him to reimbursement from his co-debtors if
such payment is made after the obligation has prescribed or become illegal.

The remission made by the creditor of the share which affects one of the solidary debtors
does not release the latter from his responsibility towards the co-debtors, in case the debt had been
totally paid by anyone of them before the remission was effected.

The remission of the whole obligation, obtained by one of the solidary debtors, does not
entitle him to reimbursement from his co-debtors.

If the thing has been lost or if the prestation has become impossible without the fault of the solidary
debtors, the obligation shall be extinguished.

If there was fault on the part of any one of them, all shall be responsible to the creditor, for
the price and the payment of damages and interest, without prejudice to their action against the
guilty or negligent debtor.

If through a fortuitous event, the thing is lost or the performance has become impossible
after one of the solidary debtors has incurred in delay through the judicial or extrajudicial demand
upon him by the creditor, the provisions of the preceding paragraph shall apply.

A solidary debtor may, in actions filed by the creditor, avail himself of all defenses which are
derived from the nature of the obligation and of those which are personal to him, or pertain to his
own share. With respect to those which personally belong to the others, he may avail himself thereof
only as regards that part of the debt for which the latter are responsible.

IX. Extinguishment of Obligations

Obligations are extinguished:

(1) By payment or performance:

(2) By the loss of the thing due:
(3) By the condonation or remission of the debt;
(4) By the confusion or merger of the rights of creditor and debtor;
 (5) By compensation;
(6) By novation.

Other causes of extinguishment of obligations, such as annulment, rescission, fulfillment of a

resolutory condition, and prescription, are governed elsewhere in this Code.

CONTRACTS

I. Essential Requisites

(1) Consent of the contracting parties;

(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established.

II. Kinds of Contracts

Consensual Real Formal or Solemn

Perfected by mere consent Requires delivery of object Requires compliance with

and from that moment, the for perfection. certain formalities
parties are bound not only prescribed by law, such
to the fulfillment of what prescribed form being an
has been expressly stipulated essential element
but also to all consequences
which, according to their
nature may be in keeping
with good faith, usage and
law.

III. Formality

Contracts shall be obligatory, in whatever form they may have been entered into, provided
all the essential requisites for their validity are present. However, when the law requires that a
contract be in some form in order that it may be valid or enforceable, or that a contract be proved in
a certain way, that requirement is absolute and indispensable. In such cases, the right of the parties
stated in the following article cannot be exercised.

If the law requires a document or other special form, the contracting parties may compel
each other to observe that form, once the contract has been perfected. This right may be exercised
simultaneously with the action upon the contract.
 The following must appear in a public document:

(1) Acts and contracts which have for their object the creation, transmission, modification
or extinguishment of real rights over immovable property; sales of real property or of an interest
therein are governed by Articles 1403, No. 2, and 1405;

(2) The cession, repudiation or renunciation of hereditary rights or of those of the conjugal
partnership of gains;

(3) The power to administer property, or any other power which has for its object an act
appearing or which should appear in a public document, or should prejudice a third person;

(4) The cession of actions or rights proceeding from an act appearing in a public document.

All other contracts where the amount involved exceeds five hundred pesos (P500.00) must appear in
writing, even a private one. But sales of goods, chattels or things in action are governed by articles,
1403, No. 2 and 1405.

IV. Defective Contracts

Rescissible Contracts:

(1) Those which are entered into by guardians whenever the wards whom they represent
suffer lesion by more than one-fourth of the value of the things which are the object thereof;

(2) Those agreed upon in representation of absentees, if the latter suffer the lesion stated in
the preceding number;

(3) Those undertaken in fraud of creditors when the latter cannot in any other manner
collect the claims due them;

(4) Those which refer to things under litigation if they have been entered into by the
defendant without the knowledge and approval of the litigants or of competent judicial authority;

(5) All other contracts specially declared by law to be subject to rescission.

(6) Payments made in a state of insolvency on account of obligations not yet enforceable
 Voidable Contracts:

Contracts entered into during a lucid interval are valid. Contracts agreed to in a state of
drunkenness or during a hypnotic spell are voidable.

The incapacity declared in Article 1327 is subject to the modifications determined by law,
and is understood to be without prejudice to special disqualifications established in the laws.

A contract where consent is given through mistake, violence, intimidation, undue influence,
or fraud is voidable.

In order that mistake may invalidate consent, it should refer to the substance of the thing
which is the object of the contract, or to those conditions which have principally moved one or both
parties to enter into the contract.

Mistake as to the identity or qualifications of one of the parties will vitiate consent only
when such identity or qualifications have been the principal cause of the contract.

A simple mistake of account shall give rise to its correction.

When one of the parties is unable to read, or if the contract is in a language not understood
by him, and mistake or fraud is alleged, the person enforcing the contract must show that the terms
thereof have been fully explained to the former.

There is no mistake if the party alleging it knew the doubt, contingency or risk affecting the
object of the contract.

Mutual error as to the legal effect of an agreement when the real purpose of the parties is
frustrated, may vitiate consent.

There is violence when in order to wrest consent, serious or irresistible force is employed.

There is intimidation when one of the contracting parties is compelled by a reasonable and
well-grounded fear of an imminent and grave evil upon his person or property, or upon the person
or property of his spouse, descendants or ascendants, to give his consent.

To determine the degree of intimidation, the age, sex and condition of the person shall be
borne in mind.

A threat to enforce one's claim through competent authority, if the claim is just or legal, does
not vitiate consent.
 Violence or intimidation shall annul the obligation, although it may have been employed by a
third person who did not take part in the contract.

There is undue influence when a person takes improper advantage of his power over the will
of another, depriving the latter of a reasonable freedom of choice. The following circumstances shall
be considered: the confidential, family, spiritual and other relations between the parties, or the fact
that the person alleged to have been unduly influenced was suffering from mental weakness, or was
ignorant or in financial distress.

There is fraud when, through insidious words or machinations of one of the contracting
parties, the other is induced to enter into a contract which, without them, he would not have agreed
to.

Failure to disclose facts, when there is a duty to reveal them, as when the parties are bound
by confidential relations, constitutes fraud.

The usual exaggerations in trade, when the other party had an opportunity to know the facts,
are not in themselves fraudulent.

A mere expression of an opinion does not signify fraud, unless made by an expert and the
other party has relied on the former's special knowledge.

Misrepresentation by a third person does not vitiate consent, unless such misrepresentation
has created substantial mistake and the same is mutual.

Misrepresentation made in good faith is not fraudulent but may constitute error.

In order that fraud may make a contract voidable, it should be serious and should not have
been employed by both contracting parties.

Incidental fraud only obliges the person employing it to pay damages.

The following contracts are voidable or annullable, even though there may have been no
damage to the contracting parties:

(1) Those where one of the parties is incapable of giving consent to a contract;

(2) Those where the consent is vitiated by mistake, violence, intimidation, undue influence or
fraud.

These contracts are binding, unless they are annulled by a proper action in court. They are
susceptible of ratification.

The action for annulment shall be brought within four (4) years.

This period shall begin:

 In cases of intimidation, violence or undue influence, from the time the defect of the
consent ceases.

In case of mistake or fraud, from the time of the discovery of the same.

And when the action refers to contracts entered into by minors or other incapacitated
persons, from the time the guardianship ceases.
Ratification extinguishes the action to annul a voidable contract.

Ratification may be effected expressly or tacitly. It is understood that there is a tacit

ratification if, with knowledge of the reason which renders the contract voidable and such reason
having ceased, the person who has a right to invoke it should execute an act which necessarily
implies an intention to waive his right.

Ratification may be effected by the guardian of the incapacitated person.

Ratification does not require the conformity of the contracting party who has no right to
bring the action for annulment.

Ratification cleanses the contract from all its defects from the moment it was constituted.

The action for the annulment of contracts may be instituted by all who are thereby obliged
principally or subsidiarily. However, persons who are capable cannot allege the incapacity of those
with whom they contracted; nor can those who exerted intimidation, violence, or undue influence,
or employed fraud, or caused mistake base their action upon these flaws of the contract.

An obligation having been annulled, the contracting parties shall restore to each other the
things which have been the subject matter of the contract, with their fruits, and the price with its
interest, except in cases provided by law.

In obligations to render service, the value thereof shall be the basis for damages.

When the defect of the contract consists in the incapacity of one of the parties, the
incapacitated person is not obliged to make any restitution except insofar as he has been benefited
by the thing or price received by him.

Whenever the person obliged by the decree of annulment to return the thing cannot do so
because it has been lost through his fault, he shall return the fruits received and the value of the
thing at the time of the loss, with interest from the same date.
The action for annulment of contracts shall be extinguished when the thing which is the
object thereof is lost through the fraud or fault of the person who has a right to institute the
proceedings.

If the right of action is based upon the incapacity of any one of the contracting parties, the
loss of the thing shall not be an obstacle to the success of the action, unless said loss took place
through the fraud or fault of the plaintiff.
 As long as one of the contracting parties does not restore what in virtue of the decree of
annulment he is bound to return, the other cannot be compelled to comply with what is incumbent
upon him.

Unenforceable Contracts:

The following contracts are unenforceable, unless they are ratified:

(1) Those entered into in the name of another person by one who has been given no
authority or legal representation, or who has acted beyond his powers;

(2) Those that do not comply with the Statute of Frauds.

In the following cases an agreement hereafter made shall be unenforceable by action, unless
the same, or some note or memorandum thereof, be in writing, and subscribed by the party charged,
or by his agent; evidence, therefore, of the agreement cannot be received without the writing, or a
secondary evidence of its contents:

(a) An agreement that by its terms is not to be performed within a year from the
making thereof;

(b) A special promise to answer for the debt, default, or miscarriage of another;

(c) An agreement made in consideration of marriage, other than a mutual promise to

marry;

(d) An agreement for the sale of goods, chattels or things in action, at a price not less
than five hundred pesos (P500.00), unless the buyer accept and receive part of such goods
and chattels, or the evidences, or some of them, of such things in action or pay at the time
some part of the purchase money; but when a sale is made by auction and entry is made by
the auctioneer in his sales book, at the time of the sale, of the amount and kind of property
sold, terms of sale, price, names of the purchasers and person on whose account the sale is
made, it is a sufficient memorandum;

(e) An agreement for the leasing for a longer period than one (1) year, or for the sale
of real property or of an interest therein;

(f) A representation as to the credit of a third person.

(3) Those where both parties are incapable of giving consent to a contract.

Unauthorized contracts are governed by Article 1317 and the principles of agency.

Contracts infringing the Statute of Frauds, referred to in No. 2 of Article 1403, are ratified
by the failure to object to the presentation of oral evidence to prove the same, or by the acceptance
of benefit under them.
 When a contract is enforceable under the Statute of Frauds, and a public document is
necessary for its registration in the Registry of Deeds, the parties may avail themselves of the right
under Article 1357.

In a contract where both parties are incapable of giving consent, express or implied,
ratification by the parent, or guardian, as the case may be, of one of the contracting parties shall give
the contract the same effect as if only one of them were incapacitated.

If ratification is made by the parents or guardians, as the case may be, of both contracting
parties, the contract shall be validated from the inception.

No one may contract in the name of another without being authorized by the latter, or
unless he has by law a right to represent him.

A contract entered into in the name of another by one who has no authority or legal
representation, or who has acted beyond his powers, shall be unenforceable, unless it is ratified,
expressly or impliedly, by the person on whose behalf it has been executed, before it is revoked by
the other contracting party.

Void Contracts:

(1) Those whose cause, object or purpose is contrary to law, morals, good customs, public
order or public policy;

(2) Those which are absolutely simulated or fictitious;

(3) Those whose cause or object did not exist at the time of the transaction;

(4) Those whose object is outside the commerce of men;

(5) Those which contemplate an impossible service;

(6) Those where the intention of the parties relative to the principal object of the contract
cannot be ascertained;

(7) Those expressly prohibited or declared void by law.

These contracts cannot be ratified. Neither can the right to set up the defense of illegality be
waived.

An absolutely simulated or fictitious contract is void. A relative simulation, when it does not
prejudice a third person and is not intended for any purpose contrary to law, morals, good customs,
public order or public policy binds the parties to their real agreement.

Comparative table of defective contracts

Void Voidable Rescissible Unenforceable
1. Defect is caused by lack Defect is caused by Defect is caused Defect is caused by lack
of essential elements or vice of consent by injury/ of form, authority, or
illegality damage either capacity of both parties
to one of the not cured by prescription
parties of to a
3rd person

2. Do not, as a general rule Valid and enforceable Valid and Cannot be enforced by a
produce any legal effect until they are annulled enforceable proper action in court
by a competent court until they are
rescinded by a
competent
court

3. Action for the Action for annulment Action for Corresponding action
declaration or nullity or or defense of rescission may for recovery, if there was
inexistence or defense of annulability may prescribe total or partial
nullity or inexistence does prescribe performance of the
not prescribe unenforceable contract
under No. 1 or 3 of
Article 1403 may
prescribe

4. Not cured by Cured by prescription Cured by Not cured by

prescription prescription prescription

5. Cannot be ratified Can be ratified Need not be Can be ratified

ratified

6. Assailed not only by a Assailed only by a Assailed not Assailed only by a

contracting party but even contracting party only by a contracting party
by a third person whose contracting
interest is directly affected party but even
by a third
person who is
prejudiced or
damaged by the
contract

7. Assailed directly or Assailed directly or Assailed directly Assailed directly or

collaterally collaterally only collaterally
V. Effect of Contracts

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.

SALES

I. Definition and Essential Requisites of a Contract of Sale

By the contract of sale one of the contracting parties obligates himself to transfer the
ownership and to deliver a determinate thing, and the other to pay therefor a price certain in money
or its equivalent.

A contract of sale may be absolute or conditional.

Gross inadequacy of price does not affect a contract of sale, except as it may indicate a
defect in the consent, or that the parties really intended a donation or some other act or contract.

Where goods are sold by a person who is not the owner thereof, and who does not sell them
under authority or with the consent of the owner, the buyer acquires no better title to the goods
than the seller had, unless the owner of the goods is by his conduct precluded from denying the
seller's authority to sell.

Nothing, however, shall affect:

(1) The provisions of any factors' act, recording laws, or any other provision of law enabling
the apparent owner of goods to dispose of them as if he were the true owner thereof;

(2) The validity of any contract of sale under statutory power of sale or under the order of a
court of competent jurisdiction;

(3) Purchases made in a merchant's store, or in fairs, or markets, in accordance with the
Code of Commerce and special laws.

II. Parties to a Contract of Sale

All persons who are authorized by law to obligate themselves, may enter into a contract of
sale, with modifications.
 Where necessaries are those sold and delivered to a minor or other person without capacity
to act, he must pay a reasonable price therefor.

The following persons cannot acquire by purchase, even at a public or judicial auction, either
in person or through the mediation of another:

(1) The guardian, the property of the person or persons who may be under his guardianship;

(2) Agents, the property whose administration or sale may have been intrusted to them,
unless the consent of the principal has been given;

(3) Executors and administrators, the property of the estate under administration;

(4) Public officers and employees, the property of the State or of any subdivision thereof, or
of any government-owned or controlled corporation, or institution, the administration of which has
been intrusted to them; this provision shall apply to judges and government experts who, in any
manner whatsoever, take part in the sale;

(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other
officers and employees connected with the administration of justice, the property and rights in
litigation or levied upon an execution before the court within whose jurisdiction or territory they
exercise their respective functions; this prohibition includes the act of acquiring by assignment and
shall apply to lawyers, with respect to the property and rights which may be the object of any
litigation in which they may take part by virtue of their profession;

(6) Any others specially disqualified by law.

The prohibitions in the two preceding articles are applicable to sales in legal redemption,
compromises and renunciations.

III. Subject Matter

The thing must be licit and the vendor must have a right to transfer the ownership thereof at
the time it is delivered.

A thing is determinate when it is particularly designated or physical segregated from all

others of the same class.

The requisite that a thing be determinate is satisfied if at the time the contract is entered into,
the thing is capable of being made determinate without the necessity of a new or further agreement
between the parties.

Things having a potential existence may be the object of the contract of sale.

The efficacy of the sale of a mere hope or expectancy is deemed subject to the condition that
the thing will come into existence.
 The sale of a vain hope or expectancy is void.

The goods which form the subject of a contract of sale may be either existing goods, owned
or possessed by the seller, or goods to be manufactured, raised, or acquired by the seller after the
perfection of the contract of sale, in this Title called "future goods."

There may be a contract of sale of goods, whose acquisition by the seller depends upon a
contingency which may or may not happen.

The sole owner of a thing may sell an undivided interest therein.

In the case of fungible goods, there may be a sale of an undivided share of a specific mass,
though the seller purports to sell and the buyer to buy a definite number, weight or measure of the
goods in the mass, and though the number, weight or measure of the goods in the mass, and though
the number, weight or measure of the goods in the mass is undetermined. By such a sale the buyer
becomes owner in common of such a share of the mass as the number, weight or measure bought
bears to the number, weight or measure of the mass. If the mass contains less than the number,
weight or measure bought, the buyer becomes the owner of the whole mass and the seller is bound
to make good the deficiency from goods of the same kind and quality, unless a contrary intent
appears.

Things subject to a resolutory condition may be the object of the contract of sale.

IV. Obligations of the Seller to Transfer Ownership

The goods which form the subject of a contract of sale may be either existing goods, owned
or possessed by the seller, or goods to be manufactured, raised, or acquired by the seller after the
perfection of the contract of sale, called "future goods."

There may be a contract of sale of goods, whose acquisition by the seller depends upon a
contingency which may or may not happen.

Where goods are sold by a person who is not the owner thereof, and who does not sell them
under authority or with the consent of the owner, the buyer acquires no better title to the goods
than the seller had, unless the owner of the goods is by his conduct precluded from denying the
seller's authority to sell.

The thing must be licit and the vendor must have a right to transfer the ownership thereof at
the time it is delivered.

V. Price

The sum stipulated as the equivalent of the thing sold and also every incident taken into
consideration for the fixing of the price, put to the debit of the vendee and agreed to by him.

In order that the price may be considered certain, it shall be sufficient that it be so
 with reference to another thing certain, or that the determination thereof be left to the
judgment of a special person or persons.

Should such person or persons be unable or unwilling to fix it, the contract shall be
inefficacious, unless the parties subsequently agree upon the price.

If the third person or persons acted in bad faith or by mistake, the courts may fix the
price.

Where such third person or persons are prevented from fixing the price or terms by
fault of the seller or the buyer, the party not in fault may have such remedies against the
party in fault as are allowed the seller or the buyer, as the case may be.

Gross inadequacy of price does not affect a contract of sale, except as it may indicate
a defect in the consent, or that the parties really intended a donation or some other act or
contract.

If the price is simulated, the sale is void, but the act may be shown to have been in
reality a donation, or some other act or contract.

The price of securities, grain, liquids, and other things shall also be considered
certain, when the price fixed is that which the thing sold would have on a definite day, or in
a particular exchange or market, or when an amount is fixed above or below the price on
such day, or in such exchange or market, provided said amount be certain.

The fixing of the price can never be left to the discretion of one of the contracting
parties. However, if the price fixed by one of the parties is accepted by the other, the sale is
perfected.

Where the price cannot be determined, or in any other manner, the contract is
inefficacious. However, if the thing or any part thereof has been delivered to and
appropriated by the buyer he must pay a reasonable price therefor. What is a reasonable
price is a question of fact dependent on the circumstances of each particular case.

VI. Formation of Contract of Sale

The contract of sale is perfected at the moment there is a meeting of minds upon the thing
which is the object of the contract and upon the price.

From that moment, the parties may reciprocally demand performance, subject to the
provisions of the law governing the form of contracts.

A promise to buy and sell a determinate thing for a price certain is reciprocally demandable.

An accepted unilateral promise to buy or to sell a determinate thing for a price certain is
binding upon the promisor if the promise is supported by a consideration distinct from the price.
 When the offerer has allowed the offeree a certain period to accept, the offer may be
withdrawn at any time before acceptance by communicating such withdrawal, except when the
option is founded upon a consideration, as something paid or promised.

VII. Transfer of Ownership

The ownership of the thing sold shall be transferred to the vendee upon the actual or
constructive delivery thereof.

The ownership of the thing sold is acquired by the vendee from the moment it is delivered
to him in any of the ways specified in Articles 1497 to 1501, or in any other manner signifying an
agreement that the possession is transferred from the vendor to the vendee.

The thing sold shall be understood as delivered, when it is placed in the control and
possession of the vendee.

When the sale is made through a public instrument, the execution thereof shall be equivalent
to the delivery of the thing which is the object of the contract, if from the deed the contrary does
not appear or cannot clearly be inferred.

With regard to movable property, its delivery may also be made by the delivery of the keys of
the place or depository where it is stored or kept.

The delivery of movable property may likewise be made by the mere consent or agreement
of the contracting parties, if the thing sold cannot be transferred to the possession of the vendee at
the time of the sale, or if the latter already had it in his possession for any other reason.

There may also be tradition constitutum possessorium.

With respect to incorporeal property, the provisions of the first paragraph of article 1498
shall govern. In any other case wherein said provisions are not applicable, the placing of the titles of
ownership in the possession of the vendee or the use by the vendee of his rights, with the vendor's
consent, shall be understood as a delivery.

VIII. Risk of Loss

The following rules shall be observed in case of the improvement, loss or deterioration of
the thing during the pendency of the condition:

(1) If the thing is lost without the fault of the debtor, the obligation shall be extinguished;

(2) If the thing is lost through the fault of the debtor, he shall be obliged to pay damages; it
is understood that the thing is lost when it perishes, or goes out of commerce, or disappears in such
a way that its existence is unknown or it cannot be recovered;
 (3) When the thing deteriorates without the fault of the debtor, the impairment is to be
borne by the creditor;

(4) If it deteriorates through the fault of the debtor, the creditor may choose between the
rescission of the obligation and its fulfillment, with indemnity for damages in either case;

(5) If the thing is improved by its nature, or by time, the improvement shall inure to the
benefit of the creditor;

(6) If it is improved at the expense of the debtor, he shall have no other right than that
granted to the usufructuary.
In an obligation to deliver a generic thing, the loss or destruction of anything of the same
kind does not extinguish the obligation.

If at the time the contract of sale is perfected, the thing which is the object of the contract
has been entirely lost, the contract shall be without any effect.

But if the thing should have been lost in part only, the vendee may choose between
withdrawing from the contract and demanding the remaining part, paying its price in proportion to
the total sum agreed upon.

Where the parties purport a sale of specific goods, and the goods without the knowledge of
the seller have perished in part or have wholly or in a material part so deteriorated in quality as to be
substantially changed in character, the buyer may at his option treat the sale:

(1) As avoided; or
(2) As valid in all of the existing goods or in so much thereof as have not deteriorated, and as
binding the buyer to pay the agreed price for the goods in which the ownership will pass, if the sale
was divisible.

IX. Documents of Title

"Document of title to goods" includes any bill of lading, dock warrant, "quedan," or
warehouse receipt or order for the delivery of goods, or any other document used in the ordinary
course of business in the sale or transfer of goods, as proof of the possession or control of the
goods, or authorizing or purporting to authorize the possessor of the document to transfer or
receive, either by indorsement or by delivery, goods represented by such document.

X. Remedies of an Unpaid Seller

1. Possessory lien over the goods

2. Right of stoppage in transitu after he has parted with the possession of the goods and the
buyer becomes insolvent
3. Special Right of resale
4. Special Right to rescind the sale
5. Action for the price
6. Action for damages
XI. Performance of Contract

Where the seller delivers to the buyer a quantity of goods less than he contracted to sell, the
buyer may reject them, but if the buyer accepts or retains the goods so delivered, knowing that the
seller is not going to perform the contract in full, he must pay for them at the contract rate. If,
however, the buyer has used or disposed of the goods delivered before he knows that the seller is
not going to perform his contract in full, the buyer shall not be liable for more than the fair value to
him of the goods so received.

Where the seller delivers to the buyer a quantity of goods larger than he contracted to sell,
the buyer may accept the goods included in the contract and reject the rest. If the buyer accepts the
whole of the goods so delivered he must pay for them at the contract rate.

Where the seller delivers to the buyer the goods he contracted to sell mixed with goods of a
different description not included in the contract, the buyer may accept the goods which are in
accordance with the contract and reject the rest.

If the subject matter is indivisible, the buyer may reject the whole of the goods.

The provisions of this article are subject to any usage of trade, special agreement, or course
of dealing between the parties.

The vendor is bound to deliver the thing sold and its accessions and accessories in the
condition in which they were upon the perfection of the contract.

All the fruits shall pertain to the vendee from the day on which the contract was perfected.

Any injury to or benefit from the thing sold, after the contract has been perfected, from the
moment of the perfection of the contract to the time of delivery, shall be governed by Articles 1163
to 1165, and 1262.

This rule shall apply to the sale of fungible things, made independently and for a single price,
or without consideration of their weight, number, or measure.

Should fungible things be sold for a price fixed according to weight, number, or measure, the
risk shall not be imputed to the vendee until they have been weighed, counted, or measured and
delivered, unless the latter has incurred in delay.

The obligation to deliver the thing sold includes that of placing in the control of the vendee
all that is mentioned in the contract, in conformity with the following rules:

If the sale of real estate should be made with a statement of its area, at the rate of a certain
price for a unit of measure or number, the vendor shall be obliged to deliver to the vendee, if the
latter should demand it, all that may have been stated in the contract; but, should this be not
possible, the vendee may choose between a proportional reduction of the price and the rescission of
the contract, provided that, in the latter case, the lack in the area be not less than one-tenth of that
stated.

The same shall be done, even when the area is the same, if any part of the immovable is not
of the quality specified in the contract.

The rescission, in this case, shall only take place at the will of the vendee, when the inferior
value of the thing sold exceeds one-tenth of the price agreed upon.

Nevertheless, if the vendee would not have bought the immovable had he known of its
smaller area of inferior quality, he may rescind the sale.

The actions arising from Articles 1539 and 1542 shall prescribe in six months, counted from
the day of delivery.

XII. Warranties

Express warranties:

A statement or representation made by the seller of goods, contemporaneously and as a part

of the contract of sale, having reference to the character, quality, or title of the goods, and by which
he promises or undertakes to insure that certain facts are or shall be as he then represents.

Where one party expressly promised that the contingency or some act fixed by the contract
shall be performed, like a promise that the goods are of a certain kind and character or that certain
state of facts would exist, the promise constitutes a warranty, and failure of which gives rise to an
action for its breach.

Any affirmation of fact or any promise by the seller relating to the thing is an express
warranty if the natural tendency of such affirmation or promise is to induce the buyer to
purchase the same, and if the buyer purchase the thing relying thereon. No affirmation of
the value of the thing, nor any statement purporting to be a statement of the seller's opinion
only, shall be construed as a warranty, unless the seller made such affirmation or statement
as an expert and it was relied upon by the buyer.

Implied warranties:

That which the law derives by implication or inference from the nature of the transaction or
the relative situation or circumstances of the parties, irrespective of any intention of the seller to
create it.

a. Warranty against eviction

b. Warranty against hidden defects
c. Warranty as to Fitness and Merchantability
 In a contract of sale, unless a contrary intention appears, there is:

(1) An implied warranty on the part of the seller that he has a right to sell the thing
at the time when the ownership is to pass, and that the buyer shall from that time have and
enjoy the legal and peaceful possession of the thing;

(2) An implied warranty that the thing shall be free from any hidden faults or
defects, or any charge or encumbrance not declared or known to the buyer.

This shall not be held to render liable a sheriff, auctioneer, mortgagee, pledgee, or
other person professing to sell by virtue of authority in fact or law, for the sale of a thing in
which a third person has a legal or equitable interest.

Effects of warranties:

Where there is a breach of warranty by the seller, the buyer may, at his election:

(1) Accept or keep the goods and set up against the seller, the breach of warranty by way of
recoupment in diminution or extinction of the price;

(2) Accept or keep the goods and maintain an action against the seller for damages for the
breach of warranty;

(3) Refuse to accept the goods, and maintain an action against the seller for damages for the
breach of warranty;

(4) Rescind the contract of sale and refuse to receive the goods or if the goods have already
been received, return them or offer to return them to the seller and recover the price or any part
thereof which has been paid.

When the buyer has claimed and been granted a remedy in anyone of these ways, no other
remedy can thereafter be granted, without prejudice to the provisions of the second paragraph of
Article 1191.

Where the goods have been delivered to the buyer, he cannot rescind the sale if he knew of
the breach of warranty when he accepted the goods without protest, or if he fails to notify the seller
within a reasonable time of the election to rescind, or if he fails to return or to offer to return the
goods to the seller in substantially as good condition as they were in at the time the ownership was
transferred to the buyer. But if deterioration or injury of the goods is due to the breach or warranty,
such deterioration or injury shall not prevent the buyer from returning or offering to return the
goods to the seller and rescinding the sale.

Where the buyer is entitled to rescind the sale and elects to do so, he shall cease to be liable
for the price upon returning or offering to return the goods. If the price or any part thereof has
already been paid, the seller shall be liable to repay so much thereof as has been paid, concurrently
with the return of the goods, or immediately after an offer to return the goods in exchange for
repayment of the price.

Where the buyer is entitled to rescind the sale and elects to do so, if the seller refuses to
accept an offer of the buyer to return the goods, the buyer shall thereafter be deemed to hold the
goods as bailee for the seller, but subject to a lien to secure the payment of any portion of the price
which has been paid, and with the remedies for the enforcement of such lien allowed to an unpaid
seller by Article 1526.

(5) In the case of breach of warranty of quality, such loss, in the absence of special
circumstances showing proximate damage of a greater amount, is the difference between the value
of the goods at the time of delivery to the buyer and the value they would have had if they had
answered to the warranty.

XIII. Breach of Contract

Violation of a contractual obligation by failing to perform one's own promise, by repudiating

it, or by interfering with another party's performance.

A breach may be one by non-performance, or by repudiation, or by both. Every breach gives

rise to a claim for damages, and may give rise to other remedies. Even if the injured party sustains
no pecuniary loss or is unable to show such loss with sufficient certainty, he has at least a claim for
nominal damages. If a court chooses to ignore a trifling departure, there is no breach and no claim
arises.

XIV. Extinguishment of the Sale

Obligations are extinguished by:

(1) Payment or performance;

(2) Loss of the thing due;
(3) Condonation or remission of the debt;
(4) Confusion or merger of the rights of creditor and debtor;
(5) Compensation;
(6) Novation.

Other causes:

1. Annulment,
2. Rescission,
3. Fulfillment of a resolutory condition, and
4. Prescription.

Sales are extinguished by the same causes as all other obligations and by conventional or
legal redemption.
XV. The Subdivision and Condominium Buyers' Protective Decree (P.D. 957)

XVI. The Condominium Act (R.A. No. 4726)

SUCCESSION

I. General Provisions

The inheritance includes all the property, rights and obligations of a person which are not
extinguished by his death.

Succession may be:

(1) Testamentary;
(2) Legal or intestate; or
(3) Mixed.

Testamentary succession is that which results from the designation of an heir, made in a will
executed in the form prescribed by law.

Mixed succession is that effected partly by will and partly by operation of law.

Succession is a mode of acquisition by virtue of which the property, rights and obligations to
the extent of the value of the inheritance, of a person are transmitted through his death to another
or others either by his will or by operation of law.

"Decedent" is the general term applied to the person whose property is transmitted through
succession, whether or not he left a will. If he left a will, he is also called the testator.
 The inheritance of a person includes not only the property and the transmissible rights and
obligations existing at the time of his death, but also those which have accrued thereto since the
opening of the succession.

The rights to the succession are transmitted from the moment of the death of the decedent.

An heir is a person called to the succession either by the provision of a will or by operation
of law.

Devisees and legatees are persons to whom gifts of real and personal property are
respectively given by virtue of a will.

II. Testamentary Succession

A will is an act whereby a person is permitted, with the formalities prescribed by law, to
control to a certain degree the disposition of this estate, to take effect after his death.

The testator may not make a testamentary disposition in such manner that another person
has to determine whether or not it is to be operative.

The making of a will is a strictly personal act; it cannot be left in whole or in part to the
discretion of a third person, or accomplished through the instrumentality of an agent or attorney.

The duration or efficacy of the designation of heirs, devisees or legatees, or the

determination of the portions which they are to take, when referred to by name, cannot be left to
the discretion of a third person.

The testator may entrust to a third person the distribution of specific property or sums of
money that he may leave in general to specified classes or causes, and also the designation of the
persons, institutions or establishments to which such property or sums are to be given or applied.

The validity of a will as to its form depends upon the observance of the law in force at the
time it is made.

All persons who are not expressly prohibited by law may make a will.

A married woman may make a will without the consent of her husband, and without the
authority of the court.

A married woman may dispose by will of all her separate property as well as her share of the
conjugal partnership or absolute community property.
III. Legal or Intestate Succession

Legal or intestate succession takes place:

1. If a person dies without a will

2. If a person dies with a void will

3. If a person dies with a will which has subsequently lost its validity

4. When the will does not institute an heir to, or dispose of all the property belonging to the
testator;

5. If the suspensive condition attached to the institution of the heir does not happen or is
not fulfilled

6. If the heir dies before the testator,

7. If the heir repudiates the inheritance, there being no substitution, and no right of
accretion takes place

8. When the heir instituted is incapable of succeeding, except in cases provided in the Code.

In default of testamentary heirs, the law vests the inheritance in the legitimate and
illegitimate relatives of the deceased, in the surviving spouse, and in the State.

In every inheritance, the relative nearest in degree excludes the more distant ones, saving the
right of representation when it properly takes place.

Relatives in the same degree shall inherit in equal shares, subject to the provisions of Article
1006 with respect to relatives of the full and half blood, and of Article 987, par. 2, concerning
division between the paternal and maternal lines.

Proximity of relationship is determined by the number of generations. Each generation

forms a degree.

A series of degrees forms a line, which may be either direct or collateral.

A direct line is that constituted by the series of degrees among ascendants and descendants.

A collateral line is that constituted by the series of degrees among persons who are not
ascendants and descendants, but who come from a common ancestor.

The direct line is either descending or ascending.

The former unites the head of the family with those who descend from him.

The latter binds a person with those from whom he descends.

 In the line, as many degrees are counted as there are generations or persons, excluding the
progenitor.

In the direct line, ascent is made to the common ancestor. Thus, the child is one degree
removed from the parent, two from the grandfather, and three from the great-grandparent.

In the collateral line, ascent is made to the common ancestor and then descent is made to
the person with whom the computation is to be made. Thus, a person is two degrees removed from
his brother, three from his uncle, who is the brother of his father, four from his first cousin, and so
forth.

Full blood relationship is that existing between persons who have the same father and the
same mother.

Half-blood relationship is that existing between persons who have the same father, but not
the same mother, or the same mother, but not the same father.

If there are several relatives of the same degree, and one or some of them are unwilling or
incapacitated to succeed, his portion shall accrue to the others of the same degree, save the right of
representation when it should take place.

If the inheritance should be repudiated by the nearest relative, should there be one only, or
by all the nearest relatives called by law to succeed, should there be several, those of the following
degree shall inherit in their own right and cannot represent the person or persons repudiating the
inheritance.

Representation is a right created by fiction of law, by virtue of which the representative is

raised to the place and the degree of the person represented, and acquires the rights which the latter
would have if he were living or if he could have inherited.

The representative is called to the succession by the law and not by the person represented.
The representative does not succeed the person represented but the one whom the person
represented would have succeeded.

The right of representation takes place in the direct descending line, but never in the
ascending.

In the collateral line, it takes place only in favor of the children of brothers or sisters,
whether they be of the full or half blood.

In order that representation may take place, it is necessary that the representative himself be
capable of succeeding the decedent.

Whenever there is succession by representation, the division of the estate shall be made per
stirpes, in such manner that the representative or representatives shall not inherit more than what the
person they represent would inherit, if he were living or could inherit.
 When children of one or more brothers or sisters of the deceased survive, they shall inherit
from the latter by representation, if they survive with their uncles or aunts. But if they alone survive,
they shall inherit in equal portions.

A person may represent him whose inheritance he has renounced.

Heirs who repudiate their share may not be represented.

Succession pertains, in the first place, to the descending direct line.

Legitimate children and their descendants succeed the parents and other ascendants, without
distinction as to sex or age, and even if they should come from different marriages.

An adopted child succeeds to the property of the adopting parents in the same manner as a
legitimate child.

The children of the deceased shall always inherit from him in their own right, dividing the
inheritance in equal shares.

Should children of the deceased and descendants of other children who are dead, survive,
the former shall inherit in their own right, and the latter by right of representation.

The grandchildren and other descendants shall inherit by right of representation, and if any
one of them should have died, leaving several heirs, the portion pertaining to him shall be divided
among the latter in equal portions.

If illegitimate children survive with legitimate children, the shares of the former shall be in
the proportions prescribed by article 895.

In case of the death of an adopted child, leaving no children or descendants, his parents and
relatives by consanguinity and not by adoption, shall be his legal heirs.

In default of legitimate children and descendants of the deceased, his parents and ascendants
shall inherit from him, to the exclusion of collateral relatives.

The father and mother, if living, shall inherit in equal shares.

Should one only of them survive, he or she shall succeed to the entire estate of the child.

In default of the father and mother, the ascendants nearest in degree shall inherit.

Should there be more than one of equal degree belonging to the same line they shall divide
the inheritance per capita; should they be of different lines but of equal degree, one-half shall go to
the paternal and the other half to the maternal ascendants. In each line the division shall be made
per capita.

In the absence of legitimate descendants or ascendants, the illegitimate children shall succeed
to the entire estate of the deceased.
 If, together with illegitimate children, there should survive descendants of another
illegitimate child who is dead, the former shall succeed in their own right and the latter by right of
representation.

The hereditary rights granted by the two preceding articles to illegitimate children shall be
transmitted upon their death to their descendants, who shall inherit by right of representation from
their deceased grandparent.

If legitimate ascendants are left, the illegitimate children shall divide the inheritance with
them, taking one-half of the estate, whatever be the number of the ascendants or of the illegitimate
children.

An illegitimate child has no right to inherit ab intestato from the legitimate children and
relatives of his father or mother; nor shall such children or relatives inherit in the same manner from
the illegitimate child.

If an illegitimate child should die without issue, either legitimate or illegitimate, his father or
mother shall succeed to his entire estate; and if the child's filiation is duly proved as to both parents,
who are both living, they shall inherit from him share and share alike.

In default of the father or mother, an illegitimate child shall be succeeded by his or her
surviving spouse who shall be entitled to the entire estate.

If the widow or widower should survive with brothers and sisters, nephews and nieces, she
or he shall inherit one-half of the estate, and the latter the other half.

In the absence of legitimate descendants and ascendants, and illegitimate children and their
descendants, whether legitimate or illegitimate, the surviving spouse shall inherit the entire estate,
without prejudice to the rights of brothers and sisters, nephews and nieces, should there be any,
under Article 1001.

If a widow or widower and legitimate children or descendants are left, the surviving spouse
has in the succession the same share as that of each of the children.

When the widow or widower survives with legitimate parents or ascendants, the surviving
spouse shall be entitled to one-half of the estate, and the legitimate parents or ascendants to the
other half.

If a widow or widower survives with illegitimate children, such widow or widower shall be
entitled to one-half of the inheritance, and the illegitimate children or their descendants, whether
legitimate or illegitimate, to the other half.

When the widow or widower survives with legitimate children or their descendants and
illegitimate children or their descendants, whether legitimate or illegitimate, such widow or widower
shall be entitled to the same share as that of a legitimate child.
 If legitimate ascendants, the surviving spouse, and illegitimate children are left, the
ascendants shall be entitled to one-half of the inheritance, and the other half shall be divided
between the surviving spouse and the illegitimate children so that such widow or widower shall have
one-fourth of the estate, and the illegitimate children the other fourth.

Should brothers and sisters or their children survive with the widow or widower, the latter
shall be entitled to one-half of the inheritance and the brothers and sisters or their children to the
other half.

In case of a legal separation, if the surviving spouse gave cause for the separation, he or she
shall not have any of the rights granted in the preceding articles.

If there are no descendants, ascendants, illegitimate children, or a surviving spouse, the

collateral relatives shall succeed to the entire estate of the deceased in accordance with the following
articles.

Should the only survivors be brothers and sisters of the full blood, they shall inherit in equal
shares.

Should brothers and sisters survive together with nephews and nieces, who are the children
of the descendant's brothers and sisters of the full blood, the former shall inherit per capita, and the
latter per stirpes.

Should brother and sisters of the full blood survive together with brothers and sisters of the
half blood, the former shall be entitled to a share double that of the latter.

In case brothers and sisters of the half blood, some on the father's andsome on the mother's
side, are the only survivors, all shall inherit in equal shares without distinction as to the origin of the
property.

Children of brothers and sisters of the half-blood shall succeed per capita or per stirpes, in
accordance with the rules laid down for brothers and sisters of the full blood.

Should there be neither brothers nor sisters nor children of brothers or sisters, the other
collateral relatives shall succeed to the estate.

The latter shall succeed without distinction of lines or preference among them by reason of
relationship by the whole blood.

The right to inherit ab intestato shall not extend beyond the fifth degree of relationship in the
collateral line.

In default of persons entitled to succeed, the State shall inherit the whole estate.

In order that the State may take possession of the property mentioned in the preceding
article, the pertinent provisions of the Rules of Court must be observed.
 After the payment of debts and charges, the personal property shall be assigned to the
municipality or city where the deceased last resided in the Philippines, and the real estate to the
municipalities or cities, respectively, in which the same is situated.

If the deceased never resided in the Philippines, the whole estate shall be assigned to the
respective municipalities or cities where the same is located.

Such estate shall be for the benefit of public schools, and public charitable institutions and
centers, in such municipalities or cities. The court shall distribute the estate as the respective needs
of each beneficiary may warrant.

The court, at the instance of an interested party, or on its own motion, may order the
establishment of a permanent trust, so that only the income from the property shall be used.

If a person legally entitled to the estate of the deceased appears and files a claim hereto with
the court within five (5) years from the date the property was delivered to the State, such person
shall be entitled to the possession of the same, or if sold, the municipality or city shall be
accountable to him for such part of the proceeds as may not have been lawfully spent.

IV. Provisions Common to Testate and Intestate Succession

Accretion is a right by virtue of which, when two or more persons are called to the same
inheritance, devise or legacy, the part assigned to the one who renounces or cannot receive his share,
or who died before the testator, is added or incorporated to that of his co-heirs, co-devisees, or co-
legatees.

In order that the right of accretion may take place in a testamentary succession, it shall be
necessary:

(1) That two or more persons be called to the same inheritance, or to the same portion
thereof, pro indiviso; and

(2) That one of the persons thus called die before the testator, or renounce the inheritance,
or be incapacitated to receive it.

Persons Incapable of Succeeding:

(1) The priest who heard the confession of the testator during his last illness, or the minister
of the gospel who extended spiritual aid to him during the same period;

(2) The relatives of such priest or minister of the gospel within the fourth degree, the
church, order, chapter, community, organization, or institution to which such priest or minister may
belong;

(3) A guardian with respect to testamentary dispositions given by a ward in his favor before
the final accounts of the guardianship have been approved, even if the testator should die after the
approval thereof; nevertheless, any provision made by the ward in favor of the guardian when the
latter is his ascendant, descendant, brother, sister, or spouse, shall be valid;

(4) Any attesting witness to the execution of a will, the spouse, parents, or children, or any
one claiming under such witness, spouse, parents, or children;

(5) Any physician, surgeon, nurse, health officer or druggist who took care of the testator
during his last illness;

(6) Individuals, associations and corporations not permitted by law to inherit.

The following donations shall be void:

(1) Those made between persons who were guilty of adultery or concubinage at the time of
the donation;

(2) Those made between persons found guilty of the same criminal offense, in consideration
thereof;

(3) Those made to a public officer or his wife, descendants and ascendants, by reason of his
office.

In the case referred to in No. 1, the action for declaration of nullity may be brought by the
spouse of the donor or donee; and the guilt of the donor and donee may be proved by
preponderance of evidence in the same action.

The following are incapable of succeeding by reason of unworthiness:

(1) Parents who have abandoned their children or induced their daughters to lead a corrupt
or immoral life, or attempted against their virtue;

(2) Any person who has been convicted of an attempt against the life of the testator, his or
her spouse, descendants, or ascendants;

(3) Any person who has accused the testator of a crime for which the law prescribes
imprisonment for six years or more, if the accusation has been found groundless;

(4) Any heir of full age who, having knowledge of the violent death of the testator, should
fail to report it to an officer of the law within a month, unless the authorities have already taken
action; this prohibition shall not apply to cases wherein, according to law, there is no obligation to
make an accusation;

(5) Any person convicted of adultery or concubinage with the spouse of the testator;
 (6) Any person who by fraud, violence, intimidation, or undue influence should cause the
testator to make a will or to change one already made;

(7) Any person who by the same means prevents another from making a will, or from
revoking one already made, or who supplants, conceals, or alters the latter's will;

(8) Any person who falsifies or forges a supposed will of the decedent.

PARTNERSHIP

I. Contract of Partnership
By the contract of partnership two or more persons bind themselves to contribute money,
property or industry to a common fund, with the intention of dividing the profits among
themselves.

Two or more persons may also form a partnership for the exercise of a profession.

II. Rights and Obligations of Partnership

The partnership can, in general:

a) enter into contracts

b) acquire and possess property of all kinds
c) incur obligations
d) bring civil and criminal actions
e) be adjudged insolvent even if the individual members be each financially solvent
f) bear risk of loss
g) reimburse
h) operate under firm name
i) bound by partners admission
j) bound by notice to partner
k) liable for wrongful act of partner

III. Rights and Obligations of Partners Among Themselves

Rights:

1. Property rights

a) His rights in the specific partnership property

b) His interest in the partnership
c) His right to participate in the management
 2. Right to reimbursement for amounts advanced to the partnership and to indemnification
for risks in consequence of management

3. Right to associate with another person in his share

4. Right of access and inspection of partnership books
5. Right to true and full information of all things affecting the partnership
6. Right to a formal account of partnership affairs under certain circumstances
7. Right to have partnership dissolved under certain conditions.

Obligations:

1. With respect to contribution of property

To contribute what had been promised

To answer for eviction in case the partnership is deprived of determinate property
contributed

To answer to the partnership for the fruits of the property the contribution of which
is delayed, from the date they should have been contributed to the time of actual
delivery

To preserve the property with the diligence of a good father of a family pending
delivery to the partnership

To indemnify the partners for any damages caused to it by the retention of the same
or by delay in its contribution.

2. With respect to contribution of money and money converted to personal use

a) To contribute on the date due the amount he has undertaken to contribute to the
partnership

b) To reimburse any amount he may have taken from the partnership coffers and
converted to his own personal use

c) To pay the agreed or legal interest, if he fails to pay his contribution on time or in
case he takes any amount from the common fund and converted to his own personal use

d) To indemnify the partnership for the damages caused to it by the delay in the
contribution or the conversion of any sum for his personal benefit.

3. Not to Engage in Other Business for Himself

 Industrial partner- cannot engage in any business for himself unless the partnership expressly
permits him to do so. The other partners have the remedy of either excluding the erring partner
from the firm or of availing themselves of the benefits which he may have obtained.

Capitalist partner- The prohibition extends only to any operation which is of the same kind
of business in which the partnership is engaged unless there is a stipulation to the contrary.

4. To Contribute Additional Capital

As a general rule, a capitalist partner is not bound to contribute to the partnership more than
what he agreed to contribute but in case of an imminent loss of the business, and there is no
agreement to the contrary, he is under obligation to contribute an additional share to save the
venture. If he refuses to contribute, he shall be obliged to sell his interest in the partnership to other
partners.

5. Of Managing Partner who Collects Debt

Where a person is separately indebted to the partnership and to the managing partner at the
same time, any sum received by the managing partner shall be applied to the two credits in
proportion to their amounts, except where he received it entirely for the account of the partnership,
in which case the whole sum shall be applied to the partnership credit only.

6. Of Partner Who Receives Share in Partnership Credit

A partner who receives, in whole or in part, his share in the partnership, when the others
have not collected theirs, shall be obliged, if the debtor should thereafter become insolvent, to bring
to the partnership capital what he received even though he may have given receipt for his share only.

7. Of Partner for Damages to Partnership

Every partner is responsible to the partnership for damages suffered by it through his fault.
He cannot compensate them with the profits and benefits which he may have earned for the
partnership by his industry.

8. Duty to Render Information

Partners shall render on demand true and full information of all things affecting the
partnership to any partner or the legal representative of any deceased partner of any partner under
legal disability.

9. Obligation to account for any benefit and hold as trustee unauthorized personal profits

Every partner must account to the partnership for any benefit, and hold as trustee for it any
profits derived by him without the consent of the other partners from any transaction connected
with the formation, conduct, liquidation of the partnership or form any use by him of its property.
IV. Obligations of Partnership/Partners to Third Persons

Liability for contractual obligations:

All partners, including industrial partners, are personally liable with all their property. Their
individual liability is pro rata and subsidiary, unless otherwise stipulated

Liability of partnership for acts of partners:

Acts for apparently carrying on in the usual way the business of the partnership

General rule: Act binds the partnership.

Exception: Partnership is not bound if:

i. acting partner has in fact no authority and

ii. the third person knows that the acting partner has no authority

Acts of Strict Dominion or Ownership

General rule: Act does not bind the partnership.

Exception: Partnership is bound if:

the act is authorized by all the partners; or

they have abandoned the business

Acts in contravention of a restriction on authority

Partnership is not liable to third persons having actual or presumptive knowledge of

the restrictions.

Liability arising from partners tort or breach of trust:

a. Where, by any wrongful act or omission of any partner acting in the ordinary
course of business of the partnership or with authority of his co-partners, loss or injury is
caused to any person, not being a partner in the partnership

b. Where one partner, acting within the scope of his apparent authority, receives
money or property of a third person and misapplies it

c. Where the partnership, in the course of its business, receives money or property
and it is misapplied by any partner while it is in the custody of the partnership
V. Dissolution

Change in the relation of the partners caused by any partner ceasing to be associated in
carrying on the business.
 It is the point in time when the partners cease to carry on the business together. It represents
the demise of a partnership.

Dissolution is caused:

(1) Without violation of the agreement between the partners:

(a) By the termination of the definite term or particular undertaking specified

in the agreement;

(b) By the express will of any partner, who must act in good faith, when no
definite term or particular is specified;

(c) By the express will of all the partners who have not assigned their
interests or suffered them to be charged for their separate debts, either before or
after the termination of any specified term or particular undertaking;

(d) By the expulsion of any partner from the business bona fide in
accordance with such a power conferred by the agreement between the partners;

(2) In contravention of the agreement between the partners, where the circumstances
do not permit a dissolution under any other provision of this article, by the express will of
any partner at any time;

(3) By any event which makes it unlawful for the business of the partnership to be
carried on or for the members to carry it on in partnership;

(4) When a specific thing which a partner had promised to contribute to the
partnership, perishes before the delivery; in any case by the loss of the thing, when the
partner who contributed it having reserved the ownership thereof, has only transferred to
the partnership the use or enjoyment of the same; but the partnership shall not be dissolved
by the loss of the thing when it occurs after the partnership has acquired the ownership
thereof;

(5) By the death of any partner;

(6) By the insolvency of any partner or of the partnership;

(7) By the civil interdiction of any partner;

(8) By decree of court under the following article.

VI. Limited Partnership

 One formed by two or more persons having as members one or more general partners and
one or more limited partners, the latter not being personally liable for the obligations of the
partnership.

AGENCY

I. Definition of Agency

A contract whereby a person binds himself to render some service or to do something in

representation or on behalf of another with the consent or authority of the latter.

II. Powers

The agent who acts as such is not personally liable to the party with whom he contracts,
unless he expressly binds himself or exceeds the limits of his authority without giving such party
sufficient notice of his powers.

If the agent contracts in the name of the principal, exceeding the scope of his authority, and
the principal does not ratify the contract, it shall be void if the party with whom the agent contracted
is aware of the limits of the powers granted by the principal. In this case, however, the agent is liable
if he undertook to secure the principal's ratification.

If a duly authorized agent acts in accordance with the orders of the principal, the latter
cannot set up the ignorance of the agent as to circumstances whereof he himself was, or ought to
have been, aware.

So far as third persons are concerned, an act is deemed to have been performed within the
scope of the agent's authority, if such act is within the terms of the power of attorney, as written,
even if the agent has in fact exceeded the limits of his authority according to an understanding
between the principal and the agent.

A third person cannot set up the fact that the agent has exceeded his powers, if the principal
has ratified, or has signified his willingness to ratify the agent's acts.

A third person with whom the agent wishes to contract on behalf of the principal may
require the presentation of the power of attorney, or the instructions as regards the agency. Private
or secret orders and instructions of the principal do not prejudice third persons who have relied
upon the power of attorney or instructions shown them.

If an agent acts in his own name, the principal has no right of action against the persons with
whom the agent has contracted; neither have such persons against the principal.

In such case, the agent is the one directly bound in favor of the person with whom he has
contracted, as if the transaction were his own, except when the contract involves things belonging to
the principal.
 The provisions shall be understood to be without prejudice to the actions between the
principal and agent.

III. Express vs. Implied Agency

Express Implied
One where the agent has been actually One which is implied from the
authorized by the principal, either orally or in
writing; 1. acts of the principal- from his silence or
lack of action, or his failure to repudiate the
agency knowing that another person is acting
on his behalf without authority.

2. Acts of the agent- when he carries out the

agency, or from his silence or inaction
according to the circumstances.

IV. Agency by Estoppel

One who clothes another with apparent authority as his agent, and holds him out to the
public as such, cannot be permitted to deny the authority of such person in good faith, and in the
honest belief that he is what he appears to be.

V. General vs. Special Agency

General Agency Special Agency

One which comprises all the business of the One which comprises one or more specific
principal transactions

VI. Agency Couched in General Terms

One which is created in general terms and is deemed to comprise only acts of
administration.

VII. Agency Requiring Special Power of Attorney

The scope of the agents authority is what appears in the written terms of the power of
attorney. While third persons are bound to inquire into the extent or scope of the agents authority,
they are not required to go beyond the terms of the written power of attorney. Third persons
cannot be adversely affected by an understanding between the principal and his agent as to the limits
of the latters authority. In the same way, third persons need not concern themselves with
instructions given by the principal to his agent outside the written power of attorney.
VIII. Agency by Operation of Law

The concept is essentially one of estoppel and has been explained in this manner:

"The principal is bound by the acts of his agent with the apparent authority which he
knowingly permits the agent to assume, or which he holds the agent out to the public as possessing.
The question in every case is whether the principal has by his voluntary act placed the agent in such
a situation that a person of ordinary prudence, conversant with business usages and the nature of the
particular business, is justified in presuming that such agent has authority to perform the particular
act in question.
IX. Rights and Obligations of Principal

The principal must comply with all the obligations which the agent may have contracted
within the scope of his authority.

As for any obligation wherein the agent has exceeded his power, the principal is not bound
except when he ratifies it expressly or tacitly.

When the agent has exceeded his authority, the principal is solidarily liable with the agent if
the former allowed the latter to act as though he had full powers.

The principal must advance to the agent, should the latter so request, the sums necessary for
the execution of the agency.

Should the agent have advanced them, the principal must reimburse him therefor, even if the
business or undertaking was not successful, provided the agent is free from all fault.

The reimbursement shall include interest on the sums advanced, from the day on which the
advance was made.

The principal must also indemnify the agent for all the damages which the execution of the
agency may have caused the latter, without fault or negligence on his part.

The agent may retain in pledge the things which are the object of the agency until the
principal effects the reimbursement and pays the indemnity set forth in the two preceding articles.

If two or more persons have appointed an agent for a common transaction or undertaking,
they shall be solidarily liable to the agent for all the consequences of the agency.

When two persons contract with regard to the same thing, one of them with the agent and
the other with the principal, and the two contracts are incompatible with each other, that of prior
date shall be preferred, without prejudice to the provisions of Article 1544.

In the case referred to in the preceding article, if the agent has acted in good faith, the
principal shall be liable in damages to the third person whose contract must be rejected. If the agent
acted in bad faith, he alone shall be responsible.
 The principal is not liable for the expenses incurred by the agent in the following cases:

(1) If the agent acted in contravention of the principal's instructions, unless the latter should
wish to avail himself of the benefits derived from the contract;

(2) When the expenses were due to the fault of the agent;

(3) When the agent incurred them with knowledge that an unfavorable result would ensue, if
the principal was not aware thereof;

(4) When it was stipulated that the expenses would be borne by the agent, or that the latter
would be allowed only a certain sum.

X. Irrevocable Agency

An agency cannot be revoked if a bilateral contract depends upon it, or if it is the means of
fulfilling an obligation already contracted, or if a partner is appointed manager of a partnership in
the contract of partnership and his removal from the management is unjustifiable.

The agent may withdraw from the agency by giving due notice to the principal. If the latter
should suffer any damage by reason of the withdrawal, the agent must indemnify him therefor,
unless the agent should base his withdrawal upon the impossibility of continuing the performance of
the agency without grave detriment to himself.

The agent, even if he should withdraw from the agency for a valid reason, must continue to
act until the principal has had reasonable opportunity to take the necessary steps to meet the
situation.

The agency shall remain in full force and effect even after the death of the principal, if it has
been constituted in the common interest of the latter and of the agent, or in the interest of a third
person who has accepted the stipulation in his favor.

XI. Modes of Extinguishment

Expiration of the period

Death, civil interdiction, insanity or insolvency of the principal or of the agent
Withdrawal of the agent
Accomplishment of the object or the purpose of the agency
Revocation
Dissolution of the firm or corporation, which entrusted or accepted the agency

COMPROMISE

I. Definition
 A contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an
end to one already commenced.

II. Void Compromise

No compromise upon the following questions shall be valid:

(1) The civil status of persons;

(2) The validity of a marriage or a legal separation;
(3) Any ground for legal separation;
(4) Future support;
(5) The jurisdiction of courts;
(6) Future legitime

III. Effect

The effect and authority of res judicata; but there shall be no execution except in compliance
with a judicial compromise.

If one of the parties fails or refuses to abide by the compromise, the other party may either
enforce the compromise or regard it as rescinded and insist upon his original demand.

CREDIT TRANSACTIONS

I. Loan

By the contract of loan, one of the parties delivers to another, either something not
consumable so that the latter may use the same for a certain time and return it, in which case the
contract is called a commodatum; or money or other consumable thing, upon the condition that the
same amount of the same kind and quality shall be paid, in which case the contract is simply called a
loan or mutuum.

Commodatum is essentially gratuitous.

Simple loan may be gratuitous or with a stipulation to pay interest.
In commodatum the bailor retains the ownership of the thing loaned, while in simple loan,
ownership passes to the borrower.
An accepted promise to deliver something by way ofcommodatum or simple loan is binding
upon parties, but the commodatumor simple loan itself shall not be perfected until the delivery of the
object of the contract.

II. Deposit
 A contract constituted from the moment a person receives a thing belonging to another,
with the obligation of safely keeping it and of returning the same.

Voluntary deposit Necessary deposit Judicial deposit

One wherein One made in compliance When an attachment or

the delivery is made with a legal obligation, or on the seizure of property in litigation
by the will of the occasion of any calamity, or by is ordered.
depositor or by two or travellers in hotels and inns, or
more persons each of by travellers with common
whom believes carriers.
himself entitled to the
thing deposited.

III. Guaranty and Suretyship

By guaranty a person, called the guarantor, binds himself to the creditor to fulfill the obligation
of the principal debtor in case the latter should fail to do so.

If a person binds himself solidarily with the principal debtor, the provisions of Section 4,
Chapter 3, Title I of this Book shall be observed. In such case the contract is called a suretyship.
A guaranty is gratuitous, unless there is a stipulation to the contrary.
A married woman may guarantee an obligation without the husband's consent, but shall not
thereby bind the conjugal partnership, except in cases provided by law.
If a guaranty is entered into without the knowledge or consent, or against the will of the
principal debtor, the provisions of Articles 1236 and 1237 shall apply.
A guaranty may be conventional, legal or judicial, gratuitous, or by onerous title.
It may also be constituted, not only in favor of the principal debtor, but also in favor of the
other guarantor, with the latter's consent, or without his knowledge, or even over his objection.
A guaranty cannot exist without a valid obligation.
Nevertheless, a guaranty may be constituted to guarantee the performance of a voidable or
an unenforceable contract. It may also guarantee a natural obligation.
A guaranty may also be given as security for future debts, the amount of which is not yet
known; there can be no claim against the guarantor until the debt is liquidated. A conditional
obligation may also be secured.
A guarantor may bind himself for less, but not for more than the principal debtor, both as
regards the amount and the onerous nature of the conditions.
Should he have bound himself for more, his obligations shall be reduced to the limits of that
of the debtor.
 A guaranty is not presumed; it must be express and cannot extend to more than what is
stipulated therein.
If it be simple or indefinite, it shall compromise not only the principal obligation, but also all
its accessories, including the judicial costs, provided with respect to the latter, that the guarantor
shall only be liable for those costs incurred after he has been judicially required to pay.
One who is obliged to furnish a guarantor shall present a person who possesses integrity,
capacity to bind himself, and sufficient property to answer for the obligation which he guarantees.
The guarantor shall be subject to the jurisdiction of the court of the place where this obligation is to
be complied with.
If the guarantor should be convicted in first instance of a crime involving dishonesty or
should become insolvent, the creditor may demand another who has all the qualifications required in
the preceding article. The case is excepted where the creditor has required and stipulated that a
specified person should be the guarantor.

When there are two or more guarantors of the same debtor and for the same debt, the one
among them who has paid may demand of each of the others the share which is proportionally
owing from him.

If any of the guarantors should be insolvent, his share shall be borne by the others, including
the payer, in the same proportion. The provisions shall not be applicable, unless the payment has
been made by virtue of a judicial demand or unless the principal debtor is insolvent.

The co-guarantors may set up against the one who paid, the same defenses which would
have pertained to the principal debtor against the creditor, and which are not purely personal to the
debtor.

A sub-guarantor, in case of the insolvency of the guarantor for whom he bound himself, is
responsible to the co-guarantors in the same terms as the guarantor.

Extinguishment of guaranty:

1. Release in favor of one of the guarantors, without the consent of the others, benefits all to
the extent of the share of the guarantor to whom it has been granted;

2. If the creditor voluntarily accepts immovable or other properties in payment of the debt,
even if he should afterwards lose the same through eviction or conveyance of property;

3. Whenever by some act of the creditor, the guarantors even though they are solidarily
liable cannot be subrogated to the rights, mortgages and preferences of the former;

4. For the same causes as all other obligations;

5. When the principal obligation is extinguished;

6. Extension granted to the debtor by the creditor without the consent of the guarantor.
IV. Pledge

A contract wherein the debtor delivers to the creditor or to a third person a movable or
document evidencing incorporeal rights for the purpose of securing fulfillment of a principal
obligation with the understanding that when the obligation is fulfilled, the thing delivered shall be
returned with all its fruits and accessions.

V. Real Mortgage

A contract whereby the debtor secures to the creditor the fulfilment of a principal obligation,
specially subjecting to such security immovable property or real rights over immovable property in
case the principal obligation is not complied with at the time stipulated.

Act 3135, as amended by R.A. No. 4118.

VI. Antichresis

A contract whereby the creditor acquires the right to receive the fruits of an immovable of
the debtor, with the obligation to apply them to the payment of the interest, if owing, and thereafter
to the principal of his credit..

VII. Chattel Mortgage

A contract by virtue of which personal property is recorded in the Chattel Mortgage Register
as a security for the performance of an obligation.

Act 1508.

VIII. Quasi-contracts

Negotiorum Gestio Solutio Indebiti -

Arises whenever a person Arises whenever a person unduly

voluntarily takes charge of the agency or delivers a thing through mistake to
management of the business or property another who has no right to demand it.
of another without any power or
authority from the latter.

IX. Concurrence and Preference of Credits

Concurrence of Credits Preference of Credit

Possession by two or more creditors of equal Right held by a creditor to be preferred in

rights or privileges over the same property or the payment of his claim above others out of
 all of the property of the debtor the debtors assets

With reference to specific movable property of the debtor, the following claims or liens shall
be preferred:

(1) Duties, taxes and fees due thereon to the State or any subdivision thereof;

(2) Claims arising from misappropriation, breach of trust, or malfeasance by public officials
committed in the performance of their duties, on the movables, money or securities obtained by
them;

(3) Claims for the unpaid price of movables sold, on said movables, so long as they are in the
possession of the debtor, up to the value of the same; and if the movable has been resold by the
debtor and the price is still unpaid, the lien may be enforced on the price; this right is not lost by the
immobilization of the thing by destination, provided it has not lost its form, substance and identity;
neither is the right lost by the sale of the thing together with other property for a lump sum, when
the price thereof can be determined proportionally;

(4) Credits guaranteed with a pledge so long as the things pledged are in the hands of the
creditor, or those guaranteed by a chattel mortgage, upon the things pledged or mortgaged, up to the
value thereof;

(5) Credits for the making, repair, safekeeping or preservation of personal property, on the
movable thus made, repaired, kept or possessed;

(6) Claims for laborers' wages, on the goods manufactured or the work done;

(7) For expenses of salvage, upon the goods salvaged;

(8) Credits between the landlord and the tenant, arising from the contract of tenancy on
shares, on the share of each in the fruits or harvest;

(9) Credits for transportation, upon the goods carried, for the price of the contract and
incidental expenses, until their delivery and for thirty days thereafter;

(10) Credits for lodging and supplies usually furnished to travellers by hotel keepers, on the
movables belonging to the guest as long as such movables are in the hotel, but not for money loaned
to the guests;

(11) Credits for seeds and expenses for cultivation and harvest advanced to the debtor, upon
the fruits harvested;

(12) Credits for rent for one year, upon the personal property of the lessee existing on the
immovable leased and on the fruits of the same, but not on money or instruments of credit;
 (13) Claims in favor of the depositor if the depositary has wrongfully sold the thing
deposited, upon the price of the sale.

In the foregoing cases, if the movables to which the lien or preference attaches have been
wrongfully taken, the creditor may demand them from any possessor, within thirty days from the
unlawful seizure.

With reference to specific immovable property and real rights of the debtor, the following
claims, mortgages and liens shall be preferred, and shall constitute an encumbrance on the
immovable or real right:

(1) Taxes due upon the land or building;

(2) For the unpaid price of real property sold, upon the immovable sold;

(3) Claims of laborers, masons, mechanics and other workmen, as well as of architects,
engineers and contractors, engaged in the construction, reconstruction or repair of buildings, canals
or other works, upon said buildings, canals or other works;

(4) Claims of furnishers of materials used in the construction, reconstruction, or repair of

buildings, canals or other works, upon said buildings, canals or other works;

(5) Mortgage credits recorded in the Registry of Property, upon the real estate mortgaged;

(6) Expenses for the preservation or improvement of real property when the law authorizes
reimbursement, upon the immovable preserved or improved;

(7) Credits annotated in the Registry of Property, in virtue of a judicial order, by attachments
or executions, upon the property affected, and only as to later credits;

(8) Claims of co-heirs for warranty in the partition of an immovable among them, upon the
real property thus divided;

(9) Claims of donors or real property for pecuniary charges or other conditions imposed
upon the donee, upon the immovable donated;

(10) Credits of insurers, upon the property insured, for the insurance premium for two years.
The claims or credits enumerated in the two preceding articles shall be considered as
mortgages or pledges of real or personal property, or liens within the purview of legal provisions
governing insolvency. Taxes mentioned in No. 1, article 2241, and No. 1, article 2242, shall first be
satisfied.

With reference to other property, real and personal, of the debtor, the following claims or
credits shall be preferred in the order named:

(1) Proper funeral expenses for the debtor, or children under his or her parental authority
who have no property of their own, when approved by the court;
 (2) Credits for services rendered the insolvent by employees, laborers, or household helpers
for one year preceding the commencement of the proceedings in insolvency;

(3) Expenses during the last illness of the debtor or of his or her spouse and children under
his or her parental authority, if they have no property of their own;

(4) Compensation due the laborers or their dependents under laws providing for indemnity
for damages in cases of labor accident, or illness resulting from the nature of the employment;

(5) Credits and advancements made to the debtor for support of himself or herself, and
family, during the last year preceding the insolvency;

(6) Support during the insolvency proceedings, and for three months thereafter;

(7) Fines and civil indemnification arising from a criminal offense;

(8) Legal expenses, and expenses incurred in the administration of the insolvent's estate for
the common interest of the creditors, when properly authorized and approved by the court;

(9) Taxes and assessments due the national government, other than those mentioned in
articles 2241, No. 1, and 2242, No. 1;

(10) Taxes and assessments due any province, other than those referred to in articles 2241,
No. 1, and 2242, No. 1;

(11) Taxes and assessments due any city or municipality, other than those indicated in
articles 2241, No. 1, and 2242, No. 1;

(12) Damages for death or personal injuries caused by a quasi-delict;

(13) Gifts due to public and private institutions of charity or beneficence;

(14) Credits which, without special privilege, appear in (a) a public instrument; or (b) in a
final judgment, if they have been the subject of litigation. These credits shall have preference among
themselves in the order of priority of the dates of the instruments and of the judgments,
respectively.

Credits of any other kind or class, or by any other right or title not comprised in the four
preceding articles, shall enjoy no preference.

Those 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.

If there are two or more credits with respect to the same specific movable property, they
shall be satisfied pro rata, after the payment of duties, taxes and fees due the State or any subdivision
thereof.
 Those credits which enjoy preference in relation to specific real property or real rights,
exclude all others to the extent of the value of the immovable or real right to which the preference
refers.

If there are two or more credits with respect to the same specific real property or real rights,
they shall be satisfied pro rata, after the payment of the taxes and assessments upon the immovable
property or real right.

The excess, if any, after the payment of the credits which enjoy preference with respect to
specific property, real or personal, shall be added to the free property which the debtor may have,
for the payment of the other credits.

Those credits which do not enjoy any preference with respect to specific property, and those
which enjoy preference, as to the amount not paid, shall be satisfied according to the following rules:

(1) In the order established in Article 2244;

(2) Common credits referred to in Article 2245 shall be paid pro rata regardless of dates.

LEASE

I. Lease of Things

One of the parties binds himself to give to another the enjoyment or use of a thing for a
price certain and for a period which may be definite or indefinite. However, no lease for more than
ninety-nine years shall be valid.

II. Lease of Work or Services

One of the parties binds himself to execute a piece of work or to render to the other some
service for a price certain, but the relations of principal and agent does not exist between them.

III. Lease of Rural and Urban Lands

Qualified persons

Those not covered within the scope as provided for under Articles 1490 and 1491 of the
Civil Code.

Registration

Every lease of real estate may be recorded in the Registry of Property. Unless a lease is
recorded, it shall not be binding upon third persons.

Prohibitions
 The lessee cannot assign the lease without the consent of the lessor, unless there is a
stipulation to the contrary.

IV. Rights and Obligations of Lessor and Lessee

When in the contract of lease of things there is no express prohibition, the lessee may sublet
the thing leased, in whole or in part, without prejudice to his responsibility for the performance of
the contract toward the lessor.
Without prejudice to his obligation toward the sublessor, the sublessee is bound to the lessor
for all acts which refer to the use and preservation of the thing leased in the manner stipulated
between the lessor and the lessee.
The sublessee is subsidiarily liable to the lessor for any rent due from the lessee. However,
the sublessee shall not be responsible beyond the amount of rent due from him, in accordance with
the terms of the sublease, at the time of the extra-judicial demand by the lessor.

Payments of rent in advance by the sublessee shall be deemed not to have been made, so far
as the lessor's claim is concerned, unless said payments were effected in virtue of the custom of the
place.
The lessor is obliged:
(1) To deliver the thing which is the object of the contract in such a condition as to render it
fit for the use intended;
(2) To make on the same during the lease all the necessary repairs in order to keep it suitable
for the use to which it has been devoted, unless there is a stipulation to the contrary;
(3) To maintain the lessee in the peaceful and adequate enjoyment of the lease for the entire
duration of the contract.
If the thing leased is totally destroyed by a fortuitous event, the lease is extinguished. If the
destruction is partial, the lessee may choose between a proportional reduction of the rent and a
rescission of the lease.
The lessor of a business or industrial establishment may continue engaging in the same
business or industry to which the lessee devotes the thing leased, unless there is a stipulation to the
contrary.
The lessee is obliged:
(1) To pay the price of the lease according to the terms stipulated;
(2) To use the thing leased as a diligent father of a family, devoting it to the use stipulated;
and in the absence of stipulation, to that which may be inferred from the nature of the thing leased,
according to the custom of the place;
(3) To pay expenses for the deed of lease.
The lessee may suspend the payment of the rent in case the lessor fails to make the necessary
repairs or to maintain the lessee in peaceful and adequate enjoyment of the property leased.
If the lessor or the lessee should not comply with the obligations set forth in articles 1654
and 1657, the aggrieved party may ask for the rescission of the contract and indemnification for
damages, or only the latter, allowing the contract to remain in force.
 If a dwelling place or any other building intended for human habitation is in such a
condition that its use brings imminent and serious danger to life or health, the lessee may terminate
the lease at once by notifying the lessor, even if at the time the contract was perfected the former
knew of the dangerous condition or waived the right to rescind the lease on account of this
condition.
If during the lease it should become necessary to make some urgent repairs upon the thing
leased, which cannot be deferred until the termination of the lease, the lessee is obliged to tolerate
the work, although it may be very annoying to him, and although during the same, he may be
deprived of a part of the premises.
If the repairs last more than forty days the rent shall be reduced in proportion to the time -
including the first forty days - and the part of the property of which the lessee has been deprived.
When the work is of such a nature that the portion which the lessee and his family need for
their dwelling becomes uninhabitable, he may rescind the contract if the main purpose of the lease is
to provide a dwelling place for the lessee.
The lessee is obliged to bring to the knowledge of the proprietor, within the shortest
possible time, every usurpation or untoward act which any third person may have committed or may
be openly preparing to carry out upon the thing leased.
He is also obliged to advise the owner, with the same urgency, of the need of all repairs
included in No. 2 of article 1654.
In both cases the lessee shall be liable for the damages which, through his negligence, may be
suffered by the proprietor.

If the lessor fails to make urgent repairs, the lessee, in order to avoid an imminent danger,
may order the repairs at the lessor's cost.
The lessee shall return the thing leased, upon the termination of the lease, as he received it,
save what has been lost or impaired by the lapse of time, or by ordinary wear and tear, or from an
inevitable cause.
In the absence of a statement concerning the condition of the thing at the time the lease was
constituted, the law presumes that the lessee received it in good condition, unless there is proof to
the contrary.
The lessee is responsible for the deterioration or loss of the thing leased, unless he proves
that it took place without his fault. This burden of proof on the lessee does not apply when the
destruction is due to earthquake, flood, storm or other natural calamity.
The lessee is liable for any deterioration caused by members of his household and by guests
and visitors.
The bailor shall refund the extraordinary expenses during the contract for the preservation
of the thing loaned, provided the bailee brings the same to the knowledge of the bailor before
incurring them, except when they are so urgent that the reply to the notification cannot be awaited
without danger.

If the extraordinary expenses arise on the occasion of the actual use of the thing by the
bailee, even though he acted without fault, they shall be borne equally by both the bailor and the
bailee, unless there is a stipulation to the contrary.
V. Special Rules for Lease of Rural/Urban Lands
The lessee shall have no right to a reduction of the rent on account of the sterility of the land
leased, or by reason of the loss of fruits due to ordinary fortuitous events; but he shall have such
right in case of the loss of more than one-half of the fruits through extraordinary and unforeseen
fortuitous events, save always when there is a specific stipulation to the contrary.
Extraordinary fortuitous events are understood to be: fire, war, pestilence, unusual flood,
locusts, earthquake, or others which are uncommon, and which the contracting parties could not
have reasonably foreseen.
Neither does the lessee have any right to a reduction of the rent if the fruits are lost after
they have been separated from their stalk, root or trunk.
The lease of a piece of rural land, when its duration has not been fixed, is understood to
have been for all the time necessary for the gathering of the fruits which the whole estate leased may
yield in one year, or which it may yield once, although two or more years have to elapse for the
purpose.
The outgoing lessee shall allow the incoming lessee or the lessor the use of the premises and
other means necessary for the preparatory labor for the following year; and, reciprocally, the
incoming lessee or the lessor is under obligation to permit the outgoing lessee to do whatever may
be necessary for the gathering or harvesting and utilization of the fruits, all in accordance with the
custom of the place.
Land tenancy on shares shall be governed by special laws, the stipulations of the parties, the
provisions on partnership and by the customs of the place.
The tenant on shares cannot be ejected except in cases specified by law.

LAND TITLES AND DEEDS

I. Torrens System

A system for registration of land under which, upon the landowners application, the court
may, after appropriate proceedings, direct the issuance of a certificate of title.

The Torrens system does not create or vest title. It only confirms and records title already
existing and vested. It does not protect a usurper from the true owner. It cannot be a shield for the
commission of fraud. It does not permit one to enrich himself at the expense of another

In order to establish a system of registration by which title recorded became absolute,

indefeasible and imprescriptible, Act No. 496, otherwise known as the Land Registration Act, was
passed and took effect on February 1, 1903. Rights acquired under this system are guaranteed by the
government which provides an assurance fund to answer for damages to be suffered by persons thru
the operation of this system.

This method is also known as the Torrens system of land registration. There are two (2) laws
ancillary to Act No. 496. These are the Cadastral Law of February 11, 1913 and the Public Land Law
of December 1, 1936 which have been subsequently amended by later legislations.

Presidential Decree No. 1529 was issued to cope with the growing need of updating the
Land Registration Act, to codify the various other laws relative to registration of real property and
real rights, and to further strengthen the Torrens system. Land Registration Act No. 496 of February
1, 1903 has not been repealed or abrogated but rather, all laws, decrees, orders, rules and
regulations or parts thereof, in conflict with any provisions of this decree are hereby repealed or
modified accordingly.

II. Regalian Doctrine

All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all
forces of potential energy, fisheries, forests, or timber, wildlife, flora and fauna, and natural
resources belong to the state. With the exception of agricultural lands, all other natural resources
shall not be alienated.

Under the Regalian doctrine, all lands of the public domain belong to the State, which is the
source of any asserted right to ownership of land. All lands not otherwise appearing to be clearly
within private ownership are presumed to belong to the State.

III. Citizenship Requirement

Alienable lands of the public domain:

Only Filipino citizens may acquire not more than 12 hectares by purchase, homestead or
grant, or lease not more than 500 hectares.

Private corporations may lease not more than 1,000 hectares for 25 years renewable for
another 25 years.

IV. Original Registration

Under PD 1529

a. Those who, by themselves or through their predecessors-in-interest, have been in open,

continuous, exclusive and notorious possession and occupation of alienable and disposable lands of
the public domain under a bona fide claim of ownership since June 12, 1945, or earlier;

b. Those who have acquired ownership of private lands by prescription under the provisions
of existing laws;
 c. Those who have acquired ownership of private lands or abandoned river beds by right of
accession or accretion; and

d. Those who have acquired ownership of land in any other manner provided for by law.

Where the land is owned in common, all the co-owners shall file the application jointly.

Where the land has been sold under pacto de retro, the vendor a retro may file an application for
the original registration of the land, provided, however, that should the period for redemption expire
during the pendency of the registration proceedings and ownership to the property consolidated in
the vendee a retro, the latter shall be substituted for the applicant and may continue the proceedings.

A trustee on behalf of the principal may apply for original registration of any land held in
trust by him, unless prohibited by the instrument creating the trust.

Under CA 141

(a) Those who prior to the transfer of sovereignty from Spain to the prior United States have
applied for the purchase, composition or other form of grant of lands of the public domain under
the laws and royal decrees then in force and have instituted and prosecuted the proceedings in
connection therewith, but have with or without default upon their part, or for any other cause, not
received title therefor, if such applicants or grantees and their heirs have occupied and cultivated said
lands continuously since the filing of their applications.

(b) Those who by themselves or through their predecessors in interest have been in open,
continuous, exclusive, and notorious possession and occupation of agricultural lands of the public
domain, under a bona fide claim of acquisition or ownership, for at least thirty years immediately
preceding the filing of the application for confirmation of title except when prevented by war or
force majeure. These shall be conclusively presumed to have performed all the conditions essential
to a Government grant and shall be entitled to a certificate of title under the provisions of this
chapter.

(c) Members of the national cultural minorities who by themselves or through their
predecessors-in-interest have been in open, continuous, exclusive and notorious possession and
occupation of lands of the public domain suitable to agriculture, whether disposable or not, under a
bona fide claim of ownership for at least 30 years shall be entitled to the rights granted in sub-
section (b) hereof.

Under RA 8371

Individual and indigenous corporate claimants of ancestral lands which are not within
ancestral domains, may have their claims officially established by filing applications for the
identification and delineation of their claims with the Ancestral Domains Office. An individual or
recognized head of a family or clan may file such application in his behalf or in behalf of his family
or clan, respectively.
V. Subsequent Registration

Takes place when any deed affecting the land is made of public record after the date of its
original registration.; where incidental matters after original registration may be brought before the
land registration court by way of motion or petition filed by the registered owner or a party in
interest.

VI. Non-registrable Properties

The following lands are not registrable by any private person in his name:

1. Those devoted to public land use such as public roads, plazas, canals, streets, rivers,
banks and shores;

2. Those devoted to public service such as towns, walls and fortresses;

3. Public forests;

4. Mineral lands; and

5. Those reserved by the government for public or quasi-public purposes.

The Constitution provides that all natural resources, except agricultural, commercial and
industrial, residential and resettlement lands are inalienable.

Public forests are non-alienable public lands. Possession of public forests on the part of the
claimant, however long, cannot convert the same into private property

VII. Dealings with Unregistered Lands

The system of registration under the Spanish Mortgage Law is hereby discontinued and all
lands recorded under said system which are not yet covered by Torrens title shall be considered as
unregistered lands.
Hereafter, all instruments affecting lands originally registered under the Spanish Mortgage
Law may be recorded under Section 113 of this Decree, until the land shall have been brought under
the operation of the Torrens system.
The books of registration for unregistered lands provided under Section 194 of the Revised
Administrative Code, as amended by Act No. 3344, shall continue to remain in force; provided, that
all instruments dealing with unregistered lands shall henceforth be registered under Section 113 of
this Decree.
No deed, conveyance, mortgage, lease, or other voluntary instrument affecting land not
registered under the Torrens system shall be valid, except as between the parties thereto, unless such
instrument shall have been recorded in the manner herein prescribed in the office of the Register of
Deeds for the province or city where the land lies.
(a) The Register of Deeds for each province or city shall keep a Primary Entry Book and a
Registration Book. The Primary Entry Book shall contain, among other particulars, the entry
number, the names of the parties, the nature of the document, the date, hour and minute it was
presented and received. The recording of the deed and other instruments relating to unregistered
lands shall be effected by any of annotation on the space provided therefor in the Registration Book,
after the same shall have been entered in the Primary Entry Book.
(b) If, on the face of the instrument, it appears that it is sufficient in law, the Register of
Deeds shall forthwith record the instrument in the manner provided herein. In case the Register of
Deeds refuses its administration to record, said official shall advise the party in interest in writing of
the ground or grounds for his refusal, and the latter may appeal the matter to the Commissioner of
Land Registration in accordance with the provisions of Section 117 of this Decree. It shall be
understood that any recording made under this section shall be without prejudice to a third party
with a better right.
(c) After recording on the Record Book, the Register of Deeds shall endorse among other
things, upon the original of the recorded instruments, the file number and the date as well as the
hour and minute when the document was received for recording as shown in the Primary Entry
Book, returning to the registrant or person in interest the duplicate of the instrument, with
appropriate annotation, certifying that he has recorded the instrument after reserving one copy
thereof to be furnished the provincial or city assessor as required by existing law.
(d) Tax sale, attachment and levy, notice of lis pendens, adverse claim and other instruments in
the nature of involuntary dealings with respect to unregistered lands, if made in the form sufficient
in law, shall likewise be admissible to record under this section.
(e) For the services to be rendered by the Register of Deeds under this section, he shall
collect the same amount of fees prescribed for similar services for the registration of deeds or
instruments concerning registered lands.

TORTS AND DAMAGES

Book I--Torts

I. Principles

Every person must, in the exercise of his rights and in the performance of his duties, act
with justice, give everyone his due, and observe honesty and good faith.
 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.

If something is received when there is no right to demand it, and it was unduly delivered
through mistake, the obligation to return it arises.

Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-contract
to the end that no one shall be unjustly enriched or benefited at the expense of another.

Even when an act or event causing damage to another's property was not due to the fault
or negligence of the defendant, the latter shall be liable for indemnity if through the act or event he
was benefited.

Every person who, contrary to law, wilfully or negligently causes damage to another, shall
indemnify the latter for the same.

Any person who wilfully causes loss or injury to another in manner that is contrary to
morals, good customs or public policy shall compensate the latter for the damage.
II. Classification of Torts

A. According to manner of commission:

Intentional Negligent Strict Liability

Include conduct where the Involve voluntary acts or When the person is made
actor desires to cause the omissions which result in liable independent of fault or
consequences of his act or injury to others without negligence upon submission
believes that the intending to cause the same of proof of certain facts
consequences are or because the actor fails to specified by law.
substantially certain to result exercise due care in
from it. performing such acts or
omissions.

B. According to scope: general or specific

General Specific

The catchall provisions on torts It includes trespass, assault and b

provided for in the Civil Code. The attery,
effect is that there is a general duty owed to every per negligence, products liability, and
son not to intentional infliction of emotional
cause harm either willfully or negligently. Articles 19, 20 distress. As defined, torts fall into
, and 21 are provisions on human relations that were int three different
ended to expand the concept of torts in this categories: intentional, negligent a
 jurisdiction by granting adequate legal nd liability, product liability tort.
remedy for the untold number of moral wrongs which i
s impossible for human
foresight to specifically provide for in the
statutes.

III. The Tortfeasor

A. The Direct Tortfeasor

1. Natural Persons

Refer to human beings.

2. Juridical Persons
(i) The State and its political subdivisions;
(ii) Other corporations, institutions and entities for public interest or purpose, created by
law; their personality begins as soon as they have been constituted according to law;
(iii) Corporations, partnerships and associations for private interest or purpose to which the
law grants a juridical personality, separate and distinct from that of each shareholder, partner or
member.

Juridical persons may acquire and possess property of all kinds, as well as incur obligations
and bring civil or criminal actions, in conformity with the laws and regulations of their
organization.

B. Persons Made Responsible for Others

In General

a. Quasi-delicts and the Family Code

1. Father, or in case of death or incapacity, mother:

a. damage caused by minor children

b. living in their company

2. Guardians:

a. for minors or incapacitated persons

b. under their authority
c. living in their company
 3. Owners and managers of establishments:

a. for their employees

b. in the service of the branches in which they are employed, or;
c. on the occasion of their functions

4. Employers:

a. damages caused by employees and household helpers

b. acting within the scope of their assigned tasks
c. even if the employer is not engaged in any business or industry

5. State acting through a special agent and not when the damage has been
caused by the official to whom the task done properly pertains.

6. Teachers or heads of establishments:

a. of arts and trades

b. for damages caused by their pupils and students or apprentices
c. so long as they remain in their custody.

The responsibility shall cease when the persons mentioned prove that they observed all the
diligence of a good father of a family to prevent damage.

The school, its administrators and teachers, or the individual, entity or institution engaged in
child are shall have special parental authority and responsibility over the minor child while under
their supervision, instruction or custody.

Authority and responsibility shall apply to all authorized activities whether inside or outside
the premises of the school, entity or institution.

Those given the authority and responsibility mentioned shall be principally and solidarily
liable for damages caused by the acts or omissions of the unemancipated minor. The parents, judicial
guardians or the persons exercising substitute parental authority over said minor shall be subsidiarily
liable.

The respective liabilities of those referred to in the preceding paragraph shall not apply if it is
proved that they exercised the proper diligence required under the particular circumstances.

Parents and other persons exercising parental authority shall be civilly liable for the injuries
and damages caused by the acts or omissions of their unemancipated children living in their
company and under their parental authority subject to the appropriate defenses provided by law.

All the persons who command, instigate, promote, encourage, advice, countenance,
cooperate in, aid, or abet the commission of a tort, or who approve of it after it is done, if done for
their benefit; they are each liable as a principal, to the same extent and in the same manner as if they
have performed the wrongful act themselves.
IV. Act of Omission and its Modalities

Any bodily movement tending to produce some effect in the external world,
it being unnecessary that the same be actually produced, as the possibility of its
production is sufficient.

It is an act or omission producing an injury to another, without any previous existing lawful
relation of which the said act or omission may be said to be a natural outgrowth or incident.

V. Proximate Cause

That cause which in natural and continuous sequence, unbroken by any efficient intervening
cause, produces the injury, without which the result would not have occurred.

VI. Legal Injury

The violation of a legal right.

An act causing damage, which act must be not only hurtful, but wrongful. There must be
damnum et injuria.

VII. Intentional Torts

A tort committed by someone acting with general or specific intent.

Include conduct where the actor desires to cause the consequences of his act or believes that
the consequences are substantially certain to result from it.

They are found in Chapter 2 of the Preliminary Title of the NCC entitled Human
Relations. Although this chapter covers negligent acts, the torts mentioned herein are mostly
intentional in nature or torts involving malice or bad faith.

VIII. Negligence

The omission of that degree of diligence which is required by the nature of the obli
gation and corresponding to the circumstances of the persons, of the time and place.
 The omission to do something which a reasonable man, guided by those considerations
which ordinarily regulate the conduct of human affairs, would do, or the doing of something which
a prudent and reasonable man would not do.

Involve voluntary acts or omissions which result in injury to others without intending to
cause the same or because the actor fails to exercise due care in performing such acts or omissions.

IX. Special Liability in Particular Activities

Products Liability

1. Manufacturers or Processors

Defects resulting from design, manufacture, construction, assembly and erection, formulas
and handling and making up, presentation or packing of their products, as well as for the
insufficient or inadequate information on the use and hazards thereof

The plaintiff should allege and prove that:

1) The product was defective;

2) The product was manufactured by the defendant;
3) The defective product was the cause of his injury.

Consumer Act

Any Filipino or foreign manufacturer, producer, and any importer, shall be liable for redress,
independently of fault, for damages caused to consumers by defects resulting from design,
manufacture, construction, assembly and erection, formulas and handling and making up,
presentation or packing of their products, as well as for the insufficient or inadequate information
on the use and hazards thereof.

A product is defective when it does not offer the safety rightfully expected of it, taking
relevant circumstances into consideration, including but not limited to:
a) presentation of product;
b) use and hazards reasonably expected of it;
c) the time it was put into circulation.

A product is not considered defective because another better quality product has been
placed in the market.

The manufacturer, builder, producer or importer shall not be held liable when it evidences:

a) that it did not place the product on the market;

b) that although it did place the product on the market such product has no defect;
c) that the consumer or a third party is solely at fault.

The tradesman/seller is likewise liable when;

 a) it is not possible to identify the manufacturer, builder, producer or importer.

b) the product is supplied, without clear identification of the manufacturer, producer,

builder or importer;

c) he does not adequately preserve perishable goods. The party making payment to the
damaged party may exercise the right to recover a part of the whole of the payment made against the
other responsible parties, in accordance with their part or responsibility in the cause of the damage
effected.

The service supplier is liable for redress, independently of fault, for damages caused to
consumers by defects relating to the rendering of the services, as well as for insufficient or
inadequate information on the fruition and hazards thereof.

The service is defective when it does not provide the safety the consumer may rightfully
expect of it, taking the relevant circumstances into consideration, including but not limited to:

a) the manner in which it is provided;

b) the result of hazards which may reasonably be expected of it;
c) the time when it was provided.

A service is not considered defective because of the use or introduction of new techniques.

The supplier of the services shall not be held liable when it is proven:

a) that there is no defect in the service rendered;

b) that the consumer or third party is solely at fault.

The suppliers of durable or nondurable consumer products are jointly liable for
imperfections in quality that render the products unfit or inadequate for consumption for which
they are designed or decrease their value, and for those resulting from inconsistency with the
information provided on the container, packaging, labels or publicity messages/advertisement, with
due regard to the variations resulting from their nature, the consumer being able to demand
replacement to the imperfect parts.

If the imperfection is not corrected within thirty (30) days, the consumer may alternatively
demand at his option:

a) the replacement of the product by another of the same kind, in a perfect state of use;

b) the immediate reimbursement of the amount paid, with monetary updating, without
prejudice to any losses and damages;

c) a proportionate price reduction.

The parties may agree to reduce or increase the term specified in the immediately preceding
paragraph; but such shall not be less than seven (7) nor more than one hundred and eighty (180)
days.
 The consumer may make immediate use of the foregoing alternatives when by virtue of the
extent of the imperfection, the replacement of the imperfect parts may jeopardize the product
quality or characteristics, thus decreasing its value.

If the consumer opts for the alternative under sub-paragraph (a) and replacement of the
product is not possible, it may be replaced by another of a different kind, mark or model. Any
difference in price that may result thereof shall be supplemented or reimbursed by the party which
caused the damage, without prejudice to the provisions of the second, third and fourth paragraphs.

Suppliers are jointly liable for imperfections in the quantity of the product when, in due
regard for variations inherent thereto, their net content is less than that indicated on the container,
packaging, labeling or advertisement, the consumer having powers to demand, alternatively, at his
own option:

a) the proportionate price

b) the supplementing of weight or measure differential;
c) the replacement of the product by another of the same kind, mark or model, without said
imperfections;
d) the immediate reimbursement of the amount paid, with monetary updating without
prejudice to losses and damages if any.

The provisions of the fifth paragraph of Article 99 shall apply to this Article. The immediate
supplier shall be liable if the instrument used for weighing or measuring is not gauged in accordance
with official standards.

The service supplier is liable for any quality imperfections that render the services improper
for consumption or decrease their value, and for those resulting from inconsistency with the
information contained in the offer or advertisement, the consumer being entitled to demand
alternatively at his option:

a) the performance of the services, without any additional cost and when applicable;
b) the immediate reimbursement of the amount paid, with monetary updating without
prejudice to losses and damages, if any;
c) a proportionate price reduction.

Reperformance of services may be entrusted to duly qualified third parties, at the supplier's
risk and cost.

Improper services are those which prove to be inadequate for purposes reasonably expected
of them and those that fail to meet the provisions of this Act regulating service rendering.

When services are provided for the repair of any product, the supplier shall be considered
implicitly bound to use adequate, new, original replacement parts, or those that maintain the
manufacturer's technical specifications unless, otherwise authorized, as regards to the latter by the
consumer.
 The supplier's ignorance of the quality imperfections due to inadequacy of the products and
services does not exempt him from any liability.

The legal guarantee of product or service adequacy does not require an express instrument
or contractual exoneration of the supplier being forbidden.

The stipulation in a contract of a clause preventing, exonerating or reducing the obligation to

indemnify for damages effected, as provided for in this and in the preceding Articles, is hereby
prohibited, if there is more than one person responsible for the cause of the damage, they shall be
jointly liable for the redress established in the pertinent provisions of this Act. However, if the
damage is caused by a component or part incorporated in the product or service, its manufacturer,
builder or importer and the person who incorporated the component or part are jointly liable.

Any person who shall violate any provision of this Chapter or its implementing rules and
regulations with respect to any consumer product which is not food, cosmetic, or hazardous
substance shall upon conviction, be subject to a fine of not less than Five thousand pesos
(P5,000.00) and by imprisonment of not more than one (1) year or both upon the discretion of the
court.

In case of juridical persons, the penalty shall be imposed upon its president, manager or
head. If the offender is an alien, he shall, after payment of fine and service of sentence, be deported
without further deportation proceedings.

X. Strict Liability

When the person is made liable independent of fault or negligence upon submission of
proof of certain facts specified by law.

Strict liability tort can be committed even if reasonable care was exercised and regardless
of the state of mind of the actor at that time.
 Book II--Damages

I. General Considerations
Damages may be:

(1) Actual or compensatory;

(2) Moral;
(3) Nominal;
(4) Temperate or moderate;
(5) Liquidated; or
(6) Exemplary or corrective.

Damages may be recovered:

(1) For loss or impairment of earning capacity in cases of temporary or permanent personal
injury;

(2) For injury to the plaintiff's business standing or commercial credit.

Willful injury to property may be a legal ground for awarding moral damages if the court
should find that, under the circumstances, such damages are justly due. The same rule applies to
breaches of contract where the defendant acted fraudulently or in bad faith.

Nominal damages are adjudicated in order that a right of the plaintiff, which has been
violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him.

Temperate or moderate damages, which are more than nominal but less than compensatory
damages, may be recovered when the court finds that some pecuniary loss has been suffered but its
amount cannot, from the nature of the case, be provided with certainty.

Liquidated damages are those agreed upon by the parties to a contract, to be paid in case of
breach thereof.

Exemplary or corrective damages are imposed, by way of example or correction for the
public good, in addition to the moral, temperate, liquidated or compensatory damages.

No proof of pecuniary loss is necessary in order that moral, nominal, temperate, liquidated
or exemplary damages, may be adjudicated. The assessment of such damages, except liquidated ones,
is left to the discretion of the court, according to the circumstances of each case.
II. Actual and Compensatory Damages

Comprehends not only the value of the loss suffered but also that of the profits which the
obligee failed to obtain.

Actual or compensatory damages cannot be presumed but must be duly proved.

Actual damages must be proved and a court cannot rely on speculation, conjecture or
guesswork as to the fact and amount of damages, but must depend on actual proof that damages
had been suffered and on evidence of the actual amount.

Remote and speculative damages are not recoverable.

III. Moral Damages

Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable
of pecuniary computation, moral damages may be recovered if they are the proximate result of the
defendant's wrongful act for omission.

In the adjudication of moral damages, the sentimental value of property, real or personal,
may be considered.

When recoverable:

In the following and analogous cases:

(1) A criminal offense resulting in physical injuries;

(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in Article 309;
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.

The parents of the female seduced, abducted, raped, or abused, referred to in No. 3 of this
article, may also recover moral damages.

The spouse, descendants, ascendants, and brothers and sisters may bring the action
mentioned in No. 9 of this article, in the order named.

Willful injury to property may be a legal ground for awarding moral damages if the court
should find that, under the circumstances, such damages are justly due. The same rule applies to
breaches of contract where the defendant acted fraudulently or in bad faith.
 In seduction, abduction, rape and other lascivious acts

Victim and parents are included.

In acts referred to in Arts. 21, 26, 27, 28, 29, 32, 34 & 35, NCC

In cases of malicious prosecution

IV. Nominal Damages

Small sums fixed by the court without regard to the extent of the harm done to the injured
party.

Law presumes damage although actual or compensatory damages are not proven.

They are damages in name only and are allowed simply in recognition of a technical injury
based on a violation of a legal right.

Nominal damages cannot co-exist with actual or compensatory damages.

Nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or
invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying
the plaintiff for any loss suffered by him.

V. Temperate or Moderate Damages

These are damages, which are more than nominal but less than compensatory, and may be
recovered when the court finds that some pecuniary loss has been suffered but its amount cannot be
proved with certainty.

When awarded

In cases where the resulting injury might be continuing and possible future complications
directly arising from the injury, while certain to occur are difficult to predict, temperate damages can
and should be awarded on top of actual or compensatory damages; in such cases there is no
incompatibility between actual and temperate damages.

VI. Liquidated Damages

Those agreed upon by the parties to a contract, to be paid in case of breach thereof.

Interest may, in the discretion of the court, be allowed upon damages awarded for breach of
contract.
VII. Exemplary or Corrective Damages

Imposed, by way of example or correction for the public good, in addition to the moral,
temperate, liquidated or compensatory damages.

When recovered:

In criminal offenses

When the crime was committed with one or more aggravating circumstances. Such damages
are separate and distinct from fines and shall be paid to the offended party.

In quasi-delicts

If the defendant acted with gross negligence.

In contracts and quasi-contracts

If the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.

VIII. Damages in Case of Death

In crimes and quasi-delicts causing death

In death caused by breach of conduct by a common crime

The amount of damages for death caused by a crime or quasi-delict shall be at least three
thousand pesos, even though there may have been mitigating circumstances.

In addition:

(1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the
indemnity shall be paid to the heirs of the latter; such indemnity shall in every case be assessed and
awarded by the court, unless the deceased on account of permanent physical disability not caused by
the defendant, had no earning capacity at the time of his death;

(2) If the deceased was obliged to give support according to the provisions of article 291, the
recipient who is not an heir called to the decedent's inheritance by the law of testate or intestate
succession, may demand support from the person causing the death, for a period not exceeding five
years, the exact duration to be fixed by the court;

(3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased may
demand moral damages for mental anguish by reason of the death of the deceased.
IX. Graduation of Damages

The party suffering loss or injury must exercise the diligence of a good father of a family to
minimize the damages resulting from the act or omission in question.

Rules:

In crimes
The damages to be adjudicated may be respectively increased or lessened according to the
aggravating or mitigating circumstances.

In quasi-delict

The contributory negligence of the plaintiff shall reduce the damages that he may recover.
In contracts, quasi-contracts and quasi-delicts;

The court may equitably mitigate the damages, as in the following instances:

(1) Plaintiff himself has contravened the terms of the contract;

(2) Plaintiff has derived some benefit as a result of the contract;
(3) In cases where exemplary damages are to be awarded, that the defendant acted upon the
advice of counsel;
(4) The loss would have resulted in any event;
(5) Since the filing of the action, the defendant has done his best to lessen the plaintiff's loss
or injury.

Liquidated damages

Shall be equitably reduced if they are iniquitous or unconscionable.

Compromise

The courts may mitigate the damages to be paid by the losing party who has shown a
sincere desire for a compromise.

X. Miscellaneous Rules
 Damages that cannot co-exists

Nominal with other damages

The adjudication of nominal damages shall preclude further contest upon the right involved
and all accessory questions, as between the parties to the suit, or their respective heirs and assigns.

Actual and Liquidated

Liquidated damages are those agreed upon by the parties to a contract, to be paid in case of
breach thereof.

Damages that must co-exist

1. Exemplary with moral, temperate, liquidated or compensatory

Damages that must stand alone

Nominal Damages

Include: Pertinent Supreme Court decisions promulgated up to January 31, 2013.

Reference

Republic Act No. 8552

AN ACT ESTABLISHING THE RULES AND POLICIES ON THE DOMESTIC

ADOPTION OF FILIPINO CHILDREN AND FOR OTHER PURPOSES
GENERAL PROVISIONS

Section 1. Short Title. This Act shall be known as the "Domestic Adoption Act of 1998."

Section 2. Declaration of Policies. (a) It is hereby declared the policy of the State to ensure that
every child remains under the care and custody of his/her parent(s) and be provided with love, care,
understanding and security towards the full and harmonious development of his/her personality.
Only when such efforts prove insufficient and no appropriate placement or adoption within the
child's extended family is available shall adoption by an unrelated person be considered.

(b) In all matters relating to the care, custody and adoption of a child, his/her interest shall be the
paramount consideration in accordance with the tenets set forth in the United Nations (UN)
Convention on the Rights of the Child; UN Declaration on Social and Legal Principles Relating to
the Protection and Welfare of Children with Special Reference to Foster Placement and Adoption,
Nationally and Internationally; and the Hague Convention on the Protection of Children and
Cooperation in Respect of Intercountry Adoption. Toward this end, the State shall provide
alternative protection and assistance through foster care or adoption for every child who is
neglected, orphaned, or abandoned.

(c) It shall also be a State policy to:

(i) Safeguard the biological parent(s) from making hurried decisions to relinquish his/her
parental authority over his/her child;

(ii) Prevent the child from unnecessary separation from his/her biological parent(s);

(iii) Protect adoptive parent(s) from attempts to disturb his/her parental authority and
custody over his/her adopted child.

Any voluntary or involuntary termination of parental authority shall be administratively or

judicially declared so as to establish the status of the child as "legally available for adoption" and
his/her custody transferred to the Department of Social Welfare and Development or to any duly
licensed and accredited child-placing or child-caring agency, which entity shall be authorized to take
steps for the permanent placement of the child;

(iv) Conduct public information and educational campaigns to promote a positive

environment for adoption;

(v) Ensure that sufficient capacity exists within government and private sector agencies to
handle adoption inquiries, process domestic adoption applications, and offer adoption-related
services including, but not limited to, parent preparation and post-adoption education and
counseling; and

(vi) Encourage domestic adoption so as to preserve the child's identity and culture in his/her
native land, and only when this is not available shall intercountry adoption be considered as a last
resort.
Section 3. Definition of Terms. For purposes of this Act, the following terms shall be defined
as:

(a) "Child" is a person below eighteen (18) years of age.

(b) "A child legally available for adoption" refers to a child who has been voluntarily or involuntarily
committed to the Department or to a duly licensed and accredited child-placing or child-caring
agency, freed of the parental authority of his/her biological parent(s) or guardian or adopter(s) in
case of rescission of adoption.

(c) "Voluntarily committed child" is one whose parent(s) knowingly and willingly relinquishes parental
authority to the Department.

(d) "Involuntarily committed child" is one whose parent(s), known or unknown, has been permanently
and judicially deprived of parental authority due to abandonment; substantial, continuous, or
repeated neglect; abuse; or incompetence to discharge parental responsibilities.

(e) "Abandoned child" refers to one who has no proper parental care or guardianship or whose
parent(s) has deserted him/her for a period of at least six (6) continuous months and has been
judicially declared as such.

(f) "Supervised trial custody" is a period of time within which a social worker oversees the adjustment
and emotional readiness of both adopter(s) and adoptee in stabilizing their filial relationship.

(g) "Department" refers to the Department of Social Welfare and Development.

(h) "Child-placing agency" is a duly licensed and accredited agency by the Department to provide
comprehensive child welfare services including, but not limited to, receiving applications for
adoption, evaluating the prospective adoptive parents, and preparing the adoption home study.

(i) "Child-caring agency" is a duly licensed and accredited agency by the Department that provides
twenty four (24)-hour residential care services for abandoned, orphaned, neglected, or voluntarily
committed children.

(j) "Simulation of birth" is the tampering of the civil registry making it appear in the birth records that a
certain child was born to a person who is not his/her biological mother, causing such child to lose
his/her true identity and status.

PRE-ADOPTION SERVICES

Section 4. Counseling Service. The Department shall provide the services of licensed social
workers to the following:

(a) Biological Parent(s) Counseling shall be provided to the parent(s) before and after the birth of
his/her child. No binding commitment to an adoption plan shall be permitted before the birth of
his/her child. A period of six (6) months shall be allowed for the biological parent(s) to reconsider
any decision to relinquish his/her child for adoption before the decision becomes irrevocable.
Counseling and rehabilitation services shall also be offered to the biological parent(s) after he/she
has relinquished his/her child for adoption.
Steps shall be taken by the Department to ensure that no hurried decisions are made and all
alternatives for the child's future and the implications of each alternative have been provided.

(b) Prospective Adoptive Parent(s) Counseling sessions, adoption fora and seminars, among others,
shall be provided to prospective adoptive parent(s) to resolve possible adoption issues and to
prepare him/her for effective parenting.

(c) Prospective Adoptee Counseling sessions shall be provided to ensure that he/she understands the
nature and effects of adoption and is able to express his/her views on adoption in accordance with
his/her age and level of maturity.

Section 5. Location of Unknown Parent(s). It shall be the duty of the Department or the child-
placing or child-caring agency which has custody of the child to exert all efforts to locate his/her
unknown biological parent(s). If such efforts fail, the child shall be registered as a foundling and
subsequently be the subject of legal proceedings where he/she shall be declared abandoned.

Section 6. Support Services. The Department shall develop a pre-adoption program which shall
include, among others, the above mentioned services.

ELIGIBILITY

Section 7. Who May Adopt. The following may adopt:

(a) Any Filipino citizen of legal age, in possession of full civil capacity and legal rights, of good moral
character, has not been convicted of any crime involving moral turpitude, emotionally and
psychologically capable of caring for children, at least sixteen (16) years older than the adoptee, and
who is in a position to support and care for his/her children in keeping with the means of the
family. The requirement of sixteen (16) year difference between the age of the adopter and adoptee
may be waived when the adopter is the biological parent of the adoptee, or is the spouse of the
adoptee's parent;

(b) Any alien possessing the same qualifications as above stated for Filipino nationals: Provided, That
his/her country has diplomatic relations with the Republic of the Philippines, that he/she has been
living in the Philippines for at least three (3) continuous years prior to the filing of the application
for adoption and maintains such residence until the adoption decree is entered, that he/she has been
certified by his/her diplomatic or consular office or any appropriate government agency that he/she
has the legal capacity to adopt in his/her country, and that his/her government allows the adoptee
to enter his/her country as his/her adopted son/daughter: Provided, Further, That the requirements
on residency and certification of the alien's qualification to adopt in his/her country may be waived
for the following:

(i) a former Filipino citizen who seeks to adopt a relative within the fourth (4th) degree of
consanguinity or affinity; or

(ii) one who seeks to adopt the legitimate son/daughter of his/her Filipino spouse; or
 (iii) one who is married to a Filipino citizen and seeks to adopt jointly with his/her spouse a
relative within the fourth (4th) degree of consanguinity or affinity of the Filipino spouse; or

(c) The guardian with respect to the ward after the termination of the guardianship and clearance of
his/her financial accountabilities.
Husband and wife shall jointly adopt, except in the following cases:

(i) if one spouse seeks to adopt the legitimate son/daughter of the other; or

(ii) if one spouse seeks to adopt his/her own illegitimate son/daughter: Provided, However,
that the other spouse has signified his/her consent thereto; or

(iii) if the spouses are legally separated from each other.

In case husband and wife jointly adopt, or one spouse adopts the illegitimate son/daughter of the
other, joint parental authority shall be exercised by the spouses.

Section 8. Who May Be Adopted. The following may be adopted:

(a) Any person below eighteen (18) years of age who has been administratively or judicially declared
available for adoption;

(b) The legitimate son/daughter of one spouse by the other spouse;

(c) An illegitimate son/daughter by a qualified adopter to improve his/her status to that of

legitimacy;

(d) A person of legal age if, prior to the adoption, said person has been consistently considered and
treated by the adopter(s) as his/her own child since minority;
(e) A child whose adoption has been previously rescinded; or

(f) A child whose biological or adoptive parent(s) has died: Provided, That no proceedings shall be
initiated within six (6) months from the time of death of said parent(s).

Section 9. Whose Consent is Necessary to the Adoption. After being properly counseled and
informed of his/her right to give or withhold his/her approval of the adoption, the written consent
of the following to the adoption is hereby required:

(a) The adoptee, if ten (10) years of age or over;

(b) The biological parent(s) of the child, if known, or the legal guardian, or the proper government
instrumentality which has legal custody of the child;

(c) The legitimate and adopted sons/daughters, ten (10) years of age or over, of the adopter(s) and
adoptee, if any;

(d) The illegitimate sons/daughters, ten (10) years of age or over, of the adopter if living with said
adopter and the latter's spouse, if any; and
(e) The spouse, if any, of the person adopting or to be adopted.

PROCEDURE

Section 10. Hurried Decisions. In all proceedings for adoption, the court shall require proof that
the biological parent(s) has been properly counseled to prevent him/her from making hurried
decisions caused by strain or anxiety to give up the child, and to sustain that all measures to
strengthen the family have been exhausted and that any prolonged stay of the child in his/her own
home will be inimical to his/her welfare and interest.

Section 11. Case Study. No petition for adoption shall be set for hearing unless a licensed social
worker of the Department, the social service office of the local government unit, or any child-
placing or child-caring agency has made a case study of the adoptee, his/her biological parent(s), as
well as the adopter(s), and has submitted the report and recommendations on the matter to the
court hearing such petition.

At the time of preparation of the adoptee's case study, the concerned social worker shall confirm
with the Civil Registry the real identity and registered name of the adoptee. If the birth of the
adoptee was not registered with the Civil Registry, it shall be the responsibility of the concerned
social worker to ensure that the adoptee is registered.

The case study on the adoptee shall establish that he/she is legally available for adoption and that
the documents to support this fact are valid and authentic. Further, the case study of the adopter(s)
shall ascertain his/her genuine intentions and that the adoption is in the best interest of the child.

The Department shall intervene on behalf of the adoptee if it finds, after the conduct of the case
studies, that the petition should be denied. The case studies and other relevant documents and
records pertaining to the adoptee and the adoption shall be preserved by the Department.

Section 12. Supervised Trial Custody. No petition for adoption shall be finally granted until the
adopter(s) has been given by the court a supervised trial custody period for at least six (6) months
within which the parties are expected to adjust psychologically and emotionally to each other and
establish a bonding relationship. During said period, temporary parental authority shall be vested in
the adopter(s).

The court may motu proprio or upon motion of any party reduce the trial period if it finds the same
to be in the best interest of the adoptee, stating the reasons for the reduction of the period.
However, for alien adopter(s), he/she must complete the six (6)-month trial custody except for
those enumerated in Sec. 7 (b) (i) (ii) (iii).

If the child is below seven (7) years of age and is placed with the prospective adopter(s) through a
pre-adoption placement authority issued by the Department, the prospective adopter(s) shall enjoy
all the benefits to which biological parent(s) is entitled from the date the adoptee is placed with the
prospective adopter(s).

Section 13. Decree of Adoption. If, after the publication of the order of hearing has been
complied with, and no opposition has been interposed to the petition, and after consideration of the
case studies, the qualifications of the adopter(s), trial custody report and the evidence submitted, the
court is convinced that the petitioners are qualified to adopt, and that the adoption would redound
to the best interest of the adoptee, a decree of adoption shall be entered which shall be effective as
of the date the original petition was filed. This provision shall also apply in case the petitioner(s) dies
before the issuance of the decree of adoption to protect the interest of the adoptee. The decree shall
state the name by which the child is to be known.

Section 14. Civil Registry Record. An amended certificate of birth shall be issued by the Civil
Registry, as required by the Rules of Court, attesting to the fact that the adoptee is the child of the
adopter(s) by being registered with his/her surname. The original certificate of birth shall be
stamped "cancelled" with the annotation of the issuance of an amended birth certificate in its place
and shall be sealed in the civil registry records. The new birth certificate to be issued to the adoptee
shall not bear any notation that it is an amended issue.

Section 15. Confidential Nature of Proceedings and Records. All hearings in adoption cases
shall be confidential and shall not be open to the public. All records, books, and papers relating to
the adoption cases in the files of the court, the Department, or any other agency or institution
participating in the adoption proceedings shall be kept strictly confidential.
If the court finds that the disclosure of the information to a third person is necessary for purposes
connected with or arising out of the adoption and will be for the best interest of the adoptee, the
court may merit the necessary information to be released, restricting the purposes for which it may
be used.

EFFECTS OF ADOPTION

Section 16. Parental Authority. Except in cases where the biological parent is the spouse of the
adopter, all legal ties between the biological parent(s) and the adoptee shall be severed and the same
shall then be vested on the adopter(s).

Section 17. Legitimacy. The adoptee shall be considered the legitimate son/daughter of the
adopter(s) for all intents and purposes and as such is entitled to all the rights and obligations
provided by law to legitimate sons/daughters born to them without discrimination of any kind. To
this end, the adoptee is entitled to love, guidance, and support in keeping with the means of the
family.

Section 18. Succession. In legal and intestate succession, the adopter(s) and the adoptee shall
have reciprocal rights of succession without distinction from legitimate filiation. However, if the
adoptee and his/her biological parent(s) had left a will, the law on testamentary succession shall
govern.

RESCISSION OF ADOPTION

Section 19. Grounds for Rescission of Adoption. Upon petition of the adoptee, with the
assistance of the Department if a minor or if over eighteen (18) years of age but is incapacitated, as
guardian/counsel, the adoption may be rescinded on any of the following grounds committed by the
adopter(s): (a) repeated physical and verbal maltreatment by the adopter(s) despite having undergone
counseling; (b) attempt on the life of the adoptee; (c) sexual assault or violence; or (d) abandonment
and failure to comply with parental obligations. Adoption, being in the best interest of the child,
shall not be subject to rescission by the adopter(s). However, the adopter(s) may disinherit the
adoptee for causes provided in Article 919 of the Civil Code.

Section 20. Effects of Rescission. If the petition is granted, the parental authority of the
adoptee's biological parent(s), if known, or the legal custody of the Department shall be restored if
the adoptee is still a minor or incapacitated. The reciprocal rights and obligations of the adopter(s)
and the adoptee to each other shall be extinguished.

The court shall order the Civil Registrar to cancel the amended certificate of birth of the adoptee
and restore his/her original birth certificate.

Succession rights shall revert to its status prior to adoption, but only as of the date of judgment of
judicial rescission. Vested rights acquired prior to judicial rescission shall be respected.

All the foregoing effects of rescission of adoption shall be without prejudice to the penalties
imposable under the Penal Code if the criminal acts are properly proven.

VIOLATIONS AND PENALTIES

Section 21. Violations and Penalties. (a) The penalty of imprisonment ranging from six (6) years
and one (1) day to twelve (12) years and/or a fine not less than Fifty thousand pesos (P50,000.00),
but not more than Two hundred thousand pesos (P200,000.00) at the discretion of the court shall be
imposed on any person who shall commit any of the following acts:

(i) obtaining consent for an adoption through coercion, undue influence, fraud, improper
material inducement, or other similar acts;

(ii) non-compliance with the procedures and safeguards provided by the law for adoption; or

(iii) subjecting or exposing the child to be adopted to danger, abuse, or exploitation.

(b) Any person who shall cause the fictitious registration of the birth of a child under the name(s) of
a person(s) who is not his/her biological parent(s) shall be guilty of simulation of birth, and shall be
punished by prision mayor in its medium period and a fine not exceeding Fifty thousand pesos
(P50,000.00).

Any physician or nurse or hospital personnel who, in violation of his/her oath of office, shall
cooperate in the execution of the abovementioned crime shall suffer the penalties herein prescribed
and also the penalty of permanent disqualification.

Any person who shall violate established regulations relating to the confidentiality and integrity of
records, documents, and communications of adoption applications, cases, and processes shall suffer
the penalty of imprisonment ranging from one (1) year and one (1) day to two (2) years, and/or a
fine of not less than Five thousand pesos (P5,000.00) but not more than Ten thousand pesos
(P10,000.00), at the discretion of the court.
A penalty lower by two (2) degrees than that prescribed for the consummated offense under this
Article shall be imposed upon the principals of the attempt to commit any of the acts herein
enumerated. Acts punishable under this Article, when committed by a syndicate or where it involves
two (2) or more children shall be considered as an offense constituting child trafficking and shall
merit the penalty of reclusion perpetua.

Acts punishable under this Article are deemed committed by a syndicate if carried out by a group of
three (3) or more persons conspiring and/or confederating with one another in carrying out any of
the unlawful acts defined under this Article. Penalties as are herein provided, shall be in addition to
any other penalties which may be imposed for the same acts punishable under other laws,
ordinances, executive orders, and proclamations.

When the offender is an alien, he/she shall be deported immediately after service of sentence and
perpetually excluded from entry to the country.
Any government official, employee or functionary who shall be found guilty of violating any of the
provisions of this Act, or who shall conspire with private individuals shall, in addition to the above-
prescribed penalties, be penalized in accordance with existing civil service laws, rules and
regulations: Provided, That upon the filing of a case, either administrative or criminal, said
government official, employee, or functionary concerned shall automatically suffer suspension until
the resolution of the case.
Section 22. Rectification of Simulated Births. A person who has, prior to the effectivity of this
Act, simulated the birth of a child shall not be punished for such act: Provided, That the simulation of
birth was made for the best interest of the child and that he/she has been consistently considered
and treated by that person as his/her own son/daughter: Provided, further, That the application for
correction of the birth registration and petition for adoption shall be filed within five (5) years from
the effectivity of this Act and completed thereafter: Provided, finally, That such person complies with
the procedure as specified in Article IV of this Act and other requirements as determined by the
Department.

FINAL PROVISIONS

Section 23. Adoption Resource and Referral Office. There shall be established an Adoption
Resources and Referral Office under the Department with the following functions: (a) monitor the
existence, number, and flow of children legally available for adoption and prospective adopter(s) so
as to facilitate their matching; (b) maintain a nationwide information and educational campaign on
domestic adoption; (c) keep records of adoption proceedings; (d) generate resources to help child-
caring and child-placing agencies and foster homes maintain viability; and (e) do policy research in
collaboration with the Intercountry Adoption Board and other concerned agencies. The office shall
be manned by adoption experts from the public and private sectors.

Section 24. Implementing Rules and Regulations. Within six (6) months from the
promulgation of this Act, the Department, with the Council for the Welfare of Children, the Office
of Civil Registry General, the Department of Justice, Office of the Solicitor General, and two (2)
private individuals representing child-placing and child-caring agencies shall formulate the necessary
guidelines to make the provisions of this Act operative.
Section 25. Appropriations. Such sum as may be necessary for the implementation of the
provisions of this Act shall be included in the General Appropriations Act of the year following its
enactment into law and thereafter.

Section 26. Repealing Clause. Any law, presidential decree or issuance, executive order, letter of
instruction, administrative order, rule, or regulation contrary to, or inconsistent with the provisions
of this Act is hereby repealed, modified, or amended accordingly.

Section 27. Separability Clause. If any provision of this Act is held invalid or unconstitutional,
the other provisions not affected thereby shall remain valid and subsisting.

Section 28. Effectivity Clause. This Act shall take effect fifteen (15) days following its complete
publication in any newspaper of general circulation or in the Official Gazette.

Approved: February 25, 1998

REPUBLIC ACT NO. 8043

AN ACT ESTABLISHING THE RULES TO GOVERN INTER-COUNTRY ADOPTION

OF FILIPINO CHILDREN, AND FOR OTHER PURPOSES.

GENERAL PROVISIONS

Section 1. Short Title. This Act shall be known as the "Inter-Country Adoption Act of 1995."

Sec. 2. Declaration of Policy. It is hereby declared the policy of the State to provide every
neglected and abandoned child with a family that will provide such child with love and care as well
as opportunities for growth and development. Towards this end, efforts shall be exerted to place the
child with an adoptive family in the Philippines. However, recognizing that inter-country adoption
may be considered as allowing aliens not presently allowed by law to adopt Filipino children if such
children cannot be adopted by qualified Filipino citizens or aliens, the State shall take measures to
ensure that inter-country adoptions are allowed when the same shall prove beneficial to the child's
best interests, and shall serve and protect his/her fundamental rights.chan robles virtual law library

Sec. 3. Definition of Terms. As used in this Act. the term:

(a) Inter-country adoption refers to the socio-legal process of adopting a Filipino child by a foreigner
or a Filipino citizen permanently residing abroad where the petition is filed, the supervised trial
custody is undertaken, and the decree of adoption is issued outside the Philippines.

(b) Child means a person below fifteen (15) years of age unless sooner emancipated by law.
(c) Department refers to the Department of Social Welfare and Development of the Republic of the
Philippines.

(d) Secretary refers to the Secretary of the Department of Social Welfare and Development.

(e) Authorized and accredited agency refers to the State welfare agency or a licensed adoption
agency in the country of the adopting parents which provide comprehensive social services and
which is duly recognized by the Department.

(f) Legally-free child means a child who has been voluntarily or involuntarily committed to the
Department, in accordance with the Child and Youth Welfare Code.

(g) Matching refers to the judicious pairing of the adoptive child and the applicant to promote a
mutually satisfying parent-child relationship.

(h) Board refers to the Inter-country Adoption Board.

THE INTER-COUNTRY ADOPTION BOARD

Sec. 4. The Inter-Country Adoption Board. There is hereby created the Inter-Country Adoption
Board, hereinafter referred to as the Board to act as the central authority in matters relating to inter-
country adoption. It shall act as the policy-making body for purposes of carrying out the provisions
of this Act, in consultation and coordination with the Department, the different child-care and
placement agencies, adoptive agencies, as well as non-governmental organizations engaged in child-
care and placement activities. As such, it shall:

(a) Protect the Filipino child from abuse, exploitation, trafficking and/or sale or any other practice in
connection with adoption which is harmful, detrimental, or prejudicial to the child;

(b) Collect, maintain, and preserve confidential information about the child and the adoptive
parents;

(c) Monitor, follow up, and facilitate completion of adoption of the child through authorized and
accredited agency;

(d) Prevent improper financial or other gain in connection with an adoption and deter improper
practices contrary to this Act;

(e) Promote the development of adoption services including post-legal adoption;

(f) License and accredit child-caring/placement agencies and collaborate with them in the placement
of Filipino children;

(g) Accredit and authorize foreign adoption agency in the placement of Filipino children in their
own country; and
(h) Cancel the license to operate and blacklist the child-caring and placement agency or adoptive
agency involved from the accreditation list of the Board upon a finding of violation of any provision
under this Act.

Sec. 5. Composition of the Board. The Board shall be composed of the Secretary of the
Department as ex officio Chairman, and six (6) other members to be appointed by the President for
a nonrenewable term of six (6) years: Provided, That there shall be appointed one (1) psychiatrist or
psychologist, two (2) lawyers who shall have at least the qualifications of a regional trial court judge,
one (1) registered social worker and two (2) representatives from non-governmental organizations
engaged in child-caring and placement activities. The members of the Board shall receive a per diem
allowance of One thousand five hundred pesos (P1,500) for each meeting attended by them:
Provided, further, That no compensation shall be paid for more than four (4) meetings a month.

Sec. 6. Powers and Functions of the Board. The Board shall have the following powers and
functions:

(a) to prescribe rules and regulations as it may deem reasonably necessary to carry out the provisions
of this Act, after consultation and upon favorable recommendation of the different agencies
concerned with the child-caring, placement, and adoption;

(b) to set the guidelines for the convening of an Inter-country Adoption Placement Committee
which shall be under the direct supervision of the Board;

(c) to set the guidelines for the manner by which selection/matching of prospective adoptive parents
and adoptive child can be made;

(d) to determine a reasonable schedule of fees and charges to be exacted in connection with the
application for adoption;

(e) to determine the form and contents of the application for inter-country adoption;

(g) to institute systems and procedures to prevent improper financial gain in connection with
adoption and deter improper practices which are contrary to this Act;

(h) to promote the development of adoption services, including post-legal adoption services,

(i) to accredit and authorize foreign private adoption agencies which have demonstrated
professionalism, competence and have consistently pursued non-profit objectives to engage in the
placement of Filipino children in their own country: Provided, That such foreign private agencies are
duly authorized and accredited by their own government to conduct inter-country adoption:Provided,
however, That the total number of authorized and accredited foreign private adoption agencies shall
not exceed one hundred (100) a year;

(j) to take appropriate measures to ensure confidentiality of the records of the child, the natural
parents and the adoptive parents at all times;
(k) to prepare, review or modify, and thereafter, recommend to the Department of Foreign Affairs,
Memoranda of Agreement respecting inter-country adoption consistent with the implementation of
this Act and its stated goals, entered into, between and among foreign governments, international
organizations and recognized international non-governmental organizations;

(l) to assist other concerned agencies and the courts in the implementation of this Act,
particularly as regards coordination with foreign persons, agencies and other entities involved in the
process of adoption and the physical transfer of the child; and
(m) to perform such other functions on matters relating to inter-country adoption as may be
determined by the President.

PROCEDURE

Sec. 7. Inter-Country Adoption as the Last Resort. The Board shall ensure that all possibilities for
adoption of the child under the Family Code have been exhausted and that inter-country adoption is
in the best interest of the child. Towards this end, the Board shall set up the guidelines to ensure
that steps will be taken to place the child in the Philippines before the child is placed for inter-
country adoption: Provided, however, That the maximum number that may be allowed for foreign
adoption shall not exceed six hundred (600) a year for the first five (5) years.

Sec. 8. Who May be Adopted. Only a legally free child may be the subject of inter-country
adoption. In order that such child may be considered for placement, the following documents must
be submitted to the Board:

(a)Child study;
(b)Birth certificate/foundling certificate;
(c)Deed of voluntary commitment/decree of abandonment/death certificate of parents;
(d)Medical evaluation /history;
(e)Psychological evaluation, as necessary; and
(f)Recent photo of the child.

Sec. 9. Who May Adopt. An alien or a Filipino citizen permanently residing abroad may file an
application for inter-country adoption of a Filipino child if he/she:

(a) is at least twenty-seven (27) years of age and at least sixteen (16) years older than the child to be
adopted, at the time of application unless the adopter is the parent by nature of the child to be
adopted or the spouse of such parent:

(b) if married, his/her spouse must jointly file for the adoption;

(c) has the capacity to act and assume all rights and responsibilities of parental authority under his
national laws, and has undergone the appropriate counseling from an accredited counselor in
his/her country;
(d) has not been convicted of a crime involving moral turpitude;

(e) is eligible to adopt under his/her national law;

(f) is in a position to provide the proper care and support and to give the necessary moral values and
example to all his children, including the child to be adopted;

(g) agrees to uphold the basic rights of the child as embodied under Philippine laws, the U.N.
Convention on the Rights of the Child, and to abide by the rules and regulations issued to
implement the provisions of this Act;

(h) comes from a country with whom the Philippines has diplomatic relations and whose
government maintains a similarly authorized and accredited agency and that adoption is allowed
under his/her national laws; and

(i) possesses all the qualifications and none of the disqualifications provided herein and in other
applicable Philippine laws.

Sec. 10. Where to File Application. An application to adopt a Filipino child shall be filed either
with the Philippine Regional Trial Court having jurisdiction over the child, or with the Board,
through an intermediate agency, whether governmental or an authorized and accredited agency, in
the country of the prospective adoptive parents, which application shall be in accordance with the
requirements as set forth in the implementing rules and regulations to be promulgated by the Board.

The application shall be supported by the following documents written and officially translated in
English.

(a) Birth certificate of applicant(s);

(b) Marriage contract, if married, and divorce decree, if applicable;

(c) Written consent of their biological or adoptive children above ten (10) years of age, in the form
of sworn statement;

(d) Physical, medical and psychological evaluation by a duly licensed physician and psychologist;

(e) Income tax returns or any document showing the financial capability of the applicant(s);

(f) Police clearance of applicant(s);

(g) Character reference from the local church/minister, the applicant's employer and a member of
the immediate community who have known the applicant(s) for at least five (5) years; and
(h) Recent postcard-size pictures of the applicant(s) and his immediate family;

The Rules of Court shall apply in case of adoption by judicial proceedings.

Sec. 11. Family Selection/Matching. No child shall be matched to a foreign adoptive family
unless it is satisfactorily shown that the child cannot be adopted locally. The clearance, as issued by
the Board, with the copy of the minutes of the meetings, shall form part of the records of the child
to be adopted. When the Board is ready to transmit the Placement Authority to the authorized and
accredited inter-country adoption agency and all the travel documents of the child are ready, the
adoptive parents, or any one of them, shall personally fetch the child in the Philippines.

Sec. 12. Pre-adoptive Placement Costs. The applicant(s) shall bear the following costs incidental
to the placement of the child;
(a) The cost of bringing the child from the Philippines to the residence of the applicant(s) abroad,
including all travel expenses within the Philippines and abroad; and

(b) The cost of passport, visa, medical examination and psychological evaluation required, and other
related expenses.

Sec. 13. Fees, Charges and Assessments. Fees, charges, and assessments collected by the Board in
the exercise of its functions shall be used solely to process applications for inter-country adoption
and to support the activities of the Board.

Sec. 14. Supervision of Trial Custody. The governmental agency or the authorized and accredited
agency in the country of the adoptive parents which filed the application for inter-country adoption
shall be responsible for the trial custody and the care of the child. It shall also provide family
counseling and other related services. The trial custody shall be for a period of six (6) months from
the time of placement. Only after the lapse of the period of trial custody shall a decree of adoption
be issued in the said country a copy of which shall be sent to the Board to form part of the records
of the child.chan robles virtual law library

During the trial custody, the adopting parent(s) shall submit to the governmental agency or the
authorized and accredited agency, which shall in turn transmit a copy to the Board, a progress report
of the child's adjustment. The progress report shall be taken into consideration in deciding whether
or not to issue the decree of adoption.

The Department of Foreign Affairs shall set up a system by which Filipino children sent abroad for
trial custody are monitored and checked as reported by the authorized and accredited inter-country
adoption agency as well as the repatriation to the Philippines of a Filipino child whose adoption has
not been approved.

Sec. 15. Executive Agreements. The Department of Foreign Affairs, upon representation of the
Board, shall cause the preparation of Executive Agreements with countries of the foreign adoption
agencies to ensure the legitimate concurrence of said countries in upholding the safeguards provided
by this Act.

PENALTIES

Sec. 16. Penalties. (a) Any person who shall knowingly participate in the conduct or carrying out
of an illegal adoption, in violation of the provisions of this Act, shall be punished with a penalty of
imprisonment ranging from six (6) years and one (1) day to twelve (12) years and/or a fine of not
less than Fifty thousand pesos (P50,000), but not more than Two hundred thousand pesos
(P200.000), at the discretion of the court. For purposes of this Act, an adoption is illegal if it is
effected in any manner contrary to the provisions of this Act or established State policies, its
implementing rules and regulations, executive agreements, and other laws pertaining to adoption.
Illegality may be presumed from the following acts:

(1) consent for an adoption was acquired through, or attended by coercion, fraud, improper material
inducement;

(2) there is no authority from the Board to effect adoption;

(3) the procedures and safeguards placed under the law for adoption were not complied with; and

(4) the child to be adopted is subjected to, or exposed to danger, abuse and exploitation.

(b)Any person who shall violate established regulations relating to the confidentiality and integrity of
records, documents and communications of adoption applications, cases and processes shall suffer
the penalty of imprisonment ranging from one (1) year and one (1) day to two (2) years, and/or a
fine of not less than Five thousand pesos (P5,000), but not more than Ten thousand pesos
(P10,000), at the discretion of the court.

A penalty lower by two (2) degrees than that prescribed for the consummated felony under this
Article shall be imposed upon the principals of the attempt to commit any of the acts herein
enumerated.

Acts punishable under this Article, when committed by a syndicate or where it involves two or more
children shall be considered as an offense constituting child trafficking and shall merit the penalty of
reclusion perpetua.

Acts punishable under this Article are deemed committed by a syndicate if carried out by a group of
three (3) or more persons conspiring and/or confederating with one another in carrying out any of
the unlawful acts defined under this Article.Penalties as are herein provided shall be in addition to
any other penalties which may be imposed for the same acts punishable under other laws,
ordinances, executive orders, and proclamations.chan robles virtual law library

Sec. 17. Public Officers as Offenders. Any government official, employee or functionary who
shall be found guilty of violating any of the provisions of this Act, or who shall conspire with private
individuals shall, in addition to the above-prescribed penalties, be penalized in accordance with
existing civil service laws, rules and regulations: Provided, That upon the filing of a case, either
administrative or criminal, said government official, employee or functionary concerned shall
automatically suffer suspension until the resolution of the case.

FINAL PROVISIONS

Sec. 18. Implementing Rules and Regulations. The Inter-country Adoption Board, in
coordination with the Council for the Welfare of Children, the Department of Foreign Affairs, and
the Department of Justice, after due consultation with agencies involved in child-care and
placement, shall promulgate the necessary rules and regulations to implement the provisions of this
Act within six (6) months after its effectivity.
Sec. 19. Appropriations. The amount of Five million pesos (P5,000,000) is hereby appropriated
from the proceeds of the Lotto for the initial operations of the Board and subsequently the
appropriations of the same shall be included in the General Appropriations Act for the year
following its enactment.
Sec. 20. Separability Clause. If any provision, or part hereof is held invalid or unconstitutional,
the remainder of the law or the provision not otherwise affected, shall remain valid and subsisting.

Sec. 21. Repealing Clause. Any law, decree, executive order, administrative order or rules and
regulations contrary to, or inconsistent with the provisions of this Act are hereby repealed, modified
or amended accordingly.chan robles virtual law library

Sec. 22. Effectivity Clause. This Act shall take effect fifteen (15) days after its publication in two
(2) newspapers of general circulation.

Approved: June 7, 1995

Republic Act No. 7610

AN ACT PROVIDING FOR STRONGER DETERRENCE AND SPECIAL

PROTECTION AGAINST CHILD ABUSE, EXPLOITATION AND
DISCRIMINATION, AND FOR OTHER PURPOSES

Title, Policy, Principles and Definitions of Terms

Section 1. Title. This Act shall be known as the "Special Protection of Children Against
Abuse, Exploitation and Discrimination Act."

Section 2. Declaration of State Policy and Principles. It is hereby declared to be the policy of
the State to provide special protection to children from all firms of abuse, neglect, cruelty
exploitation and discrimination and other conditions, prejudicial their development; provide
sanctions for their commission and carry out a program for prevention and deterrence of and crisis
intervention in situations of child abuse, exploitation and discrimination. The State shall intervene
on behalf of the child when the parent, guardian, teacher or person having care or custody of the
child fails or is unable to protect the child against abuse, exploitation and discrimination or when
such acts against the child are committed by the said parent, guardian, teacher or person having care
and custody of the same.

It shall be the policy of the State to protect and rehabilitate children gravely threatened or
endangered by circumstances which affect or will affect their survival and normal development and
over which they have no control.

The best interests of children shall be the paramount consideration in all actions concerning them,
whether undertaken by public or private social welfare institutions, courts of law, administrative
authorities, and legislative bodies, consistent with the principle of First Call for Children as
enunciated in the United Nations Convention of the Rights of the Child. Every effort shall be
exerted to promote the welfare of children and enhance their opportunities for a useful and happy
life.

Section 3. Definition of Terms.

(a) "Children" refers to person below eighteen (18) years of age or those over but are unable to fully
take care of themselves or protect themselves from abuse, neglect, cruelty, exploitation or
discrimination because of a physical or mental disability or condition;
(b) "Child abuse" refers to the maltreatment, whether habitual or not, of the child which includes
any of the following:

(1) Psychological and physical abuse, neglect, cruelty, sexual abuse and emotional
maltreatment;

(2) Any act by deeds or words which debases, degrades or demeans the intrinsic worth and
dignity of a child as a human being;

(3) Unreasonable deprivation of his basic needs for survival, such as food and shelter; or

(4) Failure to immediately give medical treatment to an injured child resulting in serious
impairment of his growth and development or in his permanent incapacity or death.

(c) "Circumstances which gravely threaten or endanger the survival and normal development of
children" include, but are not limited to, the following;

(1) Being in a community where there is armed conflict or being affected by armed conflict-
related activities;

(2) Working under conditions hazardous to life, safety and normal which unduly interfere
with their normal development;

(3) Living in or fending for themselves in the streets of urban or rural areas without the care
of parents or a guardian or basic services needed for a good quality of life;

(4) Being a member of a indigenous cultural community and/or living under conditions of
extreme poverty or in an area which is underdeveloped and/or lacks or has inadequate access to
basic services needed for a good quality of life;

(5) Being a victim of a man-made or natural disaster or calamity; or

(6) Circumstances analogous to those abovestated which endanger the life, safety or normal
development of children.

(d) "Comprehensive program against child abuse, exploitation and discrimination" refers to the
coordinated program of services and facilities to protected children against:

(1) Child Prostitution and other sexual abuse;

 (2) Child trafficking;
(3) Obscene publications and indecent shows;
(4) Other acts of abuses; and
(5) Circumstances which threaten or endanger the survival and normal development of
children.

Program on Child Abuse, Exploitation and Discrimination

Section 4. Formulation of the Program. There shall be a comprehensive program to be

formulated, by the Department of Justice and the Department of Social Welfare and Development
in coordination with other government agencies and private sector concerned, within one (1) year
from the effectivity of this Act, to protect children against child prostitution and other sexual abuse;
child trafficking, obscene publications and indecent shows; other acts of abuse; and circumstances
which endanger child survival and normal development.

Child Prostitution and Other Sexual Abuse

Section 5. Child Prostitution and Other Sexual Abuse. Children, whether male or female, who
for money, profit, or any other consideration or due to the coercion or influence of any adult,
syndicate or group, indulge in sexual intercourse or lascivious conduct, are deemed to be children
exploited in prostitution and other sexual abuse.

The penalty of reclusion temporal in its medium period to reclusion perpetua shall be imposed upon
the following:

(a) Those who engage in or promote, facilitate or induce child prostitution which include, but are
not limited to, the following:

(1) Acting as a procurer of a child prostitute;

(2) Inducing a person to be a client of a child prostitute by means of written or oral

advertisements or other similar means;

(3) Taking advantage of influence or relationship to procure a child as prostitute;

(4) Threatening or using violence towards a child to engage him as a prostitute; or

(5) Giving monetary consideration goods or other pecuniary benefit to a child with intent to
engage such child in prostitution.

(b) Those who commit the act of sexual intercourse of lascivious conduct with a child exploited in
prostitution or subject to other sexual abuse; Provided, That when the victims is under twelve (12)
years of age, the perpetrators shall be prosecuted under Article 335, paragraph 3, for rape and Article
336 of Act No. 3815, as amended, the Revised Penal Code, for rape or lascivious conduct, as the
case may be: Provided, That the penalty for lascivious conduct when the victim is under twelve (12)
years of age shall be reclusion temporal in its medium period; and
(c) Those who derive profit or advantage therefrom, whether as manager or owner of the
establishment where the prostitution takes place, or of the sauna, disco, bar, resort, place of
entertainment or establishment serving as a cover or which engages in prostitution in addition to the
activity for which the license has been issued to said establishment.

Section 6. Attempt To Commit Child Prostitution. There is an attempt to commit child

prostitution under Section 5, paragraph (a) hereof when any person who, not being a relative of a
child, is found alone with the said child inside the room or cubicle of a house, an inn, hotel, motel,
pension house, apartelle or other similar establishments, vessel, vehicle or any other hidden or
secluded area under circumstances which would lead a reasonable person to believe that the child is
about to be exploited in prostitution and other sexual abuse.

There is also an attempt to commit child prostitution, under paragraph (b) of Section 5 hereof when
any person is receiving services from a child in a sauna parlor or bath, massage clinic, health club
and other similar establishments. A penalty lower by two (2) degrees than that prescribed for the
consummated felony under Section 5 hereof shall be imposed upon the principals of the attempt to
commit the crime of child prostitution under this Act, or, in the proper case, under the Revised
Penal Code.

Child Trafficking

Section 7. Child Trafficking. Any person who shall engage in trading and dealing with children
including, but not limited to, the act of buying and selling of a child for money, or for any other
consideration, or barter, shall suffer the penalty of reclusion temporal to reclusion perpetua. The
penalty shall be imposed in its maximum period when the victim is under twelve (12) years of
age.Section 8. Attempt to Commit Child Trafficking. There is an attempt to commit child
trafficking under Section 7 of this Act:

(a) When a child travels alone to a foreign country without valid reason therefor and without
clearance issued by the Department of Social Welfare and Development or written permit or
justification from the child's parents or legal guardian;

(c) When a person, agency, establishment or child-caring institution recruits women or couples to
bear children for the purpose of child trafficking; or

(d) When a doctor, hospital or clinic official or employee, nurse, midwife, local civil registrar or any
other person simulates birth for the purpose of child trafficking; or

(e) When a person engages in the act of finding children among low-income families, hospitals,
clinics, nurseries, day-care centers, or other child-during institutions who can be offered for the
purpose of child trafficking.

A penalty lower two (2) degrees than that prescribed for the consummated felony under Section 7
hereof shall be imposed upon the principals of the attempt to commit child trafficking under this
Act.

Section 9. Obscene Publications and Indecent Shows. Any person who shall hire, employ,
use, persuade, induce or coerce a child to perform in obscene exhibitions and indecent shows,
whether live or in video, or model in obscene publications or pornographic materials or to sell or
distribute the said materials shall suffer the penalty of prision mayor in its medium period. If the
child used as a performer, subject or seller/distributor is below twelve (12) years of age, the penalty
shall be imposed in its maximum period.
Any ascendant, guardian, or person entrusted in any capacity with the care of a child who shall cause
and/or allow such child to be employed or to participate in an obscene play, scene, act, movie or
show or in any other acts covered by this section shall suffer the penalty of prision mayor in its
medium period.

Section 10. Other Acts of Neglect, Abuse, Cruelty or Exploitation and Other Conditions
Prejudicial to the Child's Development.

(a) Any person who shall commit any other acts of child abuse, cruelty or exploitation or to be
responsible for other conditions prejudicial to the child's development including those covered by
Article 59 of Presidential Decree No. 603, as amended, but not covered by the Revised Penal Code,
as amended, shall suffer the penalty of prision mayor in its minimum period.

(b) Any person who shall keep or have in his company a minor, twelve (12) years or under or who in
ten (10) years or more his junior in any public or private place, hotel, motel, beer joint, discotheque,
cabaret, pension house, sauna or massage parlor, beach and/or other tourist resort or similar places
shall suffer the penalty of prision mayor in its maximum period and a fine of not less than Fifty
thousand pesos (P50,000): Provided, That this provision shall not apply to any person who is related
within the fourth degree of consanguinity or affinity or any bond recognized by law, local custom
and tradition or acts in the performance of a social, moral or legal duty.

(c) Any person who shall induce, deliver or offer a minor to any one prohibited by this Act to keep
or have in his company a minor as provided in the preceding paragraph shall suffer the penalty of
prision mayor in its medium period and a fine of not less than Forty thousand pesos (P40,000);
Provided, however, That should the perpetrator be an ascendant, stepparent or guardian of the
minor, the penalty to be imposed shall be prision mayor in its maximum period, a fine of not less
than Fifty thousand pesos (P50,000), and the loss of parental authority over the minor.

(d) Any person, owner, manager or one entrusted with the operation of any public or private place
of accommodation, whether for occupancy, food, drink or otherwise, including residential places,
who allows any person to take along with him to such place or places any minor herein described
shall be imposed a penalty of prision mayor in its medium period and a fine of not less than Fifty
thousand pesos (P50,000), and the loss of the license to operate such a place or establishment.

(e) Any person who shall use, coerce, force or intimidate a street child or any other child to;

(1) Beg or use begging as a means of living;

(2) Act as conduit or middlemen in drug trafficking or pushing; or

(3) Conduct any illegal activities, shall suffer the penalty of prision correccional in its
medium period to reclusion perpetua.
For purposes of this Act, the penalty for the commission of acts punishable under Articles 248, 249,
262, paragraph 2, and 263, paragraph 1 of Act No. 3815, as amended, the Revised Penal Code, for
the crimes of murder, homicide, other intentional mutilation, and serious physical injuries,
respectively, shall be reclusion perpetua when the victim is under twelve (12) years of age. The
penalty for the commission of acts punishable under Article 337, 339, 340 and 341 of Act No. 3815,
as amended, the Revised Penal Code, for the crimes of qualified seduction, acts of lasciviousness
with the consent of the offended party, corruption of minors, and white slave trade, respectively,
shall be one (1) degree higher than that imposed by law when the victim is under twelve (12) years
age.
The victim of the acts committed under this section shall be entrusted to the care of the Department
of Social Welfare and Development.

Section 11. Sanctions of Establishments or Enterprises which Promote, Facilitate, or

Conduct Activities Constituting Child Prostitution and Other Sexual Abuse, Child
Trafficking, Obscene Publications and Indecent Shows, and Other Acts of Abuse. All
establishments and enterprises which promote or facilitate child prostitution and other sexual abuse,
child trafficking, obscene publications and indecent shows, and other acts of abuse shall be
immediately closed and their authority or license to operate cancelled, without prejudice to the
owner or manager thereof being prosecuted under this Act and/or the Revised Penal Code, as
amended, or special laws. A sign with the words "off limits" shall be conspicuously displayed outside
the establishments or enterprises by the Department of Social Welfare and Development for such
period which shall not be less than one (1) year, as the Department may determine. The
unauthorized removal of such sign shall be punishable by prision correccional.

An establishment shall be deemed to promote or facilitate child prostitution and other sexual abuse,
child trafficking, obscene publications and indecent shows, and other acts of abuse if the acts
constituting the same occur in the premises of said establishment under this Act or in violation of
the Revised Penal Code, as amended. An enterprise such as a sauna, travel agency, or recruitment
agency which: promotes the aforementioned acts as part of a tour for foreign tourists; exhibits
children in a lewd or indecent show; provides child masseurs for adults of the same or opposite sex
and said services include any lascivious conduct with the customers; or solicits children or activities
constituting the aforementioned acts shall be deemed to have committed the acts penalized herein.

Section 12. Employment of Children. Children below fifteen (15) years of age may be employed
except:

(1) When a child works directly under the sole responsibility of his parents or legal guardian and
where only members of the employer's family are employed: Provided, however, That his
employment neither endangers his life, safety and health and morals, nor impairs his normal
development: Provided, further, That the parent or legal guardian shall provide the said minor child
with the prescribed primary and/or secondary education; or

(2) When a child's employment or participation in public & entertainment or information through
cinema, theater, radio or television is essential: Provided, The employment contract concluded by
the child's parent or guardian, with the express agreement of the child concerned, if possible, and
the approval of the Department of Labor and Employment: Provided, That the following
requirements in all instances are strictly complied with:
 (a) The employer shall ensure the protection, health, safety and morals of the child;

(b) the employer shall institute measures to prevent the child's exploitation or discrimination
taking into account the system and level of remuneration, and the duration and arrangement of
working time; and;

(c) The employer shall formulate and implement, subject to the approval and supervision of
competent authorities, a continuing program for training and skill acquisition of the child.

In the above exceptional cases where any such child may be employed, the employer shall first
secure, before engaging such child, a work permit from the Department of Labor and Employment
which shall ensure observance of the above requirement.
The Department of Labor Employment shall promulgate rules and regulations necessary for the
effective implementation of this Section.

Section 13. Non-formal Education for Working Children. The Department of Education,
Culture and Sports shall promulgate a course design under its non-formal education program aimed
at promoting the intellectual, moral and vocational efficiency of working children who have not
undergone or finished elementary or secondary education. Such course design shall integrate the
learning process deemed most effective under given circumstances.

Section 14. Prohibition on the Employment of Children in Certain Advertisements. No

person shall employ child models in all commercials or advertisements promoting alcoholic
beverages, intoxicating drinks, tobacco and its byproducts and violence.

Section 15. Duty of Employer. Every employer shall comply with the duties provided for in
Articles 108 and 109 of Presidential Decree No. 603.

Section 16. Penalties. Any person who shall violate any provision of this Article shall suffer the
penalty of a fine of not less than One thousand pesos (P1,000) but not more than Ten thousand
pesos (P10,000) or imprisonment of not less than three (3) months but not more than three (3)
years, or both at the discretion of the court; Provided, That, in case of repeated violations of the
provisions of this Article, the offender's license to operate shall be revoked.
Section 17. Survival, Protection and Development. In addition to the rights guaranteed to
children under this Act and other existing laws, children of indigenous cultural communities shall be
entitled to protection, survival and development consistent with the customs and traditions of their
respective communities.

Section 18. System of and Access to Education. The Department of Education, Culture and
Sports shall develop and institute an alternative system of education for children of indigenous
cultural communities which culture-specific and relevant to the needs of and the existing situation in
their communities. The Department of Education, Culture and Sports shall also accredit and
support non-formal but functional indigenous educational programs conducted by non-government
organizations in said communities.

Section 19. Health and Nutrition. The delivery of basic social services in health and nutrition to
children of indigenous cultural communities shall be given priority by all government agencies
concerned. Hospitals and other health institution shall ensure that children of indigenous cultural
communities are given equal attention. In the provision of health and nutrition services to children
of indigenous cultural communities, indigenous health practices shall be respected and recognized.

Section 20. Discrimination. Children of indigenous cultural communities shall not be subjected
to any and all forms of discrimination.
Any person who discriminate against children of indigenous cultural communities shall suffer a
penalty of arresto mayor in its maximum period and a fine of not less than Five thousand pesos
(P5,000) more than Ten thousand pesos (P10,000).

Section 21. Participation. Indigenous cultural communities, through their duly-designated or

appointed representatives shall be involved in planning, decision-making implementation, and
evaluation of all government programs affecting children of indigenous cultural communities.
Indigenous institution shall also be recognized and respected.

Section 22. Children as Zones of Peace. Children are hereby declared as Zones of Peace. It
shall be the responsibility of the State and all other sectors concerned to resolve armed conflicts in
order to promote the goal of children as zones of peace. To attain this objective, the following
policies shall be observed.

(a) Children shall not be the object of attack and shall be entitled to special respect. They shall be
protected from any form of threat, assault, torture or other cruel, inhumane or degrading treatment;

(b) Children shall not be recruited to become members of the Armed Forces of the Philippines of its
civilian units or other armed groups, nor be allowed to take part in the fighting, or used as guides,
couriers, or spies;

(c) Delivery of basic social services such as education, primary health and emergency relief services
shall be kept unhampered;

(d) The safety and protection of those who provide services including those involved in fact-finding
missions from both government and non-government institutions shall be ensured. They shall not
be subjected to undue harassment in the performance of their work;

(e) Public infrastructure such as schools, hospitals and rural health units shall not be utilized for
military purposes such as command posts, barracks, detachments, and supply depots; and

(f) All appropriate steps shall be taken to facilitate the reunion of families temporarily separated due
to armed conflict.

Section 23. Evacuation of Children During Armed Conflict. Children shall be given priority
during evacuation as a result of armed conflict. Existing community organizations shall be tapped to
look after the safety and well-being of children during evacuation operations. Measures shall be
taken to ensure that children evacuated are accompanied by persons responsible for their safety and
well-being.

Section 24. Family Life and Temporary Shelter. Whenever possible, members of the same
family shall be housed in the same premises and given separate accommodation from other evacuees
and provided with facilities to lead a normal family life. In places of temporary shelter, expectant and
nursing mothers and children shall be given additional food in proportion to their physiological
needs. Whenever feasible, children shall be given opportunities for physical exercise, sports and
outdoor games.

Section 25. Rights of Children Arrested for Reasons Related to Armed Conflict. Any child
who has been arrested for reasons related to armed conflict, either as combatant, courier, guide or
spy is entitled to the following rights;

(a) Separate detention from adults except where families are accommodated as family units;

(b) Immediate free legal assistance;

(c) Immediate notice of such arrest to the parents or guardians of the child; and

(d) Release of the child on recognizance within twenty-four (24) hours to the custody of the
Department of Social Welfare and Development or any responsible member of the community as
determined by the court.

If after hearing the evidence in the proper proceedings the court should find that the aforesaid child
committed the acts charged against him, the court shall determine the imposable penalty, including
any civil liability chargeable against him. However, instead of pronouncing judgment of conviction,
the court shall suspend all further proceedings and shall commit such child to the custody or care of
the Department of Social Welfare and Development or to any training institution operated by the
Government, or duly-licensed agencies or any other responsible person, until he has had reached
eighteen (18) years of age or, for a shorter period as the court may deem proper, after considering
the reports and recommendations of the Department of Social Welfare and Development or the
agency or responsible individual under whose care he has been committed.
The aforesaid child shall subject to visitation and supervision by a representative of the Department
of Social Welfare and Development or any duly-licensed agency or such other officer as the court
may designate subject to such conditions as it may prescribe.

The aforesaid child whose sentence is suspended can appeal from the order of the court in the same
manner as appeals in criminal cases.

Section 26. Monitoring and Reporting of Children in Situations of Armed Conflict. The
chairman of the barangay affected by the armed conflict shall submit the names of children residing
in said barangay to the municipal social welfare and development officer within twenty-four (24)
hours from the occurrence of the armed conflict.

Section 27. Who May File a Complaint. Complaints on cases of unlawful acts committed
against the children as enumerated herein may be filed by the following:

(a) Offended party;

(b) Parents or guardians;

(c) Ascendant or collateral relative within the third degree of consanguinity;1awphi1@ITC

(d) Officer, social worker or representative of a licensed child-caring institution;

(e) Officer or social worker of the Department of Social Welfare and Development;

(f) Barangay chairman; or

(g) At least three (3) concerned responsible citizens where the violation occurred.

Section 28. Protective Custody of the Child. The offended party shall be immediately placed
under the protective custody of the Department of Social Welfare and Development pursuant to
Executive Order No. 56, series of 1986. In the regular performance of this function, the officer of
the Department of Social Welfare and Development shall be free from any administrative, civil or
criminal liability. Custody proceedings shall be in accordance with the provisions of Presidential
Decree No. 603.
Section 29. Confidentiality. At the instance of the offended party, his name may be withheld
from the public until the court acquires jurisdiction over the case.
It shall be unlawful for any editor, publisher, and reporter or columnist in case of printed materials,
announcer or producer in case of television and radio broadcasting, producer and director of the
film in case of the movie industry, to cause undue and sensationalized publicity of any case of
violation of this Act which results in the moral degradation and suffering of the offended
party.Lawphi1@alf

Section 30. Special Court Proceedings. Cases involving violations of this Act shall be heard in
the chambers of the judge of the Regional Trial Court duly designated as Juvenile and Domestic
Court.
Any provision of existing law to the contrary notwithstanding and with the exception of habeas
corpus, election cases, and cases involving detention prisoners and persons covered by Republic Act
No. 4908, all courts shall give preference to the hearing or disposition of cases involving violations
of this Act.

Section 31. Common Penal Provisions.

(a) The penalty provided under this Act shall be imposed in its maximum period if the offender has
been previously convicted under this Act;

(b) When the offender is a corporation, partnership or association, the officer or employee thereof
who is responsible for the violation of this Act shall suffer the penalty imposed in its maximum
period;

(c) The penalty provided herein shall be imposed in its maximum period when the perpetrator is an
ascendant, parent guardian, stepparent or collateral relative within the second degree of
consanguinity or affinity, or a manager or owner of an establishment which has no license to operate
or its license has expired or has been revoked;

(d) When the offender is a foreigner, he shall be deported immediately after service of sentence and
forever barred from entry to the country;
(e) The penalty provided for in this Act shall be imposed in its maximum period if the offender is a
public officer or employee: Provided, however, That if the penalty imposed is reclusion perpetua or
reclusion temporal, then the penalty of perpetual or temporary absolute disqualification shall also be
imposed: Provided, finally, That if the penalty imposed is prision correccional or arresto mayor, the
penalty of suspension shall also be imposed; and

(f) A fine to be determined by the court shall be imposed and administered as a cash fund by the
Department of Social Welfare and Development and disbursed for the rehabilitation of each child
victim, or any immediate member of his family if the latter is the perpetrator of the offense.

Section 32. Rules and Regulations. Unless otherwise provided in this Act, the Department of
Justice, in coordination with the Department of Social Welfare and Development, shall promulgate
rules and regulations of the effective implementation of this Act.
Such rules and regulations shall take effect upon their publication in two (2) national newspapers of
general circulation.

Section 33. Appropriations. The amount necessary to carry out the provisions of this Act is
hereby authorized to be appropriated in the General Appropriations Act of the year following its
enactment into law and thereafter.

Section 34. Separability Clause. If any provision of this Act is declared invalid or
unconstitutional, the remaining provisions not affected thereby shall continue in full force and
effect.
Section 35. Repealing Clause. All laws, decrees, or rules inconsistent with the provisions of this
Acts are hereby repealed or modified accordingly.

Section 36. Effectivity Clause. This Act shall take effect upon completion of its publication in at
least two (2) national newspapers of general circulation.

Approved: June 17, 1992.

PRESIDENTIAL DECREE No. 957

REGULATING THE SALE OF SUBDIVISION LOTS AND CONDOMINIUMS,

PROVIDING PENALTIES FOR VIOLATIONS THEREOF

Section 1. Title. This Decree shall be known as THE SUBDIVISION AND CONDOMINIUM
BUYERS' PROTECTIVE DECREE.

Section 2. Definition of Terms When used in this Decree, the following terms shall, unless the context
otherwise indicates, have the following respective meanings:

(a) Person. "Person" shall mean a natural or a juridical person. A juridical person refers to a business
firm whether a corporation, partnership, cooperative or associations or a single proprietorship.
(b) Sale or sell. "Sale" or "sell" shall include every disposition, or attempt to dispose, for a valuable
consideration, of a subdivision lot, including the building and other improvements thereof, if any, in
a subdivision project or a condominium unit in a condominium project. "Sale" and "sell" shall also
include a contract to sell, a contract of purchase and sale, an exchange, an attempt to sell, an option
of sale or purchase, a solicitation of a sale, or an offer to sell, directly or by an agent, or by a circular,
letter, advertisement or otherwise.
A privilege given to a member of a cooperative, corporation, partnership, or any association and/or
the issuance of a certificate or receipt evidencing or giving the right of participation in, or right to,
any land in consideration of payment of the membership fee or dues, shall be deemed a sale within
the meaning of this definition.

(c) Buy and purchase. The "buy" and "purchase" shall include any contract to buy, purchase, or
otherwise acquire for a valuable consideration a subdivision lot, including the building and other
improvements, if any, in a subdivision project or a condominium unit in a condominium project.

(d) Subdivision project. "Subdivision project" shall mean a tract or a parcel of land registered under
Act No. 496 which is partitioned primarily for residential purposes into individual lots with or
without improvements thereon, and offered to the public for sale, in cash or in installment terms. It
shall include all residential, commercial, industrial and recreational areas as well as open spaces and
other community and public areas in the project.

(e) Subdivision lot. "Subdivision lot" shall mean any of the lots, whether residential, commercial,
industrial, or recreational, in a subdivision project.

(f) Complex subdivision plan. "Complex subdivision plan" shall mean a subdivision plan of a
registered land wherein a street, passageway or open space is delineated on the plan.

(g) Condominium project. "Condominium project" shall mean the entire parcel of real property
divided or to be divided primarily for residential purposes into condominium units, including all
structures thereon.

(h) Condominium unit. "Condominium unit" shall mean a part of the condominium project
intended for any type of independent use or ownership, including one or more rooms or spaces
located in one or more floors (or part of parts of floors) in a building or buildings and such
accessories as may be appended thereto.

(i) Owner. "Owner" shall refer to the registered owner of the land subject of a subdivision or a
condominium project.

(j) Developer. "Developer" shall mean the person who develops or improves the subdivision project
or condominium project for and in behalf of the owner thereof.

(k) Dealer. "Dealer" shall mean any person directly engaged as principal in the business of buying,
selling or exchanging real estate whether on a full-time or part-time basis.

(l) Broker. "Broker" shall mean any person who, for commission or other compensation, undertakes
to sell or negotiate the sale of a real estate belonging to another.
(m) Salesman. "Salesman" shall refer to the person regularly employed by a broker to perform, for
and in his behalf, any or all functions of a real estate broker.
(n) Authority. "Authority" shall mean the National Housing Authority.

Section 3. National Housing Authority The National Housing Authority shall have exclusive jurisdiction to
regulate the real estate trade and business in accordance with the provisions of this Decree.

Section 4. Registration of Projects The registered owner of a parcel of land who wishes to convert the same into a
subdivision project shall submit his subdivision plan to the Authority which shall act upon and approve the same,
upon a finding that the plan complies with the Subdivision Standards' and Regulations enforceable at the time the
plan is submitted. The same procedure shall be followed in the case of a plan for a condominium
project except that, in addition, said Authority shall act upon and approve the plan with respect to
the building or buildings included in the condominium project in accordance with the National
Building Code (R.A. No. 6541). The subdivision plan, as so approved, shall then be submitted to the
Director of Lands for approval in accordance with the procedure prescribed in Section 44 of the
Land Registration Act (Act No. 496, as amended by R.A. No. 440): Provided, that it case of complex
subdivision plans, court approval shall no longer be required. The condominium plan as likewise so
approved, shall be submitted to the Register of Deeds of the province or city in which the property
lies and the same shall be acted upon subject to the conditions and in accordance with the procedure
prescribed in Section 4 of the Condominium Act (R.A. No. 4726).
The owner or the real estate dealer interested in the sale of lots or units, respectively, in such
subdivision project or condominium project shall register the project with the Authority by filing
therewith a sworn registration statement containing the following information:

(a) Name of the owner;

(b) The location of the owner's principal business office, and if the owner is a non-resident Filipino,
the name and address of his agent or representative in the Philippines is authorized to receive notice;

(c) The names and addresses of all the directors and officers of the business firm, if the owner be a
corporation, association, trust, or other entity, and of all the partners, if it be a partnership;

(d) The general character of the business actually transacted or to be transacted by the owner; and

(e) A statement of the capitalization of the owner, including the authorized and outstanding amounts
of its capital stock and the proportion thereof which is paid-up.

The following documents shall be attached to the registration statement:

(a) A copy of the subdivision plan or condominium plan as approved in accordance with the first
and second paragraphs of this section.

(b) A copy of any circular, prospectus, brochure, advertisement, letter, or communication to be used
for the public offering of the subdivision lots or condominium units;

(c) In case of a business firm, a balance sheet showing the amount and general character of its assets
and liabilities and a copy of its articles of incorporation or articles of partnership or association, as
the case may be, with all the amendments thereof and existing by-laws or instruments corresponding
thereto.

(d) A title to the property which is free from all liens and encumbrances: Provided, however, that in
case any subdivision lot or condominium unit is mortgaged, it is sufficient if the instrument of
mortgage contains a stipulation that the mortgagee shall release the mortgage on any subdivision lot
or condominium unit as soon as the full purchase price for the same is paid by the buyer.

The person filing the registration statement shall pay the registration fees prescribed therefor by the
Authority.

Thereupon, the Authority shall immediately cause to be published a notice of the filing of the
registration statement at the expense of the applicant-owner or dealer, in two newspapers general
circulation, one published in English and another in Pilipino, once a week for two consecutive
weeks, reciting that a registration statement for the sale of subdivision lots or condominium units
has been filed in the National Housing Authority; that the aforesaid registration statement, as well as
the papers attached thereto, are open to inspection during business hours by interested parties,
under such regulations as the Authority may impose; and that copies thereof shall be furnished to
any party upon payment of the proper fees.
The subdivision project of the condominium project shall be deemed registered upon completion of
the above publication requirement. The fact of such registration shall be evidenced by a registration
certificate to be issued to the applicant-owner or dealer.

Section 5. License to sell. Such owner or dealer to whom has been issued a registration certificate shall
not, however, be authorized to sell any subdivision lot or condominium unit in the registered project
unless he shall have first obtained a license to sell the project within two weeks from the registration
of such project.
The Authority, upon proper application therefor, shall issue to such owner or dealer of a registered
project a license to sell the project if, after an examination of the registration statement filed by said
owner or dealer and all the pertinent documents attached thereto, he is convinced that the owner or
dealer is of good repute, that his business is financially stable, and that the proposed sale of the
subdivision lots or condominium units to the public would not be fraudulent.

Section 6. Performance Bond. No license to sell subdivision lots or condominium units shall be issued
by the Authority under Section 5 of this Decree unless the owner or dealer shall have filed an
adequate performance bond approved by said Authority to guarantee the construction and
maintenance of the roads, gutters, drainage, sewerage, water system, lighting systems, and full
development of the subdivision project or the condominium project and the compliance by the
owner or dealer with the applicable laws and rules and regulations.

The performance bond shall be executed in favor of the Republic of the Philippines and shall
authorize the Authority to use the proceeds thereof for the purposes of its undertaking in case of
forfeiture as provided in this Decree.

Section 7. Exempt transactions. A license to sell and performance bond shall not be required in any of
the following transactions:

(a) Sale of a subdivision lot resulting from the partition of land among co-owners and co-heirs.
(b) Sale or transfer of a subdivision lot by the original purchaser thereof and any subsequent sale of
the same lot.

(c) Sale of a subdivision lot or a condominium unit by or for the account of a mortgagee in the
ordinary course of business when necessary to liquidate a bona fide debt.

Section 8. Suspension of license to sell. Upon verified complaint by a buyer of a subdivision lot or a
condominium unit in any interested party, the Authority may, in its discretion, immediately suspend
the owner's or dealer's license to sell pending investigation and hearing of the case as provided in
Section 13 hereof.

The Authority may motu proprio suspend the license to sell if, in its opinion, any information in the
registration statement filed by the owner or dealer is or has become misleading, incorrect, inadequate
or incomplete or the sale or offering for a sale of the subdivision or condominium project may work
or tend to work a fraud upon prospective buyers.

The suspension order may be lifted if, after notice and hearing, the Authority is convinced that the
registration statement is accurate or that any deficiency therein has been corrected or supplemented
or that the sale to the public of the subdivision or condominium project will neither be fraudulent
not result in fraud. It shall also be lifted upon dismissal of the complaint for lack of legal basis.

Until the final entry of an order of suspension, the suspension of the right to sell the project, though
binding upon all persons notified thereof, shall be deemed confidential unless it shall appear that the
order of suspension has in the meantime been violated.

Section 9. Revocation of registration certificate and license to sell. The Authority may, motu proprio or upon
verified complaint filed by a buyer of a subdivision lot or condominium unit, revoke the registration
of any subdivision project or condominium project and the license to sell any subdivision lot or
condominium unit in said project by issuing an order to this effect, with his findings in respect
thereto, if upon examination into the affairs of the owner or dealer during a hearing as provided for
in Section 14 hereof, if shall appear there is satisfactory evidence that the said owner or dealer:

(a) Is insolvent; or

(b) has violated any of the provisions of this Decree or any applicable rule or regulation of the
Authority, or any undertaking of his/its performance bond; or

(c) Has been or is engaged or is about to engage in fraudulent transactions; or

(d) Has made any misrepresentation in any prospectus, brochure, circular or other literature about
the subdivision project or condominium project that has been distributed to prospective buyers; or

(e) Is of bad business repute; or

(f) Does not conduct his business in accordance with law or sound business principles.
Where the owner or dealer is a partnership or corporation or an unincorporated association, it shall
be sufficient cause for cancellation of its registration certificate and its license to sell, if any member
of such partnership or any officer or director of such corporation or association has been guilty of
any act or omission which would be cause for refusing or revoking the registration of an individual
dealer, broker or salesman as provided in Section 11 hereof.

Section 10. Registers of subdivision lots and condominium units. A record of subdivision lots and
condominium units shall be kept in the Authority wherein shall be entered all orders of the
Authority affecting the condition or status thereof. The registers of subdivision lots and
condominium units shall be open to public inspection subject to such reasonable rules as the
Authority may prescribe.

Section 11. Registration of dealers, brokers and salesmen. No real estate dealer, broker or salesman shall
engage in the business of selling subdivision lots or condominium units unless he has registered
himself with the Authority in accordance with the provisions of this section.

If the Authority shall find that the applicant is of good repute and has complied with the applicable
rules of the Authority, including the payment of the prescribed fee, he shall register such applicant as
a dealer, broker or salesman upon filing a bond, or other security in lieu thereof, in such sum as may
be fixed by the Authority conditioned upon his faithful compliance with the provisions of this
Decree: Provided, that the registration of a salesman shall cease upon the termination of his
employment with a dealer or broker.

Every registration under this section shall expire on the thirty-first day of December of each year.
Renewal of registration for the succeeding year shall be granted upon written application therefor
made not less than thirty nor more than sixty days before the first day of the ensuing year and upon
payment of the prescribed fee, without the necessity of filing further statements or information,
unless specifically required by the Authority. All applications filed beyond said period shall be
treated as original applications.

The names and addresses of all persons registered as dealers, brokers, or salesmen shall be recorded
in a Register of Brokers, Dealers and Salesmen kept in the Authority which shall be open to public
inspection.

Section 12. Revocation of registration as dealers, brokers or salesmen. Registration under the preceding
section may be refused or any registration granted thereunder, revoked by the Authority if, after
reasonable notice and hearing, it shall determine that such applicant or registrant:

1. Has violated any provision of this Decree or any rule or regulation made hereunder; or
2. Has made a material false statement in his application for registration; or
3. Has been guilty of a fraudulent act in connection with any sale of a subdivision lot or
condominium unit; or
4. Has demonstrated his unworthiness to transact the business of dealer, broker, or salesman, as the
case may be.

In case of charges against a salesman, notice thereof shall also be given the broker or dealer
employing such salesman.
Pending hearing of the case, the Authority shall have the power to order the suspension of the
dealer's, broker's, of salesman's registration; provided, that such order shall state the cause for the
suspension.

The suspension or revocation of the registration of a dealer or broker shall carry with it all the
suspension or revocation of the registrations of all his salesmen.

Section 13. Hearing. In the hearing for determining the existence of any ground or grounds for the
suspension and/or revocation of registration certificate and license to sell as provided in Section 8
and 9 hereof, the following shall be complied with:

(a) Notice. No such hearing shall proceed unless the respondent is furnished with a copy of the
complaint against him or is notified in writing of the purpose of such hearing.

(b) Venue. The hearing may be held before the officer or officers designated by the Authority on the
date and place specified in the notice.

(c) Nature of proceeding. The proceedings shall be non-litigious and summary in nature without
regard to legal technicalities obtaining in courts of law. The Rules of court shall not apply in said
hearing except by analogy or in a suppletory character and whenever practicable and convenient.

(d) Power incidental to the hearing. For the purpose of the hearing or other proceeding under this
Decree, the officer or officers designated to hear the complaint shall have the power to administer
oaths, subpoena witnesses, conduct ocular inspections, take depositions, and require the production
of any book, paper, correspondence, memorandum, or other record which are deemed relevant or
material to the inquiry.

Section 14. Contempt.

(a) Direct contempt. The officer or officers designated by the Authority to hear the complaint may
summarily adjudge in direct contempt any person guilty of misbehavior in the presence of or so near
the said hearing officials as to obstruct or interrupt the proceedings before the same or of refusal to
be sworn or to answer as a witness or to subscribe an affidavit or deposition when lawfully required
to do so. The person found guilty of direct contempt under this section shall be punished by a fine
not exceeding Fifty (P50.00) Pesos or imprisonment not exceeding five (5) days, or both.

(b) Indirect contempt. The officer or officers designated to hear the complaint may also adjudge any
person in indirect contempt on grounds and in the manner prescribed in Rule 71 of the Revised
Rules of Court.

Section 15. Decision. The case shall be decided within thirty (30) days from the time the same is
submitted for decision. The Decision may order the revocation of the registration of the subdivision
or condominium project, the suspension, cancellation, or revocation of the license to sell and/or
forfeiture, in whole or in part, of the performance bond mentioned in Section 6 hereof. In case
forfeiture of the bond is ordered, the Decision may direct the provincial or city engineer to
undertake or cause the construction of roads and of other requirements for the subdivision or
condominium as stipulated in the bond, chargeable to the amount forfeited. Such decision shall be
immediately executory and shall become final after the lapse of 15 days from the date of receipt of
the Decision.

Section 16. Cease and Desist Order. Whenever it shall appear to the Authority that any person is
engaged or about to engage in any act or practice which constitutes or will constitute a violation of
the provisions of this Decree, or of any rule or regulation thereunder, it may, upon due notice and
hearing as provided in Section 13 hereof, issue a cease and desist order to enjoin such act or
practices.

Section 17. Registration. All contracts to sell, deeds of sale and other similar instruments relative to
the sale or conveyance of the subdivision lots and condominium units, whether or not the purchase
price is paid in full, shall be registered by the seller in the Office of the Register of Deeds of the
province or city where the property is situated.

Whenever a subdivision plan duly approved in accordance with Section 4 hereof, together with the
corresponding owner's duplicate certificate of title, is presented to the Register of Deeds for
registration, the Register of Deeds shall register the same in accordance with the provisions of the
Land Registration Act, as amended: Provided, however, that it there is a street, passageway or
required open space delineated on a complex subdivision plan hereafter approved and as defined in
this Decree, the Register of Deeds shall annotate on the new certificate of title covering the street,
passageway or open space, a memorandum to the effect that except by way of donation in favor of a
city or municipality, no portion of any street, passageway, or open space so delineated on the plan
shall be closed or otherwise disposed of by the registered owner without the requisite approval as
provided under Section 22 of this Decree.

Section 18. Mortgages. No mortgage on any unit or lot shall be made by the owner or developer
without prior written approval of the Authority. Such approval shall not be granted unless it is
shown that the proceeds of the mortgage loan shall be used for the development of the
condominium or subdivision project and effective measures have been provided to ensure such
utilization. The loan value of each lot or unit covered by the mortgage shall be determined and the
buyer thereof, if any, shall be notified before the release of the loan. The buyer may, at his option,
pay his installment for the lot or unit directly to the mortgagee who shall apply the payments to the
corresponding mortgage indebtedness secured by the particular lot or unit being paid for, with a
view to enabling said buyer to obtain title over the lot or unit promptly after full payment thereto;

Section 19. Advertisements. Advertisements that may be made by the owner or developer through
newspaper, radio, television, leaflets, circulars or any other form about the subdivision or the
condominium or its operations or activities must reflect the real facts and must be presented in such
manner that will not tend to mislead or deceive the public.
The owner or developer shall answerable and liable for the facilities, improvements, infrastructures
or other forms of development represented or promised in brochures, advertisements and other
sales propaganda disseminated by the owner or developer or his agents and the same shall form part
of the sales warranties enforceable against said owner or developer, jointly and severally. Failure to
comply with these warranties shall also be punishable in accordance with the penalties provided for
in this Decree.

Section 20. Time of Completion. Every owner or developer shall construct and provide the facilities,
improvements, infrastructures and other forms of development, including water supply and lighting
facilities, which are offered and indicated in the approved subdivision or condominium plans,
brochures, prospectus, printed matters, letters or in any form of advertisement, within one year from
the date of the issuance of the license for the subdivision or condominium project or such other
period of time as may be fixed by the Authority.

Section 21. Sales Prior to Decree. In cases of subdivision lots or condominium units sold or disposed
of prior to the effectivity of this Decree, it shall be incumbent upon the owner or developer of the
subdivision or condominium project to complete compliance with his or its obligations as provided
in the preceding section within two years from the date of this Decree unless otherwise extended by
the Authority or unless an adequate performance bond is filed in accordance with Section 6 hereof.

Failure of the owner or developer to comply with the obligations under this and the preceding
provisions shall constitute a violation punishable under Sections 38 and 39 of this Decree.

Section 22. Alteration of Plans. No owner or developer shall change or alter the roads, open spaces,
infrastructures, facilities for public use and/or other form of subdivision development as contained
in the approved subdivision plan and/or represented in its advertisements, without the permission
of the Authority and the written conformity or consent of the duly organized homeowners
association, or in the absence of the latter, by the majority of the lot buyers in the subdivision.

Section 23. Non-Forfeiture of Payments. No installment payment made by a buyer in a subdivision or

condominium project for the lot or unit he contracted to buy shall be forfeited in favor of the owner
or developer when the buyer, after due notice to the owner or developer, desists from further
payment due to the failure of the owner or developer to develop the subdivision or condominium
project according to the approved plans and within the time limit for complying with the same. Such
buyer may, at his option, be reimbursed the total amount paid including amortization interests but
excluding delinquency interests, with interest thereon at the legal rate.

Section 24. Failure to pay installments. The rights of the buyer in the event of this failure to pay the
installments due for reasons other than the failure of the owner or developer to develop the project
shall be governed by Republic Act No. 6552.
Where the transaction or contract was entered into prior to the effectivity of Republic Act No. 6552
on August 26, 1972, the defaulting buyer shall be entitled to the corresponding refund based on the
installments paid after the effectivity of the law in the absence of any provision in the contract to the
contrary.

Section 25. Issuance of Title. The owner or developer shall deliver the title of the lot or unit to the
buyer upon full payment of the lot or unit. No fee, except those required for the registration of the
deed of sale in the Registry of Deeds, shall be collected for the issuance of such title. In the event a
mortgage over the lot or unit is outstanding at the time of the issuance of the title to the buyer, the
owner or developer shall redeem the mortgage or the corresponding portion thereof within six
months from such issuance in order that the title over any fully paid lot or unit may be secured and
delivered to the buyer in accordance herewith.

Section 26. Realty Tax. Real estate tax and assessment on a lot or unit shall de paid by the owner or
developer without recourse to the buyer for as long as the title has not passed the buyer; Provided,
however, that if the buyer has actually taken possession of and occupied the lot or unit, he shall be
liable to the owner or developer for such tax and assessment effective the year following such taking
of possession and occupancy.

Section 27. Other Charges. No owner or developer shall levy upon any lot or buyer a fee for an
alleged community benefit. Fees to finance services for common comfort, security and sanitation
may be collected only by a properly organized homeowners association and only with the consent of
a majority of the lot or unit buyers actually residing in the subdivision or condominium project.

Section 28. Access to Public Offices in the Subdivisions. No owner or developer shall deny any person
free access to any government office or public establishment located within the subdivision or which
may be reached only by passing through the subdivision.

Section 29. Right of Way to Public Road. The owner or developer of a subdivision without access to
any existing public road or street must secure a right of way to a public road or street and such right
of way must be developed and maintained according to the requirement of the government and
authorities concerned.

Section 30. Organization of Homeowners Association. The owner or developer of a subdivision project or
condominium project shall initiate the organization of a homeowners association among the buyers
and residents of the projects for the purpose of promoting and protecting their mutual interest and
assist in their community development.

Section 31. Donations of roads and open spaces to local government. The registered owner or developer of
the subdivision or condominium project, upon completion of the development of said project may,
at his option, convey by way of donation the roads and open spaces found within the project to the
city or municipality wherein the project is located. Upon acceptance of the donation by the city or
municipality concerned, no portion of the area donated shall thereafter be converted to any other
purpose or purposes unless after hearing, the proposed conversion is approved by the Authority.

Section 32. Phases of Subdivision. For purposes of complying with the provisions of this Decree, the
owner or developer may divide the development and sale of the subdivision into phases, each phase
to cover not less than ten hectares. The requirement imposed by this Decree on the subdivision as a
whole shall be deemed imposed on each phase.

Section 33. Nullity of waivers. Any condition, stipulation, or provision in contract of sale whereby any
person waives compliance with any provision of this Decree or of any rule or regulation issued
thereunder shall be void.

Section 34. Visitorial powers. This Authority, through its duly authorized representative may, at any
time, make an examination into the business affairs, administration, and condition of any person,
corporation, partnership, cooperative, or association engaged in the business of selling subdivision
lots and condominium units. For this purpose, the official authorized so to do shall have the
authority to examine under oath the directors, officers, stockholders or members of any corporation,
partnership, association, cooperative or other persons associated or connected with the business and
to issue subpoena or subpoena duces tecum in relation to any investigation that may arise therefrom.
The Authority may also authorize the Provincial, City or Municipal Engineer, as the case may be, to
conduct an ocular inspection of the project to determine whether the development of said project
conforms to the standards and specifications prescribed by the government.

The books, papers, letters, and other documents belonging to the person or entities herein
mentioned shall be open to inspection by the Authority or its duly authorized representative.

Section 35. Take-over Development. The Authority, may take over or cause the development and
completion of the subdivision or condominium project at the expenses of the owner or developer,
jointly and severally, in cases where the owner or developer has refused or failed to develop or
complete the development of the project as provided for in this Decree.

The Authority may, after such take-over, demand, collect and receive from the buyers the
installment payments due on the lots, which shall be utilized for the development of the subdivision.

Section 36. Rules and Regulations. The Authority shall issue the necessary standards, rules and
regulations for the effective implementation of the provisions of this Decree. Such standards, rules
and regulations shall take effect immediately after their publication three times a week for two
consecutive weeks in any newspaper of general circulation.

Section 37. Deputization of law enforcement agencies. The Authority may deputize the Philippine
Constabulary or any law enforcement agency in the execution of its final orders, rulings or decisions.

Section 38. Administrative Fines. The Authority may prescribe and impose fines not exceeding ten
thousand pesos for violations of the provisions of this Decree or of any rule or regulation
thereunder. Fines shall be payable to the Authority and enforceable through writs of execution in
accordance with the provisions of the Rules of Court.

Section 39. Penalties. Any person who shall violate any of the provisions of this Decree and/or any
rule or regulation that may be issued pursuant to this Decree shall, upon conviction, be punished by
a fine of not more than twenty thousand (P20,000.00) pesos and/or imprisonment of not more than
ten years: Provided, That in the case of corporations, partnership, cooperatives, or associations, the
President, Manager or Administrator or the person who has charge of the administration of the
business shall be criminally responsible for any violation of this Decree and/or the rules and
regulations promulgated pursuant thereto.

Section 40. Liability of controlling persons. Every person who directly or indirectly controls any person
liable under any provision of this Decree or of any rule or regulation issued thereunder shall be liable
jointly and severally with and to the same extent as such controlled person unless the controlling
person acted in good faith and did not directly or indirectly induce the act or acts constituting the
violation or cause of action.

Section 41. Other remedies. The rights and remedies provided in this Decree shall be in addition to
any and all other rights and remedies that may be available under existing laws.

Section 42. Repealing clause. All laws, executive orders, rules and regulations or part thereof
inconsistent with the provisions of this Decree are hereby repealed or modified accordingly.
Section 43. Effectivity. This Decree shall take effect upon its approval.

Done in the City of Manila, this 12th day of July, in the year of Our Lord, nineteen hundred and
seventy-six.

REPUBLIC ACT NO. 4726

AN ACT TO DEFINE CONDOMINIUM, ESTABLISH REQUIREMENTS FOR ITS

CREATION, AND GOVERN ITS INCIDENTS.

Sec. 1. The short title of this Act shall be "The Condominium Act".

Sec. 2. A condominium is an interest in real property consisting of separate interest in a unit in a

residential, industrial or commercial building and an undivided interest in common, directly or
indirectly, in the land on which it is located and in other common areas of the building. A
condominium may include, in addition, a separate interest in other portions of such real property.
Title to the common areas, including the land, or the appurtenant interests in such areas, may be
held by a corporation specially formed for the purpose (hereinafter known as the "condominium
corporation") in which the holders of separate interest shall automatically be members or
shareholders, to the exclusion of others, in proportion to the appurtenant interest of their respective
units in the common areas.

The real right in condominium may be ownership or any other interest in real property recognized
by law, on property in the Civil Code and other pertinent laws.

Sec. 3. As used in this Act, unless the context otherwise requires:

(a) "Condominium" means a condominium as defined in the next preceding section.

(b) "Unit" means a part of the condominium project intended for any type of independent use or
ownership, including one or more rooms or spaces located in one or more floors (or part or parts of
floors) in a building or buildings and such accessories as may be appended thereto.

(c) "Project" means the entire parcel of real property divided or to be divided in condominiums,
including all structures thereon,

(d) "Common areas" means the entire project excepting all units separately granted or held or
reserved.

(e) "To divide" real property means to divide the ownership thereof or other interest therein by
conveying one or more condominiums therein but less than the whole thereof.

Sec. 4. The provisions of this Act shall apply to property divided or to be divided into
condominiums only if there shall be recorded in the Register of Deeds of the province or city in
which the property lies and duly annotated in the corresponding certificate of title of the land, if the
latter had been patented or registered under either the Land Registration or Cadastral Acts, an
enabling or master deed which shall contain, among others, the following:

(a) Description of the land on which the building or buildings and improvements are or are to be
located;

(b) Description of the building or buildings, stating the number of stories and basements, the
number of units and their accessories, if any;

(c) Description of the common areas and facilities;

(d) A statement of the exact nature of the interest acquired or to be acquired by the purchaser in the
separate units and in the common areas of the condominium project.
Where title to or the appurtenant interests in the common areas is or is to be held by a
condominium corporation, a statement to this effect shall be included;

(e) Statement of the purposes for which the building or buildings and each of the units are intended
or restricted as to use;

(f) A certificate of the registered owner of the property, if he is other than those executing the
master deed, as well as of all registered holders of any lien or encumbrance on the property, that
they consent to the registration of the deed;

(g) The following plans shall be appended to the deed as integral parts thereof:

(1) A survey plan of the land included in the project, unless a survey plan of the same
property had previously bee filed in said office;

(2) A diagrammatic floor plan of the building or buildings in the project, in sufficient detail
to identify each unit, its relative location and approximate dimensions;

(h) Any reasonable restriction not contrary to law, morals or public policy regarding the right of any
condominium owner to alienate or dispose of his condominium.

The enabling or master deed may be amended or revoked upon registration of an instrument
executed by the registered owner or owners of the property and consented to by all registered
holders of any lien or encumbrance on the land or building or portion thereof. The term "registered
owner" shall include the registered owners of condominiums in the project. Until registration of a
revocation, the provisions of this Act shall continue to apply to such property.

Sec. 5. Any transfer or conveyance of a unit or an apartment, office or store or other space therein,
shall include the transfer or conveyance of the undivided interests in the common areas or, in a
proper case, the membership or shareholdings in the condominium corporation: Provided, however,
That where the common areas in the condominium project are owned by the owners of separate
units as co-owners thereof, no condominium unit therein shall be conveyed or transferred to
persons other than Filipino citizens, or corporations at least sixty percent of the capital stock of
which belong to Filipino citizens, except in cases of hereditary succession. Where the common areas
in a condominium project are held by a corporation, no transfer or conveyance of a unit shall be
valid if the concomitant transfer of the appurtenant membership or stockholding in the corporation
will cause the alien interest in such corporation to exceed the limits imposed by existing laws.

Sec. 6. Unless otherwise expressly provided in the enabling or master deed or the declaration of
restrictions, the incidents of a condominium grant are as follows:

(a) The boundary of the unit granted are the interior surfaces of the perimeter walls, floors, ceilings,
windows and doors thereof. The following are not part of the unit bearing walls, columns, floors,
roofs, foundations and other common structural elements of the building; lobbies, stairways,
hallways, and other areas of common use, elevator equipment and shafts, central heating, central
refrigeration and central air-conditioning equipment, reservoirs, tanks, pumps and other central
services and facilities, pipes, ducts, flues, chutes, conduits, wires and other utility installations,
wherever located, except the outlets thereof when located within the unit.

(b) There shall pass with the unit, as an appurtenance thereof, an exclusive easement for the use of
the air space encompassed by the boundaries of the unit as it exists at any particular time and as the
unit may lawfully be altered or reconstructed from time to time. Such easement shall be
automatically terminated in any air space upon destruction of the unit as to render it untenantable.

(c) Unless otherwise, provided, the common areas are held in common by the holders of units, in
equal shares, one for each unit.

(d) A non-exclusive easement for ingress, egress and support through the common areas is
appurtenant to each unit and the common areas are subject to such easements.

(e) Each condominium owner shall have the exclusive right to paint, repaint, tile, wax, paper or
otherwise refinish and decorate the inner surfaces of the walls, ceilings, floors, windows and doors
bounding his own unit.

(f) Each condominium owner shall have the exclusive right to mortgage, pledge or encumber his
condominium and to have the same appraised independently of the other condominiums but any
obligation incurred by such condominium owner is personal to him.
(g) Each condominium owner has also the absolute right to sell or dispose of his condominium
unless the master deed contains a requirement that the property be first offered to the condominium
owners within a reasonable period of time before the same is offered to outside parties;

Sec. 7. Except as provided in the following section, the common areas shall remain undivided, and
there shall be no judicial partition thereof.

Sec. 8. Where several persons own condominiums in a condominium project, an action may be
brought by one or more such persons for partition thereof by sale of the entire project, as if the
owners of all of the condominiums in such project were co-owners of the entire project in the same
proportion as their interests in the common areas:Provided, however, That a partition shall be made
only upon a showing:

(a) That three years after damage or destruction to the project which renders material part thereof
unit for its use prior thereto, the project has not been rebuilt or repaired substantially to its state
prior to its damage or destruction, or
(b) That damage or destruction to the project has rendered one-half or more of the units therein
untenantable and that condominium owners holding in aggregate more than thirty percent interest
in the common areas are opposed to repair or restoration of the project; or

(c) That the project has been in existence in excess of fifty years, that it is obsolete and uneconomic,
and that condominium owners holding in aggregate more than fifty percent interest in the common
areas are opposed to repair or restoration or remodeling or modernizing of the project; or

(d) That the project or a material part thereof has been condemned or expropriated and that the
project is no longer viable, or that the condominium owners holding in aggregate more than seventy
percent interest in the common areas are opposed to continuation of the condominium regime after
expropriation or condemnation of a material portion thereof; or

(e) That the conditions for such partition by sale set forth in the declaration of restrictions, duly
registered in accordance with the terms of this Act, have been met.

Sec. 9. The owner of a project shall, prior to the conveyance of any condominium therein, register a
declaration of restrictions relating to such project, which restrictions shall constitute a lien upon each
condominium in the project, and shall insure to and bind all condominium owners in the project.
Such liens, unless otherwise provided, may be enforced by any condominium owner in the project
or by the management body of such project. The Register of Deeds shall enter and annotate the
declaration of restrictions upon the certificate of title covering the land included within the project,
if the land is patented or registered under the Land Registration or Cadastral Acts.

The declaration of restrictions shall provide for the management of the project by anyone of the
following management bodies: a condominium corporation, an association of the condominium
owners, a board of governors elected by condominium owners, or a management agent elected by
the owners or by the board named in the declaration. It shall also provide for voting majorities
quorums, notices, meeting date, and other rules governing such body or bodies.

Such declaration of restrictions, among other things, may also provide:

(a) As to any such management body;

(1) For the powers thereof, including power to enforce the provisions of the declarations of
restrictions;

(2) For maintenance of insurance policies, insuring condominium owners against loss by fire,
casualty, liability, workmen's compensation and other insurable risks, and for bonding of the
members of any management body;

(3) Provisions for maintenance, utility, gardening and other services benefiting the common
areas, for the employment of personnel necessary for the operation of the building, and legal,
accounting and other professional and technical services;

(4) For purchase of materials, supplies and the like needed by the common areas;
 (5) For payment of taxes and special assessments which would be a lien upon the entire
project or common areas, and for discharge of any lien or encumbrance levied against the entire
project or the common areas;

(6) For reconstruction of any portion or portions of any damage to or destruction of the
project;

(7) The manner for delegation of its powers;

(8) For entry by its officers and agents into any unit when necessary in connection with the
maintenance or construction for which such body is responsible;

(9) For a power of attorney to the management body to sell the entire project for the benefit
of all of the owners thereof when partition of the project may be authorized under Section 8 of this
Act, which said power shall be binding upon all of the condominium owners regardless of whether
they assume the obligations of the restrictions or not.

(b) The manner and procedure for amending such restrictions: Provided, That the vote of not less
than a majority in interest of the owners is obtained.

(c) For independent audit of the accounts of the management body;

(d) For reasonable assessments to meet authorized expenditures, each condominium unit to be
assessed separately for its share of such expenses in proportion (unless otherwise provided) to its
owners fractional interest in any common areas;

(e) For the subordination of the liens securing such assessments to other liens either generally or
specifically described;
(f) For conditions, other than those provided for in Sections eight and thirteen of this Act, upon
which partition of the project and dissolution of the condominium corporation may be made. Such
right to partition or dissolution may be conditioned upon failure of the condominium owners to
rebuild within a certain period or upon specified inadequacy of insurance proceeds, or upon
specified percentage of damage to the building, or upon a decision of an arbitrator, or upon any
other reasonable condition.

Sec. 10. Whenever the common areas in a condominium project are held by a condominium
corporation, such corporation shall constitute the management body of the project. The corporate
purposes of such a corporation shall be limited to the holding of the common areas, either in
ownership or any other interest in real property recognized by law, to the management of the
project, and to such other purposes as may be necessary, incidental or convenient to the
accomplishment of said purposes. The articles of incorporation or by-laws of the corporation shall
not contain any provision contrary to or inconsistent with the provisions of this Act, the enabling or
master deed, or the declaration of restrictions of the project. Membership in a condominium
corporation, regardless of whether it is a stock or non-stock corporation, shall not be transferable
separately from the condominium unit of which it is an appurtenance. When a member or
stockholder ceases to own a unit in the project in which the condominium corporation owns or
holds the common areas, he shall automatically cease to be a member or stockholder of the
condominium corporation.
Sec. 11. The term of a condominium corporation shall be co-terminus with the duration of the
condominium project, the provisions of the Corporation Law to the contrary notwithstanding.

Sec. 12. In case of involuntary dissolution of a condominium corporation for any of the causes
provided by law, the common areas owned or held by the corporation shall, by way of liquidation,
be transferred pro-indiviso and in proportion to their interest in the corporation to the members or
stockholders thereof, subject to the superior rights of the corporation creditors. Such transfer or
conveyance shall be deemed to be a full liquidation of the interest of such members or stockholders
in the corporation. After such transfer or conveyance, the provisions of this Act governing
undivided co-ownership of, or undivided interest in, the common areas in condominium projects
shall fully apply.
Sec. 13. Until the enabling or the master deed of the project in which the condominium
corporation owns or holds the common area is revoked, the corporation shall not be voluntarily
dissolved through an action for dissolution under Rule 104 of the Rules of Court except upon a
showing:

(a) That three years after damage or destruction to the project in which the corporation owns or
holds the common areas, which damage or destruction renders a material part thereof unfit for its
use prior thereto, the project has not been rebuilt or repaired substantially to its state prior to its
damage or destruction; or

(b) That damage or destruction to the project has rendered one-half or more of the units therein
untenantable and that more than thirty percent of the members of the corporation, if non-stock, or
the shareholders representing more than thirty percent of the capital stock entitled to vote, if a stock
corporation, are opposed to the repair or reconstruction of the project, or
(c) That the project has been in existence in excess of fifty years, that it is obsolete and
uneconomical, and that more than fifty percent of the members of the corporation, if non-stock, or
the stockholders representing more than fifty percent of the capital stock entitled to vote, if a stock
corporation, are opposed to the repair or restoration or remodeling or modernizing of the project;
or

(d) That the project or a material part thereof has been condemned or expropriated and that the
project is no longer viable, or that the members holding in aggregate more than seventy percent
interest in the corporation, if non-stock, or the stockholders representing more than seventy percent
of the capital stock entitled to vote, if a stock corporation, are opposed to the continuation of the
condominium regime after expropriation or condemnation of a material portion thereof; or

(e) That the conditions for such a dissolution set forth in the declaration of restrictions of the
project in which the corporation owns of holds the common areas, have been met.

Sec. 14. The condominium corporation may also be dissolved by the affirmative vote of all the
stockholders or members thereof at a general or special meeting duly called for the purpose: Provided,
That all the requirements of Section sixty-two of the Corporation Law are complied with.

Sec. 15. Unless otherwise provided for in the declaration of restrictions upon voluntary dissolution
of a condominium corporation in accordance with the provisions of Sections thirteen and fourteen
of this Act, the corporation shall be deemed to hold a power of attorney from all the members or
stockholders to sell and dispose of their separate interests in the project and liquidation of the
corporation shall be effected by a sale of the entire project as if the corporation owned the whole
thereof, subject to the rights of the corporate and of individual condominium creditors.

Sec. 16. A condominium corporation shall not, during its existence, sell, exchange, lease or otherwise
dispose of the common areas owned or held by it in the condominium project unless authorized by
the affirmative vote of all the stockholders or members.

Sec. 17. Any provision of the Corporation Law to the contrary notwithstanding, the by-laws of a
condominium corporation shall provide that a stockholder or member shall not be entitled to
demand payment of his shares or interest in those cases where such right is granted under the
Corporation Law unless he consents to sell his separate interest in the project to the corporation or
to any purchaser of the corporation's choice who shall also buy from the corporation the dissenting
member or stockholder's interest. In case of disagreement as to price, the procedure set forth in the
appropriate provision of the Corporation Law for valuation of shares shall be followed. The
corporation shall have two years within which to pay for the shares or furnish a purchaser of its
choice from the time of award. All expenses incurred in the liquidation of the interest of the
dissenting member or stockholder shall be borne by him.

Sec. 18. Upon registration of an instrument conveying a condominium, the Register of Deeds shall,
upon payment of the proper fees, enter and annotate the conveyance on the certificate of title
covering the land included within the project and the transferee shall be entitled to the issuance of a
"condominium owner's" copy of the pertinent portion of such certificate of title. Said
"condominium owner's" copy need not reproduce the ownership status or series of transactions in
force or annotated with respect to other condominiums in the project. A copy of the description of
the land, a brief description of the condominium conveyed, name and personal circumstances of the
condominium owner would be sufficient for purposes of the "condominium owner's" copy of the
certificate of title. No conveyance of condominiums or part thereof, subsequent to the original
conveyance thereof from the owner of the project, shall be registered unless accompanied by a
certificate of the management body of the project that such conveyance is in accordance with the
provisions of the declaration of restrictions of such project.

In cases of condominium projects registered under the provisions of the Spanish Mortgage Law or
Act 3344, as amended, the registration of the deed of conveyance of a condominium shall be
sufficient if the Register of Deeds shall keep the original or signed copy thereof, together with the
certificate of the management body of the project, and return a copy of the deed of conveyance to
the condominium owner duly acknowledge and stamped by the Register of Deeds in the same
manner as in the case of registration of conveyances of real property under said laws.

Sec. 19. Where the enabling or master deed provides that the land included within a condominium
project are to be owned in common by the condominium owners therein, the Register of Deeds
may, at the request of all the condominium owners and upon surrender of all their "condominium
owner's" copies, cancel the certificates of title of the property and issue a new one in the name of
said condominium owners as pro-indiviso co-owners thereof.

Sec. 20. An assessment upon any condominium made in accordance with a duly registered
declaration of restrictions shall be an obligation of the owner thereof at the time the assessment is
made. The amount of any such assessment plus any other charges thereon, such as interest, costs
(including attorney's fees) and penalties, as such may be provided for in the declaration of
restrictions, shall be and become a lien upon the condominium assessed when the management
body causes a notice of assessment to be registered with the Register of Deeds of the city or
province where such condominium project is located. The notice shall state the amount of such
assessment and such other charges thereon a may be authorized by the declaration of restrictions, a
description of the condominium, unit against which same has been assessed, and the name of the
registered owner thereof. Such notice shall be signed by an authorized representative of the
management body or as otherwise provided in the declaration of restrictions. Upon payment of said
assessment and charges or other satisfaction thereof, the management body shall cause to be
registered a release of the lien.

Such lien shall be superior to all other liens registered subsequent to the registration of said notice of
assessment except real property tax liens and except that the declaration of restrictions may provide
for the subordination thereof to any other liens and encumbrances.
Such liens may be enforced in the same manner provided for by law for the judicial or extra-judicial
foreclosure of mortgages of real property. Unless otherwise provided for in the declaration of
restrictions, the management body shall have power to bid at foreclosure sale. The condominium
owner shall have the same right of redemption as in cases of judicial or extra-judicial foreclosure of
mortgages.
Sec. 21. No labor performed or services or materials furnished with the consent of or at the request
of a condominium owner or his agent or his contractor or subcontractor, shall be the basis of a lien
against the condominium of any other condominium owner, unless such other owners have
expressly consented to or requested the performance of such labor or furnishing of such materials
or services. Such express consent shall be deemed to have been given by the owner of any
condominium in the case of emergency repairs of his condominium unit. Labor performed or
services or materials furnished for the common areas, if duly authorized by the management body
provided for in a declaration of restrictions governing the property, shall be deemed to be
performed or furnished with the express consent of each condominium owner. The owner of any
condominium may remove his condominium from a lien against two or more condominiums or any
part thereof by payment to the holder of the lien of the fraction of the total sum secured by such
lien which is attributable to his condominium unit.

Sec. 22. Unless otherwise provided for by the declaration of restrictions, the management body,
provided for herein, may acquire and hold, for the benefit of the condominium owners, tangible and
intangible personal property and may dispose of the same by sale or otherwise; and the beneficial
interest in such personal property shall be owned by the condominium owners in the same
proportion as their respective interests in the common areas. A transfer of a condominium shall
transfer to the transferee ownership of the transferor's beneficial interest in such personal property.

Sec. 23. Where, in an action for partition of a condominium project or for the dissolution of
condominium corporation on the ground that the project or a material part thereof has been
condemned or expropriated, the Court finds that the conditions provided for in this Act or in the
declaration of restrictions have not been met, the Court may decree a reorganization of the project,
declaring which portion or portions of the project shall continue as a condominium project, the
owners thereof, and the respective rights of said remaining owners and the just compensation, if
any, that a condominium owner may be entitled to due to deprivation of his property. Upon receipt
of a copy of the decree, the Register of Deeds shall enter and annotate the same on the pertinent
certificate of title.
Sec. 24. Any deed, declaration or plan for a condominium project shall be liberally construed to
facilitate the operation of the project, and its provisions shall be presumed to be independent and
severable.

Sec. 25. Whenever real property has been divided into condominiums, each condominium separately
owned shall be separately assessed, for purposes of real property taxation and other tax purposes to
the owners thereof and the tax on each such condominium shall constitute a lien solely thereon.

Sec. 26. All Acts or parts of Acts in conflict or inconsistent with this Act are hereby amended insofar
as condominium and its incidents are concerned.
Sec. 27. This Act shall take effect upon its approval.

Approved: June 18, 1966

ACT NO. 3135

AN ACT TO REGULATE THE SALE OF PROPERTY UNDER SPECIAL POWERS

INSERTED IN OR ANNEXED TO REAL-ESTATE MORTGAGES

SECTION 1. When a sale is made under a special power inserted in or attached to any real-estate
mortgage hereafter made as security for the payment of money or the fulfillment of any other
obligation, the provisions of the following election shall govern as to the manner in which the sale
and redemption shall be effected, whether or not provision for the same is made in the power.

SECTION 2. Said sale cannot be made legally outside of the province in which the property sold is
situated; and in case the place within said province in which the sale is to be made is subject to
stipulation, such sale shall be made in said place or in the municipal building of the municipality in
which the property or part thereof is situated.

SECTION 3. Notice shall be given by posting notices of the sale for not less than twenty days in at
least three public places of the municipality or city where the property is situated, and if such
property is worth more than four hundred pesos, such notice shall also be published once a week
for at least three consecutive weeks in a newspaper of general circulation in the municipality or city.

SECTION 4. The sale shall be made at public auction, between the hours or nine in the morning
and four in the afternoon; and shall be under the direction of the sheriff of the province, the justice
or auxiliary justice of the peace of the municipality in which such sale has to be made, or a notary
public of said municipality, who shall be entitled to collect a fee of five pesos each day of actual
work performed, in addition to his expenses.

SECTION 5. At any sale, the creditor, trustee, or other persons authorized to act for the creditor,
may participate in the bidding and purchase under the same conditions as any other bidder, unless
the contrary has been expressly provided in the mortgage or trust deedunder which the sale is made.

SECTION 6. In all cases in which an extrajudicial sale is made under the special power herein
before referred to, the debtor, his successors in interest or any judicial creditor or judgment creditor
of said debtor, or any person having a lien on the property subsequent to the mortgage or deed of
trust under which the property is sold, may redeem the same at any time within the term of one year
from and after the date of the sale; and such redemption shall be governed by the provisions of
sections four hundred and sixty-four to four hundred and sixty-six, inclusive, of the Code of Civil
Procedure, in so far as these are not inconsistent with the provisions of this Act.

SECTION 7. In any sale made under the provisions of this Act, the purchaser may petition the
Court of First Instance of the province or place where the property or any part thereof is situated, to
give him possession thereof during the redemption period, furnishing bond in an amount equivalent
to the use of the property for a period of twelve months, to indemnify the debtor in case it be
shown that the sale was made without violating the mortgage or without complying with the
requirements of this Act. Such petition shall be made under oath and filed in form of an ex parte
motion in the registration or cadastral proceedings if the property is registered, or in special
proceedings in the case of property registered under the Mortgage Law or under section one
hundred and ninety-four of the Administrative Code, or of any other real property encumbered with
a mortgage duly registered in the office of any register of deeds in accordance with any existing law,
and in each case the clerk of the court shall, upon the filing of such petition, collect the fees
specified in paragraph eleven of section one hundred and fourteen of Act Numbered Four hundred
and ninety-six, as amended by Act Numbered Twenty-eight hundred and sixty-six, and the court
shall, upon approval of the bond, order that a writ of possession issue, addressed to the sheriff of
the province in which the property is situated, who shall execute said order immediately.

Section 8. The debtor may, in the proceedings in which possession was requested, but not later than
thirty days after the purchaser was given possession, petition that the sale be set aside and the writ of
possession cancelled, specifying the damages suffered by him, because the mortgage was not
violated or the sale was not made in accordance with the provisions hereof, and the court shall take
cognizance of this petition in accordance with the summary procedure provided for in section one
hundred and twelve of Act Numbered Four hundred and ninety-six; and if it finds the complaint of
the debtor justified, it shall dispose in his favor of all or part of the bond furnished by the person
who obtained possession. Either of the parties may appeal from the order of the judge in accordance
with section fourteen of Act Numbered Four hundred and ninety-six; but the order of possession
shall continue in effect during the pendency of the appeal.

Section 9. When the property is redeemed after the purchaser has been given possession, the
redeemer shall be entitled to deduct from the price of redemption any rentals that said purchaser
may have collected in case the property or any part thereof was rented; if the purchaser occupied the
property as his own dwelling, it being town property, or used it gainfully, it being rural property, the
redeemer may deduct from the price the interest of one per centum per month provided for in
section four hundred and sixty-five of the Code of Civil Procedure.

SECTION 10. This Act shall take effect on its approval.

Approved: March 6, 1924

_______________________________________________________________________
 ACT NO. 1508

AN ACT PROVIDING FOR THE MORTGAGING OF PERSONAL PROPERTY AND

FOR THE REGISTRATION OF THE MORTGAGES SO EXECUTED

Section 1. The short title of this Act shall be "The Chattel Mortgage Law."

Sec. 2. All personal property shall be subject to mortgage, agreeably to the provisions of this Act,
and a mortgage executed in pursuance thereof shall be termed chattel mortgage.

Sec. 3. Chattel mortgage defined. A chattel mortgage is a conditional sale of personal property as
security for the payment of a debt, or the performance of some other obligation specified therein,
the condition being that the sale shall be void upon the seller paying to the purchaser a sum of
money or doing some other act named. If the condition is performed according to its terms the
mortgage and sale immediately become void, and the mortgagee is thereby divested of his title.

Sec. 4. Validity. A chattel mortgage shall not be valid against any person except the mortgagor,
his executors or administrators, unless the possession of the property is delivered to and retained by
the mortgagee or unless the mortgage is recorded in the office of the register of deeds of the
province in which the mortgagor resides at the time of making the same, or, if he resides without the
Philippine Islands, in the province in which the property is situated: Provided, however, That if the
property is situated in a different province from that in which the mortgagor resides, the mortgage
shall be recorded in the office of the register of deeds of both the province in which the mortgagor
resides and that in which the property is situated, and for the purposes of this Act the city of Manila
shall be deemed to be a province.

Sec. 5. Form. A chattel mortgage shall be deemed to be sufficient when made substantially in
accordance with the following form, and shall be signed by the person or persons executing the
same, in the presence of two witnesses, who shall sign the mortgage as witnesses to the execution
thereof, and each mortgagor and mortgagee, or, in the absence of the mortgagee, his agent or
attorney, shall make and subscribe an affidavit in substance as hereinafter set forth, which affidavit,
signed by the parties to the mortgage as above stated, and the certificate of the oath signed by the
authority administering the same, shall be appended to such mortgage and recorded therewith.

FORM OF CHATTEL MORTGAGE AND AFFIDAVIT.

"This mortgage made this ____ day of ______19____ by _______________, a resident of the
municipality of ______________, Province of ____________, Philippine Islands mortgagor, to
____________, a resident of the municipality of ___________, Province of ______________,
Philippine Islands, mortgagee, witnesseth:
"That the said mortgagor hereby conveys and mortgages to the said mortgagee all of the following-
described personal property situated in the municipality of ______________, Province of
____________ and now in the possession of said mortgagor, to wit:

(Here insert specific description of the property mortgaged.)

"This mortgage is given as security for the payment to the said ______, mortgagee, of promissory
notes for the sum of ____________ pesos, with (or without, as the case may be) interest thereon at
the rate of ___________ per centum per annum, according to the terms of __________, certain
promissory notes, dated _________, and in the words and figures following (here insert copy of the
note or notes secured).

"(If the mortgage is given for the performance of some other obligation aside from the payment of
promissory notes, describe correctly but concisely the obligation to be performed.)

"The conditions of this obligation are such that if the mortgagor, his heirs, executors, or
administrators shall well and truly perform the full obligation (or obligations) above stated according
to the terms thereof, then this obligation shall be null and void.

"Executed at the municipality of _________, in the Province of ________, this _____ day of
19_____

____________________
(Signature of mortgagor.)

"In the presence of

"_________________
"_________________
(Two witnesses sign here.)

FORM OF OATH.

"We severally swear that the foregoing mortgage is made for the purpose of securing the obligation
specified in the conditions thereof, and for no other purpose, and that the same is a just and valid
obligation, and one not entered into for the purpose of fraud."

FORM OF CERTIFICATE OF OATH.

"At ___________, in the Province of _________, personally appeared ____________, the parties
who signed the foregoing affidavit and made oath to the truth thereof before me.

"_____________________________"
(Notary public, justice of the peace, 1 or other officer, as the case may be.)

Sec. 6. Corporations. When a corporation is a party to such mortgage the affidavit required may
be made and subscribed by a director, trustee, cashier, treasurer, or manager thereof, or by a person
authorized on the part of such corporation to make or to receive such mortgage. When a
partnership is a party to the mortgage the affidavit may be made and subscribed by one member
thereof.

Sec. 7. Descriptions of property. The description of the mortgaged property shall be such as to
enable the parties to the mortgage, or any other person, after reasonable inquiry and investigation, to
identify the same.

If the property mortgaged be large cattle," as defined by section one of Act Numbered Eleven and
forty-seven, 2 and the amendments thereof, the description of said property in the mortgage shall
contain the brands, class, sex, age, knots of radiated hair commonly known as remolinos, or
cowlicks, and other marks of ownership as described and set forth in the certificate of ownership of
said animal or animals, together with the number and place of issue of such certificates of
ownership.

If growing crops be mortgaged the mortgage may contain an agreement stipulating that the
mortgagor binds himself properly to tend, care for and protect the crop while growing, and faithfully
and without delay to harvest the same, and that in default of the performance of such duties the
mortgage may enter upon the premises, take all the necessary measures for the protection of said
crop, and retain possession thereof and sell the same, and from the proceeds of such sale pay all
expenses incurred in caring for, harvesting, and selling the crop and the amount of the indebtedness
or obligation secured by the mortgage, and the surplus thereof, if any shall be paid to the mortgagor
or those entitled to the same.

A chattel mortgage shall be deemed to cover only the property described therein and not like or
substituted property thereafter acquired by the mortgagor and placed in the same depository as the
property originally mortgaged, anything in the mortgage to the contrary notwithstanding.

Sec. 8. Failure of mortgagee to discharge the mortgage. If the mortgagee, assign, administrator,
executor, or either of them, after performance of the condition before or after the breach thereof, or
after tender of the performance of the condition, at or after the time fixed for the performance, does
not within ten days after being requested thereto by any person entitled to redeem, discharge the
mortgage in the manner provided by law, the person entitled to redeem may recover of the person
whose duty it is to discharge the same twenty pesos for his neglect and all damages occasioned
thereby in an action in any court having jurisdiction of the subject-matter thereof.

Sec. 9-12.

Sec. 13. When the condition of a chattel mortgage is broken, a mortgagor or person holding a
subsequent mortgage, or a subsequent attaching creditor may redeem the same by paying or
delivering to the mortgagee the amount due on such mortgage and the reasonable costs and
expenses incurred by such breach of condition before the sale thereof. An attaching creditor who so
redeems shall be subrogated to the rights of the mortgagee and entitled to foreclose the mortgage in
the same manner that the mortgagee could foreclose it by the terms of this Act.

Sec. 14. Sale of property at public auction; Officer's return; Fees; Disposition of proceeds. The
mortgagee, his executor, administrator, or assign, may, after thirty days from the time of condition
broken, cause the mortgaged property, or any part thereof, to be sold at public auction by a public
officer at a public place in the municipality where the mortgagor resides, or where the property is
situated, provided at least ten days' notice of the time, place, and purpose of such sale has been
posted at two or more public places in such municipality, and the mortgagee, his executor,
administrator, or assign, shall notify the mortgagor or person holding under him and the persons
holding subsequent mortgages of the time and place of sale, either by notice in writing directed to
him or left at his abode, if within the municipality, or sent by mail if he does not reside in such
municipality, at least ten days previous to the sale.

The officer making the sale shall, within thirty days thereafter, make in writing a return of his doings
and file the same in the office of the register of deeds where the mortgage is recorded, and the
register of deeds shall record the same. The fees of the officer for selling the property shall be the
same as in the case of sale on execution as provided in Act Numbered One hundred and ninety, 4
and the amendments thereto, and the fees of the register of deeds for registering the officer's return
shall be taxed as a part of the costs of sale, which the officer shall pay to the register of deeds. The
return shall particularly describe the articles sold, and state the amount received for each article, and
shall operate as a discharge of the lien thereon created by the mortgage. The proceeds of such sale
shall be applied to the payment, first, of the costs and expenses of keeping and sale, and then to the
payment of the demand or obligation secured by such mortgage, and the residue shall be paid to
persons holding subsequent mortgages in their order, and the balance, after paying the mortgages,
shall be paid to the mortgagor or person holding under him on demand.

If the sale includes any "large cattle," a certificate of transfer as required by section sixteen of Act
Numbered Eleven hundred and forty-seven 5 shall be issued by the treasurer of the municipality
where the sale was held to the purchaser thereof.

Sec. 15.

Sec. 16. This Act shall take effect on August first, nineteen hundred and six.